Appendix III Statement of the person responsible for the Annual Report 342
The selected historical consolidated fi nancial data presented below have been derived from AXA’s consolidated fi nancial statements and related notes for the years ended December 31, 2012 and 2011 in accordance with IFRS.
The ratings set forth above may be subject to revision or withdrawal at any time by the assigning rating agency. None of these ratings is an indication of the historic or potential performance of AXA‘s ordinary shares, ADSs, ADRs or debt securities and should not be relied upon for purpose of making an investment decision with respect to any of these securities.
■ changes in regulations that may affect the policy charge structure relating to commission and administrative charges and modify attractiveness to customers.
The development of Asset management activities is a key part of AXA’s fi nancial services strategy, which seeks to capitalize on existing strengths and expand its client base. This strategy is based on the belief that its asset management expertise will enable AXA to benefi t in the future from the expected growth in savings-related products in the markets where it operates.
Assets backing contracts with fi nancial risk borne by policyholders 39,439 34,496
AllianceBernstein provides diversifi ed Asset management and related services globally to a broad range of clients including: ■ diversifi ed investment management services through separately managed accounts, hedge funds, Mutual funds, and other investment vehicles to private clients (such as high net worth individuals, trusts and estates and charitable foundations); ■ management of Mutual funds sponsored by AllianceBernstein, its subsidiaries and affi liates, for individual investors; ■ management of investments on behalf of institutional investors; and
In the US, after a diffi cult sales environment for Life Insurance and Annuities in 2010, industry sales had stabilized and improved in 2011. 2012 experienced a mixed picture, with increasing sales in the Life market, offset by declining sales in the Annuity market as a number of industry participants continued to reduce benefi ts and increase charges in the
(c) Source: Platforum and Pridham reports (Q3 2012 numbers) for UK platform market.
States, the manufacturing ISM index continued to deliver an optimistic message of expansion with external demand showing strength. In Europe, the situation from one country to another was quite mixed with sharp recessions in most of the peripheral nations and better performances in France and Germany. Banking and sovereign tensions continued to dissipate in the Euro area due to injections of long term liquidity by the ECB and progress on the reform front.
The MSCI G7 Index increased by 13% and the MSCI Emerging
1.214 at the end of 2011 to CHF 1.207 at the end of 2012).
bancassurance agreement with HSBC in these countries as well as in India, Indonesia and China.
(ICBC), AXA and China Minmetals Corporation (Minmetals), announced its offi cial launch in China. It has received approval from China’s State Council and all relevant regulatory bodies.
(ii) unit-linked (-30% or €-28 million) due to the curtailment of
Switzerland APE decreased by €32 million (-8%) to €374 million mainly driven by Group Life after exceptionally strong sales of full protection schemes contracts in 2011.
Malaysia; ■ partly offset by Direct (-1%) refl ecting a 22% decrease in the
Amortization of value of purchased life business in force (179) (241) (241)
Group underlying earnings amounted to €4,251 million up 13% versus 2011. On a constant exchange rate basis, underlying earnings increased by 9% driven by Life & Savings,
(iv) Expenses increased by €426 million (or +7%) as a result of: a. €-458 million higher acquisition expenses, primarily driven by the (i) United States (€-190 million) as a result of higher
partly offset by higher Unearned Revenue Reserve amortization and (iv) Hong Kong (€-24 million) driven by new business and in-force growth, b. €+32 million lower administrative expenses mainly refl ecting various effi ciency programs net of infl ation; (v) Higher tax expenses and minority interests, up €202 million mainly driven by higher pre-tax underlying earnings and unfavorable country mix, partly offset by more favourable tax one-offs (€56 million in Japan, €47 million in the United States, €27 million in the UK and €19 million in
Banking underlying earnings amounted to €5 million. On a constant exchange rate basis, underlying earnings decreased by €28 million (-86%), mainly driven by AXA Bank Belgium mainly refl ecting lower commercial margin and new taxes and contributions to the fi nancial stability fund.
Weighted average number of shares 2,342.5 2,348.9 2,301.0 2,305.0 2,301.0 2,305.0
driven by lower sales of non unit-linked life products, partially offset by an increase in renewal premiums refl ecting strong fi rst year sales last year; ■ a sset Management Fees (7% of gross revenues) increased by 1%; ■ m utual funds revenues (1% of gross revenues) increased by 11% refl ecting higher advisory fees and volume.
Fees & revenues decreased by €42 million (-11%) to €334 million. On a constant exchange rate and on a comparable scope basis, fees & revenues increased by €13 million (+4%)
(+37%) due to strong Variable Annuity sales driven by new bank partnerships; ■ Health (30% of APE) increased by €+13 million (+9%) driven by new Simple Underwriting Whole life Medical product launched in 2012 (€+15 million) and Cancer product launched in 2011 (€+13 million), partly offset by old products with lower profi tability.
Income tax expenses decreased by €66 million to €-115 million. On a constant exchange rate basis, income tax expenses decreased by €76 million, mainly due to a decrease in corporate tax rate and a 2012 positive tax one-off
Amortization of VBI decreased by €9 million (-29%) to €-23 million further to model refi nements.
(€16 million in 2012 compared to €37 million in 2011), partly offset by lower pre-tax underlying earnings.
Gross revenues increased by €394 million (+6%) to €6,551 million (1). On a comparable basis, gross revenues increased by €236 million (+4%) positively impacted by both
As a result, the underlying cost income ratio deteriorated by 4.4 points to 95.9%.
Underlying earnings increased by €61 million (+60%) or €61 million (+60%) on a comparable basis to €162 million.
Average exchange rate: 1.00 € = Hong Kong Dollar 9.9938 10.7934 10.7934
Net realized capital gains or losses attributable to shareholders 1 2
Profi t or loss on fi nancial assets (under FV option) & derivatives (26) (120)
Adjusted earnings increased by €11 million (+6%) to €195 million. On a constant exchange rate basis, adjusted earnings increased by €6 million (+3%) due to higher realized capital gains (€+42 million) mainly on fi xed income assets, and lower impairment charges (€-26 million), principally on equities securities, partly offset by a decrease in underlying earnings.
Profi t or loss on fi nancial assets (under FV option) & derivatives 8 17
Income tax expenses increased by €46 million (+74%) to €-108 million due to higher pre-tax underlying earnings and the non-recurrence of a 2011 positive tax one-off (€6 million).
Adjusted earnings increased by €20 million to €37 million on a constant exchange rate basis, mainly driven by higher underlying earnings (€+6 million) as well as lower net realized capital losses (€+14 million).
On a constant exchange rate basis, income tax expenses increased by €21 million refl ecting higher pre-tax underlying earnings, partly offset by the non repeat of negative tax adjustments in Japan.
On a constant exchange rate and scope basis, income tax expenses increased by €1 million due to higher pre-tax underlying earnings.
Adjusted earnings increased by €12 million to €27 million. On a constant exchange rate and scope basis, adjusted earnings increased by €8 million driven by higher underlying earnings and higher net realized capital gains on equity.
Gross revenues increased by €72 million to €984 million (2) or €958 million excluding the internal transfer from AXA France of some service guarantees. On a comparable basis, gross revenues increased by €46 million (+5%) mainly driven by a strong new business performance (in particular in Travel activities) and growth of the in-force base (Travel and Lifestyle activities mainly).
Net income increased by €191 million to €-38 million. Excluding the impact of the provisions and impairments directly related to the Forced Conversion Plan in 2011, net income increased by €2 million mainly due to lower provisions partly offset by higher taxes and a lower interest margin following the discontinuation of the lending activities leading to a declining loan portfolio.
Assurance, AXA Financial, AXA United Kingdom Holdings, AXA Germany Holdings, AXA Belgian Holding, CDOs and real estate companies.
Net realized capital gains or losses attributable to shareholders (72) (224)
Underlying Earnings increased by €11 million to €-6 million mainly due to non recurring items including lower expenses and a higher investment result.
