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

Transcription

1 Interim Report as of June 30, 2007 C-QUADRAT Investment AG 2nd Quarter 2007

2 contents Contents Editorial 3 Company Structure 4 C-QUADRAT Share 5 Condensed Interim Consolidated Financial Statements 6 Consolidated Income Statement 7 Consolidated Balance Sheet 8 Consolidated Cash Flow Statement 9 Consolidated Statement of Changes in Equity 10 Notes to the Condensed Interim Consolidated Financial Statements 11 Contact 23 Financial Calender 23 Contact Information 23 2 Contents

3 editorial left to right: Alexander Schütz Thomas Rieß Peter Reisenhofer Andreas Wimmer Ladies and Gentlemen! Dear Shareholders! We are pleased to be able to present to you C-QUADRAT Investment AG s report on the highly successful second quarter of The reporting period saw the achievement of several key milestones in the Company s development, accompanied by significant profit growth. Following the impressive results generated in Q1 2007, C-QUADRAT Investment AG again recorded an above-average improvement in fee-generating assets (FGAs) of some 8.5 % in the second quarter of 2007, with the total volume of FGAs increasing from EUR 4.9 billion at 31 March 2007 to EUR 5.3 billion at 30 June Milestones in the period under review included, in particular, the inclusion of C- QUADRAT investment funds in the sales portfolios of AWD, tecis and Horbach in Germany, which saw the Company s German sales network expanding by a total of around 7,000 advisors in the first half of the year This was a key step towards establishing the Company s course for the future. In addition, Mag. Karl-Heinz Grasser, the former Austrian Federal Minister of Finance, was appointed as Chairman of the Supervisory Board, and the Company successfully extended its product range to include single-security investment funds for institutional investors. At 30 June 2007 earnings before taxes (EBT) increased from EUR 3.8 million to EUR 4.8 million as against the same period of the previous year, representing growth of 24.5 %. Net profit for the first half of 2007 amounted to EUR 3.9 million, up 35.9 % year-on-year. Despite the increasing volatility of the markets at the start of the third quarter 2007, the Company expects to continue its positive development into the remaining financial year of 2007, with activities focusing on the further expansion of sales activities in Germany and CEE countries. 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 3 Editorial

4 company structure C-QUADRAT Investment AG 100 % C-QUADRAT Kapitalanlage AG 100 % C-QUADRAT Deutschland AG (Germany) 50 % Fonds & Co Fondsanteilsvermittlung AG 100 % C-QUADRAT Fonds-Analyse und Marketing AG (Switzerland) 100 % C-QUADRAT Alternative Investment GmbH 45 % ARTS Asset Management GmbH 97,54 % 50 % 50,003 % 25,1 % Epicon Investment AG Active Management & Advisory AG (Switzerland) VPM Vermögensverwaltungs AG (Germany) Ariconsult Holding AG 100 % 50,08 % 50 % Epicon Financial Services GmbH Absolute Plus Zürich AG (Switzerland) Privatinvest Bank AG (Vienna) 50,002 % Absolute Portfolio Management Ltd. (Cayman Islands) 50 % Absolute Plus.Com Ltd. (Cayman Islands) fully consolidated at-equity consolidated atypical silent partnership As of 30 June 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. June 2007) Market capitalisation (30. June 2007) 213,796, Authorised capital 4,363, Class of shares shares with nominal value The development of C-QUADRAT Investment AG s share price since the Company s capital increase and change to the prime standard in November 2006 has been extremely positive, with overall growth of 22.5 % up until 30 June C-QUADRAT Share November 2006 June November 2006 December 2006 Januar 2007 February 2007 March 2007 April 2007 May 2007 June 2007 Outlook The Company enjoyed a highly profitable first half of 2007 compared with the same period of the previous year, with earnings before taxes (EBT) up 24 % and net profit for the period after minority interests increasing by 36 %. The market adjustments that started in July 2007 mean that the Executive Board of C-QUADRAT Investment AG expects the Company s positive development to continue in the third quarter 2007 despite the increasingly difficult market environment. Discussions with new and existing sales partners are progressing well and are expected to result in additional volume growth, and hence a further improvement in revenues, in the third and fourth quarter of The creation of new investment funds with innovative ma-nagement approaches and their launch on the Austrian and German markets are a further sign of the Company s positive growth in the remainder of the 2007 financial year. The Company also intends to place additional capital guarantee products on the market in order to intensify its earnings momentum. 5 C-QUADRAT Share

