Scope of consolidation

In addition to the annual financial statement of UNIQA Versicherungen AG, the Group financial statements include the financial statements of all subsidiaries at home and abroad. Fifty affiliated companies did not form part of the consolidated Group. They were of only minor significance, even if taken together, for the presentation of a true and fair view of the Group’s assets, financial position and income. The scope of consolidation therefore contains – in addition to UNIQA Versicherungen AG – 34 domestic and 65 foreign subsidiaries in which UNIQA Versicherungen AG held the majority voting rights.

The scope of consolidation was extended in the reporting period by the following companies:

	Date of initial inclusion	Net profit for the year in € million 1)	Acquired shares %	Acquisition costs € million	Goodwill € million
UNIQA životno osiguranje a.d. (previously Zepter osiguranje a.d.), Podgorica	1.1.2007	-0.1	100	0.0	0.0
UNIQA neživotno osiguranje a.d.o., Belgrade	1.4.2007	-1.3	100.7	5.0	0.0
UNIQA Real Estate Inlandsholding GmbH, Vienna	1.7.2007	0.0	100.0	0.0	0.0
UNIQA Real Estate Dritte Beteiligungsverwaltung GmbH, Vienna	1.7.2007	–0.2	100.0	0.0	0.0
UNIQA Real Estate Vierte Beteiligungsverwaltung GmbH, Vienna	1.7.2007	0.0	100.0	0.0	0.0
UNIQA Real Estate Bulgaria EOOD, Sofia	1.7.2007	0.0	100.0	0.0	0.0
UNIQA Real Estate BH nekretnine, d.o.o.. Sarajevo	1.7.2007	0.0	100.0	0.0	0.0
IPM International Property Management Kft., Budapest	1.7.2007	0.4	100.0	13.6	0.0
UNIQA Real Estate Polska Sp.z.o.o., Warsaw	1.7.2007	0.0	100.0	0.0	0.0
UNIQA Real III, spol.s.r.o., Bratislava	1.7.2007	1.3	100.0	0.0	0.0
Austria Hotels Betriebs CZ r.o., Prague	1.10.2007	-0.4	100.0	0.0	0.0
UNIQA Real Estate d.o.o., Laibach	1.10.2007	0.0	100.0	0.0	0.0
UNIQA Real Estate BV, Hoofddorp	1.10.2007	0.1	100.0	0.0	0.0
„Hotel am Bahnhof“ Errichtungs GmbH&Co KG, Vienna	1.10.2007	0.6	100.0	0.0	0.0
UNIQA Real Estate Bulgaria Alpha EOOD, Sofia	1.10.2007	0.0	100.0	0.0	0.0
UNIQA Real Estate P. Volfova d.o.o., Laibach	1.10.2007	0.0	100.0	0.0	0.0
UNIQA neživotno osiguranje a.d., Podgorica	31.12.2007	0.0	99.9	2.3	0.0
1) Net profit for the year included in the consolidated statements.

The non-life insurance company UNIQA neživotno osiguranje a.d.o. was founded in Serbia in the 2nd quarter of 2007, and the non-life insurance company UNIQA neživotno osiguranje a.d. in Montenegro in the 4th quarter of 2007. Both companies are fully consolidated.

Additionally, 9.62% of the shares in the insurance holding company SIGAL Holding sH.A. in Albania were acquired during the reporting period. These shares are reported on the balance sheet under “Other shareholdings”.

The effects of the change to the scope of consolidation on the main asset and debt positions can be seen under no. 5 of the notes to the consolidated financial statements.

The associated companies refer to fourteen domestic and two foreign companies consolidated at equity; of these, ten companies were of minor significance and were listed at current market value.

In applying IAS 39 and in terms of the present interpretation of this statement of the IASB (SIC 12), fully controlled investment funds were included in the consolidation, insofar as their fund volumes were not of minor importance when viewed singularly and in total.

Changes during the 1st quarter of 2008

UNIQA expanded its investment in the Ukrainian company Credo-Classic from 35.5% to 61.0%, thereby taking over a majority interest in the company. A further expansion of the investment is planned over the medium term. Credo-Classic is the sixth-largest property insurance company in the Ukraine. The investment in the Albanian SIGAL Group was also expanded to 45.6% in the 1st quarter of 2008. With a market share exceeding 28%, SIGAL is the largest insurance company in Albania and also has a corresponding market presence in Macedonia and Kosovo through subsidiaries and branches.

