annual financial statement 2011 - conwert Immobilien Invest SE

8 

11 

12 

14 

17 

19 

22 

26 

27 

28 

35 

41 

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51 551 

118 

119 

121 

Operating environment 

Organisation Organ Org Or Org Or Org Or Org Or Org Or Org rg rgan a and corporate structure 

Notes in accordance ac with § 243a para 1 UGB 

Development t of o business 

Development of f revenues r 

Development of earnings ea a 

Analysis of balance e sheet 

Employees 

Research and development 

develo 

Risk management t report r 

Outlook 

Post-balance sheet sh s date report 

CONSOLIDATED CONSOL SOL OL OOL 

O FINANCIAL STATEMENT 

Notes N 

Auditors’ Report 

Report of the Administrative Board 

Corporate Governance Report 

ANNUAL FINANCIAL STATEMENT 2011 

conwert is a fully integrated 

property company focusing on residential 

properties and apartmen 

buildings bui buildi bbui bu bui bu bui ldi ldings ld ldi l ngs in iin Au Aus Au Aust Austria st str st str st 

and Germany 

This focus is comp complemented om mp mpple 

le l le by 

a commercial property rty p pportfolio 

conwert owns, develops, le let llets 

et ets and 

sells (older) high-quality pr pro proper- op 

ties ties in inner-city locations in rra 

pidly growing regions. conwert’s conwerr 

business model is based on th three r 

pillars: portfolio asset manage- mana ag a 

ment, ment, the the development development and 

d sale 

of properties properties and the the property p pr p 

service segment. The 

he c ccompany’s 

core cor c e competencies ccompete 

etenci ncies ci cies i es e ccomprise 

asse 

management, portfolio develop-

CONWERT IMMOBILIEN INVEST SE 


2

CONTENT 

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8 

11 

12 

14 

17 

19 

22 

26 

27 

28 

35 

41 

42 

51 

118 

119 

121 

132 

154 

155 

156 

157 

174 

177 

Statement of all Legal Representatives 

MANAGEMENT REPORT 


Organisation and corporate structure 

Notes in accordance with § 243a para 1 UGB 

Development of business 

Development of revenues 

Development of earnings 

Analysis of balance sheet 

Employees 


Risk management report 

Outlook 

Post-balance sheet date report 

CONSOLIDATED FINANCIAL STATEMENT 

Notes 




FINANCIAL STATEMENTS 


Management report 

Balance sheet 

Income statement 

Schedule of non-current assets 

Notes 


Imprint 

CONWERT 

IMMOBILIEN INVEST SE 

conwert is a fully integrated 

property company focusing on residential 

properties and apartment 

buildings in Austria and Germany. 

This focus is complemented by 

a commercial property portfolio. 

conwert owns, develops, lets and 

sells (older) high-quality properties 

in inner-city locations in rapidly 

growing regions. conwert’s 

business model is based on three 

pillars: portfolio asset management, 

the development and sale 

of properties and the property 

service segment. The company’s 

core competencies comprise asset 

management, portfolio development 

and property services, which 

range from property management 

to sales and the privatisation of 

apartments. 

conwert relies on a transparent 

corporate culture and a clear strategy 

for the implementation of its 

objectives. A code of conduct applicable 

to all employees of the group 

lays down the ethical principles 

of entrepreneurship and governs 

the behaviour of employees when 

dealing with one another and with 

the stakeholders. 

3



4

| MANAGEMENT REPORT | CONSOLIDATED FINANCIAL STATEMENTS | FINANCIAL STATEMENTS 

INTRO 

Statement of all Legal Representatives 

STATEMENT BY THE LEGAL REPRESENTATIVES 

OF CONWERT IMMOBILIEN INVEST SE IN ACCORDANCE 

WITH § 82 (4) 3 OF THE AUSTRIAN STOCK EXCHANGE ACT 

“The Executive Directors confirm to the best of their knowledge that 

the consolidated financial statements give a true and fair view of the assets, liabilities, financial 

position and profit or loss of the group as required by the applicable accounting standards and that 

the group management report gives a true and fair view of the development and performance of 

the business and the position of the group, together with a description of the principal risks and 

uncertainties the group faces. 

the separate financial statements give a true and fair view of the assets, liabilities, financial position 

and profit or loss of the parent company as required by the applicable accounting standards 

and that the management report gives a true and fair view of the development and performance of 

the business and the position of the company, together with a description of the principal risks and 

uncertainties the company faces.” 

Vienna, 26 March 2011 

Executive Directors 

conwert Immobilien Invest SE 

Thomas Doll Franz Jürgen Kelber 

Member Member 

5



6 

_ 6,904 units 

_ Increase in total revenues by 55.9% 

_ 613.3 million € proceeds on property sales at 8.7% margin

sold 

_ EBIT increase plus 16.1% 

_ Reduction of total vacancies (3.3)% 


7



8 

OPERATING ENVIRONMENT 

THE ECONOMIC SITUATION IN EUROPE 

The uncertainty related to the European sovereign debt crisis, which was strongly influenced by 

the developments in Greece, Italy and Spain, grew worldwide in the second half of 2011. After three 

preceding interest rate moves in the year 2011, the Governing Council of the European Central 

Bank (ECB) again reduced its monetary key rate by 25 basis points on 8 December 2011. The rate 

on main refinancing operations therefore declined to 1.00% as of 14 December 2011. At the same 

time, the interest rate on the marginal lending facility was also reduced by 25 basis points to 1.75% 

and the deposit rate was decreased by the same amount to 0.25%. After this fourth and last change 

of the interest rate in the past financial year, the base rate was back to the record low of the period 

from May 2009 to April 2011 again at the end of the year 2011. 

Although the Austrian economy had been cooling off since mid-2011, because of the general 

economic conditions in Europe, the gross domestic product (GDP) increased by +3.3% for the whole 

year 2011 thanks to a strong first half of the year. 

The gross domestic product of Germany rose by 3.0% during the same period. As in Austria, growth 

in Germany was mainly concentrated on the first six months of the year 2011. Above all, strong 

domestic demand and the relatively high level of consumer spending turned out to be of great 

support to the economic development in Germany. 

THE INVESTMENT MARKET EUROPE 2011 

As a result of a particularly strong final quarter, the transaction volume of the European commercial 

property market rose to 115.0 billion € in 2011, up 4% on the previous year. In the fourth 

quarter of 2011, the transaction volume even exceeded the prior quarter by 15% and amounted 

to 32.0 billion €. This reflects the trust investors place in the European property market – 

especially in Germany, France, the United Kingdom and the Nordic countries. 

(CBRE Germany, press release 18 January 2012) 

OPERATING ENVIRONMENT AUSTRIA 

INVESTMENT MARKET 

In the Austrian investment market, demand was strong in 2011 and the price level high at the same 

time. Overall, investments in properties totalled approximately 1.7 billion €. In comparison with 

the previous year, the transaction volume rose by nearly 7%, but fell short of experts’ estimates 

due to lower investments in the commercial property segment. This was above all attributable to 

the limited credit financing for medium and larger transactions. While the commercial property 

segment was faced with persistent low demand for retail space in the financial year 2011, transactions 

in the market for apartment buildings from the late 19th century in Vienna increased. The 

trend towards increasing prices and decreasing yields is expected to continue to a moderate extent 

in this segment in 2012. The establishment of ownership in apartment buildings with a subsequent 

sale of freehold flats turned out to be particularly attractive for investors in 2011 as yields on 

rentals were low and the selling price for freehold flats was high. 

(CBRE Austria – Vienna Offices Market View 2011, EHL Immoflash today 25 January 2012) 

RESIDENTIAL PROPERTY MARKET VIENNA 

The strong demand in the residential property market in Vienna was again contrasted by 

scarce supply in 2011. This resulted in above-average price increases of up to 20% for soughtafter 

objects in good locations. Properties that were traded at a market value of 2,500 €/sqm 

two years ago, cost roughly 3,000 €/sqm in 2011. In prime locations (not including the first 

district of Vienna) the purchase price for newly built freehold flats even ranged between 3,500 

and 5,000 €/sqm. Loft extensions cost between 3,500 and 5,500 €/sqm on average, depending 

on location. In the market for used freehold flats, prices ranging from 2,000 to 3,000 €/sqm 

were realised in moderate locations and up to 4,500 €/sqm in good locations. In the first district, 

purchasing prices for freehold flats ranged between 8,000 and 16,000 €/sqm.

INTRO | 

| CONSOLIDATED FINANCIAL STATEMENTS | FINANCIAL STATEMENTS 



In contrast to the massive increase in purchase prices for freehold flats, prices for rented 

apartments remained stable in 2011 despite high investments in furnishings and refurbishing, 

which were above all carried out by institutional rental companies. In inner-city locations, rental 

prices for objects with very good facilities ranged between 10 and 13 €/sqm, in less favourable 

locations outside the Gürtel road between 7 and 9 €/sqm. 

(ÖVI, December 2011 and Verband Österreichischer Immobilientreuhänder, 16 December 2011) 

VIENNA APARTMENT BUILDING MARKET 

The demand for the classic apartment building from the late 19th century continued unabated in 

2011. According to the entries in the land register, a total of roughly 800 million € was invested in 

purchasing apartment buildings from this period in Vienna. In the whole year 2011 the number of 

transactions rose by 53.8% to 1.230 million € in comparison with the prior-year reference period. 

More than half of this volume was invested in the districts inside the Gürtel road, with the central 

business district of Vienna remaining the undisputed leader in terms of price per square meter. 

(Otto Immobilien, Dr. Eugen Otto) 

COMMERCIAL & OFFICE PROPERTIES 

The Austrian retail market remained relatively stable in 2011, roughly 230 €/sqm/month in top 

inner-city locations. The prime yield declined slightly in comparison with the previous year and 

amounted to 4.4% at the end of the year. Demand by international suppliers continued to focus on 

the “golden U” (the area comprising Kärntner Straße, Kohlmarkt and Graben) in Vienna. 

Shopping centres and retail parks also recorded a largely stable development in 2011. The average 

prime rent of shopping centres in Austria amounted to approx. 100 €/sqm/month, that of retail 

parks to approx. 12.00 €/sqm/month. While demand for good locations continued, prices in less 

favourable locations were under higher pressure and the landlords were faced with high vacancy 

rates in some parts. 

(CBRE Austria, 15 November 2011) 

Investors, above all open-end funds and insurance companies from Austria, placed their focus 

also on office properties in 2011. New office space of approx. 188.00 sqm (incl. refurbishments) 

was produced, up 14% on the year 2010 (approx. 165,000 sqm). These spaces were primarily rented 

by local companies that had relocated. Relocations of international companies were the exception 

rather than the rule. The vacancy rate rose to 6.1% at the end of the year 2011 and is expected to 

continue to increase in 2012 (2012 estimate: 6.5%). With the exception of increasing rents in the 

first district, which amounted to approx. 23.75 €/sqm/month (+3.3% in comparison with 2010), the 

average rent remained stable overall, with prices between 9.00 and 16.00 € depending on location 

and quality of the object. 

(CBRE Vienna Offices Market View 2011, EHL, fondsprofessionell 11 January 2012) 

9



10 

OPERATING ENVIRONMENT GERMANY 

RESIDENTIAL PROPERTY MARKET GERMANY 

According to property experts, the flight into tangible assets due to the persisting uncertain financial market in Europe led to 

strong demand for residential portfolios in the large metropolitan regions in 2011. The very stable residential property market in 

Germany attracted above all institutional investors from Germany and abroad. According to an analysis by CBRE, the transaction 

volume of residential developments and residential complexes exceeding 50 units increased by 44% in 2011 compared to the 

previous year and amounted to 6.1 billion €. (The indirect proceeds from the IPO of the Berlin-based property company GSW AG 

with a share of roughly 29,500 residential units were not considered in this calculation). With roughly 92,000 residential units sold 

in 194 registered transactions, the value exceeded the prior-year result by 27%. While twelve transactions comprising 1,000 or 

more residential units were carried out in 2010, 19 major transactions were registered in 2011. On the buyer side, the investment 

market was dominated by publicly listed property companies with a share of 32% of the total volume, followed by private investors 

in combination with closed-end investment vehicles with a share of roughly 13.4%. Based on the number of transactions, the 

largest share, i.e. over 62% of investments in residential properties, was accounted for by the category up to 20 million € in 2011. 

4.4 billion € or approx. 71% of the total volume came from buyers in Germany, followed by investors from the USA, at 5.7%, as 

well as Sweden and Austria with 4.2% and 3.4% respectively. On the seller side, publicly listed property companies were also the 

most active market participants and accounted for 24% of the transaction volume, followed by project developers and property 

developers, with roughly 12%. 

(CBRE Germany, press release 20 January 2012) 

BERLIN RESIDENTIAL PROPERTY MARKET 

The demand for residential properties in Berlin continued at a high level. With approximately 2.3 billion € and more than 32,300 

residential units traded, 37% of the nationally registered investment volume and 37% of all residential units were accounted for 

by the German capital. As a result of the large-volume transactions in Berlin and the project developments in the high-grade 

segment, the average purchase price per square meter reached 1,033.00 €. The yields for apartment buildings were still at a 

relatively moderate level compared to other metropolis areas. Experts estimate that in addition to the institutional investment 

segment, another 6.0 to 6.5 billion € were turned over through the sale of individual apartment buildings and freehold flats in 

2011. Yet, prices are still significantly below the level of 20 years ago despite the increase. While a freehold flat in Berlin cost some 

200,000 € in 1992, it is only 112,000 € today. Berlin thus underscores its position as the most important and most fungible local 

transaction market for residential properties in Europe. 

(Dr. Zitelmann GmbH, Berliner Zinshäuser – edition January 2012) 

In Berlin the asking rents continued to increase in the year 2011. Apartments were offered for a cold rent of 6.59 € per square 

meter and month, versus 6.11 € in the previous year. This corresponds to an increase by 7.8%. Rents rose in the entire city, but 

not to the same extent in all price classes. The cold rent for high-quality apartments saw a particularly strong increase by 9.9% 

to an average of 12.04 € per square meter and month. The rising prices had the smallest effect on low-cost housing, where rents 

were up 4.6% to 4.50 €. Overall, low-rent apartments are still widely available in Berlin, but in the central locations of the city the 

available properties are becoming scarcer. 

(GSW / CBRE HousingMarketReport, Berlin 2011) 

THE PROPERTY INVESTMENT MARKET GERMANY 2011 – OFFICE, COMMERCIAL, RETAIL 

In the investment market for commercial properties in Germany, roughly 5.8 billion € were invested in the last quarter of 2011, 

a slightly higher volume than in the previous quarter, according to the property service provider CBRE. Overall, the transaction 

volume for commercial properties thus amounted to 22.6 billion € in the past financial year, which corresponds to an 18% 

increase on the previous year. After a significant increase by 36% on the previous year, retail accounted for roughly 10.5 billion € 

or nearly 47% of the total transaction volume. In addition, a total of 8.2 billion € (36%) was invested in office properties. Logistics 

and industry properties accounted for 904.0 million € or 4% of the investment volume. Other types of use recorded a share of 

just under 8% or 1.8 billion €, including investments in hotels of 1.1 billion € (or 4.9%). Moreover, investments in development 

properties with commercial use amounted to 1.2 billion € (5.1%). Overall, individual transactions accounted for nearly 

18.2 billion € or roughly 80% of the entire transaction volume in the investment year 2011. In Germany’s five large investment 

centres (Berlin, Düsseldorf, Frankfurt, Hamburg and Munich) investments totalled 11.1 billion € in the past year, thus exceeding 

the previous year by 18%. 

(CBRE Germany, Q4 Investment Market Germany)

INTRO | 




Organisation and shares 

ORGANISATION AND CORPORATE STRUCTURE 

INCL. STATEMENT REGARDING BRANCH OFFICES 

conwert is a publicly listed, single-tier Societas Europaea (SE), which consists of three corporate 

bodies: the Administrative Board, the Executive Board and the Annual General Meeting. The 

company is represented by two Executive Directors together, two Administrative Board members 

together, one Administrative Board member together with an Executive Director or a holder of 

power of attorney, or by an Executive Director together with a holder of power of attorney. Sole 

power of representation is thus not possible. The Administrative Board consists of a minimum of 

3 and a maximum of 5 persons. 

The place of business of conwert Immobilien Invest SE is Vienna. The operating business is predominantly 

conducted through group-owned property holding companies. 

PROPERTY HOLDING COMPANIES 

In the business segment “Portfolio” conwert Immobilien Invest SE has wholly-owned subsidiaries 

in Austria, Germany, the Czech Republic, Hungary, Slovakia, Luxembourg and the Ukraine, 

which are operated as local property companies. As of 31 December 2011, the share held in ECO 

Business-Immobilien AG in Vienna amounted to 95.76%. The results of ECO were fully consolidated 

for the first time in the third quarter of 2010. 

MANAGEMENT COMPANIES 

The management of conwert’s property portfolio, as well as trading and sales are carried out by 

conwert Management. The portfolios in Germany (located in Berlin & Leipzig) and Hungary (location 

Budapest), Slovakia (location Bratislava), the Czech Republic (location Brno) and the Ukraine (location 

Kiev) are each operated by local management companies. 

RESAG GROUP 

The RESAG Group is responsible for the property service business in Austria, including property 

management, administration, brokerage, apartment privatisations and the marketing of properties. 

conwert holds 100% in RESAG Property Management GmbH and 49% in RESAG Immobilienmakler 

GmbH. In 2011 the contracts with RESAG Immobilienmakler GmbH were completely 

renegotiated so that third-party comparisons are now possible. This will result in significant 

profitability and liquidity increases for conwert in the future. The property insurance brokerage 

business, which was previously the responsibility of RESAG Insurance Broker GmbH within the 

conwert Group, was externalised in 2011 for cost and efficiency reasons, and RESAG Insurance 

Broker GmbH was merged. 

CONWERT BAUDEVELOPMENT GMBH 

All construction management activities in Austria are currently performed by conwert Baudevelopment 

GmbH. The company primarily carries out modernisation projects. In the course 

of the corporate reorganisation conwert Bauträger GmbH was over several intermediate steps 

merged with RESAG Property Management GmbH. 

ALT+KELBER GROUP 

Since October 2007, alt+kelber has been a 100% subsidiary of the conwert Group in Vienna. The 

alt+kelber Group is a service provider for residential properties in Germany and, with its subsidiaries 

in Germany, is responsible for all property services of conwert including property management, 

administration, brokerage and apartment privatisation. alt+kelber currently manages approx. 

46,596 residential and commercial units in Germany, 13,745 units for conwert and 32,851 units 

for third parties. With the service segments consulting, management and marketing, alt+kelber 

addresses not only private and municipal housing companies, but also funds and banks as well 

as national and international private and institutional investors. The service provider, which was 

established 25 years ago and is based in Heilbronn, operates 46 offices throughout Germany and 

more than 430 employees. The restructuring/simplification of the alt+kelber Group has already 

been initiated and will be completed in 2012. 

11



12 

NOTES IN ACCORDANCE WITH § 243A PARA 1 UGB 

TRANSPARENCY AND CORPORATE GOVERNANCE 

A transparent and lean company structure will also strengthen the attractiveness of the conwert 

share. This is why the Administrative Board unanimously decided to reduce the Executive Board 

to two persons – Jürgen F. Kelber as COO and Thomas Doll as CFO – after Volker Riebel resigned 

as CEO on 6 July 2011, especially since the Administrative Board is more deeply involved in the 

operating business of a single-tier SE like conwert anyway. In accordance with § 243a para. 1 (9) 

of the Austrian Commercial Code (UGB), the two Executive Directors have the right to resign in the 

case of a takeover of conwert (“change of control”), which is associated with the entitlement to a 

payment of one up to a maximum of two gross annual salaries, depending on the remaining term 

of the employment contract. For more detailed information please refer to the Corporate Governance 

Report. In addition to different service relationships with subsidiaries which are included in 

the consolidated financial statements as fully consolidated companies, the following related-party 

transactions were carried out: Thomas Rohr, Executive Director of conwert until 15 March 2011, 

received commissions for property transactions brokered by him, which were paid via one of his 

companies. Two properties in Austria are let to Österreichisches Verkehrsbüro AG, whose CEO, 

Harald Nograsek, was a member of the Administrative Board of conwert Immobilien Invest SE 

until 20 May 2011. Subsidiaries of the alt+kelber Group are tenants of office space in an object in 

Germany. More detailed information on this topic can be found in the notes. 

At TPI Tourism Properties Invest AG, Volker Riebel resigned from the supervisory board in the extraordinary 

general meeting of 19 December 2011. Johannes Meran was elected as a new member 

of the Supervisory Board with effect from the close of the general meeting on 19 December 2011. 

SHARES OF THE COMPANY AND POSITION OF ITS SHAREHOLDERS 

On the balance sheet date at 31 December 2011, the share capital of conwert Immobilien Invest 

SE amounted to 853,592,730 €. It consists of 85,359,273 no-par ordinary bearer shares with voting 

rights, each with a stake of 10.00 € in the share capital. The company’s share capital is paid in 

entirely and all shares are evidenced in an amendable collective certificate. The certificate is deposited 

with Oesterreichische Kontrollbank AG, Am Hof 4, 1010 Vienna, as the custodial bank. In 

accordance with the articles of association claims to individual share certificates are excluded. All 

of the company’s shares issued as of the balance sheet date are admitted to trading on the Vienna 

Stock Exchange under the ISIN AT0000697750. 

Every single share grants its holder the right to participate in the Annual General Meeting and to 

exercise voting rights. Each share corresponds to one vote. Therefore no shareholder possesses 

any special rights of control. 

To the knowledge of the company, approximately 76.0% of the shares were free float as of 

31 December 2011, 4.5% of the shares were in the possession of the company as a result of buying 

back treasury shares. The remaining shares of approx. 23% were held by a group of core shareholders 

with a long-term commitment, which includes Petrus Advisers Management Ltd, Petrus 

Advisers Control Investment Ltd, Albona I LP, Albona II LP, Albona III LP, Albona Ltd, Valluga LP 

and Valluga II LP. The Administrative Board and the Executive Board have no knowledge of any 

major changes in the shareholder structure after the balance sheet date. 

In accordance with § 4 paragraph 3 of the articles of association as amended on 11 October 2010, 

the Administrative Board was authorised until 8 June 2011 to increase the share capital of the 

company by a nominal 26,674,770 € by issuing up to 2,667,477 no-par bearer shares at a minimum 

issue price of 100% of the proportionate stake in the share capital per share, for a cash contribution 

or contribution in kind. This increase was possible in one or several tranches, also entirely or 

partially excluding subscription rights and also by means of indirect subscription rights in accordance 

with § 153 paragraph 6 of the Stock Corporation Act. In addition, the Administrative Board 

was authorised to determine the issue price and the conditions of the issue (authorised capital). 

However, the Administrative Board did not exercise this right.

INTRO | 



Organisation and shares 

In accordance with § 38 paragraph 2 SEG in conjunction with § 169 AktG, the Administrative Board 

is also authorised until 25 October 2012 to increase the company’s share capital by up to nominal 

400,121,590 € by issuing up to 40,012,159 no-par bearer shares at a minimum issue price of 100% 

of the proportionate stake in the share capital in one or several tranches, also by means of indirect 

subscription rights in accordance with § 153 paragraph 6 of the Stock Corporation Act, for a cash 

contribution or contribution in kind, and to determine the issue price and the conditions of the 

issue. 

Furthermore, the Administrative Board of conwert Immobilien Invest SE was authorised at the 

extraordinary shareholder meeting of 11 October 2010 to acquire treasury shares of the company 

up to a legally defined maximum of 10% of the share capital at a minimum price of 4.0 € and a 

maximum of 14.0 € per share. The buyback of treasury shares is valid during a period of 30 months 

starting on the day the resolution is adopted. At its meeting held on 14 June 2011, the Administrative 

Board adopted, based on the authorisation by the Annual General Meeting, the sixth share 

buyback programme, which is valid from 1 July 2011 to 30 June 2012. In the five preceding share 

buyback programmes, 2,894,445 conwert shares totalling 30.5 million € (not including fees) were 

repurchased in the period from 31 January 2008 to 30 June 2011, of which 177,000 shares amounting 

to a total value of 2.1 million € were settled after 30 June 2011. In the course of the sixth share 

buyback programme, a total of 967,519 shares with a value of 10.2 million € (not including fees) 

were acquired by 31 December 2011. This corresponds to approximately 1.13% of the entire share 

capital. In total, the portion of treasury shares amounted to 4.52% of the share capital (i.e. 3,861,964 

shares) at the balance sheet date on 31 December 2011 and a value of 40.6 million € (not including 

fees). Considering the whole year 2011, a total of 2,749,867 shares of a total value of 30.8 million € 

(not including fees) were bought back. This amount represents 3.22% of conwert’s share capital. 

In addition, the settlement for 11,485 units worth 0.1 million €, which had been purchased before 

31 December 2010, was carried out. 

In accordance with the Austrian Stock Exchange Act and the Publication Regulation, changes and 

transactions made within the buyback programme are published on the website www.conwert.at. 

Other statements in accordance with § 243a paragraph 1 UGB are not applicable. 

Amendments to the articles of association are subject to a resolution by the Annual General Meeting. 

13



14 

DEVELOPMENT USABLE SPACE 

BY REGION (IN 1,000 SQM) 

3,000 

2,400 

1,800 

1,200 

600 

3,000 

2,400 

1,800 

1,200 

600 

3,500 

2,800 

2,100 

1,400 

700 

955 

1,422 

1,405 

1,008 

1,624 

1,439 

23 

93 

DEVELOPMENT USABLE SPACE 

BY SEGMENT (IN 1,000 SQM) 

2,453 

1,262 

894 

2010 2011 

DEVELOPMENT OF PROPERTY ASSETS 

(IN MILL. €) 

175 

2,453 

3,238 

826 

1,221 


Austria Germany 

Other Total 

Residential Retail/Offi ces 

Other Total 

1,362 

1,304 



Other regions Total 

26 

99 

163 

2,146 

2,146 

2,829 

DEVELOPMENT OF BUSINESS 

PROPERTY PORTFOLIO AND PROPERTY ASSETS 

In 2011, conwert used the market environment in Austria and Germany, which is still positive in the 

letting and sale of residential properties sector, to further expand its business activity. An 

increase in demand by private and institutional investors in these markets allowed conwert to realise 

the highest proceeds on the sale of properties in the company’s history in the past financial year. 

Moreover, conwert bought properties only in Germany. No properties were purchased in Austria. 

At 31 December 2011, the conwert property portfolio consisted of 1,666 objects (2010: 1,811) in 

Austria, Germany and the other regions. The decline in the number of objects is attributable to 

the strong sales activities. This development is also reflected in the total usable space and the 

number of rental units. At the end of the year 2011, total usable space amounted to 2,146,097 sqm 

(2010: 2,453,049 sqm) and the number of rental units to 22,923 (2010: 25,194 rental units), with 

apartments accounting for 18,312 units (2010: 20,307) and the commercial segment for 4,093 units 

(2010: 3,550). In addition conwert had 11,213 units parking spaces (2010: 11,894) and 518 „other 

units“ (2010: 580). 

The residential share amounted to 57% of conwert’s total usable space at 31 December 2011. 

However, as conwert plans to sell ECO properties in the next 2 to 3 years, the share of residential 

space in relation to commercial space is expected to increase again in the future. 

At the end of 2011, conwert’s property assets totalled 2,829 million € (2010: 3,238 million €), down 

12.6% due to a number of property sales. In the fourth quarter of 2011, the entire portfolio of the 

conwert Group was subject to revaluation. For Germany, CBRE was commissioned. Their initial 

valuation of the German portfolio (including ECO) resulted in impairments of (48.1) million €, which 

were, however, offset by valuation gains of 58.7 million €. Consequently, the net result from the 

revaluation of the German portfolio was plus 10.6 million €. For Austria, the other countries and 

the ECO portfolio, a consortium led by Cushman & Wakefield won the bid for the valuation contract. 

The revaluation of the Austrian portfolio (including ECO) resulted in impairments of (33.9) million €, 

which were offset by valuation gains of 25.3 million €. The net gain from the revaluation of the 

Austrian portfolio amounted to (8.6) million €. In the other countries, the valuation (including ECO) 

resulted in (5.9) million € of impairments and 2.5 million € of valuation gains. The net valuation 

result equalled (3.4) million €. The net gain from the adjustment of fair value at 31 December 2011 

amounted to 7.8 million €. The revaluation result of conwert contains impairments on ECO properties 

of (18.0) million € valuation gains of 5.5 million €. Overall, negative fair value adjustments of 

(7.5) million € were recognised for properties held for sale in the past financial year. The bottom 

line is that the revaluation result for 2011 is basically unchanged (plus 0.3 million €). In the third 

quarter, the valuation result of conwert had still amounted to a (10.0), which was primarily attributable 

to the fact that a revaluation of the portfolio had to be carried out for Kapital & Wert Immobilienbesitz 

AG, as part of the ECO portfolio, due to the financial year deviating from the calendar year 

and related impairment losses had to be recognised. The capitalisable investments in properties 

(CAPEX) amounted to approx. 74.4 million € in the past financial year. conwert confirms its NAV 

2011 through the tender of the revaluation of the entire property portfolio of the conwert Group and 

at the same time records impairments on problematic properties.

INTRO | 



Development of business 

DEVELOPMENT OF RENTS AND VACANCIES 

The positive market environment led to a successful development of new rentals. The average residential 

rent in 2011 amounted to 5.37 €/sqm/month versus 5.19 €/sqm/month in the prior-year 

reference period. The average rent in the commercial sector equalled 9.32 €/sqm/month, also an 

increase in comparison with 2010 (8.25 €/sqm/month). 

Development of rents (sqm in €/m.) 2011 2010 Change (in %) 

Residential 5.37 5.19 3.5 

Retail/Offices 9.32 8.25 13.0 

Due to the successful sale of properties with high vacancy rates, strategic vacancies improved 

from 4.4% in prior-year period to 5.1% in the past financial year 2011. Actual vacancies increased 

slightly to 10.1% at the end of 2011 so that the vacancy rate amounted to 14.6% overall at the end 

of the financial year (2010: 15.1%). 47.8% of the total vacancies are attributable to only 30 objects, 

whose share in the property assets of conwert amounts to only 13.9%. Of the 30 objects with the 

highest vacancies, 13 are attributable to ECO. 

A consideration of the conwert portfolio not including that of ECO shows that a reduction of vacancies 

from 13.3% to 11.6% was realised in the past financial year. This significant improvement is 

primarily attributable to the sale of 77,902 sqm of vacant space. However, 6,976 sqm of new vacant 

space were added as a result of purchases. 

A separate consideration of the ECO portfolio shows that strategic vacancies in the property portfolio 

rose from 0% in the year 2010 to 2.0% in the year 2011 due to development measures, which 

entailed additional space that cannot be let in the short term. However, 13,973 sqm of vacant space 

were disposed of in the course of sales of properties from the ECO portfolio. Consequently, total 

vacancies at ECO rose from 23.5% to 26.7%. However, 57.4% of the ECO vacancies are attributable 

to only 5 objects, which represent only 12.3% of the property value of ECO (621.7 million €) and 

2.7% of conwert. The market value of these properties taken together totalled 76.6 million €. 

DEVELOPMENT VACANCIES 

CONWERT (in sqm/rate in %) ECO (in sqm/rate in %) 

280,000 

210,000 

140,000 

70,000 

267,000 

13.3% 

5.8% 

63,767 

6,976 

–9,936 

200,273 

11.6% 

5.0% 

2010 sale acquisition organic +/– 2011 

120,000 

90,000 

60,000 

30,000 

Total vacancies Strategic vacancies 

103,649 

23.5% 

13,973 

22,321 111,997 

26.7% 

2.0% 

2010 Verkauf Kauf Organisch +/– 2011 

15



16 

DEVELOPMENT OF PROPERTY MANAGEMENT 

(IN 1,000 SQM) 

5 

4 

3 

2 

1 

1.37 

2.77 

4.14 

1.33 

2.86 

4.19 

1.27 

3.41 

2009 2010 2011 

RESAG alt+kelber 

Total 

DEVELOPMENT MANAGED SPACE 

(IN 1,000 SQM) 

5 

4 

3 

2 

1 

1.84 

2.30 

4.14 

2.16 2.03 

4.19 

1.91 

2.76 

2009 2010 2011 

conwert Third-party assets 

Total 

4.67 

4.67 

PROPERTY SERVICES 

In Austria and Germany, the property service segment saw several changes in the financial 

year 2011, and many successes were achieved. Amongst other things, three asset management 

departments in Austria were merged into one, accomplishing significant synergies in the management 

and re-letting of properties. Moreover, the technical and facility management departments 

of the RESAG Property Management GmbH were restructured in keeping with a streamlining of 

the group structure. The cooperation with RESAG GmbH Immobilienmakler, a company in which 

conwert holds 49% and Wiener Privatbank 51%, was completely restructured in the financial year 

2011. As a result, the business relationship has now been put on a basis that allows third-party 

comparison. An internal sales department was established for the sale of entire apartment buildings 

or portfolios in order to internalise the profit of the most lucrative part of the sales and marketing 

activities. From the perspective of alt+kelber Immobilienvertrieb GmbH, the financial year 

2011 was also characterised by massive restructuring, quality improvement and cost optimisation 

measures, which were implemented successfully. The combination of individual sales companies 

of the alt+kelber Group allowed the company to reach the goal of pooling sales competence in the 

year 2011. Overall, 436,881 sqm were brokered in the reporting period with the help of the service 

companies, of which the conwert portfolio accounted for 224,139 sqm. 212.742 sqm were brokered 

for third parties. 

In total, conwert managed 63,100 units at 31 December 2011 through its service provider companies, 

after 57,618 units in the previous year. Space under management recorded an increase 

to approx. 4.67 million sqm (2010 approx. 4.19 million sqm). The sales units of the conwert Group 

sold 2011 6,904 apartments in 2011, with 115 objects accounting for 5,464 units. 80.3% of the sales 

of apartments were realised internally for the conwert Group, while business with third parties 

accounted for 19.7%. Newly brokered rental units totalled 7,811 units in 2011, in comparison with 

6,687 units in the year 2010. Here the share of external customers came to 51.0%. 

At the balance sheet date, conwert had property assets totalling 2.83 billion € (2010: 3.24 billion €), 

which were managed by all management and service companies pertaining to the group.

INTRO | 



Development of revenues 

DEVELOPMENT OF REVENUES 

REVENUES 

Due to an increase in rental income and higher proceeds on property sales, total revenues 

improved by 55.9% to 852.9 million € in 2011 (2010: 547.2 million €). This improvement is primarily 

attributable to the increase in proceeds on the sale of properties by 88.6% in the past financial year. 

Development revenues (in mill. €) Rental income Proceeds on the 

sale of properties 

REVENUES BY REGION 

Service revenues Total revenues 

2009 162.3 361.3 36.6 560.2 

2010 187.7 325.1 34.4 547.2 

2011 210.0 613.3 29.5 852.9 

in mill. € 2011 2010 Change 

Austria Germany Other Group Group Group (in %) 

regions elimination 

Rental income 82.5 122.6 6.0 (1.1) 210.0 187.7 11.9 

Proceeds on the sale of properties 309.0 292.9 11.5 0.0 613.3 325.1 88.6 

Revenues from property services 37.3 55.2 1.8 (64.8) 29.5 34.4 (14.2) 

Total revenues 428.8 470.7 19.3 (65.9) 852.9 547.2 55.9 

RENTAL INCOME 

In terms of rental income, conwert recorded an increase by 11.9% to 210.0 million € in the reporting 

period (2010: 187.7 million €). Net rental income (NRI) improved by 15.9% to 119.1 million €. 

The net initial yield amounted to 5.30% after 5.24% in the previous year. 

Rental income by region before group elimination (in %) 2011 2010 

Austria 39.3% 40.1% 

Germany 58.4% 57.4% 

Other regions 2.8% 3.0% 

Development NRI by region (in million €) 2011 2010 

Austria 46.9 41.2 

Germany 62.9 53.1 

Other region 3.4 3.9 

Group elimination 6.0 4.7 

Group 119.1 102.9 

119.1 mill. € 

Net Rental Income 

613.3 mill. € 

proceeds on the sale of properties 

55.9% 

increase in total revenues 

17



18 

PROCEEDS ON THE SALE OF PROPERTIES 

With total annual revenues of 613.3 million € in the year 2011, conwert increased the proceeds on 

the sale of properties by 88.6% in comparison with the financial year 2010, thus nearly doubling 

this figure. The focus of the sales activities was placed on the two core markets Germany and 

Austria, with proceeds on the sale of properties being nearly equal in these two countries. In 

Austria, they totalled 309.0 million € and in Germany 292.9 million € in 2011. The average profit 

margin of the objects sold in comparison with the IFRS figures shown in the balance sheet amounted 

to 8.7% in the whole financial year. The cash profit margin at 16.0% fell short of the prior-year 

figure of 27.8%. The IFRS profit for 2011 for the total portfolio of properties sold amounted to 

49.1 million € at the balance sheet date. 

Overall, conwert sold 5,542 residential and commercial units in the past financial year. The 

average selling price per sqm amounted to 1,354 €. 

Proceeds on sale by region (in %) 2011 2010 

Austria 50.4% 68.3% 

Germany 47.7% 31.5% 

Other regions 1.9% 0.2% 

Margins on property 

sales (premium on carrying 

amount in %) 

Properties held as financial 

investment 

Properties held 

for sale 

Cash margin IFRS margin 

2010 6.8 33.1 27.8 13.1 

2011 2.4 19.8 16.0 8.7 

SERVICE REVENUES 

Service revenues from third parties equalled 29.5 million € in the financial year 2011, down 14.2% 

on the figures of the prior-year reference period (2010: 34.4 million €). The decline is due to 

the consolidation of ECO, as the services rendered for ECO are now treated as internal service 

revenues in the entire year 2011. Due to the massive growth in the third-party asset management 

business, especially in Germany, the decrease in revenues in the service sector resulting from the 

consolidation of ECO was, however, nearly completely compensated. 

Development of property services (in mill. €) Revenues from 

third party services 

Internal revenues Total revenues from 

property services before 

group elimination 

2009 36.6 33.9 70.5 

2010 34.4 52.0 86.4 

2011 29.5 64.9 94.4

INTRO | 




DEVELOPMENT OF EARNINGS 

The strong proceeds on the sale of properties and higher rental income due to the reduction of 

vacancies led to a very good development of the operating earnings figures. EBITDA (earnings 

before interest, tax, depreciation and amortisation) equalled 124.8 million € at 31 December 2011. 

In comparison with the previous year (2010: 184.9 million € – adjusted for the effect from the consolidation 

of ECO), the result was up 32.5%, which is attributable to the lucky buy of ECO. But 

the operating success of conwert in 2011 is reflected in EBIT. Here, an increase by 16.1% was 

realised in comparison with the previous year. At the balance sheet date 2011, EBIT amounted 

to 119.8 million € in comparison with the prior-year figure of 103.2 million €. The guidance of 

conwert, with a target of a minimum increase in EBIT by 15%, was therefore exceeded in the past 

financial year. Earnings before tax, EBT, also rose substantially by 95.0% to 23.6 million €. 

Overview of selected earnings data 2011 2010 Change (in %) 

Rental income mill. € 210.0 187.7 11.9 

Proceeds on the sale of properties mill. € 613.3 325.1 88.7 

Service revenues mill. € 29.5 34.4 (14.2) 

Total revenues mill. € 852.9 547.2 55.9 

Property expenses mill. € (90.9) (84.9) (7.1) 

Disposals of properties mill. € (564.3) (287.4) (96.3) 

Other operating income mill. € 9.1 9.6 (5.2) 

Personnel expenses mill. € (35.3) (38.2) (7.6) 

Other operating expenses mill. € (46.7) (56.7) 17.6 

Gain from the acquisition of 

a company below market value 

mill. € 0 95.3 - 

Earnings before interest, taxes, 

depreciation and amortisation (EBITDA) 

mill. € 124.8 184.9 (32.5) 

EBITDA minus gain from the acquisition 

of a company below market value 

mill. € 124.8 89.6 39.3 

Net gains from fair value adjustments mill. € 7.8 7.8 - 

Negative fair value adjustments 

to properties held for sale 

mill. € (7.5) (5.4) (38.9) 

Depreciation, amortisation and impairment mill. € (5.3) (84.1) 93.7 

Earnings before interest and tax (EBIT) mill. € 119.8 103.2 16.1 

Financial results mill. € (96.2) (91.1) (5.6) 

Earnings before tax (EBT) mill. € 23.6 12.1 95.0 

Group profit mill. € 18.5 25.7 (28.0) 

Group profit after minority interests mill. € 23.3 23.8 (2.1) 

Funds from Operations (FFO) 1) mill. € 81.3 53.5 52.0 

Cash Profit 2) mill. € 73.8 44.1 67.3 

Net Rental Income (NRI) mill. € 119.1 102.9 15.7 

Earnings per share mill. € 0.28 0.29 (3.4) 

Adjusted earnings per share 3) mill. € 0.28 0.29 (3.4) 

FFO per share mill. € 0.98 0.65 50.8 

1) FFO: Earnings before tax (EBT) – net gain/loss from fair value adjustments + difference between cash gains on sale to IFRS gains on sale + 

depreciation + non-cash parts of fi nancial result and other costs 

2) Cash Profi t: FFO – actual income taxes paid 

3) Earnings per share after the deduction of actual income taxes paid 

DEVELOPMENT OF EBIT (IN MILL. €) 

120 

100 

80 

60 

40 

20 

DEVELOPMENT OF EBITDA (IN MILL. €) 

200 

160 

120 

80 

40 

94.9 

105.0 

103.2 

184.9 

119.8 

2009 2010 2011 

124.8 

2009 2010 2011 

19



20 

Fair value adjustments 2011 by segment/region 

REVALUATION RESULT 

The revaluation result of conwert’s investment portfolio amounted to 7.8 million € at the balance 

sheet date. This is the result of the revaluations carried out by independent experts in accordance 

with IAS 40 in late 2011. In the comparable period of the previous year, the revaluation result of the 

investment portfolio was at exactly the same level. 

The fair value, which is determined by independent experts, must always be taken into consideration 

for investment properties in accordance with IAS 40. Increases and decreases therefore have an 

effect on the balance sheet and income statement and can be seen in the net gains or losses from 

fair value adjustments. The lower of cost or market principle is applicable to properties available 

for sale, which stipulates that the lower of acquisition cost or fair value has to be applied. This 

means that revaluation gains higher than the acquisition costs are not possible. However, value 

impairments fully impact the balance sheet. The impairment of the portfolio of properties held for 

sale amounted to 7.5 million € in the past financial year (2010: 5.4 million €). 


Other 

regions 2011 

Net gain/(loss) from fair value adjustments mill. € (1.8) 11.3 (3.4) 7.81 1) 

Investment properties mill. € 1,053.2 1,219.5 151.4 2,424.2 1) 

Impairment of properties held for sale mill. € (6.8) (0.7) 0 (7.5) 1) 

Total valuation adjustments mill. € (8.6) 10.6 (3.4) 0.3 1) 

Property assets at 31/12/2011 mill. € 1,361.7 1,304.0 162.9 2,828.6 1) 

Property assets per sqm of residential space € 1,606.1 984.7 1.041.7 1,148.7 1) 

Property assets per sqm of commercial space € 1,680.1 1,362.2 2,108.1 1,603.28 1) 

1) after consolidation 

DEPRECIATION AND AMORTISATION 

Depreciation and amortisation decreased significantly from 69.2 million € in 2010 to 5.3 million € 

in 2011. This development is primarily due to amortisation of financial assets. A detailed presentation 

of impairments can be found under note 8.2. Intangible Assets. 

PERSONNEL EXPENSES 

Personnel expenses declined from 38.2 million € in the financial year 2010 to 35.3 million € in 

2011. This reduction resulted from cost savings due to leaner management and the restructuring 

of facility management, asset management, sales and marketing in Germany and Austria as well 

as of conwert Holding. 

OTHER OPERATING EXPENSES 

Other operating expenses amounted to 46.7 million € in 2011, compared with 56.7 million € 

in 2010. They include as the main items brokerage commissions and sub-commissions for the 

brokerage and marketing of properties of 3.2 million € (2010: 4.8 million €), 6.4 million € for 

consulting services (2010: 9.5 million €) and valuation adjustments on receivables amounting to 

4.9 million € (2010: 11.4 million €).

INTRO | 




FINANCIAL RESULTS 

The financial results also deteriorated slightly by (5.6)% to minus (96.2) million € (2010: 

(91.1) million €). 

INCOME TAXES 

Tax expenses normalised in 2011 in contrast to 2010. In the financial year 2010, the conwert Group 

recorded a positive tax result of 13.5 million €. This was due to special effects related to the consolidation 

of ECO. In 2011, tax expenses, at (5.1) million €, reflect a normalised tax volume. 

PROFIT FOR THE YEAR AND EARNINGS PER SHARE 

The group’s profit after income tax and minority interests equalled 23.3 million € at 31 December 

2011, down (2.1)% on the previous year (2010: 23.8 million €). 

Therefore, basic earnings per share of conwert of 0.28 € were realised taking into account minority 

interests. In the prior-year period, it had been 0.29 €, which corresponds to a decline by (3.4)%. 

FUNDS FROM OPERATIONS (FFO) 

FFO was raised by 52.0% to 81.3 million € in the financial year 2011 thanks to the good letting 

and selling business (2010: 53.5 million €). FFO per share also rose from 0.65 € to 0.98 € in the 

reporting period. This corresponds to an FFO yield of 11.5% with respect to the share price at 

31 December 2011. This development is attributable to a significantly increased EBIT, higher net 

gains from sales and a substantially lower impact by one-off effects. 

DEVELOPMENT FFO (IN MILL.€) 

100 

80 

60 

40 

20 

72.6 

53.5 

81.3 

2009 2010 2011 

conwert 

21



22 

BALANCE SHEET STRUCTURE (IN MILL. €) 

3,500 

3,000 

2,500 

2,000 

1,500 

1,000 

500 

3,176.4 3,176.4 

Current 

assets 

596,4 

Non-current 

assets 

2,580.0 

Assets Liabilities 

conwert 

Current 

liabilities 

462.7 

Non-current 

liabilities 

1,465.3 

Equity 

1,248.3 

ANALYSIS OF BALANCE SHEET 

BALANCE SHEET TOTAL 

The balance sheet total at 31 December 2011 amounted to 3,176.4 million € and was therefore 

(10.5)% lower than in the year 2010 (31.12.2010: 3,550.8 million €). The item “investment properties”, 

at 2,424.2 million €, again represented the largest item in the balance sheet (corresponds to 76.3% 

of the balance sheet total). The assets of “properties held for sale” amounted to 404.4 million € 

at the balance sheet date. Current assets totalled 596.4 million € as of 31 December 2011 and thus 

dropped by (15.15 )% in comparison with the prior-year period (2010: 702.9 million €). 

Overview balance sheet indicators 2011 2010 Change (in %) 

Non-current assets mill. € 2,580.0 2,847.9 (9.4) 

Thereof investment properties mill. € 2,424.2 2,701.1 (10.3) 

Thereof investments in associates mill. € 9.4 0 - 

Thereof financial assets mill. € 4.7 3.7 27.0 

Current assets mill. € 596.4 702.9 (15.2) 

Thereof available-for-sale properties mill. € 404.4 537.1 (24.71) 

Total assets mill. € 3,176.4 3,550.8 (10.5) 

Equity mill. € 1,248.3 1,330.1 (6.1) 

Thereof minority interests mill. € 11.8 19.1 (38.2) 

Non-current liabilities mill. € 1,465.3 1,642.3 (10.8) 

Thereof non-current loans and borrowings mill. € 1,005.9 1,211.9 (17.0) 

Thereof bond liabilities mill. € 0 49.8 - 

Thereof convertible bonds mill. € 273.8 276.0 (0.8) 

Current liabilities mill. € 462.7 578.3 (19.99) 

Thereof current loans and borrowings mill. € 408.9 456.1 (10.4) 

Total equity and liabilities mill. € 3,176.4 3,550.8 (10.5) 

EPRA NAV per share € 17.03 16.35 4.2 

Equity ratio *) % 39.3 37.5 4.8 

Gearing **) % 137.2 151.8 (9.6) 

Net debt mill. € 1,713.2 2,019.0 (15.2) 

*) Equity incl. minority interests 

**) Net debt/equity 

EQUITY 

Equity at the balance sheet date on 31 December 2011 declined slightly to 1,248.3 million € in 

comparison with 1.330,1 million € in the balance sheet as of 31 December 2010. In contrast, the 

equity ratio as of 31 December 2011 was increased by 1.8 percentage points to 39.3% (31.12.2010: 

37.5%). Gearing amounted to 137.2% as of 31 December 2011, after 151.8% in the prior year. 

AUTHORISED AND CONDITIONAL CAPITAL 

In accordance with the articles of association as amended on 11 October 2010, the Administrative 

Board is authorised to increase the share capital of the company until 25 October 2012 by up to a 

nominal value of 400.1 million € by issuing up to 40,012,159 no-par bearer shares at a minimum 

issue price of 100% of the proportionate stake in the share capital, in one or several tranches, 

also by means of indirect subscription rights for a cash contribution or contribution in kind, and to 

determine the issue price and the conditions of the issue. 

