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ePaper created 2012-04-27, 18:43:33 | version 1.23.1
Financial statement preparation process Preparation of the financial statement is a further important part of the internal control system and is monitored and controlled at the level of the Group holding company. Internal regulations and guide- lines ensure the conformity of the annual financial statements and the consolidated financial statements. The decentralised preparation of Group-relevant reports by the ser- vice provider is followed by the aggregation and consolidation of the individual annual financial statements and the preparation of the in- formation for reporting in the notes and Management Report in the accounting department of the holding company, with the aid of the consolidation software “Conmezzo”. This is accompanied by manual process controls such as the principle of dual control by the employ- ees charged with ensuring the regularity of financial reporting and by the Executive Board. In addition, within the scope of his auditing ac- tivities, the auditor of the consolidated financial statements performs process-independent auditing work, also with respect to financial re- porting. Advice on limitations By virtue of the organisational, control and monitoring measures laid down in the Group, the internal control and risk management system enables the full recording, processing and evaluation of Company-relat- ed facts as well as their proper presentation in Group financial report- ing. Decisions based on personal judgement, flawed controls, criminal acts or other circumstances cannot be entirely ruled out, however, and may limit the effectiveness and reliability of the internal control and risk management system that is in use. Consequently, the application of the systems used cannot guarantee absolute security as to the correct, complete and timely recording of facts in Group financial reporting. The statements made relate solely to those subsidiaries included in the consolidated financial statements of Deutsche EuroShop for which Deutsche EuroShop is in a position, directly or indirectly, to dictate their financial and operating policies. Presentation of material individual risks Cyclical and macroeconomic risks Germany’s economic growth exceeded the average for the countries of the European Union in 2011 and the country remains the economic dynamo of Europe. Gross domestic product rose by 3% compared with the previous year, on the back of a broad-based, dynamic upturn across almost all sectors of the economy. The high level of competitiveness of German companies allowed them to continue the previous year’s export success, but private consumption and a strong labour market that is already showing signs of a short- age of skilled workers also bolstered domestic growth in the past year. Germany is and remains the main beneficiary of the continuing basic momentum of the Chinese and emerging market economies. The un- certainties hanging over the global economy remain. The expectation is that global growth will begin to lose momentum this year. The German Bundesbank expects Germany’s GDP to rise by around 0.6%. The prices of all goods and services for private consumption were on average 2.3% higher in 2011 than in the previous year. Following on from moderate rates of inflation in 2009 and 2010 (2010: +1.1%, 2009: +0.4%), 2011 witnessed the highest annual price rises since 2008. Inflation was 2% or above in every single month of 2011, pri- marily as a result of developments in the energy and commodities markets. DES Annual Report 2011 19