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types are described in detail in the sections entitled “Risk types and
risk measurement” and “Risk types in detail” in the present Risk
Report. The ICS, by contrast, relates to the operational monitoring
and management of risk.
In the course of refining the ICS and RMS, the Bank plans to introduce
additional measures besides the projects carried out in 2011.
With the strengthening of the ICS and RMS which these measures
are intended to achieve, HVB will meet all statutory and regulatory
requirements in Germany.
To this end, HVB set up a Bank-wide project aimed at resolving deficiencies
highlighted in audits of earlier annual financial statements
and regulatory audits, first defining appropriate measures and action
plans. The Bank already resolved numerous deficiencies as part of
this project in 2011 and will press ahead with the project in 2012.
HVB and UniCredit S.p.A. have agreed with the regulatory authorities
that the equity funds ratio of HVB will not fall below 13%, which
exceeds the statutory minimum requirement. This agreement will
remain in place until the measures required to strengthen the ICS and
RMS as described above have been implemented. The equity funds
ratio of HVB Group at the end of December 2011 was 18.4% (2010:
19.1%).
With regard to the financial reporting process, the ICS and RMS
encompass the policies, processes and measures needed to ensure
the effectiveness of financial reporting and compliance with the
applicable legal provisions as well as risk hedging and the recording
of mapping valuation units. They ensure that internal and external
financial reporting are correct and reliable and that the assets,
liabilities and equity are classified, recognised and measured.
The purpose of the ICS and RMS in the financial reporting process is to
implement controls that ensure with an adequate degree of certainty
that the annual and consolidated financial statements together with
the Management Report and Management’s Discussion and Analysis
are prepared in compliance with regulations despite the identified
risks.
Responsibilities for the ICS and RMS in connection
with financial reporting
Responsibilities of the Management Board and
Supervisory Board
The Management Board manages the Bank under its own responsibi lity
and works with the Bank’s other governing bodies and committees
in a spirit of trust in the best interests of the Bank. The related
responsibilities include overall responsibility for preparing the annual
and consolidated financial statements, the Management Report and
Management’s Discussion and Analysis. The Management Board
states that, to the best of its knowledge and in accordance with
applicable reporting principles, the annual and consolidated financial
statements give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Group (excerpt from the Management
Board statement pursuant to Section 37y No.1 of the German
Securities Trading Act (Wertpapierhandelsgesetz – WpHG) in the
consolidated financial statements of this Annual Report).
The Management Board determines the extent and orientation of
the ICS and RMS specifically geared to the Bank under its own
responsibility, taking measures to refine the systems and adapt them
to changing conditions. It will be supported in this task in the future
by the Internal Control Business Committee (ICBC) Germany, which
was established in 2011, notably in terms of the consolidation and
monitoring of all ICS-related projects and measures. Sets of values
such as the Integrity Charter, the Code of Conduct and compliance
rules have been implemented in all UniCredit countries for many years,
and hence also in HVB Group. These values form the basis for responsible
action on the part of employees involved in the financial reporting
process. Despite all of the risk-reducing measures set up within the
framework of the ICS and RMS, even systems and processes designed
to be appropriate and functional cannot ensure absolute certainty in
the identification and management of risk.
Responsibility for the financial reporting process and, in particular, for
the preparation of the annual and consolidated financial statements
rests with the CFO organisation. In particular, the CRO is responsible
for measuring financial instruments and receivables with support from
the CFO. GBS is responsible for ensuring the availability of the IT systems
required for the financial reporting process.
HypoVereinsbank · 2011 Annual Report 49