Financial statement

General

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

Activities

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

Continuity

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

General principles for valuations

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

Shareholder structure

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

Principles of consolidation

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

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

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

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

Functional currency

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

Transactions, receivables and liabilities

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

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

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

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

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

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

The assets and liabilities of the participations included in the consolidation at a functional currency that is different than the presentation currency will be converted at the exchange rates on the balance sheet date. The profits and losses are converted at the exchange rates at the time of transaction.
The resulting conversion differences will be credited or charged directly to the equity in the statutory conversion differences reserve.

Use of estimates

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

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

Financial tools

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

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

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

Principles for the valuation of assets and liabilities

Assets and liabilities are stated at their nominal value, unless otherwise indicated in the separate items in the explanatory notes.

Intangible fixed assets

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

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

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

Tangible fixed assets

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

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

Financial fixed assets

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

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

Special depreciation of fixed assets

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

Receivables

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

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

Stock

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

Securities

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

Liquidities

Liquidities are at the disposal of the company.

Provisions

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

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

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

Pension provision

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

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

Long-term liabilities

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

Short-term liabilities

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

(Deferred) corporation tax

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

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

Principles for determination of results

Revenue

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

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

Costs for outsourced work

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

Depreciation

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

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

Financial revenue and expenditure

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

Participating interest results

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

Corporation tax

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

Cash flow statement

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

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

Consolidated balance sheet, assets

Amounts x € 1,000

Consolidated balance sheet, assets
  Ref.   2017   2016
           
ASSETS          
           
Fixed assets          
           
Intangible fixed assets 1.1.1. 8,464   10,239  
Tangible fixed assets 1.1.2. 165,653   170,787  
Financial fixed assets 1.1.3. 1,134   1,134  
      175,251   182,160
           
Current assets          
           
Stock   469   315  
Receivables 1.1.4. 27,086   22,637  
Securities   41   41  
Cash   5,473   742  
      33,069   23,735
           
      208,320   205,895

Consolidated balance sheet, liabilities

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

Consolidated balance sheet, liabilities
  Ref.   2017   2016
           
LIABILITIES          
           
Shareholder equity 1.1.5.        
           
Subscribed capital   2,730   2,730  
Share premium   22,006   22,006  
Statutory exchange reserve   ‑397    
Other reserves   60,834   58,070  
Unappropriated profits   5,271   5,048  
      90,444   87,854
           
Provisions 1.1.6.        
           
Deferred taxes   180   535  
Other provisions   1,457   1,506  
      1,637   2,041
           
Debts          
           
Long-term liabilities 1.1.7.   55,603   61,395
           
Short-term liabilities 1.1.8.   60,636   54,605
           
      208,320   205,895

2.1. Consolidated profit and loss account

Consolidated profit and loss account

Amounts x € 1,000

Consolidated profit and loss account
  Ref.   2017   2016
           
Net turnover 2.1.1. 123,287   120,202  
           
Sum of operating revenues     123,287   120,202
           
Costs of outsourced work and other external costs 2.1.2. 50,901   47,084  
Wages and salaries 2.1.3. 24,306   23,547  
Social security contributions   3,338   3,257  
Pension contributions   2,197   2,177  
Depreciation on intangible and tangible fixed assets 2.1.4. 14,470   14,979  
Other operating expenses (including other personnel costs) 2.1.5. 18,507   19,718  
           
Sum of operating expenses     113,719   110,762
           
Operating results     9,568   9,440
           
      284   16
      ‑2,572   ‑2,608
           
  2.1.6.   ‑2,288   ‑2,592
           
Profit on ordinary activities before tax     7,280   6,848
Taxes on profit on ordinary activities 2.1.7.   ‑2,009   ‑1,800
           
Results after tax     5,271   5,048

3.1. Consolidated cash flow statement

Consolidated cash flow statement

Amounts x € 1,000

Consolidated cash flow statement
      2017   2016
           
Cash flow from operational activities          
           
Operating profit     9,568   9,440
           
Adjustments for:          
Depreciation on intangible and tangible fixed assets   14,470   14,979  
Changes in long-term liabilities   -   1,459  
Changes in provisions   ‑404   ‑67  
      14,066   16,372
           
Changes in stock and receivables   ‑4,603   6,613  
Changes in short-term debts (excluding bank credit)   7,387   ‑2,513  
      2,784   4,100
           
