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NOTES to the consolidated financial statements

Accounting Principles

Investis Holding SA (“the Company”) is based in Zurich, Switzerland. Its shares have been traded on the SIX Swiss Exchange since 30 June 2016 (IREN). The consolidated financial statements, prepared as at 31 December 2017, include Investis Holding SA and all its direct or indirect subsidiaries and joint ventures (Investis Group) as well as its shareholdings in associated companies.

The business activity of the Investis Group includes the long-term holding of residential and commercial properties as well as comprehensive real estate services in the areas of property management and facility services.

The Company was incorporated on 7 June 2016 as the new parent company of the Group by contribution in-kind of all shares of Investis Investments SA into the Company. Unless otherwise indicated, all historical financial information has been extracted or derived from the audited consolidated financial statements of Investis Investment SA as of and for the year ended 31 December 2015, which represent all of the Group’s business as of these dates and for these periods.

Basis of accounting

The consolidated financial statements of Investis Holding SA have been prepared in accordance with Swiss GAAP FER as a whole and with the special provisions for real estate companies specified in article 17 of the SIX Swiss Exchange’s Directive on Financial Reporting. They give a true and fair view of the assets, liabilities and earnings of Investis Group.

The consolidated financial statements have been prepared applying the principle of historical cost accounting or fair value. Please refer to the “Key accounting and valuation principles” in this chapter for the valuation principles of individual balance sheet items. The income statement is presented by nature. The financial statements have been drawn up on the basis of going concern values.

Assets realised or consumed in the ordinary course of business within twelve months or held for sale purposes are classified as current assets. All other assets are included in non-current assets. Liabilities to be settled in the ordinary course of business or falling due within twelve months from the balance sheet date are classified as current liabilities. All other liabilities are classified as non-current liabilities.

First-time application of Swiss GAAP FER standards

In the year under review the Swiss GAAP FER accounting principles have not been changed.

Consolidation principles

The consolidated financial statements are based on the individual financial statements of the Group companies, which were prepared as at 31 December 2017 and determined according to uniform accounting policies. The relevant accounting principles are described below. The consolidated financial statements are presented in Swiss francs (CHF). Unless otherwise stated, all amounts are stated in thousands of Swiss francs (CHF 1,000). Due to rounding, parts of an item that has been broken down may add up to more or less than 100% of the total item.

The consolidated financial statements include all subsidiaries that are directly or indirectly controlled by Investis Holding SA. Investis Group controls a subsidiary if it is exposed to the fluctuating returns of the investment or if it holds rights to these returns and has the ability to influence these returns given its power over the subsidiary. This is the case where the Investis Group holds more than 50% of the voting rights of an entity or where the Investis Group has been granted management of an entity contractually or is exercising control by other means. These entities are fully consolidated; assets, liabilities, income and expenses are incorporated in the consolidated accounts and all intercompany balances are eliminated.

Joint ventures are entities which Investis Group jointly controls with one or more joint venture partners, and whereby Investis Group is heavily involved in the management. Joint ventures are consolidated proportionally.

Associates are all companies on which Investis Group exerts significant influence, but does not have control. This is generally evidenced when Investis Group holds voting rights and share capital ownership of between 20% and 50% of a company. Investments in associated companies are recognised using the equity method. Ownership of shares in organisations where Investis has voting rights of less than 20% of the total is recognised as financial assets at acquisition cost, less any necessary write-downs.

Capital consolidation is based on the purchase method. Companies acquired by the Investis Group are included in the consolidated financial statements from the date of obtaining control. The net assets previously recognised by the acquired subsidiary are revalued at acquisition date using uniform Group accounting principles and then consolidated. Any difference between the higher purchase price and the net assets acquired (goodwill) is off-set against retained earnings. Where an off-set takes place with retained earnings, the impact of this theoretical capitalisation and amortisation over the estimated useful life of five years is disclosed separately in the notes.

In a business acquisition achieved in stages (including transactions with minorities) the goodwill is determined on each separate transaction and off-set against retained earnings.
Goodwill arising from acquisitions of associates is recognised as part of the investment.

Companies sold are excluded from the scope of consolidation as of the date on which the Group ceases to have control, with any gain or loss recognised in income. Non-controlling interests in equity and profit are presented separately in the consolidated balance sheet and the consolidated income statement.

Changes in the consolidated companies are disclosed in Note 20.

Translation of foreign currencies

All Group companies prepare their financial statements in CHF.

KEY ACCOUNTING AND VALUATION PRINCIPLES

Cash and cash equivalents

Cash and cash equivalents include cash on hand, current accounts with banks, as well as fixed-term deposits with a maturity of less than three months, and are shown at nominal value. Positions in foreign currencies are translated at the spot rate on the balance sheet date.

Securities

Securities include investments in shares and bonds, and include longer-term fixed-term deposits and money market investments with a maturity of more than three months. They are valued at fair value.

Trade receivables and other receivables

Trade receivables and other receivables are stated at nominal value. Provisions for doubtful debts are made in cases where the Group faces a risk of not collecting the outstanding amount. Changes in provisions are recognised in the income statement.

Properties held for sale

Investment properties leased out but intended for sale are classified under current assets as properties held for sale.

Development properties (projects) intended for sale are accounted for at the lower of cost (incl. interest incurred during the construction phase) or fair value and are recognised under current assets. The costs are recognised in line with the progress of the project. The costs essentially include the plot of land as well as the directly attributable construction costs in line with the construction progress. Discounts are recorded as a reduction in construction costs.