In addition, the company has conditional capital of 384.1 million € at its disposal, which is intended 

to serve the convertible bonds. However, no use has been made yet of the latest authorisation to 

issue a third convertible bond, for which conditional capital in the amount of 128.0 million € was 

adopted at the Annual General Meeting on 15 April 2010.

INTRO | 




EPRA NAV PER SHARE 

In order to increase comparability with market participants and enhance transparency even 

further, conwert shows both the diluted and the non-diluted EPRA NAV for the year 2011. The 

EPRA NAV serves primarily to show the long-term fair value of equity. The calculation is based on 

equity (before minority interests) adjusted for effects from exercising options, convertible bonds 

and other rights in equity as well as taking into account the adjustment of the market value of 

derivative financial instruments and deferred taxes, i.e. adjusting items which have no influence on 

the long-term development of the group. 

in mill. € (unless indicated otherwise) 31.12.2011 31.12.2010 Change (in %) 

Equity 1,248.3 1,330.1 (5.7) 

Number of shares on the balance sheet date (in units) 81,497,309 84,258,661 (3.3) 

Equity attributable to the shareholders of conwert 1,236.5 1,311.0 (5.7) 

Revaluation of the sell portfolio 65.9 41.4 59.2 

Fair value financial instruments 137.3 65.9 63.8 

Long-term financing contributions from tenants 14.6 16.4 (11.0) 

Deferred tax 75.5 62.5 20.8 

Non-diluted EPRA NAV / share (in €) 18.35 17.28 6.2 

The non-diluted EPRA NAV per share rose by 6.2% to 18.35 € / share due to the positive contribution 

to earnings, but also due to the effect from the buyback of treasury shares, which are listed with 

a significant discount on the NAV. 

In the past, conwert showed the diluted EPRA NAV, which takes into account the dilution that would 

result from the issue of new shares in the course of exercising the conversion option of convertible 

bonds. At the end of the year 2011, it amounted to 17.03 € / share (2010 this figure was 16.35 €). 

NON-CURRENT AND CURRENT LOANS AND BORROWINGS 

Volume of financing in mill. € Volume of financing 

(before deduction 

of transaction fees) 

Thereof fixed 

interest 

Thereof 

variable interest 

Thereof term to maturity up to 1 year 248.5 25.6 222.9 

Thereof term to maturity 1 – 5 years 727.7 365.7 361.9 

Thereof term to maturity over 5 years 719.9 41.6 678.3 

Total 1,696.1 432.9 1,263.1 

At the end of 2011, the volume of financing totalled 1,696.1 million € (2010: 2,004.6 million €). The 

decline by (15.4)% on the previous year results primarily from loan repayments associated with 

the sale of properties. Non-current loans accounted for 1,005.9 million € of the financing volume 

(2010: 1,211.9 million €) and current loans to 408.9 million € (2010: 456.1 million €). 248.5 million € 

of the current loans are due within one year (see chart “Terms of maturity of financial liabilities”). 

The financing volume with a term to maturity of up to 1 year includes the actual current financing 

volume and, in addition, loans and borrowings which have a non-current maturity profile, but contain 

a right to cancel at any time for both parties, and the non-current portion of the loans and 

borrowings of properties available for sale. The average term to maturity of the loans amounted to 

10.95 years as of the balance sheet date, after 10.76 years at the end of 2010. Currently, 74.5% of 

the financing volume carries variable interest, 25.5% carries fixed interest. 84.0% of the financial 

liabilities were hedged against interest risks at the balance sheet date. The cash effective interest 

rate of the financing portfolio at the balance sheet date amounted to 2.9% p.a. before hedging 

and 4.3% p.a. after hedging costs. For new loans, the premium on the 3-month EURIBOR ranged 

between 150 and 250 basis points. 99.0% of the liabilities were denominated in Euro, the remaining 

part consisted of liabilities in foreign currencies such as Czech crowns and Swiss francs. 

The interest rate sensitivity analysis in the notes contains further information. Due to the high 

percentage of financial liabilities hedged against interest risks, the effect on the result amounts to 

only (2.2) million € if the interest rate is increased by 100 basis points. 

EPRA NAV PER SHARE (IN €) 

20 

15 

10 

5 

17.28 

16.35 

Non-diluted conwert EPRA NAV 

Diluted EPRA NAV 

18.35 


17.03 

23



24 

The financial results of (96.2) million € included cash interest expenses as well as significant noncash 

items, which predominantly result from non-cash effects of convertible bonds of (7.9) million €, 

IFRS financing costs (4.5) million € and restructuring of derivatives (net 3.4 million €). 

Terms of maturity of financial liabilities 

repayment schedule (in mill. €) 

The structure of loans and borrowings due within one year is shown below: 

Prolongation volume 

2012 85.5 

2013 48.5 

2014 119.0 

2015 40.8 

2016 109.4 

2017 144.8 

in mill. € Loan volume 

First six months 2012 26.1 

Last six months 2012 59.4 

Total 85.5 

Property assets of 2,828.6 million € were contrasted by loans solely related to property projects 

amounting to 1,621.7 million €. The loan-to-value ratio thus amounted to 57.3% (2010: 59.0%). 

conwert has a broad lender structure. Lenders range from major international banks to mortgage 

companies, small-scale regional savings banks and regional banks. As of 31 December 2011, 

1,368.4 million € were secured by mortgages, which corresponds to roughly 80.7% of the financing 

volume. This reflects conwert’s conservative approach. 

LOAN TO VALUE (in %) LIABILITIES TO BANKS (in mill. €) 

80 

60 

40 

20 

55.2 

59 57.3 

2009 2010 2011 

1) Debt capital amount from convertible bonds. 

On 7 November 2007, the conwert Group issued a convertible bond with a total value of 

196.4 million €. The conversion price equals 130% of the share price of common shares on the 

day the convertible bond was issued. The conversion right may be exercised at any time until 

3 November 2014. If the conversion right is not exercised, the bonds are repaid on 12 November 

2014. Interest is paid each year until settlement at a rate of 1.5% p.a. 

1,800 

1,500 

1,200 

900 

600 

300 

1,696.1 

126.6¹ ) 

147.3¹ ) 

358.4 

343.9 

713.4 

2011 

5.3 % Convertible bond 

1.5 % Convertible bond 

Capital costs 

39 banks 

Range

INTRO | 




The bondholder is entitled to cancel bonds with effect from 12 November 2012. conwert is entitled 

to redeem the bond prematurely at the applicable redemption price if the price of the common 

shares to be delivered on conversion equals at least 130% of the redemption amount on 20 of 30 

successive stock exchange days. By the balance sheet date, conwert had repurchased convertible 

bonds of a nominal value of 45.4 million € (2010: 34.3 million €) for 32.3 million € (incl. transaction 

costs, 2010: 21.0 million €). The conversion price was adapted from previously 14.33 € to 13.87 € 

to reflect the dividend payment. 

In the past financial year, repurchased convertible bonds with a nominal value of 41.9 million € 

were cancelled, reducing the original nominal value from 196.4 million € to 154.5 million €. 

In the first quarter of 2010, conwert issued a convertible bond with a total value of 135.0 million €. 

The term of the convertible bond is six years (maturity date 01 February 2016). The holders have 

the right to declare the bond due and payable prematurely four years after the issue at the nominal 

value, including accrued interest. The coupon is 5.25% p.a. and is payable semi-annually. The 

conversion price was adapted from previously 11.60 € to 11.22 € to reflect the dividend payment. 

As of 31 December 2011, conwert’s net debt amounted to 1,713.2 million €, after 2,019.0 million € 

in 2010. 

CASH FLOW 

The development of cash flow shows the following picture: on the basis of the profit for the year 

of 18.5 million € on the balance sheet date, cash flow from operating activities amounted to a high 

190.2 million € (2010: 83.4 million €). Cash flow from investing activities increased significantly – 

above all due to the high volume of sales and a lower investment volume than in the previous 

year – and equalled 262.4 million € at the balance sheet date, after 4.7 million € in the prior-year 

reference period. Cash flow from financing activities amounted to (422.0) million € at 31 December 

2011 after (84.4) million € in the previous year. Cash and cash equivalents at the end of the period 

amounted to 95.8 million €, exceeding the prior-year figure by 29.6 million €. 

Overflow of cash (in mill. €) 2011 2010 Change (in %) 

Profit for the year 18.5 25.7 (28.0) 

Subtotal (gross cash flow) 113.2 60.6 86.8 

Cash flow from operating activities 190.2 83.4 > 100 

Cash flow from investing activities 262.4 4.7 >100 

Cash flow from financing activities (422.0) (84.4) >(100) 

Change in cash and cash equivalents 30.7 3.7 >100 

Cash and cash equivalents at the beginning of the period 66.2 61.6 7.5 

Currency translation differences (1.1) 0.9 NA 

Cash and cash equivalents at the end of the period 95.8 66.2 44.7 

conwert’s investment expenses for properties (CAPEX) totalled 74.4 million € at in the year 

2011. Capitalisable investment expenditures for hold-portfolio properties (CAPEX) amounted to 

55.6 million € in the financial year 2011. For the sell portfolio, this figure was 18.8 million €, so that 

a total of 74.4 million € capitalisable investment expenditures were recorded. With an average of 

2,330,308 sqm in the overall portfolio of the group, CAPEX averaged at 31.9 € per sqm. Moreover, 

conwert invested a total of 19.2 million € in the maintenance of the property portfolio. 

Capex (investment costs) Group 

Capex total (in mill. €) 74.4 

Capex per average sqm (in €) 31.9 

Maintenance (in mill. €) 19.2 

Maintenance per average sqm 8.3 

25



26 

EMPLOYEES 

Every single employee is a central success factor for the conwert Group. It was only because of 

the exceptional commitment of each team member that conwert Immobilien Invest SE realised 

another good annual result in a difficult market environment in 2011. Therefore, the conwert management 

attaches great importance to creating an optimal working environment for all conwert 

employees. In the past financial year, the focus was primarily placed on further education of executives, 

young managers and all new employees. The career academy “conwert.karriere”, which 

was established in the year 2010, trained numerous executives and young managers at the conwert 

locations within the leadership programme “conwert.führung” in the financial year 2011. Priority 

was attached to seminars in the areas of leadership and personnel development for these target 

groups. Overall, 15 persons successfully completed training at the conwert academy in the year 

2011. Employees were offered courses in the areas of tenancy and tax law, IT and organisation. 

Moreover, technical workshops and project management training courses were held. Expenses 

for training and further education in the conwert Group totalled 103.0 T€ in the financial year 2011. 

At 31 December 2011, the conwert Group employed 660 people (FTE) at more than 53 conwert 

locations in six countries. Despite normal attrition and the outsourcing of individual segments, 

the number of employees remained stable overall (2010: 656 employees). For example, RESAG 

Insurance Broker was closed down, the activities of Lifestyle Living GmbH were discontinued and 

individual alt+kelber sales companies were merged in the year 2011. conwert hired 240 new employees 

in Austria and Germany in 2011, in order to meet new market requirements and to optimally 

fill key positions. 75 employees worked at the Group’s headquarters in the past financial 

year, 95 employees for the RESAG Group in Austria and 435 employees for the alt+kelber Group in 

Germany. In the other regions, an additional 24 employees worked in order to provide optimal service 

for the portfolio locally. The slightly lower personnel expenses of 35.3 million € in the financial 

year 2011 (2010: 38.2 million €) essentially resulted from expiring management contracts and the 

related variable remuneration. 

Part-time models, and especially part-time models for parents, combined with flexitime are intended 

to make the work place within the conwert Group even more attractive for employees. In 

Austria and Germany, a total of 15 employees were on parental leave in the year 2011 and 159 

employees worked part-time. At the same time, conwert trained 20 apprentices in Germany. 

Part of the annual salary of employees in management positions consists of variable components. 

They depend to the accomplishment of group targets (EBIT target), interdepartmental targets and 

individual targets, which are renewed annually. In terms of social benefits, pension subsidies exist 

for long serving employees. In Austria and Germany, conwert invests in a provision for the future 

for employees. Life and accident insurance was provided for the Executive Directors.

INTRO | 



Employees 


RESEARCH AND DEVELOPMENT 

The business model of conwert, which focuses on the development of older residential buildings 

and property services, does not require extensive research and development activities. Therefore, 

there is no separate department for research and development activities and they are not shown 

separately in the income statement. However, conwert continuously works on the improvement 

and modernisation of its properties and consults only recognised experts for this purpose. With 

these activities, conwert also takes the necessary steps in order to realise a sustainable increase 

in value and to secure the value of the properties in the long term. 

Prior to renovating an apartment building, conwert reviews, together with its partner companies, 

all measures that could increase the energy efficiency of the respective older residential property. 

In the course of the development activities, facades are (partially) insulated in attic conversions, 

windows and doors are exchanged and basements and roofs are completely (re-)insulated. This 

enables conwert to enhance the energy class of buildings from class D to class A. 

conwert tries to use environmentally friendly materials wherever possible in all development 

activities. In the course of refurbishments, existing residual pollution and materials containing 

toxic and environmentally harmful substances are eliminated and replaced with modern materials 

that present no health risks. conwert increasingly uses the ecologically outstanding building 

material wood for loft extensions because it is by far more CO 2 neutral than other materials. In addition, 

conwert ensures that material consumption is minimised through recycling and through the 

combination of existing, environmentally friendly raw materials with new materials. In this context, 

conwert also relies on innovative developments and consults external experts. 

In all its development activities conwert attaches great importance to primarily working with 

certified partners with special quality and eco-labels. Through innovative purchasing management 

costs can be cut considerably through the choice of suppliers on the one hand, and positive contributions 

can be made to research and development in the area of development activities on the 

other. 

In the year 2010, conwert started a cooperation with GRIFFNER, the market leader for prefabricated 

houses based on ecological building methods in Austria, which focused, among other things, 

on research and development. This cooperation was also continued in 2011 with a project in 

Bujattigasse in the 14th district of Vienna. In this project, only ecological building materials such as 

wood, cellulose and cork were used. An innovative, zero-emission heating system was developed, 

which is based on a heat pump system. 

The large-scale earth quake test, which conwert conducted together with the Austrian Institute of 

Experts for Structural Property Assessment (ÖIBI) in 2010, was part of a European research programme 

to determine the earthquake safety of older properties. The findings derived from it were 

used for both the development of new measuring techniques and the targeted modernisation of 

historic buildings in 2011. Based on the findings, conwert was able to plan a “loft conversion heavy” 

in accordance with the earthquake standard Eurocode 8 without the additional measures required 

otherwise. conwert thus made a scientific contribution and provided evidence for the safety of older 

properties in the course of this field test. 

27



28 

RISK MANAGEMENT REPORT 

RISK MANAGEMENT SYSTEM 

As an internationally operating Group, conwert is exposed to a variety of risks. The Group therefore 

has an established comprehensive risk management system which complies with international 

standards. This system is reviewed regularly for its functionality by internal and external bodies to 

ensure that internal quality requirements and legal regulations are met. 

The risk management system of conwert is developed further continuously and adapted to changing 

external conditions and altered internal requirements. In the past financial year, the catalogue 

of risks was revised and both the reporting processes and competences were adapted. This way, an 

effective and efficient risk management is to be guaranteed for the future. 

The risk management system implemented for the entire conwert Group is defined as a framework 

and based on concerted activities, methods and competences. 

6. Monitoring 

5. Risk communication 

4. Risk treatment 

1. Risk strategy 

2. Risk identification 

3. Risk assessment 

The risk strategy comprises the basic formulation of the understanding of risks, the definition of 

the purpose and applicability of the risk management system as well as the clear differentiation 

from other functions and activities aimed at realizing the economic targets of the conwert Group. 

Like the overall strategy of the conwert Group, the risk strategy is adapted regularly to changed 

framework conditions. Moreover, the risk strategy of the conwert Group provides that no unforeseeable 

risks are taken and that appropriate measures are implemented for calculable risks to 

ensure that no effects that could jeopardise the company’s ability to continue as a going concern 

are to be expected if such a risk materialises. 

Risk identification deals with defining risk areas, identifying individual risks as such and determining 

areas of observation, in which risks must be identified in any case. In addition, risk identification 

includes the identification of changes in the risk environment occurring in the short term, 

or of new risks. Risk identification is a permanent process, which is carried out in all areas of the 

Group on an ongoing basis.

INTRO | 




In risk assessment the nominal risk potential (“effect”) of individual risks is determined taking 

into account the probability of occurrence. The nominal risk potential is the value which has a 

significantly negative influence on the planned result for the period. Identifiable risk correlations 

are taken into account. The aggregation of individual assessed risks, results in a cumulative risk 

position, which is reduced to a risk net position by measures of risk treatment. 

Risk treatment covers both preventative and reactive measures including ad hoc-measures, which 

are taken in the case of suddenly occurring new risks. 

Risk communication serves for the structured collection, presentation and disclosure of information 

within the framework of the reporting system by the defined risk owners to the Group 

management. 

The implementation of risk management and of the measures defined in the risk management 

process is supervised as part of the ongoing monitoring. Monitoring also covers a regular review of 

the functionality of the entire risk management system. 

Central management functions 

ADMINISTRATIVE BOARD 

EXECUTIVE BOARD 

RISK MANAGEMENT BOARD 

Controlling, 

risk management 

and ICS 

Regional managements 

Risk management is conducted based on the function and on the structure of the Group, both 

centrally by managers (risk owners) in the areas of group management and administration, and 

decentralised by the regional managements in Germany, Austria and the other regions. The risk 

owners meet regularly (quarterly) as the Risk Management Board at the Risk-Jour-Fixe, where 

the main identified risks are dealt with and the monitoring is conducted if it falls under the competence 

of the risk owners. The administration and coordination of the entire risk management is 

carried out by the centralised management area “Controlling, Risk Management and ICS”, which 

falls under the scope of responsibility of the CFO. Risk management as such is the responsibility of 

the entire Executive Board, which reports to the Administrative Board on a regular basis. 

29



30 

CATEGORIES OF RISKS 

Six risk categories were identified within risk identification. These risk categories cover all sources 

of risks and levels of effect relevant to the conwert Group. Individual risks were identified for each 

category and summarised in a risk catalogue. The risk catalogue, together with the group risk 

management guideline, serves the risk owners as a basis for exercising the risk owner function. 

Based on the risk categories, the main risks, which are described in the following, are dealt with: 

Strategy 

Economic and 

political 

environment 

Organisation 

and IT 

Operations 

Market 

Finance 

STRATEGY 

Risks which may result from the development of the strategy for the Group, from the implementation 

of the strategy, from strategic cooperations and investments as well as their management 

including the investment structure and the organisational contracts fall under the risk category 

“strategy”. Responsibility for the risk category “strategy” lies in the hands of the central group 

function “Group Strategy” as the risk owner, directly incorporating the entire Executive Board and 

the Chairman of the Administrative Board. 

Therefore, ongoing market observation and monitoring of the Group segments based on plan 

values, continuous benchmarking and an active investor and public relations policy were established 

in the conwert Group in order to counteract risks in this category. In addition, the investment 

strategy of the conwert Group is clearly defined, with the economic parameters set out in the 

investment guidelines both for the regions and the sectors. Investments of any kind are subject 

to an adequate internal approval process depending on the investment volume. Nevertheless, 

it cannot be ruled out that the conwert Group could indirectly be jeopardised in its existence due to 

persisting developments that have adverse effects on the overall economy. 

DESCRIPTION OF RISK EFFECTS COUNTER-MEASURES 

General corporate risk 

+ Company’s development will not proceed 

as planned 

General economic risk 

+ Economic crises and market cycles 

encumber the property market 

SIGNIFICANT STRATEGIC RISKS 

+ Declining profitability 

+ Loss of efficiency 

+ Lack of identification with company 

by staff members 

+ Non-realisation of outside commissions 

+ Slumps on property markets 

+ Business drops 

+ Monitoring on an ongoing basis of corporate 

divisions and budgets 

+ Monitoring of internal processes on 

an ongoing basis 

+ Diversified property portfolio 

+ High degree of price stability due 

to high-value properties in top locations 

+ Income from a wide range 

of property services 

+ Focus of business activities on markets 

with a fundamentally positive development

INTRO | 




ORGANISATION AND IT 

The risk category “Organisation and IT” covers all potential scenarios that may occur as part of the regular management tasks 

including the selection and remuneration of employees and leadership as well as from organisational aspects and in all areas 

of information technology. The individual risks summarised under this category were assigned to the respective risk owners in 

the central group functions and, where there is a direct relation with the operating segments at the regional level, are managed 

by the regional managements as additional risk owners at the same time. As the central and regional activities are consistently 

coordinated, duplications of effort in processes are avoided without neglecting regularity aspects. 

Due to the special importance of the entire IT segment from a risk perspective, the existing IT strategy has been advanced further 

so that, consequently, no limitations of the operating activities of the conwert Group are to be expected in the future. However, 

situations may occur, especially as a result of unforeseeable criminal intrusion, which disrupt the proper operations of the IT 

infrastructure in such a way that it may be detrimental to the conwert Group. 

MARKET 

The risk category market covers risks that result from developments in markets in which the conwert Group operates. They 

include risks arising from customer relations or the competitive situation. Therefore, the appointed risk owners in the operating 

segment at the regional level specifically monitor the competition and analyse the development of demand in the different 

markets on an ongoing basis. Due to the multi-dimensional diversification of the market services of the conwert Group, which is 

represented in several regionally and factually differentiated markets, there are no individual risks or risk clusters which could 

directly endanger the Group’s existence from a today’s perspective. Should any major permanent adverse changes occur in the 

future, this may, nevertheless, lead to considerable negative effect on the equity situation of the Group. 

ECONOMIC AND POLITICAL ENVIRONMENT 

The risks related to the economic and political environment were also assigned to the central function Investor Relations as the 

risk owner. This category includes primarily those risks which occur as a result of changes in legislation or macro-economic 

developments. If such risks materialize, the access to capital and liquidity for the conwert Group or its customers could become 

so difficult that a further participation in the market appears to be unfavourable in the long term or even has to be ruled out. Such 

risks may result from changes in the government’s subsidy or fiscal policy related to the establishment, purchase and sale of 

properties or due to inflationary economic developments or negative developments in the capital markets which are directly or 

indirectly influenced by overriding political interests. The conwert Group currently has a widely diversified and balanced financing 

structure and pursues a continuous improvement in the equity ratio. If borrowed or equity capital should become dramatically 

more expensive, this could also lead to a significant negative impact on the conwert Group. 

OPERATIONS 

Operating risks are those risks that result directly or indirectly from operating activities. The conwert Group is represented 

primarily in the letting, sale and service segments in its core markets. As the risk owners, the regional managements manage 

all identified risks in the above mentioned business units. The risks result from the respective service provision processes and, 

accordingly, are minimised through appropriate preventive measures integrated in the processes and controls so that no damage, 

that may endanger continued operations, can arise from a today’s perspective. However, damage that jeopardises operations 

cannot be ruled out completely as this risk category also includes risks that cannot be influenced or fully covered by insurance. 

Such risks are, for example, natural hazards of all kinds or unconventional criminal activities, which are carried out on a large 

scale over a longer period of time. 

31



32 

KEY PROPERTY-RELATED RISKS 


Property valuations 

+ Fluctuations in property 

prices caused by alterations 

in economic parameters 

Sale of property 

+ Demand for residential 

and commercial properties 

collapses 

Lettings 

+ Lettings of apartments 

declines, or tenants fail to pay 

Development 

+ Volatility of costs of investing 

in project development 

+ Divergence in results 

reported in financial accounts 

+ Effects on credit rating 

+ Fluctuation of earnings in 

trading business 

+ Costs of vacancies 

+ Shortfall in rental incomes 

due to tenants with low 

credit ratings or due to falling 

market prices 

+ Cost overruns in project 

development 

+ Appraisals by independent 

experts 

+ High-quality and price-stable 

properties in top locations 

+ Doing business in markets 

showing fundamentally positive 

trends 

+ Ongoing analyses of locations 

+ No-delay responses to market 

conditions and trends 

+ Strategy of increasing value to 

tap value potential in properties 

+ Proactive asset management 

reducing vacancies 

+ Examination of creditworthiness 

+ High degree of diversification 

of property portfolio 



+ Adjusting rents to market levels 

+ Strategy of increasing 

value and leading to write-ups 

of properties 

+ Spreading of cost-related 

risks among suppliers, service 

providers and others 

+ Agreeing upon penalties 

+ conwert Baudevelopment GmbH 

is an in-group supplier 

+ Supervision on an ongoing 

basis of budgets and stage of 

construction completion 

FINANCE 

This category includes all indirect and direct risks which have a significant effect on securing 

liquidity, securing solvency and thus the going concern of the conwert Group. It comprises 

securing income, securing cash and cash equivalents and hedges of interest charges on loans. In 

addition, it contains risks related to the timely and correct reporting to authorities and investors. 

conwert manages its liquidity requirements on the basis of continuously updated liquidity planning, 

which takes into account the probable and foreseeable cash inflows and outflows. Nevertheless, 

it cannot be ruled out that correlating endogenous or exogenous events in other risk categories 

can lead to liquidity shortages. With respect to compliance with timely reporting to authorities and 

investors, improvements in the systems used, their operational safety and the processes and methods 

applied are made on an ongoing basis. In the case of a longer-term complete failure of the 

systems used, delays may occur which make timely reporting impossible.

INTRO | 




KEY FINANCING AND FOREIGN EXCHANGE RISKS 


Capital market 

+ Volatility or crashes on 

exchanges 

+ Financial risks 

Interest rate risks 

+ Rising interest rates 

Credit risks 

+ Restrictive supplies of 

loans by banks 

Foreign exchange risks 

+ Volatile foreign currencies 

Risks from financial instruments 

+ Negative effects from 

evaluations 

+ Inefficient hedging of loan 

liabilities 

+ More difficult to secure equity 

+ Less liquidity 

+ Impaired capabilities of 

expansion 

+ Increasing costs of financing 

+ Scarcity of liquidity 




+ Lessening of equity 

+ Evaluation of inefficient 

hedges negatively influences 

financial results 

+ Broad and long-term 

spreading of loans 

+ Strengthening of in-group 

financial resources 

+ Ongoing planning and 

management of liquidity 

+ Extending of liquidity base 

+ Entering into interest rate 

hedges (84.0% of the 

variable-interest volume of 

financing is hedged) 

+ Ongoing assessing of risks 

from non-hedged credit volume 

+ Broad and long-term spreading 

of loans 

+ Strengthening of in-group 

financial resources 

+ Broad and long-term spreading 

of loans (average term of 

11 years, received from more 

than 51 banks) 

+ conwert is nearly exclusively 

active in Eurozone (96% of 

property assets) 

+ conwert has basically no foreign 

currency liabilities 

+ Umbrella hedges in holding 

company enable flexible 

assignment of loan liabilities 

at the SPV level 

+ The average interest rate on 

hedges amounts to 4.09% 

33



34 

REPORT ON SIGNIFICANT FEATURES OF THE INTERNAL 

CONTROL AND RISK MANAGEMENT SYSTEM WITH RESPECT 

TO THE FINANCIAL REPORTING PROCESS 

The Executive Board is responsible for the risk management of the conwert Group. With a view to 

the accounting process, risk management falls under the responsibility of the CFO, who is operationally 

supported in risk management by his staff. 

The ongoing internal reporting system is particularly important for a functioning risk management 

in the conwert Group. Risks can thus be identified at an early stage and countermeasures can be 

taken. Timely, quarterly reporting within a Risk-Jour-Fixe, in which the individual risk owners participate, 

forms the basis for this. 

The parent company has provided uniform standards for the implementation and documentation 

of the accounting process for its subsidiaries. The objective is to prevent the risks of incomplete 

or incorrect financial reporting. In addition, the head office reviews the internal reports prepared 

by the subsidiaries for plausibility and compares them with the budget plans. Hence, appropriate 

measures can be taken rapidly in the case of deviations. In order to maintain the process described 

above, the subsidiaries are required to provide annual budgets for the following year in November 

of the current year. These budgets are subject to approval by the Executive Board. 

At regular meetings of the Executive Board with the regional and operating managers, the current 

business development and foreseeable opportunities and risks resulting from changed framework 

conditions are discussed. International accounting standards are complemented by internal 

guidelines in the preparation of the consolidated financial statements. 

This ensures a consistent presentation of the subsidiaries included in the consolidated financial 

statements in terms of measurement and presentation. 

The cornerstones of the existing internal control system and the risk management system with 

respect to the (group) accounting process at conwert can be described as follows: 

+ The conwert Group has a clearly defined structure of management and corporate operations. 

Cross-departmental requirements are specified by the central group management and administration. 

+ With a view to the accounting process, the functions of the accounting department are clearly 

separated from other areas such as payment transactions and group treasury. 

+ The finance systems are protected against unauthorised access by IT facilities. 

+ The finance systems employed use standard software wherever possible. 

+ An adequate system of guidelines (accounting guidelines, payment guidelines, etc.) is in place 

and is updated on a regular basis. 

+ Accounting data received and passed on is checked for completeness and correctness by the 

persons responsible, for example by taking random samples. 

+ The four-eye principle is applied to all processes relevant to financial accounting. 

+ The consolidation software MIS is used for the purpose of consolidation. For the principles of 

accounting and valuation refer to the notes to the consolidated financial statements. 

+ Processes relevant to accounting are audited by the (process-independent) internal audit department 

on a regular basis. 

The control and risk management system described ensures that all business transactions are 

correctly entered, processed and evaluated in the balance sheet and included in the accounting 

process. Qualified employees, the use of specific software and clear legal and internal regulations 

provide the basis for an appropriate, uniform and continuous accounting process. A clear separation 

of responsibilities as well as different control and verification mechanisms are to ensure a 

correct and responsible accounting process. Business transactions can thus be recorded, 

processed and documented in accordance with legal requirements, the articles of association and 

internal guidelines.

INTRO | 




OUTLOOK 

OVERALL ECONOMY IN THE EURO AREA INCLUDING GERMANY 

The overall economic situation in the euro area is still tense and early economic indicators suggest 

a mild recession. In its forecast for the year 2012 from February of the current year, the EU 

Commission expects GDP to decline by 0.3% in the euro area. The Commission thus predicts a 

stagnation in economic growth for the year 2012, but sees indications that the European economy 

will stabilise. Inflation is expected to amount to 2.3% in the European Union (EU27) in the current 

year. Moreover, the Monetary Council of the European Central Bank again decided to maintain the 

base rate at 1% at its regular meetings on 9 February and on 8 March 2012. However, several experts 

assume that, with determined actions, a turnaround is possible in the course of the year 2012 

and the European Union will be able to achieve growth and increasing employment figures through 

the stabilisation. The agreement to a further development of the crisis instruments throughout the 

EU and the financial pact for fiscal policy coordination in the euro zone creates new framework 

conditions, which are designed to contribute to decreasing the existing uncertainty in the economy. 

However, financial experts believe that – aside from temporary phases of recovery – negative influences 

will be the prevailing element until spring 2012, which indicates further declines in share 

prices. Only with a new start in the euro periphery and first signs of economic stabilisation, the 

development should level out and could introduce a turnaround in the second half of the year 2012. 

(EU Commission, Interim Forecast February 2012, Peter Brezinschek, Raiffeisen Research, Q4/2011) 

According to a forecast by the German Institute for Economic Research (DIW) in Berlin on the 

development of the real gross domestic product in Germany in the year 2012, GDP growth is 

expected to amount to 0.6% compared with the previous year. In contrast, a 2.2% change in GDP is 

forecasted for the year 2013. 

(DIW Berlin; Federal Statistical Office) 

AUSTRIA 

Although from today’s perspective it is not yet certain whether the measures taken so far by the EU 

and the ECB will suffice, many financial experts assume that the euro area has the means to end 

the crisis. Therefore, they still do not expect another recession of the Austrian economy. However, 

the confidence crisis is likely to leave massive traces on the real economy in Austria in the year 

2012. The EU Commission therefore only expects an increase by 0.7% in the Austrian GDP. Moreover, 

it assumes that demand by the public sector will decline also in Austria in 2012, which may 

lead to a reduction of investment activities. The Commission predicts an inflation rate of approx. 

2.4% in Austria in the year 2012. Despite overcoming the confidence crisis, growth prospects will 

remain subdued as the reins will be tightened significantly in terms of fiscal policy, but thanks to a 

more robust global upswing, a higher increase in GDP should be possible again in 2013. 

(Unicredit Research, 15 December 2011; EU Commission, Interim Forecast February 2012) 

Wiener Börse AG also expects a volatile year on the stock exchange in 2012. Should the market 

climate take an unexpected turn and develop positively, the management of the stock exchange 

expect stocks to return to pre-crisis levels and new initial public offerings. In early 2012, a trend 

towards short IPO windows was visible. Several candidates for the stock exchange are in the 

waiting loop. International investors continue to be very important for the domestic capital market. 

As in the past, major investors will come from the USA and Great Britain in the year 2012. 

(Vienna Stock Exchange, 30 December 2011, Statement of the Management Board Vienna Stock Exchange) 

PROPERTY MARKETS 

RESIDENTIAL PROPERTIES VIENNA 

The residential property boom in Vienna will continue in 2012 despite, or rather because of, the 

weak economic prospects, according to experts. Freehold flats are considered an ideal investment 

in the debt crisis. In 2011, freehold flats recorded price increases between 7% and 9% in individual 

submarkets. Especially in the sixth, seventh and ninth districts, prices per square meter exceeded 

5,000 €. The fifth and the adjacent twelfth district, previously less popular, are expected to outperform 

the market average in 2012, according to experts’ forecasts. This upward trend will not 

prevail in terms of rental prices. Competition from municipal and non-profit housing with legally 

defined upper limits for rents and the strong demand for freehold flats should dampen an upward 

development for rents. The increase will roughly correspond to the inflation rate in the experts’ 

opinion. 

(EHL, Report on investment properties 2012) 

35



36 

OFFICE & COMMERCIAL PROPERTIES VIENNA 

Experts think that the situation will be more difficult in the office market in Vienna in 2012, although 

new space will reach a new record low of 170.000 sqm in 2012. EHL forecasts an overall take-up of 

200,000 sqm, which would correspond to a decline by 10.000 sqm in comparison with the previous 

year. Relocations of foreign companies will be the exception rather than the rule, and the space 

will be rented primarily by local companies that move office. Difficult times are looming for market 

participants for older office projects with low spatial efficiency and high running costs. The strongest 

motives for relocations will be increased efficiency and spatial optimization. Therefore, property 

experts expect vacancy rates to increase to roughly 6.5% on average. In contrast, retail will 

not yet be affected by the crisis in the year 2012. In the so-called “golden U”, the area comprising 

the inner city streets Kärntnerstraße, Graben and Kohlmarkt, the rent per sqm rose by 20 € within 

only a year in 2011 and currently amounts to 340 €, with an increasing tendency. 

(EHL Report, Office Market Report Vienna, spring 2012 & Retail Market Report, Vienna 2012) 

GERMAN PROPERTY MARKET 

In a weakening economic environment and in view of an expectable lack of alternative investments 

with ongoing historically low capital market interest rates, the property experts of CBRE expect 

the demand for secure property investments to remain dynamic in the year 2012. Especially the 

yield differential between core property investments and long-term debt instruments of the federal 

government, which reached 3.13 percentage points for top-class office properties, will lead 

to persisting strong demand for German property investments. The reduction of risk items in the 

balance sheets of banks as well as the required higher capital base will also lead to an increase 

in ailing, management-intensive properties becoming available in the market in the second half of 

the year. Against this backdrop, many property experts expect a comparable transaction volume to 

remain in 2012 as in the previous 12 months of 2011. As the medium-term growth perspectives for 

the German economy are considered positive and Germany increasingly asserts itself as a secure 

investment location, the share of foreign investors should continue to increase as well. 

(CBRE Germany Investment Quarterly Q4) 

GERMAN RESIDENTIAL PROPERTY MARKET 

According to property experts, tenants and property buyers should be prepared for rising costs 

in 2012, with a significant increase forecast for new rentals in strained residential markets. Here, 

new tenancy agreements may exceed the customary local rents by between 10% and 30%. Current 

studies show that buyers of properties will also have to pay more in 2012. According to calculations 

of the Association of German Pfandbrief Banks (vdp), owner-occupied homes in Germany were 

as expensive as never before since this value was first calculated in the year 2003. In particular, 

freehold condominiums were substantially more expensive for buyers than in 2011. Within a year, 

prices rose by 5.2%. Against this background, permits for property projects also rose by 21%. The 

causes were low interest rates, declining unemployment and the growing popularity of tangible 

assets during the crisis. While the decline in public sector building projects caused some concern 

for the construction industry, housing construction will provide a stimulus for the construction 

activities in the years to come, according to the ifo Institute. The institute estimates that more than 

200,000 new apartments will be built in Germany in 2013, nearly 50% more than in 2009. Thanks to 

brisk demand for apartments, the ifo experts expect an average annual growth of just under 0.5% 

to 254 billion € until 2020. In contrast to this trend, public sector construction projects will drop 

from 38.5 billion € to less than 35.0 billion € by 2020. 

(Study of Dr. Zitelmann)

INTRO | 



Outlook and post-balance sheet date report 

BERLIN RESIDENTIAL PROPERTY MARKET 

Experts forecast stable demand for apartment buildings in the Berlin residential property market 

in the year 2012. Prices will presumably remain at the current level. For owners who want to 

take advantage of a tax-free sale after ten years – an opportunity that currently still exists – there 

are good chances of attractive selling prices. German players will continue to dominate the market, 

although demand from countries like Austria, Italy, Sweden, Norway, Israel, etc. will increase 

further. Private and institutional investors with a strong equity basis will most likely use the market 

for purchases. The average debt ratio will range between 60 and 70% of the purchase price as the 

financing behaviour of banks is unlikely to change fundamentally. Experts assume that Berlin will 

again see the strongest demand in the property market, ahead of Hamburg and Munich by a clear 

margin. Many investors are expected to have the German capital on their radar in 2012, after Berlin 

was not in the investment focus for many institutional investors in the previous years. Increasing 

rents and very good forecasts for the residential market have ensured that in addition to private 

investors, who have considered Berlin an investment stronghold for a long time, institutional 

investors are active as buyers again. For many affluent private investors the reasons for a stable 

investment in uncertain times are evident. Interest rates will continue to be favourable in the year 

2012, according to numerous experts. Rental income currently grows above the inflation rate 

and the vacancy rate is declining continuously. Scarce supply should continue to lead to further 

moderate price increases, with the average prices in Berlin having remained remarkably stable so 

far. Although purchase prices rose, there was no price explosion. According to experts, Berlin still 

represents a market full of opportunities for investors in 2012, which, unlike other large cities in 

Germany, has sufficient fungibility. Many property experts are convinced that, searching systematically, 

there are still sufficient investments to be made in the German capital, while the apartment 

building market in other cities appears to be less appealing because of shortages in supply. 

(Study of Dr. Zitelmann) 

37



38 

OUTLOOK FOR 2012 

In the financial year 2011, conwert underwent a restructuring phase. In many areas of conwert the 

necessary transformation process was initiated and has already been completed in some parts. 

This step is required in order to turn conwert from a medium-sized company into an organisation 

that meets the standards of a growth-oriented ATX group. 

This has an impact on both the entire organisational structure of the Group, which we cleared out 

and simplified in a first stage, and on all internal processes, systems and guidelines. 

In 2011, the entire organisation structure was realigned and professionalised. This process will 

be continued in 2012. In particular the structure in Germany will be subject to restructuring and 

simplification in the year 2012. The service structure was already adjusted in 2011. The effects will 

be seen in 2012. However, efficiency increases are planned for the German service providers also 

in 2012, which will contribute to an increase in profitability of the conwert Group in 2012 and the 

subsequent years. 

The entire IT landscape of conwert was put on a more stable foundation and simplified by a newly 

hired IT manager in 2011. This led to massive cost reductions in 2011, which will take full effect in 

2012. Apart from the reduction of vacancies, the service segment of RESAG Property Management, 

which does not yet fully meet the standards in terms of profitability and service quality, needs to be 

improved. The restructuring of RESAG Immobilienmakler GmbH, which was initiated in 2011, will 

be continued and intensified under the management of Jasmin Soravia, the new regional manager 

for Austria. As a partial success in this restructuring process we managed to redefine the contract 

between conwert and RESAG Immobilienmakler, in which conwert holds a minority interest, in 

tough negotiations. The exclusive character of the sales relationship with RESAG Immobilienmakler 

GmbH has thus been cut down. The existing 3-year contract was replaced by a 1.25-year contract, 

and as of 31 March 2013 conwert can freely choose its external sales partners. Moreover, the 

portfolio to be marketed by RESAG Immobilienmakler GmbH was redefined and massively limited. 

For this purpose, conwert has established its own internal sales team. Furthermore, with immediate 

effect, conwert will no longer pay a seller’s commission to RESAG Immobilienmakler GmbH, 

which will generate a substantial cost benefit for conwert as early as 2012. 

On the administrative side conwert will also reduce the cost structure in 2012. The introduction 

of SAP, which will be completed in the first half of 2012, will lead to a substantial improvement in 

our administrative system. Furthermore, the structures of our management and service-providing 

units will be adapted in the year 2012. 

The portfolio adjustment will initially require higher expenses, namely to carry out these sales, but 

will also enable an adaptation of the structures to the size of the remaining portfolio. Although this 

process was started in 2011, it will not produce results until 2012. 

With the introduction of a central purchasing and procurement department in mid-2011, we now 

centrally define a series of refurbishment and development standards and have cut down on the 

number of companies we cooperate with on refurbishment and development measures to a limited 

number of technical partners with whom we work together exclusively. To name only one example: 

In the past, conwert used to work with more than 540 suppliers in Vienna alone; this list has 

now been reduced to 20. This obviously will lead to massive savings in 2012 and the subsequent 

years. In keeping with better corporate governance, the central procurement department also ensures 

that the central management of awarding building and renovation contracts is based on predefined 

guidelines. 

With regard to our investments per sqm in our portfolio, we substantially exceed the investments 

made by our competitors. On the one hand, this is attributable to the inefficient way of awarding 

contracts and the lack of control of refurbishment activities in the past; on the other hand, it is due 

to the resulting investment backlog, on which we caught up in the past year. We assume that we 

will have to invest significantly less in our portfolio in the years to come as our investments will 

be better adapted to the market conditions as a result of enhanced control and higher efficiency.

INTRO | 




In 2011, we issued a new tender for the valuation of all our properties and awarded new contracts. 

In Germany, the revaluation contract was granted to CBRE, in all other regions to a consortium 

led by Cushman & Wakefield. As a result of this new tender, the valuation costs were lowered by 

0.3 million € per year and the figures confirmed by international experts. The German portfolio has 

been rebalanced. Inner-city locations recorded an increase in value while the value of locations on 

the outskirts decreased. The valuation reflects the demographic development. 

conwert will complete its restructuring in 2012 and pursue growth again. However, sustainable 

growth of our profitability and our cash flows is only possible through critical mass at individual 

locations and improved economies of scale. In addition, it is only possible to generate sustainable 

positive FFO (Funds from Operations) from the portfolio management in locations where the rental 

yield allows it. 

At our location in Vienna, we do have the critical mass, but with an average rental yield of less than 

4% and leverage in excess of 50%, it is hardly possible to generate positive cash flow from an asset 

portfolio after investments. The future business model in Austria will therefore strongly deviate 

from the business model in Germany. 

This results in two strategic guidelines for the Austrian portfolio. Firstly, the portfolio of properties 

yielding less than 4%, which is currently too high, has to be reduced further. At present, the 

Austrian property portfolio has a value of 1,362 million € and will shrink to a base of just under 

500 million € in the next few years. This portfolio will consist of properties generating yields with a 

minimum return on equity of 4.5% on the one hand; on the other hand it will comprise development 

objects and trading properties, where there is considerable development potential and a resale 

is possible within 2 years. Therefore, conwert will also make opportunistic purchases in Austria 

again. An analysis with a view to tax legislation has shown that it is advantageous to carry out such 

transactions with ECO companies. 

In order to be able to implement the adaptation of the business model in Austria, we deliberately 

enhanced the expertise of the conwert Group in the development segment and sales in Austria and 

installed a new management team. 

The objectives look different for the German market. Rental yields in Berlin, Dresden and Leipzig 

are still highly attractive, also in central locations, at an average of 6.3%. With such rental yields 

we generate a positive cash flow even after investments; through the internal service team conwert 

usually improves the purchase yield substantially. The strategic orientation of the German portfolio 

will therefore concentrate on purchases in our core locations, and on sales in such locations where 

conwert lacks the critical mass. Moreover, the focus was placed on an increase in the efficiency of 

managing the portfolio. conwert also expects higher profitability in this area in the next year as a 

result of the measures implemented in 2011. 

With respect to the property portfolio, two main objectives will be focused on above all in the 

coming two years. On the one hand, the sale of assets of up to 1.0 billion €, primarily in Austria, is 

planned, with proceeds on the sale of properties expected to amount to about half, i.e. 450 million €, 

in 2012. At the same time conwert pursues the goal to increase the average yield to 6.5% across 

the entire property portfolio by the end of the year 2013. This target is supposed to be met above 

all by strengthening the German asset portfolio, through the purchase of development and trading 

objects as well as through the sale of ECO objects with high vacancy rates and low yields. 

In order to meet the acquisition targets, conwert has adopted a budget of more than 225 million € 

for purchases in 2012, which will range between 20 and 30 million € per transaction. Larger transactions 

have deliberately not been budgeted as it is difficult to foresee the probability of occurrence 

and therefore the strength of our guidance would be negatively affected. The management and the 

Administrative Board are, however, also analysing structures in which individual transactions with 

an equity volume in excess of 100 million € can be carried out and in which conwert could participate 

in possible partnerships/partial purchases. 

39



40 

The conwert service segment will be significantly expanded in the year 2012 so that the assets under 

management will total up to 1.0 billion € at the end of the financial year. Amongst other things, 

conwert currently manages properties with a value of approx. 288 million € from the first two DWS 

residential property funds with long-term contracts of 11 to 25 years; another DWS fund is already 

under preparation (see the post-balance-sheet report below). 

With respect to the key financial figures, conwert’s target is to conclude the financial year 2012 

with earnings before tax (EBT) of 50 million € (including revaluation result). At the same time, the 

loan-to-value ratio (LTV) is to be reduced to 50 – 55%, while the equity ratio is to increase to roughly 

40%. This will gain conwert more flexibility when it comes to purchases in a capital market 

environment that is still volatile. Based on the recently conducted revaluation of the portfolio and 

the positive market environment in our core regions, we expect a positive revaluation result of 

1–1.5% of conwert’s property assets for 2012, which will contribute meeting the EBT target. 

On the liabilities side of our balance sheet, the year 2012 will be dominated by refinancing the 2014 

convertible bond, which can be re-sold to conwert through a put option in November. The management 

and the Administrative Board have decided to place a bond for retail customers. The placement 

of the bond is expected to take place in June/July 2012. conwert has bought back convertible 

bonds with a nominal value of 45.4 million € in the past years, so that the maximum volume to be 

refinanced will amount to 163 million €. 

In 2011, the buyback of treasury shares was limited because the company’s distributable reserves 

were too low. The Administrative Board and the management thoroughly analysed an increase in 

distributable reserves by decreasing share capital and will propose a decrease of share capital to 

the Annual General Meeting 2012. Provided that the Annual General Meeting adopts this resolution, 

distributable reserves will be increased following a 6-month call to creditors, whereby both 

payouts and share buybacks of up to approx. 427 million € would be theoretically possible. 

The management and the Administrative Board will propose a dividend of 20 cents per share to the 

Annual General Meeting 2012 and – following a capital decrease – a payout of another 15 cents per 

share. The additional payout of 15 cents will be tax-free for some shareholders. 

It is planned that the dividend payout for the financial year 2012 will remain at the level of 2011 due 

to the measures planned and should amount to 20 cents per share.

INTRO | 




POST-BALANCE SHEET DATE REPORT 

At the beginning of the year 2012, conwert Immobilien Invest SE appointed Jasmin Soravia new 

regional manager for Austria. In this function, she is responsible for asset management, facility 

management and construction as well as the establishment of an in-house sales team in Austria. 

With Valentino Donau, a distinguished sales expert joined conwert to lead the newly established 

sales team at the beginning of the year. 

Moreover, due to the strong performance and the good cooperation of conwert and Deutsche Bank 

in the first two DWS residential property funds, the approval was given for the follow-up product 

DWS III at the end of the year 2011. The fund volume for this third joint residential property fund will 

amount to approx. 120 million €. At the beginning of the year 2012, the definition of the seed portfolio 

was started. The preparation of a fund prospectus is scheduled for the months of March and 

April 2012 in close cooperation with the German financial market authority BaFin, so that an approval 

of the prospectus is also expected for the end of April 2012. In May the placement of the shares 

will be started. Based on the experience with the DWS I und DWS II funds, conwert expects the third 

fund to be closed in late 2012. The interim closing date for the first funding of the fund company 

is planned for 30 September 2012. If implemented as planned, the first property investments of 

the fund will be made starting in the fourth quarter of 2012 and subsequently in the year 2013. At 

the same time, conwert will start to take over the asset management and property management 

activities. They will also contribute to achieving the growth targets in the service segment in 2012 

and 2013. In addition to the fund business with DWS, conwert plans to seek and use further growth 

opportunities through additional investments in 2012. 

