LAIQON AG — Annual Report 2011

Apr 30, 2012

GROUP FIGURES

	2011	2010	2009	2008	2007	2006	2005
1 millions
Sales	14.3	19.3	20.0	48.1	90.1	72.0	71.0
Recurring income	10.4	10.5	10.2	7.8	9.9	6.4	6.2
EBIT	-3.9	4.4	-59.9	-4.3	28.3	23.9	22.8
Consolidated net profit/loss for the period	-2.9	2.7	-63.6	-4.6	20.2	19.0	17.1
EBIT margin (%)	-27.1	22.6	-299.2	-8.9	31.5	33.2	32.1
Return on sales (%)	-20.3	13.9	-317.4	-9.6	22.4	26.4	24.1
Total assets	51.0	51.5	111.5	112.4	118.5	105.2	98.8
Equity	18.4	8.0	1.8	66.3	86.2	80.5	75.2
Equity ratio (%)	36.0	15.5	1.7	59.0	72.7	76.5	76.0
Earnings/loss per share (v)	-0.2	0.2	-5.0	-0.4	1.6	1.5	1.27
Employees (as of December 31)	78	113	108	156	155	101	72
Personnel expenses	8.8	8.6	8.8	14.8	12.6	9.7	5.7

FUND PERFORMANCE

	2011	2010	2009	2008	2007	2006	2005
1 millions
Cumulative number of funds initiated	105	102*	97	96	87	74	66
Equity placements	38.5	83.0	64.6	289.8	455.8	301.0	286.0
of which in umbrella funds	-	0.2	6.7	11.6	3.8	-	-
of which in the form of restructuring capital	7.6	24.4	6.2	-	-	-	-
Cumulative equity placements	2,000	1,961	1,915	1,901	1,623	1,171	870
Cumulative investment volume	5,103	4,696	4,635	4,462	4,215	3,029	2,235
Cumulative assets held in trust	1,648	1,600	1,542	1,543	1,329	1,003	728
Number of subscribers	52,864	52,069*	52,707	50,538	44,563	30,301	18,870

* Adjusted.

SUCCESSES 2011 AND TARGETS 2012

FOREWORD BY THE MANAGEMENT BOARD

• STABILITY Equity issue safeguarding our future
• COMPETENCE Focus on shipping and real estate
• FOUNDATIONS Solid performance and a strong team
• CHANGE We are driving change in the market
• TRANSPARENCY Openness put into practices creates trust
• THE STOCK
• CORPORATE GOVERNANCE
• REPORT OF THE SUPERVISORY BOARD
• GROUP MANAGEMENT REPORT
• CONSOLIDATED FINANCIAL STATEMENTS

SUCCESSFUL EQUITY ISSUE

The successful equity issue, which generated gross proceeds of b 14.7 million, has materially strengthened the Group's capital base. With its new principal shareholder AMA Capital Partners, Lloyd Fonds has gained a strong strategic partner.

RESTRUCTURING PHASE COMPLETED AND ALL CONTINGENT LIABILITIES DISCHARGED

Lloyd Fonds has successfully completed restructuring and has been relieved in full of the risks arising from its entire pipeline of ships.

SYSTEMATIC COST-CUTTING

In connection with the strategic cost-cutting program, further precautions have been successfully taken to ensure that fixed costs are covered by recurring income in full.

"We have created a stable basis!" SUCCESSES

» We want to use this basis to reclaim lost market share.«

FOCUS ON SHIPPING AND REAL ESTATE

Lloyd Fonds AG is concentrating on its core skills in shipping and real estate. In the shipping segment the task is to successfully navigate the existing funds through the crisis. In the real estate segment, Lloyd Fonds AG is planning to issue new high-quality investment products.

ACTIVELY SHAPING CONSOLIDATION

We want to make use of our reinforced capital base to play an active role in the consolidation of the closed-end investment fund market and the shipping industry. In particular, our goal is to acquire trusteeship and fund management companies.

NEW FUNDS AND NEW CHALLENGES

This year, new and conservatively structured real estate funds are particularly on the agenda in Germany. In the shipping segment, the task is to steer the existing funds through the crisis. One option in this respect will involve the use of innovative financing structures.

TARGETS

FOREWORD BY THE MANAGEMENT BOARD

Dear shareholders, customers and business associates,

2011 was a very eventful year for us, culminating in our successful equity issue. With the substantial increase in our share capital and the establishment of a partnership with our new principal shareholder, US investor AMA Capital Partners, we were able to free our Company of the past liabilities and obligations. Against the backdrop of the continued challenging market conditions, we were able last year to launch three new funds, which received numerous awards. At the same time, we created a solid basis for 2012 with the systematic implementation of our cost-cutting program.

Despite these milestones, 2011 was also a year of uncertainty in the financial markets, something that is mirrored not only in our own placement figures but also throughout the closed-end investment fund sector. In times such as these in particular, transparency is more important than ever to regain subscribers' confidence. It is for this reason, among others, that we have adopted the motto "transparency" for our annual report. At Lloyd Fonds AG, transparency has always formed an indispensable part of our work. As a listed company, we have been pioneers in this respect for many years.

In persistently difficult times, this open dialog is not always easy. As of the end of 2011, we sustained a consolidated net loss of b 2.9 million, with placement figures also falling substantially short of our expectations. However, thanks to our stock market listing and the successful liability release agreement with the banks as well as our good and consistent work prior to the financial crisis, we have been able to raise fresh equity for our Company despite this difficult environment.

» Our equity ratio of 36.0% is a reflection of our new strength «

Following the equity issue at the end of 2011, our equity ratio has now risen to an impressive 36.0%. With this ample capital base, we now have the resources required to position Lloyd Fonds strongly as a trustworthy and potent brand in the market. Our efforts to recapture lost market share and to return to our pre-crisis successes commenced in earnest at the beginning of 2012 at the

The new team of the Management Board of the Lloyd Fonds AG: Dr. Joachim Seeler and Dr. Torsten Teichert

latest, additionally aided by the personnel and structural reorganization completed at the beginning of the year. Our strategy comprises three elements:

Firstly, we will be focusing on our long-standing core skills in shipping and real estate and systematically broadening asset management activities in these asset classes. In doing so, we are prepared for the regulatory challenges facing our market which offer a future only for those fund initiators which are also highly skilled asset managers. In the shipping segment, our main task will be to successfully navigate the existing funds through the sustained global crisis afflicting the shipping industry, and we will be implementing innovative financial solutions to achieve precisely this. At the same time, we will be offering subscribers new high-quality real estate investment products chiefly in Germany this year, although we are also observing other markets such as the United States closely.

Secondly, our goal is to make use of our reinforced capital base to play an active role in the consolidation of the closed-end investment fund market and the shipping industry, with a particular focus on trusteeship and management activities.

Thirdly, we will be continuing our costcutting program to ensure that recurring management and trusteeship income at least covers our personnel and rental expenses on a permanent basis, thus providing the Company with a solid base.

With this strategy, we want to return to profit-making territory this year. With the successful liability release and the equity issue with a strong new partner as well as our Company's focus on business offering high potential for the future, we have every chance of making Lloyd Fonds strong again and recapturing market share.

We thank all employees for their great commitment and dedication. Our gratitude also goes to our business and retail partners for the pleasant relations and their trust.

Yours sincerely

Dr. Torsten Teichert Dr. Joachim Seeler

"We want to return to profitmaking territory this year."

Lloyd Fonds has secured its future viability by issuing fresh equity. Backed by its new principal shareholder AMA Capital Partners and solid capital resources, it has entered 2012 strengthened.

STABILITY.

FACING THE FUTURE ON A STABLE FOUNDATION

Lloyd Fonds is taking the initiative

Managed by AMA Capital Partners (AMA), ACP Fund V has held just on half of Lloyd Fonds' capital. This is the result of an

equity issue which had been announced by the Management Board in autumn and was executed at the end of 2011. The injection of fresh capital provided the necessary funding to make the outstanding payment to the banks and thus to settle past liabilities once and for all.

In this way, it was possible for Lloyd Fonds AG to lay the foundation for its continued growth. Lloyd Fonds AG's share capital rose by b 14.7 million to b 27.5 million. As a result, the Company has successfully completed restructuring and particularly been relieved of the risks arising from its entire pipeline of ships.

Return to old strength

The Lloyd Fonds Group's equity base has been materially strengthened with the injection of fresh capital. In fact, the equity ratio has more than doubled compared with the previous year. With this solid capital base, we now have the resources which we require to return to our pre-crisis position and to define Lloyd Fonds as a trustworthy and financially solid brand in the market once more.

Reinforced network of partners

In addition, Lloyd Fonds views US investor AM as a strategic partner for future projects thanks to its proven expertise in the transport asset class. A further top partner in the transport segment, for example, is Singapore Airlines, the lessee of the current aircraft fund. The airline's majority shareholder is Temasek Holdings, a

state-owned Singapore company, with the highest possible AAA and Aaa rating awarded by Standard & Poor's and Moody's, respectively.

Lloyd Fonds also relies on renowned partners in the real estate segment: Thus, for example, it has already arranged two funds in conjunction with the successful budget hotel chain Motel One. The partner for the business city hotel in Hamburg is the Lindner Group, while the hotel in Fleesensee in Mecklenburg-West Pomerania is being operated by TUI AG, a leading international travel service provider. Dr. Joachim Seeler, who has recently been appointed to the Management Board, is a real estate expert with a proven track record, who will be able to additionally strengthen Lloyd Fonds' network.

Traditionally, fund and asset management forms a central element of Lloyd Fonds' business model and, given the planned national and European regulation, is set to grow even more in importance. It is not only for this reason that Lloyd Fonds is continuing to concentrate on its long-standing skills in shipping and real estate.

COMPETENCE.

ASSET MANAGEMENT MOVING TO THE FORE

Competence as a means of driving returns

Shipping and real estate are the two asset classes on which Lloyd Fonds is increasingly focusing. For years now, these have been the two most important asset classes and the ones generating the greatest revenues in the closed-end investment fund market. In fact, historically, they account for over 70% of all the equity collected. For this reason, Lloyd Fonds will continue to concentrate on these two segments.

Lloyd Fonds handles all aspects of asset and fund management in the real estate segment. In the shipping segment, asset management as such is traditionally the responsibility of the contractual ship management company. However, representatives from Lloyd Fonds are also integrated in the management of the fund entities. Lloyd Fonds also uses the services of external asset management partners. Its own fund management ensures comprehensive monitoring of the fund entities.

Fund management is responsible for monitoring all economic aspects of the fund entities' activities, including interest and currency management, negotiations with the creditor banks and negotiations for follow-up charters/leases. Fund management plays a particularly important role in connection with the sale of the asset. Further tasks entail ongoing contact with the advisory councils and subscribers - subject to consultation with the trusteeship company.

Additions to real estate expertise ...

Asset management is of crucial importance in the real estate segment. All matters relating to lessee and asset management are addressed by a broad-based team of real estate experts. This involves leveraging and extending the expertise already available within Lloyd Fonds in order to keep the value of the real estate stable and to ensure the highest possible appeal to potential buyers in the exit phase.

… and reinforcements to shipping skills

• market analysis, project management
• Commercial and technical facility management

In the shipping segment, the Company has amassed a large amount of market expertise on account of its experience. In 2011, activities concentrated on navigating the many existing funds as safely as possible through the crisis. Where necessary, funds were restructured.

FUND INITIATORS AND RETAILERS FACE MATERIAL REGULATORY CHANGES:

For one thing, investment products are now classified as financial instruments as defined in the German Banking Act (KWG) under the Act to Amend the Law Governing the Mediation of Financial Assets and the Law Governing Investment Products. This means that certain services hitherto provided by fund initiators, such as trade in secondary-market shares, now require a license under Section 32 of the German Banking Act. The material provisions of the new Act will be taking effect from June 1, 2012.

Moreover, the European AIFM Directive is directed at the managers of alternative investment funds (AIFMs), which also include closed-end investment funds. One of the most important new elements stipulated by the AIFM Directive is the requirement that AIFMs be approved by BaFin. For this purpose, BaFin determines, for example, whether the fund issuer operates a risk management system for itself and the funds which it manages and whether the minimum requirements with respect to capital are observed. The Directive is to be ratified in national law in 2013.

From left to right Upper row: Holger Schmitz, Dr. Daniela Hasche, Michael Arndt

Bottom row: Frank Ahrens, Christiane Kerschke, Florian von Nolting

CLEVER MINDS

Team work forms the basis of success

Traditionally, Lloyd Fonds has always had outstanding second-level management. With the realignment implemented at the turn of the year, there have been a number of important changes.

Holger Schmitz, who was a member of the Management Board responsible for finance and fund structuring up until 2007, is back on board and is one of the three general managers in charge of the shipping department. Michael Arndt, formerly managing director at Hamburg Trust, has been appointed general management with operational

responsibility for sales and marketing. General manager Florian von Nolting is heading the newly established "Investments and Alternative Assets" department, which manages the Company's own investments and will particularly also be stepping up the consolidation of the closed-end fund market. Long-standing employees Dr. Daniela Hasche, Christiane Kerschke (both of whom have signing powers for the Company) and Frank Ahrens (as managing director) are in charge of legal matters, finance and the Company's own trusteeship business.

The 105 funds which we have initiated since 1995 form the foundations of Lloyd Fonds AG. The 16 funds which had been dissolved as of the end of 2011 generated substantial gains for their subscribers. This strong performance is also the result of the good asset management on the part of Lloyd Fonds AG employees.

FOUNDATIONS.

105 INVESTMENT FUNDS, 53,000 SUBSCRIBERS, INVESTMENT VOLUME OF d 5.1 BILLION

An interim result

Lloyd Fonds AG is one of the most consistently successful arrangers of closed-end investment funds in Germany. More and more attention is being paid to the quality of the fund arranger. Over a period of more than 16 years, Lloyd Fonds has established 105 investment funds, including 75 ship funds and 12 real estate funds, firmly establishing itself in the market in these two asset classes.

Closed-end investment funds are managed tangible assets. They are only as good as the people behind them. The Lloyd Fonds Group has over 70 employees with the knowledge and experience required to create solid investment funds with clear structures and to manage them successfully throughout their entire life cycle.

Return on funds

% p.a. of dissolved funds as of 31. December, 2011

In particular, our ship fund managers and trusteeship employees are facing major challenges once more. There has been a substantial decline in demand for shipping capacity. At the same time, new tonnage is soon to be delivered in all fleet and size segments. Actively managing this situation in the best interests of the subscribers will be one of the most important tasks for Lloyd Fonds this year. The Company is currently working on innovative funding for part of its ship portfolio.

Excellent fund management

To date, 16 funds have been dissolved. With an average duration of just under four years, they have yielded an average post-tax return of over 9% per year. At the subscriber level, flowbacks achieved to date on the funds documented in the current statement of performance stand at 4.2% per year of invested subscriber capital. The real estate segment in particular has proven its merits as a low-risk investment and, on average, exceeded the applicable forecasts.

As of 31. December, 2011

OUR FUNDS HINGE ON GOOD EMPLOYEES

Performance backed by experience and knowledge

One crucial determinant of Lloyd Fonds' success lies in the skills of its employees. Experienced specialists work at Lloyd Fonds, where they are responsible for asset and fund management, asset sourcing, structuring new investment funds, sales, marketing and long-term subscriber relationship management. The Lloyd Fonds employees shown here by way of example have been working for a combined period of 78 years for the Group. They include, for example, Alexandra Krüger, who has been with the Company for twelve years and works as an assistant in the Shipping department, and Claudia Gutsche, who completed her dual studies in business administration in September 2011 and is now working in ship fund management.

From left to right:

Alexandra Krüger, assistant to the head of ship fund management, employed since May 2001, Thomas Preuß, investments & alternative assets fund development, employed since October 2008; Claudia Gutsche, ship fund manager, employed since September 2008; Torsten Reese, real estate fund development and management, employed since July 2006; Aysegül Erdogan, account team head, employed since September 2003; Jennie Bibow, subscriber relations manager, employed since January 2004; Janina Blanck, subscriber relations manager employed in 2002–2005 and since April 2008; Jürgen Hutt, head of ship fund management, employed since January 2007; Hendrik Duncker, Marketing, employed since April 2002; Susann Heinecke, assistant to the Management Board, employed since February 2006.

Changing market conditions are forcing initiators of closed-end investment funds to develop sustainable financing structures for the future. This applies to both existing and new funds. We view this change as an opportunity for preparing Lloyd Fonds AG for the future on a long-term basis.

CHANGE.

THE INVESTMENT FUND MARKET IS CONTINUING TO CHANGE

Evolving market conditions call for structural adjustments

The closed-end fund industry is in a state of flux. The challenges arising from the financial and economic crisis as well as changing investor interests have necessitated adjustments on the part of fund initiators. However, the new regulatory requirements being stipulated by Berlin and Brussels are also intensifying the changes in our industry.

Thanks to more stringent legislative requirements for fund initiators and retailers, closed-end investment funds are now subject to the same regulation as other financial products and are firmly part of the "white" capital market.

In addition, the AIFM Directive will dilute the distinction between fund issuers and asset managers. Looking forward "maximum outsourcing" of services will no longer be a viable business model, thus forcing fund initiators to strengthen their asset skills.

The trusteeship model in its present form will also change as a result of the AIFM Directive. Looking forward, the fund manager, who will be subject to EU-wide regulatory quality requirements, will be the central contact for subscribers. In addition to acting as a depository, trusteeship entities will officially be what they have long since already become, namely service providers for subscribers and AIFMs.

Not all fund initiators will be able to meet these heightened statutory requirements and keep pace with the changes, something which is likely to trigger a wave of sustained consolidation within the sector. According to a study by FondsMedia, around three quarters of fund initiators which were active on the market in 2001 have since disappeared. This trend will continue. Our goal is to play an active role in this consolidation process.

NEW FORMS OF FINANCE ARE BEING CALLED FOR

In the future, there will continue to be urgent demand for equity

The structural changes which the close-end investment fund segment is undergoing will render it viable for the future. This is because closed-end funds are a crucial source of finance for projects with high relevance for society as a whole. Thus, over the past few years, they have financed numerous energy and infrastructure projects, thus making a key contribution to the economy as a whole.

Against this backdrop, Lloyd Fonds has successfully implemented low-risk structures for its new funds. Thus, in designing the "Lloyd Fonds A380 Singapore Airlines" fund, it was able to arrange the full finance for the purchase of the A380, thus proving that it is possible to structure first-class funds even without placement guarantees. We are determined to continue using such fund models in the future with their reduced risk exposure for all parties concerned.

»In the future, we will not be exposing ourselves to any further incalculable risks in connection with placement guarantees.«

Yet, it is not only the sector itself which is undergoing change - the new financial structures for closed-end funds must constantly adjust to new underlying conditions. On the one hand, the security of an investment product will be crucial for its success; on the other, subscribers expect an attractive return on their investments.

Prior to the outbreak of the global economic and financial crisis, fund initiators frequently also issued placement guarantees for their funds. In doing so, they assumed risks which they can no longer reasonably absorb in the current market environment. Before Lehman, such guarantees were a theoretical structure with very little likelihood of actually being used. However, the crisis years show that placement guarantees must now be seen in an entirely different light. This means that fund initiators can only issue guarantees that they are actually able to honor in the event of any recourse being taken to them.

Lloyd Fonds sets sector-wide standards in transparency. We are in an ongoing dialog with our shareholders, subscribers, business associates and retail partners. This openness creates trust and strengthens our business strategy in the long term.

TRANSPARENCY.

TRANSPARENCY ON ALL LEVELS

Continuous dialog engenders trust

Transparency is of crucial importance for all financial service providers. Lloyd Fonds has always been committed to this principle and has been communicating with investors, subscribers, business associates and retail partners openly and comprehensively particularly in the last few crisis-ridden years. The Company's stock market listing entails considerable disclosure requirements. Lloyd Fonds is listed in the Prime Standard, to which the strictest transparency rules of the Frankfurt stock exchange apply. Looking forward, the stock will continue to be traded under its ISIN code DE0006174873 on the electronic Xetra trading platform, on the floor and also at regional stock exchanges.

Trusteeship activities are nothing other than a form of investor relations. Transparent and service-centric communications are taken seriously by Lloyd Treuhand with its 22 employees. The Company attaches key importance to ensuring that the more than 52,000 subscribers are kept informed swiftly and in a readily understandable manner of the state of their investments free of any errors or omissions. In the interests of even greater quality, Lloyd Treuhand's management system has been certified by the renowned testing company Germanischer Lloyd in accordance with ISO 9001:2000 and is one of the first in this market to have done this.

"You must expose yourself to the glass principle of transparency if you manage other people's money."

• Harmonized processes
• Ongoing customer satisfaction analyses
• Continuous upskilling for all employees
• Annual management reviews

Lloyd Fonds is also a pioneer in transparent reporting on the performance of its active funds. In fact, in an industry first we decided to have our "Holland Utrecht" real estate fund monitored and analyzed objectively and independently by rating agency Scope throughout its entire life cycle. In this way, retailers and subscribes receive a comprehensive and updated report on the performance of the fund from an external auditor at least once a year. Lloyd Fonds AG received the 2011 Scope Transparency Award in recognition of this.

Our guiding principle: service and transparency

Good service and a high degree of transparency form the basis for a fund initiator's success - now more than ever before. The fact that we live up to our own principles is reflected in the latest study by the German Institute of Service Quality, which examined a total of seven fund initiators operating in different areas. Lloyd Fonds ranked first in nearly all categories as well as in the final result as the fund initiator with the best service and the greatest transparency in relations with subscribers and retail partners.

Lloyd Fonds AG is a founding member of the Association of Closed-End Investment Funds (Verband Geschlossener Fonds e.V. (VGF)) in Berlin. The association represents the interests of the German fund initiators and actively and transparently keeps political representatives, media and investors informed of closed-end investment funds as an investment product. The two members of Lloyd Fonds AG's Management Board were actively involved in establishing the association. Dr. Torsten Teichert has been a member of VGF board and its treasurer since its establishment. Dr. Joachim Seeler is chairman of Ombudsstelle Geschlossene Fonds e.V. and for many years after its establishment was also the chairman of VGF.

Contents

The stock	28
CO RPORATE GOVERNANCE	32
Report of the Superv isory Boar d	38
Group manag ement report	42
Business and underlying conditions	42
Business activities	42
Markets and market position	42
Group strategy and objectives	42
Organization and management structure	43
Legal structure	45
Value management and control system	45
Economic conditions	46
International economy	46
Economic situation in Germany	46
Closed-end fund market	46
Legal environment	48
Business performance and economic conditions 49
Material events in 2011	49
Business performance by asset class	51
Target achievement	53
General statement of business performance
and economic conditions	53
Results of operations	54
Segment information	56
Net assets and financial situation	58
Net assets	58
Principles and objectives of financial management 59
Financial condition	59
Employees and compensation report	60
Trends in employee numbers	60
Compensation and incentive systems Basic elements of the compensation system	61
for the Management Board	61
Training and skills development	61
Products and services	62
Asset sourcing	62
Fund development	62
Fund management	63
Subscribers and trusteeships	64
Sales and Marketing	64
Disclosures in accordance with section 315 (4)
of the German Commercial Code	66

Risk report	66
Risk management system	67
Economic and sector risks	67
Strategic and operational risks	69
Organization and personnel
management structure	72
IT risks	73
Financial risks	73
Other risks	74
Overall assessment of risk situation	75
Main characteristics of the accounting-related
internal control and risk management system	76
Material events occurring after the
balance sheet date	77
Outlook	78
IMF forecasting slight recession	78
Closed-end investment fund market facing
a turnaround	79
Outlook for the Company	80
Opportunities	80
Consolidat ed Finan cial
Stat ements	82
Consolidated income statement	82
Consolidated statement of
comprehensive income	82
Consolidated balance sheet	83
Consolidated cash flow statement	84
Consolidated statement of changes in equity	85
Notes to the Consolidated
Financial Statements for 2010	86
General information	86
Summary of significant accounting policies	86
Financial risk management	95
Use of estimates and assumptions and
changes to estimates Segment information	101 103
Notes on the consolidated income statement	105
Notes on the consolidated balance sheet	110
Notes on the consolidated cash flow statement	118
Other disclosures	119
Responsibility statement	127
Auditor's report	128
Financial calendar	129

The STOCK

Lloyd Fonds AG's share capital rose to A 27.5 million following the issue of 14.7 million new shares. With the proceeds from the issue, the Company was able to complete its three-year restructuring phase at the beginning of 2012. After very volatile performance, Lloyd Fonds stock stabilized at A 1.01 at the end of 2011.

The euro and debt crisis are exerting pressure on the global financial markets

Equities markets were extremely volatile throughout all of 2011, with concerns surrounding the difficult financial situation in the euro zone as well as in the United States exerting massive pressure on global financial and capital markets during the entire year. In particular, the dramatic volume of Greek debt and the downgraded ratings of numerous European countries fueled discussion on the future viability of the single European currency. The European sovereign debt crisis followed almost seamlessly from the previous financial market and bank crisis. In addition, the earthquake catastrophe in Japan and the political turmoil in North Africa and the Middle East aroused additional fears in the financial and capital markets.

In the wake of this development in tandem with fears of a new global economic crisis, investors around the world took to almost panic-like selling. As a result, the DAX tumbled to a new two-year low of 5,072 points in mid September down from its three-year high of 7,527, which it had reached in May on the strength of upbeat corporate and economic news. In the period under review, the DAX declined by 15.4% and the SDAX by 14.6%. During the same period, the price of a fine ounce of gold rose by 10.5% to US-\$ 1,568.

Performance of Lloyd Fonds stock

Lloyd Fonds stock was highly volatile in the period under review. At the beginning of the year, investors paid particularly close attention to listed investment fund initiators. Starting from a low level, their stock prices almost doubled in the first six weeks of the new year, accompanied by a sharp rise in trading volumes. However, as the year unfolded, these gains were ceded again.

The persistently disappointing placement figures for the entire closed-end investment fund sector and the consolidated net loss for the first half of the year reported by Lloyd Fonds exerted pressure on the Company's stock. In particular, the very strong selling pressure in tandem with above-average trading volumes in the third quarter caused the stock to dip below the important oneeuro mark, hitting a low of a 0.87. During this period, Ernst Russ GmbH & Co. KG reduced its share substantially.

At the end of the year, Lloyd Fonds AG issued 12.7 million new shares on a cash basis, bringing the Company's total share capital to 27.5 million shares. The price of the stock stabilized closed to the subscription price of the new shares of a 1.00, closing at a 1.01 on 30 December 2011. The stock retreated by 46.4% over the entire period under review.

Performance of Lloyd Fonds stock

Lloyd Fonds AG SDAX

Changes in share capital

On October 21, 2011, Lloyd Fonds AG announced that the Management Board acting with the Supervisory Board's consent had decided to increase the Company's share capital by up to a 15.0 million on a cash basis by issuing up to 15.0 million new bearer shares each constituting a share of a 1.00 in the Company's share capital. In accordance with the subscription ratio, shareholders were entitled to subscribe to six new shares for every five shares which they already held in Lloyd Fonds AG. After the resolution to this effect had been passed at the extraordinary shareholder meeting held on December 5, 2011, 0 50 100 150 200

the subscription period commenced on December 9, 2011 and expired on December 22, 2011. A total of 14.7 million new shares were issued, generating proceeds of a 14.7 million. As a result, Lloyd Fonds AG's share capital increased from 12,725,367 to 27,469,927 issued shares. After being entered in the trade register on December 30, 2011, the new shares will be admitted to regulated trading in the Frankfurt stock exchange after clearance has been received for the issuing prospectus from the German Federal Financial Supervisory Authority (BaFin). The issuing prospectus is being prepared on the basis of the consolidated and annual financial statements for 2011, with the new shares expected to be admitted to trading at the end of May 2012.

In connection with the equity issue, the US investment company AMA Capital Partners LLC (AMA) sought a share of up to 49.9 percent in Lloyd Fonds AG via ACP Fund V LLC and undertook to subscribe to all shares not subscribed to by the other shareholders up to 49.9% provided that certain conditions were met. Further conditions on which AMA's involvement was contingent were that ACP Fund V LLC was to acquire at least 30% of Lloyd Fonds AG, that the BaFin absolved it of the duty to submit a takeover bid and that an agreement was reached with the banks concerning the final liability release compensation.

On December 12, 2011, all formal conditions for AMA's involvement were satisfied: Thus, BaFin had absolved it of the duty to submit a takeover bid on December 5, 2011. On January 10, 2012, Lloyd Fonds AG paid the liability release compensation, for which a deduction from a 13.65 million to a 10.0 million had previously been negotiated, to the banks. In connection with the equity issue, Dr. Torsten Teichert, CEO of Lloyd Fonds AG, subscribed to 200,000 new shares and therefore now holds approximately 865,000 of the Company's shares.

Shareholder structure

In the third quarter, there was a change in the shareholder structure due to the substantial reduction in the share held by Ernst Russ GmbH & Co. KG, followed by a further material change as a result of the issue of new shares at the end of 2011. Consequently, the Company now has the following shareholder structure: The new principal shareholder is ACP Fund V LLC, which holds 13.7 million shares (49.9%). The second largest shareholder is B&P-T Treuhandgesellschaft with 2.8 million shares (10.2%). Wehr Schiffahrts KG holds 3.3% of the voting rights, equivalent to 904,000 shares. The relative share held by Dr. Torsten Teichert, CEO, contracted to 3.2%. However, in absolute terms it rose by 200,000 shares to around 865,000 shares. Roughly 33.3% of Lloyd Fonds' shares are now free float.

Lloyd Fonds stock parameters

WKN 617487	ISIN DE0006174873, ticker (Reuters) L10
Market	Official trading in Frankfurt/Main
Market segment	Prime Standard index
Subscribed capital	a 2.7 million
Designated Sponsors	DZ BANK AG, Close Brothers Seydler Bank AG, Silvia Quandt & Cie AG
First day of trading	October 28, 2005
Type	Bearer shares with a notional share of a 1.00 per share in the Company's subscribed capital
Number of shares (December 31, 2011)	27,469,927
Issue price (October 28, 2005)	a 15.39
High for 2011	a 3.60
Low for 2011	a 0.87
Price on December 30, 2011	a 1.01
Market capitalization (December 30, 2011)	a 27.7 million
Trading volumes (daily average in 2011)	15,141 shares
Price on March 30, 2012	a 1.10

Two shareholder meetings in 2011

Lloyd Fonds welcomed around 120 shareholders to its annual general meeting for 2011 held on August 30, 2011 in Hamburg. Following their report on the Company's performance in 2010, both members of the Management Board were available to provide detailed answers to questions concerning Lloyd Fonds' business and corporate strategy. As the offices held by the Supervisory Board members Prof. Dr. Eckart Kottkamp and Dr. Thomas Duhnkrack expired at the end of the annual general meeting, new elections were necessary. Both gentlemen were re-elected to the Supervisory Board for a further term; Prof. Dr. Eckart Kottkamp as the Chairman of the Supervisory Board and Dr. Thomas Duhnkrack as the Deputy Chairman.

At the extraordinary shareholder meeting, which was also held in Hamburg on December 5, 2011, 99.9% of the shareholders represented passed a resolution to increase the Company's share capital with indirect subscription rights for the shareholders. In addition, resolutions to revise the Company's articles of incorporation to provide for an enlarged Supervisory Board and for the election to the Supervisory Board were passed. As a result, the Supervisory Board was increased to six members as of December 30, 2011. The three new members of the Supervisory Board were proposed by the new majority shareholder.

Transparent investor relations

The purpose of our communications with our subscribers and shareholders is to achieve the greatest possible transparency. Lloyd Fonds engages in numerous different activities to address the heightened need for information. Thus, it attended various investor conferences in the course of the year. In addition, Lloyd Fonds kept analysts and investors briefed on the Group's performance in numerous press releases and one-on-ones with analysts and investors. Activities such as telephone conferences on the interim reports formed further key elements of the Company's investor relations activities. Another important task is to maintain personal contact with private shareholders. At the same time, Lloyd Fonds' Management Board and the investor relations department were available to shareholders and the general public at all times for questions, comments and information in person, over the telephone and by e-mail to provide a realistic view of the Company's future business performance. The main platform for meeting private shareholders is the annual general meeting together with the Börsentag Hamburg conference each year.

CORPORATE GOVERNANCE

The term "corporate governance" refers to the responsible management and supervision of companies. The Lloyd Fonds Group attaches key importance to good corporate governance. The goal jointly pursued by the Management Board and the Supervisory Board is to ensure the Company's continued viability and to encourage the sustained creation of value.

1. Corporate governance declaration

Lloyd Fonds observes the principles of good and transparent corporate governance, which are subject to regular review and further development. The Management Board and the Supervisory Board of listed German companies are required by Section 161 of the German Stock Corporation Act to submit an annual corporate governance declaration. This declaration comprises material parts of the corporate governance report, such as the declaration of conformity with the German Corporate Governance Code in accordance with Section 161 of the Stock Corporation Act as well as relevant disclosures on corporate governance practices going beyond the scope prescribed by statute as well as details of where this information is publicly available and a description of the manner in which the Management Board and the Supervisory Board works as well as the composition and method of work of the Supervisory Board's committees. The Supervisory Board and the Management Board have expressly confirmed their commitment to the principles of good corporate governance by signing the following declaration of conformity.

Declaration of conformity with the German Corporate Governance Code by Lloyd Fonds AG pursuant to section 161 of the stock corporation act

The Management Board and the Supervisory Board of Lloyd Fonds AG declare as follows:

The recommendations issued by the Government Commission on the German Corporate Governance Code (GCGC) published by the German Federal Ministry of Justice in the official part of the electronic "Bundesanzeiger" on July 20, 2005 as amended on May 26, 2010 were and continue to be observed by Lloyd Fonds AG with the exception of the following recommendations:

• 1. At this stage, Lloyd Fonds AG does not offer its shareholders the option of voting by mail as various legal questions in this connection still require clarification and the Management Board and the Supervisory Board consider the risks to the Company to be unreasonably large. Accordingly, Articles 2.3.1 and 2.3.3. of the GCGC are not observed.
• 1. Contrary to Article 3.8 Paragraph 3 of the GCGC, the D&O cover taken out by the Company does not include any deductibles for individual members of the Supervisory Board. This is because Lloyd Fonds AG takes the view that given the low fixed remuneration a deductible is not appropriate or even necessary to additionally heighten the sense of responsibility on the part of the Supervisory Board.
• 1. The Management Board and the Supervisory Board support efforts in society to ensure equality for different groups of people including women in the workforce and therefore strictly observe the applicable anti-discrimination legislation in the recruitment and development of staff as well as of members of the Company's management bodies. A large proportion of management positions is held by women. However, the Management Board and the Supervisory Board are primarily committed to furthering the Company's business interests and, for this reason, diversity and the equal treatment of women are not included in its main corporate objectives. This is particularly the case given that the Company operates in an extremely specialized area in which it is already very difficult to find qualified candidates for key positions. Against this backdrop, the Supervisory Board has decided not to specify any targets for its composition. Accordingly, Articles 4.1.5, 5.1.2 and 5.4.1. of the GCGC are not observed.
• 1. Lloyd Fonds AG does not consider an age limit for the members of the Management Board or the Supervisory Board to be appropriate as it is primarily their qualifications, knowledge and skills which play a material role for the Company. Accordingly, the Management Board and the Supervisory Board have decided to dispense with an age limit and have therefore not implemented Article 5.1.2 (2) Sentence 3 and Article 5.4.1 (2) Sentence 1 and (3) of the GCGC.
• 1. In derogation from Article 5.2. et seq. of the GCGC, the Supervisory Board of Lloyd Fonds AG has not established any committees on account of its size. The corresponding tasks are performed by all six members jointly.
• 1. The Company's consolidated financial statements are not published within the shorter periods provided for in the GCGC for the publication of consolidated financial reports (Article 7.1.2 Sentence 3 of the GCGC). In accordance with the rules of the Frankfurt Stock Exchange (regulated market with additional post-listing rules for the Prime Standard), Lloyd Fonds AG's consolidated financial statements are made available to the public within four months. This is due to the numerous subsidiaries which must be consolidated within a very short period of time.

Hamburg, April 2012

Dr. Torsten Teichert Prof. Dr. Eckart Kottkamp CEO Chairman of the Supervisory Board

2. Corporate governance practice

Lloyd Fonds AG as well as its Management Board and Supervisory Board are committed to good and responsible corporate governance. The Company attaches crucial importance to fair activities in compliance with all legislative provisions at all levels and in all departments. To this end, all corporate governance practices are based on the relevant statutory provisions and generally acknowledged standards and recommendations. The conduct of the Company and its employees is underpinned by moral and ethical values including fair, respectful and lawful behavior.

In addition to the observance of these generally acknowledged principles of good corporate governance, the Company has also adopted individual internal procedures and policies which are put into practice and respected by all employees in the interests of good and sustained business performance at Lloyd Fonds.

In addition, there are standards for handling the now over 52,000 subscribers which Lloyd Treuhand has on its books. Given the special nature of the Company's business, in which joint activities with partners continue over the entire life time of the product, there are no special rules for such shared activities. Rather, open and fair communications and joint responsibility form the material basis for success. The successful development of solutions for distressed investment funds at round tables testifies to the established and proven structures between the parties. The governance and supervision of the Company comply with German statutory law and ethical standards as well as nearly all the recommendations of the German Corporate Governance Code. There are no special instructions or recommendations which go beyond the scope prescribed by statute and which are disclosed to the general public.

3. WORK OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD

Good corporate governance crucially hinges on constructive relations between the Management Board as the executive body and the Supervisory Board as the non-executive body. This serves the interests of responsible corporate governance aimed at creating value and balancing conflicting interests. This primarily entails efficient and confidence-inspiring collaboration between the Supervisory Board and the Management Board, the observance of the interests of shareholders and other business partners as well as open and immediate communications with all stakeholders.

DUTIES OF THE MANAGEMENT BOARD

The Management Board independently manages the Company. Its main duties include determining the Company's strategic alignment and developing and enhancing organizational structures as well as planning and monitoring systems on which it consults with the Supervisory Board and which it is ultimately responsible for implementing. In this connection, it is committed to preserving the Company's interests and to enhancing its enterprise value on a sustained basis. Other crucial duties entail management development, corporate communications and investor relations as well as implementing appropriate risk management and monitoring. In addition, it determines the allocation of resources and key personnel within the Company. The Management Board of Lloyd Fonds AG currently has two members, who hold the following responsibilities:

Dr. Torsten Teichert, Chief Executive Officer

Transport, real estate, energy, legal, PR (until January 21, 2012) Finance, shipping, energy, assets & alternative investments, legal, taxes, IR, personnel (from February 1, 2012)

Dr. Joachim Seeler

Real estate, sales and marketing, trusteeship, PR (from February 1, 2012)

Michael F. Seidel

Finance, sales and marketing, trusteeship, IR (until January 31, 2012)

Close collaboration between the management board and the supervisory board

The Management Board works closely with the Supervisory Board, briefing it on all relevant matters pertaining to planning, business performance, risk exposure and risk management regularly, comprehensively and with minimum delay. At the extraordinary shareholder meeting held on December 5, 2011, the shareholders were asked to pass resolutions approving the equity issue with indirect pre-emptive subscription rights, amendments to the articles of incorporation to provide for the enlargement of the Supervisory Board from three to six members and the election of the Supervisory Board. As a result, Lloyd Fonds AG's Supervisory Board now comprises six members:

Prof. Dr. Eckart Kottkamp, Chairman
	Dr. Thomas Duhnkrack, Deputy Chairman
Gunther Bonz
Paul M. Leand Jr.	(from December 30, 2011)
Jens Birkmann	(from December 30, 2011)
Rodney M. Rayburn	(from December 30, 2011)

The Supervisory Board of Lloyd Fonds AG, which comprises renowned financial and maritime experts and representatives of Lloyd Fonds AG's principal shareholder, advises the Management Board and monitors its activities, also in the light of the achievement of the Company's long-term objectives. By engaging in regular dialog, both the Management Board and the Supervisory Board are always kept informed of the condition of the Company's business, its forecasts and its strategies. Decisions with a fundamental bearing on Lloyd Fonds' business performance must be approved by the Supervisory Board. Other key duties conferred on the Supervisory Board include the appointment of members to the Management Board, the proposal of the statutory auditor and the examination and approval of the annual financial statements of Lloyd Fonds AG and the Group.

Extensive communicat ions with the capital market and the shareholders

Lloyd Fonds' consolidated annual and interim financial statements are prepared in accordance with the principles of the International Financial Reporting Standards (IFRS). The Company publishes the consolidated financial statements no later than 120 days after the end of the fiscal year and interim reports within 45 days after the end of the quarter to which they refer.

In addition, Lloyd Fonds releases ad-hoc bulletins and press information on all matters liable to influence the Company's net assets, financial condition and results of operation. In doing so, it observes the principle of fair disclosure to ensure that information is made available to all relevant target groups immediately and at the same time. All information is available for inspection and downloading at its website at www.lloydfonds.de. In this way, Lloyd Fonds creates the basis for the high transparency to which the Company is committed towards the public at large and its shareholders.

The Management Board convenes a meeting of Lloyd Fonds AG's shareholders at least once a year, stating the agenda. The invitation to the shareholder meeting and the reports and documents stipulated by law for the meeting including the annual report and the agenda may be inspected on the Company's website. At this stage, Lloyd Fonds AG does not offer its shareholders the option of voting by mail as various legal questions in this connection still require clarification and the Management Board and the Supervisory Board consider the risks to the Company to be unreasonably large.

Directors' dealings

Members of the Management Board hold shares in Lloyd Fonds AG. The relevant details can be found in the notes to the consolidated financial statements on pages 120. As far as the Company is aware, the members of the Supervisory Board do not hold any shares.

Under Section 15a of the German Securities Trading Act, the members of the Management Board and the Supervisory Board are required to disclose the acquisition or sale of any securities issued by Lloyd Fonds AG in cases in which the sum total of such transactions for a given calendar year exceeds an amount of a 5,000.

In connection with the equity issue, Dr. Torsten Teichert subscribed to 200,000 shares at a subscription price of a 1.00 per share on December 23, 2011. Following the entry of the equity issue in the commercial register on December 30, 2011, Dr. Torsten Teichert now holds a total of 865,000 shares, equivalent to 3.2% of the entire shares outstanding.

4. Lloyd Fonds AG remuneration report

The remuneration report describes the underlying principles for the remuneration of the Management Board and the Supervisory Board of Lloyd Fonds AG. The Company's remuneration system very largely observes the recommendations set forth in the German Corporate Governance Code. The purpose of the remuneration system is to compensate the members of the Supervisory Board and the Management Board on a basis commensurate with their activities and responsibilities.

Remuneration of the Management Board

The purpose of Lloyd Fonds AG's remuneration system is to provide reasonable compensation for the personal services rendered in the light of the Company's economic position and performance. In addition, it is based on generally acknowledged sector and national standards as well as the Company's best interests.

Determination of Management Board remuneration

The Supervisory Board formulates and approves a proposal for the Management Board remuneration.

Amount and structure

The annual remuneration paid to the members of the Management Board comprises two parts: a fixed and a variable component.

Fixed component

The amount of the fixed component is based on the duties and responsibilities assigned to the member of the Management Board, the length of service and generally acknowledged industry or market practices. It is paid in monthly installments.

Variable component

The variable component is determined by the Supervisory Board on the basis of an assessment of the situation and subject to the exercise of its due discretion. The variable component is based on Lloyd Fonds' business performance and theextent to which individually defined as well as general goals are achieved.

Remuneration for 2011

In 2011, the Management Board of Lloyd Fonds AG earned a 0.9 million (previous year a 1.1 million). Of this, Ta 650 was fixed, Ta 220 was variable and Ta 56 comprised fringe benefits. A breakdown of the individual salaries of the members of the Management Board can be found on page 119 of the IFRS consolidated financial statements for 2011.

D&O cover

Lloyd Fonds has taken out D&O (directors and officers liability) cover for the members of the Management Board subject to a deductible of 10% of the claim capped at one-and-a-half times the fixed annualremuneration of the Management Board member concerned.

No deductibles have so far been defined for the D&O cover taken out for members of the Supervisory Board. This is because Lloyd Fonds AG takes the view that given the low fixed remuneration a deductible is not appropriate or even necessary to additionally heighten the sense of responsibility on the part of the Supervisory Board. However, this is inconsistent with the newly enacted Act on the Appropriateness of Management Board Remuneration and the most recently amended recommendations of the German Corporate Governance Code.

Shares in the Company held by members of the Management Board

As of December 31, 2011, the members of the Management Board as of December 31, 2011 and the current members of the Management Board held a total of 865,135 shares in the Company, equivalent to 3.2% of the total number.

Remuneration of the Supervisory Board

The remuneration paid to the members of the Supervisory Board comprises a fixed and a variable component.

Determination

The remuneration paid to the Supervisory Board is determined by the articles of incorporation and a resolution passed by the shareholders in 2007.

Amount and structure of the fixed component

Each member of the Supervisory Board receives fixed compensation of Ta 10 per year, with the chairman of the Supervisory Board receiving twice this amount and the deputy chairman one-and-a-half times this amount.

Amount and structure of the variable component

A resolution was passed in 2007 providing for the payment of variable remuneration to the members of the Supervisory Board. This compensation equals 0.05 percent of the consolidated net profit after tax calculated in accordance with the International Financial Reporting Standards (IFRS).

There is no cap on the remuneration paid to the Supervisory Board.

Remuneration for 2011

In 2011, total remuneration paid to the Supervisory Board came to Ta 45. Of this, variable remuneration accounted for a 0. A breakdown of the individual remuneration paid to each member of the Supervisory Board can be found on page 120 in the notes to the IFRS consolidated financial statements for 2011.

Shares in the Company held by members of the Supervisory Board

As far as the Company is aware, the members of the Supervisory Board do not hold any shares.

Accounting and auditing

The annual financial statements and the consolidated financial statements of Lloyd Fonds AG were audited by TPW GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Hamburg. The audits were conducted in accordance with German auditing regulations and the principles of proper auditing of financial statements issued by Institut der Wirtschaftsprüfer.

Prof. Dr. Eckart Kottkamp, Chairman of the Supervisory Board

Report of the Supervisory Board

Ladies and gentlemen, dear shareholders,

In 2011, the Supervisory Board of Lloyd Fonds AG performed its duties in accordance with the relevant statutory provisions, the Company's Articles of Incorporation and the German Corporate Governance Code, advising and monitoring the Management Board and other members of the Company's management. The Management Board reported on the Company's business policy, forecasts, the state of its business, risk management and its condition and outlook on a timely and comprehensive basis at all times both in writing and orally. A key aspect of the work performed involved ensuring the Company's continued future viability. This entailed defining the structure of the future business portfolio and the risk structure of projects. In accordance with the strategy agreed upon, the Supervisory Board approved the initiation of the two large-volume funds "Lloyd Fonds Energie Europa" and "Lloyd Fonds A380 Singapore Airlines".

Of crucial importance was the decision to increase the Company's share capital with indirect pre-emptive subscription rights for the shareholders and, in this connection, to admit a strategic investor and new principal shareholder.The Supervisory Board agrees with the Management Board's view that the equity issue which has now been completed and the use of part of the proceeds from this issue to pay the liability release compensation are crucial steps towards stabilizing the Company on a sustained basis and to prepare it for the future.

Against the backdrop of economic conditions characterized by continued strong uncertainty, the shortfalls in the forecasts and the resultant adjustments which this necessitated were discussed and approved. In addition, the chairman of the Supervisory Board maintained regular contact with the CEO.

Main aspects of the Supervisory Board's deliberations

Last year, the Supervisory Board of Lloyd Fonds AG dealt with the following main matters:

• Resolution approving the annual financial statements and the consolidated financial statements for 2010.
• Deliberation on the quarterly reports and the half-year report for 2011.
• Deliberation on and approval of an equity issue. In this connection, approval of a simultaneous agreement with US investment company AMA Capital Partners LLC, which wished to acquire up to 49.9% of the Company's new capital subject to certain conditions being met and, on the basis of this agreement, the payment of the outstanding liability release compensation in accordance with the bank agreement signed in 2010 using the proceeds from the issue of the new equity.
• Approval of the private placement of "Lloyd Fonds Maritime Innovation" to support the further development and market launch of the automatic lashing platform developed by KALP GmbH and ensuing discontinuation of the sales efforts for this product following the commencement of promising negotiations between KALP GmbH and a potential industrial partner.
• Approval of the initiation of two large-volume funds in the energy and aircraft segment as well as a real estate investment fund despite the protracted weakness of conditions in the capital market and the mounting difficulties experienced in the course of the year in distributing long-term investment products.
• In response to market conditions, discussion on the optimization of the Group-wide cost structures, the necessary adjustments to the Group organization and headcount were discussed and approval of the Management Board's proposals.
• Ongoing analysis of and deliberation on conditions in the container shipping market. Analysis of long-term demand for transport capacity and the possible future fleet structure.
• Discussion of and decisions on the future portfolio and the future risk structure of projects.
• Analysis and discussion of the restructuring requirements for individual shipping companies.
• Discussion of the business performance of the companies in which Lloyd Fonds AG holds a majority share.

MEETINGS

The Supervisory Board held a total of eight meetings in person on January 11, March 2, March 31, April 11, April 28, June 14, August 29 and November 7. At the Supervisory Board's request, the two members of the Management Board were present at all meetings. The Supervisory Board dealt in detail with the Company's current business, the results of its operations and financial, capital spending and personnel matters.

Moreover, six conferences were held on February 21, May 9, July 5, August 8 and October 17 and 21 on matters and projects of current relevance. The necessary documents were sent to all members in good time by e-mail. As well as this, the members of the Supervisory Board discussed individual matters amongst each other over the telephone. Resolutions were passed at both the physical meetings and during the telephone conferences.

The Management Board submitted to the Supervisory Board details of all transactions requiring the latter's approval according to statute or the Company's articles of incorporation. This included budget and liquidity forecast as well as organizational and personnel matters.

The Supervisory Board of Lloyd Fonds AG has not formed any committees. It reviews its own work once a year. This results in individual proposals for improving its work, which are duly implemented at short notice.

Additions to the Supervisory Board

As the offices held by the Supervisory Board members Prof. Dr. Eckart Kottkamp and Dr. Thomas Duhnkrack expired at the end of the annual general meeting for 2011, new elections were necessary. Prof. Dr. Eckart Kottkamp was re-elected as Chairman of the Supervisory Board for a further period of office. In addition, Dr. Thomas Duhnkrack was elected as Deputy Chairman of the Supervisory Board as the successor of Hans-Bernd vor dem Esche.

At the extraordinary shareholder meeting held in 2011, the shareholders were asked to pass resolutions approving the equity issue with indirect pre-emptive subscription rights, amendments to the articles of incorporation to provide for the enlargement of the Supervisory Board from three to six members and the election of the Supervisory Board. As a result, Lloyd Fonds AG's Supervisory Board now comprises six members:

Prof. Dr. Eckart Kottkamp, Chairman Dr. Thomas Duhnkrack, Deputy Chairman Gunther Bonz Paul M. Leand Jr. (from December 30, 2011) Jens Birkmann (from December 30, 2011) Rodney M. Rayburn (from December 30, 2011)

Changes to the Management Board

On January 9, 2012, Michael F Seidel and the Supervisory Board came to an agreement that Mr. Seidel would leave the Company effective January 31, 2012. This decision was made in mutual agreement. The Supervisory Board thanks Mr. Seidel for his many years of dedicated service and wishes him all the best for the future.

Dr. Joachim Seeler was appointed to the Management Board of Lloyd Fonds AG effective February 1, 2012 and will be responsible in this position for real estate activities and as well as the Company's sales and trusteeship activities and PR. In connection with the changes to the Management Board, Dr. Torsten Teichert has assumed responsibility for financial matters in addition to his existing duties as well.

Corporate governance and declaration of conformity

Lloyd Fonds attaches key importance to good corporate governance and transparency. In April 2012, the Management Board and the Supervisory Board therefore issued an updated declaration of conformity in accordance with Section 161 of the German Stock Corporation Act and made this available to shareholders and the general public permanently on the Company's website as well as in this annual report (page 32).

Lloyd Fonds AG continues to conform to nearly all of the recommendations of the German Corporate Governance Code in its most recent version dated May 26, 2010.

Annual and consolidat ed financial stat ements of Lloyd Fonds AG

At the annual general meeting held on August 30, 2011 the shareholders passed a resolution appointing TPW GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Hamburg, as statutory auditors for the annual financial statements and the consolidated financial statements for the period from January 1, 2011 until December 31, 2011. This mandate also includes reviews of the interim financial reports prepared prior to the date of the annual general meeting for 2012 in cases in which such review is requested. The consolidated financial statements as of December 31, 2011 prepared by Lloyd Fonds AG in accordance with the International Financial Reporting Standards (IFRS), as endorsed by the EU, the Group management report, the annual financial statements as of December 31, 2011 prepared according to German GAAP (HGB) and the Parent Company management report were audited. The annual and the consolidated financial statements were issued with an unqualified auditors' report, which, however, contains a cautionary statement.

In addition, the statutory auditors examined the risk early detection system maintained by Lloyd Fonds AG in accordance with the Corporate Transparency Act. The audit revealed that the risk early detection system complies in full with all statutory requirements. The members of the Supervisory Board specifically examined the annual and consolidated financial statements, the Group management report, the Parent Company management report and the statutory auditors' reports. All documents were made available to the Supervisory Board in good time. The Supervisory Board discussed and evaluated in detail the annual and consolidated financial statements, the Group management report, the Parent Company management report and the statutory auditors' reports. The statutory auditor took part in the meeting, explaining the annual and consolidated financial statements and presenting the results of the audits. All questions asked by those attending the meeting were answered. Following deliberation, the Supervisory Board approved the results of the audit on April 27, 2012.

On the basis of the final results of its examination, the Supervisory Board did not raise any objections and duly adopted the annual financial statements and management report prepared by the Management Board. The annual financial statements are thus final. Similarly, on the basis of the final results of its examination, the Supervisory Board did not raise any objections and adopted the consolidated financial statements and the Group management report prepared by the Management Board.

Outlook for 2012

Given the advancing consolidation amongst arrangers of closedend investment funds and the greater regulation of the market for closed-end investment funds both at the European level and in national legislation, it can be assumed that larger initiators which are well positioned in their areas of expertise will be able to maintain and reclaim market share. Accordingly, Lloyd Fonds expects its own market position to improve substantially in the near future.

With the payment of the liability release compensation to the creditor banks in accordance with the bank agreement signed in April 2010, the Lloyd Fonds Group has now been freed from all contingent liabilities under the bank agreement. In addition, it has strengthened its equity base substantially with the equity issue and reduced its debt position. It is safe to assume that the improved situation in which the entire Lloyd Fonds Group finds itself will strengthen sentiment towards Lloyd Fonds and offer it material opportunities.

After sustained drastic losses in the wake of the financial crisis, the market for closed-end investment funds is still feeling the effects of subscriber reticence. Placement figures are still well short of the high level achieved in the pre-crisis years. However, preliminary signs of stabilization are emerging as placement figures in 2011 were better than had been indicated by market sentiment. In the long term, Lloyd Fonds AG assumes that the market for closed-end investment funds will recover – not least of all due to the rising risks of inflation and the copious liquidity in the capital market in search of attractive investment opportunities. As a provider of attractive investment products, Lloyd Fonds stands to benefit from this trend.

The Supervisory Board wishes to thank all employees of the Lloyd Fonds Group for their great dedication, unabated motivation and strong personal commitment. In addition, it would particularly like to express its gratitude to the shareholders who subscribed to the recent equity issue and have thus underscored their confidence in the Company in these continued challenging conditions.

Hamburg, April 27, 2012.

For the Supervisory Board

Prof. Dr. Eckart Kottkamp

MANAGEMENT REPORT OF THE Lloyd Fonds GROUP FOR 2011

Business and underlying conditions

Business activities

Lloyd Fonds AG is a listed initiator and leading arranger of closed-end funds and structured investment products. To date, it has arranged funds investing in shipping, real estate, aircraft, energy, traded endowment policies and private equity. In 2011, the Company concentrated on three asset classes, namely transport (shipping and aircraft), energy and real estate. Lloyd Fonds AG covers the entire value chain of a fund issuer, ranging from the sourcing of assets, structuring the investments and preparing the sales prospects to selling the funds, fund management and subscriber relations.

Since its incorporation, Lloyd Fonds has collected equity of around a 2.0 billion and amassed a cumulative investment volume of some a 5.1 billion. As of the end of 2011, 52,864 subscribers had invested in 105 of Lloyd Fonds AG's closed-end funds. In addition to Germany, Lloyd Fonds products are also sold in Austria. At the subscriber level, flowbacks achieved to date on the funds documented in the statement of performance for 2010 stand at an average of 4.2% per year of invested subscriber capital.

Lloyd Treuhand GmbH is the communications link between subscribers and all parties involved in the fund and represents the subscribers' interests for the duration of the funds in its capacity as the trustee partner and managing trustee. Via its wholly owned subsidiary TradeOn GmbH, Lloyd Fonds also buys, sells and structures secondary-market shares in closedend investment funds. In addition to these two companies, the Lloyd Fonds Group has a further 20 affiliated fully consolidated subsidiaries, which provide services in connection with Lloyd Fonds AG's business.

Markets and market position

Lloyd Fonds has been successful in the market for closed-end investment funds for more than 16 years. As a result, it is one of a small number of fund initiators able to look back on such a long history in the market. In 2011, Lloyd Fonds recorded equity placements of a 38.5 million including a 7.6 million for existing funds. According to the Association of Closed-End Investment Funds (VGF), total equity of around a 5.9 billion was placed in the market as a whole in 2011, i.e. almost unchanged over the previous year.

Group strat egy and objectives

With the successful execution of its equity issue at the end of the year under review, Lloyd Fonds was able to pay the reduced liability release compensation of a 10.0 million to the banks on January 10, 2012 and thus free itself in full of all contingent liabilities under the bank agreement. With this step, it achieved one of its main goals for the year under review and substantially reinforced its continued future viability.

This milestone will impact the Lloyd Fonds Group's strategy for 2012 in several different respects: The issue of equity of a 14.7 million resulted in a massive improvement in Lloyd Fonds AG's equity base. At the same time, the payment of the reduced liability release compensation meant that it was possible to reverse the provisions which had been set aside for this purpose, thus reducing the Company's liabilities substantially.

The substantial improvement in its balance sheet structure will allow Lloyd Fonds AG to strengthen its retail partners' trust in the Lloyd Fonds brand, enhance its competitiveness on this basis and return to the pre-crisis levels of equity. From this reinforced position, Lloyd Fonds AG wants to play an active role in the expected consolidation of the shipping segment and the closed-end investment fund market, particularly in the area of trusteeship entities and fund management in a bid to strengthen its enterprise value on a sustained basis.

With the entry of its new majority shareholder AMA Capital Partners following the equity issue, Lloyd Fonds has additionally gained a strong strategic partner who will be supporting its objectives and, in conjunction with Lloyd Fonds AG's management, working towards boosting the Company's enterprise value on a sustained basis.

In order to regain market share by pooling resources on this solid economic basis, Lloyd Fonds has decided to concentrate on two asset classes, namely shipping and real estate, although it will continue to work on placing its current range. By focusing on the core skills which it has gained over many years, it will also be addressing the growing importance of asset management.

In the shipping segment, Lloyd Fonds will particularly be focusing on the development of new investment and placement models for financing and restructuring existing funds to navigate them successfully through the protracted shipping crisis.

On the product side, it has additionally decided not to accept any material risks in the form of placement or bridge-finance guarantees for future funds in line with the strategy already successfully pursued with the two large-volume projects "Lloyd Fonds A380 Singapore Airlines" and "Lloyd Fonds Energie Europa".

Given the structural changes emerging in the financial markets and the difficult sector conditions, the Management Board has adopted further measures in the first quarter of 2012 aimed at optimizing operational processes and cost structures. In the course of the previous year, it had already reduced its headcount by one third as part of strategic cost management efforts to cover at least its personnel and rental expenses from the recurring income derived from ongoing trusteeship business and management fees.

Looking beyond 2012, the aim is to maintain the transparent communications with investors and subscribers as well as business and retail partners at a consistently high level. As a listed fund arranger, Lloyd Fonds is already under a legal obligation to ensure high transparency. On top of this, transparency and comprehensive reporting also form a central part of Lloyd Fonds AG's communication strategy towards shareholders, subscribers and business partners.

The need for transparency on the part of fund initiators and closed-end investment products will tend to strengthen with the growing legislative regulation of the market. Lloyd Fonds sees this as giving it a competitive lead and as confirmation of the course which it has been steering. This greater regulation will trigger market consolidation, in which Lloyd Fonds AG plans to acquire trusteeship entities and fund management units. For this purpose, a new department was established at the beginning of 2012 to manage the Company's own investments and particularly also to step up the consolidation of the closed-end fund market through the acquisition of portfolio business.

Organization and management structure

Against the backdrop of the muted market conditions, Lloyd Fonds AG continued to implement its cost-cutting program in the course of 2011, trimming its personnel expenses and the cost of material in particular. As of December 31, 2011, the Company had 78 employees, down from 113 one year earlier.

The structure of the Management Board remained unchanged in 2011 over the previous year. Dr. Torsten Teichert was responsible for corporate strategy and was in charge of asset sourcing as well as fund structuring and management in all asset classes. Michael F. Seidel oversaw financial matters as well as sales, marketing and trusteeship activities, among other things. He left the Company at the end of January 2012. Effective February 1, 2012 Dr. Joachim Seeler was appointed to the Management Board of Lloyd Fonds AG with responsibility for real estate, sales and marketing, trusteeship activities and PR. In connection with these changes, Dr. Torsten Teichert additionally assumed responsibility for the Company's finances as well.

In response to the proposal of the new majority shareholder, an extraordinary shareholder meeting was held on December 5, 2011 at which the shareholders were asked to pass resolutions approving the equity issue with indirect pre-emptive subscription rights, amendments to the articles of incorporation to provide for an enlarged Supervisory Board from three to six members and the election of the Supervisory Board. As a result, Lloyd Fonds AG's Supervisory Board now comprises six members.

Shareholder structure of Lloyd Fonds Group (as of December 31, 2011)

	Lloyd Fonds AG, Hamburg
	22 fully consolidated affiliated subsidiaries included in the IFRS consolidated financial statement
100%	– TradeOn GmbH, Hamburg – Lloyd Zweitmarkt GmbH, Hamburg – Lloyd Fonds Sales GmbH, Hamburg – Lloyd Fonds Austria GmbH, Vienna/Austria – Lloyd Fonds Special Assets GmbH, Hamburg – Lloyd Fonds Gesellschaft für Immobilienbeteiligungen mbH & Co. KG, Hamburg – Dritte Lloyd Fonds Private Equity Beteiligung GmbH & Co. KG, Hamburg – LFP Grundstücksgesellschaft Hamburg-Hamm GmbH, Hamburg – Lloyd Fonds Vermögensgarant GmbH & Co. KG, Hamburg – PPA Beteiligungsgesellschaft mbH, Hamburg – Lloyd Fonds Energy Management GmbH, Hamburg – Lloyd Fonds Energy Commercial Services GmbH, Hamburg
	Consolidated special purpose entities according to SIC -12 – 2. Lloyd Fonds Shipping Beteiligung GmbH & Co. KG, Hamburg (Bet. Konzern 48.9%) – 2. Lloyd Fonds Real Estate Beteiligung GmbH & Co. KG, Hamburg (Bet. Konzern 48.9%) – 2. Lloyd Fonds Aviation Beteiligung GmbH & Co. KG, Hamburg (Bet. Konzern 49.2%)
100%	Lloyd Shipping GmbH, Hamburg Lloyd Fonds Singapore Pte. Ltd., 100% Singapur
100%	Lloyd Fonds Real Estate Lloyd Fonds US Real Estate 100% Management GmbH, Hamburg Management Inc., Naples/USA 25%
100%	Lloyd Fonds US Real Estate I L.P., Lloyd Treuhand GmbH, Hamburg 75% Naples/USA
100%	21. LloFo Beteiligungsgesellschaft mbH & Co. KG, Hamburg
	138 associates including: Feedback AG, Hamburg TVO Income Portfolio L.P., El Paso, USA KALP GmbH, Böel 185 "available-for-sale" investments including: 133 associates 52 affiliated companies, not consolidated due to immateriality

Legal structure

Lloyd Fonds AG holds a 40.1% share in listed financial services retail company Feedback AG, Hamburg, a holding company which exercises management functions for its subsidiaries Treukonzept Vermögensberatungs- und Vermittlungsgesellschaft mbH and Dr. Ludz Vermögensberatungs- und Vermittlungsgesellschaft mbH as well. These two companies assist asset and wealth advisors, banks, brokers and their customers in the area of return-oriented investments.

Lloyd Fonds AG also holds a 45.1% interest in KALP GmbH, Böel, which has developed an automatic lashing system for the removal of container twist locks during loading and unloading.

Value management and control system

Lloyd Fonds AG has an internal planning and control system to react swiftly and efficiently to any changes in the market and the business environment. Achievement of defined strategic and operational target is regularly monitored. One key aspect of the internal control system is its extensive reporting and information facilities. Multi-year roll-over corporate planning, which is adjusted to allow for any changes, forms the basis for integrated financial planning and keeps track of the balance sheet, income statement and liquidity. Lloyd Fonds AG's Management Board is kept informed in monthly reports of all key performance indicators. The responsible persons are immediately alerted in the event of any deviations between actual and forecast figures. One crucial performance indicator for Lloyd Fonds AG is EBIT (earnings before interest and taxes), with which it is possible to compare operating earnings in individual quarters or segments. In 2011, a loss of a 3.9 million was sustained at the EBIT level, down from the previous year's EBIT of a 4.4 million.

A further key performance indicator for Lloyd Fonds AG is placement volumes. In this connection, the volume and speed of equity placements provide an indication of the success of the individual funds and asset classes in the capital market. In the year under review, Lloyd Fonds recorded equity placements of a 38.5 million across all asset classes, (previous year a 83.0 million). Of this, existing funds contributed a 7.6 million (previous year a 24.4 million).

In addition, the cost of materials and personnel cost ratios as well as recurring income constitute further key performance indicators. Recurring income arises from the remuneration received for ongoing trusteeship business and management fees. In 2011, it came to a 10.4 million (previous year a 10.5 million). At the same time, personnel costs in the period under review stood at a 8.8 million (previous year a 8.6 million).

Lloyd Fonds AG has a software-based risk management system for detecting threats to its business performance at an early stage and allowing it to take appropriate precautions. The Company produces quarterly risk reports, which are prepared, evaluated and verified for plausibility by the responsible risk manager. The risk reports are submitted to the Management Board, which duly examines them. A review of the Company's risk early detection system also forms part of the terms of reference of the statutory auditor's engagement.

Economic conditions

International economy

The global economy is likely to expand at only a muted rate in 2012. The Organization for Economic Co-operation and Development (OECD) forecasts growth of 4.8% in global gross domestic product (GDP). In some industrialized nations, economic growth has waned substantially. At the same time, the rate of growth has slowed in the emerging markets, although it remains at a solid level. Slower growth in the global economy is also taking its toll on global trade. The main reasons for the damper on the global economy are to be found in mounting tension in the financial markets, the debt crisis in the euro zone and the related uncertainty in the corporate sector and on the part of consumers.

In the euro zone, the protracted sovereign debt crisis and resultant tension in the financial markets together with spending restraint is exerting pressure on the economy. The resultant uncertainty and downside risks are taking their toll on growth. The OECD expects almost flat economic growth of 0.5% in 2012.

Economic situat ion in Germany

In 2011, the German economy grew by a sharp 3.0% in priceadjusted terms, more than twice the annual average since reunification (1.3%). After strong momentum in the first three quarters of 2011, in which gross domestic product (GDP) expanded by a price-adjusted average of 0.7%, economic output contracted slightly by 0.2% in the final quarter. Uncertainty in the wake of the financial and sovereign debt crisis as well as the clouds looming on the horizon for the European and international economy are increasingly leaving traces on the German economy.

Although the German Bundesbank insists that domestic conditions for a broad-based upswing remain in place, declining demand in main export markets is causing problems for the German economy with its heavy exposure to foreign trade. Against this backdrop, domestic demand is increasingly growing in importance in contrast to the last two decades during which perhaps too much attention was paid to exports.

After growing last year, the German economy should also expand at an appreciably lower rate of 0.6% according to the German Bundesbank. If uncertainty on the part of consumers subsides to some extent in the course of the year, it could however return to a solid growth trajectory in 2012, buoyed by expansionary monetary policy and the gradual strengthening of impetus from the global economy. Under these circumstances, experts consider growth in gross domestic product of 1.8% to be possible in 2013.

The course which the European debt and confidence crisis takes will materially influence economic trends. There is some evidence suggesting that the dampening effects are slowly subsiding around the world, that the global economy will gain somewhat more traction in the course of the year and that the external conditions for the German economy will improve again.

Closed-end fund market

Stabilization in the market for closed-end funds

After sustaining drastic losses in the wake of the financial crisis, the market for closed-end funds is slowly beginning to stabilize, albeit at a low level for the time being. Although placement figures in 2011 still fell well short of their high pre-crisis levels, they were better than many a pessimist had feared. The equity which fund arrangers collected from private and institutional investors in the year under review grew by 0.2% over the previous year to a 5.9 billion. This equity was plowed into investments of a total volume of a 9.9 billion in tangible assets. Fund volumes thus declined by 8.4% over the previous year (a 10.8 billion). Like all those that follow, these figures are derived from a survey conducted by the Association of Initiators of Closed-End Investment Funds (VGF). Measured in terms of equity placements, real estate funds investing in Germany and other countries are the clear favorites with a market share of 51.8%, followed by energy funds with 10.9% of the market. Ship funds accounted for 8.7% of the market, private equity funds 8.0%, infrastructure funds 7.1% and aircraft funds 5.4%.

investment volumes and equity placements of closed-end funds in € billion

Source: VGF

Increased sales to institutional investors

15 Institutional investors in particular contributed to last year's stable performance, generating a 66.8% increase in equity placements over the previous year and thus widening their share in the overall market to 17.8%.

Real estate the most popular asset class

5 Real estate funds are still the most popular asset class. Despite the strong competition coming from direct investments, funds investing in German real estate were able to broaden their share of the market by 38.2% over the previous year, collecting equity placements of a 2.3 billion. Funds investing in real estate located outside Germany also recorded a 10.0% increase in equity placements over the previous year in 2011. In this way, this asset class has proved to be very resilient despite – or perhaps even because of – the financial crisis.

Further decline in equity placements for ship funds

By contrast, placement volumes for ship funds continued to decline by 49.2% to around a 505.7 million, including equity increases of a 104.2 million. Subscribers selected these as a means of injecting the necessary additional capital into the ship entities. It is safe to assume that placement volumes in this segment will not recover until the serious crisis afflicting the various shipping markets has been overcome. At the moment, there is not an isolated crisis of closed-end ship funds but a massive crisis affecting global shipping, which is inevitably also taking its toll on the German ship funds.

Energy funds fell short of expectations

Although equity placements dropped by 23.4% to a 637.1 million, energy funds ranked third behind German and non-German real estate funds for the first time in the market as a whole. Even so, this asset class fell short of expectations as it had been assumed that the adoption of a new energy policy in Germany would generate a greater stimulus. However, there was a shortage of suitable assets in Germany in many cases. Potential investments in Southern Europe were abandoned or postponed on account of the sovereign debt crisis.

Other asset classes

Growth was registered in private equity, infrastucture and leasing funds. Investment volumes were down on the previous year in all other segments.

Cautious optimism for 2012

Participants in the market for closed-end investment funds are cautiously optimistic about 2012 according to a survey conducted by rating agency Scope Analysis GmbH at the beginning of 2012 of a total of 73 initiators accounting for more than 70% of equity placements as well as 87 banks and asset managers at the beginning of 2012. They see the fundamentally strong interest in investments in tangible assets as justifying expectations of an improvement in market conditions. A further cause of optimism is the high volume of liquidity looking for suitable investment opportunities. What is more, with the expected market consolidation on the supply side and the decision by many fund initiators to concentrate on their core skills, many retailers are now confident of receiving very high-quality products. That said, even the optimists acknowledge that uncertainty is dissipating only slowly in the market.

