Notes to the Financial Statements

These financial statements 2024 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.

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.

Financial assets consist of 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).

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.

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.

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).

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.

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. The first extension option was exercised in 2021 and the second in 2022, so that the term now runs until 2027.

Arbonia has taken out a bridge loan of EUR 100 million to finance acquisitions. The outstanding bridge loan of EUR 80 million is to be repaid in full once the sale of the Climate Division has been completed.

Maturity structure

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

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 2023) as capital contribution within the meaning of article 5 para. 1bis VStG.

Financial income totals CHF 27.3 million (2023: CHF 34.6 million) and consists mainly of interest income on loans to shareholdings and foreign currency exchange gains.

Financial expenses totals CHF 20.7 million (2023: CHF 12.4 million) and consists mainly of bank interest and foreign currency exchange losses.

The following guarantees were issued for the companies listed below:

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

The foreign currency risks on part of the expected cash inflow in connection with the sale of the Climate Division were hedged with a transaction-related CHF/ EUR foreign currency forward (Deal Contingent Forward) with a nominal value of EUR 400 million. Maturity, currency and nominal amount match the hedged transaction. The valuation of the derivative as of 31 December 2024 amount to CHF 5.2 million. As this is a hedge transaction, it is not measured at fair value but disclosed in the notes. The hedge is recognised when it matures (at closing sale Climate Division).

Arbonia AG does not employ any staff.

The Board of Directors, Group Management and employees were granted the following participation rights: