Page 21 - Hoftex Annual Report 2018 EN

We will not go into each item in detail in the following. Instead, we will explain the areas with relevant risks and opportunities.
The Hoftex Group has a multi-tiered risk management system (RMS) and additional supporting control systems. Central oversight and coordination of the RMS processes is the responsibility of Group’s finance and accounting managers and is integrated into the existing planning, controlling and information systems.
The internal control system incorporates the principles, processes and measures introduced by the management to ensure
- its business activities are conducted effectively and profitably,
- the internal and external accounting is performed in a proper, reliable manner
- it complies with all legal provisions that are relevant to the company.
Beyond this, efforts began in the 2018 fiscal year to revise and update the existing internal control system in order to adapt it to current risks and economic challenges.
Letter to Shareholders Supervisory Board Report Group Management Report Consolidated Financial Statements Annexes
All of the organisational rules and measures implemented to identify and manage the risks associa- ted with business operations are included in the RMS. With regard to the Group’s financial reporting process, structures have been defined at Group level that transfer overall responsibility for the internal control and risk management system to the Management Board. All corporate units and divisions are involved in the RMS via a suitable and defined management and reporting structure. Internal guidelines outline the principles, the organisational structure and workflows as well as all processes for the accounting-related control and risk management systems. The following elements are relevant in terms of the internal control and risk management systems that have a significant impact on the accounts and the overall picture conveyed by the single-entity and consolidated annual financial statements including the Group management report:
4.1. Risk management system
- Identification of key risk and oversight areas in the financial reporting process.
- Monitoring controls designed to oversee the financial reporting process and results at the Management Board level.
- Preventive control measures in finance and accounting as well as in operational, performance- related processes that generate key data for the preparation of the single-entity and consolidated financial statements including the Group management report ensure that the relevant divisions
uphold the separation of duties and predefined approval processes.
- Measures to ensure the proper computer processing of accounting-related events and data. - Measures to monitor the accounting-related internal control and risk management system.
The following section outlines the risks and opportunities that can have a major impact on our results of operations, financial position and net assets. As a rule, reporting on risks and opportunities refers to all of the divisions of the Hoftex Group. Unless a specific company is expressly mentioned, the risks and opportunities affect all Hoftex Group subsidiaries.
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