Financial reportConsolidated financial statementsNotes to the consolidated financial statements

Financial report Notes to the consolidated financial statements

Notes to the consolidated financial statements

1 Segment information

The Group Executive Board is the Group’s chief operating decision maker and reviews the results from a product-related as well as a geographical perspective. As a result of the sale of Bank am Bellevue, Bellevue Group is focusing exclusively on the Asset Management business unit and has therefore reported only one reportable segment since December 31, 2019. The segment consists of the operating business units Bellevue Asset Management, StarCapital and Bellevue Private Markets. The offering includes a broad-based range of investment funds as well as investment solutions for institutional, intermediary and private clients. The segment’s investment philosophy is characterized by a purely active management approach. Bellevue Asset Management has a clear focus on managing equity portfolios for selected sector and regional strategies, based on a fundamental and research-driven stock picking approach («bottom up»). In contrast, StarCapital AG pursues a holistic asset management approach based on quantitative and experience-driven investment approaches with pronounced anti-cyclicality. Its well-diversified product offering in the areas of asset-managed strategies, global bond and equity strategies, and multi-asset class solutions thus exhibits a high degree of complementarity. Bellevue Private Markets specializes in developing exclusive investment opportunities in unlisted companies for its investor group. In addition, it acts as investment advisor for private equity funds. This represents a further diversification of the investment universe with low correlation to the capital markets. All three business units operate in similar regions. Group Management monitors the results of the three business units both on a consolidated basis and separately.

The geographical breakdown of operating income is as follows:

CHF 1 000	1.1.–31.12.2020	1.1.–31.12.2019
Operating income
Switzerland	94 862	100 715
Germany	6 999	9 687
Other countries	10 051	948
Total	111 912	111 350
thereof from continuing operations	109 851	101 368
thereof from discontinued operations	2 061	9 982

All income from discontinued operations was managed in Switzerland in the period under review and in the previous period.

Total non-current assets (including goodwill and excluding other financial assets at fair value) are as follows:

CHF 1 000	31.12.2020	31.12.2019
Non-current assets
Switzerland	38 304	41 412
Germany	19 173	30 372
Other countries	133	429
Total	57 610	72 213

2 Details on the consolidated income statement

2.1 Revenues from asset management services

CHF 1 000	1.1.–31.12.2020	1.1.–31.12.2019
Management fees	102 423	95 370
Performance fees	3 818	6 256
Other commission income	2 993	1 080
Fee and commission expense	– 415	– 550
Revenues from asset management services	108 819	102 156

Management fees are generated from asset management mandates with listed investment companies, regulated funds in various countries, private equity funds or institutional counterparties. The fees are mostly collected on a monthly basis.

Various mandates include performance fees. These are only taken into account when the performance period has been completed. For regulated funds, this is the calendar year. In some cases, mandates are invoiced on a quarterly basis. In the case of private equity funds, depending on the partnership agreement, this takes place when the fund is redeemed or dissolved.

Other commission income includes transaction-related fees.

2.2 Net other income

CHF 1 000	1.1.–31.12.2020	1.1.–31.12.2019
Dividend income	494	524
Interest income	44	8
Interest expenses	– 103	– 101
Net foreign exchange income/losses	– 613	– 186
Other	139	303
Total net other income	– 39	548

2.3 Personnel expenses

CHF 1 000	1.1.–31.12.2020	1.1.–31.12.2019 restated*
Fix and variable salaries	50 113	45 054
Pension cost	– 2 864	– 1 620
Other social benefits	4 281	3 693
Other personnel expenses	364	667
Total personnel expenses	51 894	47 794

^*) The previous-year period has been adjusted. We refer to the statement on the correction of errors in section 4.2.
¹⁾ For further details see note 3.8.

The compensation system for Bellevue Group employees is conceived to motivate employees at all operating units to do excellent work. It is a compensation model based on «personal ownership» and merit system principles. In setting fixed salaries, a restrained policy prevails from a business point of view. On the other hand, variable compensation is offered under an attractive ownership-oriented profit-sharing plan. This profit-sharing plan is tied directly to Bellevue Group’s operating results. Moreover, part of this bonus is paid in the form of restricted stock awards and shares of in-house products («we eat our own cooking»). This system is conducive to a culture of high performance with a long-term horizon.

The basis for calculating Bellevue Group’s variable compensation pool is adjusted consolidated earnings before taxes.

A fixed portion of the adjusted Group profit before taxes is allocated to the employees (total pool of variable compensation). Due to the direct link between the Group's results and the total pool of variable compensation, there is a mechanism in place to ensure that variable compensation is commensurate with the Group's operating performance (variabilization of profit-sharing).

2.4 Operating expenses

CHF 1 000	1.1.–31.12.2020	1.1.–31.12.2019
Occupancy and maintenance expenses	707	731
IT and telecommunications	3 161	3 076
Travel and representation, PR, advertising	2 557	4 070
Consulting and audit fees	2 124	1 820
Research expenses	2 071	2 266
Other operating expenses	1 085	1 148
Total Other operating expenses	11 705	13 111

2.5 Depreciation and amortization

CHF 1 000	1.1.–31.12.2020	1.1.–31.12.2019
Depreciation of property and equipment	667	284
Depreciation of rights of use	2 196	1 943
Depreciation of intangible fixed assets	1 914	2 020
Total Depreciation and amortization	4 777	4 247

2.6 Valuation adjustments and provisions

CHF 1 000	1.1.–31.12.2020	1.1.–31.12.2019
Value adjustment Goodwill (Impairment)	7 434	7 392
Value adjustment intangible assets (Impairment)	2 144	949
Total Valuation adjustments and provisions	9 578	8 341

For further details, please refer to the comments under section 3.6.

2.7 Tax

2.7.1 Income taxes

CHF 1 000	1.1.–31.12.2020	1.1.–31.12.2019 restated*
Current income taxes	8 675	8 295
Deferred income taxes	200	120
Total	8 875	8 415

Tax income reconciliation
Pre-tax result	31 897	27 875
Expected rate of income tax 1)	19%	19%
Expected income tax	6 060	5 296
Reasons for higher/lower amounts:
Difference between applicable local tax rates and assumed mixed tax rate	273	650
Non-deductible expenses	2 196	2 469
Tax income unrelated to accounting period	346	–
Total income taxes	8 875	8 415

^*) The previous-year period has been adjusted. We refer to the statement on the correction of errors in section 4.2.
¹⁾ The expected income tax rate is a mixed tax rate estimated by considering all the different businesses of the Group.