Paid interest   ‑1,939   ‑1,936  
Paid taxes on profit on ordinary activities   ‑2,062   ‑1,783  
      ‑4,001   ‑3,719
           
Total cash flow from operational activities     22,417   26,192
           
Cash flow from investment activities          
Net investment in tangible fixed assets   ‑7,765   ‑18,270  
Net investment in intangible fixed assets   ‑530   ‑3,916  
Net disinvestment in financial fixed assets      
           
Total cash flow from investment activities     ‑8,295   ‑22,186
           
Cash flow from financing activities          
Dividend payment   ‑2,953   ‑3,207  
    ‑6,423   ‑571  
Payment of long-term loans in financial year   ‑15   ‑15  
           
Total cash flow from financing activities     ‑9,391   ‑3,793
           
Changes in cash and bank credit     4,731   213
           
Cash and bank credit as at 1 January     742   529
           
Cash and bank credit as at 31 December     5,473   742

Consolidated overview of the overall result

Consolidated overview of the overall result

Amounts x € 1,000

Consolidated overview of the overall result
  Ref.   2017   2016
           
Consolidated net results after tax allocated to the legal entity     5,271   5,048
           
Transation differences foreign participations   ‑397   -  
           
Total of the direct mutations in the equity capital of the legal entity as part of the group equity     ‑397   -
           
Total results of the legal entity     4,874   5,048

Notes on the consolidated balance sheet as on 31 December 2017

1.1.1. Intangible fixed assets

Intangible fixed assets

Amounts x € 1,000

Intangible fixed assets
  Exhibition titles Software Other Work in
progress
Total
           
Cost as at 1-1-2017 7,012 8,610 1,684 376 17,682
  - 316 - ‑316
Additions 192 338 530
Finished work in progress ‑762 ‑762
Disposals ‑51 ‑93 ‑144
Cost as at 31-12-2017 6,199 9,025 1,684 398 17,306
           
Depreciation and amortisation as at 1-1-2017 593 5,675 1,175 7,443
Depreciation 407 1,055 53 1,515
Translation differences ‑28 - - - ‑28
Amortisation on disposals ‑10 ‑78 - ‑88
Depreciation and amortisation as at 31-12-2017 962 6,652 1,228 8,842
           
Net Book value as at 1-1-2017 6,419 2,935 509 376 10,239
           
Net Book value as at 31-12-2017 5,237 2,373 456 398 8,464

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

The ‘other’ category primarily concerns the use of a lounge in the Amsterdam ArenA. These rights will be depreciated until the year 2026. Disinvestments are related to assets that are no longer used.

1.1.2. Tangible fixed assets

Tangible fixed assets

Amounts x € 1,000

Tangible fixed assets
  Buildings,
installations
and land
Inventory Work in
progress
Total  
           
Cost as at 1-1-2017 331,141 28,422 3,113 362,676  
Additions 534 1,108 6,123 7,765  
Finished work in progress 3,973 184 ‑4,157  
Disposals ‑34 ‑642 ‑28 ‑704  
Cost as at 31-12-2017 335,615 29,071 5,051 369,737  
           
           
Depreciation and amortisation as at 1-1-2017 170,538 21,351 191,889  
Depreciation 10,185 2,667 12,851  
Amortisation on disposals ‑34 ‑621 ‑656  
Depreciation and amortisation as at 31-12-2017 180,688 23,396 204,084  
           
Net Book value as at 1-1-2017 160,603 7,071 3,113 170,787  
           
Net Book value as at 31-12-2017 154,927 5,676 5,051 165,653  

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

In 2017 the RAI renewed its long-term land lease retroactively from 1 November 2016. The paid land lease until 2066 amounts to € 3,223,443 (2016: € 3,289,452).
Disinvestments are related to fixed assets that are no longer used.

1.1.3. Financial fixed assets

Financial fixed assets

Amounts x € 1,000

Financial fixed assets
  Total        
           
Balance as at 1-1-2017 1,134        
Other changes        
           
Balance as at 31-12-2017 1,134        

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

1.1.4. Current assets, receivables

Current assets, receivables

Amounts x € 1,000

Current assets, receivables
  2017 2016      
           
Trade receivables 15,839 14,233      
Allowance for doubtful debts ‑1,280 ‑1,833      
  14,559 12,400      
Other receivables 4,449 4,315      
Receivables from shareholders 384      
Corporate tax 136      
Accrued assets 7,694 5,786      
           
  27,086 22,637      

The other receivables include, among other items, yet to be billed invoices to an amount of € 3,700,756 (2016: € 2,918,384).

