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Kuoni GroupAnnual Report 2015

kuoni.com

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http://www.kuoni.com

http://2015.kuoni-report.com

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03Kuoni Group Annual Report 2015

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At a Glance 04 Group CEO Movie 05 Milestones 2015 06 Share Development 09 Key Figures 10Letter to Shareholders 11Kuoni Group Today 17 Our Business 18 Management – Board of Directors 19 – Executive Board 26Group Report 31Divisional Reports 48 Global Travel Distribution (GTD) 49 Global Travel Services (GTS) 53 VFS Global 58Corporate Governance 63 Introduction 64 Group Structure 65 Capital Structure 66 Board of Directors 70 The Group Executive Board 77 Compensation, Shares and Loans 78 Shareholders’ Participation Rights 79 Changes of Control and Defence Measures 82 Auditors 83 Information Policy 84 Compensation Report 86 Report of the Statutory Auditor 99

Human Resources 100Corporate Responsibility 103Financial Report Kuoni Group 110 – Five-Year Summary of Key Data 111 – Statement of financial position 114 – Group Income statement 115 – Statement of comprehensive income 116 – Statement of changes in equity 117 – Statement of cash flows 118 – Main accounting principles 119 – Notes to the Consolidated Financial

Statements 131 – Principal subsidiaries, associates

and joint ventures 177 – Report of the statutory auditor 181Financial Report Kuoni Travel Holding LTD 183 – Statement of financial position 184 – Income statement 186 – Notes 187 – Board of Directors’ Proposal for the

Appropriation of Retained Earnings 209 – Report of the statutory auditor 210Agenda 212Terms of Use/Data Protection Policy 213Imprint 216

Content


At a Glance


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Group CEO Movie

Milestones 2015

Zubin Karkaria, CEO Kuoni Group on 2015 and looking ahead

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At a Glance

Kuoni Group Annual Report 2015

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https://youtu.be/Jy8GccABOzg


Milestones 2015 14 January 2015Following a strategic review, Kuoniʼs Board of Directors and Group Executive Boardhave decided to focus the companyʼs activities on its core business as a serviceprovider to the global travel industry and to governments. In its new set-up, Kuoni Groupwill be structured into three divisions, Global Travel Distribution (GTD), Global TravelServices (GTS) and VFS Global.

“Kuoni Groupʼs new strategic direction will transform the companyinto a unique, clearly positioned player in the global travelindustry.”

Heinz Karrer, Chairman of the Board of Directors of Kuoni Group

Kuoni Groupʼs Board of Directors appointed Ivan Walter as new member of theExecutive Board. He will lead the Global Travel Distribution (GTD) Division. Ivan Walterhas been with the Kuoni Group since 2001.

22 June 2015Kuoni Group has signed an agreement with DER Touristik for it to acquire all the touroperators, specialists, travel agencies and online sales in the Switzerland, UK,Scandinavia/Finland and Benelux markets, as well as the airline Novair and the Playitasfamily and sports resort on Fuerteventura.

This exit from the tour operating business includes Kuoni Switzerland, UK, Benelux, Hong

Kong/China and India as well as operations in Scandinavia/Finland. This affects

approximately 3,800 people in total.

Ivan Walter

REWE Group is acquiring all of the approximately 2,350 (FTE) employees at the existing

locations and will continue to run the business activities, including all the travel agencies,

as part of its DER Touristik travel division.

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7 August 2015Kuoni Group has signed an agreement with Fairfax Financial Holdings Ltd through itstravel provider Thomas Cook India to sell Kuoniʼs Indian travel activities and the touroperator Kuoni Hong Kong. The Indian travel activities encompass outbound touroperating, business travel, travel agencies, and inbound business (DestinationManagement India).

11 September 2015The sale of European tour operating activities to REWE Group was completed on 11September 2015 after the responsible European competition authorities gave theirunconditional approval to the transaction earlier. REWE Group, and its tourism divisionDER Touristik, is taking over Kuoni Groupʼs tour operating activities in Switzerland, UK,Scandinavia/Finland and Benelux as well as the airline Novair and the Playitas familyand sports resort on Fuerteventura. It is taking on the employees and locations, andcontinuing the business activities.

5 November 2015

The Board of Directors has appointed Zubin Karkaria as the new CEO of the KuoniGroup with immediate effect. He replaces the outgoing CEO Peter Meier andconcurrently continues to run the VFS Global Division.

The Board of Directors has appointed Dr Prisca Havranek-Kosicek as the KuoniGroupʼs new CFO, succeeding previous CFO Thomas Peyer. Prisca Havranek-Kosicek,an Austrian citizen, has many yearsʼ experience of senior operational and consultancyroles in finance, controlling, strategy development and restructurings.

Kuoni Group has entered a partnership with HNA Group of China. HNA Group is one ofthe leading private companies of Chinese origin, and is globally active in a number ofbusinesses including tourism and aviation. The goal of the partnership is to jointlydevelop the outbound travel business in China and to partner in related strategicmatters.

Zubin Karkaria (left)Prisca Havranek-Kosicek (right)

Zubin Karkaria founded VFS Global in 2001 and built up the company very successfully to

become the global leader in visa services for governments. VFS Global Division is the

fastest growing, most innovative and most profitable division in the Kuoni Group.

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“Kuoni Group has been transformed from a broadly based travelcompany pursuing a wide range of very different activities into afocussed global service provider for the professional travelindustry and governments.”Heinz Karrer, Chairman of the Board of Directors of Kuoni Group

9 November 2015The sale of tour operating activities in Hong Kong to Fairfax/Thomas Cook India wascompleted on 9 November 2015 after the responsible authorities gave theirunconditional approval to the transaction earlier. Canadian group Fairfax, with its travelservices provider Thomas Cook India, is taking over Kuoni Groupʼs traditional touroperating activities in Hong Kong. It is taking on the employees and locations, andcontinues the business activities.

15 December 2015On 15 December 2015 Kuoni Group sold its “Neue Hard” property in Zurich to ZürcherKantonalbank. The sale price is CHF 75 million, which matches the estimated marketvalue.

16 December 2015The sale of travel activities in India to Fairfax/Thomas Cook India was completed on 16December 2015 after the responsible authorities gave their unconditional approval tothe transaction. Canadian group Fairfax, with its travel services provider Thomas CookIndia, is taking over Kuoni Groupʼs traditional tour operating activities and inboundbusiness (Destination Management India) in India. It is taking on the employees andlocations and continues the business activities.

Share development

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At a Glance


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Share development

CHF 2015 2014

Cash flow (net cash from operating activities) per registered share A 5.78 3.31

per registered share B 28.89 16.57

Net result per registered share A –15.10 3.44

per registered share B –75.51 17.20

Equity per registered share A 27.07 40.10


Withholding tax-free distribution against reserves from capital contributions per registered share A 0.00 1.50


Stock market prices per registered share B high 351 425

low 173 218

at year-end 280 301

Annual trading volume in CHF million 1,241 1,289

Stock market capitalisation as at 31 December in CHF million 1,118 1,205

1 Proposal of the Board of Directors to the next General Meeting of Shareholders. Subject to definitive approval by the General Meeting of Shareholders. Distribution to shareholdersof a withholding tax-free appropriation from the capital contribution reserve.

Key figures

Kuoni Group Share 2015

Kuoni Group SWISS PERFORMANCE INDEX

01.01.2015 16.03.2015 27.05.2015 07.08.2015 20.10.2015 31.12.201540

60

80

100

120

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Key figures

CHF million 2015 2014

Turnover 3,348.7 3,372.0

Global Travel Distribution 1,979.3 1,933.6

Global Travel Services 1,054.8 1,169.6

VFS Global 316.5 270.8

Less turnover elimination between segments –1.9 –2.0

Earnings before interest and taxes (EBIT) 81.2 76.4

Global Travel Distribution 48.0 42.0

Global Travel Services –48.8 –6.9

VFS Global 53.9 52.5

Corporate 28.1 –11.2

Net result from continuing operations 57.9 58.2

Net result from discontinued operations, net of income taxes –352.1 9.2

Net result –294.2 67.4

Cash flow from operating activities 112.9 64.0

Free cash flow 120.3 55.1

Investments in tangible and intangible assets 38.2 66.0

Total assets 1,629.4 2,419.2

Equity 530.3 779.2

Equity ratio 32.5% 32.2%

Kuoni Economic Profit (KEP) 16.2 –8.5

Return on invested capital (ROIC) 10.0% 6.6%

Average number of employees (full-time equivalent) 7,968 7,455

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Letter to Shareholders


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Letter to shareholders Zurich, 15 March 2016

Dear ShareholdersIn January 2015 we informed you about Kuoni Groupʼs new strategic direction as aservice provider for the global travel industry and governments. The decision takenthen to refocus Kuoni was made against a background of persistent rapid and profoundchange in customer habits, in technology and in the globalisation of demand. The Boardof Directors and Group Executive Board came to the conclusion that in an environmentcharacterised by economies of scale, digital applications and highly differentiatedproduct offerings we were no longer the best owner for all the businesses wetraditionally ran. This is why we sold the tour operating business last year to newowners who were in a position to develop its potential better than we could. The ReweGroup, the new owner of the European tour operating business, and Fairfax/ThomasCook India, new owner of the units in India and Hong Kong, have the necessary size,resources and shares of the relevant markets, putting them in a better position to runthe business successfully in the long term.

As one of the leading global travel service providers with a strong focus on technology and

innovation, Kuoni Group is publishing its complete 2015 Annual Report online exclusively –

for the very first time.

Heinz Karrer (right)Zubin Karkaria (left)

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Back then, like today, our decision was guided by the desire to identify the right strategyand means to secure Kuoniʼs long-term success and fulfil the legitimate aspirations ofall of our stakeholders. The Board of Directors remains confident that the new focusinitiated over a year ago is correct, and that the strategy underpinning it is the right one.In its current configuration Kuoni has three core businesses with great potential; it alsohas unique expertise and skill in all three areas, and an experienced and dynamicmanagement team.

Timing plays an important role in making the most of this potential. The pace of changewe are seeing in our business, driven by the markets, technology and the main marketplayers, means that substantial investments are required to maintain and expand astrong market position. As well as posting market-beating, sustainable organic growth,a company has to be able to grow through acquisitions.

Review and evaluation of all strategic optionsTowards the end of 2015 the Board of Directors – with the support of the relevantexperts – conducted a comprehensive review and evaluation of all strategic options.This included a rigorous evaluation of the offers received from various candidates totake over Kuoni Groupʼs business activities. In the end, the Board decided unanimouslyin favour of the offer made by the globally active private equity company EQT. Thesupport shown for EQT as the new owner by the management team led by CEO ZubinKarkaria was a decisive factor.

The fundamental decision taken by the Board of Directors in the light of the aboveconsiderations to transfer responsibility for the Kuoni Group to the best-qualified andmost suitable new owner is entirely consistent. It is guided by the potential of the KuoniGroup and by the Boardʼs responsibility to create value for shareholders, promote thecompanyʼs interests and take account of the interests of all stakeholders.

The Board of Directors also welcomes the decision by the Kuoni and HugentoblerFoundation to enter into an agreement with EQT. This agreement sets out details of thejoint management of Kuoni Group by EQT and the Foundation, as well as defining thekey pillars of Kuoni Groupʼs future development and describing the Foundationʼs futureinvolvement in Kuoni.

The planned takeover of Kuoni Group by EQT as the new owner brings some attractivelong-term benefits to the company, its business partners and its employees. Thetransaction allows Kuoni Group to continue developing its position as a leading, focusedand global service provider for the worldwide travel industry and for governments. Thiswill be done through investments in technology, in a wider portfolio of services and inacquisitions of other companies, thus taking full account of the Boardʼs criteria asoutlined above. EQT intends to make respective investments to develop and strengthenKuoniʼs market position and increase its profitability.

The 2015 Annual Report has been designed to make the information accessible on

computers, tablets and smartphones. You can go to the Download Centre to select,

download and print the chapters you want.

We hope you find Kuoniʼs 2015 Annual Report informative and convenient to access.

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In doing so it will be able to build on the current implementation of the strategy tostrengthen and expand Kuoni Groupʼs three divisions. The relevant operationalmeasures, announced in November 2015, are progressing on schedule and deliveringthe expected results.

Kuoni concluded a binding transaction agreement with EQT on 1 February 2016. EQThas made a public tender offer of CHF 370 in cash per registered B share. If and whenthe public tender offer is completed successfully, shares in Kuoni Travel Holding Ltd willbe delisted. The company will then have the opportunity to implement its strategyoutside the spotlight of the capital markets, which in this phase of the companyʼsdevelopment would undoubtedly be an advantage.

Board of Directors and Group Executive Board recommend to accept EQTʼs publicofferAs you will see from the public tender offer, completion of the offer is conditional onachieving a tender rate of at least 67% of the votes and of more than 50% of the sharecapital of Kuoni Group, as well as on the removal of the share transfer and voting rightrestrictions from the Articles of Incorporation. The removal of these restrictionsrequires the approval of an extraordinary General Meeting. Completion of the publictender offer is also subject to the approval of the competition authorities and fulfilmentof other standard conditions.

Due to these developments, the Annual General Meeting of Shareholders scheduled for26 April 2016 is deferred to a later date. The delisting of Kuoni shares should take placein the second or third quarter of 2016.

The Board of Directors and Group Executive Board recommend that you, our valuedshareholders, accept EQTʼs public offer.

2015 financial yearKuoni Group generated turnover from continued activities of CHF 3,348.7 million in2015, compared with CHF 3,372.0 million in 2014. There was significant organicgrowth of 6.9%, but the strong Swiss franc had a negative effect of 7.6% on theconversion into our presentation currency, resulting in a nominal net decline in turnoverof 0.7%.

The high-growth divisions Global Travel Distribution (GTD) and VFS Global once againmade strong contributions to overall turnover, posting organic growth of 9.8% and23.3% respectively. Operating earnings before amortisation (EBITA) amounted to CHF124.0 million (2014: CHF 105.7 million), while operating earnings (EBIT) came in at CHF81.2 million (2014: CHF 76.4 million). EBIT was therefore higher than in 2014, though itwas heavily influenced by one-off effects such as the sale of the “Neue Hard” propertyin Zurich (+CHF 52.6 million), the value adjustment on other intangible assets (CHF –16.5 million), as well as the costs of restructuring the Global Travel Services (GTS)Division and the support and group functions (CHF –25.2 million). Excluding theseitems, the adjusted EBITA came to CHF 96.6 million and the adjusted EBIT wasCHF 70.3 million. It should be noted that the previous yearʼs result included CHF 10.1million from the sale of the Geroldstrasse property.

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The sale of the tour operating business led to a loss of CHF –132.4 million before thereclassification of CHF –219.7 million of currency translation losses (CTA) accumulatedover the years. This accounting effect had no impact on the equity or cash position. Thenet result after tax from discontinued operations came to CHF –352.1 million (2014:CHF 9.2 million). The net result thus came to CHF –294.2 million overall, comparedwith CHF 67.4 million in 2014.

The GTD Division GTD (global distribution partner for accommodation and travelservices in the business-to-business sector) posted a new record of 14.5 million roomnights booked. Strongest growth came from markets in Asia and the Middle East. EBITalso went up.

The GTS Division (group travel business, event management and DestinationManagement Specialists) reported positive organic growth, especially with customersfrom China and Taiwan. However, a fall in demand in the important Japanese markethad a substantial negative effect on the result. The restructuring of the group travelbusiness commenced during the year under review. At the Destination ManagementSpecialists, geopolitical events and lower demand from Russia had an impact onturnover. Cost savings and a focus on destination services with higher margins andmore profitable orders led to an improvement in operating earnings.

In 2015 the VFS Global Division (provider of outsourced visa services for governments)processed 20.1 million visa applications, which is a new record. This growth wasachieved primarily in the source markets of Asia/Pacific, India, the Middle East andAfrica. At the end of 2015 VFS Global was running 1,916 application centres for 48governments in 123 countries around the world. Operating earnings (EBIT) were upslightly on the prior year.

In November 2015 Zubin Karkaria was appointed as CEO of Kuoni Group, succeedingthe outgoing CEO Peter Meier, and now heads the Kuoni Group as well as the VFSGlobal Division. Zubin Karkaria founded VFS Global in 2001, and has been a Member ofthe Group Executive Board since March 2013. In November 2015 Dr. Prisca Havranek-Kosicek was appointed as the new Group CFO, succeeding previous CFO, ThomasPeyer, effective March 2016.

As stated in the public tender offer by private equity company EQT on 29 February2016, any dividend distribution would be deducted from the offer price. The Board ofDirectors is therefore recommending to the forthcoming Annual General Meeting thatno dividend in the form of a withholding tax-free distribution against reserves fromcapital contributions be paid.

The Board of Directors and the Group Executive Board would like to thank all ouremployees for their great commitment and professionalism during 2015. Many of themworked extremely hard and with great commitment on the major change process, andthey certainly deserve our praise.

2016 will be a springboard for growth and profitabilityDear shareholders, Kuoni has been through some stormy times. The internet hastriggered profound changes in consumer behaviour and in the provision of travelservices, and our industry has been affected more dramatically than just about anyother.

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Today we can say with confidence that Kuoniʼs Board has fulfilled its primary task inevery way – namely to ensure the long-term success of the company even in afundamentally altered environment.

We realised that under todayʼs completely different market conditions, a highly diversegroup of shareholders are not the best owners for either the consumer or the B2Bbusiness. And without regard for either praise or censure we have simply taken thedecisions that best serve the company, its shareholders and its other stakeholders. Wefirmly believe that these decisions will be proven right.

The Board of Directors and Group Executive Board would like to thank you, ourshareholders, for the trust you have shown in us over the years. We appreciate it verymuch.

The Kuoni brand and the companies that stand behind it will continue to have a verystrong presence in the traditional tour operating business with end customers inEurope. So does our group travel business under the Kuoni brand, especially inAsia. The year 2016 will also be a springboard for further growth and profitability for allour other activities. Our aim is to build further on our strong global market positionswith innovation, quality, and reliability.

Heinz Karrer

Chairman of the Board of Directors

Zubin Karkaria

Chief Executive Officer (CEO)

Our Business

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Kuoni Group Today


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Our Business

Kuoni Group (Zurich Stock Exchange SIX: KUNN) is a leading service provider to theglobal travel industry and governments with leading positions in its areas of activity andsustainable growth prospects, with a strong focus on Asia. Kuoni Group generatedturnover of CHF 3.35 billion in the 2015 financial year and employed about 8,000 people(FTE) at the end of 2015.

Kuoni Group focuses on three core activities:Global Travel Distribution (GTD) is an industry pioneer and a highly experienced, leadingglobal distributor that provides travel companies with easy access to hotelaccommodation and destination services. It sells approximately 40,000 room nights perday online. And approximately 40% of its turnover is sourced from fast-growingmarkets in Asia, the Middle East and Africa.

Global Travel Services (GTS) sources and coordinates destination services – fromaccommodation, transportation, tours and activities to venues and event management.GTS is the number one player in the growing group travel market and handles 50,000leisure tours per year. GTS generates 60% of its turnover from Asia/Pacific sourcemarkets.

VFS Global, the industry pioneer and worldʼs leading visa services provider, works for48 governments, operates 1,916 application centres in 123 countries and holds anestimated 48% of the global outsourced applications market. It generates almost 70%of its turnover from applicants from the Asia/Pacific region.

Divisional Report GTD

Divisional Report GTS

Board of Directors

Divisional Report

VFS Global

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Board of Directors Heinz Karrer, Chairman of Kuoni Group

Heinz Karrer, who is Swiss, has been President of Economiesuisse, the Swiss businessassociation, since 2013. Before that he was CEO of Axpo Holding AG from 2002. Afterstudying economics at St. Gallen University (HSG), he began his career in 1985 whenhe was appointed General Manager of the Association of Swiss Manufacturers,Suppliers and Agents for Sports Goods. He went on to serve as Managing Director ofIntersport Schweiz AG from 1987 to 1992 and as CEO of Intersport Holding AG from1992 to 1995. He then moved to the Ringier publishing house where he remained until1997, becoming CEO of Ringier Switzerland and a member of Ringier Ltd.ʼs GroupExecutive Management. From 1998 to 2002 he was a member of Swisscomʼs GroupExecutive Management and head of the groupʼs Marketing & Sales Division. He hasserved on Kuoniʼs Board of Directors since 2007. In April 2014 Heinz Karrer has beenelected at the Annual General Meeting to be Chairman.

Positions outside Kuoni Group in listed companies: Member of the Bank Council of theSwiss National Bank

Positions outside Kuoni Group in non-listed companies: Member of the Board ofDirectors of NotensteinLaRoche Privatbank AG, Member of the Board of Directors ofInfrontRingier Sports & Entertainment Switzerland AG, Member of the Board ofFoundation at Hasler Stiftung

Heinz Karrer

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Adrianus (Adriaan) Nühn

The Dutchman Adriaan Nühn sits on the Boards of several international consumergoods companies. Among his other roles, since 2009 he has been Chairman of theBoard of Directors of Dutch food service and food retailer Sligro Food Group. His mostrecent operational role was as CEO of consumer goods company Sara LeeInternational from 2003 to 2008. Adriaan Nühn lives in Amsterdam/Netherlands. Heholds a Bachelor of Business Adminis-tration from Hogere Economische School,Eindhoven/Netherlands, and an MBA from the University of Puget Sound, Tacoma,Washington/USA. Adriaan Nühn was elected to the Kuoni Group Board in 2012 andsince April 2014 is Vice-Chairman of the Board.

Positions outside Kuoni Group in listed companies: Member of the Board of Directors ofSligro NV, Member of the Board of Directors of Cloetta AB, Member of the Board ofDirectors of AVI Ltd

Positions outside Kuoni Group in non-listed companies: Member of the Board ofDirectors of Plukon NV

Adrianus (Adriaan) Nühn

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Jae Hyun (Jay) Lee

Jay Lee, a South Korean citizen, has worked for eBay, the worldʼs biggest onlinemarketplace, since 2002. He is currently in charge of eBayʼs Asia/Pacific RegionPortfolio as Managing Director and Corporate Senior Vice President. Previously, JayLee was the CEO of eBayʼs Korean Internet Auction Company from 2002 to 2004. From2000 to 2002 he was COO and then CEO of NASDAQ-listed multimedia company KoreaThrunet. He began his career in 1992 with Boston Consulting Group (BCG), where hewas elected a partner since 1997. Jay Lee lives in Singapore and Seoul, South Korea.He holds an MBA from Harvard University Graduate School, Boston/USA, and aBachelor of Arts Degree in International Relations from Brown University,Providence/USA. Jay Lee was elected to the Board in 2012.

Positions outside Kuoni Group in listed companies: Member of the Board of Directors ofSsangYong C&B

Jae Hyun (Jay) Lee

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John Lindquist

John Lindquist, a US and UK citizen, is resident in London. He gained a degree ineconomics from Princeton University and MBA from Harvard University and thenjoined The Boston Consulting Group (BCG) as a consultant. He was subsequentlyelected a Partner and later a Senior Partner and Managing Director, where he servedon the global leadership team of the travel and tourism practice. He is currently aSenior Adviser with BCG, advising on strategy for clients in airlines, hotels andgovernment tourism bodies on a global basis. He joined Kuoniʼs Board of Directors in2007. He is a Board Director of VisitBritain, the UK government tourism promotionagency.

Positions outside Kuoni Group in non-listed companies: Senior Advisor at The BostonConsulting Group (BCG)

Management and consultancy functions for important Swiss and foreign interestgroups: Member of the Board of Directors of VisitBritain

John Lindquist

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David J. Schnell

Kuoniʼs Board of Directors has benefited from the great expertise and experience ofSwiss business administration graduate David Schnell since 2002. Between 1985 and1997 he worked at ELCO Looser Holding AG, initially as Chief Financial Officer (CFO)and Member of the Executive Board, and later as Chief Operating Officer (COO) andMember of the Board of Directors. In 1997 David Schnell moved to become CFO andMember of the Executive Board of telecommunications company Swisscom AG inBern, where he stayed until 2002. Since 2002 David Schnell has been an independentbusiness consultant and a Member of the Board of Directors of various companies.

Positions outside Kuoni Group in listed companies: Vice Chairman of the Board ofDirectors of ELMA Electronic AG

Positions outside Kuoni Group in non-listed companies: Member of the Board ofTrustees of the Kuoni and Hugentobler Foundation, Chairman of the Board of Directorsof IFBC AG, Member of the Board of Directors of Alp-Transit Gotthard AG

David J. Schnell

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Annette Schömmel

Annette Schömmel – Swiss citizen – is a successful entrepreneur. She studiedEconomics at Ruprecht Karls University in Heidelberg, Film at University of SouthernCalifornia and received a Masters Degree in Marketing and Communication fromUniversity of the Arts, Berlin. She is a Stanford Business School Graduate. Afterworking in various management positions in the creative industry, she founded arthesiaAG – an applied think-tank based in Zug, Los Angeles and Hong Kong – in 1994. AnnetteSchömmel has built a track record advising the leadership of global companies andbrands on strategy, transformation and change programmes as well as long-termpositioning and repositioning in various industries. She has built the arthesia citiesbusiness advising cities around the world on strategies. In 2013 arthesia sold the cities& regions practise to Publicis Groupe. She joined the Board of Kuoni Group in 2004.

Positions outside Kuoni Group in non-listed companies: Vice Chairman of the Board ofDirectors of arthesia AG, Chairman of the Board of Directors of Babaluba AG, Memberof the Board of Directors of VitaGenes Ltd, Member of the Board of Directors ofVitargent Ltd, Member of the Board of Directors of BrandMaker Development Ltd, Member of the Board of Directors of FAT Ltd

Unpaid Positions outside Kuoni Group in non-profit organisations: Board Member ofAsia Society Switzerland

Annette Schömmel

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Selina Neri

Selina Neri an Italian citizen, has worked in the Information and CommunicationTechnology industry for over 24 years and, most recently, in the Luxury Industry. In hermost recent corporate role she served as CEO of Dadu Luxe, an innovative technology-based luxury fashion retailer based in Saudi Arabia and in the UAE. In 2009, she wasappointed Vice President Consulting and Solutions by Colt Technology Group (FidelityInvestments). Between 2004 and 2009 she served as Executive Vice President GlobalSales Support as well as Vice President Partner Sales Management for the DeutscheTelekom Group. In 2012, Selina Neri founded Hadaara, a Dubai-based managementconsultancy focused on innovation, digitalisation and business transformation throughtechnology adoption. Selina Neri has also built a strong track record in highereducation. She is Professor of Luxury Marketing, International Marketing andInnovation at HULT International Business School (Shanghai campus) and also servesas Adjunct Professor of International Marketing at HEC Business School (France).Selina Neri lives in Dubai and was elected to the Kuoni Group Board in 2015.

Positions outside Kuoni Group in non-listed companies: Partner in Hadaara FZC,Management Consultancy, registered in the UAE

Unpaid Positions outside Kuoni Group in non-profit organisations: Global Mentor forWomen in Business for the Cherie Blair Foundation, London, UK

Official functions: : Senior Industry Advisor for the European Bank for Reconstructionand Development, Professor of Luxury Marketing, International Marketing andInnovation at HULT International Business School, Shanghai, China, Adjunct Professorin International Marketing at HEC Business School, Paris, France

Executive Board

Selina Neri

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Executive Board Organisation as of 15 March 2016

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Zubin Karkaria, Chief Executive Office Kuoni Group and VFS Global

After graduating in commerce from Mumbai University and completing his BusinessManagement studies from Mumbai, Zubin Karkaria joined Orbit Trade Fair Tours in1989. He then moved to SOTC in 1991 and was with SOTC when it was acquired byKuoni Group in 1996. He was appointed as the COO of the Kuoni India Tour OperatingDivision in 1999, and moved on to become the Deputy CEO and Head BusinessDevelopment in 2003. He conceptualised and launched VFS Global in 2001. In 2005 hewas appointed as the CEO and Managing Director of Kuoni India and South Asia,responsible for all units of Kuoni India – Tour Operating, Destination Management,Business Travel, and Kuoni Academy, while concurrently developing the VFS Globalbusiness into a global leader in its field (as CEO of VFS Global from 2010 onwards). InMarch 2013, in line with the development of VFS Global as an important Division ofKuoni Group, Zubin Karkaria was appointed on the Executive Board of Kuoni Group. On5 November 2015 Zubin Karkaria was appointed Chief Executive Officer (CEO) of KuoniGroup. Furthermore, Zubin Karkaria is a Global Member of the WTTC (World Travel &Tourism Council).

Zubin Karkaria

Indian, born 1968

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Prisca Havranek-Kosicek, Chief Financial Officer Kuoni Group

Before Prisca Havranek-Kosicek was appointed Chief Financial Officer at Kuoni Groupon 1 March 2016, she was Group Treasurer of Royal DSM, a Dutch company globallyactive in health, nutrition and materials. In 2011 she took the VP Finance & Control roleat the DSM Pharma Chemicals Business Unit based in Austria. One year later she waspromoted to CFO of the DSM Pharmaceutical Products Business in New Jersey (USA).Prior to these appointments she was responsible for Group Controlling at Immofinanzand worked as Head of Investor Relations at Austrian Airlines Group and Head of aBusiness Unit of the Austrian Post. After her Master Degree from the University ofEconomics of Vienna she joined Roland Berger Strategy Consultants in 1998. For sevenyears she worked for large corporate customers in various industries across Europeand Southeast Asia focusing on strategy development, corporate restructuring andM&A. During this time she also completed her Ph.D in Business Administration. Shecurrently holds a Board position at Allianz-Elementar Versicherungs-AG, Austria.

Prisca Havranek-Kosicek

Austrian, born 1975

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Ivan Walter, CEO Global Travel Distribution

Ivan Walter joined Kuoni Destination Management in 2001 as Head of FIT Europe (FullyIndependent Traveller). In 2005 he was named Head of Kuoni Connect, Kuoni GroupʼsB2B accommodation distributor business. He was responsible for transforming theEuropean Unit into a global organisation. When Kuoni acquired GTA in 2011, Ivan Walterwas instrumental during the post-merger integration and held the role of SVPCommercial Development and later, SVP Sourcing and Product Development. As ofApril 2013 Ivan Walter led GTAʼs operation. In November 2014 he has been appointedHead of Global Travel Services Division on an ad-interim basis. And as of January 14Ivan Walter is CEO of Global Travel Distribution (GTD) Division and was appointed onthe Executive Board. He holds an Executive Master of Business Administration fromthe University of Applied Sciences of Eastern Switzerland.

Ivan Walter

Swiss, born 1974

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Rolf Schafroth, CEO Global Travel Services

After graduating from the University of Applied Sciences (St. Gallen) with a degree inbusiness economics, Rolf Schafroth joined Coopers & Lybrand and went on to serve asa management consultant in Switzerland and the UK. Later in his consulting career hemoved to Deloitte & Touche, Switzerland, for a year before joining Kuoni TravelSwitzerland as Head of Financial Controlling. And after just one year, in 1997, he wasappointed to Head of Finance & IT for Kuoniʼs Strategic Business Unit IncomingServices. In 2003 he assumed overall responsibility for Incoming Europe, the biggest in‐coming unit of the Kuoni Group, and in 2006 he was named CEO of DestinationManagement, a new entity comprising all the Kuoni Groupʼs former incoming units. In2007 he was appointed to the Group Executive Board as Head of the Strategic BusinessDivision Destination Management. Following a restructuring of the Kuoni Group in 2009,Rolf Schafroth took over additional responsibility for the newly created divisionProcurement & Production for Kuoni Tour Operating, while remaining in charge of theKuoni Destination Management Division. Following the acquisition of Gullivers TravelAssociates (GTA) in May 2011 he was CEO Global Travel Services Division, whichemerged from the integration of GTA and Kuoni Destination Management. Today to theGTS Division belong the business activities Group Travel and Destination ManagementSpecialists. Furthermore, Rolf Schafroth is a Member of the Tourism CouncilGraubünden.

Kuoni Group Report

Rolf Schafroth

Swiss, born 1965

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Group Report


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Kuoni Group Report

Economic environmentEconomic growth was subdued in 2015. Growth in developing countries was down forthe fifth consecutive year. Industrialised nations recovered on the previous year andposted a slight increase in economic growth. Three key transitions dominated theeconomic environment in 2015. First, the continuous slowdown of economic growth inChina as the result of an unexpectedly strong contraction of exports and imports andthe growing uncertainty over the future performance of the Chinese market weighedon the economic environment. Second, the second six months of 2015 werecharacterised by a strong fall in the price of commodities. Third, the US FederalReserve’s interest rate hike impacted on global financial markets (source: IMF WorldEconomic Outlook, January 2016).

The economic performance in Kuoni Group’s key source markets was mixed in2015. Whereas Japan posted a slightly positive trend on the previous year in the Asianmarket, China saw a fresh fall in economic growth. In Europe, the Eurozone recoveredslightly, while Great Britain posted a contraction in growth. (source: IMF WorldEconomic Outlook, January 2016).

Zubin Karkaria, CEO Kuoni Group on 2015 and looking ahead

Economic environment

The International Monetary Fund (IMF) forecasts global growth of 3.1% for 2015 (source:

IMF World Economic Outlook Update, January 2016). This corresponds to a year-on-year

fall in global growth by 0.3 percentage points. Despite contracting growth, the major growth

drivers were again emerging markets, led by China (6.9%) and India (7.3%). Developed

markets posted an economic expansion increase of 0.1 percentage points thanks to the

modest recovery in the Eurozone and Japan.

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https://youtu.be/Jy8GccABOzg


International tourism again saw a positive performance in 2015. According to the WorldTourism Organization, international trips abroad expanded by 4.4%. This is about 50million in additional foreign tourists year-on-year. The performance varies bydestination and was influenced by strong exchange rate fluctuations, oil prices, naturaldisasters and terrorist attacks. Growth in advanced economies exceeded that ofemerging markets. The regions posting the strongest growth were Europe, Americaand Asia/Pacific at 5%. Africa was the sole destination to see negative growth. This islargely due to the drop in demand in North Africa. (Source: UNWTO, World TourismBarometer, January 2016).

Effects of the strategic realignment on reportingThe realignment of Kuoni Group announced at the start of the year resulted in majorchanges to all financial key performance indicators at Group level. The IFRS accountingstandards applied require that the income statement present retroactively and thebalance sheet prospectively the continuing operations separately from the discontinuedoperations. Accordingly, the Kuoni Group Report focuses on the continuing operationsand presents separately targeted information on discontinued operations.

Kuoni Group generates organic turnover growth of 6.9%Kuoni Group generated turnover from continuing operations of CHF 3,348.7 million inthe 2015 financial year, compared to CHF 3,372.0 million in the previous year. Strongorganic growth of 6.9% was posted. The strengthening of the Swiss franc had animpact of –7.6% on the conversion from the functional currencies of the subsidiaries tothe presentation currency Swiss francs. In nominal terms, a net turnover decline of0.7% was therefore the result. Acquisitions and divestments had no impact on organicgrowth in 2015 and 2014. The strongly growing divisions of GTD (Global TravelDistribution) and VFS Global, which organically grew by 9.8% and 23.3%, respectively,made an emphatic contribution to the organic turnover incline performance. Earningsbefore interest, taxes and amortisation (EBITA) stood at CHF 124.0 million (2014: CHF105.7 million) and the earnings before interest and taxes (EBIT) came to CHF 81.2million (2014: CHF 76.4 million). Earnings before interest and taxes (EBIT) weretherefore above prior-year’s level, but were strongly influenced by one-off effects, suchas the sale of the “Neue Hard” property in Zurich (+CHF 52.6 million), the impairment ofother intangible assets (–CHF 16.5 million) as well as the costs of the initiatedrestructuring programme of the GTS Division and the support and Group functions (–CHF 25.2 million). However, the prior-year result included a CHF 10.1 million proceed,which originated from the sale of the Geroldstrasse property, Zurich. Adjusted EBITAtherefore amounted to CHF 96.6 million in line with previous year (2014: CHF 95.6million).

International tourism

The World Tourism Organization (UNWTO) reported the following growth rates in

international arrivals per region in 2015 (source: UNWTO, World Tourism Barometer,

January 2016):

Europe: +5%

Asia/Pacific: +5%

Americas: +5%

Africa: –3%

The Middle East: +3% Worldwide: +4%







January 2016):

Europe: +5%

Asia/Pacific: +5%

Americas: +5%

Africa: –3%








January 2016):

Europe: +5%

Asia/Pacific: +5%

Americas: +5%

Africa: –3%


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CHF million EBITA EBIT

As reported 124.0 81.2

Gain on sale of "Neue Hard", Zurich –52.6 –52.6

Restructuring cost 25.2 25.2

Impairment of other intangible assets 0.0 16.5

Underlying 96.6 70.3

Earnings before interest, taxes and amortisation (EBITA) for the full year was driven byGlobal Travel Distribution (GTD) and VFS Global which both posted record years withCHF 66.7 million and CHF 53.9 million, respecitvely, despite the Swiss francstrengthening on a nominal basis. In addition, Corporate – impacted by the sale of the“Neue Hard” property in Zurich – contributed a positive CHF 28.1 million to the groupEBITA. On the other side Global Travel Services (GTS) posted a negative EBITA of CHF –24.7 million, driven by CHF 18.0 million of restructuring expenses.

Net result from continuing operations amounted to CHF 57.9 million and was in linewith prior year’s result (CHF 58.2 million).

The sale of the tour operating activities resulted in a loss of CHF –132.4 millionbefore reclassification of over the years accumulated currency translation losses (CTA)of CHF –219.7 million. This accounting effect had no impact on equity and cash funds.Net result from discontinued operations, net of taxes, therefore added up to CHF –352.1 million (2014: CHF 9.2 million).

Net result of the Group amounted to CHF –294.2 million compared to CHF 67.4million in 2014. At CHF 120.3 million, the free cash flow was strongly above prior year(CHF 55.1 million) mainly due to the sale of the property.

Group turnover of CHF 3,349 million by activity anddivisions

59% Global Travel Distribution31% Global Travel Services10% VFS Global90% Destination & Accommondation Services10% Visa Processing Services

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The Visa Processing Services share of the overall turnover went up during the yearunder review from 8.0% to 10.0%. This, on the one hand, was due to the strong organicgrowth posted by VFS Global, but on the other hand because of a material decline of9.8% in Global Travel Services’ Group Travel and Destination Management Services.

Global Travel Distribution reports strong growth particularly in Asian sourcemarketsThe Global Travel Distribution (GTD) segment increased turnover in the 2015 financialyear further to CHF 1,979.3 million (2014: CHF 1,933.6 million). In nominal terms, thisrepresented a growth of 2.4%, but considering the significant currency influences of –7.4% organic growth posted was 9.8% (2014: 8.8%). The source markets in Asia andthe Middle East and Africa (MEA) made the strongest contribution to the increase. Thegross profit margin remained at prior-year level (2015: 11.4%; 2014: 11.4%). Overall, thegrowth strategy resulted in personnel costs rising by CHF 2.5 million driven by a 7.8%higher number of average full-time equivalents. Earnings before interest, taxes andamortisation (EBITA) stood at CHF 66.7 million (2014: CHF 63.2 million) and theearnings before interest and taxes (EBIT) came to CHF 48.0 million (2014: CHF 42.0million).

The key source market for the GTD Division was again Europe with a turnovershare of 40% (2014: 43%). Asia’s share rose from 29% in 2014 to 31% in 2015. The keytravel destination was again Europe – in particular France, Great Britain and Italy – at48% (2014: 51%) as well as the US.

Turnover by divisions (CHF million)

20142015

Global TravelDistribution

Global Travel Services VFS Global

1,934

1,170

271

1,979

1,055

317

Global Travel Distribution

The segment generated turnover of CHF 1,979 million in 2015 (2014: CHF 1,934 million).

Organic growth came to 9.8%.

