5 Additional information
5.1 Taxes
5.1.1 Breakdown of tax expense
In the income statement, expense for 2017 and 2016 breaks down as follows:
CHF million | Note | 2017 | 2016 | |||
Current taxes on business activities | 5.1.2 | –17.7 | –23.1 | |||
Deferred taxes on revaluation | 5.1.4 | –5.9 | –23.6 | |||
Other deferred taxes | 5.1.5 | –7.2 | –7.6 | |||
Total tax expense | –30.8 | –54.3 |
5.1.2 Current taxes on business activities
Current income taxes are calculated using the actual tax rates in force.
This position comprises income taxes and property gains taxes:
CHF million | 2017 | 2016 | ||
Income taxes | –11.5 | –9.0 | ||
Property gains taxes | –6.2 | –14.1 | ||
Current taxes on business activities | –17.7 | –23.1 |
In the Projects & Development division, expenses for property gains taxes are contingent on the time of sale of development real estate; in the Real Estate division, they are contingent on sales from the portfolio. These property taxes are incurred on a cyclical basis accordingly.
5.1.3 Current tax liabilities
As at 31 December, the following receivables and liabilities are due from or owed to municipal and cantonal tax authorities:
CHF million | 31.12.2017 | 31.12.2016 | ||
Property gains taxes | 4.2 | 4.8 | ||
Federal, cantonal and municipal taxes 2012 | 0.0 | –0.1 | ||
Federal, cantonal and municipal taxes 2013 | 0.0 | –0.6 | ||
Federal, cantonal and municipal taxes 2014 | –0.4 | –0.5 | ||
Federal, cantonal and municipal taxes 2015 | –0.6 | –2.9 | ||
Federal, cantonal and municipal taxes 2016 | –0.9 | 6.7 | ||
Federal, cantonal and municipal taxes 2017 | 7.8 | 0.0 | ||
Current tax liabilities | 10.1 | 7.4 |
5.1.4 Deferred taxes on revaluation in the income statement
The deferred taxes on revaluation break down as follows:
CHF million | 2017 | 2016 | ||
From revaluation during current year | –5.9 | –23.6 | ||
Total deferred taxes from revaluation | –5.9 | –23.6 |
The upward valuation of CHF 21.8 million on the investment real estate led to a net charge of CHF –5.9 million to deferred taxes in the income statement, CHF –1.3 million of which was attributable to investment real estate under construction and CHF –4.6 million to yield-producing properties.
5.1.5 Other deferred taxes in the income statement
CHF million | 2017 | 2016 | ||
From temporary valuation differences | –2.3 | –19.7 | ||
From capitalised tax effects of loss carry-forwards | –8.4 | 5.9 | ||
From recognition of bond issues | 0.2 | 0.0 | ||
From recognition of pension commitments | 0.4 | 0.2 | ||
From write-back as a result of property sales | 0.0 | 6.0 | ||
From write-back of hedging reserves | 2.9 | 0.0 | ||
Total other deferred taxes | –7.2 | –7.6 |
During the period under review, the temporary valuation differences between the tax-relevant individual financial statements of the Group companies and the consolidated financial statements increased, such that deferred tax income of CHF –2.3 million was charged to the income statement.
In addition, tax effects amounting to CHF 8.4 million arising from loss carry-forwards and valued at the consolidated tax rate of 22% were charged to the income statement.
Recycling of the hedging reserve, see 3.9, led to deferred taxes of CHF 2.9 million.
5.1.6 Deferred tax liabilities and assets
The deferred tax liabilities from the provision for deferred taxes reported under long-term liabilities break down as follows:
CHF million | 31.12.2017 | 31.12.2016 | ||
From higher valuation of investment real estate | 97.3 | 95.9 | ||
From temporary valuation differences on investment real estate | 103.7 | 96.1 | ||
From temporary valuation differences on other balance sheet items | –0.7 | 0.2 | ||
From recognition of pension commitments | 2.2 | 0.0 | ||
From recognition of bond issues | 0.1 | 0.3 | ||
Provisions for deferred tax | 202.6 | 192.5 |
The deferred tax liabilities in connection with the higher valuation of investment real estate (difference between market and acquisition value) are based on an average holding period of at least ten years from date of purchase, or year of construction in the case of new properties, and a tax rate of up to 32% (2016: 31%). Deferred taxes are calculated separately for each investment property.