At the same time, fund initiators are continuing to focus on German real estate. For this reason, Scope assumes that funds investing in German real estate will continue to dominate the German closed-end investment fund market as in the previous year. At the moment, almost only real estate markets in stable economies such as Germany and the Netherlands are attracting any investor interest. The muted outlook for the ship segment is chiefly due to the numerous negative reports on funds which have encountered problems. In an environment such as this, retailing closed-end ship funds is proving to be a very daunting task. Moreover, the signals from the shipping markets do not augur well for a swift recovery as most market segments are battling with massive surplus capacity, which is exerting pressure on charter rates. Against this backdrop, Scope does not expect to see any imminent improvement in the traditional ship segment although it does see potential for success in 2012 in market niches such as the cruise ship segment.

Scope also assumes that placement volumes for aircraft funds will grow this year. The main reason for this is that the aircraft funds currently in operation are heavily oriented to minimizing risk, i. e. they are typified by long-term contracts, attractive and investment-grade lessees and contractual structures which generally eliminate operating cost risks.

Scope expects the market shares accounted for by energy funds to remain flat or shrink slightly due to the fact that numerous energy funds are investing in Southern Europe, where the macroeconomic conditions are impeding the sale of these funds. Although investors are fundamentally interested in German solar projects, it is almost impossible to generate attractive returns on account of the low feed-in remuneration. This is prompting many fund initiators to increasingly turn to wind power.

Legal environment

Greater transparency

Since mid 2005, selling prospectuses have been prepared in accordance with fixed rules and examined by the German Federal Financial Supervisory Authority (BaFin) for compliance with the minimum statutory requirements. Moreover, the members of the Association of Initiators of Closed-End Investment Funds (VGF) have assumed a voluntary obligation to observe sector-wide standards in the interests of greater confidence and improved transparency. This includes a review of the prospectus by an independent auditor for each fund on offer and an annual statement of performance disclosing the performance of each fund established by the initiator.

Further regulatory rules will also be taking effect in 2012 and 2013 aimed at imposing more stringent requirements on the initiators and retailers of closed-end investment funds as a means of improving investor protection and heightening transparency. The Act to Amend the Law Governing the Arrangement of Financial Investments and the European Directive on Alternative Investment Fund Managers (AIFM Directive), which will be ratified in national law by 2013, will result in material changes for the initiators and retailers of closed-end investment funds. At the core of the Act to Amend the Law Governing the Arrangement of Financial Investments is the Act on Financial Investments, the main provisions of which are to take effect on June 1, 2012.

The instruments differ from each other in their scope of applicability: The AIFM Directive is directed at the managers of alternative investment funds (AIFMs), which also include closedend investment funds. One of the most important new elements stipulated by the AIFM Directive is the requirement that AIFMs be approved by BaFin. For this purpose, BaFin determines, for example, whether the fund issuer operates a risk management system for itself and the funds which it manages and whether the minimum requirements with respect to capital are observed. If these conditions are not met or are subsequently breached, BaFin will refuse to approve the fund or will revoke the approval already granted.

By contrast, the Act to Amend the Law Governing the Arrangement of Financial Investments is chiefly directed at the product itself and related retailing activities. It also provides for BaFin to conduct a more detailed examination of the selling prospectuses. A check will be performed to determine whether the selling prospectus is coherent and free of any contradictions. Enhanced transparency for subscribers is also the purpose of the investment information sheet, which sets out in summarized form the key information on the fund being offered. There will also be some changes in retailing activities: Each advisor will be recorded in a register; the advice given must be documented, the subscriber informed of the details of the fund, his or her personal situation identified and the amount of commission earned disclosed.

Lloyd Fonds is observing the European and national legislative process and preparing intensively to implement the changes. It does not rule out the possibility that as a result of the planned regulation parts of the Group structure and possibly also the business model may have to be adjusted. As a member of the Association of Closed-End Investment Funds (VGF), Lloyd Fonds supports the regulation of closed-end investment funds and has expressed its commitment to such modifications from the outset.

Business performance and economic conditions

Material events in 2011

2011 equity issue

With market conditions for closed-end investment funds remaining difficult, Lloyd Fonds was able to initiate steps in 2011 to strengthen the Company and to address the business challenges facing it. One crucial aspect of this was the equity issue at the end of 2011 together with the ensuing payment of the liability release compensation at the beginning of 2012, which marked the successful completion of the Company's restructuring efforts. On a further decisive note, it was able to launch very attractive new fund products with a substantially lower risk for the Company as well as for the subscribers. In this way, it was possible for Lloyd Fonds AG to lay the foundation for its future growth.

At the end of the period under review, Lloyd Fonds AG successfully completed its equity issue with indirect pre-emptive subscription rights for its shareholders. The equity issue had been underwritten by AMA Capital Partners LLC, a US investment company, on condition that it obtained a share of a minimum of 30.0% and a maximum of 49.9% in Lloyd Fonds via ACP Fund V LLC. A total of 14.7 million new shares were issued at a price of a 1.0 each, generating gross proceeds of a 14.7 million new shares were issued at a price of a 1.0 each, generating gross proceeds of a 14.7 million for Lloyd Fonds. Part of the proceeds from the issue were used in January 2012 to pay the liability release compensation which had been agreed upon with the creditor banks and had been reduced again to a 10.0 million. Consequently, Lloyd Fonds AG has now been discharged in full from all contingent liabilities which had come within the bank agreement signed in April 2010. In connection with the equity issue, the US investment company AMA Capital Partners LLC (AMA) sought and also gained a share of up to 49.9% in Lloyd Fonds AG via ACP Fund V LLC.

Extraordinary shareholder meeting in 2011

An extraordinary shareholder meeting was held on December 5, 2011 at which the shareholders were asked to pass resolutions approving the equity issue, amendments to the articles of incorporation to provide for an enlarged Supervisory Board from three to six members and the election of the Supervisory Board. Accordingly, the Supervisory Board was extended to a new total of six members with the addition of three representatives of the US investor.

The new shares will be admitted to regulated trading in the Frankfurt stock exchange after clearance has been received for the issuing prospectus from the German Federal Financial Supervisory Authority (BaFin). The issuing prospectus is being prepared on the basis of the consolidated and annual financial statements for 2011. The new shares are expected to be admitted to trading at the end of May 2012.

Annual general meeting for 2011

As the offices held by the Supervisory Board members Prof. Dr. Eckart Kottkamp and Dr. Thomas Duhnkrack expired at the end of the annual general meeting on August 30, 2011, new elections were necessary. Both gentlemen were re-elected to the Supervisory Board for a further term. Prof. Dr. Eckart Kottkamp remains Chairman of the Supervisory Board and Dr. Thomas Duhnkrack Deputy Chairman.

Cost-cutting program

The cost-cutting program was continued in the year under review with the aim of at least covering the Company's personnel and rental costs with the income from ongoing trusteeship business and management fees. Alongside natural fluctuation, around 20% of the Group's staff were laid off in order to reduce personnel costs. As well as this, Lloyd Fonds sublet around one third of its office space to additionally lower rental and related costs, thus easing the strain caused by the cost of materials.

Products

Lloyd Fonds initially entered the year under review with only two new fund products. Thus, subscription of the "Hotel Leipzig Nikolaikirche" real estate fund was completed in the first quarter, upon which it was successfully closed. The "Best of Shipping III" secondary-market fund, whose innovative structure was acknowledged with the receipt of the 2011 Feri Award, remained in the subscription phase.

In the further course of the year, the Company developed attractive new fund products, many of which received awards from independent parties. The first of these was the "Holland Utrecht" real estate fund, which continued Lloyd Fonds' successful series of funds investing in Dutch real estate. In mid 2011, Lloyd Fonds sought to replicate the success of earlier energy funds, launching "Lloyd Fonds Energie Europa", the first in a new generation of closed-end investment funds in the energy segment. For this purpose, a four-strong team of experts, who had previously worked on international finance for energy projects at Commerzbank, joined Lloyd Fonds at the beginning of 2011.

In the transport asset class, the Company developed an aircraft fund known as "Lloyd Fonds A380 Singapore Airlines", combining two high fliers of the aviation industry in a single top-class investment – the A380 and internationally renowned Singapore Airlines, which is the lessee of the A380, the world's most modern and largest passenger aircraft.

With conditions in the capital market characterized by uncertainty and restraint, demand for closed-end investment funds remained at the previous year's muted level, preventing Lloyd Fonds from achieving its full-year placement targets for 2011.

KALP – automatic lashing platform

KALP GmbH, in which Lloyd Fonds holds a 45.1 percent share continued to successfully develop the first automatic lashing platform for loading and unloading container ships. This innovative technology automates the final manual activity in global container transport. In this way, KALP GmbH is making a decisive contribution to improving the occupational safety at ports and heightening terminal operators' competitiveness.

At the end of 2011, negotiations were commenced with Finnish Cargotec Group with a view to signing a global license contract. It was on account of these negotiations that a private placement offering which had originally been launched to finance KALP was halted. In February 2012, the license contract was duly signed, meaning that there are now no obstacles to the final development and global marketing of the automatic lashing platform as a new global product.

Statement of performance

Lloyd Fonds released its statement of performance for 2010 on schedule, documenting the condition of the 102 closed-end investment funds which had been established as of December 31, 2010. Some of the 16 funds which have already been liquidated have generated substantial gains for the subscribers. With an average duration of just under four years, they have yielded an average post-tax return of 9.5% per year. In the case of the active funds, the flowbacks achieved to date stand at 4.2% per year of invested subscriber capital at the subscriber level. The real estate and energy segments have proven their merits as low-risk investments and, on average, exceeded the applicable forecasts.

Transparency acknowledged

At the middle of the year, Lloyd Fonds was named in an independent study conducted by Deutsches Institut für Service-Qualität (DISQ) as the fund arranger with the best service and the greatest transparency in relations with subscribers and retail partners. Out of a total of seven highly renowned fund initiators tested, Lloyd Fonds achieved top place in nearly all categories as well as the top overall rating.

In addition, Lloyd Fonds is pioneering transparent reporting on current funds. Thus, commencing with the "Holland Utrecht" real estate fund, it is the first fund arranger to have new issues monitored and analyzed throughout their entire life cycle. This is being done objectively and independently by rating agency Scope. In this way, retail partners and subscribers receive a comprehensive statement of performance at least once a year from an external auditor. Lloyd Fonds AG received the 2011 Transparency Award in recognition of this.

Business performance by asset class

Transport

Charter rates in the shipping markets had since temporarily returned to pre-crisis levels. However, the worsening euro zone sovereign debt crisis exerted pressure in the course of the year, as did the increasingly intense competition amongst leading liner shipping companies for market share in second half of the year 2011.

In line with this, the only temporary recovery in container shipping was reflected in a merely temporary increase in trading volumes in the secondary market. Unfortunately, the outlook deteriorated again at the end of the year, prompting the omission or postponement of payouts on the part of a number of shipping entities. An increased number of restructuring plans triggered uncertainty on the part of subscribers and thus resulted in a heightened volume of investments on offer, although demand remained weak on account of liquidity shortfalls in some cases. At the end of the year, the average price hit an all-time low of around 41% of the nominal value of the investments. At the same time, this trend had a favorable effect on the secondary market fund "Best of Shipping III" as the declining buy-side prices of ship fund investments offer favorable conditions for entry.

All told, the Lloyd Fonds Group's transport segment recorded equity placements of a 21.6 million in the year underreview (previous year a 49.1 million), equivalent to a decline of a 27.5 million or 56.0% over the previous year. Adjusted for the private placement of two ships worth a 22.0 million at the end of 2010, the decline over the previous year stands at a 5.5 million. Of this, shipping accounted for a 7.6 million (previous year: a 46.4 million). As Lloyd Fonds did not arrange any conventional ship funds in the year under review, the equity collected for ship funds exactly matches the restructuring capital raised for existing funds (previous year a 24.4 million). Aircraft contributed a 7.9 million (previous year a 1.9 million) and secondary-market activities a 6.1 million (previous year a 0.8 million) to placement volumes.

According to the industry association VGF, total industry-wide placements for shipping funds came to a 505.7 million, down 49.2% on the previous year (previous year a 996.3 million). Of this, capital increases accounted for a 104.2 million (previous year a 285.6 million), equivalent to a decline of 63.5%. Industry wide equity placements for aircraft funds came to a 316.3 million (previous year a 607.1 million), down 47.9% on the previous year.

The "Lloyd Fonds A380 Singapore Airlines" closed-end investment fund has been in the subscription phase since the beginning of August. This aircraft fund is Lloyd Fonds AG's fourth offering in this segment and combines two high fliers of the aviation industry in a single top-class investment. Singapore Airlines is the lessee of what is the world's most modern and largest passenger aircraft. The airline's majority shareholder is Temasek Holdings, a state-owned Singapore company, with the highest possible AAA and Aaa awarded by Standard & Poor's and Moody's, respectively.

The investment capital of "Lloyd Fonds A380 Singapore Airlines" stands at US-\$ 204.7 million (including the 5% front-end load), while the equity component equals US-\$ 87.7 million. The minimum subscription amount equals US-\$ 15,000; the fund has a planned duration of 15 years. Forecast payouts start at an initial 7.2% p. a., rising to 14% p. a. The total forecast flowback stands at around 210% before tax.

In designing the fund, Lloyd Fonds has been able to prefinance the purchase of the aircraft in full. It comprises a total of three tranches provided by foreign finance partners, with the two junior tranches being replaced step by step by the equity collected from the subscribers as scheduled. If the equity is unexpectedly not placed in full, the junior tranches will be retained on a long-term basis to finance the investment in accordance with the prospectus. Accordingly, there is no risk either for the subscribers or Lloyd Fonds of the investment being abandoned, something which sets it apart from competing products. At the beginning of the year 2012, the fund was awarded an "AA-" rating by Scope Analysis, a "very good" rating by TKL.Fonds and "premium product" status by FondsMedia.

Real estate

Equity of a 6.9 million (previous year: a 33.7 million) was collected in the real estate segment in the year under review. Equity placements in real estate investment funds across the industry as a whole came to around a 3.0 billion in the year under review according to VGF, up 29.1% on 2010 (previous year a 2.3 billion).

Whereas Lloyd Fonds had placed the two main tranches of two real estate funds with a volume of a 18.5 million and a 18.2 million, respectively, within a short space of time in the previous year, there was only one new fund in this asset class in 2011. First of all, the remaining capital (a 1.2 million) for "Motel One Leipzig" real estate fund , which has a total equity volume of a 8,0 million, was placed in full and is investing in a new hotel being built by the Motel One Group in the historic Leipzig CBD. It was awarded an "A-" rating by research company Scope.

Lloyd Fonds continued its successful series of funds investing in Dutch real estate in 2011. "Holland Utrecht" is investing in an office building in Randstad in the Netherlands, one of the economically most active regions in Europe. The new seven-floor building in Utrecht has been leased to Deloitte Holding B.V for a minimum ten-year period. This company is one of the world's accounting and consulting majors and will be using the new building as its new European headquarters. The lease includes a renewal option for a further five years at a time. The planned investment volume for Holland Utrecht stands at around a 30.3 million (including the 5% front-end load), with equity (including the 5% front-end load) standing at a 16.3 million. It has a planned duration of ten years Forecast annual dividends stand at a consistent 6%, with the total forecast flowback coming to a good 171% before tax.

Thanks to the double-taxation treaty, the tax burden on subscribers is very small. The minimum subscription amount is a 10,000. The fund has been rated "very good" by independent research company G.U.B., "good" by TKL.Fonds and "A-" by Scope.

The fund was rated "very good" by independent research company G.U.B., "good" by TKL.Fonds and "A-" by Scope at the beginning of 2012.

Energy

Equity of a 10.0 million was placed in the energy asset class established at the beginning of 2011. Total sector-wide equity placements in equity funds came to a 637.1 million (previous year a 832.2 million). "Lloyd Fonds Energie Europa" marked the beginning of a new generation of closed-end investment funds in the energy segment for Lloyd Fonds. This fund is investing in equal measure in wind and solar power plants in four Western European countries. The inclusion of investments in the two main renewable energies markets in tandem with broad geographic diversification results in maximum stability within the fund. In addition, historical data of more than one year in age is available for 80% of the assets (relative to the investment volume), ensuring that the entire forecast for the fund is based on resilient data.

As with the aircraft fund, Lloyd Fonds AG was able to avoid prefinancing this investment product. The planned investment volume for Lloyd Fonds Energie Europa and its project entities equals a 144.7 million, with the issue capital standing at a 70.0 million. The fund has a scheduled term of 17 years, with the forecast annual payouts initially coming to 7% of the equity invested and later rising to 10%. The total forecast flowback stands at around 202% before tax. The fund was awarded an "A-" rating by Scope Analysis, a "very good" rating by G.U.B. and an "A" rating by Feri EuroRating Services at the beginning of 2012. In addition, it received the 2011 Financial Advisors Award in the closed-end investment funds category in the renewable energies segment.

In line with the gradual collection of the limited-partnership capital, two of the project companies provided for in the selling prospectus were bought in 2011. As stated in the selling prospectus, all projects have now been completed and are feeding electricity into the applicable grid at the rates stated in the selling prospectus. The fund has been performing in line with forecasts in both operating terms and with respect to the investment budget, thus underscoring the solid calculations underlying the product.

Targ et achievement

The equity placements of a 38.5 million achieved in the year under review fell short of the previous year's figure of a 83.0 million as well as the target of a 150 million set for 2011. This difference is chiefly due to the fact that Lloyd Fonds entered the year with only two funds and was only able to launch its two large-volume funds "Lloyd Fonds Energie Europa" and "A380 Singapore Airlines" at the middle of the year. The development period for the two funds, for which Lloyd Fonds had deliberately not issued any bridge finance guarantee, was more protracted than expected. Establishing the new financial structure free of any risk for the Company involved substantially more work.

At the same time, the financial and euro crisis worsened dramatically in the second half of the year. The restraint towards closed-end investment funds which this triggered on the part of investors unleashed a temporary placement crisis, which also spread to other financial products. Despite its award-winning fund products, Lloyd Fonds was unable in 2011 to recapture the market share lost since 2009. This will now be the task for 2012.

General stat ement of business performance and economic conditions

Despite the unremittingly challenging conditions in the market and a consolidated net loss, Lloyd Fonds was able to improve its balance sheet structure in 2011. This was due, for one thing, to an increase in its share capital from a 12.7 million to a 27.5 million. For another, the reduction in the liability release compensation meant that it was possible to reverse the provisions which had been set aside for this purpose in earlier years, thus reducing the Company's liabilities substantially.

With the payment of the liability release compensation in January 2012, the liability release agreement entered into with the creditor banks in April 2010 was successfully discharged. In this way, the Company's continued long-term future viability is assured. Following the increase in cash and cash equivalents in the previous year, the net cash inflow from financial activities, which was chiefly underpinned by the proceeds from the equity issue, resulted in a further rise at the end of the year.

Operating business in the year under review was materially influenced by subscriber reticence towards closed-end investment funds, with this trend strengthening in the second half of the year in the wake of the financial and euro crisis. Against this backdrop, Lloyd Fonds launched one fund each in the real estate, energy and aircraft asset classes, receiving numerous independent awards for these. Compared to the previous year, which was heavily influenced by exceptionals, the consolidated net loss for 2011 reflects the still challenging conditions in the market for closed-end investment funds The equity placements of a 38.5 million achieved in the year under review fell short of the previous year's figure of a 83.0 million as well as the Company's own forecast.

Looking forward, the Lloyd Fond Group's business success will hinge on its ability to offer new and high-quality investment products in the real estate segment and to develop innovative models for refinancing and restructuring existing finds in the shipping segment. Given the structural changes emerging in the financial markets and the difficult sector conditions, the Management Board has adopted further measures in the first quarter of 2012 aimed at optimizing operational processes and cost structures in the Lloyd Fonds Group. On this basis, Lloyd Fonds expects to be able to reduce personnel costs by around 25% over the year under review in 2012. At the same time, it is working on stabilizing recurring income from management and trusteeship fees.

RESULTS OF OPERATIONS OF THE Lloyd Fonds GROUP

Whereas the previous year's consolidated earnings had been influenced by the favorable effects of deconsolidation of the Immobilienportfolio Köln investment fund at the end of June 2010, a net consolidated loss of Ta 2,900 was recorded in 2011 on account of the persistently difficult market conditions for closed-end investment funds.

The breakdown of and changes in individual items of the Lloyd Fonds Group's income statement are described in detail in the following analysis.

The Group's results of operations in the year under review as well as in the previous year were as follows:

	2011	2010
in Ta
Sales	14,290	19,307
Cost of sales	-4,497	-6,031
Personnel expenses	-8,765	-8,643
Depreciation/amortization and impairment losses	-1,318	-2,380
Net other operating expense/income	-3,961	130
Share of profit of associates	379	1,978
Loss/earnings before interest and taxes (EBIT)	-3,872	4,361
Net finance expense/income	349	-3,136
Loss/earnings before taxes (EBT)	-3,523	1,225
Income taxes	623	1,454
Consolidated net loss/profit for the year	-2,900	2,679

The following changes arose in connection with sales:

	2011	2010
in Ta
Placement of equity and placement guarantees	2,766	4,474
Project organization	705	386
Arrangement of financing	300	2,106
Management activities	2,990	3,133
Trusteeship	7,462	7,441
Rental income	–	1,733
Miscellaneous	67	34
Sales	14,290	19,307

Compared with the previous year, sales dropped by Ta 5,017 to Ta 14,290 in 2011. Among other things, sales for the year-ago period include rental income of Ta 1,733 earned from the Immobilienportfolio Köln investment fund, which had been temporarily consolidated. Moreover, income from equity placements and placement guarantees shrank by Ta 1,708 to Ta 2,766 due in particular to the low placement figures of a 38.5 million in 2011 (previous year a 83.0 million). Equity placements also include restructuring capital of a 7.6 million (previous year a 24.4 million) on which no commission was earned.

Project structuring sales rose by Ta 386 to Ta 705, underpinned in particular by the initiation of three new funds in 2011.

Income from the arrangement of financing was down substantially on the previous year, dropping from Ta 2,106 to Ta 300 due in part to the lower placement volumes in the period under review and also the fact that fees for the arrangement of finance were only charged for one of the new investment products. Moreover, placement income of Ta 627 had been generated in the previous year by combining the two ship funds Thira Sea and Tosa Sea.

Management fees earned in 2011 comprise fees received for services to the open-end ship fund LF Open Waters OP totaling Ta 1,151 (previous year Ta 1,205) as well as fees of Ta 1,839 (previous year Ta 1,928) for the management of the current funds.

At Ta 7,462, income from trusteeship business was slightly up on the previous year's figure of Ta 7,441 due to an increase in recurring income from current trusteeship fees from Ta 7,213 in 2010 to Ta 7,362. Arrangement fees, which are recognized on a percentage-of-completion basis in accordance with the progress in placing the fund, declined to Ta 100 (previous year Ta 228).

The cost of sales dropped by a total of Ta 1,534 over the previous year to Ta 4,497, particularly reflecting the reduction of Ta 1,267 in expense on sales commission as a result of the aforementioned trends in equity placements.

Personnel costs in 2011 came to Ta 8,765, up from Ta 8,643 in the previous year, with a further reduction in headcount initially causing an increase in settlement payments in an amount of Ta 409. The average headcount dropped from 110 in 2010 to 102 in 2011.

Depreciation, amortization and impairment losses declined by Ta 1,062 over the previous year to Ta 1,318 chiefly due to the absence of the scheduled depreciation recorded in the previous year on the three office buildings in Immobilienportfolio Köln of a total of Ta 1,218, which had been recognized up until the deconsolidation of the fund at the end of June 2010.

In the period under review, net other operating expenses came to Ta 3,961, reversing the net other operating income of Ta 130 recorded in 2010. In the previous year, the net other operating income had chiefly arisen from the book profit of Ta 7,895 earned on the deconsolidation of Immobilienportfolio Köln at the end of June 2010. In addition, legal and consulting costs dropped sharply to Ta 1,836 (previous year Ta 3,222) particularly as a result of the expense which had been occurred in the previous year in connection with the liability release as well as cost-cutting efforts. Income of Ta 3,650 arose in the year under review from the reversal of provisions following the reduction in the liability release compensation from Ta 13,650 to Ta 10,000.

The share of profit of associates of Ta 379 (previous year Ta 1,978) includes investment income earned (Ta 810) and prorated income from adjustments to the fair value of the carrying amounts of investments in associates (Ta 678). The share of profits from TVO Income Portfolio L.P. (Ta 420) is due to the currency effects from translating the carrying amount of this investment (Ta 240) as well as fair value remeasurement gains (Ta 300). The opposite effect arose from the share of losses of the two associates Feedback AG (loss of Ta 805) and KALP GmbH (loss of Ta 645). In the previous year, this item had included profits of Ta 2,236 from the sale of a 114,000 dwt crude oil tanker.

As a result, the Lloyd Fonds Group sustained a loss before interest and taxes (EBIT) of Ta 3,872 in 2011 (previous year EBIT of Ta 4,361).

The net finance income of Ta 349 (previous year net finance expense of Ta 3,136) was materially caused by currency translation gains of Ta 381 (previous year currency translation losses of Ta 103) and investment income of Ta 224 (previous year nil). In the previous year, the net finance expense had occurred chiefly as a result of fair-value remeasurement losses of Ta 2,179 on the interest-rate swaps for Immobilienportfolio Köln.

The net tax income of Ta 623 arising in the year under review results from income from the derecognition of tax liabilities of Ta 837 among other things, with the opposite affect arising from tax assessments for earlier years. Only minor further tax expense arose in the period under review due to the income tax fiscal union established between Lloyd Fonds AG (dominant company) and Lloyd Treuhand GmbH (subordinate company).

All told, a consolidated net loss of Ta 2,900 was sustained in 2011.

SEGMENT INFORMATION

This section provides further information on the consolidated earnings for the transport, real estate, energy and other assets segments. With respect to the trusteeship and fund management segments, reference should be made to the general comments on the Group's results of operations and the additional information provided in the segment report in the notes to the consolidated financial statements. In addition to disclosing EBIT for each segment, this section breaks down in detail the sales for each reportable segment.

Transport segment

The transport segment comprises the sourcing and structuring of assets in the form of ships, aircraft and secondary-market ship funds, financing of these assets by arranging debt capital and the sale of investment products in this segment.

Breakdown of segment EBIT:

	2011	2010
in Ta
External sales	1,651	1,901
Other operating income	778	3,366
Cost of sales I	-1,183	-1,032
Cost of sales II	-122	-112
Personnel expenses	-1,607	-1,663
Other operating expenses	-1,029	-4,432
Share of profit of associates	461	2,399
Depreciation/amortization and impairment losses	-538	101
EBIT	-1,589	528

With a loss at the EBIT level of Ta 1,589, the transport segment was well down on the previous year's EBIT of Ta 528. This was primarily as a result of the decline in other operating income, which dropped from Ta 3,366 to Ta 778. In the previous year, this had resulted from the reversal of provisions and individual impairments on receivables among other things. In addition, this item had also included profits of Ta 2,236 from the sale of a 114,000 dwt crude oil tanker by an associate in the previous year.

Breakdown of sales in the transport segment:

		Secondary market
2011	Aircraft	funds	Total
in Ta
Placement of equity and placement guarantees	779	621	1,400
Projectorganization	200	51	251
External sales	979	672	1,651
Equity placements	7,866	6,120	13,986
Share in total equity placements*	25.5%	19.8%	45.3%

* Excluding restructuring capital.

2010	Shipping	Aircraft	Secondary market funds	Total
in Ta
Placement of equity and placement guarantees	1,051	149	64	1,264
Project organization	–	–	5	5
Arrangement of financing	627	–	1	628
Miscellaneous	–	4	–	4
External sales	1,678	153	70	1,901
Equity placements	22,000	1,853	814	24,667
Share in total equity placements**	37.5%	3.2%	1.4%	42.1%

** Incl. funds in the Premium Portfolio series excluding restructuring capital.

Total external sales in the transport segment came to Ta 1,651 in the year under review, down Ta 250 on the previous year. In the previous year, Lloyd Fonds had collected equity of a 22.0 million for two container ships from its former product pipeline in a private placement and generated income of Ta 842 as a result.

Real Estate segment

The real estate segment comprises all activities in connection with buying, structuring and financing real estate assets as well as the sale of real estate investment funds.

Breakdown of segment EBIT:

	2011	2010
in Ta
External sales	1,033	6,787
Other operating income	73	360
Cost of sales I	-765	-3,357
Cost of sales II	-106	-310
Personnel expenses	-818	-1,428
Other operating expenses	-802	-765
Share of profit of associates	56	–
Depreciation/amortization and impairment losses	–	-1,218
EBIT	-1,329	69

EBIT in the real estate segment also deteriorated substantially over the previous year. After the small EBIT of Ta 69 recorded in 2010, a loss of Ta 1,329 was sustained at this level in the year under review primarily as a result of the decline in sales from Ta 6,787 to Ta 1,033. In the previous year, depreciation, amortization and impairment losses had arisen in connection with scheduled depreciation of Ta 1,218 of the three office buildings held in Immobilienportfolio Köln, which was recognized through profit and loss up until the deconsolidation of the investment fund in June 2010.

Breakdown of sales in the real estate segment:

	2011	2010
in Ta
Placement of equity and placement guarantees	643	3,195
Project organization	90	380
Arrangement of financing	300	1,479
Rental income	–	1,733
External sales	1,033	6,787
Equity placements	6,884	33,728
Share in total equity placements *	22.3%	57.5%

* Excluding restructuring capital.

Income from the placement of equity and placement guarantees contracted from Ta 3,195 in the previous year to Ta 643 in 2011, thus reflecting the changes in the volume of equity placements in this segment. This effect is also the cause of the decline in income from the arrangement of finance. The rental income arising in the previous year was due to the temporary consolidation of Immobilienportfolio Köln.

Energy segment

The segment report was extended in the year under review to include the energy segment, which comprises all activities in connection with buying, structuring and financing energy assets as well as the sale of energy funds.

Breakdown of segment EBIT:

	2011
in Ta
External sales	1,029
Other operating income	129
Cost of sales I	-872
Cost of sales II	-181
Personnel expenses	-940
Other operating expenses	-117
Share of profit of associates	26
EBIT	-926

Breakdown of sales in the energy segment:

	2011
in Ta
Placement of equity and placement guarantees	724
Project organization	305
External sales	1,029
Equity placements	10,015
Share in total equity placements*	32.4%

* Excluding restructuring capital.

In the year under review, sales in this segment were generated with the new "Lloyd Fonds Energie Europa" fund.

Other assets segment

The other assets segment comprises services in connection with the structuring and sales of investment funds not coming within the core transport, real estate and energy segments.

Breakdown of segment EBIT:

	2010
107	10
2	774
-31	-
-8	-9
–	-6
-937	-246
311	264
-68	–
	787
	2011 -624

This segment's loss of Ta 624 at the EBIT level (previous year profit of Ta 787 at the EBIT level) is chiefly due to impairments taken on receivables from the arrangement of equity placements for the Premium Portfolio I fund (Ta 724). The other operating income recorded in the previous year was chiefly due to the derecognition of liabilities for pending sales services for this fund (Ta 714).

Lloyd Fonds Group's net assets and financial condition

NET ASSETS

The Group's net assets as of the end of 2011 and 2010, respectively, are analyzed in the following table:

Assets	2011	2010
in Ta
Property, plant and equipment and intangible assets	1,209	1,757
Financial assets	22,464	28,067
Receivables and other assets	10,428	10,141
Cash and cash equivalents	16,947	11,539
Total	51,048
Equity and liabilities	2011	2010
in Ta
Consolidated equity	18,390	7,974
Deferred income tax liabilities	664	607
Financial liabilities	13,640	13,939
Other liabilities	18,354	28,984
Total	51,048	51,504

As of December 31, 2011, total assets stood at Ta 51,048 and were thus down Ta 456 on the end of 2010. On the asset side, financial assets in particular contracted by a total of Ta 5,603 to Ta 22,464. The carrying amounts of investments in associates declined by Ta 4,927 to Ta 11,093. This is chiefly due to distributions of the profits earned by associates and is matched by a corresponding drop in the liabilities to related parties recorded in the consolidated financial statements. The carrying amounts of the Group's available-for-sale financial assets dropped by a total of Ta 676 particularly due to impairments.

The opposite movement arose in cash and cash equivalents. In particular, the cash equity issue is one of the reasons for the increase of Ta 5,408 to Ta 16,947. Reference should be made to the notes on the Group's financial condition for a detailed analysis of cash and cash equivalents.

Receivables and other assets climbed slightly from Ta 10,141 in the previous year to Ta 10,428 in the year under review. The increase in receivables particularly relates to current loan receivables of Ta 1,444 due from KALP GmbH and payments of contribution by the existing shareholders of Ta 778 in connection with the equity issue. Impairments and adjustments to receivables of Ta 1,683 exerted the opposite effect.

On the other side of the balance sheet, equity climbed by Ta 10,416 to Ta 18,390 as of the balance sheet date due to the issue of new shares worth a total of Ta 14,745. Deducted from this were transaction costs in connection with the equity issue of Ta 1,236, the consolidated net loss of Ta 2,900 and the negative change in other comprehensive income of Ta 193.

Fair-value remeasurement gains on the Group's shares in associates resulted in deferred income tax liabilities of Ta 57, which were recorded within equity and are the reason for the increase in deferred income tax liabilities from Ta 607 to Ta 664 as of December 31, 2011.

Financial liabilities dropped only slightly from Ta 13,939 to Ta 13,640 as of the balance sheet date. This change is chiefly due to repayments made towards loans to finance the shares acquired in the target funds held by Premiumportfolio Austria. The translation at the end-of-year exchange rate of the US-\$ loan to finance the investment in TVO Income Portfolio L.P., United States, had the opposite effect.

The reduction in other liabilities by Ta 10,630 to Ta 18,354 is chiefly due to the reduction described in connection with financial assets as a result of dividend distributions. In addition, the reduction in the liability release compensation meant that it was possible to reverse the provisions of Ta 3,650 set aside in previous years for this purpose through profit and loss.

PRINCIPLES AND OBJECTIVES OF FINANCIAL MANAGEMENT

The Lloyd Fonds Group's financial management activities are handled by the finance/treasury department with the primary purpose of safeguarding solvency and strengthening the Group's financial resources. Treasury activities ensure the availability of liquidity at all times within the Group, manage risks arising from financial instruments and optimize Group-wide cash management. To this end, rolling liquidity planning broken down by currency and with a horizon of twelve months is used. The medium-term financial forecast is prepared using an integrated planning tool based on the current business forecast for 2012 through 2016.

FINANCIAL CONDITION

The Group's financial condition in the year under review as well as in the previous year was as follows:

	2011	2010
in Ta
Consolidated net loss/profit for the year before share of profit of
investments, interest and income tax	-3,870	2,280
Non-cash income and expenses	-1,474	-7,294
Changes in working capital	-2,316	9,098
Dividends and profit distributions received	1,034	2,935
Net interest and income taxes
received and paid	389	-219
Cash flow from operating activities	-6,237	6,800
Cash flow from investing activities	-270	398
Cash flow from financing activities	11,935	-2,260
Non-cash changes in cash and cash equivalents	279	408
Net cash inflow	5,707	5,346
Cash and cash equivalents at the beginning of the period	10,288	6,474
Changes in the companies consolidated	–	-1,477
Currency translation differences	-22	-55
Cash and cash equivalents at the end of the period	15,973	10,288

The net cash outflow of Ta 6,237 from operating activities was due in part to the consolidated net loss before the share of profits of associates, interest and taxes. In addition, the decline in working capital exerted a negative effect of Ta 2,316 on cash flow from operating activities, which is calculated using the indirect method. The reduced working capital was chiefly due to the increase in receivables and other assets. The non-cash income particularly comprises income from the proportionate reversal of the provisions for the liability release compensation (Ta 3,650). However, this income was partially offset by depreciation, amortization and impairment losses on non-current assets (Ta 1,318) and adjustments to receivables and irretrievable receivables (Ta 1,683).