Vienna, 26 March 2012 

Executive Board of conwert Immobilien Invest SE 

Thomas Doll Franz Jürgen Kelber 

Member Member 

41



42 

_ FFO up 52.0% to 81.3 million € 

_ equity ratio 39.3% 

_ +12.0% rise in rental income

_ non-diluted EPRA NAV 

up 6.2% to 18.35 € / share 

to 210.0 million € 

CONSOLIDATED 

FINANCIAL 

STATEMENTS 

43


ANNUAL FINANCIAL 2011 STATEMENT ANNUAL REPORT 2011 

44 

CONSOLIDATED INCOME STATEMENT 

FOR THE PERIOD FROM 1.1. – 31.12.2011 

(IN € MILLION) 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 



Notes 01.01. – 

31.12.2011 

01.01. – 

31.12.2010 

1. Rental income 7.1 210.0 187.7 

2. Proceeds from the disposal of properties held for sale 243.6 92.6 

3. Proceeds from the disposal of investment properties 369.8 232.5 

4. Revenues from property services 7.2 29.5 34.4 

5. Total revenues 852.9 547.2 

6. Property expenses 7.3 (90.9) (84.9) 

7. Expenses from the disposal of held-for-sale properties (203.3) (69.6) 

8. Expenses from the disposal of investment properties (360.9) (217.8) 

9. Subtotal of 5. to 8. 197.7 174.9 

10. Gains from fair value adjustments 87.7 63.8 

11. Losses from fair value adjustments (79.9) (56.0) 

12. Net gain/(loss) from fair value adjustments (Subtotal of 10. and 11.) 7.8 7.8 

13. Negative fair value adjustments to properties held for sale (7.5) (5.4) 

14. Gain from the acquisition of a company below market value 0.0 95.3 

15. Impairment charge in connection with the acquisition of a company 0.0 (14.9) 

16. Subtotal of 14. and 15. 0.0 80.4 

17. Depreciation, amortisation and other impairment charges 8.2 (5.3) (69.2) 

18. Other operating income 9.1 9.6 

19. Personnel expenses 7.4 (35.3) (38.2) 

20. Other operating expenses 7.5 (46.7) (56.7) 

21. Earnings before interest and tax (EBIT) 119.8 103.2 

22. Finance revenue 7.6 19.5 12.2 

23. Finance costs 7.7 (116.1) (95.1) 

24. Share of profit/(loss) from an associate 5. 0.3 2.1 

26. Financial results (96.2) (91.1) 

27. Earnings before tax (EBT) 23.6 12.1 

28. Income tax expense 7.8. (5.1) 13.5 

29. Profit/(loss) for the year 18.5 25.7 

Thereof attributable to non-controlling interests (4.8) 1.8 

Thereof attributable to equity holders of the parent 23.3 23.8 

Basic earnings per share in € 7.9. 0.28 0.29 

Diluted earnings per share in € 7.9. 0.28 0.29 

Weighted average number of shares outstanding 7.9. 82,779,113 82,496,796 

Equity holders 

of the parent 

01.01. – 31.12.2011 01.01. – 31.12.2010 

Noncontrolling 

interests Total 

Equity holders 

of the parent 


interests Total 

Profit after tax for the year 

Other comprehensive income 

23.3 (4.8) 18.5 23.8 1.8 25.7 

Currency translation differences 0.0 0.0 0.0 (1.4) 0.0 (1.4) 

Tax effect of currency translation 

differences 

0.0 0.0 0.0 0.1 0.0 0.1 

Cash flow hedges (50.1) 0.0 (50.1) (1.4) 0.0 (1.4) 

Tax effect of cash flow hedges 13.3 0.0 13.3 0.4 0.0 0.4 

Other income from an associate (0.1) 0.0 (0.1) (2.0) 0.0 (2.0) 

Other 0.4 0.0 0.4 0.0 0.0 0.0 

Total other comprehensive income (36.4) 0.0 (36.4) (4.3) 0.0 (4.3) 

Total comprehensive income for the period (13.2) (4.8) (18.0) 19.6 1.8 21.4

INTRO | MANAGEMENT REPORT | 

| FINANCIAL STATEMENTS 

CONSOLIDATED FINANCIAL STATEMENTS 

CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2011 


Assets 

A. Non-current assets 

Notes 31.12.2011 31.12.2010 

Investment properties 8.1. 2,424.2 2,701.1 

Goodwill 8.2. 114.8 118.4 

Intangible assets 8.2. 3.7 4.6 

Investment in an associate 5. 9.4 0.0 

Miscellaneous property, plant and equipment 8.3. 1.2 1.6 

Other financial assets 8.10. 4.7 3.7 

Deferred tax assets 8.10. 22.1 18.4 

Total non-current assets 2,580.0 2,847.9 

B. Current assets 

Properties held for sale 8.4. 404.4 537.1 

Trade accounts receivable 8.10. 30.9 56.8 

Other financial assets 8.10. 59.4 40.1 

Other assets 8.5. 5.8 2.7 

Cash and cash equivalents 8.6. 95.8 66.2 

Total current assets 596.4 702.9 

Total assets 3,176.4 3,550.8 

Equity and Liabilities 

C. Equity 8.7. 

Issued capital 853.6 853.6 

Share premium 328.5 329.0 

Treasury shares (41.6) (10.7) 

Retained earnings 203.0 205.9 

Other reserves (106.9) (66.8) 

Equity attributable to equity holders of the parent 1,236.5 1,311.0 

Non-controlling interests 11.8 19.1 

Total equity 1,248.3 1,330.1 

D. Non-current liabilities 

Interest-bearing loans and borrowings 8.10. 1,005.9 1,211.9 

Convertible bond 8.10. 273.8 276.0 

Provisions 0.1 0.1 

Deferred tax liabilities 8.8. 22.7 35.7 

Financing contributions from tenants 8.10. 14.6 16.4 

Other non-current financial liabilities 148.2 102.2 

Total non-current liabilities 1,465.3 1,642.3 

E. Current liabilities 

Current interest-bearing loans and borrowings 8.10. 408.9 456.1 

Bond liabilities 8.10. 0.0 49.8 

Trade accounts payable 13.5 40.7 

Income tax payable 8.3 7.2 

Other current financial liabilities 8.10. 23.7 19.9 

Other current liabilities 8.9. 8.4 4.5 

Total current liabilities 462.7 578.3 

Total equtiy and liabilities 3,176.4 3,550.8 

45



46 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 


Issued 

capital 

Share 

premium 

Treasury 

shares 

Retained 

earnings 

Reserve for 

derivatives 

Other 

reserves 

Subtotal: 

equity holders 

of the parent 


interests 

Balance as of 01.01.2010 853.6 319.7 (48.2) 198.6 (49.7) (4.1) 1,269.9 10.0 1.279.9 

Profit for the period (after tax) 0.0 0.0 0.0 23.8 0.0 0.0 23.8 1.8 25.7 

Other comprehensive income 0.0 0.0 0.0 0.0 (1.7) (2.6) (4.3) 0.0 (4.3) 

Total comprehensive income for 

the period 

0.0 0.0 0.0 23.8 (1.7) (2.6) 19.6 1.8 21.4 

Dividend 0.0 0.0 0.0 (19.8) 0.0 0.0 (19.8) 0.0 (19.8) 

Change in convertible bond 0.0 9.3 0.0 0.0 0.0 0.0 9.3 0.0 9.3 

Other changes in equity 0.0 0.0 0.0 2.7 0.0 0.0 2.7 0.0 2.7 

Issue of treasury shares 0.0 0.0 64.2 0.6 0.0 (8.7) 56.1 0.0 56.1 

Purchase of treasury shares 0.0 0.0 (26.7) 0.0 0.0 0.0 (26.7) 0.0 (26.7) 

Acquisition of non-controlling 

interests 

0.0 0.0 0.0 0.0 0.0 0.0 0.0 9.8 9.8 

Distribution to non-controlling 

interests 

0.0 0.0 0.0 0.0 0.0 0.0 0.0 (2.6) (2.6) 

Balance as of 31.12.2010 853.6 329.0 (10.7) 205.9 (51.4) (15.4) 1.311.0 19.1 1.330.2 

Balance as of 01.01.2011 853.6 329.0 (10.7) 205.9 (51.4) (15.4) 1.311.0 19.1 1.330.2 

Profit for the period (after tax) 0.0 0.0 0.0 23.3 0.0 0.0 23.3 (4.8) 18.5 

Other comprehensive income 0.0 0.0 0.0 0.0 (36.8) 0.4 (36.4) 0.0 (36.4) 

Total comprehensive income for 

the period 

0.0 0.0 0.0 23.3 (36.8) 0.4 (13.2) (4.8) (18.0) 

Dividend 0.0 0.0 0.0 (25.0) 0.0 0.0 (25.0) 0.0 (25.0) 

Change in convertible bond 0.0 (0.6) 0.0 0.0 0.0 0.0 (0.6) 0.0 (0.6) 

Other changes in equity 0.0 0.0 0.0 (1.2) 0.0 (3.7) (4.8) 0.0 (4.8) 

Purchase of treasury shares 0.0 0.0 (30.9) 0.0 0.0 0.0 (30.9) 0.0 (30.9) 

Distribution to non-controlling 

interests 

0.0 0.0 0.0 0.0 0.0 0.0 0.0 (2.3) (2.3) 

Change in non-controlling 

interests 

0.0 0.0 0.0 0.0 0.0 0.0 0.0 (0.2) (0.2) 

Balance as of 31.12.2011 853.6 328.5 (41.6) 203.0 (88.2) (18.8) 1,236.5 11.8 1,248.3 

Equity 

total




CONSOLIDATED CASH FLOW STATEMENT 



Note 

9 

01.01. – 


01.01. – 

31.12.2010 

Profit for the year 18,5 25,7 

Net interest result 96,2 91,1 

Income tax expense 5,1 (13,5) 

Net gain/(loss) from fair value adjustments (7,8) (7,8) 

Impairment charges to held-for-sale properties 7,5 0,0 

Depreciation and amortisation 5,3 84,1 

Other non-cash effects on earnings (6,1) (107,0) 

Gain on the disposal of financial investments (8,8) (14,7) 

Income tax paid (7,5) (9,5) 

Interest received 10,8 12,2 

Subtotal 

Changes in: 

113,2 60,6 

Held-for-sale properties 85,5 13,8 

Receivables and other assets (3,9) 10,5 

Trade accounts payable (22,9) 7,3 

Tax provisions 0,0 1,8 

Other current financial liabilities 14,0 5,0 

Other current liabilities 4,3 (15,5) 

Cash flow from operating activities 190,2 83,4 

Payments for the acquisition of investment properties (55,6) (111,9) 

Payments for the acquisition of other financial assets, 

property, plant and equipment 

(1,2) (1,0) 

Cash inflows from the sale of investment properties 262,1 232,5 

Acquisition of shares in an associate (0,1) 0,0 

Cash outflows for the acquisition of subsidiaries, 

less cash and cash equivalents acquired 

9. (1,1) (115,2) 

Cash inflows from the sale of subsidiaries, 

less cash and cash equivalents acquired 

9. 58,3 0,3 

Cash flow from investing activities 262,4 4,7 

Proceeds from the issue of convertible bonds 0,0 135,0 

Dividend (23,8) (19,8) 

Purchase of treasury shares 8.7 (30,9) (26,7) 

Transaction costs for capital market transactions 0,0 (1,3) 

Dividend paid to non-controlling interests (1,0) 0,0 

Payments resulting from the decrease in 

non-controlling interests 

0,0 (20,8) 

Payments made/received from the change in 

current loans and borrowings 

(85,7) 42,4 


non-current loans and borrowings 

(180,3) (101,4) 


other non-current financial liabilities 

(8,7) 3,2 

Interest paid (91,6) (95,1) 

Cash flow from financing activities (422,0) (84,4) 

Change in cash and cash equivalents 

Cash and cash equivalents 

30,7 3,7 

Cash and cash equivalents at the beginning of the period 66,2 61,6 

Net foreign exchange differences (1,1) 0,9 

65,1 62,5 

Cash and cash equivalents at the end of the period 95,8 66,2 

Change in cash and cash equivalents 30,7 3,7 

47



48 

SEGMENT REPORTING BY REGION 


Portfolio 

Sale of flats 

and buildings 

01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 

2011 2010 2011 2010 

Rental income 211.1 188.5 0.0 0.0 

Proceeds on sale 0.0 0.0 613.3 325.1 

Revenues from property services 0.0 0.0 0.0 0.0 

Revenues 211.1 188.5 613.3 325.1 

Property expenses (97.9) (90.4) 0.0 0.0 

Expenses from the disposal of properties 0.0 0.0 (564.3) (287.4) 

Net gain/(loss) from fair value adjustments 6.1 1.3 0.0 0.0 

Negative fair value adjustments to properties held for sale (7.5) (5.8) 0.0 0.0 

Gain from the acquisition of a company below market value 0.0 95.3 0.0 0.0 

Impairment charge in connection with the acquisition of a company 0.0 0.0 0.0 0.0 

Depreciation, amortisation and other impairment charges (0.7) 0.0 0.0 0.0 

Personnel expenses 0.0 (0.0) 0.0 0.0 

Other operating income 8.5 8.4 0.0 0.0 

Other operating expenses (43.2) (51.1) (21.2) (15.5) 

Earnings before interest and taxes (EBIT) 76.4 146.3 27.9 22.2 

Financial results (77.0) (71.4) 0.0 0.0 

Earnings before tax (EBT) (0.6) 74.9 27.9 22.2 

Property assets 2,816.4 3,228.6 0.0 0.0 

Interest-bearing financial liabilities related to investment properties 1,615.3 2,181.4 0.0 0.0 

Investment properties 69.0 865.3 0.0 0.0 

Austria 

01.01. – 31.12. 01.01. – 31.12. 

2011 2010 

Rental income 82.5 75.2 

Proceeds on sale 309.0 222.0 

Revenues from property services 37.3 49.0 

Revenues 428.8 346.2 

Property expenses (35.7) (34.0) 

Expenses from the disposal of properties (282.8) (195.8) 

Net gain/(loss) from fair value adjustments (1.8) (0.7) 

Negative fair value adjustments to properties held for sale (6.8) (4.4) 

Gain from the acquisition of a company below market value 0.0 95.3 

Impairment charge in connection with the acquisition of a company 0.0 (14.9) 

Depreciation, amortisation and other impairment charges 

Personnel expenses 

(4.8) (58.9) 

Other operating income (13.1) (16.1) 

Other operating expenses 7.5 4.9 

Earnings before interest and taxes (EBIT) (42.7) (52.4) 

Financial results 48.6 69.2 

Earnings before tax (EBT) (27.0) (39.8) 

Property assets 21.6 29.4 

Interest-bearing financial liabilities 1,361.7 1,623.7 

related to investment properties 866.9 1,028.8 

Investment properties 34.9 733.6 

Additional information is provided under note 6. 

SEGMENT REPORTING BY SECTOR OF BUSINESS 

(IN € MILLION)




Germany Other countries Group eliminations Group 

01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 

2011 2010 2011 2010 2011 2010 2011 2010 

122.6 107.7 6.0 5.6 (1.1) (0.8) 210.0 187.7 

292.9 102.4 11.5 0.8 0.0 0.0 613.3 325.1 

55.2 35.5 1.8 1.9 (64.8) (52.0) 29.5 34.4 

470.7 245.6 19.3 8.3 (65.9) (52.8) 852.9 547.2 

(59.7) (54.6) (2.6) (1.7) 7.0 5.5 (90.9) (84.9) 

(269.8) (90.9) (11.7) (0.7) 0.0 0.0 (564.3) (287.4) 

11.3 7.4 (3.4) (5.4) 1.7 6.5 7.8 7.8 

(0.7) (0.5) 0.0 (0.8) 0.1 0.4 (7.5) (5.4) 

0.0 0.0 0.0 0.0 0.0 0.0 0.0 95.3 

0.0 0.0 0.0 0.0 0.0 0.0 0.0 (14.9) 

(0.4) (10.3) (0.0) 0.0 0.0 0.0 (5.3) (69.2) 

(19.5) (17.2) (0.9) (1.1) (1.8) (3.9) (35.3) (38.2) 

1.5 2.2 0.2 2.5 (0.1) 0.0 9.1 9.6 

(51.3) (35.9) (4.7) (3.7) 52.0 35.3 (46.7) (56.7) 

82.1 45.8 (3.9) (2.6) (7.0) (9.1) 119.8 103.2 

(49.5) (32.8) (2.5) (2.3) (17.3) (16.4) (96.2) (91.1) 

32.6 13.0 (6.4) (4.9) (24.3) (25.5) 23.6 12.2 

1,304.0 1,439.8 162.9 174.8 0.0 0.0 2,828.6 3,238.3 

702.6 822.9 52.2 58.4 66.9 83.7 1,688.6 1,993.8 

33.5 111.3 6.0 20.4 0.0 0.0 74.4 865.3 

Subtotal 

property project 

companies Property services 

Group 

eliminations Group 

01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 01.01. – 31.12. 

2011 2010 2011 2010 2011 2010 2011 2010 

211.1 188.5 0.0 0.0 (1.1) (0.8) 210.0 187.7 

613.3 325.1 0.0 0.0 0.0 0.0 613.3 325.1 

0.0 0.0 94.4 86.4 (64.8) (52.0) 29.5 34.4 

824.4 513.6 94.4 86.4 (65.9) (52.8) 852.9 547.2 

(97.9) (90.4) 0.0 0.0 7.0 5.5 (90.9) (84.9) 

(564.3) (287.4) 0.0 0.0 0.0 0.0 (564.3) (287.4) 

6.1 1.3 0.0 0.0 1.7 6.5 7.8 7.8 

(7.5) (5.8) 0.0 0.0 0.1 0.4 (7.5) (5.4) 

0.0 95.3 0.0 0.0 0.0 0.0 0.0 95.3 

0.0 0.0 0.0 (14.9) 0.0 0.0 0.0 (14.9) 

(0.7) 0.0 (4.6) (69.2) 0.0 0.0 (5.3) (69.2) 

0.0 (0.0) (33.5) (34.3) (1.8) (3.9) (35.3) (38.2) 

8.5 8.5 0.7 1.1 (0.1) 0.0 9.1 9.6 

(64.3) (66.6) (34.4) (25.4) 52.0 35.3 (46.7) (56.7) 

104.3 168.5 22.5 (56.4) (7.0) (9.1) 119.8 103.2 

(77.0) (71.4) (2.0) (3.3) (17.3) (16.4) (96.2) (91.1) 

27.3 97.1 20.5 (59.7) (24.3) (25.5) 23.6 12.2 

2,816.4 3,228.6 12.2 9.6 0.0 0.0 2,828.6 3,238.3 

1,615.3 2,181.4 6.5 4.6 66.9 83.7 1,688.6 1,993.8 

69.0 865.3 5.3 0.0 0.0 0.0 74.4 865.3 

49



50




CONTENT 

Notes 

1. Corporate Information 

2. Significant Accounting Policies 

2.1. General principles 

2.2. Changes in accounting principles 

2.3. Basis of consolidation 

2.4. Summary of significant accounting policies 

3. Accounting Judgments, Estimates and Assumptions 

4. Investments in Joint Ventures 

5. Investment in an Associate 

5.1. Investment in an associate during 2011 

5.2. Investment in an associate during 2010 

6. Segment Reporting 

7. Notes to the Income Statement 

7.1. Property revenues and expenses 

7.2. Revenues from property services 

7.3. Other property expenses 

7.4. Personnel expenses 

7.5. Other operating expenses 

7.6. Finance revenue 

7.7. Finance costs 

7.8. Income tax expense 

7.9. Earnings per share 

8. Notes to the Balance Sheet 

8.1. Investment properties 

8.2. Intangible assets 

8.3. Other property, plant and equipment 

8.4. Properties held for sale 

8.5. Other assets 

8.6. Cash and cash equivalents 

8.7. Equity 

8.8. Deferred taxes 

8.9. Other current liabilities 

8.10. Financial instruments 

9. Notes to the Cash Flow Statement 

10. Operating Leases 

10.1. Claims arising from operating leases 

10.2. Other financial obligations arising from operating leases 

11. Contingent Liabilities and Other Financial Obligations 

12. Objectives and Policies of Financial Risk Management 

13. Related Party Transactions 

13.1. Provision of services 

13.2. Acquisition and sale of properties and other assets 

13.3. Other services 

13.4. Remuneration of persons in key positions 

14. Information on Bodies of the Corporation 

15. Events after the Balance Sheet Date 

16. Group Companies 


52 

52 

52 

53 

56 

57 

67 

68 

68 

68 

70 

71 

72 

72 

72 

73 

73 

74 

75 

75 

75 

76 

77 

77 

86 

90 

90 

91 

91 

91 

93 

93 

94 

105 

106 

106 

106 

106 

106 

110 

110 

110 

110 

110 

111 

111 

112 

121 

51



52 

1. CORPORATE INFORMATION 

conwert Immobilien Invest SE is a European stock company that is listed in the Prime Market 

segment of the Vienna Stock Exchange. The registered headquarters of conwert Immobilien Invest 

SE are located at Albertgasse 35, 1080 Vienna, Austria. The company is included in the company 

register of the commercial court of Vienna under number FN 212163f. The consolidated financial 

statements of the conwert Group for the financial year ending 31 December 2011 were completed 

and signed by the Executive Directors of conwert Immobilien Invest SE on 26 March 2012 and released 

by the Administrative Board. conwert Immobilien Invest SE is the controlling parent company 

as well as the parent company in Austria. 

The business activities of the conwert Immobilien Group (the “Group“) are focused on property 

investments, in particular the acquisition, development, rental and best possible realisation of properties 

in order to optimise investments. 

These corporate goals are reflected in the Group’s three strategic fields of business: 

+ Portfolio 

+ Sale of flats and buildings 

+ Property services 

In the area of property services, the conwert Group concentrates on the following: 

+ Management of property companies 

+ Facility management 

+ Brokerage and sales 

+ Development and construction management 

2. SIGNIFICANT ACCOUNTING POLICIES 

2.1. GENERAL PRINCIPLES 

The Executive Directors of the Group were responsible for the preparation of these annual financial 

statements in accordance with the guidelines set forth in International Financial Reporting 

Standards (“IFRS“), as adopted by the European Union (“EU”). The requirements of the applied 

standards and interpretations were met in full. Therefore, the consolidated financial statements 

present a true and fair view of the financial position, financial performance and cash flows of the 

conwert Group. 

The financial statements of the companies included in the consolidation were prepared on the basis 

of the uniform accounting principles established by the conwert Group. The balance sheet date 

for these companies is generally 31 December 2011. Interim financial statements were prepared 

for the companies that did not use 31 December 2011 as their balance sheet date. The consolidated 

financial statements were prepared on a historical cost basis, which was modified to include the 

measurement of land and buildings at fair value in accordance with IAS 40 as well as the measurement 

of certain financial instruments at fair value. The income statement was prepared in accordance 

with the nature of expense method under which “total costs” are shown. 

The consolidated financial statements are prepared in million Euros (“€ million“). Numerous 

amounts and percentage rates in the consolidated financial statements were rounded, and totals 

can therefore differ arithmetically from the sum of the individual amounts. 

The Group had a workforce of 660 (2010: 656) full-time equivalent (FTE) employees as of 

31 December 2011 at over 53 (2010: 50) locations in six countries (2010: six). The workforce as of 

the balance sheet date comprised 651 (2010: 646) salaried and 9 (2010: 10) wage employees.




Notes 

2.2. CHANGES IN ACCOUNTING PRINCIPLES 

The accounting principles that formed the basis for the consolidated financial statements as of 

31 December 2010 were applied without change to the consolidated financial statements as of 

31 December 2011, with the exception of the changes described below. 

The conwert Group applied all applicable amendments to existing IAS as well as the new IFRS 

and the interpretations issued by the International Financial Reporting Interpretation Committee 

(“IFRIC“) and Standard Interpretation Committee (“SIC“), as adopted by the EU, which required 

mandatory application as of 31 December 2011. conwert generally applies new standards and 

interpretations as well as changes to existing standards only when their application becomes 

mandatory. 

The following new or revised IFRS regulations require mandatory application in the 2011 financial 

year (if not applied at an earlier date in 2010), and were therefore applied by the Group for the first 

time in the reporting year. These new standards and interpretations only had an impact on the 

consolidated financial statements as of 31 December 2011 if they are designated with “yes“ in the 

following table. 

Rules 

Effective 

date 1) 

Impact on 

consolidated 

fi nancial 

statements 

IFRS 

IFRS 1 Limited Exemption from Comparative IFRS 7 Disclosures for First-time 

Adopters 

01.07.2010 no 

Various 

IAS 

Improvements to IFRSs 2010 01.01.2011 yes 

IAS 32 Classifi cation of Issued Rights 01.02.2010 no 

IAS 24 Related Party Disclosures (revised 2009) 01.01.2011 no 

IFRIC 

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments 01.07.2010 no 

IFRIC 14 Advance Contributions for Minimum Funding Requirements 01.01.2011 no 

1) Applicable to fi nancial years beginning on or after the indicated date 

If the application of a standard or an interpretation has an impact on the presentation of the 

financial position, financial performance or cash flows of the Group, the resulting effects are 

explained below. 

IMPROVEMENTS TO IFRS 2010 

The Improvements to IFRSs 2010 comprise changes to various IFRS and represent a vehicle for 

making non-urgent but necessary amendments to the IFRS regulations. 

The changes to IFRS 7 can lead to additional disclosures on collateral held, but also eliminate a 

number of previously required disclosures. This amendment is designed to simplify the disclosures 

on collateral held by reducing the scope of the required information and to improve the 

disclosures by adding further qualitative information. 

The changes to IAS 34 could lead to more detailed disclosures in the notes for interim financial 

reporting. 

The other changes included in the Improvements to IFRSs 2010 had no effect on the accounting 

principles applied by the Group or the presentation of the Group’s financial position, financial 

performance or cash flows. 

53



54 

The following new or revised standards and interpretations have been announced by the IASB and 

adopted in full or in part by the EU, but do not require mandatory application for the 2011 financial 

year. These standards and interpretations were not applied on an early basis by the conwert Group. 

Rules 

Effective 

date 1) 

Impact on 

consolidated 

fi nancial 

statements 

Not yet applicable IFRS/IFRIC 

IFRS 7 Financial Instruments: Disclosures 01.07.2011 no 

IAS 27 Changes: Separate Financial Statements 01.01.2013 no 

IAS 28 Changes: Investments in Associates 01.01.2013 no 

IFRS 7 Changes: Financial Instruments: Disclosures 01.07.2011 no 

IFRS 9 Financial Instruments 01.01.2015 no 

IFRS 10 Consolidated Financial Statements 01.01.2013 no 

IFRS 11 Joint Arrangements 01.01.2013 no 

IFRS 12 Disclosure of Interests in Other Entities 01.01.2013 no 

IFRS 13 Fair Value Measurement 01.01.2013 no 

1) Applicable to fi nancial years beginning on or after the indicated date 

IAS 27 “Consolidated and Separate Financial Statements“ will be renamed “Separate Financial 

Statements“ and, in the future, will only include rules for the preparation of separate financial 

statements. However, the existing guidelines for separate financial statements will remain 

unchanged. 

IAS 28 “Investments in Associates“ will be amended through the transfer of disclosure requirements 

for associated companies from this standard to IFRS 12. 

The changes to IFRS 7 “Financial Instruments: Disclosures“ introduce additional disclosure requirements 

for the derecognition of financial assets. This amendment defines further disclosure 

requirements for newly created liabilities arising from financial assets that are not completely 

derecognised despite the transfer of rights or an obligation to pass on incoming payments. In particular, 

the new disclosure requirements focus on whether the financial asset can still be utilised 

without limitation by the entity that continues to recognise the asset or whether the acquiring party 

has any claims to the financial asset. These changes have an effect on companies through sales, 

securitisation, factoring and other transactions that transfer financial assets to another party. 

Since the conwert Group has not carried out any such transactions to date, no additional disclosure 

requirements are expected. 

IFRS 9 “Financial Instruments“ changes the rules for the classification and measurement of 

financial instruments and will replace IAS 39. The new standard assigns all financial assets to two 

classification categories – financial assets carried at amortised cost and financial assets carried at 

fair value. New requirements are also introduced for the recognition of financial liabilities, and the 

rules for derecognising financial assets and liabilities will be transferred to IAS 39. Plans call for 

the extension of IFRS 9 to include new regulations for the impairment of financial assets carried at 

amortised cost and the inclusion of hedge accounting. The future effects of IFRS 9 on the conwert 

Group must be evaluated, and EU approval is still outstanding.




Notes 

IFRS 10 “Consolidated Financial Statements“ will replace IAS 27 ‘Consolidated and Separate 

Financial Statements‘ and SIC 12 ‘Consolidation – Special Purpose Entities‘ and includes guidelines 

for control and consolidation. The definition of control will be clarified to include the possibility of 

exercising control over activities that can lead to variable cash flows from the entity. Cash flows 

can be positive, negative or both. The consolidation requirements remain unchanged. In the conwert 

Group, the individual investments must be evaluated on the basis of this new definition of 

control but no major changes are expected. This new standard has not yet been adopted by the EU. 

IFRS 11 “Joint Arrangements“ defines two types of joint arrangements: joint operations and joint 

ventures. A joint operation represents an arrangement under which the parties with joint control 

have direct rights to the related assets the liabilities. A party to a joint operation recognises its 

share based on its involvement in the joint operation and not based on its holding. In contrast, 

a party to a joint venture has no rights to individual assets or liabilities. Instead, parties to joint ventures 

receive a share of the net assets and, in this way, a share of the results generated by the joint 

venture from its activities. Joint venture are accounted for by applying the equity method; proportionate 

consolidated is no longer permitted by IFRS 11. The conwert Group must review its existing 

or recently concluded agreements to determine whether it has invested in a joint arrangement or 

a joint venture under the new standard. This new standard has not yet been adopted by the EU. 

IFRS 12 “Disclosure of Interests in Other Entities“ defined the required disclosures for companies 

that have an interest in other entities. The new standard requires companies to disclose information 

that enables the users of financial statements to evaluate the nature of and risks associated 

with these interests and the financial effects of interests in subsidiaries, associates, joint arrangements 

and unconsolidated structured entities (special purposes entities). This new standard has 

not yet been adopted by the EU. 

IFRS 13 “Fair Value Measurement“ defines fair value and expands the required disclosures on fair 

value. Fair value is defined as the price that would be received on the sale of an asset or paid on the 

transfer of a liability in a transaction between independent market participants on the measurement 

date. However, the standard does not provide any guidelines on the cases for which fair value 

is to be used. Since nearly all companies – and therefore also the conwert Group – use measurement 

at fair value, these new requirements must be met. The related effects on the conwert Group 

will focus primarily on the increased disclosure requirements. This new standard has not yet been 

adopted by the EU. 

The conwert Group does not expect any material effects from the initial application of the new or 

revised standards or interpretations on the presentation of its financial position, financial performance 

or cash flows. 

55



56 

2.3. BASIS OF CONSOLIDATION 

2.3.1. INTRODUCTION 

International Financial Reporting Standards require the application of IFRS 3 to business combinations. 

Relevant information is provided under note 2.4.2. When a company acquires a group of 

assets or net assets that do not constitute a business, it must allocate the cost of the acquisition 

between the individual identifiable assets and liabilities of the group based on their relative fair 

value at the acquisition date (IFRS 3.2(b)). All acquisitions of property project companies in 2011 

represented the purchase of individual assets by conwert. These transactions are not considered 

business combinations in the sense of IFRS 3 because the acquired companies only exercise property 

ownership functions and, for this reason, are not classified as integrated groups of activities 

or assets. These companies were consolidated as of the acquisition date in accordance with 

IFRS 3.2(b) and IAS 27 and deconsolidated as of the date on which control ceases to exist. 

In 2010 all acquisitions of property project companies, with the exception of the ECO Group, 

represented the purchase of individual assets by conwert and were not considered business combinations 

in the sense of IFRS 3. 

2.3.2. CONSOLIDATION RANGE 

The consolidated financial statements include conwert Immobilien Invest SE as well as the subsidiaries 

under its control. Subsidiaries are fully consolidated beginning on the date of acquisition, 

i.e. the date on which the conwert Group obtains control. Consolidation ends as soon as the parent 

company loses control. 

A total of 109 domestic (2010: 87) and 159 foreign (2010: 144) companies were included through 

full or proportionate consolidation. An overview of the companies in the conwert Group is provided 

under note 16. 

2.3.3. CONSOLIDATION DATE 

In accordance with the principle of a uniform balance sheet date, the consolidated financial statements 

are prepared as of the same balance sheet date as the financial statements of the parent 

company, conwert. The individual financial statements of all companies included in the consolidation 

were prepared as of the balance sheet date used for the consolidated financial statements or 

interim financial statements were prepared. 

2.3.4. CONSOLIDATION METHODS 

All transactions – receivables and liabilities, revenues, other income and expenses – between companies 

included through full or proportionate consolidation were eliminated. 

For each business combination, the acquirer measures the interest in the acquired company, 

excluding non-controlling interests, at fair value or at the proportionate share of the identifiable 

net assets in the acquired company. Furthermore, a proportionate share of profit or loss is also 

attributed to the non-controlling interests. Non-controlling interests are presented separately on 

the consolidated income statement and the consolidated balance sheet. On the consolidated balance 

sheet, non-controlling interests are reported under equity, but presented separately from 

the equity attributable to the equity holders of the parent. Any change in an investment in a subsidiary 

that does not lead to the loss of control, is accounted for as a transaction with owners in their 

capacity as owners. Therefore, these transactions cannot lead to the recognition of goodwill or a 

gain or loss. Differences between the consideration received and the carrying amount of the noncontrolling 

interests are consequently recognised directly in equity. 

The conwert Group is a partner in various joint ventures. A joint venture is defined as a contractual 

arrangement between two or more parties to undertake an economic activity that is subject to joint 

control. A joint venture is created by the founding of an independent entity, in which each partner 

holds an investment. Shares in joint ventures are included in the financial statements through proportionate 

consolidation, whereby the appropriate percentage of the assets, liabilities, income and 

expenses of the joint venture are combined with the respective items in the consolidated financial 

statements. The financial statements of joint ventures are prepared on the basis of consistent 

accounting and valuation methods as of the same balance sheet date as the financial statements 

of the parent company.




Notes 

2.3.5. FOREIGN CURRENCY TRANSLATION 

BUSINESS TRANSACTIONS IN A FOREIGN CURRENCY 

The individual Group companies record business transactions in a foreign currency at the reference 

exchange rate in effect on the date of the transaction. Monetary assets and liabilities are 

translated into the Euro using the relevant reference rates issued by the European Central Bank 

for the balance sheet date. Any resulting foreign exchange gains and losses are recognised to 

profit or loss for the financial year. 

TRANSLATION OF INDIVIDUAL FINANCIAL STATEMENTS PREPARED IN A FOREIGN CURRENCY 

The Euro is the reporting currency and the functional currency for the Group companies in Austria 

and countries that are members of the European Economic and Currency Union. In cases where 

consolidated subsidiaries prepare their financial statements in a foreign currency, these financial 

statements are translated into the Euro in accordance with IAS 21. The assets, liabilities and contingent 

liabilities are translated at the average rate for the balance sheet date, while equity – with 

the exception of income and expenses recognised directly in equity – are translated at historical 

exchange rates. Income and expenses are generally translated at the exchange rate in effect on the 

date of the transaction. Since these currencies are not subject to major fluctuations, an average 

annual exchange rate was used as an approximate value to simplify the calculation. Any foreign 

exchange gains and losses are recorded under other comprehensive income. 

2.4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

2.4.1. PROPERTIES 

2.4.1.1. INVESTMENT PROPERTIES 

Investment properties are initially recognised at cost. The measurement of these assets in subsequent 

periods reflects fair value, whereby gains or losses from changes in fair value are recognised 

to profit or loss. Objects are classified at the time of acquisition as investment properties 

or properties held for sale based on their expected return and future strategic orientation. If an 

investment property is reclassified as held for sale, the deemed cost for subsequent accounting 

equals the fair value at the date of the change in use. Investment property is derecognised when it 

is sold or can no longer be used on a lasting basis, and no future economic benefits are expected 

from its disposal. Properties are reclassified from investment property to property held for sale if 

there is a change in use. 

Borrowing costs incurred during the development of investment properties are capitalised at an 

amount equal to the direct interest expense. Additional details are provided under note 8.1. 

2.4.1.2. PROPERTIES HELD FOR SALE 

Properties held for sale are initially recognised at cost. Investment properties are only reclassified 

to this category when there is a change in use. Reclassified investment properties are carried at 

fair value as of the date of reclassification. In accordance with IAS 2, the subsequent measurement 

of these assets reflects the lower of acquisition or production cost and the net realisable value. 

Properties available for sale are derecognised when the risks and rewards are transferred. Additional 

details are provided under note 8.4. 

57



58 

2.4.2. BUSINESS COMBINATIONS AND GOODWILL 

The acquisition of subsidiaries and business operations is accounted for using the purchase method. 

This method includes the recognition of identifiable assets (including intangible assets not previously 

recognised) and liabilities (including contingent liabilities, but excluding future restructuring 

costs) in the acquired entity at fair value. The cost of a business combination represents the total 

compensation transferred, measured at fair value on the acquisition date, and any non-controlling 

interests in the acquired company. The costs incurred for a business combination are recognised 

as expenses and reported as transaction costs. 

The goodwill arising from a business combination is initially recognised at cost, which equals the 

excess of the compensation transferred and the amount of any non-controlling interests over the 

identifiable assets acquired and liabilities assumed by the Group. If this compensation is less than 

the fair value of the net assets in the acquired subsidiary, the difference is recognised to profit or 

loss. 

The subsequent measurement of goodwill reflects cost less any accumulated impairment losses. 

For the purpose of impairment testing, goodwill acquired in a business combination is allocated 

– beginning on the acquisition date – to the cash-generating units or group of cash-generating 

units that is expected to benefit from the synergies of the business combination. This allocation is 

made regardless of whether other assets or liabilities from the acquired company are assigned to 

this cash-generating unit or group of cash-generating units. Additional details on this subject are 

provided in note 8.2. 

2.4.3. INTANGIBLE ASSETS 

Intangible assets acquired separately are initially recognised at purchase or production cost. The 

cost of intangible assets acquired in a business combination reflects fair value as of the date of 

acquisition. Intangible assets are measured in subsequent periods at purchase or production cost 

less accumulated amortisation and any accumulated impairment losses. Amortisation is based on 

the useful economic life of the asset. The amortisation period and the amortisation method for an 

intangible asset with a finite useful life are reviewed at least annually at the end of the financial 

year. Changes in the expected useful life or the expected pattern of consumption of future economic 

benefits embodied in the intangible asset are reflected in a change in the amortisation period 

and/or the amortisation method, and are treated as changes in accounting estimates. The amortisation 

expense for intangible assets with finite useful lives is recognised to profit or loss under 

the position “depreciation, amortisation and other impairment charges” that reflects the function 

of the asset. Gains or losses arising from the derecognition of intangible assets are measured as 

the difference between the net disposal proceeds and the carrying amount of the asset, and are recognised 

to profit or loss in the period the asset is derecognised. Additional details on this subject 

are contained in note 8.2. 

Scheduled, straight-line amortisation is based on the following useful lives: 

Software: 3 years 

Customer relationships and management contracts: 5 – 11 years




Notes 

2.4.4. PROPERTY, PLANT AND EQUIPMENT 

Property, plant and equipment are carried at acquisition or production cost, less accumulated 

systematic depreciation and accumulated impairment losses. 

Ordinary straight-line depreciation is based on the following useful lives: 

Customer relationships and management contracts: 5 – 10 years 

2.4.5. LEASES 

The conwert Group serves as a lessor when it rents the properties it owns to tenants, and also acts 

as a lessee when it carries out sale and leaseback transactions. 

The determination of whether an arrangement represents a lease is based on the substance of the 

arrangement on the date it is concluded. This determination requires an estimation of whether the 

fulfilment of the arrangement is dependent on the use of a specific asset or assets and whether the 

arrangement conveys a right to use the assets. A renewed evaluation after the start of the lease is 

only possible if the requirements defined in IFRIC 4 are met. 

Leases that transfer all risks and rewards incidental to ownership are classified as finance leases. 

Leases that do not transfer all risks and rewards incidental to ownership from the Group to the 

lessee are classified as operating leases and accounted for accordingly. 

On sale and leaseback transactions that are classified as a finance lease under IFRS, the excess of 

the sale proceeds over the carrying amount is not recognised immediately as income, but is deferred 

and recognised over the term of the lease. 

The classification of leases for land and buildings involves the separate treatment of the land and 

building components. Whenever necessary for the classification and measurement of a lease, the 

minimum lease payments are allocated between the land and building components in proportion 

to the respective fair values of the payments made for the rights to these assets at the start of the 

lease. The land and building components are classified as an operating lease or a finance lease in 

accordance with the criteria defined in IAS 17. 

Separate measurement of the land and building components is not required when the lessee’s 

interest in the land and building represents investment property as defined in IAS 40 and the fair 

value model is adopted. 

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis 

over the term of the lease. However, if the transfer of ownership at the end of the lease is not 

reasonably certain, the leased asset is depreciated over the shorter of the estimated useful life and 

the lease term. 

An overview of finance lease liabilities and their terms is provided in note 8.10. 

2.4.6. IMPAIRMENT OF NON-FINANCIAL ASSETS 

The conwert Group examines its assets for signs of impairment as of each reporting date. If such 

signs have been identified or when annual impairment testing is required, the Group estimates the 

recoverable amount of the relevant asset. The recoverable amount equals the higher of the fair 

value of the asset or cash-generating unit less the costs to sell and the value in use. 

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The following additional criteria are applied to specific assets: 

GOODWILL 

Goodwill is tested for impairment at least once each year. An impairment test is also performed 

when events or circumstances indicate that the carrying amount may be impaired. 

For the purpose of impairment testing, goodwill is allocated to cash-generating units. Impairment 

is determined by establishing the recoverable amount of the cash-generating unit to which the 

goodwill is allocated. The recoverable amount equals the relevant value in use, e.g. the present 

value of the future cash flows expected to be derived from the cash-generating unit. If the recoverable 

amount falls below the carrying amount of the cash-generating unit, an impairment loss 

is recognised; this impairment loss may not be reversed in a subsequent accounting period. Cashgenerating 

units are created by combining assets that generate independent cash flows. Additional 

information on this subject is provided under note 8.2. 

DEPRECIABLE, NON-CURRENT ASSETS 

If there are objective indications that a depreciable non-current asset is impaired, an impairment 

loss is recognised equal to the difference between the carrying amount of the assets and its 

recoverable amount. The recoverable amount is determined on the basis of the value in use, i.e. the 

present value of the future cash flows expected to be derived from the asset. The carrying amount 

of the asset is then reduced through an adjustment account, and the impairment loss is recognised 

to profit or loss. 

If the amount of the impairment loss declines in subsequent reporting periods and this decline can 

be objectively attributed to circumstances that occurred after the recognition of the impairment 

loss, the previously recognised impairment loss is reversed (unless the asset represents goodwill). 

. However, the new carrying amount of the asset may not exceed depreciated cost at the time of the 

reversal. The reversal of the impairment loss is recognised to profit or loss. 

2.4.7. CASH AND CASH EQUIVALENTS 

Deposits with financial institutions are carried at their value as of the balance sheet date. Cash 

and cash equivalents as shown on the Group cash flow statement include the amounts shown for 

these items. 

2.4.8. FINANCIAL INSTRUMENTS 

Financial instruments are classified as financial assets or financial liabilities based on the economic 

characteristics of the relevant contract. Financial assets and liabilities are only netted out 

when there is a legal right to offset these amounts and plans call for settlement on a net basis or 

the settlement of the related liability concurrently with the realisation of the related asset. 

The fair value of financial investments that are traded in organised markets is determined by the 

quoted market bid price as of the balance sheet date. The fair value of financial investments for 

which there is no active market is established through valuation methods. These methods include 

recent business transactions between expert, willing and independent business partners as well 

as comparison with the current market value of a similar financial instrument and the analysis of 

discounted cash flows. 

The interest, dividends, gains and losses arising from these financial instruments are reported as income 

or expenses (excl. gains and losses on derivatives used for cash flow hedging – see note 8.10.3).




Notes 

2.4.8.1. FINANCIAL ASSETS 

INITIAL RECOGNITION 

Financial assets as defined in IAS 39 are classified on the basis of their individual characteristics as 

financial assets at fair value through profit or loss, as loans and receivables, as held-to-maturity 

investments or as available-for-sale financial assets. The initial recognition of financial assets 

reflects fair value. The fair value of investments that are not valued through profit or loss also 

includes transaction costs that are directly related to the purchase of the asset. The Group decides 

whether a contract contains an embedded derivative when it becomes a party to the contract. The 

embedded derivative is separated from the host contract if the contract is not recognised at fair 

value through profit or loss and an analysis shows that the economic characteristics and risks of 

the embedded derivative are not closely related to the economic characteristics and risks of the 

host contract. 

Financial assets are assigned to the appropriate valuation category at the time of initial recognition. 

All regular way purchases and sales of financial assets are recognised as of the trading 

date, which is the date the Group commits to purchase or sell the asset. Regular way purchases or 

sales represent purchases or sales of financial assets that require delivery of the asset within the 

period generally established by regulations or convention in the marketplace. 

SUBSEQUENT MEASUREMENT 

The subsequent measurement of financial assets is dependent on their classification, and is 

described below. 

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 

This group of assets comprises financial assets held for trading. Financial assets are classified 

as held for trading when the Group acquires the asset with the intention to resell it in the near 

future. Derivatives are also classified as held for trading, with the exception of derivatives that are 

designated as a financial guarantee contract or effective hedging instrument. Gains or losses on 

financial assets held for trading are recognised to profit or loss. 

LOANS AND RECEIVABLES 

Loans and receivables are non-derivative financial assets with fixed or determinable payments that 

are not quoted in an active market. After initial recognition, loans and receivables are carried at 

amortised cost less any adjustments to reflect impairment. 

AVAILABLE-FOR-SALE FINANCIAL ASSETS 

Available-for-sale financial assets are non-derivative financial assets that are designated as 

available-for-sale and not classified under one of the three above-mentioned categories. After 

initial recognition, available-for-sale financial assets are measured at fair value with unrealised 

gains or losses principally recognised to other comprehensive income. When these assets are 

sold, the accumulated gains and losses previously recognised in equity are recognised to profit or 

loss. Interest paid on or received from financial assets is included under finance revenue or finance 

costs. The effective interest rate method is applied. Dividends from financial investments are 

recognised to profit or loss as “dividends received” when the Group’s right to receive the payment 

is established. 

Other non-current financial assets represent equity instruments for which there is no active 

market price and whose fair value cannot be reliably determined. These assets are therefore 

carried at cost. 

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DERECOGNITION OF FINANCIAL ASSETS 

An asset is derecognised when the contractual rights to the cash flows arising from the asset 

expire. An asset is also derecognised when all major risks and rewards associated with the asset 

are transferred. 

IMPAIRMENT OF FINANCIAL ASSETS 

As of every balance sheet date, the conwert Group tests its financial assets or groups of assets to 

identify any objective evidence of impairment. A financial asset or group of financial assets is only 

considered to be impaired when one or more events have occurred since the initial recognition 

of the asset (a “loss event“) and this loss event has an impact on the estimated future cash flows 

of the financial asset or group of financial assets that can be reliably estimated. Evidence of impairment 

includes the following: signs that a debtor or group of debtors has significant financial 

difficulties; default or delinquency in interest or principal payments; the probability of bankruptcy 

or other financial reorganisation; and when observable data indicates there will be a measurable 

decrease in estimated future cash flows, e.g. due to an increase in delayed payments or economic 

conditions that correlate with default. 

An impairment charge is recognised to receivables through a valuation adjustment account when 

there are substantial objective indications that the Group will not be able to realise the full amount 

of the receivables. The impairment charge is calculated as the difference between the carrying 

amount and the present value of expected future cash flows. Material financial assets are tested 

individually for impairment, while financial assets that are not considered to be material are tested 

individually or together. If the conwert Group determines that there are no indications of impairment 

to an individually tested financial asset – whether the asset is considered material or not – 

the asset is aggregated together with other financial assets that have similar credit risk profiles, 

and the group of assets is subsequently tested for impairment. In cases where the impairment 

tests of individual assets led to the recognition of an impairment charge, these assets are not 

included in any further aggregated testing. 

If the estimated impairment increases or decreases in a later accounting period due to another 

event, the previously recognised impairment charge is increased or decreased through the valuation 

adjustment account with a corresponding recognition to profit or loss. 

Receivables are derecognised when they are classified as uncollectible. If a derecognised receivable 

is subsequently reclassified as collectible because of an event that occurred after derecognition, 

the relevant amount is immediately recognised to profit or loss. 

The conwert Group also tests available-for-sale financial assets for objective signs of impairment 

as of every balance sheet date. For available-for-sale equity instruments, a significant or lasting 

decline in the fair value of the instrument below its acquisition cost would represent an objective 

indication of impairment. If there are any indications of impairment, an impairment charge is recognised 

to profit or loss at an amount equal to the difference between the acquisition cost and the 

current fair value. 

Debt instruments are considered to be impaired when the expected future cash flows are likely to 

be cancelled or delayed. If debt instruments classified as available for sale are considered to be 

impaired, interest is still recorded on the reduced carrying amount of the relevant asset based on 

the original effective interest rate; this interest is included under finance revenue. 