Even though the presentation of Margin Analysis is not the same as the Statement of Income (underlying basis), it is based on the same GAAP measures as used to prepare the Statement of Income in accordance with IFRS. As a result, the operating income under the Margin Analysis is equal to that reported in
Group, coordinates funding and liquidity management of these activities and, in this role, participates in fi nancing the operations of certain subsidiaries. Certain of AXA’s subsidiaries, including
shareholders represented 7.4% of the outstanding share capital and 9.0% of the voting rights at December 31, 2012.
Shareholders’ Meeting that will be held on April 30, 2013. The dividend will be payable on May 14, 2013 with an ex-dividend date of May 9, 2013.
Special report of the Statutory Auditors on regulated agreements and commitments 134 2.4 THE OFFER AND LISTING 138
Directors are nationals of countries other than France and four members are women. The proportion of women within the
Henri de Castries (58) Chairman & Chief Executive Offi cer of AXA 25, avenue Matignon – 75008 Paris – France French nationality
Denis Duverne (59) Deputy Chief Executive Offi cer of AXA in charge of Finance, Strategy and Operations 25, avenue Matignon – 75008 Paris – France French nationality
Independent director Chairman of the Audit Committee Member of the Compensation & Human Resources Committee
Stefan Lippe (57) Co-founder and Vice-Chairman of the Board of Directors of Acqupart Holding AG (Switzerland) and Acqufi n AG (Switzerland) Baarerstrasse 8 – CH 6300 Zug – Switzerland German nationality
Business Banking until 2011; ■ the appointment of Mr. Paul Hermelin as director for a fouryear term, replacing Mr. Michel Pébereau whose term of offi ce will end. Mr. Paul Hermelin’s (60 years old) candidacy was selected due to his qualities as executive acquired within a large international group, Capgemini, and his expertise in information technology which should bring AXA’s Board of
Minister Offi ce (Lionel Jospin). In 2002, she joined the Suez g roup. She then held various positions: from 2002 to 2005, at Strategy & Development; from 2005 to 2007, director of
Chief Executive Offi cer of BNP, which he privatized, and after the merger with Paribas in 2000, Chairman & Chief Executive
Committee collected, during individual interviews or through written answers to a questionnaire, the views and suggestions of each director on the three main following themes: the relationship between the Board and its Committees, the information provided to the directors and the supporting documents provided to the Board as well as the functioning of the Board meetings. The conclusions of this assessment and the principal areas identifi ed for improvement were discussed during the Board of Directors’ Meeting of February 20, 2013.
The Deputy Chief Executive Offi cer, the Group Chief Financial Offi cer, the Group Head of Audit as well as the Group Chief Risk Offi cer attend each Audit Committee meeting. The Company’s Statutory Auditors, the Group Chief Accounting Offi cer and Group General Counsel also attend the Committee’s meetings on a regular basis.
Chairman & Chief Executive Offi cer, the Deputy Chief Executive Offi cer and to the members of the Management Committee and the Executive Committee; ■ stock options and performance share/unit allocation and the 2012 AXA Miles program; ■ Organization & Talent Review (OTR) and succession plans; ■ the review of French and international regulatory context as regards compensation.
and is based on two metrics: ■ Group performance, as measured by underlying earnings per share, return on equity ( Solvency II internal model ) and customer scope index; and
Group results accounts for 40%, the proportion linked to the performance of his functional area of responsibility for 30% and the proportion linked to his individual performance for 30%.
The Committee and the Board also considered the level of individual performance of Messrs. de Castries and Duverne on the basis of predefi ned strategic objectives set at the beginning of 2012, as well as the level of performance of Mr. Duverne with respect to the performance of the areas for which he is responsible.
IFRS standards. This is a historical value at the date of grant, calculated for accounting purposes as described in Note 26.3.1 of the 2012 “Consolidated Financial Statements” included in
T otal of the other M anagement C ommittee members 2,942,071 4,083,923 - 413,134 907,314 8,346,443 2,942,071 4,015,129 - 413,134 907,314 8,277,648
Number of options exercised at 31/12/12 - - 198,162 1,273 2,186 - - - - - -
• for the AXA Group performance: net income per share; ■ the achievement of these performance targets determines the number of Units/Shares that will be acquired by the benefi ciary at the end of the acquisition period, subject to the benefi ciary still being employed by the AXA Group. The number of Units/Shares acquired may vary between 0% and 130% of the Performance Units/Shares initially granted.
