Interim Report as of September 30, 2007 C-QUADRAT Investment AG

Transcription

1 Interim Report as of September 30, 2007 C-QUADRAT Investment AG 3rd Quarter 2007

2 contents Contents Editorial 3 Company Structure 4 C-QUADRAT Share 5 Key Ratios 6 Condensed Interim Consolidated Financial Statements 7 Consolidated Income Statement 8 Consolidated Balance Sheet 9 Consolidated Cash Flow Statement 10 Consolidated Statement of Changes in Equity 11 Notes to the Condensed Interim Consolidated Financial Statements 13 Contact 26 Financial Calender 26 Contact Information 26 2 Contents

3 editorial left to right: Alexander Schütz Thomas Rieß Peter Reisenhofer Andreas Wimmer Ladies and Gentlemen! Dear Shareholders! We are pleased to present the rd quarter report of C-QUADRAT Investment AG. In the period under review, our company once again reached major milestones and achieved further profit growth. As at 30 September 2007, Earnings before Taxes (EBT) amounted to EUR 5.1 million, i.e. a 36.8 percent increase over the corresponding period of the previous year (2006: EUR 3.7 million). Net profit after minorities for the first three quarters of 2007 totaled EUR 4.0 million, i.e. a 36 percent increase over the corresponding period of the previous year. Among the milestones reached in the reporting period was the inclusion of C-QUADRAT funds into the sales and marketing activities of HORBACH, a company of the AWD Group, thus expanding the sales and marketing network for C-QUADRAT products in Germany to approximately 20,000 advisors. In September 2007, C-QUADRAT continued its internationalization drive with the appointment of 2 Country Heads for Poland and Czechia. With a sales and marketing network of about 35,000 advisors, C-QUADRAT now reaches a total of 154 million consumers in Austria, Germany, Czechia, Slovakia, Poland and Hungary. Furthermore, in July alone, a cash inflow of EUR 65 million was recorded in the Alternative Investments asset class. The assets, which stem from international investors, were acquired by the C- QUADRAT subsidiary, ABSOLUTE PLUS Group. The ABSOLUTE PLUS Group is a company that specializes in the sales and marketing of alternative investments and hedge funds, and acts on behalf of institutional clients, such as private banks, family offices or large asset managers. The 3rd quarter 2007 also witnessed the merger of the two subsidiaries, Epicon Investment AG and Fonds & Co Fondsan teilsvermittlung AG. In this manner, two previously separately run Retail Banking units were combined and the streamlining of our current corporate structure, announ ced in the 2nd quarter of 2007, was put into practice. The company will continue to be managed under the name Fonds & Co Fonds an teilsvermittlung AG. For the 4th quarter of 2007, C-QUADRAT will focus its efforts on achieving strong yearend results in all of our markets. We will continue to expand our sales and marketing activities, concentrating particularly on Germany, C-QUADRAT s largest market by far. The announcement of the introduction of the so-called flat-rate withholding tax in Germany should trigger a strong demand for C-QUADRAT products, since funds of funds are the more suitable instrument for tax optimization as compared to single funds. Gerd Alexander Schütz Thomas Rieß Peter Reisenhofer Andreas Wimmer Member of the Member of the Member of the Member of the Executive Board Executive Board Executive Board Executive Board 3 Editorial

4 company structure C-QUADRAT Investment AG 100 % C-QUADRAT Kapitalanlage AG 100 % C-QUADRAT Deutschland AG (Germany) 98,39 % Fonds & Co Fondsanteilsvermittlung AG 100 % C-QUADRAT Fonds-Analyse und Marketing AG (Switzerland) 50,003 % Absolute Plus Aktiengesellschaft (Germany) 45 % ARTS Asset Management GmbH 100 % 50 % 50,08 % 25,1 % Epicon Financial Services GmbH Active Management & Advisory AG (Switzerland) Absolute Plus Zürich AG (Switzerland) Ariconsult Holding AG 50,002 % 50 % Absolute Portfolio Management Ltd. (Cayman Islands) Privatinvest Bank AG (Vienna) 50 % Absolute Plus.Com Ltd. (Cayman Islands) fully consolidated at-equity consolidated atypical silent partnership As of 30 September Company Structure

