2018 - Hapimag AG2018 Annual Report. 2 For 2019, alongside guest satisfaction, ... Consolidated companies as at 31.12.2018 56 Report of the Statutory Auditors Annual financial statements

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2018Annual Report

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For 2019, alongside guest satisfaction, attracting new shareholders and digitalisation are the top priorities.Dr. iur. Giatgen Peder Fontana, President of the Board of Directors

and Hassan Kadbi, Chief Executive Officer

“”

Hassan Kadbi Dr. iur. Giatgen Peder Fontana

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SHAREHOLDERS’ NEWSLETTERFor Hapimag, 2018 was a successful year. For the first time, our resorts welcomed more than 400 000 guests, and we are able to present a very good operating result once again.

Dear Shareholders

Around 500 years ago, William Shakespeare penned the words “Winning begins with beginning” on a piece of paper. Would he, in today’s digital age, agree to have his words copied and pasted? We hope so. Because his wise words fit Hapimag’s past reporting year wonderfully.

The year 2018 was marked by many innovations. Among other things, we opened a new resort in Cavallino-Treporti, we completed some major renovation projects and worked intensively on improving the quality of our service. The changes and improvements we started to implement at the beginning of the year as part of our “new services” initiative are having a positive impact. The booking situation has significantly improved for the vast majority of our shareholders and members. And we have come a good deal closer to our declared goal of increasing our exchanges with shareholders and members and of making our communication with them transparent.

So we are pleased to announce that once again we achieved a very good operating result of EUR 17,9 million in 2018 and a positive consolidated result of EUR 14,9 million. These good results are attributable to the fact that we increased average occupancy and sales in the resorts.

For the first time in Hapimag’s 55-year history the total of guests rose above 400 000 to around 415 000. At the same time, guest satisfaction remains high. Twenty Hapimag resorts received an award from the independent HolidayCheck rating platform, nine of them were even given a Gold Award. We can be proud of this because it means that we have done a good job.

For 2019, alongside guest satisfaction, attracting new shareholders and digitalisation are the top priorities. Furthermore, we continue to focus on our existing corporate goals: to reach 130 000 shareholders and members by 2022; to generate a sustained number of 3 million overnight stays in the Hapimag resorts; to enhance the reputation of Hapimag and thus the value of our company; to focus on our core business (hospitality) and to increase the quality of our services.

It is important to mention here that Hapimag’s profits will be lower in the coming years. Hapimag keeps its inflation-adjusted annual subscription charges stable and deliberately reduces its earnings in order to generate benefits for its shareholders. For example:

– in the form of discounts on the annual charge

– through higher loyalty premiums for shareholders holding four or more shares

– through the automatic conversion of loyalty premiums into residence points

– through new terms and conditions for cancellations and transfers, for example by waiving the compensation charge.

We look forward to continuing our work in 2019 with energy, passion and determination.

Together with you we will develop Hapimag further. Thank you for the trust you place in us.

Dr. iur. Giatgen Peder Fontana Hassan Kadbi

President of the Board of Directors Chief Executive Officer

Steinhausen, March 2019

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CONTENTS

3 Shareholders‘ newsletter

Management report

6 Board of Directors

8 Executive Board

10 Corporate Governance

16 Our strategy

18 Business performance

24 Finance

Key figures

26 Hapimag key figures

28 Hapimag Resorts key figures

Consolidated financial statements of Hapimag AG as at 31.12.2018

30 Consolidated balance sheet

31 Consolidated income statement

32 Changes in consolidated equity

33 Consolidated cash flow statement

Notes to the 2018 consolidated financial statements of Hapimag AG

34 1. Consolidated accounting policies

39 2. Notes

52 3. Business divisions

54 4. Consolidated companies as at 31.12.2018

56 Report of the Statutory Auditors

Annual financial statements of Hapimag AG as at 31.12.2018

58 Balance sheet

60 Income statement

Notes to the 2018 financial statements of Hapimag AG

61 1. Accounting policies

62 2. Notes to balance sheet and income statement items

64 3. Further information

65 Proposal of the Board of Directors for the appropriation

of the balance sheet profit as at 31.12.2018

66 Report of the Statutory Auditors

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72,4 %Resort occupancy

Other key figures on page 23.

2,817 millionOvernight stays(+ 4,8 %)

414 916Guests in the resorts (+ 8,6 %)

165 026 Apartment bookings

180 000Followers on social media

125 558Shareholders and members

58,2 %Online bookings (+ 7,1 %)

2018 IN FIGURES

184,8 million Operating income in EUR (+ 4,6 %)

20HolidayCheck Awards (+ 3)

9HolidayCheck Gold Awards

(Values in brackets = changes compared to previous year)

(+ 6)

(+ 8,8 %)

(+ 0,6 %)

(– 2,3 %)

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BOARD OF DIRECTORS The Board of Directors of Hapimag has five members and moni-tors the company’s business activities. It determines the compa-ny’s strategy and the principles of corporate governance. It is chaired by Giatgen Peder Fontana.

DR. IUR. STEFAN SCHALCH

Vice President of the Board of Directors,

Wallisellen, Switzerland

Stefan Schalch has been a member of the Board of

Directors since 2000. He completed a doctorate in times-

haring at the University of Zurich and also has a Master

of Laws from Cambridge University (UK). He is a partner

in the law fi rm Legis Rechtsanwälte AG, Zurich, specia-

lising in commercial law (including tourism and energy

law), and is also active as an independent member

of the Board of Directors. A proven industry expert,

Stefan Schalch also brings knowledge gained as member

of the legis lative committee of the Resort Development

Organisation (RDO), which he has been a member of

since 1998.

DR. IUR. GIATGEN PEDER FONTANA

President of the Board of Directors,

Salouf, Switzerland

Giatgen Peder Fontana has been President of the Board

of Directors since 2013. He studied canon and civil law

at the universities of Bern and Zurich, gaining his licentiate

in 1978 in Zurich and his doctorate in 1986. During the

course of his career, he has held positions in various com-

panies as CEO and Marketing Manager at an international

level. Since 1991, Giatgen Peder Fontana has been

contributing his experience on several Boards of Directors

and still serves as a member of the Board of Directors,

president, foundation management council member and

partner. Furthermore, he advises companies on corporate

and management development in strategic marketing.

Management report

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ANDREAS WINIARSKI (since 25 April 2018)

Member of the Board of Directors | Berlin, Germany

Andreas Winiarski has been a member of the Board of

Directors since 2018. He is a partner at Earlybird Venture

Capital, one of Europe’s leading venture capital funds. Before

that he was Chief Executive Offi cer of Rocket Internet

and helped expand the small start-up into a listed company

with a market cap in the billions of dollars and more than

35 000 employees. He has experience in corporate com-

munications and as the digital coordinator of the “Bild”

newspaper editorial department, while also acting as a

consultant for the German government on digital issues.

LIC. OEC. HANS PETER KÖNIG (until 25 April 2018)

Member of the Board of Directors | Greifensee, Switzerland

Hans Peter König was a member of the Board of Directors

from 2002 until 2018. Following his education as a Swiss-

certifi ed hotel manager (EHL), Hans Peter König completed

his studies in economics at the University of St. Gallen. He is

distinguished by his long-standing management experience

as Vice-President of Business Development & Marketing

and as Chief Executive Offi cer in various international orga-

nisations. As an independent management consultant with

a focus on marketing, hospitality and gastronomy, he is now

a managing partner and CEO with König & Partner AG.

PHILIPP RIES

Member of the Board of Directors | Zurich, Switzerland

Philipp Ries has been a member of the Board of Directors

since 2017. He is Head of EMEA Assistant Distribution

Partnerships at Google Switzerland GmbH. Before this,

he worked at Hewlett Packard International. He has many

years of management experience in the SME fi eld and

possesses well-grounded knowledge in the areas of new

technologies and digital marketing. Philipp Ries has a

master’s degree in Computer Science & Economics from

the University of Zurich and completed the Stanford

Executive Program at the Stanford University Graduate

School of Business NDS.

LIC. RER. POL. KURT SCHOLL

Member of the Board of Directors | Steinhausen, Switzerland

Kurt Scholl was CEO of Hapimag from 2003 to 2013 and

has been a member of the Board of Directors since 2013.

Prior to that, he worked as a consultant at KPMG. Kurt

Scholl has a degree in Economics and Business and has

brought with him a wealth of experience as Managing

Director and CEO with various international companies.

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EXECUTIVE BOARD The Executive Board of Hapimag is responsible for the operational management of the company. It is appointed and instructed by the Board of Directors. It is chaired by Hassan Kadbi.

MANUEL CARRASCO ( CHO )

Chief Hospitality Offi cer

Manual Carrasco has worked at Hapimag since 2006. Born

in Spain, he has a diploma in supplementary education

in Spanish, completed the management trainee program-

me at Hotel Rheinpark Plaza Neuss and is a trained restau-

rateur. Before joining Hapimag, Manuel Carrasco worked

as a manager in various international hotel chains. At

Hapimag, he worked in various positions, including Resort

Manager Paguera and Deputy Area Manager Spain,

Portugal & Marrakech, before becoming Operations

Manager in 2015. He has been responsible for the opera-

tional management of the resorts as Chief Hospitality

Offi cer since January 2017, additionally becoming respon-

sible for the Member Services area in February 2018.

HASSAN KADBI ( CEO )

Chief Executive Offi cer

Hassan Kadbi has worked at Hapimag since 2005. He

started working as a Resort Manager in Bodrum, then

as an Area Manager for Greece, Morocco and Turkey,

before assuming responsibility as Chief Resorts Offi cer

for the operational management of the resorts. He has

served as CEO of Hapimag since November 2016. Prior

to 2005, Hassan Kadbi worked for Hilton in various

positions globally. He has a Bachelor of Arts in Interna-

tional Hospitality and Tourism Management from the

University of Bournemouth (GB) and a Higher Diploma

in Hotel Management from the IHTTI School of Hotel

Management in Neuchâtel (CH). Hassan Kadbi was born

and raised in Lebanon and speaks German, English,

Arabic and Greek.

Management report

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DIRK SCHIFFNER ( CCO )

Chief Commercial Offi cer

Dirk Schiffner has been Chief Commercial Offi cer at

Hapimag since May 2017. He has international experience

in direct sales of lifestyle products. He was Sales Director

at PartyLite from 2014 to 2016 and held various manage-

ment, marketing and sales positions at Vorwerk for more

than a decade. The German-Swiss dual citizen studied

Business Economics at the “Europa-Universität Viadrina”,

Frankfurt and graduated from the European School of

Management in Oxford, Madrid and Paris.

DR. OEC. HSG SAVERIO ALBERTI ( CFO )

Chief Financial Offi cer

Saverio Alberti has been Chief Financial Offi cer of

Hapimag since September 2007. After gaining his licen-

tiate and doctorate in Economics with a major in fi nance

and accounting, he worked in the fi nancial departments

of various international companies. Saverio Alberti, from

Ticino, held roles in UBS in the corporate clients area,

CWS Switzerland and Italy, where he was Chief Financial

Offi cer, and Honeywell Analytics as Senior Division

Controller.

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Number of shareholders

Number of sharesheld by shareholders Number of shares

41 795 1 41 795

36 699 2 73 398

14 268 3 42 804

6 890 4 27 560

3 928 5 19 640

1 724 6 10 344

441 7 3 087

592 8 4 736

144 9 1 296

125 10 1 250

130 ≥ 11 1 743

(Shares in circulation) 227 653

(Shares in custody account) 10 347

Total 106 736 Total 238 000

CORPORATE GOVERNANCEOur principles of corporate governance aim to support Hapimag in its long-term development, to minimise risks through the consistent application of these principles and to protect the interests of shareholders, members and other stakeholders. The full Corporate Governance guidelines can be viewed at www. hapimag.com/about-us.

Group structure

Hapimag AG, the parent company of the Hapimag Group,

is a public limited company under Swiss law with its head

office in the canton of Zug, Switzerland. The holiday facilities

made available by Hapimag AG are either owned by it

or are the property of subsidiary companies controlled by

it and belonging to the Group.

Capital structure and shareholders

At 31 December 2018, the ordinary share capital of

Hapimag AG amounted to CHF 41 670 000 and consisted

of 59 300 registered shares with a nominal value of CHF 100

each and 178 700 registered shares with a nominal value

of CHF 200 each. Each share confers the right to cast one

vote. The shares are not traded on the stock exchange and

there is no right to a dividend. Additional information on

the consolidated equity capital is available from the equity

statement in the financial reporting (see page 32). To fulfil the

purpose of the company the statutory subscription right of

shareholders is excluded in Art. 3 of the Articles of Association.

As at 31 December 2018, Hapimag had 106 736 shareholders:

Board of Directors and committees of the Board

of Directors

The duties of the Board of Directors of Hapimag AG are

based on the Swiss Code of Obligations, the Articles of

Association and the Organisation Regulations of the compa-

ny. The Board of Directors consists of five to nine members

elected by the General Meeting. A member of the Board

of Directors is elected for a term of two years and may not

be an Management Team member at the same time.

Organisation

The Board of Directors represents the Company vis-à-vis

third parties, insofar as it has not assigned the Company‘s

business on the basis of the Organisation Regulations to

individual members of the Executive Board or to third parties

(Art. 23 of the Articles of Association). The Board meets as

often as business requires, but at least four times per year.

Management report

11

Strategy and Market

Committee ( SMA)

Audit Committee

(AC )

Nomination and Compensation

Committee ( NCC)

Digital and Infor- mation Technology

Committee (DIC)

Giatgen Peder Fontana (Chair) × ×

Stefan Schalch (Chair) ×

Kurt Scholl (Chair) ×

Philipp Ries × × ×

Andreas Winiarski × (Chair) ×

In 2018, there were a total of five meetings. The meetings

usually last for one day. In addition, there was a two-day

strategy meeting. The CEO sometimes takes part in the

meetings of the Board of Directors and, if necessary,

other members of the Management Team also sometimes

take part. All deliberations of the Board of Directors are

recorded in the minutes.

Four standing committees support the Board of Directors.

The members of these committees are selected by the

Board of Directors. These committees do not have any

authority to reach decisions or issue instructions. They

submit proposals to the Board of Directors and formulate

a basis for decision-making for the Board. The minutes

of the committee meetings are distributed to all members

of the Board of Directors.

Strategy and Marketing Committee (SMA)

The SMA supports the Board of Directors in particular with

developing the marketing, competition, real estate and

product strategy as well as with evaluating the quality of

the programmes and activities in the area of new customers,

existing customers, resorts & hospitality and marketing

(including product management). The SMA reviews the

structures, processes and reporting of these areas.

In 2018, there were four ordinary meetings with the following

main topics: attracting new customers and after-sales

to existing customers and working out the sales strategy

and pricing of the Classic share; determining the resort

positionings, drafting resort business plans and reviewing

the portfolio strategy; improving the Booking Portal and

the website; collaborating with the shareholder associations;

communication and marketing planning; instructing the

management to draft a strategy for the future.

Audit Committee (AC )

The AC supports the Board of Directors in particular with

the monitoring of and compliance with the integrity and

conformity with regulations, with assessing the strategic

and operational financial performance of the Hapimag

Group (including financial and tax planning) as well as with

risk assessment and risk management.

There were four ordinary meetings in 2018. The AC dealt

with the following main topics: constant monitoring of the

business performance; checking annual financial statement;

preparing the financial and portfolio policy; monitoring

the liquidity and financial situation and negotiation with

banks; checking the tax situation in the different countries;

checking the budgets for the following year with recom-

mendation to the Board of Directors; checking the external

and internal control system and the risks; interviewing

potential auditors for the audit from the 2019 financial year

onwards; reporting and proposal to the Board of Directors

for its recommendation to the Annual General Meeting.