CHF 1 000	1.1.–31.12.2020
Tax effect of other comprehensive income	Amount before taxes	Tax income/ (expense)	Amount after taxes
Currency translation adjustments	– 290	–	– 290
Gains and losses arising on revaluation of financial assets at fair value through other comprehensive income	– 104	20	– 84
Remeasurement of post-employment benefit obligations IAS 19	– 460	87	– 373
Total	– 854	107	– 747

CHF 1 000	1.1.–31.12.2019
Tax effect of other comprehensive income	Amount before taxes	Tax income/ (expense)	Amount after taxes
Currency translation adjustments	– 1 443	–	– 1 443
Gains and losses arising on revaluation of financial assets at fair value through other comprehensive income	4 298	– 32	4 266
Remeasurement of post-employment benefit obligations IAS 19	– 2 432	470	– 1 962
Total	423	438	861

2.7.2 Deferred tax assets

CHF 1 000	Provisions and pension obligations	Other	Total
Balance as of 1.1.2019	270	333	603
Credited/(charged)
to profit or loss	– 526	249	– 277
to other comprehensive income	419	–	419
directly to equity	– 163	– 115	– 278
Currency translation adjustments	–	– 2	– 2
Balance as of 31.12.2019	–	465	465

Balance as of 1.1.2020	–	465	465
Credited/(charged)
to profit or loss	–	– 27	– 27
Currency translation adjustments	–	– 5	– 5
Balance as of 31.12.2020	–	433	433

CHF 1 000	31.12.2020	31.12.2019
Expiry of unrecognized loss carryforwards
1 to 5 years	12 605	12 605
More than 5 years	3 404	–
Total	16 009	12 605

The non-capitalized loss carryforwards originate mainly from Bellevue Group AG. Due to the tax deduction for investments, no income tax benefit will most likely arise for Bellevue Group if these loss carryforwards are utilized. Based on this fact, no deferred tax asset was capitalized.

2.7.3 Deferred tax liabilities

CHF 1 000	Intangible assets	Assets from pension plans	Other 1)	Total
Balance as of 1.1.2019	3 361	–	2 115	5 476
Charged/(credited)
to profit or loss	– 776	68	551	– 157
to other comprehensive income	–	–	– 15	– 15
Currency translation adjustments	– 48	–	– 1	– 49
Business combination	380	–	–	380
Balance as of 31.12.2019	2 917	68	2 650	5 635

Balance as of 1.1.2020	2 917	68	2 650	5 635
Charged/(credited)
to profit or loss	– 1 069	887	355	173
to other comprehensive income	–	2	– 20	– 18
directly to equity	125	–	–	125
Currency translation adjustments	– 20	–	16	– 4
Business combination	44	–	–	44
Balance as of 31.12.2020	1 996	957	3 001	5 954

1) Other deferred tax assets refer to the result of the adoption of IFRS 2 (share-based payment) and IAS 19 (other long-term employee benefits).

3 Details on the consolidated balance sheet

3.1 Financial assets and financial liabilities

3.1.1 Fair value of financial instruments

	31.12.2020	31.12.2019
CHF 1 000	Book value	Book value
Assets
Financial investments
Investments in own products	22 297	28 475
Investments in own products to fulfill long-term incentive plans	19 081	14 454
Derivative financial instruments	–	30
Other investments in equity instruments	1 306	4 411
Assets classified as held of sale	–	6 935
Financial assets at fair value through profit and loss	42 684	54 305

Financial investments
Investments in own products	989	16
Other investments in equity instruments	10 195	–
Financial assets with OCI fair value measurement	11 184	16

Total financial assets at fair value	53 868	54 321

Liabilities
Other financial liabilities	91	–
Liabilities directly associated with assets held for sale	–	218
Financial liabilities at fair value through profit and loss	91	218

Total financial liabilities at fair value	91	218

The fair value of other financial instruments measured at amortised cost does not differ significantly from their book value.

3.1.2 Valuation methods of financial instruments

CHF 1 000	Level 1	Level 2	Level 3	Total
31.12.2020 Assets
Financial investments
Investments in own products	2 794	13 944	6 548	23 286
Investments in own products to fulfill long-term incentive plans	19 081	–	–	19 081
Other investments in equity instruments	541	159	10 801	11 501
Financial assets at fair value	22 416	14 103	17 349	53 868

Liabilities
Other financial liabilities	–	11	80	91
Financial liabilities at fair value	–	11	80	91

CHF 1 000	Level 1	Level 2	Level 3	Total
31.12.2019 Assets
Financial investments
Investments in own products	2 941	19 261	6 289	28 491
Investments in own products to fulfill long-term incentive plans	14 454	–	–	14 454
Derivative financial instruments	–	30	–	30
Other investments in equity instruments	1 223	159	3 029	4 411
Assets classified as held of sale	375	6 560	–	6 935
Financial assets at fair value	18 993	26 010	9 318	54 321

Liabilities
Liabilities directly associated with assets held for sale	–	218	–	218
Financial liabilities at fair value	–	218	–	218

No transfer between levels of the fair value hierarchy took place in 2020 or in the previous period.

Level 1 instruments

If a financial instrument is traded in an active market, its fair value is based on listed market prices. In the fair value hierarchy prescribed in IFRS 13, this type of financial instrument is classified as a level 1 instrument. The fair value of these positions corresponds to the current price (e.g. settlement price or closing price) multiplied by the number of units of the financial instruments held.

Level 2 instruments

If there is no active market, the fair value is determined on the basis of valuation models or other generally accepted valuation methods (primarily option pricing and discounted cash flow models). If all the significant inputs can be observed directly or indirectly in the market, the instrument is classified as a level 2 instrument. The valuation models take account of the relevant parameters such as contract specifications, the market price of the underlying asset, foreign exchange rates, yield curves, default risks and volatility.

Level 3 instruments

If at least one significant input cannot be observed directly or indirectly in the market, the instrument is classified as a level 3 instrument. These instruments include private-equity funds and unlisted equity instruments, as well as the contingent purchase price liability. The fair value of private equity funds is determined based on the last available net asset values, less necessary value adjustments according to own assessment. The fair value of unlisted equity instruments is determined primarily based on currently available financial information. Secondarily, depending on the equity security, different multiples based on currently available financial information are used to verify the valuation. If no multiples are applicable, the net asset value is used. The valuation of the contingent purchase price liability is mainly based on the underlying contractual share purchase terms and conditions.

