Addendum to Base Listing Document relating to Warrants to be issued by

Transcription

1 DOCUMENT DATED 5 SEPTEMBER 2008 If you are in doubt as to any aspect of this Addendum, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. The Singapore Exchange Securities Trading Limited (the "SGX-ST") takes no responsibility for the contents of this Addendum, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Addendum. Admission to the Official List of the SGX-ST is not to be taken as an indication of the merits of Deutsche Bank AG acting through its London branch, the Underlying or Shares or the Warrants. Addendum to Base Listing Document relating to Warrants to be issued by Deutsche Bank AG (Incorporated under the laws of the Federal Republic of Germany) acting through its London branch This Addendum is published in respect of warrants to be issued from time to time by Deutsche Bank AG (the "Issuer") acting through its London branch. The warrants include European style cash settled call warrants on single equities ("European Style Cash Settled Call Warrants"), European style cash settled basket call warrants on a basket of equities ("European Style Cash Settled Basket Call Warrants"), European style index call warrants on indices ("European Style Index Call Warrants"), European style cash settled put warrants on single equities ("European Style Cash Settled Put Warrants"), European style cash settled basket put warrants on a basket of equities ("European Style Cash Settled Basket Put Warrants"), European style index put warrants on indices ("European Style Index Put Warrants"), European style physically settled discount certificates (call spread warrants) on single equities ("European Style Physically Settled Discount Certificates" or "Discount Certificates"), European style physically settled double chance certificates (call spread warrants) on single equities ( European Style Physically Settled Double Chance Certificates or Double Chance Certificates ) and such other warrants to be issued from time to time by the Issuer (together the "Warrants" save that where the context requires references to the "Warrants" shall mean European Style Cash Settled Call Warrants, European Style Cash Settled Basket Call Warrants, European Style Index Call Warrants, European Style Cash Settled Put Warrants, European Style Cash Settled Basket Put Warrants, European Style Index Put Warrants, European Style Physically Settled Discount Certificates, European Style Physically Settled Double Chance Certificates or such other warrants to be issued from time to time by the Issuer, as the case may be). This Addendum is published in connection with a listing of the Warrants on the SGX-ST for the purpose of giving information with regard to the Issuer. The additional terms relating to each series of Warrants will be set out in a supplemental listing document (each a "Supplemental Listing 1

2 Document") which will be supplemental to, and should be read in conjunction with, the Base Listing Document dated 6 June 2008 (the "Base Listing Document") and this Addendum. This Addendum is a supplement to and should be read in conjunction with the Base Listing Document. This Addendum does not constitute or form part of any offer, or invitation, to subscribe for or to sell, or solicitation of any offer to subscribe for or to purchase, Warrants or other securities of the Issuer, nor is it calculated to invite, nor does it permit the making of, offers by the public to subscribe for or purchase for cash or other consideration Warrants or other securities of the Issuer. The Warrants constitute general unsecured contractual obligations of the Issuer and of no other person and if you purchase the Warrants you are relying upon the creditworthiness of the Issuer and have no rights under the Warrants against the Company which has issued the underlying securities or any companies forming part of any indices to which the Warrants relate. As at the date of this Addendum, the long term debt of the Issuer has been assigned a credit rating of Aa1 by Moody s Investors Service, Inc., and AA- by Standard & Poor s Ratings Group. The Issuer is regulated by Bundesanstalt für Finanzdienstleistungsaufsicht and for the purpose of investment business in the United Kingdom is regulated by the Financial Services Authority. Subject as set out below, the Issuer accepts full responsibility for the information contained in the Base Listing Document and this Addendum. To the best of the knowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is the case), the information contained in the Base Listing Document and this Addendum for which it accepts responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. The Base Listing Document and this Addendum should be read in conjunction with the relevant Supplemental Listing Document. No persons have been authorised to give any information or to make any representation save as contained in the Base Listing Document and this Addendum or otherwise authorised by the Issuer in connection with the Warrants and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer. Neither the delivery of the Base Listing Document and this Addendum nor any sale of any Warrants shall under any circumstances create any implication that there has been no change in the affairs of the Issuer or its subsidiaries and affiliates since the date hereof. The Base Listing Document and this Addendum does not constitute an offer by, or an invitation on behalf of, the Issuer to subscribe for or purchase any of the Warrants. This Addendum does not constitute an offer or solicitation by or on behalf of the Issuer or its affiliates to purchase or subscribe for any of the Warrants. The distribution of this Addendum and the offering of the Warrants may, in certain jurisdictions, be restricted by law. The Issuer requires persons into whose possession this document comes to inform themselves of and observe all such restrictions. In particular, the Warrants have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"). Subject to certain exceptions, Warrants, or interests therein, may not at any time be offered, sold, resold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, any U.S. person (as defined in Regulation S under the Securities Act) or to others for offering, sale or resale in the United States or to any such U.S. person. Offers and sales of Warrants, or interests therein, in the United States or to 2

