FINANCIAL REPORT - Kuoni Travelcr.kuoni.com/docs/02_financialreport_complete_e_0.pdf · 132 | 133 Kuoni AnnuAl RepoRt # 2011 Kuoni GRoup 02 – FinAnciAl RepoRt 02_00_01_ 1 Kuoni

02_

50 [ 3.000.000 ]

49 [ 40.000.000 ]

48 [ 660.000 ]

43 [ 90.000 ]

45 [ 1963 ]

40 [ 34.000 ]

39 [ 21 ]37 [ 2.856.000 ]

47 [ 7.000 ]

44 [ 44 ]

31 [ 952.000 ]

38 [ 163 ]36 [ 11 ]35 [ 63 ]

33 [ 7.000 ]

28 [ 9 ]

34 [ 100 ]

25 [100 ]

30 [ 240.261 ]

21 [ 24 ] 19 [ 90 ]

18 [ 12 ]

12 [ 100.000.000 ] 14 [ 38.400 ]

10 [ 1 ]

22 [ 350485 ]

24 [ 3.400.000 ]

32 [ 20 ]

27 [ 16.300 ]

16 [ 106 ]17 [ 58 ]

13 [ 14 ]

05 [ 632 ]

08 [ 47.2 ] 6 [ 250.000 ] 07 [ 400 ]

03 [ 4.038.286 ]

02 [ 41.000.000 ]

01 [ 11.000 ]

04 [ 66 ]

09 [ 1972 ]

23 [ 7 ]

26 [ 87 ]

29 [ 1.546 ]

41 [ 526 ]

46 [ -14.9 ]

15 [ 3 ]

11 [ 23.501 ]

20 [ 8.636.034 ]

42 [ 2.404 ]

FINANCIAL REPORT

0 2 – F I N A N C I A L R E P O R T

K U O N I A N N U A L R E P O R T # 2 0 1 1

K U O N I G R O U P

[ Average number of employees in 2011 ][ Visa applications by VFS Global in 10 years ][ Customers worldwide ][ Kuoni hotels in the Maldives ][ Pages in annual report ][ Images in global picture archive ][ Daily number of Japanese visiting Paris with Kuoni ][ Average age of group management ][ Year of stock exchange listing ][ Group CEO ][ Pages in Swiss catalogues ][ Rail kilometres travelled by CH rail specialists in 2011 ][ Flagship Stores ][ Annual number of employee meals at Kuoni headquarters ][ Company-owned aircraft / Novair ][ Years in the travel business ][ Background stories on the group’s intranet page in 2011 ][ Opening of remodelled Kuoni travel stores in Switzerland ][ Kuoni hotels with Travelife Award ][ Visa applications by VFS Global in 2011 ][ Kuoni Academy training centres in India ][ Security number of Kuoni registered shares B ][ Members of the Board of Directors ][ Google search results ][ % of CO2-compensated business trips by employees ][ Destinations ][ Tonnes of waste recycled by Kuoni/myclimate in Bali ][ Pages in the Kuoni Code of Conduct ][ Children supported by Kuoni projects ][ Kuoni Facebook “Likes” ][ Number of registered shares A ][ Kuoni No. 1 Travel Bags ][ Dinners in Burj al Arab organised by Kuoni in 2011 ][ Kuoni travel stores in Switzerland ][ Countries where the Kuoni Group is active ][ Times in a row “World’s Leading Tour Operator” ][ Number of registered shares B ][ Number of Kuoni travel stores worldwide ][ Volunteering offers by Kuoni Switzerland ][ GTS clients: travel agencies, tour organisers, online portals ][ VFS Global Visa Centres worldwide ][ Employees of VFS Global ][ Hotels available on Octopus.com ][ % of women in middle and senior management ][ Kuoni opens its first branch in Japan ][ % of US dollar’s drop against the CHF in 2011 ][ Overnight stays in Italy with GTS per day ][ GTS division bookings in 2011 ][ Daily queries in GTS databases ][ Annual overnight stays of GTS groups in Europe ]

010203040506070809101112131415161718192021222324252627282930313233343536373839404142434445464748495050 facts and figures for the Kuoni Group in 2011

0 2 – F I N A N C I A L R E P O R T

K u o n i A n n u A l R e p o R t # 2 0 1 1

K u o n i G R o u p

Corporate Governance 258

Introduction 259

Group Structure and Shareholders 260

Capital Structure 261

Board of Directors 268

The Group Executive Board 280

Compensation, Shares and Loans 281

Shareholders’ Participation Rights 282

Changes of Control and

Defence Measures 285

Auditors 286

Information Policy 287

Compensation Report 292

Appendix 312

Agenda 2012 313

FinAnciAl RepoRt 132

Kuoni Principles (2) 133

The topic of Continuity 134

Comment Financial Report (Group) 136

Five-Year Summary of Key Data 158

Pro Forma Figures 162

Kuoni Group 166

Statement of Financial Position 167

Income Statement 168

Statement of Comprehensive Income 169

Statement of Changes in Equity 170

Statement of Cash Flows 171

Accounting Principles 172

Notes to the Consolidated

Financial Statements 179

Principal Subsidiaries and Associates 230

Report of the Statutory Auditor 234

Kuoni Travel Holding Ltd. 238

Statement of Financial Position 239

Income Statement 240

Notes 241

Board of Directors’ Proposal for the

Appropriation of Retained Earnings 253

Report of the Statutory Auditor 254

02_06_

02_06_00_

02_06_01_

02_06_02_

02_06_03_

02_06_04_

02_06_05_

02_06_06_

02_06_07_

02_06_08_

02_06_09_

02_06_10_

02_07_

02_07_01_

02_

02_00_01_

02_00_02_

02_01_

02_02_

02_03_

02_04_

02_04_01_

02_04_02_

02_04_03_

02_04_04_

02_04_05_

02_04_06_

02_04_07_

02_04_08_

02_04_09_

02_05_

02_05_01_

02_05_02_

02_05_03_

02_05_04_

02_05_05_

130 | 131

132 | 133 K u o n i A n n u A l R e p o R t # 2 0 1 1

K u o n i G R o u p

0 2 – F i n A n c i A l R e p o R t

02_00_01_

1 Kuoni has been helping to shape the travel industry since 1906 and it has always focused on meeting cus-tomers’ needs, expanding its services and staying ahead of the times. A pro-nounced commitment to service is a firmly established part of the com-pany’s tradition.

The prerequisites for the company and the environment in which it operates may change, but Kuoni’s reliability as a tour operator makes it a safe bet, of-fering its customers certainty, trans-parency and honesty. This continuity is still one of Kuoni’s distinguishing factors, forming a solid foundation for the future of travel.

Kuoni PrinciPles (2)

« Business comes and goes.+

Unlike a company rooted in tradition, but existing in time.

=

Its name stands for only one thing: continuity.1 »

Financial rePort


K u o n i G R o u p


02_00_02_

nuity.Conti ■■■■ committed to continuity.

Over the course of more than a hun-dred years Kuoni has coped with nu-merous negative influences and re-sponded early to trends as they have emerged. To master crises and keep moving forward, it is vital to take a flexible approach to changing market situations and requirements, and to invest in areas with potential for the future. Kuoni does this, guided by con-stant, timeless values such as reliabi-lity, passion and authenticity.

2011 was another year characterised by negative external influences. There was political turmoil in Arabic coun-tries, a serious earthquake followed by a tsunami and a nuclear disaster in Japan, floods in parts of Thailand and a debt crisis in Europe. Tourism has always been dependent on external fac-tors that vary from year to year. Wheth-er it’s political turbulence, environ-mental disaster or economic change, Kuoni keeps to its principles, reacts re-sponsibly to the challenges that come, invests, acts anticyclically when it has to, and always does its best to produce sustainable, profitable results.

Kuoni is here For the long term.

Travel (ling)

Financial rePort


K u o n i G R o u p


The United Nations World Tourism Or-ganization (UNWTO) has projected the following regional growth rates for international arrivals in 2011 (source: UNWTO, January 2012):

Europe: 6.0%

Asia-Pacific: 5.6%

Americas: 4.2%

Africa: 0.0%

The Middle East: – 8.0%

Worldwide: 4.4%

The International Monetary Fund (IMF) has projected global economic growth of 3.8% for 2011 (source: IMF World Economic Outlook Update, Janu-ary 2012), 1.4 percentage points less than the previous year. Once again, the emerging nations were the prime growth drivers (China 9.2%, India 7.4%, Russia 4.1%, Brazil 2.9%), though even these countries faced a less posi-tive economic climate than they had enjoyed in 2010. Growth in the deve-loped markets (Switzerland 1.9%, USA 1.8%, euro zone 1.6%, UK 0.9%) was clearly compromised by the current debt crisis.

investors and consumers. Against this background, the emerging markets continued to be the driving force of global economic growth. The uncertainties over the ramifications of the government debt crisis in Europe had a number of negative effects, including increased volatility in the exchange rates of various currencies against the Swiss franc, which reached new highs in euro and US dollar terms until the Swiss National Bank intervened on 6 September.

■■■■ GloBAl touRiSt SectoR deFieS muted economic GRoWtH

Despite a worldwide economic situation that was far from bright and despite further unforeseen unfavourable events, the global tourism sector showed largely positive trends. The United Nations World Tourism Organization (UNWTO) expects international arrivals for 2011 to show a 4.4% growth (source: UNWTO, January 2012), continuing the general recovery of the tourist sector that was first felt the previous year. The tsunami and subsequent nuclear crisis in Japan as well as the political upheavals in North Africa and the Arabian Peninsula all had a tangible effect on the tourism sector. Higher costs, meanwhile – especially through rising oil prices – weighed heavily on the already narrow margins of the fiercely competitive leisure travel segment. The political developments in North Africa also help explain the regional shifts in recent market growth, which has seen a narrowing in rates between mature and emerging markets after the latter had served as the prime mover in global tourism development over the past few years. With the exception of the Middle East and North Africa, all the world’s regions reported positive tourism growth. Arrivals in Europe saw an above-average increase, as Southern Europe attracted more tourists seeking alternative destinations in the light of the unrest in North Africa and the Arabian Peninsula. Asia, too, posted a positive overall trend, despite the Japanese disaster.

■■■■ SuBStAntiAl incReASe in tuRnoVeR And eARninGS

The Kuoni Group delivered an encouraging business performance for 2011 in a very challenging market environment. Thanks to increased turnover and despite the one-off costs associated with the acquisition and integration of Gullivers Travel Associates (GTA), the net result for the year was a clear improvement on 2010. With the depressed general economic climate and the political upheavals in the Arab world, the market environment proved far from easy in 2011, especially for European tour operating activities. Nevertheless, the Kuoni Group posted turnover for the year of CHF 5 111 million, a 28% nominal increase on 2010. The effect of a strongly appreciating Swiss franc eroded 8.3% of the Group turnover. Acquisitions raised Group turnover by 35%. Organic turnover growth amounted to 1.2%, and was driven by the continued sizeable expansion of business within Division Destinations and in the Group’s Asian and VFS Global activities. Earnings before interest and taxes (EBIT) amounted to CHF 74.2 million, a 27% improvement on the CHF 58.4 million of the previous year. EBIT net of the costs of the investment and cost-reduction programme, ordinary amortisation of acquisition-related intangible assets and the one-off costs associated with the acquisition and integration of GTA, stood at CHF 168.9 million (compared to CHF 127.1 million in 2010). The net Group result for the year amounted to CHF 33.3 million (compared to CHF 23.2 million for 2010).

■■■■ RiSinG unceRtAintieS on tHe FinAnciAl mARKetS SloWinG

GloBAl economic GRoWtH

Global economic development slowed substantially in the course of 2011. The loss of momentum can be attributed to a number of negative influen-ces in the first half-year, such as the civil unrest in North Africa and the Arabian Peninsula, the devastating earthquake and tsunami in Japan (and the ensuing critical situation at the Fukushima nuclear power plant) and the uncertainties on the financial markets deriving from Europe’s debt crisis. Fears of a possible return to recession in the world’s developed markets prompted a sizeable loss of confidence among

business year 201102_01_

Financial rePort


K u o n i G R o u p


Lime Travel AB (acquired effective 1 March 2011) is one of Sweden’s lead-ing providers of luxury travel arrange-ments. The company generated annual turnover of around CHF 9.3 million in 2010.

www.limetravel.se

Gullivers Travel Associates (GTA) (ac-quired effective 1 May 2011) is a global leader in the rapidly-expanding online travel services market. GTA reported a turnover volume of CHF 1865 million for the 2010 business year.

www.gta-travel.com

■■■■ Group turnover of CHF 5 111 million by activity

■■■■ Group turnover of CHF 5 111 million by segment

world’s financial markets. The Swiss franc, a traditional “safe haven” currency, gained in value against all of Kuoni’s main foreign currencies in cost and revenue terms, reducing consolidated turnover for the period. The impact of currency movements eroded some CHF 329 million or 8.3% of the turnover for the year.

■■■■ Consolidated turnover for 2011 totalled CHF 5 111 million, a 28% improvement on the prior-year period. Organic growth (i.e. excluding currency effects and the impact of acquisitions) amounted to 1.2%.

54%Tour OperatingBusiness

46%Destination

ManagementServices

18%Scandinavia

10%UK & Benelux

13%Switzerland

46%Destinations

7%Asia

6%Southern Europe

■■■■ tHe Kuoni GRoup: tuRnoVeR GRoWtH in ASiA

And At diViSion deStinAtionS

The Kuoni Group increased its turnover substantially in 2011 compared to prior-year levels. Business showed broadly positive development, though substantial differences were seen in the performances of the Group’s various regions and activities. Division Destinations reported particularly positive trends and a further increase in turnover from its existing Kuoni Destination Management activities. The new businesses acquired, Gullivers Travel Associates (GTA), also added substantially to the division’s turnover volume. Strong increases were witnessed, too, in the Group’s Asian leisure travel business. And VFS Global, the Group subsidiary that specialises in providing administrative consular services, saw another significant expansion of its business activities. On a less positive note, the repercussions of the Arab Spring, declines in both consumer confidence and disposable incomes, high currency fluctuations as well as the uncertain economic outlook all combined to depress the European leisure travel business.

■■■■ Turnover development in 2011 was influenced exceptionally strongly by Kuoni’s acquisition activities and the strength of the Swiss franc. The first of these acquisitions, made a substantial contribution to the turnover growth. Kuoni acquired the business of Lime Travel AB of Sweden effective 1 March; with economic effect as of 1 May Kuoni acquired London- based Gullivers Travel Associates (GTA), which has since been assimi- lated into Division Destinations within the Kuoni Group. Extrapolated to the full-year period, the acquisitions executed by Kuoni in the course of 2011 add CHF 1 829 million to annual consolidated turnover. The aggregate purchase price for all acquisitions combined amounted to CHF 619 million. The acquisitions added CHF 1 355 million to Group turnover in 2011, an increase of 35%.

■■■■ Currency movements were the second major influence on Group turnover trends. The 2011 business year was characterised by exceptional volatility in foreign exchange rates, as a result of the uncertainty on the

> Comment Financial Report (Group) > Comment Financial Report (Group)

02_01_


K u o n i G R o u p


Division Northern Region consists of Kuoni Scandinavia (Sweden, Norway, Denmark, Finland, Russia and the Novair airline, plus the Playitas vaca-tion resort in Spain) and Kuoni United Kingdom & Benelux. The division gen-erated turnover of CHF 1 465 million in 2011 (2010: CHF 1 640 million).

Scandinavia generated turnover of CHF 958 million (2010: CHF 1 045 mil-lion).

Kuoni United Kingdom generated turnover of CHF 402 million (2010: CHF 477 million).

Kuoni Benelux generated turnover of CHF 105 million (2010: CHF 118 mil-lion).

■■■■ Turnover for individual markets (CHF million) 2010 2011

■■■■ diViSion noRtHeRn ReGion: tuRnoVeR mAintAined At

pRioR-yeAR leVelS

Kuoni Scandinavia sustained an 8.3% decline in turnover for the year to CHF 958 million, principally as a result of currency movements. In local-currency terms, business volumes for Kuoni’s Nordic operations were maintained broadly at prior-year levels, despite the relatively severe impact of the political upheavals in North Africa. The source markets of Sweden, Norway and Denmark and business in the newly-tapped Finnish market were spared major damage thanks to flexible capacity management. Novair, the airline operated by Kuoni Scandinavia, was forced to suspend its services to North Africa for several weeks in spring, but swiftly found alternative destinations such as the Canary Islands for the aircraft concerned. The tour operating business of Russia-based Megapolus Tours was substantially reduced in the course of the year, with the high-risk charter airline business abandoned entirely from the start of the summer season. These actions significantly reduced turnover from the Group’s Russian market activities, but greatly reduced the operations’ risks, too. Thanks to its redevelopment as a state-of-the-art sports and family resort, the Playitas complex on Fuerteventura in the Canary Islands was able to tangibly increase its occupancy and turnover volume.

■■■■ Kuoni United Kingdom & Benelux posted turnover of CHF 507 million for the year, a 15% decline on 2010 that can be primarily ascribed to the tangible weakening of the euro and the British pound against the Swiss franc. As well as Pound’s decline, business in the UK market was depressed by a clear deterioration in consumer mood and a slump in vacation demand. The political upheavals in Egypt, one of its important destinations, also negatively affected UK business. Beside, Kuoni’s UK operation did enlarge its network of own sales offices from 12 to 21, and also expanded its partnerships with various travel agents. For Kuoni Benelux (which is active in the Netherlands and Belgium), the turnover decline was due solely to currency movements. The fall in business volumes via external travel agencies (which was caused by a decision to focus on the organisation’s own sales offices) was offset through the

■■■■ The Kuoni Group positions itself as a global and service orientated travel provider that is active in leisure travel services (which accounts for 51% of its turnover), destination management services (which generates 46% of Group turnover) and Visa services (accounting for 3% of turnover). Destination management services increased its share of total Group turnover significantly in 2011, largely as a result of the acquisition of GTA. Kuoni’s Asian activities also continued their recent trend of accounting for an increasingly higher proportion of total Group turnover. Within the Kuoni Group portfolio, however, the turnover generated remained broadly spread among the Group’s three divisions and their various markets. The year also saw a further increase in the inter-nationalisation of the Group’s leisure travel business.

■■■■ Net of currency movements, the Division Southern Region and Destinations divisions improved on their prior-year performances in turnover terms. But Division Northern Region and Division Southern Region both sustained declines in their business volumes as a result of the Swiss franc’s strength. The overall positive trend was driven largely by continued strong growth in the Group’s destination management business, in the external consular services offered by VFS Global and in Kuoni’s Asian tour operating activities.

0

500

1000

1500

2000

2500

30003000

2500

2000

1500

1000

500

0

DestinationsScandinavia AsiaSouthernEurope

SwitzerlandUK &Benelux

DivisionNorthern Region

DivisionSouthern Region

DivisionDestinations

797 712

355 305 316 370

1045 958

595 507

1017

2405


02_01_


K u o n i G R o u p


Division Southern Region comprises Kuoni Switzerland, Kuoni Southern Europe (France, Italy and Spain) and Kuoni Asia (India including VFS Global and China/Hong Kong). The division achieved turnover of CHF 1 386 mil-lion in 2011 (2010: CHF 1 468 million).

The strength of the Swiss franc against the euro prompted business to be lost to providers outside Switzerland: some to travel agencies in neighbour-ing countries (Germany in particular) and some to online booking portals of-fering euro-denominated deals to the Swiss market.

Kuoni France generated turnover of CHF 196 million (2010: CHF 245 mil-lion).

Kuoni Italy generated turnover of CHF 94 million (2010: CHF 92 million).

Kuoni Spain generated turnover of CHF 15 million (2010: CHF 18 million).

Kuoni India generated turnover of CHF 325 million (2010: CHF 271 mil-lion). This includes VFS Global with a share of CHF 176 million (2010: CHF 156 million).

For a description of the VFS Global business model, please see Page 120.

Kuoni China/ Hong Kong generated turnover of CHF 45 million (2010: CHF 46 million).

business being conducted via external travel agencies proved a clear disadvantage. In view of this, Kuoni France endeavoured to focus on direct sales by expanding its own sales office network. Kuoni Italy raised its turnover year-on-year thanks to the addition of specialist operator Best Tours’ Italian business activities. The new acquisition’s cultural trips to Egypt were, however, especially severely affected by the local political upheavals. After opening new sales offices, Kuoni Spain was able to maintain its annual turnover almost at prior-year levels in local- currency terms.

■■■■ The Asia region, which consists of Kuoni India and Kuoni Hong Kong/China, achieved a substantial increase in turnover, in a highly favourable business and market environment. The annual turnover of CHF 370 million was not only a 17% improvement on the CHF 316 million of 2010; it was a further record result. Kuoni India saw a substantial increase in its tour operating business, thanks to further market ex-pansion and despite the adverse impact of the Indian rupee’s weakening against the Swiss franc. Kuoni India’s business-to-business activities, which offer travel products to Indian companies and organisations, raised their passenger volumes by some 50%. The direct customer business also posted significantly higher turnover, thanks largely to the further expansion of the local sales network. In addition to its traditional travel businesses, Kuoni India also reported a tangible increase in the turnover generated by its VFS Global subsidiary, which offers external consular services, as a result of new contractual agreements with various government authorities. VFS Global now provides its services for 37 governments in 62 countries. Kuoni’s leisure travel company in China/Hong Kong delivered a highly encouraging performance for 2011 in a favourable economic environment. By expanding its product portfolio and by swiftly and flexibly realigning its product offer in response to the tsunami in Japan and the political upheavals in North Africa, Kuoni China/Hong Kong achieved an annual turnover result that was a tangible improvement on 2010 in local-currency terms.

opening of new Kuoni retail outlets and the acquisition of Best Tours’ Belgian operations.

■■■■ diViSion SoutHeRn ReGion: ASiA AGAin tHe pRime GRoWtH dRiVeR

Kuoni Switzerland generated turnover of CHF 712 million in 2011, an 11% decline on the prior-year period. The political unrest in Egypt, Tunisia and Morocco adversely affected vacation travel demand in the Swiss market, too. The suspension of leisure travel flights to Egypt and Tunisia had a major impact on business levels: Egypt in particular has been a key Swiss travel destination, especially in the winter season. The slump in business to the countries concerned was only partially offset through new bookings and rebookings for the Canary Islands and from spring onwards to Greece and Turkey. While the strength of the Swiss franc had a basically positive impact on demand in the Swiss market for travel products, this benefit was restricted – as it was for many Swiss tour operators – by a substantial increase in customers preferring to make their bookings at travel agencies across the border in neighbouring countries or via foreign online portals offering euro-denominated products. Kuoni Switzerland’s specialist travel brands also suffered turnover declines, with Africa, Intens Travel and Manta Reisen (diving) particularly hard hit by the developments in the Arab world. Railtour and Frantour, Kuoni’s two rail travel specialists, continued to face a tough business environment. Results for Northern Europe specialist Kon- tiki, however, were a tangible improvement on the previous year, when business had been severely affected by the Icelandic volcanic eruption.

■■■■ All Kuoni’s country organisations in Southern Europe felt the twin impact of the upheavals in North Africa and the bleak economic situation in the euro zone. With consumer mood still depressed, unemployment levels high and tough price competition being waged in the tour operating sector, business volumes for 2011 were down on their prior-year levels. The CHF 305 million turnover for the year was a 14% decline (or 3.8% in local currency). Business at Kuoni France was especially hard hit by the unrest in North Africa. In a consolidating market, the high proportion of


02_01_


K u o n i G R o u p


Division Destinations consists of Kuoni Destination Management and Gullivers Travel Associates (GTA), which was acquired in the course of 2011. The division generated turnover of CHF 2 405 million for the year (2010: CHF 1 017 million), and achieved or-ganic growth (excluding acquisitions and currency factors) of 13%.

MICE stands for meetings, incentives, conferences and events. Kuoni’s MICE business organises conferences, con-gresses and trade fairs of all kinds for companies and other institutions, along with incentive travel arrange-ments that form part of employees’ bonus schemes.

■■■■ Having posted a sound recovery the previous year, Destination Management India & South Asia saw its turnover decline 10% to CHF 72 million in 2011, as a result of currency exchange factors. In local- currency terms, the unit raised its turnover 7.7% year-on-year, despite the difficult economic conditions in its key European source markets.

■■■■ Destination Management Africa raised its annual turnover 3.0% to CHF 57 million. The growth stemmed largely from East Africa, which saw a surge in demand for individual travel products and smaller lodges on various safari tours. The stronger business here offsets the currency-related declines in business volumes in South Africa and Namibia, the unit’s two further regions.

■■■■ 2011 business at Destination Management Asia-Pacific was severely affected by the flooding in Thailand, Vietnam, Cambodia and Australia. Despite these setbacks, however, the annual turnover of CHF 88 million was a 4.7% improvement on the previous year net of currency factors.

■■■■ Kuoni’S GRoSS pRoFit SuBStAntiAlly incReASed,

But AcQuiSitionS pRompt decline in GRoSS pRoFit mARGin

Kuoni achieved a gross profit for 2011 of CHF 1 026 million – the first time the company has exceeded the CHF 1 billion threshold in its corporate history. The result is a 18% improvement on the previous year. Acquisitions accounted for 23% of the gross profit growth, while currency movements depressed gross profit by 8.9%.

■■■■ diViSion deStinAtionS: oRGAnic GRoWtH And GtA AcQuiSition

BooSt BuSineSS VolumeS

For Division Destinations, the prime event of 2011 was the Kuoni Group’s acquisition and integration of Gullivers Travel Associates (GTA), which added a further CHF 1 346 million to the divisional turnover. If the acquisition had been effected as of 1 January 2011, GTA would have added a further CHF 472 million to the division’s turnover for the year. Business at Division Destinations’ existing destination management operations saw overall positive trends in all regions, though the corresponding results were muted by adverse currency movements. The division posted turnover for the year of CHF 1 059 million, a 4.2% increase on its 2010 equivalent.

■■■■ Destination Management Europe, the division’s largest constituent unit, raised its turnover 6.7% to CHF 494 million, with the Far East source markets showing particularly strong growth. This, together with the Kuoni Connect business-to-business hotel database launched in 2009, helped offset the slump in volumes from Japan following the tsunami disaster and the subsequent nuclear power plant problems.

■■■■ The strongest organic growth within the division was seen at Desti- nation Management Middle-East, which increased its turnover from the CHF 116 million of 2010 to CHF 140 million. The higher business volume was driven by greater demand for individual travel products and by the previous year’s acquisition of the Gulf Dunes and Reem Tours companies.

■■■■ Destination Management USA generated turnover of CHF 215 million for the year. With the US dollar losing almost 15% of its value, the unit’s Swiss-franc turnover volume was broadly in line with prior-year levels in Swiss francs terms. The volume growth in local-currency terms was due primarily to rising turnover from Kuoni Connect and to strong growth in the MICE sector.


02_01_


K u o n i G R o u p


■■■■ Gross Profit for individual markets (CHF million)

2010 2011

As part of its groupwide investment and cost-reduction programme, Kuo-ni has taken action to accelerate its transformation process and enhance its infrastructure, with a special em-phasis on expanding and refining its market- and customer-focused distri-bution channels (e-business and its own sales outlets).

Kuoni’s workforce (full-time equiva-lents) was at 12 104 as per end of the year (2010: 9 048).

saw a slight increase in its gross profit margin after raising the direct-sales share of its UK business. In Southern Europe, the new sales offices in France and Spain had a similarly beneficial effect. Kuoni Switzerland further improved its gross profit margin, too, thanks to the positive effects of realigning the product mix and achieving better capacity utilisations (also at its specialist operators). The margins at Kuoni Asia declined, owing largely to higher direct costs in the tour operating segment. Over- all gross profit margin for Kuoni Destination Management remained at its 2010 level. The higher margins achieved through the sizeable increase in demand in the Europe target market were offset by margin declines at other destinations and the adverse impact (in margin terms) of GTA’s acquisition.

■■■■ SuBStAntiAlly-incReASed eBit ReSult deSpite one-oFF GtA

AcQuiSition coStS

Having achieved both organic and (in particular) acquisition-related business growth in the course of the year, the Kuoni Group saw its nominal operating costs increase in 2011 over their prior-year levels. At the same time, however, operating cost efficiency was further improved through a range of actions that included optimising and auto-mating various business processes.

■■■■ The 2011 income statement includes non-recurring costs of the acquisition and integration of Gullivers Travel Associates (GTA), which amounted to CHF 11.3 million and CHF 8.9 million respectively. The investment and cost-reduction programme initiated in 2009 was concluded as planned at the end of 2011. The costs of the programme amounted to CHF 36 million (compared to CHF 40 million for 2010). A total of CHF 106 million was spent on the programme over its three- year duration.

■■■■ Average Kuoni Group workforce numbers rose 26% in 2011, from 8 772 to 11 048 full-time equivalents. The increase was due largely to the acquisition of Gullivers Travel Associates (GTA), the strong growth in

■■■■ The Kuoni Group posted a gross profit margin for 2011 of 20.1%. The decline from the prior-year level of 21.9% is due to the acquisitions effected in the course of 2011. Gullivers Travel Associates (GTA), the biggest of these, had a particularly strong impact on gross profit margin for the year, since the company operates a highly automated large- volume business with substantially lower margins than those of Kuoni’s traditional activities. In organic terms, Kuoni slightly increased its gross profit margin, thanks largely to the expansion of VFS Global’s consular services business.

■■■■ Gross profit margin trends showed wide variations from unit to unit and within the Group’s various business segments. The Scandinavian leisure travel business faced sizeable flight overcapacities attributable at least in part to strong expansions among low-cost carriers. Regional gross profit margin was also dented by the need to repatriate vacationers following the suspension in spring of all flights to North Africa. Gross profit margin for Kuoni’s Russian activities was tangibly increased following the abandonment of the high-risk charter business in favour of a stronger focus on individual travel arrangements. The Playitas sports and family resort on Fuerteventura also achieved a much-improved gross profit margin, thanks in particular to the higher occupancies recorded following completion of the hotel’s refurbishment. Kuoni UK & Benelux

050

100150200250300350400400

350

300

250

200

150

100

50

0






182166

57 50

168185

201172

10187

164

366


02_01_


K u o n i G R o u p


EBIT net of the costs of the investment and cost-reduction programme, the planned amortisation of acquisition-related intangible assets and the one-off costs of acquiring and integrating GTA) amounted to CHF 168.9 million (2010: CHF 127.1 million).

EBIT was raised 28% by organic growth. The declines in the exchange rates of all relevant foreign currencies against the Swiss franc eroded 18% or CHF 10 million from the EBIT figure. Acquisitions had a 17% positive impact on the EBIT result.

