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 2019, 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.
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, cash flows 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.
application of new 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 2019 and drawn up according to uniform accounting principles. 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. The 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 the Investis Group jointly controls with one or more joint venture partners, and whereby the Investis Group is heavily involved in the management. Joint ventures are consolidated proportionally.
Associates are all companies on which the Investis Group exerts significant influence but does not have control. This is generally evidenced when the 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 offset against retained earnings. Where an offset 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 offset against retained earnings. Goodwill arising from acquisitions of associates remains 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 (after goodwill recycling) recognised in the operating result. Non-controlling interests in equity and profit are presented separately in the consolidated balance sheet and the consolidated income statement.
Changes in the scope of consolidated companies are disclosed in Note 1.
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 are made up of investments in shares, 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 and valued at cost.
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 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.
Properties reclassed from investment properties under construction (non-current assets, valued at fair value) are subsequently valued at the lower of this value (including construction costs after reclassification) or fair value.
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 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 fair value are recognised in the income statement in the period in which they occur. 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
Tangible fixed assets are stated at cost less depreciation and impairment. The depreciation is recognised 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 recognised on a straight-line basis over their estimated useful lives: three to five years for intangible assets. Internally generated intangible assets are not capitalised.
Financial assets
These items include investments in associates, long-term loans and other long-term receivables that are stated at nominal value. Investments in associates are ownership interests of more than 20% in companies in which the Investis Group has no control. They are valued and accounted for using the equity method.
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 respective note.
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.
Current and non-current financial liabilities
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. Financial liabilities are stated at nominal value.
Bond issuance 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 14% 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 Investis Group) are accounted for as a reduction of equity at acquisition cost and are not subsequently remeasured. When shares are used or 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
Investis has no derivative financial instruments outstanding at the balance sheet date.
Transactions with related parties
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 23.
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.
Contingent liabilities and other obligations
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, services and/or goods, 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 Investis Group. Such risks are then either borne, avoided, reduced or passed on by the measures decided upon by the Board of Directors.
1. Acquisitions and disposals of consolidated companies
Transactions in 2019
On 1 January 2019, Régie du Rhône SA acquired and integrated the property management portfolio of DHR Immobilier SA.
On 28 February 2019, 100% of the shares in Régie du Rhône Crans-Montana SA, Lens, were sold.
On 25 March 2019, half of the investment in La Foncière de la Dixence SA, Lens, was sold. The remaining 42% stake in the company was recognised as an investment in associates.
On 27 June 2019, 100% of the shares in Valotel SA, Lens, were sold.
On 8 August 2019, 100% of the shares in Régie du Rhône SA, Lancy, were sold.
On 8 August 2019, Investis Properties SA acquired 100% of the shares in the real estate companies RGS Immobilier SA, Geneva, and Intercapital Development & Management SA, Geneva.
On 30 August 2019, Hauswartprofis AG acquired and integrated the facility services portfolio of Handwerker & OPTIVER AG, Ettingen.
On 18 November 2019, 100% of the shares in Chauffage-Assistances SA, Geneva, Clim-Assistance SA, Geneva, and Synergie Services Facility Management SA, Lancy, were sold.
On 13 December 2019, Hauswartprofis AG acquired and integrated the facility services portfolio of Geronet SA, Vernier.
On 18 December 2019, all shares held (60%) in C.T. Creative Technologies SA, Martigny, were sold.
In 2019, net assets acquired in an acquisition in 2018 had to be adjusted. The recognition of a newly identified liability of CHF 0.07 million reduced the net asset value of the acquired company and consequently led to an increase in goodwill offset against retained earnings of CHF 0.04 million and a reduction in non-controlling interests of CHF 0.03 million.
Transactions In 2018
On 1 February 2018, Investis Properties SA acquired 100% of the shares in the real estate
company Société d’investissements immobiliers SII SA, Geneva, and merged it into the
acquiring company.
On 1 February 2018, 100% of the shares in Domus Flavia Investments AG, Geneva, were
sold.