Nomination and Compensation Committee (NCC)

The NCC supports the Board of Directors in particular

with questions regarding appointments, dismissals, com-

pensation, qualification of members of the Board of

Directors and the Executive Board as well as with deter-

mining the structure of the contracts of the latter with

Hapimag. The NCC also supports the Board of Directors

in determining the structure of the organisation, particularly

with regard to the Executive Board. It supports the

Board of Directors in searching for members of the Revie-

wing Advisory Board. In addition, the NCC is to be

consulted by the Executive Board before taking decisions

on important personnel questions.

12

Three ordinary meetings and four additional meetings were

held in 2018 in connection with the evaluation of a new

member of the Board of Directors. The focus was on the

following main topics: the new structure of the organisation;

evaluation and proposal to the Board of Directors for a

new member of the Board of Directors as a replacement

for a resigning board member; evaluation and proposal

to the Board of Directors for the election of a new CFO;

setting of the annual targets of the Executive Board and

assessment of target achievement; review of the new

Code of Conduct; revision of the Corporate Governance

guidelines and the Organisation Regulations; drafting

the profi le and regulations for the Reviewing Advisory

Board; evaluation of fundamental personnel issues.

Digital and Information Technology Committee (DIC)

The DIC was created at the 2018 strategy meeting. It

supports the Board of Directors in particular on all issues

relating to the digital transformation of processes and

structures of the company, for example, pertaining to the

development and operation of digital platforms and

channels, increasing the integration of online and offl ine

experiences in the resorts and the IT infrastructure. The

DIC also deals with the evaluation of strategic investments

in digital assets and cooperation ventures in the digital area.

Since 26 July 2018, the DIC has held monthly meetings.

It dealt with the following topics, in particular: review of

the various IT projects and the application strategy. Digital

assets (new Booking Portal and website); introduction

of the OKR (Objectives and Key Results) management

method; marketing and communication; digital experience

in the resorts (improvement of WLAN in the resorts).

Division of decision-making authority between

the Board of Directors and Executive Board

The authorities of the Board of Directors and the Executive

Board are based on the Swiss Code of Obligations, the

Articles of Association and the Organisation Regulations.

The Board of Directors has delegated the management

of the day-to-day operations to the Executive Board

on the basis of the Organisation Regulations. The Executive

Board is responsible for the operational management of

the Hapimag Group.

1 Hapimag Resort Mas Nou

2 Hapimag Resort Cefalù

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Information and control instruments of the Board

of Directors

The Board of Directors is informed monthly about the

fi nancial situation and the ongoing business as part of the

comprehensive Management Information System (MIS).

The MIS prepares every month an income statement, cash

fl ow statement and various key fi gures and compares the

current fi gures to the previous year and to the budget.

The CEO reports to the Board of Directors meetings and

in part to the committee meetings about ongoing day-to-

day operations, the fi nancial situation and the main business

transactions, as well as the execution of duties that were

assigned and upcoming projects.

Every quarter, the CEO informs the Board of Directors

about the main risks and his assessment of the risks on the

basis of the relevance and likelihood of the risk (risk report).

The Board of Directors takes note of the measures defi ned

and to be implemented by the Executive Board to mitigate

the risks and monitors the implementation.

Executive Committee (EC)

The Board of Directors has established a professional

Executive Committee that works full-time for Hapimag and

which is led by the CEO for the operational management

of the Hapimag Group. The EC prepares the decisions of

the Board of Directors and implements its resolutions.

In the reporting year, the EC focused on the following

issues in addition to its normal operating business: to

reach the fi gure of 130 000 shareholders and members;

to generate a sustained number of 3 million overnight

stays in the Hapimag resorts; to enhance the reputation

of Hapimag and thus the value of the company; to focus

on the core business (hospitality) and to increase the

quality of services.

Management Team (MNGT)

The MNGT is the operational management level below

the Executive Committee. The members of the MNGT

report to the CEO or another member of the EC. They

are appointed and recalled by the CEO.

Shareholders’ participation rights

The shareholders as investors have the final decision in the

company. Their decision-making authorities are determined

by law and the Articles of Association. It should be menti-

oned in particular that the individual right to place matters

on the agenda at the Annual General Meeting goes,

in part, well beyond the usual standard (see Art. 11 of the

Articles of Association).

At the 54 th Annual General Meeting on 25 April 2018, there

were 378 shareholders in attendance with a total of 65 049.

The shareholders approved the annual financial statem-

ents and consolidated financial statements for 2017 and

the audit reports. Andreas Winiarski was elected to the

Board of Directors to replace Hans Peter König. The Annual

General Meeting approved the proposal to conduct

a special audit but rejected the second proposal.

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Reviewing Advisory Board

In 2018, the Annual General Meeting added a new provision

to the Articles of Association regarding a Reviewing

Advisory Board. The Reviewing Advisory Board is an inde-

pendent controlling body and, on behalf of the Annual

General Meeting, reviews compliance with regulations by

the company management and its activities, insofar as the

review is not within the scope of the auditors. It is com-

posed of three shareholders that are elected by the Annual

General Meeting based on the recommendation of the

Board of Directors for a term of offi ce of two years each.

The Reviewing Advisory Board will be elected for the fi rst

time at the 2019 Annual General Meeting and will then

take up its responsibilities.

Auditor

The auditor is elected by the Annual General Meeting for

a term of one year. KPMG has been the auditing body

of Hapimag AG since 2001 and also the Group auditor.

The lead auditor for the 2018 fi nancial year is Nicole

Charrière Roos.

The auditors fulfi l the duties incumbent on them in accor-

dance with the law, the Articles of Association, the regu-

lations and the applicable accounting standards and are

in direct contact with the company management.

Information policy

Hapimag’s communication with its shareholders, members,

business partners and employees is open, direct and

transparent. The aim is to provide information about the

company in a transparent manner and provide timely

information about the business development as well as

a true picture of the development of the company.

1 Hapimag Resort Porto Heli

2 Hapimag Resort Budapest

3 Hapimag Resort Bodrum

15

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Our ownership strategy

Our ownership strategy defines the strategic goals the

shareholders and members want to achieve as owners of

Hapimag. The focus is on fulfilling the following interests

of shareholders and members:

– The individual holiday needs of shareholders and

members are met.

– Hapimag shareholders and members have priority

over third-party users and enjoy special conditions.

– Hapimag is competitive in the holiday provider market.

– Growth is controlled and sustainable.

– Risks are minimized by consistently applying

control instruments.

– Communication and accounting are transparent.

Implementing shareholders‘ and members‘ interests based

on the ownership strategy requires a clear performance

mandate at management level of Hapimag, as well as the

development and implementation of control instruments

for the Board of Directors.

Our corporate strategy

Shareholder and member satisfaction as well as the financial

stability of Hapimag are at the core of our long-term,

sustainable corporate strategy. We focus on the following

four strategic priorities:

– Service quality: Offering existing shareholders and

members the best possible service – both in person

while they are on holiday and as part of the expert

advice given by employees before, during and after

the holiday with respect to our full product range and

potential offers.

– Communication: We maintain regular, transparent and

open communication with existing and potential share-

holders and members. In this respect, we mainly use

online channels to reach the widest possible audience.

– Corporate culture: We give our employees more

decision-making powers to foster a motivating corporate

culture.

– Cost optimisation: We review and improve all processes,

structures and technologies to reduce complexity and

to lower costs.

The focus when implementing these priorities of the cor-

porate strategy is on various core aspects. We constantly

improve our services to ensure optimal quality to better

fulfil the wishes and needs of as many shareholders,

members and guests as possible. Quality is our top priority

and is constantly reviewed. Our understanding of quality

centres on:

– Hospitality: We increase our service quality and aim

to raise the occupancy of the resorts. Starting in 2022,

the Hapimag resorts will generate 3 million overnight

stays per year for the long term.

– Sustainability: Our product is built around sustainability

and continuity. The longer people spend on holiday with

Hapimag, the more everyone benefits. Families often stay

with Hapimag over generations. We encourage families

to pass on shares from generation to generation.

OUR STRATEGYThe strategy sets out the framework for the future orientation of Hapimag’s strategic priorities and defines how we should achieve our goals over the medium and long term. It is developed by the Board of Directors with the support of the Strategy and Marketing Committee. The ownership strategy is created by the Board of Directors and aims to develop Hapimag over the long term with a focus on its owners – the shareholders and members.

Management report

17

The positioning of Hapimag and the individual resorts

is based on clarity and uniqueness. We strengthen the

perception of Hapimag as a sustainable holiday provider

that combines tradition and innovation and that takes a

long-term approach. Furthermore, the individual resorts

from Hapimag’s range of offers are highlighted and their

offer is clearly communicated. This supports our:

– Product and sales strategy: Among existing share-

holders and members as well as new customers, the

focus is on the Hapimag Classic share. Our sales strategy

is the acquisition of potential new customers via online

channels and an attractive programme of recommen-

dations for our existing customers. We aim to familiarise

every guest in our resorts with Hapimag and directly

address potential customers.

We see regular and transparent communication as a key

aspect of member satisfaction. Our main focus is on:

– Shareholders and members: The strong support

given to Hapimag shareholders and members and our

communication with them play an important role. We

engage in proactive, timely and transparent communi-

cation. We aim to reach a figure of 130 000 shareholders

and members by 2022.

– Digitalisation: The main focus is on modern online com-

munication, as this allows us to reach a greater audience

and the next generation. Online communication makes

us faster and more effective. Furthermore, it enables

us to reduce the production of printed materials, in line

with our principles of cost optimisation and sustainability.

Our corporate culture is based on the skills and expertise

of our employees. We pay special attention to empowering

our employees by giving them more:

– Decision-making responsibilities: We let our employees

make more decisions, in line with our responsible

management and performance culture. By doing so, we

foster a sense of appreciation and trust, which helps

ensure that we can support our shareholders and members

more efficiently and professionally.

We constantly analyse our processes so that we can opti-

mise costs in key areas. Our corporate culture encourages

us to scrutinise various areas of responsibility in our pro-

cesses and enables us to use resources sustainably.

Our business model

Hapimag’s business model is based on the concept of

sharing & caring. The resorts and the associated infrastruc-

ture are financed collectively by many people, and they

can use the resorts for their individual holidays. Hapimag

shares are the “key” to the Hapimag holiday world. They

entitle shareholders to use all the Hapimag resorts. Hapimag

shares are not traded on a stock exch ange and do not pay

out dividends; rather, they are purely holiday shares that

are credited a set number of residence points each year.

The number of residence points required for a holiday

apartment depends on the resort and the season. Local

charges also apply. These charges cover the operating

costs, specific services offered by the resorts as well as the

local taxes. The annual subscription charges paid by share-

holders and members cover the main costs of operating

and administering the resorts and the group head office

as well as renovations. Each shareholder is entitled to vote

at the Annual General Meeting.

We have been fortunate to experience a lot of wonderful Hapimag moments. The location of the resorts is also very good, and the courtesy and organisation from the employees were faultless. Francesco Nicolais and Carmelina Orfeo,

guests at Hapimag Resort Albufeira

“

”

18

BUSINESS PERFORMANCEReview of 2018: Results, events and activities for shareholders and members – from the resorts, the company and individual areas.

Shareholders and members

Hapimag thanked its existing shareholders and members

for their trust through various promotions and measures.

They were able to go on a points-free holiday at a different

Hapimag resort each week. These points-free weeks

were very popular. In many locations, only a few apartments

were still unoccupied. In addition, a spring and autumn

promotion was held for new and subsequent purchases

where members purchasing one share benefited from

additional residence points. 903 shares were sold in this

way. Until the end of September, it was possible to com-

plete the genera tional change at particularly favourable

conditions. However, expectations were not met, as

the number of shares that were transferred within families

was 1546 (previous year: 3866).

We have come closer to our goal of improving communi-

cation with the existing shareholders and members. Our

culture of discussion has improved perceptibly since the

introduction of the CEO Blog in May 2017. So far, 13 blog

entries have been published. The suggestions and ideas

submitted by shareholders and members have been

incorporated directly in our work. Lively and constructive

debates help us improve Hapimag continually. At the

end of the year, the CEO Blog had around 21 000 readers.

Information, share holder and member events at selected

locations offered another opportunity for face-to-face

discussion. In line with the principles of sustainability, cost

optimisation and modern communication, 9365 additi-

onal shareholders and members switched to electronic

mailing.

Since the beginning of 2018, Hapimag has been reorga-

nizing many processes and services. The booking situation

has significantly improved for the vast majority of our

shareholders and members as a result. Because the book-

ing period has been extended and is now up to 18 months,

beach resorts that were very quickly booked out in the

past, have more and longer capacity. Moreover, less

accommodation was blocked and availability increased

because reservations are now only possible if enough

points are on the account.

In 2018, the Hapimag Member Service in Steinhausen

received 185 146 calls and answered around 77 500

e-mail requests. There were 165 026 apartment reservations,

with the most made online (58,2 %), while 41,8 % were in

writing, by phone or made directly at the resorts. In 2018,

a total of 5328 product transfers were made (previous

year: 7379). We also simplified the work steps for proces-

sing transfers. As part of the drive to optimise service

offerings for all shareholders and members, the Dutch

Service Point in Waardenburg was integrated into the

Service Point Central in Steinhausen. The Service Points

in Milan (IT) and Bodrum (TR) will remain unchanged.

For the new customer business, the focus was on develo-

ping a new sales strategy centred on the core product,

as well as optimising the new customers and selling pro-

cess. Moreover, a sales team was newly established, direct

marketing gradually phased out and external Consul-

tants are no longer used. All told, 1324 shares were sold

(previous year: 1628), of which 419 to new customers.

The number of sales to new customers tripled when com-

pared to the previous year.

Management report

19

Resorts

At 72,4 %, the occupancy rate at the resorts (previous year:

71,8 %) was above the level of the previous year. The

resorts Athens, Damnoni, Interlaken, Marrakech and Paris,

in particular, recorded the biggest increase in occupancy

rates. The number of guests at the resorts rose to 414 916

(previous year: 382 153), equivalent to a growth rate of

8,6 %. Travel flexibility is an important factor: more and

more share holders and members opted to book by the

day, which has an impact on the number of guests.

Alps: The Hapimag Alpine resorts posted an occupancy

rate of 69,9 % (previous year: 68,7 %), making them very

popular. The highest occupancy rates were the resorts in

Zell am See and Interlaken, with rates of 86,7 % and 75,8 %,

respectively. The resorts Interlaken and Flims saw the

biggest increase in occupancy, up 9 % and 7 %, respecti-

vely, versus the previous year. The Swiss resorts once

again increased their occupancy to 75,5 % (+ 3,7 %). The

resort Sonnleitn in the “Alps” cluster posted the lowest

occupancy with 54,4 %, although an encouraging increase

was recorded after the renovation.

Nature & Relaxation, Country: The Hapimag Resort

Marrakech once again recorded substantially more book-

ings (60,6 %, +21 %). The highest occupancy rate was

recorded by the resort Merano at 89,9 % (previous year:

90,1 %). The resort Punkaharju had the lowest occupancy

rate at 39,6 % (previous year: 41,3 %).

Nature & Relaxation, Sea: The Marbella (91,1 %) and

La Madrague (87,9 %) resorts recorded the best occupancy

figures in this category. The resort Mas Nou had the

lowest occupancy rate at 50,2 % (previous year: 56,4 %).

Sun & Sea: After a challenging last few years, the resort

Bodrum posted another increase in occupancy. At 32,9 %

(previous year: 31,0 %), it is still one of the least popular

resorts in the Sun & Sea category. At 88,4 % each, the resort

Binz and the newly opened resort in Cavallino proved

to be the most popular destinations in the “Sun & Sea”

category. The resort Damnoni posted the biggest increase

in occupancy (+ 6 %), which rose to 82,2 %.

Cities: City resorts continue to enjoy widespread popula-

rity, with average occupancy very high at 81,2 % (previous

year: 79,1 %). The top three resorts in terms of occupancy

were Berlin Gendarmenmarkt (93,2 %), Vienna (92,9 %)

and Lisbon (91,7 %). The resort Athens posted an increase

of 22 % to 76,6 %, and the resort Paris increased 7 % to

86,7 % versus the previous year. At 55,4 % (previous year:

59,5 %), Prague had the lowest occupancy in the city

resorts category. The resort London remained closed for

renovation.