3 U.S. persons would constitute a violation of United States securities laws unless made in compliance with registration requirements of the Securities Act or pursuant to an exemption therefrom. The SGX-ST has made no assessment of, nor taken any responsibility for, the financial soundness of the Issuer or the merits of investing in the Warrants, nor have they verified the accuracy or the truthfulness of statements made or opinions expressed in this Addendum. The Issuer and/or any of its affiliates may repurchase Warrants at any time on or after the date of issue and any Warrants so repurchased may be offered from time to time in one or more transactions in the over-the-counter market or otherwise at prevailing market prices or in negotiated transactions, at the discretion of the Issuer. Investors should not therefore make any assumption as to the number of Warrants in issue at any one time. The Issuer undertakes, in respect of each series of Warrants, until the expiration of the Exercise Period (as defined in the applicable Supplemental Listing Document) to make available for inspection by the holders of such series of Warrants at the registered office of Deutsche Securities Asia Limited, Singapore branch, One Raffles Quay, #17-00, South Tower, Singapore , a copy of its latest publicly available financial reports and interim financial reports (if any) of the Issuer, a copy of the Base Listing Document and a copy of this Addendum. This Addendum is supplemental to, and should be read in conjunction with, the Base Listing Document. Please note that the Base Listing Document may from time to time be amended or updated. Intending investors in the Warrants should ask the Issuer if any additional addenda to the Base Listing Document or any later Base Listing Document have been issued. None of the Base Listing Document, this Addendum or any other information supplied in connection with the Warrants is intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by the Issuer that any recipient of the Base Listing Document, this Addendum or any other information supplied in connection with the Warrants, should purchase any of the Warrants. Each investor contemplating purchasing or holding any of the Warrants should make its own independent investigation of the financial condition and affairs of the Issuer and its own appraisal of the Issuer s creditworthiness. All references herein to "Singapore dollars", "S$" and "SGD" are to the lawful currency of Singapore, to "EUR", "euro" and " " are to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the treaty establishing the European Community, as amended by the Treaty on European Union, and to "U.S. Dollars", "US$" and "USD" are to the lawful currency of the United States of America. 3

4 TABLE OF CONTENTS Page RECENT DEVELOPMENTS IN THE ISSUER S BUSINESS 5 UNAUDITED OF THE DEUTSCHE BANK GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE

5 RECENT DEVELOPMENTS IN THE ISSUER S BUSINESS 1. Share Capital As of June 30, 2008, Deutsche Bank s issued share capital amounted to EUR 1,358,463, consisting of 530,649,697 ordinary shares without par value. The shares are fully paid up and in registered form. The shares are listed for trading and official quotation on all German stock exchanges. They are also listed on the New York Stock Exchange. 2. Capitalisation and Indebtedness of Deutsche Bank Group As of June 30, 2008, Deutsche Bank Group s capitalisation and indebtedness (unaudited) on the basis of International Financial Reporting Standards ("IFRS") was as follows: As of June 30, 2008 (in EUR million) Deposits 422,464 Central bank funds purchased and securities sold under repurchase agreements 163,901 Securities loaned 7,848 Financial liabilities at fair value through profit or loss 941,053 Other short-term borrowings 51,324 Other liabilities 221,515 Provisions 1,262 Income tax liabilities 5,347 Long-term debt 129,392 Trust preferred securities 9,128 Obligation to purchase common shares 3,834 Total liabilities 1,957,068 Common shares, no par value, nominal value of EUR ,358 Additional paid-in capital 16,359 Retained earnings 23,578 Common shares in treasury, at cost (2,452) Equity classified as obligation to purchase common shares (3,833) Net gains (losses) not recognized in the income statement, net of tax Unrealized net gains on financial assets available for sale, net of applicable tax and other 144 Unrealized net gains (losses) on derivatives hedging variability of cash flows, net of tax (26) Foreign currency translation, net of tax (3,234) Total net gains (losses) not recognized in the income statement, net of tax (3,116) Total shareholders' equity 31,894 Minority interest 1,778 Total equity 33,672 Total liabilities and equity 1,990,740 There has been no material change in Deutsche Bank Group s capitalisation and indebtedness since June 30, Management In accordance with German law, Deutsche Bank has both a Supervisory Board (Aufsichtsrat) and a Management Board (Vorstand). These Boards are separate; no individual may be a member of both. 5

6 The Supervisory Board appoints the members of the Management Board and supervises the activities of this Board. The Management Board represents Deutsche Bank and is responsible for its management of its affairs. The Management Board consists of: Dr. Josef Ackermann Chairman of the Management Board Dr. Hugo Bänziger Chief Risk Officer (CRO) Anthony Di Iorio Chief Financial Officer (CFO) until September 30, 2008 Stefan Krause Chief Financial Officer (CFO) from October 1, 2008 Hermann-Josef Lamberti Chief Operating Officer (COO) The Supervisory Board consists of the following 20 members: Dr. Clemens Börsig Karin Ruck* Wolfgang Böhr* Dr. Karl-Gerhard Eick Heidrun Förster* Alfred Herling* Gerd Herzberg* Sir Peter Job Prof. Dr. Henning Kagermann Martina Klee* Suzanne Labarge Maurice Lévy Henriette Mark* Gabriele Platscher* Chairman Frankfurt am Main Deputy Chairperson Deutsche Bank AG Bad Soden am Taunus Deutsche Bank AG Düsseldorf Deputy Chairman of the Board of Managing Directors of Deutsche Telekom AG Cologne Deutsche Bank Privat- und Geschäftskunden AG Berlin Deutsche Bank AG Wuppertal Deputy Chairman of ver.di Vereinte Dienstleistungsgewerkschaft Hamburg London Chairman and CEO of SAP AG Hockenheim Deutsche Bank AG Frankfurt am Main Toronto Chairman and Chief Executive Officer, Publicis Groupe S.A. Paris Deutsche Bank AG Munich Deutsche Bank Privat- und Geschäftskunden 6

