Grupo Posadas B de C : Annual Report

GRUPO POSADAS, S.A.B. de C.V.

Prolongación Paseo de la Reforma 1015, Torre A, Piso 9

Col. Santa Fe Cuajimalpa, delegación Cuajimalpa

Ciudad de México, 05348

Series "A" shares representing the corporate capital of Grupo Posadas, S.A.B. de C.V. quoted on the Bolsa Mexicana de Valores, S.A.B. de C.V. (Mexican Stock

Exchange)

Ticker Code: Posadas A

The shares are registered in the National Securities Registry and quoted on the Mexican Securities Exchange Market, S.A.B. de C.V.

Registration in the National Securities Registry does not imply certification of the merit of the securities, or of the issuer's solvency, of the accuracy or truthfulness of the information contained in this Annual Report, nor does it validate those acts which, if applicable, were in violation of the law

ANNUAL REPORT PRESENTED IN KEEPING WITH THE GENERALLY

APPLICABLE PROVISIONS TO SECURITIES ISSUERS AND OTHER MARKET

PARTICIPANTS FOR THE CORPORATE YEAR ENDING

DECEMBER 31, 2021

1

INFORMATION RELATED TO DEBT SECURITIES IN EFFECT ISSUED BY

GRUPO POSADAS S.A.B. DE C.V.

Debt Instruments	Senior Notes Due 2027
Ticker symbol	"POSADA"
Amount	US$398,581,321
Issue Date	December 15, 2021
Maturity Date	December 30, 2027
Issue term	A single payment on December 30, 2027
Interest and calculation	Step up interest rate:
year 1: 4%, year 2: 5%, year 3 and 4 :7%, years 5 and 6: 8%
procedure
(PIK option for years 1 and 2)
Interest payment periods	Every six months, in the months of June and December
Place and method for paying	PIK option up to 50% of interest at a rate of 6% for year one and 7% for
year two.
interest and principal
All amounts due are to be wire transferred through the "Trustee"
Amortization and early	"Make-Whole" clause
amortization
	Administrative and Guarantee Trust and Pledge Agreement of
	segregated bank accounts to deposit all cash collections from the
	Vacation Club products:
	1. Hotel Fiesta Americana Reforma
	2. Hotel Fiesta Americana Guadalajara
	3. Vacation property real estate:
	a. Grand Fiesta Americana Los Cabos
	b. Fiesta Americana Villas Los Cabos
Guarantee	c. Live Aqua Residence Club Los Cabos
d. Fiesta Americana Acapulco
	e. Fiesta Americana Cozumel
	f. Fiesta Americana Cancún
	g. The Explorean Kohunlich
	h. 16 apartments within the Nima Bay complex located in Puerto
	Vallarta
	4. Accounts Receivables of the Company´s Vacation Club products:
	(Timeshares, Access y Kivac)
	5. Additional investments that the Company may execute.
Trustee	Banco Invex, S.A., Grupo Financiero Invex, División Fiduciaria, as
Trustee of the collateral
Rating by rating institution and	S&P Global Ratings, "B-",
*See website:
its meaning*
www.standardandpoors.com/es,
	Citi Agency & Trust, as "Trustee", and Banco Nacional de México S.A.
Common representative	integrante de Grupo Financiero Banamex, División Fiduciaria as
	"Collateral Agent"
Depositary	Citi Agency & Trust
	Applicable withholding rate on the date of this report, regarding
	interest paid on Senior Notes is subject to (i) for foreign resident
Tax rules	individuals and legal entities, for tax purposes, to a 4.9% withholding
	rate provided that a series of conditions are met, (ii) if any of these
	conditions, such as in article 7, second paragraph of the LMVT.N.is not

T.N. These are the initials in Spanish for the Ley Mexicana de Valores, which translates into English as the Mexican Securities Law

2

	met, residents abroad may be subject to a 10% withholding rate. In
	both cases, advisors should be consulted regarding the tax
	consequences of investing in Senior Notes, including the enforcement
	of specific rules relating to their particular situations. It is possible that
	the tax rules in force may be modified during the Program period and
	during the Issue term.
Calculation Agent	Citi Agency & Trust

The Issuer shall operate in accordance to its applicable corporate by-laws, legal and contractual provisions upon determining the reserves related to a change of control, corporate restructuring, including acquisitions, mergers, split offs, sale or encumbrance of material assets, taking into consideration the participation of the holders of the previously specified securities.

