MRM - 2018 Registration document

2

Risk factors

Risks related to the business environment

enable SCOR SE to break through this threshold. However, the Company cannot guarantee that trading in its shares or shareholders acting in concert will not cause this 60% share capital threshold to be crossed.

Finally, the Company is exposed to the risk of future modifications in the SIIC regime or the interpretation of its provisions by the tax and accounting authorities, which could affect the activity, results and financial position of the Company.

Risks related to unfavourable developments in property regulations

Apart from the specific constraints mentioned above, in conducting its business the Company must comply with several restrictive regulations governing construction, town planning, operating retail space, the environment, public health and human safety. Any modification making these regulations substantially more restrictive would entail significant costs for the Company particularly in terms of bringing property into regulatory compliance, which could have a significant impact on the revenue, results and financial position of the Company. In the normal course of business, the Group may be involved in legal proceedings or be audited by tax or regulatory authorities. Each of these risks carries a financial risk and a reputational and/or image risk. To the best of the Company’s knowledge, at the date of filing this Registration Document, there was no significant litigation at Group level not reflected in the financial statements. As of the date of this Registration Document, there is no other governmental, legal, or arbitrage procedure, including Litigation and exceptional circumstances

The ELAN law on the evolution of housing, planning and digital technology passed in November 2018, includes new provisions notably with regard to planning permission, commercial development and the reduction of energy consumption which could, in certain cases, create additional constraints or obligations for the Company.

any procedure the Company knows of, that is pending or with which it is threatened, likely to have, or having had over the last twelve months, a significant impact on the financial position or profitability of the Company and/or the Group. However, M.R.M. cannot guarantee that it will remain uninvolved by any disputes in the future that are likely to have a material impact on the financial position or profitability of the Company and/or the Group.

Risks related to the business environment

2.2

Risk related to the property asset valuation

The Company’s property portfolio is appraised on 30 June and 31 December of each year. The contact details of the Group’s appraiser and the methodology used in its appraisals are set out in Section 1.2.1 “The Group’s asset profile” of this Registration Document. The appraisals carried out on 31 December take the form of a detailed report while those carried out on 30 June are an update. M.R.M. uses the fair value accounting method for its

property assets in line with the option offered by IAS 40 which consists of recording investment property at its fair value and registering changes in value in the income statement. Positive or negative changes in the valuation of assets held by the various Group companies have a direct impact on Group income. In this respect, as of 31 December 2018, the change in the fair value of properties reduced the Group’s income by €12,102 thousand.

32

M.R.M. 2018 REGISTRATION DOCUMENT