7 AG Braunschweig Dr. Theo Siegert Dr. Johannes Teyssen Marlehn Thieme* Tilman Todenhöfer Werner Wenning Leo Wunderlich* Managing Partner of de Haen Carstanjen & Söhne Düsseldorf Chief Operating Officer and Deputy Chairman of the Management Board of E.ON AG Oberding Deutsche Bank AG Bad Soden am Taunus Managing Partner of Robert Bosch Industrietreuhand KG Stuttgart Chairman of the Board of Management of Bayer AG Leverkusen Deutsche Bank AG Mannheim * Elected by the employees in Germany The members of the Management Board accept membership on the Supervisory Boards of other corporations within the limits prescribed by law. The business address of each member of the Management Board and of the Supervisory Board of Deutsche Bank is Theodor-Heuss-Allee 70, Frankfurt am Main, Germany. 4. Auditors The independent auditors of Deutsche Bank are KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft ("KPMG"), Marie-Curie-Strasse 30, Frankfurt am Main, Germany. KPMG audited Deutsche Bank's non-consolidated financial statements for the years ended December 31, 2005, 2006 and 2007, which were prepared in accordance with the German Commercial Code ("HGB") and the Regulation on Accounting by Credit Institutions and Financial Services Institutions. As permitted by HGB, the consolidated financial statements for the years ended December 31, 2005 and 2006 were prepared in accordance with United States Generally Accepted Accounting Principles. Pursuant to Regulation (EC) No 1606/2002 and accompanying amendments to the HGB, the consolidated financial statements for the year ended December 31, 2007 were prepared in accordance with IFRS as issued by the International Accounting Standards Board and endorsed by the European Union. The consolidated financial statements were audited by KPMG, and in each case of the non-consolidated and consolidated financial statements an unqualified auditors' opinion has been provided. 5. Recent Developments and Outlook Share buy back program 7

8 At the Annual General Meeting on 29 May 2008, Deutsche Bank s shareholders renewed the authorization to buy back up to 10 per cent. of shares issued until 31 October 2009, replacing the authorization of the Annual General Meeting At the same time, the Management Board decided to conclude the current program. It has not yet been determined when the new share buyback authorization will be initiated. Within the concluded share buyback program, which was launched on 30 May 2007, a total of 7,155,200 shares, or 1.4 per cent. of the share capital as at the Annual General Meeting in 2007, had been repurchased at an average price of EUR , for a total consideration of EUR 724 million. Thereof 200,000 shares had been repurchased by selling put options. The inventory in own shares within the buyback program as of 29 May 2008 amounted to 24.9 million shares, or 4.7 per cent. of shares issued. This inventory is a result of the 23.3 million shares held at the time of the Annual General Meeting in 2007 plus the repurchases of the concluded program. Thereof, roughly 5.5 million shares were used to hedge share awards. Deutsche Bank has not cancelled any shares since the Annual General Meeting Litigation Other than set out herein Deutsche Bank is not, or during the last financial year has not been involved (whether as defendant or otherwise) in, nor does it have knowledge of any threat of any legal, arbitration, administrative or other proceedings the result of which may have, in the event of an adverse determination, a significant effect on its financial condition presented in this document. General Due to the nature of its business, Deutsche Bank AG and its subsidiaries are involved in litigation, arbitration and regulatory proceedings in Germany and in a number of jurisdictions outside Germany, including the United States, arising in the ordinary course of its businesses, including as specifically described below. In accordance with applicable accounting requirements, Deutsche Bank Group provides for potential losses that may arise out of contingencies, including contingencies in respect of such matters, when the potential losses are probable and estimable. Contingencies in respect of legal matters are subject to many uncertainties and the outcome of individual matters is not predictable with assurance. Significant judgment is required in assessing probability and making estimates in respect of contingencies, and Deutsche Bank Group s final liabilities may ultimately be materially different. The total liability of Deutsche Bank Group recorded in respect of litigation, arbitration and regulatory proceedings is determined on a case-by-case basis and represents an estimate of probable losses after considering, among other factors, the progress of each case, Deutsche Bank Group s experience and the experience of others in similar cases, and the opinions and views of legal counsel. Although the final resolution of any such matters could have a material effect on Deutsche Bank Group s consolidated operating results for a particular reporting period, Deutsche Bank believes that it should not materially affect its consolidated financial position. In respect of each of the matters specifically described below, most of which consists of a number of claims, it is Deutsche Bank s belief that the reasonably possible losses relating to such claim in excess of its provisions are either not material or not estimable. IPO Allocation Litigation Deutsche Bank Securities Inc. ( DBSI ), the Bank s U.S. broker-dealer subsidiary, and its predecessor firms, along with numerous other securities firms, have been named as defendants in over 80 putative class action lawsuits pending in the United States District Court for the Southern District of New York. 8