The net cash outflow from investing activities of Ta 270 was caused by the establishment of new companies in connection with the Group's new investment funds or those s till in the development phase and the acquisition of shares in Feedback AG, among other things.

The net cash inflow from financing activities (Ta 11,935) is chiefly due to the proceeds received from the equity issue. Deducted from this were the costs of the equity issue and loan repayments.

The non-cash changes to cash and cash equivalents of Ta 279 relate to the release of bank balances pledged as collateral.

Allowing for the aforementioned changes and the currency translation differences (Ta -22), free cash and cash equivalents rose by Ta 5,685 from Ta 10,288 to Ta 15,973 in the year under review.

Reference should be made to the risk report (page 71 et seq) and the additional disclosures in the notes to the consolidated financial statements (Notes 4.5 and 9.2) for an analysis of the Group's main provisions and contingent liabilities.

Employees and compensat ion report

One crucial determinant of Lloyd Fonds' success lies in the skills of its employees. Experienced specialists work at Lloyd Fonds, where they are responsible for asset and fund management, asset sourcing, structuring new investment funds, sales and marketing, long-term subscriber relationship management and investor relations.

Aware as it is of their importance for its success, Lloyd Fonds seeks to retain its employees on a long-term basis and therefore offers them working conditions in which they are able to develop and perfect their own skills as effectively as possible. The Lloyd Fonds Group's corporate culture is characterized by flat hierarchies and short decision-making routes. Staff are able to contribute in many different ways.

average number of employees

Trends in employee numbers

As of December 31, 2011, the Lloyd Fonds Group had 78 employees (not including the members of the Management Board, employees on extended child-care leave, trainees and temporary staff). Of these, 54 were assigned to core functions at the parent company, 22 to Lloyd Treuhand GmbH and 2 to TradeOn GmbH. Lloyd Fonds has a relatively young employee base with an average age of 36 years and an almost equal balance of male and female employees.

number of employees at the end of the year

40 60 100 120 In the course of the year under review, the number of employees dropped substantially: All told, 31% fewer people were working for the Company on December 31, 2011 compared with the end of 2010. This decline is due to staff layoffs in response to the protracted poor placement figures in the investment product market as a whole and the consolidated net loss of a 4.5 million posted at the end of the first half of the year. The layoffs concerned all departments and hierarchical levels within the Company. However, Lloyd Fonds provided the staff concerned with termination compensation. This resulted in additional expense in 2011 of a 0.4 million, resulting in personnel costs of a 8.8 million (previous year 8.6 million).

Compensat ion and incentive systems

The Lloyd Fonds Group continues to attach particular importance to employer/employee relations based on a spirit of partnership and respect of employees' individual interests. This includes flexible working hours and attractive compensation. Nearly all employees of the Lloyd Fonds Group have variable and fixed compensation components in their salary packages, with the variable component oriented to both the employee's personal achievement and the Company's business performance.

Basic elements of the compensat ion system for the Management Board

In addition to fixed compensation components, the members of the Management Board receive variable remuneration in the form of bonuses which are capped at a certain maximum amount. They are calculated on the basis of Lloyd Fonds AG's consolidated net profit (IFRS). Variable remuneration is subject to a bonus and penalty system in accordance with the applicable statutory provisions and includes a short-term and, since 2011, a long-term component.

Training and skills development

Lloyd Fonds can only enhance and extend its capabilities if it has highly qualified and motivated staff. For this reason, the Company offers its employees numerous opportunities for further development at both the personal and professional level. These include courses aimed at imparting further knowledge on the individual asset classes and products as well as IT seminars.

An investment in education is an investment in the future and enjoys top priority at Lloyd Fonds. It is with this in mind that we provide committed and young people with an opportunity for a career entry. In collaboration with the Hamburg School of Business Administration (HSBA), we offer students an opportunity of gaining valuable vocational experience during their BA studies. Students are also able to apply for internships at Lloyd Fonds or to conduct research into various aspects of the Group's activities as a basis for their theses.

Products and services

Lloyd Fonds is a provider of high-quality investment products in the form of closed-end investment funds and is active across the entire value chain. Virtually all funds which Lloyd Fonds has initiated are managed by its own trusteeship entity and the corresponding fund management departments. Particular attention is paid to fund management, which is partially also handled in conjunction with experienced external partners. When it comes to sourcing assets for new products, Lloyd Fonds also makes use of its historically strong and very broad network. These activities are supplemented by fund-structuring and B2B sales.

Operating business chiefly entails ongoing management of the funds in several product classes and market segments. In its investment products, Lloyd Fonds is increasingly focusing on its two areas of competence – transport/shipping and real estate. In the year under review, it established a further asset class, namely energy. All other funds arranged in earlier years continue to be managed expertly within the Company. However, no new funds will be arranged in these asset classes, e. g. private equity and traded UK endowment policies.

A fund initiator's success hinges on identifying attractive markets and products, using this as a basis for developing a closed-end investment fund meeting customers' requirements and selling them to subscribers via retail partners. This calls for extensive knowledge of the markets and a network of established partners in all asset classes .

Asset sourcing

Depending on the individual product class, a project entity initiated by Lloyd Fonds generally acquires the assets for investment. In this connection, the timing for taking possession of the asset is flexible. This can be done either before placement, during the subscription phase or after the equity has been collected from the subscribers. In developing new projects, Lloyd Fonds benefits from diverse international contacts and a broad partner network.

Fund development

New investment products are developed in line with Lloyd Fonds AG's principle of offering subscribers solid and readily understandable investment products generating cash flows which can be reliably estimated in tandem with a good risk/reward profile. In this connection, the focus is particularly on an attractive long-term outlook for the fund.

In the shipping segment in particular, the Company has amassed a large amount of market expertise on account of its history and experience. In the year under review, activities in the shipping segment focused on managing the active funds in the light of the difficult market conditions and particularly on restructuring distressed investment funds.

With respect to real estate, reliable locations in Western Europe are preferred. The funds initiated to date have primarily entailed investments in Germany and the Netherlands. This strategy addresses subscribers' interest in obtaining highly secure investments. Looking forward, locations in Germany will probably play an even greater role.

Since its recruitment at the beginning of the year, the energy team has contributed a broad network of reliable partners thanks to its own investment experience. In this connection, particular attention is paid to the selection of legal, technical, tax and finance-modeling partners.

In the year under review, fund development again faced the challenges arising in connection with raising the necessary finance, a problem which affected the entire sector. The financial market crisis has caused many banks to adopt a very restrictive approach to providing bridge finance for investments in alternative real assets. Lloyd Fonds is determined to avoid any new risk in connection with placement or bridge-finance guarantees in the future. For years now, Lloyd Fonds has been pursuing a strategy of developing closed-end investment funds by harnessing its comprehensive experience, risk awareness and knowledge to satisfy subscribers' requirements. In doing so, it has been able to identify and shape trends at an early stage. This particularly applied in the year under review to "Lloyd Fonds Energie Europa", which offers subscribers the opportunity of investing in wind and solar farms at attractive locations in France, the United Kingdom, Spain and Germany via a single fund. The individual assets were assembled by means of call options, allowing Lloyd Fonds to structure the portfolio of wind and solar farms step by step upon raising the necessary volume of equity.

"Lloyd Fonds A380 Singapore Airlines" is also characterized by an innovative financing structure in which the necessary finance has been obtained without any need for Lloyd Fonds to issue any guarantees of its own. In terms of risk exposure, this is important not only for Lloyd Fonds but also for the subscribers, who in the aftermath of the financial crisis are now investing in stable alternative real assets, the finance for which is fully in place.

Fund management

Traditionally, fund and asset management forms a central element of Lloyd Fonds' business model and, given the planned national and European regulation, is set to gain even more importance. Lloyd Fonds handles all aspects of asset and fund management in the real estate segment. In the shipping segment, asset management as such is traditionally the responsibility of the contractual ship management company. However, representatives from Lloyd Fonds are also integrated in the management of most of the fund entities. At the same time, the Company's own fund management department is involved in day-to-day work with all ship funds. Lloyd Fonds also uses the services of external asset management partners for aircraft investments, although its own fund management department is actively involved in their business activities.

Fund management is responsible for monitoring all economic aspects of the fund entities' work and the relations with the managing directors appointed by Lloyd Fonds for these fund entities. Among other things, this includes interest and currency management, negotiations with the creditor banks and negotiations for follow-up charters/leases. As well as this, fund management in collaboration with the responsible partners recommends the sale of the tangible assets and oversees this process up until final dissolution of the entity. Further tasks entail ongoing contact with the advisory councils and, in some cases, the subscribers themselves.

In the year under review, the shipping segment in particular imposed particular challenges for fund management, forcing it to additionally concentrate on restructuring distressed investment funds alongside managing active funds. In this connection, Lloyd Fonds paid particular attention to shipping investments in which the charter expired or it was only possible to generate minor follow-up utilization.

Once the existing reserves had been consumed, liquidity shortfalls arose in such cases, resulting in the commencement of early discussions with the parties involved and particularly the creditor banks concerning possible solutions and restructuring.

The restructuring plans provided for the injection of fresh equity and debt capital by the subscribers and third-party lenders. In addition, the banks made a contribution to the success of the restructuring plans by agreeing to respites on loan repayments. The restructuring plans were accepted by the subscribers with a large majority.

As of the end of 2011 and also in 2012, the main shipping markets – and hence also the ship financers – again face major challenges. There has been a substantial decline in demand for shipping capacity. At the same time, new tonnage is soon to be delivered in all size classes and segments. The main task for fund management and the trusteeships this year will be to manage this situation as effectively as possible in the interests of the subscribers.

Subscribers and trusteeships

Lloyd Treuhand GmbH acts as the communications link between the subscribers and all parties involved in the fund, representing the subscribers' interests throughout the entire duration of the fund. It keeps the investors informed regularly, with minimum delay and comprehensively of the performance of their funds and updates them on all the latest developments. Fund management scrutinizes the figures. If any deviations or changes are discovered, they are analyzed and discussed with the fund advisory council as well as the other parties involved such as the shipping companies and banks and the results submitted to the trusteeship. Further questions relating to such matters as the management of the trustee accounts, payments, commercial register matters, sales as well all tax-related matters in connection with the funds are answered competently, swiftly and in person by Lloyd Treuhand. It prepares attractive and readily understandable documentation for investors concerning their investment funds, including the management report, the advisory council report and the annual financial statements. Another important information channel is the annual statement of performance prepared in accordance with the standards of the Association of Initiators of Closed-End Investment Funds (VGF).

cumulative number of subscribers in thousands

Lloyd Treuhand GmbH's quality management has been certified by Germanische Lloyd SE in accordance with ISO 9000:2008. The certification covers all of the Company's processes. To maintain this certification, Lloyd Treuhand undertakes to achieve a consistently high level of quality in its trusteeship activities for the subscribers.

As of the end of 2011, a total of 52,864 subscribers held 67,378 shares in funds initiated by Lloyd Fonds. Accordingly, the number of subscribers rose by 795 over the previous year (December 31, 2010: 52,069 subscribers). Roughly 62% of our subscribers are male, 37% female and 1% legal entities.

In 2011, Lloyd Treuhand GmbH held shares of a 1,648 million (previous year: a 1,600 million) in trust.

cumulative assets held in trust

In the year under review, trusteeship activities were again dominated by the problems in the shipping sector in the wake of the economic crisis. It made a key contribution to the plans implemented for restructuring the distressed ship funds.

Sales and marketing

Lloyd Fonds chiefly employs two distribution channels. One of these channels comprises large banks, savings banks and cooperative banks, while the second one is made up of efficient independent partners, pools and exclusive partners. In addition, Lloyd Fonds also works with institutional investors such as insurance companies, foundations, pension funds and family offices. In Austria, the Company mostly works with banks and institutional distributors, overseeing both market segments from Hamburg.

breakdown of placement volumes by sales channel

*2% of the equity was placed with foundations.

Retail activities are supported by close collaboration with research companies such as the Scope Group, the leading German rating agency for closed-end investment funds, and Feri. Given the sustained uncertainty on the part of subscribers, independent ratings are of crucial importance for retailing activities. Recent court judgments have called for a high degree of information and product expertise and appraisal. The analyses performed of individual finds satisfy these requirements.

Given the advancing consolidation amongst arrangers of closedend investment funds and the greater regulation of the market for closed-end investment funds both at the European level and in national legislation, it can be assumed that larger initiators which are well positioned in their areas of excellence will be able to maintain and reclaim market share. Accordingly, Lloyd Fonds expects its own market position to improve substantially in the near future.

The "Lloyd Fonds Sales Academy" makes a key contribution to target-group-oriented sales communications, offering retail partners and interested financial services providers seminars and workshops. In addition to straight product training, it particularly organizes seminars focusing on soft skills, i. e. sales abilities.

At special events, partners and subscribers have an opportunity of receiving product knowledge, new market studies and information on the Company. At the beginning of 2011, a new series of seminars entitled "The way to the customer" was organized exclusively for the closest retail partners. Highly renowned lecturers reported on their own experience in the respective areas of competence at the first session.

In addition, partners receive a wide variety of information and advertising material. For example, the regular newsletter "Lloyd Fonds Schlagzeilen" keeps retail partners informed of the funds currently available for subscription, market developments and the latest news from Lloyd Fonds.

Lloyd Fonds' online service portal specifically addresses retail partners' individual needs, offering them such services as moderated product training, individual marketing on demand and details of customer turnover at a glance, for example.

Since the beginning of 2011, retail partners have regularly been invited to participate in telephone conferences, during which they receive news on the funds available for subscription, the latest market information and details of how fund management works in the individual funds.

All told, these communication measures serve the purpose of intensifying the dialog with sales partners and subscribers, supporting the Company's image and strengthening confidence in Lloyd Fonds AG and its products.

DISCLOSURES IN ACCO RDANCE WITH SECTION 315 (4) OF THE GERMAN COMMERCIAL CODE

The following disclosures are made in accordance with Section 315 (4) Nos. 1 through 9 of the German Commercial Code:

• 1. Following the equity issue executed in December 2011, Lloyd Fonds AG's share capital increased by a 14,744,560 from a 12,725,367 to a 27,469,927. Accordingly, Lloyd Fonds AG's share capital stands at a 27,469,927 ad of Decembe r 31, 2011 and is divided into 27,469,927 no-par-value bearer shares.
• 1. No restrictions on the exercise of voting rights or the transfer of shares are known to exist.
• 1. The following entities and persons hold voting rights in excess of 10% of the total number of voting rights:
• ACP Fund V LLC, Delaware: 49.90%
• AMA Capital Partners LLC, New York: 49.90% Of these, 49.90% of the voting rights are attributable to this party via ACP Fund V LLC, Delaware, pursuant to Section 22 (1), Sentence 1, No. 1 of the German Securities Trading Act.
• B&P-T Treuhandgesellschaft mbH, Hamburg: 10.19%
• Revisions- und Treuhandgesellschaft Brinkmann & Partner Steuerberatungsgesellschaft mbH, Hamburg: 10.19% Of these, 10.19% of the voting rights are attributable to this party via B&P-T Treuehandgesellschaft mbH, Hamburg, pursuant to Section 22 (1), Sentence 1, No. 1 of the German Securities Trading Act.
• Mr. Bertold Brinkmann, Hamburg: 10.19% Of these, 10.19% of the voting rights are attributable via Revisions- und Treuhandgesellschaft Brinkmann & Partner Steuerberatungsgesellschaft mbH, Hamburg, and B&P-T Treuhandgesellschaft mbH, Hamburg to this party pursuant to Section 22 (1), Sentence 1, No. 1 of the German Securities Trading Act.
• 1. There are no shares with special rights granting powers of control.
• 1. The Company is aware of no arrangements for influencing the exercise of voting rights via shares held by employees. Lloyd Fonds AG is not empowered to exercise any voting rights or rights of representation for its associates.
• 1. The Supervisory Board decides on the appointment and dismissal of members of the Management Board with a simple majority. The Company's articles of incorporation may only be modified with a majority of three quarters of the share capital represented in voting on the resolution in question.
• 1. The Management Board is authorized with the Supervisory Board's approval to increase the Company's share capital on or before June 9, 2013 by a total of up to a 6,362,000 by issuing new no-par-value bearer shares on a cash or non-cash basis once or repeatedly. Subject to the Supervisory Board's approval, these shares may be redeemed, sold or used as valuable consideration in business combinations or acquisitions.
• 1. Lloyd Fonds AG has not entered into any agreements which are subject to the condition precedent of a change of control as a result of a takeover bid.
• 1. Lloyd Fonds AG has not entered into any agreements with the members of the Management Board or employees providing for compensation in the event of any takeover bid.

Risk report

The Lloyd Fonds Group's business performance may be adversely affected by a number of different variables, which may cause a deterioration in its net assets, results of operations and liquidity. Thus, the global financial and economic crisis, which did not leave the market for closed-end investment funds unscathed either following the collapse of investment bank Lehman Brothers in September 2008 and the ensuing European and US debt crisis, has led to an appreciable decline in earnings in tandem with substantially heightened exposure to business risks for Lloyd Fonds over the past few years. The Group responded to the crises at an early point in time and on a comprehensive basis, developing a restructuring plan in 2009 which entailed numerous measures aimed at improving its cost structures and heightening its competitiveness on a sustained basis. One major element of this plan involved lowering the Group's risk exposure by reducing its ship pipeline as well as the placement and other guarantees which it had given. This restructuring plan was examined in detail and approved by accounting company KPMG Deutsche Treuhand-Gesellschaft AG (KPMG) in spring 2010. The ability to restructure the Group was the prerequisite for the bank agreement concerning the release of Lloyd Fonds AG's liabilities, which came into effect on April 21, 2010.

On January 10, 2012, Lloyd Fonds AG paid the liability release compensation, for which a deduction from a 13.65 million to a 10.0 million had previously been negotiated, to the banks. The liability release compensation was funded using the proceeds which Lloyd Fonds AG obtained from the issue of new shares worth a 14.7 million in December 2011. With the payment of the liability release compensation, Lloyd Fonds AG has now discharged all bonds and guarantees granted to the creditor banks in connection with bridge finance for fund products in prior years. With the disappearance of these obligations, there are now no risks to the Company's going-concern status. In 2011, Lloyd Fonds was able to largely avoid granting any new placement guarantees in connection with the funds which it initiated. The net liability held by the Lloyd Fonds Group under the contingent liabilities as of December 31, 2011 stands at a 86.1 million (previous year a 97.1 million).

Even so, market conditions for closed-end investment funds remain characterized by uncertainty, meaning that it is not possible to rule out the emergence of business-related risks in the future. Against this backdrop, the particular importance of the risk management system which Lloyd Fonds AG has been steadily improving and extending over the past few years is evident.

Risk management system

The Lloyd Fonds Group has a software-based risk management system for detecting at an early stage any developments liable to affect its going-concern status. This system also covers all main subsidiaries whose business activities give rise to material risks for the Group. Using transparent systems and processes, the aim is to identify and assess risks at an early stage as a basis for taking appropriate precautions. The Management Board defines risk management policy, which is then put into practice by the central controlling department. The controlling department ensures that the operating departments identify and measure risks in both quantitative and qualitative terms of their own accord and with minimum delay and implement precautions for averting or mitigating risk.

Risks are reviewed and re-measured on the basis of a systematic risk inventory. At the same time, there is an internal ad-hoc reporting duty with respect to any new risks identified by the responsible persons. Each risk identified is assigned to a risk group. When risks are reported and measured for the first time, it is necessary to determine the potential loss and probability in accordance with the requirements of a risk policy. Risks are measured and reviewed on a quarterly and ad-hoc basis.

The result is submitted to the Management Board in the form of a graphic, tabular and written evaluation of all risks. A quarterly report is submitted to the Supervisory Board. The risk management process thus provides a structured view of the existing risk situation, improvements to corporate management, transparency and documentation of risk management practices, heightened awareness and ultimately also the basis for internal and external risk reporting.

The proper functioning and appropriateness of the risk early detection system is assessed in regular intervals by the statutory auditors as part of the audit of the annual financial statements.

Economic and sector risks

Market and issuing risks

Lloyd Fonds initiates investment products and sells these to private and institutional investors via its retail partners. Like any other business entity, Lloyd Fonds is exposed to the risk of waning demand as a result of underlying economic conditions or changes in subscribers' preferences in favor of other types of investment products. Since the emergence of the global financial and economic crisis in the second half of 2008 and the ensuing European and US debt crisis, the market for closed-end investment funds, particularly ship investments, has been suffering from a sharp decline in demand. The crisis also continued last year, resulting in sustained restraint on the part of subscribers. The consequence was low placement volumes with a correspondingly adverse effect on the results of the Group's operations.

In the year under review, equity placements of a 6.1 million were recorded in the shipping segment including the secondary market and capital of a 7.6 million for the existing funds. This reveals the limits that exist for raising capital in the shipping segment against the backdrop of the current difficult market conditions. According to the Association of Initiators of Closed-End Investment Funds (VGF), total equity placements for ship funds were down by half across the entire closed-end investment fund segment in 2011 compared with the previous year.

Lloyd Fonds was able to collect equity of around a 6.9 million in 2011. The relative strength of this market segment generally resulted in heightened demand for assets suitable for investment by the initiators of closed-end investment funds and institutional investors, thus causing real estate prices to rise. For this reason, Lloyd Fonds was increasingly faced with the challenge of sourcing suitable assets so as to continue offering lucrative products with a relatively low risk profile.

In the energy segment, which was established as a new asset class in 2011, equity of a 10.0 million was collected from around the middle of the year under review. VGF reports that with total placements of a 637.1 million the sector as a whole fell short of expectations. This is presumably also due to the fact that the effects of the change in energy policy are less pronounced than market participants had been expecting.

According to VGF, total equity placements in the aircraft segment came to a 316.3 million in 2011 (previous year a 607.1 million). Lower passenger numbers and surplus capacity could impair the business performance of individual airlines, something which is likely to be reflected in lower lease payments.

Competition risk

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In the market which it addresses, Lloyd Fonds faces strong competition from other fund initiators. The decline in overall demand in the market for closed-end investment funds in the wake of the financial and economic crisis and the ensuing European and US debt crisis of the past few years has been accompanied by a shift in market share on the part of fund arrangers.

Like other major fund initiators, Lloyd Fonds has experienced a considerable drop in demand for ship and real estate funds, which has been only partially recouped by the the energy asset class established in 2011. With placement volumes generally low in the market as a whole, specialist operators as well as bank-related fund arrangers were able to carve out market niches for themselves.

In the medium to long term, successful activities in more than one asset class as well as a focus on core skills constitute a crucial determinant of sustained competitiveness. During the crisisridden years, Lloyd Fonds extended its real estate activities as an additional business mainstay alongside conventional ship funds and also established energy as an additional asset class. By focusing on shipping and real estate in the medium term, it will be leveraging its core skills to an even greater extent in the future, creating a sustained basis for strengthening its market position.

Given the advancing consolidation of fund initiators and the greater regulation of the market for closed-end investment funds both at the European level and in national legislation, it can be assumed that larger initiators which possess extensive asset-related skills will be able to reclaim market share. Accordingly, Lloyd Fonds expects its own market position to improve substantially .

Risk of change in tax and regulatory environment

Changes in the tax background may exert a direct influence on the design and sales of fund products. For this reason, any change in the tax background in Germany and abroad may have a negative impact on the financial success of the funds which have already been placed and also the structuring of future Lloyd Fonds funds.

The Act to Amend Investment Law will be taking effect on June 1, 2012. In this connection, the German Federal Financial Supervisory Authority (BaFin) assumes that secondary-market funds, whose management is authorized to engage in active portfolio management, will be deemed to engage in asset management as defined in the German Banking Act as of the date on which this Act takes effect and will therefore require a permit in accordance with Section 32 (1) Sentence 1 of the German Banking Act. If this view prevails, secondary-market funds will require a permit or will have to outsource or discontinue active portfolio management. In this case, Lloyd Fonds AG and its subsidiary TradeOn GmbH will lose the income from active trading. It may only be possible for further funds of this kind to be established in the absence of active portfolio management.

A preliminary bill to ratify the AIFM Directive, which had been passed by the EU parliament in November 2010 and also applies to the management of closed-end investment funds, is expected to be passed in the early summer of 2012. Ratification of the directive in national law is expected to entail extensive regulatory stipulations and approval requirements. Accordingly, there is a risk of restrictions being imposed on the range of products. Moreover, the regulatory stipulations and approvalrequirements are likely to result in heightened expense for Lloyd Fonds AG and its subsidiaries. It is not possible to rule out the risk that the new regulatory requirements may necessitate adjustments to part of the Group structure orthe business model. As a listed company, however, Lloyd Fonds is reasonably well prepared for such changes. Political debate on the details of the planned legislation is ongoing and is being carefully observed by Lloyd Fonds AG in the interests of an early response.

Strategic and operational risks

Risk of dependence on retail partners

Lloyd Fonds markets its fund products via banks, distribution platforms and independent retail partners. If several of these important partners terminate or restrict their business relations with the Company at more or less the same time, this may have a significantly negative impact on its business.

Lloyd Fonds is working steadily on broadening its retail partner base in order to reduce its dependency on individual partners. These activities are focusing on independent partners as well as significant key accounts via which exclusive placements are organized. In addition, institutional sales are also to be extended. For this purpose, Lloyd Fonds engages in regular and systematic communications with existing and potential partners. In individual cases, members of Lloyd Fonds AG's Management Board may also become directly involved. Distribution training, the establishment of new distribution channels and active key account management are amongst the main activities used to strengthen the retail base.

Risks in connection with the realization of projects

probability	amount of loss

Lloyd Fonds AG's sustained business success hinges on its ability to regularly initiate new fund products so as to have an attractive range of products in the market. For this purpose, it is necessary to develop products which are sufficiently profitable and attractive and able to meet the quality standards of the Company and the subscribers in order to ensure high retail success.

The financial and economic crisis and the ensuing European and US debt crisis have triggered sustained strong demand for attractive assets, particularly real estate. On the supply side, however, the availability of suitable assets has become increasingly limited with the result that it has become more difficult for the Company to assert itself in competition with other interested buyers. What is more, the strong demand has caused prices of attractive assets to rise. Accordingly, there is a risk of acquiring fund assets at prices which are subsequently found not to be economically viable.

As a rule, appropriate bridge and long-term finance must be secured for the assets to be integrated in investment products. In the wake of the financial and economic crisis and the ensuing European and US debt crisis, bank lending has become substantially more restrictive. Consequently, it may be more difficult to achieve the necessary finance or such finance may only be available on less favorable terms. Nor can it be ruled out that banks may refuse to grant project finance. If it is not possible in such cases to raise the necessary finance from other sources, this may threaten the viability of the project.

Moreover, misjudgements in structuring a closed-end investment fund or during the examination phase or in connection with the sourcing of the asset may prevent the project from being executed.

Risks in connection with finance for existing projects

There is a risk that banks may fail to honor or may retract commitments already given or terminate loans.

This particularly applies to finance provided by HSH Nordbank for existing ship funds due to the fact that following misspeculation in the credit and capital markets this bank has had to restructure its business and must observe stringent rules imposed on it by the European Commission. One of these requirements is that it must reduce its volume of ship loans by around a 11 billion. In the event of this risk occurring and if it is not possible to refinance the loan with another bank, the consequence would be harm to Lloyd Fonds AG's reputation as well as the loss of management and trusteeship fee income. On the other hand, this would not leave any material traces on its balance sheet as it holds only small shares in the entities concerned. Group management is currently in intensive talks with its finance partners to develop a solution allowing the projects concerned to be restructured.

In the wake of the financial crisis, banks have become a good deal more restrictive in the provision of the necessary bridge or long-term finance. In connection with the Holland Utrecht fund, which is currently in the subscription phase, there is a risk that, in the event that the capital is not placed in full by the time the asset is delivered in May 2012, further bridge finance to cover the shortfall may be refused. Arrangements have been made under which bridge finance of a 2.5 million is to be provided. In addition, Lloyd Fonds AG has granted the fund entity a loan to finance the remaining shortfall in the purchase price of the asset. Other than this, the fund is not exposed to any financing risks. Lloyd Fonds will continue marketing the fund as planned until it has been placed in full. This risk does not apply to the other funds currently on offer due to their innovative funding structures.

Risk of insolvency of fund entities

The global financial and economic crisis and the ensuing European and US debt crisis have caused the business risks to which fund entities are exposed to rise over the last few years. Such business risks entail the default of contractual partners such as charterers, tenants or lessees which are suffering from the effects of the financial and economic crisis. What is more, ship funds were exposed to the sustained muted state of the shipping markets in 2011. As a result, it was only possible for charters to be renewed on less favorable terms upon expiry, if at all. This resulted in financial distress for the corresponding fund entities.

In the event of the insolvency of a fund entity, the recoverable value of the shares held by Lloyd Fonds as the founding shareholder would particularly be at risk. Moreover, there is a risk of the non-retrievability of any amounts owed by the fund entities. As well as this, the insolvency of fund entities would be detrimental to Lloyd Fonds AG's reputation.

If a fund becomes insolvent, the limited partners face the risk of having to repay the dividends received in the past which are not covered by the entity's profits. In cases in which the Group acts as trustee, this also affects Lloyd Fonds AG as Lloyd Treuhand GmbH may sustain considerable liquidity outflows as a result if it is active as a trustee for the subscribers. In this case, the recovery claims held by it must be asserted individually against the subscribers.

In addition, in the event of the insolvency of a fund, there is a risk that it receivables held by Lloyd Fonds Treuhand GmbH against the fund entity in question (e. g. trusteeship fees) can no longer be realized and could be permanently lost. Cumulative occurrence of this risk could adversely affect Lloyd Fonds AG's results of operations, net assets and financial condition.

Prospectus liability risks

In order to attract equity capital in the form of limited-partner contributions, Lloyd Fonds AG produces selling prospectuses for which it is liable towards individual subscribers in its capacity as the publisher in the event of any loss being sustained as a result of any errors or omissions in the prospectus. The selling prospectuses are regularly produced in accordance with the "Principles for the Proper Assessment of Prospectuses for Investments Offered Publicly" (IDW S4), a standard issued by Institut der Wirtschaftsprüfer in Deutschland e.V., and examined by a public auditor in accordance with this standard. In the case of all audited prospectuses, the auditor has generally confirmed that the information provided is complete, correct and clear and has also confirmed that the assessments in the prospectuses are plausible, the conclusions are logical and also that the risks and rewards associated with the investment have been detailed in accordance with IDW S4; however, in individual cases, the auditor may have made comments which do not restrict the validity of the audit result. In addition, Lloyd Fonds AG regularly has the tax-related statements contained in the prospectus reviewed by a tax expert.

As well as this, the retail partners (particularly banks) periodically submit the prospectuses to internal examination prior to retailing the products. However, the assessment of the prospectus by an auditor as well as other actions taken do not provide any guarantee of the absence of any errors or omissions in the contents of the prospectus or of the economic benefits or tax ramifications of the investment. In the case of protracted subscription periods, there is also a risk that addenda allowing for any later changes in the facts underlying a prospectus can no longer be published in time, meaning that the prospectus may become subsequently erroneous.

Accordingly, an outcome cannot be ruled out in which damages may be awarded against the Company under its liability for the prospectus on account of errors or omissions in the contents of past or future prospectuses particularly if the investors' expectations of returns are not fulfilled on account of any shortcomings in the asset or for any other reasons.

In order to mitigate these risks, Lloyd Fonds applies the greatest possible care in the selection of the products which it offers, their design, the description of these products and the selection and monitoring of its retail partners.

Risks from advisor liability

probability		amount of loss
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Court judgments are reflecting a trend towards more stringent duties of disclosure and with respect to the provision of advice in connection with sales of investment products. Similarly, the possibility cannot be precluded that incorrect advice given by third parties who are involved in sales of investment products will increasingly be deemed to come within the responsibility of the product supplier. However, such a trend is unlikely to have any major ramifications for market operators with many years of experience.

Risks in connection with the duties of Lloyd Treuhand GmbH

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As at the end of 2011, Lloyd Treuhand GmbH, a subsidiary of Lloyd Fonds AG, was managing the capital of more than 52,000 fund subscribers – on a trusteeship basis in some cases – in accordance with trust and management agreements. As part of its management duties, it is responsible for handling all the rights and duties of the subscribers with the greatest possible care in accordance with the trust agreement. However, it is not possible to rule out the possibility that an individual investor may institute legal action on account of a purported breach of duty on the part of Lloyd Treuhand. To avoid this risk from the outset, Lloyd Treuhand selects its staff carefully and ensures the greatest possible reliability by means of employee training and regular quality checks.

In November 2010, Lloyd Treuhand GmbH had its quality management system (QMS) certified by an independent body in accordance with ISO 9001. The certification covers all of the Company's processes such as subscriber relationship management, the tax and commercial register departments and fund/payout documentation. In addition to the initial examination and approval for certification, the QMS, which Lloyd Treuhand implemented in 2009, undergoes regular monitoring in intervals of at least twelve months. Ongoing analysis of customer requirements and monitoring of processes ensures that all processes comply with current requirements and are subject to ongoing improvements.

Risks in connection with bonds and guarantees issued

probability amount of loss

In connection with bridge finance for fund products, Lloyd Fonds issued bonds and placement guarantees to the financing banks in earlier years, under the terms of which it undertakes to assume the outstanding capital itself in the event that it cannot be placed in the market by acquiring the limited-partner shares or to have a third party do so at its own expense. In such cases, the Company bore the issuing and placement risk to the extent of its corresponding exposure.

In April 2010, Lloyd Fonds AG came to an agreement with its creditor banks providing for the Company to be released from its liability. In this connection, the banks agreed to permanently waive recourse to the collateral provided by Lloyd Fonds AG and the placement guarantees issued by it.

In return, Lloyd Fonds undertook to pay an amount of up to a 20 million in installments by December 31, 2014. If full payment was not made in a given year, the outstanding amount was automatically transferred to the following year until December 31, 2017 at the latest Further details of the liability release agreement are set out in Lloyd Fonds AG's annual reports for 2009 (page 51 et seq.) and 2010 (page 78).

The Company was engaged in intensive negotiations to finance this amount in the year under review. Using the gross proceeds of a 14.7 million from the equity issue executed in December 2011, the Company was finally in a position to finance the payment of the liability release compensation, which had previously been reduced from a 13.65 million to a 10.0 million. The amount of a 10 million was paid to the banks on January 10, 2012. As a result, the Company has relieved of virtually all guarantees and bonds issued in favor of the banks in earlier years in connection with interim finance for fund products.

Under the terms of the liability release agreement, Lloyd Fonds had granted the creditor banks 21 call options on the shares held in project entities in the ship pipeline for which Lloyd Fonds had issued guarantees. 14 call options were exercised by the bank in the period between the date on which the bank agreement was signed and the end of 2011, resulting in the transfer of the shares to third parties. In addition, the shares held by Lloyd Fonds AG in a further three entities were transferred with full legal effect to third parties prior to the bank agreement being signed. Accordingly, Lloyd Fonds is no longer a shareholder in these project entities. However, the liability release agreement entered into with the banks stipulates that even after the call options have been exercised the collateral provided is to be retained pending full and final execution of the liability release. Still, the possibility of recourse being taken to this collateral has now been eliminated due to the payment of the liability release compensation and the resultant liability release.

The contingent liabilities recognized by the Lloyd Fonds Group as of December 31, 2011 came to a total of a 123.6 million (previous year a 154.1 million). Net of the settlement claims arising from overall debt relations of a 37.5 million (previous year a 57.0 million), the remaining liable volume stands at a 86.1 million (previous year a 97.1 million). Of this, a sum of a 69.6 million or 80.8% is covered by the liability release agreement.

As of March 31, 2012, the net liability volume in connection with a purchase price guarantee issued for the "Holland Utrecht" real estate fund stands at a 7.0 million. The capital requirements have been reduced to a 4.4 million as of April 24, 2012 due to the placement of further equity. As a result, Lloyd Fonds AG's exposure has decreased accordingly.

