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 2021, 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 2021 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 comprise the financial statements of Investis Holding SA, Zurich and all subsidiaries that belonged to the Group during the year and over which Investis Holding SA had the power to govern the financial and operating policies so as to obtain benefits from their activities. At Investis Group, this is achieved when more than 50% of a subsidiary’s share capital or voting rights is unconditionally owned directly or indirectly by Investis Holding SA. These entities are fully consolidated; assets, liabilities, income and expenses are incorporated in the consolidated accounts and all intercompany balances are eliminated. Non-controlling interests are presented as a separate component of the Group’s equity and net profit. A list of the subsidiaries included in the consolidation is presented in Note 24.

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.

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 as part of revenue.

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 less cost to sell 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.

Investment properties intended for sale are classified under current assets. They are recognised at lower of cost or fair value less cost to sell.

Properties reclassed from investment properties (non-current assets, valued at fair value) are subsequently valued at the lower of this value (including construction costs after reclassification) or fair value less cost to sell.

Investment properties

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

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 a semi-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 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 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.

Tangible fixed assets

Tangible fixed assets, including owner-occupied properties, that do not meet the definition of investment properties, 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; 50 years for owner-occupied properties.

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 of three to five years. No internally generated intangible assets were 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

Financial liabilities are stated at nominal value.

Issuance costs, reduced by the amount of the premium, are charged in full to the income statement upon issue of the bond.

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

The pension obligations of the Group companies for retirement, death or disability are based on the applicable regulations and practices. All companies are located in Switzerland, where the pension plan is administered by a legally independent foundation. 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 re-measured. When shares are used or sold out of treasury shares, the resulting profit or loss is recognised in the capital reserves.

Share-based compensation

Share-based compensation is stated at fair value and recognised in personnel expenses in the period in which the service is performed. Detailed information on share-based compensation to members of the Board of Directors and the Executive Board is disclosed in Note 4 and in chapters 4.2 (for the Board of Directors) and chapter 4.3.3 (for the Executive Board) of the Compensation Report.

Revenue

Revenue includes the actual rental income from properties, income from Real Estate Services as well as other revenues. Revenue is recorded over the lease term or upon provision of services.

Direct expenses

Direct expenses contains all relating to maintenance and administration (including building superintendent remuneration, marketing and property taxes) that cannot be passed on to tenants as well as cost items directly related to income from Real Estate Services.

Income from disposal of properties

The result from property sales is recognised in income from disposal of properties and also includes the result of disposals of consolidated real estate companies.

Financial result

The financial result 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 22.

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 “Eliminations” 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 an outflow of funds without a useable inflow of funds, services and/or goods 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 2021

On 12 March 2021, Investis Investments SA acquired 100% of the shares in the facility services company Rohr AG, Hausen.

On 18 March 2021, Investis Investments SA acquired 100% of the shares in the facility services company SEA lab – Safety and Environmental Analysis SA, Bienne.

On 3 May 2021, Investis Investments SA redeemed the irrevocable obligation to purchase the remaining 20% of the shares in the already consolidated facility services company ProLabo Sàrl, Sion, and thereafter owns 100% of this company.

TRANSACTIONS IN 2020

On 10 January 2020, Investis Investments SA increased its shareholding in the proportional consolidated company Raffaele Investissement SA from 50% to 75%. On 17 January 2020, it increased its shareholding further to 100%. Hence, the formerly proportionally consolidated company is thereafter fully consolidated.

On 27 March 2020, Investis Investments SA acquired 80% of the shares in the company ProLabo Sàrl, Sion. The company provides services and analyses concerning building pollutions. The purchase agreement contains an irrevocable obligation to purchase the remaining 20% of the shares latest as per 31 December 2022. The purchase price depends on the operating result of the acquired company in the financial year prior to the execution of the put option by the seller.

On 31 August 2020, 100% of the shares in Raffaele Investissement SA, Lens, were sold.

GROUP INTERNAL MERGERS IN 2020

As at 1 January 2020, the following Group companies were merged with Investis Properties SA, Lens:

• –Carmat S.A., Lens
• –Intercapital Development & Management SA, Geneva
• –RGS Immobilier SA, Geneva

2. Segment reporting

SEGMENT INFORMATION 2021

SEGMENT INFORMATION 2020

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 accounted for 9.9% of the gross rental income (31.12.2020: 4.5%). The five most important tenants were the following:

4. Personnel expenses

Share-based compensation

Participants of share-based compensation are the members of the Board of Directors, the Executive Board and employees in key management positions. The members of the Board of Directors receive fixed remuneration, half of which is awarded in shares. The remuneration of members of the Executive Board and key management positions consists of a fixed and a variable component. At least 50% of the variable compensation is paid in shares. Further details and the description of the Investis share plan are disclosed in chapter 4.3.3 of the compensation report.

Employee benefits

Pension benefit expenses

The capitalisation or use of possible economic benefits (stemming from a surplus in the pension institution) is neither intended nor do the conditions for this exist.

Employer contribution reserve (ECR)

5. Other operating expenses

6. Income from disposal of properties

For details of the properties sold see Note 11 and Note 12.

7. Financial result

The weighted average interest rate was 0.41% (2020: 0.53%). The average interest rate of the outstanding financial liabilities as per 31 December 2021 stands at 0.34% (31.12.2020: 0.55%).

In 2021, the stake in Flatfox AG (10.8%) was sold, resulting in income from disposal of financial assets of CHF 2.6 million.

In 2021, other financial expenses include CHF 0.3 million (2020: –) 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:

Deferred income taxes are calculated for each subsidiary using the local tax rates.

