1. INTRODUCTION
The financial statements of Chocladefabriken Lindt & Sprüngli AG, with registered office in Kilchberg, were prepared in accordance with the Swiss accounting legislation of the Swiss Code of Obligations (CO).
Chocoladefabriken Lindt & Sprüngli AG is presenting consolidated financial statements according to an internationally accepted reporting standard. Therefore, theses financial statements and notes do not include additional disclosures, cash flow statement and management report, according to Art. 961d, paragraph 1 CO.
The structure of the 2014 financial statements have been adjusted in order to be comparable with the 2015 presentation.
2. ACCOUNTING POLICIES
Fixed assets
Fixed assets are valued at historical cost less impairment. The intangible assets include mainly the intelectual property rights of Russell Stover Candies, LLC, acquired in 2014.
Treasury shares
Treasury shares are recognized at acquisition cost and are presented as a deduction from shareholder's equity. Upon sale of treasury shares, the realized gain or loss is recognized through the income statement as income or expense from financial assets.
Financial liabilities
Financial liabilities are recognized at nominal value. Agio as well as disagio and also bond issue costs are booked in income statement.
Dividends and other income from subsidiaries
Dividend income resulting from financial investments is recorded upon approval of the dividend distribution.
“Other income from subsidiaries” mainly consist of license fees, which are recognized in the period they fall due.
Foreign currency translation
The foreign exchange rates are listed on page 79 of the notes to the consolidation financial statements. In deviation to the table on page 79 transactions in the income statement are booked at the respective month-end rate.
3. Liabilities arising from guarantees and pledges in favor of THIrd parties
Contingent liabilities as at December 31, 2015, amounted to CHF 271.5 million (CHF 198.9 million in 2014). This figure comprises guarantees given to counterparties providing credit lines for borrowings and hedging to subsidiaries.
The companies, Chocoladefabriken Lindt & Sprüngli AG, Chocoladefabriken Lindt & Sprüngli (Schweiz) AG, Lindt & Sprüngli Financière AG, Lindt & Sprüngli (International) AG, and Indestro AG together form a Swiss-VAT group. According to Art. 15, paragraph 1, item c of the Swiss Value Added Tax Law and Art. 22, paragraphs 1 and 2 of the Swiss Value Added Tax Ordinance, all members participating in VAT-group taxation are jointly liable for all taxes owed by the VAT group (including interest), which arose during their period of membership.
4. Investments
The investments in subsidiaries are listed on page 77 of the notes to the consolidated financial statements.
5. Bonds
In September 2014 the Company placed bonds of CHF 1 billion in order to finance the acquisition of Russell Stover Candies, LLC. The bonds consist of the following three tranches:
| CHF million | Interest rate | Term | Notional amount |
|---|---|---|---|
| Floating rate bond | variable | 2014–2017 | 250.0 |
| Straight bond | 0.5% | 2014–2020 | 500.0 |
| Straight bond | 1.0% | 2014–2024 | 250.0 |
| Total | 1,000.0 |
6. Acquisition and sale of registered shares and participation certificates
| 2015 | 2014 | |||
| Inventory of treasury stock | Registered shares | Participation certificates | Registered shares | Participation certificates |
| Inventory as at January 1 | 2,558 | 12,730 | 1,853 | 1,682 |
| Additions | 139 | – | 750 | – |
| Retirements | – 90 | – | – 68 | – |
| Share buy-back program | – | – | 23 | 11,048 |
| Cancellation of shares | – 23 | – 12,730 | – | – |
| Inventory as at December 31 | 2,584 | – | 2,558 | 12,730 |
| Average cost of additions (in CHF) | 72,316 | – | 56,034 | – |
| Average sales price of retirements (in CHF) | 58,171 | – | 50,538 | – |
| Average cost of share buy-back program (in CHF) | – | – | 50,076 | 4,254 |
| Average cost of cancellation of shares (in CHF) | 50,076 | 4,200 | – | – |
7. Reserves
| Reserves from capital contribution | Special reserves | ||||
| CHF thousand | Requested | Approved | Not approved 1) | Total | Total |
| Balance as at January 1, 2014 | 128,061 | 1,508 | 9,166 | 138,735 | 389,343 |