3.1.3 Level 3 financial instruments

CHF 1 000	31.12.2020	31.12.2019
	Financial investments	Financial investments
Holdings at the beginning of the year as 1.1.	9 318	63 368
Investments	8 274	3 356
Redemptions/Payments	–	– 58 139
Losses recognized in the income statement	– 216	– 3 565
Losses recognized in other comprehensive income	– 104	– 80
Gains recognized in the income statement	77	–
Gains recognized in other comprehensive income	–	4 378
Total book value at balance sheet date	17 349	9 318
Unrealised profit/losses from level 3 instruments which were held on the balance sheet date recorded in the income statement in the period	– 139	– 3 565

Key assumptions for the valuation of level 3 financial instruments vary from investment to investment. The following table shows the effect on the valuation when these assumptions are changed:

Sensitivity analysis	Fair value	Key assumption	Changes in key assumption	Change in fair value in CHF 1 000
Private Equity funds	7 154	Net asset value	+ 5 percentage points	358
			– 5 percentage points	– 358
Unlisted equity investments
Primary sensitivity	10 195	Transaction prices	+ 5 percentage points	510
			– 5 percentage points	– 510
Secondary sensitivity	6 000	EBITDA-multiple	+ 1 factor	530
			– 1 factor	– 530
	2 098	Revenue-multiple	+ 1 factor	403
			– 1 factor	– 403
	2 097	Net asset value	+ 5 percentage points	105
			– 5 percentage points	– 105

CHF 1 000	Other financial liabilities	Other financial liabilities
Holdings at the beginning of the year	–	15 525
Investments	80	–
Payments	–	– 5 305
Losses recognized in the income statement	–	71
Losses recognized as other comprehensive income	–	8
Total book value at balance sheet date	80	–
Unrealised profit/losses from level 3 instruments which were held on the balance sheet date and recorded in the income statement in the period	–	–

In the reporting period 2019, the last tranches of the contingent purchase price payments in connection with the acquisition StarCapital AG and MARS Asset Management GmbH were due and paid. This led to a loss of CHF 0.1 million, which was recognized in the income statement. The contingent purchase price payment from the acquisition of REALWERK AG in 2020 of CHF 0.1 million is included in the balance sheet item «Other financial liabilities» and represents the remaining purchase price liability owed. The valuation is mainly based on the underlying share purchase agreement provisions.

3.1.4 Derivative financial instruments

CHF 1 000	Positive replacement value	Negative replacement value	Contract volume
31.12.2020
Forward contracts (OTC) 2)	–	11	2 950
Futures 1)	–	–	3 851
Total	–	11	6 801

31.12.2019
Forward contracts (OTC) 2)	147	212	22 918
Currency swaps 1)	178	6	59 663
Futures 1)	–	–	5 172
Total	325	218	87 753
thereof from continuing operations	30	–	9 708
thereof from discontinued operations	295	218	78 045

1) Level 1: listed on an active market

2) Level 2: valuated on the basis of models with observable input factors

Derivatives are used exclusively for economic hedging purposes and not as speculative investments. However, if derivatives do not meet the criteria for hedge accounting, they are classified as «Financial investments» and recognized at fair value through profit or loss for financial reporting purposes.

3.2 Trade and other receivables

CHF 1 000	31.12.2020	31.12.2019
Trade receivables	15 801	15 794
Prepayments	561	1 034
Other receivables	1 714	2 193
Total	18 076	19 021

3.3 Financial investments

CHF 1 000	31.12.2020	31.12.2019
Investments in own products	23 286	28 491
Investments in own products to fulfill long-term incentive plans	19 081	14 454
Derivative financial instruments	–	30
Other investments in equity instruments	11 501	4 411
Total	53 868	47 386

Current	46 713	40 568
Non-current	7 155	6 818
Total	53 868	47 386

3.4 Other assets

CHF 1 000	31.12.2020	31.12.2019 restated*
Assets related to other employee benefits	15 815	11 329
Assets from pension plans	5 034	355
Other	1 443	519
Total	22 292	12 203

Current	8 363	5 774
Non-current	13 929	6 429
Total	22 292	12 203

^*) The previous-year period has been adjusted. We refer to the statements on the correction of errors in section 4.2.

3.5 Property and equipment

CHF 1 000	IT equipment	Right of use	Other fixed assets	Total
Acquisition cost
Balance as of 1.1.2019	2 750	–	1 849	4 599
First-time adoption effect IFRS 16	–	8 425	–	8 425
Additions	625	796	19	1 440
Disposals	– 1 108	–	–	– 1 108
Balance as of 31.12.2019	2 267	9 221	1 868	13 356
Additions	198	50	231	479
Disposals	– 33	– 790	– 104	– 927
Balance as of 31.12.2020	2 432	8 481	1 995	12 908

Accumulated depreciation
Balance as of 1.1.2019	– 2 186	–	– 1 391	– 3 577
Additions	– 169	– 1 943	– 115	– 2 227
Additions from discontinued operations	– 296	– 158	–	– 454
Disposals	1 108	–	–	1 108
Foreign currency impact	–	48	–	48
Balance as of 31.12.2019	– 1 543	– 2 053	– 1 506	– 5 102
Additions	– 383	– 2 196	– 284	– 2 863
Disposals	33	–	83	116
Foreign currency impact	–	– 27	–	– 27
Balance as of 31.12.2020	– 1 893	– 4 276	– 1 707	– 7 876

Net carrying values
Balance as of 1.1.2019	564	–	458	1 022
Balance as of 31.12.2019	724	7 168	362	8 254
Balance as of 31.12.2020	539	4 205	288	5 032

3.6 Goodwill and other intangible assets

CHF 1 000	31.12.2020	31.12.2019
Goodwill	44 047	51 670
Other intangible assets	8 531	12 289
Total	52 578	63 959

CHF 1 000		Total
Goodwill Acquisition cost
Balance as of 1.1.2019		105 219
Additions		5 830
thereof changes in the scope of consolidation		5 830
Foreign currency effect		– 1 072
Balance as of 31.12.2019		109 977
Foreign currency effect		– 189
Balance as of 31.12.2020		109 788

Accumulated valuation adjustments
Balance as of 1.1.2019		– 50 915
Additions		– 7 392
Balance as of 31.12.2019		– 58 307
Additions		– 7 434
Balance as of 31.12.2020		– 65 741

Net carrying values
Balance as of 1.1.2019		54 304
Balance as of 31.12.2019		51 670
Balance as of 31.12.2020		44 047

The additions to goodwill in the financial year 2019 stem from the acquisition of the 100% investment in adbodmer AG.

