Operating risk Operating risk is the risk from direct or indirect losses arising from a wide range of reasons related to the processes, personnel, technologies and infrastructure of the Group, as well as from external factors different than credit, market and liquidity risks, such as those arising from legal and regulatory requirements and common standards of corporate behaviour. Operating risks arise from all operations of the Group. 5. Financial risk management (continued) Operating risk (continued) The objective of the Group is to manage operating risk in such a way as to balance between the avoidance of financial losses and injuring the reputation of the Group and the overall efficiency of the costs and the avoidance of the control procedures which limit initiative and creativity. The primary responsibility for developing and implementing operational risk controls is borne by the senior management within each business unit. This responsibility is supported by the development of common Group standards of operational risk management in the following fields: Requirements for appropriate allocation of duties, including independent authorization of transactions; Requirements for monitoring and reconciliation of transactions; Compliance with regulatory and other legal requirements; Control documentation and procedures; Requirements for periodic assessment of operational risks and the adequacy of the controls and procedures to deal with identified risks; Requirements for reporting of operating losses and proposed remedial action; Development of emergency Training and professional development; Ethics and business standards; Reduction of risks, including insurance when expedient; Compliance with the standards of the Group is supported by a program for periodic reviews undertaken by Internal Audit. The results of the reviews of Internal Audit are discussed with the management of the business unit to which they refer, with summaries submitted to the Audit Committee and senior management of the Group. Capital management The policy of the Management is directed at maintenance of strong capital base so as to keep owners’ trust and the market as a whole and ensure future business development conditions The aims at maintaining a balance between the higher return rate that is possible in case of lower indebtedness levels and the benefits and security of a strong capital position. In 2011 the return on equity is minus 2.4% (2010: 5.88%). Over the year no change in the Company’s capital management has occurred.
Operating risk Operating risk is the risk from direct or indirect losses arising from a wide range of reasons related to the processes, personnel, technologies and infrastructure of the Group, as well as from external factors different than credit, market and liquidity risks, such as those arising from legal and regulatory requirements and common standards of corporate behaviour. Operating risks arise from all operations of the Group. 5. Financial risk management (continued) Operating risk (continued) The objective of the Group is to manage operating risk in such a way as to balance between the avoidance of financial losses and injuring the reputation of the Group and the overall efficiency of the costs and the avoidance of the control procedures which limit initiative and creativity. The primary responsibility for developing and implementing operational risk controls is borne by the senior management within each business unit. This responsibility is supported by the development of common Group standards of operational risk management in the following fields: Requirements for appropriate allocation of duties, including independent authorization of transactions; Requirements for monitoring and reconciliation of transactions; Compliance with regulatory and other legal requirements; Control documentation and procedures; Requirements for periodic assessment of operational risks and the adequacy of the controls and procedures to deal with identified risks; Requirements for reporting of operating losses and proposed remedial action; Development of emergency Training and professional development; Ethics and business standards; Reduction of risks, including insurance when expedient; Compliance with the standards of the Group is supported by a program for periodic reviews undertaken by Internal Audit. The results of the reviews of Internal Audit are discussed with the management of the business unit to which they refer, with summaries submitted to the Audit Committee and senior management of the Group. Capital management The policy of the Management is directed at maintenance of strong capital base so as to keep owners’ trust and the market as a whole and ensure future business development conditions The aims at maintaining a balance between the higher return rate that is possible in case of lower indebtedness levels and the benefits and security of a strong capital position. In 2011 the return on equity is minus 2.4% (2010: 5.88%). Over the year no change in the Company’s capital management has occurred.
1Q21012_FS_consolidated_eng.docx