5 c-quadrat share / outlook C-QUADRAT Share (figures in Euro) ISIN AT WKN A0HG3U Ticker-Symbol C8I Transparency Level Prime Standard Market Segment Official Market of FSE Last (30. September 2007) Market capitalisation (30. September 2007) 201,492, Authorised capital 4,363, Class of shares shares with nominal value The C-QUADRAT Investment AG share has shown a consistently strong share price performance. Since its initial public offering at the end of November 2006 up until 30 September 2007, the share price increased by a total of 15.5 percent. C-QUADRAT Share November 2006 September November 2006 December 2006 Januar 2007 February 2007 March 2007 April 2007 May 2007 June 2007 July 2007 August 2007 September 2007 Outlook C-QUADRAT Investment AG enjoyed a highly profitable first three quarters of 2007, with Earnings Before Taxes (EBT) up 36.8 percent and net profit after minorities for the period increasing 36.5 percent over the corresponding period of the previous year. Due to the market corrections since August 2007, the Executive Board of C-QUADRAT Investment AG expects the Company to continue its positive development in the 4th quarter, despite the increasingly difficult market environment. Negotiations with new and existing sales and marketing partners are progressing smoothly and indicate that further volume inflows, and thus increasing sales revenues, are likely to contribute to this favorable development in the 4th quarter of The creation of new funds with innovative management strategies, and the introduction thereof to the Austrian and German markets, are additional positive signals for the further course of the 2007 financial year. Moreover, other capital-guaranteed products will be placed on the market, providing additional stimulus to earnings. 5 C-QUADRAT Share

6 key ratios Key Ratios C-QUADRAT Investment AG TEUR TEUR TEUR TEUR TEUR Fee Generating Assets 5,125,172 3,395,950 4,345,660 3,024,743 1,856,739 Gross Operating Income 37,211 28,404 40,862 30,800 17,714 Net Operating Income 17,081 12,182 17,179 13,045 7,715 Operating Profit (EBIT) 3,326 2,789 4,229 3,271 2,188 Operating Profit before Depreciation (EBITDA) 5,262 3,602 5,332 4,008 2,470 Net Profit after Minorities 3,995 2,926 4,720 2,977 1,508 Earnings per Share (in EUR) Weighted Average Number of Ordinary Shares 4,363,200 3,636,000 3,636,000 1,090,800 1,090,800 Margins: Gross 45.9 % 42.9 % 42.0 % 42.4 % 43.6 % EBIT 8.9 % 9.8 % 10.3 % 10.6 % 12.4 % EBITDA 14.1 % 12.7 % 13.0 % 13.0 % 13.9 % Net Profit after Minorities 10.7 % 10.3 % 11.6 % 9.7 % 8.5 % Growth Rates: Fee Generating Assets 50.9 % % 62.9 % - Gross Operating Income 31.0 % % 73.9 % - Net Operating Income 40.2 % % 69.1 % - Operating Profit (EBIT) 19.2 % % 49.5 % - Operating Profit before Depreciation (EBITDA) 46.1 % % 62.3 % - Net Profit after Minorities 36.5 % % 97.4 % - 6 Key Ratios

7 condensed interim consolidated financial statements

8 CONSOLIDATED INCOME STATEMENT from 1 January 2007 to 30 September 2007 CONSOLIDATED INCOME STATEMENT Q Q.2006 Notes TEUR TEUR TEUR TEUR Fee and commission income 36,114 27,257 10,722 6,876 Other operating income 1,097 1, Operating income 37,211 28,404 11,057 7,372 Fee and commission expenses -20,130-16,222-5,852-4,159 Personnel expenses -5,744-3,943-1,955-1,392 Other administrative expenses -5,270-4,085-1,968-1,738 Depreciation 6, V -1, Other operating expenses Operating profit 3,326 2, Income from associates 1 1, Finance revenue 562 1, Finance expenses Profit before tax 5,057 3, Tax Net Profit 4,271 2, Minorities Net Profit after minorities 3,995 2, Earnings per share 4 EUR EUR EUR EUR basic, for the profit for the year attributable to ordinary equity holders of the parent diluted, for the profit for the year attributable to ordinary equity holders of the parent Consolidated Income Statement

9 CONSOLIDATED BALANCE SHEET as of 30 September 2007 ASSETS Notes TEUR TEUR Non-current assets Intangible Assets 6 23,041 22,339 Property, plant and equipment 6 8,002 1,037 Investments in associates 6,722 8,136 Financial investments 7 2, Deferred tax asset ,490 32,678 Current assets Receivables from customers 6,374 8,463 Other assets 4,916 4,038 Financial investments 7 3,993 5,614 Cash and cash equivalents 7,322 6,500 22,605 24,615 Non-current assets, held for sale ,910 25,477 Total assets 63,400 58,155 EQUITY and LIABILITIES Notes TEUR TEUR Issued capital 4,363 4,363 Add paid-in capital 26,554 26,554 Retained earnings 4,368 3,140 Other reserves Equity attributable to shareholders of the parents 35,261 34,021 Minority interests 6,487 6,770 Total equity 41,748 40,791 Non-current liabilities Long-term financial liabilities 9 7,170 0 Non-current provisions Other non-current liabilities Deferred tax liabilities 3,214 3,060 10,524 3,338 Current liabilities Short-term financial liabilities 91 1 Payables to customers 7,232 10,013 Other current liabilities 3,130 2,688 Other provisions Income tax payable ,123 13,950 Non-current liabilities, held for sale ,129 14,026 Total liabilities 21,652 17,365 Total equity and liabilities 63,400 58,155 9 Consolidated Balance Sheet