Bellevue Group basically examines the value of the goodwill annually, based on the estimated recoverable amount that can be obtained per each single cash-generating unit, or group of such units (depending on allocation). If events or a change of circumstances indicate a possible impairment, the test is carried out more frequently.

The recoverable amount is determined to be the value-in-use and is calculated using the discounted cash flow method. The projected free cash flows for the respective cash-generating units are estimated based on five-year financial plans. The business plans approved by management serve as the basis for these estimates of projected free cash flows. These cash flows are discounted to present value.

The following key parameters and their single components have been taken into account in the discounted cash flow method:

Income on the average assets under management and the expected return on assets (management and performance fees);
Transaction-related income;
Discount rate.

An impairment test was carried out at the end of December 2020. The discount rate used in these calculations was 10.6% (31.12.2019: between 8.9% and 10.0%) and the assumed growth rate was between 1% and 2% (31.12.2019: between 1% and 2%). A further reduction in the assets under management of StarCapital AG in the first half of 2020 and the resulting expected cash flow surpluses compared to the business plan have led to an adjustment of the estimate for the future earnings achievable by StarCapital AG. As a result, the goodwill for StarCapital AG had to be impaired by CHF 5.3 million as of June 30, 2020. The impairment test as of the end of December 2020 resulted in an additional impairment of goodwill of the CGU StarCapital AG of CHF 2.1 million mainly due to the higher cost of equity used. This amount corresponds to the amount by which the carrying amount exceeds the recoverable amount. Assuming that the used growth rates of expected cash inflows (which depend primarily on the return on average assets under management and expected investment returns) would be assumed to be 20% lower or the used discount rate 10% higher, this could lead to an additional goodwill impairment of CHF 4.0 million or CHF 4.5 million, respectively. The goodwill allocated to the cash-generating unit StarCapital AG amounts to CHF 14.4 million as of December 31, 2020. The remaining goodwill (CHF 29.6 million) is attributable to the cash-generating units Bellevue Asset Management AG and adbodmer AG.

At the time of preparation of the consolidated financial statement, Bellevue Group’s management does not assume that a reasonably possible change in a parameter underlying the impairment test would lead to an additional goodwill impairment.

CHF 1 000	Client base	Brand	Other	Total
Other intangible assets Acquisition cost
Balance as of 1.1.2019	47 570	379	521	48 470
Additions	2 000	–	200	2 200
thereof changes in the scope of consolidation	2 000	–	–	2 000
Write-offs	–	–	– 721	– 721
Foreign currency effect	– 299	– 4	–	– 303
Balance as of 31.12.2019	49 271	375	–	49 646
Additions	–	–	372	372
thereof changes in the scope of consolidation	–	–	230	230
Foreign currency effect	– 71	– 1	–	– 72
Balance as of 31.12.2020	49 200	374	372	49 946

Accumulated valuation adjustments
Balance as of 1.1.2019	– 34 161	– 227	– 174	– 34 562
Additions	– 1 945	– 75	–	– 2 020
Impairment	– 949	–	–	– 949
Additions from discontinued operations	–	–	– 547	– 547
Write-offs	–	–	721	721
Balance as of 31.12.2019	– 37 055	– 302	–	– 37 357
Additions	– 1 799	– 49	– 66	– 1 914
Impairment	– 2 144	–	–	– 2 144
Balance as of 31.12.2020	– 40 998	– 351	– 66	– 41 415

Net carrying values
Balance as of 1.1.2019	13 409	152	347	13 908
Balance as of 31.12.2019	12 216	73	–	12 289
Balance as of 31.12.2020	8 202	23	306	8 531

The other intangible assets are amortized over a period of 5 to 15 years and are included in the impairment test described under «Goodwill» (see above).

As of December 31,.2020, the review of the residual values of the StarCapital AG client base resulted in an additional impairment of CHF 0.4 million (as of June 30, 2020, the review of the residual values of the StarCapital AG/MARS Asset Management GmbH client base resulted in an impairment of CHF 1.7 million). The discount rate used for this purpose was currently between 10.7% and 12.1% (December 31, 2019: 11.5%) and the applied growth rate between 1% and 2% (December 31, 2019: 2%).

3.7 Trade and other payables

CHF 1 000	31.12.2020	31.12.2019
Trade payables	799	627
Accrued expenses	53 098	42 066
Other payables	1 572	4 025
Total	55 469	46 718

Current	39 241	35 583
Non-current	16 228	11 135
Total	55 469	46 718

3.8 Employee benefit plans

There are pension plans for most of the employees at Bellevue Group. These plans provide benefits in the event of death, disability, retirement or termination of employment. There were no unfunded liabilities due to employee pension plans as at the balance sheet date (previous year: no liabilities either). In Switzerland, pension contributions are paid equally by the employer and the employee. The foundation board is composed of an equal number of employee and employer representatives. According to Swiss law and the pension regulations, foundation boards are obliged to act solely in the interest of the foundation and its beneficiaries (active workforce and recipients of pensions). Hence, the employer cannot single-handedly determine the benefits and the funding; all resolutions have to be agreed on by both sides. The members of the foundation board are responsible for defining the investment strategy, for deciding on amendments to the pension regulations, and in particular for determining the funding of the pension benefits.

In the events of death and disability, pension benefits are based on the insured salary. In the event of old age, they are based on pension assets. At the time of retirement, insured persons can choose between a life annuity, which includes a prospective spouse pension, and a lump sum payment. Apart from retirement benefits, pension benefits also include disability and surviving spouse or partner pensions. Furthermore, insured persons can improve their pension situation up to the regulatory maximum by paying in additional amounts, or withdraw money early to acquire property that they occupy themselves. At the time of termination of an employment contract, the vested benefits will be transferred to the pension plan of the new employer or a vested benefits scheme. This type of benefit can result in pension payments fluctuating considerably from year to year.