Investment properties

The portfolio consists of the following categories:
– Residential properties
– Commercial properties
– Properties under construction
– Undeveloped plots of land

Investment properties are held for long-term investment purposes with the aim of realising revenues from the letting of properties. Investment properties are accounted for at fair value in accordance with Swiss GAAP FER 18 and as such are not subject to depreciation. The fair values are updated and calculated using the discounted cash flow (DCF) method on an annual basis by an independent property appraiser based on the individual risk profile per property. Single-family houses and condominiums are valued by the independent property appraiser using a sales comparison approach. In accordance with the provisions of Swiss GAAP FER, increases and decreases in value are recognised in the income statement in the period in which they occur, after consideration of any resulting deferred taxes. Investment properties under construction and undeveloped plots of land are recorded at fair value from the date on which their fair value can be reliably determined. Investis has defined the existence of a final construction permit, plus a definite construction project in which costs and revenues can be determined reliably, as mandatory requirements for a reliable market valuation. If the conditions for a reliable assessment of market value are not yet present, investment properties under construction and undeveloped plots of land are accounted for at cost. Provided they do not lead to an increase in market value, investments and refurbishments are recorded as an expense in the period in which they are incurred.

Borrowing costs for the financing of properties under construction and undeveloped plots of land are capitalised. Other borrowing costs are charged to financial expenses.

Tangible fixed assets

Other tangible fixed assets are stated at cost less depreciation and impairment. The depreciation is on a straight-line basis over their estimated useful lives: three to ten years for office and other equipment.

Intangible assets

Acquired intangible assets are stated at cost less amortisation and impairment. The amortisation is on a straight-line basis over their estimated useful lives: three to five years for intangible assets. Internally generated intangible assets are not capitalised.

Investments in associated companies

Ownership interests of more than 20% in companies but in which the Investis Group has no control are classified as investments in associated companies and are valued and accounted for using the equity method.

Financial assets and financial assets of related parties

These items include long-term loans and other long-term receivables that are stated at their nominal value.

Deferred tax assets

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which temporary differences or unused tax losses can be utilised.

Impairment of assets

If there is any indication of impairment, an impairment test is performed immediately. If the carrying amount exceeds the recoverable amount, an impairment loss is recognised in the income statement. As the goodwill is already charged against equity at the date of the acquisition, an impairment of the goodwill does not affect the income statement but leads to a disclosure in the notes only.

Trade payables and other liabilities

Trade payables and other liabilities are recognised at their nominal values. They are recognised under current liabilities unless a broader economic perspective requires them to be assigned to non-current liabilities.

Short-term and long-term financial debt

Mortgages and fixed advances that are not repaid within twelve months, but are renewed, are regarded financially as long-term borrowings and disclosed as such in the balance sheet. Amortisations due within twelve months are disclosed as current financial liabilities. Financial debt is stated at its nominal value.

Bond emission costs, reduced by the amount of the premium, are charged in full to the income statement upon issue of the bonds.

Provisions

Provisions are recognised only if the company has a present obligation to a third party as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and the obligation can be sufficiently reliably estimated. Provisions are presented as being either short- or long-term in accordance with their expected due dates.

Deferred tax liabilities

Deferred taxes are calculated by applying the balance sheet liability method for any temporary difference between the carrying amount according to Swiss GAAP FER and the tax basis of assets and liabilities. They include deferred taxes on revaluation of investment properties.

The current income tax rates are applied in cantons with a two-tier system. In cantons with a single-tier system there is a separate property gains tax with speculation surcharges or deductions for the period of ownership, depending on the holding period. For properties that are intended for sale, the actual holding period will apply. For the remaining properties, a holding period of 20 years, or the effective holding period will apply, provided it is more than 20 years. Liabilities for deferred taxes are not discounted.

The tax rates applied in the financial year and preceding years lie between 17% and 24%.

Pension liabilities

All companies in the Investis Group are members of independent collective pension plan foundations with defined contribution plans. The capitalisation of possible economic benefits (stemming from a surplus in the pension institution) is neither intended nor do the conditions for this exist. A financial obligation is carried as a liability if the conditions for the establishment of a provision are met.

Equity

Treasury shares (own equity instruments held by the Group) are accounted for as a reduction of equity at acquisition cost and are not subsequently remeasured. When shares are sold out of treasury shares, the resulting profit or loss is recognised in the capital reserves, net of tax.

Share-based compensation

Share-based compensation to members of the Board of Directors and the Executive Board are stated at fair value and recognised in personnel expenses in the period in which the service is performed. Share-based compensation is disclosed in chapters 4.2 (for the Board of Directors) and chapter 4.3.3 (for the Executive Board) of the Compensation Report.

Financial result

This item includes interest income and expenses, exchange rate differences, gains and losses on securities and other financial income and expenses.

Derivative financial instruments

The accounting of derivative financial instruments used to hedge interest rate risks depends on the hedged underlying transaction. Derivatives to hedge changes in the value of an underlying transaction already recorded in the accounts will be posted using the same valuation principles used for the hedged item. Effective instruments to hedge future cash flows are not recognised on the balance sheet, but disclosed in the notes until the future cash flow has been realised. When the future transaction is realised or upon disposal of the derivative, the current value of the derivative is posted and recorded in the income statement simultaneously with a posting of the hedged cash flow. 

Derivative financial instruments not designated as hedging instruments are accounted for at fair value. Changes in the fair value are recognised immediately in the income statement.

All derivative financial instruments open on the balance sheet date are disclosed in Note 21 to the financial statements.

Transactions with related parties/shareholders

Related parties include natural or legal persons who could exert a significant direct or indirect influence on financial and operating decisions affecting Investis Holding SA. Organisations that are directly or indirectly controlled by a related party are also classified as related parties. Major transactions with related parties are disclosed in Note 24.

Segment information

The following operating and reporting segments have been identified based on the management structure as well as the reporting to the Executive Board and the Board of Directors:
– Properties: invests primarily in Swiss residential properties
– Real Estate Services: provides comprehensive real estate services in Switzerland

Segment reporting is prepared to operating profit (EBIT) level since this key figure is used for management purposes. All operating assets and liabilities that can be assigned to the segments, either directly or on a reasonable basis, are reported in the respective segment. There are no differences between the accounting and valuation principles used for segment reporting and those used for the preparation of the consolidated financial statements.

The position “segment elimination” contains transactions between segments.

Off-balance sheet transactions

Contingent liabilities as well as other obligations for which a provision has not been recorded are assessed at each balance sheet date and are disclosed in the notes to the financial statements. If contingent liabilities or other obligations could lead to an outflow of funds without a useable inflow of funds, and this outflow of funds is probable and can be estimated, a provision is recorded.