Temporary valuation differences on investment real estate (difference between acquisition value and taxable book value) and other balance sheet positions record the differences between the individual financial statements of the Allreal Group companies and the consolidated financial statements. These mainly involve write-downs on investment and development real estate, additional value adjustments on receivables and the recognition of additional provisions deducted from the current tax assessment.
Valuation differences on write-downs on investment real estate in the Canton of Zurich and on other balance sheet positions are calculated at 20 to 22% (2016: 21–22%). A tax rate of 14 to 24% (2016: 14–24%) was applied to valuation differences on write-downs on investment real estate outside the Canton of Zurich.
In 2017, with the amortisation of the bond issues, deferred taxes totalling CHF 0.2 million were credited to the income statement (2016: CHF 0.1 million).
Deferred tax assets comprise the following positions:
CHF million | 2017 | 2016 | ||
From tax loss carry-forwards | 23.0 | 31.0 | ||
From recognition of pension commitments | 0.0 | 2.8 | ||
From temporary valuation differences on other balance sheet items | 0.3 | 0.8 | ||
Deferred tax assets | 23.3 | 34.6 |
As at 31 December 2017, capitalised deferred taxes existed on tax loss carry-forwards of CHF 23.0 million (31.12.2016: CHF 31.0 million) relating to Group companies domiciled in Zurich which reported cumulative losses in the individual financial statements, which losses are likely to be offset against gains in the following years (expiry of first tax loss carry-forward as of 2018). A tax rate of 22% was applied (2016: 22%).
The recognition of pension commitments results in deferred tax liabilities amounting to CHF 2.2 million as at the balance sheet cut-off date (31.12.2016: deferred tax assets of CHF 2.8 million), representing a year-on-year decrease of CHF 5.0 million, CHF 5.4 million of which was taken directly to other earnings and CHF 0.4 million to income.
5.1.7 Reconciliation
The following table shows the reconciliation between the theoretical tax rates applicable to the Group and the effective taxes.
CHF million | 2017 | 2016 | ||
Earnings before tax | 160.0 | 227.9 | ||
Reference tax rate % | 22.0 | 22.0 | ||
Expected tax expense at the reference tax rate | 35.2 | 50.1 | ||
Adjustment of tax effects on revaluations | 1.1 | 4.9 | ||
Deferred taxes credited for previous years | –0.5 | –2.8 | ||
Income subject to a lower tax rate | –8.6 | –2.4 | ||
Income subject to higher tax rate | 3.6 | 4.5 | ||
Effective tax expense | 30.8 | 54.3 |
The reference tax rate used is the sum total of the national, cantonal and municipal income tax rates which are applied on average.
The adjustment of tax effects on revaluations reflects the change in the upward and downward valuations of investment properties and their cumulative balance, encumbered with up to 32% deferred taxes and as the difference versus the reference tax rate of 10%.
The credit of CHF 0.5 million for current taxes of previous years results from the recalculation of the tax status of each Group company on the basis of tax returns submitted or definitive tax assessments received.
Income subject to a lower tax rate factors in that a number of the Group companies are domiciled at locations where the total tax burden is significantly lower than the reference tax rate of 22%.
Income subject to a higher tax rate factors in that gains on real estate subject to property gains tax are taxed at total tax rates of up to 40% and are therefore above the reference tax rate of 22%. In particular, this relates to gains taxed in connection with the invoicing of completed projects in the Projects & Development division or from the sale of investment properties in the Real Estate division.
5.2 Capital commitments, contingent liabilities and legal disputes
CHF million | 31.12.2017 | 31.12.2016 | ||
Purchase commitments | 18.5 | 18.5 | ||
Guarantees and sureties | 0.0 | 0.0 |
The capital commitments relate to contractual agreements for the acquisition of development real estate. Whether the commitment is invoked depends on the fulfilment of the conditions agreed with the counterparties.
As in the previous year, there are no guarantees or sureties in favour of third parties. Beyond this, in the individual financial statement, Allreal Holding AG has issued guarantees and sureties amounting to an additional CHF 346.0 million in connection with financings with third parties on behalf of individual subsidiaries (2016: CHF 421.6 million).
As at 31 December 2017, there are no pending legal disputes of a nature liable to have a significant impact on the asset and income situation of Allreal Group for which no corresponding provisions are in place.
