S Immo AG — Annual Report 2017

Apr 5, 2018

Annual Financial Report 2017

Contents

Declaration of the Management Board pursuant to section 124 (1) Austrian Stock Exchange Act (BörseG)

Management report

• Group fundamentals
• Economic overview
• Non-financial performance indicators and corporate social responsibility
• Information in accordance with section 243a para 1 Austrian Commercial Code (UGB)
• Risk management report
• Outlook
• Consolidated Financial Statements
• Auditor's report
• Report of the Supervisory Board
• Corporate governance report
• Non-financial report
• Einzelabschluss der S IMMO AG

Declaration of the Management Board

pursuant to section 124 (1) Austrian Stock Exchange Act (BörseG)

"Statement of all legal representatives

We confirm to the best of our knowledge that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group as required by the applicable accounting standards and that the Group management report gives a true and fair view of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties the Group faces. We confirm to the best of our knowledge that the separate financial statements give a true and fair view of the assets, liabilities,

financial position and profit or loss of the parent company as required by the applicable accounting standards and that the management report gives a true and fair view of the development and performance of the business and the position of the company, together with a description of the principal risks and uncertainties the company faces."

Vienna, 20 March 2018

The Management Board

Ernst Vejdovszky Friedrich Wachernig, MBA

Management report

Group fundamentals

Business activities and corporate structure

S IMMO Group is an international real estate group that engages in buying, selling, real estate project development, letting, asset management, and operating hotels and shopping centres as well as in revitalising and renovating properties in Austria, Germany and CEE (Slovakia, Czech Republic, Hungary, Romania and Croatia). The property portfolio consists of office buildings, retail properties, hotels and residential properties. S IMMO AG does not conduct research and development.

In addition to its registered office in Vienna, S IMMO Group has its own employees in Germany, Hungary, Romania and Bulgaria. The German-based property management company Maior Domus is part of the Group. The subsidiaries have their own staff and are responsible for local asset management and letting activities, among other things.

In addition, the Group holds numerous project, property and holding companies (please refer to section 2.2.4. of the notes). S IMMO AG has been listed on the Vienna Stock Exchange since 1987 and was included in the ATX, the Austrian benchmark index, in September 2017.

S IMMO had an annual average number of employees of 102 (annual average in 2016: 101), as calculated on the basis of fulltime equivalents. Including hotel staff, the Group employed 577 (annual average in 2016: 575) people.

Property portfolio

As of 31 December 2017, S IMMO Group's property portfolio consisted of 241 (31 December 2016: 194) properties with a book value of EUR 1,839.7m (31 December 2016: EUR 2,063.9m) and a total area of around 1.2 million m² (31 December 2016: 1.3 million m²). Most of the properties are located in capital cities within the European Union.

Book value by use type1 Commercial 73.0% Residential 27.0% Hotel 12.3% Retail 21.4% Office 39.3% 1 Including book value of land bank

Based on book value, properties in Austria accounted for 23.9% (31 December 2016: 30.7%) and for 42.0% (31 December 2016: 32.0%) in Germany. The properties in CEE accounted for 34.1% (31 December 2016: 37.3%).

Based on the main use type, the portfolio broke down into 39.3% offices (31 December 2016: 45.4%), 21.4% retail properties (31 December 2016: 24.8%), 27.0% residential properties (31 December 2016: 19.3%) and 12.3% hotels (31 December 2016: 10.5%) as at 31 December 2017. The occupancy rate of the entire portfolio was 94.8% (31 December 2016: 93.9%). The calculation of the occupancy rate includes all investment properties for which no development potential has currently been identified. The overall rental yield was 6.1% (31 December 2016: 6.2%).

Overview of rental yields ¹

in %	31 December 2017	31 December 2016
Germany	4.9	5.1
Austria	5.1	5.0
CEE	8.2	8.2
Total	6.1	6.2

¹ The rental yield is the ratio of annual rental income generated to the property value. The calculation includes all investment properties for which no development potential has currently been identified. With regard to additions in the course of the year, the rent is annualised.

Strategy and objectives

S IMMO AG has been pursuing a sustainable and prudent business policy for almost three decades with the aim of constantly improving its results and creating value for its shareholders. The company applies a robust business model and makes use of property cycles.

S IMMO acquires buildings with potential and is currently focusing on office properties in Berlin as well as on residential properties in economically up-and-coming German cities in the company's sphere of action such as Leipzig or Kiel. S IMMO makes these purchases in attractive market niches with little competition. The purchased buildings are refurbished and repositioned with innovative concepts. In-depth knowledge of the local markets is a key factor here. These measures facilitate increased occupancy rates, rents and customer satisfaction.

Project development and renovation are currently taking place in all regional segments. Great emphasis is placed on modern technologies and high property standards in these activities. All current development projects will be certified according to internationally recognised standards such as BREEAM.

The sale of properties is part of our cyclically oriented strategy. In the 2017 financial year, the sale of – amongst others – both office properties in Vienna's Viertel Zwei as well as the Serdika Center shopping centre with its related office building in Sofia was very successful.

In addition, the company invests in shares of listed Austrian real estate companies (CA Immobilien Anlagen AG and Immofinanz AG) and currently holds over 10% of Immofinanz AG and 5% of CA Immobilien Anlagen AG.

On the capital market, S IMMO has positioned its share as a reliable dividend-paying share and extended its international shareholder base. In September 2017, the S IMMO share was included in the ATX index. In February 2018, S IMMO successfully issued a six-year and a twelve-year bond. The company also cancelled the S IMMO INVEST profit participation certificates effective from 31 December 2017 in the reporting year, thus simplifying the financial structure of the Group.

Management and control

During the reporting period, the Management Board consisted of two members who work closely together and are in constant contact with each other. The basis for this is the statutory provisions, the articles of incorporation and the rules of procedure. The Management Board pursues a responsible and stable management approach aimed at enhancing earnings and increasing the Group's value on a long-term basis. In addition, the Management Board works closely with the Supervisory Board, which consisted of seven members at the end of the year (for further details, please refer to section 5.6. of the notes).

Economic overview

According to the International Monetary Fund (IMF), the global economy expanded by 3.7% in 2017, thus achieving higher growth than anticipated. The forecasts for 2018 and 2019 were each revised upward to 3.9%, as well.

In the euro area and the European Union (EU), the gross domestic product (GDP) increased by 2.4% last year according to the European Commission. The positive output is expected to continue in both the euro area and the EU in 2018 and 2019, with growth rates of 2.3% and 2.0%, respectively. Growth is being driven by the stronger economic conditions in Europe as well as an upswing in the global economy and international trade.

The economy of the CEE region saw particularly robust growth of 4.6% in 2017, benefiting from the high export demand in the euro area and loose fiscal policy. Higher minimum wages and lower social insurance contributions supported private consumption, which also had a positive impact on the economy.

According to the Institute for Advanced Studies (IHS), Austria's GDP grew by 3.1%, the highest rate since 2007. Economic activity was driven primarily by investments and exports, which benefited from the solid global economic conditions. Private consumption was supported by a marked rise in employment. Due to the rapidly expanding global economy and the robust domestic economic conditions, Austria's economic output is expected to continue growing in the coming years, albeit at a slightly slower pace.

Real estate market overview

Austria

Office space on the Vienna market expanded by 154,000 m² in 2017, an increase of 137% over the previous year. By contrast, the total take-up declined to 192,000 m². However, this trend is expected to change in 2018 due to the strong demand and positive economic conditions. Rents for modern office space in prime locations rose by 3% on average.

Vienna's hotel industry set a new record with 15.5 million overnight stays, which represents growth of 3.7%. Room revenues delivered an impressive gain of EUR 709.5m, an increase of 7%.

Germany

Amidst the low interest rate policy and solid economic development, the German market for owner-occupied flats enjoyed another outstanding year. The transaction volume increased by 11% compared with the previous year, totalling EUR 15.2bn. Prices are being driven higher and higher by the persistently rising demand and heightened competition.

The German office market continues to dominate market developments. The low unemployment rate and corporate expansions are leading to persistently high demand. The office employment rate is currently expected to increase by 1.5% per year until 2022. Berlin set a new record for revenues, surpassing the record set in the previous year by 4%. Moreover, peak rents rose by 9.1% to EUR 30.

Real estate market overview1

	Prime rents (EUR/m²/month)			Prime gross yields (%)			Total leasing activity (m²)		Vacancy rate (%)
	Q4 2017	Q4 2016	Q4 2017	Q4 2016	Q4 2017	Q4 2016	Q4 2017	Q4 2016	2017	2016	Q4 2017	Q4 2016
	Office	Office	Retail	Retail	Office	Office	Retail	Retail	Office	Office	Office	Office
Berlin	30.00	27.50	320.00	335.00	3.10	3.40	3.25	3.40	925,500	888,300	3.2	4.9
Bratislava	16.50	16.00	65.002	60.002	6.25	6.90	5.752	6.002	116,798	148,764	6.2	6.6
Bucharest	18.50	18.50	50.00	50.00	7.50	7.50	7.75	8.00	252,188	284,141	9	11.7
Budapest	22.00	22.00	135.00	120.00	6.00	6.75	5.75	6.00	337,596	284,194	7.5	9.5
Vienna	26.00	26.00	310.00	310.00	3.90	4.00	3.30	3.40	192,000	327,115	4.9	5.3
Zagreb	14.75	14.00	60.00	60.00	8.00	8.00	6.75	6.75	36,993	26,450	5.7	14.4

¹Source: Local CBRE Market Views Q4 2017

Data for shopping centres; data for remainder of the locations is for high street retail.

Berlin's office market expanded by 182,200 m² in 2017, while the vacancy rate dropped to 3.1%. An additional 404,000 m² of office space are currently expected to be completed over the course of 2018.

CEE

Budapest's office market registered a leasing activity of 144,365 m² in the fourth quarter of 2017, a decline of 13% compared with the previous year. In addition, four new office buildings with a total area of 67,920 m² came onto the market during this period. Nevertheless, the vacancy rate fell to a record low of 7.5%.

The Budapest hotel sector is considered to be one of the strongest in the region. The number of guest arrivals in Budapest grew by 10% year-on-year in the first half of 2017. Furthermore, average overnight stays saw an increase to 76% and revenue per available room improved by 20%.

Prague's hotel market also continues to develop well, especially in the luxury segment. Overnight stays are expected to increase by 1.7% year-on-year and revenue per available room by 5.5% yearon-year in 2018.

The Bratislava office market turned in an outstanding performance in 2017, with total leasing activity reaching 111,300 m². This led to a historically low vacancy rate of 6.2%. At the end of 2017, a total of 11 projects were under development, seven of which are scheduled to be completed in 2018. This will add a further 187,000 m² of lettable space to the market.

The total office stock in Zagreb amounts to approximately 1 million m² of space. Leasing activity was primarily driven by relocations, but the vacancy rate still dropped to 5.7%. At the same time, prime rents rose to EUR 14.75 per m².

In Bucharest, seven office properties with 120,000 m² of space came onto the market in 2017, 90% of which was leased. This represents a total take-up of 100,700 m². Furthermore, a total of 900,000 m² are scheduled to be completed in the period from 2018 to 2020. The vacancy rate reached a new record of 9%.

The retail market in Romania continued to boom, driven by industrial production and strong domestic consumption, which can be attributed to a 13.4% increase in net income. Revenue rose by 10% between January and November 2017. The retail sector is currently an attractive investment segment and has enjoyed outstanding development over the past two years. This trend may diminish to a certain extent, but stable performance is still expected.

Sources: Budapest Research Forum, CBRE, Cushman & Wakefield, IMX December 2017 – Der Immobilienindex von ImmobilienScout24, JLL, Vienna Research Forum, www.b2b.wien.info, www.europa.eu/info, www.focus-economic.com, wwww.ihs.ac.at, www.imf.org, www.pwc.com/hospitality, www.trend.at

Business development and performance

In the 2017 financial year, S IMMO achieved the second-best annual result in the company's history after its record result in the previous year. Its consolidated net profit totalled EUR 133.5m (2016: EUR 204.3m), which brought the book value per share to EUR 14.21 as of 31 December 2017 (31 December 2016: EUR 12.02).

A significant component of income was the revaluation result, which was very positive once again at EUR 127.6m (2016: EUR 194.0m). The strong revaluation result was mainly driven by the ongoing dynamic positive development of the German property market, but the positive and partially recognised valuations in Austria and CEE also had a favourable influence.

Despite the sales in 2016 and 2017, EBITDA remained at approximately the same level as in the previous year and totalled EUR 9.6m (2016: EUR 92.5m). EBIT totalled EUR 208.1m (2016: EUR 278.7m) and EBT came to EUR 160.7m (2016: EUR 216.5m). Although both figures remained below the record level of 2016, they once again came in at high levels – also driven by improvements in the financial result.

Total tax expenses increased to EUR -27.3m (2016: EUR -12.1m) in comparison to the previous year, which was affected by positive one-off effects from the disposal of part of the German property portfolio. Earnings per share amounted to EUR 1.97 (2016: EUR 2.98).

Earnings situation

Total revenues for the 2017 financial year came to EUR 191.4m (2016: EUR 198.8m). The rental income included in this figure amounted to EUR 112.0m (2016: EUR 118.2m) and reflected the sales compared with the previous year. The drop in rent due to the sales in the 2016 and 2017 financial years was partially offset by a positive like-for-like performance and ongoing acquisitions in Germany.

Broken down by region, rental income for the reporting period was as follows: Austria and Germany contributed 22.1% and 32.7% respectively (2016: 23.7% and 31.4% respectively) – in total 54.8% (2016: 55.1%) and CEE 45.2% (2016: 44.9%). In terms of main use type, commercial properties (office, retail and hotel) contributed 80.2% (2016: 79.5%) and residential properties 19.8% (2016: 20.5%) of the rental income.

Revenues from hotel operations (revenues from the Vienna Marriott and Budapest Marriott Hotels, both operated under management agreements) rose to EUR 46.0m (2016: EUR 42.9m). After around half of the available rooms in the Vienna Marriott Hotel were renovated in the first half of 2016, the first half of 2017 was affected by the renovation of the remaining space. In the second half of 2017, all rooms were once again available to let in a fully renovated state.

The improvement in property management expenses from EUR 64.2m to EUR 59.9m is partly due to lower revenue and the smaller property portfolio. Gross profit came to EUR 98.2m (2016: EUR 106.0m).

Successful property transactions

In the 2017 financial year, S IMMO sold the office buildings 'Hoch Zwei' and 'Plus Zwei' in Vienna and the Serdika Center shopping centre along with its associated office property in Sofia and two properties in Berlin as well as a property in Austria. The profit on disposals of EUR 10.3m (2016: EUR 5.1m) stems largely from the sale of the Serdika property. After this property was sold, S IMMO no longer owns any leased properties in Bulgaria.

At the same time, S IMMO was also active in terms of acquisitions in 2017. German properties representing a transaction volume of around EUR 64m were added to the S IMMO portfolio in the reporting period.

Management expenses remained at the same level in year-on-year comparison at EUR 19.0m (2016: EUR 18.6m). EBITDA for the 2017 financial year decreased to EUR 89.6m (2016: EUR 92.5m), mainly due to sales in 2016 and 2017.

Rental income by property use type1

Significantly positive revaluation result

The revaluation result developed very positively once again and at EUR 127.6m (2016: EUR 194.0m), it achieved the second-highest level in the company's history. Asset management measures aimed at increasing the value of properties and in particular the ongoing generally positive development on the German property market played a considerable part here. The Germany segment accounted for EUR 70.0m (2016: EUR 136.7m) of the revaluation results, the Austria segment for EUR 37.1m (2016: EUR 38.1m) and CEE for EUR 20.5m (2016: EUR 19.2m).

In comparison to the record year of 2016, EBIT of EUR 208.1m (2016: EUR 278.7m) mainly reflects the difference in the revaluation result.

Financial result

The financial result including participating certificates improved to EUR -47.4m (2016: EUR -62.2m). In particular, ongoing interest payments fell due to favourable refinancing options and the restructuring of the derivatives portfolio. Financial income from dividend payments of listed equity instruments of EUR 4.3m (2016: EUR 0.8m) and non-cash derivative valuation effects also had a positive influence on the financial result. Cost of funding (based on the variable and fixed-rate financial liabilities as of 31 December 2017, including bonds and derivatives) came to 2.67% (31 December 2016: 3.09%).

Development of EBT, net profit for the period and earnings per share

EBT decreased to EUR 160.7m (2016: EUR 216.5m) due to lower results from property valuations year-on-year.

Tax expenses amounted to EUR -27.3m (2016: EUR -12.1m). This increase stems primarily from the sales – in particular, the Serdika property in Sofia and the Viertel Zwei property in Vienna – but also from one-off effects from the previous year, where deferred tax liabilities were reversed without corresponding tax payment in connection with the disposals of part of the German property portfolio. All in all, net income amounted to EUR 133.5m (2016: EUR 204.3m), the second-highest level in the company's history.

Consolidated statement of financial position

As of 31 December 2017, S IMMO Group's total assets amounted to EUR 2,272.3m (31 December 2016: EUR 2,278.9m) and showed little change in comparison to the previous year: The disposals of properties in the financial year were almost entirely offset by investments and positive valuations. Cash and cash equivalents were slightly up on the previous year at EUR 73.4m (31 December 2016: EUR 66.0m). As of 31 December 2017, a German property with a fair value of EUR 6.3m (31 December 2016: EUR 0.0m) was held for sale.

In the 2017 financial year, equity investments were continued and the reporting threshold of 5% each for the listed companies Immofinanz AG and CA Immobilien Anlagen AG was exceeded. In Q1 2018, the reporting threshold of 10% for Immofinanz AG was exceeded.

As of 31 December 2017, equity increased to EUR 944.4m (31 December 2016: EUR 824.3m) despite dividend payments. In this context, there were also disposals from minorities in equity as part of the sale of the Serdika property. The equity ratio therefore improved to 41.6% (31 December 2016: 36.2%) and the book value per share increased to EUR 14.21 (31 December 2016: EUR 12.02).

Financial management

All of S IMMO's loan liabilities are denominated in euros. As of 31 December 2017, 20% (31 December 2016: 13%) of loans were fixed-rate and 80% (31 December 2016: 87%) were variable-rate loans. S IMMO reduces the risk of rising interest rates on variablerate financing with interest rate hedges such as swaps and caps.

Breakdown of financial liabilities

Total	1,144.2	1,300.1
Other current financial liabilities	113.4	184.1
Other non-current financial liabilities	686.6	770.7
Issued bonds	287.5	287.2
Subordinated participating certificate capital	56.7	58.1
in EUR m	2017	2016

Net debt from secured financing is calculated from total financial liabilities of EUR 1,144.2m (2016: EUR 1,300.1m) less subordinated participating capital of EUR 56.7m (2016: EUR 58.1m), bond liabilities of EUR 287.5m (2016: EUR 287.2m), derivative liabilities of EUR 17.1m (2016: EUR 30.3m) and utilised credit lines of EUR 0m (2016: EUR 35.0m). As a result, net debt from secured financing totalled EUR 782.9m (2016: EUR 889.4m).

The ratio between this figure and property investments of EUR 2,138.2m (2016: EUR 2,151.3m) represents the loan-to-value ratio for secured financing. In the reporting period, this figure fell to 36.6% (31 December 2016: 41.3%).

Net debt from unsecured financing results from the following items: subordinated participating capital, bond liabilities and utilised credit lines. The available cash and cash equivalents of EUR 73.4m (2016: EUR 66.0m) are deducted from this. As a result, unsecured financing totalled a net amount of EUR 270.8m (2016: EUR 314.3m).

The loan-to-value ratio for unsecured financing in relation to total property investments therefore amounted to 12.7% in the reporting period (31 December 2015: 14.6%).

Thus, the total loan-to-value ratio (secured and unsecured) was reduced to below 50% and came to 49.3% (31 December 2016: 55.9%).

Total bond liabilities of EUR 287.5m are divided into four bonds maturing in 2019 (nominal value of EUR 100.0m), 2021 (nominal value of EUR 89.7m), 2025 (nominal value of EUR 34.0m) and 2027 (nominal value of EUR 65.0m). This division is based on the company's risk-optimising efforts to keep maturities from unsecured financing within a manageable range at all times.

In the first quarter of 2018, two further bonds were issued with a volume of EUR 100m for the bond with a tenor of six years and a volume of EUR 50m for the bond with a tenor of twelve years. Both bonds have fixed interest rates: 1.75% p.a. for the six-year bond and 2.875% p.a. for the twelve-year bond.

In the 2017 financial year, S IMMO exercised its right and cancelled all participating certificates as of 31 December 2017, with an impact on cash in the first half of 2018. Further details about the participating certificate liability are provided in the notes (section 3.1.13.).

As of 31 December 2017, S IMMO's liabilities to banks were spread among 23 (2016: 22) individual banks. The average maturity of liabilities to banks was 6.4 years (2016: 5.7 years).

Related party disclosures

More information on related parties can be found in the notes to the consolidated annual financial statements in section 5.6.

Non-financial performance indicators and corporate responsibility

Details on the non-financial performance indicators and on corporate responsibility can be found in the non-financial report starting on page 86.

Information in accordance with section 243a para 1 Austrian Commercial Code (UGB)

The following information must be disclosed pursuant to section 243a para 1 Austrian Commercial Code (UGB):

1. As of 31 December 2017, the issued share capital of S IMMO AG was EUR 243,143,569.90, divided into 66,917,179 no par value bearer shares. All shares have the same rights.

2. S IMMO AG's articles of incorporation restrict the voting rights of each shareholder at the Annual General Meeting to a maximum of 15% of the issued share capital. For this purpose, shares held by companies that together constitute a group for the purposes of section 15 Austrian Stock Corporation Act (AktG) are to be aggregated, as are shares held by third parties for the account of the relevant shareholder or the account of a company forming part of a group with that shareholder. Holdings of shares by shareholders exercising their voting rights in concert in virtue of an agreement or as part of coordinated behaviour are also to be aggregated. The Management Board of S IMMO AG is not aware of any agreements applying to limitations of voting rights or the transfer of shares (with the exception of the joint voting policy between Erste Asset Management GmbH and ERSTE-SPARINVEST Kapitalanlagegesellschaft m.b.H.; see item 3)

3. The company has been notified under section 91 et seq. Austrian Stock Exchange Act (BörseG) as amended of the following holdings in excess of 10% (corresponding to section 130 et seq. of the BörseG 2018):

On 20 April 2009, the company was notified that Sparkassen Versicherung Aktiengesellschaft (FN 82351 f; now Sparkassen Versicherung AG Vienna Insurance Group), a company forming part of Vienna Insurance Group, for the purposes of section 91 para 1 Austrian Stock Exchange Act (BörseG), had increased its interest in Sparkassen Immobilien Aktiengesellschaft (now S IMMO AG) to 7,000,000 shares, which was about 10.27% of the issued share capital at the time, and following the cancellation of treasury shares on 19 December 2013 constituted about 10.46% of the reduced share capital.

On 04 May 2017, S IMMO AG received notification under section 91 et seq. of the BörseG from Ronny Pecik that the two affiliated companies Pavus Immobilien GmbH & Co KG (FN 466427y) and Everest Investment GmbH & Co KG (FN 469572y) have shares in S IMMO AG. Pavus Immobilien GmbH & Co KG (FN 466427y) acquired an 8.00% share and Everest Investment GmbH & Co KG (FN 469572y) a 3.35% share.

On 28 December 2017, S IMMO AG received notification under section 91 et seq. of the BörseG from Ronny Pecik that RPR Privatstiftung (FN 191884h) had acquired 6,832,561 more shares in S IMMO AG from Erste Group Bank AG (FN 33209m) via its indirect subsidiary Theos GmbH (FN 421950s) (held by the direct subsidiary Luxury Living GmbH – in future: Theola Invest GmbH; FN 456014i) as the purchaser by way of a share purchase agreement dated 28 December 2017 (corresponding to the value date) and that the RPR Group therefore holds a total of 14,629,756 shares, i.e. around 21.86% in S IMMO AG, via its indirect subsidiaries Theos GmbH, Everest Investment GmbH & Co KG and Pavus Immobilien GmbH & Co KG.

On 28 December 2017, S IMMO AG received notification under section 91 et seq. of the BörseG from Familie Benko Privatstiftung (FN 209416s) that Familie Benko Privatstiftung had purchased an option to acquire all shares in Luxury Living GmbH (in future: Theola Invest GmbH) via SIGNA Holding GmbH (FN 191343m), which it controls.

According to the notifications in accordance with section 91 et seq. of the BörseG dated 28 December 2017 from Familie Benko Privatstiftung and Ronny Pecik, RPR Privatstiftung, Theola Invest GmbH, Theos GmbH, Everest Investment GmbH & Co KG and Pavus Immobilien GmbH & Co KG respectively concluded agreements with SIGNA Holding GmbH on 28 December 2017. These agreements stipulate that (i) SIGNA Holding GmbH shall finance the acquisition of 6,832,561 more shares in S IMMO AG with participation rights from capital investment of Theola Invest GmbH. (ii) From 15 January 2018 to 15 December 2019, SIGNA Holding GmbH has the right to acquire 2,443,770 shares in S IMMO AG held by Everest Investment GmbH & Co KG and 5,353,425 shares in S IMMO AG held by Pavus Immobilien GmbH & Co KG, and the right to acquire the entire stake in Theola Invest GmbH, which indirectly holds 6,832,561 shares in S IMMO AG via Theos GmbH. (iii) From 30 September 2018 to 30 June 2019, SIGNA Holding GmbH is obligated, upon the joint request of Everest Investment GmbH & Co KG and Pavus Immobilien GmbH & Co KG, to acquire 2,443,770 shares held by the former and 5,353,425 shares held by the latter in S IMMO AG. (iv) From 15 January 2020 to 30 June 2020, upon the request of Theos GmbH, SIGNA Holding GmbH is obligated to acquire 6,832,561 shares in S IMMO AG and upon request of RPR Privatstiftung to acquire the shares held by it in Theola Invest GmbH, which holds 6,832,561 shares in S IMMO AG indirectly via Theos GmbH. Reference was made to the fact that in accordance with section 13 (3) of the articles of association of the issuer, the voting rights of each shareholder at the Annual General Meeting of the issuer is limited to 15% of the issued shares.

Notification under section 91 para 1 Austrian Stock Exchange Act (BörseG) was received from Erste Asset Management GmbH on 30 November 2011 that it and its subsidiaries RINGTURM Kapitalanlagegesellschaftm.b.H.andERSTE-SPARINVESTKapitalanlagesellschaft m.b.H. pursue a joint voting policy, and that the voting decisions of the managed funds are therefore submitted in aggregate. The three companies therefore reported that as of 29 November 2011, they held 8,130,557 shares in aggregate, which was about 11.94% of the issued share capital at the time, and following the cancellation of treasury shares on 19 December 2013 constituted about 12.15% of the reduced share capital. RINGTURM Kapitalanlagegesellschaft m.b.H. was merged into Erste Asset Management GmbH with effect from 31 December 2015.

For clarification purposes, S IMMO AG states that it has learned of the existence of the above-mentioned equity interests greater than 10% based on notifications under section 91 et seq. of the BörseG in the respective amended version (corresponding to section 130 et seq. of the BörseG 2018), and that it therefore cannot guarantee the completeness or correctness of the above information. Moreover, notifications in accordance with the Austrian Stock Exchange Act (BörseG) are only required upon reaching, exceeding or falling below the relevant thresholds, so that the actual current extent of the interests may differ from those listed in the notifications.

1. There are no shares with special control rights.

2. Employees who are shareholders exercise their voting rights at the Annual General Meeting directly, if appropriate.

3. The Management Board consists of two, three or four members.

The members of the Management Board are appointed by the Supervisory Board by a three-quarters majority of the votes cast. The Supervisory Board may at the same time appoint a member of the Management Board as Chairman and another member as Deputy Chairman.

This resolution also requires a three-quarters majority of the votes cast. Appointment to the Management Board is open only to those under the age of 65 at the time of appointment.

The Supervisory Board consists of a maximum of 10 members elected by the Annual General Meeting. Resolutions proposing increases in share capital are passed by a simple majority of the votes cast at the Annual General Meeting and by a simple majority of the shareholders voting on a resolution.

1. At the 27th Annual General Meeting of 03 June 2016, the Management Board was authorised under the provisions of section 65 para 1 item 8 Austrian Stock Corporation Act (AktG) for a period of 30 months from the date of the passing of the resolution, that is, until 03 December 2018, with the approval of the Supervisory Board, to acquire shares in the company up to the statutory maximum of 10% of the company's share capital on one or more occasions, and if appropriate to cancel them. The company currently holds 525,421 treasury shares, which corresponds to 0.7852% of the current share capital. The Management Board was also authorised for a period of five years from the date of the passing of the resolution, that is, until 03 June 2021, with the approval of the Supervisory Board, to dispose of treasury shares in a manner other than through the stock exchange or through a public offer and under exclusion of shareholders' subscription rights.

2. The 4.5% S IMMO bond 2014–2021 issued in June 2014 (volume of around EUR 90m), the 3% S IMMO bond 2014–2019 issued in October 2014 (volume of EUR 100m), the 3.25% S IMMO bond 2015–2025 issued in April 2015 (volume of around EUR 34m), the 3.25% S IMMO bond 2015–2027 issued in April 2015 (volume of EUR 65m), the 1.75% S IMMO bond 2018–2024 issued in February 2018 (volume of EUR 100m) and the 2.875% S IMMO bond 2018–2030 (volume of EUR 50m) contain change-of-control clauses. Under the terms and conditions of the bonds issued in 2014 and 2015, in the event of a change of control, the bond creditors are entitled to cancel the partial debenture and can demand immediate repayment. Under the terms and conditions of the bonds issued in February 2018, in the event of a change of control, the bond creditors are entitled to cancel the partial debenture provided this change of control leads to a significant limitation on the ability of the issuer to fulfil the obligations under the partial debentures.

Under the terms and conditions of the bonds, a change of control occurs if, at any time, one person or several persons acting jointly or a third party or third parties acting for said person or persons directly or indirectly acquire (i) more than 50% of the voting rights associated with the shares of the issuer (irrespective of the maximum voting right) or (ii) the right to designate the majority of members of the Management Board of the issuer and/or the shareholder representatives on the Supervisory Board of the issuer.

1. There are no special compensation agreements between the company and members of the Management and Supervisory Boards or the company's employees that would take effect in the event of a public takeover offer.

Risk management report

As an international real estate group, S IMMO Group faces a host of risks and opportunities that impact operating activities and strategic management. By identifying, analysing, managing and monitoring risks and opportunities, the Group strives to detect negative developments and potential risk factors in good time and take them into account in its decision making processes. S IMMO engages in long-term property investments by developing, buying, letting, operating, renovating and selling properties in Austria, Germany and CEE. The portfolio contains commercially used properties (office, retail and hotel) and a complementary set of residential properties. Other activities of the Group therefore include:

• real estate project development
• the operation of hotels and shopping centres
• the refurbishment of portfolio properties
• asset management

Moreover, S IMMO AG invests in shares of listed Austrian property companies (CA Immobilien Anlagen AG and Immofinanz AG) and currently holds over 10% of Immofinanz AG and over 5% of CA Immobilien Anlagen AG.

In addition to internal regulations and guidelines, risk management at S IMMO comprises ongoing reports in the context of regular meetings with the Management Board. Furthermore, there are control measures implemented by the Group for the purpose of the early detection, management and monitoring of risks. The Management Board takes the key risk-relevant decisions. Investment projects above a specific volume also require approval from the Supervisory Board. Both management bodies are regularly informed with regard to risks and the Internal Control System. The risk groups set out in this section have been analysed and assessed retrospectively for the financial year 2017 and also with regard to business activities in 2018.

Internal Control System

An Internal Control System (ICS) is in place for all key business processes. Aspects such as the reliability of financial reporting are monitored and controlled by this system. In conjunction with the Internal Audit department and compliance with (stock exchange) regulations, the ICS constitutes S IMMO Group's internal monitoring system. Core processes – in particular those relating to the Group's financial reporting – are set out in the internal processes database. This includes a risk management matrix in which the processes, potential individual risks and the assigned control steps are defined.

Key features of the accounting-specific ICS are:

• Clear division of tasks between finance and accounting as well as other areas of responsibility (e.g. treasury)
• Guidelines on the application of uniform accounting and valuation methods in the consolidated financial statements
• Assessment of risks that could lead to a material misstatement of transactions (e.g. incorrect allocation to balance sheet or profit and loss items)
• Appropriate control mechanisms in the automated preparation of the consolidated financial statements
• Reports to internal recipients (Management Board and Supervisory Board) include quarterly, segment and liquidity reports as well as additional individual analyses as required.
• Within the preparation process for the consolidated financial statements, the respective Accounting departments of the individual companies are required to prepare reporting packages by each reporting date on the basis of the group-wide accounting

manual and to send these to headquarters for further processing. The various subsidiaries use external service providers to prepare the reporting packages on behalf and under the responsibility of the respective management. In the context of the process-specific control activities, Group Accounting performs regular reviews of the completeness and accuracy of the reported data. Various deviation analyses are also performed in ongoing coordination with the Management Board. These include a review of the data of all Group companies at headquarters together with the specialist departments (e.g. Asset Management and Tax), with the involvement of the Accounting departments of the individual companies. When preparing the consolidated financial statements, Group Accounting uses a validated consolidation software package. The effectiveness of risk management is assessed each year on the basis of the critical self-assessment of the Group and on a voluntary basis of the Group's auditor in line with the requirements of C Rule no. 83 of the Austrian Code of Corporate Governance (ÖCGK). The Management Board, Supervisory Board and Audit Committee are made aware of the results of this audit.

Internal Audit

S IMMO's Internal Audit department coordinates audits of significant business processes of the Group parent company and its Austrian and foreign subsidiaries with regard to their effectiveness, existing risks and control weaknesses as well as potential improvements in efficiency. The audits take place in cycles of several years and are based on the annual audit plan approved by the Management Board. In addition, special audits are commissioned as required. Only external experts are commissioned to perform the audits. The results of the audits are reported to the Management Board. The Audit Committee of the Supervisory Board is regularly informed regarding the audit plan and the results of the audits.

Corporate strategy risks	Property-specific risks	Financial risks	Other risks
Business environment and industry risk Investment risk Capital market risk	Property portfolio risk Letting and rental default risk Property development risk Construction risk Property valuation risk	Liquidity risk Interest rate risk Financing risk Exchange rate risk Tax risks	Environmental risk Risks related to the matters of the NaDiVeG Legal risk and regulatory risks

Explanations on individual risks

Corporate strategy risks

Strategic risks are closely related to S IMMO's business strategy and could strongly influence it.

Business environment and industry risk

The development of an industry is heavily dependent on external factors such as the economy or the prevailing technological, political and legal situation. As the economic environment is constantly changing, the resulting risks are hard to forecast. A deterioration of the economic situation in a market can affect purchase and sale prices as well as the value of and return on a property. In addition, rent reductions, rental defaults or a termination of rental agreements by tenants may occur. To counter these risks, S IMMO owns properties in different regions with various use types. Careful asset management and constant monitoring also contribute to reducing the described risks. At present, the situation on the markets where S IMMO operates is as following: The good economic situation and the completion of numerous projects could lead to a rise in the leasing activity on the Vienna office market. It is expected that rents in particular of modern and centrally-located office spaces will increase. The ongoing demand and shortage of space on the Berlin office market could increase rental prices again and ensure a continuously decreasing vacancy rate. Conversely, a stagnation of prices is expected for the German residential property market. The economic growth in several CEE markets is increasing the demand for office properties.

Investment risk

S IMMO faces risks in investments in property development projects as well as property purchases. These are often caused by factors beyond S IMMO Group's control, for example delays in the completion of property projects or the subsequent deterioration of the local economic situation. Therefore, the Group's strategy is oriented towards reducing potential investment risks through careful selection, planning and execution of property projects and purchases. There are set investment volume limits above which the approval of the Supervisory Board is required. Nevertheless, a residual amount of investment risk always remains with any investment, particularly in properties, and it can negatively influence cash flows and valuations.

S IMMO holds a significant amount of shares of Immofinanz AG and CA Immobilien Anlagen AG. As property investment companies and property developers, both of these companies are exposed to similar risks to those of S IMMO, particularly all risks associated with the purchase, development, operation and sale of properties as well as general business risk. For information on the particular risks of these companies, please refer to the corresponding financial reports of the two companies. The shares of Immofinanz and CA Immo are listed in the Austrian ATX benchmark index and are subject to market price risks that could have a negative impact on S IMMO's equity.

Capital market risk

The capital market is very important to S IMMO in terms of raising equity and debt. Unstable capital markets can impair the Group's financing options. The management works on strengthening investors' confidence in the securities issued by S IMMO AG through transparent, reliable information and prompt communication.

Property-specific risks

S IMMO is exposed to all risks associated with the purchase, development, operation and sale of properties.

Property portfolio risk

S IMMO counters property portfolio risk with a balanced portfolio mix. The portfolio contains offices, retail and residential properties as well as hotels. In geographical terms, the properties are divided between Austria, Germany and CEE. The Group focuses on capital cities and metropolises within the European Union. The value of a property depends largely on its location and intended use. Therefore, the attractiveness of the location or the potential use can significantly affect S IMMO's financial situation. The property portfolio risk was not identical in all regions and use types in the financial year 2017: Through diversification within the portfolio, the risks of one market can often be cushioned by positive developments in another market.

Letting and rental default risk

Letting risk is closely linked to the general economic situation in the individual markets, and therefore involves associated uncertainty in terms of forecasting. In the current year, there is again a letting risk – also regarding contract extensions – due to the various political and economic developments in the individual markets. The competitive situation can also have an impact on the letting rate and contract extensions. Competition between owners for prestigious tenants is intense. Rents are under pressure in some markets in which S IMMO operates. This might imply accepting rents that are lower than originally forecasted. In addition, S IMMO is exposed to rental default risk. If the Group is unable to extend expiring rental agreements on favourable terms or find suitable creditworthy tenants who are willing to enter into a long-term lease, this impairs the market value of the properties concerned. There may also be long-term vacancies. Particularly in times of economic and political uncertainty, S IMMO may be forced to accept rent reductions in order to maintain its letting rate. The credit rating of a tenant can decrease in the short or medium term, particularly during an economic downturn. In addition, there is the potential risk of a tenant becoming insolvent or otherwise being unable to fulfil its payment obligations under the rental agreement.

Property development risk

In the area of property development, risks may arise in connection with construction cost overruns, construction delays, (construction) quality defects, letting or delays in receiving official approvals. S IMMO counters these risks with regular cost, quality and deadline checks as well as deviation analyses.

Construction risk

Construction risk is the risk of damage to newly constructed properties and portfolio properties, which S IMMO reduces through industry-standard construction contracts with experienced construction firms, warranty periods and guarantees. To limit risks in this area as much as possible, detailed inspections are arranged before the end of the warranty periods so that any damage can still be rectified at the construction firm's expense. To safeguard against conventional damage to portfolio buildings, such as fire or water, S IMMO takes out insurance policies at usual market conditions.

Property valuation risk

Property valuation depends on various macro-economic conditions – which are beyond the Group's control – and on propertyspecific factors. In this respect, property valuation risk describes the risk of negative fluctuations in the value of the property portfolio. Beyond the expected rental income, condition and the historical letting level, property experts can also take into account other factors such as taxes on land and property, operating costs, third-party claims on the basis of environmental risks or risks associated with specific construction materials. Any change in the value of a property can have a negative impact on the Group's net profit or loss and, as a further consequence, its equity and therefore also its share price and creditworthiness. The Group recognises investment properties at fair values, and generally has them valued once a year by external experts.

Financial risks

For the S IMMO Group, the management of financial risks mainly involves the consideration of liquidity, interest rate, financing and exchange rate risks.

Liquidity risk

On the basis of continuous liquidity planning, the Finance department coordinates the Group's cash flows in cooperation with Project Development, Asset Management and Acquisition department, checks them for plausibility and constantly adjusts them in order to ensure liquidity. The Group has fluctuating holdings of cash and cash equivalents that are invested in accordance with the respective operational and strategic requirements and objectives. Furthermore, it conducts hedging transactions, especially to hedge against changes in interest rates and the associated fluctuations in its financing costs. These hedging transactions could prove to be inefficient or unsuitable for meeting the set targets, and could lead to losses that impact income. In addition, the Group is exposed to the risk of its contracting partners failing to fulfil their contractual obligations under the hedging or investment transactions (counterparty risk). S IMMO Group counters this risk by concluding investment and hedging transactions only with respectable banks with a sound credit rating. Stricter equity and liquidity regulations for banks and resultant increased lending restrictions and reduced lending levels may lead to problems with refinancing. Despite its mainly long-term loan agreements, S IMMO may be affected primarily in the event of loan extensions and refinancing (see also financing risk). This risk may arise primarily when loan extensions or refinancing are delayed or are granted at a lower level than expected. If S IMMO were to be unable to utilise suitable and appropriate external borrowings for project developments and acquisitions or refinancing of expiring external borrowings on time or at all, this could significantly impair its ability to fulfil its obligations under project development contracts or in acquisition projects. There is also the risk of being unable to repay bonds at the end of the term. All these consequences or an inability to fulfil the obligations under existing financing agreements and partial debentures due to lack of availability of free liquidity may lead to a significantly adverse impact on the Group's net assets, financial position and earnings situation and impair the Group's credit rating.

Interest rate risk

The vast majority of S IMMO Group's financing agreements provide for a variable interest rate, resulting in the risk of a changing interest rate level. The costs of interest payments increase if the respective reference interest rate rises. However, the European Central Bank is currently expected to keep the base rate at a very low level for the time being. S IMMO Group reduces interest rate risk on a long-term basis by hedging the interest rates of its variable-rate loans. As of 31 December 2017, 20% (31 December 2016: 13%) of loans were fixed-rate and 80% (31 December 2016: 87%) were variable-rate loans – mostly pegged to the three-month Euribor. S IMMO generally hedges its variable-rate loans with the following derivative financial instruments: swaps and caps. At the end of the year, most of the variable-rate financing portfolio was hedged. The extent to which the Group uses instruments of this kind depends on the assumptions and market expectations of the management and the responsible employees at S IMMO with regard to the future interest rate level as well as the development of borrowing levels. If these assumptions prove to be incorrect, this may lead to a significant rise in interest expenses. The stress tests, which include the existing bonds (please refer to section 5.2.1. of the notes for details), show that S IMMO Group is exposed to interest rate changes to a limited extent. An Euribor of 1.0% p.a. increases the cost of funding by 15 basis points. This means that despite hedging with derivative financial instruments, the Group would be exposed to higher financing costs if interest rates were to rise.

Financing risk

Market conditions for property financing are constantly changing. After the financial and economic crisis, a steady and significant improvement in the refinancing situation has been observed for some years now. Refinancing – including large volumes – was concluded at further reduced margins due to the investment pressure on many banks, particularly in Germany and Austria. Borrowing conditions have also further improved in CEE depending on the asset class, location and loan volume. The attractiveness of various types of financing depends on several factors, some of which are beyond the Group's control. These factors include in particular market interest rates, tax-related aspects and the assessment of the value and realisation potential of properties that serve as collateral, as well as the assessment of the general economic situation by the financing partners. In times of highly volatile property markets, lenders may sometimes be unwilling to extend maturing loans under terms that are acceptable to S IMMO Group. This can lead in particular to higher margins, lower lending levels and the need to provide further collateral, it might also generally lead to a lack of refinancing options. If the Group is unable to generate liquidity or external funds to the required extent at the required time or to borrow under acceptable terms, its ability to fulfil its obligations under financing agreements could be impaired. S IMMO Group strives to reduce this risk by spreading its borrowing among different lenders (23 individual banks as of the reporting date of 31 December 2017). Borrowing is monitored on the basis of approvals on a staggered basis by the Management Board and Supervisory Board. As of 31 December 2017, non-current liabilities to banks had an average weighted residual term of 6.4 years. This long-term financing is standard industry practice. In addition, there is the risk that it may not be possible to comply with financial covenants (clauses in loan agreements regarding the permitted indebtedness and the debt service cover ratio) or other contractual terms, guarantees or conditions in financing agreements. This may limit flexibility in financing future business activities. Compliance with financial covenants is constantly monitored by S IMMO Group in close contact with lending financial institutions. Covenant infringements may constitute a default incident. The Group is committed to a balanced ratio between financing and the book value of the property portfolio (loan-to-value ratio). As of 31 December 2017, the Group-wide loan-to-value ratio for secured financing stood at 36.6% (31 December 2016: 41.3%). In addition, the Group has unsecured financing (utilised credit lines, loans and subordinated participating capital) that was equivalent to 12.7% (31 December 2016: 14.6%) of the property assets. Despite close monitoring of financing instruments and the relevant parameters, S IMMO could be confronted with risks in the area of refinancing if the economy and the financing environment deteriorate sufficiently.

Exchange rate risk

S IMMO Group's borrowings are entirely denominated in euros and rental agreements are linked mainly to the euro. Therefore, the direct cash-effective exchange rate risk is regarded as low. A changed situation for another currency could indirectly have an impact on the purchasing power of customers locally, which would have a medium-term effect on property valuations. In accounting terms, short-term, non-cash exchange rate effects could have an impact on the profit and loss account. This may be the case in particular with the Budapest Marriott Hotel depending on how the Hungarian forint develops against the euro.

