SOFISASA,

Fribourg

ConsolidatedFinancialStatementsfortheyear

endedDecember31,2023andReportofthe

StatutoryAuditor

DeloitteSA

RueSaint‐Martin7

1003Lausanne

Switzerland

Tel:+41(0)582799200

Fax:+41(0)582799300

www.deloitte.ch

ReportoftheSt

atutoryAuditor

TotheGeneralMeetingof

SOFISASA,Fribourg

ReportontheAuditoftheConsolidatedFinancialStatements

Opinion

WehaveauditedtheconsolidatedfinancialstatementsofSOFISASA(theCompany)anditssubsidiaries

(theGroup),whichcomprisetheconsolidatedstatementoffinancialpositionasat31December2023,

theconsolida

tedstatementofcomprehensiveincome,theconsolidatedstatementofchangesinequity

andtheconsolidatedstatementofcashflowsfortheyearthenended,andnotestotheconsolidated

financialstatements,includingmaterialaccountingpolicyinformation.

Inouropinion,theaccompanyingconsolidatedfinancial statementsgiveatr

ueandfairviewofthe

consolidatedfinancialpositionoftheGroupasat31December2023andofitsconsolidatedfinancial

performanceanditsconsolidatedcashflowsfortheyearthenendedinaccordancewithInternational

FinancialReportingStandards(IFRS)andcomplywithSwisslaw.

BasisforO

pinion

WeconductedourauditinaccordancewithSwisslaw,InternationalStan dards onAuditing(ISA)and

SwissStandardsonAuditing(SA‐CH).Ourresponsibilitiesunderthoseprovisionsandstandardsare

furtherdescribedinthe“Auditor'sResponsibilities fortheAuditoftheConsolidatedFinancial

Statements”sectionofourreport.WeareindependentoftheGr

oupinaccordancewiththeprovisions

ofSwisslaw,togetherwiththerequirementsoftheSwissauditprofession,aswellasthoseofthe

InternationalEthicsStandardsBoardforAccountants’InternationalCodeofEthicsforProfessional

Accountants(includingInternationalIndependenceStandards) (IESBACode),andwehavefulfilledour

otheret

hicalresponsibilitiesinaccordancewiththeserequireme nts.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisfor

ouropinion.

KeyAuditMatters

Keyauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificanceinour

auditoftheconsolidatedfi

nancialstatementsofthecurrentperiod.Thesematterswereaddressedin

thecontextofourauditoftheconsolidatedfinancialstatementsasawhole,andinformingouropinion

thereon,andwedonotprovideaseparateopiniononthesematters.

SOFISASA

Reportofthestatutoryauditor

fortheyearended

December31,2023

Revenue from sales of single-family detached homes built on speculation and individual

residential units in multifamily buildings

Key audit matter How the scope of our audit responded to the

key audit matter

The group has various streams of revenue

We performed a process walkthrough to gain an

including revenue from sales of single-family

understanding of the controls in place related to

detached homes built on speculation and

the real estate revenue recognition process. We

individual residential units in multi

family

tested design and implementation of the relevant

buildings accounted for as a sale of goods under

controls.

IFRS 15 (Revenue from Contracts with

We obtained the listing of residential property

Customers). There is a risk that these revenues

sales recorded for the financial year 2023. We

recorded do not meet all the revenue recognition

reviewed Board of Directors minutes for detail of

criteria under IFRS 15 due to the terms and

sales transaction during the year to ensure the

conditions of the sale contract that require

listing was complete.

management judgement to assess whether all

the criteria have been fulfilled. These revenue

We selected a sample of sales transactions for

streams amount to CHF 64.22 million for the

detailed testing and used the amounts tested to

year ended December 31, 2023 (corresponding

develop an expectation for the rest of the

to CHF 7.95 million for the year ended

population. We then compared this expectation

December 31, 2022) for revenue from single

to the actual revenue recorded. The detailed

family detached homes built on speculation and

testing consisted of the following steps:

individual residential units in multi

family

- We reconciled the details of the sale to the sale

buildings.

contract and reviewed the agreement for any

The revenue recognition methods according to

terms and conditions that could affect the

IFRS 15 require management judgments and

group's ability to recognize revenue, as well as

are therefore assessed as a key audit matter.

the appropriateness of recognizing revenue at a

Refer to the accounting policy in note 4 and

specific point in time rather than over a period of

additionally the revenue details in note 23.

time.

- We recon

ciled the revenue amount and agreed

the date wh

en the revenue was recorded to the

closing statement prepared by the lawyer

indicating the release of the sales proceeds to

the group and the transfer of the title to the

buyer.

- We recon

ciled the proceeds (deposit and final

payment) with the evidence of receipt.

- Late cut-off was also tested through a review of

the sale

s recorded subsequent to year end.

- We a

ssessed the adequacy and completeness

of the revenue related disclosures according to

IFRS 15 by critical review.

Based o

n the procedures performed above, we

obtained sufficient audit evidence to address the

risk of incorrect application of IFRS 15 to the

Revenue from sales of single-family detached

homes built on speculation and individual

residential units in multifamily buildings.

SOFISASA

Reportofthestatutoryauditor

fortheyearended

December31,2023

OtherInformation

TheBoardofDirectorsisresponsiblefortheotherinformation.Theotherinformationcomprises the

informationincludedintheannualreport,butdoesnotincludetheconsolidat ed financialstatements,

thestand‐alonefinancialstatementsoftheCompany,theremunerationreportandourauditor’sreports

thereon.

Ouropinionontheconsol

idatedfinancialstatementsdoesnotcovertheotherinformationandwedo

notexpressanyformofassuranceconclusionthereon.

Inconnectionwithourauditoftheconsolidatedfinancialstatements,ourresponsibilityistoreadthe

otherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistent

withthecons

olidatedfinancialstatements,orourknowledgeobtainedintheauditorotherwise

appearstobemateriallymisstated.

If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthis

otherinformation,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.

BoardofDirectors’Responsibiliti

esfortheConsolidatedFinancialStatements

TheBoardofDirectorsisresponsibleforthepreparationoftheconsolidatedfinancialstatements,which

giveatrueandfairviewinaccordancewithIFRSandtheprovisionsofSwisslaw,andforsuchinternal

controlastheBoardofDirectorsde

terminesisnecessarytoenablethepreparationofconsolidated

financialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Inpreparingtheconsolidatedfinancialstatements,theBoardofDirectorsisresponsibleforassessing

theGroup’sabilitytocontinueasagoingconcern,disclosing,asapplicable,ma

ttersrelatedtogoing

concern,andusingthegoingconcernbasisofaccountingunlesstheBoardofDirectorseitherintendsto

liquidatetheGrouportoceaseoperations,orhasnorealisticalternativebuttodoso.

TheBoardofDirectorsisresponsibleforpresentingtheannualaccountsincompliancewiththerelevant

requirem

entssetoutinESEFRegulationthatareapplicabletofinancialstatements.

Auditor'sResponsibilitiesfortheAuditoftheConsolidatedFinancialStatements

Ourobjectivesaretoobtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatements

asawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanaudi

tor’s

reportthatincludesouropinion.Reasonableassuranceisahighlevelofassurancebutisnota

guaranteethatanauditconductedinaccordancewithSwisslaw,ISAandSA‐CHwillalwaysdetecta

materialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsidered

materialif,i

ndividuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencethe

economicdecisionsofuserstakenonthebasisoftheseconsolidatedfinancialstatements.

Afurtherdescriptionofourresponsibilitiesfortheauditoftheconsolidatedfinancialstatementsis

locatedonEXPERTsuisse’swebsiteat

:https://www.expertsuisse.ch/en/audit‐report.Thisdescription

formspartofourauditor’report.

SOFISASA

Reportofthestatutoryauditor

fortheyearended

December31,2023

ReportonOtherLegalandRegulatoryRequirements

InaccordancewithArt.728apara.1item3COandPS‐CH890,weconfirmthataninternalcontrol

systemexists,whichhasbeendesigned forthepreparationoftheconsolidatedfinancialstatements

accordingtotheinstructionsoftheBoardofDirectors.

WeconfirmthecomplianceoftheconsolidatedfinancialstatementsoftheGroupasat

December31,2023withtherelevantrequirementssetoutintheESEFRegulationthatareapplicable

tofinancialstatements.

FortheGroupitrelatesto:

ConsolidatedfinancialstatementspreparedinavalidxHTMLformat;

TheXBRLmarkupoftheconsolidatedfinancialstatementsusing thecoretaxonomyandthe

commonrulesonmarkupsspecifiedintheESEFRegulation

Inouropinion,theconsolidatedfinancialstatementsoftheGroupasatDecember31,2023,identified

assofisa‐2023‐12‐31‐en.zip,havebeenprepared,inallmaterialrespects,incompliancewiththe

requirementslaiddownintheESEFRegulation.

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

DeloitteSA

AnnikJatonHüni

Catharina Wagner Nicholl

LicensedAuditExpert

AuditorinCharge

Lausanne,April29,2024

AJH/CWN/rex

Enclosures

‐Consolidatedfinancialstatements(statementofconsolidatedfinancialposition,statementofconsolidated

comprehensiveincome,statementofconsolidatedchangesinequity,statementofconsolidatedcashflowsand

notes)

SOFISA SA

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

in CHF	Notes	31/12/2023	31/12/2022
ASSETS
Current assets
Cash and cash equivalents	7	10,064,262	8,713,463
Restricted cash	8	958,283	201,010
Securities	9/28	405,577,181	364,946,336
Trade and other receivables	10	1,068,299	10,565,200
Current tax assets	11	1,801,946	4,430,452
Inventories	13	121,539,269	143,890,363
Other current assets	14	1,248,889	1,813,599
Total current assets		542,2 58,12 9	534,5 60,42 3
Non-current assets
Property, plant and equipment, net	15	647,454	603,820
Investment in other companies	16	10,166,375	8,968,780
Other non-current assets	14	663,308	798,779
Retirement benefit asset	12	125,554	200,909
Deferred tax assets	11	4,135,426	3,975,540
Total non-current assets		15,73 8,117	14,54 7,828
Total assets		557,9 96,24 6	549,1 08,25 1

- 1 -

SOFISA SA

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

in CHF	Notes	31/12/2023	31/12/2022
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade and other payables		8,513,728	5,719,532
Current tax liabilities	11	197,989	4,281,387
Short term part of interest-bearing liabilities	18	30, 748,800	54,178,472
Other current liabilities	17	23, 719,295	22,734,625
Total current liabilities		63,17 9,812	86,91 4,016
Non-current liabilities
Deferred tax liabilities	11	21,834, 149	15,572,290
Preferential shares	19	2,256,300	2,260,800
Long term part of interest-bearing liabilities	18	10,324, 500	9,339,960
Other non-current liabilities	17	645,584	783,590
Total non-current liabilities		35,06 0,533	27,95 6,640
Total liabilities		98,24 0,345	114,8 70,65 6
Shareholders' equity
Share capital	19	3,960,000	3,960,000
Reserves	20	171,560, 000	171,560,000
Retained earnings	21	316,111, 928	287,865,361
Cumulative translation adjustment	22	(31, 876,027)	(29, 147,766)
Total shareholders' equity		459,7 55,90 1	434,237,5 95
Total liabilities and shareholders' equity		557,9 96,24 6	549,108,2 51