■■■■ Earnings before interest and taxes (EBIT) (CHF million)

■■■■ Group EBIT by market/division (CHF million) 2010 2011

In accordance with international ac-counting principles, goodwill is not amortised. It is, however, subjected an-nually to an impairment test to deter-mine its current value.

■■■■ FuRtHeR impRoVement in net GRoup ReSult

The net group result amounted to CHF 33.3 million. The increase on the prior year was driven by the strong improvement in consolidated EBIT and an improved financial result. Tax expense was higher, however, owing to the increase in operating profit.

■■■■ The Kuoni Group reported a net financial result of CHF – 9.4 million, a tangible improvement on the CHF – 18 million of 2010. This is due largely to the fact that the prior-year result was more strongly influenced by non-operational foreign exchange differences and by underlying profits and losses deriving from the valuation of long-term balance-sheet items. The prior-year result also included one- time costs of CHF 3.1 million incurred through the attempts to acquire ET-china. Interest expense in 2011 was substantially higher, owing primarily to financing costs associated with the Gullivers Travel Asso- ciates (GTA) acquisition.

■■■■ Tax expense amounted to CHF 31 million (2010: CHF 17 million). The average weighted tax rate was higher than the long-term average, because the mix of different tax rates for profit and loss results had a net upward effect on the tax rate as a whole. The fact that acquisition

-20-10

010203040506060.0

50.0

40.0

30.0

20.0

10.0

0.0

-10.0

-20.0






8.3 8.1

–4.4–8.9

42.248.6

43.9

28.5

8.22.9

21.2

47.6

the Group’s Asian business and the further expansion of VFS Global and its activities.

■■■■ As a result of the acquisition-driven increase in turnover and the organic growth at Division Destinations and in Asia, the Kuoni Group substantially raised its earnings before interest and taxes (EBIT) result for 2011. Despite the one-off costs of acquiring and integrating GTA, the CHF 74.2 million EBIT recorded for the year was a CHF 15.8 million or 27% improvement on the CHF 58.4 million of 2010.

■■■■ As in previous years, all three divisions made a positive contribution to the overall EBIT achieved. The declines in all key foreign currencies against the Swiss franc in the course of 2011 did, however, have a tangible effect on the consolidated EBIT result. The acquisition of Gullivers Travel Associates (GTA) made a positive impact in EBIT terms; and Kuoni’s Asian activities and almost all the units within Division Destinations substantially improved their earnings performances. With declining volumes in the European tour operating business, Kuoni Scandinavia, UK & Benelux, Switzerland and Southern Europe saw year-on-year declines in their EBIT contributions.

0255075

100125150175200200

175

150

125

100

75

50

25

0

EBITReported

Acquisition& Integration

Costs GTA

UnderlyingEBIT

InvestmentProgramme

AmortisationIFRS 3

74.2

38.8

20.2 168.9

35.7 148.7


02_01_


K u o n i G R o u p


The effective capital increase, net of costs and the effect of own shares was at CHF 235 million.

KEP is calculated from net operat-ing profit after tax (NOPAT) less the cost of capital invested in operations. Group-level capital costs have been set at a sustainable rate weighted average cost of capital (WACC) of 8.5%. Specific capital cost rates have also been set for the Group’s individual divisions and markets that accommodate the cor-responding economic and currency considerations.

■■■■ Earnings per registered share B (CHF)

The statement of comprehensive in-come includes the net Group result and all further capitalised value ad-justments which are not shown on the income statement under IFRS provi-sions. These include market-value ad-justments to financial instruments (CHF 19 million) and currency trans-lation differences (CHF – 64 million). The biggest currency translation dif-ferences derived from the translations of the balance sheets of Kuoni Group subsidiaries reporting in GBP, EUR and SEK, of USD-denominated intra-group loans of an equity nature and of CHF-denominated intragroup loans to subsidiaries with other functional currencies.

and Southern Europe; and the further expansion of VFS Global’s activities entailed additional tangible-asset investments. The capital spending effected under the groupwide investment and cost-reduction programme was substantially lower than in 2010.

■■■■ The Kuoni Group held cash and cash equivalents of CHF 376 million at the end of 2011, a decline of some CHF 300 million from their prior-year level. Cash flow from operating activities decreased to CHF 101 million and includes a one-off negative seasonal effect deriving from the acquisition of Gullivers Travel Associates (GTA). The fact that the GTA acquisition was financed not only with equity and loans but also with available cash has substantially reduced liquid-fund levels. Advance payments from customers rose from the CHF 352 million of 2010 to CHF 373 million. The Group reported a net debt position of CHF 306 million at year-end (compared to a net cash position of CHF 67 million at the end of 2010).

■■■■ The Kuoni Group’s equity was increased substantially in 2011, from CHF 562 million to CHF 775 million. A CHF 257 million rights issue was conducted in association with the Gullivers Travel Associates (GTA) acquisition. The equity funds generated were used to part-finance the acquisition, with the remainder of the CHF 615 million purchase price financed via a syndicated credit facility. This increased the company’s debt levels; but the balance sheet equity ratio remains on 31% – a high value for the travel sector that reflects the Kuoni Group’s sound balance-sheet policy.

■■■■ Kuoni economic pRoFit FuRtHeR impRoVed, deSpite one-oFF

neGAtiVe eFFectS

The Kuoni Group’s value-based management approach is intended to keep top management aligned as closely as possible to creating sus-tainable added value. The central management performance indicator here is known as Kuoni Economic Profit or KEP.

costs could not be used for tax reduction purposes also impacted negatively on the tax rate for the year.

■■■■ Earnings per registered share B amounted to CHF 9.22 (2010: CHF 7.43). The Board of Directors will recommend to the Annual General Meeting of Shareholders of 17 April 2012 that the profit for the year be partly distributed in the form of a withholding tax-free appropriation of the newly-established capital contribution reserve. The amount paid should also comply with the broad parameters of the Kuoni Group’s long-term profit distribution policy. The Board of Directors will therefore ask the Meeting to approve a withholding tax-free distribution of CHF 0.60 per registered share A and CHF 3.00 per registered share B for the 2011 business year (2010: CHF 0.50 / 2.50). The payout factor resulted at 34% (2010: 31%).

■■■■ Total comprehensive income for 2011 amounted to CHF – 12 million (prior year: CHF – 17 million).

■■■■ Solid cASH FloW eVen AFteR GtA AcQuiSition

Capital spending on tangible and intangible assets in 2011 amounted to CHF 57 million, and was primarily on IT. The investment amount was a CHF 14 million increase on the CHF 43 million of 2010. A large part of the extra spending derived from the acquisition of Gullivers Travel Associates (GTA) in the course of the year. Kuoni also invested in expand-ing and refurbishing its branch office networks in the UK, Benelux

0

10

20

30

40

50

60

2007 2008 2009 2010 2011

60.0

50.0

40.0

30.0

20.0

10.0

0.0

46.452.7

0.17.4 9.2


02_01_


K u o n i G R o u p


NOPAT divided by the average capi-tal invested in operations gives return on invested capital (ROIC), which is compared with WACC for the Kuoni Group and/or its constituent units to determine value-adding performance.

■■■■ ROIC (%)

The International Monetary Fund (IMF) forecasts global economic growth of 4.0% for 2012 (source: IMF World Economic Outlook, September 2011) – the same level as is expected for 2011. In making its projection, the IMF expects the substantial recovery in Japan (in particular) and a slight economic recovery in the USA to off-set the decline in Europe’s economic momentum.

■■■■ Kuoni economic profit (CHF million)

■■■■ Return on invested capital (ROIC) for 2011 amounted to 3.3%. Excluding the costs of the investment and cost-reduction programme, ROIC stood at 5.6% for the year.

■■■■ BASed on GloBAl FocuS Kuoni eXpectS to Be ABle to pARtici-

pAte in tHe GRoWtH pARticulARly in ASiA in 2012

After a relatively favourable first half-year, the last six months of 2011 saw a slowdown in business growth and momentum. The numerous crises and events that occurred in the course of the year had a tangible impact on the global economy, which continues to be plagued by sizeable uncertainty and offers only cloudy prospects for the immediate future. Based on the most recent prognoses available, the year is likely to see further weak growth in global GDP terms. Economic growth in Europe is expected to feel the pinch of the financial policies now being implemented in response to the debt crisis. Growth rates projected for 2012 in emer-ging economies are likely to be slightly below prior year, though these nations should continue to serve as a powerful motor for further global economic expansion.

Key Figures (CHF million) 2011 2010

Net operating profit after tax (NOPAT) 40.9 40.2Average invested capital 1 233.4 748.2Return on invested capital (ROIC) 3.30% 5.40%Weighted average capital costs (WACC) 8.50% 8.50%ROIC – WACC spread – 5.10% – 3.1%Kuoni Economic Profit (KEP) – 47.4 – 23.3Delta KEP – 24.1 40.9

-5

0

5

10

15

2020.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

2007 2008 2009 2010 2011

17.0%18.8%

0.1%

5.4%3.3%

■■■■ Kuoni has integrated this value-based management approach based on the KEP performance indicator into its entire management process, to ensure that it has a sustainable effect. To this end, planning and budget-ing, performance measurement, internal and external communications and the long-term variable-compensation models applicable to senior management positions have all been consistently adapted to the sustain-able value-creation philosophy.

■■■■ Kuoni Economic Profit declined in 2011 from CHF – 23.3 million to CHF – 47.4 million. The increase in turnover volumes and the improve-ment in operating earnings performance were more than offset by higher capital interest costs. With the acquisition of Gullivers Travel Associates (GTA), the Kuoni Group’s average invested capital increased 65% from CHF 748 million to CHF 1 233 million, prompting a corresponding sizeable rise in its capital costs.

-80-60-40-200

2040608080.0

60.0

40.0

20.0

0.0

-20.0

-40.0

-60.0

-80.0

2007 2008 2009 2010 2011

60.471.9

–64.3

–23.3

–47.4


02_01_


K u o n i G R o u p


■■■■ Turnover (CHF million)

■■■■ EBIT and net result (CHF million) EBIT Net result

0

1000

2000

3000

4000

5000

6000

2007 2008 2009 2010 2011

6000

5000

4000

3000

2000

1000

0

4699 4855

3894 3984

5111

-50

0

50

100

150

200200.0

150.0

100.0

50.0

0.0

-50.0

2007 2008 2009 2010 2011

139.5 135.7150.4 151.0

15.1

58.4

23.21.6

74.2

33.3

■■■■ For the tourist sector, the United Nations World Tourism Organiza-tion (UNWTO) expects further growth in global international tourism, though at more modest rates. The UNWTO is currently projecting growth of 3% to 4% for 2012 as a whole (source: UNWTO, January 2012).

■■■■ Continuing economic growth is leading to a further increase in standards of living, especially in Asian source markets, and this is having a positive effect on Kuoni Group’s relevant business activities. By contrast, the effects of the European debt crisis, including the effect on consumer sentiment in the European tour operating sector, are still hard to predict. Based on the latest trading figures for the first weeks of the current year, Kuoni is confident about 2012. The further expansion through the acquisition of Gullivers Travel Associates (GTA) of the Kuoni Group’s position particularly in the Asian market will make a positive contribution to the development of the Kuoni Group. The integration of GTA and the adoption of the new group structure will be further pursued in 2012.

■■■■ Kuoni will continue to pursue its present growth strategy. Kuoni aims to increase its business volumes at rates that are above the general market average, through a combination of targeted acquisitions and its own organic growth. In doing so, and by continuously enhancing its business processes, Kuoni will ensure further earnings improvements. Kuoni will also remain true to its strategy of low vertical integration. The Group will continue to focus on its core “travel” competence, with a particular strong positioning in growth markets, in Destination Man-agement services and in online business. By offering a broadly-based portfolio of services that are closely tailored to individual needs, by selectively promoting and developing contemporary sales channels and by practising strict cost management, Kuoni aims to ensure that it continues to create added financial value.


02_01_

156 | 157 K u o n i A n n u A l R e p o R t # 2 0 1 1fig. 1: Blossoming season of the rapeseed fields between limestone hills in Luoping in the east of the province of Yunnan.

remote Placeswithin reach.


K u o n i G R o u p


02_02_

oF Key DataFive-year summary

The data presented are based on the consolidated financial statements. Any changes made to Kuoni Group accounting policies as a result of changes to International Financial Reporting Standards are not retroactively applied.

1 Invested capital is the average annual total of all net current assets, tangible fixed assets, goodwill actually paid (less any impairments effected) and other net assets (excluding interest-bearing assets and liabilities). In the case of GTA, invested capital was calculated for the full 12-month period: the corresponding reduction in view of GTA’s shorter eight-month ownership period (i.e. from 1 May 2011) was effected via capital costs (see footnote 3).

2 Return on Invested Capital (ROIC) is defined as net operating profit after tax (NOPAT) as a proportion of average invested capital. NOPAT is defined as earnings before interest and taxes (EBIT) less income dependent taxes

3 Kuoni Economic Profit or KEP is defined as net operating profit after tax (NOPAT) less the cost of capital invested in operations. The cost of capital invested in operations is determined by multiplying the average invested capital by the weighted average cost of capital (WACC) of 8.50% of the Kuoni Group. The cost of capital invested for GTA was calculated for the eight-month period following its acquisition on 1 May 2011.

4 Proposal of the Board of Directors to the General Meeting of Shareholders on 17 April 2012. Subject to definitive approval by the General Meeting of Shareholders.

5 Distribution to shareholders of a withholding tax-free appropriation from the newly created capital contribution reserve.

6 The company will waive its entitlement to such payments from the capital contribution reserve for the treasury shares held on the distribution date which are reserved for use in its employee share plan.

7 As at 31 December 2011.

CHF million 2011 2010 2009 2008 2007

Turnover 5 111 3 984 3 894 4 855 4 699Total Northern Region 1 465 1 640 1 664 2 017 1 970Scandinavia 958 1 045 1 012 1 193 1 004UK & Benelux 507 595 652 824 966

Total Southern Region 1 386 1 468 1 462 1 871 1 856Switzerland 712 797 821 1 028 1 001Southern Europe 305 355 374 539 558Asia 370 316 267 304 297

Destinations 2 405 1 017 894 1 101 1 009Corporate 0 0 0 0 0

EBIT 74.2 58.4 15.1 150.4 139.5Total Northern Region 31.4 52.1 14.5 61.2 84.3Scandinavia 28.5 43.9 5.3 29.0 38.9UK & Benelux 2.9 8.2 9.2 32.2 45.4

Total Southern Region 47.8 46.1 33.5 80.8 55.9Switzerland 8.1 8.3 1.5 39.4 19.7Southern Europe – 8.9 – 4.4 6.1 18.9 20.1Asia 48.6 42.2 25.9 22.5 16.1

Destinations 47.6 21.2 15.5 38.5 32.0Corporate – 52.6 – 61.0 – 48.4 – 30.1 – 32.7

Net result 33.3 23.2 1.6 151.0 135.7Investments in tangible fixed assets and intangible assets 57.2 43.3 44.2 59.5 53.2Depreciation and amortisation 92.8 54.9 52.4 49.2 56.3Cash flow (net cash from operating activities) 101.1 117.0 46.7 108.7 256.9Net cash – 306.4 66.6 59.3 88.0 88.8

Non-current assets 1 576 773 827 809 795Current assets 923 1 048 1 025 919 1 142Equity 775 562 592 606 607Equity ratio 31.0% 30.9% 32.0% 35.1% 31.3%Non-current liabilities 415 302 319 98 115Current liabilities 1 309 957 941 1 024 1 216Total assets 2 499 1 821 1 852 1 728 1 937

Invested capital 1 1 233 748 760 701 711Return on Invested Capital (ROIC) 2 3.3% 5.4% 0.1% 18.8% 17.0%Kuoni Economic Profit (KEP) 3 – 47.4 – 23.3 – 64.3 71.9 60.4

Average number of personnel (FTE) 11 048 8 772 9 070 9 797 8 826Total Northern Region 1 683 1 693 1 757 1 878 1 725Scandinavia 915 984 1 021 1 122 992UK & Benelux 768 709 736 756 733

Total Southern Region 5 329 4 692 4 914 5 557 5 052Switzerland 1 107 1 166 1 190 1 426 1 434Southern Europe 545 503 546 718 789Asia 3 677 3 023 3 178 3 413 2 829

Destinations 3 867 2 262 2 264 2 256 1 950Corporate 169 125 135 106 99

CHF million 2011 2010 2009 2008 2007

Cash flow (net cash from operating activities) Per registered share A 5.87 8.15 3.26 7.60 17.62Per registered share B 29.33 40.76 16.31 38.01 88.11

Net result Per registered share A 1.84 1.49 0.02 10.54 9.27Per registered share B 9.22 7.43 0.08 52.68 46.36

Equity Per registered share A 44.43 38.57 40.67 41.74 41.33Per registered share B 222.14 192.84 203.37 208.70 206.67

Dividend Per registered share A 0.60 4 5 0.50 5 1.60 2.00 3.40Per registered share B 3.00 4 5 2.50 5 8.00 10.00 17.00

Total dividend payout 11 995 200 6 7 235 672 22 956 088 28 631 310 48 737 640

Nominal value reduction 0 0 0 0 0

Payout ratio 34.2% 31.2% >100% 19.0% 35.9%

Yield (at year end rate) 1.33% 0.55% 2.29% 2.78% 2.88%

Registered share A (Nominal value CHF 0.20) Number outstanding 1 249 500 952 000 952 000 952 000 985 600Number entitled to dividend 1 249 500 952 000 952 000 952 000 985 600Stock market prices not listed not listed not listed not listed not listed

Registered share B (Nominal value CHF 1.00) Number outstanding 3 748 500 2 856 000 2 856 000 2 856 000 2 956 800Number entitled to dividend 3 551 638 7 2 682 529 2 679 111 2 672 731 2 669 800Stock market prices high 439 459 387 616 784low 213 294 253 290 517at year-end 225 454 349 360 590Annual trading volume in CHF million 839 787 697 1 447 1 931

Stock market capitalisation as at 31 December in CHF million 900 1 383 1 063 1 097 1 861

160 | 161 K u o n i A n n u A l R e p o R t # 2 0 1 1fig. 2: The monsoon-eroded ridges of the Makran Coast along the Indian Ocean in Iran at the Pakistani border.

heeDing the calloF the great wiDe oPen.


K u o n i G R o u p


02_03_

> Pro Forma FiguresPro Forma Figures

CHF Mio. 2011 2010 2009 2008 2007

Nettoerlös 5 111.3 3 983.6 3 893.6 4 855.0 4 698.6Outbound Europe 2 098.7 2 285.1 2 320.7 2 930.1 2 948.5Outbound Nordic 929.5 978.7 957.1 1 092.1 979.0Outbound Kuoni Europe 1 169.8 1 307.0 1 364.2 1 838.6 1 970.9

Global Travel Services 1 843.8 489.6 415.2 601.1 526.0Groups 788.9 n.a. n.a. n.a. n.a.FIT (Fully Independent Traveller) 1 070.1 n.a. n.a. n.a. n.a.

Emerging Markets & Specialists 1 286.0 1 323.6 1 264.1 1 463.5 1 364.5Specialists 900.4 954.6 949.6 1 067.2 1 046.3Emerging Markets 221.9 226.2 192.7 281.3 247.1VFS Global 176.4 156.2 129.3 123.4 74.8

Corporate 0.0 0.0 0.0 0.0 0.0

EBITA 113.0 72.2 30.3 162.8 152.0Outbound Europe 24.4 55.8 25.2 115.1 107.4Outbound Nordic 35.2 55.8 21.7 45.8 42.4Outbound Kuoni Europe – 10.8 – 0.0 3.5 69.3 65.0

Global Travel Services 62.1 6.5 5.1 18.2 16.7Groups 19.0 n.a. n.a. n.a. n.a.FIT (Fully Independent Traveller) 63.3 n.a. n.a. n.a. n.a.Acquisition and integration cost – 20.2 0.0 0.0 0.0 0.0

Emerging Markets & Specialists 79.1 70.9 48.4 59.6 60.6Specialists 35.4 38.8 37.1 52.0 46.3Emerging Markets 1.8 – 4.3 – 9.7 – 10.6 0.5VFS Global 41.9 36.4 21.0 18.2 13.8

Corporate – 52.6 – 61.0 – 48.4 – 30.1 – 32.7

EBIT 74.2 58.4 15.1 150.4 139.5Outbound Europe 20.3 53.0 22.4 112.6 106.0Outbound Nordic 33.9 54.7 20.5 44.6 41.5Outbound Kuoni Europe – 13.6 – 1.7 1.9 68.0 64.5

Global Travel Services 36.7 6.1 4.9 17.8 16.7Groups 13.4 n.a. n.a. n.a. n.a.FIT (Fully Independent Traveller) 43.5 n.a. n.a. n.a. n.a.Acquisition and integration cost – 20.2 0.0 0.0 0.0 0.0

Emerging Markets & Specialists 69.8 60.3 36.2 50.1 49.5Specialists 26.6 28.9 25.5 43.3 35.5Emerging Markets 1.3 – 5.0 – 10.3 – 11.4 0.2VFS Global 41.9 36.4 21.0 18.2 13.8

Corporate – 52.6 – 61.0 – 48.4 – 30.1 – 32.7


in the lightoF the unKnown.

fig. 3: The limestone hills along the Li River downstream from Guilin epitomise the beauty of the Chinese landscape.


02_04_

Kuoni grouP


K u o n i G R o u p

166 | 167

Assets CHF 1 000 Notes 31 Dec 2011 % 31 Dec 2010 %

Non-current assets Tangible fixed assets (13) 200 799 8.0 180 108 9.9Goodwill (14) 939 778 37.6 383 064 21.0Other intangible assets (15) 347 336 13.9 114 160 6.3Investments in associates (16) 11 562 0.5 13 077 0.7Other financial assets (17) 42 273 1.7 42 269 2.3Deferred taxes (23) 34 146 1.4 39 861 2.2

Total non-current assets 1 575 894 63.1 772 539 42.4

Current assets Cash and cash equivalents (18) 288 861 11.6 587 898 32.3Time deposits (19) 86 874 3.5 86 368 4.8Accounts receivable / other receivables (20) 366 934 14.7 210 094 11.5Prepaid expenses 180 349 7.1 164 042 9.0

Total current assets 923 018 36.9 1 048 402 57.6

Total assets 2 498 912 100.0 1 820 941 100.0

02_04_01_

Statement of financial PoSition

Equity and liabilities CHF 1 000 Notes 31 Dec 2011 % 31 Dec 2010 %

Equity Share capital (21) 3 998 0.2 3 046 0.2Treasury shares (21) – 17 163 – 0.7 – 3 943 – 0.2Reserves 779 047 31.1 554 417 30.4

Equity attributable to shareholders of Kuoni Travel Holding Ltd. 765 882 30.6 553 520 30.4

Non-controlling interests (21) 8 728 0.4 8 874 0.5Total equity 774 610 31.0 562 394 30.9

Liabilities Provisions (22) 19 819 0.8 18 208 1.0Deferred taxes (23) 97 118 3.9 39 438 2.2Financial debts (24) 298 068 11.9 243 897 13.4

Total non-current liabilities 415 005 16.6 301 543 16.6

Financial debts (24) 11 391 0.4 11 761 0.6Accounts payable (25) 306 881 12.3 234 566 12.9Advance payments by customers 372 718 14.9 352 006 19.3Accrued expenses (25) 618 307 24.8 358 671 19.7

Total current liabilities 1 309 297 52.4 957 004 52.5

Total liabilities 1 724 302 69.0 1 258 547 69.1

Total equity and liabilities 2 498 912 100.0 1 820 941 100.0


K u o n i G R o u p


02_04_03_

statement oF comPrehensive income

CHF 1 000 Notes 2011 2010

Net result 33 345 23 178

Other comprehensive income

Realised gains or losses from cash flow hedges transferred to income statement (21) 10 599 4 930Recognised gains or losses from cash flow hedges (21) 14 396 – 12 208Translation differences (21) – 64 162 – 35 285Income taxes on other comprehensive income (21) – 6 499 1 893

Total other comprehensive income – 45 666 – 40 670

Total comprehensive income – 12 321 – 17 492

Of which: Attributable to non-controlling interests 1 574 1 955Attributable to shareholders of Kuoni Travel Holding Ltd. – 13 895 – 19 447

02_04_02_

income statement

CHF 1 000 Notes 2011 % 2010 %

Turnover (3/4) 5 111 325 100 3 983 645 100.0

Direct costs – 4 085 654 – 79.9 – 3 110 494 – 78.1Gross profit (3/5) 1 025 671 20.1 873 151 21.9

Personnel expense (6) – 524 675 – 10.3 – 459 553 – 11.5Marketing and advertising expense – 82 560 – 1.6 – 91 788 – 2.3Other operating expense (7) – 251 443 – 4.9 – 208 578 – 5.2Depreciation and amortisation (8) – 92 807 – 1.8 – 54 869 – 1.4

Earnings before interest and taxes (EBIT) (3/9) 74 186 1.5 58 363 1.5

Financial income (10) 6 673 0.1 4 591 0.1Financial expense (10) – 16 068 – 0.3 – 22 926 – 0.6

Result before taxes 64 791 1.3 40 028 1.0

Income taxes (11) – 31 446 – 0.6 – 16 850 – 0.4Net result 33 345 0.7 23 178 0.6

Of which: Attributable to non-controlling interests 1 550 0.0 1 863 0.0Attributable to shareholders of Kuoni Travel Holding Ltd. 31 795 0.7 21 315 0.6

Basic earnings per registered share B in CHF (12) 9.22 7.43 Diluted earnings per registered share B in CHF (12) 9.22 7.43

Basic earnings per registered share A in CHF (12) 1.84 1.49 Diluted earnings per registered share A in CHF (12) 1.84 1.49


K u o n i G R o u p


02_04_05_

statement oF cash Flows

For further details see notes 28 and 29.

CHF 1 000 Notes 2011 2010

Cash flow from operating activities Net result 33 345 23 178Depreciation and amortisation (8) 92 807 54 869Changes in provisions and deferred taxes – 5 293 – 1 755Other non-cash expenses and income 1 610 14 369Changes in net working capital • Accountsreceivable/otherreceivables 26 146 – 11 934• Prepaidexpenses – 2 – 9 863• Accountspayable/accruedexpenses – 1 001 14 371• Advancepaymentsbycustomers – 46 487 33 773

Net cash from operating activities (cash flow) 101 125 117 008

Cash flow from investing activities Purchase of tangible fixed assets (13) – 36 035 – 25 414Purchase of other intangible assets (15) – 21 157 – 17 930Acquisition of subsidiaries, net of cash and cash equivalents acquired (2) – 607 591 – 15 230Disposal of tangible fixed assets 1 889 1 907Increase in time deposits (net) – 792 – 90 756Investment in associates (16) – 402 – 1 958Decrease in other financial assets (net) 629 2 522

Net cash used in investing activities – 663 459 – 146 859

Cash flow from financing activities Decrease of borrowings (net) 51 032 – 5 428Sale of treasury shares 0 1 143Share capital increase 234 513 0Changes in ownership interests 0 – 910Dividend to non-controlling interests – 1 720 – 1 360Dividend to shareholders of Kuoni Travel Holding Ltd. – 7 236 – 22 956

Net cash from financing activities 276 589 – 29 511

Effects of exchange rate changes on cash and cash equivalents – 13 292 – 13 119

Net decrease in cash and cash equivalents – 299 037 – 72 481

Cash and cash equivalents at beginning of year 587 898 660 379

Cash and cash equivalents at end of year 288 861 587 898

02_04_04_

statement oF changes in equity

1 For further details see note 21.

CHF 1 000Share

capitalTreasury

sharesCapital

reservesRetained earnings

Other reserves 1

Total equity of Kuoni

shareholders

Non- controlling

interestsTotal

equity

Equity as at 1 January 2010 3 046 – 6 775 196 120 562 567 – 172 293 582 665 9 067 591 732

Net result 21 315 21 315 1 863 23 178Other comprehensive income: • Realisedgainsorlosses

from cash flow hedges transferred to income statement 4 930 4 930 4 930

• Recognisedgainsorlosses from cash flow hedges – 12 208 – 12 208 – 12 208

• Translationdifferences – 35 377 – 35 377 92 – 35 285• Incometaxesonother

comprehensive income 1 893 1 893 1 893Total comprehensive income 21 315 – 40 762 – 19 447 1 955 – 17 492

Dividends – 22 956 – 22 956 – 1 360 – 24 316Sale of treasury shares 140 1 003 1 143 1 143Use of treasury shares 2 692 9 545 12 237 12 237Changes in ownership interests – 122 – 122 – 788 – 910

Equity as at 31 December 2010 3 046 – 3 943 197 123 570 349 – 213 055 553 520 8 874 562 394

Net result 31 795 31 795 1 550 33 345Other comprehensive income: • Realisedgainsorlosses

from cash flow hedges transferred to income statement 10 599 10 599 10 599

• Recognisedgainsorlosses from cash flow hedges 14 396 14 396 14 396

• Translationdifferences – 64 186 – 64 186 24 – 64 162• Incometaxesonother

comprehensive income – 6 499 – 6 499 – 6 499Total comprehensive income 31 795 – 45 690 – 13 895 1 574 – 12 321

Dividends – 7 236 – 7 236 – 1 720 – 8 956Use of treasury shares – 550 – 470 – 1 020 – 1 020Capital increase 952 – 12 670 256 088 – 9 857 234 513 234 513Changes in ownership interests 0 0

Equity as at 31 December 2011 3 998 – 17 163 453 211 584 581 – 258 745 765 882 8 728 774 610


K u o n i G R o u p


historical cost are translated at the ex-change rate on the date of the transac-tion. Non-monetary assets and liabili-ties in foreign currencies that are stated at fair value are translated at the ex-change rate at the date the values were determined. Foreign exchange gains or losses arising from translation are recognised in the income statement.

■■■■ conSolidAtion oF FoReiGn SuBSidiARieS

The consolidated financial statements are presented in Swiss francs (CHF). The financial statements of foreign subsidiaries are prepared in their func-tional currency. Assets and liabilities (including goodwill and fair-value adjustments) of foreign subsidiaries are translated to CHF at year-end ex-change rates. Revenue, expenses and cash flow amounts are translated at weighted average ex change rates. For-eign exchange differences arising from the translation of foreign subsidiaries are recognised directly in equity as a translation difference.

■■■■ tuRnoVeR

The Group renders a wide range of trav-el services. The revenue from render-ing these services is recognised in the income statement at the time when the significant risks and rewards are trans-ferred to the customer. This is gener-ally the case on the date of departure or, in the case of destination manage-ment activities, on the date of arrival. Turnover comprises net sales revenues from the tour operating business (after deduction of sales taxes, value added tax, discounts and commissions) as well as commissions received from lei-sure travel retailing.

