Annual Report of Euram Bank Vienna 2011/2012

eurambank

The Keys to Growth and Protection.


Our path is guided by new and ever more complex

rules and regulations; we are confronted with

challenging transactions and administrative procedures

on a daily basis. It is time to take stock.

Russian State Ballet, Moscow


Symbiosis of competence and trust.

Harmony between rider and horse – and a

perfect performance – are based on trust.

As an independent private bank we rely on

our customers’ trust in order to do what we

can do best: invest their assets according to

their individual needs, to protect and grow

their wealth. With no risky manoeuvres.

We focus on knowledge and experience.

Spanish Riding School, Vienna


Focusing the attention.

Universally educated scholars, like Goethe and

Humboldt, who had all the available knowledge

of their times, are a past phenomenon.

In today’s world experts and specialists are

needed. People and institutions who can concentrate

on one field with undivided attention.

Who have deep knowledge and exceptional

skills and perform their tasks to perfection.

Just like the dancers of the Russian State Ballet

– or like Australian Rugby players.

Russian State Ballet, Moscow


Building and maintaining networks.

One person alone can achieve great things.

But in cooperation with competent partners

we can do even better and build on the safety

net provided by a well functioning platform.

The trusting and mutually focused cooperation

with our international business partners,

partner banks and intermediaries worldwide

creates an extensive knowledge and performance

network, which our most demanding

clients rely on.

Fisherman, Bulgaria


Private in the true

sense of the word.

Euram Bank is completely privately owned. But

not only that: The owners take an active hand

in the bank’s daily business, thus raising the

game to higher levels of understanding and trust

between our entrepreneurial clients and us.

Tailor-made

solutions.

We meet our customers’

objectives with

absolute independence

and with professional

competence in

• Private Banking

• Asset Management

• Corporate Finance

• Card Payment

Services

Rugby player, Melbourne


2011/2012 Annual Report

European American Investment Bank AG


Foreword by the Chief Executive Officer

| 2

When the financial industry continues being

perceived as complex and opaque, simple

and transparent business approaches

win. Global securities markets consistently

reward conservative, wealth preserving,

investment strategies – a philosophy which

we at Euram Bank have successfully implemented

for our clients since inception.

In the past few years we have focused our

strategy on strengthening our core businesses

Private Banking, Asset Management

and Corporate Finance in our geographic

region of Central and Eastern

Europe. In addition, we are expanding our

youngest division Card Payment Services,

implementing our fully developed innovative

card based payment solutions.

In pursuit of our ambitious goals, we

completed the restructuring with the closure

of our Monaco and Dubai subsidiaries,

and the successful sale of our British

concierge service company, WhiteConcierge

Limited – transformed during our

time of ownership into the undisputed

quality leader and most profitable industry

player. These steps significantly increased

our capital base and strengthened

our proven business model, now completely

aligned with the needs of our entrepreneurial

clients.

As a niche player we achieve sustainable,

profitable growth through strong, active

partnerships and strategic alliances which

extend our geographical reach. This in-


cludes shared corporate finance mandates,

successful cooperation with other private

banks, and global alliances in the field of

card based payment systems, where Euram

Bank contributes its specialized competencies

and innovation skill to a global partnership.

We look forward to continuing our fruitful

cooperation with you, our clients and business

partners.

Viktor Popovic

Chief Executive Officer

November 2012


Corporate Bodies

| 4

Supervisory Board

Dr. Erik Max Michael Obermayer

– Chairman

Adolf Walter Höllmer

– Vice chairman

Dkfm. Senta Penner

Viktor Popovic

Managing Board

Viktor Popovic

Manfred Huber

Johannes Langer

Manfred Huber

Johannes Langer


Management Report

| 8

1. Business Development and

Economic Situation

Business Model

European American Investment Bank Aktiengesellschaft

(“Euram Bank") is an Austrian

bank specializing in Private Banking,

Asset Management, Corporate Finance and

Card Payment Services. Our customers are

mainly wealthy international private clients

and entrepreneurs, as well as established

institutional investors. Our highly

qualified employees come from 9 different

nations and reflect Euram Bank's openminded

corporate culture.

Euram Bank is 100% privately owned. The

majority is held by executives and members

of their families together with financial

investors, a proven and traditional

model, ensuring a high level of continuity

and commitment for the bank and its customers.

Business Development

In the second half of 2011, the economic

crisis dramatically demonstrated the structural

weaknesses of some peripheral countries

and the necessity to further develop

the architecture of the Euro zone. In the

past the lack of risk premiums for public

debt induced many countries to spend beyond

their means and created a growing

gap in the competitiveness of the national

economies in Europe thus adversely affecting

the confidence in their ability to repay

debts. The ensuing rapid increase in interest

rate spreads for government bonds of

overindebted Euro countries exacerbated

the pressure for rapid reforms. The crisis

in the financial sector could not be overcome

either, as receivables of some systemically

relevant banks towards countries

in the Euro zone affected their credit

standing.

Euram Bank had to give up its intention to

develop Euram Bank Asia Limited as a

center of competence for its corporate finance

activities and for private banking

business in the “Middle East". Euram Bank

would have had to acquire the 49% share

of the co-owner in Euram Bank Asia Limited,

Pan Asia Advisors Limited, with

whom it was impossible to reach agreement.