10 CONSOLIDATED CASH FLOW STATEMENT from 1 January 2007 to 30 September 2007 CONSOLIDATED CASH FLOW STATEMENT Notes TEUR TEUR Net Profit 4,271 2,865 Tax Financial results Income from associates -1, Depreciation of intangible assets, property, plant and equipment 1, Increase/decrease in long term provisions Income/loss from the disposal of fixed and financial assets -9 7 Increase/decrease in receivables and other assets 1,269 1,041 Increase/decrease in other provisions Increase/decrease in trade payables -2,527-1,662 Income tax paid ,238 Cash flow from operating activities VIII 2,551 1,704 Cash flow from investing activities VIII -5,142 1,573 Cash flow from financing activities VIII 3,413-4,397 Net increase in cash and cash equivalents VIII 822-1,120 Cash and cash equivalents at beginning of period 6,500 5,742 Cash and cash equivalents at end of period 7,322 4, Consolidated Cash Flow Statement

11 Consolidated Statement of Changes in Equity as of 30 September 2007 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY TEUR Equity attributable to equity holder of the parent Issued capital Add paid-in capital Retained earnings Other reserves Shareholders equity Minority interest Total equity , , , ,990 Net profit for available-for-sale financial assets Currency-conversion Total income and expense for the period recognised directly in equity Profit 2,926 2, ,865 Total income and expense for the period 2, , ,863 Decrease in minority interest Dividends -3,300-3,300-3, , , , , ,363 26,554 3, ,021 6,770 40,791 Net profit for available-for-sale financial assets Currency-conversion Total income and expense for the period recognised directly in equity Profit 3,995 3, ,271 Total income and expense for the period 3, , ,291 Nominal increase Decrease in minority interest Dividends -2,880-2, , ,363 26,554 4, ,261 6,487 41, Consolidated Statement of Changes in Equity

12 notes to the condensed interim financial statements

13 I. Report in accordance with International Financial Reporting Standards (IFRS) C-QUADRAT Investment AG, as the parent of the C-QUADRAT Group (the Group ), prepares consolidated interim financial statements in accordance with the International Financial Reporting Standards (IFRS). In accordance with Directive 83/349/EEC (Consolidated Accounts Guideline), the unaudited interim financial statements for the period ended 30 September 2007 have been prepared on the basis of the International Financial Reporting Standards (IFRS), adopted and published by the International Accounting Standards Board (IASB), including the interpretations of the International Financial Reporting Interpretations Committees (IFRIC), as applicable within the EU. The present unaudited condensed interim financial statements for the period ended 30 September 2007 have been prepared in accordance with IAS 34. They do not contain all of the information required to be disclosed in the consolidated financial statements for the financial year as a whole, and should be read in conjunction with the consolidated financial statements of the C-QUADRAT Group for the year ended 31 December The present condensed interim financial statements cover the period from 1 January 2007 to 30 September 2007 and consist of the consolidated income statement, the consolidated balance sheet, the consolidated cash flow statement, the consolidated statement of changes in equity and the notes to the condensed interim financial statements. The interim financial statements are prepared in euros, with the figures rounded to thousands of euros (EUR thousand, TEUR) for the purpose of presentation in this report. The use of automated calculating aids means that differences may occur when aggregating rounded amounts and percentages. II. General Information The C-QUADRAT Group, including its subsidiaries and investments, is an independent asset management company that is active throughout Europe. The Company s core competencies include the analysis and brokerage of almost all investment funds licensed for sale in Austria and Germany, and the management and sale of its own funds of funds. As a manager of structured products that are issued in cooperation with renowned international financial institutions and with its activities in the area of brokerage for banks, the C-QUADRAT Group has successfully established itself in another attractive business segment in Austria and Germany. As a result of these business activities, the C-QUADRAT Group primarily receives fee and commission income from the brokerage and management of the aforementioned products. Due to its historical development, the activities of the C-QUADRAT Group are focused on Austria, albeit with an increasing emphasis on Germany and the CEE countries. The Group parent is domiciled at Stubenring 2, 1010 Vienna, Austria. The Company is registered with the commercial register of the Vienna Commercial Court under 55148a. III. Scope of Consolidation In addition to C-QUADRAT Investment AG, the present interim financial statements of the C-QUADRAT Group include a total of eight fully consolidated subsidiaries (31 December 2006: 10) and four companies recognized at equity (31 December 2006: 6). 13 Notes