■■■■ employee BeneFitS

Wages, salaries, social security con-tributions, paid vacation and sick-ness-related absences, bonuses and

The full consolidation method is used, under which all assets, liabilities, in-come and expenses of the subsidiar-ies are included in the consolidated finan cial statements. The share of net assets and net profit or loss attributable to minority shareholders is presented separately as non-controlling inter-est on the consolidated statement of financial position, and separately as non-controlling interest in the con-solidated income statement.

■■■■ ASSociAteS

Associates are entities in which the Group is able to exercise significant influence, but not control, over the fi-nancial and operating policies. The consolidated financial statements in-clude the Group’s share of the total rec-ognised gains and losses of associates on an equity accounting basis, from the date significant influence com-mences until the date it ceases. When the Group’s share of losses exceeds the carrying amount of the associate, the carrying amount is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has incurred further obligations in respect of the associate.

■■■■ intRAGRoup tRAnSActionS And BAlAnceS

All intragroup transactions and bal-ances and any unrealised gains and losses or income and expenses arising from intragroup transactions are elim-inated in the consolidation process.

■■■■ FoReiGn cuRRency tRAnSActionS

Transactions in foreign currencies are translated at the exchange rate on the date of the transaction. Monetary as-sets and liabilities in foreign curren-cies are translated at year-end rates. Non-monetary assets and liabilities in foreign currencies that are stated at

In future, actuarial gains and losses will be recognised immediately in

“Other comprehensive income”. The previous option of deferring such rec-ognition using the “corridor approach” will no longer be permitted. Under that approach, such gains and losses were shown in results for the period if they exceeded 10% of the higher of the prior year’s fund assets or pension obliga-tions amount. As of 31 December 2011, unrecognised actuarial losses amount-ed to CHF 47 million. The adoption of the amendments to IAS 19 is thus likely to result in greater volatility in pension fund assets/liabilities and consolidated equity.

As a further consequence of the adop-tion of the amendments to IAS 19, in-terest on plan assets will no longer be estimated based on expected asset returns under current asset alloca-tions. In future, such interest will be based on the discount rate. The net periodic pension cost of the Kuoni Group would have been around CHF 2.7 million higher if the new provi-sions had been adopted for the 2011 business year.

■■■■ SuBSidiARieS

Subsidiaries are entities controlled by Kuoni Travel Holding Ltd. Control is the power to directly or indirectly govern the financial and operating policies of an entity so as to obtain benefits from its activities. This is the case where the Group holds more than 50% of the voting rights of an entity or where the Group has been granted management of an entity contractually or is exercising control by other means. Subsidiaries acquired in the course of the accounting year are consolidated from the date the control effectively commences. Subsidiaries sold in the course of the accounting year are de-consolidated as of the date on which control ceases.

> Accounting Principles

02_04_06_

new interpretations:

• IFRIC14:Prepaymentsofamini- mum funding requirement• IFRIC19:Extinguishingfinancial liabilities with equity instruments• improvementstoIFRSs(May2010)

The adoption and application of the above standards and interpretations had no effect on these consolidated fi-nancial statements.

■■■■ FutuRe iFRS cHAnGeS

With the exception of IAS 19, the Kuoni Group does not expect these new and revised standards and interpretations to have any significant effect on its re-sults and financial situation to date. They will, however, have an impact on transactions effected on or after 1 Janu-ary 2012. This applies in particular to:

The amendments to IAS 19 “Employ-ee Benefits” must be adopted from 1 January 2013. From its corresponding analyses to date, the Kuoni Group ex-pects such adoption to have the follow-ing impact on its consolidated results:

with IFRS requires management to make judgements, estimates and as-sumptions that affect the application of policies and reported amounts of as-sets, liabilities, income and expenses. Actual results may differ from these estimates. Critical judgements made by management in the application of IFRS that have a significant effect on the financial statements and key sources of estimation uncertainties are discussed separately. The accounting policies have been applied consistently to all periods presented in these con-solidated financial statements, with the exceptions described below.

■■■■ Adoption oF neW And ReViSed StAndARdS

The Kuoni Group adopted the follow-ing new and revised standards and new interpretations with effect from 1 January 2011:

Revised standards:

• IAS24:RelatedPartyDisclosures• IAS32:FinancialInstruments: Presentation (classifications of rights issues)• IAS27:Consolidatedand Separate Financial Statements

Kuoni Travel Holding Ltd. (the Com-pany) is domiciled in Zurich. The con-solidated financial statements for the year ended 31 December 2011 cover the Company and all its subsidiaries (Kuoni Group) and associates. The Com-pany is one of Europe’s leading tourism companies, active in the leisure travel and destination management field. The consolidated financial statements are prepared in accordance with Interna-tional Financial Reporting Standards (IFRS) and comply with Swiss law.

■■■■ BASiS oF pRepARAtion

The consolidated financial statements are presented in Swiss francs (CHF), rounded to the nearest thousand. The consolidated financial statements are prepared on the historical cost basis except for derivative financial instru-ments, financial assets and financial instruments available for sale, which are stated at their fair value. Non-current assets and discontinued op-erations held for sale are stated at the lower of the carrying amount and fair value less costs to sell.

The preparation of the consolidated financial state ments in conformity

accounting PrinciPles

Effective datePlanned

applicationNew Standards or Interpretations IFRS 10 Consolidated Financial Statements 1 January 2013 Reporting year 2013IFRS 11 Joint Arrangements 1 January 2013 Reporting year 2013IFRS 12 Disclosure of Interests in Other Entities 1 January 2013 Reporting year 2013IFRS 13 Fair Value Measurement 1 January 2013 Reporting year 2013IFRS 9 Financial Instruments 1 January 2015 Reporting year 2015

Revisions and amendments of Standards and Interpretations Deferred Tax: Recovery of Underlying Assets (Amendments to IAS 12) 1 January 2012 Reporting year 2012Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) 1 July 2012 Reporting year 2013IAS 19 Employee Benefits 1 January 2013 Reporting year 2013IAS 28 Investments in Associates and Joint Ventures 1 January 2013 Reporting year 2013

Disclosures – Netting of Financial Assets (Amendments to IFRS 7) 1 January 2013 Reporting year 2013Netting of Financial Assets and Liabilities (Amendments to IAS 32) 1 January 2014 Reporting year 2014


K u o n i G R o u p



investments are derecognised, the cu-mulative gain or loss previously recog-nised directly in equity is recognised in the income statement.

The fair value of listed available-for-sale investments is their quoted bid price at the balance sheet date. The fair value of unlisted investments is esti-mated using valuation techniques.

Time deposits (with a maturity ex-ceeding 12 months from the date of acquisition), long-term loans and other long-term receivables are stated at their amortised cost less impairment losses. Interest is recognised using the effec-tive interest rate method. The Group does not have any instruments classi-fied as “at fair value through profit and loss” (trading), with the exception of derivative financial instruments (see the accounting policy on Derivative Financial Instruments).

■■■■ time depoSitS, loAnS And AccountS ReceiVABle

Time deposits (with a maturity bet-ween 3 and 12 months from the date of acquisition), short-term loans and accounts receivable are stated at their cost less impairment losses. Impair-ment losses are recognised on an in-dividual basis, or on a portfolio basis (for accounts receivable), where there is objective evidence that impairment losses have been incurred. The allow-ance on bad debt and the receivable is written off if there are clear indicators (such as a certificate of unpaid debts) that the receivable is not collectable.

■■■■ cASH And cASH eQuiVAlentS

Cash and cash equivalents contain cash balances, postal giro accounts and bank current accounts as well as time deposits and money market in-vestments with a maturity not exceed-ing 3 months from the date of acqui-sition.

rights acquired from third parties or in a business combination. Intangible assets acquired in a business combina-tion are recognised separately from goodwill if they are subject to contrac-tual or legal rights or are separately transferable and their fair value can be reliably estimated. Intangible as-sets are stated at cost less accumulated depreciation and impairment losses. They are depreciated on a straight-line basis over their expected useful lives of three to ten years.

The Group does not have any intangi-ble assets with indefinite useful lives, except for goodwill.

■■■■ GoodWill

All business combinations are ac-counted for by applying the acquisition method. Goodwill arising from the ac-quisition of a subsidiary represents the excess of the cost of the acquisition over the fair value of the net identifi-able assets acquired, and is allocated to cash-generating units. In respect of associates, the carrying amount of goodwill is included in the carrying amount of the investment in the as-sociate. Purchase price adjustments prior to 1 January 2010 are still effected via goodwill.

Goodwill is stated at cost less accumu-lated impairment losses. Goodwill is tested at least annually for impairment.

■■■■ FinAnciAl inVeStmentS

The Group has investments classified as available for-sale which include mi-nority investments in listed and non-listed companies.

Available-for-sale investments are stat-ed at fair value, with any resultant gain or loss recognised directly in equity, except for impairment losses and, in the case of debt securities, foreign ex-change gains and losses. When these

impairment losses. Where an item of tangible fixed assets comprises major components having different useful lives, they are accounted for as separate tangible fixed asset items. The capitali-sation of subsequent costs is evaluated under the general recognition princi-ple for such assets at the time they are incurred.

Long-term leases of tangible fixed as-sets where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Tan-gible fixed assets acquired by way of finance lease are stated at an amount equal to the lower of their fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and any impairment losses. The related liabilities are recognised as non-cur-rent or current liabilities. The interest expense component of finance lease payments is recognised in the income statement using the effective interest rate method.

Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of the items of tangible fixed assets (owned assets and assets under finance leases and/or components thereof) concerned. Land is not depreciated. The estimated use-ful lives are as follows:

YearsBuildings 20– 50Other tangible fixed assets: Fixtures and equipment 10Fixtures and equipment at point of sale 8 IT hardware, office equipment and vehicles 5 Personal computers and office machines 3

■■■■ intAnGiBle ASSetS

Intangible assets comprise software, licences, trademark rights and similar

02_04_06_


■■■■ income tAXeS

Income tax on the profit or loss for the year comprises current and deferred taxes, based on the local tax rates ex-pected to apply for each Group com-pany. Income tax is recognised in the income statement except to the extent that it relates to items recognised di-rectly in equity, in which case it is rec-ognised in equity.

Current income tax is the expected tax payable on the taxable income for the year, calculated using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the statement of financial position lia-bility method, providing for tempo-rary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences relating to in-vestments in subsidiaries are not pro-vided for to the extent that they will probably not reverse in the foresee-able future. Deferred tax liabilities on undistributed profits of subsidiaries are recognised, unless dividend pay-ments to the ultimate Group holding company are not planned for the fore-seeable future. The amount of deferred tax recognised is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that fu-ture taxable profits will be available against which the asset can be utilised.

■■■■ tAnGiBle FiXed ASSetS

Tangible fixed assets are stated at cost less accumulated depreciation and

Defined contribution plans: Swit-zerland, the United Kingdom, Italy, France, Sweden, Denmark, Norway, the Netherlands, Austria, the USA, India and Japan.

The plans are funded by the Group’s subsidiaries (employer) and the em-ployees. Employer’s contributions to defined contribution plans are rec-ognised as an expense in the income statement when incurred. The Group’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by qualified actuaries using the projected unit cred-it method. To the extent that any cumu-lative unrecognised actuarial gain or loss of a plan exceeds 10% of the greater of the present value of the defined ben-efit obligation and the fair value of plan assets, that portion is recognised in the income statement over the expected av-erage remaining working lives of the employees participating in the plan. Where actuarial calculations result in a sur plus, this is only recognised to the extent that the Group derives a future economic benefit in the form of a reduction in plan contributions or a refund.

Due to local regulations, the Group maintains certain unfunded retire-ment benefit plans. The present value of the defined benefit obligation of un-funded plans is recognised as a provi-sion for employee benefits.

■■■■ opeRAtinG leASe pAymentS

Leases where all the major risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease. Details of the treatment of finance leas-es are provided under the accounting policy for tangible fixed assets.

non-monetary benefits are allocated to and shown in the year in which the employee provided the service con-cerned for the Kuoni Group. Where Kuoni provides long-term employee benefits, the costs are accrued to match the service to be provided by the em-ployee, and the liabilities of the Kuoni Group are discounted to take account of the time value of money where the effects are significant.

■■■■ SHARe-BASed compenSAtion

Certain employees participate in share-based employee participation plans, i.e. programmes based on equity instruments of Kuoni Travel Holding Ltd. For all share-based employee com-pensation, the current market value of the shares concerned is determined on the date the entitlement is granted, and is debited to personnel expense on the corresponding income statements throughout the period until the enti-tlement is awarded.

With all employee participation plans under which equity instruments are awarded, the compensation paid and any further amounts resulting from the exercising of such benefits are shown as increases in equity. In the case of cash-based employee participa-tion plans, the compensation awarded is shown as a liability at its fair value on the balance sheet date.

■■■■ RetiRement BeneFitS

State retirement benefits are provided in the majority of countries in which the Kuoni Group operates. The Group has additionally set up a number of legally independent retirement bene fit plans or insurance schemes in the following countries, which are generally funded by the employee and the employer:

Defined benefit plans: Switzerland, the United Kingdom, Netherlands and Norway.


K u o n i G R o u p



The results of the Group’s operating segments are regularly reviewed by the Board of Directors (as the Group’s chief operating decision-maker) to de-termine how resources should be dis-tributed and performance potential assessed. Segments are managed at the EBIT level.

The segment reporting reflects the management structure implemented within the Kuoni Group. This divides up leisure travel activities based on the geographical location of the revenue generating Group company, which in turn largely corresponds to the origin of the customers concerned. The same geographical breakdown based on the location of the Group company would be less meaningful for the activities of Destination Management, which largely provides services at holiday destinations.

The Group’s six reportable segments are Scandinavia, the United Kingdom & Benelux, Switzerland, Southern Eu-rope, Asia and Destinations. These are organised into three divisions, with Destinations forming both a division and a reportable segment.

Interdivisional revenues are account-ed for at market rates. The reportable segments apply the same accounting principles as the Group.

All operational assets and liabilities which can be directly or reasonably assigned to a reportable segment are shown within the divisions concerned.

■■■■ eARninGS peR SHARe (epS)

Earnings per share are calculated by dividing the net result attributable to Kuoni Travel Holding Ltd. sharehold-ers by the weighted average number of registered shares entitled to dividends during the year under review.

hedge accounting is applied, and any gain or loss on the hedging instrument is recognised in the income statement. Related foreign exchange gains and losses are also recognised in the in-come statement as incurred.

■■■■ non-cuRRent ASSetS Held FoR SAle And diScontinued opeRAtionS

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than from continuing use. The asset (or disposal group) must be avail-able for immediate sale in its present condition and the sale must be highly probable. Immediately before reclas-sification as held for sale, the meas-urement of the assets (and all assets and liabilities in a disposal group) is brought up to date in accordance with the applicable accounting standards. On initial reclassification as held for sale, non-current assets and disposal groups are recognised at the lower of their carrying amount or fair value less costs to sell. Any impairment losses on initial classification as held for sale are recognised in the income statement.

A discontinued operation is a compo-nent of the Group’s business that repre-sents a separate major line of business or a geographical area of operations, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be reclassified as held for sale, if earlier.

■■■■ SeGment RepoRtinG

A segment is a distinguishable com-ponent of the Group which provides products and / or services in a particu-lar geographical area or a particular tourism activity and for which sepa-rate financial information is available.

■■■■ HedGinG

cash Flow Hedges

Where a derivative financial instru-ment is designated as a foreign cur-rency hedge of the variability in cash flows of a firm commitment or a highly probable forecasted transaction, the effective part of any gain or loss on the derivative financial instrument is rec-ognised directly in equity. Contracts of this kind are classified as cash flow hedges.

When the firm commitment or fore-cast transaction results in the recogni-tion of a non-financial asset or liability, the cumulative gain or loss is removed from equity and included in the ini-tial cost of the non-financial asset or liability. Otherwise, the cumulative gain or loss is removed from equity and recognised in the income statement at the same time as the hedged transac-tion. The ineffective part of any gain or loss is recognised immediately in the income statement.

When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes the designation of the hedge relationship but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity and is rec-ognised in accordance with the above policy when the transaction occurs.

If the hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss recognised in equity is recognised immediately in the income statement.

Hedging of monetary Assets and liabilities

Where a derivative financial instru-ment is used to economically hedge the foreign exchange exposure of a rec-ognised monetary asset or liability, no

02_04_06_


that are unrecognised because the fu-ture outflow of resources is not prob-able or the amount concerned cannot be reliably determined. Contingent liabilities are not recognised in the statement of financial position, but are disclosed.

■■■■ AccountS pAyABle

Accounts payable are stated at cost.

■■■■ deRiVAtiVe FinAnciAl inStRumentS

The Group uses derivative financial in-struments primarily to hedge its expo-sure to foreign exchange risks arising from operational, financing and in-vestment activities. The Group largely uses forward-exchange contracts, cur-rency options and aviation fuel options for this purpose. In accordance with internal Group accounting principles, derivative financial instruments are not used for trading purposes. How-ever, derivatives used for hedging pur-poses that do not qualify as hedge ac-counting are accounted for as trading instruments.

All derivative financial instruments are initially recognised at fair value. Subsequent to initial recognition, de-rivative financial instruments are stat-ed at fair value. Derivative financial instruments with a positive fair value are included in ac counts receiv able, while those with negative fair value are included in accounts payable. Any gains or losses on the remeasurement of the fair value of derivative finan-cial instruments that do not qualify for hedge accounting are recognised immediately in the income statement. The fair value of the instruments used is the calculated amount that the Group would receive or pay to termi-nate the contracts at the balance sheet date, based on quotes from independ-ent counterparties.

the consideration paid, including any directly attributable costs, is presented as treasury shares and deducted from equity. Where such shares are subse-quently sold or reissued, any consid-eration received is included in equity.

■■■■ FinAnciAl deBt

Financial debt is initially recognised at fair value, less attributable transac-tion costs. Thereafter, financial debt is stated at amortised cost using the effec-tive interest rate method, with any dif-ference between cost and redemption value being recognised in the income statement un der financial expense over the borrowing period.

■■■■ pRoViSionS

A provision is recognised in the state-ment of financial position when the Group has a present legal or con-structive obligation as a result of a past event, when it is probable that an outflow of economic benefits will be required to settle the obligation and when a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are de-termined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. A provision for onerous con-tracts is recognised when the expect-ed benefits to be derived by the Group from a contract are lower than the una-voidable cost of meeting its obligations under the contract.

■■■■ continGent liABilitieS

Contingent liabilities are possible obli-gations arising from past events whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the Group’s control. They may also be present obligations

■■■■ impAiRment

The carrying amounts of the Group’s assets (other than deferred tax assets and pension assets, for which sepa-rate accounting policies apply) are reviewed at each balance sheet date to determine whether there is any in-dication of impairment. If any such indication exists, the asset’s recover-able amount is estimated. Goodwill is tested at least annually for impairment.

An impairment loss is recognised in the income statement whenever the carrying amount of an asset exceeds its recoverable amount. The recover-able amount of loans and other receiva-bles carried at amortised cost is calcu-lated as the present value of estimated future cash flows, dis counted at the original effective interest rate inherent in the asset. Receivables with a short duration carried at cost are not dis-counted. The recoverable amount of available-for-sale securities is their fair value. The recoverable amount of other assets is the greater of their fair value less costs to sell and their value in use.

An impairment loss in respect of good-will is not reversed. An impairment loss in respect of financial investments classified as available-for-sale is re-versed if there is a subsequent increase in the recoverable amount that can be related objectively to an event occur-ring after the impairment loss was rec-ognised. In respect of other assets, an impair ment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Reversals of impairment losses are rec-ognised in the income statement, with the exception of reversals of impair-ment losses on equity investments clas-sified as available-for-sale.

■■■■ tReASuRy SHAReS

When the Company or its subsidiaries purchase the Company’s own shares,


K u o n i G R o u p


02_04_07_

notes to the consoliDateD Financial statements

■■■■ 1. eXcHAnGe RAteS

The following exchange rates were used for the Group’s most important currencies:

■■■■ 2. AcQuiSitionS

■■■■ AcQuiSitionS 2011

• LimeTravelAB,Stockholm (100% acquired 1 March 2011), Tour Operating Business

• GulliversTravelAssociates,London (100% acquired 1 May 2011), Destination Management Services

In addition, our shareholdings in the following company were increased in the course of the year:

• UTEMegapolusGroupCoLtd,Moscow (from 80% to 92%), Tour Operating Business

Year-end rates in CHF Average rates in CHF

Currency Unit 2011 2010 2011 2010

USD 1 0.940 0.936 0.887 1.042GBP 1 1.451 1.449 1.421 1.609EUR 1 1.217 1.251 1.233 1.381DKK 1 0.164 0.168 0.166 0.185NOK 1 0.157 0.160 0.158 0.173SEK 1 0.136 0.140 0.137 0.145HKD 1 0.121 0.120 0.114 0.134INR 1 0.018 0.021 0.019 0.023KES 1 0.011 0.012 0.010 0.013THB 1 0.030 0.031 0.029 0.033

02_04_06_


are reasonable and that the recognised liabilities for income-tax-related un-certainties are adequate. Various in-ternal and external factors may have favourable or unfavourable effects on income tax assets and liabilities. These factors include, but are not limited to, changes in tax laws and regulations or their interpretation, and changes in tax rates. Any such changes that arise could impact the current and deferred income tax assets and liabilities rec-ognised in the statement of financial position in future periods. Further-more, in order to determine whether tax loss carry-forwards may be carried as assets, it is first necessary to criti-cally assess the probability of future taxable profits against which to offset them. Such profits depend themselves on a variety of influencing factors and developments.

anticipated turnover from cash-gener-ating units with capitalised goodwill could result in shortened useful lives or impairment.

provisions for Warranties and onerous contracts

Group companies may become in-volved in warranty proceedings or on-erous contracts in the course of their ordinary operating activities. Provi-sions for warranties and onerous con-tracts are measured on the basis of the information available and a realistic estimate of the expected outflow of resources. The outcome of these pro-ceedings may result in claims against the Kuoni Group that cannot be met at all or in full through provisions or insurance cover.

litigation provisions

The Kuoni Group is party to various le-gal proceedings. Further claims could also arise which might not be covered by existing liabilities or by insurance. Moreover, no assurance can be given that the extent of such matters will not increase, or that possible future law-suits, claims or proceedings will not be material. Any such changes that arise could impact the litigation provisions recognised in the statement of finan-cial position in future periods.

income taxes

As at 31 December 2011, the net receiv-able for current income taxes amounts to CHF 6.7 million, the net payable for current income taxes amounts to CHF 28.2 million and the net payable for de-ferred income taxes amounts to CHF 63.0 million (see note 23). Significant estimates are required in determin-ing the current and deferred tax assets and liabilities. Some of these estimates are based on interpretations of exist-ing tax laws and regulations. Man-agement believes that these estimates

Diluted earnings per share further take into account any dilution effect which might have resulted from the exercise of options.

■■■■ mAnAGement eStimAteS And ASSumptionS

Estimates and underlying assump-tions are reviewed on an ongoing ba-sis. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the es-timate was based, or as a result of new information or additional experience. Such changes are recognised in the pe-riod in which the estimate is revised.

The key assumptions about the future and key sources of estimation uncer-tainty that have a significant risk of causing a material adjustment to the carrying values of assets and liabili-ties within the next twelve months are described below.

tangible fixed Assets, Goodwill and other intangible Assets

The Kuoni Group has tangible fixed as-sets with a carrying value of CHF 201 million (see note 13), other intangible assets with a carrying value of CHF 347 million (see note 15) and goodwill with a carrying value of CHF 940 mil-lion (see note 14).

Goodwill is reviewed annually for im-pairment. The net book values of tan-gible fixed assets and other intangible assets are reviewed if there is any in-dication of impairment. To assess if any impairment exists, estimates are made of the future cash flows expect-ed to result from the use of the asset and its eventual disposal. Actual out-comes could vary significantly from such estimates of discounted future cash flows. Factors such as changes in the planned use of buildings, the presence or absence of competition, technical obsolescence or lower than


K u o n i G R o u p


> Notes to the Consolidated Financial Statements

■■■■ GulliVeRS tRAVel ASSociAteS (GtA), london

The Kuoni Group acquired Gullivers Travel Associates (GTA) in full, together with its subsidiaries in Europe, Asia and the Americas, at the beginning of May 2011. GTA is one of the world’s leaders in the rapidly-growing online travel services market, with operations in 26 cities. GTA’s online reservation facilities were used to book some 12 million hotel bednights in 2010.

GTA’s core business is centred on hotel reservations, coach services, transfers, city sightseeing tours and destination services for group and individual travellers. In strategic terms, GTA excellently enhances Kuoni’s traditional tour operating business. The new acquisition also fits well into Kuoni Destination Management (KDM): while GTA’s strengths lie in the swiftly-growing online business-to-business services market, KDM specialises in group leisure travel arrangements. GTA is also strongly anchored in the rapidly-expanding Asian market. GTA’s results are incorporated into the reporting segment Destinations.

The GTA purchase price amounts to USD 664 million in cash. The assets and liabilities in the table were taken over as shown: The acquisition- related intangible assets identified were valued at CHF 273 million while non-tax-deductible goodwill amounted to CHF 600 million. The resulting goodwill largely reflects the value of the synergies and future earnings which Kuoni expects to generate from the acquisition. The purchase price is not yet final, and may change as a result of still-pending contractual conditions. In view of the fact that the corresponding valuations have not yet been completed, the information on the assets and liabilities acquired is not final.

02_04_07_



• TBAGlobal,NewYork(assetdealeffective1February2010), Destination Management Services • KroneGolfTours,Copenhagen (asset deal effective 1 September 2010), Tour Operating Business • GulfDunesLLC,Dubai(100%acquired1December2010), Destination Management Services • ReemToursandTravelLLC,Dubai(100%acquired 1 December 2010), Destination Management Services • BestToursS.p.A.,Milan (100% acquired 31 December 2010), Tour Operating Business • BestTours,Brussels (asset deal effective 31 December 2010), Tour Operating Business

In addition, our shareholdings in the following company were increased in the previous year:

• KuoniPrivateSafaris(E.A.),Nairobi (from 80% to 100%), Destination Management Services

■■■■ BooK VAlue And puRcHASe pRice oF tHe AcQuiSitionS

CHF MillionGullivers Travel

Associates Others

Total acquired

2011

Total acquired

2010

Tangible fixed assets 18.8 0.0 18.8 0.2Goodwill 599.8 1.5 601.3 13.5Other intangible assets 293.2 1.4 294.6 8.8Other tangible assets 5.8 0.1 5.9 0.0Cash and cash equivalents 6.5 1.1 7.6 3.2Time deposits 0.0 0.3 0.3 0.7Accounts receivable/other receivables 188.8 0.4 189.2 8.9Prepaid expenses 21.7 0.2 21.9 3.1Non-current liabilities – 73.0 – 0.4 – 73.4 – 2.0Current liabilities – 446.1 – 1.6 – 447.7 – 17.3Non-controlling interest 0.0 0.0 0.0 0.0

Purchase price in cash 615.5 3.0 618.5 19.1

Cash and cash equivalents acquired – 6.5 – 1.1 – 7.6 – 3.2Purchase price not yet paid – 1.7 – 0.4 – 2.1 – 0.7Sales price adjustments on prior year acquisitions 0.0 – 1.2 – 1.2 0.0

Cash flow used for acquisitions 607.3 0.3 607.6 15.2


K u o n i G R o u p


GTA reported turnover of CHF 1 346 million for the eight-month period of its Kuoni Group ownership in 2011 and an EBIT after amortisation of intangible assets of CHF 16.4 million. The Kuoni Group incurred acquisition and integration costs of CHF 20.2 million as a result of the acquisition. These are included in “Other operating expense”.

If the acquisition had been effected as of 1 January 2011, GTA would have contributed a CHF 472 million higher turnover and a CHF 8 million lower EBIT result.

■■■■ otHeR AcQuiSitionS 2011

The second acquisition in 2011, of Lime Travel, is of minor importance in view of its size. The purchase price amounted to SEK 21 million in cash. The company generated turnover of CHF 9 million in the ten-month reporting period and achieved a breakeven EBIT result.

Had the two acquisitions been effected on 1 January 2011, the Kuoni Group would have reported an additional CHF 474 million of turnover and a CHF 8 million lower EBIT result for the year.


02_04_07_



The acquisitions effected in 2010 are of negligible significance in terms of their size. The total purchase price of all these acquisitions amounted to CHF 19.1 million in cash. The companies acquired generated an aggre - gate turnover of CHF 28.9 million under their Kuoni Group ownership in 2010 (or a turnover of CHF 140.3 million for the full year) and reported an aggregate negative EBIT (after amortisation of intangible assets) of CHF 0.2 million (and a negative EBIT of CHF 2.2 million for the full year).

If all these acquisitions had been completed on 1 January 2010, the Kuoni Group would have reported a CHF 111.4 million higher turnover and a CHF 2.0 million lower EBIT for the 2010 business year.


K u o n i G R o u p



■■■■ 3. SeGment RepoRtinG

Information by reportable segments/divisions Scandinavia UK & Benelux

Northern Region Switzerland

Southern Europe Asia

Southern Region Destinations

Total reportable segments/divisions Corporate Group

CHF 1000 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

External turnover 957 362 1 044 394 506 692 594 585 1 464 054 1 638 979 711 730 796 933 303 177 352 590 369 712 315 964 1 384 619 1 465 487 2 262 652 879 179 5 111 325 3 983 645 Turnover with other segments 565 612 2 0 564 612 1 8 1 798 2 582 171 182 1 623 2 368 142 544 137 707 144 731 140 687 Turnover of divisions 957 927 1 045 006 506 694 594 585 1 464 618 1 639 591 711 731 796 941 304 975 355 172 369 883 316 146 1 386 242 1 467 855 2 405 196 1 016 886 5 256 056 4 124 332 Eliminations – 144 731 – 140 687 Turnover 5 111 325 3 983 645

GOP 171 961 201 020 87 059 100 455 259 020 301 475 166 146 181 788 49 508 57 709 185 296 167 760 400 950 407 257 365 701 164 419 1 025 671 873 151 1 025 671 873 151GOP – margin 18.0% 19.2% 17.2% 16.9% 17.7% 18.4% 23.3% 22.8% 16.2% 16.2% 50.1% 53.1% 28.9% 27.7% 15.2% 16.2% 20.1% 21.9%

Depreciation and amortisation – 4 905 – 5 147 – 7 438 – 8 051 – 12 343 – 13 198 – 9 242 – 9 373 – 2 949 – 2 465 – 8 463 – 9 077 – 20 654 – 20 915 – 42 486 – 7 701 – 75 483 – 41 814 – 17 324 – 13 055 – 92 807 – 54 869

Earnings before interest and taxes (EBIT) 28 506 43 922 2 927 8 145 31 433 52 067 8 070 8 339 – 8 869 – 4 465 48 599 42 221 47 800 46 095 47 606 21 190 126 839 119 352 – 52 653 – 60 989 74 186 58 363EBIT – margin 3.0% 4.2% 0.6% 1.4% 2.1% 3.2% 1.1% 1.0% – 2.9% – 1.3% 13.1% 13.4% 3.4% 3.1% 2.0% 2.1% 1.5% 1.5%

Share in result from associates 0 0 0 0 0 0 – 405 – 43 0 0 – 1 600 – 1 596 – 2 005 – 1 639 0 0 – 2 005 – 1 639 88 167 – 1 917 – 1 472

Assets 244 467 341 940 290 710 322 688 534 153 664 277 239 597 275 046 68 787 71 098 186 323 212 068 493 389 556 722 1 412 985 377 610 2 440 527 1 598 609 58 385 1 222 332 1 2 498 912 1 820 941Liabilities 223 343 247 201 127 951 144 708 350 269 391 558 210 691 182 539 67 683 67 062 83 992 88 970 361 048 337 080 631 064 223 526 1 342 381 952 164 381 921 1 306 383 1 1 724 302 1 258 547

Capital expenditure 6 799 3 646 4 819 4 621 11 618 8 267 5 909 6 316 4 875 2 194 13 301 6 676 24 085 15 186 12 175 3 236 47 878 26 689 9 314 16 655 57 192 43 344

Number of staff (full-time equivalents): • annualaverage 915 984 768 709 1 683 1 693 1 107 1 166 545 503 3 677 3 023 5 329 4 692 3 867 2 262 10 879 8 647 169 125 11 048 8 772• atyear-end 931 1 027 814 724 1 745 1 751 1 066 1 153 520 525 3 810 3 152 5 396 4 830 4 795 2 319 11 936 8 900 168 148 12 104 9 048

1 The assets and liabilities shown under “Corporate” include the Corporate items from the statement of financial position and the financial assets / liabilities and tax assets / liabilities of the Kuoni Group.