While Euram Bank Asia Limited had

been able to distribute very high dividends

relative to capital invested during its first

two fiscal years (fiscal year 2009/2010:

EUR 3.1 million, fiscal year 2010/2011:


EUR 2 million), fiscal year 2011/2012

closed with a loss of EUR 1.6 million.

Thanks to the experience and commitment

of its employees, Euram Bank was able to

cope with these challenges. Despite very

difficult market conditions, we not only

preserved, but even continuously increased

our clients' assets, achieving outstanding

results both in our in-house funds and our

managed portfolios. Card Payment Services

became very profitable after a successful

internal restructuring in 2010, and a

long prepared corporate finance transaction

was successfully closed in the fiscal

year 2011/2012.

The balance sheet total as of June 30, 2012

amounted to EUR 377 million, which

is a decrease of 19.75% on last year

(June 30, 2011: EUR 469.7 million). Receivables

from customers declined by

26.8% to EUR 244.5 million on last year

(June 30, 2011: EUR 334.7 million), liabilities

to customers were also down

19% to EUR 351.3 million (June 30, 2011:

EUR 433.7 million) on last year. These declines

are mainly caused by our decision

in the fall of 2011 to end a business model

realized in cooperation with Euram Bank

Asia Limited, a 51% subsidiary of Euram

Bank. That business model supported Indian

companies in the issuance of Global

Depositary Receipts on the Luxembourg

Stock Exchange. Due to the underlying

structure (100% collateralization of lendings

by deposits and securities), the ending

of that business materially affects the balance

sheet total.

Euram Bank's results proved satisfactory

in the fiscal year 2011/2012. The operating

income amounted to EUR 13.9 million

(June 30, 2011: EUR 15.1 million), being

8.3% lower compared to last year, mainly

due to a decline in net interest income to

EUR 3.5 million (June 30, 2011:

EUR 4.6 million), also as a result of ending

the above mentioned business model. Operating

expenses amounted to EUR 11 million

(June 30, 2011: EUR 10.5 million), the

operating result decreased to EUR 2.8 million

(June 30, 2011: EUR 4.7 million).

Value adjustments for receivables amounted

to EUR 440 thousand (June 30, 2011:

EUR 2.2 million) – one receivable from a

customer was written off, another was

provisioned individually.

Value adjustments for securities and for

investments and shares in affiliated com-


| 10

panies amounted to EUR 912 thousand

(June 30, 2011: EUR 389 thousand), the

value adjustment of our investment in

Euram Bank Asia Limited being the main

factor.

As a result, profit from ordinary activities

amounted to EUR 1.5 million (June 30, 2011:

EUR 2.1 million).

Financial and Non-financial Key

Performance Indicators

Euram Bank's capital resources continue to

be excellent, the revenue reserve was increased

by EUR 0.5 million in the fiscal

year 2011/2012. Eligible capital pursuant

to Section 23 of the Banking Act (BWG)

amounted to EUR 15.2 million (June 30, 2011:

EUR 14.6 million) and thus exceeded by far

the capital requirement of EUR 6.1 million

(June 30, 2011: EUR 5.6 million). The equity

ratio amounted to 30.6% (June 30, 2011:

34.7%) and thus by far exceeded the statutory

minimum level. Own funds consist

entirely of Tier 1 capital. The cost/income

ratio amounted to 79.7%, compared to

69.1% last year.

In the fiscal year 2011/2012 Euram Bank

generated a distributable profit of EUR

0.4 million. Once a relevant resolution has

been adopted at the shareholders' meeting

in November 2012, Euram Bank intends to

distribute a dividend of EUR 0.4 million,

i.e. 2.63% of the capital of EUR 15,228

million.

Material Events After the Balance

Sheet Date as of June 30, 2012

On July 30, 2012, Euram Bank made a request

with the Dubai Financial Services

Agency (DFSA) for voluntary surrender of

Euram Bank Asia Limited's license. On

September 5, 2012, a resolution was adopted

for the voluntary liquidation of Euram

Bank Asia Limited. The full impact is already

recognized in the profit and loss

statement as of June 30, 2012.

On September 27, 2012, Euram Bank sold

its 53.5% share in WhiteConcierge Limited

for an equivalent of EUR 5.8 million, the

book value being EUR 0.8 million. The

share purchase agreement contains conditions

precedent, closing is agreed to take

place until October 31, 2012. In 2008,

Euram Bank and a business partner had

collectively purchased the concierge service

from “Travelex", and developed it into

a leading provider of concierge services. In


| 12

subsequent years, WhiteConcierge Limited

gained a reputation as a highly valued expert

in this very specialized sector. Business

clients in 24 countries are supported

from its base in the United Kingdom. Expert

teams coming from 22 nations offer a

unique combination of local expertise and

cultural understanding.

2. Forecast Development and Risks

Outlook for 2012/2013

For the fiscal year 2012/2013 we expect

further growth and hence increase in income

from our Private Banking business.

The outstanding performance of our funds

should induce more substantial volume in

Asset Management. Promising Card Payment

Services projects are about to be concluded.