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Source markets Global Travel Distribution

40% Europe10% North America5% Central & South America31% Asia/Pacific14% Middle-East/Africa

Destinations Global Travel Distribution


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Global Travel Services launches restructuring programme and focuses onprofitable business areasThe Global Travel Services (GTS) Division, which consists of the Group Travel businessand Destination Management Specialists, posted a further decline in turnover innominal terms by –9.8% to CHF 1,054.8 million in 2015 (2014: CHF 1,169.6 million),driven in particular by the strong appreciation of the Swiss franc compared to thefunctional currencies of the corresponding subsidiaries (–8.5%). In organic terms,turnover decreased only slightly (–1.3%). The Group Travel business enjoyedparticularly strong growth in China and Taiwan, but continued to suffer from weakdemand in Japan. The Destination Management Specialists business dropped furtherand continued to suffer from a lack of demand from Russia. By contrast, the business inAmerica and Asia/Pacific posted positive growth. To respond to the continueddecrease in turnover in certain regions and the narrowing gross profit margin, GTSlaunched a significant restructuring programme of its Group Travel business in thefourth quarter, which weighed on the 2015 result by CHF 15.0 million. The future costbase is to be reduced by more than CHF 30.0 million over the next two years with thisrestructuring programme. Furthermore, following a strategic review of the existing ITinfrastructure and the abandoning of the targeted IT solution had a negative impact onthe Division’s operating result in the amount of CHF 19.5 million (impairment of otherintangible assets of CHF 16.5 million and related restructuring expenses of CHF 3.0million). Earnings before interest, taxes and amortisation (EBITA) adjusted for therestructuring costs of the GTS segment dropped to CHF –6.7 million (2014: CHF 1.2million). The unadjusted earnings before interest and taxes (EBIT) amounted to CHF –48.8 million (2014: CHF –6.9 million), with the negative result mainly due to one-offrestructuring costs of CHF 18.0 million and impairment of other intangible assets inconnection with IT structure changes of CHF 16.5 million.

Region Asia/Pacific was the key source market for the GTS Division with a turnovershare of 67%. Europe was the second-largest source market at 24% of turnover. Thekey travel destination was again Europe, leading at considerable distance with a shareof 72% in turnover. The highest overnight stays were posted by destinations in France,Italy, Switzerland, Germany and Great Britain. In regards of source market Russia’sshare continued to contract compared to 2014, which was caused by the ongoinggeopolitical tensions with Ukraine and the economic slowdown.

Global Travel Services

GTS Division posted turnover of CHF 1,055 million (2014: CHF 1,170 million). Organic

growth came to –1.3%.

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Source markets Global Travel Services


Destinations Global Travel Services


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VFS Global with continuous strong growthThe visa services provider VFS Global generated turnover in the amount of CHF 316.5million in 2015 (2014: CHF 270.8 million). At 10.1%, the number of visa applicationsprocessed rose strongly on 2014 to more than 20 million applications. This growth wasgenerated above all in the source markets in Asia/Pacific, India, Middle East andAfrica. Visa applications in India and China for the destinations of Britain and the USrose in particular. The difficult political and economic situation in Russia, by contrast,resulted in a marked reduction of applications in this source market. Nominal andorganic turnover growth compared to 2014 was 16.9% and 23.3%, respecitvely. Thecurrency-related effects stood at –6.4%. The earnings before interest and taxes (EBIT)rose to CHF 53.9 million (2014: CHF 52.5 million). Under the joint venture agreement onthe provision of visa services for the Kingdom of Saudi Arabia, the network ofapplication offices was expanded further in 2015. The late roll-out of biometric visascontinued to result in delays to business expansion. As a consequence, the result waslower than expected at CHF –1.9 million (2014: CHF –2.0 million).

Region Asia/Pacific remained the key source market for VFS Global with a netproceeds share of 71% (2014: 67%). Europe was again main destination with 50% ofturnover compared to 56% in 2014.

VFS Global

VFS Global achieved turnover of CHF 317 million (2014: CHF 271 million). Organic growth

came to 23.3%.

Source markets VFS Global


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Stable gross profit margin in a challenging 2015Kuoni Group generated a gross profit of CHF 609.7 million in the year under review(2014: CHF 612.2 million). This corresponded to a nominal decrease of 0.4% on 2014.Organic gross profit growth was 7.1% and currency-related effects thereforeamounted to –7.5%. GTD and VFS Global posted strong increases in their organic grossprofit performance with 10.0% and 15.3%, respectively, whereas GTS posted negativeorganic gross profit growth of 5.6%. The reduction in the gross profit of GTS was mainlycaused by the currency-related fall in turnover, but also by a decline of the gross profitmargin.

Overall, Kuoni Group’s gross profit margin was at prior-year’s level with 18.2%(2014: 18.2%). Owing to the different volume mix, with VFS Global having a highercontribution in 2015, contracting gross profit margins of the three segments werenearly offset. In the GTD Division, the gross profit margin was retained at prior-yearlevel (2015: 11.4%; 2014: 11.4%). In the GTS Division, the gross profit margin fell to15.1% compared to 15.7% in the previous year. The lower gross profit margin in theGroup Travel business was largely caused by the growth markets of China and Taiwan,whereas the Destination Management Specialists business substantially improved. VFSGlobal strongly increased its gross profit in absolute terms, the change of the businessmodel for the Malaysian mission for India resulted in higher sales, but also led to alower gross margin (2015: 71.2%; 2014: 76.7%).

Destinations VFS Global


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Higher operating result before amortisations (EBITA)Kuoni Group generated earnings before interest, taxes and amortisation (EBITA) of CHF124.0 million (2014: CHF 105.7 million). The increase in EBITA was driven by the resultsof the Divisions GTD and VFS Global, which showed significant organic growth, and bythe sale of the “Neue Hard” property in Zurich, Switzerland, which made a positivecontribution to the result of CHF 52.6 million. By contrast, one-off restructuring costs ofCHF 18.0 million of the GTS Division and additional costs in connection with therestructuring of support and Group functions amounting to CHF 7.2 million reducedearnings before interest, taxes and amortisation. Earnings before interest, taxes andamortisation (EBITA) 2014 also included a one-off special effect in the amount of CHF10.1 million from the partial sale of an office building at Geroldstrasse, Zurich,Switzerland.

The average number of employees (full-time equivalents) rose by 6.9% on theprevious year to 7,968 employees (2014: 7,455). The increase in the average number ofemployees was caused, in particular, by the high organic sales growth of 6.9%.Personnel costs increased disproportionately by only 0.2%. Other operating costs werewithin the range of the previous year.

Gross profit by divisions (CHF million)

20142015



220.6

183.9

207.7

224.8

159.5

225.4

EBITA 2015 adjusted

EBITA without restructuring costs and the one-time effect from the gain on the sale of the

property in Zurich amounted to CHF 96.6 million.

Headcount at end-2015 (FTE) was 8,117 (end 2014: 7,609).

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The Divisions of Kuoni Group saw a mixed performance in 2015. At EBITA level, GTD(CHF 66.7 million) strongly outperformed the prior-year result (CHF 63.2 million)despite the substantial currency influences. VFS was slightly above the previous year atCHF 53.9 million (CHF 52.5 million). GTS, by contrast, failed to offset the decline involume and narrowing margin despite cost savings and reported a considerablecontraction of its earnings before interest, taxes and amortisation (2015: CHF –24.7million; 2014: CHF 1.2 million). The Corporate’s EBITA was, as described above,strongly influenced by the contribution from the sale of the “Neue Hard” property inZurich and the restructuring costs. Adjusted for these effects and considering the prior-year effect from the sale of the property at Geroldstrasse in Zurich, the negative EBITAfrom the Corporate segment amounted to CHF –17.3 million compared to CHF –21.3million in the previous year.

After deducting the lower amortisations of CHF 26.3 million (2014: CHF 29.3 million)and the impairment on other intangible assets of CHF 16.5 million (2014: CHF 0.0million), the earnings before interest and taxes (EBIT) came to CHF 81.2 million (2014:CHF 76.4 million). The EBIT margin was therefore 2.4% and slightly increasedcompared to previous year (2014: 2.3%). The impairment on other intangible assetswas caused by one-off costs as part of the IT structure adjustments of the GTS Division.

EBITA by divisions (CHF million)

20142015



63.2

1.2

52.5

66.7

-24.7

53.9

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Net result from continuing activities at prior-year’s levelKuoni Group generated a financial result of CHF –2.3 million (2014: CHF 0.7 million).This included borrowing costs of CHF –9.0 million compared to CHF –6.0 million in2014. The borrowing costs increased considerably in absolute terms due to higherutilisation of the syndicated credit facility as well as one-off costs due to theamortisation of capitalised costs in connection with the early refinancing of theprevious credit facility.

Tax expense amounted to CHF –21.0 million in the 2015 financial year (2014: CHF –18.9 million). The effective tax rate increased from 24.5% to 26.6%.

Net result from continuing operations amounted to CHF 57.9 million (2014: CHF58.2 million). This result included a positive effect from the sale of the “Neue Hard”property in Zurich, Switzerland, as well as the negative effects from the restructuringprogrammes of GTS, support and Group functions and the costs from the IT structureadjustment at GTS. Net result from continuing operations per registered share Bamounted to CHF 14.59 (2014: CHF 14.86).

1: Impact of turnover development on EBIT

2: Impact of gross profit margin development

3: Impact of increase in operating costs

4: Impact of sale of Neue Hard and Uberlandstrasse

Deviation earnings before interest and taxes (EBIT)versus prior year (CHF million)

76.4

45.58.0 -101.3

52.6 81.2

E B I T 2 0 1 4 1 2 3 4 E B I T 2 0 1 5

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Following the completion of the sale of European tour operating activities in the thirdquarter the sale of the Asian tour operating activities (India/Hong Kong) was completedon 16 December 2015. The net result from discontinued operations, net of taxes,resulting from these transactions of CHF –352.1 million (2014: CHF 9.2 million) waslargely influenced by the impairment on goodwill of CHF –106.4 million in connectionwith the sale of the European tour operating business as well as the reclassification ofover the years accumulated currency translation losses (CTA) in the amount of CHF –219.7 million. This accounting effect had no impact on equity and cash and cashequivalents. For further details on discontinued activities, see note 2 to the consolidatedfinancial statements.

Net result consisting of continuing and discontinued operations amounted to CHF –294.2 million in 2015 compared to CHF 67.4 million in 2014.

As communicated in the public offer of private equity company EQT on 29 February2016, a dividend payment would be deducted from the offered share purchase price.The Board of Directors is therefore recommending to the forthcoming Annual GeneralMeeting to waive the dividend in the form of withholding tax-free distribution againstreserves from capital contributions.

Comprehensive income came to CHF –221.0 million (2014: CHF 26.4 million) andcontained in addition to the net result currency translation losses of CHF 105.8 million(2014: CHF 27.8 million), remeasurement losses of defined benefit plans, net of taxes,of CHF 30.3 million (2014: CHF 24.0 million), and fair value losses, net of taxes,transferred to equity of CHF 10.7 million (2014: gains of CHF 10.8 million).

Earnings per registered share B (CHF)

20112012201320142015

9.2

-4.2

17.8 17.2

-75.5

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Free cash flow at CHF 120.3 millionNet cash flow from operating activities – continuing operations amounted to CHF 74.1million (2014: CHF 91.6 million). The working capital decreased slightly by CHF 0.8million (2014: Decrease by CHF 2.3 million), in particular as a result of higher accountsreceivable and prepaid expenses. The taxes paid were materially below prior year atCHF 30.5 million (2014: CHF 38.6 million) mainly due to high prepayments made in2014. Net cash flow from operating activities – discontinued operations amounted toCHF 38.8 million compared to an outflow of CHF 27.6 million in 2014.

Net cash used in investing activities – continuing operations amounted to CHF –117.1 million (2014: CHF –28.0 million). In particular the net cash outflow from the saleof the tour operating business resulted in this strong reduction in cash funds. Bycontrast, the sale of the properties in Zurich resulted in a net cash inflow of CHF 84.4million. Investments in property, plant and equipment and intangible assets amounted toCHF 38.2 million in 2015 (2014: CHF 50.1 million) and were therefore significantlybelow the previous year and strongly below depreciation and amortisations. CHF 20.1million of investments were made in property, plant and equipment, which was mainlyassociated with the expansion of VFS Global. CHF 18.1 million was invested inintangible assets, mainly in the IT area, where GTD continued to rely on the integrationof a new e-commerce platform with enhanced customer-driven functions. Net cashused in investing activities – discontinued operations amounted to CHF –5.5 millioncompared to an inflow of CHF 3.6 million in 2014.

Net cash used in financing activities – continuing operations amounted to CHF –29.1 million (2014: outflow of CHF –3.9 million). In particular the profit distribution of awithholding tax-free distribution against reserves from capital contributions of CHF29.4 million to the shareholders of Kuoni Travel Holding Ltd. (2014: CHF 29.0 million)was authoritative.

Free cash flow improved materially in the year under review from CHF 55.1 millionto CHF 120.3 million. Overall, the cash and cash equivalents decreased by CHF 68.2million compared to a decrease of CHF 5.9 million in 2014.


Cash flow from operating activities 74.1 91.6

Purchase of tangible fixed assets –20.1 –21.1

Purchase of other intangible assets –18.1 –29.0

Disposal of assets 84.4 13.6

Free cash flow 120.3 55.1

The statement of comprehensive income contains consolidated net income and all

additional value adjustments entered in the balance sheet, which are presented in the

income statement in accordance with IFRS. They contain market value adjustments of

financial instruments (CHF 10.7 million). The effect consists of the outstanding derivative

financial instruments, which are used to hedge the foreign currency risk of the operating

business. Valuation losses on defined benefit plans amounted to CHF –30.3 million and

foreign exchange differences to CHF –105.8 million, mainly related to the translation of

balances held in functional currency EUR to Swiss franc.

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Stable equity ratio of 32.5%The balance sheet sum fell in the 2015 financial year by 32.6% to CHF 1,629.4 million(2014: CHF 2,419.2 million). This reduction was caused by the sale of the tour operatingactivities and had an impact on all key balance sheet items. Kuoni Group’s goodwillthereby dropped from CHF 911.1 million to CHF 592.6 million. The second key impacton the balance sheet was the significant appreciation of the reporting currency, theSwiss franc, which shrank the balance sheet sum by CHF 105.8 million (2014: CHF 27.8million). As at the end of 2015, total equity amounted to CHF 530.3 million (2014: CHF779.2 million). This corresponds to an equity ratio of 32.5% compared to 32.2% as atthe end of 2014.

Net debt was reduced in 2015 from CHF 273.8 million to CHF 54.5 million by sellingthe tour operating business and the “Neue Hard” property.

Kuoni Economic Profit at CHF 16.2 millionThe value-driven management approach of Kuoni Group aims to align the managementof the company towards long-term value creation. The Kuoni Economic Profit (KEP)serves as the management key indicator. Kuoni Economic Profit improved from CHF –8.5 million to CHF 16.2 million in the reporting year. This was predominantly caused bythe improvement in the operating performance. The average invested capital fell in2015 due to the sale of the tour operating business and the sale of the “Neue Hard”property in Zurich from CHF 958 million in 2014 to CHF 655 million.

KEP is calculated from net operating 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 7.5%.

Kuoni economic profit (KEP) (CHF million)

20112012201320142015

-47.4

-56.6

52.1

-8.5

16.2

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Key Figures (CHF million) 2015 2014

Net operating profit after tax (NOPAT) 65.3 63.0

Average invested capital 655 958

Return on invested capital (ROIC) 10.0% 6.6%

Weighted average capital costs (WACC) 7.5% 7.5%

ROIC – WACC spread 2.5% –0.9%

Kuoni Economic Profit (KEP) 16.2 –8.5

The return on invested capital (ROIC) in 2015 was 10.0% compared to 6.6% in 2014.

Return on invested capital (ROIC) (%)

Global Travel Distribution (GTD)

20112012201320142015

3.32.8

13.0

6.6

10.0

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Global Travel Distribution (GTD)The activities of the globally active travel distribution partner for accommodation anddestination services generated positive growth with its activities in 2015. Turnover wentup to CHF 1,979.3 million (2014: CHF 1,933.6 million). Organic growth came to 9.8%. Bythe end of 2015, the number of full-time employees (FTE) was 1,489, which is 7.8%more than a year previously.

“A new record of close to 15 million room nights was set in 2015.”

Ivan Walter, CEO Global Travel Distribution Division (GTD)

Top 10 source marketsOf all the overnight stays and destination services booked through GTA and theTravelCube and TravelBound travel agency sales brands in 2015, the greatest numbercame from the following source markets: United Kingdom, Australia, United States,Italy, Germany, Japan, South Korea, Turkey, Spain, Saudi Arabia.

The strongest growth was seen in Asian source markets with close to +30%. There wasvery strong growth in bookings by travellers from China (+94%), Thailand (+77%) andIndia (+46% each).

Top 10 destinationsGTA offers accommodation and destination services in destinations all over the world.In 2015 the following cities attracted the most bookings: Paris, London, Dubai, Rome,New York, Istanbul, Singapore, Berlin, Barcelona, Praque.

gta-travel.com

Detailed annual results for GTD Division, 2015

As a travel distribution partner, GTA offers travel agencies, online travel agencies, tour

operators and consolidators easy access to more than 50,000 hotels and apartments

worldwide, as well as 15,000 destination services in 175 destinations all over the world.

Global Travel Distribution (GTD) with GTA is an industry pioneer and a leading global travel

distribution partner for accommodation and destination services in the business-to-business

sector.

GTA simplifies booking processes for these companies so they can make any travel

bookings requested by their travellers. GTA uses modern digital technology to make booking

transactions fast and easy for travel companies on the one hand, and for hotels and

destination services providers on the other.

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An average of 40,000 room nightswere booked every

day in 2015

Around 180,000 priceand availabilityrequests were

received every minute

Over 130,000 searchqueries made every

day on the clientbooking website

About a third of the destinations are in Asia/Pacific, the Middle East and Africa. 2015saw double-digit year-on-year growth for these destinations. There was particularlystrong demand for Phuket (+35%), Bangkok (+31%), Berlin (+28%), Budapest (+25%),Melbourne and Bali (+24% each). Beach destinations experienced growth of almost40%. Bookings for destination services (transfers, city tours, excursions, reservationsetc.) went up by more than 25% to more than 900,000. Train passes for travel in Japan,helicopter flights and shows in Las Vegas, amusement parks in the United States,Singapore and Hong Kong, trips to the Vatican and wine tours in Australia wereparticularly popular.

In 2015 people made their bookings an average of 51 days ahead of travelling. Theaverage stay at destinations was 3.02 days. People stayed longest in New York andIstanbul – more than four days on average – followed by Dubai, Prague and Barcelona.36% of hotel bookings were in three-star hotels, and 25% in hotels with four or twostars.

Paris

Around 260 million daily availability and price requests are made every day on GTAʼs

global systems. In 2015 an average of about 40,000 room nights and 2,500 destination

services were booked each day.

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In 2015 an average of more than 1,200 people a day staying in Paris bookedaccommodation and local services through GTA systems.

GTA invested in the improvement of its digital products during the financial year. Themobile app “emutrip” was improved in 2015 and serves as a mobile travel planner thatallows travel agents to integrate individually booked destination services into the app.Travellers can thus access all their travel information, tickets and vouchers on theirsmartphone or tablet.

At the end of 2015 a new booking website was launched for travel agencies and touroperators. This includes an integrated travel planner that can be used on mobiledevices. New technical interfaces for B2B clients were also planned, tested andlaunched. These facilitate modern and efficient interaction between GTAʼs systems andthe different client groups to suit their specific needs.

For more information on the GTD Division and its operations:

GTA is a global B2B distributor that provides travel companies with easy access toaccommodation and destination services for independent travellers. 50,000 hotels andapartments and more than 15,000 transfer services, city tours and excursions, ticketsand tour guide services, all of which can be booked online. GTA is an intermediary anddistributes to various client types such as travel agencies, online travel agencies, touroperators and consolidators. Despite the high variety of products, it is very easy andfast for clients to make their selections and to book services. Thanks to state-of-the-arttechnology makes the whole booking process is efficient and dynamic – from the startright through to the automated billing at the end.

New York

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Employees negotiate contracts, including rates and availability, with the suppliers thatprovide these services at the destinations. All services are loaded automatically into thedatabase/booking engines and offered for sale. Travel agencies, online travel agencies,tour operators and consolidators can access the contracted accommodation anddestination services through GTAʼs website or through an API feed and then sell theproducts either online or offline to their customers. GTA thus acts as a global linkbetween the service providers (suppliers) – hotels and airport transfer companies forexample – and the sellers who have direct customer contact (clients). GTA usesmodern technology and a global distribution network that gives suppliers access totravellers from markets which they would not be able to access on their own. Kuonioffers these services through three different B2B brands: GTA for wholesalers, offlineand online travel agents, tour operators and consolidators, TravelCube for travelagencies in Europe, Latin America and Australasia, and TravelBound for travelagencies in North America.

Kuoni earns its money in the GTD Division either through margins built into its prices orthrough commissions. Margins in this area of business tend to be lower than in thetraditional tour operating business, but there is much greater operational leverage. Thebusiness model is characterised by a high degree of automation, which keepstransaction costs low. As a result of “dynamic sourcing” of products, prices andtherefore margins can be adjusted continuously in line with supply and demand. Theuse of modern technology allows bookings to be processed automatically and littlemanual intervention. The business model used in the GTD Division is recognised asbeing particularly efficient and progressive, which means that global opportunities forgrowth are excellent.

Global Travel Services (GTS)

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Global Travel Services (GTS)Turnover came to CHF 1,054.8 million in the 2015 financial year (2014: CHF1,169.6 million). Organic growth came to –1.3%. The number of employees (full-timeequivalents, FTE) at the end of 2015 was 2,820. The Division consists of two businessactivities, Group Travel and Destination Management Specialists.

Group Travel

“There was above average growth in Group Travel in 2015,especially from source markets China and Taiwan”

Rolf Schafroth, CEO Division Global Travel Services (GTS)

The key source markets for Group Travel in 2015 were: Japan, China, Taiwan,Indonesia, Hong Kong.

kuonigrouptravel.com

Detailed annual results for GTS Division, 2015

Kuoni Group Travel Experts is a leading worldwide provider of group travel. It organises and

coordinates local travel services such as accommodation, restaurants and catering, as well

as entertainment events, transport and event management. Tour operators, as well as online

and offline travel agencies buy in these group arrangements from Kuoni and sell them

under their own brand in local markets to their end customers. Employees of Kuoni Group

Travel Experts look after the tour groups at the destinations.

Bangkok

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More than 143,000guests visited

St. Peterʼs Basilica in Rome

The average Japanesetravel group consists

of fewer than 30persons

Chinese grouptravellers are 40 years

old on average

China (+32.3%) recorded the largest year-on-year growth in bookings. The largestsource market, Japan, suffered from the depreciation of the yen and a low demand forforeign travel.

There is a clear difference in size of group and average age of travellers betweenthe two biggest source markets, Japan and China. Japanese groups consist of just under30 persons on average, while Chinese groups are larger with 35 on average. Chinesetravellers, average age 40, are considerably younger than Japanese customers, whoseaverage age is 55.

The most important destinations for Group Travel in 2015 were: Italy, France,Switzerland, Germany, Spain.

There was a clear increase in Asian tour groups travelling to destinations inScandinavia. In 2015, Kuoni Group Travel Experts was the biggest supplier of grouptravel to Northern Europe.

The cities that attracted most group traveller bookings in 2015: Paris, Rome, Florence,Venice, Amsterdam, Lucerne, Milan, London, Prague, Vienna.

The most visited sights at destinations in 2015 included St Peterʼs Basilica, the VaticanMuseum and the Colosseum in Rome, Neuschwanstein Castle in Germany, the Swissmountain destination of Titlis, the Eiffel Tower, the Château de Versailles and the Louvrein Paris, Schönbrunn Castle in Vienna and the Wasa Ship Museum in Stockholm.

During 2015 Kuoni continued its preparations as the official accommodationpartner of the 2016 UEFA European Football Championship in France. After 2008 inSwitzerland and Austria, Kuoni has again been chosen as UEFAʼs accommodationpartner for 2016.

Kuoni has included around 500 hotels in the ten host cities in the programme. Theonline programme for team hotels for the participating football teams was launched in2015 with 69 different offers. As the official accommodation partner, Kuoni offers itsaccommodation services to the football teams, officials, sponsors, journalists, touroperators and football fans.

More information about the activities of the Group Travel business within the GTSDivision:

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Kuoni Group Travel Experts is a leading worldwide provider of group travel. It organisesand coordinates local travel services such as accommodation, restaurants andcatering as well as entertainment events, transport and event management. Touroperators, as well as online and offline travel agencies buy in these grouparrangements from Kuoni and sell them under their own brand in local markets to theirend customers. Employees of Kuoni Group Travel Experts look after the tour groupslocally.

The GTS Division also provides meetings, incentives, conferences and events (MICE)services. The European unit is a reliable, comprehensive service agency for organisingmeetings, incentives, congresses, trade fairs and exhibitions for companies,organisations, associations and institutions in the public and private sectors as well asfor football clubs and other sports organisations.

Destination Management Specialists

The global network of Destination Management Specialists consists of six largelyindependent, entrepreneurially managed units that have expert knowledge of their ownregions. The Destination Management Specialists operate in their markets under theirown brands: AlliedTPro (USA), Asian Trails (South-East Asia), Australian TourManagement (Australia), Desert Adventures Tourism/Gulf Dunes (Middle East), PrivateSafaris (East Africa, Southern Africa).

In the financial year 2015, the Indian Destination Management Specialists Sita andDistant Frontiers were sold to Fairfax/Thomas Cook India together with the Indian touroperating business.

The destination management specialists Asian Trails and Australian Tour Management(ATM) operate in the Asia/Pacific region. The existing product portfolio was furtherrefined in financial 2015, and digital marketing activities were expanded. Investmentwas focused in particular on online channels for booking tours, transfers andexcursions through specialised retail suppliers.

Myanmar and Indonesia were the destinations that saw the biggest increase inbookings in 2015. There was particular demand for private, tailor-made tours as well asfor tours that offer unique special experiences. In Australia the most-booked sights anddestinations included the Sydney Opera House, the Great Ocean Road in Victoria, theGreat Barrier Reef in Queensland and the island of Tasmania.

Destination Management Specialists offer various services at their destinations, including

accommodation, tours, transfers, excursions and MICE (meetings, incentives, conferences,

events). These are offered to tour operators, online and offline travel agencies, companies,

organisations and their end customers

kuoni-dmc.com

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In the Middle East, Desert Adventures Tourism (DAT) was one of the leading suppliersof travel activities, and Gulf Dunes one of the leaders for MICE business. Thedestination of Bahrain was added to the portfolio in 2015. The most-booked destinationswere the United Arab Emirates, Oman and Jordan. The main sights and activitiesbooked included desert safaris with barbecue dinners, the Great Mosque in Abu Dhabi,Petra and the Dead Sea in Jordan as well as Nizwa Fort and the Wahiba desert inOman. In the MICE business, team-building activities such as a treasure hunt in Dubai,camel polo and desert experiences were the most popular options.

AlliedTPro and Kuoni Destination Management are the brands operating on the marketin the USA. The selection of guided tours was extended, especially for the south-eastern United States. To give tour operators greater planning security, the mostpopular tours were offered with a new “performance guarantee”. The booking systemwas enhanced to allow customers to book transfers, excursions, tickets for attractionsand activities online. Favourite destinations in 2015 were New York, Las Vegas,California, Florida and Arizona. The most-booked tours were the “Western Wonders”trip through west coast states, and the “Eastern Triangle” on the east coast.

Private Safaris offers its services as a destination management specialist in East Africaand in the countries of Southern Africa. The most popular and most-booked trips inEast Africa are safaris in Kenya and Tanzania. A new “World Heritage Tour” in Ethiopiawas added to the product portfolio in 2015. Cross-border car tours were introduced inSouthern Africa. These take travellers through various countries in the region. A newseries of trips that visit local people to experience different cuisines, art and cultureproved especially popular. On the technical side, new investments were made inbusiness-to-business booking options and in systems that allow customers to puttogether individual itineraries. The most-booked destinations in 2015 were Cape Town,Kruger National Park, the Garden Route and Namibia.

For further information about Destination Management Specialists:

Las Vegas

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Destination Management Specialists are local experts with offices in the traveldestinations themselves. The Kuoni Group runs a worldwide network of six DestinationManagement Specialists. Their local presence and networks provide substantial addedvalue for customers. They employ local people who have great local knowledge, whichthey pass on both to the guests who arrive from abroad and to tour operators in Europe.These inbound specialists tend to operate in the destinations under their own well-known brand names.

AlliedTPro/Kuoni Destination Management USAThis company, with offices in New York, Miami, Orlando, Las Vegas, Los Angeles andHawaii, specialises in holidays within the USA. These include individual and groupholidays, guided tours and tailored holidays in the VIP concierge sector.

Asian TrailsAsian Trails operates in Thailand, Cambodia, Indonesia, Laos, Malaysia, Myanmar,Vietnam and China. It offers a wide variety of leisure and MICE products in thesecountries. These include guided tours, adventure holidays, individual holidays, familyholidays, tailor-made travel, incentive programs and classic beach holidays. AsianTrailsʼ main business is still leisure tours for guests from Europe, South America andIndia.

Australian Tours ManagementThis company specialises in services for private and group holidays, specially themedholidays and MICE business in Australia. Its most important source markets are in Asia(India, Indonesia, China and Hong Kong, Thailand, Malaysia, Vietnam, Philippines, Koreaand Japan) and Europe. Australian Tours Managementʼs services are booked by touroperators, travel agents and online platforms.

Desert Adventures TourismDesert Adventures Tourism is one of the leading providers of destination services in theMiddle East, with a particular focus on the United Arab Emirates, Oman and Jordan.The company specialises in individual and group holidays, tours and excursions, as wellas arranging additional leisure activities and providing sports events packages. As per 1January 2013 MICE specialist Reem Tours is part of the Destination ManagementSpecialists organisation.

Gulf DunesGulf Dunes specialises in incentive tours and meetings (MICE) in the United ArabEmirates and Oman. The company was acquired by Kuoni in 2010.

Private SafarisThe staff at Private Safaris guide and look after customers who want a taste ofprimeval Africa. The company, employing nearly 300 staff in 6 offices, offers services in17 sub-Saharan countries with a focus on Kenya, Tanzania, South Africa, Namibia andBotswana. Counting on more than 35 yearsʼ experience, it specialises in landarrangements such as safaris, jeep tours, individual and group tours and MICE.

VFS Global

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In 2015 VFS Globalprocessed 20.1 millionapplications around

the world

As at 31 December2015, 1,916 application

centres wereoperating in 123

countries

430 new applicationcentres were openedin 2015, an average of

1.2 every day

VFS Global The visa services provider reported strong growth in 2015. Turnover went up to CHF316.5 million (2014: CHF 270.8 million). Organic growth came to 23.3%. By the end of2015, the number of full-time positions (FTE) was 3,561, an increase of 18.3% on theprevious year.

“In May 2015 we reached the milestone of 100 million visaapplications processed since the founding of VFS Global in 2001.”Zubin Karkaria, CEO of VFS Global (and CEO of Kuoni Group since November 2015)

On 31 December 2015, VFS Global was operating 1,916 application centres in 123countries for 48 governments. 430 new application centres were launched during the2015 financial year. The governments of Brazil and Latvia were signed up as newcustomers for visa application processing. New operational services were launched inMyanmar, Poland, Surinam and Uzbekistan. In the citizen services business, VFS Globalentered into a global partnership with Ghanaʼs National Identity Authority to open acentre for the identification and registration of foreigners in Ghana.

In 2015 VFS Global processed 20.1 million applications, which is a 10% rise on the 18.2million applications processed in 2014. The key source markets were India, China,Russia and the Ukraine. India accounted for 35% of all applications. The greatestnumbers of applications were for visas for the USA, UK, Canada, Spain and India.

VFSglobal.com

Detailed annual results for the VFS Global Division, 2015

VFS Global is the market leader for industry-specific solutions in the area of visa

applications, consular and citizen services and identity management.

VFS Global is a trusted partner to governments, their diplomatic missions and official

bodies. On their behalf VFS Global manages administrative processes for visa and passport

applications and provides identification management and citizen services (e.g. birth and

death certificates, land registry entries, planning applications).

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VFS Globalʼs largest application centre was opened in Shanghai in August 2015. With afloor space of 8,500 square meters the centre offers and executes services for 20governments. The centre has 173 counters for applications, 57 cabins for biometricrecording and 1,600 seats for applicants.

The biggest application centre in South Asia was opened in New Delhi in December2015. Services for 31 governments are provided in a 6,200 square meter facility. Thecentre has space for 153 counters. More than 12,000 applications can be accepted andprocessed each day.

An On-Demand Mobile Visa Service was introduced for the UK government inChina. Through this service, VFS Global will travel to any location in mainland China toaccept visa applications from applicants at their doorstep, so they donʼt have to travelto one of VFS Globalʼs twelve fixed visa application centres in the country. This servicecan be availed of by individuals or larger groups.

Application Centre inShanghai

VFS Global does not make judgements and decisions about applications. The company

provides administrative help to governments and authorities so they can focus on assessing

applications and making the final decisions. VFS Global uses state-of-the-art technology to

ensure seamless service and highly secure processing of applications.

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The latest generation of fully automatic visa kiosks have been launched in a pilot projectin Mumbai, India. These allow customers to submit their applications, biometric data,photos and payments on their own at the visa kiosk. The kiosks are VFS Globalʼsresponse to the increasing demand for automated “self-service” application facilities.Visa kiosks are currently being tested in India.

In 2015 VFS Global entered into two significant new strategic partnerships to helpdevelop its business operations: The partnerships, with German company Veridos andThai firm CSP Chan Wanich Security Printing, are helping VFS Global expand itsidentity management activities. VFS Globalʼs expertise in process management andoutsourced services for governments and public authorities has been enhanced by theexpertise provided by these partners. They offer services to governments, publicauthorities and private companies for the production and personalisation of passports,identity cards, driversʼ licences, health insurance certificates, credit and debit cards,cheques, visa stickers and other valuable and security-related documents and papers.These strategic partnerships enable VFS Global to add comprehensive customisedsolutions to its portfolio of industry management services for governments andauthorities.

VFS Global continued to expand its range of citizen services. Applications are nowbeing processed on behalf of regional and local authorities in India for birth and deathcertificates, land registry entries, licences and health programmes.In the second half of 2015, VFS Global successfully carried out a project for the SouthAfrican government to record residency and work permits for over 200,000 peoplefrom Zimbabwe.

2015 also saw publication of the companyʼs first mobile app. This provides up-to-date information about the service and customer portfolio, as well as about VFSGlobalʼs performance.

For more information about VFS Global, its business operations and its development:

Automatic visa kiosk

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VFS Globalʼs business model was created in India in 2001, and back then, like now,governments and their diplomatic missions were beginning to find it difficult to copewith the combination of growing demand for travel with stricter controls, increasedsecurity and all the implications these factors had for visa processing. The idea thatVFS Globalʼs management had in 2001 was that it could offer to take on the tediousadministrative part of the visa issuance process. This would relieve the missions oftime-consuming administrative tasks and allow them to focus on the key decision-making task – i.e. whether an applicant should or should not be granted a visa.

VFS Global was established in Mumbai in 2001, when it set-up three Visa ApplicationCentres (VACs) for its first client government – the United States of America. By 2005VFS Global served eleven governments – including the United Kingdom, Australia andCanada – with over 100 VACs across eleven countries, and had processed over 2.4million visa applications. In 2007 it won its first global account – that of the HomeOffice- UK Visas & Immigration (formerly UK Border Agency) – for operations across 33countries. New client governments such as India and also numerous EU countriesfollowed. In 2008 VFS Global initiated the concept of joint Visa Application Centres(JVAC) for “Schengen” client governments in India, the United Arab Emirates, the UKand Ghana. Eastern European and Asian nations, including Russia, Poland, and Japanalso joined VFS Globalʼs roster of client governments.

In the past 15 years the company has developed a highly differentiated solution portfolioincluding dedicated visa and passport application centres, information services(contact centres), web based modules (for appointment scheduling and online paymentcollection), end-to-end biometrics solutions, verification and attestation services,specialised security solutions, etc. VFS Global has also developed sophisticated,technology-driven solutions which enable remote visa and other document processing– such as an integrated video interviewing hub solution, and a location independentdocument processing solution (LIDPro )*.

In 2014 VFS Global successfully introduced and implemented “citizen services” whichfocuses on delivering non-judgemental, document processing services for governmentsand governmental bodies within the home country. In 2015 the company set-up aseparate business unit for identity management and citizen services business. This newbusiness vertical has developed well and now serves eight client government bodiesacross nine countries through 69 Application Centres.

Its global operations are certified with ISO 9001:2008 for Quality Management System,ISO 27001:2013 for Information Security Management System, and ISO 14001:2004 forEnvironment Management System.

Processing applications requires a very high standard of security and quality. Over thelast 15 years, VFS Global has invested in cutting-edge data security and qualityassurance technology. As a result, it can also process passports of all types. Thanks toits state-of-the-art technology the company can even deal with biometric passports.Processing visa applications involves working with highly sensitive personal data. VFSGlobal has implemented processes in compliance with global data protection andprivacy requirements, like UK Data Protection Act (UK DPA), EU Directive 95/46/EC,Canada PIPEDA & Generally Accepted Privacy Principles (GAPP) from AICPA/CICA toensure utmost security of data. This has resulted in recognition through awards for thestrength of its data protection. The very high priority it gives to security has been furtherhighlighted by its investment in a state-of-the-art monitoring system. With strongexperience in developing and implementing biometric solutions, VFS Global is furtherdeveloping its identity management business.

TM

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Application Centres are run as service centres. They are situated according to therelevant governmentʼs requirements in specific city locations. They accept visa orpassport or other applications directly from applicants or via travel agents, ensure alldocumentation is in order, complete basic administrative processing work – includingdata entry, appointment scheduling and biometric enrolment – and pass on theapplications to the relevant diplomatic mission/client government body. They are alsoinvolved in delivery of passport and other documents back to applicants. Computers,photocopiers and passport photo machines are available at the centres if required.Many VACs also offer VIP lounges and other services to enhance the overallexperience for visa applicants.

VFS Global works predominantly with a user-pay revenue model where it receivesits service fee directly from visa applicants, in addition to the visa fees which areremitted to the diplomatic mission.

In some countries VFS Global operates with Facility Management Companies (FMCs)for regulatory or cultural reasons. These FMCs handle the operations under the brandname of VFS Global. Some of the staff in these countries are employed by the FMC andinfrastructure is provided by the FMC, but key managers are employed by VFS Globaland VFS Global maintains complete control over, and takes full responsibility for, theentire operation.

Working in a highly sensitive environment, VFS Global lays a lot of emphasis on security– data security as well as physical security – and works as per highest internationalsecurity standards. Stringent controls and processes are in place to monitor andcontrol operations across the world. VFS Global also follows strict guidelines whenrecruiting employees.

*Patent pending. Copyright 2012. All rights reserved by VFS Global

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Corporate Governance


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Introduction This Corporate Covernance Report describes the principles of management andcontrol as they apply to the top decision-making bodies of the Kuoni Group. To enhancetransparency and thus comparability with prior years and other companies, it has beenprepared in conformity with the SIX Corporate Governance Directive of 1 September2014 implemented on 1 October 2014. Unless otherwise specified, all the informationcontained in the report is based on data as at 31 December 2015.

The principles and rules of corporate governance as practiced by the Kuoni Groupare set out in the companyʼs Articles of Incorporation, its Organisational Regulationsand the regulations of the Board of Directors committees. The Chairman of the Boardof Directors reviews the content and current relevance of the corporate governanceprovisions regularly, and proposes any additions or amendments required to the Boardof Directors.

In view of the fulfilment of the ordinance against excessive pay at joint-stock companies(VegüV) as of 20 November 2013, some changes to the Articles of Incorporation wereproposed to and approved by the Annual General Meeting of Shareholders (AGM) on25 April 2014 and the AGM of 20 April 2015.

The Kuoni Group complies with all the rules relevant to corporate governance. Inparticular, the Kuoni Group abides by all existing legislation, the directives of the SIXSwiss Exchange (and the remarks thereto) and the Swiss Code of Best Practice forCorporate Governance issued by economiesuisse, Switzerlandʼs umbrella businessassociation (as updated in September 2014).

This Annual Report contains the Compensation Report of the Board of Directors,which also complies with the ordinance against excessive pay at joint-stock companies(VegüV).

Group structure

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. Professionally implemented corporate governance is

essential for any successful and responsible company that seeks to fulfil its shareholders,

employees and external stakeholders.

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Group structureKuoni Travel Holding Ltd is a joint-stock holding company under Swiss law, which hasdirect or indirect shareholdings in all the companies worldwide that belong to the KuoniGroup. While the Board of Directors devotes itself to overall management, strategic andsupervisory duties, the Group Executive Board is entrusted with operationalmanagement tasks. For a diagram of the operational structure of the Kuoni Group, seeorganisation chart. The registered shares B of Kuoni Travel Holding Ltd, Zurich, whichhave a nominal value of CHF 1.00, are traded on the Main Standard of the SIX SwissExchange (securities number 350 485, ISIN CH 0003504856). The registered shares Aof Kuoni Travel Holding Ltd, Zurich, which have a nominal value of CHF 0.20, are notlisted. The companyʼs legal domicile is at Neue Hard 7, Zurich. Kuoni Travel Holding Ltddoes not hold any equity interests in any stock-exchange-listed companies.