- 2 -

SOFISA SA

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME

for the year ended

in CHF	Notes	31/12/2023	31/12/2022
Continuing operations
Sales revenue	23	65,360,381	12,757,930
Investment income	24	41,501,689	0
Other income		0	109,589
Total operating income		106,8 62,07 0	12,8 67,519
Cost of sales		(50, 474,371)	(9,143, 351)
Other operating costs		(9, 356,020)	(9,437, 622)
Investment loss	24	0	(74,620, 343)
Total operating costs		(59,830 ,391)	(93,201 ,316)
EBIT (Earnings / (Loss) before interest and tax)		47,03 1,679	(80,333 ,797)
Other financial income	24	814, 410	366,769
Financial expenses	25	(5, 339,046)	(7,315, 521)
EBT (Earnings / (Loss) before tax)		42,50 7,043	(87,282 ,549)
Tax expense	11	(539, 549)	(1,063,347)
Deferred tax (expense) / credit	11	(5, 860,165)	10,696,667
NET (LOSS) / PROFIT FOR THE YEAR		36,107,32 9	(77,64 9,229)
Other comprehensive income / (loss)
Items that may be subsequently reclassified to profit or loss
Foreign currency translation	22	(2, 728,261)	72,631
Items that may not be subsequently reclassified to profit or loss
Remeasurement losses/(gains) of post employ- ment benefit obligations	12	(44, 107)	686, 178
Deferred tax (expense) / credit	11	11,909	(185,268)
Exchange translation differences of foreign
operations		0	697
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR		33,34 6,870	(77,074 ,991)

- 3 -

SOFISA SA

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

			Cumulative
	Share	Retained	translation	Reserves	Total
in thousands of CHF	Capital	earnings	differences		Equity
Balance at 1 January 2022	3,960	380,163	(29, 221)	171,560	526,462
Net loss	-	(77, 649)	-	-	(77, 649)
Other comprehensive income / (loss)	-	501	73	-	574
Total comprehensive income / (loss)
for the year	-	(77,148)	73	-	(77,075)
Dividends	-	(15,150)	-	-	(15, 150)
	-
Balance at 31 December 2022	3,960	287,8 65	(29,148)	171,5 60	43 4,237
Balance at 1 January 2023	3,960	287,865	(29, 148)	171,560	434,237
Net profit	-	36,107	-	-	36,107
Other comprehensive income / (loss)	-	(40)	(2, 728)	-	(2, 768)
Total comprehensive income / (loss)
for the year	-	36,06 7	(2,728)	-	33,33 9
Dividends	-	(7,820)	-	-	(7, 820)
				-	-
	-			-	-
Balance at 31 December 2023	3,960	316,1 12	(31,876)	171,5 60	45 9,756

- 4 -

SOFISA SA

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended

in thousands of CHF	Notes	31/12/2023	31/12/2022
Cash flow generated by (used in) operating activities
Net profit		36,107	(77, 649)
Adjustments for :
Non cash items in net profit and other adjustments
Depreciation and amortization		89	73
Tax (credit) / expense recognised in profit or loss	11	6,400	(9,633)
Unrealised (gain) / loss on securities	24	(35, 259)	80,988
Other financial income	24	(814)	(367)
Interest expense recognised in profit or loss		1,926	2,002
Net (increase) / decrease in operating assets
Securities	9/28	(5, 372)	(7,217)
Trade and other receivables	10	8,740	(7, 927)
Inventories	13	12,954	(32, 866)
Other assets	14	776	(968)
Net increase / (decrease) in operating liabilities
Trade and other payables		2,794	(91)
Accrued expenses and deferred income	17	985	1,157
Other liabilities		0	(446)
Income taxes received / (paid)	11	(1,753)	(9, 000)
Net cash flow generated by / (used in) operating activities		27,572	(61, 946)
Cash flow generated by (used in) investing activities
(Purchase) of property, plant and equipment, net	15	(133)	(443)
(Investments in) / proceeds from other companies	16	(1,198)	(1, 849)
Interest received	24	814	367
Net cash flow generated by / (used in) investing activities		(517)	(1, 926)

- 5 -

SOFISA SA

CONSOLIDATED STATEMENT OF CASH FLOWS (continued)

			for the year ended
in thousands of CHF		31/12/2023	31/12/2022
Cash flow generated by (used in) financing activities
(Repayment) of short term borrowings	18	(22,794)	(13, 863)
Proceeds from short term borrowings		1,414	0
(Repayment) of long term borrowings	18	(138)	(163)
Proceeds from long term borrowings	18	1,595	9,340
Interest paid on preference shares		(112)	(78)
Borrowing costs	25	(1,819)	(1, 907)
Dividends paid		(7, 820)	(15,150)
Net cash flow (used in)/generated by financing activities		(29, 673)	(21,822)
Effects of exchange rate differences		3,970	3,781
Net (decrease)/increase in cash and cash equivalents		1,351	(81, 913)
Cash and cash equivalents at beginning of the year		8,713	90,626
Cash and cash equivalents at the end of the year		10,064	8,713

- 6 -

SOFISA SA

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1) SOFISA’S BUSINESS ACTIVITIES

Sofisa SA is a holding company incorporated in 1930 and organised under Swiss law. The

company owns interests in several wholly-owned or majority owned subsidiaries, established

in various countries. The Company, together with its subsidiaries, forms the Sofisa Group. The

Sofisa Group conducts activities in residential real estate development in Canada and USA

and further holds a diversified investment portfolio to provide finance for the Group.

Sofisa SA is a public limited company with its head office in Grand-Places 14, Fribourg,

Switzerland, where it is also registered. The share capital of the company is fixed at the sum

of six million one hundred sixty-five thousand Swiss francs (CHF 6,165,000); it is divided into

three thousand nine hundred sixty (3,960) ordinary shares, numbered 1 to 3,960, of CHF 1,000

each and three thousand (3,000) preference shares, numbered 3,961 to 6,960, of CHF 735

each. The shares numbered 2,395 to 2,904 have a preferred dividend right. The shares

numbered 3,961 to 6,960 have a preferred dividend right and privileged voting rights. The

shares numbered 3,961 to 6,960 in Sofisa SA are traded on the Luxembourg Stock Exchange

under securities no 013902662 (ISIN CH0013225898).

2) PRINCIPLES OF CONSOLIDATION AND FINANCIAL REPORTING

GENERAL PRINCIPLES: The consolidated financial statements for the Sofisa Group are based

on the financial statements of the individual companies within the Group as per

December 31, which have all been prepared in a consistent manner.

The consolidated financial statements are prepared in accordance with International

Financial Reporting Standards (IFRS) as issued by the International Accounting Standards

Board (IASB) and are also prepared in accordance with IFRS adopted by the European Union.

The consolidated financial statements have been prepared on the basis of original values at

acquisition, non-monetary assets being valued, in principle, at acquisition or cost or at market

values, if lower. Securities and certain financial assets are measured at fair value. Certain

portfolio holdings consist of shares in funds principally invested in instruments ranging from

equities to currencies and commodities, all traded on a securities exchange.

Details concerning valuation are given in the accounting policies indicated below.

3) ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs)

The accounting policies are the same as those applied in the 2022 consolidated financial

statements, except for the Group’s adoption of new and amended IFRSs effective January 1,

2023.

In the current financial year several new standards and amendments were adopted effective

January 1, 2023 but had no material impact on the Group consolidated financial statements.

Otherwise, the same accounting policies, presentation and methods of computation are

followed in these consolidated financial statements as were applied in the preparation of the

consolidated financial statements for the year ended December 31, 2022.

- 7 -

SOF ISA SA

At the date of authorisation of these consolidated financial statements, the following

Standards and Interpretations were issued and effective in 2023:

Amendments to IAS 1 and

IFRS Practice Statement 2 Disclosure of Accounting Policies

Amendments to IAS 8 Definition of Accounting Estimates

Amendments to IAS 12 International Tax Reform – Pillar Two Model Rules

Amendments to IAS 12 Income Taxes—Deferred Tax related to Assets and

Liabilities arising from a Single Transaction

IFRS 17 (and amendments to IFRS 17) Insurance contracts

At the date of authorisation of these consolidated financial statements, the following

Standards and Interpretations which have not been applied in these financial statements

were issued but not yet effective:

Amendments to IFRS 16 Lease Liabilities in a Sale and Leaseback

Amendments to IAS 1 Non-current Liabilities with Covenants

Amendments to IAS 1 Classification of Liabilities as Current or Non-current

Amendments to IAS 7 and IFRS 17 Supplier Finance Arrangements

Amendments to IAS 21 Lack of Exchangeability

The directors do not expect that the adoption of the standards listed above will have a

material impact on the consolidated financial statements of the Group in future periods.

However these amended standards could lead to a few additional disclosures.

4) SIGNIFICANT ACCOUNTING POLICIES

SCOPE OF THE CONSOLIDATED STATEMENTS: The consolidated financial statements for Sofisa

Group cover Sofisa SA and all the entities controlled by the Company. Subsidiaries are those

companies controlled directly or indirectly by the parent through a majority of votes or by

other means. Control is achieved when the parent has the power over the investee; is

exposed, or has right, to variable return from its involvement with the investee; and has the

ability to use its power to affect its return.

METHOD OF CONSOLIDATION: The consolidated financial statements represent the

aggregation of the annual accounts of the individual Group companies, which are prepared

using uniform accounting principles.

The financial statements of the parent and its subsidiaries are prepared as of the same end

of the reporting period. Assets and liabilities, and income and expenses of a subsidiary are

included in the consolidated financial statements from the date that control is acquired until

the date on which the parent ceased to control the subsidiary. All intra-group transactions,

balances, income and expenses are eliminated on consolidation.

INVESTMENTS IN OTHER COMPANIES: Investment in company not accounted for as subsidiary,

associates or jointly controlled entities (normally below 20% shareholding levels) are stated at

fair value through profit or loss.

GOING CONCERN: The Board of directors has, at the time of approving the financial

statements, a reasonable expectation that the Group has adequate resources to continue

in operational existence for the foreseeable future. Thus they continue to adopt the going

concern basis of accounting in preparing the financial statements.

- 8 -

SOF ISA SA

SIGNIFICANT ACCOUNTING ESTIMATES AND MANAGEMENT JUDGMENTS: In preparing the

consolidated financial statements, management is required to make estimates and

assumptions that affect reported income, expenses, assets, liabilities and disclosure of

contingent assets and liabilities. The estimates and associated assumptions are based on

historical experience and other factors that are considered to be relevant. Actual results may

differ from those estimates.