January 1st, 2007 or the date of his/her fi rst appointment if after
These restrictions do not apply if an E xecutive O ffi cer complies with his/her Minimum Shareholding Requirement.
Henri de Castries – Chairman & Chief Executive Offi cer 1,277,356 -
** AXA shares locked in under the AXA employer-sponsored savings plan (Plan d’Epargne d’Entreprise du Groupe).
These commitments took effect upon the effective renunciation by Messrs. Henri de Castries and Denis Duverne of their respective employment contracts at the end of the
Treasury shares held by Company subsidiaries (directly and indirectly) (d) 16,448,654 0.69% [30,906,564] (c) [1.07%] (c) 16,489,792 0.70% [30,258,184] (c) [1.03%] (c) 17,372,038 0.75% [30,875,964] (c) [1.08%] (c)
( resolution 17) carried out p ursuant to Article L.225-209 of the French Commercial Code, (i) 750,000 AXA shares were repurchased (hedging of the grant of free shares to employees of the Group) for an average weighted gross unit price per share of €10.15, and (ii) no AXA share was sold between January 1 and December 31, 2012.
DAC), perpetual debt and certain other items, plus (ii) subordinated debt, unrealized capital gains, minority interests and certain other items.
and AXA Financial, Inc. from A to A-, assigning a stable outlook in each case.
counterparties under swap and other derivative contracts, other counterparties including brokers and dealers, commercial and investment banks, hedge funds, other investment funds, clearing agents, market exchanges, clearing houses and other fi nancial institutions. Many of our transactions with these third parties expose us to credit risk in the event of default of our counterparty.
The Group is regularly monitoring its exposure to infl ation risk, and has taken steps to mitigate it through fi nancial instruments which value and/or return is linked to the evolution of infl ation
Board (“FSB”) will make fi nal recommendations in consultation with national supervisory authorities. An initial list of G-SIIs is expected to be published by the FSB in April 2013, with annual updates thereafter. While the precise implications of being designated a G-SII on the AXA Group are not yet clear, the negative impacts could be signifi cant.
Risk Officers (CRO), implement GRM standards and guidelines within each operational entity.
For Life insurance risks and for P&C insurance risks: • Two Global Business Lines dedicated Boards, chaired by the CEO of each business Line; For Operational and Reputation risks: • Risk & Compliance Committee, co-chaired by the Group
Derivative strategies are systematically reviewed and validated by local ALM committees. In addition, there is a clear segregation of duties between those responsible for making investment decisions, executing transactions, processing trades and instructing the custodian. This segregation of duties aims in particular at avoiding confl icts of interest.
The market risks to which Life & Savings (L&S) and long-tail
The Group EV is not an estimate of AXA’s «fair value». It does not include the value of business to be sold in the future, nor does it include any value for future profi ts from existing business of other-than-life businesses (Property & Casualty, International
Downward parallel shift of 100bps in risk-free rates (5,107) (14%) 1,544 4% (3,562) (10%) (3,456) (11%) 1,597 5% (1,859) (6%)
Leverage Loan) which hold foreign-currency investments, of which €295 million are hedged through foreign exchange forwards, and the remaining €37 million mitigate the foreign exchange exposure in AXA PPP liabilities. Net exposure is nil.
Swiss Franc 2.5 9.0 2.0 7.4 In respect of Switzerland activities, in the form of derivatives
regularly monitors its exchange rate hedging strategy and will continue to review its effectiveness and the potential need to adapt it taking into account impacts on earnings, value, solvency, gearing ratio and liquidity.
In addition, AXA summarizes and analyzes its exposure to all reinsurers by factoring in all positions with reinsurers (claims, premiums, reserves, deposits, pledges and security deposits).
