annual financial statement 2011 - conwert Immobilien Invest SE
annual financial statement 2011 - conwert Immobilien Invest SE
annual financial statement 2011 - conwert Immobilien Invest SE
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CONWERT IMMOBILIEN INVEST <strong>SE</strong><br />
ANNUAL FINANCIAL STATEMENT <strong>2011</strong><br />
32<br />
KEY PROPERTY-RELATED RISKS<br />
DESCRIPTION OF RISK EFFECTS COUNTER-MEASURES<br />
Property valuations<br />
+ Fluctuations in property<br />
prices caused by alterations<br />
in economic parameters<br />
Sale of property<br />
+ Demand for residential<br />
and commercial properties<br />
collapses<br />
Lettings<br />
+ Lettings of apartments<br />
declines, or tenants fail to pay<br />
Development<br />
+ Volatility of costs of investing<br />
in project development<br />
+ Divergence in results<br />
reported in <strong>financial</strong> accounts<br />
+ Effects on credit rating<br />
+ Fluctuation of earnings in<br />
trading business<br />
+ Costs of vacancies<br />
+ Shortfall in rental incomes<br />
due to tenants with low<br />
credit ratings or due to falling<br />
market prices<br />
+ Cost overruns in project<br />
development<br />
+ Appraisals by independent<br />
experts<br />
+ High-quality and price-stable<br />
properties in top locations<br />
+ Doing business in markets<br />
showing fundamentally positive<br />
trends<br />
+ Ongoing analyses of locations<br />
+ No-delay responses to market<br />
conditions and trends<br />
+ Strategy of increasing value to<br />
tap value potential in properties<br />
+ Proactive asset management<br />
reducing vacancies<br />
+ Examination of creditworthiness<br />
+ High degree of diversification<br />
of property portfolio<br />
+ High-quality and price-stable<br />
properties in top locations<br />
+ Adjusting rents to market levels<br />
+ Strategy of increasing<br />
value and leading to write-ups<br />
of properties<br />
+ Spreading of cost-related<br />
risks among suppliers, service<br />
providers and others<br />
+ Agreeing upon penalties<br />
+ <strong>conwert</strong> Baudevelopment GmbH<br />
is an in-group supplier<br />
+ Supervision on an ongoing<br />
basis of budgets and stage of<br />
construction completion<br />
FINANCE<br />
This category includes all indirect and direct risks which have a significant effect on securing<br />
liquidity, securing solvency and thus the going concern of the <strong>conwert</strong> Group. It comprises<br />
securing income, securing cash and cash equivalents and hedges of interest charges on loans. In<br />
addition, it contains risks related to the timely and correct reporting to authorities and investors.<br />
<strong>conwert</strong> manages its liquidity requirements on the basis of continuously updated liquidity planning,<br />
which takes into account the probable and foreseeable cash inflows and outflows. Nevertheless,<br />
it cannot be ruled out that correlating endogenous or exogenous events in other risk categories<br />
can lead to liquidity shortages. With respect to compliance with timely reporting to authorities and<br />
investors, improvements in the systems used, their operational safety and the processes and methods<br />
applied are made on an ongoing basis. In the case of a longer-term complete failure of the<br />
systems used, delays may occur which make timely reporting impossible.
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