For details of the unlisted companies that belong to the Kuoni Group of consolidatedcompanies, see the following chapter of the Financial Report. A more detaileddescription of the global activities of the Kuoni Group is available at kuoni.com.

Capital structure

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Capital structurePrincipal shareholders The information on principal shareholders of Kuoni Travel Holding Ltd is provided in therespective table of the Financial Report.

This shows those shareholders holding over 3% of the companyʼs shares, togetherwith their current holdings (based on information provided by the same). The companyreceived several notifications of significant shareholders as required under Article 20of the Swiss Federal Act on Stock Exchanges and Securities Trading in the course of2014. These notifications were published on the SIX Swiss Exchangeʼs notificationsplatform and under kuoni.com. Kuoni Travel Holding Ltd is not aware of any othershareholders holding more than 3% of the companyʼs shares as of 31 December2015. Kuoni Travel Holding Ltd is not aware of any shareholdersʼ agreements.

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

CapitalFor further details and the composition of the amounts of ordinary and conditionalcapital of Kuoni Travel Holding Ltd, please see the respective table of the FinancialReport. Further information on the capital structure is also available on kuoni.com.

Authorised and conditional capital in particular Kuoni Travel Holding Ltd has no authorised capital.

Conditional capital issuable via the exercising of conversion rights and/or warrantslinked to bonds or similar debt issued by Kuoni Travel Holding Ltd or any of itssubsidiaries in the domestic or international capital markets amounts to a maximum ofCHF 384,000. In the case of issues of bonds or similar debt instruments to whichconversion and/or warrant rights are attached, the pre-emptive rights of the existingshareholders are excluded. The holders of the said conversion and/or warrant rightsare entitled to subscribe for new registered shares B. The acquisition of registeredshares through the exercise of conversion and/or warrant rights and any subsequenttransfer thereof are subject to the transfer and voting restrictions contained in theArticles of Incorporation. The Board of Directors is authorised to restrict or revoke thepre-emptive rights of shareholders when such bonds or similar debt instruments towhich conversion and/or warrant rights are attached are issued to finance theacquisition of other companies or parts of companies. If shareholdersʼ pre-emptiverights are revoked by a decision of the Board of Directors, the conversion and/orwarrant rights concerned will be issued at the prevailing market price, and the newregistered shares will be issued at market rates, with due regard to the current marketprice of the registered shares concerned and/or of comparable financial instrumentswith a market price. The exercise period is limited to ten years for conversion rightsand to seven years from the date of the bond issue for warrant rights.

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Conditional capital of a maximum of CHF 96,000 also exists for use in exercisingsubscription or option rights granted to employees of Kuoni Travel Holding Ltd or itssubsidiaries under one or more employee stock option plans (in accordance with art. 28of the Articles of Incorporation). In such cases, new registered shares B may also beissued to employees at rates below the current stock market price, and existingshareholders shall have no subscription rights. The terms and conditions for the issueof such shares shall be determined by the Board of Directors. The acquisition ofregistered shares under such employee stock option plans and any subsequent transferthereof are subject to all the relevant statutory transfer and voting right restrictions.

Changes in capital and share buyback programme For 2013, 2014 and 2015 please refer to the respective table of the Financial Report.There is no share-buy-back programme.

Shares and participation certificates The composition of the share capital of Kuoni Travel Holding Ltd is shown in therespective table of the Financial Report. At the General Meeting of Shareholders ofKuoni Travel Holding Ltd each registered share carries one vote. These voting rightscan only be exercised if the shareholder is registered as a shareholder with votingrights in the Kuoni Travel Holding Ltd share register. Under the Articles ofIncorporation, such registration also requires a declaration from the shareholder thatthey 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 lowernominal value than the listed registered shares B (nominal value CHF 1.00), and thushave five times greater voting rights in terms of the capital invested. The registeredshares of Kuoni Travel Holding Ltd are uncertificated.

The shareholder may demand at any time that Kuoni Travel Holding Ltd issue aconfirmation in respect of the registered shares which the shareholder currently owns.The shareholder is not entitled to the printing and delivery of certificates for registeredshares. Kuoni Travel Holding Ltd, by contrast, may print and deliver certificatesrepresenting shares (single or global share certificates or certificates comprisingmultiple shares) at any time instead of uncertificated securities. Kuoni Travel HoldingLtd may also cancel without replacement any such previously issued share certificateor uncertificated security.

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

All registered shares are entitled to a dividend. Kuoni Travel Holding Ltd waives itsentitlement to a dividend on any shares held by the company as treasury shares at thetime of the dividend payment. The voting rights attached to such shares are suspendedby 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.

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Restrictions on transferability and nominee registrations The following provisions apply to the registered shares A and B of Kuoni Travel HoldingLtd.

The Board of Directors of Kuoni Travel Holding Ltd will deny the registration of anacquirer of registered shares subject to the provisions of the last paragraph in thischapter as the holder or usufructuary of the registered shares with voting rightsconcerned if, as a result of such registration, the acquirer were to acquire orcollectively hold, directly or indirectly, more than 3% of the registered share capitalentered in the Commercial Register. For the registered shares exceeding this 3%ceiling, the acquirer shall be registered in the share register as the holder orusufructuary of these registered shares without voting rights. On the 11 November2015 the Board of Directors announced that it intends to ask the next General Meetingto remove statutory voting right restrictions.

Legal entities or partnerships that are interrelated through capital ownership, votingrights or uniform management or are otherwise linked with one another, as well asindividual persons or legal entities or partnerships who act in concern for the purposeof circumventing the limitation for registration in the share register, shall, for thepurposes of the preceding paragraph, be treated as one single acquirer.

The limitation for registration in the share register set forth in paragraph 2 of thischapter subject to Article 652b, paragraph 3 of the Swiss Code of Obligations alsoapplies to registered shares which are acquired through the exercising of pre-emptiverights, warrants and conversion rights. The limitation for registration in the shareregister shall not apply to an acquisition of registered shares by succession or divisionof estate or under marital property law.

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

The Board of Directors of Kuoni Travel Holding Ltd may register individual personswho 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 anagreement with the Company with respect to such status and if the nominee is subjectto the supervision of a recognised bank or financial market.

The Board of Directors of Kuoni Travel Holding Ltd may also, after having heard theperson concerned, cancel a personʼs registration in the share register as a shareholderor nominee with voting rights with retroactive effect to the date of registration if suchregistration was based on incorrect information from the acquirer, and shall then insuch cases register the shareholder or nominee concerned in the share register as ashareholder or nominee without voting rights. In the event of any such action, theshareholder concerned must be immediately informed.

The Board of Directors of Kuoni Travel Holding Ltd shall specify the particulars andgive the necessary directions to ensure compliance with the preceding provisions. Itmay also allow exemptions in particular cases from the regulation regarding nomineesand the percentage limitation specified in paragraph 2. The Board of Directors issuesregulations on this. The Board may also delegate its duties.

No exemptions from the transferability and nominee registration restrictions weregranted in the reporting year.

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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 anestate, a matrimonial property regime or a merger with or incorporation into a directlycontrolled, wholly owned holding company) remain intact. The limitations outlinedabove shall also not apply to shares which have been or will be acquired by theshareholders entered in the share register on 25 February 1995 or their legalsuccessors as defined above through the exercising of subscription, warrant, option orconversion rights arising from the shares entered in the share register on 25 February1995 and any shares derived therefrom.

Convertible bonds and options Kuoni Travel Holding Ltd had no convertible bonds or options outstanding.

Board of Directors

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Board of DirectorsMembers of the Board of Directors The Board of Directors of Kuoni Travel Holding Ltd consists of the following sevenmembers:

Name Born Nationality Function JoinedCurrent term

expires

Heinz Karrer 1959 Swiss Chairman 2007 2016

Adrianus (Adriaan) Nühn 1953 Dutch Deputy Chairman 2012 2016

Jae Hyun (Jay) Lee 1964 South Korean Member 2012 2016

John Lindquist 1950 British/US-American Member 2007 2016

Selina Neri 1968 Italian Member 2015 2016

David Schnell 1947 Swiss Member 2002 2016

Annette Schömmel 1965 Swiss Member 2004 2016

All terms expire at the next regular Annual General Meeting of Shareholders. Thecurricula vitae of the individual Board members can read under kuoni.com. All themembers of the Board of Directors are independent directors.

None of the present Board members sat on the Group Executive Board of KuoniTravel Holding Ltd or on the executive board of any Group subsidiary of Kuoni TravelHolding Ltd within the last three years. Similarly, none of the present Board membersmaintains material business relationships with Kuoni Travel Holding Ltd or with anyGroup subsidiary of Kuoni Travel Holding Ltd.

Other activities and functionsDetails of other activities and functions of the members of the Board of Directors areavailable on the company website.

Regulation on the number of additional positionsThe members of the Board of Directors shall not occupy or exercise more than eightadditional positions in other companies, thereof not more than four publicly listedcompanies and five unpaid positions in non-profit organisations. An additional positionshall be deemed to be a position in the highest managing or supervising body of otherentities that are obliged to be entered into the commercial register or a comparableforeign register and that are neither controlled by nor that control the company. Anumber of positions in several different companies that form part of the same group ofcompanies is regarded as one position. Additional positions that are held by a memberof the Board of Directors or a member of the Executive Board within the scope offunctions and based on the instructions of the company or another group company arenot subject to the limitation.

Election and term of officeEach individual member of the Kuoni Travel Holding Ltd Board of Directors is electedseparately by the Annual General Meeting of Shareholders. The latter elects theChairman of the Board of Directors among the elected members of the Board ofDirectors. The Board of Directors consists of a minimum of three and a maximum ofnine members.

The terms of office of the members of the Board of Directors as well as the term ofoffice of the Chairman of the Board of Directors shall end no later than the closing ofthe Annual General Meeting of Shareholders following their election. Re-election ispermitted.

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In the event that the position of the Chairman is vacant, the Board of Directors appointsa new Chairman for the remaining of the term of office. The Board of Directors is self-constituting. It designates from among its members one or more Vice-Chairmen.Furthermore, the Board of Directors designates a secretary who need not be a memberof the Board of Directors.

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

Internal organisation The internal organisation of the Board of Directors is based on the companyʼs relevantvalid Organisational Regulations, which are issued by the Board of Directors andrevised regularly. The Organisational Regulations may be consulted under kuoni.com.They were reviewed in December 2015 and came into force on 1 January 2016.

Division of duties within the Board of DirectorsWithin 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 sameduties and authorities when doing so. Apart from these duties and authorities, theChairman and Deputy Chairman have no particular function within the Board ofDirectors. The Chairman is responsible for the formal and organisational leadershipand management of the Board of Directors. In urgent cases, he shall also take thenecessary decisions and precautions until the matter can be decided upon by the Boardof Directors.

The Chairman further monitors the observance of legal requirements, the Articlesof Incorporation, regulations and directives by the companyʼs management bodies, andsubmits the requisite motions, requests and proposals to the Board of Directors. TheChairman also ensures, in collaboration with the Group Executive Board, thatinformation is provided in good time on all major aspects of the company which are ofrelevance to the monitoring of its activities and to the corporate decision-makingprocess. Further details of the duties and authorities of the Chairman of the Board areprovided in Section 2.5 of the Organisational Regulations.

Board committeesThe Board of Directors has formed the following three committees to assist it in itswork: the Compensation Committee, the Nomination Committee and the AuditCommittee.

As a rule, the committees are constituted by the Board of Directors, subject todifferent provisions in the Articles of Incorporation or in regulations. The chairmen ofthe committees inform the Board of Directors at the respective following ordinarymeeting of the Board of Directors about their activities, in urgent cases alsoimmediately. All of these committees have written regulations specifying their tasks andresponsibilities.

Compensation CommitteeThe General Meeting of Shareholders elects a Compensation Committee consisting oftwo to five members. The members of the Compensation Committee are electedindividually. Only members of the Board of Directors are eligible for election. The termof office of the members of the Compensation Committee ends at the latest with theclosing of the General Meeting of Shareholders following their election. Re-election isadmissible.

If the Compensation Committee is not fully staffed, the Board of Directors elects themissing members for the remainder of the term.

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The task of the Compensation Committee is to make a proposal to the Board ofDirectors regarding the total compensation of the Group Executive Board for thefinancial year following the General Meeting of Shareholders in accordance withArticle 28 of the Articles of Incorporation. In addition, based on the total amountsapproved by the General Meeting of Shareholders, the Compensation Committeemakes proposals to the Board of Directors regarding the effective payment of thecompensation and supervises together with the Board of Directors the adherence tothe total compensation and the compliance with the compensation regulations. Further,the Compensation Committee prepares the Compensation Report and submits it to theBoard of Directors.

To fulfil its duties, the Compensation Committee may consult other persons andexternal consultants for support and have them participate in its meetings.

The Board of Directors may assign further tasks to the CompensationCommittee. Members of this committee are: Adrianus (Adriaan) Nühn (Chair), JaeHyun (Jay) Lee and Annette Schömmel.

Nomination CommitteeThe Nomination Committee makes sure that Kuoni recruits and develops experiencedand qualified executives and obtains their long-term commitment. Thereby, it observesthe standards of a good corporate governance and the long-term interest of theshareholders. Upon request by the Compensation Committee, the NominationCommittee may provide the necessary information in order to allow the CompensationCommittee to propose an appropriate and market-conform compensation for evaluatedcandidates for the Board of Directors of the Group Executive Board.

Members of this committee are: Adrianus (Adriaan) Nühn (Chair), Jae Hyun (Jay)Lee and Annette Schömmel.

Audit CommitteeThe Audit Committee shall support the Board of Directors in its non-delegable duties toprovide supreme supervision and financial control by forming its own opinion of theorganisation and functioning of the Groupʼs internal and external control system and ofthe disclosed consolidated financial statements.

Members of this committee are: David Schnell (Chair), John Lindquist and SelinaNeri.

Working methods of the Board of Directors and its committeesThe Board of Directors and its committees meet as often as business requires, but aminimum of six times a year for the Board of Directors, four times a year for the AuditCommittee, three times a year for the Compensation Committee and twice for theNomination Committee.

The Board of Directors and the committees met as follows in 2015: 16 times(including telephone conferences).

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Meetings Telephone conferences

Present absentAverage length

(hours) Present absentAverage length

(minutes)

Board of Directors 2015

Heinz Karrer, Chairman 10 0 9 6 0 55

Adrianus (Adriaan) Nühn, Vice Chairman 10 0 9 6 0 55

Jae Hyun (Jay) Lee 9 1 9 2 4 55

John Lindquist 10 0 9 5 1 55

Selina Neri, since April 2015 7 0 9 6 0 55

David Schnell 10 0 9 4 2 55

Annette Schömmel 10 0 9 6 0 55

Raymond D. Webster, until April 2015 2 1 9 0 0 55

The Audit Committee held four meetings.




(minutes)

Audit Committee

David Schnell, Presidency 4 0 7.2 0 0 0

John Lindquist 3 1 7.2 0 0 0

Selina Neri, since April 2015 3 0 7.2 0 0 0

Raymond Webster, until April 2014 0 1 7.2 0 0 0

The Compensation Committee met five times and the Nomination Committee fourtimes.




(minutes)

Compensation Committee

Adrianus (Adriaan) Nühn, Presidency 5 0 1.2 0 0 0

Jae Hyun (Jay) Lee 5 0 1.2 0 0 0

Annette Schömmel 5 0 1.2 0 0 0

Nomination Committee

Adrianus (Adriaan) Nühn, Presidency 3 0 1.2 1 0 30

Jae Hyun (Jay) Lee 3 0 1.2 0 1 30

Annette Schömmel 3 0 1.2 1 0 30

The Board of Directors meets at the invitation of its Chairman. A Board meeting mayalso be demanded by any of its members or by the CEO. The agenda of the Board ofDirectorsʼ meetings is set by the Chairman. Any member of the Board of Directors maytable an agenda item. The members of the Board of Directors each receivedocumentation prior to the meetings, which enables them to prepare for discussion ofthe agenda items concerned. Board meetings are chaired by the Chairman. A Boardmeeting 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 meeting chair has the casting vote. In addition to its members, meetings of theBoard of Directors are generally attended by the Chief Executive Officer (CEO) and theChief Financial Officer (CFO), and by further members of the Group Executive Board asand when required. These attendees have only an advisory function, along with theright to table motions or agenda items. Persons who are not members of the GroupExecutive Board may also attend as specialists at the chairʼs invitation.

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Minutes are kept of all meeting deliberations. Board resolutions may also be passed bywritten approval (letter, fax, e-mail or other written form), again by a simple majority,provided all Board members have had the opportunity to cast their vote and provided nomember demands oral discussion of the matter concerned.

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

The committee members each receive documentation prior to the meetings, whichenables them to prepare for discussion of the agenda items concerned.

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

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

An annual self-assessment procedure has been established to permanently monitorand if possible enhance the performance of the Board of Directors. This evaluates howefficiently the Board and its committees are performing their functions and meetingtheir responsibilities, whether each Board member participates actively in Boarddiscussions and makes contributions based on independent judgement, and whether anenvironment of open discussions is maintained at Board meetings.

Areas of responsibilityThe Board of Directors is the companyʼs supreme managing body and is responsible forsupervising the management of the company and its business. It deals with all mattersthat are not entrusted to another body of the company under the law, the companyʼsArticles of Incorporation or its Organisational and Business Regulations.

With regard to the non-transferability and inalienability of duties of the Board ofDirectors, reference is made to Article 716a of the Swiss Code of Obligations andArticle 22 of the Articles of Incorporation.

The Board of Directors may also, subject to the relevant legal provisions, delegate all orpart 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 OrganisationalRegulations. In this connection, the Board of Directors has issued a set ofOrganisational Regulations which specify (under Section 2.3) its further duties andauthorities and list (under Section 4.3) those business items which require its approval.

The Board of Directors of Kuoni Travel Holding Ltd manages the subsidiaries underits legal and/or economic control as a corporate group. The responsibility for theresolutions taken by the Board of Directors therefore extends not only to the companyin the legal sense but also to all the subsidiaries described above by virtue of theBoardʼs authority to issue instructions to the representatives of the company in theirrespective governing bodies.

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Within the overall parameters imposed by the law and the Articles of Incorporation, theBoard of Directors delegates the management of the company to the Group ExecutiveBoard by means of the relevant Organisational Regulations, which can be viewed on thecompany website.

The Group Executive Board has the duty and the authority to manage the KuoniGroupʼs business operations. It is responsible in particular for:

– compiling the annual and interim financial statements and providing the requisiteadditional information for the Board of Directors;

– planning, managing and monitoring the companyʼs profitability, risk positions, balancesheet structure and liquidity within the guideline parameters laid down by the Boardof Directors;

– devising the business strategy, multi-year business plan and budget for the followingbusiness year, and submitting these to the Board of Directors;

– preparing and submitting proposals to the Board of Directors, particularly in relationto financing policy, investment policy, asset management policy, risk managementand sourcing and trading policy, and in other areas as and where required.

The Group Executive Board shall also ensure the subsequent detailed adoption of suchpolicies and the observance of the principles laid down in connection therewith, andshall report regularly to the Board of Directors thereon:

– implementing Board resolutions;– ensuring that all legal requirements are observed and that all applicable legal

provisions are familiar to and observed by the companyʼs employees (CorporateCompliance; the basic parameters here are laid down in the companyʼs Code ofConduct);

– the internal organisation and the internal control system;– hiring and dismissing employees;– monitoring the performance of external service providers;– preparing meetings of the Board of Directors together with its Chairman and

presenting the necessary documents;– devising proposals and requests for submission to the Board of Directors;– reporting to the Board of Directors.

The Group Executive Board is empowered to pass resolutions on all business assignedto it. The Group Executive Board may submit such business to the Board of Directorsfor approval. The provisions on which items of business must be submitted to the Boardof Directors for approval are laid down in the Organisational Regulations.

Information and controlling instruments for supervising the group ExecutiveBoardThe Management Information System (MIS) of the Kuoni Group is structured as follows:The financial statements of the individual subsidiaries are prepared on a monthly,quarterly, semi-annual and annual basis. These figures are aggregated persegment/division and consolidated for the Group. The figures are compared with theprevious year and the budget. The attainability of the budget is assessed on the basis ofquarterly reporting and forecasts. The heads of the divisions submit monthly writtenreports on the progress of business to the Group Executive Board and the Board ofDirectors. These reports are discussed with the Group Executive Board at the Board ofDirectorsʼ meetings, as are the implementation and observance of Board resolutionsand the companyʼs liquidity levels.

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Any member of the Board of Directors may demand to be informed about thecompanyʼs affairs. The CEO is responsible for informing the Board of Directors aboutthe current course of business and important business transactions occurring in thecompany and in its subsidiaries. The CEO reports to the Chairman of the Board atregular intervals. The CEO must also inform the Chairman immediately of any unusualevents, and the Chairman will in turn pass such information on to the members of theBoard.

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

The companyʼs risk management function provides an established risk model foridentifying, managing and monitoring strategic and operational risks throughout theKuoni Group. The Group-wide risk profile consists of the risks identified in the Groupʼsmain country organisations (adopting the bottom-up approach) and Group-widestrategic risks (adopting the top-down approach). The present risk profile and thecurrent status of risk-reducing measures resolved are regularly monitored and arereported twice a year to the Board of Directors.

Internal Audit complements the controlling mechanisms available to the Board ofDirectors and reports directly to the Boardʼs Audit Committee. Internal Audit supportsthe Group Executive Board in special projects as requested by the CEO or othermembers of the Group Executive Board, and in other matters. Internal Auditʼs main taskis to conduct an independent assessment of internal controls and their effectivenesswith regard to potential risks. The reports prepared by Internal Audit regarding theaudits carried out are submitted to the members of the Audit Committee, the Chairmanof the Board, the CEO, the CFO, the Head of IT, the Head of Corporate Controlling, theGroup General Counsel and the external auditor. Each report also contains commentsby the Group Executive Board regarding the key findings of the audits conducted inaddition to appointed improvements.

The Group Executive Board

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The Group Executive Board Members of the Group Executive BoardFor details of the members of the Group Executive Board, please see the respectiveoverview.

Other activities and functionsDetails of other activities and any further functions of Group Executive Board membersare provided on the company website.

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

Regulation and additional positions The members of the Executive Board shall not occupy or exercise more than fouradditional positions in other companies, thereof not more than two publicly listedcompanies and five unpaid positions in non-profit organisations.

An additional position shall be deemed to be a position in the highest managing orsupervising body of other entities that are obliged to be entered into the commercialregister or a comparable foreign register and that are neither controlled by nor thatcontrol the company. A number of positions in several different companies that formpart of the same group of companies is regarded as one position.

Additional positions that are held by a member of the Board of Directors or a memberof the Executive Board within the scope of its functions and based on the instructions ofthe company or another Group company of the Kuoni Group and of which thecompensation is passed on to the company or such Group company are not subject tothe limitation.

Members of the Group Executive Board shall only be permitted to assume Board ofDirectors mandates and public functions or to conduct other business for their own orfor othersʼ account with the approval of the Board of Directors. The approval of amandate is within the free discretion of the Board of Directors, whereby the Board ofDirectors considers in particular, whether the assumption of further mandates by therespective member of the Group Executive Board is in the interest of the Kuoni Groupor can provide a direct or indirect benefit to the Kuoni Group.

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

Compensation, shares and

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Compensation, shares andloans

Details of the compensation, shares and loans of members of the Board of Directorsand the Group Executive Board are provided in the Compensation Report.

Shareholdersʼ participation

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Shareholdersʼ participationrights

Restriction and representation of voting rights Each share entitles its holder to one vote at the General Meeting of Shareholders.When exercising the right to vote, no shareholder shall be able to vote, directly orindirectly, with more than 3% of the registered share capital entered in the CommercialRegister; this 3% includes their own shares and shares represented by proxy. Thislimitation on voting rights does not apply to the independent proxy or to shareholdersregistered in the share register as shareholders with voting rights for more than 3% ofthe registered share capital entered in the commercial register in accordance witharticles 5 paragraph 9 of the Articles of Incorporation.

Legal entities or partnerships that are interrelated through capital ownership, votingrights or uniform management or that are otherwise linked with one another, as well asindividual persons or legal entities or partnerships acting in concert for the purpose ofcircumventing the limitation on registration in the share register are regarded as onesingle shareholder for the purposes of the preceding paragraph.

The Board of Directors of Kuoni Travel Holding Ltd issues procedural rules regardingparticipation in and representation at the General Meeting of Shareholders. Ashareholder may be represented at the General Meeting of Shareholders by his legalrepresentative, by representatives acting under written proxies that need not beshareholders, or the independent proxy. All the shares held by a shareholder may berepresented by one person only.

The members of the Board of Directors of Kuoni Travel Holding Ltd who are presentat the General Meeting of Shareholders decide whether powers of attorney are to berecognised.

The vested rights of the shareholders entered in the share register on 25 February1995 (including those of their legal successors by virtue of the devolution or partition ofan estate, a matrimonial property regime or merger with or incorporation into a directlycontrolled, wholly owned holding company) remain intact. Neither do the limitationsoutlined above apply to shares which have been or will be acquired by the shareholdersentered in the share register on 25 February 1995 or their legal successors as definedabove through the exercise of subscription, warrant, option or conversion rights arisingfrom the shares entered in the share register on 25 February 1995 and any sharesderived therefrom.

Based on article 14 of the Articles of Incorporation the General Meeting ofShareholders elects an independent proxy. Private individuals, legal entities andpartnerships are eligible for election. The independent proxy must be independent infact and in appearance; article 728 para. 2–6 CO is applicable.

The term of office of the independent proxy ends with the closing of the AnnualGeneral Meeting of Shareholders following the election of the independent proxy. Re-election is admissible.

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If Kuoni Travel Holding Ltd has no independent proxy, the Board of Directors designatesan independent proxy for the next General Meeting of Shareholders. The GeneralMeeting of Shareholders may dismiss the independent proxy with effect as from theend of the General Meeting of Shareholders. The independent proxy exercises his orher duties in accordance with the applicable legal provisions.

The Board of Directors makes sure that the shareholders may give to theindependent proxy 1. instructions with respect to each motion contained in theinvitation concerning agenda items; and 2. general instructions with respect tounannounced motions to agenda items as well as to new agenda items pursuant toarticle 700 para. 3 CO.

Kuoni Travel Holding Ltd further makes sure that the shareholders may submit theirproxies and their instructions, also by electronic means, to the independent proxy at thelatest until 4 p.m. on the second working day prior to the date of the General Meeting ofShareholders. Compliance with this term is determined based on the receipt of theproxy and the instructions by the independent proxy. The Board of Directors determinesthe procedures for giving proxies and instructions by electronic means.

The independent proxy is obligated to vote the shares for which it received proxiesin accordance with the instructions given. If he or she has not received any instructionswith respect to votes, he or she abstains from voting the respective shares.

Granting a proxy to the independent proxy does not constitute a violation of thelimitation of voting rights according to Article 13 paragraph 1 of the Articles ofIncorporation and not formation of a group in the sense of paragraph 2 of thementioned provision. Each shareholder remains to be bound unconditionally to theprovisions about the limitation of voting rights, also in the case of a proxy to theindependent proxy.

If the independent proxy is not in a position to act or if Kuoni Travel Holding Ltd hasno independent proxy, the proxies and instructions given are regarded as given to theindependent proxy determined by the Board of Directors pursuant to paragraph 8.

Statutory quorums As a general principle, the General Meeting of Shareholders votes and passesresolutions by an absolute majority of the votes in favour and votes against cast(excluding abstentions). In the event of a tie, the Chairman shall have the casting vote.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 theshares represented to be passed:

– amendments to the Articles of Incorporation, including the change to the companyʼspurpose, except for the Articles in Section IV of the Articles of Incorporation. Thesearticles 25–28 can be modified by absolute majority in accordance with Article 15 ofthe Articles of Incorporation;

– the creation of shares with privileged voting rights;– limiting or relaxing the transferability of registered shares;– an authorised or conditional capital increase;– a capital increase through the conversion of capital surplus, in return for a non-cash

contribution or for the purposes of acquiring property and granting special rights;– limiting or revoking pre-emptive rights;– changes to the location of the companyʼs registered office;– the dissolution of the company through liquidation or by merger.

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Voting on resolutions and elections shall be made electronically unless the Chairmanorders otherwise. Electronic elections and resolutions shall be legally on a par withwritten resolutions and elections.

Convening the annual general meeting of shareholdersThe General Meeting of Shareholders is convened in accordance with the relevantlegal requirements. The Annual General Meeting of Shareholders is generallyconvened in April and must be held within six months of the end of the financial year towhich it relates. An Extraordinary General Meeting of Shareholders can be convened ifnecessary by the Board of Directors or the external auditors. The convention of anExtraordinary General Meeting of Shareholders may also be demanded byshareholders representing at least 3% of share capital, provided this is done jointly andin writing stating the items to be discussed and the corresponding proposals or, in theevent of elections, the names of the candidates proposed.

The Meeting is convened by a single announcement in the official publication.Registered shareholders may also be informed in writing. No later than 20 days beforethe Annual General Meeting of Shareholders the Annual Business Report and theAuditorsʼ Report as well as the Compensation Report including the examination reportby the auditors are made available for inspection by the shareholders at the registeredoffice of the company. Shareholders shall be informed in writing of their right ofinspection in the convening notice. The agenda is also published in various Swissnewspapers and on the Kuoni Group website.

AgendaShareholders representing shares with a nominal value of CHF 20 000 or more candemand that an item be included on the agenda of a General Meeting of Shareholdersup to 30 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 ispublished on the website.

Entry in the share register All shareholders entered in the share register as shareholders with voting rights up tothree working days before a General Meeting of Shareholders may vote at the meetingconcerned. Shareholders who sell their shares before the General Meeting ofShareholders takes place are no longer entitled to vote. Shareholders who buyadditional shares or sell part of their shareholding after their meeting admission cardhas been issued must exchange the card sent to them at the information desk onarriving at the meeting concerned.

Changes of control and defence

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Changes of control and defencemeasures

Duty to make an offer There are no opting-up or opting-out clauses in the Articles of Incorporation of KuoniTravel Holding Ltd. In view of this, any person owning more than one-third of the votingrights of Kuoni Travel Holding Ltd must make an offer for all the companyʼs listedshares.

Change-of-control clauses The following change-of-control clauses apply:

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

Members of the Group Executive Board and Group-wide senior managementIn the event of a change of control, the current three-year vesting period under therelevant long-term incentive plans shall end immediately and the corresponding sharesshall be assigned. Apart from this, there are no change-of-control clauses in anyagreements or plans to the benefit of members of the Group Executive Board or Group-wide Senior Management.

BondholdersIn the event of a change of control, bondholders are entitled to demand the prematurerepayment of their bond amount.

Syndicated credit facility lenders In the event of a change of control, the banks participating in the syndicated creditfacility are entitled to demand the premature repayment of any current loan amountsthereunder and/or to terminate the facility.

Auditors

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Auditors Duration of mandate and term of office of the auditor-in-chargeThe 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. Theauditor-in-charge, Martin Schaad, has been in office since April 2009. The auditor-in-charge is changed at least every seven years.

Audit feesKPMG charged the Kuoni Group fees amounting to CHF 1.7 million during the 2015financial year for services in connection with the auditing of the annual accounts ofKuoni Travel Holding Ltd and its Group subsidiaries, as well as the consolidatedfinancial statements of the Kuoni Group. An additional CHF 0.4 million was charged byother audit companies.

Additional feesKPMG also charged the Kuoni Group fees totalling CHF 0.1 million for additionalservices, i. e. accountancy and tax compliance. No other significant fees were chargedby other audit companies for any other services.

Supervisory and controlling instruments with regard to the external auditorsEach year, the Audit Committee of the Board of Directors evaluates the performance,remuneration and independence of the statutory auditor and proposes an externalauditor to the Board of Directors who will be put forward for election at the GeneralMeeting of Shareholders. The Audit Committee also annually examines the scope ofexternal auditing, the auditing plans and the relevant processes, and discusses the auditresults with the external auditors. Representatives of the external auditors alsoregularly attend Audit Committee meetings, and attended all such meetings in 2014.

Information policy

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Information policy Kuoni Travel Holding Ltd maintains an open and transparent communication policytowards its shareholders, current and potential investors, financial analysts, customers,business partners and other stakeholder groups. Kuoni Travel Holding Ltd providesprompt and comprehensive information on the Groupʼs business activities, while payingdue and full regard to all the applicable provisions and directives of the SIX SwissExchange. In its endeavours to present details of its business development to itsstakeholders, Kuoni Travel Holding Ltd also makes forward-looking statements. Thesestatements are assessments by the management about the present and future situationand performance of the company as they appear at the time the statement is made.

Key dates for 2016

Financial year close: 31 December 2015

2015 annual results published: 15 March

Annual Report published: 15 March

General Meeting of Shareholders: to be determined

Dividend paid to banks (value date): no dividend

First half-year close: 30 June

Half-year results announced: 19 August

Nine-month business update announced: 10 November

1 In view of the public tender offer for the B shares of Kuoni Travel Holding Ltd.

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 companyʼs annualresults. The Annual Report of 2015 is the first one to be published in an online versiononly. Of particular importance are the Corporate Governance Report integrated into theAnnual Report and the Financial Report on the past business year. All of Kuoniʼsconsolidated financial statements are compiled in compliance with InternationalFinancial Reporting Standards (IFRS).

The reports on half-year results and the nine-month business update are published anddistributed in the same way as the companyʼs media releases. These reports containunaudited financial results which are compiled in compliance with IFRS guidelines.

Kuoni Travel Holding Ltd occasionally publishes information on currentdevelopments within its various business units or on other Group activities. Incompliance with the relevant listing regulations of the SIX Swiss Exchange, thesecommunications are always issued simultaneously to a broad circle of recipients.

An archive containing the companyʼs Annual Reports, half-year reports, nine-monthbusiness updates and further information and presentations is available on the website.Kuoni Travel Holding Ltd also maintains an archive of all its published ad-hocdisclosures and other communications on the website. All this information is publiclyavailable. Interested parties may also register on the website to receive ad-hocdisclosures and other published communications by e-mail.

The information contained in these reports and communications is consideredcorrect at the time of its publication. Kuoni Travel Holding Ltd does not update mediareleases issued in the past in the light of subsequent market or business developments.

As part of its investor relations function, Kuoni Travel Holding Ltd organises:

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– the presentation of its annual results;– conference calls around the publication of its half-year results, the nine-month

business update or other information;– meetings with investors and analysts, either individually or in groups at roadshows in

key financial centres;– analystsʼ and investorsʼ events on specific topics or issues;– presentations at brokersʼ/banksʼ events.

These activities are conducted with a focus on recently announced developments orfinancial results, and in full compliance with SIX Exchange Regulationʼs Directive on ad-hoc publicity.

The presentations for financial analysts and investors are regularly archived on theKuoni Group website. These presentations are not constantly updated, but documentlong-term developments within the company.

Details of the relevant contacts and the Kuoni Investor Relations mailbox areavailable on the website. Interested parties may also add their name to the InvestorRelations e-mail list on the website.

Subject Link

Share capital and capital structure www.kuoni.com/investor-relations/share/share-capital-structure

Information on Kuoni’s shares http://www.kuoni.com/investor-relations/share/facts-per-share

Board of Directors http://www.kuoni.com/group/organisation/board-of-directors

Group Executive Board http://www.kuoni.com/group/organisation/group-executive-board

Organisational Regulations https://www.kuoni.com/docs/organizational_regulations_2016_0.pdf

Corporate governance (including Compensation Report) http://www.kuoni.com/corporate-governance

Key dates http://www.kuoni.com/investor-relations/financial-calendar

Compensation Report

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Compensation ReportIntroductionThe Kuoni Group constantly strives to recruit, motivate and retain the best professionalsand executives to ensure the Companyʼs continued success. Kuoni Groupʼscompensation policy is an integral part of its strategy and has been designed so that allemployees are motivated to put the Company in a position to outperform itscompetitors and create value for shareholders over the long term.

This Compensation Report provides a summary of the compensation structure andamounts paid to the Group Executive Board (GEB) and the Board of Directors (BoD) andwill be put to a consultative vote at the 2016 Annual General Meeting. ThisCompensation Report contains all information required under the Swiss Code ofObligations (Article 663b bis and Article 663c, Paragraph 3) and Section 5.1 of theAnnex to the Corporate Governance Directive issued by SIX Exchange Regulation. TheKuoni Group has also observed the Swiss Code of Best Practice issued byeconomiesuisse, the umbrella association for Swiss business and industry.

Compensation governanceThe Compensation Committee (CC) of the BoD consists of two to five independentmembers. The current members are Adrianus (Adriaan) Nühn, Jae Hyun (Jay) Lee andAnnette Schömmel. All members of the CC are suitably experienced and familiar withregulatory requirements, compensation practices and trends. The CC has its ownregulations, which have been approved by the BoD. They meet at least three times ayear. Additional meetings can also be convened at any time. In 2015, the Chairman ofthe BoD attended all CC meetings.

The main duty of the CC is to prepare and monitor the implementation of thecompensation policy for the GEB and BoD, to ensure they are compensated fairly,appropriately and competitively in keeping with the strategic goals of the Kuoni Groupand the long-term interests of the shareholders.

The CC annually reviews the structure and the amounts of compensation to be paid tomembers of the GEB and BoD and recommends modifications to the full BoD forapproval. This includes (but is not limited to) reviewing basic salaries and benefits,performance-based short-term compensation and share purchase plans. The CC isalso responsible for issuing the Compensation Report.

GEB members do not participate in the determination of their own compensation.The Chief Executive Officer (CEO) is, however, consulted on the compensationproposed for the other GEB members.

Recommendations regarding compensation for the BoD must comply with theCompanyʼs regulations and be approved by all the members of the BoD. In any vote onthe compensation to be paid to a particular member of the BoD, the Board memberconcerned must observe the relevant general withdrawal/abstention procedures.

The CC utilises independent external consultants when required. Externalconsultants are generally utilised to benchmark compensation and assist with thedesign of compensation plans. In 2015, Mercer and PricewaterhouseCoopers providedbenchmark data for the GEB and BoD respectively.

The Target Setting Committee (TSC) consists of the Chairman of the BoD, theChairman of the CC and the Chairman of the Audit Committee (AC). The duties of theTSC are to assess and propose the long-term incentive performance targets for thelong-term incentive plan annually.

The table below summarises the roles of the CC, TSC, BoD and certain members ofthe GEB in proposing and approving compensation for the GEB and BoD

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Proposed Consulted Approved

Decisions on payout levels

Basic salary and deferred fixed compensation for the GEB CC CEO BoD

Target payout level for short-term incentives for the GEB CC CEO BoD

Target payout level for long-term incentives for the GEB CC CEO BoD

Compensation for the BoD CC BoD

Decisions on performance targets

Short-term incentive performance targets for the GEB (excl. CEO) CEO CC BoD

Short-term incentive performance targets for the CEO Chairman of the BoD CC BoD

Long-term incentive performance targets for the GEB (incl. CEO) TSC CEO, CFO BoD

1 In accordance with the general withdrawal / abstention procedures.

Key changes implemented during 2015Apart from the changes to the Swiss pension fund system described below, thecompensation system for the GEB did not change in 2015. Other changes, such as thenew composition of the GEB, are also outlined below.

Swiss pension schemeThe Kuoni Group has modified the supplementary pension plan, which offers employeesin Switzerland at management level or higher retirement and risk benefits in addition tothe pension schemeʼs basic pension plan. From January 2015, the short-term incentivetarget instead of the basic salary is insured. With this change, the benefits under thepension plans are better aligned to the compensation earned by the insured. Althoughtotal employer contributions remain unchanged for all employees insured under thepension plan, the change to the insured basis means that these contributions are higherin specific instances under the new plan.

Composition of the Group Executive BoardThe employment relationship with the CEO of the Kuoni Group, Peter Meier, wasterminated in November 2015. His employment contract with the Kuoni Group will endas per the contractual notice period on 30 November 2016.

The BoD appointed Zubin Karkaria as Chief Executive Officer (CEO) of the KuoniGroup with effect from 5 November 2015. Zubin Karkaria will remain directlyresponsible for the VFS Global Division, which he headed as CEO until this date. Thecompensation package for his function was benchmarked against similar functions ininternational companies of similar size to Kuoni and adjusted accordingly.