Significant estimates used in the preparation of these consolidated financial statements and

judgements made by management in the application of IFRSs that have significant effect on

the financial statements are discussed below.

KEY SOURCES OF ESTIMATION UNCERTAINTY:

Key components of the consolidated financial statements requiring management to make

significant estimates include the determination of percentage of completion in respect of

revenue recognition for certain contracts, allocation of development costs to specific areas

under development and ultimately to costs of sales, cost to completed accruals and the

recoverability of certain phases of development, income taxes, and liabilities under legal

contingencies. Actual result could differ from these estimates.

Balances related to long term revenue contracts in progress and revenues have been

calculated using management’s best estimates of total costs. Total estimated cost is a

component of the percentage of completion. Due to the uncertainties in the estimation

process, it is possible that changes in future conditions may cause recorded amounts to

materially change in the future. The cumulative effect of revisions to revenue or deficiencies

in the estimate recovery of individual phases within residential property under development

is recorded in the period in which amounts are known.

CRITICAL ACCOUNTING JUDGEMENT:

Revenues from sales of completed single-family detached home on a specific parcel or

completed residential units in multi-family buildings: Revenues from such transactions are

recognised at a point in time. This revenue recognition method requires management

judgments to determine when the revenue recognition criteria are fulfilled in accordance

with the requirements of IFRS 15, Revenue from Contracts with Customers.

FUNCTIONAL CURRENCY AND CONVERSION OF FOREIGN CURRENCIES: The Group’s

consolidated financial statements are prepared in Swiss francs (CHF) and, if not otherwise

indicated, are rounded up or down to the nearest CHF 1,000.

For certain companies within the Group, transactions that are carried out in a foreign

currency are converted using a fixed exchange rate. At closure, monetary assets and

liabilities in foreign currencies are converted into the functional currency of the company

using year-end rates. The resulting exchange differences are recorded in profit or loss. Non-

monetary items that are measured in terms of historical cost in a foreign currency are not

retranslated.

In the Group’s consolidated financial statements, the assets and liabilities from the statements

of financial positions of foreign subsidiaries prepared in a foreign currency have been

translated into Swiss franc using year-end rates. The statements of profits or losses and other

comprehensive income and cash flows have been translated using the average exchange

rates for the year.

Exchange differences arising on the net assets of foreign subsidiaries as a result of changes in

exchange rates compared to the previous year and translation differences arising from the

calculation of the Group’s results using average annual exchange rates and year-end rates

are recognised directly in other comprehensive income and reported separately as

cumulative translation differences. Cumulative translation differences will be recognised in

the profit or loss when a subsidiary is sold or liquidated.

- 9 -

SOF ISA SA

The principal exchange rates against the Swiss franc in relation to the consolidated financial

statements are as follows:

Statement of Statement of profit or loss and

Financial position* other comprehensive income **

Exchange rates

2023

2022

2023

2022

1 USD

0.8416

0.9252

0.8988

0.9550

1 EUR

0.9297

0.9875

0.9717

1.0048

1 CAD

0.6383

0.6829

0.6659

0.7338

1 GBP

1.0729

1.1129

1.1171

1.1791

1 AUD

0.5743

0.6275

0.5971

0.6627

1 NZD

0.5329

0.5852

0.5518

0.6062

100 JPY

0.5969

0.7012

0.6410

0.7295

100 SEK

8.3512

8.8797

8.4699

9.4593

100 HKD

10.7781

11.8543

11.4803

12.1951

100 NOK

8.2872

9.3922

8.5143

9.9530

100 SGD

63.8026

68.9849

66.9166

69.2342

100 DKK

12.4715

13.2785

13.0407

13.5064

100 ILS

23.3725

26.2215

24.3204

28.4075

* Year-end rates ** Average rates for the year

FINANCIAL ASSETS AND LIABILITIES: The financial assets and liabilities are classified into the

following specified categories:

Financial assets are classified as fair value through profit or loss if they are acquired with a

view to realising a profit from short-term fluctuations in the price and measured at fair value.

The resulting realised and unrealised changes in value are recognised in profit or loss and are

included in the financial result for the relevant reporting period. Included in this category of

financial assets are the securities which include marketable, easily realisable securities and

time deposits with an original maturity of 3 to 12 months.

Loans and receivables are non-derivative financial assets with fixed or determinable

payments that are not quoted in an active market. They reach the objective of collecting

contractual cash flows over their life. This type of financial instrument, including in particular

trade receivables, loans and other receivables, is measured in the statement of financial

position at amortised cost using the effective interest rate method less any impairment.

Interest income is recognised by applying the effective interest rate method, except for short-

term receivables when the recognition of interest would be immaterial.

Trade receivables are carried at amortised cost less allowances for loss. They generally do not

contain a significant financing component. The allowance loss measurement is then

determined by applying a simplified approach equalling the lifetime expected credit losses.

Under this approach the tracking of changes in credit risk is not required but instead the base

lifetime expected credit loss at all times is applied. An allowance for loss is made for

potentially impaired receivables during the year in which they are identified based on a

periodic review of all outstanding amounts. Profit and loss impacts are immaterial. Trade

receivables are deemed as impaired when there is an indication of significant financial

difficulties of the debtor (delinquency in or default on payments occurs, probability of

bankruptcy or need for financial reorganisation).

Financial liabilities are classified as interest-bearing liabilities and measured at fair value

through profit or loss.

Other financial liabilities, including borrowings and long term debts, are initially measured at

fair value, net of transaction costs. Other financial liabilities are subsequently measured at

amortised cost using the effective interest rate method, with interest expense recognised on

- 10 -

SOF ISA SA

an effective yield basis. The effective interest rate method is a method of calculating the

amortised cost of a financial liability and allocating interest expense over the relevant period.

The effective interest rate is the rate that exactly discounts estimated future cash payments

through the expected life of the financial liability, or, where appropriate, a shorter period.

CASH AND CASH EQUIVALENTS: In addition to cash on hand and cash at bank, cash and cash

equivalents may also include fixed-term deposits with an original maturity of up to three

months.

RESTRICTED CASH: Cash is considered to be restricted when it is subject to contingent rights of

a third party.

SECURITIES: On the statement of financial position, securities under current assets comprise

marketable, easily realisable securities and time deposits with an original maturity of 3 to 12

months.

IFRS 9, Financial instruments, requires that the classification of an investment portfolio as either

“fair value through profit or loss (FVTPL)” or as “fair value through other comprehensive

income (FVTOCI)” depends on the entity’s intention and past practice.

IFRS 9 provides guidance on how to determine whether a business model is to manage assets

to collect contractual cash flows or to both collect contractual cash flows and to sell financial

assets. Other business models are all the ones that do not meet one of those two qualifying

criteria. If the portfolio manager actively buys and sells financial instruments to generate short-

term profits, the financial instruments in the portfolio are considered, by default, as held as

FVTPL.

The Group holds a marketable securities portfolio which is measured at FVTPL. Changes in the

fair value of these financial instruments are recorded in the statement of profit or loss in the

captions “investment income” or “Investment loss” as appropriate.

The valuation of these marketable securities and related investment income / (loss) is based

on fair value derived from quoted price in active markets. Changes in fair value can have a

material impact on the financial statements of the Group.

Securities represent investments in equity markets all traded on a securities exchange. For

those financial instruments traded in the active markets, the determination of the fair values

is based on quoted market prices or dealer price quotations. The value measurement does

not result from a valuation made by the management of the company.

INVENTORIES: Inventories consist of land and residential property under development and

held for sale. Borrowing costs directly attributable to the acquisition, construction or of

qualifying assets, which are assets that necessarily take a substantial period of time to get

ready for their intended use or sale are recognised as part of the cost of the qualifying assets.

Inventory is recorded at the lower of cost and estimated net realisable value. Cost includes

the cost of land, carrying costs (principally property taxes) and development costs (including

construction). Net realisable value is the estimated selling price in the ordinary course of

business, less the estimated costs of completion and selling expenses.

PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are carried at cost less

accumulated depreciation and impairment. Depreciation is provided on a straight-line basis

over the estimated useful lives of the assets as follows:

Furniture and fixtures 10 years

Computer equipment 3 years

Computer software 3 years

Leasehold improvements over term of lease

Portable buildings 3 years

- 11 -

SOF ISA SA

The depreciation method, residual values and useful lives of all property, plant and

equipment are reviewed and adjusted, if appropriate, at least at each financial year end,

with the effect of any changes in estimate accounted for prospectively.

IMPAIRMENT OF TANGIBLE ASSETS: At each end of the reporting period, the Group reviews the

carrying amounts of its tangible assets to determine whether there is any indication that those

assets have suffered an impairment loss. If any such indication exists, the recoverable amount

of the asset is estimated in order to determine the extent of the impairment loss (if any). When

it is not possible to estimate the recoverable amount of an individual asset, the Group

estimates the recoverable amount of the cash-generating unit to which the asset belongs.

When a reasonable and consistent basis of allocation can be identified, corporate assets are

also allocated to individual cash-generating units, or otherwise they are allocated to the

smallest group of cash-generating units for which a reasonable and consistent allocation

basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing

value in use, the estimated future cash flows are discounted to their present value using a

pre-tax discount rate that reflects current market assessments of the time value of money and

the risks specific to the asset for which the estimates of future cash flows have not been

adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than

its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to

its recoverable amount. An impairment loss is recognised immediately in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-

generating unit) is increased to the revised estimate of its recoverable amount, but so that

the increased carrying amount does not exceed the carrying amount that would have been

determined had no impairment loss been recognised for the asset (or cash-generating unit)

in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

DIVIDENDS: Dividends received are recognised to profit in the fiscal year in which they were

approved by the Shareholder Meeting.

TAXATION: Tax expense represents the sum of the current tax and deferred tax.

Current tax: The tax currently payable is based on taxable profit for the year. Taxable profit

differs from profit as reported in the consolidated statement of profit or loss and other

comprehensive income because it excludes items of income or expense that are taxable or

deductible in other years and it further excludes items that are never taxable or deductible.

The Group’s liability for current tax is calculated using tax rates that have been enacted or

substantively enacted by the end of the reporting period.

Deferred tax: Deferred tax is recognised on temporary differences between the carrying

amounts of assets and liabilities in the consolidated financial statements, and the

corresponding tax base used in the computation of taxable profit, and is accounted for using

the full liability method. Deferred tax liabilities are generally recognised for all taxable

temporary differences, and deferred tax assets are generally recognised for all deductible

temporary differences to the extent that it is probable that taxable profits will be available

against which those deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period

and reduced to the extent that it is no longer probable that sufficient taxable profits will be

available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply

in the period in which the liability is settled or the asset realised, based on tax rates (and tax

laws) that have been enacted or substantively enacted by the end of the reporting period.