The offer of services in the resorts was further expanded.

A uniform arrival e-mail service was developed for all

resorts to enable our guests to arrive even better-infor-

med. The implementation of a new child concept has

been completed. The resorts in Westerland Dünenblick,

Prague and Merano now include Honesty Shops & Bars,

and in Saalbach ski passes are now offered in the resort.

Eleven resorts were equipped with electric vehicle char-

ging points. Charging points are planned for further re-

sorts in 2019.

We can count on quality and rely on a high standard. That’s why also our children spend their holidays with Hapimag. Anette and Bernd Dittmann, guests at

Hapimag Resort Château de Chabenet

“”

20

20HolidayCheck

Awards

9HolidayCheckGold Award

1 Hapimag Resort Scerne di Pineto

2 Hapimag Resort Cavallino

21

20HolidayCheck

Awards

9HolidayCheckGold Award

Successful further training and development projects

were continued: An online training course for communi-

cation coor dinators was launched, together with a further

training programme for internal trainers. The trainers

are familiarised with various current issues, which promotes

the transfer of knowledge. On top of this, the Young

Generation Manager programme was kicked off in spring

2018, where five talents are systematically prepared for a

management position in the resorts. In addition, the resorts

Antibes, Bad Gastein, Paguera, Flims and Marbella were

recognised for their good ideas and innovations as part

of the internal “Resort Champion Awards 2018”.

Guest satisfaction remains high (84,0 %). The Hamburg

resort achieved the highest level of guest satisfaction

with 92,5 %. Moreover, 20 Hapimag resorts received an

award from the independent HolidayCheck rating platform,

nine of them were even given a Gold Award. The guest

favourites include the Hapimag resorts in Marbella,

Pentolina and Ascona.

Openings and renovations

In summer 2018, Hapimag opened a new resort, Cavallino-

Treporti, on Italy’s Adriatic coast close to Venice. After

around 22 months of construction work, 125 new holiday

apartments are now available to shareholders and mem-

bers. The resort boasts a restaurant serving local specia-

lities; there is a shop with a snack bar and ice cream parlour,

as well as open-air swimming facilities comprising a

children’s pool. A wellness area will be added in 2019.

The Porto Heli resort was reopened in May of last year fol-

lowing an extensive renovation. The renovation work was

completed earlier than planned. The renovation of the

resort London continues to pose a challenge because of

the stringent listed building regulations, on top of which

tighter fire safety regulations need to be taken into

account. In addition, there have been disagreements

with the general contractor.

In 2018, extensive maintenance work was carried out

on the façades, windows and roof of the Hapimag Resort

Amsterdam, while value-preserving investments were

made in Sonnleitn, which included modernisation of the

wellness area and the renovation of building foundations.

Further smaller renovation and maintenance work was

also carried out. Four suites were renovated at the Hapimag

Resort Edinburgh, the resort in Albufeira received a new

beach and multi-sports area, and in Bodrum the Laguna

bar was renovated. In Cefalù a new youth club was installed

at the beach, the beach area was extended and the out-

door pool terrace was completely renovated. In Scerne the

water sports offer was expanded, in Ascona the indoor

pool and air conditioning were renovated. In Tonda the

renovation of the reception was completed; in Unterkirnach

Wi-Fi was installed throughout the resort; Winterberg

received a new playground, Bad Gastein a new child play

area and relaxation room in the wellness area and St. Michael

a new shop.

Company

In 2018, our focus was once again on increasing sales and

optimising costs. We pursued these goals systematically,

which had a positive impact on the results. The changes

and improvements that were implemented at the beginning

of the year as part of the “new services” initiative had

a positive impact. The booking situation has significantly

improved for the vast majority of our shareholders and

members.

In 2018, there were 1,75 million points transferred (previous

year: 1,73 million) between shareholders and members,

slightly up from last year. Most of these involved direct

transfers – from shareholders and members to other

shareholders and members – with 46 % of points trans-

fers made via the Points Kiosk at an average price of

EUR 3,46. The number of expiry points remained un-

changed at 2,3 million when compared with the previous

year. Hapimag took various measures in 2018 to keep

the number of expiry points to a minimum. For example,

shareholders and members are regularly informed on

various channels about when their points are due to ex-

pire. Telephone contact with the Service Points proved

1 Hapimag Resort Scerne di Pineto

2 Hapimag Resort Cavallino

22

to be effective for short-notice reservations. The number

of share buy-backs was 2611, lower than in the previous

year (2017: 3897).

In April 2018, employees at the Hapimag headquarter

moved to new office premises in Steinhausen. The cost

for the own office building amounted to CHF 39,5 million

(exchange rate EUR / CHF 1.127 = EUR 35,0 million).

Marketing to third parties

Hapimag markets vacant accommodation to third parties

in a targeted, controlled and limited way. The main reason

is to avoid empty beds, in line with Hapimag’s general

strategy. Prices are calculated such that residence points

and local charges are covered as a minimum. Hapimag

guarantees shareholders and members that it will keep

sufficient accommodation available for their use. The com-

pany holds a number of shares for which no residence

points have been credited, which enables Hapimag

to always fulfil this commitment to its shareholders and

members while still marketing to third parties.

Marketing to third parties has many advantages: it increa-

ses occupancy, in line with the idea of sustainability

behind the Hapimag concept. It also helps improve the

company‘s image, which helps attract new shareholders

and members. However, the main aim is to generate

valuable income, which will in turn reduce costs for share-

holders and members. It helps keep annual subscription

charges stable.

Occupancy from marketing to third parties accounted for

8,5 % in 2018 (compared with 6,9 % in the previous year)

of the total overnight stays. Not including Hotel Sea Garden

Bodrum, 78 % of third-party occupancy nights were genera-

ted in the low season (C and D season).

Marketing to third parties in 2018 generated around

EUR 2,1 million for the Hapimag Resort Bodrum, around

EUR 1,3 million for the resort Orlando, around EUR 1,1 million

for the resort Interlaken and around EUR 1,0 million for

the resort Winterberg. The total income generated through

marketing to third parties (accommodation sales, not

taking into account sales relating to gastronomy) in 2018

amounted to around EUR 7,8 million (8,3 % of total sales

for resorts). This income helps us to cover our fixed costs.

It is also a source of income that is taken into account

when deter mining local charges and the annual subscrip-

tion charges, helping to make them significantly lower

than they would otherwise be. In the interest of efficiency,

we decided to market vacant accommodation via online

booking portals in 2018. Across all resorts, sales generated

through marketing to third parties increased by around

19 %. The Hapimag Resort Interlaken, for example, continued

the previous year’s successful performance by more

than doubling sales generated through marketing to third

parties. Sales through marketing to third parties at the

Bodrum resort were increased by 7 % compared to 2017.

The confidence placed in me, helps to concentrate on my education without any worries.Pasquale Marsala, Young Generation Manager

at Hapimag Resort Cavallino

“”

23

56Restaurants and bars(+ 5)

40Shops, Honesty Shops & Bars(+ 8)

45 109Children in the resorts(+ 10,4 %)

185 146Phone calls received at the Service Points

5328Share transfers(– 27,8 %)

20 777CEO Blog readers (+ 75,6 %)

9,0 %Increase in sales at resorts

1387Employees (full time)

45 %Shareholders and members with electronic mailing (+ 6,0 %)

84,0 %Guest satisfaction (– 0,5 %)

(+ 6,4 %)

(– 16,0 %)

2018 IN FIGURES(Values in brackets = changes compared to previous year)

24

FINANCEOperating result was once again gratifying at EUR 17,9 million. Sales rose by EUR 5,1 million versus the previous year. Hapimag carried out a total of EUR 22,4 million in renovations on its properties in 2018.

The 2018 consolidated financial statement of Hapimag

shows a consolidated result of EUR 14,9 million (previous

year: EUR 11,1 million). Operating result rose from

EUR 12,9 million to EUR 17,9 million. At EUR 184,8 million,

Hapimag’s operating income was up EUR 8,2 million com-

pared to the previous year (EUR 176,6 million). This in-

crease is primarily due to the rise in sales and occupancy

in the resorts division and higher income from exercised

rights of residence. Operating expenses excluding the

cost of sales and services rose by EUR 1,1 million to EUR

145,0 million (previous year: EUR 143,9 million; up 0,8 %).

In Member Services, the services were further optimised

over the past few months. Most enquiries are received

over the telephone or online. As a result, and due to the

decline in demand for local assistance, from January 2019

the Dutch Service Point in Waardenburg is integrated

into the Service Point Central in Steinhausen. This decision

will bring further sustained savings in personnel and infra-

structure costs with out reducing the existing quality

of services and advice. The services of the Service Points

in Düsseldorf and Wiesbaden were already moved to

the head office in 2017. This has created synergies with

the existing Service Point Central Region on a sustained

basis.

The Resorts division contributed to a good operating

performance. In total, sales at the resorts rose by 9,0 %

versus the previous year to EUR 94,2 million. The most

notable increases were achieved by the resorts Bodrum,

Cannero, Damnoni, Interlaken, La Madrague and Sonnleitn.

Although the resort London was not available due to

renovation work, the resorts increased the number of

guests by a total of 32 763 to 414 916 guests (previous year:

382 153; up 8,6 %). In total, the number of overnight stays

also rose to 2 817 253 (previous year: 2 688 525). These

increases are also attributable to the new resort in Cavallino

and the Porto Heli resort, which has been reopened fol-

lowing renovation. The average length of stay decreased

to 6,79 days (previous year: 7,04 days), reflecting the trend

for more frequent, shorter trips. In 2018, operating result

in the Resorts division increased to EUR 10,4 million (pre-

vious year: EUR 9,4 million).

The number of Hapimag shareholders fell by 1079 to

106 736 as a result of the continuation of the buy-back pro-

gramme, which has enabled shareholders in recent years

to convert their shares into traditi onal points products.

Shareholders who took advantage of this option are still

Hapimag members. The number of shareholders and mem-

bers declined from 128 539 to 125 558.

Management report

The resort is very cosy and com-fortable. We are impressed.Family Haque, guests at Hapimag Resort Lisbon

“ ”

25

In implementing the strategic goal of focusing on the

core business, personnel expenses at the headquarters

were further reduced (by 3,6 % to EUR 18,8 million).

In 2018, investments amounted to EUR 56,5 million (pre-

vious year: EUR 62,2 million). These mainly comprised

expenditure on renovating the resorts London and Porto

Heli – as described under “Openings and renovations” –

as well as on the two new buildings in Cavallino and the

administration building in Steinhausen.

Hapimag carried out a total of EUR 22,4 million worth

of renovations on its properties in 2018 (previous year:

EUR 25,6 million). EUR 6,2 million was spent on main-

tenance and repair work at the resorts (previous year:

EUR 6,0 million). Depreciation and amortisation amoun-

ted to EUR 30,9 million (previous year: EUR 31,8 mil lion),

and thereby corresponded to 44 % of annual subscription

charges.

As a result of investment activities of the new resort in

Cavallino and the new administration building in Stein-

hausen, free cash flow fell to EUR – 35,1 million (previous

year: EUR – 27,8 million), with net debt increasing to

EUR – 43,9 million (previous year: net debt EUR – 7,4 million).

The equity ratio of 46 % (previous year: 47 %) and a pro-

portion of internal operating resources of 72 % (previous

year: 73 %) continued to provide Hapimag with a solid

financial base despite the net debt. The equity-to-fixed

assets ratio stands at 76 % (previous year: 78 %).

Accounting

Hapimag is obliged by Swiss law to prepare both statutory

financial statements and consolidated financial statements

of Hapimag AG.

The consolidated financial statements of Hapimag include

balance sheet and income statement items for all Hapimag

companies. As such, the consolidated financial statem-

ents give a true and fair view of the Hapimag Group’s net

assets, financial position and results of operations. The

consolidated financial statements are prepared in accor-

dance with the recommendations on accounting (Swiss

GAAP FER).

The resorts owned by Hapimag AG itself (in Portugal,

Austria, Switzerland and Finland), their results, and the

activities of the head office are to be found in the statutory

financial statements of Hapimag AG. The other resorts

are owned indirectly through local companies. These com-

panies are recognised as investments in the statutory

financial statements of Hapimag AG. The statutory financial

statements are prepared in accordance with the Swiss

Code of Obligations.

The financial report of the consolidated financial statements

is presented on pages 26 to 57 and that of the statutory

financial statements on pages 58 to 66. The accounting

policies for the consolidated financial statements are

shown on pages 34 to 38 and for the statutory financial

statements on page 61.

26

General information 2014 2015 2016 2017 2018

Shareholders and members 134 038 132 153 129 421 128 539 125 558

Shareholders 116 801 111 221 109 291 107 815 106 736

Units in circulation (shares and other right-of-residence products):

Master sheet entries as at 31.12. 298 024 289 650 281 977 275 463 269 593

Number of shares in circulation as at 31.12 246 119 234 910 231 209 228 940 227 653

Workforce (full-time equivalent) 1 436 1 442 1 379 1 304 1 387

Net surplus/net debt (–), in EUR million 8,6 7,0 20,5 – 7,4 – 43,8

Net asset value 1) per share in circulation, in EUR *1 959 *1 957 1 976 2 007 2 052

1 The net asset value corresponds to the amount of internal operating resources divided by the number of shares in circulation.

Points information (number of points in 1000) 2014 2015 2016 2017 2018

Share points generated (60 pts. per share) 14 430 13 882 13 049 12 830 12 565

Points exercised 15 602 16 142 15 445 15 173 15 604

Points on offer 19 230 20 331 19 286 18 286 18 721

Shares expiry points 2 109 2 205 2 192 2 277 2 288

Excess cover of points on offer vs. generated share points in % 133 % 146 % 148 % 143 % 149 %

Resorts 2014 2015 2016 2017 2018

Number of resorts 58 60 58 57 58

Number of accommodation units 5 677 5 748 5 392 5 330 5 448

Total occupancy over the opening time in % 71,4 % 68,7 % 68,1 % 71,8 % 72,4 %

Resort occupancy Sun and Sea 70,7 % 68,5 % 66,8 % 68,4 % 69,1 %

Resort occupancy Nature and Relaxation 74,3 % 70,9 % 70,4 % 75,5 % 74,8 %

Resort occupancy Alps 63,2 % 58,8 % 60,0 % 68,7 % 69,9 %

Resort occupancy Cities 80,5 % 78,3 % 76,8 % 79,1 % 81,2 %

Number of guests 369 733 364 961 373 200 382 153 414 916

Number of overnight stays 2 860 902 2 788 487 2 706 130 2 688 525 2 817 253

Resort sales in EUR 1000 84 719 86 308 84 311 86 412 94 219

of which marketing to third parties in EUR 1000 6 844 7 503 6 033 6 601 7 842

Member Services 2014 2015 2016 2017 2018

Number of shares transferred 5 407 5 182 4 634 7 379 5 328

Points exchanged in the kiosk 671 828 768 529 780 096 776 805 797 843

Points exchanged outside the kiosk 863 431 860 957 903 932 953 876 951 883

Key income statement figures (in EUR 1000) * 2014 * 2015 2016 2017 2018

Sales 175 732 179 863 163 759 161 036 166 156

Operating income 186 373 193 432 188 774 176 614 184 812

Operating costs without depreciation / amortisation 160 059 152 482 145 847 131 935 136 048

Earnings before depreciation / amortisation, financial result and tax 26 314 40 950 42 927 44 679 48 764

Operating result – 11 377 4 342 8 460 12 862 17 891

Consolidated result – 12 305 2 986 297 11 128 14 924

* Since 2017, the consolidated financial statements have been prepared in accordance with Swiss GAAP FER. The data for the year 2016 was also adjusted

to the new accounting method. The data for the years 2014 and 2015 was not adjusted, however, and is still expressed under the IFRS accounting method.