The employment relationship with the CFO of the Kuoni Group, Thomas Peyer, wasterminated in August 2015. His employment contract with the Kuoni Group will end asper the contractual notice period on 31 August 2016.

The BoD appointed Dr Prisca Havranek-Kosicek as the new Chief Financial Officer(CFO) of the Kuoni Group. She will take up her new function on 1 March 2016.

1

1

1

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Key changes expected during 2016Following the benchmark comparison of the compensation of the BoD carried out byPricewaterhouseCoopers in October 2015, the BoD decided to reduce the totalcompensation by around 38% for the period after the General Meeting. This adjustmentto the compensation also takes account of the Groupʼs new size following the sale ofthe tour operating business.

At its meeting in December 2015, the BoD decided to discontinue the restrictedshare plan (RSP) for members of the GEB from 31 March 2016 and for the seniormanagement (Senior Vice President/Vice President) from 31 March 2017. Themembers of the GEB will therefore no longer be granted any new shares from this planfor the 2016 financial year. The full individual component of this compensation featurewill be divided between the short-term incentive (STI) and the performance share plan(PSP). This is meant to improve the alignment between the interests of the employeesand those of the shareholders.

Compensation principles

Kuoni Groupʼs compensation approach is based on the following principles:

– Alignment of interests: Rewarding employees for their contribution to the futuredevelopment of the Kuoni Group in performance and profitability terms, therebyensuring that employee and shareholder interests are aligned.

– External competitiveness: Compensation should be comparable to compensation atcompanies of a similar size and complexity, enabling Kuoni Group to recruit, motivateand retain professionals who are essential to the Companyʼs continued success.

– internal consistency: Compensation should reflect the impact, communicationrequirements, innovation and knowledge level of the relevant position. Kuoni Groupuses Mercerʼs International Position Evaluation (IPE) system to carry out thisassessment.

Compensation principles for the Group Executive BoardTotal compensation for GEB members consists of a fixed component and aperformance-based component. The fixed component is comprised of basic salary,benefits and deferred compensation (in the form of restricted shares). Theperformance-based component is comprised of a short-term incentive and a long-termincentive (in the form of performance-based shares). The chart below illustrates thegeneral compensation mix for GEB members in 2015 and outlines the split betweencash and share-based compensation.

Compensation mix for the GEB in 2015

The table below provides an overview of the GEB compensation components in 2015.

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Deferred compensation Short-term incentive Long-term incentive

Participants GEB GEB GEB

PurposeTo link compensation to shareholder value

creation and retain key talentTo reward for the achievement of annual

targetsTo reward for significantly impacting long-

term company performance

Grants Annual grant Annual grant Annual grant

VestingVests in 3 equal tranches over a period of 3

years Annually Vests after 3 years

Conditions for vesting Continued employmentAchievement of Group EBIT / Divisional

EBIT and personal targetsAchievement of free cash flow and turnover

targets

General target as a % of basic salary 40% 50% 60%

Payout Shares Cash Shares

1 Other participants include members of the senior management, i.e. Senior Vice Presidents/Vice Presidents (approximately 80 participants). For these participants, differentconditions under each plan may apply.

2 Other participants include the members of the senior management, i.e. Senior Vice Presidents (approximately 20 participants). For these participants, different conditions underthe plan may apply.

Compensation principles for the Board of DirectorsTotal compensation for the BoD consists of fixed compensation and social securitycontributions in accordance with the respective Swiss regulations. BoD membersreceive a portion of their fixed compensation in cash and a portion in shares, which areblocked for a period of three years.

Compensation of the Group Executive BoardThe compensation of the GEB is periodically benchmarked to ensure thatcompensation is comparable and competitive relative to the market. Compensation, interms of both structure and levels, is benchmarked against comparable roles ininternational and Swiss companies of a similar size and complexity, which can be in allsectors.

Kuoni Groupʼs policy is to position GEB compensation at the market median. GEBmembers have the opportunity to be rewarded for sustained outperformance under theCompanyʼs share-based incentive systems to an extent commensurate to the level oftheir outperformance.

The benchmarking of GEB membersʼ compensation is carried out by independentexternal consultants. During 2015, Mercer was commissioned to benchmark thecompensation level against comparable roles in international corporations of a similarsize. The benchmarking confirmed that the compensation of the GEB members islargely competitive in the market.

The GEB compensation components for 2015 are summarised below.

Basic salaryBasic salary levels for GEB members are proposed by the CC and approved by the BoD.When considering changes to basic salary levels, benchmarking data as well as theindividualʼs performance during the previous year are taken into account.

1 1 2

individualʼs performance during the previous year are taken into account.

Deferred compensationIn 2015, GEB members were granted deferred compensation under the RestrictedShare Plan (RSP) 2015 as part of the fixed component of their total compensation. Thedeferred compensation links executive compensation to shareholder value creationand supports the retention of GEB members. There was no increase in the total value ofthis compensation element in 2015.

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The restricted shares awarded to GEB members in April 2015 represent apercentage of their basic salary. The value of the restricted shares granted is generallyequivalent to 40% of the basic salary, calculated on the basis of the volume-weightedaverage price of shares from mid-February to mid-March prior to allocation of theshares. The shares are restricted for three years: a third of the shares are convertedinto Kuoni shares after one year, the next third after two years and the final third afterthe third year. The payout value of the compensation is based on the share price at thetime of conversion, thereby linking this portion of compensation to shareholder valuecreation and the development of Kuoniʼs share price.

2015 Restricted Share Plan: Example*

The Kuoni Group uses treasury shares or shares bought at market price on the openmarket to grant shares to the employees participating in the plan. This does not dilutethe value of the shares of existing shareholders.

Under a clawback clause, the BoD may determine that some or all of a GEBmemberʼs restricted shares should be forfeited in certain circumstances, such aswhere the executive has failed to comply with the Kuoni Groupʼs Code of Conduct orcaused or contributed to the need for a material restatement of financial results. Thiscompensation component therefore remains recoverable for an extended period,thereby further strengthening the sustainability of the compensation system.

Upon termination by the employer (for good cause) or termination by the employee,unvested shares lapse. In other cases, for example ordinary termination by theemployer, death, disability or retirement, allocations which have not yet vested arepartially converted based on the relevant length of service.

Short-Term IncentiveThe short-term incentive plan is designed to reward GEB members for the achievementof annual performance measures that are specific, quantifiable and challenging. Theperformance measures for all GEB members include financial targets at Group andDivisional level plus strategic targets aimed at promoting growth and the developmentof consumer-oriented and innovative approaches. Other agreed targets relate toKuoniʼs transformational objectives, people and talent development targets andstakeholder targets that are specific to key markets and the individualʼs role. The mix oftargets is appropriate for Kuoniʼs business model, which must be tailored to consumerand market influences, and are aligned with the Groupʼs business strategy and annualtargets for 2015.

All performance measures and targets were predefined in advance and there wasno discretion involved when determining payouts under the 2015 short-term incentiveplan. The performance measures and their respective weightings are as follows:

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Performance measure Weighting Possible payout

Financial goals (EBIT compared to Budget):Group CEO and Group CFODivisional CEOs

75% Group50% Group and 25% Divisional Between 0% and 200% of target

Personal targets related to: Strategy Transformation People Stakeholders 25% Between 0% and 120% of target

The general short-term incentive opportunity for each GEB member is outlined in thediagram below. Each GEB memberʼs target short-term incentive is generally equivalentto 50% of basic salary. Underperformance can result in a lower payout, or none at all, ifperformance is below a certain threshold. Outperformance can result in a greaterpayout, up to a maximum of 90% of basic salary.

In 2015, the EBIT targets of the Kuoni Group, the Global Travel Distribution Division andVFS Global were exceeded. The Global Travel Services Division has not met itsfinancial target. Personal performance on average fell short of the target.

As a result, Peter Meier received 116% of the target payout and the other GEBmembers an average payment of 109% of the targeted amount. This corresponds to69% of the basic salary for Peter Meier and 50% for the other GEB members. Theshort-term incentive relating to the 2015 financial year will be paid to each GEBmember in cash in 2016.

Long-Term IncentiveIn 2015, the GEB members received allocations under the Performance Share Plan(PSP) 2015. The PSP is designed to reward the GEB for its contribution to theCompanyʼs long-term success and the creation of shareholder value.

In April 2015, GEB members were allocated performance-based restricted shareslinked to a percentage of their basic salary. This target percentage came to 60% of theoverall basic salary. The calculation of the restricted awards was made on the basis ofthe volume-weighted average price of shares from mid-February to mid-March prior toallocation of the shares. The performance shares will vest based on the extent to whichthe performance targets are actually achieved after a three-year period.

The performance measures and the weightings that apply to the 2015 allocations areas follows:

– Free cash flow – weighting of 2/3 of the performance targets– Turnover – weighting of 1/3 of the performance targets

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These performance measures are designed to align the long-term incentive with theKuoni Groupʼs business strategy. Each performance measure has a threshold, target,stretch and maximum achievement level that is set by the TSC.

These levels are set stringently and are designed to reward outstandingperformance. Based on the achievement of the performance measures, the actualnumber of shares that vest at the end of the three-year performance period is between0 and a maximum of 2.5 times the number of performance shares initially granted.

Performance Share Plan: Example

The BoD may determine under a clawback policy, that some or all of a GEB memberʼsperformance-based restricted shares should be forfeited in certain circumstances,such as where the executive has failed to comply with the Kuoni Group Code ofConduct or caused or contributed to the need for a material restatement of financialresults.

This compensation component therefore remains recoverable for an extendedperiod after the allocation, thereby further strengthening the sustainability of thecompensation system.

Upon termination by the employer (for good cause) or termination by the employee,unvested performance-based shares will lapse. In other cases, for example ordinarytermination by the employer, death, disability or retirement, allocations which have notyet vested are partially converted based on the relevant length of service.

There are different ongoing performance share plans with the followingperformance measures and performance factors:

Award year Performace measures Measuring/vesting period Payout performance factor

2015 PSP Free cash flow, Turnover Three years0.0-2.5 times the number of shares initially

granted


granted


granted

The Kuoni Group uses treasury shares or shares bought at market price on the openmarket to grant shares to the employees participating in the plan. This does not dilutethe value of the shares of existing shareholders.

The following table provides an overview of the total value of the restricted sharesallocated to GEB members from 2009 to 2012, the performance factors achieved afterthree years, the value of the shares at time of vesting and the relevant share prices.

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CHF 1'000Performance

factor appliedShare value at

grant Share price at

grant

Value of sharesallocated on

vesting Share price at

vesting

2012 PSP grant / 2015 PSP vesting 1.2 3,227 CHF 273 4,534 CHF 319.5

2011 PSP grant / 2014 PSP vesting 0.8 3,680 CHF 410 2,850 CHF 397

2010 PSP grant / 2013 PSP vesting 0.5 2,441 CHF 272 1,567 CHF 297

2009 PSP grant / 2012 PSP vesting 1.0 2,133 CHF 272 2,600 CHF 331.5

1 These values differ from the allocation values disclosed in the 2009, 2010, 2011 and 2012 Annual Reports, as the 16% discount in view of the shares' restricted availability at thetime of allocation is no longer applied.

2 This value reflects allocated shares and includes lapsed share awards following the departure of a GEB member from the Company.

3 For one GEB member a performance factor of 1.0 has been applied according to the applicable exit rules.

Pension paymentsThe Kuoni Group has various forms of retirement benefit schemes that cover a largemajority of the Companyʼs personnel according to the local regulations in each country.GEB members receive pension benefits.

Compensation to the Group Executive BoardThe tables in this section provide an overview of the total compensation of the GEB in2014 and 2015, including basic salary, short-term incentive compensation for therespective financial year (paid out in April of the following year) and pension benefits.The value upon allocation from the RSP and PSP is also listed. It was calculated on thebasis of the volume-weighted average price of shares from mid-February to mid-March prior to allocation of the shares.

The aggregate compensation of the GEB in 2015 amounted to CHF 11.8 million (2014:CHF 9.6 million). CEO Peter Meier was the GEB member with the highest totalcompensation in both 2015 and 2014 (aggregate compensation of CHF 3.0 million in2015 and CHF 2.5 million in 2014).

2015CHF 1'000

Group ExecutiveBoard

Of which: PeterMeier (CEO)

Basic salary 4,103 944

Short-term incentive 2,300 654

Shares Award (RSP) 1,291 392

Shares Award (PSP) 2,106 548

Pension scheme contributions 1,104 329

Social security contributions 595 170

Other compensation amounts 293 6

Total 11,792 3,043

2014CHF 1'000

Group ExecutiveBoard

Of which: PeterMeier (CEO)

Basic salary 3,653 944

Short-term incentive 830 178

Shares Award (RSP) 1,273 392

Shares Award (PSP) 1,866 548

Pension scheme contributions 993 268

Social security contributions 541 140

Other compensation amounts 399 6

Total 9,555 2,476

1 2

3

1 2

3

4

5

6

7

8

5

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1 Five members. Peter Meier left the GEB in November 2015. His compensation until the end of 2015 is included in the figures. Zubin Karkaria was appointed to the KuoniGroup CEO in November 2015. The compensation increase paid to him from the day of his appointment to the GEB up to the end of 2015 is therefore included in the figures.Ivan Walter was appointed to the GEB in January 2015. The compensation paid to him from the day of his appointment to the GEB up to the end of 2015 is therefore includedin the figures. The figures also include the contractual compensation of Stefan Leser up to the end of his employment contract in November 2015.

2 Amounts owed to former GEB members are outlined in the “Description of termination arrangements for Group Executive Board members” of this report.

3 Members of the GEB were granted a total of 3 833 shares under the RSP in 2015. The shares were assigned a market value of CHF 336.72, which corresponds to the volume-weighted average value of the shares from mid-February to mid-March 2015.

4 Members of the GEB were granted a total of 6 255 shares under the PSP in 2015. The shares were assigned a market value of CHF 336.72, which corresponds to the volume-weighted average value of the shares from mid-February to mid-March 2015.

5 Allowances and other benefits including compensation in connection with company car entitlements.

6 Five members7 Members of the GEB were granted a total of 3 336 shares under the RSP in 2013. The shares were assigned a market value of CHF381.45, which corresponds to the volume-

weighted average value of the shares from mid-February to mid-March 2014.

8 Members of the GEB were granted a total of 4 892 shares under the PSP in 2013. The shares were assigned a market value of CHF 381.45. The market value corresponds tothe volume-weighted average value of the shares from mid-February to mid-March 2014.

Contractual termination clauses of Group Executive Board membersEmployment contracts for GEB members contain a notice period of 12 months. Thereis no entitlement to severance payments.

No additional compensation or benefits are provided in the event of a change ofcorporate control. Special rules apply for vesting equity-based compensation if there isa change of control, such that allocations will not vest at a rate greater than 100% ofthe original allocation.

Description of termination arrangements for Group Executive Board membersPeter Meierʼs employment relationship with the Kuoni Group was terminated inNovember 2015. His employment contract ends on 30 November 2016. The terms ofMr Meierʼs contract include a twelve-month notice period, during which a non-competition clause applies with no extra compensation. In addition to the amountsshown in the compensation table above, Mr Meier shall receive the following benefitsin accordance with his employment contract:

– Basic salary of CHF 80 192 paid monthly from January to November 2016 and othercompensation amounts (allowances and other benefits including compensation inrelation to company car entitlements), in total CHF 917 612.

– Payment of the short-term incentive for the period from January to November 2016.The amount is calculated based on the prorated target value for this period and theaverage payout ratio of the last three years, which equals an amount of CHF 438 000.

– Grants under the PSP in 2013, 2014 and 2015 will be exchanged for shares as per therespective plan rules for 2016, 2017 and 2018.

– Grants under the RSP in 2013, 2014 and 2015 will be exchanged for shares as per therespective plan rules.

Thomas Peyerʼs employment relationship with the Kuoni Group was terminated inAugust 2015. His employment contract ends on 31 August 2016. The terms of MrPeyerʼs contract include a twelve-month notice period, during which a non-competitionclause applies with no extra compensation. In addition to the amounts shown in thecompensation table above, Mr Peyer shall receive the following benefits in accordancewith his employment contract:

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– Basic salary of CHF 46 667 paid monthly from January to August 2016 and othercompensation amounts (allowances and other benefits including compensation inrelation to company car entitlements), in total CHF 408 336.

– Payment of the short-term incentive for the period from January to August 2016. Theamount is calculated based on the prorated target value for this period and theaverage payout ratio of the last three years, which equals an amount of CHF 157 000.

– Grants under the PSP in 2013, 2014 and 2015 will be exchanged for shares as per therespective plan rules for 2016, 2017 and 2018.

– Grants under the RSP in 2013, 2014 and 2015 will be exchanged for shares as per therespective plan rules.

Other Group Executive Board compensation, fees and loans as well as personsassociated with them

No other compensation or fees were accrued for or paid to any current or formermember of the GEB during 2015. As at 31 December 2015, the Kuoni Group had notgranted any collateral, loans, advances or credits to Executive Board members or topersons associated with them, nor are there any outstanding. Furthermore, nocompensation was granted to persons associated with Group Executive Boardmembers that was not comparable and competitive to the market. No options wereallocated during the year under review.

Compensation of Board of DirectorsCompensation of members of the BoD consists of fixed compensation and socialsecurity contributions in accordance with Swiss regulations.

Half of the fixed compensation is paid in cash, and half in shares, which are subjectto a three-year blocking period. The issue price of the shares concerned is determinedagain each year and corresponds to the final share price on the trading day before thegrant date. The shares are allocated one day after the distribution of the dividend.

The members of the BoD are also entitled to travel concessions, which primarilycorrespond to those for employees in Switzerland.

The amount per Board member and role is specified in the “CompensationElements of the Board of Directors of Kuoni Travel Holding” regulations of 20 August2014. The respective compensation of the individual functions on the BoD is outlined inthe table below (actual compensation paid differs, for example, due to mandatory socialsecurity contribution calculations).

CHF 1'000

Totalcompensation

(net)

Role

Chairman of the Board of Directors 500

Chairman of the Audit Committee 250

Chairman of the Nomination Committee 100

Chairman of the Compensation Committee 100

Member of the Board of Directors 150

1 Under the assumption that the Nomination and the Compensation Committee is headed by the same person.

The compensation of Kuoni Groupʼs BoD is periodically benchmarked to ensure thatcompensation is comparable and competitive relative to the market. In 2015,PricewaterhouseCoopers was commissioned to conduct a comparison and analysis ofthe structure and amount of the compensation of the BoD. The compensation awardedto members of the BoD is confirmed annually by the BoD.

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The aggregate compensation of the BoD members in 2015 amounted to CHF 1.7million (2014: CHF 1.7 million). The Board member with the highest compensation inboth 2015 and 2014 was the Chairman Heinz Karrer (CHF 0.6 million in 2015 and CHF0.6 million in 2014).

Fixedcompensation net

(cash)

Fixedcompensation net

(shares) Social security

contributions Total

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

2015

Heinz Karrer, Chairman 250 250 806 60 560

Jae Hyun (Jay) Lee 75 75 242 19 169

John Lindquist 75 75 242 15 165

Selina Neri 75 75 242 19 169

Adrianus (Adriaan) Nühn 100 100 323 25 225

David Schnell 125 125 403 25 275

Annette Schömmel 75 75 242 19 169

Total 775 775 2,500 182 1,732

2014

Heinz Karrer, Chairman 250 250 625 60 560

Jae Hyun (Jay) Lee 75 75 188 19 169

John Lindquist 75 75 188 19 169

Adrianus (Adriaan) Nühn 100 100 250 25 225

David Schnell 125 125 313 28 278

Annette Schömmel 75 75 188 19 169

Raymond D. Webster 75 75 188 14 164

Total 775 775 1,940 184 1,734

1 These shares were valued at a market price of CHF 310.5 (2014: CHF 400.4). This corresponds to the average share price of the last ten trading days in March 2014. Further,the values shown in the table do not include any accrued value for allocations made and reported in previous financial years.

2 The social security contributions in the table include both employer and employee contributions.3 In March 2014, the BoD decided to distribute the fixed compensation component, which is normally paid out in January following the Annual General Meeting of

Shareholders, henceforth in December following the Annual General Meeting of Shareholders. As a result, the members of the BoD received their fixed compensation for theperiod AGM 2013 to AGM 2014 (distributed in January 2014) as well as their compensation for the period AGM 2014 to AGM 2015 (distributed in December 2014). Thecompensation paid in January 2014 totalling CHF 0.865 million and the corresponding employee and employer contributions of CHF 0.1 million are not included in the table.

4 Elected Chairman at the Annual General Meeting of 25 April 2014.5 Appointed Chairman of the Nomination and the Compensation Committee on 25 April 2014.

Other Board of Directors compensation, fees and loans as well as persons associatedwith them

No compensation was paid in 2015 to any member of the BoD who had left in the priorperiod or earlier. As at 31 December 2015, the Kuoni Group had not granted anycollateral, loans, advances or credits to members of the BoD or to persons associatedwith them, nor are there any outstanding. Furthermore, no compensation was grantedto persons associated with members of the BoD that was not comparable andcompetitive to the market. No options were allocated in the year under review.

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Ownership of sharesGroup Executive BoardAs at 31 December 2015, the members of the GEB held Kuoni shares and theconditional right to receive shares under deferred compensation and/or long-termincentive plans, as shown in the table below. The total number of shares held amountsto less than 0.5% of Kuoniʼs total shares outstanding. The total number of unvestedshares held amounts to less than 1.0% of Kuoniʼs total shares outstanding (assumingGEB members receive their target amount of shares under the PSP and RSP).

No other equity instruments are held by GEB members other than those outlined inthe table below.

Unvested as at 31 Dec 2015

Total number

of shares held Voting rights

Performanceshares

conditionallygranted underthe 2013 PSP

Restrictedshares

conditionallygranted underthe 2013 RSP

Performanceshares


Restrictedshares


Performanceshares


Restrictedshares


As at 31 Dec 2015

Peter Meier 1,000 0.03% 1,790 422 1,437 685 1,628 1,165

Zubin Karkaria 2,655 0.07% 903 193 720 319 1,304 444

Stefan Leser n.a. n.a. 1,286 0 974 435 0 0

Thomas Peyer 1,000 0.03% 176 67 787 350 995 669

Rolf Schafroth 3,308 0.08% 1,286 287 974 434 1,104 739

Ivan Walter 800 0.02% 311 69 551 257 1,224 816

Total 8,763 0.23% 5,752 1,038 5,443 2,480 6,255 3,833


Total number


Performanceshares


Performanceshares


Restrictedshares


Performanceshares


Restrictedshares


As at 31 Dec 2014

Peter Meier 2,202 0.04% 2,491 1,790 843 1,437 1,028

Zubin Karkaria 2,284 0.05% 764 903 387 720 479

Leif Vase Larsen n.a. n.a. 1,346 0 0 0 0

Stefan Leser 1,000 0.02% 2,271 1,286 287 974 652

Thomas Peyer 361 0.01% 330 176 135 787 525

Peter Rothwell n.a. n.a. 3,443 1,898 0 0 0

Rolf Schafroth 1,277 0.03% 2,271 1,286 574 974 652

Total 7,124 0.15% 12,916 7,339 2,226 4,892 3,336

1 Member of the GEB who left the Company during 2015.2 Appointed to CEO Kuoni Group in November 2015.

3 Member of the GEB who left the Company during 2014.4 New member of the GEB since January 2015

5 Member of the GEB who left the Company during 2013.6 New member of the GEB since 2014. The 2014 number shows the full-year allocation.

Board of DirectorsAs at 31 December 2015, the Chairman and other members of the BoD held 11 713Kuoni shares. This amounts to less than 0.5% of Kuoniʼs total shares outstanding.

The table below shows the number of Kuoni shares held by each member of theBoD. No party related to a member of the Board held any Kuoni shares. In case of achange of control, all blocking periods will be suspended. No other share instrumentsare held by members of the BoD other than those outlined in the table below.

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Total number of shares Blocking periods for total number of shares held

As at 31 Dec

2015 Voting rightsAs at 31 Dec

2014 Voting rights UnblockedBlocking

period 2016Blocking

period 2017Blocking

period 2018

Heinz Karrer, Chairman 3,349 0.08% 2,543 0.05% 1,514 404 625 806

Jae Hyun (Jay) Lee 921 0.02% 679 0.01% 227 264 188 242

John Lindquist 1,280 0.03% 1,038 0.02% 586 264 188 242

Selina Neri 242 0.00% 0 0.00% 0 n.a. n.a. 242

Adrianus (Adriaan) Nühn 1,064 0.03% 741 0.01% 227 264 250 323

David Schnell 3,210 0.08% 2,807 0.06% 2,055 439 313 403

Annette Schömmel 1,647 0.04% 1,405 0.03% 953 264 188 242

Raymond D. Webster n.a. n.a. 2,025 0.04% n.a. 264 188 n.a.

Total 11,713 0.28% 11,238 0.22% 5,562 2,163 1,940 2,500

1 Elected Chairman of the BoD at the Annual General Meeting in April 2014.

2 Elected member of the BoD at the Annual General Meeting in April 2015.3 Was member of the BoD until the Annual General Meeting in April 2015

Report of the Statutory Auditor

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Report of the Statutory AuditorReport of the Statutory Auditor to the General Meeting of Shareholders of Kuoni TravelHolding Ltd., Zurich.

Report of the statutory auditor on the remuneration reportWe have audited the remuneration report dated 8 March 2016 of Kuoni Travel HoldingLtd. for the year ended 31 December 2015. The audit was limited to the informationaccording to articles 14 – 16 of the Ordinance against Excessive compensation in StockExchange Listed Companies contained in the sections of the compensation reportmarked blue.

Responsibility of the Board of DirectorsThe Board of Directors is responsible for the preparation and overall fair presentationof the remuneration report in accordance with Swiss law and the Ordinance againstExcessive compensation in Stock Exchange Listed Companies (Ordinance). The Boardof Directors is also responsible for designing the remuneration system and definingindividual remuneration packages.

Auditorʼs ResponsibilityOur responsibility is to express an opinion on the accompanying remuneration report.We conducted our audit in accordance with Swiss Auditing Standards. Thosestandards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the remuneration report complieswith Swiss law and articles 14 – 16 of the Ordinance.

An audit involves performing procedures to obtain audit evidence on thedisclosures made in the remuneration report with regard to compensation, loans andcredits in accordance with articles 14 – 16 of the Ordinance. The procedures selecteddepend on the auditorʼs judgment, including the assessment of the risks of materialmisstatements in the remuneration report, whether due to fraud or error. This auditalso includes evaluating the reasonableness of the methods applied to valuecomponents of remuneration, as well as assessing the overall presentation of theremuneration report.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

OpinionIn our opinion, the remuneration report for the year ended 31 December 2015 of KuoniTravel Holding Ltd. complies with Swiss law and articles 14 – 16 of the Ordinance.

KPMG AG

Martin Schaad

Licensed Audit Expert Auditor in Charge

Tobias Wölfle

Licensed Audit Expert

Report of the Statutory AuditorReport of the Statutory Auditor to the General Meeting of Shareholders of Kuoni TravelHolding Ltd., Zurich.

Report of the statutory auditor on the remuneration reportWe have audited the remuneration report dated 8 March 2016 of Kuoni Travel HoldingLtd. for the year ended 31 December 2015. The audit was limited to the informationaccording to articles 14 – 16 of the Ordinance against Excessive compensation in StockExchange Listed Companies contained in the sections of the compensation reportmarked blue.

Responsibility of the Board of DirectorsThe Board of Directors is responsible for the preparation and overall fair presentationof the remuneration report in accordance with Swiss law and the Ordinance againstExcessive compensation in Stock Exchange Listed Companies (Ordinance). The Boardof Directors is also responsible for designing the remuneration system and definingindividual remuneration packages.

Auditorʼs ResponsibilityOur responsibility is to express an opinion on the accompanying remuneration report.We conducted our audit in accordance with Swiss Auditing Standards. Thosestandards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the remuneration report complieswith Swiss law and articles 14 – 16 of the Ordinance.

An audit involves performing procedures to obtain audit evidence on thedisclosures made in the remuneration report with regard to compensation, loans andcredits in accordance with articles 14 – 16 of the Ordinance. The procedures selecteddepend on the auditorʼs judgment, including the assessment of the risks of materialmisstatements in the remuneration report, whether due to fraud or error. This auditalso includes evaluating the reasonableness of the methods applied to valuecomponents of remuneration, as well as assessing the overall presentation of theremuneration report.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

OpinionIn our opinion, the remuneration report for the year ended 31 December 2015 of KuoniTravel Holding Ltd. complies with Swiss law and articles 14 – 16 of the Ordinance.

KPMG AG

Martin Schaad


Tobias Wölfle


Zurich, 8 March 2016

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Human Resources


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Human ResourcesFocus on core business demands rethinking For Kuoni Group, with all the major changes that have taken place, 2015 was amilestone year. Kuoni focused its activities on its global businesses, each with leadingpositions. For Human Resources Management, supporting these organisationalchanges has been one of the greatest challenges of 2015.

Efficiency improvements in corporate functionsFollowing the completion of the sale of its traditional tour operating activities, KuoniGroupʼs Board of Directors has given intensive consideration to the future of the Group.It is now focused on services for the global travel industry and governments. SinceKuoni Group is now significantly smaller, support and corporate functions are beingrightsized to optimise operational costs without compromising expected servicedelivery. Supporting this initiative on efficiency improvements, for support andcorporate functions, will continue to remain in focus for HR in 2016.

Restructuring of the Global Travel Services (GTS) Division Supporting the ongoing restructuring of Kuoniʼs Global Travel Services (GTS) Division,with the aim of rapidly adjusting it to changed market conditions has been anotherimportant topic on Kuoni Groupʼs 2015 Human Resources agenda.

Organisational design principles and guidelines which were aligned to the businessstrategy and vision in the current and future context were designed and applied.Structure complexities were reduced by reviewing of spans of control, grade levels,roles, interdependency of functions. Outsourcing and relocating of activities, focusingon key and profitable market segments all formed integral part of the process.

The communicated goal of reducing 350 full-time equivalents at the Global TravelServices Division is being achieved through natural attrition and redundancies. Allreductions are being made in a socially and statutorily responsible and compliantmanner and in close consultation with the relevant employee representatives.

Over all the aim is to deliver a focused and accountable organisation that delivers cost-saving targets without losing crucial knowledge and skills.

Further development of the Global HR Shared Services functionWhile there is a strong demand for Human Resources to support restructuringactivities in the divisions, as well as in the remaining corporate support functions, theHuman Resources function itself continued to work on improving its own efficiency.

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Cross-divisional synergies are leveraged by migrating administrative support foremployees of additional units into the Global HR Shared Service Centre organisation.

In 2015 HR employee services for KDM Middle East, VFS Australasia, VFS Africa andVFS Europe have been successfully migrated to the HR Shared Service Centreorganisation in India. By the end of 2015, 18 employees in the HR Shared ServiceCentre organisation India were supporting a total of 5,790 employees across differentdivisions worldwide.

2015 2014 2013 2012 2011

Total HC covered by HR SSC India 5,790 4,985 4,242 4,317 4,315

Total HC of HR SSC India 18 15 15 16 18

Talent management remains the abiding focus

Talent management as a component of strategic management becomes increasinglyimportant in order to ensure a companyʼs long-term success. At Kuoni Group, the yearlyprocess where talent reviews are performed and risks assessed, is the IndividualPotential Discussion (IPD) process. In general it offers a good visibility of talent and riskwithin the Organisation, Division and Function. 2014ʼs EMPOWER Survey resultssuggested that while we may have a good process, there is not sufficient follow-throughin terms of talent development. As a result Kuoni has decided to implement talentreviews covering both Organisational Talent Risk reviews (OTR), and talent discussions,“Talking Talents.”

The purpose of the OTR is to enable the organisation to reach its strategic objectivesand to mitigate operational risks by ensuring a ready, credible and high-quality internaltalent pipeline. This will fill both expected and unexpected vacancies. In the OTRreviews the focus is on positions where we do not have sufficient succession plans inplace. The divisions/functions pro-actively drive their succession plans together withHR through individual career development of identified successors.

Effective talent discussions and assessments enable us to identify the talents and theirpotential. This ensures a clear fit between skills, capabilities, aspirations and roles.Effective and efficient development of employee talent keeps the organisationʼsemployee base engaged and ensures long-term retention.

2014 Empower Survey: Kuoni Group is always interested in learning employeesʼ thoughts

and opinions regarding further development of the company, its corporate culture and

employeesʼ working environment. The global employee survey conducted regularly for this

purpose had a response rate of 85% in 2014 (2012: 78%, 2010: 71%).In order to increase

employee satisfaction and consequently also the competitiveness of Kuoni Group,

department-specific measures based on the 2014 survey results were developed in

conjunction with employees and implemented in 2015.

2014 Empower Survey:

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Corporate Responsibility


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Corporate Responsibility Statement from the CEO

“Kuoni Group is committed to the United Nations Global Compact,now and in the future; we support its philosophy, values andprinciples. In Switzerland, Kuoni is engaged in the United NationsGlobal Compact Network. As part of our due diligence, we arededicated to delivering our services in a manner that respectspeople and the environment. In light of the new companystructure, Kuoni reassessed the materiality of CR topics for theGroup as well as for each Division in 2015 through a broadinternal and external stakeholder survey.”

Zubin Karkaria, CEO Kuoni Group

IntroductionIn this chapter, Kuoni informs its stakeholders about its continued engagement during2015 in the four areas of commitment defined by the United Nations Global Compact:human rights, labour, environment and anti-corruption. This is Kuoni Groupʼs eighthofficial report on Corporate Responsibility (CR). The last one was published as part ofthe 2014 Annual Report. All CR reporting, key performance indicators and targets arebased on the latest guidelines of the Global Reporting Initiative (GRI G4). Kuoniʼs GRIIndex 2015 is available online.

Human rightsPrinciple 1: Businesses should support and respect the protection of internationallyproclaimed human rights.As declared in its Statement of Commitment on Human Rights, Kuoni strives to ensurehuman rights criteria are properly fulfilled in line with the United Nations GuidingPrinciples on Business and Human Rights (UNGP).

Oekom Research, one of the worldʼs leading rating agencies in the field of sustainable

investments with an investment volume of 600 billion Euro, has re-evaluated Kuoni Groupʼs

sustainability performance in January 2016. The Kuoni Group has again been awarded the

rating C+ in February 2016, which puts Kuoni in the “Prime” category. This means that

Kuoni in its new structure still qualifies as an investment from an ecological and social

point of view. Only three of the 49 analysed companies in the leisure sector belong to the

“Prime” category. Of the “Prime”, Kuoni was rated as the “most sustainable travel company”.

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Recognising the importance of sector-wide collaboration, Kuoni is co-founder andactive board member of the open multi-stakeholder platform, the Roundtable HumanRights in Tourism. In 2015, Kuoni helped develop recommendations for implementationof labour and social standards for driving personnel in the tourism sector. Kuoni is alsopart of a working group of the Roundtable Human Rights in Tourism which focuses oncommunities affected by tourism development in Sri Lanka.

Principle 2: Businesses should make sure that they are not complicit in human rightsabuses.Kuoni has been appointed as the official UEFA EURO 2016 Accommodation Agency inorder to handle accommodation and other services for a selected number of key targetgroups related to UEFA EURO 2016. In a joint effort, the Kuoni/UEFA Supplier Code ofConduct was introduced to all accommodation suppliers of the UEFA EURO 2016 in2015. A monitoring system was set up to assess the sustainability performance ofKuoni/UEFA EURO 2016 suppliers by way of an online self-assessment.

Kuoniʼs e-learning course for product and procurement staff has been launched in 2015with the aim to raise internal awareness and understanding of the Kuoni Supplier Codeof Conduct and the Sustainable Excursion Guidelines and to provide guidance on howto source ethically, how to consider human rights aspects and how to developsustainable excursions.

LabourPrinciple 3: Businesses should uphold the freedom of association and the effectiverecognition of the right to collective bargaining.In its Statement of Commitment on Human Rights, Kuoni acknowledges the right tocollective bargaining and freedom of association as outlined in the ILO (InternationalLabour Organisation) Declaration on Fundamental Principles and Rights at Work.Through its Supplier Code of Conduct, Kuoni expects its suppliers to recognise thefreedom of association and the right to collective bargaining.

Global Giving programme: The money raised through Kuoniʼs Global Giving programme in

2015 has been matched by the company with 25,000 EUR, bringing the total amount raised

to 53,215 EUR. Kuoni has donated these funds to its global charity partner –

ECPAT International

– and local charities. ECPAT International was selected to be Kuoniʼs global charity partner

after a worldwide employee vote in 2014. ECPAT International comprises a global network

of organisations working together in 75 countries to eliminate child sexual exploitation

including child sex tourism.

Statemen of Commitment on Human Rights

Statement of Commitment on the environment

Kuoni Supplier Code of Conduct

Sustainable Excursion Guidelines

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Principle 4: Businesses should uphold the elimination of all forms of forced andcompulsory labour.Kuoniʼs Supplier Code of Conduct forbids all forms of forced labour. Through its humanrights due diligence process, Kuoni assesses where forced and compulsory labouroccurs in the locations it operates and if there is any risk for Kuoni to be contributing orcomplicit in cases of modern slavery. Kuoni identifies preventive measures to protectespecially those groups that are particularly vulnerable. Special attention is paid toprotecting children from sexual exploitation in tourism, and fights child prostitution as aspecific form of forced labour and modern slavery.

Principle 5: Business should uphold the effective abolition of child labour.The prohibition of child labour is a prerequisite for business relationships betweenKuoni and its suppliers. This is set out clearly in the Supplier Code of Conduct. In 2015,Kuoni initiated a collaborative initiative with UNICEF and other businesses to assess theimpact travel and tourism might have on childrenʼs rights in Vietnam. Throughmeaningful consultations on the ground, this pilot project assessed potential impacts,including also child labour. Based on the findings, recommendations will be provided tothe industry in 2016.

Principle 6: Businesses should uphold the elimination of discrimination in respect ofemployment and occupation.The Kuoni Code of Conduct outlines the companyʼs commitment to ensuring that withinits multicultural teams and working environment nobody is discriminated againstbecause of their race, religion, beliefs, nationality, sexual orientation, gender, age ordisability. Kuoni believes that diversity and inclusion are business-critical to build theright talent pool. Thus, Kuoni bases the employment relationship – includingrecruitment and hiring, compensation, working conditions and terms of employment,access to training, promotion, and termination of employment or retirement – on theprinciple of equal opportunity and fair treatment. Kuoni is proud to already have a verydiverse workforce, particularly in terms of nationality and is continuously working onimproving gender diversity in senior leadership positions.

EnvironmentPrinciple 7: Businesses should support a precautionary approach to environmentalchallenges.Kuoniʼs Statement of Commitment on the Environment is based on its own Code ofConduct and the precautionary principle. The company has therein committed thatwhere there are threats of serious or irreversible environmental damage; lack of fullscientific certainty shall not be used as a reason for postponing cost-effectivemeasures to prevent environmental degradation. This is also applied in business,especially related to animals featured in excursions as further outlined in thecompanyʼs Sustainable Excursion Guidelines, which rely on the Convention onInternational Trade in Endangered Species of Wild Fauna and Flora (CITES).

The Code: Kuoni has been an active member of

The Code of Conduct for the Protection of Children from Sexual Exploitation in Travel and

Tourism (The Code)

since 2006 and is represented on its board. As a member, Kuoni must inform its customers

about child protection, contractually oblige its partners to comply with ethical guidelines,

and show its partner hotels and their employees how to respond if they come across any

cases of sexual exploitation of children in the course of their work.

Code of Conduct EN

Code of Conduct DE

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Principle 8: Businesses should undertake initiatives to promote greater environmentalresponsibility.Kuoni reports its environmental impact and carbon footprint to the Carbon DisclosureProject (CDP) each year. The CDP is an international initiative, which is led by 822institutional investors with a combined value of USD 95 trillion. Kuoni was named by theCDP as Sector Leader in the Germany, Austria and Switzerland region in 2015. ASector Leader company is one that displays a high level of transparency on climateprotection (carbon footprint, target setting, and emission reductions etc.) through itsactions, and/or reported data, compared to other companies within the industry. It alsoshows a companyʼs commitment to combatting climate change and increasing theaccuracy of its environmental data.

Environmental management system processes have enabled VFS Global Servicesreduce its environmental impacts and increase its operating efficiency with the help oforganisation-wide initiatives and drive. VFS Global Services has successfully completedthree years of ISO 14001 certification and will undergo recertification in year 2016. Atthe 17th World Congress on Environment Management held in New Delhi, India on 11July 2015, VFS Global garnered the prestigious Golden Peacock EnvironmentManagement Award within the services category. Environment-friendly practices andprocesses imbibed by the company, which included efforts such as optimal energyusage at the workplace, investment in carbon offsetting projects and various socialoutreach endeavours that comprised awareness campaigns and volunteering efforts,contributed to this win.

