Risk management

Deutsche Wohnen AG continuously investigates possible opportunities through which the further development and growth of the Group can be secured. In order to be able to utilise such opportunities, it may be necessary to also take risks. It is therefore of utmost importance to know, evaluate, and control all essential aspects. Only this way can risks be dealt with professionally. For this reason, Deutsche Wohnen implemented a central risk management system with the goal to identify, measure, control, and monitor every part of the Group regarding essential risks. A central element of this system is detailed reporting. This establishes a connection to the identified risk areas on the basis of relevant operative operational figures and key financial figures. It is subject to continuous monitoring and further development. We focus here especially on the operational figures for the development of the leases and the residential privatisations, the cash flow, liquidity, and the operational figures of the balance sheet.

Through an intensive communication within the management of the Group, all decision makers always have up-to-date information of all relevant developments in the company. Deviating developments or emerging risks that could be potentially dangerous to the holdings, are uncovered at an early stage and corresponding counter measures are initiated.

Information originating from risk management is documented on a quarterly basis and made available to all decision makers. The Supervisory Board receives extensive information to all relevant questions and developments of the Group for each of its meetings. In addition, the internal risk management handbook is updated once every year.

The risk management system is part of the internal control system with regard to the accounting process.

The essential characteristics of the internal control system at Deutsche Wohnen and the risk management system with regard to the (Group) accounting process can be described as follows:

  • Deutsche Wohnen is characterised by clear organisational, corporate, control and monitoring structures.
  • Group-wide harmonised planning, reporting, controlling, and early-warning systems and processes exist for the integrated analysis and control of risk factors relevant to profit and of risks potentially dangerous to the holdings.
  • The functions in all areas of the accounting process (for example financial accounting, controlling) are explicitly assigned.
  • The EDP systems used in accounting are protected against unauthorised access.
  • We use predominantly standard software in the area of the implemented financial systems.
  • Appropriate internal guidelines (among others consisting of a risk management guideline which applies Group-wide) have been set up, which are adapted as required.
  • The departments involved in the accounting process fulfil the quantitative and qualitative requirements.
  • Both completeness and correctness of accounting data are regularly reviewed on the basis of random samples and plausibilities both through manual inspections and through the software in use.
  • Essential processes relevant to accounting are subject to regular analytical reviews. The existing company-wide risk management system is continuously adjusted to current developments and constantly reviewed regarding its efficiency.
  • We consistently use the principle of dual control for all processes relevant to accounting.
  • The Supervisory Board is, among other things, involved in essential questions of accounting, risk management, and the audit assignment and its key aspects.

The internal control and risk managements system ensures with regard to the accounting process, the essential characteristics of which were described above, that corporate data is reported, processed, and acknowledged correctly in terms of the balance-sheet and thus carried over into external accounting.

The clear organisational, corporate, control, and monitoring structures as well as the adequate equipment of accounting regarding personnel and material are the foundation for the efficient work of the departments involved in the accounting process. Clear legal and internal regulations and guidelines provide for a unified and proper accounting process.

The internal control and risk management systems of Deutsche Wohnen ensure that accounting at Deutsche Wohnen AG as well as in all companies included in the Group's consolidated financial statements takes place uniformly and in line with the judicial and legal regulations as well as the internal guidelines.


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