Financial statement

1.1. Consolidated balance sheet (before proposed appropriation of results)

Consolidated balance sheet, assets

Amounts x € 1,000

Consolidated balance sheet, assets
  Ref.   2018   2017
           
ASSETS          
           
Fixed assets          
           
Intangible fixed assets 1.1.1. 8,507   8,464  
Tangible fixed assets 1.1.2. 166,811   165,653  
Financial fixed assets 1.1.3. 1,134   1,134  
      176,452   175,251
           
Current assets          
           
Stock   365   469  
Receivables 1.1.4. 27,787   27,086  
Securities   41   41  
Cash   6,114   5,473  
      34,307   33,069
           
      210,759   208,320

Consolidated balance sheet, liabilities

Before the appropriation of results, amounts x € 1,000

Consolidated balance sheet, liabilities
  Ref.   2018   2017
           
LIABILITIES          
           
Shareholder equity 1.1.5.        
           
Subscribed capital   2,730   2,730  
Share premium   22,006   22,006  
Statutory translation differences   ‑262   ‑397  
Other reserves   63,789   60,834  
Unappropriated profits   9,905   5,271  
      98,168   90,444
           
Provisions 1.1.6.        
           
Deferred taxes   161   180  
Other provisions   1,305   1,457  
      1,466   1,637
           
Debts          
           
Long-term liabilities 1.1.7.   51,423   55,603
           
Short-term liabilities 1.1.8.   59,702   60,636
           
      210,759   208,320

2.1. Consolidated profit and loss account

Consolidated profit and loss account

Amounts x € 1,000

Consolidated profit and loss account
  Ref.   2018   2017
           
Net turnover 2.1.1. 152,335   122,151  
           
Sum of operating revenues     152,335   122,151
           
Costs of outsourced work and other external costs 2.1.2. 60,722   45,968  
Wages and salaries 2.1.3. 25,207   24,306  
Social security contributions   3,516   3,338  
Pension contributions   3,474   2,196  
Depreciation of intangible and tangible fixed assets 2.1.4. 14,868   14,470  
Other operating expenses (including other personnel costs) 2.1.5. 29,023   22,305  
           
Sum of operating expenses     136,810   112,583
           
Operating results     15,525   9,568
           
Interest proceeds and similar       284
Interest costs and similar     ‑2,524   ‑2,572
           
Sum of financial proceeds and costs 2.1.6.   ‑2,524   ‑2,288
           
Profit on ordinary activities before tax     13,001   7,280
Taxes on profit on ordinary activities 2.1.7.   ‑3,096   ‑2,009
           
Results after tax     9,905   5,271

3.1. Consolidated cash flow statement

Consolidated cash flow statement

Amounts x € 1,000

Consolidated cash flow statement
      2018   2017
           
Cash flow from operational activities          
           
Operating profit     15,525   9,568
           
Adjustments for:          
Depreciation on intangible and tangible fixed assets   14,868   14,470  
Changes in long-term liabilities   ‑171   ‑404  
Changes in provisions     14,697   14,066
           
Changes in stock and receivables   ‑597   ‑4,603  
Changes in short-term liabilities (excluding bank credit)   ‑4,080   7,387  
           
           
      ‑4,677   2,784
           
Paid interest   ‑1,864   ‑1,939  
Paid taxes on profit on ordinary activities   ‑1,536   ‑2,062  
      ‑3,400   ‑4,001
           
Total cash flow from operational activities     22,145   22,417
           
Cash flow from investment activities          
Investment in tangible fixed assets   ‑14,481   ‑7,765  
Investment in intangible fixed assets   ‑1,354   ‑530  
Divestment in financial fixed assets      
           
Total cash flow from investment activities     ‑15,835   ‑8,295
           
Cash flow from financing activities          
Dividend payment   ‑2,316   ‑2,953  
Change in debts to credit institutions   ‑3,353   ‑6,423  
Repayment of long-term liabilities in book year       ‑15  
           
Total cash flow from financing activities     ‑5,669   ‑9,391
           
Changes in cash and bank credit     641   4,731
           
Cash and bank credit as on 1 January     5,473   742
           
Cash and bank credit as on 31 December     6,114   5,473

Consolidated overview of the overall result

Consolidated overview of the overall result

Amounts x € 1,000

Consolidated overview of the overall result
      2018   2017
           
Consolidated net result after taxes attributable to the legal entity     9,905   5,271
           
Translation differences foreign participating interests   135   ‑397  
           
Total of the direct changes in the shareholder equity of the legal entity as part of the group equity     135   ‑397
           
Total result of the legal entity     10,040   4,874

General

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.

