Information about this report
Viseca Holding AG is a company domiciled in Zurich (Switzerland) which, together with its subsidiaries (the group called Viseca), provides financial services in the business field of cashless payment solutions.
As a result of the bonds issued (Bonds CHF domestic), Viseca Holding AG is listed in Switzerland on the Swiss Reporting Standard of SIX Swiss Exchange with ISIN number CH0246921537.
Key accounting principles
These unaudited, consolidated financial statements give a true and fair view of the Viseca’s financial performance and financial position. They have been prepared in abbreviated form according to Swiss GAAP FER 31. These interim financial statements do not include all information and disclosures that are required in the annual financial statements. It should therefore be read in conjunction with the consolidated financial statements at 31 December 2019.
The consolidated financial statements are based on the financial statements of the Viseca companies prepared in accordance with uniform accounting principles as at 30 June. They follow the principle of historical cost unless a standard prescribes a different measurement basis for a financial statement item or a different measurement basis is applied if this is provided as an option. The relevant accounting policies for understanding the consolidated financial statements are set out in the specific notes to the financial statements.
Assets are reviewed each year for indications of impairment. If there are any indications, the recoverable amount is determined and if this exceeds the carrying amount, an appropriate posting is made in the income statement.
The consolidated financial statements are presented in Swiss francs, the Company’s functional currency. Unless noted otherwise, all financial data in Swiss francs have been rounded to the nearest thousand. This may result in rounding differences.
Group companies include those companies that are directly or indirectly controlled by Viseca Holding AG. Control is defined as the power to govern the financial and operating policies of an entity so as to benefit from them. This is usually the case when the Group holds more than half of the voting rights in an entity’s share capital. Group companies are consolidated from the date on which control is transferred to the Group. Subsidiaries held for sale are excluded from the scope of consolidation from the date on which control ceases.
Capital consolidation is based on the purchase method. This means that the purchase price or carrying amount of the interests is offset against the Group’s share in the revalued equity of the consolidated companies at the time of acquisition or first-time consolidation. Any goodwill from the purchase of interests is capitalised and amortised over five years. All intercompany transactions, balances and unrealised gains and losses from transactions between Group companies are eliminated in full.
Non-controlling interests in equity and the Group's profit for the period are shown separately in the balance sheet and income statement.
Changes in the scope of consolidation
The following changes to the scope of consolidation took place in the reporting period:
In April 2020 the company for future issuing credit cards (issuing business) was founded and in May 2020 the mergers of Accarda AG and Aduno Finance AG with Viseca Card Services SA took place.
Cashgate AG, which was responsible for the private credit and leasing business, was sold on 2 September 2019.
The detailed information can be found under section 4.1.
Foreign currency translation
Foreign currency transactions in Group companies
The foreign currency transactions and items contained in the separate financial statements of the consolidated companies are translated as follows: Foreign currency transactions are translated into the posting currency at the exchange rate as at the transaction date (spot rate). At period-end, monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate on the reporting date and booked to the income statement.
Translation of financial statements to be consolidated
The consolidated financial statements are presented in Swiss francs. Assets and liabilities of Group companies with different currencies are translated at period-end rates (closing rates), equity at historical rates, and the income statement and cash flow statement at average rates for the period. The resulting translation differences are recognised directly in equity. If a foreign Group company is sold, the associated cumulative foreign currency differences are transferred to the income statement.
The following principal exchange rates have been used:
Assumptions and estimations of the management
In order to prepare the consolidated financial statements in accordance with Swiss GAAP FER, the management must make estimations, evaluations and assumptions that have an impact on the application of accounting and valuation methods and on the amounts shown for assets, liabilities, income and expenses. The estimations and associated assumptions are based on previous experience and various other factors deemed useful. The actual results may differ from these estimations.
The estimations and underlying assumptions are regularly reviewed. Changes in estimations relating to the financial reporting are recognised in the periods currently under review and future periods affected.
This section describes the operational performance of Viseca. The segment reporting reflects the segment results used at the highest management level.