Together with our partners we are

currently developing further projects in

the field of card-supported payment transactions.

Material Risks and Uncertainties

On January 25, 2012, the Securities and

Exchange Board of India (SEBI) confirmed

an interim order of September 22, 2011

the order accuses Euram Bank of having

breached the rules of conduct of the Indian

Stock Exchange as FII licensee. Due to continuing

investigation in that matter it was

not yet possible to appeal the interim order.

On October 10, 2011, Euram Bank filed

a written statement with SEBI, and a hearing

was held before SEBI on November

18, 2011. Euram Bank continues to cooperate

with all authorities involved and

urges a fast clarification of the matter.

In February 2012, an Indian company filed

a complaint with the Vienna Commercial

Court to obtain a declaratory judgment

against Euram Bank. Euram Bank and the

Indian company disagree as to the authenticity

of a pledge agreement dated March

2010 between the Indian company and

Euram Bank and whether Euram Bank is

therefore entitled to use the pledged credit

balance on the Indian company's account

with Euram Bank to secure a loan which

Euram Bank granted to a borrower. In reliance

on that pledge agreement, Euram

Bank refuses to transfer the Indian company's

credit balance to other accounts.

Euram Bank has obtained an opinion from

a sworn and court-certified expert for forensic

graphological examination in order

to clarify whether the signature on the

pledge agreement entered into by the In-


dian company and Euram Bank is an authentic

signature of the Indian company's

authorized representative, or whether it

might be forged, as the Indian company

claimed. The expert concluded that the signature

on the pledge agreement between

the Indian company and Euram Bank is an

authentic signature of the person authorized

by the Indian company and not a forgery.

Based on the above expert opinion,

Euram Bank anticipates that the court will

decide in favor of Euram Bank.

3. Risk Reporting

Euram Bank applies the standard method

set out in Section 22a of the Banking Act

to calculate its credit risk. Euram Bank

grants loans in the context of existing customer

relationships and subject to full collateralization,

either through cash deposits

or through securities held with Euram

Bank, taking into account appropriately

conservative lending limits. Euram Bank

does not invest in derivative financial instruments.

Moreover, Euram Bank does not engage in

trading for its own account. Securities held

as current assets were exclusively held for

resale to customers and not with a view to

take advantage of short-term price and interest

fluctuations.

Liquidity risk is limited by largely matching

maturities. Customer deposits are

mainly invested according to maturities,

and demand deposits are invested up to a

maximum of one week with a selected group

of other banks. Interest rate risks are

controlled upon advice from the Asset-/

Liability Management Committee (ALCO),

which issues recommendations for the asset/

liability management. The results are evaluated

and discussed on a monthly basis.

The recoverability of collateral provided

for collateralized loans is reviewed automatically

on a daily basis.

Given Euram Bank's geographical focus,

operational risk is the most significant

risk. The money laundering risk is mitigated

by implementing an analytical anti-money

laundering-, compliance- and

risk solution. The AML solution allows us

to identify unusual, unexpected and suspicious

customer patterns and transactions,

and the Compliance Officer is automatically

warned in case of any significant

suspicious patterns. In addition to identifying

suspicious situations, this AML solution

supports the investigation, further


| 14

processing and documentation of identified

cases. Each step is completely documented

in compliance with audit guidelines

and can be reviewed and verified at

any time by means of reporting tools.

To limit its legal risks, Euram Bank closely

cooperates with a renowned law firm

and uses this firm's expertise in connection

with the launch of new products,

transactions, and lines of business.

In the process of operational risk management,

guidelines for the identification,

evaluation and monitoring of risks

are reviewed on an annual basis. Daily

risk management was incorporated into

business and administration sectors. This

business partnership model ensures close

monitoring and guides the staff to a high

awareness for operational risks.

We apply the base indicator method pursuant

to Section 22j of the Banking Act

(BWG) in conjunction with Section 182 of

the Solvency Ordinance to calculate our

operational risk.

In compliance with the pillar II/Basel II requirements,

the “ICAAP" measures were

adopted. Euram Bank issues a risk strategy

which is updated on an annual basis. As

provided in the risk strategy, the risk bearing

capacity analysis compares the available

risk coverage with potential risks.

That analysis is prepared on a quarterly

basis and is submitted to the managing

board and the supervisory board as part of

the risk report.

