Global Travel Services
Group Travel 1.5% 1.5% 10.8% 12.4%
FIT (Fully Independent Traveller) 1.5% 1.5% 10.8% 12.4%
Outbound & Specialists
Outbound Nordic 1.0% 1.0% 11.1% 12.0%
Outbound Europe/Asia 0.5% 0.5% 10.1% 13.6%
Destination Management Specialists 2.0% 2.0% 11.7% 15.6%
The value of goodwill is tested at least annually for impairment, or if certain factors or general conditions suggest that its carrying amount can no longer be recovered. The Kuoni Group applies a standard method to assess goodwill values. The basic amount which should be recovered by any goodwill reappraised is based on value-in-use, which is determined from cash flow projections that are themselves based on the latest management-approved business plan. This plan includes the latest management estimates on turnover and margin trends and on operating costs. The business plan also pays due regard to historic values based on past experience and includes projections for the next five years. Subsequent years are considered on a perpetual annuity basis, using growth rates from 0.5% to 2.0%. The discount rates have been calculated on the basis of the weighted average capital costs of the Kuoni Group, with due and full regard to country- and currency- specific risks relating to cash flows.
Management conducted sensitivity analyses of the capitalised good - will for all cash-generating units, which assumed an increase of discount rates of 1% in connection with a reduction of the expected cash flow by 5%. The result of the sensitivity analyses showed that the above changes to the key assumptions will not result in the book value of the cash-generating units exceeding the amount achievable.
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■■ 15. OTHER INTANGIBLE ASSETS
CHF 1 000 Intangible assets from acquisitions Further intangible assets Total other intangible assets
Purchase cost as at 1 January 2012 393 359 90 854 484 213
Additions 0 31 042 31 042
Disposals 0 – 11 917 – 11 917
Acquisitions 41 0 41
Sale of subsidiaries – 8 702 – 1 743 – 10 445
Translation differences – 1 984 – 366 – 2 350
Purchase cost as at 31 December 2012 382 714 107 870 490 584
Accumulated depreciation and amortisation as at 1 January 2012 87 758 49 119 136 877
Amortisation 38 781 0 38 781 Depreciation 0 20 006 20 006 Disposals 0 – 8 348 – 8 348 Impairment 11 039 0 11 039 Sale of subsidiaries – 8 701 – 1 197 – 9 898 Translation differences – 93 – 233 – 326
Accumulated depreciation and amortisation as at 31 December 2012 128 784 59 347 188 131
Net book value as at 31 December 2012 253 930 48 523 302 453
Purchase cost as at 1 January 2013 382 714 107 870 490 584
Additions 0 19 490 19 490
Disposals – 932 – 14 864 – 15 796
Sale of subsidiaries – 5 760 – 6 406 – 12 166
Translation differences 1 669 – 721 948
Purchase cost as at 31 December 2013 377 691 105 369 483 060
Accumulated depreciation and amortisation as at 1 January 2013 128 784 59 347 188 131
Amortisation 37 261 0 37 261
Depreciation 0 17 665 17 665
Disposals – 932 – 12 470 – 13 402
Sale of subsidiaries – 4 925 – 4 456 – 9 381
Translation differences – 549 – 639 – 1 188
Accumulated depreciation and amortisation as at 31 December 2013 159 639 59 447 219 086
Intangible assets deriving from acquisitions consist largely of capital- ised trademark rights, while further intangible assets include software purchased as well as software projects in the course of construction totalling CHF 2.0 million (2012: CHF 0.8 million).
Because of the withdrawal from various loss-making European tour operating activities, impairments of CHF 11.0 million on other intangi- ble assets were necessary in 2012.