5.3 Assets pledged as security for own liabilities
CHF million | 31.12.2017 | 31.12.2016 | ||
Investment real estate | 3 956.6 | 3 574.5 | ||
Development real estate | 116.5 | 165.7 | ||
Total assets affected | 4 073.1 | 3 740.2 | ||
of which pledged or subject to restricted disposability | 3 272.9 | 3 055.6 | ||
of which actually utilised (borrowings) | 958.3 | 956.3 |
5.4 Financial instruments
5.4.1 Management of finance and capital
In the context of the financing strategy, in the investment and financing guidelines last amended on 1 October 2013 the Board of Directors issued rules on the extent to which Allreal Group can take out external debt. The share of consolidated equity must be over 35% on the balance sheet cut-off date, net gearing must not exceed 150%, the interest coverage ratio must not fall below 2.0 and the investment and development real estate balance sheet positions may only be refinanced with a maximum of 70% interest-bearing borrowings.
The Board of Directors reviews the capital structure on a quarterly basis and monitors in particular compliance with the limits set out in the investment and financing guidelines. Capital management encompasses both equity capital and interest-bearing borrowings (net financial debt).
The contractual terms agreed with lenders regarding minimum capitalisation (financial covenants) are identical to those laid down by the internal investment and financing guidelines. During the period under review, they were complied with without exception and are as follows as at the balance sheet cut-off date:
Equity ratio
(equity as a percentage of total assets)
CHF million | 31.12.2017 | 31.12.2016 | ||
Equity | 2 150.7 | 2 086.8 | ||
Equity and liabilities | 4 359.6 | 3 992.9 | ||
Equity ratio | 49.3% | 52.3% |
Net Gearing
(net financial debt as a percentage of consolidated equity)
CHF million | 31.12.2017 | 31.12.2016 | ||
Borrowings | 1 913.0 | 1 600.7 | ||
Cash | –38.1 | –21.4 | ||
Net financial debt | 1 874.9 | 1 579.3 | ||
Equity | 2 150.7 | 2 086.8 | ||
Net gearing | 87.2% | 75.7% |
Interest coverage ratio
(EBITDA excl. revaluation gains divided by net financial expense)
CHF million | 31.12.2017 | 31.12.2016 | ||
EBITDA excl. revaluation gains | 166.0 | 181.0 | ||
Net financial expense | 27.5 | 37.7 | ||
Interest coverage ratio | 6.0 | 4.8 |
Refinancing of properties
(Borrowings in percent of the book value of investment and development real estate)
CHF million | 31.12.2017 | 31.12.2016 | ||
Borrowings | 1 913.0 |
| 1 600.7 | |
Investment real estate | 3 956.6 | 3 574.5 | ||
Development real estate | 116.5 | 165.7 | ||
Total real estate | 4 073.1 | 3 740.2 | ||
Refinancing of properties | 47.0% | 42.8% |
If the financial covenants are not complied with, the lenders are contractually entitled to raise the margins for financing, introduce amortisation obligations or demand full repayment of loans.
5.4.2 Financial risk management
Allreal Group is exposed to various financial risks stemming from the market, changes in interest rates, receivables, refinancing and liquidity. Risk management is conducted in compliance with the investment and financing guidelines approved by the Board of Directors. The operational implementation of the guidelines is undertaken directly by the Chief Executive Officer or the Chief Financial Officer, who submits reports to Group Management on key financial ratios at least once a month. The Board of Directors is informed of the development of financial risks in writing every three months by Group Management.
5.4.3 Market interest rate risk
Fluctuations in the market interest rate give rise to an interest rate risk for Allreal as part of the borrowings are in the form of fixed advances with mortgage collateral or mortgage loans on a short-term basis up to a maximum of six months. Advances are taken out with banks and are denominated exclusively in Swiss francs. As at the balance sheet cut-off date, these advances amounted to CHF 555.0 million, corresponding to 29.0% of all borrowings.
The remaining financial liabilities are refinanced through bond issues and fixed-rate mortgages to prevent interest rate risk during their term.
The maturity structure is reviewed by the Board of Directors and Group Management at least quarterly, and the risks are analysed by means of simplified liability management. The aim is to achieve an even distribution of the maturities structure of the financial liabilities.
For the purposes of a sensitivity analysis, it was assumed that all balance sheet positions as at 31 December were in place on the same scale for a whole year and that the interest rate level changes by one percentage point at the beginning of the period. This would mean that net profit would remain unchanged if interest rates fell by 1%. If interest rates were to go up by 1%, net profit would decrease by –1.4 million (2016: CHF 0.0 million) / CHF –0.7 million).