9 These lawsuits allege violations of securities and antitrust laws in connection with the allocation of shares in a large number of initial public offerings ( IPOs ) by issuers, officers and directors of issuers, and underwriters of those securities. DBSI is named in these suits as an underwriter. The securities cases allege material misstatements and omissions in registration statements and prospectuses for the IPOs and market manipulation with respect to aftermarket trading in the IPO securities. Among the allegations are that the underwriters tied the receipt of allocations of IPO shares to required aftermarket purchases by customers and to the payment of undisclosed compensation to the underwriters in the form of commissions on securities trades, and that the underwriters caused misleading analyst reports to be issued. The antitrust claims allege an illegal conspiracy to affect the stock price based on similar allegations that the underwriters required aftermarket purchases and undisclosed commissions in exchange for allocation of IPO stocks. In the securities cases, the motions to dismiss the complaints of DBSI and others were denied on February 13, Plaintiffs motion to certify six test cases as class actions in the securities cases was granted on October 13, On December 5, 2006 the U.S. Court of Appeals for the Second Circuit vacated the decision and held that the classes in the six cases, as defined, could not be certified. Plaintiffs have filed amended complaints and motions to certify classes in the six test cases. In the putative antitrust class action, the defendants motion to dismiss the complaint was granted on November 3, On September 28, 2005, the U.S. Court of Appeals for the Second Circuit vacated the dismissal. On June 18, 2007, the U.S. Supreme Court reversed the Second Circuit ruling, thereby terminating the antitrust action. Enron Litigation Deutsche Bank AG and certain of its affiliates are collectively involved in a number of lawsuits arising out of their banking relationship with Enron Corp., its subsidiaries and certain Enron-related entities ( Enron ). These lawsuits include a class action brought on behalf of shareholders of Enron, captioned Newby v. Enron Corp., which purported to allege claims against, among others, Deutsche Bank AG and certain of its affiliates under federal securities laws. On June 5, 2006, the court dismissed all of the claims in the Newby action against Deutsche Bank AG and its affiliates. On June 21, 2006, lead plaintiff in Newby filed a motion requesting the court to reconsider the dismissal of Deutsche Bank AG and its affiliates from Newby. On February 8, 2007, the court denied the lead plaintiff s motion for reconsideration. Also, an adversary proceeding was brought by Enron in the bankruptcy court against, among others, Deutsche Bank AG and certain of its affiliates. In this proceeding, Enron sought damages from the Deutsche Bank entities under various common law theories, sought to avoid certain transfers to the Deutsche Bank entities as preferential or fraudulent, and sought to subordinate certain of the claims made by the Deutsche Bank entities in the Enron bankruptcy. There are also individual actions brought in various courts by Enron investors and creditors alleging federal and state law claims against Deutsche Bank AG and certain of its affiliates. Tax-Related Products Deutsche Bank AG, along with certain affiliates, and current and former employees (collectively referred to as Deutsche Bank ), have collectively been named as defendants in a number of legal proceedings brought by customers in various tax-oriented transactions. Deutsche Bank provided financial products and services to these customers, who were advised by various accounting, legal and financial advisory professionals. The customers claimed tax benefits as a result of these transactions, and the United States Internal Revenue Service has rejected those claims. In these legal 9

10 proceedings, the customers allege that the professional advisors, together with Deutsche Bank, improperly misled the customers into believing that the claimed tax benefits would be upheld by the Internal Revenue Service. The legal proceedings are pending in numerous state and federal courts and in arbitration, and claims against Deutsche Bank are alleged under both U.S. state and federal law. Many of the claims against Deutsche Bank are asserted by individual customers, while others are asserted on behalf of a putative customer class. No litigation class has been certified as against Deutsche Bank. Approximately 79 legal proceedings have been resolved and dismissed with prejudice as against Deutsche Bank. Approximately 14 other legal proceedings remain pending as against Deutsche Bank and are currently at various pre-trial stages, including discovery. The Bank has received a number of unfiled claims as well, and has resolved certain of those unfiled claims. The United States Department of Justice ( DOJ ) is also conducting a criminal investigation of taxoriented transactions that were executed from approximately 1997 through In connection with that investigation, DOJ has sought various documents and other information from Deutsche Bank and has been investigating the actions of various individuals and entities, including Deutsche Bank, in such transactions. In the latter half of 2005, DOJ brought criminal charges against numerous individuals based on their participation in certain tax-oriented transactions while employed by entities other than Deutsche Bank. In the latter half of 2005, DOJ also entered into a Deferred Prosecution Agreement with an accounting firm (the Accounting Firm ), pursuant to which DOJ agreed to defer prosecution of a criminal charge against the Accounting Firm based on its participation in certain taxoriented transactions provided that the Accounting Firm satisfied the terms of the Deferred Prosecution Agreement. On February 14, 2006, DOJ announced that it had entered into a Deferred Prosecution Agreement with a financial institution (the Financial Institution ), pursuant to which DOJ agreed to defer prosecution of a criminal charge against the Financial Institution based on its role in providing financial products and services in connection with certain tax-oriented transactions provided that the Financial Institution satisfied the terms of the Deferred Prosecution Agreement. Deutsche Bank provided similar financial products and services in certain tax-oriented transactions that are the same or similar to the tax oriented transactions that are the subject of the abovereferenced criminal charges. Deutsche Bank also provided financial products and services in additional tax-oriented transactions as well. DOJ s criminal investigation is ongoing. Kirch Litigation In May 2002, Dr. Leo Kirch personally and as an assignee of two entities of the former Kirch Group, i.e., PrintBeteiligungs GmbH and the group holding company TaurusHolding GmbH & Co. KG, initiated legal action against Dr. Breuer and Deutsche Bank AG alleging that a statement made by Dr. Breuer (then the Spokesman of Deutsche Bank AG s Management Board) in an interview with Bloomberg television on February 4, 2002, regarding the Kirch Group was in breach of laws and financially damaging to Kirch. On January 24, 2006, the German Federal Supreme Court sustained the action for the declaratory judgment only in respect of the claims assigned by PrintBeteiligungs GmbH. Such action and judgment did not require a proof of any loss caused by the statement made in the interview. PrintBeteiligungs GmbH is the only company of the Kirch Group which was a borrower of Deutsche Bank AG. Claims by Kirch personally and by TaurusHolding GmbH & Co. KG were dismissed. To be awarded a judgment for damages against Deutsche Bank AG, Dr. Kirch had to file a new lawsuit. In May 2007, Dr. Kirch filed an action as assignee of PrintBeteiligungs GmbH against Deutsche Bank AG and Dr. Breuer for the payment of approximately 1.6 billion at the time of the filing (the amount depends, among other things, on the development of the price for the shares of Axel Springer AG) plus interest. In these proceedings he will have to prove that such statement caused financial damages to PrintBeteiligungs GmbH and the amount thereof. In the view of 10