HAPIMAG KEY FIGURES

27

Key balance sheet figures (in EUR 1000) *2014 *2015 2016 2017 2018

Total assets 636 848 663 130 627 008 632 055 646 982

Non-current assets 588 322 593 105 574 814 589 229 613 441

Equity and internal operating resources (in EUR 1000)

Equity as per balance sheet 317 577 287 141 281 611 296 492 300 257

Call options (see Note 20) 8 927 9 426 14 265 17 765 17 979

Loans from shareholders 153 300 161 210 159 364 144 055 147 886

Investment subsidies 2 452 1 982 1 546 1 140 1 103

Internal operating resources 482 256 459 759 456 786 459 452 467 225

Hapimag has acquired a call option from shareholders since the 2014 financial year. This call option represents an equity instrument and is recognised as a deduction

in equity. When calculating internal operating resources, this item is added to equity since the shares remain in circulation until such point in time as the call option

has been exercised.

Investment coverInternal operating resources / Non-current assets 82 % 78 % 79 % 78 % 76 %

Level of equity capitalisationInternal operating resources / Total assets 76 % 69 % 73 % 73 % 72 %

Capital expenditure (in EUR 1000)

New real estate 5 062 29 126 6 591 36 338 33 572

Renovation of real estate 21 335 17 655 12 510 25 584 22 369

Furniture and office equipment 1 891 1 183 1 656 294 512

Total capital expenditure 28 288 47 964 20 757 62 216 56 453

Cash flow (in EUR 1000)

Cash inflows from operating activities 19 069 35 632 32 485 36 726 23 459

Cash outflows from investment activities – 27 823 – 27 571 – 12 642 – 61 083 – 56 364

Cash flows from the sale and repurchase of shares – 3 017 – 10 090 – 6 281 – 3 491 – 2 163

Free cash flow – 11 771 – 2 029 13 562 – 27 848 – 35 068

Cash flows from financing activities (without shares) 7 745 9 918 – 9 177 18 010 24 565

Currency translation adjustments on cash and cash equivalents 358 1 208 – 13 – 1 746 144

Increase / decrease (–) in cash and cash equivalents – 3 668 9 097 4 372 – 11 584 – 10 359

Liquidity (in EUR 1000)

Cash and cash equivalents 16 382 25 479 29 851 18 267 7 908

Financial liabilities – 7 816 – 18 490 – 9 302 – 25 704 – 51 830

Net surplus / debt (–) 8 566 6 989 20 549 – 7 437 – 43 922

* Since 2017, the consolidated financial statements have been prepared in accordance with Swiss GAAP FER. The data for the year 2016 was also adjusted

to the new accounting method. The data for the years 2014 and 2015 was not adjusted, however, and is still expressed under the IFRS accounting method.

28

Alps

Number of accommodation

units *Quality * *

(in %)

Occupancy on opening times

(in %)

Number of overnight

stays * * *

Andeer 15 88,3 69,0 6 374

Bad Gastein 154 86,8 62,6 84 099

Flims 120 87,7 72,5 64 168

Interlaken 105 85,8 75,8 70 296

Saalbach 21 89,5 67,7 10 898

Sonnleitn 112 83,6 54,4 47 525

St. Michael 110 87,6 73,7 75 531

Zell am See 64 90,0 86,7 50 077

Nature & Relaxation, CountryAscona 68 88,0 80,7 39 124

Bowness-on-Windermere 46 84,8 77,2 37 127

Braunlage 124 85,1 65,9 74 158

Cannero 134 83,0 90,4 76 191

Château de Chabenet 23 83,1 62,1 6 804

Marrakech 40 84,1 60,6 13 752

Mas Nou 190 79,6 50,2 73 099

Merano 36 84,3 89,9 23 557

Pentolina 139 88,3 83,1 74 659

Punkaharju 39 89,4 39,6 12 548

Tonda 65 85,9 85,5 32 503

Unterkirnach 81 78,7 66,6 46 837

Winterberg 189 81,6 66,1 120 362

Nature & Relaxation, SeaAntibes 93 78,3 83,5 62 101

La Madrague 88 83,7 87,9 51 004

Marbella 168 81,2 91,1 126 514

Orlando 100 87,6 60,0 67 448

Porto Heli 87 85,5 83,6 36 926

Puerto de la Cruz 37 71,9 66,9 18 150

San Agustin 62 77,7 87,0 41 804

HAPIMAG RESORT KEY FIGURES

29

Sun & Sea

Number of accommodation

units *Quality * *

(in %)

Occupancy on opening times

(in %)

Number of overnight

stays * * *

Albufeira 211 81,2 86,8 162 219

Binz 186 85,9 88,4 127 001

Bodrum 636 80,8 32,9 138 401

Cavallino 125 81,9 88,4 25 566

Cefalù 136 80,6 78,7 69 236

Damnoni 199 86,2 82,2 109 772

Hörnum 121 83,2 87,8 92 226

Paguera 235 77,2 78,8 174 162

Scerne di Pineto 150 83,5 78,8 67 998

Westerland 96 78,4 88,0 67 917

CitiesAmsterdam 26 85,1 91,4 18 374

Athens 16 88,4 76,6 9 981

Berlin Gendarmenmarkt 28 84,9 93,2 22 441

Berlin Zoo 34 85,6 90,5 22 072

Budapest 30 84,4 59,6 15 365

Dresden 38 90,8 77,2 21 435

Edinburgh 29 89,5 81,7 18 360

Hamburg 40 92,0 89,5 29 063

Lisbon 27 89,0 91,7 20 539

London 45 – – –

Munich 57 80,7 78,4 35 319

Paris 70 79,8 86,7 51 483

Prague 48 85,0 55,4 19 906

Salzburg 28 91,3 81,8 16 572

Vienna 34 85,0 92,9 24 942

Houseboat home portsAlsace 7 93,4 68,0 4 107

Midi 8 87,3 64,9 4 565

Müritz 8 87,7 73,5 4 595

Total in all resorts 5 178 84,0 72,4 2 817 253

* Number of accommodation units available to shareholder and members

* * According to questionnaire being sent to shareholders and members after each stay

* * * Number of overnight stays: number of guests × number of nights

30

Assetsin EUR 1000 Notes 2017 2018

Cash and cash equivalents 1 18 267 7 908

Trade receivables 2 13 096 13 498

Other current receivables 3 8 074 8 785

Inventories 4 1 524 1 615

Prepaid expenses and accrued income 5 1 865 1 735

Current assets 42 826 33 541

Property, plant and equipment 6 587 699 612 249

Intangible assets 7 1 141 802

Financial assets 8 389 390

Non-current assets 589 229 613 441

Total assets 632 055 646 982

Equity and liabilitiesFinancial liabilities 9 8 588 26 760

Liabilities from rights of residence 10 24 560 24 845

Trade payables 11 19 600 13 238

Other current liabilities 12 1 423 1 112

Accrued expenses and deferred income 13 24 139 19 565

Provisions 14 1 703 1 667

Current liabilities 80 013 87 187

Financial liabilities 9 17 116 25 070

Loans from shareholders 15 144 055 147 886

Liabilities from rights of residence 10 49 309 45 232

Other non-current liabilities 16 15 235 12 832

Deferred tax liabilities 17 10 624 11 177

Provisions 14 / 18 19 211 17 341

Non-current liabilities 255 550 259 538

Liabilities 335 563 346 725

Share capital 19 22 956 22 956

Capital reserves 20 373 528 375 245

Own shares 21 – 16 917 – 19 359

Other reserves 20 – 74 683 – 85 117

Retained earnings – 8 392 6 532

Equity attributable to Hapimag shareholders 296 492 300 257

Total equity and liabilities 632 055 646 982

CONSOLIDATED FINANCIAL STATEMENTS OF HAPIMAG AG AS AT 31.12.2018

Consolidated balance sheet

31

in EUR 1000 Notes 2017 2018

Sales 22 – 26 161 036 166 156

Income from exercised rights of residence 10 12 587 15 367

Other operating income 27 2 991 3 289

Operating income 176 614 184 812

Cost of sales and services 28 – 19 810 – 21 873

Personnel expenses 29 – 58 343 – 59 051

Depreciation of property, plant and equipment 6 – 30 610 – 30 253

Amortisation of intangible assets 7 – 1 207 – 620

Maintenance and operating expenses 30 – 26 952 – 28 321

Marketing and selling expenses 31 – 1 655 – 1 073

Administrative expenses 32 – 14 595 – 16 227

Other operating expenses 33 – 10 580 – 9 503

Operating result 12 862 17 891

Financial income 34 680 308

Financial expenses 34 – 983 – 1 665

Result before tax 12 559 16 534

Income taxes 35 – 1 431 – 1 610

Consolidated result attributable to Hapimag shareholders 11 128 14 924

Consolidated income statement

32

Balance as at 1.1.2017 22 956 370 159 – 12 742 – 79 242 – 19 520 281 611

Consolidated result 11 128 11 128

Currency translation

adjustments 20 8 059 8 059

Share sales 21/ 22 3 010 3 010

Reclassifications 21 – 123 123 0

Shares repurchased 21/ 22 – 7 308 – 7 308

Purchase of call options 20 – 3 500 – 3 500

Repurchase of loans from

shareholders 20 3 492 3 492

Balance as at 31.12.2017 22 956 373 528 – 16 917 – 74 683 – 8 392 296 492



adjustments 20 – 10 220 – 10 220

Share sales 21/ 22 2 233 2 233

Reclassifications 21 – 177 177 0

Shares repurchased 21/ 22 – 4 852 – 4 852

Purchase of call options 20 – 214 – 214

Repurchase of loans

from shareholders 20 1 894 1 894

Balance as at 31.12.2018 22 956 375 245 – 19 359 – 85 117 6 532 300 257

An overwhelming portion of the Hapimag Group’s sales is generated with shareholders. Prices of services in Hapimag’s core business are based

on the principle of covering prime costs. The company has no plans to distribute reserves.

Sales of shares are converted using average annual exchange rates (see Note 22). Deviations from historical rates for sold shares are taken into account

under “Reclassifications”.

in EUR 1000 Notes Share capital Capital reserves Own shares Other

reservesRetainedearnings

Equity attributable to Hapimag

shareholders

CONSOLIDATED FINANCIAL STATEMENTS OF HAPIMAG AG AS AT 31.12.2018

Changes in consolidated equity

33

in EUR 1000 Notes 2017 2018

Operating activities


Income taxes 35 1 431 1 610

Depreciation and amortisation 6 /7 31 817 30 873

Profit (–) /loss on disposal of property, plant & equipment, net 27/ 33 441 572

Income from exercised rights of residence 10 – 12 587 – 15 367

Financial income 34 – 680 – 308

Financial expenses 34 983 1 665

Other non-cash items – 939 261

Change in receivables and prepayments and accrued income – 5 249 – 637

Change in inventories 46 – 235

Change in liabilities and accrued expenses and deferred income 10 396 – 8 673

Interest received 30 164

Interest paid – 203 – 446

Income taxes paid (–) / received 112 – 944

Cash inflows from operating activities 36 726 23 459

Investment activities

Acquisition of property, plant & equipment 6 – 62 033 – 56 191

Acquisition of intangible assets 7 – 183 – 262

Proceeds from sale of property, plant and equipment 1 133 89

Cash outflows from investment activities – 61 083 – 56 364

Financing activities

Share sales 3 010 2 233

Shares repurchased minus accrued amortisation charges collected – 6 501 – 4 396

Proceeds from bank borrowings 18 010 33 221

Repayment of liabilities to banks 0 – 8 656

Cash outflows from financing activities 14 519 22 402

Currency translation adjustments on cash and cash equivalents – 1 746 144

Decrease in cash and cash equivalents – 11 584 – 10 359

Cash and cash equivalents at beginning of year 1 29 851 18 267

Cash and cash equivalents at year-end 1 18 267 7 908

Consolidated cash flow statement

34

Reporting company

The consolidated financial statements include Hapimag AG,

Steinhausen as the parent company and the subsidiaries where

the parent company controls the investee (collectively referred

to as “the Group” or “Hapimag”, individually as “Group com-

panies”). There are no holdings in which the stake is less than

100 %. The companies included in the consolidated statements

are listed on page 54.

Declaration of conformity

The consolidated financial statements of Hapimag AG have

been prepared in accordance with the recommendations

on accounting (Swiss GAAP FER) and give a true and fair view

of the net assets, financial position and results of operations.

The consolidated financial statements were approved by the

Board of Directors of Hapimag AG on 5 March 2019. They

are also subject to approval by the Annual General Meeting

on 26 April 2019.

Consolidation principles

100 % of assets and liabilities, income and expense are recog-

nised in accordance with the full consolidation method. Inter-

company transactions (receivables and liabilities, income and

expenditures) are eliminated. Unrealised gains on intercom-

pany transactions and balances are eliminated through profit

or loss.

Capital consolidation is done in accordance with the acquisi-

tion method. The acquisition cost of an acquired company

is offset against its net assets measured at fair value at the

acquisition date.

Consolidation is based on the individual financial statements

of the Group companies which are prepared in accordance

with uniform accounting principles. The accounting principles

are consistently applied. The standard effective date is

31 December. The consolidated financial statements have

been prepared, apart from derivative financial instruments,

according to the cost method.

The consolidated financial statements are presented in euro

(EUR), rounded to the thousand. The functional currency of

the parent company Hapimag AG is the Swiss franc. The reason

for choosing the euro as the presentation currency is the

international orientation of the Group and the fact that EUR

is already the functional currency of most Group companies.


Foreign currency transactions

The local currency is considered the functional currency of all

Group companies. Transactions in foreign currencies are con-

verted into the functional currency at the spot rate applicable

on the date the transaction was processed. Cash assets and

liabilities denominated in a foreign currency held on 31 Decem-

ber are converted into the functional currency at the exchange

rate valid on the balance sheet date. Differences arising from

translation on the balance sheet date are recognised in profit

or loss and shown in the financial result.

Translation in the financial statements to be consolidated

The financial statements to be consolidated in foreign currencies

will be translated to the presentation currency EUR. The trans-

lation is done in accordance with the balance sheet date method.

Assets and liabilities are translated at the exchange rate valid

on the balance sheet date. Equity is kept at historical rates.

Earnings and expenditures are converted at the average exch-

ange rates for the period concerned. Translation differences as

well as the foreign currency effects on long-term equity-

like Group loans are recognised in equity and are presented

as currency translation adjustments under Other reserves in

equity. The cumulative currency translation adjustments arising

from the translation of financial statements and Group loans

are recognised in profit or loss when a subsidiary is sold.

Presentation in the consolidated cash flow statement

The consolidated cash flow statement is presented according

to the indirect method. The change in the liability arising

from rights of residence is allocated as cash flow to “Cash

flows from operating activities”. The amounts recorded directly

in shareholders’ equity from sales and repurchase of own

shares, on the other hand, are presented as financing activities.

NOTES TO THE 2018 CONSOLIDATED FINANCIAL STATEMENTS OF HAPIMAG AG

1. Consolidated accounting policies

35

Business model and revenue recognition

Hapimag builds and operates its own resorts, which are pri-

marily made available to Hapimag shareholders and members.

Hapimag sells equity and non-equity right-of-residence pro-

ducts (referred to as other right-of-residence products). A per-

son becomes a member by acquiring a right-of-residence

product, and becomes a shareholder by acquiring a share.

Members are credited right-of-residence products once or on a

recurring basis per right-of-residence product. Members are

entitled to book and use accommodations in Hapimag resorts

that are available in exchange for residence points. Hapimag is

obliged to provide the necessary accommodation for all rights

of residence.

The legal relationship between Hapimag and its shareholders

is defined both by its Articles of Association and by the General

Terms and Conditions for acquiring shares. Separate General

Terms and Conditions apply to all other right-of-residence

products.

A) Sales of right-of-residence products

Sales of shares including rights of residence

Only shares that were bought back (so-called depot shares)

are sold (see Own shares). Depot shares that are resold are

reported in the income statement as revenue from the sale

of shares, provided that the proceeds exceed the value under

“Own shares” (corresponds to the buy-back price).