14 On 9 February and 28 February 2007, respectively, C-QUADRAT Investment AG sold its 5 % equity interest in Ariconsult Fonds Marketing GmbH and its 66.6 % equity interest (corresponding to 200,000 shares) in ARIQON Asset Management AG (formerly: MAQON Asset Management AG) to Ariconsult Holding AG for a total selling price of EUR 1,000 thousand. The loan granted to Ariconsult Holding AG by C-QUADRAT Investment AG in the amount of EUR 800 thousand was converted into a shareholder subsidy by way of the repayment waiver confirmed by C-QUADRAT Investment AG on 15 May 2007 and allocated to the share capital of Ariconsult Holding AG by resolution of the Annual General Meeting of the latter company on 9 July As a result, C-QUADRAT s equity interest in this associated company increased to EUR 1,800 thousand. By way of a purchase agreement dated 18 June 2007, C-QUADRAT Investment AG acquired the 50 % equity interest in Fonds & Co Fondsanteilsvermittlung AG held by Privatinvest Bank AG for a purchase price of EUR 1,500 thousand. The agreement contained a condition precedent under which the transaction was required to be approved by the Austrian Financial Market Authority. This approval was received in early July, therefore the company is no longer recognized at equity with effect from July 2007, but instead is fully consolidated. By way of a purchase agreement dated 30 June 2007, C-QUADRAT Investment AG acquired the 50 % equity interest in Fonds & Co Fondsanteilsvermittlung AG held by its whollyowned subsidiary C-QUADRAT Deutschland AG for a purchase price of EUR 1,500 thousand. This intragroup transaction had no effect on the consolidated financial statements. By way of a purchase agreement dated 1 August 2007, C-QUADRAT Investment AG acquired an additional 200 shares of EPICON Investment AG, thereby increasing its interest in the share capital of EPICON Investment AG to %. The Extraordinary General Meeting of Epicon Investment AG held on 24 September 2007 passed the merger of Epicon Investment AG (the acquiring company) and Fonds & Co Fondsanteilsvermittlung AG (the selling company) on the basis of the merger agreement of 14 August The aim of the transaction was to combine two companies which are active in essentially the same business segment in order to better leverage synergy effects and reduce costs, in particular in the areas of management and administration, as these will increase significantly as a result of the change in statutory conditions resulting from the revision of the Austrian Securities Supervision Act implementing the Markets in Financial Instruments Directive (MiFID). The Extraordinary Meeting also passed the name change of Epicon Investment AG into Fonds & Co Fondsanteilsvermittlung AG during the same meeting. The Extraordinary General Meeting of C-QUADRAT Alternative Investment GmbH held on 30 September 2007 passed the merger of C-QUADRAT Alternative Investment GmbH (as the selling company) and C-QUADRAT Investment AG (as the acquiring company) on the basis of the merger agreement of 17 September The aim of this transaction was to further streamline the Group structure. The company license to execute securities services has already been relinquished, since the field of alternative investments is covered by the Absolute Plus Group. 14 Notes

15 IV. Accounting Policies The accounting principles and policies applied in preparing the present interim financial statements are the same as those applied in preparing the consolidated financial statements for the year ended 31 December The new and amended provisions of IAS 1 and IFRS 7, which are applicable for periods starting on or after 1 January 2007, have not affected the accounting policies of the C-QUADRAT Group or have only resulted in additional disclosure requirements or an increase in the amount of information on financial instruments disclosed in the interim financial statements. In addition, IFRS 8, which harmonizes the provisions on segment reporting in US GAAP and IFRS by largely adopting the management approach set out in SFAS 131, was not applied. This standard is applicable for financial years starting on or after 1 January The application of this standard is expected to result in a slight change in the presentation of the segments of the Group. Furthermore, IFRIC 7, 8, 9, 10, 11 and 12 were not applied because they did not affect the C-QUADRAT Group in the third quarter of If an impairment loss is recognized in a future interim period due to the recoverable amount of a cash-generating unit on which goodwill is based having fallen below the carrying value of the cash-generating unit, IFRIC 10 states that this impairment loss may not be reversed in a subsequent interim period or in the annual financial statements. Foreign currency translation The following exchange rates were applied for the purposes of foreign currency Closing rate in EUR CHF USD Average rate for the period in EUR Q Q CHF USD Notes

16 V. Business Combinations In the 2006 financial year, the C-QUADRAT Group acquired % of the shares of Absolute Plus AG (formerly: VPM Vermögensverwaltungs AG), Munich, Germany. The Group also acquired % of the shares of Absolute Plus Zürich AG, Zurich, Switzerland, and % of Absolute Portfolio Management Ltd., Georgetown, Cayman Islands. In turn, Absolute Portfolio Management Ltd. holds 50 % of the shares of Absolute Plus. Com Ltd., Georgetown, Cayman Islands. The business activities of these companies primarily relate to securities brokerage. The Ordinary General Meeting of VPM Vermögensverwaltungs AG held on 24 July 2007 passed the name change of VPM Vermögensverwaltungs AG into Absolute Plus AG. The fair values of the identifiable assets and liabilities of Absolute Plus AG (formerly: VPM Vermögensverwaltungs AG) on the acquisition date were as follows: Reconciliation Carrying value to fair value Fair value TEUR TEUR TEUR Property, plant and equipment Intangible assets 57 3,711 3,768 Investments Receivables from customers Other assets Cash and cash equivalents Payables to customers (long-term) Deferred tax liabilities 0-1,187-1,187 Payables to customers (short-term) Other current liabilities Other current provisions Fair value of net assets 1,510 2,523 4,033 Goodwill arising on acquisition -199 Minority interests -2,015 Total cost of acquisition 1,819 Cash outflow due to acquisition Total cost of acquisition -1,819 Less acquired cash and cash equivalents 542-1, Notes

