Wiener Stadtwerke Annual Report 2012

the risk management system. These included performing an
opportunity and risk review which, for the first time, compared
the original opportunity and risk assessments of recent years
with the outcomes which actually materialised. The findings
are now being used to further develop the risk management
system.
Similarly, the discussion and coordination of the most
important opportunities and risks is now included in the annual
business planning meeting of every Group subsidiary in order
to be able to discuss, based on a holistic view, which opportunities
and risks can be anticipated in the coming years and
which, as a result, need to be subjected to close monitoring.
A risk controller function, established at every Group subsidiary,
is responsible for ensuring compliance with the defined
risk management process. This position reports regularly and
directly to the relevant general manager.
The risk landscape of the Wiener Stadtwerke Group is broken
down into seven risk groups, with the main risks in the various
risk groups being the following:
Financial risks: Covered by a Group-wide
treasury management system
This risk class includes, in particular, those risks associated with
short and long-term investments which are mitigated uniformly
across the Group by means of a treasury management system.
This system monitors the development of these investments by
employing appropriate risk analysis concepts such as value-atrisk,
initiates risk mitigation action, and also prepares reports
for the General Management. Risks associated with US
cross-border lease transactions are kept under close observation
at all times.
Technical risks: Mitigation by means of
regular maintenance and investment programmes
Given the fact that Wiener Stadtwerke is a group with asset-
intensive operations, the absolute reliability of its technical
infrastructure is a key success factor. For this reason, close
attention is paid to compliance with high technical standards
and carefully defined maintenance and quality checks. The
reliable IT-based support of business processes is ensured by
taking steps to reach an extremely high level of IT system
availability. In addition, risks are minimised by means of
appropriate insurance policies.
Price-related risks in terms of primary energy and electricity:
Risk mitigation via hedge transactions
This category of risks covers fluctuations in the prices of oil,
gas and sourced electricity supplies. In the interests of
professional risk management, Wien Energie mitigates these
price risks by engaging in appropriate hedge transactions,
such as derivative financial instruments covering its source and
distribution markets. Forwards, futures and swaps are used for
these purposes. The development of financial instruments over
time is largely dependent on developments in the relevant
commodities markets. For more information on financial
instruments, please refer to the relevant section in the Notes
to the Consolidated Financial Statements.
32 Annual Report 2012 | Consolidated Management Report
Market risk: Risk mitigation through the development of new
products and services
Market risks include price and competition-based risks in the
area of sales. The Wiener Stadtwerke Group mitigates these
risks by developing new products and services, through a
pro-active, customer-oriented sales policy, and through a
series of partnerships and cooperations.
Environmental risks: Risk mitigation by means of
permanent market monitoring
The relevant political and legal environments are the main
areas in which Wiener Stadtwerke monitors environmental
risks. These are regularly reviewed in order to be able to
identify risks as early as possible and to react accordingly.
Organisational and personnel risks: IPD as risk mitigation
As a responsible employer, the monitoring of personnel risks is
particularly important for Wiener Stadtwerke. Therefore,
defined personnel risks are evaluated on a quarterly basis and
compared with a benchmark. Within the scope of the Group‘s
integrated personnel development (IPD) concept, various
methods are used such as, for example, employee orientation
meetings, which are intended to mitigate and/or avoid these
risks.
Internal Control System (ICS)
At Wiener Stadtwerke, ICS refers to all action and processes
implemented which are aimed at monitoring and controlling
the efficacy and efficiency of commercial operations, the
reliability of financial reporting, and compliance with the legal
requirements relevant to the Group.
Wiener Stadtwerke maintains extensive documentation of rules
and processes relevant to the ICS which have been evaluated
by a consultancy firm in recent years. In its findings report,
Ernst & young established that Wiener Stadtwerke documents
its ICS in a way which is appropriate for a company of its size
and complexity. The few areas for potential improvement
identified in the report have been the focus of ameliorative
action.
The entire ICS documentation system now serves as a basis for
ICS internal auditing activities. The aims here are to ensure
that the ICS remains effective, on the one hand, and to
continuously develop the instruments used on the basis of the
audit results, on the other.
With regard to the continuous improvement of the ICS, the
main focus in 2012 lay on the optimisation of the integration of
ICS documentation and the rules of functional separation in
the integrated business software system. In cases in which a
functional separation is not possible for various reasons,
another, compensatory, ICS process ensures that the required
security standards are complied with.
Irregularities discovered during the 2012 financial year (in
particular accusations of price rigging with suppliers at Wien
Fernwärme GmbH) were taken as an opportunity to evaluate
and optimise ICS-relevant processes within the Group.