Appraisals

The preparation of financial statements requires judgement and assumptions to be made. This will affect the reported asset values, liabilities and contingent liabilities at the balance sheet date, as well as income and expenses during the reporting period. If assumptions that were made at the date of the financial statements to the best of management’s knowledge and belief differ from the actual circumstances, the original assessments and assumptions will be adjusted in the reporting year in which the circumstances change.

Risk management

The Investis Group has a risk management programme. Every year a risk analysis is carried out to compile and document all business risks in accordance with uniform criteria. The identified risks are then assessed according to their probability of occurrence and their potential scope. Financial implications as well as general effects are taken into account when determining the potential impact on the Group. Such risks are then either borne, avoided, reduced or passed on by the measures decided upon by the Board of Directors.

1. Segment reporting

Segment Information 2017

                  

In CHF 1,000

Properties

Real Estate Services

Corporate

Eliminations

Investis Group

Revenue 1)

47,492

147,637

-

–5,142

189,987

Direct expenses

–12,814

–14,178

-

5,129

–21,863

Personnel expenses

–599

–101,902

–3,606

-

–106,108

Other operating expenses

–1,685

–21,817

–1,216

13

–24,706

 

 

 

 

 

 

Operating profit before revaluations, disposal of investment properties, depreciation and amortisation

32,394

9,740

–4,823

0

37,311

 

 

 

 

 

 

Income from revaluations

24,953

 

 

 

24,953

Income from disposal of investment properties

696

 

 

 

696

Operating profit before depreciation and amortisation

58,042

9,740

–4,823

-

62,959

 

 

 

 

 

 

Depreciation and amortisation

–4

–1,900

–185

-

–2,088

Operating profit (EBIT)

58,039

7,839

–5,007

-

60,871

 

 

 

 

 

 

Total segment assets as at 31 December 2017 2)

1,142,532

75,790

31,175

–11,275

1,238,222

Total segment liabilities as at 31 December 2017 2)

19,708

54,462

606,338

–11,275

669,233

 

 

 

 

 

 

Headcount as at 31 December 2017

9

1,397

14

 

1,420

FTE as at 31 December 2017

9

1,126

13

 

1,147

FTE (full-time equivalent, average over the period)

4

1,126

13

 

1,143

1) Revenue is generated exclusively in Switzerland.

2) The assets and liabilities shown under “Corporate” include the corporate items from the balance sheet and the financial assets/liabilities and tax assets/liabilities of the Investis Group.

Segment information 2016

            

In CHF 1,000

Properties

Real Estate Services

Corporate

Eliminations

Investis Group

Revenue 1)

41,852

136,094

-

–16,030

161,916

Direct expenses

–12,696

–25,345

-

16,022

–22,019

Personnel expenses

–353

–86,368

–2,937

-

–89,657

Other operating expenses

–1,509

–19,089

–954

8

–21,544

 

 

 

 

 

 

Operating profit before revaluations, disposal of investment properties, depreciation and amortisation

27,293

5,293

–3,891

0

28,695

 

 

 

 

 

 

Income from revaluations

46,575

 

 

 

46,575

Income from disposal of investment properties

3,007

 

 

 

3,007

Operating profit before depreciation and amortisation

76,875

5,293

–3,891

-

78,277

 

 

 

 

 

 

Depreciation and amortisation

–196

–1,401

–311

-

–1,908

Operating profit (EBIT)

76,679

3,892

–4,202

-

76,369

 

 

 

 

 

 

Total segment assets as at 31 December 2016 2)

992,915

68,269

44,490

–5,925

1,099,750

Total segment liabilities as at 31 December 2016 2)

12,811

49,104

486,189

–5,925

542,179

 

 

 

 

 

 

Headcount as at 31 December 2016

2

1,132

12

 

1,146

FTE as at 31 December 2016

2

906

11

 

919

FTE (full-time equivalent, average over the period)

2

889

11

 

902

1) Revenue is generated exclusively in Switzerland.

2) The assets and liabilities shown under “Corporate” include the corporate items from the balance sheet and the financial assets/liabilities and tax assets/liabilities of the Investis Group.

2. Revenue from letting of properties

Duration of existing fixed leases of commercial properties

The duration of existing fixed leases of commercial properties was:

 

Annualised rental income

In CHF million

31.12.2017

31.12.2016

Less than one year

0.5

0.8

1–5 years

3.1

1.6

More than 5 years

1.6

2.3

Most important tenants

The five most important tenants measured according to property income were (in alphabetical order):

  • As of 31.12.2017: Hospice Général, Permanent Mission of India to the UN in Geneva, Valotel Management (Fribourg) Sàrl, Valotel Management (Rothrist) AG and Valotel Management (Sion) SA
  • As of 31.12.2016: Brandt SA, Duca SA, Valotel Management (Fribourg) Sàrl, Valotel Management (Rothrist) AG and Valotel Management (Sion) SA

Share of annualised rental income (%)

31.12.2017

31.12.2016

Most important tenant

1.5%

1.6%

Second to fifth most important tenants

3.1%

3.2%

Five most important tenants

4.6%

4.8%

3. Personnel expenses

In CHF 1,000

2017

2016

Wages and salaries

88,752

74,559

Social security

9,668

8,195

Pension funds

5,271

4,746

Other personnel expenses

2,416

2,157

Total personnel expenses

106,108

89,657

The expenses related to the share-based compensation recognised in the personnel expenses amount to CHF 0.7 million (2016: ─).

There are no pension funds with a surplus or deficit (full-value insurance) or employer contribution reserves.

4. Other operating expenses

In CHF 1,000

2017

2016

Rent and utilities

6,983

6,570

Administrative expenses

12,997

11,529

Other operating expenses

4,726

3,446

Total other operating expenses

24,706

21,544

5. Income from disposal of investment properties

In CHF 1,000

2017

2016

Sales proceeds, net

23,346

13,596

Investment costs

–20,366

–5,199

Gross profit from disposal of investment properties

2,980

8,397

Accumulated valuation gains

–2,284

–5,390

Net profit on disposal of investment properties

696

3,007

Of which profits on disposal of properties held for sale

135

2,113

Of which profits on disposal of residential properties

178

24

Of which profits on disposal of commercial properties

384

869

For details of the investment properties sold see Note 10 and Note 11.