- 12 -

SOF ISA SA

The measurement of deferred tax liabilities and assets reflects the tax consequences that

would follow from the manner in which the Group expects, at the end of the reporting period,

to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax for the year: Current and deferred tax are recognised as an

expense or income in profit or loss, except when they relate to items credited or debited

directly to equity, in which case the tax is also recognised directly in equity.

BORROWING COSTS: Borrowing costs directly attributable to the acquisition, construction or

of qualifying assets, which are assets that necessarily take a substantial period of time to get

ready for their intended use or sale, are added to the cost of those assets, until such time as

the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are

incurred.

RETIREMENT BENEFIT COSTS: Wages, salaries, social security contributions, annual leave and

paid sick leave, bonuses and non-monetary benefits are expensed in the year in which the

associated services are rendered by the Group’s employees.

Pension obligations: A defined benefit plan is a pension plan that defines an amount of

pension benefit that an employee will receive on retirement, principally dependent on an

employee’s years of service and remuneration at retirement. Plans are usually funded by

payments from the Group and employees. The liability recognised in the statement of

financial position is the aggregate of the present value of the defined benefits obligation less

the fair value of plan assets. Where a plan is unfunded, only a liability representing the present

value of the defined benefits obligation is recognised in the statement of financial position.

The present value of the defined benefits obligation is calculated by independent actuaries

using the projected unit credit method. This method reflects the discounted expected future

payment required to settle the obligation resulting from employee service in the current and

prior periods. The future cash outflows incorporate actuarial assumptions primarily regarding

the projected rates of remuneration growth, and long-term indexation rates. Discount rates,

used to determine the present value of the defined benefit obligation, are based on the

market yields of high-quality corporate bonds in the country concerned. Actuarial gains and

losses arising from experience adjustments and changes in actuarial assumptions are

charged or credited to equity in other comprehensive income in the period in which they

arise. Past-service costs are recognised immediately in the income statement. Net interest

expense is calculated by applying the discount rate at the beginning of the period to the net

defined benefit liability or asset. Pension assets and liabilities in different defined benefit

schemes are not offset unless the Group has a legally enforceable right to use the surplus in

one plan to settle obligations in the other plan.

SALES REVENUE

Revenue recognition

The Group accounts for a contract when the Group and the homebuyer have approved the

contract in accordance with customary business practices and are committed to their

obligations, the rights of the parties and payment terms are identified, and collection of the

consideration is probable.

Typically, the Group contracts with a homebuyer to provide a completed single-family

detached home on a specific land parcel or a completed residential unit in a multi-family

building for a fixed-price, the transaction price, as specified in the contract. This may involve

the Group integrating a number of tasks and components into a single project.

Consequently, the entire contract is accounted for as a single performance obligation.

- 13 -

SOF ISA SA

For sales of single-family detached homes, individual residential units in multi-family buildings,

or in rare instances parcel(s) of land, the Group satisfies its performance obligation when the

homebuyer takes physical possession at the time the sale is closed. That is also the point in

time the Group has the right to payment beyond the initial purchase deposits received from

the homebuyer. Therefore, the Group recognises all revenue at the closing date. Funds

received in advance of the closing date in the form of purchase deposits are recorded as a

liability on the consolidated balance sheet and captioned as deferred revenue until the

closing date.

For the construction of custom built single-family detached homes on land not owned by the

Group and the completion of miscellaneous onsite and offsite development associated with

a large parcel of land sold in the current year, the Group satisfied the performance obligation

over time and receives payment during the course of the contract on specified dates or as

certain milestones are met. Therefore, the Group recognises revenue over time as the

performance obligation is satisfied. The revenue for the construction and remaining

development is recognised based on the extent of progress toward completion of the

performance obligation. The Group uses the cost-to-cost measure of progress as it best

reflects the costs that were incurred on the contract. Under the cost-to-cost measure, the

extent of progress is determined by the ratio of costs incurred to date to the total estimated

costs at completion of the single performance obligation. Costs of residential property sold

include land, materials, labour, subcontractors, other direct costs, and an allocation of

certain indirect costs. Revenues, including estimated profits, are recorded proportionately as

costs are incurred.

In connection with the sale of a large parcel of land in the previous year, the Group was

required to provide ongoing advisory services to the purchaser to assist the purchaser with

obtaining certain development permits on the purchased land. The services were provided

over an 18-month term ending June 30, 2023 at which time the Group was paid a lump-sum

amount. As the contracted revenue to be earned for providing these services was not

contingent on the purchaser successfully obtaining the development permits, the Group

satisfied the performance obligation over time as the services were provided and recorded

the revenue on a straight-line basis over the 18-month term.

The Group’s contracts specify the price for the performance obligation. In the case of

contracts for custom built single-family detached homes, the homebuyer may request

changes to the specifications and requirements of the home. Because of the integrated

nature of the goods and services associated with providing a completed home to a

homebuyer, such modifications are for items that are not distinct from the existing contract

and are accounted for as if they were part of the existing contract. The effect of such

contract modifications on the transaction price and the measure of progress of the

performance obligation is recognised as a cumulative adjustment to revenue as an increase

or decrease in revenue.

Deferred revenue also includes the excess of amounts billed to homebuyers over the revenue

earned on uncompleted contracts. Such amounts are classified as a liability.

Deferred revenue is reported on a contract-by-contract basis.

Amounts billed for work performed but not yet paid for by the homebuyer are included in the

trade and other receivables as an asset.

When it is probable that total contract costs will exceed total contract revenue, the expected

loss is recognised as an expense immediately.

- 14 -

SOF ISA SA

DIVIDEND AND INTEREST INCOME: Dividend income from securities is recognised when the

holder’s rights to receive payment has been established. Dividends are recognised as

“investment income” in the consolidated statement of profit or loss and other comprehensive

income in the financial statements.

Interest is recognised using the effective interest rate method. Interest revenue is recognised

in the consolidated statement of profit or loss and other comprehensive income as “Other

financial income”.

5) OPERATING SEGMENTS

The operating segments are identified on the basis of internal reporting about components

of the Group that are regularly reviewed by the operating decision maker in order to allocate

resources to the segments and to assess their performance.

Residential property development: rezoning and obtaining development permits, designing

and constructing homes, both single and multi-family on existing land located in Canada and

USA, for our own account, and sometimes acting as general contractor for third party clients.

Other: Providing corporate services to the other segments in Canada (residential property

development), including corporate financing, management and administration, payroll,

office premises.

Investment activity/Corporate: direct administration of the operating subsidiaries as well as

management of a global equity portfolio in adherence to the MSCI All Country World (net

dividend invested) in Swiss francs. This activity is conducted by the parent company and its

subsidiary Sofisa Finance SA, both companies based in Switzerland.

	Residential			2023
	Property		Investment	Consolidated
	development	Other	activity	CHF
Investment income	-	-	41,501,689	41,501,689
Revenues from external
customers	65,360,381	-	-	65,360,381
Earnings /(Loss) before interest and tax	8,825,405	(2,232,183)	40,438,456	47,031,679
Net financing costs	-	-	-	(4,524,636)
Income tax	-	-	-	(6,399,714)
Net profit (loss)	-	-	-	36,107,329
Reportable segment assets	142,281,161	1,363,144	414,351,941	557,996,246
Reportable segment
liabilities	73,666,622	245,805	24,327,918	98,240,345

- 15 -

SOF ISA SA

	Residential			2022
	Property		Investment	Consolidated
	development	Other	activity	CHF
Investment loss	-	-	(74,620,343)	(74,620,343)
Revenues from external
customers	12,757,930	-	-	12,757,930
Earnings /(Loss) before interest and tax	(2,509,847)	(1,866,164)	(75,957,786)	(80,333,797)
Net financing costs	-	-	-	(6,948,752)
Income tax	-	-	-	9,633,320
Net profit (loss)	-	-	-	(77,649,229)
Reportable segment assets	175,125,484	2,642,679	371,340,088	549,108,251
Reportable segment
liabilities	67,711,277	2,423,352	44,736,027	114,870,656

The Group operates in three geographical areas – British Columbia, in Canada, USA and

Switzerland (country of domicile).

				2023
				Consolidated
	Canada	USA	Switzerland	CHF
Investment income	-	-	41,501,689	41,501,689
Revenues from external customers	64,957,338	403,043	-	65,360,381
Earnings / (Loss)
before interest and tax	6,254,247	338,976	40,438,456	47,031,679
Reportable
segment assets	131,892,298	11,752,007	414,351,941	557,996,246
Reportable
segment liabilities	73,908,836	3,591	24,327,918	98,240,345

				2022
				Consolidated
	Canada	USA	Switzerland	CHF
Investment loss	-	-	(74,620,343)	(74,620,343)
Revenues from external customers	11,704,737	1,053,193	-	12,757,930
Earnings / (Loss)
before interest and tax	(5,289,709)	913,698	(75,957,786)	(80,333,797)
Reportable
segment assets	166,985,532	10,782,631	371,340,088	549,108,251
Reportable
segment liabilities	69,895,006	239,623	44,736,027	114,870,656

- 16 -

SOF ISA SA

6) SUBSIDIARIES

Details of the Group’s significant subsidiaries at year-end are as follows:

Name of the subsidiary		Ownership	Voting
Place of incorporation	interest	held	rights	Principal activity
		%	%
Sofisa Canada Ltd		100	100	Residential real estate
Vancouver, Canada				development
British Pacific Properties Ltd		100	100	Residential real estate
Vancouver, Canada				development
British Pacific Enterprises Ltd		100	100	Residential real estate
Vancouver, Canada				development
British Pacific Holdings Ltd		100	100	Investment holding
Vancouver, Canada
Rodgers Creek G.P. Ltd		100	100	Residential real estate
Vancouver, Canada				development
The British Pacific Properties Ltd Partnership		100	100	Residential real estate
Vancouver, Canada				development
The Peak British Properties GP Ltd		100	100	Residential real estate
Vancouver, Canada				development
The Courtenay British Properties GP Ltd		100	100	Residential real estate
Vancouver, Canada				development
The Uplands One G.P. Ltd		100	100	Residential real estate
Vancouver, Canada				development
The Uplands Two G.P. Ltd		100	100	Residential real estate
Vancouver, Canada				development
The Uplands Three G.P. Ltd		100	100	Residential real estate
Vancouver, Canada				development
The Uplands Four G.P. Ltd		100	100	Residential real estate
Vancouver, Canada				development
The Uplands Ten G.P. Ltd		100	100	Residential real estate
Vancouver Canada				development
The Uplands Fourteen G.P Ltd		100	100	Residential real estate
Vancouver, Canada				development
Rodgers Creek Ltd Partnership		100	100	Residential real estate
Vancouver, Canada				development
The Peak British Properties Ltd Partnership		100	100	Residential real estate
Vancouver, Canada				development
The Courtenay British Properties Ltd Partnership 100			100	Residential real estate
Vancouver, Canada				development
The Uplands One Limited Partnership		100	100	Residential real estate
Vancouver, Canada				development
The Uplands Two Limited Partnership		100	100	Residential real estate
Vancouver, Canada				development
The Uplands Three Limited Partnership		100	100	Residential real estate
Vancouver, Canada				development
The Uplands Four Limited Partnership		100	100	Residential real estate