The reversal of impairment charges to equity instruments takes place through equity, and for debt 

instruments through profit or loss.




Notes 

2.4.8.2. FINANCIAL LIABILITIES 


Financial liabilities are initially recognised at fair value plus transaction costs. The costs for the 

procurement of financial liabilities are netted out with the relevant financial liability. 

Current financial liabilities comprise current loans and borrowings, trade accounts payable and 

other current financial liabilities. 

Non-current financial liabilities comprise non-current loans and borrowings, convertible bonds, 

financing contributions from tenants and other non-current financial liabilities. 

Additional information is provided under note 8.10. 

FINANCING CONTRIBUTIONS FROM TENANTS 

The financing contributions from tenants that are shown on the consolidated balance sheet are 

attributable to subsidised new residential construction. These payments must be refunded to the 

tenants when a lease is terminated, but the landlord has a right to receive a financing contribution 

from the new tenant when the object is let again, and the amounts are therefore recorded as noncurrent 

liabilities. The initial recognition of financing contributions from tenants reflects the actual 

amount received, while subsequent measurement includes index adjustments. The resulting 

amount represents the repayment amount of the obligation, which reflects fair value. 


Subsequent measurement is based on amortised cost and includes the application of the effective 

interest rate method. The costs for the procurement of funds are released over the term of the 

financing and reported under financial results. 

DERECOGNITION OF FINANCIAL LIABILITIES 

A financial liability is derecognised when the underlying obligation is discharged, cancelled or 

expired. 

2.4.8.3. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTING 


Derivative financial instruments are used to minimise the risks associated with changes in interest 

rates. All derivative transactions are concluded with financial institutions that have first-class credit 

ratings. These financial instruments are initially recognised at market value and reported separately 

under other financial assets or other financial liabilities in accordance with their market 

valuation. Derivative financial instruments are classified as current or non-current based on the 

underlying contractual cash flows. Derivative financial instruments that were designated as hedges 

and are considered to be effective are classified in accordance with the underlying transaction. 

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64 


Subsequent measurement is based on the market value. If the criteria for cash flow hedge 

accounting as defined in IAS 39 are met, unrealised gains or losses relating to the effective part of 

the hedge are recognised in other comprehensive income. The amounts recognised in other comprehensive 

income are transferred to profit or loss of the period in which the hedged transaction 

influences results, e.g. when the hedged financial income or expense is recognised or when an 

expected sale is completed. If a hedge results in the recognition of a non-financial asset or a nonfinancial 

liability, the amounts recognised in equity are accounted for a part of the acquisition cost 

of the non-financial asset or a non-financial liability at the date of inception. 

If a forecast transaction or firm commitment is no longer expected to occur, the amounts previously 

recognised in other comprehensive income are transferred to profit or loss. When the hedging 

instrument expires or is sold, terminated or exercised without replacement or rollover, or when 

the criteria for hedge accounting are no longer met, the amounts previously recognised in other 

comprehensive income remain as a separate component of equity until the forecast transaction or 

firm commitment occurs. 

Gains or losses during a financial year, which arise from changes in the fair value of derivative 

financial instruments that do not meet the criteria for recognition as hedges, as well as the ineffective 

part of effective hedging instruments are recognised immediately to profit or loss. 

2.4.9. SHARE BUYBACK PROGRAMME, SHARE PREMIUM AND OTHER RESERVES 

When the conwert Group purchases its own shares, these shares are recognised at cost and 

deducted from equity. They are reported separately on the balance sheet as “treasury shares“. 

When treasury shares are sold, the actual proceeds on sale less transaction costs are recorded as 

an increase in equity. Differences to the amount recognised for the purchase of treasury shares 

are charged or credited to the share premium. Additional information on the share buyback programme 

is provided under note 8.7.1. 

The share premium includes the premium from earlier capital increases as well as shareholder 

contributions (from the year the company was founded). The transaction costs (net of tax) related 

to the capital increases were deducted. 

Other reserves include the reserves for unrealised gains, the cash flow hedge, available-for-sale 

financial instruments, the equity component of the convertible bond and settlement items from 

foreign exchange translation. 

2.4.10. PROVISIONS, CONTINGENT LIABILITIES AND RECEIVABLES 

A provision is recognised if and only if when the Group has a present obligation arising from a past 

event; if it is probable that an outflow of resources embodying economic benefits will be required 

to settle the obligation; and if the amount of the obligation can be reliably estimated. 

Contingent liabilities are not recognised to the balance sheet, but are disclosed in the notes. They 

are not disclosed when the possibility of an outflow of resources embodying economic benefits is 

improbable. 

Contingent receivables are not recognised on the balance sheet, but disclosed when the inflow of 

resources embodying economic benefits is probable.




Notes 

2.4.11. GOVERNMENT GRANTS 

Government grants are recognised as income and matched with the costs they are intended to 

compensate. The government grants received for assets (subsidies as defined by the provisions 

of the Vienna residential construction and renovation act) represent subsidies for new residential 

construction. They were accounted for in accordance with the option provided by IAS 20, i.e. the 

subsidies were deducted from the carrying amount of the individual assets prior to the revaluation 

of the individual assets and liabilities. In 2011 no companies were acquired that had received 

government grants for new residential construction in earlier years (in 2010, one company). 

2.4.12. REVENUE RECOGNITION 

Revenue is recognised when it is probable that the economic benefits will flow to the Group and 

the revenue can be reliably measured. Revenue is measured at the fair value of the consideration 

received, excluding discounts, rebates and value added tax or other duties. 

Net rental income and operating costs are recognised on an accrual basis in agreement with the 

provisions of the underlying lease. 

Revenue from the sale of properties is recognised in accordance with the transfer of dangers and 

risk as specified in the underlying contract, when the major risks and opportunities associated with 

ownership are transferred to the buyer. 

Service revenues are recognised in accordance with the relevant performance. 

2.4.13. INCOME TAXES 

Income tax expense is based on annual profit, and also includes deferred taxes. 

Tax refunds and tax liabilities for the current and prior reporting periods are recorded at the 

amount that is expected to be received from or paid to the taxation authorities. The calculation of 

these amounts is based on the tax rates and tax regulations in effect as of the balance sheet date. 

The taxes relating to items that are recognised in other comprehensive income or directly in equity 

are not recognised to profit or loss, but in other comprehensive income or in equity. 

Deferred taxes are calculated using the balance sheet liability method. They reflect the tax effects 

of temporary differences between the carrying amounts of assets and liabilities for financial reporting 

purposes and the amounts of these items as defined by the applicable tax regulations. 

Deferred tax assets and deferred tax liabilities are calculated using the tax rates that are expected 

to apply to taxable income in the year the temporary differences are settled. This calculation 

applies the tax rates (and tax laws) that have been enacted or substantively enacted as of the 

balance sheet date. The amount of the deferred tax assets and deferred tax liabilities reflects the 

tax effects that the Group would expect if the carrying amounts of the assets were realised and the 

liabilities were settled as of the balance sheet date. 

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Deferred tax assets and deferred tax liabilities are generally recognised for all temporary 

differences and tax loss carryforwards, with the exception of the following: 

+ Deferred tax assets and deferred tax liabilities arising from the initial recognition of goodwill, 

assets or liabilities relating to a transaction that is not a business combination and, at the time 

of the transaction, did not have an effect on net income for the year as calculated according to 

commercial law or on taxable profit, and 

+ Deferred tax assets and deferred tax liabilities arising from temporary differences that are related 

to investments in subsidiaries, associates or joint ventures, when the timing of the reversal of 

the temporary differences can be managed and it is probable that the temporary difference will 

not reverse in the foreseeable future. 

Deferred tax assets are created when it is probable that sufficient taxable profit will be available 

when the deductible temporary differences and/or tax loss carryforwards are realised. The unrecognised 

deductible temporary differences and/or tax loss carryforwards as well as the carrying 

amount of deferred tax assets are reassessed as of each balance sheet date. Unrealised deferred 

tax assets are recognised when it has become probable that future taxable profit will allow the 

deferred tax asset and/or tax loss carryforward to be recovered. In contrast, the carrying amount 

of deferred tax assets is reduced when it is no longer probable that sufficient taxable profit will 

be available in the future to utilise the deductible temporary differences or tax loss carryforward. 

The deferred taxes relating to items that are recognised in other comprehensive income or directly 

in equity are not recognised to profit or loss, but also recorded in other comprehensive income or 

in equity. 

Deferred tax assets are offset with deferred tax liabilities when: 

+ these assets and liabilities relate to the same taxation authority, and 

+ when these assets and liabilities fall under the existing tax assessment and group contract for 

Austrian companies, which establishes a legally enforceable right to offset the items.




Notes 

3. ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS 

The conwert Group classified the properties in its portfolio as investment properties (IAS 40) or 

as properties held for sale (IAS 2). This assessment is made by management on the acquisition 

date based on expectations for the income to be generated from the future use. If these plans or 

expectations change in subsequent years, the property is reclassified. An investment property is 

only reclassified as held for sale when a development project is started in preparation to selling 

the property. 

The following section describes the most important future-oriented assumptions and other key 

sources of estimation uncertainty as of the balance sheet date, which have a significant risk of 

causing a material adjustment to the carrying amount of assets and/or liabilities during the next 

financial year. 

Management believes the major judgments and estimates are related primarily to the measurement 

of investment property (carrying amount: € 2,424.2 million; 2010: € 2,701.1 million). The 

valuation of property is dependent on the valuation method used and the underlying valuation parameters. 

Although the expert opinions on the objects owned by the Group reflect internationally 

recognised standards, it cannot be excluded that a different valuation method would lead to another 

– possibly lower – appraisal of the Group’s properties. The valuation of a property is based on 

the level of rents and the sustainability of this level, and also includes the condition and location 

of the object as well as other factors and far-reaching assumptions. It cannot be excluded that a 

negative change in one of these factors or assumptions could lead to a decrease in the value of a 

property, and consequently to a negative effect on the financial position and performance of the 

Group. Additional information on this subject and on the book values of the relevant items is provided 

under note 8.1. 

Properties held for sale (carrying amount: € 404.4 million; 2010: € 537.1 million) are carried at cost 

or at the lower fair value less costs to sell. Additional information on this subject and on the book 

values of the relevant items is provided under note 8.4. The comments on judgments and estimates 

relating investment property also apply to properties held for sale. 

The conwert Group tests goodwill for impairment at least once each year. This testing requires an 

estimate of the value in use of the cash-generating unit to which the goodwill is allocated. In order 

to estimate the value in use, management must approximate the expected future cash flows of the 

cash-generating unit and select an appropriate discount rate to determine the present value of 

these cash flows. The carrying amount of goodwill totalled € 114.8 million as of 31 December 2011 

(2010: € 118.4 million). Additional details on this subject are provided under note 8.2. 

The value of intangible assets is determined by applying an appropriate valuation method that 

reflects the type of asset and the availability of information. Customer relationships and management 

contracts (carrying amount: € 2.8 million; 2010: € 3.9 million) are valued using the multiperiod 

excess earnings method. This method involves the calculation of the present value of cash 

flows generated by the intangible asset. Based on the assumption that the intangible asset will only 

generate cash flows in connection with other tangible and intangible assets, contributory asset 

charges are included in the determination of the these cash inflows. 

Deferred tax assets (carrying amount: € 22.1 million; 2010: € 18.4 million) are the result of tax 

loss carryforwards and deductible temporary differences from the fair value measurement of properties 

and derivatives. The valuation of these deferred tax assets requires estimates concerning 

the future earnings and tax situation of the conwert Group. It cannot be excluded that a negative 

change in the relevant assumptions would not justify the capitalisation of deferred tax assets at 

this same amount and would therefore have a negative influence on the financial position, financial 

performance and cash flows of the Group. Additional details on this subject are provided under 

note 8.8. 

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4. INVESTMENTS IN JOINT VENTURES 

The conwert Immobilien Group holds investments in the joint ventures listed under note 16, which 

are all active in the property sector. The following table shows the proportional share of assets, 

liabilities, income and expenses attributable to the Group during the reporting year from its investments 

in joint ventures as of 31 December 2011 and 2010: 

in € million 2011 2010 

Current assets 1.8 1.9 

Non-current assets 25.2 24.6 

Total 27.0 26.5 

Current liabilities (9.6) (9.9) 

Non-current liabilities (11.7) (11.7) 

Total (21.3) (21.6) 

Income 3.0 2.7 

Expenses (2.3) (2.4) 

Gewinn/Verlust 0.7 0.2 

5. INVESTMENT IN AN ASSOCIATE 

5.1. INVESTMENT IN AN ASSOCIATE DURING 2011 

The successful acquisition and sale of the Berliner Coinvest portfolio (the “Goud portfolio“), which 

consisted entirely of properties held for sale, had the following effects during the reporting year: 

The portfolio was initially consolidated during the second quarter of 2011 and deconsolidated 

during the third quarter of 2011 following the sale of 80% of the shares. The conwert Group retained 

a stake of 20%. In accordance with the percentage owned, the remaining investment in the Goud 

portfolio is presented as an associated company. On the cash flow statement, this transaction is 

treated as a non-cash reclassification (also see note 9). 

The basic principle defined by IAS 27 (2008) for changes and by IAS 28 for subsequent changes 

resulted in the recognition of a disposal when control was lost and the measurement of the remaining 

stake at fair value. 

In 2011 a total of € 0.3 million was recognised to profit or loss in connection with the Goud portfolio, 

while a further minus € 0.1 million was recorded without recognition through profit or loss. 

The following table presents summarised financial information on the investment held by the 

conwert Group in the Goud portfolio: 

Share of assets and liabilities 

in the associate 

Total in 

€ million 

Thereof 20% 


Current assets 4.7 0.9 

Current liabilities (59.1) (11.8) 

Non-current liabilities (6.4) (1.3) 

Proportional share of net assets 47.1 9.4 

Carrying amount of the investment 9.4




Income statement of the associate 

from 01.10.-31.12.2011 

Notes 

Total in 

€ million 

Thereof 20% 

Operating income 3.7 0.7 

Operating expenses (3.5) (0.7) 

Operating profit 0.2 0.0 

Financial results (0.7) (0.1) 

Profit before tax (0.4) (0.1) 

Income tax 1.3 0.3 

Profit after tax 0.8 0.3 

Other comprehensive income (0.4) (0.1) 

Total comprehensive income for the period 0.4 0.1 

Cash flow from the acquisition of the assets and liabilities in the Goud portfolio comprises the 

following: 

in € million 2011 

Cash and cash equivalents (0.6) 

Receivables and other assets (4.4) 

Properties held for sale (89.2) 

Liabilities and provisions 91.7 

Net assets/liabilities acquired = purchase price (2.4) 

Cash and cash equivalents 0.6 

Net cash flow (1.9) 

Cash flow from the disposal of assets and liabilities in the Goud portfolio comprises the following: 

in € million 2011 


Receivables and other assets 4.9 

Properties held for sale 105.7 

Liabilities and provisions (94.5) 

Net assets/liabilities sold 16.9 

Fair value of the at-equity stake (20%) (3.4) 

Loss on the disposal of subsidiaries (10.3) 

Cash and cash equivalents (0.8) 

Net cash flow 2.4 

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5.2. INVESTMENT IN AN ASSOCIATE DURING 2010 

The investment in ECO amounted to 24.9% up to the takeover during the second half of 2010. This 

investment was presented in the consolidated financial statements as an associate up to the date 

of the takeover based on the amount of the stake owned. Following the successful conclusion of the 

takeover, ECO was fully consolidated for the first time in the third quarter of 2010. 

As part of a voluntary takeover offer, the conwert Group acquired additional shares in the listed 

ECO during 2010 for a price of € 7.15 per share. The purpose of this acquisition was to better leverage 

the opportunities available in the markets of the conwert Group. 

The takeover offer ended on 3 November 2010 after the expiration of a three-month additional offer 

period. The conwert Group now holds 95.76% of the share capital of ECO. 

The voluntary takeover offer raised the stake held by the conwert Group in ECO to 87.23% by the 

acquisition date on 1 August 2010. A further 8.53% of the shares were purchased for € 20.9 million 

during the three-month additional offer period, respectively up to the end of that year. 

The carrying amount of the acquired shares, excluding non-controlling interests, amounted to 

€ 20.9 million. 

The following table shows the fair value of the identifiable assets and liabilities of ECO on the initial 

consolidation date (1 August 2010): 

in € million Fair value on 

acquisition date 

Assets 

Investment property 566.5 

Other property, plant and equipment and intangible assets 0.1 

Property held for sale 146.0 

Receivables and other financial assets 11.0 


Deferred tax assets 

Liabilities 

15.8 

779.0 

Liabilities 438.5 

Deferred tax liabilities 1.4 

439.9 

Total identifiable net assets 339.1 

Non-controlling interests as of initial consolidation date (12.77%) (31.1) 

Share of profit attributable to equity holders of the parent from an acquisition 

below market value 

(95.3) 

Fair value of previous at equity investment (24.90%) (60.7) 

Cash outflow for acquisition in 2010 152.0 

The non-controlling interests resulting from the acquisition of ECO were recognised at fair value, 

i.e. at the applicable stock market price. 

The acquisition of the shares was based on the purchase price stated in the voluntary takeover 

offer. This price was lower than the inherent value of the shares, which resulted in a positive effect 

of € 95.3 million on earnings for the conwert Group. This amount is shown separately on the 

income statement under position 14 “Gain from the acquisition of a company below market value”. 

This acquisition also led to an impairment charge of € 14.9 million to the management contract 

with ECO. 

The stake originally held in ECO (24.9%) was valued at equity up to the date of acquisition, and the 

carrying amount on the acquisition date equalled € 71.0 million. In accordance with IFRS 3.42, 

this stake was remeasured as of the acquisition date to reflect fair value; the resulting loss of 

€ 10.3 million is reported on the income statement under position 25 “Impairment charge to an 

investment in an associate“ in financial results. 

The fair value of the acquired trade accounts receivable amounted to € 2.3 million, which also 

represents the gross amount.




Notes 

ECO contributed € 46.8 million to conwert Group revenues and € 6.3 million to earnings before 

tax (EBT) from the initial consolidation on 1 August 2010 to 31 December 2010. Prior to the initial 

consolidation, the conwert Group reported a proportional share of € 2.1 million in 2010 under the 

position “share of profit/(loss) from an associate”. If this business combination had taken place at 

the beginning of that year, ECO would have contributed € 53.7 million to conwert Group revenues 

and € 11.4 million to earnings before tax (EBT). 

The related transaction costs of € 4.6 million were recognised as expenses and are reported on the 

income statement under position 20 “Other operating expenses“. 

6. SEGMENT REPORTING 

The conwert Group is organised into regional business units for management purposes and has 

three reportable operating segments. 

+ Region Austria 

+ Region Germany 

+ Other regions 

The reportable segment “Other region“ covers business activities in the CEE countries as well as 

other countries inside and outside the European Union. 

The various business activities of the conwert Group are presented in business segments. These 

business activities involve the acquisition, development and letting of residential and commercial 

properties (“Portfolio“), the sale of these properties (“Sale of flats and buildings“) and the provision 

of property-related services (“Property services“) for asset management, facility management, 

property insurance and property brokering. The segment “Sale of flats and buildings“ is the 

reporting segment for proceeds generated by the sale of investment properties and properties 

held for sale. 

The transfer prices for transactions between the reportable segments are determined on the basis 

of ordinary market conditions. 

The segment report presents detailed information on revenues by business segment and region. It 

represents an integral part of these consolidated financial statements. 

Segment assets comprise investment properties and properties held for sale. Segment liabilities 

consist of the borrowings attributable to these properties. 

The column “Group reconciliation and elimination” shows the effects resulting from the elimination 

of intersegment transactions. The amounts shown in this reconciliation column result 

primarily from income and expenses recorded by the property service companies as well as other 

financial positions relating to income, expenses, assets and liabilities that could not be allocated 

to a specific segment. Transactions between the individual segments principally reflect normal 

market conditions. 

Interest is charged on intersegment settlements at rates established by the Group (2011: 5.0% 

and 6.0%, 2010: 4.8% and 5.0%). The only other charges between the segments represent external 

costs. Interest expense for the convertible bonds issued by the conwert Group is not allocated to 

the segments because these funds were used to refinance the Group as a whole and management 

was not provided with any additional information on this bond at the segment level. 

The impairment charges recognised to customer relations in the alt+kelber Group and to goodwill 

in the cash generating unit “Services alt+kelber Group” (2010: € 9.1 million) were allocated 

to the segment “Germany”. Impairment charges to goodwill and intangible assets amounted to 

€ 3.7 million in 2011 (2010: € 51.0 million) and were recognised in the segment “Austria”. The 

impairment charges to goodwill were related to the property services segment. 

The method used to present the consolidation of intragroup charges for service revenues and other 

operating expenses in the property services segment was changed in 2011. Therefore, comparison 

with the prior year is limited. 

71



72 

7. NOTES TO THE INCOME STATEMENT 

7.1. PROPERTY REVENUES AND EXPENSES 

The following table provides detailed information on property revenues and expenses: 


Net rental income 159.7 141.9 

Operating costs charged to tenants 50.3 45.8 

Rental income 

Less property expenses 

210.0 187.7 

Operating costs charged to tenants (50.3) (45.8) 

Other property expenses (40.6) (39.1) 

Property expenses (90.9) (84.9) 

Total 119.1 102.8 

The following table shows rental income classified by property sector: 


Residential space 122.6 122.2 

Office and commercial space (ownership) 84.3 62.8 

Parking 3.2 2.8 

Total 210.0 187.7 

7.2. REVENUES FROM PROPERTY SERVICES 

Revenues from property services are classified as follows: 


Management of property companies 3.3 5.9 

Facility management 17.2 15.8 

Brokerage and sales 7.9 10.7 

Development and construction management 0.1 0.7 

Property insurance 1.0 1.3 

Total 29.5 34.4




Notes 

7.3. OTHER PROPERTY EXPENSES 

These expenses comprise the following items: 


Operating costs charged to tenants 50.3 45.8 

Vacancy costs 9.8 9.3 

Maintenance 19.2 17.2 

Thereof covered by insurance 0.5 1.1 

Facility management 0.4 0.3 

Miscellaneous 11.2 12.3 

Total 90.9 84.9 

7.4. PERSONNEL EXPENSES 

The components of personnel expenses are shown in the following table: 


Salaries and wages 29.6 32.0 

Thereof bonuses 3.1 3.4 

Thereof severance compensation 0.5 0.7 

Expenses for legally required duties and contributions 5.6 5.8 


Total 35.3 38.2 

Personnel expenses include contributions of € 0.2 million (2010: € 0.2 million) to employee pension 

funds in Austria. 

73



74 

7.5. OTHER OPERATING EXPENSES 

Other operating expenses consist of the following items: 


Administrative costs (from property service companies): 

Non-income based taxes and duties 0.9 1.6 

Consulting, incl. contract services 3.4 3.6 

Sub-commissions and broker commissions for property development and sales 1.3 1.9 

Write-off of uncollectible receivables and impairment charges to trade receivables 0.3 3.7 

Advertising 0.6 1.0 

Training 0.2 0.2 

Office space 1.7 2.1 

Office operations 0.7 0.7 

IT expenses 2.0 1.8 

Motor vehicle expense and travel costs 2.2 1.9 

Bank charges 0.1 0.1 


Subtotal 

Property-specific and Group costs: 

16.7 20.7 

Management fees 0.0 0.1 

Non-income based taxes and duties 2.5 2.3 

Consulting, incl. contract services 6.4 9.5 

Sub-commissions and broker commissions for property development and sales 6.9 2.9 

Advertising 1.7 2.5 

Exchange rate losses 1.1 1.2 

Write-off of uncollectible receivables and impairment charges to trade receivables 4.6 7.7 

Bank charges 2.7 2.1 


Subtotal 30.0 31.3 

Transaction costs from the acquisition of ECO 0.0 4.6 

Total 46.7 56.7 

The fees charged by the auditor and property appraisers consist of the following: 


Fees charged by the auditor for legally required audits 0.5 0.6 

Fees charged by the auditor for other services 0.0 0.0 

Fees charged for valuation of the property portfolio 0.9 1.2 

Total 1.4 1.8




Notes 

7.6. FINANCE REVENUE 

Finance revenue is classified as follows: 


Interest income on deposits with financial institutions 3.8 5.6 

Interest income from swaps 13.4 6.3 

Interest income from the change in value of ineffective swaps 2.2 0.0 

Income from financial assets 0.1 0.4 

Total 19.5 12.2 

7.7. FINANCE COSTS 

The classification of finance costs is shown below: 


Interest expense on loans and overdrafts 64.2 58.8 

Interest expense for swaps 44.8 31.7 

Cost for the procurement of funds 4.5 4.2 

Other finance costs 2.5 0.4 

Total 116.1 95.1 

Finance costs rose significantly in comparison with the previous year. This increase resulted, 

among others, from the inclusion of the ECO Group in the consolidation range of the conwert Group. 

7.8. INCOME TAX EXPENSE 

This item includes income taxes paid or owned by the individual Group companies as well as 

deferred tax liabilities. 


Current tax expense (9.6) (9.5) 

Deferred tax income/expense from the creation and reversal of temporary differences 5.3 24.2 

Changes in tax rates (0.8) (1.2) 

Total (5.1) 13.5 

The reconciliation between the conwert Group’s effective tax rate and the legal tax rate of 25% in 

Austria (2010: 25%) is shown below: 


Earnings before tax (EBT) 23.6 12.2 

Theoretical tax expense at tax rate of 25% (5.9) (3.0) 

Tax effects of tax-free income (non-temporary differences) 5.0 10.7 

Tax effects of different tax rates (3.4) 7.0 

Effects of changes in tax rates on profit-related positions (0.8) (1.2) 

Income tax expense (5.1) 13.5 

75



76 

7.9. EARNINGS PER SHARE 

As indicated in the consolidated income statement, basic earnings per share are calculated by 

dividing the profit attributable to the equity holders of the parent by the weighted average number 

of common shares outstanding during the financial year. 

Diluted earnings per share are calculated by dividing the profit attributable to the equity holders 

of the parent by the weighted average number of common shares outstanding during the financial 

year plus the weighted average number of common shares that would result from the conversion 

of all potential dilutive common shares. 

The issued capital of conwert amounted to € 853,592,730 as of 31 December 2011 and is divided 

into 85,359,273 bearer shares. A total of 10,158,663 shares were repurchased in 2008, 2009, 2010 

and 2011 and 6,296,699 treasury shares were sold. Accordingly, 81,497,309 shares were outstanding 

as of 31 December 2011. 

BASIC EARNINGS PER SHARE 

conwert carried out a share buyback during 2011 and 2010. The individual transactions were 

disclosed on the homepage of the company and the homepage of the Austrian Financial Market 

Authority in accordance with legal regulations. 

in € or number of shares 2011 

Total number of shares outstanding as of the balance sheet date 81,497,309 

Weighted average number of shares 82,779,113 

Profit attributable to equity holders of the parent company in € million 23.3 

Earnings per share in € 0.28 

in € or number of shares 2010 

Total number of shares outstanding as of the balance sheet date 84,258,661 

Weighted average number of shares 82,496,796 

Profit attributable to equity holders of the parent company in € million 23.8 

Earnings per share in € 0.29 

DILUTED EARNINGS PER SHARE 

The diluting effects of the convertible bond were reflected in the calculation of diluted earnings per 

share. However, this figure exceeds basic earnings per share and is therefore not shown.




Notes 

8. NOTES TO THE BALANCE SHEET 

8.1. INVESTMENT PROPERTIES 

The properties owned by the conwert Group were valued by several independent experts as of 

31 December 2011, similar to the procedure followed in the previous year. The objects located in 

foreign countries were valued in cooperation with local experts in accordance with international 

valuation principles and based on the relevant national circumstances. 

The development of the carrying amount of investment properties is explained in the following 

table: 

in € million 31.12.2011 31.12.2010 

Carrying amount at the beginning of the financial year 2,701.1 2,143.4 

Net foreign exchange differences (1.1) 2.4 

Additions from the acquisitions of properties 0.0 145.7 

Additions to existing properties 55.6 60.0 

Additions from changes in the consolidation range 0.0 592.1 

Additions/disposals resulting from the reclassification of properties as held for sale 21.6 (32.4) 

Disposals (360.9) (217.8) 

Net gain/loss from fair value adjustments 7.8 7.8 

Carrying amount at the end of the reporting period 2,424.2 2,701.1 

As of 31 December 2011 the conwert Group owned 1,416 investment properties (2010: 1,467) with 

approx. 1,860,375 sqm of usable space (2010: approx. 2,090,762 sqm). The national locations of 

these properties are as follows: 184 objects (2010: 201) in Austria, 1,195 objects (2010: 1,231) in 

Germany and 37 objects (2010: 35) in other countries. The investment properties were measured 

at fair value, which was based primarily on appraisals carried out in December 2011 and January 

2012 by independent property experts. 

Investment properties of € 2,424.2 million (2010: € 2,701.1 million) serve as collateral for loans; 

the related mortgages amount to € 1,178.0 million (2010: € 1,178.0 million). Investment properties 

include € 72.3 million (2010: € 96.4 million) that were obtained through finance leases. 

In 2011 € 2.4 million (2010: € 1.9 million) of borrowing costs were capitalised on investment properties 

(average interest rate: 5.0%; (2010: 5.0%). 

No contracts for the purchase of individual properties had been signed as of 31 December 2011 that 

would result in the transfer of assets after this date (2010: € 0). 

8.1.1. THE PROPERTY MARKET IN AUSTRIA 

The Austrian portfolio of the conwert Group comprises objects in the residential, office, commercial, 

warehouse and hotel sectors, whereby the residential sector is dominant. This property 

portfolio was valued as of 31 December 2011 based on the parameters described in the following 

sections. 

77



78 

8.1.1.1. APPLIED VALUATION METHODOLOGY 

A combined asset value and income capitalisation approach was used to value most of the properties 

in the Austrian portfolio, whereby the weighting between these two methods was based on 

the use of the property and the extent of the deviation. Properties used exclusively for commercial 

purposes were valued in accordance with the discounted cash flow method. The use of methods 

that also include the net asset value is necessary for the Austrian market because certain subsegments 

and appraised objects are still subject to legally defined rent controls that would distort the 

estimation of value under an income capitalisation approach. 

The following national and international standards formed the basis for valuation in Austria: 

Austrian Property Valuation Act (“Liegenschaftsbewertungsgesetz“): 

ÖNORM B 1802: Basis of property valuation 

ÖNORM B 1802-2: Discounted cash flow method 

Professional associations: Description of valuation guidelines: 

Royal Institution of Chartered Surveyors (RICS) "Red Book" 

The European Group of Valuers Associations (TEGoVA) "Blue Book" 

International Valuation Standards Committee (IVSC) "White Book“ 

8.1.1.2. PARAMETERS FOR THE DETERMINATION OF VALUE 

The following section presents detailed information on special parameters that were used to 

determine the value of the Group’s properties in Austria. This data refers to the valuations made 

as of 31 December 2011. The following table shows the range, i.e. the highest and lowest value, for 

each parameter. 

Based on these considerations, the discount in this submarket remained relatively constant in 

comparison with the prior year. The risk assessment was increased for several objects. In the 

Austrian submarket, the discount rates ranged from 2.25% to 8.5% (2010: 2.0% to 7.5%). 

CONWERT MASTER PORTFOLIO 

2011 Discount 

rate 

Maintenance 

costs *) 

Default risk 

on rents *) 

Rent/sqm/ 

month in € 

Vienna 

Minimum 2.25% 0.3% 2.0% 1.06 

Maximum 

Lower Austria 

6.0% 0.8% 5.0% 14.53 

Minimum 3.5% 0.5% 2.0% 2.19 

Maximum 

Upper Austria 

7.0% 1.0% 7.0% 16.49 

Minimum 3.5% 0.5% 2.0% 4.72 

Maximum 

Salzburg 

7.5% 0.8% 8.0% 13.11 

Minimum 4.0% 0.5% 2.0% 5.75 

Maximum 

Vorarlberg 

7.0% 1.2% 5.0% 12.02 

Minimum 4.0% 0.5% 3.0% 4.99 

Maximum 

Burgenland 

6.0% 1.2% 6.0% 10.49 

Minimum 4.5% 0.5% 5.0% 4.86 

Maximum 6.5% 0.5% 5.0% 5.23 

*) Based on gross annual income




Notes 

2010 Discount 

rate 

ECO PORTFOLIO 


rate 

Maintenance 

costs *) 

Default risk 

on rents *) 

Rent/sqm/ 

month in € 

Vienna 

Minimum 3.5% 8.0% 3.0% 4.46 

Maximum 

Lower Austria 

7.5% 12.0% 10.0% 11.64 

Minimum 7.0% 8.0% 5.0% 3.03 

Maximum 

Upper Austria 

8.5% 14.0% 8.0% 12.16 

Minimum 8.0% 7.0% 7.0% 4.39 

Maximum 

Salzburg 

8.0% 14.0% 8.0% 10.91 

Minimum 6.5% 10.0% 5.0% 7.55 

Maximum 

Tyrol/Vorarlberg 

7.0% 14.0% 6.0% 8.25 

Minimum 7.0% 8.0% 5.0% 20.02 

Maximum 

Styria 

8.5% 10.0% 7.0% 21.28 

Minimum 5.5% 10.0% 5.0% 4.37 

Maximum 

Carinthia 

7.5% 12.0% 10.0% 10.52 

Minimum 7.0% 5.0% 5.0% 6.20 

Maximum 8.0% 10.0% 8.0% 11.58 

*) Based on gross annual income 

Maintenance 

costs* 

Default risk 

on rents *) 

Rent/sqm/ 

month in € 

Vienna 

Minimum 2.0% 0.3% 1.0% 1.06 

Maximum 

Lower Austria 

6.0% 1.0% 6.0% 16.54 

Minimum 3.5% 0.5% 2.0% 2.09 

Maximum 

Upper Austria 

6.5% 1.3% 7.0% 12.00 

Minimum 4.0% 0.5% 2.0% 5.21 

Maximum 

Salzburg 

7.3% 1.3% 5.0% 13.05 

Minimum 4.0% 0.5% 2.0% 6.50 

Maximum 

Vorarlberg 

7.5% 1.0% 5.0% 10.25 

Minimum 4.0% 0.6% 2.0% 6.50 

Maximum 

Burgenland 

6.0% 1.5% 6.0% 10.25 

Minimum 4.5% 0.5% 5.0% 4.93 

Maximum 7.0% 0.5% 5.0% 5.04 


79



80 

The ECO Group portfolio was appraised by various experts in 2010. In order to develop a comparison 

with the prior year, individual properties from the different asset classes (office, retail, entertainment, 

parking) were selected through sampling to produce a representative overview of the portfolio. 

The parameters used to determine value were then compared with the previous year. 

Rental income was generally stable or slightly higher than the previous year. The discount rates 

were substantially higher and reflected an increase in the estimated market risk. Maintenance 

expenses were increased or decreased to reflect the current state of the property. 

The comparable parameters used to value the ECO portfolio in 2010 are as follows: 

Rental income per 

year in € million 

Fair value in 

€ million 

Discount rate 

in % 

Maintenance *) 

Brunn am Gebirge, Campus 21 

2011 6.5 102.3 6.0 8.0 

2010 

Graz, Eggenberger Allee 

5.0 116.5 3.3 4.4 

2011 1.0 15.6 5.5 10.0 

2010 

Innsbruck, Cineplexx 

1.0 15.2 5.5 7.9 

2011 1.5 20.6 7.0 8.0 

2010 

Eferding, FMZ 

1.7 21.7 6.5 4.6 

2011 0.3 2.9 7.5 7.0 

2010 

Vienna, Neubaugasse 

0.3 2.9 7.0 7.0 

2011 0.3 6.6 4.0 3.0 

2010 0.3 5.9 3.3 7.0 


8.1.1.3. DERIVATION OF THE DISCOUNT RATE 

The property appraisers developed the discount rate in two different ways: 

Under the first method, the discount rate was based on similar transactions realised on the market. 

The second method involved the evaluation of alternative forms of investment (fixed-interest, 

no-risk securities, etc.) and the subsequent development of additions or deductions to the discount 

rate. 

8.1.1.4. SENSITIVITY ANALYSIS 

Sensitivity analyses for the Austrian submarket show that a decrease of 25% in the average discount 

rate would increase fair value by roughly 27% (2010: 19%). In contrast, an increase of 25% in 

the average discount rate would reduce the average fair value by approx. 19% (2010: 14%). 

in %




Notes 

8.1.2. THE GERMAN PROPERTY MARKET 

The portfolio of the conwert Group in Germany covers all sectors (residential, office, commercial 

and warehouse), whereby residential properties are the predominant category. 


The internationally accepted discounted cash flow method (DCF) was used to value the properties 

in the German portfolio, with the exception of the objects attributable to the ECO Group. This method 

is based on a dynamic investment calculation that focuses exactly on valuation parameters 

and, in this way, allows for the transparent determination of market value. The DCF method begins 

with ten years of monthly forecasts for the future cash inflows and outflows connected with the 

valuation object. The payment flows at the beginning of each month are discounted back to the 

valuation date to determine the specific effects of relevant incoming and outgoing payments during 

the forecast period on the market value of the object as of the valuation date. 

The discount rate used for the calculation reflects the market situation and the expected return of 

a potential investor as well as the forecast uncertainty connected with future payment flows. Since 

the weighting of future payment flows decreases and forecast uncertainty increases during the 

forecast period, cash flows after this period are normally capitalised based on a growth rate and 

discounted back to the valuation date. 

The DCF method determines the average market value that investors would generally be prepared 

to pay for the property on the valuation date under the given economic circumstances in order to 

realise an appropriate return on investment consistent with their respective business model. 

A combined asset value and income capitalisation approach was used to value most of the properties 

in the German ECO portfolio, whereby the weighting between these two methods was based 

on the use of the property and the extent of the deviation. The DCF method was used in a limited 

number of cases. 

The following international standards formed the basis for valuation in Germany: 

Professional associations: Description of valuation guidelines 





The following section presents detailed information on special parameters that were used to determine 

the value of the Group’s properties in Germany. The table shows the range, i.e. the highest 

and lowest value, for each parameter. 

Based on these considerations, the discount in this submarket remained relatively constant. The 

risk assessment was increased slightly for several objects. In the German submarket, the discount 

rates ranged from 3.8% to 9.5% (2010: 3.5% to 7.0%). 

81



82 


rate 

Maintenance 

costs €/sqm 

Structural 

vacancy 

Rent/sqm/ 

month in € 

Augsburg 

Minimum 4.75% 8.50 0.0% 5.99 

Maximum 5.75% 9.50 1.0% 7.74 

Berlin 

Minimum 3.75% 6.50 0.0% 4.36 

Maximum 6.45% 11.45 2.7% 11.86 

Fürth 

Minimum 5.00% 7.50 0.0% 4.35 

Maximum 5.70% 10.45 1.25% 6.44 

Nürnberg 

Minimum 5.00% 8.50 0.0% 4.69 

Maximum 6.00% 12.10 2.5% 7.86 

Potsdam 

Minimum 4.35% 7.50 0.0% 5.91 

Maximum 5.00% 9.35 0.9% 9.00 

Wiesbaden 

Minimum 4.85% 9.25 1.0% 7.29 

Maximum 5.25% 10.45 4.0% 17.82 

Dresden 

Minimum 4.00% 6.5 0.0% 2.72 

Maximum 6.25% 12.10 2.5% 7.50 

Leipzig 

Minimum 4.75% 2.50 0.0% 2.39 

Maximum 8.00% 11.45 10.0% 7.28 

Chemnitz 

Minimum 5.25% 7.50 1.6% 3.81 

Maximum 6.35% 11.00 5.0% 6.09 

Magdeburg 

Minimum 5.00% 8.50 2.5% 4.19 

Maximum 7.00% 10.00 5.0% 6.65 

Altenburg 

Minimum 5.25% 7.50 2.4% 4.36 

Maximum 7.25% 12.00 3.6% 5.16 

Bielefeld 

Minimum 5.00% 8.50 0.9% 3.65 

Maximum 5.50% 9.50 1.9% 6.24 

Bremen 

Minimum 4.75% 8.50 1.8% 4.01 

Maximum 5.60% 10.50 2.1% 6.03 

Erfurt 

Minimum 5.10% 7.50 1.3% 4.81 

Maximum 5.60% 10.45 1.9% 6.55 

Essen 

Minimum 5.00% 8.50 1.1% 5.01 

Maximum 5.35% 9.50 2.3% 6.38 

Jena 

Minimum 4.75% 8.25 0.5% 6.32 

Maximum 5.60% 11.00 2.0% 7.57 

Naumburg 

Minimum 5.25% 7.50 0.5% 3.65 

Maximum 6.05% 12.50 6.0% 4.71 

Zwickau 

Minimum 5.50% 8.50 2.5% 3.74 

Maximum 6.15% 9.50 6.0% 5.36




Notes 

2010 Discount 

rate 

Maintenance 

costs *) 

Default risk 

on rents *) 

Rent/sqm/ 

month in € 

Augsburg 

Minimum 4.4% 0.5% 2.0% 6.40 

Maximum 6.5% 0.6% 5.0% 17.44 

Berlin 

Minimum 3.5% 0.5% 2.0% 4.11 

Maximum 6.6% 1.0% 4.0% 11.16 

Fürth 

Minimum 5.0% 0.6% 2.0% 4.83 

Maximum 5.6% 1.0% 4.0% 7.12 

Nürnberg 

Minimum 4.1% 0.5% 2.0% 2.87 

Maximum 6.5% 1.0% 4.0% 10.14 

Potsdam 

Minimum 4.3% 0.5% 2.0% 6.4 

Maximum 4.9% 0.6% 2.0% 17.44 

Wiesbaden 

Minimum 4.5% 0.6% 3.0% 7.14 

Maximum 5.6% 0.6% 4.0% 12.34 

Dresden 

Minimum 4.0% 0.7% 2.0% 3.00 

Maximum 6.0% 1.2% 5.0% 8.00 

Leipzig 

Minimum 4.5% 0.7% 2.5% 2.10 

Maximum 6.5% 1.2% 6.0% 7.67 

Chemnitz 

Minimum 4.5% 0.7% 3.1% 3.06 

Maximum 6.0% 1.2% 4.3% 6.56 

Magdeburg 

Minimum 4.3% 0.6% 3.0% 3.16 

Maximum 6.5% 0.9% 5.0% 7.09 

Altenburg 

Minimum 5.0% 0.7% 3.0% 3.09 

Maximum 7.0% 1.12% 6.0% 5.46 

Bielefeld 

Minimum 4.0% 0.7% 2.0% 2.92 

Maximum 6.0% 1.3% 5.0% 6.39 

Bremen 

Minimum 5.0% 0.7% 2.0% 4.66 

Maximum 6.5% 1.3% 5.0% 5.58 

Erfurt 

Minimum 4.3% 0.8% 2.0% 4.00 

Maximum 6.0% 1.2% 5.0% 6.65 

Essen 

Minimum 4.8% 0.8% 3.0% 4.18 

Maximum 6.8% 1.3% 6.0% 6.72 

Jena 

Minimum 4.5% 0.8% 2.0% 4.40 

Maximum 6.5% 1.2% 4.0% 8.57 

Naumburg 

Minimum 5.0% 0.8% 3.0% 3.30 

Maximum 7.0% 1.2% 6.0% 5.50 

Zwickau 

Minimum 5.0% 0.8% 3.0% 3.40 

Maximum 7.0% 1.3% 6.0% 5.40 


83



84 

ECO PORTFOLIO 


rate 






rate. 


In 2011 the market value of the German portfolio was determined by applying the discounted cash 

flow method. The sensitivity analysis involved a 25% increase and decrease in the discount rate for 

the entire portfolio at the individual object level to determine the effect on discounted cash flows. 

The exit cap rate for the capitalisation of the terminal value was increased and decreased by 20%. 

Sensitivity analysis 

German Portfolio 

Maintenance 

costs *) 

Default risk 

on rents *) 

Market value 

€ million 

Rent/sqm/ 

month in € 

Minimum 6.25% 8.0% 2.0% 3.85 

Maximum 9.5% 15.0% 12.0% 15.99 


Deviation 

in % 

Sensivität: 

Discount rate - 25% 

Exit cap rate - 20% 

1,422.0 30.2 

Market value as of 31.12.2011 

Sensitivity: 

1,091.9 

Discount Rate + 25% 

Exit Cap Rate + 20% 

876.8 (19.7) 

In the prior year, sensitivity analyses based on the Berlin submarket showed that a decrease of 

25% in the average discount rate would have increased fair value by 27%. An increase of 25% in the 

average discount rate would have decreased fair value by approx. 18%.




Notes 

8.1.3. THE CZECH PROPERTY MARKET 

The portfolio of the conwert Group in the Czech Republic covers all sectors (residential, office, 

commercial and warehouse). 


A combined asset value and income capitalisation approach was used to value the mixed use properties 

in the Czech portfolio, whereby the weighting between these two methods was based on the 

use of the property and the extent of the deviation. The discounted cash flow method was used to 

value one object that is used exclusively for commercial purposes (hotel). 

The use of methods that also include the net asset value is necessary for the Czech market because 

certain subsegments and appraised objects are still subject to legally defined rent controls that 

would distort the estimation of value under an income capitalisation approach. 

The following international standards formed the basis for valuation in the Czech Republic: 

Professional associations: Description of valuation guidelines: 





The following section presents detailed information on special parameters that were used to determine 

the value of the Group’s properties in the Czech Republic. The table shows the range, i.e. 

the highest and lowest value, for each parameter. 

Based on these considerations, the discount in this submarket remained relatively constant. The 

discount rates ranged from 5.0% to 7.5% (2010: 5.2% to 7.6%) for the Czech submarket as a whole. 

Prague is not presented separately because the Group owns only one object in this city. 


rate 

Maintenance 

costs 

Default risk 

on rents 

Rent/sqm/ 

month in CZK 

Brno 

Minimum 5.0% 0.5% 3.0% 93.50 

Maximum 7.5% 1.0% 4.0% 299.57 

Ostrava 

Minimum 6.3% 0.5% 3.0% 135.44 

Maximum 7.0% 0.5% 3.0% 192.10 

Pilzen 

Minimum 5.8% 0.4% 3.0% 68.40 

Maximum 7.4% 0.6% 4.0% 191.74 

2010 Discount 

rate 

Maintenance 

costs 

Default risk 

on rents 

Rent/sqm/ 

month in CZK 

Brno 

Minimum 5.2% 0.5% 2.0% 90.00 

Maximum 7.6% 1.0% 5.0% 337.86 

Ostrava 

Minimum 6.3% 0.5% 3.0% 157.85 

Maximum 6.7% 0.7% 3.0% 158.21 

Pilzen 

Minimum 5.8% 0.4% 3.0% 103.21 

Maximum 7.4% 0.6% 4.0% 179.89 

85



86 






rate. 


Sensitivity analyses for the Czech submarket show that a decrease of 25% in the average discount 

rate would have increased fair value by roughly 30% (2010: 30%). In contrast, an increase of 25% in 

the average discount rate would have reduced the average fair value by approx. 19% (2010: 20%). 

The property portfolio of the conwert Group was valued by the following independent external experts: 

+ Sachverständigenbüro Prof. Mag. Thomas N. Malloth (MRICS) 

+ Reinberg & Partner Immobilienberatung GmbH (MRICS) 

+ Cushman & Wakefield Österreich Inter-pool Immobilien GmbH 

+ CB Richard Ellis GmbH 

+ Knight Frank LLC 

8.2. INTANGIBLE ASSETS 

The development of customer relationships, management contracts and goodwill as of 

31 December 2011 is as follows: 

The position “intangible assets” comprises customer relationships and management contracts as 

well as capitalised software with a carrying amount of € 0.8 million (2010: € 0.7 million). 

in € million Customer relationships and 

management contracts 

Goodwill Total 

Gross value: 

Balance as of 1 January 2011 61.4 176.1 237.5 

Acquisition of subsidiaries 0.0 0.0 0.0 

Investments 0.0 0.0 0.0 

Balance as of 31 December 2011 

Amortisation and impairment: 

61.4 176.1 237.5 

Balance as of 1 January 2011 (57.5) (57.8) (115.3) 

Amortisation (0.9) (0.0) (0.9) 

Impairment (0.1) (3.6) (3.7) 

Balance as of 31 December 2011 

Carrying amount: 

(58.5) (61.4) (119.9) 

Balance as of 31 December 2011 2.8 114.8 117.6 

Balance as of 1 January 2011 3.9 118.4 122.2




Notes 

The development of customer relationships, management contracts and goodwill as of 

31 December 2010 is as follows: 

in € million Customer relationships and 

management contracts 

Goodwill Total 

Gross value: 

Balance as of 1 January 2010 61.4 176.1 237.5 

Acquisition of subsidiaries 0.0 0.0 0.0 

Investments 0.0 0.0 0.0 

Balance as of 31 December 2010 

Amortisation and impairment: 

61.4 176.1 237.5 

Balance as of 1 January 2010 (19.3) (13.4) (32.7) 

Amortisation (7.6) (0.0) (7.6) 

Impairment (30.6) (44.4) (75.0) 

Balance as of 31 December 2010 


(57.5) (57.8) (115.3) 

Balance as of 31 December 2010 3.9 118.4 122.2 

Balance as of 1 January 2010 42.1 162.7 204.8 

The customer relationships and management contracts that were acquired with the purchase of 

the service companies will be amortised on a straight-line basis over a period of five to eleven 

years, unless there are indications of impairment. Amortisation expense is shown on the income 

statement under the position “depreciation, amortisation and other impairment charges”. 