Consolidation principles

Capital consolidation follows the acquisition method. The costs of acquiring shares in the subsidiaries are written as the proportional equity of the subsidiary, which was first revalued. The conditions at the time of acquiring the shares in the consolidated subsidiary are taken into consideration for the initial consolidation. To the extent other (non-Group) shareholders hold shares in the subsidiary’s equity at the reporting date, these are dealt with under minority interests.

If the shareholding was acquired before 1 January 1995, the differences are set off against profits carried forward in line with the applicable transitional provisions.

In compliance with IFRS 3, the goodwill is not subject to any scheduled depreciation. The value of existing goodwill resultant from the acquisition of holdings is appraised in an annual impairment test. A fall in value is written off where necessary. In doing so, the cash value of all future contributions to earnings generated by the economic units is contrasted with the deferred goodwill (including a share of the equity) from a discounted perspective by applying a risk-adequate interest rate.

The group of related companies within a country are treated as an economic unit, rather than the individual company. An impairment, therefore, only applies if depreciation is deemed necessary at this level.

Negative differences from mergers consummated after 31 March 2004 must be credited with an effect on income immediately after reappraisal.

Shares in associated companies are, as a general rule, valued according to the equity method, using the equity held by the Group. Differences are determined according to the principles of capital consolidation and the amounts are recorded under shares in associated companies. The updating of the development of the associated companies is based on the most recent financial statements available.

In establishing the value of shares in associated companies, an IFRS report is generally required. Where no IFRS reports are presented, the adjustment of the entries for these companies to the uniform Group valuation benchmarks must be dispensed with due to a lack of available documentation; however, this does not have any significant impact on the present Group consolidated financial statements.

For debt consolidation, the receivables from Group companies are set off against the payables to Group companies. As a rule, any differences have an effect on income. Group-internal results from deliveries and services are eliminated if they are of minor significance for giving a true and fair view of the Group’s assets, financial position and income. Proceeds and other income from deliveries and services within the Group are set off against the corresponding expenditure.

Presentation of balance sheet and income statement

The International Financial Reporting Standards (IFRS) allow a shortened version of the balance sheet and income statement. Summarising many individual items into units enhances the informative quality of the financial statements. Explanatory notes to these items are contained in the Group notes. Because of formatting to euro thousands, there may be rounding differences.

Segment reports

The primary segment reports depict the main business segments of property and casualty insurance, life insurance and health insurance. The consolidation principles are applied here to transactions within a segment. In addition, the main items of the income statement are also broken down by regional perspectives.

Foreign currency translation

The reporting currency of UNIQA Versicherungen AG is the euro. All annual financial statements of foreign subsidiaries which are not reported in euros are converted at the rate on the balance sheet closing date, according to the following guidelines:

• Assets, liabilities and transition of the net profit/deficit for the period at the middle rate on the balance sheet closing date
• Income statement at the annual average exchange rate
• Equity capital (except for net profit/deficit for the period) at the historic exchange rate

Resulting exchange rate differences are set off against the shareholders’ equity without affecting income.

The most important exchange rates are summarised in the following table:

€ rates on balance sheet closing date	2007	2006
Swiss franc CHF	1.6547	1.6069
Slovakian koruna SKK	33.5830	34.4350
Czech koruna CZK	26.6280	27.4850
Hungarian forint HUF	253.7300	251.7700
Croatian kuna HRK	7.3308	3.8310
Polish zloty PLN	3.5935	3.8310
Bosnia and Herzegovina convertible mark BAM	1.9517	1.9581
Romanian leu (new) RON	3.6080	3.3840
Bulgarian lev (new) BGN	1.9558	1.9558
Ukrainian hrywnja UAH	7.3633	6.6631
Serbian dinar RSD	78.7950	79.8438

Estimates

For creation of the Group consolidated financial statements according to IFRS, it is necessary to make assumptions for the future within various items. These estimates can have a considerable influence on the valuation of assets and debts on the balance sheet closing date, as well as the amount of expenses and income in the financial year. The items below carry a notinsignificant level of risk that considerable adjustments to asset or debt values may be necessary in the following year:

• Deferred acquisition costs
• Goodwill
• Shares in associated companies/investments – insofar as the valuation does not take place based on stock exchange prices or other market prices
• Technical provisions
• Pension and similar provisions