VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe ANNUAL

Business / Consolidation

23.6. Method of consolidation Whether a subsidiary is included in the Group’s scope of consolidation is determined by thresholds. The specification of these thresholds is subject to judgements by the Managing Board. Companies that are not considered to be material to the Group are not included in the scope of consolidation, even if the criteria of IAS 28 – Investments in Associates and Joint Ventures and/or IFRS 10 – Consolidated Financial Statements are fundamentally met. The assessment of whether a company is material to the Group is based on qualitative and quantitative criteria. It is at the Managing Board’s judgement to determine a percentage that can be used to calculate a threshold value for each key figure (e.g. shareholders’ equity) for quantitative assessment. Qualitative criteria take into account whether the business activity of a company has a significant impact on intragroup transactions. Companies with the following business areas are always included in the scope of consolidation on the basis of this qualitative assumption by the Managing Board: • real estate holding companies, but only from the date on which the company was operational, • holding companies with shares in the operational insurance business or in real estate holding companies, as well as • corporate IT service companies, provided they are active across the Group. Provided that a company has been classed as material, the processes laid down in IAS 28 – Investments in Associates and Joint Ventures and IFRS 10 – Consolidated Financial Statements are used to determine the form in which this company is consolidated in the consolidated financial statements. Subsidiaries that were of material importance at the time of first consolidation continue to be included in the scope of consolidation in subsequent periods. Circumstances could arise, however, that lead to the Managing Board using its judgement to perform a reassessment of the entire scope of consolidation. As a result, companies that were consolidated in the past but are not considered to be material based on the quantitative criteria at the time of the reassessment could be removed from the scope of consolidation. Companies that, due to their business activities, mainly generate intragroup revenues but do not generate any significant profits or losses are only included in the scope of consolidation if they operate across countr