Tax risks

As an international property group with companies in nine European countries, S IMMO Group is exposed to a large number of different, constantly changing national tax systems. Changes in local taxation conditions (e.g. property-related taxes, sales taxes or income taxes) and uncertainty or different interpretations of the often complex tax regulations may lead to unplanned tax charges and therefore always constitute a risk to earnings. By working with local experts at all times, S IMMO attempts to identify possible consequences early on so that they can be reflected in decision-making, and in order to ensure that adequate accounting provisions are made for all known risks (in connection with Group audits and other fiscal procedures).

Other risks

Environmental risk

S IMMO is potentially affected by various environmental risks such as natural or man-made disasters. Environmental risks may arise in connection with portfolio properties as well as development projects. For example, amended laws or renovation obligations as a result of environmental or safety regulations may require the removal or replacement of materials. Environmentally harmful substances at a development site may also have to be disposed of. New or stricter environmental, health and safety legislation may also give rise to additional costs. Natural disasters or extreme weather conditions such as floods, storms and hail may cause significant damage to properties under construction or portfolio properties. Man-made disasters such as nuclear incidents or accidents may also cause damage. Serious material damage to buildings is covered by appropriate building insurance policies, supplemented by special insurance policies such as against earthquake damage in Romania. S IMMO strives to reduce environmental risks by performing thorough location analyses and obtaining written guarantees when making acquisitions and investments.

Risks related to the matters of the NaDiVeG

The Austrian Sustainability and Diversity Act (NaDiVeG) requires a discussion on the key risks, which could have negative effects on the following considerations (environment, employees, society, combating corruption and bribery and observing human rights). Significant risks in conjunction with the issues mentioned in the non-financial report and measures for identifying, evaluating, avoiding and limiting the risks are described in the following section of the risk report.

S IMMO is aware of its responsibility towards the environment. The construction of new buildings results in an increase in CO2 emissions and the greenhouse effect is accelerated by the additional energy consumption. Furthermore, hazardous waste could be released into the environment during new construction projects or renovation work by using harmful construction materials that contain pollutants. To counter these risks, S IMMO handles portfolio properties and development projects responsibly by monitoring CO2 emissions determined by real consumption and by paying attention to energy-efficient construction methods and the use of high-quality and ecological materials. The energy situation will be considered in both new construction projects and renovations and conversion work is always performed in accordance with the economic conditions. If possible, it is ensured that renewable energies are used in the countries' electricity mix. In new construction projects, efforts are made to obtain green building certificates. In this respect, several S IMMO buildings have already received sustainability certificates.

In addition to environmental management, S IMMO is also responsible for safety on construction sites when commissioning new buildings and conversion work. A lack of quality and breaching safety regulations could jeopardise the safety and health of workers. A lack of care on construction sites can also lead to complaints from residents regarding noise and dust. S IMMO therefore chooses its partners carefully and works exclusively with serious general contractors with high quality standards.

There is always the risk of corruption cases in day-to-day business. Some of the countries in which S IMMO operates have a poor ranking according to the Corruption Perceptions Index, which can lead to penalties or disciplinary action in the event of breaching the compliance guidelines.

Furthermore, S IMMO has a high level of social responsibility along the supplier chain and therefore ensures compliance with all statutory provisions when choosing its partners. Core values such as transparency and fair and sustainable corporate management are deeply enshrined in S IMMO's corporate culture. This is also evidenced by S IMMO's commitment to the Austrian Code of Corporate Governance (please refer to the corporate governance report from page 80 for details).

S IMMO also deals with challenges and potential risks which may arise in connection with its employees. For S IMMO, it is therefore a matter of course to reduce negative effects on the health of its employees to a minimum. Adequate work-life balance and the balance between fostering and challenging employees are also taken into account. Only through specialist qualifications and training our employees are in the position to carry out the tasks they have been assigned independently. In addition, an extensive health programme is offered to employees at S IMMO.

There are no risks which could arise as a result of S IMMO's activities that may have a negative impact on human rights.

Legal risk and regulatory risks

S IMMO is exposed to a large number of legal risks as a result of its business activities. These stem mainly from legal disputes in connection with S IMMO's business operations (for example disputes arising from property transactions or with construction firms) and regulatory risks. If applicable, provisions in accordance with IFRS requirements are formed for ongoing legal disputes. As the outcomes of arbitration or legal proceedings are generally hard to predict, expenses may exceed the allocated provisions. Significant risks may also arise from changes in the law, particularly as S IMMO operates in a highly regulated environment and in different jurisdictions.

The Group operates in a regulatory environment in which the regulations – in particular market abuse, data protection and antitrust legislation – are and will be enforceable with severe penalties. The measures taken by the company may prove insufficient to prevent breaches of legislation and may therefore entail the imposition of substantial fines.

Overall statement on risks and opportunities

S IMMO AG's business activities are subject to a large number of risks and are heavily dependent on the economic situation in the markets in which the Group operates. The European Commission expects stable growth of the Monetary Union, forecasting economic growth of 2.3%. In addition to the uncertain consequences of Brexit, one of the major uncertainties on a political level is the increasing tendency towards protectionism in many countries, such as in the United States.

In the reporting year, S IMMO benefited from the dynamics on the property markets and the disposal of some properties as a result. Although numerous new properties will be completed in S IMMO's markets in 2018, the company expects that they will be met with high demand and that sale and rental prices will remain stable. If the economic situation in the markets were to deteriorate, the Group would have to expect an increase in industry, property portfolio, property valuation, letting and rental default risk.

Liquidity and financing are another risk. While the property sector is currently continuing to benefit from persistently low interest rates, the Group is expecting a moderate increase in interest rates in the medium term. S IMMO prepared itself prior to the change in the interest rate situation and hedged the low interest rates of recent years in the long term using derivatives.

As the price adjustments on the stock exchanges showed at the beginning of 2018, volatility is a risk factor on the capital markets. The performance of the S IMMO share is currently very solid and moved upwards in 2017.

The company counters all risks with careful risk monitoring and a responsible risk policy. In addition, sufficient accounting provisions are made for potential risks.

In addition to the risks mentioned above, there are also opportunities. The increased population influx in major European cities and conurbations is leading to a rise in demand for residential and office properties. S IMMO is leveraging this demographic development, moving forward with its development projects and examining opportunities for purchases and sales.

Outlook

Significant events after the balance sheet date

In February 2018, S IMMO AG issued two corporate bonds. The six-year tranche (ISIN AT0000A1Z9D9) was issued with a volume of EUR 100m and a fixed-rate coupon of 1.75% p.a. The 12-year tranche (ISIN AT0000A1Z9C1) was issued with a volume of EUR 50m and a coupon of 2.875% p.a. The subscription period was from 01 February to 05 February 2018.

In the first quarter of 2018, the Group increased its interest in the listed company Immofinanz to 11.82%.

Expected economic development

The global economy continued to grow in 2017. Despite various risk factors, the European Commission is optimistic regarding the future development of the economy in the European Union (EU) and in the euro area. Growth is expected to come in at 2.3% for the euro area and the EU in 2018 and 2.0% in the subsequent year.

The Austrian economy significantly outpaced the forecasts of the European Commission and grew twice as fast in 2017 as in 2016. After totalling 1.5% in 2016, growth improved to 3.1% last year. The favourable conditions on the labour market and the resulting stable trend in purchasing power also support a positive forecast for the coming years. The European Commission projects growth of 2.9% in 2018 and 2.3% in 2019.

Germany also experienced an economic upswing in 2017. Growth reached a six-year high at 2.2%. Much like in Austria, the improvement in growth in Germany is being driven primarily by the positive domestic developments. The European Commission forecasts robust growth of 2.3% in 2018, followed by 2% in 2019.

Although the European Commission expects the economic growth to continue, there are numerous challenges at the moment. The risks include the uncertainty surrounding the outcome of the Brexit negotiations, the trend towards protectionist policies in certain countries and the global geopolitical tensions.

Expected developments on the real estate markets

Despite rising price levels, Vienna's real estate market is considered to be stable – prices are at a moderate level in international comparison. Roughly 280,000 m² of office space will be completed on the Vienna office market in 2018, which is similar to the levels seen prior to the economic crisis.

Conditions on the Berlin office market are still very positive. Due to high demand and limited available space, rents will likely continue to rise and vacancy will continue to fall in 2018. By contrast, rents and prices on the German residential market are expected to stagnate, as they are already at very high levels, especially in Berlin.

Due to the positive economic development in several of S IMMO's markets in the CEE region, a large volume of new office space will come onto the market in the coming years. The increased supply will be met with strong demand, especially for large spaces.

Expected business development

S IMMO is benefiting from the positive economic developments in all of its markets as well as the low-interest environment and the high price levels in many real estate markets. S IMMO took advantage of these conditions to complete sales in 2017 and sold commercial properties in Vienna and Sofia, for example. In addition, the company made purchases in German cities such as Leipzig, Rostock and Kiel. These cities offer a great deal of potential due to their demographic and economic conditions.

From an operational standpoint, the company will concentrate on project developments and investments in portfolio properties. One development project is located on Siebenbrunnengasse in Vienna. The property is made up of four structural elements and is currently used for office and commercial space. The existing building was purchased by S IMMO in 2015 and will undergo an extensive renovation starting in 2018. Following the completion of the renovation, about two thirds of the useable area will be used as apartments.

One of the key projects in Berlin is the renovation of a former department store in Berlin's Neukölln borough. S IMMO purchased the six-storey building along with the accompanying parking garage in 2015. The property with the project name 101 Neukölln will offer offices as well as retail and restaurant space in the future.

In addition, the construction of two office buildings will be completed in Eastern Europe in 2018. The Einsteinova Business Center office project in Bratislava will be finished in the second quarter of 2018. A modern, sustainable office building offering 23,500 m² of lettable space is being built on the site, which encompasses 11,600 m². The building is being constructed in accordance with the highest green building standards and is expected to receive BREEAM certification with a level of 'excellent'. Renowned international tenants such as UNIQA, Datalan and Tempest were already secured for the property in an early construction phase, and the building is almost fully let before it has even been completed.

The second project is the office building The Mark in Bucharest, which will be completed before the end of 2018. The elegant tower will offer roughly 25,500 m² of lettable space. S IMMO seeks to obtain a BREEAM sustainability certificate at the 'excellent' level for this project as well.

Vienna, 20 March 2018

The Management Board:

Ernst Vejdovszky Friedrich Wachernig

Consolidated Financial Statements

• 23 Consolidated statement of financial position
• 25 Consolidated income statement
• 26 Consolidated statement of comprehensive income
• 27 Consolidated cash flow statement
• 29 Changes in consolidated equity
• 30 Notes to the consolidated financial statements

Consolidated statement of financial position as of 31 December 2017

Assets EUR '000	Notes	31 December 2017	31 December 2016
Non-current assets
Investment properties
Rental properties	3.1.1.	1,668,405	1,917,303
Properties under development and undeveloped land	3.1.1.	37,100	20,801
		1,705,505	1,938,104
Owner-operated properties	3.1.2.	127,875	125,768
Other plant and equipment	3.1.2.	4,655	6,340
Intangible assets	3.1.2.	230	193
Interests in companies measured at equity	3.1.3.	12,237	10,241
Group interests	3.1.4.	842	777
Loans to companies measured at equity	3.1.3.	10,946	10,372
Other financial assets	3.1.4.	300,175	90,394
Deferred tax assets	3.1.16.	2,277	5,807
		2,164,742	2,187,996

Current assets
Inventories	3.1.5.	530	606
Trade receivables	3.1.6.	8,447	10,412
Other financial assets	3.1.6.	6,607	4,241
Other assets	3.1.7.	12,239	9,616
Cash and cash equivalents	3.1.8.	73,390	66,029
		101,213	90,904
Assets held for sale	3.1.9.	6,300	0
		107,513	90,904

2,272,255 2,278,900

Equity and liabilities EUR '000	Notes	31 December 2017	31 December 2016
Shareholders' equity
Share capital	3.1.10.	240,544	240,544
Capital reserves	3.1.10.	68,832	68,832
Other reserves	3.1.10.	631,439	486,229
		940,815	795,605
Non-controlling interests	3.1.11.	3,611	28,737
		944,426	824,342

Non-current liabilities

Subordinated participating certificate capital	3.1.13.	0	58,131
Issued bonds	3.1.14.	287,518	287,221
Other financial liabilities	5.2.2.	686,589	770,602
Provisions	3.1.15.	2,334	2,143
Other liabilities		7	15
Deferred tax liabilities	3.1.16.	135,128	105,645
		1,111,576	1,223,757

Current liabilities
Subordinated participating certificate capital	3.1.13.	56,717	0
Financial liabilities	5.2.2.	113,398	184,096
Income tax liabilities		4,666	3,666
Provisions	3.1.15.	0	162
Trade payables	5.2.2.	7,363	9,298
Other liabilities		34,109	33,579
		216,253	230,801

2,272,255 2,278,900

Consolidated income statement

for the financial year 2017

EUR '000	Notes	2017	2016
Revenues
Rental income	3.2.1.	112,020	118,174
Revenues from operating costs	3.2.1.	33,435	37,657
Revenues from hotel operations	3.2.1.	45,966	42,923
		191,421	198,754
Other operating income		2,866	3,405
Property operating expenses	3.2.2.	-59,877	-64,152
Hotel operating expenses	3.2.2.	-36,232	-32,037
Gross profit		98,178	105,970
Income from property disposals	3.2.3.	470,251	229,882
Book value of property disposals	3.2.3.	-459,910	-224,749
Gains on property disposals	3.2.3.	10,341	5,133
Management expenses	3.2.4.	-18,963	-18,635
Earnings before interest, tax, depreciation and amortisation (EBITDA)		89,556	92,468
Depreciation and amortisation	3.2.5.	-8,999	-7,823
Results from property valuation	3.2.6.	127,592	194,035
Operating result (EBIT)		208,149	278,680
Financing cost	3.2.7.	-51,055	-58,358
Financing income	3.2.7.	6,021	2,769
Results from companies measured at equity	3.2.7.	3,597	292
Participating certificates result	3.1.13.	-5,964	-6,912
Net income before tax (EBT)		160,748	216,471
Taxes on income	3.1.16.	-27,278	-12,148
Consolidated net income		133,470	204,323
of which attributable to shareholders in parent company		130,091	198,459
of which attributable to non-controlling interests		3,379	5,864
Earnings per share
undiluted = diluted	3.2.8.	1.97	2.98

Consolidated statement of comprehensive income

for the financial year 2017

EUR '000	Notes	2017	2016
Consolidated net income		133,470	204,323
Change in value of cash flow hedges	5.1.2.	-197	-4,053
Income taxes on cash flow hedges	5.1.2.	20	1,041
Reclassification of derivative valuation effects	5.1.2.	13,991	5,921
Reserve for foreign exchange rate differences	3.1.10.	165	-829
Valuation of financial instruments available for sale	3.1.10.	39,738	-5,144
Income taxes from measurement of financial instruments available for sale	3.1.10.	-10,893	1,286
Recycling for financial instruments available for sale (including income taxes)	3.1.10.	66	0
Other comprehensive income for the period (realised through profit or loss)		42,890	-1,778
Remeasurement of post-employment benefit obligations		-220	-158
Income taxes on remeasurement of post-employment benefit obligations		54	40
Other comprehensive income for the period (not realised through profit or loss)		-166	-118
Total comprehensive income		176,194	202,427
of which attributable to shareholders in parent company		170,564	196,425
of which attributable to non-controlling interests		5,630	6,002

Consolidated cash flow statement

for the financial year 2017

EUR '000	Notes	2017	2016
Net income before tax (EBT)		160,748	216,471
Results from property valuation	3.2.6.	-127,592	-194,035
Depreciation and amortisation on intangible assets and equipment	3.2.5.	8,999	7,823
Gains/losses on property sales	3.2.3.	-10,341	-5,133
Taxes on income paid	3.1.16.	-1,920	-996
Participating certificates result	3.1.13.	5,964	6,912
Financing result	3.2.7.	41,437	55,297
Operating cash flow		77,295	86,339
Changes in net current assets
Receivables and other assets		-2,561	-9
Provisions, other financial and non-financial liabilities		184	-491
Current liabilities		-2,250	4,415
Cash flow from operating activities		72,668	90,254
Cash flow from investing activities
Investments in property portfolio		-116,435	-87,253
Investments in intangible assets		-142	-89
Investments in equipment and machinery		-653	-2,947
Disposal of equity instruments of other companies	3.1.4.	1,527	0
Acquisition of equity instruments of other companies	3.1.4.	-172,913	-92,582
Investments in financial assets		-319	0
Disposals of financial assets		405	1,577
Investments/Deinvestments in companies measured at equity		317	-6,133
Net cash flow from disposal of subsidiaries and other business units	2.2.4.	336,036	111,927
Net cash flow from initial consolidations	2.2.4.	264	-12,776
Net cash flow from additions/disposals of non-controlling interests		1,847	2,109
Disposals of properties		31,000	45,568
Dividends from companies measured at equity		50	398
Interest received and other financial income	3.2.7.	4,148	1,042
Cash flow from investing activities		85,132	-39,159

Notes	2017	2016
3.1.12. 3.1.13.	-5,180	-1,863
3.1.10.	0	-5,107
3.1.14.	0	0
	-29,623	-1,488
3.1.12.	159,073	185,489
3.1.12.	-209,877	-139,304
3.1.10.	-26,481	-20,018
3.1.12. 3.1.13.	-2,400	-2,429
	-35,951	-51,030
	-150,439	-35,750
	66,029	50,684
	7,361	15,345
	73,390	66,029

1 The effects of currency translation differences on the cash and cash equivalents were immaterial and are therefore not shown separately.

Changes in consolidated equity

EUR '000	Share capital	Capital reserves	Foreign currency translation reserve	Hedge accounting reserve	AFS reserve	Other reserves	Sub-total S IMMO share holders	Non-con trolling interests	Total
As of 01 January 2017	240,544	68,832	-17,365	-17,585	-3,858	525,037	795,605	28,737	824,342
Consolidated net income	0	0	0	0	0	130,091	130,091	3,379	133,470
Other comprehensive income	0	0	165	11,563	28,911	-166	40,473	2,251	42,724
Repurchase of treasury shares	0	0	0	0	0	0	0	0	0
Change in non-controlling interests1	0	0	0	0	0	1,127	1,127	-30,756	-29,629
Distribution for 2016 to shareholders 1	0	0	0	0	0	-26,481	-26,481	0	-26,481
As of 31 December 2017	240,544	68,832	-17,200	-6,022	25,053	629,608	940,815	3,611	944,426
As of 01 January 2016	242,453	72,030	-16,536	-20,356	0	345,673	623,264	23,331	646,595
Consolidated net income	0	0	0	0	0	198,459	198,459	5,864	204,323
Other comprehensive income	0	0	-829	2,771	-3,858	-118	-2,034	138	-1,896
Repurchase of treasury shares	-1,909	-3,198	0	0	0	0	-5,107	0	-5,107
Change in non-controlling interests	0	0	0	0	0	1,041	1,041	-596	445
Distribution for 2015 to shareholders	0	0	0	0	0	-20,018	-20,018	0	-20,018
As of 31 December 2016	240,544	68,832	-17,365	-17,585	-3,858	525,037	795,605	28,737	824,342

¹ The change is mainly due to distributions of earnings generated by the sale of Serdika which are attributed to the minorities of the Einkaufs-Center Sofia G.m.b.H. & Co. KG.

2 The dividend distribution of kEUR 26,481 in 2017 corresponds to a dividend of EUR 0.40 (2016: EUR 0.30) per share, and was effected on 16 June 2017.

Notes to the consolidated financial statements

as of 31 December 2017

1. The Group

S IMMO Group (S IMMO AG and its subsidiaries) is an international real estate group. The ultimate parent company of the Group, S IMMO AG, has its registered office and headquarters at Friedrichstrasse 10, 1010 Vienna, Austria. The company has been listed on the Vienna Stock Exchange since 1987, since 2007 in the Prime Market segment. S IMMO was included in the Austrian ATX benchmark index for the first time on 18 September 2017. It has subsidiaries in Austria, Germany, the Czech Republic, Slovakia, Hungary, Croatia, Romania, Bulgaria and Denmark. As of 31 December 2017, S IMMO Group owned properties in all the above countries except Denmark. S IMMO Group is an international real estate group that engages in buying, selling, real estate project development, letting, asset management and operating hotels and shopping centres as well as in revitalising and renovating properties in Austria, Germany and CEE (Slovakia, Czech Republic, Hungary, Romania and Croatia).

2. Accounting and valuation policies

2.1. Accounting policies

The consolidated financial statements comply with the International Financial Reporting Standards (IFRS), including the interpretations of the IFRS Interpretations Committee, the application of which is mandatory in the European Union at the balance sheet date, as well as supplementary provisions according to para 245a section 1 Austrian Commercial Code (UGB).

The accounting policies of all companies included in consolidation are based on the uniform accounting regulations of S IMMO Group. The financial year for all companies included in consolidation ends on 31 December.

The consolidated financial statements are presented rounded to the nearest 1,000 euros (EUR '000 or kEUR). The totals of rounded amounts and the percentages may be affected by rounding differences caused by the use of computer software.

All receivables and liabilities and all income and expenses between companies in the scope of consolidation are eliminated as part of debt consolidation and the consolidation of income and expenses. Interim results from intercompany transfers of properties are likewise eliminated.

2.2. Consolidation group and basis of consolidation

2.2.1. Subsidiaries

The consolidated financial statements include all the companies (subsidiaries) over which the parent company has a controlling influence through full consolidation. A controlling interest exists where the parent company is directly or indirectly in a position to have the power of disposition over the associated subsidiary and determine the financial and business policies of the subsidiary in such a way that the yield level can be influenced (risk exposure by or claims related to fluctuating yields). A subsidiary is consolidated from the time when the controlling influence is acquired, and deconsolidated when that influence ceases to exist.

The acquisition date is the date on which control of the new acquisition is acquired. Costs incurred by S IMMO Group in the course of acquisition, such as fees for due diligence reviews, measurements and other consulting services, are recognised as expenses in the period in which they have incurred.

If acquisitions result in business combinations as defined by IFRS 3, they are recognised according to the acquisition method. Assessing whether a transaction includes the acquisition of a business requires a detailed analysis of the relevant structures and processes.

If the company obtains control of a business through an acquisition, the acquisition costs are offset against the attributable fair value of the identifiable net assets acquired to determine any difference. A positive difference is recognised as goodwill. If the amount is negative, it is recognised by the S IMMO Group in profit or loss after a further critical review of the recognition and measurement of the assets and liabilities acquired.

If there are no business combinations as defined by IFRS 3, the assets and liabilities acquired are recognised at the proportionately attributable acquisition costs. Typically, hidden reserves recognised as part of share deals are mostly or exclusively attributable to properties.

Changes to interests in subsidiaries that do not lead to the establishment or loss of control are classified as equity transactions. The book values of the interests held by the Group and accordingly those held by the controlling shareholders are adjusted in such a way that they reflect the changes to the ownership interests appropriately. The difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration received is recognised under equity and allocated to the shareholders of S IMMO AG.

In the event of loss of control over a subsidiary, the attributable assets and liabilities and the related non-controlling interests are derecognised on the basis of the fictitious stand-alone disposal. The remeasurement of any retained interests at fair value as of the date of the loss of control is performed via the income statement and represents the starting point for the future measurement as an associate, joint venture, or equity investment. Obtaining control over an existing joint venture or associate is treated as a sale and subsequent acquisition to which the above principles apply.

2.2.2. Non-controlling interests

As a general rule, S IMMO Group recognises non-controlling interests as the proportionate share of identifiable net assets of the subsidiary.

Transactions with non-controlling interests not resulting in loss of control are treated in the same way as transactions with the Group's shareholders. Any difference between the consideration given and the relevant share of the book value of the net assets of the subsidiary arising from the acquisition of a non-controlling interest is recognised in equity. Gains and losses on the disposal of non-controlling interests are also recognised in equity.

Changes to the shareholdings of the non-controlling interests that do not lead to a loss of control of the S IMMO Group are recognised as set out in 2.2.1.

2.2.3. Associates and joint ventures

Companies over whose business and financial policies the parent company can directly or indirectly exercise a significant influence (as a rule, through a direct or indirect interest ranging from 20% to 50% of the share capital) and joint companies are included in the consolidated financial statements at equity.

Interests in companies included at equity are initially recognised at cost of acquisition. For associated companies and jointly controlled companies included at equity, differences resulting from consolidation are calculated in the same way as for fully consolidated companies. The goodwill resulting from the acquisition of a company included at equity is part of the book value and is not subject to depreciation and amortisation. As part of the investment in the company included at equity, the goodwill is reviewed for impairment. S IMMO AG's interest in the profit or loss of an at equity consolidated company after the date of acquisition is included in the consolidated income statement. The share of other comprehensive income is recognised directly in the item other comprehensive income in the consolidated statement of comprehensive income. The cumulative share of such changes increases or reduces the book value of the interest. If S IMMO AG's attributable share of the accumulated losses of a company consolidated at equity exceeds the book value of the interest, excess shares of losses are not recognised, except to the extent that they give rise to obligations. In the event of distributions, the book value of the interest is reduced by the proportionate amount. Intercompany profits and losses between S IMMO AG and at equity consolidated companies are eliminated on consolidation.

If the ownership interest in companies recognised at equity changes and the equity method continues to be applied, the proportion of the gain or loss previously recognised in other comprehensive income attributed to the reduction in ownership interest is to be reclassified to profit or loss if this gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.

2.2.4. Consolidation scope

Apart from S IMMO AG, the consolidated financial statements include 76 (2016: 74) companies (property holding and intermediary holding companies) that are fully consolidated and directly or indirectly owned by S IMMO AG, and 12 (2016: 11) companies included at equity.

The previously consolidated Austrian company S IMMO Property Drei GmbH was sold in the first quarter of 2017. The previously fully consolidated companies Viertel Zwei Hoch GmbH & Co KG, Viertel Zwei Plus GmbH & Co KG, CEE PROPERTY BULGARIA EOOD and HANSA IMMOBILIEN OOD were sold in the third quarter of 2017. The shopping centre, which is part of the Serdika property complex in Einkaufs-Center Sofia GmbH & Co KG, was also sold as 'other business unit'. The following figures contain the sum of all the above-mentioned disposals in each case.

The payment received consisted entirely of cash in the amount of kEUR 339,230. The companies sold or business units had the following book values at the time of the disposal:

EUR '000	Book value
Current assets
Investment property	428,910
Other current assets	1,097
Cash and cash equivalents	3,194
Total assets	433,201

Total book value of disposals	103,737
Current liabilities	2,685
Non-current liabilities	101,052

Overview of the consolidation group 2017 on a company basis

Changes in the consolidation group in the financial year 2017

In the third quarter of 2017, S IMMO Group Finance GmbH (Austria) and S IMMO Property Fünf GmbH (Austria), were respectively fully consolidated in the consolidated financial statements of S IMMO AG for the first time. In the fourth quarter of 2017, S IMMO Property Sechs GmbH (Austria), S IMMO Property Sieben GmbH (Austria), S IMMO Property Acht GmbH, (Austria), S IMMO Berlin I GmbH (Germany) and S IMMO Berlin V GmbH (Germany) followed. A business combination as per IFRS 3 did not occur for any of the newly consolidated companies, as the definition of a business according to IFRS 3 was not met.

In addition, QBC Omega SP Immomanagement GmbH (Austria) and QBC Immobilien GmbH & Co Omega KG (Austria) were included in the consolidated financial statements of S IMMO AG as associated companies. In the fourth quarter of 2017, the associated enterprise QBC Immobilien GmbH & Co Gamma KG was sold.

Company	Location	Nominal capital 2017	Nominal capital 2016	Group share % 2017	Group share % 2016	Currency 2017	Currency 2016	Consoli dation type 2017	Consoli dation type 2016
CEE Immobilien GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
CEE PROPERTY-INVEST Immobilien GmbH	A, Vienna	48,000,000	48,000,000	100	100	EUR	EUR	FC	FC
CEE CZ Immobilien GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
German Property Invest Immobilien GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
Hotel DUNA Beteiligungs Gesellschaft m.b.H.	A, Vienna	145,346	145,346	100	100	EUR	EUR	FC	FC
AKIM Beteiligungen GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
SO Immobilienbeteiligungs GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
CEE Beteiligungen GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
E.V.I. Immobilienbeteiligungs GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
SIAG Berlin Wohnimmobilien GmbH	A, Vienna	3,982,500	3,982,500	99.74	99.74	EUR	EUR	FC	FC
E.I.A. eins Immobilieninvestitions gesellschaft m.b.H.	A, Vienna	36,336	36,336	100	100	EUR	EUR	FC	FC
PCC-Hotelerrichtungs- und Betriebs gesellschaft m.b.H. & Co KG	A, Vienna	8,299,238	8,299,238	74.69	74.61	EUR	EUR	FC	FC
PCC-Hotelerrichtungs- und Betriebsge sellschaft m.b.H.	A, Vienna	36,336	36,336	100	100	EUR	EUR	FC	FC
Neutorgasse 2–8 Projektverwertungs GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
H.S.E. Immobilienbeteiligungs GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
A.D.I. Immobilien Beteiligungs GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
QBC Management und Beteiligungen GmbH & Co KG	A, Vienna	35,000	35,000	35	35	EUR	EUR	E	E
QBC Immobilien GmbH	A, Vienna	60,000	60,000	21.02	21.02	EUR	EUR	E	E

Company	Location	Nominal capital 2017	Nominal capital 2016	Group share % 2017	Group share % 2016	Currency 2017	Currency 2016	Consoli dation type 2017	Consoli dation type 2016
QBC Management und Beteiligungen GmbH	A, Vienna	35,000	35,000	35	35	EUR	EUR	E	E
QBC Alpha SP Immomanagement GmbH	A, Vienna	35,000	35,000	35	35	EUR	EUR	E	E
QBC Gamma SP Immomanagement GmbH	A, Vienna	35,000	35,000	35	35	EUR	EUR	E	E
QBC Omega SP Immomanagement GmbH	A, Vienna	35,000	N/A	35	N/A	EUR	EUR	E	N/A
QBC Immobilien GmbH & Co Alpha KG A, Vienna		10,000	10,000	35	35	EUR	EUR	E	E
QBC Immobilien GmbH & Co Zeta KG	A, Vienna	10,000	10,000	21.02	21.02	EUR	EUR	E	E
QBC Immobilien GmbH & Co Omega KG	A, Vienna	10,000	N/A	35	N/A	EUR	EUR	E	N/A
BGM-IMMORENT Aktiengesellschaft
& Co KG	A, Vienna	4,360,370	4,360,370	22.83	22.83	EUR	EUR	E	E
S IMMO Property Invest GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
S Immo Immobilien Investitions GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
S IMMO Beteiligungen GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
Siebenbrunnengasse 21 GmbH & Co KG	A, Vienna	300	300	100	100	EUR	EUR	FC	FC
S IMMO Property Eins GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
S IMMO Property Zwei GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
S IMMO Property Vier GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
S IMMO Property Fünf GmbH	A, Vienna	35,000	N/A	100	N/A	EUR	EUR	FC	N/A
S IMMO Property Sechs GmbH	A, Vienna	35,000	N/A	100	N/A	EUR	EUR	FC	N/A
S IMMO Property Sieben GmbH	A, Vienna	35,000	N/A	100	N/A	EUR	EUR	FC	N/A
S IMMO Property Acht GmbH	A, Vienna	35,000	N/A	100	N/A	EUR	EUR	FC	N/A
Viertel Zwei Hoch GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
Viertel Zwei Plus GmbH	A, Vienna	35,000	35,000	100	100	EUR	EUR	FC	FC
S IMMO Group Finance GmbH	A, Vienna	35,000	N/A	100	N/A	EUR	EUR	FC	N/A
WASHINGTON PROEKT EOOD	BG, Sofia	45,000	45,000	100	100	BGN	BGN	FC	FC
ELTIMA PROPERTY COMPANY s.r.o.	CZ, Prague	100,000	100,000	100	100	CZK	CZK	FC	FC
REGA Property Invest s.r.o.	CZ, Prague	200,000	200,000	100	100	CZK	CZK	FC	FC
Lützow-Center GmbH	D, Berlin	25,000	25,000	100	100	EUR	EUR	FC	FC
Ikaruspark GmbH	D, Berlin	25,000	25,000	100	100	EUR	EUR	FC	FC
S IMMO Germany GmbH	D, Berlin	25,000	25,000	100	100	EUR	EUR	FC	FC
S Immo Geschäftsimmobilien GmbH	D, Berlin	25,000	25,000	100	100	EUR	EUR	FC	FC
Markt Carree Halle Immobilien GmbH	D, Berlin	25,000	25,000	100	100	EUR	EUR	FC	FC
Tölz Immobilien GmbH	D, Berlin	25,000	25,000	99.74	99.74	EUR	EUR	FC	FC
Einkaufs-Center Sofia G.m.b.H. & Co KG	D, Hamburg	87,000,000	87,000,000	65	65	EUR	EUR	FC	FC

Company	Location	Nominal capital 2017	Nominal capital 2016	Group share % 2017	Group share % 2016	Currency 2017	Currency 2016	Consoli dation type 2017	Consoli dation type 2016
SIAG Deutschland Beteiligungs Verwaltungs GmbH	D, Berlin	25,000	25,000	100	100	EUR	EUR	FC	FC
SIAG Deutschland Beteiligungs GmbH & Co. KG	D, Berlin	100,000	100,000	94.90	94.90	EUR	EUR	FC	FC
SIAG Leipzig Wohnimmobilien GmbH	D, Berlin	750,000	750,000	99.74	99.74	EUR	EUR	FC	FC
Maior Domus Hausverwaltungs GmbH	D, Berlin	25,000	25,000	100	100	EUR	EUR	FC	FC
SIAG Property I GmbH	D, Berlin	25,000	25,000	100	100	EUR	EUR	FC	FC
SIAG Property II GmbH	D, Berlin	25,000	25,000	100	100	EUR	EUR	FC	FC
S IMMO Berlin I GmbH	D, Berlin	25,000	N/A	100	N/A	EUR	EUR	FC	N/A
S IMMO Berlin II GmbH	D, Berlin	25,000	25,000	100	100	EUR	EUR	FC	FC
S IMMO Berlin III GmbH	D, Berlin	25,000	25,000	93	93	EUR	EUR	FC	FC
S IMMO Berlin IV GmbH	D, Berlin	25,000	25,000	93	93	EUR	EUR	FC	FC
S IMMO Berlin V GmbH	D, Berlin	25,000	N/A	100	N/A	EUR	EUR	FC	N/A
H.W.I. I ApS	DK, Århus	7,000,000	7,000,000	100	99.72	DKK	DKK	FC	FC
H.W.I. IV ApS	DK, Århus	1,000,000	1,000,000	100	99.72	DKK	DKK	FC	FC
GPI I ApS	DK, Århus	125,000	125,000	100	99.71	DKK	DKK	FC	FC
GPI II ApS	DK, Århus	60,000	60,000	100	99.71	EUR	EUR	FC	FC
GPI III ApS	DK, Århus	125,000	125,000	100	99.71	DKK	DKK	FC	FC
Bank-garázs Kft.	H, Budapest	3,000,000	3,000,000	100	100	HUF	HUF	FC	FC
CEE Property-Invest Kft.	H, Budapest	110,000,000	110,000,000	100	100	HUF	HUF	FC	FC
Maros utca Kft.	H, Budapest	3,000,000	3,000,000	100	100	HUF	HUF	FC	FC
BUDA Kft.	H, Budapest	3,000,000	3,000,000	100	100	HUF	HUF	FC	FC
Duna Szálloda Zrt.	H, Budapest	5,000,000	5,000,000	100	100	HUF	HUF	FC	FC
City Center Irodaház Kft.	H, Budapest	44,370,000	44,370,000	100	100	HUF	HUF	FC	FC
Szegedi út Kft.	H, Budapest	3,000,000	3,000,000	100	100	HUF	HUF	FC	FC
Nagymezö Kft.	H, Budapest	462,590,000	462,590,000	100	100	HUF	HUF	FC	FC
CEE Property-Invest Hungary 2003 Kft. H, Budapest		3,000,000	3,000,000	100	100	HUF	HUF	FC	FC
S IMMO APM Hungary Kft.	H, Budapest	20,000,000	20,000,000	100	100	HUF	HUF	FC	FC
SOCIETATE DEZVOLTARE COMERCIAL SUDULUI (SDCS) SRL	RO, Bucharest	157,642,390	334,676,390	100	100	RON	RON	FC	FC
VICTORIEI BUSINESS PLAZZA SRL	RO, Bucharest	18,852,144	18,852,144	100	100	RON	RON	FC	FC
DUAL CONSTRUCT INVEST SRL	RO, Bucharest	80,732,000	80,732,000	100	100	RON	RON	FC	FC
ROTER INVESTITII IMOBILIARE SRL	RO, Bucharest	4,472,020	4,472,020	100	100	RON	RON	FC	FC
CII CENTRAL INVESTMENTS IMMOBILIARE SRL	RO, Bucharest	1,816,000	1,816,000	47	47	RON	RON	E	E
Galvániho Business Centrum, s.r.o.	SK, Bratislava	6,639	6,639	100	100	EUR	EUR	FC	FC
GALVÁNIHO 2, s.r.o.	SK, Bratislava	6,639	6,639	100	100	EUR	EUR	FC	FC
IPD -International Property Development, s.r.o.	SK, Bratislava	33,194	33,194	51	51	EUR	EUR	E	E
SIAG Fachmarktzentren, s.r.o.	SK, Bratislava	6,639	6,639	100	100	EUR	EUR	FC	FC
SIAG Hotel Bratislava, s.r.o.	SK, Bratislava	6,639	6,639	100	100	EUR	EUR	FC	FC
GALVÁNIHO 4, s.r.o.	SK, Bratislava	33,195	33,195	100	100	EUR	EUR	FC	FC
EUROCENTER d.o.o.	HR, Zagreb	20,000	20,000	100	100	HRK	HRK	FC	FC

The following subsidiaries were not included in the consolidation group due to their immateriality for the consolidated financial statements as of 31 December 2017. They had a book value in the amount of kEUR 307 as of 31 December 2017 (31 December 2016: kEUR 157). The non-consolidated subsidiaries include Einkaufs-Center Sofia Verwaltungs G.m.b.H., Germany, Hamburg (nominal capital kEUR 25, Group share 65%), SIAG Multipurpose s.r.o., Slovakia, Bratislava (nominal capital kEUR 7, Group share 100%), and the S IMMO Property Neun GmbH, Austria, Vienna (nominal capital kEUR 35, Group share 100%).

2.3. Reporting currency and currency translation

The Group's reporting currency is the euro. The functional currency of individual Group companies is determined by the respective economic environment in which they mainly operate.

For those Group companies for which the local currency is equivalent to the functional currency, functional currencies are translated into the reporting currency in accordance with IAS 21 as follows:

• (a) Assets and liabilities at the closing rate,
• (b) Income and expenses at the average rate for the period,
• (c) Equity at historical rates,
• (d) All resulting exchange differences are recognised in the foreign currency translation reserve under equity.

Foreign currencies have been translated using the following exchange rates:

	Czech Republic CZK	Hungary HUF	Bulgaria BGN	Romania RON	Croatia HRK
Closing rate 31 December 2017	25.535	310.330	1.956	4.659	7.440
Average rate in 2017	26.289	309.310	1.956	4.574	7.457
Closing rate 31 December 2016	27.021	309.830	1.956	4.539	7.560
Average rate in 2016	27.042	311.909	1.956	4.493	7.536

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the transaction date or, in the case of revaluations, on the valuation date. Gains and losses resulting from the settlement of such transactions or from the translation of monetary assets and liabilities denominated in foreign currencies at the exchange rate prevailing on the balance sheet date are recognised in the income statement.

2.4. New mandatory accounting regulations

2.4.1. New standards and interpretations

In the preparation of the consolidated financial statements, the following amendments of the existing IAS, IFRS and interpretations, and the newly issued standards and interpretations, to the extent that they were published in the Official Journal of the European Union until 08 February 2018 and effective by that date, have been taken into account:

Standard	Contents	Applicable as of
IAS 12	Amendments to IAS 12 'Income Taxes': Clarification regarding the questions on the recognition of deferred tax assets to temporary differences from unrealised losses	January 2017
IAS 7	Amendments to IAS 7 'Statement of Cash Flows': Disclosure initiative	January 2017
AIP 2014-2016: IFRS 12	Amendments to IFRS 12 'Disclosure of Interests in Other Entities'	January 2017

Amendments to IAS 12:The amendments provide clarifications on the accounting for deferred tax assets for unrealised losses on debt instruments measured at fair value. In particular, the amendments confirm that:

Reductions in the IFRS book value, which result from the fair value measurement, while the tax book value remains unchanged, always result in a temporary difference. This applies regardless of the intention the entity has with the asset (for sale, hold to maturity) after that.

The IFRS book value is only for determining temporary differences and is not relevant for the estimate of future taxable income. In determining taxable income, the realisation of a value above the current IFRS book value is also conceivable, if it is probable. If the sources in taxable income are limited in the tax law against which the reversal of deductible temporary differences can be implemented, in assessing whether and to what extent deferred tax assets are to be recognised, these differences are to be taken into account only in combination with other deductible temporary differences of the same kind. To determine future taxable income, which is based on the evidence of the long-term value of deductible temporary differences, income before the reversal of possible deductible differences must be used.

Amendments to IAS 7: The amendments aim to improve information on the entity's financing activities. According to the amendments, additional disclosures are now to be provided on the development of financial liability items in the statement of financial position during the reporting period for which cash flows associated with these financial liabilities were or will be presented in the cash flow statement as cash flows from financing activities. In addition, corresponding additional disclosures must be made on the development of the book value of financial assets for which payments associated with these items are also presented in the cash flow from financing activities.

In particular, enclosed are:

Changes in cash and cash equivalents from changes in the cash flows from financing activities,

Changes from the acquisition or loss of control in subsidiaries or other operations (business),

• The effects of changes in foreign exchange rates,
• Changes which arise from changes in fair values and
• other changes.

In addition, sufficient information is to be provided to relate to the information provided in the reconciliation with the values listed in the balance sheet and the statement of changes in financial position.

AIP 2014-2016 (Amendments to IFRS 12): The annual amendments to the IFRS (2014-2016 Cycle) issued on 08 December 2016 regarding the amendments to IFRS 12 'Disclosure of Interests in Other Entities' clarify that the disclosure requirements of IFRS 12 also apply to interests that are classified as held for sale in accordance with IFRS 5 except combined financial information in accordance with IFRS 12.B10-B16.

If specifically applicable, the listed provisions were implemented in the consolidated financial statements. The amendments to IAS 7 result in additional disclosures for the Group. The amendments to IAS 12 and the amendments to IFRS 12 did not result in any significant effects on the presentation of the assets, financial performance and cash flows.

2.4.2. New standards not yet required to be applied at the balance sheet date

Until 08 February 2018, the following standards and interpretations were introduced or amended, which however were not yet effective for the 2017 financial year. Early adoption is not planned.

Standard	Contents	Adopted and applied from
IFRS 9	Financial instruments	January 2018
IFRS 15	Revenue from contracts with customers	January 2018
IFRS 15	Clarification on Revenue from Contracts with Customers	January 2019
IFRS 16	Leases	January 2018
IFRS 4	Application of IFRS 9 along with IFRS 4	January 2018
AIP 2014-2016 (IFRS 1, IAS 28)	Amendments to IFRS 1 'First-time Adoption of International Financial Reporting Standards' and IAS 28 'Investments in Associates and Joint Ventures'	January 2018

Standard	Contents	Not adopted and applied from
IFRS 2	Classification and measurement of share-based payment transactions	January 2018
IAS 40	Transfers of investment properties	January 2018
IFRIC 22	Transactions in foreign currency and considerations paid in advance	January 2018
IFRS 9	Prepayment options with negative prepayment penalties	January 2019
IAS 28	Long-term investments in associates and joint ventures	January 2019
AIP 2015-2017	Amendments and clarifications to the different IFRS	January 2019
IFRIC 23	Uncertainty regarding the income tax treatment	January 2019
IFRS 17	Insurance contracts	January 2021
IFRS 14	Regulatory deferred income	The final IFRS Stan dard is still to come
IAS 28 IFRS 10	Investments in associates/consolidated financial statements: Sale or contribution of assets between an investor and an associate or joint venture	Postponed indefinitely
IAS 19	Amendments to IAS 19: Plan amendments, curtailments and settlements	January 2019

However, standards and interpretation which have already been adopted by the EU, were not adopted early

IFRS 9 'Financial Instruments' deals with the classification, recognition and measurement of financial assets and financial liabilities. The complete version of IFRS 9 was published in July 2014. This Standard replaces IAS 39, 'Financial Instruments: Recognition and Measurement', with the exception of the option to retain hedge accounting under IAS 39 (provisionally). In addition, the requirements of IFRIC 9 'Reassessment of Embedded Derivatives' were integrated in IFRS 9.

Classification and assessment

IFRS 9 retains the mixed measurement model with simplifications and creates three measurement categories for financial assets:

• amortised cost,
• fair value through other comprehensive income,
• fair value through profit or loss.

The classification is based on the business model of the reporting entity and the characteristics of the contractual cash flows of the financial asset. Investments in equity instruments are generally required to be measured at fair value through profit or loss. Only at initial recognition is there an irrevocable option to present changes in their fair value in other comprehensive income. The only exception relates to liabilities designated as fair value through profit or loss, for which changes in the fair value resulting from entity's own credit risk are to now be recognised in other comprehensive income. The fact that the 'hold to collect' business model shall not be applied for trade receivables that are sold as part of factoring and fulfil criteria for derecognition in accordance with IFRS 9 shall be enclosed. In those circumstances, one of two business models may be appropriate, depending on the particular circumstances: 'hold to collect and sell' and 'selling'. If a portfolio can be subdivided to show which receivables are sold as part of factoring and which are not, two business models 'hold to collect' and 'selling' are applied. The Group is not selling any trade receivables as part of factoring.