ALM and aspects related to legal, compliance, regulatory, reputation and accounting. For Variable Annuity products with guarantees, as well as Long Term Care products, the local governance is supplemented by a centralized review performed by GRM, which is submitted to the Management
(I n Euro million, except for number of shares and nominal value)
Change in goodwill impairment and other intangible assets impairment (d) 13 1,092
Disposal of subsidiaries and affi liated companies, net of cash ceded 225 1,369
December 20, 2010 addresses the measurement of deferred tax liabilities and deferred tax assets, which depends on whether an entity expects to recover an asset by using the asset or by selling the asset. In some cases, it is diffi cult and subjective to assess whether recovery will be through use or through sale.
January 1, 2013, with earlier application being permitted so long as each of the other standards in the package is also applied early. However, in December 2012, the European
information about rights of offset and related arrangements and are required for annual periods and interim periods beginning on or after January 1, 2013. An analysis of the new disclosures to the Group’s consolidated fi nancial statements is currently in progress.
Adjustments can be made to goodwill within twelve months of the acquisition date, if new information becomes available to complete the initial accounting. In this case, comparative information is presented as if the initial accounting had been completed from the acquisition date.
At the local entity level, foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at closing rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement, except where hedge accounting is applied as explained in paragraph 1.9.
• debt held by structured bond funds controlled and consolidated by the Group and made up of CDOs
equity (in the “other reserves” aggregate). Gains and losses relating to redemptions or refi nancing of the equity component are recognized as changes to shareholders’ equity.
AXA Vida, S. A. de Seguros (Spain) 99.82 99.82 99.82 99.82
AXA Insurance (previously Winterthur Swiss Insurance P&C) 100.00 100.00 100.00 100.00
(c) Decrease in interests rate in AXA IM Asia Holdings Private Limited following transactions with the new partner Bank of India.
International Insurance: This segment’s operations include insurance products that notably relate to AXA Corporate
Please refer to pages 159 to 165 of the “Quantitative and
This operation resulted in a goodwill of €169 million in Hong-
Equity instruments designated as at fair value through profi t or loss (a) 6,635 6,635 1.10%
Other assets designated as at fair value through profi t or loss, held by consolidated investment funds 5,413 5,413 0.95%
Debt instruments available for sale 308,760 342,815 342,815 36,295 2,240 313,472 326,306 326,306 20,749 7,915
Debt instruments available for sale 8,539 8,615 8,615 250 174 8,489 8,184 8,184 36 340
9.9.2. Change in impairment on invested assets (excluding investment in real estate properties)
CONSOLIDATED FINANCIAL STATEMENTS FULL YEAR 2012 4 4.6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
■ used by the group in the limited cases of application of mark to model valuations.
The lack of activity with very few prices representing arm’s length transactions between willing market participants restricted the possibility and the relevance to refer to the very limited number of observed deals. As a result, more valuation techniques were introduced at year end 2008 based on a maximum use of observable inputs whenever possible. Such modeled based valuation were maintained at the end of the year 2012 for assets on which there were still continued inexistence of primary markets and a lack of transactions representing fair values during the period on the secondary market.
would have no material impact neither on the net income nor the Statement of Comprehensive Income; ■ u sing alternative discount margins higher by 25% would have no material impact on the net income, and would decrease the Statement of Comprehensive Income by €21 million.
€10.2 billion). There was no signifi cant transfer in or out of the l evel 3 category (excluding assets backing contracts where the risk is born by policyholders).
Receivables arising from direct insurance and inward reinsurance operations 15,322 (354) 14,968 14,968 13,727 (381) 13,346 13,346
Net cash used in investing activities was €-3,425 million in 2011 and mainly refl ecting: ■ €-5,587 million of net cash used in purchases and sales of fi nancial invested assets; ■ €+1,306 million following the disposal of Australian and
At December 31, 2012, most of the unrealized gains on assets available for sale related to the Life & Savings segment, leading to signifi cant movements in shadow policyholders’ participation.
The change in reserves related to changes in fair value of available for sale fi nancial instruments included in shareholders’ equity relating to changes in fair value of assets as of December 31, 2012 and December 31, 2011 broke down as follows: (I n Euro million)
Reinsurers’ share in liabilities arising from insurance contracts 6,162 1,931 2,307 10,400 6,049 2,023 2,556 10,628
(b) See Note 1.13.2. – Reserves measured according to the option opened by IFRS 4.24 for selective re-measurement of reserves at current market assumptions.
Loss reserves development (prior years) (446) (162) (608) (563) (168) (731)
Impact of foreign currency fl uctuation 135 101 236 164 15 179
(a) Excluding “other policy benefi ts liabilities” (mainly mathematical annuity reserves), which totaled €4.3 billion in 2011 and €4.5 billion in 2012.
Reinsurers’ share in total claim expenses 621 200 821 474 500 974
In 2011, changes in the scope of consolidation totaled €-650 million, mainly due to the disposal of Canadian operations (€-691 million).
Reinsurers’ share in surrenders, maturities and other claims and benefi ts paid net of charges and penalties (-) (1,163) (2) (1,165) (451) (1) (452)
Change in scope of consolidation and change in accounting principles 20 - 20 (195) (247) (442)
Cumulative redundancy (defi ciency) from the initial gross claims reserves in excess of (less than) re-estimated gross claim reserves 671 497 115 817
(a ) Reserves at the end of the year / Average yearly payments over the last 3 years (excluding in respect of commutations).
(see Note 9.10 for a description of observable data) and are therefore considered as l evel 2 instruments.
Debt relating to investments under lending agreements and equivalent (c) 24,397 27,509
In 2011, adjustments of tax relating to prior years (€335 million) mainly included positive tax benefi ts following tax audit settlements in the United States Life & Saving,
■ Reserves relating to gains and losses on defi ned benefi ts pension plans 1,480 2 1,478 1,150
The change from net liability position €-462 million in 2011 to €-2,149 million in 2012 mainly came from a signifi cant increase in unrealized capital gains on fi xed income assets.
Maturity of notional amount as of December 31, 2012 (a) Notional amount Positive fair value Negative fair value Net fair value
For further detail on Asset Liability Management governance, please refer to page 158 of Section 3.3 “Quantitative and
As of December 31, 2012, the notional amount of interest rate derivative instruments totaled €278,943 million
(€230,248 million at the end of 2011). Their net fair value as of
As of December 31, 2012, the fair value of derivatives related to banking liabilities shown in Note 15 are used to hedge interest rate risk exposures in the context of ordinary banking activities, in order to achieve an appropriate interest rate spread between its interest earning assets and interest bearing liabilities. Related hedged assets are disclosed in Note 9.4.2 and liabilities in Note 15.
Macro-hedge banking activities and other derivatives 39 (165) - (126) 75 85 - 160
TOTAL - PROPERTY & CASUALTY INCLUDING INTERNATIONAL INSURANCE 32,985 9,576 1,259 146 43,967 14,514 58,480 21.4. NET REVENUES FROM BANKING ACTIVITIES
Other assets held by consolidated investment funds designated as at fair value through profi t or loss 82 - (44) - 38
Loans designated as at fair value through profi t or loss 1 - - - 1
In 2011, the main change in scope related to the sale of
Statement of fi nancial position liability at the beginning of the year (7,981) (7,840) (7,423) (6,995) (5,818) (619) (600) (529) (506) (501)
Statement of fi nancial position liability at the end of the year (8,719) (7,981) (7,840) (7,423) (6,995) (685) (619) (600) (529) (506)
The terms and conditions of AXA Financial’s share-based compensation programs generally were not impacted by the delisting and deregistration except that AXA ordinary shares generally will be delivered to participants in lieu of AXA ADRs at exercise or maturity of outstanding awards and new offerings are expected to be based on AXA ordinary shares. In addition, due to U.S. securities law restrictions, certain blackouts on option exercise are expected to occur each year when updated fi nancial information for AXA will not be available.
On March, 16, 2012, the AXA Group granted 50 free AXA
(b) Plan 4+0: grants with four-year vesting period with no subsequent restriction period.
On November 17, 2011 AllianceBernstein amended all outstanding deferred incentive compensation awards of active employees, so that employees who terminate their employment or are terminated without cause may retain their award, subject to compliance with certain agreements and restrictive covenants set forth in the applicable award agreement, including restrictions on competition, employee and client solicitation, and a clawback for failing to follow existing risk management policies. This amendment eliminated employee service requirement but did not modify delivery dates contained in the original award agreements.