Shareholder structure

The RAI Association has a 75 per cent interest in RAI Holding BV. The remaining 25 per cent of the shares are held by the Municipality of Amsterdam.

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.

Intangible fixed assets

Externally obtained exhibition titles are valued at cost price or market value if lower, and are depreciated over their economic life, which is assumed to be 20 years at most.

The economic life for the IBEX exhibition title is assumed to be 15 years at most.

Software is valued at historic cost and is depreciated over its economic life, which is assumed to be ten years at most. Operating rights are valued at acquisition price and depreciated annually based on the term of these rights.

Tangible fixed assets

Tangible fixed assets are valued at their acquisition price, minus straight-line depreciation based on their economic life and minus any special depreciation.

Maintenance costs for buildings owned are immediately charged to the results, or entered as assets and depreciated if the asset criteria allow it. The depreciation calculation takes the residual value into account. This residual value is expected to be nil in all cases.

Financial fixed assets

Participating interests over which significant control is exercised over their business and financial policy are stated at their net asset value determined on the basis of the accounting principles of RAI Holding BV Participating interests over which no significant control is exercised are stated at the acquisition price or current value if lower.

Receivables from and loans to participating interests as well as other receivables are stated at the fair value in the first processing, and then valued at the amortised cost minus the necessary provisions.

Special depreciation of fixed assets

An evaluation is made each year to see whether there are any indications that intangible, tangible or financial fixed assets are subject to special depreciation. Special depreciations apply when the balance sheet value of the asset is higher than the realisable value. In case of special depreciation, the relevant asset is devalued to the realisable value. The loss is immediately processed as expense in the profit and loss accounts.

Receivables

Receivables are stated at the fair value in the first processing, and then valued at the amortised cost, which is the same as the nominal value minus any provisions for doubtful debts. These provisions are determined based on an individual assessment of the receivables.

The receivables have an expected term of up to one year, unless stated otherwise.

Stock

The stock mainly involves food & beverage products of which the valuation is determined at acquisition costs, minus a provision for obsolescence, where necessary.

Securities

Securities are stated at their cost or market value on the balance sheet date, whichever is the lower. The market value is in principle equal to the value quoted on the stock exchange. If a sale is expected in the short term, the directly realisable value is considered the market value.

Liquidities

Liquidities are at the disposal of the company.

Provisions

Provisions are included for all rightful enforceable or factual obligations resulting from an event before the balance sheet date, which are expected to require an export of capital for the fulfilment thereof and of which the scope can be reliably estimated.

A provision for long-service payments is included based on the valid long-service scheme per balance sheet date, taking into account the likelihood of continued employment, future labour cost developments and discount provisions.

A provision is included for bonus schemes and participations based on relevant performance schemes. This provision is included under current liabilities.

Pension provision

The company has two active pension schemes for its employees. Employees who started working for the company before 1 January 2013 are subject to a pension provision that qualifies as a defined benefit plan, in which the defined pension payments are based on average pay. This pension scheme has been placed with a pension insurer, and is processed in the financial statement as a defined contribution scheme due to the fact that the obligations for realising this pension scheme are entirely reinsured.

Employees who started working for the company since 1 January 2013 or those who have voluntary switched to the new pension scheme are subject to a premium scheme with the nature of a defined contribution agreement in which the company obligations are limited to making an annual contribution to the insurance company. Future payable contributions will partly depend on the development of the employment conditions and the yield on the invested contributions achieved by the insurer.

Long-term liabilities

Long-term liabilities include debts with a remaining term of over one year. These debts are stated at the fair value in the first processing, and then valued at the amortised cost.

Current liabilities

Current liabilities are stated at their fair value in the first processing and then at the amortised costs. They have an expected term of less than one year. A provision is included for bonus schemes and participations based on relevant performance schemes. There is also a provision included for contractual agreements with employees.

(Deferred) corporation tax

Temporary differences between the determination of profit for commercial and tax purposes are stated at their nominal value in the balance sheet as a tax deferral or asset. Deferred claims for corporation tax on account of tax-deductible losses are valued at the future tax rate known on the balance sheet date in so far as it can reasonably be expected that the claims are realisable.

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.

Principles for determination of results

Revenue

The financial statements have been prepared on the basis of the historical cost convention. The revenue recognition applies to all categories as specified under 2.1.1. The net turnover includes the revenue from the delivery of goods and services as specified under 2.1.1 minus discounts and the like, and turnover taxes. Revenue and expenses are accounted for in the period in which the activity is performed. For exhibitions and events this is the period in which the event takes place. Profits are accounted for in that period. Losses and risks that originated before the end of the financial year are processed if and insofar as they became known before the annual accounts were drawn up.

For participations in which the RAI plays a deciding role, the revenue and expenses are consolidated proportionally. For participations in which the RAI does not play a deciding role, the result attributable to RAI Holding BV is included.

Costs for outsourced work

Costs for outsourced work and other external costs involve the direct and indirect costs, including purchasing costs of sold catering stock that can be attributed to the turnover.

Depreciation

The depreciation on tangible fixed assets is calculated on a linear basis by reference to the expected economic life.

The applied depreciation rates are between 2% and 20%. The depreciation of the intangible fixed assets is related to the acquisition value, and ranges between 5% and 20%. Possible residual values of tangible and/or intangible fixed assets are not taken into account.

Financial revenue and expenditure

The financial revenue and expenditure involve the translation differences, interest revenue and costs attributable to the period concerned.

Participating interest results

The participating interest results concern the share of the company in the results of the net asset value of the participating interests. The share that the company is due is stated as the result of a specific participating interest in the participating interest results.

Corporation tax

The corporation tax is calculated on the commercial pre-tax profit, taking into account the tax facilities. The mutation in the provision for deferred corporation tax is taken into account in the calculations.

It is continuously evaluated whether the financial reporting should or could be adapted in the framework of new fiscal legislation. 

Cash flow statement

The cash flow statement has been drawn up in accordance with the indirect method. The resources in the cash flow statement consist of liquidities.

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.

 

Notes on the consolidated balance sheet as on 31 December 2018

1.1.1. Intangible fixed assets

Intangible fixed assets

Amounts x € 1,000

Intangible fixed assets
  Exhibition titles Software Other Work in
progress
Total
           
Cost as on 1-1-2018 6,199 9,025 1,684 398 17,306
Finished work in progress - 102 - ‑102
Acquisitions 476 878 1,354
Translation differences 263 263
Divestments ‑716 ‑716
Cost as at 31-12-2018 6,462 8,887 1,684 1,174 18,207
           
Depreciation and amortisation as on 1-1-2018 962 6,652 1,228 8,842
Depreciation 391 1,005 53 1,449
Translation differences 28 - - - 28
Divestments ‑619 - ‑619
Depreciation and amortisation as on 31-12-2018 1,381 7,038 1,281 9,700
           
Book value as on 1-1-2018 5,237 2,373 456 398 8,464
           
Book value as on 31-12-2018 5,081 1,849 403 1,174 8,507

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

Tangible fixed assets

Amounts x € 1,000

Tangible fixed assets
  Buildings,
installations
and land
Inventory Work in
progress
Total  
           
Cost as on 1-1-2018 335,615 29,071 5,051 369,737  
Investments 1,003 566 12,912 14,481  
Finished work in progress 3,267 107 ‑3,374  
Divestments ‑530 ‑760 ‑1,290  
Cost as on 31-12-2018 339,355 28,984 14,589 382,928  
           
           
Depreciation and amortisation as on 1-1-2018 180,688 23,396 204,084  
Depreciation 11,190 2,132 13,322  
Divestments ‑530 ‑759 ‑1,289  
Depreciation and amortisation as on 31-12-2018 191,348 24,769 216,117  
           
Book value as on 1-1-2018 154,927 5,675 5,051 165,653  
           
Book value as on 31-12-2018 148,007 4,215 14,589 166,811  

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

Financial fixed assets

Amounts x € 1,000

Financial fixed assets
  Total        
           
Balance as on 1-1-2018 1,134        
Other changes        
           
Balance as on 31-12-2018 1,134        

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

Current assets, receivables

Amounts x € 1,000

Current assets, receivables
  2018 2017      
           
Trade receivables 17,567 15,839      
Allowance for doubtful debts ‑1,707 ‑1,280      
  15,860 14,559      
Other receivables 5,762 4,449      
Receivables from shareholders 384      
Accrued assets 6,165 7,694      
           