17 The fair values of the identifiable assets and liabilities of Absolute Plus Zürich AG on the acquisition date were as follows: Reconciliation Carrying value to fair value Fair value Intangible assets TEUR 1,258 TEUR 3,238 TEUR 4,496 Deferred tax assets Other assets Cash and cash equivalents Deferred tax liabilities Payables to customers (short-term) Other current liabilities Income tax liabilities Fair value of net assets 919 2,399 3,318 Goodwill arising on acquisition 3,196 Minority Interests -1,656 Total cost of acquisition 4,858 Cash outflow due to acquisition Total cost of acquisition -4,858 Less acquired cash and cash equivalents 186-4,672 The fair values of the identifiable assets and liabilities of Absolute Portfolio Management Ltd. on the acquisition date were as follows: Reconciliation Carrying value to fair value Fair value Intangible assets TEUR 0 TEUR 4,707 TEUR 4,707 Investments in associated companies Receivables from customers Cash and cash equivalents Payables to customers (short-term) Other current liabilities Fair value of net assets 1,037 4,707 5,744 Goodwill arising on acquisition 947 Minority Interests -2,872 Total cost of acquisition 3,819 Cash outflow due to acquisition Total cost of acquisition -3,819 Less acquired cash and cash equivalents 525-3, Notes

18 In each case, the increase in intangible assets relates to the acquisition of customer mandates for the investment funds managed by the aforementioned companies. These were recognized on the basis of the expected revenue surpluses, applying an interest rate that reflects the specific risks of the customer mandates acquired. The linear amortization schedule is based on an economic life span of 8 years. Deferred taxes were recognized on the differences resulting from fair value measurement. The remaining difference for Absolute Plus AG (formerly: VPM Vermögensverwaltungs AG) in the amount of EUR 199 thousand is recognized in other operating income as negative goodwill from the acquisition. The remaining difference for Absolute Plus Zürich AG in the amount of EUR 3,196 thousand and the remaining difference for Absolute Portfolio Management Ltd. in the amount of EUR 947 thousand were recognized as goodwill. Since the acquisition date of Absolute Plus AG (formerly: VPM Vermögensverwaltungs AG), Absolute Plus Zürich AG and Absolute Portfolio Management Ltd. only occurred after the end of December 2006, upon fulfillment of the conditions precedent contained in the terms of the purchase agreement concluded on 3 November 2006, these companies were not included in the net profit for the 2006 financial year. By way of a purchase agreement dated 18 June 2007, C-QUADRAT Investment AG acquired the 50 % equity interest in Fonds & Co Fondsanteilsvermittlung AG held by Privatinvest Bank AG for a purchase price of EUR 1,500 thousand. The agreement contained a condition precedent under which the transaction was required to be approved by the Austrian Financial Market Authority. This approval was received in early July, therefore the company is no longer recognized at equity with effect from July 2007, but instead is fully consolidated. The fair values of the identifiable assets and liabilities of Fonds & Co Fondsanteilsvermittlung AG on the acquisition date were as follows: Reconciliation Carrying value to fair value Fair value Property, plant and equipment TEUR 109 TEUR 0 TEUR 109 Intangible assets 19 2,020 2,039 Receivables from customers Other assets Cash and cash equivalents Deferred tax liabilities Payables to customers (short-term) Other current liabilities Other current provisions Fair value of net assets 334 1,515 1,849 Goodwill arising on acquisition 36 Minority Interests 0 Total cost of acquisition 1,885 Cash outflow due to acquisition Total cost of acquisition -1,885 Less acquired cash and cash equivalents 235-1, Notes