- 17 -

SOF ISA SA

Vancouver, Canada			development
The Uplands Ten Limited Partnership	100	100	Residential real estate
Vancouver, Canada			development
The Uplands Fourteen Limited Partnership	100	100	Residential real estate
Vancouver, Canada			development
British Pacific Homes Limited	100	100	Residential real estate
Vancouver, Canada			development
British Pacific Properties Parking Corp	100	100	Residential real estate
Vancouver, Canada			development
SOFISA USA Inc.	100	100	Residential and
Delaware, USA			commercial real estate
			development
Sofisa Malaysia (L) Ltd	100	100	Investment company to
Labuan, Malaysia			provide finance to group
			companies
Sofisa Properties SDN BHD	100	100	Investment holding
Labuan, Malaysia
Sofisa Finance SA	100	100	Finance for the Group and
Fribourg, Switzerland			portfolio investment

CASH AND CASH EQUIVALENTS	2023	2022
	CHF	CHF
Cash at banks and in hand	10,043,214	8,677,913
Short-term deposits	21,048	35,550
Total	10,064,262	8,713,463

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term

deposits are made for varying periods of between one day and three months, depending on

the immediate cash requirements of the Group, and earn interest at the respective short-term

deposit rates.

The increase in cash is due to the cash generated by operating activities, partially offset by

the repayment of short term borrowing and the dividend payment.

8) RESTRICTED CASH

As at December 31, 2023, the Group’s CHF 958,283 restricted cash balance (2022 – CHF

201,010) was related to holdbacks paid by customers for homes under construction. Restricted

cash for all periods is presented separately on the statement of financial position.

- 18 -

SOF ISA SA

SECURITIES	2023	2022
	CHF	CHF
Financial assets carried at fair value through profit and loss
Non derivative financial assets (FVTPL)	405,577,181	364,946,336
Total	405,577,181	364,946,336

Securities are pledged as collateral bank credit facility (see note 18).

10)

TRADE AND OTHER RECEIVABLES	2023	2022
	CHF	CHF
Trade receivables	104,499	137,669
Amounts due from customers under construction
contracts in progress	0	3,972,361
Amounts due from customers under completed
contracts and servicing agreements	379,845	5,969,415
Harmonized Sales Tax (HST)	567,887	469,449
Other receivables	16,068	16,306
Total	1,068,299	10,565,200

No provision for doubtful trade accounts receivable was deemed necessary.

11)

CURRENT TAX ASSETS

CURRENT TAX ASSETS AND LIABILITIES

Current tax assets	2023	2022
	CHF	CHF
Withholding tax receivable	396,780	226,745
Tax refund receivable	1,405,166	4,203,707
Total	1,801,946	4,430,452

Current tax liabilities	2023	2022
	CHF	CHF
Current tax payable and other taxes	125,382	782,623
Previous year tax payable	72,607	854,581
Withholding tax payable	0	2,644,183
Total	197,989	4,281,387

- 19 -

SOF ISA SA

						2023
		Opening	Charged to	Charged	Exchange	Closing
b)	DEFERRED TAX ASSETS/(LIABILITIES)	balance	income	to OCI	differences	balance
		CHF	CHF	CHF	CHF	CHF
	Temporary differences
	Securities	(13,130,472)	(5,133,517)	-	-	(18,263,989)
	Furniture and equipment	367,498	(25,123)	-	(22,960)	319,415
	Accruals and deferred income	2,765,661	(271,392)	-	(169,377)	2,324,891
	Unrealised
	exchange gain	(2,441,818)	(1,128,342)	-	-	(3,570,160)
	Retirement benefit
	obligations	(54,246)	5,106	11,909	3,331	(33,900)
	Losses carry forward	710,908	412,037		(63,506)	1,059,439
	Warranties provision	18,438	-	-	(1,204)	17,234
	Temporary differences	(11,764,032)	(6,141,230)	11,909	(253,716)	(18,147,070)
	Tax losses	167,282	281,065	-	-	448,347
Income tax benefit / (expense)
recognised in profit or loss		(11,596,750)	(5,860,165)	11,909	(253,716)	(17,698,723)

					2022
	Opening	Charged to	Charged	Exchange	Closing
DEFERRED TAX ASSETS / (LIABILITIES)	balance	income	to OCI	differences	balance
	CHF	CHF	CHF	CHF	CHF
Temporary differences
Securities	(23,758,226)	10,627,754	-	-	(13,130,472)
Furniture and equipment	413,459	(25,734)	-	(20,226)	367,498
Accruals and deferred income	2,392,127	538,216	-	(164,683)	2,765,661
Unrealised
exchange gain	(2,379,357)	(62,461)	-	-	(2,441,818)
Retirement benefit
obligations	120,485	18,214	(185,268)	(7,678)	(54,246)
Losses carry forward	402,057	354,871		(46,020)	710,908
Warranties provision	19,475	-	-	(1,037)	18,438
Temporary differences	(22,789,980)	11,450,860	(185,268)	(239,643)	(11,764,032)
Tax losses	879,116	(754,193)	-	42,359	167,282
Income tax benefit / (expense)
recognised in profit or loss	(21,910,864)	10,696,667	(185,268)	(197,284)	(11,596,750)

- 20 -

SOF ISA SA

Deferred tax balances are presented in the statement of financial position as follows:

	2023	2022
	CHF	CHF
Deferred tax assets	4,135,426	3,975,540
Deferred tax liabilities	(21,834,149)	(15,572,290)
Net balance	(17,698,723)	(11,596,750)

Tax recognised in profit or loss	2023	2022
	CHF	CHF
Tax expense comprises:
Current tax (expense)	(539,549)	(1,063,347))
Deferred tax income/(expense) relating to the origination and reversal of temporary
differences	(6,141,230)	11,450,860
Recognition of deferred tax assets on losses
carried forward	281,065	(754,193)
Total tax expense	(6,399,714)	9,633,320

The total charge for the year can be reconciled to the accounting profit / (loss) as follows:

	2023	2022
	CHF	CHF
(Loss) profit from continuing operations	42,507,043	(87,282,549)
Income tax expense calculated at 13.87%
(2022: 13.87%)	(5,894,603)	12,103,782
Effect of non-deductible and not taxable items	528,771	(776,244)
Effect of expenses that are not deductible in determining taxable profit	(242,816)	(874,217)
Other items	(17,829)	-
Effect of different tax rates of subsidiaries
operating in other jurisdictions	(773,237)	(820,001)
Total tax expense	(6,399,714)	(9,633,320)

- 21 -

SOF ISA SA

12) RETIREMENT BENEFIT OBLIGATION

The Group operates a funded defined benefit plan for four qualifying employees of one of its

subsidiaries in Canada. Under the plan, the employees are entitled to retirement benefits

based upon pensionable salary and length of service on attainment of a retirement age of

65 or, subject to actuarial reduction of benefit, as early as age 55. No other post-retirement

benefits are provided to these employees, except for the supplementary pension plan as

disclosed below.

The Group also operates unfunded non-contributory defined benefit pension plans for three

beneficiaries, which provides pension benefits that are based on the difference between the

annual pensions which they would be eligible to receive under the subsidiary’s registered

pension plan (the “Plan”) if the maximum pensions payable were not limited by the Income

Tax Act and Regulations, and the maximum pensions which they are eligible to receive under

the terms of the Plan.

The Group’s two defined benefit pension plans, as described above, are valued as at

December 31 each year for the purpose of the Group’s accounting in accordance with

standard IAS19. In addition, the funded plan was last valued as at December 31, 2021 for the

purpose of determining the Group’s contribution to the plan.

Salaried plan

The principal assumptions used for the purposes of the actuarial valuations were as follows:

				Valuation at December 31,
		2023		2022
		%		%
Discount rate(s)		4.65		5.05
Expected rate(s) of salary
increase		2.75		2.75
Inflation		2.00		2.00
Mortality	CPM2014	Priv	CPM2014	Priv
		Table – Fully generational		Table – Fully generational
		Improvement Scale CPM-B		Improvement Scale CPM-B

Amounts recognised in profit or loss in respect of these defined benefit plans are as follows:

	2023	2022
	CHF	CHF
Current service cost	71,745	131,117
Net interest cost	(30,064)	(2,527)
Administrative expenses	6,383	6,829
Defined benefit cost recognised in profit or loss	48,064	135,419
Remeasurements – recognised in OCI	11,809	(645,204)
Total defined benefit cost recognised in profit or loss
and OCI	59,873	(509,785)

The cost for the year is included in the other operating costs in the statement of profit or loss

and other comprehensive income.

- 22 -

SOF ISA SA

Present value of defined benefit obligation is as follows:

	2023	2022
	CHF	CHF
Present value of funded defined benefit obligation	(3,886,736)	(3,739,834)
Fair value of plan assets	4,387,546	4,339,693
Present value of defined benefit asset	500,810	599,859

Movements in the present value in the defined benefit obligation in the current period were

as follows:

	2023	2022
	CHF	CHF
Opening defined benefit obligation	3,739,834	5,104,351
Current service cost	71,745	131,117
Interest cost	172,724	142,590
Employees' contributions	16,085	17,004
Benefits paid	(159,192)	(157,613)
Remeasurements (Actuarial loss (gain)):
a. changes in demographic assumptions	-	-
b. changes in financial assumptions	204,320	(1,305,090)
c. experience adjustments	85,468	79,216
Exchange difference	(244,248)	(271,741)
Closing defined benefit obligation	3,886,736	3,739,834

Movements in the present value of the plan assets in the current period were as follows:

2023

2022

	CHF	CHF
Opening fair value of plan assets	4,339,693	5,152,967
Interest income	202,788	145,116
Return on plan assets (excluding amount
included in net interest income)	277,980	(580,670)
Employer contributions	0	44,047
Employees' contributions	16,085	17,004
Other operating costs paid from plan assets	(6,383)	(6,829)
Benefits paid	(159,192)	(157,613)
Exchange difference	(283,425)	(274,329)
Closing fair value of plan assets	4,387,546	4,339,693

- 23 -

SOF ISA SA

The major categories of plan assets are as follows:

	2023	2022
	%	%
Equity instruments	61	61
Debt instruments	38	38
Cash and short-term	1	1
Total	100	100

The actual return on plan assets was CHF 480,768 (2022: CHF - 435,554).

