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Management report

The management board of Raiffeisen-Landesbank Tirol AG ap-

plies an effective system of internal audits which ensures that the

accounting accurately reflects business circumstances. The inter-

nal control system for auditing the accounting process is designed

to ensure an acceptable degree of certainty and accuracy in the

published annual financial statements, in conformity with the stat-

utory provisions of the Austrian Banking Act (BWG), the Austrian

Commercial Code (UGB) and the CRR. For this purpose, the su-

pervisory board and management board call on the expertise and

professional skills of, in particular, the finance department. The su-

pervisory board of Raiffeisen-Landesbank Tirol AG is responsible

for monitoring the effectiveness of the internal audit systems,

while the management board ensures the existence of an appropri-

ate internal audit system that has been proven effective for the ac-

count-rendering process. Responsibilities for the individual com-

ponents and process stages in the accounting system are clearly

specified and assigned to individual departments. The internal sys-

Research and development report

Given the nature of the sector’s activities, there are no relevant re-

search and development activities to report.

Report on the key features of the internal audit

and risk management system in relation to the

accounting process

tem for auditing the account-rendering process has been imple-

mented and is documented in standing instructions. The internal

audit system is an integral component of the technical and organ-

isational processes, with specified standards such as the process

of checks being carried out twice by different people or testing de-

vices, the verification of data quality and plausibility checks, as

well as the linking of risk and compliance and ensuring that ade-

quate controls are implemented and correctly executed in relation

to specific risks. In this way, the separation of sensitive activities is

backed up by restrictions on the granting of IT access authorisa-

tion.

The regular exchange of information relevant to the auditing pro-

cess within the individual organisational units constitutes one cor-

nerstone of the internal audit system. Internal auditing regularly

and independently audits compliance with in-house regulations, in-

cluding in the accounting department. The head of internal audit-

ing reports directly to the management board.

quirements for the position risk in accordance with part 3, title IV,

chapter 2 of the EU Capital Requirements Regulation (CRR).

Directive 2014/59/EU on the determination of a framework for the

reconstruction and liquidation of financial institutions and invest-

ment companies was implemented in Austria by way of the Federal

Act on the Recovery and Resolution of Banks (BaSAG).

If the statutory liquidation financing mechanism is to be financed

by setting up an ex-ante fund as defined by section 123 of the Ba-

SAG, regular contributions must be made in accordance with sec-

tion 125 of the ESAEG. The contribution amounts are, in accord-

ance with section 126 of the BaSAG, based on the ratio of the

amount of liabilities, less the bank’s protected deposits to the ag-

gregate liabilities, less protected deposits of all institutions licensed

in Austria. These contributions must be adjusted in accordance

with the respective institution’s risk profile. No irrevocable payment

obligations were applied. Over and above this, the liquidation au-

thority may, in accordance with section 127 of the BaSAG, levy ex-

ceptional retroactive contributions. These contributions are calcu-

lated on the basis of the rules used for the ordinary contributions

as defined by section 126 of the BaSAG and may not exceed three

times the ordinary annual contribution.

Institutional protection schemes

Pursuant to article 49, paragraph 3 and article 113, paragraph 7

of the CRR, Raiffeisen-Landesbank Tirol AG has entered into a

federal-level contract with Raiffeisen Zentralbank (RZB), the oth-

er Raiffeisen regional banks and other banks in the Raiffeisen

Banking Group for the establishment of an institutional protection

scheme. A contract with identical contents has also been con-

cluded between Raiffeisen-Landesbank Tirol AG and the 73 Ty-

rolean Raiffeisen banks. Both contracts serve to safeguard ad-

equate liquidity and the solvency of the contracting parties. The

liability arrangements in these contracts mean, on the one hand,

that the banks party to them do not have to deduct positions in

other contracting partners’ equity instruments from their own

funds (article 49, paragraph 3 of the CRR). In addition, the banks

may exclude their exposures vis-à-vis the other parties to the in-

stitutional protection scheme when calculating their risk-weighted

exposure amounts (article 113, paragraph 7 of the CRR). Both in-

stitution-specific protection systems were approved by the finan-

cial supervisory authority by means of a notification.