GECINA - REFERENCE DOCUMENT 2017

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RISKS Information regarding certain control activities

Financial Control The Financial Control Department makes a significant contribution to the reliability of financial and accounting information through its budgetary activities and analyses. Budget preparation and control A forecast budget is drawn up for each building, covering rent, work and property-related expenses. Assumptions are made for each building with regard to vacancy rate, turnover rate, new letting trends and re-letting periods. Budget monitoring of properties is performed on a monthly basis for rent and construction work, and quarterly for property-related expenses. Any differences between forecasts and actual figures are analyzed and justified in conjunction with the relevant operational departments. With respect to overheads, payroll expenses are checked every month, and other expenses are checked quarterly. Monitoring of activity indicators There are activity indicators for measuring the performance of the rental activity in each sector. These indicators are primarily used to monitor rentals and departure notices. The Financial Control Department, liaising with the various operational departments concerned, regularly analyzes the vacancy rate, prices and re-letting periods, as well as turnover rates.

Property profitability analysis This is assessed on the basis of market indicators and the last known appraisals. Properties are classified for each category (by asset type and region). Buildings with an abnormally low level of profitability are specifically monitored in order to improve their profitability in order to optimize their earnings or decide on their future status within the property holdings. To monitor operations more effectively, Gecina’s Financial Control is carried out at two levels: on an operational level by liaising directly and ■ continuously with each of the departments by supplying the reports required for monitoring the activity and useful for decision taking; on a centralized level, it is specifically responsible for ■ drawing up and monitoring budgets, tracking key business indicators, analyzing the profitability of properties and conducting property appraisals. It produces detailed monthly reports on each business line and performs any budgetary analysis specifically requested by the Executive Management. The Financial Control Department is currently composed of 11 people and is integrated into the Finance Department.

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