6. Financial result

In CHF 1,000

2017

2016

Interest income

53

115

Share of results of associates

125

35

Other financial income

445

1,815

Total financial income

623

1,966

 

 

 

Interest expenses on mortgages and bonds

–2,663

–6,512

Other interest expenses

–0

–132

Other financial expenses

–1,397

–13,040

Total financial expenses

–4,060

–19,684

 

 

 

Total financial result

–3,437

–17,719

In 2017, other financial expenses include CHF 0.8 million for the issuance of bonds and CHF 0.6 million for unrealised losses on securities.

In 2016, other financial expenses include CHF 5.9 million from the premature termination of a part of the interest rate swaps and CHF 6.6 million from recognition of the remaining swaps on the balance sheet (see Note 21).

7. Income taxes

In CHF 1,000

2017

2016

Current income taxes

2,193

1,771

Deferred income taxes

–2,364

11,802

Total income taxes

–170

13,574

Due to the release of deferred tax liabilities the total income taxes resulted in an income in 2017.

In 2017, deferred taxes in the amount of CHF 10.8 million had to be reversed due to an announcement by Canton Vaud on 1 November 2017, that corporate tax reform would be implemented on the cantonal level at the beginning of 2019. This reform sets the new corporate tax rate at 13.79% as from 1 January 2019.

The difference between the expected income tax expense and the income tax expense shown in the income statement can be explained as follows:

In CHF 1,000

2017

2016

Profit before taxes

57,434

58,650

Expected Group tax rate

23%

24%

Expected income taxes

13,210

14,076

 

 

 

Non-deductible expenses

265

93

Tax-free income

–27

0

Use of non-capitalised tax losses carried forward

–974

–214

Non-capitalisable tax losses for the period

207

342

Expenses/income which are taxed at a lower/higher tax rate

–477

–471

Impact of changes in tax rate on deferred tax items recognised

–12,318

–220

Tax effects for prior periods

–57

–31

Effective income tax charge

–170

13,574

Effective tax rate

–0%

23%

Deferred income taxes are calculated for each subsidiary using the local tax rates. In 2017, the anticipated deferred taxes decreased as a result of the determined tax rate changes; this resulted in a positive tax effect of CHF 12.3 million (see also comments above). In 2017, the non-capitalised tax assets from losses carried forward decreased from CHF 1.6 million in 2016 to CHF 1.0 million. Deferred income tax assets include deferred income taxes on temporary differences. Accrued expenses and other liabilities include accrued taxes of CHF 0.7 million (2016: 1.9 million).

8. Earnings per share and net asset value

Earnings per share are calculated by dividing the net profit attributable to Investis Holding SA shareholders by the weighted average number of outstanding shares entitled to dividends. All new shares are entitled to full dividend rights. For both periods under review there were no dilutive effects.

Weighted average number of shares

 

 

2017

2016

Shares issued as at 1 January 1)

 

12,800,000

10,000,000

Effects of capital increase (average) 2)

 

-

1,400,000

Effects of change in holdings of treasury shares

 

–2,969

-

Weighted average number of shares as at 31 December

 

12,797,031

11,400,000

1) In order to enhance comparability, the number of shares as of 1 January 2016 reflects the number of shares of Investis Holding SA when it was incorporated on 7 June 2016. The number of shares of Investis Investments SA (formerly Investis Holding SA) as at 1 January 2016 amounted to 1,000,000 shares.

2) The capital increase (initial public offering of 2,800,000 shares) was effective on 30 June 2016, which resulted in the increase of the weighted average number of shares of 1,400,000.

Earnings per share

 

 

31.12.2017

31.12.2016

Net profit attributable to Investis Holding SA shareholders

in CHF 1,000

57,456

44,222

Weighted average number of shares

 

12,797,031

11,400,000

Earnings per share (basic/diluted)

in CHF

4.49

3.88

Net asset value per share

 

 

31.12.2017

31.12.2016

Equity attributable to the shareholders of Investis Holding SA at end of period

in CHF 1,000

568,002

556,575

Number of shares

 

12,800,000

12,800,000

NAV per share (basic/diluted)

in CHF

44.38

43.48

Net asset value not including deferred taxes with regard to investment properties

 

 

31.12.2017

31.12.2016

Equity attributable to the shareholders of Investis Holding SA at end of period

in CHF 1,000

568,002

556,575

Deferred taxes with regard to investment properties

 

147,625

145,551

Net asset value not including deferred taxes with regard to investment properties

 

715,626

702,126

Number of shares

 

12,800,000

12,800,000

NAV per share not including deferred taxes with regard to investment properties (basic/diluted)

in CHF

55.91

54.85

9. Trade receivables

In CHF 1,000

31.12.2017

31.12.2016

Trade receivables

14,442

11,684

Receivables from property accounts

970

3,235

Receivables from related parties

530

640

Provision for doubtful debts

–1,427

–1,061

Total trade receivables

14,516

14,498

Receivables from property accounts mainly include expenses for properties that were paid shortly before the balance sheet date but not yet reimbursed by the owners.

10. Properties held for sale

In CHF 1,000

2017

2016

Acquisition costs as at 1 January

18,141

14,116

Changes in scope of consolidation

6,529

-

Increases

15,172

724

Capitalisation of borrowing costs

19

-

Disposals

–11,383

–913

Reclassifications

7,328

4,213

Acquisition costs as at 31 December

35,805

18,141

In 2017, the residential properties “Chemin du Marquisat 15” in St-Sulpice, “Chamblandes; PPE” in Pully and one apartment in the jointly held (50%) property “Le Prado” in Lens were sold. The land “Saanen”, previously undeveloped plots of land, was reclassified as property held for sale.