In 2021, the non-capitalised tax assets from losses carried forward amount to CHF 0.1 million (2020: CHF 0.1 million). Deferred income tax assets relate to deferred income taxes on temporary differences. Prepaid expenses include income taxes of CHF 11.5 million (2020: –). Accrued expenses include income taxes of CHF 6.1 million (2020: CHF 5.7 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

11. Properties held for sale

Increases consisted of purchases of buildings and ongoing construction activities in development properties.

In 2021, several apartments of “Route de Crans 89” in Lens, “Gstaadstrasse 6/8” in Saanen and “Avenue Neuve 22” in Ardon, were sold.

In January 2020, the shareholding in the proportional consolidated company Raffaele Investissement SA was increased from 50% to 100%. Hence, the property “Le Prado” was thereafter fully consolidated until August 2020, when 100% of the shares of Raffaele Investissement SA were sold. Moreover, several apartments of “Avenue Neuve 22” in Ardon, “Gstaadstrasse 6/8” in Saanen, “Route de Crans 89” in Lens and “Route de Vermala 43/45” in Crans-Montana were sold in 2020. The property “Chemin des Chantres 8” in St-Sulpice was reclassified as residential property.

12. Investment properties

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

In 2021, the investment property under construction “Route d‘Aproz 65” in Sion was reclassified to commercial properties upon completion.

In 2020, the residential property “Rue de la Mairie 6” in Geneva and three commercial properties – “Chemin des Olliquettes 10” in Petit-Lancy, “Rue du Valais 7/9/11” in Geneva and “Chemin de Grély 21” in Sion – were disposed of. The property “Chemin des Chantres 8” in St-Sulpice was reclassified from properties held for sale.

As at 31 December 2021 and 2020, the valuation of investment properties was carried out by CBRE (Geneva) SA in accordance with national and international standards and guidelines.

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 2021, loans to third parties include unpaid selling price consideration of CHF 3.4 million (2020: CHF 3.4 million) and CHF 2.0 million (2020: CHF 4.1 million) of the former shareholder loan to disposed Group company La Foncière de la Dixence SA.

In 2021, investments in associates include acquisitions of 41% of the share capital of PlanYourMove SA. Other financial assets include the increase of the investment in the share capital of Taurus SA to 8% and the disposal of the participation of 11% of the share capital of Flatfox AG.

In 2020, investments in associates include acquisitions of 47% of the share capital of RedPapillons SA and 33% of the share capital of LM Properties SA. Other financial assets include the acquisition of 6% of the share capital of Taurus Group SA. The remaining participation of 13% of the share capital of YetiVisit SA was sold.

16. Financial liabilities

Bonds due for repayment within the next twelve months are reported under current financial liabilities.

As at 31 December 2021 and 2020, no properties were pledged to secure available credit lines. Credit lines with Swiss banks (without securities) totalled CHF 382 million (31.12.2020: CHF 382 million), of which CHF 198 million was unused as at 31 December 2021 (31.12.2020: CHF 368 million).

In 2021, a CHF 115 million bond maturing on 14 February 2025 was issued on 15 February 2021. The coupon is 0.25%. The proceeds were used to refinance the CHF 140 million bond that expired on 15 February 2021, with a coupon of 0.773%. The CHF 100 million bond, maturing on 15 November 2021, with a coupon of 0.55%, was repaid on redemption date.

In 2020, the CHF 100 million bond, maturing on 12 June 2020, with a coupon of 0.35%, was repaid on redemption date.

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

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

The interest maturity periods correspond to the above-listed maturities. The weighted average interest rate of the outstanding financial liabilities as per 31 December 2021 stands at 0.34% (31.12.2020: 0.55%).

17. Provisions

The position includes provisions for pending legal cases and disputes, for warranties and for lease commitments.

18. Deferred taxes

Deferred taxes are calculated using the local applicable tax rates for each subsidiary (see Note 8).

19. Equity

As at 31 December 2021, 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 2020.

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 9.9 million (2020: CHF 3.9 million).

TREASURY SHARES

Members of the Board of Directors, the Executive Board and employees in key management positions received part of their compensation in shares. See compensation report and Note 4.

20. Contingent assets and liabilities

In 2021, the bank guarantee in the amount of CHF 13.7 million in connection with the construction project of Valotel SA in St. Gallen expired unused after the completion of the project. With the purchase of the remaining 20% stake in ProLabo Sàrl, the corresponding irrevocable purchase obligation expired.

In 2020, Investis Investments SA acquired 80% of the shares in the company ProLabo Sàrl, Sion. The purchase agreement contains an irrevocable obligation to purchase the remaining 20% of the shares latest as per 31 December 2022. The purchase price depends on the operating result of the acquired company in the financial year prior to the execution of the put option by the seller.

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

As at 31 December 2021 and 2020, there are no pledged assets.

Off-balance sheet lease and rental obligations are structured as follows, according to maturity:

22. Transactions with related parties

Business transactions with related parties are based on standard commercial contractual forms and conditions. All transactions are included in the 2021 and 2020 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).

In 2020, 100% of the shares of Raffaele Investissement SA were sold by Investis Investments SA for CHF 6.1 million to a company controlled by Stéphane Bonvin.

23. Events after the balance sheet date

On 28 January 2022, two 0.0% private placements were issued with a volume of CHF 20 million (maturing at the end of March) and CHF 30 million (maturing at the end of April). In addition, another 0.0% private placement with a volume of CHF 20 million (maturing at the end of May) was issued on 25 February 2022.

The Board of Directors approved the consolidated annual financial statements for publication on 22 March 2022. These statements are also subject to approval by the Annual General Meeting of Investis Holding SA on 3 May 2022.

No other events occurred between 31 December 2021 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 2021 or disclosure in this section.

24. Group companies