Vienna, dated October 29, 2012

The Managing Board

Viktor Popovic

Manfred Huber

Johannes Langer


Balance sheet as of June 30, 2012

| 16

ASSETS June 30, 2012 June 30, 2011

EUR EUR THOUSAND EUR

1. Cash in hand, balances

with central banks and post office banks 37,749,965.46 42,689

2. Claims against credit institutions 46,896,439.84 41,680

a) repayment on demand 23,197,627.16 38,830

b) other loans and advances 23,698,812.68 3,350

3. Loans and advances to customers 244,546,377.70 334,672

4. Stocks and other

non fixed income securities 9,908,538.80 13,954

5. Participations 33,523,187.14 30,592

6. Shares in affiliated companies 1,007,488.21 1,863

7. Intangible fixed assets 56,754.84 77

8. Tangible assets 195,542.87 254

hereof: land and buildings used by

the credit institution in the course

of its own business

9. Other assets (EUR 0.00) 2,555,938.40 3,477

10. Prepayments and accrued income 453,928.37 456

376,894,161.64 469,714

11. Foreign assets 292,763,096.93 386,240


LIABILITIES June 30, 2012 June 30, 2011

EUR

EUR THOUSAND EUR

1. Liabilities to credit institutions 3,072,841.07 5,112

a) repayable on demand 72,479.40 112

b) with agreed maturity dates

or period of notice 3,000,361.67 5,001

2. Liabilities to customers (non-bank) 351,301,110.27 433,671

a) Other liabilities

aa) repayable on demand 323,253,145.31 125,682

bb) with agreed maturity

or period of notice 28,047,964.96 307,989

3. Securitised liabilities 1,904,844.37 10,213

4. Other liabilities 2,320,983.21 2,078

5. Accruals and deferred income 140,225.39 13

6. Provisions 2,525,672.03 2,127

a) provisions for severance payments 253,787.10 186

b) provisions for taxation 275,000.00 275

c) other provisions 1,996,884.93 1,666

7. Subscribed capital 10,045,712.61 10,046

8. Capital reserves 1,886,813.16 1,887

a) tied-up 1,886,813.16 1,887

9. Profit reserves 2,634,904.17 2,099

a) other reserve 2,634,904.17 2,099

10. Liability reserve pursuant to

§ 23 para 6 Banking Act 660,500.00 661

11. Net Profit 400,555.35 1,808

376,894,161.64 469,714

1. Contingent liabilities 3,968,286.47 3,884

2. Fiduciary Deposits 2,580,639.49 1,071

3. Own funds to be taken into account pursuant to § 23 15,171,175.10 14,615

4. Required own funds pursuant to § 22 para 1 6,148,440.00 5,596

5. Liabilities abroad 346,776,951.41 430,545


Profit and loss account for 2011/2012

| 18

PROFIT AND LOSS ACCOUNT FOR 2011/2012 June 30, 2012 June 30, 2011

EUR

EUR THOUSAND EUR

1. Interest and interest-like earnings 5,435,415.80 8,987.6

hereof: fixed interest securities EUR 0.00

2. Interest and interest-like expenditures -1,979,995.69 -4,435.3

I. NET INTEREST EARNINGS 3,455,420.11 4,552.3

3. Earnings from securities and participations 94,348.06 1,089.8

a) Income from shares and

variable income securities 85,663.41 95.2

b) Income from participations 8,684.65 994.6

4. Earnings from commissions 17,331,216.32 14,790.5

5. Expenditures from commissions -9,874,374.05 -7,263.6

6. Earnings/expenditures from financial transactions -123,762.38 1.5

7. Other operating earnings 2,988,451.23 1,958.1

II. OPERATING EARNINGS 13,871,299.29 15,128.6

8. General administrative expenditures

a) Personnel expenditures -5,038,893.57 -5,067.4

aa) Wages and salaries -4,120,623.86 -4,002.5

bb) Payment of legal social levies

and compulsory contributions -651,694.89 -755.7

cc) Other social expenditures -52,875.29 -59.1

dd) Expenditures for old-age care

and assistance -109,109.18 -99.0

ee) Endowment of the severance

compensation provision -104,590.35 -151.1

b) Other administrative expenditures

(overhead) -5,612,263.01 -4,831.8

-10,651,156.58 -9,899.2


PROFIT AND LOSS ACCOUNT FOR 2011/2012 June 30, 2012 June 30, 2011

EUR THOUSAND EUR

9. Value adjustments of the assets listed

in asset items 7 and 8 -154,919.94 -159.6

10. Other operating expenditures -242,495.49 -396.7

III. OPERATING EXPENDITURES -11,048,572.01 -10,455.5

IV. OPERATING RESULT 2,822,727.28 4,673.1

11. Balance of value adjustments and earnings from the

dissolution of value adjustments of claims and allocations

to/from provisions for contingent liabilities and credit risks -440,199.48 -2,214.9

12. Balance of earnings and expenditures from value adjustments

of securities valued like financial investments as well as

of participations and shares held in affiliated companies -912,409.20 -389.3

V. RESULT OF ORDINARY BUSINESS OPERATION 1,470,118.60 2,068.9

13. Income and earnings tax -541,767.63 -324.1

VI. ANNUAL SURPLUS 928,350.97 1,744.8

14. Change of reserve -536,000.00 0.0

VII. ANNUAL PROFIT 392,350.97 1,744.8

15. Profit carryforward / loss carryforward 8,204.38 63.4

VIII. NET PROFIT 400,555.35 1,808.2


Notes

| 22

to the financial statements of European

American Investment Bank Aktiengesellschaft

(“Euram Bank") as of June 30, 2012.

The financial statements as of June 30, 2012

were prepared according to the provisions

of the Accounting Act in compliance with

the special provisions of the Banking Act.

1. GENERAL PRINCIPLES AND

INFORMATION ON ACCOUNTING

AND VALUATION

General Principles

The financial statements as of June 30, 2012

were prepared in compliance with generally

accepted accounting principles and the

general standard to present a fair view of

the company's assets and liabilities, financial

condition and results of operation.

The financial statements were prepared in

compliance with the principle of consistency

of presentation.