The accrued assets include, among other items, costs paid in advance to the amount of € 1,004,825 (2016: € 926,020) and paid personnel costs for future exhibitions to an amount of € 5,833,054 (2016: € 4,877,950).

1.1.5. Shareholder equity

For an explanation of the mutations in the shareholder equity in 2017 and 2016, see the notes on the company annual accounts of RAI Holding B.V. (see 4.1.2.).

1.1.6. Provisions

Provisions

Amounts x € 1,000

Provisions
  Deferred
taxes
Other Total    
           
Balance as at 1-1-2017 535 1,506 2,041    
Allocation 85 239 324    
Withdrawal ‑440 ‑288 ‑728    
           
Balance as at 31-12-2017 180 1,457 1,637    

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

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

1.1.7. Long-term liabilities

Long-term liabilities

Amounts x € 1,000

Long-term liabilities
  2017 2016      
           
Loans Deutsche Bank AG 24,000 26,000      
Loan Coöperatieve Rabobank Amsterdam U.A. 24,000 26,000      
Loan Triodos Bank 239 253      
Loan Klimaatfonds Amsterdam 100 100      
Other liabilities 7,264 9,042      
           
  55,603 61,395      

Overview of long-term loans

Per 31 December 2017, amounts x € 1,000

Overview of long-term loans
  Principle Payment in
book year
Amount
remaining
   
           
Loan Deutsche Bank AG 26,000 26,000    
Loan Coöperatieve Rabobank Amsterdam U.A. 26,000 26,000    
Loan Triodos Bank 268 15 253    
Loan Klimaatfonds Amsterdam 100 100    
Other liabilities 8,207 164 8,043    
           
  60,575 179 60,396    
Minus short-term part of long-term liabilities     4,793    
           
      55,603    

In 2013 the RAI entered into a credit agreement with Deutsche Bank AG and Coöperatieve Rabobank Amsterdam U.A. This credit agreement comprises an overdraft facility of € 31.25 million as well as two loans totalling €52 million (50% Deutsche Bank AG and 50% Coöperatieve Rabobank Amsterdam U.A.) until 2020.

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

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

In 2013 the RAI entered into an interest swap agreement, based on which RAI Holding B.V. pays an interest rate of 1.54% over an amount of €48 million.

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

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

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

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

Of the long-term liabilities, a total of € 6.8 million has a term of over five years.

1.1.8. Short-term liabilities

Short-term liabilities

Amounts x € 1,000

Short-term liabilities
  2017 2016      
           
Bank overdrafts 3,777 10,200      
Short-term part of long-term liabilities 4,793 793      
Debts to shareholders 670      
Advance payments 25,134 20,284      
Debts to suppliers 4,459 5,694      
Corporation tax 175      
Other taxes and social security contributions 1,732 1,876      
Accruals and deferred income 20,566 15,088      
           
  60,636 54,605      

The accrued liabilities largely consist of receivable invoices for costs made to an amount of € 9,447,463 (2016: € 6,099,937) and accrued liabilities related to personnel to an amount of € 3,658,216 (2016: € 3,364,665).

Off-balance sheet information

  1. In 2017, COD/Being Development and the RAI entered into a rental agreement related to the parking garage of the NHOW Hotel. It will be implemented as soon as the parking garage is delivered in 2019 and is valid for 20 years. The initial rental price is € 650,000 a year and the rent will be indexed annually. The total contractual obligation amounts to € 13,000,000. Based on the expected delivery date of the parking garage, an amount of € 0 is due within one year, and an amount of € 2,275,000 is due within five years. The remaining part relates to the period from 2023 to 2039 (2016: none).
  2. No bank guarantees were issued (2016: none).
  3. There are operating lease commitments for 38 cars (2016: 44). At the end of the financial year the contractual commitments totalled € 955,680 (2016: € 910,091), of which € 432,025 is due within one year. The remainder is due within five years.
  4. A total of € 569,671 (2016: € 588,686) in lease payments was made in 2017.
  5. In 2017 an agreement was reached with the Municipality of Amsterdam, Land Lease and Land Issuance and Development department on an advanced change of the long-term land lease agreement. The new agreement has a term of 50 years until 30 October 2066. The available part of the capitalised acquired long-term land lease as of 1 November 2016 will be depreciated over the new term of 50 years. The total liability for long-term land lease (until 2066) is €12,976,314 of which an amount of €259,526 is due within one year. An amount of €1,297,631 is due within five years. The remainder involves the period 2023 to 2066.
  6. RAI Holding B.V. is the leading company of a group that is treated as a single entity for corporation and turnover tax purposes. The other members of the group are: RAI Amsterdam B.V., RAI Solar Energy B.V., Amsterdam RAI Catering B.V. and Arfora B.V.
  7. Each company is severally liable for the liabilities of the fiscal entity.