Shareholders are credited with 60 residence points per share

each year, which are not reported on the balance sheet.

Shareholders are contractually obligated to provide the fi-

nancial means, in the form of annual subscription charges, for

managing and maintaining the accommodations they finance.

Thus there are no liabilities for Hapimag to be recognised.

Sale of other right-of-residence products

The selling price of other residence right-of-residence products

includes the components of amortisation of accommodation,

the prepaid operational cost amounts of the annual subscription

charge and sales of other right-of-residence products. For

invoices for the sales of other right-of-residence products, the

three components are booked as follows:

The amortisation part is booked in liabilities from rights of

residence (current and non-current liabilities) and the prepaid

operational costs part of the subscription charge is booked

under liabilities (accrued expenses and deferred income and

other non-current liabilities). Sale proceeds exceeding that

amount are recognised in the income statement as revenue

from the sale of other right-of-residence products.

When rights of residence are claimed, there is a reduction in

both liabilities arising from rights of residence as well as accrued

expenses and deferred income (number of points times the

amount per point entered as a liability). The reduction in liabili-

ties arising from rights of residence is credited to income

from exercised rights of residence and the reduction in accrued

expenses and deferred income is credited as sales generated

by annual subscription charges.

B) Annual subscription charges

The annual subscription charges of shares and other right-of-

residence products are invoiced at the start of the calendar

year and entered as sales, provided that the charges are not

included in the product price. The first annual charge for the

purchase year is entered as a sale at the time the share is sold.

C) Resort sales

Resort sales basically include the income from local charges

and services as well as net sales from the sale of goods. These

sales are booked in the period in which the services or supplies

were provided.

D) Cancellation of right-of-residence contract

With the purchase of an equity product from July 2007 onwards,

the shareholder also receives the right to cancel the contract

after a certain term. The minimum term is seven years in most

cases. The precise cancellation deadlines are set down in the

individual contract documents. From the point in time at which

the cancellation enters into force, the shareholder will not be

sent any further invoices for annual subscription charges and

no further residence points will be credited to the member’s

account. These rights were also offered to other shareholders

who acquired the shares prior to July 2007.

36

E) Share repurchase

In connection with the sale of shares until 30 June 2007,

Hapimag will repurchase shares offered by shareholders for

repurchase (including right of residence) in the amount of

10 % of the shares sold to new shareholders. The repurchase

price contains a repurchase discount.

According to the General Terms and Conditions of the Hapimag

Share 21 (sold between 1 July 2007 and 31 August 2012), these

shares may be bought back in an amount no greater than the

amount of shares sold in the calendar year. This repurchase

obligation includes the previously mentioned share buy-backs.

As of the balance sheet date, all repurchase obligations had

been fulfilled and there existed no open obligations to redeem

other shares.

Hapimag is not subject to a repurchase obligation for the equity

products sold as of September 2012 and can instead exercise

its discretion freely when deciding to repurchase shares. The

repurchase price for these equity products is the net asset

value. This value is determined by dividing the amount of inter-

nal operating resources (= shareholders’ equity, loans from

shareholders and investment subsidies) according to the Hapimag

consolidated balance sheet by the number of Hapimag shares

in circulation at the end of the year. The balance sheet of the

financial year before the payment is decisive.

F) Exchange of shares

Since 2014, shareholders have been offered options for ad-

justing or terminating their membership. Shares exchanged

and taken back within the scope of these offerings are recog-

nised in a manner similar to the repurchase of shares.

G) Redemption of residence points under the Hapimag

Reward Program and other residence points

All Hapimag members and shareholders participate in the

Hapimag Reward Program. Under the Reward Program, a

member’s turnover with Hapimag is converted into Rewards

using a defined set of factors and credited to the respective

member. Rewards are also credited for all successful member

referrals. The Rewards collected during a calendar year could

be redeemed within the specified period at any time until the

end of June 2018 in residence points or in early booking-levels

and -options (only until the end of March 2018). In addition,

at the beginning of April 2018 all early booking-levels and

-options as well as at the end of June 2018, all Rewards from

the current year that had not yet been redeemed were con-

verted into residence points. As of July 2018, the collected

Rewards were automatically converted into residence points.

For 10 Rewards three high- or six low- season points were

credited in 2018. Other residence points include point vouchers

as referral bonuses, member compensations and points granted

to employees. The issuing of these residence points is recog-

nised in the income statement and booked under “Liabilities

from rights of residence.” If rights-of-residence are utilised,

the liability is released as income.

Cash and cash equivalents

Cash and cash equivalents consist of cash and bank balances

as well as short-notice fixed term deposits with maturities of

up to 90 days, calculated from the date of acquisition.

Derivative financial instruments

Derivative financial instruments are booked at market value

on the date of acquisition, less transaction costs. Unrealised

profits and losses from the fair value measurement of these

instruments are recognised in the income statement in the

financial result.

Trade receivables and other current receivables

Trade receivables and other current receivables are recorded

at nominal values minus value corrections for credit risk. Groups

of receivables with a similar risk profile, where there are indica-

tions that the outstanding amount will not be received in full, are

subject to a general value correction. The general value correc-

tion is based on experience and on the assumption that the

longer a receivable is outstanding, the greater the credit risk is.

Inventories

Inventories consist primarily of goods that are required for the

operation of the resorts or are sold in them. They are valued

at their acquisition cost or, if lower, their net realisable value. The

acquisition cost is equivalent to the average acquisition cost.


37

Property, plant and equipment

Property, plant & equipment are stated at acquisition or produc-

tion cost less accumulated depreciation and impairment losses.

Parts of buildings with different useful lives are recognised se-

parately. Property, plant & equipment or their separately recog-

nised components are depreciated on a straight line basis over

their estimated useful life:

Building shells 40 – 60 years

Internal and external building installations 15 – 30 years

Technical installations 10 – 15 years

Other equipment and furnishings 4 – 12,5 years

Houseboats including fixtures 12,5 years

IT systems, vehicles 4 – 5 years

Land is not depreciated, with the exception of impairment

losses. Expenditure on the replacement of separate compo-

nents of buildings is capitalised. Other investments are only

capitalised if they increase the future economic benefit of

the asset. Assets under construction are assets that are not

yet complete or not yet ready for use. They are capitalised

but not depreciated, though they undergo an impairment test

if there are indications that this is required. Financing costs

for qualifying assets are capitalised.

The following are not capitalised: all maintenance and repair

work additional to the renovation cycle, the direct costs

of Hapimag staff and start-up costs. These are recognised

in the income statement as operating expenses.

The acquisition of property, plant & equipment by leasing

is insignificant. All leased items are classified as “operating

leases” and thus are not capitalised in the balance sheet.

Intangible assets

Intangible assets are recognised in the balance sheet at acquisi-

tion or production cost less amortisation and impairment losses

and are amortised over their expected useful lives as follows:

Software 4 – 5 years

Licenses and rights of use Term of contract

Impairment losses

The book value of all assets, excluding inventories, is reviewed

on the balance sheet date to identify any signs of possible

impairment loss. If so, the attainable amount is calculated. The

recoverable amount is the higher of the value in use and the

net market value less disposal costs. The value of an asset is

impaired if its book amount exceeds the recoverable amount.

The book value is reduced to the recoverable amount if this

is the case. The impairment is recognised in profit or loss.

Financial liabilities

Financial liabilities are recognised at nominal values. Liabilities

to banks are recognised as current liabilities, provided they are

due within 12 months.

Loans from shareholders

Until 28 February 2000, when a share was sold, part of the

investment requirement (CHF 1100) was recognised as a liability

in “Loans from shareholders”. The loan was non-redeemable,

non-interest-bearing and included in the General Terms of

Membership. In the case of a repurchase of shares with loans,

the loan originally recognised as a liability is transferred to equi-

ty (capital reserves). This accounts for the continuous decrease

of loans from shareholders from the perspective of the nominal

currency (CHF).

Liabilities from rights of residence

These liabilities arise from the sale of other right-of-residence

products (see Section A) and the credit of residence points in

connection with the Reward Program as well as other residence

points (see Section G). For the rights of residence exercised

in the reporting year, there is a release to the income statement

of these liabilities under the position “Income from exercised

rights of residence” (see notes on revenue recognition).

Investment subsidies

Hapimag’s activities in some countries entitle it to investment

subsidies. These are presented upon receipt in “Other liabili-

ties”, and – if the fulfilment of all associated conditions is con-

sidered probable – recognised on a straight-line basis over the

investment’s useful life as “Other operating income”.

38

Income taxes

Income taxes include current and deferred taxes for the period.

These are calculated at current or actually expected national

tax rates. Current income tax includes expected taxes on the

results of Group companies determined in accordance with

local tax legislation, as well as supplementary tax and tax

refunds in respect of prior years. The annual accrual of deferred

taxes is based on a balance sheet-oriented view. Deferred

taxes are calculated on the temporary differences between

the balance sheet values of the tax balance sheets and those

used in the consolidated financial statements. Deferred tax

assets are recognised only in the amount of deferred income

tax liabilities.

Employee pension liabilities

There are different retirement schemes in the Group for em-

ployees in accordance with the relevant national regulations.

The actual economic effects of the employee pension plans

are assessed annually and calculated on the balance sheet date.

The employees of Hapimag AG, Steinhausen are insured

by a legally independent pension scheme (Hapimag Pension

Fund). The calculation of any surplus or shortfall is based on

the annual financial statements of the Hapimag Pension Fund

prepared in accordance with Swiss GAAP FER 26. For foreign

pension plans, the calculation of the economic obligation is

based on the country-specific recognised methods. Economic

benefits arising from a surplus in the Pension Fund are recog-

nised as assets where they are used for future expenditure on

occupational pensions by the company. Economic obliga-

tions are recognised as liabilities where the conditions for

the creation of a provision are met. Changes to the economic

benefit or obligation are recognised in the income statement

under personnel expenses in the same way as the contribu-

tions payable in the same period.

Provisions

Provisions are presented as non-current and current provisions

if Hapimag has a present obligation arising from a past event

and if it is probable that an outflow of economic benefits will

be required to settle the obligation and the amount can be

reliably estimated.

Own shares

There have not been treasury shares since 2013; as a result,

only depot shares are reported under “Own shares”. Depot

shares are shares which were bought back (see Sections E

and F). These shares are held with the purpose of reselling

them to Hapimag members. The funding portion (investment

requirement) is reported as own shares as a minus position

in equity. If the purchase price (repurchase price) exceeds the

funding portion of the share, the amount is reported as a

right of use.

The repurchase and resale of Hapimag shares are recognised

in profit or loss as explained in the notes on “Revenue recogni-

tion” (see Sections A, E and F).

Call option for the repurchase of Hapimag shares

Since the 2014 financial year, Hapimag has acquired from share-

holders a call option until 31 December of the tenth year.

This call option represents an equity instrument and is recog-

nised as a deduction in equity. Hapimag is entitled to exercise

its call option at any time at the agreed price per share. If the

call option is exercised, the shares received are reported

under “Own shares” and the agreed price per share is paid

out. Hapimag is not subject to any purchase obligation.

Estimates in the application of accounting principles

and future estimation uncertainties

The results for the period are significantly affected by the

accounting and measurement principles with regard to the

accounting of transactions connected with the purchase

and sale of Hapimag’s own shares and the sale of rights of

residence.

The resorts are subject to location risks that may affect their

attractiveness (natural disasters, political unrest, outbreak

of disease, etc.). This could result in impairment losses.


39

1. Cash and cash equivalents (in EUR 1000) 2017 2018

Cash on hand 317 281

Bank balances 17 950 7 627

Total 18 267 7 908

2. Trade receivables (in EUR 1000)

Trade receivables 19 245 19 872

Allowances – 6 149 – 6 374

Total 13 096 13 498

There are no concentrations of risk because the trade receivables relate to a multitude of members in different countries.

3. Other current receivables (in EUR 1000)

VAT receivables 6 428 7 379

Other tax receivables 898 887

Advance payments to suppliers 313 224

Receivables in respect of social security contributions 144 29

Receivables from suppliers 75 83

Other receivables 216 183

Total 8 074 8 785

Receivables from suppliers generally arise from refunds or sales rebates. There are no known concentrations of risk. There are not expected to be any significant

impairment losses on receivables.

4. Inventories (in EUR 1000)

Raw materials, supplies and goods 618 598

Finished products and goods 906 1 017

Total 1 524 1 615

5. Prepaid expenses and accrued income (in EUR 1000)

Prepaid expenses and accrued income 1 865 1 735

Total 1 865 1 735

Prepayments and accrued income only include accruals for expenditure in the following year.

2. Notes

40

At cost as at 1.1.2017 881 473 189 391 27 944 1 098 808

Additions 18 727 7 049 36 257 62 033

Transfers – 142 45 0 – 97

Disposals – 6 655 – 2 304 – 28 – 8 987

Currency translation adjustments – 22 137 – 5 495 – 1 236 – 28 868

At cost as at 31.12.2017 871 266 188 686 62 937 1 122 889

Accumulated depreciation as at 1.1.2017 383 144 143 452 0 526 596

Additions 20 132 10 478 0 30 610

Disposals – 5 340 – 2 098 0 – 7 438

Currency translation adjustments – 10 027 – 4 551 0 – 14 578


At cost as at 1.1.2018 871 266 188 686 62 937 1 122 889

Additions 47 024 9 167 0 56 191

Transfers 51 261 11 531 – 62 792 0

Disposals – 5 933 – 10 397 0 – 16 330


At cost as at 31.12.2018 959 079 197 303 387 1 156 769


Additions 20 069 10 184 0 30 253

Disposals – 5 510 – 10 159 0 – 15 669



Net carrying amounts as at 1.1.2017 498 329 45 939 27 944 572 212

Net carrying amounts as at 31.12.2017 483 357 41 405 62 937 587 699

Net carrying amounts as at 31.12.2018 560 671 51 191 387 612 249

No financing costs were capitalised during the reporting year, as was also the case in the previous year.

The disposals in the reporting year essentially relate to the resort Porto Heli (GR) due to the completed renovation and the Neuhof property, Baar.

In the previous year it essentially relates to the sale of the resort Bad Kleinkirchheim (AT).

Settlements of assets under construction and the redistribution of completed renovations on the two asset categories are taken into account under “Transfers”.

6. Property, plant and equipment (in EUR 1000)

Land and

buildings

Equipment, house-

boats, furniture and

office equipment,

vehicles

Assets under

construction

and advance

payments Total


41

7. Intangible assets (in EUR 1000) IT software

Licences and

rights of use Total

At cost as at 1.1.2017 30 115 389 30 504

Additions 178 5 183

Transfers 97 0 97

Disposals – 2 332 0 – 2 332

Currency translation adjustments – 2 304 0 – 2 304

At cost as at 31.12.2017 25 754 394 26 148

Accumulated amortisation as at 1.1.2017 28 033 257 28 290

Additions 1 185 22 1 207

Disposals – 2 307 0 – 2 307

Currency translation adjustments – 2 183 0 – 2 183


At cost as at 1.1.2018 25 754 394 26 148

Additions 262 0 262

Transfers 0 0 0

Disposals – 153 0 – 153

Currency translation adjustments 880 0 880

At cost as at 31.12.2018 26 743 394 27 137


Additions 606 14 620

Disposals – 153 0 – 153

Currency translation adjustments 861 0 861


Net carrying amounts as at 1.1.2017 2 082 132 2 214

Net carrying amounts as at 31.12.2017 1 026 115 1 141

Net carrying amounts as at 31.12.2018 701 101 802

8. Financial assets (in EUR 1000) 2017 2018

Non-current receivables from suppliers (deposits) 185 183

Restricted cash 94 92

Other non-current receivables 110 115

Total 389 390

There are no known concentrations of risk. There are not expected to be any significant impairment losses on receivables.