The Group has checked its financial assets and liabilities and is expecting the following effects of the new Standard as of 01 January 2018:

The other financial assets include the Group's equity instruments that are currently classified as AFS and for which there exists an option in the future in accordance with IFRS 9 to classify them as FVOCI, but without the possibility of recycling. As of 31 December 2017, shares held by S IMMO in two listed real estate companies are included in this category, for which the accounting as FVOCI continues to be applied.

Accordingly, the new standard has no significant effects on the classification and assessment of these financial assets. However, gains or losses from selling financial assets, which are classified as FVOCI, are no longer reclassified to gains and losses but in the future directly to retained earnings. In the financial year 2017, kEUR 66 (including deferred taxes) was reclassified from the AFS reserve to the income statement in connection with the disposal of financial assets, which are classified as AFS. In addition, in accordance with IFRS 9, the previous exemption – equity instruments of private companies is attributable to the fulfilment of requirements measured at cost less any write-down losses – is being omitted. As a result of this change, there was a remeasurement of an investment in the amount of kEUR 1,970 (reporting date 31 December 2017) to its fair value.

No effects on the Group's financial liabilities are expected, as there are no liabilities assigned to the FVPL category. With the regulations on disposals in IAS 39 having been retained in IFRS 9, no changes are anticipated here, either.

Hedge accounting

IFRS 9 facilitates hedge accounting. An economic relationship between the hedged item and the hedging instrument is required. In addition, the hedging relationship must correspond to what the management actually uses for risk management purposes. Simultaneous documentation is still required, but differs from the documentation currently prepared in accordance with IAS 39. In addition, potential sources of ineffectiveness are now enclosed in hedge documentation. It should be noted that based on hedge accounting there is an option between IFRS 9 regulations and IAS 39 regulations. A consistent decision is to be made. At the start of each financial year after initial application, there is the possibility to change the exertion of the option and to apply IFRS 9 to all hedging relationships. However, in the event of hedge-accounting in accordance with IAS 39 being retained, application of the other rules of IFRS 9 or the disclosures in the notes required by IFRS 7 is mandatory.

The new hedge accounting regulations align the accounting for hedging relationships more closely with the Group's risk management activities. More hedges may be eligible for hedge accounting, as IFRS 9 introduces a principle-based approach.

The Group intends to make use of the option of continuing to apply the rules of IAS 39 for the purposes of hedge accounting.

Impairment losses (expected credit losses)

In addition, there is a new impairment model based on expected losses that replaces the IAS 39 model based on 'incurred losses' principle. The categorisation and measurement of financial liabilities generally have not changed. The new impairment model requires impairment to be recognised on the basis of expected credit losses (expected credit loss model) instead of using the incurred loss model in accordance with IAS 39. This regulation applies to financial assets measured at amortised cost, debt instruments measured at FVOCI, contract assets within the scope of IFRS 15, lease receivables, loan commitments and certain financial guarantees.

The Group uses the simplified model for trade receivables without significant financing components and contract assets as per IFRS 15 and calculates the loss allowance accordingly at an amount equal to lifetime expected losses. The expected credit loss is therefore determined based on a provision matrix, in which the financial assets are reorganised according to maturity structure and the respective default rates are determined for different maturity bands. To prepare a provision matrix, historical information about actually incurred defaults are first taken into account. However, in addition to the historical perspective, the Group takes a range of forward-looking information and expectations into account. In this respect, the Group is not expecting any or only insignificant effects on the consolidated financial statements.

The new standard also specifies additional disclosure requirements and changes in the presentation, which are expected to change the nature and extent of the Group's disclosures regarding the financial instruments at the date of first-time adoption of IFRS 9. The Group will apply the new Standard retrospectively from 01 January 2018, taking into account the practical relief in accordance with IFRS 9. The corresponding figures for 2017 are not adjusted accordingly.

IFRS 15 'Revenue from Contracts with Customers' governs revenue recognition and thus supersedes IAS 11 'Construction Contracts', IAS 18 'Revenue', SIC 31 'Revenue – Barter Transactions Involving Advertising Services', IFRIC 13 'Customer Loyalty Programmes', IFRIC 15 'Agreements for the Construction of Real Estate' and IFRIC 18 'Transfers of Assets from Customers'. The objective of IFRS 15 is to create principles that an entity must apply in reporting information that is useful for decision-making purposes to users of the financial statements with regard to the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. In accordance with IFRS 15, revenue must be recognised when the customer obtains control over the agreed goods and services and can derive benefits from them. The new standard provides a five-step model framework for determining the revenue to be recognised. IFRS 15 also includes several disclosure requirements regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

In the property sector, the impact of IFRS 15 is mainly felt in the development of property for disposal (properties held for sale). In contrast to the previous revenue recognition principles, for property development projects of this kind, revenue from the sale will be recognised in future at the time of signing (time-period related revenue recognition) and no longer on the date the benefits/ encumbrances are transferred (date-related revenue recognition). As of 31 December 2017, the S IMMO Group has no project developments of this kind and is not therefore expecting any significant impact from application of the new standard.

It is intended to adopt the new standard using the modified retrospective approach. As a result, all cumulative effects at the time of application are recognised in retained earnings and the corresponding figures are not adjusted.

Clarification regarding IFRS 15 'Revenue from Contracts with Customers': In this clarification, information and examples regarding the following sectors are revised and new examples are included.

No significant effects on the consolidated financial statements are expected.

IFRS 16 'Leases' governs the recognition, measurement, presentation and disclosure requirements for leases in financial statements. The standard stipulates a single accounting model for lessees. Under this model, lessees must recognise all assets and liabilities from leases in the statement of financial position, unless the term is twelve months or less or the asset in question is a low-value asset. The simplifications represent options. Lessors continue to distinguish between finance and operating leases for accounting purposes. The accounting model in IFRS 16 does not differ significantly from that in IAS 17.

The standard will primarily affect the accounting for the Group's operating leases. As of the reporting date, the Group has noncancellable operating lease obligations of kEUR 11,422.

In relation to multi-component agreements, a separation and separate accounting of individual leasing and non-leasing components is to be taken into account in accordance with IFRS 16. While the separation in operating lease agreements in particular has had barely any practical relevance to date due to being unrecognised, effects on balance sheet figures may occasionally arise in Group as lessee as part of on-balance accounting in accordance with IFRS 16. The expense of recognised leasing components and unrecognised service components is therefore of additional significance for the Group within the scope of IFRS 16. If several components meet the definition of leasing, the accounting policies of IFRS 16 are to be applied to each separately identifiable component and represented separately from non-leasing components.

However, the lessee has the option to waive the separate accounting of leasing and non-leasing components. This option can be exercised consistently at the level of asset classes of underlying leased items. If the option is drawn, the leasing components and the related non-leasing components are combined and consistently accounted for as leasing components in accordance with IFRS 16. However, the separation of individual components of the agreement are mandatory for lessors, meaning, there is no option similarly to lessees to waive the allocation, as detailed knowledge of the individual components is provided for lessors to perform a fair (individual) pricing. The allocation of the consideration received on the components of the agreement is to be performed using the provisions for sales recognition in IFRS 15.73–15.90 (IFRS 16.17). In accordance with IFRS 15, the allocation of the transaction price focuses on the separate performance obligations on the each stand-alone selling price. At first, the market price is to be used to determine the stand-alone selling price. In the case that the standalone selling price is not directly observable, an estimate can be used.

However, the Group has not yet disclosed which further adjustments are necessary, for example due to the change in the definition of the lease term, the different treatment of variable lease payments and renewal and termination options. Therefore it is not yet possible to estimate the amount of the rights of use and corresponding leasing liabilities which is to be recognised at the time of application of the new standard and how this will impact consolidated profit and the classification of cash flow.

The Group will not apply the standard early. The Group plans to apply simplified provisions and not enclose any comparative values of the prior-period.

AIP 2014-2016 (IFRS 1, IAS 28): The annual amendments to the IFRS (2014-2016 Cycle) issued on 08 December 2016 included amendments to the following IFRS Standards, which have already been adopted by the EU, but were not adopted early:

IFRS 1 'First-time Adoption of International Financial Reporting Standards'

Short-term exemptions in connection with the transitions of IFRS 7, IAS 19 and IFRS 10 for first-time adopters were deleted in line with this amendment. These transitions were available to companies for past reporting periods and are therefore no longer applicable.

IAS 28 'Long-term Investments in Associates and Joint Ventures'

In accordance with IAS 28, venture capital organisations, mutual funds, unit trusts and similar entities are measured their investments in associates and joint ventures in accordance with IFRS 9 in profit or loss at fair value. It is explicitly clarified that this option is to be separate in the initial recognition for each associate or joint venture.

No significant effects on the Group's net assets, financial position and earnings situation are currently anticipated.

Standards and interpretation which have yet not been adopted by the EU

From the aforementioned other new versions and amendments, no significant effects on the Group's net assets, financial position and earnings situation are currently anticipated.

2.5. Changes in accounting and valuation policies

Apart from the new standards described under 2.4.1., there were no changes in accounting and valuation policies or in the presentation of the financial statements in the financial year 2017.

2.6. Accounting and valuation policies

2.6.1. Properties held as financial investments

It is industry practice to measure investment properties using the fair value model, under the option available in IAS 40. The Group classifies properties leased or rented out for the purpose of generating income or held for capital appreciation, together with undeveloped land as investment properties. Properties acquired for disposal, used by the Group or sold after development are not supposed to fall under the scope of IAS 40 and fall under the scope of IAS 2.

The application of the fair value model means that rental properties and undeveloped land are measured at fair value at the balance sheet date. The resulting changes in book values before revaluation are recognised as a profit or loss under the result from property valuation.

Properties are recognised as assets of each company in their relevant functional currency.

The diversity of the properties to which the fair value model is applied necessitates a careful choice of appropriate valuation models and different parameters for each individual property, so that factors such as location, use type, market environment and building quality are taken into account.

Costs of regular maintenance are recognised in profit or loss immediately. Costs are capitalised when the expenditure results in increased future benefits and the costs can be reliably measured. The capitalised costs are not subject to depreciation and amortisation because no depreciation and amortisation is applied in general pursuant to the fair value model selected according to IAS 40.

Where construction finance can be directly associated with these properties, the borrowing costs of qualifying properties during the period of construction are capitalised as part of acquisition and construction cost.

2.6.2. Inventories

Properties held for sale in the ordinary course of business are not subject to IAS 40, but are to be treated as inventories under IAS 2. Properties held for sale are recognised at cost of acquisition or construction and subsequently measured at the lower of cost or net realisable value. The net realisable value is the estimated proceeds of sale less the estimated costs of completion and the estimated selling costs. The net realisable value is recalculated in every subsequent period. The costs of acquisition or construction include not only the direct costs of acquisition but also incidental and other costs.

2.6.3. Owner-operated properties, other plant and equipment

Owner-operated properties consist of hotels operated by S IMMO Group. The business of these hotels includes the rental of rooms and catering activities. These hotels are operated under management agreements for the most part, and consequently the risks associated with occupancy rates are borne by S IMMO Group. Hotels of this kind are outside the scope of IAS 40 (investment properties) and are therefore to be treated as tangible non-current assets under IAS 16.

Under IAS 16, owner-operated properties (including ownermanaged hotels) and other non-current tangible assets are valued using the cost model. The properties are recognised on initial capitalisation at costs of acquisition or construction and written down in subsequent years to reflect depreciation and amortisation and any impairment losses (please refer to section 2.6.6.1. of the notes).

Retroactive acquisition or construction costs are only recognised as part of the acquisition or construction costs of an asset or, if applicable, as a separate asset when it is probable that the Group will receive an economic benefit from the asset in the future and the costs can be reliably measured. The book value of the parts that were replaced is derecognised. Repair and maintenance expenses that do not represent a material replacement investment (day-to-day servicing) are recognised as expenses in the income statement in the financial year in which they are incurred.

Gains and losses on disposals of tangible non-current assets are measured as the difference between the disposal proceeds and the book values and in the case of properties are reported under gains on property disposals.

Where construction finance can be directly associated with these properties, the borrowing costs of qualifying properties during the period of construction are capitalised as part of acquisition and construction cost.

Depreciation and amortisation is calculated on a straight-line basis over the expected useful lives of the assets as follows:

	Useful life in years
	from	to
Owner-operated hotels/buildings	10	30
Other property, plant and equipment/ machinery and equipment	3	10

2.6.4. Intangible assets

Intangible assets for the purpose of IAS 38 are identifiable non-monetary assets without physical substance. To qualify for recognition, an intangible asset must be identifiable and be under the control of the entity. It must be probable that the entity will receive future economic benefits from the asset and its cost must be capable of being measured reliably.

Intangible assets with a limited useful life are subject to depreciation and amortisation, calculated on the basis of the following useful lives:

		Useful life in years
	from	to
Software	3	6

As required under IAS 36, the assets are also reviewed for impairment.

Intangible assets acquired for consideration are recognised at acquisition cost less straight-line depreciation and amortisation and provision for any impairment losses.

S IMMO Group has not capitalised any internally generated intangible assets.

2.6.5. Financial instruments

2.6.5.1. Primary financial instruments

In accordance with IAS 39, S IMMO Group as a general rule classifies its financial instruments as follows:

• Financial assets and liabilities measurable at fair value through profit or loss,
• Loans and receivables,
• Financial assets held to maturity,
• Financial assets available for sale,
• Financial liabilities at amortised cost.

Classification is based on the purpose for which the individual instrument is acquired and takes place at the time of acquisition.

S IMMO Group as a general rule classifies financial instruments into the following categories:

• Group interests,
• Trade receivables,
• Loans to companies measured at equity,
• Other financial assets,
• Cash and cash equivalents,
• Subordinated participating certificate capital,
• Issued bonds,
• Other financial liabilities (non-current),
• Current financial liabilities,
• Trade payables.

The category financial instruments and liabilities measurable at fair value through profit or loss includes financial instruments held for trading purposes, financial instruments classified as such at the time of acquisition and all derivative financial instruments except those serving as hedges.

The assets classified under loans and receivables are financial instruments with fixed or determinable payment flows not traded in an active market. This category mainly includes trade receivables and other financial assets. Where their remaining maturities are less than twelve months, they are disclosed under current assets, and otherwise under non-current assets.

Financial assets with fixed or determinable payment flows are disclosed under financial assets held to maturity.

Financial assets available for sale comprise all financial assets not included in any of the above categories or deliberately classified as available for sale. These financial instruments are disclosed as non-current assets unless it is the management's intention to dispose of them within the next twelve months.

Financial instruments for which a fair value cannot be reliably determined are recognised at the cost of acquisition less any impairment.

The category financial liabilities at amortised cost comprises trade payables and other financial liabilities.

Additions to and disposals of financial instruments are recognised as of the applicable settlement dates. Financial assets in all categories are measured at fair value at the time of acquisition and – with the exception of those recognised at fair value through profit or loss – including transaction costs.

The other financial liabilities are measured at amortised cost.

The fair value of stock market listed financial instruments is their market price at the balance sheet date. For financial assets for which there is no active market, the fair value is calculated with the aid of valuation models. This can involve the derivation of fair value from current transactions in similar financial instruments or from present values of future payment streams (discounted cash flow models), or the use of mathematical models.

2.6.5.2. Derivatives

S IMMO Group currently uses derivative financial instruments – interest rate caps and swaps – to reduce the risks attendant on interest rate increases. The derivative financial instruments are measured at fair value. To a limited extent, corresponding adjustments on CVAs (Credit Value Adjustment) and DVAs (Debit Value Adjustment) have been taken into account in the valuation of derivatives. The fair value measurement of derivatives is based on estimates made by external experts.

S IMMO Group's business purpose includes the acquisition and development of properties for rental or subsequent sale with the aim of generating positive net cash flows. Business activities are financed through equity, and also through long-term borrowings in the form of mortgage loans and other financial liabilities. The bulk of the external financing consists of variable-rate borrowings, with interest rates linked to the 3-month or 6-month Euribor as the base rate.

S IMMO Group's fundamental risk management strategy is to hedge the interest rate risk (i.e., the variability of the base rate) using offsetting hedges, in order to ensure fixed payment streams and to make property project forecasts more reliable. The purpose of cash flow hedging at S IMMO Group is to reduce the risk on existing variable-rate loans, future reinvested funds and transactions expected to be very probable in the future (forecast transactions) by using offsetting derivatives. Cash flow hedging arrangements are used for this purpose.

Hedged risk

The hedged interest rate risk is a market interest rate, the Euribor, which is an identifiable component of the interest rate risk on interest-bearing financial liabilities that can be separately assessed.

Hedging instruments

S IMMO Group uses as hedging instruments only derivatives that, because they move in the opposite direction of the underlying transactions, convert the potential changes in cash flows, in particular from increases in interest rates, into fixed payment streams. The hedging instruments used at the moment are interest rate swaps. The effective portion of the change in fair value of these derivatives is recognised not through profit or loss but under other comprehensive income, the ineffective portion is recognised through profit or loss as part of the financing results.

The changes in the valuation of cash flow hedges recognised under equity are transferred to the income statement in the period in which the hedged underlying transaction affects profit or loss or when the requirements for recognition as a cash flow hedge are no longer met. In the financial year 2017, derivative valuation effects of kEUR 13,991 (2016: kEUR 5,921) were reclassified from equity to the income statement according to the provisions of IAS 39.

In order to meet the requirements for hedge accounting, at the time of the derivative transaction S IMMO Group documents the hedging relationship between the hedging instrument and the underlying transaction, the goals of its risk management and the underlying hedging strategy. The effectiveness of the hedge is regularly assessed using both a priori and a posteriori tests.

2.6.6. Impairment of assets

2.6.6.1. Non-financial assets

For properties used by the owner (at present these are hotels) and for other tangible assets and intangible assets where there is evidence of impairment, the recoverable amount is ascertained in accordance with IAS 36. The recoverable amount is the higher of the fair value less costs to sell (net realisable value) and the value in use.

The fair value is the amount that would be obtained by the sale of the asset in an arm's length transaction between knowledgeable, willing and independent parties.

The value in use is the present value of the estimated future payment flows that can be expected from the continued use of an asset and its disposal at the end of its useful life.

If the recoverable amount is less than the book value of the asset, an impairment write-down is applied to the recoverable amount through profit or loss.

The impairment test for hotels is a two-stage process. The book value is first compared with the independent assessment of the hotel's fair value. If the book value exceeds the fair value, the question is then whether the value in use differs substantially from the fair value. If this is not the case, then the book value is written down to correspond to the fair value.

If the impairment subsequently disappears, the impairment loss is reversed through profit or loss, up to the lower of the new recoverable amount or the depreciated original cost of acquisition or construction. The Group had no such reversals of impairment losses in 2017 or the previous year.

2.6.6.2. Financial instruments

S IMMO Group reviews all its financial assets, with the exception of those measured at fair value through profit or loss, at every balance sheet date for any objective indications that any asset or group of assets may have suffered impairment.

For assets recognised in the available-for-sale category (currently, mainly the shares held in listed property holding companies), fluctuations in value, which are not classified as impairment, are recognised in other comprehensive income with no impact on profit or loss. In the event of impairment, a corresponding impairment charge must be recognised in the income statement.

As a result of the disposal of available-for-sale securities, a reclassification from the AFS reserve to the income statement had to be effected by the end of 2017. Recycling of this kind will not be permissible when IFRS 9 becomes effective on 01 January 2018 and instead a reclassification within equity directly to retained earnings will be required.

For debt instruments of all kinds except those measured at fair value through profit or loss, an impairment is recognised if, as a result of one or more events occurring after the initial recognition of the asset, there is objective evidence that S IMMO Group will no longer be in a position to collect the payments relating to the asset. The amount of the impairment is calculated as the difference between the book value of the financial asset and the present value of the future cash flows, calculated using the original rate of interest on the asset. A subsequent disappearance of the factors causing the impairment and a recovery in value entails a reversal of the impairment loss.

Trade receivables

Where there are objective indications that individual receivables cannot be recovered in full, provisions are raised for the amounts expected to be irrecoverable. General provisions for doubtful individual debts are made on the basis of experience.

The outstanding balances are constantly monitored by the responsible asset managers, so that appropriate measures can be taken in good time.

2.6.7. Other assets

Other assets are measured at cost less any impairment losses, which are recognised through profit or loss.

2.6.8. Cash and cash equivalents

Cash and cash equivalents comprise cash and sight deposits together with bank deposits with a maturity of up to three months at the time of the original deposit.

2.6.9. Properties held for sale

Property held for sale is not considered to be investment property within the scope of IAS 40 but is treated as held for sale if the corresponding book value will be realised by sale and not by continuing use. This means that the corresponding long-term assets and disposal groups in their present condition are available for immediate sale and that a sale is very likely. For property to be considered as held for sale, the sale must be concluded within a year of the property being classified as such.

In accordance with IFRS 5, property held for sale is as a general rule measured at the lower of book value and fair value less costs to sell. IFRS 5 provides for an exception with respect to the measurement of properties held as financial investments: They are measured at market value. However, the special disclosure requirements under IFRS 5 are applicable, so that properties held for sale must be shown under current assets.

The Group intended to dispose of a German property at the end of the reporting period (31 December 2017).

2.6.10. Other provisions

Other provisions are made where S IMMO Group has legal or constructive obligations to other parties arising from past events, where it is probable that the obligation will lead to an outflow of resources and where the amount of the obligation can be estimated reliably.

Provisions are made in the amounts representing the best possible estimates of the expense of meeting the obligations. Where the present value of the provision calculated using a market rate of interest differs materially from the nominal value, the present value is recognised.

Appropriate provisions have been made for unresolved legal disputes and other legal proceedings.

A provision is made for onerous contracts (provision for project and transaction risks) when the expected revenues from a contract are exceeded by the unavoidable costs of meeting the obligations under the contract. The amount of the provision is the lower of the cost of withdrawing from the contract and the net cost of completing it. Before separate provision is made for an onerous contract, impairments on assets connected with the contract are recognised.

2.6.11. Taxes

The individual companies in the Group raise liabilities for current tax liabilities.

In accordance with IAS 12, deferred taxes are recognised on the temporary differences between the book value of an asset or liability in the consolidated financial statements and the book value for tax purposes of the Group's subsidiaries. Deferred tax liabilities on the property portfolio have been provided for in full, and even if under appropriate conditions – for example, in the case of a share deal – it would be possible that disposals would be treated as not being subject to taxes on income. Countervailing deferred tax assets on loss carryforwards are recognised to the extent that the management believes they will be realisable. Deferred tax assets on loss carryforwards are as a general rule recognised up to the amounts of deferred tax liabilities. Beyond that limit, active deferred taxes are recognised on the basis of tax planning with a planning horizon of five years. Deferred taxes are calculated using the applicable tax rates at the balance sheet date, or where changes in tax law have already been adopted, at the rates applicable in future.

Deferred tax assets and deferred tax liabilities within a taxable entity are only netted off where this entity has a legally enforceable right to set tax assets and liabilities against each other, and where the deferred taxes relate to taxes on income assessable by the same tax authority on the same tax entity or where there is a right of set-off within a tax group, as in Austria.

2.6.12. Leasing

The determination as to whether an agreement constitutes or contains a lease is based on the economic substance of the agreement at the inception – whether fulfilment of the agreement depends on the use of a given asset and whether the agreement confers a right of use for the asset. Under IAS 17, allocation of the lease to the lessor or lessee depends on where the risks and rewards of ownership lie.

A lease is classified as a finance lease if it substantially transfers all the risks and rewards incident to the ownership of an asset. For finance leases, assets and liabilities are initially recognised at the lower of fair value and the present value of the minimum lease payments. The asset is depreciated on a straight-line basis over the expected useful life or the term of the agreement, if shorter. The minimum lease payments are divided between financing costs and capital repayments. Financing costs must be spread over the lifetime of the lease so as to achieve a constant rate of interest on the outstanding capital balances. Properties from finance leasing are recognised at fair value pursuant to IAS 40.

With operating leases, economic ownership remains with the lessor, and the lease payments are as a general rule divided proportionately over the term of the lease and recognised as expense.

2.6.13. Revenues

2.6.13.1. Rental income

Rental income is recognised in a straight line over the term of the rental agreement. One-time payments and waivers of rent as well as any other kind of rental incentive are spread over the minimum rental (according to SIC 15).

2.6.13.2. Revenues from operating costs

Revenues from operating costs accrue from invoicing operating costs to tenants of portfolio properties and comprise revenues for the invoicing of electricity, the cleaning of buildings and the like. Typically, the composition of operating costs incurred and that can be invoiced varies depending on the type of use and jurisdiction.

2.6.13.3. Revenues from hotel operations

Revenues from hotel operations consist largely of room rental income and catering income. Income is recognised in proportion to the services rendered until the balance sheet date.

2.6.13.4. Income and costs from financial instruments

Income from financial instruments includes interest, dividends and capital gains from the investment of funds and from investments in financial assets, together with reversals of impairment losses. Dividends are recognised at the time the resolution authorising the dividend distribution is passed.

Financial expenses include interest and similar expenses on external borrowings, incidental costs, losses on the disposal of financial assets, impairment losses, current hedging results and exchange rate gains and losses on the valuation of monetary assets and liabilities at the individual company level.

Interest is accrued using the effective interest rate method.

The valuation of derivatives reflects among others gains and losses on the disposal or revaluation of interest caps and swaps, which have not been recognised in equity and are shown in the income statement as part of the financial results.

Where applicable, short-term exchange gains or losses on the valuation of financial instruments are disclosed here.

2.7. Hierarchy of fair value measurement

The following analysis classifies financial instruments measured at fair value on the basis of the method of valuation. A hierarchy consisting of three levels has been defined for this purpose:

Level 1:	Quoted prices for identical assets or liabilities listed on an active market (without adjustment)
Level 2:	Inputs for assets or liabilities that are observable either directly (e.g. prices) or indirectly (e.g. derived from prices) other than Level 1 inputs
Level 3:	Inputs for assets or liabilities not based on observable market data

31 December 2017 in TEUR	Level 1	Level 2	Level 3	Total
Properties held as financial investments
Rental properties	0	0	1,668,405	1,668,405
Properties under development and undeveloped land	0	0	37,100	37,100
Other financial assets
Listed equity instruments	298,560	0	0	298,560
Derivatives	0	1,170	0	1,170
Financial liabilities
Derivatives	0	-17,130	0	-17,130

31 December 2016 in TEUR	Level 1	Level 2	Level 3	Total
Properties held as financial investments
Rental properties	0	0	1,917,303	1,917,303
Properties under development and undeveloped land	0	0	20,801	20,801
Other financial assets
Listed equity instruments	87,437	0	0	87,437
Derivatives	0	2,580	0	2,580
Financial liabilities
Derivatives	0	-30,347	0	-30,347

2.8. Estimation and assumption uncertainties

The preparation of consolidated financial statements in accordance with IFRS requires estimates and assumptions by the management about future developments. These can have a material influence on the recognition and measurement of assets and liabilities, on information about other obligations at the balance sheet date and on disclosure of income and expenses during the financial year.

IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Estimates and underlying assumptions are subject to ongoing review. Actual outcomes may differ from the assumptions and estimates made if developments in the business environment turn out differently than expected. Changes are reflected in profit or loss as soon as the altered circumstances become known, and the assumptions are adjusted accordingly.

The following assumptions entail a not insignificant risk that they may result in a material adjustment of assets and liabilities in the next financial year:

2.8.1. Properties held as financial investments

The calculation of the fair value of properties held as financial investments was mainly based on expert valuations by internationally recognised valuers such as CBRE, Colliers International, EHL and Dr. Heinz Muhr. The valuations were prepared in compliance with International Valuation Standards and the rules of IFRS 13. The values of these properties depend to a significant extent on present estimates of future rental trends and vacancy levels, and on the interest rates used for discounting purposes. Fair values for accounting obtained from external experts were examined separately by KPMG in context of a fairness opinion.

Properties held as financial investments had a book value of kEUR 1,705,505 (31 December 2016: kEUR 1,938,104). A property held as an investment property with a book value of kEUR 6,300 (31 December 2016: kEUR 0) is shown under the assets held for sale because the company plans to sell it in 2018.

2.8.1.1. Valuation methods in connection with properties held as financial investments

The following measurement methods were used in calculating hierarchy level 3 fair values: capitalised earnings method, discounted cash flow method (DCF method), residual value method and sales comparison approach.

The capitalised earnings method uses the following key input factors for the measurement: adjusted sustainable rent, total operating costs, remaining useful life, capitalisation rate and land value.

The discounted cash flow method works with the following key input factors: net rental income, discount rate and capitalisation rate.

The residual value method is based on investment considerations and calculates the residual value based on an earnings value or net capital value derived from discounted cash flow analysis on the assumption that the property is already completed, which remains when the property is sold at the current measurement date, taking account of any outstanding construction, development costs, market financing costs for completion and marketing costs, allowing from an appropriate profit for the developer.

In the sales comparison approach, purchase prices that are actually achieved or achieveable for comparable properties are included as comparative values. Differing characteristics of the properties to be compared are taken into account in the form of premiums or discounts on the value.

Measurement of fair value on the basis of unobservable inputs (hierarchy level 3)

Different valuation methods were used in the various asets classes. In Austria, the fair value of kEUR 379,470 was in the majority of cases calculated using the capitalised earnings method, while in Germany, the fair value of kEUR 765,855 was calculated mainly using the DCF method. In the CEE segment, the DCF method, the capitalised earnings method, the sales comparision approach and the residual value method were used to calculate the fair value of kEUR 560,180.

The significant parameters per segment and valuation method applied are as follows:

	Book value as of 31 December 2017 EUR '000	Valuation method	Input factors	Range 1
Austria	379,470	Capitalised earnings method	Capitalisation rate	3.10% to 6.20%
			Remaining useful life	42 years (weighted average)
Germany	765,855	Discounted cash flow	Capitalisation rate	2.75% to 7.35%
			Discount rate	3.65% to 8.60%
		Residual value method	Capitalisation rate	4.00%
			Construction costs	EUR 1,045.00/m² or 1,569.00/m²
Central Europe	560,180	Discounted cash flow	Capitalisation rate	4.90% to 8.00%
			Discount rate	6.80% to 9.00%
		Capitalised earnings method	Capitalisation rate	4.00% to 8.50%
			Remaining useful life	35 years (weighted average)
		Residual value method	Capitalisation rate	5.00% to 7.75%
			Construction costs	EUR 1,200.00/m² or 1,460.00/m²
		Sales comparison approach	Sales comparison approach	EUR 24.14/m²

1 Across all use types

Overview of the average rental yields¹

in %	31 December 2017	31 December 2016
Austria	5.1	5.0
Germany	4.9	5.1
CEE	8.2	8.2
	6.1	6.2

¹ The ratio between the generated annual rent and the property value. The calculation includes investment properties for which no development potential has currently been identified. With regard to additions in the course of the year, the rent is annualised.

A reduction in the expected annual rentals leads to a reduction in the fair value, as does an increase in discount and capitalisation rates. There are interdependencies between the rates, because these are partly based on market values.

The expert valuations are carried out once a year by independent, professional experts for the purpose of preparing the annual financial statements as of 31 December. The professional experts are provided with the necessary information, such as current rentals, by the company's Asset Management department. The market assumptions and valuation methods used in preparing the expert valuations are agreed with the appointed professional experts.

2.8.1.2. Information on non-observable input factors underlying valuation (Level 3)

The following tables show the sensitivity of the fair value of rented properties held as financial investments to changes in sustainable rental yields and interest rates. There has been significant progress with the construction of an office property in Romania in the financial year compared with the previous year, which is why this property was now included in the sensitivity analysis from 2017. Since the design of the agreement with the general contractors meant the total investment costs are relatively insensitive, the sustainable rent and the interest rate were also viewed as key input factors for this development project.

Change in sustainable rent

	1,512,331	1,702,805	1,883,170	1,717,080	1,917,303	2,119,678
CEE	491,311	557,480	624,940	602,543	682,451	763,878
Germany	679,490	765,855	842,520	595,432	660,044	723,052
Austria	341,530	379,470	415,710	519,105	574,808	632,748
EUR '000	-10%	Output value	+10%	-10%	Output value	+10%
		2017			2016

Change in interest rate

	1,861,666	1,702,805	1,525,507	2,125,560	1,917,303	1,746,837
CEE	619,036	557,480	506,677	759,005	682,451	619,830
Germany	837,510	765,855	664,050	740,652	660,044	594,582
Austria	405,120	379,470	354,780	625,903	574,808	532,425
EUR '000	-10%	Output value	+10%	-10%	Output value	+10%
		2017			.2016

2.8.2. Intangible assets and property, plant and equipment

Estimates of the long-term value of tangible and intangible assets are based on assumptions about the future. The calculation of recoverable amounts for the purpose of impairment tests is based on several assumptions, for example, about future net cash flows and discount rates. The book value of intangible assets amounted to kEUR 230 (31 December 2016: kEUR 193), that of other noncurrent assets to kEUR 4,655 (31 December 2016: kEUR 6,340). Owner-operated properties had a book value of kEUR 127,875 (31 December 2016: kEUR 125,768).

2.8.3. Financial instruments

In estimating the value of financial instruments (in particular, derivatives) for which no active market exists, alternative valuation methods based on investment mathematics are employed. The parameters on which estimates of fair value are based depend in part on assumptions about the future. The book values of financial instruments are detailed in note 5.1.

2.8.3.1. Valuation of derivatives

S IMMO Group's derivative financial instruments are measured at fair value. The fair values of the swaps or caps are determined using a discounted cash flow method according to IFRS 13. The future payment flows are determined by means of interest modelling using the Hull White one-factor model, specifically using a Monte Carlo simulation. The model is calibrated using swaption and caplet volatilities. The material input parameters are determined for the reporting date. They consist of the specified euro interest yield curve, historical Euribor fixings and caplet and swaption volatility matrices. Market data are obtained from Thomson Reuters and Bloomberg.

For the determination of credit value adjustments/debit value adjustments (CVA/DVA) credit spreads were first defined to estimate the probability of default. Then, the share of the default risk was estimated on the basis of theoretical considerations and extrapolated for multiple maturities using an approximate formula to generate a CDS spread curve.

2.8.3.2. Derivatives – sensitivity analysis

The fair values of the derivatives change as follows when the interest rates shift by +100 BPS or -50 BPS:

Total	609,035	-15,960	30,679
Caps	195,000	849	1,297	152.80
Swaps	414,035	-16,809	29,382	174.80
+100 BPS EUR '000	Nominal	Fair value before interest rates shift	Change EUR '000	Change in %
	31 December 2017

	31 December 2017
-50 BPS EUR '000	Nominal	Fair value before interest rates shift	Change EUR '000	Change in %
Swaps	414,035	-16,809	-14,096	-83.86
Caps	195,000	849	-347	-40.85
Total	609,035	-15,960	-14,443

	31 December 2016
+100 BPS EUR '000	Nominal	Fair value before interest rates shift	Change EUR '000	Change in %
Swaps	508,997	-28,754	33,258	115.66
Caps	227,460	988	1,495	151.40
Summe	736,457	-27,766	34,753

	31 December 2016
-50 BPS EUR '000	Nominal	Fair value before interest rates shift	Change EUR '000	Change in %
Swaps	508,997	-28,754	-17,502	-60.87
Caps	227,460	988	-490	-49.58
Summe	736,457	-27,766	-17,992

2.8.4. Deferred taxes

The recognition of deferred tax assets for tax loss carryforwards is based on the assumption that sufficient taxable income will be available in the future to enable existing loss carryforwards to be utilised. Deferred tax assets for tax loss carryforwards of kEUR 10,989 (31 December 2016: kEUR 31,495) have been recognised. Further information on deferred taxes can be found in note 3.1.16.

2.8.5. Post-employment benefit obligations

The actuarial computation of entitlements to pension and severance benefits and long-service bonuses requires assumptions about various parameters. The following tables show the sensitivity of the significant assumptions:

Change in interest rate

		2017			2016
EUR '000	-0.30%	Output value	+0.30%	-0.30%	Output value	+0.30%
Pensions	1,784	1,708	1,636	1,605	1,533	1,467
Severance payments	962	948	934	927	915	903
Long-servie bonuses	385	376	368	342	335	328

Change in valorisation

		2017			2016
EUR '000	-0.20%	Output value	+0.20%	-0.20%	Output value	+0.20%
Pensions	1,706	1,708	1,710	1,521	1,533	1,547
Severance payments	940	948	956	907	915	922
Long-servie bonuses	372	376	381	331	335	339

2.8.6. Obligations arising from liabilities not included in the consolidated statement of financial position

Obligations arising from sureties, guarantees and other liabilities not included in the consolidated statement of financial position are regularly reviewed to ensure that they are not required to be recognised and included.

3. Notes on the consolidated statement of financial position and consolidated income statement

3.1. Statement of financial position

3.1.1. Properties held as financial investments

EUR '000	Rental properties	Properties under development and undeveloped land
As of 01 January 2016	1,826,403	16,201
Additions	117,340	11,250
Disposals	0	-5,305
Other changes	-245	0
Changes in fair value (reali sed through profit or loss)	195,380	-1,345
Reclassifications as proper ties held for sale	-221,575	0
As of 31 December 2016	1,917,303	20,801
whereof pledged as security	1,806,978	0
Additions	90,941	17,168
Disposals	-1,741	0
Other changes	-2,148	0
Changes in fair value (reali sed through profit or loss)	128,316	-869
Reclassifications as proper ties held for sale	-464,266	0
As of 31 December 2017	1,668,405	37,100
whereof pledged as security	1,606,715	31,670

The value of the other changes in the amount of kEUR -2,148 (31 December 2016: kEUR -245) consists primarily of retroactive acquisition cost reductions.

Additions by operating segments were as follows:

Rental properties

EUR '000	31 December 2017	31 December 2016
Austria	3,812	3,301
Germany	73,051	96,640
CEE	14,078	17,399
	90,941	117,340

Properties under development and undeveloped land

EUR '000	31 December 2017	31 December 2016
Austria	0	0
Germany	0	0
CEE	17,168	11,250
	17,168	11,250

Consisting of:

Rental properties

EUR '000	31 December 2017	31 December 2016
Austria	379,470	574,808
Germany	765,855	660,044
CEE	523,080	682,451
	1,668,405	1,917,303

The measurement of the fair value of rental properties totalling kEUR 1,668,405 in the financial year 2017 was based on hierarchy level 3.

Properties under development and undeveloped land

	37,100	20,801
CEE	37,100	20,801
Germany	0	0
Austria	0	0
EUR '000	31 December 2017	31 December 2016

The measurement of the fair value of development projects and undeveloped land totalling kEUR 37,100 (2016: kEUR 20,801) in the financial year 2017 was based on hierarchy level 3. This relates to land reserves and projects for which significant construction or project development measures are already in progress as of the reporting date and for which generating rental income is already of only minor significance.

Purchasing obligations for properties in the amount of kEUR 55,355 result from the purchasing contracts concluded in the financial year 2017.

S IMMO capitalises borrowing costs that serve the purpose of acquiring, purchasing or manufacturing a qualifying asset also if the qualifying asset is measured at fair value. Capitalising borrowing costs in accordance with IAS 23 was immaterial in the 2017 financial year, as in the 2016 financial year.

3.1.2. Owner-operated properties, other plant and equipment

and intangible assets

Changes in the acquisition costs of owner-operated properties, other plant and equipment and intangible assets were as follows:

EUR '000	Owner-operated properties	Other plant and equipment	Intangible assets	Total
Costs of acquisition as of 01 January 2016	183,440	14,540	745	198,725
Currency translation	0	195	35	230
Additions	14,091	2,898	89	17,078
Disposals	0	-1,313	-2	-1,315
As of 31 December 2016	197,531	16,320	867	214,718
Currency translation	0	-17	-3	-20
Additions	9,794	653	142	10,589
Disposals	0	-3,493	-43	-3,536
As of 31 December 2017	207,325	13,463	963	221,751

The development in the accumulated depreciation and amortisation of owner-operated properties, other plant and equipment and intangible assets was as follows:

	Owner-operated	Other plant and	Intangible
EUR '000	properties	equipment	assets	Total
Accumulated depreciation and amortisation as of 01 January 2016	65,396	9,375	535	75,306
Currency translation	0	189	33	222
Depreciation and amortisation	6,367	1,348	108	7,823
Disposals	0	-932	-2	-934
As of 31 December 2016	71,763	9,980	674	82,417
Currency translation	0	-16	-3	-19
Depreciation and amortisation	7,687	1,209	103	8,999
Disposals	0	-2,365	-41	-2,406
As of 31 December 2017	79,450	8,808	733	88,991
Book value as of 01 January 2016	118,044	5,165	210	123,419
Book value as of 31 December 2016	125,768	6,340	193	132,301
Book value as of 31 December 2017	127,875	4,655	230	132,760

3.1.3. Interests in companies measured at equity

The book value of the companies measured at equity came to kEUR 12,237 as of 31 December 2017 (31 December 2016: kEUR 10,241). The companies recognised according to the equity method are shown in the table depicting the scope of consolidation in section 2.2. These are mostly companies that develop properties.

The companies recognised according to the equity method were valued as follows on the reporting date:

Associated companies

EUR '000	31 December 2017	of which AT	of which CEE	31 December 2016	of which AT	of which CEE
Non-current assets	83,578	49,823	33,755	77,292	42,708	34,584
Current assets	11,205	9,886	1,319	5,574	5,506	68
Non-current liabilities	71,700	41,631	30,069	67,245	36,738	30,507
Current liabilities	1,566	1,253	313	2,073	2,039	34
Net assets	21,517	16,825	4,692	13,548	9,437	4,111
Group interest in net assets	6,865	4,660	2,205	4,181	2,249	1,932

EUR '000	2017	of which AT	of which CEE	2016	of which AT	of which CEE
Revenues	5,252	2,429	2,823	5,242	2,420	2,822
Net income for the period	11,274	10,693	581	-1,168	-1,958	790
Group share of the profit for the period	3,815	3,542	273	-533	-904	371

Joint ventures

EUR '000	31 December 2017	of which CEE	31 December 2016	of which CEE
Non-current assets	29,411	29,411	7,965	7,965
Current assets	1,086	1,086	3,063	3,063
Non-current liabilities	14,405	14,405	101	101
Current liabilities	5,894	5,894	1,302	1,302
Net assets	10,198	10,198	9,625	9,625
Group interest in net assets	5,201	5,201	4,909	4,909

EUR '000	2017	of which CEE	2016	of which CEE
Revenues	0	0	0	0
Net income for the period	574	574	-385	-385
Group share of the profit for the period	293	293	-197	-197

Companies measured at equity:

Withdrawals/dividends	-50	-398
Disposals	-1,259	0
Additions	16	5,233
Current losses	-6	-1,387
Current profits	3,295	1,681
As of 01 January	10,241	5,112
EUR '000	2017	2016

In the financial year 2017, there were proportional losses from companies included at equity amounting to kEUR 169 (2016: kEUR 1,153) that were not recognised. A cumulative total of kEUR 171 (2016: kEUR 1,153) was not realised as losses for companies measured at equity.

Loans to associated companies amounted to kEUR 10,946 (2016: kEUR 10,372) as of 31 December 2017.

3.1.4. Group interests and other financial assets

The book value of other non-current financial assets largely correspond to their fair values. Other financial assets mainly include shares in the companies Immofinanz and CA Immo that are accounted for as available-for-sale securities according to the rules of IAS 39. The valuation of available-for-sale financial instruments reported in the consolidated statement of comprehensive income relates entirely to these equity instruments. Dividends of kEUR 4,302 were detected in the reporting period effective in the financial results (2016: kEUR 779).

3.1.5. Inventories

Inventories exist to a minor extent and are measured at cost of acquisition and construction. The net realisable value of inventories does not exceed their book values.

3.1.6. Trade receivables and other accounts receivable

Trade receivables include rents receivable from tenants less any specific provisions required. These consist mainly of provisions against receivables in CEE in the amount of kEUR 6,170 (2016: kEUR 12,640). As in 2016, there were no other impairments that had to be recognised. There is not a concentration of credit risk because the Group generally has a large number of customers (particularly tenants) in the countries in which it operates.

The book value of current accounts receivable corresponds to the time value in essence.

3.1.6.1. Changes in provisions

Provisions for trade receivables developed as follows:

EUR '000	2017	2016
As of 01 January	13,597	17,400
Utilisation	-46	-178
Reversal	-7,088	-4,657
Increase	728	1,032
As of 31 December	7,191	13,597

Potential tenants are generally subject to a credit check. Tenants in the shopping centres and in the properties let as hotels include internationally active chains.

3.1.6.2. Receivables – maturities

The non-adjusted but due claims have the following maturities:

	2017		2016
EUR '000	Trade receivables	Other financial assets	Trade receivables	Other financial assets
Less than 3 months past due	1,095	386	1,346	134
3 to 12 months past due	325	0	135	0
Over 1 year past due	30	0	158	0
Total	1,450	386	1,639	134

3.1.6.3. Other current financial assets

EUR '000	31 December 2017	31 December 2016
Property management agent clearing accounts	1,677	1,201
Receivables from disposals of proper ties and property holding companies	1,244	1,080
Deposits	738	724
Finance receivables	116	92
Other assets	2,832	1,144
	6,607	4,241

3.1.7. Other assets

The other assets of kEUR 12,239 (31 December 2016: kEUR 9,616) consisted mainly of prepaid expenses, tax receivables and prepayments.

3.1.8. Cash and cash equivalents

EUR '000	31 December 2017	31 December 2016
Bank balances	73,114	65,726
Cash in hand	276	303
	73,390	66,029

3.1.9. Properties held for sale

Properties are held for sale, if it is Management's intention to dispose of the property in the near future. It is intended to dispose to the deadline of one property located in Germany.

EUR '000	Austria	Germany	CEE	Total
As of
01 January 2016	0	0	0	0
Reclassification	0	221,575	0	221,575
Disposals	0	-221,575	0	-221,575
As of
31 December 2016	0	0	0	0
Reclassification	234,322	37,244	192,700	464,266
Disposals	-234,322	-30,944	-192,700	-457,966
As of
31 December 2017	0	6,300	0	6,300

3.1.10. Equity

The nominal capital of the Group's parent company amounted to kEUR 243,144 (2016: kEUR 243,144) and is fully paid up. In the financial year 2017, no shares were cancelled.

As of 31 December 2017, S IMMO held 715,424 treasury shares (2016: 715,424 shares).

Details of share capital

	240,544	240,544
Treasury shares (nominal)	-2,600	-2,600
Total share capital	243,144	243,144
EUR '000	2017	2016

Changes in number of shares

Issued share capital as of 31 December	66,201,755	66,201,755
Treasury shares sold	0	0
Issue of new shares	0	0
Repurchase of treasury shares	0	-525,421
Number of shares as of 01 January	66,201,755	66,727,176
	2017	2016

The shares are listed in the Prime Market segment of the Vienna Stock Exchange. S IMMO was included in the Austrian ATX benchmark index for the first time on 18 September 2017.

The nominal share capital is divided into 66,917,179 ordinary bearer shares that are fully paid up and have no par value.

The bearer shares confer on the shareholders the usual rights provided for under the Austrian Stock Corporation Act (AktG). These include the right of a dividend payment approved by the Annual General Meeting and the right to vote at the Annual General Meeting.

The capital reserves of kEUR 68,832 (31 December 2016: kEUR 68,832) are restricted reserves in the meaning of section 229 (5) Austrian Commercial Code (UGB).

The other reserves of kEUR 629,608 (31 December 2016: kEUR 525,037) shown in the statement of changes in consolidated equity consist mainly of reversed capital reserves together with accumulated retained earnings. The foreign currency reserve of kEUR -17,200 (31 December 2016: kEUR -17,365) is made up of the currency translation differences in accordance with IAS 21. The hedge accounting reserve of kEUR -6,022 (31 December 2016: kEUR -17,585) comprises the measurement differences on cash flow hedges recognised under equity. The AFS reserve of kEUR 25,053 (31 December 2016: kEUR -3,858) relates to the equity instruments described in note 3.1.4. and results from the revaluation to fair value.

For the financial year 2017, the company intends to propose distribution of a dividend of EUR 0.40 per share entitled to dividends at the next Annual General Meeting.

Additional information on capital management

S IMMO Group manages its capital with the aim of maximising its returns by optimising the relationship between equity and debt. At the same time, care is taken to ensure that all Group companies can operate on a going concern basis.

The Group's capital consists of bank and financial liabilities including bonds, equity provided by the shareholders of the parent company and subordinated participating certificates, which are described in more detail in note 3.1.12. There are no provisions in the articles of incorporation concerning the capital structure.

The equity attributable to the shareholders of the parent company consists of the shares in circulation, capital and other reserves and the consolidated net profit, as shown in the statement of changes in consolidated equity.

The capital structure is constantly monitored, and the costs of capital and the risks associated with each type of capital are taken into account. The Group will continue to optimise the capital structure by issuing and repaying debt and issuing and repurchasing shares as appropriate.

The Group is not managed according to individual parameters. However, the equity ratio is not allowed to fall significantly below 30% over the long term.

3.1.11. Non-controlling interests

.

The minority interests of kEUR 3,611 (31 December 2016: kEUR 28,737) primarily relate to Einkaufscenter Sofia G.m.b.H. & Co KG (35% interest). The change in the amount of kEUR -30,756 (2016: kEUR -596) shown in the statement of changes in consolidated equity are due primarily to distributions of revenues from the sale of the Serdika property to non-controlling interests.

3.1.12. Financial liabilities

Financial liabilities are as follows:

			Changes in cash and cash equivalents		Non-cash changes
in kEUR	01 January 2017	New loans/re payments	Change in the scope of conso lidation	Changes in market value	Other non-cash changes	31 December 2017
Other non-current financial liabilities	770,602	15,749	-96,127	-4,366	731	686,589
Other current financial liabilities	184,096	-71,718	-4,725	0	5,745	113,398
Subtotal other non-current and current financial liabilities	954,698	-55,969	-100,852	-4,366	6,476	799,987
of which recognised in cash flow from financing activities		-50,804	0	0	0
Bonds	287,221	0	0	0	297	287,518
of which recognised in cash flow from financing activities		0	0	0	0
Subordinated participating certificate capital	58,131	-7,378	0	0	5,964	56,717
of which recognised in cash flow from financing activities		-7,580 1	0	0	0
Total	1,300,050	-63,347	-100,852	-4,366	12,737	1,144,222

1 Repurchase price differs from participating certificate liability

3.1.13. Subordinated participating certificate capital

The terms of the agreement for S IMMO INVEST participating certificates were changed retroactively with effect from 01 January 2007 and the S IMMO INVEST Participating Certificates Fund was dissolved (resolution of the meeting of the holders of the participating certificates on 11 June 2007 and resolution of the Annual General Meeting on 12 June 2007).

Under the amended agreement, the holders of the participating certificates receive an annual income entitlement (interest) calculated as follows:

(Participating certificate capital + profit brought * forward)

Consolidated EBIT Average property portfolio (not including development projects) To the extent that the interest under the terms of the Participating Certificates Agreement is not paid out, it is added to the profit carried forward into the next year.

For the financial year 2017, the profit for the year was kEUR 4,858 (2016: kEUR 6,735).

As of 31 December 2017, there were 550,781 participating certificates in circulation. The total entitlements of participating certificate holders as of that date were EUR 102.98 (2016: EUR 96.15) per certificate, which break down as follows:

EUR '000	Participating certificate capital	Profit brought forward	Profit for the period	Share of undisclosed reserves on property portfolio	Total
Participating certificates capital 01 January 2017	43,937			1,133	45,070
Profit brought forward 01 January 2017		6,326			6,326
Income entitlements of participating certificate holders from 2016			6,735		6,735
Distribution 04 May 2017			-2,400		-2,400
Change in profit brought forward pursuant to section 5 (6), Participating Certificates Agreement		4,335	-4,335		0
Repurchase and retirement of 53.821 participating certificates	-3,912	-966		-100	-4,978
Income entitlements of participating certificate holders			4,858		4,858
Allocation of undisclosed reserves on property portfolio				1,106	1,106
Participating certificates capital as of 31 December 2017	40,025	9,695	4,858	2,138	56,717
Per participating certificate (EUR)	72.67	17.60	8.82	3.88	102.98

Figures of 2016:

Per participating certificate (EUR)	72.67	10.47	11.14	1.87	96.15
Participating certificates capital as of 31 December 2016	43,937	6,326	6,735	1,133	58,131
Allocation of undisclosed reserves on property portfolio				176	176
Income entitlements of participating certificate holders			6,735		6,735
Repurchase and retirement of 26,177 participating certificates	-1,902	-368		-41	-2,311
Change in profit brought forward pursuant to section 5 (6), Participating Certificates Agreement		2,023	-2,023		0
Distribution 25 May 2016			-2,429		-2,429
Income entitlements of participating certificate holders from 2015			4,452		4,452
Profit brought forward 01 January 2016		4,671			4,671
Participating certificates capital 01 January 2016	45,839			998	46,837
EUR '000	Participating certificate capital	Profit brought forward	Profit for the period	Share of undisclosed reserves on property portfolio	Total

The participating certificates had an original term until 31 December 2029. With effect from 31 December 2017, the terms of the participating certificate agreements provide for a cancellation option both for the holders and for the company.

In the second quarter of 2017, S IMMO exercised this cancellation right and cancelled all participating certificates it had issued effective 31 December 2017. As a result, there was a reallocation from non-current liabilities to current liabilities in the consolidated financial statements.

In calculating the participating certificate liability as of 31 December 2017, the hidden reserves as defined in the terms of the Participating Certificates Agreement were calculated for the last time. The income entitlements calculated in the financial year 2017 will probably be paid out together with the repayment of the participating certificate capital.

3.1.14. Issued bonds

In June 2014, S IMMO AG issued a bond (ISIN AT0000A177D2) with a total nominal value of kEUR 89,739.5. The bond is divided into 179,479 units with a nominal value of EUR 500 each, and was issued in exchange for participating certificates. At the beginning of October 2014, S IMMO AG issued a bond (ISIN AT0000A19SB5) with a total nominal value of kEUR 100,000 divided into 200,000 shares with a nominal value of EUR 500 each.

In April 2015, S IMMO AG issued two more bonds. The bond with the ISIN AT0000A1DBM5 followed a voluntary public offer pursuant to section 4 et seqq. Austrian Takeover Act (ÜbG) issued in March 2015 to the holders of the S IMMO INVEST participating certificates with the ISIN AT0000795737 and the ISIN AT0000630694 for the purchase of these participating certificates by way of an alternative exchange and cash offer. Also in April 2015, S IMMO AG issued a further bond (ISIN AT0000A1DWK5) with a total nominal value of kEUR 65,000 divided into 130,000 shares with a nominal value of EUR 500 each.

The following table shows key data of the issued corporate bonds:

ISIN	Total nominal value EUR '000	Coupon	Effective interest rate	Maturity	Market values 1
AT0000A177D2	89,739.5	4.50%	4.66%	16 June 2021	111.10
AT0000A19SB5	100,000	3.00%	3.13%	02 October 2019	104.33
AT0000A1DBM5	33,993.5	3.25%	3.36%	08 April 2025	108.50
AT0000A1DWK5	65,000	3.25%	3.31%	20 April 2027	110.60

1 The market values are based on the most recent transactions before 31 December 2017.

All of the bonds are listed in the Corporates Prime segment of the Vienna Stock Exchange. The market value of the bond liabilities as of 31 December 2017 is kEUR 312,804 (31 December 2016: kEUR 311,423).

3.1.15. Provisions

The non-current provisions developed as follows:

EUR '000	As of 01 ­January 2017	Accumulation	Reclassification	Reversal	Increased	As of 31 December 2017
Employee provisions	2,143	0	0	0	191	2,334
	2,143	0	0	0	191	2,334

The employee provisions as of 31 December 2017 include provisions for pension entitlements (kEUR 1,010; 31 December 2016: kEUR 893), provisions for severance benefits (kEUR 948; 31 December 2016: kEUR 915) and provisions for long-service entitlements (kEUR 376; 31 December 2016: kEUR 335). The following parameters were taken as a basis for the actuarial calculation:

	31 December 2017	31 December 2016
Actuarial interest rate	0.30% to 1.50%	1.00% to 1.70%
Expected raise in salaries	1.00% to 2.58%	1.00% to 2.58%
Blanket fluctuation allowance	0.00% to 26.10%	7.00% to 26.10%

Please refer to section 2.8.5. of the notes for information about the sensitivity of assumptions for the calculation of post-employment, termination and anniversary benefits.

The present values of pension, severance and long-service entitlements developed as follows:

EUR '000	Pension	Severance payment	Anniversary
Present value of obligation at 01 January 2016	1,421	706	484
Current service costs	66	21	84
Interest expense	35	8	8
Payments	0	-92	-21
Remeasurement of benefit obligations	11	272	-220
Present value of obligation on 31 December 2016	1,533	915	335
Plan assets on 31 December 2016	640	0	0
Provisions on 31 December 2016	893	915	335
Present value of obligation at 01 January 2017	1,533	915	335
Current service costs	68	20	32
Interest expense	25	11	5
Payments	0	-163	-29
Remeasurement of benefit obligations	82	165	33
Present value of obligation on 31 December 2017	1,708	948	376
Plan assets on 31 December 2017	698	0	0
Provisions on 31 December 2017	1,010	948	376

The obligation to form a provision for severance benefits is based on labour law. For persons whose employment started before 01 January 2003 in Austria, S IMMO Group is required under the statutory provisions to make a one-time severance payment to any employee whose employment is terminated by the employer or who reaches the age of retirement while employed. The benefit entitlements are dependent on the number of years of service and the level of remuneration at the time the entitlement arises, and amount to between two and 12 months' salary. The pension obligations shown on the balance sheet date relate to current staff. Payments for Group employees are made to an external pension fund. The plan assets resulting from these contributions amounts to about kEUR 698 as of 31 December 2017 (31 December 2016: kEUR 640).

The current provisions developed in the financial year 2017 as follows:

EUR '000	As of 01 January 2017	Reclassification	Reversal	Utilised	Increased	As of 31 December 2017
Other provisions	162	-13	-8	-144	3	0

3.1.16. Taxes on income

3.1.16.1. Current and deferred taxes on income

Tax expense was made up as follows:

	-27,278	-12,148
Deferred taxes	-18,783	-8,335
Current taxes	-8,495	-3,813
EUR '000	2017	2016

Taxes on income comprise income tax on the taxable income of the individual companies included in consolidation for the financial year, adjustments to prior years' tax and changes in deferred taxes.

The reconciliation of income tax at the standard rate to the income tax disclosed in the financial statements is as follows:

Effective tax rate	16.97%	5.60%
Tax expense as disclosed	-27,278	-12,148
Increases relating to non-deductible expenses	-2,219	-4,237
Decreases relating to non-taxable income	6,358	3,121
Taxes from previous years	-1,657	1,735
One-off effects of sales	-953	23,558
Effects of differing foreign tax rates	11,380	17,793
Income tax expense at the standard Austrian income tax rate of 25%	-40,187	-54,118
Net income before tax	160,748	216,471
EUR '000	01–12 / 2017	01–12 / 2016

The reconciliation item 'One-off effects of sales' in the previous year relates to the reversal of deferred taxes that did not take effect in the sales process; in the financial year 2017, the item resulted from the sale of the Serdika property.

3.1.16.2. Deferred tax liabilities

In accordance with IAS 12, the provision for deferred taxation is calculated using the balance sheet liability method: Deferred tax must be provided for all temporary differences between the values for balance sheet purposes in the IFRS consolidated statement of financial position and the current values for tax purposes for the individual companies. Temporary differences can be either:

taxable temporary differences, which will result in taxable amounts in the calculation of taxable income or tax loss in future periods when the book value of the asset is realised or the liability is settled, or

deductible temporary differences, which will result in tax deductible amounts in the calculation of taxable income or tax loss in future periods when the book value of the asset is realised or the liability is settled.

As a general principle, a deferred tax asset or liability must be recognised for all taxable temporary differences. There are exceptions for the recognition of goodwill in an initial consolidation or the initial recognition of an asset or liability in a business transaction which is not a business combination and which at the time of the transaction does not affect the profit or loss either under IFRS or for tax purposes.

Temporary differences between values in the IFRS consolidated statement of financial position and the corresponding values for tax purposes had the following effects on deferred taxes as shown in the consolidated statement of financial position:

	2017		2016
EUR '000	Assets	Liabilities	Assets	Liabilities
Properties	2,106	-139,575	5,684	-143,556
Financial instruments	3,977	-9,607	5,993	0
Other items	1,193	-1,934	2,155	-1,609
Tax loss carryforward	10,989		31,495	0
Subtotal	18,266	-151,116	45,327	-145,165
Netting	-15,989	15,989	-39,520	39,520
Deferred tax assets (+)/liabilities (-)	2,277	-135.128	5,807	-105,645

Of these totals, deferred tax assets of kEUR 1,663 (2016: kEUR 5,039) from derivatives valuation were recognised under other comprehensive income. No deferred tax assets have been recognised for tax loss carryforwards totalling kEUR 62,389 (31 December 2016: kEUR 95,940).

In accordance with IAS 12.39, no deferred taxes were recognised for temporary differences relating to interests in affiliated companies, joint ventures and associated companies, as the profits accrued at subsidiaries remain invested indefinitely or are not subject to taxation on disposal.

Assuming that the fair values of the properties were to change uniformly by +/-10% across the portfolio, the deferred property taxes would change as follows given identical book values for tax purposes:

EUR '000	+10%	Output value for deferred taxes in 2017(offset)	-10%	+10%	Output value for deferred taxes in 2016 (offset)	-10%
Deferred taxes on properties	168,970	137,469	108,333	172,633	137,872	103,297

3.1.16.3. Measurement

Deferred taxes are calculated on the basis of the tax rates in force or expected to apply in the relevant countries at the time of realisation. Changes in the tax legislation in force or approved at the balance sheet date are taken into account. The tax rates used in calculating deferred taxes were as follows:

	Applicable tax rate in 2018	Applicable tax rate in 2017
Austria	25.00%	25.00%
Germany	15.83%	15.83%
Czech Republic	19.00%	19.00%
Slovakia	21.00%	21.00%
Hungary	9.00%	9.00%
Croatia	18.00%	18.00%
Romania	16.00%	16.00%
Bulgaria	10.00%	10.00%

3.2. Income statement

3.2.1. Rental income and revenues from operating costs an revenues from hotel operations

	112,020	118,174
Hotel	5,099	4,781
Retail	43,535	45,741
Residential property	22,181	24,247
Office	41,205	43,405
Rental income EUR '000	2017	2016

3.2.3. Gains on property disposals

EUR '000	2017	2016
Income from property disposals
Properties held as financial investments	1,741	2,564
Properties held for sale	468,510	225,950
Inventories	0	1,368
	470,251	229,882
Book value of property disposals
Properties held as financial investments	-1,741	-2,314
Properties held for sale	-458,169	-221,603
Inventories	0	-832
	-459,910	-224,749
Gains on property disposals
Properties held as financial investments	0	250
Properties held for sale	10,341	4,347
Inventories	0	536
	10,341	5,133

The rental income and revenues from operating costs result almost entirely from investment properties. The revenues from hotel operations amount to kEUR 45,966 (2016: kEUR 42,923).

3.2.2. Operating costs and expenses from properties and hotel operations

The expenses presented in the following table are almost exclusively expenses related to investment properties.

	-59,877	-64,152
Other	-5,092	-4,345
Commissions	-1,519	-2,562
depreciation and amortisation and loss allowance	1,099	-710
Maintenance expenses	-13,781	-14,492
Operating costs	-40,584	-42,043
EUR '000	2017	2016

Expenses of kEUR 165 were attributable to properties not yet generating income (2016: kEUR 167).

The expenses of hotel operations are largely made up of expenses for food, beverages, catering supplies, hotel rooms, licences and management fees, maintenance, operating costs, commissions, personnel expenses and advertising.

The two office buildings in Vienna's Viertel Zwei, the Serdika Center shopping centre and the Serdika Offices office building in Bulgaria, two properties in Berlin and a plot of land in Austria were sold in the 2017 financial year. Apart from the properties in Berlin, all sales were executed in the form of share deals or as sale of a business. In the course of this transaction, assets other than properties and liabilities were also transferred. The remuneration for these sales (excluding Germany) completely consisted of cash and in total amounted to EUR 339.2m.

The properties held for sale include properties that were recognised as held for sale in the interim financial reports.

3.2.4. Management expenses

Management expenses are expenses not directly attributable to properties; they were made up as follows:

Other taxes and duties	-640	-899
relations	-1,298	-1,620
Corporate communications and investor
Servicing fees and administration costs	-355	-655
Legal, audit, consulting and estimated costs	-4,310	-3,365
Staff costs	-8,796	-8,916
EUR '000	2017	2016

Fees for the Group's auditor for 2017 totalled kEUR 237 (2015: kEUR 252). This amount is divided into the following fields of activity:

	237	252
Other consultation services	0	0
Tax consultation services	0	0
Other audit-related services	174	194
Audit of the consolidated financial statements	63	58
EUR '000	2017	2016

The average number of employees in 2017 was 577 (2016: 575), including hotel staff. Personnel expenses for the hotels are disclosed under hotel operations.

The personnel expenses disclosed here are salaries of the Group's employees other than the hotel staff. The amount also includes performance-related bonuses paid to certain employees under individual agreements.

Defined contribution plans

As required by law, S IMMO Group pays 1.53% of the relevant monthly salaries into an employees' severance pay and pension fund for all employees who joined the Group after 31 December 2002. Personnel expenses included contributions of kEUR 58 (2016: kEUR 56) paid into the fund. For other defined contribution plans, kEUR 125 (2016: kEUR 116) were recognised in profit or loss.

3.2.5. Depreciation and amortisation

This item comprises and depreciation and amortisation and impairments on owner-operated properties, other plant and equipment, and intangible assets. Depreciation and amortisation were made up as follows:

	-8,999	-7,823
Intangible assets	-103	-108
Other plant and equipment	-1,209	-1,348
Owner-operated properties	-7,687	-6,367
EUR '000	2017	2016

3.2.6. Results from property valuation

Gains and losses on valuation include all increases and decreases in value on properties held as financial investments, and were made up as follows:

	127,592	194,035
Others	131	130
Reductions	-13,848	-11,073
Increases	141,309	204,978
Changes in fair value
EUR '000	2017	2016

In the reporting period, other operating income from property valuations consisted of the change in provisions for project and transaction risks and building cost settlements.

The split between valuations attributable to properties sold in the financial year and valuations for properties still held in the portfolio as of the reporting date is as follows:

	127,592	194,035
Properties sold	43,981	50,430
Properties held for sale	2,610	0
Properties held in the portfolio	81,001	143,605
EUR '000	2017	2016

Gains and losses on valuation break down by region as follows:

	127,592	194,035
CEE	20,486	19,170
Germany	70,005	136,698
Austria	37,101	38,167
EUR '000	2017	2016

3.2.7. Financing result

	-41,437	-55,297
Other financing and interest income	1,256	1,709
Results from companies measured at equity	3,597	292
Income from equity investments	4,763	981
Bank interest revenue	3	30
Other financing and interest expenses	-1,453	-1,761
Result from the repurchase and collection of participating certificates	-203	49
Bond interest	-10,553	-10,541
Result from foreign exchange differences	-584	-584
Effects arising from hedge accounting and the measurement of derivatives through profit or loss	-14,234	-16,407
Bank interest expense (incl. derivatives accounted for)	-24,029	-29,065
EUR '000	2017	2016

3.2.8. Earnings per share

The earnings per share ratio compares the consolidated net profit to the average number of shares in circulation during the year.

		2017	2016
Own share in consolidated net profit	EUR '000	130,091	198,459
Average number of shares in issue	Number	66,201,755	66,645,014
Basic earnings	EUR	1.97	2.98
Diluted earnings	EUR	1.97	2.98

Diluted and basic earnings per share are the same, since there are no potentially dilutive financial instruments in issue.

4. Operating segments

An operating segment is defined as having the following characteristics:

It engages in business activities in which it may earn revenue and incur expenses.

Its operating results are reported regularly to the enterprise's chief operating decision maker, who uses the information to allocate resources to it and to review its performance.

Separate financial information is available for the segment.

Based on these characteristics, segment reporting occurs by region at S IMMO Group. Since 01 January 2017, the assessment and analysis of the regional structure has followed the new strategic direction, which differentiates between Austria, Germany and CEE. The new approach manifested itself in the disposal of a key portion of the properties in Bulgaria among other things.

The regions are as follows:

Austria: This operating segment includes all of the Group's Austrian subsidiaries; apart from those with property in Germany.

Germany: The Germany operating segment includes the German subsidiaries and also the subsidiaries in Denmark, which held properties in Germany up until 31 December 2016, and the Austrian companies, which hold properties solely in Germany.

CEE: The CEE segment includes the subsidiaries in Slovakia, the Czech Republic, Hungary, Bulgaria, Croatia and Romania.

The segment reporting is based on the internal reporting system for management purposes.

Each segment is operationally independent of the others, since each must take the local market and business environment into account. The Group's CEO has been nominated as the chief operating decision maker with responsibility for segment operations. He is responsible for the allocation of resources to the individual segments and for reviewing their performance. Quarterly management reports are prepared for each operating segment and submitted to the CEO.

In preparing and presenting the segment information, the same accounting and valuation policies are applied as for the consolidated financial statements. The book value of the interests in companies that are recognised according to the equity method breaks down to kEUR 4,832 for the segment of Austria (31 December 2016: kEUR 3,401), and kEUR 7,405 (31 December 2016: kEUR 6,840) for the segment of CEE.

	Austria		Germany		CEE1		Total
EUR '000	2017	2016	2017	2016	2017	2016	2017	2016
Rental income	24,745	28,074	36,684	37,069	50,591	53,031	112,020	118,174
Revenues from operating costs	6,236	6,916	11,776	11,626	15,423	19,115	33,435	37,657
Revenues from hotel operations	22,095	21,178	0	0	23,871	21,745	45,966	42,923
Total revenues	53,076	56,168	48,460	48,695	89,885	93,891	191,421	198,754
Other operating income	1,597	664	759	1,491	510	1,250	2,866	3,405
Property operating expenses	-11,195	-12,147	-23,238	-27,088	-25,444	-24,917	-59,877	-64,152
Hotel operating expenses	-19,604	-17,555	0	0	-16,628	-14,482	-36,232	-32,037
Gross profit	23,874	27,130	25,981	23,098	48,323	55,742	98,178	105,970
Gains on property disposals	3,587	536	0	4,347	6,754	250	10,341	5,133
Management expenses	-10,088	-10,691	-5,531	-5,551	-3,344	-2,393	-18,963	-18,635
EBITDA	17,373	16,975	20,450	21,894	51,733	53,599	89,556	92,468
Depreciation and amortisation	-4,963	-3,900	-97	-96	-3,939	-3,827	-8,999	-7,823
Results from property valuation	37,101	38,167	70,005	136,698	20,486	19,170	127,592	194,035
EBIT	49,511	51,242	90,358	158,496	68,280	68,942	208,149	278,680
Non-current assets as of 31 December	759,947	742,766	766,720	660,385	638,075	784,845	2,164,742	2,187,996
Non-current liabilities as of 31 December	512,973	635,178	275,996	262,310	322,607	326,269	1,111,576	1,223,757

1 adjusted

Major customers

Because of the large number of customers, no single customer is responsible for more than 10% of S IMMO Group's total revenues.

5. Other information

5.1. Financial instruments

5.1.1. Categories

S IMMO Group classifies its financial instruments as follows:

31 December 2017

Book values		Available for		Loans and	Financial liabilities at
EUR '000	Derivatives		sale Held to maturity	receivables	amortised cost	Total
Assets
Non-current assets
Group interests		842				842
Loans to companies measured at equity				10,946		10,946
Other financial assets	1,170	298,560	445			300,175
Current assets
Trade receivables				8,447		8,447
Other financial assets				6,607		6,607
Cash and cash equivalents				73,990		73,990
Total assets	1,170	299,402	445	99,990	0	401,007
Equity and liabilities
Non-current liabilities
Issued bonds					287,518	287,518

Other financial liabilities	17,130			669,459	686,589
thereof finance lease				7,040
Current liabilities
Subordinated participating certificate capital l				56,717	56,717
Financial liabilities 1				113,398	113,398
thereof finance lease				2,120
Trade payables				7,363	7,363
Total equity and liabilities	17,130	0	0	0 1,134,455	1,151,585

including bond interest accrued

31 December 2016

Book values		Available for	Held to	Loans and	Financial liabilities at
EUR '000	Derivatives	sale	maturity	receivables	amortised cost	Total
Assets
Non-current assets
Group interests		777				777
Loans to companies measured at equity				10,372		10,372
Other financial assets	2,580	87,437	377			90,394
Current assets
Trade receivables				10,412		10,412
Other financial assets				4,241		4,241
Cash and cash equivalents				66,029		66,029
Total assets	2,580	88,214	377	91,054	0	182,225
Equity and liabilities
Non-current liabilities
Subordinated participating certificate capital					58,131	58,131
Issued bonds					287,221	287,221
Other financial liabilities	30,347				740,255	770,602
thereof finance lease					9,160
Current liabilities
Financial liabilities 1					184,096	184,096
thereof finance lease					2,099
Trade payables					9,298	9,298
Total equity and liabilities	30,347	0	0	0	1,279,001	1,309,348

including bond interest accrued

The bond liabilities had a fair value of kEUR 312,804 as of 31 December 2017 (31 December 2016: kEUR 311,423). The fair value of the participating certificate liabilities as of 31 December 2017 is kEUR 54,094 (31 December 2016: kEUR 54,414). The book values indicated for the other financial liabilities largely correspond to the fair values.

The individual categories of financial instruments recognised in the income statement can be assigned as follows:

	2017		2016
EUR '000	Current financial result	Valuation effects	Current financial result	Valuation effects
Derivatives	-8,199	-14,234	-8,264	-16,430
Available for sale	4,763		981
Loans and receivables		1,099		-710
Financial liabilities at amortised cost	-32,018		-38,231

5.1.2. Derivatives

The company currently uses swaps and caps to manage the interest rate risk in connection with variable-rate property financing.

Derivatives disclosed under other current and non-current financial assets (kEUR 1,170; 31 December 2016: kEUR 2,580) and under non-current and current financial liabilities (kEUR 17,130; 31 December 2016: kEUR 30,347).

		31 December 2017				31 December 2016
EUR '000	Nominal	Positive fair value	Negative fair value	Maturity	Nominal	Positive fair value	Negative fair value	Maturity
Swaps	0	0	0	< 1 year	0	0	0	< 1 year
	3,000	0	-98	1–5 years	116,580	0	-9,410	1–5 years
	411,035	322	-17,032	> 5 years	392,417	1,264	-20,608	> 5 years
Caps	5,000	0	0	< 1 year	0	0	0	< 1 year
	50,000	65	0	1–5 years	62,460	34	-329	1–5 years
	140,000	783	0	> 5 years	165,000	1,283	0	> 5 years
Summe	609,035	1,170	-17,130		736,457	2,581	-30,347

5.2. Risk management

Since S IMMO Group's rental contracts are mostly linked to the euro and almost all of its loans are denominated in euro, the exchange rate risk is considered to be low.

5.2.1. Exchange and interest rate risk

At 31 December 2017, around 80% (31 December 2016: 87%) of the Group's credit portfolio consisted of variable-rate loans and roughly 20% (31 December 2016: 13%) were fixed-rate loans. The current and non-current financial liabilities include fixed-rate loans in the amount of kEUR 155,767 (31 December 2016: kEUR 114,447). Of the variable-rate loans, roughly 97% are based on the three-month Euribor with quarterly adjustment (31 December 2016: approx. 97%), roughly 3% on the six-month Euribor with bi-annual adjustment (31 December 2016: approx. 2%) and none on the one-month Euribor (31 December 2016: 1%). In the 2014

Stress test as of 31 December 2017

and 2015 financial years, the company issued fixed-rate bonds. More details can be found in section 3.1.14.

The variable-rate loans are protected with hedging instruments such as caps and swaps.

The cost of funding (based on variable and fixed interest finance liabilities as of 31 December 2017) is 2.67% (31 December 2016: 3.09%).

The stress test (based on the variable- and fixed-rate financial liabilities as of 31 December 2017) shows that increases in the base rate (Euribor) have only a small effect on the Group's financing costs. For example, a 100 bp increase in the three-month Euribor increases financing costs by 15 bp.

Interest rate (3M Euribor)	Cost of funding	Difference cost of funding	Interest sensitivity
Interest rate 4%	3.25%	58 BP	15%
Interest rate 3%	3.19%	52 BP	17%
Interest rate 2%	3.05%	38 BP	19%
Interest rate 1%	2.82%	15 BP	15%
Interest rate 0.5%	2.70%	4 BP	7%
Interest rate -0.5%	2.68%	1 BP	-3%

Stress test as of 31 December 2016

Interest rate (Euribor)	Cost of funding	Difference cost of funding	Interest sensitivity
Interest rate 4%	3.99%	87 BP	22%
Interest rate 3%	3.87%	75 BP	25%
Interest rate 2%	3.67%	55 BP	28%
Interest rate 1%	3.39%	27 BP	27%
Interest rate 0.5%	3.25%	13 BP	27%
Interest rate -0.5%	3.17%	5 BP	-9%

5.2.2. Liquidity and lender risks

S IMMO Group manages liquidity and lender risks actively. As part of managing and monitoring liquidity, all maturities are subject to continual review, and appropriate adjustments are made as part of the rolling budget process if necessary. In order to minimise liquidity risks, the Group ensures that a balanced relationship is maintained between the amounts of loans and the market values of the individual properties.

In 2016, the loan to value ratio for secured financing amounted to 36.6% (2016: 41.3%) and for unsecured financing to 12.7% (2016: 14.6%). To keep lender risks to a minimum, S IMMO Group works with a total of 23 different, well-known financial institutions in Austria and Germany.

	Share in liabilities to banks
Erste Group	17%
Savings banks	10%
Other Austrian banks	28%
Insurance	19%
German Banks	26%

Maturity analysis of financial liabilities

The maturities of the undiscounted payment flows for future periods are as follows:

31 December 2017	Subordinated participating		Other financial
EUR '000	certificate capital	Issued bonds	liabilities 1	Trade payables
Remaining maturity less than 1 year	56,717	10,256	126,600	7,363
Remaining maturity between 1 and 5 years	0	217,724	359,521	0
Remaining maturity over 5 years	0	112,871	394,542	0

Thereof finance lease less than 1 year: kEUR 2,199; between 1 and 5 years: kEUR 7,148; over 5 years: kEUR 0

31 December 2016	Subordinated participating		Other financial
EUR '000	certificate capital	Issued bonds	liabilities 1	Trade payables
Remaining maturity less than 1 year	0	10,256	209,742	9,298
Remaining maturity between 1 and 5 years	58,131	224,762	523,196	0
Remaining maturity over 5 years	0	116,088	313,974	0

Thereof finance lease less than 1 year: kEUR 2,199; between 1 and 5 years: kEUR 8,797; over 5 years: kEUR 550

5.2.3. Borrower risks

The amounts disclosed as assets represent the maximum default risk since there are no significant netting agreements.

Provisions are formed for default risks on receivables from tenants and purchasers of properties to the extent that such risks are recognised. The criteria for the formation of these provisions are explained in note 2.6.6.2.

5.3. Rental agreements

The tenancy agreements concluded by S IMMO Group are classified as operating leasing under IFRS. These tenancy agreements are as a rule protected by linking the rents to the euro and to international indices.

Total future minimum leasing payments (nominal value) from operating leasing agreements are as follows:

	347,111	436,301
Over 5 years	105,655	116,974
For the next 4 years	165,917	226,138
In the following year	75,539	93,189
EUR '000	2017	2016

5.4. Leasing – Group as lessee

Total future minimum lease payments from operating leases are as follows:

Over 5 years	9,797	11,565
For the next 4 years	1,293	1,889
In the following year	332	482
EUR '000	2017	2016

The investment property assets include properties from finance leases in the amount of kEUR 44,740 (2016: kEUR 42,110).

Finance leases are concluded for a term of 15 years. The interest rates upon which the contracts are based are variable and linked to the three-month Euribor.

The obligations from finance leases are shown in the following tables:

EUR '000	In the following year	For the next 4 years	Over 5 years	31 December 2017
Amount of future minimum lease payments	2,199	7,148	0	9,347
Interest amount	79	108	0	187
Present value of minimum lease payments	2,120	7,040	0	9,160

EUR '000	In the following year	For the next 4 years	Over 5 years	31 December 2016
Amount of future minimum lease payments	2,199	8,797	550	11,546
Interest amount	101	186	0	287
Present value of minimum lease payments	2,098	8,611	550	11,259

5.5. Pending litigation

S IMMO Group was involved in a number of open legal disputes at the balance sheet date. However, the amounts involved were not significant and even in total the amount was not material in the management's estimation.

5.6. Related party disclosures

For S IMMO Group related parties are as follows:

• S IMMO Group's managing bodies,
• Erste Group,
• Vienna Insurance Group,
• RPR Privatstiftung,
• Familie Benko Privatstiftung,
• Arealis Liegenschaftsmanagement GmbH,
• Associated companies and joint venture companies of the Group.

By share purchase agreement dated 28 December 2017, RPR Privatstiftung acquired 6,832,561 S IMMO AG shares (around 10.21% of the share capital) from Erste Group Bank AG. The RPR Privatstiftung Group therefore increased its interest in S IMMO AG to around 21.86%. Thus at the end of the reporting period, Vienna Insurance Group and RPR Privatstiftung Group are S IMMO AG's core shareholders.

Via SIGNA Holding GmbH which it controls, Familie Benko Privatstiftung concluded agreements on financing the above share purchase as well as buy/sell options for the acquisition of shares in S IMMO AG held by the RPR Privatstiftung Group.

In the financial year 2017, there were no related-party transactions with the new shareholders.

As of the reporting date, Erste Group is still represented on the S IMMO AG Supervisory Board.

Areal Liegenschaftsmanagement GmbH is a joint subsidiary of Erste Group and the Vienna Insurance Group.

S IMMO Group's managing bodies are as follows:

S IMMO AG Management Board

Ernst Vejdovszky, Vienna Friedrich Wachernig, MBA, Vienna

S IMMO AG Supervisory Board

Martin Simhandl, Vienna (Chairman) Ralf Zeitlberger, Vienna (first deputy chairman) Franz Kerber, Graz (second deputy chairman) Andrea Besenhofer, Vienna Christian Hager, Krems Erwin Hammerbacher, Vienna (until 08 June 2017) Michael Matlin, MBA, New York (until 30 November 2017) DI Manfred Rapf, Wien (since 08 June 2017) Wilhelm Rasinger, Vienna

The remuneration of the Management Board breaks down as follows:

	989	879
Variable	430	350
Fixed	559	529
EUR '000	2017	2016

In addition to the amounts specified above, other benefits consisted primarily of contributions to pension funds in the amount of kEUR 57 (2016: kEUR 53) and contributions to the staff benefit fund in the amount of kEUR 15 (2016: kEUR 14). The allocable service cost from pension entitlements comes to kEUR 67 (2016: kEUR 66).

In 2017, members of the Supervisory Board received remuneration amounting to kEUR 172 (2016: kEUR 176). Members of subsidiaries' supervisory boards received no remuneration. Neither members of the Management Board nor Supervisory Board members received either loans or advances, and no guarantees have been provided on their behalf.

Erste Group mainly provided S IMMO Group with administrative, intermediary and financial services, while Vienna Insurance Group mostly provided financial and insurance services. In the following tables, Erste Group is still cited as a related party despite the disposal of the stake shortly before the end of the year.

There were the following receivables and payables with Erste Group and Vienna Insurance Group as of 31 December 2017 and as of 31 December 2016:

Receivables	64,235	51,169
Bank balances	60,405	48,244
Other receivables	3,830	2,925
EUR '000	31 December 2017	31 December 2016

Bank balances consist mainly of current account balances at interest rates of up to 0.01%.

EUR '000	31 December 2017	31 December 2016
Non-current bank and financial liabilities	346,095	351,514
Current bank and financial liabilities	49,368	121,673
Trade payables	61	51
Other liabilities	1,224	19
Liabilities	396,748	473,257

The financial liabilities and liabilities to banks were subject to interest rates of between 0.75% and 3.5% and had an average residual maturity of 6.8 years.

From 01 January 2017 until 31 December 2017 and from 01 January 2016 until 31 December 2016, the following material expenses were incurred and income generated in connection with Erste Group and Vienna Insurance Group:

EUR '000	2017	2016
Commissions	-49	-79
Management fees	-287	-539
Bank loan interest, other financing expenses and charges	-16,592	-26,298
Other expenses	-1,436	-1,235
Expenses	-18,364	-28,151

EUR '000	2017	2016
Rent and revenues from operating costs	576	437
Bank interest	0	1
Other interest income	178	273
Income	754	711

Property management for the majority of the Austrian properties is provided by Arealis Liegenschaftsmanagement GmbH, Vienna, in which Erste Group and Vienna Insurance Group each hold a 50% interest.

The S IMMO Group award loans to associated companies recognised according to the equity method. As of 31 December 2017, there were receivables of kEUR 10,946 (31 December 2016: kEUR 10,372) resulting from these loans. Other than this, no transactions were conducted with associated companies or joint ventures that are recognised according to the equity method.

5.7. Significant events after the balance sheet date

In the first quarter of 2018, the Group increased its interest in the listed company Immofinanz to 11.82%.

Two corporate bonds with a volume of EUR 100m in a six-year tranche and a volume of EUR 50m in a twelve-year tranche were also issued in the first quarter of 2018. Both bonds are fixed-rate and have coupons of 1.75% p.a.(six-year) and 2.875% p.a. for the twelve-year tranche.

These consolidated financial statements were prepared by the Management Board on 20 March 2018 and approved for submission to the Supervisory Board.

Vienna, 20 March 2018

The Management Board

Ernst Vejdovszky m.p.

Friedrich Wachernig, MBA m.p.

Auditor's Report

Report on the Consolidated Financial Statements

Audit Opinion

We have audited the consolidated financial statements of S IMMO AG, Vienna, and its subsidiaries (the Group), which comprise the consolidated balance sheet as of December 31, 2017, the separate consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of cash flows and the consolidated statement of changes in equity for the fiscal year then ended, and the notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements comply with legal requirements and give a true and fair view of the financial position of the Group as of December 31, 2017, and of its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standards (IFRSs) as adopted by the EU and the additional requirements under Section 245a Austrian Commercial Code.

Basis for Opinion

We conducted our audit in accordance with Regulation (EU) No. 537/2014 (hereinafter EU Regulation) and Austrian generally accepted auditing standards. Those standards require the application of the International Standards on Auditing (ISAs). 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 Group in accordance with Austrian Generally Accepted Accounting Principles and professional requirements, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 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 financial statements of the fiscal year. 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.

We have structured key audit matters as follows:

• Descriptions
• Audit approach and findings
• Reference to related disclosures

1. Measurement of investment properties

Description

In its consolidated financial statements as of December 31, 2017, S IMMO reports investment property in the amount of EUR 1,705,505k (prior year: EUR 1,938,104k) that is stated at fair value in accordance with IAS 40 in conjunction with IFRS 13, leading to a measurement result of EUR 127,592k (prior year: EUR 194,035k) in the fiscal year 2017.

The measurement of investment property as of December 31, 2017 is performed by external assessors who use several measurement models, depending on the asset class and lessee structure. The measurement strongly depends on estimates with regard to input parameters that are both observable and not observable in the market and, to some extent, is materially based on judgment. Even slight changes in individual measurement parameters may result in significant changes in the fair values of the investment properties. Further, IAS 40 and IFRS 13 require a number of disclosures to be made in the notes.

Audit approach and findings

In the course of our audit of the consolidated financial statements, we evaluated the annual investment property measurement process. We satisfied ourselves of the professional qualification and objectivity of the external assessors engaged by S IMMO.

As part of the process, the respective internal asset managers use a central group-wide management tool to manage, consistently evaluate and update the topographic data used to measure the real estate portfolio and provided by S IMMO to the assessors. In the course of our risk-oriented audit approach, we were able to ascertain the design and effectiveness of the implemented controls.

Based on samples used to assess significant individual objects, we evaluated the basic data – applicable as of the reporting date and relating to specific objects – on which measurement is based (i.e., floor area and usable space, current rent and most recent number of vacancies) with the help of our internal experts for real estate measurement. We evaluated the measurement models used by the assessors as to their compliance with IAS 40 and IFRS 13. We then critically assessed the significant measurement assumptions and parameters, such as sustainable rents, the discounting and capitalization rates applied, and reconciled this information with external market data.

The measurement models used by the assessors are appropriate to calculate the fair values in line with IFRSs. The measurement assumptions and models applied in the measurement are appropriate. The disclosures in the notes required by the relevant standards are complete and appropriate.

Reference to related disclosures

The Group provides information on investment properties in the notes to the consolidated financial statements in sections 2.6.1., 2.8.1., 3.1.1. and 3.2.6.

2. Use of derivative financial instruments by the S IMMO Group

Description

The S IMMO Group uses various derivative financial instruments, such as interest swaps and caps, to hedge future interest payments due from the funding of property that usually bears variable interest. As provided by the Group's risk strategy, the Group designates the individual derivatives for hedge accounting pursuant to IAS 39. If, however, no documented hedge accounting as set forth under IAS 39 is available for individual derivatives, the respective derivative financial instruments are accounted for on a stand-alone basis under IAS 39. As of December 31, 2017, the Group shows interest swaps in an amount of EUR 414,035k (prior year: EUR 508,997k) and interest caps at a nominal value of EUR 195,000k (prior year: EUR 227,460k). Overall, the interest caps have a positive fair value at the reporting date of EUR 849k (prior year: EUR 988k) and the interest swaps a negative fair value in the amount of EUR -16,809k (prior year: EUR -28,754k). The impact of hedge accounting and the measurement of derivatives on profit or loss is EUR -14,234k (prior year: EUR -16,407k) in the fiscal year 2017. The measurement of cash flow hedges recognized in other comprehensive income is EUR -197k (prior year: EUR -4,053k) in the fiscal year 2017, and the reclassification of other comprehensive income to the consolidated income statement amounts to EUR 13,991k (prior year: EUR 5,921k). Hedge accounting requires a thorough documentation that complies with the reporting standard. In addition to the designation of hedged items and hedging instruments, this documentation is to particularly include the measurement of their prospective and retrospective effectiveness. The risk for the consolidated financial statements lies in derivatives that have been measured based on judgments and the recognition of hedge accounting effects in line with IAS 39.

Audit approach and findings

We audited the existence and amount of the outstanding nominal amount of the derivatives by obtaining external bank confirmation letters. We also identified the processes and controls implemented under the group-wide treasury process and tested the key controls that are of relevance for the audit. With regard to derivatives recognized as a cash flow hedge, we requested the necessary designation documentation in accordance with IAS 39 from group management and assessed if it is complete and complies with IFRSs. For purposes of the measurement of the derivatives, the S IMMO Group uses a renowned auditing firm that performs the effectiveness and sensitivity analyses and calculates the fair values by taking into account credit and debit value adjustments pursuant to IFRS 13. In the course of our audit procedures, we ascertained the professional qualification and objectivity of the external expert. In addition, we requested from this expert the calculations made, critically assessed the use of material input parameters (e.g. the yield curve used), and made comparative calculations. In a final step, we audited the correct accounting entries of the derivatives by taking into account the hedging relationships based on the effectiveness tests made at the reporting date.

The designation documentation complies with IFRSs. The measurement methods applied and the underlying assumptions and measurement parameters are appropriate.

Reference to related disclosures

The Group provides information on use of derivative financial instruments in the notes to the consolidated financial statements in sections 2.6.5.2., 2.8.3.1., 2.8.3.2. and 5.1.2.

Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU, and the additional requirements under Section 245a UGB, and for such internal control as management determines 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, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The audit committee is responsible for overseeing the Group's financial reporting process.

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 auditor'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 the EU Regulation and with Austrian generally accepted auditing standards, which require the application of ISAs, will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually 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.

As part of an audit in accordance with the EU Regulation and with Austrian generally accepted auditing standards, which require the application of ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit.

We also:

identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risks of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the audit committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the audit committee with a statement that we have complied with all relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the audit committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

Comments on the Management Report for the Group

Pursuant to the Austrian Commercial Code, the management report for the Group is to be audited as to whether it is consistent with the consolidated financial statements and as to whether the management report for the Group was prepared in accordance with the applicable legal requirements.

Management is responsible for the preparation of the management report for the Group in accordance with the Austrian Commercial Code.

We conducted our audit in accordance with Austrian Standards on Auditing for the audit of the management report for the Group.

Opinion

In our opinion, the management report for the Group was prepared in accordance with the applicable legal requirements, includes accurate disclosures pursuant to Section 243a UGB and is consistent with the consolidated financial statements.

Statement

Based on the findings during the audit of the consolidated financial statements and due to the obtained understanding concerning the Group and its circumstances no material misstatements in the management report for the Group came to our attention.

Other information

Management is responsible for the other information. The other information comprises the information included in the annual report, but does not include the consolidated financial statements, the management report for the Group and the auditor's report. The annual report is expected to be made available to us after the date of this auditor's report.

Our opinion on the consolidated financial statements does not cover the other information and we will 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 identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

Additional Information in Accordance with Article 10 of the EU Regulation

We were appointed as statutory auditor at the ordinary general meeting dated June 8, 2017. We were engaged by the supervisory board on August 4, 2017. We have audited the Company for an uninterrupted period since 2013.

We confirm that the audit opinion in the "Report on the Consolidated Financial Statements" section is consistent with the additional report to the audit committee referred to in Article 11 of the EU Regulation.

Responsible Engagement Partner

Responsible for the proper performance of the engagement is Mr. Peter Pessenlehner, Austrian Certified Public Accountant.

Vienna, March 20, 2018 PwC Wirtschaftsprüfung GmbH

Signed: Peter Pessenlehner Austrian Certified Public Accountant

This report is a translation of the original report in German, which is solely valid. Publication and sharing with third parties of the consolidated financial statements together with our auditor's opinion is only allowed if the consolidated financial statements and the management report for the Group are identical with the German audited version. This audit opinion is only applicable to the German and complete consolidated financial statements with the management report for the Group. For deviating versions, the provisions of Section 281 (2) UGB apply.

Dear Shareholders,

In 2017, S IMMO published the second-best Group result in the company's history. In addition to the successful disposals, several attractive properties in German cities were purchased and the company's development projects were driven forward. After the successful completion of the remodelling of Sun Plaza in Bucharest in spring, the opening of the office properties Einsteinova Business Center and The Mark are expected for 2018. In addition to the company's highly successful operating activities, the S IMMO share performed particularly well. At the end of the year, it was listed at EUR 16.15, having gained 61.5% year-on-year.

In the 2018 financial year, S IMMO AG continues working to create value for its shareholders. As in the previous financial years, the Supervisory Board will advise and assist the Management Board in all its undertakings.

In its meetings and the meetings of its committees, the Supervisory Board discharged its duties under the law, the company's articles of incorporation and the Group's internal rules and procedures, advised the Management Board on strategic issues in particular and monitored its activities in the reporting period.

The 28th Annual General Meeting of S IMMO AG was held at the Vienna Marriott Hotel on 08 June 2017. The agenda items and voting results have been published on the company's website www.simmoag.at. In addition, six Supervisory Board meetings were held in the reporting period, where the average attendance of Supervisory Board members was 83%. No members were absent at more than half of the meetings.

During the six Supervisory Board meetings, the Supervisory and Management Boards of S IMMO AG discussed the Group's economic situation, its risk and opportunity management, its strategic direction and its business development. At the meetings, the Management Board reported to the Supervisory Board on the Group's business affairs and finances as well as on strategic issues. In 2017, no agenda items were discussed at any Supervisory Board meeting without the attendance of any Management Board members.

S IMMO AG has subscribed to the Austrian Code of Corporate Governance since 2007. The voluntary obligations contained therein go beyond the statutory requirements applicable to public limited companies and are designed to ensure even greater transparency in reporting.

Martin Simhandl

The Supervisory Board has formed three committees: the Management Board Committee (Remuneration Committee), the Audit Committee and the Working Committee. The duties and composition of the committees are detailed in the corporate governance report on page 80.

The Audit Committee exercised the duties and authority assigned to it by law, and met twice in the reporting year. Its agenda particularly covered the accounting process, auditing of the consolidated financial statements, the Internal Control System, risk management and the audit system as well as compliance and anticorruption issues.

In preparation for the Supervisory Board's nomination of auditors for the company's individual and consolidated annual financial statements, the Audit Committee reviewed the documentation submitted by PwC Wirtschaftsprüfung GmbH evidencing their authorisation to practise as auditors. A written report confirmed that there were neither grounds for exclusion nor any circumstances that could give rise to concerns about conflicts of interest. A schedule of the total remuneration paid to PwC Wirtschaftsprüfung GmbH by S IMMO AG, itemised by categories of services, in particular remuneration for additional non-audit services, was requested and reviewed. When selecting the auditors of the individual and consolidated financial statements, the Audit Committee also took into account the appropriateness of the auditor's fee. It was also confirmed that PwC Wirtschaftsprüfung GmbH complies with the legally required quality assurance measures for maintaining audit quality. The Audit Committee reported to the Supervisory Board on the outcomes of its reviews and its findings in these matters. On this basis, the Supervisory Board proposed to the Annual General Meeting the appointment of PwC Wirtschaftsprüfung GmbH as auditors of the company's individual and consolidated annual financial statements for the financial year 2017.

The Audit Committee of the Supervisory Board also accepted the submission of the annual financial statements as of 31 December 2017 by the Management Board, together with the management report and the corporate governance report. In the course of this review, the Management Board's proposal for the distribution of profits was also discussed. The Audit Committee also reviewed the consolidated annual financial statements as of 31 December 2017 prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union together with the Group management report. On the basis of its review and discussions, the Audit Committee recommended to the Supervisory Board the acceptance of the company's individual annual financial statements and their adoption in accordance with section 96 para 4 Austrian Stock Corporation Act (AktG) and the acceptance of the Group's consolidated financial statements. The Supervisory Board discussed in detail and reviewed the individual annual financial statements as of 31 December 2017, including the management and corporate governance reports, the consolidated financial statements as of 31 December 2017 prepared in accordance with the International Financial Reporting Standards including the Group management report and the distribution of profits proposed by the Management Board.

The Audit Committee and the Supervisory Board also reviewed and discussed in detail with PwC Wirtschaftsprüfung GmbH the audit reports submitted by PwC Wirtschaftsprüfung GmbH on the individual annual financial statements as of 31 December 2017, including the management report and the consolidated annual financial statements as of 31 December 2017, including the Group management report. No objections were raised by PwC Wirtschaftsprüfung GmbH in the course of their audit of the annual financial statements and the management reports of the company and the Group for the year ended 31 December 2017. PwC Wirtschaftsprüfung GmbH confirmed that the individual annual financial statements as of 31 December 2017 comply with the statutory requirements and give a true and fair view of the assets and finances of S IMMO AG as of 31 December 2017 and of its earnings for the year ended on that date, and are in accordance with generally accepted Austrian accounting principles. The management report is consistent with the individual annual financial statements as of 31 December 2017. PwC Wirtschaftsprüfung GmbH further confirmed that the consolidated annual financial statements as of 31 December 2017 comply with the statutory requirements and give a true and fair view of the assets and finances of the Group as of 31 December 2017 and of its earnings for the year ended on that date, and are in accordance with the IFRS as adopted by the European Union as well as the additional requirements of section 245a Austrian Commercial Code (UGB). The Group management report is consistent with the consolidated financial statements as of 31 December 2017. The disclosures pursuant to section 243a Austrian Commercial Code (UGB) are appropriate.

The final results of the review by the Audit Committee and Supervisory Board gave no reasons for objection. The Supervisory Board declared that it had nothing to add to the audit reports by the auditors. The Supervisory Board therefore resolved to accept without objection the individual annual financial statements and management report for the year ended on 31 December 2017 prepared by the Management Board, and the consolidated annual financial statements (prepared in accordance with the IFRS as adopted by the European Union) and Group management report for the year ended on 31 December 2017. The Supervisory Board also resolved to accept the Management Board's proposal for the distribution of profits. In accordance with section 96 para 4 Austrian Stock Corporation Act (AktG), the individual annual financial statements as of 31 December 2017 were therefore adopted.

The Supervisory Board will propose to the Annual General Meeting that the Management Board's proposal for the distribution of profits be adopted, and that the Management and Supervisory Boards be discharged from liability.

In the reporting period, a non-financial report was published for the first time to comply with the requirements from the Austrian Sustainability and Diversity Improvement Act (NaDiVeG). This replaces the previous mandatory disclosures in accordance with section 243 para 5 of the management report. S IMMO has been taking sustainability in its operating activities into consideration for years. The Supervisory Board has accepted the submission of the nonfinancial report, reviewed and discussed it. As a result, the nonfinancial report was accepted by the Supervisory Board.

And finally on behalf of the Supervisory Board, I would like to thank the Management Board and staff of S IMMO AG for their hard work and dedication each and every day during the past year and wish them a successful financial year 2018.

Vienna, April 2018 The Supervisory Board

Martin Simhandl, Chairman

Corporate governance report

1. Clear commitment to the Austrian Code of Corporate Governance

The Austrian Code of Corporate Governance (ÖCGK) contains rules and principles relating to transparency and sound corporate management. S IMMO AG has subscribed to the Austrian Code of Corporate Governance since 2007. This code is available on the

Information on Corporate Governance: www.simmoag.at/en/cg www.corporate-governance.at website of the Austrian Working Group for Corporate Governance. Notwithstanding the exceptions set out and explained below, the Management Board and Supervisory Board of S IMMO AG declare full observance of and compliance with the C Rules of the ÖCGK.

Exceptions to the C Rules

S IMMO AG does not fully comply with the following C Rules of the Austrian Code of Corporate Governance:

C Rule 2: 'Shares are to be construed in accordance with the principle of one share – one vote.'

The 66,917,179 shares in S IMMO AG are construed in accordance with the principle 'one share – one vote'. All shares carry the same rights. In particular, there are no registered shares with special rights such as nomination of Supervisory Board members or preference shares. The only restriction regarding the voting right associated with all shares exists in the context of the maximum voting right provided for in section 13 para 3 of the articles of incorporation. At the Annual General Meeting the voting rights of each shareholder are accordingly limited to 15% of the issued share capital. For this purpose, shares held by companies that together constitute a group for the purposes of section 15 Austrian Stock Corporation Act (AktG) are to be aggregated, as are shares held by third parties for the account of the relevant shareholder or the account of a company forming part of a group with that shareholder. Holdings of shares by shareholders exercising their voting rights in concert in virtue of an agreement or as part of coordinated behaviour are also to be aggregated. The maximum voting right was adopted at the 17th Annual General Meeting of S IMMO AG on 03 May 2006.

C Rule 41: 'The Supervisory Board appoints a nominations committee.'

The Supervisory Board has the authority to appoint, dismiss and extend the term of office of Management Board members. This belongs to its core tasks. The associated duties apply equally to all Supervisory Board members. For this reason, all members should also have an equal involvement in decision making.

C Rule 49: 'The company shall disclose in its annual report details of the objects and remuneration of contracts and agreements requiring approval under L Rule 48. Summary disclosure of agreements of similar kinds is permissible.'

According to section 95 para 5 line 12 of the Austrian Stock Corporation Act (AktG), contracts with members of the Supervisory Board that commit said members to perform a service outside their work on the Supervisory Board for the company or a subsidiary in return for a material consideration require the consent of the Supervisory Board. This also applies to contracts with enterprises in which a member of the Supervisory Board has a material interest. The company has concluded loan and insurance agreements at normal market conditions with enterprises at which Supervisory Board members perform executive functions. The details and considerations in these agreements are not published for reasons of business policy and competition.

C Rule 62: 'The company has to comply with the C Rules of the Code evaluated periodically, but at least every three years, by an external institution and a report on the findings of the evaluation is to be published in the corporate governance report.'

The company does not have compliance with the C Rules evaluated by an external institution. Based on the company's circumstances, the Management Board and Supervisory Board do not consider it to be sensible to commission a company to perform such an evaluation.

2. Composition of managing bodies and remuneration

Management Board

In the last financial year, the Management Board consisted of two members. More detailed information about the individual members and their responsibilities is shown in the overview of management bodies on page 84 of this report. The members of the Management Board keep each other informed of all important business events and developments at all times and discuss the progress of business. There is an ongoing exchange of information with the managers responsible for the various departments.

Remuneration of the Management Board

Remuneration of the Management Board consists of a fixed component and a variable component. The fixed basic salary is based on the scope of tasks and responsibilities of each Management Board member as well as their years of service. The basic salary is paid out 14 times per year. The criteria for variable profit-sharing are the attainment of quantitative and qualitative targets such as EBT, cash flow, one-year share performance and the sales volume, with the maximum limit being set at around one year's annual fixed remuneration. The fulfilment of the performance criteria is determined on the basis of the audited and adopted annual financial statements and other documented target attainment records.

Total Management Board Remuneration

2017 in EUR	Vejdovszky	Wachernig
Fixed remuneration	335,410	223,884
Variable remuneration	251,440	178,101
Other remuneration	39,680	33,021
Total	626,530	435,006
2016 in EUR	Vejdovszky	Wachernig
Fixed remuneration	321,024	208,176
Variable remuneration	203,558	146,705
Other remuneration	38,356	28,489

Overall, in 2017, the Management Board received total remuneration of EUR 1,061,536 (2016: EUR 946,308), including contributions to pension funds of EUR 57,206 (2016: EUR 53,005) and contributions to the employees' severance pay and pension fund of EUR 15,494 (2016: EUR 13,840). The company pension plan for Ernst Vejdovszky is subject to a defined benefit plan in the amount of 40% of the fixed basic salary after 35 years of service. The company pension plan for Friedrich Wachernig is and was, respectively, a defined contribution plan. S IMMO AG currently has no stock option plan and no individual severance entitlements for Management Board members.

D&O insurance

In line with the resolution of the Annual General Meeting in 2009, a directors and officers (D&O) insurance has been in place since 01 September 2009. This insurance covers claims for damages by the company, shareholders or third parties against the governing bodies or executives of the company that may be enforced as a result of breaches of duty of care. The costs are borne by the company.

Supervisory Board

As of 31 December 2017, the Supervisory Board consisted of seven members. Information on the Supervisory Board members, their positions, their principal occupations and other Supervisory Board appointments can be found in the overview of management bodies on page 85.

Criteria for independence

S IMMO AG's Supervisory Board has established the following criteria for the independence of its members as required under C Rule 53 of the Austrian Code of Corporate Governance:

A Supervisory Board member should not have been a member of the Management Board or an executive officer of S IMMO AG or one of its subsidiaries in the preceding five years.

A Supervisory Board member should not maintain, or in the preceding year have maintained, a business relationship of material importance to that Supervisory Board member with S IMMO AG or one of its subsidiaries. This also applies to business relationships with enterprises in which the Supervisory Board member has a material interest. The approval of individual transactions by the Supervisory Board in accordance with L Rule 48 does not automatically mean that a person is not independent.

A Supervisory Board member should not have served as statutory auditor of S IMMO AG, or have had an interest in, or been an employee of the auditing firm in the preceding three years.

A Supervisory Board member should not be a member of the Management Board of another company if a member of the Management Board of S IMMO AG is a member of that company's Supervisory Board.

A Supervisory Board member should not be a member of the Supervisory Board for longer than 15 years. This does not apply to Supervisory Board members who are shareholders with an entrepreneurial investment or who represent the interests of such a shareholder.

A Supervisory Board member should not be a close family member (direct descendant, spouse, lifetime partner, parent, uncle, aunt, sibling, nephew, niece) of a member of the Management Board or of persons in any of the positions described above.

The following members of the Supervisory Board, who together constitute the majority of the Supervisory Board, declared themselves to be independent in the meaning of C Rule 53 of the Code of Corporate Governance.

• Andrea Besenhofer
• Franz Kerber
• Christian Hager
• Erwin Hammerbacher (Member of the Supervisory Board until 08 June 2017)
• Michael Matlin, MBA (Member of the Supervisory Board until 30 November 2017)
• Wilhelm Rasinger
• Ralf Zeitlberger

Of the independent members as per C Rule 53, five members of the Supervisory Board are currently not shareholders with a stake of more than 10% or represent the interests of such a shareholder pursuant to C Rule 54 of the Code of Corporate Governance:

• Andrea Besenhofer
• Franz Kerber
• Christian Hager
• Wilhelm Rasinger
• Ralf Zeitlberger

Remuneration of the Supervisory Board

Remuneration including meeting fees paid to Supervisory Board members totalled EUR 171,625 (2016: EUR 175,500).

Total Supervisory Board Remuneration

in EUR	2017	2016
Simhandl	30,000	30,000
Zeitlberger	29,000	29,500
Kerber	27,500	28,500
Besenhofer	18,000	18,500
Hager	15,000	15,000
Hammerbacher	11,136	21,500
Matlin	11,989	13,500
Rapf	10,000	-
Rasinger	19,000	19,000
Total	171,625	175,500

The members of the Supervisory Board did not receive any loans or advances, and no guarantees were entered into on behalf of these persons.

3. Details of the activities and procedures of the Management Board and Supervisory Board

The activities of the Management Board and Supervisory Board and the collaboration between the two bodies are based on the applicable laws, the articles of incorporation and the rules and procedures.

The Management Board runs the company – its allocation of tasks is set out in the overview of management bodies on page 84. The Management Board also provides the Supervisory Board with information about all material aspects of the progress of business and all strategic considerations. They jointly pursue the aim of managing the company responsibly with a long-term approach oriented towards sustainable value creation and lasting corporate success. The Management Board and Supervisory Board work closely together in the interest of the company. The intensive, ongoing dialogue between the two bodies forms the basis for this.

In its meetings, the Supervisory Board monitors the management of the business as well as the finances, strategy, performance and risk management of the company. Investment projects above a specific volume also require approval by the Supervisory Board. The Supervisory Board has formed three committees, which are listed below.

During the reporting year, there were six Supervisory Board meetings. No Supervisory Board member was absent at more than half of the Supervisory Board meetings.

Supervisory Board committees

Audit Committee

The functions of the Audit Committee include monitoring the accounting and reporting process and the work of the auditors, monitoring the effectiveness of the Internal Control System and the risk management system, and monitoring the process of auditing the Group's financial statements. The Audit Committee consists of the following members: Martin Simhandl (Chairman), Erwin Hammerbacher (until 08 June 2017), Franz Kerber, Manfred Rapf (since 08 June 2017), Wilhelm Rasinger and Ralf Zeitlberger. In virtue of their experience and specialist knowledge of finance and accounting, Martin Simhandl and Ralf Zeitlberger are the committee's financial experts. The Audit Committee met twice during the reporting year.

Management Board Committee (Remuneration Committee)

The Management Board Committee is responsible for negotiating, concluding and amending the contracts of Management Board members. The committee consists of the following members: Martin Simhandl (Chairman), Franz Kerber and Ralf Zeitlberger. The Management Board Committee did not meet in 2017.

Working Committee

The Working Committee has been given authority by the Supervisory Board to approve certain transactions up to a specified maximum amount, where due to lack of time or other organisational constraints seeking the approval of the full Supervisory Board would be impractical. This applies in the case of the purchase or sale of properties up to a certain risk level as defined in the Supervisory Board's rules and procedures. The members of the Working Committee are Ralf Zeitlberger (Chairman), Andrea Besenhofer, Erwin Hammerbacher (until 08 June 2017), Franz Kerber and Manfred Rapf (since 08 June 2017). There was no meeting of the Working Committee in the reporting year.

4. Diversity concept and measures for the advancement of women

Diversity and equal opportunities are key aspects of S IMMO's corporate philosophy. S IMMO AG has set itself the aim of continuously increasing the proportion of women in management positions and is expressly committed to the advancement of women. The company places great emphasis on the advancement of women when filling senior managerial positions. As of 31 December 2017, 53.2% of the workforce and 44.0% of managers were female. Specific measures to appoint women to the Management Board will be considered when a change to the composition of the Management Board is due. The same applies for future nominations to the Supervisory Board. With the company's best interest in mind, the emphasis when making appointments to the Management Board and the Supervisory Board has been on the maximum possible degree of professional skill and international experience. In addition, the company makes a conscious effort to ensure a diverse composition with regard to professional qualifications and educational background, regardless of gender. There were no women on the Management Board of S IMMO AG in the reporting year. As of 31 December 2017, the proportion of women on the Supervisory Board was 14.3%.

Ernst Vejdovszky Friedrich Wachernig

Management Board

Ernst Vejdovszky CEO

Born: 30 October 1953 Appointed until: 30 June 2019 First appointed: 01 January 2001

Responsible for finance, corporate communications, investor relations, acquisitions, sales, risk management, audit, asset management in Germany

After studying business IT at the Vienna University of Technology, he started his career in 1982 at Girozentrale in Vienna. He became a founding Management Board Member of Sparkassen Immobilien Anlagen AG, Vienna (later Sparkassen Immobilien AG) in 1986, and has been a member of the Management Board at S IMMO AG, Vienna, since 2001.

Other appointments: Member of the Supervisory Board, Erste Immobilien Kapitalanlagegesellschaft m.b.H.

Friedrich Wachernig, MBA Member of the Management Board

Born: 28 June 1966 Appointed until: 14 November 2019 First appointed: 15 November 2007

Responsible for project development, asset management in CEE and Austria, legal, compliance, organisation, IT, HR

After studying business administration at the Vienna University of Economics and Business, he joined Eraproject GmbH, Vienna, in 1993. He held various development and management roles at Strabag AG, Raiffeisen Evolution GmbH and Porr Solutions GmbH in several Eastern European countries, and has been a member of the Management Board at S IMMO AG, Vienna, since 2007.

Supervisory Board

Martin Simhandl Chairman of the Supervisory Board

Born: 05 November 1961 Appointed until: AGM in the year 2020 First appointed: 24 June 2004

Chairman of the Audit Committee Chairman of the Management Board Committee

Member of the Management Board at VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe

Other Supervisory Board appointments: Wiener Börse AG; Erste Asset Management GmbH et al.

Ralf Zeitlberger First Deputy Chairman of the Supervisory Board

Born: 07 April 1959 Appointed until: AGM in the year 2020 First appointed: 21 May 2010

Chairman of the Working Committee Member of the Audit Committee Member of the Management Board Committee

Head of Holding/EGI Corporate & RE Workout at Erste Group Bank AG

Franz Kerber

Second Deputy Chairman of the Supervisory Board

Born: 20 June 1953 Appointed until: AGM in the year 2020 First appointed: 24 June 2004

Member of the Management Board Committee Member of the Working Committee Member of the Audit Committee

Deputy Chairman at Steiermärkische Bank und Sparkassen AG

Other Supervisory Board appointments: Bankhaus Krentschker & Co AG; Erste & Steiermärkische Bank d.d., Rijeka; MCG Graz e.gen.

Other appointments: Member of the Board at Höller-Privatstiftung, Graz

Andrea Besenhofer Member of the Supervisory Board

Born: 02 July 1970 Appointed until: AGM in the year 2020 First appointed: 12 June 2013

Member of the Working Committee

Division Manager of Group Services at Erste Group Bank AG; Managing Director of OM Objektmanagement Ges.m.b.H. (until 31 January 2018)

Other functions: Member of the Board of Besenhofer Privatstiftung (without ongoing operational activity)

Christian Hager Member of the Supervisory Board

Born: 06 December 1967 Appointed until: AGM in the year 2019 First appointed: 23 June 2009

Member of the Board at KREMSER BANK und Sparkassen AG

Erwin Hammerbacher Member of the Supervisory Board (until 08 June 2017)

Born: 27 May 1957 First appointed: 28 May 2008

Member of the Audit Committee Member of the Working Committee Member of the Board at Sparkassen Versicherung AG Vienna Insurance Group

Michael Matlin, MBA Member of the Supervisory Board (until 30 November 2017)

Born: 07 January 1964 First appointed: 21 May 2010

Managing Director of Concord Management LLC (consultancy firm for investment strategy); Member of the Investment Advisory Committee for the Carlyle European Real Estate Funds

Manfred Rapf Member of the Supervisory Board (since 08 June 2017)

Born: 29 August 1960 Appointed until: AGM in the year 2022 First appointed: 08 June 2017

Member of the Audit Committee Member of the Working Committee

General Director at Sparkassen Versicherung AG Vienna Insurance Group

Other Supervisory Board appointments: Chairman of the Supervisory Board at Österreichische Förderungsgesellschaft der Versicherungsmathematik GmbH

Wilhelm Rasinger Member of the Supervisory Board

Born: 04 March 1948 Appointed until: AGM in the year 2020 First appointed: 21 May 2010

Member of the Audit Committee

Chairman of the Austrian Shareholder Association (IVA); Chairman of the Supervisory Board at Friedrichshof Wohnungsgenossenschaft, Chairman of the Supervisory Board at Haberkorn Holding AG

Other Supervisory Board appointments: Erste Group Bank AG; Wienerberger AG; Gebrüder Ullmer Holding GmbH

Other appointments: Appointment on the Board of HATEC Privatstiftung, Dornbirn

Non-financial report

In recent years, sustainability has become a point of emphasis in S IMMO's operating activities. The topic has grown massively in significance, both in the capital market and in the rental and property business, which is why it was a logical step for S IMMO to anchor it more strongly in its corporate strategy. For the first time, S IMMO is publishing a non-financial report for the financial year 2017. It contains information about environmental, employee and social considerations (including a diversity concept), as well as about observing human rights and combating corruption and bribery, in connection with the key issues defined by S IMMO.

Business model

S IMMO AG has been pursuing a sustainable and prudent business policy for almost three decades with the aim of constantly improving its results and creating value for its shareholders. The company applies a robust business model and endeavours to make use of property cycles to generate profit.

In this context, S IMMO's strategic direction is strongly guided by the interests of its stakeholders. The impact of the company's business activities on environmental, employee and social considerations, the observance of human rights and the efforts to combat corruption and bribery have been and will continue to be taken into account on a consistent basis.

Without people, even the best property is just lifeless bricks and concrete. That is why people are at the core of S IMMO's activities. With its properties, S IMMO satisfies people's basic need for living and working space. In this way, the company plays a very important role in the lives of many people and thus actively fulfils its economic, environmental and social responsibility. The satisfaction of tenants and employees, not forgetting respectful interaction with one another, are particularly important to the company. Respect for human rights is also a key factor. Since S IMMO operates exclusively within the European Union and human rights are enshrined in Article 2 of the Treaty on European Union (TEU), the observance of human rights is a matter of course for society as a whole and does not require any separate measures. The observance of

human rights is also of great importance in day-to-day dealings within the company, for example through the strict rejection of discrimination and the development of a respectful corporate culture which creates a working environment free of prejudice and accepts people regardless of gender, religion, belief, sexuality etc.

Materiality analysis

A detailed materiality analysis forms the basis of S IMMO AG's sustainability report. The first step was to define potential topics for consideration within the field of sustainable management in connection with the Austrian Sustainability and Diversity Act (NaDiVeG). Next, the possible impacts of the topics selected were examined in

the course of a workshop involving in-house and external experts. The effects on people and on the environment were analysed as well as their significance for key stakeholders. The topics can be assigned to the following areas:

• Environment and energy
• Employees
• Sustainable corporate culture (ethics and compliance)
• Social responsibility

The main topics for S IMMO AG are thus those 14 aspects, which have the greatest impact and/or are the most important to stakeholders. Those topics are presented in the following matrix:

In this non-financial report, S IMMO AG details its activities and the measures adopted in relation to the topics defined as key issues, as described in the overview below:

Issue	Topic	Description	Considerations under the NaDiVeG
Environment and energy	Energy efficiency in planning and construction	Energy efficiency of buildings (heating, cooling and electricity consumption), for example, through the thermal quality of the building envelopes, energy-efficient building services, energy-efficient devices etc.	Environmental considerations
Environment and energy	Energy efficiency in operations	Energy-efficient operation of buildings and energy-efficient conduct of users	Environmental considerations
Environment and energy	Renewable energy	Consideration in connection with energy concepts and the purchase of land, retrofitting capacity to accommodate renewable energy sources	Environmental considerations
Environment and energy	Ecological construction materials	For example, those made of renewable materials, manu factured in an environmentally friendly manner, regionally sourced, free from pollutants, having a multifunctional purpose and recyclable	Environmental considerations
Environment and energy	Sustainable mobility	Connection to public transport networks, footpath and cycle path networks, provision of infrastructure for bicycles, e-mobility, car and bike sharing options, incentive to use environmentally friendly means of transport	Environmental considerations
Environment and energy	Environmental management and safety on construction sites	Noise and dust prevention, exclusion of contaminated sites, effective waste management, secure handling of chemicals, short transportation distances, protection from accidents for all persons involved in the construction	Environmental considerations, Employee considerations
Environment and energy	Energy efficiency at S IMMO AG's locations	Conservation of resources within the company's facilities (heating, electricity, water, waste avoidance), sustainable mobility during the employees' commute	Environmental considerations
Employees	Health and occupational safety	Health and motivation of the team are strengthened	Employee considerations
Employees	Diversity and equal opportunities	Heterogeneous team structure in relation to employment, age, gender, background etc.	Employee considerations
Employees	Work-life balance	Different working patterns, flexible time management	Employee considerations
Employees	Further education and training, knowledge management	Sharing information within the company, promoting further education, professional execution of training measures	Employee considerations
Sustainable corporate culture (ethics and compliance)	Compliance and anti-corruption	Properly managed contract award processes, sound working relationships with contractors, observance of legal requirements (employment law, competition law, data protection etc.)	Combating corruption and bribery (ethics and compliance)
Social responsibility	Architecture and art	Attractive design, incorporation into the cityscape	Social responsibility
Social responsibility	Commitment to cultural, social and ecological initiatives	Long-standing cooperation with a variety of institutions, associations and organisations	Social responsibility, environ mental considerations

Potential risks which could have a negative impact on the aforementioned interests as a result of S IMMO's business activities are incorporated into the Group's risk management processes, which are the responsibility of the Management Board.

Accordingly, in the run-up to producing this non-financial report, risks arising from social and ecological aspects were also systematically identified and assessed. The identified risks are described in the separate risk report within the management report starting on page 13.

1. Environment and energy

As a property developer and portfolio manager, S IMMO is constantly faced with environmental and energy considerations and, at the same time, strives to act with the greatest possible care and sustainability in all areas. As of 31 December 2017, the S IMMO Group had 241 properties with a total area of around 1,200,000 m². Based on main use types, 73.0% of the portfolio consisted of commercial properties (office, retail and hotel) and an additional 27.0% of residential properties. Two hotels – the Vienna Marriott and Budapest Marriott hotels – are operated under management agreements.

Energy efficiency of properties during planning, construction and operation

Energy consumption (heating demand and electricity consumption) and water usage in the buildings managed by S IMMO is highly dependent on tenant conduct and is therefore largely outside the company's control. However, S IMMO can influence the energy consumption of its buildings to a certain degree by means of construction measures. Accordingly, as a matter of principle,

S IMMO applies the highest standards in development projects, when renovating portfolio properties in terms of their energy consumption and construction, and when managing its portfolio. In this way, the company takes due account of the energy efficiency of the buildings, including during their operation, and endeavours to use resources in an environmentally friendly manner. As a result, operating costs and emissions are reduced and a significant contribution is made to protecting the environment.

To get a better overview of energy consumption at S IMMO's properties, the company collects and analyses data on heating demand, electricity consumption and water usage for the entire portfolio, broken down by region and use type.

The consumption and usage data of buildings which have been owned by S IMMO for at least one full calendar year form the basis of the portfolio monitoring. Properties purchased intra-year, properties sold in the reporting year and properties under construction therefore do not appear in the following statements on key indicators.

Overview of the entire portfolio's energy and water consumption by use type in 2017

	Portfolio by main use type
	Office	Retail	Hotel	Residential
Heating demand	21,073 MWh (67.6% gas, 0.6% oil, 31.8% district heating)	17,066 MWh (85.6% gas, 14.4% district heating)	12,493 MWh (82.3% gas, 17.7% district heating)	63,117 MWh (88.6% gas, 0.8% oil, 10.6% district heating)
Electricity	9,965 MWh 1	13,859 MWh 1	14,661 MWh 2	1,410 MWh 1
Water	145,131 m³	148,396 m³	173,126 m³	568,541 m³

¹ Electricity consumption, excluding electricity consumed by tenants

² The hotels' own energy consumption is only included for the Vienna Marriott and Budapest Marriott hotels.

Overview of the entire portfolio's energy and water consumption by region in 20171, 2

	Region
	Austria	Germany	CEE
Heating demand	12,862 MWh (11.6% gas, 1% heating oil, 87.4% district heating)	71,883 MWh (91.3% gas, 0.7% heating oil, 8.0% district heating)	29,005 MWh (96.3% gas, 3.7% district heating)
Electricity	9,508 MWh	2,471 MWh	27,915 MWh
Water	111,212 m³	608,106 m³	315,877 m³

¹ Electricity consumption, excluding electricity consumed by tenants

² The hotels' own energy consumption is only included for the Vienna Marriott and Budapest Marriott hotels.

In order to establish a transparent energy footprint for its portfolio properties, S IMMO records the energy sources used for its entire portfolio. In the tenants' interest, S IMMO selects energy suppliers for communal areas in accordance with the cost/benefit principle.

Composition of renewable energy sources in 2017

Based on S IMMO's entire portfolio, hydroelectric power accounted for the largest proportion of renewable forms of energy at 60.4% in 2017, followed by wind power at 13.3% and other renewable energy sources at 10.5%. Since energy suppliers in Germany are not required to indicate the composition of renewable energy, it has been assigned to the category 'Other'.

In 2017, the energy sources in S IMMO's portfolio comprised 46.6% of renewable forms of energy, followed by 17.6% of coal and 15.5% of nuclear energy.

The top three energy sources per region

in 2017
Region
Austria	Germany	CEE
1 Renewable energy (77.3%)	Renewable energy (73.8%)	Renewable energy (33.8%)

It is S IMMO AG's aim to improve its energy footprint over the next years by increasing the share of renewable forms of energy and reducing CO2 emissions.

CO2 emissions in S IMMO's entire portfolio in 2017 (in tonnes)

	Region
	Austria	Germany	CEE
Heating demand	2,480	14,361	7,364
Electricity	1,628	640	13,456

2 Natural gas

(22.7%) Coal (15.0%) Coal (23.9%)

Nuclear power (21.7%)

(5.6%)

3 – Natural gas

S IMMO has made a clear commitment to climate protection and, as part of its sustainability commitment, is focussed on energy efficiency and the use of state-of-the-art technologies. Both in terms of its existing properties and for new project developments, the company always strives to find the best solution to keeping energy consumption, and thus also the operating costs for its tenants, as low as possible. For example, in the case of new projects, efforts are made to obtain green building certificates attesting to sustainability, and thermal optimisations are both considered and, depending on the prevailing market situation, implemented as far as possible (see section 'Ecological construction materials').

The data collected, which form the basis of this report are intended to serve as the basis for monitoring the success of S IMMO's efforts in future.

Use of ecological construction materials

Portfolio properties make up the majority of S IMMO's real estate holdings. In order to meet the growing demand for sustainable construction, the Group launched the gradual certification of its existing properties in 2014. As of 31 December 2017, the total area certified under BREEAM stood at 171,134 m² (2016: 296,247 m²) or 14.5% (2016: 24.6%) of the total area in the portfolio. As a result of sales of certified properties in the past financial year, the percentage of properties with sustainability certificates fell from 2016 to 2017.

However, current development projects, such as the office buildings The Mark in Bucharest and the Einsteinova Business Center in Bratislava, will increase the share of certified buildings again in the future. S IMMO is aiming for a BREEAM sustainability certificate with an 'excellent' rating for both office buildings.

BREEAM stands for Building Research Establishment Environmental Assessment Method and has been the leading worldwide certification system for sustainable construction since 1990. BREEAM building assessments exist for numerous types of buildings. BREEAM International is an assessment method which is used globally and, as a result, makes a key contribution to the international coverage of the assessment method. So far more than 110,000 buildings worldwide have already been certified by BREEAM.

The ecological data of The Mark in Bucharest are excellent: sustainability takes priority at every stage. This is shown by the efficient, flexible interior design offering a range of different workspaces as well as by numerous highly efficient, low-energy installations which, in conjunction with a climate-sensitive façade and an innovative shading system, contribute to reducing the building's energy consumption significantly.

The Einsteinova Business Center in Bratislava has an automatic external shading system, a smart lighting system and an open green space on the third floor. In addition, during the planning for the building, provision was made for charging stations for electric cars, bicycle stands and showers to allow employees to travel to the offices in an environmentally friendly manner. Geothermal energy is used in the building: a ventilation system with humidity control and windows that can be opened contribute to ensuring a particularly pleasant indoor climate.

There is also a clear commitment on S IMMO's part regarding ecological construction materials: The company strives for the highest standards in all new development projects and thus to obtain the accompanying certification; it also examines the need for optimisations in the case of ongoing renovations.

Sustainable mobility

S IMMO AG's properties are located in Austria, Germany and the CEE region and, for the most part, are in the capital cities of the European Union. The vast majority of the buildings are therefore easily accessible on account of the well-developed, local public transport networks, cycle paths and footpaths. In addition, car-sharing schemes are in operation in an increasing number of cities. Location and the ease of accessibility by public transport are key factors when making decisions in connection with development projects and the purchase of properties.

For example, the office project The Mark is located in Bucharest's central business district and can be easily accessed by public transport. An underground station and several tram stops are just a few minutes away. The Sun Plaza shopping centre is located in the south of Bucharest. In addition to direct access to an underground train, a unique feature that is not offered anywhere else in Romania, the shopping centre has excellent connections to numerous forms of other public transport. The Einsteinova Business Center in Bratislava, which is nearing completion, is connected to the old town by a bridge carrying pedestrians and trams. Bus stops located five minutes away by foot and a tram connection offer good accessibility by public transport.

S IMMO is also currently working on two projects in Vienna that are conveniently located as regards transport connections. One of them is a residential property in the fifth district of Vienna with a central location. The building is going to be well connected to Vienna's city centre as it is expected that the newly-constructed section of the U2 underground line is going into operation in 2023. Furthermore, S IMMO has a 35% stake in the Quartier Belvedere Central development in Vienna, which is located at Vienna Central Station. Tram, rapid transit and underground stations are in close proximity.

In the interests of sustainable performance and the satisfaction of its tenants, S IMMO will also attach great importance to location, favourable infrastructure and transport connections when selecting properties and land in future. In this way, the company is demonstrating its readiness to respond to the ever-growing demands of its tenants for sustainable mobility options (such as public transport, bicycle parking, e-charging stations etc.).

Environmental protection and safety in construction

When renovating and developing buildings, S IMMO makes sure to keep noise and dust pollution to a minimum. In addition, effective waste management, the secure handling of chemicals and short transportation distances are key priorities. Efforts are made to exclude contaminated sites by performing thorough location analyses. Where appropriate, professional disposal of waste or treatment of contaminated sites is agreed by means of framework construction contracts. Strict compliance with official regulations is guaranteed in all cases.

S IMMO's building contractors ensure that everyone involved in construction is protected against accidents, taking into account local statutory provisions. S IMMO therefore abides by high quality standards when selecting partner companies and opts for companies which attach great importance to the environment, safety in the workplace and employee protection. For example, S IMMO works in conjunction with ISO-certified partners in Germany.

In the case of project developments, S IMMO works with general contractors and is therefore able to manage concerns relating to environmental protection and safety in construction when selecting partners. When making such selections, S IMMO will also exercise the utmost care and focus on the highest standards in future.

Energy efficiency at S IMMO AG's locations

In addition to its registered office in Vienna, the S IMMO Group has its own employees in Germany, Hungary, Romania and Bulgaria. The property management company Maior Domus in Germany is part of the Group. Employees at all of the S IMMO Group's locations are encouraged to incorporate energy efficiency into their day-to-day work.

Energy and water consumption at S IMMO's locations in 20171

	S IMMO AG (Vienna)	S IMMO Germany (Berlin)	Maior Domus (Berlin)
Heating demand	35,200 kWh	n.a.	77,187 kWh
Electricity	40,417 kWh	20,295 kWh	26,692 kWh
Water	319.0 m³	120.0 m³	167.25 m³

Where information is specific to a location, branches with a team of more than 15 employees are taken into account

CO2 emissions at S IMMO's locations in 20171

1

CO2 emissions in tonnes	S IMMO AG (Vienna)	S IMMO Germany (Berlin)	Maior Domus (Berlin)
Heating demand	6.7	n.a.	14.7
Electricity	0.8	5.3	6.9

Other measures to reduce environmental pollution

Headquarters in Vienna

The responsible use of resources has always been given high priority in S IMMO's business operations. In the past few years, numerous measures have been adopted to minimise environmental impact. One particular concern was to reduce the company's use of paper. To that end, the company has decided, amongst other things, to cease printing all four reports that are published each year and, from now on, to print just the annual and half-year reports, using FSC mix paper for printing. The FSC system guarantees that forests are used in line with the social, economic and ecological requirements of current and future generations.

Furthermore, the S IMMO team is instructed to keep the printing of documents to a minimum ('think before you print'). Last year, around 512,000 pages were printed. This equates to a yearly per capita paper consumption of 11,640 pages. Documents are generally printed on environmentally friendly FSC recycled paper entirely manufactured from waste paper. In addition, employees are asked to avoid printing documents in colour. Old toners are collected and returned for charitable purposes. This is part of a recycling project for the benefit of the children's cancer charity 'Kinder-Krebs-Hilfe'.

Rubbish has been separated at S IMMO AG's headquarters for years. When supplying mineral water in office spaces, the company also ensures that recyclable glass bottles (return&refill system) are used. Plastic caps from bottles and tetra packs are also currently collected for charitable purposes. The old caps are subsequently used to manufacture rubber tyres for wheelchairs.

In the past year, the S IMMO team travelled some 520,000 km by train, plane and car in Austria and Germany. In the coming years, S IMMO will also endeavour to reduce that figure and to keep travel activity to the minimum by using new forms of communication technology.

Kilometres travelled in 2017 (Austria)

Location/figure in km	Pool of company vehicles/ rental vehicles1	Train	Plane	Private cars1	Total
S IMMO AG in Vienna	13,164	11,507	284,931	9,268	318,870
1 Based on travel expense claims

Locations in Germany

Employees at the locations in Germany are also instructed to save paper and to reduce the number of documents printed to the absolute minimum. In the past year, 4,474 pages were printed on recycled paper in Germany per S IMMO Germany employee and 13,000 pages per Maior Domus employee.

There are plans to purchase a number of office bicycles to be used to travel short distances for work and to construct showers to make it easier for bicycles to be used in daily working life. Car pools will also be set up and rail cards for the German rail networks purchased in order to reduce the number of kilometres travelled by car. These measures are greatly appreciated and positively received by the team.

Kilometres travelled in 2017 (Germany)	Pool of
Location/figure in km	company vehicles/ rental vehicles	Train	Plane	Employees' private cars	Total
Maior Domus	77,000	6,500	3,500	No data	87,000
S IMMO Germany	73,000	21,000	18,500	2,400	114,900
Total	150,000	27,500	22,000	2,400	201,900

As in Vienna, mineral water bottles that are part of return&refill systems are also used in Germany.

The data collected for this report are used to take stock of the current situation. All measures adopted to date will also be continued in the future and additional environmentally friendly measures are constantly being examined. In this regard, it is S IMMO's clear objective to increase employee awareness – at all Group locations – of the issues identified above and, in doing so, to improve the related key indicators.

2. Employees and diversity

Qualified employees are S IMMO's most important asset. The company attaches particular importance to providing them with a motivating working environment as well as the personal scope for development and the ability to strike a healthy balance between work and family life. S IMMO therefore supports an open corporate culture in which cooperation as well as the satisfaction and health of all employees are promoted at all levels.

S IMMO aspires to attract the best people for the company and, working together with them, to give its best each and every day. This only works if an environment is created in which employees do not have to decide between their career and their family but can rather combine both aspects. This provides motivation, promotes team spirit and enhances a feeling of solidarity.

Employee structure

S IMMO's employees are the manifestation of the company's comprehensive expertise and make a significant contribution to the company's success. The S IMMO Group had an annual average of 102 employees (2016 annual average: 101) in Austria, Germany, Hungary, Romania and Bulgaria (calculated on the basis of fulltime equivalents). Including hotel staff, the Group employed 577 people (2016 annual average: 575). The two hotels – Vienna Marriott and Budapest Marriott – are operated under management agreements. Management of the hotel staff is therefore a matter for the two hotels and not within S IMMO's control. The two Marriott hotels ensure that the guidelines relating to employee matters are observed.

¹ Not including Vienna Marriott and Budapest Marriott hotels

Team structure by country ¹

Where reference is made in the following to the S IMMO Group, this should be understood to include all employees from Germany, Hungary, Bulgaria and Romania as well as employees based in Vienna. Given the small size of the teams in Hungary and Romania, individual data are only provided for Austria or Austria and Germany. It is made explicitly clear where this approach is adopted.

Health and occupational safety

Promoting the health of its employees and reducing the corresponding risk factors for damage to health in the workplace are particularly important to S IMMO. For this reason, a medical checkup, a melanoma screening programme, seasonal vaccination programmes and various specialist tests are organised each year at the company's headquarters in Vienna. In addition, medical advice concerning the ergonomic design of the workplace is provided on a regular basis. The offers provided are very well received by S IMMO's employees. In order to guarantee occupational safety, there are four first-aiders and one safety officer based in Vienna.

S IMMO also collected sick leave data relating to its employees in the reporting year. On average, employees in Austria and Germany took nine sick days.

Both management and the S IMMO team are very happy with the measures adopted in relation to occupational health and safety. The company will also continue all measures adopted in the years to come.

Diversity and equal opportunities

Diversity and equal opportunities are key aspects of S IMMO's corporate philosophy. As an internationally operating group, S IMMO employs people from many different countries. The Group considers this wealth of languages and cultures to be an extremely valuable resource.

The average age of employees in Austria was 41 in the reporting year. As of 31 December 2017, there were four employees in the <30 age group, 32 in the 30–50 age group and seven in the 50+ age group.

Employees in Austria are covered by a collective agreement. In all countries in which the S IMMO Group has employees, all legal provisions and requirements have high priority and are conscientiously observed.

All locations used by the S IMMO Group itself are barrier-free and ease of access is taken into account for all new buildings.

S IMMO operates a company-wide 'open door policy' and constantly strives to bring all kinds of conflicts to a quick and nonbureaucratic conclusion that is satisfactory to all sides. The satisfaction and well-being of the team is one of S IMMO's key assets, and the greatest care will also be taken to maintain them in future. Making the best possible use of the personal strengths and potential of each individual is not only in the company's own interest, but also increases the motivation and identification of all employees on a sustainable basis. There were no cases of discrimination at S IMMO in the reporting year.

S IMMO AG has set itself the goal of continuously increasing the proportion of women in management positions and is expressly committed to the advancement of women. S IMMO places great emphasis on the advancement of women when filling senior managerial positions. As of 31 December 2017, 53.2% of the S IMMO Group workforce and 44.0% of managers were female. Specific measures to appoint women to the Management Board will be considered when a change to the composition of the Board is due. With the company's best interest in mind, the emphasis when making appointments to the Management Board and the Supervisory Board has been on the maximum degree of professional skill and international experience possible. In addition, the company makes a conscious effort to ensure a diverse composition with regard to professional qualifications and educational background, regardless of gender. There were no women on the Management Board of S IMMO AG in the reporting year. As of 31 December 2017, the proportion of women on the Supervisory Board was 14.3%.

As a listed company, S IMMO is subject to the Austrian Equality between Women and Men on Supervisory Boards Act with effect from 01 January 2018. In accordance with that legislation, preference will be given to female candidates when there is any change to the composition of the Supervisory Board until women account for at least 30% of Board members.

Work-life balance

S IMMO attaches the greatest importance to a healthy work-life balance. The company regards this as key to the increased motivation, stronger commitment and improved performance of its employees; in addition, this makes a major contribution to equal opportunities within the company. S IMMO offers, among other things, flexible working hours and the option of personalised working and part-time work patterns, including in conjunction with study or training. Parental leave and sabbaticals are also supported, as are various schemes to simplify re-entry into the workplace after parental leave. Such opportunities are positively viewed and very well received by S IMMO employees.

As of 31 December 2017, eleven staff members were employed on a part-time basis at S IMMO in Austria and Germany, nine of whom were women. Three employees in Austria were on parental leave or in maternity protection. As of 31 December 2017, a total of four persons with restricted mobility and/or a level of mental disability were employed in the two countries.

It is particularly important for S IMMO that employees' families are also involved in various events. Children are happy when they get to know their parents' workplace, spouses and partners gain an understanding for the business model and contact between families strengthens team spirit and promotes identification with the company. In order to promote a feeling of togetherness and team spirit, a variety of events are organised such as an annual summer festival, a Christmas party, team excursions and joint participation in events such as the Business Run in Vienna. Furthermore, all employees receive meal vouchers that can be redeemed at nearby restaurants.

Period of service in years in Austria ¹ (as of 31 December 2017) Over 10 years: 9 Up to 3 years: 13 5–10 years: 14 3–5 years: 7 1 Not including Vienna Marriott and Budapest Marriott hotels

Employee satisfaction with the measures adopted and their effectiveness in various areas are also shown by the years of service of employees, which averages 6.34 years in Austria.

The turnover rate in Austria and Germany for the reporting year stands at 15.5%. For Austria alone, the turnover rate for that period is 9.3%.

Further education and training, knowledge management

S IMMO provides targeted support to its staff in relation to professional and personal further education and training. Along with individual coaching sessions, language courses and part-time study courses, the primary focus in this area is on expanding employees' industry-specific knowledge, for example through the completion of postgraduate programmes in the field of real estate.

S IMMO regards the annual performance review between employees and their line manager as a key human resources (HR) management tool. The aims of the review are, amongst others, to provide the opportunity for reciprocal feedback, to improve the quality of cooperation between employees and their managers, to promote employees in an efficient and targeted manner for their current and future roles, and to improve the corporate culture and climate of communication.

All the aforementioned measures relating to knowledge management are to be continued in the future. Safeguarding in-house expertise and ensuring the continuous training of its team is a declared aim of S IMMO and a key component of HR management.

Internal communications

S IMMO Group's corporate culture is characterised by lean, efficient structures and interdepartmental collaboration. The close ties fostered with management allow for quick and open communications and is standard practice at S IMMO. The Intranet is used to share information on a company-wide basis and, in the reporting year, was an important platform for the whole team.

3. Ethics and compliance

Combating corruption

The observance of internationally applicable rules, the fair treatment of stakeholders and transparent communications with all target groups are basic cornerstones of S IMMO's corporate culture. As a company listed on the stock exchange, S IMMO AG is subject to the Austrian and European provisions of capital market legislation. Building upon that legislation, the company feels not only bound by the laws but, in addition, has established a policy which lays down codes of conduct for business activity on a companywide basis, particularly with regard to the acceptance of gifts.

Official contact persons are available to all employees at their request and when a breach is suspected. Local management can also be used as the point of contact when reporting compliance infringements.

No cases of compliance violations were reported in 2017 and there were no instances of corruption or cases leading to disciplinary measures, legal proceedings or the termination of an employment relationship. In addition, no supplier contracts had to be terminated on account of breaches of the compliance guidelines. S IMMO was not required to make any penalty payments in connection with cases of corruption or breaches of competition law in the reporting year.

Capital market compliance and corporate governance

For the purpose of preventing market abuse and the misuse of insider information, a guideline governing issuer compliance was established and published company-wide. It is binding for all employees, regulates the handling of insider information and the mangement of the capital market compliance, and clarifies the legal regulations governing insider information.

Since 2007, S IMMO AG has been committed to observing the Austrian Code of Corporate Governance (for more information, see the section on the corporate governance report, from page 80), which contains principles on transparency and good corporate governance. The Management Board has brought corporate governance into line with the principles of the Code and, in conjunction with the Supervisory Board, declares that the company observes and complies with the C Rules (deviations from the C Rules are also set out in the corporate governance report).

All compliance measures will also be continued in the future. Training courses are again planned for the current year and ensuring that all employees are aware of key principles is a declared aim of the company.

Data protection and security

S IMMO is taking the opportunity to revise and expand pre-existing internal guidelines in the course of 2018, not least because of the imminent entry into force of the EU General Data Protection Regulation (GDPR). Furthermore, employees receive appropriate training and are made aware of the obligations accompanying the GDPR.

4. Social responsibility

Architecture and art

Art Supermarket (Kunstsupermarkt)

In 2017, S IMMO made its facilities at 103 Mariahilfer Strasse available to the Vienna Art Supermarket for the 11th time. Over a threemonth period, art enthusiasts could purchase over 6,000 original works by 90 artists from 14 countries at affordable fixed prices. The Art Supermarket is one of the largest contemporary art events in Austria and makes art readily accessible. Alongside disciplines such as drawing, painting and photography, performance art was on display for the first time. Furthermore, S IMMO also provides active support by purchasing works – numerous paintings are hanging in the company's offices.

Artistic design at Sun Plaza, Bucharest

The Sun Plaza shopping centre in Bucharest was renovated and expanded in 2017. The remodelling was fully completed in the first quarter of 2018. A major milestone was celebrated in October 2017: S IMMO was able to get Peter Kogler, an internationally successful Austrian artist, to design two light installations, thereby making a contribution to the exhibition of art in public places. The multimedia artist is taking on the artistic design of a 700 m² glass installation in the entrance of the shopping centre to the underground station and a light installation with a height of about 18 m inside the shopping centre. The latter is the largest individual light ever constructed by the Austrian company Zumbtobel.

Commitment to cultural, social and ecological initiatives

To support sustainable development and change, S IMMO is keen to pursue long-term partnerships in those countries in which it operates.

In addition, it is most important to S IMMO that its employees are actively involved in social projects. As part of corporate volunteering projects, last year two teams from S IMMO took over the cooking at the Caritas day centre at Vienna Central Station, providing hot meals for people in need.

S IMMO has supported various charitable projects which provide people in need with a home under the motto 'Giving shelter' since 2008. In addition, the company is committed to further projects that help young people.

Hoffnungshaus (Hope house) and counselling in Romania

Since 2000, Caritas has operated four hope houses for children and adolescents without parents in Alba Iulia. The aim of the project is to offer young people a safe place to live and a positive future perspective as well as to support them in their integration into society. Thanks to financial assistance from S IMMO, urgently needed repairs and renovation work were carried out at the hope house in 2017.

Day centre, soup kitchen and mobile care in Bulgaria

In the Bulgarian village of Pokrovan, 90% of the residents are over the age of 70. The village is heavily affected by migration – there is neither a school nor a community centre. Many elderly people live in poverty and isolation. Caritas cares for around 40 old and needy people, providing them with hot meals and medical aid. Those unable to visit the day centre receive home visits.

Future for children in Hungary

Members of the Roma minority in Hungary are often affected by poverty and unemployment. At the 'Unser Haus' (Our House) community centre, care is provided to some 90 socially disadvantaged children and adolescents. The aim of the project is to help these people pull themselves out of poverty. S IMMO supports the 'external class' project, which helps pupils to finish school and to start a vocational training programme.

Christmas campaign

The Christmas campaign on S IMMO's website is a now a wellestablished tradition. In 2017, website users were again invited to take part in an online game to raise money for the Caritas Socialis' #mehrRaum campaign ('more room' campaign). The donations collected are being used to extend the hospice area. Increasing the spaces available and converting double rooms into single rooms are measures intended to give hospice guests and their family members the ability to say goodbye to each other in a dignified manner.

Promoting young talent

S IMMO adopts targeted measures to promote young talent in the industry via the academic sector. As part of the existing collaboration with Danube University Krems, the company allowed students of the postgraduate real estate programme to undertake a foreign studies module at S IMMO Germany in Berlin. In addition, a scholarship for the short-term master's level course Green.Building.Solutions was awarded again in 2017. This annual summer programme provides 30 students from the fields of architecture and civil engineering with extensive insight into the topic of sustainable construction.

Financial literacy

Proper money management and basic knowledge about finances and economy are skills which have a great impact on people's lives. Through its financial literacy initiative, S IMMO contributes to making it easier for young people to learn about this issue. To that end, the previous year's online stock market game, Aktien Trophy, was repeated. In addition, the Apropos Geld ('Speaking of Money') financial blog was launched. The aim of the blog is to create an information platform on the subject of money. Interesting articles on that topic are constantly posted online via Facebook. Furthermore, in May 2017, S IMMO – in conjunction with a daily newspaper – organised an event entitled 'Generation Y and the Money'. In the autumn of 2017, S IMMO also took part in a podium discussion on the issue of financial education.

Memberships

For S IMMO, sustainability means taking responsibility for society and the environment. A further expression of the company's well-established CSR concept are its memberships in the corporate platform respACT (Austrian Council for Sustainable Development) and the Austrian Sustainable Building Council (ÖGNI). ÖGNI is committed to creating sustainable living spaces.

S IMMO is convinced that long-term forms of cooperation are the best way of fulfilling its social responsibility on a sustainable basis. For this reason, cooperation with the aforementioned institutions will also be continued in 2018.

Einzelabschluss

Lagebericht 2017 (Einzelabschluss)

Jahresabschluss

• Bilanz
• Gewinn- und Verlustrechnung
• Anhang zum Einzelabschluss

Bestätigungsvermerk (Einzelabschluss)

Lagebericht für das Geschäftsjahr 2017

Geschäftstätigkeit der S IMMO AG

Die S IMMO AG ist eine international tätige Immobilieninvestment- und entwicklungsgesellschaft mit Sitz in Wien und Notiz an der Wiener Börse. Sie ist als Konzernleitgesellschaft der S IMMO-Gruppe direkt bzw. über Tochterunternehmen indirekt in den Segmenten Österreich, Deutschland sowie Zentraleuropa tätig. In ihrem Portfolio hält die Gesellschaft unmittelbar bzw. mittelbar über Tochterunternehmen Büro-, Geschäfts- und Wohnflächen sowie Hotels. Das Unternehmen verfolgt das Ziel, den Unternehmenswert im Sinne seiner Aktionäre durch langfristige, ertragreiche Immobilieninvestments bzw. Immobilienprojektentwicklungen nachhaltig zu steigern. Unter dieser Prämisse entwickelt es das Portfolio beständig weiter und optimiert es durch aktives Asset Management.

Zweigniederlassungen

Der Firmensitz der S IMMO AG ist in Wien. Es bestehen keine Zweigniederlassungen.

Forschung und Entwicklung

Die S IMMO AG betreibt keine Forschung und Entwicklung.

Geschäftsverlauf

Die Umsatzerlöse sind im Geschäftsjahr mit TEUR 21.108 (2016: TEUR 20.332) leicht gestiegen, was auf eine erfolgreiche Vermietungstätigkeit der Bestandsflächen zurückzuführen war. Die sonstigen betrieblichen Erträge betragen TEUR 476 (2016: TEUR 3.661).

Die sonstigen betrieblichen Aufwendungen sind von TEUR 4.454 auf TEUR 4.324 gesunken. Grund dafür sind vor allem geringere Verwaltungskosten und geringerer Rechts- und Beratungsaufwand.

Das Finanzergebnis beträgt TEUR 69.665 (2016: TEUR -1.166). Der hohe positive Wert resultiert vor allem aus höheren Beteiligungserträgen (TEUR 80.499; 2016: TEUR 22.116) sowie deutlich gesunkenen Zinsaufwendungen (TEUR -15.764; 2016: TEUR -31.915).

Die Bilanzsumme ist von TEUR 1.045.729 auf TEUR 1.260.403 zum Bilanzstichtag 31.12.2017 gestiegen. Das Grundkapital beträgt zum Stichtag 31.12.2017 TEUR 243.144. Das Eigenkapital hat sich zum Bilanzstichtag von TEUR 388.505 auf TEUR 458.625 erhöht. Die Eigenkapitalquote betrug zum 31.12.2017 36% (31.12.2016: 37%).

Das Genussscheinkapital ist von TEUR 58.131 per 31.12.2016 auf TEUR 56.717 zum 31.12.2017 gesunken.

Im Berichtszeitraum 2017 hat die S IMMO AG sämtliche von ihr ausgegebenen Genussscheine mit Wirkung zum 31.12.2017 gekündigt, wodurch es im vorliegenden Jahresabschluss zu einer Umgliederung vom langfristigen Fremdkapital in das kurzfristige Fremdkapital kam.

Im Geschäftsjahr 2017 wurden keine Aktien rückgekauft.

Die Verbindlichkeiten gegenüber Kreditinstituten haben sich im laufenden Geschäftsjahr von TEUR 154.695 zum Stichtag 31.12.2016 auf TEUR 113.227 per 31.12.2017 verringert.

Immobilienportfolio in Österreich – wesentliche Ereignisse 2017

In der S IMMO AG kam es im Geschäftsjahr zu keinen Immobilientransaktionen. Innerhalb der Unternehmensgruppe wurden aber Liegenschaften in Bulgarien, Österreich und Deutschland veräußert. V.a. aus dem Verkauf der Büroliegenschaften Viertel 2 Hoch und Viertel 2 Plus in Wien resultierten positive Steuerumlagen, die in Summe einen Ertrag von TEUR 27.716 ergaben.

Voraussichtliche Entwicklung

Die S IMMO AG profitiert vom derzeit niedrigen Zinsumfeld und erwartet für das Geschäftsjahr 2018 in diesem Zusammenhang keine bedeutsamen Änderungen.

Risikomanagement

Als Konzernmuttergesellschaft eines internationalen Immobilienkonzerns ist die S IMMO AG mit einer Vielzahl von Risiken und Chancen konfrontiert, die sowohl auf die operative Geschäftstätigkeit als auch die strategische Unternehmensführung Einfluss haben können.

Durch die Identifizierung, Analyse, Steuerung und Überwachung der Risiken und Chancen versucht die Gesellschaft, negative Entwicklungen und potenzielle Risikofaktoren rechtzeitig zu erkennen und diese in den Entscheidungsprozessen zu berücksichtigen.

Im Konzern-Portfolio befinden sich gewerblich genutzte Immobilien (Büro, Geschäft, Hotel) und ein ergänzender Teil an Wohnimmobilien. Mit der Kombination aus Entwicklung, Ankauf, Vermietung, Betrieb, Sanierung und Verkauf von Immobilien versucht die S IMMO AG, mögliche Risiken zu reduzieren. Die S IMMO-Gruppe ist in vier unterschiedlichen Nutzungsarten operativ tätig und konzentriert sich dabei auf drei regionale Segmente (Österreich, Deutschland und CEE). Diese Streuung ermöglicht es dem Unternehmen, Immobilienzyklen strategisch und bestmöglich zu nutzen.

Das Risikomanagement umfasst neben internen Regelungen und Richtlinien auch laufende Berichte im Rahmen von regelmäßigen Jours fixes an den Vorstand. Weiters existieren Kontrollmaßnahmen, die im Konzern implementiert sind und der Früherkennung, Steuerung sowie Überwachung von Risiken dienen. Der Vorstand trifft die wesentlichen risikorelevanten Entscheidungen. Investitionsvorhaben unterliegen ab einer bestimmten Wertgrenze zusätzlich der Genehmigung durch den Aufsichtsrat. Beide Organe werden über Risiken sowie über das Interne Kontrollsystem regelmäßig informiert.

Die in diesem Abschnitt dargestellten Risikogruppen wurden sowohl rückblickend für das Geschäftsjahr 2017 als auch im Hinblick auf die Geschäftstätigkeit 2018 laufend analysiert und bewertet.

Internes Kontrollsystem

Für alle wesentlichen Geschäftsprozesse besteht ein Internes Kontrollsystem (IKS). Dabei wird unter anderem die Zuverlässigkeit der Finanzberichterstattung überwacht und kontrolliert.

Das IKS bildet gemeinsam mit der Internen Revision und der (börsenrechtlichen) Compliance das interne Überwachungssystem der Gruppe. Wesentliche Kernprozesse sind in der internen Prozessdatenbank erfasst. Diese beinhaltet eine Risiko-Kontroll-Matrix, in der die Abläufe, potenzielle Einzelrisiken und die zugeordneten Kontrollschritte definiert sind.

Wesentliche Merkmale des rechnungslegungsbezogenen IKS sind:

• Klare, schriftlich formulierte Funktionstrennung zwischen den Bereichen Finanz- und Rechnungswesen sowie anderen Verantwortungsbereichen (z. B. Treasury)
• Richtlinien zur Anwendung einheitlicher Bilanzierungs- und Bewertungsmethoden im Konzern
• Beurteilung jener Risiken, die zu einer wesentlichen Fehldarstellung von Transaktionen führen können (z. B. inkorrekte Zuordnung zu Bilanz- und G&V-Positionen)
• Entsprechende Kontrollroutinen bei der automationsgestützten Aufstellung des Einzelals auch des Konzernabschlusses
• Berichte an interne Adressaten (Vorstand und Aufsichtsrat) umfassen unter anderem Quartals-, Segment- und Liquiditätsberichte sowie im Bedarfsfall einzelne anlassbezogene Analysen.

Interne Revision

Die Interne Revision der S IMMO AG koordiniert Prüfungen wesentlicher Geschäftsprozesse der Konzern-Muttergesellschaft bzw. ihrer in- und ausländischen Tochtergesellschaften hinsichtlich ihrer Funktionsfähigkeit, bestehender Risiken und Kontrollschwächen sowie möglicher Effizienzverbesserungspotenziale. Die Grundlage für die in mehrjährigen Zyklen stattfindenden Revisionsprüfungen bildet der vom Vorstand genehmigte operative Jahresrevisionsplan. Zusätzliche werden Sonderprüfungen im Bedarfsfall beauftragt. Mit der Durchführung der Revisionsprüfungen werden ausschließlich externe Expertinnen und Experten beauftragt. Die Ergebnisse der Prüfungen werden an den Vorstand berichtet. Der Prüfungsausschuss des Aufsichtsrats wird regelmäßig über den Revisionsplan sowie die Ergebnisse der durchgeführten Revisionen informiert.

Risikoübersicht

Unternehmensstrategische Risiken	Immobilienspezifische Risiken	Finanzielle Risiken	Sonstige Risiken
Umfeld- und Branchenrisiko	Immobilienportfoliorisiko	Liquiditätsrisiko	Umweltrisiko
Investitionsrisiko	Vermietungs- und Mietausfallrisiko		Rechtsrisiko
		Finanzierungsrisiko

Kapitalmarktrisiko	Immobilienentwicklungsrisiko	Fremdwährungsrisiko
	Bautechnisches Risiko	Steuerliche Risken
	Immobilienbewertungsrisiko

Erläuterung der Einzelrisiken

Unternehmensstrategische Risiken

Strategische Risiken sind eng mit der Geschäftsstrategie der S IMMO AG verbunden und können diese gegebenenfalls stark beeinflussen.

Umfeld- und Branchenrisiko

Die Entwicklung einer Branche ist stark von äußeren Faktoren wie der Konjunktur oder technologischen und politisch-rechtlichen Rahmenbedingungen abhängig. Da sich das wirtschaftliche Umfeld laufend ändert, sind die sich daraus ergebenden Risiken nur schwer prognostizierbar. Eine Verschlechterung der wirtschaftlichen Situation in einem Markt kann die Kauf- und Verkaufspreise, den Wert einer Immobilie und deren Rendite beeinflussen. Darüber hinaus kann es zu Mietreduktionen, Mietausfällen oder zu Kündigung von Mietverträgen durch Mieterinnen und Mieter kommen. Um diesen Risiken zu begegnen, besitzt die S IMMO-Gruppe Immobilien in unterschiedlichen Regionen und mit verschiedenen Nutzungsarten. Auch sorgfältiges Asset-Management und ständiges Monitoring tragen zur Reduktion der beschriebenen Risiken bei. Aktuell zeigt sich folgende Situation auf den von der S IMMO-Gruppe bearbeiteten Märkten: Am Wiener Büroimmobilienmarkt werden 2018 signifikant mehr Flächen fertiggestellt als in den Vorjahren. Dies könnte zu einem Anstieg der Leerstandsrate sowie zu einem höheren Druck auf Vermieterinnen und Vermieter, insbesondere von älteren Objekten, führen. Der konstante Preisanstieg der letzten Jahre am deutschen Wohnimmobilienmarkt erhöht das Risiko einer Preisblase. In einigen CEE-Märkten wie beispielsweise Bukarest, Budapest oder Sofia könnten die zahlreichen Projekte in Bau den Leerstand erhöhen und zu einer Reduktion der Mieten führen. Darüber hinaus hätte ein Ende der wirtschaftlichen Erholung in CEE großen Einfluss auf die Immobilienmärkte.

Investitionsrisiko

Die S IMMO AG ist sowohl bei Investitionen in Immobilienentwicklungsprojekte als auch bei Immobilienzukäufen Risiken ausgesetzt. Diese werden oft durch Faktoren verursacht, die außerhalb des Wirkungsbereichs des Unternehmens liegen, wie beispielsweise Verzögerungen bei der Fertigstellung von Immobilienprojekten. Daher zielt die Unternehmensstrategie darauf ab, durch sorgsame Auswahl, Planung und Ausführung der Immobilienprojekte bzw. der Immobilienzukäufe potenzielle Investitionsrisiken zu reduzieren. Es sind Limits festgelegt, ab welchem Investitionsvolumen eine Genehmigung des Aufsichtsrats erforderlich ist. Dennoch verbleibt bei jeglicher Investition, so auch bei Immobilien, immer ein Restinvestitionsrisiko, das sich beispielsweise auf Cashflows, Bewertungen, etc. negativ auswirken kann.

Kapitalmarktrisiko

Der Kapitalmarkt ist für die S IMMO AG bezüglich der Aufnahme von Eigen- bzw. Fremdkapital von großer Wichtigkeit. Instabile Kapitalmärkte können die Finanzierungsmöglichkeiten des Unternehmens beeinträchtigen. Das Management arbeitet daran, das Vertrauen der Anleger in die von der S IMMO AG emittierten Wertpapiere durch transparente und verlässliche Information und zeitnahe Kommunikation zu stärken.

Immobilienspezifische Risiken

Die S IMMO AG unterliegt allen Risiken, die mit dem Kauf, der Entwicklung, der Bewirtschaftung und dem Verkauf von Immobilien zusammenhängen.

Immobilienportfoliorisiko

Mit einem ausgewogenen Portfolio-Mix begegnet die S IMMO-Gruppe dem Immobilienportfoliorisiko. Im Portfolio befinden sich Gewerbeflächen (Büro, Geschäft, Hotel) und Wohnimmobilien. Geografisch verteilen sich die Objekte auf die Regionen Österreich und Deutschland sowie CEE. Der Wert einer Immobilie hängt zu einem beträchtlichen Teil von ihrem Standort und der beabsichtigten Nutzung ab. Die Attraktivität des Standorts oder die mögliche Nutzung der Objekte können daher die finanzielle Lage der S IMMO-Gruppe erheblich beeinflussen. Das Immobilienportfoliorisiko war im Berichtsjahr nicht in allen Regionen und Nutzungsarten gleichermaßen ausgeprägt: Durch die Streuung innerhalb des Portfolios können Risiken eines Markts durch positive Entwicklungen in einem anderen Markt abgefedert werden.

Vermietungsrisiko und Mietausfallrisiko

Das Vermietungsrisiko ist stark mit der allgemeinen wirtschaftlichen Lage in den einzelnen Märkten verknüpft und damit auch mit entsprechenden Planungsunsicherheiten behaftet. Im laufenden Jahr bleibt auf Grund der unterschiedlichen politischen und wirtschaftlichen Entwicklung der einzelnen Märkte ein Vermietungsrisiko auch bei Vertragsverlängerungen bestehen. Die Konkurrenzsituation kann sich ebenfalls auf den Vermietungsgrad beziehungsweise auf Vertragsverlängerungen auswirken. Der Wettbewerb zwischen den Eigentümern um namhafte Mieter ist intensiv. In einigen Märkten, in denen die S IMMO-Gruppe tätig ist, stehen die Mieten unter Druck. Dies kann dazu führen, dass Mietpreise akzeptiert werden müssen, die niedriger sind als ursprünglich prognostiziert. Außerdem unterliegt die S IMMO-Gruppe dem Mietausfallrisiko. Ist die Gruppe nicht in der Lage, auslaufende Mietverträge zu vorteilhaften Konditionen zu verlängern oder geeignete kreditwürdige Mieter zu finden, die bereit sind, langfristige Mietverhältnisse einzugehen, beeinträchtigt dies den Marktwert der betreffenden Immobilien. Darüber hinaus kann es zu langfristigen Leerständen kommen. Besonders in Zeiten wirtschaftlicher und politischer Unsicherheiten kann die S IMMO-Gruppe dazu gezwungen sein, Mietsenkungen zu akzeptieren, um den Vermietungsgrad aufrecht zu erhalten. Die Bonität eines Mieters, insbesondere während eines wirtschaftlichen Abschwungs, kann kurz- oder mittelfristig sinken. Darüber hinaus kann das Risiko entstehen, dass ein Mieter insolvent wird oder sonst außerstande ist, seinen Zahlungspflichten aus dem Mietvertrag nachzukommen.

Immobilienentwicklungsrisiko

Im Bereich von Immobilienentwicklungen können Risiken im Zusammenhang mit Baukostenüberschreitungen, Errichtungsdauer, (Bau-)Qualitätsmängeln, der Vermietung oder Verzögerungen bei der Erlangung von behördlichen Genehmigungen entstehen. Diesen Risiken begegnet die S IMMO AG mit regelmäßigen Kosten-, Qualitäts- und Terminkontrollen, Abweichungsanalysen.

Bautechnisches Risiko

Unter dem bautechnischen Risiko versteht man das Risiko auftretender Schäden an neu errichteten Objekten und Bestandsobjekten, welche die S IMMO AG durch branchenübliche Bauverträge mit erfahrenen Baufirmen, Gewährleistungsfristen und -garantien reduziert. Um Risiken in diesem Bereich in Grenzen zu halten, werden eingehende Prüfungen vor Ablauf der Gewährleistungsfristen veranlasst, um mögliche Schäden noch auf Kosten der Bauunternehmen zu sanieren. Zur Absicherung gegen klassische Schäden bei Bestandsgebäuden wie Feuer oder Wasser schließt die S IMMO AG marktübliche Versicherungen ab.

Immobilienbewertungsrisiko

Die Immobilienbewertung hängt von verschiedenen makroökonomischen Gegebenheiten – außerhalb des Einflussbereichs der S IMMO AG – und immobilienspezifischen Faktoren ab. Das Immobilienbewertungsrisiko beschreibt in diesem Zusammenhang das Risiko von negativen Wertschwankungen des Immobilienportfolios. Über die erwarteten Mieteinnahmen, den Zustand und den historischen Vermietungsgrad hinaus können Immobiliensachverständige auch andere Faktoren wie beispielsweise Steuern auf Grund und Boden, Betriebskosten, Ansprüche Dritter auf Basis von Umweltrisiken oder mit bestimmten Baumaterialien verbundene Risiken berücksichtigen. Jede Wertänderung einer Immobilie kann den Bilanzgewinn oder -verlust der S IMMO AG und in weiterer Folge das Eigenkapital und somit auch den Börsenkurs und die Kreditwürdigkeit der S IMMO AG negativ beeinflussen.

Finanzielle Risiken

Die Steuerung von finanziellen Risiken beinhaltet für die S IMMO AG vor allem die Berücksichtigung von Liquiditäts-, Zinsänderungs-, Finanzierungs- und Währungsrisiken.

Liquiditätsrisiko

Zur Sicherstellung der Liquidität werden die Zahlungsströme des Unternehmens von der Finanzierungsabteilung auf Basis einer kontinuierlichen Liquiditätsplanung in Zusammenarbeit mit den Bereichen Projektentwicklung, Asset Management und Akquisition koordiniert, auf Plausibilität geprüft und laufend angepasst.

Die Gruppe verfügt über fluktuierende Bestände liquider Mittel, die sie nach den jeweiligen operativen und strategischen Erfordernissen und Zielen veranlagt. Weiters tätigt sie

Absicherungsgeschäfte, insbesondere um sich gegen Zinsänderungen und die damit verbundenen Schwankungen ihrer Finanzierungskosten abzusichern. Solche Absicherungsgeschäfte könnten sich als ineffizient oder ungeeignet herausstellen, um die angestrebten Ziele zu erreichen, sowie zu ergebniswirksamen Verlusten führen. Darüber hinaus ist die Gruppe dem Risiko ausgesetzt, dass ihre Vertragspartner die Verpflichtungen aus den Absicherungs- oder Veranlagungsgeschäften nicht vereinbarungsgemäß erfüllen (Kontrahentenrisiko). Diesem Risiko begegnet die S IMMO-Gruppe, indem sie Veranlagungsund Absicherungsgeschäfte nur bei namhaften Banken mit guter Bonität abschließt. Auf Grund verschärfter Eigenkapital- und Liquiditätsvorschriften für Banken und daraus resultierender restriktiverer Kreditvergaben sowie reduzierter Beleihungshöhen kann es zu Schwierigkeiten bei Refinanzierungen kommen. Die S IMMO-Gruppe kann davon trotz überwiegend langfristig abgeschlossener Kreditverträge hauptsächlich bei Kreditverlängerungen und Refinanzierungen betroffen sein (siehe auch Finanzierungsrisiko). Das Risiko kann primär auftreten, wenn es bei Kreditverlängerungen oder Refinanzierungen zu Verzögerungen kommt oder diese in einer geringeren Höhe als erwartet erfolgen. Würde es der S IMMO-Gruppe nicht oder nicht zeitgerecht gelingen, geeignete und angemessene Fremdkapitalfinanzierungen für Projektentwicklungen und Akquisitionen oder die Refinanzierung auslaufender Fremdkapitalfinanzierungen in Anspruch zu nehmen, könnte dies die Fähigkeit erheblich beeinträchtigen, ihren Verpflichtungen aus Projektentwicklungsverträgen oder Akquisitionsprojekten nachzukommen.

Weiters besteht das Risiko, Anleihen bei Laufzeitende nicht zurückzahlen zu können.

All diese Folgen oder eine aus mangelnder Verfügbarkeit freier Liquidität resultierende Unfähigkeit, den Verpflichtungen aus bereits bestehenden Finanzierungsverträgen und Teilschuldverschreibungen nachzukommen, können einen wesentlich nachteiligen Einfluss auf die Vermögens-, Finanz- und Ertragslage des Unternehmens haben und seine Bonität beeinträchtigen.

Zinsänderungsrisiko

Der weitaus überwiegende Teil der Finanzierungsverträge der S IMMO-Gruppe sieht einen variablen Zinssatz vor, wodurch das Risiko eines sich ändernden Zinsniveaus besteht. Die Kosten des Zinsendiensts erhöhen sich bei Anstieg des jeweiligen Referenzzinssatzes. Derzeit

wird allerdings erwartet, dass die Europäische Zentralbank den Leitzins vorerst weiterhin auf sehr niedrigem Niveau belässt. Das Zinsänderungsrisiko reduziert die S IMMO-Gruppe langfristig durch Zinsabsicherungen ihrer variabel verzinsten Kredite. Per 31.12.2017 waren 20% (31.12.2016: 13%) der Kreditverbindlichkeiten fix und 80% (31.12.2016: 87%) der Kreditverbindlichkeiten – größtenteils an den Drei-Monats-Euribor gebunden – variabel verzinst. Zur Absicherung variabel verzinster Kredite verwendet die S IMMO-Gruppe prinzipiell Swaps und Caps als derivative Zinsabsicherungsinstrumente. Per Jahresende war ein Großteil des variabel verzinsten Finanzierungsportfolios abgesichert. Das Ausmaß, in dem sich die Gruppe derartiger Instrumente bedient, hängt von den Annahmen und Markterwartungen des Managements und der zuständigen Mitarbeiterinnen und Mitarbeiter der S IMMO-Gruppe in Bezug auf das zukünftige Zinsniveau sowie von der Entwicklung der Höhe der Kreditverbindlichkeiten ab. Erweisen sich diese Annahmen als unrichtig, kann dies zu einem beträchtlichen Anstieg des Zinsaufwands führen. Die durchgeführten Stresstests, welche die bestehenden Anleihen inkludieren, zeigen, dass die S IMMO-Gruppe an Änderungen des Zinsniveaus in einem geringen Ausmaß partizipiert. Ein Euribor von 1,0% p.a. führt zu einer Erhöhung der Cost of Funding um 15 Basispunkte. Dies hat zur Folge, dass die Gesellschaft im Falle von Zinssteigerungen – trotz Absicherung durch derivative Finanzinstrumente – höheren Finanzierungskosten ausgesetzt wäre.

Finanzierungsrisiko

Die Marktbedingungen für Liegenschaftsfinanzierungen ändern sich immer wieder und verschlechterten sich beispielsweise im Laufe der Finanz- und Wirtschaftskrise deutlich. Im Vorjahr verbesserte sich die Refinanzierungssituation jedoch weiter. Refinanzierungen – auch großer Volumina – konnten auf Grund des Veranlagungsdrucks vieler Banken, insbesondere in Deutschland und Österreich, zu weiter sinkenden Margen abgeschlossen werden. Auch in CEE hat sich die Kreditaufnahme – abhängig von der Assetklasse, der Lage und der Kredithöhe – verbessert. In Ungarn hat sich die Situation verbessert, ist jedoch gegenüber anderen Ländern nach wie vor schwierig, da viele Banken bei der Neukreditvergabe zur Immobilienfinanzierung sehr restriktiv sind beziehungsweise sich ganz aus Ungarn zurückgezogen haben.

Die Attraktivität verschiedener Finanzierungsvarianten hängt von einer Reihe von Faktoren ab, von denen einige nicht von der Gruppe beeinflusst werden können. Diese Faktoren umfassen insbesondere Marktzinsen, steuerliche Aspekte und die Beurteilung des Werts und der

Verwertbarkeit von Immobilien, die als Sicherheiten dienen, sowie die Einschätzung der allgemeinen wirtschaftlichen Lage durch die Finanzierungspartner. In Zeiten stark volatiler Immobilienmärkte sind Fremdkapitalgläubiger unter Umständen nicht bereit, abreifende Kredite zu für die S IMMO-Gruppe akzeptablen Konditionen zu prolongieren. Dies kann insbesondere zu höheren Margen, geringeren Beleihungshöhen und der Notwendigkeit zur Bestellung weiterer Sicherheiten sowie generell zu einem Mangel an Refinanzierungsmöglichkeiten führen.

Sollte die Gruppe außerstande sein, Liquidität oder Fremdmittel im benötigten Ausmaß zur benötigten Zeit zu generieren beziehungsweise zu akzeptablen Konditionen aufzunehmen, könnte ihre Fähigkeit beeinträchtigt sein, ihren Verpflichtungen aus Finanzierungsverträgen nachzukommen. Dieses Finanzierungsrisiko versucht die S IMMO-Gruppe durch Streuung ihrer Kreditgeber (zum Bilanzstichtag per 31.12.2017 waren es 23 Einzelbanken) zu reduzieren. Eine Kontrolle der Kreditaufnahmen erfolgt durch Genehmigungen nach gestaffelten Beträgen durch den Vorstand und den Aufsichtsrat. Per 31.12.2017 hatten die langfristigen Bankverbindlichkeiten eine durchschnittlich gewichtete Restlaufzeit von 6,4 Jahren. Die Langfristigkeit der Finanzierung entspricht der branchenüblichen Praxis.

Darüber hinaus besteht das Risiko, dass Financial Covenants (Klauseln in Kreditverträgen hinsichtlich des zulässigen Verschuldungsgrads und des Schuldendienstdeckungsgrads) oder andere Vertragsbedingungen, Gewährleistungen oder Auflagen in Finanzierungsverträgen nicht eingehalten werden können. Dies kann die Flexibilität bei der Finanzierung zukünftiger Geschäftstätigkeit einschränken. Die Einhaltung von Financial Covenants wird von der S IMMO Gruppe – in engem Kontakt mit kreditvergebenden Finanzinstituten – laufend überwacht. Covenant-Verletzungen können einen Verzugsfall darstellen. Die Gruppe legt großen Wert auf ein ausgewogenes Verhältnis zwischen Finanzierungen und Immobilienbuchwerten der Objekte (Loan-to-Value-Ratio). Zum Stichtag 31.12.2017 lag die Loan-to-Value-Ratio für besicherte Finanzierungen bei 36,6% (2016: 41,3%). Darüber hinaus verfügt die Gruppe über unbesicherte Finanzierungen (ausgenutzte Kreditlinien, Anleiheverbindlichkeiten und nachrangiges Genussrechtskapital), welche zum 31.12.2017 12,7% (2016: 14,6%) des Immobilienvermögens ausmachten. Trotz genauen Monitorings der Finanzierungsinstrumente und der relevanten Parameter kann bei entsprechend negativer Entwicklung der Konjunktur und des Finanzierungsumfelds nicht ausgeschlossen werden, dass die S IMMO-Gruppe mit Risiken im Bereich der Refinanzierung konfrontiert wird.

Fremdwährungsrisiko

Kreditfinanzierungen der S IMMO AG sind ausschließlich in Euro denominiert und die Mietverträge sind ausschließlich an den Euro gebunden. Daher besteht kein unmittelbares Fremdwährungsrisiko.

Sonstige Risiken

Steuerliche Risiken

Als international tätiger Immobilienkonzern mit Gesellschaften in derzeit neun europäischen Ländern ist die S IMMO-Gruppe mit einer Vielzahl von unterschiedlichen - laufenden Änderungen unterworfenen - nationalen Steuersystemen konfrontiert. Änderungen der lokalen steuerlichen Rahmenbedingungen (zum Beispiel bei den immobilienbezogenen Steuern, Umsatz- bzw. Ertragsteuern) sowie Unsicherheiten in der bzw. unterschiedliche Auffassungen in Bezug auf die Auslegung der vielfach komplexen steuerlichen Vorschriften können zu nicht geplanten Steuerbelastungen führen und stellen damit stets ein Ertragsrisiko dar. Die S IMMO-Gruppe versucht, allfällige Konsequenzen durch die kontinuierliche Zusammenarbeit mit lokalen Steuerexperten frühzeitig zu erkennen, bei der Entscheidungsfindung zu berücksichtigen sowie für (aus Betriebsprüfungen bzw. steuerlichen Verfahren) bekannte Risiken ausreichende bilanzielle Vorsorgen zu treffen.

Umweltrisiko

Die S IMMO-Gruppe ist diversen Umweltrisiken wie Naturkatastrophen oder menschlich verursachten Katastrophen ausgesetzt. Umweltrisiken können sowohl im Zusammenhang mit Bestandsimmobilien als auch mit Entwicklungsprojekten auftreten. Beispielsweise können geänderte Gesetze oder Sanierungsverpflichtungen auf Grund umwelt- oder sicherheitsrechtlicher Vorschriften das Entfernen oder den Austausch von Materialien notwendig machen. Ebenso kann die Entsorgung umweltschädlicher Substanzen auf einem Entwicklungsgrundstück erforderlich sein. Neue oder strengere Umwelt-, Gesundheits- und Sicherheitsgesetze können ebenfalls zusätzliche Kosten verursachen.

Naturkatastrophen oder extreme Wettereinwirkungen wie beispielsweise Überflutungen, Sturm und Hagel können erhebliche Schäden an im Bau befindlichen Objekten oder Bestandsimmobilien verursachen. Ebenso können auch von Menschen verursachte Katastrophen wie zum Beispiel nukleare Zwischen- und Störfälle zu Schäden führen. Durch entsprechende Gebäudeversicherungen sind wesentliche Schäden an Gebäuden abgedeckt. Die S IMMO-Gruppe versucht, Umweltrisiken dadurch zu senken, dass bei Akquisitionen und Investitionen genaue Standortanalysen durchgeführt und gegebenenfalls Garantieerklärungen eingeholt werden. Weiters agiert die S IMMO-Gruppe verantwortungsvoll sowohl bei Bestandsimmobilien als auch bei Entwicklungsprojekten, indem auf qualitativ hochwertige Materialien und Bauweisen geachtet wird. In diesem Zusammenhang erhielten bereits mehrere Gebäude der S IMMO-Gruppe Green-Building-Zertifikate.

Rechtsrisiko

Die S IMMO AG ist auf Grund ihrer Geschäftstätigkeit einer Vielzahl rechtlicher Risiken ausgesetzt. Diese resultieren unter anderem aus Rechtsstreitigkeiten im Zusammenhang mit der operativen Geschäftstätigkeit der S IMMO AG (zum Beispiel Streitigkeiten aus Immobilientransaktionen oder mit Baufirmen) und regulatorischen Risken. Für laufende Rechtsstreitigkeiten werden gegebenenfalls im erforderlichen Ausmaß Rückstellungen gebildet. Da der Ausgang (schieds-)gerichtlicher Verfahren in der Regel schwer vorhersehbar ist, können über die dotierten Rückstellungen hinausgehende Aufwendungen entstehen. Signifikante Risiken können sich auch aus Veränderungen der Rechtslage ergeben, zumal die S IMMO AG in einem stark regulierten Umfeld tätig ist.