Organization and personnel management structure

probability amount of loss

Lloyd Fonds' success hinges crucially on the activities of the members of the Management Board and other management staff as well as qualified senior executives. To safeguard the future financial success of Lloyd Fonds, it is therefore vital for adequate numbers of senior executives and specialists to continue working for the Company so as to exclude any adverse effects on the Group members and their continued business performance.

As part of its restructuring activities in earlier years, Lloyd Fonds has implemented extensive measures aimed at streamlining its processes and harnessing potential for enhancing its efficiency. The measures taken are regularly reviewed for efficacy and, if necessary, modified. In addition, Lloyd Fonds has implemented a project to optimize the interfaces between the individual parts of the Group with the aim of additionally improving the quality and efficiency of its business processes.

Above-average fluctuation in staff could prevent individual positions from being filled properly. Similarly, unsuitable appointments or shortfalls may occur as a result of incorrect personnel decisions.

IT risks

Permanent availability of IT systems is critical for ensuring successful business handling. At the same time, Lloyd Fonds is required to guarantee the safety of sensitive data, particularly data relating to customers, at all times. The Company has taken numerous precautions to minimize the risk of system failures, including server virtualization and the implementation of modern back-up systems complete with external data strongholds and contingency plans for the swiftest possible system restoration. Among other things, data and IT systems are protected by means of firewalls, anti-virus and encryption programs as well as authorization and authentication systems.

Financial risks

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient liquidity reserves. As a result of the dynamic nature of the environment in which the Group operates, the aim of the finance/treasury department is to maintain the necessary financing flexibility by ensuring the availability of liquidity reserves.

The economic and financial crisis as well as the ensuing European and US debt crisis have resulted in an appreciable decline in earnings and, as a consequence, reduced liquidity. At the same time, the availability of and conditions for finance have deteriorated substantially. Moreover, new regulatory requirements (Basel III) are leading to more restrictive and selective lending on the part of banks. Accordingly, there is a risk of not being able to find suitable finance partners. In addition, the Group may not be able to cover its financial requirements or may be forced to accept finance on unfavorable terms.

Short-term liquidity management is based on a rolling liquidity preview, which can be widened to a forecast horizon of up to one year , supplemented by medium-term forecasts for the following four years. This is an integrated planning model comprising forecasts for the balance sheet, the income statement and the cash flow statement. Both short-term liquidity planning and the medium-term model are based on the Group's current business forecasts and harmonized with each other. The cash flows forecast using these models formed the basis for KPMG's positive opinion of the Group's restructuring viability.

As of December 31, 2011, the Group's financial liabilities totaled a 31.1 million and were roughly unchanged over the previous year (a 27.9 million). Further details, particularly with respect to the maturity structure can be found in the notes to the consolidated financial statements under Note 3.2.c.

In connection with the Holland Utrecht fund, which is currently in the subscription phase, there is a risk for Lloyd Fonds AG that, in the event that the capital is not placed in full by the time the asset is delivered in May, 2012 and no bridge finance is obtained, the guarantee issued in favor of the seller of the real estate may be utilized. Arrangements have been made for bridge finance to be provided to cover the resultant liquidity risk. Lloyd Fonds will lend the fund entity the remaining amount required to pay the purchase price. (1) If the progress made in collecting the equity for the "Holland Utrecht" fund is not sufficient to repay the bridge finance and the loan provided by Lloyd Fonds AG, (2) Lloyd Fonds AG's liquidity from its operating business is not sufficient to fill the resultant shortfall and (3) Lloyd Fonds is not able to raise any alternative bridge finance to fill the liquidity shortfall, the Company's going-concern status is at risk.

Counterparty default risk

The financial and economic crisis and the ensuing European and US debt crisis left considerable traces on the Group's risk position as a result of threatened defaults. Lloyd Fonds addressed this heightened risk by recognizing extensive impairments in prior years. In the year under review, further impairments were recognized on receivables and their recoverable value adjusted accordingly.

In addition to ongoing impairment testing of receivables, Lloyd Fonds is responding by means of steady and sustained improvements to its receivables management in an effort to ensure early collection of amounts owed and to reduce the volume of receivables due for immediate settlement.

Despite the greater volume of receivables compared with the previous year and the impairments recognized in the year under review, there is currently no significant risk of any loss arising from irretrievable receivables. Reference should be made to the notes to the consolidated financial statements (Note 3.2.a) for further analyses.

Foreign currency exposure

The Group is currently exposed to foreign currency risks in US dollars, which primarily result from end-of-year translation of the corresponding monetary items. Monetary items comprise cash and cash equivalents, receivables and liabilities. Foreigncurrency receivables and liabilities chiefly arise from the fact that some fund products are initiated in a foreign currency. To mitigate the effects on earnings, the Group initially forecasts the net risk for earnings from foreign currency translation on a regular basis. If it is determined that hedging effects cannot be achieved through positions already entered into, the Group's risk management policy provides for foreign currency forwards to be entered into with investment-grade banks to hedge individual transactions. These tasks are performed by the Finance/Treasury department in consultation with other responsible departments.

Many of the investment products initiated by Lloyd Fonds are also exposed to foreign currency risks. In the event of a negative trend in exchange rates, there is a risk of the returns on investments declining with a corresponding adverse effect on customer satisfaction and the Group's reputation. If necessary, the managing directors of the funds affected may pass resolutions to hedge such risks in consultation with the subscriber representative councils.

All told, the Group does not have any material foreign currency exposure. Accordingly, there were no significant risks in this respect as of the balance sheet date.

Impairment risk

In prior years, the financial and economic crisis resulted in a heightened risk of impairment losses on the shares in associates held by the Group. In addition to the shares which Lloyd Fonds holds in its own investment funds, its investments in associates such as Feedback AG, KALP GmbH and TVO Income Portfolio LP, may also be affected. Lloyd Fonds addresses this risk by means of ongoing reviews of the fair values of its investments on the basis of an analysis of the relevant financial indicators. By means of regular impairment tests, Lloyd Fonds made extensive adjustments in previous years to the value of the shares held in some of these associates. As a result, the risk of any further impairment losses grew fundamentally smaller. At the same time, the impairment risks rose in the year under review on account of generally weak economic conditions. Accordingly, the risk of further impairments in individual cases cannot be ruled out.

Interest risk

Interest risk is the risk of fluctuation in the fair value of or future payment flows from a financial instrument as a result of changes in market interest rates. This affects the Group's future interest income and expense and also influences the fair value of its financial assets. There were no material interest risks as of the balance sheet date. Further details can be found in Note 3.1.b of the notes to the consolidated financial statements.

Other risks

Legal disputes

probability amount of loss

As of the balance sheet date. Lloyd Fonds AG had received a demand from a shipyard to settle the claims for compensation held against insolvent single-ship limited partnerships. However, Lloyd Fonds AG had never agreed to accept any liability and nor were the persons making such representations authorized to represent it. The shipyard has not responded since Lloyd Fonds' notice of May 2011 rejecting the demand for payment of April 2011. In this case, there is a risk of litigation. However, as there has been no response from the shipyard in almost a year, this risk is considered to be only small.

Tax risks

As of the balance sheet date, tax risks may particularly arise from a reappraisal of several ship transactions involving Cypriot project companies in 2004 to 2007. Including possible interest expense, Lloyd Fonds' risk is currently valued at around a 5.6 million.

New facts coming to light have been reviewed by all the parties involved. According to an assessment conducted by a major renowned consulting company, any claims which may arise in this regard will not be primarily directed at companies of the Lloyd Fonds Group. On the basis of current information, the actual risk of recourse being taken to the Group or of any direct claims being asserted against Lloyd Fonds AG is considered to be low.

Moreover, erroneous advice or judgments in tax matters or failure to observe deadlines may have ramifications which are detrimental to Lloyd Fonds or, in the event of failure to observe deadlines, result in the imposition of fines or surcharges.

Reputation risks

As a listed company, Lloyd Fonds attracts heightened public interest. Like the entire industry, the Group was severely hit by the economic and financial crisis and the ensuing European and US debt crisis. As a result, Lloyd Fonds sustained considerable losses in earlier years and was unable to reach some of the goals which it had set itself. This also left traces on the Group's good reputation. However, the Company assumes that the successful restructuring efforts and the liability release achieved for Lloyd Fonds AG following the payment of the liability release compensation to the creditor banks at the beginning of 2012 will restore the trust which the Company's banks and other partners place in its viability and ability to generate earnings.

A further material risk to the Group's reputation arose from trends in the relevant asset markets in the wake of the crisis, particularly in the shipping segment. At times, it was not possible to obtain follow-up charters for ships or the charters which were obtained were not sufficient to cover costs, as a result of which some ship funds became distressed. In this situation, Lloyd Fonds acted in the best interests of the fund subscribers, developing and implementing comprehensive restructuring plans. In addition, the restrictive approach adopted by a number of creditor banks with respect to the termination of current loans in connection with a number of ship funds may result in the insolvency of these entities. In this case, the Group's reputation would be adversely affected.

Thanks to the integrated and cautious approach taken by the fund management, it has been possible to develop viable solutions to stabilize many fund entities , thus avoiding significant harm to Lloyd Fonds' reputation.

Moreover, detrimental news or information on Lloyd Fonds, such as a massive decline in its stock, or the Group's products, e.g. reports on the weak performance of the existing funds or the dissolution or insolvency of funds, or the market for investment funds as a whole, e.g. a scandal, may severely harm the Group's reputation.

Overall assessment of risk situat ion

With the payment of the liability release compensation on January 10, 2012, Lloyd Fonds AG has now discharged liabilities coming within the scope of the bank agreement. Accordingly, its risk position has been substantially reduced. As of the date on which the consolidated financial statements were prepared, there were no individual risks to the Group's going-concern status with a high probability of occurring with the exception of the purchase price guarantee issued in favour of the seller of the "Holland Utrecht" investment property falling due in May, 2012. According to management's assessments, the high-loss risks identified exhibit a low or medium probability. All the high-probability risks entail low loss potential. However, the cumulative occurrence of individual risks could pose a threat to the Group's going-concern status.

Main characteristics of the accounting-related internal control and risk management system

Elements of the accounting-related internal control and risk management system

The Lloyd Fonds Group's accounting-related internal control and risk management system encompasses all principles, processes and precautions for ensuring the efficacy, efficiency and propriety of the accounting system and for ensuring compliance with the applicable statutory provisions.

The core elements of the internal control system are the internal management and monitoring system. The Central Accounting, Controlling and Finance/Treasury departments are responsible for coordinating the Group's internal control system. The internal monitoring system entails measures integrated in processes as well as non-process-related measures. The measures integrated in processes include individual checks such as the application of the "double sign-off" principle as well as IT-based checks. In addition, monitoring processes are integrated by means of specific Group functions such as Group tax and Group legal. Non-process-related control functions are primarily performed by the Supervisory Board, and other auditing bodies such as the external tax auditors.

The accounting-related risk management system is integrated within the Lloyd Fonds Group's risk management system described on page 67. It is designed to identify significant risks to the Company's accounting process including the preparation of the consolidated financial statements and external reporting. The key element comprises the early detection, management and monitoring of risks capable of impacting the Group's net assets, financial condition and results of operations.

Structures

The Lloyd Fonds Group has a central accounting and bookkeeping structure. With the exception of the companies in Singapore and Austria, the transactions of all consolidated subsidiaries are recorded directly in the central accounting system. This system also prepares the single-entity financial statements in accordance with German commercial law. The financial statements of the two aforementioned non-domestic subsidiaries are prepared locally. However, Lloyd Fonds receives monthly report and enters this data in the central accounting system.

Group-wide policies and instructions have been adopted to ensure swift, correct, complete and efficient entries of all transactions.

The IFRS department is also integrated within central accounting and is responsible for reconciling the financial statements of the consolidated companies prepared in accordance with German or local GAAP with the measurement and recognition rules applicable under the International Financial Reporting Standards (IFRS). In addition, the IFRS department is responsible for consolidating the individual companies and preparing the resultant consolidated financial statements.

An IT system running the FibuNet financial accounting program is used to record individual transactions. This program is also used to consolidate the individual companies and to record consolidation bookings. The main upstream systems integrated in FibuNet are the treasury management system provided by econfinance and the DC-Fonds enterprise resources planning system from Devcon. DC-Fonds is used to organize, manage and monitor sales activities as well as the trusteeship management of the investment products initiated by Lloyd Fonds. In addition to these integrated systems, Lloyd Fonds has an IT-based tool for measuring the value of ship fund investments. As well as this, a Bloomberg terminal is used to obtain the real-time data required for measuring the value of assets.

Processes

The consolidated financial statements are prepared and external reporting organized in the form of a structured process based on a schedule implemented by the relevant internal departments and external partners. Agreement is also reached on the deadline for the delivery of accounts-related data generated outside the accounting system, e.g. information obtained from fund management for measuring the value of investments of the financial statements of associates. Data from outside the department or Company is collected on the basis of predefined individual requirement profiles. This process also entails flowback checks to ensure timely receipt of all the information requested.

The consolidation process takes the form of full consolidation at the level of Lloyd Fonds AG. Accordingly, no subgroup financial statements are prepared.

The preparation process entails a large number of checks to ensure that all errors and omissions are avoided. These comprise preventive and downstream investigative checks. The preventive checks particularly comprise approval and release processes, e. g. in connection with the recording of incoming invoices and payment operations. Certain transactions which may affect the consolidated financial statements on account of their scope or complexity are also approved in a predefined process. In addition, the central accounting, treasury, tax and legal departments provide direct assistance in connection with major contracts, e. g. in the structuring of new funds. Consequently, the accounting department receives direct information ensuring that such transactions are recognized correctly.

The investigative checks are performed in the various phases of the accounting process. This particularly entails the "double-sign-off" principle. All single-entity financial statements are checked by the head of accounting before they are cleared for processing by the IFRS department. In connection with the reconciliation of these financial statements with IFRS and consolidation, additional plausibility checks and examinations are performed. The data recorded at the Group level is then transferred electronically to the Corporate Planner controlling tool, where it is processed for inclusion in the monthly management report. This is accompanied by close consultation between accounting and controlling.

In addition to the monthly management report, a weekly "jour fixe" is held between the accounting department and the CFO to discuss all material matters relating to the financial statements. As well as this, the accounting, finance/treasury and controlling departments meet with the two members of Lloyd Fonds AG's Management Board in monthly meetings.

Material events occurring after the balance sheet dat e

The financial and economic crisis in 2008 and 2009 left deep traces on Lloyd Fonds AG. In particular, the Company had issued placement guarantees for various fund financing arrangements. In this connection, the risk of recourse being taken to such guarantees had risen. To address this problem, a liability release agreement was entered into with the creditor banks under the terms of which Lloyd Fonds AG was released from liability under the placement guarantees and other contingent liabilities under the bank agreement subject to payment of the liability release compensation of a 10.0 million using the proceeds from the fresh equity issued at the end of 2011. This liability release compensation was paid on January 10, 2012.

In accordance with the terms of the applicable contracts, the two interim finance arrangements for "Lloyd Fonds A380 Singapore Airlines" were converted into long-term loans of a duration of 11.5 years at the beginning of January 2012 and are to be repaid using the equity collected. This means that the fund has secure bridge finance over a period of more than eleven years on generally favorable terms.

On January 9, 2012, Michael F. Seidel (the member of the Management Board responsible for finance, sales and marketing, trusteeships and investor relations) and the Supervisory Board came to an agreement that Mr. Seidel would leave the Company effective January 31, 2012. This decision was made in mutual agreement. Dr. Joachim Seeler was appointed to the Management Board of Lloyd Fonds AG effective February 1, 2012 and is responsible in this position for real estate activities, sales and marketing, trusteeship activities and PR. In connection with the changes to the Management Board, Dr. Torsten Teichert has assumed responsibility for financial matters in addition to his existing duties as well.

Effective February 1, 2012, rating agency Scope Analysis additionally enhanced its analysis system and particularly increased the weighting of the market-related factors and the quality of the fund manager. As a result, the ratings awarded to Lloyd Fonds AG funds were upgraded. "Lloyd Fonds A380 Singapore Airlines" was upgraded from "A" to "AA-", "Best of Shipping III" from "BBB+" to "A", "Lloyd Fonds Energie Europa" from "A-" to "A" and "Holland Utrecht" from "A-" to "A". Moreover, Scope assigned Lloyd Fonds AG a management rating of "A+" testifying to its high quality. The two core segments - shipping and real estate - were also rated "A+". On February 10, 2012, the management of MS "Wehr Nienstedten" filed with the local court of Hamburg for insolvency of the ship entity for liquidity reasons. The availability of the necessary liquidity had been reduced to such an extent due to the protracted idleness of the ship that it was no longer possible for its solvency to be maintained.

At the beginning of March 2012, a letter of intent was entered into with a party potentially interested in buying the TVO portfolio of US condominiums. This is now to be followed by the due diligence exercise.

KALP GmbH, in which Lloyd Fonds holds a 45.1% share, continued to successfully develop the first automatic lashing platform for loading and unloading container ships. At the end of 2011, negotiations were commenced with the Finnish Cargotec Group with the aim of entering a global licensing contract. It was on account of these negotiations that a private placement offering which had originally been launched to finance KALP was halted. In February 2012, the license contract was duly signed. The Cargotec Group as the licensee has the industrial capacity and the international network required to prepare KALP GmbH's innovative solution for series production and to market it globally.

As the ramifications of the regulations possibly to be issued by the German Federal Financial Supervisory Authority (BaFin) as of June 1, 2012 are currently not foreseeable and BaFin holds the view that, upon the Act to Amend Investment Law taking effect, secondary-market funds may also be deemed to engage in asset management as defined in the German Banking Act, Lloyd Fonds AG has decided at the beginning of March to initially halt the placement of its "Best of Shipping III" secondary-market fund.

The "Holland Utrecht" real estate fund is currently in the placement phase. The target building is scheduled for acceptance in May, 2012. The current capital shortfall is being financed by a loan granted by Lloyd Fonds AG. In addition, arrangements have been made for the provision of bridge finance to cover the purchase price of the asset.

Outlook

The following forecasts are based on assumptions whose occurrence cannot be reliably determined. If one of more of these assumptions fail to occur, actual results and developments may differ materially from the forecasts presented here.

IMF forecasting slight recession

Spurred by the momentum of the emerging markets, the global economy continued to expand at the beginning of the year under review. However, at that point in time, the International Monetary Fund (IMF) was already forecasting a slight slowdown in the rate of global expansion for 2011 as a whole. Prompted by the worsening debt crisis afflicting the euro zone and its effects on the global economy, the IMF downgraded its forecasts for the euro zone and Germany several time in the course of the year.

At the beginning of 2012, it again responded to the protracted euro zone crisis with a substantial downward correction in its growth figures. Accordingly, it now expects economic output to contract by 0.5% in 2012, with a small increase of 0.8% set to emerge in the following year. The German economy is expected to grow by 0.3% in 2012 and by 1.5% in 2013. The main reason for the deterioration in the overall figures for the eurozone is to be found in Italy and Spain, which the IMF sees as being substantially lower than those in the other industrialized nations. According to the IMF, the emerging and developing markets also face the prospect of more muted growth of 5.4% for the year as a whole.

That said, it does not consider global economy growth to be at risk and expects global economic output to climb by 3.3% in 2012 and by 3.9% in 2013. The IMF continues to forecast growth of 1.8% in the United States in the current year, with this figure expected to accelerate to 2.2% in 2013.

	2012	2013
Change in GDP (%)
World	3.3	3.9
United States	1.8	2.2
Euro zone	-0.5	0.8
United Kingdom	0.6	2.0
France	0.2	1.0
Germany	0.3	1.5
Spain	-1.7	-0.3
Developing and emerging markets	5.4	5.9
China	8.2	8.8
India	7.0	7.3

Source: IMF, January 2012

Closed-end investment fund market facing a turnaround

After sustaining drastic losses in the wake of the financial crisis, the market for closed-end investment funds is slowly beginning to find its feet. Although placement figures in 2011 still fell well short of the high level achieved in the pre-crisis years, they have stabilized at a low level. The business climate index for closed-end investment funds, which rating agency Scope Analysis GmbH regularly publishes, climbed from 146 to 150 points in the second half of the year and is thus now slightly above its multi-year mean. According to the survey conducted at the beginning of 2012 of a total of 73 initiators accounting for more than 70% of equity placements as well as 87 banks and asset managers, arrangers of closed-end investments in particular are cautiously optimistic about 2012. They see the fundamentally strong interest in investments in tangible assets as justifying expectations of an improvement in market conditions. A further cause of optimism is the high volume of liquidity chasing suitable investment opportunities. What is more, with the expected market consolidation on the supply side and the decision by many fund initiators to concentrate on their core skills, many retailers are now confident of receiving very high-quality products. Even so, even the optimists acknowledge that uncertainty in the market is taking a long time to dissipate. At the same time, fund initiators are continuing to focus on German real estate. For this reason, Scope assumes that funds investing in German real estate will continue to dominate the German closed-end investment fund market as in the previous year. Lloyd Fonds is convinced that real estate will retain its status as the largest segment in the closed-end investment fund market this year. Accordingly, it will be focusing on this asset class alongside shipping.

Focus on shipping

Shipping is the Company's central asset class. In 2012, activities will again revolve around portfolio management with the aim of developing new investment and placement models for refinancing and restructuring existing funds. Lloyd Fonds has been exploring various options for combining the individual single-ship entities to form larger units. The aim is to create a legal basis for combining several ships so as to achieve better financing terms thanks to cash pooling, cross holdings and economies of scale in ship operations and management. In this way, the ships involved will have a better chance of surviving the crisis.

Focus on real estate

Lloyd Fonds will be focusing on residential, office and also commercial real estate. In selecting locations, it will be concentrating on market segments offering high growth potential in economically and politically stable countries, with top priority being given to the German market. In addition, the US and Netherlands real estate markets are subject to observation.

In sourcing new assets, Lloyd Fonds will be applying strict criteria: in addition to the location and the lessees' credit rating, several other aspects are also decisive for the success of a conservatively structured closed-end investment fund in the real estate segment. In the preliminary selection of appropriate assets, the Company will be paying particularly close attention to buildings characterized by high energy efficiency, effective building structures and the possibility for alternative use of the assets. As well as this, high geographic or legal barriers to market entry will play a crucial role in the selection process.

In the real estate segment, asset management will be of crucial importance as a central service in addition to asset sourcing and fund structuring. The aim is to independently address all matters relating to lessee and asset management with a broad-based team of real estate experts. This will involve leveraging and extending the expertise already available within Lloyd Fonds in order to keep the value of the real estate stable and to ensure the highest possible appeal to potential buyers in the exit phase.

The Company continued the successful series of funds investing in Dutch real estate through the addition of a fund investing in an office building in Utrecht in 2011. This fund remained in the subscription phase in 2012. Lloyd Fonds plans to launch at least one new German real estate fund this year.

Outlook for the Company

Given the sustained difficult macro-economic conditions underlying the market for closed-end investment funds, Lloyd Fonds has dispensed with a specific forecast of placement volumes in 2012. However, the Company assumes that placement figures in 2012 will be up on the previous year, with a further increase expected for 2013.

In response to the structural changes emerging in the financial markets and the difficult sector conditions, the newly constituted Management Board adopted further measures in the first quarter of 2012 aimed at additionally optimizing operational processes and cost structures. In the second half of the year under review, measures were taken to boost cost efficiency. Thus, roughly one third of its total office space was subleased and staff numbers trimmed again. On this basis, Lloyd Fonds expects to be able to reduce personnel costs by around 25% over the year under review in 2012. With respect to income, it is working on stabilizing recurring income from management and trusteeship fees. Accordingly, the Company expects to be able to return to achieve consolidated net profit in the low single-digit millions in 2012, followed by a stabilization of this trend in 2013.

Given the structural changes emerging in the financial markets and the difficult sector conditions, the new Management Board has adopted further measures in the first quarter of 2012 aimed at additionally optimizing operational processes. In the second half of the year under review, measures were taken to boost cost efficiency. On this basis, Lloyd Fonds expects to be able to reduce personnel costs by around 25% over the year under review in 2012. With respect to income, it is working on stabilizing recurring income from management and trusteeship fees. Accordingly, the Company expects to be able to return to achieve consolidated net profit in the low single-digit millions in 2012, followed by a stabilization of this trend in 2013.

Lloyd Fonds has decided to concentrate on two core asset classes, namely shipping and real estate, although it will be continuing to distribute its current range of products, including the "Lloyd Fonds Singapore Airlines" aircraft fund and "Lloyd Fonds Energie Europa", this year.

OPPORTUNITIES

With the completion of the equity issue, Lloyd Fonds AG stands on a solid economic basis, allowing it to advance its strategic development in 2012 and regain lost market share. Against the backdrop of sector consolidation, Lloyd Fonds is committed to making the best possible use of this potential by utilizing and extending its strengths and skills. Material opportunities will be derived from the following factors:

Strategic opportunities

Solid economic foundations and a strong strategic partner Following the successful equity issue, Lloyd Fonds AG has discharged all contingent liabilities under the bank agreement of April 2010 and therefore successfully completed its restructuring. At the same time, its share capital and, hence, consolidated equity and share capital have been materially strengthened. This positive development constitutes a material opportunity for Lloyd Fonds AG. The Company has created a solid economic basis for further strategic development and sustained growth.

US investment company AMA Capital Partners LLC (AMA) acquired 49.9% of Lloyd Fonds AG's capital as a result of the equity issue. Lloyd Fonds AG has gained in AMA a strong strategic investor committed to ensuring that it regains market shares and increases its enterprise value. AMA Capital Partners is an internationally active consulting and investment company with a proven track record in shipping and transportation. Since its incorporation in 1987, it has overseen numerous international shipping transactions.

It wants to make use of the opportunities arising in the ongoing consolidation process in the closed-end investment fund market and in the shipping sector and playing an active role in this respect.

Successful asset management by means of a clear focus

Looking forward, Lloyd Fonds AG will be concentrating on transportation and real estate in the future. In addition, the newly created "Investments & Alternative Assets" department will be a key pillar within the Company. This focus on the Company's core skills and the successful completion of the liability release process should strengthen Lloyd Fonds' position and reputation in relations with subscribers and retail partners.

Competence and long-standing experience

Since its establishment in 1995, Lloyd Fonds AG has arranged 105 closed-end investment funds, in which over 52,000 subscribers have placed equity of a 2.0 billion. The Company itself manages a cumulative investment volume of over a 5.1 billion. Backed by these many years of experience coupled with the additional skills in the real estate sector in particular and the expected medium-term recovery in the market for closedend investment funds, the Lloyd Fonds Group may be able to harness material opportunities.

The current crisis afflicting the shipping sector will spur the development of new fund models and financing structures. The task at hand is to forge structures for successfully navigating the existing funds through the crisis. Lloyd Fonds will wants to help to shape the changes in the sector, playing a pioneering role in the market as it evolves.

The real estate segment has been substantially reinforced with the appointment of Dr. Joachim Seeler to the Management Board, allowing Lloyd Fonds to broaden its activities in this area with high expertise.

Cost-cutting and efficiency

In order to adjust to changed market conditions, Lloyd Fonds AG implemented strategic cost management in 2008 and continued these efforts in 2011 as well. With this new personnel structurereduction in staff numbers in the year under review and the focus on shipping and real estate, Lloyd Fonds AG is optimizing its internal processes and thus heightening its operational efficiency. As other cost types have also beenwere also successfully lowered in the year under review, Lloyd Fonds has entered 2012 strengthened, additionally reinforced by its higher equity ratio and improved liquidity base.

Opportunities arising from underlying conditions

Regulation and consolidation

The growing regulation of closed-end investment funds is offering Lloyd Fonds AG opportunities for regaining market share.

Thus, in the medium term only fund initiators which are sufficiently capitalized and able to satisfy the strict regulatory requirements imposed by the AIFM Directive and the Act to Amend the Law Governing the Arrangement of Financial Investments will be able to continue playing a dominant role in the market. Opportunities arise for Lloyd Fonds AG as a listed fund initiator in that unlike many of its peers it already complies with high transparency and quality standards, many of which will be incorporated in the planned regulatory measures.

Upon requirements for approval taking effect in Germany, the conditions for such approval are to be satisfied immediately and the corresponding applications lodged within the requisite periods to ensure that the Company is able to act on the assumption of approval and remains fully operational free of any delays.

In connection with market consolidation, Lloyd Fonds AG is additionally seeking to acquire trusteeship entities and fund management units in order to boost recurring trusteeship income. Accordingly, it expects its own market position to improve substantially.

Market

Despite subscribers' reticence, Lloyd Fonds AG assumes that the market for closed-end investment funds will recover in the medium term – not least of all due to the rising risks of inflation, which will render investments in tangible assets more attractive, and the copious liquidity in the capital market in search of attractive investment opportunities. The equity placements of a 5.9 billion in the market as a whole testify to the continued demand for closed-end investment funds. Given the opportunities outlined here, we assume that Lloyd Fonds AG will be able to widen its market share in the medium term.

Consolidated income statement

for the period from January 1 to December 31, 2011

	Note	2011	2010
in Ta
Sales	6.1	14,290	19,307
Cost of sales	6.2	-4,497	-6,031
Personnel costs	6.3	-8,765	-8,643
Depreciation, amortization and impairments	6.4	-1,318	-2,380
Other operating expenses/income	6.5	-3,961	130
Share of profit of associates	6.6	379	1,978
Net loss/profit from ordinary activities		-3,872	4,361
Finance income	6.7	2,260	1,520
Finance expense	6.7	-1,911	-4,656
Net loss/profit before tax		-3,523	1,225
Income taxes	6.8	623	1,454
Consolidated net loss/profit for the year		-2,900	2,679
Loss/earnings per share (basic/diluted) during the year (a per share)	6.9	-0.23	0.21

Consolidated statement of comprehensive income

for the period from January 1 to December 31, 2011

	Note	2011	2010
in Ta
Consolidated net loss/profit for the year		-2,900	2,679
Other income components recognized in equity
Available-for-sale financial assets	7.4	272	3,665
Deferred taxes on these	7.5	-57	-545
Investments in associates	7.3	-385	395
Currency translation differences		-23	-63
Other comprehensive income		-193	3,452
Consolidated comprehensive income		-3,093	6,131

Consolidated balance sheet

as of December 31, 2011

		Note Dec. 31, 2011 Dec. 31, 2010
in Ta
Assets
Non-current assets
Property, plant and equipment	7.1	803	1,003
Intangible assets	7.2	406	754
Investments in associates	7.3	11,093	16,020
Available-for-sale financial assets	7.4	4,247	4,935
		16,549	22,712
Current assets
Trade and other receivables	7.6	6,088	6,368
Receivables from related parties	7.7	2,380	1,125
Available-for-sale financial assets	7.4	7,124	7,112
Current income tax assets		1,960	2,648
Cash and cash equivalents	7.8	16,947	11,539
		34,499	28,792
Total assets		51,048	51,504
Equity
Share capital	7.9.a	27,470	12,725
Additional paid-in capital	7.9.b	44,196	45,432
Retained earnings	7.9.c	-53,276	-50,183
Total equity		18,390	7,974
Liabilities
Non-current liabilities
Net assets attributable to other limited partners	7.10	1,028	1,181
Trade payables	7.11	414	836
Financial liabilities	7.12	48	71
Derivative financial instruments	7.14	180	–
Deferred income tax liabilities	7.5	664	607
		2,334	2,695
Current liabilities
Trade payables and other liabilities	7.11	14,244	4,377
Liabilities to related parties	7.13	1,801	7,602
Financial liabilities	7.12	13,592	13,868
Other provisions	7.14	591	13,963
Current income tax liabilities		96	1,025
		30,324	40,835
Total liabilities		32,658	43,530

Total equity and liabilities 51,048 51,504

Consolidated cash flow statement

for the period from January 1 to December 31, 2011

	Note	2011	2010
in Ta
Cash flow from operating activities
Consolidated net profit/loss for period before share of profit of investments, interest and income taxes	8.1	-3,870	2,280
Deconsolidation gain	6.5	–	-7,884
Depreciation, amortization and impairments on non-current assets	6.4	1,318	2,380
Profit/loss from the sale of non-current assets	6.5	14	-636
Other non-cash income and expenses	8.2	-2,806	-1,154
Changes in trade and other receivables and derivative financial instruments		-346	14,044
Changes in receivables from related parties		-1,366	438
Changes in trade payables, other liabilities and derivative financial instruments		14	-3,578
Changes in amounts due to related parties		-1,077	172
Changes in other provisions		459	-1,978
Interest received		34	17
Interest paid		-315	-1,117
Dividends and profit distributions received		1,034	2,935
Income tax refunds received		1,137	1,302
Income taxes paid		-467	-421
Net cash generated from/used in operating activities		-6,237	6,800
Cash flow from investing activities
Payments made for investments in:
Intangible assets and property, plant and equipment	7.1–2	-51	-172
Available-for-sale financial assets and investments in associates		-291	-1,996
Proceeds from the disposal of:
intangible assets and property, plant and equipment	7.1–2	–	12
Available-for-sale financial assets and investments in associates		72	2,554
Net cash outflow/inflow from investing activities		-270	398
Cash flow from financing activities
Payments received from the issue of new shares		13,966	–
Transaction costs in connection with the issue of new shares		-1,236	–
Changes in the net asset value attributable to other limited partners		-64	230
Proceeds from borrowings		–	336
Repayment of borrowings		-731	-2,826
Net cash used in/generated from financing activities		11,935	-2,260
Non-cash change in cash and cash equivalents		279	408
Net increase in cash and cash equivalents		5,707	5,346
Cash and cash equivalents on January 1		10,288	6,474
Changes in the companies consolidated		–	-1,477
Currency translation differences		-22	-55
Cash and cash equivalents on December 31	8.3	15,973	10,288

Consolidated statement of changes in equity

for the period from January 1 to December 31, 2011

			Other comprehensive income
	Subscribed capital	Additional paid-in capital	Retained earnings	Financial assets available for sale	Investments in associates	Currency translation differences	Total equity
in Ta
Amount on January 1, 2010	12,725	45,432	-56,736	360	53	9	1,843
Total net profit/loss recorded within consolidated equity	–	–	2,679	3,120	395	-63	6,131
Amount on December 31, 2010	12,725	45,432	-54,057	3,480	448	-54	7,974
Amount on January 1, 2011	12,725	45,432	-54,057	3,480	448	-54	7,974
Total net profit/loss recorded within consolidated equity	–	–	-2,900	215	-385	-23	-3,093
Equity issue	14,745	-1,236	–	–	–	–	13,509
Amount on December 31, 2011	27,470	44,196	-56,957	3,695	63	-77	18,390

Notes to the Consolidated Financial Statements for 2011

1 General information

Lloyd Fonds AG (hereinafter referred to as the "Parent Company") and its subsidiaries (hereinafter referred to as the "Lloyd Fonds Group") are engaged in the development, arrangement, initiation and marketing of investment products for private and institutional investors via sales partners. In 2011, its activities particularly concentrated on closed-end funds investing in transport (ships, aircraft and secondary-market ship funds), real estate and energy. Other Group activities encompass trust management and the management of investment funds.

The Parent Company is a joint stock corporation (Aktiengesellschaft) established in accordance with German law with registered offices in Hamburg. The Company's address is: Lloyd Fonds AG, Amelungstraße 8-10, 20354 Hamburg. Lloyd Fonds AG has been listed on the regulated market (Prime Standard segment) of the Frankfurt Stock Exchange since October 28, 2005.

These consolidated financial statements were approved for issue by Lloyd Fonds AG's Management Board on April 27, 2012.

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the reporting periods presented, unless otherwise stated.

The consolidated financial statements have been prepared in thousands of euros (abbreviated to Ta) as this rounding method does not result in any loss of information. Individual items of the income statement and the balance sheet have been combined in the interests of heightening understanding of the presentation. These items are explained in the notes. The income statement has been prepared using the total cost method.

2.1 Basis of preparation

In accordance with Section 290 of the German Commercial Code (HGB), Lloyd Fonds AG is required to prepare consolidated financial statements. As a listed company, it is additionally required under Article 4 of Regulation (EC) No. 1606/2002 of the European Parliament and The Council of July 19, 2002 to prepare its consolidated financial statements pursuant to Section 315a of the German Commercial Code (HGB) using international accounting standards.