Supplemental plan

The principal assumptions used for the purposes of the actuarial valuations were as follows:

	Valuation at December 31,
	2023	2022
	%	%
Discount rate(s)	4.65	5.05
Expected rate(s) of salary increase	N/A	N/A

Amounts recognised in profit or loss in respect of these defined benefit plans are as follows:

Remeasurements - recognised in OCI	2023	2022
	CHF	CHF
Interest cost	17,617	13,453
Defined benefit cost recognised in profit or loss	17,617	13,453
Remeasurements - recognised in OCI	32,298	(40,974)
Total defined benefit cost recognised in profit or loss
and OCI	49,915	(27,521)

The cost for the year is included in other operating costs in the statement of profit or loss.

Present value of unfunded defined benefit obligation is as follows:

	2023	2022
	CHF	CHF
Present value of unfunded defined benefit
obligation	375,257	398,950

- 24 -

SOF ISA SA

The amount included in the statement of financial position arising from the Group’s obligation

in respect of its defined benefit plans is as follows:

	2023	2022
	CHF	CHF
Unfunded defined benefit obligation	375,257	398,950

Movements in the present value of the defined benefit obligation in the current period were

as follows:

	2023	2022
	CHF	CHF
Opening defined benefit obligation	398,950	502,602
Interest cost	17,617	13,453
Benefits paid	(47,553)	(49,374)
Remeasurements (Actuarial loss (gain)):
a. changes in demographic assumptions	-	-
b. changes in financial assumptions	10,021	(65,558)
c. experience adjustments	22,277	24,584
Exchange difference	(26,055)	(26,757)
Closing defined benefit obligation	375,257	398,950

The assets and liabilities recognised in the balance sheet and gains or losses recognised in

other comprehensive income at December 31 are as follows:

2023	Salaried plan	Supplemental	TOTAL
		plan	CHF
Present value of defined benefit asset /
(obligation)	500,810	(375,257)	125,553
Other comprehensive income (loss / (gain))	11,809	32,298	44,107
- changes in demographic assumptions	-	-	-
- changes in financial assumptions	204,320	10,021	214,341
- experience adjustments	85,468	22,277	107,745
- return on plan assets (excluding amount
included in net interest income)	(277,980)	-	(277,980)

2022	Salaried plan	Supplemental	TOTAL
		plan	CHF
Present value of defined benefit asset /
(obligation)	599,859	(398,950)	200,909
Other comprehensive income (loss / (gain))	(645,204)	(40,974)	686,178
- changes in demographic assumptions	-	-	-
- changes in financial assumptions	(1,305,090)	(65,558)	(1,370,648)
- experience adjustments	79,216	24,584	103,800
- return on plan assets (excluding amount
included in net interest income)	580,670	-	580,670

- 25 -

SOF ISA SA

The plans in Canada expose the Group to actuarial risks such as: investment risk, interest rate

risk, longevity risk and salary risk.

Investment risk	The present value of the defined benefit plan liability is calculated using a
	discount rate. If the return on plan asset is below this rate, it will create a
	plan deficit.
Interest risk	A decrease in the interest rate will increase the plan liability. However, this
	will be partially offset by an increase in the return on the plan’s investments.
Longevity risk	The present value of the defined benefit plan liability is calculated by
	reference to the best estimate of the mortality of plan participants both
	during and after their employment. An increase in the life expectancy of
	the plan participants will increase the plan’s liability.
Salary risk	The present value of the defined benefit plan liability is calculated by
	reference to the future salaries of plan participants. As such, an increase in
	the salary of plan participants will increase the plan’s liability.

Significant actuarial assumptions for the determination of the defined obligation are discount

rate, inflation/pension increase rate, expected salary increase and mortality. The sensitivity

analyses below have been determined based on reasonably possible changes of the respective

assumptions occurring at the end of the reporting period, while holding all other assumptions

constant.

Assumption	Salaried plan		Supplemental plan
Discount rate	If the discount rate is 0.5 points		If the discount rate is 0.5 points higher
	higher (lower), the defined benefit		(lower), the defined benefit
	obligation would decrease by CHF		obligation would decrease by CHF
	261,703 (increase by CHF		269,618).	12,447 (increase by CHF	13,404).
Inflation /	If the expected inflation/pension		If the expected inflation/pension
pension	increase rate is 0.5 points higher		increase rate is 0.5 points higher
increase rate	(lower), the defined benefit		(lower), the defined benefit
	obligation would increase by CHF		obligation would increase by CHF
	233,107 (decrease by CHF 232,980).		12,894	(decrease by CHF 12,064).
Salary increase	If the expected salary growth rate is		N/A
rate	0.5 points higher (lower), the defined
	benefit obligation would increase by
	CHF	18,319 (decrease by CHF
	36,830).
Mortality	If the life expectancy increases		If the life expectancy increases
	(decreases) by one year for both		(decreases) by one year for both
	men and women, the defined		men and women, the defined
	benefit obligation would increase by		benefit obligation would increase by
	CHF	146,873 (decrease by CHF	CHF	29,170 (decrease by CHF
	170,681).		27,766).

- 26 -

SOF ISA SA

13)

INVENTORIES

Residential property under development and land

Held for future development

	2023	2022
	CHF	CHF
Balance beginning of year	143,890,363	117,267,497
Add (deduct):
Development costs	35,067,482	42,348,891
Carrying costs	1,893,118	2,045,026
Cost of sales	(50,474,371)	(9,078,397)
Net foreign currency exchange differences	(8,837,323)	(8,692,654)
Total	121,539,269	143,890,363

In accordance with IFRS the “land held for future development” is carried at the lower of cost

and estimated realisable value.

14)

OTHER ASSETS

	2023	2022
	CHF	CHF
Current assets
Prepaid expenses	62,424	94,019
Prepaid real estate commissions	1,186,465	1,719,580
Total	1,248,889	1,813,599
Non-current assets
Right-of-use assets	663,308	798,779
Total	663,308	798,779

- 27 -

SOF ISA SA

15)

PROPERTY, PLANT AND EQUIPMENT

			Fixtures,
		Computer,	fittings,
	Leasehold	IT	office		2023
	improvements	equipment	equipment	Buildings	Total
Cost					CHF
At January 1, 2023	136,897	524,084	199,422	2,520,929	3,381,332
Additions (Disposals)	-	56,613	81,558	30,093	168,264
Net foreign currency
exchange differences	(8,941)	(34,227)	(13,025)	(164,641)	(220,834)
At December 31, 2023	127,956	546,470	267,955	2,386,381	3,328,762
Accumulated depreciation
At January 1, 2023	136,811	501,479	183,371	1,955,852	2,777,513
Depreciation charge for the year	85	37,085	11,455	40,252	88,878
Net foreign currency
exchange differences	(8,939)	(34,287)	(12,451)	(129,404)	(185,080)
At December 31, 2023	127,957	504,278	182,375	1,866,699	2,681,309
Carrying amount
At January 1, 2023	86	22,605	16,051	565,078	603,820
At December 31, 2023	0	42,192	85,580	519,682	647,454

			Fixtures,
		Computer,	fittings,
	Leasehold	IT	office		2022
	improvements	equipment	equipment	Buildings	Total
Cost					CHF
At January 1, 2022	144,595	538,493	198,610	2,213,861	3,095,558
Additions (Disposals)	-	14,259	11,385	424,928	450,573
Net foreign currency
exchange differences	(7,698)	(28,668)	(10,573)	(117,860)	(164,799)
At December 31, 2022	136,897	524,084	199,422	2,520,929	3,381,332
Accumulated depreciation
At January 1, 2022	144,411	502,480	190,275	2,024,543	2,861,709
Depreciation charge for the year	94	27,669	3,466	42,003	73,233
Net foreign currency
exchange differences	(7,695)	(28,670)	(10,370)	(110,695)	(157,429)
At December 31, 2022	136,811	501,479	183,371	1,955,851	2,777,512
Carrying amount
At January 1, 2022	183	36,013	8,335	189,317	233,849
At December 31, 2022	86	22,605	16,051	565,078	603,820

- 28 -

SOF ISA SA

16) INVESTMENT IN OTHER COMPANIES

In the current year, the Group increased by USD 385,936 (CHF 324,804) its investment in a real

estate development in the State of Georgia and has acquired a new development site in

Connecticut representing an investment of USD 2,000,000 (CHF 1,683,200). Complementary

distributions totalling USD 448,423 were received from existing or recently sold development

sites.

In 2022, one development site acquired in 2018 was sold with a net gain on sale of USD 359,000

representing an average net return per annum of 31.2% and complementary distributions

totalling USD 636,800 were received from development sites sold in 2021. Also Group

increased its investments in the State of Georgia by USD 2,216,722 (CHF 2,050,911).

17)

OTHER LIABILITIES

	2023	2022
	CHF	CHF
Current liabilities
Accrued expenses	5,666,605	12,090,989
Deferred revenue	17,971,136	10,560,157
Lease liability	81,554	83,479
Total	23,719,295	22,734,625
Non-current liabilities
Other liabilities	63,830	68,290
Lease liability	581,754	715,300
Total	645,584	783,590

18)

INTEREST BEARING LIABILITIES

	2023	2022
	CHF	CHF
Bank overdraft	30,748,800	31,384,827
Short term part of the loans	0	22,793,645
Long term part of the loans	10,324,500	9,339,960
Total fixed-term loans	41,073,300	63,518,432

The Group has a CAD 60,000,000 credit line with a Swiss bank of which three fixed-term loans

of USD 6,000,000, CAD 15,000,000, and CHF 7,000,000 were drawn at December 31, 2022. All

these fixed-term loans were terminated and repaid on March 27, 2023, resulting in a negative

penalty, due to loan contractual conditions better than the ones on the markets at the time

of repayment. This credit line is still available and secured by the securities.

The fair value of these fixed-term loans is estimated to CHF 0 as at December 31, 2023 (2022:

CHF 22,868,173).

- 29 -

SOF ISA SA

The Group benefits from another CAD 75,000,000 (2021: CAD 75,000,000) credit facility with a

Canadian chartered bank, secured by an assignment of certain land holdings, from which

letters of credit totalling CAD 21,008,420 (2022: CAD 27,076,438) were issued. The bank

overdraft from this facility amounted to CAD 48,172,960 or CHF 30,748,800 as at December

31, 2023 (2022: CHF 31,384,827).

On October 7, 2021 the Group secured a non-revolving Mezzanine loan with a third party in

the amount of CHF 5,106,400 (CAD 8,000,000) for the purposes of developing the Hawksley,

a multi-unit residential development. The loan is secured by the Hawksley land in Rodgers

Creek Area 6. Repayment of the loan and accrued interest is due upon the closing of the

sale of each unit, or the third party can demand repayment if the Group fails to complete

the project. A further CHF 2,737,012 (CAD 4,287,971) was funded by the mezzanine loan

during the year ended December 31, 2023. In June 2023, CHF 2,472,253 (CAD 3,873,183) was

repaid.