Gesamtaussage zu Risiken und Chancen

Die Geschäftstätigkeit der S IMMO AG unterliegt einer Vielzahl von Risiken und ist stark von der Konjunktur in den bearbeiteten Märkten abhängig. Die Europäische Zentralbank (EZB) erwartet ein stabiles Wachstum der Währungsunion und rechnet mit einem Konjunkturplus von 2,4 %. Als großer Unsicherheitsfaktor gilt nach wie vor der Brexit und seine Folgen sowie Einschränkungen beim Freihandel unter der derzeitigen US-Administration. Was die Immobilienmärkte anbelangt, so profitiert die Gruppe von der nach wie vor anhaltenden Dynamik am Büromarkt und der konstanten Nachfrage nach Wohnungen in Berlin. In CEE erholen sich die Büromärkte in Budapest, Bukarest und Sofia. Sollte es in den genannten Märkten wieder zu einer

Verschlechterung der wirtschaftlichen Situation kommen, müsste die Gruppe mit einem erhöhten Branchen-, Immobilienportfolio-, Vermietungs- und Mietausfallrisiko rechnen. Eine Entspannung sieht die Gruppe auch beim Finanzierungsrisiko. Das anhaltende niedrige Zinsniveau schafft weiterhin ideale Rahmenbedingungen für die Immobilienbranche. Refinanzierungen konnten vor allem in Österreich und Deutschland zu niedrigeren Margen abgeschlossen werden. Auch in CEE sind Kreditaufnahmen leichter geworden. Ein weiterer Risikofaktor bleibt die Volatilität auf den Kapitalmärkten. Allerdings hat die S IMMO-Aktie aktuell eine sehr solide Performance.

Die S IMMO-Gruppe begegnet den Risiken mit sorgfältigem Risikomonitoring und verantwortungsvoller Risikopolitik. Darüber hinaus wird ausreichende bilanzielle Vorsorge für potenzielle Risiken getroffen.

Den beschriebenen Risiken stehen Chancen gegenüber: Europäische Großstädte wie Berlin oder Wien erleben einen starken Zuzug, was sich in einer steigenden Nachfrage sowohl bei Wohn- als auch Büroimmobilien widerspiegelt. Vor diesem Hintergrund treibt die S IMMO-Gruppe ihre Entwicklungsprojekte voran und nutzt Gelegenheiten für An- und Verkäufe. Am Kapitalmarkt bieten sich dem Unternehmen trotz der beschriebenen Volatilitäten ebenfalls Chancen: Die S IMMO-Aktie hat sich mit einem Jahresplus von 61,50 % per 31.12.2017 ausgezeichnet entwickelt, notiert aber nach wie vor unter ihrem EPRA-NAV, was weiteres Kurspotenzial birgt.

Finanzielle und nichtfinanzielle Leistungsindikatoren

Strategisches Ziel ist die nachhaltige Steigerung des Unternehmenswertes. Zentrale finanzielle Leistungsindikatoren (Kennzahlen) sind dabei für den Gesamtkonzern u.a. der NAV pro Aktie, die Loan-to-Value (LTV)-Ratio sowie Kennzahlen wie der FFO (Funds from Operations) und die Eigenkapitalquote.

Für die S IMMO AG wurden folgende finanzielle Leistungsindikatoren identifiziert:

		2017	2016
Eigenkapitalquote	%	36	37
Betriebsergebnis	TEUR	716	3.007

Diese Finanzkennzahlen werden zur Steuerung des operativen Geschäfts durch mehrere nichtfinanzielle Leistungsindikatoren (Leerstandsrate, Portfoliostreuung, Standortqualität) ergänzt.

Der Netto-Geldfluss aus laufender Geschäftstätigkeit beträgt für 2017 TEUR 14.980 (2016 TEUR 1.895). Der Cashflow aus der Investitionstätigkeit beträgt TEUR -133.652 (2016 TEUR 6.262), der Cashflow aus der Finanzierungstätigkeit beträgt TEUR 126.168 (2016 TEUR 28.419). Die Verbesserung des operativen Cashflows gegenüber 2016 beruht im Wesentlichen auf im Vergleich zum Vorjahr um rd. 17,1 Mio. EUR geringeren Zinsaufwendungen. Der Cashflow aus der Investitionstätigkeit ist im Wesentlichen von an Tochterunternehmen gegebenen Zuschüssen und Ausleihungen geprägt, die im Berichtsjahr deutlich höher waren als 2016. Der Cashflow aus der Finanzierungstätigkeit war 2017 maßgeblich von der Erhöhung von Konzerndarlehen geprägt. Im Geschäftsjahr 2017 wurde keine neue Anleihe begeben.

Gesamt kommt es in der zahlungswirksamen Veränderung des Finanzmittelbestandes zu einer Erhöhung um TEUR 6.767 (2016 Erhöhung um TEUR 36.576), womit der Finanzmittelbestand am Ende der Periode TEUR 43.737 (2016 TEUR 36.970) beträgt.

Die Geldflussrechnung wurde auf Basis des Fachgutachtens KFS/BW 2 des Fachsenates für Betriebswirtschaft und Organisation erstellt.

Informationen gemäß § 243a Abs. 1 Unternehmensgesetzbuch (UGB)

Gemäß § 243a Abs. 1 Unternehmensgesetzbuch (UGB) sind die folgenden Informationen anzugeben:

1. Das Grundkapital der S IMMO AG beträgt zum Bilanzstichtag 31.12.2017 EUR 243.143.569,90 und ist in 66.917.179 auf Inhaber lautende Stückaktien zerlegt. Es bestehen keine unterschiedlichen Aktiengattungen.

2. Die Satzung der S IMMO AG beschränkt das Stimmrecht jedes Aktionärs in der Hauptversammlung mit 15 % der ausgegebenen Aktien (Höchststimmrecht). Hierbei sind die Aktien von Unternehmen, die miteinander einen Konzern im Sinne des § 15 Aktiengesetz (AktG) bilden, zusammenzurechnen, ebenso die Aktien, die von Dritten für Rechnung des betreffenden Aktionärs oder eines mit ihm konzernmäßig verbundenen Unternehmens gehalten werden. Zusammenzurechnen sind weiters Aktienbestände von Aktionären, die bei der Ausübung der Stimmrechte auf Grund eines Vertrags oder auf Grund abgestimmten Verhaltens gemeinsam vorgehen. Dem Vorstand der S IMMO AG sind (abgesehen von der gemeinsamen Stimmrechtspolitik zwischen der Erste Asset Management GmbH und der ERSTE-SPARINVEST Kapitalanlagegesellschaft m.b.H.; siehe dazu Punkt 3.) keine Vereinbarungen über Beschränkungen, die Stimmrechte oder die Übertragung von Aktien betreffen, bekannt.

3. Der Gesellschaft wurden folgende Beteiligungen über 10 % an ihr gemäß § 91 ff. Börsegesetz (BörseG) in der jeweils geltenden Fassung (entspricht §§ 130 ff des BörseG 2018) gemeldet:

Am 20.04.2009 meldete die Sparkassen Versicherung Aktiengesellschaft (FN 82351 f; nunmehr Sparkassen Versicherung AG Vienna Insurance Group), ein Konzernunternehmen der Vienna Insurance Group, gemäß § 91 Abs. 1 BörseG, dass sie ihre Beteiligung an der Sparkassen Immobilien AG (nunmehr S IMMO AG) auf 7.000.000 Stückaktien, was circa 10,27 % des damaligen Grundkapitals beziehungsweise circa 10,46 % des derzeitigen, im Zuge der Einziehung eigener Aktien zum 19.12.2013 herabgesetzten Grundkapitals entspricht, erhöht hat.

Am 04.05.2017 erhielt die S IMMO AG eine Mitteilung gem. § 91 ff BörseG von Ronny Pecik, dass die verbundenen Unternehmen Pavus Immobilien GmbH & Co KG (FN 466427y) 8,00 % und Everest Investment GmbH & Co KG (FN 469572y) 3,35 % der Aktien der S IMMO AG erworben haben.

Am 28.12.2017 erhielt die S IMMO AG von Ronny Pecik eine Mitteilung gem. § 91ff BörseG, wonach die RPR Privatstiftung (FN 191884 h) durch ihre indirekte Tochtergesellschaft Theos GmbH (FN 421950s) (gehalten über die direkte Tochtergesellschaft Luxury Living GmbH (künftig: Theola Invest GmbH; FN 456014 i) als Käuferin mit Aktienkaufvertrag vom 28.12.2017

(entspricht Valutadatum) 6.832.561 weitere Aktien der S IMMO AG von der Erste Group Bank AG (FN 33209 m) als Verkäuferin erhalten habe und die RPR-Gruppe somit über ihre indirekten Tochtergesellschaften Theos GmbH, Everest Investment GmbH & Co KG und Pavus Immobilien GmbH & Co KG insgesamt 14.629.756 Aktien, d.s. rd. 21,86 % an der S IMMO AG hält.

Am 28.12.2017 erhielt die S IMMO AG von der Familie Benko Privatstiftung (FN 209416 s) eine Mitteilung gem. § 91 ff BörseG, dass die Familie Benko Privatstiftung durch die von ihr kontrollierte SIGNA Holding GmbH (FN 191343 m) eine Option auf Erwerb sämtlicher Geschäftsanteile an der Luxury Living GmbH (künftig Theola Invest GmbH) erworben habe.

Gemäß den Mitteilungen gem §§ 91 ff BörseG vom 28.12.2017 der Familie Benko Privatstiftung und von Ronny Pecik haben die RPR Privatstiftung, die Theola Invest GmbH, die Theos GmbH, die Everest Investment GmbH & Co KG und die Pavus Immobilien GmbH & Co KG jeweils am 28.12.2017 Vereinbarungen mit der SIGNA Holding GmbH abgeschlossen, wonach (i) die SIGNA Holding GmbH den Ankauf der 6.832.561 weiteren Aktien der S IMMO AG mit Substanzgenussrechten der Theola Invest GmbH finanziert, (ii) SIGNA Holding GmbH vom 15.01.2018 bis 15.12.2019 das Recht habe, die von der Everest Investment GmbH & Co KG gehaltenen 2.443.770 Aktien und die von der Pavus Immobilien GmbH & Co KG gehaltenen 5.353.425 Aktien der S IMMO AG zu erwerben und den gesamten Geschäftsanteil an der Theola Invest GmbH, welche indirekt über die Theos GmbH 6.832.561 Aktien an der S IMMO AG halte, zu erwerben, (iii) SIGNA Holding GmbH vom 30.09.2018 bis 30.06.2019 verpflichtet sei, auf gemeinsames Verlangen der Everest Investment GmbH & Co KG und der Pavus Immobilien GmbH & Co KG die von Ersterer gehaltenen 2.443.770 Aktien und die von Zweiterer gehaltenen 5.353.425 Aktien an der S IMMO AG zu erwerben, sowie (iv) SIGNA Holding GmbH vom 15.01.2020 bis 30.06.2020 verpflichtet sei, auf Verlangen der Theos GmbH die von dieser gehaltenen 6.832.561 Aktien der S IMMO AG und auf Verlangen der RPR Privatstiftung den von dieser gehaltenen Geschäftsanteil an der Theola Invest GmbH, welche indirekt über die Theos GmbH 6.832.561 Aktien der S IMMO AG halte, zu erwerben. Hingewiesen wurde darauf, dass das Stimmrecht jedes Aktionärs in der Hauptversammlung der Emittentin gemäß § 13 (3) der Satzung der Emittentin mit 15% der ausgegebenen Aktien beschränkt ist.

Die Erste Asset Management GmbH meldete am 30.11.2011 gemäß § 91 Abs. 1 BörseG, dass sie gemeinsam mit ihren Tochtergesellschaften RINGTURM Kapitalanlagegesellschaft m.b.H.

und ERSTE-SPARINVEST Kapitalanlagegesellschaft m.b.H. eine gemeinsame Stimmrechtspolitik verfolge und daher Stimmrechtsmitteilungen der verwalteten Fondsbestände kumuliert erfolgen. Dementsprechend meldeten die drei genannten Gesellschaften, dass sie per 29.11.2011 insgesamt 8.130.557 Stimmrechte an der S IMMO AG hielten, was circa 11,94 % des damaligen Grundkapitals und circa 12,15 % des derzeitigen, im Zuge der Einziehung eigener Aktien zum 19.12.2013 herabgesetzten Grundkapitals, entspricht. Die RINGTURM Kapitalanlagegesellschaft m.b.H. wurde mit Wirksamkeit zum 31. Dezember 2015 auf die Erste Asset Management GmbH verschmolzen.

Die S IMMO AG weist klarstellend darauf hin, dass sie auf Grund von Meldungen gemäß § 91 ff. BörseG in der jeweils geltenden Fassung (entspricht §§ 130 ff des BörseG 2018) vom Entstehen der genannten Beteiligungen über 10 % erfahren hat und daher unter anderem die Vollständigkeit und Richtigkeit obiger Aufzählung nicht garantieren kann. Darüber hinaus haben Meldungen gemäß BörseG nur beim Erreichen, Über- oder Unterschreiten der darin festgesetzten Schwellenwerte zu erfolgen, weshalb das tatsächliche (aktuelle) Beteiligungsausmaß von den gemeldeten Zahlen abweichen kann.

1. Es bestehen keine Aktien mit besonderen Kontrollrechten.

2. Arbeitnehmer, die im Besitz von Aktien sind, üben bei der Hauptversammlung ihr Stimmrecht gegebenenfalls unmittelbar aus.

3. Der Vorstand besteht aus zwei, drei oder vier Mitgliedern.

Die Mitglieder des Vorstands werden vom Aufsichtsrat mit Dreiviertelmehrheit der abgegebenen Stimmen bestellt. Der Aufsichtsrat kann dabei auch ein Mitglied des Vorstands zum Vorsitzenden und eines zum Stellvertreter des Vorsitzenden bestimmen.

Auch dieser Beschluss bedarf einer Dreiviertelmehrheit der abgegebenen Stimmen. Eine Bestellung zum Vorstand ist letztmalig vor Erreichen des 65. Lebensjahres möglich. Der Aufsichtsrat besteht aus höchstens zehn von der Hauptversammlung gewählten Mitgliedern. Beschlüsse über ordentliche Kapitalerhöhungen beschließt die Hauptversammlung mit einfacher Mehrheit der abgegebenen Stimmen und mit einfacher Mehrheit des bei der Beschlussfassung vertretenen Grundkapitals.

1. In der 27. ordentlichen Hauptversammlung vom 03.06.2016 wurde dem Vorstand die Ermächtigung erteilt, nach den Bestimmungen des § 65 Abs. 1 Z 8 AktG für die Dauer von 30 Monaten ab dem Datum der Beschlussfassung, somit bis 03.12.2018, mit Zustimmung des Aufsichtsrats eigene Aktien im gesetzlich zulässigen Höchstausmaß von bis zu 10 % des Grundkapitals der Gesellschaft, auch wiederholt, zu erwerben und gegebenenfalls einzuziehen. Derzeit hält die Gesellschaft 525.421 eigene Aktien was 0,7852% des derzeitigen Grundkapitals entspricht. Der Vorstand wurde auch ermächtigt, für die Dauer von fünf Jahren ab Beschlussfassung, somit bis 03.06.2021, mit Zustimmung des Aufsichtsrats für die Veräußerung der eigenen Aktien auch eine andere Art als über die Börse oder durch ein öffentliches Angebot unter Ausschluss des Bezugsrechts der Aktionäre zu beschließen.

2. Die im Juni 2014 begebene 4,5 % S IMMO Anleihe 2014 – 2021 (Volumen rund EUR 90 Mio.), die im Oktober 2014 begebene 3 % S IMMO Anleihe 2014 – 2019 (Volumen EUR 100 Mio.), die im April 2015 begebene 3,25 % S IMMO Anleihe 2015 – 2025 (Volumen rund EUR 34 Mio.), die im April 2015 begebene 3,25 % S IMMO Anleihe 2015 – 2027 (Volumen EUR 65 Mio.) sowie die im Februar 2018 begebenen 1,75 % S IMMO Anleihe 2018 – 2024 (Volumen 100 EUR Mio.) bzw. die 2,875 % S IMMO Anleihe 2018 – 2030 (Volumen EUR 50 Mio.) enthalten sogenannte Change-of-Control-Klauseln. Gemäß den Bedingungen der 2014 und 2015 begebenen Anleihen sind die Anleihegläubiger im Falle eines Kontrollwechsels zur Kündigung der Teilschuldverschreibung berechtigt und können die sofortige Rückzahlung verlangen. Gemäß den Bedingungen der im Februar 2018 begebenen Anleihen sind die Anleihegläubiger im Falle eines Kontrollwechsels zur Kündigung der Teilschuldverschreibung berechtigt sofern dieser Kontrollwechsel zu einer wesentlichen Beeinträchtigung der Fähigkeit der Emittentin führt, ihre Verpflichtungen aus den Teilschuldverschreibungen zu erfüllen.

Ein Kontrollwechsel findet gemäß den Bedingungen der Anleihen dann statt, wenn eine oder mehrere gemeinsam vorgehende Personen oder eine Drittperson oder -personen, die für eine solche Person oder Personen handeln, zu irgendeiner Zeit direkt oder indirekt (i) mehr als 50 % der mit den Aktien der Emittentin verbundenen Stimmrechte (ohne Berücksichtigung des Höchststimmrechts) oder (ii) das Recht, die Mehrzahl der Mitglieder des Vorstands der Emittentin und/oder der Kapitalvertreter im Aufsichtsrat der Emittentin zu bestimmen, erworben haben.

1. Es bestehen keine Entschädigungsvereinbarungen zwischen der Gesellschaft und ihren Vorstands- und Aufsichtsratsmitgliedern oder Arbeitnehmerinnen und Arbeitnehmern für den Fall eines öffentlichen Übernahmeangebots.

Wien, am 20. März 2018

Der Vorstand:

Mag. Ernst Vejdovszky Mag. Friedrich Wachernig, MBA

Bilanz zum 31. Dezember 2017

A k t i v a

			31.12.2017		31.12.2016
		EUR	EUR	TEUR	TEUR
	A. Anlagevermögen
I.	Immaterielle Vermögensgegenstände
	ähnliche Rechte		57.680,94		91
II.	Sachanlagen
	1. Grundstücke, grundstücksgleiche Rechte und
	Bauten, einschließlich der Bauten auf fremdem
	Grund		153.095.074,73		157.245
	davon Verschmelzungsmehrwert 2. andere Anlagen, Betriebs- und Geschäfts	7.432.338,44		7.649
	ausstattung		220.427,75		268
	3. geleistete Anzahlungen		6.700,00		0
			153.322.202,48		157.513
	III. Finanzanlagen
	1. Anteile an verbundenen Unternehmen		625.313.174,92		525.278
	davon Verschmelzungsmehrwert	369.528,03		370
	2. Ausleihungen an verbundene Unternehmen		87.028.635,81		183.763
	davon mit einer Restlaufzeit von mehr als einem Jahr	74.851.221,90		178.480
	3. Beteiligungen		1.891.837,32		1.978
	4. Ausleihungen an Unternehmen, mit denen ein
	Beteiligungsverhältnis besteht		10.945.708,93		10.373
	davon mit einer Restlaufzeit von mehr als einem Jahr	10.945.708,93		10.373
	5. Wertpapiere (Wertrechte) des Anlagevermögens		1.142.828,21		1.018
			726.322.185,19		722.410
			879.702.068,61		880.014
	B. Umlaufvermögen
I.	Forderungen und sonstige Vermögensgegenstände
	1. Forderungen aus Lieferungen und Leistungen		796.519,31		554
	davon mit einer Restlaufzeit von mehr als einem Jahr	0,00		0
	2. Forderungen gegenüber verbundenen Unternehmen		331.159.373,40		122.153
	davon mit einer Restlaufzeit von mehr als einem Jahr 3. Forderungen gegenüber Unternehmen, mit denen	1.217.808,74		64.000
	ein Beteiligungsverhältnis besteht		1.170.852,36		865
	davon mit einer Restlaufzeit von mehr als einem Jahr	0,00		0
	4. sonstige Forderungen und Vermögensgegenstände		2.383.471,86		2.321
	davon mit einer Restlaufzeit von mehr als einem Jahr	983.498,23		1.239
			335.510.216,93		125.893
II.	Kassenbestand, Guthaben bei Kreditinstituten		43.736.721,18		36.970
			379.246.938,11		162.863
	C. Rechnungsabgrenzungsposten		80.437,85		11
	D. Aktive latente Steuern		1.373.868,00		2.841
			1.260.403.312,57		1.045.729

Bilanz zum 31. Dezember 2017

P a s s i v a

			31.12.2017		31.12.2016
		EUR	EUR	TEUR	TEUR
	A. Eigenkapital
I.	Grundkapital		243.143.569,90		243.143
	Nennbetrag eigener Anteile		-2.599.493,10		-2.599
	ausgegebenes Kapital		240.544.076,80		240.544
II.	Kapitalrücklagen
	gebundene		77.943.846,02		77.944
	III. Gewinnrücklagen
	1. Rücklage für eigene Anteile (gebunden)		2.599.493,10		2.599
	2. andere Rücklagen (freie Rücklagen)		108.537.260,59		39.418
	davon ausschüttungsgesperrt	1.373.868,00		2.841
			111.136.753,69		42.017
	IV. Bilanzgewinn davon Gewinnvortrag	1.519.298,00	29.000.000,00	982	28.000
			458.624.676,51		388.505
	B. Rückstellungen
1.	Rückstellungen für Abfertigungen		190.551,59		167
2.	Rückstellungen für Pensionen		1.707.666,80		1.533
3.	Steuerrückstellungen		13.917,00		14
4.	sonstige Rückstellungen		14.686.885,54		21.262
			16.599.020,93		22.976
	C. Verbindlichkeiten
	davon mit einer Restlaufzeit von bis zu einem Jahr	316.960.094,94		115.271
	davon mit einer Restlaufzeit von mehr als einem Jahr	467.574.757,34		518.220
1.	Anleihen		288.664.000,00		288.664
	davon konvertibel	0,00		0
	davon mit einer Restlaufzeit von bis zu einem Jahr davon mit einer Restlaufzeit von mehr als einem Jahr	0,00 288.664.000,00		0 288.664
2.	Genussscheinkapital		56.716.907,00		58.131
	davon mit einer Restlaufzeit von bis zu einem Jahr	56.716.907,00		0
	davon mit einer Restlaufzeit von mehr als einem Jahr	0,00		58.131
3.	Verbindlichkeiten gegenüber Kreditinstituten		113.227.043,89		154.695
	davon mit einer Restlaufzeit von bis zu einem Jahr	8.163.539,62		42.685
	davon mit einer Restlaufzeit von mehr als einem Jahr	105.063.504,27		112.010
4.	Verbindlichkeiten aus Lieferungen und Leistungen davon mit einer Restlaufzeit von bis zu einem Jahr	365.061,08	365.061,08	581	581
	davon mit einer Restlaufzeit von mehr als einem Jahr	0,00		0
5.	Verbindlichkeiten gegenüber verbundenen
	Unternehmen		317.298.100,53		123.181
	davon mit einer Restlaufzeit von bis zu einem Jahr	244.676.122,17		64.982
	davon mit einer Restlaufzeit von mehr als einem Jahr	72.621.978,36		58.199
6.	sonstige Verbindlichkeiten		8.263.739,78		8.239
	davon aus Steuern	631.668,91		503
	davon im Rahmen der sozialen Sicherheit davon mit einer Restlaufzeit von bis zu einem Jahr	82.731,52 7.038.465,07		78 7.023
	davon mit einer Restlaufzeit von mehr als einem Jahr	1.225.274,71		1.216
			784.534.852,28		633.491
	D. Rechnungsabgrenzungsposten		644.762,85		757
			1.260.403.312,57		1.045.729

Gewinn- und Verlustrechnung für das Geschäftsjahr 2017

			2017		2016
		EUR	EUR	TEUR	TEUR
	1. Umsatzerlöse		21.107.505,75		20.332
	2. sonstige betriebliche Erträge
	a) Erträge aus dem Abgang vom und der Zuschreibung zum
	Anlagevermögen mit Ausnahme der Finanzanlagen		0,00		2.022
	b) Erträge aus der Auflösung von Rückstellungen		91.439,35		1.619
c)	übrige		384.627,91		20
			476.067,26		3.661
	3. Aufwendungen für bezogene Leistungen		-6.214.859,65		-6.045
	4. Personalaufwand
	a) Gehälter		-3.787.704,29		-3.994
	b) soziale Aufwendungen		-1.165.946,75		-1.038
	davon Aufwendungen für Altersversorgung	-241.783,51		-229
	davon Aufwendungen für Abfertigungen und Leistungen an
	betriebliche Mitarbeitervorsorgekassen	-81.692,38		-78
	davon Aufwendungen für gesetzlich vorgeschriebene Sozialabgaben
	sowie vom Entgelt abhängige Abgaben und Pflichtbeiträge	-790.263,99		-748
			-4.953.651,04		-5.032
	5. Abschreibungen auf immterielle Gegenstände des
	Anlagevermögens und Sachanlagen		-5.375.100,03		-5.455
	6. sonstige betriebliche Aufwendungen		-4.324.408,74		-4.454
	davon Steuern, soweit sie nicht unter Z 18 fallen	-44.885,85		-38
	7. Zwischensumme aus Z 1 bis 6		715.553,55		3.007
	8. Erträge aus Beteiligungen		80.499.205,00		22.116
	davon aus verbundenen Unternehmen 9. Erträge aus anderen Wertpapieren und Ausleihungen des	80.000.000,00		21.500
	Finanzanlagevermögens davon aus verbundenen Unternehmen	5.292.524,00	6.182.672,92	8.785	9.358
	10. sonstige Zinsen und ähnliche Erträge		2.011.182,66		2.686
	davon aus verbundenen Unternehmen	649.865,11		2.635
	11. Erträge aus dem Abgang von und der Zuschreibung zu
	Finanzanlagen		2.703.567,83		3.826
	12. Aufwendungen aus Finanzanlagen		-3.449,29		-326
	davon Abschreibungen	-3.449,29		-326
	davon Aufwendungen aus verbundenen Unternehmen	0,00		-322
	13. Zinsen und ähnliche Aufwendungen		-15.763.520,36		-31.915
	davon betreffend verbundene Unternehmen	-2.076.643,83		-1.896
	14. Ergebniszuweisung Genussscheine		-4.858.260,89		-6.735
	15. Zuweisung anteilige stille Reserven Immobilienvermögen
	für die Genussscheine		-1.105.858,00		-176
	16. Zwischensumme aus Z 8 bis 15		69.665.539,87		-1.166
	17. Ergebnis vor Steuern (Zwischensumme aus Z 7 und Z 16)		70.381.093,42		1.841
	18. Steuern vom Einkommen und vom Ertrag		26.219.115,00		5.385
	davon latente Steuern	-1.467.407,00		4.829
	davon aus Steuerumlagen	27.716.272,00		577
	19. Ergebnis nach Steuern		96.600.208,42		7.226
	20. Jahresüberschuss		96.600.208,42		7.226
	21. Auflösung von Gewinnrücklagen		152.308,62		24.543
	22. Zuweisung zu Gewinnrücklagen		-69.271.815,04		-4.751
	23. Gewinnvortrag aus dem Vorjahr		1.519.298,00		982
	24. Bilanzgewinn		29.000.000,00		28.000

Anhang zum Jahresabschluss 31.12.2017

I. Bilanzierungs- und Bewertungsmethoden

Der Jahresabschluss zum 31. Dezember 2017 wurde unter Beachtung der allgemein anerkannten Grundsätze erstellt. Dabei wurden die in § 201 Abs. 2 UGB kodifizierten Grundsätze ordnungsmäßiger Buchführung und Bilanzierung beachtet, um ein möglichst getreues Bild der Vermögens-, Finanz- und Ertragslage des Unternehmens zu vermitteln. Die Bilanzierung, die Bewertung und der Ausweis der einzelnen Posten des Jahresabschlusses wurden nach den Bestimmungen der §§ 195 bis 211 und 222 bis 235 UGB vorgenommen. Der Jahresabschluss der S IMMO AG wurde nach den Vorschriften des Unternehmensgesetzbuches in der geltenden Fassung erstellt.

Bei der Aufstellung des Jahresabschlusses wurde der Grundsatz der Vollständigkeit eingehalten. Bei der Bewertung wurde von der Fortführung des Unternehmens ausgegangen.

Bei Vermögensgegenständen und Schulden wurde der Grundsatz der Einzelbewertung angewendet. Dem Vorsichtsprinzip wurde Rechnung getragen, indem insbesondere nur die am Abschlussstichtag verwirklichten Gewinne ausgewiesen wurden. Alle erkennbaren Risiken und drohenden Verluste, die im Geschäftsjahr oder in einem der früheren Geschäftsjahre entstanden sind, wurden berücksichtigt.

Bei der Gesellschaft handelt es sich um ein Unternehmen von öffentlichem Interesse gemäß § 189a UGB und gilt daher als große Kapitalgesellschaft im Sinne des § 221 UGB.

Schätzungen beruhen auf einer umsichtigen Beurteilung. Soweit statistisch ermittelbare Erfahrungen aus gleich gelagerten Sachverhalten vorhanden sind, hat das Unternehmen diese bei den Schätzungen berücksichtigt.

Aus Gründen der Klarheit und zum besseren Verständnis der Vermögenslage werden bisher unter den "Ausleihungen an verbundenen Unternehmen" ausgewiesene gegebene Darlehen an Unternehmen, mit denen ein Beteiligungsverhältnis besteht iHv EUR 10.945.708,93 (Vj. TEUR 10.373) nunmehr unter dem Bilanzposten "Ausleihungen an Unternehmen, mit denen ein Beteiligungsverhältnis besteht" ausgewiesen. Des Weiteren wurde im Geschäftsjahr 2017 aus Gründen des besseren Verständnisses der Ertragslage die Rechenlogik bezogen auf den Ausweis der Zinserträge und -aufwendungen aus Ausleihungen an verbundene Unternehmen und Ausleihungen an Unternehmen, mit denen ein Beteiligungsverhältnis besteht, geändert. Für Zwecke der Vergleichbarkeit mit der Vorjahres-Gewinn- und Verlustrechnung wurde der Ausweis der Zinserträge und -aufwendungen aus Ausleihungen an verbundene Unternehmen und aus Ausleihungen an Unternehmen, mit denen ein Beteiligungsverhältnis besteht, entsprechend geändert. Die Änderung betrifft lediglich den Ausweis innerhalb des Finanzergebnisses und hat in Summe keine Auswirkung auf den Jahresüberschuss. Nachstehende Tabelle zeigt den geänderten Ausweis für die Vergleichsperiode:

	Vor Umstellung	nach Umstellung
Erträge aus Ausleihungen des	14.723.140,59	9.358.271,29
Finanzanlagevermögens
davon betreffend verbundene Unternehmen	13.980.552,35	8.785.278,97
davon betreffend Unternehmen, mit denen ein	742.588,24	572.992,32
Beteiligungsverhältnis besteht
Zinsen und ähnliche Aufwendungen	37.310.118,76	31.914.745,43
davon betreffend verbundene Unternehmen	7.121.349,22	1.895.571,81
davon betreffend Unternehmen, mit denen ein Beteiligungsverhältnis besteht	169.595,92	0,00

1. Anlagevermögen

1.1 Immaterielles Anlagevermögen

Erworbene immaterielle Vermögensgegenstände werden zu Anschaffungskosten bewertet, vermindert um planmäßige Abschreibungen entsprechend der Nutzungsdauer. Die planmäßigen Abschreibungen werden linear angenommen. Als Nutzungsdauer wird ein Zeitraum von 4 Jahren zugrunde gelegt.

1.2 Sachanlagevermögen

Das Sachanlagevermögen wurde zu Anschaffungs- oder Herstellungskosten abzüglich Investitionszuschüssen und bisher aufgelaufenen und im Berichtsjahr planmäßig fortgeführten Abschreibungen bewertet. Zur Ermittlung der Abschreibungssätze wird generell die lineare Abschreibungsmethode gewählt. Der Rahmen der Nutzungsdauer beträgt für die einzelnen Anlagengruppen:

Gebäude:	40 bis 67 Jahre
Hardware:	4 Jahre
Betriebs- und Geschäftsausstattung:	5 bis 10 Jahre

Geringwertige Vermögensgegenstände (Wirtschaftsgüter gemäß § 13 EStG 1988) werden im Jahr der Anschaffung sofort voll abgeschrieben. Bilanziell wurde diese Abschreibung gemäß § 226 Abs 3 UGB als Abgang dargestellt.

1.3 Finanzanlagevermögen

Die Finanzanlagen sind zu Anschaffungskosten abzüglich außerplanmäßiger Abschreibungen unter Beachtung des gemilderten Niederstwertprinzips bewertet. Außerplanmäßige Abschreibungen werden nur im Fall einer voraussichtlich dauernden Wertminderung vorgenommen.

In den Wertpapieren des Anlagevermögens sind Ansprüche aus Rückdeckungsversicherungen auf Grund von Pensionszusagen enthalten. Der Ansatz dieser Ansprüche erfolgt mit dem Deckungskapital.

2. Umlaufvermögen

2.1 Forderungen und sonstige Vermögensgegenstände

Die Forderungen wurden zum Nennwert bzw. Barwert bewertet. Bei der Bewertung von Forderungen wurden erkennbare Risiken durch individuelle Abwertungen berücksichtigt.

Soweit erforderlich, wurde die späte Fälligkeit durch Abzinsung berücksichtigt.

Die Bewertung der Guthaben bei Kreditinstituten erfolgte mit dem Nennwert.

3. Rechnungsabgrenzungsposten

Die aktiven und passiven Rechnungsabgrenzungsposten wurden mit dem Nennwert bewertet.

4. Aktive latente Steuern

Aktive latente Steuern werden auf Differenzen, die zwischen den unternehmensrechtlichen und steuerrechtlichen Wertansätzen von Vermögensgegenständen, Rückstellungen, Verbindlichkeiten und Rechnungsabgrenzungsposten bestehen, die sich in späteren Geschäftsjahren voraussichtlich abbauen, angesetzt. Vom Wahlrecht des § 198 Abs. 9 UGB, latente Steuern auf steuerliche Verlustvorträge zu bilanzieren, wurde kein Gebrauch gemacht.

Der bilanzierte Betrag an aktiven latenten Steuern stellt einen Überhang aktiver über passive latente Steuern dar. Eine Saldierung der aktiven mit den passiven latenten Steuern wird vorgenommen, weil eine Aufrechnung der tatsächlichen Steuererstattungsansprüche mit den tatsächlichen Steuerschulden rechtlich möglich ist.

5. Rückstellungen

5.1. Personalrückstellungen

Der Ansatz und die Bewertung von Personalrückstellungen (Abfertigungs-, Pensions-, Jubiläumsgeldrückstellungen) folgt den Ausführungen der AFRAC-Stellungnahme 27 "Rückstellungen für Pensions-, Abfertigungs-, Jubiläumsgeld- und vergleichbare langfristig fällige Verpflichtungen nach den Vorschriften des Unternehmensgesetzbuches" (Juni 2016).

Die Ermittlung erfolgt nach versicherungsmathematischen Grundsätzen nach der "Projected Unit Credit Method" unter Verwendung der biometrischen Richttafeln AVÖ 2008-P Pagler & Pagler.

Beim verwendeten Rechnungszinssatz handelt es sich um einen Stichtagszinssatz. Der Stichtagszinssatz ist jener Zinssatz, zu dem sich ein Unternehmen mit hochklassiger Bonitätseinstufung am Abschlussstichtag der durchschnittlichen Restlaufzeit der Verpflichtungen im Wesentlichen entsprechendes Fremdkapital beschaffen kann.

Die Bewertungsmethode für die Berechnung der Rückstellungen für Abfertigungen und Pensionen wurde gegenüber dem Vorjahr nicht geändert.

5.1.1. Abfertigungsrückstellungen

	2017	2016
Zinssatz	0,9%	1,0%
Gehalts-/Lohnsteigerung	1,5%	2,5%
Fluktationsabschlag	0% - 7%	Pauschal 7%
Pensionsalter	62-65 Jahre	62 Jahre

5.1.2. Pensionsrückstellungen

	2017	2016
Zinssatz	1,5%	1,6%
Gehalts-/Lohnsteigerung	1,0%	1,0%
Pensionsalter	65 Jahre	65 Jahre

5.2. Sonstige Rückstellungen

Die Steuer- und sonstigen Rückstellungen berücksichtigen unter Beachtung des Imparitätsund Höchstwertprinzips alle erkennbaren Risiken und ungewissen Verbindlichkeiten in Höhe jenes Betrages, der nach vernünftiger unternehmerischer Beurteilung hierfür notwendig ist. Die sonstigen Rückstellungen wurden in Höhe des Erfüllungsbetrages gebildet.

6. Verbindlichkeiten

Die Verbindlichkeiten sind mit dem Erfüllungsbetrag unter Bedachtnahme auf den Grundsatz der Vorsicht bewertet.

II. Allgemeine Erläuterungen zur Bilanz und Gewinn- und Verlustrechnung

Die Erstellung der Bilanz sowie der Gewinn- und Verlustrechnung wurde den gesetzlichen Vorschriften entsprechend vorgenommen. Die Gewinn- und Verlustrechnung wurde nach dem Gesamtkostenverfahren erstellt.

III. Erläuterungen der Konzernverhältnisse

Die S IMMO AG, Wien, stellt einen Konzernabschluss gemäß § 245a UGB in Übereinstimmung mit den vom International Accounting Standards Board (IASB) formulierten Standards (IFRS und IAS) und Interpretationen (IFRIC und SIC), wie sie in der Europäischen Union (EU) anzuwenden sind, auf. Der Konzernabschluss ist beim Handelsgericht Wien hinterlegt.

Die S IMMO AG, Wien, stellt den Konzernabschluss für den größten und kleinsten Kreis von Unternehmen auf.

IV. Erläuterungen zur Gruppenbesteuerung

Die Gesellschaft ist Gruppenträger einer steuerlichen Unternehmensgruppe gemäß § 9 Abs. 1 KStG.

Zwischen Gruppenträger und Gruppenmitgliedern besteht ein Vertrag zur Regelung des Steuerausgleichs. Die Ermittlung des Steuerausgleichs erfolgt demnach nach der Belastungsmethode: weist ein inländisches Gruppenmitglied ein positives steuerliches Ergebnis aus, dann ist eine positive Steuerumlage in Höhe von 25% an den Gruppenträger zu entrichten. Im Falle eines negativen steuerlichen Ergebnisses erhält das inländische Gruppenmitglied keine sofortige Zahlung, vielmehr werden die negativen Ergebnisse als interner Verlustvortrag des jeweiligen Gruppenmitgliedes in Evidenz gehalten, welcher mit zukünftigen positiven Ergebnissen verrechnet werden kann.

V. Erläuterungen zur Bilanz

A K T I V A

1. Anlagevermögen

Die Entwicklung der einzelnen Posten des Anlagevermögens und die Aufgliederung der Jahresabschreibung nach einzelnen Posten sind aus dem nachstehenden Anlagenspiegel ersichtlich.

		Ans cha ffun gs-/ Her	llun gsk ste oste n		kum ulie Abs chr eibu rte nge n					Res tbu chw erte
	Sta nd	Zug äng e	Abg äng e	Sta nd	Sta nd	Zug äng e	Abg äng e	Zus chr eibu n- gen	Sta nd	Sta nd	Sta nd
	1.1 .20 17			31. 12.2 017	1.1 .20 17				31. 12.2 017	31. 12.2 017	31. 12.2 016
	EU R	EU R	EU R	EU R	EU R	EU R	EU R	EU R	EU R	EU R	EU R
I. Imm riel le V öge änd ate nst erm nsg ege e
ähn lich e R ech te	256 .210 ,51	0,0 0	0,0 0	256 .210 ,51	164 .810 ,12	33. 719 ,45	0,0 0	0,0 0	198 .529 ,57	57. 680 ,94	91. 400 ,39
II. Sac han lag en
1. G dst ück dst ück sgle iche Re chte d run e, g run un
Bau , ein sch ließ lich de r Ba uf f dem ten ute n a rem
Gru nd
G dwe rt (u nbe bau t) run	1.00 7.0 00, 00	0,0 0	0,0 0	1.0 07. 000 ,00	0,0 0	0,0 0	0,0 0	0,0 0	0,0 0	1.0 07. 000 ,00	1.0 07. 000 ,00
G dwe rt (b eba ut) run	50. 523 .503 ,19	0,0 0	0,0 0	50. 523 .503 ,19	0,0 0	0,0 0	0,0 0	0,0 0	0,0 0	50. 523 .503 ,19	50. 523 .503 ,19
G ebä ude t wer	185 .046 .664 ,50	1.1 12.0 94, 11	888 .46 1,37	185 .270 .297 ,24	75. 930 .400 ,71	5.4 03. 370 ,88	888 .46 1,37	0,0 0	80. 445 .310 ,22	104 .824 .987 ,02	109 .116 .263 ,79
In titio hus us ö ffen tlich Mitt eln ves nsz usc s a en	-4.8 53. 808 ,43	0,0 0	0,0 0	-4.8 53. 808 ,43	-1.4 52. 254 ,97	-14 1.13 7,9 8	0,0 0	0,0 0	-1.5 93. 392 ,95	-3.2 60. 415 ,48	-3.4 01. 553 ,46
	231 .723 .359 ,26	1.1 12.0 94, 11	888 .46 1,37	231 .946 .992 ,00	74. 478 .145 ,74	5.2 62. 232 ,90	888 .46 1,37	0,0 0	78. 851 .917 ,27	153 .095 .074 ,73	157 .245 .213 ,52
nde re A nlag Bet rieb nd Ges chä fts 2. a en, s- u
g *) stat tun aus
ei gen e	456 .032 ,61	43. 897 ,20	64. 245 ,63	435 .684 ,18	238 .562 ,22	69. 122 ,89	42. 771 ,67	0,0 0	264 .913 ,44	170 .770 ,74	217 .470 ,39
rmie Mo bilie tete ve n	169 .740 ,67	8.8 79, 15	0,0 0	178 .619 ,82	118 .938 ,02	10. 024 ,79	0,0 0	0,0 0	128 .962 ,81	49. 657 ,01	50. 802 ,65
	625 .773 ,28	52. 776 ,35	64. 245 ,63	614 .304 ,00	357 .500 ,24	79. 147 ,68	42. 771 ,67	0,0 0	393 .876 ,25	220 .427 ,75	268 .273 ,04
3. g elei stet e A hlun nza gen	0,0 0	6.7 00, 00	0,0 0	6.7 00, 00	0,0 0	0,0 0	0,0 0	0,0 0	0,0 0	6.7 00, 00	0,0 0
	232 .349 .132 ,54	1.1 71. 570 ,46	952 .707 ,00	232 .567 .996 ,00	74. 835 .645 ,98	5.3 41. 380 ,58	931 .233 ,04	0,0 0	79. 245 .793 ,52	153 .322 .202 ,48	157 .513 .486 ,56
III. Fin anl anz age n
1. A ile a rbu nde Un ehm nte tern n ve nen en	525 .278 .174 ,92	100 .035 .000 ,00	0,0 0	625 .313 .174 ,92	0,0 0	0,0 0	0,0 0	0,0 0	0,0 0	625 .313 .174 ,92	525 .278 .174 ,92
2. A usle ihun rbu nde Unt ehm gen an ve ne ern en	192 .595 .13 1,66	11. 009 .98 1,58	110 .129 .477 ,43	93. 475 .635 ,81	8.8 32. 167 ,83	0,0 0	0,0 0	2.3 85. 167 ,83	6.4 47. 000 ,00	87. 028 .635 ,81	183 .762 .963 ,83
3. Bet eilig ung en	2.9 06. 417 ,60	0,0 0	86. 400 ,00	2.8 20. 017 ,60	928 .180 ,28	0,0 0	0,0 0	0,0 0	928 .180 ,28	1.8 91. 837 ,32	1.9 78. 237 ,32
4. A usle ihun Un tern ehm mit den ein gen an en, en
Bet eilig rhä ltnis be ste ht ung sve	10.3 72. 714 ,80	2.7 66. 269 ,79	2.1 93. 275 ,66	10. 945 .708 ,93	0,0 0	0,0 0	0,0 0	0,0 0	0,0 0	10. 945 .708 ,93	10. 372 .714 ,80
5. W apie re ( We chte ) de s A nlag ertp rtre rmö eve gen s	1.0 21. 367 ,73	128 .455 ,05	0,0 0	1.1 49. 822 ,78	3.5 45, 28	3.4 49, 29	0,0 0	0,0 0	6.9 94, 57	1.1 42. 828 ,21	1.0 17.8 22, 45
	732 .173 .806 ,71	113 .939 .706 ,42	112 .409 .153 ,09	733 .704 .360 ,04	9.7 63. 893 ,39	3.4 49, 29	0,0 0	2.3 85. 167 ,83	7.3 82. 174 ,85	726 .322 .185 ,19	722 .409 .913 ,32
	964 .779 .149 ,76	115 .11 1.27 6,8 8	113 .36 1.86 0,0 9	966 .528 .566 ,55	84. 764 .349 ,49	5.3 78. 549 ,32	931 .233 ,04	2.3 85. 167 ,83	86. 826 .497 ,94	879 .702 .068 ,61	880 .014 .800 ,27

*) davon geringwertige Vermögensgegenstände gemäß § 204 (1a) UGB 9.995,63 9.995,63 9.995,63 9.995,63

Im Geschäftsjahr 2017 wurde keine außerplanmäßige Abschreibung vorgenommen (Vorjahr TEUR 77).