02_04_07_


186 | 187 K u o n i A n n u A l R e p o R t # 2 0 1 1fig. 4: The Jinshanling section of the Great Wall of China, 135 km north of Beijing, the morning after a winter snow fall.

transcenDingour own limitations.


K u o n i G R o u p



■■■■ BReAKdoWn oF ASSetS By GeoGRApHicAl AReA

■■■■ 4. tuRnoVeR

Turnover for 2011 was CHF 1 127 million or 28.3% higher than in the prior year. Organic growth increased turnover by 1.2%, acquisitions added 35.4% and currency movements reduced turnover volume by 8.3%.

■■■■ 5. GRoSS pRoFit

Gross profit comprises turnover less all directly allocable airline, ship, rail, hotel, car rental and similar costs. Gross profit also includes the currency gains or losses from exchange rate differences realised or incurred by individual subsidiaries in the course of their operations.

■■■■ 6. peRSonnel eXpenSe

Personnel expense increased by 14.2%. Organic growth accounted for + 0.8%, acquisitions for + 21.4% and currency movements for − 8.0% of the overall change.

CHF 1 000

Tangible fixed assets

31 Dec 2011

Intangible assets

31 Dec 2011Total

31 Dec 2011

Tangible fixed assets

31 Dec 2010

Intangible assets

31 Dec 2010Total

31 Dec 2010

Switzerland 74 904 44 451 119 355 76 729 45 959 122 688International 125 895 1 242 663 1 368 558 103 379 451 265 554 644

Total 200 799 1 287 114 1 487 913 180 108 497 224 677 332

CHF 1 000 2011 2010Change

in %

Wages and salaries 418 326 365 166 + 14.6Pension costs 37 045 36 922 + 0.3Other social security costs 35 805 29 827 + 20.0Other personnel costs 33 499 27 638 + 21.2

Total 524 675 459 553 + 14.2

02_04_07_


■■■■ BReAKdoWn oF tuRnoVeR By GeoGRApHicAl AReA

1 Tour Operating Business and Destination Management Services

■■■■ BReAKdoWn oF tuRnoVeR By ActiVity

■■■■ inFoRmAtion on SiGniFicAnt cuStomeRS

No customer accounts for more than 10% of total turnover.

■■■■ BReAKdoWn oF eBit

An exceptional investment and cost-reduction programme was launched at the end of January 2009. The three-year programme envisages total investments of CHF 106 million. The programme has seen key initiatives launched in the areas of electronic distribution channels, global market-ing and branding and raising employee skills and efficiency. A total of CHF 35.8 million was spent on the programme in 2011 (CHF 40.5 million in 2010).

CHF 1 000 2011 2010Change

in %

Switzerland 1 725 537 827 180 – 12.3International 4 420 647 3 202 568 + 38.0Eliminations – 34 859 – 46 103 + 24.4

Total 5 111 325 3 983 645 + 28.3

CHF 1 000 2011 2010Change

in %

Tour Operating Business 2 845 788 3 102 470 – 8.3Destination Management Services 2 405 196 1 016 886 + 136.5Eliminations – 139 659 – 135 711 – 2.9

Total 5 111 325 3 983 645 + 28.3

CHF 1000 2011 2010Change

in %

Total EBIT of reportable segments/divisions 126 839 119 352 + 6.3Corporate • Corporatecost – 16 886 – 20 530 + 17.7• Investmentandcost-reductionprogramme – 35 767 – 40 459 + 11.6

Total 74 186 58 363 + 27.1


K u o n i G R o u p



investment risk. The members of group-wide senior management are remunerated under the same MPP, but with different proportions of the fixed and variable and the short-term and long-term incentive components.

Share-based compensation costs for 2011 totalled CHF 8.4 million (prior year: CHF 13.4 million). The average price of the 27 572 shares used for such purposes in 2011 amounted to CHF 306 (prior year: 56 627 shares used; average price CHF 237). The price of each share so used is determined by its stockmarket price on assignment, less a discount for the corresponding vesting period. An adjustment of the performance factor for current plans reduced share-based compensation costs by CHF 9.5 million (38 571 shares).

■■■■ deFined BeneFit RetiRement plAnS

The Group incurs costs for retirement benefit plans in accordance with prevailing regulations in the countries in which it operates. The benefits paid to insured employees are generally calculated as a percentage of their expected salary in the last few years prior to retirement.

The following assumptions (weighted averages) used in actuarial calculations were adjusted to take account of the economic situation in the country concerned:

The expected return on capital on the investments of funded pension plans is based on the long-term historical performance of the individual asset categories for each pension plan.

Where funded retirement plans exist, the costs of occupational pension coverage are transferred in accordance with the legislation in force in the country concerned. The surplus es of the major defined benefit plans are shown below:

2011 2010

Discount rate 2.50% 3.20%Expected return on investment 3.20% 4.10%Salary increases 1.70% 1.70%Rate of pension increase 0.30% 0.30%

02_04_07_


■■■■ SHARe-BASed compenSAtion

The members of the Board of Directors (exclusively non-executive directors) receive fixed compensation. 50% of this total compensation is paid in cash form; the remaining 50% is paid in shares. The issue price of the shares concerned is redefined each year and amounts to the average of all closing prices for the last ten trading days of the month before the Ordinary General Meeting of Shareholders. The shares are awarded on the trading day following the day of dividend distribution after the Ordinary General Meeting of Shareholders, and are subject to a blocking period of three years.

A Management Performance Plan (MPP) compensation system has been established for Group Executive Board members and senior management groupwide. Under the MPP, the members of the Group Executive Board receive a yearly compensation which is divided roughly equally into a fixed and a variable performance-based component. Around one-third of this variable component takes the form of a short-term incentive, while the remaining two-thirds take the form of a long-term incentive.

The short-term incentive is based in equal amounts on the achievement of annual financial targets and personal targets, and is paid in cash. The long-term incentive, which uses a “Performance Share Plan” to assign entitled persons a certain number of Kuoni shares at the beginning of each plan period (business year), is based by contrast on the value-adding performance of the person concerned over a three-year period. The number of shares assigned at the beginning of the plan period will be multiplied by a factor of between 0.25 and 3, depending on the employee’s subsequent performance in the period concerned. The basis of this financial performance assessment is the value-based management performance indicator known as “Kuoni Economic Profit” or KEP. The shares finally awarded – based on the employee’s performance – will be issued in April following the three-year vesting period. These shares will not be subject to any subsequent blocking period.

The KEP target for the Kuoni Group underlying this compensation component, which is used to determine the payment of any variable compensation amount, is itself based on investors’ expected returns on the market value of the Kuoni Group and on the corresponding


K u o n i G R o u p



Retirement plan obligations were as follows:

The actuarially determined retirement benefit costs stated above are set against the Group’s contributions to retirement benefit plans. The following table gives a calculation of the pension costs of the Group’s major defined benefit plans:

The following table shows the (deficit)/surplus held by the Group’s pension plans, the impact of differences between the expected and the actual returns on pension fund assets and the components of the actuarial profits / (losses) on the defined benefit obligation for the past five years.

CHF 1 000 2011 2010

Present value of obligation as at 1 January 354 277 338 054

Current employer service cost 10 365 8 825Interest cost 11 072 12 123Employee contributions 5 190 5 598Benefits paid – 25 311 – 20 330Actuarial losses on obligation 18 351 14 834Translation differences – 61 – 4 827

Present value of obligation as at 31 December 373 883 354 277

CHF 1 000 2011 2010

Current employer service cost 10 365 8 825Interest costs 11 072 12 123Expected return on assets – 14 584 – 13 894Recognition of actuarial losses 163 40Effect of the asset ceiling 514 1 323

Pension cost recognised in income statement 7 530 8 417

Other pension cost (defined contribution plans and state retirement benefits) 29 515 28 505Total pension costs 37 045 36 922

CHF 1 000 2011 2010 2009 2008 2007

Assets of independent retirement plans at fair value 345 708 355 875 340 322 308 713 398 321Defined benefit obligations (DBO) of the funded pension plans – 373 883 – 354 277 – 338 054 – 313 984 – 348 133

Deficit – 28 175 1 598 2 268 – 5 271 50 188

Experience-based adjustments to plan assets held – 12 788 11 114 17 005 – 73 333 – 14 998Experience-based adjustments to DBO 5 538 1 604 – 5 161 – 1 307 3 197Impact of changes in actuarial assumptions on DBO – 23 889 – 16 438 – 6 569 13 305 29 380

02_04_07_


The assets of the independent retirement plans were as follows:

Employers’ contributions for 2012 are estimated at CHF 8.3 million. Actual income from investments for 2011 amounted to CHF 1.8 million (2010: CHF 25.0 million). The assets of the retirement plans were invested in the following asset categories at year-end:

The retirement plans hold no shares or other equity instruments of Kuoni Travel Holding Ltd., Zurich.

CHF 1 000 31 Dec 2011 31 Dec 2010

Assets of independent retirement plans at fair value 345 708 355 875Defined benefit obligations (DBO) of the funded pension plans – 373 883 – 354 277

Deficit – 28 175 1 598

Cumulative, unrecognised actuarial and investment loss (net) 46 707 16 249Unrecognised part of defined benefit assets 0 0

Defined benefit assets recognised in the statement of financial position (net) 18 532 17 847

Pension assets 18 775 18 112Pension liabilities 243 265

CHF 1 000 2011 2010

Fair value of assets as at 1 January 355 875 340 322

Expected return on assets 14 584 13 894Employer contributions 8 210 9 133Employee contributions 5 190 5 598Benefits paid – 25 311 – 20 330Actuarial losses on assets – 12 788 11 114Translation differences – 52 – 3 856

Fair value of assets as at 31 December 345 708 355 875

CHF 1 000 31 Dec 2011 31 Dec 2010

Equity securities 26% 27%Debt securities 53% 53%Real estate 9% 8%Other assets 12% 12%

Total assets 100% 100%


K u o n i G R o u p



■■■■ 10. FinAnciAl ReSult

The increase in interest expenses derives from the syndicated loan facility.

In 2010 Kuoni made a takeover offer for Et-china.com International Holdings Ltd. in Guangzhou (China). However, there was a lack of clarity among shareholders of GZL Guangzhou International Travel Services, a tour operator in which Et-china holds a stake and which is the main interest to Kuoni. Kuoni was not affected by this lack of clarity. Because of this unresolved situation, the takeover could not be made. Acquisition costs of CHF 3.1 million were incurred in prior year through the activities connected with this planned takeover. These are shown under other financial expenses.

■■■■ 11. income tAXeS

CHF 1 000 2011 2010

Interest income 5 171 4 176Dividend income 10 7Share in profits from associates 145 187Non-operational exchange gains (net) 1 040 0Other financial income 307 221

Financial income 6 673 4 591

Interest expenses – 12 417 – 9 244Non-operational exchange losses (net) 0 – 8 923Share in losses from associates – 2 062 – 1 659Other financial expenses – 1 589 – 3 100

Financial expense – 16 068 – 22 926

CHF 1 000 2011 2010

Current taxes 34 429 18 876Deferred taxes – 2 983 – 2 026

Total 31 446 16 850

02_04_07_


■■■■ 7. otHeR opeRAtinG eXpenSe

■■■■ 8. depReciAtion And AmoRtiSAtion

Breakdown of depreciation and amortisation by type of asset.

■■■■ 9. eARninGS BeFoRe inteReSt And tAXeS (eBit)

EBIT for 2011 was CHF 15.8 million or 27.1% up on the prior-year result. Organic growth increased EBIT by 28.2%, acquisitions increased it by 16.9% and currency movements decreased EBIT by 18.0%.

CHF 1 000 2011 2010Change

in %

Rent and utilities 67 921 67 371 + 0.8Aircraft leasing 19 015 26 121 – 27.2Administrative and other expenses 164 507 115 086 + 42.9

Total 251 443 208 578 + 20.6

CHF 1 000 2011 2010Change

in %

On buildings 5 266 4 520 + 16.5On other tangible fixed assets 23 221 21 849 + 6.3On intangible assets 64 320 28 500 + 125.7

Total 92 807 54 869 + 69.1


K u o n i G R o u p



■■■■ 13. tAnGiBle FiXed ASSetS

■■■■ FiRe inSuRAnce VAlueS

CHF 1 000Land and buildings

Other tangible fixed assets

Total tangible fixed assets

Purchase cost as at 1 January 2010 205 616 152 060 357 676

Additions 2 493 22 921 25 414Disposals – 869 – 21 774 – 22 643Acquisitions 0 161 161Translation differences – 12 969 – 11 322 – 24 291

Purchase cost as at 31 December 2010 194 271 142 046 336 317

Accumulated depreciation as at 1 January 2010 69 087 90 218 159 305

Additions 4 520 21 849 26 369Disposals – 32 – 19 857 – 19 889Translation differences – 2 320 – 7 256 – 9 576

Accumulated depreciation as at 31 December 2010 71 255 84 954 156 209

Net book value as at 31 December 2010 123 016 57 092 180 108


Additions 6 538 29 497 36 035Disposals 0 – 16 998 – 16 998Acquisitions 5 269 13 582 18 851Translation differences – 2 028 – 5 911 – 7 939


Accumulated depreciation as at 1 January 2011 71 255 84 954 156 209

Additions 5 266 23 221 28 487Disposals 0 – 15 377 – 15 377Translation differences – 241 – 3 611 – 3 852

Accumulated depreciation as at 31 December 2011 76 280 89 187 165 467


CHF 1 000 31 Dec 2011 31 Dec 2010

Buildings 294 860 276 182Furniture, fixtures and equipment 183 248 129 987

02_04_07_


Tax expense can be analysed as follows:

The weighted average tax rate of the Group for the year under review was 16% (2010: 28%), The various tax rates applicable to the group subsidiaries’ positive and negative results reduced the tax rate in 2011. Depending on the country involved, profit distributions have varying tax consequences, the extent of which cannot be estimated.

The Group has the following unrecognised tax loss carried forward:

■■■■ 12. eARninGS peR SHARe (epS)

CHF 1 000 2011 2010

Tax expense at the average weighted Group tax rate (net) 10 398 11 129Non-tax-deductible expenses 4 929 1 605Tax-free income – 2 313 – 923Capitalised deferred tax assets from previously not recognised tax loss carry-forwards – 1 193 – 2 700Utilisation of tax loss carry-forwards, not recognised in the statement of financial position – 953 – 4 501Tax effect from current losses, not eligible for recognition as assets 20 467 11 452Effect of changes in tax legislation – 267 – 85Tax expense for earlier periods 378 873

Tax expense reported 31 446 16 850

Expiring CHF 1 000 2011 2010

Up to 1 year 51 5 9971 to 5 years 146 122 127 994Over 5 years 66 957 32 590Unlimited 141 871 124 572

Total 355 001 291 153

Not capitalised maximum positive tax effect 103 494 84 360

2011 2010

Basic earnings per registered share B in CHF 9.22 7.43Net result attributable to nominal shareholders B of Kuoni Travel Holding Ltd. in CHF 1 000 29 702 19 901Weighted average number of nominal shares B outstanding 3 220 792 2 680 030

Basic earnings per registered share A in CHF 1.84 1.49Net result attributable to nominal shareholders A of Kuoni Travel Holding Ltd. in CHF 1 000 2 093 1 414Weighted average number of nominal shares A 1 135 075 952 000


K u o n i G R o u p



full regard to country- and currency-specific risks relating to cash flows. The management believes that – barring extraordinary events – no possible changes to the assumptions made would cause the carrying amount of the Group’s goodwill to exceed its recoverable value.

■■■■ 15. otHeR intAnGiBle ASSetS

Intangible assets deriving from acquisitions consist largely of capitalised trademark rights, while further intangible assets include software purchased as well as software projects in the course of construction totalling CHF 7.5 million (2010: CHF 0).

CHF 1 000

Intangible assets from acquisitions

Further intangible

assets

Total other intangible

assets


Additions 0 17 930 17 930Disposals 0 – 8 085 – 8 085Acquisitions 8 733 64 8 797Translation differences – 13 367 – 2 764 – 16 131


Accumulated depreciation and amortisation as at 1 January 2010 40 712 28 169 68 881

Additions 13 816 14 684 28 500Disposals 0 – 8 081 – 8 081Translation differences – 4 932 – 1 980 – 6 912

Accumulated depreciation and amortisation as at 31 December 2010 49 596 32 792 82 388



Additions 0 21 157 21 157Disposals 0 – 8 551 – 8 551Acquisitions 274 101 20 521 294 622Translation differences – 17 281 – 2 282 – 19 563


Accumulated depreciation and amortisation as at 1 January 2011 49 596 32 792 82 388

Additions 38 723 25 597 64 320Disposals 0 – 8 276 – 8 276Translation differences – 561 – 994 – 1 555

Accumulated depreciation and amortisation as at 31 December 2011 87 758 49 119 136 877



02_04_07_

■■■■ 14. GoodWill

The cash-generating units of the Kuoni Group are considered to be its reportable segments. These are examined to determine whether currently capitalised goodwill amounts still reflect the value thereof, or whether impairments are required. Goodwill is allocated to the cash-generating units of the Kuoni Group as follows:

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 pays due and full regard to the organisational changes and 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%. The discount rates have been calculated on the basis of the weighted average capital costs of the Kuoni Group, with due and

CHF 1 000 2011 2010

Net book value as at 1 January 383 064 405 286

Acquisitions 601 265 13 482Purchase price adjustments – 1 246 – 420Translation differences – 43 305 – 35 284

Net book value as at 31 December 939 778 383 064

CHF 1 000Discount rate before taxes 31 Dec 2011 31 Dec 2010

Total Northern Region 217 898 221 053Scandinavia 11.8% 115 197 118 087UK & Benelux 12.9% 102 701 102 966

Total Southern Region 57 347 60 028Switzerland 9.5% 32 154 32 154Southern Europe 14.4% 10 585 10 881Asia 22.0% 14 608 16 993

Destinations 13.2% 664 533 101 983Total 939 778 383 064


K u o n i G R o u p



■■■■ 18. cASH And cASH eQuiVAlentS

Cash and cash equivalents are denominated in the following currencies:

The average interest rates are:

CHF 1 000 31 Dec 2011 31 Dec 2010

Cash holdings and bank current accounts 252 388 463 692Time deposits and money market investments with original term up to 90 days 36 473 124 206

Total 288 861 587 898

CHF 1 000 31 Dec 2011 31 Dec 2010

CHF 33 846 190 839GBP 51 325 119 021EUR 52 246 52 548USD 36 521 43 769SEK 9 145 82 789Other 105 778 98 932

Total 288 861 587 898

2011 2010

CHF 0.1% 0.2%GBP 0.5% 0.6%EUR 0.9% 0.5%USD 0.3% 0.4%SEK 1.8% 0.6%


02_04_07_

■■■■ 16. inVeStmentS in ASSociAteS

■■■■ 17. otHeR FinAnciAl ASSetS

Other financial assets comprise minority holdings and loans amounting to CHF 23.5 million (2010: CHF 24.2 million) and pension assets from funded pension plans totalling CHF 18.8 million (2010: CHF 18.1 million) – see note 6. As in the previous year, there are no loans to associates.

CHF 1 000 2011 2010


Share in profits 145 187Share in losses – 2 062 – 1 659Investment in associates 402 1 958


CHF 1 000 2011 2010


Additions 5 540 6 747Disposals – 5 387 – 8 599Acquisitions 1 141 5Translation differences – 1 290 – 1 295




02_04_07_

■■■■ 19. time deposits

This position contains time deposits maturing in more than 90 days.

AccesstothetimedepositsdenominatedinSEK,amountingto CHF76.1million,islimitedduetocontractswiththeBritishCivilAviationAuthority(CAA).

Timedepositsaredenominatedinthefollowingcurrencies:

Theaverageinterestratesare:

CHF 1 000 31 Dec 2011 31 Dec 2010

EUR 0 49GBP 2 823 0USD 106 781SEK 76 104 78 119Other 7 841 7 419

Total 86 874 86 368

2011 2010

EUR 1.0% 1.0%GBP 1.0% –USD 0.6% 0.7%SEK 1.5% 1.1%


K u o n i G R o u p

202 | 203


■■■■ 20. Accounts ReceivAble And otheR ReceivAbles

Other receivables include tax receivables of CHF 6.7 million (2010: CHF 4.8 million).

Accounts receivable show the following payment dates:

Flat-rate value adjustments to overdue receivables totalled CHF 2.4 mil lion (2010: CHF 2.5 million) to receivables between 61 and 90 days overdue and CHF 20.6 million (2010: CHF 13.1 million) to receivables over 90 days overdue. Some of the underlying receivables are expected to be paid. The receivables with no payment date relate largely to long-term custom-er relations with agents or processing companies.

Flat-rate value adjustments showed the following developments:

CHF 1 000 31 Dec 2011 31 Dec 2010

Receivables from customers 295 154 150 951Receivables from associates 0 15Other receivables 62 099 47 012Flat-rate value adjustments – 23 042 – 15 615Positive fair values of derivative financial instruments held 32 723 27 731

Total 366 934 210 094

CHF 1 000 31 Dec 2011 31 Dec 2010

Payment not yet due 213 319 122 008Payment overdue 1 to 30 days 111 025 45 399Payment overdue 31 to 60 days 31 878 22 726Payment overdue 61 to 90 days 12 793 16 628Payment overdue by more than 90 days 20 961 18 948 389 976 225 709Flat-rate value adjustments – 23 042 – 15 615

Total 366 934 210 094

CHF 1 000 2011 2010

Flat-rate value adjustments 1 January 15 615 15 478

Change (net) 7 953 1 034Translation differences – 526 – 897

Flat-rate value adjustments 31 December 23 042 15 615

204 | 205 K u o n i A n n u A l R e p o R t # 2 0 1 1fig. 5: One of the highest volcanic peaks known as the Tezouaï in the bizarre Hoggar Mountains of southern Algeria.

leaving wellenough alone.


K u o n i G R o u p



■■■■ compoSition oF SHARe cApitAl

■■■■ conditionAl cApitAl

Conditional capital issuable via the exercise 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 international capital markets and/or via the exercise of options granted to shareholders amounts to a maximum of CHF 384 000, with a further maximum of CHF 96 000 reserved for employee stock option plans.

■■■■ AutHoRiSed cApitAl

There is an authorised capital of maximum CHF 571 200. We refer to the related information on page 243 of the financial statements of Kuoni Travel Holding Ltd.

■■■■ 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.

Type of shareRegistered

share ARegistered

share B Total

Number 1 249 500 3 748 500 4 998 000Nominal value in CHF 0.20 1.00 –

Share capital CHF 249 900 3 748 500 3 998 400in % 6.25 93.75 100.00

Voting rights Number 1 249 500 3 748 500 4 998 000in % 25.00 75.00 100.00


02_04_07_

■■■■ 21. eQuity

The capital administered by the Kuoni Group corresponds to the consoli-dated equity. Kuoni’s aims in administering this capital are:

• tomaintainthesoundstructureofitsstatementoffinancialposition based on going-concern values; • tomaintainthefinancialscoperequiredforfutureinvestmentsand acquisitions; • toensureareturnforinvestorsthatiscommensuratewiththeir 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 31.0% on 31 December 2011. The Kuoni Group is not subject to any legal covenants relating to minimum equity requirements. For covenants relating to financial indebtedness, see page 213.

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 distribution policy and generally distributes 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 17 April 2012 that shareholders receive a with -holding tax-free appropriation from the newly created capital contribution reserve. This payment should also pay due regard to the Kuoni Group’s long-term earnings distribution policy. In view of this, the Board of Directors will recommend the distribution of CHF 0.60 per registered share A and CHF 3.00 per registered share B for the 2011 business year. The payout ratio amounts to 34%.

CHF 1 000 31 Dec 2011 31 Dec 2010

Equity attributable to shareholders of Kuoni Travel Holding Ltd. 765 882 553 520Non-controlling interests 8 728 8 874

Total equity 774 610 562 394

Total assets 2 498 912 1 820 941Equity ratio 31.0% 30.9%


K u o n i G R o u p



management. The changes to treasury shares reflect the registered shares B purchased by or issued to the Board of Directors, the Group Executive Board and management.

■■■■ optionS

Options have not been issued from 2005 onwards. The Kuoni Group has had no options outstanding since 31 December 2008.

■■■■ RetAined eARninGS

Only a limited amount of retained earnings is available for distribution:

• thefreereservesofKuoniTravelHoldingLtd.subsequenttothe approval of an appropriate resolution by the General Meeting of Shareholders;

• thereservesofsubsidiariesinaccordancewithlocalfiscalandlegal provisions, provided they are distributed first to the parent company.

■■■■ otHeR ReSeRVeS

Other reserves contain translation differences as well as hedging reserves and fair-value reserves. The last two of these are shown with due consid-eration for deferred taxation amounts.

CHF 1 000Translation differences

Hedging reserves

Fair value reserves Total

Reserves as at 1 January 2010 – 169 072 – 3 221 0 – 172 293

Realised gains or losses from cash flow hedges transferred to income statement 3 648 0 3 648Recognised gains or losses from cash flow hedges – 9 033 0 – 9 033Translation differences – 35 377 0 0 – 35 377

Reserves as at 31 December 2010 – 204 449 – 8 606 0 – 213 055

Realised gains or losses from cash flow hedges transferred to income statement 7 843 0 7 843Recognised gains or losses from cash flow hedges 10 653 0 10 653Translation differences – 64 186 0 0 – 64 186

Reserves as at 31 December 2011 – 268 635 9 890 0 – 258 745


02_04_07_

■■■■ pRincipAl SHAReHoldeRS

The following principal shareholders are known to us:

■■■■ tReASuRy SHAReS

The exercising of subscription rights is related to the rights offering of May 2011. Kuoni exercised all its subscription rights on its treasury shares.

■■■■ SHARe plAn

The remaining treasury shares held are reserved for the employee share plan of the Board of Directors, the Group Executive Board and

Kuoni and Hugentobler-Foundation, Zurich31 December 2011: 1 249 500 registered shares A = 25.00% of the voting rights31 December 2010: 952 000 registered shares A = 25.00% of the voting rights

Silchester International Investors Limited, London31 December 2011: 755 062 registered shares B = 15.11% of the voting rights 1

31 December 2010: 601 100 registered shares B = 15.79% of the voting rights 1

Federation of Migros Cooperatives, Zurich together with Anlagestiftung der Migros Pensionskasse, Zurich Pensionskasse der Globus-Unternehmen, Spreitenbach31 December 2011: 474 014 registered shares B = 9.48% of the voting rights 1 2

31 December 2010: 307 586 registered shares B = 8.08% of the voting rights 1 3

Pictet Funds S.A., Geneva31 December 2011: Voting rights less than 3%31 December 2010: 145 769 registered shares B = 3.83% of the voting rights 1 3

Share plan Number of registered

shares BBook value CHF 1 000

Held on 1 January 2010 135 494 6 775

Sales – 2 796 – 140Use – 53 831 – 2 692

Held on 31 December 2010 78 867 3 943

Exercise of subscription rights 46 925 12 670Use 10 999 550

Held on 31 December 2011 136 791 17 163

1 Voting rights restricted to 3% in accordance with Article 5 of the Articles of Incorporation of Kuoni Travel Holding Ltd.

2 As per share register 31.12.2011 – last notification dated 9 December 2009, therefore no further details on options.

3 As per share register 31.12.2010.


K u o n i G R o u p



■■■■ 23. deFeRRed tAXeS

Deferred taxes changed as follows:

At year-end the cumulative deferred taxes recognised directly in equity amounted to CHF – 3.5 million (2010: CHF 3.0 million). They arise largely from the positive and negative current market values of the currency and fuel price hedging contracts classified as cash flow hedges.

Deferred taxes are derived from the following statement of financial position items:

CHF 1 000 2011 2010

Deferred tax assets 39 861 39 684Deferred tax liabilities 39 438 43 059

Deferred tax assets as at 1 January (net) – 423 3 375

Changes recognised in the income statement – 2 983 – 2 026Changes not recognised in the income statement 6 499 – 1 893Acquisitions 64 185 1 414Translation differences – 4 306 – 1 293

Deferred tax liabilities as at 31 December (net) 62 972 – 423

Deferred tax assets 34 146 39 861Deferred tax liabilities 97 118 39 438

CHF 1 000

Deferred tax assets

31 Dec 2011

Deferred tax liabilities

31 Dec 2011

Deferred tax assets

31 Dec 2010

Deferred tax liabilities

31 Dec 2010

Current assets 1 405 8 227 856 7 056Tangible fixed assets 4 825 4 225 2 349 5 452Other non-current assets 73 81 523 29 24 934Accrued expenses and provisions 14 501 2 662 15 225 2 441

Deferred taxes deriving from timing differences 20 804 96 637 18 459 39 883

Netting of deferred taxes within each Group company – 12 019 – 12 019 – 10 748 – 10 748Deferred taxes deriving from timing differences (net) 8 785 84 618 7 711 29 135

Tax effect on undistributed retained earnings of subsidiaries 12 500 10 303Deferred taxes on recognised tax loss carry-forwards 25 361 32 150

Total 34 146 97 118 39 861 39 438


02_04_07_

■■■■ tRAnSlAtion diFFeRenceS

The biggest translation differences derived from the translation of the assets and liabilities of Group companies reporting in GBP, EUR and SEK and of USD-denominated intragroup loans of an equity nature.

■■■■ HedGinG ReSeRVeS

The hedging reserves correspond to the positive or negative fair value of currency and fuel price hedging contracts classified as cash flow hedges. They are expected to be removed from equity within 12 months.

■■■■ FAiR-VAlue ReSeRVeS

The fair-value reserves relate to financial assets available for sale.

■■■■ 22. pRoViSionS

The provisions for employee benefits relate to defined benefit retirement plans, termination benefits to be paid out in accordance with the law and other retirement benefit obligations.

Provisions for direct costs include amounts payable to service providers which are uncertain as to their due dates or size.

CHF 1 000

Employee benefits

2011

Direct costs 2011

Other 2011

Total 2011

Total 2010

Provisions as at 1 January 13 600 3 418 1 190 18 208 19 022

Additions 2 219 263 13 2 495 2 917Used – 2 236 – 126 – 17 – 2 379 – 1 449Released – 1 137 – 784 – 501 – 2 422 – 1 198Acquisitions 1 083 0 3 244 4 327 557Translation differences – 183 – 34 – 193 – 410 – 1 641

Provisions as at 31 December 13 346 2 737 3 736 19 819 18 208


K u o n i G R o u p



In addition to other terms and conditions, the syndicated credit facility contains covenants relating to the degree of indebtedness (ratio of financial debt to EBITDA) and to equity (minimum consolidated equity). Additional customary market terms and conditions also apply. Maximum indebtedness may not exceed three times the EBITDA amount. The outstanding bond issue is subject to the usual cross-default clause, under which the outstanding bond amount(s) may become due for payment if repayment of the syndicated credit amount is demanded owing to non-observance of the credit terms and conditions. These credit terms and conditions were being observed on the balance sheet date.

Financial debts are due as follows:

Financial debts are denominated in the following currencies:

CHF 1 000 31 Dec 2011 31 Dec 2010

Statement of financial position value 309 459 255 658Contractual cash flows 334 923 283 186Up to 6 months 14 706 14 5067 to 12 months 5 623 6 3451 to 2 years 207 976 17 8922 to 5 years 98 570 218 376Over 5 years 8 048 26 067

CHF 1 000 31 Dec 2011 31 Dec 2010

CHF 300 456 243 644EUR 8 637 10 086Other 366 1 928

Total 309 459 255 658


02_04_07_

■■■■ 24. FinAnciAl deBtS

Kuoni Travel Holding Ltd. issued a CHF 200 million bond at an annual interest rate of 3% in October 2009. The bond was issued at 100.309%. The bond has a duration of four years and matures on 28 October 2013. The effective interest rate applied is 3.27%. The bond had a market value of 102.35% at year-end (stock exchange price on 31 December). Bank debts consist of mortgages on properties and subsidiaries’ bank overdrafts.

Liabilities towards credit institutions include mortgages on properties and bank accounts of subsidiaries with a negative balance on the balance sheet date, together with the syndicated credit facility concluded in 2011.

■■■■ SyndicAted cRedit FAcility

The Kuoni Group has access to a CHF 350 million syndicated credit facility which was established in March 2011 to part-finance the acquisiti-on of Gullivers Travel Associates, London. Kuoni Travel Holding Ltd., Zurich is the liable party. The credit facility is of five years duration and will be terminated on 30 June 2016. A total of CHF 70 million was utilised thereof as of 31 December 2011. The maximum credit amount under the facility will be reduced by CHF 47 million a year from 30 June 2013 onwards. The interest payable is based on the LIBOR rate plus a margin of between 1.00% and 2.25%.

CHF 1 000 31 Dec 2011 31 Dec 2010

Bond 199 124 198 644Bank debts 110 081 55 633Other 254 1 381

Total 309 459 255 658

Of which: Current financial debts 11 391 11 761Non-current financial debts 298 068 243 897


K u o n i G R o u p


Average interest rates were:

■■■■ 25. AccountS pAyABle And AccRued eXpenSeS

The reported amount contains taxes owed but not yet paid amounting to CHF 28.2 million (2010: CHF 8.5 million).

■■■■ 26. RiSK mAnAGement

The Board of Directors and the management have maintained a risk management process under which a report is compiled every six months on Kuoni’s present risk exposure and the current status of defined risk-reducing actions and activities. The probabilities of such risks occurring and the anticipated impact of the risk scenarios analysed also form part of this semi-annual risk management reporting. The Kuoni risk management process further extends to quarterly reporting on any newly identified risk scenario or changed risk assessment.

2011 2010

CHF 2.8% 2.9%EUR 3.3% 3.8%

Risks are assessed by conducting interviews with management members and further key personnel. The associated risk scenarios are then developed on the basis of these and further considerations, including corporate goals and strategies. Kuoni’s groupwide risk management covers 17 top Group-level risks. Beyond these, three to five specific top risks are managed and monitored for each division and for the most important business units.

Within the Internal Control System (ICS), the corresponding processes had those specific risks systematically monitored which are relevant to the annual accounting process in terms of their incorrect or fraudulent reporting potential. The key controls derived from these were imple-mented where they were not already fully in place, and documented. Procedures have also been defined to monitor and assess the existence of internal controls.

> Notes to the Consolidated Financial Statements > Notes to the Consolidated Financial Statements

02_04_07_


K u o n i G R o u p



■■■■ liQuidity RiSK

Liquidity risk is the risk that the Kuoni Group may be unable to meet its financial obligations when these become due for payment. Kuoni permanently monitors its liquidity to keep it at adequate levels, with monthly reports to the Group Executive Board. This is done partly by maintaining liquidity reserves, to even out the usual fluctuations in liquidity levels and needs. Kuoni also has unutilised credit facilities to cope with any major liquidity fluctuations. These unused credit facilities totalled CHF 351 million on 31 December 2011 and are available for loans, overdrafts and hedging activities. The facilities are spread among several banks, to avoid excessive dependence on a single banking institution. The due dates of the financial debts held are shown in note 24. The other financial instru-ments held (accounts payable and accrued expenses) are all payable within six months.

■■■■ cRedit RiSK

Exposure to credit risk is monitored on an ongoing basis and covered by appropri-ate value adjustments on accounts receivable and prepayments made (see note 20). Credit risks are limited because the customer base of the Kuoni Group consists of a large number of customers spread over a wide range of geo graphical regions. There are no risk concentrations.

The counterparties to derivative financial instruments and cash are carefully selected financial institutions. Given their high credit ratings, the Kuoni Group does not expect any counter party to fail to meet its obligations. The maximum exposure to credit risk is represented by the carrying amount of each financial asset.

■■■■ inteReSt RAte RiSK

The Kuoni Group is exposed to interest rate risk as a result of movements in inte rest rates in the capital market. Generally, all non-current financial liabilities have fixed interest rates. Consequently, changes in interest rates can result in fluctuations in the fair value of such financial liabilities. This would not have any impact on the net result or future cash flows, however. The fair values of financial liabilities do not differ significantly from their carrying amounts on the balance sheet date. No corresponding derivatives are outstanding on the balance sheet date.


02_04_07_

■■■■ 27. FinAnciAl RiSK mAnAGement

And deRiVAtiVe FinAnciAl inStRumentS

The table below shows the financial instruments held by the Kuoni Group.

In the normal course of its business, the Kuoni Group is exposed to liqui - dity, credit and market risks (interest rate and currency risks). To man age these risks, various derivative financial instruments are used. While these are subject to the risk of market rates changing subsequent to their acquisition, such changes are generally offset by opposite effects on the items being hedged.

Derivative financial instruments

CHF 1 000

Loans, receivables

and payables at amortised

costAvailable-

for-sale

At fair value through profit

and lossUsed as cash

flow hedges Other 1

Total carrying

amount 2

31 Dec 2011

Other financial assets 23 254 244 18 775 42 273 Cash and cash equivalents 288 861 288 861 Time deposits 86 874 86 874 Accounts receivable/other receivables 327 531 1 997 30 726 6 680 366 934

Total financial instruments – assets 726 520 244 1 997 30 726 25 455 784 942

Financial debts 309 459 309 459 Accounts payable 285 505 4 015 17 361 306 881 Accrued expenses 590 089 28 218 618 307

Total financial instruments – liabilities 1 185 053 0 4 015 17 361 28 218 1 234 647

31 Dec 2010

Other financial assets 23 900 257 18 112 42 269 Cash and cash equivalents 587 898 587 898 Time deposits 86 368 86 368 Accounts receivable/other receivables 177 576 1 370 26 361 4 787 210 094

Total financial instruments – assets 875 742 257 1 370 26 361 22 899 926 629

Financial debts 255 658 255 658 Accounts payable 182 987 13 588 37 991 234 566 Accrued expenses 350 140 8 531 358 671

Total financial instruments – liabilities 788 785 0 13 588 37 991 8 531 848 895

1 The “Other” position shows items to which the provisions of IAS 39 do not apply.

2 The fair values of the financial instruments do not deviate substantially from their carrying amounts.


K u o n i G R o u p



cash flow hedges are expected to be removed from equity within 12 months. Changes in the fair value of forward exchange contracts, currency options and swaps that economically hedge monetary assets and liabilities in foreign currencies and for which no hedge accounting is applied are recognised in the income statement. Both the changes in fair value of the forward contracts and the foreign exchange gains and losses relating to the monetary items are reported under direct costs.

■■■■ deRiVAtiVe FinAnciAl inStRumentS

The fair value is the (higher or lower) value at which a derivative contract could be concluded on the balance sheet date. The fair values calculated on the balance sheet date should be looked at not in isolation but together with the calculated value of anticipated future transactions and hence in the context of the aggregate reduction in the Group’s exposure to cur - rency movements. Positive or negative fair values of derivative financial instruments are carried on the statement of financial position under accounts receivable or accounts payable.

Derivative financial instruments by currency:

CHF 1 000

Positive fair values

31 Dec 2011

Negative fair values

31 Dec 2011

Contract values

31 Dec 2011


31 Dec 2010


31 Dec 2010

Contract values

31 Dec 2010

Cash flow hedges Currency-related forward contracts, swaps and options 28 914 – 16 537 855 340 22 668 – 37 991 1 027 720Commodity options (aviation fuel) 1 812 – 824 46 058 3 693 0 34 877

Other derivative financial instruments Currency-related forward contracts, swaps and options 1 997 – 4 015 288 224 1 370 – 13 588 267 186

Total 32 723 – 21 376 1 189 622 27 731 – 51 579 1 329 783

CHF 1 000


31 Dec 2011


31 Dec 2011

Contract values

31 Dec 2011


31 Dec 2010


31 Dec 2010

Contract values

31 Dec 2010

EUR 7 295 – 11 685 493 550 4 690 – 25 766 529 204USD 16 792 – 5 060 327 643 8 209 – 20 390 404 661THB 827 – 324 40 737 638 – 609 40 065Other currencies 5 997 – 3 483 281 634 10 501 – 4 814 320 976Commodity options (aviation fuel) 1 812 – 824 46 058 3 693 0 34 877

Total 32 723 – 21 376 1 189 622 27 731 – 51 579 1 329 783


02_04_07_

Cash flow sensitivity analysis for financial instruments with variable interest rates: a one percentage point increase in the interest rate applicable would have reduced the net result by CHF 3.8 million. A one percentage point reduction in the interest rate applicable would have increased the net result by the same amount. This analysis is based on the assumption that all other influencing factors remain unchanged.

■■■■ FoReiGn cuRRency RiSK

The Kuoni Group incurs foreign currency risk primarily on purchases and borrowings denominated in a currency other than the functional currency of the subsidiary concerned. A further foreign currency risk of smaller significance derives from the amount of turnover denominated in a currency other than the measurement currency of the subsidiary concerned. On a consolidated basis, the Group is also exposed to currency fluctuations between the Swiss franc and the local measurement cur-rencies of its subsidiaries. The major currencies giving rise to currency risk for the Kuoni Group are the euro, the pound sterling, the Swedish krona and the US dollar.

Foreign currency risks are monitored within the Kuoni Group in accord-ance with specified guidelines. These guidelines contain principles on risk limits, the forms of hedging instruments permitted and the relevant risk monitoring processes. The guidelines prohibit on principle the use of derivative financial instruments for speculative purposes. The enforce-ment of these guidelines and general risk management are provided by the Kuoni Group’s treasury units in the form of a hedging strategy. Monthly reports are submitted to the Group Executive Board on the current risk situation.

The Kuoni Group uses forward exchange contracts and currency options to hedge its foreign currency risk. Most hedging contracts have maturi-ties of up to 12 months. Where necessary, the forward exchange contracts are rolled over at maturity. The Kuoni Group does not hedge against the foreign currency risks associated with its net investment in foreign entities or the related foreign currency translation of local earnings.

The currency hedging contracts outstanding at year-end are summarised in the following table. Gains and losses on hedge contracts qualifying as


K u o n i G R o u p



The table below shows the currency risk deriving from financial instru-ments whose currency differs from the functional currency of the subsidiary holding the instrument concerned:

A change in the foreign-currency positions shown at year-end as a result of a 5% or 3% change in currency exchange rates would have increased or decreased consolidated equity and the net Group result by the amounts shown below. This analysis is based on the assumption that all other variables (and interest rates in particular) remained unchanged. The consolidated income statement may also be substantially affected by any changes in currency exchange rates relating to financial instruments bought and sold within the business year to which the provisions of IFRS 7 do not apply.

In million foreign currency

USD 31 Dec 2011

EUR 31 Dec 2011

THB 31 Dec 2011

USD 31 Dec 2010

EUR 31 Dec 2010

THB 31 Dec 2010

Intercompany loans 0.2 0.1 0.0 0.9 0.1 0.0Other financial assets 3.2 0.2 0.0 3.0 0.3 0.0Cash and cash equivalents 18.3 22.6 31.2 25.1 25.4 35.3Time deposits 0.0 0.0 0.0 0.8 0.0 0.0Accounts receivable 3rd party 43.2 48.3 5.2 14.6 21.1 0.2Accounts receivable intercompany 8.0 14.5 22.2 8.9 8.0 0.4Prepaid expenses 8.2 11.8 78.6 7.5 13.2 140.9Less assets hedged (fair value hedge) – 6.3 – 19.1 0.0 0.0 – 5.0 0.0

Assets exposure 74.8 78.4 137.2 60.8 63.1 176.8

Intercompany loans 0.0 35.8 0.0 0.1 31.5 0.0Accounts payable 3rd party 16.9 39.1 73.9 15.6 24.8 99.0Accounts payable intercompany 23.5 56.9 64.6 14.2 4.0 21.2Accrued expenses 69.6 41.6 199.8 42.5 27.3 224.4Advance payments by customers 2.0 1.6 0.0 2.4 1.3 0.0Less liabilities hedged (fair value hedge) – 46.3 – 49.2 – 232.9 – 44.3 – 27.2 – 311.4

Liabilities exposure 65.7 125.8 105.4 30.5 61.7 33.2

Net balance sheet exposure 9.1 – 47.4 31.8 30.3 1.4 143.6

Estimated forecast sales 45.0 33.4 0.0 31.5 13.7 0.0Estimated forecast purchases – 384.2 – 384.6 – 1 959.4 – 410.0 – 389.0 – 1 697.9

Gross estimated forecast exposure – 339.2 – 351.2 – 1 959.4 – 378.5 – 375.3 – 1 697.9

Foreign currency hedges 277.8 278.5 1 005.2 273.5 286.4 926.7

Net exposure – 52.3 – 120.1 – 922.4 – 74.7 – 87.5 – 627.6


02_04_07_

Maturities of derivative financial instruments:

The table below shows the financial instruments used, valued at their fair market values and using their valuation method.

The levels are defined as follows:

Level 1: Current market value in an active market of an identical financial instrument. Level 2: Current market value in an active market of a similar financial instrument or a valuation method whose prime input factors are not based on observable market data. Level 3: Valuation method whose prime input factors are not based on observable market data.

CHF 1 000


31 Dec 2011


31 Dec 2011

Contract values

31 Dec 2011


31 Dec 2010


31 Dec 2010

Contract values

31 Dec 2010

Up to 6 months 15 572 – 9 329 672 098 11 167 – 26 867 703 7827 to 12 months 12 508 – 8 357 393 114 12 482 – 19 867 499 3801 to 2 years 4 643 – 3 690 124 410 4 082 – 4 845 126 6212 to 3 years 0 0 0 0 0 0

Total 32 723 – 21 376 1 189 622 27 731 – 51 579 1 329 783

CHF 1 000

31 Dec 2011 Level 1 Level 2 Level 3 Total

Derivative financial assets 0 32 723 0 32 723Other financial assets 0 0 0 0

Total financial assets 0 32 723 0 32 723

Derivative financial liabilities 0 21 376 0 21 376Other financial liabilities 0 0 0 0

Total financial liabilities 0 21 376 0 21 376

31 Dec 2010 Level 1 Level 2 Level 3 Total

Derivative financial assets 0 27 731 0 27 731Other financial assets 0 0 0 0

Total financial assets 0 27 731 0 27 731

Derivative financial liabilities 0 51 579 0 51 579Other financial liabilities 0 0 0 0

Total financial liabilities 0 51 579 0 51 579


K u o n i G R o u p



■■■■ 28. FRee cASH FloW

■■■■ 29. AdditionAl inFoRmAtion on tHe StAtement oF cASH FloWS

These three positions are included in cash flow from operating activities.

CHF 1 000 2011 2010

Cash flow from operating activities 101 125 117 008Purchase of tangible fixed assets – 36 035 – 25 414Purchase of other intangible assets – 21 157 – 17 930Disposal of tangible fixed assets 1 889 1 907

Free cash flow 45 822 75 571

CHF 1 000 2011 2010

Interest received 2 249 4 070Interest paid – 11 881 – 8 978Income taxes paid – 29 082 – 14 701


02_04_07_

■■■■ FoReiGn-cuRRency SenSitiVity AnAlySiS

Nominal currency USD +/– 5%

Nominal currency EUR +/– 3%

Nominal currency THB +/– 5%

CHF million functional currency Equity

Income Statement Equity

Income Statement Equity

Income Statement

31 Dec 2011

CHF 1.3 0.2 0.4 0.6 0.1 0.1GBP 2.6 0.1 0.5 0.1 0.1 0.0SEK 4.8 0.2 6.4 0.1 0.8 0.1EUR 1.5 0.1 n.a. n.a. 0.2 0.0

31 Dec 2010

CHF 1.7 0.4 2.6 0.3 0.1 0.0GBP 2.7 0.2 0.6 0.2 0.2 0.0SEK 5.3 0.2 6.7 0.2 0.7 0.2EUR 2.9 0.0 n.a. n.a. 0.1 0.0


K u o n i G R o u p



■■■■ GRoup eXecutiVe BoARd And BoARd oF diRectoRS

compenSAtion

The total compensation (including employer’s contributions to social security and pension funds) paid to members of the Group Executive Board and the Board of Directors, which is included in personnel expense consisted of:

The compensation paid to and shares held by members of the Board of Directors and the Group Executive Board are shown in detail on pages 246 to 249 of the financial statements of Kuoni Travel Holding Ltd., in compliance with Swiss law.

Group Executive Board Board of Directors Total

CHF million 2011 2010 2011 2010 2011 2010

Short-term employee benefits 4.5 5.2 0.9 0.9 5.4 6.1Post-employment benefits 0.8 0.8 0.1 0.1 0.9 0.9Termination benefits 0.0 0.0 0.0 0.0 0.0 0.0Share-based payments – 0.1 4.3 0.7 0.7 0.6 5.0

Total 5.2 10.3 1.7 1.7 6.9 12.0


02_04_07_

■■■■ 30. RelAted pARtieS

Related parties are directors and Group Executive Board members (together with members of their families), major shareholders and companies controlled by these parties, associates and pension plans. Transactions with related parties are priced on an arm’s length basis.

Apart from the compensation paid to the Board of Directors and the Group Executive Board and the ordinary contributions to occupational pension plans, there were no significant transactions with related parties in 2011.

■■■■ Kuoni And HuGentoBleR-FoundAtion, ZuRicH

The Kuoni and Hugentobler-Foundation received a (gross) dividend of CHF 0.5 million on the basis of its shareholding.

■■■■ ASSociAteS

All transactions with associates are priced on an arm’s length basis. The Kuoni Group made sales to associates totalling CHF 1.1 million in 2011 (2010: CHF 1.3 million), while, as last year, no purchases were made from associates. For receivables outstanding, please see notes 16 and 20. As in the previous year, no profits were distributed by associates in 2011.

■■■■ penSion plAnS

The transactions between the Kuoni Group and the various defined benefits pension plans for its employees are shown in note 6. As in the previous year, the Kuoni Group currently has no liabilities towards these pension plans.


K u o n i G R o u p



■■■■ 33. poSt-yeAR-end eVentS

The consolidated financial statements of the Kuoni Group were approved and released for publication by the Board of Directors on 15 March 2012. The Board of Directors also resolved on the same date to propose to the General Meeting of Shareholders that shareholders receive a withholding tax-free appropriation from the newly created capital contribution reserve of CHF 0.60 per registered share A and CHF 3.00 per registered share B for the 2011 financial year. The final approval of the above is subject to the General Meeting of Shareholders of 17 April 2012.

No events have occurred since 31 December 2011 that would necessitate an adjustment to the carrying amounts of the Group’s assets and liabilities.


02_04_07_

■■■■ 31. continGent liABilitieS, ASSetS pledGed

The assets pledged were used to secure bank loans with mortgage collateral.

■■■■ 32. leASinG liABilitieS

■■■■ FinAnciAl leASeS

As in the prior year, there are no finance leasing liabilities.

■■■■ opeRAtinG leASeS

This position mainly relates to leasing liabilities of Novair for certain aircraft and to lease contracts for buildings.

CHF 1 000 31 Dec 2011 31 Dec 2010

Contingent liabilities 0 0Assets pledged 73 948 76 692

CHF 1 000 31 Dec 2011 31 Dec 2010

Liabilities payable up to 1 year 59 426 50 379Liabilities payable 1 to 5 years 117 113 119 923Liabilities payable over 5 years 9 201 14 340

Total leasing liabilities not recognised in the statement of financial position 185 740 184 642

Amount recognised in the income statement in current year 71 014 67 210

228 | 229 K u o n i A n n u A l R e p o R t # 2 0 1 1fig. 6: A network of trails caused by migrating elephants criss-crosses the green grasses of Lake Amboseli in Kenya.

being at onewith all oF nature.


K u o n i G R o u p


> Principal Subsidiaries and Associates

Activity:

T Tour Operating BusinessD Destination Management ServicesC Corporate

Consolidation:

C ConsolidatedE Valuation according to equity method

Activity CurrencyPaid-in

share capital Investment in % Consolidation

Norway Kuoni Scandinavia Norway, Oslo T NOK 0 100 C

Russia UTE Megapolus Group Co. Ltd., Moscow T RUB 186 000 92 C

Spain Viajes Kuoni S.A., Madrid T EUR 2 614 600 100 CKuoni Destination Management S.L., Madrid D EUR 150 000 100 CSotavento S.A., Fuerteventura T EUR 3 060 000 100 CGullivers Travel Associates S.A., Madrid D EUR 420 708 100 C

Sweden Kuoni Scandinavia AB, Stockholm T SEK 23 000 000 100 CNova Airlines AB, Stockholm T SEK 15 000 000 100 C

United Kingdom Kuoni Travel Ltd., Dorking T/D GBP 1 500 000 100 CCV Travel Holdings Ltd., London T GBP 650 000 100 CHoliday Supplies Ltd., Liverpool T GBP 70 000 100 CKirker Holdings Ltd., London T GBP 4 442 000 100 CVoyages Jules Verne Ltd., London T GBP 100 100 CCarrier Ltd., Cheshire T GBP 139 000 100 CDonvand Ltd., London D GBP 177 194 100 CGTA travel.com Ltd., London D GBP 10 000 100 COctopus Travel.com Limited, London D GBP 50 000 100 C

02_04_08_

PrinciPal subsiDiaries anD associates

■■■■ euRope02_04_08_01_



Switzerland Kuoni Reisen AG, Zurich T/D CHF 7 000 000 100 CRailtour Suisse SA, Berne T CHF 1 600 000 93 CKIT Solution AG, Zurich C CHF 1 000 000 100 CKuoni Immobilien AG, Zurich C CHF 6 000 000 100 C

Austria Kuoni Destination Management Ges.m.b.H., Vienna D EUR 253 000 100 C

Belgium Kuoni Travel Belgium B.V. B.A., Gent T EUR 7 335 000 100 C

Denmark Kuoni Scandinavia Danmark, Copenhagen T DKK 0 100 CKuoni Destination Management A/S, Copenhagen D DKK 600 000 100 CFalk Lauritsen Rejser A/S, Herning T DKK 500 000 100 C

France Voyages Kuoni S.A., Paris T/D EUR 507 000 100 C

Hungary Kuoni Destination Management Kft., Budapest D HUF 3 000 000 100 C

Italy Kuoni Italia S.p.A., Genoa T EUR 8 400 000 100 CKuoni Destination Management S.p.A., Rome D EUR 1 548 000 100 COctopus Travel Italia SRL, Rome D EUR 20 000 100 C

The Netherlands Kuoni Travel Nederland B.V., Amsterdam T EUR 13 230 000 100 CKuoni Destination Management B.V., Amsterdam D EUR 55 815 100 CKuoni Specialists B.V., Amsterdam T EUR 20 418 100 C


K u o n i G R o u p



Activity:

T Tour Operating BusinessD Destination Management ServicesC Corporate

Consolidation:

C ConsolidatedE Valuation according to equity method



Singapore Kuoni Travel (S) PTE Ltd., Singapore D SGD 100 000 100 CGullivers Travel Associates (Singapore) Pte Limited, Singapore D SGD 100 000 100 C

South Africa Kuoni Private Safaris (Pty) Ltd., Cape Town D ZAR 500 000 100 C

South Korea Kuoni Travel (Korea) Ltd., Seoul D KRW 100 000 000 100 CGullivers Travel Associates Korea Limited, Seoul D KRW 350 000 000 100 C

Sri Lanka Sita World Travel (Lanka) Pvt. Ltd., Colombo D LKR 2 500 000 76 C

Taiwan Gullivers Travel Associates (Taiwan) Limited, Taipei D TWD 6000000 100 C

Thailand Asian Trails Ltd., Bangkok D THB 24 000 000 49 CKuonissimo (Thailand) Ltd., Bangkok D THB 2 451 000 49 C

United States AlliedTPro, Inc., New York D USD 170 000 100 CKuoni Travel (Atlanta) Inc., Atlanta D USD 50 000 100 CKuoni Holding Delaware, Inc., Wilmington C USD 1 100 CGTA Americas LLC, Delaware D USD 29 700 000 100 COctopus Travel.com (USA) Limited, Delaware D USD 1 000 100 C

02_04_08_


■■■■ oVeRSeAS02_04_08_02_



Australia Australian Tours Management Pty Ltd., Melbourne D AUD 500 000 100 CGTA Australasia Pty Limited, Sydney D AUD 100 000 100 COctopus Travel.com (Australia) Pty Limited, Sydney D AUD 50 000 100 C

China Kuoni Travel (China) Ltd., Hong Kong T HKD 4 800 000 100 CS.K.Y. Business Consultancy Co. Ltd., Shanghai D CNY 1 198 115 100 CEt-china.com International Holdings Ltd., Guangzhou T CNY 0 30 EKuoni Travel (China) Ltd., Beijing D CNY 0 100 CGullivers Travel Associates (Hong Kong) Limited, Kowloon D HKD 3 064 000 100 CGullivers (Beijing) Commercial Consulting Services (China), Beijing D USD 250 000 100 CGullivers Travel Associates (China) Limited, Beijing D CNY 4 000 000 100 C

Dubai Desert Adventures Tourism LLC, Dubai D AED 300 000 80 CGulf Dunes LLC, Dubai D AED 1 725 000 100 CGullivers Travel Associates Middle East FZ LLC, Dubai D AED 1 000 100 C

India Kuoni Travel (India) Pvt. Ltd., Mumbai T/D INR 83 600 000 100 CKuoni Business Travel India Pvt. Ltd., Delhi T INR 8 450 000 100 CVFS Global Services Pvt. Ltd., Mumbai T INR 283 670 000 100 C

Japan Kuoni Travel (Japan) Ltd., Tokyo D JPY 50 000 000 100 CGullivers Travel Agency co Ltd (Japan), Tokyo D JPY 40 000 000 100 COctopus Travel.com Japan KK, Tokyo D JPY 10 000 000 100 C

Kenya Private Safaris (E.A.) Ltd., Nairobi D KES 62 500 000 100 C

Mauritius Kuoni Asian Investments (Mauritius) Ltd., Port Louis C USD 1 000 000 100 CVF Worldwide Holdings Ltd., Port Louis T GBP 4 303 000 100 C

Nepal Sita World Travel (Nepal) Pvt. Ltd., Kathmandu D NPR 2 250 000 63 C


K u o n i G R o u p


■■■■ RepoRt on otHeR leGAl ReQuiRementS

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the board of directors.

We recommend that the consolidated financial statements submitted to you be approved.

KpmG AG

martin Schaad Licensed Audit Expert Auditor in Charge

ivano castagna Licensed Audit Expert

Zurich, 15 March 2012

> Report of the Statutory Auditor

02_04_09_

rePort oF the statutory auDitor

require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material miss - tatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The proce-dures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appro-priate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

■■■■ opinion

In our opinion, the consolidated financial statements for the year ended 31 December 2011 give a true and fair view of the financial position, the results of operations and the cash flows in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law.

Report of the Statutory Auditor on the Consolidated Financial Statements to the General Meeting of Shareholders of Kuoni Travel Holding Ltd., Zurich.

As statutory auditor, we have audited the accompany-ing consolidated financial statements of Kuoni Travel Holding Ltd., presented on pages 167 to 233, which comprise the statement of financial position, income statement, statement of comprehensive income, statement of changes in equity, statement of cash flows and notes for the year ended 31 December 2011.

■■■■ BoARd oF diRectoRS’ ReSponSiBility

The board of directors is responsible for the prepara-tion and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) and the requirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The board of directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

■■■■ AuditoR’S ReSponSiBility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards as well as Interna-tional Standards on Auditing. Those standards

236 | 237 K u o n i A n n u A l R e p o R t # 2 0 1 1fig. 7: The frozen dunes of Victoria Valley raked by strong downslope winds in the Dry Valley region of Antarctica.

FinDing ourselvesin the DePths oF sPace.


02_05_

Kuoni traveL hoLding Ltd.