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■■ 16. INVESTMENTS IN ASSOCIATES
CHF 1 000 2013 2012
Net book value as at 1 January 2 221 11 562
Share in profits 108 313
Share in losses – 97 – 1 600
Impairment 0 – 8 054
Dividends paid – 98 0
Net book value as at 31 December 2 134 2 221
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■■ 17. INVESTMENTS IN JOINT VENTURES
VFS Tasheel and Vasco Worldwide are joint ventures in which the Kuoni Group participates. They are strategic partners of the Kuoni Group and they are principally engaged in visa application
processing for the Saudi Arabian Government, based in Dubai, U.A.E. VFS Tasheel and Vasco Worldwide are structured as separate
vehicles and the Kuoni Group has residual interests in the net assets of both companies. Accordingly, the Kuoni Group has classified its interests in VFS Tasheel and Vasco Worldwide as joint ventures. In accordance with the agreement under which VFS Tasheel and Vasco Worldwide are established, the Kuoni Group and the other investor in the joint venture have agreed to make additional contributions in pro - portion to their interests to make up any losses, if required.
The following table summarises the consolidated financial infor- mation of VFS Tasheel and Vasco Worldwide as included in its own financial statements, adjusted to the accounting principles of the Kuoni Group. The table also reconciles the summarised financial information to the carrying amount of the Kuoni Group’s interest in VFS Tasheel and Vasco Worldwide.
2013 2012
Share of voting rights and in capital 50% 50%
CHF 1 000 2013 2012
Net book value as at 1 January 44 0
Share in profits 0 0
Share in losses – 2 723 – 382
Investments in joint ventures 2 913 426
Translation differences 3 0
Net book value as at 31 December 237 44
CHF 1 000 2013 2012 Non-current assets 12 910 5 746 Current assets 14 464 318 Non-current liabilities 1 974 37 Current liabilities 24 926 5 939 Net assets 474 88 CHF 1 000 2013 2012 Turnover 11 827 546 Direct costs – 2 228 – 431
Other operating expenses – 13 440 – 865
Depreciation and amortisation – 1 605 – 14
EBIT – 5 446 – 764 Financial result 0 0 Income taxes 0 0 Net result – 5 446 – 764 Share in result – 2 723 – 382 Dividends received 0 0
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■■ 18. OTHER FINANCIAL ASSETS
CHF 1 000 2013 restated2012
Net book value as at 1 January 23 772 23 498
Additions 29 659 2 861
Disposals – 6 914 – 1 854
Acquisitions 0 0
Sale of subsidiaries – 1 058 – 512
Translation differences – 1 265 – 221
Net book value as at 31 December 44 194 23 772
Other financial assets comprise minority holdings and loans amounting to CHF 24.1 million (2012: CHF 22.8 million), pension assets from funded pension plans totalling CHF 19.1 million (2012: CHF 0.0 million) – see note 6 – and loans to joint ventures amounting to CHF 1.0 million (2012: CHF 1.0 million). As in the previous year, there are no loans to associates.
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■■ 19. CASH AND CASH EQUIVALENTS
CHF 1 000 31 Dec 2013 31 Dec 2012
Cash holdings and bank current accounts 327 685 286 562
Time deposits and money market investments with original term up to 90 days of the date of the acquisition 17 486 34 745
Total 345 171 321 307
Cash and cash equivalents are denominated in the following currencies: CHF 1 000 31 Dec 2013 31 Dec 2012 CHF 41 113 34 654 GBP 82 327 56 401 EUR 57 861 65 043 USD 43 362 47 542 Other 120 508 117 667
The average interest rates were: 2013 2012 CHF 0.0% 0.1% GBP 0.4% 0.9% EUR 0.0% 0.5% USD 0.1% 0.5% ■■ ■■ 20. TIME DEPOSITS
This position contains time deposits originally maturing in more than 90 days from the date of acquisition.