9. Financial liabilities (in EUR 1000)

Financial liabilities, non-current

Liabilities to banks 17 116 25 070

Financial liabilities, current

Liabilities to banks 8 588 26 760

Total 25 704 51 830

42

10. Liabilities from rights of residence (in EUR 1000) 2017 2018

Liabilities from the sale of rights of residence

Opening balance 73 123 62 919

Increase due to sale of rights of residence (see Note 22) 2 162 786

Decrease due to sale of rights of residence (see Note 22) – 8 – 6

Decrease due to exercised rights of residence – 6 727 – 7 294

Currency translation adjustments – 5 631 2 155

Closing balance 62 919 58 560

Rights of residence used in the course of the financial year are recognised as income.

Liabilities from the issue of other residence points


Increase due to residence points from the Reward Program (see Note 26) 2 374 7 183

Increase due to other residence points 1 070 1 050

Decrease due to other exercised residence points (including points from the Reward Program) – 5 860 – 8 073

Currency translation adjustments – 1 037 407


Total liabilities from rights of residence, closing balance 73 869 70 077

– of which non-current 49 309 45 232

– of which current 24 560 24 845

11. Trade payables (in EUR 1000)

Trade payables up to 1 year 19 600 13 238

Total 19 600 13 238

12. Other current liabilities (in EUR 1000)

Liabilities to members 1 423 1 112

Total 1 423 1 112

13. Accrued expenses and deferred income (in EUR 1000)

Deferred income, travel services 695 573

Deferral for prepaid portions of operating costs of annual subscription charges 11 032 10 443

Deferral for Rewards not yet redeemed for residence points 4 206 0

Other deferred income 1 001 1 774

Current income taxes 360 263

Other taxes 1 447 1 818

Social security contributions 934 1 142

Passive derivative financial instruments (forward exchange contracts) 74 38

Outstanding invoices for trade payables 4 390 3 514

Total 24 139 19 565

Income from travel services is deferred to the date of departure.


43

14. Provisions (current and non-current)

Other taxes

(without

income taxes) Other Total

Current provisions (in EUR 1000)

Balance as at 1.1.2017 432 1 492 1 924

Used – 412 – 793 – 1 205

Reversals – 1 – 5 – 6

Additions 450 703 1 153

Currency translation adjustments – 54 – 109 – 163

Balance as at 31.12.2017 415 1 288 1 703

Balance as at 1.1.2018 415 1 288 1 703

Used – 225 – 376 – 601

Reversals 0 0 0

Additions 52 600 652

Currency translation adjustments – 49 – 38 – 87

Balance as at 31.12.2018 193 1 474 1 667

The other provisions primarily concern legal disputes.

Non-current provisions (in EUR 1000)

Pension

liabilities

Personnel and

social

security

Other

taxes Other Total

Balance as at 1.1.2017 325 2 658 15 274 5 288 23 545

Used 0 – 406 – 4 103 0 – 4 509

Reversals – 10 – 218 0 0 – 228

Additions 9 691 1 507 0 2 207

Currency translation adjustments 0 – 242 – 1 129 – 433 – 1 804

Balance as at 31.12.2017 324 2 483 11 549 4 855 19 211

Balance as at 1.1.2018 324 2 483 11 549 4 855 19 211

Used 0 – 391 – 1 968 0 – 2 359

Reversals – 3 – 165 0 0 – 168

Additions 85 648 0 23 756

Currency translation adjustments 0 – 155 – 94 150 – 99

Balance as at 31.12.2018 406 2 420 9 487 5 028 17 341

See Note 18 regarding pension liabilities. Personnel and social security encompasses provisions for employee retention and statutory provisions for retirement benefits related to length

of service for employees in foreign subsidiaries. Other taxes relate to anticipated back taxes due to a change in the law and other provisions are mainly based on regulatory changes.

15. Loans from shareholders (in EUR 1000) 2017 2018

Loans in connection with the gross sale of the share product


Repurchases (see Note 20) – 3 492 – 1 894

Currency translation adjustments – 13 852 5 766


Accrued amortisation charges (annual subscription charges not payable in cash)

Opening balance – 15 844 – 13 809

Accrued amortisation charges collected 807 456

Currency translation adjustments 1 228 - 497

Closing balance – 13 809 – 13 850

Loans from shareholders (net), closing balance 144 055 147 886

Until 28 February 2000, when a share was sold, part of the investment requirement (CHF 1100) was recognised as “Loans from shareholders”. The loan was non-redeemable,

non-interest-bearing and included in the General Terms of Membership. In the case of a repurchase of shares with loans, the loan originally recognised as a liability is transfer-

red to equity (capital reserves). This accounts for the continuous decrease of loans from shareholders from the perspective of the nominal currency (CHF).

44

16. Other non-current liabilities (in EUR 1000) 2017 2018

Investment subsidies

Resort Bodrum (TR) 715 449

Resort Damnoni (GR) 267 192

Resort Porto Heli (GR) 0 319

Resort Zell am See (AT) 104 100

Other resorts 54 43

Total 1 140 1 103

Other liabilities

Prepaid portion of operating costs of annual subscription charge from other right-of-residence products 13 772 11 508

Other 323 221

Total 14 095 11 729

Total 15 235 12 832

17. Deferred tax liabilities (in EUR 1000) 2017 Assets 2017 Liabilities 2018 Assets 2018 Liabilities

Deferred tax assets and liabilities

The deferred taxes result from the following balance sheet items:

Property, plant and equipment 182 – 16 343 155 – 16 203

Intangible assets 3 – 2 11 – 3

Accrued expenses and deferred income 3 0 3 0

Non-current liabilities 0 – 205 0 – 241

Provisions 108 0 120 0

Loss carryforwards 5 630 0 4 981 0

Total 5 926 – 16 550 5 270 – 16 447

Set off of tax – 5 926 5 926 – 5 270 5 270

Deferred tax liabilities 0 – 10 624 0 – 11 177

Deferred income taxes are calculated at the current country-specific tax rates in each company. In 2018, this amounted to a weighted average rate of 21,0 %

(previous year: 19,6 %).

Hapimag has the following tax loss carryforwards that have not been capitalised:

Loss carryforward expiry 2017 2018

within one year 53 421 0

in 2 – 4 years 116 674 26 614

in 5 – 7 years 49 866 79 231

in more than 7 years 8 327 14 698

unlimited 20 662 20 698

Total 248 950 141 241

Deferred tax assets on temporary differences of TEUR 26 040 (previous year: TEUR 34 222) were not capitalised.


45

18. Pension liabilities (in EUR 1000)

Economic benefit / economic obligation and pension expenses

Surplus /

shortfall

Economic part

of Hapimag

Change to

previous

year or

recognised in

Contributions

concerning

the business

year

Pension costs

in personnel expenses

2018 2017 2018 2018 2018 2017 2018

Employer’s funds /employer-funded pension funds 0 0 0 0 0 0 0

Pension plans not including surplus/shortfall 0 0 0 0 0 0 0

Pension plans with surplus (Switzerland) 0 0 0 0 0 1 139 1 066

Pension plans with shortfall (foreign) 0 – 47 – 59 12 11 1 23

Pension plans without own assets (foreign) 0 – 277 – 347 70 0 9 70

Total 0 – 324 – 406 82 11 1 149 1 159

The pension plan with a surplus refers to the pension plan of the Hapimag Pension Fund, Steinhausen. Pension plans without own assets encompass individual

foreign subsidiaries that recognise pension liabilities directly in the balance sheet.

19. Share capitalThe share capital is that of Hapimag AG, Steinhausen and amounts to TEUR 22 956, as in the previous year. The share capital consists of 59 300 registered shares with

a nominal value of CHF 100 each and 178 700 registered shares with a nominal value of CHF 200 each. Each share confers the right to cast one vote. The shares

are not traded on the stock exchange and there is no subscription right on capital increases. Shares sold until February 2000 are inalienably associated with

a loan. In accordance with article 28 of the Articles of Association, no dividends are paid.

20. Reserves (in EUR 1000) 2017 2018

Capital reserves


Repurchase of loans (see Note 15) 3 492 1 894

Reclassification from own shares (see Note 21) – 123 – 177


The capital reserves are mainly the result of the sale of treasury shares. In the case of a repurchase of shares with loans, the loan originally recognised as a liability

is transferred to the capital reserves (see Note 15).

Other reserves

Call options


Purchase of call options – 3 500 – 214


Since the 2014 financial year, Hapimag has acquired from shareholders a call option until 31 December of the tenth year. Hapimag is entitled to exercise its call

option at any time at a price of CHF 200 per share. Hapimag is not subject to any purchase obligation. No call options were exercised in the current financial year

or the previous one.

Currency translation adjustments


Change 8 059 – 10 220


Currency translation adjustments are temporary differences as of the balance sheet date that arose, on the one hand, from the translation of the annual accounts

in a foreign currency into the presentation currency EUR and, on the other, due to the reporting date valuation of equity-like long-term Group loans. The negative

change in currency translation adjustments is largely attributable, in the current financial year, to the devaluation of the presentations currency, the euro, against

the Swiss franc.

Call options – 17 765 – 17 979

Currency translation adjustments – 56 918 – 67 138

Total other reserves – 74 683 – 85 117

46

21. Own shares (in EUR 1000) Number 2017 Number 2018 2017 2018

Opening balance 6 791 9 060 12 742 16 917

Repurchase of depot shares (see Note 22) 3 897 2 611 7 308 4 852

Sale of depot shares (see Note 22) – 1 628 – 1 324 – 3 010 – 2 233

Reclassification to / from capital reserves (see Note 22) – – – 123 – 177

Closing balance 9 060 10 347 16 917 19 359

Average sale price per share in EUR 1 886 1 931

Average repurchase price per share in EUR 1 875 1 858

Sales of shares are converted using average annual exchange rates (see Note 22). Deviations from historical rates for sold shares are taken into account under

“Reclassification to/from capital reserves”.

22. Sales of right-of-residence products (in EUR 1000) 2017 2018

Share sales

Gross sales of shares 3 071 2 556

Transfer from own shares – 3 010 – 2 233

Total share sales 61 323

Repurchase and take-back of shares – 7 308 – 4 852

Treatment as own shares 7 308 4 852

Sales reduction 0 0

Sale of other right-of-residence products

Gross sales of other right-of-residence products 7 757 3 141

Less prepaid portions of operating costs of annual subscription charges – 2 998 – 1 298

Allocation to liabilities from sales of rights of residence – 2 162 – 786

Total sales of other right-of-residence products 2 597 1 057

Repurchase of other right-of-residence products – 9 – 5

Less prepaid portions of operating costs of annual subscription charges

and expense for higher repurchase prices 1 – 1

Decrease in liabilities from sales of rights of residence 8 6

Sales reduction 0 0

Sales of shares and other right-of-residence products

Gross sales of shares and other right-of-residence products 10 828 5 697

Less total liabilities recognised – 8 170 – 4 317

Total sales of shares and other right-of-residence products 2 658 1 380

23. Annual subscription charges (in EUR 1000)

Annual subscription charges, shares 65 987 64 100

Annual subscription charges, other right-of-residence products 6 243 6 273

Total 72 230 70 373


47

24. Resort sales (in EUR 1000) 2017 2018

Local charges 44 218 47 020

Marketing to third parties 6 601 7 842

Restaurants and shops 21 389 23 356

Additional services 7 974 9 135

Other sales from services 6 230 6 866

Total 86 412 94 219

25. Other sales (in EUR 1000)

Travel service sales 917 632

Cancellation insurance on right-of-residence products 1 795 1 904

Fees for right-of-residence products 982 711

Other 289 217

Total 3 983 3 464

Travel service sales are normally recognised in the income statement on the customer’s day of departure.

26. Sales deductions (in EUR 1000)

Distribution of residence points for the Reward Program (see Note 10) 2 374 7 183

Deferral for Rewards not yet redeemed for residence points 1 662 – 4 301

Other sales deductions 211 398

Total 4 247 3 280

27. Other operating income (in EUR 1000)

Sub-leasing of the Neuhof property, Baar / leasing of the Sumpfstrasse

property, Steinhausen 336 230

Book gains on the sale of property, plant & equipment 80 33

Income from investment subsidies 236 262

Income from damages and insurance claims 80 99

Restaurants and shops leased to third parties 1 128 1 109

Other 1 131 1 556

Total 2 991 3 289

28. Cost of sales and services (in EUR 1000)

Cost of goods sold, restaurants and shops 8 030 8 744

Cost of additional services resorts 3 981 4 781

Other cost of services resorts 5 340 5 944

Cost of travel services 765 500

Other 1 694 1 904

Total 19 810 21 873

29. Personnel expenses (in EUR 1000)

Wages and salaries 46 545 46 427

Social security contributions 8 633 9 090

Pension cost (see Note 18) 1 149 1 159

Other 2 016 2 375

Total 58 343 59 051

48

30. Maintenance and operating expenses (in EUR 1000) 2017 2018

Maintenance and repair, resorts 5 980 6 159

Maintenance and repair, furniture and office equipment 511 412

Leasing expense 2 310 1 326

Energy supply, water and waste disposal 7 609 8 270

Cleaning, laundry and operating materials 10 159 11 006

Other 383 1 148

Total 26 952 28 321

The item “other” includes the reinstatement costs of the internal special expansion of the Neuhof property, Baar and the relocation costs to the news administration

building in Steinhausen.

31. Marketing and selling expenses (in EUR 1000)

Sales promotion, media and direct advertising 733 341

Public Relations 278 132

Information publications for members 179 191

Other marketing expenses 465 409

Total 1 655 1 073

32. Administrative expenses (in EUR 1000)

Office supplies, paper and printed matter 441 556

Postage and transmission fees 2 284 2 099

IT software and licensing fees 3 957 5 641

Travel and entertainment expenses 966 909

Legal and other consulting expenses 1 475 1 803

Board of Directors’ fees, accounting and audit expenses 1 454 1 471

Insurance and fees 2 184 2 023

Other office and administrative expenses 1 834 1 725

Total 14 595 16 227

33. Other operating expenses (in EUR 1000)

Non-recoverable value added tax 4 653 4 939

Property tax 2 394 2 348

Other taxes and duties 1 871 560

Losses on trade receivables (write-offs and allowance increases) 418 529

Losses from sale of property, plant & equipment 521 605

Other 723 522

Total 10 580 9 503


49

34. Financial result (in EUR 1000) 2017 2018

Interest income 29 164

Currency gains (net) 444 0

Net gains on derivative financial assets at fair value through profit or loss

(forward exchange contracts) 144 143

Other 63 1

Total financial income 680 308

Interest expenses – 205 – 447

Currency losses (net) 0 – 342

Bank charges – 118 – 124

Credit and debit card fees – 660 – 752

Total financial expenses – 983 – 1 665

Total financial result – 303 – 1 357

35. Income taxes (in EUR 1000)

Current income taxes 987 1 085

Deferred income taxes 444 525

Total income tax expense 1 431 1 610

36. Contingent liabilitiesThere are no material contingent liabilities.

37. Leasing obligations (in EUR 1000)

Leasing obligations that do not expire or may not be terminated within twelve months

have the following maturity structure:

Leasing obligations up to 1 year 71 50

Leasing obligations 1 to 5 years 80 94

Leasing obligations over 5 years 1 0

Total 152 144

The leasing obligations consist primarily of leasing agreements for IT equipment and for vehicles.

38. Pledged assetsAssets with a carrying amount of TEUR 92 000 (previous year: TEUR 96 044) are pledged as security for liabilities. Bank loans in the amount of TEUR 51 829 (previous

year: TEUR 25 674). In accordance with Article 29 of the Hapimag AG Articles of Association, the properties of the Company and its subsidiaries can be mortgaged

up to no more than 20 % of the acquisition cost of the properties. The mortgage-related charges in relation to the acquisition cost of property, plant and equipment

on the reporting date amounts to 6,3 % (previous year: 8,4 %).

39. Capital commitmentsObligations of EUR 8,1 million for capital commitments existed on the reporting date (previous year: EUR 41,9 million). These primarily relate to the resorts

in London (GB) and Cavallino (IT).

