GECINA - REFERENCE DOCUMENT 2017

06

RISKS Risks

Risks

Change over the 2016-2017 period

CONTROL PROCESSES

MODERATE RISK LEVEL RISKS LINKED TO FAILURE TO ISSUE ADMINISTRATIVE PERMITS AND REVIEW

Risks of refusal to issue, late issue, or review, withdrawal or expiration of the administrative permits required for the company’s property investments. Impacts: operational delays, carrying costs; ■ cost overruns, sometimes resulting in ■ the abandonment of operations; impossibility of operating certain ■ assets.

operations are carried out under the supervision of ■ specialized internal departments (real estate programs). These departments organize a regulatory watch in conjunction with the Legal Department and external consultants; permit applications are anticipated at the project ■ design phase and are factored into the business plans of operations; significant development projects are also reviewed ■ and approved by the Investment Committee; the implementation of permit applications is then ■ frequently checked by the specialist department in charge, which may seek the assistance of external project managers or consultants. all transactions related to financial instruments or ■ treasury shares are subject to procedures that include rules for approval, authorization and formalized controls; the use of hedging instruments is governed by a ■ formalized management framework; lastly, Gecina is not exposed to foreign exchange ■ risk. FINANCIAL RISKS – MARKET RISK

This risk was stable over the period under consideration. Its impacts, mainly financial (carrying costs, etc.), and potentially to the Group’s reputation, are considered as moderate. The Group’s regulatory intelligence and internal procedures are the main control tools.

The risk primarily covers financial assets held for the long term or for sale. Financial fixed assets are immaterial at Group level. They are primarily comprised of securities and financial advances linked to investments in Spain, which have been fully written down for impairment. The Group is primarily exposed to the risk of fluctuations in its financial instruments used exclusively to hedge its debt and treasury shares. Foreign exchange risk. Impacts: changes in the stock prices of financial ■ investments, as well as in the treasury shares it holds; fluctuations in the value of liabilities ■ could result in a change to its Net Asset Value. Risk of not having the financial resources necessary for the everyday running of the company’s activities and investment or acquiring them under adverse conditions. This risk is specifically influenced by changes in financial and property markets, but also by the company’s strategy, performance and financial management (see section 3.5.4.4 on “Liquidity risk”). Impacts: a potential credit crunch among banks ■ or downgrading of Gecina’s credit rating could affect the Group’s ability to raise funds.

The Group has little exposure to this risk which is considered stable.

FINANCIAL RISKS – LIQUIDITY RISK

this risk is managed by constantly monitoring the ■ maturity of loans, maintaining available credit lines, and diversifying resources and counterparties, in addition to monthly cash forecasts; furthermore, the Group strives to continuously ■ improve its financial credit rating.

Liquidity risk is heavily dependent on external factors. The current risk control process has enabled the Group to limit the impact of liquidity risk.

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