On April 7, 2022 the Group secured a non-revolving Mezzanine loan with a third party in the

amount of CHF 2,234,050 (CAD 3,500,000) for the purposes of developing the Wildwood, a

residential town home development. The loan is secured by the Wildwood land in Rodgers

Creek Area 6. Repayment of the loan and accrued interest is due upon the closing of the

sale of each individual town home unit, or the third party can demand repayment if the

Group fails to complete the project. A further CHF 1,596,545 (CAD 2,501,246) was funded by

the mezzanine loan during the year ended December 31, 2023. In October 2023, CHF 266,775

(CAD 417,946) was repaid.

19)

SHARE CAPITAL

	2023	2022
	CHF	CHF
3’960 fully paid ordinary shares	3,960,000	3,960,000
	Number	Share
Fully paid ordinary shares	of shares	capital
Balance at January 1, 2022 and 2023	3,960	3,960,000
Balance at December 31, 2022 and 2023	3,960	3,960,000

Fully paid ordinary shares, which have a par value of CHF 1,000, carry one vote per share and

carry a right to dividends.

Sofisa SA issued 3,000 preference shares of a par value of CHF 735 each. The holder of such

preference shares is entitled to the following:

• Cumulative floating preferential dividend declared annually based on the 10-year Swiss

Government Bond plus 3.75% p.a.

• If one year the preferential dividend cannot be declared, such dividend will be

recoverable by priority out of the profits realised the next years.

• Unpaid dividends will be increased by an amount equal to the above interest plus 1%.

Under IAS 32, as the holder of the preference shares is entitled to an annual preferential

dividend and can redeem the shares at certain dates, the preference shares do not meet

the definition of equity and are presented as liabilities in the statement of financial position.

Consequently, the dividends related to this class of shares are considered as an interest

expense as a charge of the business year.

- 30 -

SOF ISA SA

20)

RESERVES

	2023	2022
	CHF	CHF
General	1,560,000	1,560,000
Special	170,000,000	170,000,000
Balance at the year end	171,560,000	171,560,000

The special reserve was created after being approved by decision of the General Meeting

of Shareholders on May 12, 1993.

There were no movements in the reserves in 2023.

21)

RETAINED EARNINGS

	2023	2022
	CHF	CHF
Balance at beginning of year	287,865,361	380,162,617
Net profit (loss) for the year	36,107,329	(77,649,229)
Other comprehensive income	(40,762)	501,607
Payment of dividends	(7,820,000)	(15,149,634)
Balance at the end of year	316,111,928	287,865,361

On 5 June 2023, a dividend of CHF 2,000 per share was paid to holders of fully paid ordinary

shares.

In addition, dividends of CHF 111,600 (2022: CHF 78,000) have been paid on shares numbered

3.961 to 6,960 classified as liabilities.

In respect of the current year, the Board of the Directors proposes a dividend of CHF 2,00 0

per share be paid on 24 June 2024 to eligible holders of shares numbered 1 to 2,394 and 2,445

to 3,960 and a total of CHF 102,600 be paid to holders of shares numbered 3,961 to 6,960. This

decision is subject to approval by shareholders at the Annual General Meeting.

22)

CUMULATIVE TRANSLATION ADJUSTMENT

	2023	2022
	CHF	CHF
Balance at beginning of year	(29,147,766)	(29,220,397)
Arising on translation of foreign operations	(2,728,261)	72,631
Balance at the end of year	(31,876,027)	(29,147,766)

Exchange differences relating to the translation from the functional currencies of the Group’s

foreign subsidiaries into CHF are recognised in the cumulative translation differences.

- 31 -

SOF ISA SA

23)

SALES REVENUE

	2023	2022
	CHF	CHF
Revenue recognised at a point in time
From single-family detached homes build on speculation and individual residential units in multi-family	64,224,824	7,953,496
buildings
Revenue recognised over time
From servicing work	503,226	3,578,743
From custom built single-family detached homes	632,331	1,225,691
Total	65,360,381	12,757,930

24)

INVESTMENT INCOME AND OTHER FINANCIAL INCOME

	2023	2022
	CHF	CHF
Net income (loss) from securities
Dividend and interest income	8,465,561	7,610,497
Realised gain on securities	1,326,235	1,721,499
Realised loss on securities	(3,254,562)	(2,665,104)
Fees on portfolio management	(294,768)	(299,345)
Increase (decrease) in value of securities	35,259,223	(80,987,890)
Total investment income (loss)	41,501,689	(74,620,343)
Other financial income
Interest received	814,410	366,769
Total other financial income	814,410	366,769
Total investment income (loss) and other financial income (loss)	42,316,099	(74,253,574)
Investment revenue earned on financial assets, analysed by category of asset, is as follows:
Fair value through profit or loss (FVTPL)	41,501,689	(74,620,343)
Loans and receivables (including cash)	814,410	366,769
Total investment income (loss) and other financial income (loss)	42,316,099	(74,253,574)

- 32 -

SOF ISA SA

25)

FINANCIAL EXPENSES

	2023	2022
	CHF	CHF
Bank charges	(220,101)	(230,748)
Interest on long term debt	(1,818,544)	(1,906,759)
Dividends on preferential registered shares	(107,100)	(94,800)
Exchange difference	(3,193,301)	(5,083,214)
Total	(5,339,046)	(7,315,521)

26) OTHER RELATED PARTY TRANSACTIONS

During the year the Group paid short-term benefits totalling CAD 300,000 or CHF 191,490 (2022:

CHF 167,311) recorded in other operating costs to key subsidiary operating management. Key

subsidiary operating management is defined as directors and officers.

There are no other related party transactions to be disclosed other than those presented in

note 16 and in note 30.

27) COMMITMENTS AND CONTINGENT LIABILITIES

On January 1, 2017, the Group entered into a development agreement with a third party land

owner whereby the parties agreed to jointly develop, construct and sell to third party

purchasers, homes to be constructed on the third party land owner’s property. The projects

were completed. The Group is responsible to fund all construction costs, currently estimated to

be nil (2022: CHF 403,987).

At December 31, 2023, the Group has outstanding letters of credit aggregating to

approximately CHF 13,409,674 (2022: CHF 18,490,500) in connection with real estate

development projects.

In fiscal years 2016 and 2017, the Group received Notices of Reassessment from the Canada

Revenue Agency (“CRA”) totaling CAD 1,860,189 (CHF 1,187,359) in additional income taxes

and interest and transfer pricing penalties totaling CAD 718,929 (CHF 458,892) in respect of the

Group’s December 31, 2012 and 2013 taxation years.

While management and the Group’s legal counsel believe the reassessments are without merit

and the Group is more likely than not to be successful in its defense, under the reassessments,

CRA is asserting that the interest rate on certain debt with an affiliate should be substantially

l ower, resulting in a reduction of tax deductible interest expense and a corresponding increase

in taxable income.

Subsequent to filing Notices of Objection for both reassessments, the Group filed a Notice of

Appeal to the Tax Court of Canada appealing to the 2012 and 2013 reassessments on July 4,

2019. On November 29, 2019, the Attorney General of Canada on behalf of the CRA filed a

Reply to the Notice of Appeal. To date, the Tax Court of Canada has not released any decision

on the Notice of Appeal.

- 33 -

SOF ISA SA

While management and legal counsel believe the reassessments are without merit, during the

2021 fiscal year the Group offered to settle the matter with CRA on a without prejudice basis

for approximately CAD 930,000 in order to avoid future litigation costs and not as an admission

of guilt. CRA has not accepted or rejected the settlement offer.

Should the CRA be successful in its claim and apply their position to open taxation years

beyond 2012 and 2013, the Group has estimated the potential income tax exposure for the

remaining open taxation years to be approximately CAD 11.3 million excluding any interest or

penalties.

In fiscal 2020, the Group was notified by CRA that the Company’s fiscal 2017 through 2019

taxation years would once again be subject to an audit by CRA. During the year 2022, the

Group was notified by CRA that there were no adjustments stemming from the main income

tax audit, however, the rate of interest paid on an affiliate’s debt for fiscal 2017 through 2019

was still subject to audit by CRA’s transfer pricing division.

As management believes the Group will ultimately be successful in its defense of the 2012 and

2013 reassessments and will not be reassessed for any additional taxes, interest and penalties

for any open taxation years, no amounts have been accrued in the December 31, 2022 or

2023 consolidated financial statements for the impact of the reassessments nor any similar

adjustments that would likely be proposed for open taxation years should CRA ultimately be

successful.

28) FINANCIAL RISK MANAGEMENT

The Sofisa Group has specific guidelines on managing financial assets and liabilities. In order to

optimise financial resources, the management of liquidity not required for operational purposes

is largely centralised as long-term Group financing.

Capital risk management: The Group manages its capital to ensure that it will be able to

continue as a going concern while maximising the return to shareholders through the

optimisation of the debt and equity balance. The Group overall strategy remains unchanged

from previous year.

The capital structure of the Group consists of debt, which includes the preference shares, cash

and cash equivalents and securities and equity attributable to the shareholders, comprising

issued capital, reserves and retained earnings as disclosed in Notes 20, 21 and 22.

Significant accounting policies: Details of the significant accounting policies and methods

adopted, including the criteria for recognition, the basis of measurement and the basis on

which income and expenses are recognised, in respect of each class of financial asset,

financial liability and equity instrument are disclosed above.

- 34 -

SOF ISA SA

Categories of financial instruments:

					2023
	Financial	At fair value	Financial	Total	Fair
	assets	through profit	liabilities	carrying	value
	at	or loss at		amount
	amortised		amortised
	cost		cost
	CHF	CHF	CHF	CHF	CHF
Financial assets
Cash and cash equivalents	10,064,262	-	-	10,064,262	10,064,262
Restricted cash	958,283	-	-	958,283	958,283
Securities	-	405,577,181	-	405,577,181	405,577,181
Trade and other receivables	1,068,299	-	-	1,068,299	1,068,299
Investment in other companies	-	10,166,375		10,166,375	10,166,375
Total financial assets	12,090,844	415,743,556	-	427,834,400	427,834,400
Financial liabilities
Trade and other payables	-	-	8,513,728	8,513,728	8,513,728
Short term part of interest- bearing debt	-	-	30,748,800	30,748,800	32,011,224
Long term part of interest- bearing debt	-	-	10,324,500	10,324,500	13,791,807
Other liabilities	-	-	23,719,295	23,719,295	23,719,295
Preference shares	-	-	2,256,300	2,256,300	2,256,300
Total financial liabilities	-	-	75,562,623	75,562,623	80,292,354

					2022
	Financial	At fair value	Financial	Total	Fair
	assets	through	liabilities	carrying	value
		profit
	at	or loss at		amount
	amortised		amortised
	cost		cost
	CHF	CHF	CHF	CHF	CHF
Financial assets
Cash and cash equivalents	8,713,463	-	-	8,713,463	8,713,463
Restricted cash	201,010	-	-	201,010	201,010
Securities	-	364,946,336	-	364,946,336	364,946,336
Trade and other receivables	10,565,200	-	-	10,565,200	10,565,200
Investment in other companies	-	8,968,780	-	8,968,780	8,968,780
Total financial assets	19,479,673	373,915,116	-	393,394,789	393,394,789

- 35 -

SOF ISA SA

Financial liabilities
Trade and other payables	-	-	5,719,532	5,719,532	5,719,532
Short term part of interest- bearing debt	-	-	54,178,472	54,178,472	55,675,415
Long term part of interest- bearing debt	-	-	9,339,960	9,339,960	11,943,449
Other liabilities	-	-	22,734,625	22,734,625	22,734,625
Preference shares	-	-	2,260,800	2,260,800	2,260,800
Total financial liabilities	-	-	94,233,389	94,233,389	98,333,821

Financial risk management objectives: The Group finance management function provides

services to the business, co-ordinates access to domestic and international financial markets,

monitors and manages the financial risks relating to the operations of the Group through

internal risk reports which analyse exposures by degree and magnitude of risks. These risks

include market risk, credit risk, liquidity risk and other market risk.