11 Deutsche Bank, the causality in respect of the basis and scope of the claimed damages has not been sufficiently substantiated in the complaint. On December 31, 2005, KGL Pool GmbH filed a lawsuit against Deutsche Bank AG and Dr. Breuer. The lawsuit is based on alleged claims assigned from various subsidiaries of the former Kirch Group. KGL Pool GmbH seeks a declaratory judgment to the effect that Deutsche Bank AG and Dr. Breuer are jointly and severally liable for damages as a result of the interview statement and the behaviour of Deutsche Bank AG in respect of several subsidiaries of the Kirch Group. In December 2007, KGL Pool GmbH supplemented this lawsuit by a motion for payment of approximately 2.0 billion plus interest as compensation for the purported damages which two subsidiaries of the former Kirch Group allegedly suffered as a result of the statement by Dr. Breuer. In the view of Deutsche Bank due to the lack of a relevant contractual relationship with any of these subsidiaries there is no basis for such claims, and the causality in respect of the basis and scope of the claimed damages has not been sufficiently substantiated in the complaint. Philipp Holzmann AG Philipp Holzmann AG ( Holzmann ) was a major German construction firm which filed for insolvency in March Deutsche Bank AG had been a major creditor bank and holder of an equity interest of Holzmann for many decades, and, from April 1997 until April 2000, a former member of Deutsche Bank AG s Management Board was the Chairman of its Supervisory Board. When Holzmann had become insolvent at the end of 1999, a consortium of banks led by Deutsche Bank AG participated in late 1999 and early 2000 in a restructuring of Holzmann that included the banks extension of a credit facility, participation in a capital increase and exchange of debt into convertible bonds. The restructuring package amounted to about 1.6 billion, of which Deutsche Bank AG s participation was 547 million. In March 2002, Holzmann and several of its subsidiaries, including in particular imbau Industrielles Bauen GmbH ( imbau ), filed for insolvency. As a result of these insolvencies, the administrator for Holzmann had asserted claims against Deutsche Bank AG because of its role as lender to the Holzmann group prior to and after the restructuring and as leader of the consortium of banks which supported the restructuring, including claims that amounts repaid to the banks constituted voidable preferences that should be returned and claims of lender liability resulting from the banks support for an allegedly infeasible restructuring. Deutsche Bank AG and the other banks resolved these claims in out-of-court settlements in December Further, several parties filed lawsuits against Deutsche Bank AG. The administrator for imbau filed a lawsuit in August 2004 alleging that payments (including interest) of 77 million received by Deutsche Bank in respect of a loan made to imbau until 1998 and in connection with a real estate transaction that was part of the restructuring constituted voidable preferences that should be returned to the insolvent entity. Several bondholders filed a lawsuit against Deutsche Bank AG in December 2005 seeking damages of 53 million because of Deutsche Bank s allegedly unlawful support of Holzmann s 1999/2000 restructuring. The lawsuit which Gebema N.V. had filed in 2000, seeking compensation for alleged damages of 187 million on grounds of alleged deficiencies in the offering documents based on which Gebema N.V. had invested in equity and convertible bonds of Holzmann in 1998, was resolved amicably in October Parmalat Litigation Following the bankruptcy of the Italian company Parmalat, the Special Administrator of Parmalat, Mr. Enrico Bondi, is suing Deutsche Bank AG for damages totaling 2.2 billion for facilitating the insolvency offense of delaying the filing of a petition in insolvency allegedly committed by Parmalat s 11

12 former management and supervisory board. There are two separate complaints and they allege that by managing and/or underwriting the issuance of Parmalat bonds in 2003 and entering into certain derivative transactions, Deutsche Bank AG assisted Parmalat by providing liquidity in order to enable Parmalat to meet its short term liabilities/obligations. It is alleged that Deutsche Bank AG knowingly helped Parmalat to continue its business for several months until December 2003, despite being aware of the true financial situation of the company. Parmalat reserves the right to increase the amount of damages sought. The damages currently requested are, it is claimed, equal to the loss creditors of Parmalat incurred in the second half of Also in connection with the Parmalat insolvency, Mr. Bondi has already brought two claw-back actions for a total of 177 million against Deutsche Bank SpA. In addition, following the Parmalat insolvency, the prosecutors in Milan conducted a criminal investigation which led to criminal indictments on charges of alleged market manipulation against various banks, including Deutsche Bank AG and Deutsche Bank SpA, and some of their employees. Trial before the Court of Milan (Second Criminal Section) commenced in January Credit-Related Matters Deutsche Bank has received subpoenas and requests for information from certain regulators and government entities concerning its activities regarding the origination, purchase, and securitization of subprime and non-subprime residential mortgages. Deutsche Bank is cooperating fully in response to those subpoenas and requests for information. Deutsche Bank has also been named as defendant in various civil litigations (including putative class actions), brought under the Securities Act of 1933 or state common law, related to the residential mortgage business. Included in those litigations are (i) three putative class actions pending in California Superior Court in Los Angeles County regarding the role of Deutsche Bank s subsidiary Deutsche Bank Securities Inc. ("DBSI"), along with other financial institutions, as an underwriter of offerings of certain securities and mortgage passthrough certificates issued by Countrywide Financial Corporation or an affiliate; and (ii) a putative class action pending in the United States District Court for the Southern District of New York regarding the role of DBSI, along with other financial institutions, as an underwriter of offerings of certain mortgage pass-through certificates issued by affiliates of Novastar Mortgage Funding Corporation. In addition, certain affiliates of Deutsche Bank, including DBSI, have been named in a putative class action pending New York Supreme Court in Nassau County regarding their roles as issuer and underwriter of certain mortgage pass-through securities. Each of the civil litigations is in its early stages. Auction Rate Securities Deutsche Bank AG and DBSI are the subject of a putative class action, filed in the United States District Court for the Southern District of New York, asserting various claims under the federal securities laws on behalf of all persons or entities who purchased and continue to hold Auction Rate Securities ( ARS ) offered for sale by Deutsche Bank and DBSI between March 17, 2003 and February 13, DBSI and Deutsche Bank Alex. Brown, a division of DBSI, have also been named as defendants in two individual actions asserting various claims under the federal securities laws and state common law by two investors in ARS. The purported class action and individual actions are in their early stages. Deutsche Bank along with other industry participants, has also received numerous regulatory requests, including requests from the SEC and certain state regulatory agencies, in connection with investigations relating to the marketing and sale of ARS to clients, the failure of the ARS auctions in 12

13 February 2008, and Deutsche Bank s and DBSI s role and participation in these auctions. DBSI has also received requests from FINRA seeking information about DBSI s proprietary and client holdings of ARS. Deutsche Bank is cooperating fully in the regulatory investigations. 13

14 UNAUDITED OF THE DEUTSCHE BANK GROUP FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2008 The information set out below relates to the unaudited consolidated financial statements of the Deutsche Bank Group for the six-month period ended 30 June 2008, as extracted from the Interim Report as of 30 June 2008 of the Deutsche Bank Group. References therein to page numbers are to pages in that report, and not to pages in this document. The latest interim report is available for inspection at the office of Deutsche Securities Asia Limited, Singapore branch, presently at One Raffles Quay, #17-00, South Tower, Singapore

15 CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) Consolidated Statement of Income (unaudited) INCOME STATEMENT Three months ended Six months ended in m. Jun 30, 2008 Jun 30, 2007 Jun 30, 2008 Jun 30, 2007 Interest and similar income 15,009 16,816 30,358 32,596 Interest expense 12,058 14,845 24,731 28,572 Net interest income 2,951 1,971 5,627 4,024 Provision for credit losses Net interest income after provision for credit losses 2,816 1,890 5,378 3,846 Commissions and fee income 2,563 3,143 5,094 6,073 Net gains (losses) on financial assets/liabilities at fair value through profit or loss (475) 3,140 (2,053) 7,114 Net gains (losses) on financial assets available for sale Net income (loss) from equity method investments Other income Total noninterest income 2,441 6,811 4,381 14,335 Compensation and benefits 2,679 3,874 5,613 8,203 General and administrative expenses 1,812 2,102 3,760 4,017 Policyholder benefits and claims (7) 54 Impairment of intangible assets Restructuring activities (1) (9) Total noninterest expenses 4,615 6,002 9,371 12,319 Income before income taxes 642 2, ,862 Income tax expense (benefit) (3) 922 (116) 1,953 Net income 645 1, ,909 Net income (loss) attributable to minority interest (4) (1) (13) 10 Net income attributable to Deutsche Bank shareholders 649 1, ,899 EARNINGS PER COMMON SHARE Three months ended Six months ended in Jun 30, 2008 Jun 30, 2007 Jun 30, 2008 Jun 30, 2007 Earnings per common share: Basic Diluted Number of shares in million: Denominator for basic earnings per share weighted-average shares outstanding Denominator for diluted earnings per share adjusted weightedaverage shares after assumed conversions