  27,787 27,086      

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

Provisions

Amounts x € 1,000

Provisions
  Deferred
taxes
Other Total    
           
Balance as on 1-1-2018 180 1,457 1,637    
Allocation 209 538 747    
Withdrawal ‑228 ‑690 ‑918    
           
Balance as on 31-12-2018 161 1,305 1,466    

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

Long-term liabilities

Amounts x € 1,000

Long-term liabilities
  2018 2017      
           
Loans Deutsche Bank AG 22,000 24,000      
Loan Coöperatieve Rabobank Amsterdam U.A. 22,000 24,000      
Loan Triodos Bank 224 239      
Loan Klimaatfonds Amsterdam 100 100      
Other liabilities 7,099 7,264      
           
  51,423 55,603      

Overview of long-term loans

Per 31 December 2018, Amounts x € 1,000

Overview of long-term loans
  Principle Payment in
book year
Amount
remaining
   
           
Loan Deutsche Bank AG 26,000 2,000 24,000    
Loan Coöperatieve Rabobank Amsterdam U.A. 26,000 2,000 24,000    
Loan Triodos Bank 253 15 238    
Loan Klimaatfonds Amsterdam 100 100    
Other liabilities 8,043 165 7,878    
           
  60,396 4,180 56,216    
Minus short-term part of long-term liabilities 4,793   4,793    
           
  55,603   51,423    

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

Current liabilities

Amounts x € 1,000

Current liabilities
  2018 2017      
           
Bank overdrafts 4,604 3,777      
Short-term part of long-term liabilities 4,793 4,793      
Advance payments 22,380 25,134      
Debts to suppliers 5,219 4,459      
Corporation tax 1,724 175      
Other taxes and social security contributions 1,523 1,732      
Accruals and deferred income 19,459 20,566      
           
  59,702 60,636      

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.

Credit risk

In order to manage the credit risk, exposure is constantly monitored and acted upon. There was no major concentration of credit risks at the end of the financial year. Credit risks relate to debtors and other short-term receivables. Sufficient provisions were included accordingly.

Currency risk

There are no substantial currency risks as the operational cash flows and financing activities mainly take place in euros.

There is an overdraft facility agreement with Coöperatieve Rabobank Amsterdam U.A. to a maximum amount of US$ 6.7 million for which the company faces a currency risk.

Interest risk

Interest risks mainly concern long-term loans. RAI Amsterdam BV has interest rate swap contracts to cover interest risks. In order to cover the interest risk RAI Amsterdam BV has concluded interest swap contracts. In order to fix the interest rates, interest rate swaps amounting to € 40 million at the end of 2018 were concluded in 2013 for the period until 2020. RAI Amsterdam BV pays an interest rate of 1.54% on the interest swap with Deutsche Bank AG/Coöperatieve Rabobank Amsterdam U.A. A variable interest rate of three months Euribor plus an individual surcharge is paid on the bank overdrafts. The amounts covered by the interest swaps are smaller than or equal to the outstanding principle of the loans from Deutsche Bank AG/Coöperatieve Rabobank Amsterdam U.A. On 31 December 2018, the interest swaps had a fair value of minus € 1,180,692 (2017: minus € 1,801,264). The nominal value will be reduced to zero over the remaining interest swap period (until 2020).

Notes on the consolidated profit and loss accounts 2018

2.1.1. Turnover

Turnover

Amounts x € 1,000

Turnover
  2018 2017      
           
By geographical area          
           
The Netherlands 147,572 115,584      
Other countries 4,763 6,567      
           
  152,335 122,151      
           
By activity          
           
Letting to third parties 29,473 23,761      
Exhibition events 39,909 29,109      
Catering 20,864 17,931      
Hotel commissions 3,432 2,743      
Parking 6,554 5,735      
Facility Services 19,603 17,112      
Interior 17,781 12,898      
Building-related letting 11,239 10,465      
Other 3,480 2,397      
           
  152,335 122,151      

2.1.2. Costs of outsourced work or other external costs

Costs of outsourced work or other external costs

Amounts x € 1,000

Costs of outsourced work or other external costs
  2018 2017      
           
Accommodation 4,091 5,088      
Catering 9,922 8,257      
Outsourcing costs 14,039 5,427      
Marketing costs 2,223 3,702      
Organisation costs 2,007 1,194      
Safety & security costs 4,018 1,711      
Facility 19,919 16,355      
Other 4,503 4,234      
           
  60,722 45,968      

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).

