RAI Holding BV has its registered office in Amsterdam (Europaplein 24), Chamber of Commerce number 33093880. The company’s financial year runs from 1 January to 31 December.

Activities

RAI Holding BV is a holding company. The main activities of the RAI are accommodating RAI-organised events, and providing facilities to third parties for exhibitions, conferences, corporate events, theatre productions and niche events.

Continuity

These consolidated financial statements have been prepared assuming that the company will continue as a going concern.

General principles for valuation

The annual accounts were drawn up in accordance with the generally accepted principles for financial reporting in the Netherlands and meet the legal provisions regarding the annual accounts as recorded in Title 9, Book 2 of the Netherlands Civil Code (BW). The principles for the valuation of assets and liabilities were applied consistently during the previous and current year. The principles for valuation and result determination apply to both the consolidated and company annual accounts.

Principles of consolidation

The financial data of RAI Holding BV and all its group companies are consolidated. Group companies are participations over which RAI Holding BV has decisive control. The other participating interests are not consolidated.

The financial information of companies acquired during the year under review is consolidated from the moment that RAI Holding BV acquires decisive control over the companies concerned until the moment this control is terminated. Transactions between companies that are consolidated are eliminated.

The company owns 100% of the shares in the following participations: RAI Amsterdam BV, Amsterdam; Arfora BV, Amsterdam.

These group companies include the results of the following indirect participations (100%): RAI Solar Energy BV, Amsterdam; RAI USA, Inc., Delaware; Rui Ang Exhibition and Convention Co., Ltd., Shanghai; RAI TURKEY ULUSLARARASI FUARCILIK VE GOSTERI HIZMETLERI ITHALAT IHRACAT TICARET LIMITED SIRKETI, Istanbul. The company in Turkey was established in 2016. In addition, it includes the result of the following indirect participation (50%): IBEX LLC, Maine USA.

Amsterdam RAI Catering BV was liquidated on 12 July 2018. The entity did not realise any turnover or costs in recent years. The assets and liabilities of Amsterdam RAI Catering BV were nil.

Functional currency

The items in the annual accounts of the group companies are valued in accordance with the currency of the economic environment in which the group company mainly performs its activities (the functional currency). The consolidated annual accounts were drawn up in euros; the functional and presentation currency of RAI Holding BV.

Transactions, receivables and liabilities

Transactions in foreign currencies are converted at the exchange rates at the time of the transaction.

Monetary assets and liabilities are converted into the functional currency at the exchange rates on the balance sheet date. The resulting translation differences are included in the profit and loss account, unless hedge accounting is applied.

Non-monetary assets that are valued in a foreign currency at acquisition cost are converted at the exchange rates valid at the time of transaction

Non-monetary assets valued in a foreign currency at the current value are converted at the exchange rates which applied at the time the current value was determined.

Translation differences in long-term inter-group loans which are actually an expansion or reduction of the net investment of foreign participations will be credited or charged directly to the equity in the statutory translation differences reserve.

If loans were entered into in a foreign currency to finance or cover the net investment in a foreign participation, the translation differences that result from the loan will be processed in the statutory translation differences reserve insofar as the loan is effective as coverage for the translation differences on the net investment in the foreign participation.

The assets and liabilities of the participations included in the consolidation at a functional currency that is different than the presentation currency will be converted at the exchange rates on the balance sheet date. The profits and losses are converted at the exchange rates at the time of transaction.

The resulting translation differences will be credited or charged directly to the equity in the statutory translation differences reserve.

Use of estimates

In order to help determine the included figures when drawing up the annual accounts, the management of RAI Holding BV makes certain estimates and suppositions in accordance with the generally accepted principles of financial reporting. The factual results can deviate from these estimates.

The estimates and underlying suppositions are regularly evaluated. Revisions of estimates are recorded in the period in which the estimate is revised and in future periods that are affected by the revision.

Financial tools

Financial tools include both primary financial tools such as receivables or debts, and financial derivatives. For the principles of the primary financial tools, see the description per balance sheet item.

RAI Holding BV applies hedge accounting based on documentation for each individual hedge relation, and documents how the hedge relations fit in with the goals of the risk management, hedge strategy and the expectations regarding the effectiveness of the hedge.

The effective part of the financial derivatives assigned to cost-price hedge-accounting is valuated at cost value and the ineffective part is valuated at fair value. The valuation changes of the fair value of the ineffective part are immediately processed in the profit and loss account.

Principles for the valuation of assets and liabilities

The assets and liabilities are valued at nominal value unless the notes for the individual items indicate otherwise.

RAI Holding BV is the leading company of a group that is treated as a single entity for tax purposes. The other members of the group are: RAI Amsterdam BV, RAI Solar Energy BV and Arfora BV.

Comparative figures

To ensure transparency and comparability, the comparative figures over 2017 have been adjusted. The adjustment involves the categorisation of various items in the profit and loss accounts. The adjustments do not affect the balance sheet.

