Internal control and risk management system in the accounting process
Work is being done with a consultancy on the documentation for the annual financial statements preparation process as part of the Solvency II project that is currently under way. 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 statements 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 statements 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 Section 267(3a) in combination with Section 243a 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 Versicherungsverein holds (directly or indirectly) approximately 70% of the share capital.
4. No shares have special rights of control. See point 6 for information on the rights of the shareholder Wiener Städtische Versicherungsverein.
5. Employees who hold shares exercise their voting rights without a proxy during 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 Versicherungsverein has the right to appoint up to one third of the members of the Supervisory Board if, and so long as, it holds 50% or less of the Company’s voting shares. 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 by a nominal amount of EUR 66,443,734.10 by issuing 64,000,000 no-par value bearer or registered shares in one or more tranches on or before 28 June 2015 against cash or in-kind contributions. The rights of the shares, the exclusion of shareholder subscription rights, and the other terms of the share issue are decided by the Managing Board, subject to Supervisory Board approval. Non-voting preference shares may also be issued with rights equivalent to those of existing preference shares. The issue prices of ordinary and preference shares may differ.
b) The 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 Section 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 general meeting resolution of 29 June 2010 exercise the subscription or exchange rights they were granted. The Managing Board did not adopt any resolutions in financial year 2012 regarding the issuance of convertible bonds based on the authorisation granted on 29 June 2010.
d) The 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 did not adopt any resolutions in financial year 2012 regarding the issuance of income bonds based on this authorisation.
As at 31 December 2012, no authorisation of the Managing Board under Section 65 of the AktG (acquisition of own shares) was in effect, and the Company held none of its own shares.
8. As of 31 December 2012, 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, nor, in particular, to any 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 covering the case of a public takeover bid.