Under the Incentive Compensation Program, AllianceBernstein made awards in December 2012 aggregating €113.1 million
In 2012, the Company was party to the following transactions with related parties which may be deemed to have been material to AXA or the related party in question or unusual in their nature or conditions.
& Casualty insurance business and Life & Savings insurance business in France. On December 31, 2012, the Mutuelles
Mutuelle and AXA France IARD, a P roperty & C asualty insurance subsidiary of the Company. For coinsurance, AXA France IARD
Mutuelles AXA and the Company’s insurance subsidiaries that restrict in any way their ability to compete with one another.
GIEs to which the Company was party during 2012 covered a variety of common services including services performed by the Group’s central functions (GIE AXA) for the benefi t of AXA
These transactions are generally carried out on arms-length terms and conditions with loans and other extensions of credit bearing interest at varying rates that generally refl ect prevailing market rates at the respective dates such loans were originated.
AXA has guaranteed the liabilities and obligations of AXA UK in connection with the sale of part of its Life & Savings insurance business to Resolution Ltd. This includes the potential liability of
AXA Group where service is at the request of (or for the benefi t of) the Group (e.g. joint ventures, partnerships, or specialpurpose investment Companies or funds). The potential amount of compensation relating to commitments covered by these obligations cannot be evaluated with any certainty, and the Group purchased the D&O (Directors and Offi cers)
“Subsidiary SEC Reports”). The Subsidiary SEC Reports are publicly available and Management encourages readers of the fi nancial statement to consult the Subsidiary SEC Reports for a full description of all the various litigations and related matters in which these subsidiaries are involved. Copies of the
and BRRC to comply with certain undertakings including the payment to clients of approximately $217 million to redress harm from the coding error, reorganization of the fi rms’
U.S. mortgage-backed securities. The alleged damages range between $177 million and $234 million, plus compound interest on an alleged $125 million of realized losses in the portfolio.
The prolonged economic and fi nancial uncertainties continue to give rise to specifi c considerations with respect to the determination of assumptions underlying the preparation of the fi nancial statements, in particular, the future evolution of interest rates utilized in the accounting estimates. In this context and in accordance with Article L.823-9 of the French Commercial Code requiring statutory auditors to justify their assessment, we bring to your attention the following matters: ■ Your company details in Notes 1.7.2, 4.3 and 9.9 to the consolidated fi nancial statements the valuation methods it applies to fi nancial assets.
■ Deferred tax assets and liabilities are recorded and measured using the methods described in Note 1.16.1 of the notes to the consolidated fi nancial statements.
■ Derivatives and hedging activities are recognized in accordance with the methods and procedures described in Note 1.9 to the consolidated fi nancial statements.
AXA Shareholders’ Meeting, subject to the provisions regarding double voting rights described below. On May 26, 1977, the
Under French law, shareholders have preferential subscription rights to subscribe, on a prorata basis, additional ordinary shares (and/or convertible, exchangeable or other securities giving a claim, directly or indirectly, to AXA ordinary shares).
Article L.225-37 of the French Commercial Code, the composition of the Board of Directors and the gender balance on the Board, the conditions of preparation and organization of the Board of Directors’ work (Part 1) as well as the internal control and risk management procedures implemented by the Company (Part 2). The report also presents the principles and the rules adopted by the Board of Directors in order to determine the compensation and the other benefi ts granted to the corporate offi cers (Part 3). Finally, the report indicates the Company’s Corporate Governance Code of reference and specifi es the provisions of that code, if any, that have not been applied by the Company and the reasons why they have not been applied (Part 4).
Code that are in line with the long-established corporate governance principles initiated by the Company. AXA applies the recommendations of the AFEP/MEDEF Code. Details are presented in Sections 2.1 “Directors, senior management and employees” and 2.2 “Full disclosure on executive compensation and share ownership” of this Annual Report describing corporate governance mechanisms and containing information about executives’ compensation.