Principle 9: Businesses should encourage the development and diffusion ofenvironmentally friendly technologies.Kuoni aims to implement technical solutions and operational improvements that helpreduce water consumption by suppliers. A comprehensive handbook and award systemwas previously developed for Thai hotels, giving them the tools they need to promoteefficient water management. Once participants successfully implemented theprocesses described in the handbook, they could apply for the Water Champion Award.The award recognises hotels that have implemented a sound sustainable watermanagement system and have supported local communities through access-to-waterprojects. Eleven from seventeen participating hotels were recognised in November2015 with the prestigious award. The participating hotels saved a total amount of waterequivalent to 58 Olympic-sized swimming pools, equivalent to average water needs of32,200 people for a month. One hotel in Phuket managed to save enough water throughthe installation of rainwater harvesting tanks that it no longer required freshwaterdelivery by 35 trucks each month.

Anti-corruptionPrinciple 10: Businesses should work against corruption in all its forms, includingextortion and bribery.Commitment and policy: Kuoni is committed to doing business ethically and believesthat bribery and corruption are wrong and not acceptable. Kuoniʼs Code of Conductobliges all employees to comply with all applicable laws, rules and regulations as wellas with all internal directives and guidelines. The Code of Conduct states that gifts andhospitality may not be given, offered or received with the intent or prospect ofinfluencing decision-making or other conduct. The Code also refers to Kuoniʼs GroupAnti-Corruption Regulation for further guidance, which has been issued by KuoniʼsBoard of Directors. The VFS Global Services Division has issued its own Anti-Corruption Regulation in line with the Group Regulation.

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Following an external analysis, Kuoni introduced additional anti-corruption measures in2015. Previously, the General Counsel was responsible for the Group compliancefunctions, but Kuoni recently created a new Group Compliance Officer (GCO) function.The GCO is responsible for drafting and revising the corporate compliance conceptsand regulations relating to the Group Code of Conduct, anti-corruption, sanctions,money laundering and the fight against fraud as well as for designing trainingdocuments, presenting training courses and monitoring compliance through spotchecks. The GCO maintains a whistle-blower hotline and is responsible for the Group-wide fight against fraud. Corresponding regulations approved by the Board of Directorswere issued to centrally regulate the fraud combating processes and provide acomprehensive definition of fraud that also includes all cases of corruption.

Controls: All business units must monitor compliance with the internal directive in asuitable manner. Internal Audit and the GCO carry out spot checks to monitor theeffectiveness and observance of the directive. The findings are reported to the AuditCommittee and, if the GCO did not participate in the audits, to the GCO. Kuoniencourages all employees to report breaches of the internal directives. Reports can besubmitted to the GCO confidentially or anonymously (whistle-blowing).

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Kuoni GroupFinancial Report 2015

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Financial ReportKuoni Group


Five-year summary of key data

CHF million 2015 2014 2013 2012 2011

Turnover

Global Travel Distribution 1,979.3 1,933.6 1,801.9 1,702.5 1,070.1

Global Travel Services 1,054.8 1,169.6 1,284.4 1,280.5 1,244.9

VFS Global 316.5 270.8 244.1 205.2 176.4

Less turnover elimination between segments –1.9 –2.0 n.a. n.a. n.a.

Total 3,348.7 3,372.0 n.a. n.a. n.a.

EBITA

Global Travel Distribution 66.7 63.2 74.5 68.4 63.3

Global Travel Services –24.7 1.2 29.0 29.7 32.6

Acquisition and integration cost 0.0 0.0 –4.7 –5.3 –20.2

VFS Global 53.9 52.5 40.2 35.5 41.9

Corporate 28.1 –11.2 –23.7 –21.8 –52.6

Total 124.0 105.7 115.3 106.5 65.0

EBIT

Global Travel Distribution 48.0 42.0 53.0 47.3 43.5

Global Travel Services –48.8 –6.9 20.7 21.4 23.6

Acquisition and integration cost 0.0 0.0 –4.7 –5.3 –20.2

VFS Global 53.9 52.5 40.2 35.5 41.9

Corporate 28.1 –11.2 –23.7 –21.8 –52.6

Total 81.2 76.4 85.5 77.1 36.2

1 Restatement of comparative period figures due to the disposal of all outbound tour operating activities and the inbound business activities in India, see note 2 of the financialreport.

2 Presentation according to the new management structure due to the disposal of all outbound tour operating activities and the inbound business activities in India.

1 2 2 2

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CHF million 2015 2014 2013 2012 2011

Net result –294.2 67.4 69.2 –14.4 33.3

Investments in tangible fixed assets and intangible assets 38.2 66.0 46.1 58.4 57.2

Depreciation 28.9 49.0 48.4 51.5 54.1

Amortisation 26.3 36.5 37.3 38.8 38.7

Cash flow from operating activities 112.9 64.0 160.4 106.4 110.5

Net debts 54.5 273.8 240.5 291.2 306.4

Current assets 773 1,038 971 927 923

Non-current assets 856 1,381 1,422 1,475 1,576

Current liabilities 808 1,340 1,313 1,539 1,309

Non-current liabilities 291 300 301 164 415

Equity 530 779 779 699 775

Equity ratio 32.5% 32.2% 32.6% 29.1% 31.0%

Total assets 1,629 2,419 2,393 2,402 2,499

Invested capital 655 958 950 984 1,233

Return on invested capital (ROIC) 10.0% 6.6% 13.0% 2.8% 3.3%

Weighted average cost of capital (WACC) 7.5% 7.5% 7.5% 8.5% 8.5%

Kuoni Economic Profit (KEP) 16.2 –8.5 52.1 –56.6 –47.4

Average number of personnel (FTE) 7,968 11,728 11,621 12,279 11,048

Global Travel Distribution 1,489 1,381 1,332 1,338 883

Global Travel Services 2,820 2,973 2,092 2,178 1,395

VFS Global 3,561 3,009 2,666 2,573 2,155

Corporate 98 92 131 115 149

Discontinued Operations n/a 4,273 5,400 6,075 6,466

The data presented are based on the respective consolidated financial statements. Any changes made to Kuoni Group accounting policies as a result of changes to InternationalFinancial Reporting Standards are not retroactively applied.1 Invested capital is the average annual total of all net current assets, tangible fixed assets, goodwill, other intangible assets and other net assets (excluding interest-bearing assets

and liabilities).

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 andtaxes (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 isdetermined by multiplying the average invested capital by the weighted average cost of capital (WACC) of the Kuoni Group. The cost of capital invested for GTA was calculated in2011 for the eight-month period following its acquisition on 1 May 2011.

1

2

3

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CHF 2015 2014 2013 2012 2011

Cash flow (net cash from operating activities)

Per registered share A 5.78 3.31 8.37 5.57 6.41

Per registered share B 28.89 16.57 41.83 27.86 32.05

Net result

Per registered share A –15.10 3.44 3.55 –0.84 1.84

Per registered share B –75.51 17.20 17.77 –4.19 9.22

Equity



Withholding tax-free distribution against reserves from capitalcontributions



Total distribution 0 29,379,000 29,006,520 11,520,336 11,472,696

Pay-out ratio 0.0% 43.7% 42.3% n.a. 34.4%

Yield (at year-end rate) 0.00% 2.49% 1.86% 1.09% 1.33%

Registered share A (nominal value CHF 0.20)

Number outstanding 1,249,500 1,249,500 1,249,500 1,249,500 1,249,500

Number entitled to dividend 1,249,500 1,249,500 1,249,500 1,249,500 1,249,500

Stock 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 3,748,500 3,748,500 3,748,500 3,748,500

Number entitled to dividend 3,669,868 3,619,553 3,593,253 3,590,212 3,574,332

Stock market prices high 351 425 410 341 439

low 173 218 263 217 213

at year-end 280 301 403 274 225

Annual trading volume in CHF million 1,241 1,289 892 758 839

Stock market capitalisation as at 31 December in CHF million 1,118 1,205 1,610 1,096 900

4 Proposal of the Board of Directors to the General Meeting of Shareholders. Subject to definitive approval by the General Meeting of Shareholders.5 Distribution to shareholders of a withholding tax-free appropriation from the 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 inits employee share plan.

7 As at 31 December 2015

Statement of financial position

5 4

5 4

5 4 6 7

7

7

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Assets CHF million Notes 31 Dec 2015 % 31 Dec 2014 %

Cash and cash equivalents [10] 271.1 16.6 339.3 14.0

Time deposits [11] 0.1 0.0 10.7 0.4

Accounts receivable and other receivables [12] 372.5 22.8 441.9 18.3

Prepaid expenses 113.4 7.0 221.3 9.2

Current tax receivables 15.8 1.0 25.3 1.0

Total current assets 772.9 47.4 1,038.5 42.9

Tangible fixed assets [13] 43.8 2.7 146.0 6.0

Goodwill [14] 592.6 36.4 911.1 37.7

Other intangible assets [15] 151.9 9.3 243.5 10.1

Investments in associates [16] 0.0 0.0 2.4 0.1

Other financial assets [18] 53.4 3.3 50.6 2.1

Deferred tax assets [8] 14.8 0.9 27.1 1.1

Total non-current assets 856.5 52.6 1,380.7 57.1

Total assets 1,629.4 100.0 2,419.2 100.0

Equity and liabilities CHF million Notes 31 Dec 2015 % 31 Dec 2014 %

Current financial debts [21] 37.3 2.3 33.4 1.4

Current tax liabilities 18.2 1.1 25.8 1.1

Accounts payable and other payables 230.9 14.2 329.8 13.6

Advance payments by customers 68.8 4.2 373.1 15.4

Current provisions [20] 57.5 3.5 43.6 1.8

Accrued expenses 395.2 24.3 534.2 22.1

Total current liabilities 807.9 49.6 1,339.9 55.4

Non-current financial debts [21] 219.6 13.6 217.3 8.9

Non-current provisions [20] 38.2 2.3 25.6 1.1

Deferred tax liabilities [8] 33.4 2.0 57.2 2.4

Total non-current liabilities 291.2 17.9 300.1 12.4

Total liabilities 1,099.1 67.5 1,640.0 67.8

Share capital [19] 4.0 0.2 4.0 0.2

Treasury shares –10.7 –0.7 –11.8 –0.5

Reserves 535.6 32.9 782.2 32.3

Equity attributable to shareholders of Kuoni Travel Holding Ltd [19] 528.9 32.4 774.4 32.0

Non-controlling interests [19] 1.4 0.1 4.8 0.2

Total equity [19] 530.3 32.5 779.2 32.2

Total equity and liabilities 1,629.4 100.0 2,419.2 100.0

Income statement

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Income statement

CHF million Notes 2015 % 2014 %

Continuing operations

Turnover [3] 3,348.7 100.0 3,372.0 100.0

Direct costs –2,739.0 –81.8 –2,759.8 –81.8

Gross profit [3] 609.7 18.2 612.2 18.2

Personnel expenses [4] –324.3 –9.7 –323.8 –9.6

Marketing and advertising expenses –9.2 –0.3 –8.1 –0.2

Other operating expenses [5] –149.4 –4.4 –150.9 –4.5

Other operating income [5] 53.2 1.6 10.1 0.3

Share in result from joint ventures [3/17] –1.9 –0.1 –2.0 –0.1

Depreciation [3/6] –28.9 –0.8 –31.8 –1.0

Restructuring expenses [3/20] –25.2 –0.8 0.0 0.0

Earnings before interest, taxes and amortisation (EBITA) [3] 124.0 3.7 105.7 3.1

Amortisation [3] –26.3 –0.8 –29.3 –0.8

Impairment of other intangible assets [15] –16.5 –0.5 0.0 0.0

Earnings before interest and taxes (EBIT) [3] 81.2 2.4 76.4 2.3

Financial income [7] 6.7 0.2 6.7 0.2

Financial expenses [7] –9.0 –0.2 –6.0 –0.2

Result before taxes 78.9 2.4 77.1 2.3

Income taxes [8] –21.0 –0.7 –18.9 –0.6

Net result from continuing operations 57.9 1.7 58.2 1.7

Discontinued operations

Net result from discontinued operations, net of income taxes [2] –352.1 –10.5 9.2 0.3

Net result –294.2 –8.8 67.4 2.0

Attributable to non-controlling interests 0.9 0.0 1.0 0.0

Attributable to shareholders of Kuoni Travel Holding Ltd –295.1 –8.8 66.4 2.0

Net result from continuing operations:

Attributable to non-controlling interests 0.9 0.0 0.8 0.0

Attributable to shareholders of Kuoni Travel Holding Ltd 57.0 1.7 57.4 1.7

Earnings per share (in CHF)

Basic/diluted earnings per registered share A [9] –15.10 3.44

Basic/diluted earnings per registered share B [9] –75.51 17.20

Earnings per share (in CHF) from continuing operations:

Basic/diluted earnings per registered share A 2.92 2.97

Basic/diluted earnings per registered share B 14.59 14.86


2 For further details on discontinued operations, refer to note 2 of the financial report.

Statement of comprehensive

1

2

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Statement of comprehensiveincome

CHF million Notes 2015 2014

Net result –294.2 67.4

Other comprehensive income

Cash flow hedges:

– Effective portion of changes in fair value (net) 0.0 4.2

– Reclassified to income statement –14.8 10.4

– Income taxes [8] 4.1 –3.8

Translation differences:

– Currency translation differences –105.8 –27.8

– Reclassified to the income statement [2] 219.7 0.0

Equity-accounted investees share of OCI 0.3 0.0

Total of items that were or may subsequently be reclassified toprofit or loss 103.5 –17.0

Defined benefit pension plans:

– Remeasurement of pension plans [4] –38.3 –30.4

– Income taxes [8/19] 8.0 6.4

Total of items that will not be reclassified to profit or loss [19] –30.3 –24.0

Other comprehensive income for the period, net of taxes 73.2 –41.0

Total comprehensive income for the period –221.0 26.4

Of which:

Attributable to non-controlling interests 1.5 1.2

Attributable to shareholders of Kuoni Travel Holding Ltd. –222.5 25.2

Statement of changes in equity

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Reserves

CHF million NotesShare

capitalTreasury

sharesCapital

reservesRetained earnings

Other reserves

Total equityof Kuoni

shareholders

Non-controlling

interestsTotal

equity

Equity as at 1 January 2014 4.0 –12.9 453.2 623.8 –293.8 774.3 4.8 779.1

Net result 66.4 66.4 1.0 67.4

Other comprehensive income –41.2 –41.2 0.2 –41.0

Total comprehensive income 66.4 –41.2 25.2 1.2 26.4

Dividends [19] –29.0 –29.0 –1.2 –30.2

Share-based compensation 1.1 2.8 3.9 3.9

Total contribution and distributions 1.1 –26.2 –25.1 –1.2 –26.3

Equity as at 31 December 2014 4.0 –11.8 453.2 664.0 –335.0 774.4 4.8 779.2

Net result –295.1 –295.1 0.9 –294.2

Other comprehensive income 72.6 72.6 0.6 73.2

Total comprehensive income –295.1 72.6 –222.5 1.5 –221.0

Dividends [19] –29.4 –29.4 –2.0 –31.4

Share-based compensation 1.1 5.3 6.4 6.4

Total contribution and distributions 1.1 –24.1 –23.0 –2.0 –25.0

Change in scope of consolidation [2] 0.0 –2.9 –2.9

Equity as at 31 December 2015 4.0 –10.7 453.2 344.8 –262.4 528.9 1.4 530.3

1 For further details see note 19.

Statement of cash flows

1

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Statement of cash flows


Cash flow from operating activities

Net result from continuing operations 57.9 58.2

Income tax expenses [8] 21.0 18.9

Net financial result [7] 2.3 –0.7

Earnings before interest and taxes (EBIT) [3] 81.2 76.4

Depreciation and amortisation 55.2 61.1

Impairment of other intangible assets [15] 16.5 0.0

Other non-cash expenses 4.1 0.5

Profit from sale of properties [5] –53.2 –10.1

Changes in net working capital

– Accounts receivable/other receivables –46.0 –35.1

– Prepaid expenses –26.0 –20.5

– Accounts payable/accrued expenses 78.2 51.6

– Advance payments by customers –5.4 6.3

Income taxes paid –30.5 –38.6

Net cash from operating activities – continuing operations 74.1 91.6

Net cash from/(used in) operating activities – discontinued operations 38.8 –27.6

Net cash from operating activities 112.9 64.0

Cash flow from investing activities

Purchase of tangible fixed assets –20.1 –21.1

Purchase of other intangible assets –18.1 –29.0

Disposal of tangible assets and other intangible assets 84.4 13.6

Sales of subsidiaries, net of cash and cash equivalents disposed of [2] –172.7 0.0

Decrease in time deposits 7.7 12.8

Increase in other financial assets –2.9 –9.3

Interest received 3.1 3.9

Other financial income received 1.5 1.1

Net cash used in investing activities – continuing operations –117.1 –28.0

Net cash (used in)/from investing activities – discontinued operations –5.5 3.6

Net cash used in investing activities –122.6 –24.4

Cash flow from financing activities

Repayment of mortgage –15.0 0.0

Increase of financial debts 24.7 30.5

Interest paid –8.5 –4.6

Distributions to non-controlling interests –0.9 –0.8

Distributions to shareholders of Kuoni Travel Holding Ltd [19] –29.4 –29.0

Net cash used in financing activities – continuing operations –29.1 –3.9

Net cash used in financing activities – discontinued operations –2.5 –12.0

Net cash used in financing activities –31.6 –15.9

Effects of exchange rate fluctuations on cash and cash equivalents –26.9 –29.6

Net decrease in cash and cash equivalents –68.2 –5.9

Cash and cash equivalents at beginning of year 339.3 345.2

Cash and cash equivalents at end of year [10] 271.1 339.3


Main accounting principles

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Main accounting principles Kuoni Travel Holding Ltd. (the company) is domiciled in Zurich, Neue Hard 7. Theconsolidated financial statements for the year ended 31 December 2015 cover thecompany and all its subsidiaries (Kuoni Group), associates and joint ventures. KuoniGroup is a service provider to the global travel industry and to governments. Theconsolidated financial statements are prepared in accordance with InternationalFinancial Reporting Standards (IFRS) and comply with Swiss law.

Basis of preparationThe consolidated financial statements are presented in Swiss francs (CHF). Theamounts are rounded to the nearest hundred thousand and are shown in CHF million.The German version is considered to be legally binding. The consolidated financialstatements are prepared on the historical cost basis except for derivative financialinstruments. Non-current assets and disposal groups held for sale are stated at thelower of the carrying amount and fair value less costs to sell. Due to the new Swiss lawin accounting and financial reporting, current assets and liabilities are shown prior tonon-current assets and liabilities. In addition, current provisions, previously disclosedwithin accrued expenses, are shown separately in the balance sheet.

The preparation of the consolidated financial statements in conformity with IFRSrequires management to make judgements, estimates and assumptions that affect theapplication of policies and reported amounts of assets, liabilities, income and expenses.Actual results may differ from these estimates. Critical judgements made bymanagement in the application of IFRS that have a significant effect on the financialstatements and key sources of estimation uncertainties are discussed separately. Theaccounting policies have been applied consistently to all periods presented in theseconsolidated financial statements, with the exceptions described below.

The accounting principles used for the consolidated financial statements and thepresentation of the consolidated financial statements are in accordance with thoseused for the 2014 consolidated accounts, with the exception of the changes listedbelow.

Adoption of new accounting provisionsKuoni Group has applied the following new or amended International FinancialReporting Standards (IFRS) and new interpretations with effect from 1 January 2015:

– Defined Benefit Plans: Employee Contribution (Amendments to IAS 19)– Annual Improvements to IFRSs 2010–2012 Cycle– Annual Improvements to IFRSs 2011–2013 Cycle

None of these changes had any relevant effect on these consolidated financialstatements in their application.

Future IFRS changesKuoni Group is currently examining the possible effects of the revised and newstandards and interpretations that have been published but which have not yet enteredinto effect in accordance with the below overview. Kuoni Group does not expect anysignificant impacts on accounting from the new and revised standards andinterpretations. The impact of IFRS 15 is yet to be analysed.

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Effective date Planned application

New standards and interpretations

IFRS 15 Revenue from Contracts with Customers 1 January 2018 Reporting year 2018

IFRS 9 Financial Instruments 1 January 2018 Reporting year 2018

Revisions and amendments of standards and interpretations

Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11) 1 January 2016 Reporting year 2016

Clarification of Acceptable Methods of Depreciation and Amortization (Amendments to IAS16 and IAS 38) 1 January 2016 Reporting year 2016

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture(Amendments to IFRS 10 and IAS 28) Tbd Tbd

Annual Improvements to IFRSs 2012 – 2014 Cycle 1 January 2016 Reporting year 2016

Disclosure initiative (amendments to IAS 1) 1 January 2016 Reporting year 2016

Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS12 and IAS 28) 1 January 2016 Reporting year 2016

SubsidiariesSubsidiaries are entities controlled by Kuoni Travel Holding Ltd. Kuoni Group controls asubsidiary if it is exposed to the fluctuating returns of the investment or if it holds rightsto these returns and has the ability to influence these returns given its power over thesubsidiary. This is the case where the Kuoni Group holds more than 50% of the votingrights of an entity or where the Kuoni Group has been granted management of an entitycontractually or is exercising control by other means. Subsidiaries acquired in thecourse of the accounting year are consolidated from the date the control effectivelycommences. Subsidiaries sold in the course of the accounting year are deconsolidatedas of the date on which control ceases. Sales and purchases of non-controllinginterests are recognised directly in equity. The gain or loss from the sale of subsidiariesis recorded in the financial result. Subsidiaries which are classified as discontinuedoperations are excluded.

The full consolidation method is used, under which all assets, liabilities, income andexpenses of the subsidiaries are included in the consolidated financial statements. Theshare of net assets and net profit or loss attributable to minority shareholders ispresented separately as non-controlling interest on the consolidated statement offinancial position, and separately as non-controlling interest in the consolidated incomestatement.

Discontinued operationA discontinued operation is a component of the Groupʼs business for which theoperations and cash flows can clearly be distinguished from the rest of the group andwhich:

– represents a major line of business– is part of a single coordinated plan to dispose of a separate major line of business or– is a subsidiary acquired exclusively with a view to resell.

Classification as a discontinued operation occurs at the earlier of disposal or when theoperation meets the criteria to be classified as held-for-sale. When an operation isclassified as discontinued operation, the comparative statement of profit or loss isrepresented as if the operation had been discontinued from the start of thecomparative year. The gain or loss on sale of discontinued operations is included in thenet result from discontinued operations. All disclosures in the notes to the consolidatedfinancial statements refer to continuing operations, except where otherwise indicated.

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AssociatesAssociates are entities in which Kuoni Group is able to exercise significant influence,but not control, over the financial and operating policies. The consolidated financialstatements include in the financial result the Groupʼs share of the total recognisedgains and losses of associates on an equity accounting basis, from the date significantinfluence commences until the date it ceases. When the Groupʼs share of lossesexceeds the carrying amount of the associate, the carrying amount is reduced to niland the recognition of further losses is discontinued except to the extent that the Grouphas incurred further obligation in respect of the associate.

Joint venturesJoint ventures are entities which Kuoni Group jointly controls with a joint venturepartner, and whereby Kuoni Group is heavily involved in the management. Theconsolidated financial statements include in the operating result the Groupʼs share ofthe total recognised gains and losses of joint ventures on an equity accounting basis,from the date joint management commences until the date it ceases. When the Groupʼsshare of losses exceeds the carrying amount of the joint venture, the carrying amount isreduced to nil and the recognition of further losses is discontinued except to the extentthat the Group has incurred further obligations in respect of the joint venture.

Intragroup transactions and balancesAll intragroup transactions and balances and any unrealised gains and losses orincome and expenses arising from intragroup transactions are eliminated in theconsolidation process.

Foreign currency transactions Transactions in foreign currencies are translated at the exchange rate on the date ofthe transaction. Monetary assets and liabilities in foreign currencies are translated atyear-end rates. Non-monetary assets and liabilities in foreign currencies that are statedat historical cost are translated at the exchange rate on the date of the transaction.Non-monetary assets and liabilities in foreign currencies that are stated at fair valueare translated at the exchange rate at the date the values were determined. Foreignexchange gains or losses arising from translation are recognised in the incomestatement.

Consolidation of foreign subsidiaries The consolidated financial statements are presented in Swiss francs (CHF). Thefinancial statements of foreign subsidiaries are prepared in their functional currency.Assets and liabilities (including goodwill and fair-value adjustments) of foreignsubsidiaries are translated to CHF at year-end exchange rates. Revenue, expenses andcash flow amounts are translated at weighted average exchange rates. Foreignexchange differences arising from the translation of foreign subsidiaries arerecognised in other comprehensive income as a translation difference. Cumulativeforeign exchange differences with regard to foreign subsidiaries are reclassified fromequity to the income statement when the foreign subsidiary is disposed of.

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TurnoverThe Group renders a wide range of services to the travel industry and to governments.The turnover from rendering these services to the travel industry is generallyrecognised on the date of the customerʼs departure or, in case of destination andaccommodation services, on the date of arrival. In the Visa Processing Servicesbusiness, turnover is recognised when the visa application is made or the value-addedservice is rendered.

Turnover comprises net sales revenues (after deduction of sales tax or value-addedtax, discounts and commission) from the Destination & Accommodation Services andthe service fee received from visa applicants.

Direct costsDirect costs include all directly allocable airline, ship, rail, hotel, car rental and similarcosts, as well as visa fees which are remitted to the diplomatic mission. Direct costsalso include the currency gains or losses from exchange rate differences realised orincurred by individual subsidiaries in the course of their operations.

Employee benefitsWages, salaries, social security contributions, paid vacation and sickness-relatedabsences, bonuses and non-monetary benefits are allocated to and shown in the year inwhich the employee provided the service concerned for Kuoni Group. Where KuoniGroup provides long-term employee benefits, the costs are accrued to match theservice to be provided by the employee, and the liabilities of Kuoni Group arediscounted to take into account the time value of money where the effects aresignificant.

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 compensation, the current market value of the shares concerned isdetermined on the date the entitlement is granted, and is debited to personnel expenseon the corresponding income statements throughout the period until the entitlement isawarded.

Equity-settled employee compensation is recognised with a corresponding increasein equity. Further amounts resulting from the exercising of such benefits are as wellshown as increase in equity.

Retirement benefitsState retirement benefits are provided in the majority of countries in which Kuoni Groupoperates. The Group has additionally set up a number of legally independent retirementbenefit plans or insurance schemes in the following countries, which are generallyfunded by the employee and the employer:

Defined benefit plans: SwitzerlandDefined contribution plans: The United Kingdom, the USA, India and Japan.

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Defined benefit plansThe plans are funded by the Groupʼs subsidiaries (employer) and the employees.Employerʼs contributions to defined benefit plans are recognised as an expense in theincome statement when incurred. The Groupʼs net obligation in respect of definedbenefit pension plans is calculated separately for each plan by estimating the amount offuture benefits employees have earned in the current and prior periods, discountingthat amount and deducting the fair value of any plan assets as net liabilities or netassets in the consolidated financial statement.

The calculation of defined benefit obligations is performed annually by a qualifiedactuary using the projected unit credit method. When the calculation results in apotential asset for the Group, the recognised asset is limited to the present value ofeconomic benefits available in the form of reductions in future contributions to thebenefit plan. To calculate the present value of economic benefits, consideration is givento any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gainsand losses on a defined benefit liability, the return on plan assets (excluding interest)and the effect of the asset ceiling (excluding interest), are recognised immediately inother comprehensive income. The Group determines the net interest expense (income)on the net defined benefit liability (asset) for the period by applying the discount rateused to measure the defined benefit obligation at the beginning of the annual period tothe net defined benefit liability (asset), taking into account any changes in the netdefined benefit liability (asset) during the period as a result of contributions and benefitpayments. Net interest expense and other expenses related to defined benefit plans arerecognised in the income statement.

When the benefits of a plan are changed or when a plan is curtailed, the resultingchange in benefit that relates to past service or the gain or loss on curtailment isrecognised in income statement. The Group recognises gains and losses on thesettlement of a defined benefit plan when the settlement occurs.

Defined contribution plansObligations for contributions to defined contribution plans are expensed as the relatedservice is provided. Prepaid contributions are recognised as an asset to the extent thata cash refund or a reduction in future payments is available.

Operating lease paymentsLeases where all the major risks and rewards of ownership are effectively retained bythe lessor are classified as operating leases. Payments made under operating leases(net of any incentives received from the lessor) are charged to the income statementon a straight-line basis over the period of the lease.

Depreciation Depreciation includes the periodic consumption of tangible fixed assets and the otherintangible assets. It includes depreciation on buildings and other tangible fixed assets aswell as on the other intangible assets.

Earnings before interest, taxes and amortisation (EBITA)EBITA represents earnings before financial income and expense, income taxes,amortisation as well as impairment charges on intangible and tangible fixed assets.

Amortisation Amortisation includes the periodic consumption of intangible assets capitalised in thecourse of acquisitions.

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Income taxesIncome tax on the profit or loss for the year comprises current and deferred taxes,based on the local tax rates expected to apply for each Group subsidiary. Income tax isrecognised in the income statement except to the extent that it relates to itemsrecognised in other comprehensive income in which case it is recognised in othercomprehensive income.

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 liability method,providing for temporary differences between the carrying amounts of assets andliabilities for financial reporting purposes and the amounts used for taxation purposes.Temporary differences relating to investments in subsidiaries are not provided for to theextent that they will probably not reverse in the foreseeable future. Deferred taxliabilities on undistributed profits of subsidiaries are recognised, unless dividendpayments to the ultimate Group holding company are not planned for the foreseeablefuture. The amount of deferred tax recognised is based on the expected manner ofrealisation or settlement of the carrying amount of assets and liabilities, using tax ratesenacted or substantially enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that futuretaxable 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 impairmentlosses. Where an item of tangible fixed assets comprises major components havingdifferent useful lives, they are accounted for as separate tangible fixed asset items. Thecapitalisation of subsequent costs is evaluated under the general recognition principlefor such assets at the time they are incurred. Long-term leases of tangible fixed assetswhere the Group has substantially all the risks and rewards of ownership are classifiedas finance leases. Tangible fixed assets acquired by way of finance lease are stated atan amount equal to the lower of their fair value and the present value of the minimumlease payments at the inception of the lease, less accumulated depreciation and anyimpairment losses. The related liabilities are recognised as non-current or currentliabilities. The interest expense component of finance lease payments is recognised inthe income statement using the effective interest rate method.

Depreciation is charged to the income statement on a straight-line basis over theestimated useful lives of the items of tangible fixed assets (owned assets and assetsunder finance leases and/or components thereof) concerned. Land is not depreciated.

The estimated useful lives are as follows:

Years

Buildings 20 – 50

Other tangible fixed assets:

Fixtures and equipment 10

Fixtures and equipment at point of sale 8

IT hardware, office equipment and vehicles 5

Personal computers and office machines 3

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Other intangible assets Other intangible assets comprise acquired and self-developed software, licences aswell as trademark rights and similar rights acquired in a business combination.Intangible assets acquired in a business combination are recognised separately fromgoodwill if they are subject to contractual or legal rights or are separately transferableand their fair value can be reliably estimated. Intangible assets are stated at cost lessaccumulated 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 nothave any intangible assets with indefinite useful lives.

Goodwill All business combinations are accounted for by applying the acquisition method.Goodwill arising from the acquisition of a subsidiary represents the excess of the costof the acquisition over the fair value of the net identifiable assets acquired, and isallocated to cash-generating units. In respect of associates, the carrying amount ofgoodwill is included in the carrying amount of the investment in the associate/jointventure. Goodwill is stated at cost less accumulated impairment losses. Goodwill istested at least annually for impairment.

Financial investmentsTime deposits (with a maturity exceeding 12 months from the date of acquisition), long-term loans and other long-term receivables are stated at their amortised cost lessimpairment losses. Interest is recognised using the effective interest rate method. TheGroup does not have any instruments classified as “at fair value through profit and loss”(trading), with the exception of derivative financial instruments (see the accountingpolicy on derivative financial instruments)

Time deposits, loans and accounts receivable Time deposits (with a maturity between three and 12 months from the date ofacquisition), short-term loans and accounts receivable are stated at their nominal valueless impairment losses. Impairment losses are recognised on an individual basis, or ona portfolio basis (for accounts receivable), where there is objective evidence thatimpairment losses have been incurred. The allowance on bad debt and the receivableis written off if there are clear indicators (such as a certificate of unpaid debts) that thereceivable is not collectable.

Cash and cash equivalentsCash and cash equivalents contain cash balances, postal giro accounts and bankcurrent accounts as well as time deposits and money market investments with amaturity not exceeding three months at the date of acquisition.

Impairment The carrying amounts of the Groupʼs assets (other than deferred tax assets andpension assets, for which separate accounting policies apply) are reviewed at eachbalance sheet date to determine whether there is any indication of impairment. If anysuch indication exists, the assetʼs recoverable amount is estimated. Goodwill is testedat least annually for impairment.

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An impairment loss is recognised in the income statement whenever the carryingamount of an asset exceeds its recoverable amount. The recoverable amount of loansand other receivables carried at amortised cost is calculated as the present value ofestimated future cash flows, discounted at the original effective interest rate inherent inthe asset. Receivables with a short duration carried at cost are not discounted. Therecoverable amount of other assets is the greater of their fair value less costs ofdisposal and their value in use.

An impairment loss in respect of goodwill is not reversed. An impairment loss inrespect of other assets is reversed if there has been a change in the estimates used todetermine the recoverable amount. Reversals of impairment losses are recognised inthe income statement.

Treasury shares When the company or its subsidiaries purchase the companyʼs own shares, theconsideration paid, including any directly attributable costs, is presented as treasuryshares and deducted from equity. Where such shares are subsequently sold orreissued, any gain or loss is included in equity.

Financial debtsFinancial debts are initially recognised at fair value, less attributable transaction costs.Thereafter, financial debts are stated at amortised cost using the effective interestmethod, with any difference between cost and redemption value being recognised inthe income statement under financial expense over the borrowing period.

Provisions A provision is recognised in the statement of financial position when the Group has apresent legal or constructive obligation as a result of a past event, when it is probablethat an outflow of economic benefits will be required to settle the obligation and when areliable estimate can be made of the amount of the obligation. If the effect is material,provisions are determined by discounting the expected future cash flows at a pre-taxrate that reflects current market assessments of the time value of money and, whereappropriate, the risks specific to the liability. A provision for onerous contracts isrecognised when the expected benefits to be derived by the Group from a contract arelower than the unavoidable cost of meeting its obligations under the contract.

Restructuring provisions comprise lease termination penalties and employeetermination payments. Provisions are not recognised for future operating losses.

Accrued expensesAn accrued expense is recognised in the statement of financial position when there isan expense without having received the corresponding invoice. Such expenses relate todirect costs, i.e. airline, ship, rail, hotel, car rental and similar costs, where the amountis known but no invoice has been received. Furthermore such expenses contain as wellaccruals for overtime, vacation and similar expenses.

Contingent liabilities Contingent liabilities are possible obligations arising from past events whose existencewill be confirmed only by the occurrence or non-occurrence of one or more uncertainfuture events not wholly within the Groupʼs control. They may also be presentobligations that are unrecognised because the future outflow of resources is notprobable or the amount concerned cannot be reliably determined. Contingent liabilitiesare not recognised in the statement of financial position, but are disclosed.

Accounts payable Accounts payable are stated at nominal value.

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Derivative financial instruments The Group uses derivative financial instruments primarily to hedge its exposure toforeign exchange risks arising from operational, financing and investment activities.The Group largely uses forward-exchange contracts, currency options and aviation fueloptions for this purpose. In accordance with internal Group accounting principles,derivative financial instruments are not used for trading purposes. However, derivativesused for hedging purposes that do not qualify as hedge accounting are accounted foras trading instruments.

All derivative financial instruments were initially recognised at fair value. Afterinitial recognition, the derivative financial instruments are recognised at their fair valueand reported under accounts receivable/other receivables or accounts payable/otherpayables. Any gains or losses on the remeasurement of the fair value of derivativefinancial instruments that do not qualify for hedge accounting are recognisedimmediately in the income statement. The fair value of the instruments used is thecalculated amount that the Group would receive or pay to terminate the contracts atthe balance sheet date, based on quotes from independent counterparties.

HedgingCash flow hedgesWhere a derivative financial instrument is designated as a foreign currency hedge ofthe variability in cash flows of a firm commitment or a highly probable forecastedtransaction, the effective part of any gain or loss on the derivative financial instrumentis recognised directly in other comprehensive income. Contracts of this kind areclassified as cash flow hedges.

When the firm commitment or forecast transaction results in the recognition of anon-financial asset or liability, the cumulative gain or loss is removed from othercomprehensive income and included in the initial cost of the non-financial asset orliability. Otherwise, the cumulative gain or loss is removed from equity and recognisedin the income statement at the same time as the hedged transaction. The ineffectivepart 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 entityrevokes the designation of the hedge relationship but the hedged forecast transaction isstill expected to occur, the cumulative gain or loss at that point remains in othercomprehensive income and is recognised in accordance with the above policy whenthe transaction occurs.

If the hedged transaction is no longer expected to take place, the cumulativeunrealised gain or loss recognised in other comprehensive income is recognisedimmediately in the income statement.

Hedging of monetary assets and liabilitiesWhere a derivative financial instrument is used to economically hedge the foreignexchange exposure of a recognised monetary asset or liability, no hedge accounting isapplied, and any gain or loss on the hedging instrument is recognised in the incomestatement. Related foreign exchange gains and losses are also recognised in theincome statement as incurred.

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Non-current assets held for sale and disposal groups Non-current assets (or disposal groups) are classified as held for sale if their carryingamount will be recovered principally through a sale transaction rather than fromcontinuing use. The asset (or disposal group) must be available for immediate sale in itspresent condition and the sale must be highly probable. Immediately beforereclassification as held for sale, the measurement of the assets (and all assets andliabilities in a disposal group) is brought up to date in accordance with the applicableaccounting standards. On initial reclassification as held for sale, non-current assets anddisposal groups are recognised at the lower of their carrying amount or fair value lesscosts to sell. Any impairment losses on initial classification as held for sale arerecognised in the income statement.

Segment reporting A segment is a distinguishable component of the Group which provides products and/orservices in a particular geographical area or a particular business segment and forwhich separate financial information is available.

The results of the Groupʼs operating segments are regularly reviewed by the Boardof Directors (as the Groupʼs chief operating decision-maker) to determine howresources should be distributed and performance potential assessed. Segments aremanaged at the EBIT level.

Following a strategic review, Kuoni Groupʼs Board of Directors and Group ExecutiveBoard decided to focus the companyʼs activities on its core business as a serviceprovider to the global travel industry and to governments. Following this new structure,Kuoni Group consists of the three divisions: Global Travel Distribution (GTD), previouslyFIT (Fully Independent Traveller); Global Travel Services (GTS), previously Group Traveland Destination Management Specialists; and VFS Global. Furthermore, all touroperating activities which were previously reported as Outbound Nordic and OutboundEurope/Asia have been sold. The segment reporting reflects the managementstructure implemented within the Kuoni Group.

GTD (Global Travel Distribution) populates Kuoni Groupʼs own worldwide databaseswith a wide range of different travel services. The majority of these services areovernight hotel stays, but they also include individual and regular transfer services, citytours and excursions, tickets, tour guide services and restaurants, all of which can bebooked online. The business models in GTD are based on B2B relationships with variousbusiness partners like tour operators, online and offline travel agents as well asaggregators.

GTS includes B2B group travel business and the Destination Management business.These activities within the Group Travel business focus on creating individual, tailor-made group travel for tour operators as well as online and offline travel agents. Thesebusiness partners buy these group arrangements from Kuoni Group and then offerthem to their own customers in local source markets. The Destination ManagementSpecialists focus on their core destinations and core styles of travel, and they pridethemselves on being able to meet the most exacting customer requirements.Destination Management Specialists are local experts with offices in the holidaydestinations themselves. Kuoni Group runs a worldwide network of destinationmanagement companies in the USA, Africa, Middle East and Asia/Pacific.

VFS Global takes over the external, non-judgmental, administrative parts of the visaapplication and other consular processes for diplomatic missions and governmentsworldwide.