5.4.4 Credit risk
The credit risk to which Allreal is exposed is that a counterparty might be unable to meet its financial obligations owing to default, resulting in losses for the Group. Customers’ payment arrears and credit standing are continuously monitored in both the Projects & Development division and the Real Estate division. Monthly reports with comments on the largest positions are submitted to Group Management.
Trade receivables and other receivables consist of a large number of balances owed by counterparties in the Projects & Development division and owed by tenants and property management companies in the Real Estate division. Receivables from tenancies are typically secured via separate bank guarantees or tenant deposits. There are no concentrations of risk in which a single debtor accounts for more than 20% of total trade receivables. Payments on account are periodically requested for current construction projects. Allreal’s close monitoring of receivables explains its low historical default rate.
The credit risk relating to cash and derivative financial instruments is considered small as the counterparties consist solely of banks and insurance companies with good credit ratings (minimum long-term rating of BBB+). Allreal endeavours to work with a large number of banks which mainly operate in Switzerland. At CHF 23.9 million, the maximum default risk relating to cash is lower than the book value of CHF 38.1 million, since with a number of lending banks waiver of the right to offset credit balance against liabilities was contractually excluded.
The maximum default risk relating to receivables and other claims corresponds to the book value. The guarantees and sureties issued in favour of banks in connection with financing transactions are not likely to give rise to any additional charges greater than the recognised borrowings from banks and insurance companies amounting to CHF 958.3 million.
As at the balance sheet cut-off date, the credit risk relating to financial assets amounts to CHF 133.2 million, which, with the exception of the pension plan assets (IAS 19) of CHF 9.9 million, corresponds to the balance sheet item.
5.4.5 Refinancing and liquidity risk
As at the balance sheet cut-off date, unutilised immediately callable credit limits granted by banks are in place in an amount of CHF 544 million. The binding financial ratios agreed with banks in the credit agreements are the same as those laid down in the investment and financing guidelines; during the period under review they were complied with at all times. Three-year medium-term planning is in place for Allreal Group which ensures that the thresholds are complied with on a rolling basis through early extension of maturing loans. Under the financial covenants, Allreal has the option of taking out around CHF 1.35 billion in new borrowings before new equity is required.
The following breakdown shows the non-discounted payment outflows of existing liabilities. In accordance with contractual agreements, the earliest possible repayments are entered as the maturity dates.
Interest and nominal amount payments on liabilities
CHF million | Book value | < 1 year | 1–3 years | > 3 years | ||||
As at 31.12.2016 | ||||||||
Borrowings (incl. interest) | 1 600.7 | 695.1 | 152.7 | 810.8 | ||||
Trade payables (excl. order balances) | 35.5 | 35.5 | 0.0 | 0.0 | ||||
Other current liabilities | 20.6 | 19.7 | 0.9 | 0.0 | ||||
Total | 1 656.8 | 750.3 | 153.6 | 810.8 | ||||
As at 31.12.2017 | ||||||||
Borrowings (incl. interest) | 1 913.0 | 573.1 | 332.0 | 1 083.6 | ||||
Trade payables (excl. order balances) | 33.5 | 33.5 | 0.0 | 0.0 | ||||
Other current liabilities | 17.0 | 17.0 | 0.0 | 0.0 | ||||
Total | 1 963.6 | 623.7 | 332.0 | 1 083.6 |
5.4.6 Market valuation of financial assets and liabilities
Financial assets and borrowings are recognised using the amortised cost method.
With the exception of the borrowings shown below, it can be assumed that the book values of the financial assets and the other financial liabilities correspond to fair values.
CHF million | Fair value category | Nominal | 31.12.2017 | 31.12.2017 | 31.12.2016 | 31.12.2016 | ||||||||
0.875% bond issue 2017–30.03.2027 | 1 | 160.0 | 160.2 | 163.5 | – | – | ||||||||
0.75% bond issue 2017–19.06.2026 | 1 | 150.0 | 149.9 | 150.6 | – | – | ||||||||
1.375% bond issue 2015–31.03.2025 | 1 | 100.0 | 100.4 | 106.3 | 100.4 | 106.6 | ||||||||
0.625% bond issue 2016–10.05.2024 | 1 | 150.0 | 149.5 | 152.0 | 149.4 | 150.0 | ||||||||
0.75% bond issue 2015–31.03.2021 | 1 | 120.0 | 120.3 | 122.3 | 120.4 | 122.2 | ||||||||
2.00% bond issue 2013–23.09.2020 | 1 | 150.0 | 149.5 | 157.8 | 149.4 | 159.9 | ||||||||
1.25% bond issue 2014–02.04.2019 | 1 | 125.0 | 124.9 | 127.3 | 124.8 | 128.4 | ||||||||
Fixed-rate mortgages | 2 | 403.3 | 403.3 | 411.5 | 276.3 | 286.6 |
The fair values of the bond issues correspond to the market price as at the balance sheet cut-off date. The fair values of the fixed-rate mortgages are determined using the CHF interest rates current as at 31 December for the respective terms (at least 0.0%) plus a credit margin of 0.7% (2016: 0.7%).