1.1 Segment reporting (unaudited)
External segment reporting is based on the internal reporting that is used by the Executive Board to guide the company.
Due to the sale of cashgate AG (Consumer Finance business unit), internal management reporting and external segment reporting were adjusted in 2019. This means that the former Internal Financing segment is no longer reported separately.
The following table contains information about the business segments at 30 June:
1.2 Further information on selected revenue items
Additional information on commission income
Additional information on other income
1.3 Further information on selected operating expenses items
Expenses are recognised on an accrual basis, i.e. at the time they are incurred. The table below provides information on selected expense items.
2 Operational assets
The following section presents the receivables from the Payment business.
2.1 Receivables from the business unit Payment
The level of receivables from cardholders, credit card business fluctuates as of the balance sheet date. A customer pays his credit card bill once a month. The time of payment fluctuates from month to month and depends, among other things, on when the banks process the LSV collections. If an LSV collection is terminated after the end of the month, an increased level of receivables may result. This fluctuation has no correlation either with the credit quality of customers or with payment behaviour.
Management of credit risk in the Payment business
It is in the nature of the credit card business that private or corporate customers have temporary liabilities with the card company.
Risk and credit management is a core process in the credit card business and Viseca therefore runs sophisticated risk assessment tools and delinquency reports to monitor and assess risk exposure. All incoming payments of customers are closely monitored.
Viseca issues credit cards on behalf of various distribution partners. Viseca has entered into agreements with some of its partners, so that the partner bears the risk of default for any receivable outstanding from cardholders. If a cardholder becomes delinquent, the outstanding amount is paid in full by the partner. If a cardholder has a direct relationship with Viseca and not via a partner, Viseca bears the default risk.
Receivables from cardholders and others are measured at fair value. The effective interest rate method is used for customers with an instalment facility or customers in default.
Impairment losses are booked to the allowance accounts for receivables unless Viseca is of the view that the amount owed is not recoverable. In this case the amount deemed uncollectible is written off directly against the receivable.
Expected credit loss model
Allowances for doubtful accounts are calculated on the basis of the expected credit loss (ECL) model. Receivables are placed into one of the three stages on the basis of which the ECL is calculated.
Receivables are allocated from Stage 1 to Stage 2, when it is 60 days past due. Viseca allocates a customer to Stage 3 after debt management reminders have proved unsuccessful and the customer has had to be transferred to the pre-collection and legal collection processes. Receivables in Stage 3 that are older than 2 years are written off.
The loss allowance is adjusted based on management’s judgement as to whether actual losses are likely to fall above or below historical trends given current economic and loan conditions. Management deems the loss allowance for doubtful debts for the business unit Payment to be adequate.
3 Financing and risk management
The following describes the guidelines and procedures that are applied in managing the capital structure and financial risks. Viseca seeks to ensure that it has an appropriate equity base in order to retain the trust of investors, creditors and the market.
3.1. Interest-bearing liabilities
Changes in interest-bearing liabilities are mainly changes to cash flows from financing activities and are disclosed in the consolidated cash flow statement.
Terms and debt repayment schedule
Interest-bearing financial liabilities are generally recorded at nominal value. Non-current financial liabilities (bonds) are recognized at amortized cost.
3.2 Share capital and reserves
At 30 June 2020, the share capital of the parent company Viseca Holding AG consisted of 25,000 registered shares with a nominal value of CHF 1,000 each.
The statutory reserves not available for distribution amounted to CHF 5.0 million as at 30 June 2020.
The following dividends were declared and paid by Viseca:
The Board’s policy is to maintain an adequate equity base so as to maintain the confidence of investors, creditors and the market. The Board of Directors monitors the return on capital, which Viseca defines as the total shareholders, equity and the development of dividends paid to shareholders.
3.3 Risk management
As a financial services provider Viseca is subject to constant change and is thus also confronted with opportunities and risks that can have a decisive influence on its ability to achieve its strategies and goals.