Financial tools

The risks associated with the financial tools are clarified below.

Credit risk

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

Currency risk

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

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

Interest risk

Interest risks mainly concern long-term loans. RAI Amsterdam B.V. has interest rate swap contracts to cover interest risks. In order to cover the interest risk RAI Amsterdam B.V. has concluded interest swap contracts. In order to fix the interest rates, interest rate swaps amounting to € 44 million at the end of 2017 were concluded in 2013 for the period until 2020. RAI Amsterdam B.V. pays an interest rate of 1.54% on the interest swap with Deutsche Bank AG/Coöperatieve Rabobank Amsterdam U.A. A variable interest rate of three months Euribor plus an individual surcharge is paid on the bank overdrafts. The amounts covered by the interest swaps are smaller than or equal to the outstanding principle of the loans from Deutsche Bank AG/Coöperatieve Rabobank Amsterdam U.A. On 31 December 2017, the interest swaps had a fair value of minus € 1,801,264 (2016: minus € 2,696,262). The nominal value will be reduced to zero over the remaining interest swap period (until 2020).

Notes on the consolidated profit and loss accounts 2017

2.1.1. Turnover

Turnover

Amounts x € 1,000

Turnover
  2017 2016      
           
By geographical area          
           
The Netherlands 116,720 116,143      
Other countries 6,567 4,059      
           
  123,287 120,202      
           
By activity          
           
Exhibitions and events 37,519 50,236      
Letting to third parties 23,511 19,787      
Catering 18,129 14,461      
Parking 5,335 5,036      
Hotel commissions 2,743 2,555      
Facility Services 33,250 26,130      
Other 2,800 1,997      
           
  123,287 120,202      

2.1.2. Costs of outsourced work or other external costs

Costs of outsourced work or other external costs

Amounts x € 1,000

Costs of outsourced work or other external costs
  2017 2016      
           
Exhibitions and events 22,014 16,894      
Letting to third parties 2,149 2,401      
Outsourcing costs 5,199 7,131      
Catering 5,580 5,179      
Personnel 8,121 7,487      
Marketing costs 3,807 3,300      
Other 4,031 4,692      
           
  50,901 47,084      

2.1.3. Personnel costs

The salary (including benefits) paid to Board members (2) in 2017 totalled € 716,323. In 2016 the salary paid to (former) Board members totalled (3) € 660,074.

The salary paid to Supervisory Board members (average of 4) amounted to € 92,713 (in 2016: € 104,125, average of 4).

Average number of employees

In FTE, working for the group

Average number of employees
  2017 2016      
           
In the Netherlands 376 374      

Personnel, by discipline

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

Personnel, by discipline
  2017 2016      
           
BY DISCIPLINE          
           
Commercial 53% 51%      
Operational 35% 36%      
Financial/staff 12% 13%      
Total 100% 100%      

2.1.4. Depreciation on intangible and tangible fixed assets

The depreciation on intangible and tangible fixed assets consists of € 14.1 million in regular depreciations and € 0.1 in book losses on disinvested tangible fixed assets.

2.1.5. Other operational costs

Other operational costs

Bedragen x € 1.000

Other operational costs
  2017 2016      
           
Building costs 8,622 9,552      
Agency costs 708 694      
Automation costs 4,678 4,404      
Consultancy costs 2,523 2,490      
Travel, accommodation and representation costs 667 916      
Other personnel costs 1,033 1,253      
Other general operational costs 276 409      
           
  18,507 19,718      

Auditors’ costs
In accordance with Article 382a Book 2 of the Netherlands Civil Code, an amount of € 103,399 (2016: € 93,260) is due to BDO Audit & Assurance B.V., of which € 100,000 (2016: € 90,000) relates to the annual audit, and € 3,399 to other audit assignments.