The adjustments in categorisation involve the re-categorisation of the costs for outsourced work and other external costs to the turnover at an amount of € 1.1 million and a re-categorisation of the costs for outsourced work and other external costs to the other operational costs (including other personnel costs) at an amount of € 3.8 million.

1.1.1. Intangible fixed assets

Investments in exhibition titles are depreciated over a maximum period of 20 years. An impairment test on titles that were externally acquired in the past is performed annually. Software is depreciated over a period of ten years at most, calculated from the time it is first used.

The ‘other’ category primarily concerns the use of a lounge in the Amsterdam ArenA. These rights will be depreciated until the year 2026. Divestments are related to assets that are no longer used. The work in progress involves investments in software for projects that has not yet been taken into use.

1.1.2. Tangible fixed assets

Buildings and land are depreciated over a period of 50 years, the Convention Centre over a period of 20 years, and installations over a period of 10 to 20 years. The other fixed assets are depreciated over a period of five to 20 years.

In 2017 the RAI renewed its long-term land lease retroactively from 1 November 2016. The paid land lease until 2066 amounts to € 3,157,434 (2017: € 3,223,443).

Divestments are related to fixed assets that are no longer used. The paid land lease is depreciated over the entire canon period until 2066.

1.1.3. Financial fixed assets

The financial fixed assets refer to a capital interest in Stadion Amsterdam CV of 1/9 share of the limited capital. The valuation of this capital interest is valued at the acquisition price or current value if lower.

1.1.4. Current assets, receivables

The trade receivables include, among other items, receivables for future events to an amount of € 7,657,252 (2017: € 9,687,487).

The other receivables include, among other items, yet to be billed invoices to an amount of € 2,814,695 (2017: € 3,700,756).

The accrued assets include, among other items, costs paid in advance to the amount of € 898,059 (2017: € 1,004,825) and paid personnel costs for future exhibitions to an amount of € 5,286,222 (2017: € 5,833,054).

1.1.5. Shareholder equity

For an explanation of the mutations in the shareholder equity in 2018 and 2017 see the notes on the company annual accounts of RAI Holding BV (see 4.1.2.).

1.1.6. Provisions

The passive deferred tax consists of the differences between commercial and tax-based valuation.

The other provisions mainly involve a provision for long-service payments and other personnel-related provisions. The above provisions are primarily of a long-term nature.

1.1.7. Long-term liabilities

In 2013 the RAI entered into a credit agreement with Deutsche Bank AG and Coöperatieve Rabobank Amsterdam U.A. This credit agreement comprises an overdraft facility of €30 million as well as two loans totalling €48 million (50% Deutsche Bank AG and 50% Coöperatieve Rabobank Amsterdam U.A.) until 2020.

In 2016 the RAI established an additional credit facility with Deutsche Bank AG and Coöperatieve Rabobank Amsterdam U.A., consisting of a current account of US$ 6.7 million at Coöperatieve Rabobank Amsterdam U.A. As part of this agreement, it was agreed that the current account of Coöperatieve Rabobank Amsterdam U.A. is reduced by €3 million and the current account of Deutsche Bank AG is increased by €3 million. This way both banks are a 50% credit provider. The current account of US$ runs until 2020 and is reduced every six months by US$ 831,250 as of 1 July 2018.

The rate of interest on the loans is Euribor + 1.70%.

In 2013 the RAI entered into an interest swap agreement, based on which RAI Holding BV pays an interest rate of 1.54% over an amount of € 40 million.

The business premises at Europaplein have been mortgaged as security for the repayment of the long-term debts and overdraft facility.

A credit agreement with the Triodos Bank for the financing of solar panels was concluded in 2014. It consists of a loan of €0.29 million for the period until 1 January 2034. The loan is being repaid in 79 quarterly terms, starting 1 July 2014. The interest rate is 3.5% on an annual basis for the period until 17 January 2026.

A credit agreement to finance solar panels was concluded with the Amsterdam Investment Fund of the Municipality of Amsterdam in 2014. It consists of a loan of €0.1 million for the period until 5 March 2029. The loan will be repaid at the latest by 5 March 2029 and the interest rate is 0%.

The other long-term liabilities concern a lump-sum payment received in 1988 from the Municipality of Amsterdam for the operating losses of the Convention Centre in the period until 2038. This lump-sum payment was acquired in the past for an interest of 7.46%. This lump-sum payment is mainly of a long-term nature. The release benefits the operational costs. The annual interest increase is at the expense of the financial revenue and expenditure.

Of the long-term liabilities, a total of €6.6 million has a term of over five years.

1.1.8. Current liabilities

The accrued liabilities largely consist of receivable invoices for incurred costs of €12,933,134 (2017: €9,447,463) and accrued liabilities related to personnel to an amount of €4,806,567 (2017: €3,658,216).