On 3 July 2018, Investis Properties SA acquired 100% of the shares in the real estate company Carmat S.A., Lausanne.
On 23 August 2018, Investis Investments SA increased its shareholding in the company La Foncière de la Dixence SA from 75% to 83%.
On 28 August 2018, 100% of the shares in Hotel Investissements et Management SA, Fribourg, were sold.
On 20 November 2018, Investis Investments SA acquired 60% of the shares in the company C.T. Creative Technologies SA, Martigny. The company provides services in the area of property management software solutions.
Non-cash effects in 2018
With the signing of the purchase price agreement for the acquisition of Société dʼinvestissements immobiliers SII SA, Geneva, a deposit of CHF 10.8 million was paid in December 2017. As the transaction was completed only in February 2018, the corresponding cash outflow was reported as increase in other receivables in the net cash from operating activities (cash flow) in the Annual Financial Statements 2017.
With the signing of the purchase price agreement for the sale of Domus Flavia Investment AG, Geneva, a deposit of CHF 1.5 million was received in December 2017. As the transaction was completed only in February 2018, the corresponding cash inflow was reported as increase in other payables in the net cash from operating activities (cash flow) in the Annual Financial Statements 2017.
GROUP INTERNAL MERGERS in 2018
As at 1 January 2018 following Group companies were merged:
- –Casamar AG, Geneva, Jalu SA, Lens, Investis Patrimoine SA, Lens, Les Résidences Privées SA, Lens, Parallax SA, Geneva, Serge Spaggiari SA, Perly-Certoux, Transimo SA, Fribourg, and WEGRA Holding AG, Auenstein, were merged into Investis Properties SA, Lens.
- –Hauswartprofis Baar GmbH, Baar, Hauswartprofis Mägenwil AG, Mägenwil, Hauswartprofis ZH AG, Dübendorf, and Treos AG, Volketswil, were merged into hauswartprofis AG, Mägenwil.
- –Minas-Tirith SA, Wollerau, was merged into Investis Investments SA, Lens.
3. Revenue from letting of properties
Duration of existing fixed leases of commercial properties
The duration of existing fixed leases of commercial properties was:
Most important tenants
The five most important tenants measured according to property income were (in alphabetical order):
- –As of 31.12.2019: Clamac SA, Globe Plan et Cie SA, Hospice Général, Permanent
Mission of India to the UN in Geneva, Régie du Rhône SA - –As of 31.12.2018: Hospice Général, Permanent Mission of India to the UN in Geneva, Valotel Management (Fribourg) Sàrl, Valotel Management (Rothrist) AG and Valotel Management (Sion) SA
4. Personnel expenses
There are no pension funds with a surplus or deficit (full-value insurance) or employer contribution reserves.
5. Other operating expenses
6. Income from disposal of properties
7. Financial result
In 2019, the stake in Polytech Ventures Holding SA was reduced from 50% to 33%, the remaining financial investment in La Foncière de la Dixence was sold and the stake in YetiVisit SA was reduced from 40% to 13%, resulting in income from disposal of associates of CHF 4.7 million.
The weighted average interest expense for interest-bearing financial liabilities amounted to 0.6% (2018: 0.5%).
Other financial expenses include CHF 0.8 million (2018: CHF 0.4 million) for the issuance of bonds.
8. Income taxes
The difference between the expected income tax expense and the income tax expense shown in the income statement can be explained as follows:
Due to the release of deferred tax liabilities the total income taxes resulted in an income in 2019.
In 2019, deferred taxes in the amount of CHF 61.4 million were reversed after the Canton of Geneva voted on 19 May 2019 that the corporate tax reform should be implemented at cantonal level at the beginning of 2020.
Deferred income taxes are calculated for each subsidiary using the local tax rates. In 2019, the non-capitalised tax assets from losses carried forward decreased from CHF 0.5 million in 2018 to CHF 0.1 million. Deferred income tax assets relate to deferred income taxes on temporary differences. Accrued expenses and other liabilities include accrued taxes of CHF 3.9 million (2018: CHF 5.8 million).
9. Earnings per share
Earnings per share are calculated by dividing net profit attributable to Investis Holding SA shareholders by the weighted average number of outstanding shares entitled to dividends. For both periods under review, there were no dilutive effects.
Weighted average number of shares
Earnings per share
10. Trade receivables
In 2018, 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. These receivables were connected to Group companies sold in 2019.
11. Properties held for sale
In 2019, the consolidated Group company La Foncière de la Dixence SA was deconsolidated, together with the development project “Route de la Forêt Derrière" in Hérémence. Moreover, several apartments of “Route de Vermala 43/45” in Crans-Montana, “Route de Crans 89” in Lens and “Gstaadstrasse 6/8” in Saanen were sold. The increases relate to the acquisition of “Avenue Neuve 22” in Ardon and to ongoing construction activities in development properties. The properties “Vermala 43/45” in Crans-Montana and “Route de Crans 87” in Lens were reclassified from residential properties.
In 2018, the two properties “Rue de Zurich 35” in Geneva and “Rue du Vieux-Chêne 20/22” in Chêne-Bougeries were acquired in connection with the takeover of Société d’investissements immobiliers SII SA. The increases relate to ongoing construction activities in development properties. The properties “Rue de Zurich 35” in Geneva, “Rue du Vieux-Chêne 20/22” in Chêne-Bougeries, one apartment in the jointly held (50%) property “Rue du Prado 19” in Lens and one apartment of “Route de la Forêt Derrière” in Hérémence were sold. The property “Chemin des Chantres 8” in St.-Sulpice was reclassified from investment properties under construction and the property “Route de Crans 89” in Lens was reclassified from residential properties.
12. Investment properties
Increases consisted of value-enhancing renovations, purchases of buildings and investments.
In 2019, the four residential properties “Chemin de la Rochette 4” in Montpreveyres, “Avenue de Bussy 22/24” in Moudon, “Chemin de Valentines 25” in Bex, “Rue Juste Olivier 13” in Nyon, one part of the commercial property “Grand Place 12/14” in Lens and the undeveloped plot of land “Route de Vermala” in Crans-Montana were sold. Moreover, the consolidated Group company “Valotel SA” was disposed of, together with three commercial properties “Grand-Places 14” in Fribourg, “Avenue du Grand-Champsec 21” in Sion, “Helblingstrasse 9” in Rothrist and two properties under construction “Heiligkreuzstrasse” in St. Gallen and “Allée de la petite Prairie” in Nyon. The residential properties “Route de Vermala 43/45” in Crans-Montana and “Route de Crans 87” in Lens were reclassified as properties held for sale.
In 2018, the residential property “Route de Pliany 16/18” in Crans-Montana, the commercial property “Chemin Lambien” in Sion and the property under construction “Route du Lac” in Granges-Paccot were sold. Additionally, the consolidated Group company “Domus Flavia Investments AG” was disposed of, together with the commercial property “Rue Peillonnex 39” in Chêne-Bourg.
The valuation of investment properties as at 31 December 2019 was carried out by CBRE (Geneva) SA in accordance with national and international standards and guidelines (valuations were performed by Wüest Partner AG until 31.12.2018).
13. Tangible fixed assets and intangible assets
All intangible assets were acquired.
14. 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
Effect on consolidated income statement
Effect on consolidated balance sheet
15. Financial assets
In 2019, loans to third parties include unpaid selling price consideration of CHF 3.8 million and CHF 8.3 million of the former shareholder loan to disposed Group company La Foncière de la Dixence SA.
In 2018, investments in associates include acquisitions of 28.6% of the share capital of PropTech Partners SA and 40% of the share capital of YetiVisit SA. Other financial assets include acquisitions of 10.7% of the share capital of Vanguard Internet SA and 10.8% of the share capital of Flatfox AG.
16. Other liabilities
In 2018, 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. These liabilities were connected to Group companies sold in 2019.
17. Financial liabilities
Mortgages and bonds due for repayment within the next twelve months are reported under current financial liabilities.
In 2019, a CHF 140 million bond maturing on 15 February 2021 was issued on 14 February 2019. The coupon is 0.773%. The proceeds were used to refinance the CHF 140 million bond that expired on 14 February 2019. Furthermore, a CHF 140 million bond maturing on 9 October 2023, with a coupon of 0.05%, was issued on 9 October 2019.
In 2018, a CHF 100 million bond, maturing on 12 June 2020, with a coupon of 0.35%, was issued on 12 June 2018.
As at the balance sheet date, the following bonds are outstanding:
As at 31 December 2019, no properties (31.12.2018: properties in the amount of CHF 233.7 million) were pledged to secure mortgages and available credit lines. Credit lines (without securities) totalled CHF 107 million (31.12.2018: CHF 205 million), of which CHF 93 million was unused as at 31 December 2019 (31.12.2018: CHF 171 million).
As at the balance sheet date, amounts falling due are as follows:
Interest maturity periods are as follows (composition until next interest rate adjustment):
18. Provisions
The position includes mainly provisions for pending legal cases and disputes (CHF 0.8 million, 2018: CHF 0.3 million), for lease commitments (CHF 0.4 million, 2018: CHF 0.7 million) and for warranties (CHF 0.2 million, 2018: CHF 0.3 million).
19. Deferred taxes
Deferred taxes are calculated using the local applicable tax rates for each subsidiary (see Note 8).
20. Equity
As at 31 December 2019, 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 2018.
Conditional share capital
Article 3a of the Company’s Articles of Association sets out that the Company’s share capital shall be increased by a maximum amount of CHF 30,000 through the issuance of no more than 300,000 fully paid-up registered shares with a nominal value of CHF 0.10 by way of the exercise of options or similar rights belonging to employees and members of the Board of Directors and the Executive Board in accordance with the applicable regulations and resolutions of the Board of Directors.
Article 3b of the Company’s Articles of Association sets out that the share capital may be increased by the issuance of up to 1,280,000 fully paid-in registered shares with a nominal value of CHF 0.10 each, up to CHF 128,000, by means of the exercise of conversion rights and/or warrants granted in connection with newly or already issued bonds or similar debt instruments of the Company or its Group companies to Company creditors and/or investors.
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 of the Group amount to CHF 4.0 million (2018: CHF 6.1 million).
Treasury Shares
Members of the Board of Directors and the Executive Board received part of their compensation in shares. See compensation report.
21. Contingent assets and liabilities
In 2018, a Group company issued a bank guarantee until 31 March 2021 of CHF 13.7 million for a Valotel SA construction project in St. Gallen. Following the sale of Valotel SA on 27 June 2019, this bank guarantee was not replaced by the buyer and remains as a contingent liability of the Group.
In 2018, there are no material contingent assets or liabilities on the balance sheet date.
22. Pledged assets and off-balance sheet lease/rental obligations
23. Transactions with related parties
Business transactions with related parties are based on standard commercial contractual forms and conditions. All transactions are included in the 2019 and 2018 consolidated financial statements. There are loans and services from and to related parties. The respective balances are reported separately in these financial statements (see Note 10 and Note 15).
The consolidated income statement 2019 contains rental revenue amounting to CHF 0.7 million (2018: CHF 1.4 million) from the letting of three hotels in Fribourg, Rothrist and Sion to companies controlled until 27 June 2019 by Stéphane Bonvin.
In 2018, the commercial property “Chemin Lambien” in Sion was sold for CHF 5.1 million to, and financial assets of related parties amounting to CHF 15.0 million were fully repaid by a company controlled by Stéphane Bonvin.
24. Events after the balance sheet date
The Board of Directors approved the consolidated annual financial statements for publication on 23 March 2020. These statements are also subject to approval by the Annual General Meeting of Investis Holding SA on 28 April 2020.
No events occurred between 31 December 2019 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 2019 or disclosure in this section.