When determining the benefits, the minimum requirements of the Federal Act on Occupational Old Age, Survivors’ and Invalidity Pension Provision (OPA) and its implementing provisions must be considered. The LOB defines minimum insured salary and minimum retirement assets. The Federal Council determines the minimum interest on these minimum retirement assets at least every two years. In 2020, it amounts to 1% (previous year: 1%).

Due to the nature of the pension plans and the provisions of the OPA, the employer is exposed to actuarial risks. The risks of death, disability and longevity are largely covered by an insurance policy. The major remaining risks include investment risk, interest risk and the risk of the insurer adjusting the premiums.

All employer and employee contributions are determined by the foundation board. The employer is to bear a minimum of 50% of the required contributions. In the case of underfunding, both employer and employee are entitled to pay in amounts to close the funding gap.

CHF 1 000	31.12.2020	31.12.2019
Consolidated balance sheet
Fair value of plan assets	46 875	53 352
Present value of pension obligations	– 41 622	– 53 425
Assets not available to Company	– 219	–
Asset/provision for pension obligation	5 034	– 73
thereof from continuing operations	5 034	355
thereof from discontinued operations	–	– 428

CHF 1 000	1.1.–31.12.2020	1.1.–31.12.2019
Pension cost recognised in the income statement
Service cost
Current service cost	– 1 911	– 2 396
Past service cost (plan amendments) 1)	4 681	4 754
Net interest expenses/income	4	– 7
Administrative expenses	– 66	– 78
Total pension cost for the period	2 708	2 273
thereof from continuing operations	2 893	1 671
thereof from discontinued operations	– 185	602

1) The plan amendments in 2020 and 2019 are mainly due to the persistently low-interest rate environment as a result of the fact that the conversion rates of the saved retirement capital were reduced by the pension fund.

CHF 1 000	1.1.–31.12.2020	1.1.–31.12.2019
Revaluation components recorded in other comprehensive income
Actuarial gains/losses
Arising from changes in economic assumptions	– 2 607	– 4 248
Arising from experience	– 847	– 2 203
Return on plan assets (excluding amounts included in net interest expenses)	3 217	3 975
Changes in asset ceiling	– 219	–
Total of amounts recognised in other comprehensive income	– 456	– 2 476

CHF 1 000	2020	2019
Development of pension obligations
At January 1	– 53 425	– 48 119
Current service cost	– 1 911	– 2 396
Employee contributions	– 265	– 274
Interest expenses on the present value of the obligations	– 131	– 305
Pension payments and vested benefits	4 240	1 870
Additions from admissions and voluntary contributions	– 3 321	– 2 504
Plan amendments	4 681	4 754
Pension obligations sold as part of acquisitions	11 964	–
Actuarial gains/losses	– 3 454	– 6 451
At December 31	– 41 622	– 53 425

Development of plan assets
At 1 January	53 352	46 228
Interest income	135	298
Plan participants' contribution	265	274
Company contributions	1 930	2 021
Pension payments and vested benefits	– 4 240	– 1 870
Additions from admissions and voluntary contributions	3 321	2 504
Return on plan assets (excluding amounts in net interest)	3 217	3 975
Pension obligations sold as part of acquisitions	– 11 039	–
Administration expense	– 66	– 78
At December 31	46 875	53 352

Actual return on plan assets	3 352	4 273

CHF 1 000	31.12.2020	31.12.2019
Allocation of plan assets
Equities
Listed investments	18 263	18 854
Bonds
Listed investments	5 005	5 556
Real estate
Investments in funds	2 722	2 560
Alternative investments	4 082	3 948
Qualified insurance policies	2 976	3 881
Liquidity	13 827	18 553
Total	46 875	53 352

The plan assets allocation as at December 31, 2020, as well as at December 31, 2019, do not include shares of Bellevue Group AG. The foundation board issues investment guidelines for the investment of plan assets. These guidelines include tactical asset allocation and benchmarks for comparing the results with a general investment universe. The plan assets are well diversified. In terms of diversification and security, the Swiss pension plan is subject to the provisions of the OPA. As a rule, bonds receive at least a rating of A.

The foundation board regularly reviews the selected investment strategy as to whether it meets the requirements of the pension plan and whether the risk budget is in line with the demographic structure. Adherence to investment guidelines as well as results achieved by investment advisors are reviewed on a quarterly basis. Furthermore, an external consultancy periodically examines the investment strategy with regard to whether it is effective and appropriate.

Defined-benefit obligations are distributed as follows:

CHF 1 000	31.12.2020	31.12.2019
Active workforce	38 646	49 544
Pensioners	2 976	3 881
Total	41 622	53 425

The maturity of the obligation is 19.4 years as at December 31, 2020 (previous year: 20.1 years). The expected employer’s contributions for 2021 are estimated at CHF 1.7 million.

CHF 1 000	31.12.2020	31.12.2019
Actuarial assumptions
Biometric assumptions	BVG 2015GT	BVG 2015GT
Life expectancy at the age of 65
Year of birth	1 955	1 954
Men	22.72	22.61
Women	24.76	24.65
Year of birth	1 975	1 974
Men	24.48	24.40
Women	26.51	26.44
Discount rate	0.20%	0.30%
Expected rate of salary increases	1.00%	1.50%
Expected rate of pension increases	0.00%	0.00%
Interest on pension assets	1.00%	1.00% (mandatory); 0.30% (super-mandatory)

Changes to the present value of a defined-benefit obligation

CHF 1 000	31.12.2020	31.12.2019
	+ 0.25%	+ 0.25%
Assumed interest rate	– 1 592	– 2 317
Salary development	263	392
Interest on pension assets	687	993

	+ 1 Jahr	+ 1 year
Development of life expectancy	583	873

The most important factors influencing the development of pension obligations are assumed interest rate, salary development, pension index and development of life expectancy.

3.9 Share capital/Conditional capital/Authorized capital

	Number of shares	Par value CHF 1 000
Share Capital (registered shares)
Balance as of 1.1.2019	13 461 428	1 346
Balance as of 31.12.2019	13 461 428	1 346
Balance as of 31.12.2020	13 461 428	1 346

Conditional capital
Balance as of 1.1.2019	1 000 000	100
Balance as of 31.12.2019	1 000 000	100
Balance as of 31.12.2020	1 000 000	100

The purpose of the conditional capital (in total) according to Art. 3a of the Articles of Association is as follows:

a sum of up to CHF 50 000 through the exercise of option rights granted to shareholders;
a sum of up to CHF 50 000 through the exercise of option rights granted to employees and the member of the Board of Directors.

