Erste Bank JPMorgan Merrill Lynch International

28 does not exist, since Wiener Städtische AG 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 Wiener Städtische AG has no control over such
mutual funds.
The Group holds a majority of the shares of a number of Austrian non-profit housing development
companies, which were consolidated and included in the consolidated financial statements for the first
time in 2006. The companies earned profits before taxes of EUR 17,262 million in fiscal year 2006.
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:
“Neue Heimat” Gemeinnützige Wohnungs- und Siedlungsgesellschaft in Oberösterreich
GesmbH, Linz
Alpenländische Heimstätte Gemeinnützige Wohnungsbau- und Siedlungsgesellschaft m.b.H.,
Innsbruck
Erste gemeinnützige Wohnungsgesellschaft “Heimstätte Gesellschaft m.b.H.”, Vienna
The effects on the balance sheet and income statement are shown below:
Balance sheet
in EUR ’000
2006
Non-profit housing
development companies
2005
Non-profit housing
development companies
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,118,579 1,061,800
of which investment property .................... 1,076,120 1,017,631
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,751 32,985
Total assets ................................ 1,151,330 1,094,785
Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . 185,912 169,311
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,261 21,447
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 941,157 904,027
Total liabilities and shareholders’ equity ......... 1,151,330 1,094,785
Income statement
in EUR ’000
2006
Non-profit housing
development
companies
Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,521
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . �83,641
Financial result. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . �17,618
Profit before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,262
Taxes............................................................ �6
Net income ....................................................... 17,256
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 recognition and measurement of the assets and liabilities acquired, Vienna Insurance Group
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
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