3

ÍNDICE
1) INFORMACIÓN GENERAL	2
a) Glossary of Terms and Definitions	5
b) Executive Summary	6
c) Risk Factors	12
d) Other Securities	40
e) Significant Changes to Securities Rights Registered in the National Securities Registry.	42
f) Public Documents	43

2) THE COMPANY	43
a) History and Development of the Company	43
b) Business Description	48
i) Principal Activity	48
ii) Distribution Channels	50
iii) Patents, Licenses, Brands and Other Contracts	52
iv) Principal Clients	55
v) Applicable Legislation and Tax Situation	56
vi) Human Resources	58
vii) Environmental Performance	59
viii) Market Information	61
ix) Corporate Structure	64
x) Description of the Company´s Principal Assets	65
xi) Judicial, Administrative or Arbitral Proceedings	70
xii) Representative Shares of Corporate Capital	73
xiii) Dividends	74

3) FINANCIAL INFORMATION	75
a) Selected Financial Information	75
b) Financial Information per Business Line, Geographic Zone and Export Sales	75
c) Material Loan Information	76
d) Management Comments and Analysis of the Operating Results and Financial Situation of the
Company	79
i) Operating Results	79
d) Management Comments and Analysis of the Operating Results and Financial Situation of the
Company	86
i) Operating Results	86
d) Management Comments and Analysis of the Operating Results and Financial Situation of the
Company	93
i) Operating Results	93
(In thousands of Mexican pesos)	93
ii) Financial Situation, Liquidity and Capital Markets	100
iii) Internal Control	104
e) Critical Accounting Estimates, Allowances or Reserves	104

4) MANAGEMENT	106
a) External Auditors	106
b) Related Party Transactions and Conflicts of Interest	106
c) Management and Shareholders	107
d) Corporate By-laws and Other Agreements	115

5) CAPITAL MARKETS	118
a) Securities Structure	118
b) Share Performance on the Securities Market	118
c) Market Maker	118
6) PERSONS RESPONSIBLE FOR THE INFORMATION CONTAINED IN THE ANNUAL
REPORT	119
7) ATTACHMENTS	119

Audits of the independent auditors for 2021, 2020 and 2019, reports of the Audit Committee and Corporate Practices Committee.

4

a) Glossary of Terms and Definitions

TERM	DEFINITION
"BMV" or "Securities Exchange"	Shall mean Mexican Securities Exchange Market, S.A.B.
	de C.V.
"CNBV"	Shall mean National Banking and Securities Commission.
"Company", "Group" or "Posadas"	Shall mean Grupo Posadas, S.A.B. de C.V. and its
	subsidiaries.
"Issuer"	Grupo Posadas, S.A.B. de C.V.
"Audited Financial Statements"	The financial statements audited by Galaz, Yamazaki,
	Ruiz Urquiza, S.C. for the corporate years ending
	December 31, 2019, 2018 and 2017 included in the
	present Annual Report.
"Fibras"	Mexican trusts principally established to develop, acquire,
	lease, own and operate hotels.
"Report"	The present Annual Report.
"RNV"	National Securities Registry under the National Banking
	and Securities Commission.
"$" or "Pesos" or "M.N."	Currency of legal tender in the United Mexican States.
"US" or "Dollars"	Currency of legal tender in the United States of America.
"M"	Millions.
"NIIF" or "IFRS", due to its initials in English	International Financial Reporting Standards
"Vacation Properties"	Company Segment responsible for marketing and
	operation of vacation products, i.e. time-share, and
	vacation plans, i.e. pre-payment and discount club.
"NPS"	Net Promoter Score: index that measures the customer´s
	loyalty to the brand.
Posadas System	Group of hotels that are managed under the brands of
	Grupo Posadas, S.A.B. de C.V., whether as owned,
	leased, operator or franchised hotels.
	5