Lloyd Fonds AG's consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted and published by the International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU) on or before December 31, 2011. As a matter of principle, Lloyd Fonds early adopts all standards and interpretations. The consolidated financial statements have been prepared in accordance with the going-concern assumption. Reference should be made to Note 9.2 for risks arising from contingent liabilities and their potential effect on this assumption.

As a matter of principle, the consolidated financial statements are prepared under the historical cost convention. Available-for-sale financial assets and derivative financial instruments are reported at their fair values.

2.1.a New standards and interpretations applied for the first time

The EU Commission endorsed amendments to the following existing standards and interpretations as of December 31, 2011:

• Amendments to IFRS 7 "Financial instruments: disclosures – transfers of financial assets" (to be applied in accounting periods beginning on or after July 1, 2011)
• Amendments to seven standards as part of the 2008-2010 Annual Improvement Project (to be applied in accounting periods beginning on or after January 1, 2011).

The new and revised standards and interpretations did not have any effect on the Lloyd Fonds Group's net assets, financial condition or results of operations.

2.1.b Outlook for future standards

This section describes the new IFRS standards and revisions to existing standards and interpretations, which are to be applied in accounting periods commencing on or after January 1, 2012. Earlier adoption has been recommended in all cases. The Lloyd Fonds Group early-adopted only those new standards and interpretations as well as amendments to existing standards which have been endorsed by the EU Commission.

• Amendments to IAS 1 "Presentation of financial statements": Published on June 16, 2011, the amendment harmonizes the presentation of items of other comprehensive income (OCI) between IFRS and US-GAAP. OCI is now to be divided into recycled and non-recycled items. These amendments are to be applied for the first time in accounting periods commencing on or after July 1, 2012.
• Amendments to IAS 19 "Employee Benefits": Published on June 16, 2011, the amendments provide for actuarial gains and losses to be recorded within OCI. Further changes concern the presentation and categorization of changes in net liabilities/assets under defined benefit plans as well as additional disclosures in the notes on the characteristics and risks of these defined benefit plans. These revisions are to be applied for the first time in accounting periods commencing on or after January 1, 2013.

• Amendments to IAS 32 "Financial instruments: presentation" and IFRS 7 "Financial instruments: disclosures": Published on December 16, 2011, the amendments remove the previous inconsistencies in the interpretation of the existing guidance on offsetting financial assets and liabilities. Gross and net income from offsetting and amounts for existing offsetting rights which do not satisfy the offsetting criteria must be disclosed in the future. These amendments are to be applied for the first time in accounting periods commencing on or after January 1, 2014 with retrospective effect.

• IFRS 10 "Consolidated Financial Statements" and amendments to IAS 27 "Separate Financial Statements": Published on May 12, 2011, the standard introduces a uniform consolidation model based on a revised concept of control under which the right to exercise control, variable returns and the scope for affecting the variable returns must be cumulatively satisfied. IFRS 10 replaces SIC-12 as well as parts of IAS 27. The new standard and the amendments apply to accounting periods commencing on or after January 1, 2013.

• IFRS 11 "Joint Arrangements" and amendments to IAS 28 "Investments in Associates and Joint Ventures": Published on May 12, 2011, IFRS 11 provides new guidance on accounting for joint arrangements to replace IAS 31 "Interests in joint ventures" and SIC-13. The possibility for proportionate consolidation has been abolished. The equity method is applied in accordance with the revised IAS 28. The new standard and the amendments apply to accounting periods commencing on or after January 1, 2013.
• IFRS 12 "Disclosure of Interests in Other Entities": Published on May 12, 2011, IFRS 12 combines the revised disclosure obligations on joint arrangements with those in IAS 27, IFRS 10 and IAS 28/IFRS 11 in a single standard. The new standard and the amendments apply to accounting periods commencing on or after January 1, 2013.
• IFRS 13 "Fair Value Measurement": Published on May 12, 2011, the standard solely governs the procedure for measuring fair value. However, the items of the balance sheet which are to be measured at fair value are covered by the individual standards. Moreover, fair value is redefined as the price that would be received to sell an asset or paid to transfer a liability in an actual or hypothetical transaction between any independent market participants under normal market conditions. IFRIC 13 must be applied to accounting periods commencing on or after January 1, 2013.

2.2 Consolidation

2.2.a Subsidiaries

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanied by a shareholding of more than 50% of the voting rights.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group (full consolidation). They are deconsolidated from the date on which control ceases.

Three (previous year three) companies in which Lloyd Fonds held a stake of more than 50% were not classified as subsidiaries as the Group did not have any scope for exerting influence on their business and financial policies on account of the specific provisions of their articles of association despite having a voting majority. Accordingly, the criterion of control was not satisfied. Even so, Lloyd Fonds exerted a material influence on these companies, meaning that they are accounted for as associates. Not included in the consolidated financial statements are 52 (previous year 50) subsidiaries which are of immaterial importance in their entirety for the Group's net assets, financial condition and results of operations.

Subsidiaries acquired are accounted for using the acquisition method. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date irrespective of the extent of any minority interest. If the acquisition costs exceed the Group's share in the net assets measured at fair value, this difference is recognized as goodwill. If the acquisition costs are less than the fair value of the net assets of the acquired subsidiary, the difference is recorded directly in profit and loss.

The hidden reserves and charges disclosed when the assets and liabilities are recognized at fair value during initial consolidation are amortized, depreciated or released in subsequent periods in line with the development of the assets and liabilities.

Inter-company transactions and balances between group companies are eliminated. Eliminations of inter-company gains and losses were not necessary within the Group due to the absence of any relevant transactions.

2.2.b Companies consolidated

The consolidated financial statements as of December 31, 2011 include the Parent Company as well as the following 22 (previous year 19) entities.

Company	Share held by Group	Brief description of activities
Lloyd Fonds US Real Estate M anagement Inc., Naples, United States	100.0%	anagement of Lloyd Fonds US Real Estate I L.P.
Lloyd Fonds US Real Estate I L.P., Naples, United States	100.0%	Holding of shares in TVO Income Portfolio L.P.
LFP Grundstücksgesellschaft Hamburg-Hamm GmbH, Hamburg	100.0%	Currently no business operations
Lloyd Fonds Real Estate M anagement GmbH, Hamburg	100.0%	anagement function for real estate funds initiated
Lloyd Fonds Gesellschaft für Immobilienbeteiligungen mbH & Co. KG, Hamburg	100.0%	Currently no business operations
Lloyd Shipping GmbH, Hamburg	100.0%	Project development, ship brokerage and operation of ships
21. Llofo Beteiligungsgesellschaft mbH & Co. KG, Hamburg	100.0%	Acquisition and financing of the ship M V "Tiger Pearl"
Lloyd Fonds Singapore Pte. Ltd. Ltd., Singapore	100.0%	anagement of ships owned by LF Open Waters OP SICAV
Lloyd Fonds Vermögensgarant GmbH & Co. KG, Hamburg	100.0%	Acquisition of shares which subscribers to the "Best of Shipping II Plus" fund offer for sale in exercise of their guaranteed right of return
Lloyd Fonds Special Assets GmbH, Hamburg	100.0%	Development, structuring and management of private equity investments
Dritte Lloyd Fonds Private Equity Beteiligung GmbH & Co. KG, Hamburg	100.0%	Acquisition, maintenance, management and exploitation of private equity funds
Lloyd Fonds Sales GmbH, Hamburg	100.0%	Arranging and distributing shares in limited partnerships or differently structured holdings and asset investments
TradeOn GmbH, Hamburg	100.0%	Valuation, acquisition, holding, management, structuring and sale of shares in closed-end funds organized as limited partnerships
Lloyd Zweitmarkt GmbH, Hamburg	100.0%	Currently no business operations
Lloyd Fonds Austria GmbH, Vienna Austria	100.0%	Sale of funds initiated by Lloyd Fonds in Austria
Lloyd Treuhand GmbH, Hamburg	100.0%	anagement in trust of investments, particularly the assumption of the position of trust limited partners in associates
PPA Beteiligungsgesellschaft mbH, Hamburg	100.0%	See explanations in following text
Lloyd Fonds Energy M anagement GmbH, Hamburg	100.0%	See explanations in following text
Lloyd Fonds Energy Commercial Services GmbH, Hamburg	100.0%	See explanations in following text
2. Lloyd Fonds Shipping Beteiligung GmbH & Co. KG, Hamburg	48.9%	Acquisition, holding, management and exploitation of shares in ship funds
2. Lloyd Fonds Shipping Beteiligung GmbH & Co. KG, Hamburg	48.9%	Acquisition, holding, management and exploitation of shares in closed-end ship funds
2. Lloyd Fonds Shipping Beteiligung GmbH & Co. KG, Hamburg	49.2%	Acquisition, holding, management and exploitation of shares in closed-end aircraft funds

The latter three companies are consolidated in full in accordance with the provisions of SIC-12 on account of the specific distribution of opportunities and risks notwithstanding the fact that a share of less than 50% is held in them.

The reporting date of the Lloyd Fonds Group is identical to that of the subsidiaries (December 31).

Three new companies were consolidated for the first time in 2011.

PPA Beteiligungsgesellschaft mbH, Hamburg, was consolidated for the first time in February 2011. The purpose of this company is to acquire, hold, manage and sell shares in limited-partnership entities. In connection with the closure of the fully consolidated fund Premium Portfolio Austria and the reduced capital, PPA GmbH assumed the surplus shares and the loans held within the fund to finance these shares.

In March 2011, Lloyd Fonds Energy Management GmbH, Hamburg, and Lloyd Fonds Energy Commercial Services GmbH, Hamburg, were consolidated for the first time. The purpose of Lloyd Fonds Energy Management GmbH is chiefly to manage energy funds, while Lloyd Fonds Commercial Services GmbH provides commercial and consulting services for companies in the energy sector.

The initial consolidation of these three companies did not have any material effect on the Lloyd Fonds Group's net assets, financial position or results of operation.

2.2.c Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanied by a shareholding of between 20% and 50% of the voting rights. The 138 (previous year 144) associates are accounted for by the equity method of accounting and initially recognized at cost. The Group's investments in associates include goodwill (net of any accumulated impairment loss) identified on acquisition.

The Group's share of its associates' post-acquisition profits or losses is recognized in the income statement and its share of postacquisition movements in reserves is recognized in reserves. The accumulated post-acquisition movements are adjusted against the carrying amount of the investment. If the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize any further losses unless it has incurred obligations or made payments on behalf of the associate.

Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The balance-sheet date of the financial statements of the Lloyd Fonds Group is identical to the balance-sheet dates of the individual financial statements of all entities accounted for using the equity method of accounting (namely December 31). The financial statements of Lloyd Fonds AG and of the entities accounted for using the equity method of accounting have been prepared using uniform accounting policies. If the final singleentity financial statements of the entities concerned are not yet available as of the date on which the consolidated financial statements are prepared, provisional financial statements are used.

In exceptional cases, the Lloyd Fonds Group may exert a material influence on an associate due to the specific provisions of its articles of incorporation notwithstanding the fact that it holds a share of less than 20% in its capital. For this reason, two (previous year two) companies in which the Group has an interest of less than 20% were classified as associates in the year under review.

2.3 Investment properties

Properties held as financial investments at the beginning of the year were measured at their fair value on the date of the first-time inclusion of Fonds Immobilienportfolio Köln within Lloyd Fonds AG' consolidated financial statements. The fair value largely corresponded to the value in use of the properties and was applied in lieu of the historical cost utilized up until that time. The properties were depreciated over their useful lives to their assumed residual values on a straight-line basis. Accordingly, the historical cost model was applied. The economic service life corresponds to the probable investment duration, which will uniformly end in 2016. As this fund has been deconsolidated, the buildings were disposed of again in June 2010. The scheduled depreciation expenses arising up until that date in the year under review were taken to profit and loss and are reported within depreciation/amortization and impairments (see Note 6.4).

2.4 Property, plant and equipment

Property, plant and equipment are recognized at historical cost and depreciated on a straight-line basis over their expected useful lives. Historical cost includes the directly attributable transaction costs. Gains or losses from the disposal of non-current assets are reported within other net operating profit or loss.

Scheduled depreciation is calculated on a uniform Group-wide basis. Fittings in leased office premises are written down on the basis of an expected rental period of ten years. Useful lives of between three and 19 years are assumed for other equipment, operating and business equipment. Depreciation of assets under finance leases is calculated on the basis of the expected useful life of the asset in

question provided that it is sufficiently probable that there will be a transfer of ownership rights upon the expiry of the lease. In other cases, they are depreciated over the shorter of the useful life of the asset or the term of the lease. The useful lives and any residual values are reviewed annually to ensure that they are adequate.

2.5 Finance costs

Finance costs which can be directly assigned to the acquisition, construction or production of a qualified asset are recognized as part of the cost of acquisition or production of such asset within the Lloyd Fonds Group.

2.6 Intangible assets

Acquired intangible assets are initially recognized at historical cost.

There are no intangible assets with an indefinite useful life in the Lloyd Fonds Group. Internal expenses for the development and operation of the Company's own websites are expensed. Acquired intangible assets are amortized (using the straight-line method) over their useful lives, namely eleven years in the case of trust agreements and three to five years in the case of software.

The trust agreements were acquired together with Lloyd Treuhand GmbH in 2002 and comprise a total of nine agreements with investment companies relating to the trusteeship of acquired investment capital. On the date of acquisition, the equity placement volume underlying the valuation amounted to a total of Ta 125,202 with a fee rate of 0.5% p.a. The following assumptions have been used for establishing the value of the trust agreements for measuring the assets of Lloyd Treuhand GmbH for the purposes of initial consolidation:

• Net cash flow of Ta 2,616
• Capitalization rate 6.0% p. a.
• Period of eleven years

The useful life of the trust agreements is based on the average maturities of the underlying funds.

2.7 Impairment of non-monetary assets

Intangible assets which have an indefinite useful life or which are not yet in a condition in which they are capable of operating as well as goodwill are not amortized; instead, they are subject to an annual impairment test. Assets which are subject to depreciation or amortization undergo an impairment test if corresponding events or changes in circumstances indicate that the carrying amount may no longer be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the fair value of the asset less the costs of disposal and the value in use. For the purpose of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

2.8 Financial assets

Financial assets are assigned to the following categories:

• financial assets at fair value through profit and loss
• loans and receivables
• held-to-maturity financial assets
• available-for-sale financial assets

The classification depends on the purpose for which the financial assets were acquired. The Company's management determines the classification of the financial assets at initial recognition and reviews the classification on each balance sheet date. The following categories are of relevance for the Lloyd Fonds Group:

• Financial assets at fair value through profit and loss are assigned to this category from the outset within the Lloyd Fonds Group; no assets are currently categorized as being held for trading. Assets and liabilities in this class comprise derivative financial instruments, which are described in Note 2.9.
• Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Company provides cash or services directly to a debtor without any intention of trading in such instrument. They are included in current assets unless they are due for settlement in more than twelve months after the balance sheet date, in which case they are classified as non-current assets. Loans and receivables are reported on the face of the balance sheet within trade and other receivables and within receivables from related parties.

Available-for-sale financial assets are non-derivative financial assets that are either directly assigned to this category or which cannot be assigned to any of the three other categories mentioned above. They include shares in subsidiaries and associates which are not consolidated on account of their insignificant nature and are reported within non-current assets unless management intends to dispose of the investment within twelve months of the balance sheet date.

All purchases and sales of financial assets are recognized on the trade date, i. e. the date on which the Company assumes an obligation to buy or sell the asset in question.

Available-for-sale financial assets are initially recognized at fair values plus transaction costs and adjusted to their fair values on the following balance sheet dates. Any unrealized gains or losses arising from changes in the fair value are recognized in equity allowing for the tax effects with no impact on profit and loss under other comprehensive income.

Loans and receivables are initially recognized at their fair value plus transaction costs and subsequently measured on ensuing balance sheet dates at amortized cost using the effective interest method. Reasonable allowance is made for any discernible risks of default.

Receivables are derecognized when the rights to payment expire or they have been transferred to third parties together with substantially all risks and opportunities arising from ownership. A test is performed at each balance sheet date to identify any evidence of impairment in a financial asset or a group of financial assets. In the case of equity instruments classified as availablefor-sale financial assets, a significant or prolonged decline in the fair value of the instrument below its cost is considered in determining whether the instruments are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss previously recognized in profit or loss – is removed from equity and recognized in profit or loss. Impairment losses recognized in the income statement on equity instruments are not reversed through the income statement.

The fair value of available-for-sale financial assets is calculated using the discounted cash flow method based on a standard market discount rate matching the term of the asset in question and allowing for risk exposure. Depending on the asset in question, the residual terms are between ten and 19 years. The discount rates are between 6% and 10%.

2.9 Derivative financial instruments

Derivative financial instruments are initially recognized at cost plus transaction costs on the day on which the Group becomes a party to the contractual provisions of the instrument and subsequently measured at their fair value. The Group uses derivative financial instruments solely for hedging purposes. In addition to currency forwards or options, it particularly uses interest hedges.

2.10 Trade receivables

Trade receivables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method less any impairment losses. In this connection, the effective interest method is used only if the receivable is not due for settlement in less than twelve months. Impairment losses are recognized on trade receivables when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Indicators of possible impairment particularly include delayed payments and any deterioration in the debtor's credit rating. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The impairment loss is taken to the income statement and allocated to other operating income/expenses. If a receivable is deemed irretrievable, it is derecognized and allocated to the impairment account for trade receivables. Any subsequent payments received towards derecognized receivables are reported in the income statement within other operating income.

It is assumed that the fair value of trade receivables equals their nominal value less adjustments.

2.11 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less. For the purposes of the cash flow statement, bank overdraft facilities are netted against cash and cash equivalents. Bank balances which are subject to drawing restrictions are not included in cash and cash equivalents in the cash flow statement. Bank overdraft facilities utilized are reported in the balance sheet within current financial liabilities.

2.12 Equity

Incremental costs which are directly attributable to the issue of new shares or options are recognized in equity as a deduction net of tax from the proceeds of the issue. Costs relating to the issue of new shares as well as the stock-market listing of shares already issued are split and assigned to the individual transactions. Transaction costs arising in connection with the stock-market listing of shares already issued are recognized as expense to the income statement.

2.13 Liabilities and financial liabilities

Liabilities and financial liabilities are initially recognized at their fair value net of transaction costs. In subsequent periods, liabilities and borrowings are stated at amortized cost; any difference between the proceeds and the redemption value is recognized in profit or loss over the period of the liability or borrowing using the effective interest method. They are reported within current liabilities unless they are due for settlement in more than twelve months after the balance sheet date, in which case they are recorded as non-current liabilities.

It is assumed that the fair value of trade payables equals their nominal value less adjustments. The fair value of non-current financial assets is derived by discounting the future contractual payment flows with the current market interest rate granted to the Group for comparable financial instruments.

The net asset value attributable to the other limited partners is due to the right of termination provided for in the articles of incorporation in favor of the subscribers of Premium Portfolio Austria. These rights may be exercised for the first time as of December 31, 2025 and constitute a right to put back the financial instrument as defined in IAS 32.18 (b). IAS 32.AG 29A states that the exceptions referred to in paragraphs 16A-D of IAS 32 do not apply to the consolidated financial statements, which means that the capital commitments must be classified as borrowings. The amount of the settlement entitlement is governed by the respective articles of incorporation and is based on the fair value of the net assets. The value of this item was measured at fair value in connection with the first-time consolidation (present value of settlement claim). In subsequent periods, the resulting liabilities are amortized over time using the effective interest method.

2.14 Employee and management benefits

Allocations of profit, based on certain profit-sharing arrangements for the members of the Management Board and the Supervisory Board and certain employees, are recognized as expenses and stated as a liability in the balance sheet. The Group recognizes an accrued liability in the balance sheet where contractually obliged or where a past business practice has created a constructive obligation.

2.15 Deferred income tax

Deferred income tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the IFRS consolidated financial statements (liability method). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Deferred income tax assets on tax losses are recognized to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilized.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates if the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. No deferred income tax was recognized in 2011.

2.16 Provisions

Provisions are recognized if the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be necessary to settle the obligation and a reliable estimate can be made of the amount of the obligation. Non-current provisions are recognized at the present value of the expenditure expected to be required to settle the obligation discounted at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognized as borrowing cost.

2.17 Revenue recognition

Revenues comprise the fair value received for the sale of services excluding value added tax, discounts and rebates and after eliminating transactions within the Group. As a matter of principle, revenues from the provision of services are not recognized until the service has been provided, a legal claim to remuneration has arisen, the amount of the revenues can be reliably estimated and it is sufficiently likely that an economic benefit will flow to the Company. In addition, individual revenues are accounted for in accordance with the following principles:

Lloyd Fonds provides the fund companies with project management services entailing business advice and management services during the incorporation phase, the preparation of general and finance plans as well as the production of the offering prospectus. Depending on the wording of the contract in question, income is realized either upon the service in question being completed or on a percentage-of-completion basis reflecting the progress in made in placing the underlying fund.

In addition, Lloyd Fonds provides services in connection with the placement of equity encompassing the raising of equity capital and related selling activities such as advertising and marketing. As a matter of principle, the service is deemed to have been provided at the time at which the relevant shares are accepted by Lloyd Treuhand GmbH; accordingly, the time of legal entry is decisive in determining the realization of the proceeds. Cancellation notices received within the statutory notification period during the period in which the consolidated financial statements are prepared are included in the year under review. Correspondingly, expenses incurred in conjunction with equity placements are recognized at the same time.

In connection with the arrangement of finance, Lloyd Fonds provides the fund companies with services which involve securing finance from a financial company to cover the bridge finance requirements of the fund company in question as well as the payment of the issue capital and final finance. As a rule, revenue from intermediary financing services is realized as contractually agreed, in line with the placement progress of the underlying fund.

Remuneration for the acceptance of placement guarantees is realized upon the equity capital being placed in view of the accessory nature of the guarantee.

Management fees are paid for the provision of services by Lloyd Fonds to the fund companies such as interest and currency management as well as controlling. As these services are executed on an ongoing basis throughout the entire duration of the service contracts, the resultant income is distributed on a time-proportionate basis.

In addition, Lloyd Fonds provides trusteeship services entailing the establishment of trust arrangements, the management of limited-partner shares held for third parties or managed following entry in the commercial register as well as the preparation of, the dispatch of invitations for and the organization of shareholder meetings. The establishment fee is recognized in the year in which the service is provided in full in the form of a flat-rate amount in accordance with the percentage of completion of the underlying fund. Trusteeship fees arising in following years are recognized on each balance sheet date as a share of the applicable value of the capital under management.

Interest income is recorded using the effective interest method on a time-proportionate basis. Dividend income is recognized when the right to receive payment is established, i. e. the date on which the corresponding resolution is passed.

2.18 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the period of the lease.

If Lloyd Fonds as the lessee bears the material risks and opportunities arising from the leased asset, the leases are classified as finance leases. In this case, the asset is placed on the Group's books as an asset and is matched by a liability of the same amount. The leased asset is initially measured at the lower of its fair value or the present value of the minimum lease payments. In subsequent periods, scheduled depreciation of these assets is calculated over their expected useful lives. However, if there is no reasonable certainty that Lloyd Fonds will obtain ownership by the end of the lease term, the asset is fully depreciated over the shorter of the lease term or its useful life upon the expiry of the lease. The minimum lease payments are split into an interest and a repayment component. Whereas the interest component is recorded through profit and loss in net finance income/expense, the repayment component is applied to the outstanding liability.

2.19 Currency translation

2.19.a Functional currency and presentation currency

The items included in the financial statements of each consolidated company are measured on the basis of the currency which corresponds to the currency of the primary economic environment in which such company operates. The consolidated financial statements are presented in euros, which is Lloyd Fonds AG's functional and presentation currency.

2.19.b Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss unless they are required to be recognized in equity as a qualifying cash flow hedge.

2.19.c Group companies

The earnings and balance sheet items of all consolidated companies which have a functional currency other than the euro are translated into euros as follows:

• assets and liabilities are translated using the exchange rate prevailing on each balance sheet date,
• Income and expenses are translated at the average exchange rate for each income statement, and
• all resultant translation differences are recorded within other comprehensive income.

The following exchange rates were applied in 2011:

	End-of-year exchange rate	Average exchange rate
US-dollar	1.2939	1.3920

3 Financial risk management

3.1 Risks from financial instruments

The Group's activities expose it to a variety of risks from financial instruments. These entail liquidity, market price and credit risks. Market risk involves interest, currency and price risks.

3.1.a Liquidity risk

Liquidity risk is managed by the Finance/Treasury department on the basis of procedures and measures complying with the risk management policy issued by the Management Board. Short-term liquidity is managed by means of rolling liquidity planning on a currency-differentiated basis covering a forward-looking range of up to one year and prepared using the direct method. A forward range of up to one year is applied. It is supplemented by mediumterm forecasts for the following four years. This is an integrated planning model comprising forecasts for the balance sheet, the income statement and the cash flow statement. Both the short and medium-term forecasts are derived from the Group's business planning and are mutually aligned to each other. The rolling forecast is submitted to the Management Board once a week together with an overview of current trends in actual liquidity. The medium-term forecast is regularly updated and approved by the Management Board.

3.1.b Market risk

Interest risk, which is one aspect of market risk, arises from possible fluctuations in the fair value of a financial instrument and the cash flows which it is expected to yield on account of changes in market interest rates. This affects the Group's future interest income and expense and may also influence the fair value of its financial instruments.

Normally, loans granted or utilized are subject to a fixed interest rate reflecting standard market conditions. They are subsequently measured at amortized cost using the effective interest method in accordance with IAS 39. Accordingly, no material adjustments to fair value are likely.

In addition to the aforementioned fixed-rate assets and liabilities, the Lloyd Fonds Group has taken out a floating-rate loan for US-\$ 9.0 million (previous year US-\$ 9.0 million) based on US-\$ Libor. If US-\$ Libor had been 10.0% (previous year 10.0%) higher or lower, interest expense assuming constant exchange rates would have been Ta 8 (previous year Ta 10) higher or lower, respectively. Overall, Lloyd Fonds was not exposed to any significant interest risks as of the balance sheet date. Accordingly, there are no hedges at the level of Lloyd Fonds AG or any Group member.

In these consolidated financial statements, foreign-currency risks primarily relate to the translation of US-\$-denominated assets and liabilities into euro. To minimize these effects, Lloyd Fonds regularly analyzes the Group's foreign-currency assets and liabilities and forecasts future trends. The focus here is on risks affecting the Group's liquidity. If any significant risks to the Group's financial condition arise from foreign-currency exposure, appropriate hedges are transacted.

The Finance/Treasury department is responsible for managing interest and foreign-currency risks in consultation with other Group departments.

The price risk particularly relates to the fair-value measurement of available-for-sale financial assets. The shares held by the Group in its own funds come within this category and chiefly comprise shares which Lloyd Fonds has retained as the original founder of the funds. As a matter of principle, fluctuations in fair value are reported within other comprehensive income. This does not apply to impairment losses, which are recorded through profit and loss. However, reversals are reported within equity.

Lloyd Fonds measures the fair value of all investments in material associates at the end of each quarter. This is performed by the Group's fund management in close consultation with Group Accounting to ensure that any changes are correctly reflected in the balance sheet. In the event of any objective evidence of an impairment, corresponding impairment tests are performed and any impairment in the fair value of the investment in the associates concerned taken to profit and loss. Considerable impairment losses were recorded in the crisis year of 2009 in particular. Given the continued difficult market conditions, particularly in the shipping segment, further impairments were recognized in the year under review to allow for the price risk.

3.1.c Credit risk

The credit risk refers to the threatened non-recoverability of outstanding receivables. In the wake of the economic and financial crisis, there was a general increase in this risk. This particularly concerned receivables from distressed investment funds. As part of efforts to restructure these entities, the Lloyd Fonds Group granted respites on these receivables and, in some cases, agreed to waivers in return for debtor warrants. The resultant credit risks are provided for by means of individual impairments. As receivables are viewed on an individual basis, it is assumed that the nominal amount net of the impairment equals the fair value.

In addition to ongoing impairment testing of receivables, Lloyd Fonds is responding to the heightened credit risk by means of steady and sustained improvements to its receivables management. This particularly focuses on swift collection of outstanding amounts in an effort to reduce the volume of receivables due for immediate settlement.

3.2 Disclosures on financial instruments

The following table analyzes the financial instruments broken down by the categories defined in IAS 39 as well as the classes selected by the Lloyd Fonds Group in accordance with IFRS 7. The carrying amount equals the fair value:

2011	Loans and receivables	Available- for-sale	Financial liabilities at their residual carrying amount	Total
in Ta
Non-current assets
Available-for-sale financial assets	–	4,247	–	4,247
	–	4,247	–	4,247
Current assets
Trade and other receivables	6,088	–	–	6,088
Receivables from related parties	2,380	–	–	2,380
Available-for-sale financial assets	–	7,124	–	7,124
Cash and cash equivalents	16,947	–	–	16,947
	25,415	7,124	–	32,539
	25,415	11,371	–	36,786
Non-current liabilities
Net assets attributable to other limited partners	–	–	1,028	1,028
Trade payables	–	–	414	414
Financial liabilities	–	–	48	48
	–	–	1,490	1,490
Current liabilities
Trade payables and other liabilities	–	–	14,244	14,244
Liabilities to related parties	–	–	1,801	1,801
Financial liabilities	–	–	13,592	13,592
	–	–	29,637	29,637
	–	–	31,127	31,127

			Financial liabilities at their residual
2010	Loans and receivables	Available- for-sale	carrying amount	Total
in Ta
Non-current assets
Available-for-sale financial assets	–	4,935	–	4,935
	–	4,935	–	4,935
Current assets
Trade and other receivables	6,368	–	–	6,368
Receivables from related parties	1,125	–	–	1,125
Available-for-sale financial assets	–	7,112	–	7,112
Cash and cash equivalents	11,539	–	–	11,539
	19,032	7,112	–	26,144
	19,032	12,047	–	31,079
Non-current liabilities
Net assets attributable to other limited partners	–	–	1,181	1,181
Trade payables	–	–	836	836
Financial liabilities	–	–	71	71
	–	–	2,088	2,088
Current liabilities
Trade payables and other liabilities	–	–	4,377	4,377
Liabilities to related parties	–	–	7,602	7,602
Financial liabilities	–	–	13,868	13,868
	–	–	25,847	25,847
	–	–	27,935	27,935

3.2.a Loans and receivables

The Group's loans and receivables rose by a total of Ta 975 from Ta 7,493 to Ta 8,468. The maturity structure in the year under review as well as in the previous year breaks down as follows:

	2011	2010
in Ta
Not yet due for settlement	5,863	3,153
Overdue by 1–30 days	297	235
Overdue by 31–365 days	1,278	1,747
Overdue by more than one year	1,030	2,358
	8,468	7,493

As of December 31, 2011, receivables of Ta 4,242 (previous year Ta 2,896) were impaired by a total of Ta 3,285 (previous year Ta 2,548) to Ta 957 (previous year Ta 348). Details of the underlying estimates and assumptions can be found in Note 4.3.

3.2.b Financial assets and liabilities at fair value

In measuring financial instruments at fair value, three different hierarchy levels are used:

• Level 1: Prices quoted in active markets for identical assets or liabilities (such as share prices).
• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i. e. as prices) or indirectly (i. e. derived from prices).
• Level 3: Inputs for the asset or liability that are not based on observable market data.

As in the previous year, the Group's financial assets at fair value through profit and loss comprise solely investments in associates which were categorized as available-for-sale as of December 31, 2011. The fair value of these investments is calculated using the discounted cash flow method, meaning that they are assigned to Level 3 of the hierarchy.

The following table analyzes the Level 3 financial instruments:

	Note	2011	2010
in Ta
Amount on January 1		12,047	7,732
Additions		160	701
Disposals		-51	-1,144
Dividends received		-353	-348
Changes to companies consolidated		–	1,621
Reclassifications		14	238
Net gains/losses reported directly within profit and loss	6.4	-718	-418
Income recognized within equity	7.9	272	3,665
Amount on December 31		11,371	12,047

3.2.c Financial liabilities

As of December 31, 2011, the Group's financial liabilities totaled Ta 31,127 (previous year Ta 27,935).

Maturity structure of financial liabilities:

	2011	2010
in Ta
Less than one year	29,637	25,847
One to five years	462	827
ore than five years	1,028	1,261
	31,127	27,935

The current financial liabilities comprise loans of Ta 5,622 granted by Raiffeisenbank Niederösterreich-Wien AG (RaiBa) to finance the shares acquired in the target funds of Premium Portfolio Austria. These loans were originally due to expire on December 31, 2008 but have been repeatedly renewed, most recently until further notice under the terms of the bank agreement. In connection with the premature closure of the fund together with the reduced capital, these loans and the surplus shares were transferred to PPA GmbH, which was incorporated in the year under review. The shares and all returns on these investments have been pledged as collateral for these loans.

Under the terms of the liability release agreement, assets with a carrying amount of a total of Ta 1,267 were pledged as collateral for outstanding liabilities.

3.2.d Impairments

Impairments on financial instruments were as follows in the Lloyd Fonds Group:

	2011	2010
in Ta
Loans and receivables
Trade receivables
Amount on January 1	2,125	5,339
Reclassified	–	626
Added	1,494	242
Utilized	-661	-3,076
Reversed	-39	-1,006
Amount on December 31	2,919	2,125
Receivables from related parties
Amount on January 1	423	2,555
Reclassified	–	-626
Added	97	136
Utilized	-154	-1,604
Reversed	–	-38
Amount on December 31	366	423
	3,285	2,548
Available-for-sale financial assets
Amount on January 1	2,479	3,519
Added	718	418
Utilized	-45	-1,458
Amount on December 31	3,152	2,479
impairments on December 31	6,437	5,027

3.2.e Other disclosures

Net gains (or losses) from financial instruments break down as follows:

	2011	2010
in Ta
Measured at amortized cost
Loans and receivables
Trade receivables	-1,444	-181
Receivables from related parties	-110	-104
Cash and cash equivalents	50	-48
	-1,504	-333
Financial liabilities at residual carrying amount
Trade payables and other liabilities	314	895
Liabilities to related parties	617	-517
Current financial liabilities	-220	-488
	711	-110
	-793	-443
At fair value through profit or loss
At fair value through profit or loss
Derivative financial instruments	–	-2,179
	–	-2,179
At fair value recognized under equity
At fair value recognized under equity
Available-for-sale financial assets
Impairments recognized directly in profit and loss	-718	-418
Realized gains from sales	23	822
Realized losses from sales	-38	-186
Additions to revaluation reserve pursuant to IAS 39	215	3,120
	-518	3,338
Net losses/gains from financial instruments	-1,311	716

The net gains/losses on financial instruments measured at amortized cost comprise unrealized currency translation gains, income from the derecognition of liabilities, the recognition and reversal of impairments on trade receivables and expense in connection with irretrievable receivables. In the previous year, losses had been recorded on the carrying amount of the financial instruments at fair value through profit or loss from the measurement of the interest rate swaps for Immobilienportfolio Köln, which arose during the year up until the date of deconsolidation. Financial instruments recognized at fair value in equity entail the measurement of available-for-sale financial assets in accordance with IAS 39.

Net interest income/expense on the financial assets measured at amortized cost breaks down as follows:

	2011	2010
in Ta
Loans and receivables
Interest income on bank balances	73	150
Interest refund from tax authorities	147	144
Interest income from related parties	118	57
Interest income from other limited partners	89	–
Other interest and similar income	–	76
	427	427
Loans and receivables
Interest expenses on borrowings	-510	-895
Interest expenses due to limited partners	–	-362
Interest expenses from interest cost of borrowings	–	–
Other interest expenses	-173	-24
	-683	-1.281

3.3 Capital Risk management

The objectives of the Lloyd Fonds Group with regard to capital management are to maintain an adequate level of equity on a sustained basis and to generate an appropriate return on the capital employed. In this connection, top priority is given to the Group's credit rating.

The Group monitors its capital on the basis of absolute amounts in the light of its equity ratio. Future changes in capital and possible capital requirements are calculated by reference to an integrated planning model for the coming four years.