The Group delegates other investment decisions to external Portfolio Managers. The mandates

are entrusted in accordance with the Swiss Law, within a clearly defined framework and

investments guidelines. In selecting individual investments, Portfolio Managers must adhere to

the principle of risk diversification and comply with the percentage limits, the investment

universe or the composition of the agreed benchmark MSCI All Country World (net dividend

invested) in CHF.

Market risk management: Market risks are potential losses that the Group could incur through

changes in the variable conditions. The variables may be the equity price risk, exchange rates

and interest rates. Changes in the fair values of financial assets, financial liabilities caused by

such variable factors may affect the Group’s financial position and results.

Sensitivity analysis with respect to price risk

The Group is exposed to price risks arising from portfolio investments. The sensitivity analyses

below have been determined based on the exposure to price risks at the reporting date.

If prices had been 10% higher/lower, net profit for the year ended December 31, 2023 would

have been affected as the portfolio investment are classified as at fair value through profit and

loss. The profit would increase/decrease by CHF 40.62 million (CHF 36.54 million in 2022).

Exchange rate risk management: The Group is exposed to exchange rate risk, mainly in relation

to the USD, CAD, EUR, GBP, JPY and CNY that affect the Group’s assets and earnings in Swiss

francs. The foreign exchange risks are not hedged.

Considering the weight of the different foreign currencies in which our assets are invested, the

impact of the exchange rate effect on our investment values may be estimated to about

-7.80 % in 2023 (-1.20 % in 2022).

Sensitivity analysis with respect to foreign currencies

The sensitivity analysis covers only monetary items in the statements of financial position that,

relative to the functional currency of the Group, are settled in foreign currencies. The sensitivity

analysis excludes net investment in Group companies. The largest monetary items in the

statements of financial position of the Group companies relate to the currency pairs CHF/USD,

CHF/EUR, CHF/JPY, CHF/GBP and CHF /CNY.

- 36 -

SOF ISA SA

If the CHF had been 10% stronger (weaker) against the USD at December 31, 2023, the Group’s

net income would have been CHF 25.10 million lower (higher). In the prior year, the same

percentage difference in the exchange rate would have caused net income to be CHF 21.78

million lower (higher).

If the CHF had been 10% stronger (weaker) against the EUR at December 31, 2023, the Group’s

net income would have been CHF 3.59 million lower (higher). In the prior year, the same

percentage difference in the exchange rate would have caused net income to be CHF 3.27

million lower (higher).

If the CHF had been 10% stronger (weaker) against the JPY at December 31, 2023, the Group’s

net income would have been CHF 2.20 million lower (higher). In the prior year, the same

percentage difference in the exchange rate would have caused net income to be CHF 2.03

million lower (higher).

If the CHF had been 10% stronger (weaker) against the GBP at December 31, 2023, the Group’s

net income would have been CHF 1.41 million lower (higher). In the prior year, the same

percentage difference in the exchange rate would have caused net income to be CHF 1.39

million lower (higher).

If the CHF had been 10% stronger (weaker) against the CNY at December 31, 2023, the Group’s

net income would have been CHF 1.13 million lower (higher). In the prior year, the same

percentage difference in the exchange rate would have caused net income to be CHF 1.33

million lower (higher).

Credit risk management: Credit risks arise when a customer or a third party fails to meet its

contractual obligations and causes the Group a financial loss. In the real estate development,

the Group is exposed to credit risk on its account receivables. The exposure to this risk is

generally concentrated to a limited number of debtors, and is also concentrated

geographically in British Columbia, Canada and is subject to the related economic conditions

in that region. Credit risk in this sector arises generally from sales of residential property and is

mitigated by the underlying lien or charge on the property. The Group does not have any

significant credit risk exposure. Maximum exposure to credit risk is limited to the carrying value

of account receivables and securities.

Liquidity risk management: The aim of liquidity risk management is to provide sufficient cash to

meet the Group’s financial liabilities on time while maintaining the flexibility to take advantage

of market opportunities and optimum investment conditions. The Group’s credit standing

enables it to borrow cash for financing at an advantageous rate.

The liquidity risk is mitigated by the cash at disposal, and the large securities portfolio made

exclusively of listed shares easily realisable on the equity markets.

At December 31, 2023, the Group had the following undrawn committed borrowing facilities

available:

	2023	2022
	CHF	CHF
Expiring less than 1 year	3,714,025	1,342,173

- 37 -

SOF ISA SA

The following tables detail the Group’s remaining contractual maturity for its non-derivative

financial liabilities. The tables have been drawn up based on the undiscounted cash flows of

financial liabilities based on the earliest date on which the Group can be required to pay. The

table includes both interest and principal cash flows.

					2023
	Weighted
	average	Less		More
	effective	than		than
	interest rate	1 year	1 - 5 years	5 years	Total
	%	CHF	CHF	CHF	CHF
Non-interest bearing
Trade and other payables	-	8,513,728	-	-	8,513,728
Other liabilities	-	5,545,028	63,830	-	5,608,858
Preference shares	-	-	2,256,300	-	2,256,300
Interest bearing
Bank overdraft	8.20%	33,270,202	-	-	33,270,202
Bank long term debt	14.20%	1,466,079	12,890,138	-	14,356,217
		48,795,037	15,210,268	-	64,005,305

					2022
	Weighted
	average	Less		More
	effective	than		than
	interest rate	1 year	1 - 5 years	5 years	Total
	%	CHF	CHF	CHF	CHF
Non-interest bearing
Trade and other payables	-	5,719,532	-	-	5,719,532
Other liabilities	-	11,939,707	68,290	-	12,007,997
Preference shares	-	-	2,260,800	-	2,260,800
Interest bearing
Bank overdraft	7.45%	33,722,997	-	-	33,722,997
Bank short term debt	1.40%	5,571,854	-	-	5,571,854
Bank short term debt	3.60%	10,612,266	-	-	10,612,266
Bank long term debt	1%	7,023,973	-	-	7,023,973
Bank long term debt	11.13%	1,039,538	12,198,689	-	13,238,226
		75,629,866	14,527,779	-	90,157,644

- 38 -

SOF ISA SA

Reconciliation of liabilities arising from financing activities

The table below details changes in the Group liabilities arising from financing activities,

including both cash and non-cash changes. Liabilities arising from financing activities are

those for which cash flows were, or future cash flows will be, classified in the Group

consolidated financial statement of cash flows as cash flows from financing activities.

					Non-cash changes
			Foreign		Other
						December
	January 1	Cash flows	exchange	Transfer	changes	31
	2023		movements			2023
Short term part of interest bearing
liabilities	54,178,472	(21,380,993)	(2,048,679)	-	-	30,748,800
Long term part of interest bearing
liabilities	9,339,960	1,594,530	(609,990) -		-	10,324,500
Other liabilities	68,290	-	(4,460)	-	-	63,830
Preference
shares	2,260,800	(111,600)	-	-	107,100	2,256,300
	65,847,523	(19,898,063)	(2,663,129)	-	107,100	43,393,430

			Non-cash changes
			Foreign		Other
							December
	January 1	Cash flows	exchange	Transfer	changes		31
	2022		movements				2022
Short term part of interest bearing
liabilities	47,792,602	(13,863,430)	(2,554,345)	22,793,645		-	54,178,472
Long term part of interest bearing
liabilities	23,286,880	9,339,960	(493,235)	(22,793,645)		-	9,339,960
Other liabilities	72,130	-	(3,840)	-		-	68,290
Preference
shares	2,244,000	(78,000)	-	-	94,800		2,260,800
	73,394,612	(4,601,470)	(3,041,420)	-	94,800		65,847,523

Other changes include the transactions directly recognised in the statement of income.

- 39 -

SOF ISA SA

Fair value of financial instruments:

All portfolio investments are concentrated in the global equity mandate tracking MSCI World

AC index. These securities investments are the only financial instruments measured at fair

value subsequent to their initial recognition.

Securities investments (2023: CHF 405,577,181 2022: CHF 364,946,336) qualify as Level 1 fair

value measurement category. Level 1 fair value measurements are those derived from the

quoted price in active markets.

The Group’s policy for determining when transfers between levels of the fair value hierarchy

are deemed to have occurred are based on changes in the level of inputs to valuation

techniques used to measure fair value. There was no transfer between levels of fair value

hierarchy in the current year.

29) RISK ASSESSMENT

The Board of Directors has performed a risk assessment on November 10, 2023.

30) DISCLOSURE OF BOARD COMPENSATION UNDER SECTION 663b bis OF SWISS CODE OF

OBLIGATIONS

2023

		2022
Remuneration (net)	(267,373)	(261,095)
Contribution for old age and survivor
insurance and unemployment insurance	(17,406)	(27,173)
Total indemnity	(284,779)	(288,268)

31) DISCLOSURE OF BOARD SHAREHOLDINGS UNDER SECTION 663c OF SWISS CODE OF

OBLIGATIONS

The ownership interests in SOFISA SA held by members of the Board of Directors are disclosed

below.

	Number of shares		Voting rights
	2023	2022	2023	2022
The Most Hon. Constantine Edmund
Walter Phipps Marquis of Normanby	551	551	7.92%	7.92%
Member of the Board of Directors

32) APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Board of Directors and authorised for issue on

April 18, 2024.

- 40 -

SOF ISA SA

33) ESEF REPORTING

The official version of the Annual Report of Sofisa SA, which includes the consolidated

financial statements is the European Single Electronic Format (ESEF) version available with the

Officially Appointed Mechanism (OAM) tool.

34) SUBSEQUENT EVENTS

Since the end of the year, there have been no events which would significantly affect the

Group result as reported in the consolidated financial statements for the year 2023.

- 41 -