16 CONSOLIDATED STATEMENT OF RECOGNIZED INCOME AND EXPENSE (UNAUDITED) Consolidated Statement of Recognized Income and Expense (unaudited) Three months ended Six months ended in m. Jun 30, 2008 Jun 30, 2007 Jun 30, 2008 Jun 30, 2007 Net income recognized in the income statement 645 1, ,909 Net gains (losses) not recognized in the income statement, net of tax Unrealized gains (losses) on financial assets available for sale: Unrealized net gains (losses) arising during the period, before tax (1,320) 586 (3,212) 1,502 Net reclassification adjustment for realized net (gains) losses, before tax (61) (91) (744) (325) Unrealized net gains (losses) on derivatives hedging variability of cash flows: Unrealized net gains (losses) arising during the period, before tax 10 (40) 34 (50) Net reclassification adjustment for realized net (gains) losses, before tax Foreign currency translation: Unrealized net gains (losses) arising during the period, before tax 85 (48) (771) (200) Net reclassification adjustment for realized net (gains) losses, before tax 1 1 Tax on items taken directly to equity or reclassified from equity Total net gains (losses) not recognized in the income statement, net of tax (958) (4,247) 2 1,000 Total recognized income and expense (313) 2,256 (3,743) 4,909 Attributable to: Minority interest (3) (1) (11) 12 Deutsche Bank shareholders (310) 2,257 (3,732) 4,897 1 Represents the change in the balance sheet in net gains (losses) not recognized in the income statement (net of tax) between March 31, 2008 of (2,157) million and June 30, 2008 of (3,116) million, adjusted for minority interest attributable to these components of 1 million. 2 Represents the change in the balance sheet in net gains (losses) not recognized in the income statement (net of tax) between December 31, 2007 of 1,133 million and June 30, 2008 of (3,116) million, adjusted for minority interest attributable to these components of 2 million. 41

17 CONSOLIDATED BALANCE SHEET (UNAUDITED) Consolidated Balance Sheet (unaudited) ASSETS in m. Jun 30, 2008 Dec 31, 2007 Cash and due from banks 5,884 8,632 Interest-earning deposits with banks 32,878 21,615 Central bank funds sold and securities purchased under resale agreements 20,663 13,597 Securities borrowed 45,724 55,961 Financial assets at fair value through profit or loss 1,394,949 1,378,011 Financial assets available for sale 43,162 42,294 Equity method investments 3,582 3,366 Loans 215, ,892 Property and equipment 2,555 2,409 Goodwill and other intangible assets 8,871 9,383 Other assets 209, ,897 Income tax assets 7,750 7,200 Total assets 1,990,740 1,924,257 LIABILITIES AND EQUITY in m. Jun 30, 2008 Dec 31, 2007 Deposits 422, ,946 Central bank funds purchased and securities sold under repurchase agreements 163, ,741 Securities loaned 7,848 9,565 Financial liabilities at fair value through profit or loss 941, ,085 Other short-term borrowings 51,324 53,410 Other liabilities 221, ,509 Provisions 1,262 1,295 Income tax liabilities 5,347 6,639 Long-term debt 129, ,703 Trust preferred securities 9,128 6,345 Obligation to purchase common shares 3,834 3,553 Total liabilities 1,957,068 1,885,791 Common shares, no par value, nominal value of ,358 1,358 Additional paid-in capital 16,359 15,808 Retained earnings 23,578 25,116 Common shares in treasury, at cost (2,452) (2,819) Equity classified as obligation to purchase common shares (3,833) (3,552) Net gains (losses) not recognized in the income statement, net of tax Unrealized net gains on financial assets available for sale, net of applicable tax and other 144 3,635 Unrealized net gains (losses) on derivatives hedging variability of cash flows, net of tax (26) (52) Foreign currency translation, net of tax (3,234) (2,450) Total net gains (losses) not recognized in the income statement, net of tax (3,116) 1,133 Total shareholders equity 31,894 37,044 Minority interest 1,778 1,422 Total equity 33,672 38,466 Total liabilities and equity 1,990,740 1,924,257 42

18 CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) Consolidated Statement of Cash Flows (unaudited) Six months ended in m. Jun 30, 2008 Jun 30, 2007 Net income 504 3,909 Cash flows from operating activities: Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses Restructuring activities (9) Gain on sale of financial assets available for sale, equity method investments, and other (1,433) (778) Deferred income taxes, net (1,219) 187 Impairment, depreciation and other amortization, and accretion 1, Share of net income from equity method investments (78) (259) Income (loss) adjusted for noncash charges, credits and other items (448) 4,093 Adjustments for net change in operating assets and liabilities: Interest-earning time deposits with banks (6,232) 2,563 Central bank funds sold, securities purchased under resale agreements, securities borrowed 414 (17,187) Trading assets (118,091) (160,575) Other financial assets at fair value through profit or loss (excl. investing activities) 59,287 (34,564) Loans (17,064) (10,944) Other assets (34,812) (114,784) Deposits (27,246) 30,967 Trading liabilities 144, ,856 Other financial liabilities at fair value through profit or loss (excl. financing activities) 1 (38,988) 66,355 Securities loaned, central bank funds purchased, securities sold under repurchase agreements (9,625) 23,348 Other short-term borrowings (782) (154) Other liabilities 43,687 93,861 Senior long-term debt 2 5,644 11,299 Other, net 7,240 1,067 Net cash provided by operating activities 7, Cash flows from investing activities: Proceeds from: Sale of financial assets available for sale (incl. at fair value through profit or loss) 6,903 6,956 Maturities of financial assets available for sale (incl. at fair value through profit or loss) 6,192 4,202 Sale of equity method investments 361 1,005 Sale of property and equipment Purchase of: Financial assets available for sale (incl. at fair value through profit or loss) (20,755) (8,827) Equity method investments (392) (218) Property and equipment (279) (243) Net cash received for business combinations/divestitures Other, net (28) 136 Net cash provided by (used in) investing activities (7,841) 4,122 Cash flows from financing activities: Issuances of subordinated long-term debt (incl. at fair value through profit or loss) Repayments and extinguishments of subordinated long-term debt (incl. at fair value through profit or loss) (391) (1,951) Issuances of trust preferred securities (incl. at fair value through profit or loss) 3, Repayments and extinguishments of trust preferred securities (incl. at fair value through profit or loss) (457) Common shares issued under share-based compensation plans Purchases of treasury shares (13,223) (22,605) Sale of treasury shares 13,498 22,293 Dividends paid to minority interests (8) (6) Net change in minority interests Cash dividends paid (2,274) (2,005) Net cash provided by (used in) financing activities 1,572 (3,480) Net effect of exchange rate changes on cash and cash equivalents (429) (54) Net increase in cash and cash equivalents 1, Cash and cash equivalents at beginning of period 26,098 17,354 Cash and cash equivalents at end of period 27,321 18,143 Net cash provided by operating activities include Income taxes paid, net 1,576 1,695 Interest paid 26,185 27,628 Interest and dividends received 32,099 31,783 Cash and cash equivalents comprise Cash and due from banks 5,884 7,467 Interest-earning demand deposits with banks (not included: time deposits of 11,441 m. as of June 30, 2008 and 9,024 m. as of June 30, 2007) 21,437 10,676 Total 27,321 18,143 1 Included are senior long-term debt issuances of 12,992 million and 9,558 million and repayments and extinguishments of 8,862 million and 3,497 million until June 30, 2008 and 2007, respectively. 2 Included are issuances of 34,272 million and 40,266 million and repayments and extinguishments of 26,058 million and 20,495 million until June 30, 2008 and 2007, respectively. 43

