The parent company of the Wiener Städtische Group is WIENER STÄDTISCHE Versicherung AG VIENNA INSURANCE GROUP, Vienna. All companies that are under the control (“control principle”) of Wiener Städtische AG (“subsidiaries”) are fully consolidated in the consolidated financial statements. Control exists when Wiener Städtische is in a position to directly or indirectly determine the financial and operating policies of a subsidiary. Consolidation of a subsidiary starts when control is gained and ends when this influence no longer exists. The consolidated financial statements include a total of 29 domestic and 41 foreign companies. Subsidiaries that were unimportant for a fair presentation of the net worth, financial position and earnings of the Group were not included in the scope of consolidation. In total 22 domestic and 11 foreign subsidiaries were excluded for this reason.

Companies that are managed as a joint venture with other companies (“joint venture companies”) are included using the proportional consolidation method (recognition of a proportionate share of the assets, liabilities, income and expenses). This applies to those companies that were managed as a joint venture with TBIH Financial Services Group N.V., Amsterdam. Since the company is a pure holding company and operations are conducted in the associated enterprises, the latter are directly incorporated in the consolidated financial statements with a 60% share. During the reporting period, 4 companies were included in the consolidated financial statements using proportional consolidation.

Associated companies are companies over which Wiener Städtische has a significant influence, but does not exercise control. These companies are accounted for using the equity method. The consolidated financial statements include 4 domestic and 3 foreign companies accounted for at equity. In addition, 11 affiliated companies that are of less importance for the financial performance of the Group were also accounted for at equity. Due to their minor importance, in accordance with the requirements of IAS 39 “Financial instruments”, 33 companies were treated as available-for-sale securities and carried accordingly at fair value. Wiener Städtische AG owns 31.6% of the shares of Wüstenrot Versicherungs-Aktiengesellschaft, Salzburg. Significant influence within the meaning of IAS 28 does not exist, since Wiener Städtische is not in a position to receive timely IFRS financial statements from Wüstenrot Versicherungs-Aktiengesellschaft. In accordance with the requirements of IAS 39 "Financial instruments", the shares are treated as available-for-sale securities and carried accordingly at fair value and shown in the "Other associated companies" item.

Fully controlled investment funds (“special funds”) were fully consolidated in accordance with the requirements of Standards Interpretations Committee (now the International Financial Reporting Interpretations Committee) No. 12 (SIC 12). Mutual funds in which the Vienna Insurance Group holds the majority of units were not fully consolidated, since Vienna Insurance Group has no control over such mutual funds.

Based on the contractually agreed assumption of control over GIWOG Gemeinnützige Industrie-Wohnungs-AG, Leonding, and its subsidiaries, they are incorporated in the consolidated financial statements beginning in 2007. The newly consolidated companies earned profits before taxes of EUR 15.278 million in fiscal year 2007. The total profit before taxes of all consolidated non-profit housing development companies was EUR 35.253 million. Distributions of the annual profit of non-profit housing development companies is subject to statutory restrictions in Austria and there is only limited access to the assets of such companies. The companies are the following:

Since 2006

  • “Neue Heimat" Gemeinnützige Wohnungs- und Siedlungs-gesellschaft in Oberösterreich GmbH, Linz
  • Alpenländische Heimstätte Gemeinnützige Wohnungsbau- und Siedlungsgesellschaft m.b.H., Innsbruck
  • Erste gemeinnützige Wohnungsgesellschaft “Heimstätte Gesellschaft m.b.H.”, Vienna

Beginning in 2007

  • GIWOG Gemeinnützige Industrie-Wohnungs-AG, Leonding
  • GEMYSAG Gemeinnützige Mürz-Ybbs-Siedlungsanlagen-GmbH, Kapfenberg
  • “Schwarzatal” Gemeinnützige Wohnungs- und Siedlungsanlagen GmbH, Vienna.

The effects on the balance sheet and income statement of the newly consolidated companies are shown below:

Effects on the Balance Sheet and Income Statement (table)

The share of all non-commercial public housing associations in the real estate portfolio of the Vienna Insurance Group is EUR 1,784.510 million.

First-time inclusion of a subsidiary is effectuated in accordance with the purchase method of accounting by allocating the cost of acquisition to the identifiable assets and liabilities of the acquired company. The amount by which the cost of acquisition of the subsidiary exceeds the fair value of these net assets is recognised as goodwill. If the fair value of the net assets acquired exceeds the cost of acquisition (positive differences from capital consolidation), after a second critical appraisal of the marketability and valuation of the assets and liabilities acquired, Wiener Städtische recognises this excess amount as income on the income statement.

With respect to the subsidiaries, joint ventures, and associated companies acquired before 1 January 2004, the previous inclusion or valuation rules are used on the IFRS opening balance sheet. In the consolidated financial statements up until 31 December 2004, prepared in accordance with the Austrian commercial code and insurance supervisory authority regulations, asset-side differences from capital consolidation of acquired insurance companies were applied against consolidated reserves instead of being recognised as goodwill. Therefore, in accordance with IFRS 1, the revaluations related to these companies from the conversion to IFRS were also applied against consolidated shareholders’ equity.

Intercompany transactions, receivables, payables, and significant unrealized profits (intercompany profits) were eliminated. Unrealised losses are only eliminated if the unrealized loss is not the result of a reduction in value.

In 2007 the following changes occurred in the scope of consolidation:

The previously proportionally consolidated UNION Versicherungs-AG, Vienna, was fully consolidated in the first quarter since the ERGO Versicherungsgruppe renounced its intervention rights. Subsequently, the Bank Austria Creditanstalt Versicherung AG, Vienna, merged with the UNION Versicherungs-AG, Vienna, with the latter as the absorbing entity. The absorbing entity was renamed as Bank Austria Creditanstalt Versicherung AG, Vienna Following completion of the merger, the WIENER STÄDTISCHE Versicherung AG VIENNA INSURANCE GROUP has a 60.5% stake in shares of Bank Austria Creditanstalt Versicherung AG.

In the second quarter all of the shares in COUNTRY INN VIC Hotelerrichtungs- and Betriebsgesellschaft m.b.H., Vienna, were sold to a company that is not included in the consolidated financial statements; therefore, the former was deconsolidated.

In the third quarter, the Celetná 25, s.r.o., Prague, merged with Kooperativa pojišt’ovna, a.s., Prague, with the latter as the absorbing entity.

As of 31.12.2007, the SC Asigurarea Romaneasca Asirom S.A., Bucharest, is not yet included in the consolidated results because by that date the Vienna Insurance Group had not yet obtained control according to IAS 27.13. In the year 2008 the company will be included in the consolidated results of the Vienna Insurance Group.

During the reporting period from 1 January 2007 to 31 December 2007, the Vienna Insurance Group acquired common control over the following subsidiaries:

Subsidiary acquired (table)

The financial statements of the companies listed in the above-mentioned table are prepared according to IFRS. Since the capital assets of this company are carried at fair value, no adjustments were necessary to the assets and liabilities already recognised in the annual financial statements of the acquired company. It should be noted that the purchase price allocation of the newly consolidated company is still provisional and all company purchases were made with cash and cash equivalents.

Company foundet and Expansion of the scope of consolidation (table)

Information on the companies that are fully consolidated, proportionally consolidated, and included at equity in the consolidated financial statements as of 31 December 2007 is provided in Note 4 ”Participations“ in the Notes to the Consolidated Financial Statements.

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