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The sold tour operating business of Outbound Nordic and OutboundEurope/Asia included the Sweden, Norway, Denmark and Finland markets with itsbrand Apollo and Falk Lauritsen (only in Denmark), the Scandinavian airline Novair andthe “Playitas” sports and family holiday resort on Fuerteventura, Spain, as well as all themarkets in Europe and Asia that are operated under the Kuoni brand, its sub-brandsand specialist brands, i.e. the markets of Switzerland, United Kingdom, Benelux(Netherlands and Belgium), India and China/Hong Kong. Most of the products sold inScandinavia and Finland are easy-to-book package holidays to beach destinations.Most of the business done in Outbound Europe/Asia falls into the category of premium-sector tour operating, and is focused on individual and tailor-made holidaytravel. Interdivisional revenues are accounted for at armʼs length. The reportablesegments apply the same accounting principles as the Group. All operational assetsand liabilities which can be directly or reasonably assigned to a reportable segment areshown within the divisions concerned.

Earnings per share (EPS)Earnings per share are calculated by dividing the net result attributable to Kuoni TravelHolding Ltd. shareholders by the weighted average number of registered sharesentitled to dividends during the year under review.

Key judgements, management estimates and assumptions When preparing the consolidated financial statements, management must makedecisions, assessments and assumptions that have an impact on income, expenses,assets and liabilities. The actual results may differ from these managementassessments. Estimates and underlying assumptions are reviewed on an ongoing basisand are based on past findings and various other factors. Changes in accountingestimates may be necessary if there are changes in the circumstances on which theestimate was based, or as a result of new information or additional experience. Suchchanges are recognised in the period in which the estimate is revised.

The key assumptions about the future and key sources of estimation uncertaintythat have a significant risk of causing a material adjustment to the carrying values ofassets and liabilities within the next twelve months are described below. On the basis ofthe information currently available, they are considered to be appropriate.

Employee pension plansSome employees of Kuoni Group are insured with pension plans with defined benefits.The calculation of the recognised net assets (31 Dec 2015: CHF 15.8 million) is basedon statistical and insurance-mathematical calculations of the actuaries. In doing so, thepresent value of the defined benefit obligation relating to changing the discount rate,salary development and expected mortality rate are very sensitive in particular. Inaddition, the independent actuaries, appointed by Kuoni Group, use statistical data,such as the likelihood of withdrawals and life expectancy of the plan participants.Deviations from the assumptions can have an influence on the future reporting periodsof recognised balances and liabilities with the defined benefit pension plans. Whenmeasuring the pension liabilities, the Kuoni Group does not consider the so-called risksharing between employer and employees as much as possible.

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Tangible fixed assets, goodwill and other intangible assetsKuoni Group has as at 31 December 2015 tangible fixed assets with a carrying value ofCHF 43.8 million (see note 13), other intangible assets with a carrying value of CHF151.9 million (see note 15) and goodwill with a carrying value of CHF 592.6 million (seenote 14). Goodwill is reviewed at least annually for impairment. The impairment oftangible fixed assets and other intangible assets are reviewed if there is any indicationof impairment. To assess if any impairment exists, estimates are made of the futurecash flows expected to result from the use of the asset and its eventual disposal. Actualoutcomes 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 ofcompetition, technical obsolescence or lower than anticipated turnover from cash-generating units with capitalised goodwill could result in shortened useful lives orimpairment.

Income taxesAs at 31 December 2015, the net receivable for current income taxes amounts to CHF15.8 million, the net payable for current income taxes amounts to CHF 18.2 million andthe net payable for deferred income taxes amounts to CHF 18.6 million (see note 8).Significant estimates are required in determining the current and deferred tax assetsand liabilities. Some of these estimates are based on interpretations of existing tax lawsand regulations. Management believes that these estimates are reasonable and thatthe recognised liabilities for income-tax-related uncertainties are adequate. Variousinternal and external factors may have favourable or unfavourable effects on incometax assets and liabilities. These factors include, but are not limited to, changes in taxlaws and regulations or their interpretation, and changes in tax rates. Any suchchanges that arise could impact the current and deferred income tax assets andliabilities recognised in the statement of financial position in future periods.Furthermore, in order to determine whether tax loss carry forwards may be carried asassets, it is first necessary to critically assess the probability of future taxable profitsagainst which to offset them. Such profits depend themselves on a variety ofinfluencing factors and developments.

1. Exchange rates

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1. Exchange rates The following exchange rates were used for the Groupʼs most important currencies:

Year-end rates in CHF Average rates in CHF

Currency Unit 2015 2014 2015 2014

AED 100 26.920 26.940 26.220 24.910

AUD 1 0.722 0.811 0.725 0.825

DKK 100 14.480 16.150 14.340 16.290

EUR 1 1.081 1.203 1.069 1.215

GBP 1 1.466 1.541 1.472 1.507

HKD 100 12.760 12.760 12.420 11.800

INR 100 1.491 1.565 1.502 1.500

NOK 100 11.260 13.350 11.960 14.540

SEK 100 11.760 12.820 11.430 13.360

THB 100 2.740 3.009 2.815 2.818

USD 1 0.989 0.989 0.963 0.915

2. Discontinued operations

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2. Discontinued operations On 19 June 2015, Kuoni Group signed an agreement with the REWE Group for the saleof the European tour operating businesses. This agreement included all of the touroperators, specialists and travel agencies run by Kuoni Groupʼs units in Switzerland, theUnited Kingdom, Scandinavia/Finland and Benelux. The purchase price amounted toCHF 125.1 million. The transaction was completed on 11 September 2015 (closing).

On 7 August 2015, Kuoni Group signed an agreement with Fairfax/Thomas Cook forthe sale of the tour operating business in Hong Kong and India as well as the inboundbusiness activities in India. The transaction relating to the tour operating in Hong Kongwas completed on 9 November 2015 and relating to the activities in India on 16December 2015. The purchase price amounted to CHF 80.1 million.

When the transactions were closed, the respective currency translation losses(CTA) were also reclassified from equity to net result from discontinued operations. Forthe Year 2015, the reclassified currency translation losses from discontinuedoperations came to CHF 219.7 million.

The comparative figures of the consolidated income statement were restated to showthe discontinued operations separately from the continuing operations.

Net result from discontinued operations:


Turnover 1,408.0 2,253.6

Expenses –1,454.4 –2,233.5

Impairment loss recognised on goodwill on remeasurement to fair value less cost to sell [14] –106.4 0.0

Impairment loss recognised on investments in associates on remeasurement to fair value less cost to sell [16] –1.5 0.0

Amortisation –0.1 –7.1

Result before taxes –154.4 13.0

Income taxes –1.5 –3.8

Result of discontinued operations –155.9 9.2

Loss on disposal of the tour operating activities and the inbound business activities in India –196.2 0.0

Net result from discontinued operations, net of income taxes –352.1 9.2

Attributable to non-controlling interests 0.0 0.2

Attributable to shareholders of Kuoni Travel Holding Ltd –352.1 9.0

Earnings per share (in CHF) Earnings per share (in CHF)

Basic/diluted earnings per registered share A –18.02 0.47

Basic/diluted earnings per registered share B –90.10 2.34

Effects from the disposal of the tour operating business and the inbound businessactivities in India on the statement of financial position and the statement of cash flows:

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CHF million 2015

Cash and cash equivalents –377.9

Time deposit –3.0

Accounts receivable/other receivables –84.7

Prepaid expenses –155.0

Current tax receivables –24.1

Tangible fixed assets –66.4

Goodwill –135.2

Other intangible assets –34.7

Other financial assets –16.2

Deferred tax assets –18.4

Other current liabilities 313.4

Advance payments by customers 337.6

Net pension liabilities 68.0

Other non-current liabilities 12.0

Net assets disposed of –184.6

Consideration received (cash) 205.2

Non-controlling interests 2.9

Reclassification of currency translation differences to the income statement –219.7

Loss on disposal of the tour operating activities and the inbound business activities in India –196.2

Consideration received (cash) 205.2

Cash and cash equivalents disposed of –377.9

Net cash outflow –172.7

3. Segment reporting

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3. Segment reporting

Information byreportablesegments

Global Travel Distribution (GTD)

Global Travel Services (GTS) VFS Global

Total reportable segments Corporate

Total from continuingoperations

Discontinued operations

CHF million 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014

Turnover ofsegments 1,979.3 1,933.6 1,054.8 1,169.6 316.5 270.8 3,350.6 3,374.0 3,350.6 3,374.0 1,408.0 2,253.6

Turnover withother segments 0.0 –0.2 –1.9 –1.8 0.0 0.0 –1.9 –2.0 –1.9 –2.0 0.0 0.0

External turnover 1,979.3 1,933.4 1,052.9 1,167.8 316.5 270.8 3,348.7 3,372.0 3,348.7 3,372.0 1,408.0 2,253.6

GOP 224.8 220.6 159.5 183.9 225.4 207.7 609.7 612.2 609.7 612.2 252.3 412.9

GOP – margin 11.4% 11.4% 15.1% 15.7% 71.2% 76.7% 18.2% 18.2% 17.9% 18.3%

Share in resultfrom jointventures –1.9 –2.0 –1.9 –2.0 –1.9 –2.0

Depreciation –7.4 –9.2 –2.4 –3.0 –11.8 –12.3 –21.6 –24.5 –7.3 –7.3 –28.9 –31.8 –2.0 –17.2

Restructuringexpense 0.0 0.0 –18.0 0.0 0.0 0.0 –18.0 0.0 –7.2 0.0 –25.2 0.0 0.0 0.0

Earnings beforeinterest, tax andamortisation(EBITA) 66.7 63.2 –24.7 1.2 53.9 52.5 95.9 116.9 28.1 –11.2 124.0 105.7 –44.0 16.4

EBITA – margin 3.4% 3.3% –2.3% 0.1% 17.0% 19.4% 3.7% 3.1% –3.1% 0.7%

Amortisation –18.7 –21.2 –7.6 –8.1 0.0 0.0 –26.3 –29.3 0.0 0.0 –26.3 –29.3 –0.1 –7.1

Impairment ofGoodwill andother intangibleassets 0.0 0.0 –16.5 0.0 0.0 0.0 –16.5 0.0 0.0 0.0 –16.5 0.0 –106.4 0.0

Earnings beforeinterest and taxes(EBIT) 48.0 42.0 –48.8 –6.9 53.9 52.5 53.1 87.6 28.1 –11.2 81.2 76.4 –150.5 9.3

EBIT – margin 2.4% 2.2% –4.6% –0.6% 17.0% 19.4% 2.4% 2.3% –10.7% 0.4%

Share in resultfrom associates 0.0 0.2 0.0 0.2 –1.7 0.1

Other financialresult –2.3 0.5 –2.3 0.5 –2.2 3.6

Result beforetaxes 78.9 77.1 –154.4 13.0

Assets 1,058.5 1,027.1 379.9 437.2 164.7 175.0 1,603.1 1,639.3 206.6 208.6 1,809.7 1,847.9 0.0 719.7

Liabilities 485.1 440.8 302.3 288.7 94.1 96.4 881.5 825.9 397.9 382.8 1,279.4 1,208.7 0.0 579.7

Capitalexpenditure 15.9 13.3 3.2 9.4 18.0 20.7 37.1 43.4 1.1 6.7 38.2 50.1 7.1 15.8

Investments injoint venturesand associates 0.0 0.0 0.0 0.0 0.0 0.0 0 0

Total assets ofjoint venturesand associates 0.0 0.0 0.0 0.0 35.9 24.6 35.9 24.6 0.0 0.9

Number of staff(full-timeequivalents):

– annual average 1,489 1,381 2,820 2,973 3,561 3,009 7,870 7,363 98 92 7,968 7,455 4,174 4,273

– at year-end 1,535 1,414 2,708 2,893 3,776 3,209 8,019 7,516 98 93 8,117 7,609 0 4,325

2

1 1 1 1 1 1 1

3 3

4 4 4

4 4 4 4

5 5 6 6 6 6

5 5 6 6 6 6

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2 For further details on discontinued operations, refer to note 2.3 The GOP includes operational exchange differences of CHF 2.5 million (2014: CHF 1.3 million).4 Including gain from the disposals of properties in Zurich in the amount of CHF 53.2 million in 2015 (2014: CHF 10.1 million).

5 The assets and liabilities shown under “Corporate” include the corporate items from the statement of financial position and the financial assets/liabilities which are not segmentspecific and tax assets/liabilities of the Kuoni Group.

6 Total assets (liabilities) from continuing and discontinued operations of CHF1,809.7 million (CHF 1,279.4 million) less IC eliminations of CHF 180.3 million (2014: CHF 148.4 million)equals assets (liabilities) of CHF 1,629.4 million (CHF 1,099.1 million) as per statement of financial positions.

Following a strategic review, Kuoni Groupʼs Board of Directors and Group ExecutiveBoard decided to focus the companyʼs activities on its core business as a serviceprovider to the global travel industry and to governments. In January 2015, the KuoniGroup announced the plan to sell its tour operating activities. Kuoni Group will focus onthe three divisions:

– Global Travel Distribution (GTD), previously FIT (Fully Independent Traveller) – Global Travel Services (GTS), previously Group Travel and Destination Management

Specialists– VFS Global

At the same time, Kuoni Group announced the intention to find new owners for all touroperating activities which were previously classified as Outbound Nordic and OutboundEurope/Asia. All respective transactions were executed as per reporting date (see note2).

As a result of this reorganisation and segment composition, the Group has changed itsinternal management reporting to the entityʼs chief operating decision makers(CODM). The segment reporting was adjusted in order to reflect the new operationalstructure, effective from 1 January 2015. Accordingly, Kuoni Group has restated theoperating segment information for 2014.

Breakdown of turnover of continuing operations by location of legal entity


China/Hong Kong 684.8 597.4

United Kingdom 437.3 872.3

Switzerland 428.3 136.2

United Arab Emirates 385.5 400.9

USA 343.4 260.1

Other 1,069.4 1,105.1

Total 3,348.7 3,372.0


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Breakdown of turnover of continuing operations by activity


Accommodation and Destination Services 3,032.2 3,101.2

Visa Processing Services 316.5 270.8

Total 3,348.7 3,372.0


Breakdown of EBIT


Total EBIT of reportable segments 53.1 87.6

Corporate

– Corporate cost –25.1 –21.3

– Gain from sale of properties 53.2 10.1

Total 81.2 76.4


Breakdown of assets by geographical area

CHF million

Tangible fixedassets

31 Dec 2015

Goodwill andother intangible

assets31 Dec 2015

Total31 Dec 2015

Tangible fixedassets

31 Dec 2014

Goodwill andother intangible

assets31 Dec 2014

Total31 Dec 2014

United Kingdom 9.4 634.7 644.1 12.6 826.2 838.8

United Arab Emirates 4.6 37.1 41.7 4.8 38.4 43.2

USA 0.4 39.6 40.0 0.7 39.7 40.4

Sweden 0.0 0.0 0.0 1.2 101.4 102.6

Switzerland 6.0 3.7 9.7 45.6 62.3 107.9

Other 23.4 29.4 52.8 81.1 86.6 167.7

Total 43.8 744.5 788.3 146.0 1,154.6 1,300.6

As per 31 December 2014 the tangible fixed assets, goodwill and other intangibleassets included the continuing operations as well as the discontinued operations, whichwere sold in 2015.

4. Personnel expenses

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4. Personnel expenses


Wages and salaries 248.9 249.5

Pension costs 15.6 18.3

Other social security costs 15.6 16.0

Other personnel costs 44.2 40.0

Total 324.3 323.8


Share-based compensationCompensation of members of the Board of Directors consists of fixed compensationand social security contributions in accordance with Swiss regulations. Half of the fixedcompensation is paid in cash, and half in shares, which are subject to a three-yearblocking period. The issue price of the shares concerned is determined again each yearand corresponds to the final share price on the trading day before the grant date. Theshares are allocated one day after the distribution of the dividend.

Total compensation for the Executive Board consists of a fixed and a variablecomponent. The fixed component consists of a base salary, social contributions and adeferred benefit (in the form of share awards). The variable component contains ashort- and a long-term incentive (performance share awards).

The short-term incentive plan is designed to reward Group Executive Board (GEB)members for the achievement of annual performance measures that are specific,quantifiable and challenging. The performance measures for all GEB members includefinancial targets at Group and Divisional level plus strategic targets aimed at promotinggrowth and the development of consumer-oriented and innovative approaches. Otheragreed targets relate to Kuoni Groupʼs transformational objectives, people and talentdevelopment targets and stakeholder targets that are specific to key markets and theindividualʼs role. The mix of targets is appropriate for Kuoni Groupʼs business model,which must be tailored to consumer and market influences, and are aligned with theGroupʼs business strategy and annual targets for 2015.

In 2015, GEB members were granted deferred compensation under the RestrictedShare Plan (RSP) 2015 as part of the fixed component of their total compensation. Thedeferred compensation links executive compensation more closely to shareholdervalue creation and supports the retention of GEB members. There was no increase inthe total value of this compensation element in 2015.

The restricted shares awarded to GEB members in April 2015 represent apercentage of their basic salary. The value of the restricted shares granted is generallyequivalent to 40% of the basic salary (2014: 40%), calculated on the basis of thevolume-weighted average price of shares from mid-February to mid-March prior toallocation of the shares. The shares are restricted for three years: a third of the sharesare converted after one year, the next third after two years and the final third after thethird year. The pay-out value of the compensation is based on the share price at thetime of conversion, thereby linking this portion of compensation to shareholder valuecreation and the development of Kuoni Groupʼs share price.

In 2015, the GEB members received allocations under the Performance Share Plan(PSP) 2015. The PSP is designed to reward the GEB for its contribution to thecompanyʼs long-term success and for the creation of shareholder value.

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In April 2015, GEB members were allocated performance-based restricted shareslinked to a percentage of their basic salary. This target percentage came to 60% of theoverall basic salary (2014: 60%). The calculation of the restricted awards was made onthe basis of the volume-weighted average price of shares from mid-February to mid-March prior to allocation of the shares. The performance shares will vest based on theextent to which the performance targets are actually achieved after a three-yearperiod.

The performance measures and the weightings that apply to the 2015 allocations areas follows:

– Free cash flow – weighting of 2/3 of the performance targets– Turnover – weighting of 1/3 of the performance targets

These performance measures are designed to align the long-term incentive with theKuoni Groupʼs business strategy. Each performance measure has a threshold, target,stretch and maximum achievement level that is set by the Target Setting Committee.

These levels are set stringently and are designed to reward outstandingperformance. Based on the achievement of the performance measures, the actualnumber of shares that vest at the end of the three-year performance period is between0 and a maximum of 2.5 times the number of performance shares initially granted.

In the reporting period, RSP and PSP share awards have been granted to the seniormanagement. The average price of the 19,551 shares used for such purposes in 2015amounted to CHF 297 (2014: 17,667 shares used; average price CHF 332). The price ofeach share is determined by its average stock market price on assignment, less adiscount for the corresponding measurement period. An adjustment of theperformance factor for current plans from previous years increased share-basedcompensation costs by CHF 0.5 million or 1,903 shares (2014: increase of CHF 1.9million, or 10,564  shares). The costs for the share-based compensation amounted toCHF 6.9 million (2014: CHF 3.3 million).

Defined benefit retirement plansThe Group incurs costs for retirement benefit plans in accordance with prevailingregulations in the countries in which it operates. The defined benefit plans of KuoniGroup are managed in Switzerland. They constitute 100% (2014: 91%).

Swiss pension plansKuoni Group organises the occupational pension provisions of its employees against theconsequences of old age, disability and death within the framework of pension fundsthat are legally and financially separated from the employer. The pension assets areentirely separated from the assets of the relevant employing company, but also fromthe assets of the policyholders. The Swiss Occupational Retirement, Survivorsʼ andDisability Pensions Act (BVG) and its implementation provisions as well as the Act onVesting in Pension Plans specify a minimum benefit in the area of compulsory andpartly also in the area of supplementary occupational pension provisions. The relevantpension plan is specified in the pensions regulations of the foundations.

The foundation board of the pension fund is the most senior management body andconsists on a parity basis of the same number of employer and employeerepresentatives. It takes decisions on the content of the pension regulations (e.g. theinsured benefits), the financing of the pension (e.g. employer and employee premiums)and on the management of the assets (e.g. investing the pension funds).

The pension fund is entered in the register for occupational pension plans and issubject to a cantonal supervisory authority or the Federal Social Insurance Officedirectly for supervisory purposes depending on their geographical area of activity.

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The occupational pension plan operates in accordance with the capital covermethod. This means that over the professional life an individual, retirement creditbalance is accumulated, taking into account the annual salary insured and annualretirement credit entries plus interest. The annual retirement credit entries arecalculated in percent of the insured salary and are staggered depending on the age ofthe policyholder. The final pension benefit depends on the contributions and has certainminimum guarantees. On the basis of these minimum guarantees, retirement plans inSwitzerland are assigned to the defined benefit plans despite possessing manycharacteristics of defined contribution-oriented plans. The employee has the option towithdraw the retirement benefits in part or in full as capital. In addition to the retirementbenefits, the pension benefits also include disability and survivorsʼ benefits, which arecalculated as a percentage of the insured annual salary or of the expected retirementpension.

To finance the benefits, savings and risk contributions are collected from employeesand employer as a percentage of the insured annual salary in accordance with thepension regulations. At least half of the financing is covered by the employerhere. Autonomous pension funds have risks from the savings process, the assetmanagement and bear the demographic risks (long life, death, disability) themselves.The relevant pension fund can change its financing system (premiums and futurebenefits) at any time. During the period of a shortfall and if other measures do not resultin the financial situation improving, the pension fund can collect restructuringcontributions from the employer and the policyholders on a parity basis.

International pension plansIn 2014, smaller defined benefit plans in UK and Norway existed. Such plans have beendeconsolidated at closing of the sale of the tour operating activities and the inboundbusiness activities in India.

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

2015 2014

Discount rate 0.70% 1.40%

Salary increases 1.00% 1.20%

Rate of pension increase 0.00% 0.30%

Expected average remaining working lives in years 10.6 9.8

Interest rate credited to account balance 2.25% 2.25%

The cover ratio of the benefit plans are shown below:

CHF million 31 Dec 2015 31 Dec 2014

Assets of independent retirement plans at fair value 268.5 419.9

Defined benefit obligations (DBO) of the funded pension plans –238.2 –435.5

Debit/Credit balance 30.3 –15.6

Effect of asset ceiling –14.5 0.0

Defined benefit assets/liabilities recognised in the statement of financial position (net) 15.8 –15.6

Pension assets 15.8 0.0

Pension obligations 0.0 –15.6

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The assets of the independent retirement plans were as follows:


Fair value of assets as at 1 January 419.9 381.5

Interest income on assets 5.0 9.5

Employer contributions 9.5 10.8

Employee contributions 4.9 5.7

Benefits paid –16.9 –2.0

Administration expenses –0.4 –0.7

Return on plan assets excluding amounts included in interest income –9.0 13.5

Change in scope of consolidation –142.6 0.0

Translation differences –1.9 1.6

Fair value of assets as at 31 December 268.5 419.9

Employersʼ contributions for 2016 are expected to be CHF 3.1 million. Actual loss frominvestments for 2015 amounted to CHF 4.0 million (2014: gain of CHF 23.0 million). Theassets of the retirement plans were invested in the following asset categories at year-end.

31 Dec 2015 31 Dec 2014

Listed shares 29% 31%

Listed bonds 52% 51%

Listed indirect investments in real estate 15% 14%

Other assets 4% 4%

Total assets 100% 100%

The retirement plans hold no shares or other equity instruments of Kuoni Travel HoldingLtd., Zurich. The assets were invested in stock-exchange-listed securities only. Part ofthe foreign-currency risks in securities investments was hedged with rolling foreignexchange futures transactions. The purpose was solely to hedge the foreign currencyexposure and not to achieve an additional return by actively trading in foreign currency.

Retirement plan obligation was as follows:


Present value of obligation as at 1 January 435.5 356.0

Current employer service cost 11.4 10.9

Interest cost 5.0 8.9

Employee contributions 4.9 5.7

Benefits paid –16.9 –2.0

Actuarial losses on obligation 14.8 54.7

Negative past service cost –3.5 –0.4



Present value of obligation as at 31 December 238.2 435.5

The actuarially determined retirement benefit costs stated above were set against theGroupʼs contributions to retirement benefit plans. The following table gives acalculation of the pension costs of the Groupʼs major pension plans:

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Current employer service cost 11.4 10.9

Net interest return on the net asset 0.0 –0.4

Administration expenses 0.4 0.7

Negative past service cost –3.5 –0.5

Pension cost recognised in income statement in personnel expense 8.3 10.7

Other pension cost (defined contribution plans and state retirement benefits) 22.9 29.7

Total pension costs 31.2 40.4

* Whereof continuing operations 15.6 18.3

* Whereof discontinued operations 15.6 22.1

The negative past service costs in 2015 contained mainly a curtailment gainattributable to the restructuring programme in Switzerland (see note 20). The followingtable illustrates the remeasurement gains and losses that were recognised in othercomprehensive income:


Return on plan assets excluding amounts included in interest income –9.0 13.6

Experience-based adjustments to DBO 2.6 5.2

DBO change due to financial assumptions –17.4 –59.9

Effect of asset ceiling –14.5 10.7

Total amount of remeasurement losses on defined benefit plan recognised in other comprehensive income –38.3 –30.4

The following table illustrates the reconciliation of effect of asset ceiling:


Adjustment to asset ceiling at 1 January 0.0 –10.5

Interest expense on effect of assets ceiling 0.0 –0.2

Change in effect of assets ceiling excl. interest expense –14.5 10.7

Currency translation adjustment 0.0 0.0

Adjustment to asset ceiling at 31 December –14.5 0.0

The valuation of the pension benefit obligations is particularly sensitive with regard tochanges to the discount rate and the assumptions of the salary rises and the expectedmortality rates. The following table shows the percentage change of the pensionpayment obligation on the basis of a change to these actuarial assumptions:

Sensitivity impact on DBO to actuarial assumptions 2015 2014

Increase in discount rate by 0.25% –3.2% –3.7%

Decrease in discount rate by 0.25% 3.2% 3.7%

Increase in salary rise by 0.25% 0.2% 0.4%

Increase in mortality rate by 1 year 3.9% 2.7%

Increase of the interest rate credited to account balance by 0.25% 0.5% 0.5%

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Every sensitivity analysis considers the change of one assumption, while all otherassumptions remain the same. This approach shows the isolating effect if an individualassumption is changed, but does not consider that some assumptions are mutuallydependent.

The weighted average duration of the defined benefit obligation was 14.2 years (2014:16.2 years).

5. Other operating

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5. Other operatingexpenses/other operatingincome

Other operating expenses


Rent and utilities 46.3 43.0

Administration expenses 63.5 67.2

Other expenses 39.6 40.7

Total other operating expenses 149.4 150.9


Other operating incomeOther operating income included the gain from the disposals of the properties in Zurichof CHF 53.2 million in 2015. In 2014, other operating income contained the gain of CHF10.1 million from the disposal of the property on Geroldstrasse, Zurich.

6. Depreciation

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6. Depreciation


On buildings 1.3 0.0

On other tangible fixed assets 15.1 15.5

On other intangible assets 12.5 16.3

Total 28.9 31.8


7. Financial result

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7. Financial result


Interest income 4.2 3.2

Share in profits from associates 0.0 0.2

Non-operational exchange gain (net) 0.5 1.9

Other financial income 2.0 1.4

Financial income 6.7 6.7

Interest expenses –9.0 –6.0

Financial expense –9.0 –6.0


8. Income taxes

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8. Income taxes


Current tax expenses 22.7 23.5

Deferred tax expenses –1.7 –4.6

Total 21.0 18.9


Tax expense can be analysed as follows:


Result before taxes 78.9 77.1

Weighted average Group tax rate 27.6% 38.3%

Tax expense at the weighted average Group tax rate (net) 21.8 29.5

Non-tax-deductible expenses 1.5 2.6

Tax-free income –15.2 –7.7

Capitalised deferred tax assets from previously not recognised tax loss carryforwards –0.3 –7.8

Utilisation of tax loss carryforwards, not recognised in the statement of financial position –0.1 –0.5

Tax effect from current losses, not eligible for recognition as assets 15.7 10.0

Effect of changes in tax legislation 0.0 –4.1

Tax income for earlier periods –2.4 –3.1

Tax expense reported 21.0 18.9

Effective Group tax rate 26.6% 24.5%


The weighted average tax rate of the Kuoni Group for the year under review was 27.6%(2014: 38.3%). The reduction of the weighted average tax rate is mainly due to thevarious tax rates applicable to the Group subsidiariesʼ positive and negative results.

Depending on the country involved, profit distributions have varying taxconsequences, the extent of which cannot be estimated. The Group has the followingunrecognised tax loss carryforwards:

Expiring CHF million 2015 2014

Up to 1 year 0.1 2.0

1 to 5 years 32.0 21.0

Over 5 years 124.8 89.6

Unlimited 195.4 244.1

Total 352.3 356.7

Not capitalised maximum positive tax effect 98.9 108.2

Deferred taxes changed as follows:

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Deferred tax assets 27.1 30.0

Deferred tax liabilities 57.2 68.2

Deferred tax liabilities as at 1 January (net) 30.1 38.2

Changes recognised in the income statement –9.6 –5.2

Changes recognised in other comprehensive income –12.1 –2.6

Change in scope of consolidation 11.3 0.0

Translation differences –1.1 –0.3

Deferred tax liabilities as at 31 December (net) 18.6 30.1

Deferred tax assets 14.8 27.1

Deferred tax liabilities 33.4 57.2

At year-end the cumulative deferred taxes recognised in equity amounted to CHF –12.1million (2014: CHF –2.6 million). They arise largely from the positive and negativecurrent market values of the currency classified as cash flow hedges andremeasurement gains and losses on net pension assets. Deferred taxes are derivedfrom the following statement of financial position items:

CHF millionDeferred tax assets

31 Dec 2015

Deferred taxliabilities

31 Dec 2015Deferred tax assets

31 Dec 2014

Deferred taxliabilities

31 Dec 2014

Current assets 0.6 0.6 11.5 0.4

Tangible fixed assets 4.4 0.0 12.8 0.1

Other non-current assets 2.4 22.8 2.9 43.2

Accrued expenses and provisions 2.6 2.7 5.5 8.9

Deferred taxes deriving from timing differences 10.0 26.1 32.7 52.6

Netting of deferred taxes within each Group company –0.6 –0.6 –9.5 –9.5

Deferred taxes deriving from timing differences (net) 9.4 25.5 23.2 43.1

Tax effect on undistributed retained earnings of subsidiaries 0.0 7.9 0.0 14.1

Deferred taxes on recognised tax loss carryforwards 5.4 0.0 3.9 0.0

Total 14.8 33.4 27.1 57.2

9. Earnings per share (EPS)

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9. Earnings per share (EPS)

2015 2014

Basic earnings per registered share B in CHF –75.51 17.20

Net result attributable to nominal shareholders B of Kuoni Travel Holding Ltd. in CHF 1,000 –276,218 62,137

Weighted average number of nominal shares B outstanding 3,658,013 3,613,103

Basic earnings per registered share A in CHF –15.10 3.44

Net result attributable to nominal shareholders A of Kuoni Travel Holding Ltd. in CHF 1,000 –18,867 4,298

Weighted average number of nominal shares A 1,249,500 1,249,500

There were no dilutive effects.

10. Cash and cash equivalents

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10. Cash and cash equivalents


Cash and bank current accounts 258.4 281.9

Time deposits and money market investments with original term of up to 90 days from the date of acquisition 12.7 57.4

Total 271.1 339.3

Cash and cash equivalents were denominated in the following currencies:


CHF 30.3 28.8

GBP 40.6 74.5

EUR 44.7 70.9

USD 42.3 61.3

Other 113.2 103.8

Total 271.1 339.3

The average interest rates were:

2015 2014

CHF 0.0% 0.0%

GBP 0.3% 0.0%

EUR 0.0% 0.5%

USD 0.0% 0.5%

11. Time deposits

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11. Time deposits This position contained time deposits originally maturing in more than 90 days from thedate of acquisition.

Time deposits were denominated in the following currencies:


GBP 0.0 0.1

USD 0.0 0.1

CNY 0.0 2.5

INR 0.0 3.1

Other 0.1 4.9

Total 0.1 10.7

The average interest rates were:

2015 2014

CNY n.a. 3.0%

INR n.a. 7.5%

12. Accounts receivable and

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12. Accounts receivable andother receivables


Accounts receivable 345.0 361.4

Other receivables 39.7 63.5

Allowance for doubtful accounts receivable –26.6 –25.0

Positive fair values of derivative financial instruments 14.4 42.0

Total 372.5 441.9

Accounts receivable and other receivables showed the following payment maturities:


Payment not yet due 219.4 225.6

Payment overdue 1 to 30 days 107.5 134.5



Payment overdue by more than 90 days 16.0 21.1

384.7 424.9

Allowance for doubtful accounts receivable –26.6 –25.0

Positive fair values of derivative financial instruments 14.4 42.0

Total 372.5 441.9

Allowance for doubtful accounts receivable totalled to CHF 11.0 million (2014: CHF 4.5million) for receivables between 61 and 90 days overdue and CHF 15.6 million (2014:CHF 20.5 million) for receivables by more than 90 days overdue. Some of theunderlying receivables are expected to be paid. The receivables with payment date notyet due relate largely to long-term customer relations with agents or processingcompanies. Allowance for doubtful accounts receivable showed the followingdevelopments:


Allowance for doubtful accounts receivable 1 January 25.0 30.5

Change (net) 7.5 –6.6



Allowance for doubtful accounts receivable 31 December 26.6 25.0

13. Tangible fixed assets

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13. Tangible fixed assets

CHF million Land and buildingsOther tangible fixed

assetsTotal tangible fixed

assets

Cost as at 1 January 2014 189.5 153.1 342.6

Additions 0.9 25.2 26.1

Disposals –24.8 –17.6 –42.4

Reclassification 0.5 –0.5 0.0

Translation differences –0.8 5.0 4.2

Cost as at 31 December 2014 165.3 165.2 330.5

Accumulated depreciation as at 1 January 2014 78.1 98.6 176.7

Depreciation 3.9 23.1 27.0

Disposals –8.4 –14.1 –22.5

Translation differences 0.1 3.2 3.3

Accumulated depreciation as at 31 December 2014 73.7 110.8 184.5

Net book value as at 31 December 2014 91.6 54.4 146.0


Additions 0.5 22.4 22.9

Disposals –80.8 –13.2 –94.0

Change in scope of consolidation –59.6 –59.2 –118.8

Translation differences –8.1 –10.4 –18.5


Accumulated depreciation as at 1 January 2015 73.7 110.8 184.5


Disposals –53.1 –9.5 –62.6



Accumulated depreciation as at 31 December 2015 9.4 68.9 78.3


14. Goodwill

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14. Goodwill


Cost as at 1 January 916.6 920.6



Cost as at 31 December 592.6 916.6

Accumulated impairment as at 1 January 5.5 5.5

Impairment 106.4 0.0


Accumulated impairment as at 31 December 0.0 5.5

Net book value as at 31 December 592.6 911.1


The cash-generating units of the Kuoni Group are considered to be its operating,reportable segments Global Travel Distribution, Global Travel Services and VFS Global.They are used to assess the value-in-use of goodwill recognised in the balancesheet. Goodwill is allocated to the cash-generating units of the Kuoni Group as follows:

CHF million Growth rateDiscount rate

before taxes 31 Dec 2015

Cash-generating units

Global Travel Distribution 1.5% 10.0% 531.3

Global Travel Services 2.5% 9.6% 61.3

Total 592.6

CHF million Growth rateDiscount rate

before taxes 31 Dec 2014

Cash-generating units

Global Travel Services

Group Travel 1.5% 10.8% 3.4

FIT (Fully Independent Traveller) 1.5% 10.8% 587.9

Outbound & Specialists

Outbound Nordic (discontinued operation) 1.0% 10.8% 107.8

Outbound Europe/Asia (discontinued operation) 0.5% 10.5% 142.6

Destination Management Specialists 2.0% 14.0% 69.4

Total 911.1

Following the announced strategic review Kuoni Group has changed the managementstructure accordingly. Starting 1 January 2015, Kuoni Group consists of the threedivisions: Global Travel Distribution (GTD) previously FIT (Fully Independent Traveller);Global Travel Services (GTS), previously Group Travel and Destination ManagementSpecialists; and VFS Global.

The value of goodwill is tested at least annually for impairment, or if indicators orconditions suggest that its carrying amount can no longer be recovered.

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The Kuoni Group applies a standard method to assess goodwill values. The basicamount which should be recovered by any goodwill reappraised is based on the value-in-use, which is determined from cash flow projections that are themselves based onthe latest approved business plan by the Board of Directors. This plan includes thelatest management estimates on turnover and margin trends and on projectedoperating costs.

The business plan also pays due regard to historic values based on past experienceand includes projections for the next five years. Subsequent years are considered on aperpetual annuity basis, using growth rates from 1.5% to 2.5%. The discount rates havebeen calculated on the basis of the weighted average capital costs of the Kuoni Group,with due and full regard to country- and currency-specific risks relating to cash flows.

Management conducted sensitivity analyses for all cash-generating units, whichassumed an increase of discount rates of 1% in connection with a reduction of theexpected cash flow by 5%. In addition, individual valuations of all divisions have beenconducted in connection with the announced takeover . These valuations wereexecuted in the first quarter of 2016 by independent third parties. The results of thesensitivity analyses and the individual valuations confirmed that no impairment chargewas needed.

15. Other intangible assets

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15. Other intangible assets

CHF millionIntangible assets from acquisitions

Further intangible assets

Total other intangible assets


Additions 0.0 39.8 39.8

Disposals –4.9 –12.7 –17.6



Accumulated depreciation and amortisation as at 1 January 2014 159.6 59.4 219.0

Amortisation 36.4 0.0 36.4


Disposals –4.8 –12.5 –17.3


Accumulated depreciation and amortisation as at 31 December 2014 193.0 69.3 262.3



Additions 0.0 22.4 22.4

Disposals 0.0 –10.7 –10.7




Accumulated depreciation, amortisation and impairment as at 1 January 2015 193.0 69.3 262.3

Amortisation 26.4 0.0 26.4


Impairment 0.0 16.5 16.5

Disposals 0.0 –9.7 –9.7



Accumulated depreciation, amortisation and impairment as at 31 December 2015 143.4 72.0 215.4


The impairment loss of CHF 16.5 million on further intangible assets relates to the ITarchitecture of the division GTS. This IT architecture has been reviewed and adapted tocater for this. The planned new, end-to-end IT solution was no longer deemed fit forpurpose and as a result had been terminated.

Intangible assets from acquisitions consisted largely of capitalised trademark rights,while other intangible assets included software acquired as well as costs for softwareprojects. The costs for software projects in the course of construction amounted toCHF 15.0 million (2014: CHF 6.3 million).

16. Investments in associates

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16. Investments in associates


Net book value as at 1 January 2.4 2.1

Share in profits 0.0 0.3

Share in losses –0.2 0.0

Impairment –1.5 0.0

Sale of Associates –0.7 0.0



17. Investments in joint ventures

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17. Investments in joint venturesVFS TasHeel and Vasco Worldwide are joint ventures in which Kuoni Groupparticipates. Both are as strategic partners of Kuoni Group principally engaged in visaapplication processing for the Saudi Arabian Government, based in Dubai, U.A.E.

VFS TasHeel and Vasco Worldwide are structured as separate vehicles and KuoniGroup has residual interests in the net assets of both companies. Accordingly, KuoniGroup has classified its interests in VFS TasHeel and Vasco Worldwide as jointventures. In accordance with the agreement under which VFS TasHeel and VascoWorldwide are established, Kuoni Group and the joint venture partner TasHeel haveagreed to make additional contributions in proportion to their interests to make up anylosses, if required.

The following table summarises the consolidated financial information of VFSTasHeel and Vasco Worldwide as included in its own financial statements, adjusted tothe accounting principles of Kuoni Group. The table also reconciles the summarisedfinancial information to the carrying amount of the Kuoni Groupʼs interest in VFSTasHeel and Vasco Worldwide.

2015 2014

Share of voting rights and in capital 50% 50%



Share in losses –1.6 –1.8

Adjustment of prior year share in result –0.3 –0.2

Share in OCI 0.3 0.0

Reclassification 1.6 1.8

Translation differences 0.0 0.0


1 The reclassification to short-term provisions is mainly due to the contractual loss cover (obligation to make additional payments).