The following table shows the book and market values (fair values) of all financial instruments recognised on the balance sheet.
CHF million | 31.12.2017 | 31.12.2017 | 31.12.2016 | 31.12.2016 | ||||
Financial assets | ||||||||
Assets at amortised cost | 221.8 | 221.8 | 192.1 | 192.1 | ||||
Cash | 38.1 | 38.1 | 21.4 | 21.4 | ||||
Loans and receivables | 249.9 | 249.9 | 213.5 | 213.5 | ||||
Financial liabilities | ||||||||
Borrowings at amortised cost | 1 913.0 | 1 946.5 | 1 600.7 | 1 633.5 | ||||
Other liabilities at amortised cost | 49.0 | 49.0 | 56.1 | 56.1 |
5.5 Transactions with related parties
The Board of Directors, Group Management and the Allreal pension fund are deemed to be related parties. The parties to the shareholders’ pooling agreement were also deemed to be related parties until it was terminated on 24 April 2017.
The seven members of the Board of Directors received fixed remunerations totalling CHF 0.63 million (2016: CHF 0.63 million), which is paid out after the annual accounts have been approved by the annual general meeting. These persons do not receive any other remuneration.
Name | Title | 2017 | 2016 | |||
Bruno Bettoni | Chairman | 0.15 | 0.15 | |||
Dr Ralph-Thomas Honegger | Vice Chairman | 0.08 | 0.08 | |||
Albert Leiser | Member | 0.08 | 0.08 | |||
Olivier Steimer | Member | 0.08 | 0.08 | |||
Peter Spuhler | Member | 0.08 | 0.08 | |||
Andrea Sieber | Member | 0.08 | 0.08 | |||
Thomas Stenz | Member | 0.08 | 0.08 |
The remuneration of the Board of Directors is paid directly by Allreal Holding AG. The members of Group Management are employees of Allreal Generalunternehmung AG – a wholly owned subsidiary of Allreal Holding AG – which pays the remuneration of these persons. All amounts represent gross payments before the social insurance contributions paid by the remuneration recipients. The employer’s share of the social insurance contributions is not included.
In the period under review, remuneration totalling CHF 3.35 million (2016: CHF 3.12 million) paid to Group Management was recognised in the consolidated financial statements, out of which the highest total remuneration of CHF 1.17 million (2016: CHF 1.15 million) was paid to Roger Herzog.
Variable bonuses will be paid out in cash after the annual accounts, and the compensation report have been approved by the Board of Directors.
CHF million | 2017 | 2016 | ||
Roger Herzog, Chief Executive Officer | ||||
Fixed basic salary | 0.73 | 0.73 | ||
Employer’s contributions management pension plan | 0.19 | 0.10 | ||
Variable bonus in form of cash payment | 0.18 | 0.25 | ||
Variable remuneration in form of shares1 | 0.07 | 0.07 | ||
Total remuneration | 1.17 | 1.15 | ||
Other members of Group Management | ||||
Fixed basic salaries | 1.22 | 1.24 | ||
Employer’s contributions management pension plan | 0.29 | 0.23 | ||
Variable bonuses in form of cash payment | 0.55 | 0.41 | ||
Variable remuneration in form of shares1 | 0.12 | 0.09 | ||
Total remuneration | 2.18 | 1.97 |
1 Calculated at the market value on date of allocation
In summary, the following remunerations paid to the Board of Directors and Group Management were recognised in the consolidated financial statements:
CHF million | 2017 | 2016 | ||
Short-term benefits | 3.79 |
| 3.59 | |
Benefits paid after termination of employment contract | 0.00 | 0.00 | ||
Termination payments | 0.00 | 0.00 | ||
Benefits from shares and option plans | 0.19 | 0.16 | ||
Other long-term benefits | 0.00 | 0.00 | ||
Total | 3.98 | 3.75 |
In the period under review and in the previous year, no loans, credits or sureties were granted to members of the Board of Directors and Group Management or parties related to them, nor to former members of these bodies.