K u o n i t R A v e l h o l d i n g l t d .

238 | 239

02_05_01_

Statement of financial PoSition

Assets CHF Notes 31 Dec 2011 % 31 Dec 2010 %

Non-current assets Investment in subsidiaries (6) 489 896 212 32.6 490 709 826 45.4Loans to group companies 960 062 190 63.7 383 769 388 35.5Loans to third parties 1 242 340 0.1 2 365 950 0.2Other financial assets 145 895 0.0 235 895 0.0Tangible fixed assets • Landandbuilding (2) 4 460 000 0.3 4 460 000 0.4• Furniture,fixturesandequipment (2) 1 0.0 1 0.0

Total non-current assets 1 455 806 638 96.7 881 541 060 81.5

Current assets Cashandcashequivalents 897 250 0.1 183 571 987 17.0Securities (9) 20 167 750 1.2 8 674 450 0.8Accounts receivable • fromthirdparties 60 807 0.0 205 253 0.0• fromgroupcompanies 6 876 543 0.6 4 721 747 0.5Prepaid expenses 20 370 454 1.4 1 380 680 0.2

Total current assets 48 372 804 3.3 198 554 117 18.5

Total assets 1 504 179 442 100.0 1 080 095 177 100.0

Equity and liabilities CHF Notes 31 Dec 2010 % 31 Dec 2010 %

Equity Share capital (7) 3 998 400 0.3 3 046 400 0.3Legal reserves • Generalreserve 8 000 000 0.5 8 000 000 0.7• Sharepremiumreserve 58 700 077 3.9 61 265 966 5.7• Reservefromcapitalcontribution (8) 379 855 161 25.2 111 792 427 10.3• Reservefortreasuryshares (9) 20 167 750 1.3 8 674 450 0.8Other reserves • Freereserve 376 832 250 25.1 366 102 673 33.9• Otherreservefromcapitalcontribution (8) 0 0.0 10 222 877 1.0Retainedearnings • Profitcarriedforward 1 177 433 0.1 1 975 049 0.2• Netresult 11 679 501 0.8 21 425 261 2.0

Total equity (7) 860 410 572 57.2 592 505 103 54.9

Liabilities Provisions 239 227 000 15.9 239 223 000 22.1Bond (11) 200 000 000 13.3 200 000 000 18.5Bank loans 150 118 521 10.0 0 Accountspayable • tothirdparties 1 422 598 0.1 1 789 190 0.2• togroupcompanies 35 276 687 2.3 19 832 581 1.8Accrued expenses 17 724 064 1.2 26 745 303 2.5

Total liabilities 643 768 870 42.8 487 590 074 45.1

Total equity and liabilities 1 504 179 442 100.0 1 080 095 177 100.0


K u o n i t R A V e l H o l d i n G l t d .


02_05_03_

notes

CHF Notes 2011 2010

Income Financial income (3) 17 225 475 1 870 485Income from investments in subsidiaries (4) 46 563 904 61 906 030Other operating income 721 858 1 752 352

Total income 64 511 237 65 528 867

Expenses Personnel expense 13 427 414 19 479 389Administrative expense 6 969 962 9 814 609Expenses related to investments in subsidiaries (5) 8 738 560 4 322 420Other expenses 7 380 125 136 400Depreciation 0 0Financial expense 15 800 136 9 980 343Income taxes 515 539 370 445

Total expenses 52 831 736 44 103 606

Net result 11 679 501 21 425 261

02_05_02_

income statement

■■■■ intRoduction

In legal terms, Kuoni shareholders are shareholders of Kuoni Travel Holding Ltd., Zurich, which controls the subsidiaries listed at the end of the consolidated accounts. From an economic standpoint, the shareholders of Kuoni Travel Holding Ltd. are invested in the entire Group, so the consolidated accounts are of primary importance. The accounts of Kuoni Travel Holding Ltd. are conform with Swiss company law.

■■■■ 1. continGent liABilitieS, ASSetS pledGed

Contingent liabilities consist of sureties and guarantees for consolidated subsidiaries.

■■■■ 2. FiRe inSuRAnce VAlueS

■■■■ 3. FinAnciAl income

The financial income derives largely from interest on investments.

■■■■ 4. income FRom inVeStment in SuBSidiARieS

The income from investment in subsidiaries consists of dividends received as well as income from the sale of subsidiaries. As in the prior year, all wholly owned subsidiaries were charged management fees to cover Group overheads.

CHF 31 Dec 2011 31 Dec 2010

Contingent liabilities 375 929 871 432 960 142Assets pledged 0 0

CHF 31 Dec 2011 31 Dec 2010

Buildings 10 157 000 9 853 200Furniture, fixtures and equipment 914 000 581 000




> Notes

The share capital is composed as follows:

■■■■ conditionAl cApitAl

Conditional capital issuable via the exercise 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 international capital markets and / or via the exercise of options granted to share-holders amounts to a maximum of CHF 384 000, with a further maxi-mum of CHF 96 000 reserved for employee stock option plans.

■■■■ AutHoRiSed cApitAl

The authorised capital of Kuoni Travel Holding Ltd. amounts to CHF 571 200 and is valid until 20 April 2013. The use of the authorised capital is limited to the financing or refinancing of GTA Holdco Limi- ted, GTA Americas LLC, Octopus Travel.com (USA) Limited and Colum-bus Technology Developments Limited which was effected in 2011. The Board of Directors may not issue any new shares for any other purpose on the basis of the authorised capital. The Board of Directors will delete Article 3ter of the Articles of Incorporation of Kuoni Travel Holding Ltd. relating to authorised capital upon the expiration of its validity on 20 April 2013.

Although the authorised capital of Kuoni Travel Holding Ltd. can virtually no longer be used as a result of the above restriction, the following information is still provided because it is required to be included:

In accordance with Article 3ter of the Articles of Incorporation of Kuoni Travel Holding Ltd., the Board of Directors is authorised to increase share capital by up to CHF 571 200 through the issue of a maximum of 178 500 fully-paid-up registered shares A with a nominal value of CHF 0.20 per share and a maximum of 535 500 fully-paid-up registered

CHF 31 Dec 2011

1 249 500 registered shares A CHF 0.20 nominal value 249 9003 748 500 registered shares B CHF 1.00 nominal value 3 748 500

Total share capital 3 998 400

02_05_03_

> Notes

■■■■ 5. eXpenSeS RelAted to inVeStment in SuBSidiARieS

This item relates to support given to subsidiaries as well as to currency-related value adjustments and provisions. Where necessary, losses incurred by subsidiaries were offset by direct subsidies or appropriate allocations were made to provisions earmarked for that purpose.

■■■■ 6. inVeStment in SuBSidiARieS

We refer to the information on principal subsidiaries and associates on pages 230 to 233 of the Financial Report.

■■■■ 7. eQuity

CHF Share capital Legal reserves Other reserves Retained earnings Total equity

Equity as at 1 January 2009 3 046 400 187 512 385 331 804 450 72 755 545 595 118 780

Net result 24 806 902 24 806 902Appropriation of retained earnings 39 000 000 – 39 000 000 0Dividends – 28 631 310 – 28 631 310Sale of treasury shares 527 298 176 550 703 848Use of treasury shares 628 899 129 150 758 049

Equity as at 31 December 2009 3 046 400 188 668 582 371 110 150 29 931 137 592 756 269

Net result 21 425 261 21 425 261Appropriation of retained earnings 5 000 000 – 5 000 000 0Dividends – 22 956 088 – 22 956 088Sale of treasury shares 686 793 139 800 826 593Use of treasury shares 377 468 75 600 453 068


Net result 11 679 501 11 679 501Appropriation of retained earnings 1 10 222 877 12 000 000 – 22 222 877 0Dividends – 7 235 672 – 7 235 672Use of treasury shares 7 811 079 1 176 450 8 987 529Capital increase 952 000 266 191 861 – 12 669 750 254 474 111


1 Includes the resolution by the Annual General Meeting regarding the reassignment of reserves from “Other reserve from capital contribution” to “Legal reserve from capital contribution”.




> Notes

02_05_03_

> Notes

shares B with a nominal value of CHF 1.00 per share at any time until 20 April 2013. Should it do so, the Board of Directors shall specify the issue amount, the type of contribution, the date of such issue and the com-mencement of dividend entitlement. In the issue of any such shares, the subscription rights of existing shareholders shall be granted in full. The Board of Directors may also issue such new registered shares through their firm acquisition by a bank or a third party and subsequent offering to existing shareholders. The Board of Directors is empowered to deter-mine the subscription price and the further subscription-right provi-sions. Should subscription rights not be exercised, the Board of Directors may permit these to lapse, place them (and the corresponding shares) on the market at market rates or use them in any other way in the interests of the company. The exercising of contractually acquired subscription rights and the subscription to and acquisition of the new registered shares, and any subsequent trannsfer thereof, are subject to Article 5 of the Articles of Incorporation of Kuoni Travel Holding Ltd. Every new share entitles its holder to one vote.

■■■■ ReStRicted tRAnSFeRABility pRoViSionS

The Articles of Incorporation stipulate that no more than 3% of total voting rights may be entered in the share register 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.

■■■■ 8. ReSeRVeS FRom cApitAl contRiButionS

CHF

Legal reserve from capital contribution

Other reserve from capital contribution Total

Capital contribution as per 1.1.2011 111 792 427 10 222 877 122 015 304Reclassification 10 222 877 – 10 222 877 0Distribution – 7 235 672 – 7 235 672Increase from treasury shares 8 987 529 8 987 529Increase from Capital increase 256 088 000 256 088 000

Capital contribution as per 31.12.2011 379 855 161 0 379 855 161

The overall amount held in reserves from capital contributions is CHF 380 million, which is made up of the various types of contributions and share premiums less distributions recorded since 1 January 1997. The Swiss Federal Tax Administration disputes reserves from capital contributions of CHF 11.4 million. The increases 2011 have not yet been assessed by the Federal Tax Administration. The remaining reserves from capital contributions of CHF 103.4 million have been confirmed by the Federal Tax Administration.

9. tReASuRy SHAReS

■■■■ SHARe plAn

The remaining treasury shares held are reserved for the share purchase plan of the Group Executive Board and management. The changes to treasury shares reflect the registered shares B purchased by or issued to the Board of Directors, the Group Executive Board and management.

Share plan: number of registered

shares BBook value CHF 1 000

Held on 1 January 2010 177 797 8 890

Purchase 0 0Sale – 2 796 – 140Use – 1 512 – 76

Held on 31 December 2010 173 489 8 674

Purchase 0 0Use – 23 529 – 1 176Capital increase 46 925 12 670

Held on 31 December 2011 196 885 20 168




> Notes

No compensation was paid in 2011 to members of the Board of Directors who had left in the prior period or earlier. Kuoni Travel Holding Ltd. and its Group companies had not granted any collateral, loans, advances or credits to members of the Board of Directors or to persons associated with them as at 31 December 2011. No options were allocated in the year under review.

■■■■ compenSAtion pAid to tHe GRoup eXecutiVe BoARd

For their service in 2011, the members of the Group Executive Board received the compensation shown in the table below. The aggregate compensation paid to the members of the Group Executive Board in 2011amounted to CHF 7.8 million. The highest individual total compensation paid in 2011 amounted to CHF 2.1 million.

The presentation of the compensation paid to members of the Group Executive Board was modified in the course of 2011. Whilst in previous years the compensation stated was that actually paid in the business year

Basic cash compensation

(fixed)

Share-based compensation

(fixed) 1Social security

contributions Total

CHF 1 000 Number of shares CHF 1 000 CHF 1 000 CHF 1 000

2011 Henning Boysen, Chairman 276 593 210 30 516Wolfgang Beeser 98 214 76 9 183Heinz Karrer 112 237 84 13 209John Lindquist 84 178 63 10 157David Schnell 157 297 105 0 262Annette Schömmel 84 178 63 10 157Raymond D. Webster 84 178 63 10 157

Total 895 1 875 664 82 1 641


Total 894 1 906 664 83 1 641

02_05_03_

> Notes

1 Voting rights restricted to 3% in accordance with Article 5 of the Articles of Incorporation of Kuoni Travel Holding Ltd.

2 As per share register 31.12.2011 – last notification dated 9 December 2009, therefore no further details on options.

3 As per share register 31.12.2010.

■■■■ 10. pRincipAl SHAReHoldeRS

We are aware of the following principal shareholders:

■■■■ 11. Bond

Kuoni Travel Holding Ltd. issued a CHF 200 million 3% bond in October 2009. The bond has a duration of four years and matures on 28 October 2013.

■■■■ 12. RelAted pARtieS

In accordance with its shareholding, the Kuoni and Hugentobler Foundation was awarded a dividend payment of CHF 0.5 million gross.

■■■■ 13. compenSAtion pAid

■■■■ compenSAtion pAid to memBeRS oF tHe BoARd oF diRectoRS

For their service in 2011, the members of the Board of Directors received the compensation shown in the table below. The aggregate compensation paid to the members of the Board of Directors in 2011 amounted to CHF 1.6 million (2010: CHF 1.6 million).

Kuoni and Hugentobler-Foundation, Zurich31 December 2011: 1 249 500 registered shares A = 25.00% of the voting rights31 December 2010: 952 000 registered shares A = 25.00% of the voting rights

Silchester International Investors Limited, London31 December 2011: 755 062 registered shares B = 15.11% of the voting rights 1

31 December 2010: 601 100 registered shares B = 15.79% of the voting rights 1

Federation of Migros Cooperatives, Zurich together with Anlagestiftung der Migros Pensionskasse, Zurich Pensionskasse der Globus-Unternehmen, Spreitenbach31 December 2011: 474 014 registered shares B = 9.48% of the voting rights 1 2

31 December 2010: 307 586 registered shares B = 8.08% of the voting rights 1 3

Pictet Funds S.A., Geneva31 December 2011: Voting rights less than 3%31 December 2010: 145 769 registered shares B = 3.83% of the voting rights 1 3

1 The shares were valued at a market value of CHF 354 (2010: CHF 348). The market value calculated includes a 16% discount in view of the shares’ restricted availability at the time of their assignment.




> Notes

02_05_03_

> Notes

concerned, from 2011 onwards the cash-form variable compensation awarded for the year is also included using the accrual method, while the share-based variable compensation is also included based on the shares assigned for the achievement of the corresponding targets in the business year concerned. Figures for 2010 have been restated accordingly. The change resulted in adjustments to the variable compensation and social security contribution amounts.

2011 CHF 1 000

Group Executive Board 1

Of which: Peter Rothwell

Basic cash compensation (fixed) 3 234 900Variable compensation: • incash 2 659 232• inshares 3 2 617 714Pension scheme contributions 4 662 110Social security contributions 638 114Other compensation amounts 39 6Termination benefits 0 0

Total 7 849 2 076

2010 CHF 1 000



Basic cash compensation (fixed) 3 742 900Variable compensation: • incash 6 1 261 424• inshares 7 2 047 507Pension scheme contributions 8 528 111Social security contributions 397 111Other compensation amounts 28 6Termination benefits 0 0

Total 8 003 2 059

The compensation includes basic salaries for 2011 and variable bonus payments for 2011. Share-based compensation includes the registered shares B allocated for 2011, which will be adjusted and paid out after a three year performance assessment period. The registered shares B paid on in the 2011 financial year on the basis of the 2008 share-based compensation are shown in footnote 3.

An expenses payment of CHF 0.1 million was paid to a member of the Group Executive Board who left the company in the prior period. Otherwise, no payments were made in 2011 to members of the Group Executive Board who left in the prior period or earlier. Kuoni Travel Holding Ltd. and its Group companies had not granted any collateral, loans, advances or credits to any members of the Group Executive Board or to persons associated with them as at 31 December 2011. No options were allocated in the year under review.

1 Five members.

2 The members of the Group Executive Board were paid STI variable compensation in cash form of CHF 1.1 million in 2011 for the prior-year period. The cash-form variable compensation paid to CEO Peter Rothwell amounted to CHF 0.4 million.

3 The members of the Group Executive Board were assigned 8 975 registered shares B in the 2011 business year. These shares were valued at a market price of CHF 292. The market value calculated includes a 23% discount in view of the shares’ restricted availability at the time of their assignment and an 8% discount in view of the diluting effect of the capital increase. The share-based compensation for 2011 will be awarded at the end of the three-year reference period in spring 2014. A total of 3 758 registered shares B (worth CHF 1.7 million) were awarded to members of the present Group Executive Board in 2011 from the share-based compensation assigned in 2008. (Since CEO Peter Rothwell was not appointed to the Group Executive Board until 2009, he was not awarded any such shares in 2011.)

4 One member of the Group Executive Board is entitled to take early retirement in accordance with the regulations of the “Patronale Fürsorgestiftung”. The non-contribution-based costs of the corresponding benefits are included in the pension fund contributions shown. The corresponding regulations have not been extended to any new Group Executive Board member since 2005.

5 Six members. Peter Meier joined the Group Executive Board on 1 November 2010, so the amounts shown include the compensation paid to him for a two-month period. The compensation paid to Max E. Katz is included up until his retirement (on 31 December 2010).

6 The members of the Group Executive Board were paid STI variable compensation in cash form of CHF 1.2 million in 2010 for the previous year. The cash-form variable compensation paid to CEO Peter Rothwell amounted to CHF 0.5 million.

7 The members of the Group Executive Board were assigned 8 964 registered shares B in the 2010 business year. These shares were valued at a market price of

CHF 228. The market value calculated includes a 16% discount in view of the shares’ restricted availability at the time of their assignment. The share-based compensation for 2010 will be awarded at the end of the three-year reference period in spring 2013. No shares were awarded in 2010. In accordance with the regulations valid at the time, share-based compensation was awarded in the following business year. The present compensation sys-tem was first adopted for the 2008 business year.

8 Two members of the Group Executive Board are were entitled to take early retirement in accordance with the regulations of the “Patronale Fürsorgestiftung”. The non-contribution-based costs of the corresponding benefits are included in the pension fund contributions shown. The corresponding regulations have not been extended to any new Group Executive Board member since 2005.




> Notes

■■■■ BoARd oF diRectoRS (non-eXecutiVe memBeRS only)

■■■■ GRoup eXecutiVe BoARd (cuRRent)

■■■■ 15. RiSK mAnAGement

The Board of Directors and the management use a risk management process under which a report is compiled every six months detailing Kuoni’s present risk exposure and the current status of defined risk-reducing actions and activities. The probabilities of such risks occurring and the anticipated impact of the risk scenarios analysed also form part of this semi-annual risk management reporting. The Kuoni risk management process further extends to quarterly reporting on any newly identified risk scenario or changed risk assessment.

Number of shares 31 Dec 2011 31 Dec 2010

no blocking period 6 279 3 727blocking period 2011 0 1 462blocking period 2012 2 907 2 907blocking period 2013 1 906 1 906blocking period 2014 1 875 0


no blocking period 5 757 4 062blocking period 2011 0 1 148blocking period 2012 149 149blocking period 2013 0 0blocking period 2014 0 0

02_05_03_

> Notes

■■■■ 14. SHARe oWneRSHip

■■■■ BoARd oF diRectoRS And GRoup eXecutiVe BoARd

Registered share B as at 31 December Other equity instruments

Number of shares Voting rights Number of shares Voting rights

2011 Board of Directors Henning Boysen, Chairman 4 283 0.09% 0 Wolfgang Beeser 1 052 0.02% 0 Heinz Karrer 1 167 0.02% 0 John Lindquist 1 146 0.02% 0 David Schnell 2 647 0.05% 0 Annette Schömmel 1 326 0.03% 0 Raymond D. Webster 1 346 0.03% 0

Group Executive Board Leif Vase Larsen 808 0.02% 0 Stefan Leser 3 329 0.07% 0 Rolf Schafroth 1 768 0.04% 0 Peter Meier 1 0.00% 0

Total 18 873 0.38% 0 0%

2010 Board of Directors Henning Boysen, Chairman 3 190 0.08% 0 Wolfgang Beeser 838 0.02% 0 Heinz Karrer 930 0.02% 0 John Lindquist 698 0.02% 0 David Schnell 2 350 0.06% 0 Annette Schömmel 1 148 0.03% 0 Raymond D. Webster 848 0.02% 0

Group Executive Board Max E. Katz 1 3 243 0.09% 0 Leif Vase Larsen 505 0.01% 0 Stefan Leser 1 150 0.03% 0 Rolf Schafroth 460 0.01% 0 Peter Meier 2 1 0.00% 0

Total 15 361 0.40% 0 0%

1 Member of the Group Executive Board who left the company during 2010.

2 Member of the Group Executive Board newly appointed during 2010.




02_05_04_boarD oF Directors’ ProPosal For the aPProPriation oF retaineD earnings

Instead of a dividend, the Board of Directors will propose to the Annual General Meeting that shareholders receive a withholding tax-free appropriation from the capital contribution reserve of CHF 0.60 per registered share A and CHF 3.00 per registered share B.

CHF 2011 2010

Profit carried forward 1 177 433 1 975 049Net result for the year 11 679 501 21 425 261

Retained earnings 12 856 934 23 400 310

Dividends: 1

Per registered share A 0 0Per registered share B 0 0

Total dividends 0 0

Allocation to other reserves 11 000 000 22 222 877Appropriation of profit 11 000 000 22 222 877

Profit carried forward to new account 1 856 934 1 177 433Retained earnings 12 856 934 23 400 310

CHF 2011 2010

Legal reserve from capital contribution 379 855 161 111 792 427Distribution from legal reserve from capital contribution 11 995 200 7 235 672

Distribution 1 Per registered share A CHF 0.60 749 700 476 000Per registered share B CHF 3.00 • on3551638sharesentitledtodividendat31December2011 10 654 914 6 759 672• on196862treasurysharessetasidefortheemployeeshareplanat31December2011 590 586 0

Total distribution 11 995 200 7 235 672

1 The dividends on treasury shares B which have been set aside for the employee stock option plan

and are in our possession on the date of the dividend payment will be added to retained earnings.

1 The company will waive its entitlement to such payments from the capital contribution reserve for

the treasury shares held on the distribution date which are reserved for use in its employee share

plan. The amount due on these shares will be taken to the legal reserve from capital contributions.

02_05_03_

> Notes

Risks are assessed by conducting interviews with management members and further key personnel. The associated risk scenarios are then developed on the basis of these and further considerations, including corporate goals and strategies. Kuoni’s group-wide risk management covers 17 top Group-level risks and three to five specific top risks for each of the divisions and the most important business units.

Within the Internal Control System (ICS), the corresponding processes had those specific risks systematically monitored which are relevant to the annual accounting process in terms of their incorrect or fraudulent reporting potential. The key controls derived from these were implemented where they were not already fully in place, and documented. Procedures have also been defined to monitor and assess the existence of internal controls.




In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the board of directors.

We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s articles of incorporation. We recommend that the financial statements submitted to you be approved.

KpmG AG

martin Schaad Licensed Audit Expert Auditor in Charge

ivano castagna Licensed Audit Expert

Zurich, 15 March 2012

> Report of the Statutory Auditor

02_05_05_

rePort oF the statutory auDitor

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor consid-ers the internal control system relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

■■■■ opinion

In our opinion, the financial statements for the year ended 31 December 2011 comply with Swiss law and the company’s articles of incorporation.

■■■■ RepoRt on otHeR leGAl ReQuiRementS

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.

Report of the Statutory Auditor on the Financial Statements to the General Meeting of Shareholders of Kuoni Travel Holding Ltd., Zurich.

As statutory auditor, we have audited the accompany- ing financial statements of Kuoni Travel Holding Ltd., presented on pages 239 to 252, which comprise the statement of financial position, income statement and notes for the year ended 31 December 2011.

■■■■ BoARd oF diRectoRS’ ReSponSiBility

The board of directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and the company’s articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The board of directors is further responsible for selecting and applying appro-priate accounting policies and making accounting estimates that are reasonable in the circumstances.

■■■■ AuditoR’S ReSponSiBility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

256 | 257 K u o n i A n n u A l R e p o R t # 2 0 1 1fig. 8: A terraced volcanic crater used as a Maori fortress when Europeans first landed in New Zealand.

travel is yearningto see the other siDe.

258 | 259 K u o n i A n n u A l R e p o R t # 2 0 1 10 2 – F i n A n c i A l R e p o R t

c o R p o R A t e G o V e R n A n c e

02_06_00_

introDuction

This Corporate Governance Report describes the principles of management and control as they apply to the top decision-making bodies of the Kuoni Group. To enhance transparency and thus comparability with prior years and other companies, it has been prepared in conformity with the SIX Corporate Governance Directive of 29 October 2008. Unless otherwise specified, all the information contained in the report is based on data as at 31 December 2011. The principles and rules of corporate governance as practised by the Kuoni Group are set out in the company’s Articles of Incorporation, its Organisational Regulations and the regulations of the Board of Directors committees. The Chairman of the Board of Directors reviews the content and current relevance of the corporate governance provisions regularly, and proposes any additions or amendments required to the Board of Directors.

The Kuoni Group meets all the relevant corporate governance provisions. In particular, the Kuoni Group abides by all existing legislation, the directives of the SIX Swiss Exchange (and the remarks thereto) and the Swiss Code of Best Practice for Corporate Governance issued by economiesuisse, Switzerland’s umbrella business association (as updated in 2007).

This document contains, under Point 02_06_10, the Compensation Report of the Board of Directors, which also complies with the provisions of Newsletter 2010/1 of FINMA, the Swiss Confederation’s financial markets supervisory authority.

02_06_

Trust, reliability and security are all basic prerequisites for a healthy and successful company. Maintaining these essential parameters of business management and control is the key task of Corporate Governance. Profes-sionally implemented Corporate Gov-ernance is essential for any successful and responsible company that seeks to serve its shareholders, employees and external stakeholders.

corPorate governance



www.kuoni.com/ share-capital-structure

02_06_02_

caPital structure

Kuoni Travel Holding Ltd. is not aware of any shareholders’ agreements.

■■■■ cRoSS-SHAReHoldinGS

Kuoni Travel Holding Ltd. has no cross-shareholdings, whether purely of a capital nature or involving voting rights.

■■■■ cApitAl

For further details and the composition of the amounts of ordinary, authorised and conditional capital of Kuoni Travel Holding Ltd. at year- end, please see note 21 on page 207 of the Financial Report. Further information on the capital structure is available on the company website.

Kuoni Travel Holding Ltd. conducted a capital increase in 2011. The new registered shares were used to finance or refinance the acquisition of shares in GTA Holdco Limited, GTA Americas LLC, Octopus Travel.com (USA) Limited and Columbus Technology Developments Limited (collectively known as Gullivers Travel Associates [GTA]). The subscription rights of existing shareholders were granted in full for the new share issue.

■■■■ AutHoRiSed And conditionAl cApitAl in pARticulAR

The authorised capital of Kuoni Travel Holding Ltd. amounts to CHF 571 200 and is valid until 20 April 2013. The use of the authorised capital is limited to the financing or refinancing of GTA Holdco Limited, GTA Americas LLC, Octopus Travel.com (USA) Limited and Columbus Technology Developments Limited which was effected in 2011. The Board of Directors may not issue any new shares for any other purpose on the basis of the authorised capital. The Board of Directors will delete Article 3ter of the Articles of Incorporation of Kuoni Travel Holding Ltd. relating to authorised capital upon the expiration of its validity on 20 April 2013.

02_06_01_03_

02_06_02_01_

02_06_02_02_

www.kuoni.com/group

www.six-swiss-exchange.com/ shares/companies/ major_shareholders_de.html

www.kuoni.com/major-shareholders

02_06_01_

grouP structure anD shareholDers

■■■■ GRoup StRuctuRe

Kuoni Travel Holding Ltd. is a joint-stock holding company under Swiss law which has direct or indirect shareholdings in all the companies worldwide which belong to the Kuoni Group. The Kuoni Group maintains lean and efficient management structures at all levels. While the Board of Directors devotes itself to overall management, strategic and super-visory duties, the Group Executive Board is entrusted with operational management tasks. For a diagram of the operational structure of the Kuoni Group, see page 46 of the Market Report. The registered shares B of Kuoni Travel Holding Ltd., Zurich, which have a nominal value of CHF 1.–, are traded on the Main Standard of the SIX Swiss Exchange (securities number 350 485, ISIN CH 0003504856). The registered shares A of Kuoni Travel Ltd., Zurich, which have a nominal value of CHF 0.20, are not listed. The company’s legal domicile is at Neue Hard 7, Zurich. Kuoni Travel Holding Ltd. does not hold any equity interests in any stock-exchange-listed companies. For details of the unlisted companies that belong to the Kuoni Group of consolidated companies, see pages 230 to 233 of the Financial Report. A detailed description of the global activities of the Kuoni Group is available in the Market Report or on the company website.

■■■■ pRincipAl SHAReHoldeRS

The information on principal shareholders of Kuoni Travel Holding Ltd. is provided in the table on page 208 of the Financial Report. This shows those shareholders holding over 3% of the company’s shares, together with their current holdings (based on information provided by the same). The company received one notification of significant shareholders as required under Article 20 of the Swiss Federal Act on Stock Exchanges and Securities Trading in the course of 2011. This notification was published on the SIX Swiss Exchange’s notifications platform and on the company website. Kuoni Travel Holding Ltd. is not aware of any other shareholders holding more than 3% of the company’s shares as of 31 December 2011.

02_06_01_01_

02_06_01_02_



> Capital Structure

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 Incor-poration. The Board of Directors is authorised to restrict or revoke the pre-emptive rights of shareholders when such bonds or similar debt instruments to which conversion and / or warrant rights are attached are issued to finance the acqui sition of other companies or parts of compa-nies. If shareholders’ 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 financial 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 voting right restrictions.

02_06_02_

> Capital Structure

Although the authorised capital of Kuoni Travel Holding Ltd. can virtually no longer be used as a result of the above restriction, the following information is still provided because it is required to be included in a company’s Annual Report by the corresponding corporate governance information directive of the SIX Swiss Exchange:

In accordance with Article 3ter of the Articles of Incorporation of Kuoni Travel Holding Ltd., the Board of Directors is authorised to increase share capital by up to CHF 571 200 through the issue of a maximum of 178 500 fully-paid-up registered shares A with a nominal value of CHF 0.20 per share and a maximum of 535 500 fullly-paid-up registered shares B with a nominal value of CHF 1.00 per share at any time until 20 April 2013. Should it do so, the Board of Directors shall specify the issue amount, the type of contribution, the date of such issue and the commencement of dividend entitlement. In the issue of any such shares, the subscription rights of existing shareholders shall be granted in full. The Board of Directors may also issue such new registered shares through their firm acquisition by a bank or a third party and subsequent offering to existing shareholders. The Board of Directors is empowered to determine the subscription price and the further subscription-right provisions. Should subscription rights not be exercised, the Board of Directors may permit these to lapse, place them (and the corresponding shares) on the market at market rates or use them in any other way in the interests of the company. The exercising of contractually-acquired subscription rights and the subscription to and acquisition of the new registered shares, and any subsequent trannsfer thereof, are subject to Article 5 of the Articles of Incorporation of Kuoni Travel Holding Ltd. Every new share entitles its holder to one vote.

