Internal control system relating to the consolidated accounting process

(Report pursuant to Section 289 (4) and Section 315 (4) of the German Commercial Code (HGB))

The objective of the internal control system (ICS) for the accounting process is to ensure that financial statements are prepared in compliance with regulations. Aurubis has an internal control and risk management system in which structures and processes related to the accounting process are defined and implemented in the organization. This ensures that the Group accounting procedures are reliable and performed correctly, that business transactions are thoroughly reported in a timely manner as prescribed by law and the Articles of Association, and that legal norms and internal guidelines on accounting are observed. Amendments to laws and accounting standards are continuously analyzed to establish their relevance for the consolidated financial statements, and resulting changes are incorporated into the Group’s internal processes and systems.

Principles of the internal control system as related to accounting policies

As the parent company, Aurubis AG prepares the Aurubis Group’s consolidated financial statements. The financial reporting of the consolidated Group companies that are included in the consolidated financial statements takes place prior to this process. These Group companies prepare their financial statements locally and transfer them to the Corporate Accounting department via a defined uniform group-wide data model. The Group companies are responsible for compliance with the valid group-wide guidelines and procedures, as well as for the correct and timely execution of the accounting-relevant processes and systems.

The internal control system includes the following main principles:

  • Ensuring standardized accounting procedures in the preparation of the separate financial statements of Aurubis AG by systematically implementing control measures that are supported by manual accounting measures and other authorization and approval procedures (separation of functions, access regulations and limitations, the use of the dual control principle, guidelines on payment transactions).
  • Ensuring uniform group accounting procedures in accordance with IFRS through the application of uniform accounting regulations and policies, central audit of reporting packages, analysis of deviations from the budget, and quarterly reporting as part of centralized discussions on earnings.
  • Compiling external accounting and internal reporting by all Group companies in a uniform consolidation and reporting system.
  • Overall consolidation of the consolidated financial statements by Corporate Accounting, which is responsible for the centralized consolidation, coordination, and monitoring of the standards related to the schedule and the process.
  • Supporting the Group companies in accounting procedures through central contacts in Corporate Accounting.
  • Clarifying special technical questions and complex issues related to specific cases with an external consultant.

Internal Audit as process-independent risk observation

Internal Audit examines the reliability of the accounting practices at local and corporate level, among other things. In particular, it assesses existing internal process policies and the degree to which they are adhered to in practice. In its audits, Internal Audit provides information about risks that arise from identified deviations, as well as recommendations with regard to the adjustments to be made.