Overall responsibility for risk management lies with the Board of Directors, which approves the principles for risk management. The Audit and Risk Committee and the internal auditors support the Board of Directors in the execution of its responsibilities. The Executive Board is responsible for the implementation of the risk management standards defined in the risk management regulations and the design, implementation and continuous review of the Internal Control System (ICS).
The following risks have been identified as significant risks for Viseca:
The overall risks include environmental, business and operational risks, which are systematically identified and either accepted or mitigated using suitable measures within the scope of risk affinity.
Financial risks: Credit risk
Viseca is exposed to the risk of counterparty default as a result of its operating activities. This risk exists mainly in relation to receivables from customers of Viseca and depends primarily on the individual characteristics of each customer. Geographically, credit risk is concentrated in Switzerland where Viseca mainly operates.
Financial risks: Liquidity risk
Liquidity risk is the risk that Viseca will not be able to meet its financial obligations as they fall due. Liquidity risk arises if Viseca is unable to obtain under economic conditions the funds needed to carry out its operations. Viseca closely monitors its liquidity needs and also maintains liquidity forecasts and validates its validation models.
Financial risks: Market risk
Market risk is the risk of losses arising from movements in market prices in on-balance and off-balance sheet items. The definition includes risks from interest rate instruments and equities as well as foreign currency risks.
Viseca uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operational and financing activities.
The positive and negative values of derivatives are recognised in other receivables and other liabilities.
Risks in the preparation of the financial statements
To ensure that the consolidated financial statements comply with the applicable accounting standards and that reporting is correct, Viseca has set up internal control and management systems which are regularly reviewed. In accounting and valuation, estimates and assumptions are made with regard to the future. These are based on the knowledge of the respective employees and are critically reviewed on a regular basis.
4 Group structure
This section sets out the structure of the Viseca including significant changes and resulting effects on the consolidated financial statements.
4.1 Change in scope of consolidation
Foundation of new subsidiary
Viseca Card Services II AG was founded on 28 April 2020 with a share capital of CHF 100,000. It will be active from 1 October 2020 and will act as an issuer of credit cards and cards with payment functions.
Merger of subsidiaries
Accarda AG and Aduno Finance AG were merged with Viseca Card Services SA on 29 May 2020, with retroactive effect from 1 January 2020.
Disposal of subsidiaries and at-equity companies
The 100% shares in the Loyalty Group including Sanavena GmbH was sold on 30 October 2019, the 55% shares in Zaala AG on 27 September 2019 and the 60% shares in Paycoach AG on 4 March 2019.
The 33% at-equity investment in SwissWallet AG was sold on 13 December 2019 and the 20% at-equity investment in Loyalty Services AG on 9 May 2019.
Discontinued business units
The Consumer Finance division, which included cashgate AG, was sold to Cembra Money Bank AG on September 2, 2019.
In October Viseca Card Services SA will spin off the issuing unit of its business to Viseca Card Services II AG. Both companies will then be renamed. The Viseca Card Services SA will be the Viseca Payment Services SA and the Viseca Card Services II AG will be the Viseca Card Services AG.
Viseca Payment Services SA will operate the processing business and Viseca Card Services AG the issuing business.
4.2 Group companies
Consolidation of subsidiaries
The consolidated financial statements are based on individual financial statements of all subsidiaries prepared in accordance with uniform principles. Subsidiaries are entities controlled by the Group. Control is assumed to exist if the Group holds more than half of the voting rights in the subsidiary or it has control in another way. Consolidation is based on the purchase method. Group-internal balance sheet assets and liabilities and unrealised gains and losses or income and expenses from Group-internal transactions are eliminated when preparing the consolidated financial statements.
Investments in associates
Associates are recognised in the balance sheet using the equity method and initially at fair value. Associates are those entities in which the Group has significant influence on their financial and business policy but does not control them. The Group’s share in the profit or loss of the associate is included in the income statement.
5. Subsequent events
Up to the issue of this report, the company was not aware of any significant new event that would affect the financial statements as of 30 June 2020.