Time deposits are denominated in the following currencies:
CHF 1 000 31 Dec 2013 31 Dec 2012 USD 337 66 CNY 12 901 7 213 INR 6 202 1 721 Other 5 860 4 241 Total 25 300 13 241
The average interest rates were:
2013 2012
USD 0.7% 0.7%
CNY 3.3% 3.3%
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■■ 21. ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES
CHF 1 000 31 Dec 2013 31 Dec 2012
Receivables from customers 349 699 332 212
Income tax receivables 19 662 7 100
Loans to joint ventures 11 949 0
Other receivables 45 150 76 174
Flat-rate value adjustments – 30 516 – 22 837
Positive fair values of derivative financial instruments held 24 238 11 188
Total 420 182 403 837
Accounts receivable and other receivables show the following payment dates:
CHF 1 000 31 Dec 2013 31 Dec 2012
Payment not yet due 236 117 200 379
Payment overdue 1 to 30 days 128 747 143 021
Payment overdue 31 to 60 days 26 673 39 947
Payment overdue 61 to 90 days 7 801 12 552
Payment overdue by more than 90 days 27 122 19 587
426 460 415 486
Flat-rate value adjustments – 30 516 – 22 837
Positive fair values of derivative financial instruments held 24 238 11 188
Total 420 182 403 837
Flat-rate value adjustments to overdue receivables totalled
CHF 4.8 million (2012: CHF 4.1 million) to receivables between 61 and 90 days overdue and CHF 25.7 million (2012: CHF 18.7 million) to receivables over 90 days overdue. Some of the underlying receivables are expected to be paid. The receivables with payment date not yet due relate largely to long-term customer relations with agents or processing companies.
Flat-rate value adjustments showed the following developments:
CHF 1 000 2013 2012
Flat-rate value adjustments 1 January 22 837 23 042
Change (net) 9 979 433
Sale of subsidiaries – 1 540 – 388
Translation differences – 760 – 250
Flat-rate value adjustments 31 December 30 516 22 837
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■■ 22. EQUITY
The capital administered by the Kuoni Group corresponds to the consolidated equity. Kuoni’s aims in administering this capital are: * to maintain the sound structure of its statement of financial
position based on going-concern values;
* to maintain the financial scope required for future investments and acquisitions;
* to ensure a return for investors that is commensurate with their investment risk.
The Kuoni Group administers its equity by means of its statement of financial position equity ratio, i. e. the proportion of equity to total assets. The equity ratio amounted to 32.6% on 31 December 2013. The Kuoni Group is not subject to any legal covenants relating to minimum equity requirements. For covenants relating to financial indebtedness, see page 170.
CHF 1 000 31 Dec 2013 31 Dec 2012 restated
Equity attributable to shareholders of Kuoni Travel Holding Ltd. 774 286 690 953
Non-controlling interests 4 764 8 075
Total equity 779 050 699 028
The Board of Directors makes a proposal to the Annual General Meeting of Shareholders on the use of any profit or balance available for distri bution. The Kuoni Group pursues a results-based distribu- tion policy and newly distributes between 40% and 45% (until now between 30% and 35%) of its net profit for the year to its shareholders. The Board of Directors will propose to the Annual General Meeting of 25 April 2014 that shareholders receive a with holding tax-free appro- priation from the capital contribution reserve. Based on the net result for 2013 the Board of Directors proposes to make a distribution to the shareholders of CHF 1.50 per registered share A and CHF 7.50 per registered share B.
On 17 April 2013 the shareholders approved the appropriation from the capital contribution reserve of CHF 0.60 per registered share A (2012: CHF 0.60) and CHF 3.00 per registered share B (2012: CHF 3.00) in respect of the 2012 business year. The distribution to holders of shares entitled to dividend totalled CHF 11.5 million (2012: 11.5 million).
■■
■■ COMPOSITION OF SHARE CAPITAL
Type of share Registered share A Registered share B Total
Number 1 249 500 3 748 500 4 998 000 Nominal value in CHF 0.20 1.00 – Share capital CHF 249 900 3 748 500 3 998 400 in % 6.25 93.75 100.00 Voting rights Number 1 249 500 3 748 500 4 998 000 in % 25.00 75.00 100.00
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■■ CONDITIONAL CAPITAL
Conditional capital issuable via the exercising of conversion rights and/or warrants linked to bonds or similar debt issued by Kuoni Travel Holding Ltd. or any of its subsidiaries in the domestic or inter - national capital markets amounts to a maximum of CHF 384 000. In the case of issues of bonds or similar debt instruments to which conversion and/or warrant rights are attached, the pre-emptive rights of the existing shareholders are excluded. The holders of the said conversion and/or warrant rights are entitled to subscribe for new registered shares B. The acquisition of registered shares through the exercise of conversion and/or warrant rights and any subsequent transfer thereof are subject to the transfer and voting restrictions contained in the Articles of Incorporation. The Board of Directors is authorised to restrict or revoke the pre-emptive rights of share- holders when such bonds or similar debt instruments to which con- version and/or warrant rights are attached are issued to finance the acquisition of other companies or parts of companies. If share- holders’ pre-emptive rights are revoked by a decision of the Board of Directors, the conversion and/or warrant rights concerned will be issued at the prevailing market price, and the new registered shares will be issued at market rates, with due regard to the current market price of the registered shares concerned and/or of comparable fi nan - cial instruments with a market price. The exercise period is limited to ten years for conversion rights and to seven years from the date of the bond issue for warrant rights.