The subscription rights of shareholders are excluded. After acquisition, the new registered shares are subject to the transfer restrictions pursuant to Art. 5 of the Articles of Association.

The conditional capital amounts to a maximum of CHF 100 000 as of the balance sheet date, which represents approximately 7.4% of the existing share capital.

No such optional rights had been granted as of the balance sheet date.

	Number of shares	Par value CHF 1 000
Authorized capital
Balance as of 1.1.2019	2 500 000	250
Balance as of 31.12.2019	2 500 000	250
Balance as of 31.12.2020	–	–

At the Annual General Meeting on March 24, 2020, the Board of Directors did not propose any renewal of the authorized capital increase provided for in Art. 3b of the Articles of Association (version of March 20, 2018). The corresponding provision of the Articles of Association was deleted without replacement by means of an amendment to the Articles of Association on May 7, 2020.

3.10 Treasury shares

	Number	CHF 1 000
Balance as of 1.1.2019	82 405	1 693
Purchases	455 826	9 851
Disposals	– 468 231	– 9 890
Balance as of 31.12.2019	70 000	1 654
Purchases	762 206	16 980
Disposals	– 746 064	– 16 441
Balance as of 31.12.2020	86 142	2 193

4 Significant estimates, judgments and errors

4.1 Estimates, assumptions and the exercising of discretion by management

In applying the accounting principles, management must make estimates, assumptions and discretionary decisions that influence the level of reported assets and liabilities, expense and income, as well as the disclosure of contingent assets and liabilities. Bellevue Group is convinced that in all material respects these consolidated financial statements provide a true and fair view of its financial position, its results of operations and its cash flows. Management reviews its estimates and assumptions on an ongoing basis and adjusts them according to new findings and conditions. This may, among other things, have a material impact on the following positions of the consolidated financial statements.

Discontinued operations

On August 20, 2019, Bellevue Group AG and KBL European Private Bankers (new: Quintet Private Bank) signed an agreement on the sale of Bank am Bellevue AG (new: Quintet Private Bank (Switzerland) AG). As Bank am Bellevue AG represented a separate and material line of business of Bellevue Group, it is presented as a discontinued operation. Bellevue Group had to make assumptions and estimates regarding the allocation between continuing and discontinued operations. For details please refer to the notes to the consolidated financial statements, Section 7 «Discontinued operations».

Income taxes

Bellevue Group AG and its subsidiaries are liable for income tax in most related countries. The current tax assets and current tax liabilities reported as at the balance sheet date as well as the resulting current tax expense for the period under review are based on estimates and assumptions and may therefore differ from the amounts determined in the future by the tax authorities.

Provisions

A provision is recorded if, as the result of a past event, Bellevue Group has a current liability as at the balance sheet date that will probably lead to an outflow of funds and if the amount of the liability can be reliably estimated. When determining whether a provision should be recorded and whether the amount is appropriate, best possible estimates and assumptions as at the balance sheet date are applied. These estimates and assumptions may be subject to change according to new findings and conditions.

Level 3 financial instruments (fair value)

Level 3 financial instruments are valued based on the inputs that are not based on observable market data. For details to the valuation methods applied for level 3 financial instruments refer to the notes to the consolidated financial statements on note 3.1.2 «Fair value financial instruments».

For details to the effect of significant changes on the assumptions behind the classification method for level 3 financial instruments refer the notes to the consolidated financial statements on note 3.1.3 «Level 3 financial instruments».

Pension plan

Management sets the actuarial assumptions and determines whether a pension plan surplus can be capitalized as an economic benefit for Bellevue Group. Pension costs are also subject to estimates and assumptions. The management believes that the assumptions and estimates which have been made are appropriate.

Review of goodwill and other intangible assets for impairment

Established that an event or any circumstances cause a reduction in value of the goodwill, examinations will be performed more frequently.

The Group’s approach to determine the key assumptions and related growth expectations is based on management’s knowledge and reasonable expectations of future business, using internal and external market information, planned business initiatives and other reasonable intentions of management. For that purpose, the Group uses historical information by taking into consideration the current and expected market situations.

Changes in key assumptions: deviations of future actual results achieved vs. forecasted/planned key assumptions, as well as future changes of any of the key assumptions based on a future different assessment of the development of relevant markets, and/or the businesses, may occur. Such deviations may result from changes in the market environment and the related profitability, required types and intensity of personnel resources, general and company specific driven personnel cost development and/or changes in the implementation of known or addition of new business initiatives and/or other internal and/or external factors. These changes may cause the value of the business to alter and therefore either increase or reduce the difference between the carrying value in the balance sheet and the unit’s recoverable amount or may even lead to a partial impairment of goodwill.

4.2 Correction of the consolidated financial statements 2019 according to IAS 8

Following the publication of the consolidated financial statements 2019, Bellevue Group AG determined that personnel expenses were overstated due to incorrect accounting accrual in the financial year 2019.

According to IFRS, incorrect postings in the financial statements of a company have to be corrected in the period in which they are detected. Consequently, the comparative periods are to be adjusted (restatement). The facts of the case are described in detail below.

Under IAS 19 «Employee Benefits», compensation costs with a specific service period (service condition) must be spread over the term of the period. This resulted in a cut-off error in the consolidated income statement 2019. The correction will increase net profit after tax in 2019 by CHF 2.6 million to CHF 14.0 million and equally shareholders’ equity by CHF 2.6 million to CHF 198 million. Earnings per share increased from CHF 0.85 to CHF 1.04 in the Annual Report 2019.

Impact on the consolidated Annual Report 2019:

Position	Before adjustment	Adjustment	Adjusted
Consolidated income statement
Personnel expenses	– 50 989	3 195	– 47 794
Total operating expenses (incl. depreciation and amortization and valuation adjustments)	– 76 688	3 195	– 73 493
Profit before tax	24 680	3 195	27 875
Taxes	– 7 808	– 607	– 8 415
Group net profit from continuing operations	16 872	2 588	19 460
Group net profit	11 445	2 588	14 033

Earnings per share
Undiluted earnings per share from continuing operations (in CHF)	1.26	0.19	1.45
Total undiluted earnings per share (in CHF)	0.85	0.19	1.04
Diluted earnings per share from continuing operations (in CHF)	1.26	0.19	1.45
Total diluted earnings per share (in CHF)	0.85	0.19	1.04

Consolidated statement of comprehensive income
Total comprehensive income	12 306	2 588	14 894

Consolidated balance sheet
Other assets	9 008	3 195	12 203
Total assets	389 951	3 195	393 146
Deferred tax liabilities	5 028	607	5 635
Total liabilities	194 189	607	194 796
Total shareholder's equity	195 762	2 588	198 350
Total liabilities and shareholders' equity	389 951	3 195	393 146

The correction has no impact on net cash flow from operating activities or net cash flow from investing and financing activities.