Assets and liabilities were valued in compliance

with the principle of individual

valuation and the going concern principle.

Compliance with the principle of conservatism

is ensured by recognizing only profits

realized on the balance sheet date and recognizing

all identifiable risks and impending

losses in the balance sheet.

According to Section 9 of the Corporate

Income Tax Act on the taxation of corporate

groups, as of June 30, 2012,

the group consists of Euram Holding

Aktien gesell schaft as group parent and

of Euram Beteiligungverwaltung GmbH

and Euram Bank as group companies.

Taxes are allocated using the stand-alone

method.

Foreign Currency Amounts

Pursuant to Section 58 (1) of the Banking

Act, amounts in foreign currency are

translated at the mean rates of exchange

on the balance sheet date.

Financial Instruments

in the Bank Book

As of June 30, 2012, Euram Bank recorded

shares in hedge funds as well as two collateralized

loan obligations (EUR 3.3 million

/ June 30, 2011: EUR 10.1 million) in

the bank book.

Shares in Hedge Funds EUR thousand

1794 Commodore

Overseas Fund EUR 720

CFS I EUR 942

CFS II EUR 0

Sharpe Futures Fund EUR 1,364

Collateralized

Loan Obligations EUR thousand

Whitebark Pine I Ltd EUR 261

Canal Point I Ltd EUR 38


Lending Risks

In the fiscal year 2011/2012, Euram Bank's

loans to customers amounted to EUR

244.5 million (June 30, 2011: EUR

334.7 million), EUR 215.0 million of which

(June 30, 2011: EUR 303.8 million) are

collateralized by deposits; the remaining

loans are mainly collateralized by mortgages,

deposits and/or securities.

Lendings

EUR million

Collateralized by

deposits EUR 215.0

Collateralized by

mortgages, deposits

and securities EUR 29.4

Non-collateralized EUR 0.1

Shares in affiliated companies

Euram Bank holds 100% in Euram Invest

Holdings I GmbH with its registered office

in Vienna, Austria, in Euram Invest

Holdings II GmbH with its registered

office in Vienna, Austria, and in Euram

Invest Holdings 3 GmbH with its registered

office in Munich, Germany, in

Euram Invest Holdings Vier GmbH with

its registered office in Vienna, Austria

(the companies’ line of business being

the management of investments), and

51% in Euram Bank Asia Limited with

its registered office in Dubai, United

Arab Emirates. The shares in Euram

Bank Asia Limited were written down to

EUR 569.4 thousand (June 30, 2011: EUR

1,383.1 thousand).

No dividends were distributed to Euram

Bank in the fiscal year 2011/2012. (In fiscal

year 2010/2011: USD 1,4 million from

Euram Bank Asia Limited).

Pursuant to Section 238(2) of the Companies

Act, the equity capital and the last fiscal

year’s results of affiliated companies

can be summarized as follows:

(in EUR thousand) Share Results last

Equity in Equity fiscal year

Euram Invest Holdings I GmbH 199.3 100% -1.5

Euram Invest Holdings II GmbH 106.6 100% -1.7

Euram Invest Holdings 3 GmbH 314.4 100% -3.8

Euram Invest Holdings Vier GmbH 52.9 100% 0.3

Euram Bank Asia Ltd 1,453.5 51% -1,640.9


| 24

Participations

This item includes the investment in the

deposit guarantee scheme of “Einlagensicherung

der Banken und Bankiers GmbH”,

Vienna, as well as shares (EUR 33.5 million

/ June 30, 2011: EUR 30.6 million) in

five (June 30, 2011: four) companies held

in trust. The investment in Österreichische

Clearingbank AG was terminated in the

fiscal year 2011/2012.

Property, Plant and Equipment

Intangible fixed assets as well as property,

plant and equipment are valued at cost,

less regular depreciation. Low-value items

are fully depreciated in the year of acquisition.

Regular depreciation is made on a

straight-line basis.

Regular depreciation is based on the following

useful lives:

Company cars

8 years

Office furniture

5 years

Leasehold improvements 5 years

Office equipment

5 years

Software

5 years

Hardware

5 years

Accruals for Severance Payments

Accruals for severance payments are calculated

according to principles of financial

mathematics by applying an interest rate

of 4% on the basis of an arithmetical pension

age of 60 years for women and 65

years for men. A fluctuation discount is

not applied.

Contingent Liabilities

Contingent liabilities include financing

guarantees collaterized by securities or by

cash (EUR 0.3 million / June 30, 2011:

EUR 0.3 million), an unsecured financing

guarantee (EUR 0.6 million / June 30, 2011:

EUR 1.7 million), and guarantees to credit

card companies for the credit card limits

granted to Euram Bank clients (EUR 3.0 million

/ June 30, 2011: EUR 1.9 million).

Credit Risk

This item contains undrawn credit facilities

(EUR 2.6 million / June 30, 2011: EUR

1.1 million).

Fiduciary Receivables

Fiduciary receivables are included in the

positions “loans and advances to customers”

(EUR 5.6 million / June 30, 2011:

EUR 10.6 million), “shares and other variable-yield

securities" (EUR 1.2 million /

June 30, 2011: EUR 9.4 million) and

“participating interest" (EUR 33.5 million /

June 30, 2011: EUR 30.6 million).


