CFM INDOSUEZ Wealth Management - 2020 Annual Report

75 CFM Indosuez Wealth Management acquired an additional share in itssubsidiaryCFMIndosuezGestion, previously held by another Group entity, during the last quarter for €106,000. Inaccordancewith international accountingstandards, all the entities listed above are under the exclusive control of CFM Indosuez Wealth and are therefore fully consolidated. The accounts of all consolidated companies are kept in euros, with the exception of the New Caledonian branch, whose accounts are kept inXPFand translated into euros at the balance sheet date. NOTE 2: N/A NOTE 3: Financial Management, risk exposure and hedging pol icy CFM IndosuezWealth’sFinancedepartment is responsible for organising financial flowswithinCFM IndosuezWealth Group, defining and implementing refinancing rules, asset and liability management and the management of prudential ratios. It defines the principles and ensures the consistency of the Group's financial management. Banking risks aremanaged within the Group by the Risk and Permanent Controls Department (DRC) and the Finance Department (DF). These departments report to CFM Indosuez Wealth’s Executive Management and are respectively responsible for the control and permanent monitoring of credit and operational risks (Risk and Permanent Control) and the control and permanent monitoring of financial and liquidity risks (Finance). 3.1 CREDIT RISK The monitoring of credit and counterparty risks at CFM Indosuez Wealth Management is carried out by the Risk and Permanent Control department. Counterparty risk is focusedon theclient lendingbusiness and is part of Wealth Management business line’s risk management strategy, approved by the governing bodies of CA CIB and CA SA. CFM Indosuez Wealth Management is exposed to counterparty risk with respect to natural persons, legal entities, wealth structures whose beneficial owners are natural persons or commercial companies related to an entrepreneur client whose activity or decision-making centre is based in Monaco. Any exception to this scope of counterparties is subject to prior approval by the Indosuez Group Executive Management and its Risk department. Changes in book values and value adjustments for losses over the period Value adjustments for losses are impairment losses on assets andprovisions onoff-balance sheet commitments recognised innet income (cost of risk) in respect of credit risk. The various impairment stages (Performing assets - Bucket 1 and Bucket 2 and Impaired assets - Bucket 3) are explained in Note 1.2 “Accounting principles and methods”, in the chapter on “Financial instruments - Provisioning for credit risk”. The following tablespresent a reconciliationof theopening and closing balances of the value adjustments for losses recognised inCost of risk and the associated book values, by accounting category and type of instrument. 1.4 SCOPE OF CONSOLIDATION The consolidated financial statements of CFM Indosuez Wealth Group include: % control % interest Company Location Registered office 31/12/2020 31/12/2019 31/12/2020 31/12/2019 CFM Indosuez Wealth SAM Monaco 11, bld Albert 1 er - Monaco Parent company Parent company CFM Indosuez Conseil en Investissement SASU France 1, Place de la Liberté - 06320 Cap d’Ail 100% 100% 100% 100% CFM Indosuez Gestion SAM Monaco 11, bld Albert 1 er - Monaco 100% 100% 100% 100%