As a matter of principle, Lloyd Fonds AG's capital structure is managed by means of its dividend policy. In the last two years, no dividend was distributed on account of the Company's earnings situation. Moreover, no dividends may be paid out until full liability (January 10, 2012) release had been achieved.

As the Group's equity had come under considerable pressure in earlier years as a result of the crisis, 14,744,560 new shares were issued in the year under review to improve its equity resources. The consolidated net loss for the year (Ta 2,900), the transaction costs of the equity issue (Ta -1,236) and the negative effects reported within other comprehensive income (Ta -193) were deducted from equity, however. Net of these effects, equity stood at Ta 18,390 as of December 31, 2011 (previous year Ta 7,974). The equity ratio came to 36.0% as of the balance sheet date, up from 15.5% as of December 31, 2010.

4 Use of estimates and assumptions, changes to estimates and discretionary decisions

All estimates and assumptions are reviewed on an ongoing basis and are based on historical experience and other factors including expectations of future events considered probable in the light of existing conditions. The Group makes estimates and assumptions concerning the future. The amounts derived from such estimates may by definition vary from the later actual circumstances. The material estimates and assumptions entailing a significant risk in the form of a material adjustment to the carrying amounts of assets and liabilities within the next financial year are detailed below.

4.1 Recoverable value of investments in associates

Lloyd Fonds holds investments in a total of 138 associates, which are accounted for using the equity method of accounting. In most cases, these are fund management entities as well as project entities. The management entities receive fixed annual remuneration from the funds.

Lloyd Fonds re-assessed the share of profits of associates which it recognizes in response to changed underlying economic conditions. The changes were made on a prospective basis, resulting in an increase of a total of Ta 678 in the carrying amount of the investments in associates, and were reported within profit and loss. The project entities were written off in full at the end of 2009 in cases in which Lloyd Fonds had granted the banks call options on the capital of these entities in connection with the liability release agreement.

Investments in associates also include the shares held by Lloyd Fonds AG in Feedback AG. After adjustments to allow for the share in profit/loss of Feedback AG in accordance with the equity method and including the impairments recognized in 2009 (Ta 7,056), the carrying amount now stands at Ta 1,499 as of the balance sheet date. In view of the generally uncertain business environment, an impairment test was conducted again on the shares held in Feedback AG in 2011.

The main parameters applied were as follows:

• Detailed forecast period: five years
• Growth rate for cash flows beyond the detailed forecast period: 1.5%
• Capitalization rate: 8.71%

As the recoverable amount calculated as of the balance sheet date was Ta 1,815 higher than the carrying amount of the investment (Ta 1,499), no impairment was necessary.

Compared with the previous year, the capitalization rate dropped by a total of 3.85 percentage points. This was chiefly due to a drop in the base interest rate. If the expected cash flows from the investment had been discounted at the previous year's capitalization rate, the recoverable amount would equal Ta 1,721, i. e. also above the current carrying amount. The price of the Feedback stock stood at a 0.58 at the end of the year under review. On the basis of the number of shares held, this translates into a value of Ta 3,654. Given the still uncertain general economic environment in which Feedback AG operates, Lloyd Fonds' management does not currently see any evidence justifying a reversal as of December 31, 2011.

Impairment losses of a total of TUS-\$ 4,608 had been recorded on TVO Income Portfolio L.P. in prior years, equivalent to 38.0% of the nominal value of the investment (TUS-\$ 12,125). This investment was also tested for impairment as of the balance sheet date.

Whereas in the previous year, the fair value had been calculated using the discounted cash flow method on the basis of the company's plans, in the year under review the fair value of the investment is predominantly determined on the basis of the market values of the four properties bundled in TVO Income Portfolio L.P. On the basis of these calculations, remeasurement gains of Ta 300 were recorded on the investment in TVO Income Portfolio L.P. Taking account of the current measurement according to the equity method and currency translation adjustments, the residual carrying amount as of the balance sheet date came to Ta 4,652 (previous year Ta 4,319). If the market prices had been 10% higher or lower, the carrying amount would have been Ta 1,877 higher or lower, respectively, assuming unchanged exchange rates.

4.2 Measurement of available-for-sale financial assets

In the previous years, individual investment funds became distressed as a result of the economic and financial crisis. Ship funds were exposed to risks when, for example, it was not possible to achieve a follow-up charter upon the expiry of the existing one or when such follow-up charter was possible only on terms substantially below the figures forecast in the prospectus. As part of its risk management system, Lloyd Fonds monitors the financial condition of all funds so that any countermeasures which may be necessary can be implemented in good time. Although the losses sustained by the fund entities do not have any direct effect on Lloyd Fonds AG's consolidated income statement, they may be evidence of impairment. For this reason, Lloyd Fond performs regular extensive impairment testing. The fair value of the investments is normally calculated using the discounted cash flow method.

The fair value measurements for the Group's ship investments are based on forecast charter rates and steel price data provided by Clarkson Research. In the addition, the following main criteria are applied:

• Planning horizon: 25 years after going into operation
• Forecast exchange rate: US-\$/a 1.35
• Capitalization rate: 7.0%
• Increase factor for ship operating costs: 3% p. a.
• Increase factor for management costs: 2% p. a.

The fair value of real estate and aircraft investments as well as traded endowment policies is calculated on the basis of the distribution forecasts made by the fund management in question (see Note 2.8). The internal returns of the fund in question are applied to discount the payment flows. In view of the protracted economic difficulties and particularly the weakness afflicting the shipping market, further impairments of Ta 718 were recognized in the year under review. In addition, fair value gains of Ta 272 were recorded within other comprehensive income.

4.3 Recoverable value of trade receivables and other assets

The recoverable value of receivables is calculated on the basis of an analysis of the individual default risks. A large part of the Group's receivables are due from fund entities and result from services provided by the Group, particularly project organization, the arrangement of financing, sales, fund management and trusteeship business. Default risks particularly arise if the fund's results of operations deviate from forecasts. Ship funds were particularly affected by this in the year under review (see Note 4.2). As a result, Lloyd Fonds had recognized extensive impairment losses on these receivables. All told, impairment expense on receivables came to Ta 1,683 in 2011.

4.4 Measurement of risks from pending litigation

As of the balance sheet date, Lloyd Fonds AG had received a demand from a shipyard to settle claims for compensation held against insolvent single-ship limited partnerships. However, Lloyd Fonds AG had never agreed to accept any liability and nor were the persons making such representations authorized to represent it. After rejecting the request for payment sent by the shipyard's legal representatives in May 2011, the Company has not heard anything further in this matter. In this case, there is a fundamental risk of litigation. However, it is not considered likely to occur. Accordingly, the Group does not consider this matter to constitute any material risk.

4.5 Obligations under guarantees and bonds

As of December 31, 2011, Lloyd Fonds had contingent liabilities of a total of Ta 86,128 (previous year Ta 97,126) from guarantees and bonds (see Note 9.2). This sum already includes compensation claims arising from overall debt relations to third parties. In view of the prevailing crisis, the Group's losses in 2009 and 2008 led to an appreciable reduction in its equity resources, which meant that – in the absence of appropriate measures by management – the extent of the risks might have threatened the Group's existence as a going concern. On April 21, 2010, Lloyd Fonds entered into an agreement with the financing banks on a moratorium with a subsequent release from liability for the Company. The objective of this agreement is a permanent waiver by the banks of their claims under the Group's guarantees. In return, Lloyd Fonds undertakes to pay liability release compensation. In further negotiations, it was possible for the liability release compensation to be reduced from Ta 13,650 to Ta 10,000. Following the equity issue in the year under review, the Group has the necessary cash to pay this amount at the beginning of 2012. Accordingly, it was able to reverse the provisions of Ta 3,650 which had been set aside for this purpose. The remaining amount of Ta 10,000 is recorded within current liabilities as of the balance sheet date.

4.6 Estimates regarding tax risks

As of the balance sheet date, tax risks may arise particularly from a reappraisal of several ship transactions involving Cypriot project entities in 2004 to 2007. Including possible interest expense, Lloyd Fonds' risk is currently valued at a 5.6 million.

New facts coming to light have been reviewed by all the parties involved. According to an assessment conducted by a major renowned consulting company, any claims which may arise in this regard will not be primarily directed at companies of the Lloyd Fonds Group. As the actual risk of recourse to the Group is considered to be unlikely on the basis of past experience, no provisions are required as of the balance sheet date.

5 Segment information

5.1 Operating segments

In accordance with the transitional provisions, segment reporting is based on IFRS 8 "Operating Segments" as of December 31, 2011. IFRS 8 stipulates the use of the "management approach", i. e. the reportable segments are identified and presented on the basis of the entity's internal reporting system. The chief operating decision maker as defined in IFRS 8 is the Management Board of Lloyd Fonds AG. The relevant earnings-based management parameter is EBIT as well as earnings before tax.

In the year under review, segment reporting has been extended with the addition of a new segment, namely the energy asset class. In organizational terms, Lloyd Fonds' business operations are classified into the three asset classes – transport, real estate and energy – as well as the service divisions of fund management and trust operations. This structure is reflected in the Group's internal reporting system, with the following reportable segments being identified in the process:

Transport

• Purchase and structuring of assets in the shipping, aviation and secondary-market ship fund segments
• Financing of assets by arranging debt capital
• Sale of investment products in this segment
• Receipt of income from investments

Real estate

• Purchase and structuring of assets in the real estate segment
• Other activities similar to those in the "Transportation" segment

Energy

• Purchase and structuring of assets in the energy segment
• Other activities similar to those in the "Transportation" segment

Other assets

• The segment includes funds which do not form part of Lloyd Fonds' core business (e. g. traded endowment policies, private equity funds, portfolios funds)
• Activities equivalent to those in the "Transportation" segment

Fund management

• Measures to ensure efficient management and supervision of the fund companies
• Integration in ongoing fund reporting
• Preparation of the meetings of the companies' advisory councils
• Support for trustee and submission of information of decisionmaking information
• Monitoring of existing fund companies' liquidity to identify any risks at an early stage and to take any necessary countermeasures
• Integration in the asset selling process including the winding-down of the corresponding fund companies

Trusteeship

• Handling of new issues on a trust basis
• Management of the subscribers trust accounts
• Provision of information and services for trustors

Segment results break down as follows:

2011	Transport	Real estate	Energy	Other assets	Fund management	Trusteeship	All other segments	Total
in Ta
External sales	1,651	1,033	1,029	107	2,990	7,462	18	14,290
Other operating income	778	73	129	2	78	124	3,769	4,953
Cost of sales I	-1,183	-765	-872	-31	-909	-712	-25	-4,497
Cost of sales II	-122	-106	-181	-8	-8	-222	-381	-1,028
Personnel costs	-1,607	-818	-940	–	-901	-1,240	-3,259	-8,765
Other operating expenses	-1,029	-802	-117	-937	-187	-965	-3,849	-7,886
Share of profit of associates	461	56	26	311	430	–	-905	379
Depreciation, amortization	-538	–	–	-68	-30	-98	-584	-1,318
EBIT	-1,589	-1,329	-926	-624	1,463	4,349	-5,216	-3,872
Net finance income/expense	8	56	–	–	-669	38	916	349
Net profit/loss before taxes	-1,581	-1,273	-926	-624	794	4,387	-4,300	-3,523
2010		Transport	Real estate	Other assets	Fund management	Trusteeship	All other segments	Total
in Ta
External sales		1,901	6,787	10	3,133	7,441	35	19,307
Other operating income		3,366	360	774	67	401	8,176	13,144
Cost of sales I		-1,032	-3,357	–	-953	-816	127	-6,031
Cost of sales II		-112	-310	-9	-20	-218	-684	-1,353
Personnel costs		-1,663	-1,428	-6	-1,127	-1,175	-3,244	-8,643
Other operating expenses		-4,432	-765	-246	-191	-1,081	-4,946	-11,661
Share of profit of associates		2,399	–	264	200	-16	-869	1,978
Depreciation, amortization		101	-1,218	–	-57	-51	-1,155	-2,380
EBIT		528	69	787	1,052	4,485	-2,560	4,361
Net finance income/expense		684	-139	142	-1,151	-19	-2,653	-3,136
Net profit/loss before taxes		1,212	-70	929	-99	4,466	-5,213	1,225

The cost of sales is broken down into cost of sales I and cost of sales II in accordance with the internal reporting structure. In the year under review, cost of sales I is for the most part equivalent to the cost of sales as shown in the income statement (see Note 6.2). Cost of sales II is included in other operating income/expenses in the income statement.

The "All other segments" column primarily comprises the Lloyd Fonds Group's management and central activities. As they do not generate any revenues as defined by IFRS 8, they are by definition not separate operating segments and are therefore pooled in this category.

Lloyd Fonds' internal reporting system does not include any provision for breaking down assets and liabilities by segment as management does not consider this data to be relevant for managing the Group. Accordingly, these disclosures have been dispensed with.

As in the previous year, no intrasegment sales were recorded. The expenses and income in other operating income/expenses arising from transactions between the individual segments are, if necessary, eliminated. These are solely recharged items recorded at cost.

Income from investments comprises solely the share of profit of associates. The impairments of Ta 718 included in depreciation/ amortization in the year under review and the fair value gains of Ta 272 recorded within equity concern the transport, real estate and other assets segments. Other operating result includes impairments and adjustmetns of receivables (Ta 1,683) particularly relating to transport, other assets and trusteeships. Finance income/expense is netted in segment reporting to reflect the internal reporting structure.

5.2 Reconciliation statement

The recognition and measurement methods applied to segment information correspond to those applied to the consolidated financial statements of the Lloyd Fonds Group. For this reason, the sales, pre-tax profits and losses of the reportable segments, including "All other segments", tally with consolidated sales and consolidated earnings before taxes.

5.3 Disclosures at the company level

5.3.a Information on products and services

Note 6.1 provides a breakdown of sales from external customers by products and services.

5.3.b Information on geographical regions

Of the sales recorded in 2011, Ta 13,139 (previous year Ta 18,102) were generated in Germany and Ta 1,151 (previous year: Ta 1,205) in Singapore.

The sum total of non-current assets held by the Lloyd Fonds Group, excluding financial instruments and deferred income tax assets, amounted to Ta 7,621 in Germany (previous year: Ta 13,201). Non-German non-current assets had a carrying amount of a total of Ta 4,680 (previous year Ta 4,351).

6 Notes on the consolidated income statement

6.1 Sales

Composition:

	2011	2010
in Ta
Placement of equity and placement guarantees	2,766	4,474
Project organization	705	386
Arrangement of financing	300	2,106
anagement fees	2,990	3,133
Trusteeship	7,462	7,441
Rental income	–	1,733
iscellaneous	67	34
	14,290	19,307

The decline in income from equity placements and placement guarantees is attributable to the lower placement volumes in the year under review. Moreover, the figures for the previous year include remuneration (Ta 842) from the arrangement of a private placement for two container ships from the Company's former pipeline. Project structuring income rose from Ta 386 to Ta 705, underpinned in particular by the initiation of three new funds in 2011. At Ta 300, income from the arrangement of financing arose solely in the real estate segment. Management fees include remuneration of Ta 1,839 (previous year Ta 1,928) for the management of current closed-end ship funds as well as services provided for the open-end ship fund of Ta 1,151 (previous year Ta 1,205).

The rental income recorded in the previous year is due to the temporary consolidation of Immobilienportfolio Köln up until the end of the first half of that year.

Reference should be made to the section on revenues in the management report for further information.

6.2 Cost of sales

Composition:

	2011	2010
in Ta
Commission	2,685	3,952
Cost of services bought	1,812	2,079
	4,497	6,031

Commission contains performance-tied remuneration payable to the retail partners for acquiring investment capital. The cost of services bought comprises management services received as well as fund-related marketing and retailing costs.

6.3 Personnel costs

Composition:

	8,765	8,643
Post-retirement benefit costs	11	11
Social security	898	980
Wages and salaries	7,856	7,652
in Ta
	2011	2010

Despite the reduction in average headcount from 110 in 2010 to 102 in the year under review, personnel costs rose slightly from Ta 8,643 to Ta 8,765 chiefly in connection with the increased employment termination costs (Ta 472).

All the employees are salaried.

The employer contributions to the statutory pension scheme as well as contributions to direct insurance cover are classified as defined-contribution plans in accordance with IAS 19.38. In the year under review, this expenditure came to Ta 471 (previous year Ta 508).

6.4 Depreciation, amortization and impairments

Composition:

	Note	2011	2010
in Ta
Depreciation, amortization
Investment properties		–	1.218
Property, plant and equipment	7.1	248	286
Intangible assets	7.2	352	458
		600	1,962
Impairments
Available-for-sale financial assets	7.4	718	418
		718	418
Depreciation, amortization and impairments		1,318	2,380

The depreciation recognized on investment properties relates to the scheduled depreciation on the three buildings included in Immobilienportfolio Köln, which were reported through profit and loss up until deconsolidation of these entities in June 2010.

Impairments on available-for-sale financial assets increased substantially from Ta 418 in the previous year to Ta 718. The shares held by the Group in its own funds come within this category The impairments reported in the year under review were chiefly due to the protracted difficulties in the shipping markets.

6.5 Other operating income/expenses

Composition:

	2011	2010
in Ta
Other operating income
Deconsolidation gain	–	7,884
Reversal of provisions	3,650	1,548
Income from recharged expenses	563	326
Derecognition of liabilities	319	897
Remuneration in kind	150	152
Income from the reversal of impairments on receivables	39	1,044
Rentals	36	30
Income from sale of shares	23	822
Other income	173	441
	4,953	13,144
Other operating expenses
Financial statement, legal and consulting costs	-1,836	-3,222
Impairments on receivables and unrecoverable receivables	-1,683	-1,631
Rentals, ancillary rental costs, cost of premises and maintenance	-1,476	-1,329
Retailing support and subscriber relations	-1,272	-1,432
Office supplies, IT costs and communications	-818	-923
otor vehicle and travel costs	-619	-676
Non-deductible input tax	-169	-236
Costs assumed for fund companies	-156	-266
Insurance and levies	-155	-160
Other personnel expenses	-128	-412
Obligations under guarantees and bonds	-75	-2,191
Losses from the sale of equity ­investments	-38	-186
Other expenses	-489	-350
	-8,914	-13,014
Other operating income/expenses	-3,961	130

The slight increase in net other operating income in the previous year had been materially due to the gains of Ta 7,895 from the deconsolidation of Immobilienportfolio Köln.

Legal and consulting costs in particular declined by Ta 1,386 or 43.0% to Ta 1,836 Ta in 2011. Proceeds from the reversal of provisions (Ta 3,650) relate to the reduction in the liability release compensation from Ta 13,650 to Ta 10,000.

6.6 Share of profit of associates

Composition:

	2011	2010
in Ta
Profits from the sale of ships	–	2,236
TVO Income Portfolio LP, El Paso, United States	420	253
Feedback AG, Hamburg	-805	-740
KALP GmbH, Böel	-645	-554
iscellaneous	1,409	783
	379	1,978

The share of profit from TVO Income Portfolio L.P., United States, of Ta 420 in the year under review (previous year Ta 253) is primarily due to the effects of translation from the US dollar of the value of the investment (Ta 240) and the fair value remeasurement gains of Ta 300.

In 2011, the Lloyd Fonds Group reported a share of the loss posted by Feedback AG of Ta 805 (previous year Ta 740) within the share of profit of associates.

At KALP GmbH, losses were incurred in connection with the start-up process.

Otherwise, this item includes the share of profits and losses in the current year as well as income of Ta 810 and income (Ta 678) arising from a reassessment of the carrying amounts of the management and general-partner entities, as described in Note 4.1.

The profits on the sale of maritime vessels in the previous year resulted from the sale of a 114,000 dwt crude oil tanker by an associate.

6.7 Net finance income/expenses

Composition:

	2011	2010
in Ta
Finance income
Gains from foreign-currency translation	1,609	1,093
Investment income	224	–
Interest income on bank balances	73	150
Interest refund from tax authorities	147	144
Interest income from related parties	118	57
Interest income from other limited partners	89	–
Other interest and similar income	–	76
	2,260	1,520
Finance expenses
Losses from foreign-currency translation	-1,228	-1,196
Expenses from derivative financial instruments	–	-2,179
Interest expenses on liabilities to banks	-510	-895
Interest expenses due to limited partners	–	-362
Other interest expenses	-173	-24
	-1,911	-4,656
Net finance income/expenses	349	-3,136

The net currency translation gains (Ta 381) were particularly due to currency translation gains from the measurement of amounts due to related parties.

Interest expenses on liabilities to banks of Ta 510 particularly comprise current interest on the finance for the shares acquired in the target funds of Premium Portfolio Austria and TVO Income Portfolio L.P.

Reference should be made to Note 7.10 for details of the interest paid to limited partners.

In the previous year, expense on derivative financial instruments had resulted from the fair value measurement of three interest rate swaps used to hedge the interest on the finance for the Immobilienportfolio Köln properties up until the deconsolidation of this fund at the end of the first half of that year.

6.8 Income taxes

Income tax expense comprises income taxes paid or owed as well as deferred income taxes. Taxes comprise corporate tax plus the solidarity surcharge and trade tax.

Composition:

Deferred income taxes Income taxes	7.5	– 623	9 1,454
Current taxes		623	1,445
in Ta
	Note	2011	2010

The net current income tax gains of Ta 623 are chiefly due to income from the derecognition of tax liabilities of Ta 837. The opposite effect arise from tax assessment notices for prior years. The net current income tax gains for 2010 are chiefly due to tax refunds for prior years.

Income tax expense can be reconciled as follows with the expected income tax expense/income which would have arisen on IFRS consolidated net profit before tax on the basis of an average tax rate of 15.825% for the Group parent (Lloyd Fonds AG):

	2011	2010
in Ta
Group earnings before tax	-3,523	1,225
Tax rate (Lloyd Fonds AG) in %	15.825%	15.825%
Notional tax expense/income	558	-194
Tax-free income	1,003	2,324
Non-deductible operating expenditure	-540	-1,274
Non-recognized deferred tax assets on unused tax losses	-68	-723
Non-taxable share of profits of associated companies	-110	-166
Tax refunds/backpayments for prior years	-577	1,635
Trade tax	357	-163
Reversal of deferred tax liabilities from previous years	–	9
iscellaneous	–	6
Income taxes	623	1,454

As an incorporated entity, the Parent Company is subject to corporate tax plus the solidarity surcharge of 5.5% of the corporate tax owed. In the year under review, the net trade tax refund is chiefly due to tax assessment for 2007. Other than this, no trade tax liability generally arises as the trade income of the Group parent from its business interests in the limited-partnerships is eliminated in accordance with the simplification rules provided for in the Trade Tax Act.

The tax-free income particularly comprises income from the reversal of provisions as well as income from investments and unrealized exchange rate gains. The non-deductible operating expenses materially relate to impairments on receivables and investments.

6.9 Earnings/loss per share

Earnings/loss per share are calculated by dividing profit or loss attributable to the ordinary equity holders by the average number of ordinary shares outstanding during the year:

Loss/earnings per share (d per share)	-0.23	0.21
Average number of shares issued (in thousands)	12,806	12,725
Loss/profit attributable to equity holders in Parent Company (Ta)	-2,900	2,679
	2011	2010

The number of shares issued in the year under review changed as follows:

Average number of shares issued	12,806
Amount on December 31	27,470
Additions as of December 30	14,745
Amount on January 1, 2010	12,725
in 1.000	2011

In the previous year, earnings per share came to a 0.21 on the basis of the average number of shares outstanding in that year (12,806,159).

6.10 Dividend per share

Amounts available for payment as dividends are based on the net profit/loss for the year of Lloyd Fonds AG, which is calculated in accordance with German GAAP (HGB).

As in the previous year, no dividend will be distributed in 2011.

7 Notes on the consolidated balance sheet

7.1 Property, plant and equipment

Analysis of carrying amounts:

			Other
		Buildings	equipment, operating and
		on leasehold	business
	Note	land	equipment	Total
in Ta
Amount on January 1, 2010
Historical cost		543	2,048	2,591
Cumulative depreciation		-251	-1,213	-1,464
Net carrying amount		292	835	1,127
2010 financial year
Opening net carrying amount		292	835	1,127
Additions		–	172	172
Currency translation differences		–	4	4
Disposals		-20	-121	-141
Depreciation	6.4	-43	-243	-286
Currency translation differences		20	107	127
Cumulative depreciation on the disposals		249	754	1,003
Closing net carrying amount
Amount on December 31, 2010		523	2,103	2,626
Historical cost		-274	-1,349	-1,623
Cumulative depreciation		249	754	1,003
Net carrying amount
2011 financial year		249	754	1,003
Opening net carrying amount		–	47	47
Additions		–	1	1
Currency translation differences		–	-75	-75
Disposals	6.4	-43	-205	-248
Depreciation		–	75	75
Closing net carrying amount		206	597	803
As of December 31, 2011
Historical cost		523	2,076	2,599
Cumulative depreciation		-317	-1,479	-1,796
Net carrying amount		206	597	803

7.2 Intangible assets

Analysis of carrying amounts:

	Note	Intangible assets
in Ta
Amount on January 1, 2010
Historical cost		14,072
Cumulative amortization and impairments		-12,861
Net carrying amount		1,211
2010 financial year
Opening net carrying amount		1,211
Disposals		-44
Changes to consolidated companies		-5,905
Amortization	6.4	-458
Changes to consolidated companies		5,905
Cumulative depreciation on the disposals		45
Closing net carrying amount		754
Amount on December 31, 2010
Historical cost		8,123
Cumulative amortization and impairments		-7,369
Net carrying amount		754
2011 financial year
Opening net carrying amount		754
Additions		4
Amortization	6.4	-352
Closing net carrying amount		406
As of December 31, 2011
Historical cost		8,127
Cumulative amortization and impairments		-7,721
Net carrying amount		406

Intangible assets primarily comprise the trust agreements referred to in Note 2.6, which have a carrying amount of Ta 332 as of December 31, 2011 (previous year Ta 498). Scheduled amortization for 2011 stands at Ta 166 (previous year: Ta 166) and are reported in Item 6.4 Depreciation, amortization and impairments of the income statement.

7.3 Investments in associates

Analysis of investments in associates:

	2011	2010
in Ta
Beginning of year	16,020	16,680
Additions	1,079	1,229
Impairments	-25	–
Reversal of impairments	300	–
Disposals	-61	-991
Shares of profit assigned	-494	-1,056
Dividends	-5,327	–
Other comprehensive income (recorded in equity)	-385	395
Reclassifications	-14	-237
End of year	11,093	16,020

Additions relate in particular to the increase in the carrying amount of investments in two shipping entities (Ta 949) and the acquisition of shares in Feedback AG, Hamburg (Ta 130).

The disposals chiefly relate to the dissolution of management entities.

The dividends received in the year under review result from the determination of profit in accordance with German commercial law for two ship entities and are matched by a corresponding drop in the liabilities to related parties recorded in the consolidated financial statements.

In 2011, a share of losses of associates of Ta 122 was not recorded as the carrying amount of the investments concerned had already been written off in full. The cumulative unrealized share of losses in associates stood at Ta 1,830 (previous year Ta 1,920) as of December 31, 2011.

The aggregated financial information on the material associates can be summarized as follows:

	2011	2010
in Ta
Assets	138,916	156,457
Liabilities	104,686	106,279
Revenues	24,078	24,314
Net profit or loss for the period	-4,009	-1,892

The amounts reported are based in some cases on provisional figures for the entities concerned. As of the balance sheet date, the share of associates' contingent liabilities came to around a 2.6 million. (previous year a 3.3 million).

7.4 Available-for-sale financial assets

Composition:

	Dec. 31, 2011		Dec. 31, 2010
	Number	Ta	Number	Ta
Affiliated companies	52	733	50	745
Investments	133	10,638	129	11,302
	185	11,371	179	12,047

The non-consolidated affiliated companies are shelf companies as well as limited liability companies acting as general partners for investment funds. The investments comprise 131 shares which Lloyd Fonds holds as the founding shareholder of funds which have already been initiated or are still to be initiated and two shares in secondary market funds held for sale.

Analysis of available-for-sale financial assets

Affiliated companies	2011	2010
in Ta
Beginning of year	745	730
Acquisition of subsidiaries	75	127
Disposals	-51	-75
Impairments	-52	-30
Reclassification	16	-7
End of year	733	745

Investments	2011	2010
in Ta
Beginning of year	11,302	7,002
Additions	85	574
Disposals	–	-1,069
Changes in liabilities arising from liquidity distributions	-353	-347
Impairments	-666	-388
Other comprehensive income (recorded in equity)	272	3,665
Changes to consolidated companies	–	1,621
Reclassifications	-2	244
End of year	10,638	11,302

The additions in 2011 include the limited-liability companies incorporated to act as general partners in the new investment funds initiated in the year under review. Reference should be made to Note 4.2 for details of the impairment losses of a total of Ta 718 (previous year Ta 418) and non-operating net profit/ loss (Ta 272).

7.5 Deferred income tax

Deferred income tax assets and liabilities arise from temporary differences as follows:

Total	664	607
Available-for-sale financial assets	664	607
in Ta
	liabilities	liabilities
	Deferred income tax	Deferred income tax
		Dec. 31, 2011 Dec. 31, 2010

Deferred income tax assets and liabilities are netted if there is a legally enforceable right to set off current tax assets against current tax liabilities and the deferred taxes are payable to the same tax authority.

On the basis of current knowledge, the temporary differences will be reversed as follows:

		Dec. 31, 2011 Dec. 31, 2010
in Ta
Deferred income tax assets
To be settled after more than 12 months	664	607
	664	607

Analysis of deferred income taxes:

	Note	2011	2010
in Ta
Beginning of year		-607	-71
Income/expense recognized through profit and loss	6.8	–	9
Taxes recognized in equity		-57	-545
End of year		-664	-607

Changes in deferred income tax liabilities in the current year ignoring the netting of open items due to the same tax authority are as follows:

Deferred income tax liabilities	Amount on January 1	Recognized in profit and loss	Recognized in equity	Amount on December 31
in Ta
2010
Investments in associates	-51	51	–	–
Available-for-sale financial assets	-62	–	-545	-607
	-113	51	-545	-607
2011
Available-for-sale financial assets	-607	–	-57	-664
	-607	–	-57	-664

As of the balance sheet date, preliminary calculations indicate the existence of unused corporate tax losses of around a 18 million and unused trade tax losses of around a 12 million for which no deferred income tax assets are recognized. In addition, no deferred income taxes were recognized for deductible temporary differences of around a 3 million.

7.6 Trade and other receivables

Composition:

		Dec. 31, 2011 Dec. 31, 2010
in Ta
Current receivables
Receivables from issuing business	3,563	4,339
Receivables from trusteeship	997	1,657
Other receivables and assets	1,528	372
	6,088	6,368

Compared with the previous year, trade and other receivables were down by a total of Ta 280. The decline in receivables from fund initiation business and trusteeship management is chiefly due to impairments and irretrievable receivables of Ta 1,569.

Receivables from fund initiation business reported as of December 31, 2011 chiefly break down into Ta 1,359 (previous year Ta 2,273) from the shipping segment, Ta 990 (previous year Ta 111) from aircraft funds and Ta 940 (previous year nil) from the energy segment.

The increase in other receivables and assets is chiefly due to the payment of contributions by the existing shareholders of Ta 778 in connection with the equity issue and the absorption of costs incurred by a fund entity.

7.7 Receivables from related parties

Composition:

		Dec. 31, 2011 Dec. 31, 2010
in Ta
Current receivables
Receivables from associates	2,316	1,085
Receivables from non-consolidated subsidiaries	64	40
	2,380	1,125

Receivables from related parties primarily comprise the current loans granted to associates (Ta 1,855) and other receivables (Ta 461) from companies in which the Lloyd Fonds Group holds material shares.

7.8 Cash and cash equivalents

Reference should be made to Note 8.3 for the breakdown of cash and cash equivalents of Ta 16,947 (previous year Ta 11,539).

7.9 Equity

Movements in the Lloyd Fonds Group's consolidated equity are set out in the statement of changes in equity.

7.9.a Share capital

At the extraordinary shareholder meeting on December 5, 2011, a resolution was passed authorizing the Company to increase the share capital by up to a 15 million by issuing new shares with indirect pre-emptive subscription rights for the existing shareholders. The equity issue of Ta 14,745 from the exercise of the subscription rights was entered in the commercial register on December 30, 2011.

As of December 31, 2011, the share capital consists of 27,469,927 (previous year 12,725,367) ordinary bearer shares with no par value, each with a nominal value of a 1.00. As of the balance sheet date, all shares were paid up in full. The capital contribution of the existing shareholders of Ta 778 had been paid in as of the balance sheet date but not yet credited to Lloyd Fonds AG's bank account. Reference should be made to Note 6.9 as well as the statement of changes in equity for movements in the shares outstanding.

The Articles of Incorporation are dated December 23, 2011. Lloyd Fonds AG shares are traded in the regulated market (Prime Standard segment) of the Frankfurt Stock Exchange under the securities code number 617487.

Authorized capital

The Management Board is authorized with the Supervisory Board's approval to increase the Company's share capital on or before June 9, 2013 by a total of up to a 6,362,000 by issuing new no-par-value bearer shares on a cash or non-cash basis once or repeatedly.

Contingent capital

In accordance with § 4 (3) of the articles of incorporation, the capital of Lloyd Fonds AG was increased by a 441,300.00 on a contingent basis in connection with the staff participation program 2005. Following the expiry of the program in fiscal 2009, no convertible bonds are in circulation any longer and no new convertible bonds can be issued. The condition imposed on the contingent capital increase can no longer occur, which means that the provision of Article 4 (3) of the articles of incorporation has become obsolete.

Share of voting rights as of December 31, 2011

Disclosures in accordance with Section 25 (1) of the German Securities Trading Act

The following persons notified us pursuant to Section 21 (1) and Section 41 (4a) of the German Securities Trading Act that they held the following shares in our Company:

Shareholder	Date	Change Threshold	Allocation in accordance with Section 22 (1) of the German Securities Trading Act
ACP Funds V LLC, Delaware, USA	December 30, 2011	Thresholds exceeded: 3%, 5%, 10%,15%, 20%, 25%, 30%	49.9%, of which: AMA Capital Partners LLC, New York, USA: 49.9%
B&P-T Treuhandgesellschaft mbH, Hamburg	December 30, 2011	Thresholds dropped below: 20%, 15%	10.19%, of which: Revisions- und Treuhandgesellschaft Brinkmann & ­Partner Steuerberatungsgesellschaft mbH, Hamburg: 10.19% M r. Bertold Brinkmann, Hamburg: 10.19%
Wehr Schiffahrts KG, Hamburg	December 30, 2011	Thresholds dropped below: 5%	3,29%, of which: Verwaltung Wehr Schiffahrtsgesellschaft mbH, Hamburg: 3,29% Herr Jürgen Peter Wehr, Hamburg: 3,29%
VEM A ktienbank AG, M unich	December 30, 2011	Thresholds exceeded: 3%	3,78%, of which: Computershare Deutschland GmbH Co. KG, M unich: 3,78% Computershare Verwaltungs GmbH, M unich: 3,78% ACN 081 035 752 Pty. Limited, Abbotsford, Australia: 3,78%
Hans-Jürgen Wömpener, Hamburg	December 30, 2011	Thresholds dropped below: 3%	2,32%
Ernst Russ GmbH & Co. KG, Hamburg	August 2, 2011 August 8, 2011	Thresholds dropped below: 5%, 3%	2,94%, of which: Ernst Russ Verwaltungsgesellschaft mbH, Hamburg: 2,94% Herr Robert Lorenz M eyer, Hamburg: 2,94%
Dr. Torsten Teichert, Hamburg	December 30, 2011	Thresholds dropped below: 5%	3,15%, of which: Dr. Torsten Teichert, Hamburg: 0,73%

On December 23, 2011 Dr. Torsten Teichert subscribed to 200,000 new shares at a 1.00 each.

7.9.b Additional paid-in capital

The issue price of the new shares of a 1.00 equals their nominal amount. No premium was charged.

The transaction costs attributable to the new shares totaling Ta 1,236 were deducted from the additional paid-in capital in accordance with IAS 32.35 et seq.