Fiduciary Liabilities

Fiduciary liabilities are included in the

positions “liabilities to customers” (EUR

39.1 million / June 30, 2011: EUR 41.2 million)

and in “securitised liabilities" (EUR

1.2 million / June 30, 2011: EUR 9.3 million).

2. NOTES TO THE BALANCE SHEET

A. Presentation of Maturities

Receivables (not repayable on demand)

from banks and customers as well as payables

(not repayable on demand) to banks

and customers are summarized according

to remaining maturities:

Receivables from banks EUR thousand

Up to 3 months EUR 23,698

More than 3 months

to 1 year EUR 0

More than 1 year

to 5 years EUR 0

More than 5 years EUR 0

Receivables from customers

Up to 3 months EUR 37,528

More than 3 months

to 1 year EUR 172,087

More than 1 year

to 5 years EUR 24,175

More than 5 years EUR 9,128

Payables to banks

Up to 3 months EUR 3,000

More than 3 months

to 1 year EUR 0

More than 1 year

to 5 years EUR 0

More than 5 years EUR 0

Payables to customers

Up to 3 months EUR 1,747

More than 3 months

to 1 year EUR 13,756

More than 1 year

to 5 years EUR 12,545

More than 5 years EUR 0

B. Securities

In the fiscal year 2011/2012, Euram Bank

did not hold any fixed-interest securities.

C. Shares and Other

Non-fixed-interest Securities

This item includes investment fund shares

held as fixed assets (EUR 1.8 million /

June 30, 2011: EUR 1.8 million). Current

assets include hedge fund shares (EUR

2.3 million / June 30, 2011: EUR 9.0 million),

two collateralized loan obligations

(EUR 0.3 million / June 30, 2011: EUR

0.3 million), and hedge fund shares in the

“1794 Commodore Overseas Fund" (EUR

0.7 million / June 30, 2011: EUR 0.9 mil-


| 26

lion). This item also includes investment

fund shares (EUR 4.4 million / June 30,

2011: EUR 1.8 million), a self-issued partial

debenture of EUR 250 thousand (June 30,

2011: EUR 194 thousand) and a self-issued

certificate in the amount of EUR 53 thousand

(June 30, 2011: EUR 36 thousand).

Furthermore, shares (EUR 10.0 / June 30,

2011: EUR 0.0) are held in “Petrocapital

Resources PLC".

Fixed Assets

EUR thousand

Europportunity Bond EUR 1,845

Current Assets

CFS I EUR 942

CFS II EUR 0

Sharpe Futures Fund EUR 1,364

Whitebark Pine I Ltd EUR 261

Canal Point I Ltd EUR 38

1794 Commodore

Overseas Fund EUR 720

Europportunity Bond EUR 701

USD Convergence Bond EUR 0.7

Advantage Stock EUR 3,732

Euram CLO Note I EUR 250

Euram Commodore

Index Certificate

Euro Protected 2 EUR 53

Petrocapital

Resources PLC EUR 0.01

None of the items of fixed and current

assets are quoted on the stock exchange.

The listing of “Petrocapital Recources PLC"

was suspended in 2010.

In the fiscal year 2011/2012, Euram Bank

did not hold a securities trading book.

In the fiscal year 2011/2012, Euram Bank

held one share (“Petrocapital Resources

PLC").

D. Fixed Assets

The fixed-assets movement schedule is

presented as a separate schedule of the

notes.

E. Other Assets

Other assets include corporate income tax,

VAT and capital gains tax receivables from

prepayments to the Tax Office for Corporations

(EUR 241 thousand / June 30, 2011:

EUR 61 thousand), a pending repayment

(EUR 0.5 million / June 30, 2011: EUR

1.0 million), fees charged for the management

of investment funds (EUR 0.5 million

/ June 30, 2011: EUR 0.5 million), outstanding

receivables (EUR 185 thousand /

June 30, 2011: EUR 1.0 million), a real estate

property which is not intended to be

held on a long-term basis (EUR 250 thou-


sand / June 30, 2011: EUR 250 thousand),

as well as an investment (WhiteConcierge

Ltd) which is not intended to be held on a

long-term basis either (EUR 0.8 million /

June 30, 2011: EUR 0.8 million).

F. Prepayments and accrued income

This item includes current salary payments

(EUR 130.9 thousand / June 30, 2011:

EUR 137.2 thousand), prepaid insurance

premiums, information and maintenance

expenses (EUR 242.5 thousand / June 30,

2011: EUR 164.1 thousand), prepaid rent

(EUR 11.7 thousand / June 30, 2011: EUR

7.6 thousand), prepayments for the data

processing center (EUR 62.5 thousand /

June 30, 2011: EUR 145.8 thousand), and

other prepayments (EUR 6.3 thousand /

June 30, 2011: EUR 1.6 thousand).

G. Securitised Liabilities

This item contains self-issued bonds and a

self-issued certificate.