The carrying amounts of the capitalised customer relationships and management contracts as of 

31 December 2011 are as follows: 


Management contract ECO 1.2 1.8 

Customer relationships alt + kelber Group 0.5 0.6 

Customer relationships RESAG Group 1.2 1.5 

2.8 3.9 

These assets were tested for impairment as of 31 December 2011 and on an interim basis if there 

were any indications of impairment. In addition to straight-line amortisation of € 0.9 million, 

impairment charges of € 0.1 million were recognised to RESAG customer relations. 

The impairment charges of € 3.6 million to goodwill in the RESAG and € 0.1 million to customer 

relations resulted from a change in strategy and the new focus of the conwert Group in connection 

with sales activities in Austria. 

These impairment charges were recognised in the Austria regional segment and in the property 

services operating segment. 

In 2010, impairment charges of € 30.6 million were recognised over and above straight-line amortisation 

of € 7.6 million. The impairment charges reflect a change in strategy by conwert and comprise 

€ 14.6 million for the conwert Group management contract and € 14.9 million for the ECO 

management contract. 

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Goodwill was allocated to the following cash-generating units for the purpose of impairment testing: 


Portfolio: letting and development 68.4 68.4 

Portfolio: sale 10.6 10.6 

Services: alt + kelber Group 25.3 25.3 

Services: RESAG Group 10.5 14.1 

114.8 118.4 

The cash-generating unit “alt+kelber“ Group comprises the property service companies in 

Germany. The cash-generating unit “RESAG“ includes the property service companies that are 

located in Austria. 

Goodwill is considered to be impaired when the underlying business activity is discontinued or 

when impairment testing in accordance with IAS 36 leads to such a conclusion. If certain business 

activities within a cash-generating unit are discontinued, IAS 36 calls for impairment testing only 

on the continuing operations in this cash-generating unit. The share of goodwill originally attributed 

to the discontinued business activities is written off in full (impairment charge). 

Impairment charges totalling € 3.7 million were recognised during the reporting year. The entire 

amount is attributable to impairment resulting from a strategic shift in the underlying business 

activities to another cash-generating unit in the conwert Group. 

All impairment charges to goodwill are related to the property services segment. The impairment 

charge of € 3.6 million to Resag Immobilienmakler GmbH was recorded under the Austrian segment. 

In 2010, impairment charges amounted to € 44.4 million: € 23.1 million of this total resulted from 

the termination of the underlying business activities, while the remaining € 21.3 million reflected 

strategic or foreseeable changes in the long-term economic development of specific business activities 

that had a significant impact on the results of the IAS 36 impairment test. 

The recoverable amount represents the relevant criterion for an impairment test as defined in 

IAS 36. It equals the higher of the fair value less costs to sell and the value in use. If the carrying 

amount of an asset exceeds the recoverable amount, the difference is recognised as an impairment 

charge. 

The value in use equals the present value of the estimated future cash flows expected to be derived 

from the assets in a cash-generating unit. The method used to determine the value in use reflects 

an enterprise valuation based on a discounted cash flow procedure. The impairment testing of 

goodwill is based on mid-term company forecasts for cash flows over the next one to eleven years 

and the application of a discount rate that reflects the business activities and risk position of 

the company. The future financial plans were developed on the basis of the approved budget for 

2012, in accordance with the medium- and long-term targets for the development of the property 

portfolios.




Notes 

The calculation of the value in use was based on the assumptions listed below. The following 

section explains the estimation uncertainty connected with these assumptions: 

+ Growth rates beyond the budget year 2011 

+ Increase in personnel and operating expenses 

+ Gross profit margin on the sale of flats and buildings 

+ Volume of property turnover 

+ General development of the property market 

+ Discount rates 

GROWTH RATES 

Average branch assumptions were used to establish growth rates for the individual sub-segments. 

The projects for the forecast period are based above all on the medium-term strategy of the parent 

company for the future development of the property portfolio. 

INCREASE IN PERSONNEL AND OPERATING EXPENSES 

The increase in these costs is dependent on the medium- to long-term development of the economy 

and inflation as well as the estimated resources required to support the above-mentioned 

strategic developments. 

GROSS PROFIT MARGIN, VOLUME OF PROPERTY TURNOVER AND NEW ACQUISITIONS 

The gross profit margin on the sale of flats and buildings is based on an average value for past 

years that reflects ordinary business activities as well as realistic forecasts for the future. The 

volume of property turnover and new property acquisitions is dependent on opportunities offered 

by the property market as well as general economic developments. 

The company generated the following gross profit margins in 2011 and 2010: 

Region 2011 

Gross profit margin 

2010 

Gross profit margin 

Austria 9.3% 13.3% 

Germany 8.6% 12.6% 

Other regions (2.2)% 8.3% 

GENERAL DEVELOPMENT OF THE PROPERTY MARKET 

As in the previous year, the development of the residential property market in Austria was very 

favourable for the conwert Group in 2011. Private investors and foundations with a sound capital 

base have created steady demand for the purchase of individual flats and apartment buildings, 

with institutional investors providing added support for the general market improvement. In 

Germany, the Group has shifted the focus of its residential properties to a higher class clientele, 

and an upward trend has therefore been visible since the end of the financial crisis. The local banks 

are still restrictive in lending to potential customers, which means the key requirements are not 

only an interest in buying but also sufficient equity. In the other regions, where only a small part 

of the portfolio is held, the situation remains tense above all due to continued restrictive lending 

practices by the banks. 

DISCOUNT RATES 

The discount rate is based on the weighted average cost of capital for equity and debt as well as 

the situations in the individual cash-generating units. Given the current economic environment, the 

applied rates reflect a value at the upper end of the interest rate scale. An interest rate sensitivity 

of +/- 50 basis points was therefore selected for the valuation test. 

89



90 

The following long-term discount rates were used: 

Region 2011 2010 

After tax Before tax After tax Before tax 

Austria 5.7% – 6.1% 12.3% – 16.0% 5.5 % – 6.2% 12.1 % – 15.3% 

Germany 5.6% 11.8% 5.5% 10.8% 

SENSITIVITY OF THE ASSUMPTIONS MADE 

In the case of cash-generating units that were not adjusted through impairment charges and are 

subject to only limited current or future market fluctuations, management believes reasonable 

analysis cannot identify any fundamental changes in the assumptions for determining the value 

in use of a cash-generating unit that could cause the carrying amount to significantly exceed the 

recoverable amount 

A change of +/- 50 basis points in the applied discount rates would lead to only an immaterial increase 

or decrease in the impairment charges to goodwill. 

8.3. OTHER PROPERTY, PLANT AND EQUIPMENT 

Other property, plant and equipment comprise furniture, fixtures and office equipment from the 

acquisition of the service companies. Depreciation is reported on the income statement under 

position 17. 

The development of this position is shown in the following table: 


Gross amount: 

Balance as of 1 January 4.5 3.9 

Investments 0.4 0.6 

Balance as of 31 December 

Depreciation and impairment: 

4.9 4.5 

Balance as of 1 January (2.9) (1.9) 

Depreciation (0.7) (1.0) 

Balance as of 31 December 


(3.6) (2.9) 

Balance as of 31 December 1.2 1.6 


8.4. PROPERTIES HELD FOR SALE 

The Group’s held-for-sale properties are located in Austria, Germany, Slovakia and Hungary. Heldfor-sale 

properties are owned by the conwert Group for an average of six to ten years. 

The conwert Group owns 250 objects that are classified as held for sale; these properties have 

285,722 sqm of total usable space. The flats and individual buildings sold in this segment during the 

reporting year amounted to € 243.6 million. 

Held-for-sale properties are measured at the lower of acquisition or production cost and the net realisable 

value. The valuation resulted in an adjustment of € 7.5 million in 2011 (2010: € 5.4 million) 

to reflect the lower market value. This adjustment is presented on the income statement under 

position 13. The properties measured at net realisable value have a total value of € 88.9 million 

(2010: € 92.3 million). 

The market value of these properties as of 31 December 2011 and 2010 was determined by independent, 

court-certified experts in accordance with the general market situation. 

The properties held for sale have a combined carrying amount of € 404.4 million (2010: 

€ 537.1 million). Of this total, € 190.4 million (2010: € 426.5 million) were mortgaged as collateral 

for loans and other liabilities.




8.5. OTHER ASSETS 

Notes 


Receivables due from fiscal authorities 5.1 0.0 


Total 5.8 2.7 

The position ”Miscellaneous“ consists primarily of prepayments on sales commissions and 

payments for expenses related to future periods. Of these other miscellaneous current assets, 

€ 0.7 million (2010: € 1.3 million) will be realised within one year. 

8.6. CASH AND CASH EQUIVALENTS 

This position comprises the following items: 

in million € 2011 2010 

Cash on hand 0.1 0.1 

Deposits with financial institutions 95.7 66.0 

Savings books 0.0 0.1 

Total 95.8 66.2 

The interest rates on deposits with financial institutions are variable and reflect the levels applicable 

to daily demand deposits. The interest rates on bank deposits ranged from 0.06% to 1.26% 

(2010: 0.12% to 1.125%). The fair value of cash and cash equivalents totalled € 95.8 million as of 

31 December 2011 (2010: € 66.2 million). 

8.7. EQUITY 

8.7.1. ISSUED CAPITAL 

The issued capital of the company totals € 853,592,730 (2009: € 853,592,730) and is divided into 

85,359,273 (2009: 85,359,273) bearer shares that carry equal rights to issued capital. The share 

capital is fully paid in. 

TREASURY SHARES 

The extraordinary general meeting of conwert Immobilien Invest SE on 11 October 2010 revoked 

the authorisation of the annual general meeting on 26 May 2009 for the repurchase of the 

company’s shares and, at the same time, authorised the Administrative Board to repurchase the 

company’s shares up to the legally defined maximum of 10% of share capital during a period of 

30 months beginning on this same date. The range for the share purchase was set at € 4.00 to 

€ 14.00 per share. 

This share buyback programme led to the repurchase of 3,861,964 shares by 31 December 2011 

(2010: 1,100,612) for a total price of € 41.6 million (2010: € 10.7 million), including fees, or an average 

price of € 10.78 per share (2010: € 9.72). This represents 4.5% (2010: 1.3%) of issued capital. 

The average price for the shares repurchased in 2011 was € 11.20. No shares were issued during 

the reporting year. 

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92 

The development of the shares outstanding is as follows: 

Number 

of shares 

The authorised capital approved in 2007 totalled € 400,121,590 (2010: € 400,121,590), and is divided 

into 40,012,159 (2010: 40,012,159) bearer shares. Furthermore, the company has authorised 

capital of € 26,674,770 (2010: € 26,674,770) that was approved in 2006; it is divided into 2,667,477 

(2010: 2,667,477) bearer shares. Details on the convertible bond are provided under note 8.10.2. 

8.7.2. DIVIDEND 

The dividend approved by the annual general meeting on 20 May 2011 was paid on 30 May 2011. 

The dividend attributable to 11,172,936 of the conwert shares held by Albona Limited was due 

for payment, without interest, on 31 December 2011. The dividend attributable to 4,154,158 of the 

conwert shares held by Albona Limited is due for payment on 10 May 2012. The remaining outstanding 

dividend due to Albona Limited amounts to € 1.2 million and is included under other current 

financial liabilities. 


(Gross) dividend paid in 2011 

for the 2010 financial year 

in € million Number of 

common shares 

(excl. treasury shares) 

Per share 

in € 

25.0 83,397,945 0.30 

2010 

(Gross) dividend paid in 2010 

for the 2009 financial year 

in € million Number of 

common shares 

(excl. treasury shares) 

Value, incl. fees 

in € million 


Balance on 31.12.2010 84,258,661 

Shares repurchased (2,761,352) 30.9 

Balance on 31.12.2011 

2010 

81,497,309 

Balance on 31.12.2009 80,991,875 

Shares repurchased (3,029,913) 26.7 

Shares issued 6,296,699 64.8 

Balance on 31.12.2010 84,258,661 

Per share 

in € 

19.8 79,157,871 0.25




Notes 

8.8. DEFERRED TAXES 

Deferred tax assets and deferred tax liabilities as of 31 December 2011 and 2010 are the result of 

the following timing differences between the carrying amounts of assets and liabilities in the IFRS 

consolidated financial statements and the tax bases of these items: 


Assets Liabilities Assets Liabilities 

IAS 40 valuation of investment property 0.0 75.5 0.0 62.5 

Fair value adjustments to other assets 9.7 0.0 16.1 0.0 

Total 9.7 75.5 16.1 62.5 

Valuation of derivatives 33.5 0.0 23.7 0.0 

Fair value adjustments to other liabilities 0.0 1.3 0.0 7.3 

Tax loss carryforwards 32.9 0.0 12.8 0.0 

Deferred tax assets / deferred tax liabilities 76.2 76.8 52.6 69.8 

Offset of deferred tax assets / deferred tax liabilities (54.1) (54.1) (34.1) (34.1) 

Net deferred tax assets / deferred tax liabilities 22.1 22.7 18.4 35.7 

All changes in deferred tax assets and deferred tax liabilities were recognised through profit or 

loss, with the exception of deferred taxes on the changes in cash flow hedges and other changes in 

other comprehensive income totalling € 13.7 million (2010: € 2.9 million). 

The changes in deferred taxes comprise the following items: 


Deferred tax assets 18.4 3.8 

Deferred tax liabilities (35.7) (50.0) 

Carrying amounts as of 31 December of the prior year (17.2) (46.2) 

Deferred taxes arising from changes in the consolidation range 2.9 13.1 

Deferred taxes arising from temporary differences 4.7 11.2 

Deferred taxes arising from changes in income tax rates (0.8) (1.2) 

Deferred taxes arising from changes in temporary differences on derivatives 9.8 6,7 

Other differences 0.0 (0.7) 

Thereof 

(0.6) (17.2) 

Deferred tax assets 22.1 18.4 

Deferred tax liabilities (22.7) (35.7) 

8.9. OTHER CURRENT LIABILITIES 

Other current liabilities are comprised primarily of value added tax liabilities as well as liabilities 

arising from property acquisition taxes and registration fees. 

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94 

8.10. FINANCIAL INSTRUMENTS 

8.10.1. FINANCIAL ASSETS 

Non-current financial assets consist primarily of shares in Vienna Estate Immobilien AG, an 

Austrian property holding company, and shares in CD Deutsche Eigenheim AG, a German property 

company, which are classified as available for sale and carried at cost. 

Trade accounts receivable (less impairment charges recognised as of 31 December 2011) total 

€ 30.9 million (2010: € 56.8 million) and comprise receivables from the sale of objects and shares 

in properties as well as rents receivable and receivables due to the property, management and 

property service companies. 

The purchase prices for shares in properties are generally paid without delay, and impairment 

charges are therefore not recognised. The agreements for the sale of buildings and property 

companies call for payment when the title is transferred or short-term payment with settlement 

through a trustee. Therefore, impairment charges are not recognised to these items. 

Trade accounts receivable are related to the rental business and do not normally have specific 

payment terms. The recognition of impairment charges to these items is based on experience with 

default. 

Rents receivable of € 14.1 million (2010: € 16.3 million) were adjusted through impairment charges 

to reflect any loss in value as of the balance sheet date. The conwert Group holds deposits of 

€ 1.5 million (2010: € 1.9 million) as security for these outstanding items. Overdue receivables do 

not represent a material valuation risk for the Group. 

The following tables show the age structure of rents receivable for 2011 and 2010 that were not 

reduced through impairment charges: 



Up to 30 

days 

The changes in impairment losses are as follows: 

30 to 60 

days 

60 to 90 

days 

90 to 120 

days 

Over 120 

days 

Austria, Germany, CEE 7.5 0.9 0.2 0.8 9.7 

2010 


Up to 30 

days 

30 to 60 

days 

60 to 90 

days 

90 to 120 

days 

Over 120 

days 

Austria, Germany, CEE 9.8 0.9 0.6 1.0 11.5 



Impairment of receivables – addition 2.2 5.7 

Derecognition to reflect non-collectability / reversal to reflect payment 4.6 1.2 

Balance as of 31 December 5.1 7.5 

The impairment testing of rents receivable also includes any changes in the credit standing of 

tenants as of the relevant balance sheet date. Only individual adjustments are recognised. There is 

no material concentration of credit risk because the Group has a very broad tenant base and there 

is no concentration or correlation. Management is therefore convinced that no provisions for risk 

are required above and beyond the previously recognised impairment losses.




Notes 

Other current financial assets are classified as follows: 


Trust funds from the sale of properties 40.5 19.7 

Short-term financing and loans 7.9 1.4 

Accrued interest on derivatives, resp. positive market valuation 1.4 10.8 


Total 59.4 40.1 

Other receivables and assets have a remaining term of less than one year. 

Other current financing and loans include no receivables due from related parties (2010: 

€ 0.0 million). Additional information is provided under note 13.3 (Related party transactions). 

8.10.2. FINANCIAL LIABILITIES 

The components of the decline in non-current and current loans and borrowings from financial 


Balance on 1 January 1,668.0 1,289.1 

New borrowings 186.7 303.8 

Addition from expansion of the consolidation range (ECO Group) 0.0 369.6 

Scheduled repayments (52.1) (41.1) 

Special repayments due to the sale of properties (387.8) (253.4) 

Balance on 31 December 1,414.8 1,668.0 

institutions (excluding the convertible bond) are shown in the following table: 

Five Austrian and German financial institutions hold a share of approx. € 713.5 million in these 

current and non-current loans and borrowings. The obligations to these banks range from 

€ 72.0 million to € 268.4 million. A further seven financial institutions have a share of approx. 

€ 342.9 million, which consists of individual obligations ranging from € 33.7 million to 

€ 67.7 million. The remaining balance of approx. € 358.4 million is distributed among a further 39 

Austrian and foreign banks, whereby the individual obligations are less than € 26.8 million. 

The liabilities arising from loans and borrowings were reduced by related fees and transaction 

costs of € 7.5 million (2010: € 10.8 million). 

95



96 

The terms of interest-bearing financial liabilities (before the deduction of transaction costs) are 

shown in the following table. This table also provides an overview of the Group’s fixed and variable 

financing: 

2011 in € million Financing volume 

(before deduction of 

transaction costs) 

Thereof 

at fixed 

interest rates 

Thereof 

at variable 

interest rates 

Thereof remaining term up to 1 year 248.5 25.6 222.9 

Thereof remaining term between 1 and 5 years 727.7 365.7 361.9 

Thereof remaining term over 5 years 719.9 41.6 678.3 

Total 1,696.1 432.9 1,263.1 

2010 in € million 

Thereof remaining term up to 1 year 235.0 57.4 177.6 

Thereof remaining term between 1 and 5 years 597.8 235.8 362.0 

Thereof remaining term over 5 years 1,171.8 237.1 934.7 

Total 2,004.6 530.3 1,474.3 

Loans and borrowings with a nominal value of € 91.6 million were reported under current liabilities 

as of 31 December 2011 because of cancellation rights that can be exercised by either contract 

party at any time. These loan agreements and the underlying internal bank approvals for this financing 

have terms ending between 2024 and 2030. Based on the intent of the parties and the current 

economic status of financing, the conwert Group estimates the following probable term structure 

for these liabilities: € 4.8 million in the one-year segment, € 24.0 million in the one- to five-year 

segment and € 62.7 million over five years. 

The current loans and borrowings reported on the balance sheet include € 248.5 million, which represents 

the non-current portion of loans and borrowings attributable to held-for-sale properties. 

Of the € 1,263.1 million in variable interest financing, approx. € 952.8 million is covered by interest 

rate hedges. A total of 84.0% of the loans and borrowings held by the conwert Group (including 

€ 39.9 million of loans from building societies) is therefore hedged against future fluctuations in 

interest rates. 

The amounts due to financial institutions represent variable and fixed interest-bearing loans and 

borrowings. The following table provides an overview of the fixed interest loans and borrowings, 

which total € 66.0 million (2010: € 92.9 million).




Notes 

Type of financing Effective interest rate 

as of 31.12.2011 in % 

Due on Carrying amount 


Investment loan(s) 1.00 01.10.2043 0.3 



















Type of financing Effective interest rate 

as of 31.12.2010 in % 

Due on Carrying amount 


























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98 

A detailed classification of the creditors and terms is not practical because of the large number 

of loans and broad distribution of lending institutions. In 2011 the weighted average interest rate 

(excluding non-cash effects) equalled 4.37% for short-term loans and borrowings (2010: 3.82%) 

and 4.34% (2010: 4.17%) for long-term loans and borrowings. The conwert Group has unused credit 

lines of € 8.5 million at the end of the reporting year (2010: € 9.2 million). 

Loans and borrowings of € 1,368.4 million (excluding short-term working capital credits) are secured 

by mortgages (2010: € 1,604.6 million). In addition, an average volume of current and future 

rents receivable have been assigned. 

Non-current loans and borrowings include finance lease liabilities with terms ranging from 180 

to 300 months. Lease payments amounted to € 25.2 million in 2011 (2010: € 10.6 million) 

and comprised € 23.5 million (2010: € 9.0 million) of principal repayments and € 1.7 million (2010: 

€ 1.6 million) of interest. 

2011 in € million 

The present value test and the term test formed the main criteria for classification as a finance 

lease. These lease agreements include extension and price adjustment clauses as well as an option 

that entitles the conwert Group to purchase the properties at an advantageous price at the end 

of the lease term. 

The most important conditions of the leases are as follows: 

+ The lessee takes over the object of the lease agreement for use in its present condition. 

+ The lessee is entitled to the risks and rewards arising from rental agreements for space in the 

leased object that are valid when the lease is concluded as well as rental agreements that will be 

concluded in the future. 

+ The lessee is responsible for administration of the rental agreements. 

+ At the end of the lease term, the lessee has the option to acquire the leased object as well as the 

shares in the lessor company. 

BOND LIABILITIES 

In 2004 the Group issued 100,000 bearer bond certificates with a nominal value of € 500 each, for 

a total value of € 50,000,000. The issue price of these bond certificates was set at 101.441. The 

surplus of proceeds received from the issue was released to profit or loss over the seven-year term 

of the bonds, which began on 1 December 2004 and ended on 30 November 2011. The bond certificates 

called for bullet repayment, and were repaid at their nominal value on 1 December 2011. 

Total 

Thereof remaining 

term 

up to 1 year 


term 

between 

1 and 5 years 


term 

over 5 years 

Minimum lease payments 

Less: 

90.4 2.5 10.7 77.2 

Future financing costs 34.8 1.5 6.3 27.0 

Present value of lease obligations 55.6 

Net carrying amount 55.6 


Minimum lease payments 

Less: 

147.2 3.0 16.1 128.0 

Future financing costs 68.1 1.9 11.7 54.6 

Present value of lease obligations 79.1 

Net carrying amount 79.1




Notes 

CONVERTIBLE BOND 

On 7 November 2007 the Group issued a convertible bond with a price of € 0.1 million per certificate 

and a total value of € 196.4 million. The conversion price equals 130% of the common share price 

on the date the convertible bond was issued. The conversion rights can be exercised at any time 

from 27 December 2007 to 3 November 2014. If the conversion right is not exercised, the bond will 

be repaid on 12 November 2014 at a price € 0.11 million per certificate. Interest will be paid each 

year until settlement at a rate of 1.5% per year. 

The bondholder is entitled to cancel some or all of the bonds in his/her possession that have not 

been converted or redeemed as of 12 November 2012. The issuer is entitled to redeem the bond 

prematurely at the applicable redemption price on or after 24 November 2010, if the price of the 

common shares to be delivered on conversion equals at least 130% of the redemption amount on 

20 of 30 successive stock exchange days. The company started to repurchase the convertible bonds 

during the fourth quarter of the 2008 financial year. Convertible bonds with a nominal value of 

€ 45.4 million (2010: € 34.3 million) had been repurchased by 31 December 2011 for € 32.3 million 

(incl. transaction costs, 2010: € 21.0 million). This represents 3,273,252 (2010: 2,393,580) shares of 

stock. The conversion price was adjusted from € 14.33 to € 13.87 to reflect the dividend. 

In 2011 repurchased convertible bond certificates with a nominal value of € 41.9 million were cancelled, 

which reduced the original nominal volume from € 196.4 million to € 154.5 million. 

In the first quarter of 2010 the conwert Group issued a convertible bond with a price of € 0.1 million 

per certificate and a total value of € 135.0 million. This bond has a six-year term ending on 1 February 

2016. The bondholders have the right to redeem their bond certificates prematurely four years 

after the date of issue at the nominal value including accrued interest. The convertible bond certificates 

were issued at 100% of the nominal value of € 0.1 million. Interest is paid semi-annually at 

a rate of 5.25% per year. The conversion price was adjusted from € 11.60 to € 11.22 to reflect the 

dividend payment. 

The net proceeds from the issue of the bond were classified into a debt component and an equity 

component (which represents the amount required to convert the liability into equity). The classification 

as of 31 December 2011 and 2010 is shown below: 

CONVERTIBLE BOND 2010 – 2016 


Issue proceeds (excl. proportional share of transaction costs), 

less repurchases 

135.0 

Debt component as of 31 December 126.6 

Equity component 10.2 




135.0 



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The equity component of the convertible bond is attributable to the conversion rights connected 

with the bond, and represents the difference between the issue proceeds and the present value 

of the debt component as determined on the basis of a customary market interest rate of 6.9% 

(2010: 6.9%). The equity component of € 10.2 million, less a proportional share of € 0.1 million for 

transaction costs, was added to equity. 

The debt component is carried at amortised cost less transaction costs of € 1.0 million. Interest 

expense for the convertible bond totalled € 8.8 million in 2011, and comprised cash interest 

payments of € 7.1 million, a write-up of € 1.5 million to the bond component and the release of 

€ 0.2 million in issue costs. 

CONVERTIBLE BOND 2007 – 2014 




154.5 






162.1 



The equity component of the convertible bond is attributable to the conversion rights connected 

with the bond, and represents the difference between the issue proceeds and the present value 

of the debt component as determined on the basis of a customary market interest rate of 6.2% 

(2010: 6.2%). The repurchase of convertible bonds during the reporting period reduced this equity 

component by € 0.6 million to € 28.5 million. 

The debt component is carried at amortised cost less transaction costs of € 1.2 million (2010: 

€ 1.5 million). The debt component amounted to € 162.5 million on the issue date. Interest expense 

for the convertible bond totalled € 9.0 million in 2011, and comprised cash interest payments of 

€ 2.3 million, a write-up of € 6.3 million to the bond component and the release of € 0.3 million in 

issue costs. 

The financing contributions from tenants reported on the consolidated balance sheet are attributable 

to new residential construction. These contributions must be refunded to the tenants when a 

lease is terminated. However, the landlord has a right to receive a financing contribution from the 

new tenant when the object is let again, and these amounts are therefore recorded as non-current 

liabilities. 

Other current financial liabilities are classified as follows: 

in € million 2010 2009 

Deposits 1.5 1.9 

Prepayments of rents 0.0 0.7 

Property management 5.1 5.6 


Total 23.7 19.9




The term structure of the financial liabilities held by the Group is shown in the following table. This 

data is based on the non-discounted contractual payments. The payment flows from derivative 

financial instruments are included under non-current loans and borrowings. 



Interest-bearing loans and borrowings of € 907.8 million (2010: € 1,421.5 million) have a term of 

more than five years, and include € 374.8 million (2010: € 659.9 million) with a remaining term of 

more than ten years. 

8.10.3. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGES 

The conwert Group uses a variety of derivative financial instruments to manage interest rate risk. 

These instruments include interest rate swaps and interest rate caps. The fair value of the hedges 

is based on market valuation as of the balance sheet date. 

Total 


term 

up to 1 year 


term 

between 

1 and 5 years 


term 

over 5 years 

Non-current loans and borrowings 1,554.6 180.5 588.6 785.5 

Convertible bond 325.2 9.5 315.7 0.0 

Financing contributions from tenants 14.6 0.0 0.0 14.6 

Other non-current liabilities 4.6 0.0 3.5 1.1 

Current loans and borrowings 314.4 128.7 63.4 122.3 

Trade accounts payable 13.5 13.5 0.0 0.0 

Other financial liabilities 23.7 23.7 0.0 0.0 

2010 


Notes 

Total 


term 

up to 1 year 


term 

between 

1 and 5 years 


term 

over 5 years 

Non-current loans and borrowings 1,903.9 211.3 565.3 1.127.3 

Bond liabilities 52.2 52.2 0.0 0.0 

Convertible bond 346.4 9.6 198.2 138.6 

Financing contributions from tenants 16.4 0.0 0.0 16.4 

Other non-current liabilities 5.3 0.3 3.6 1.4 

Current loans and borrowings 477.8 60.2 123.4 294.2 

Trade accounts payable 40.7 40.7 0.0 0.0 

Other financial liabilities 19.9 18.0 0.0 1.9 

101



102 

Financial institution 

The following table shows the value of the derivative financial instruments held by the conwert 

Group as of 31 December 2011, which were recorded as cash flow hedges without recognition 

through profit or loss in accordance with IAS 39. 

Derivative Beginning End Hedge 

Reference 

value as of 


in mill. € 

Fixed 

interest 

rate 

Reference 

interest rate 

Market value 


in mill. € 

Aareal Bank AG Interest rate swap 30.06.06 31.05.16 Interest rate change 12.6 4.300 3-M-EURIBOR (1.4) 

Barclays Capital Interest rate swap 31.07.07 26.06.17 Interest rate change 100.0 4.080 3-M-EURIBOR (13.9) 



Barclays Capital Zins-Floor 30.09.10 31.03.20 Interest rate change 150.0 3.990 3-M-EURIBOR (26.9) 

Barclays Capital Interest rate cap 01.07.10 01.04.20 Interest rate change 20.0 4.000 3-M-EURIBOR 0.6 

BAWAG P.S.K. AG Interest rate swap 30.09.09 30.06.16 Interest rate change 26.0 4.150 3-M-EURIBOR (3.1) 



DZ Bank AG Interest rate cap 19.05.10 30.06.15 Interest rate change 1.7 4.000 3-M-EURIBOR 0.0 

Kreissparkasse Köln Interest rate swap 01.10.08 01.10.18 Interest rate change 7.0 4.500 3-M-EURIBOR (1.2) 

Landesbank Berlin Interest rate swap 31.12.09 31.05.16 Interest rate change 15.6 4.150 3-M-EURIBOR (2.0) 

Landesbank Berlin Interest rate cap 30.04.09 30.09.17 Interest rate change 0.4 4.200 3-M-EURIBOR 0.0 

Landesbank Berlin Interest rate swap 31.03.08 31.03.18 Interest rate change 5.0 4.280 3-M-EURIBOR (0.8) 

Landesbank Hessen-Thüringen Interest rate swap 02.10.08 30.06.17 Interest rate change 20.0 4.870 3-M-EURIBOR (3.5) 


Landesbank Hessen-Thüringen Zins-Collar 30.07.08 30.04.18 Interest rate change 37.0 2.750 / 4.800 3-M-EURIBOR (2.7) 

Raiffeisenbank International AG Interest rate swap 10.07.08 06.07.17 Interest rate change 50.0 4.380 3-M-EURIBOR (7.6) 




Raiffeisenbank International AG Interest rate cap 31.03.10 31.03.20 Interest rate change 12.3 4.000 3-M-EURIBOR 0.3 






UniCredit Bank Austria AG Interest rate swap 17.06.05 17.06.15 Interest rate change 2.0 3.680 3-M-EURIBOR (0.2) 



UniCredit Bank Austria AG Interest rate cap 01.04.10 31.03.20 Interest rate change 20.0 4.000 3-M-EURIBOR 0.4 

Raiffeisenlandesbank Niederösterreich-Wien AG Interest rate cap 01.04.10 01.04.20 Interest rate change 20.0 4.000 3-M-EURIBOR 0.5 

Raiffeisenlandesbank Niederösterreich-Wien AG Interest rate cap 01.07.10 01.04.20 Interest rate change 40.0 4.000 3-M-EURIBOR 0.9 

Total (113.7) 


As of 31 December 2011 the conwert Group held the following derivative financial instruments that 

were recognised through profit or loss: 


Reference 

value as of 


in mill. € 

Fixed 

interest 

rate 

Reference 

interest rate 

Market value 


in mill. € 

Hypo Landesbank Vorarlberg Interest rate swap 15.03.10 15.03.13 Interest rate change 10.7 4.150 3-M-EURIBOR (0.4) 

Hypo Landesbank Vorarlberg Interest rate cap 02.01.06 01.01.16 Interest rate change 1.9 3.500 3-M-EURIBOR 0.0 






Österr. Volksbanken AG Interest rate swap 31.03.06 01.10.27 Interest rate change 9.8 3.955 3-M-EURIBOR (1.4) 











Raiffeisenbank International AG Interest rate swap 15.03.06 31.12.25 Interest rate change 23.8 4.430 SMR issuers (2.3) 



Investkredit AG Interest rate cap 30.12.05 30.06.15 Interest rate change 5.6 3.250 3-M-EURIBOR 0.0 

Investkredit AG Interest rate swap 30.12.05 31.12.15 Interest rate change 5.9 3.450 3-M-EURIBOR (0.4) 

Total (23.6)




The following table shows the value of the derivative financial instruments held by the conwert 

Group as of 31 December 2010, which were recorded as cash flow hedges without recognition 

through profit or loss in accordance with IAS 39. 


Notes 


Reference 

value as of 

31.12.2010 

in mill. € 

Fixed 

interest 

rate 

Reference 

interest rate 

Market value 

31.12.2010 

in mill. € 

Barclays Capital Zins-Swap 31.07.07 26.06.17 Interest rate change 100.0 4.080 3-M-EURIBOR (10.0) 



Barclays Capital Zins-Floor 30.09.10 31.03.20 Interest rate change 150.0 3.990 3-M-EURIBOR (18.3) 

Barclays Capital Zins-Cap 01.04.10 01.04.20 Interest rate change 20.0 4.000 3-M-EURIBOR 1.0 

BAWAG P.S.K. AG Zins-Swap 30.09.09 30.06.16 Interest rate change 26.0 4.150 3-M-EURIBOR (2.4) 

BAWAG P.S.K. AG Zins-Swap 01.10.07 01.10.20 Interest rate change 30.0 4.490 3-M-EURIBOR (3.8) 

DZ Bank AG Zins-Cap 19.05.10 30.06.15 Interest rate change 1.7 4.000 3-M-EURIBOR 0.0 

EUROHYPO AG Zins-Swap 30.06.06 31.05.16 Interest rate change 13.1 4.150 3-M-EURIBOR (1.1) 

Hypo Landesbank Vorarlberg Zins-Swap 15.03.10 15.03.13 Interest rate change 11.1 4.150 3-M-EURIBOR (0.7) 

Hypo Landesbank Vorarlberg Zins-Cap 02.01.06 01.01.16 Interest rate change 2.1 3.500 3-M-EURIBOR 0.0 





Investkredit AG Zins-Swap 09.06.06 30.06.14 Interest rate change 2.6 4.250 6-M-EURIBOR (0.2) 




Investkredit AG Zins-Cap 30.12.05 30.06.15 Interest rate change 6.3 3.250 3-M-EURIBOR 0.1 


Kreissparkasse Köln Zins-Swap 01.10.08 01.10.18 Interest rate change 7.0 4.500 3-M-EURIBOR (0.9) 

Landesbank Berlin Zins-Swap 31.12.09 31.05.16 Interest rate change 16.5 4.150 3-M-EURIBOR (1.5) 

Landesbank Berlin Zins-Cap 30.04.09 30.09.17 Interest rate change 0.4 4.200 3-M-EURIBOR 0.0 

Landesbank Berlin Zins-Swap 31.03.08 31.03.18 Interest rate change 5.0 4.280 3-M-EURIBOR (0.5) 

Landesbank Hessen-Thüringen Zins-Swap 02.01.07 30.12.11 Interest rate change 27.0 3.870 3-M-EURIBOR (0.7) 






Landesbank Hessen-Thüringen Zins-Collar 30.07.08 30.04.18 Interest rate change 37.0 2.750 / 4.800 3-M-EURIBOR (1.3) 

Österr. Volksbanken AG Zins-Swap 31.03.06 01.10.27 Interest rate change 10.3 3.955 3-M-EURIBOR (0.7) 

Raiffeisenbank International AG Zins-Swap 24.11.04 24.11.11 Interest rate change 25.0 3.740 3-M-EURIBOR (0.6) 
















Raiffeisenbank International AG Zins-Cap 31.03.10 31.03.20 Interest rate change 12.3 4.000 3-M-EURIBOR 0.6 





Raiffeisenbank International AG Zins-Swap 15.03.06 31.12.25 Interest rate change 25.5 4.430 SMR Emittenten (0.4) 


UniCredit Bank Austria AG Zins-Swap 17.06.05 17.06.15 Interest rate change 2.0 3.680 3-M-EURIBOR (0.1) 





UniCredit Bank Austria AG Zins-Cap 01.04.10 31.03.20 Interest rate change 20.0 4.000 3-M-EURIBOR 0.9 

Raiffeisenlandesbank Niederösterreich-Wien AG Zins-Cap 01.03.04 01.03.11 Interest rate change 20.0 4.000 3-M-EURIBOR 0.0 



Total (89.31) 

103



104 

8.10.4. FAIR VALUE OF FINANCIAL INSTRUMENTS 

The following methods and assumptions were used to estimate the market value of the individual 

financial instruments: 

CASH AND CASH EQUIVALENTS 

The carrying amount of cash and cash equivalents approximates market value because of the 

relatively short terms of these financial instruments. 

CURRENT INTEREST-BEARING LOANS AND BORROWINGS / LOANS AND RECEIVABLES 

The carrying amount of these liabilities approximates market value (fair value) because of their 

relatively short term. This also applies to receivables and originated loans. 

NON-CURRENT INTEREST-BEARING LOANS AND BORROWINGS 

The fair value of non-current interest-bearing loans and borrowings is based on the current interest 

rates for liabilities with the same maturity. The fair value of non-current loans and other liabilities 

with variable interest rates approximates the carrying amounts of these items. The market 

value of fixed interest loans and borrowings totalled € 73.9 million as of 31 December 2011 (2010: 

€ 98.9 million) (also see note 2.4.8.2). 

CONVERTIBLE BOND LIABILITIES 

The fair value of the two convertible bonds was € 282.9 million as of 31 December 2011 (2010: 

€ 304.7 million). 

DERIVATIVE FINANCIAL INSTRUMENTS 

The fair value of derivatives held as hedges or for trading purposes is based on the market value of 

these instruments as of the balance sheet date. The fair value of derivative financial instruments 

was calculated by discounting the expected future cash flows at regular way interest rates. 

AVAILABLE-FOR-SALE FINANCIAL ASSETS 

The market price was used to determine the fair value of listed available-for-sale financial assets 

and financial assets held for trading. 

The following table shows the carrying amount and the fair value of the financial assets and liabilities 

held by the conwert Group, classified by category: 

in € million Fair value 


Fair value 

2010 

Carrying 

amount 


Carrying 

amount 

2010 

Derivative financial instruments recognised at 

fair value directly in equity 

(113.7) (94.0) (113.7) (94.0) 

Derivative financial instruments carried at fair value (23.6) 7.0 (23.6) 7.0 

Available-for-sale financial instruments 2.2 3.7 2.2 3.7 

Loans and receivables 186.1 165.8 186.1 165.8 

Financial liabilities carried at amortised cost 1,897.7 2,125.6 1,888.6 2,090.8




Notes 

As of 31 December 2011 the conwert Group held the following financial instruments that were 

carried at fair value. The conwert Group uses the following hierarchy to determine and present the 

fair value of financial instruments by valuation category: 

Level 1: Listed (unadjusted) prices on active markets for similar assets or liabilities. 

Level 2: Methods for which all input parameters that have a material effect on the recognised fair 

value can be monitored, either directly or indirectly. 

Level 3: Methods that rely on input parameters that cannot be monitored but have a material effect 

on the recognised fair value. 

The following table shows the classification of the fair value of financial assets and liabilities held 

by the conwert Group (by level) for 2011 and 2010: 

2011 in € million Level 1 Level 2 Level 3 

Derivative financial instruments with effective hedges 0.0 (113.7) 0.0 

Derivative financial instruments 0.0 (23.6) 0.0 

Convertible bond 282.9 0.0 0.0 

2010 in € million Level 1 Level 2 Level 3 

Non-current financial assets 0.0 (94.0) 0.0 

Derivative financial instruments with effective hedges 0.0 7.0 0.0 

Derivative financial instruments 50.3 0.0 0.0 

Bonds 304.7 0.0 0.0 

9. NOTES TO THE CASH FLOW STATEMENT 

Cash flow from the acquisition of assets and liabilities in the form of subsidiaries: 


Cash and cash equivalents 0.0 (39.6) 

Receivables and other assets (0.2) (12.0) 

Properties held for sale (0.9) (146.0) 

Non-current assets 0.0 (603.5) 

Liabilities and provisions 0.0 459.2 

Non-controlling interests 0.0 31.1 

Net assets/liabilities acquired = purchase price (1.1) (310.8) 

Cash and cash equivalents 0.0 39.6 

Gain on an acquisition below market price 0.0 95.3 

Fair value of previous at-equity investment 0.0 60.7 

Net cash flow (1.1) (115.2) 

105



106 

Cash flow from the disposal of assets and liabilities in the form of subsidiaries: 


Receivables and other assets 2.2 1.3 


Liabilities and provisions (61.1) 0.0 

Non-current liabilities 0.0 0.0 

Net assets/liabilities sold 49.4 3.8 

Loss on the disposal of subsidiaries (107.7) (3.5) 

Net cash flow 58.3 0.3 

10. OPERATING LEASES 

10.1. CLAIMS ARISING FROM OPERATING LEASES 

The conwert Group has concluded operating leases with apartment tenants as part of its rental 

activities. These rental agreements can be terminated by the tenants at any time on short notice 

(between one and three months). Therefore, the non-cancellable part of the lease represents only 

three month’s rental income on average. The respective amount for apartment and commercial 

rentals is € 12.3 million (2010: € 13.0 million). 

10.2. OTHER FINANCIAL OBLIGATIONS ARISING FROM OPERATING LEASES 

The conwert Group has concluded leases for motor vehicles and office equipment. The average 

term of these leases is three to five years. All leases were concluded at normal market conditions. 

11. CONTINGENT LIABILITIES AND OTHER FINANCIAL OBLIGATIONS 

The conwert Group held no contingent liabilities due to third parties as of 31 December 2011 (2010: 

€ 0.6 million). 

12. OBJECTIVES AND POLICIES OF FINANCIAL RISK MANAGEMENT 

The principal financial instruments used by the Group – with the exception of derivative financial 

instruments – include bank loans and overdrafts, bonds, trade payables and loans granted. The 

main purpose of these financial instruments is to finance the Group’s operating activities. The 

conwert Group has various financial assets such as trade receivables, receivables from the sale of 

properties and flats, rents receivable as well as cash and short-term deposits that result from its 

business operations. 

The conwert Group also holds derivative financial instruments. These instruments include interest 

rate swaps, which are designed to manage the interest rate risk arising from the Group’s business 

operations and financing sources. 

The major risks arising from the Group‘s financial instruments are interest-based cash flow risks, 

liquidity risk, foreign currency risk and credit risk. In order to manage the individual types of risk, 

management has developed and implemented the following strategies and processes. 

INTEREST RATE RISK 

The conwert Group is exposed to a risk arising from changes in market interest rates primarily 

through its variable rate financial liabilities. Interest costs are managed with a combination of 

fixed and variable interest rate borrowings, whereby the objective is to maintain the majority of 

interest-bearing debt at fixed rates based on continuous monitoring of the financial markets. In order 

to meet this objective, the Group enters into interest rate swaps that require it to exchange the 

difference between fixed and variable rate interest amounts calculated by reference to an agreed 

nominal principal with the contract partner at specified intervals. As of 31 December 2011 84.0% 

(2010: 85.3%) of the Group’s borrowings carried fixed interest rates.




Notes 

OVERVIEW OF INTEREST RATE RISK 

The following table shows the sensitivity of Group earnings before tax to a reasonably possible 

change in interest rates through the effects on variable rate borrowings. Interest-bearing borrowings 

are concluded on the basis of the 3-month Euribor, 6-month Euribor and 12-month Euribor 

as well as combinations of the secondary market yield and the Euribor. The 3-month Euribor is 

the dominant base rate for variable interest borrowings, and the following sensitivity analysis was 

therefore limited to this area. 

Increase/decrease 

in basis points 

Due to the currently low level of interest rates and expectations for a continuation of this situation 

in 2012, an interest calculation that simulates interest rate trends with a decrease of 50 and 100 

basis points at specific times would be based on a negative reference curve. Since this type of 

development is unlikely, any simulation that uses such parameters would almost certainly lead to 

incorrect conclusions. The parameters for the 2011 simulation were therefore reduced to minus 

10 and minus 25 basis points. 

The results shown above are partly offset by the recognition in other comprehensive income of the 

effects arising from the fair value measurement of derivative financial instruments. The effects of 

derivatives on other comprehensive income in the form the cash flow hedge reserve totalled minus 

€ 50.1 million in 2011 (2010: minus € 1.4 million). 

The following table shows the sensitivity of equity to a reasonably possible change in interest rates 

through the effects on variable rate borrowings. 

Increase/decrease 

in basis points 

Effect on earnings before tax 



3-month Euribor +50 (1.1) 

3-month Euribor +100 (2.2) 

3-month Euribor -10 0.2 

3-month Euribor 

31.12.2010 

-25 0.6 

3-month Euribor + 50 (1.0) 

3-month Euribor + 100 (2.0) 

3-month Euribor - 50 1.0 

3-month Euribor - 100 2.0 

Effect on equity 



3-month Euribor + 50 30.1 


3-month Euribor - 10 (31.7) 

3-month Euribor 

31.12.2010 

-25 (65.1) 





107



108 

FOREIGN CURRENCY RISK 

The Austrian and German subsidiaries of the conwert Group do not hold any significant borrowings 

in foreign currencies. Fluctuations in the Czech Krone, Slovakian Krone and Hungarian Forint 

versus the Euro are monitored on a regular basis because of the borrowings concluded in these 

currencies. The Group is therefore in a position to take immediate action in the event of negative 

developments. These possible foreign currency fluctuations do not have a material effect on Group 

earnings or equity. 

CREDIT RISK 

Credit risk represents the risk that a business partner will be unable to meet the obligations arising 

from a financial instrument or framework contract, and consequently bring about a financial 

loss. Business operations expose the conwert Group to default risk as well as various risks connected 

with financing activities, e.g. deposits with banks and financial institutions, foreign currency 

transactions and other financial instruments. Credit risk, or the risk of delayed payment by a 

contract partner, is managed through credit examinations, credit limits and verification routines. 

The conwert Group only works with financial partners whose ratings have reflected a sound credit 

standing up to now, and credit risk is therefore limited. However, even financial partners with excellent 

credit ratings may carry a certain degree of credit risk and the Group therefore monitors 

developments on capital markets continuously. The maximum – but unlikely – credit risk equals 

€ 196.6 million (2010: € 169.5 million). 

LIQUIDITY RISK 

The conwert Group uses a liquidity planning tool to continuously monitor liquidity and thereby 

prevent a liquidity shortage. The objective of this process is to establish a balance between the 

continuous coverage of financing requirements and thereby maintain sufficient financial flexibility 

through the use of overdrafts, bank loans, bonds, preferred shares, finance leases and leasepurchase 

agreements. All sales of individual apartments are formalised through a notary public or 

attorney as the trustee in order to protect the financial assets of both the buyer and the seller. As 

a rule, the sales of buildings are also executed by a notary public or attorney as the trustee. Incoming 

payments are monitored with a treasury software tool. Liquidity flows in the rental segment 

are monitored by the responsible facility management companies, which make monthly transfers 

on account to the Group. Rents receivable are protected by deposits collected from tenants. The 

payment of rents is also monitored with the above-mentioned software module. As of the balance 

sheet date, the Group owned approximately 22,923 apartments, offices, commercial and other 

units as well as parking spaces. There is no tenant concentration because of the large number of 

units and therefore no increased liquidity risk associated with rents receivable.




Notes 

CAPITAL MANAGEMENT 

The conwert Group monitors its capital structure with the help of the so-called gearing ratio, which 

equals net debt divided by equity. Internal financial guidelines call for a ratio of 40:60% equity to 

debt financing, which represents a gearing ratio of 150%. This optimal financing structure will be 

reached over the short- to medium-term through additional project refinancing. Net debt comprises 

non-current interest-bearing loans and borrowings plus current trade and other payables, 

less cash and cash equivalents and current trade and other receivables. Equity comprises equity 

attributable to the equity holders of the parent and non-controlling interests 


Cash and cash equivalents 95.8 66.2 

Current trade and other receivables 96.1 99.6 

Current trade and other payables (462.7) (578.3) 

Total current net financial surplus (270.8) (412.5) 

Non-current payables (1,442.5) (1,606.5) 

Total net debt (1,713.2) (2,019.0) 

Equity 1,248.3 1,330.1 

Gearing as a % of equity 137.2 % 151.8 % 

The conwert Group also calculates and monitors the loan-to-value ratio of its property portfolio on 

a regular basis. This ratio shows the relationship between borrowings and the related collateral. 

