GECINA - REFERENCE DOCUMENT 2017

RISKS

Information regarding certain control activities

INFORMATION REGARDING CERTAIN CONTROL ACTIVITIES 6.2

Off-balance sheet commitments are monitored for each consolidated entity, centralized, then subject to a specific semi-annual review by Internal Audit. Gecina also relies on external advice, on tax issues in particular, by reviewing and monitoring the Group’s main risks and disputes. The reliability of the valuation of the real estate properties is based on a biannual process of property appraisals. The Valuations and Appraisals function is responsible for coordinating and overseeing the performance of property appraisals, performed at least twice a year by independent appraisers, in connection with the semi-annual reporting. The function reports to Financial Control. It is centralized and separate from the responsibility for property transactions (which is handled by the operational departments) in order to guarantee the reliability and objectivity of property appraisal data. Furthermore, internal valuations are carried out by each operational department concerned on the basis of the updated rental statements of the latest rentals carried out and the application of a yield rate per asset, which reflects developments on the markets concerned. This information is cross-checked using metric values and previous period appraisals. The property appraisal process is governed by a specific procedure that explicitly defines the principles for selecting appraisers, and indicates how appraisal campaigns should be conducted. Under this procedure, the Audit and Risk Committee is provided with regular progress reports on the property appraisal process. Subsequent to each campaign, this Committee holds a Meeting devoted exclusively to reviewing property appraisals and, if necessary, obtaining additional appraisals on certain buildings. Experts are selected on the basis of specifications and under the supervision of the Audit and Risk Committee. The Financial Communication Department handles the following key activities: preparation and writing of press releases: these are ■ subject to a strict writing process and a suitable level of control and approval; writing and supervision of the Reference Document and ■ of the half-year financial report. The Reference Document/half-year report approval process is centralized in the Finance Department with several levels of control; special presentations to third parties: a presentation is ■ used for investor roadshows. It can be completed with additional presentations for individual investors or shareholders. Presentations are also made to credit rating agencies (with the approval of all departments involved). CSR and corporate governance presentations for non-financial investors. Publication of the presentations is supervised by the departments (financial and operational) and by the CEO.

6.2.1

INTERNAL CONTROL PROCEDURES

FOR THE PRODUCTION AND PROCESSING OF ACCOUNTING AND FINANCIAL INFORMATION Production and processing of accounting and financial information The process for producing financial statements is mostly based on: the existence of formalized procedures related to closing ■ and consolidation of financial statements based on a specific account closing schedule; the regular update of the Group’s accounting principles ■ and methods to reflect regulatory changes and the activity of Group companies; anticipation, validation and documentation of accounting ■ and financial incidences of any significant transaction that occurs during the fiscal year; analytical reviews to validate changes in the main balance ■ sheet items and the income statement linked to changes in Group structure; in addition, the Financial Department submits every year ■ to the Audit and Risk Committee a presentation of various year-end sensitive issues, prior to the Committee’s Annual Accounts Review Meeting. The Group’s Accounts and Tax Department performs and checks all the accounting works of the Group companies through a single information system. This centralization enables better control over accounting and consolidation practices, in accordance with the principles and standards defined at Group level. The procedure and schedule of year-end closure are distributed to all parties involved and include the tasks of centralization, reconciliation and analysis that are required for the accuracy of the financial and accounting information. This process includes a hierarchical review of the closing procedures of all Group companies at each reporting date. Specific documentation has been issued to cover these procedures. In general, the reliability of accounting information is guaranteed by an organizational structure ensuring a separation of duties and control measures undertaken by the Group’s various entities. Invoicing and collection of rent and other charges are tasks performed by the operational departments in accordance with specific procedures and subject to a series of detailed controls. Major transactions are automatically recorded in the accounting information system. Furthermore, the budgetary monitoring system based on the Group’s chart of accounts and the comparative analyses developed by the Financial Control function provide further reassurance.

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GECINA - REFERENCE DOCUMENT 2017