6 condensed interim consolidated financial statements

7 CONSOLIDATED INCOME STATEMENT from 1 January 2007 to 30 June 2007 CONSOLIDATED INCOME STATEMENT Q Q.2006 Notes TEUR TEUR TEUR TEUR Fee and commission income 25,391 20,381 12,625 10,033 Other operating income Operating income 26,153 21,032 12,918 10,347 Fee and commission expenses -14,278-12,063-6,604-6,071 Personnel expenses -3,789-2,551-1,982-1,334 Other administrative expenses -3,302-2,348-1,790-1,467 Depreciation 6-1, Other operating expenses Operating profit 3,049 3,136 1, Income from associates 1 1, Finance revenue Finance expenses Profit before tax 4,763 3,826 2,316 1,323 Tax Net Profit 3,859 2,840 1, Minorities Net Profit after minorities 3,678 2,899 1, 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

8 CONSOLIDATED BALANCE SHEET as of 30 June 2007 ASSETS Notes TEUR TEUR Non-current assets Intangible Assets 6 21,483 22,339 Property, plant and equipment 6 7,934 1,037 Investments in associates 8,562 8,136 Financial investments Deferred tax asset ,940 32,678 Current assets Receivables from customers 7,061 8,463 Other assets 4,609 4,038 Financial investments 7 4,275 5,614 Cash and cash equivalents 8,388 6,500 24,332 24,615 Non-current assets, held for sale ,332 25,477 Total assets 63,272 58,155 EQUITY and LIABILITIES Notes TEUR TEUR Issued capital 4,363 4,363 Add paid-in capital 26,554 26,554 Retained earnings 3,938 3,140 Other reserves Equity attributable to shareholders of the parents 34,827 34,021 Minority interests 6,392 6,770 Total equity 41,220 40,791 Non-current liabilities Long-term financial liabilities 9 7,063 0 Non-current provisions Other non-current liabilities Deferred tax liabilities 2,786 3,060 10,023 3,338 Current liabilities Short-term financial liabilities Payables to customers 9,005 10,013 Other current liabilities 1,962 2,688 Other provisions Income tax payable ,030 13,950 Non-current liabilities, held for sale ,030 14,026 Total liabilities 22,052 17,365 Total equity and liabilities 63,272 58,155 8 Consolidated Balance Sheet

9 CONSOLIDATED CASH FLOW STATEMENT from 1 January 2007 to 30 June 2007 CONSOLIDATED CASH FLOW STATEMENT Notes TEUR TEUR Net Profit 3,859 2,840 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 3 Increase/decrease in receivables and other assets 2, Increase/decrease in other provisions Increase/decrease in trade payables -1,581-1,430 Income tax paid Cash flow from operating activities VIII 3,526 2,129 Cash flow from investing activities VIII -5,150 1,596 Cash flow from financing activities VIII 3,512-4,133 Net increase in cash and cash equivalents VIII 1, Cash and cash equivalents at beginning of period 6,500 5,742 Cash and cash equivalents at end of period 8,388 5,334 9 Consolidated Cash Flow Statement

10 Consolidated Statement of Changes in Equity as of 30 June 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 2,899 2, ,840 Total income and expense for the period 2, , ,841 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 3,678 3, ,859 Total income and expense for the period 3, , ,876 Decrease in minority interest Dividends -2,880-2, , ,363 26,554 3, ,827 6,392 41, Consolidated Statement of Changes in Equity

11 notes to the condensed interim consolidated financial statements

12 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 financial statements in accordance with the International Financial Reporting Standards (IFRS). In accordance with Directive 83/349/EEC (Consolidated Accounts), the unaudited interim financial statements for the period ended 30 June 2007 have been prepared on the basis of the International Financial Reporting Standards 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 June 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 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 June 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 figures rounded to thousands of euros (EUR thousand, TEUR) for the purposes 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 major banks 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, but 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 nine fully consolidated subsidiaries (31 December 2006: ten) and five companies recognised at equity (31 December 2006: six). 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 (previously 12 Notes

13 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 associate increased to EUR 1,800 thousand. IV. Accounting Policies The accounting 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 harmonises the provisions on segment reporting in U.S. GAAP and IFRS by largely adopting the management approach set out in SFAS 131, was not applied. This standard is applicable for business 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 second quarter of If an impairment loss is recognised 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 amount of the cashgenerating 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 translation: Closing rate in EUR CHF USD Average rate for the period in EUR Q Q CHF USD Notes

14 V. Business Combinations In the 2006 financial year, the C-QUADRAT Group acquired % of the shares of 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., Cayman Islands. The business activities of these companies primarily relate to securities brokerage. The fair values of the identifiable assets and liabilities of VPM Vermögensverwaltungs AG at the acquisition date were as follows: Reconciliation Carrying value to fair value Fair value TEUR TEUR TEUR Intangible assets 57 3,711 3,768 Deferred tax assets Other assets Cash and cash equivalents Deferred tax liabilities 0-1,187-1,187 Payables to customers 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