The loan volume comprises non-current and current liabilities, the bond liability and the convertible 

bonds as well as all other types of interest-bearing loans and borrowings. 


Investment property 2,424.2 2,701.1 

Property held for sale 404.4 537.1 

Project-related financing 1,621.7 1,910.1 

Loan-to-value ratio in % 57.3 % 58.9 % 

The loan agreements concluded with financing partners often include so-called covenants, which 

require the conwert Group to maintain certain financial indicators at the individual loan level. 

These financial indicators are generally based on the ratio between the fair value of the property 

and the outstanding loan balance (LTV – Loan to Value) or on the earnings generated by the project 

that are available to service the respective loan obligations (interest coverage or debt coverage). 

These requirements are recorded in the information systems used by the conwert Group. The various 

financial covenants are monitored separately for each loan because of the different calculation 

requirements and parameters. The conwert Group met the provisions of all loan agreements as of 

31 December 2011 and, accordingly, no financial covenants were violated. 

109



110 

The conwert Group also monitors the interest cover of its current and future unsecured liabilities 

with the indicator “funds from operations“ (“FFO“), and follows a policy that calls for a level over 

1.5. Interest cover on the basis of a simplified FFO calculation shows the following results: 


Earnings before interest and tax (EBIT) 119.8 103.2 

Exceptional items 0.0 (19.8) 

Net gain from fair value adjustments (7.8) (7.8) 

Negative fair value adjustments to held-for-sale properties 7.5 5.4 

Depreciation and amortisation 5.3 8.6 

Expenses from the disposal of properties 564.3 287.4 

Subtotal 689.1 377.0 

Disposals of properties at cost (528.6) (254.3) 

Other non-cash income/expenses 1.1 5.7 

Subtotal 161.6 128.4 

Financial results less non-cash income and plus non-cash expenses (80.3) (74.8) 

Funds from operations (“FFO“) 81.3 53.6 

Interest cover 1.8 1.6 

13. RELATED PARTY TRANSACTIONS 

For the purpose of this presentation, related parties are defined as the members of the Executive 

Board and the Administrative Board as well as their closely related companies and subsidiaries, 

joint ventures and associates. 

Business transactions with related parties are carried out at normal arm’s length conditions. 

13.1. PROVISION OF SERVICES 

In 2011 Thomas Rohr, who served as an Executive Director of conwert Immobilien Invest SE up to 

15 March 2011, received commissions of € 0.6 million from the conwert Group for the brokering of 

property transactions. There were no such service transactions in 2010. 

13.2. ACQUISITION AND SALE OF PROPERTIES AND OTHER ASSETS 

No properties or apartments were sold to related parties of the conwert Group in 2011. 

13.3. OTHER SERVICES 

Subsidiaries of the alt+kelber Group rent office space in 07548 Gera, Straße des Friedens 104 and 

Handwerkerhof 13, which are properties owned by AK Holding GmbH & Co. KG and Infrabau GmbH 

& Co. KG. The rents equal € 7 and € 4.55/sqm per month (net rent, excluding operating costs and 

VAT). 

Harald Nograsek was identified as a related party in his function as chairman of the management 

board of Österreichische Verkehrsbüro AG. This company rents space in a building owned by the 

conwert Group. The rent amounts to € 2.3 million per year. 

13.4. REMUNERATION OF PERSONS IN KEY POSITIONS 


Remuneration of persons in key positions of the conwert Group 

(active and former members) 

1.6 4.3 

Thereof current payments 0.0 0.0 

Thereof variable remuneration 0.3 1.6 

Thereof payments on the termination of employment 0.2 0.2




Notes 

The remuneration system for the Executive Directors (key positions) consists of a fixed and a variable 

component. There are no stock options or pension plans. 

Total remuneration consists of a fixed and a variable component, whereby the variable share can 

range up to 50% depending on the fulfilment of targets. The criteria for the performance-based 

(variable) component are as follows: 

Up to 50% of the performance-based component will be paid out when the EBIT or NAV target is reached; 

30% of the performance-based component is linked to the attainment of individually defined 

corporate goals and 20% to individually defined, non-financial performance goals. 

14. INFORMATION ON BODIES OF THE CORPORATION 

The following persons served on the Executive Board during the reporting year: 

+ Jürgen F. Kelber, born 21 September 1957 

+ Thomas Doll, born 27 December 1965 

+ Volker Riebel, born 15 October 1955 (up to 6 July 2011) 

+ Thomas Rohr, born 30 March 1965 (up to 15 March 2011) 

The members of the Administrative Board (Non-Executive Directors) are listed below: 

+ Johannes Meran, born 22 February 1972 – Chairman 

+ Franz Pruckner, born 20 May 1956 – Vice-Chairman (Member up to 28 September 2011) 

+ Kerstin Gelbmann, born 30 May 1974 – Member (since 28 September 2011) (Vice-Chairwoman 

from 20 May 2011 to 28 September 2011) 

+ Eveline Steinberger-Kern, born 27 January 1972 – Member (since 20 May 2011) 

+ Alexander Tavakoli, born 6 August 1969 – Member (since 20 May 2011) 

+ Friedrich Kadrnoska, born 28 June 1951 – Vice-Chairman (up to 20 May 2011) 

+ Harald Nograsek, born 5 October 1958 – Member (up to 20 May 2011) 

The members of the Administrative Board received remuneration of € 0.3 million (2010: 

€ 0.4 million). 

The remuneration scheme for the members of the Administrative Board is as follows: The chairman 

receives fixed remuneration of € 0.05 million per financial year; each vice-chairman receives 

fixed remuneration of € 0.03 million; and each ordinary member of the Administrative Board receives 

fixed remuneration of € 0.02 million. 

ADDITIONAL REMUNERATION FOR THE 

MEMBERS OF THE ADMINISTRATIVE BOARD COMMITTEES 

The chairman of the Audit Committee receives an additional payment equal to 50% of fixed remuneration. 

The other members of this committee receive an additional payment equal to 12.5% of 

fixed remuneration. 

In addition, each member of the Administrative Board receives a fee of € 0.003 million for each 

meeting attended. 

15. EVENTS AFTER THE BALANCE SHEET DATE 

In connection with the share buyback programme, 2,000 shares were repurchased between 1 January 

2012 and 21 March 2012 at an average price of € 7.8 per share for a total of € 15.611.8 (incl. 

fees). This represents 0.002% of issued capital. 

111



112 

16. GROUP COMPANIES 

Companies included through full consolidation Headquarters Investment 

Austria 

1010 Wien, Marc-Aurel-Straße 7, Immobilientreuhand GmbH Vienna 100.00% 

Anton Baumgartner-Straße 125, 1230 Wien, Projektentwicklung GmbH Vienna 100.00% 

Bösendorferstraße 7 GmbH Vienna 100.00% 

Brunn am Gebirge Realbesitz GmbH Vienna 95.47% 

Bürocenter Raxstraße Projektentwicklungsges.m.b.H. Vienna 100.00% 

Bürocenter Raxstraße Projektentwicklungsges.m.b.H. & Co. KG Vienna 100.00% 

campus 21 GmbH Vienna 95.76% 

CENTUM Immobilien GmbH *) Vienna 100.00% 

Cicero 1 Holding GmbH Vienna 100.00% 



CHORHERR & REITER ökologische Bauprojekte GmbH Vienna 100.00% 

Con Tessa Immobilienverwertung GmbH Vienna 100.00% 

Con value one Immobilien GmbH Vienna 99.40% 

conwert Baudevelopment GmbH Vienna 100.00% 

conwert Dienstleistung und Bauträger Holding GmbH Vienna 100.00% 

Con Wert Handelsges.m.b.H. Vienna 100.00% 

conwert Immobilien GmbH & Co Alpenresidenz Gastein KG Vienna 100.00% 

conwert Invest GmbH Vienna 100.00% 

conwert Management GmbH **) Vienna 100.00% 

conwert Projektentwicklungs GmbH Vienna 100.00% 

CONWERT SECURITISATION Holding GmbH Vienna 100.00% 

conwert Treasury OG Vienna 100.00% 

COUNTRY INN VIC Hotelerrichtungs- und Betriebsgesellschaft m.b.H. Vienna 92.00% 

CWG Beteiligungs GmbH Vienna 100.00% 

DATAREAL Beteiligungsgesellschaft m.b.H. & Co. Gablenzgasse 60 KG Vienna 100.00% 

DATAREAL Beteiligungsgesellschaft m.b.H. & Co. Heiligenstädter Straße 9 OG Vienna 100.00% 

EB Immobilien Invest GmbH Vienna 95.76% 

EBI Beteiligungen GmbH Vienna 95.76% 

EBI Beteiligungen GmbH & Co, 1190 Wien, Rampengasse 3-5, KG Vienna 95.76% 

EBI Beteiligungen GmbH & Co, 1110 Wien, Simmeringer Hauptstraße 24 KG Vienna 95.76% 

ECO Beteiligungen Holding GmbH & Co KG Vienna 95.76% 

ECO Business-Immobilien AG Vienna 95.76% 

ECO Business-Immobilien-Beteiligungen GmbH Vienna 95.76% 

ECO CEE & Real Estate Development GmbH Vienna 95.76% 

ECO Eastern Europe Real Estate GmbH Vienna 95.76% 

ECO Finance Holding GmbH Vienna 95.76% 

ECO GmbH & Co. 3580 Horn, Wilhelm-Miklas-Platz 1 OG Vienna 95.76% 

ECO Immobilien Verwertungs GmbH Vienna 95.76% 

ECO KB GmbH Vienna 95.76% 

ECOman GmbH Vienna 96.11% 

ECO Rechenzentren Vermietungs GmbH & Co KG Vienna 95.76% 

ECO Treasury GmbH Vienna 95.76% 

Epssilon Altbaudevelopment GmbH Vienna 100.00% 

Epssilon Liegenschaftsverwertungs und -verwaltungs GmbH Vienna 100.00% 

Epssilon Liegenschaftsdevelopment GmbH Vienna 100.00% 

Epssilon Meidlinger Hauptstr. 27 Liegenschaftsverwaltungs GmbH Vienna 100.00% 

Favoritenstraße 34 BeteiligungsgmbH Vienna 100.00% 

G1 Immobilienverwertung GmbH Vienna 100.00% 

Gewerbepark Urstein Projekterrichtungs GmbH Vienna 92.00% 

Gewerbepark Urstein Projekterrichtungs GmbH & Co KG Vienna 92.00% 

GGJ Beteiligungs GmbH Vienna 100.00% 

GGJ Beteiligungs GmbH & Co Projekt Eins OG Vienna 100.00%




Notes 


GGJ Beteiligungs GmbH & Co Projekt Zwei OG Vienna 100.00% 

GGJ Beteiligungs GmbH & Co Projekt Drei OG Vienna 100.00% 

GGJ Beteiligungs GmbH & Co Projekt Vier OG Vienna 100.00% 

GGJ Beteiligungs GmbH & Co Projekt Fünf OG Vienna 100.00% 

GGJ Beteiligungs GmbH & Co Projekt Sechs OG Vienna 100.00% 

GJ-Beteiligungs GmbH Vienna 100.00% 

GJ-Beteiligungs GmbH & Co Projekt Fünf OG Vienna 100.00% 

GJ-Beteiligungs GmbH & Co. Rudolfsplatz 6 OG Vienna 100.00% 

G-Unternehmensbeteiligung GmbH & Co. Friedrichstraße 4 KG Vienna 100.00% 

G-Unternehmensbeteiligung GmbH & Co. Meidlinger Hauptstraße 19 KG Vienna 100.00% 

G-Unternehmensbeteiligung GmbH ***) Vienna 100.00% 

GK Immobilienverwertung GmbH Vienna 100.00% 

GKB Beteiligungs GmbH ****) Vienna 0.00% 

GKHK Handelsgesellschaft m.b.H. Vienna 100.00% 

Guess Club & Restaurant GmbH Vienna 92.00% 

Herbststraße 6-10 Liegenschafts GmbH Vienna 100.00% 

Hertha-Firnberg-Straße 10, 1100 Wien, Projektentwicklung GmbH Vienna 100.00% 

Hotel und Fachmarktzentrum Ansfelden GmbH Vienna 92.00% 

Kapital & Wert Immobilienbesitz AG Vienna 95.47% 

Lifestyle Living GmbH Vienna 92.00% 

Lindau 18, Doischberg Liegenschaftsdevelopment GmbH Vienna 92.00% 

Lithinos Immobilien Invest GmbH Vienna 100.00% 

MAHIS Consulting GmbH Vienna 100.00% 

Mariahilferstraße 156 Invest GmbH Vienna 100.00% 

MEZ - Vermögensverwaltungs Gesellschaft m.b.H. Vienna 95.76% 

mog-Projektentwicklung GmbH Vienna 100.00% 

PI Beteiligungen GmbH Vienna 95.76% 

PI Eggenberger Allee 49 GmbH & Co OG Vienna 95.76% 

PI Immobilien GmbH Vienna 95.76% 

PI Grabmayr-Straße 4 GmbH & Co OG Vienna 95.76% 

PI Gudrunstraße 124 / Keplerplatz 14 GmbH & Co OG Vienna 95.76% 

PI Marktstraße 6 GmbH & Co OG Vienna 95.76% 

PI Stubenring 2 GmbH & Co OG Vienna 95.76% 

Radetzkystraße 15+17, 1030 Wien, Projektentwicklung GmbH Vienna 100.00% 

RESAG Immobilienmakler GmbH ******) Vienna 49.00% 

RESAG Insurance Broker GmbH Vienna 100.00% 

RESAG Property Management GmbH Vienna 100.00% 

RG Immobilien GmbH Vienna 100.00% 

Roßauer Lände 47 - 49 Liegenschaftsverwaltungs GmbH Vienna 100.00% 

Schmalzhofgasse 26 Liegenschaftsentwicklungs GmbH & Co. KG Vienna 100.00% 

S-H Vermögensverwaltungs GmbH Vienna 100.00% 

SHG 6 Immobilienentwicklungs GmbH Vienna 100.00% 

Stadiongasse 4 Liegenschaftsverwertungs GmbH Vienna 100.00% 

Steinamangererstraße 189 und 191 Liegenschafts GmbH Vienna 100.00% 

Stubenbastei 10 und 12 Immobilien GmbH Vienna 100.00% 

St. Magdalen Projektentwicklungs- und Verwertungsgesellschaft m.b.H. Vienna 95.76% 

Teinfaltstraße 9 Liegenschafts GmbH Vienna 100.00% 

Themelios Immobilien Invest GmbH Vienna 100.00% 

TPI Immobilien Holding GmbH Vienna 92.00% 

TPW Immobilien GmbH Vienna 95.76% 

TPI Tourism Properties Invest AG Vienna 92.00% 

T-Unternehmensbeteiligung GmbH ***) Vienna 100.00% 

Universitätsstraße 5 Liegenschafts GmbH Vienna 100.00% 

Waldvilla Velden GmbH Vienna 92.00% 

Wienerstraße 196-198 Development GmbH Vienna 92.00% 

WZH Projektentwicklung GmbH Vienna 100.00% 

113



114 


Germany 

alt+kelber Immobiliengruppe GmbH Heilbronn 100.00% 

alt+kelber Immobilienmanagement GmbH Heilbronn 100.00% 

alt+kelber Immobilienverwaltung GmbH Heilbronn 100.00% 

alt+kelber Immobilienvertrieb GmbH Heilbronn 100.00% 

Defida Verwaltungs GmbH Heilbronn 100.00% 

conwert & kelber Besitz 10/2007 GmbH Heilbronn 99.79% 

conwert & kelber Besitz 11/2007 GmbH Heilbronn 99.79% 

conwert & kelber Bestand 10/2007 GmbH Heilbronn 99.79% 

conwert Alfhild Invest GmbH Grünwald 99.79% 

conwert Alfhild II Invest GmbH Grünwald 100.00% 

conwert alpha Invest GmbH Berlin 100.00% 

conwert Aries Invest GmbH Berlin 100.00% 

conwert Berlin 2 Immobilien Invest GmbH Berlin 94.90% 

conwert beta Invest GmbH Berlin 100.00% 

conwert Capricornus Invest GmbH Berlin 100.00% 

conwert Carina Invest GmbH Berlin 100.00% 

conwert Cassiopeia Invest GmbH Heilbronn 100.00% 

conwert Centaurus Invest GmbH *****) Berlin 100.00% 

conwert delta Invest GmbH Berlin 75.00% 

conwert Corvus Invest GmbH Heilbronn 99.75% 

conwert Deutschland Beteiligungsholding GmbH Berlin 100.00% 

conwert Deutschland Holding GmbH Berlin 100.00% 

conwert Deutschland Holding GmbH & Co. KG Heilbronn 100.00% 

conwert Deutschland Immobilien GmbH Berlin 100.00% 

conwert Dresden Drei Invest GmbH Berlin 51.00% 

conwert Dresden Invest GmbH Berlin 51.00% 

conwert Dresden Zwei Invest GmbH Berlin 51.00% 

conwert Dresden Vier Invest GmbH Berlin 51.00% 

conwert Dresden Fünf Invest GmbH Berlin 51.00% 

conwert Eisa Invest GmbH Grünwald 100.00% 

conwert Eisa II Invest GmbH Grünwald 100.00% 

conwert Eisa III Invest GmbH Grünwald 100.00% 

conwert Elbflorenz Invest GmbH Berlin 51.00% 

conwert epsilon Invest GmbH *****) Berlin 100.00% 

conwert Epitaurus Invest GmbH Grünwald 94.00% 

conwert Fenja Invest GmbH Grünwald 99.79% 

conwert gamma Invest GmbH Berlin 100.00% 

conwert Gemini Invest GmbH *****) Berlin 100.00% 

conwert Grazer Damm Development GmbH Berlin 100.00% 

conwert Grundbesitz Leipzig Besitz GmbH Leipzig 100.00% 

conwert Grundbesitz Leipzig Bestand GmbH *****) Leipzig 100.00% 

conwert Hulda Invest GmbH Grünwald 100.00% 

conwert Immobilien Development GmbH Berlin 100.00% 

conwert Immobilien Invest GmbH Berlin 94.90% 

conwert Kirchsteigfeld Beteiligungs GmbH Berlin 100.00% 

conwert Kirchsteigfeld 11 Invest GmbH Berlin 100.00% 







conwert Kirchsteigfeld 18 Invest GmbH Berlin 100.00%




Notes 



conwert lambda Invest GmbH Berlin 75.00% 

conwert Leo Invest GmbH Heilbronn 100.00% 

conwert Lepus Invest GmbH Heilbronn 100.00% 

conwert Libra Invest GmbH Berlin 100.00% 

conwert omega Invest GmbH *****) Berlin 100.00% 

Deutsche Heimstätten omega GmbH & Co. KG Heilbronn 100.00% 

conwert Pegasus Invest GmbH Berlin 100.00% 

conwert Perseus Invest GmbH Heilbronn 100.00% 

conwert Phoenix Invest GmbH Berlin 100.00% 

conwert Sachsen Invest GmbH Berlin 100.00% 

conwert Scorpius Invest GmbH Heilbronn 100.00% 

conwert Seniorenzentrum Berlin Immobilien GmbH Heilbronn 92.00% 

conwert sigma Invest GmbH Berlin 100.00% 

conwert Taurus Invest GmbH Heilbronn 100.00% 

conwert Thüringen Portfolio GmbH Berlin 100.00% 

conwert Vela Invest GmbH Berlin 100.00% 

conwert Viktoria Quartier Invest GmbH Berlin 100.00% 

conwert Virgo Invest GmbH Berlin 100.00% 

conwert Wali Invest GmbH Grünwald 100.00% 

conwert Wali II Invest GmbH Grünwald 100.00% 

conwert Wali III Invest GmbH Grünwald 100.00% 

conwert Wara Invest GmbH Grünwald 99.79% 

conwert Wara II Invest GmbH Grünwald 100.00% 

conwert Wara III Invest GmbH Grünwald 100.00% 

conwert Beteiligungsgesellschaft Fonds GmbH Heilbronn 100.00% 

conwert Wohn-Fonds GmbH Heilbronn 100.00% 

conwert Wölva Invest GmbH Grünwald 99.79% 

Defida 2016 GmbH & Co KG Heilbronn 95.90% 

Diak-Nd Pflege-Altenheime Besitz GmbH Heilbronn 92.22% 

Dinami GmbH Grünwald 95.77% 

GAG Grundstücksverwaltungs GmbH Heilbronn 99.79% 

ECO Business-Immobilien Deutschland GmbH Grünwald 95.77% 

ECO Business-Immobilie Saarbrücken GmbH & Co. KG Grünwald 95.78% 

ECO Büroimmobilien GmbH & Co. KG Grünwald 95.78% 

ECO Büroimmobilie Darmstadt GmbH & Co. KG Grünwald 95.78% 

ECO Büroimmobilie Starnberg Percha GmbH & Co. KG Grünwald 95.78% 

ECO Büroimmobilie Starnberg Petersbrunner Straße GmbH & Co. KG Grünwald 95.78% 

ECO Einkaufszentrum Meitingen GmbH & Co. KG Grünwald 95.78% 

ECO Fachmarktzentren GmbH & Co. KG Grünwald 95.78% 

ECO Fachmarktzentrum Geiselhöring GmbH & Co. KG Grünwald 95.78% 

ECO Fachmarktzentrum Naabtalcenter GmbH & Co. KG Grünwald 95.78% 

ECO Fachmarktzentrum Pocking GmbH & Co. KG Grünwald 95.78% 

ECO Fachmarktzentrum Tittling GmbH Grünwald 95.77% 

ECO Real Estate Deutschland GmbH Grünwald 95.77% 

IESA Immobilien Entwicklung Sachsen GmbH Berlin 51.00% 

KKS Projektentwicklung GmbH Heilbronn 99.79% 

Projektgesellschaft Kreiller Str. 215 mbH Grünwald 95.78% 

Projektgesellschaft Nymphe 82 mbH Grünwald 95.76% 

Seniorenresidenz Köln Immobilien GmbH Heilbronn 100.00% 

115



116 


Czech Republic / Slovakia 

conwert sk 01 s.r.o. Bratislava 100.00% 

conwert sk 02 s.r.o. Bratislava 85.00% 

conwert sk s.r.o. Bratislava 100.00% 

CWIcz brno, s.r.o. Brno 100.00% 

CWI-Invest s.r.o. Brno 100.00% 

conwert Invest s.r.o. Brno 92.00% 

JCB Invest s.r.o. Brno 100.00% 

NB Invest s.r.o. Brno 100.00% 

NB-Správa nemovitostí s.r.o. Brno 100.00% 

Odcz brno, s.r.o. Brno 100.00% 

Pd sk bratislava s.r.o. Bratislava 60.00% 

Pdcz brno s.r.o. Brno 60.00% 

Weka Real s.r.o. Brno 100.00% 

Správa bytov Conwert s.r.o. Bratislava 100.00% 

Hungary 

Bokréta Alfa Ingatlanforgalmazo Kft Budapest 100.00% 

BOKRÉTA Management Kft Budapest 70.00% 

Immo-Rohr Kft Budapest 100.00% 

Immo-Rohr Plusz Kft Budapest 100.00% 

Klauzál u. 7 - 9 Projekt Kft. Budapest 57.70% 

My-Box Debrecen Ingalan-fejlesztö Korlátolt Felelösségü Társaság Budapest 95.76% 

Cyprus 

Graforco Investments Limited Nicosia 95.76% 

Ukraine 

Ukrainska Comertsiina Nerukhomist Zaporizhzhya 95.76% 

Luxembourg 

ECO Real Estate Luxembourg S.à.r.l. Luxembourg 95.76% 

Companies included through proportionate consolidation 

Germany 

Tizian Wohnen 1 GmbH Berlin 34.00% 

Tizian Wohnen 2 GmbH Berlin 34.00% 

CD Deutsche Eigenheim AG Berlin 25.00% 

Initial consolidations (incl. newly founded companies) 

Netherlands 

Goudsmitplein Beheer B.V. Baarn 19.73% 

Germany 

cor 18. GmbH & Co KG Berlin 94.90% 

conwert goud Invest GmbH Berlin 15.52%




Notes 

Deconsolidations 

Czech Republic 

PDcz MAGNUM a.s. Brno 50.00% 

Austria 

Waldvilla Velden Targex Management- und UnternehmensberatungsgmbH & Co KG Velden 92.00% 

Rudolfsplatz 13A Liegenschafts GmbH Vienna 100.00% 

Berolinum Liegenschaften Eins GmbH Vienna 100.00% 

Berolinum Liegenschaften Zwei GmbH Vienna 100.00% 

Berolinum Liegenschaften Drei GmbH Vienna 100.00% 

Germany 

conwert goud Invest GmbH Berlin 15.52% 

Netherlands 

Goudsmitplein Beheer B.V. Baarn 19.73% 

Restructured companies 

Austria 

conwert Bauträger GmbH Vienna 100.00% 

cw Bauträger Projekt Zwei GmbH Vienna 100.00% 

cw Bauträger Projekt Eins GmbH Vienna 100.00% 

ECO Management GmbH Vienna 100.00% 

ECO Beteiligungen GmbH & Co Schönbrunner Allee 18 OG Vienna 95.76% 

GETINA Immobilien-Management GmbH Vienna 95.76% 

GJ-Beteiligungs GmbH & Co Projekt Zwei GmbH Vienna 100.00% 

ECO Holding GmbH Vienna 95.76% 

LLL Luxury Living Liegenschaftsentwicklungs GmbH Vienna 100.00% 

Berolinum Liegenschaftsbesitz GmbH Vienna 100.00% 

Germany 

LIBRE Immobilien Invest GmbH Berlin 100.00% 

alt+kelber Wohninvest GmbH Heilbronn 100.00% 

alt+kelber Immobilienkontor GmbH Gera 100.00% 

alt+kelber Eigenheim GmbH Heilbronn 100.00% 

Janus Invest GmbH Grünwald 100.00% 

*) Owns three limited partnerships 

**) One branch in Germany 

***) Investment held through trustee 

****) Included through agreement under the law of obligations 

*****) conwert omega Invest GmbH, conwert Centaurus Invest GmbH, conwert Gemini Invest GmbH, conwert Grundbesitz 

Leipzig Bestand GmbH and conwert epsilon Invest GmbH together own 27 limited partnershps 

******) Investment of 49% included through full consolidation due to control relationship 

These consolidated financial statements were completed and signed by the Executive Board of 

conwert Immobilien Invest SE and released by the Administrative Board on 26 March 2012. 


The Executive Directors of 


Thomas Doll m.p. Jürgen F. Kelber m.p. 

117



118 

AUDITORS’ REPORT (REPORT OF THE INDEPENDENT AUDITORS) *) 

REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS 

“We have audited the accompanying consolidated financial statements of conwert Immobilien Invest SE, Wien and its subsidiaries 

(hereinafter referred to as “the Company”), for the financial year from 1 January 2011 to 31 December 2011. These consolidated financial 

statements comprise the consolidated balance sheet as at 31 December 2011, the consolidated income statement and the 

consolidated statement of comprehensive income, the consolidated cash flow statement and the consolidated statement of changes 

in equity for the year ended 31 December 2011, and a summary of significant accounting policies and other explanatory notes. 

Management’s responsibility for the consolidated financial statements and for the group accounting 

The management of conwert Immobilien Invest SE is responsible for the group accounting as well as the preparation and fair 

presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as 

adopted by the EU. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation 

and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting 

and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. 

Auditors’ responsibility and description of the type and extent of the statutory audit 

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit 

in accordance with laws and regulations applicable in Austria and in accordance with International Standards on Auditing, issued 

by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). Those 

standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance 

whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial 

statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement 

of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers 

internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to 

design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness 

of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the 

reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated 

financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 

Opinion 

Our audit did not give rise to any objections. Based on the results of our audit in our opinion, the consolidated financial statements 

present fairly, in all material respects, the financial position of the group as of 31 December 2011, and of its financial performance 

and its cash flows for the financial year from 1 January 2011 to 31 December 2011 in accordance with International Financial 

Reporting Standards (IFRS) as adopted by the EU. 

Statement on the consolidated management report 

Laws and regulations applicable in Austria require us to perform audit procedures to determine whether the consolidated management 

report is consistent with the consolidated financial statements and whether the other disclosures made in the consolidated 

management report are misleading to the group’s position. The audit report must also include a statement as to whether 

the consolidated management report is consistent with the consolidated financial statements and if the disclosures pursuant to 

section 243a UGB are appropriate. 

In our opinion, the consolidated management report for the group is consistent with the consolidated financial statements. The 

disclosures pursuant to section 243a UGB are appropriate.” 


Ernst & Young 

Wirtschaftsprüfungsgesellschaft m.b.H 

Alexander Wlasto m.p. Hans-Erich Sorli m.p. 

Wirtschaftsprüfer Wirtschaftsprüfer 

1) The report (in the German language, or translations into another language, including shortened or amended versions) may not be made public or used by third parties, 

when reference is made in part or in whole to the auditor’s report, without the express written consent of the auditors.




Auditors‘ Report 


REPORT OF THE ADMINISTRATIVE BOARD 

(IN ACCORDANCE WITH § 41 OF THE AUSTRIAN SOCIETAS EUROPAEA ACT) 

The Administrative Board performed the duties required by law and the articles of association, 

strategically managed the company and conducted its business together with the Executive Directors 

during the 2011 financial year. Moreover, the Administrative Board monitored the daily operating 

activities that were delegated to the Executive Board and provided advice and support to the Executive 

Board for this work. At Administrative Board meetings and on other occasions, the Executive Board 

supplied the Administrative Board with regular and extensive information in oral or written form on 

operating activities, the financial position of the company and development of the Group. 

Kerstin Gelbmann, Eveline Steinberger-Kern and Alexander Tavakoli were elected new members of 

the Administrative Board at the Annual General Meeting on 20 May 2011 At the constituent meeting 

subsequent to the Annual General Meeting, Kerstin Gelbmann was elected Vice-Chairwoman and 

Chairwoman of the Audit Committee. At the same time, Friedrich Kadrnoska and Harald Nograsek 

resigned from their mandate as members of the Administrative Board at the end of the Annual 

General Meeting, which had to resolve on the financial statements of the financial year 2010. In the 

course of these new appointments, Johannes Meran was confirmed as Chairman of the Administrative 

Board and Vice-Chairman of the Audit Committee. At the meeting of the Administrative Board on 

28 September 2011, Franz Pruckner was elected new Vice-Chairman of the Administrative Board and 

Chairman of the Audit Committee. The Administrative Board thus consists of the following members: 

+ Johannes Meran, Chairman of the Administrative Board 

+ Franz Pruckner, Vice-Chairman of the Administrative Board 

+ Kerstin Gelbmann, Member 

+ Eveline Steinberger-Kern, Member 

+ Alexander Tavakoli, Member 

The Administrative Board therefore consisted of five members as of 31 December 2010 and held 

15 meeting during the 2011 financial year. 

At its meeting on 25 January 2011 the Administrative Board adopted the resolution to deal with all 

matters which fall under its scope of responsibility in its entirety in the future and to abolish all 

committees with the exception of the legally required Audit Committee. All five Administrative Board 

members were members of the Audit Committee during the entire year 2011. 

The focus of the work of the Administrative Board was of course placed on the property business in its 

scope of competence again in the year 2011. As the Property Committee no longer exists, the entire 

Administrative Board now had to consider any property investment with a value of more than EUR 3 

million in accordance with the rules of procedure. In the financial year 2011, the Administrative Board 

adopted a total of 59 resolutions at 15 meetings and 31 resolutions by circulation. 

The Audit Committee discussed the annual and consolidated financial statements including the 

management reports, the Corporate Governance Report, as well as the audit reports and the 

management letter issued by the auditor, and reported to the Administrative Board on these 

documents. The Audit Committee was also responsible for the selection of the auditor, negotiations 

to determine the auditor’s fee, the preparation of the audit schedule for the reporting year as well as 

the essential results of the audit. The Audit Committee met twice. 

The annual financial statements and the management report of conwert Immobilien Invest SE for 

the 2010 financial year as well as the consolidated financial statements and the group management 

report of the conwert Group for the 2010 financial year, which were prepared by the Executive Board, 

were audited by Ernst & Young Wirtschaftsprüfungsgesellschaft mbH. This audit provided no grounds 

for objections. The auditor has therefore confirmed that the annual financial statements of conwert 

Immobilien Invest SE comply with the principles of correct bookkeeping and provide a true and fair 

view of the asset, financial and earnings position of the company, and that the management report 

agrees with the annual financial statements. The consolidated financial statements were audited 

on the basis of the International Standards on Auditing issued by the International Federation of 

Accountants (IFAC) and considered to be in accordance with these rules. Accordingly, the auditor has 

issued an unqualified opinion in each case. 

The compliance audit of the Corporate Governance Report in accordance with §243b of the Austrian 

Commercial Code (UGB) was performed by Univ. Prof. DDr. Waldemar Jud Corporate Governance 

Forschung CGF GmbH, and the results provided no grounds for material objections. 

119



120 

The Executive Board proposed to use the profit of the financial year starting on 1 January 2011 and 

ending on 31 December 2011 to the amount of 30,098,111.35 € as follows: For each share of the 

company which is entitled to dividend at the time of the adoption of the resolution regarding the 

appropriation of accumulated profit (i.e. on the day of the Annual General Meeting of the Company, 

hence 31 May 2012) a dividend of 0.20 € will be paid. The total dividend paid will thus result from the 

multiplication of the amount of 0.20 € by the number of shares of the company which are entitled to 

dividend on the day of the resolution on the appropriation of the accumulated profit. The remaining 

part of the profit will be carried forward. The Administrative Board agrees with this proposal of the 

Executive Board. On 21 March 2012, 17:45 (close of the market) the company held a total of 3,863,964 

treasury shares, which are not entitled to a dividend, so that the total of the dividend payment would 

currently amount to 16,299,061.80 € and the portion of accumulated profit to be carried forward 

would amount to 13,799,049.55 €. If the number of treasury shares held by the company increases 

until the day of the Annual General Meeting, 31 May 2012, no dividend will be paid for that part of 

accumulated profit which is accounted for by treasury shares additionally acquired between the time 

the proposal for the appropriation of accumulated profit was made and the Annual General Meeting; 

rather, it will be carried forward. If the number of treasury shares held by the company declines 

until the day of the Annual General Meeting, a dividend will be paid for that part of the accumulated 

profit which is accounted for by these treasury shares, as far as this is required for the payment of a 

dividend to the amount of 0.20 € per share entitled to dividend. The remaining part of accumulated 

profit will be carried forward. 

A review of the individual and consolidated financial statements and an audit of the respective 

management reports and the Corporate Governance reports in accordance with § 41 (2) of the 

Austrian Societas Europaea Act provided no grounds for objections. The Administrative Board has 

approved the individual and consolidated financial statements, which are considered authorised in 

accordance with § 41 (4) of the Austrian Societas Europaea Act. 

The Administrative Board would like to thank the Executive Board and all employees of the conwert 

Group for their commitment and their work. 


On behalf of the Administrative Board 

Johannes Meran 

Chairman of the Administrative Board





Corporate Governance 

CORPORATE GOVERNANCE REPORT 

Corporate Governance represents an important tool for conwert to ensure transparent management 

aimed at sustainable value creation. Therefore, conwert was the first Austrian property company 

to commit to compliance with the Austrian Code of Corporate Governance (CGC) on a voluntary 

basis in the year 2005. The CGC contains the international standards for good management and 

provides a framework for the management and monitoring of business activities by Austrian stock 

corporations and European stock corporations that are listed on the stock exchange in Austria. The 

Austrian Code of Corporate Governance is available on the website www.corporate-governance.at. 

The Code in the version of January 2010 comprises a total of 83 rules, which consist of L-Rules, 

C-Rules and R-Rules. L-Rules are based on mandatory Austrian legal requirements and must therefore 

be complied with. C-Rules represent standards that should be complied with. Any deviations 

must be explained in order to ensure compliance with the Code. R-Rules are recommendations; 

deviations do not have to be disclosed or explained. conwert applied the Austrian Code of Corporate 

Governance in the financial year 2011 and had compliance with the provisions of the Code evaluated 

externally by Univ. Prof. DDr. Waldemar Jud Corporate Governance Forschung CGF GmbH. 

For conwert as a monistic Societas Europaea (SE), all rules of the CGC relating to the Management 

Board and Supervisory Board are applicable mutatis mutandis to the Executive Board and the 

Administrative Board. Therefore, the following principles are considered in the application of the 

CGC to conwert: 

+ The assignment of the individual Code rules relating to the Administrative Board and/or Executive 

Directors reflects the intent of the Code as well as the division of responsibilities within the 

corporate bodies of the SE. 

+ The rules of behaviour defined by the CGC for Supervisory Boards fall under the general 

responsibility of the Administrative Board. 

+ The rules of behaviour defined by the CGC for Management Boards fall under the general 

responsibility of the Executive Board; activities allocated to the Administrative Board by law or 

internal rules governing the allocation of authority fall under the competence/responsibility of 

the Administrative Board. 

EXECUTIVE BOARD 

Thomas Doll 

born on 27.12.1965 

Jürgen F. Kelber 

born on 21.09.1957 

Responsible for First appointed Other functions in supervisory or Administrative Boards or 

comparable functions in other Austrian or foreign subsidiaries not 

included in the consolidated financial statements 

Finance, controlling/risk management/ICS, 

group accounting and tax, 

legal matters and investments, 

corporate communications IT and personnel 

Operating segments portfolio management, 

services, sale of properties, 

group organisation, 

funds/investment products, acquisitions, 

procurement and sales management 

On 1 September 2010 

for a period of 4 years 

On 14 December 2007 

for a period of 5 years 

THE FOLLOWING PERSONS RESIGNED FROM THE EXECUTIVE BOARD IN THE FINANCIAL YEAR 2011: 

Thomas Rohr 

born on 30.03.1965 

Volker Riebel 

born on 15.10.1955 

Responsible for First appointed Other functions in supervisory or Administrative Boards or 

comparable functions in other Austrian or foreign subsidiaries not 

included in the consolidated financial statements 

Region Austria (apartment buildings, 

commercial – sales and investment) 

Strategy, legal matters and investments, 

quality assurance, corporate communications, 

audit, personnel and purchasing 

From 1 March 2009 

to March 2011 

From 1 January 2011 

to 6 July 2011 

None 

None 

None 

+ AVW Assekuranzvermittlung der Wohnungswirtschaft GmbH & Co KG, 

Chairman of the Supervisory Board 

+ AVW Versicherungsmakler GmbH, Chairman of the Supervisory Board 

121



122 

The Executive Board currently consists of Jürgen F. Kelber in the function of COO and Thomas Doll 

in the function of CFO. After the resignations of Volker Riebel as CEO as of 6 July 2011 and of Thomas 

Rohr as Regional Manager Austria as of 15 March 2011, the Administrative Board reduced the 

Executive Board to two members based on a unanimous decision. The responsibilities of Volker 

Riebel and Thomas Rohr were distributed to the remaining two directors. No successors were 

appointed since the Administrative Board of a single-tier SE like conwert is involved more strongly 

in the operating activities of the company. The responsibilities of Thomas Rohr as the regional 

manager for Austria were transferred to Jasmin Soravia, the new regional manager for Austria, in 

early January 2012. All strategic tasks of Volker Riebel were taken over by Thomas Doll, while his 

operating tasks, for example purchasing, now fall under the responsibility of Jürgen Kelber. The 

group strategy and internal audit have since been the responsibility of the Administrative Board. 

PROCEDURES OF THE EXECUTIVE BOARD 

The Executive Board conducts the business of the company in accordance with the law, the articles of 

association and the rules of procedure for the Executive Board. It currently consists of two persons, 

Thomas Doll (CFO) and Jürgen F. Kelber (COO). The meetings of the Executive Board, which are 

held regularly, serve for mutual information and decision-making on all matters which are subject 

to the approval of this corporate body. The rules of procedure of the Executive Board include the 

obligation to inform and report to the Administrative Board as well as a catalogue of measures, 

which absolutely require the approval of the Administrative Board. 

REMUNERATION OF THE EXECUTIVE BOARD 

Total remuneration consists of a fixed component and a variable component or profit sharing plan. 

Various qualitative and quantitative criteria are decisive for the granting of the performance-linked 

component. Depending on the accomplishment of the criteria, the variable portion of the remuneration 

may amount to up to 100% of the fixed component. The performance-linked component of 

remuneration is made up as follows: 

(1) Accomplishment of EBIT target (25% profit sharing), 

(2) Accomplishment of NAV target (also 25% profit sharing), 

(3) Accomplishment of individual targets defined by the Administrative Board (20% variable profit 

sharing) and 

(4) Accomplishment of interdepartmental, long-term, multi-year sustainable targets (30% profit 

sharing), which were also determined together with the Administrative Board. 

These variable, performance-linked components of remuneration were revised for the year 2011 

and for the two Executive Directors, Thomas Doll and Jürgen F. Kelber. 

The following variable performance-based model was applicable for Thomas Rohr, who resigned 

as an Executive Director in the year 2011: 50% of the performance-based component was payable 

if the weighted average share price increased by 10% in a year; another 50% was payable if 

earnings per share increased by 10% in a financial year. The following regulation was applicable 

for Volker Riebel: The performance-based remuneration, i.e. both the cash bonus and the share 

bonus, depended on the following parameters: 

(a.) 25% on the increase in the average share price of the company in a financial year, 

(b.) 50% on the profitability (margin and volume) realised by the company in a financial year, and 

(c.) 25% exclusively at the discretion of the Administrative Board of the company.





Volker Riebel and Thomas Rohr were each granted voluntary termination payments in addition to 

the variable component under this section. 

REMUNERATION 2011 (IN €) 

Fixed component Variable component Remuneration 

in kind 

Thomas Doll 224,000 168,750 7,374 400,124 

Jürgen F. Kelber 430,629 252,000 7,709 690,338 

Thomas Rohr 110,007 218,750 9,168 162,925 

Volker Riebel 203,518 190,000 8,679 212,197 

Total Executive Directors 968,154 829,500 32,930 1,830,584 

Members who resign from the Executive Board are entitled to severance compensation: 

+ Severance compensation following premature retirement: 

In the case of premature termination of their term of office, Executive Directors are – depending 

on their contract – entitled to the remuneration they would have received if they had fulfilled their 

term of office until the expiry of the term; in the case of contracts concluded after 31 December 

2009, they are entitled a payment of a minimum of one, but a maximum of two annual gross 

salaries. The payment must be effected as a single payment and is due for payment to the 

resigned Executive Director without a discount at the date of termination. If the term of office is 

terminated prematurely for an important reason to be justified by the Executive Director, there 

is no entitlement to a termination payment. There are no separate regulations for severance 

compensation in the case of a change of control. The agreements on severance compensation 

made on the occasion of the premature termination of the function as an Executive Director 

take into account the circumstances of the resignation of the relevant Executive Director and the 

economic situation of the company. 

+ Severance compensation when a contract is not renewed or the member retires: 

A member of the Executive Board is entitled to severance compensation if his/her employment 

ceases at the end of the term of office because the Administrative Board has not offered to renew 

the previous contract or to conclude a new contract under the same conditions, or has not 

reappointed the member concerned for a further term. This severance compensation equals six 

months’ gross remuneration after the first term of office and one year’s remuneration after the 

second term of office. If a member of the Executive Board resigns because he/she has reached 

the age limit specified for reappointment by the articles of association, he/she is also entitled to 

severance compensation equal to one year’s gross salary. 

Total 

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124 

Johannes Meran 

born on 22.02.1972 

Franz Pruckner 

born on 20.05.1956 

Kerstin Gelbmann 

born on 30.05.1974 

Eveline Steinberger-Kern 

born on 27.01.1972 

Alexander Tavakoli 

born on 06.08.1969 

Friedrich Kadrnoska 

born on 28.06.1951 

Harald Nograsek 

born 05.10.1958 

ADMINISTRATIVE BOARD 

Function First appointed End of term of office Other Supervisory Board or Administrative Board 

mandates and comparable functions in Austrian and 

foreign listed companies 

+ Chairman of the Administrative Board 

+ Vice-chairman of the Audit Committee 

+ Vice-chairman of the Administrative Board 

+ Chairman of the Audit Committee 

+ Financial expert 

+ Representative of free float shareholders 

+ Member of the Administrative Board 

+ Member of the Audit Committee 

+ Financial expert 



+ Representative of free float shareholders 



11.10.2010 AGM 2015 

11.10.2010 AGM 2015 

20.05.2011 AGM 2016 



+ Member of the Administrative Board, STRABAG SE 

THE FOLLOWING PERSONS RESIGNED FROM THE ADMINISTRATIVE BOARD 

IN THE FINANCIAL YEAR 2011 

Term of office Other Supervisory Board or Administrative Board mandates 

and comparable functions in Austrian and foreign listed companies 

From 14 December 2007 

to 20 May 2011 

(at the close of the 

Annual General Meeting) 

From 26 May 2009 

to 20 May 2011 

(at the close of the 

Annual General Meeting) 

+ Allgemeine Baugesellschaft – A. Porr Aktiengesellschaft, Deputy Chairman of the Supervisor Board 

+ card complete Service Bank AG, member of the Supervisory Board 

+ Österreichisches Verkehrsbüro Aktiengesellschaft, Chairman of the Supervisory Board 

+ UniCredit S.p.A., member of the Supervisory Board 

+ Wienerberger AG, Chairman of the Supervisory Board 

+ Wiener Börse AG, Chairman of the Supervisory Board 

+ CEESEG AG, Chairman of the Supervisory Board 

+ Wiener Privatbank SE, member of the Administrative Board 

+ Wienerberger AG, member of the Supervisory Board 

+ DDSG – Blue Danube Schiffahrt GmbH, Chairman of the Supervisory Board 

+ Motel One Austria GmbH, member of the Supervisory Board 

+ Verkehrsbüro Business Travel GmbH, Deputy Chairman of the Supervisory Board 

+ Verkehrsbüro Hotellerie GmbH, Chairman of the Supervisory Board 

+ Verkehrsbüro-Ruefa Reisen GmbH, Deputy Chairman of the Supervisory Board 

INDEPENDENCE OF THE MEMBERS OF THE ADMINISTRATIVE BOARD 

In accordance with Rule 53 of the CGC, conwert Immobilien Invest SE has defined the following 

guidelines for the independence of Administrative Board members: 

A member of the Administrative Board is considered to be independent when he/she maintains 

no business or personal relationship with the company or its Executive Board that constitutes a 

material conflict of interest and is therefore likely to influence the behaviour of the member. The 

Administrative Board should also adhere to the following guidelines when determining the criteria 

for evaluating the independence of its members: 

+ A member of the Administrative Board should not maintain any business relationships with the 

company or a subsidiary of the company in a scope considered material for that member during 

the current financial year, and should also not have maintained such relationships in the previous 

financial year. The same applies to business relationships with companies in which the member 

of the Administrative Board holds a significant economic interest. This does not apply if the business 

relationship was disclosed prior to the member’s appointment. The approval of individual 

transactions by the Administrative Board in accordance with § 95 para.5 (12) of the Austrian Stock 

Corporation Act as amended does not automatically lead to classification as not independent.





+ A member of the Administrative Board should not have been an auditor of the company, should 

not have owned a share in or have been employed by the auditing firm entrusted with the current 

audit. 

+ A member of the Administrative Board should not serve on the management board or Executive 

Board of another company in which a member of the company’s Executive Board holds a position 

on the Administrative or Supervisory Board. 

+ A member of the Administrative Board should not be closely related (direct descendants, 

husband/wife, companion, parent, uncle, aunt, brother/sister, niece/nephew) to a member of the 

Executive Board or to persons who hold one of the positions mentioned above. 

In accordance with rule 53 and the above-mentioned guidelines of the Austrian Corporate Governance 

Code, the following members of the Administrative Board are considered to be independent: 

+ Johannes Meran 

+ Franz Pruckner 

+ Kerstin Gelbmann 

+ Eveline Steinberger-Kern 

+ Alexander Tavakoli 

For the sake of completeness it should be mentioned that the two Administrative Board members 

who resigned in 2011, Friedrich Kadrnoska and Harald Nograsek, were to be considered independent 

in accordance with Rule 53 and the above-mentioned guidelines of the CGC. 

ADMINISTRATIVE BOARD MEETINGS IN THE FINANCIAL YEAR 2011 

In the financial year 2011, the Administrative Board held 15 meetings. Kerstin Gelbmann and Eveline 

Steinberger-Kern were elected to the Administrative Board at the Annual General Meeting of 

20 May 2011, and Kerstin Gelbmann was elected Vice-Chairwoman as well as Chairwoman of the 

Audit Committee. At the same time, Friedrich Kadrnoska and Harald Nograsek resigned from their 

mandates with the close of this Annual General Meeting. At the meeting held on 28 September 

2011, Franz Pruckner was elected the new Deputy-Chairman of the Administrative Board and the 

Chairman of the Audit Committee. 

With the exception of the Audit Committee, in which all members of the Administrative Board are 

currently members, all other committees were disbanded. The Administrative Board in its entirety 

deals with all matters that fall under its scope of competence. The focus of the work of the Administrative 

Board was of course placed on the property business in its scope of competence again in 

the year 2011. Regarding related party transactions please refer to the notes. 

