GECINA - REFERENCE DOCUMENT 2017

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CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

Consolidation adjustments

3.5.2.4

The acquisition of Eurosic and its subsidiaries by Gecina was treated as a business combination in the meaning of IFRS 3 and was represented in the following transactions: August 29, 2017: Gecina takes control of the Eurosic ■ group following purchase of blocks of shares and subordinated bonds redeemable in shares (OSRA), representing 85.4% of the diluted capital; October 17, 2017: Closing of the alternative public offer ■ for purchase and exchange of shares and OSRA (99.75% of the diluted capital held at the issue); October 24, 2017: Mandatory squeeze-out (100% of the ■ diluted capital of Eurosic is now held by Gecina). Since August 29, 2017, the Gecina group holds exclusive control of Eurosic in application of IFRS 10 with, in particular: more than two-thirds of the capital and voting rights; ■ the power to direct financial and operating policies; ■ the power to appoint and revoke the majority of the ■ Board of Directors; the power to bring together the majority of voting rights. ■ The taking of control on August 29, 2017, followed by, in October 2017, the acquisition of minority interests and the squeeze-out procedure, is representative of a single transaction to the extent that: these transactions were concluded simultaneously in a ■ short period of time and in consideration of each other; they are intended to have an overall commercial impact, ■ Gecina always intented to purchase 100% of the Eurosic capital; the existence of one transaction is subordinated to that of ■ at least one other transaction and the financial conditions are the same for each transaction; a transaction is not economically justified if it is ■ considered in isolation, it is justified economically if it is considered with other transactions. As of August 29, 2017, the sellers committed to providing 94.8% of the capital. Consequently, the determination of the goodwill is made on the basis of 100% of the capital of Eurosic and the transaction costs of all the transactions were accounted for as expenses according to IFRS 3 (Business combinations) excluding issue expenses for equity instruments. Thus as of August 29, 2017, Gecina was almost certain to reach the 95% threshold, requested for the squeeze-out procedure.

and eliminations

Restatements to homogenize individual 3.5.2.4.1 financial statements The rules and methods applied by companies in the scope of consolidation are restated to make them consistent with those of the Group. All companies closed their accounts (or prepared a position of accounts) on December 31, 2017. Intercompany transactions 3.5.2.4.2 Intercompany transactions and any profits on disposal resulting from transactions between consolidated companies are eliminated. Business combinations (IFRS 3) 3.5.2.4.3 To determine if a transaction is a business combination placed under IFRS 3, the Group determines whether an integrated set of activities is acquired in addition to the real estate. The selected criteria may be the number of real estate assets held, the scope of the processes acquired or the autonomy of the target. In this case, acquisition cost corresponds to the fair value on the date of exchange of the contributed assets and liabilities and the equity instruments issued in exchange for the acquired entity. Goodwill is recognized as an asset in respect of the surplus of the acquisition cost over the buyer’s share of the fair value of the assets and liabilities acquired net of deferred tax recognized if necessary while an amount for negative goodwill is posted to the income statement. Costs directly attributable to the acquisition process are recognized under expenses. Revised IFRS 3 specifies a time of 12 months starting from the acquisition date for final accounting of the acquisition. Corrections and valuations made must be linked to events and circumstances existing at the date of acquisition. Goodwill is subject to an impairment test of these once per year or upon the appearance of an indication of loss of value. For acquisitions that are not part of a business combination, IAS 40 applies (investment properties).

68 GECINA - REFERENCE DOCUMENT 2017

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