On 21 November 2017, Investis increased its stake in the company La Foncière de la Dixence SA from 50% to 75%. Thus the consolidation method changed from proportional consolidation to full consolidation, which resulted in an addition from changes in scope of consolidation of CHF 6.5 million. The project company is in charge of planning and financing the Dixence Resort development project in Hérémence. 

In 2016, two apartments in the jointly held (50%) property “Le Prado” in Lens were sold. The plot “Hérémence” was transferred from undeveloped plots of land to properties held for sale. 

11. Investment properties

In CHF 1,000

Residential properties

Commercial properties

Properties under construction

Undeveloped plots of land

Total investment properties

Market value as at 1 January 2016

745,866

81,045

3,507

12,235

842,653

 

 

 

 

 

 

Acquisition costs as at 1 January 2016

285,621

57,471

4,073

12,235

359,400

Changes in scope of consolidation

-

19,923

-

-

19,923

Increases

39,462

23,452

4,000

295

67,209

Capitalisation of borrowing costs

-

-

-

10

10

Disposals

–187

–3,099

-

–999

–4,285

Reclassifications

8,009

-

–8,009

–4,213

–4,213

Acquisition costs as at 31 December 2016

332,905

97,747

64

7,328

438,044

 

 

 

 

 

 

Revaluation as at 1 January 2016

460,245

23,574

–566

-

483,253

Gains on valuations

60,592

1,097

-

-

61,689

Losses on valuations

–11,202

–3,912

-

-

–15,114

Disposals

–13

–5,377

-

-

–5,390

Reclassifications

–566

-

566

-

0

Revaluation as at 31 December 2016

509,056

15,382

-

-

524,438

Market value as at 31 December 2016

841,961

113,129

64

7,328

962,481

 

 

 

 

 

 

Market value as at 1 January 2017

841,961

113,129

64

7,328

962,481

 

 

 

 

 

 

Acquisition costs as at 1 January 2017

332,905

97,747

64

7,328

438,044

Changes in scope of consolidation

61,243

22,857

122

-

84,221

Increases

18,513

360

11,304

1,673

31,849

Disposals

–4,017

–4,965

-

-

–8,982

Reclassifications

–3,211

-

3,211

–7,328

–7,328

Acquisition costs as at 31 December 2017

405,432

115,999

14,701

1,673

537,804

 

 

 

 

 

 

Revaluation as at 1 January 2017

509,056

15,382

-

-

524,438

Gains on valuations

37,336

625

-

-

37,962

Losses on valuations

–8,319

–4,126

–563

-

–13,008

Disposals

–2,187

–97

-

-

–2,284

Reclassifications

–689

-

689

-

0

Revaluation as at 31 December 2017

535,197

11,785

126

-

547,108

Market value as at 31 December 2017

940,629

127,784

14,826

1,673

1,084,912

Increases consisted of value-enhancing renovations, purchases of buildings and investments. 

In 2017, six residential properties (Avenue Général-Guisan 40 in Pully, Chemin Fagne 1 in Bière, Route de Tsarbouye 61 in Crans-Montana, Route du Pont du Diable 3 in Lens, Rue de la Télérésidence 2 in Lens and one building plot of Route de Crans 87 in Lens) and one commercial property (Chemin de Planchy 15/15a in Bulle) were sold.

In 2016, one residential property (Route du Pont du Diable 7 in Lens) and two commercial properties (Chocolatière 21 in Echandens, C.-F. Ramuz 106 in Pully) were sold. CHF 3.4 million of the sales price was paid in securities, so the sales price was non-cash-effective to this extent.

The valuation of investment properties was carried out by Wüest Partner AG in accordance with national and international standards and guidelines.

12. Tangible fixed assets and intangible assets

In CHF 1,000

Tangible fixed assets

Intangible assets

Net carrying amount as at 1 January 2016

5,012

1,267

 

 

 

Acquisition costs as at 1 January 2016

9,469

3,446

Changes in scope of consolidation

28

-

Additions

1,083

330

Disposals

–154

-

Acquisition costs as at 31 December 2016

10,428

3,776

 

 

 

Accumulated depreciation/amortisation as at 1 January 2016

4,458

2,180

Changes in scope of consolidation

26

-

Depreciation/amortisation in the reporting period

1,219

689

Disposals

–87

-

Accumulated depreciation/amortisation as at 31 December 2016

5,615

2,869

Net carrying amount as at 31 December 2016

4,812

908

 

 

 

Acquisition costs as at 1 January 2017

10,428

3,776

Changes in scope of consolidation

2,562

-

Additions

2,293

1,107

Disposals

–3,427

–494

Acquisition costs as at 31 December 2017

11,855

4,390

 

 

 

Accumulated depreciation/amortisation as at 1 January 2017

5,615

2,869

Changes in scope of consolidation

1,339

-

Depreciation/amortisation in the reporting period

1,426

663

Disposals

–1,732

–476

Accumulated depreciation/amortisation as at 31 December 2017

6,647

3,055

Net carrying amount as at 31 December 2017

5,207

1,335

All intangible assets were acquired.

13. Goodwill arising from acquisitions

The goodwill resulting from acquisitions is charged against equity at the acquisition date. The theoretical amortisation is based on a straight-line method over a useful life of five years. The theoretical capitalisation of the goodwill would affect the results of the consolidated financial statements as follows:

Theoretical movements in goodwill

In CHF 1,000

2017

2016

Acquisition costs

 

 

Acquisition costs as at 1 January

51,163

50,527

Additions

14,814

636

Acquisition costs as at 31 December

65,977

51,163

 

 

 

Accumulated amortisation as at 1 January

28,308

19,618

Amortisation for the period

11,704

8,690

Accumulated amortisation as at 31 December

40,011

28,308

Theoretical values ​​as at 31 December

25,966

22,855

Effect on consolidated income statement

In CHF 1,000

2017

2016

Net profit as per financial statements

57,604

45,077

Amortisation of goodwill

–11,704

–8,690

Theoretical net profit including goodwill amortisation

45,900

36,387

Effect on consolidated balance sheet

In CHF 1,000

31.12.2017

31.12.2016

Equity

 

 

Equity as per financial statements

568,989

557,570

Theoretical value of goodwill

25,966

22,855

Theoretical equity when reporting goodwill

594,955

580,426

14. Non-current financial assets

In CHF 1,000

31.12.2017

31.12.2016

Financial assets of related parties

15,000

30,000

Total financial assets of related parties

15,000

30,000

 

 

 

Investments in associates 1)

3,648

23

Other financial assets

934

3,034

Total other financial assets

4,582

3,057

 

 

 

Total non-current financial assets

19,582

33,057

1) Including goodwill arising from the acquisition in the amount of CHF 3.0 million (2016: ─) which was recognised as part of the investment in associates.

