Risk exposure resulting from the operation of the BK@1 software solution is sufficiently covered through the operational processes installed. No serious faults which would have led to serious damages have occurred during the first four years of production. The company`s Management Board applies a standardised project risk management methodo- logy, whereby risks are assessed monthly on a qualitative level, in order to identify any risks at an early stage and take appropriate counter-measures. Monthly project status reports are assessed by the management bodies identified within the frame- work of Aareal First Financial Solutions`s project management system. This allows for continuous monitoring, facilitating swift counteraction if necessary. A standardised procedure for the management of operational risks has been implemented. The results of regular risk inventory surveys and self- assessments regarding operational risks yielded no indication of risks or threats which are material or would jeopardise the continued existence of the business. Aareal First Financial Solutions regularly reviews the emergency scenarios it considers relevant; contingency plans are verified using BCP testing. The market risk regarding utilisation of BK 01® solutions was mitigated by developing (and con- tinuously refining) interfaces to third-party systems, such as SAP or platforms developed by other software providers to the commercial housing sector, alongside connectivity to Aareon`s systems. Deutsche Bau- und Grundstücks AG Deutsche Bau- und Grundstücks AG (BauGrund) looks back on a track record covering about eight decades in the property management sector. The business focus is on commercial services, but also on technical and infrastructure services in property management and real estate asset management; predominantly for residential property, but also for commercial and special property. BauGrund man- ages properties on behalf of the German federal government, local authorities and institutional Aareal First Financial Solutions AG Aareal First Financial Solutions AG develops inno- vative products and services for account mainte- nance and payments for the housing sector and operates the respective systems. The material risks resulting from this business consist of operational risks regarding the further development and the operation of systems, as well as an indirect market risk, which is due in particular to the close relationship with Aareal Bank, who is responsible for the distribution of banking products. The risk arising from developing software with respect to the initial and continued development of BK 01 software solutions largely relates to the potential inability to complete such developments with the required quality, within the planned time- frame, or within budgeted costs. Internally, Aareal First Financial Solutions AG counters such risks by deploying a uniform development process and regular management reporting. This is comple- mented by a uniform, high-quality licensing pro- cess established vis-à-vis development coope- ration partners; this is designed to satisfy our quality requirements on a sustained basis, and to ensure a high degree of transparency. Development partnerships that do not comply with these stringent quality requirements will not be extended, or will be terminated. As the ongoing development of the BK@1 soft- ware solution (as the successor to the ZKF tool underlying BK 01® solutions) is based on Release 6.01 that is already in production, it does not involve any material risks. Following the migration to the new BK@1 accounting system, the risk ex- posure due to the parallel operation of the legacy ZKF accounting system has been largely eliminated. Migration was successfully completed for all branches, with the exception of very few clients who were unable to execute migration on the planned date, for individual reasons. Assuming successful migration progress going forward, it will be possible to terminate ZKF operations during the first half of 2009, at which point parallel ope- ration of BK@1 and ZKF will cease. 97Aareal Bank Group ­ Annual Report 2008 | Group Management Report