40. Derivative financial instruments (in EUR 1000)

Passive derivative financial instruments 74 38

Contract volumes 23 564 27 561

Forward exchange contracts and foreign currency options are used to hedge foreign currency risks arising from billing. Passive derivative financial instruments are

recognised under accrued expenses and deferred income (see Note 13).

50

41. Change in the scope of consolidationThere were no changes in the scope of consolidation in the reporting and previous year.

42. Financial risk managementPrinciples of risk management

The Board of Directors has ultimate responsibility for risk management. The Board of Directors has therefore appointed a committee with responsibility for establishing

and supervising the principles of risk management. The committee reports regularly to the Board of Directors. The established principles of risk management are aimed

at identifying and analysing the risks that the Group is exposed to, defining reasonable limits and establishing controls, and also at monitoring risks and ensuring that

the limits are adhered to. The principles of risk management, and the processes employed, are regularly reviewed in order to take into account changes in both market

conditions and the Group’s activities.

In the real estate area, Hapimag uses its own risk assessment system to identify, evaluate and control natural risks such as fire, water, storms and earthquakes.

With regard to its financial assets and liabilities, the Hapimag Group is exposed in particular to risks arising from changes in exchange rates and interest rates,

credit risk on receivables and liquidity risk. The following sections provide an overview of the extent of the individual risks.

Foreign currency risks

Hapimag has a certain exposure to foreign currency risks. The prices for right-of-residence products, annual subscription charges and travel services (invoiced from the

head office in Steinhausen) are booked in CHF. Invoices issued to the most important countries of origin of Hapimag members are also shown in the relevant local

currency because there is also the option to pay them in the local currency. Local charges as well as products and services delivered at the holiday location are assessed

in the local currency. Investments and operating expenses at the resorts are paid predominantly in local currency. For larger investments, foreign currency risks are

hedged in the form of forward exchange contracts. Forward exchange contracts and foreign currency options are used to hedge foreign currency risks arising from

billing (see Note 40).

Interest rate risk

The interest rate risk is the risk that the fair value or future payment flows of a financial instrument will fluctuate based on changes of the market interest rate. Cash

is invested in short-term instruments. Non-current loans from shareholders are interest-free. Hapimag also has current, medium-term and non-current bank loans

at its disposal at fixed and variable interest rates. In the case of the fixed interest-bearing financial liabilities (TEUR 51 829, previous year: TEUR 25 674) an interest rate

movement has no effect on the consolidated result, because there is no adjustment to the fair value.

Credit risk

Credit risk is the risk that Hapimag will suffer financial losses if a customer fails to meet their contractual obligations. Trade receivables relate mainly to private persons

(Hapimag members), and are centrally and constantly monitored. The outstanding amounts are exposed to a certain credit risk that is accounted for by means of an

allowance based on experience (provisions). Hapimag members with overdue items over CHF 100 are unable to book an apartment (booking block in the system). The

accommodation that becomes available as a result can continue to be used by Hapimag. In addition, share repurchases or transfers are effected only if all open items

are settled beforehand. Hapimag places deposits only with first-class financial institutions. The maximum credit risk is reflected in the carrying amounts of the financial

assets recognised in the balance sheet.

Liquidity risk

Liquidity risk is the risk that Hapimag will be unable to meet its financial obligations at maturity. Liquidity is managed and controlled by a central Treasury Department,

based on a short and medium-term income/expenditure plan, which takes into account in particular the ongoing building investments in the resorts. To ensure that

Hapimag is solvent at all times, and to preserve its financial flexibility, a liquidity reserve is maintained in the form of cash in hand and credit limits. As of the balance

sheet date of 31 December 2018 Hapimag has a credit limit in the amount of TEUR 77 436 (previous year: TEUR 67 875). Of this,TEUR 51 829 (previous year: TEUR

25 674) has been used.


51

43. Transactions with related persons and companiesRelated persons and companies are members of the Board of Directors and the Executive Board (including members of their families), companies in which they

hold considerable influence, Group companies and pension funds.

An overwhelming proportion of the Hapimag Group’s sales is generated with shareholders and members. Hapimag staff hold 0.07 % of the company’s total shares.

Otherwise, there are no sums due from or payable to related persons or companies.

Payments to members of the Board of Directors and Executive Board (in EUR 1000) 2017 2018

Board of Directors and Executive Board: fees and salaries as well as remune-

ration for committee activities 1 851 1 612

Board of Directors and Executive Board: pension contributions 203 160

Total payments to members of the Board of Directors and Executive Board 2 054 1 772

44. Events after the balance sheet dateNo further material events took place between the balance sheet date and 20 March 2019 that would have had an impact on the 2018 consolidated financial

statements or that would be subject to disclosure here.

45. Conversion rates for the major currencies (Conversion in EUR) 2017 2018

Annual average rates 1 CHF 0,8990 0,8656

Consolidated income statement and consolidated cash flow statement 100 CZK 3,7998 3,9088

100 DKK 13,4423 13,4169

1 GBP 1,1438 1,1308

100 HUF 0,3234 0,3138

100 MAD 9,1408 9,0250

1 TRY 0,2437 0,1810

1 USD 0,8871 0,8468

Year-end rates 1 CHF 0,8558 0,8873

Consolidated balance sheet 100 CZK 3,9110 3,8864

100 DKK 13,4275 13,3895

1 GBP 1,1280 1,1133

100 HUF 0,3225 0,3115

100 MAD 8,9345 9,1304

1 TRY 0,2211 0,1654

1 USD 0,8356 0,8742

52

Sales Real estate Resorts Member Services Central Services Total Group

in EUR 1000 Notes 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018

Sales of right-of-residence products 22 367 367 0 0 0 0 2 291 1 013 0 0 2 658 1 380

Annual subscription charges 23 0 0 23 642 21 463 15 748 15 976 9 219 8 971 23 621 23 963 72 230 70 373

Resort sales 24 0 0 0 0 86 412 94 219 0 0 0 0 86 412 94 219

Other sales 25 0 0 0 0 196 765 3 787 2 699 0 0 3 983 3 464

Sales deductions 26 – 39 – 167 – 575 – 356 – 2 612 – 1 815 – 455 – 525 – 566 – 417 – 4 247 – 3 280

Total sales 328 200 23 067 21 107 99 744 109 145 14 842 12 158 23 055 23 546 161 036 166 156

Income from exercised rights of residence 10 0 0 12 587 15 367 0 0 0 0 0 0 12 587 15 367

Other operating income 27 14 4 361 377 2 012 2 103 87 186 517 619 2 991 3 289

Total operating income 342 204 36 015 36 851 101 756 111 248 14 929 12 344 23 572 24 165 176 614 184 812

Cost of sales and services 28 – 1 0 0 0 – 18 059 – 20 754 – 1 750 – 1 119 0 0 – 19 810 – 21 873

Personnel expenses 29 – 1 386 – 1 509 – 949 – 1 047 – 38 654 – 41 718 – 8 424 – 6 492 – 8 930 – 8 285 – 58 343 – 59 051

Depreciation of property, plant and equipment 6 – 53 – 47 – 29 637 – 28 869 – 50 – 36 – 75 – 45 – 795 – 1 256 – 30 610 – 30 253

Amortisation of intangible assets 7 0 0 – 94 – 61 – 47 – 49 0 0 – 1 066 – 510 – 1 207 – 620

Maintenance and operating expenses 30 – 28 – 15 – 104 – 249 – 24 328 – 25 955 – 337 – 202 – 2 155 – 1 900 – 26 952 – 28 321

Marketing and selling expenses 31 – 336 – 151 0 0 – 593 – 545 – 591 – 199 – 135 – 178 – 1 655 – 1 073

Administrative expenses 32 – 465 – 532 – 1 640 – 1 486 – 5 584 – 6 308 – 1 632 – 2 005 – 5 274 – 5 896 – 14 595 – 16 227

Other operating expenses 33 – 38 – 29 – 2 917 – 3 190 – 5 066 – 5 515 – 947 – 596 – 1 612 – 173 – 10 580 – 9 503

Operating result – 1 965 – 2 079 674 1 949 9 375 10 368 1 173 1 686 3 605 5 967 12 862 17 891




Income taxes 35 – 1 431 – 1 610


Sales

The Sales division reports the revenue from the sales of right-of-

residence products mainly to new customers (after deduction of

on-balance-sheet amounts). The division’s expenses comprise

mainly personnel expenses, administration expenses and marketing /

distribution expenses.

Real estate

The Real estate division covers activities relating to the planning

and construction of new resorts, renovations and all real estate

transactions. Operating income comprises proportionate credits

from the annual subscription charges, income from exercised rights

of residence from the different points products, compensation

from insurance and book gains on the sale of tangible assets. The

division’s expenses mainly comprise depreciation of the resorts’

tangible assets, expenses incurred in the Central Building Depart-

ment, building insurance, property taxes and book losses on the

sale or renovation of tangible assets.

Resorts

The Resorts division includes the operational activities involved in

running and managing the resorts. Turnover in this division comes

from the annual subscription charges and the income from local charges

and additional services at the resorts, such as catering and excursions.

The most important items of expenditure are: cost of sales and services,

maintenance and operating expenses, personnel expenses, admini-

strative costs, a proportion of marketing expenses for occupancy-

related promotional measures and other operating expenses (primarily

value added tax that cannot be reclaimed).

Member Services

The Member Services division includes the call centre with the Service

Points for processing member queries, the booking of holiday apart-

ments and arrangement of travel services. This division generates

sales through annual subscription charges, revenue from points insu-

rance and cancellation charges, as well as revenue from the Service

Points from the sale of right-of-residence products (after deduction

3. Business divisions


53

Sales Real estate Resorts Member Services Central Services Total Group

in EUR 1000 Notes 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018

Sales of right-of-residence products 22 367 367 0 0 0 0 2 291 1 013 0 0 2 658 1 380

Annual subscription charges 23 0 0 23 642 21 463 15 748 15 976 9 219 8 971 23 621 23 963 72 230 70 373

Resort sales 24 0 0 0 0 86 412 94 219 0 0 0 0 86 412 94 219

Other sales 25 0 0 0 0 196 765 3 787 2 699 0 0 3 983 3 464

Sales deductions 26 – 39 – 167 – 575 – 356 – 2 612 – 1 815 – 455 – 525 – 566 – 417 – 4 247 – 3 280

Total sales 328 200 23 067 21 107 99 744 109 145 14 842 12 158 23 055 23 546 161 036 166 156

Income from exercised rights of residence 10 0 0 12 587 15 367 0 0 0 0 0 0 12 587 15 367

Other operating income 27 14 4 361 377 2 012 2 103 87 186 517 619 2 991 3 289

Total operating income 342 204 36 015 36 851 101 756 111 248 14 929 12 344 23 572 24 165 176 614 184 812

Cost of sales and services 28 – 1 0 0 0 – 18 059 – 20 754 – 1 750 – 1 119 0 0 – 19 810 – 21 873

Personnel expenses 29 – 1 386 – 1 509 – 949 – 1 047 – 38 654 – 41 718 – 8 424 – 6 492 – 8 930 – 8 285 – 58 343 – 59 051

Depreciation of property, plant and equipment 6 – 53 – 47 – 29 637 – 28 869 – 50 – 36 – 75 – 45 – 795 – 1 256 – 30 610 – 30 253

Amortisation of intangible assets 7 0 0 – 94 – 61 – 47 – 49 0 0 – 1 066 – 510 – 1 207 – 620

Maintenance and operating expenses 30 – 28 – 15 – 104 – 249 – 24 328 – 25 955 – 337 – 202 – 2 155 – 1 900 – 26 952 – 28 321

Marketing and selling expenses 31 – 336 – 151 0 0 – 593 – 545 – 591 – 199 – 135 – 178 – 1 655 – 1 073

Administrative expenses 32 – 465 – 532 – 1 640 – 1 486 – 5 584 – 6 308 – 1 632 – 2 005 – 5 274 – 5 896 – 14 595 – 16 227

Other operating expenses 33 – 38 – 29 – 2 917 – 3 190 – 5 066 – 5 515 – 947 – 596 – 1 612 – 173 – 10 580 – 9 503

Operating result – 1 965 – 2 079 674 1 949 9 375 10 368 1 173 1 686 3 605 5 967 12 862 17 891




Income taxes 35 – 1 431 – 1 610


of on-balance-sheet amounts). The main expense items are personnel

expenses and the purchase of insurance benefits. Expenses also

include a proportion of marketing expenses (such as information

publications for shareholders and members) as well as expenses

related to member care.

Central Services

Central Services include the following areas: Board of Directors,

Executive Board, finance, human resources, IT, legal service, com-

munication and marketing. Central Services receive proportionate

credit from the annual subscription charges. The most important

expenses are personnel expenses, administrative costs and depre-

ciation on office furniture and software/hardware.

Other explanations

Annual subscription charges are used primarily to cover depreciation

(financing of renovations), operating expenses for the running of the

resorts, the call centre, the central and local administrations, as

well as the consultation and services provided by the Service Points.

Accordingly, the annual subscription charges are divided among the

divisions of Property, Resorts, Member Services and Central Services.

Since the overwhelming proportion of the assets of the Hapimag

Group are invested in the tangible assets of the resorts, most of the

depreciation – with the exception of equipment and computer systems

at head office – is allocated to the Property division. There are no

significant transactions between the divisions.

54

Company (name) Currency Capital in 1000 Proportion of capital and votes in %

31.12.2017 31.12.2018 31.12.2017 31.12.2018

direct indirect direct indirect

Hapimag AG, CH-Steinhausen CHF 41 670 41 670

Hapimag Finanz AG, LI-Vaduz CHF 500 500 100 % 100 %

Nordia Anstalt, LI-Vaduz CHF 100 100 100 % 100 %

Hava Beteiligungs-GmbH & Co. Wohnungsverwaltungs-KG,

DE-Winterberg EUR 2 045 2 045 100 % 100 %

Hava Beteiligungs-GmbH, DE-Winterberg EUR 26 26 100 % 100 %

Hapimag Praha S.R.O., CZ-Prag CZK 100 100 100 % 100 %

Hapimag Ges.m.b.H., AT-Wien EUR 36 36 100 % 100 %

Hapimag 2000 Ingatlanüzemeltetó Kft., HU-Budapest HUF 3 000 3 000 100 % 100 %

Hapimag Magyarország Ingatlanhasznositó Kft., HU-Budapest HUF 3 000 3 000 100 % 100 %

Hapimag España S.L.U., ES-Paguera EUR 30 020 30 020 100 % 100 %

Hapimag Italia S.r.l., IT-Bolzano EUR 20 000 20 000 100 % 100 %

Hapimag Danmark A/S, DK-Nysted DKK 4 000 4 000 100 % 100 %

Hapimag Investments (Guernsey) Limited, GB-St. Peter Port GBP 10 10 100 % 100 %

Hapimag Management (UK) Limited, GB-London GBP 0,1 0,1 100 % 100 %

Hapimag Resorts & Residences (UK) Limited,

GB-Bowness-on-Windermere GBP 4 000 4 000 100 % 100 %

Hapimag (Holland) B.V., NL-Amsterdam EUR 1 361 1 361 100 % 100 %

Hapimag Turistik Yatirim ve Ticaret AS, TR-Istanbul TRY 80 490 80 490 100 % 100 %

Hapimag Lake Berkley Corporation, USA-Kissimmee USD 0,001 0,001 100 % 100 %

Hapimag France S.àr.l., FR-Saint Cyr sur Mer EUR 15 776,6 15 776,6 100 % 100 %

Hapimag Hellas SA, GR-Damnoni / Agios Vasilios EUR 22 193 22 193 100 % 100 %

Hapimag Marocco SA, MA-Marrakesch MAD 13 010 13 010 99,998 % 0,002 % 99,998 % 0,002 %

Hapimag Liegenschaftsnutzung Ges.m.b.H., AT-Wien EUR 509 509 96 % 4 % 96 % 4 %

Bowness Time-Share Limited, GB-Bowness-on-Windermere,

inactive GBP 550 550 100 % 100 %

The Hapimag Golfclub e.V. (in liquidation), based in Bad-Bellingen (DE), whose management committee consists entirely of Hapimag

representatives, is also consolidated.

