1. Liabilities arising from guarantees and pledges in favor of THIrd parties
Contingent liabilities as at December 31, 2014, amounted to CHF 198.9 million (CHF 178.6 million in 2013). 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.
2. Investments
The investments in subsidiaries are listed on page 69 of the notes to the consolidated financial statements.
3. 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 |
4. Acquisition and sale of treasury stock (registered shares [RS] and participation certificates [PC])
| 2014 | 2013 | |||
| Inventory of treasury stock | RS | PC | RS | PC |
| Inventory as at January 1 | 1,853 | 1,682 | 1,696 | 22,253 |
| Additions | 750 | – | 870 | – |
| Retirements | – 68 | – | – 124 | – |
| Share buy-back program 1) | 23 | 11,048 | – | 1,682 |
| Cancellation of shares | – | – | – 589 | – 22,253 |
| Inventory as at December 31 | 2,558 | 12,730 | 1,853 | 1,682 |
| Average cost of additions (in CHF) | 56,034 | – | 43,913 | – |
| Average sales price of retirements (in CHF) | 50,538 | – | 37,199 | – |
| Average cost of share buy-back program (in CHF) | 50,076 | 4,254 | – | 3,843 |
| Average cost of cancellation of shares (in CHF) | – | – | 33,008 | 2,910 |
1) Own treasury stock (Share buy-back program) is valued at historical costs.
5. Conditional and approved capital
As of December 31, 2014, the conditional capital had a total of 528,906 participation certificates (559,661 participation certificates in 2013) with a par value of CHF 10.–. Of this total, 174,456 (205,211 in 2013) are reserved for employee stock option programs and the remaining 354,450 (354,450 in 2013) for capital market transactions. In the year under review, a total of 30,755 employee stock options (53,076 employee stock options in 2013) were exercised at an average price of CHF 2,409.56 (CHF 2,454.23 in 2013).
6. Reserves
| Reserves from Capital Contribution | Special Reserves | ||||
| CHF thousand | Requested | Approved | Not approved 1) | Total | Total |
| Balance as at January 1, 2013 | – | 122,223 | 7,498 | 129,721 | 282,421 |
| Reserve from retained earnings | – | – | – | – | 150,000 |
| Additions during the year | 128,061 | – | 1,668 | 129,729 | – 1,668 |
| Treasury stock | – | – | – | – | – 35,226 |
| Share buy-back program | – | – | – | – | – 6,465 |
| Cancellation of shares | – | – | – | – | 281 |
| Proposed dividend distribution | – | – 120,990 | – | – 120,990 | – |
| Undistributed dividends on own registered shares and participation certificates | – | 2,109 | – | 2,109 | – |
| Options exercised from January 1 to April 24, 2013 | – | – 1,834 | – | – 1,834 | – |
| Balance as at December 31, 2013 | 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 |
1) The Swiss tax administration (FTA) has not yet approved the capital transaction costs of TCHF 10,168 as reserves from capital contribution. This practice may be changed in the future.
7. Mandatory disclosure of interest positions pursuant to Art. 663c CO (Swiss Code of obligation)
As of December 31, 2014, Chocoladefabriken Lindt & Sprüngli AG disclosed the following shareholders (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 Vorsorgeeinrichtung der Chocoladefabriken Lindt & Sprüngli Aktiengesellschaft”, “Lindt Cocoa Foundation” and “Lindt Chocolate Competence Foundation”. As a group they held 20.3% of the voting rights of the Company (20.9% in 2013).
The participation of the Board of Directors, Group Management and Extended Group Management as at December 31, 2014, according to Art. 663c CO is as follows:
| Number of registered shares (RS) | Number of participation certificates (PC) | Number of options | |||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||
| E. Tanner | Chairman and CEO | 3,103 | 3,039 | 6,943 | 8,967 | 19,750 | 17,750 |
| A. Bulgheroni | Member of the Board | 1,000 | 1,000 | – | – | 5,900 | 5,900 |
| Dr K. Widmer 1) | Member of the Board | – | 35 | – | – | – | – |
| Dkfm E. Gürtler | Member of the Board | – | – | – | – | – | – |
| Dr R. K. Sprüngli | Member of the Board | 1,092 | 1,090 | – | – | – | – |
| Dr F. P. Oesch | Member of the Board | 13 | 17 | – | – | – | – |
| P. Schadeberg-Herrmann | Member of the Board | 131 | – | – | – | – | – |
| U. Sommer | Group Management | 12 | 12 | 140 | 1,449 | 7,450 | 9,369 |
| Dr D. Weisskopf | Group Management | 7 | 5 | 2,400 | 1,800 | 9,650 | 10,550 |
| A. Pfluger | Group Management | 5 | 5 | 30 | 30 | 5,188 | 8,213 |
| R. Fallegger | Group Management | 5 | 5 | 1,969 | 1,612 | 6,035 | 5,985 |
| K. Kitzmantel | Extended Group Management | 5 | 5 | 100 | 100 | 4,338 | 4,938 |
| A. Lechner | Extended Group Management | 6 | 6 | 53 | 53 | 5,650 | 6,900 |
| T. Linemayr | Extended Group Management | 4 | 4 | 77 | 77 | 5,500 | 5,350 |
| Total | 5,383 | 5,223 | 11,712 | 14,088 | 69,461 | 74,955 | |
1) Mr. Dr K. Widmer left the Lindt & Sprüngli Group in 2014, therefore no participation is reported for 2014.
All other disclosures relating to the remuneration of the Board of Directos, Group Management and Extended Group Management required by Art. 663Bbis CO are provided in the Compensation Report.
8. Risk management disclosures
Chocoladefabriken Lindt & Sprüngli AG is fully integrated into the Group-wide risk assessment process of the Lindt & Sprüngli Group. This Group risk assessment process also addresses the nature and scope of business activities and the specific risks of Chocoladefabriken Lindt & Sprüngli AG refer to the notes of the consolidated financial statements.
9. Accounting regulation
Chocoladefabriken Lindt & Sprüngli AG has not early adopted the new provisions on accounting and financial reporting of the Swiss Code of Obligations. The new accounting law must be applied from January 1, 2015 onwards.