General Information

This accounting manual is for internal use only and should not be shared with anyone outside the company, except the appointed audit firm.

Introduction

The SMG Accounting Manual (SAM) specifies the accounting principles to be followed by all consolidated subsidiaries included in the accounts of the SMG Swiss Marketplace Group (the Group). It is the basis for a Group wide uniform preparation of the monthly and annual reporting as well as budgets, business plans and other estimates.

For the purposes of this manual, the IFRS-based individual financial statements and reporting schedules submitted by the reporting entities and included in the Groups’ accounts are referred to as «Group accounts». Financial statements, which are prepared locally in accordance with any applicable national/tax regulations, are referred to as the «Statutory accounts». The policies described in the SAM do not include directives that address accounting under any set of national/tax guidelines.

The Groups’ financial reporting serves to fulfill external reporting obligations and information requirements (legal requirements, shareholders, banks, etc.). It also serves, however, for internal information and management purposes.

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For this purpose, the SMG Accounting Manual contains:

• Group group-wide standard recognition and measurement principles in accordance with the International Financial Reporting Standards (IFRS) for individual components of the financial statements;
• specific regulations for the application of IFRS to the specific requirements within the Group (in particular in those areas where IFRS proposes an alternative treatment or gives an accounting choice);
• a group-wide standard chart of accounts to register bookings based on LucaNet consolidation software.

The philosophy of the Groups’ financial statements is based on the principle of «true and fair view». The Group’s financial statements should present fairly the financial position, performance and changes in financial position of the Group.

This is achieved among other things by:

• completely and accurately applying the recognition and measurement methods in accordance with the International Financial Reporting Standards (IFRS);
• presenting the information, including the recognition and measurement methods in such a way to provide relevant, reliable, comparable and understandable information;
• making available additional data if the demands of IFRS are insufficient, in order to show how the individual transactions or events affect the financial position, performance and changes in financial position.

If all rules in the SAM are observed, it is guaranteed that the annual Group financial statements reflect a «true and fair view». Deviations are only allowed in the case of compulsory, fundamental reasons and must be agreed with the Consolidation & Reporting team in advance.

The elements of the Group’s financial statements consist of:

• the statement of financial position;
• the statement of profit or loss;
• the statement of comprehensive income;
• the statement of cash flows;
• the statement of changes in shareholders’ equity; and
• the notes to the consolidated financial statements showing the recognition and measurement methods as well as supplementing information.

Responsibility for the Group Accounting Manual

Risk & Audit Committee (RAC): The enclosed Accounting Manual was approved by the Risk and Audit Committee of the Group. This version is to be used for the first-time adoption of IFRS for the annual financial year 2023 including all previous year information that had to be restated from Swiss GAAP FER to IFRS.

Consolidation & Reporting Team (C&R): The SMG Swiss Marketplace Group AG Group Accounting Manual (SAM) is issued and updated by the Consolidation & Reporting Team. Updates are elaborated in close contact with the Financial Planning & Reporting Team. The binding version is always published on the Accounting webpage in Notion. It is up to the companies to print out the Accounting Manual on paper or make translations into local languages. If there are different versions available, then the English version on Notion prevails.

The companies will be informed about changes and supplements to the SAM with VICO and/or e-mail. The Consolidation & Reporting Team is responsible for periodical updates and respective trainings.

Local accountants and FP&A: It is the responsibility of the local accountants and the FP&A department to ensure compliance with the requirements set out in the SAM and to ensure that the accounting principles and the implementation thereof are followed. All legal entities shall report accounting data in compliance with SAM on a monthly and annual basis. The preparation of the accounting data shall be subject to proper control routines.

Furthermore, the local accountant is responsible for full compliance with the statutory regulations currently in force in their particular jurisdiction. Whenever local statutory requirements deviate from IFRS, statutory reporting will differ from group (IFRS) reporting. Any such differences must be identified and documented locally. Consolidation & Reporting Team may ask for a bridge or requests further details for group tax purposes.

Where accounting or valuation issues pose any specific questions that cannot be resolved with certainty by reference to SAM, these issues have to be discussed with the Consolidation & Reporting Team. Such issues will be handled with a goal of arriving at a group-wide uniform solution that is consistent with current accounting standards and laws. Interpretations should never take place on local (single company) level.

Chage process SMG Group Accounting Manual

The SAM reflects all International Financial Reporting Standards (IFRS) and Interpretations of the International Financial Reporting Interpretations Committee (IFRIC) that have been approved by the International Accounting Standards Board (IASB) and have been adopted by the Group on or before 1 January 2023. Approved IFRSs and IFRICs that have not yet been adopted by the Group are not reflected in the SAM.

The Group’s accounting principles may only be modified for compelling reasons. Appropriate adaptations (incl. creation or removal) of corporate policies are decided by the Consolidation & Reporting Team only and have to be approved by the Group CFO and Risk and Audit Committee. Such compelling reasons apply, or could apply, if:

• changes are made in IFRS directives;
• changes occur in legal requirements;
• important developments affect fundamental business economic thinking.

In addition, modifications are to be:

• adequately explained; and
• applied restrictively.

Each amendment or adjustment is to be made with due regard to all other applicable financial procedures. In line with the principle of consistency, amendments should only be implemented when longer-term conditions make this necessary, and / or the clarity of presentation or the practical handling aspects are significantly improved. Amendments and adjustments have to be strictly followed by all consolidated subsidiaries included in the accounts of the Group.

The effects caused by amendments are in all cases to be set out clearly and should be adequately documented. Prior year adjustments need the approval by the Consolidation & Reporting Team.

With this Accounting Manual guideline, the process will be defined for the maintenance and adjustment of the Accounting Manual going forward. In general, there will be a division of responsibilities in the following manner: