The Vienna Insurance Group risk management system is firmly anchored in the management culture of the Company and is based on a clearly defined, conservative risk policy, extensive risk expertise, a highly developed set of risk management tools, and risk-related Managing Board decisions.
The detailed risk report for Vienna Insurance Group is provided in the notes to the consolidated financial statements (see PDF, pages 130-148).
Internal control and risk management system in the accounting process
Work is being done with a consultancy on the documentation for the annual financial statement preparation process as part of the Solvency II project that is currently underway. A summary of significant controls was prepared, together with a description of the links between the process and controls and the risks identified during risk management.
The process uses the documented controls to ensure that potential reporting errors are avoided, or are identified and corrected.
The objectives of the annual financial statement process are:
Completeness: all transactions during the reporting period are recorded in full.
Existence: all reported assets and liabilities exist on the balance sheet date.
Accuracy: all transactions recorded in the financial statements apply to the same period as the financial statements.
Measurement: all asset, liability, income and expense items were recognised at fair value in accordance with accounting requirements.
Ownership: proper presentation of rights and obligations.
Presentation: all financial statement items are correctly presented and disclosed.
The financial statement process includes the aggregation of all data from accounting and upstream processes for the annual financial statements.
The Group has established an internal reporting system for the subsidiaries included in the consolidated financial statements. The processes and controls that have been implemented ensure that all necessary data are recorded and processed.
In addition, the auditors periodically assess the operation of the internal Group company control systems as part of their auditing activities. Their findings are reported to the Supervisory Board Audit Committee.
Disclosures in accordance with § 243a of the Austrian Commercial Code (UGB)
1. The Company has EUR 132,887,468.20 in share capital that is divided into 128,000,000 no-par value bearer shares with voting rights, with each share participating equally in the share capital.
2. The Managing Board is not aware of any restrictions on voting rights or the transfer of shares.
3. Wiener Städtische Wechselseitige (directly or indirectly) holds approximately 70% of the share capital.
4. No shares have special rights of control. See point 6 for information on the rights of shareholder Wiener Städtische Wechselseitige.
5. Employees who hold shares exercise their voting rights directly during the Annual General Meetings.
6. The Managing Board must have at least three and no more than seven members. The Supervisory Board has three to ten members (shareholder representatives). The shareholder Wiener Städtische Wechselseitige has the right to appoint up to one third of the members of the Supervisory Board if, and so long as, it does not hold more than 50% of the Company’s voting shares. Annual General Meeting resolutions are adopted by a simple majority, unless a different majority is compulsory by law.
7. a) The Managing Board is authorised to increase the Company’s share capital, in one or more tranches on or before 28 June 2015, by a nominal amount of EUR 66,443,734.10 by issuing 64,000,000 no-par value bearer or registered shares against cash or in-kind contributions. The rights of the shares, the exclusion of shareholder pre-emptive rights, and the other terms of the share issue are decided by the Managing Board, subject to Supervisory Board approval. Non-voting preferred shares may also be issued with rights equivalent to those of existing preferred shares. The issue prices of ordinary and preferred shares may differ.
b) The Annual General Meeting of 29 June 2010 authorised the Managing Board to issue, subject to Supervisory Board approval, one or more tranches of bearer convertible bonds with a total nominal value of up to EUR 2,000,000,000.00 on or before 28 June 2015, with or without exclusion of shareholder pre-emptive rights, and to grant the holders of convertible bonds conversion rights for up to 30,000,000 no-par value bearer shares with voting rights in accordance with the convertible bond terms set by the Managing Board.
c) The share capital has consequently been raised in accordance with § 159 (2) no. 1 of the Austrian Stock Corporation Act (AktG) by a contingent capital increase of up to EUR 31,145,500.36, through the issue of up to 30,000,000 no-par value bearer shares with voting rights. The contingent capital increase will only be implemented to the extent that holders of convertible bonds issued on the basis of the Annual General Meeting resolution of 29 June 2010 exercise the subscription or exchange rights they were granted. The Managing Board has not adopted any resolutions to date regarding the issuance of convertible bonds based on the authorisation granted on 29 June 2010.
d) The Annual General Meeting of 29 June 2010 further authorised the Managing Board to issue, subject to Supervisory Board approval, one or more tranches of bearer income bonds with a total nominal value of up to EUR 2,000,000,000.00, with or without exclusion of shareholder pre-emptive rights. The Managing Board has not adopted any resolutions to date regarding the issuance of income bonds based on this authorisation.
The Annual General Meeting of 24 April 2009 authorised the Managing Board to acquire the Company’s own no-par value bearer shares in accordance with § 65 (1) nos. 4 and 8 AktG to the maximum extent permissible by law during a period of 30 months following the date the Annual General Meeting resolution was adopted. The amount paid upon repurchase of the Company’s own shares may not be more than a maximum of 50% below, or more than a maximum of 10% above, the average unweighted stock exchange closing price on the ten stock exchange trading days preceding repurchase. The Managing Board may choose to make the purchase via the stock exchange, through a public offer or in any other legally permissible and expedient manner. The Managing Board has made no use of this authorisation. The Company held none of its own shares as at 31 December 2011.
8. As of 31 December 2011, the Company was not party to any material agreements that would come into effect, change or terminate if control of the Company were to change due to a takeover bid, in particular, no agreements that would affect participations held in insurance companies. Existing agreements that would come into effect if control of the Company were to change due to a takeover bid concern participations held in other (non-insurance) companies.
9. No compensation agreements exist between the Company and its Managing Board members, Supervisory Board members or employees for the case of a public takeover bid.