5 Risk management and risk control

5.1 Risk evaluation and risk policy

Risk management is based on the evaluation of risks by the Board of Directors and is ensuing risk policy, which is reviewed periodically. Independent risk control bodies monitor the risks at the individual operating unit level and at Group level. The Group Executive Board is informed on a regular basis about the assets, financial positions, liquidity and earnings of the Group and all related risks by means of financial and risk reporting procedures commensurate with each particular level of management. Risk reports are prepared at the individual operating unit level as well as at the Group level.

5.2 Market risk

Market risks arise through fluctuations in market pricing of interest rates, exchange rates and equities as well as the corresponding volatilities. Market risk management entails the identification, measurement, control and regulation of market risk exposure. This exposure primarily pertains to the financial investments.

Market risks are monitored by an independent function on a daily basis. Risk reports are prepared at the individual operating unit level as well as at Group level. Market risks are minimized through constant monitoring of risk.

Price change risks

The Group’s exposure to foreign exchange risk arises from financial assets held by the Group, which are either recognized at fair value through profit or loss or directly in equity. To manage the price risk, the Group diversifies the portfolio and partially hedges it with index futures or listed index options. Financial assets are mainly investments in own products (equities, investment funds and private equity funds) and other financial assets (equities, private equity funds and various). Investments in own products for the fulfillment of long-term incentive plans are held to secure liabilities from entitlements of such plans and are therefore considered as economic hedges. All positions in financial assets are valued at fair value. Wherever possible, stock market prices are automatically imported into our systems and used for valuation purposes. The positions are monitored on a daily basis. Any change in price is fully reflected in profit or loss or comprehensive income.

A change in fair value of 10% in relation to the year-end value (net after hedging) would result in a change in equity of CHF 5.4 million (previous year: CHF 4.7 million) for the financial assets measured at fair value, of which CHF 4.3 million (previous year: CHF 4.7 million) would be recognized in profit or loss.

Interest risk

The Group’s exposure to interest rate risk is marginal. On the one hand, the Group’s cash and cash equivalents available on demand bear interest at market rates and, on the other hand, the influence of debt interest is low due to the high equity ratio. If borrowings are necessary, these are short-term fixed loans that bear interest at market rates.

Currency risk

CHF 1 000	CHF	EUR	USD	Other
Net position on 31.12.2020		36 991	11 152	1 643
10% change in fair value	+/– 4979
Net position on 31.12.2019		21 024	12 712	11 235
10% change in fair value	+/– 4497

5.3 Default risk

The Group is exposed to default risk, which is the risk that a counterparty is unable to pay the amount due in full when due. The Group measures default risk and expected default losses based on the probability of default, exposure at default and loss given default. In determining expected default losses, the Group considers both historical analysis and forward-looking information. The Group manages and controls its default risk by maintaining business relationships only with counterparties with an acceptable credit rating.

The following table shows the maximum credit risk exposure of Bellevue Group at the balance sheet date:

CHF 1 000	31.12.2020	31.12.2019
Maximum exposure to credit risk
Cash and cash equivalents	82 547	87 486
Trade and other receivables	18 076	19 021
Other assets	1 443	519
Total	102 066	107 026

As of December 31, 2020, there are no financial assets that are impaired (December 31,.2019: none) and there are no indications of material adverse effects on the credit quality of financial assets. In 2020, no significant impairments were identified on financial assets exposed to credit risk.

The following table provides an analysis of the maturity of financial assets with credit risk:

CHF 1 000	Due within 3 months	Due within 3 to 12 months	Due between 1 and 5 years	Due after 5 years	Total
31.12.2020

Cash and cash equivalents	82 547	–	–	–	82 547
Trade and other receivables	16 771	1 305	–	–	18 076
Other assets	7	57	1 379	–	1 443
Total	99 325	1 362	1 379	–	102 066

31.12.2019
Liabilities/financial instruments
Cash and cash equivalents	87 486	–	–	–	87 486
Trade and other receivables	17 637	1 384	–	–	19 021
Other assets	–	–	519	–	519
Total	105 123	1 384	519	–	107 026

As of December 31, 2020 and 2019, the ECL impairment model had no material impact as (i) the majority of financial assets are measured at fair value through profit or loss and the impairment requirements do not apply to such instruments; and (ii) the financial assets «at amortized cost» are mainly current. Consequently, no impairment loss has been recognized based on expected credit losses.

5.4 Liquidity risk

The CFO of Bellevue Group is responsible for managing liquidity and financing risks. Financing risks refer to the risk of Bellevue Group or one of its operating units being unable to refinance its current or anticipated obligations on an ongoing basis at acceptable conditions. Liquidity risks refer to the risk of Bellevue Group or one of its operating units being unable to fulfill its payment obligations when due. Whereas financing risks relate to the ability to finance business operations at all times, liquidity risks primarily concern the ability to ensure sufficient liquidity an any point in time.

Bellevue Group manages its liquidity and financing risks on an integrated basis at the consolidated level. Day-to-day liquidity management is performed at the level of the individual Group companies by functions responsible for this. Financing capacities are managed through appropriate diversification of funding sources and the provision of collateral, thereby reducing liquidity risks.

Risk management ensure that Bellevue Group always has sufficient liquidity to be able to fulfill its payment obligations, even in stress scenarios. The liquidity risk management system therefore comprises functional risk measurement and control systems to ensure its continuous ability to pay its obligations at any time. It also defines strategies and requirements for the management of liquidity risk under stress conditions as part of the defined liquidity risk tolerance. They mainly include risk mitigation measures, the holding of a liquidity buffer comprising highly liquid assets, and a contingency plan to manage any liquidity shortfalls. In the event of an unexpected tightening of liquidity, the Group can also access a portfolio of positions that retain their value and can easily be liquidated.