On 9 October 2017, Investis Investments SA made a strategic investment by acquiring 50% of the shares in the Venture Capital firm Polytech Ventures Holding SA. Polytech Ventures evaluates industry needs in the field of digitalisation, develops disruptive business models on the basis of this evaluation, and supports innovative start-up companies.

Transactions involving related parties and companies are described in Note 24.

15. Other liabilities

In CHF 1,000

31.12.2017

31.12.2016

Liabilities from property accounts

23,773

30,103

Derivative financial instruments

-

6,634

Others

20,211

6,409

Total other liabilities

43,984

43,147

The liabilities from property accounts mainly comprise rental income that was received shortly before the balance sheet date but not yet forwarded to the owners of the relevant properties, or that was used for expenses relating to these properties.

16. Financial liabilities

In CHF 1,000

31.12.2017

31.12.2016

Amortisation obligations on mortgages

160

322

Loans from third parties

5,000

5,000

Current mortgages

6,532

-

Current financial liabilities

11,692

5,322

 

 

 

Mortgages

9,665

225,250

Bonds

420,000

100,000

Loans from third parties

4,916

7,089

Non-current financial liabilities

434,581

332,338

Total financial liabilities

446,273

337,660

Mortgages and fixed advances that are not repaid within twelve months but which are renewed are reported under “Non-current financial liabilities” to reflect the economic reality. Mortgages due for repayment within the next twelve months are reported under short-term financial debt.

In 2017, a CHF 140 million bond maturing on 14 February 2019 was issued on
14 February 2017. The coupon is 0.25%. A further bond of CHF 180 million, maturing on 3 October 2022, with a coupon of 0.75%, was issued on 3 October 2017.

In 2016, a CHF 100 million bond maturing on 15 November 2021 was issued on 15 November 2016. The coupon is 0.55%. 

As at the balance sheet date, the following bonds are outstanding:

ISIN

CH 033 764 551 6

CH 035 259 586 9

CH 036 153 322 4

Trading currency

CHF

CHF

CHF

Issuing volume

100 million

140 million

180 million

Listing

SIX Swiss Exchange

SIX Swiss Exchange

SIX Swiss Exchange

Coupon

0.55%

0.25%

0.75%

Tenor

5 years

2 years

5 years

Payment date

15 November 2016

14 February 2017

3 October 2017

Redemption date

15 November 2021

14 February 2019

3 October 2022

Investment properties in the amount of CHF 245.3 million (31.12.2016: CHF 344.3 million) were pledged to secure mortgages.

Unused credit lines totalled CHF 201 million at 31 December 2017 (31.12.2016: CHF 136 million).

As at the balance sheet date, amounts falling due are as follows:

In CHF 1,000

31.12.2017

31.12.2016

 

 

 

Rollover mortgages

2,594

174,736

Due within the first year 1)

6,532

39,905

Due within the second year

145,080

-

Due within the third year

2,151

8,780

Due within the fourth year

100,000

2,151

Due within the fifth year and beyond

180,000

100,000

Total mortgages and bonds

436,357

325,572

 

 

 

Loans from third parties 2)

9,916

12,089

Total other financial liabilities

9,916

12,089

 

 

 

Total financial liabilities

446,273

337,660

1) Mortgages due within the first year are reported under non-current liabilities if extensions are planned.

2) Loans from third parties include as at 31 December 2017 unsettled purchase price consideration for the Privera-Group acquisition (September 2014) of CHF 5 million (31.12.2016: CHF 10 million), which is interest free and amortised annually by CHF 5 million. The remaining loans from third parties have no fixed maturity.

Interest maturity periods are as follows (composition until next interest rate adjustment):

In CHF 1,000

Interest rates as at 31.12.2017

31.12.2017

31.12.2016

Up to one year

 

16,357

225,572

Up to 2 years

 

140,000

-

Up to 3 years

 

-

-

Up to 4 years

 

100,000

-

Up to 5 years and beyond

 

180,000

100,000

Total mortgages and bonds

0.25%─1.0%

436,357

325,572

 

 

 

 

Loans from third parties

 

9,916

12,089

Total other financial liabilities

0.0%─2.5%

9,916

12,089

 

 

 

 

Total financial liabilities

 

446,273

337,660

The weighted average interest rate for all mortgages and bonds amounted to 0.7% (2016: 2.0%).

17. Provisions

In CHF 1,000

2017

2016

Provisions as at 1 January

2,091

2,804

Changes in scope of consolidation

255

124

Increase

222

241

Use

–33

–245

Release

–372

–833

Provisions as at 31 December

2,164

2,091

The position includes mainly provisions for lease commitments (CHF 0.9 million, 2016: 1.1 million) and for pending legal cases and disputes (CHF 0.8 million, 2016: 0.7 million).

18. Deferred taxes

In CHF 1,000

2017

2016

Deferred tax assets

56

204

Deferred tax liabilities

145,579

132,539

Deferred tax liabilities as at 1 January (net)

145,523

132,335

Changes in scope of consolidation

11,737

1,385

Changes recoginised in the income statement

–2,364

11,802

Deferred tax liabilities as at 31 December (net)

154,896

145,523

Deferred tax assets

81

56

Deferred tax liabilities

154,977

145,579

Deferred taxes are calculated using the local applicable tax rates for each subsidiary (see Note 7).