4. Consolidated companies as at 31.12.2018


55

56

Report of the Statutory Auditor on the Consolidated Financial Statements

As statutory auditor, we have audited the accompanying consolidated financial statements of Hapimag AG, which comprise the balance sheet, income statement, cash flow statement, statement of changes in equity and notes (pages 30 to 51 and page 54), for the year ended December 31, 2018.

Board of Directors’ ResponsibilityThe board of directors is responsible for the preparation of the consolidated financial statements in accordance with Swiss GAAP FER and the requirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The board of directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements for the year ended December 31, 2018 give a true and fair view of the financial position, the results of operations and the cash flows in accordance with Swiss GAAP FER and comply with Swiss law.

REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF SHAREHOLDERS OF HAPIMAG AG, STEINHAUSEN

57

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO) and that there are no circumstances incompatible with our independence.

In accordance with article 728 a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the board of directors.

We recommend that the consolidated financial statements submitted to you be approved.

KPMG AG

Nicole Charrière Roos Thomas OdermattLicensed Audit Expert Licensed Audit ExpertAuditor in Charge

Zurich, 20 March 2019

Report on Other Legal Requirements

58

Assetsin CHF 1000 Notes 2017 2018

Cash and cash equivalents 18 155 4 052

Current financial assets 2.1 20 534 20 781

Trade receivables

– due to third parties 12 722 12 891

– due to investments 5 562 5 188

Other current receivables 2 656 2 621

Inventories 207 257

Prepaid expenses and accrued income 810 705

Current assets 60 646 46 495

Financial assets

– due to third parties 134 132

– long-term loans to investments 126 232 177 074

Investments 2.2 260 063 263 371

Property, plant and equipment 2.3 213 437 218 176

Intangible assets 1 005 672

Non-current assets 600 871 659 425

Total assets 661 517 705 920

These are the statutory financial statements of Hapimag AG, Steinhausen. Hapimag is obliged by Swiss law to prepare both statutory financial statements and consoli-

dated financial statements of Hapimag AG.

The consolidated financial statements of Hapimag (pages 30 to 54) include balance sheet and income statement items for all Hapimag companies. As such, the

consolidated financial statements give a true and fair view of the Hapimag Group‘s net assets, financial position and results of operations. The consolidated financial

statements are prepared in accordance with the recommendations on accounting (Swiss GAAP FER).

The resorts owned by Hapimag AG itself (in Portugal, Austria, Switzerland and Finland), their results, and the activities of the head office, are to be found in the

statutory financial statements of Hapimag AG (pages 58 to 65). The other resorts are owned indirectly through local companies, and are recognised as investments

in the statutory financial statements of Hapimag AG. These statutory financial statements are prepared in accordance with the Swiss Code of Obligations.

Balance sheet

ANNUAL FINANCIAL STATEMENTS OF HAPIMAG AG AS AT 31.12.2018

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Equity and liabilitiesin CHF 1000 Notes 2017 2018

Trade payables

– due to third parties 6 922 3 215

– due to investments 6 422 36 038

Liabilities from rights of residence 28 699 28 000

Current interest-bearing liabilities 10 000 30 158

Other current liabilities 2.4 15 181 14 231

Current provisions 707 907

Accrued expenses and deferred income 8 496 2 645

Current liabilities 76 427 115 194

Liabilities from rights of residence 57 617 50 977

Loans from shareholders 168 329 166 667

Non-current interest-bearing liabilities 20 000 28 254

Other non-current liabilities 2.4 16 355 13 119

Provisions 19 867 17 308

Non-current liabilities 282 168 276 325

Liabilities 358 595 391 519

Share capital 2.5 41 670 41 670

Statutory capital reserves

– Reserves from capital contributions 55 143 55 143

– Other capital reserves 2.6 157 463 159 651

Voluntary retained earnings 63 313 67 200

Own shares against reserves from capital contributions 2.7 – 18 554 – 21 579

Net profit 3 887 12 316

Equity 302 922 314 401

Total equity and liabilities 661 517 705 920

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in CHF 1000 Notes 2017 2018

Net proceeds from the sale of goods or services 2.8 95 107 100 298

Income from exercised rights of residence 14 001 17 753

Other operating income 1 052 1 353

Operating income 110 160 119 404

Cost of sales and services – 5 740 – 6 089

Personnel expenses – 25 127 – 28 007

Other operating expenses 2.9 – 62 403 – 66 611

Depreciation of property, plant and equipment – 9 884 – 9 518

Amortisation of intangible assets – 1 226 – 620

Valuation adjustments on investments and long-term loans to investments 2.10 – 2 880 – 1 497

Operating result 2 900 7 062

Financial expenses – 433 – 759

Financial income 2.11 1 861 6 637

Net profit before taxes 4 328 12 940

Direct taxes – 441 – 624

Net profit 3 887 12 316

Income statement

ANNUAL FINANCIAL STATEMENTS OF HAPIMAG AG AS AT 31.12.2018

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1.1 GeneralThe annual accounts have been prepared in accordance with the provisions of the Swiss Accounting Law (title 32 of the Swiss Code of

Obligations). The income statement is based on the total cost method.

1.2 Financial assetsCall options that Hapimag AG has acquired from shareholders up to 31 December of the tenth year are recognised under current financial

assets at no more than the cost of acquisition less any impairment losses. Hapimag AG is entitled to exercise its call option at any time at the

agreed price per share. Hapimag AG is not subject to any purchase obligation.

Non-current financial assets primarily comprise loans to investments. Loans granted in foreign currencies are measured at the current closing rate;

unrealised losses are recognised, whereas unrealised gains are not reported (imparity principle).

1.3 Property, plant and equipmentProperty, plant & equipment are measured at cost less depreciation and impairment losses. Property, plant and equipment are depreciated

on a straight-line basis. Land is not depreciated.

1.4 Intangible assetsIntangible assets chiefly comprise computer software and are recognised at cost less amortisation and impairment losses. Amortisation is

on a straight-line basis.

1.5 Loans from shareholdersUntil 28 February 2000, part of the investment requirement (CHF 1100) from the sale of shares was recognised as a liability in “Loans from share-

holders”. The loan was non-redeemable, non-interest-bearing and included in the General Terms of Membership. In the case of a repurchase of

shares with loans, the loan originally recognised as a liability is transferred to equity (capital reserves). This accounts for the continuous decrease

of loans from shareholders.

1.6 Own sharesRepurchased shares are recognised at the time of acquisition as own shares at the repurchase price and reported as a negative entry in equity.

These shares are held for resale to Hapimag members. Shares that are resold are reported in the income statement as revenue from the sale of

shares to the extent that the proceeds exceed the value recognised under “Own shares”.

1.7 Net proceeds from the sale of goods or servicesNet proceeds from the sale of goods and services are generally recognised at the time of invoicing. When repurchased shares are resold, the

amount by which the resale value exceeds the value recognised in the balance sheet is booked in the income statement. When other right-of-

residence products are sold, the sales proceeds, to the extent that they are required for the provision of accommodation (investment requirement),

are recognised as liabilities arising from the sale of rights of residence (current and non-current liabilities). The prepaid portion of operating costs

of the annual subscription charge, which is included in the sales prices for the entire contractual term, is booked under “Other liabilities” (current

and non-current liabilities). Sale proceeds exceeding that amount are booked in the income statement.

1.8 Income from exercised rights of residenceWhen the rights of residence (points) of other right-of-residence products are claimed, the liability arising from rights of residence (number of

points times the amount per point entered as a liability) is reduced and earnings in the same amount result.

1.9 Leasing transactionsLeasing and rental agreements are recognised according to legal ownership. As such, expenses are recognised in the period they are incurred,

but the leased or rented objects themselves are not recognised.

1. Accounting policies

NOTES TO THE 2018 FINANCIAL STATEMENTSOF HAPIMAG AG

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2.1 Current financial assets (in CHF 1000) Number 2017 Number 2018 2017 2018

Opening balance 8 462 10 511 16 641 20 534

Purchase of call options 2 049 130 3 893 247

Closing balance 10 511 10 641 20 534 20 781

Hapimag has acquired from shareholders a call option until 31 December of the tenth year. Hapimag AG is entitled to exercise its call option at any time at a price

of CHF 200 per share. Hapimag is not subject to any purchase obligation. No call options were exercised in the current financial year or the previous one.

2.2 InvestmentsThe investments are listed on page 54 .

2.3 Property, plant and equipment (in CHF 1000) 2017 2018

Land and buildings 178 045 205 615

Equipment, furniture and equipment, vehicles 10 973 12 561

Assets under construction and advance payments 24 419 0

Total 213 437 218 176

2.4 Other liabilities (in CHF 1000)

Liabilities to members 1 319 1 251

Operating cost portion of annual subscription charges for right-of-residence products paid in advance (up to 1 year) 12 891 11 769

Other 971 1 211

Total current 15 181 14 231

Operating cost portion of annual subscription charges for right-of-residence products paid in advance (over 1 year) 16 093 12 970

Other 262 149

Total non-current 16 355 13 119

2.5 Share capitalAs at the year-end, the share capital consisted of 59 300 registered shares with a nominal value of CHF 100 each and 178 700 registered shares with a nominal value

of CHF 200 each, amounting to a total of CHF 41.670 million.

2.6 Statutory capital reserves (in CHF 1000)

Other capital reserves as at 1.1. 170 857 157 463

Repurchase of loans 3 884 2 188

Contribution to annual loss of previous year (withdrawal) – 17 278 0

Other capital reserves as at 31.12. 157 463 159 651

2. Notes to balance sheet and income statement items


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2.7 Own shares against reserves from capital contributionsOwn shares against reserves from capital contributions as at 31 December 2018 comprised

10 347 registered shares with a nominal value of CHF 100/CHF 200.

(in CHF 1000) Number 2017 Number 2018 2017 2018

Opening balance 6 791 9 060 13 773 18 554

Repurchase of depot shares 3 897 2 611 8 130 5 605

Sale of depot shares – 1 628 – 1 324 – 3 349 – 2 580

Closing balance 9 060 10 347 18 554 21 579

Own shares are recognised at repurchase value in the balance sheet (average of CHF 2 086 per share, previous year: CHF 2 048 per share).

2017 2018

Average sale price per share in CHF 2 098 2 230

Average repurchase price per share in CHF 2 086 2 146

2.8 Net proceeds from the sale of goods or services (in CHF 1000)

Annual subscription charges 76 808 81 034

Resort sales 14 845 16 489

Other sales 3 528 3 342

Sales of right-of-residence products 2 956 1 595

Sales of package tours 1 694 1 627

Sales deductions – 4 724 – 3 789

Total 95 107 100 298

2.9 Other operating expenses (in CHF 1000)

Rental expenses, fees for services, administrative costs in respect of investments 36 869 40 408

Maintenance and operating expenses 6 478 6 774

Marketing and selling expenses 1 328 773

Administrative expenses 9 543 11 752

Other taxes and duties 6 557 5 697

Other operating expenses 1 628 1 207

Total 62 403 66 611

2.10 Valuation adjustments on investments and long-term loans to investments (in CHF 1000)

Valuation adjustments on investments 2 650 1 403

Valuation adjustments on long-term loans to investments 230 94

Total 2 880 1 497

Valuation adjustments arise both from fluctuations in the exchange rates of currencies and because of the results of Group companies. In measuring foreign currencies

at the closing rate, valuation adjustments for unrealised losses are recognised with due account taken of the principle of prudence (Art. 960 of the Code of Obligations)

and of the principle of impartiality (Art. 960a of the Code of Obligations), although any subsequent reversals of impairments arising from unrealised profits from an

impaired investment are not recognised.

2.11 Financial incomeIn 2018 financial year, the financial income contains a dividend of CHF 4,6 million from the Spanish subsidiary Hapimag España S.L.U.

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3.1 Full-time equivalentsThe average annual number of full-time equivalent staff including branches was over 250 both in the reporting year and in the previous year.

3.2 Outstanding leasing obligationsLeasing obligations that do not expire or may not be terminated within twelve months

have the following maturity structure: (in CHF 1000) 2017 2018

Leasing obligations up to 1 year 51 34

Leasing obligations 1 to 5 years 48 54

Total 99 88

The leasing obligations consist primarily of IT equipment leases.

3.3 Collateral provided for liabilities in favour of third parties (in CHF 1000)

Guarantees in favour of subsidiaries for the use of bank loans

and credit lines with banks 409 394

Other guarantees in favour of subsidiaries 18 17

Total 427 411

3.4 Assets pledged as security for liabilitiesAssets with a carrying amount of CHF 88,5 million (previous year: CHF 109,8 million) are pledged as security for the company’s liabilities. Bank loans in the amount

of CHF 58,4 million (previous year: CHF 30,0 million) were secured against the pledged assets.

3.5 Contingent liabilitiesHapimag AG has undertaken by means of time-limited letters of comfort to ensure that certain subsidiaries are financially in a position to meet their liabilities

at all times.

3.6 Other financial liabilitiesAs at 31 December 2018 there were obligations of CHF 0,1 million (previous year: CHF 8,47 million) for capital expenditure projects.

3.7 Material events after the balance sheet dateNo further material events took place between the balance sheet date and 20 March 2019 that would have had an impact on the 2018 annual financial statements

or that would be subject to disclosure here.

3. Further information


65

Proposal of the Board of Directors for the appropriation of the balance sheet profit as at 31.12.2018 (in CHF)

Net profit in 2018 of Hapimag AG 12 315 962

Profit/loss carried forward from 2017 0

Balance sheet profit as at 31.12.2018 12 315 962

The Board of Directors of Hapimag AG requests that the ordinary Annual General Meeting

on 26 April 2019 approve the following appropriation of profit:

Allocation to voluntary retained earnings 12 315 962

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Report of the Statutory Auditor on the Financial Statements

REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF SHAREHOLDERS OF HAPIMAG AG, STEINHAUSEN

As statutory auditor, we have audited the accompanying financial statements of Hapimag AG (pages 58 to 64), which comprise the balance sheet, income statement and notes for the year ended December 31, 2018.

Board of Directors’ ResponsibilityThe board of directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and the company’s articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The board of directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements for the year ended December 31, 2018 comply with Swiss law and the company’s articles of incorporation.

Report on Other Legal Requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO) and that there are no circumstances incompatible with our independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the board of directors.

We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s articles of incorporation. We recommend that the financial statements submitted to you be approved.

KPMG AG

Nicole Charrière Roos Thomas OdermattLicensed Audit Expert Licensed Audit Expert Auditor in Charge

Zurich 20 March 2019

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The Annual Report of Hapimag appears in German and English. The German- language version is legally binding. Terms in this Annual Report that denote male persons are also to be understood as denoting their female equivalents. Any copy ing or dissemination, whether in part or in whole, of the texts, charts or photo-graphs figuring in this Annual Report – especially their dissemination by electronic means – requires the express permission of the Hapimag AG. Non-compliance represents an infringement of copyright law.

KPMG AG, Zurich has audited the German-language version of the consolidated financial statement and the financial statements of Hapimag AG for the year ended 31 December 2018, from which this translation was derived. In the audit reports dated 20 March 2019 KPMG expressed an unqualified opinion on the German-language version of the consolidated financial statements and the financial statements of Hapimag AG from which this translation was derived.

IMPRINT

Publisher Hapimag AGSumpfstrasse 186312 Steinhausen | SchweizService Line 00800 3030 8080E-Mail info@ hapimag.comInternet www. hapimag.com

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Hapimag AG | Sumpfstrasse 18 | 6312 Steinhausen | Schweiz | www.hapimag.comService Line 00800 3030 8080 (alternatively: +41 58 733 70 10) | [email protected]

2018 - Hapimag AG2018 Annual Report. 2 For 2019, alongside guest satisfaction, ... Consolidated companies as at 31.12.2018 56 Report of the Statutory Auditors Annual financial statements

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