19 The increase in intangible assets relates to the acquisition of customer mandates for the investment funds managed by the aforementioned company. These were recognized on the basis of the expected revenue surpluses, applying an interest rate that reflects the specific risks of the customer mandates acquired. The linear amortization schedule is based on an economic life span of 8 years. Deferred taxes were recognized on the differences resulting from fair value measurement. The remaining difference for Fonds & Co Fondsanteilsvermittlung AG in the amount of EUR 36 thousand is recognized as goodwill. VI. Income statement disclosures 1. Income from associated companies Due to the waiver of an option relating to ARTS Asset Management GmbH between C-QUADRAT Investment AG, on the one hand, and San Gabriel Privatstiftung and T.R. Privatstiftung, on the other hand, in September 2006, the economic character of the transaction as a loan to shareholders changed. As a result, the company is included in the consolidated financial statements at equity and is reported under Investments in associated companies, with the proportionate net profit for the first three quarters of 2007 in the amount of EUR 1,131 thousand reported under Net income from associated companies. 2. Income tax expense The main components of the income tax reported in the consolidated interim financial statements are as follows: Q Q TEUR TEUR TEUR TEUR Current tax expense Deferred tax income Total Dividends In the interim reporting period, the following dividends were resolved and paid: Q Q TEUR TEUR TEUR TEUR Dividends for ordinary shares 0 2, , Notes

20 4. Earnings per share Since there was no dilution of ordinary shares in the periods under review, the diluted earnings per share is the same as the basic earnings per share. The calculation of earnings per share was based on the following weighted average number of ordinary shares: Q3/2007 Q3/2006 Weighted average number of ordinary shares 4,363,200 3,636, Segment reporting The Fund Brokerage and Asset Management business segments represent the primary reporting format for the segment reporting of the C-QUADRAT Group. No secondary segment was established, since the majority of revenues are still being generated within Austria. The business segments of the C-QUADRAT Group are broken down as follows. The Fund Brokerage segment includes the following companies: fund brokerage Extend Absolute Plus AG (formerly: VPM Vermögensverwaltungs AG ) since % Absolute Plus Zürich AG since % Absolute Portfolio Management Ltd. since % C-QUADRAT Deutschland AG 100 % C-QUADRAT Fonds-Analyse und Marketing AG 100 % C-QUADRAT Investment AG 100 % Epicon Financial Services GmbH 50 % Fonds & Co Fondsanteilsvermittlung AG since % This business segment is primarily involved in the settlement of securities sales and purchases for brokerage customers (especially banks) and the development and sale of structured products and alternative investments. The Asset Management segment includes the following companies: asset management Extend C-QUADRAT Kapitalanlage AG 100 % Epicon Financial Services GmbH 50 % Fonds & Co Fondsanteilsvermittlung AG 50 % 20 Notes

21 This business segment is primarily involved in the management of external assets as part of publicly traded investment funds. Transactions between the business segments primarily relate to fee and commission income and fee and commission expenses and oncharged costs, for which a profit margin is charged in addition to the proportionate costs. Segment results refer to the net profit after minorities for the period. 1 January September 2007 Fund Brokerage Asset Management Consolidation C-QUADRAT Group TEUR TEUR TEUR TEUR Net fee and commission income 19,615 19,762-3,264 36,114 from external customers 17,189 18, ,114 from other segments 2, ,264 0 Segment result 4,247 1,609-1,861 3,995 Net income from associated companies 1, ,475 Depreciation and amortisation expense ,564-1,935 Capital expenditure 7, ,414 Employees January September 2006 Fund Brokerage Asset Management Consolidation C-QUADRAT Group TEUR TEUR TEUR TEUR Net fee and commission income 14,751 15,150-2,644 27,257 from external customers 13,468 13, ,257 from other segments 1,283 1,361-2,644 0 Segment result 2,267 1, ,926 Net income from associated companies Depreciation and amortisation expense Capital expenditure Employees Income from external customers broken down by geographical location at country level amounted to EUR 10,796 thousand (i.e. 30 % of total revenue). Of this figure, EUR 7,581 thousand (21 %) is attributable to Germany, EUR 1,669 thousand (5 %) to Great Britain, EUR 1,184 thousand (3 %) is to Switzerland and EUR 278 thousand (1 %) to the CEE countries. 21 Notes