19. Equity

As at 31 December 2017, the share capital consists of 12,800,000 registered shares at a par value of CHF 0.10 each and remains unchanged from 31 December 2016. The number of shares of Investis Investments SA (formerly Investis Holding SA) as at 1 January 2016 amounted to 1,000,000 shares at a par value of CHF 1.00 each (see also Accounting Principles).

On 4 July 2016, Investis Holding SA increased its share capital by CHF 148.4 million (par value CHF 0.3 million, reserves from capital contribution CHF 148.1 million). Costs related to the capital increase came to CHF 7.6 million, of which CHF 7.3 million was charged against capital reserves. 

Conditional share capital

At the extraordinary shareholders’ meeting of Investis Holding SA held on 17 June 2016, a resolution was passed to create conditional share capital, pursuant to which the share capital may be increased by a maximum amount of CHF 30,000 by issuing a maximum of 300,000 shares, under exclusion of shareholders’ pre-emptive rights, in favour of directors, members of the Executive Board and employees of the Investis Group in the context of a management incentive plan.

Retained earnings

Retained earnings are only distributable on a limited basis:

  • The retained earnings of Investis Holding SA pursuant to a resolution of the Annual General Meeting
  • The retained earnings of subsidiaries in accordance with local fiscal and statutory requirements, first to the respective parent company

The non-distributable statutory and legal reserves amount to CHF 7.0 million (2016: 6.7 million).

Treasury Shares

In 2017, Investis Holding SA acquired treasury shares for the first time.

 

 

2017

 

2016

 

Quantity

Value in CHF 1,000

Quantity

Value in CHF 1,000

Net carrying amount as at 1 January

-

-

 

 

Purchase of treasury shares 1)

20,000

–1,135

 

 

Net carrying amount as at 31 December

20,000

–1,135

-

-

1) In the year under review, Investis Holding SA acquired 20,000 (2016: -) registred treasury shares at an average price of CHF 56.75 (2016: CHF -)

20. Acquisitions and disposals of consolidated companies

 

 

 

2017

 

2016

In CHF 1,000

 

 

Acquisitions

Acquisitions

Disposals

 

Hauswartprofis

Others

Total

Total

Total

Cash and cash equivalents

5,942

689

6,630

42

24

Trade and other current receivables

899

181

1,080

200

-

Investment properties and properties held for sale

-

90,750

90,750

19,923

-

Fixed assets

1,223

-

1,223

2

-

Financial assets

-

30

30

151

-

Trade and other current liabilities

–1,877

–2,052

–3,930

–145

–4

Non-current liabilities

–286

–24,454

–24,740

–11,009

-

Net assets acquired/disposed of

5,900

65,144

71,044

9,164

20

Goodwill (recognised in equity)

14,720

95

14,814

201

-

Purchase/selling price

20,619

65,239

85,858

9,364

20

Cash and cash equivalents acquired/disposed of

–5,942

–689

–6,630

–42

–24

Purchase price consideration for acquisitions in prior years

 

 

5,000

5,000

 

Cash outflow on acquisitions

 

 

84,228

14,322

 

Cash outflow from disposals

 

 

 

 

–4

Transactions in 2017

On 9 January 2017, Investis Properties SA acquired 100% of the shares in the real estate company Alaïa Invest SA, Lens.

On 10 January 2017, Investis Investments SA acquired 100% of the shares in Wegra Holding AG, which holds 100% of the operating subsidiaries of “Hauswartprofis”. The company provides services in the area of facility services and strengthens the respective activity offered by the Real Estate Services segment in the greater Zurich area.

On 10 March 2017, Investis Properties SA acquired 100% of the shares in the real estate company Domus Angelo Sàrl, Luxembourg.

On 1 May 2017, Investis Properties SA acquired 100% of the shares in the real estate company Jalu SA, Geneva.

On 7 July 2017, Investis Properties SA acquired 100% of the shares in the real estate company Parallax SA, Geneva.

On 14 July 2017, Investis Properties SA acquired 100% of the shares in the real estate company Casamar AG, Geneva.

On 15 September 2017, Valotel SA acquired 100% of the shares in the real estate company Hotel Investissements et Management SA, Fribourg.

On 21 November 2017, Investis Investments SA increased its shareholding in the proportional consolidated company La Foncière de la Dixence SA from 50% to 75%. Hence, the company is fully consolidated as of 31 December 2017.

Transactions in 2016

On 1 January 2016, Synergie Services Facility Management SA acquired the business of Alex Sanitaire Chaufferie Sàrl and integrated it into the acquiring company.

In May 2016, 100% of the shares in Ooh networks Sàrl, Lens, were sold for CHF 0.02 million.

On 13 July 2016, Investis Properties SA acquired the real estate company Domus Flavia Investments Ltd, Luxembourg.

On 21 July 2016, Investis Investments SA signed and closed a share purchase agreement according to which it acquired 100% of the shares in Minas-Tirith SA, Wollerau, that owned the 49% minority stake in the already consolidated Investis Patrimoine SA. 

On 31 October 2016, Investis Investments SA acquired 100% of the shares in Clim-Assistance SA in Geneva. The company provides services in the area of ventilation and climate technology and thus completes the service range offered by the Real Estate Services segment in the Geneva area.

21. Derivative financial instruments

 

 

 

31.12.2017

 

 

31.12.2016

In CHF 1,000

Purpose

Positive fair values

Negative fair values

Purpose

Positive fair values

Negative fair values

Interest rate swaps

 

-

-

Trading

-

–6,634

Total derivative financial instruments

 

-

-

 

-

–6,634

Of which for hedging of future cash flows

 

-

-

 

-

-

Total recognised in the balance sheet

 

-

-

 

-

–6,634

As at 31 December 2017 there are no interest rate swaps.

In 2016, the Group changed its financing strategy and in November refinanced the first part of its mortgage loans with a bond. As a consequence, the designated purpose of the interest rate swaps changed from hedging to trading. The negative fair value was therefore recognised in the balance sheet. 

22. Contingent assets and liabilities

There are no material contingent assets or liabilities on the balance sheet date.