Average number of employees

In FTE, working for the group

Average number of employees
  2018 2017      
           
In the Netherlands 383 376      

Personnel, by discipline

Percentage / FTE (balance at the end of the year)

Personnel, by discipline
  2018 2017      
           
BY DISCIPLINE          
           
Commercial 48% 53%      
Operational 39% 35%      
Financial/management 13% 12%      
Total 100% 100%      

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

Other operational costs

Amounts x € 1,000

Other operational costs
  2018 2017      
           
Consultancy costs 1,387 1,236      
Automation costs 4,443 4,357      
Agency costs 1,472 799      
Building and accommodation 6,099 5,404      
Marketing 1,660 1,478      
Other costs 2,581 1,376      
Maintenance 4,452 3,940      
Temporary personnel 3,500 1,725      
Other personnel costs 2,895 1,572      
Travel and representation costs 534 418      
           
           
  29,023 22,305      

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

Interest revenue and expenses and similar

Amounts x € 1,000

Interest revenue and expenses and similar
  2018 2017      
           
Interest proceeds and similar 284      
Interest costs and similar ‑2,524 ‑2,572      
           
Interest costs and similar in the profit and loss account ‑2,524 ‑2,288      

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

Taxes

Amounts x € 1,000

Taxes
  2018 2017      
           
Deferred corporation tax ‑20 ‑352      
Acute corporation tax for current book year 3,115 2,317      
Corporation tax for previous years 44      
           
Tax charged in the profit and loss account 3,096 2,009      

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. Company balance sheet (before appropriation of results)

Company balance sheet

Before appropriation of results, amounts x € 1,.000

Company balance sheet
ASSETS ref.   2018   2017
           
Fixed assets          
           
Financial fixed assets 4.1.1. 90,380   80,340  
           
Receivables from group companies 4.1.3. 7,964   11,367  
      98,344   91,707
           
LIABILITIES          
           
Shareholder equity 4.1.2.        
           
Issued capital   2,730   2,730  
Share premium   22,006   22,006  
Statutory translation reserve   ‑262   ‑397  
Other reserves   63,789   60,834  
Unappropriated profit   9,905   5,271  
      98,168   90,444
           
Debts          
Debts to credit institutions     176   1,263
Debts to group companies 4.1.3.    
           
      98,344   91,707

5.1. Company profit and loss account

Company profit and loss account

Amounts x € 1,000

Company profit and loss account
  2018 2017      
           
Company result after taxes      
Result from participating interests after taxes 9,905 5,271      
           
Net result 9,905 5,271      

The company profit and loss account has been drawn up in accordance with Article 402 of Book 2 of the Netherlands Civil Code.

The financial data of RAI Holding BV is included in the consolidated annual account. As a result, the profit and loss account of RAI Holding BV only states the share in profits after taxation of participating interests and the other result after taxes, in accordance with Article 402 of Book 9 of the Netherlands Civil Code.

Notes on the company balance sheet as on 31 December 2018

4.1.1. Financial fixed assets

Financial fixed assets

Amounts x € 1,000

Financial fixed assets
  Participation in
group companies
     
         
Balance as on 1-1-2018 80,340      
Statutory translation reserve 135      
Other changes      
Result 9,905      
         
Balance as on 31-12-2018 90,380      

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

Shareholder equity

Amounts x € 1,000

Shareholder equity
  Share capital Share
premium
Statutory exchange reserve Other
reserves
Unapprop. profit Total
             
Balance as on 01-01-2017 2,730 22,006 58,070 5,048 87,854
Appropriation of result 5,048 ‑5,048
Statutory translation reserve ‑397 ‑397
Result book year 5,271 5,271
Dividend ‑2,284 ‑2,284
             
Balance as on 12-12-2017 2,730 22,006 ‑397 60,834 5,271 90,444
             
Balance as on 01-01-2018 2,730 22,006 ‑397 60,834 5,271 90,444
Correction opening balance 5,271 ‑5,271
Result appropriation 135 135
Statutory translation reserve 9,905 9,905
Result book year ‑2,316 ‑2,316
Dividend            
  2,730 22,006 ‑262 63,789 9,905 98,168

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

Receivables from group companies

Amounts x € 1,000

Receivables from group companies
  Debts to group companies      
         
Balance as on 1-1-2018 11,367      
Dividend payment ‑2,316      
Dividend      
Other changes ‑1,087      
         
Balance as on 31-12-2018 7,964      

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

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.