2008 ANNUAL REPORT - Hakrinbank

| 36 |
With the changing emphasis from the financial to
more operational audits, the Internal Audit
Department (IAD) now examines the effectiveness of
the risk management processes. With this, internal
codes of conduct, risk policies and the processes that
form the control-environment of the Hakrinbank
N.V., can be evaluated.
The IAD reports to the CEO and in certain cases also
to the Audit Committee concerning the effectiveness
and efficiency of the internal control framework and
the risk governance framework.
Implementation of the Risk Based Audit shall lead to
improvement of quality of the internal control within
the Hakrinbank and tightening of the risk management.
Treasury and Securities Department
The most important tasks of this department lie in the
area of liquidity management, the buying and selling
of foreign exchange and foreign exchange swaps, as
well as stockbrokerage.
Thanks to a focussed management, in this book
year the liquidity management of the bank is still
maintained at a satisfactory level. Management was
tightened even more with the aim to optimally
allocate and deploy liquidity. In the second half of
2008 as a result of the international crisis the focus has
been on a broad diversified placement of short term
foreign exchange investments so as to minimize risks.
Further steps will be taken to optimize the liquidity
management of foreign exchange whereby the
reliability and solvency of foreign financial institutes
are always taken into account.
Because of the bearish international stock market,
returns on our modest investment portfolio were
lower than expected and had to be devalued. In the
meantime we have modified our risk profile towards a
more conservative stance. Our expectation is that this
portfolio in 2009 will maintain its value and only in
2010 can a cautious rebound be expected.
Maintaining the small band for the foreign exchange
rate by the Central Bank of Suriname and the exchange
rate movements of the Euro versus the USD in 2008
had their effects on the foreign exchange market. The
market moved above the allowable band thus
negatively influencing the competitive positioning of
the banks.
Continuous monitoring of the market, as well as an
active approach towards market participants and new
clients have borne fruit. Through this the department
objectives were for the most part realized.
Our activities on the Suriname Stock Exchange are
presented in the overview previously in this report.
We initiated in our treasury department the implementation
of the COSO Risk Management framework
that is an extension of the Risk Based Audit
project. In 2009 the further implementation of this
framework will take place whereby we will take into
account the task expansion within the department.
Administration and Management Information
(AMI) Department
Accounting
In the reporting year we devoted special attention to
increasing our operational efficiency. The measures
we took included expanding electronic processing of
interbank payment transactions. In addition we also
commenced with the installation of the salary software,
that developed by our IT department, at client
sites for which we conduct salary processing. This has
led to a further increase of efficiency.
In 2008 we commenced with the clean up of the
Automatische Giro-Opdrachten (ago) database in
ICBS.
Furthermore we commenced with the critical
screening of the administrative processes of the
department, where the emphasis is put on the
improvement and control of operational risks and
efficiency.
Controlling
In light of our corporate governance objectives in
2007 attention was given to providing better information
to our shareholders and other internal and
external stakeholders. Against this backdrop we have
published our financial statements with cash flow
statements. This provides better insight into the
liquidity position of the bank. The cash flow overview
is constructed in conformity with the IAS
(International Accounting Standards) reporting
standards with regards to Cash Flow Statements. This
choice has been made as a result of our strategy to
gradually transition towards the International
Financial Reporting Standards (IFRS). In part due to
the economic integration in the Caribbean and the
resulting need for a better comparison of financial