Off-balance sheet information

1. In 2017 an agreement was reached between COD/Being Development and the RAI for a rental contract for the parking garage of the nhow Hotel. The rental contract will start as soon as the parking garage is delivered in 2020 and has a term of 20 years. The initial rental cost is €650,000 a year and it will be indexed annually. The total contractual obligation is €13,000,000. Based on the expected delivery, an amount of €0 is due within one year, and an amount of €2,437,500 is due within 5 years. The remainder involves the period 2024 to 2039 (2017: none).
2. No bank guarantees were issued (2017: none).
3. There are operational lease commitments for 36 (2017: 38) cars. At the end of the financial year the contractual commitments totalled €602,540 (2017: €955,680), of which €241,478 is due within one year. The remainder is due within five years.
4. A total of €582,592 (2017: €569,671) in lease payments was made in 2018.
5. In 2017 an agreement was reached with the Municipality of Amsterdam, Land Lease and Land Issuance and Development department on an advanced change of the long-term land lease agreement. The new agreement has a term of 50 years until 30 October 2066. The available part of the capitalised acquired long-term land lease as of 1 November 2016 will be depreciated over the new term of 50 years. The total liability for long-term land lease (until 2066) is €12,716,823 of which an amount of €259,526 is due within one year, and an amount of €1,297,631 is due within 5 years. The remainder involves the period 2024 to 2066. The amounts due are indexed annually.
6. RAI Holding BV is the leading company of a group that is treated as a single entity for corporation and turnover tax purposes. The other members of the group are: RAI Amsterdam BV, RAI Solar Energy BV and Arfora BV. Each company is severally liable for the liabilities of the fiscal entity.

Financial tools

The risks associated with the financial tools are clarified below.

2.1.1. Turnover

2.1.2. Costs of outsourced work or other external costs

2.1.3. Personnel costs

The salary (including benefits) paid to Board members (2) in 2018 totalled € 749,173 (in 2017: € 716,323).

The salary paid to Supervisory Board members (4) amounted to € 99,744 (in 2017: € 92,713, average of 4).

2.1.4. Depreciation on intangible and tangible fixed assets

The depreciation on intangible and tangible fixed assets costs of € 13.9 million in regular depreciations and € 1.0 million in book losses on divested tangible fixed assets.

2.1.5. Other operational costs

Auditors’ costs
In accordance with Article 382a Book 2 of the Netherlands Civil Code, an amount of € 125,000 (2017 BDO Audit & Assurance: € 103,399) is due to Deloitte Accountants BV in the book year, of which € 125,000 (2017 BDO Audit & Assurance: € 100,000) relates to the annual audit and € 0 to other audit assignments.

2.1.6. Interest revenue and expenses and similar

The interest costs and similar consist of € 2,475,630 in owed interest and € 48,548 in costs from exchange results.

2.1.7. Taxes

The effective taxation rate over 2018 is 25.3% (2017: 27.6%) which is in line with the generally applicable tax rate in the Netherlands.

4.1.1. Financial fixed assets

The company owns 100 percent (unless otherwise stated) of the shares in the following major participations: RAI Amsterdam BV, Amsterdam; Arfora BV, Amsterdam.

The results of these group companies include those of the following indirect participations (100%): RAI Solar Energy BV, Amsterdam; RAI USA, Inc., Delaware; Rui Ang Exhibition and Convention Co., Ltd., Shanghai and RAI TURKEY ULUSLARARASI FUARCILIK VE GOSTERI HIZMETLERI ITHALAT IHRACAT TICARET LIMITED SIRKETI, Istanbul.

4.1.2. Shareholder equity

The authorised capital is €13,650,000, divided into 225,000 ordinary ‘A’ shares and 75,000 ordinary ‘B’ shares, each having a nominal value of €45.50. Of these, 45,000 ‘A’ shares and 15,000 ‘B’ shares have been issued and fully paid up.

4.1.3. Receivables from group companies

The determined dividend is paid via the subsidiary RAI Amsterdam BV to the shareholders and charged to RAI Holding via a current account relationship. No interest applies to receivables from group companies.

Personnel

As was the case in 2017, the company did not employ any staff in 2018.

Off-balance sheet information

Letters of liability in accordance with Article 403 of Book 2 of the Netherlands Civil Code have been issued and deposited for the participating interests in RAI Amsterdam BV, Amsterdam RAI Catering BV (until its liquidation on 12 July 2018) and RAI Solar Energy BV.

Amsterdam, 26 March 2019

Executive Board of RAI Holding BV

P. (Paul) Riemens, CEO
M. (Maurits) van der Sluis, COO

Supervisory Board of RAI Holding BV

R.H. (Roelf) de Boer, chair
J.W.Th. (John) van der Steen, vice-chair
W.C.M. (Mariëlle) de Macker
A.M.H. (Annemarie) Macnack - van Gaal

Proposed appropriation of profit

The general meeting of shareholders is proposed to pay a dividend of € 2.356 million over 2018. The result after tax over 2018 is included in the unappropriated profit item under shareholder equity.

Events after the balance sheet date

None.