Conditional capital of a maximum of CHF 96 000 also exists for use in exercising subscription or option rights granted to employees of Kuoni Travel Holding Ltd. or its subsidiaries under one or more employee stock option plans. In such cases, new registered shares B may also be issued to employees at rates below the current stock market price, and existing shareholders shall have no subscription rights. The terms and conditions for the issue of such shares shall be determined by the Board of Directors. The acquisition of registered shares under such employee stock option plans and any subsequent transfer thereof are subject to all the relevant statutory transfer and
■■
■■ AUTHORISED CAPITAL
Kuoni Travel Holding Ltd. has no authorised capital. Article 3ter of the
Articles of Incorporation of Kuoni Travel Holding Ltd. in relation to the authorised capital was deleted upon the expiration of its validity as of 20 April 2013 with a resolution on revocation.
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■■ RESTRICTED TRANSFERABILITY PROVISIONS
The Articles of Incorporation stipulate that no more than 3% of total voting rights may be entered in the name of any one shareholder.
■■
■■ OPTING OUT/OPTING UP
There is no opting-out or opting-up clause in the Articles of Incorporation.
■■
■■ PRINCIPAL SHAREHOLDERS
As of 31 December 2013 the largest shareholders known to the Kuoni Group were as follows:
Shareholder
Number/ category of
shares Voting rights in % Date of last disclosure
Kuoni and Hugentobler-Foundation, Zurich 1 249 500/A 25.00 3.4.1995
Previous year 1 249 500/A 25.00 3.4.1995
Silchester International Investors Ltd, London 710 042/B 14.21 31.12.2013
Previous year 757 704/B 15.16 31.12.2012
Federation of Migros Cooperatives, Zurich, together with Anlagestiftung der Migros 35 000 Options242 149/B 4.84 10.12.2013
Previous year 39 000 Options284 656/B 8.50 7.12.2009
Pictet Funds S.A., Geneva n.a. under 3.00 10.7.2013
Previous year 151 149/B 3.02 11.4.2012
www.six-exchange-regulations.com/ publications/published_notifications/ major_shareholders_de.html www.kuoni.com/major-shareholders
All movements that crossed a threshold between 1 January 2013 and 31 December 2013 were disclosed and duly published on the website of SIX Swiss Exchange Regulations as well as on the company website.
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■■ TREASURY SHARES
Share plan Number of registered
shares B Book value CHF 1 000
Held on 1 January 2012 136 791 17 163
Purchase 0 0
Share based payment transaction – 29 049 – 1 453
Held on 31 December 2012 107 742 15 710
Purchase 0 0
Share based payment transaction – 57 189 – 2 839
Held on 31 December 2013 50 553 12 871
■■
■■ SHARE PLAN
The remaining treasury shares held are reserved for the employee share plan of the Board of Directors, the Group Executive Board and senior management.
The changes to treasury shares reflect the registered shares B issued to the Board of Directors, the Group Executive Board and management.
■■
■■ RETAINED EARNINGS
Only a limited amount of retained earnings is available for distribution:
* the free reserves of Kuoni Travel Holding Ltd. subsequent to the approval of an appropriate resolution by the General Meeting of Shareholders;
■■
■■ OTHER RESERVES
Other reserves contain translation differences as well as fair-value reserves and hedging reserves. The latter two of these are shown with due consideration for deferred taxation amounts.