As at 31 December 2017, the following members of the Board of Directors and Group Management were directly or indirectly invested in Allreal Holding AG:
Name | Title | Number of shares | Value in CHF million | Number of shares | Value in CHF million | |||||
2017 | 2016 | |||||||||
Bruno Bettoni | Chairman of the Board of Directors | 18 180 | 3.00 | 18 180 | 2.75 | |||||
Dr Ralph-Thomas Honegger | Vice Chairman of the | 400 | 0.07 | 400 | 0.06 | |||||
Peter Spuhler | Member of the Board of | 261 047 | 43.02 | 266 000 | 40.25 | |||||
Olivier Steimer | Member of the Board of | 1 000 | 0.16 | 1 000 | 0.15 | |||||
Thomas Stenz | Member of the Board of Directors | 470 | 0.08 | 220 | 0.03 | |||||
Roger Herzog | Chief Executive Officer | 1 693 | 0.28 | 1 471 | 0.22 | |||||
Hans Engel | Member of Group Management | 0 | 0.0 | 142 | 0.02 | |||||
Alain Paratte | Member of Group Management | 763 | 0.13 | 682 | 0.10 | |||||
Nigel Woolfson | Member of Group Management | 805 | 0.13 | 712 | 0.11 |
The shareholding of the Helvetia Group, St. Gallen, in which Dr Ralph-Thomas Honegger performs the function of Chief Investment Officer (CIO) and is a member of the executive management, is not included in the table.
The shares held by the members of the Board of Directors and Group Management correspond to 1.78% of the share capital of the company (31.12.2016: 1.81%).
During the year under review, the Projects & Development division carried out construction projects for a total of CHF 6.5 million (2016: CHF 18.7 million) for several parties to the shareholders’ pooling agreement (until termination of the latter on 24 April 2017) under standard market conditions, which corresponds to 1.8% of income from realisation Projects & Development (2016: 4.5%).
The Helvetia Group, which holds 10.6% of Allreal Holding AG’s share capital, is represented on the Board of Directors of Allreal Holding AG by Dr Ralph-Thomas Honegger. Insurance contracts (policies covering buildings, construction and personnel) are in place between the Helvetia Group and individual Allreal companies with an annual premium volume of CHF 1.4 million (2016: CHF 1.2 million).
For several years, Allreal has had a business relationship with Banque Cantonale Vaudoise, where Olivier Steimer, member of the Board of Directors of Allreal Holding AG, held the office of Chairman of the Board of Directors until 31 December 2017. As at the balance sheet cut-off date, there are mortgage-backed loans in the amount of CHF 50.0 million (interest rate of 0.6% with terms to February 2018) in place.
Allreal obtains legal consulting services from several law firms, including Meyerlustenberger Lachenal Attorneys at Law, in which Andrea Sieber is a partner. In the 2017 financial year, Allreal was charged fees amounting to CHF 0.032 million (2016: CHF 0.057 million).
The Allreal pension fund holds Allreal registered shares with a value of CHF 1.9 million (2016: CHF 1.7 million). As at the balance sheet cut-off date, there are no receivables or liabilities between the Allreal pension fund and the Allreal companies. During the period under review, Allreal’s employer’s contributions amounted to CHF 2.4 million (2016: CHF 2.5 million).
Taking the above-mentioned into account, as at the balance sheet date, there are no significant outstanding receivables or liabilities between any related parties, and no other transactions with related parties took place in 2017.
5.6 Intercompany relationships
The transactions between the individual Group companies are carried out at arm’s length. This also applies in particular to building services provided to the Real Estate division by the Projects & Development division.
In addition, the Projects & Development division performs management services for the other parts of the company. In 2017, it received CHF 5.0 million (2016: CHF 5.0 million) from the Real Estate division as well as CHF 0.6 million (2016: CHF 0.6 million) from Allreal Holding AG for such services. These sums were eliminated in the consolidated financial statements.
5.7 Events after the balance sheet date
Between 31 December 2017 and 13 February 2018 (date on which the consolidated financial statements were approved by the Board of Directors), no further events took place which would result in any adjustments to the book values of the assets and liabilities or which would need to be disclosed here.