AUDIT COMMITTEE 

Function Meetings 2011 

The Audit Committee discusses the annual and consolidated financial statements, monitors the accounting 

process as well as the audit of the annual and consolidated financial statements itself. It reviews 

the audit reports and the management letter of the auditor on the functionality of the risk management 

system, the proposal of the Executive Board on the appropriation of profit, the (group) management report 

and the Corporate Governance report. In addition, the Audit Committee deals with the preparation of 

the proposal for the appointment of the auditor and the auditor fees. The Audit Committee reports to the 

Administrative Board on these matters. 

In addition, circular resolutions were passed. More detailed information on the activities of the 

committees can be found in the report of the Administrative Board. 

2 

125



126 

REMUNERATION OF THE ADMINISTRATIVE BOARD 

The Annual General Meeting held on 26 May 2009 adopted a remuneration system for the Administrative 

Board. The new rules of compensation were also applied in the financial year 2010. Following 

the abolition of all committees except the Audit Committee at the meeting on 15 December 2010, 

the corresponding remuneration was also cancelled. 

REMUNERATION ADMINISTRATIVE BOARD PER YEAR 

Function Fixed Attendance fee per meeting 

Chairman 50,000 € 2,500 € 

Vice-chairman 25,000 € 2,500 € 

Member 15,000 € 2,500 € 

REMUNERATION AUDIT COMMITTEE (CAPPED WITH A MAXIMUM SURCHARGE OF 50%) 

Committee Chairman Member Attendance fee per meeting *) 

Audit Committee 50% of fixed remuneration 25% of fixed remuneration 2,500 € 

*) unless held on the same day as a plenary meeting of the Administrative Board 

REMUNERATION OF THE ADMINISTRATIVE BOARD 2011 

Fixed Surcharges Attendance fees Total 

Johannes Meran 50,000 12,500 37,500 100,000 

Franz Pruckner 17,500 5,938 37,500 60,938 

Kerstin Gelbmann 12,808 5,467 20,000 38,275 

Eveline Steinberger-Kern 9,185 2,296 20,000 31,481 

Alexander Tavakoli 9,185 2,296 20,000 31,481 

Friedrich Kadrnoska 15,839 7,920 12,500 36,259 

Harald Nograsek 9,503 2,376 17,500 29,379 

Total 124,020 38,793 165,000 327,813





PROMOTION MEASURES IN ACCORDANCE WITH § 243B PARA. 2 

OF THE AUSTRIAN COMMERCIAL CODE 

In accordance with § 243b para. 2 (2) of the Austrian Commercial Code as amended, measures 

taken to promote women in the Executive Board, the Administrative Board and management 

positions of the company must be disclosed as defined in § 80 of the Stock Corporation Act. conwert 

states that women and men are equally promoted on a performance-related basis and the 

company has no special programme to promote women. However, at the 10th Annual General 

Meeting held on 20 May 2011, two women, Kerstin Gelbmann and Eveline Steinberger-Kern, were 

elected to the Administrative Board. For the first time since the establishment of conwert, 40% of 

the financial experts in the Administrative Board are women. 

INSURANCE 

conwert has concluded directors‘ and officers‘ insurance to cover the members of its corporate 

bodies (Executive Board, Administrative Board, managing directors). The costs for this insurance 

are carried by the company. 

EXTERNAL EVALUATION 

In accordance with rule 62 of the CGC, conwert had the compliance with the Austrian Corporate 

Governance Code evaluated by Univ. Prof. DDr. Waldemar Jud Corporate Governance Forschung 

CGF GmbH for the financial year 2011. The report is available for download at www.conwert.at 

under menue item “Corporate Governance / External examination”. 

COMPLIANCE 

conwert Immobilien Invest SE (until 2007 conwert Immobilen Invest AG) prepared a compliance 

guideline in accordance with the requirements of the Austrian Stock Exchange Act and the Issuer 

Compliance Guideline in 2002, which is designed to prevent the misuse and distribution of inside 

information and information relevant to compliance. 

In addition, the compliance guideline of conwert was revised in the year 2011, and legal requirements 

which only became effective at the beginning of 2012 and are more restrictive, especially 

with a view to compliance-relevant information, were already implemented in 2011. 

conwert is one of a few ATX companies to proactively adapt the compliance guideline accordingly. 

conwert is defined as a permanent confidentiality area. Other persons who work for conwert as 

well as persons who have access to inside information within specific projects are required to 

observe the provisions of the compliance guideline. 

conwert holds regular training courses for key managers and persons who work in classified 

units. These programmes are designed to familiarise employees with the compliance guideline, 

and thereby ensure the conscious and responsible handling of confidential information. In addition, 

blackout periods and a prohibition on trading prior to sensitive corporate events (e.g. annual and 

quarterly closings, capital increases) were defined and a compliance officer appointed. 

In accordance with the Austrian Corporate Governance Code and the Austrian Stock Exchange Act, 

the purchase and sale of conwert shares by key employees is disclosed on the company’s website 

and also reported to the Austrian Financial Market Authority. 

127



128 

DIRECTORS’ DEALINGS 

In accordance with § 48d (4) of the Austrian Stock Exchange Act, transactions by members of 

management are disclosed on the company’s website www.conwert.at under “Corporate 

Governance / Directors’ Dealings” and also reported to the Austrian Financial Market Authority. 

Shares that are directly or indirectly attributable to members of the Administrative Board and of 

the Executive Board are listed in the following table: 

Name Number of shares as of 


Administrative Board Members 

Johannes Meran 19,659,076 23.03 

Franz Pruckner - - 

Eveline Steinberger-Kern - - 

Kerstin Gelbmann - - 

Alexander Tavakoli - - 

Total Administrative Board 

Executive Directors 

19,659,076 23.03 

Thomas Doll 1,175





129



130

FINANCIAL STATEMENTS 

CONWERT IMMOBILIEN 

INVEST SE 

131

Annual Financial Report 2011 

Management report for the financial year 2011 of 


132


Table of contents 

General information .............................................................................................................. 134 

Property Portfolio .................................................................................................................. 135 

Property Services ................................................................................................................. 135 

Revenues ............................................................................................................................. 136 

Earnings ............................................................................................................................... 136 

Asset and financial position .................................................................................................. 137 

Employees ............................................................................................................................ 138 

Research & development ..................................................................................................... 139 

Risk management report ...................................................................................................... 140 

Organisation and corporate structure incl. statement regarding branch offices ................... 148 

Notes in accordance with § 243a para 1 UGB ..................................................................... 150 

Outlook ................................................................................................................................. 152 

Post-balance-sheet-date-report ............................................................................................ 153 

133


General information 

conwert Immobilien Invest SE acted as the holding company of the conwert Group in the 

financial year 2011 and was as such responsible for the management, financing and 

liabilities of subsidiaries and lower-tier subsidiaries of the Group. Moreover, the company 

invests directly in properties in Austria and holds stakes in properties in Germany, the Czech 

Republic, Slovakia, Hungary, Luxemburg and the Ukraine via subsidiaries. In addition, 

conwert has direct and indirect investments in different property management and property 

service companies, thus covering the entire value chain in the property industry. 

In the Austrian investment market, demand was strong and the price level high in 2011. A 

total of approximately 1.7 billion € was invested in properties. The transaction volume thus 

increased by nearly 7 % in comparison to the previous year, but fell short of experts’ 

expectations due to the low level of investments in the commercial property segment. While 

demand for retail space continued to be low in the commercial segment in the financial year 

2011, the transaction volume in the market for apartment buildings from the late 19 th century 

in Vienna increased. The trend towards rising prices and falling returns is also expected to 

continue in this segment to a moderate extent in 2012. (CBRE Austria – Vienna Office Market View 

2011, EHL Immoflash today 25 January 2012) The strong demand for German residential properties 

in the major metropolitan regions was caused by the flight into tangible assets in 2011, which 

is attributable to the persisting uncertainty in the financial markets in Europe, according to 

experts. The highly stable residential property market in Germany attracted primarily 

institutional investors from Germany and abroad. According to a CBRE analysis, the 

transaction volume for residential packages and residential complexes of 50 or more 

residential units in 2011 increased by 44 % on the previous year and amounted to 

6.1 billion €. (CBRE Germany, press release 20 January 2012) In the investment market for 

commercial properties in Germany, the transaction volume amounted to 22.6 billion € in the 

past year, which corresponds to an 18 % increase on the previous year. (CBRE Germany, Q4 

Investment market Germany) Regarding further details on the property markets, refer to the group 

management report 2011. 

The strong demand for residential properties by predominantly private investors led to record 

proceeds on property sales for conwert Immobilien Invest SE in 2011. Especially in the third 

quarter of 2011, most sales transactions were carried out in Austria. conwert Immobilien 

Invest SE did not purchase properties in Austria in the year 2011. 

In the financial year 2011, the revenues recorded by conwert Immobilien Invest SE soared in 

comparison to the previous year due to the high number of sales and amounted to 

63.0 million € (2010: 52.8 million €). This is equivalent to an increase by 19.3 %. The result 

from ordinary activities amounted to 30.6 million € in the reporting period (2010: 

51.3 million €) as the financial results declined significantly. One of the reasons was a 

substantial increase in impairment of financial assets. The significantly lower financial income 

amounted to 31.0 million € (2010: 58.0 million €). Income from investments totalled 

122.3 million € in the year 2011 (2010: 79.3 million €), up 54.2 %. 

As a property company, conwert pursues a strategy aiming to increase earnings and value. 

The core of its operating activities consists of the profitable management of its present 

property portfolio in compliance with environmental regulations, and of growth in selected 

high-yielding regions. 

134


Property Portfolio 

The business activities of conwert Immobilien Invest SE again focused on the optimisation of 

the property portfolio in 2011. Measures designed to increase earnings and value such as 

the refurbishment and modernisation of residential space, loft extensions and re-letting of 

portfolio properties were at the centre of the company’s activities. The improved situation of 

the property markets and increased interest on the part of predominantly private investors in 

residential properties led to strong proceeds on the sale of properties, which exceeded the 

2010 figures by nearly a third. As of 31 December 2011, proceeds on the sale of properties 

amounted to 49.6 million € in comparison with 37.8 million € in the year 2010. Most sales 

transactions took place in the third quarter of 2011. At the same time, rental income also 

increased as a result of conwert’s efficiency programme. No properties were purchased in 

Austria. 

The property portfolio of conwert Immobilien Invest SE consisted of 34 objects at the balance 

sheet date (2010: 44) with total usable space of 63,922 sqm (2010: 87,935 sqm). All of these 

properties were located in Austria. Property assets as of 31 December 2011 amounted to 

103.9 million € (2010: 147.9 million €), thus 44.0 million € less than in the previous year 

(2010: (29.7) %). 

Through its subsidiaries GJ-Beteiligungs- GmbH and G-Unternehmensbeteiligung GmbH as 

well as direct investments, conwert Immobilien Invest SE held stakes in property companies 

in Austria and abroad. The total property portfolio of the conwert Immobilien Invest SE Group 

including subsidiaries and lower-tier subsidiaries comprised 1,666 objects at the balance 

sheet date (2010: 1,811) with total usable space of roughly 2,146,097 sqm (2010: 2,453,000 

sqm) and a total value (according to IFRS) of 2,829 million € (2010: 3,238 million €). 

The average residential rent per month amounted to 5.37 €/sqm in 2011, after 5.19 €/sqm in 

the year 2010. This increase was realised despite the sale of numerous apartments with 

good rental prices per square meter. Strategic vacancies were reduced to 4.42 % due to the 

development programme launched in the year 2011 and targeted sales. This corresponds to 

an improvement by 14.0 % in comparison with the previous year (2010: 5.14 %). Actual 

vacancies deteriorated slightly to 10.13 % versus 9.97 % at the prior-year balance sheet 

date, with the share of construction and development vacancies declining significantly in this 

segment. Total vacancies amounted to 14.55 % in the reporting period after 15.11 % in the 

previous year. 

Property Services 

With its subsidiaries in the service sector, conwert is in a position to cover all property 

management and property service activities along the entire property value added chain. 

Services are provided both within the conwert Group and externally to third parties in the 

market. conwert offers services related to asset management, property management, 

brokerage as well as construction development and construction management. The 

privatisation of apartments and property consulting are also part of the service portfolio. All 

services are provided by the subsidiaries of the RESAG Group in Austria and the alt+kelber 

Group in Germany. 

In Austria and Germany, many things changed in the property service segment in the 

financial year 2011 and several successes were accomplished. Amongst other things, three 

asset management departments in Austria were merged to one, which led to significant 

synergies in the management and re-letting of properties. Moreover, the technical and facility 

management departments of the RESAG Group were restructured pursuant to the 

135


realignment of the group structure. The new customer centre, which had started trial 

operations in November 2010, started full operations in the first half of 2011. By 

31 December 2011, roughly 85,000 customer requests had been handled. From the 

perspective of alt+kelber Immobilienvertrieb GmbH, the financial year 2011 was 

characterised by massive restructuring measures as well as measures to enhance quality 

and optimise costs, which were successfully implemented. With the merger of individual 

sales companies of the alt+kelber Group, the goal of focusing sales competence was 

reached in 2011. One of the highlights of the alt+kelber property management was the 

expansion of asset management in the service segment in 2011. The cooperation with DWS 

Funds was expanded. Full investment was reached for the Access Wohnen I fund in 2011. 

The fund DWS Access Wohnen II was closed in 2011. First investments have been made. 

Due to the positive performance of the first two DWS funds, the follow-up product was 

approved by Deutsche Bank in 2011 and will be implemented in 2012. conwert plans to 

continue to seek and use growth opportunities through further investments in the future, in 

addition to the fund business. 

As of 31 December 2011, all subsidiaries taken together managed a total of 63,100 units. In 

comparison with the year 2010, with 57,618 units, this represented an increase by 9.5 % or 

5,482 units. Space under management also recorded an increase by 11.5 % to 

4.672.749 sqm in the past financial year 2011 (2010: 4,190,643 sqm). 40.9 % of the facility 

management services relating to the total space under management were provided internally 

for the conwert Group and 59.1 % for external market participants. Furthermore, 436,881 

sqm of vacant space were brokered with the help of service companies. Space brokered for 

third parties amounted to 212,742 sqm. 6,904 were sold through the company’s brokerage 

business, of which 115 objects accounted for 5,464 units. In addition, 7,811 rental units were 

brokered; 51 % of this total, or 3,986 rental units, for third parties in the market. 

The management companies of the conwert Group were in charge of a property portfolio with 

total usable space of 4,672,749 sqm as of the balance sheet date (1,909,410 sqm own space 

and 2,763,339 sqm for third parties). In 2010 the space under management was 

4,190,643 sqm (2,163,887 sqm own space and 2,026,756 sqm for third parties). 

Revenues 

In the financial year 2011, conwert Immobilien Invest SE increased its revenues by 19.3 % 

from 52.8 million € to 63.0 million €, which was attributable to the large number of sales. 

Overall, revenues consisted of 7.6 million € from the management of properties (2010: 

8.5 million €), 49.6 million € from proceeds on the sale of properties (2010: 37.8 million €) as 

well as 5.8 million € management fees charged to the Austrian subsidiaries (2010: 

6.4 million €). All revenues of the company were realised in Austria. 

Earnings 

Earnings before interest and taxes (EBIT) showed a clearly more positive figure in the 

financial year 2011 at (0.4) million € than in the previous year (2010: (6.7) million €). This 

development is above all attributable to lower personnel expenses, lower depreciation, 

amortisation and losses on receivables, substantially lower financing costs and currency 

translation differences as well as significantly lower other expenses. Due to higher 

impairments of financial assets, financial income declined considerably to 31.0 million € in 

2011, after 58.0 million € in the previous year. These impairments are primarily due to fair 

value adjustments of properties of subsidiaries. Moreover, the framework agreement for 

internal derivative contracts as part of cash pooling provides for charging interest expenses 

related to financial futures to the subsidiaries in accordance with their hedged credit volume. 

136


Accordingly, an amount of 19.9 million € was charged to the subsidiaries. Earnings before 

tax (EBT) fell from 51.3 million € in the previous year to 30.6 million €, which is primarily 

attributable to an increase in expenses related to financial assets of (100.7) million € (2010: 

(39.4) million €). A positive result of 23.4 million € was achieved for profit for the year (2010: 

41.9 million €). Accumulated profit recorded a significant decline from 56.7 million € in 2010 

to 30.1 million € in 2011. 

Asset and financial position 

The balance sheet total also recorded a slight decline in the financial year 2011 to 

1,705.4 million €, after 1,755.1 million € in the previous year. Due to its holding function and 

the main business activity of investment in properties, the company’s balance sheet structure 

is dominated by property, plant and equipment as well as financial assets. Due to the sale of 

properties, property, plant and equipment amounted to 103.9 million € and thus fell slightly 

short of the prior-year level (2010: 147.9 million €). 

In addition to property, plant and equipment, non-current assets also included financial 

assets of 1,323.0 million € at 31 December 2011, after 1,439.5 million € at the end of 2010. 

The main part of the financial assets was accounted for by shares in associates with 

1,247.8 million €. 

Equity remained stable at 1,250.0 million € at the balance sheet date 2011 (2010: 

1.251,6 million €). The company’s share capital remained unchanged at 31 December 2011. 

It amounted to 853.59 million € and was divided into 85,359,273 no-par shares. 

At 73.3 %, the equity ratio of conwert Immobilien Invest SE at 31 December 2011 slightly 

exceeded the prior-year level (2010: 71.3 %). 

Gearing at the balance sheet date amounted to 13.8 %. This is equivalent to a decline by 

47.9 % in comparison with the previous year (2010: 26.5 %). Gearing is the ratio of total net 

debt to equity. The massive drop is primarily attributable to an increase in non-current trade 

and other receivables and a decrease in non-current payables. 

In the reporting period, liabilities declined from 481.4 million € in 2010 to 403.8 million € 

(corresponds to a reduction by 16.1 %) and predominantly consisted of bond liabilities of 

292.5 million € (2010: 332.5 million €) and loans and borrowings of 85.4 million € (2010: 

117.4 million €). The main part of loans and borrowings carried variable interest. The interest 

rate is based on the EURIBOR. 84.0 % of the interest-bearing variable liabilities (held directly 

by the company and through first and second tier subsidiaries) were hedged against interest 

risks (2010: 85.4 %). 

Receivables shown on the assets side totalling 256.4 million € at the balance sheet date 

2011 (2010: 138.9 million €) largely consisted of receivables from fully consolidated 

companies at 221.3 million € and were therefore not subject to significant risks. 

137


Employees 

Every single employee is a central success factor for the conwert Group. It was only because 

of the exceptional commitment of each team member that conwert Immobilien Invest SE 

realised another good annual result in a difficult market environment in 2011. Therefore, the 

conwert management attaches great importance to creating an optimal working environment 

for all conwert employees. In the past financial year, the focus was primarily placed on 

further education of executives, young managers and all new employees. The career 

academy “conwert.karriere”, which was established in the year 2010, trained numerous 

executives and young managers at the conwert locations within the leadership programme 

“conwert.führung” in the financial year 2011. Priority was attached to seminars in the areas of 

leadership, personnel development for these target groups. Overall, 15 persons successfully 

completed training at the conwert academy in the year 2011. Employees were offered 

courses in the areas of tenancy and tax law, IT, organisation, occupational safety, safety in 

the case of fire, and first aid. Moreover, technical workshops and project management 

training courses were held. Expenses for training and further education in the conwert group 

totalled 103.0 T€ in the financial year 2011. 

At 31 December 2011, the conwert Group employed 660 people (FTE) at 53 conwert 

locations in six countries. Despite normal attrition and the outsourcing of individual segments, 

the number of employees remained stable overall (2010: 656 employees). For example, 

RESAG Insurance Broker was closed down, the activities of Lifestyle Living GmbH were 

discontinued and individual alt+kelber sales companies were merged in the year 2011. 

conwert hired 240 new employees in Austria and Germany in 2011, in order to meet new 

market requirements and to optimally fill key positions. 75 employees worked at the group’s 

headquarters in the past financial year, 95 employees for the RESAG Group in Austria and 

435 employees for the alt+kelber Group in Germany. In the other regions, an additional 

24 employees worked in order to provide optimal service for the portfolio locally. The slightly 

lower personnel expenses of 35.3 million € in the financial year 2011 (2010: 38.2 million €) 

essentially resulted from expiring management contracts and the related variable 

remuneration. 

Part-time models, and especially part-time models for parents, combined with flexitime are 

intended to make the work place within the conwert Group even more attractive for 

employees. In Austria and Germany, a total of 15 employees were on parental leave in the 

year 2011 and 159 employees worked part-time. At the same time, conwert trained 20 

apprentices in Germany. 

Part of the annual salary of employees in management positions consists of variable 

components. They depend to the accomplishment of group targets (EBIT target), 

interdepartmental targets and individual targets, which are renewed annually. In terms of 

social benefits, pension subsidies exist for long serving employees. In Austria and Germany, 

conwert invests in a provision for the future for employees. Life and accident insurance was 

provided for the Executive Directors. 

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Research & development 

The business model of conwert, which focuses on the development of older residential 

buildings and property services, does not require extensive research and development 

activities. Therefore, there is no separate department for research and development activities 

and they are not shown separately in the income statement. However, conwert continuously 

works on the improvement and modernisation of its properties and consults only recognised 

experts for this purpose. With these activities, conwert also takes the necessary steps in 

order to realise a sustainable increase in value and to secure the value of the properties in 

the long term. 

Prior to renovating an apartment building, conwert reviews, together with its partner 

companies, all measures that could increase the energy efficiency of the respective older 

residential property. In the course of the development activities, facades are (partially) 

insulated in attic conversions, windows and doors are exchanged and basements and roofs 

are completely (re-)insulated. This enables conwert to enhance the energy class of buildings 

from class D to class A. 

conwert tries to use environmentally friendly materials wherever possible in all development 

activities. In the course of refurbishments, existing residual pollution and materials containing 

toxic and environmentally harmful substances are eliminated and replaced with modern 

materials that present no health risks. conwert increasingly uses the ecologically outstanding 

building material wood for loft extensions because it by far more CO2 neutral than other 

materials. In addition, conwert ensures that material consumption is minimised through 

recycling and through the combination of existing, environmentally friendly raw materials with 

new materials. In this context, conwert also relies on innovative developments and consults 

external experts. 

In all its development activities conwert attaches great importance to primarily working with 

certified partners with special quality and eco-labels. Through innovative purchasing 

management costs can be cut considerably through the choice of suppliers on the one hand, 

and positive contributions can be made to research and development in the area of 

development activities on the other. 

In the year 2010, conwert started a cooperation with GRIFFNER, the market leader for 

prefabricated houses based on ecological building methods in Austria, which focused, 

among other things, on research and development. This cooperation was also continued in 

2011 with a project in Bujattigasse in the 14 th district of Vienna. In this project, only ecological 

building materials such as wood, cellulose and cork were used. An innovative, zero-emission 

heating system was developed, which is based on a heat pump system. 

The large-scale earth quake test, which conwert conducted together with the Austrian 

Institute of Experts for Structural Property Assessment (ÖIBI) in 2010, was part of a 

European research programme to determine the earthquake safety of older properties. The 

findings derived from it were used for both the development of new measuring techniques 

and the targeted modernisation of historic buildings in 2011. Based on the findings, conwert 

was able to plan a “loft conversion heavy” in accordance with the earthquake standard 

Eurocode 8 without the additional measures required otherwise. conwert thus made a 

scientific contribution and provided evidence for the safety of older properties in the course of 

this field test. 

139



Risk management system 

As an internationally operating group, conwert is exposed to a variety of risks. The group 

therefore has a comprehensive risk management system in place, which complies with 

international standards. This system is reviewed regularly for its functionality by internal and 

external bodies to ensure that internal quality requirements and legal regulations are met. 

The risk management system of conwert is developed further continuously and adapted to 

changing external conditions and altered internal requirements. In the past financial year, the 

catalogue of risks was revised and both the reporting processes and competences were 

adapted. This way, an effective and efficient risk management is to be guaranteed for the 

future. 

The risk management system implemented for the entire conwert Group is defined as a 

framework and based on concerted activities, methods and competences. 

The risk strategy comprises the basic formulation of the understanding of risks, the 

definition of the purpose and applicability of the risk management system as well as the clear 

differentiation from other functions and activities aimed at realizing the economic targets of 

the conwert Group. Like the overall strategy of the conwert Group, the risk strategy is 

adapted regularly to changed framework conditions. Moreover, the risk strategy of the 

conwert group provides that no incalculable risks are taken and that appropriate measures 

are implemented for calculable risks to ensure that no effects that could jeopardise the 

company’s ability to continue as a going concern are to be expected if such a risk 

materialises. 

Risk identification deals with defining risk areas, identifying individual risks as such and 

determining areas of observation, in which risk must be identified in any case. In addition, 

risk identification includes the identification of changes in the risk environment occurring in 

the short term, or of new risks. Risk identification is a permanent process, which is carried 

out in all areas of the group on an ongoing basis. 

In risk assessment the nominal risk potential (“effect”) of individual risks is determined 

taking into account the probability of occurrence. The nominal risk potential is the value 

which has a significantly negative influence on the planned result for the period. Identifiable 

risk correlations are taken into account. The aggregation of individual assessed risks, results 

in a cumulative risk position, which is reduced to a risk net position by measures of risk 

treatment. 

140


Risk treatment covers both preventative and reactive measures including ad hoc measures, 

which are taken in the case of suddenly occurring new risks. 

Risk communication serves for the structured collection, presentation and disclosure of 

information in the form of the reporting system by the defined risk owners to the group 

management. 

The implementation of risk management and of the measures defined in the risk 

management process is supervised as part of the ongoing monitoring. Monitoring also 

covers a regular review of the functionality of the entire risk management system. 

Risk management is conducted based on function and on the structure of the group, both 

centrally by managers (risk owners) in the areas of group management and administration, 

and decentrally by the regional managements in Germany, Austria and the other regions. 

The risk owners meet regularly (quarterly) as the Risk Management Board at the Risk-Jour- 

Fixe, where the main identified risks are dealt with and the monitoring is conducted if it falls 

under the competence of the risk owners. The administration and coordination of the entire 

risk management is carried out by the centralised management area “Controlling, Risk 

Management and ICS”, which falls under the scope of responsibility of the CFO. Risk 

management as such is the responsibility of the entire Executive Board, which reports to the 

Administrative Board on a regular basis. 

141


Categories of risks 

Six risk categories were identified within risk identification. These risk categories cover all 

sources of risks and levels of effect relevant to the conwert Group. Individual risks were 

identified for each category and summarised in a risk catalogue. The risk catalogue, together 

with the group risk management guideline, serves the risk owners as a basis for exercising 

the risk owner function. Based on the risk categories, the main risks, which are described in 

the following, are dealt with: 

Strategy 

Risks which may result from the development of the strategy for the group, from the 

implementation of the strategy, from strategic cooperations and investments as well as their 

management including the investment structure and the organisational contracts fall under 

the risk category “strategy”. Responsibility for the risk category “strategy” lies with the central 

group function “Group Strategy” as the risk owner, directly incorporating the entire Executive 

Board and the Chairman of the Administrative Board. 

Therefore, ongoing market observation and monitoring of the group segments based on plan 

values, continuous benchmarking and an active investor and public relations policy were 

established in the conwert Group in order to counteract risks in this category. In addition, the 

investment strategy of the conwert Group is clearly defined, with the economic parameters 

set out in the investment guidelines both for the regions and the sectors. Investments of any 

kind are subject to an adequate internal approval process depending on the investment 

volume. Nevertheless, it cannot be ruled out that the conwert Group could indirectly be 

jeopardised in its existence due to persisting developments that have adverse effects on the 

overall economy. 

142


Significant strategic risks 

Description of risk Effects Counter-measures 

General corporate risk 

+ Company’s development will 

not proceed as planned 

General economic risk 

+ Economic crises and market 

cycles encumber the 

property market 

+ Declining profitability 

+ Loss of efficiency 

+ Lack of identification with 

company by staff 

members 

+ Non-realisation of 

outside commissions 

+ Slumps on property 

markets 

+ Business drops 

+ Monitoring on an ongoing basis 

corporate divisions and budgets 

+ Monitoring of internal processes on 

an ongoing basis 

+ Diversified property portfolio: 

+ High degree of price stability due to 

high-value properties in top 

locations 

+ Income from a wide range of 

property services 

+ Focus of business activities on 

markets with a fundamentally 

positive development 

Organisation and IT 

The risk category “Organisation and IT” covers all potential scenarios that may occur as part 

of the regular management tasks including the selection and remuneration of employees and 

leadership as well as from organisational aspects and in all areas of information technology. 

The individual risks summarised under this category were assigned to the respective risk 

owners in the central group functions and, where there is a direct relation with the operating 

segments at the regional level, are managed by the regional managements as additional risk 

owners at the same time. As the central and regional activities are consistently coordinated, 

duplications of effort in processes are avoided without neglecting regularity aspects. 

Due to the special importance of the entire IT segment from a risk perspective, the existing IT 

strategy has been advanced further so that consequently no limitations of the operating 

activities of the conwert Group are to be expected in the future. However, situations could 

occur, especially as a result of unforeseeable criminal intrusion, which disrupt the proper 

operations of the IT infrastructure in such a way that it could be detrimental to the conwert 

Group. 

Market 

The risk category market covers risks that result from developments in markets in which the 

conwert group operates. They include risks arising from customer relations or the competitive 

situation. Therefore, the appointed risk owners in the operating segment at the regional level 

specifically monitor the competition and analyse the development of demand in the different 

markets on an ongoing basis. Due to the multi-dimensional diversification of the market 

services of the conwert Group, which is represented in several regionally and factually 

differentiated markets, there are no individual risks or risk clusters which could directly 

endanger the group’s existence from today’s perspective. Should any major permanent 

adverse changes occur in the future, this may, nevertheless, lead to considerable negative 

effect on the equity situation of the group. 

Economic and political environment 

The risks related to the economic and political environment were also assigned to the central 

function Investor Relations as the risk owner. This category includes primarily those risks 

which occur as a result of changes in legislation or macro-economic developments. If such 

risks materialize, the access to capital and liquidity for the conwert Group or its customers 

could become so difficult that a further participation in the market appears to be unfavourable 

143


in the long term or even has to be ruled out. Such risks may result from changes in the 

government’s subsidy or fiscal policy related to the establishment, purchase and sale of 

properties or due to inflationary economic developments or negative developments in the 

capital markets which are directly or indirectly influenced by overriding political interests. The 

conwert Group currently has a widely diversified and balanced financing structure and 

pursues a continuous improvement in the equity ratio. If borrowed or equity capital should 

become dramatically more expensive, this could also lead to a significant negative impact on 

the conwert Group. 

Operations 

Operating risks are those risks that result directly or indirectly from operating activities. The 

conwert Group is represented primarily in the letting, sale and service segments in its core 

markets. As the risk owners, the regional managements manage all identified risks in the 

above mentioned business units. The risks result from the respective service provision 

processes and, accordingly, are minimised through appropriate preventive measures 

integrated in the processes and controls so that no damage that may endanger continued 

operations can arise from today’s perspective. However, damage that jeopardises operations 

cannot be ruled out completely as this risk category also includes risks that cannot be 

influenced or fully covered by insurance. Such risks are, for example, natural hazards of all 

kinds or unconventional criminal activities, which are carried out on a large scale over a 

longer period of time. 

Key property-related risks 


Property valuations 

+ Fluctuations in property 

prices caused by 

alterations in economic 

parameters 

Sale of property 

+ Demand for residential 

and commercial 

properties collapses 

Lettings 

+ Lettings of apartments 

declines, or tenants fail 

to pay 

Development 

+ Volatility of costs of 

investing in project 

development 

+ Divergence in results 

reported in financial accounts 

+ Effects on credit rating 

+ Fluctuation of earnings in 

trading business 

+ Costs of vacancies 

+ Shortfall in rental incomes 

due to tenants with low credit 

ratings or due to falling 

market prices 

+ Cost overruns in project 

development 

+ Appraisals by independent experts 



+ Doing business in markets showing 

fundamentally positive trends 

+ Ongoing analyses of locations 

+ No-delay responses to market 

conditions and trends 

+ Strategy of increasing value to tap 

value potential in properties 

+ Proactive asset management 

reducing vacancies 

+ Examination of creditworthiness 

+ High degree of diversification of 

property portfolio 



+ Adjusting rents to market levels 

+ Strategy of increasing value and 

leading to write-ups of properties 

+ Spreading of cost-related risks 

among suppliers, service providers 

and others 

+ Agreeing upon penalties 

+ conwert Baudevelopment GmbH is 

an in-group supplier 

+ Supervision on an ongoing basis of 

budgets and stage of construction 

completion 

144


Finance 

This category includes all indirect and direct risks which have a significant effect on securing 

liquidity, securing solvency and thus the going concern of the conwert Group. It comprises 

securing income, securing cash and cash equivalents and hedges of interest charges on 

loans. In addition, it contains risks related to the timely and correct reporting to authorities 

and investors. 

conwert manages its liquidity requirements on the basis of continuously updated liquidity 

planning, which takes into account the probable and foreseeable cash inflows and outflows. 

Nevertheless, it cannot be ruled out that correlating endogenous or exogenous events in 

other risk categories can lead to liquidity shortages. With respect to compliance with timely 

reporting to authorities and investors, improvements in the systems used, their operational 

safety and the processes and methods applied are made on an ongoing basis. In the case of 

a longer-term complete failure of the systems used, delays may occur which make timely 

reporting impossible. 

Key financing and foreign exchange risks 


Capital market 

+ Volatility or crashes on 

exchanges 

+ Financial risks 

Interest rate risks 

+ Rising interest rates 

Credit risks 

+ Restrictive supplies of 

loans by banks 

Foreign exchange risks 

+ Volatile foreign 

currencies 

Risks from financial 

instruments 

+ Negative effects from 

evaluations 

+ Inefficient hedging of 

loan liabilities 

+ More difficult to secure equity 

+ Less liquidity 

+ Impaired capabilities of 

expansion 






+ Lessening of equity 

+ Evaluation of inefficient 

hedges negatively influences 

financial results 

+ Broad and long-term spreading of 

loans 

+ Strengthening of in-group financial 

resources 

+ Ongoing planning and management 

of liquidity 

+ Extending of liquidity base 

+ Entering into interest rate hedges 

(84.0 % of the variable-interest 

volume of financing is hedged) 

+ Ongoing assessing of risks from 

non-hedged credit volume 


loans 

+ Strengthening of in-group financial 

resources 


loans (average term of 11 years, 

received from more than 51 banks) 

+ conwert is nearly exclusively active 

in Eurozone (97 % of property 

assets) 

+ conwert has basically no foreign 

currency liabilities 

+ Umbrella hedges in holding 

company enable flexible 

assignment of loan liabilities at the 

SPV level 

+ The average interest rate on 

hedges amounts to 4.09 % 

145


Report on significant features of the internal control and 

risk management system with respect to the financial 

reporting process 

The Executive Board is responsible for the risk management of the conwert Group. With a 

view to the accountin process, risk management falls under the responsibility of the CFO, 

who is operationally supported in risk management by his staff. 

The ongoing internal reporting system is particularly important for a functioning risk 

management in the conwert Group. Risks can thus be identified at an early stage and 

countermeasures can be taken. Timely, quarterly reporting within a risk jour fixe, in which the 

individual risk owners participate, forms the basis for this. 

The parent company has provided uniform standards for the implementation and 

documentation of the accounting process for the subsidiaries. The objective is to prevent the 

risks of incomplete or incorrect financial reporting. In addition, the head office reviews the 

internal reports prepared by the subsidiaries for plausibility and compares them with the 

budget plans. Hence, appropriate measures can be taken rapidly in the case of deviations. In 

order to maintain the process described above, the subsidiaries are required to provide 

annual budgets for the following year in November of the current year. These budgets are 

subject to approval by the Executive Board. 

At regular meetings of the Executive Board with the regional and operating managers, the 

current business development and foreseeable opportunities and risks resulting from 

changed framework conditions are discussed. International accounting standards are 

complemented by internal guidelines in the preparation of the consolidated financial 

statements. 

This ensures a consistent presentation of the subsidiaries included in the consolidated 

financial statements in terms of measurement and presentation. 

The cornerstones of the existing internal control system and the risk management system 

with respect to the (group) accounting process at conwert Immobilien Invest SE can be 

described as follows: 

+ The conwert Immobilien Invest SE Group has a clearly defined structure of management 

and corporate operations. Cross-departmental requirements are specified by the central 

group management and administration. 

+ With a view to the accounting process, the functions of the accounting department are 

clearly separated from other areas such as payment transactions and group treasury. 

+ The finance systems are protected against unauthorised access by IT facilities. 

+ The finance systems employed use standard software wherever possible. 

+ An adequate system of guidelines (accounting guidelines, payment guidelines, etc.) is in 

place and is updated on a regular basis. 

+ Accounting data received and passed on is checked for completeness and correctness by 

the persons responsible, for example by taking random samples. 

+ The four-eye principle is applied to all processes relevant to financial accounting. 

+ The consolidation software MIS is used for the purpose of consolidation. For the principles 

of accounting and valuation refer to the notes to the consolidated financial statements. 

+ Processes relevant to accounting are audited by the (process-independent) internal audit 

department on a regular basis. 

The control and risk management system described ensures that all business transactions 

are correctly entered, processed and evaluated in the balance sheet and included in the 

146


accounting process. Qualified employees, the use of specific software and clear legal and 

internal regulations provide the basis for an appropriate, uniform and continuous accounting 

process. A clear separation of responsibilities as well as different control and verification 

mechanisms are to ensure a correct and responsible accounting process. Business 

transactions can thus be recorded, processed and documented in accordance with legal 

requirements, the articles of association and internal guidelines. 

147


Organisation and corporate structure incl. statement 

regarding branch offices 

conwert is a publicly listed, single-tier Societas Europaea (SE), which consists of three 

corporate bodies: the Administrative Board, the Executive Board and the Annual General 

Meeting. The company is represented by two Executive Directors together, two 

Administrative Board members together, one Administrative Board member together with an 

Executive Director or a holder of power of attorney, or by an Executive Director together with 

an a holder of power of attorney. Sole power of representation is thus not possible. The 

Administrative Board consists of a minimum of 3 and a maximum of 5 persons. 

The place of business of conwert Immobilien Invest SE is Vienna. The operating business is 

predominantly conducted through group-owned property holding companies. 

PROPERTY HOLDING COMPANIES 

In the business segment “Portfolio” conwert Immobilien Invest SE has wholly-owned 

subsidiaries in Austria, Germany, the Czech Republic, Hungary, Slovakia, Luxemburg and 

the Ukraine, which are operated as local property companies. As of 31 December 2011, the 

share held in ECO Business-Immobilien AG in Vienna amounted to 95.76 %. The results of 

ECO were fully consolidated for the first time in the third quarter of 2010. 

MANAGEMENT COMPANIES 

The management of conwert’s property portfolio, as well as trading and sales are carried out 

by conwert Management. The portfolios in Germany (located in Berlin & Leipzig) and 

Hungary (location Budapest), Slovakia (location Bratislava), the Czech Republic (location 

Brno) and the Ukraine (location Kiev) are each operated by local management companies. 

RESAG GROUP 

The RESAG Group is responsible for the property service business in Austria, including 

property management, administration, brokerage, apartment privatisations and the marketing 

of properties. conwert holds 100 % in RESAG Property Management GmbH and 49 % in 

RESAG Immobilienmakler GmbH. In 2011 the contracts with RESAG Immobilienmakler 

GmbH were completely renegotiated so that third-party comparisons are now possible. This 

will result in significant profitability and liquidity increases for conwert in the future. The 

property insurance brokerage business, which was previously the responsibility of RESAG 

Insurance Broker GmbH within the conwert Group, was externalised in 2011 for cost and 

efficiency reasons, and RESAG Insurance Broker GmbH was merged. 

CONWERT BAUDEVELOPMENT GMBH 

All construction management activities in Austria are currently performed by conwert 

Baudevelopment GmbH. The company primarily carries out modernisation projects. In the 

course of the corporate reorganisation conwert Bauträger GmbH was over several 

intermediate steps merged with RESAG Property Management GmbH. 

ALT+KELBER GROUP 

Since October 2007, alt+kelber has been a 100 % subsidiary of the conwert Group in Vienna. 

The alt+kelber Group is a service provider for residential properties in Germany and, with its 

subsidiaries in Germany, is responsible for all property services of conwert including property 

management, administration, brokerage and apartment privatisation. alt+kelber currently 

manages approx. 46,596 residential and commercial units in Germany, 13,745 units for 

conwert and 32,851 units for third parties. With the service segments consulting, 

management and marketing, alt+kelber addresses not only private and municipal housing 

companies, but also funds and banks as well as national and international private and 

148


institutional investors. The service provider, which was established 25 years ago and is 

based in Heilbronn, operates 46 offices throughout Germany and more than 430 employees. 

The restructuring/simplification of the alt+kelber Group has already been initiated and will be 

completed in 2012. 

149


Notes in accordance with § 243a para 1 UGB 

Transparency and Corporate Governance 

A transparent and lean company structure will also strengthen the attractiveness of the 

conwert share. This is why the Administrative Board unanimously decided to reduce the 

Executive Board to two persons – Franz Jürgen Kelber as COO and Thomas Doll as CFO – 

after Volker Riebel resigned as CEO on 6 July 2011, especially since the Administrative 

Board is more deeply involved in the operating business of a single-tier SE like conwert 

anyway. In accordance with § 243a para. 1 (9) of the Austrian Commercial Code (UGB), the 

two Executive Directors have the right to resign in the case of a takeover of conwert (“change 

of control”), which is associated with the entitlement to a payment of one up to a maximum of 

two gross annual salaries, depending on the remaining term of the employment contract. For 

more detailed information please refer to the Corporate Governance Report. In addition to 

different service relationships with subsidiaries which are included in the consolidated 

financial statements as fully consolidated companies, the following related-party transactions 

were carried out: Thomas Rohr, Executive Director of conwert until 15 March 2011, received 

commissions for property transactions brokered by him, which were paid via one of his 

companies. Two properties in Austria are let to Österreichisches Verkehrsbüro AG, whose 

CEO, Harald Nograsek, was a member of the Administrative Board of conwert Immobilien 

Invest SE until 20 May 2011. Subsidiaries of the alt+kelber Group are tenants of office space 

in an object in Germany. More detailed information on this topic can be found in the notes. 

At TPI Tourism Properties Invest AG, Volker Riebel resigned from the supervisory board 

in the extraordinary general meeting of 19 December 2011. Johannes Meran was 

elected as a new member of the Supervisory Board with effect from the close of the 

general meeting on 19 December 2011. 

SHARES OF THE COMPANY 

AND POSITION OF ITS SHAREHOLDERS 

On the balance sheet date at 31 December 2011, the share capital of conwert Immobilien 

Invest SE amounted to 853,592,730 €. It consists of 85,359,273 no-par ordinary bearer 

shares with voting rights, each with a stake of 10.00 € in the share capital. The company’s 

share capital is paid in entirely and all shares are evidenced in an amendable collective 

certificate. The certificate is deposited with Oesterreichische Kontrollbank AG, Am Hof 4, 

1010 Vienna, as the custodial bank. In accordance with the articles of association claims to 

individual share certificates are excluded. All of the company’s shares issued as of the 

balance sheet date are admitted to trading on the Vienna Stock Exchange under the ISIN 

AT0000697750. 

Every single share grants its holder the right to participate in the Annual General Meeting 

and to exercise voting rights. Each share corresponds to one vote. Therefore no shareholder 

possesses any special rights of control. 

To the knowledge of the company, approximately 76.0 % of the shares were free float as of 

31 December 2011, 4.5 % of the shares were in the possession of the company as a result 

of buying back treasury shares. The remaining shares of approx. 23 % were held by a group 

of core shareholders with a long-term commitment, which includes Petrus Advisers 

Management Ltd, Petrus Advisers Control Investment Ltd, Albona I LP, Albona II LP, Albona 

III LP, Albona Ltd, Valluga LP and Valluga II LP. The Administrative Board and the Executive 

Board have no knowledge of any major changes in the shareholder structure after the 

balance sheet date. 

In accordance with § 4 paragraph 3 of the articles of association as amended on 

11 October 2010, the Administrative Board was authorised until 8 June 2011 to increase the 

share capital of the company by a nominal 26,674,770 € by issuing up to 2,667,477 no-par 

150


bearer shares at a minimum issue price of 100% of the proportionate stake in the share 

capital per share, for a cash contribution or contribution in kind. This increase was possible in 

one or several tranches, also entirely or partially excluding subscription rights and also by 

means of indirect subscription rights in accordance with § 153 paragraph 6 of the Stock 

Corporation Act. In addition, the Administrative Board was authorised to determine the issue 

price and the conditions of the issue (authorised capital). However, the Administrative Board 

did not exercise this right. 

In accordance with § 38 paragraph 2 SEG in conjunction with § 169 AktG, the Administrative 

Board is also authorised until 25 October 2012 to increase the company’s share capital by up 

to nominal 400,121,590 € by issuing up to 40,012,159 no-par bearer shares at a minimum 

issue price of 100 % of the proportionate stake in the share capital in one or several 

tranches, also by means of indirect subscription rights in accordance with § 153 paragraph 6 

of the Stock Corporation Act, for a cash contribution or contribution in kind, and to determine 

the issue price and the conditions of the issue. 

Furthermore, at the Administrative Board of conwert Immobilien Invest SE was authorised at 

the extraordinary shareholder meeting of 11 October 2010 to acquire treasury shares of the 

company up to a legally defined maximum of 10 % of the share capital at a minimum price of 

4.0 € and a maximum of 14.0 € per share. The buyback of treasury shares is valid during a 

period of 30 months starting on the day the resolution is adopted. At its meeting held on 

14 June 2011, the Administrative Board adopted, based on the authorisation by the Annual 

General Meeting, the sixth share buyback programme, which is valid from 1 July 2011 to 

30 June 2012. In the five preceding share buyback programmes, 2,894,445 conwert shares 

totalling 30.5 million € (not including fees) were repurchased in the period from 31 January 

2008 to 30 June 2011, of which 177,000 shares amounting to a total value of 2.1 million € 

were settled after 30 June 2011. In the course of the sixth share buyback programme, a total 

of 967,519 shares with a value of 10.2 million € (not including fees) were acquired by 

31 December 2011. This corresponds to approximately 1.13 % of the entire share capital. In 

total, the portion of treasury shares amounted to 4.52 % of the share capital (i.e. 

3,861,964 shares) at the balance sheet date on 31 December 2011 and a value of 

40.6 million € (not including fees). Considering the whole year 2011, a total of 

2,749,867 shares of a total value of 30.8 million € (not including fees) were bought back. This 

amount represents 3.22 % of conwert’s share capital. In addition, the settlement for 11,485 

units worth 0.1 million €, which had been purchased before 31 December 2010, was carried 

out. 

In accordance with the Austrian Stock Exchange Act and the Publication Regulation, 

changes and transactions made within the buyback programme are published on the website 

www.conwert.at. 

Other statements in accordance with § 243a paragraph 1 UGB are not applicable. 

Amendments to the articles of association are subject to a resolution by the Annual General 

Meeting. 

151


Outlook 

The overall economic situation in the euro area is still tense and early economic indicators 

suggest a mild recession. In its forecast for the year 2012 from February of the current year, 

the EU Commission expects GDP to decline by 0.3 % in the euro area. The Commission 

thus predicts a stagnation in economic growth for the year 2012, but sees indications that the 

European economy will stabilise. Inflation is expected to amount to 2.3 % in the European 

Union (EU27) in the current year. Moreover, the Monetary Council of the European Central 

Bank again decided to maintain the base rate at 1 % at its regular meeting on 9 February 

and on 8 March 2012. However, several experts assume that, with determined actions, a 

turnaround is possible in the course of the year 2012 and the European Union will be able to 

achieve growth and increasing employment figures through the stabilisation. (Peter 

Brezinschek, Raiffeisen Research, Q4/ 2011) 

According to a forecast by the German Institute for Economic Research (DIW) in Berlin on 

the development of the real gross domestic product in Germany in the year 2012, GDP 

growth is expected to amount to 0.6 % compared with the previous year. In contrast, a 2.2 % 

change in GDP is forecast for the year 2013. (DIW Berlin; Federal Statistical Office) 

Although from today’s perspective it is not yet certain whether the measures taken so far by 

the EU and the ECB will suffice, many financial experts assume that the euro area has the 

means to end the crisis. Therefore, they still do not expect another recession of the Austrian 

economy. However, the confidence crisis is likely to leave massive traces on the real 

economy in Austria in the year 2012. The EU Commission therefore only expects an 

increase by 0.7 % in the Austrian GDP. Moreover, it assumes that demand by the public 

sector will decline also in Austria in 2012, which may lead to a reduction of investment 

activities. The Commission predicts an inflation rate of approx. 2.4 % in Austria in the year 

2012. Despite overcoming the confidence crisis, growth prospects will remain subdued as 

the reins will be tightened significantly in terms of fiscal policy, but thanks to a more robust 

global upswing, a higher increase in GDP should be possible again in 2013. (Unicredit 

Research, 15 December 2011, EU Commission, Interim Forecast February 2012) 

The residential property boom in Vienna will continue in 2012 despite, or rather because of, 

the weak economic prospects, according to experts. Freehold flats are considered an ideal 

investment in the debt crisis. In 2011, freehold flats recorded price increases between 7 % 

and 9 % in individual submarkets. Especially in the sixth, seventh and ninth districts, prices 

per square meter exceeded 5,000 €. The fifth and the adjacent twelfth district, previously less 

popular, are expected to outperform the market average in 2012, according to experts’ 

forecasts. This upward trend will not prevail in terms of rental prices. Competition from 

municipal and non-profit housing with legally defined upper limits for rents and the strong 

demand for freehold flats should dampen an upward development for rents. The increase will 

roughly correspond to the inflation rate in the experts’ opinion. ( EHL, Report on investment 

properties 2012) 

According to property experts, tenants and property buyers should be prepared for rising 

costs in 2012, with a significant increase forecast for new rentals in strained residential 

markets. Here, new tenancy agreements may exceed the customary local rents by between 

10 % and 30 %. Current studies show that buyers of properties will also have to pay more in 

2012. According to calculations of the Association of German Pfandbrief Banks (vdp), owneroccupied 

homes in Germany were as expensive as never before since this value was first 

calculated in the year 2003. In particular, freehold condominiums were substantially more 

expensive for buyers than in 2011. Within a year, prices rose by 5.2 %. Against this 

background, permits for property projects also rose by 21 %. The causes were low interest 

rates, declining unemployment and the growing popularity of tangible assets during the crisis. 

