ecotel communication ag — Annual Report 2012

Apr 30, 2013

ecotel communication ag Prinzenallee 11

40549 DüsseldorfPhone: +49 (0) 211 55 007 - 0 Fax: +49 (0) 211 55 007 - 222 info@ecotel.dewww.ecotel.de

ecotel communication ag 2012 Annual Report Key

fi gures >>

Annual Report

Corporate pro

fi le

As a telecommunications active throughout Germany, ecotel communication ag has specialised

in three business areas.

In the core segment of Business Solutions ecotel provides about 19,000 business customers with an integrated product portfolio consisting of voice, data and mobile communications solutions. This includes nationwide available and convergent bundled products, broadband data access on the basis of DSL and Ethernet technologies, scalable networking of corporate locations (VPNs) as well as housing and hosting services.

1Corporate profi le

In the second segment, "Wholesale Solutions", the ecotel group markets preliminary service products to other telecommunications companies. At the same time, the company achieves high traffi c volumes in this segment, enhancing added value for the core segment of Business Solutions. In addition to the international wholesale voice activities of ecotel, mvneco GmbH is also included

in this segment.

The "New Business" segment covers new, fast-growing business segments and niches of independently operating subsidiaries. In addition to easybell GmbH, which is aligned to private customer business, nacamar GmbH, which now focuses exclusively on new media activities, is part of this

independent business unit.

The corporate group, with its main offi ce in Düsseldorf, currently has about 210 employees,

including subsidiaries and holdings.

• 04 ecotel introduces itself

• 16 The ecotel stock

• 35 Risk report

• 40 Outlook report

CON TEN TS		CO NSO LIDA TED FIN ANC IAL S TATE MEN T
01	Corp profi le orate	42	Cons olida ted b alan ce sh eet
02	Fore word of th t boa rd e ma nage men	44	Cons olida ted s tatem ent o f
04	el int rodu ces i tself ecot		preh ensiv e inc com ome
16	The el sto ck ecot	45	Grou h fl ow stat nt p cas eme
		46	Deve lopm ent o f Gro quity up e
CON	SOL IDAT ED M ANA GEM ENT REP ORT	48	Note s to the fi cial s tatem ent nan
18	Busi and eral cond itions ness gen		of ec otel icatio com mun n ag
31	Earn ings, fi na ncial and ets p ositio ass n	91	Audi t opi nion of th e sta tutor ditor y au
34	Supp leme ntary rt repo	92	Repo rt of the s visor y bo ard uper
35	Risk rt repo	96	Glos sary
40	Outlo ok re port	98	Fina ncial cale ndar
41	Decl arati f the lega l rep ntativ on o rese es	98	Ackn owle dgem ents

Cont ents
CON TEN TS

Amou nts in € mill ion	2010	2011	2012
Reven ue	98.3	84.5	94.3
Busin ess S olutio ns	44.8	41.6	40.8
Whole sale	38.7	30.6	40.8
New B usine ss	14.8	12.3	12.7
Gross ings earn	22.9	24.6	25.1
Busin ess S olutio ns	17.5	18.7	18.9
Whole sale	1.3	1.4	1.0
New B usine ss	4.1	4.5	5.2
EBITD A	4.9	7.1	6.8
A (adj ffects ) EBITD usted by sp ecial e	4.9	6.6	6.8
in % o f sale nue (a djuste d by s pecia l effec ts) s reve	5.0 %	7.8 %	7.2 %
EBIT	1.5	3.1	0.4
EBIT (adjus ted by ial eff ects) spec	1.5	3.2	3.5
in % o f sale nue (a djuste d by s pecia l effec ts) s reve	1.5 %	3.8 %	3.7 %
Conso lidate d profi t	0.1	1.1	– 2.6
Conso lidate d profi t (adj usted by sp ecial e ffects )	0.1	1.2	1.4
Earnin r shar e in € 1 (ad justed by sp ecial e ffects ) gs pe	0.02	0.32	0.38
Balan ce sh eet to tal	48.8	45.4	42.7
Equity capit al	20.0	21.4	19.3
in % o f the b alanc e she et tota l	41.0 %	47.1 %	45.2 %
Numb er of s hares as of 12/31 (Outs tandin g sha res)	3,752 ,500	3,752 ,500	3,685 ,096
Net d ebt	7.1	3.0	– 0.3
ultiple of EB ITDA as a m	1.5	0.4	n.a.
2 Emplo as of 12/31 yees	184	189	189

Key fi gures

1) both undiluted and diluted

2) without minority companies (synergyPLUS GmbH, mvneco GmbH)

Essen tial ca sh fl o w dat a	Amou nts in € mill ion	2010	2011	2012
Cash and c ash e quiva lents as of 01/01		7.1	6.1	6.2
Cash fl ow f ngoin g bus iness activit rom o	ies	5.3	6.3	6.8
Cash fl ow f rom in tivities vestm ent ac		– 1.8	– 1.6	– 2.7
Cash fl ow f rom fi nanci tivities ng ac		– 4.5	– 4.5	– 2.8
Cash and c ash e quiva lents as of 12/31		6.1	6.2	7.5

1				1.1
			0.1
0
- 1
-2
-3		– 2.2			– 2.6
-4
	– 4.2

Foreword of the management board

3

Dear Shareholders,

In 2012 ecotel was again able to continue the positive business development of the previous years.

The operational target fi gures were either exceeded or at least reached at the upper end. Consolidated turnover was increased from € 84.5 million to € 94.3 million, gross profi t improved from € 24.6 million to € 25.1 million and EBITDA totalled € 6.8 million following € 7.1 million last year.

The company's most important goal of completely eliminating the net debt was also successfully implemented. As of 31 December 2012 the company had net assets of € 0.3 million (previous year: € – 3.0 million).

Unfortunately, one-time special effects from depreciations burdened the earnings. During the review of the pecuniary assets in the balance sheet, write-downs had to be implemented. For one thing, the goodwill of the subsidiary nacamar, which originated in connection with the acquisition of the company in 2007, was completely written off (€ 2.9 million). For another, in the fi nancial results, the shareholders' loans of € 0.9 million to the 49 % holdings mvneco GmbH and synergyPLUS GmbH had to be written down. It must be mentioned in this connection, however, that the write-downs have no cash relevance and are for accounting purposes only. As a result of the unscheduled value adjustments the company's risk report was shortened considerably.

Without the above-mentioned special effects, adjusted EBIT would have totalled € 3.5 million, after € 3.2 million last year. Adjusted consolidated profi t would have been € 1.4 million (previous year: € 1.2 million) with adjusted earnings per share of € 0.38.

Due to the depreciations on the loans, accounting law prevents ecotel from undertaking a payment of dividends. Therefore, the management board and supervisory board have decided to continue the share buy-back program that was already initiated last year. The share buy-back program provides for the repurchase of up to 175,096 treasury shares (corresponding to 4.5 percent of the share capital) between 28 February 2013 and 31 July 2013.

In the following we would like to summarise for you the most important events from the year 2012.

In October 2012, as a supplement to the successful product area "ISDN full access," ecotel signed a cooperation agreement with Vodafone for marketing of the entire B2B mobile communications product portfolio of the Düsseldorf-based telecommunications group. A successful marketing launch will be followed by an independent mobile service with the ecotel brand. During this time ecotel will have a special position within the existing partner program – the Vodafone Business Partner Excellence status. ecotel customers will benefi t especially from the new convergence solutions in the form of free-of-charge availability of the customer-specifi c mobile cards from all ecotel full access lines.

In November 2012 the Federal Network Agency announced its preliminary rate approvals for full access and mobile termination fees. The resulting signifi cant reduction of the termination fees is an essential driving factor for potential improvement of the gross profi t in 2013.

After successful certifi cation of the ecotel computer centre in the fi rst half of the year (Datacenter Star Audit & ISO-27001), cooling of the computer centre was further optimised in the second half of the year. In this respect new redundant cooling generators were installed on the roof of the computer centre and put into operation. Besides a signifi cant reduction of the power consumption for cooling and a marked increase in energy effi ciency, the computer centre has now become more "green" and eco-friendly.

From the point of view of marketing, 2012 was the most successful year in ecotel's history. Supplementing an excellent incoming order volume in the classic B2B segment, ecotel was able to land a major contract in November 2012 with Allianz Deutschland AG for the integration of its agencies. During the currently ongoing project "Allianz Global Network" (AGN) for the digitalisation and optimisation of the information exchange between the agencies and the main offi ce, ecotel was commissioned to connect up to 10,000 agency locations with the company headquarters and to equip them with voice services in addition to the classical data services. ecotel therefore provides the entire infrastructure service for the Allianz agency network in Germany.

Management is also optimistic with respect to the company's further development and plans a signifi cant increase in B2B revenue from € 40 million in 2012 to € 50 million by 2015. For 2013 the company expects – with B2B revenue already increasing – consolidated turnover of € 80 – 90 million with EBITDA of € 6 – 7 million. The planned decrease in revenue compared with 2012 is a result of the lowering of the mobile termination fees, which were passed on 1:1 to other carriers, resulting in a corresponding reduction of revenue by more than € 10 million in the wholesale segment. In the medium term the company consistently pursues the goal of increasing revenue to € 100 million and EBITDA to € 10 million by 2015.

In conclusion we would like to thank all the employees of the ecotel Group for their work and their contribution to the success of the enterprise. We thank our customers, business partners and shareholders for the close and trustful cooperation. We are confi dent that we are well prepared and optimally positioned for the future requirements of the telecommunications market.

Left to right Bernhard Seidl, Peter Zils, Achim Theis

Achim TheisManagement board sales

Bernhard SeidlManagement board fi nances

Peter Zils

Chief Executive Offi cer

In 2012, ecotel successfully implemented the major contract for the nationwide networking of all ING-DiBa ATMs in Germany. Currently the network includes more than 1,300 ATMs.

To meet the special performance and security require ments of Germany's largest direct bank, high-performance business DSL connections were used by ecotel for the locations in the form of a virtual private network (VPN) based on highcapacity MPLS technology. Thus, the transaction data of the ATMs is processed with particular speed and security. The IP-Sec data encryption procedure ensures additional protection. As part of the VPN the bank's central computer centre was integrated with ecotel Ethernet lines including line and carrier redundancy, to particularly safeguard this central interface. The large project was rounded out with special monitoring round-the-clock, 365 days a year, and implementation of custom fi rewall and VPN components that optimally support the processes and that are hosted by ecotel.

Stefan Schimpl, who as group executive of ING-DiBa AG is responsible for the ATMs, explains the decision for ecotel: "The crucial factor for awarding the contract to ecotel was not only the overall high-capacity concept, it was also the evaluation of TÜV Rheinland, which explicitly tested the operating concept of ecotel and assessed it as 'secure'."

The new project for ING-DiBa encompasses the expansion of managed services and capacities for hosting of the "public web" ING-DiBa sites in ecotel's own computer centre, which is operated in accordance with the most stringent security standards (eco Star and ISO certifi ed) in Frankfurt / Main.

New LEO main building in Frankfurt Source: ING-DiBa press photo

ecotel modernises web farmof ING-DiBa

5

ecotel introduces itself:ALL AROUND COMMUNICATION – SUCCESS FOR YOUR BUSINESS!

in the telecom market"Peter Zils

Chief Executive Offi cer

Since 30 January 2013 ecotel can proudly look back on a 15-year company history. For me as company founder, CEO and shareholder, of course, looking back on the past 15 years is more than just a number. Who could have imagined that new fi xed line and mobile communication technologies would change our communication behaviour so quickly and have such an effect on our daily work. Especially as a provider of telecommunications solutions ecotel has had to reinvent itself many times, changing and adapting to the times. Together with my colleagues from the management board, executives and employees we have succeeded in making ecotel a profi table enterprise with attractive perspectives for the future. We are especially pleased that ecotel has developed to become a permanent fi xture in the telecommunications market and that more and more renowned and large-scale companies place their confi dence in us for the implementation of complex projects with extensive IT requirements.

Therefore, I would like to take this opportunity to thank you, our customers, partners and shareholders for your confi dence. At the same time I would like to affi rm that we will continue in the future to do everything to meet your high requirements.

On the basis of many years of successful cooperation in the integration of agency locations, ecotel can now signifi cantly expand the partnership with Allianz Deutschland AG. During the currently ongoing project "Allianz Global Network" (AGN) for the digitalisation and optimisation of the information exchange between the agencies and the main offi ce, ecotel was commissioned to provide up to 10,000 agency locations with voice and data services in Germany.

To meet the extensive performance and security requirements, Allianz relies on high-performance business DSL, Ethernet and LTE connections via a virtual private network (VPN) with MPLS technology from ecotel. This enables the fast and secure exchange of information between the agencies and the main offi ce, especially for the future use of cloud services. For additional data security a modern

ecotel receives new major contract from Allianz Deutschland AG

Dr. Andreas NolteCIO Allianz Deutschland AG 7

"The crucial factor for awarding the contract to ecotel was not only the overall high-capacity concept, it was also the high level of fl exibility and customer orientation, from the activation phase through operation and all the way to billing. This overall concept convinced us. Another important factor affecting the decision is the 'multi-carrier strategy' including network interconnection with the relevant carriers and therefore the maximum availability of broadband access lines for our agencies in Germany."

"The expansion of our partnership cooperation with Allianz is an important indicator for us that we have done our homework in the past years. With our current product portfolio, our multi-supplier strategy and our and our customer-oriented services we are well equipped to successfully meet the growing demands of our customers, also in the area of data services. This has also been rewarded with the new major contract from Allianz Deutschland AG. While many fi rms are currently occupied with the introduction of cloud services, we have specialised in providing the necessary 'race tracks' for this development, as well professional management of the infrastructure."

Achim TheisManagement board sales ecotel

IP-Sec and Web-Proxy platform will be set up and operated in the ecotel computer centre. The project is rounded out by the use of individual fi rewall and VPN components, as well as an interactive roundthe-clock monitoring service. ecotel therefore provides the entire infrastructure service for the agency network in Germany.

In addition to accommodation in the ecotel computer centre the customer also relies on ecotel for fi xed line telephony with its primary multiplex (PMX) connection. The extensive ecotel service bundle is completed by the high-speed fi bre optic Ethernet connection for the Düsseldorf location. The advantage of this solution is in the easy scalability of the bandwidth, which readily allows fl exible adaptation to the changing data volume and the requirements of the location.

As a global provider of leading solutions in the areas of digital marketing, data management and analysis services Experian Marketing Services helps marketing managers to increase the return on investment through carefully targeted communication. The spectrum of services ranges from e-mail and social media marketing to consumer segmenting and target group analyses, as well as comprehensive consulting services. The successful business model is based on extensive databases with very large quantities of sensitive data. This also applies to the parent company Experian, which provides customers in more than 90 countries with information services and data and analysis tools for assessing credit risks and prevention of fraudulent activities.

In general, maximum security is necessary for the external storage of customer data. For Experian Marketing Services, as an internationally leading provider, both data security and a fail-safe system are essential. That is why the company has trusted ecotel's certifi ed computer centre for the accommodation and the management of its IT systems for several years already. Meanwhile, ecotel has numerous extended rack systems for this purpose and additional racks will be successively put into operation in the coming months.

ecotel computer centre

is the foundation for leading e-mail marketing provider Experian Marketing Services

An important requirement for external data storage with ecotel was the computer centre's modern infrastructure with innovative rack technology, the reli able fi re alarm and extinguishing system, the constant monitoring of redundant power and air conditioning systems and the secure access system. Decisive factors for the high performance of the Experian Marketing Services platform include not only the fast, redundant Gbit/s connection to the ecotel computer centre but also the direct network connection to other major Internet providers and to the DE-CIX, which is currently Europe's largest data exchange point. Additional security is provided by the active Network Operation Center (NOC) with a comprehensive ticketing and monitoring system and full-time system monitoring, 24 hours a day, 365 days a year.

Olivier Mansard, Head of Marketing Services Experian Deutschland GmbH, summarises the advantages of the cooperation with ecotel: "We value ecotel for the high level of fl exibility and fast response to our special requirements. For example, a dedicated 10 Gbit/s connection was set up for our infrastructure within a very short time frame. The cooperative partnership between ourselves and the technicians at the computer centre in Frankfurt functions very smoothly. The active exchange of information keeps us up to date on the next planning steps at all times. And ecotel's high fl exibility concerning the number of required racks and bandwidth speed gives us the necessary planning security for our future corporate growth."

9

Olivier MansardHead of Marketing Services Experian Deutschland GmbH

As a subsidiary of ecotel communication ag the Berlin-based company easybell markets high-quality and attractively priced Internet and telephone access throughout Germany. Within the companies of the ecotel Group, easybell GmbH is the most important pillar in the private customer sector. Originally started as a call-by-call provider in 2006, the business segments Broadband via DSL and Voiceover-IP were developed successively. Through inno vative products at reasonable prices easybell has developed within a few years from a startup to become an established player in the broadband market, setting new standards for products and prices. Last year, the fi rst Allnet fl at rate in the fi xed line sector was introduced with "Complete allnet". Furthermore, with its VDSL connections, easybell was the fi rst provider to undercut the price of € 25 per month. In the important price portals and trade magazines, easybell leads in the rate comparisons.

The main product lines are TAL full access and telephony solutions via Voice over IP. easybell provides only adaptive rate ADSL2+ and VDSL2 connections. The company cooperates closely with the upstream supplier Telefónica Deutschland, which means that easybell is available nationwide. In 2012 the fi rst cooperation with Vitroconnect was started at the regional level.

The Voice over IP products were completely repositioned technologically in 2012. A new Class V platform is among the technologically most advanced in Germany. The new technology offers a high level of fl exibility, together with high reliability and low costs. New products can be launched quickly and

easybell: Low-priced, competent and customer-friendly

the high scalability makes it possible to integrate other carriers and major business customers via the subsidiary init.voice.

easybell focuses on customer satisfaction through transparent products with fair contract conditions and short contract terms. This has achieved an independent customer base that remains loyal to the company longer on average than would have been the case with long contract terms. Also, customers recommend easybell in Internet forums and in personal contacts as a competent and friendly partner. The foundation for this is the excellent customer service, which was awarded fi rst place in the area of mail support in a test of 15 broadband providers conducted by the German Institute for Service Quality last year.

easybell responds to the modern habits of its customers by expanding the range of classic fi xed line services: IP-based telephone systems can be used worldwide, for example on smartphones with the in-house developed easybell app or other web-capable end devices such as VoIP routers or IP phones. The access data for the systems is available to the individual customers and can therefore be used simultaneously on many end devices. The service is supplemented with innovative features, such as Fax2Mail, Voice2Mail and a high-quality online connection management system.

In addition, easybell GmbH also offers classic callby-call and Internet-by-call as well as CLS access. Since several years the company is among the market leaders in the call-by-call and Internet-bycall sector.

2012 was a year of rapid growth for easybell. The number of installed TAL full access lines increased by eight times in fi nancial year 2012. This was achieved in an intensively competitive market environment, in which many DSL providers can at best minimise the loss of customers due to the competitive pressure from the cable providers.

The high growth was fi nanced exclusively from the operative cash fl ow. This was enabled through consistent automation of all business processes so that easybell works with extremely competitive process costs. In the purchase of preliminary services easybell benefi ts from synergies within the ecotel Group.

In addition, easybell was able to keep customer acquisition costs low through intelligent price and marketing strategies. Thanks to a consistent focus on recommendation marketing the image has been boosted continuously by the increasing number of customers, without a signifi cant increase in marketing costs.

easybell will continue to pursue the course of growth. Other technical innovations and entirely new product lines will open up additional customer groups and increase the intensity of utilisation by existing customers. easybell has become a permanent part of the German telecommunications landscape.

Since the beginning of streaming, the ecotel subsidiary nacamar GmbH has continuously supported content providers and TV broadcasters in adapting to the consumer behaviour of viewers, and for more than 15 years, has reliably provided the suitable technology for its customers. Due to the change in end device technology from the television screen through PC and mobile all the way to the modern Internet-capable smart TV on the one hand and user behaviour toward "TV everywhere", the require ments placed on nacamar have changed, so that the ecotel subsidiary has developed over the years from a mere streaming provider to a new media full service provider. Video content is prepared and played by nacamar for all standard end devices; the necessary websites and applications are hosted by nacamar and, if required by the customer, even programmed and operated. Advertising integration, personal recommendations, an extensive statistics portal and round-the-clock service for the customers round out the current spectrum of services.

The affi liation with ecotel communication ag means that nacamar can build on an outstanding infrastructure in the computer centre of the consolidation parent and offer its customers optimal Internet access, high reliability and fi rst-class service. The ecotel Network Operation Center is also available to nacamar customers 24 hours a day for support and reporting of disruptions in service.

But how do TV broadcasters and content providers position themselves as the main target group of nacamar today? The new media offer many advantages for small and mid-sized providers, but also have the disadvantage that the video content on Internet-capable end devices is becoming ever more extensive and complex.

Multimedia user-oriented television through multiscreen playout, apps and additional services from nacamar

The regional broadcaster center.tv Münster is a customer of nacamar and cleverly uses the entire pallet of services offered by the Düsseldorf-based streaming specialist for the cost-effective presentation of its programs on all end devices. In addition to the normal TV program received regionally via NRW cable providers, TV consumers can now view news and current events from the Münster region anywhere in the world and from all end devices. The only requirement is standard Internet access with a bandwidth of 2 MBit/s. This allows center.tv Münster to distribute a live channel and a media library with selected programs to its viewers. Core products offered by nacamar for this purpose are medianac®, an online video platform where center. tv Münster stores all video content in the respective categories and which can be converted to different streaming formats, and onteve®, the platform for multiscreen playout, apps and additional services. The medianac converts the stored videos to all required formats for output on a smartphone, smart TV, etc. via the onteve apps. The 24-hour program, known as the live stream, is also received by nacamar in the ecotel computer centre, where it is again converted into different formats.

On the Internet-capable televisions and set-top boxes of manufacturers such as Samsung, Philips, Videoweb, TechniSat, etc., via app stores that are similar to a smartphone user interface, it is possible to install and use the center.tv Münster application designed by nacamar especially for the broadcaster. The different categories allow the viewer to use the smart TV app to select whatever content he would like to view.

The ecotel stock

ecotel stock has been listed on the Frankfurt Stock Exchange since 29 March 2006. On 6 August 2007 it moved from Entry Standard to Prime Standard. The capital stock is 3,900,000 shares, of which the company holds 214,904 treasury shares. Thus, as of 12/31/2012 there were 3,685,096 shares outstanding.

Price trend 2012

In 2012 the stock market was characterised by a signifi cant improvement in the share prices. The major indexes reported signifi cant profi ts over the course of the year. The DAX as the representative of the large-cap companies improved 25 % in 2012, and the TecDax 18 % by the end of 2012.

The ecotel stock was not fully able to keep up with this growth. It opened the year at € 4.7. After the price of the ecotel share climbed as high as € 5.5 in the 2nd quarter, it evened out during the course of the year at € 5.0 and closed the year at € 5.1. Overall the price of the ecotel share rose by 8 % in 2012.

Average daily trading of the stock in 2012 was 2,631 shares per day compared with 2,050 shares per day in the previous year. At year end ecotel showed market capitalisation of € 18.8 million, at a share price of € 5.1 and 3,685,096 outstanding shares.

Investor relations

In 2012 there was an intensive dialogue with investors, analysts and journalists to develop the trading volume of the ecotel stock and to boost the company's image. Research of the ecotel stock was conducted as in the past by analysts of the DZ Bank and WGZ Bank. In addition ecotel presented the company at investor exhibitions in 2012, such as the Equity Forum. Again, IR measures, such as participating in the spring conference of the Deutsche Börse Group, are planned for 2013 to extend the contact to new interested investors.

The ecotel stock

Key fi gures Ø 2012

Price trend of the ecotel stock in 2012 in percent and €

Shareholdings (12/31/2012) in percent Current information on the company, such as quarterly reports, press releases and a fi nancial calendar, as well as analyst presentations can be accessed on the company website under "Investor Relations" immediately after they are published.

WKN	58543 4	of fi rs Date t listi ng	03/29 /2006
		Numb er of share s
ISIN	DE00 05854 343	as of 12/31 /2012	3,685 ,096
Symb ol	E4C	ge da ily Avera tradin g volu me 20 12	2,631
		High share (€) price 2012	5.48
Marke t segm ent starti ng 08 /08/2	Prime dard 007 Stan	hare p rice 2 012 (€ ) Low s	4.31
Index affi lia tion	e All S hare CDAX , Prim Techn ology All S hare	Marke italisa t cap tion as of 12/31 /2012 (€ m illion) *	18.8
Class	ar val ue sh Non p ares	Close nated Desig spon sor	Broth ydler ers Se Bank AG

Shareholder structure

In 2012 there was no signifi cant change in ecotel's shareholder structure. The company's major shareholders are Peter Zils (CEO of ecotel) with a share of 25.6 %, Intellect Investment & Management Ltd. with a share of 25.1 %, IQ Martrade Holding und Managementgesellschaft mbH with a share of 14.6 % and Private Value Media AG with a share of 9.3 % of the company's stock.

In 2012 ecotel implemented a share buy-back program. From 25 May to 30 September 2012 ecotel purchased a total of 67,404 treasury shares at an average price of € 4.9. The number of redeemed shares corresponds to 1.73 % of the company's share capital. Therefore, ecotel owned 214,904 treasury shares at the end of 2012, which corresponds to 5.51 % of the company's share capital. The diversifi ed holdings were therefore reduced from 21.6 % to 19.9 %.

Business and general conditions

product areas already contribute more than 75 % to the B2B business customer revenue.

Depending on the target group, sales in the Business Solutions division are made via direct sales or partner sales with a total of 400 active sales partners. Thus, ecotel has broad access to its target group of small and medium-sized business customers. In addition, ecotel has established itself as a successful partner in its collaboration with more than 100 buying associations and buying and marketing groups.

In the Business Solutions area the company supplies about 19,000 small and medium-sized companies with annual sales of € 40 million, from all industries with standardised and custom telecommunications solutions.

1. ECOTEL – OVERVIEW

The ecotel Group ("hereinafter ecotel"), is a telecommunications company that has been active throughout Germany since 1998, that specialise in meeting the requirements of business customers. ecotel markets products and services via three divisions: "Business Solutions", "Wholesale Solutions" and "New Business".

Business Solutions

In its core division, "Business Solutions", ecotel offers small and medium-sized enterprises, as well as large-scale customers throughout Germany an integrated product portfolio of voice, data and mobile services from a single source.

In the area of voice services ecotel has a complete portfolio of connection, telephony and valueadded services. The data products offered extend from data connections such as ADSL, SDSL, VDSL and Ethernet to secure enterprise networking via VPN, as well as housing of server farms and hosting of shared services (software as a service,

Wholesale Solutions

In the "Wholesale Solutions" division ecotel integrates the offerings for other telecommunications companies. In addition, the company is active in cross-network trading of telephone minutes (wholesale) for national and international carriers; for this purpose, ecotel maintains network interconnections with approximately 100 international carriers. ecotel also handles a portion of its business customers' national and international telephone calls via the wholesale business. The mvneco GmbH holding, as a technical service provider and enabler for mobile communications, is assigned to the wholesale segment.

New Business

The new high growth business segments of ecotel are combined in the "New Business" division. These include nacamar GmbH with its streaming business for media companies, as well as easybell GmbH with the private customer business.

cloud computing). In addition, ecotel also markets mobile communications products and offers business customers combined fi xed line and mobile communication products.

Over the last six years ecotel has practically reinvented itself, and the "revenue mix" of the Business Solutions segment has changed considerably. In 2006, ecotel still achieved approx. 94 % of business customer sales with pure preselect voice services. Meanwhile, preselection constitutes only 21 % of the Business Solutions revenue. Due to systematic product changes and high cancellation rates, the share of preselection in revenue will continue to decrease in the future.

On the other hand the new product areas were able to signifi cantly extend their shares of total sales. In addition to ecotel full access lines, the data and VPN revenues, in particular, developed positively. With full access lines (43 %), data services (25 %), housing / hosting services (8 %), as well as mobile communications (3 %), promising and sustainable

Remuneration of executive bodies

Infrastructure

also be appointed. The supervisory board appoints management board members for a maximum term of fi ve years. A repeat appointment or extension of the term of offi ce is permitted for a maximum of fi ve years. The supervisory board can the revoke the appointment as member of the management board and the appointment as chairman of the board on cogent grounds. According to the articles of association of the company the supervisory board issues rules of procedure for the management board. This has been done by the supervisory board. variable remuneration claims of € 0 thousand (previous year: € 110 thousand). ecotel has also taken out a directors and offi cers insurance policy (D&O insurance) with an appropriate deductible for members of the management board. In addition, each of the three members of the management board is entitled to a company car. The Company's share option program, in which two members of the management board participated, was discontinued in 2012.

ecotel does not operate its own access network, but rather procures the TC call origination services from various upstream suppliers and can therefore select the operator with the best price / performance ratio. Deutsche Telekom (DTAG), Vodafone, Versatel, Telefonica, QSC and E-Plus can be cited as typical upstream suppliers. For ecotel the majority of the cost basis is variable due to customer-related purchase of the call origination service.

ecotel has its own computer centre on the campus of Europe's largest Internet node in Frankfurt a.M. and maintains its own central voice and data backbone network to ensure optimal network interconnection with all major global carriers.

According to section 6, paragraph 1 of the company statutes ecotel is legally represented by two management board members or by one management board member together with one authorised signatory. In exercise of its authority, the supervisory board resolved on 10/10/2012 that each management board member will represent the company together with one other management board member or authorised signatory. Currently the management board of the company is comprised of Mr. Peter Zils (CEO), Mr. Bernhard Seidl (CFO) and Mr. Achim Theis (CSO). Mr. Wilfried Kallenberg (CTO / COO) was granted overall power of representation, which was entered in the trade register on 11/29/2012. Members of the supervisory board receive a fi xed and a variable annual remuneration. For fi nancial year 2012 the supervisory board is not entitled to variable remuneration. In addition ecotel has also taken out a directors and offi cers insurance policy (D&O insurance) with an appropriate deductible for members of the supervisory board. The total remuneration of the executive bodies, as well as the individual remuneration of the members of the management board and advisory board are listed in the notes to the consolidated fi nancial statement (comment [29], "Executive body remuneration").

For the new media business the Group maintains its own content delivery network (CDN). mvneco GmbH operates a central mobile communications platform.

On the IT side, ecotel operates its own systems for order management and billing.

2. LEGAL FRAMEWORK OF THE COMPANY

The voting shares issued by ecotel communication ag are approved on the regulated market of the Frankfurt Stock Exchange (sub-segment Prime Standard). The regulated market of the Frankfurt Stock Exchange is an organised market as defi ned in § 2, para. 7 of the German Securities Acquisition and Takeover Act (WpÜG).

Management body

The members of the management board of ecotel are remunerated on the basis of § 87 of the German Stock Corporation Act (AktG) and Management Board Remuneration Act (VorstAG); remuneration includes a fi xed annual base compensation, as well as a variable component. The target requirements (e.g. incoming orders, EBITDA, earnings per share, net debt) for the variable component are defi ned annually by the supervisory board. Payment of the variable portion is coupled with sustainable Company development over three years and occurs only in the amount of the portion that has already been verifi ably earned at this point in time. For fi nancial year 2012 the management board is entitled to Every change to the articles of association in accordance with § 179 requires a resolution of the Annual General Meeting. Exceptions to the above are changes in the articles of association that only affect their wording; for such changes the supervisory board is authorised. If mandatory statutory regulations specify nothing to the contrary in the specifi c case, shareholders' resolutions are made with a simple majority of votes cast and, if the law prescribes a capital majority in addition to majority of votes, with the simple majority of the capital stock as represented for the resolution.

The legal management and representative body of ecotel communication ag is the management board of the company. In accordance with § 5 of the articles of association of the company, the management board consists of at least two persons. In all other aspects the supervisory board determines the number of members of the management board. The supervisory board can appoint a chairman of the management board as well as a deputy chairman of the management board. Deputy members of the management board can

Changes in the articles of association

Capital structure

Share capital

The company's capital stock totals € 3,900,000.00. The capital is divided into 3,900,000 ordinary shares payable to the bearer. The shares are issued as no-par value shares with a proportional amount of the capital stock of € 1.00. The capital stock of € 3,900,000.00 is completely paid in. Each no-par value share grants one vote in the Annual General Meeting. Voting right restrictions do not exist. As of 12/31/2012, ecotel held 214,904 treasury shares, which corresponds to 5.51 % of the company's share capital. Therefore, the issued capital in the balance sheet totals € 3,685,096. Different voting rights relative to the shares do not exist. The Company's management board is not aware of any restrictions that affect voting rights or transfer of shares, as can occur, for example, due to agreements between shareholders.

Authorised capital

With the shareholders' resolution of 27 July 2012 the management board of the company is authorised with the consent of the supervisory board to increase the capital stock one time or multiple times by a total of up to € 1,950,000.00 against cash and / or investments in kind through the issue of new no-par value bearer shares, until 26 July 2017. The number of shares must increase in the same ratio as the capital stock increases. In the 2012 business year the management board did not avail itself of this authorisation.

Conditional capital

With the resolution of the Annual General Meeting of 27 July 2012 the existing Conditional Capital I and II totalling as much as € 1,500,000 and € 150,000 respectively was completely cancelled.

In addition, the Annual General Meeting of 27 July 2012 resolved a new conditional increase of the capital stock by up to € 1,500,000 through issuing up to 1,500,000 no-par value bearer shares (conditional capital I). In accordance with the convertible bond conditions, the conditional increase in capital serves the sole purpose of enabling the company to issue shares to the holders of options and / or convertible bonds through 26 July 2017, based on the authorisation of the Annual General Meeting held on 27 July 2012. The conditional increase in capital will be carried out only if the holders of convertible bonds or options to exercise their conversion or option rights or the holders of the convertible bonds obligated to conversion fulfi l their obligation and if no other forms of fulfi lment are made available for exercising these rights. In the 2012 business year the management board did not avail itself of this authorisation.

Authorization to acquire treasury shares

With the resolution of 30 July 2010, the Annual General Meeting authorised the company to acquire treasury shares up to a total of 10 % of the capital stock existing at the time the resolution was passed. The authorisation may not be used by the company for the purpose of trading in treasury shares. In combination with the other shares owned by the company or shares that are allocated to the company in accordance with § 71a ff. of the German Stock Corporation Act (AktG), at no point in time may the acquired shares amount to more than 10 % of the capital stock. The authorisation to acquire treasury shares is valid until 29 July 2015. In fi nancial year 2012, during the period between 25 May and 30 September 2012 the company acquired a total of 67,404 shares of ecotel communication ag at an average price of € 4.9481. The acquisition of the non par value shares was executed in accordance with the ad-hoc report of 23 May 2012 through the stock exchange by the credit institute commissioned by ecotel communication ag. The number of redeemed shares corresponded to 1.73 % of the share capital of ecotel communication ag. As of 31 December 2012, ecotel therefore owned 214,904 treasury shares, which corresponds to 5.51 % of the company's share capital.

Capital holdings and control rights

The table below shows the names of the shareholders, who owned more than 3 % of the capital stock at the end of 2012. Different voting rights relative to the shares do not exist.

There are no owners of shares with special rights that grant control authority. There is no voting right control for the case that employees hold Company shares and do not directly exercise their control rights.

Effects of potential takeover bids

Loans from individual banks are granted on the basis that the stake in ecotel held by Mr. Peter Zils does not fall below a share of 25 % plus a vote of the capital stock during the entire term of the loan contract, or is not wholly given up. Moreover, the direct or indirect ecotel stake in nacamar GmbH must not fall below a share of 75 % of the capital stock. Additional agreements between ecotel and other persons who could be affected by a change of control as a result of a takeover bid, do not exist. For the members of the ecotel management board there are no agreements that foresee compensation in the event of a takeover.

In the event of a change of control at ecotel communication ag or ecotel private GmbH, the second shareholder of easybell GmbH, Consultist GmbH, has the right to acquire up to a 51 % investment in easybell GmbH from ecotel communication ag or ecotel private GmbH. The purchase prices must correspond to the market value of the partial investment.

Sha reho lder	Hold ing o f sha res ( in % )
Pete r Zils	25.6 4 %
nt & Intel lect Inve stme Man ent L td. agem	25.0 9 %
IQ M de H oldin d artra g un Man ent g esel lscha ft mb H agem	14.5 6 %
PVM Priv ate V alue s Me dia A G	9.31 %
Trea sha sury res	5.51 %
Tota l	80.1 1 %

own computer centre with connection to all important national and international networks. nacamar GmbH is headquartered in Düsseldorf and in 2012 employed an average of 16 employees (previous year: 17 employees).

ecotel private GmbH

ecotel private GmbH is a 100 percent subsidiary of ecotel. The company was founded in 2003 and sells voice services to private customers. ecotel private GmbH is headquartered in Düsseldorf. ecotel private GmbH holds 51 % of the shares of easybell GmbH.

easybell GmbH

easybell GmbH is headquartered in Berlin and in 2012, with its subsidiaries, employed an average of 14 full-time employees (previous year: 12 employees). The company offers innovative and aggressively-priced telecommunications products to private customers. Presently easybell GmbH is active in the areas of fi xed-line connections, voice and DSL. Sales are primarily executed via telecommunications price portals. In addition, the enterprise holds 100 % of the shares of Sparcall GmbH, which markets the call-by-call number "01028", and 100 % of the shares of carrier-services.de GmbH, which offers the call-by-call numbers "010010" and "01041" (Tellina). In November 2011, init.voice GmbH, was founded with headquarters in Berlin for execution of the voice over IP services, in which easybell in turn holds 100 % of the shares.

Structure and holdings of ecotel

3. STRUCTURE AND HOLDINGSOF THE COMPANY

As parent company ecotel communication ag is headquartered in Düsseldorf. In 2012 the company employed 159 staff members, including the management board and trainees without its subsidiaries; this was 1 less employee than the average for 2011.

The subsidiaries of ecotel communication ag are located in Germany and in 2012, including managing directors and interns employed an average of 54 employees (compared with 54 employees at the end of 2011).

nacamar GmbH

nacamar GmbH was originally founded in 1995. The company traded under the name World Online, and later as Tiscali Business GmbH. After ecotel acquired 100 % ownership of the company in 2007 and merged the company's B2B business into the parent company in 2009, nacamar now trades as an autonomous service provider in the new media business and offers companies in the media industry a broad-based offering of media applications. These include processing as well as streaming of audio and video content for a wide variety of end devices, management of media libraries for companies, as well as autonomous advertising marketing. nacamar operates its own content delivery network (CDN), as well as the largest German radio streaming platform (freestream) in the Group's

mvneco GmbH

Together with other consortium partners ecotel founded mvneco GmbH in April 2007 with headquarters in Düsseldorf. ecotel holds 48.7 % of the company's shares. In 2012, mvneco GmbH employed 15 full-time employees on average (previous year: 13 employees). The company functions as a technical service provider and, as a mobile virtual network enabler (MVNE), enables entry into the mobile communications market for other telecommunications companies, such as ecotel communication ag. In this regard the technical platform of mvneco GmbH is connected to the switching network of a mobile communications network operator (e.g. E-Plus), which makes it possible for the company to offer its own mobile communications services.

synergyPLUS GmbH

synergyPLUS GmbH, in Rathenow, was founded in February 2009. synergyPLUS GmbH acts as the exclusive sales partner of ecotel and in particular markets the new full access products in conjunction with the supplementing ecotel mobile services as a convergence product via telesales and trade representatives. The telesales and trade representative concept makes it possible to keep fi xed costs low and simultaneously have access to a sales organisation that can be directly controlled. In 2012, synergyPLUS GmbH employed 9 full-time employees on average (previous year: 12 employees). ecotel holds 49 % of the company's shares.

Mediagate Participations S.à.r.l.

On 23 May 2012 ecotel communication ag acquired a capital share of 20.27 % in the newly founded Mediagate Participations S.à.r.l. with its main offi ce in Mamer (Luxembourg) through a contribution in cash of € 4 thousand. The purpose of the company is the acquisition and transaction of new media business in Luxembourg. In 2012, no business was transacted via Mediagate.

4. CORPORATE MANAGEMENT OF THE GROUP

ecotel manages the three business units in accordance with the overall strategic alignment of the Group. There is overall budget planning, into which the annual budgets of the business areas, as well as the Group companies fl ow. Planning is on the product level in accordance with the cost-driver process. In this process direct variable costs are allocated to the earnings types per product and a gross margin is determined for each product. Product-overlapping direct costs, as well as personnel costs are planned separately. Reporting during the year occurs monthly on the sales, earnings, and cash fl ow level per area with detailed analysis of the deviations relative to planning and the previous year, as well as a regularly updated forecast for the end of the fi nancial year. In addition there is continuous monitoring of liquidity and working capital. Area-specifi c key indicators (e.g. minute volume, price per minute, purchasing margin, quantity structures) that are mapped in a reporting system, are used for control.

5. RESEARCH AND DEVELOPMENT

The capitalised development expenses in 2012 totalled € 46 thousand (previous year: € 174 thousand). They relate essentially to an in-house software development for the new availability query.

6. MARKET AND COMPETITIVE ENVIRONMENT

According to the German Statistical Offi ce (Statistisches Bundesamt), economic growth in 2012 was only 0.7 % – after growth of 3.0 % in the previous year. The most important growth factor was the export trade. For 2013, economists agree that the German economy will experience less growth than in the previous year. The forecasts are within a range of 0.3 to just under 1.0 %.

Telecommunications market volumedropped again in 2012

In 2012 the total market for telecommunications services (including cable networks) in Germany declined slightly from € 60.2 billion to € 60.1 billion (source: VATM-Marktanalyse 2012, p. 5). Due to growth in the broadband cable network, the proportion of alternative competitors on the total market increased from 59 % to 62 %.

The fi xed-line market, consisting of access, voice and data services with external sales of € 30.9 billionrepresented 51 % of the total market for tele commu nication services.

Mobile communications revenue increased slightly from € 24.6 billion to € 24.8 billion as a result of increased data traffi c. At the end of 2012 the number of activated SIM cards was approx. 115 million, which was slightly above the previous year's fi gure. Meanwhile, M2M SIM cards make up about 3 % of the total.

In the meantime the alternative competitors in the fi xed-line sector have switched more than 15 million of their own telephone connections (including voice access via cable TV networks) and thus with 38 million telephone connections have a market share of more than 40 % (source: VATM-Marktanalyse 2012, p. 11). While the number of classic full-access lines is currently decreasing, signifi cant growth is observed for unbundled voice over IP connections and for cable TV full access lines.

At the end of 2012 there were more than 28 million broadband access lines in Germany, compared with 27 million broadband access lines at the end of 2011. In this regard 9 million connections (33 %) were for unbundled subscriber access, 2 million connections (6 %) were for resale DSL / wholesale DSL / IP bit stream, 13 million connections (45 %) for DTAG and 4 million connections (15 %) for cable TV. 0.3 million households (1 %) have now been connected via a broadband optical fi bre access. DTAG's competitors have a market share of 55 % (source: VATM-Marktanalyse 2012, p. 13).

The share of competitors to DTAG in the traffi c volume for voice services is approximately 59 % of the total traffi c volume in the German fi xed line market. The percentage of voice connection minutes via full access lines of the total volume of fi xed-line minutes that are realised by the competitors is more than 87 %. However, the call-by-call and preselection volumes (IXC prefi x from the DTAG network) are stabilising (source: VATM Market Analysis 2012, p. 10).

Trends in the B2B market

Similar to the situation in the previous year, in the business customer segment (B2B) in Germany the revenue trend declined, essentially driven by the continuing high intensity of competition. In addition the traditional voice technology is increasingly being replaced by Voice-over-IP solutions.

Important TC trends for the future in the Business Customers segment are the continuous extension of broadband Internet accesses, both via fi xed-line (fi bre optics, vectoring), as well as via mobile communications (LTE, HSPA+), the shift of telephone systems into the network (hosted PBX / IP Centrex), as well as the strong convergence of telecommunications and IT.

A signifi cant current IT trend is "cloud computing" with its different forms: infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS). Essentially this involves the shifting of local computing services (hardware) and application programs (software), as well as data storage (content) into central and high-performance secure computer centres of an IT / telecom provider, accessed by the user via secure broadband connections.

Other important IT / telecom trends (source: Deloitte: telecommunications services of the future):

• eHealth / telemedicine
• Mobile payment / contactless payment
• Smart energy / intelligent power systems
• Connected car
• Cloud media / universal availability of content

Regulatory trends

As a telecommunications company, ecotel is subject to oversight by the German Federal Network Agency for Electricity, Gas, Telecommunication, Post, and Railroad (BNetzA). The BNetzA promotes the liberalisation and the opening of the market in the telecommunications sector.

Important current topics are:

– Challenge of full-coverage expansion with modern high-performance networks in the fi xed line and mobile sector, including improved conditions for competition-conformant infrastructure investments

– Discrimination-free regulation of broadband connection of the feeder distribution interfaces (vectoring)

– Assurance of a full-coverage basic supply of the same type of telecommunications services (universal services) in urban and rural areas, including broadband connections, at affordable prices

– Network neutrality (i.e. equal and unchanged transmission of data packets through carriers, regardless of where these packets come from, or which applications have generated these packets)

– Modernisation of the existing data protection regulations

7. BUSINESS DEVELOPMENT 2012

A brief overview of the most important events in the ecotel fi nancial year 2012 is provided below.

Signing of the primary contract with Allianz

Further expansion of business with ING-DiBa

In April 2012 ecotel received another major contract from ING-DiBa for the implementation, housing and managed service of the ING-DiBa web farm.

Conclusion of a B2B mobile communication marketing contract with Vodafone

In November 2012 Allianz signed the main contract with ecotel for connection of its agencies. During the current project "Allianz Global Network" (AGN) for the digitalisation and optimisation of the information exchange between the agencies and the main offi ce, ecotel connects up to 10,000 agency locations with the company headquarters and provides them with voice and data services. To meet the extensive performance and security requirements of the group, high-performance business DSL, Ethernet and LTE connections are used via a virtual private network (VPN) with MPLS technology. This enables the fast and secure exchange of information between the agencies and the main offi ce, especially for the future use of cloud services. For additional data security a modern IP-Sec and Web-Proxy platform will be set up and operated in the ecotel computer centre. The large-scale project is rounded out by a managed router service and a round-theclock interactive monitoring service. ecotel therefore provides the entire infrastructure service for the agency network in Germany. launch will be followed by an independent mobile service with the ecotel brand.Successful marketing of data products In 2012 ecotel was able to continue its success in the marketing of its data products. Among other things 150 new broadband Ethernet lines and 300 SHDSL lines were marketed in 2012. Improvement of the cost basis through lower termination fees in 2013 In November 2012 the Federal Network Agency announced its preliminary rate approvals for full access and mobile termination fees. The resulting signifi cant reduction of the termination fees is an essential driving factor for ecotel for potential improvement of the gross profi t in 2013. Successful implementation of the availability query

branding; order processing is also conducted with the Vodafone rate names and forms. A special ecotel characteristic is the free-of-charge availa bility of the customer-specifi c Vodafone mobile cards from ecotel full access lines. A successful marketing

In October 2012 ecotel signed a cooperation agreement with Vodafone for marketing of the entire B2B mobile communications product portfolio of the Düsseldorf-based telecommunications group, as a supplement to the successful product segment "ISDN full access lines". In the initial marketing phase ecotel acts as a negotiator of rates using the Vodafone Modernisation of the computer centre After successful certifi cation of the ecotel computer centre in the fi rst half of the year (Datacenter Star Audit & ISO-27001), cooling of the computer centre was further optimised in the second half of the year. In this respect, new cooling generators were

To test the availability of all ecotel products that are available at a customer location, from fi xed line ISDN full access to all DSL variants and Ethernet fi xed access, the new web-based availability query makes it possible since autumn 2012 to combine the interfaces of different upstream providers in one tool. Within seconds, one query provides the best result for a customer location from all providers and product alternatives, together with the corresponding bandwidths.

1. EARNINGS AND PERFORMANCE

In 2012 the Group achieved revenue of € 94.3 million (previous year: € 84.5 million). The increase in revenue of 12 % is due essentially to developments in Wholesale Solutions. Gross profi t (sales revenue minus cost of materials) increased relative to the comparable period of the previous year by 2 %, from € 24.6 million to € 25.1 million. Compared with the previous year the gross profi t margin decreased from 29 % to 27 %.

Increasing gross pro fi ts in theBusiness Solutions segment

The Business Solutions segment achieved a share of 43 % (previous year: 49 %) of total gross profi t and a share of 75 % (previous year: 76 %) of the gross earnings of the ecotel Group. Sales in the business customer segment totalled € 40.8 million, compared with € 41.6 million in the previous year. In 2012 gross earnings totalled € 18.9 million – after € 18.7 million in the previous year. Compared with the previous year the gross profi t margin increased from 45 % to 46 %.

Declining sales in Wholesale Solutions

The business unit Wholesale Solutions contributed 43 % (previous year: 36 %) to total earnings and 4 % (previous year: 6 %) to total gross profi t. Revenue in this segment increased by 33 % from € 30.6 million to € 40.8 million. Gross profi t decreased from € 1.4 million to € 1.0 million. This represents a gross profi t margin of 2 %.

Increasing revenue and gross pro fi t in New-Business segment

The business unit New Business contributed 13 % (previous year: 15 %) to total earnings and 21 % (previous year: 18 %) to total gross profi t. Revenue from New Business increased in comparison with the previous year from € 12.3 million to € 12.7 million. Gross profi t increased from € 4.5 million to € 5.2 million. This represents a gross profi t margin of 41 %.

Earnings, fi nancial and asset position

Higher other operating income

In 2012 other operating income totalled € 1.0 million (previous year: € 1.6 million). Essentially the decrease is attributed to the sale in the previous year of the i-cube business activities to infi nity3 GmbH, for which there were no comparable proceeds in the fi nancial year.

Higher personnel expenses and other operating expenses

The personnel expenses increased in 2012 by € 0.3 million from € 9.7 million to € 10.0 million. The number of employees of the consolidated companies (including minority companies) remained at 214 as in the previous year.

Other operating expenses declined slightly from € 9.5 million to € 9.3 million.

Unscheduled value adjustments reduce EBIT and consolidated pro fi t

Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to € 6.8 million, therefore remaining 4 % below the previous year's level of € 7.1 million, which included a special effect due to the higher other operating income.

Scheduled depreciations increased in comparison with the previous year from € 3.3 million to € 3.4 million, of which € 1.6 million was scheduled depreciation of intangible assets, such as development costs and client bases, and € 1.8 million for scheduled depreciation of property, plant and equipment.

installed on the roof of the computer centre, which operate with double protection (n+1 redundancy) and "free cooling". This means that the outside air is used for cooling when the outside temperature drops below a defi ned limit. Besides reduction of the electricity needed for cooling and improved energy effi ciency, the computer centre is also more "green" and eco-friendly.

The impairments of € 3.1 million comprise essentially the complete write-offs of the goodwill of the subsidiary nacamar. The goodwill originated in connection with the acquisition of the company in the year 2007. Due to the loss of the biggest customer in the fi rst half of 2011 and the failure to acquire two major customers that had been estimated as probable, the goodwill was completely written off.

EBIT therefore totalled € 0.4 million, after € 3.1 million in the previous year. Without the special depreciation the adjusted EBIT would have been € 3.5 million.

The fi nancial result for 2012 totalled € – 1.3 million, compared with € – 0.4 million in the comparison period 2011. In the fi nancial results, the shareholders' loans of € 0.9 million to the 49 % holdings mvneco GmbH and synergyPLUS GmbH had to be written down. The reason for the special depreciations is the decline in the fi nancial power of the two companies. At mvneco GmbH, especially the expected loss of a major customer in 2013 clouds the prospects for success. The net book value of these loans is presently € 1.4 million. Other expenses in the fi nancial result include interest of € 0.2 million, expenses for capital market support of € 0.1 million and a fi nancial debt for the negative cash value of an exchange rate transaction of € 0.1 million.

The tax expense for 2012 totalled € 0.8 million and is comprised of € 0.9 million effective tax expenses and € 0.1 million deferred tax expenses.

The 2012 consolidated net income before interests of non-controlling shareholders totalled € – 1.6 million, after € 1.7 million in the previous year. The 2012 consolidated net income after interests of non-controlling shareholders totalled € – 2.6 million (previous year: € 1.1 million). This corresponds to earnings per share of € – 0.70 (previous year: € 0.29). Consolidated profi t adjusted by special effects would have totalled € 1.4 million, with adjusted earnings per share of € 0.38.

liquid funds) was € – 0.2 at the end of 2012, which corresponds to a decrease by € 3.3 million in comparison with the previous year.

4. GENERAL STATEMENT OF THE ECONOMIC

ecotel has a working capital credit line of € 2.9 million. Of which, at the end of 2012, € 1.2 million were used as surety for payment. Thus, € 1.7 million was still available.

SITUATION OF THE GROUPIn comparison with the previous years the economic situation of the ecotel Group continued to improve despite the group defi cit (before shares of non-controlling shareholders) of € 1.6 million. The positive revenue development, which formed the basis for the successful reduction in fi nancial liabilities and the associated boost to the fi nancial results, contributed in this regard. As in previous years the company was able to honour its payment obligations without restriction and on time. Important fi nancial management goals also include compliance with the fi nancial covenants agreed with banks and minimising of credit, interest and currency risks, insofar as they can have a signifi cant effect on the fi nancial position. In this respect we refer to the information in our risk report.

3. ASSET POSITION

As of 31 December 2012 the balance sheet total was € 42.7 million, which corresponds to a reduction of 6 % relative to € 45.4 million as of 31 December 2011. The decline in the balance sheet total is essentially due to the impairment of intangible assets (e.g. goodwill, customer base) as well as repayment of the fi nancial loans, both of which resulted in a balance sheet contraction.

On the assets side, the non-current assets decreased by 14 % from € 24.5 million to € 21.1 million. Goodwill decreased as a result of the special depreciation to € 8.9 million. The value of customer relations decreased from € 3.1 million to € 2.5 million due to continuing depreciations. Current assets (without liquid funds) decreased from € 14.6 million to € 13.9 million.

On the liabilities side, the equity decreased by 10 % from € 21.4 million to € 19.3 million. The equity ratio therefore decreased from 47 % at the end of 2011 to 45 % at the end of 2012. The non-current fi nancial debt decreased by 27 % from € 7.6 million to € 5.5 million. Of this amount, € 0.7 million are attributed to deferred income tax liabilities. The current liabilities increased by 9 % from € 16.4 million to € 17.8 million. The net debt (fi nancial debt minus

Comparison of the forecasts with the actual business trend

At € 94.3 million, actual revenues achieved exceeded the € 80 – 90 million range forecast.

The actual EBITDA totalling € 6.8 million was at the upper end of the forecast corridor of € 6 – 7 million.

The Company was also able to exceed the planned reduction in net fi nancial liabilities to under € 0 (including the subordinate tranche), totalling € – 0.3 million as of the closing date.

2. FINANCIAL POSITION

Cash fl ow from operating activities for 2012 was € 6.8 million, compared with € 6.3 million in the previous year. Working capital (the difference between receivables and liabilities) decreased by € 0.8 million compared with the previous year.

Cash fl ow from investing activity in 2012 was € – 2.7 million after € – 1.6 million in the previous year. It is essentially comprised of investments of € 0.4 million in software licenses and in-house developed software, as well as investments of € 2.4 million for servers, network, router and computer centre infrastructure, as well as payments from the sales of fi xed assets and interest payments of € 0.1 million.

Cash fl ow from fi nancing activity in 2012 totalled € – 2.8 million (previous year: € – 4.5 million) and comprises the repayment of fi nancial loans totalling € 2.5 million, payments for the repurchase of the company's treasury shares totalling € 0.3 million, the taking out of new fi nancial loans totalling € 0.6 million, payments to minority shareholders totalling € 0.2 million and interest payments totalling € 0.4 million.

Cash and cash equivalents increased substantially from € 6.2 million at the beginning of 2012 to € 7.5 million at the end of 2012.

Supplementary report

After conclusion of the fi nancial year there were no noteworthy changes in the boundary conditions. The economic environment did not change in a degree that had an effect on the business activities of ecotel, nor has the industry situation become different than it was as of 31 December 2012.

Risk report

1. RISK MANAGEMENT AND INTERNALCONTROL SYSTEM

For early identifi cation and evaluation of entrepreneurial risks and risks that threaten the existence of the company, as well as for correct handling of such risks ecotel uses an appropriate risk management system.

Group-wide responsibility for early identifi cation of risks and implementation of measures to counter these risks rests with the management board. For continuous identifi cation and evaluation of risks in the company the managing directors of the subsidiaries, as well as the members of the ecotel management team assist the management board in this regard.

With the aid of a quarterly risk report the management board and the supervisory board track the identifi ed risks with reference to planned earnings throughout the entire year. In this regard the focus is on identifi cation of the need for action and the status of the measures implemented for systematic control of the identifi ed risks. All material risks are listed that could jeopardise earnings and the existence of the company, in the form of a risk matrix. All potential risks are evaluated according to their probability and the possible extent of damage. In addition, the risks are quantifi ed relative to the planned earnings of the company as potential deviation from the plan. Finally, after every potential risk the control measures that have been implemented are included.

ecotel maintains an internal control system (ICS) to assure the effectiveness and profi tability of the business activity, the correctness and reliability of the internal and external accounting, as well as compliance with the statutory regulations that are authoritative for the enterprise; the internal control system is revised at regular intervals. The risk of fi nancial reporting is that the annual reports and interim reports could contain incorrect presentations that could possibly have a material infl uence on the decisions of those to whom these reports are addressed. Our accountingbased internal control system is designed to identify possible error sources and to limit the risks resulting from these error sources. To assure the correctness and reliability of the accounting, the internal control system is designed in such a manner that for all material business transactions the dual-control principle is used and that a functional separation between the departments is maintained (creditors, debtors) in the bookkeeping. Account assignment guidelines are used for correct accounting. External service providers are used for the IFRS preparation of fi nancial statements as well as for more complex accounting issues. The same applies for preparation of the tax return. In addition the central key fi nancial fi gures are monitored by a regular target / actual comparison with deviation analysis.

2. RISKS OF FUTURE DEVELOPMENT

As part of the business activity ecotel is confronted with operative risks, fi nancial risks, strategic risks, and with risks of the market environment.

Operative risks

Operative risks are of a more short-term nature and for ecotel are concentrated on possible failures, errors and capacity bottlenecks of the infrastructure (e.g. backbone, computer centre, switching tech nology, server farms) as well as on correct and prompt handling of processes that are critical for the enterprise in the areas of provisioning, invoicing, receivables management, as well as customer support.

Assurance of the highest possible availability of infrastructure through appropriate system redundancies both on the switching technology side and on the line side, is one of the most important measures that ecotel consistently implements to prevent risks. The implications of a possible failure of the company's own switching technology are minimised in that only the international B2B traffi c, as well as the wholesale traffi c is terminated via the Group's own switching systems, and the major portion of the B2B voice traffi c remains in the networks of the upstream suppliers. For mobile communications traffi c there is a fall-back scenario that routes the traffi c via the network of the upstream supplier if our own network fails. In the area of availability of the server farms of the nacamar CDN (Content Delivery Network), the server farms were completely duplicated in separate facilities.

In the area of the computer centre infrastructure, there are potential risks of failure of the air conditioning system and emergency power supply, as well as loss of the connection. The emergency power supply is structured redundantly; in 2012, a n+1 redundancy was implemented in the area of the air conditioning technology. Risks of external capacity bottlenecks for the power supply of the computer centre in Frankfurt am Main continue to exist; these risks can possibly cause hindrances for future customer growth. Because possible expansion measures in the power supply are associated with signifi cant investments, this project will only be undertaken when there is appropriate additional capacity demand on the part of customers. The computer centre is connected to different carriers via two different house lead-ins by means of edgedisjoint and node-disjoint paths.

The dependency of ecotel on DTAG could be reduced in the area of the connection transfer, if ecotel uses the connection transfer via DTAG only in so-called Off-Net regions where alternative subscriber operators (Vodafone, Versatel) do not have their own network (approx. 30 % of German business customers).

ecotel decided at the end of 2012 to provide its business customers with Vodafone mobile communications products in the future. Since the existing MVNO contract with E-Plus will expire at the end of 2013, the existing SIM mobile communications contracts will presumably have to be migrated to other offers before then. This can possibly result in the increased willingness of mobile communications customers to switch, which could damage the company's earnings and performance.

Possible delays in the implementation of the execution platform for the Allianz project could lead to a delay of the router rollout planned for 2013 and the line migration, which would therefore affect the company's earnings and performance for 2013 and 2014.

In addition, ecotel strives to distribute the know-how for handling enterprise-critical processes over multiple employees to avoid generating an excessive dependency on individual key persons.

Financial risks

For ecotel fi nancial risks include credit risks, liquidity risks, currency risks and interest risks.

A credit risk exists if transaction partners do not honour their payment obligations. The development of the receivables portfolio is constantly monitored in order to identify possible default risks early on and implement appropriate measures.

As part of the acquisition fi nancing ecotel has agreed with the fi nancing credit institutions on fi nancial covenants that are usual in the market, that are based on the relationship of specifi c fi nancial key indicators. The IFRS consolidated fi nancial statement prepared by ecotel serves as the basis for determination of the key performance indicators. A violation of the covenants could possibly result in cancellation and premature payback of the investment loans and revolving credit facilities and thus could entail a signifi cant worsening of the liquidity position of ecotel, if an agreement concerning an adaptation of the fi nancial covenants or refi nancing cannot be achieved. For all three of the current covenants (equity ratio (TARGET: >25 % / 35 %; ACTUAL: 47 %)), net fi nancial liabilities / EBITDA (TARGET: <2.5; ACTUAL: – 0.48), EBITDA / sales revenue (TARGET: >5 %; ACTUAL: 6.3 %)) ecotel is clearly within the intervals specifi ed by the fi nancial covenants. The enterprise assumes that compliance with all covenant threshold values is ensured again in 2013.

At year end 2012 ecotel had liquid funds totalling € 7.5 million. The net debt at year end was € – 0.3 million (after € 3.0 million in the previous year). As an additional liquidity reserve ecotel has a revolving credit facility of € 2.9 million. Of which, at the end of 2012, € 1.2 million were used as surety for payment.

Currently there are no pending legal disputes against ecotel with a value in matter of dispute of more than € 5,000.

Possible interest risks that could result from changes in the market interest rates are hedged using interest rate swaps and fi xed-interest loans.

Currency risks resulting from cash fl ows in different currencies are hedged at the time of their origination, at the latest. This done by means of forwardexchange transactions. The use of such derivative fi nancial instruments is for hedging purposes only and are not used for speculation. Further information on the use of derivatives can be found in the Notes.

Strategic risks

Strategic risks are more of a medium-term nature and are based on the strategic enterprise alignment for purchasing, products, sales, technology and IT.

Dependence on suppliers is reduced by the fact that a two-supplier strategy is maintained for the essential preliminary service products.

One strategic risk continues to be the high level of willingness of preselection customers to change to bundle products of other providers and the associated decline in the customer base that could not yet be adequately compensated through our own new products. Should ecotel not succeed, for example in more strongly binding its customers through its own competitive bundle offerings and thus show a lower attrition rate, this can also have signifi cant disadvantageous effects on the asset, fi nancial, and earnings situation of ecotel.

Risks of the market environment

Moreover, due to the rapid pace of technological change new products and business models are created. The possibility cannot be excluded that in this manner the ecotel products will become less competitive and thus less in demand. Consequently ecotel continuously monitors the market environment in order to react quickly and effectively to technology changes.

The existing general regulatory conditions, which are materially infl uenced by decisions of the German Federal Network Agency for Electricity, Gas, Telecommunication, Post, and Railroad (BNetzA), and through other consumer protection measures (such as mandatory price announcements for call-by-call), could also change to the disadvantage of ecotel's business activities and bring about negative business-relevant changes.

Overall risk can be calculated

In summary, ecotel is convinced that the material risks cited above neither individually nor collectively concretely jeopardise the continued existence of the company and that ecotel, through the fl exible business model and the monitoring system, can quickly recognise risks, react to them, and implement counter measures in 2013 as well.

3. OPPORTUNITIES OF FUTURE DEVELOPMENT

In addition to the risks there are a number of opportunities that can sustainably affect the business development of the ecotel Group.

New market developments in the areas of voice over IP and hosted PBX

An important telecommunications trend topic is the shifting of telephone systems onto the Internet (hosted PBX/IP Centrex), in combination with voice over IP. This change has only been made feasible through nationwide availability of broadband Internet accesses. ecotel is carefully observing these developments, and in the medium-term plans to shift its customer base, to supplement ISDN full access, to so-called NGN (Next Generation Network) voice connections. Among other things the customers can benefi t through this shift from innovative services (e.g. convergent fi xed-line and mobile communications products, unifi ed communication). Simultaneously ecotel could profi t from signifi cant cost savings.

Expansion of marketing activities in the data segment

For 2013 ecotel plans further growth in the data segment. Among other things, the expansion of the existing Ethernet and SHDSL product pallet in 2012 to include new functions (foreign coverage, MPLS integration) and capacities (SHDSL 10 Mbit/s) should lead to additional sales successes.

Replication of the Allianz project contract for secure corporate networking also for other major customers

Implementation of the Allianz project and the connectivity solution for secure corporate networking give ecotel optimal opportunities to implement similar projects for other major customers as well. This includes in particular the end-to-end infrastructure service, from the customer router through different connection technologies all the way to the central network components, such as web proxy, fi rewalls and intrusion detection, with a round-the-clock interactive monitoring service.

Setup of strategic cooperations for utilisation of market opportunities as result of closer integration of telecommunications and IT

The current revenue and growth rates of the overall market for cloud services, i.e. the shift from local computing power to secure computer centres, are considerable. Cloud computing is also one of the dominating trend topics. Considering the sector of private cloud solutions, which is especially important for business customers, the German market has already reached an annual revenue level greater than € 2 billion, according to a BMWI survey. By 2025 enormous growth of more than 30 % per year to ca. € 10 billion is expected. Market-driving solutions here include central ERP / CRM solutions, Voice and Video over IP, IaaS and corresponding infrastructure services for fast and secure transfer of customer data.

This positive development corresponds ideally with the ecotel product pallet in the area of infrastructure and data services – for example with the nationwide available xDSL and Ethernet bandwidths, or the MPLS-VPN solutions and housing / colocation services in the ecotel computer centre. For this purpose ecotel established a strategic cooperation with Fujitsu to bring the "cloud" issue closer to the SMEs.

For other IT-related services such as security or virtualisation, eco is planning similar cooperations, in order to benefi t from the market growth together with partners.

Marketing of convergent fi xed-line and mobile communications products

The cooperation agreement with Vodafone for mobile communications signed in 2012 allows ecotel to set up convergent fi xed line and mobile products with free-of-charge availability of the customer-specifi c Vodafone mobile cards from ecotel full access lines. This offers new revenue opportunities for ecotel.

One-time earnings from legal proceedings

ecotel currently is conducting two active legal disputes. Both proceedings are currently open and can lead to signifi cant other operating income in the coming years.

4. COMMENTS ON FORECASTS

This management report also includes future-oriented statements and information, i.e. statements concerning events that are in the future. These future-oriented statements can be identifi ed through formulations such as "expect", "intend", "plan", "estimate" or similar terms. Such forward-looking statements are based on present expectations and specifi c assumptions. Consequently they are associated with a number of risks and uncertainties. A number of factors, many of which are beyond the control of the ecotel Group, infl uence the business activities, the success, the business strategy, and the results of ecotel. As a result of these factors the actual results, successes, and performances of the ecotel Group may signifi cantly or implicitly deviate from the information on results, successes or performances contained in the future-oriented statements.

Outlook

Medium-term increase of revenueand EBITDA by 2015

Management pursues the medium-term goal of increasing its revenue to € 100 million and EBITDA to € 10 million by 2015. This should be made possible essentially due to an increase of the B2B revenue from currently € 40 million to € 50 million by 2015. Among other things, this should be achieved with increased sales of products in the areas of full access, data services, mobile communications and managed services.

Short-term reduction of net debt

Due to the substantial advance investments totalling € 4 – 5 million as part of the Allianz project we assume an increase in the net debt for 2013 in comparison with the previous year. The investments mentioned above are collateralised by contract and will pay for themselves during the course of the contract term, by 2018.

Forecast 2013 and 2014

For 2013 the company expects consolidated turnover of about € 80 – 90 million, with increasing B2B revenue. The planned decrease in revenue compared with 2012 is explained by the lowering of the mobile termination fees, which were passed on 1:1 to other carriers, resulting in a corresponding reduction of revenue in the wholesale segment. The Company also expects EBITDA of € 6 – 7 million for 2013. For fi nancial year 2014 a group revenue and group EBITDA development is expected that will be in line with the medium-term group revenue and group EBITDA objectives.

Statement of the legal representatives Group management report

The management board and supervisory board of ecotel communication ag have issued the required statement on corporate governance in accordance with § 289a of the German Commercial Code (HGB), as well as the corporate governance report, including the statement prescribed in accordance with § 161 of the German Stock Corporation Law (AktG), and have made these statements permanently available to the public on the Internet (http://ir.ecotel.de/ cgi-bin/show.ssp?id=6000&companyName=ecotel& language=German).

Düsseldorf, 19 March 2013 ecotel communication ag

The management board Peter Zils Bernhard Seidl Achim Theis

Statement on corporate governance and corporate governance report

Statement of the legal representatives

To the best of our knowledge, in accordance with the applicable principles for fi nancial reporting we assure that the consolidated fi nancial statement conveys an appropriate view of the Group's asset, fi nancial and earnings position that corresponds to the actual conditions, and in the Group management report the development and performance of the Group, including the business results and the position of the Group are presented in a manner that conveys a view that corresponds to the actual conditions, and that the essential opportunities and risks of the presumable development of the company are described.

Düsseldorf, 19 March 2013 ecotel communication ag

The management board Peter Zils Bernhard Seidl Achim Theis

Consolidated balance sheet

as of 31 December 2012

Lia bili ties	Amo unts in €	(No tes)	12/3 1/20 11	12/3 1/20 12
A. Equ ity c apit al
I. Sub scri bed ital cap		(9)	3,75 2,50 0.00	3,68 5,09 6.00
II. Cap ital r ese rves		(9)	1,67 8,03 6.50	1,44 3,25 4.38
Oth III. er re serv es			15,0 87,0 43.0 0	12,4 60,8 18.7 4
Tota l sha reho lder s' E quit y			20,5 17,5 79.5 0	17,5 89,1 69.1 2
IV. Sha of n ontr ollin g sh areh res on-c	olde rs	(9)	900 ,115 .78	1,73 3,55 0.34
Tota l eq uity ital cap			21,4 17,6 95.2 8	19,3 22,7 19.4 6
B. Non rent visio -cur pro ns and liab ilitie s
I. Defe rred inc tax ome		(10)	979 ,058 .08	687 ,973 .30
II. Non rent loa -cur ns		(11)	6,60 9,37 5.00	4,83 1,25 0.00
III. Oth er fi cial deb ts nan		(11)	0.00	0.00
ovis ions Tota l no t pr n-cu rren and liab ilitie
s			7,58 8,43 3.08	5,51 9,22 3.30
C. Cur visio rent pro ns and liab ilitie s
I. Cur rent tax rnin es o n ea gs		(10)	313 ,903 .36	669 ,730 .47
II. Fina ncia l de bts		(11)	2,71 5,50 2.70	2,48 8,71 5.17
III. Acc ts p ble oun aya		(11)	11,5 55,2 16.9 8	12,9 68,0 31.7 7
IV. Liab ilitie s to ocia ted ies ass com pan		(11)	133 ,765 .95	213 ,230 .42
V. Oth er li abil ities		(11)	1,71 9,61 4.60	1,50 6,17 2.06
Tota l cu ovis ions t pr rren
and liab ilitie s			16,4 38,0 03.5 9	17,8 45,8 79.8 9
Tota l lia bilit ies			45,4 44,1 31.9 5	42,6 87,8 22.6 5

Ass ets	Amo in € unts	(No tes)	12/3 1/20 11	12/3 1/20 12
A. Non rent ets -cur ass
Goo I. dwil l an d ot her inta ngib le a sset s		(1)	16,9 67,1 70.8 1	13,7 93,9 47.4 8
II. Fixe d as sets		(2)	5,07 9,56 5.01	5,94 0,22 8.48
III. Fina ncia l ass ets unte d fo acco r bas ed o n th uity met hod e eq		(3)	1,58 6,13 4.39	1,41 0,00 0.00
IV. Oth er fi cial ts nan asse		(3)	25,0 00.0 0	3,80 0.00
V. Non rent eiva bles -cur rec		(4)	623 ,799 .25	0.00
VI. Defe rred inc tax cla ims ome		(7)	193 ,361 .40	0.00
Tota l no t as sets n-cu rren Cur B. rent ets ass			24,4 75,0 30.8 6	21,1 47,9 75.9 6
I. Inve ntor ies		(5)	88,7 77.4 8	145 ,446 .68
II. Trad ceiv able e re s		(6)	13,4 24,4 77.5 9	12,5 13,7 16.8 7
Oth III. ceiv able d cu t as sets er re s an rren		(6)	1,21 1,43 5,67	1,32 0,46 7.33
IV. Actu al in e ta x cla ims com		(7)	9,19 4.76	26,7 83.1 0
V. Fun ds		(8)	6,23 5,21 5.59	7,53 3,43 2.71
Tota l cu t as sets rren			20,9 69,1 01.0 9	21,5 39,8 46.6 9
Tota l as sets			45,4 5 44,1 31.9	5 42,6 87,8 22.6

C l i d t o n s o a e	d h f l c a s o w	t t t s a e m e n
for fi na ncia l ye ar 2 012			Note . 24 see

	Amo unts in €	(No tes)	01/0 2/31 /201 1–1	1/01 /31/ 1 0 –12 201 2
1.	Sale s re ven ue	(14)	84,4 81,3 25.0 8	94,2 98,0 86.2 4
2.	Oth ains er re ven ues or g	(15)	1,59 9,97 3.98	993 ,908 .39
3.	Oth nufa ed i pita lized ctur tem er c omp any -ma s ca		849 .00	112 ,369 .10
4.	Tota l op ing perf erat orm anc e		86,0 82,1 48.0 6	95,4 04,3 63.7 3
5.	Cos t of mat eria ls
	es f Exp ervi has ed ens or s ces purc	(16)	– 59 ,854 ,073 .84	– 69 ,245 ,049 .97
6.	Pers el co sts onn	(17)
6.1	Wag nd s alar ies es a		– 8,3 98,1 46.0 2	– 8, 674 ,355 .50
6.2	Soc ial c ontr ibut ions and es f ions and ben efi ts exp ens or p ens		– 1,3 06,7 11.7 6	– 1, 361 ,179 .63
7.	Sch edu led dep reci atio ns	(18)	– 3, 309 ,930 .54	– 3, 379 ,539 .88
8.	Imp airm ents	(18)
8.1	of n nt a sset on-c urre s		– 54 1,54 7.56	– 3, 072 ,428 .71
8.2	of c nt a sset urre s		– 10 4,27 6.55	0.00
9.	Oth ting er o pera exp ens es	(19)	– 9,4 71,0 44.8 8	– 9, 279 ,289 .16
10.	ratin (EB IT) Ope sult g re		3,09 6,41 6.91	392 ,520 .88
11.	Fina ncia l inc ome		144 ,145 .74	645 ,650 .25
12.	Fina ncia l exp ens es		– 54 5,36 5.45	– 1, 896 ,681 .44
13.	Earn ings from fi na ncia l ass ets d fo r ba sed the ity m etho d unte acco on equ		– 12 ,137 .70	– 23 ,690 .72
14.	Fina ncia l res ult	(20)	– 41 3,35 7.41	– 1, 274 ,721 .91
15.	Ear ning s fr mal bus ines om nor s acti vitie s be fore inc tax ome		2,68 3,05 9.50	– 88 2,20 1.03
16.	Tax es f inc and rom ome rev enu e	(21)	– 98 2,53 6.42	– 76 6,42 2.29
17.	Con soli date d pr ofi t (= to tal c olid ated fi t) ons pro		1,70 0,52 3.08	–1,6 48,6 23.3 2
18.	Profi of n t sh ontr ollin g sh areh olde are on-c rs	(22)	– 62 7,37 1.44	– 94 6,26 5.57
19.	Con soli date d pr ofi t to b e al loca ted to sha reho lder s of tel c unic atio eco omm n ag		1,07 3,15 1.64	– 2, 594 ,888 .89
Und	ilute d ea rnin hare gs p er s	(23)	0.29	– 0. 70
Dilu	ted ings sha earn per re	(23)	0.29	– 0. 70

Due to lack of data, the other comprehensive income is not reported.

Consolidated statement of comprehensive income for the fi nancial year 2012

Amo unts in €	(No tes)	201 1	201 2
Ann ual solid ated fi t b efor e in e ta d con pro com x an
befo rofi t sha f no ntro lling sha reho lder re p re o n-co s	(24)	2,68 3,05 9.50	– 88 2,20 1.03
Net inte rest inc ome	(24)	343 ,973 .04	162 ,204 .98
Dep reci atio d am ortis atio n an n ex pen se	(24)	3,85 1,47 8.10	7,23 0,82 2.45
/ de n of Amo rtisa tion iatio rent ets prec cur ass	(24)	104 ,276 .55	0.00
Earn ings from ies a d fo unte com pan cco r bas ed o n th uity met hod e eq	(24)	12,1 37.7 0	23,6 90.7 2
Cas h fl o w		6,99 4,92 4.89	6,53 4,51 7.12
Oth s (+ ) an d in e (– ) er e xpe nse com not affe cting the bal e sh eet anc	(24)	66,0 80.9 7	0.00
Profi t (– ) / lo ss ( +) fr retir nts om eme of in tang ible ts asse	(24)	– 25 ,801 .27	– 31 ,625 .06
Incr e (– ) / de se ( +) eas crea in th e tra de r ivab les ece	(24)	997 ,660 .48	877 ,797 .15
Incr e (+ ) / de se ( –) eas crea in re ceiv able d ot her ts s an asse	(24)	– 48 7,52 9.66	– 25 ,443 .09
Incr e (+ ) / de se ( –) eas crea in th able nts e ac cou pay	(24)	– 1, 246 ,016 .46	97,9 79.7 9
e (+ ) / de se ( –) Incr eas crea in lia biliti es ( with out fi na ncia l de bts)	(24)	238 ,027 .16	– 11 9,85 3.07
Paid (–) / rec eive d (+ ) inc tax ome	(24)	– 27 6,17 9.97	-525 ,906 .90
Infl o f fu nds fro ing bus ines tivit ies w o m o ngo s ac		6,26 1,16 6.14	6,80 7,46 5.94
Inpa nts f reti ents of i ntan gibl sets yme rom rem e as	(24)	142 ,853 .34	33,9 25.2 8
ts fo Pay r inv estm ents in t ible men ang and inta ngib le a sset s	(24)	– 1, 717 ,732 .09	– 2, 798 ,889 .30
Proc eed s fro m d ispo sal o f fi n ial a sset anc s	(24)	119 ,034 .45	0.00
Pay ts fo r inv estm ents in fi cial ts men nan asse	(24)	– 25 ,000 .00	– 3, 800 .00
Cha s du e to the init ial c olida tion of s ubs idiar ies nge ons	(24)	0.00	23,8 35.1 8
ts fo of e Pay quis ition quit y int ts men r ac eres from min ority sha reho lder s	(24)	– 11 3,80 0.00	0.00
Pay ies a d ts to unte men com pan cco for ing the ity m etho d us equ	(24)	– 70 ,000 .00	0.00
Inte rest pai d in	(24)	37,0 20.7 8	22,3 21.4 3
Out fl ow of f und s fr inve acti vitie stm ent om s		– 1, 627 ,623 .52	– 2, 722 ,607 .41
of s Rep urch hare ase s	(24)	0.00	– 33 3,52 1.51
Pay min ority sha reho lder ts to men s	(24)	– 48 ,336 .00	– 15 3,93 1.00
Inpa nt fr taki ut fi cing loa yme om ng o nan ns	(24)	4,00 0,00 0.00	570 ,000 .00
Pay ts fo ent of fi cing loa men r rep aym nan ns	(24)	– 7, 980 ,210 .86	– 2, 521 ,896 .53
Inte rest pai d ou t	(24)	– 50 2,95 6.68	– 34 7,29 2.37
Infl o w / o utfl o f fu nds fro m fi cing iviti act w o nan es		531 ,503 .54 – 4,	– 2, 786 ,641 .41
Cha in f und s ba lanc e af fect ing nge the bala she et nce		102 ,039 .08	1,29 8,21 7.12
Fun ds b alan rt of iod t sta ce a per		6,13 3,17 6.51	6,23 5,21 5.59

Funds balance at end of period 6,235,215.59 7,533,432.71

alloc ated hare to s Sha of res hold of e l cote Sub Oth tain ed ers Amo unts in € thou sand scri bed Cap ital troll ing er re Con solid ated non -con ital profi icati ings t Note s (9) sha reho lder cap c om mun on a g rese rves earn s of 1 Jan 201 1 3,75 2 1,66 2 13,9 18 56 19,3 88 585 uary due urch ales to p nge ase or s 0 +0 40 0 40 – 15 8 t co lidat ion nso ing due to e bell Gm bH P/L tran sfer ent 0 0 0 0 0 – 15 4 roup asy agr eem sfer of p revi r's e arni 0 0 56 – 56 0 0 ous yea ngs s in ity c apit al nge equ 0 0 96 – 56 40 – 31 2 affe ctin g th rnin e ea gs ptio lan 0 16 0 0 16 0 re o ns p solid ated net inc 201 1 0 0 0 1,07 3 1,07 3 627 ome s in ity c apit al nge equ 0 16 0 1,07 3 1,08 9 627 cting the ning ear s of 3 1 De ber 201 1 3,75 2 1,67 8 14,0 14 1,07 3 20,5 17 900 cem draw al o f ca pita l res s fro cote l ag 0 – 23 5 235 0 0 0 erve m e k of bac the trea sha – 67 0 – 26 6 0 – 33 3 0 sury res ation t du bell Gm bH P /L tr ansf 0 0 0 0 0 – 11 3 e to t pens pay men easy er a gree men sfer of p revi r's e arni 0 0 1,07 3 – 1, 073 0 0 ous yea ngs s in ity c apit al nge equ 5 – 67 – 23 1,04 2 – 1, 073 – 33 3 – 31 2 affe ctin g th rnin e ea gs solid ated net inc 201 1 0 0 0 – 2, 595 – 2, 595 947 ome s in ity c apit al nge equ 0 0 0 – 2,5 95 947 cting the ning – 2,5 95 ear s of 3 1 De ber 201 2 3,68 5 1,44 3 15,0 56 – 2, 595 17,5 89 1,73 4 cem			Reta ined	ning ear s	Equ ity c apit al to be
	As
	Cha Firs
Tran Cha not Sha Con Cha affe As With Buy Com Tran Cha not Con Cha affe As	Reg

Development of the consolidated equity capital

Notes to the consolidated fi nancial statement of ecotel communication ag Principles of fi nancial accounting

GENERAL INFORMATION

ecotel communication ag is a company headquartered in Germany (Prinzenallee 11, 40549 Düsseldorf) and is active throughout Germany as a telecommunications fi rm specialising in meeting the requirements of medium-sized enterprises in three business areas.

In its core unit, Business Solutions, the ecotel Group offers medium-sized enterprises, as well as large customers, an integrated product portfolio of voice, data and mobile services as a complete package from a single source. Throughout Germany ecotel supplies approx. 19,000 business customers with standardised and custom telecommunications solutions.

In the second segment, "Wholesale Solutions", the ecotel group markets preliminary products to other telecommunications companies. At the same time, the company achieves high traffi c volumes with this segment, enhancing added value for the core segment of Business Solutions. In addition to the wholesale business of ecotel communication ag, mvneco GmbH is also assigned to this business unit.

New high-growth business sectors and niches of the subsidiaries and holdings, which remain operationally autonomous, are the focus area of the New Business unit. These include nacamar GmbH with its new media business, as well as easybell GmbH with the private customer business.

All standards valid and applicable in the EU on the balance sheet date are applied. In addition. the interpretations of the International Financial Reporting Interpretation Committee (IFRIC) have been complied with.

The following change in a pronouncement of the IASB was applied by ecotel for the fi rst time in the consolidated fi nancial statement as of 31 December 2012:

In October 2010 the IASB published changes to IFRS 7 "Financial Instruments: Disclosures – Transfer of Financial Assets". These changes will give the users of fi nancial reports better insight into the transactions for the transfer of fi nancial assets. The changes must be applied for fi nancial years that start on or after 1 July 2011. In the fi rst year of application no comparison information is required. The fi rst application of the revised version in the consolidated notes as of 31 December 2012 had no infl uence.

Standards, interpretations and changes that have been published by IASB or IFRS IC but not yet applied

At the time the consolidated fi nancial statement was drawn up, as of 31 December 2012 the following new and changed standards and interpretations were adopted and put into effect by the European Union as European legislature. However, these go into force later and have not been prematurely applied in this consolidated fi nancial statement:

Stan dard / Int ion etat erpr	First -time dato plica man ry ap IAS tion in ac cord with B ance	First -time dato ry appl man icatio n in the E U
Cha s to IAS 1 "P ntat ion of F inan cial Stat nts" nge rese eme : Pres enta tion of o ther preh ive i com ens nco me	1 Ju ly 20 12	1 Ju ly 20 12
Cha s to IAS 12 "Inc Tax es": De ferre d ta nge ome xes : Rea lisat ion of u nde rlyin sets g as	1 Ja ry 2 012 nua	1 Ja ry 2 013 nua
of I AS 19 " nefi Rev ision Emp loye e Be ts"	1 Ja ry 2 012 nua	1 Ja ry 2 013 nua
Rev ision of I AS 27 " Sep e Fi cial Stat nts" arat nan eme	1 Ja ry 2 013 nua	1 Ja ry 2 014 nua
Rev ision of I AS 28 " Inve stm ents in A ciate sso s and Joi nt V entu res"	1 Ja ry 2 013 nua	1 Ja ry 2 014 nua
Cha s to IAS 32 "Fin ial In stru ts: nge anc men Pres tion ": O ffse t of fi na ncia l ass and deb enta ets ts	1 Ja ry 2 014 nua	1 Ja ry 2 014 nua
Cha S 1 "Firs f IFR S": s to IFR t-tim e Ad opti nge on o High infl atio d re al o f fi x ed d ata n an mov	1 Ju ly 20 11	1 Ja ry 2 013 nua
Cha IFR S 7 "Fin ial In s to stru ts: nge anc men Disc losu res" : Off set of fi cial ts a nd d ebts nan asse	1 Ja ry 2 013 nua	1 Ja ry 2 013 nua
IFR S 10 "Co lidat ed F inan cial Stat nts" nso eme	1 Ja ry 2 013 nua	1 Ja ry 2 014 nua
IFR S 11 "Jo int A ents " rran gem	1 Ja ry 2 013 nua	1 Ja ry 2 014 nua
S 12 "Di of I in O IFR sclo nter ests ther Ent ities " sure	1 Ja ry 2 013 nua	1 Ja ry 2 014 nua
IFR S 13 "Fa ir Va lue Mea t" sure men	1 Ja ry 2 013 nua	1 Ja ry 2 013 nua
IFR IC 2 0 "S tripp ing Cos ts in the Pro duc tion Pha se of a Su rfac ine" e M	1 Ja ry 2 013 nua	1 Ja ry 2 013 nua
Cha s to IFR S 1 "Firs t-tim e Ad opti f IFR S": nge on o Gov loan ent ernm s	1 Ja ry 2 013 nua	1 Ja ry 2 013 nua

Insofar as the above-mentioned standards / interpretations are relevant for the consolidated fi nancial statements of ecotel communication ag, a brief description of the content of these alterations or changes, as well as an initial assessment of their effects on the consolidated fi nancial statement of ecotel communication ag is provided below:

In May 2011, the IASB published three new IFRS standards (IFRS 10, IFRS 11, IFRS 12) as well as two revised standards (IAS 27, IAS 28) for the accounting of investments in subsidiaries, joint agreements and associated companies. The regulations are mandatory in the EU and must be applied for fi nancial years that start on or after 1 January 2014. The application of the new and changed IFRS will possibly have effects on the presentation of the asset situation, fi nancial situation and earnings situation or on the cash fl ow of the ecotel Group for future corporate mergers and result in additional disclosures of the ecotel Group. However, the revised IAS 27 is excepted, because this standard now exclusively extends to the individual fi nancial statement, and ecotel does not prepare separate IFRS fi nancial statements in accordance with § 325, para. 2a of the German Commercial Code (HGB).

With the publication of IFRS 10 "Consolidated Financial Statements" the IASB is introducing a uniform consolidation concept. The previous distinction between "classic" subsidiaries (IAS 27) and special-purpose companies (SIC-12) has been done away with. Control only exists if an investor has the power of decision, is subject to variable returns, or if he is entitled to rights relative to the returns, and due to the power of decision is capable of infl uencing the amount of

a single settlement process and thus is equivalent to a net settlement in the result. The new regulations are mandatory and must be applied retrospectively for fi nancial years that start on or after 1 January 2014. Ecotel is reviewing the resulting effects on the presentation of the asset situation, fi nancial situation earnings situation or cash fl ow of the Group.

Also in December 2011, in IFRS 7 "Financial Instruments: Disclosures", the IASB published extended disclosure obligations regarding offsetting rights. In addition to extended disclosures concerning actual offsets in accordance with IAS 32, for existing offsetting rights, disclosure obligations are introduced, regardless of whether an offset in accordance with IAS 32 is actually undertaken. The new regulations are mandatory and must be applied retrospectively for fi nancial years that start on or after 1 January 2013. Ecotel is reviewing the resulting effects on the presentation of the asset situation, fi nancial situation earnings situation or cash fl ow of the Group and anticipates extended disclosure obligations.

At the time the consolidated fi nancial statement was drawn up, as of 31 December 2012 the following new and changed standards and interpretations were adopted, however without having been put into effect by the European Union in European legislature. However, these go into force later and likewise have not been prematurely applied in this consolidated fi nancial statement:

the variable returns. With entry into force of IFRS 10, SIC-12 "Consolidation – Special Purpose Entities" becomes invalid, as do the provisions of IAS 27 "Consolidated and Separate Financial Statements" that are relevant for consolidated fi nancial statements.

IFRS 11 "Joint Arrangements" will replace IAS 31 "Interests in Joint Ventures", as well as SIC-13 "Jointly Controlled Entities – Non-Monetary Contributions by Venturers". It governs the accounting of joint ventures and of joint operations. The proportionate consolidation method for joint ventures is no longer permitted with discontinuation of IAS 31. Application of the equity method is now regulated in the new version of IAS 28 "Interests in Associates and Joint Ventures" and extends to associated companies as well as to joint ventures. In the case of joint operation, the share of assets, liabilities, expenses and earnings is directly recognised in the consolidated fi nancial statement and in the fi nancial statement of the joint operator.

In IFRS 12 "Disclosure of Interests in Other Entities" all disclosure obligations that must be complied with relative to subsidiaries, joint agreements and associated companies, as well as consolidated structured companies, are centrally bundled.

The new version of IAS 27 "Separate Financial Statements" exclusively governs the accounting depiction of subsidiaries, joint ventures and associated companies in the fi nancial statement as well as associated disclosures (separate fi nancial statement in accordance with § 325 para. 2a HGB). The new version of IAS 28 "Investments in Associates and Joint Ventures" governs the inclusion of shares of associated companies and joint ventures based on the equity method.

In May 2011 the IASB also published IFRS 13 "Fair Value Measurement". With this publication the IASB has provided a uniform, comprehensive standard for fair value measurement. IFRS 13 is mandatory and must be applied for fi nancial years that start on or after 1 January 2013. IFRS 13 regulates how fair value must be measured, if a different IFRS prescribes fair value measurement (or fair value disclosure). A new defi nition of fair value applies which characterises fair value as the selling price of an actual or hypothetical transaction between any independent market participants under normal market conditions on the measurement key date. The standard is virtually comprehensive in its application, only IAS 2 "Inventories", IAS 17 "Leases" and IFRS 2 "Share-based Payment" are excepted. While the scope of these provisions remains virtually unchanged for fi nancial instruments, now these provisions more comprehensively or more precisely govern other circumstances, (e.g. investment property, intangible assets and property, plant and equipment). The familiar three-level fair value hierarchy must be applied overall. Application of IFRS 13 presumably results in extended disclosures in the ecotel consolidated fi nancial statement.

In December 2011, in IAS 32 "Financial Instruments: Presentation", the IASB published details concerning the offsetting provisions. To satisfy the offsetting prerequisites in accordance with IAS 32, according to the new provisions, an entity's right to offset at the present time must not be contingent on a future event and must apply in the proper course of business as well as in the event of default and insolvency of a contracting party. Moreover, it is determined that a gross settlement mechanism satisfi es the offsetting prerequisites in accordance with IAS 32 if no signifi cant credit and liquidity risks remain, receivables and liabilities are processed in

Firs t-tim and ator e m y licat ion in a rdan app cco ce with IAS B	Firs t-tim and ator e m y licat ion in th e EU app
1 Ja ry 2 015 nua	Unk of y et now n as
1 Ja ry 2 015 nua	Unk of y et now n as
1 Ja ry 2 013 nua	Unk of y et now n as
1 Ja ry 2 013 nua	Unk of y et now n as
1 Ja ry 2 014 nua	of y Unk et now n as

In November 2009 the IASB published IFRS 9 "Financial Instruments". The European Union has not yet put the changes into effect in European legislature. The standard is the result of the fi rst of three phases of the project to replace IAS 39, "Financial Instruments: Recognition and Measurement" with IFRS 9. IFRS 9 regulates the classifi cation and measurement of fi nancial assets. The regulations concerning impairments of fi nancial instruments and hedge accounting are currently being revised by the IASB. IFRS 9 prescribes that fi nancial assets must be assigned to one of the following two valuation categories: "At amortised cost" or "At fair value". IFRS 9 also grants a fair value option, which allows fi nancial assets that would normally be assigned to the "at amortised cost" category to be designated as "at fair value" if the fair value designation would eliminate or signifi cantly reduce measurement or recognition inconsistency. It is mandatory to assign equity instruments to the "at fair value" category. If, however, the equity instrument is not held for trading, the standard allows an irrevocable option to be made at initial recognition to designate it as "at fair value" through other comprehensive income. Dividend income resulting from the equity instrument must be reported in the statement of comprehensive income. IFRS 9 must be applied

PRINCIPLES OF CONSOLIDATION

According to IFRS all mergers must be depicted in accordance with the purchase method. The purchase price of an acquired subsidiary is distributed over the purchased assets, debts and contingent liabilities. In this regard the proportionate values at the time control over the subsidiary was obtained are authoritative. The eligible assets and the debts and contingent liabilities taken over are recognised with their fair market values in the full amount – regardless of the capital ownership percentage. A remaining balancing item on the asset side is reported as goodwill. A remaining balancing item on the liabilities side is recognised in the income statement. Earnings and expenses of a subsidiary are included in the consolidated fi nancial statement from the date of acquisition. Earnings and expenses of a subsidiary remain included in the consolidated fi nancial statement until control through the parent company ends. As part of the deconsolidation, the residual carrying amounts of the goodwill are considered in the calculation of the result of the disposal.

Expenses and income between Group companies, as well as receivables and liabilities are set off against each other. Interim results are eliminated if they are not of subordinate signifi cance. In the individual fi nancial statements, depreciation or appreciation on shares in consolidated companies are always reversed.

The shares in associated companies are accounted for using the equity method. According to the equity method the shares in an associated company are shown in the balance sheet at acquisition cost plus post-acquisition changes in the Group's equity holdings. The goodwill related to the associated company is included in the carrying amount of the investment and is not amortised. The consolidated statement of comprehensive income includes the Group's participation in the success of the associated company. Changes shown directly in the equity of the associated company are recognised proportionally and presented accordingly in the statement of changes in equity. The fi nancial statements of the associated companies are prepared on the same balance sheet date as the fi nancial statement of the parent company. To the extent required adjustments are made the Group's uniform accounting and valuation methods.

for fi nancial years that start on or after 1 January 2015. Prior periods do not have to be adjusted for fi rst time adoption, but there is a requirement to disclose the effects of fi rst-time adoption. Ecotel is currently reviewing the resulting effects on the presentation of the asset situation, fi nancial situation earnings situation or cash fl ow of the Group.

Also in October 2010 the IASB issued requirements on accounting for fi nancial liabilities. These are integrated in IFRS 9 "Financial Instruments" and replace the existing provisions on this subject in IAS 39 "Financial Instruments: Recognition and Measurement". In the new pronouncement, the requirements relating to recognition and derecognition, as well as most of the requirements for classifi cation and measurement are carried forward unchanged for IAS 39. The new IFRS 9 modifi es the requirements relating to the fair value option for fi nancial liabilities to address the issue of an entity's own credit risk. The prohibition of fair value measurement of derivative liabilities that are linked to an unquoted equity instrument and that must be settled by delivery of an unquoted equity instrument, is eliminated. The pronouncement must be applied for fi nancial years that start on or after 1 January 2015. Prior periods do not have to be adjusted for fi rst time adoption, but there is a requirement to disclose the effects of fi rst-time adoption. This pronouncement has not yet been adopted by the European Union in European legislature. ecotel is reviewing the resulting effects on the presentation of the asset situation, fi nancial situation earnings situation and cash fl ow of the Group.

The other changes mentioned have no relevance for the ecotel consolidated fi nancial statements.

In addition to the balance sheet and the statement of comprehensive income, a cash fl ow statement and a statement of changes in equity are shown.

To improve the clarity of presentation various items of the consolidated balance sheet and the consolidated statement of comprehensive income are summarised. These items are appropri ately broken out and explained in the notes. The consolidated statement of comprehensive income has been prepared according to the total cost method.

Because ecotel did not have the appropriate circumstances in the previous year, nor in fi nancial year 2012, there will be no presentation of other comprehensive income at the end of the profi t and loss account.

The fi nancial year of ecotel communication ag and its fully consolidated subsidiaries corresponds to the calendar year. The consolidated fi nancial statement is prepared in euros (€). All amounts, including the previous year's numbers are specifi ed in thousands of euros (€ thousand).

In addition to the Group management report, the audited consolidated fi nancial statements are fi led in the German Federal Gazette; the consolidated fi nancial statement will be released for publication on 25 March 2013, through submission by the management board to the supervisory board of ecotel communication ag.

CONSOLIDATED GROUP

In addition to ecotel communication ag, all subsidiaries (previous year: all except one) are included in the consolidated fi nancial statement for which ecotel communication ag directly or indirectly controls the majority of voting stock.

init.voice GmbH, which previously was not consolidated, is included in the consolidated fi nancial statement for the fi rst time, effective as of 1 January 2012. This company was established by easybell GmbH on 9 November 2011 with capital stock of € 25 thousand. Due to the marginal business activity, the economic conditions as of 1 January 2012 were used as the basis for the initial consolidation. The assets, debts and contingent liabilities of init.voice GmbH had the following carrying amounts at the time of initial consolidation on 1 January 2012, which due to a lack of hidden reserves also corresponded to their fair value:

Init.v oice Gm bH € th and ous	Car ryin g unt amo	Adju stm ent unt amo to th e fa ir va lue	Fair valu e
Goo dwil l	0.0	1.4	1.4
Inta ngib le a sset s	26.2	0.0	26.2
Fixe d as sets	0.4	0.0	0.4
Rec eiva bles and oth sset er a s	0.2	0.0	0.2
Liqu id fu nds	23.8	0.0	23.8
Oth nt lia biliti er c urre es	– 27 .0	0.0	– 27 .0
Initi al c apit al s tock	23.6	1.4	25.0

Initial consolidation or deconsolidation always occurs at the time of acquisition or sale of equity interests.

In the reporting and comparison periods ecotel communication ag had the following direct and indirect holdings:

1) Without management board members / managing directors and trainees 2) Previous year's fi gures in parentheses

Consolidated fi nancial statement key date for preparation of the consolidated fi nancial statement is December 31, which is also the key date of the individual fi nancial statement of the parent company and all fully-consolidated subsidiaries.

Acquisitions and disposals of equity interests

On 23 May 2012 ecotel communication ag acquired a capital share of 20.27 % in the newly founded Mediagate Participations S.à.r.l. with its main offi ce in Mamer (Luxembourg) for the amount of € 4 thousand. Since this company transacted no substantial business as of 31 December 2012, the holdings in this company are reported in the consolidated fi nancial statements at the acquisition cost of € 4 thousand.

Accounting and valuation methods

The annual fi nancial statements of the companies consolidated in the Group are prepared in accordance with uniform accounting and valuation methods. The valuations in the consolidated fi nancial statements are not infl uenced by tax regulations; they are determined solely by the economic presentation of the asset, fi nance, and earnings position in accordance with IFRS regulations.

In addition, for the consolidated fi nancial statements the supplementary provisions of Section 315a of the German Commercial Code (HGB) were complied with.

Assets are capitalised if the Group is entitled to all essential opportunities and risks associated with their use. Valuation is executed at historical cost of acquisition or manufacture with the exception of specifi c fi nancial assets.

Acquisition costs include all considerations that have been completed to acquire an asset and to place it in operational condition. Manufacturing costs include all costs that can be directly allocated to the manufacturing process as well as appropriate portions of the production-related overhead costs. Borrowing costs that can be allocated directly to the construction or manufacturing of a qualifi ed asset are always capitalised as a portion of the costs acquisition or manufacture. Otherwise, borrowing costs are recognised as an expense in the period in which they are incurred. Qualifi ed assets as defi ned by IAS 23, as in the previous year, are not present in the ecotel Group. Purchased intangible assets are valued at cost of acquisition, self-provided intangible assets from which most likely a future benefi t will fl ow to the Group, and which can be reliably valued, are assessed at cost of manufacture and amortised using the straight-line method

Prev ious r's fi yea gure s in p thes aren es	Sha f re o 2) ital i n % cap	Equ ity in € th 2) and ous	in € th Earn ings 2) and ous	Rev e in enu € th 2) and ous	es1) (Ave Emp loye 2) ) rage
tel p riva te G mbH eco Düs seld orf	100 .0 (100 .0)	644 (931 )	196 (304 )	17 (23)	0 (0)
ybe ll Gm bH eas Pots dam	50.9 8 (50. 98)	369 (365 )	4 (– 8 1)	3,56 9 (2,4 56)	9 (12)
ier-s ervi .de Gm bH carr ces Berl in	100 .0 (100 .0)	478 (196 )	282 (66)	2,85 8 (2,0 46)	3 (0)
rcal l Gm bH spa Pots dam	100 .0 (100 .0)	2,63 4 (1,3 08)	1,32 6 (834 )	3,66 5 (4,6 40)	0 (0)
Init.v oice Gm bH Berl in	100 .0 (100 .0)	112 (24)	88 (– 1 )	383 (0)	1 (0)
r Gm bH nac ama Düs seld orf	100 .0 (100 .0)	2,20 7 (2,9 13)	– 6 (653 )	2,67 1 (3,4 88)	15 (17)
Gm bH mvn eco Düs seld orf	48.6 5 (45. 0)	– 2,9 81 (– 3 ,472 )	492 (– 27 )	4,52 9 (3,2 92)	14 (13)

Prev ious r's fi yea gure s in p thes aren es	Sha f re o 2) ital i n % cap	Equ ity in € th 2) and ous	in € th Earn ings 2) and ous	Rev e in enu € th 2) and ous	) (Ave es 1 Emp loye 2) ) rage
Plus Gm bH syn ergy Rath eno w	49.9 (49. 9)	– 67 9 (– 5 11)	– 16 8 (– 12 9)	370 (333 )	8 (12)
Med iaga te P artic ipat ions S.à. r.l. Mam er (L mbu rg) uxe	20.3 (0.0 )	16 (0)	-2 (0)	0 (0)	0 (0)

over their presumable economic useful life, unless in exceptional cases a different amortisation method more closely corresponds to the course of their use.

Research costs are treated as current expenses. Development costs are capitalised and amortised linearly if a newly developed product or procedure can be clearly delimited, is technically feasible and either is intended for the company's own use or marketing. In addition capitalisation has for its prerequisite that clear expense allocation is possible, that costs are covered through future fl ow of funds with suffi cient probability and the ability to use or sell the intangible asset.

Goodwill from consolidation is subject to an impairment test if there are indications of an impairment, at least once a year, for the cash generating unit in question.

According to IAS 36 the carrying value is to be reported in addition to the recoverable amount. The recoverable value is defi ned as the higher of the two values fair value less costs to sell and the value in use.

Con sion d co ial p erty rig hts ces s an mm erc rop	3 – 5 ye ars
Dev elop nt c osts me	5 ye ars
Sof twa re	3 ye ars
Cus er b tom ase	6 – 18 y ear s

The following useful lives are regularly used as the basis of the valuation:

If there are indications of an impairment and if the recoverable amount is below the historic cost of acquisition or manufacture, the intangible assets are written down. The recoverable amount of an asset corresponds to the higher value net sale proceeds and cash value of the payment fl ows that must be allocated to the asset (value in use).

Items of property, plant, and equipment are valued at cost of acquisition or cost of manufacture, reduced by use-related scheduled depreciation and written down, if applicable. Property, plant and equipment is always depreciated over the presumable useful life using the straight line method, unless in exceptional cases a different depreciation method better corresponds to the course of the useful life. Property, plant, and equipment is regularly depreciated over the following economic useful lives:

Oth quip nt, plan t an d of fi ce uipm ent er e me eq	3 – 7 ye ars
----------------------------------------------------------------------------------------	--------------------

If there are indications of an impairment and if the recoverable amount is below the historic cost of acquisition or cost of manufacture, items of property, plant, and equipment are written down. If the reasons for impairments carried out in previous years do not apply, appropriate write-ups are carried out. For reasons of simplicity and materiality low-value capital goods are completely written down in the year of acquisition and are shown as disposals.

Inventoriesare assessed at cost of acquisition or the net sale value.

Receivables and other assets are initially recognised at fair value with due consideration of transaction costs incurred and correspondingly carried forward. Receivables bearing no interest or low interest with a term over one year are discounted on the basis of interest rates that are in line with the market. All identifi able individual risks are carried at appropriately impaired values, if indications exist in the specifi c case. Receivables denoted in foreign currency are evaluated at the exchange rate on the balance sheet date.

Prepaid rent and insurance premiums are recognized as prepaid expenses and accrued income and are shown under other assets.

Other provisions take into account all obligations identifi able on the balance sheet date that are based on past transactions or past events, and for which the amount or date of settlement are unclear. The provisions are recognised with the probable settlement amount. Offsetting with positive profi t contributions does not occur. Provisions are only formed if they are based on a legal or actual obligation to a third party. Non-current provisions are accounted for with their settlement amount on the balance sheet date if the interest effect resulting from discounting is material. The settlement amount also includes the cost increases that must be considered on the balance sheet date in accordance with IAS 37.

Liabilities are always recognised at the time they are incurred with the amount of the consideration received; transaction costs incurred in this regard, that are not measured at their fair value through profi t or loss, are taken into account. Liabilities are subsequently valued at the historical cost of acquisition. Non-current liabilities are discounted on the basis of interest rates that are in line with the market. Liabilities denoted in a foreign currency are valued at the exchange rate on the balance sheet date.

Deferred taxes are formed at different assessment of the assets and liabilities in the consolidated balance sheet and the tax balances of the individual companies, if these different assessments result in income that must be taxed at a higher or lower rate than would have been the case under the standard of the consolidated balance sheet. Deferred tax assets also include claims for tax reductions, that arise due to the expected future use of tax loss carryforwards, and whose realisation is ensured with adequate certainty. Deferred taxes are determined on the basis of the tax rates that apply or are expected in the individual countries at the time of realisation. Deferred taxes on corporation tax carryforwards of domestic Group companies have been calculated as in the previous year at 15 %, plus 5.5 % solidarity surcharge, and on trade tax loss carryforwards at 13 – 16 %. These rates have been used appropriately for determination of deferred taxes on temporary differences if these differences reverse in the future. Currently there are no foreign Group companies.

Derivative fi nancial instruments are used in the ecotel Group only for hedging interest change risks from third-party fi nancing of business activity and for hedging currency risks from expected foreign currency transactions. In accordance with IAS 39 derivative fi nancial instruments are accounted for at fair value; the change in fair value is shown with effect on net income in the fi nance result. Fair value is determined by relying on market prices quoted on the capital market that are sampled at the appropriate fi nancial institutions as of the balance sheet date. Derivative fi nancial instruments with a positive fair value are accounted for under other fi nancial assets; derivative fi nancial instruments with a negative fair value are accounted for under the other fi nancial liabilities. Initial booking in occurs on the settlement date, which as a rule is a few days after the date the debt was incurred (transaction date). The interest rate swap contracts and forward-exchange transactions used by ecotel communication ag fall under the fi nancial instrument category "Financial instruments held for sale" (IAS 39.9) and are recognised in the balance sheet at their market values until they are booked out in the case of expiration or dissolution.

Investments in non-consolidated companies are recognised in the balance sheet at cost of acquisition due to the lack of availability of market prices.

The other fi nancial instruments of the ecotel Group relate to the category "Loans and receivables". At the time of their initial recognition in the balance sheet these are valued at their fair value including directly allocatable transaction costs. They are subsequently carried at historical cost of acquisition with application of the effective interest method.

Recognition of sales revenues and other operating income always occurs when the service is provided or the assets have been delivered and thus the transfer of risk has taken place. Provisions for warranties are formed at the time of realisation of the corresponding sales revenues.

In the mobile communications business sales are generated through the offering of mobile communications services and one-time activation charges. Revenues for mobile communications services include monthly service charges, charges for special characteristics, as well as connection and roaming charges, for which ecotel bills the customer. Revenues for mobile communications services are realised on the basis of minutes of use or other agreed rate models minus credit memos and adjustments due to discounts.

Sales revenues from the data and Internet business are reported with the provision of the service. For contracts on the basis of fi xed prices, sales revenues are reported proportionally over the term of the service contract, and for all other service contracts sales revenues are reported on the basis of the service provided or based on use. Sales revenues from contracts for services billed according to time and material expense are recognised with provision of the work hours and the incurring of direct costs at the contractually specifi ed hourly rate.

Sales revenues from the sale of hardware are realised as soon as the product has been shipped to the customer, and if there are no unfulfi lled obligations on the part of the company that would affect the ultimate acceptance on the part of the customer. All costs arising from these obligations are recognised at realisation of the appropriate sales revenue.

If the conditions for realisation of service revenues are satisfi ed in accordance with IAS 18.20 ff., on the level of completion of the transaction on the balance sheet date, the corresponding revenue is recognised on the basis of the assessment of the services provided according to this method.

Operating expenses are recognised with effect on net income when the service is used or at the time of causation.

Interest income and expense are recognised in the period in which they occur. Dividends are always collected when the claim legally occurs. Within the fi nancial result the costs of capital procurement that cannot be offset against equity, such as the costs for supporting the share price, are shown. The result of companies accounted for at equity is shown separately within the fi nancial result.

When preparing the consolidated fi nancial statement, discretionary decisions and assumptions are made and estimates have been applied that have an effect on the amount and disclosure of the recognised assets and liabilities, earnings and expenses, as well as the contingent liabilities. The discretionary decisions, assumptions and estimates essentially refer to the uniform Group determination of economic useful lives, the reporting of provisions, the possible realisation of future tax relief, as well as the verifi cation of the intrinsic value of cash-generating units and of underlying parameters for assets. The assumptions upon which the respective estimate is based and the corresponding carrying amounts are explained for the individual items of the balance sheet, as well as for the statement of comprehensive income. The actual values may deviate in some cases from the assumptions and estimates made. Such deviations are considered with effect on net income at such a time when improved knowledge makes this necessary. Considerable risks as defi ned in IAS 1.129 that could be inherent in the assumptions and estimates were not identifi ed at the time the consolidated fi nancial statement was prepared.

Amo unts in € thou sand	Goo dwil	l C ions onc ess , indu stria l an d sim ilar righ ts and ets ass and lice nse s in su ch r ight s and ets ass	Dev elop t co sts men	Cus tom er rela tion ship s	Prep ents aym on t ible asse ang ts	Tota l
Acq uisi tion nd m fact urin ts a cos anu g s of 01/ 01/2 012 ts a cos	14,4 26	6,78 2	3,19 3	9,42 4	0	33,8 25
Cha to t he c olida tion nge ons gro up	1	27	0	0	0	28
Add ition s	0	246	46	0	1,01 6	1,30 8
Tran sfer s	0	0	0	0	0	0
Disp ls osa	0	7	266	0	0	273
As of 1 2/31 /201 2	14,4 27	7,04 8	2,97 3	9,42 4	1,01 6	34,8 88
Wri te-d of 0 1/01 /201 2 own s as	2,66 9	5,52 1	2,38 4	6,28 4	0	16,8 58
Cha to t he c olida tion nge ons gro up	0	1	0	0	0	1
Sch edu led add ition s	0	482	501	640	0	1,62 3
Uns che dule d ad ditio ns	2,88 4	0	0	0	0	2,88 4
Disp ls osa	0	5	267	0	0	272
As of 1 2/31 /201 2	5,55 3	5,99 9	2,61 8	6,92 4	0	21,0 94
Car s of 12/ 31/2 ryin ts a 011 g am oun	11,7 57	1,26 1	809	3,14 0	0	16,9 67
Car ryin s of 12/ 31/2 ts a 012 g am oun	8,87 4	1,04 9	355	2,50 0	1,01 6	13,7 94

The intangible assets developed in fi nancial year 2012 as follows:

In the previous year 2011 intangible assets developed as follows:

(1) Goodwill and other intangible assets

Explanations for the consolidated balance sheet

Recognised development costs in fi nancial year 2012 were € 46 thousand (previous year: € 174 thousand). These relate to an ecotel communication ag software solution developed in house for a new line availability query.

Customer relationships include purchased customer bases from the acquisition of nacamar in 2007 totalling € 2,001 thousand (previous year: € 2,210 thousand). An additional customer base resulted at ecotel from the former ADTG Allgemeine Telefondienstleistungs GmbH (€ 113 thousand, previous year: € 338 thousand). This customer base is amortised over a useful life of six years, the "nacamar" customer base is amortised over a useful life between 10 and 18 years depending on the customer segment. The customer relationships relative to DSLCOMP GmbH purchased in 2006 as of the balance sheet date are shown at € 383 thousand (previous year: € 583 thousand) they are amortised linearly over ten years. Other customer relationships are recognised as of the balance sheet date at easybell GmbH (€ 3 thousand, previous year: € 9 thousand) that is amortised over six years.

In reporting year 2012 the impairments of the nacamar goodwill totalling € 2,884 thousand described below were reported in the statement of comprehensive income. The goodwill originated in connection with the acquisition of the company in the year 2007. Due to the loss of the biggest customer in the fi rst half of 2011 and the failure to acquire two major customers that had initially been estimated as probable, the goodwill was completely written off in fi nancial year 2012.

In the previous year the impairments of non-current assets totalling € 375 thousand related to the impairment of goodwill of nacamar (€ 350 thousand), due to the change of the nacamar customer, ZDF, and i-cube (€ 25 thousand) due the sale of the reseller business. Other impairment of non-current assets resulted in the previous year from i-cube licenses, € 112 thousand, and assets under construction of ecotel communication ag of € 54 thousand.

The goodwill shown is comprised as follows with consideration of impairments carried out in 2012 due to reduced recoverability:

Amo unts in € thou sand	Goo dwil	l C ions onc ess , indu stria l an d sim ilar righ ts and ets ass and lice nse s in su ch r ight s and ets ass	Dev elop t co sts men	Cus tom er rela tion ship s	Prep ents aym on t ible asse ang ts	Tota l
Acq uisi tion nd m fact urin ts a cos anu g s of 01/ 01/2 011 ts a cos	14,6 66	6,55 3	3,01 9	9,42 4	0	33,6 62
Cha to t he c olida tion nge ons gro up	– 24 0	– 32 2	0	0	0	– 56 2
Add ition s	0	481	174	0	0	655
Tran sfer s	0	70	0	0	0	70
Disp ls osa	0	0	0	0	0	0
2/31 /201 As of 1 1	14,4 26	6,78 2	3,19 3	9,42 4	0	33,8 25
Wri of 0 1/01 /201 te-d 1 own s as	2,53 4	5,11 3	1,89 9	5,61 4	0	15,1 60
Cha he c olida tion to t nge ons gro up	– 24 0	– 26 8	0	0	0	– 50 8
Sch edu led add ition s	0	564	485	670	0	1,71 9
Uns che dule d ad ditio ns	375	112	0	0	0	487
Disp ls osa	0	0	0	0	0	0
As of 1 2/31 /201 1	2,66 9	5,52 1	2,38 4	6,28 4	0	58 16,8
Car ryin ts a s of 12/ 31/2 010 g am oun	12,1 32	1,44 0	1,12 0	3,81 0	0	18,5 02
Car ryin s of 12/ 31/2 011 ts a g am oun	11,7 57	1,26 1	809	3,14 0	0	16,9 67

Cas h-G ratin g U nit ( CGU ) ene in € Amo unts thou sand	Car ryin t g am oun 12/3 1/20 11	Imp airm 201 2 ents	Acq uisit ion from init ial solid atio con n 201 2	Car ryin t g am oun 12/3 1/20 12
Bus ines s So lutio ns	8,73 2	0	0	8,73 2
nac ama r	2,88 4	2,88 4	0	0
ybe ll eas	124	0	0	124
ier-s ervi carr ces	17	0	0	17
Init- voic e	0	0	1	1
Tota l	11,7 57	2,88 4	1	8,87 4

Property, plant, and equipment developed in fi nancial year 2012 as follows:

Amo unts in € thou sand	Lan d, la nd righ ts a nd b uil ding s, in clud ing build ings on third ty la nd -par	Tec hnic al ipm ent equ and hine mac s	Oth er ipm ent, equ d of fi ce plan t an ipm ent equ	Prep ents aym on t ible ang ts a nd asse ts u nde asse r stru ctio con n	Tota l
Cos f ac quis ition and nufa ing ts o ctur ma As of 0 1/01 /201 2	5,54 6	0	8,56 6	180	14,2 92
Cha to t he c olida tion nge ons gro up	0	0	0	0	0
Add ition s	274	95	1,41 5	1,02 0	2,80 4
Tran sfer s	0	0	61	– 61	0
Disp ls osa	892	0	39	0	931
As of 1 2/31 /201 2	4,92 8	95	10,0 03	1,13 9	16,1 65
Wri te-d of 0 1/01 /201 2 own s as	2,66 2	0	6,44 2	108	9,21 2
Cha to t he c olida tion nge ons gro up	0	0	0	0	0
Sch edu led add ition s	770	17	968	0	1,75 5
Uns che dule d ad ditio ns	188	0	0	0	188
Disp ls osa	891	0	39	0	930
of 1 2/31 /201 As 2	2,72 9	17	7,37 1	108	10,2 25
Car ryin s of 12/ 31/2 011 ts a g am oun	2,88 4	0	2,12 4	72	5,08 0
Car ryin s of 12/ 31/2 012 ts a g am oun	2,19 9	78	2,63 2	1,03 1	5,94 0

(2) Property, plant, and equipment

In accordance with IAS 36, impairment tests were performed in the fi nancial year just ended for determination of the value in use, according to the discounted cash fl ow method for verifi cation of the recovery of the goodwill shown. The data of the respective company planning serves as the basis in this regard (forecast period: 5 years).

In the previous year there was an impairment of goodwill totalling € 375 thousand.

The following assumptions served as the basis for performing the impairment tests: Capitalisation interest rate 6.8 % (previous year: 6.0 %) after taxes or 9.9 % (previous year: 8.6 %) before taxes, beta factor 1.0 (previous year: 0.9), debt ratio 28 % (previous year: 34 %). The annual growth rates for the fi rst fi ve years at nacamar GmbH were 5 % (previous year: 5 %), at ecotel 4 % (previous year: 0 %) and at easybell 10 % (previous year: 0 %). For the perpetual annuity at nacamar GmbH a growth rate of 0 % was used (previous year: 1 %) as well as for all other CGUs a growth rate of 0 % was likewise used (previous year: 0 %). The income tax rate used was 31 % (previous year, 31 %).

Amo unts in € thou sand	Lan d, la nd righ ts a nd b uil ding s, in clud ing build ings on third ty la nd -par	Tec hnic al ipm ent equ and hine mac s	Oth er ipm ent, equ plan d of fi ce t an ipm ent equ	Prep ents aym on t ible ang nd ts a asse ts u nde asse r stru ctio con n	Tota l
Cos ts o f ac quis ition and nufa ctur ing ma As of 0 1/01 /201 1	5,50 8	0	7,76 4	256	13,5 28
Cha to t he c olida tion nge ons gro up	0	0	– 11	0	– 11
Add ition s	170	0	840	52	1,06 2
sfer Tran s	0	0	58	– 12 8	– 70
Disp ls osa	132	0	85	0	217
As of 1 2/31 /201 1	5,54 6	0	8,56 6	180	14,2 92
Wri te-d of 0 1/01 /201 1 own s as	2,12 5	0	5,48 9	54	7,66 8
Cha to t he c olida tion nge ons gro up	0	0	– 10	0	– 10
Sch edu led add ition s	543	0	1,04 8	0	1,59 1
Uns che dule d ad ditio ns	0	0	0	54	54
Disp ls osa	6	0	85	0	91
As of 1 2/31 /201 1	2,66 2	0	6,44 2	108	9,21 2
Car ryin ts a s of 12/ 31/2 010 g am oun	3,38 3	0	2,27 5	202	5,86 0
Car 12/ 31/2 ryin ts a s of 011 g am oun	2,88 4	0	2,12 4	72	5,08 0

In fi nancial year 2011 development of property, plant, and equipment of the Group was presented as follows:

Future lease payments

Outstanding leasing obligations existed as of 31 December 2012 only from operating contracts and no longer from fi nancing leasing contracts. The obligations from operating leasing contracts as of 31 December 2012 are presented as follows:

Amo unts in € thou sand	Up t o 1 ye ar	From 1 y ear to 5 yea rs	From 5 ye ars	Tota l 12/3 1/20 12
Ope d of fi ce (lea ) ratin ipm ent sing g an equ	210	212	0	422
Oth ntal trac ts er re con	845	2,94 0	820	4,60 5
	1,05 5	3,15 2	820	5,02 7

Impairments of land, land rights and buildings, including buildings on third-party land totalling € 188 thousand were due to technically outdated water chillers in the segment of Business Customers.

As of the balance sheet date there was an obligation to a wholesale partner to purchase router hardware with a value of about € 3.0 million (previous year: € 0).

(3) Financial assets

	1,71 8	1,33 5	1,15 2	4,20 5
Oth ntal trac ts er re con	1,52 1	1,10 5	1,15 2	3,77 8
Ope d of fi ce (lea ) ratin ipm ent sing g an equ	197	230	0	427
Amo unts in € thou sand	Up t o 1 ye ar	From 1 y ear to 5 yea rs	From 5 ye ars	Tota l 12/3 1/20 11

(4) Non-current receivables

The leasing obligations are essentially the result of leasing contracts for company vehicles. The other rental contracts essentially include the rent of offi ce space, and of the computer centre.

From fi nance leasing relationships of nacamar, only current liabilities totalling € 70 thousand existed in the previous year, as of 31 December 2011.

As of 31 December 2011 the following fi nancial obligations arising from operating and fi nancing leasing contracts existed:

The payments from leases recognised as expenses in the reporting period are stated in text number 19.

Financial assets accounted for using the equity method at € 1,050 thousand (previous year: € 1,586 thousand) essentially involve a loan from ecotel communication ag to the company, mvneco GmbH, accounted for at equity, with an annual interest rate of 5 %, and a qualifi ed subordinated claim. For the amount of the negative equity value of mvneco GmbH, which changed from € 958 thousand in the previous year to € 790 thousand as of 31 December 2012, an increase in value of the loan totalling € 168 thousand (previous year depreciation: € 12 thousand) was possible. Due to the persistent decreased fi nancial strength of mvneco GmbH, however, an additional decrease in value of € 779 thousand was necessitated by the valuation rules of IAS 28.31 in connection with IAS 39, so that the loan had a carrying value of € 1.050 thousand as of the balance sheet date.

The carrying value of the holding in mvneco GmbH, accounted for at equity was € 0 thousand as of 31 December 2012, which was the same as that of the previous year, as the original acquisition costs of this holding of € 254 thousand, due to the prorated accumulated net losses of the company, had to be written off completely. The carrying value includes prorated goodwill of € 131 thousand (previous year: € 131 thousand). As of the balance sheet date the company showed assets in the amount of € 2,721 thousand and liabilities in the amount of € 5,701 thousand.

Likewise allocated to the fi nancial assets accounted for using the equity method is a loan to the company synergyPlus GmbH accounted for at equity for the amount of € 360 thousand (previous year: € 624 thousand). The negative equity value as of 31 December 2012 was € 191 thousand (previous year: € 131 thousand) and was taking into account as of 31 December 2012 by a corresponding write-down of the loan. Beyond the equity valuation an impairment of € 107 thousand was effected and reported in the statement of comprehensive income under fi nancial expenses.

(5) Inventories

(6) Trade receivables and other receivables and current assets

Resi dual term Tota l Resi dual term Tota l Amo unts in € thou sand 1 ye 12/3 1/20 11 1 ye 12/3 1/20 12 over ar over ar Trad ceiv able e re s vis- a-vi s th ird p artie 0 13,3 37 0 12,4 60 s s af fi liat vis- a-vi ed c anie 0 27 0 0 omp s vis- a-vi iate d co nies 0 60 0 54 s as soc mpa 0 13,4 24 0 12,5 14 Oth ceiv able d cu t as sets er re s an rren Prep aid 0 286 0 361 exp ens es Rem aini ther eiva bles and 0 925 0 959 rent ets ng o rec cur ass 0 1,21 1 0 1,32 0

Trade receivables from affi liated companies in the previous year existed vis-a-vis init.voice GmbH, which was not consolidated at that time. The effect on results of the increase of the provision for losses on trade receivables is shown in the other operating expenses that include the release of provisions in other operating income. The receivables do not bear interest and thus are not subject to an interest rate risk. Due to the short-term payment goals the carrying values correspond to the fair values.

(7) Current and deferred taxes on earnings

Amo in € thou sand unts

	202	27
Actu al in x cla ims e ta com	9	27
Defe rred inc tax cla ims ome	193	0
Amo unts in € thou sand	12/3 1/20 11	12/3 1/20 12

The carrying value of the holding in synergyPLUS GmbH, accounted for at equity, was € 0 thousand as of 31 December 2012, since the original acquisition costs of this holding of € 150 thousand, due to the prorated accumulated net losses of the company, had to be written off completely. As of the balance sheet date the company showed assets in the amount of € 84 thousand and liabilities in the amount of € 763 thousand.

In addition, the holdings in Mediagate Participations S.à.r.l. with headquarters in Mamer (Luxembourg) of € 4 thousand are reported in the fi nancial assets.

The non-current receivables are comprised essentially of the loan made by ecotel communication ag to synergyPlus GmbH which was reclassifi ed in the current fi nancial year in the fi nancial assets accounted for based on the equity method in accordance with IAS 28.29.

The inventories shown essentially relate to routers. These are made available to the customers when a service contract is concluded for the term of the contract and when use begins are assigned to the property, plant and equipment to be depreciated. A devaluation of the terminal devices not yet in use to the net disposal value did not occur in the fi nancial year.

(9) Equity The changes in Group equity are presented in the statement of changes in equity.

The number of shares of ecotel communication ag in circulation as of 31 December 2012 was 3,685,096 (previous year: 3,752,500) after offsetting the 214,904 shares held by the company itself (previous year: 147,500). The shares are issued as no-par value bearer shares with a prorated amount of the capital stock of € 1.00. Due to the repurchase of shares in the fi nancial year, the capital stock was reduced by € 67 thousand in 2012.

Share-based remuneration

Due to the failure to attain the success goals, all subscription rights issued from the former share option plan in accordance with the resolution of the Annual General Meeting of ecotel communication ag of 27 July 2007 will expire as of 30 September 2011.

The last addition to the capital reserve was registered in the previous year with € 17 thousand as personnel costs. Altogether, € 318 thousand were added to the capital reserve up until the expiration of this share option plan.

Shares of non-controlling shareholders

The non-controlling interests relate to the indirect minority interests in the equity of easybell GmbH (€ 181 thousand; previous year: € 179 thousand), of sparcall GmbH (€ 1,279 thousand, previous year € 629 thousand), carrier-services.de GmbH (€ 231 thousand, previous year € 92 thousand) and init.voice GmbH (€ 43 thousand), included for the fi rst time.

Share ownership

The following material stakes in excess of 10 % are held in the company:

	6,23 5	7,53 3
Cas h on han d an d ch ecks	23	1
Dep osits in b ank s	6,21 2	7,53 2
Amo in € thou unts	sand 12/3 1/20 11	12/3 1/20 12

(8) Cash and cash equivalents

	%
Pete r Zil s	25.6 4 %
Trea sha sury res	5.51 %
Dive rsifi e d ho lding s	19.8 9 %
Inte llect Inv estm ent & M ent Ltd. ana gem	25.0 9 %
IQ M aft m artra de H oldi nd M entg llsch bH ng u ana gem ese	6 % 14.5
PVM Priv Valu es M edia AG ate	9.31 %

ecotel communication ag: Publication in accordance with § 26, para. 1 German Securities Trading Law (WpHG) with the goal of European-wide circulation 01/05/2012

Publication of a voting rights announcement communicated through the DGAP – a company of EquityStory AG.

The issuer is responsible for the content of the announcement.

Announcement of the companies

1) Augur Financial Opportunity SICAV, Luxembourg, Luxembourg

2) Augur Financial Holding II S.A., Luxembourg, Luxembourg 3) Augur Financial Holding Zwei GmbH & Co. KG, Frankfurt am Main, Germany 4) Augur Capital GmbH, Bad Soden am Taunus, Germany 5) Augur Zwei Verwaltungs GmbH, Frankfurt am Main, Germany,

that the share in the voting rights of ecotel communication ag, Prinzenalle 11, 40549 Düsseldorf, underranged the voting right thresholds of 5 % and 3 % on 29 December 2011 and on this day amounted to 0.092 % (this corresponds to 3,600 voting rights).

The voting rights are attributable to all of the companies named in 1) through 5) in accordance with § 22, para. 1, sentence 1, no. 1 of the German Securities Trading Law (WpHG).

Notifi cation from Schnigge Wertpapierhandelsbank AG, Düsseldorf, Germany, of 30 December 2011 that the share in the voting rights of ecotel communication ag, Prinzenalle 11, 40549 Düsseldorf, underranged the voting right thresholds of 5 % and 3 % on 29 December 2011 and on this day amounted to 0.092 % (this corresponds to 3600 voting rights).

Additional notifi cations:

05/23/2012

Publication of an ad-hoc notifi cation in accordance with § 15 WpHG

The management board of ecotel communication ag (WKN 000585434/ ISIN DE0005854343) decided today to repurchase up to 100,000 treasury shares (2.6 % of the current share capital) between 25 May 2012 and 30 September 2012. The shares will be repurchased through the stock exchange. The countervalue per share paid by the company (without ancillary costs) must be within 10 % of the arithmetical average of the closing prices of the shares in the XETRA system on the three trading dates prior to the purchase. Based on the fi nal prices of the shares in the XETRA system on the last three trading dates prior to the decision, this corresponds to a buy-back volume of up to about € 0.51 million.

The management board thus makes use of the authorization resolution of the annual meeting of shareholders on 30 July 2010, which authorizes the management board to purchase treasury shares totalling up to 10 % of the share capital by 29 July 2015. The repurchased shares can be used for all purposes provided for by the authorization resolution of the annual meeting of shareholders.

The latent income tax claims of € 193 thousand in the previous year related to deferred tax claims based on existing corporate tax and municipal trade tax losses carried forward for two subsidiaries. Due to the use of these tax losses carried forward, there were no longer any deferred tax assets from losses carried forward as of 31 December 2012. The effective income tax claims relate to claims for reimbursement of taxes on earnings from trade tax, corporation tax and interest income tax credits.

The shares will be repurchased under the direction of a fi nancial institution in compliance with §§ 14 para. 2, 20a para. 3 WpHG in accordance with the Safe-Harbor provision pursuant to directive (EC) no. 2273/2003. The fi nancial institution commissioned with the repurchase will make its decisions on the time of acquisition of the shares independently and uninfl uenced by ecotel communication ag.

08/24/2012

Announcement of ecotel communication ag, Düsseldorf, Germany, in accordance with § 26, para. 1, sentence 2 of the German Securities Trading Law (WpHG) that the percentage of treasury shares in ecotel communication ag, Düsseldorf, Germany (ISIN: DE0005854343) exceeded the threshold of 5 % on 22 August 2012 and on this day is 5.02 % (number of voting rights: 195,800, total number of voting rights: 3,900,000).

Capital management

The ecotel Group manages its capital with the primary goal of supporting the business activity and of assuring that the company remains a going concern in the long term. Capital management includes all equity as well as borrowings on the balance sheet. Summary quantitative information on the managed capital can be found in the balance sheet and in the corresponding notes. The important goal is compliance with the fi nancial covenants agreed with the banks. These fi nancial covenants consist of compliance with certain standards with respect to the equity ratio, net debt-EBITDA ratio and the EBITDA-sales revenue ratio. The fi nancial covenants are reviewed within the framework of the monthly reporting. In this process, also future developments relative to their effects on the fi nancial covenants are analysed in order to implement measures in a timely manner, if necessary.

For all three current covenants, ecotel was clearly within the prescribed intervals in fi nancial year 2012.

in € Amo unts thou sand	Initia l lev el 01/0 1/20 12	Con ptio sum n	Rev l ersa	Allo catio n	Tran s / bala sfer ncin g	Cas ol inve h po ntor y 12/3 1/20 12
Effe ctive ning s ta ear x	314	165	0	521	0	670
Defe rred tax rnin es o n ea gs	979	291	0	0	0	688
Pro visi for inc tax ons ome es	1,29 3	456	0	521	0	1,35 8
of w hich wit h a term of u p to 1 y ear	314	165	0	521	0	670

(10) Current and deferred income taxes (11) Other fi nancial liabilities, trade liabilities and other liabilities

Amo unts in € tho d usan	Resi dual term 1 ye up to ar	Tota l 12/3 1/20 11	Resi dual term 1 ye up to ar	Tota l 12/3 1/20 12
Cre dit l iabil ities	2,71 6	9,32 5	2,48 9	7,32 0
Oth er	0	0	0	0
Fina ncia l de bts	2,71 6	9,32 5	2,48 9	7,32 0
Acc ts p ble oun aya	11,5 55	11,5 55	12,9 68	12,9 68
Liab ilitie ocia ted ies s to ass com pan	134	134	213	213
Oth er ta xes	330	330	167	167
Soc ial s rity ecu	41	41	11	11
Wag nd s alar y to be paid es a	408	408	412	412
Oth l-rel ated liab ilitie er p erso nne s	192	192	98	98
it / su Ann ual aud isor y bo ard perv	102	102	133	133
Oth er	647	647	685	685
Oth er li abil ities	1,72 0	1,72 0	1,50 6	1,50 6

From the valuation of an interest swap at fair value fi nancial liabilities of € 30 thousand (previous year: € 83 thousand). The change in the fair value in included in the fi nance result.

From the valuation of an exchange rate transaction at fair value, fi nancial liabilities of € 111 thousand (previous year: € 0 thousand). The change in the fair value in included in the fi nance result.

Borrowings essentially relate to an innovation loan taken out in 2009 totalling € 5,000 thousand, a an investment loan totalling € 4,000 thousand taken out in 2011, a KfW investment loan totalling € 570 thousand taken out in 2012 and the current market values of the interest swap and exchange rate transaction. One half of the loan taken out in 2009 consists of an outside capital tranche, the other half consists of a subordinated tranche. Both tranches have a term of ten years; the interest rate is fi xed. The loan taken out in 2011 has a term of fi ve years, the interest rate is determined according to a reference rate plus a margin. The company shares of nacamar GmbH were pledged to the lending bank. The loan taken out in 2012 has a term of fi ve years, with a fi xed interest rate. Current borrowings are essentially the repayment due in 2013 for the three loans.

In the course of the usual business activity the Group is confronted with risks associated with exchange rates, changes in interest rates and credit rating risks that could have an infl uence on the asset, fi nance, and earnings position.

Exchange rate risk: Exchange rate risks occur due to receivables, liabilities, liquid funds and planned transactions that occur or will occur in a currency that is not the functional currency of the Group. Since fi nancial year 2012 the group uses derivative fi nancial instruments in the form of forward exchange transactions to secure US dollar foreign currency risks from future expected payments in foreign currency. At the end of 2012 there existed fi ve forward-exchange transactions with a nominal volume of € 3,290 thousand. All derivative fi nancial instruments are valued as fi nancial assets or fi nancial liabilities affecting net income at fair value as of the key date. The term of the forward-exchange transactions concluded is oriented to the term of the underlying

(12) Reporting of fi nancial instruments

transactions and thus for the most part is in the short-term range. Because the exchange rate risk was low in recent past fi nancial years, no derivative fi nancial instruments have been used thus far to hedge exchange rate risks.

Interest rate risk: In the ecotel Group interest rate risks exist primarily due to the fi nancial liabilities of the Group. Hedges through derivative fi nancial transactions are executed to hedge against negative value changes due to unexpected interest rate movements. At the end of 2012 there existed one interest rate swap with a nominal volume of € 2,000 thousand. At the end of 2011 there existed three interest rate swaps with a nominal volume of € 6,250 thousand. All derivative fi nancial instruments are valued as fi nancial assets or fi nancial liabilities affecting net income at fair value as of the key date. For the business interpretation of the positive or negative fair values of the derivative fi nancial instruments it must be noted that they are balanced out by underlying transactions with compensating risks. The term of the interest rate derivatives concluded is oriented to the term of the underlying transactions and thus for the most part is in the short-term to medium-term range.

Credit risk: A credit risk exists for the Group if transaction partners do not or cannot honour their payment obligations. The maximum default risk is presented on the balance sheet by the carrying amount of the respective fi nancial asset. The development of the receivables portfolio is constantly monitored in order to identify possible default risks early on and implement appropriate measures.

Accordingly, value adjustments for receivables under the following balance sheet items have developed in the Group, as follows:

Adj ustm ents for ivab les 201 2 rece Amo in € thou sand unts	Trad e ivab les rece	Oth ceiv able er re s and oth nt er c urre ts asse	Tota l 12/3 1/20 12
f 01 /01/ As o 201 2	362	0	362
Adju stm ents in t he r rting iod epo per	17	0	17
Disp ls osa	177	0	177
As of 1 2/31 /201 2	202	0	202

Adj for eiva bles 201 1 ustm ents rec Amo unts in € thou sand	Trad e ivab les rece	Oth ceiv able er re s and oth er ent ts curr asse	Tota l 12/3 1/20 11
As o f 01 /01/ 201 1	441	85	526
Adju in t he r rting iod stm ents epo per	0	0	0
Disp ls osa	79	85	164
As of 1 2/31 /201 1	362	0	362

The value adjustments relate completely to the valuation category "Loans and receivables".

As of 31 December 2012, past-due unadjusted receivables existed in the following amount:

Pas t-du adju sted e un ivab les rece	Gro alue ss v 12/3 1/20 12	Pas t-du e adju sted ivab les rece	Una djus ted ivab les d ue i n th e fo llow ing time rece per				iods
Amo unts in € thou sand			Up t o 30 day s	31 – 60 day s	61 – 90 day s	91 – 120 day s	Ove r 120 day s
Trad ceiv able e re s	12,7 16	202	522	170	59	24	214
Oth ceiv able er re s and oth er ent ts curr asse	1,32 0	0	0	0	0	0	0
	14,0 36	202	522	170	59	24	214

Allowances are made for provisions are if there are indications of impairment on past-due fi nancial assets threatened by default if the cash value of the future cash fl ow of these receivables is below the carrying amount shown due to unrecoverability or impairment. For non-overdue and unadjusted receivables, full recoverability is expected.

The stated unadjusted trade receivables that are more than 120 days past due, in the amount of € 214 thousand (previous year: € 287 thousand) relate to receivables that the company still expects to recover. Of these € 11 thousand (previous year: € 10 thousand) relate to the barter transaction of nacamar GmbH; for which liabilities for outstanding invoices are shown corresponding to the missing counter-claims.

As of 31 December 2011 the following situation existed:

In the consolidated balance sheet, fi nancial instruments assessed at fair value can be categorised in the following valuation hierarchy, which refl ects the extent to which the fair value can be observed:

Level 1: Assessments at fair value based on prices listed (unadjusted) on active markets for identical assets or liabilities.

Level 2: Assessments at fair value based on either directly (as prices) or indirectly (derived from prices) observable input data for the asset or liability, that do not represent any listed prices according to level 1.

Level 3: Assessments at fair value via input data referenced for the asset or liability that is not based on observable market data (unobservable input data).

ecotel has at its disposal only fi nancial instruments of levels 1 and 2. During fi nancial year 2012 there were no reclassifi cations between level 1 and level 2. All fi nancial assets in the presentation as of 31 December 2012 below are assessed at fair value and assigned to level 1 (liquid funds) and level 2. For the fi nancial liabilities, current fi nancial liabilities totalling € 141 thousand (previous year: € 83 thousand) belong in level 2. As of 31 December 2012 they relate to the negative market values of the interest rate swap (€ 30 thousand) and of the fi ve forward-exchange transactions (€ 111 thousand) held be ecotel. The previous year's value related to interest rate swaps.

The fi nancial assets and liabilities can be assigned to measurement categories with the following carrying values:

Pas t-du adju sted e un ivab les rece	Gro alue ss v 12/3 1/20 11	Adju sted ivab les rece	Una djus ted ivab les d rece ue in th e fo llow ing time iods per
Amo unts in € thou sand			Up t o 30 day s	31– 60 day s	61– 90 day s	91 – 120 day s	Ove r 120 day s
Trad e ivab les rece	13,7 86	362	174	379	410	25	287
Oth ceiv able d er re s an othe t as sets r cu rren	1,21 1	0	0	0	0	0	0
	14,9 97	362	174	379	410	25	287

Fina ncia l as sets f 12 /31/ 201 2 as o	Fair val ue	Car ryin ts g am oun
		Cas h and h cas ivale nts equ	Loa nd ns a ivab les rece	Fina ncia l instr nts ume d mea sure at fa ir va lue thro ugh profi t and loss	Fina ncia l ts asse ilabl ava e for s ale (not w ithin appli cabil ity of IFR S 7)	Tota l ying carr unts amo
Amo unts in € thou sand
Liqu id fu nds	7,53 3	7,53 3	0	0	0	7,53 3
Trad e ivab les rece	12,5 14	0	12,5 14	0	0	12,5 14
Oth ceiv able nt re er c urre s and ets ass	1,32 0	0	1,32 0	0	0	1,32 0
Fina ncia l ass ets	1,41 4	0	0	0	1,41 4	1,41 4
Tota l	22,7 81	7,53 3	13,8 34	0	1,41 4	22,7 81

Fina ncia l lia bilit ies /31/ f 12 201 2 as o	Fair val ue	Car ryin ts g am oun
		Oth nt er c urre liabi lities	Fina ncia l ins trum ents d at fair val mea sure ue thro ugh fi t a nd l pro oss	Tota l ca rryi ng unts amo
Amo unts in € thou sand
Cur fi na rent ncia l liab ilitie s	2,48 9	2,34 9	140	2,48 9
Acc ble ts p oun aya	12,9 68	12,9 68	0	12,9 68
Liab ilitie ocia ted s to ass ies com pan	213	213	0	213
Oth er li abil ities rent cur	1,50 6	1,50 6	0	1,50 6
Non rent loa -cur ns	4,83 1	4,83 1	0	4,83 1
Oth er fi cial deb ts, nan rent non -cur	0	0	0	0
Tota l	22,0 07	21,8 67	140	22,0 07

Fina ncia l as sets f 12 /31/ 201 1 as o	Fair val ue	Car ryin ts g am oun
Amo unts in € thou sand		Cas h an d h cas ivale nts equ	Loa nd ns a ivab les rece	Fina ncia l instr nts ume d mea sure at fa ir va lue thro ugh profi t an d loss	Fina ncia l ts asse ilabl ava e for s ale (not w ithin appli cabil ity of IFR S 7)	Tota l ying carr unts amo
Liqu id fu nds	6,23 5	6,23 5	0	0	0	6,23 5
Trad ceiv able e re s	13,4 24	0	13,4 24	0	0	13,4 24
Oth nt re ceiv able er c urre s and ets ass	1,21 1	0	1,21 1	0	0	1,21 1
Fina ncia l ass ets	1,61 1	0	0	0	1,61 1	1,61 1
Non fi na ncia l ass rent ets -cur	624	0	624	0	0	624
Tota l	23,1 05	6,23 5	15,2 59	0	1,61 1	23,1 05

As of 12/31/2011 the following breakdown existed:

Fina ncia l lia bilit ies f 12 /31/ 201 1 as o	Fair val ue	Car ryin ts g am oun
Amo in € thou sand unts		Oth nt er c urre liabi lities	Fina ncia l ins trum ents d at fair val mea sure ue thro ugh fi t a nd l pro oss	Tota l ca rryi ng unts amo
Cur rent fi na ncia l liab ilitie s	2,71 6	2,63 3	83	2,71 6
Acc ts p ble oun aya	11,5 55	11,5 55	0	11,5 55
Liab ilitie s to ocia ted ass ies com pan	133	133	0	133
Oth er li abil ities rent cur	1,72 0	1,72 0	0	1,72 0
Non rent loa -cur ns	6,49 7	6,60 9	0	6,60 9
Oth er fi cial deb ts, nan rent non -cur	0	0	0	0
Tota l	22,6 21	22,6 50	83	22,7 33

The derivative fi nancial instruments held for trading purposes, were recognised in the Group income statement based on the assessment of fair value on the respective balance sheet date, as expenses of € 59 thousand (previous year: income of € 15 thousand). The effects result solely from the forward-exchange transactions (€ 111 thousand loss) and the interest rate swap (€ 52 thousand profi t; previous year, profi t from interest rate swap only).

Liquidity risk: As a rule the ecotel Group companies are refi nanced centrally through ecotel communication ag. Here the risk exists that the liquidity reserves do not suffi ce to satisfy the fi nancial obligations in a timely manner. In 2013 repayments are due with a nominal value of € 2.3 million. To cover the liquidity requirement, cash and cash equivalents of € 7.5 million are available. In addition ecotel communication ag has a contractually agreed revolving credit facility

of € 2.9 million, which after subtracting credit fees of € 1.2 million, as of 31 December 2012, totals € 1.7 million (previous year: € 1.3 million). So-called fi nancial covenants exist relative to the bank loan taken out by ecotel communication ag (residual value: € 7.2 million) and to the available credit line. A violation of the covenants could possibly result in notice of cancellation and premature repayment of the investment loans of € 2,000 thousand and credit limit, if an agreement concerning an adaptation of the fi nancial covenants or refi nancing cannot be achieved. Overall the liquidity risk is estimated as low.

The following (non-discounted) payments will presumably result from the fi nancial liabilities in coming years:

/ int Rep ents t pa nts aym eres yme for fi cial liab ilitie nan s	Car ryin g unts amo	Rep ents aym			Inte rest ts pay men
Amo unts in € thou sand	12/3 1/20 12	201 3	201 4 to 2 017	From 201 8	201 3	201 4 up to 2 017	Fro m 201 8
Liab ilitie s to ban ks	7,17 9	2,34 8	2,82 6	2,00 5	249	621	84
Liab ilitie s fro m fi na leas ing nce	0	0	0	0	0	0	0
Der ivati ve fi cial liabi lities nan	141	111	0	0	30	0	0

As of the previous year's key date the following presentation occurs:

Rep / int ents t pa nts aym eres yme for fi cial liab ilitie nan s	Car ryin g unts amo	Rep ents aym		Inte rest ts pay men
in € Amo unts thou sand	12/3 1/20 11	201 2	201 3 to 2 016	From 201 7	201 2	201 3 up to 2 016	Fro m 201 7
Liab ilitie ban ks s to	9,17 2	2,56 3	3,45 8	3,15 1	335	724	199
Liab ilitie s fro m fi na leas ing nce Der ivati ve fi cial liabi lities nan	70 83	70 0	0 0	0 0	1 83	0 0	0 0

Interest rate risks are presented via sensitivity analyses in accordance with IFRS 7. These analyses present the effects of changes in market interest rates to interest payments, interest income and expenses, other results components, and possibly on equity. The interest rate sensitivity analyses are based on the following assumptions:

Market interest rate changes of primary fi nancial instruments with fi xed interest rate (fi nancial liabilities) only have an effect on the result if they are measured at fair value. Thus, all fi xed-rate fi nancial instruments measured at historical cost of acquisition are not subject to interest rate change risks as stipulated in IFRS 7. Changes in market interest rates have an effect on the interest result of primary, variable interest-rate fi nancial instruments, for which interest payments are not designated as underlying transactions as part of cash fl ow hedges against interest-rate change risks, and consequently are considered in the calculation of the sensitivities determined

by results. Changes in the market interest rates for interest derivatives (interest rate swaps) that are not integrated in a hedge relationship in accordance with IAS 39 have effects on the other fi nancial result and consequently are considered in the calculations of sensitivities determined by results. If the market interest rate level would have been higher (lower) by 50 basis points as of 31 December 2012 the earnings before taxes would have been lower (higher) by € 0 thousand. The hypothetical effect on the result is determined by the potential effects from interest and currency derivatives of € 17 thousand and primary variable interest rate fi nancial liabilities of € –17 thousand.

Currency exchange rate risks are likewise presented via sensitivity analyses in accordance with IFRS 7. Relevant risk variables are non-functional currencies in which consolidated companies enter into fi nancial instruments. The sensitivity analysis assumes that the values as of the closing date are representative for the entire year. An increase or decrease in the value of the respective foreign currency (USD) as opposed to the functional currency (€) by 5 % would have reduced EBIT by € 0.2 million or increased EBIT by € 0.2 million, respectively.

As of 31 December 2012 contingent liabilities due to guarantees and other commitments totalled € 1,212 thousand (previous year: € 1,612 thousand) for surety obligations.

Other fi nancial obligations occurred exclusively from the obligations arising from the operating leasing relationships, shown above.

(13) Contingent receivables andliabilities andother fi nancial obligations

Notes to the consolidated statement of comprehensive income

Amo unts in € thou sand	201 1	201 2
Wag nd s alar es a y	8,39 8	8,67 4
Soc ial s rity tribu tion ecu con s	1,30 7	1,36 1
Of w hich es f ions and port exp ens or p ens sup	654	698
	9,70 5	10,0 35

	Amo unts in € thou sand	201 1	201 2
	Dom estic	74,3 09	76,7 10
	Fore ign	10,1 72	17,5 88
		84,4 81	94,2 98
	f sa Sol Dis trib utio les ss t he bus ine uni ts, Bus ine n o rev enu e a cro ss ss	utio W hol ns,	le S olu tion esa s
	and Ne w B usi s is sh n in the orti Sa les e is ent nes ow se gm rep ng. rev enu the ovi sio f se rvic Sa les ith in Sw itze tom pr n o es. rev enu e w cus ers d (p iou : € 5,3 84 tho nd) d a ly s ole ly he Wh ole to t san rev s y ear usa an pp	d e xcl ea rne rlan d to tall ed sal e S olu tion	usiv ely thro h ug € 1 0,7 61 tho u ent s s egm
Oth ting er o pera inco and me othe rk r ow n wo	Oth atin inco nsis f th e fo llow ing ts o er o per g me co :
italis ed cap	Amo unts in € thou sand	201 1	201 2
	Diss olut ion of lia biliti es	120	151
	Rec harg ing of fe nd e es a xpe nse s	85	51
	Rev l of ision s fo r los ivab les ersa prov ses on r ece	79	177
	Ben efi ts in k ind, veh icle use	200	238
(15)	Exc han ate gain ge r s	12	3
	l of Disp inta ngib le a sset rty, plan t, osa s, p rope and ipm ent and fi na ncia l ass ets equ	27	32
	Oth er	1,07 7	342

Staf f

Staf f	201 1	201 2
Full -tim ploy e em ees	176	176
	176	176

(17) Personnel expenses

Wages and salary
Social security contributions
Of which expenses for pensions and support

In the fi nancial year the average number of staff employed in the consolidated companies:

(18) Scheduled depreciations and impairments

A distribution of the depreciation for intangible assets, property, plant, and equipment and fi nancial assets is provided in the explanations for the respective item.

In fi nancial year 2012 after execution of the impairment tests there were impairments on goodwill of the cash-generating units totalling € 2,884 thousand (previous year: € 375 thousand), on other non-current intangible assets of € 0 thousand (previous year: € 112 thousand), as well as on property, plant, and equipment of € 188 thousand (previous year: € 54 thousand).

Also, current and non-current fi nancial assets of the current assets totalling € 611 thousand (mvneco) and € 299 thousand (synergyPLUS) were written down in 2012 (previous year: € 104 thousand, current only). This includes the result of the equity valuation of € – 24 thousand.

(19) Other operating

expenses

Amo in € thou sand unts	201 1	201 2
Cos ts o f de liver ing ds goo	3,84 2	3,70 7
Leg al, a udit ing and sult y fe con anc es	1,24 6	1,16 2
Ren ts, l ises end iture eas es, prem exp	708	714
EDP ts cos	1,00 2	1,13 5
Oth dmi nistr ative ts er a cos	993	899
Veh icle cost s	283	437
Mar ketin g ex pen ses	447	432
Cha s fo in p rovi sion r los nge ses on ivab les / loss ceiv able rece es o n re s	418	336
Insu emi ranc e pr ums	182	145
Rep airs and inte ma nan ce	135	241
Lea sing	153	26
f int Los dis al o ible ts a nd s on pos ang asse item s of pert lant d eq uipm ent pro y, p , an	1	0
Oth er	61	45
	9,47 1	9,27 9

Inco tax me exp ens e	– 98 3	– 76 6
Defe rred tax rnin es o n ea gs	– 53 0	98
Effe ctive ning s ta ear x	– 45 3	– 86 4

Inco tax me exp ens e	– 98 3	– 76 6
A re cilia tion of the ted to act ual tax is s how n b con ex pec ex pen se	elo w. T o d ete rmi	the ted ne ex pec
tax the ult bef inc e ta is ltip lied by a fl ex pen se, res ore om xes mu	at inco tax rat me	f 31 % ci e o spe

(21) Taxes from income and revenue

A reconciliation of the expected to actual tax expense is shown below. To determine the expected tax expense, the result before income taxes is multiplied by a fl at income tax rate of 31 % specifi ed by the Group (previous year: 31 %). This consists of a tax rate of 15 % (previous year: 15 %) for corporation tax, plus 5.5 % for the solidarity surcharge, and 15 % (previous year: 15 %) for trade tax. The expected tax expense is compared with the actual tax expense.

Amo in € thou sand unts	201 1	201 2
Inte inc rest ome
from its / fi Inte rest inc ban k de xed -term dep osits ome pos	19	0
Oth er in st in d si mila rnin tere com e an r ea gs	125	132
	144	132
Inte rest exp ens e
Inte rest dit l iabil ities exp ens e on cre	– 48 6	– 34 5
Res ult f der ivati ve fi cial instr nts (inte rest rate p) rom nan ume swa	15	53
Oth er in tere st a nd s imila r ex pen ses	– 17	– 2
	– 48 8	– 29 4
Net inte inc rest ome Oth er fi cial nd i nan exp ens es a nco me	– 34 4	– 16 2
ult f ve fi Res der ivati cial instr nts rom nan ume (forw ard- han ge t actio ns) exc rans	0	– 11 0
Cos f su rting the sha rice and oth er fi cial ts o ppo re p nan exp ens es	– 57	– 93
Dev alua tion of m nd s rgyP lus l vne co a yne oan s	0	– 88 6
Res ult o f co nies ted for a t eq uity mpa acc oun	– 12	– 24
	– 69	– 1, 113
Fina ncia l res ult	– 41 3	– 1, 275
Amo in € thou sand unts	201 1	201 2
Effe ctive ning s ta ear x	– 45 3	– 86 4

Amo in € thou sand unts	201 1	201 2
Inte inc rest ome
from its / fi Inte rest inc ban k de xed -term dep osits ome pos	19	0
Oth er in st in d si mila rnin tere com e an r ea gs	125	132
	144	132
Inte rest exp ens e
Inte rest dit l iabil ities exp ens e on cre	– 48 6	– 34 5
Res ult f der ivati ve fi cial instr nts (inte rest rate p) rom nan ume swa	15	53
Oth er in tere st a nd s imila r ex pen ses	– 17	– 2
	– 48 8	– 29 4
Net inte inc rest ome	– 34 4	– 16 2
Oth er fi cial nd i nan exp ens es a nco me
ult f ve fi Res der ivati cial instr nts rom nan ume (forw ard- han ge t actio ns) exc rans	0	– 11 0
Cos f su rting the sha rice and oth er fi cial ts o ppo re p nan exp ens es	– 57	– 93
Dev alua tion of m nd s rgyP lus l vne co a yne oan s	0	– 88 6
Res ult o f co nies ted for a t eq uity mpa acc oun	– 12	– 24
	– 69	– 1, 113
Fina ncia l res ult	– 41 3	– 1, 275
Amo in € thou sand unts	201 1	201 2

Amo in € thou sand unts	201 1	201 2
Inte inc rest ome
from its / fi Inte rest inc ban k de xed -term dep osits ome pos	19	0
Oth er in st in d si mila rnin tere com e an r ea gs	125	132
	144	132
Inte rest exp ens e
Inte rest dit l iabil ities exp ens e on cre	– 48 6	– 34 5
Res ult f der ivati ve fi cial instr nts (inte rest rate p) rom nan ume swa	15	53
Oth er in tere st a nd s imila r ex pen ses	– 17	– 2
	– 48 8	– 29 4
Net inte inc rest ome	– 34 4	– 16 2
Oth er fi cial nd i nan exp ens es a nco me
ult f ve fi Res der ivati cial instr nts rom nan ume (forw ard- han ge t actio ns) exc rans	0	– 11 0
Cos f su rting the sha rice and oth er fi cial ts o ppo re p nan exp ens es	– 57	– 93
Dev alua tion of m nd s rgyP lus l vne co a yne oan s	0	– 88 6
Res ult o f co nies ted for a t eq uity mpa acc oun	– 12	– 24
	– 69	– 1, 113
Fina ncia l res ult	– 41 3	– 1, 275
Amo in € thou sand unts	201 1	201 2

(20) Financial result

A reconciliation of the expected to actual tax expense for the year under review and for the previous year is shown below:

Amo unts in € thou sand	201 1 Ass ets	201 1 Liab ilitie s	201 2 Ass ets	201 2 Liab ilitie s
Los rryfo rds s ca rwa	193	0	0	0
Prop erty , pla nt, a nd e quip t / in tang ible ts men asse	743	1,69 1	746	1,41 1
Trad ceiv able e re s	0	57	0	67
Fina ncia l de bts	26	0	44	0
Oth er it ems	0	0	0	0
Offs et – ets / liab ilitie ass s	– 76 9	– 76 9	– 79 0	– 79 0
Valu e ad just t men	0	0	0	0
	193	979	0	688

Deferred tax assets in a single tax jurisdiction are offset against deferred tax liabilities in the same jurisdiction, in so far as the terms correspond.

All tax loss carryforwards that are taxable as of the balance sheet dates were taken into account in the recognition of deferred tax assets, since in subsequent years there will presumably be enough taxable earnings available for their use. The corporation tax loss carried forward at ecotel

Dilu ings re ( in € ) ted sha earn per	0.29	– 0. 70
(in €) Und ilute d ea rnin hare gs p er s	0.29	– 0. 70
Wei ghte d av mbe r of sha erag e nu res	3,75 2,50 0.00	3,72 9,65 9.95
Acc rued solid ated fi t fo r the r (in €) con pro yea	1,07 3,15 1.64	– 2, 594 ,888 .89
	201 1	201 2

communication ag from 2011 (€ 957 thousand) was completely eliminated in fi nancial year 2012. The income tax loss carried forward from the previous year at ecotel private totalling € 134 thousand in 2012 was also completely eliminated.

No deferred taxes are created for the taxable temporary differences in conjunction with shares in subsidiaries and companies accounted for using the equity method, if the conditions are met for an exemption from IAS 12.39.

The earnings to which non-controlling shareholders are entitled of € 946 thousand (previous year: € 627 thousand) relate to the proportional annual results of easybell GmbH (€ 2 thousand; previous year: € – 40 thousand), of sparcall GmbH (€ 650 thousand, previous year: € 409 thousand), carrier-services.de GmbH (€ 138 thousand; previous year € 32 thousand) and init.voice GmbH (€ 43 thousand), which is included for the fi rst time. In the previous year toBEmobile GmbH (€ – 42 thousand) and i-cube GmbH were included up until the purchase of the shares of non-controlling shareholders in November 2011 (€ 114 thousand). In 2012, in conjunction with the profi t and loss transfer agreement with easybell GmbH, there was a claim for compensation on the part of the non-controlling shareholder totalling € 113 thousand (previous year: € 154 thousand).

The undiluted earnings per share are determined in accordance with IAS 33 as the quotient of the annual group net profi t to which the shareholders of ecotel communication ag are entitled and the weighted average number of no-par value bearer shares in circulation during the fi nancial year.

A dilution of the earnings per share occurs if the average number of shares is increased due to the additional issue of potential shares from options and convertible fi nancial instruments. The 145,000 stock options existing at the end of the third quarter 2011 were to be considered as dilutive equity capital instruments. Based on the values up until expiration of the share options, however, the exercise price of these options was signifi cantly higher than the recorded average stock market price for the ecotel shares for the corresponding period. In accordance with IAS 33.47 these options would have had no diluting effect as of the previous year's closing date, so that the undiluted and the diluted earnings are identical.

(22) Profi t share of non-controlling shareholders

(23) Earnings per share

Amo unts in € thou sand	201 1	201 2
Earn ings bef taxe ore s	2,68 3	– 88 2
Gro up t ate ax r	31.0 %	31,0 %
Exp d ta x yi eld (pre viou cted tax e) ecte s ye ar: e xpe exp ens	– 83 2	273
Diffe es d ue t o ta tes diffe ring from the Gro up t ate renc x ra ax r	– 11	84
Tax redu ctio ns d ue t o ta t ea rnin x-ex emp gs	– 23	– 6
Tax incr es d ditu that -ded uctib le ue t not tax eas o ex pen res are	– 18 9	– 1. 168
Prev ious r's t yea axe s	0	35
Cha in v alue adj ustm ent of d efer red tax ts o n lo forw ards nge asse ss c arry	120	0
Earn ings from ity h oldi equ ngs	– 4	– 7
Oth x ef fect er ta s	– 44	23
ing /L s t (ex / in e +) Tax cord to t he P tate exp ens e ac men pen se – com	– 98 3	– 76 6
Effe ctiv te in % e ta x ra	– 36 .6 %	86.8 %

Deferred taxes are determined using the balance-sheet oriented liability method. According to this method, tax relief or burdens that are likely to come to bear in the future are balanced to account for temporary differences between the carrying amounts listed in the consolidated fi nancial statement and the taxable amount of assets and liabilities that are recognised. If the temporary differences refer to items that directly increase or reduce equity, then the associated deferred taxes are also set off directly against equity. Offsetting without effect on net income did not occur as of 31 December 2012 and 31 December 2011.

The deferred taxes must be allocated to the following items:

(24) Cash fl ow statement

Notes to the cash fl ow statement

The cash fl ow statement is prepared in accordance with the regulations of IAS 7 and is organised according to cash fl ows from operating, investing and fi nancing activities. The infl uences of changes in the consolidation companies and exchange rate changes on cash and cash equivalents are shown separately.

The cash and cash equivalents of the cash fl ow statement correspond to the item "Cash and cash equivalents" shown in the consolidated balance sheet.

(25) Distribution of dividends

Other notes

(26) Related party disclosures

In accordance with § 58, para. 2 of the German Stock Corporation Law (AktG) the balance sheet result shown in the legal annual fi nancial statement of ecotel communication ag is defi nitive for determining dividends distributed to shareholders of the company, this is € 0 thousand (previous year: € 549 thousand).

The volume of services supplied to or provided by related parties is presented as follows:

As of 31 December 2012 the receivables from the companies synergyPLUS GmbH and mvneco GmbH accounted for at equity respectively totalled € 53 thousand (previous year: € 59 thousand) and € 1 thousand (previous year: € 1 thousand).

The loan from ecotel communication ag to the company mvneco GmbH accounted for at equity for the amount of € 2,619 thousand (previous year: € 2,544 thousand) was written down to € 1,050 as of 31 December 2012 due to the negative equity value of mvneco GmbH and reduced recoverability.

The loan from ecotel communication ag to the company synergyPlus GmbH accounted for at equity for the amount of € 658 thousand (previous year: € 624 thousand) was written down to € 360 as of 31 December 2012 due to the negative equity value of synergyPlus GmbH and reduced recoverability.

	Volu me ided prov	of s ervi ces by tel eco	Volu of th me utilis ed b	rvice e se s otel y ec
Amo unts in € thou sand	201 1	201 2	201 1	201 2
PLU S G mbH syn ergy
from ds a nd s ervi goo ces	6	2	297	353
Gm bH mvn eco
from ds a nd s ervi goo ces	146	140	1,16 7	765
init.v oice Gm bH
from ds a nd s ervi goo ces	27	0	0	0

	Volu me ided prov	of s ervi ces by tel eco	Volu of th me utilis ed b	rvice e se s otel y ec
Amo in € thou sand unts	201 1	201 2	201 1	201 2
Noe rr LL P
from ds a nd s ervi goo ces	0	0	6	5
QIT S G mbH
from ds a nd s ervi goo ces	10	10	785	672
ADC O U ltdie Ho lding Gm bH nste mwe
from ds a nd s ervi goo ces	143	208	0	0
MPC Se rvice Gm bH
from ds a nd s ervi goo ces	12	2	301	315
GFE I Ak tien ellsc haft ges
from ds a nd s ervi goo ces	0	0	4	0
Mob ile O ne G mbH
from ds a nd s ervi goo ces	109	0	0	0
IQ M aft m artra de H oldi nd M entg llsch bH ng u ana gem ese
from ds a nd s ervi goo ces	1	1	0	0
Clos e Br othe rs S eyd ler R arch AG ese
from ds a nd s ervi goo ces	0	0	25	25
ist G sult mbH con
from ds a nd s ervi goo ces	0	0	132	150
Lars Urb an
from ds a nd s ervi goo ces	0	0	50	47

The ecotel Group maintained service relationships with the following related parties in 2012:

Agreements with QITS GmbH

Qits GmbH, Quality Information Technology Services ("Qits"), whose managing partner is the chairman of the supervisory board, Mr. Johannes Borgmann, has been providing various services for ecotel communication ag since 1999. In addition to services under the general contract for software, particularly for the company's billing system, other services provided included printing services, IT services, data privacy as well as fi nancial bookkeeping services. As of the balance sheet date the receivables vis-a-vis Qits GmbH totalled € 1 thousand (previous year: € 2 thousand), and liabilities totalled € 83 thousand (previous year: € 68 thousand).

Agreements with MPC Service GmbH

A business representation contract between MPC Service GmbH and ecotel communication ag has existed since August 2002. Under this contract MPC Service GmbH receives a closing commission for the monthly order acquisition, as well as a product-dependent commission on the monthly revenue of all customers supplied by MPC. In addition, the company provided consulting services to ecotel for the Allianz project. The agreement corresponds to the agreement with the other sales partners of the company. The supervisory board member Mr. Mirko Mach is managing director and shareholder of MPC Service GmbH and was formerly a shareholder of ADTG GmbH which was merged with ecotel in 2010. As of the balance sheet date the receivables vis-a-vis MPC Service GmbH totalled € 0.02 thousand (previous year: € 0.03 thousand), and liabilities totalled € 34 thousand (previous year: € 40 thousand).

Agreement with consultist GmbH

Since 2009 there is an agency agreement between consultist GmbH and sparcall GmbH. Mr. Andreas Bahr is the managing director of both companies. As of the balance sheet date sparcall GmbH had liabilities vis-a-vis consultist GmbH totalling € 16 thousand (previous year: € 12 thousand).

ADCO Umweltdienste Holding GmbH

Since 2008, ecotel communication ag provides different services for ADCO Umweltdienste Holding GmbH, whose managing partner is the chairman of the supervisory board, Mr. Johannes Borgmann.

As of the balance sheet date the receivables vis-a-vis ADCO Umweltdienste Holding GmbH totalled € 18 thousand (previous year: € 22 thousand).

Agreements with Close Brothers Seydler Research AG

Since 2011 there is a contract between ecotel communication ag and Close Brothers Seydler Research AG for designated sponsoring at XETRA trading locations.

The supervisory board member Mr. Sascha Magsamen is also a member of the supervisory board of Close Brothers Seydler Research AG. As in the previous year there were no liabilities to Close Brothers Seydler Research AG as of the closing date.

Agreement with Lars Urban

Since 2009 there is a business relationship for services and consulting activities between easybell GmbH and Mr. Lars Urban, managing director of easybell GmbH. As in the previous year there were no liabilities to Mr. Lars Urban as of the closing date.

Agreements with Noerr LLP

Noerr LLP, a partnership of attorneys, tax consultants and auditors has been providing consulting services for the company since November 2005. The supervisory board member Dr. Thorsten Reinhard is an attorney and partner in Noerr. As of the balance sheet date the liabilities vis-a-vis Noerr LLP totalled € 1 thousand (previous year: € 0 thousand).

In 2012 Ms. Sandra Zils, the spouse of the CEO, received remuneration as an employee of ecotel communication ag totalling € 14 thousand (previous year: € 14 thousand) for her work in the ecotel Group.

See Note 29 for additional information.

(27) Segment reporting The internal organizational and management structure and the internal reporting to the management board and the supervisory board form the basis for defi ning the criteria for classifi cation of the business segments of ecotel communication ag.

Segmentation is executed according to the internal reporting by business units, which are defi ned as follows:

• In the Business Solutions segment (operative core segment) the ecotel Group offers SMEs "bundled" voice, data and value added services as well as direct connections for voice and data communications from one source.
• In the Wholesale segment ecotel markets products and comprehensive solutions for other telecommunications companies (including resellers and call shops).
• The New Business sector comprises the private customer business of easybell GmbH and the New-Media business of nacamar GmbH.

The annual result before interest and income taxes is presented as a segment result, which the management board uses for corporate control and monitoring. The segment assets correspond to the sum of all segment-related reported assets, without income tax assets. The segment liabilities include the segment-related provisions, liabilities and fi nancial liabilities, however no income tax liabilities.

	Bus Solu	ines s tion s	Who	lesa le	New Bus	ines s	Con solid cros s-se	atio n nt gme	Gro	up
Amo unts in € thou sand	201 1	201 2	201 1	201 2	201 1	201 2	201 1	201 2	201 1	201 2
Exte rnal rev enu e	41,5 63	40,7 44	30,6 18	40,8 37	12,3 00	12,7 17	0	0	84,4 81	94,2 98
Inte nt r-se gme reve nue	0	0	4,39 2	492	357	447	– 4, 749	– 93 9	0	0
EBIT	1,80 5	1,34 2	551	222	740	– 1, 171	0	0	3,09 6	393
Ann ual lt resu	1,14 0	– 97 8	371	204	189	– 99 4	0	119	1,70 0	– 1, 649
Gro arni ss e ngs	18,7 17	18,8 99	1,39 0	953	4,52 0	5,20 1	0	0	24,6 27	25,0 53
Sch edu led dep reci atio ns	– 2,2 88	– 2, 288	– 34 5	– 97	– 67 7	– 67 4	0	0	– 3, 310	– 3, 380
Imp airm ents	– 54	– 18 8	– 13 8	0	– 45 4	– 2, 884	0	0	– 64 6	– 3, 072
Res ult o f co nies mpa unte d fo r at ity acco equ	0	0	– 12	– 24	0	0	0	0	– 12	– 24
Seg t as sets men	23,5 25	25,1 30	9,14 9	7,98 1	9,03 8	8,72 5	3,73 2	852	45,4 44	42,6 88
Seg t lia biliti men es	6,11 7	7,50 8	5,43 1	5,10 1	1,92 6	2,75 1	10,5 53	8,00 5	24,0 27	23,3 65
Inve stme nts i n int ible ang ts a nd p rty, asse rope plan d eq uipm t, an ent	1,23 7	3,42 5	205	0	276	718	0	0	1,71 8	4,14 3

Inter-segment transactions were executed at market prices.

With regard to the classifi cation of revenue according to sales regions, reference is made to the Notes on sales revenue. Segment assets and segment investments refer completely to Germany.

The management board and supervisory board of ecotel communication ag have issued the statement on corporate governance required in accordance with § 289a of the German Commercial Code (HGB,) including the statement prescribed in accordance with § 161 of the German Stock Corporation Act (AktG), and have made these statements available to the public on the Internet site of ecotel communication ag (www.ecotel.de under Investor Relations / Corporate Governance).

(28) Statement on corporate governance in accordance with § 289 A of the German Commercial Code (HGB) including the statement in accordance with § 161 of the German Stock Corporation Law (AktG) regarding the German

Corporate Governance

Code

In the reporting year 2012 the management board of ecotel communication ag was composed

as follows:

• Peter Zils, engineer, Düsseldorf (Chairman), CEO
• Bernhard Seidl, engineer, Munich, CFO
• Achim Theis, businessman, Düsseldorf, CSO

The following persons were appointed as members of the supervisory board in 2012:

• Johannes Borgmann, businessman, Wesel (Chairman)
• Mirko Mach, businessman, Heidelberg (Deputy Chairman)
• Dr. Norbert Bensel, independent corporate consultant, Berlin
• Brigitte Holzer, Berg
• Sascha Magsamen, businessman, Frankfurt am Main.
• Dr. Thorsten Reinhard, attorney, Frankfurt / Main

In 2012, the remuneration of management board and supervisory board consisted of the following

components:

(29) Governing bodies and remuneration of governing bodies

in € Amo unts thou sand	Fixed tion remu nera	Add ition al ices serv	Perfo r man ce base d tion remu nera	Sha re optio ns plan	Tota l	Stoc k optio lan ns p Qua ntity
Bern hard Se idl	220 .0	12.6	0	0	232 .6	0
Ach im T heis	211 .7	16.6	0	0	228 .3	0
Pete r Zil s	300 .0	23.2	0	0	323 .2	0
Joh es B ann orgm ann	12.7	0	0	0	12.7	0
Brig itte Holz er	8.5	0	0	0	8.5	0
Dr. T hors ten Rein hard	7.0	0	0	0	7.0	0
Mirk o M ach	9.5	0	0	0	9.5	0
Sas cha Ma gsa men	7.0	0	0	0	7.0	0
Dr. N orbe rt Be l nse	6.8	0	0	0	6.8	0

Sup isor y bo ard mbe erv me r	Fun ctio n	Com pan y
Joh es B ann org man n	Man agin g di rect or	ADC O U Gm ltdie nste Ho lding bH mwe
	Cur rent ly m emb f the er o t bo ard man age men	ADC O H OLD ING S, In c., in M arie tta G ia 3 006 2, U SA eorg
	CEO	ADC O H OLD ING S, In c., in M arie tta G ia 3 006 2, U SA eorg
	Man agin g di rect or	ADC O B etei ligun gs-G mbH (Ra ting en)
	Man agin g di rect or	ADC O Im mob ilien Gm bH ( Rati n) nge
	Man agin g di rect or	ADC O In tern atio nal Gm bH
	t of Pres iden the adm inist rativ e bo ard	TOI TO I AG , Aff rn (S nd) olte witz erla
	Man agin g di rect or	PS Gm ME bH i n Ra ting en
	Man agin g di rect or	QIT S G mbH in R atin gen

For fi nancial year 2012 the management board is entitled to variable remuneration in the amount of € 0 thousand (previous year: € 110 thousand). The remunerations are solely for short-term due services.

In 2011 the remuneration was comprised as follows:

As of 31 December 2012 the members of the supervisory board of the company served on the following boards:

Sup ervis ory b oard ber mem	Func tion	Com pany
Mirk o Ma ch	Man agin rtner g pa	MPC Ser vice Gmb H, H eide lberg
Dr. N orbe rt Be nsel	Man agin rtner g pa	NB C lting - und Bet eilig Gm bH onsu ungs
	Mem ber o f the ervis ory b oard sup	Prak tiker AG
	Mem ber o f the ervis ory b oard sup	Prak tiker Deu tsch land Gm bH
	Mem ber o f the ervis ory b oard sup	IAS Instit ut fü r Arb eits- und Soz ialhy gien e AG
	Mem ber o f the ervis ory b oard sup	Com Gro up D euts chla nd G mbH pass
	Cha n of irma the s viso ry bo ard uper	sCa re AG Tran
	Mem ber o f the adv isory boa rd	BRE UER Nac hrich chni k Gm bH, Bonn tente
	Mem ber o f the adv isory boa rd	IQ M artra de H oldin d Ma tges ellsc haft mbH g un nage men
Brig itte H olze r	Own er / m ing d irect anag or	Holz er H oldin g Gm bH, Berg
	Own er / m ing d irect anag or	OCT AGO N CA L Gm PITA bH, Berg
	CFO	PPR O Fi ial L td. nanc
Sasc ha M	Cha irma n of the s viso ry bo ard uper	ICM Med ia AG , Fra nkfu rt am Mai n
agsa men	Cha n of irma the s viso ry bo ard uper	G, C Wig e Me dia A olog ne
	Cha irma n of the s viso ry bo ard uper	Med iNav i AG , Sta rnbe rg
	Dep uty C hairm f the an o rviso ry bo ard supe	Tyro s AG , Ha mbu rg
	Mem ber o f the adm inistr ative boa rd	Nov avis ions AG, Rotk / Sw itzer land reuz
	Mem ber o f the ervis ory b oard sup	Eco lutio ns G mbH & C o. K GaA , Fra nkfu rt am Mai n
	f the Mem ber o ervis ory b oard sup
	Man ent b oard agem	PVM Priv ate V alue s Me dia A G, F rank furt a m M ain
	Man ent b oard agem	Impe ra To tal R eturn AG, Fra nkfu rt am Mai n
	Man ent b oard agem	G, P Insp ire A ader born
	Man agin g dir ecto r	Fram es F ilmp rodu ktion Gm bH, V ienn a / Au stria
	Man agin g dir ecto r	Präz ision sdre here i Joh Kölb el ann Nach folge r Gm bH, Puch heim
Dr. T hors ten Rein hard	Part ner ( Mem ber)	Noe rr LL P, Lo ndon
	Mem ber o f the ervis ory b oard sup	Wac ker H oldin g SE , Mu nich

The members of the management board hold no positions in oversight and control bodies, as specifi ed in § 285, no. 10 of the German Commercial Code (HGB).

in € Amo unts thou sand	Fixed tion remu nera	Add ition al ices serv	Perfo r man ce base d tion remu nera	Sha re optio ns plan	Tota l	Stoc k optio ns plan Qua ntity	Stoc k optio ns – fair v alue at is sue
Bern hard Se idl	198 .3	10.2	50.0	12.0	270 .5	90,0 00	239
Ach im T heis	191 .7	13.9	35.8	4.9	246 .3	30,0 00	43
Pete r Zil s	300 .0	22.5	25.0	0	347 .5	0	0
Joh es B ann orgm ann	14.0		0.2	0	14.2	0	0
Brig itte Holz er	10.0		0	0	10.0	0	0
Dr. T hors ten Rein hard	7.0		0	0	7.0	0	0
Mirk o M ach	9.5		0	0	9.5	0	0
Sas cha Ma gsa men	3.0		0.1	0	3.1	0	0
Dr. N orbe rt Be l nse	5.0		0	0	5.0	0	0
Dr. J him Drey oac er	2.5		0.4	0	2.9	0	0

(31) Exemption from publishing individual fi nancial statements

(30) Audit expenses In the fi nancial year 2012 the fee entered as expense for the auditors of the consolidated fi nancial statement of ecotel communication ag for the audits of the consolidated fi nancial statement and the individual fi nancial statements of the parent company and consolidated subsidiaries was € 60 thousand (previous year: € 65 thousand). No other expenses were recorded for the Group auditors for other confi rmation or evaluation services, tax consulting services, or for other consulting services.

For the subsidiary nacamar GmbH, Düsseldorf, use is made of the exemption from publishing the individual fi nancial statement, in accordance with § 264 para. 3 HGB.

Düsseldorf, 19 March 2013

The management board

Peter Zils Bernhard Seidl Achim Theis

We have audited the consolidated fi nancial statement of ecotel communication ag ‒ comprising the balance sheet, statement of comprehensive income, cash fl ow statement, statement of changes in equity and the notes to the consolidated statement ‒ and its Group management report for the fi nancial year from January 1 to 31 December 2012. Preparation of the consolidated fi nancial statement and the Group management report in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and the additional requirements that must be applied in accordance with § 315a, para. 1 of the German Commercial Code (HGB) is the responsibility of the management board of the company. Our responsibility is to express an opinion on the consolidated fi nancial statement and the Group management report based on our audit.

We have carried out our audit of the consolidated fi nancial statement in accordance with § 317 of the German Commercial Code (HGB) taking into consideration the generally accepted German auditing standards. Those standards require that we plan and perform the audit in such a manner that misstatements materially affecting the presentation of the asset, fi nancial, and earnings positions in the consolidated fi nancial statement in accordance with applicable fi nancial reporting principle and in the Group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and evaluations of possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the internal control system relating to accounting and the evidence supporting the disclosures in the books and records, and in the consolidated fi nancial statement and Group management report are examined primarily on a test basis within the framework of the audit. The audit includes the evaluation of the fi nancial statements of the companies included in the consolidated fi nancial statement, the segregation of the consolidated group, the accounting and consolidation principles used and the main assumptions made by the management board, as well as acknowledgement of the entire presentation of the consolidated fi nancial statement and the Group management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not resulted in any objections.

Based on the knowledge gained in the audit the consolidated fi nancial statement of ecotel communication ag, Düsseldorf, is in accordance with IFRS as adopted by the EU and the additional requirements of § 315a, para. 1 of the German Commercial Code (HGB), and conveys in compliance with these regulations, a true and fair view of the asset, fi nance, and earnings position of the Group. The Group management report is consistent with the consolidated fi nancial statement, conveying overall an accurate picture of the Group's situation, and correctly presents the opportunities and risks associated with future development.

Düsseldorf, 25 March 2013 Deloitte & Touche GmbHAuditors

Audit opinion of the statutory auditor

Signed Frank Auditor

Signed Schlereth Auditor

The supervisory board of ecotel communication ag (ecotel) regularly monitored and supported the work of the management board in fi nancial year 2012, in an advisory role. The detailed reports of the management board in written and oral form were the basis of this monitoring and advisory support. The chairman of the supervisory board was involved in a regular exchange of information and ideas with the chairman of the management board.

In the reporting year the supervisory board convened for a total of fi ve sessions, on 19 January, 27 March, 23 May, 27 July and 10 October. In addition, six resolutions by circulation were made. In the meetings the ecotel management board reported to the supervisory board on fundamental issues of corporate planning, profi tability of the company the course of the business and the position of the company, in accordance with legal requirements, and consulted together with the supervisory board concerning these issues. Moreover, the supervisory board was involved in all decisions of major signifi cance and in particular reviewed and approved measures of the management board that required its agreement in accordance with the rules of procedure of the management board.

1. Focus of consultation in the supervisory board

In all supervisory board meetings in 2012, the supervisory board received detailed reports on the course of the B2B segment, on projects of strategic importance and on current legal disputes. This related among other things to the contract negotiations for a major contract that was implemented in reporting year 2012. The supervisory board also provided support in the cooperation in the mobile communications sector with a network operator that was implemented in reporting year 2012.

In addition, the supervisory board received periodic reports on the business development of the subsidiaries easybell GmbH, nacamar GmbH and mvneco GmbH, with which the management board intends to improved the results of the subsidiary nacamar GmbH.

The supervisory board was also involved in matters of the management board, such as extension of two employment contracts and the structure of the variable remuneration system for 2012. In addition, the board conducted a review of the appropriateness of the remuneration of the management board and supervisory board. Another important resolution in the supervisory board meeting of 23 May 2012 related to conducting a share buy-back program in 2012.

As in the past the supervisory board devoted special attention to risk management issues. The supervisory board discussed the regular risk reports with the management board and also made recommendations relative to risk management. The supervisory board is convinced that the management board devotes the necessary attention to risk management, prioritises the risks identifi ed by the management board and is striving to reduce these risks through appropriate measures.

Report of the supervisory board

The supervisory board meeting held on 27 March 2012 focused on the auditing and approval of the 2011 annual and consolidated fi nancial statements. In addition, in the meeting of 27 March 2012, as a precaution the supervisory board approved various contracts between ecotel and companies in which members of the supervisory board hold shares (see below for more in this regard).

2. Treatment of confl icts of interest in the supervisory board

All members of the supervisory board are obligated to comply with the principle of aligning their decisions exclusively to the corporate interests of ecotel. If in consultation or taking of resolutions in the supervisory board confl icts of interest occurred or the concern of confl icts of interest occurred, these were dealt with in the supervisory board. The member of the supervisory board concerned in each case refrained from voting, and if in the specifi c case it seemed expedient, did not participate in the preceding discussion. In addition the other members of the supervisory board obtained the necessary assurances by posing questions to the management board, that its actions were not infl uenced by the (potential) confl ict of interest of the respective member of the supervisory board. The principles cited above were only employed in the reporting period for resolutions of the supervisory board concerning the approval of contracts between ecotel and companies in which members of the supervisory board hold investments. These affect Mr. Johannes Borgmann, Mr. Mirko Mach and Dr. Thorsten Reinhard.

3. Financial statement and consolidated fi nancial statement

The management board prepared the fi nancial statement and management report of ecotel in accordance with the regulations specifi ed in the German Commercial Code (HGB), and the consolidated fi nancial statements in accordance with IFRS principles. The auditor selected by the ecotel Annual General Meeting of 27 July 2012, Deloitte & Touche GmbH of Düsseldorf, audited the fi nancial statement, the consolidated fi nancial statement, the management report and the Group management report. The auditor has given the annual fi nancial statements and the consolidated fi nancial statement its unqualifi ed audit approval.

The fi nancial statement documents and reports of the auditor were submitted to all members of the supervisory board for review. Representatives of Deloitte & Touche GmbH participated in the negotiations of the supervisory board concerning these documents and have reported on the essential results of their audit.

The supervisory board has thoroughly reviewed the fi nancial statement, the consolidated fi nancial statement as well as the Group management report submitted by the management board, and has discussed them with the auditor. The supervisory board has reviewed and approved the auditor's report concerning the result of its audit.

After the fi nal result of its review the supervisory board raised no objections to the Annual Financial Statement prepared by the management board or to the Consolidated Financial Statement for fi nancial year 2012, but rather approved the Annual Financial Statement and the Consolidated Financial Statement with the resolution of 27 March 2013. The annual fi nancial statement of ecotel for fi nancial year 2012 is thereby adopted.

4. Corporate governance

No member of the advisory board participated in less than half of the supervisory board meetings.

In its meeting on 27 March 2012 the supervisory board planned to conduct the effi ciency inspection provided for by the Corporate Governance Codex.

In reporting year 2012, the management board and supervisory board issued a joint compliance statement on 23 March 2012 and on 31 May 2012 in accordance with § 161 of the German Stock Corporation Act (AktG) on the German Corporate Governance Codex. The statements were made available through publication on the company's website.

5. Changes in the supervisory board in the reporting period

There were no changes in the supervisory board in the reporting year.

6. Changes in the management board in the reporting period

The appointment of board member Peter Zils ended on 28 February 2012 as scheduled. By resolution of the supervisory board of 28 February 2012, his appointment was extended for three years. Simultaneously, the employment contract of Mr. Theis was extended for 3 years on 26 September 2012 subject to new conditions.

7. Committees

The supervisory board has formed a three-member audit committee that in particular deals with accounting, risk management and compliance issues. In the reporting period the audit committee met four times and in particular, dealt with the quarterly reports and the 2011 annual fi nancial statement. The audit committee has not changed and is comprised of Ms Brigitte Holzer (Chairwoman) and Mr. Mirko Mach and Mr. Sascha Magsamen.

The supervisory board also formed a three-member nominating committee, which prepares recommendations for nominees to the annual meeting of shareholders and also performs the duties of the personnel committee. The nominating committee was newly selected in the meeting of the supervisory board held on 27 March 2012 and is now comprised of Dr. Bensel (Chairman) and Dr. Thorsten Reinhard and Mr. Johannes Borgmann. This committee convened one time in fi scal year 2012.

The supervisory board thanks the members of the ecotel management board, as well as all employees of the companies of the ecotel Group for their great dedication to the company and the work performed in the fi nancial year 2012.

Düsseldorf, 25 March 2013 For the supervisory board:

Johannes Borgmann Chairman of the supervisory board

	97

ARPU

Average Revenue Per User.

Backbone network

A backbone is a high-performance network or main network for the connection of local sub-networks, geographically distributed end devices, or centrally controlled networks. As a rule, the backbone has higher transmission capacity than that of the devices and networks connected to it and to each other.

Broadband access

Subscriber-side broadband network connection (broadband access) with high transmission speed. The connection is possible by wire via the existing copper twin wire using DSL processes via fi bre optics, or via the broadband cable network.

Call-by-Call

When using call-by-call for phone calls or Internet access the customer dials the prefi x of the telephone company of his choice before each call or dial-up connection.

Carrier

A carrier / network operator is a company that operates telecommunications networks. A carrier / network operator has its own networks or has essential components, switching devices or network management systems that are important for transmission. Network operators are differentiated relative to the territory they cover, as global carriers, national carriers, regional carriers, and city network carriers, or so-called city carriers. Global carriers operate worldwide or internationally, national carriers offer their services and their network infrastructure in a geographically limited area within a country, and city carriers act within city limits or within a metropolitan area.

Convergence product

A convergence product is an integrated fi xed-line, Internet and mobile communications product.

Customer Relationship Management (CRM)

Customer Relationship Management has the goal of addressing customer needs individually in order to increase customer satisfaction and thus ensure long-term customer loyalty to the company. To this end the customer-oriented departments of a company, such as sales, marketing, and support are systematically aligned to the customer needs.

DSL

Digital Subscriber Line – a digital broadband transmission technology with which transmission speeds of as much as several megabits/sec. can be achieved with conventional telephone networks (via copper cable).

Ethernet

Cable-based data network technology primarily used in local area networks (LAN). It enables data exchange between all devices connected in a LAN (PCs, printers, etc.). In its traditional form

Glossary

the LAN is limited to one building. Today, Ethernet also connects devices over great distances and in the process enables transmission of greater data volumes.

Full access product

Provision of a "genuine" ISDN connection via alternative subscriber network operators instead of a line transfer through Deutsche Telekom AG. The full access can optionally be purchased with a DSL connection.

HGB

Handelsgesetzbuch (German Commercial Code)

Housing / hosting

Provision of computer centre space and computer capacity in the computer centre through Internet service providers for the connection to the Internet.

IFRS

International Financial Reporting Standards.

IP Bitstream Access

The "IP Bitstream Access" product of Deutsche Telekom AG enables providers without their own infrastructure to autonomously market DSL connections without the additional telephone connection which was previously required.

Media streaming

Audio and video data that is received from a computer network and simultaneously sent.

MPLS

Multiprotocol Label Switching (MPLS) enables connectionoriented transmission of data packets in a connectionless network via a previously established ("signalled") path.

MVNE

While the Mobile Virtual Network Operator (MVNO) develops, operates, and markets its own services as a virtual network operator, the Mobile Virtual Network Enabler (MVNE) in turn is a partner of the MVNO. The MVNE operates the necessary infrastructure in order to connect the services of the MVNO to the communication infrastructure of a mobile communications network (for transmission of greater data volumes).

MVNO

The Mobile Virtual Network Operator (MVNO) is a new business form of the mobile communications industry between the actual network operator and the service provider or reseller. As opposed to the network operator the MVNO does not operate its own access network with its own broadcasting stations. However, the MVNO has the possibility of operating core network services itself or renting core network services from the network operator – the services include switching, IN-platform, customer management, Home Location Register (HLR).

On-net / off-net area

Prepaid card

Preselection

Thus, the MVNO has the same possibilities of designing services as does the mobile network operator itself. For the service provider the design possibilities are limited to the implementation of price models that can be calculated on the basis of the voice data supplied by the carrier. own components to form a virtual (overall) network, e.g. via their own switch technology. VoIP

Prime Standard

The Prime Standard is the admission segment for companies on the Frankfurt Stock Exchange who desire to position themselves internationally. In the Prime Standard, joint stock companies must satisfy international transparency requirements that extend beyond the scope of the General Standard.

PSTN

Network Operation Centre (NOC) The Network Operation Centre (NOC) is the technical operating facility for a network and is responsible for the monitoring of the network.Voice over IP – voice services based on the Internet protocol (so-called VoIP services) that in terms of quality and product design are comparable to traditional telephone services. VoIP services are characterised by the fact that their users can telephone on the basis of a packet-switching data network. In this regard the data network can either be the Internet or managed IP networks.

Public Switched Telephone Network (PSTN) is a long-distance network that is designed for handling telephone calls.

Reseller

In on-net areas full access products from alternative network operators are available. In the so-called off-net areas telecommunications services are realised through line transfer via DTAG. VPN Virtual Private Network – enterprise networks that are used for closed networking of enterprise locations.

Entity that resells telecommunications services of other telecommunications companies under its own name and at its own billing. So-called switch-based resellers have their own switching technology, resellers without their own switching computers are referred to as rebillers or switchless resellers.

The term prepaid card describes the use of services via prepaid credit accounts, which is widespread in the telecommunications industry. The term "Prepaidkarte" is commonly used in Germany. Products that are marketed to customers not under their own brand, but as the brand of other companies, are referred to as white label products.

Roaming

Enables telephone calls via networks of different network operators, for example, such as international roaming in the pan-European GSM system.

Permanent preselection of the connection for the subscriber network operator (TNB) for a connection network operator (VNB) for handling calls. As a rule preselection requires a contractual agreement with the desired VNB. Implementation of the preselection on the connection is made by the subscriber network operator. Network overlapping trade (purchase and sale) of telephone minutes in larger volumes.

Virtual Network Operator (VNO)

Virtual network operators do not have their own network infrastructures. Instead they put a network together from the infrastructures of other providers and connect these with their

White label service

Wholesale service

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