15 The fair values of the identifiable assets and liabilities of Absolute Plus Zürich AG at 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 Other current liabilities Other current provisions 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. at the acquisition date were as follows: Reconciliation Carrying value to fair value Fair value Intangible assets TEUR 0 TEUR 4,707 TEUR 4,707 Deferred tax assets Other assets Cash and cash equivalents Deferred tax liabilities Payables to customers Other current liabilities Other current provisions 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

16 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 recognised on the basis of the expected revenue surpluses, applying an interest rate that reflects the specific risks of the customer mandates acquired. Amortisation is based on an economic life of 8 years. Deferred taxes were also recognised on differences resulting from fair value measurement. The remaining difference for VPM Vermögensverwaltungs AG in the amount of EUR 199 thousand is recognised in other operating income as negative goodwill from the acquisition. The differences relating to Absolute Plus Zürich AG in the amount of EUR 3,196 thousand and Absolute Portfolio Management Ltd. in the amount of EUR 947 thousand were recognised as goodwill. As the acquisition date of VPM Vermögensverwaltungs AG, Absolute Plus Zürich AG and Absolute Portfolio Management Ltd. only occurred after the end of December 2006 upon fulfilment of the conditions precedent contained in the terms of the purchase agreements concluded on 3 November 2006, these companies were not included in the net profit for the 2006 financial year. VI. Income statement disclosures 1. Income from associates 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 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 associates, with the proportionate net profit for the first half of 2007 in the amount of EUR 985 thousand reported under net income from associates. 2. Income tax expense The main components of the income tax reported in the consolidated interim financial statements are as follows: Q2/2007 H1/2007 Q2/2006 H1/2006 TEUR TEUR TEUR TEUR Current tax expense ,032 Deferred tax income Total Dividends In the interim reporting period, the following dividends were resolved and paid: Q2/2007 H1/2007 Q2/2006 H1/2006 TEUR TEUR TEUR TEUR Dividends for ordinary shares 2,880 2, , Notes

17 4. Earnings per share As 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 numbers of ordinary shares: Q2/H1/2007 Q2/H1/2006 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. 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 Zürich AG since % Absolute Portfolio Management Ltd. since % C-QUADRAT Alternative Investment GmbH 100 % C-QUADRAT Deutschland AG 100 % C-QUADRAT Fonds-Analyse und Management AG 100 % C-QUADRAT Investment AG 100 % Epicon Financial Services GmbH 50 % Epicon Investment AG 50 % VPM Vermögensverwaltungs 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 % Epicon Investment AG 50 % 17 Notes

18 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 expenses and oncharged costs, for which a profit margin is charged in addition to the proportionate costs. Segment results refer to the net profit for the period. 1 January June 2007 Fund Brokerage Asset Management Consolidation C-QUADRAT Group TEUR TEUR TEUR TEUR Net fee and commission income 13,835 13,740-2,184 25,391 from external customers 12,207 13, ,391 from other segments 1, ,184 0 Segment result 2,571 1, ,859 Net income from associates 1, ,242 Depreciation and amortisation expense ,000-1,243 Capital expenditure 7, ,275 Employees January June 2006 Fund Brokerage Asset Management Consolidation C-QUADRAT Group TEUR TEUR TEUR TEUR Net fee and commission income 11,030 11,348-1,997 20,381 from external customers 10,220 10, ,381 from other segments 810 1,187-1,997 0 Segment result 2,247 1, ,840 Net income from associates Depreciation and amortisation expense Capital expenditure Employees Income from external customers broken down by geographical location at country level amounted to EUR 6,401 thousand (or 25 % of total revenue). Of this figure, 10 % (EUR 2,545 thousand) is attributable to Germany, 8 % (EUR 2,064 thousand) to Great Britain, 4 % (EUR 1,047 thousand) to Switzerland and 3 % (EUR 676 thousand) to CEE countries. 18 Notes

19 VII. Balance sheet disclosures 6. Intangible assets and property, plant and equipment In the first half of 2007, intangible assets and property, plant and equipment were acquired for a total cost of EUR 7,275 thousand (H1/2006: EUR 271 thousand), of which EUR 150 thousand related to the second quarter of 2007 (Q2/2006: EUR 122 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 of 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 as a result of the acquisition of the customer mandates of VPM Vermögensverwaltungs AG, Absolute Plus Zürich AG and Absolute Portfolio Management Ltd., please refer to the notes under V. above. 7. Financial assets Financial assets relate to the financial assets held for trading that are classified as current assets (30 June 2007: EUR 4,275 thousand; 31 December 2006: EUR 5,614 thousand) and the available-for-sale financial assets that are classified as non-current assets (30 June 2007: EUR 626 thousand; 31 December 2006: EUR 621 thousand), as well as one atypical dormant participation carried at cost (30 June 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 amount 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. At 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 of 31 December 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, while 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. 19 Notes

