In control statement

FMO uses an integrated and solid In Control Framework that enables taking and controlling risks and which complies with international best practices. Adequate internal control strongly supports the achievement of objectives in the following categories: (i) effectiveness and efficiency of processes; (ii) reliability of financial reporting; (iii) realization of operational and financial objectives; and (iv) compliance with laws and regulations.

The Management Board regularly considers the design and effectiveness of FMO's internal risk management and control practices (taking into account the approved risk appetite) and discusses all related significant aspects with senior management. The results of the Management Board's review of FMO's internal risk management and control systems, including significant changes and planned major improvements, and the defined risk appetite are discussed with FMO's Audit & Risk Committee, which reports these to the Supervisory Board.

Based on our review of the company's internal risk management and control systems, and cognizant of their inherent limitations described below, we have concluded that FMO is in compliance with the requirements of best practices II.1.4 and II.1.5 of the Dutch Corporate Governance Code. The Management Board makes the following statement regarding the financial reporting risks:

  • The internal risk management and control systems of FMO provide a reasonable assurance that FMO's financial reporting does not contain any errors of material importance;
  • FMO's risk management and control systems worked properly during 2011;
  • There are no indications that FMO's internal risk management and control systems will not continue to function properly in the current year.

 

Our risk management and control systems also provide us reasonable assurance about effectiveness of operations, realization of strategic and operational objectives and compliance with applicable laws and regulations.

We note that the proper design and implementation of internal risk management and control systems significantly reduces, but cannot fully eliminate, the possibility of poor judgment in decision-making, human error, control processes being deliberately circumvented by employees and others, management overriding controls and the occurrence of unforeseeable circumstances. Another limiting factor is the need to consider the relative costs and benefits of risk responses. Properly designed and implemented internal risk management and control systems will therefore provide reasonable, but not absolute, assurance that FMO will not be hindered in achieving its business objectives, or in the orderly and legitimate conduct of its business.