EUR thousand

Euram CLO Note I EUR 268

CFS Alternative

Investment Note I EUR 942

CFS Alternative

Investment Note II EUR 0

Euram Commodore

Index Certificate

Euro Protected 2 EUR 694

H. Other Liabilities

Besides invoices already received but not

yet paid in respect of the fiscal year

2011/2012 (EUR 0.4 million / June 30, 2011:

EUR 1.3 million) and liabilities to a data

collection company – amount of profit

share from ATM business – (EUR 1.4 million

/ June 30, 2011: EUR 0.8 million), this

item contains liabilities to an affiliated

company (EUR 0.5 million / June 30, 2011:

EUR 0.0 million) from tax allocations.

I. Accruals and Deferred Income

This item mainly includes fees

(EUR 140.2 thousand / June 30, 2011:

EUR 13.1 thousand), already received but

allocated to the following fiscal year.

J. Shareholders' Equity

1.) The share capital in the amount of EUR

10,045.7 thousand is divided into 270,000

share units, each representing the same interest

in the share capital.

2.) The shareholders' equity consists of the

following:

EUR thousand

Subscribed capital EUR 10,045.7

(Appropriated) reserve EUR 1,886.8

Retained earnings EUR 2,634.9

Liability reserve pursuant

to Section 23 (6)

Banking Act (BWG) EUR 660.5


| 28

3.) An amount of EUR 536 thousand

(June 30, 2011: EUR 0 thousand) was allocated

to revenue reserves in the fiscal

year 2011/2012.

4.) The net profit for the fiscal year

2011/2012 amounts to EUR 400.6 thousand

(June 30, 2011: EUR 1,808.2 thousand).

K. Required own funds

Euram Bank uses the following methods to

calculate its required own funds:

Credit risk: Standard method

Operational risk: Basis indicator method

The required own funds for the credit risk

amount to EUR 3,967 thousand

(June 30, 2011: EUR 3,369 thousand).

Pursuant to Section 22a (4) of the Banking

Act (BWG), 8% of the weighted receivables

for each class of receivable amount to:

EUR thousand

Receivables from central

states or central banks EUR 0

Receivables from

regional administrative

bodies EUR 0

Receivables from

institutions EUR 751

Receivables from

companies EUR 2,080

Retail receivables EUR 193

Receivables collateralized

by real estate properties EUR 0

Receivables in the form of

investment fund shares EUR 377

Other items EUR 566

The required own funds for the foreign currency

risk amount to EUR 0 (June 30, 2011:

EUR 0).

The required own funds for the operational

risk amount to EUR 2,181 thousand

(June 30, 2011: EUR 2,227 thousand).


L. Additional Disclosures

1.) Total amount of assets and liabilities in

foreign currency:

EUR million

Assets in foreign

currency EUR 273.0

Liabilities in foreign

currency EUR 271.5

2.) In the fiscal year 2011/2012, Euram

Bank was restraint in the disposal of an

asset (EUR 3.6 million / June 30, 2011:

EUR 3.6 million).

3.) Receivables from affiliated companies

amount to EUR 6.5 million (June 30, 2011:

EUR 0.1 million).

4.) Liabilities to affiliated companies

amount to EUR 0.5 million (June 30, 2011:

EUR 0.5 million)

5.) Other accruals (EUR 2.0 million /

June 30, 2011: EUR 1.7 million) include

accruals for bonuses, unconsumed annual

leave, legal, auditing and advisory fees, as

well as other expenses.

6.) Obligations from the use of fixed assets

not recognized in the balance sheet amount

to EUR 389.6 thousand in the next year

(June 30, 2011: EUR 396.7 thousand),

EUR 2.0 million in the next five years and

are mainly related to rental payments for

the use of office space.

7.) In the fiscal year 2011/2012, Euram

Bank redeemed a self-issued note (“CFS

Alternative Investment Note II") of a total

nominal value of EUR 6.6 million, because

the investor had exercised his termination

right.

8.) The total volume of forward exchange

transactions not yet executed on the

balance sheet date can be summarized as

follows:

June 30, June 30,

EUR million 2012 2011

Contracts

to buy EUR 0.4 EUR 0.0

Contracts

to sell EUR 0.4 EUR 0.0


| 30

3. NOTES TO THE INCOME

STATEMENT

With reference to Section 242 (1) of the

Companies Act, income will not be itemized

by geographical markets pursuant to

Section 64 (1) no. 9 of the Banking Act.

With reference to Section 237 of the Companies

Act, other operating income and

other operating expenses pursuant to Section

64 (1) no 12 of the Banking Act are

summarized as follows:

– Other operating income mainly consists

of costs recharged to customers

(EUR 1.0 million / June 30, 2011:

EUR 638 thousand), income from a corporate

finance transaction (EUR 1.6 million

/ June 30, 2011: EUR 1.0 million),

the release of accruals concerning the

fiscal year 2010/2011 (EUR 0.2 million /

June 30, 2011: EUR 0.1 million), and a

VAT credit (EUR 0.2 million /

June 30, 2011: EUR 0.1 million).

– In the fiscal year 2011/2012 Euram Bank

recognized other operating expenses

(EUR 242 thousand / June 30, 2011:

EUR 397 thousand), being expenses for

two external advisors.

Expenditures from value adjustments for

receivables amount to EUR 440 thousand

(June 30, 2011: EUR 2.2 million) – one receivable

from a customer was fully depreciated

(EUR 103 thousand), a second receivable

from a customer was written

down (EUR 337 thousand).