Considering the already high level of these shareholding requirements imposed upon Executive Offi cers, the Board of Directors, upon recommendation of its Compensation &
In our capacity as Statutory Auditors of AXA, and in accordance with Article L.225-235 of the French Commercial Code, we hereby report to you on the report prepared by the Chairman of the Board of Directors of your Company in accordance with Article L.225-37 of the French Commercial Code for the year ended December 31, 2012.
Canadian businesses, a €1,113 million gain on carry-back receivables and €1,086 million of exceptional dividends, €826 million of which representing the cash proceeds from the disposal of shares in Taikang Life by AXA Leben AG
Investments in subsidiaries net of valuation allowances totaled €65,070 million, versus €63,453 million at year-end 2011, representing an increase of €1,617 million. Developments in 2012 included the following: ■ a €720 million increase in the capital of AXA Asia, of which €410 million representing the fi nancing for the acquisition of
Commercial Code (“Code de commerce”), disclosures related to the Company’s executive compensation appear in Part 2,
140, Frenchurch Street - LONDON EC3M 6BL - England 21, avenue Matignon - 75008 PARIS
The fi nancial statements as at December 31, 2012 are prepared and presented in accordance with the provisions of the 1999
At December 31, 2012, the remaining amount to be amortized was €38 million.
Amounted to €1,253 million, up €401 million, of which €1,023 million related to the deferred recognition of exchangerate losses in line with the principles of hedge accounting.
Movement in shareholders’ equity compared with opening balance 8, 987 1, 948
Financial debt totaled €13,354 million as opposed to €15,243 million in 2011. This represented a decrease of €1,889 million due to a €1,729 million fall in outstanding commercial paper (€801 million at December 31, 2012), which is primarily used to fi nance margin calls under collateral agreements, protecting the Company from counterparty risk on derivative instruments, and €101 million in currency effects.
(b) The corporate income tax benefit amounted to €375 million compared with a tax benefi t of €2,002 million in 2011 of which €1,113 million of tax benefi t linked to carry back receivables. It included mainly €531 million of tax receivable from members of the tax consolidation group in France and €129 million allowance for provisions for the risk of tax repayments.
Commitments to buy back shares and bonds from Group entities 42 of which fi nancial guarantees given to Group entities 12, 486 341
AXA strives to be a responsible employer, placing employee engagement at the heart of its business strategy. Achieving this has meant creating a workplace built on AXA’s values which foster diversity and equal opportunity for all, promote employee participation, encourage professional development and support employee wellbeing. For additional and more comprehensive information, including local initiatives, consult the 2012 “Social Data Report”.
Consequently, remuneration levels are set taking into account local market conditions along with company fi nancial and operational results.
Headcount of salaried workforce with fi xed-term contract 4,060 emp. 3.1% 3,937 emp.
Average length of service of salaried workforce 11.5 yrs 0.6% 11.5 yrs
■ Proportion of part-time salaried non-sales force √ 12.5 % 12.1 %
Framework Convention and Climate Change (UNFCCC), which analyzes changing rainfall patterns and their impact on vulnerable people in regards to food security and migration in 8 countries (Bangladesh, India, Guatemala, Peru, Ghana,
This means designing reliable insurance and investment solutions to meet the needs of our customers, managing risks and claims, acting as a major long-term investor, but also sharing our business expertise by helping to build a better understanding of the risks faced by individuals and Society.
For example, AXA has set up a European Works Council which, beyond social dialogue issues, is also regularly invited to give its opinion on AXA’s CR strategy. NGOs have in particular been associated with the development of certain investment policies.
AXA also has a longstanding tradition of social involvement, in particular through corporate philanthropic efforts to benefi t the community, society and culture in general. Both at Group and local levels, close ties are built up with distributor representative associations and trade bodies concerned by the sector’s activities.
AXA employees worldwide support disadvantaged people through “AXA Hearts In Action”, the Group’s employee volunteering program. In 2012, 23,043 AXA Hearts In Action volunteers around the world made their skills and time available to help underprivileged people. AXA donated more than 60,902 working hours to allow employees to volunteer.