23. Pledged assets and off-balance sheet lease/rental obligations

In CHF 1,000

31.12.2017

31.12.2016

Pledged assets

 

 

Nominal charges on real estate property

245,260

344,338

Of which as security for own liabilities

16,357

225,572

 

 

 

Off-balance sheet lease/rental obligations

 

 

1 – 2 years

11,504

12,973

3 – 5 years

10,659

11,093

over 5 years

1,460

2,162

Total

23,623

26,227

24. Transactions with related parties and companies

Business transactions with related parties and companies are based on standard commercial contractual forms and conditions. All transactions are included in the 2017 and 2016 consolidated financial statements. There are loans and services from and to related parties and companies. The respective balances from financial receivables are reported separately in these financial statements (see Note 14).

Among the companies controlled by members of the Boards of Directors is the investment firm Be Capital SA, which is controlled by Stéphane Bonvin.

In January 2017, the company Be Capital SA sold its 25% shareholding in Alaïa Invest SA to Investis Properties SA for CHF 0.03 million.

In 2017, the residential properties “Chemin du Marquisat 15” in St-Sulpice and “Chamblandes; PPE” in Pully were sold for CHF 10.6 million to companies controlled by Stéphane Bonvin.

In 2017, as well as in the year 2016, the financial assets of related parties were repaid by CHF 15.0 million and amounted as at 31 December 2017 to CHF 15.0 million (2016: CHF 30.0 million). As at 31 December 2017 the trade receivables from Be Capital SA amounted to CHF 0.5 million (2016: CHF 0.6 million).

In May 2016, 100% of the shares in Ooh networks Sàrl, Lens, were sold to Be Capital SA at carrying value (CHF 0.02 million).

The consolidated income statement contains rental revenue amounting to CHF 1.6 million (2016: CHF 1.1 million) from the letting of three hotels in Fribourg, Rothrist and Sion to companies controlled by Stéphane Bonvin. 

25. Events after the balance sheet date

On 1 February 2018, Investis successfully completed its takeover, announced on 20 December 2017, of Société d’investissements immobiliers SII SA, a Geneva-based property company with an attractive portfolio of ten residential properties in Geneva. The acquisition price is CHF 108 million.

The Board of Directors approved the consolidated annual financial statements for publication on 19 March 2018. These statements are also subject to approval by the Annual General Meeting of Investis Holding SA on 20 April 2018.

No other events occurred between 31 December 2017 and the date of approval of the consolidated financial statements, which would require adjustments to the carrying amounts of the Group’s assets and liabilities as at 31 December 2017 or disclosure in this section.

26. Group companies

 

 

 

31.12.2017

31.12.2016

 

 

Domicile

Original currency

Share capital in CHF 1,000

Ownership interest 1)

Ownership interest 1)

Footnote

Properties

 

 

 

 

 

 

Investis Properties SA

Lens

CHF

1,650

100%

100%

C

Investis Patrimoine SA

Lens

CHF

100

100%

100%

C

Valotel SA

Lens

CHF

2,000

100%

100%

C

Domus Flavia Investments AG

Geneva

CHF

1,900

100%

100%

C

Serge Spaggiari SA

Perly-Certoux

CHF

200

100%

100%

C

Jalu SA

Lens

CHF

100

100%

 

C

Domus Angelo S.à.r.l.

Luxembourg (LUX)

EUR

200

100%

 

C

Parallax SA

Geneva

CHF

100

100%

 

C

Casamar AG

Geneva

CHF

100

100%

 

C

Alaïa Invest SA

Lens

CHF

100

100%

 

C

Hotel Investissements et Management AG

Fribourg

CHF

100

100%

 

C

Volki-Land AG

Volketswil

CHF

50

100%

100%

C

OR omiresidences Sàrl

Lens

CHF

20

100%

100%

C

Les Résidences Privées SA

Lens

CHF

100

100%

100%

C

La Foncière de la Dixence SA

Lens

CHF

200

75%

50%

C 2)

Raffaele Investissement SA

Lens

CHF

100

50%

50%

Q

 

 

 

 

 

 

 

Real Estate Services

 

 

 

 

 

 

Privera AG

Muri bei Bern

CHF

4,000

100%

100%

C

Régie du Rhône SA

Lancy

CHF

3,000

100%

100%

C

Régie du Rhône Crans-Montana SA

Lens

CHF

100

100%

100%

C

Hauswartprofis AG

Mägenwil

CHF

200

100%

 

C

WEGRA Holding AG

Auenstein

CHF

100

100%

 

C

Hauswartprofis Mägenwil AG

Mägenwil

CHF

200

100%

 

C

Hauswartprofis ZH AG

Dübendorf

CHF

100

100%

 

C

Hauswartprofis Baar GmbH

Baar

CHF

20

100%

 

C

Treos AG

Volketswil

CHF

1,000

100%

100%

C

Synergie Services Facility Management SA

Lancy

CHF

100

100%

100%

C

AGD Renovationen AG

Neuenhof

CHF

500

53%

53%

C

Chauffage-Assistance SA

Geneva

CHF

100

100%

100%

C

Clim-Assistance SA

Geneva

CHF

100

100%

100%

C

SoRenova SA

Lens

CHF

100

100%

100%

C

Insite Management SA

Echandens

CHF

120

42%

42%

E

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

Investis Holding SA

Zurich

CHF

1,280

n.a.

n.a.

C

Investis Investments SA

Lens

CHF

1,000

100%

100%

C*

Investis Management SA

Lens

CHF

100

100%

100%

C

Investis SA

Lens

CHF

100

100%

100%

C

Minas-Tirith SA

Wollerau

CHF

100

100%

100%

C

Transimo SA

Fribourg

CHF

100

100%

100%

C

Polytech Ventures Holding SA

Ecublens

CHF

143

50%

 

E

C) Consolidated as at 31 December 2017

Q) Joint venture, quota consolidated as at 31 December 2017

E) Included in the consolidated financial statements using the equity method

*) Investment held directly by Investis Holding SA

1) Ownership interest is equal to voting rights

2) Until 21 November 2017 quota consolidated