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.



> Capital Structure

Securities held with an intermediary may only be disposed of or used as collateral in compliance with the terms of the Swiss Intermediary-Held Securities Act (“Bucheffektengesetz”). Uncertificated securities which do not qualify as securities held with an intermediary may only be trans-ferred by assignment. Such assignment shall only be valid if Kuoni Travel Holding Ltd. is notified thereof.

All registered shares are entitled to a dividend. Kuoni Travel Holding Ltd. waives its entitlement to a dividend on any shares held by the company as treasury shares at the time of the dividend payment. The voting rights attached to such shares are suspended by law.

Kuoni Travel Holding Ltd. has not issued any participation certificates.

■■■■ diVidend-RiGHt ceRtiFicAteS

Kuoni Travel Holding Ltd. has not issued any dividend-right certificates.

■■■■ ReStRictionS on tRAnSFeRABility And nominee ReGiStRAtionS

The following provisions apply to the registered shares A and B of Kuoni Travel Holding Ltd.

The Board of Directors of Kuoni Travel Holding Ltd. will deny the registration of an acquirer of registered shares subject to the provisions of the last paragraph in this chapter 02.06 as the holder or usufructuary of the registered shares with voting rights concerned if, as a result of such registration, the acquirer were to acquire or collectively hold, directly or indirectly, more than 3% of the registered share capital entered in the Commercial Register. For the registered shares exceeding this 3% ceiling, the acquirer shall be registered in the share register as the holder or usufructuary of these registered shares without voting rights.

02_06_02_05_

02_06_02_06_

02_06_02_

> Capital Structure

■■■■ cHAnGeS in cApitAl And SHARe BuyBAcK pRoGRAmme

For 2009, 2010 and 2011 please refer to note 7 on page 242 of the Financial Report.

■■■■ SHAReS And pARticipAtion ceRtiFicAteS

The composition of the share capital of Kuoni Travel Holding Ltd. is shown on page 207 of the Financial Report. At the General Meeting of Shareholders of Kuoni Travel Holding Ltd. each registered share carries one vote. These voting rights can only be exercised if the shareholder is registered as a shareholder with voting rights in the Kuoni Travel Holding Ltd. share register. Under the Articles of Incorporation, such registration also requires a declaration from the shareholder that they have acquired the shares concerned in their own name and for their own account.

The unlisted registered shares A (nominal value CHF 0.20) have a five times lower nominal value than the listed registered shares B (nominal value CHF 1.00), and thus have five times greater voting rights in terms of the capital invested.

The registered shares of Kuoni Travel Holding Ltd. are uncertificated. The shareholder may demand at any time that Kuoni Travel Holding Ltd. issue a confirmation in respect of the registered shares which the shareholder currently owns. The shareholder is not entitled to the prin- ting and delivery of certificates for registered shares. Kuoni Travel Holding Ltd., by contrast, may print and deliver certificates representing shares (single or global share certificates or certificates comprising multiple shares) at any time instead of uncertificated securities. Kuoni Travel Holding Ltd. may also cancel without replacement any such pre viously issued share certificate or uncertificated security.

02_06_02_03_

02_06_02_04_



Legal entities or partnerships that are interrelated through capital ownership, voting rights or uniform ma nagement or are otherwise linked with one another, as well as individual persons or legal entities or partnerships who act in concern for the purpose of circumventing the limitation for registration in the share register shall, for the purposes of the preceding paragraph, be treated as one single acquirer.

The limitation for registration in the share register set forth in para-graph 1 of this chapter 02.06 subject to Article 652b, paragraph 3 of the Swiss Code of Obligations, also applies to registered shares which are acquired through the exercising of pre-emptive rights, warrants and conversion rights. The limitation for registration in the share register shall not apply to an acquisition of registered shares by succession or division of estate or under marital property law.

Other than set forth above, acquirers of registered shares shall be registered in the share register as shareholders with voting rights upon their application, provided they expressly declare that they have acquired the registered shares in their own name and for their own account.

The Board of Directors of Kuoni Travel Holding Ltd. may register individual persons who do not expressly declare that they hold the registered shares for their own account (“nominees”) in the share register with voting rights if the nominee has entered into an agreement with the Board of Directors with respect to such status and if the nominee is subject to the supervision of a recognised bank or financial market.

The Board of Directors of Kuoni Travel Holding Ltd. may also, after having heard the person concerned, cancel a person’s registration in the share register as a shareholder or nominee with voting rights with retroactive effect to the date of registration if such registration was based on incorrect information from the acquirer, and shall then in such cases register the shareholder or nominee concerned in the share register as a shareholder or nominee without voting rights. In the event

of any such action, the shareholder concerned must be immediately informed.

The Board of Directors of Kuoni Travel Holding Ltd. shall specify the particulars and give the necessary directions to ensure compliance with the preceding provisions. It may also allow exemptions in particular cases from the regulation regarding nominees and the percentage limitation specified in paragraph 1. The Board of Directors issues regulations on this. The Board may also delegate its duties.

No exemptions from the transferability and nominee registration restrictions were granted in 2011.

The vested rights of the shareholders entered in the share register on 25 February 1995 (including those of their legal successors by virtue of the devolution or partition of an estate, a matrimonial property regime or a merger with or incorporation into a directly-controlled, wholly-owned holding company) remain intact. The limitations outlined above shall also not apply to shares which have been or will be acquired by the shareholders entered in the share register on 25 February 1995 or their legal successors as defined above through the exercising of subscription, warrant, option or conversion rights arising from the shares entered in the share register on 25 February 1995 and any shares derived therefrom.

■■■■ conVeRtiBle BondS And optionS

Kuoni Travel Holding Ltd. had no convertible bonds or options outstand-ing at the end of 2011.

02_06_02_07_

02_06_02_

> Capital Structure > Capital Structure



www.kuoni.com/ corporate-governance

> Board of Directors

specified in the Articles of Incorporation, the Board of Directors consists of a mini mum of five and a maximum of nine members. These members are each elected for a term of office that shall not exceed three years, with each year extending from one Ordinary General Meeting of Shareholders to the next. The Board of Directors is self-constituting. The Board appoints its Chairman, one or more Deputy Chairmen (as required) and a Secretary, the last of whom need not be a Board member.

The organisational regulations and company bylaws also stipulate that members of the Board of Directors will automatically retire from the Board on the date of the General Meeting of Shareholders following their 70th birthday.

For information on the initial election and remaining period of office of each member of the present Board of Directors, please see the table under 02_06_03_01_ above.

■■■■ inteRnAl oRGAniSAtion

The internal organisation of the Board of Directors is based on the company’s Organisational Regulations, which are issued by the Board of Directors and were last revised in December 2011. The Organisational Regulations may be viewed on the company website.

■■■■ diViSion oF dutieS WitHin tHe BoARd oF diRectoRS

Within the Board of Directors, the Chairman has the following duties and authorities. The Deputy Chairman deputises for the Chairman in his absence, and bears the same duties and authorities when doing so. Apart from these duties and authorities, the Chairman and Deputy Chairman have no particular function within the Board of Directors.

The Chairman is responsible for the formal and organisational leader-ship and management of the Board of Directors. In urgent cases, he shall also take the necessary decisions and precautions until the matter

02_06_03_04_

www.kuoni.com/board-of-directors

www.kuoni.com/board-of-directors

02_06_03_

boarD oF Directors

■■■■ memBeRS oF tHe BoARd oF diRectoRS

a) The Board of Directors of Kuoni Travel Holding Ltd. consists of the following seven members:

The curricula vitae of the individual Board members can be viewed on page 47 of the Market Report and on the company website.

b) All the members of the Board of Directors are non-executive inde-pendent directors.

c) None of the present Board members sat on the Group Executive Board of Kuoni Travel Holding Ltd. or on the executive board of any group subsidiary of Kuoni Travel Holding Ltd. within the last three years. Similarly, none of the present Board members maintains material business relationships with Kuoni Travel Holding Ltd. or with any group subsidiary of Kuoni Travel Holding Ltd.

■■■■ otHeR ActiVitieS And FunctionS

Details of other activities and functions of the members of the Board of Directors are available on the company website.

■■■■ election And teRm oF oFFice

Each individual member of the Kuoni Travel Holding Ltd. Board of Directors is elected separately by the General Meeting of Shareholders. As

02_06_03_01_

Name Born Nationality Function Joined Current term expires

Henning Boysen 1946 Danish Chairman 2003 2012Wolfgang Beeser 1942 German Deputy Chairman 2007 2013Annette Schömmel 1965 Swiss /German Member 2004 2013Raymond D. Webster 1946 British /New Zealander Member 2006 2013David Schnell 1947 Swiss Member 2002 2012Heinz Karrer 1959 Swiss Member 2007 2014John Lindquist 1950 British / US-American Member 2007 2014

02_06_03_02_

02_06_03_03_




The prime duty of the Audit Committee is to support the Board of Directors in its monitoring and super vision of the company’s accounting and financial management. Its main tasks therein comprise: • providingindependentandobjectivemonitoringoftheintegrity of the company’s consolidated reporting process, internal financial control systems and accounting and their compliance with the relevant legal provisions; • assessingtheindependenceandperformanceofboththeexternal and the internal auditors; • ensuringopencommunicationsbetweentheGroupExecutiveBoard, the Board of Directors and the internal and external auditors.

The Audit Committee further reviews: • theguidelinesimposedbytheGroupExecutiveBoardtoensure efficient financial reporting processes and controls; • periodicdiscussionsofthecurrentstateofaffairswiththeGroup Executive Board and the internal auditors and separately with the external auditors.

The Audit Committee also performs the following main tasks which have been assigned to it by the Board of Directors: • reviewingtheAnnualReport,theannualandinterimfinancial statements, the nine-month Business Update and the auditing reports and management letters of the Kuoni Group and Kuoni Travel Holding Ltd. and submitting proposals to the Board of Directors; • ensuringcompliancewithsetaccountingstandardswithin the Group; • approvingtheintegratedauditplansoftheexternalauditors as well as the internal auditors; • assessinganddiscussingtheexternalauditors’auditreports; • assessingtheperformance,independenceandcompensation of the external auditors; • selectingtheauditingcompanytobeproposedtotheGeneral Meeting of Shareholders for election as the company’s statutory

02_06_03_


can be decided upon by the Board of Directors. The Chairman further monitors the observance of legal requirements, the Articles of Incorporation, regulations and directives by the company’s management bodies, and submits the requisite motions, requests and proposals to the Board of Directors. The Chairman also ensures, in collaboration with the Group Executive Board, that information is provided in good time on all major aspects of the company which are of relevance to the monitoring of its activities and to the corporate decision-making process. Further details of the duties and authorities of the Chairman of the Board are provided in Section 2.5 of the Organisational Regulations.

■■■■ BoARd committeeS

The Board of Directors has formed the following two committees to assist it in its work: the Audit Committee and the Nomination and Compensa-tion Committee.

Each of these committees has written regulations specifying its tasks and responsibilities.

The Audit Committee currently consists of David Schnell (chairman), Wolfgang Beeser and John Lindquist . The Audit Committee has assured itself that the majority of its members have the requisite expertise in accounting and financial management. The Audit Committee reports to the Board of Directors on its con clusions, and the Board of Directors decides upon appro priate action.




furthering the development of management as a whole. The Nomination and Compensation Committee enlisted the services of an external specialist, Hostettler Kramarsch & Partner, Zurich, in 2011 to assist it in its decisions and recommendations. The Nomination and Compensation Committee reports to the Board of Directors on its conclusions, and the Board of Directors decides upon appropriate action on the basis thereof. In this connection, please also see the Compensation Report (note 02_06_10 below).

■■■■ WoRKinG metHodS oF tHe BoARd oF diRectoRS And itS

committeeS

The Board of Directors and its committees meet as often as business requires, but a minimum of six times a year for the Board of Directors, four times a year for the Audit Committee and three times a year for the Nomination and Compensation Committee. The Board of Directors met nine times for regular meetings in 2011 (average length: 8 hours) and also held one extraordinary meeting of 2.5 hours duration. The Audit Committee held four regular meetings (average length: 6.5 hours); and the Nomination and Compensation Committee held three regular meetings (average length: 3.5 hours) and three telephone conferences (average length: 45 minutes).

The Board of Directors meets at the invitation of its Chairman. A Board meeting may also be demanded by any of its members or by the CEO.

The agenda of the Board of Directors’ meetings is set by the Chairman. Any member of the Board of Directors may table an agenda item. The members of the Board of Directors each receive documentation prior to the meetings which enables them to prepare for discussion of the agenda items concerned.

Board meetings are chaired by the Chairman. A Board meeting shall be quorate provided the majority of Board members are present. The Board votes and passes resolutions by a simple majority. In the event of a tie, the

02_06_03_


auditor and submitting the corresponding proposal to the Board of Directors; • periodicallyreviewinginternalprocessesandprocedures; • periodicallyreviewingthesuitabilityandeffectiveness of the internal auditors; • submittingproposalstotheBoardofDirectorsonentriesinto the share register for shareholders with voting rights in connection with Article 5 of the Articles of Incorporation; • periodicallyreviewingtheguidelinesissuedonad-hoc publicity and the prevention of insider dealing; • submittingproposalstotheBoardofDirectorsonnotifying the courts in the event of overindebtedness; • periodicallyreviewingallinternalguidelinesanddirectives that are not reviewed by any other committee.

The Audit Committee has its own authority on the following matters: • ensuringtheauditors’fulfilmentofthelegalrequirements on licensing as stipulated in the Auditor Oversight Act (AOA) and independence (Swiss Code of Obligations, Article 728); • maintainingtheshareregister; • periodicallyreviewingtheorganisationoftheinternalauditor; • reviewingstrategictaxplanningissues; • Remuneratingexternalauditorsforsubsidiaries; • appointinganddismissingtheHeadofInternalAudit.

The Nomination and Compensation Committee is composed of Heinz Karrer (chairman), Annette Schömmel and Raymond D. Webster. The main tasks of the Nomination and Compensation Committee are to monitor the organisation, qualification, performance and remuneration of management and the Board of Directors and to review the terms and conditions of any employee share purchase plan. Other tasks performed by the committee are assessing the performance of the CEO and the Group Executive Board as a team, arranging succession plans for the members of the Board of Directors and the Group Executive Board, seeking and proposing new members for the Board of Directors and




Minutes are kept of all Board committee meetings. Committee resolutions may also be passed by circular written communication, provided no member demands that a meeting be convened.

An annual self-assessment procedure has been established to permanent-ly monitor and if possible enhance the performance of the Board of Directors. This evaluates how efficiently the Board and its committees are performing their functions and meeting their responsibilities, whether each Board member participates actively in Board discussions and makes contributions based on independent judgement, and whether an environment of open discussions is maintained at Board meetings.

■■■■ AReAS oF ReSponSiBility

The Board of Directors is the company’s supreme managing body and is responsible for supervising the management of the company and its business. It deals with all matters that are not entrusted to another body of the company under the law, the company’s Articles of Incorporation or its Organisational and Business Regulations.

With regard to the non-transferability and inalienability of duties of the Board of Directors, reference is made to Article 716a of the Swiss Code of Obligations and Article 20 of the Articles of Incorporation.

The Board of Directors may also, subject to the relevant legal provisions, delegate all or part of its duties to manage and represent the company to one or more of its members (as managing directors) or to third parties by issuing the appropriate organisational regulations. In this connection, the Board of Directors has issued a set of Organisational Regulations which specify (under Section 2.3) its further duties and authorities and list (under Section 4.3) those business items which require its approval.

02_06_03_05_

02_06_03_


meeting chair has the casting vote. In addition to its members, meetings of the Board of Directors are generally attended by the CEO and the Chief Financial Officer (CFO), and by further members of the Group Executive Board as and when required. These attendees have only an advisory function, along with the right to table motions or agenda items. Persons who are not members of the Group Executive Board may also attend as specialists at the chair’s invitation.

Minutes are kept of all meeting deliberations. Board resolutions may also be passed by written approval (letter, fax, email or other written form), again by a simple majority, provided all Board members have had the opportunity to cast their vote and provided no member demands oral discussion of the matter concerned.

Board committee meetings are held at the invitation of the chair. A Board committee meeting may also be demanded by any committee member or the CEO (and an Audit Committee meeting may additionally be demanded by the Chairman of the Board, the CFO or the internal or external auditors). The agenda of Board committee meetings is compiled by the chair. Any committee member may table an agenda item.

The committee members each receive documentation prior to the meet-ings which enables them to prepare for discussion of the agenda items concerned.

Board committee meetings are chaired by the committee chair. A committee meeting shall be quorate (and empowered to submit proposals to the Board of Directors) provided the majority of committee members are present. The meeting votes and passes resolutions by a simple majority. In the event of a tie, the meeting chair has the casting vote. In addition to its members, meetings of the Audit Committee are generally attended by the Chairman of the Board, the CEO, the CFO, the Head of Internal Audit and a representa-tive of the external auditors. In addition to its members, meetings of the Nomination and Compensation Committee are generally attended by the Chairman of the Board, the CEO and the Chief Human Resources Officer.




• ensuringthatalllegalrequirementsareobservedandthat all applicable legal provisions are familiar to and observed by the company’s employees (Corporate Compliance; the basic parameters here are laid down in the company’s Code of Conduct); • theinternalorganisationandtheinternalcontrolsystem; • hiringanddismissingemployees; • monitoringtheperformanceofexternalserviceproviders; • preparingmeetingsoftheBoardofDirectorstogether with its Chairman and presenting the necessary documents; • reportingtotheBoardofDirectors.

The Group Executive Board is empowered to pass resolutions on all business assigned to it. The Group Executive Board may submit such business to the Board of Directors for approval. The provisions on which items of business must be submitted to the Board of Directors for approval are laid down in the Organisational Regulations (Article 4.3 thereof).

■■■■ inFoRmAtion And contRollinG inStRumentS FoR SupeRViSinG

tHe GRoup eXecutiVe BoARd

The Management Information System (MIS) of the Kuoni Group is structured as follows. The financial state ments of the individual subsidi-aries are prepared on a monthly, quarterly, semi-annual and annual basis. These figures are aggregated per division and consolidated for the Group. The figures are compared with the previous year and the budget. The attainability of the budget, which is based on the first year of a three-year mid-term plan for each subsidiary, is assessed on the basis of quarterly reporting and forecasts. The heads of the divisions submit monthly written reports on the progress of business to the Group Executive Board and the Board of Directors. These reports are discussed with the Group Executive Board at the Board of Directors’ meetings, as are the implementation and observance of Board resolutions and the company’s liquidity levels.

02_06_03_06_

www.kuoni.com/ corporate-governance

02_06_03_


The Board of Directors of Kuoni Travel Holding Ltd. manages the subsidiaries under its legal and / or economic control as a corporate group. The responsibility for the resolutions taken by the Board of Directors there fore extends not only to the company in the legal sense but also to all the subsidiaries described above by virtue of the Board’s authority to issue instructions to the representatives of the company in their respective governing bodies. Within the overall parameters imposed by the law and the Articles of Incorporation, the Board of Directors delegates the management of the company to the Group Executive Board by means of the relevant Organisational Regulations, which can be viewed on the company website.

The Group Executive Board has the duty and the authority to manage the Kuoni Group’s business operations. It is responsible in particular for: • planning,managingandmonitoringthecompany’sprofitability, risk positions, balance sheet structure and liquidity within the guideline parameters laid down by the Board of Directors; • devisingthebusinessstrategy,multi-yearbusinessplanandbudget for the following business year, and submitting these to the Board of Directors; • preparingandsubmittingproposalstotheBoardofDirectors, particularly in relation to financing policy, investment policy, asset management policy, risk management and sourcing and trading policy, and in other areas as and where required (the Group Executive Board shall also ensure the subsequent detailed adoption of such policies and the obser vance of the principles laid down in connection therewith, and shall report regularly to the Board of Directors thereon); • compilingtheannualandhalf-yearaccountsandtheNine-Month Business Update and providing the additional information required in connection therewith, and submitting these to the Board of Directors.




Internal Audit complements the controlling mechanisms available to the Board of Directors and reports directly to the Board’s Audit Committee. Internal Audit supports the Group Executive Board in special projects as requested by the CEO or other members of the Group Executive Board, and in other matters. Internal Audit’s main task is to conduct an independent assessment of internal control systems and their effectiveness with regard to potential risks. The reports prepared by Internal Audit regarding the audits carried out are submitted to the members of the Audit Committee, the Chairman of the Board, the CEO, the CFO, the Head of IT, the Head of Corporate Controlling, the Group General Counsel and the external auditor. Each report also contains comments by the Group Executive Board regarding the key findings of the audits conducted in addition to suggested improvements.

02_06_03_


Any member of the Board of Directors may demand to be informed about the company’s affairs. The CEO is responsible for informing the Board of Directors about the current course of business and important business transactions occurring in the company and in its subsidiaries. The CEO reports to the Chairman of the Board at regular intervals. The CEO must also inform the Chairman immediately of any unusual events, and the Chairman will in turn pass such information on to the members of the Board.

To ensure the direct information of the full Board of Directors, the CEO regularly attends meetings of the Board of Directors and its committees unless the Board or its committees need to conduct a closed meeting session. The CFO also attends all meetings of the Audit Committee and is further present for most agenda items at full Board meetings. The further members of the Group Executive Board attend Board meetings for particular agenda items as and when required. The Chairman of the Board also receives copies of the minutes of all meetings of the Group Executive Board.

The company’s risk management function provides an established risk model for identifying, managing and moni toring strategic and opera-tional risks throughout the Kuoni Group. The groupwide risk profile consists of the risks identified in the Group’s main country organisations (adopting the bottom-up approach) and groupwide strategic risks (adopting the top-down approach). The present risk profile and the current status of risk-reducing measures resolved are regularly monitored and are reported twice-yearly to the Board of Directors.


www.kuoni.com/executive-board

02_06_04_

■■■■ membeRs oF the gRoup executive boARd

For details of the members of the Group Executive Board, please see page 51 of the Market Report.

■■■■ otheR Activities And Functions

Details of other activities and any further functions of Group Executive Board members are provided on the company website.

No member of the Group Executive Board holds any official function or political office.

■■■■ mAnAgement contRActs

Kuoni Travel Holding Ltd. and its Group subsidiaries have not concluded any management contracts with any third parties.

02_06_04_01_

02_06_04_02_

02_06_04_03_

the grouP executive Board


C o R p o R A t e G o v e R n A n C e

280 | 281

02_06_05_

Compensation, shares and Loans

Details of the compensation, shares and loans of members of the Board of Directors and the Group Executive Board are provided in the Compen-sation Report (note 02_06_10).




> Shareholders’ Participation Rights

the devolution or partition of an estate, a matrimonial property regime or merger with or incorporation into a directly-controlled, wholly-owned holding company) remain intact. Neither do the limitations outlined above apply to shares which have been or will be acquired by the share-holders entered in the share register on 25 February 1995 or their legal successors as defined above through the exercise of subscription, warrant, option or conversion rights arising from the shares entered in the share register on 25 February 1995 and any shares derived therefrom.

■■■■ StAtutoRy QuoRumS

As a general principle, the General Meeting of Shareholders votes and passes resolutions by an absolute majority of the votes in favour and votes against cast (excluding abstentions). The following resolutions of the General Meeting of Shareholders require at least two-thirds of the votes represented and an absolute majority of the nominal value of the shares represented to be passed: • amendmentstotheArticlesofIncorporation,includinganychanges to the company’s purpose; • thecreationofshareswithprivilegedvotingrights; • limitingorrelaxingthetransferabilityofregisteredshares; • anauthorisedorconditionalcapitalincrease; • acapitalincreasethroughtheconversionofcapitalsurplus, in return for a non-cash contribution or for the purposes of acquiring property and granting special rights; • limitingorrevokingpre-emptiverights; • changestothelocationofthecompany’sregisteredoffice; • thedissolutionofthecompanythroughliquidationorbymerger.

■■■■ conVeninG tHe GeneRAl meetinG oF SHAReHoldeRS

The Ordinary General Meeting of Shareholders is convened in accordance with the relevant legal requirements. It is generally convened in April, and must be held within six months of the end of the financial year to which it relates. An Extraordinary General Meeting of Shareholders

02_06_06_02_

02_06_06_03_

02_06_06_

shareholDers’ ParticiPation rights

■■■■ ReStRiction And RepReSentAtion oF VotinG RiGHtS

Each share entitles its holder to one vote at the Annual General Meeting. When exercising the right to vote, no shareholder shall be able to vote, directly or indirectly, with more than 3% of the registered share capital entered in the Commercial Register; this 3% includes their own shares and shares represented by proxy. This limitation on voting rights does not apply to corporate proxies (Article 689c of the Swiss Code of Obligations), independent proxies (Article 689c of the Swiss Code of Obligations), depositaries (Article 689d of the Swiss Code of Obligations) or sharehold-ers registered in the share register as shareholders with voting rights for more than 3% of the registered share capital entered in the Commer-cial Register.

Legal entities or partnerships that are interrelated through capital ownership, voting rights or uniform ma nage ment or that are otherwise linked with one another, as well as individual persons or legal entities or partnerships acting in concert for the purpose of circumventing the limitation on registration in the share register are regarded as one single shareholder for the purposes of the preceding paragraph.

The Board of Directors of Kuoni Travel Holding Ltd. issues procedural rules regarding participation in and representation at the General Meeting of Shareholders. A shareholder may only be represented at the General Meeting of Shareholders by their legal representative, another shareholder with the right to vote, the corporate proxy, the independent proxy or a depositary. All the shares held by a shareholder may be represented by one person only.

The members of the Board of Directors of Kuoni Travel Holding Ltd. who are present at the Annual General Meeting of Shareholders decide whether powers of attorney are to be recognised.

The vested rights of the shareholders entered in the share register on 25 February 1995 (including those of their legal successors by virtue of

02_06_06_01_




02_06_07_

changes oF control anD DeFence measures

■■■■ duty to mAKe An oFFeR

There are no opting-up or opting-out clauses in the Articles of Incor-poration of Kuoni Travel Holding Ltd. In view of this, any person owning more than one-third of the voting rights of Kuoni Travel Holding Ltd. must make an offer for all the company’s listed shares.

■■■■ cHAnGe-oF-contRol clAuSeS

The following change-of-control clauses apply:

■■■■ BoARd oF diRectoRS

There are no change-of-control clauses in any agreements or plans to the benefit of members of the Board of Directors.

■■■■ memBeRS oF tHe GRoup eXecutiVe BoARd And GRoupWide

SenioR mAnAGement

In the event of a change of control, the current three-year vesting period under the Long-Term Incentive shall end immediately and the corre-sponding shares shall be assigned. Apart from this, there are no change-of-control clauses in any agreements or plans to the benefit of members of the Group Executive Board or groupwide Senior Management.

■■■■ BondHoldeRS

In the event of a change of control, bondholders are entitled to demand the premature repayment of their bond amount.

■■■■ SyndicAted cRedit FAcility lendeRS

In the event of a change of control, the banks participating in the syndi-cated credit facility are entitled to demand the premature repayment of any current loan amounts thereunder and/or to terminate the facility.

02_06_07_01_

02_06_07_02_

www.kuoni.com/ annual-general-meeting

www.kuoni.com/ annual-general-meeting

02_06_06_

> Shareholders’ Participation Rights

can be convened if the Board of Directors or the external auditors deem this appropriate. The convention of an Extraordinary General Meeting of Shareholders may also be demanded by shareholders representing at least 10% of share capital, provided this is done jointly and in writing stating the items to be discussed and the corresponding proposals or, in the event of elections, the names of the candidates proposed.

Every registered shareholder receives a personal invitation to attend, a detailed meeting agenda and notes on the various agenda items at least 20 days in advance of the meeting concerned. The agenda will also be published in various Swiss newspapers and on the website.

■■■■ AGendA

Shareholders representing shares with a nominal value of CHF 20 000 or more can demand that an item be included on the agenda of a General Meeting of Shareholders up to 45 days before the meeting concerned. This request must be submitted in writing, and must also specify the motions to be put to the meeting. The submission deadline is published on the website.

■■■■ entRy in tHe SHARe ReGiSteR

All shareholders entered in the share register as shareholders with voting rights up to three working days before a General Meeting of Shareholders may vote at the meeting concerned. Shareholders who sell their shares before the General Meeting of Shareholders takes place are no longer entitled to vote. Shareholders who buy additional shares or sell part of their shareholding after their meeting admission card has been issued must exchange the card sent to them at the information desk on arriving at the meeting concerned.

02_06_06_04_

02_06_06_05_




www.kuoni.com/financial-calendar

02_06_09_

Kuoni Travel Holding Ltd. maintains an open and transparent communi-cation policy towards its shareholders, current and potential investors, financial analysts, customers, business partners and other stakeholder groups. Kuoni Travel Holding Ltd. provides prompt and comprehensive information on the Group’s business activities, while paying due and full regard to all the applicable provisions and directives of the SIX Swiss Exchange. In its endeavours to present details of its business development to its stakeholders, Kuoni Travel Holding Ltd. also makes forward-look-ing statements. These statements are assessments by the management about the present and future situation and performance of the company as they appear at the time the statement is made.

The latest key dates are always available on the website.

Kuoni Travel Holding Ltd. publishes a comprehensive Annual Report each year informing its shareholders about business developments and the company’s annual results. The Annual Report can be ordered by any shareholder via the invitation to the Ordinary General Meeting of Shareholders. Of particular importance are the Corporate Governance report integrated into the Annual Report and the Financial Report on the past business year. All Kuoni’s consolidated financial statements are compiled in compliance with Inter national Financial Reporting Stand-ards (IFRS).

Key Dates for 2012

Financial year close: 31 December 20112011 annual results published: 20 MarchAnnual Report published: 20 MarchGeneral Meeting of Shareholders: 17 AprilDividend paid to banks: 24 April (ex-day: 19 April)Analysts' Day 30 MayFirst half-year close: 30 JuneHalf-year results announced: 23 AugustNine-month business update announced: 08 November

inFormation Policy02_06_08_

auDitors

■■■■ duRAtion oF mAndAte And teRm oF oFFice oF tHe

AuditoR-in-cHARGe

The auditing mandates issued to KPMG Ltd., Zurich have a duration of one year each. KPMG Ltd., Zurich, has been the auditor of Kuoni Travel Holding Ltd. since 1970. The auditor-in-charge, Martin Schaad, has been in office since April 2009. The auditor-in-charge is changed at least every seven years.

