Consolidated financial statements

C. Accounting and valuation principles

The financial statements of all consolidated companies have been prepared applying the same accounting and valuation principles.

The consolidated financial statements have been prepared applying generally accepted principles of good accounting practice and with the aim of providing a true and fair picture of the asset, financial and earnings positions of the Group. The consolidated profit and loss account has been prepared on the basis of the nature-of-expense method and according to the principle of completeness.

The assets and liabilities of the subsidiaries consolidated in the financial statements of the Wien Energie Group have been subjected to the same valuation methods as those applied to the parent company in accordance with Section 260 of the Austrian Commercial Code, except where otherwise specified. Assets and liabilities have been recognised in accordance with the principle of single-asset valuation and according to the going-concern principle.

These consolidated financial statements comply with the principle of prudence in that only profits realised on or before the balance sheet date have been recognised. All identified risks and impending losses arising during the 2007/2008 financial year or prior financial years have been recognised.

Intangible and tangible assets are recognised at their cost of acquisition or manufacture and, where subject to depreciation or amortisation, are depreciated or amortised applying the straight-line method based on standard commercial useful lives. Low-value items with acquisition costs of up to EUR 400.00 are depreciated fully in the year of their acquisition.

The amortisation of goodwill applies the straight-line method and is based on the commercial useful life of the associated assets.

Additions in the first half of any given financial period are generally subject to full-year depreciation in the year of their acquisition, while those acquired in the second half of any given financial period are subject to half-year depreciation in the first year.

Unscheduled write downs of asset value not of a purely temporary nature are taken into account by means of impairment charges. During the period under review, there were no unscheduled write downs of tangible or intangible assets.

Own work capitalised is recognised at the cost of manufacture in addition to an appropriate proportion of manufacture-related material and manufacturing overheads plus a similar proportion of occupational pension and voluntary social costs incurred by the Company. Interest on loans raised to finance the manufacture of assets is not capitalised.

Investment grants are carried as accrued liabilities and are reversed over the useful life of the associated assets.