Expenditures from value adjustments in

respect of securities as well as of participations

and shares held in affiliated companies

amount to EUR 0.9 million

(June 30, 2011: EUR 0.4 million) and are

mainly related to the value adjustment for

Euram Bank Asia Limited (EUR 813.6 thousand)

and a value adjustment for Euram

Invest Holdings II GmbH (EUR 41.8 thousand).

“Taxes from income and earnings”

(EUR 541.8 thousand / June 30, 2011:

EUR 0.3 million) recognized in the profit

and loss accounts, taking into account tax

allocations, adversely affect the “Profit or

loss on ordinary activities” (35.7% /

June 30, 2011: 15.7%).

An amount of EUR 536 thousand was allocated

to revenue reserves in the fiscal

year 2011/2012.


| 32

4. MISCELLANEOUS

1.) The Bank employed on average 35.7

(June 30, 2011: 37) employees in the fiscal

year 2011/2012.

2.) In the fiscal year 2011/2012, accruals

for severance payments and pensions

amount to EUR 156 thousands

(June 30, 2011: EUR 116 thousand) for executives

and EUR 98 thousand

(June 30, 2011: EUR 70 thousand) for other

employees. In addition, contributions

(EUR 109 thousand / June 30, 2011:

EUR 99 thousand) were paid to the company

pension fund.

3.) The total compensation of 3 members

of the managing board (June 30, 2011: 5

members) amount to EUR 1.3 million

(June 30, 2011: EUR 1.6 million) for their

activities in the fiscal year 2011/2012; the

members of the supervisory board received

a compensations of EUR 127.4 thousand in

the fiscal year 2011/2012 (June 30, 2011:

EUR 69.3 thousand).

4.) In the fiscal year 2011/2012, Euram

Bank granted two loans (EUR 150 thousand

/ June 30, 2011: EUR 177 thousand)

to executives.

5.) In the fiscal year 2011/2012 the managing

board of the company was composed

of the following members:

Viktor Popovic

Manfred Huber

Johannes Langer

6.) In the fiscal year 2011/2012 the elected

supervisory board was composed of the

following members:

Erik Max Michael Obermayer

– Chairman

Adolf Walter Höllmer

– Vice-chairman

Dkfm. Senta Penner

7.) Euram Bank is included in consolidated

financial statements. The company, which

prepares the consolidated financial statements

is as follows:

Euram Holding Aktiengesellschaft

Wallnerstrasse 4

1010 Wien


8.) The “EURAM GROUP”:

100%

Euram Beteiligungverwaltung GmbH

Euram Holding AG

37%

63%

European American Investment Bank AG

Euram Invest Holdings I GmbH (100%)

Euram Invest Holdings II GmbH (100%)

Euram Invest Holdings 3 GmbH (100%)

Euram Invest Holdings Vier GmbH (100%)

Euram Bank Asia Ltd. (51%)

5. ADDITIONAL DISCLOSURES

In compliance with the company's disclosure requirements acc. to section 26 of the

Banking Act (BWG), reference is made that the publication is available on the website

of Euram Bank (www.eurambank.com) at “Euram Bank/Publications and Disclosures”.

Vienna, dated October 29, 2012

The Managing Board

Viktor Popovic

Manfred Huber

Johannes Langer


Audit opinion

| 36

Report on the Financial Statements

We have audited the accompanying financial

statements, including the accounting

system, of European American Investment

Bank Aktiengesellschaft, Vienna, for the

fiscal year from July 1, 2011 to

June 30, 2012. These financial statements

comprise the balance sheet as of

June 30, 2012, the income statement for

the fiscal year ended June 30, 2012, 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 appropriate-

ness of accounting policies used and the

reasonableness of accounting estimates

made by management, as well as evaluating

the overall presentation of the 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.

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 June 30, 2012

and of its financial performance for the

fiscal year from July 1, 2011 to

June 30, 2012 in accordance with Austrian

Generally Accepted Accounting Principles.


| 38

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.

In our opinion, the management report is

consistent with the financial statements.

Vienna, October 29, 2012

Ernst & Young

Wirtschaftsprüfungsgesellschaft m.b.H.

Dr. Robert Wauschek mp

Certified Public Accountant

Mag. Ernst Schönhuber mp

Certified Public Accountant


Euram Bank AG

Palais Esterházy

Wallnerstrasse 4

1010 Vienna, Austria

Tel. +43 1 512 38 80 0

Fax +43 1 512 38 80 888

office@eurambank.com

www.eurambank.com

This is a translation from German. In case of any

discrepancies between the English and the German

version the German text shall prevail.

Concept, design and production

die3 Agentur für Werbung und Kommunikation GmbH

Photographs

Michael Stelzhammer, Shutterstock

Print

Vorarlberger Verlagsanstalt


Euram Bank AG

Palais Esterházy

Wallnerstrasse 4

1010 Vienna

Tel. +43 1 512 38 80 0

Fax +43 1 512 38 80 888

office@eurambank.com

www.eurambank.com

Euram Bank at the

Palais Esterházy, Vienna

More magazines by this user
Similar magazines