Zuschreibungen zu Vermögensgegenständen des Anlagevermögens werden vorgenommen, wenn die Gründe für die außerplanmäßige Abschreibung weggefallen sind. Die Zuschreibung erfolgt maximal auf den Nettobuchwert, der sich unter Berücksichtigung der Normalabschreibungen, die inzwischen vorzunehmen gewesen wären, ergibt. Bei Firmenwerten unterbleibt gemäß § 208 Abs. 2 UGB die Zuschreibung.

Im Geschäftsjahr 2017 wurden keine Zuschreibungen durchgeführt:

		Betrag in TEUR
Grundwert	2017	0
	VJ	530
Gebäudewert	2017	0
	VJ	1.492

1.1 Finanzanlagen

Angabe gem. § 238 Z 2 UGB für Beteiligungen ab 20%

	Anteil in %	Stichtag	Währung	Eigenkapital per 31.12.	Ergebnis des Geschäftsjahres
CEE PROPERTY-INVEST
Immobilien GmbH, Wien	100	31.12.2017	TEUR	349.468	37.297
German Property Invest Immobilien
GmbH, Wien	100	31.12.2017	TEUR	207.039	19.297
A.D.I. Immobilien Beteiligungs GmbH,
Wien	100	31.12.2017	TEUR	109.967	57.782
S IMMO Group Finance GmbH, Wien	100	31.12.2017	TEUR	98.993	-1.042

Typisch stille Beteiligung an der PCC - Hotelerrichtungs- und Betriebsgesellschaft m.b.H. & Co. KG:

Einlage TEUR 3.634 zuzüglich Verschmelzungsmehrwert TEUR 370.

Anteile an verbundenen Unternehmen

Im Geschäftsjahr erfolgten keine Zuschreibungen an Anteilen an verbundenen Unternehmen (i.Vj. TEUR 0).

Ausleihungen an verbundene Unternehmen

Ausleihungen an verbundene Unternehmen mit einer Restlaufzeit von unter 1 Jahr betragen TEUR 12.177 (i.Vj. TEUR 5.283).

Im Geschäftsjahr wurden Ausleihungen an verbundene Unternehmen i.H.v. TEUR 0 (i.Vj. TEUR 322) abgeschrieben sowie i.H.v. TEUR 2.385 (i.Vj. TEUR 3.826) zugeschrieben.

Beteiligungen

Hierunter werden die Kommanditbeteiligung an der BGM – IMMORENT Aktiengesellschaft & Co KG und die Beteiligung an der ERSTE Immobilien Kapitalanlagegesellschaft m.b.H. ausgewiesen.

2. Umlaufvermögen

2.1 Forderungen und sonstige Vermögensgegenstände

Die Fälligkeiten der Forderungen stellen sich folgendermaßen dar:

		Restlaufzeit
		Summe	bis 1 Jahr	über 1 Jahr
		TEUR	TEUR	TEUR
Forderungen aus Lieferungen und	2017	797	797	0
Leistungen	VJ	554	554	0
Forderungen gegenüber verbundenen	2017	331.159	329.941	1.218
Unternehmen	VJ	122.153	58.153	64.000
Forderungen gegenüber Unternehmen, mit	2017	1.171	1.171	0
denen ein Beteiligungsverhältnis besteht	VJ	865	865	0
sonstige Forderungen und	2017	2.383	1.400	983
Vermögensgegenstände	VJ	2.321	1.082	1.239

2.1.1 Forderungen aus Lieferungen und Leistungen

Die Forderungen aus Lieferungen und Leistungen beinhalten offene Mietzinsforderungen und Betriebskostenforderungen. Einzelwertberichtigungen in Höhe von TEUR 599 (i.Vj. TEUR 516) sind bereits abgezogen.

2.1.2 Forderungen gegenüber verbundenen Unternehmen

Die Forderungen gegenüber verbundenen Unternehmen betreffen Zinsen für eine stille Beteiligung, Forderungen gegenüber zahlreichen Konzerngesellschaften aus Steuerumlagen, kurzfristige Gesellschafterdarlehen und Cash-Pool-Forderungen. Des Weiteren besteht gegenüber der A.D.I. Immobilien Beteiligungs GmbH eine Forderung aus einer phasenkongruenten Dividendenaktivierung i.H.v. TEUR 50.000.

2.1.3 Sonstige Forderungen und Vermögensgegenstände

Die sonstigen Forderungen und Vermögensgegenstände beinhalten mit TEUR 983 (i.Vj. TEUR 1.434) Up-Front-Prämien für Zinscaps, die gem. AFRAC-Stellungnahme Nr. 15 "Die unternehmensrechtliche Bilanzierung von Derivaten und Sicherungsinstrumenten" vom September 2017 bilanziert und über die Laufzeit abgeschrieben werden. Weiters umfasst die Position mit TEUR 1.335 (i.Vj. TEUR 865) offene Betriebskostenverrechnungen und mit TEUR 65 (i.Vj. TEUR 22) sonstige Forderungen.

3. Aktive latente Steuern

Der bilanzierte Betrag an aktiven latenten Steuern stellt einen Überhang aktiver über passive latente Steuern dar. Eine Saldierung der aktiven mit den passiven latenten Steuern wird vorgenommen, weil eine Aufrechnung der tatsächlichen Steuererstattungsansprüche mit den tatsächlichen Steuerschulden rechtlich möglich ist.

Die Entwicklung der aktiven und passiven latenten Steuern (vor Aufrechnung der Salden innerhalb der gleichen Steuerjudikatur) stellt sich wie folgt dar:

Posten	Unternehmens recht	Steuerrecht	Temporäre Differenzen	Latente Steuer (Steuersatz 25%)
Aktive latente Steuern
Kosten der
Geldbeschaffung	0,00	1.129.585,00	1.129.585,00	282.396,25
Temporäre Differenzen
Buchwerte
Immobilienvermögen	10.714.161,00	15.808.060,00	5.093.899,00	1.273.474,75
Pensionsrückstellung	1.707.666,80	920.993,78	786.673,02	196.668,26
Abfertigungsrückstellung	190.551,59	86.219,10	104.332,49	26.083,12
Drohverlustrückstellung
für negative Marktwerte
von Derivaten	13.357.000,00	0,00	13.357.000,00	3.339.250,00
Summe Stand
31.12.2017				5.117.872,38

	Unternehmens recht	Steuerrecht	Temporäre Differenzen
Passive latente Steuern
Verschmelzungsmehrwert	7.432.338,00	0,00	-7.432.338,00	-1.858.084,50
Bewertungsreserve*)	7.543.680,00	0,00	-7.543.680,00	-1.885.920,00
Summe Stand
31.12.2017				3.744.004,50

*) Ausweis unter den anderen Rücklagen (freie Rücklagen) aufgrund Darstellung RÄG 2014

Per 31.12.2017 ergibt sich auf saldierter Basis eine aktive Latenz in Höhe von TEUR 1.374 (i.Vj TEUR 2.841). Die Veränderung zum Vorjahr in Höhe von TEUR 1.467 stellt einen latenten Steueraufwand dar und ist zur Gänze ergebniswirksam.

Posten	Unternehmens recht	Steuerrecht	Temporäre Differenzen	Latente Steuer (Steuersatz 25%)
Aktive latente Steuern
Kosten der
Geldbeschaffung	0,00	1.421.770,90	1.421.770,90	355.442,75
Temporäre Differenzen
Buchwerte
Immobilienvermögen	10.344.502,00	15.342.868,00	4.998.366,00	1.249.591,50
Pensionsrückstellung	1.553.456,00	857.622,00	675.834,00	168.958,50
Abfertigungsrückstellung	166.666,00	68.890,00	97.776,00	24.444,00
Drohverlustrückstellung
für negative Marktwerte
von Derivaten	19.567.000,00	0,00	19.567.000,00	4.891.750,00
Summe Stand
31.12.2016				6.690.186,75
	Unternehmens		Temporäre
Passive latente Steuern	recht	Steuerrecht	Differenzen
Verschmelzungsmehrwert	7.648.891,00	0,00	-7.648.891,00	-1.912.222,75
Bewertungsreserve*)	7.746.758,00	0,00	-7.746.758,00	-1.936.689,50
Summe Stand
31.12.2016				3.848.912,25

*) Ausweis unter den anderen Rücklagen (freie Rücklagen) aufgrund Darstellung RÄG 2014

4. Derivative Finanzinstrumente

Derivate werden grundsätzlich zur Reduzierung des Zinsänderungsrisikos eingesetzt. Zinsänderungsrisiken ergeben sich aufgrund bestehender variabel verzinslicher Finanzierungsverbindlichkeiten. Grundsätzlich wird versucht, die Sicherungsinstrumente auf die Laufzeit der abzusichernden Zahlungsströme aus den Finanzierungsverbindlichkeiten abzuschließen; für den Fall, dass Sicherungsinstrumente beispielsweise nicht für die gesamte Laufzeit der Finanzierungsverbindlichkeiten verfügbar sind, kommen auch rollierende Sicherungsstrategien zum Einsatz.

Die Gesellschaft hatte zum Bilanzstichtag Zinsswap- und Zinscap-Verträge abgeschlossen:

	Volumen in TEUR	Marktwert in TEUR
Zinsswaps	250.000	-13.357
Zinscaps	190.000	983
Summe	440.000	-12.374

Für Swaps mit zum Bilanzstichtag negativen Marktwerten wurde (im Hinblick auf die AFRAC-Stellungnahme zu Nr. 15 "Die unternehmensrechtliche Bilanzierung von Derivaten und Sicherungsinstrumenten" vom September 2017) eine Rückstellung für drohende Verluste in Höhe von TEUR 13.357 (i.Vj. TEUR 19.567) gebildet.

P A S S I V A

5. Eigenkapital

Das Grundkapital wird mit TEUR 243.144 (abzüglich Nominale eigene Anteile i.H.v. TEUR 2.600 (i.VJ TEUR 2.600) ausgewiesen und zerfällt in 66.917.179 Stück auf Inhaber lautende Stückaktien. Die Aktien notieren an der Wiener Börse. Im Berichtsraum 2017 wurden keine Aktien eingezogen.

Im Geschäftsjahr 2017 wurden Gewinnrücklagen in Höhe von TEUR 152 (i.VJ TEUR 24.543) aufgelöst. Außerdem wurde vom Jahresüberschuss 2017 unter anderem ein Betrag in Höhe von TEUR 69.272 (i.Vj TEUR 4.751) den freien Gewinnrücklagen zugewiesen. In den Gewinnrücklagen unterliegt ein Betrag von TEUR 1.374 (i.Vj TEUR 2.841) einer Ausschüttungssperre gem. § 235 Abs. 2 UGB.

Die Gesellschaft hält zum Bilanzstichtag 715.424 Stück eigene Aktien, die in Übereinstimmung mit den Regelungen des RÄG 2014 vom Nominalkapital und den Gewinnrücklagen abgesetzt wurden.

Im Geschäftsjahr 2017 wurden keine Aktien aus einem genehmigten Kapital gezeichnet.

In der am 08.06.2017 abgehaltenen 28. ordentlichen Hauptversammlung der S IMMO AG wurde für das Geschäftsjahr 2016 die Ausschüttung einer Dividende von EUR 0,40 je dividendenberechtigter Aktie beschlossen. Der gesamte Ausschüttungsbetrag belief sich auf TEUR 26.481.

Für das Geschäftsjahr 2017 beabsichtigt die Gesellschaft bei der nächsten ordentlichen Hauptversammlung, die Ausschüttung einer Dividende von EUR 0,40 je dividendenberechtigter Aktie vorzuschlagen.

5.1 Kapitalrücklagen

Die Kapitalrücklage setzt sich zur Gänze aus gebundenen Kapitalrücklage zusammen.

5.2 Gewinnrücklagen

Die in der Gewinnrücklage ausgewiesene Bewertungsreserve zeigt folgende Entwicklung:

	Stand am 1.1.2017 TEUR	Dotierung TEUR	Auflösung TEUR	Stand am 31.12.2017 TEUR
Gewinnrücklage	5.811	0	152	5.659

7. Rückstellungen

7.1 Rückstellung für Abfertigungen

	31.12.2017 TEUR	31.12.2016 TEUR
Rückstellung für Abfertigungen	191	167

7.2 Rückstellung für Pensionen

	31.12.2017 TEUR	31.12.2016 TEUR
Rückstellung für Pensionen	1.708	1.533

7.3 Steuerrückstellungen

	31.12.2017 TEUR	31.12.2016 TEUR
Eintragungsgebühren	14	14

7.4 Sonstige Rückstellungen

	31.12.2017 TEUR	31.12.2016 TEUR
Rechts-, Prüfungs-, Beratungs-,
Schätz-, Veröffentlichungskosten	463	434
Instandhaltung	120	365
Personalkosten	747	886
Drohverluste aus Derivaten	13.357	19.567
Verwaltungskosten	0	10
Gesamt	14.687	21.262

8. Investitionszuschüsse

	Stand 1.1.2017 TEUR	Zuführung TEUR	Auflösung TEUR	Stand 31.12.2017 TEUR
Investitionszuschüsse
Grundstück und Gebäude	3.402	0	141	3.261

9. Verbindlichkeiten

9.1. Anleihen

Die Anleiheverbindlichkeiten zum 31.12.2017 setzen sich, unverändert zum Vorjahr, folgendermaßen zusammen:

ISIN	Buchwert	Kupon	Begeben in	Laufzeit bis
	TEUR
AT0000A177D2	89.739,50	4,50%	2014	16.06.2021
AT0000A19SB5	99.931,00	3,00%	2014	02.10.2019
AT0000A1DBM5	33.993,50	3,25%	2015	08.04.2025
AT0000A1DWK5	65.000,00	3,25%	2015	20.04.2027
Gesamt	288.664,00

Sämtliche Anleihenverbindlichkeiten sind endfällig.

9.2. Genussscheinkapital

Die Genussscheinbedingungen für die obligationenähnlichen Genussscheine S IMMO INVEST wurden rückwirkend ab 1. Jänner 2007 geändert und der S-IMMO-INVEST-Genussscheinfonds aufgelöst (Beschluss der Versammlung der Genussscheininhaber vom 11. Juni 2007 und Beschluss der Hauptversammlung vom 12. Juni 2007).

Die Genussscheininhaber erhalten nach den geänderten Genussscheinbedingungen einen jährlichen Ergebnisanspruch (Zinsen), welcher sich wie folgt errechnet:

Konzern EBIT

(Genussscheinkapital + Ergebnisvortrag) * _____________________________

durchschnittliches Immobilienvermögen ohne Entwicklungsprojekte

Für den Zeitraum Jänner bis Dezember 2017 ergibt sich ein Ergebnisanspruch von TEUR 4.858 (i.Vj. TEUR 6.735).

Die obligationenähnlichen Genussscheine wurden durch die Gesellschaft zur Gänze mit Wirkung 31.12.2017 gekündigt.

Nach letztmaliger Zuweisung anteiliger stiller Reserven im Immobilienvermögen in Höhe von TEUR 1.106 (i.Vj. TEUR 176) ergibt sich ein Rückzahlungsanspruch der Genussscheininhaber zum Kündigungszeitpunkt 31.12.2017 in Höhe von TEUR 56.717. Die Genussscheinverbindlichkeit betrug im Vorjahr TEUR 58.131.

9.3. Verbindlichkeiten

Die Aufgliederung der Verbindlichkeiten gemäß § 225 Abs 6 und § 237 Abs 1 Z 5 UGB stellt sich folgendermaßen dar:

			Restlaufzeit
		Summe	bis 1 Jahr	über 1 Jahr	über 5 Jahre
		TEUR	TEUR	TEUR	TEUR
Verbindlichkeiten gegenüber	2017	113.227	8.164	79.722	25.341
Kreditinstituten	VJ	154.695	42.685	70.335	41.675
Verbindlichkeiten aus Lieferungen und	2017	365	365	0	0
Leistungen	VJ	581	581	0	0
Verbindlichkeiten gegenüber verbundenen	2017	317.298	244.676	38.729	33.893
Unternehmen	VJ	123.181	64.982	8.055	50.144
Sonstige Verbindlichkeiten	2017	8.264	7.039	0	1.224
	VJ	8.239	7.023	0	1.216

9.3.1. Verbindlichkeiten gegenüber Kreditinstituten

Vom Gesamtbetrag der Verbindlichkeiten gegenüber Kreditinstituten sind TEUR 104.067 (i.Vj.: TEUR 108.436) dinglich besichert (Grundpfandrecht).

Die Verbindlichkeiten gegenüber Kreditinstituten enthalten mit TEUR 9.160 (i.Vj.: TEUR 11.259) Verbindlichkeiten aus Sale-und-Lease-Back-Verträgen, die zum Barwert der zukünftigen Leasingraten bewertet sind.

9.3.2 Verbindlichkeiten gegenüber verbundenen Unternehmen

Die Verbindlichkeiten gegenüber verbundenen Unternehmen betreffen im Wesentlichen Barvorlagen von mehreren Konzerngesellschaften. Hinsichtlich der Fristigkeiten verweisen wir auf Punkt 9.3.

9.4 Sonstige Verbindlichkeiten

Die sonstigen Verbindlichkeiten enthalten mit TEUR 1.224 (i.Vj.: TEUR 1.216) Kautionen, mit TEUR 632 (i.Vj.: TEUR 503) Verbindlichkeiten aus Steuern, mit TEUR 83 (i.Vj.: TEUR 78) Verbindlichkeiten aus sozialer Sicherheit, mit TEUR 5.258 (i.Vj.: TEUR 5.244) Verbindlichkeiten aus Anleihezinsen und mit TEUR 1.067 (i.Vj.: TEUR 1.198) sonstige Verbindlichkeiten.

In den sonstigen Verbindlichkeiten sind Aufwendungen in Höhe von TEUR 5.498 (i.Vj.: TEUR 5.488) enthalten, die erst nach dem Stichtag zahlungswirksam werden.

10. Rechnungsabgrenzungsposten

Unter dieser Position werden im Wesentlichen die Erlöse aus dem Verkauf eines Mietrechtes ausgewiesen.

11. Haftungsverhältnisse und sonstige finanzielle Verpflichtungen

Zum 31.12.2017 bestehen diverse Haftungsverhältnisse. Diese gliedern sich auf in: abgegebenen Bürgschaften und Garantien TEUR 366.960, (i.Vj.: TEUR 251.944) sowie Patronatserklärungen TEUR 105.286 (i.Vj.: TEUR 143.958) für Konzerngesellschaften.

Darüber hinaus hat die Gesellschaft zu Gunsten einzelner Konzerngesellschaften Patronatserklärungen abgegeben, mit denen sie sich verpflichtet hat, diese Gesellschaften ab dem jeweiligen Erklärungsdatum zumeist über mindestens 12 Monate so mit finanziellen Mitteln auszustatten, dass diese jederzeit in der Lage sind, alle Zahlungsverpflichtungen zeitgerecht erfüllen zu können.

VI. Erläuterungen zur Gewinn- und Verlustrechnung

1. Umsatzerlöse

Die Umsatzerlöse setzen sich wie folgt zusammen:

	2017	2016
	TEUR	TEUR
Erlöse aus Vermietung	15.873	15.682
Betriebskostenweiterverrechnung	3.927	3.857
Erlöse aus der Verwaltungstätigkeit und Beratung für Tochtergesellschaften	296	118
Diverse	1.012	675
Gesamt	21.108	20.332

2. Sonstige betriebliche Erträge

	2017 TEUR	2016 TEUR
Erträge aus der Auflösung von Rückstellungen	91	1.619
Erträge aus Zuschreibung von Liegenschaften	0	2.022
Diverse	385	20
Gesamt	476	3.661

3. Aufwendungen für sonstige bezogene Herstellungsleistungen

	2017 TEUR	2016 TEUR
Betriebskosten und laufende öffentliche Abgaben
gemäß § 21 Abs 1 und 2 MRG	4.349	4.186
Instandhaltungsaufwendungen	1.866	1.859
Gesamt	6.215	6.045

4. Personalaufwand

Die Gesellschaft beschäftigte im Jahresdurchschnitt 2 Vorstandsmitglieder, 38 Angestellte und keine Arbeiter. (Im Vorjahr 2 Vorstandsmitglieder, 34 Angestellte und keine Arbeiter.) Die Bezüge der Mitglieder des Vorstands lassen sich wie folgt aufgliedern:

	2017 TEUR	2016 TEUR
Fix	559	529
Variabel	430	350
Gesamt	989	879

Neben den oben genannten Beträgen bestanden noch sonstige Bezüge, die im Wesentlichen die Beiträge an Pensionskassen in Höhe von TEUR 57 (i.Vj.: TEUR 53) und die Beiträge an die Mitarbeitervorsorgekasse in Höhe von TEUR 15 (i.Vj.: TEUR 14) enthalten.

5. Abschreibungen / Erträge aus Zuschreibungen

Hierunter werden planmäßige Abschreibungen auf immaterielle Vermögensgegenstände und Sachanlagen (abzüglich der aliquoten Auflösung des Investitionszuschusses) von TEUR 5.375 (i.Vj. TEUR 5.455) sowie Zuschreibungen in Höhe von TEUR 0 (i.Vj. TEUR 2.022) ausgewiesen.

6. Sonstige betriebliche Aufwendungen

a) Steuern, soweit sie nicht unter Z 18 fallen

Die Steuern betreffen im Wesentlichen nicht abzugsfähige Vorsteuern.

b) Übrige

	2017 TEUR	2016 TEUR
Verwaltungskosten	1.350	1.265
Investor Relations und Unternehmenskommunikationskosten	1.239	1.572
Rechts- und Beratungsaufwand	1.272	1.173
Vergütungen an Aufsichtsratsmitglieder	172	176
Aufwendungen für Forderungsausfälle und Dotierung
von Wertberichtigungen zu Forderungen	172	226
Diverse	75	5
Gesamt	4.280	4.417

7. Erträge aus Beteiligungen

Hierunter werden erhaltene Dividenden aus Anteilen an verbundenen Unternehmen TEUR 80.000 (i.Vj.: TEUR 21.500) und aus Beteiligungen TEUR 499 (i.Vj.: TEUR 616) ausgewiesen.

8. Erträge aus Ausleihungen des Finanzanlagevermögens

Hierunter gelangen im Wesentlichen die Zinserträge von Ausleihungen an verbundene Unternehmen zum Ausweis.

9. Sonstige Zinsen und ähnliche Erträge

Die sonstigen Zinsen und ähnlichen Erträge resultieren mit TEUR 649 (i.Vj. TEUR 2.635) aus weiterverrechneten Finanzierungskosten an diverse Konzerngesellschaften, mit TEUR 2 (i.Vj. TEUR 1) aus Bankzinsen und TEUR 1.361 aus der Bewertung von Derivaten und Zinsen (i.Vj. TEUR -17.022).

10. Erträge aus der Zuschreibung zu Finanzanlagen

Hierunter wird im Wesentlichen die Auflösung einer Wertberichtigung auf eine Ausleihung an einem verbundenen Unternehmen i.H.v. TEUR 2.385 (i.Vj. TEUR 3.826) ausgewiesen.

11. Aufwendungen aus Finanzanlagen

Hierunter wird die Wertberichtigung auf Ausleihungen an verbundenen Unternehmen i.H.v. TEUR 0 (i.Vj.: TEUR 322) und die Abschreibung von Wertpapieren des Anlagevermögens i.H.v. TEUR 4 (i.Vj.: TEUR 4) ausgewiesen.

12. Zinsen und ähnliche Aufwendungen

Der Zinsaufwand resultiert im Wesentlichen mit TEUR 2.464 (i.Vj.: TEUR 2.214) aus Bankzinsen, mit 2.076 TEUR (i.Vj.: TEUR 1.896) aus Darlehen von verbundenen Unternehmen, mit TEUR 10.269 (i.Vj.: TEUR 10.290) aus eigenen Anleihen und mit TEUR 647 (i.Vj.: TEUR 571) aus sonstigen Zinsen.

13. Ergebnisanspruch der Genussscheininhaber

Als Ergebnisanspruch der Genussscheininhaber werden für das Jahr 2017 TEUR 4.858 (i.Vj. TEUR 6.735) ausgewiesen.

14. Zuweisung anteilige stille Reserven im Immobilienvermögen für die Genussscheine

Gemäß § 6 Abs 4 der Genussscheinbedingungen haben die Genussscheininhaber bei Laufzeitende, bei Kündigung und im Falle der Auflösung Anspruch auf einen Anteil an den in der Konzernbilanz (nach IFRS) nicht bilanzierten stillen Reserven. Zum 31. Dezember 2017 errechnete sich dieser Anteil mit TEUR 2.138 (i.Vj. TEUR 1.133).

15. Steuern vom Einkommen und vom Ertrag

Dieser Posten beinhaltet mit TEUR 30 (i.Vj.: TEUR 30) den Körperschaftsteueraufwand (Mindest-KöSt für Gruppenträger und Gruppenmitglieder der Unternehmensgruppe nach § 9 KStG für das Jahr 2017). Weiters gelangen Erträge aus Steuerumlagen von zur Unternehmensgruppe gehörenden Gruppenmitgliedern in Höhe von TEUR 27.716 (i.Vj.: TEUR 577) und mit TEUR 0 (i.Vj.: TEUR 9) ein Steuerertrag aus Vorperioden zum Ausweis.

Vom Wahlrecht gem. § 198 Abs. 9 UGB wurde kein Gebrauch gemacht. Für die Erläuterung des Ansatzes latenter Steuern wird auf die Abschnitte I.4. und IV.3. verwiesen.

Die Bilanzierung latenter Steuern erfolgte unter Beachtung der Ausführungen in AFRAC-Stellungnahme 30 ("Latente Steuern im Jahresabschluss nach UGB").

16. Aufwendungen für den Abschlussprüfer

Bezüglich der Angabe gemäß § 238 Abs. 1 Z 18 UGB (Aufwendungen für die Abschlussprüfung) wird auf die entsprechende Angabe im Anhang des Konzernabschlusses zum 31.12.2017 verwiesen, der beim Firmenbuch des Handelsgerichts Wien hinterlegt ist.

Unterlassene Zuschreibungen gem. § 208 Abs. 2 UGB

Im Berichtsjahr wurden wie im Vorjahr keine Zuschreibungen an Anteilen an verbundenen Unternehmen unterlassen.

VII. Sonstige Angaben

Nahestehende Unternehmen und Personen

Es bestehen weder heuer noch im Vorjahr Beziehungen mit nahestehenden Personen, welche nicht fremdüblich sind.

Die Organe der Gesellschaft setzten sich wie folgt zusammen:

Aufsichtsrat :

Dr. Martin SIMHANDL, Wien (Vorsitzender) Dr. Ralf ZEITLBERGER, Wien (1. stellvertretender Vorsitzender) Mag. Franz KERBER, Graz (2. stellvertretender Vorsitzender) Mag. Andrea BESENHOFER, Wien Christian HAGER, Krems Mag. Erwin HAMMERBACHER, Wien (bis 08.06.2017) Michael MATLIN, MBA, New York (bis 30.11.2017) DI Manfred RAPF, Wien (seit 08.06.2017) Mag. Dr. Wilhelm RASINGER, Wien

Vorstand:

Mag. Ernst VEJDOVSZKY Mag. Friedrich WACHERNIG, MBA

Die Aufsichtsratsmitglieder erhielten für das Geschäftsjahr 2017 folgende Vergütungen (inkl. Sitzungsgelder):

Dr. Martin SIMHANDL	EUR 30.000
Mag. Franz KERBER	EUR 27.500
Christian HAGER	EUR 15.000
Mag. Erwin HAMMERBACHER	EUR 11.136
Michael MATLIN, MBA	EUR 11.989
Mag. Dr. Wilhelm RASINGER	EUR 19.000
DI Manfred RAPF	EUR 10.000
Dr. Ralf ZEITLBERGER	EUR 29.000
Mag. Andrea BESENHOFER	EUR 18.000

Die Mitglieder des Vorstandes und des Aufsichtsrates erhielten weder Kredite noch Vorschüsse, es bestehen auch keine zugunsten dieser Personen eingegangenen Haftungsverhältnisse.

Ereignisse nach dem Bilanzstichtag

Im ersten Quartal 2018 hat der Konzern seinen Anteil an der börsenotierten Immofinanz auf 11,82% aufgestockt. Ebenfalls im ersten Quartal 2018 wurden zwei Unternehmensanleihen mit einem Volumen von EUR 100 Mio. in einer sechsjährigen Tranche und einem Volumen von EUR 50 Mio. in einer zwölfjährigen Tranche begeben. Beide Anleihen sind fix verzinst und mit Kupons von 1,75% p.a. (sechsjährig) bzw. 2,875% für die zwölfjährige Tranche ausgestattet.

Wien, am 20. März 2018

Der Vorstand:

Mag. Ernst VEJDOVSZKY e.h. Mag. Friedrich WACHERNIG, MBA e.h.

Bestätigungsvermerk

Bericht zum Jahresabschluss

Prüfungsurteil

Wir haben den Jahresabschluss der S IMMO AG, Wien, bestehend aus der Bilanz zum 31. Dezember 2017, der Gewinn- und Verlustrechnung für das an diesem Stichtag endende Geschäftsjahr und dem Anhang, geprüft.

Nach unserer Beurteilung entspricht der beigefügte Jahresabschluss den gesetzlichen Vorschriften und vermittelt ein möglichst getreues Bild der Vermögens- und Finanzlage zum 31. Dezember 2017 sowie der Ertragslage der Gesellschaft für das an diesem Stichtag endende Geschäftsjahr in Übereinstimmung mit den österreichischen unternehmensrechtlichen Vorschriften.

Grundlage für das Prüfungsurteil

Wir haben unsere Abschlussprüfung in Übereinstimmung mit der EU-Verordnung Nr. 537/ 2014 (im Folgenden EU-VO) und mit den österreichischen Grundsätzen ordnungsmäßiger Abschlussprüfung durchgeführt. Diese Grundsätze erfordern die Anwendung der International Standards on Auditing (ISA). Unsere Verantwortlichkeiten nach diesen Vorschriften und Standards sind im Abschnitt "Verantwortlichkeiten des Abschlussprüfers für die Prüfung des Jahresabschlusses" unseres Bestätigungsvermerks weitergehend beschrieben. Wir sind von der Gesellschaft unabhängig in Übereinstimmung mit den österreichischen unternehmensrechtlichen und berufsrechtlichen Vorschriften, und wir haben unsere sonstigen beruflichen Pflichten in Übereinstimmung mit diesen Anforderungen erfüllt. Wir sind der Auffassung, dass die von uns erlangten Prüfungsnachweise ausreichend und geeignet sind, um als Grundlage für unser Prüfungsurteil zu dienen.

Besonders wichtige Prüfungssachverhalte

Besonders wichtige Prüfungssachverhalte sind solche Sachverhalte, die nach unserem pflichtgemäßen Ermessen am bedeutsamsten für unsere Prüfung des Jahresabschlusses des Geschäftsjahres waren. Diese Sachverhalte wurden im Zusammenhang mit unserer Prüfung des Jahresabschlusses als Ganzem und bei der Bildung unseres Prüfungsurteils hierzu berücksichtigt, und wir geben kein gesondertes Prüfungsurteil zu diesen Sachverhalten ab.

Unsere Darstellung dieser besonders wichtigen Prüfungssachverhalte haben wir wie folgt strukturiert:

• Sachverhalt
• Prüferisches Vorgehen und Erkenntnisse
• Verweis auf weitergehende Information

1. Bewertung der Anteile an verbundenen Unternehmen

• Sachverhalt

Die S IMMO AG, Wien, weist zum 31. Dezember 2017 Anteile an verbundenen Unternehmen mit einem Buchwert in Höhe von TEUR 625.313 (Vorjahr: TEUR 525.278) im Einzelabschluss aus. Gemäß § 204 Abs. 2 UGB sind Anteile an verbundenen Unternehmen bei voraussichtlich dauernder Wertminderung außerplanmäßig abzuschreiben. Die gesetzlichen Vertreter sind der Auffassung, dass dauerhafte Wertminderungen bei den zum 31. Dezember 2017 bilanzierten Anteilen an verbundenen Unternehmen nicht vorliegen. Es erfolgte daher keine außerplanmäßige Abschreibung der Anteile an verbundenen Unternehmen.

• Prüferisches Vorgehen und Erkenntnisse

Wir haben im Zusammenhang mit der Beurteilung der Werthaltigkeit der Buchwerte der Anteile an verbundenen Unternehmen geprüft, inwiefern der jeweilige Beteiligungsansatz im Unternehmenswert der Tochtergesellschaften Deckung findet.

Nachdem es sich bei den Tochtergesellschaften im Wesentlichen um Immobilienbesitzgesellschaften handelt, ergibt sich der Unternehmenswert zum größten Teil aus dem jeweiligen bilanziellen Eigenkapital zuzüglich der etwaigen stillen Reserven/ Lasten im Immobilienvermögen.

Per 31. Dezember 2017 hat die S IMMO AG, Wien, externe Gutachter mit der Verkehrswertermittlung der Immobilien beauftragt.

Wir haben uns von der fachlichen Qualifikation und der Objektivität der externen Sachverständigen überzeugt. Im Rahmen der Prüfung der Bewertung der Anteile an verbundenen Unternehmen haben wir stichprobenartig die Verkehrswerte der Immobilien überprüft. Es wurden sowohl die wesentlichen Bewertungsparameter als auch die Bewertungsmodelle auf Ihre Angemessenheit hin überprüft.

Aufbauend auf den Verkehrswertgutachten wurde der Unternehmenswert der Tochtergesellschaften ermittelt und mit dem jeweiligen zum Stichtag bilanzierten Beteiligungswert verglichen.

Das Bewertungskonzept der Anteile an verbundenen Unternehmen ist angemessen. Die ermittelten Unternehmenswerte entsprechen den Marktverhältnissen zum Bilanzstichtag und sind eine geeignete Grundlage für den Wertminderungstest.

• Verweis auf weitergehende Informationen

Die Angaben der gesetzlichen Vertreter zu den Anteilen an verbundenen Unternehmen sind im Anhang unter den Angaben im Punkt V. Erläuterungen zur Bilanz, Unterpunkt 1.1 Finanzanlagen dargestellt.

Verantwortlichkeiten der gesetzlichen Vertreter und des Prüfungsausschusses für den Jahresabschluss

Die gesetzlichen Vertreter sind verantwortlich für die Aufstellung des Jahresabschlusses und dafür, dass dieser in Übereinstimmung mit den österreichischen unternehmensrechtlichen Vorschriften ein möglichst getreues Bild der Vermögens-, Finanz- und Ertragslage der Gesellschaft vermittelt. Ferner sind die gesetzlichen Vertreter verantwortlich für die internen Kontrollen, die sie als notwendig erachten, um die Aufstellung eines Jahresabschlusses zu ermöglichen, der frei von wesentlichen – beabsichtigten oder unbeabsichtigten – falschen Darstellungen ist.

Bei der Aufstellung des Jahresabschlusses sind die gesetzlichen Vertreter dafür verantwortlich, die Fähigkeit der Gesellschaft zur Fortführung der Unternehmenstätigkeit zu beurteilen, Sachverhalte im Zusammenhang mit der Fortführung der Unternehmenstätigkeit – sofern einschlägig – anzugeben, sowie dafür, den Rechnungslegungsgrundsatz der Fortführung der Unternehmenstätigkeit anzuwenden, es sei denn, die gesetzlichen Vertreter beabsichtigen, entweder die Gesellschaft zu liquidieren oder die Unternehmenstätigkeit einzustellen, oder haben keine realistische Alternative dazu.

Der Prüfungsausschussist verantwortlich für die Überwachung des Rechnungslegungsprozesses der Gesellschaft.

Verantwortlichkeiten des Abschlussprüfers für die Prüfung des Jahresabschlusses

Unsere Ziele sind, hinreichende Sicherheit darüber zu erlangen, ob der Jahresabschluss als Ganzes frei von wesentlichen – beabsichtigten oder unbeabsichtigten – falschen Darstellungen ist, und einen Bestätigungsvermerk zu erteilen, der unser Prüfungsurteil beinhaltet. Hinreichende Sicherheit ist ein hohes Maß an Sicherheit, aber keine Garantie dafür, dass eine in Übereinstimmung mit der EU-VO und mit den österreichischen Grundsätzen ordnungsmäßiger Abschlussprüfung, die die Anwendung der ISA erfordern, durchgeführte Abschlussprüfung eine wesentliche falsche Darstellung, falls eine solche vorliegt, stets aufdeckt. Falsche Darstellungen können aus dolosen Handlungen oder Irrtümern resultieren und werden als wesentlich angesehen, wenn von ihnen einzeln oder insgesamt vernünftigerweise erwartet werden könnte, dass sie die auf der Grundlage dieses Jahresabschlusses getroffenen wirtschaftlichen Entscheidungen von Nutzern beeinflussen.

Als Teil einer Abschlussprüfung in Übereinstimmung mit der EU VO und mit den österreichischen Grundsätzen ordnungsmäßiger Abschlussprüfung, die die Anwendung der ISA erfordern, üben wir während der gesamten Abschlussprüfung pflichtgemäßes Ermessen aus und bewahren eine kritische Grundhaltung.

Darüber hinaus gilt:

• Wir identifizieren und beurteilen die Risiken wesentlicher – beabsichtigter oder unbeabsichtigter – falscher Darstellungen im Abschluss, planen Prüfungshandlungen als Reaktion auf diese Risiken, führen sie durch und erlangen Prüfungsnachweise, die ausreichend und geeignet sind, um als Grundlage für unser Prüfungsurteil zu dienen. Das Risiko, dass aus dolosen Handlungen resultierende wesentliche falsche Darstellungen nicht aufgedeckt werden, ist höher als ein aus Irrtümern resultierendes, da dolose Handlungen betrügerisches Zusammenwirken, Fälschungen, beabsichtigte Unvollständigkeiten, irreführende Darstellungen oder das Außerkraftsetzen interner Kontrollen beinhalten können.

• Wir gewinnen ein Verständnis von dem für die Abschlussprüfung relevanten internen Kontrollsystem, um Prüfungshandlungen zu planen, die unter den gegebenen Umständen angemessen sind, jedoch nicht mit dem Ziel, ein Prüfungsurteil zur Wirksamkeit des internen Kontrollsystems der Gesellschaft abzugeben.
• Wir beurteilen die Angemessenheit der von den gesetzlichen Vertretern angewandten Rechnungslegungsmethoden sowie die Vertretbarkeit der von den gesetzlichen Vertretern dargestellten geschätzten Werte in der Rechnungslegung und damit zusammenhängende Angaben.
• Wir ziehen Schlussfolgerungen über die Angemessenheit der Anwendung des Rechnungslegungsgrundsatzes der Fortführung der Unternehmenstätigkeit durch die gesetzlichen Vertreter sowie, auf der Grundlage der erlangten Prüfungsnachweise, ob eine wesentliche Unsicherheit im Zusammenhang mit Ereignissen oder Gegebenheiten besteht, die erhebliche Zweifel an der Fähigkeit der Gesellschaft zur Fortführung der Unternehmenstätigkeit aufwerfen kann. Falls wir die Schlussfolgerung ziehen, dass eine wesentliche Unsicherheit besteht, sind wir verpflichtet, in unserem Bestätigungsvermerk auf die dazugehörigen Angaben im Jahresabschluss aufmerksam zu machen oder, falls diese Angaben unangemessen sind, unser Prüfungsurteil zu modifizieren. Wir ziehen unsere Schlussfolgerungen auf der Grundlage der bis zum Datum unseres Bestätigungsvermerks erlangten Prüfungsnachweise. Zukünftige Ereignisse oder Gegebenheiten können jedoch die Abkehr der Gesellschaft von der Fortführung der Unternehmenstätigkeit zur Folge haben.
• Wir beurteilen die Gesamtdarstellung, den Aufbau und den Inhalt des Jahresabschlusses einschließlich der Angaben sowie ob der Jahresabschluss die zugrunde liegenden Geschäftsvorfälle und Ereignisse in einer Weise wiedergibt, dass ein möglichst getreues Bild erreicht wird.

Wir tauschen uns mit dem Prüfungsausschuss unter anderem über den geplanten Umfang und die geplante zeitliche Einteilung der Abschlussprüfung sowie über bedeutsame Prüfungsfeststellungen, einschließlich etwaiger bedeutsamer Mängel im internen Kontrollsystem, die wir während unserer Abschlussprüfung erkennen, aus.

Wir geben dem Prüfungsausschuss auch eine Erklärung ab, dass wir die relevanten beruflichen Verhaltensanforderungen zur Unabhängigkeit eingehalten haben, und tauschen uns mit ihm über alle Beziehungen und sonstigen Sachverhalte aus, von denen vernünftigerweise angenommen werden kann, dass sie sich auf unsere Unabhängigkeit und – sofern einschlägig – damit zusammenhängende Schutzmaßnahmen auswirken.

Wir bestimmen von den Sachverhalten, über die wir uns mit dem Prüfungsausschuss ausgetauscht haben, diejenigen Sachverhalte, die am bedeutsamsten für die Prüfung des Jahresabschlusses des Geschäftsjahres waren und daher die besonders wichtigen Prüfungssachverhalte sind. Wir beschreiben diese Sachverhalte in unserem Bestätigungsvermerk, es sei denn, Gesetze oder andere Rechtsvorschriften schließen die öffentliche Angabe des Sachverhalts aus oder wir bestimmen in äußerst seltenen Fällen, dass ein Sachverhalt nicht in unserem Bestätigungsvermerk mitgeteilt werden sollte, weil vernünftigerweise erwartet wird, dass die negativen Folgen einer solchen Mitteilung deren Vorteile für das öffentliche Interesse übersteigen würden.

Sonstige gesetzliche und andere rechtliche Anforderungen

Bericht zum Lagebericht

Der Lagebericht ist auf Grund der österreichischen unternehmensrechtlichen Vorschriften darauf zu prüfen, ob er mit dem Jahresabschluss in Einklang steht und ob er nach den geltenden rechtlichen Anforderungen aufgestellt wurde.

Die gesetzlichen Vertreter sind verantwortlich für die Aufstellung des Lageberichts in Übereinstimmung mit den österreichischen unternehmensrechtlichen Vorschriften.

Wir haben unsere Prüfung in Übereinstimmung mit den Berufsgrundsätzen zur Prüfung des Lageberichts durchgeführt.

Urteil

Nach unserer Beurteilung ist der Lagebericht nach den geltenden rechtlichen Anforderungen aufgestellt worden, enthält zutreffende Angaben nach § 243a UGB, und steht in Einklang mit dem Jahresabschluss.

Erklärung

Angesichts der bei der Prüfung des Jahresabschlusses gewonnenen Erkenntnisse und des gewonnenen Verständnisses über die Gesellschaft und ihr Umfeld wurden wesentliche fehlerhafte Angaben im Lagebericht nicht festgestellt.

Sonstige Informationen

Die gesetzlichen Vertreter sind für die sonstigen Informationen verantwortlich. Die sonstigen Informationen beinhalten alle Informationen im Geschäftsbericht, ausgenommen den Jahresabschluss, den Lagebericht und den Bestätigungsvermerk. Der Geschäftsbericht wird uns voraussichtlich nach dem Datum des Bestätigungsvermerks zur Verfügung gestellt.

Unser Prüfungsurteil zum Jahresabschluss deckt diese sonstigen Informationen nicht ab, und wir werden keine Art der Zusicherung darauf geben.

In Verbindung mit unserer Prüfung des Jahresabschlusses ist es unsere Verantwortung, diese sonstigen Informationen zu lesen, sobald diese vorhanden sind, und abzuwägen, ob sie angesichts des bei der Prüfung gewonnenen Verständnisses wesentlich in Widerspruch zum Jahresabschluss stehen oder sonst wesentlich falsch dargestellt erscheinen.

Zusätzliche Angaben nach Artikel 10 der EU-VO

Wir wurden von der Hauptversammlung am 8. Juni 2017 als Abschlussprüfer gewählt. Wir wurden am 4. August 2017 vom Aufsichtsrat beauftragt. Wir sind ununterbrochen seit 2013 Abschlussprüfer.

Wir erklären, dass das Prüfungsurteil im Abschnitt "Bericht zum Jahresabschluss" mit dem zusätzlichen Bericht an den Prüfungsausschuss nach Artikel 11 der EU-VO in Einklang steht.

Wir erklären, dass wir keine verbotenen Nichtprüfungsleistungen (Artikel 5 Abs. 1 der EU-VO) erbracht haben und dass wir bei der Durchführung der Abschlussprüfung unsere Unabhängigkeit von der geprüften Gesellschaft gewahrt haben.

Auftragsverantwortlicher Wirtschaftsprüfer

Der für die Abschlussprüfung auftragsverantwortliche Wirtschaftsprüfer ist Herr Mag. Peter Pessenlehner, Wirtschaftsprüfer.

Wien, den 20. März 2018

PwC Wirtschaftsprüfung GmbH

gez.:

Mag. Peter Pessenlehner Wirtschaftsprüfer

Die Veröffentlichung oder Weitergabe des Jahresabschlusses mit unserem Bestätigungsvermerk darf nur in der von uns bestätigten Fassung erfolgen. Dieser Bestätigungsvermerk bezieht sich ausschließlich auf den deutschsprachigen und vollständigen Jahresabschluss samt Lagebericht. Für abweichende Fassungen sind die Vorschriften des § 281 Abs. 2 UGB zu beachten.