Current assets 32.9 41.2

Non-current assets 44.9 21.0

Current liabilities 33.5 21.3

Non-current liabilities 51.2 44.5

Net assets –6.9 –3.6

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Turnover 63.0 41.1

Direct costs –12.4 –5.4

Other operating expenses –46.1 –35.5

Depreciation and amortisation –7.2 –3.8

EBIT –2.7 –3.6

Financial result 0.0 0

Income taxes –0.6 0

Net result –3.3 –3.6

Share in result –1.6 –1.8

Dividends received 0.0 0.0

18. Other financial assets

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18. Other financial assets



Additions 23.9 27.1

Disposals –1.9 –21.6




Other financial assets mainly comprised pension assets from funded pension planstotalling CHF 15.8 million (2014: CHF 0.0 million) – see note 4 – and loans to jointventures amounting to CHF 22.0 million (2014: CHF 23.1 million).

19. Equity

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19. Equity The capital administered by the Kuoni Group corresponds to the consolidated equity.Kuoniʼs aims in administering this capital are:

– to maintain the sound structure of its statement of financial position based on going-concern values;

– to maintain the financial scope required for future investments and acquisitions;– to ensure a return for investors that is commensurate with their investment risk.

The Kuoni Group administers its equity by means of its statement of financial positionequity ratio, i. e. the proportion of equity to total assets. The equity ratio amounted to32.5% on 31 December 2015 (2014: 32.2%).

The Kuoni Group is not subject to any legal covenants relating to minimum equityrequirements. For covenants relating to financial indebtedness, see note 21.


Equity attributable to shareholders of Kuoni Travel Holding Ltd. 528.9 774.4

Non-controlling interests 1.4 4.8

Total equity 530.3 779.2

Total assets 1,629.4 2,419.2

Equity ratio 32.5% 32.2%

The Board of Directors proposes to the annual general meeting not to distribute adividend.

On 20 April 2015 the shareholders approved the appropriation from the capitalcontribution reserve of CHF 1.50 per registered share A (2014: CHF 1.50) and CHF7.50 per registered share B (2014: CHF 7.50) in respect of the 2014 business year. Thedistribution to holders of shares entitled totalled CHF 29.4 million (2014: 29.0 million).

Composition of share capital

Type of share Registered share A Registered share B Total

Number 1,249,500 3,748,500 4,998,000

Nominal value in CHF 0.20 1.00 -

Share capital

CHF 249,900 3,748,500 3,998,400

in % 6.25 93.75 100.00

Voting rights

Number 1,249,500 3,748,500 4,998,000

in % 25.00 75.00 100.00

All registered shares A and B are fully paid up.

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Conditional capitalConditional capital issuable via the exercising of conversion rights and/or warrantslinked to bonds or similar debt issued by Kuoni Travel Holding Ltd or any of itssubsidiaries in the domestic or international capital markets amounts to a maximum ofCHF 384,000. In the case of issues of bonds or similar debt instruments to whichconversion and/or warrant rights are attached, the pre-emptive rights of the existingshareholders are excluded. The holders of the said conversion and/or warrant rightsare entitled to subscribe for new registered shares B. The acquisition of registeredshares through the exercise of conversion and/or warrant rights and any subsequenttransfer thereof are subject to the transfer and voting restrictions contained in theArticles of Incorporation. The Board of Directors is authorised to restrict or revoke thepre-emptive rights of shareholders when such bonds or similar debt instruments towhich conversion and/or warrant rights are attached are issued to finance theacquisition of other companies or parts of companies. If shareholdersʼ pre-emptiverights are revoked by a decision of the Board of Directors, the conversion and/orwarrant rights concerned will be issued at the prevailing market price, and the newregistered shares will be issued at market rates, with due regard to the current marketprice of the registered shares concerned and/or of comparable financial instrumentswith a market price. The exercise period is limited to ten years for conversion rightsand 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 exercisingsubscription or option rights granted to employees of Kuoni Travel Holding Ltd or itssubsidiaries under one or more employee stock option plans (in accordance with art. 28of the Articles of Incorporation). In such cases, new registered shares B may also beissued to employees at rates below the current stock market price, and existingshareholders shall have no subscription rights. The terms and conditions for the issueof such shares shall be determined by the Board of Directors. The acquisition ofregistered shares under such employee stock option plans and any subsequent transferthereof are subject to all the relevant statutory transfer and voting right restrictions.

Restricted transferability provisionsThe Articles of Incorporation stipulate that no more than 3% of total voting rights maybe entered in the name of any one shareholder.

Principal shareholdersAs at 31 December 2015 the following largest shareholders are known to the KuoniGroup :

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ShareholderNumber/category

of shares Share in %Where of

voting shares Voting rights in %Date of last disclosure

Kuoni and Hugentobler-Foundation, Stans 1,249,500/A 6.25 1,249,500 25.00 3.4.1995

Previous year 1,249,500/A 6.25 1,249,500 25.00 3.4.1995

Silchester International Investors LLP, London 702,719/B 14.06 119,952 3.00 31.12.2015

Previous year 687,702/B 13.76 119,952 3.00 31.12.2014

Veraison Capital AG, Zurich 167,138/B 3.34 119,952 3.00 31.12.2015

Previous year n.a. n.a. n.a. n.a. n.a.

Schroders plc, London 192,592/B 3.85 119,952 3.00 31.12.2015

Previous year 248,651/B 4.98 119,952 3.00 31.12.2014

UBS Fund Management (Switzerland) AG, Basel 166,427/B 3.33 119,952 3.00 31.12.2015

Previous year 156,556/B 3.13 119,952 3.00 15.11.2012

Classic Fund Management AG, Triesen 191,529/B 3.83 119,952 3.00 31.12.2015


Go Investment Partners LLP, London 211,966/B 4.24 119,952 3.00 31.12.2015


1 The nominal value of share A is CHF 0.20, of share B CHF 1.00.2 2015: disclosure to Kuoni.

All movements that crossed a threshold between 1 January 2015 and 31 December2015 were disclosed and duly published on the website of SIX Swiss ExchangeRegulations as well as on the company website.

Treasury sharesThe number of treasury shares is 78,632 (2014: 128,947). These are reserved for theemployee share plans of the Board of Directors, the Group Executive Board and seniormanagement. The changes to the number of treasury shares reflect the registeredshares B issued to the Board of Directors, the Group Executive Board andmanagement.

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

– the free reserves of Kuoni Travel Holding Ltd. subsequent to the approval of anappropriate resolution by the General Meeting of Shareholders;

– the reserves of subsidiaries in accordance with local fiscal and legal provisions,provided they are distributed first to the parent company.

Other reservesOther reserves contain translation differences (CTA) as well as gains or losses fromremeasurement of defined benefit plans, net of taxes, and fair-value gains or losses, netof taxes, from hedging activities recognised in equity.

2

1

1

1

1

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1

1

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SIX Swiss Exchange Regulations

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CHF millionTranslationdifferences

Hedging reserves

Remeasurement gainsand losses on defined

benefits pension plans Total

Other reserves as at 1 January 2014 –265.5 1.4 –29.7 –293.8

Recognised remeasurement gain or loss on defined benefits pensionplans –24.0 –24.0

Realised gains or losses from cash flow hedges transferred to incomestatement 7.7 7.7

Recognised gains or losses from cash flow hedges 3.1 3.1


Other reserves as at 31 December 2014 –293.5 12.2 –53.7 –335.0

Recognised remeasurement gain or loss on defined benefits pensionplans –30.3 –30.3

Realised gains or losses from cash flow hedges transferred to incomestatement –10.8 –10.8

Recognised gains or losses from cash flow hedges 0.0


Reclassification to the income statement of currency translationdifferences relating to the disposal of tour operating business and theinbound activities in India 219.7 219.7

Other reserves as at 31 December 2015 –179.8 1.4 –84.0 –262.4

Translation differences The biggest translation differences derived from the translation of the assets andliabilities of Group subsidiaries reporting in GBP or EUR and of USD-denominatedintragroup loans of an equity nature/CHF-dominated intragroup loans to subsidiarieswith a different currency.

Hedging reserves The hedging reserves correspond to the positive or negative fair value of currency andfuel price hedging contracts classified as cash flow hedges. They are expected to beremoved from equity within twelve months.

Remeasurement gains and losses on defined benefits pension plansThe reserve includes remeasurement gains and losses on defined benefits pensionplans on pension plan assets and pension plan liabilities as well as the effect of assetceiling. The income taxes on the remeasurement of pension plans amounted to CHF8.0 million (2014: CHF 6.4 million).

20. Provisions

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20. Provisions

CHF million

Provisions forpersonnel related

costsProvisions for

restructuringProvisions for joint ventures Other Total

Provisions as at 1 January 2015 57.7 0.2 2.2 9.1 69.2

Additions 94.7 23.5 1.6 27.7 147.5

Used –17.1 –0.2 0.0 –1.1 –18.4

Released –11.5 –0.6 0.0 –1.8 –13.9

Sale of subsidiaries –81.2 0.0 0.0 –3.9 –85.1

Translation differences –3.3 0.2 –0.1 –0.4 –3.6

Provisions as at 31 December 2015 39.3 23.1 3.7 29.6 95.7

Of which:

Current provisions 30.1 20.9 3.7 2.8 57.5

Non-current provisions 9.2 2.2 0.0 26.8 38.2

Restructuring provisions comprised lease termination penalties and employeetermination payments. No provisions were recognised for future operating losses. In2015 CHF 18.0 million restructuring costs relating to division GTS and CHF 7.2 millionrelating to corporate and support functions were recognised (2014: CHF 0.0 million).Thereof, CHF 2.1 million were already expensed as incurred. The aim of restructuringthe GTS division is to rapidly adjust to changed market conditions through more flexibleand cost-efficient structures. Management structures will be adapted, complexityreduced, operational back-office activities outsourced and services that do not addvalue will be discontinued. Sales activities will be streamlined, simplified and focusedon more profitable customer segments. The increase in other provisions was mainlyrelated to the disposal of subsidiaries in 2015. Although Kuoni Group expects a largepart of provisions to be settled in 2016, by their nature, the amounts and timing of cashoutflow of non-current provisions are difficult to predict but expected to happen withintwo-to-three years.

21. Financial debts

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21. Financial debts


Bond 199.2 199.0

Bank debts 57.2 51.7

Liabilities towards third parties 0.5 0.0

Total 256.9 250.7

Of which:

Current financial debts 37.3 33.4

Non-current financial debts 219.6 217.3

Kuoni Travel Holding Ltd. issued a CHF 200 million bond at an annual interest rate of1.5% in October 2013. The bond was issued at 100.194%. The bond has a duration ofsix years and matures on 28 October 2019. The effective interest rate applied is 1.62%.The proceeds of the bond were used to redeem the previous CHF 200 million bond on28 October 2013. The bond had a market value of 100.5% at year-end (stock exchangeprice on 31 December 2015). Liabilities towards credit institutions include bankaccounts of subsidiaries with a negative balance on the balance sheet date.

Syndicated credit facility Kuoni Group initiated early refinancing of the existing revolving credit facility of CHF209 million. The new revolving credit facility of CHF 200 million replaced the existingagreement on 21 September 2015 and runs until June 2020. As at 31 December 2015,the drawn amount of the credit facility was CHF 20 million.

The new credit facility includes a financial covenant relating to the degree ofindebtedness. The maximum degree of indebtedness must not exceed 3.0 times,measured as the ratio between net debt and EBITDA. The interest to be paid iscalculated on LIBOR plus a margin of between 0.75% and 1.75%.

Financial debts were due as follows:


Statement of financial position value 256.9 250.7

Contractual cash flows (undiscounted) 269.9 268.2

Up to 6 months 38.4 32.9

7 to 12 months 2.4 4.0

1 to 2 years 3.0 4.9

2 to 5 years 226.1 226.4

Over 5 years 0.0 0.0

Financial debts were denominated in the following currencies:


CHF 266.2 263.0

EUR –0.6 5.0

AUD 3.8 0.0

Other 0.5 0.2

Total 269.9 268.2

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Average interest rates were:

2015 2014

CHF 1.5% 1.6%

EUR 1.0% 3.8%

22. Financial risk management

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22. Financial risk managementand derivative financialinstruments

Carrying amounts and fair values of financial assets and liabilities as at 31 December2015.

CHF million Carrying amount Fair value Level 1 Level 2 Level 3

Derivative financial assets at fair value through profit or loss 10.7 10.7 10.7

Derivative financial assets used as cash flow hedges 3.7 3.7 3.7

Total financial assets measured at fair value 14.4 14.4 0.0 14.4 0.0

Other financial assets 37.6

Cash and cash equivalents 271.1

Time deposits 0.1

Accounts receivable and other receivables (excluding derivativefinancial assets) 358.1

Total financial assets not measured at fair value 666.9 0.0 0.0 0.0 0.0

Derivative financial liabilities at fair value through profit or loss 6.4 6.4 6.4

Derivative financial liabilities used as cash flow hedges 2.2 2.2 2.2

Total financial liabilities measured at fair value 8.6 8.6 0.0 8.6 0.0

Bond 199.2 201.0 201.0

Other financial debts 57.7 57.7 57.7

Accounts payables and other payables (excluding derivativefinancial liabilities) 222.3

Accrued expenses 395.2

Total financial liabilities not measured at fair value 874.4 258.7 258.7 0.0 0.0

1 The fair values of the financial instruments do not deviate substantially from their carrying amounts.2 Excluding pension assets capitalised in the other financial assets.

Carrying amounts and fair values of financial assets and liabilities as at 31 December2014.

2

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CHF million Carrying amount Fair value Level 1 Level 2 Level 3

Derivative financial assets at fair value through profit or loss 2.2 2.2 2.2

Derivative financial assets used as cash flow hedges 39.8 39.8 39.8

Total financial assets measured at fair value 42.0 42.0 0.0 42.0 0.0

Other financial assets 50.6

Cash and cash equivalents 339.3

Time deposits 10.7

Accounts receivable and other receivables (excluding derivativefinancial assets) 399.9

Total financial assets not measured at fair value 800.5 0.0 0.0 0.0 0.0

Derivative financial liabilities at fair value through profit or loss 2.3 2.3 2.3

Derivative financial liabilities used as cash flow hedges 23.3 23.3 23.3

Total financial liabilities measured at fair value 25.6 25.6 0.0 25.6 0.0

Bond 199.0 205.4 205.4

Other financial debts 51.7 51.7 51.7

Accounts payables and other payables (excluding derivativefinancial liabilities) 304.2

Accrued expenses 534.2

Total financial liabilities not measured at fair value 1,089.1 257.1 257.1 0.0 0.0

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

The measurement of the market values of active and passive financial instruments isbased on observable market data where possible. The determination of the marketvalues depends on the inputs used of the following levels 1 to 3:

Level 1: quoted 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 avaluation method whose prime input factors are based on direct or indirect observablemarket data.Level 3: valuation method whose prime input factors are not based on observablemarket data.

The calculation of fair value level 2 is subject to the following valuation principles:Foreign currency-related futures and swaps based on valuation principles fromexternal financial service providers that use observable market data for interest rates,yield curves, exchange rates and implied volatilities for similar instruments on themeasurement date. This is the present-value method. In the past financial year, therewere no transfers between the different levels.

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

1

1

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Derivative financial instruments

CHF millionLoans and receivables

At fair value through profit and

lossUsed as

cash flow hedgesOther

liabilities

Total carryingamount

of financialinstruments

31 Dec 2015

Other financial assets 37.6 37.6

Cash and cash equivalents 271.1 271.1

Time deposits 0.1 0.1

Accounts receivable and other receivables 358.1 10.7 3.7 372.5

Total financial instruments – assets 666.9 10.7 3.7 0.0 681.3

Financial debts 256.9 256.9


Accrued expenses 395.2 395.2

Total financial instruments – liabilities 0.0 6.4 2.2 874.4 883.0

31 Dec 2014

Other financial assets 50.6 50.6

Cash and cash equivalents 339.3 339.3

Time deposits 10.7 10.7

Accounts receivable and other receivables 399.9 2.2 39.8 441.9

Total financial instruments – assets 800.5 2.2 39.8 0.0 842.5

Financial debts 250.7 250.7


Accrued expenses 534.2 534.2

Total financial instruments – liabilities 0.0 2.3 23.3 1,089.1 1,114.7

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

2 Excluding pension assets capitalised in the other financial assets.

In the normal course of its business, the Kuoni Group is exposed to liquidity, credit andmarket risks (essentially interest rate and currency risks). To manage these risks,various derivative financial instruments are used. While these are subject to the risk ofmarket rates changing subsequent to their acquisition, such changes are generallyoffset by opposite effects on the items being hedged.

Liquidity risk Liquidity risk is the risk that the Kuoni Group may be unable to meet its financialobligations when these become due for payment. The liquidity position of the KuoniGroup is significantly influenced by the booking and payment pattern of customers. As aresult, liquidity is at its lowest in the winter months and at its highest in the summermonths. Kuoni permanently monitors its liquidity to keep it at adequate levels, withmonthly reports to the Group Executive Board and the Board of Directors. This is donepartly by maintaining liquidity reserves, to even out the usual fluctuations in liquiditylevels and needs. Kuoni also has unutilised credit facilities to cope with any majorliquidity fluctuations. These unused credit facilities totalled CHF 180 million on 31December 2015 and are available for loans, overdrafts and hedging activities. Thefacilities are spread among several banks, to avoid excessive dependence on a singlebanking institution.

The due dates of the financial debts held are shown in note 21. The other financialinstruments held (accounts payable and accrued expenses) are all payable within sixmonths.

1

2

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Credit risk Exposure to credit risk is monitored on an ongoing basis and covered by appropriatevalue adjustments on accounts receivable and prepayments made. Credit risks arelimited because the customer base of the Kuoni Group consists of a large number ofcustomers spread over a wide range of geographical regions. There are no riskconcentrations.

The counterparties to derivative financial instruments and cash are carefullyselected financial institutions. Given their high credit ratings, the Kuoni Group does notexpect any counterparty to fail to meet its obligations. The maximum exposure to creditrisk is represented by the carrying amount of each financial asset.

Furthermore, the Group enters into derivative transactions under InternationalSwaps and Derivatives Association (ISDA) master netting agreements with therespective counterparties in order to mitigate counterparty risk. Under suchagreements the amounts owed by each counterparty on a single day in respect of alltransactions outstanding are aggregated into a single net amount that is payable by oneparty to the other. The ISDA agreements do not meet the criteria for off-setting in thebalance sheet as the Group does not have a currently enforceable right to offsetrecognised amounts.

As per 31 December 2015 the amount subject to such netting arrangements wasCHF 7.4 million (2014: CHF 11.5 million). Considering the effect of these agreements,the amount of derivative assets and derivative liabilities would decrease.

Interest rate risk The Kuoni Group is exposed to interest rate risk as a result of movements in interestrates in the capital market. Generally, all non-current financial liabilities have fixedinterest rates. Consequently, changes in interest rates can result in fluctuations in thefair value of such financial liabilities. This would not have any impact on the net result orfuture cash flows, however. No corresponding derivatives are outstanding on thebalance sheet date.

Cash flow sensitivity analysis for financial instruments with all variable interestrates: a one percentage-point increase in the interest rate applicable would haveincreased the net result by CHF 2.5 million (2014: CHF 3.2 million). This analysis isbased on the assumption that all other influencing factors remain unchanged.

Foreign currency riskThe Kuoni Group incurs foreign currency risk primarily on purchases and borrowingsdenominated in a currency other than the functional currency of the subsidiaryconcerned. A further foreign currency risk of smaller significance derives from theamount of turnover denominated in a currency other than the functional currency ofthe subsidiary concerned. On a consolidated basis, the Group is also exposed tocurrency fluctuations between the Swiss franc and the functional currencies of itssubsidiaries. The major currencies giving rise to currency risk for the Kuoni Group arethe euro, pound sterling and US dollar.

Foreign currency risks are monitored within the Kuoni Group in accordance withspecified guidelines. These guidelines contain principles on risk limits, the forms ofhedging instruments permitted and the relevant risk monitoring processes. Theguidelines prohibit on principle the use of derivative financial instruments forspeculative purposes. The enforcement of these guidelines and general riskmanagement are provided by the Kuoni Groupʼs treasury units in the form of a hedgingstrategy. Monthly reports are submitted to the Group Executive Board on the currentrisk situation.

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The Kuoni Group uses forward exchange contracts to hedge its foreign currencyrisk. Most hedging contracts have maturities of up to 12 months. Where necessary, theforward exchange contracts are rolled over at maturity. The Kuoni Group does nothedge against the foreign currency risks associated with its net investment in foreignentities or the related foreign currency translation of local earnings.

The currency hedging contracts outstanding at year-end are summarised in thefollowing table. The market value volatility from hedging contracts, which qualify ascash flow hedges, will likely be reclassified from the other comprehensive income tothe income statement within a year. Changes in the fair value of forward exchangecontracts, currency options and swaps that economically hedge monetary assets andliabilities in foreign currencies and for which no hedge accounting is applied arerecognised in the income statement. Both the changes in fair value of the forwardcontracts and the foreign exchange gains and losses relating to the monetary items arereported under direct costs.

CHF million

Positive fairvalues

31 Dec 2015

Negative fairvalues

31 Dec 2015Contract values

31 Dec 2015

Positive fairvalues

31 Dec 2014

Negative fairvalues


31 Dec 2014

Cash flow hedges

Options 0.0 0.0 0.0 29.0 –6.0 502.3

Currency-related forward contracts and swaps 3.7 –2.2 349.2 10.8 –3.3 476.0

Commodity options (aviation fuel) 0.0 0.0 0.0 0.0 –14.0 40.5

Other derivative financial instruments

Currency-related forward contracts, swaps and options 10.7 –6.4 1,031.8 2.2 –2.3 205.4

Total 14.4 –8.6 1,381.0 42.0 –25.6 1,224.2

Of which:

Derivatives subject to master netting agreements –7.4 7.4 –11.5 11.5

Net amount 7.0 –1.2 30.5 –14.1

The fair value is the (higher or lower) value at which a derivative contract could beconcluded on the balance sheet date. The fair values calculated on the balance sheetdate should be looked at not in isolation but together with the calculated value ofanticipated future transactions and hence in the context of the aggregate reduction inthe Groupʼs exposure to currency movements. Positive or negative fair values ofderivative financial instruments are carried on the statement of financial position underaccounts receivable/other receivables or accounts payable/other payables.

The contractual cash flows are pitted against flows from underlying transactionsthat roughly offset the contractual cash flows.

Derivative financial instruments by currency:

CHF million

Positive fairvalues

31 Dec 2015

Negative fairvalues


31 Dec 2015

Positive fairvalues

31 Dec 2014

Negative fairvalues


31 Dec 2014

AUD 2.7 0.0 73.0 0.1 –0.2 20.4

EUR 3.8 –5.2 677.1 9.6 –2.9 474.1

USD 5.6 –0.8 238.4 22.0 0.0 272.7

Other currencies 2.3 –2.6 392.5 10.3 –8.5 416.5

Commodities-related futures 0.0 0.0 0.0 0.0 –14.0 40.5

Total 14.4 –8.6 1,381.0 42.0 –25.6 1,224.2

Maturities of derivative financial instruments:

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CHF million

Positive fairvalues

31 Dec 2015

Negative fairvalues


31 Dec 2015

Positive fairvalues

31 Dec 2014

Negative fairvalues


31 Dec 2014

Up to 6 months 14.0 –8.3 1,307.5 26.7 –13.3 743.5

7 to 12 months 0.4 –0.3 73.5 12.1 –9.0 347.8

1 to 2 years 0.0 0.0 0.0 3.2 –3.3 132.9

Total 14.4 –8.6 1,381.0 42.0 –25.6 1,224.2

Foreign-currency sensitivity analysis A change in the foreign-currency positions shown at year-end as a result of a +10% or –10% change in currency exchange rates would have increased or decreasedconsolidated equity and the Group net result by the amounts shown below. This analysisis based on the assumption that all other variables (and interest rates in particular)remained unchanged. The consolidated income statement may also be substantiallyaffected by any changes in currency exchange rates relating to financial instrumentsbought and sold within the business year to which the provisions of IFRS 7 do not apply.

31 Dec 2015Nominal currency USD

+/– 10%Nominal currency GBP

+/– 10%

CHF millionFunctional currency Equity Equity

Incomestatement

Incomestatement Equity Equity

Incomestatement

Incomestatement

+10% -10% +10% -10% +10% -10% +10% -10%

CHF 0.0 0.0 –10.3 12.6 0.0 0.0 –9.0 11.0

GBP 0.0 0.0 –1.6 1.9 n.a. n.a. n.a. n.a.

USD n.a. n.a. n.a. n.a. 0.0 0.0 –0.5 0.5

EUR 2.4 –2.9 –4.7 5.8 4.0 –4.9 0.1 –0.1

Nominal currency EUR

+/– 10%Nominal currency CHF

+/– 10%


Incomestatement


Incomestatement

Incomestatement

+10% -10% +10% -10% +10% -10% +10% -10%

CHF –0.9 0.9 –9.2 12.1 n.a. n.a. n.a. n.a.

GBP –4.0 4.9 –0.6 0.7 0.0 0.0 0.5 –0.6

USD –2.6 2.6 10.0 –10.4 0.0 0.0 0.0 0.0

EUR n.a. n.a. n.a. n.a. 39.5 –48.2 0.5 –0.6

31 Dec 2014Nominal currency USD

+/– 10%Nominal currency GBP

+/– 10%


Incomestatement


Incomestatement

Incomestatement

+10% -10% +10% -10% +10% -10% +10% -10%

CHF 3.6 –3.4 –12.1 14.8 0.4 –0.6 –0.8 0.9

GBP 2.1 –2.0 –4.0 4.8 n.a. n.a. n.a. n.a.

USD n.a. n.a. n.a. n.a. –1.9 1.7 –9.6 11.4

EUR –0.9 1.9 6.4 –7.7 –3.0 6.1 0.6 –0.7

Nominal currency EUR

+/– 10%Nominal currency CHF

+/– 10%


Incomestatement


Incomestatement

Incomestatement

+10% -10% +10% -10% +10% -10% +10% -10%

CHF 6.3 –5.8 –6.4 7.8 n.a. n.a. n.a. n.a.

GBP 1.6 –1.9 0.0 0.0 –0.3 0.3 0.0 0.0

USD 0.6 –0.6 3.2 –3.7 –1.9 2.0 –0.6 0.6

EUR n.a. n.a. n.a. n.a. 31.0 –38.2 0.2 –0.7

23. Related parties

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23. Related partiesRelated parties are directors and Group Executive Board members (together withmembers of their families), associates, joint ventures as well as major shareholders andcompanies controlled by these parties and pension plans.

Apart from the compensation paid to the Board of Directors and the GroupExecutive Board and the ordinary contributions to occupational pension plans, therewere no significant transactions with related parties in 2015.

Kuoni and Hugentobler-Foundation, Stans The Kuoni and Hugentobler-Foundation received a (gross) distribution of capitalcontribution reserve of CHF 1.9 million (2014: CHF 1.9 million) on the basis of itsshareholding.

Associates All transactions with associates are priced on an armʼs length basis. The Kuoni Groupmade no sales to associates in 2015 (2014: CHF 0.0 million), while no purchases weremade from associates (2014: CHF 5.1). In 2015, no profit was distributed by associates(2014: CHF 0.1 million).

Joint ventures All transactions with joint ventures are priced on an armʼs length basis. The KuoniGroup made no sales to joint ventures, while no purchases were made from jointventures. There are loans/receivables to joint ventures amounting to CHF 22.0 millionand CHF 13.9 million (2014: CHF 23.1 million and CHF 0.0 million). No profits weredistributed by joint ventures in 2015.

Pension plans The transactions between the Kuoni Group and the various defined benefits pensionplans for its employees are shown in note 4 and amounted to CHF 0.4 million (2014:CHF 0.7 million). As in the previous year, the Kuoni Group currently has neither liabilitiesnor assets towards these pension plans.

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

Group Executive Board Board of Directors Total

CHF million 2015 2014 2015 2014 2015 2014

Short-term employee benefits 5.9 3.9 1.0 0.9 6.9 4.8

Post-employment benefits 1.2 1.0 0.0 0.0 1.2 1.0

Termination benefits 2.8 2.0 0.0 0.0 2.8 2.0

Share-based payments 3.9 2.0 0.7 0.7 4.6 2.7

Total 13.8 8.9 1.7 1.6 15.5 10.5

The compensation paid to and shares held by members of the Board of Directors andthe Group Executive Board are shown in detail of the financial statements of KuoniTravel Holding Ltd., in compliance with Swiss law.

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24. Contingent liabilities, assetspledged


Assets pledged 0.0 50.2

The assets pledged in prior year were used to secure bank loans with mortgagecollateral.

25. Leasing liabilities

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25. Leasing liabilities Operating leases This position mainly contained lease contracts for buildings.


Liabilities payable up to 1 year 27.9 26.3

Liabilities payable 1 to 5 years 47.3 47.8

Liabilities payable over 5 years 8.1 5.0

Total leasing liabilities not recognised in the statement of financial position 83.3 79.1

Amount recognised in the income statement in respective year 31.7 31.4


26. Events after balance sheet

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26. Events after balance sheetdate

On 2 February 2016 private equity company EQT announced an all-cash public tenderoffer for all publicly held registered shares of Kuoni Travel Holding Ltd. (SIX:KUNN) fora price of CHF 370.00 per share. On 29 February 2016 EQTʼs subsidiary, Kiwi Holding IVS.à r.l., published the corresponding prospectus. Kuoni Groupʼs Board of Directorsunanimously supports the offer and considers the valuation as fair and adequate.Should the offer succeed, the creditors of the bond and the syndicated loan have theright to claim repayment of such financial debts classified as non-current.

The consolidated financial statements were approved by the Board of Directors andreleased for publication on 8 March 2016. No further events after 31 December 2015occurred that would result in an adjustment to the carrying amounts of the Groupʼsassets and liabilities.

Principal subsidiaries,

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Principal subsidiaries,associates and joint ventures

Europe

2015 2014

Activity CurrencyPaid-in share

capitalInvestment

in %Paid-in share

capitalInvestment

in % Consolidation

Switzerland

KIT Solution AG, Zurich CO CHF 1,000,000 100 1,000,000 100 C

Kuoni Global Travel ServicesAG, Zurich D CHF 100,000 100 100,000 100 C

Austria

Kuoni DestinationManagement GmbH, Vienna D EUR 253,000 100 253,000 100 C

Denmark

Kuoni DestinationManagement A/S,Copenhagen D DKK 600,000 100 600,000 100 C

France

Gullivers Travel AssociatesSAS, Paris D EUR 37,000 100 37,000 100 C

Hungary

Kuoni DestinationManagement Kft., Budapest D HUF 3,000,000 100 3,000,000 100 C

Italy

Kuoni DestinationManagement S.p.A., Rome D EUR 1,548,000 100 1,548,000 100 C

GTA ( Italia) SRL, Rome D EUR 20,000 100 20,000 100 C

The Netherlands

Kuoni DestinationManagement B.V.,Amsterdam D EUR 55,815 100 55,815 100 C

Spain

Kuoni DestinationManagement S.L., Madrid D EUR 150,000 100 150,000 100 C

Gullivers Travel AssociatesS.A., Madrid D EUR 420,708 100 420,708 100 C

United Kingdom

Donvand Ltd., London D GBP 177,194 100 177,194 100 C

GTA (Retail) Limited, London D GBP 50,000 100 50,000 100 C

VF Services (UK) Ltd., London V GBP 25,001 100 25,001 100 C

Activity:

D = Destination & Accommodation ServicesV = Visa Processing Services

CO = CorporateConsolidation:C = Consolidated

E = Valuation according to equity method

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Overseas

2015 2014


capitalInvestment

in %Paid-in share

capitalInvestment

in % Consolidation

Australia

Australian ToursManagement Pty Ltd.,Melbourne D AUD 500,000 100 500,000 100 C

GTA Australasia Pty Limited,Sydney D AUD 100,000 100 100,000 100 C

Travelcube Pacific PtyLimited, Sydney D AUD 50,000 100 50,000 100 C

China

S.K.Y. Business ConsultancyCo. Ltd., Shanghai D CNY 1,198,115 100 1,198,115 100 C

Kuoni DestinationManagement (Beijing) Ltd.,Beijing D CNY 4,000,000 100 4,000,000 100 C

Gullivers Travel Associates(Hong Kong) Limited, Kowloon D HKD 3,064,000 100 3,064,000 100 C

Gullivers (Beijing)Commercial ConsultingServices (China), Beijing D USD 250,000 100 250,000 100 C

Gullivers Travel Associates(China) Limited, Beijing D CNY 4,000,000 100 4,000,000 100 C

VFS Business InformationConsulting Co. Ltd.,Shanghai V CNY 1,127,862 100 1,127,862 100 C

India

VFS Global Services Pvt. Ltd.,Mumbai V INR 373,670,000 100 373,670,000 100 C

Japan

Kuoni Travel (Japan) Ltd.,Tokyo D JPY 50,000,000 100 50,000,000 100 C

Gullivers Travel Agency Co.Ltd (Japan), Tokyo D JPY 40,000,000 100 40,000,000 100 C

Octopus Travel.com JapanKK, Tokyo D JPY 10,000,000 100 10,000,000 100 C

Kenya

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

Mauritius

Kuoni Asian Investments(Mauritius) Ltd., Port Louis CO USD 1,000,000 100 1,000,000 100 C

Singapore

Kuoni Travel (S) PTE Ltd.,Singapore D SGD 100,000 100 100,000 100 C

Kuoni GTS (Singapore) Pte.Ltd., Singapore D SGD 100,000 100 100,000 100 C

South Africa

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

VFS Visa Processing (SouthAfrica) Pty Ltd., Pretoria V ZAR 300,000 100 300,000 100 C

South Korea

Kuoni Travel (Korea) Ltd.,Seoul D KRW 100,000,000 100 100,000,000 100 C

Kuoni GTS (Korea) Ltd., Seoul D KRW 350,000,000 100 350,000,000 100 C

Taiwan

Kuoni GTS (Taiwan) Ltd.,Taipei D TWD 6,000,000 100 6,000,000 100 C

Thailand

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Asian Trails Ltd., Bangkok D THB 24,000,000 49 24,000,000 49 C

Kuonissimo (Thailand) Ltd.,Bangkok D THB 2,000,000 49 2,000,000 49 C

United Arab Emirates

Desert Adventures TourismLLC, Dubai D AED 300,000 100 300,000 100 C

Gulf Dunes LLC, Dubai D AED 300,000 100 300,000 100 C

GTA (Middle East) FZ LLC,Dubai D AED 50,000 100 50,000 100 C

VFS TasHeel International JLT,Dubai V USD 5,000,000 50 5,000,000 50 E

Vasco Worldwide JLT, Dubai V USD 5,000,000 50 5,000,000 50 E

Octopus Travel (Middle East)FZ LLC, Dubai D AED 50,000 100 50,000 100 C

USA

AlliedTPro, Inc., New York D USD 170,000 100 170,000 100 C

Kuoni Travel (Atlanta) Inc.,Atlanta D USD 50,000 100 50,000 100 C

Kuoni Holding Delaware, Inc.,Wilmington CO USD 1 100 1 100 C

GTA Americas LLC, Delaware D USD 29,700,000 100 29,700,000 100 C

Octopus Travel.com (USA)Limited, Delaware D USD 1,000 100 1,000 100 C

Activity:D = Destination & Accommodation Services

V = Visa Processing ServicesCO = Corporate

Consolidation:C = ConsolidatedE = Valuation according to equity method

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Discontinued operations (tour operating business and inbound business India)

2015 2014


capitalInvestment

in %Paid-in share

capitalInvestment

in % Consolidation

Switzerland

Kuoni Reisen AG, Zurich T/D CHF 0 0 7,000,000 100 DE

Railtour Suisse SA, Berne T CHF 0 0 1,600,000 93 DE

Belgium

Kuoni Travel Belgium B.V.B.A., Gent T EUR 0 0 7,335,000 100 DE

Denmark

Falk Lauritsen Rejser A/S,Herning T DKK 0 0 500,000 100 DE

The Netherlands

Kuoni Specialists B.V.,Amsterdam T EUR 0 0 20,418 100 DE

Spain

Sotavento S.A., Fuerteventura T EUR 0 0 3,060,000 100 DE

Sweden

Kuoni Nordic AB, Stockholm T SEK 0 0 23,000,000 100 DE

Nova Airlines AB, Stockholm T SEK 0 0 15,000,000 100 DE

United Kingdom

Kuoni Travel Ltd., Dorking T/D GBP 0 0 1,500,000 100 DE

CV Travel Holdings Ltd.,London T GBP 0 0 100,000 100 DE

Kirker Holdings Ltd., London T GBP 0 0 100,000 100 DE

Carrier Ltd., Cheshire T GBP 0 0 139,000 100 DE

China

Kuoni Travel (China) Ltd.,Hong Kong T HKD 0 0 4,800,000 100 DE

India

Kuoni Travel (India) Pvt. Ltd.,Mumbai T/D INR 0 0 80,230,500 100 DE

Kuoni Business Travel IndiaPvt. Ltd., Mumbai T INR 0 0 8,450,000 100 DE

Activity:T = Tour OperatingD = Destination & Accommodation Services

Consolidation:DE = Deconsolidated

Report of the statutory auditor

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Report of the statutory auditor Report of the statutory auditor to the General Meeting of Shareholders of Kuoni TravelHolding Ltd., Zurich.

Report of the statutory auditor on the consolidated financial statements As statutory auditor, we have audited the accompanying consolidated financialstatements of Kuoni Travel Holding Ltd., which comprise the statement of financialposition, income statement, statement of comprehensive income, statement ofchanges in equity, statement of cash flows and notes for the year ended 31 December2015.

Board of Directorsʼ responsibilityThe Board of Directors is responsible for the preparation of the consolidated financialstatements in accordance with International Financial Reporting Standards (IFRS) andthe requirements of Swiss law. This responsibility includes designing, implementing andmaintaining an internal control system relevant to the preparation of consolidatedfinancial statements that are free from material misstatement, whether due to fraud orerror. The Board of Directors is further responsible for selecting and applyingappropriate accounting policies and making accounting estimates that are reasonablein the circumstances.

Auditorʼs responsibilityOur responsibility is to express an opinion on these consolidated financial statementsbased on our audit. We conducted our audit in accordance with Swiss law and SwissAuditing Standards as well as International Standards on Auditing. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance whether theconsolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about theamounts and disclosures in the consolidated financial statements. The proceduresselected depend on the auditorʼs judgement, including the assessment of the risks ofmaterial misstatement of the consolidated financial statements, whether due to fraudor error. In making those risk assessments, the auditor considers the internal controlsystem relevant to the entityʼs preparation and fair presentation of the consolidatedfinancial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe entityʼs internal control system. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of accountingestimates made, as well as evaluating the overall presentation of the consolidatedfinancial statements. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements for the year ended 31 December2015 give a true and fair view of the financial position, the results of operations and thecash flows in accordance with International Financial Reporting Standards (IFRS) andcomply with Swiss law.

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

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In accordance with article 728a paragraph 1 item 3 CO and Swiss AuditingStandard 890, we confirm that an internal control system exists, which has beendesigned for the preparation of consolidated financial statements according to theinstructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you beapproved.

KPMG AG

Martin Schaad


Tobias Wölfle



In accordance with article 728a paragraph 1 item 3 CO and Swiss AuditingStandard 890, we confirm that an internal control system exists, which has beendesigned for the preparation of consolidated financial statements according to theinstructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you beapproved.