20 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 10 thousand (31 December 2006: EUR 98 thousand). The receivables are payable on demand. The Executive Board of the C-QUADRAT Group received remuneration totalling EUR 829 thousand in the first half of 2007, including variable remuneration components of EUR 0 (H1/2006: variable remuneration of EUR 0, total remuneration of EUR 358 thousand). Of this figure, EUR 412 thousand related to the second quarter of 2007 (Q2/2006: EUR 163 thousand). The increase compared with the same 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 start of 2007, as well as the remuneration paid to the members of management of the VPM/Absolute Plus Group, which was acquired at the end of Income from associates in the first half of 2007 amounted to EUR 1,904 thousand (H1/2006: EUR 3,792 thousand), of which EUR 538 thousand was generated in the second quarter (Q2/2006: EUR 1,896 thousand). This primarily relates to fee and commission income and oncharged costs. In addition, oncharged costs from associates resulted in expenses of EUR 3,845 thousand in the first half of 2007 (H1/2006: EUR 4,652 thousand), of which EUR 1,368 thousand was incurred in the second quarter (Q2/2006: EUR 2,326 thousand). This primarily relates to fee and commission expense. 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 in relation to 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. Net fee and commission income from this agreement amounted to EUR 80 thousand in the first half of 2007 (H1/2006: EUR 46 thousand), of which EUR 16 thousand related to the second quarter (Q2/2006: EUR 9 thousand). At the reporting date 30 June 2007, there were outstanding receivables in the amount of EUR 48 thousand (30 June 2006: EUR 0). In addition, an advisory agreement was entered 20 Notes

21 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 second quarter of 2007 (Q2/2006: EUR 260 thousand). At the reporting date 30 June 2007, the Group reported outstanding receivables in the same amount (30 June 2006: EUR 260 thousand). Transactions with related parties are executed at arm s length conditions. X. Events after the balance sheet date 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 supervisory authorities. This approval was received in early July, meaning that the company is no longer recognised 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 wholly-owned 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. The Annual General Meeting of VPM Vermögensverwaltungs AG held on 24 July 2007 resolved to change the name of VPM Vermögensverwaltungs AG to Absolute Plus AG. On 1 August 2007, C-QUADRAT Investment AG acquired a further 200 shares of EPICON Investment AG, thereby increasing its interest in the share capital of EPICON Investment AG to %. The Extraordinary General Meeting held on 28 August 2007 will resolve 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 also requires a resolution by the General Meeting. Due to the fact that Mr. Golo Alexander Quandt left the supervisory board, Dr. Kurt Waniek is recommended to be elected as a new member of the supervisory board. At the preparation date of the present interim financial statements, the implementation of the merger of Epicon Investment AG (the acquiring company) and Fonds & Co Fondsanteilsvermittlung AG (the selling company) was in progress. The aim of the transaction is to combine two companies which are active in essentially the same business segment in order to better leverage synergy effects and reduce costs in the areas of management and administration in particular, as these will increase significantly as a result of the imminent change in statutory conditions resulting from the revision of the Austrian Securities Supervision Act implementing the Markets in Financial Instruments Directive (MiFiD). At the same time, the merger of C-QUADRAT Alternative Investment GmbH (as the acquiring company) and C-QUADRAT Investment AG (as the selling company) is also being implemented. The aim of this transaction is to further streamline the Group structure. The licence of this company to execute securities services is already reclined, the area of alternative investments is covered by the VPM/Absolute Plus Group. 21 Notes

22 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. At the balance sheet date, the Company had equity of EUR 41,220 thousand, meaning that it comprehensively exceeds the minimum capital requirements. At 30 June 2007, the Group equity ratio was 65 % (31 December 2006: 70 %). 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: Friedrich Schweiger Franz Fuchs Christian Angermayer Golo Alexander Quandt 22 Notes

23 contact Financial Calender 2007 Description Date Annual Report 30 April 2007 Analyst s conference (Frankfurt) November 2007 AGM 27 April 2007 Interim report for the first quarter of Mai 2007 Interim report for the second quarter of August 2007 Interim report for the third quarter of November 2007 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. 23 Financial Calender