The maturity structure of financial liabilities is as follows:

CHF 1 000	Due within 3 months	Due within 3 to 12 months	Due between 1 and 5 years	Due after 5 years	Total
31.12.2020
Trade and other payables	28 341	10 900	16 228	–	55 469
Leasing liabilities 1)	484	1 305	2 368	–	4 157
Other financial liabilities	56	35	–	–	91
Total	28 881	12 240	18 596	–	59 717

1) According to IFRS 7 B11D, the undiscounted contractual cash flows relating to the gross lease liabilities must be disclosed. The corresponding undiscounted cash flows differ from the amount recognised in the balance sheet because the amount is based on discounted cash flows.

CHF 1 000	Due within 3 months	Due within 3 to 12 months	Due between 1 and 5 years	Due after 5 years	Total
31.12.2019
Trade and other payables	30 541	5 042	11 135	–	46 718
Leasing liabilities 1)	568	757	6 198	–	7 523
Total from continuing operations	31 109	5 799	17 333	–	54 241
Liabilities directly associated with assets held for sale	117 213	–	–	–	117 213
Total	148 322	5 799	17 333	–	171 454

5.5 Operational risk

Operational risks represent the risk of losses resulting from the inadequacy or failure of internal processes, people and systems or from external events.

All business activities entail operational risks, which are prevented, mitigated, transferred or even assumed based on cost/benefit considerations. During this process, potential legal, regulatory and compliance-related risks are taken into account, as are follow-on risks in the form of reputational risks.

The Group-wide process model represents the basis for the management of operational risks. As part of the systematic assessments that are performed annually, the operational risks in all critical processes and process entities are identified and evaluated. In addition, further attention is focused on core security topics such as data protection and business continuity management, which are guaranteed through the use of extra tools.

All measures to control operational risks from part of the Internal Control Systems (ICS).

5.6 Legal and compliance risks

Legal and compliance risks refer to risks related to legal and regulatory issues, primarily liability and default risks. These risks are minimized when processing orders by requiring standardized master agreements and individual agreements. Risk related to the acceptance of client assets and adherence to due diligence obligations are monitored at the respective operating unit level. When appropriate, external attorneys will be consulted to limit legal risks.

6 Business combination

On January 7, 2020, Bellevue Private Markets AG, a 100% subsidiary of Bellevue Group AG, acquired 100% of the shares in REALWERK AG, based in Zug, Switzerland, for CHF 0.2 million thereof CHF 0.1 million in cash. The conditional purchase price payment amounts to CHF 0.1 million. The acquired company offers consulting and management services to qualified investors.

7 Discontinued operations

After receiving all the necessary regulatory approvals, Bellevue Group successfully closed the sale of Bank am Bellevue AG to Quintet Private Bank on April 30, 2020, and Bank am Bellevue’s workforce and its client relationships with underlying assets of CHF 1.7 billion have been transferred to Quintet Private Bank.

On January 28, 2020, the General Meeting of Shareholders of Bank am Bellevue AG unanimously resolved to distribute the available earnings of CHF 49.1 million and the reserves from tax-exempt capital contributions of CHF 1.3 million to the wholly owned parent company, Bellevue Group AG. The total distribution of CHF 50.4 million was made on January 29, 2020, and is allocated to continuing operations under the item «Cash and cash equivalents» in the consolidated balance sheet.

Further detailed disclosures on the discontinued operation are made below:

CHF 1 000	1.1.–31.12.2020	1.1.–31.12.2019
Income statement of discontinued operations
Operating income 1)	2 061	9 982
Personnel expenses	– 2 340	– 6 003
Other operating expenses	– 1 195	– 3 725
Depreciation and Amortization	–	– 403
Losses from revaluation to fair value less cost of disposal	–	– 599
Profit before tax from discontinued operations	– 1 474	– 748
Taxes 2)	5	2 921
Valuation adjustments and provisions 3)	751	– 7 600
Group net profit from discontinued operations	– 718	– 5 427

Statement of comprehensive income for discontinued operations
Currency translation adjustments	–	–
Gains and losses arising on revaluation of financial assets at fair value through other comprehensive income	–	4 331
Remeasurements of post-employment benefit obligations	– 383	– 173
Other comprehensive income for discontinued operations	– 383	4 158

Statement of cash flows for discontinued operations
Net cash flow from operating activities	117 391	– 98 098
Net cash flow from investing activities	– 176 252	– 200
Net cash flow from financing activities	899	25
Currency translation effects	–	–
Net cash flow	– 57 962	– 98 273

Earnings per share (discontinued operations)
Basic earnings per share (in CHF)	– 0.05	– 0.41
Diluted earnings per share (in CHF)	– 0.05	– 0.41

1) The comparative period includes CHF 4.8 million dividend income from the SIX participation.

2) In the comparative period, deferred income taxes of CHF 3.1 million on tax loss carryforwards in connection with the sale of the SIX investment were capitalized as of June 30, 2019, and realized in the second half of 2019.

3) In connection with the completion of the sale of Bank am Bellevue in the first half of 2020, provisions of CHF 0.8 million no longer required were released to the income statement.

As the balance sheet items of the discontinued operations as of December 31, 2020, are not included in the consolidated balance sheet of Bellevue Group, they are shown in the following two tables with the old balance sheet structure.

CHF 1 000	31.12.2020	31.12.2019
Assets held for sale
Cash and cash equivalents (incl. due from banks)	–	57 962
Due from clients	–	85 648
Trading portfolio assets	–	6 640
Positive replacement values	–	295
Accrued income and prepaid expenses	–	521
Current tax assets	–	413
Deferred tax assets	–	81
Other assets	–	2 147
Total assets held for sale	–	153 707

Liabilities directly associated with assets held for sale
Due to clients	–	115 609
Negative replacement values	–	218
Accrued expenses and deferred income	–	1 087
Current tax liabilities	–	2 382
Provisions and pension obligations	–	428
Other provisions 1)	–	7 600
Other liabilities	–	300
Total liabilities directly associated with assets held for sale	–	127 624

CHF 1 000	31.12.2020	31.12.2019
Amounts included in accumulated OCI
Currency translation adjustments	–	–
Gains and losses arising on revaluation of financial assets	–	–
Remeasurements of post-employment benefit obligations	–	60
Total amounts included in accumulated OCI	–	60

1) In connection with the sale of Bank am Bellevue, there were one-off provisions based on the terms of sale contractually agreed between the parties.

CHF 1 000	31.12.2020	31.12.2019
Off-balance sheet