2.1.6. Interest revenue and expenses and similar

Interest revenue and expenses and similar

Amounts x € 1,000

Interest revenue and expenses and similar
  2017 2016      
           
Interest received and similar income 284 16      
Interest costs and similar costs ‑2,572 ‑2,608      
           
Interest costs and similar costs in the profit and loss accounts ‑2,288 ‑2,592      

The interest costs and similar consist of € 2,571,986 in owed interest and € 283,906 in revenue from exchange revenue.

2.1.7. Taxes

Taxes

Amounts x € 1,000

Taxes
  2017 2016      
           
Tax charged based on the commercial result ‑352 ‑369      
Tax deferral changes 2,317 2,133      
Settled taxes and other securities 44 36      
           
Tax charged in the profit and loss account 2,009 1,800      

The effective taxation rate over 2017 is 27.6% (2016: 26.2%) which is in line with the generally applicable tax rate in the Netherlands.

4.1. Company balance sheet (before appropriation of results)

Company balance sheet

Before appropriation of results, amounts x € 1,000

Company balance sheet
ASSETS ref.   2017   2016
           
Fixed assets          
           
Financial fixed assets 4.1.1. 80,340   105,462  
           
  4.1.3. 11,367   -  
      91,707   105,462
           
LIABILITIES          
           
Shareholder equity 4.1.2.        
           
Issued capital   2,730   2,730  
Share premium   22,006   22,006  
Statutory exchange reserve   ‑397    
Other reserves   60,834   58,070  
Unappropriated profit   5,271   5,048  
      90,444   87,854
           
Debts          
Debts to credit institutions     1,263   -
Debts to group companies 4.1.3.     17,608
           
      91,707   105,462

5.1. Company profit and loss account

Company profit and loss account

Amounts x € 1,000

Company profit and loss account
  2017 2016      
           
Company result after taxes      
Result from participating interest after taxes 5,271 5,048      
           
Net result 5,271 5,048      

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

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

Notes on the company balance sheet as on 31 December 2017

4.1.1. Financial fixed assets

Financial fixed assets

Amounts x € 1,000

Financial fixed assets
  Participation in
group companies
     
         
Balance as at 1-1-2017 105,462      
Dividend ‑30,000      
Statutory exchange reserve ‑397      
Other mutations 4      
Result 5,271      
         
Balance as at 31-12-2017 80,340      

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

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

4.1.2. Shareholder equity

Shareholder equity

Amounts x € 1,000

Shareholder equity
  Share capital Share
premium
Statutory exchange reserve Other
reserves
Unapprop. profit Total
             
Balance as at 1-1-2016 2,730 22,006 57,733 4,214 86,683
Appropriation of profit 4,214 ‑4,214
Result book year 5,048 5,048
Dividend ‑3,877 ‑3,877
             
Balance as at 31-12-2016 2,730 22,006 58,070 5,048 87,854
             
             
Balance as at 1-1-2017 2,730 22,006 58,070 5,048 87,854
Appropriation of profit 5,048 ‑5,048
Statutory exchange reserve ‑397 ‑397
Result book year 5,271 5,271
Dividend ‑2,284 ‑2,284
             
Balance as at 31-12-2017 2,730 22,006 ‑397 60,834 5,271 90,444

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

4.1.3. Receivables from group companies

Receivables from group companies

Amounts x € 1,000

Receivables from group companies
  Debts to group companies      
         
Balance as at 1-1-2017 ‑17,608      
Dividend uitkering ‑2,284      
Dividend 30,000      
Overige mutaties 1,259      
         
Balance as at 31-12-2017 11,367      

As was the case last year, no interest is charged on receivables from group companies.

Personnel

As was the case in 2016, the company did not employ any staff in 2017.

Off-balance sheet information

Letters of liability in accordance with Article 403 of Book 2 of the Netherlands Civil Code have been issued and deposited for the participating interests in RAI Amsterdam B.V., RAI Solar Energy B.V. and Amsterdam RAI Catering B.V.

Amsterdam, 22 March 2018

Executive Board of RAI Holding B.V.

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

Supervisory Board of RAI Holding B.V.

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

Proposed appropriation of profit

Proposed appropriation of profit

The general meeting of shareholders is proposed to pay a dividend of € 2.293 million over 2017. The result after tax over 2017 is included in the unappropriated profit item under shareholder equity.

Events after the balance sheet date

None.