GECINA - REFERENCE DOCUMENT 2017

RISKS Risks

Risks

Change over the 2016-2017 period

CONTROL PROCESSES

MODERATE RISK LEVEL FINANCIAL RISKS – COUNTERPARTY RISK

Risk particularly linked to the possible default of banking counterparties on available credit lines or hedging instruments. Impacts: payment delays or defaults; ■ deterioration of the company’s cash ■ and earnings (see section 3.5.4.3 on “Counterparty risk”). Risk that the Group’s performance and objectives may be affected by interest rate increases over time (see section 3.5.4.5 “Interest rate risk”). Impacts: deterioration of the company’s cash ■ and earnings.

management via constant diversification of financial ■ resources and counterparties, giving priority to first-rate financial institutions; monitoring of a hedge management framework ■ which specifically provides for counterparty exposure and quality standards.

The risk is stable and considered to be relatively low. The Group strives to maintain a long-term strategy of diversifying its leading sources of financing to minimize any significant exposure to concentration or quality risks.

FINANCIAL RISKS – INTEREST RATE RISK

this risk is controlled by using hedging instruments ■ managed by the Financing, Treasury and Business Plan Department supported by external advisors in this area; the hedging policy is managed within a formalized ■ framework that specifically defines hedge limits, decision-making channels and authorized instruments; hedge management is reported to the Audit and ■ Risks Committee every six months. property appraisals are made twice a year by ■ independent appraisers according to recognized and consistent methods from one year to another (see section 2.3 “Valuation of property holdings” and section 3.5.3.1 “Accounting methods”); internal valuations are also undertaken by each ■ operational department on the basis of rental statements; the asset valuation process is governed by a ■ formalized procedure, the application of which is supervised by a central function, independent of the operational departments; the results of each half-year appraisal campaign are ■ presented to the Audit and Risk Committee. ASSET VALUATION RISKS

The risk was stable over the period under consideration. The Group ensures that interest rate risk is kept under control. The adopted financial strategy options are managed through strict guidelines. Risk prevention is enhanced by the improved financial strength of the Group, recognized in particular by the financial market and financial rating agencies. The control system implemented is significant and reviewed on a regular basis given the potential impact of this risk on the value of Gecina’s property portfolio. Over the period under consideration, the assessed value of Gecina’s properties increased mechanically with the Eurosic acquisition. The estimated value of the assets is satisfactory, backed by the observed disposal prices. The Group observed no estimate error that could have a negative impact on the Group’s financial statements.

Risk of asset value estimate error or non-realization of the adopted assumptions. Impacts: cost of debt; ■ compliance with financial ratios; ■ the Group’s borrowing capacity. ■

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GECINA - REFERENCE DOCUMENT 2017