19 BASIS OF PREPARATION (UNAUDITED) Basis of Preparation (unaudited) The accompanying condensed consolidated interim financial statements include Deutsche Bank AG and its subsidiaries, which are stated in Euro. They are presented in accordance with the requirements of IAS 34, Interim Financial Reporting, and have been prepared in accordance with International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ) and endorsed by the European Union ( EU ). The Group does not use the carve-out relating to hedge accounting included in IAS 39, Financial Instruments: Recognition and Measurement, as endorsed by the EU. The adoption of IFRIC 14, IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction, which is effective for annual periods beginning on or after January 1, 2008, and which has not yet been endorsed by the EU, had no impact on Deutsche Bank s interim financial statements. Deutsche Bank s condensed consolidated interim financial statements are unaudited and include supplementary disclosures on segment information, income statement and balance sheet and other financial information. They should be read in conjunction with the audited consolidated financial statements of Deutsche Bank for 2007, for which the same accounting policies have been applied, except for changes due to the adoption of IFRIC 14, as mentioned above. The preparation of financial statements under IFRS requires management to make estimates and assumptions for certain categories of assets and liabilities. Areas where this is required include the fair value of certain financial assets and liabilities, the allowance for loan losses, the impairment of goodwill, other intangibles and assets other than loans, the recognition and measurement of deferred tax assets, provisions for uncertain income tax positions, legal and regulatory contingencies, the reserves for insurance and investment contracts, reserves for pensions and similar obligations. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet date, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management s estimates and the results reported should not be regarded as necessarily indicative of results that may be expected for the entire year. 44

20 BASIS OF PREPARATION (UNAUDITED) Prior periods in these condensed consolidated interim financial statements were adjusted as described in Note [44] of Deutsche Bank s consolidated financial statements for In the second quarter 2008, retrospective adjustments were made in the income statement, balance sheet and cash flow statement with no impact on net income or on shareholder s equity. The 2008 adjustments related to the following items: Additional counterparty netting and certain reclassification items were identified which reduced total assets and total liabilities for December 31, 2006, each quarter end in 2007 and for March 31, in m. Mar 31, 2008 Dec 31, 2007 Sep 30, 2007 Jun 30, 2007 Mar 31, 2007 Dec 31, 2006 Total assets (as reported) 2,305,337 2,020,349 1,891,875 1,953,445 1,759,911 1,584,493 Adjustment 155,583 96,092 74,440 96,567 66,149 64,108 Total assets (adjusted) 2,149,754 1,924,257 1,817,435 1,856,878 1,693,762 1,520,385 Total liabilities (as reported) 2,269,303 1,981,883 1,854,244 1,916,352 1,722,970 1,551,018 Adjustment 155,583 96,092 74,440 96,567 66,149 64,108 Total liabilities (adjusted) 2,113,720 1,885,791 1,779,804 1,819,785 1,656,821 1,486,910 The presentation of interest and similar income and interest expense was adjusted with no impact on net interest income for each quarter in 2007 and the first quarter in in m. Three months ended Mar 31, 2008 Twelve months ended Dec 31, 2007 Nine months ended Sep 30, 2007 Six months ended Jun 30, 2007 Three months ended Mar 31, 2007 Interest and similar income (as reported) 16,537 67,706 51,569 34,874 16,269 Adjustment 1,188 3,031 3,044 2, Interest and similar income (adjusted) 15,349 64,675 48,525 32,596 15,781 Interest expense (as reported) 13,861 58,857 45,412 30,850 14,216 Adjustment 1,188 3,031 3,044 2, Interest expense (adjusted) 12,673 55,826 42,368 28,572 13,728 45