22 VII. Balance sheet disclosures 6. Intangible assets and property, plant and equipment In the first three quarters of 2007, intangible assets and property, plant and equipment (without additions to the scope of consolidation) were acquired for a total cost of EUR 7,414 thousand (Q1-Q3/2006: EUR 458 thousand), of which EUR 139 thousand related to the third quarter of 2007 (Q3/2006: EUR 187 thousand). On 19 January 2007, C-QUADRAT Investment AG acquired a property in 1040 Vienna. The purchase price including incidental expenses, which amounted to EUR 7,016 thousand, was fully debt-financed, and the necessary adaptation costs will also be primarily debtfinanced. In 2008, all the companies of the C-QUADRAT Group that are based in Vienna will be relocated to the new building, resulting in the greater leveraging of synergy effects and a significant reduction in rental charges within the Group. In accordance with IAS 16, the depreciation of the building will start from the date of its first use in mid With regard to the increase in intangible assets resulting from the acquisition of the customer mandates of Absolute Plus AG (formerly: VPM Vermögensverwaltungs AG), Absolute Plus Zürich AG, Absolute Portfolio Management Ltd. and Fonds & Co Fondsanteilsvermittlungs AG, please refer to the Notes under Item V. above. 7. Financial assets Financial assets relate to the financial assets held for trading that are classified as current assets (30 September 2007: EUR 3,993 thousand, 31 December 2006: EUR 5,614 thousand) and the available-for-sale financial assets that are classified as noncurrent assets (30 September 2007: EUR 2,392 thousand, 31 December 2006: EUR 621 thousand), as well as one atypical dormant participation carried at cost (30 September 2007: EUR 100 thousand, 31 December 2006: EUR 100 thousand). Available-for-sale financial assets relate exclusively to units in investment funds, and hence have no fixed maturity and no fixed interest. Financial assets held for trading relate to investments in ordinary and preferred shares and units in investment funds. All of these assets are exchange-traded with the exception of shares with a carrying value of EUR 500 thousand (31 December 2006: EUR 41 thousand). 8. Non-current assets held for sale On 9 February 2007 and 28 February 2007, respectively, C-QUADRAT Investment AG sold its % equity interest in ARIQON Asset Management AG and its 5 % equity interest in Ariconsult Fonds Marketing GmbH to Ariconsult Holding AG. The activities of both companies range from the sale of investment products, financing and insurance through to institutional asset management. On 31 December 2006, the final negotiations on the sale of the companies were still in progress. Accordingly, both ARIQON Asset Management AG and Ariconsult Fonds Marketing GmbH were classified as assets held for sale as at 31 December At the preparation date of the present interim financial statements as at 30 September 2007, sales negotiations were taking place concerning Epicon Financial Services GmbH, in which Fonds & Co Fondsanteilsvermittlung AG holds 100 % of the shares. The activities of this company per- 22 Notes

23 tain to the sale of investment products. Due to the negotiations on the sale of the company, Epicon Financial Services GmbH was, in accordance with IFRS 5, classified as an asset held for sale as at 30 September Liabilities to banks On 19 January 2007, C-QUADRAT Investment AG acquired a property in 1040 Vienna. The purchase price of EUR 6,500 thousand and the incidental expenses of around EUR 516 thousand were fully debt-financed, and the necessary adaptation costs will also be primarily debt-financed. The loan, which is payable on maturity, has a term of 10 years and a fixed interest rate of 5 % over the entire term of the loan. VIII. Disclosures on the cash flow statement The cash flow statement of the C-QUADRAT Group shows the changes in the Group s cash and cash equivalents as a result of the inflow and outflow of funds during the year under review. The effects of acquisitions and disposals are eliminated and shown separately under Net cash inflow due to changes in the scope of consolidation and Net cash outflow due to changes in the scope of consolidation. The cash flow statement distinguishes between cash flows from operating activities, cash flows from investing activities and cash flows from financing activities. The amounts disclosed by fully consolidated foreign Group companies are translated at the exchange rate on the balance sheet date. The cash flow statement is prepared in accordance with the indirect method. The cash funds disclosed in the cash flow statement are the cash and cash equivalents reported on the face of the balance sheet, which are composed of cash in hand and bank balances. IX. Related party disclosures The C-QUADRAT Group has variable-interest receivables from shareholders and members of the Executive Board of the Group parent and members of the management of subsidiaries in the amount of EUR 9 thousand (31 December 2006: EUR 98 thousand). The receivables are payable on demand. In the first three quarters of 2007, the Executive Board of the C-QUADRAT Group received remuneration totaling EUR 1,455 thousand, including variable remuneration components of EUR 0 (Q1-Q3/2006: variable remuneration of EUR 0, total remuneration of EUR 718 thousand). Of this figure, EUR 492 thousand related to the third quarter of 2007 (Q3/2006: EUR 360 thousand). The increase compared with the corresponding period of the previous year is due to the remuneration paid to the members of the Executive Board of C-QUADRAT Deutschland AG who were newly appointed at the beginning of 2007, as well as the remuneration paid to the members of the management of the Absolute Plus Group, which was acquired at the end of Income from associated companies in the first three quarters of 2007 amounted to EUR 3,058 thousand (Q1-Q3 2006: EUR 1,028 thousand), of which EUR 1,154 thousand was generated in the third quarter (Q3/2006: EUR 343 thousand). This primarily relates to fee and commission income and oncharged costs. Furthermore, oncharged costs from associated companies resulted in expenses of EUR 5,307 thousand in the first three quarters of 2007 (Q1-Q3/2006: EUR 1,859 thousand), of which EUR 1,462 thousand was incurred in the third quarter (Q3/2006: EUR 620 thousand). This primarily relates to fee and commission expenses. 23 Notes

