In Control Statement
FMO uses an integrated 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:
- Effectiveness and efficiency of processes
- Reliability of financial reporting
- Realization of operational and financial objectives
- 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 significant related 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 as well as the defined risk appetite – are discussed with FMO’s Audit & Risk Committee, which then 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 2012;
- 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 of the 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 reduce, 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.
In accordance with article 5:25c sub 2 part c of the Dutch Financial Supervision Act (Wft) we state that, to the best of our knowledge:
- The financial statements give a true and fair view of the assets, liabilities, financial position and profit of FMO and its consolidated companies;
- The annual report gives a true and fair view of the position on the balance sheet date and developments during the financial year 2012 of FMO and its consolidated companies; and
- The annual report describes the material risks that FMO faces.
The Hague, March 11, 2013
Nanno Kleiterp, Chief Executive Officer
Jurgen Rigterink, Chief Investment Officer
Nico Pijl, Chief Risk and Finance Officer