| Reserve from retained earnings | – | – | – | – | 170,000 |
| Additions during the year | 72,794 | – | 1,002 | 73,796 | – 1,002 |
| FTA approval March 17, 2014 | |||||
| Approved reserves from capital contribution | – 128,061 | 128,061 | – | – | – |
| Treasury stock | – | – | – | – | – 40,392 |
| Share buy-back program | – | – | – | – | – 48,150 |
| Proposed dividend distribution | – | – 126,896 | – | – 126,896 | – |
| Undistributed dividends on own registered shares and participation certificates | – | 1,421 | – | 1,421 | – |
| Options exercised from January 1 to April 30, 2014 | – | – 869 | – | – 869 | – |
| Balance as at December 31, 2014 | 72,794 | 3,225 | 10,168 | 86,187 | 469,799 |
| Reclassification reserves for own shares | – | – | – | – | 105,232 |
| Reclassification reserves for own shares (Share buy-back program) | – | – | – | – | 54,615 |
| Balance as at December 31, 2014 (new accounting law) | 72,794 | 3,225 | 10,168 | 86,187 | 629,646 |
| Reserve from retained earnings | – | – | – | – | 120,000 |
| Additions during the year | 101,726 | – | 1,508 | 103,234 | – 1,508 |
| Approved reserves from capital contribution | |||||
| FTA approval March 19, 2015 | – 72,794 | 72,794 | – | – | – |
| FTA approval February 16, 2016 | – 101,726 | 101,726 | – | – | – |
| Share buy-back program | – | – | – | – | – 54,615 |
| Cancellation of shares | – | – | – | – | 130 |
| Reclassification of valuation of treasury shares | – | – | – | – | – 39,670 |
| Proposed dividend distribution | – | – 75,308 | – | – 75,308 | – |
| Undistributed dividends on own registered shares and participation certificates | – | 1,229 | – | 1,229 | – |
| Options exercised from January 1 to April 29, 2015 | – | – 486 | – | – 486 | – |
| Balance as at December 31, 2015 | – | 103,180 | 11,676 | 114,856 | 653,983 |
1) The Swiss federal tax administration (FTA) has not yet approved the capital transaction costs of TCHF 11,676 as reserves from capital contribution. This practice may be changed in the future.
8. Mandatory disclosure of interest positions pursuant to Art. 663c CO
As of December 31, 2015, Chocoladefabriken Lindt & Sprüngli AG disclosed the following shareholders known to the Company (in accordance with Art. 663c CO and the articles of association), which own voting shares of more than 4 %: “Fonds für Pensionsergänzungen of Chocoladefabriken Lindt & Sprüngli AG”, “Finanzierungsstiftung für die Vorsorgeeinrichtungen der Chocoladefabriken Lindt & Sprüngli AG”, “Lindt Cocoa Foundation” and “Lindt Chocolate Competence Foundation”. As a group they held 20.2 % of the voting rights of the Company (20.3 % in 2014).
The participation of the Board of Directors, Group Management and Extended Group Management as at December 31, 2015, according to Art. 663c CO is as follows:
| Number of registered shares (RS) | Number of participation certificates (PC) | Number of options | |||||
| 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||
| E. Tanner | Chairman and CEO | 3,103 | 3,103 | 9,000 | 6,943 | 12,250 | 19,750 |
| A. Bulgheroni | Member of the Board | 1,000 | 1,000 | – | – | 1,900 | 5,900 |
| Dkfm E. Gürtler | Member of the Board | 1 | – | 50 | – | – | – |
| Dr R. K. Sprüngli | Member of the Board | 1,092 | 1,092 | – | – | – | – |
| Dr F. P. Oesch | Member of the Board, deceased in 2015 | – | 13 | – | – | – | – |
| P. Schadeberg-Herrmann | Member of the Board | 115 | 131 | – | – | – | – |
| U. Sommer | Group Management | 12 | 12 | 40 | 140 | 6,150 | 7,450 |
| Dr D. Weisskopf | Group Management | 7 | 7 | 2,400 | 2,400 | 7,475 | 9,650 |
| A. Pfluger | Group Management | 5 | 5 | 30 | 30 | 5,100 | 5,188 |
| R. Fallegger | Group Management | 5 | 5 | 1,154 | 1,969 | 4,088 | 6,035 |
| K. Kitzmantel | Extended Group Management | 5 | 5 | 5 | 100 | 4,088 | 4,338 |
| A. Lechner | Extended Group Management | 6 | 6 | 56 | 53 | 5,178 | 5,650 |
| T. Linemayr | Extended Group Management | 4 | 4 | 77 | 77 | 4,967 | 5,500 |
| Total | 5,355 | 5,383 | 12,812 | 11,712 | 51,196 | 69,461 | |
All other disclosures relating to the remuneration of the Board of Directos, Group Management and Extended Group Management are provided in the Compensation Report.
9. Number of Employees
Chocoladefabriken Lindt & Sprüngli AG has no employees.