GECINA - REFERENCE DOCUMENT 2017

CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

Liquidity risk 3.5.4.4 Liquidity risk is managed by constantly monitoring the maturity of financing facilities, maintaining available credit lines and diversifying finance sources. Liquidity is managed in the medium and long term as part of multi-annual financing plans and, in the short term, by using confirmed undrawn credit lines and asset disposal programs. Details of debt maturity dates are provided in Note 3.5.5.12.1 as well as a description of the various limits that might affect interest conditions or early repayment, as stipulated in the credit agreements. 3.5.4.5 Gecina’s interest rate risk management policy, which includes the use of hedging instruments, is aimed at limiting the impact of a change in interest rates on the Group’s earnings, where a significant portion of the Group’s loans is at a floating rate. With respect to the foregoing, a management framework was presented and validated by the company’s Audit and Risks Committee. This management framework defines in particular the management horizons, a percentage of coverage required on the time horizons, new hedging targets and the instruments enabling such management (mostly caps, floors and swaps). The interest rate risk is analyzed and quantified in Notes 3.5.5.12.2 and 3.5.6.8, together with an analysis of interest rate sensitivity. Gecina interest rate hedging policy is primarily implemented on a comprehensive basis for all its loans ( i.e. not specifically assigned to certain loans). As a result, it does not meet the accounting qualification of hedging instruments and the fair value change therefore appears in the income statement, according to the procedures described in Note 3.5.3.8. Interest rate risk

Foreign exchange risk 3.5.4.6 The Group conducts the majority of its business in the Eurozone and almost all its revenues, operating expenses, investments, assets and liabilities are denominated in euros. In this case, the Group is only very marginally exposed to a currency risk only through its logistics subsidiary in Poland, which now has no activity. 3.5.4.7 Gecina is exposed to a wide range of operating risks, the details of which are specified in chapters 1 and 6. Until 2009 when Joaquín Rivero was a corporate officer of Gecina or one of its subsidiaries, Gecina carried out a number of transactions including the acquisition by SIF Espagne of a 49% equity investment in Bami Newco in 2009, and also undertook certain commitments, notably the grant of certain guarantees in relation to said transactions, as mentioned in Notes 3.5.5.13 and 3.5.9.3. When said commitments and transactions were revealed, impairment and provisions were recorded against some of them pursuant to applicable regulations. Some of the guarantees were also granted outside Gecina’s internal control framework, despite the specific procedures implemented. Gecina cannot totally rule out that non-compliance with internal control and risk management procedures, the worsening economic environment in Spain or fraud attempts will not result in further financial, legal or regulatory risks which have not been identified to date. Occurrence of such risks may impact the Group’s reputation, results or financial situation. Operating risks

03

3.5.5

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Property holdings

3.5.5.1

Statement of changes in property holdings 3.5.5.1.1

GROSS VALUE

Asset disposals or exercise of options

Change in fair value

Transfers between items

At 12/31/2016

Acquisition

Other changes

At 12/31/2017

values Acquisitions

In €’000

Investment properties

10,430,624 4,235,387 179,384 (254,340) 1,109,739 1,323 (294,692) 15,407,425

Properties under reconstruction

1,038,680 963,076 276,549

0 333,489 7,915 186,692 2,806,401

Hotel operating properties

0

192,340

5,582

0 0

0 (525)

0 197,397

Operating properties (headquarters) Financial receivables on financial leases

76,830

0

(1)

0

0

0

76,828

0

399,185

0 (7,729)

0

0

0 391,456

Intangible assets

9,276

1,378 5,887

1,063 5,633

0

0 (255) 0 (118)

0

11,462 28,959

Other tangible assets Properties for sale Buildings in inventory

17,519

(4)

42

547,406 62,120

2,945 (254,347)

112,545

23 108,000 578,692

0 159,660

0 (3,326)

0

0

0 156,334 42 19,654,954

GROSS VALUE

12,120,335 6,019,033 471,155 (519,746)1,555,773 8 363

79

GECINA - REFERENCE DOCUMENT 2017