24 As part of its asset management activities, C-QUADRAT Kapitalanlage AG entered into an advisory agreement with VCH Investment Group AG ( VCH ) on 30 June 2005, under which C-QUADRAT Kapitalanlage AG will provide advisory services regarding the investment funds issued by VCH. VCH is a subsidiary of the Angermayer, Brumm & Lange Group, of which Christian Angermayer, who is also a member of the Supervisory Board of the C-QUADRAT Group, is one of the five owners. In the first three quarters of 2007, the net fee and commission income from this agreement amounted to EUR 750 thousand (Q1-Q3/2006: EUR 281 thousand), of which EUR 161 thousand related to the third quarter (Q3/2006: EUR 105 thousand). On the reporting date of 30 September 2007, there were outstanding receivables in the amount of EUR 185 thousand (30 September 2006: EUR 65 thousand). Moreover, an advisory agreement was entered into with VCH on 20 October 2005 as part of the Group s fund brokerage business. This agreement resulted in net fee and commission income of EUR 420 thousand in the first three quarters of 2007 (Q1-Q3/2006: EUR 260 thousand). On the reporting date of 30 September 2007, the Group reported no outstanding receivables (30 September 2006: EUR 0). Transactions with related parties are executed at arm s length conditions. X. Events after the balance sheet date On the preparation date of the present interim financial statements as at 30 September 2007, sales negotiations were taking place concerning Epicon Financial Services GmbH, in which Fonds & Co Fondsanteilsvermittlung AG holds 100 % of the shares. The activities of this company pertain to the sale of investment products. XI. Other disclosures Capital resources of C-QUADRAT Investment AG As a financial services company, C-QUADRAT Investment AG, the parent company of the C-QUADRAT Group, is subject to the capital requirements set out in the Austrian Securities Supervision Act. In accordance with these regulations, the Company s equity must amount to at least 25 % of the fixed overheads reported in the most recent annual financial statements, and, in any case, no less than EUR 125 thousand. Accordingly, the Company is currently required to maintain equity of at least EUR 826 thousand, consisting of paid-in capital and general reserves. As at the balance sheet date, the Company had equity of EUR 41,748 thousand, thus largely exceeding the equity requirements. As at 30 September 2007, the Group equity ratio was 65.8 % (31 December 2006: 70.1 %). The Extraordinary General Meeting held on 28 August 2007 resolved a contingent capital increase of EUR 436, by way of the issue of 436,320 no-par value bearer shares with existing shareholders subscription rights disapplied in order to service the stock options under the Company s Stock Option Plan which was also resolved by said General Meeting. 24 Notes

25 Information on the executive bodies of C-QUADRAT Investment AG Executive Board Gerd Alexander Schütz Thomas Rieß Peter Reisenhofer Andreas Wimmer Supervisory Board Chairman: Karl Heinz Grasser (since 21 May 2007) Marcus Diego Mautner-Markhof (until 21 May 2007) Vice-Chairman: Marcus Diego Mautner-Markhof (since 21 May 2007) Thomas Lachs (until 21 May 2007) Members: Christian Angermayer Franz Fuchs Thomas Lachs (since 21 May 2007) Golo Alexander Quandt (until 28 August 2007) Friedrich Schweiger Kurt Waniek (since 28 August 2007) Vienna, 9 November 2007 Gerd Alexander Schütz Member of the Executive Board Thomas Rieß Member of the Executive Board Peter Reisenhofer Member of the Executive Board Andreas Wimmer Member of the Executive Board 25 Notes

26 contact Financial Calender 2007 Description Date AGM 27 April 2007 Annual Report April 2007 Interim report as of March 31, May 2007 Interim report as of June 30, August 2007 Analyst s conference (Frankfurt) November 2007 Interim report as of September 30, November 2007 Financial Calender 2008 Description Date Annual Report April 2008 Interim report as of March 31, May 2008 AGM 29 May 2008 Interim report as of June 30, August 2008 Analyst s conference November 2008 Interim report as of September 30, November 2008 contact information Investor Relations: C-QUADRAT Investment AG Stubenring 2. A-1010 Vienna. Tel: Fax: mail: ir@c-quadrat.com. Publisher: C-QUADRAT Investment AG, Stubenring 2, 1010 Vienna. We have prepared this Quarterly Report with the greatest possible care and have examined the data that it contains. Nevertheless, rounding errors, typographic and printing errors cannot be excluded. When using automatic calculating devices, differences may occur during the addition of amounts and percentages that have been rounded off. This Quarterly Report also contains estimates and statements concerning the future, which C-QUADRAT made on the basis of all the information that was available at the time. It should be noted that the actual circumstances - and thus the actual results - can deviate from the expectations expressed in this report as a result of various factors. C-QUADRAT does not assume any guarantee concerning the actual occurrence of the estimates, forecasts, target figures, statements concerning the future and other statements and, therefore, these only pertain to the day on which they were made. C-QUADRAT does not assume any obligation to further develop such statements in the light of new information or future events. This Quarterly Report is not an offer to sell or the solicitation of an offer to buy any securities. In case of inconsistencies, the German-language version of the Notes shall be decisive. 26 Financial Calender