		Reserve for	Total additi
	Premium on	convertible	onal paid-in
	shares issued	bonds	capital
in Ta
Amount on January 1, 2010	44,543	889	45,432
Amount on
December 31, 2010	44,543	889	45,432
Amount on January 1, 2011	44,543	889	45,432
Transaction costs in connection with the equity issue	-1,236	–	-1,236
Amount on December 31, 2011	43,307	889	44,196

7.9.c Retained earnings

We refer to the consolidated statement of changes in equity with regard to the composition of and changes in retained earnings.

7.10 Net asset value attributable to other limited partners

This item results from the inclusion of Premium Portfolio Austria in Lloyd Fonds' consolidated financial statements. It comprises the shares of those limited partners which are not part of the Lloyd Fonds Group. As these are puttable financial instruments, they are reported under non-current financial liabilities.

The net asset value has been assessed on the basis of a fixed effective interest rate. This is calculated as an internal interest rate on the disbursements originally forecast for the respective fund companies and ranges from 5.9% to 6.1% p. a., depending on the fund in question. Thereupon, the present values of payments to the limited partners are discounted at the effective interest rate. Remeasurement of net asset values using the effective interest rate method in 2011 gave rise to interest income of Ta 89 (previous year interest expense of Ta 362).

7.11 Trade payables and other liabilities

Composition:

		Dec. 31, 2011 Dec. 31, 2010
in Ta
Non-current liabilities
Trade payables	414	836
Current liabilities
Trade payables	2,816	1,906
Liabilities arising from operating taxes and levies	118	267
Other liabilities	11,310	2,204
	14,244	4,377
	14,658	5,213

Non-current trade payables result from the recognition of rental expenses for offices in accordance with the principles of accrual accounting (see Note 9.3). Other liabilities include the liability release compensation of Ta 10,000 and liabilities of Ta 703 (previous year Ta 1,000) towards employees, such as vacation and termination settlement claims as well as outstanding salary and bonus payments.

7.12 Financial liabilities

Composition:

		Dec. 31, 2011 Dec. 31, 2010
in Ta
Non-current financial liabilities
Lease liabilities	48	71
	48	71
Current financial liabilities
Current loans	12,602	12,882
Bank overdrafts	967	964
Lease liabilities	23	22
	13,592	13,868
	13,640	13,939

Lease liabilities relate to a server system which was acquired under a finance lease expiring on November 30, 2014. The effective interest rate as of the balance sheet stands at 6.61%.

Current financial liabilities include a loan in a nominal amount of TUS\$ 9,000 (previous year TUS-\$ 9,000) or Ta 6,956 (previous year: Ta 6,736) for financing the investment in TVO Income Portfolio L.P. The loan has a variable interest rate based on US-\$-LIBOR plus a margin of 3.00% and average liquidity costs of 0.92%. The effective interest rate as of the balance sheet stands at 4.16% (previous year 4.18%). Moreover, current financial liabilities include the liabilities arising from the finance for the target funds acquired in Premium Portfolio Austria amounting to Ta 5,622 (previous year Ta 6,149). As in the previous year, the carrying amounts of the loans match their fair value.

In addition to the aforementioned loans, current account loans of Ta 967 were outstanding as of the balance sheet date (previous year Ta 964) and are also reported within current financial liabilities.

Maturity structure of financial liabilities:

		Dec. 31, 2011 Dec. 31, 2010
in Ta
Due for settlement in less than 1 year	13,592	13,868
Due for settlement in 1–5 years	48	71
	13,640	13,939

Reconciliation of future lease payments with liabilities under finance leases:

	Settlement periods		Dec. 31, 2011
	Less than 1 year	1–5 years	Total
in Ta
Sum total of future lease payments	27	51	78
Interest component	-4	-3	-7
Liabilities from finance leases	23	48	71

7.13 Liabilities to related parties

Composition:

		Dec. 31, 2011 Dec. 31, 2010
in Ta
Liabilities to associates	1,536	7,310
Liabilities to non-consolidated subsidiaries	4	36
Liabilities to shareholders, members of the M anagement Board and the Supervisory Board	261	256
	1,801	7,602

The decline of Ta 5,774 in amounts due to related parties to Ta 1,536 is predominantly attributable to dividends received from associates as well as the effects of foreign currency translation.

7.16 Other provisions

Changes in other provisions:

	Jan. 1, 2011	Utilized	Added		Reversed Dec. 31, 2011
in Ta
Other provisions	13,963	-10,252	710	-3,650	771

Other provisions dropped by Ta 13,192 in the year under review. This is chiefly due to the reduction in the liability release compensation from Ta 13,650 to Ta 10,000. An amount of Ta 3,650 was reversed through profit and loss. The final amount of the liability release compensation of Ta 10,000 has been reclassified within other liabilities as of the balance sheet date (see Note 7.11).

As of the balance sheet date, other provisions primarily comprise amounts for pending repayments of dividends to ship entities (Ta 331). In addition, they include pending losses from subleases for office space of Ta 294, of which an amount of Ta 180 is recognized as non-current. The balance chiefly comprises amounts provided for uncertain liabilities due for settlement in less than one year.

8 Notes on the consolidated cash flow statement

8.1 Reconciliation with consolidated net profit/ loss for the year

For the purposes of the cash flow statement, consolidated profit/ loss for the year before the share of profit of associates, interest and income tax is calculated as follows:

	Note	2011	2010
in Ta
Net loss/profit from ordinary activities		-3,872	4,361
Share of profit of associates	6.6	-379	-1,978
Gains from foreign-currency translation	6.7	1,609	1,093
Losses from foreign-currency translation	6.7	-1,228	-1,196
		-3,870	2,280

8.2 Other non-cash transactions

Composition:

	Note	2011	2010
in Ta
Unrealized foreign-currency gains/losses		-481	704
Impairments on receivables and unrecoverable receivables	6.5	1,683	1,631
Income from the reversal of provisions	6.5	-3,650	-1,548
Derecognition of liabilities	6.5	-319	-897
Income from reversal of ­impairments	6.5	-39	-1,044
		-2,806	-1,154

8.3 Composition of cash and cash equivalents

Composition for the purposes of the cash flow statement:

		Dec. 31, 2011 Dec. 31, 2010
in Ta
Cash in hand	3	2
Cash at banks	16,944	11,537
Cash at banks subject to drawing ­restrictions	-7	-287
Bank overdrafts	-967	-964
	15,973	10,288

The cash at banks subject to drawing restrictions chiefly comprises rental deposits received.

9 Other disclosures

9.1 Related party disclosures

Related parties comprise companies or individuals which control the Lloyd Fonds Group or exert significant influence on it or which are controlled by the Lloyd Fonds Group or on which it exerts significant influence. The situation applicable on the balance sheet date in question is decisive in this respect.

9.1.a Associates

Sales with associates:

	2011	2010
in Ta
anagement fees	39	–
Income from private placement	–	842
	39	842

Analysis of loans to associates:

	2011	2010
in Ta
Beginning of year	418	175
Loans granted in the current year	1,342	820
Loan repayments received	-7	-666
Interest charged	117	55
Reclassifications	–	-31
Impairments and derecognitions	-15	-15
Reversal of impairments	–	38
Exchange rate gains	–	42
End of year	1,855	418

The loans granted to associates were subject to interest of between 4.0% and 20.0% (previous year between 4.0% and 12.0%).

Please refer to Note 7.7 for details of outstanding receivables from the above services as of the balance sheet date. The outstanding liabilities to associates referred to in Note 7.13 primarily result from outstanding limited-partnership capital contributions.

No interim profit or loss requiring elimination arose from transactions with associates in the periods shown.

9.1.b Affiliated companies

Receivables outstanding from affiliated companies are listed in Note 7.7.

9.1.c Related parties

The Group's Management Board comprised the following members as of December 31, 2011:

• Mr Dr. Torsten Teichert, CEO
• Mr Michael F. Seidel, CFO (until January 31, 2012)

Michael F. Seidel was chairman of the Supervisory Board of Feedback AG, Hamburg, until April 10, 2012 and member of the Advisery Board of KALP GmbH, Böel.

Dr. Joachim Seeler was appointed to the Management Board effective February 1, 2012. He is additionally the duty chairman of the Supervisory Board of Olympus Europa Holding GmbH, Hamburg.

Compensation paid to members of the Management Board relates to the following services due for short-term settlement:

2011	Fixed	Variable	Additional benefits	Total
in Ta
Dr. Torsten Teichert	350	122	19	491
ichael F. Seidel	300	98	37	435
	650	220	56	926
			Additional
2010	Fixed	Variable	benefits	Total
in Ta
Dr. Torsten Teichert	350	215	21	586
ichael F. Seidel	300	190	28	518

650 405 49 1,104

At the extraordinary shareholder meeting held on December 5, 2011, a resolution was passed to increase the number of members on the Supervisory Board from three to six.

Accordingly, the members of the Supervisory Board in the year under review were as follows:

• Prof. Dr. Eckart Kottkamp, consultant (Chairman)
• Dr. Thomas Duhnkrack, management consultant, (Deputy Chairman)
• Mr. Gunther Bonz, General Manager
• Mr. Paul Matison Leand Jr., Businessman, CEO of AMA Capital Partners LLC (from December 30, 2011)
• Mr. Jens Birkmann, Businessman, Managing Director of AMA Capital Partners LLC (from December 30, 2011)
• Mr. Rodney M. Rayburn, Investment Analyst (from December 30, 2011)

Prof. Dr. Kottkamp is a member of the supervisory board of Basler AG, Ahrensburg, and KROMI Logistik AG, Hamburg Dr. Thomas Duhnkrack is a member of the supervisory board of BCG Baden-Baden Cosmetics Group AG, Baden-Baden and Hauck & Aufhäuser Privatbankiers KGaA, Frankfurt. Gunther Bonz is a member of the supervisory board of DAKOSY Datenkommunikationssystem AG, Hamburg. Paul M. Leand Jr. is the CEO of AMA Capital Partners LLC, New York/USA and a member of the following domestic and non-domestic companies:

• Ship Finance International Ltd., Hamilton, Bermuda
• Golar LNG Partners LP, Hamilton, Bermuda
• SeaCo. Ltd., Hamilton, Bermuda
• GE Seaco SRL, Bridgetown, Barbados

In addition to fixed compensation in accordance with Article 14 (1) of the articles of incorporation, the Supervisory Board is entitled to variable remuneration. This compensation equals 0.05 percent of the consolidated net profit after tax calculated in accordance with the International Financial Reporting Standards (IFRS) for the previous year. The chairman of the Supervisory Board receives twice and the deputy chairman of the Supervisory Board oneand-a-half times the aforementioned amount.

Compensation breaks down as follows in 2011 and 2010:

2011	Fixed	Variable	Total
in Ta
Prof. Dr. Eckart Kottkamp	20	–	20
Dr. Thomas Duhnkrack	15	–	15
Gunther Bonz	10	–	10
Hans-Bernd vor dem Esche	–	–	–
Albert Lundt	–	–	–
	45	–	45
2010	Fixed	Variable	Total
in Ta
Prof. Dr. Eckart Kottkamp	20	2	22
Dr. Thomas Duhnkrack	3	–	3
Gunther Bonz	6	1	7
Hans-Bernd vor dem Esche	12	2	14
Albert Lundt	4	1	5

The Supervisory Board members Paul M. Leand, Jens Birkmann and Rodney M. Rayburn waived proportionate compensation for 2011.

As in the previous year, compensation payable to the members of the Supervisory Board is recognized as liabilities to shareholders, members of the Management Board and members of the Supervisory Board.

As of the balance sheet date, Dr. Torsten Teichert held 3.15% of Lloyd Fonds AG's share capital. Parties related to members of the Management Board held 0.48% of the Company's share capital in the year under review. In the previous year, members of the Management Board and parties related to them held 6.26% of the Company's share capital.

9.2 Contingencies

Contingencies comprise placement guarantees for equity to be placed, guarantees for advance and equity bridge finance, bank guarantees, guarantees for interest and currency hedges and increased liable amounts. Fixed-liability guarantees are recognized only in an amount reflecting the outstanding value of the principal debt. Including the settlement claims under joint and severable obligations towards third parties of Ta 37,498 (previous year Ta 57,001), contingencies came to a total of Ta 86,128 as of December 31, 2011 (previous year Ta 97,126).

Maturity periods of contingencies:

2011	Liability volume	Settlement claims	Net liability volume
in Ta
Less than one year	87,993	-37,498	50,495
Between one and five years	150	–	150
ore than five years	–	–	–
Unlimited	35,483	–	35,483
	123,626	-37,498	86,128
2010	Liability volume	Settlement claims	Net liability volume
in Ta
Less than one year	116,618	-57,001	59,617
Between one and five years	959	–	959
ore than five years	150	–	150
Unlimited	36,400	–	36,400
	154,127	-57,001	97,126

In the period between the signing of the bank agreement and the end of the year, 14 (previous year 12) of the call options were exercised by the bank for third parties. Accordingly, Lloyd Fonds or one of its subsidiaries was no longer a shareholder in these single-ship entities. As a result, it no longer had any access to their bank accounts or amounts received under loans and is no longer receiving any information from the creditor banks (banking confidentiality). Accordingly, we had no access to information on any change in the existing finance. The exercise of the call options did not have any influence on the collateral pledged to the creditor banks. In particular, it did not prejudice the claims held by the creditor banks under the bank agreement against Lloyd Fonds AG for provision of equivalent replacement collateral after the predelivery finance is replaced by postdelivery finance. As is the case with the existing collateral, recourse may only be taken to the replacement collateral in the event of the bank agreement failing. Thus, regardless of the exercise of the call options after the expiry of the predelivery finance, for which Lloyd Fonds AG is jointly and severally liable with the co-shareholder, there theoretically existed liability for the postdelivery finance which had previously not accrued to Lloyd Fonds AG. As management assumes in the light of the new circumstances that recourse is extremely unlikely to be taken to the Company, the possible claims held by the banks as of the balance sheet date are no longer reported within contingencies. Payment of the liability release compensation in January 2012 will result in a reduction in the volume of liabilities to Ta 13,534.

A purchase price guarantee of Ta 15,500 (previous year Ta 0) was issued in favor of a real estate fund, resulting in maximum liability of Ta 10,086 as of the balance sheet date. This liability is declining steadily in line with progress in placing the fund and as of the date of the consolidated financial statements stood at Ta 4,398.

The real estate fund is still in the placement phase. Delivery of the investment asset is scheduled for May 2012. Arrangements have been made for bridge finance of a 2.5 million to be provided. In addition, Lloyd Fonds AG has granted a loan to the fund entity of a 2.5 million to finance the remaining shortfall in the purchase price of the asset. As a result, a liquidity shortfall has arisen for Lloyd Fonds AG. Its going-concern status will be at risk if it is not able to find any alternative sources of finance to close this gap.

As part of trusteeship business, shares of Ta 1,648,096 (previous year Ta 1,600,278) are managed on the Company's own behalf but for the account of various trustors. In addition, trust accounts of Ta 6,528 (previous year Ta 16,157) are maintained on the Company's own behalf but for the account of various trustors.

Lloyd Treuhand has in some cases been entered in the commercial register as the limited partner in trust for subscribers with the corresponding liable amount attributable to such subscribers. In accordance with Sections 171, 172 IV of the German Commercial Code, Lloyd Treuhand is fundamentally liable for any liquidity surpluses which have been distributed but are not backed by profits. The amount by which the distribution is less than the liable amount entered in the commercial register may be subject to reimbursement by Lloyd Treuhand. Under the terms of the trusteeship contract, Lloyd Treuhand is in turn entitled to recover this amount from the subscriber in question. The Management Board does not consider the possible outflow of resources as a result of such recourse claims to be likely.

9.3 Lessee obligations under operating leases

The Group leases office space, motor vehicles and copiers under operating leases.

Analysis of obligations under leases:

		Dec. 31, 2011 Dec. 31, 2010
in Ta
Office space	7,600	8,569
otor vehicles	298	242
iscellaneous	59	31
	7,957	8,842

Terms of the future cumulative minimum lease payments:

		Dec. 31, 2011 Dec. 31, 2010
in Ta
Due for settlement in less than 1 year	1,120	1,091
Due for settlement between 1 and 5 years	4,037	3,987
Due for settlement in more than 5 years	2,800	3,764

7,957 8,842

In the year under review, minimum lease payments of Ta 1,520 (previous year Ta 1,199) were recognized as expense.

Lloyd Fonds AG and Lloyd Treuhand GmbH leased new office premises in contracts dated August 5, 2005. The lease commenced on December 1, 2006 The contracts have a non-terminable period of ten years plus two renewal options available to tenants of five years each. The first year of use was rent-free. Total expenditure has been deferred on a straight-line basis over the minimum term of 120 monthly rental installments. The renewal options are not included in the minimum rental payments. This results in minimum monthly lease payments of Ta 80 (previous year Ta 69).

9.4 Application of the exemption provided for in Section 264 (3) of the German Commercial Code.

Lloyd Treuhand GmbH, Hamburg, makes use of the exemption provided for in Section 264 (3) of the German Commercial Code.

9.5 Disclosures pursuant to Section 315a of the German Commercial Code

9.5.a German Corporate Governance Code (GCGC)

The Management Board and Supervisory Board of Lloyd Fonds AG issued the declaration of conformance in accordance with Section 161 of the German Stock Corporation Act in April 2012. The wording of this declaration is available permanently at the Group's website (www.lloydfonds.de).

9.5.b Auditors' fees

Fees payable to the auditors of the consolidated financial statements in accordance with Section 314 (1) No. 9 of the German Commercial Code:

	2010
105	90
18	18
2	9
125	117
	2011

9.5.c Consolidated companies and shares held by the Group (Section 313 (2) of the German Commercial Code)

The disclosures on the consolidated companies are set out in Note 2.2.b.

Affiliated companies which are not included in the consolidated financial statements (Section 313 (2) No. 1 of the German Commercial Code):

Company	Share held by Group
LF Open Waters Cash GmbH, Hamburg	100.0%
Erste Lloyd Portfolio Verwaltung GmbH, Hamburg	100.0%
Erste LF TradeOn Portfolio Verwaltung GmbH, Hamburg	100.0%
Zweite LF Portfolio Verwaltung GmbH, Hamburg	100.0%
Zweite Lloyd Fonds TradeOn Portfolio Verwaltung GmbH, Hamburg	100.0%
Dritte Lloyd Fonds TradeOn Portfolio Verwaltung GmbH, Hamburg	100.0%
Lloyd Fonds Energie Europa Verwaltungs GmbH, Hamburg	100.0%
Verwaltung LF Immobiliengesellschaft mbH, Hamburg	100.0%
Lloyd Fonds Verwaltungs- und Beteiligungsgesellschaft mbH, Hamburg	100.0%
LF Beteiligungsgesellschaft mbH, Hamburg	100.0%
Verwaltung LloFo Schifffahrtsgesellschaft mbH, Hamburg	100.0%
Erste LF Immobiliengesellschaft mbH & Co. KG, Hamburg	90.0%
Zweite LF Immobiliengesellschaft mbH & Co. KG, Hamburg	90.0%
Dritte LF Immobiliengesellschaft mbH & Co. KG, Hamburg	90.0%
Verwaltung Windpark COPPAN Z GmbH, Hamburg	75.0%
Verwaltung LF-Flottenfonds GmbH, Hamburg	100.0%
Verwaltung Lloyd Fonds Hotel Fleesensee GmbH, Hamburg	100.0%
Zweite Verwaltung Lloyd Fonds Hotelportfolio GmbH, Hamburg	100.0%
Verwaltung Lloyd Fonds Hotel Leipzig Nikolaikirche GmbH, Hamburg	100.0%
Verwaltung Lloyd Fonds Universitätsgebäude Bamberg GmbH, Hamburg	100.0%
Verwaltung Lloyd Fonds Hochschulportfolio Bayern GmbH, Hamburg	100.0%
Verwaltung LF Bürogebäude Nürnberg Rudolphstraße GmbH, Hamburg	100.0%

Company	Share held by Group
Verwaltung der Lloyd Fonds Gesellschaft für Immobilienbeteiligungen mbH, Hamburg	100.0%
Vierte LF Immobiliengesellschaft mbH & Co. KG, Hamburg	100.0%
Erste Verwaltung Lloyd Fonds Holland GmbH, Hamburg	100.0%
Zweite Verwaltung Lloyd Fonds Holland GmbH, Hamburg	100.0%
Fünfte Verwaltung Lloyd Fonds Holland GmbH, Hamburg	100.0%
Verwaltung Lloyd Fonds Immobilienportfolio Hamburg/ Sylt GmbH, Hamburg	100.0%
Verwaltung Lloyd Fonds Vermögensgarant GmbH, Hamburg	100.0%
Verwaltung Lloyd Fonds Immobilienportfolio Köln GmbH, Hamburg	100.0%
1. M ITOMA Schiffsneubau GmbH, Hamburg	100.0%
3. M ITOMA Schiffsneubau GmbH, Hamburg	100.0%
2. M ITOMA Schiffsneubau GmbH, Hamburg	100.0%
4. M ITOMA Schiffsneubau GmbH, Hamburg	100.0%
1. M ITOMA Schiffsneubau GmbH & Co. KG, Hamburg	100.0%
2. M ITOMA Schiffsneubau GmbH & Co. KG, Hamburg	100.0%
3. M ITOMA Schiffsneubau GmbH & Co. KG, Hamburg	100.0%
4. M ITOMA Schiffsneubau GmbH & Co. KG, Hamburg	100.0%
Verwaltung "Air Fuhlsbüttel/Air Finkenwerder" Flugzeugfonds GmbH, Hamburg	100.0%
Verwaltung Lloyd Fonds Air Portfolio 3 GmbH, Hamburg	100.0%
Lloyd Fonds Kreuzfahrt I GmbH & Co. KG, Hamburg	91.7%
Verwaltung Lloyd Fonds Kreuzfahrt I GmbH, Hamburg	100.0%
Verwaltung Lloyd Fonds Britische Kapital Leben VIII. GmbH, Hamburg	100.0%
Verwaltung M S "CCNI ARAU CO" Schiffahrtsgesell schaft mbH, Hamburg	60.0%
Lloyd Fonds Canada Real Estate Inc., Toronto/Canada	100.0%
Lloyd Fonds UK VIII Limited, Worcestershire	100.0%
Lloyd Fonds Nürnberg Rudolphstraße GmbH & Co. KG, Hamburg	95.2%
Lloyd Fonds Universitätsgebäude Bamberg GmbH & Co. KG, Hamburg	95.2%
Lloyd Fonds Hochschulportfolio Bayern GmbH & Co. KG, Hamburg	95.2%
Verwaltung Lloyd Fonds A380 Flugzeugfonds GmbH, Hamburg	100.0%
LF Kalp Beteiligungs GmbH, Hamburg	100.0%
LF Kalp Invest GmbH & Co. KG, Hamburg	100.0%

Associates (Section 313 (2) No. 2 of the German Commercial Code):

Company	Share held by Group
Feedback AG, Hamburg	40.1%
KALP GmbH, Böel	45.1%
TVO Income Portfolio, LP, El Paso, USA	97.0%
Fünfte LF Immobiliengesellschaft mbH & Co. KG, Hamburg	44.9%
Sapian GmbH & Co. KG, Hamburg	50.0%
Subic GmbH & Co. KG, Hamburg	50.0%
Air M anagement GmbH, Schöneck/Hessen	50.0%
Beteiligung EM ILIA SCHULTE Shipping GmbH, ­Hamburg	50.0%
Beteiligung HENRY SCHULTE Shipping GmbH, ­Hamburg	50.0%
Beteiligung M S ANNA BELLE SCHULTE Shipping GmbH, Hamburg	50.0%
Beteiligung M S "ANN INA SCHULTE " Shipping GmbH, Hamburg	50.0%
Beteiligung M S "ANTON IA SCHULTE " Shipping GmbH, Hamburg	50.0%
Beteiligung M S CAROL IN SCHULTE Shipping GmbH, Hamburg	50.0%
Beteiligung M S "FRIDA SCHULTE " Shipping GmbH, Hamburg	50.0%
Beteiligung M S "HELENA SCHULTE " Shipping GmbH, Hamburg	50.0%
Beteiligung M S "JULIA SCHULTE " Shipping GmbH, Hamburg	50.0%
Beteiligung M S "LAURA SCHULTE " Shipping GmbH, Hamburg	50.0%
Beteiligung M S "LISA SCHULTE " Shipping GmbH, Hamburg	50.0%
Beteiligung M S "MART HA SCHULTE " Shipping GmbH, Hamburg	50.0%
Beteiligung M S "MAX IM ILIAN SCHULTE " Shipping GmbH, Hamburg	50.0%
Beteiligung M S "PAULA SCHULTE " Shipping GmbH, Hamburg	50.0%
Beteiligung M S "PATR ICIA SCHULTE " Shipping GmbH, Hamburg	50.0%
Beteiligung M S "SARA H SCHULTE " Shipping GmbH, Hamburg	50.0%
Beteiligung M S "SOFIA SCHULTE " Shipping GmbH, Hamburg	50.0%

Company	Share held by Group
Beteiligung M S "TAT IANA SCHULTE "
Shipping GmbH, Hamburg	50.0%
Beteiligung M S "VICTOR IA SCHULTE " Shipping GmbH, Hamburg	50.0%
Cape Antigua Shipping Company Limited, Limassol/Cyprus	50.0%
Cape Avon Shipping Company Limited, Limassol/Cyprus	50.0%
Erste Grove Beteiligungs GmbH, Hamburg	50.0%
Green Bay Shipping Limited, Limassol, Cyprus	50.0%
Green Grove Shipping Limited, Limassol, Cyprus	50.0%
IGB Lloyd Fonds Real Estate Beteiligungsgesellschaft mbH, Hamburg	50.0%
Lloyd Fonds Britische Kapital Leben GmbH, Wörgl, Austria	50.0%
Lloyd Fonds Britische Kapital Leben II. GmbH, Wörgl, Austria	50.0%
Lloyd Fonds Britische Kapital Leben III. GmbH, Wörgl, Austria	50.0%
Lloyd Fonds Britische Kapital Leben IV. GmbH, Wörgl, Austria	50.0%
Lloyd Fonds Britische Kapital Leben V. GmbH, Wörgl, Austria	50.0%
Lloyd Fonds Britische Kapital Leben VI. GmbH, Wörgl, Austria	50.0%
Lloyd Fonds Britische Kapital Leben VII. GmbH, Wörgl, Austria	50.0%
Verwaltung M S "BAHAMA S" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "CHICAGO" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "LAS VEGAS" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "MEMP HIS" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "M IAM I" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Beteiligung M S "VALENT INA SCHULTE " Shipping GmbH, Hamburg	50.0%
Northern Valour Shipping Limited, Limassol/Cyprus	50.0%
Schelde Verwaltungsgesellschaft mbH, Haren	50.0%
Verwaltung "BAVARIAN SUN" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung "CHEMTRAN S RAM SEY" Schifffahrtsgesellschaft mbH, Hamburg	50.0%

Company	Share held by Group
Verwaltung "CHEMTRAN S ROY " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung "CHEMTRAN S RYE " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung "COLON IAN SUN" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung Global Partnership I GmbH, Aschheim	50.0%
Verwaltung M S "ADRIAN" Schiffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "ALMAT HEA" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "BARBADOS" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "BERMU DA" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "BONA IRE" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "CHRISTIANE SCHULTE " GmbH, Hamburg	50.0%
Verwaltung M S "COMMAN DER" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "DELO S" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "FERNAN DO" Schifffahrtsgeselllschaft mbH, Hamburg	50.0%
Verwaltung M S "LLOY D DON GIOVANN I" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "LLOY D DON CARLO S" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "LLOY D DON PA SCUALE " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "LLOY D EUROPA " Schifffahrtsgesellschaft mbH, Burg	50.0%
Verwaltung M S "LLOY D HELSINKI" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "LLOY D PAR SIFAL" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "LLOY D STO CKHOLM " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "MAN HATTAN " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "MET HAN" Schiffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "NATAL " Schifffahrtsgesellschaft mbH, Hamburg	50.0%

Company	Share held by Group
Verwaltung M S "NEL SON" Schifffahrtsgesellschaft mbh, Hamburg	50.0%
Verwaltung M S "NEWARK" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "NOR DPACIFIC" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "NORO " Schifffahrtsgesellschaft mbh, Hamburg	50.0%
Verwaltung M S "Samaria" Schiffahrtsgesellschaft mbH, Hamburg	30.0%
Verwaltung M S "SAN ANTON IO" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "SAN PA BLO" Schifffahrtsgesellschaft mbh, Hamburg	50.0%
Verwaltung M S "SAN PE DRO" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "SAN RA FAEL " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "SAN VICENTE " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "Saxonia" Schiffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "Scandia" Schiffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "Scotia" Schiffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung "M S Sophie" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "TO SA SEA" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "THIRA SEA" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "VEGA FYNEN " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "VEGA GOTLAN D" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "VIRGINIA" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "Wehr Blankenese" Schiffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "Wehr Elbe" Schiffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "Wehr Koblenz" Schiffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "Wehr Nienstedten" Schiffahrtsgesellschaft mbH, Hamburg	50.0%

Company	Share held by Group
Verwaltung M S "Wehr Schulau" Schiffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung M S "Wehr Weser" Schiffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "AMER ICAN SUN" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "AT HENS STAR " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "CANA DIAN SUN" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "CARIBBEAN SUN" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "CHEMTRAN S RHINE" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "Green Point" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "HAM BURG STAR " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "LON DON STAR " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "MEX ICAN SUN" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "NEW YOR K STAR " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "ST. JACOBI" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "TAPAT IO" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "TEAM JUPITER " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung MT "TEAM NEPTUN " Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung NA DINE Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Verwaltung Todito Schiffsneubau GmbH, Hamburg	50.0%
Verwaltung M S "BENITO" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Windpark Breberen GmbH, Gangelt	50.0%
Zweite Beteiligung M S "ANN INA SCHULTE " Shipping GmbH, Hamburg	50.0%
Zweite Beteiligung M S "M aria Schulte" Shipping GmbH, Hamburg	50.0%

Company	Share held by Group
Zweite Beteiligung M S "PHILIPPA SCHULTE " Shipping GmbH, Hamburg	50.0%
Zweite Beteiligung M S "SOFIA SCHULTE " Shipping GmbH, Hamburg	50.0%
Zweite Beteiligung M S "VALENT INA SCHULTE " Shipping GmbH, Hamburg	50.0%
Zweite Grove Beteiligungs GmbH, Hamburg	50.0%
Verwaltung M S "BAHIA" Schifffahrtsgesellschaft mbH, Hamburg	50.0%
Vierte Verwaltung Lloyd Fonds Holland GmbH, Hamburg	49.0%
Verwaltung SUBIC/SAPIAN GmbH, Hamburg	50.0%
Dritte Verwaltung Lloyd Fonds Holland GmbH, Hamburg	49.0%
Erste Grove Schiffahrts GmbH & Co. KG, Hamburg	54.6%
Zweite Grove Schiffahrts GmbH & Co. KG, Hamburg	54.6%
S "BAHIA" Schifffahrtsgesellschaft mbH & Co. KG, Hamburg	0.4%
S "BENITO" Schifffahrtsgesellschaft mbH & Co. KG, Hamburg	0.4%
S "MART HA SCHULTE " Shipping GmbH & Co. KG, Hamburg	50.0%
S "PAULA SCHULTE " Shipping GmbH & Co. KG, Hamburg	50.0%
S "SAMAR " Schifffahrtsgesellschaft mbH & Co. KG, Hamburg	50.0%
S "SARAN GANI" Schifffahrtsgesellschaft mbH & Co. KG, Hamburg	50.0%
SIATON GmbH & Co. KG, Hamburg	50.0%
SILAGO GmbH & Co. KG, Hamburg	50.0%
SIMARA GmbH & Co. KG, Hamburg	50.0%
SURIGAO GmbH & Co. KG, Hamburg	50.0%
S "SOFIA SCHULTE " Shipping GmbH & Co. KG, Hamburg	50.0%

The disclosures on associates are set out in Notes 2.2.c and 9.1.a.

9.5.d Other disclosures

Please refer to Note 6.3 for details of the average number of employees. Details of the active and former members of the Management Board and the Supervisory Board can be found in Note 9.1.c.

9.6 Events after the balance sheet date

On January 10, 2012, the reduced liability release compensation of a 10.0 million, which was payable by February 15, 2012 under the bank agreement entered into in April 2010, was duly paid to the banks.

Effective January 31, 2012, Michael F. Seidel left the Company subject to mutual agreement with the Supervisory Board. Dr. Joachim Seeler was appointed to the Management Board effective February 1, 2012.

No other events materially affecting the Group's net assets, financial position or results of operations occurred after the balance sheet date.

Hamburg, April 27, 2012.

The Management Board

Dr. Torsten Teichert Dr. Joachim Seeler

RESPONSIBILITY STATEMENT

To the best of our knowledge, and in accordance with the applicable reporting principles for financial reporting, the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the management report of the group includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal opportunities and risks associated with the expected development of the group.

Hamburg, April 27, 2012.

The Management Board

Dr. Torsten Teichert Dr. Joachim Seeler

AUDITORS' REPORT

We have audited the consolidated financial statements prepared by Lloyd Fonds AG, Hamburg, comprising the balance sheet, income statement and statement of comprehensive income, statement of changes in equity, cash flow statement, and notes as well as the Group management report for the business year from January 1 to December 31, 2011. The preparation of the consolidated financial statements and the Group management report in accordance with the International Financial Reporting Standards (IFRS), as they are to be applied in the EU, and the additional accounting provisions in accordance with Section 315a (1) HGB is the responsibility of the Company's Management Board. Our responsibility is to express an opinion on the consolidated financial statements and the group management report based on our audit.

We conducted our audit of the consolidated financial statements in accordance with Section 317 HGB [Handelsgesetzbuch – German Commercial Code] and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany – IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with the applicable principles of proper accounting 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 expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes an assessment of the financial statements of the companies included in the Group, the definition of the scope of consolidation, the accounting and consolidation principles used and the significant estimates made by the Management Board as well as evaluating the overall presentation of the consolidated financial statements and the Group management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion based on the results of our audit, the consolidated financial statements comply with IFRS as they are to be applied in the EU, the supplementary provisions of German commercial law in accordance with Section 315a (1) HGB and in the light of these provisions give a true and fair view of the net assets, financial position and results of operations of the Group. The Group management report is consistent with the consolidated financial statements and on the whole provides a suitable understanding of the Group's position and suitably presents the opportunities and risks to future development.

Without qualifying this Auditor's Opinion we refer to the disclosures the Company in no. 9.2 "Contingencies" of the notes to the consolidated financial statements and in the section "Risk Report" in the group management report. According to these disclosures the going concern status of Lloyd Fonds AG is challenged if the additional liquidity needs resulting from the loan and the guarantee for the bridge provided in connection with the Holland Utrecht fund cannot be covered.

Hamburg, April 27, 2012

TPW GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft

Roger Hönig Britta Martens Wirtschaftsprüfer Wirtschaftsprüferin

Financial calendar

	2012
Interim Report on first Q uarter/3M	10 M ay
General Annual M eeting	26 July
Interim Report on second Q uarter/6M	9 August
Interim Report on third Q uarter/9M	8 November

All dates are provisional only and subject to change without notice.

EDITOR

Lloyd Fonds AG Amelungstraße 8–10 20354 Hamburg

CONTACT

Marcel Wiskow Investor Relations

Telefon: +49 (0)40/32 56 78-0 Fax: +49 (0)40/32 56 78-99 E-Mail: ir@lloydfonds.de

PICTURE CREDITS

Lloyd Fonds AG

DETAILS

Lloyd Fonds AG's annual report for 2011 is also available as a PDF file on the Internet at www.lloydfonds.de. This English language version of the annual report is a convenience translation. In the event of any doubt, the German version is to apply.

All the brand names and trademarks used in this report are the property of their respective owners. This particularly applies to the designations DAX, SDAX und XETRA, which are registered trademarks owned by Deutsche Börse AG.

Lloyd Fonds AG · Amelungstraße 8–10 · 20354 Hamburg · Phone +49 (0)40 325678-0 · Fax +49 (0)40 325678-99 · www.lloydfonds.de