KPMG AG

Martin Schaad


Tobias Wölfle



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Financial ReportKuoni Travel Holding LTD



Assets CHF Notes 31 Dec 2015 % 31 Dec 2014 %

Current assets

Cash and cash equivalents 76,849,617 6.2 258,153,369 14.1

Accounts receivable

– from third parties 54,050 0.0 0 0.0

– from subsidiaries 178,147,307 14.5 71,969,900 4.0

Other receivables

– from third parties 14,208,640 1.2 1,992 0.0

– from subsidiaries 8,547,847 0.6 0 0.0

Prepaid expenses 951,964 0.1 1,704,458 0.1

Total current assets 278,759,425 22.6 331,829,719 18.2

Non-current assets

Financial assets

– Loans to subsidiaries 948,978,905 77.0 986,518,554 54.1

– Other financial assets 0 0.0 344,986 0.0

Investments in subsidiaries [2] 100,000 0.0 501,696,025 27.5

Tangible fixed assets

– Land and building 4,460,000 0.4 4,460,000 0.2

– Furniture, fixtures and equipment

– Hardware, PC's, Installations 185,382 0.0 1 0.0

Total non-current assets 953,724,287 77.4 1,493,019,566 81.8

Total assets 1,232,483,712 100.0 1,824,849,285 100.0

1 Adjusted to follow the new presentation rules, please refer to explanatory notes.

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Equity and liabilities CHF Notes 31 Dec 2015 % 31 Dec 2014 %

Current liabilities

Accounts payable

– to third parties 472,585 0.0 9,190,515 0.5

– to subsidiaries 115,012,203 9.3 369,152,850 20.2

Bank overdrafts 157,595,322 12.8 174,643,094 9.6

Other payables

– to third parties 9,493,602 0.8 1,625,319 0.1

– to subsidiaries 14,202,389 1.2 0 0.0

Accrued expenses 1,781,011 0.1 20,097,999 1.1

Total current liabilities 298,557,112 24.2 574,709,777 31.5

Non-current liabilities

Long-term interest bearing liabilities

– Bond [3] 200,000,000 16.2 200,000,000 11.0

– Bank loans [3] 20,000,000 1.6 15,000,000 0.8

– Loans from subsidiaries 9,797,510 0.8 18,196,800 1.0

Long-term non-interest bearing liabilities

– Provisions 1,843,284 0.2 238,974,000 13.1

Total non-current liabilities 231,640,794 18.8 472,170,800 25.9

Total liabilities 530,197,906 43.0 1,046,880,577 57.4

Equity [4]

Share capital 3,998,400 0.3 3,998,400 0.2

Legal capital reserves [4]

– Reserve from capital contribution [4] 331,841,427 26.9 347,666,062 19.0

– Other capital reserves 58,369,715 4.7 58,503,934 3.2

Legal retained earnings 8,000,000 0.6 8,000,000 0.4

Voluntary retained earnings

– Retained earnings based on decision by annual meeting 376,566,962 30.6 280,673,935 15.4

– Net result –62,239,798 –5.0 95,893,027 5.3

Treasury shares [5] –14,250,900 –1.1 –16,766,650 –0.9

Total equity 702,285,806 57.0 777,968,708 42.6

Total equity and liabilities 1,232,483,712 100.0 1,824,849,285 100.0


Income statement

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Income statement

CHF Notes 2015 2014

Income

Income from investments in subsidiaries [6] 17,283,204 105,702,198

Other financial income [7] 28,859,053 28,350,717

Other operating income 515,286 742,500

Total income 46,657,543 134,795,415

Expenses

Personnel expenses 1,927,580 20,216,088

Administrative expenses 3,263,817 10,028,284

Depreciation 61,794 0

Financial expenses 22,850,625 8,427,288

Extraordinary, non-recurring or prior period expenses [8] 80,494,662 0

Direct taxes 298,863 230,728

Total expenses 108,897,341 38,902,388

Net result –62,239,798 95,893,027


Notes

1

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Notes IntroductionLegally, Kuoni shareholders are shareholders of Kuoni Travel Holding Ltd., Zurich. Asannounced in the annual report 2014, the Kuoni Group has introduced a double holdingstructure in the business year 2015. With the introduction of the double holdingstructure, Kuoni Travel Holding Ltd. transferred all shareholdings in its subsidiaries(including related provisions) to the newly incorporated Kuoni Travel Investments Ltd.Excluded from this transfer was its shareholding in Kuoni Travel (China) Ltd. As a resultof the introduction of the double holding structure, Kuoni Travel Holding Ltd. directlycontrols Kuoni Travel Investments Ltd. and indirectly controls all other subsidiariesthrough Kuoni Travel Investments Ltd. From an economic standpoint, the shareholdersof Kuoni Travel Holding Ltd. will continue to be invested in the entire Group. Therelevant shareholdings are set forth in the following note 2 (Investment in subsidiaries).

1. Principles

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1. Principles General aspectsThese financial statements were prepared according to the provisions of the SwissLaw on Accounting and Financial Reporting, the “New Swiss Accounting Law” (32ndtitle of the Swiss Code of Obligations) for the first time. These provisions were effectiveas of 1 January 2013 and require companies to adapt them as of 1 January 2015.Therefore, the presentation of the Financial Statements differs compared to thosepublished in 2014. The prior-year presentation was adjusted to follow the newrequirements. The positions affected by the change are marked with a footnote. Wherenot prescribed by law, the significant accounting and valuation principles applied aredescribed below.

Financial assetsFinancial assets include interest-bearing long-term loans to Group companies. Loansgranted in foreign currency are translated at the rate at the balance sheet date,whereby unrealised losses are recorded and unrealised profits are not recognised inthe income statement.

Treasury sharesTreasury shares are recognised at acquisition cost and deducted from shareholdersʼequity at the time of acquisition. In case of a resale, the gain is recognised throughreserves from capital contribution and the loss is recognised through voluntary retainedearnings.

Share-based paymentsShould treasury shares be used for share-based payment programmes for the Board ofDirectors, the acquisition cost is recognised as personnel expenses.

Long-term interest-bearing liabilitiesInterest-bearing liabilities are recognised in the balance sheet at nominal value. Issuecosts for bonds are recognised as prepaid expenses and amortised on a straight-linebasis over the bondʼs maturity period.

Income from investment in subsidiariesThe income from investment in subsidiaries consists of dividends received as well asincome from the sale of subsidiaries.

Foregoing a cash flow statement and additional disclosure in the notesAs Kuoni Travel Holding Ltd. prepared its consolidated financial statements inaccordance with a recognised accounting standard (International Financial ReportingStandards as issued by IASB, IFRS), it has decided to forego presenting additionalinformation on interest-bearing liabilities and audit fees in the notes as well as in thecash flow statement in accordance with the law.

2. Investment in subsidiaries

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2. Investment in subsidiariesThe investment in Kuoni Travel (China) Ltd. was sold in 2015 as part of the sale ofKuoniʼs Tour Operating Business. The investment was sold for HKD 250.0 million (CHF32.1 million) which resulted in a gain of CHF 17.3 million.

The following table shows Kuoni Travel Holding Ltd.ʼs directly held subsidiary as of 31December 2015:

Company CurrencyPaid-in

share capital

Investment

in %

Switzerland

Kuoni Travel Investments Ltd., Zurich CHF 100,000 100

The following are Kuoni Travel Holding Ltd.ʼs material indirectly held subsidiaries,associates and joint ventures as of 31 December 2015 as well as its directly held andmaterial indirectly held subsidiaries, associates and joint ventures as of 31 December2014. For 2014, material indirectly held subsidiaries, associates and joint ventures aremarked with a “*”; all others were directly held subsidiaries, associates or jointventures.

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Europe

2015 2014


capital

Investment in %and

voting rights in %Paid-in share

capital

Investment in %and

voting rights in % Consolidation

Switzerland



Austria


Denmark


France

Gullivers Travel AssociatesSAS, Paris D EUR 37,000 100 37,000 100* C

Hungary


Italy


GTA ( Italia) SRL, Rome D EUR 20,000 100 20,000 100* C

The Netherlands


Spain


Gullivers Travel AssociatesS.A., Madrid D EUR 420,708 100 420,708 100* C

United Kingdom

Donvand Ltd., London D GBP 177,194 100 177,194 100* C

GTA (Retail) Limited, London D GBP 50,000 100 50,000 100* C

VF Services (UK) Ltd., London V GBP 25,001 100 25,001 100* C


V = Visa Processing ServicesCO = CorporateConsolidation:

C = ConsolidatedE = Valuation according to equity method

Overseas

2015 2014


capital

Investment in %and


capital

Investment in %and


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Australia

Australian ToursManagement Pty Ltd.,Melbourne D AUD 500,000 100 500,000 100* C

GTA Australasia Pty Limited,Sydney D AUD 100,000 100 100,000 100* C

Travelcube Pacific PtyLimited, Sydney D AUD 50,000 100 50,000 100* C

China

S.K.Y. Business ConsultancyCo. Ltd., Shanghai D CNY 1,198,115 100 1,198,115 100* C

Kuoni DestinationManagement (Beijing) Ltd.,Beijing D CNY 4,000,000 100 4,000,000 100* C

Gullivers Travel Associates(Hong Kong) Limited, Kowloon D HKD 3,064,000 100 3,064,000 100* C

Gullivers (Beijing)Commercial ConsultingServices (China), Beijing D USD 250,000 100 250,000 100* C

Gullivers Travel Associates(China) Limited, Beijing D CNY 4,000,000 100 4,000,000 100* C

VFS Business InformationConsulting Co. Ltd.,Shanghai V CNY 1,127,862 100 1,127,862 100* C

India

VFS Global Services Pvt. Ltd.,Mumbai V INR 373,670,000 100 373,670,000 100* C

Japan


Gullivers Travel Agency Co.Ltd (Japan), Tokyo D JPY 40,000,000 100 40,000,000 100* C

Octopus Travel.com JapanKK, Tokyo D JPY 10,000,000 100 10,000,000 100* C

Kenya

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

Mauritius


Singapore

Kuoni Travel (S) PTE Ltd.,Singapore D SGD 100,000 100 100,000 100* C

Kuoni GTS (Singapore) Pte.Ltd., Singapore D SGD 100,000 100 100,000 100* C

South Africa


VFS Visa Processing (SouthAfrica) Pty Ltd., Pretoria V ZAR 300,000 100 300,000 100* C

South Korea


Kuoni GTS (Korea) Ltd., Seoul D KRW 350,000,000 100 350,000,000 100* C

Taiwan

Kuoni GTS (Taiwan) Ltd.,Taipei D TWD 6,000,000 100 6,000,000 100* C

Thailand

Asian Trails Ltd., Bangkok D THB 24,000,000 49 24,000,000 49* C





Europe

2015 2014


capital

Investment in %and


capital

Investment in %and


Switzerland



Austria


Denmark


France

Gullivers Travel AssociatesSAS, Paris D EUR 37,000 100 37,000 100* C

Hungary


Italy


GTA ( Italia) SRL, Rome D EUR 20,000 100 20,000 100* C

The Netherlands


Spain


Gullivers Travel AssociatesS.A., Madrid D EUR 420,708 100 420,708 100* C

United Kingdom

Donvand Ltd., London D GBP 177,194 100 177,194 100* C

GTA (Retail) Limited, London D GBP 50,000 100 50,000 100* C

VF Services (UK) Ltd., London V GBP 25,001 100 25,001 100* C


V = Visa Processing ServicesCO = CorporateConsolidation:

C = ConsolidatedE = Valuation according to equity method

Overseas

2015 2014


capital

Investment in %and


capital

Investment in %and


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GTA (Middle East) FZ LLC,Dubai D AED 50,000 100 50,000 100* C

VFS TasHeel International JLT,Dubai V USD 5,000,000 50 5,000,000 50* E

Vasco Worldwide JLT, Dubai V USD 5,000,000 50 5,000,000 50* E

Octopus Travel (Middle East)FZ LLC, Dubai D AED 50,000 100 50,000 100* C

USA

AlliedTPro, Inc., New York D USD 170,000 100 170,000 100* C

Kuoni Travel (Atlanta) Inc.,Atlanta D USD 50,000 100 50,000 100 C

Kuoni Holding Delaware, Inc.,Wilmington CO USD 1 100 1 100 C

GTA Americas LLC, Delaware D USD 29,700,000 100 29,700,000 100* C

Octopus Travel.com (USA)Limited, Delaware D USD 1,000 100 1,000 100* C

Activity:

D = Destination & Accommodation ServicesV = Visa Processing Services

CO = CorporateConsolidation:C = Consolidated

E = Valuation according to equity method

Australia

Australian ToursManagement Pty Ltd.,Melbourne D AUD 500,000 100 500,000 100* C

GTA Australasia Pty Limited,Sydney D AUD 100,000 100 100,000 100* C

Travelcube Pacific PtyLimited, Sydney D AUD 50,000 100 50,000 100* C

China

S.K.Y. Business ConsultancyCo. Ltd., Shanghai D CNY 1,198,115 100 1,198,115 100* C

Kuoni DestinationManagement (Beijing) Ltd.,Beijing D CNY 4,000,000 100 4,000,000 100* C

Gullivers Travel Associates(Hong Kong) Limited, Kowloon D HKD 3,064,000 100 3,064,000 100* C

Gullivers (Beijing)Commercial ConsultingServices (China), Beijing D USD 250,000 100 250,000 100* C

Gullivers Travel Associates(China) Limited, Beijing D CNY 4,000,000 100 4,000,000 100* C

VFS Business InformationConsulting Co. Ltd.,Shanghai V CNY 1,127,862 100 1,127,862 100* C

India

VFS Global Services Pvt. Ltd.,Mumbai V INR 373,670,000 100 373,670,000 100* C

Japan


Gullivers Travel Agency Co.Ltd (Japan), Tokyo D JPY 40,000,000 100 40,000,000 100* C

Octopus Travel.com JapanKK, Tokyo D JPY 10,000,000 100 10,000,000 100* C

Kenya

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

Mauritius


Singapore

Kuoni Travel (S) PTE Ltd.,Singapore D SGD 100,000 100 100,000 100* C

Kuoni GTS (Singapore) Pte.Ltd., Singapore D SGD 100,000 100 100,000 100* C

South Africa


VFS Visa Processing (SouthAfrica) Pty Ltd., Pretoria V ZAR 300,000 100 300,000 100* C

South Korea


Kuoni GTS (Korea) Ltd., Seoul D KRW 350,000,000 100 350,000,000 100* C

Taiwan

Kuoni GTS (Taiwan) Ltd.,Taipei D TWD 6,000,000 100 6,000,000 100* C

Thailand

Asian Trails Ltd., Bangkok D THB 24,000,000 49 24,000,000 49* C





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Discontinued operations (tour operating business and inbound business in India)

2015 2014


capital

Investment in %and


capital

Investment in %and


Switzerland

Kuoni Reisen AG, Zurich T/D CHF 0 0 7,000,000 100 DE

Railtour Suisse SA, Berne T CHF 0 0 1,600,000 93 DE

Belgium

Kuoni Travel Belgium B.V.B.A., Gent T EUR 0 0 7,335,000 100 DE

Denmark

Falk Lauritsen Rejser A/S,Herning T DKK 0 0 500,000 100* DE

The Netherlands

Kuoni Specialists B.V.,Amsterdam T EUR 0 0 20,418 100 DE

Spain

Sotavento S.A., Fuerteventura T EUR 0 0 3,060,000 100* DE

Sweden

Kuoni Nordic AB, Stockholm T SEK 0 0 23,000,000 100 DE

Nova Airlines AB, Stockholm T SEK 0 0 15,000,000 100* DE

United Kingdom

Kuoni Travel Ltd., Dorking T/D GBP 0 0 1,500,000 100 DE

CV Travel Holdings Ltd.,London T GBP 0 0 100,000 100* DE

Kirker Holdings Ltd., London T GBP 0 0 100,000 100* DE

Carrier Ltd., Cheshire T GBP 0 0 139,000 100* DE

China

Kuoni Travel (China) Ltd.,Hong Kong T HKD 0 0 4,800,000 100 DE

India

Kuoni Travel (India) Pvt. Ltd.,Mumbai T/D INR 0 0 80,230,500 100 DE

Kuoni Business Travel IndiaPvt. Ltd., Mumbai T INR 0 0 8,450,000 100* DE

Activity:T = Tour Operating

D = Destination & Accommodation ServicesConsolidation:

DE = Deconsolidated

3. Bond and revolving credit

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3. Bond and revolving creditfacility

Kuoni Travel Holding Ltd. issued a CHF 200-million 1.5%-bond in October 2013. Thebond has a duration of six years and matures on 28 October 2019.

Kuoni Travel Holding Ltd initiated early refinancing of the existing revolving creditfacility of CHF 209 million. The new revolving credit facility of CHF 200 million replacedthe existing agreement on 21 September 2015 and runs until June 2020. As at 31December 2015, the facility was used to an amount of CHF 20 million.

The new credit facility includes a financial covenant relating to the degree ofindebtedness. The maximum degree of indebtedness must not exceed 3.0 times,measured as the ratio between net debt and EBITDA of Kuoni Group. The interest to bepaid is calculated on Libor plus a margin of between 0.75% and 1.75%.

4. Equity

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4. Equity The below table shows the changes to the opening balance of equity as of 1 January2013, applying the new Swiss Accounting Law. The grey-shadowed positions have beensplit to reflect the required structure of the New Swiss Accounting Law:

CHFShare capital

Legal reserves Legal capital reserves

Legalretained

earningsOther

reserves Voluntary Retained earningsTreasury

SharesTotal

equity

Reserves from capital

contribution

Other capital

reserves

Retainedearnings

based ondecision by

annualmeeting

Net Result of the year

Equity as at 31December 2012 3,998,400 460,855,940 389,097,700 –40,939,450 813,012,590

Reclassification –460,855,940 375,322,267 77,533,673 8,000,000 –389,097,700 389,097,700 0

Transfer –18,902,300 18,902,300 0

Reclassificationof TreasuryShares –18,902,300 –18,902,300

Equity as at 1January 2013adjusted 3,998,400 0 375,322,267 58,631,373 8,000,000 0 408,000,000 –40,939,450 –18,902,300 794,110,290


CHFShare capital Legal capital reserves

Legal retainedearnings Voluntary retained earnings

TreasuryShares Total equity

Reserves from capital

contributionOther capital

reserves

Retainedearnings

based ondecision by

annualmeeting

Net Result of the year

Equity as at 1 January 2013 3,998,400 375,322,267 58,631,373 8,000,000 408,000,000 –40,939,450 –18,902,300 794,110,290

Net result –86,386,615 –86,386,615

Appropriation of retained earnings –40,939,450 40,939,450 0

Dividends –11,520,336 –11,520,336

Use of treasury shares 3,826,004 –37,882 815,300 4,603,422

Equity as at 31 December 2013 3,998,400 367,627,935 58,593,491 8,000,000 367,060,550 –86,386,615 –18,087,000 700,806,761

Net result 95,893,027 95,893,027

Appropriation of retained earnings –86,386,615 86,386,615 0

Dividends –29,006,520 –29,006,520

Use of treasury shares 9,044,647 –89,557 1,320,350 10,275,440

Equity as at 31 December 2014 3,998,400 347,666,062 58,503,934 8,000,000 280,673,935 95,893,027 –16,766,650 777,968,708

Net result –62,239,798 –62,239,798

Appropriation of retained earnings 95,893,027 –95,893,027 0

Dividends –29,378,925 –29,378,925

Use of treasury shares 13,554,290 –134,219 2,515,750 15,935,821

Equity as at 31 December 2015 3,998,400 331,841,427 58,369,715 8,000,000 376,566,962 –62,239,798 –14,250,900 702,285,806

The share capital is composed as follows:

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Nominal value Number of registered shares Book value

31 Dec 2015 31 Dec 2014 31 Dec 2015 31 Dec 2014

CHF 0.20 share A 1,249,500 1,249,500 249,900 249,900

CHF 1.00 Share B 3,748,500 3,748,500 3,748,500 3,748,500

Total share capital 3,998,400 3,998,400

Conditional capitalConditional capital issuable via the exercising of conversion rights and/or warrantslinked to bonds or similar debt issued by Kuoni Travel Holding Ltd or any of itssubsidiaries in the domestic or international capital markets amounts to a maximum ofCHF 384 000. In the case of issues of bonds or similar debt instruments to whichconversion and/or warrant rights are attached, the pre-emptive rights of the existingshareholders are excluded. The holders of the said conversion and/or warrant rightsare entitled to subscribe for new registered shares B. The acquisition of registeredshares through the exercise of conversion and/or warrant rights and any subsequenttransfer thereof are subject to the transfer and voting restrictions contained in theArticles of Incorporation. The Board of Directors is authorised to restrict or revoke thepre-emptive rights of shareholders when such bonds or similar debt instruments towhich conversion and/or warrant rights are attached are issued to finance theacquisition of other companies or parts of companies. If shareholdersʼ pre-emptiverights are revoked by a decision of the Board of Directors, the conversion and/orwarrant rights concerned will be issued at the prevailing market price, and the newregistered shares will be issued at market rates, with due regard to the current marketprice of the registered shares concerned and/or of comparable financial instrumentswith a market price. The exercise period is limited to ten years for conversion rightsand 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 exercisingsubscription or option rights granted to employees of Kuoni Travel Holding Ltd or itssubsidiaries under one or more employee stock option plans (in accordance with art. 28of the Articles of Incorporation). In such cases, new registered shares B may also beissued to employees at rates below the current stock market price, and existingshareholders shall have no subscription rights. The terms and conditions for the issueof such shares shall be determined by the Board of Directors. The acquisition ofregistered shares under such employee stock option plans and any subsequent transferthereof are subject to all the relevant statutory transfer and voting right restrictions.

Restricted transferability provisionsThe Articles of Incorporation stipulate that no more than 3% of total voting rights maybe entered in the share register in the name of any one shareholder.

Reserves from capital contributions

CHF 2015 2014

Capital contribution as at 1 January 347,666,062 367,627,935

Distribution –29,378,925 –29,006,520

Increase from treasury shares 13,554,290 9,044,647

Capital contribution as at 31 December 331,841,427 347,666,062

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The overall amount held in reserves from capital contributions is CHF 331.8 million,which is made up of the various types of contributions and share premiums minusdistributions since 1 January 1997. The Swiss Federal Tax Administration disputesreserves from capital contributions of CHF 21.1 million.

5. Treasury shares

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5. Treasury shares

Number of

registered shares BBook value CHF

1'000

Held on 1 January 2014 155,270 18,087

Purchase 0 0

Use –26,323 –1,320

Held on 31 December 2014 128,947 16,767

Purchase 0 0

Use –50,315 –2,516

Held on 31 December 2015 78,632 14,251

The remaining treasury shares held are reserved for the share purchase plan of theGroup Executive Board and senior management. The changes to treasury sharesreflect the registered shares B issued to the Board of Directors, the Group ExecutiveBoard and management.

6. Income from investments in

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6. Income from investments insubsidiaries

In the reporting year, income from subsidiaries amounted to CHF 17.3 million (2014:CHF 105.7 million). This amount represented the gain on sale of Kuoni Travel (China)Ltd. Due to the introduction of the double holding structure in the business year 2015,Kuoni Travel Investments Ltd. is Kuoni Travel Holding Ltd.ʼs only directly held subsidiary.All other shareholdings are directly or indirectly held by Kuoni Travel Investments Ltd.Dividends from Kuoni Travel Investments Ltd. may be distributed to Kuoni TravelHolding Ltd. for the first time in 2016.

7. Other financial income

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7. Other financial incomeOther financial income amounted to CHF 28.9 million (2014: CHF 28.4 million) andconsisted mainly of interest income from loans to subsidiaries.

8. Extraordinary, non-recurring

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8. Extraordinary, non-recurringor prior period expense

In the reporting period, Kuoni Travel Holding Ltd. has recognised an exchange loss ofCHF 80.5 million on its loans to and from subsidiaries. This exchange loss has beenaccumulated over the years, and has been derived mainly from a US-dollar-denominated loan to a subsidiary. In previous years this loss was covered by provisions.However, with the introduction of the double holding structure in the reporting year,these provisions were transferred to Kuoni Travel Investments Ltd., Kuoni TravelHoldingʼs directly held subsidiary.

9. Full-time equivalents

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9. Full-time equivalentsKuoni Travel Holding Ltd. does not have any employees.

10. Contingent liabilities

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10. Contingent liabilities

CHF 31 Dec 2015 31 Dec 2014

Contingent liabilities 33,270,951 699,195,973

In 2015 contingent liabilities consisted of bank guarantees related to indirectsubsidiaries of Kuoni Travel Holding Ltd. The decrease compared to prior year is due tothe sale of the tour operating business and the inbound business in India.

11. Principal shareholders

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11. Principal shareholders We are aware of the following principal shareholders as of 31 December 2015:

ShareholderNumber/category

of shares Share in %Where of

voting shares Voting rights in %Date of last disclosure

Kuoni and Hugentobler-Foundation, Stans 1,249,500/A 6.25 1,249,500 25.00 3.4.1995

Previous year 1,249,500/A 6.25 1,249,500 25.00 3.4.1995

Silchester International Investors LLP, London 702,719/B 14.06 119,952 3.00 31.12.2015

Previous year 687,702/B 13.76 119,952 3.00 31.12.2014

Veraison Capital AG, Zurich 167,138/B 3.34 119,952 3.00 31.12.2015


Schroders plc, London 192,592/B 3.85 119,952 3.00 31.12.2015

Previous year 248,651/B 4.98 119,952 3.00 31.12.2014

UBS Fund Management (Switzerland) AG, Basel 166,427/B 3.33 119,952 3.00 31.12.2015

Previous year 156,556/B 3.13 119,952 3.00 15.11.2012

Classic Fund Management AG, Triesen 191,529/B 3.83 119,952 3.00 31.12.2015


Go Investment Partners LLP, London 211,966/B 4.24 119,952 3.00 31.12.2015


1 The nominal value of share A is CHF 0.20, of share B CHF 1.00.2 2015: disclosure to Kuoni.

12. Related parties

2

1

1

1

1

1

1

1

1

1

1

1

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12. Related partiesThe Kuoni and Hugentobler-Foundation received a withholding tax exempt distributionfrom capital contribution reserve in the amount of CHF 1.9 million (gross) on the basisof their shareholdings.

13. Ownership of shares

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13. Ownership of shares Group Executive BoardAs at 31 December 2015, the members of the GEB held Kuoni shares and theconditional right to receive shares under deferred compensation and/or long-termincentive plans, as shown in the table below. The total number of shares held amountsto less than 0.5% of Kuoniʼs total shares outstanding. The total number of unvestedshares held amounts to less than 1.0% of Kuoniʼs total shares outstanding (assumingGEB members receive their target amount of shares under the PSP and RSP).

No other equity instruments are held by GEB members other than those outlined inthe table below.


Total number


Performanceshares


Restrictedshares


Performanceshares


Restrictedshares


Performanceshares


Restrictedshares


As at 31 Dec 2015

Peter Meier 1,000 0.03% 1,790 422 1,437 685 1,628 1,165

Zubin Karkaria 2,655 0.07% 903 193 720 319 1,304 444

Stefan Leser n.a. n.a. 1,286 0 974 435 0 0

Thomas Peyer 1,000 0.03% 176 67 787 350 995 669

Rolf Schafroth 3,308 0.08% 1,286 287 974 434 1,104 739

Ivan Walter 800 0.02% 311 69 551 257 1,224 816

Total 8,763 0.23% 5,752 1,038 5,443 2,480 6,255 3,833


Total numberof

shares held Voting rights

Performanceshares


Performanceshares


Restrictedshares


Performanceshares


Restrictedshares


As at 31 Dec 2014

Peter Meier 2,202 0.04% 2,491 1,790 843 1,437 1,028

Zubin Karkaria 2,284 0.05% 764 903 387 720 479

Leif Vase Larsen n.a. n.a. 1,346 0 0 0 0

Stefan Leser 1,000 0.02% 2,271 1,286 287 974 652

Thomas Peyer 361 0.01% 330 176 135 787 525

Peter Rothwell n.a. n.a. 3,443 1,898 0 0 0

Rolf Schafroth 1,277 0.03% 2,271 1,286 574 974 652

Total 7,124 0.15% 12,916 7,339 2,226 4,892 3,336

1 Member of the GEB who left the Company during 2015.

2 Appointed to CEO Kuoni Group in November 2015.3 Member of the GEB who left the Company during 2014.4 New member of the GEB since January 2015.

5 Member of the GEB who left the Company during 2013.6 New member of the GEB since 2014. The 2014 number shows the full-year allocation.

7 The total value of the conditionally granted shares under the PSP for the year 2015 amounted to CHF 2.1 million.8 The total value of the conditionally granted shares under the RSP for the year 2015 amounted to CHF 1.3. million.

7 8

1

2

3

4

5

3

6

5

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Board of DirectorsAs at 31 December 2015, the Chairman and other members of the BoD held 11 713Kuoni shares. This amounts to less than 0.5% of Kuoniʼs total shares outstanding.

The table below shows the number of Kuoni shares held by each member of theBoD. No party related to a member of the Board held any Kuoni shares. No other shareinstruments are held by members of the BoD other than those outlined in the tablebelow.

Total number of shares Blocking periods for total number of shares held

As at 31 Dec

2015 Voting rightsAs at 31 Dec

2014 Voting rights Unblocked

Blockingperiod

2016

Blockingperiod

2017

Blockingperiod 2018

Heinz Karrer, Chairman 3,349 0.08% 2,543 0.05% 1,514 404 625 806

Jae Hyun (Jay) Lee 921 0.02% 679 0.01% 227 264 188 242

John Lindquist 1,280 0.03% 1,038 0.02% 586 264 188 242

Selina Neri 242 0.00% 0 0.00% 0 n.a. n.a. 242

Adrianus (Adriaan) Nühn 1,064 0.03% 741 0.01% 227 264 250 323

David Schnell 3,210 0.08% 2,807 0.06% 2,055 439 313 403

Annette Schömmel 1,647 0.04% 1,405 0.03% 953 264 188 242

Raymond D. Webster n.a. n.a. 2,025 0.04% n.a. 264 188 n.a.

Total 11,713 0.28% 11,238 0.22% 5,562 2,163 1,940 2,500

1 Elected Chairman of the BoD at the Annual General Meeting in April 2014.2 Elected member of the BoD at the Annual General Meeting in April 2015.3 Was member of the BoD until the Annual General Meeting in April 2015.

4 The shares with blocking period 2018 were allocated in 2015. The total value of the allocated shares amounted to CHF 0.8 million.

14. Significant events after the

4

1

2

3

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14. Significant events after thebalance sheet date

On 2 February 2016 private equity company EQT has announced an all cash publictender offer for all publicly held registered shares of Kuoni Travel Holding Ltd.(SIX:KUNN) for a price of CHF 370.00 per share. On 29 February 2016 EQTʼs subsidiary,Kiwi Holding IV S.à r.l., published the corresponding prospectus. Kuoni Travel HoldingLtd.ʼs Board of Directors unanimously supports the offer and considers the valuation asfair and adequate. Should the offer succeed, then, the creditors of the bond and thesyndicated loan have the right to claim repayment of such financial debts classified asnon-current.

The financial statements were approved by the Board of Directors and released forpublication on 8 March 2016. No further events after 31 December 2015 occurred thatwould result in an adjustment to the carrying amounts of Kuoni Travel Holding Ltd.ʼsassets and liabilities.

Board of Directorsʼ proposal for

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Board of Directorsʼ proposal forthe appropriation of retainedearnings

CHF 2015 2014

Profit carried forward 0 0

Net result for the year –62,239,798 95,893,027

Retained earnings –62,239,798 95,893,027

Dividends:

Per registered share A 0 0

Per registered share B 0 0

Total dividends 0 0

Allocation to retained earnings based on decision by annual meeting –62,239,798 95,893,027

Appropriation of profit –62,239,798 95,893,027

Profit carried forward to new account 0 0

Retained earnings –62,239,798 95,893,027

The Board of Directors proposes to the Annual General Meeting not to distribute adividend.

CHF 2015 2014

Legal reserve from capital contribution 331,841,427 347,666,062

Distribution from legal reserve from capital contribution 0 29,988,000

Distribution

Per registered share A CHF 0.00 (2014: CHF 1.50) 0 1,874,250

Per registered share B CHF 0.00 (2014: CHF 7.50)

– on 3,619,553 shares entitled to distribution at 31 December 2015 0 27,146,648

– on 128,947 treasury shares set aside for the employee share plan at 31 December 2015 0 967,102

Total request for distribution 0 29,988,000

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

Report of the statutory auditor

1

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Report of the statutory auditorReport of the Statutory Auditor to the General Meeting of Shareholders of Kuoni TravelHolding Ltd, Zurich

Report of the statutory auditor on the financial statementsAs statutory auditor, we have audited the accompanying financial statements of KuoniTravel Holding Ltd, which comprise the balance sheet, income statement and notes forthe year ended 31 December 2015.

Board of Directorsʼ responsibilityThe Board of Directors is responsible for the preparation of the financial statements inaccordance with the requirements of Swiss law and the Companyʼs articles ofincorporation. This responsibility includes designing, implementing and maintaining aninternal control system relevant to the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error. The Board of Directors isfurther responsible for selecting and applying appropriate accounting policies andmaking accounting estimates that are reasonable in the circumstances.

Auditorʼs responsibilityOur responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with Swiss law and Swiss AuditingStandards. Those standards require that we plan and perform the audit to obtainreasonable assurance whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about theamounts and disclosures in the financial statements. The procedures selected dependon the auditorʼs judgment, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud or error. In makingthose risk assessments, the auditor considers the internal control system relevant tothe entityʼs preparation of the financial statements in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the entityʼs internal control system. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of accounting estimates made, as well as evaluating the overallpresentation of the financial statements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements for the year ended 31 December 2015 complywith Swiss law and the Companyʼs articles of incorporation.

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

In accordance with article 728a paragraph 1 item 3 CO and Swiss AuditingStandard 890, we confirm that an internal control system exists, which has beendesigned for the preparation of financial statements according to the instructions of theBoard of Directors.

We further confirm that the proposed appropriation of available earnings complieswith Swiss law and the Companyʼs articles of incorporation. We recommend that thefinancial statements submitted to you be approved.

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KPMG AG

Martin Schaad


Tobias Wölfle



KPMG AG

Martin Schaad


Tobias Wölfle



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Agenda The Financial Report and the information on Corporate Governance constitute anintegral 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 2016Kuoni Group will be providing information on its further business performance on thefollowing dates:

19 August 2016 | Half-Year Results 2016

10 November 2016 | Q3/9 months Results 2016

The date for an extraordinary General Meeting will be communicated in due time. Theordinary Annual General Meeting, announced for 26 April 2016, will not take place andhas been postponed to a later date.

Terms of Use/Data Protection


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Terms of Use/Data ProtectionPolicy

By accessing the website of Kuoni Travel Holding Ltd (the “Website”) the user acceptsthe Terms of Use set out herein. Throughout these Terms of Use the term “Kuoni” refersto Kuoni Travel Holding Ltd. and “Kuoni Group” refers to Kuoni and all companiesworldwide directly or indirectly controlled by Kuoni. Any special agreements withrespect to individual services or products provided by Kuoni other companies belongingto the Kuoni Group shall be complementary to these Terms of Use. In the event of anyconflict the provisions contained in any such special agreement shall prevail.

1. Limitation of LiabilityKuoni disclaims, without limitation, all liability for any loss of profits and for any direct,indirect, special, consequential or punitive damages, costs, losses or liabilitieswhatsoever arising out of the access to and use of (including inability to use) theWebsite. The information published on the Website is subject to change without noticeand Kuoni makes not representation (neither express nor implied) that the informationis accurate, up to date or complete. In particular, Kuoni shall have no responsibility toupdate, revise or remove any outdated information from the Website or to mark it asbeing outdated.

2. Disclaimer regarding forward looking statements The Website or any documents provided on the Website may contain statements thatconstitute forward-looking statements, which may include, without limitation,statements relating to Kuoniʼs financial condition, results of operations, business andcertain of Kuoniʼs strategic plans and objectives.

Because these forward-looking statements are subject to risks and uncertainties,actual future results may differ materially from those expressed in or implied by thestatements. Many of these risks and uncertainties relate to factors which are beyondKuoniʼs ability to control or estimate precisely, such as future market conditions,currency fluctuations, the behaviour of other market participants, the actions ofgovernmental regulators and other risk factors detailed in Kuoniʼs past and future filingsand reports, including media releases, reports and other information posted on theWebsite or in other form.

Users are cautioned not to put undue reliance on forward-looking statements, whichspeak only of the date of this communication. Kuoni disclaims any intention or obligationto update and revise any forward-looking statements, whether as a result of newinformation, future events or otherwise.

3. Links to other websites Links on the Website may lead to third-party websites, which are beyond Kuoniʼscontrol. Accordingly, Kuoni does not accept any responsibility for the accuracy,completeness and legality of such third-party websites.

4. Intellectual Property rights The entire content of the Website is subject to copyright with all rights reserved. Thetrademarks displayed on the Website belong to Kuoni. Nothing contained on theWebsite should be construed as granting any license or right to use any of suchtrademarks or other intellectual property (such as photographs etc.).


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5. Data Protection 5.1 Collecting Information (a) Website DataWhen the Website is accessed, various data is automatically collected from thecomputerʼs log files. Kuoni distinguishes between master data (e.g. IP address, date andtime of access, etc.) and transaction data (e.g. name of file accessed, click path, etc.).Such data is analysed in anonymized form for statistical purposes, for example to seehow many times the portal is accessed in one day.

Furthermore, all the data sent by the User (e.g. name, search data, booking requests,form data, etc.) is stored, even if it is not part of a completed transaction (e.g. an order).Such data is deleted after a maximum of 30 days.

(b) CookiesKuoni, like most internet services, may use cookies to make the Website easier forUsers to use. Cookies are a component of the browser software and save informationon the computer of the User about his/her use of the Website. This lets Kuoni recognisethe computer of the User as one on which has already used the Website.

Most browsers accept cookies automatically. However, the User can change thebrowser settings so that cookies are not accepted or only accepted with his/herapproval. The Website can also be used without cookies, but it is easier to use if cookiesare switched on. Users can delete all the cookies from their hard disk at any time, ordeactivate them in their browser settings to prevent the data about your use of theWebsite being transmitted to Google.

(c) Google Analytics dataThe Website uses Google Analytics, a web analytics service provided by Google, Inc.(“Google”). Google Analytics also uses cookies. Anonymous data (including the Users IPaddress) about the use of the Website is transmitted to and stored on a Google server.Google uses this information to prepare reports for Kuoni about website activity. Byusing the Website, the User consents to Google processing the data recorded abouthim/her. More about how Google Analytics protects data at:http://www.google.com/intl/de_ALL/privacy.html.

5.2 Third PartiesIn compliance with data protection laws, the Users data may be passed on to thirdparties that process this data on behalf of Kuoni or other companies of the Kuoni Group.This may involve transferring the data abroad.

The Users data may be passed on within the Kuoni Group and used by the othercompanies of the Kuoni to the same extent as Kuoni is entitled to use it. It is treatedconfidentially and not made accessible to other third parties unless this is required bythe applicable law and especially by the responsible authorities, or if this becomesnecessary to protect or enforce the legitimate interests of Kuoni or other companies ofthe Kuoni Group.

5.3 Usind the DataThe collected data is treated in good faith and used by the Kuoni Group to carry outbusiness transaction, to improve the functions on the Website, to offer competitiveservices, and for purposes of analysis, marketing and consultancy.


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In particular, the Users data may be used to offer the User a personalised service and tofacilitate optimum use of the Website. In addition, Kuoni may send the User offers andinformation that are of personal interest to the User (though the User can tell Kuoni atany time that he/she does not or no longer want to receive information).

5.4 Personality Profile Kuoni draws the Users attention to the fact that the consolidation of collected data mayconstitute a “personality profile” (depending on the type and amount of data available).A personality profile is created when a collection of data enables significant aspects ofthe Users personality to be evaluated. Kuoni is the owner of the collected data and maypass this data on to third parties that process it on behalf of Kuoni or other companiesof the Kuoni Group. This may involve transferring the data abroad.

6. Modifications of these termes of use Kuoni reserves the right to revise these Terms of Use at any time. The user isresponsible for regularly reviewing these Terms of Use. Continued use of the Websitefollowing any such changes shall constitute the userʼs acceptance of such changes.

© Copyright by Kuoni Travel Management Ltd, 2016 – all rights reserved.

Imprint


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Imprint PublisherKuoni Travel Management LtdCorporate CommunicationsNeue Hard 7, CH-8005 Zürichtel +41 (0)44 277 48 28www.kuoni.com2015.kuoni-report.comTwitter: www.twitter.com/kuonigroupFacebook: www.facebook.com/KuoniGroup

Concept and DesignNoord, Swiss Graphic Design AgencyRoger Mazzucchelli, Markus Reichenbach, Katja Rüfenacht

Kuoni GroupPeter Brun, Nina Frey

AuthorsSibylle Baumgartner, Peter Brun, Daniel Eberhard, Christoph Frank, Nina Frey, JuliaLange, Ricardo Riva, Antonio Sacco, Susanne Trier, Livia Würth

Project ManagerNina Frey

PhotographyKilian Kessler

TranslationsJames Knight, Madoc Skinner and Apostroph AG

Publishing Systemns.wow by Multimedia Solutions AG (Neidhart+Schön)


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with compliments 2015.kuoni-report.com

kuoni.com

than

k yo

u fo

r rea

ding

Kuoni Travel Management LtdNeue Hard 78005 Zurich, SwitzerlandPhone +41 44 277 44 [email protected]@kuoni.com


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