While the decline in public sector building projects caused some concern for the construction 

152


industry, housing construction will provide a stimulus for the construction activities in the 

years to come, according to the ifo Institute. The institute estimates that more than 200,000 

new apartments will be built in Germany in 2013, nearly 50 % more than in 2009. Thanks to 

brisk demand for apartments, the ifo experts expect an average annual growth of just under 

0.5 % to 254 billion € until 2020. In contrast to this trend, public sector construction projects 

will drop from 38.5 billion € to less than 35.0 billion € by 2020. (Study of Dr. Zitelmann) 

Outlook conwert for 2012 

As in the past financial year, conwert has set itself ambitious goals for the year 2012 in terms 

of both the property portfolio and the financial key figures. The company will continue to 

consistently pursue its strategy, which was introduced in early 2011 and focuses on the core 

business, enhanced transparency and improved performance in order to make the company 

and its shares more attractive for investors and third parties in the market. 

With regard to the property portfolio, special importance will be attached to two main 

objectives in the next two years: on the one hand, the sale of assets up to 1.0 billion € is 

planned above all in Austria, with the proceeds on property sales in the year 2012 accounting 

for roughly half of this amount, i.e. 500 million €. At the same time, conwert pursues the 

objective to increase the average yield throughout the entire property portfolio to 6.5 % by 

the end of 2013. This target is to be achieved by strengthening the portfolio in Germany, the 

sale of ECO objects with a high vacancy rate and low yield, and the externalisation of 

property development due to the risk-profit profile. However, conwert will continue to take 

advantage of opportunistic purchasing possibilities in Austria as well and resort to the special 

expertise in the development of and trading in apartment buildings. The expertise of the 

conwert Group in the development sector in Austria is to be used, especially after the 

installation of a new management team, to also make opportunistic purchases of objects 

where there is significant development potential and the possibility of a resale within two 

years. A tax-based analysis has indicated that it is advantageous to carry out such 

transactions within the conwert Group with ECO companies. 

The conwert service segment will be significantly expanded in the year 2012, so that the 

assets under management at the end of the current financial year should equal up to 

1.0 billion €. conwert currently manages properties with a value of approximately 

288 million € from the first two DWS residential property funds with long-term contracts of 

11 to 25 years, with another DWS fund in preparation (see the post-balance-sheet report 

below). 

Post-balance-sheet-date-report 

No events of significant importance for the company which would have led to a different 

presentation of the assets, financial and earnings position took place after the balance sheet 

date on 31 December 2011. 


The Executive Board 

of 


Thomas Doll m.p. Franz Jürgen Kelber m.p. 

Member Member 

153

Annual Financial Statement 2011 

conwert Immobilien Invest SE, Wien 

31 December 2011 

BALANCE SHEET AS OF 31 DECEMBER 2011 

ASSETS EQUITY AND LIABILITIES 

Balance on Balance on Balance on Balance on 

31.12.2011 30.12.2010 31.12.2011 30.12.2010 

EUR EUR EUR TEUR EUR EUR TEUR 

A. NON-CURRENT ASSETS A. EQUITY 

I. Intangible assets I. Issued capital 853.592.730,00 853.593 

Concessions and rights 19.880,23 15 II. Share premium 

II. Property, plant and equipment Appropriated 333.282.976,42 333.283 

1. Land, rights to land and buildings, including III. Reserves 

buildings on land owned by third parties 100.201.577,89 138.480 Reserve for treasury shares 32.998.615,12 8.008 

Thereof value of land EUR 21.163.691,39 (2010 TEUR 29.493) IV. Profit (loss) account 30.098.111,35 56.734 

2. Investments in building owned by third parties 119.604,19 129 Thereof profit carried forward 

3. Prepayments and construction in progress 3.572.055,87 9.279 EUR 31.714.696,67 (2010 TEUR 8.325) 

103.893.237,95 147.888 1.249.972.432,89 1.251.618 

III. Financial assets 

1. Shares in subsidiaries 1.274.789.739,48 1.403.082 B. PROVISIONS 

2. Investments in other companies 10.836.664,78 6.648 1. Tax provisions 16.856.900,00 13.634 

3. Securities 4.370.854,30 21.802 2. Other provisions 29.931.296,69 4.819 

4. Treasury shares 32.998.615,12 8.008 46.788.196,69 18.453 

1.322.995.873,68 1.439.540 

1.426.908.991,86 1.587.443 C. LIABILITIES 

1. Bonds 292.483.841,00 332.455 

B. CURRENT ASSETS 2. Interest-bearing loans and borrowings 85.383.292,06 117.413 

I. Receivables and other assets 3. Trade accounts payable 2.109.837,61 2.050 

1. Trade accounts receivable 4.042.899,48 864 4. Amounts due to subsidiaries 13.068.033,05 24.098 

2. Receivables due from subsidiaries 221.343.056,07 125.209 5. Other liabilities 10.716.064,32 5.421 

3. Receivables due from companies Thereof taxes EUR 3.972.283,44 (2010 TEUR 1.047) 

in which an investment is held 3.669.246,80 3.342 Thereof social security 

4. Other receivables and assets 27.372.999,68 9.524 EUR 2.320,96 (2010 TEUR 54) 

256.428.202,03 138.939 403.761.068,04 481.437 

II. Cash and deposits with financial institutions 22.059.983,72 28.695 

278.488.185,75 167.634 D. DEFERRED INCOME 4.875.479,99 3.569 

1.705.397.177,61 1.755.077 1.705.397.177,61 1.755.077 

CONTINGENT LIABILITIES 516.260.433,77 644.442 

154


conwert Immobilien Invest SE, Vienna 


INCOME STATEMENT 

FOR THE PERIOD FROM 1 JANUARY 2011 TO 31 DECEMBER 2011 

2 0 1 1 2 0 1 0 

EUR EUR TEUR TEUR 

1. Revenues 

2. Other operating income 

62.957.389,16 52.825 

a) Income from the reversal of provisions 492.552,76 389 

b) Miscellaneous 2.755.648,11 3.248.200,87 3.564 3.953 

3. Cost of materials and services 

a) Cost of materials 40.222.202,66 29.523 

b) Cost of services 

4. Personnel expenses 

2.835.189,36 -43.057.392,02 3.090 -32.613 

a) Salaries 

b) Expenses for legally required social security 

and payroll-related duties and 

2.434.321,65 4.063 

mandatory contributions 172.168,14 428 

c) Other employee-related expenses 3.047,71 -2.609.537,50 0 -4.491 

5. Depreciation and amortisation 

Thereof impairment charges 

EUR 0,00 (2010 TEUR 950) 

6. Other operating expenses 

-2.528.455,56 -3.812 

a) Non-income-based taxes 542.330,41 355 

b) Miscellaneous 17.878.210,87 -18.420.541,28 22.161 -22.516 

7. Subtotal of No. 1 to 6 (operating profit) -410.336,33 -6.654 

8. Income from investments in other companies 

Thereof from subsidiaries 

EUR 122.258.126,30 (2010 TEUR 79.328) 

9. Income from other securities 

122.258.126,30 79.328 

recorded under financial assets 46.403,77 33 

10. Interest and similar income 


EUR 10.004.927,23 (2010 TEUR 5.212) 

11. Income from the disposal and 

38.982.314,57 38.050 

write-up of financial assets 20.575.889,94 31.641 

12. Expenses arising from financial assets 

Thereof impairment charges 

EUR 72.799.621,76 (2010 TEUR 39.404 ) 


EUR 100.695.947,06 (2010 TEUR 39.404 ) 

-100.695.947,06 -39.404 

13. Interest and similar expenses 

Thereof to subsidiaries 

EUR 754.976,25 (2010 TEUR 481) 

-50.155.465,41 -51.689 

14. Subtotal of No. 8 to 13 (financial results) 31.011.322,11 57.959 

15. Profit on ordinary activities 30.600.985,78 51.305 

16. Income taxes -7.227.103,50 -9.383 

17. Net profit for the year 23.373.882,28 41.922 

18. Reversal of reserves 0,00 6.487 

19. Addition to reserves -24.990.467,60 0 

Loss for the year -1.616.585,32 48.409 

20. Profit carried forward 31.714.696,67 8.325 

21. Total profit 30.098.111,35 56.734 

155


conwert Immobilien Invest SE, Vienna 


SCHEDULE OF NON-CURRENT ASSETS IN ACCORDANCE WITH § 226 (1) OF THE AUSTRIAN COMMERCIAL CODE AS OF 31 DECEMBER 2011 

Acquisition or production cost Accumulated Book value Book value Depreciation Write-ups 

Balance on Additions Reclassification Disposals Balance on depreciation 31.12.2011 30.12.2010 for the for the 

31.12.2010 31.12.2011 financial year financial year 

EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR 

NON-CURRENT ASSETS 

I. Intangible assets 

Concessions, rights 

II. Property, plant and equipment 

1. Land, rights to land and buildings 

29.889,03 22.378,09 0,00 0,00 52.267,12 32.386,89 19.880,23 14.944,51 17.442,37 0,00 

Value of land 29.980.276,87 0,00 0,00 8.346.820,34 21.633.456,53 469.765,14 21.163.691,39 29.492.899,41 0,00 0,00 

Value of buildings 123.851.840,78 473.698,07 3.966.857,18 36.559.142,57 91.733.253,46 12.695.366,96 79.037.886,50 108.987.267,89 2.496.942,11 0,00 

153.832.117,65 473.698,07 3.966.857,18 44.905.962,91 113.366.709,99 13.165.132,10 100.201.577,89 138.480.167,30 2.496.942,11 0,00 

2. Investments in buildings owned by third parties 135.860,10 4.608,17 0,00 0,00 140.468,27 20.864,08 119.604,19 129.067,10 14.071,08 0,00 

3. Prepayments and construction in progress 9.279.247,36 1.159.665,69 -3.966.857,18 2.900.000,00 3.572.055,87 0,00 3.572.055,87 9.279.247,36 0,00 0,00 

III. Financial assets 

163.247.225,11 1.637.971,93 0,00 47.805.962,91 117.079.234,13 13.185.996,18 103.893.237,95 147.888.481,76 2.511.013,19 0,00 

1. Shares in subsidiaries 1.481.332.580,29 15.332.140,58 0,00 89.544.114,66 1.407.120.606,21 132.330.866,73 1.274.789.739,48 1.403.082.001,30 64.990.287,74 10.910.000,00 

2. Investments in other companies 6.648.467,48 4.437.166,87 0,00 248.969,57 10.836.664,78 0,00 10.836.664,78 6.648.467,48 0,00 0,00 

3. Securities 21.802.834,00 11.301.248,00 0,00 28.732.248,50 4.371.833,50 979,20 4.370.854,30 21.801.854,80 0,00 0,00 

4. Treasury shares 10.696.644,62 30.921.382,84 0,00 0,00 41.618.027,46 8.619.412,34 32.998.615,12 8.008.147,52 7.809.334,02 1.878.418,78 

1.520.480.526,39 61.991.938,29 0,00 118.525.332,73 1.463.947.131,95 140.951.258,27 1.322.995.873,68 1.439.540.471,10 72.799.621,76 12.788.418,78 

1.683.757.640,53 63.652.288,31 0,00 166.331.295,64 1.581.078.633,20 154.169.641,34 1.426.908.991,86 1.587.443.897,37 75.328.077,32 12.788.418,78 

156


Notes to the Individual Financial Statements of 


1. Significant accounting policies 

1.1. General information 

The annual financial statements were prepared in accordance with Austrian generally 

accepted accounting principles as well as the general objective of providing a true and fair 

view of the asset, financial and earnings position of the company. 

The principle of completeness was observed in preparing the individual financial statements. 

The income statement was prepared in accordance with the nature of expense method under 

which “total costs“ are shown. 

The valuation methods applied to the 2010 financial statements were also applied in preparing 

the annual financial statements for 2011. 

Assets and liabilities were valued individually. 

The valuation also reflects the assumption that the company will continue as a going concern. 

The principle of conservatism was observed in that only those profits realised as of the 

balance sheet date were included in the annual financial statements. Recognisable risks and 

impending losses that occurred during the reporting year or in a previous accounting period 

were also included in the annual financial statements, even if these circumstances first became 

known between the balance sheet date and the date the annual financial statements were 

prepared. 

157


1.2. Non-current assets 

1.2.1. Property, plant and equipment 

Property, plant and equipment consist chiefly of real estate that is carried at acquisition or 

production cost less ordinary depreciation. 

Ordinary depreciation is calculated according to the straight-line method. Properties are 

depreciated over a useful life of 50 years. 

An impairment loss was recognised in cases where the fair value of an object was lower than 

its depreciated cost. 

1.2.2. Financial assets 

Financial assets are valued at cost less any necessary impairment losses. Impairment charges 

are recognised to investments in other companies and non-current securities if the decline in 

value is considered to be lasting. 

Treasury shares are always written down to the lower of purchase price and market price as of 

the respective balance sheet date. 

1.3. Current assets 

1.3.1. Receivables 

Receivables are recognised at nominal value and shown in detail on the balance sheet. 

Recognisable individual risks are reflected in the use of a lower value that is appropriate 

under the given circumstances. 

1.3.2. Deposits with financial institutions 

These items are carried at nominal value. 

1.4. Equity 

Equity comprises issued capital, the appropriated share premium, reserves, profit or loss 

carried forward and profit or loss for the year. 

1.5. Provisions 

1.5.1. Other provisions 

Other provisions are created in accordance with the principle of conservatism for all 

identifiable risks and obligations that cannot be quantified or are uncertain at the time the 

financial statements are prepared. They reflect the amounts required by reasonable business 

judgment. 

158


1.6. Liabilities 

Liabilities (with the exception of bonds) are recognised at their repayment amount. 

On 7 November 2007 conwert Immobilien Invest SE issued a convertible bond with a price of 

EUR 100,000 per certificate and a total value of EUR 196.4 million. The conversion premium 

equalled 130% of the common share price on the date the convertible bond was issued. 

The conversion right can be exercised at any time from 27 December 2007 to 3 November 

2014. If the conversion right is not exercised, the bonds will be redeemed on 12 November 

2014 at a price of EUR 111,490 per certificate. Interest is paid annually up to settlement at a 

rate of 1.5% per year. 

The difference between the issue price of the bond and the higher repayment amount will be 

recognised over the term of the security. 

Bond certificates that have not been converted or redeemed as of 12 November 2012 may be 

put to the company for redemption. The issuer is entitled to redeem the bond prematurely at 

the applicable redemption price on or after 24 November 2010, if the price of the common 

shares to be delivered upon conversion equals at least 130% of the redemption amount on 20 

of 30 successive stock exchange days. 

Convertible bonds with a nominal value of TEUR 32,319 had been repurchased for 

TEUR 45,400 by the end of the 2011 financial year. In 2011 convertible bonds with a nominal 

value of TEUR 41,900 were withdrawn and therefore redeemed. The remaining convertible 

bonds are reported on the balance sheet under financial assets (non-current). 

In the first quarter of 2010 conwert Immobilien Invest SE issued another convertible bond 

with a price of EUR 100,000 per certificate and a total value of EUR 135.0 million. This bond 

has a six-year term ending on 1 February 2016. The bondholders have the right to put their 

bond certificates prematurely four years after the date of issue at the nominal value plus 

accrued interest. The convertible bond certificates were issued at 100% of the nominal value 

of EUR 100,000. Interest is paid semi-annually at a rate of 5.25% per year. The conversion 

price was adjusted from EUR 12.06 to EUR 11.60 to reflect the dividend payment. 

159


Notes to individual positions on the balance sheet 

2.1. Non-current assets 

Development 

The development of the individual components of non-current assets and the classification of 

annual depreciation or amortisation by component are shown on the schedule of non-current 

assets. 

Property, plant and equipment 

Land, rights to land and buildings, including buildings on land owned by third parties, totalled 

TEUR 100,202 as of 31 December 2011 (2010: TEUR 138,480). This amount includes land 

with a value of TEUR 21,164 (2010: TEUR 29,493) and buildings with a value of 

TEUR 79,038 (2010: TEUR 108,987). No borrowing costs were capitalised during the 

reporting year (2010: TEUR 0). Property, plant and equipment also include TEUR 120 (2010: 

TEUR 129) of investments in buildings owned by third parties. 

The remaining property, plant and equipment represent construction in progress of 

TEUR 3,572 (2010: TEUR 9,279). 

Property, plant and equipment totalled TEUR 103,893 as of 31 December 2011 (2010: 

TEUR 147,888). 

Financial assets 

Financial assets include shares in subsidiaries. The subsidiaries of conwert Immobilien Invest 

SE are listed below: 

Stake in 2011 Stake in 2010 

Austria 

G-Unternehmensbeteiligung GmbH 100.00 % 100.00 % 

Con value one Immobilien GmbH 98.42 % 98.42 % 

GGJ Beteiligungs GmbH 100.00 % 100.00 % 

CONWERT SECURITISATION Holding GmbH 100.00 % 100.00 % 

TPI Tourism Properties Invest AG 92.00 % 92.00 % 

conwert Dienstleistung und Bauträger Holding GmbH 100.00 % 100.00 % 

conwert Treasury OG 100.00 % 100.00 % 

LLL-Luxury Living Liegenschaftsentwicklungs GmbH 0.00 % 99.00 % 

CWG Beteiligungs GmbH 100.00 % 100.00 % 

Berolinum Liegenschaftbesitz GmbH 0.00 % 94.90 % 

conwert Projektentwicklungs GmbH 99.03 % 99.03 % 

Cicero 1 Holding GmbH 100.00 % 100.00 % 



ECO Business Immobilien AG 

Germany 

95.76 % 95.76 % 

conwert Immobilien Invest GmbH 94.90 % 94.90 % 

conwert Berlin 2 Immobilien Invest GmbH 94.90 % 94.90 % 

conwert Immobilien Development GmbH 100.00 % 100.00 % 

conwert Grazer Damm Development GmbH 100.00 % 100.00 % 

conwert Viktoria Quartier Invest GmbH 100.00 % 100.00 % 

conwert beta Invest GmbH 100.00 % 100.00 % 

conwert gamma Invest GmbH 100.00 % 100.00 % 

conwert delta Invest GmbH 75.00 % 75.00 % 

conwert Grundbesitz Leipzig Bestand GmbH 100.00 % 100.00 % 

160


conwert Grundbesitz Leipzig Besitz GmbH 100.00 % 100.00 % 

conwert lambda Invest GmbH 75.00 % 75.00 % 

conwert epsilon Invest GmbH 100.00 % 100.00 % 

conwert sigma Invest GmbH 100.00 % 100.00 % 

conwert omega Invest GmbH 100.00 % 100.00 % 

conwert Sachsen Invest GmbH 100.00 % 100.00 % 

conwert Deutschland Beteiligungsholding GmbH 100.00 % 100.00 % 

conwert Centaurus Invest GmbH 100.00 % 100.00 % 

conwert Pegasus Invest GmbH 100.00 % 100.00 % 

conwert Deutschland Holding GmbH 100.00 % 100.00 % 

conwert Wohn-Fonds GmbH 100.00 % 100.00 % 

conwert Leo Invest GmbH 100.00 % 100.00 % 

conwert Taurus Invest GmbH 100.00 % 100.00 % 

conwert Cassiopeia Invest GmbH 100.00 % 100.00 % 

Defida Verwaltungs GmbH 100.00 % 100.00 % 

Defida 2016 GmbH & Co. KG 95.90 % 95.90 % 

GAG Grundstücksverwaltungs-GmbH 94.90 % 94.90 % 

Cor 18. GmbH & Co KG 94.90 % 0.00 % 

The additions to shares in subsidiaries amounted to EUR 15,332,140.58 (2010: 

TEUR 337,211) and represent acquisitions as well as shareholder contributions to 

subsidiaries. 

Shares in subsidiaries: 


Company 

Head- 

Equity as of Results for 

quarters Book value Stake 31.12.2011 2011 

TEUR TEUR TEUR 

G-Unternehmensbeteiligung GmbH Vienna 0 100.00 % 35 (4,893) 

Con value one Immobilien GmbH Vienna 9,356 98.42 % 409 (364) 

GGJ Beteligungs GmbH 

CONWERT SECURITISATION 

Vienna 0 100.00 % 116 364 

Holding GmbH 

Vienna 700 100.00 % 2,182 5,347 

TPI Tourism Properties Invest AG 

conwert Dienstleistung und Bauträger 

Vienna 41,889 92.00 % 45,550 (11,147) 

Holding GmbH 

Vienna 131,139 100.00 % 131,104 81,043 

conwert Treasury OG Vienna 539,220 100.00 % 539,220 28,315 

CWG Beteiligungs GmbH Vienna 70,317 100.00 % 71,064 (33,761) 

conwert Projektentwicklungs GmbH Vienna 3,821 99.03 % 1,744 319 

Cicero 1 Holding GmbH Vienna 57,803 100.00 % 57,209 1,653 

Cicero 2 Holding GmbH Vienna 4,145 100.00 % 4,669 (1) 

Cicero 3 Holding GmbH Vienna 16,546 100.00 % 16,520 (1) 

ECO Business Immobilien AG Vienna 264,356 95.76 % 318,241 (80,332) 

conwert Immobilien Invest GmbH 

conwert Berlin 2 Immobilien Invest 

Berlin 7,646 94.90 % 10,655 694 

GmbH 

conwert Immobilien Development 

Berlin 1,717 94.90 % 2,767 947 

GmbH 

conwert Grazer Damm Development 

Berlin 0 100.00 % (618) (392) 

GmbH 

Berlin 22,366 100.00 % 25,303 1,036 

conwert Viktoria Quartier Invest 

Berlin 

GmbH 

25 100.00 % (961) 444 

conwert beta Invest GmbH Berlin 4,025 100.00 % 2,385 1,015 

conwert gamma Invest GmbH Berlin 38 100.00 % 1,116 36 

conwert delta Invest GmbH 

conwert Grundbesitz Leipzig 

Berlin 6,564 75.00 % 5,035 (351) 

Bestand GmbH 

conwert Grundbesitz 

Leipzig 45,662 100.00 % 44,439 1,078 

161


Leipzig Besitz GmbH Leipzig 299 100.00 % (102) (24) 

conwert lambda Invest GmbH Berlin 0 75.00 % (11,023) (2,566) 

conwert epsilon Invest GmbH Berlin 7,025 100.00 % 5,888 772 

conwert sigma Invest GmbH Berlin 567 100.00 % (489) (825) 

conwert omega Invest GmbH Berlin 3,025 100.00 % (23,959) (4,830) 

conwert Sachsen Invest GmbH 

conwert Deutschland Beteiligungs- 

Berlin 24,806 100.00 % 27,557 805 

holding GmbH 

Berlin 

25 

100.00 % 

(1,039) 

conwert Centaurus Invest GmbH Berlin 1,291 100.00 % 4,425 (1,431) 

conwert Pegasus Invest GmbH Berlin 0 100.00 % (4,396) (1,055) 

conwert Deutschland Holding GmbH Berlin 7,025 100.00 % 6,880 (29) 

conwert Wohn-Fonds GmbH Heilbronn 30 100.00 % 6 (17) 

conwert Leo Invest GmbH Heilbronn 0 100.00 % 36 (31) 

conwert Taurus Invest GmbH Heilbronn 25 100.00 % (305) (134) 

conwert Cassiopeia Invest GmbH Heilbronn 25 100.00 % (174) (55) 

Defida Verwaltungs GmbH Heilbronn 0 100.00 % (23) (5) 

Defida 2016 GmbH & Co. KG Heilbronn 1,721 95.89 % 1,928 (71) 

GAG Grundstücksverwaltungs GmbH Heilbronn 0 94.90% (13,020) 3,035 

Cor 18. GmbH & Co KG Berlin 1,591 94.90 % 1,579 (11) 

2010 

Company 

Head- 


quarters Book value Stake 31.12.2010 2010 


G-Unternehmensbeteiligung GmbH Vienna 5,668 100.00 % 5,666 (75) 

Con value one Immobilien GmbH Vienna 14,273 98.42 % 5,769 (1,259) 

GGJ Beteligungs GmbH 

CONWERT SECURITISATION 

Vienna 0 100.00 % 826 569 

Holding GmbH 

Vienna 700 100.00 % (2,464) (278) 

TPI Tourism Properties Invest AG 

conwert Dienstleistung und Bauträger 

Vienna 47,521 92.00 % 48,997 (2,932) 

Holding GmbH 

Vienna 131,139 100.00 % 135,178 (32,891) 

conwert Treasury OG 

LLL-Luxury Living 

Vienna 583,537 100.00 % 583,537 33,795 

Liegenschaftsentwicklungs GmbH Vienna 18 99.00 % (5,997) (741) 

CWG Beteiligungs GmbH Vienna 92,790 100.00 % 104,589 11,821 

Berolinum Liegenschaftbesitz GmbH Vienna 10,394 94.90 % 14,593 (137) 

Kallco Immobilienverwaltung GmbH Vienna 3,818 99.03 % 1,425 (112) 

Cicero 1 Holding GmbH *) Vienna 72,047 100.00 % 72,156 20,122 

Cicero 2 Holding GmbH *) Vienna 4,688 100.00 % 4,678 (4) 

Cicero 3 Holding GmbH *) Vienna 16,542 100.00 % 16,529 (5) 

ECO Business Immobilien AG Vienna 250,706 95.76 % 394,922 3,264 

conwert Immobilien Invest GmbH 

conwert Berlin 2 Immobilien Invest 

Berlin 7,646 94.90 % 9,961 4,241 

GmbH 

conwert Immobilien Development 

Berlin 1,717 94.90 % 1,820 1,787 

GmbH 

conwert Grazer Damm Development 

Berlin 50 100.00 % (226) (141) 

GmbH 

Berlin 22,366 100.00 % 24,267 981 

conwert Viktoria Quartier Invest 

Berlin 

GmbH 

25 100.00 % (1,406) (92) 

conwert beta Invest GmbH Berlin 4,025 100.00 % 1,370 (286) 

conwert gamma Invest GmbH Berlin 38 100.00 % 1,080 49 

conwert delta Invest GmbH 

conwert Grundbesitz Leipzig 

Berlin 8,538 75.00 % 5,387 (354) 

Bestand GmbH 

conwert Grundbesitz 

Leipzig 45,662 100.00 % 40,784 1,325 

Leipzig Besitz GmbH 

Leipzig 299 100.00 % (78) 68 

conwert lambda Invest GmbH Berlin 22,128 75.00 % 18,516 (989) 

conwert epsilon Invest GmbH Berlin 7,025 100.00 % 5,115 293 

(261) 

162


conwert sigma Invest GmbH Berlin 1,787 100.00 % 336 (780) 

conwert omega Invest GmbH Berlin 3,025 100.00 % (18,952) (4,979) 

conwert Sachsen Invest GmbH 

conwert Deutschland Beteiligungs- 

Berlin 29,806 100.00 % 29,489 79 

holding GmbH 

Berlin 

25 

100.00 % 

conwert Centaurus Invest GmbH Berlin 5,936 100.00 % 5,856 (1,129) 

conwert Pegasus Invest GmbH Berlin 0 100.00 % (3,341) (1,034) 

conwert Deutschland Holding GmbH Berlin 7,025 100.00 % 6,909 (27) 

conwert Wohn-Fonds GmbH Heilbronn 30 100.00 % 23 4 

conwert Leo Invest GmbH Heilbronn 25 100.00 % 67 43 

conwert Taurus Invest GmbH Heilbronn 25 100.00 % (171) (194) 

conwert Cassiopeia Invest GmbH Heilbronn 25 100.00 % (118) (142) 

Defida Verwaltungs GmbH Heilbronn 25 100.00 % (18) 0 

Defida 2016 GmbH & Co. KG Heilbronn 1,987 95.89 % 1,999 (1) 

GAG Grundstücksverwaltungs GmbH Heilbronn 0 94.90% (16,178) (1,765) 

*) Different financial year; balance sheet date 30 June 

Investments in other companies 



Company 

Head- 


quarters Book value Stake 31.12.2011 2011 


Tizian Wohnen 1 GmbH Berlin 2,377 34.00 % 6,335 166 

Tizian Wohnen 2 GmbH Berlin 876 34.00 % 3,685 292 

conwert Goud Invest GmbH Berlin 4,413 15.52 % 28,431 (3) 

CD Deutsche Eigenheim AG Berlin 2,192 24.90 % 8,817* 58 * 

Alt & Kelber Immobilienverwaltung Heilbronn 

GmbH 

*) 2010 financial year 

977 22.00 % 37 679 

2010 

Company 

Head- 


quarters Book value Stake 31.12.2010 2010 


Tizian Wohnen 1 GmbH Berlin 2,481 34.00 % 6,170 16 

Tizian Wohnen 2 GmbH Berlin 997 34.00 % 3,492 715 

CD Deutsche Eigenheim AG Berlin 2,192 24.90 % 8,817 58 

Alt & Kelber Immobilienverwaltung Heilbronn 

GmbH 

977 22.00 % 1,014 963 

Securities (non-current) 

From December 2008 to October 2011, convertible bonds with a nominal value of 

TEUR 41,900 were repurchased at a cost of TEUR 28,732 and subsequently withdrawn. In 

November 2011 convertible bonds with a nominal value of TEUR 3,500 were repurchased. 

The market value amounted to TEUR 3,611 as of 31 December 2011. 

Treasury shares 

This position is used to record the company’s treasury shares. The extraordinary general 

meeting of conwert Immobilien Invest SE on 11 October 2010 revoked the authorisation of 

the annual general meeting on 26 May 2009 for a share buyback and, at the same time, 

authorised the Administrative Board to repurchase the company’s shares up to the legally 

defined maximum of 10% of share capital during a period of 30 months beginning on this 

same date. The range for the share buyback was defined as EUR 4.00 to EUR 14.00 per share. 

(778) 

(235) 

163


A total of 3,861,964 shares had been repurchased by 31 December 2011 at a cost of 

TEUR 41,618 (incl. fees). This represents 4.524% of share capital. The average price paid for 

the buyback was EUR 10.78/share. Treasury shares are carried at cost or the lower stock 

exchange price on the respective balance sheet date. In 2011 this procedure resulted in a 

write-up of TEUR 1,878 to shares that were written down in 2008 as well as a write-down of 

TEUR 7,809 to shares purchased during or after 2009. Treasury shares are valued at their 

respective cost (incl. fees). 

2.2. Receivables 

All receivables have a remaining term of less than one year. None of the receivables are 

secured by a bill of exchange. Receivables due from subsidiaries are comprised exclusively of 

other receivables. 

Other receivables include income of TEUR 20,237 (2010: TEUR 1,134) that is only due and 

payable after the balance sheet date. 

Deposits with financial institutions 

Deposits with financial institutions include TEUR 6,629 that are held in a blocked account 

and not available for the company’s discretionary use. 

2.3. Equity 

2.3.1. Issued capital 

The issued capital of the company totals EUR 853,592,730.00 and is divided into 85,359,273 

bearer shares. 

The company had authorised capital of EUR 400,121,590.00 as of 31 December 2011. 

The Annual General Meeting on 26 May 2009 approved the issue of participation capital as 

well as the issue of participation certificates with a maximum value of EUR 400 million up to 

26 May 2014. 

In order to service a convertible bond, the Annual General Meeting on 4 June 2007 approved 

a conditional capital increase of von EUR 128,038,900.00 through the issue of 12,803,890 

bearer shares. 

In order to service a convertible bond, the Annual General Meeting on 27 May 2008 approved 

a conditional capital increase of EUR 128,038,900.00 through the issue of 12,803,890 bearer 

shares. 

In order to service a convertible bond, the Annual General Meeting on 15 April 2010 

approved a conditional capital increase of EUR 128,038,900.00 through the issue of 

12,803,890 bearer shares. 

2.3.2. Appropriated share premium 

The appropriated share premium comprises the premium on earlier capital increases and the 

equity component of the convertible bonds. 

164


2.3.3. Reserves 

This position represents the reserve created in connection with the purchase of treasury 

shares, whereby TEUR 24,990 were added during 2011. 

2.4. Provisions 

The following table shows the classification of provisions: 

Type of provision Balance on 

Balance on 

1.1.2011 Use Addition 31.12.2011 

TEUR TEUR TEUR TEUR 

Tax provisions 13,634 0 3,223 16,857 

Impending losses 0 0 27,896 27,896 

Legal and consulting expenses 737 737 919 919 

Employee-related provision 502 474 844 872 

Miscellaneous 3,580 3,540 204 244 

Total 18,453 4,751 33,086 46,788 

The tax provisions include provisions for subsequent tax payments in connection with current 

tax losses transferred from foreign (German) group companies as part of the group taxation 

scheme. These amounts were accrued because the respective assessments or resolutions had 

not been issued by the end of 2011. 

The provision for impending losses relates to subsidiaries whose equity is negative after the 

inclusion of the undisclosed reserves contained in properties. The tax provisions were created 

for tax liabilities in connection with current tax losses transferred from foreign (German) 

group companies as part of the group taxation scheme. 

165


2.5. Liabilities 

2011: 

in TEUR 

As per 

balance sheet 

Remaining term 

up to one year 

Remaining 

term from one 

to five years 


over five years 

Bonds 292,484 0 164,961* 127,523 

Interest-bearing loans and 

borrowings 

85,383 18,883 15,947 50,553 

Trade accounts payable 2,110 1,733 377 0 

Amounts due to 

subsidiaries 

13,068 13,068 0 0 


Total 403,761 44,104 181,581 178,076 

2010: 

in TEUR 

As per 

balance sheet 


up to one year 

Remaining 

term from one 

to five years 


over five years 

Bonds 332,455 0 206,474 * 125,981 ** 

Interest-bearing loans and 

borrowings 

117,412 23,609 26,626 67,177 

Trade accounts payable 

Amounts due to 

2,050 1,674 376 0 

subsidiaries 

24,099 24,099 0 

0 


Total 481,437 54,517 233,762 193,158 

* The bond is due on 14 November 2014, but bondholders have the right to put their bonds 

prematurely as of 12 November 2012. 

** The bond is due on 1 February 2016, but bondholders have the right to put their bonds 

prematurely as of 1 February 2014 at the nominal amount plus accrued interest. 

Interest-bearing loans and borrowings of TEUR 76,764 (2010: TEUR 109,880) are secured by 

mortgages that are recorded in the company register. 

All properties serve as collateral for mortgages, with the exception of the following object: 

- 7000 Eisenstadt, Glorietteallee 3-Museumgasse 4 

Amounts due to subsidiaries are comprised solely of other liabilities. 

Miscellaneous liabilities include expenses of TEUR 3,290 (2010: TEUR 3,486) that will only 

become due and payable after the balance sheet date. 

166


2.6. Other financial obligations and financial instruments 

As of the balance sheet date, conwert Immobilien Invest SE held 28 derivatives with effective 

hedges. The company concluded interest rate swaps totalling TEUR 870,600 (2010: 

TEUR 942,750). These hedges are used to convert variable interest (3-, 6- and 12-month 

Euribor) loans and borrowings to fixed interest rates. 

The fair value of the hedges is determined on the basis of the market value as of the balance 

sheet date. Measurement as of the balance sheet date resulted in the following values: 

Reference value Term 

Market value 2011 

in TEUR 

With hedge relationship: 

Interest rate swap EUR 2.0 mill. 2005 - 2015 (169) 


Interest rate swap EUR 15.6 mill. 2009 - 2016 (1.956) 


Interest rate swap EUR 34.0 mill. 2011 - 2017 (2.748) 


Interest rate swap EUR100.0 mill. 2007 - 2017 (13.879) 








Interest rate collar EUR 37.0 mill. 2008 - 2018 (2.745) 




Interest rate cap (CAP) EUR 20.0 mill. 2010 - 2020 442 



Interest rate floor EUR150.0 mill. 2010 - 2020 (26.923) 







Measurement as of 31 December 2010 resulted in the following values: 

Reference value Term 

Market value 2010 

in TEUR 

With hedge relationship: 


Interest rate cap (CAP) EUR 20.0 mill. 2004 - 2011 0 

Interest rate swap EUR 25.0 mill. 2004 - 2011 (584) 

Interest rate swap EUR 25.0 mill. 2004 - 2011 (598) 


167



Interest rate swap EUR100.0 mill. 2007 - 2017 (10.012) 












Interest rate collar EUR 37.0 mill. 2008 - 2018 (1.342) 





Interest rate floor EUR150.0 mill. 2010 - 2020 (18.319) 


Interest rate cap (CAP) EUR 30.0 mill. 2010 - 2020 1.439 

Interest rate cap (CAP) EUR12.33 mill. 2010 - 2020 591 



Interest rate cap (CAP) EUR 40.0 mill. 2010 - 2020 1.740 


Since all hedges are considered to be effective. the related transactions are not recorded in 

accordance with Austrian commercial law. Therefore. the book value equals EUR 0.00. 

There are no hedges without an effective hedge relationship. The effects of the hedges are 

reported on the income statement under interest income or interest expense. whereby – as 

indicated below – TEUR 17.983 were charged out to subsidiaries. 

As of 17 December 2009 conwert Immobilien Invest SE concluded a framework derivative 

agreement with its direct and indirect subsidiaries retroactive to 1 January 2009. This 

agreement calls for the credit-related allocation of payments made for derivatives and 

payments received on derivatives. 

Payment inflows and outflows arising from derivatives amounted to a net total of 

TEUR 22.184 (2010: TEUR 23.941). Of this total. TEUR 17.983 (2010: TEUR 22.196) were 

charged out to direct and indirect domestic and foreign subsidiaries. 

2.7. Deferred income 

Deferred income represents one-time settlement payments from interest rate swaps. which are 

accrued over the relevant terms. 

168


2.8. Contingent receivables and liabilities 

As of the balance sheet date. conwert Immobilien Invest SE held contingent liabilities 

totalling EUR 516.260.433.77 (2010: TEUR 644.442) on behalf of subsidiaries. 

Notes to individual positions on the income statement 

3.1. Revenues 

Revenues amounted to TEUR 62.957 in 2011 (2010: TEUR 52.825). This amount comprises 

TEUR 7.589 (2010: TEUR 8.480) from property management. TEUR 49.613 (2010: 

TEUR 37.831) from the sale of properties. TEUR 5.755 (2010: TEUR 6.363) from 

management fees charged to subsidiaries and TEUR 0 (2010: TEUR 151) from other revenue 

sources. All revenues were realised in Austria. 

3.2. Cost of materials and services 

31.12.2011 31.12.2010 

TEUR TEUR 

Expenses related to properties 2,835 3,090 

Book values of properties sold 40,222 29,523 

Total 43,057 32,613 

The cost of materials and services for the management of properties include regular operating 

costs as well as maintenance and various property-related expenses. 

3.3. Personnel expenses 

The remuneration for the Executive Directors and former members of the Executive Board is 

paid by conwert Immobilien Invest SE. This remuneration totalled TEUR 2.609 in 2011 

(2010: TEUR 4.491). 

3.4. Depreciation and amortisation 

Depreciation of TEUR 2.528 (2010: TEUR 3.812) to property. plant and equipment includes 

TEUR 0 (2010: TEUR 950) of impairment charges. 

169


3.5. Other operating expenses 

Other operating expenses comprise the following items: 

31.12.2011 31.12.2010 

TEUR TEUR 

Capital market costs 487 933 

Management fees 6,743 7,464 

Legal and consulting expenses 3,332 4,613 

Advertising 1,217 2,330 

Sales commissions 2,594 1,352 

Bank charges 648 3,194 

Miscellaneous 3,400 2,630 

Total 18,421 22,516 

The management fees included under other operating expenses are contrasted by income of 

TEUR 5.755 (2010: TEUR 6.363) from the charge out of these costs to third parties. 

3.6. Income from investments in other companies 

This position comprises income of TEUR 122.258 (2010: TEUR 79.328) from shares in 

subsidiaries. 

3.7. Income from the disposal and write-up of financial assets 

The major components of this position are as follows: income of TEUR 10.000 from the 

subsequent revaluation of the 24.9% stake in ECO Business AG that was written down in 

earlier years. income of TEUR 1.878 from the revaluation of treasury shares that were written 

down in 2008 and income of TEUR 4.538 from the sale of subsidiaries. 

3.8. Expenses related to financial assets 

This position includes impairment charges of TEUR 72.780 (2010: TEUR 39.404) to shares 

in subsidiaries. The major components are an impairment charge of TEUR 22.691 to CWG 

Beteiligungs GmbH. an impairment charge of TEUR 14.431 to Cicero 1 Holding GmbH and 

an impairment charge of TEUR 13.332 to TPI Tourismus Properties Invest GmbH. Treasury 

shares were written down by a total of TEUR 7.809 to reflect the lower stock exchange price. 

This position also includes a TEUR 27.896 provision for impending losses. which is related to 

subsidiaries whose equity is negative after the inclusion of the undisclosed reserves contained 

in properties 

170


3.9. Income taxes 

Corporate income tax amounted to TEUR 105 in 2011 (2010: TEUR 1.270). Based on the tax 

transfer agreement. the member companies of the group received credits totalling 

TEUR 3.899 (2010: TEUR 4.734). Expenses of TEUR 3.223 (2010: TEUR 3.378) resulted 

from an addition to the provision for subsequent tax liabilities in connection with current tax 

losses transferred from foreign (German) group companies as part of the group taxation 

scheme. 

On 28 November 2005 conwert Immobilien Invest SE concluded a group and tax 

compensation agreement. This agreement covers conwert Immobilien Invest SE as the head 

of the group and. as members of the group. all domestic and foreign direct and indirect 

subsidiaries over which conwert Immobilien Invest SE held the majority of voting rights as of 

31 December 2004. The request for approval of a tax group in accordance with § 9 (8) of the 

Austrian Corporate Tax Act was approved by the taxation authorities on 22 December 2005. 

The group and tax compensation agreement was amended on 4 December 2006. 14 January 

2008. 3 June 2008. 27 July 2009. 17 March 2010 and 6 October 2011 to include additional 

direct and indirect subsidiaries of conwert Immobilien Invest SE. The group tax charge is 

calculated in a two-step process: the first step involves the calculation of a theoretical 

(positive or negative) tax charge for each group member on a "stand alone" basis; in the next 

step. the group tax benefits are distributed among the individual members. 

171


4. Other disclosures 

4.1.1. Consolidated financial statements 

conwert Immobilien Invest SE. as the parent company of the Group. prepares consolidated 

financial statements that include most of the subsidiaries. The consolidated financial 

statements are prepared in accordance with International Financial Reporting Standards 

(IFRS). as adopted by the European Union. The consolidated financial statements and the 

management report for the Group were filed with the company register court in Vienna. 

4.1.2. Auditor’s fees 

The auditor’s fees for the 2011 financial year comprised TEUR 294 for the audit of the annual 

financial statements and TEUR 30.5 for other services 

4.1.3. Executive Directors 

The following persons served as Executive Directors of the SE during the reporting year: 

Volker Riebel. born 15 October 1955 (from 1 January 2011 to 6 July 2011) 

Thomas Doll. born 27 December 1965 

Franz Jürgen Kelber. born 21 September 1957 

Thomas Rohr. born 30 March 1965 (up to 15 March 2011) 

The company had six employees in 2011 (2010: six employees). 

4.1.4. Non-Executive Directors 

The Non-Executive Directors received payments totalling TEUR 328 for their services in 

2011 (2010: TEUR 404). 

The remuneration scheme for the Administrative Board calls for fixed annual remuneration as 

follows: EUR 50.000 for the chairman; EUR 25.000 for each vice-chairman and EUR 15.000 

for each member. 

Additional remuneration for the members of committees of the Administrative Board: 

The Administrative Board has had only one committee since year-end 2010 – the Audit 

Committee. The chairman of the Audit Committee receives additional remuneration equal to 

50% of his fixed remuneration. The other members of this committee receive additional 

remuneration equal to 25% of their fixed remuneration. All Non-Executive Directors are also 

members of the Audit Committee. 

In addition. every Non-Executive Director receives an attendance fee of EUR 2.500 for each 

meeting. 

172


The members of the Administrative Board (Non-Executive Directors) are listed below: 

Johannes Meran. born 22 February 1972 - Chairman 

Franz Pruckner. born 20 May 1956 – Vice-Chairman 

Kerstin Gelbmann. born 30 May 1974 - Member (since 20 May 2011) 

Eveline Steinberger-Kern. born 27 January 1972 - Member (since 20 May 2011) 

Alexander Tavakoli. born 6 August 1969 - Member (since 20 May 2011) 

Friedrich Kadrnoska. born 28 June 1951 – Vice-Chairman (up to 18 June 2011) 

Harald Nograsek. born 5 October 1958 - Member (up to 18 June 2011) 

Vienna. 21 March 2012 

The Executive Directors 

of 


Thomas Doll m.p. Franz Jürgen Kelber m.p. 

173


Report on the Financial Statement 

AUDITOR’S REPORT 

We have audited the accompanying financial statements, including the accounting system, of conwert Immobilien 

Invest SE, Vienna (hereinafter referred to as “the company”), for the fiscal year dating from January 1, 2011 

to December 31, 2011. These financial statements comprise the balance sheet as of December 31, 2011, the 

income statement for the fiscal year ended December 31, 2011, and the notes. 

Management’s Responsibility for the Financial Statements and for the Accounting System 

The Company’s management is responsible for the accounting system and for the preparation and fair presentation 

of these financial statements in accordance with Austrian Generally Accepted Accounting Principles. This 

responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and 

fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; 

selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in 

the circumstances. 

Auditor’s Responsibility and Description of Type and Scope of the Statutory Audit 

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our 

audit in accordance with laws and regulations applicable in Austria and Austrian Standards on Auditing. Those 

standards require that we comply with professional guidelines and that we plan and perform the audit to obtain 

reasonable assurance whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial 

statements. The procedures selected depend on the auditor’s judgment, including the assessment of the 

risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk 

assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation 

of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not 

for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also 

includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates 

made by management, as well as evaluating the overall presentation of the financial statements. 

174


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit 

opinion. 

Opinion 

Our audit did not give rise to any objections. In our opinion, which is based on the results of our audit, the financial 

statements comply with legal requirements and give a true and fair view of the financial position of the Company 

as of December 31, 2011 and of its financial performance for the fiscal year from January 1, 2011 to December 

31, 2011 in accordance with Austrian Generally Accepted Accounting Principles. 

Comments on the Management Report 

Pursuant to statutory provisions, the management report is to be audited as to whether it is consistent with the 

financial statements and as to whether the other disclosures are not misleading with respect to the Company’s 

position. The auditor’s report also has to contain a statement as to whether the management report is consistent 

with the financial statements and whether the disclosures pursuant to Section 243a UGB are applicable pursuant 

§ 243a UGB. 

In our opinion, the management report is consistent with the financial statements. The disclosures pursuant to 

section §243a UGB (Austrian Commercial Code) are appropriate. 

Vienna, March 26, 2012 

Ernst & Young 

Wirtschaftsprüfungsgesellschaft m.b.H. 

Alexander Wlasto mp ppa Hans-Erich Sorli mp 

Certified Public Accountant Certified Public Accountant 

*) The report (in the German language, or translations into another language, including shortened or amended 

versions) may not be made public or used by third parties, when reference is made in part or in whole to the auditor’s 

report, without the express written consent of the auditors. 

175



176

IMPRINT 

Owner, editor and publisher 


Design, consulting, copywriting 

Dr. Ute Könighofer, Kommunikationsberatung / Finanzkommunikation 

Grafi k design, Illustration 

[PF: vienna 

Disclaimer 

This report contains forward-looking estimates and statements that were made on the basis of the 

information available at the present time. These forward-looking statements are usually described in 

terms such as “expect“, “estimate“, “plan“, “reckon“, “assume“, “should“, “supposed to”, “can“, etc. 

Forward-looking statements refl ect the point of view at the time they are made. We would like to 

point out that the actual circumstances and, consequently, the actual results realised at a later 

date may differ from the forecasts presented in this report for a variety of reasons. 

Missprints and errors reserved. 

State 

March 2012 

177


Albertgasse 35, 1080 Vienna 

Austria 

T + 43 1 521 45 – 0 

F + 43 1 521 45 – 111 

E cwi@conwert.at 

Shareholders‘ hotline 

+ 43 1 521 45 – 700 

www.conwert.at

annual financial statement 2011 - conwert Immobilien Invest SE

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