■■■■ Audit Fee

KPMG charged the Kuoni Group fees amounting to CHF 2.7 million during the 2011 financial year for services in connection with the auditing of the annual accounts of Kuoni Travel Holding Ltd. and its Group subsidiaries, as well as the consolidated financial statements of the Kuoni Group. An additional CHF 0.8 million was charged by other audit companies.

■■■■ AdditionAl FeeS

KPMG also charged the Kuoni Group fees totalling CHF 0.7 million for additional services, i.e. tax consulting and accountancy compliance. No fees were charged by other audit companies for any 0ther services.

■■■■ SupeRViSoRy And contRollinG inStRumentS WitH ReGARd to

tHe eXteRnAl AuditoRS

Each year, the Audit Committee of the Board of Directors evaluates the performance, remuneration and independence of the statutory auditor and proposes an external auditor to the Board of Directors who will be put forward for election at the General Meeting of Shareholders. The Audit Committee also annually examines the scope of external auditing, the auditing plans and the relevant processes, and discusses the audit results with the external auditors. Representatives of the external auditors also regularly attend Audit Committee meetings, and attended all four such meetings in 2011.

02_06_08_01_

02_06_08_02_

02_06_08_03_

02_06_08_04_




www.kuoni.com/ investor-presentations

www.kuoni.com/contact

www.kuoni.com/group-news

> Information Policy

These activities are conducted with a focus on recently announced developments or financial results, and in full compliance with SIX Exchange Regulation’s Directive on Ad-hoc Publicity.

The presentations for financial analysts and investors are regularly archived on the Kuoni Group website. These presentations are not constantly updated, but document long-term developments within the company.

Details of the relevant contacts and the Kuoni Investor Relations mailbox are available on the website.

Interested parties may also add their name to the Investor Relations e-mail list on the website.

Subject Link

Share capital and capital structure www.kuoni.com/share-capital-structureInformation on Kuoni’s shares www.kuoni.com/shareBoard of Directors www.kuoni.com/board-of-directorsGroup Executive Board www.kuoni.com/executive-boardOrganisational Regulations www.kuoni.com/corporate-governanceCorporate Governance (including Compensation Report) www.kuoni.com/corporate-governanceKey dates www.kuoni.com/financial-calendar

www.kuoni.com/archive

www.kuoni.com/group-news

02_06_09_

> Information Policy

The reports on first-half results and the nine-month business update are published and dis tri buted in the same way as the company’s media releases. These reports contain unaudited financial results which are compiled in compliance with IFRS guidelines.

Kuoni Travel Holding Ltd. occasionally publishes information on current developments within its various business units or on other Group activi ties. In compliance with the relevant listing regulations of the SIX Swiss Exchange, these communications are always issued simultane-ously to a broad circle of recipients.

An archive containing the company’s Annual Reports, half-year reports, nine-month business updates and further information and presentations is available on the website. Kuoni Travel Holding Ltd. also maintains an archive of all its published ad-hoc disclosures and other communications on the website. All this information is publicly available. Interested parties may also register on the website to receive ad-hoc disclosures and other published communi cations by e-mail.

The information contained in these reports and communications is considered correct at the time of its publication. Kuoni Travel Holding Ltd. does not update media releases issued in the past in the light of subsequent market or business developments.

As part of its investor relations programme, Kuoni Travel Holding Ltd. organises: • thepresentationofitsannualresults; • conferencecallsaroundthepublicationofitshalf-yearresults, the nine-month business update or other information; • meetingswithinvestorsandanalysts,eitherindividuallyor in groups at roadshows in key financial centres; • analysts’andinvestors’eventsonspecifictopicsorissues; • presentationsatbrokers’events.

290 | 291 K u o n i A n n u A l R e p o R t # 2 0 1 1fig. 9: The estuary of the Colorado River in Mexico has tides of almost ten metres during full moon.

curiosity exPanDsour reach.




> Compensation Report

Since the members of the Board of Directors of Kuoni Travel Holding Ltd. are independent and are not members of the Group Executive Board, the details of the compensation of the Board of Directors and of the Group Executive Board are presented in two separate sections.

The Kuoni Group strives constantly to be a first-choice employer which is able to recruit, retain and motivate the best and most professional employees around the world who are of the calibre that is essential to Kuoni’s continued success.

■■■■ tHe Role oF tHe nominAtion And compenSAtion committee

The Kuoni Group’s Nomination and Compensation Committee (NCC) is appointed by the Board of Directors and consists solely of independent non-executive members. The present members of the NCC are Heinz Karrer (chairman), Annette Schömmel and Raymond Webster. Board Chairman Henning Boysen also attended all the NCC’s meetings in 2011.

The main duty of the NCC is to monitor the organisation, qualification, performance and remuneration of executive management and the Board of Directors and to review the terms and conditions of any employee share purchase plan. Other tasks performed by the NCC include assessing the performance of the CEO and the further individual members of the Group Executive Board, arranging succession plans for the members of the Board of Directors and the Group Executive Board, submitting proposals for and recruiting new members of the Board of Directors and furthering the development of management as a whole.

The NCC submits to the Board of Directors – generally once a year in December – its proposal for the structure and the amounts of compensa-tion to be paid to the members of the Board of Directors and the salaries of the members of the Group Executive Board (including the relevant bonus programmes), for the Board of Directors to confirm or modify in accordance with the NCC’s recommendations. It may also enlist the services of external consultants when doing so. “Compensation” in this

02_06_10_02_

02_06_10_

■■■■ compenSAtion RepoRt

In view of the fact that Kuoni Travel Holding Ltd. is listed on the SIX Swiss Exchange, and in line with the desire of its Board of Directors and Group Executive Board to maintain a transparent compensation policy, the present Compensation Report contains all the information required under the Swiss Code of Obligations (Article 663b bis and Article 663c, Paragraph 3) and Section 5.1 of the Directive on Information Relating to Corporate Governance issued by SIX Exchange Regulation. In its corporate governance provisions and its reporting thereon, the Kuoni Group also observes the Swiss Code of Best Practice for Corporate Governance issued by economiesuisse, the umbrella association for Swiss business and industry. The Kuoni Group’s financial statements are compiled in accordance with International Financial Reporting Standards (IFRS). The directives issued by each of these bodies and authorities show slight variations in their presentation and inter-pretation provisions.

The Compensation Report below complies with the provisions of Section 5.1 of the Directive on Information Relating to Corporate Governance issued by the SIX Swiss Exchange, and also pays due regard to Annex 1 of the Swiss Code of Best Practice for Corporate Governance issued by economiesuisse. The Report presents the compensation system used by the Kuoni Group. The compensation paid in accordance with the afore-mentioned provisions of the Swiss Code of Obligations is shown and commented on in note 02_06_10_06_ (pages 304 to 307).

The present Compensation Report is intended to inform the public about the compensation paid by the Kuoni Group. This Compensation Report will be presented to the 2012 Ordinary General Meeting of Shareholders both for approval as an integral part of the 2011 Annual Report and for its separate consultative voting approval.

02_06_10_01_

comPensation rePort





(IPE) system, which grades each function via a “position evaluation” based on a series of criteria: impact (size of organisation, influencing scope, financial contribution), communication (need for the position to communicate, organisational framework), innovation (requirement to identify, improve or further develop processes, services or products) and knowledge (knowledge required to achieve the position’s goals and make a value contribution, team size and team expertise required, and geographical context in which knowledge must be used).

iii) the future development of the Kuoni Group in performance and profitability terms (based on the corresponding Kuoni Group three-year planning, in which external market developments are also projected).

The members of the Group Executive Board have no right of participation or consultation in the determining of their compensation (including any payments due under the relevant bonus programmes). The CEO is, however, generally present when the compensations proposed for Group Executive Board members are discussed, and submits correspond-ing proposals (except for his own compensation amounts).

The decision on the structure and amount of compensation for the members of the Board of Directors is taken by the Board of Directors and laid down in a set of regulations. In any vote on the compensation to be paid to a particular member of the Board of Directors, however, the Board member concerned must observe the relevant general withdrawal/abstention procedures.

The NCC establishes and maintains a philosophy of payment for services and performance rendered that is in line with overall company strategy, and submits this to the Board of Directors for approval.

02_06_10_


sense includes salaries and all further benefits received, including (but not limited to) all shares and similar securities, pension fund payments, discretionary and other bonuses, insurances, company vehicles, leaving settlements and further termination agreement benefits.

The NCC ensures that all executive personnel are compensated fairly, appropriately, competitively, in line with their performance and in accordance with the strategic goals of the Kuoni Group. To do so, the NCC devises proposals which are submitted to the Board of Directors for decision, monitors the implementation of employee-related corporate guidelines and upholds the norms of good business management practice in the long-term interests of the company’s shareholders.

The Board of Directors took decisions on a number of major issues in 2011 following corresponding proposals from the NCC. These included:

• amoreextensivepresentationofvariablesalarycomponentsinthe2011 Compensation Report with due regard to the accrual principle, to ensure maximum transparency;

• theapplicationtointernalshareholders(subjecttothelong-termincentive plan) of the same dilution criteria and considerations arising from the acquisition of GTA and the associated capital increase that were applied to external shareholders.

When determining the compensation levels (including basic salary, incentives and fringe benefits) to be set and the service agreements to be concluded, the NCC pays particular regard to:

i) external comparisons with international corporations of similar size from all business and industry sectors;

ii) internal comparisons with the salaries and further benefits awarded to management personnel elsewhere throughout the Kuoni Group. Here the Kuoni Group uses Mercer’s International Position Evaluation





■■■■ compenSAtion FoR tHe GRoup eXecutiVe BoARd

The compensation guidelines of the Kuoni Group are an integral part of Kuoni’s personnel policy, and are intended to motivate and retain existing employees, to recruit talented new personnel and to help and encourage all employees to deliver a performance that is of a continu-ously high level. The Kuoni Group’s compensation system is based on the

“total compensation” principle and comprises:

• abasicsalary • short-termincentives(personalperformanceinrelationtoquality/ quantity goals, and financial results in relation to budget) • long-termincentives(value-addingperformanceandfurther corporate development in relation to the objectives set) and • fringebenefits.

The short-term and long-term incentives offered are closely linked to the company’s financial development and success. This establishes and maintains a commonality of interests between the company’s sharehold-ers and its employees.

The Kuoni Group maintains various forms of pension and other retire-ment benefit schemes for employees entitled thereto. These schemes cover a large majority of the Kuoni Group’s personnel. For further details, please refer to pages 191 to 193 in the Financial Report.

It is the duty of the Group Executive Board and of Human Resources Management to ensure that Kuoni attracts, retains and further develops the best executive talent in the tourism industry within the Kuoni Group.

02_06_10_04_

02_06_10_


■■■■ compenSAtion FoR tHe BoARd oF diRectoRS

The system applied for the compensation of the Board of Directors is based on the “total compensation” approach and comprises:

• abasicsalary • long-termincentives(shares)and • fringebenefits.

The members of the Board of Directors receive the fixed compensation proposed by the NCC (generally in December) and approved by the full Board whose amount per Board role is specified in the “Compensation Elements of the Board of Directors of Kuoni Travel Holding” regulations of 18 April 2007. These regulations were devised at Kuoni’s own discre-tion on the basis of the Ethos Survey entitled “Executive Remuneration in the 100 Largest Companies listed in Switzerland” of November 2006 and a report on compensation practices for chairmen of the board of directors produced by the CC&T company in 2002. The fixed compen-sation awarded to members of the Board of Directors has been confirmed (instead of adjusted) annually since 2007.

50% of the total compensation paid to members of the Board of Directors is paid in cash form; the remaining 50% is paid in shares. The issue price of the shares concerned is redefined each year and amounts to the average of all closing prices for the last ten trading days of the month before the Ordinary General Meeting of Shareholders. The shares are awarded on the trading day following the day of dividend distribution after the Ordinary General Meeting of Shareholders, and are subject to a blocking period of three years.

The members of the Board of Directors are entitled to travel concessions which are similar in scope to those granted to Kuoni Group employees.

02_06_10_03_





On the basis of the first few years of experience with the above, the Board of Directors resolved in August 2010, following a corresponding proposal from the NCC, that from 2011 onwards a) as a threshold provision, a long-term incentive can only be paid if no cumulative EBIT is incurred in the reference period concerned, and b) the performance factor should range, based on actual performance achieved, between a floor of 0.25 and a cap of 3. The basis of this financial performance assessment is the value-based management performance indicator known as the “Kuoni Economic Profit” or KEP.

For clarification purposes, we would like to illustrate here the challenge of achieving a “Factor 1” result under the above provisions.

The KEP target is based primarily on two considerations. First, the KEP target reflects a risk-adjusted expected return (8.5% WACC) that is based on market – and not book – value. Secondly, as a profit value, the KEP incorporates not only operating costs but also the costs of capital employed. As such, it represents a far more challenging target than the usual profit criteria.

The maximum factor of 3 will only be applied if investor expectations (8.5% WACC) have been clearly exceeded in return terms.

Kuoni’s long-term incentive (LTI) is designed to be self-financing, i.e. any additional costs incurred through the LTI are already included in the KEP result. Kuoni strives to enable its management to participate in the company’s value-adding achievements in accordance with the “pay for performance” principle. The LTI plan provides such participation in the event of both over- and underperformance. In accordance with this, a factor of zero will be applied if the EBIT result falls below a specified level. Based on the entitlement of international plan participants and the past history of Kuoni’s long-term incentive systems, the current long-term incentive plan has a maximum factor of 3, to ensure that significant overperformance over a longer period can continue to be rewarded appropriately.

02_06_10_


A Management Performance Plan (MPP) compensation system has been in place since 2008 for Group Executive Board members and senior management (Senior Vice Presidents and Vice Presidents) groupwide. Under the MPP, the members of the Group Executive Board will receive compensation for the 2011 business year which is divided into a fixed (roughly 40%) and a variable (roughly 60%) performance-based component. Around one-third of this variable component takes the form of a short-term incentive, while the remaining two-thirds take the form of a long-term incentive.

The short-term incentive is based in equal amounts on the achievement of annual financial targets (the 2011 Kuoni Group EBIT compared to budgeted projections, with a possible target achievement of between 0% and 200%) and personal targets (with a possible target achievement of between 0% and 120%), with payment in April 2012 in cash form. The personal targets here should always serve to help ensure the overall further development of the business unit concerned. The personal targets for Group Executive Board members are proposed by the CEO, discus sed on the NCC and approved by the Board of Directors. The personal targets for the CEO are proposed by the Chairman of the Board of Directors. These personal targets generally fall into four categories – strategy, trans - formation, people and stakeholders – with their relative weightings varying according to the function held.

The long-term incentive, which uses a “Performance Share Plan” to assign the persons entitled thereto a certain number of Kuoni shares at the beginning of each plan period (business year), is based by contrast on the value-adding performance achieved over a three-year period extending from 2011 to 2013. The number of shares assigned at the beginning of the reference period will be multiplied by a “performance factor” whose value will depend on the subsequent performance achieved in the period concerned.





02_06_10_


The calibration of the KEP target for the long-term incentive is essentially based on an investor’s perspective which considers not only Kuoni but also comparable companies with similar business portfolios. This process also pays due regard to the growth expectations, risk profiles, investment levels and profitability levels that are typical of the industry. All such considerations flow directly into the Kuoni KEP target-setting process.

The KEP target-setting process assumes that investors expect a risk- adjusted return on their investment which is based on market value (and not book value), and translates such expected returns over a three-year period into operational KEP targets. The KEP target for the Kuoni Group for the 2011– 2013 period was devised with the assistance of independent external consultants Hostettler Kramarsch & Partner, Zurich, based on shareholders’ expectations (external perspective, 8.5% WACC).

The shares concerned will be awarded in April 2014, based on actual performance in the corresponding reference period. Once awarded, the shares will not be subject to any further vesting period.

The LTI plan is intended to provide the company’s top management with a further incentive to contribute to the success and business health of the Kuoni Group, and thereby enhance the Group’s market value, to the benefit of its shareholders. The plan should also enable the company’s top management to participate in the Kuoni Group’s long-term success.

In the event of a change of control of the company, the present compen-sation system excludes on principle the conclusion of any generous “golden parachute” agreements. Apart from any possible legal obligations, the system also excludes any kind of severance payments in the event of termination of employment.

Contractual obligations dating from 2005 exist in respect of one member of the Group Executive Board. Under these obligations, should their employment be terminated by the employer, the Group Executive Board member concerned will receive six monthly salaries plus one monthly salary for every year of their age after age 47 until age 56. Apart from this, no member of the Group Executive Board or the Board of Directors is entitled to any benefits in the event of a change of control or to any leaving settlement, because no such agreements have been concluded since 2005.

No share options have been issued since 2005.

The Kuoni Group’s compensation programmes have been designed to ensure that they are comparable and competitive with those of a benchmark group of other world-class corporations of similar rank and renown which are also constantly on the lookout for management talent worldwide.

The total compensation (including basic salary, incentives and fringe benefits) paid to members of the Group Executive Board is determined with due regard to a market comparison conducted by Mercer Frankfurt management consultants. This comparison considers international corporations of comparable size from all industry sectors. Mercer Deutschland had one further mandate at Kuoni Travel Holding Ltd. in 2011: a “position evaluation and salary benchmarking for various vice presidents and senior vice presidents of the Kuoni Group”, which was commissioned as part of the corporate restructuring and the post-merger integration of GTA.





02_06_10_


■■■■ VAlue-BASed mAnAGement

The value-based management approach at the Kuoni Group is founded on the “economic profit” concept. This aims to keep top management aligned as closely as possible to creating long-term added value on behalf of the Group’s owners. The central management performance indicator here is known as Kuoni Economic Profit or KEP. KEP is calculated from net operating profit after tax (NOPAT) less the average cost of capital invested in operations. The Group-level weighted average cost of capital (WACC) has been set at a sustainable rate of 8.5%, which was calculated by IFBC AG, Zurich. IFBC AG, Zurich had one further mandate at Kuoni Travel Holding Ltd. in 2011: a “purchase price allocation for the acquisition of Gullivers Travel Associates”.

Specific WACC rates that accommodate economic and currency consid-erations have also been set for the Group’s individual divisions and markets. NOPAT divided by the average capital invested in operations gives return on invested capital (ROIC), which is compared with the WACC for the Kuoni Group and/or its constituent units to determine value-adding performance.

Kuoni has integrated this value-based management approach founded on the KEP performance indicator into its entire management process, to ensure that it has a sustainable value-adding effect. To this end, planning and budgeting, performance measurement, internal and external communications and the long-term incentive (LTI) compensation for senior management staff have all been consistently adapted to the sustainable value-adding philosophy.

02_06_10_05_ A KEP target which reflects investors’ expectations of a return on their invested capital that is appropriate to their investment risk is set as part of the annual strategic planning process. Based on Kuoni’s enter-prise value, a KEP target is set for the Group as a whole whose achieve-ment will provide the company’s shareholders with a return on their investment that is at least as high as Kuoni’s capital costs (8.5% WACC).

The KEP and ROIC for the Kuoni Group are calculated every quarter and compared with the corresponding budgeted and prior-year figures as an integral part of the reporting process. The development of KEP over time (known as “delta KEP”) and changes in the difference between ROIC and WACC reveal the value added by the Group as a whole and its divisions. Linking these results to the operational value drivers of turnover growth, cost efficiency and capital efficiency also reveals how such value was achieved.

The presentation of KEP and ROIC trends for the Kuoni Group is a key part of Kuoni’s external communications with financial analysts and investors. This clearly and bindingly illustrates the Kuoni Group’s focus on sustainable value creation to the outside world.

The provision of a long-term incentive plan based on the absolute achievement of KEP targets provides senior management with an attractive incentive that is firmly aligned to ensuring sustainable value creation within the Kuoni Group.





02_06_10_


■■■■ compenSAtion

■■■■ compenSAtion to memBeRS oF tHe BoARd oF diRectoRS

For their service in 2011, the members of the Board of Directors received the compensation shown in the table below.

The aggregate compensation paid to the members of the Board of Directors in 2011 amounted to CHF 1.6 million (2010: CHF 1.6 million).

No compensation was paid in 2011 to any members of the Board of Directors who had left in the prior period or earlier. Kuoni Travel Holding Ltd. and its Group companies had not granted any collateral, loans, advances or credits to members of the Board of Directors or to persons associated with them as at 31 December 2011. No options were allo - cated in the year under review.

02_06_10_06_

■■■■ compenSAtion to tHe GRoup eXecutiVe BoARd

The NCC’s general authorities for determining the compensation to be paid to the members of the Group Executive Board are specified on page 293. The aggregate compensation to the members of the Group Executive Board in 2011 amounted to CHF 7.8 million. The highest individual total compensation in 2011 amounted to CHF 2.1 million.

The presentation of the compensation paid to members of the Group Executive Board was modified in the course of 2011. Whilst in previous years the compensation stated was that actually paid in the business year concerned, from 2011 onwards the cash-form variable compensation awarded for the year is also included using the accrual method, while the share-based variable compensation is also included based on the shares

Basic cash compensation

(fixed)

Share-based compensation

(fixed) 1Social security

contributions Total

CHF 1 000 Number of shares CHF 1 000 CHF 1 000 CHF 1 000


Total 895 1 875 664 82 1 641


Total 894 1 906 664 83 1 641

1 The shares were valued at a market value of CHF 354 (2010: CHF 348). The market value calculated includes a 16% discount in view of the shares’ restricted availability at the time of their assignment.





The compensation shown includes basic salaries for 2011 and the variable compensation payable for the 2011 business year. Share-based compen-sation includes the registered shares B assigned for 2011, which will be modified and awarded based on actual performance in a subsequent three-year reference period. The registered shares B awarded in 2011 from the share-based compensation for 2008 are presented in footnote 3.

Compensation of CHF 0.1 million was paid in 2011 to one member of the Group Executive Board who had left in the prior period. Apart from this, no compensation was paid to any Group Executive Board member who had left in the prior period or earlier. Neither Kuoni Travel Holding Ltd. nor its Group companies had granted any collateral, loans, advances or credits to any member of the Group Executive Board or to any persons associated with them as at 31 December 2011. No options were allocated in the year under review.

02_06_10_


assigned for the achievement of the corresponding targets in the business year concerned. Figures for 2010 have been restated accordingly. The change resulted in adjustments to the variable compensation and social security contribution amounts.

2011 CHF 1 000



Basic cash compensation (fixed) 3 234 900Variable compensation: • incash 2 659 232• inshares 3 2 617 714Pension scheme contributions 4 662 110Social security contributions 638 114Other compensation amounts 39 6Termination benefits 0 0

Total 7 849 2 076

2010 CHF 1 000



Basic cash compensation (fixed) 3 742 900Variable compensation: • incash 6 1 261 424• inshares 7 2 047 507Pension scheme contributions 8 528 111Social security contributions 397 111Other compensation amounts 28 6Termination benefits 0 0

Total 8 003 2 059

1 Five members.

2 The members of the Group Executive Board were paid STI variable compensation in cash form of CHF 1.1 million in 2011 for the prior-year period. The cash-form variable compensation paid to CEO Peter Rothwell amounted to CHF 0.4 million.

3 The members of the Group Executive Board were assigned 8 975 registered shares B in the 2011 business year. These shares were valued at a market price of CHF 292. The market value calculated includes a 23% discount in view of the shares’ restricted availability at the time of their assignment and an 8% discount in view of the diluting effect of the capital increase. The share-based compen-sation for 2011 will be awarded at the end of the three-year reference period in spring 2014. A total of 3 758 registered shares B (worth CHF 1.7 million) were awarded to members of the present Group Executive Board in 2011 from the share-based compensation assigned in 2008. (Since CEO Peter Rothwell was not appointed to the Group Executive Board until 2009, he was not awarded any such shares in 2011.)

4 One member of the Group Executive Board is entitled to take early retirement in accordance with the regulations of the “Patronale Fürsorgestiftung”. The non-contribution-based costs of the corres-ponding benefits are included in the pension fund contributions shown. The corresponding regulations have not been extended to any new Group Executive Board member since 2005.

5 Six members. Peter Meier joined the Group Executive Board on 1 November 2010, so the amounts shown include the compensation paid to him for a two-month period. The compensation paid to Max E. Katz is included up until his retirement (on 31 December 2010).

6 The members of the Group Executive Board were paid STI variable compensation in cash form of CHF 1.2 million in 2010 for the previous year. The cash-form variable compensation paid to CEO Peter Rothwell amounted to CHF 0.5 million.

7 The members of the Group Executive Board were assigned 8 964 registered shares B in the 2010 business year. These shares were valued at a market price of CHF 228. The market value calculated includes a 16% discount in view of the shares’ restricted availability at the time of their assignment. The share-based compensation for 2010 will be awarded at the end of the three-year reference period in spring 2013. No shares were awarded in 2010. In accordance with the regulations valid at the time, share-based compensation was awarded in the following business year. The present com pensation system was first adopted for the 2008 business year.

8 Two members of the Group Executive Board were entitled to take early retirement in accordance with the regulations of the “Patronale Fürsorgestiftung”. The non-contribution-based costs of the corres-ponding benefits are included in the pension fund contributions shown. The corresponding regulations have not been extended to any new Group Executive Board member since 2005.





02_06_10_


■■■■ SHARe oWneRSHip

■■■■ BoARd oF diRectoRS And GRoup eXecutiVe BoARd

02_06_10_07_

Registered share B as at 31 December Other equity instruments

Number of shares Voting rights Number of shares Voting rights

2011 Board of Directors Henning Boysen, Chairman 4 283 0.09% 0 Wolfgang Beeser 1 052 0.02% 0 Heinz Karrer 1 167 0.02% 0 John Lindquist 1 146 0.02% 0 David Schnell 2 647 0.05% 0 Annette Schömmel 1 326 0.03% 0 Raymond D. Webster 1 346 0.03% 0

Group Executive Board Leif Vase Larsen 808 0.02% 0 Stefan Leser 3 329 0.07% 0 Rolf Schafroth 1 768 0.04% 0 Peter Meier 1 0.00% 0

Total 18 873 0.38% 0 0%

2010 Board of Directors Henning Boysen, Chairman 3 190 0.08% 0 Wolfgang Beeser 838 0.02% 0 Heinz Karrer 930 0.02% 0 John Lindquist 698 0.02% 0 David Schnell 2 350 0.06% 0 Annette Schömmel 1 148 0.03% 0 Raymond D. Webster 848 0.02% 0

Group Executive Board Max E. Katz 1 3 243 0.09% 0 Leif Vase Larsen 505 0.01% 0 Stefan Leser 1 150 0.03% 0 Rolf Schafroth 460 0.01% 0 Peter Meier 2 1 0.00% 0

Total 15 361 0.40% 0 0%

■■■■ BoARd oF diRectoRS (non-eXectuVe memBeRS only)

■■■■ GRoup eXectuVe BoARd (cuRRent)


no blocking period 6 279 3 727blocking period 2011 0 1 462blocking period 2012 2 907 2 907blocking period 2013 1 906 1 906blocking period 2014 1 875 0


no blocking period 5 757 4 062blocking period 2011 0 1 148blocking period 2012 149 149blocking period 2013 0 0blocking period 2014 0 0

1 Member of the Group Executive Board who left the company during 2010.

2 Member of the Group Executive Board newly appointed during 2010.

310 | 311 K u o n i A n n u A l R e p o R t # 2 0 1 1fig. 10: Lower part of Talimu River in China forming the border of the Taklimakan dune field.

getting in touchwith the earth again.




02_07_

aPPenDix

■■■■ pHotoGRApHy noteS

In this chapter, the pictures are again taken from the archive of George Stein-metz. The multi-award winning pho-tographer studied geophysics at Stan-ford University. He began his career by hitchhiking across Africa for over two years. Since then, he has travelled to unexplored terrain on all seven continents for his photo reportages. In more recent years, he has specialised in aerial photography with the aid of lightweight aircraft. Using motorised paragliders, he gains access to terri-tories that remain closed to all other means of transport.

In the second chapter of the Kuoni An-nual Report 2011, the bird’s eye pano-ramas are primarily dedicated to un-inhabited natural landscapes. They are classic places of longing situated amidst untouched nature, which have embodied the aesthetic feeling of the sublime since the landscape painting of Romanticism.

agenDa 2012

■■■■ The Financial Report and the information on Corporate Governance constitute an integral part of the Kuoni Group Annual Report.

■■■■ This Annual Report is also available in German. The German original shall prevail.

■■■■ Der Geschäftsbericht ist auch in deutscher Sprache erhältlich. Massgebend ist der deutsche Originaltext.

■■■■ AGendA 2012

■■■■ The Kuoni Group will be providing information on its further business performance on the following dates: Annual General Meeting 17 April 2012 Half-year-results 23 August 2012 Nine-month Business Update 08 November 2012

■■■■ inVeStoR RelAtionS

Laurence Bienz Kuoni Travel Holding Ltd. Neue Hard 7, CH-8010 Zurich tel + 41 (0)44 277 45 29 fax + 41 (0)44 277 40 31 [email protected]

02_07_01_


0 6 – a p p e n d i x

06_03_

Colophon

■■■■ Kuoni Travel Holding Ltd. Corporate Communications Neue Hard 7, CH-8010 Zurich tel +41(0) 44 277 43 63 fax +41(0) 44 272 39 91 www.kuoni.com Twitter: www.twitter.com/kuonigroup Facebook: www.facebook.com/KuoniGroup

■■■■ Wolfgang Scheppe

■■■■ Wolfgang Scheppe, Remo Masala

■■■■ 01: Peter Brun, Heidi Elsenhuber, Stephanie Keller, Matthias Leisinger, Simon Marquard, Wolfgang Scheppe 02: Laurence Bienz, Alexander Brochier, René Häsler, Michael Müller 03: Alexander Brochier, Elisenda Casellas, Oliver Fischer, Wolfgang Scheppe, Silvana Ulber 04: Wolfgang Scheppe 05: Wolfgang Scheppe

■■■■ Sara Codutti

■■■■ Andrea Buran, Claudine Iselin, Marie Letz

■■■■ Paul Day, Fiona Elliott, Ishbel Flett, Barbara Hauß, James Knight, Catherine Schelbert, Julia Thorson

■■■■ Simon Marquard

■■■■ Helga Sterr

■■■■ George Steinmetz, Anonymous (Collection W.S.)

■■■■ Andrea Buran, Claudine Iselin, Marie Letz

■■■■ Mario Klingemann

Publisher:

Idea, Development, Creative Direction:

Concept:

Authors:

Illustrations:

Graphic Design:

Translations:

Project Manager:

Production:

Photography:

Typesetting:

Programming:

Documents

FINANCIAL REPORT - Kuoni Travelcr.kuoni.com/docs/02_financialreport_complete_e_0.pdf · 132 | 133 Kuoni AnnuAl RepoRt # 2011 Kuoni GRoup 02 – FinAnciAl RepoRt 02_00_01_ 1 Kuoni