Notes to the Financial Statements

1.1.General information

These financial statements 2021 were prepared under the provisions of the Swiss accounting law (32nd title of the Swiss Code of Obligations).

Since Arbonia AG prepares consolidated financial statements in accordance with a recognised financial reporting standard (International Financial Reporting Standards), the company is not disclosing in accordance with the statutory provisions the audit fees and is not presenting a cash flow statement and a management report.

1.2.Other current receivables

Other current receivables from shareholdings are short term loans, which are accounted for at nominal value and for which if necessary, individual specific valuation allowances have been booked.

1.3.Financial assets

Financial assets consist of short-term loans to third parties and long-term loans to shareholdings and are valued at cost reduced by required impairments. Loans denominated in foreign currencies are converted at the current closing rate. Unrealised exchange losses are

recorded immediately whereas unrealised exchange gains are not recorded (imparity principle).

1.4.Treasury shares

Treasury shares are recognised at acquisition date at cost as a negative item in equity. In a subsequent sale or delivery in the context of the share based payments, profit or loss arising from the sale of treasury shares is recognised directly in equity under voluntary reserves.

1.5.Share based payments

A share based payment plan exists for members of the Board of Directors. Under this plan, members receive a minimum of 50% of their compensation in shares. The determination of the number of shares is based on the volume weighted average share price of 20 trading days, less a 20% discount for the restriction period. These shares granted have a restriction period of four years. The fair value of the equity compensation instruments is determined at the grant date and recorded to the income statement as personnel expenses with a corresponding offsetting entry to equity.

1.6.Interest bearing liabilities

Interest bearing liabilities are accounted for at nominal value. Long-term loans denominated in foreign currencies are converted at the current closing rate. Unrealised exchange losses are recorded immediately whereas unrealised exchange gains are not recorded (imparity principle).

2.1.Investments

All subsidiaries directly or indirectly held by Arbonia AG are disclosed in note 60 in the notes to the consolidated financial statements of Arbonia Group.

2.2.Current interest bearing liabilities

On 3 November 2020, Arbonia had entered into a syndicated loan for CHF 250 million. This loan, arranged with a consortium of domestic and foreign banks, has a term of five years, with the option to extend the agreement twice for one year each. In 2021, the first extension option was exercised, so that the term now runs until 2026. As at 31 December 2021 and 31 December 2020, Arbonia has not drawn on the syndicated loan.

2.4.Share capital

Refer to note 48 in the notes to the consolidated financial statements of Arbonia Group.

2.5.Capital contribution reserve

The capital contribution reserve includes the premium from the capital increases in 2007, 2009, 2015, 2016 and 2017 reduced by previous distributions.

The distribution from capital contribution reserve is fiscally treated like a redemption of share capital. The Swiss Federal Tax Administration (FTA) has confirmed the disclosed capital contribution reserve (balance as of 31 December 2020) as capital contribution within the meaning of article 5 para. 1bis VStG.

2.6.Treasury shares

2.7.Financial income

Financial income totals CHF 9.5 million (2020: CHF 13.3 million) and consists mainly of interest income on loans to shareholdings and foreign currency exchange gains.

2.8.Financial expenses

Financial expenses totals CHF 12.0 million (2020: CHF 14.1 million) and consists mainly of bank interest and foreign currency exchange losses.

2.9.Other operating expenses

3.1.Guarantees, warranty obligations and collateral in favour of third parties

The following guarantees were issued for the companies listed below:

3.2.Contingent liabilities

A joint and several liability exists towards the affiliated subsidiaries under the cash pooling agreement with UniCredit Bank AG and since 2020 with UBS Switzerland AG.

3.3.Major shareholders

3.4.Derivative financial instruments

3.5.Headcount in full-time equivalents

Arbonia AG does not employ any staff.

3.6.Disclosure of shareholding

The following members of the Board of Directors and the Group Management (including related parties) held the following number of shares of Arbonia AG: