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Mobimo Holding AG

Annual Report Feb 14, 2013

933_10-k_2013-02-14_f4cb0219-bd1e-4a1f-a623-d869bf83a2aa.pdf

Annual Report

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Mobimo Group (consolidated) 2012 2011
Net rental income CHF million 79.8 76.0
Net income from revaluation CHF million 36.91 41.2
Profit on sale of trading properties CHF million 21.7 22.3
Operating result (EBIT) CHF million 117.4 121.1
Profit CHF million 76.0 80.510
Profit (attributable to the shareholders of Mobimo Holding AG) CHF million 76.3 80.510
Return on equity2 6.7% 8.5%
Profit (attributable to the shareholders of Mobimo Holding AG)
not including revaluation CHF million 48.6 49.6
Return on equity not including revaluation3 4.3% 5.2%
Commercial investment properties CHF million 1,177.2 1,133.3
Residential investment properties CHF million 380.4 335.3
Commercial development properties CHF million 328.9 288.2
Residential development properties CHF million 468.5 414.4
Total properties CHF million 2,355.0 2,171.2
Investment property vacancy rate 3.8% 3.3%
Ø Discount rate for revaluation 4.63% 4.76%
Ø Headcount (full-time basis)4 82.9 78.9
Ø Rate of interest on financial liabilities 3.0% 3.0%
Ø Residual maturity of financial liabilities Years 9.1 9.2
Equity ratio 48% 47%
Net gearing5 80% 69%
Mobimo share
No. of shares outstanding6 6,200,169 6,168,351
Earnings per share CHF 12.33 15.46
Earnings per share not including market-driven revaluation CHF 10.34 13.70
Earnings per share not including revaluation CHF 7.85 9.53
Distribution7 CHF 9.00 9.00
Nominal value per share CHF 29.00 29.00
NAV per outstanding share after options
and convertible bond8 CHF 194.25 191.41
Share price as at 31 December CHF 218.90 208.00
Dividend yield (distribution yield) 4,1% 4,3%
Payout ratio9 73% 58%
Share capital CHF million 180,1 178.9
Market capitalisation as at 31 December CHF million 1,359.1 1,283.4
Equity as at 31 December CHF million 1,201.0 1,174.2

1 Most of the positive revaluation income of CHF 36.9 million derives from operating performance. The completion of properties under construction, the development of investment properties and successful new lettings made a contribution of CHF 20.5 million.

The positive performance of the Swiss property market accounted for about a further CHF 16.4 million of the change in value

² Profit (attributable to the shareholders of Mobimo Holding AG) in relation to average equity (attributable to the shareholders of Mobimo Holding AG; equity at 1 January plus capital increase/reduction) for the period under review

³ Profit (attributable to the shareholders of Mobimo Holding AG) not including revaluation (and attributable deferred tax) in relation to average equity (attributable to the shareholders of Mobimo Holding AG; equity at 1 January plus capital increase/reduction) for the period under review

⁴ Changes in headcount, see also Note 26

⁵ Net financial liabilities to equity

⁶ No. of shares in issue 6,208,913 less treasury shares 8,744 = no. of outstanding shares 6,200,196

⁷ Distribution of paid-in capital for 2012 financial year of CHF 9 per share in accordance with proposal to Annual General Meeting of 9 April 2013. Some CHF 326 million was available for distribution of paid-in capital as at 31 December 2012.

⁸ Assuming all options granted and conversion rights are exercised

⁹ Payout ratio = distribution ÷ earnings per share

¹⁰ Profit figure includes a non-recurring, positive tax effect of CHF 5.5 million

Development property Condominiums

Zurich, "Schilf " Hinterbergstrasse 53

CONTENTS

About Mobimo 4
The company
Group structure and milestones 6
7
Board of Directors/Executive Board 8
Strategy/Portfolio 10
Share information 12
The 2012 financial year 14
Letter to Shareholders 16
Review 2012 20
Sustainability report 22
Financial report 36
Consolidated annual financial statements 38
• Consolidated balance sheet 38
• Consolidated income statement 40
• Consolidated statement of comprehensive income 41
• Consolidated statement of changes in equity
• Consolidated cash flow statement
42
43
• Notes to the consolidated annual financial statements
• Segment reporting
44
52
Property details 94
• Trading property details 94
• Geographic breakdown of trading properties 95
• Commercial property details
• Residential property details
96
104
• Details of investment properties under construction 106
• Details of properties owned and used by Mobimo 106
• Co-ownership details 106
• Breakdown of residential and commercial investment properties and
commercial development properties by economic area
108
Report of the statutory auditor on the consolidated financial
statements to the General Meeting of Mobimo Holding AG
109
Report of the valuation expert 110
EPRA key performance metrics 114
Annual financial statements of Mobimo Holding AG 116
• Balance sheet 116
• Income statement 118
• Notes to the annual financial statements
• Proposed appropriation of profit
119
122
Report of the statutory auditor to the General Meeting
of Mobimo Holding AG 123
Corporate governance 124
Corporate governance 126
• Remuneration and profit-sharing 136
Contact addresses 140

A bout MOBIMO

Development property, Investments for Third Parties Rental apartments, commercial

Dübendorf, "Hochbord" Sonnentalstrasse 10

Mobimo – a leading Swiss real estate company

Mobimo Holding AG was established in Lucerne in 1999 and has been listed on the SIX Swiss Exchange since 2005. Today Mobimo is one of the leading real estate companies in Switzerland. Following the merger with LO Holding Lausanne-Ouchy SA at the end of 2009, it now ranks as one of the biggest market players in both German-speaking and French-speaking Switzerland. Acquisitions and investments are targeted mainly in the economic areas of Zurich and Lausanne/Geneva, together with those of Basel, Lucerne/Zug, Aarau and St. Gallen.

A premium portfolio

As at 31December 2012, the real estate portfolio comprised 126 properties with a value of approximately CHF 2,355 million, which breaks down into CHF 1,558 million for investment properties and CHF 797 million for development properties. The portfolio mix is optimised on an ongoing basis, and the residential component is gradually being increased through the planning and construction of investment properties for the company's own property portfolio. The medium-term target is for office space, residential and other commercial usage to each account for around 30% of the portfolio.

Secure earnings

Around three-quarters of the property portfolio is invested in investment properties which are broadly diversified in terms of both location and use. The rentable area of 493,000 m2 provided potential rental income of some CHF 103 million p.a. as at 31 December 2012. This means that a high proportion of revenues is stable and predictable. The company's portfolio management team ensures close proximity to the market and allows the company to react swiftly to any changes in the market.

Development properties with appreciation potential

Mobimo is currently planning and realising investment properties (CHF 1,100 million)

Mobimo's business model sets it apart from its competitors.

Business model combines stable returns with growth

With a solid financing base and equity of not less than 40% of total assets, Mobimo plans, builds and maintains returnoriented investment properties and realises development properties offering attractive potential gains.

Based on its three core competencies – buying/selling, development and portfolio management – Mobimo has successfully built up a premium investment portfolio comprising commercial, industrial and residential properties and generating broad-based rental income with steady returns. A well-stocked project pipeline provides a steady supply of new investment properties to be held in the portfolio or sold to third-party investors, along with attractive condominium apartments which, when sold, will generate capital gains.

and condominium properties ( CHF 540 million) with a total investment volume of around CHF 1,650 million.

In addition to these developments, Mobimo also offers development services for third parties up to and including turn-key real estate investments for institutional and private investors. Area, site and project developments are turned into reality in a way which meets the needs of the market and is sustainable. Cooperation with partners takes a number of different forms, and is structured in line with requirements and depending on the stage reached.

Attractive dividend yield

Mobimo has consistently generated a high dividend. Since the initial public offering in 2005, CHF 9.00 has been paid out to Mobimo shareholders each year in the form of a withholding tax-exempt nominal value repayment or capital repayment.

G roup structure

Mobimo Holding AG
Share capital: CHF 180 million
Andreas Hämmerli, Thomas Stauber
Statutory auditor: KPMG AG
BoD: Urs Ledermann, Daniel Crausaz, Brian Fischer, Bernard Guillelmon, Wilhelm Hansen,
Paul Rambert, Peter Schaub, Georges Theiler
Executive Board: Dr.Christoph Caviezel, Manuel Itten, Peter Grossenbacher,
Mobimo
Management AG
Mobimo AG LO Holding
Lausanne-Ouchy SA
JJM Participations SA Immobilien Invest
Holding AG
Share capital:
CHF 0.1 million
Share capital:
CHF 72 million
Share capital:
CHF 12 million
Share capital:
CHF 6 million
Share capital:
CHF 0.15 million

M ilestones

1997

On 15 October 1997, Dr. Alfred Meili, together with private banker Karl Reichmuth and other investors, founds Mobimo AG, with its headquarters in Lucerne. The company's share capital is CHF 36 million, on top of which there is another CHF 36 million in the form of shareholder loans.

1999

Mobimo Holding AG, Lucerne, is founded on 27 December 1999. Its share capital is CHF 73 million.

2000

Under a private placement in October 2000, Mobimo Holding AG's share capital is increased to CHF 181 million.

2005

On 23 June 2005, Mobimo Holding AG is listed on the SIX Swiss Exchange following a successful IPO, involving an issue volume of CHF 112 million.

2006

On 8 June 2006, Mobimo conducts a capital increase of CHF 143 million; at the end of June 2006, share capital amounts to CHF 225 million and shareholders' equity to CHF 596 million.

2007

A further capital increase of CHF 149 million takes place on 4 June 2007. As at 30 June 2007, Mobimo's shareholders' equity stands at CHF 757 million.

2008

The newly formed Board of Directors, headed by Chairman Urs Ledermann, and the Executive Board, headed by CEO Dr. Christoph Caviezel, review the company's strategy and direction.

2009

Mobimo Holding AG's exchange offer for LO Holding Lausanne-Ouchy SA is successfully completed on 9 November 2009; the share capital is increased by CHF 27 million in order to carry out the conversion.

2010

In June 2010, Mobimo Holding AG successfully completes a CHF 175 million convertible bond issue maturing on 30 June 2014.

2011

A further capital increase of approximately CHF 193 million is conducted on 6 December 2011. Mobimo Holding AG issues 1,028,350 new registered shares, which are traded on the SIX Swiss Exchange for the first time on 7 December 2011.

f.l.t.r.

Urs Ledermann

Chairman of the Board of Directors Member of the Real Estate Committee Member of the Remuneration Committee

Georges Theiler

Vice Chairman of the Board of Directors Chairman of the Real Estate Committee Chairman of the Remuneration Committee

Peter Schaub

Member of the Board of Directors Chairman of the Audit&Risk Committee

Bernard Guillelmon

Member of the Board of Directors

Brian Fischer

Member of the Board of Directors Member of the Real Estate Committee

Daniel Crausaz

Member of the Board of Directors Member of the Audit&Risk Committee Member of the Remuneration Committee

Paul Rambert

Member of the Board of Directors Member of the Real Estate Committee

Wilhelm Hansen

Member of the Board of Directors Member of the Audit&Risk Committee Member of the Remuneration Committee

Thomas Stauber Member of the Executive Board, Head of Investments for Third Parties

Manuel Itten Member of the Executive Board, CFO

Dr. Christoph Caviezel Chairman of the Executive Board, CEO Peter Grossenbacher Member of the Executive Board, Head of Portfolio Management

Andreas Hämmerli Member of the Executive Board, Head of Development

Modell: Investment and development property

Zurich, "Am Pfingstweidpark" and "Mobimo Tower"

Qualitative growth

Mobimo strives to grow its real estate portfolio on a stepby-step basis. This growth takes place primarily through the construction of investment properties for the company's own portfolio as well as through the acquisition of individual properties or portfolios. Growth may also be achieved via company takeovers.

The decision to grow is taken when the elements of price, location and future prospects come together in such a way as to create value for shareholders. Mobimo invests in promising locations in Switzerland. We see these primarily as the economic areas of Zurich and Lausanne/Geneva, together with those of Basel, Lucerne/Zug, Aarau and St.Gallen. Investments are only made in sustainably good locations.

Good portfolio mix

Over the medium term, the investment portfolio comprises approximately one-third residential usage, one-third office usage and one-third other commercial usage.

Active portfolio management

The real estate portfolio is optimised and adjusted on an ongoing basis. Value is rigorously maintained and increased by cultivating relationships with lessees, ensuring a high level of rental occupancy, optimising costs and implementing effective marketing strategies.

Value through development

Real estate development focuses on the following areas:

  • the development and construction of new investment properties for our own portfolio
  • the continued development and optimisation of proprietary real estate holdings
  • the development, construction and sale of condominium properties
  • development and investments for third parties

Sustainability

Quality of life is expressed, inter alia, in the design of living, residential and working space. In addition to economic aspects, Mobimo also incorporates environmental and socio-cultural factors in its activities. This results in added value for the users of Mobimo properties and for shareholders.

Solid financing

Mobimo can borrow on both a short- and long-term basis. Equity should amount to at least 40% of total assets.

Profitable investment

The Mobimo share regularly generates high dividends. It is characterised by steady value growth and an attractive payout ratio.

R eal estate portfolio as at 31 december 2012

portfolio mix as at 31 december 2012 4

breakdown of portfolio by economic area 6

  • 1 Including owner occupied properties
  • ² Including commercial properties under construction (investment properties under construction) in Affoltern am Albis, Obstgartenstrasse; Horgen, Seestrasse 93 (Meilenwerk); Lausanne, Avenue d'Ouchy 4–6 and Lausanne, Les Pépinières, as own-portfolio developments
  • ³ Including residential properties under construction (investment properties under construction) in Affoltern am Albis, Obfelderstrasse;
  • Regensdorf, Schulstrasse; Zurich, Turbinenstrasse–City West Site C and Lausanne, Rue Voltaire, as own-portfolio developments
  • ⁴ Breakdown of target rental income by type of use (overall portfolio without trading properties)
  • ⁵ Other use mainly comprises car parks and ancillary uses
  • ⁶ Breakdown of fair values/carrying amounts of properties by economic area (overall portfolio)

I. Overview

No. of shares
--------------- -- -- -- --
No. of shares as at 31 December 2012 2011 2010 2009 2008
Share capital (in TCHF) 180,058 178,933 148,804 192,035 204,230
No. of registered shares issued 6,208,913 6,170,098 5,131,170 5,053,552 4,355,323
Nominal value per registered share (in CHF) 29 29 29 38 47
Of which treasury shares 8,744 1,747 1,071 4,373 10,000
No. of registered shares outstanding 6,200,169 6,168,351 5,130,099 5,049,179 4,345,323
Share data
No. of shares as at 31 December 2012 2011 2010 2009 2008
Earnings per share 12.33 15.46 13.01 14.09 10.37
Earnings per share not including revaluation 7.85 9.53 8.70 12.51 8.82
NAV per share, after options and convertible bond 194.25 191.41 190.45 180.29 177.37
Gross dividend1 9.00 9.00 9.00 9.00 9.00
Dividend yield (distribution yield) 4.1% 4.3% 4.5% 5.1% 6.4%
Payout ratio2 73% 58% 69% 64% 87%
Share price
Stock market price in CHF per share 2012 2011 2010 2009 2008
High3 228.00 222.06 190.36 159.45 158.08
Low3 194.42 185.63 158.91 105.01 114.03
Year-end price3 218.90 208.00 189.13 159.00 120.41
Average no. of shares traded per day 9,309 10,878 6,857 6,259 3,558
Market capitalisation at year-end (in CHF million) 1,359.1 1,283.4 1,024.7 889.9 614.9

Source: SIX Swiss Exchange

The registered shares of Mobimo Holding AG are traded on the SIX Swiss Exchange in Zurich and are listed in accordance with the Standard for Real Estate Companies. Code: MOBN/Swiss security no.: 1110887/ISIN code: CH0011108872, Bloomberg: MOBN SW Equity/Reuters: MOBN.S

The latest stock market data can be found at www.mobimo.ch

II. Share price performance

1 January 2007 to 31 December 2012

As at 31 December 2012, Mobimo's share price of CHF 218.90 was 12.7% above the diluted NAV (net asset value) of CHF 194.25. Taking into account the distribution from the capital contribution reserves of CHF 9.00 per share on 25 April 2012, Mobimo shares achieved a total performance of 9.6% for the year as a whole. The liquidity of the Mobimo share and the trading volume fell slightly. An average of 9,309 (prior year: 10,878) shares were traded each day, generating daily revenues of around CHF 2.0 million (prior year: CHF 2.3 million). The Mobimo share generated total revenues of CHF 510 million (prior year: CHF 590 million) on the SIX Swiss Exchange in 2012.

¹ Distribution of paid-in capital for 2012 financial year of CHF 9.00 per share in accordance with proposal to General Meeting of 9 April 2013

² Payout ratio: distribution ÷ earnings per share

³ Historical prices adjusted for share splits and distributions (source: Bloomberg)

III. Convertible bond

In June 2010, Mobimo successfully completed a CHF 175 million convertible bond issue with a coupon of 2.125%, maturing in 2014, with a conversion price of CHF 207.99 (original conversion price before the capital increase on 6 December 2011: CHF 210.37). Published credit ratings for Mobimo: UBS: BBB stable; ZKB: BBB+.

The convertible bond of Mobimo Holding AG is traded on the SIX Swiss Exchange in Zurich and is listed in accordance with the Standard for Bonds. Code: MOB10/Swiss security number: 11299133/ISIN code: CH0112991333, Bloomberg: MOBIMO Corp./Reuters: CH11299133.

IV. Shareholders Significant shareholders

The following shareholders held more than 3% of the share capital as at 31 December 2012:

Zuger Pensionskasse, 3.38% BlackRock, Inc. 3.07%

Free float as at 31 December 2012 (as per SIX Swiss Exchange definition): 100%

Shareholder structure

V. Communication

Mobimo provides information on its business performance via annual and half-year reports prepared in English, German and French. Price-relevant facts are communicated via ad hoc notices.

Information on our company, the Mobimo share, key dates and answers to commonly asked questions can be found on the website www.mobimo.ch. The information is updated on an ongoing basis.

To protect the environment, print versions of Mobimo Holding AG's annual and half-year reports are only sent out by post upon request. A summary report on the 2012 financial year is to be sent to shareholders.

VI. Contact addresses and calendar

Mobimo Holding AG Dr. Christoph Caviezel, CEO Manuel Itten, CFO Tel. +41 44 397 11 59 [email protected]

Share register

Tel. +41 44 809 58 58 [email protected]

General Meeting 2013

9 April 2013, KKL Lucerne

Financial reporting

2013 interim results: 15 August 2013

T he 2012 F inancial year

Investment and development property Rental apartments and condominiums

Zurich, "Am Pfingstweidpark" Turbinenstrasse 22–56

2012: A GOOD YEAR

DEAR SHAREHOLDERS L ad i es a n d g e n tle m e n

2012 was another good year for Mobimo Holding AG. Our company continues to deliver a a dynamic performance driven by a motivated and skilled team, an increasingly strong market position and steady demand for high-quality residential and commercial real estate. We have pressed ahead with a number of challenging building projects, some of which have already been completed, initiated attractive new projects and secured new sites for future developments. The quality of the investment portfolio has increased further, the residential component is on the up and occupancy rates are high. Our condominium units are in demand and our new "Investments for Third Parties" business area is performing well.

The 2012 financial year can also be depicted in figures. The real estate portfolio grew to a total value of CHF 2,355 million as at the year-end reporting date (year-end 2011: CHF 2,171 million). The Group's operating profit (EBIT) reached CHF 117.4 million, almost as high as the previous year's figure of CHF 121.1 million, while net profit, excluding last year's non-recurring tax effect, increased by 2% to CHF 76.3 million (2011: CHF 75.0 million after adjustment for the nonrecurring effect). Both net rental income from the planned growth of the investment portfolio and trading and revaluation gains contributed to this pleasing result. This will enable us to again propose a distribution of CHF 9 per share to the Annual General Meeting.

Continued good market conditions in a challenging environment

The Swiss real estate market remained robust in 2012. In the major economic centres especially, the stable economy, the persistent inflow of immigrants, the need for more living space and the growing number of small households are driving the continued demand for high-quality living space. Despite numerous calls to exercise restraint, demand for condominiums shows no sign of flagging. The low interest rates are making condominiums too attractive for many people when compared to apartment rentals. Sales of condominiums in the highest price ranges have slowed, however, while high rents are only achievable in the best locations. Market demand for centrally located office and commercial space is still intact. The transaction prices for purchasing investment properties often do not match our return expectations. Due to our own development activities this does not affect our growth, but in fact makes it easier to sell investments at good prices. Building is becoming increasingly expensive, though, but this has more to do with the obstacles of increasingly stringent regulation and building restrictions than with rising contractor and materials costs.

Mobimo's locations and products mean it is still well positioned to succeed even in the face of increasing competition.

Comprehensive construction activity progressing according to plan

Mobimo's comprehensive and challenging building programme has progressed according to plan. Mid-2012 saw the completion of the "Polygon" office building for Rockwell Automation in Aarau. The resulting concentration of space will now allow for the realisation of the new "AQA" urban district on the former "Torfeld Süd" industrial site (page 22). The renovation of the office building on our Post Office site in Lausanne is at an advanced stage. The tenant, an up-and-coming bank, will also be able to move into its new head office during the first half of 2013. In Adliswil, 51 of the 57 apartments realised in the "Wilacker" development have been transferred to their new owners and occupied since the spring. Three apartment buildings in the same residential development have also been completed and transferred to an investor. The condominium apartments of the "Schilf" project on the Zürichberg (page 3) have also been completed and in most cases are now occupied. The shells of the three residential buildings containing 250 rental and condominium apartments on the "Am Pfingstweidpark" site (page 14) at the foot of the Mobimo Tower in Zurich West are practically complete. Construction has started on the multifunction "Pépinières" building in Lausanne-Flon, which has already been fully let, and on the mixed development on the OVA site near the station in Affoltern am Albis, where a longterm rental agreement has been concluded with the future operator of the site's retirement centre for the elderly. Finally, construction of the new "Im Pfand" housing development in Regensdorf, with 141 apartments, began at the end of the year. However, due to objections – since resolved – the realisation of the planned "Meilenwerk" vintage car centre at the former Grob industrial building in Horgen has been delayed.

Higher income from all areas

Income from the sale of condominiums (trading properties) once again reached the high figure of CHF 21.7 million (prior year: CHF 22.3 million). Apartments were sold for a total of CHF 152 million. While demand in the mid-price segment continues to be as high as ever, the sale of the final highprice apartments in the Mobimo Tower is proving to be more complex than planned, despite sustained high interest. Consequently, we have sold the land we had set aside for the construction of luxury properties in Erlenbach and are now focusing primarily on developments in the mid-price segment.

Rental income rose substantially again to CHF 92.8 million (2011: CHF 88.8 million) despite the reduction in the reference interest rate. This is due in part to the acquisition of new investment properties and also to the completion of the extensive portfolio adjustments in 2010 and 2011 in particular, which have substantially raised the quality of the investment portfolio and rental income.

The vacancy rate remains low compared with the rest of the market at 3.8%. In the office segment, the focus on newly built or sustainably renovated mid-price buildings in central locations is paying off.

The progress made on the construction of existing projects, rental contract optimisations and the market-related reduction in the discount rate also contributed towards net income from revaluation of 36.9 million (2011: CHF 41.2 million.

Pipeline filled with attractive new sites

Mobimo is set to continue on its growth path. Properties intended for the company's own investment portfolio, with an investment volume of around CHF 440 million, are currently under construction or close to completion. There are also plans for more projects for the company's own portfolio with an investment volume of some CHF 670 million. 2012 saw the addition of a characterful former commercial and office building on Badenerstrasse in Zurich Altstetten (page 36), which is being converted into an attractive residential property with more than 40 lofts and studios. In Lausanne, the realisation of a development of 81 rental apartments on Rue Voltaire (page 141), very close to the railway station, began at the turn of the year.

Mobimo's development expertise is held in high regard by the market and provides us with access to interesting land and sites. Winning a competition to be a development partner for the towns of Biel and Nidau was a special honour for Mobimo. This project will see 130,000 square metres of the former Expo 2002 site on the shores of Lake Biel developed into a new and attractive suburb of the Bernese watchmaking metropolis under the name "AGGLOlac".

Shortly before the end of the year, Mobimo and Hochtief Development AG signed a development contract with Rheinmetall Air Defence, which is searching for a new production location, for its 53,000 m² site in Zurich Oerlikon. The company's withdrawal offers the city of Zurich a great opportunity to turn this area between the station and the residential district into a new urban zone. Situated close to one of Switzerland's busiest stations, the area is ripe for development to transform the old industrial site into a new and exciting mixed-use district focused on residential, service and commercial buildings. This and other development projects such as Mattenhof Lucerne Süd, Flon Lausanne and the Post Office in Lausanne will ensure that Mobimo has a stable and broad-based pipeline for years to come.

The new "Investments for Third Parties" business area, active since 1 January 2012, is also performing well. The team is already working on its first project, a residential development of around 250 rental apartments in Dübendorf (page 4), and secured a further site in Olten at the beginning of 2013.

Solid financing and a high equity ratio

Mobimo's balance sheet is extremely solid and our business is highly predictable. The average residual maturity of our financial liabilities is 9.1 years and the average interest rate as at 31 December 2012 is a modest 2.83%. As at the end of the year our equity amounted to CHF 1,201.0 million, corresponding to a solid equity ratio of 48%.

Positive share price performance

The Mobimo share closed at CHF 218.90 on 31 December 2012, around 5% above its closing price as at the end of 2011. Including the withholding tax exempt (for individuals) dividend of CHF 9 per share that was paid out on 25 April 2012, this equates to a performance of 9.6% for the year as a whole.

Customer satisfaction is the top priority

The satisfaction of our customers is our top priority. We have been able to consistently increase customer satisfaction in recent years by investing in the development of quality standards and in service and by forging close and intensive relationships with customers.

Outlook for 2013

We are also optimistic for the coming financial year. From today's standpoint we expect continuity, which means the usual continuation of our company's dynamic performance. The main focus of our activities also remains unchanged: the realisation of our numerous construction projects, the expansion of development business for ourselves and third parties, condominium sales, space marketing and the targeted management and optimisation of our portfolio.

Thank you for the trust you have placed in us.

Chairman of the Board CEO of Directors

Urs Ledermann Christoph Caviezel

GOOD RESULT AND SUCCESSFUL PERFORMANCE

Good result with profit of CHF76.3 million

Mobimo once again achieved a good result at all levels in the 2012 financial year, generating a profit of CHF 76.3 million (2011: CHF 80.5 million) and thus consolidating the record result of the previous year. The prior-year result included a one-time positive effect of CHF 5.5 million under tax expense; adjusted for this effect the profit generated in 2012 was 2% higher than the prior-year figure. The profit before revaluations was CHF 48.6 million (2011: CHF 49.6 million). Again adjusted for the one-time tax effect in 2011, this equates to an increase of 10%.

EBITDA of CHF 118.7 million

EBITDA of CHF 118.7 million (2011: CHF 122.4 million) and EBIT of CHF 117.4 million (2011: CHF 121.1 million) achieved in the year under review were both down slightly year-onyear. Before revaluations, however, EBITDA and EBIT both rose slightly to CHF 81.8 million (2011: CHF 81.2 million) and CHF 80.7 million (2011: CHF 79.9 million) respectively.

Profit before tax was CHF 93.7 million (2011: CHF 92.4 million), up 1% on the prior-year figure. EBT before revaluations was CHF 56.8 million (2011: CHF 51.2 million), an increase of 11% year-on-year.

Solid earnings per share of CHF 12.33

A capital increase was carried out successfully on 6 December 2011 through the issue of 1,028,350 new shares, generating CHF 193 million in new funds for the company. As a result of the increase, the number of shares issued rose by 20% as at the end of 2011 to 6,170,098.

Mobimo generated earnings per share of CHF 12.33 (2011: CHF 15.46) and diluted earnings per share of CHF 11.58 (2011: CHF 14.00) on the higher number of shares in the 2012 financial year. Before revaluations, earnings per share were CHF 7.85 (2011: CHF 9.53) and diluted earnings per share CHF 7.64 (2011: CHF 8.90). The earnings per share generated will enable Mobimo to maintain its attractive dividend policy, and the company will once again propose a distribution of CHF 9 per share for the 2012 financial year to the forthcoming General Meeting.

As at 31 December 2012 the net asset value (NAV) per share was CHF 193.14 (year-end 2011: CHF 190.36) and the diluted NAV per share was CHF 194.25 (year-end 2011: CHF 191.41). The closing share price of CHF 218.90 on 31 December 2012 represents a premium of 13% over the diluted NAV.

Solidly financed and an equity ratio of 48%

Mobimo continues to have a very solid capital base with an equity ratio of 48% (2011: 47%) as at 31 December 2012. The average residual term of the company's financial liabilities fell slightly to 9.1 years (year-end 2011: 9.2 years) as at the end of the year. Its excellent liquidity meant there was only minimal need for refinancing in the 2012 financial year. The average interest rate of the financial liabilities was further reduced to 3.00% in the year under review, compared with 3.02% in the previous year. As at the reporting date of 31 December 2012 the average interest rate was even lower at 2.83%. Mobimo will continue to use the extremely attractive interest rate environment to tie in interest rates at a very low level over the long term

Overall portfolio grows to more than CHF 2.35 billion

The value of the overall portfolio grew by 8% in the 2012 financial year from CHF 2,171 million as at 31 December 2011 to CHF 2,355 million as at 31 December 2012. Net income from revaluation was CHF 36.9 million (2011: CHF 41.2 million), down 10% overall year-on-year. As at 31 December 2012 the average discount rate used for real estate valuations was slightly lower at 4.63% (year-end 2011: 4.76%).

Increase in rental income to CHF 92.8 million and low vacancy rate of 3.8%

Rental income was up 5% in 2012 to CHF 92.8 million (2011: CHF 88.8 million). Eight properties were sold in 2011 as part of the portfolio adjustment process. These portfolio adjustments reduced potential rental income by around CHF 6.7 million per year. The reduction was more than offset by the completion in 2011 and 2012 of properties under construction, with potential rental income totalling CHF 17.7 million per year, and their addition to the investment portfolio. The following properties developed by Mobimo were added to the investment portfolio during this period:

  • Aarau, Polygon Industriestrasse
  • Lausanne, Place de l'Europe 6
  • Lausanne, Rue de Genève 7
  • Lausanne, Rue Beau-Séjour 8
  • Zurich, Manessestrasse 190/192
  • Zurich, Turbinenstrasse Hotel (Mobimo Tower)

As at 31 December 2012, the vacancy rate was still at the very low level of 3.8% (year-end 2011: 3.3%). Net rental income was CHF 79.8 million (2011: CHF 76.0 million) in 2012, an increase of 5% on the prior-year figure. The net yield on investment properties in the year under review was 4.8% (2011: 5.0%).

Residential properties sold for CHF 152.0 million

Income from the sale of trading properties in the 2012 financial year was well above the prior-year figure at CHF 152.0 million (2011: CHF 133.0 million).

Net income from the sale of trading properties was similar to the prior-year level at CHF 21.7 million. (2011: CHF 22.3 million). The successful result is primarily due to the transfer of ownership of residential properties from the following projects:

  • Adliswil, Wilacker
  • Erlenbach, Forch-/ Glärnischstrasse
  • Zurich, Hinterbergstrasse
  • Zurich, Turbinenstrasse (Mobimo Tower)

A total of 76 residential properties were transferred in 2012, comprising condominiums and also three properties with a total of 18 apartments that were sold in a single package as a residential complex. As at 31 December 2012, notarised sales agreements with a value of around CHF 149 million had been concluded for condominiums at the realisation stage, which will generate proceeds when ownership is transferred. Overall, work on all home ownership development projects proceeded as planned in the 2012 financial year.

Project pipeline of around CHF 1.1 billion for the company's own portfolio

Mobimo's growth is driven by the targeted development of residential and commercial properties for its own portfolio, the quality of which is being further optimised as new investment properties are constructed. The following properties for Mobimo's own portfolio were under construction or at the completion stage as at the end of 2012:

  • Affoltern am Albis, Obstgartenstrasse retirement apartments
  • Affoltern am Albis, Obfelderstrasse rental apartments
  • Horgen, Seestrasse 93
  • Lausanne, Avenue d'Ouchy 4 6 (administration)
  • Lausanne, Les Pépinères

  • Lausanne, Rue Voltaire 2 12 (Petit Mond-Riond)

  • Regensdorf, Schulstrasse 95/101/107/115; Riedthofstrasse 55/63; Feldblumenstrasse 44
  • Zurich, Turbinenstrasse, City West (site C)

The total investment volume for these projects is around CHF 440 million. The following projects for the company's own portfolio, involving a total investment volume of CHF 670 million, are also being planned:

  • Aarau, Torfeld site 2
  • Aarau, Torfeld Aeschbachhalle
  • Kriens, Mattenhof site
  • Lausanne, Rue des Côtes-de-Montbenon
  • Lausanne, Rue de Genève 19/21
  • Lausanne, Avenue d'Ouchy 4 6 (development)
  • Lausanne, Rue de la Vigie 3
  • Zurich, Albulastrasse/Hohlstrasse (Labitzke site)
  • Zurich, Letzigraben

The properties under construction and planned will create additional potential rental income of over CHF 61 million a year for the company's own portfolio.

In addition to the projects at the planning or completion stage, Mobimo is development partner to the towns of Biel and Nidau in their AGGLOlac project and to the company Rheinmetall in the development of its site in Zurich Oerlikon. These developments offer further opportunities to supplement Mobimo's own portfolio with carefully selected, attractive investment properties.

Inclusion of share in the Stoxx 600

After inclusion in the FTSE EPRA/NAREIT in the prior year, the Mobimo share was added to the Stoxx Europe 600 benchmark equity index, another important index, in the 2012 financial year.

Manuel Itten, CFO

S usta i n ab i l i t y report

Park 5,000m²

Investment and development property Residential, office, commercial and leisure use

Aarau, "Torfeld Süd", AQA 50,000m² site

CHRISTOPH CAVIEZEL, CEO

A broad market segment with a long-term impact

From a sustainability perspective, real estate is a broad market segment that also has a long-term impact. Decisions we take in the real estate sector today will have an impact on the environment, the socio-demographic development of communities and townscapes, people's quality of life and the business success of our real estate company for decades to come.

This makes it all the more important to tackle the challenges in a conscious and targeted manner. Climate change, the limited availability of oil and gas and the planned withdrawal from nuclear energy are placing new demands on the construction and real estate industry. The majority of final energy consumption (around 46%) is attributable to the 1.64 million buildings in Switzerland. Buildings generate about 35% of all greenhouse gas emissions. New, more stringent political requirements are to be expected. The tighter rules for newbuilds and conversions and the overall efficiency of buildings thus form part of the debate on the energy strategy for 2050 (e.g. the introduction of compulsory energy inspections for building technology and operational optimisation).

International and national building standards and certification systems (DGNB, LEED, the 2000 Watt society, Minergie, etc.) are being implemented; these measure the quality and value of real estate in relation to the three dimensions of sustainability – economy, environment and society – and rate them objectively and transparently for customers and shareholders. This standard-based measurement is having an increasing influence on the valuation methods and value of real estate (e.g. the attention now being paid to life cycle considerations), is having an impact on the markets (the prices achieved from purchasers and tenants) and is now an important political topic (introduction of a "Swiss standard"). It should not be forgotten that real estate with added value represents a genuine option or alternative in the investment markets.

Strategically and organisationally integrated

At Mobimo we embrace sustainability as an opportunity. As a forward-looking real estate company we regard sustainability as an investment in the future and have therefore integrated it into our real estate strategy. We identify the expected opportunities and risks – such as those mentioned above – as quickly as possible and take them into account in our corporate decision-making processes. We regularly review our strategic objectives, measures taken and how quickly they are put into practice, and the implementation of sustainability within the company, with the highest decision-making body, the Real Estate Committee, which is composed of members of the Board of Directors.

Sustainability is taken into account in current and future investment and portfolio decisions. The strategy sets out the targets for the portfolio in respect of investment and development. It also defines how we work with partners, our commitment to organisations, our communication process and the training and professional development of our employees.

Goals and successes

In terms of the environment, our most important objective is to increase the energy efficiency of buildings, use renewable energies and reduce greenhouse gas emissions. We have therefore collected these data from the entire portfolio for our sustainability report and indicated the change we hope to achieve between 2011 and 2016. We are systematically continuing our work with certification bodies and implementing their standards. Mobimo sets itself apart through the social responsibility demonstrated on its sites, with forward-looking concepts that bring together the worlds of living, leisure and work so effectively as to offer people – our customers – a particularly high quality of life. We are sticking to our economic objectives: as a leading real estate company, Mobimo takes care to strike a realistic and successful balance between generating profits and safeguarding the future of the company. Acting sustainably makes an important contribution to boosting the value of individual properties and the portfolio.

We have been able to celebrate further successes in 2012 thanks to the dedication and commitment of all our employees. A year is a short time in real estate. We would therefore like to acknowledge and praise our employees' increasing awareness of sustainability and in particular their impressive efforts to implement it. One indicator of this is the number of further increases in the already high satisfaction levels of our customers. Furthermore, Mobimo applied the guidelines of the European Public Real Estate Association (EPRA) for the first time in its Annual Report 2011, for which it was awarded a gold medal. Mobimo also received the prestigious award for the "Most Improved Annual Report", which achieved GRI Level B (prior year: Level C). The commensurate certificate can be found on the last page of this sustainability report.

MOBIMO SUSTAINABILITY REPORT

INTRODUCTION

Sustainability is of central importance

Sustainability is of central importance to the real estate sector. This includes setting objectives for all three dimensions of sustainability: environmental, sociocultural and economic. For Mobimo, sustainability means successfully striking a realistic balance between generating profits and safeguarding the future of the company. Mobimo wants its properties to create a basis for modern, healthy, responsible and environmentally friendly living and working. Given the limited availability of non-renewable forms of energy, demand for sustainable homes and office buildings is set to rise further in the years to come.

Sustainability is an integral part of the real estate strategy

Mobimo wants to seize this opportunity and integrate an environmental and market focus into its real estate strategy by developing living and working spaces that are fit for the future. This should ensure that growth is in line with the guiding principle, by means of future-oriented properties. Existing buildings are renovated sustainably wherever possible. Sustainable buildings should be identifiable by means of nationally or internationally recognised certificates such as Minergie, DGNB or LEED.

The integration of sustainability issues is linked to investment that will create value over the medium to long term, as lower operating and maintenance costs make up for higher initial construction costs. The growing demand will cause sustainable Mobimo buildings to appreciate, thereby adding value for customers and shareholders.

In the case of development projects, Mobimo sets itself apart through its choice of locations, the architecture selected, the efficient use of resources, the certified energy efficiency of buildings and the avoidance of emissions. Customers are included in the construction and development process from the outset, thus becoming directly involved with the product and its quality.

Gains in investment property values are achieved through active portfolio management, in other words: ongoinganalysis and rationalisation. The newly added properties largely meet the latest construction standards. Building renovations also help to constantly improve the quality of the portfolio.

Sustainability is an integral part of day-to-day business

Mobimo addresses sustainability at all levels. This means not only investing in projects, but also making a commitment to shareholders, customers and employees in the interests of society, both today and in the future. The key stakeholders include shareholders, customers and employees, but also partners from the construction industry and other organisations and associations of relevance to society. In order to report transparently on its sustainability activities, in 2012 Mobimo is for the second time publishing a sustainability report as part of its annual report. This has been prepared in accordance with the Global Reporting Initiative (GRI) Guidelines and fulfils GRI Level B. Mobimo wants to drive the issue of sustainability further forward in 2013 and make it a core element of projects and of the company's profile.

The code of conduct developed during the year under review is another major step in this direction. The code defines how Mobimo aims to carry out its business activities. Mobimo's reputation as a responsible and progressive company depends on the daily decisions and actions of each individual. This is why employees are expected to demonstrate personal responsibility and integrity. Mobimo's employees obey the law and act honestly and fairly.

CUSTOMERS

Customer satisfaction is the top priority

Mobimo's customers include private and commercial tenants of investment properties, along with institutional investors, interested parties and private purchasers of development projects. Ensuring their complete satisfaction is Mobimo's top priority, and the company seeks to achieve this through investment in developing quality standards, in service and in building close, intensive customer relationships.

Mobimo's customers receive intensive support throughout the process, from the time they express an interest right through to the signing of contracts, and also benefit from after-sales care following the handover of the property. This includes specific services that Mobimo develops for particular sites or projects and which are aimed at the community generally (e.g. Flon, Lausanne). These have been met with great interest. Maintaining personal relationships, with an emphasis on keeping the same contact person wherever possible, also demonstrates to customers that Mobimo is always a reliable partner and understands their needs. The manager is the contact person for both business and private customers. Tenants should also know their manager and caretaker and interact with them.

This close contact allows Mobimo to ensure that customers and their satisfaction are always its top priority. To constantly improve satisfaction levels and cooperation with customers, surveys are conducted at clearly defined points in the customer process. When selling properties, these take place following official certification, following selection of the internal fixtures and fittings, three months after transfer of possession and three months after the two-year acceptance.

Purchasers express a high degree of satisfaction with Mobimo, giving it an average score of more than 74% over the entire process.

Satisfaction levels for commercial and residential customers are also surveyed annually. This survey is also conducted by an independent external partner. Customer satisfaction was very pleasing once again in the year under review: 87% of commercial customers and 84% of residential customers would recommend Mobimo to a good friend.

All customers can also give personal feedback at any time, either directly to their customer advisor or manager, by e-mail, letter or telephone, or at a specific customer meeting.

Personal, individual contact

Mobimo takes complaints very seriously and constantly strives to improve. The procedure for dealing with any such complaints is clearly defined, as are the relevant responsibilities and deadlines. Short information channels, personal contact and fast responses to e-mails and letters are top priorities. Mobimo endeavours to find the best possible solution for every customer.

The Portfolio Management department receives hardly any complaints due to the adjustments made to the portfolio and the resulting improvements in the quality of the properties. Furthermore, the more accurate understanding of customer requirements – thanks to regular surveys – has led to a steady increase in the quality of the offering and services. Maintaining personal contact with customers is of central importance in this respect. Mobimo employees make regular on-site visits to commercial tenants (offices, commercial space, retail, hotels) in particular. The caretaker is another important contact person who informs the occupants of each building precisely when and how he can be contacted, when he is present and what work is carried out to what schedule. As a quality assurance measure, each caretaker enters into a service level agreement. This requires the caretaker and the manager to treat the property as if it were their own. The caretaker's tasks include introducing himself to the customers personally and getting to know them so that he can deal promptly with any problems such as damage or stains. All incidents must be recorded, and then checked and monitored with the help of a specifications manual.

It is also very important for the Development department to assist customers as early as possible and look after them throughout the entire purchase decision process. In the case of newbuild projects, even the basics at the building site have to be clearly defined. This is the first tangible step for the customer towards the realisation of his or her project. New projects, regular contact, checks and events help manage customer expectations and enhance their satisfaction with the purchase. Here, too, regular customer surveys throughout the entire process make an important contribution.

Quality of products and services

Mobimo wins people over through its quality. Clearly defined quality management for development properties is implemented at building sites and in services, with a particular emphasis on health and safety aspects. This covers the entire process: site preparation, development and construction, moving in, use and operation, waste disposal. Sustainability plays an important role at all stages. All products and services are systematically examined with a view to the health and safety of users and customers as part of the quality management process. The measures implemented do not simply comply with the standard regulations but actually exceed them. All external requirements laid down by the federal government, cantons, SUVA, SIA, the police, fire service, etc. are of course complied with, in addition to more stringent internal regulations. Attention is paid to sustainability aspects such as public transport links, accessibility, outdoor spaces and so on. To test implementation of requirements Mobimo always builds a show home in order to gauge customer reactions and needs and identify areas for technical improvement.

With investment properties, Mobimo systematically ensures compliance with requirements and standards promulgated by the federal government, the cantons and organisations such as SIA and SUVA. In the case of newly built investment properties that are added to the portfolio, Mobimo also defines its own standards and criteria for sustainable construction aimed at achieving steady improvements in sociocultural, technological, environmental and locationrelated quality aspects and process stages. Health considerations in respect of residential space are closely scrutinised and awarded the "Gutes Innenraumklima" (good indoor climate) quality seal, for example. Depending on the property, themes such as feng shui or electrobiology may also be employed. With regard to health, the most up-to-date findings in the sector are implemented in newer properties. All the labels used comply with the highest levels of quality assurance and standards.

Particularly when dealing with commercial tenants, the quality of the offering plays a decisive role, especially as a cost factor. Surveys show that tenants of office, commercial, retail and hotel space particularly appreciate Mobimo properties for their space, central location and transport connections. An attractive price/performance ratio is another advantage.

Portfolio Management is planning a package of measures to promote service quality. As described above, Mobimo is in regular one-to-one contact with tenants. The contact persons are known to tenants and are available to answer questions or provide assistance. Mobimo's 24-hour helpdesk provides such support round the clock. Tenants are provided with full written notification of renovation plans in good time. In the case of major works, on-site information events are held. Commercial customers are always informed of changes of tenants within the building. The Mobimo website acts as an information and marketing portal for customers and partners.

Mobimo takes care to pass on clear information to its customers. To do so, it uses various communication channels (brochures, newspaper advertisements, its own website and other platforms) and one-to-one information sharing via discussions with estate agents, architects and other parties. It reports on the key financial figures and on materials and technologies subject to declaration requirements. There were no incidents or breaches of declaration requirements during the period under review. Great importance is also attached to customer data protection, which is supported through the use of the latest IT technologies and suitable employee training.

Adding value for customers

For Mobimo, it goes without saying that customers should receive transparent information about the offering. This includes financial and other key data regarding the rental apartment or property being purchased, along with details of its use. Brochures, websites, factsheets, advertisements and personal conversations and planning meetings are used to communicate the information. In the case of properties for rent or purchase, instructions regarding the use and maintenance of the technical installations are also provided. Fulfilling customer requirements in this targeted manner remains Mobimo's primary objective in 2013. The company can expect to see rising demand among customers for sustainability in real estate. The direct added value for customers, which Mobimo wants to increase even further through its activities, relates above all to future energy cost savings and higher energy efficiency, as well as generally lower maintenance and running costs, special materials, a high standard of living and good infrastructure and public transport connections, plus add-ons such as artwork on buildings. The processes used are constantly improved and adjusted in order to promote these objectives.

SHAREHOLDERS

Adding value for shareholders

Shareholders benefit from Mobimo's transparent information policy, which allows them to gain a good idea of future developments and decisions. Annual and half-year reports, up-to-date price information and news stories on the website in English, German and French, information events, this GRI report and more all serve to keep shareholders informed. They earn profits thanks to a well-performing share, the company's growth and the appreciation in the value of the portfolio. Mobimo is independent of the influence of any single shareholder or group of shareholders (100% of its shares are in free float). This ensures that all shareholders are treated equally.

ENVIRONMENT

Clear guidelines for optimising the portfolio

Mobimo is one of the leading real estate companies for sustainable building. By developing living and working spaces that are fit for the future, it integrates environmental aspects into its real estate strategy. Where possible, investments are made in central locations with good public transport links. Particularly in light of climate change, issues such as resource-saving power generation, energy efficiency and the reduction of emissions and pollutants are key aspects of the sustainability strategy. In terms of Mobimo's business model, this means reviewing the investment portfolio according to business, sociocultural and environmental criteria. As part of the ongoing cycle of renovation, properties are renovated sustainably where possible. Wherever possible, properties that are added to the portfolio meet high quality and environmental standards – fulfilling the Minergie standard as a minimum requirement, for example. The portfolio is therefore optimised on an ongoing basis and its value increased in line with sustainability criteria. User behaviour is a specific challenge that has not yet been adequately aligned with the new, sustainable breed of real estate. Mobimo's customers are therefore provided with information and documentation that includes suggestions for making optimum use of the properties.

High demands on development properties

Mobimo was one of the earliest investors in Minergie-certified real estate and has been realising such properties since 2001. Going forward, Mobimo's development activities will maintain the systematic focus on high-quality properties that as a minimum must all meet the requirements of the Minergie standard or equivalent labels.

As far as energy is concerned, in addition to the building envelope and the use of energy-efficient household appliances, the reduction of technical installations overall plays a key role and is in line with customer wishes. Alongside purely energy-related considerations, attention is also paid to the type of materials used, reduced water consumption and how waste water and other waste materials are dealt with. Within Switzerland, Mobimo uses the facilities provided for this purpose by municipalities, cantons or the federal government. Other key aspects include high-quality and generous landscaping and optimum conditions for sustainable mobility. This includes favourable public transport links, availability of car sharing services, sufficiently convenient bicycle parking and charging stations for electric cars. Mobimo's approach with regard to development properties is to work with partners that also actively support sustainability aims and possess the corresponding certificates.

Setting a good example

Two examples of the sustainable real estate strategy with regard to the environment are the developments of Wilacker in Adliswil and Rötiboden in Wädenswil. These modern residential buildings in the canton of Zurich were built using sustainable building materials in line with KBOB (Coordination of the Federal Construction and Properties Services)/IPB guidelines. This not only reduced the environmental burden but also helped create a better indoor climate. Both properties have been built to the Minergie standard: heat is supplied through a brine/water heat pump and rainwater drains away through an on-site soakaway system. The two examples illustrate how systematically Mobimo implements its sustainability strategy when developing new properties.

Wilacker property, Adliswil (Mobimo development to be sold as condominiums)

Energy: Built to Minergie standard
Heat supplied through brine/water heat pumps that
use ground water
Use of energy efficiency class A washing machines
and driers
Materials: Use of sustainable building materials in line with KBOB/IPB
sustainable planning and building guidelines
Water: Use of water-saving sanitation systems
On-site soakaway unit.
Waste: Waste management system in line with requirements
of the town of Adliswil.
Other: Use of domestic plant types and extension of existing
woodland vegetation for integration into the development

Restoration of two streams

Rötiboden property, Wädenswil (Mobimo development to be sold as condominiums)

Energy: Built to Minergie standard
Heat supplied through brine/water heat pumps
that use ground water
Use of energy efficiency class A washing machines
and driers
Materials: Use of sustainable building materials in line with KBOB/IPB
sustainable planning and building guidelines.
Water: Use of water-saving sanitation systems.
Other: Use of largely domestic plant types in gardens.

Energy consumption and CO2 emissions

One of the key aims of the real estate strategy is to reduce the portfolio's energy consumption. Since Mobimo has only partial access to actual consumption figures for investment properties, energy consumption and CO2 emissions data for last year's Mobimo annual report were calculated using a modelling tool.

  • Each individual investment property in the existing portfolio was assigned to a building category (e.g. office building, 1960s-80s residential building, commercial building)
  • Each building category is itself defined by specific energy values that describe the average consumption of heat energy and electricity per square metre for each building category. These energy values correspond to the average values of the Swiss building stock for the category concerned.
  • More than 70% of newbuilds (built in 2009 or later) comply with Minergie requirements. The Minergie values were therefore applied for these properties.
  • The overall energy consumption for heat and electricity was then calculated for each investment property based on the energy-consuming space and energy values per square metre. Energy-consuming space was estimated at an average 85% of overall usable space.
  • Finally, CO2 emissions were calculated based on energy consumption for heat and electricity. Specifically, the CO2 emissions from heating were calculated for each investment property in line with the energy sources used (e.g. gas, oil or district heating) based on the factors published by the Federal Office for the Environment (FOEN), while the calculation of CO2 emissions from electricity consumption was based on the average Swiss consumer mix.

Since a year is a short time in the real estate sector and changes happen very slowly, the calculations will not be repeated until the next reporting year and the results as of 2011 shown. The analysis of all Mobimo investment properties showed that properties built in or before 2008 consume a total of more than 232 kWh per m2 and year. Of this, 165 kWh/m2 relates to heating and 67 kWh/m2 to electricity. The newbuild properties in the portfolio, however, require just 83 kWh per m2 and year. This equates to a reduction of over 65% compared with older investment properties. With regard to heating requirements in particular, building standards such as Minergie have produced huge advances.

Chart above: Electricity and heat consumption of the properties in the Mobimo portfolio as at 2011. Heat consumption comprises heating, hot water and process heat.

The electricity used for heat generation (hot water, process heat) is also included under heat consumption. More than 70% of newbuilds (2009 and later) comply with Minergie requirements.

The Swiss average value was determined using energy statistics and is based on the structure of building types in Switzerland as at 2010 (type and quantity). The different data sources used give rise to uncertainties, which are taken into account on a blanket basis with an overall range of 25%. The width of the bar gives a clear indication of this.

As the Mobimo portfolio includes a disproportionately high number of energy-intensive investment properties for commercial use in comparison with the Swiss building stock, energy consumption per m2 in the portfolio is slightly higher than the Swiss average.

¹ Energy values are based on analyses in ten cities and regions (Germany, Austria, Switzerland) and have been calibrated to the Swiss building stock. See also, for example, Berger, T., Genske, D., Hüsler, L., Jödecke, T., Menn, A. and Ruff, A. (2011). Energy Optimisation in the Canton of Basel-Stadt. Office of Environment and Energy, Basel-Stadt. 171 pages.

  • ² Energy-consuming space is the space in which energy (electricity, heating, fuel) is consumed and excludes unheated areas of a building such as staircases and cellars.
  • ³ Without concrete consumption figures, energy consumption calculations are subject to uncertainty. In fact, the average values for the Swiss building stock that are used may differ significantly from actual energy consumption in individual cases. Across the entire investment portfolio, however, the overestimated and underestimated energy values balance each other out in line with the law of large numbers. With this in mind, the entire portfolio was analysed rather than a projection being produced based on part of the portfolio. This additional step means that the overall energy consumption calculated does represent a solid estimate of actual consumption.
  • ⁴ To a certain extent, the differences are also attributable to the fact that newbuild projects increasingly involve residential properties, whereas a larger proportion of older investment properties are commercial or other types of properties. Even if we were to compare residential buildings exclusively, however, newbuilds would be over 50% more energy-efficient than older investment properties

In the year under review, two new properties were added that meet the Minergie standard. In addition, energy-efficient renovation was undertaken at three properties. This portfolio optimisation is therefore in line with the strategy and will contribute to the continuous reduction in energy consumption over the next few years, even in the context of a growing overall portfolio.

CO2 emissions can also be cut significantly through the targeted expansion of renewable forms of energy, for example, geothermal probes or connections to district heating networks to meet heating needs or the use of renewable energy sources for electricity.

By 2016, energy consumption is expected to fall by 4% compared with 2011 levels, while the portfolio as measured in terms of energy-consuming space is set to increase by 13%. Energy efficiency, expressed in the form of energy consumption per square metre of energy-consuming space, will improve by more than 15% over the same period, while CO2 emissions per square metre will fall by 19%. The model assumes that 50% of the heat energy for development properties comes from renewable sources, including district heating from waste incineration plants. It also assumes energy optimisation for 1% of the portfolio annually. Although Mobimo recommends that its customers use certified green electricity for development properties, in the interests of producing a conservative model this has not been taken into account here. In reality, not all customers opt for green electricity.

Chart above: Expected overall energy consumption in heat and electricity for the Mobimo portfolio from 2011 to 2016 and portfolio growth over the same period. Please note: The calculations will be repeated in the next reporting year using up-to-date figures

Chart above: Energy consumption and CO₂ emissions in relation to energy-consuming space over the next five years.

EMPLOYEES

Giving real estate a face

Mobimo staff are not just employees – they embody and exude their passion for real estate and for the company. This means that projects and properties take on a clear and positive face for customers. Mobimo's "positioning" includes the objective for staff to excel in all areas from correspondence to project realisation through their expertise and professionalism. Purposeful cross-departmental cooperation and communication, environmental awareness, rapid response times thanks to deadlines that are clearly defined and met and the fostering of new and visionary ideas are also part of Mobimo's mission. Since Mobimo staff see each other as customers, this applies both within the company and in dealings with external parties.

Professionalism as a market promise

Mobimo recruits highly qualified staff and is committed to their ongoing training and development. This is the only way that the company can credibly promise professionalism as a key argument vis-à-vis its customers and the market and deliver on this promise day in, day out. It is therefore important that staff have a broad-based knowledge of the company, the market and the sector. Individual expertise is equally important. With its flat hierarchy, Mobimo enables its employees to benefit from a high degree of independence and individual responsibility. At the same time, however, the company demands corresponding expertise and close cooperation both within teams and with all other departments. This means that motivated staff have exciting career opportunities at Mobimo and the chance to work on attractive and challenging projects.

Mobimo also employs apprentices to develop the next generation. Three commercial apprentices were employed at Mobimo in 2012. The training given is in line with statutory requirements and also follows Mobimo's own training plan. The apprentices work in various different departments, spending a few months in each.

Ongoing and open dialogue

Since Mobimo is not excessively large and the workforce is motivated, there is direct contact and a continuous transfer of expertise throughout the company.

As a rapidly growing and dynamic organisation, Mobimo places great emphasis on carefully integrating new staff into the existing team and providing individual support to all employees. They are therefore involved in the company's development via regular discussions with line managers, team meetings and workshops. Ideas and suggestions can be taken on board at an early stage. Individual annual objectives are defined, discussed and evaluated with all employees in annual performance appraisals. These appraisals are also used to assess how satisfied employees are, to discuss their potential and to raise any concerns. Other topics discussed include specialist knowledge, quality of work, output, organisation, customer orientation, initiative, the ability to work under pressure and the level of identification with the company. The steps required to achieve objectives, such as further training and development, on-the-job learning or other support measures, are also decided in these appraisal meetings.

A balanced and stable workforce

Mobimo is in a phase of strong growth. As at the end of 2012 the company employed a total of 96 staff (prior year: 90), and there are also plans to further increase the workforce in 2013, primarily in the Development and Investments for Third Parties business areas. A little over half of Mobimo's staff work in the Development and Portfolio Management divisions.

The company has offices in Küsnacht (79 employees) and Lausanne (17 employees). Apart from the apprentices and one other exception, all employees are on permanent contracts, and 71% (prior year: 79%) work on a full-time basis. The increase in the number of part-time staff in 2012 is due chiefly to the fact that Mobimo offers this option all the way up to middle management level.

In terms of age, most employees (67, prior year: 55) are in the middle segment from 30 to 50. The distribution above and below this segment is balanced. The middle segment is also well represented at management level. In terms of the gender mix, Mobimo's workforce is well balanced on the whole. More appointments of female staff in the year under review mean that women now make up more than half of the workforce – 54% (previous year: 47.7%) of employees are female. There are still significantly fewer women at senior management levels.

The staff turnover rate is very much in line with the average at 10.4% (previous year: 10%). Excluding the reorganisation at the Lausanne office, which affected six members of staff (outsourcing of reception and building maintenance functions), the staff turnover rate would be at the low level of 4.17%. This low rate is indicative of the very high level of employee satisfaction.

Attractive employment conditions

To support employee retention, Mobimo believes it is important to offer its staff an attractive and stimulating environment. The flat hierarchies mean that employees have a great deal of responsibility and independence. The company pays market-based salaries that are determined on the basis of various aspects such as education, experience, function and rank and take individual performance and success into account. Employees receive five weeks' holiday, a 13th month salary and a bonus based on the performance of the business and of the employee. There is a good working environment and employee events are held on a regular basis. Employees are granted service anniversaries after 5, 10 and 15 years as a thank you for their loyalty to the company. All Mobimo employees are members of a defined contribution pension scheme. The majority of employees enjoy the mandatory pension coverage required by law, while additional, non-statutory coverage is provided for middle managers, Executive Board members and a number of other employees. As at September 2012, the pension fund's coverage was – as in 2011 – 105.5% (prior year: 100.1%). With the exception of assistance with training costs, all work-related benefits are also available to temporary employees, although pension provision is only provided for contracts of more than three months and maternity leave lasts only until the end of the contractual period.

Health and safety are a key priority

The well-being and safety of its staff are very important to Mobimo. Adherence to all statutory provisions can be taken as read, and the company also implements recommendations from other organisations such as SUVA, the Swiss public law accident insurer. During the refurbishment of the first floor in the main Mobimo building, special attention was paid to quality considerations and the best possible balance between ventilation and heating with a view to providing a good office environment. Mobimo invests in high-quality office facilities, and staff are provided with generously proportioned workstations in light and pleasant rooms. With regard to the furnishings, care was taken to foresee and prevent accident risks as far as possible. An emergency course was offered and attended by around 50% of staff. Employees with long-term illnesses receive support from line managers or the HR department in the form of case management. Absences due to illness or accident are continuously monitored with the aid of an SAP absence system, and statistical evaluations are produced. Days of absence are counted right from the first day, and accidents are immediately reported to the insurance company (Zurich Insurance). Mobimo employees are offered attractive insurance solutions. There is no deduction for daily sickness benefits, and the accident insurance includes hospital treatment in a private ward.

Employee protection and work/life balance

Flexible working hours and the option to work part-time are highly valued by staff, and take-up is high, with numerous fathers working at 80% of full-time hours, for example. Job sharing, early retirement upon request or continuing to work after the official retirement age are other options that can be used to take account of employees' individual situations.

Employees are also well protected against bullying, sexual harassment and discrimination. The employee regulations set out a whistle-blowing framework and provide an external, independent contact person whom employees can approach if they are affected by any of these issues or suspect another person of misconduct. As in previous years, no such cases were reported in 2012.

SOCIETY

Commitment to society

In today's society there is frequently a crossover between the worlds of work, home and leisure. Mobimo takes proper account of this, paying due attention to forward-looking and sustainable action and planning in its major projects. Such major projects may have a profound effect on townscapes, social interaction and the demographic structure, for example, via housing estates, multi-family homes and developments with several residential and commercial buildings. Real estate has a long lifespan, and subsequent generations should have the chance to benefit from it as well. Decisions taken in the initial phase of a project are therefore particularly important, as they will have an impact on the environment and society for decades to come. In putting together and managing its real estate portfolio, Mobimo takes care to combine environmental aspects such as emissions, waste and the consumption of resources with social aspects such as health and safety and with economic objectives. In a number of Mobimo projects, consideration of this long-term social and economic perspective is of the utmost importance from the outset. Examples include Flon in Lausanne, Zurich-West, AQA in Aarau, AggloLAC and Mattenhof in Kriens/Lucerne. Even before a project is launched, therefore, Mobimo liaises closely with public authorities, district associations, neighbours and other stakeholders.

In addition to its business activities, Mobimo plays an active role in society and demonstrates its commitment by supporting cultural and other events to develop districts into social meeting places. In the Flon district of Lausanne, Mobimo employs event managers for this specific purpose. This enhances the location, districts and townscape, generating economic and social benefits for an entire region. Zurich-West is another area in which Mobimo has realised several projects. Previously an industrial wasteland blighted by polluted sites, it is now a hip, trendy and lively area in a centre for cultural and business activities. The development has undoubtedly added value for the entire city. Art on or around buildings or structures – either internally or externally – rounds off the visual effect and is part of Mobimo's requirements for properties (e.g. the "No Problem" sculpture at the Mobimo Tower, the "WaterLightStone" at Manessestrasse, Zurich, the lighting installation at Garage, Horgen, the "Language plays time" work at the Ova site development, Affoltern a/A).

In all building projects, Mobimo tries to notify residents promptly of any potential noise and dust disturbance or prevent such issues from arising. The company regularly produces analyses to ascertain the impact of its activities and help it better address trends in the market and changing requirements for living space.

With a view to constantly improving how it deals with such challenges, Mobimo endeavours to exchange views and ideas with other experts in discussion forums and is an active member of various associations and organisations such as the Swiss Real Estate Association (SVIT), the Association of Real Estate Investors and Managers (VIV), the Homeowners Association (HEV), the Public Private Partnership (PPP) Association and various other business organisations.

Strong values for long-term success

The enthusiasm that its staff show for real estate is what keeps Mobimo alive. To realise its objectives, the company focuses on its core competences and on actively implementing values such as fairness, transparency and workplace equality. These are established elements of the company's business ethics that are actively shaped through dialogue with employees and passed on to customers.

To protect the corporate values and promote integrity, every employee signs an anti-corruption statement when they start working for Mobimo.

There were no cases of corruption in 2012, nor were any lawsuits filed due to anti-competitive practices or the formation of cartels or monopolies. In addition, no fines or sanctions were imposed on Mobimo in the year under review for breaches of legal provisions. The new Code of Conduct comes into force in 2013.

Cooperation with regional suppliers, expertise and shared values

To further promote forward-looking ideas, Mobimo takes care to ensure that the suppliers it works with also share its values. Projects are always realised in line with Swiss standards, and the suppliers and partners involved generally come from the corresponding geographical development areas, in other words: from the Zurich metropolitan area, from Central Switzerland or, in the Canton of Vaud, primarily from the Lausanne region. 70–80% of all purchases thus come from regional or national suppliers. Expertise, quality and in particular adherence to Mobimo's requirements with regard to sustainability are also taken into account when selecting suppliers. For example, Mobimo's service contracts with sole contractors and their sub-contractors contain an explicit provision that Mobimo does not tolerate discrimination. Mobimo is drawing up a supplier strategy to ensure that suppliers implement sustainability aspects even more consistently.

Sponsorship

The focus of sponsorship is one of the company's main activities. Sponsorship reflects Mobimo's strategy and concentrates on three areas, focusing primarily on real estate and location promotion and, in specific cases, on social organisations. Mobimo's sponsorship activities are therefore targeted mainly at the regions and locations in which it operates and the issues affecting the company and its industry.

Publishing details

Mobimo Management AG sustainability report GRI Level (Global Reporting Initiative)

Dr. Brigitte Ruetsch, Ruetsch&Partner Consulting GmbH, Management sustainserv GmbH, GRI partner for sustainability

Mobimo's sustainability reporting is based on the Global Reporting Initiative (GRI) Guidelines. GRI is a global non-profit organisation founded in 1997 by CERES (now Investors and Environmentalists for Sustainable Prosperity) and the United Nations Environment Programme (UNEP). GRI aims to promote sustainability reporting and enhance the transparency and comparability of corporate and sustainability reporting worldwide by providing a reference framework and corresponding guidelines. The Application Levels A, B and C indicate the extent – number of performance indicators met, management approach – to which a company applies the G3 or G3.1 Guidelines in its sustainability reporting. Level A is the highest Application Level.

The Mobimo Sustainability Report 2012 fulfils the requirements for Application Level B. This means that Mobimo meets more than 20 performance indicators relating to the economy, the environment, product responsibility, society, labour practices and human rights in full and also fulfils the requirements in respect of its management approach.

Development property Condominiums

Zurich-Altstetten, «Station 595» Badenerstrasse 595

1.1 CONSOLIDATED BALANCE SHEET

All amounts in TCHF
Note
31.12.2012 31.12.2011
Assets
Current assets
Cash
2
97,645 252,059
Trade receivables
3
4,019 6,368
Income tax receivables 973 0
Other receivables
4
22,581 12,113
Trading properties
5
346,467 319,008
Accrued income and prepaid expenses
6
3,881 4,753
Total current assets 475,566 594,301
Non-current assets
Investment properties
– Commercial properties
7
1,367,228 1,317,333
– Residential properties
7
380,440 335,261
– Investment properties under construction
7
244,250 182,964
Property, plant and equipment
– Owner occupied properties
8
16,635 16,630
– Other property, plant and equipment
8
1,420 1,039
Intangible assets
9
3,626 3,524
Investments in associates
10
22,787 20,087
Financial assets
11
1,950 2,153
Deferred tax assets
18
5,091 4,647
Total non-current assets 2,043,428 1,883,638
Total assets 2,518,994 2,477,939
All amounts in TCHF
Note
31.12.2012 31.12.2011
Equity and liabilities
Liabilities
Current liabilities
Current financial liabilities 12
68,739
60,867
Trade payables 13
19,608
14,557
Current tax liabilities 37,863 33,675
Derivative financial instruments 12
0
306
Other payables 14
1,425
154
Advance payments from buyers 15
29,022
25,430
Accrued expenses and deferred income 16
16,540
28,450
Total current liabilities 173,197 163,439
Non-current liabilities
Non-current financial liabilities 12
994,169
1,001,790
Employee benefit obligation 17
957
1,691
Derivative financial instruments 12
26,825
25,052
Deferred tax liabilities 18
122,867
111,784
Total non-current liabilities 1,144,817 1,140,317
Total liabilities 1,318,014 1,303,756
Equity 19
Share capital 180,058 178,933
Treasury shares –1,910 –374
Capital reserves 443,656 494,308
Retained earnings 575,709 501,316
Total equity attributable to the shareholders of Mobimo Holding AG 1,197,514 1,174,183
Attributable to minority interests 3,466 0
Total equity 1,200,980 1,174,183
Total equity and liabilities 2,518,994 2,477,939

1.2.1 CONSOLIDATED INCOME S TATEMENT¹

All amounts in TCHF Note 2012 2011
Income from rental of properties 21 92,765 88,787
Income from sale of trading properties 22 151,954 133,029
Other income 23 776 907
Revenue 245,496 222,724
Gains from revaluation of investment properties 53,934 54,330
Losses on revaluation of investment properties –17,045 –13,136
Net income from revaluation 24 36,889 41,194
Profit on sale of investment properties 25 –124 2,484
Direct expenses for rented properties 21 –12,937 –12,753
Direct expenses from sale of trading properties 22 –130,214 –110,714
Direct operating expenses –143,151 –123,467
Capitalised own account services 6,053 5,771
Personnel expenses 26 –17,958 –18,054
Operating expenses 27 –5,945 –5,542
Administrative expenses 28 –2,563 –2,683
Earnings before interest, tax, depreciation and amortisation (EBITDA) 118,696 122,426
Depreciation and amortisation 29 –1,320 –1,356
Earnings before interest and tax (EBIT) 117,376 121,070
Share of profit of associates 2,900 2,246
Financial income 30 825 1,523
Financial expense 30 –27,449 –32,472
Financial result –23,723 –28,704
Earnings before tax (EBT) 93,653 92,367
Tax expense 31 –17,613 –11,913
Profit 76,039 80,454
Of which attributable to the shareholders of Mobimo Holding AG 76,323 80,454
Of which attributable to minority interests –283 0
EBITDA not including revaluation 81,807 81,232
Operating result (EBIT) not including revaluation 80,487 79,876
Earnings before tax (EBT) not including revaluation 56,764 51,173
Earnings per share in CHF 20 12.33 15.46

1 The income statement was restructured in the year under review and the prior year was adjusted for comparative purposes (see also Note 1.5.2 to the consolidated annual financial statements Adjustment to structure of consolidated income statement).

1.2.2 CONSOLIDATED S TATEMENT OF COMPREHENSIVE INCOME

All amounts in TCHF 2012 2011
Profit 76,039 80,454
Cash flow hedges
– Loss on financial instruments for hedge accounting –1,333 –12,888
– Transfer to income statement –448 –336
– Tax effects 397 3,010
AFS financial assets
– Transfer to income statement 0 –975
Other comprehensive income/loss –1,384 –11,189
Total comprehensive income 74,656 69,265
– of which attributable to the shareholders of Mobimo Holding AG 74,939 69,265
– of which attributable to minority interests –283 0

1.3 CONSOLIDATED S TATEMENT OF CHANGE S IN EQ UIT Y

Market Other Total Equity attributable to
Share Treasury Capital value Hedging retained retained the shareholders of Minority Total
All amounts in TCHF capital shares reserves reserve reserve earnings earnings Mobimo Holding AG interests equity
As at 1 January 2011 148,804 –183 391,269 975 950 429,524 431,450 971,339 1 971,340
Profit 2011 80,454 80,454 80,454 80,454
Cash flow hedges:
– Loss1 –12,888 –12,888 –12,888 –12,888
– Transfer to income
statement1 –336 –336 –336 –336
Tax effects 3,010 3,010 3,010 3,010
AFS financial assets:
– Transfer to income
statement2 –975 –975 –975 –975
Other comprehensive
income/loss 0 0 0 –975 –10,214 0 –11,189 –11,189 0 –11,189
Total comprehensive
income 0 0 0 –975 –10,214 80,454 69,265 69,265 0 69,265
Distribution of capital
contribution reserves –46,204 –46,204 –46,204
Capital increase 30,129 162,730 192,859 192,859
Share-based payments:
– Board of Directors and
management 1,703 –12 604 604 2,295 2,295
– Acquisition of property3 13,477 –13,477 0 0
Acquisition of treasury shares –15,434 –15,434 –15,434
Sale of treasury shares 63 3 66 66
Purchase of minority
interests –4 –4 –4 –1 –5
As at 31 December
2011/1 January 2012 178,933 –374 494,308 0 –9,263 510,579 501,316 1,174,183 0 1,174,183
Profit 2012 76,323 76,323 76,323 –283 76,039
Cash flow hedges:
– Loss1 –1,333 –1,333 –1,333 –1,333
– Transfer to income
statement1 –448 –448 –448 –448
Tax effects 397 397 397 397
Other comprehensive
income/loss 0 0 0 0 –1,384 0 –1,384 –1,384 0 –1,384
Total comprehensive
income 0 0 0 0 –1,384 76,323 74,939 74,939 –283 74,656
Distribution of capital
contribution reserves –55,813 –55,813 –55,813
Capital increase 241 241 241
Conversion of convertible
bond4 885 5,239 6,124 6,124
Share-based payments:
– Board of Directors and
management 2,059 –69 –546 –546 1,444 1,444
Acquisition of treasury shares –4,501 –4,501 –4,501
Sale of treasury shares 906 –9 897 897
Minority interests arising
from acquisition 3,749 3,749
As at 31 December 2012 180,058 –1,910 443,656 0 –10,646 586,355 575,709 1,197,514 3,466 1,200,980

1 The cash flow hedges are described in Note 12 Financial liabilities

² Sale of the investment in Olmero AG

³ The purchase of the property Place de la Gare, Avenue d'Ouchy 4/6 in Lausanne is described in Note 19 Equity

⁴ Details on the conversions can be found in Note 19 Equity and Note 12 Financial liabilities

1.4 CONSOLIDATED CASH FLOW S TATEMENT

Note
All amounts in TCHF
2012 2011
Earnings before tax 93,653 92,367
Net gains from revaluation of investment properties
24
Share-based payments
35
–36,889
1,444
–41,194
2,295
Depreciation on property, plant and equipment
29
1,142 1,115
Amortisation of intangible assets
29
178 242
Loss / profit on disposal of investment properties
25
124 –2,484
Loss on disposal / derecognition of property, plant and equipment
27
27 20
Share of profit of associates –2,900 –2,246
Financial result
30
26,624 30,949
Change
Trade receivables 2,346 –663
Trading properties –14,110 –31,372
Other receivables and accrued income and prepaid expenses –7,338 4,416
Employee benefit obligation –734 –619
Trade payables 5,044 628
Advance payments from buyers 3,593 272
Other current liabilities and accrued expenses and deferred income –12,536 5,944
Income tax paid –8,409 –6,297
Net cash from operating activities 51,259 53,373
Investments in financial assets
11
0 –2
Acquisition of investment properties
7
–118,187 –160,935
Acquisition of property, plant and equipment
8
–896 –614
Acquisition of intangible assets
9
–279 –3,358
Disposal of financial assets
11
275 2,168
Disposal of property, plant and equipment
8
0 4
Disposal of investment properties
7
187 89,040
Dividends received 270 107
Interest received
30
655 440
Net cash used in investing activities –117,976 –73,150
Proceeds from financial liabilities 152,352 274,888
Repayment of financial liabilities –149,420 –198,100
Net cash from conversion of bond into registered shares
12
–71 0
Net cash from capital increases
19
241 192,443
Share capital nominal value repayment
19
–55,813 –46,204
Acquisition of treasury shares
19
–4,501 –15,434
Disposal of treasury shares
19
897 63
Interest paid –31,382 –28,593
Net cash used in/from financing activities –87,697 179,063
Increase/decrease in cash –154,414 159,286
Cash at beginning of reporting period 252,059 92,773
Cash at end of reporting period 97,645 252,059

1.5 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

1.5.1 Business activities

The Mobimo Group is a real estate company which operates exclusively in Switzerland. Its business activities consist of the long-term holding and management of commercial, industrial and residential properties, the construction and selling of owneroccupied residential properties and the development of commercial and residential properties.

The parent company is Mobimo Holding AG, a public limited company under Swiss law, headquartered in Lucerne and listed on the SIX Swiss Exchange.

1.5.2 Group accounting policies

General information

The consolidated annual financial statements of Mobimo Holding AG are prepared in accordance with International Financial Reporting Standards (IFRS) and comply with legislation in Switzerland as well as with Article 17 of the Directive on Financial Reporting issued by the SIX Swiss Exchange.

Consolidation takes place on the basis of the individual financial statements from the Group companies. These statements are audited and drawn up in accordance with standardised guidelines. The balance sheet date is 31 December.

All amounts contained in the consolidated annual financial statements are shown in thousands of Swiss francs (TCHF), unless stated otherwise. The sums and totals of the individual positions may be larger or smaller than 100% due to rounding.

The consolidated annual financial statements have been prepared at amortised cost, with the exception of investment properties, investment properties under construction, derivatives and financial assets available for sale, which are recognised at fair value.

Adjustment to the structure of the consolidated income statement

The consolidated income statement was restructured in the year under review; in particular, the income from rentals, the sale of trading properties as well as other income are combined to give a total sales revenue. The prior year figures were restated accordingly. The income from rentals and the sale of trading properties that was previously clearly set out in the income statement can now be found in the Notes to the consolidated annual financial statements. The individual items in the income statement have not changed in terms of quantity.

Use of estimates and assumptions and the application of judgement

In preparing the consolidated annual financial statements in accordance with IFRS, management is required to make estimates and assumptions and apply its judgement in its application of the accounting policies. This can influence reported income, expenses, assets, liabilities and contingent assets and liabilities at the time the statements are drawn up. The estimates and assumptions used are based on past experience as well as on other factors which appear plausible at that specific point in time. If actual results in the future differ from such estimates and assumptions, the initial estimates and assumptions will be adjusted in the applicable reporting period.

The main estimates and assumptions used in the valuation of assets and liabilities are described below.

Fair values of investment properties

Mobimo holds investment properties with a carrying amount of CHF 1,992 million. The properties are measured at fair value, determined on the basis of the DCF method. This method is itself based on various estimates and assumptions, which are set out in the accounting policy applicable to the properties.

A sensitivity analysis checked the impact of a reduction or increase in discount rates as part of the DCF valuation. A general reduction of 0.25% (average discount rate as at 31 December 2012 4.63%) would increase the fair value of the investment properties as at 31 December 2012 by 5.6% or CHF 111 million. A general increase in the discount rate by 0.25% would reduce the current fair value of the investment properties as at 31 December 2012 by 5.1% or CHF 101 million. Further findings from the sensitivity analysis can be found in the table below.

Incidence sur les justes valeurs d'une modification des taux d'escompte

Change in discount rate Change in fair value in % Change in fair value in CHF million
–0.40 9.2% 183
–0.30 6.8% 135
–0.25 5.6 % 111
–0.20 4.4% 88
–0.10 2.2% 43
Average discount rate as at 31 December 2012 0.0 %
0.10 –2.1% –42
0.20 –4.1% –82
0.25 –5.1 % –101
0.30 –6.0% –120
0.40 –7.9% –158

Estimates of construction costs of trading properties

Mobimo has ongoing building projects (trading properties) amounting to CHF 346 million. Ongoing projects are valued on the basis of the financial forecasts for the individual projects. Valuation allowances are made for loss-making projects as soon as losses become visible. Budgeted overall costs and planned sales prices are determined on the basis of various factors and assumptions. These include past experience, project specifications for the properties, benchmark values for construction costs and other relevant factors such as the planned construction period. Financial forecasts are reviewed on an ongoing basis and adjusted where necessary.

If actual building costs and sales proceeds differ from the planned figures or if unexpected developments during the construction period make an adjustment of the financial forecasts necessary, an adjustment in carrying amounts, i.e. an adjustment in valuation allowances for loss-making projects, may become necessary

Income taxes

Mobimo has deferred tax liabilities of CHF 122.9 million. Deferred taxes are almost exclusively attributable to valuation differences in respect of investment properties and investment properties under construction.

The taxation of gains from the disposal of properties is subject to a special property gains tax in various cantons. The tax rates applied depend on the length of time the property is held and can vary significantly.

In the calculation of deferred taxes on investment properties, a residual holding period is estimated for each property. Should the actual holding period for a property deviate from the estimated holding period, the amount of tax applicable at the time the property is sold may vary considerably from the deferred tax estimated.

Various property gains tax amounts due on property sales in the current and previous periods are not yet definitive as at the financial reporting date. If the definitive amounts involved are not the same as the initial calculations, this may have a material effect on the tax expense for future periods.

Changes in accounting policies

Mobimo has applied the following new or revised standards and interpretations for the first time in its consolidated annual financial statements for 2012.

Standard / Interpretation: – Amendments to IFRS 7 – Disclosures: Derecognition of Financial Assets

These changes had no impact on the consolidated annual financial statements for 2012.

– Amendments to IAS 12 – Deferred Taxes: Recovery of Underlying Assets

Under the amendment to IAS 12, deferred taxes on investment properties are to be determined on a sale basis. This is in keeping with the practice applied by Mobimo and thus had no effect on these 2012 consolidated annual financial statements.

The following new and amended standards and interpretations were approved, but did not take effect until a later date and have not been applied

in advance in these consolidated annual financial statements. The impact on Mobimo's consolidated annual financial statements has not yet been systematically analysed; this means that the information provided at the bottom of the table is merely an initial estimate from Group management.

Planned application
Standard/Interpretation Entry into force by Mobimo (financial year)
IFRS 10 Consolidated Financial Statements: establishes * 1 January 2013 2013 financial year
principles for the presentation and preparation of
consolidated financial statements when an entity
controls one or more other entities
IFRS 11 Joint Arrangements: establishes principles for finan * 1 January 2013 2013 financial year
cial reporting by parties to a joint arrangement
IFRS 12 Disclosure of Interests in Other Entities ** 1 January 2013 2013 financial year
IFRS 13 Fair Value Measurement *** 1 January 2013 2013 financial year
Amendments to IAS 1 Amendment to Presentation of Other Income ** 1 July 2012 2013 financial year
Amendments to IAS 19 Employee Benefits *** 1 January 2013 2013 financial year
IAS 28 (rev. 2011) Investments in Associates and Joint Ventures * 1 January 2013 2013 financial year
Amendments to IFRS 7 Disclosures: Offsetting Financial Assets and Financial * 1 January 2013 2013 financial year
Liabilities
Amendments to IFRSs (May 2012) Annual Improvements to IFRSs 2009 − 2011 Cycle * 1 January 2013 2013 financial year
Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities * 1 January 2014 2014 financial year
IFRS 9 Financial Instruments – Classification **** 1 January 2015 2015 financial year
and Measurement

IFRS 13

The new IFRS 13 Fair Value Measurement standard was published in May 2011. IFRS 13 does not change the rules about which items on the balance sheet must be valued at fair value, but it does contain new standard guidelines for determining the fair value of assets, liabilities and equity instruments, if their application is required or permitted by another standard. IFRS 13 also contains extended rules on disclosures in the notes. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (i.e. an exit price). With non-financial assets, management must assume the "highest and best use" by a market participant, which may differ from its current use. For Mobimo, IFRS 13 will mainly be of significance in the valuation of investment properties. The impact of the new standard is currently being analysed. According to external valuer Wüest & Partner, the early application of IFRS 13 as of 31 December 2012 would result in an increase of around CHF 10 million in the value of the investment property portfolio.

IAS 19

The key changes in the revised standard are as follows: Previously, Mobimo recognised actuarial gains and losses from periodic recalculations in profit or loss on a straight-line basis over the average remaining period of service if they exceeded 10% of the higher of assets and benefit obligations ("corridor method"). With the ending of the corridor method from 1 January 2013 onwards, actuarial gains and losses will be recognised immediately in equity, not through profit or loss, but under other income. As at 31 December 2012, these totalled CHF 3.6 million (1 January 2012: CHF 2.2 million). Greater volatility in employee pension obligations and consolidated equity can therefore be expected. In addition, the revised IAS 19 now provides for a net interest component. This is determined by multiplying the net pension obligation by the discount rate. As the net pension obligation covers both obligations and plan assets, this approach implies a netting of interest expense and expected income from plan assets. At the same time, this means that expected income from plan assets will be at the level of the discount rate. Previously, the return on plan assets was estimated in accordance with expected income based on the respective investment portfolio. If the new rule had been applied in the 2012 financial year, pension expense would have been CHF 0.2 million higher.

  • * No impact or no significant impact expected on Mobimo's consolidated financial statements.
  • ** Additional disclosures or changes in the presentation of Mobimo's consolidated financial statements are primarily expected.
  • *** The impact on the consolidated financial statements is explained below.
  • **** The impact on Mobimo's consolidated annual financial statements has not yet been determined to a sufficiently reliable degree.

Scope of consolidation and consolidation methods

The consolidated annual financial statements encompass all companies over which Mobimo Holding AG has either direct or indirect control. Control means the exertion of a significant influence on the financial and operating policies of an entity so as to obtain benefits from its activities. This is the case if the Group holds more than 50% of voting rights in a company or if executive management is exercised either under a statute or agreement or on a de facto basis (see scope of consolidation in Note 40). Group companies acquired or divested during the course of a year are consolidated from the date on which control is acquired or deconsolidated from the date on which control ceases. For fully consolidated companies, assets, liabilities, expense and income are taken over on a 100% basis using the full consolidation method. All intragroup transactions and relationships as well as interim profit on intragroup transactions and balances are eliminated. Unrealised losses on intragroup transactions are also eliminated, unless there is evidence of an impairment.

Capital is consolidated at the time of acquisition using the purchase method. The purchase price of the acquired company is determined on the basis of the total market value of the acquired assets, the liabilities incurred or assumed and the equity instruments issued by the company. Transaction costs arising in connection with a company acquisition are recognised in profit or loss. Goodwill arising from a company acquisition is recognised as an asset. It corresponds to the excess of the sum of the purchase price, the contribution of the noncontrolling interests to the acquired company and the market value of the equity already owned over net assets, liabilities and contingent liabilities valued at market value. A particular option may be selected for each transaction when valuing the amount attributable to the non-controlling interests. They may be valued either at market value or as the proportion of the non-controlling interests in the market value of the net assets acquired. In the case of a negative difference, the remaining balance is immediately recognised in profit or loss following a further assessment of the market value of the net assets acquired. Goodwill is subject to an impairment test at least once a year, or sooner if there are indications of a decrease in value.

Non-controlling interests are shown separately from the Group's equity. Changes in the interest that do not lead to loss of control are treated as transactions with equity owners. Any difference between the purchase price paid or the consideration received and the amount by which the noncontrolling interests are being adjusted is recognised directly in equity.

Ownership interests of between 20% and 50% in companies which Mobimo exerts a significant influence over but does not control, as well as shares in joint ventures, are accounted for using the equity method and recognised separately in the balance sheet. The market value of the pro rata net assets is determined at the time of acquisition and recognised in the balance sheet together with any goodwill under Investments in associates. In subsequent reporting periods, this figure will be adjusted to reflect Mobimo's share of the additional capital and the profits generated, as well as any dividends.

Ownership interests of below 20% are classified as financial assets "available for sale" and recognised in the balance sheet at fair value. Changes in fair value are recognised in equity, not as income.

Foreign currency translation

The foreign currency positions contained in the individual statements of consolidated companies are translated as follows:

Foreign currency transactions are translated into Swiss francs and recognised at the exchange rate valid on the day of the transaction. Any monetary assets and liabilities denominated in foreign currency are translated in the balance sheet at the rate on the financial reporting date. Exchange rate differences arising from retranslations or revaluations of foreign currency positions on the financial reporting date are recognised through profit or loss.

At at the end of 2012, Mobimo held no assets or liabilities in foreign currencies. All subsidiaries present their financial statements in Swiss francs, which means that consolidation produces no exchange differences.

Cash

Cash comprises cash in hand and call deposits with banks as well as fixed-term deposits with banks and short-term money market investments with a term of up to 90 days from the time of acquisition. These are recognised at nominal value.

Receivables

Receivables are measured at amortised cost, which generally equates to the nominal value less any necessary valuation allowances for non-collectible receivables. The valuation allowances are individual valuation allowances for specifically identified positions where there are objective indications that the outstanding amount will not be collected in full.

Trading properties

The "trading properties" category includes properties for conversion as well as new-builds where Mobimo performs the production of condominiums in order to subsequently sell them. Trading properties also includes properties that Mobimo has acquired as part of projects for the "Investment for Third Parties" business area and that it intends or has contractually agreed to sell to third-party investors in the future.

Trading properties are valued at the lower of cost or market value. With loss-making properties, provisions are created immediately for the total loss expected. See also the explanations in the section entitled Use of estimates and assumptions and the application of judgement (Estimates of construction costs of trading properties).

Investment properties

Commercial, residential and investment properties under construction

These properties are classified as investment properties under IAS 40. They are properties which have been either acquired or built by the company and which will be held and managed over a substantial period of time.

Land held for undetermined future use, investment properties under construction and properties which are being converted, renovated or developed are also classified as investment properties.

These properties are initially valued at cost including directly attributable transaction costs. After initial recognition, they are valued at fair value. To this end, independent property experts Wüest & Partner conduct a valuation as at the financial reporting date. Fair values are determined using the DCF (discounted cash flow) method.

The procedure for determining fair values using the DCF method is as follows: Fair values do not take account of any real estate sales tax, real property gains tax or value added tax, nor do they take account of any other costs or commissions due upon any property sale. With the exception of investment properties under construction, neither future investments to enhance value nor any related additional income arising from such investments are factored in. Rental income, operating and maintenance costs, refurbishment costs and the discount rate are based on the following assumptions:

Rental income

Rents are factored into valuations on the basis of current rents and contractually agreed conditions. With leases of limited duration, the period following expiry of the lease is accounted for using the potential collectible rental income, from the current perspective, over the long term. Potential rental income in line with the market is determined on the basis of the most recent leases concluded either for the property concerned or for comparable properties in the vicinity of the property concerned, as well as on the comprehensive real estate market research carried out by Wüest & Partner. Tenants' options to extend a lease are taken into account when actual rents are less than the market rents determined. Rental properties that are currently vacant are incorporated into the valuation taking account of marketing periods customary for the market.

Operating and maintenance costs

Operating and maintenance costs are determined using figures from the past, the budgets approved by Mobimo and benchmarking values from Wüest & Partner.

Refurbishment costs

Refurbishment costs aimed at preserving the value of a property are determined using investment plans and construction cost analysis tools.

Discount Rate

Discounting is undertaken for each property in accordance with location and real estate criteria. These reflect both the location-relevant features of the macro and micro situation and the fundamental parameters of the current management situation. The discounting rates applied are subject to being measured and checked empirically using known change of ownership and transaction data.

Investments and revaluation

Replacement and additional investments are capitalised in properties' carrying amounts if it is likely that Mobimo will derive economic benefits from them in the future.

The change in fair values is recognised in profit or loss. Any deferred tax liabilities or assets are recognised in the income statement as tax expense or tax income. Investment properties are not depreciated.

Property, plant and equipment

Property, plant and equipment and owner-occupied properties are valued at cost less accumulated depreciation and any accumulated impairment losses.

Components of an item of property, plant and equipment with different useful lives are recognised individually and depreciated separately.

Subsequent investments are capitalised in the carrying amount of property, plant and equipment if it is likely that Mobimo will derive economic benefits from these in the future. Maintenance and renovation costs are charged to the income statement. Property, plant and equipment is depreciated using the straight-line method over the shorter of its estimated useful life or the term of the lease.

Useful life is as follows:

Buildings 50 years
Interior fixtures and fittings 15 years
Technical equipment 15 years
Office furnishings 8 years
Office equipment 5 years
Telephone installations 5 years
Vehicles 5 years
Hardware 3 years

Leasing

Mobimo does not possess any leasing agreements classed as finance leases.

Payments for operating leases are recognised in profit or loss over the term of the lease.

Intangible assets

Software and other intangible assets (e.g. purchase rights) are measured at cost less accumulated amortisation and any additional amortisation resulting from impairment. Software is amortised over a useful estimated life of three to five years.

Financial assets

Financial assets comprise long-term loans to third parties and non-consolidated equity investments. Loans are recognised at amortised cost less any valuation allowance. Non-consolidated equity investments are classified as "available for sale" and measured at fair value; with the exception of impairments, changes in fair value are recognised in equity, not through profit or loss. If a fair value cannot be reliably defined, the non-consolidated equity investment is measured at cost.

Impairment of non-financial non-current assets

The intrinsic value of property, plant and equipment and intangible assets is assessed at least once a year. If there are indications of sustained decreases in value, an impairment test is carried out.

Recoverable amounts are calculated annually for other intangible assets with an indefinite useful life and intangible assets not yet available for use, even if there are no indications of any decrease in value.

Non-current assets held for sale

Non-current assets and groups of assets including directly associated liabilities ("disposal groups") are classified as 'held for sale' and presented separately in the balance sheet as separate assets or liabilities if the carrying amount is to be recovered principally through a sale transaction rather than through continuing use. A prerequisite for this is that the sale is highly probable and the asset is available for immediate sale in its current condition. For a sale to be regarded as highly probable, certain criteria must be met; for example, the sale must be expected to take place within 12 months.

Trade and other short-term payables

Trade and other payables are measured at amortised cost, which generally corresponds to the nominal value of the payables.

Financial liabilities

Financial liabilities consist of outstanding convertible bonds and mortgage-secured bank loans. In the case of long-term financial liabilities, the residual maturity is agreed as being longer than twelve months. All other agreements are classified as short term, incl. amortisation payments that are due within twelve months after the reporting date.

At initial recognition, financial liabilities are recognised at fair value less transaction costs. Subsequent to initial recognition, financial liabilities are measured at amortised cost, with the difference between the amount to be repaid and the carrying amount being amortised over the term using the effective interest method.

Outstanding convertible bonds are recognised in the balance sheet in accordance with IAS 32 and broken down into liabilities (part of financial liabilities) and equity. The equity component corresponds to the difference between the proceeds from the issue before issue costs and the fair value of the financial liabilities as at the issue date. The issue costs are split pro rata between the liability and equity components, and are therefore offset against the convertible bond. The equity component remains unchanged. The difference between the recognised financial liability and the redemption amount will be amortised in profit or loss over the term of the convertible bond using the effective interest method.

Derivative financial instruments

Mobimo uses derivative financial instruments (e.g. interest rate SWAPS and forward rate agreements) to hedge the interest rate risks of financial liabilities.

Derivative financial instruments are measured at fair value at initial recognition and thereafter. Gains and losses from adjustments to fair values are treated as follows:

The hedging of interest rate risk on financial liabilities is classified as a cash flow hedge under certain circumstances. The effective portion of the change in derivatives' fair values is recognised directly in equity via a special reserve (hedging reserve). As soon as the hedged transaction (interest payments) takes place, cumulated unrealised gains and losses are transferred to the income statement and recognised in the financial result.

Changes in fair values of all other derivatives are recognised in profit or loss in the financial result.

Provisions

Provisions are set aside if an event which has taken place has given rise to a present legal or constructive obligation, it is probable that there will an outflow of resources and a reliable measurement can take place.

Employee benefits

Liabilities from defined benefit plans are determined annually for each plan, by setting the present value of the defined benefit obligation using the projected unit credit method. The discount rate used for the calculation is based on the interest rate of first-class industrial bonds with very similar terms to the liabilities. This method takes into account the market value of plan assets, unrealised actuarial profits and losses, and unrealised past service costs. Pension costs associated with work performed in the reporting period (current service cost) are recognised in profit or loss. Past service cost (the change in obligation for employee service in prior periods due to new or improved benefits) is recognised in employee benefit expense on a straight-line basis until the amended benefits become vested. Actuarial and investment gains and losses from periodic recalculations are recognised in profit or loss on a straight-line basis over the average remaining period of service provided they exceed 10% of the higher of plan assets and the benefit obligation.

Provisions are made for deficits arising from those calculations. Surpluses are only capitalised up to a specific amount that does not exceed the sum of unrealised past service costs, unrealised actuarial losses and gains from future contribution refunds or reductions.

Equity

The share capital is presented as equity since there is no repayment obligation and no dividend guarantee. Transaction costs incurred during a capital increase and attributable directly to the issuing of new shares are deducted from the amount of the capital increase less associated income tax.

Dividends are presented as liabilities as soon as they are approved by the General Meeting and are thus due.

Treasury shares

The costs for the acquisition (purchase price and directly attributable transaction costs) of treasury shares are offset against equity. Shares which have been bought back are classified as treasury shares and deducted from equity as a negative item.

Revenue recognition

Revenues from the rental of investment properties include net rental revenues, i.e. target rental revenues less vacancy costs. In the case of rental agreements classed as operating leases, the rents are recognised on an accrual basis over the term of the lease. If the tenants are provided significant incentives (e.g. rent-free periods), the cost of such incentives is recognised over the lease term on a straight-line basis as an adjustment of the rental income. At present, Mobimo has no rental agreements classed as finance leases.

In accordance with the provisions of IFRIC 15, sales proceeds from trading properties are recognised after construction is completed at the point when control and the significant risks and rewards of ownership are transferred.

Gains from the disposal of investment properties correspond to the difference between net proceeds and the fair value recognised. The gain is recognised when the significant risks and rewards are transferred.

Interest on borrowing

Interest on loans taken out to finance construction projects (trading properties and investment properties under construction) is capitalised over the construction period.

All other borrowing interest is recognised as an expense in the income statement using the effective interest method.

Tax

Income taxes include current and deferred income taxes. They are recognised in profit or loss, with the exception of income tax on transactions that are recognised in other income or directly in equity. In these cases, the income tax is similarly charged to other income or directly to equity.

Current income taxes include the expected taxes payable on the relevant taxable result, calculated using the tax rates enacted or substantially enacted at the reporting date, capital gains taxes on property sales effected and any adjustments to tax liabilities or assets from previous years.

Deferred taxes are recognised for temporary differences between the respective tax bases in the tax balance sheet and the consolidated balance sheet, in accordance with the balance sheet liability method. Measurement of deferred taxes takes account of the point in time when the asset/liability is expected to be realised/settled and the manner in which carrying amounts are expected to be recovered or settled. The tax rates used are those that are enacted or substantially enacted at the reporting date.

Deferred tax assets can only be recognised to the extent that it is probable that future profits will be available, against which the temporary differences can be offset.

Share-based payments

Share-based payments are transactions whereby Mobimo receives goods or services in return for equity instruments such as shares or options. The Board of Directors and the Executive Board are currently subject to compensation rules under which compensation is paid partly in the form of shares. Both schemes are classified as share-based payments. The costs of share-based payments are recognised in profit or loss in personnel expenses, spread over the vesting period. The corresponding counter-posting takes place in equity. The vesting period is the period during which unlimited entitlement to the shares or options granted is earned. The valuation is based on the fair value of the equity instruments as at the grant date. The grant date is the date on which both parties agree to the plan for the share-based payment and reach a joint agreement on the terms and conditions of the plan.

Earnings per share

Earnings per share are calculated from the Group result attributable to the shareholders of Mobimo Holding AG, divided by the weighted average of the number of shares outstanding during the reporting period. Diluted earnings per share additionally take account of any shares arising from the exercise of option or conversion rights.

1.5.3 Segment reporting

The management structure of the Mobimo Group and thus the internal reporting to the Group's key decision-maker is based on the individual divisions. The divisions themselves are structured according to the services and/or activities of the Group.

Reportable segments pursuant to IFRS 8 are the two divisions Portfolio Management and Development. The business activities of these two divisions can be described as follows:

Portfolio Management

Portfolio Management focuses on the long-term holding and management of commercial and residential properties. This division also handles the buying and selling of investment properties.

Development

The Development division is responsible for purchasing land as well as for the construction and sale of residential property (newly constructed buildings and redeveloped buildings) as well as for residential and commercial properties. It also holds land, properties under construction and completed properties which will be transferred to the investment property portfolio. These investment properties are purchased with certain construction shortcomings or substantial vacancy rates. As soon as the vacancy rate of a development property falls below 10% on a long-term basis, it is reclassified as an investment property on 1 January of the subsequent year (and is thus transferred to the Portfolio Management division). Investment properties with a long-term vacancy rate of over 10% where vacancy is unlikely to be brought below 10% on a long-term basis without significant refurbishment measures are transferred from investment properties to development properties. Also included are projects from the "Investments for Third Parties" business area, which is currently being set up.

The Board of Directors, which has been identified as the key decision-maker, monitors the results of the individual divisions on the basis of EBIT. These figures are determined using the same accounting principles as in the consolidated annual financial statements prepared in accordance with IFRS. Income tax and interest are not included in the segment results and are recognised under Reconciliation. The costs of central functions such as Finance and IT, Marketing and Communication, Legal Services and Central Services, like the expenses for the Executive Board, are attributed to the segments on the basis of usage. The expenses in connection with the Board of Directors are not attributed to the segments and are reported under Reconciliation. The other income that was also not allocated to the divisions in the prior year, as well as depreciation and amortisation, will be reattributed to the divisions. The prior year has been adjusted for comparative purposes.

Segment assets include trading properties, investment properties, owner-occupied properties and trade receivables. No other assets are attributed to the segments. Segment assets are measured in the same way as in the consolidated annual financial statements prepared in accordance with IFRS.

There were no transactions between the individual segments. Accordingly, there was no need to eliminate intersegment transactions.

Since Mobimo operates exclusively in Switzerland, revenues and non-current assets do not need to be broken down on a geographical basis.

Mobimo did not enter into any transactions with clients amounting to more than 10% of Group revenues.

A further breakdown of income from properties by sub-segment (commercial, residential and trading properties) can be found in Note 21.

Segment information 2012

Portfolio
All amounts in TCHF Management Development Total segments Reconciliation Total
Income from rental of properties 83,415 9,350 92,765 92,765
Net income from revaluation 26,169 10,720 36,889 36,889
Income from sale of trading properties 151,954 151,954 151,954
Profit on disposal of investment properties –124 –124 –124
Other income 716 60 776 776
Total segment income 110,176 172,084 282,261 282,261
Segment result EBIT 91,985 26,819 118,804 −1,4281 117,376
Financial result –23,723
Earnings before tax (EBT) 93,653
Tax –17,613
Profit 76,039
Trading properties 346,467 346,467 346,467
Investment properties 1,540,986 206,682 1,747,668 1,747,668
Owner occupied properties 16,635 16,635 16,635
Investment properties under construction 244,250 244,250 244,250
Trade receivables 4,019 4,019 4,019
Total segment assets 1,561,640 797,399 2,359,039 2,359,039
Non-attributed assets 159,955 159,955
Total assets 2,518,994
Depreciation and amortisation –609 –711 –1,320 –1,320
Investments in non-current assets 10,268 120,009 130,277 1,175 131,453

Segment information 2011

Portfolio
All amounts in TCHF Management Development Total segments Reconciliation Total
Income from rental of properties 72,112 16,675 88,787 88,787
Net income from revaluation 27,849 13,345 41,194 41,194
Income from sale of trading properties 133,029 133,029 133,029
Profit on disposal of investment properties 2,067 417 2,484 2,484
Other income 907 907 907
Total segment income 102,935 163,466 266,401 266,401
Segment result EBIT 83,467 39,100 122,567 −1 4961 121,070
Financial result –28,704
Earnings before tax (EBT) 92,367
Tax –11,913
Profit 80,454
Trading properties 319,008 319,008 319,008
Investment properties 1,451,971 200,623 1,652,594 1,652,594
Owner occupied properties 16,630 16,630 16,630
Investment properties under construction 182,964 182,964 182,964
Trade receivables 6,298 70 6,368 6,368
Total segment assets 1,474,899 702,665 2,177,564 2,177,564
Non-attributed assets 300,375 300,375
Total assets 2,477,939
Depreciation and amortisation –669 –688 –1,356 –1,356
Investments in non-current assets 10,054 107,532 117,586 8,126 125,712

1.5.4 Notes to the consolidated financial statements

1. Changes in the scope of consolidation

On 23 and 24 August 2012, a total of 113 shares were purchased in Glarus-based Immobilien Invest Holding AG, which equates to around 75.33% of this company's share capital. Immobilien Invest Holding AG holds all of the shares in Petit Mont-Riond SA, Lausanne, which owns the property at Rue Voltaire 2–12 in Lausanne. As the purchased companies did not qualify as a business within the meaning of IFRS 3, the acquisition did not qualify as a business combination but represented a purchase of assets.

The property at Badenerstrasse 595 in Zurich was likewise purchased in the year under review by acquiring the shares of Ruf Immoblien AG, Ennetbürgen. As the purchased company did not qualify as a business within the meaning of IFRS 3, the acquisition did not qualify as a business combination but represented a purchase of assets. Under a merger agreement dated 2 August 2012, Ruf Immobilien AG was merged with Mobimo AG.

As part of restructuring efforts within the companies covered under the scope of consolidation, the companies FLON Events Sàrl, Lausanne and LO Gestion SA, Lausanne were merged to form LO Immeubles SA, Lausanne.

There were no changes to the scope of consolidation in the prior year. The property at Albulastrasse/Hohlstrasse in Zurich was purchased by acquiring the shares of Büha-Verwaltungs AG. As the purchased company did not qualify as a business within the meaning of IFRS 3, the acquisition did not qualify as a business combination but represented a purchase of assets. Under a merger agreement dated 17 May 2011, Büha-Verwaltungs AG was merged with Mobimo AG. Under the terms of a restructuring, the assets of Mobimo Finance Ltd. were transferred to Mobimo Holding AG and LO Holding Lausanne-Ouchy SA and the company was subsequently liquidated. In addition, the investment in O4Real AG was transferred from Mobimo Holding AG to LO Holding Lausanne-Ouchy SA.

2. Cash

Cash is comprised exclusively of current account deposits.

Of the CHF 97.6 million (prior year: CHF 252.1 million) in cash, the entire amount is freely available. The average rate of interest applicable to cash amounted to 0.05% (prior year: 0.11%).

3. Trade receivables

2012 2011
Outstanding purchase prices real estate due from third parties 0 124
Outstanding purchase prices real estate due from related parties 0 70
Outstanding rents and ancillary costs due from third parties 4,951 6,965
Outstanding rents and ancillary costs due from third parties 124 123
Less doubtful debt allowance for outstanding rent and ancillary costs –1,056 –914
Total trade receivables 4,019 6,368

Outstanding rents and ancillary costs includes CHF 1.4 million (prior year: CHF 1.8 million) in receivables from rent and CHF 3.6 million (prior year: CHF 5.2 million) from ancillary costs; the remaining amount is attributable to other receivables from property accounts.

The age structure of receivables that are not impaired is as follows:

2012 2011
Not past due 3,862 5,663
Up to 30 days 51 448
Up to 90 days 30 129
Over 90 days 76 128
Total 4,019 6,368

Doubtful debt allowances for outstanding rent and ancillary costs developed as follows in the year under review:

2012 2011
Specific valuation allowances
As at 1 January 914 916
Change in valuation allowances 142 –2
As at 31 December 1,056 914

There were no general valuation allowances as at the reporting date. In the year under review, specific allowances amounting to TCHF 142 (prior year: reversal of TCHF 2) were made. Based on past experience, Mobimo does not expect any additional defaulting.

4. Other receivables

Total other receivables 22,581 12,113
Receivables from related parties 1 0
Advance payments for land purchases 3,437 672
Receivables WIR 394 396
Other receivables from third parties 17,396 10,744
Tax receivables (withholding tax and VAT) 1,353 301
2012 2011

Other receivables from third parties include CHF 12.9 million (prior year: CHF 10.6 million) in public sector guarantees.

As at the reporting date, no receivables were overdue and no valuation allowances were necessary.

5. Trading properties

2012 2011
Land 81,529 57,405
Properties under construction 155,987 153,027
Completed real estate and development properties 108,952 108,576
Total trading properties 346,467 319,008

In accordance with the provisions of IFRIC 15, revenues and thus gains from the sale of trading properties are not recognised until the property has been completed and title has been transferred to the buyer. Trading properties are measured at cost.

In the year under review, land was acquired in Dübendorf, Sonnentalstrasse 10, and sold in Erlenbach, Forchstrasse/Glärnischstrasse and Müllheim, Grüenegg.

Properties that have recently been classified as under construction include the project at Regensdorf, im Pfand, which is being transferred from investment properties, and the project at Zurich, im Brächli, which was changed from a conversion property to a completed property in the prior year. The Adliswil, Wilacker I, Adliswil, Wilacker II and Zurich, Hinterbergstrasse 53 projects were completed during the course of the year. A total of 68 apartments were completed for sale within the scope of these three projects. Of these 68 apartments, 61 had been sold as at 31 December 2012. Furthermore, the Adliswil Wilacker III project, comprising three apartment buildings, has been completed and transferred to an investor.

Of the last few apartments that had not been sold in previous years (Horgen, Stockerstrasse 54 and Wädenswil, Rötiboden), as well as those at Zürich, Turbinenstrasse (Mobimo Tower), nine were sold in the year under review. In addition, two apartments were sold in Egerkingen. The properties at Zurich, Badenerstrasse 595 and St. Erhard, Längmatt were purchased as development properties to be sold at a later date.

On the trading properties, valuation allowances for properties which have not yet been sold amount to CHF 0.65 million (prior year: CHF 0.01 million). The carrying amount for these units appraised at the estimated net selling price is CHF 2.3 million.

6. Accrued income and prepaid expenses

Total accrued income and prepaid expenses 3,881 4,753
Other items relating to related parties 25 0
Other items 331 812
Accruals resulting from property accounts relating to associates 205 13
Accruals resulting from property accounts relating to third parties 3,320 3,928
2012 2011

7. Investment properties

Investment properties developed as follows:

Commercial Residential Investment properties 2012
2012 properties properties under construction total
Market value as at 1 January 1,317,333 335,261 182,964 1,835,558
Acquisition costs
As at 1 January 1,168,908 289,161 180,007 1,638,076
Increases from purchases 437 0 23,142 23,579
Increases from investments 18,968 3,824 83,907 106,698
Disposals –256 0 0 –256
Transfers to trading properties 0 –9,835 0 –9,835
Transfers from/to property, plant and equipment –661 0 0 –661
Transfers between segments 21,117 34,128 –55,244 0
Cumulative acquisition costs as at 31 December 1,208,513 317,277 231,812 1,757,601
Revaluation
Total as at 1 January 148,425 46,100 2,957 197,482
Gains on valuations 23,984 13,665 16,285 53,934
Losses on valuations –16,432 0 –613 –17,045
Disposals –55 0 0 –55
Transfers between segments 2,793 3,398 –6,191 0
Cumulative revaluation as at 31 December 158,715 63,163 12,438 234,317
Market value as at 31 December 1,367,228 380,440 244,250 1,991,918
Fire insurance value 1,294,396 275,493 204,106 1,773,996
Commercial Residential Investment properties 2011
2011 properties properties under construction total
Market value as at 1 January 1,234,893 202,829 270,946 1,708,668
Acquisition costs
As at 1 January 1,104,274 184,195 252,387 1,540,856
Increases from purchases 34,242 0 9,500 43,742
Increases from investments 12,334 2,132 104,264 118,729
Disposals –74,970 0 –62 –75,032
Transfers from intangible assets 0 0 10,691 10,691
Transfers from/to property, plant and equipment 3,245 0 –4,155 –910
Transfers between segments 89,783 102,835 –192,618 0
Cumulative acquisition costs as at 31 December 1,168,908 289,161 180,007 1,638,076
Revaluation
Total as at 1 January 130,618 18,634 18,559 167,811
Gains on valuations 28,397 6,877 19,056 54,330
Losses on valuations –9,369 –1,447 –2,320 –13,136
Disposals –11,521 0 –3 –11,524
Transfers between segments 10,300 22,035 –32,335 0
Cumulative revaluation as at 31 December 148,425 46,100 2,957 197,482
Market value as at 31 December 1,317,333 335,261 182,964 1,835,558
Fire insurance value 1,284,088 293,500 189,953 1,767,542

The following new plots or investment properties were acquired for CHF 23.5 million in the year under review:

Affoltern a.A., Obstgartenstrasse (Site II - care home) Investment properties under construction
St. Gallen, Wassergasse 42/44 (purchase of condominiums) Commercial property
Lausanne, Rue Voltaire 2–12 Investment properties under construction

Two parts of the buildings in the properties at Dübendorf, Sonnentalstrasse 5 and Dübendorf, Zürichstrasse 98 were recognised as disposals.

The following properties are shown under Transfers:

from to
Aarau, Polygon − Industriestrasse Investment properties under construction Commercial properties
Regensdorf, Schul-/Riedthof-/Feldblumenstrasse Residential properties Investment properties under construc
tion/trading properties
Lausanne, Rue des Côtes-de-Montbenon 16 (building parts) Commercial properties Owner occupied properties
Zurich, Manessestrasse 190 Investment properties under construction Residential properties

All costs directly attributable to the acquisition of a property (purchase price, notary's costs and change in ownership costs, buying commissions, subsequent investments with future economic benefits, etc.) are capitalised as acquisition costs.

Residential properties under construction at Affoltern am Albis, Obfelderstrasse; Lausanne, Rue Voltaire 2–12; Zurich, Turbinenstrasse site C; Regensdorf, Schulstrasse/Riedthofstrasse/Feldblumenstrasse, and commercial properties under construction at Affoltern am Albis, Obstgartenstrasse; Horgen, Seestrasse 93 (Meilenwerk); Lausanne, Avenue d'Ouchy 4/6 (Administration) and Lausanne, les Pépinières are accounted for under investment properties under construction.

Accounting for investment properties is based on annual estimates of market values as at 31 December, which are carried out by an independent property expert. The market value appraisal as at 31 December 2012 was carried out by Wüest & Partner AG using the DCF method.

For the DCF valuations as at 31 December 2012, the discount rates applied averaged 4.63% (prior year: 4.76%), within a range from 3.9% to 8.0% (prior year: 4.1% to 8.0%).

8. Property, plant and equipment

Owner occupied Other 2012
2012 properties P, P & E total
Acquisition values
As at 1 January 19,593 2,185 21,778
Increases 128 768 896
Disposals 0 –67 –67
Transfers to commercial property 661 0 661
Cumulative acquisition values as at 31 December 20,381 2,887 23,268
Depreciation
As at 1 January –2,963 –1,146 –4,110
Increases –783 –359 –1,142
Disposals 0 39 39
Cumulative depreciation as at 31 December –3,746 –1,466 –5,212
Net carrying amount as at 31 December 16,635 1,420 18,056
Fire insurance value 14,159 1,825 15,984

Owner occupied properties include the property at Küsnacht, Seestrasse 59, and part of the property at Lausanne, Rue de Genève 7, which are used by Mobimo Management AG as its administrative centre. Also included is a room for cultural activities in the property at Lausanne, Rue des Côtes-de-Montbenon 16.

Other property, plant and equipment comprises movables, vehicles and computer hardware. Property, plant and equipment does not include any items under financial leasing arrangements.

Owner occupied Other 2011
2011 properties P, P & E total
Cost
As at 1 January 18,939 1,844 20,783
Additions 44 569 613
Disposals 0 –228 –228
Transfers to commercial property –3,545 0 –3,545
Transfers from investment properties under construction 4,155 0 4,155
Cumulative acquisition values as at 31 December 19,593 2,185 21,778
Depreciation
As at 1 January –2,530 –969 –3,498
Additions –734 –381 –1,115
Disposals 0 204 204
Transfers to commercial property 300 0 300
Cumulative depreciation as at 31 December –2,963 –1,146 –4,109
Net carrying amount as at 31 December 16,630 1,039 17,668
Fire insurance value 13,753 1,039 14,792

9. Intangible assets

Purchase options / 2012
2012 construction projects Software total
Cost
As at 1 January 3,051 680 3,731
Additions 1 278 279
Disposals 0 0 0
As at 31 December 3,053 957 4,010
Amortisation
As at 1 January 0 –207 –207
Additions 0 –178 –178
Disposals 0 0 0
Cumulative amortisation as at 31 December 0 –384 –384
Net carrying amount as at 31 December 3,053 573 3,626

Purchase options/construction projects consists primarily of a notarised purchase option for a plot in Merlischachen (SZ).

Purchase options/ 2011
2011 construction projects Software total
Cost
As at 1 January 10,692 975 11,668
Additions 3,051 307 3,358
Disposals 0 –603 –603
Transfers to investment properties under construction –10,691 0 –10,691
As at 31 December 3,051 680 3,731
Amortisation
As at 1 January 0 –568 –568
Additions 0 –242 –242
Disposals 0 603 603
Cumulative amortisation as at 31 December 0 –207 –207
Net carrying amount as at 31 December 3,051 473 3,524

10. Investments in associates and joint ventures

2012 2011
Investment in Flonplex SA, Lausanne (40% stake) 6,625 5,332
Investment in Parking du Centre SA, Lausanne (50% stake) 16,162 14,755
Total 22,787 20,087

Flonplex SA is a cinema operator whose majority shareholder is Pathé Schweiz AG. Parking du Centre SA is a joint venture with Vinci Park SA and is a car park operator.

Summary financial information for the 2012 financial year (basis: 100%):

Flonplex SA Flonplex SA PC SA PC SA
2012 2011 2012 2011
Assets 29,341 27,118 58,600 57,258
Liabilities 12,779 13,789 26,276 27,748
Revenues 12,501 12,517 6,186 6,188
Profit 3,733 2,591 2,815 2,419

11. Financial assets

Financial assets can be broken down as follows:

Total 1,950 2,153
Non-consolidated equity investments (available for sale) 1,870 1,871
Loans to third parties 80 282
Financial assets
2012 2011

The non-consolidated equity investments primarily comprise the investment in Parking St-François SA.

Financial assets changed as follows:

2012 2011
Acquisition values
As at 1 January 2,218 3,017
Additions 0 34
Disposals –268 –833
Cumulative acquisition values as at 31 December 1,950 2,218
Valuation allowances
As at 1 January –65 –65
Disposals 65 0
Cumulative valuation allowances as at 31 December 0 –65
Net carrying amount as at 31 December 1,950 2,153

A loan of CHF 0.2 million was repaid by Parking Port d'Ouchy SA in the year under review. Disposals for 2011 include the repayment of a loan of CHF 0.8 million by Parking du Centre SA.

As at the reporting date, there were no overdue items. Non-impaired loans were granted exclusively to borrowers with good creditworthiness. Based on past experience, Mobimo does not expect any defaulting on these loans.

12. Financial liabilities

2012 2011
Fixed-rate mortgage amortisation due within 12 months 4,551 4,697
Mortgages due for extension or repayment within 12 months1 64,188 56,170
Total current financial liabilities 68,739 60,867
Mortgages 828,449 831,790
Convertible bond 165,719 170,000
Total non-current financial liabilities 994,169 1,001,790
Total financial liabilities 1,062,908 1,062,657

1 including building loans for properties under construction

As at the reporting date, amounts due were as follows:

2012 2011
2012 n/a 60,867
2013 68,739 58,513
2014 215,016 254,574
2015 32,918 32,287
2016 15,961 9,348
2017 74,094 73,481
2018 36,867 25,254
2019 82,211 71,598
2020 134,776 133,754
2021 39,471 50,438
2022 53,476 53,623
2023 to 2041 309,380 238,923
Total financial liabilities 1,062,908 1,062,657

Maturity profile

The average residual term of overall financial liabilities was maintained at the same level and amounted to 9.1 years as at 31 December 2012 (prior year: 9.2 years).

Interest rate periods are as follows (composition until next interest rate adjustment):

2012 2011
Up to one year 68,739 60,867
Up to 2 years 215,016 58,513
Up to 3 years 32,918 254,574
Up to 4 years 15,961 32,287
Up to 5 years 74,094 9,348
Over 5 years 656,179 647,069
Total financial liabilities 1,062,908 1,062,657

Certain mortgage interest rates used to be hedged in advance by means of forward rate agreements. Such forward rate agreements generally qualify as derivatives embedded in credit agreements and have to be measured at fair value in accordance with IAS 39. Some of these forward rate agreements were classified as cash flow hedges pursuant to IAS 39, and fair value adjustments relating to the effective portion of the hedge recognised directly in equity via a separate item (hedging reserve). When the hedged interest cash flows occur, cumulative unrealised gains or losses are transferred to the income statement. This applies until 2022. An amount of TCHF 448 (prior year: TCHF 336) was reposted to the income statement in the year under review. As at 31 December 2012 and 2011 no new forward rate agreements of this kind were used for cash flow hedges, or the term of the hedged financial liabilities had already started.

Mobimo has also concluded separate interest rate hedges (swaps) for mortgages amounting to CHF 209.0 million (prior year: 238.3 million). Of these, CHF 129.7 million (prior year: CHF 130.0) are classified as cash flow hedges. Consequently, fair value adjustments were recognised under other comprehensive income in equity, and not through the income statement. The fair value of these instruments amounts to CHF –14.2 million (prior year: CHF –12.9 million). There are also a further CHF 79.3 million (prior year: CHF 108.3 million) of interest rate hedges not classified as cash flow hedges. Fair value adjustments were thus recognised through the income statement. The fair value of interest rate swaps not held for hedge accounting with a negative replacement value amounts to CHF –12.6 million (prior year: CHF –12.5 million). As at 31 December 2012 the fair value of all derivatives thus stood at a net amount of CHF –26.8 million (prior year: CHF –25.4 million).

¹ Non-current financial liabilities include, in addition to mortgage liabilities, the convertible bond with a carrying amount of CHF 165.7 million (nominal value CHF 168.7 million) maturing on 30 June 2014

In addition to mortgage liabilities, non-current financial liabilities also include a convertible bond that was issued on 30 June 2010 with the following features:

Volume: CHF 175 million
Interest rate: 2.125% p.a., payable annually on 30 June, with the first payment on 30 June 2011
Term: 4 years (30 June 2010-30 June 2014)
Conversion price: CHF 207.99, original conversion price before the capital increase of 6 December 2011 was CHF 210.37
Listing: SIX Swiss Exchange
Swiss security no.: 11299133

Each convertible bond has a nominal value of CHF 5,000 and can be converted up to seven trading days before the end of the term into registered shares at the conversion price of CHF 207.99. The conversion price was adjusted following the capital increase of 6 December 2011 and the resulting dilution; the original conversion price was CHF 210.37 per registered share. A maximum of 841,386 registered shares may be issued at this conversion price under the convertible bond (831,866 registered shares before the capital increase). The company has created conditional capital for the creation of the registered shares. The prospective exercise of conversion rights would dilute earnings per share. The convertible bond can be redeemed early at any time if more than 85% of the original bond volume is converted and/or redeemed or, from 21 July 2013, if the closing price of Mobimo Holding AG registered shares on the SIX Swiss Exchange (SIX) is 130% or more of the conversion price over a period of 20 consecutive trading days.

As at the reporting date, the convertible bond was recognised as follows:

31. 12. 2012 31. 12. 2011
Convertible bond before issuance costs 170,910 170,910
Pro-rated issuance costs –3,732 –3,732
Amortisation of difference between liability component/redemption amount 4,724 2,821
Conversion of bond into registered shares –6,183 0
Convertible bond (liability component) 165,719 169,999
Equity component before issuance costs 4,090 4,090
./. Pro-rated issuance costs –89 –89
./. Reclassification of deferred taxes on the difference between the carrying amount and taxable value upon issue –610 –610
Equity component upon issue 3,391 3,391
Increase in equity through conversion 6,183 0
Conversion fees and settlement of fractional amounts –71 0
Reversal for deferred tax upon conversion 13 0
Equity component conversions 6,125 0
Provisions for deferred tax upon issue 610 610
Cumulative reversal for deferred tax in income statement –367 –220
Reversal for deferred tax conversion against equity –13 0

In 2012, bonds with a nominal value of CHF 6.3 million – 3.63% of the issue volume – were converted. In addition to the nominal interest expense of CHF 3.5 million (prior year: CHF 3.7 million), the income statement also includes an amortisation expense of CHF 1.9 million (prior year: CHF 1.9 million), which corresponds to an effective rate of interest of 3.34%.

Of overall financial liabilities, CHF 999.3 million bear interest at fixed rates (prior year: CHF 1,062.7 million) and CHF 63.5 million (prior year: CHF 0 million) at variable rates as at 31 December 22012 (taking interest rate swaps into account). In addition to variable rate mortgages and rollover mortgages, loans with a total maturity of less than one year (fixed advances) count as variable; property financing for construction projects is included under building loans. This does not include property financing for properties which were not yet classified as investment properties under construction at the time the financing was concluded and were reclassified as investment properties under construction during the term of the existing financing.

Average rates of interest for the period, taking interest rate swaps into account, were as follows:

2012 2011
in % in %
Financial liabilities excluding building loans:
– fixed rate of interest 3,03 3.26
– variable rate of interest 0.77
Building loans:
– fixed rate of interest 1.95
– variable rate of interest 0,56 0.83
Total average rate of interest 3,00 3.02

13. Trade payables

Trade payables include payables from property accounts for advance rent payments, payables for operating costs and payables for construction costs.

14. Other payables

In the year under review, other payables amounting to CHF 1.4 million (prior year: CHF 0.2 million) comprise CHF 1.1 million in deferred purchase price payments for the already completed acquisition of Immobilien Invest Holding AG (property at Lausanne, Rue Voltaire 2 - 12). The remainder relates primarily to payables in connection with social insurance and value added tax.

15. Advance payments from buyers

Advance payments from buyers of CHF 29.0 million (prior year: CHF 25.4 million) represent reserve payments from purchasers of trading properties prior to transfer of ownership.

16. Accrued expenses and deferred income

Total accrued expenses and deferred income 16,540 28,450
Other items 7,689 9,633
Accruals for services for related parties 805 776
Accruals from property accounts 1,689 4,369
Accruals for construction work 6,357 13,672
2012 2011

17. Employee benefit obligations

Mobimo is affiliated with group administration plans ("Sammelstiftungen") for the purposes of mandatory and non-mandatory employee benefit insurance in accordance with the Swiss Federal Law on Occupational Retirement, Survivors' and Disability Pension Plans (BVG). Mandatory employee benefit insurance and the savings process involved in non-mandatory employee benefit insurance qualify as defined benefit plans under IAS 19.

With regard to non-mandatory occupational benefit insurance, the risks of death and disability are fully reinsured. Risk insurance for non-mandatory occupational benefit insurance qualifies as a defined contribution plan under IAS 19. Employer contributions are charged to the income statement.

Plan assets and employee benefit obligations changed as follows in the year under review:

Change in benefit obligations 2012 2011
Present value of benefit obligations at the beginning of the period 23,254 21,422
Employer's current service cost 752 834
Interest expenses 621 592
Employee contributions 728 664
Amounts paid –1,386 768
Actuarial (gains) losses 1,944 –1,026
Past service cost –609 0
Present value of benefit obligations at the end of the period 25,303 23,254
Change in plan assets 2012 2011
Plan assets at market values at the beginning of the period 19,335 16,685
Expected return on plan assets 674 667
Employer contributions 824 1,408
Employee contributions 728 665
Amounts paid –1,386 768
Actuarial gains (losses) 529 –858
Plan assets at market values at the end of the period 20,704 19,335

The amounts recognised in the balance sheet for the defined benefit plan are made up as follows:

Net liabilities for all plans 2012 2011 2010 2009 2008
Present value of benefit obligations 25,303 23,254 21,422 17,024 9,981
Market value of plan assets –20,704 –19,335 –16,685 –13,765 –7,936
Net liability 4,600 3,919 4,737 3,259 2,045
Unrecognised actuarial gains (losses) –3,643 –2,228 –2,427 –950 –938
Net benefit obligations recognised in balance sheet 957 1,691 2,310 2,309 1,107

The expense recognised for these plans in the income statement is made up as follows:

Net benefit expense recognised 2012 2011
Current service cost 752 834
Interest expense 621 592
Expected return on plan assets –674 –667
Recognition of actuarial (gains) losses 0 30
Recognition of past service cost –609 0
Net benefit expense 90 789

The item Recognition of past service cost is due to the reduction in the conversion rate. Expected employer contributions for the 2013 financial year amount to TCHF 829.

The net obligation recognised in the balance sheet changed as follows:

As at 31 December 957 1,691
Employer contributions –824 –1,408
Company's net benefit expense 90 789
As at 1 January 1,691 2,310
Change in net benefit obligation 2012 2011
Experience gains and losses 2012 2011 2010 2009 2008
Actual return on assets 1,203 –192 341 204 –609
Actual return on assets in % 5.8% –1.0% 2.0% 2.0% –7.7%
Difference between expected and actual return on assets –529 858 200 160 956
Difference between expected and actual return on assets in % –2.6% 4.4% 1.2% 1.9% 12.0%
Experience loss (gain) on benefit obligations –184 –804 –1,066 194 –344
Experience loss (gain) on benefit obligations in % –0.7% –3.5% –5.0% 1.8% –3.4%

Plan assets can be broken down into the following categories:

Plan assets Expected return Plan assets Expected return
Asset classes 2012 in % 2012 in % 2011 in % 2011 in %
Shares 30% 5.70% 27% 5.90%
Bonds and notes 45% 1.60% 45% 1.75%
Real estate 16% 4.00% 16% 3.75%
Alternative investments 5% 4.00% 9% 3.75%
Other 4% 0.25% 3% 0.25%
Total 100 % 3.30 % 100 % 3.30 %

As at 31 December 2012, the plan assets did not include treasury shares or real estate in the company's own use.

The following assumptions were applied to the expense reported in the income statement:

1.1.2013 1.1.2012
Discount rate 2.0% 2.7%
Expected return on plan assets 3.3% 3.4%
Expected future salary increases 1.3% 1.3%
Expected future pension benefit increases 0.1% 0.5%
Expected long-term interest rate on pension assets 2.0% 2.0%

18. Deferred tax

Deferred tax liabilities and assets are allocated to the following balance sheet items:

2012 2011
Assets Liabilities Assets Liabilities
Investment properties 120,501 110,438
Employee benefit obligation 181 320
Other items 5,404 3,338 5,037 2,341
Deferred taxes on temporary differences 5,585 123,840 5,357 112,778
Tax benefit of offsettable loss carryforwards 480 284
Total deferred taxes 6,065 123,840 5,641 112,778
Offset of deferred tax assets and liabilities –973 –973 –995 –995
Deferred tax assets/liabilities 5,091 122,867 4,647 111,784

The company holds and manages properties and is also involved in trading activities. In some cantons, gains from the sale of properties are subject to separate taxation in the form of a property gains tax applicable to the portion of the gain in excess of the depreciation recapture. The tax rates applied vary depending on how long the property has been held. Property gains tax rates contain speculation premiums and/or deductions for length of ownership, which is why the tax amount due declines as the period of ownership increases. Deferred taxes are calculated on the basis of cantonal regulations and, in the case of properties, individually for each property. The expected residual period of ownership is estimated for each property.

Deferred tax assets for loss carryforwards are recognised to the extent that it is probable that future taxable profits will be available against which the loss carryforwards can be utilised. The assets of CHF 0.5 million recognised in the year under review (prior year: CHF 0.3 million) relate to offsettable loss carryforwards in direct federal, cantonal and communal taxes of CHF 2.0 million (prior year: CHF 1.2 million). There were no unrecognised loss carryforwards (CHF 0 compared with CHF 0.9 million in the prior year).

No deferred taxes were recognised for undistributed profits of subsidiaries, since no taxes are expected if a distribution were to take place.

Of the net change in deferred tax liabilities of CHF 10.6 million (prior year: CHF 5.6 million), CHF 9.2 million (prior year: CHF 5.7 million) was recognised in the income statement and CHF –0.1 million (prior year: CHF –0.1 million) on financial instruments was recognised directly in other comprehensive income. Deferred taxes of a net amount of CHF 1.5 million were taken over with the acquisitions of Ruf Immobilien AG and Petit Mont-Riond SA.

19. Equity

The Annual General Meeting of 18 April 2012 approved a distribution from capital contribution reserves of CHF 9 per share for the 2011 financial year, which was paid on 25 April 2012. The nominal value of Mobimo shares remains at CHF 29.

Changes in the equity holding can be summarised as follows:

Shares
No. of shares Shares issued Treasury shares outstanding
As at 1 January 2011 5,131,170 –1,071 5,130,099
Issue of shares from conditional capital for options exercised 10,578 10,578
Acquisition of treasury shares –71,736 –71,736
Share-based payments for the acquisition of properties 62,785 62,785
Share-based payments to Board of Directors and management 8,331 8,331
Sale of treasury shares 300 300
Issue of shares from authorised capital for capital increase 1,028,350 1,028,350
Acquisition of treasury shares from capital increase –356 –356
As at 31 December 2011 6,170,098 –1,747 6,168,351
Issue of shares from conditional capital for options exercised 8,315 8,315
Issue of shares from conversion of convertible bond 30,500 30,500
Share-based payments to Board of Directors and management 9,486 9,486
Acquisition of treasury shares –20,591 –20,591
Sale of treasury shares 4,108 4,108
As at 31 December 2012 6,208,913 –8,744 6,200,169

As at 31 December 2012, share capital amounted to CHF 180.1 million (prior year: CHF 178.9 million) and was composed of 6,208,913 registered shares (prior year: 6,170,098) with a nominal value of CHF 29 per share. 8,744 treasury shares (prior year: 1,747) were held as at that date.

8,315 option rights (prior year: 10,578) were exercised in 2012, leading to a CHF 0.2 million increase (CHF 0.3 million) in share capital.

In addition, the conversion of 1,269 bonds from the outstanding convertible bond resulted in the issue of 30,500 new shares and an increase in the share capital of CHF 0.9 million. The nominal value of the converted bonds of CHF 5.5 million in excess of the nominal value of the new shares was credited to capital reserves after deduction of amounts due for rounding out and issue costs of CHF 0.3 million (see Note 12 Financial liabilities).

The purchase of the property at Place de la Gare, Avenue d'Ouchy 4/6 in Lausanne in 2010 as part of the takeover of O4Real AG was completed in 2011. The purchase price of a maximum of CHF 18.3 million was payable entirely in shares and was paid incrementally in line with rents received. The maximum purchase price was fully recognised at the time of acquisition as an increase in the capital reserves. The final transfer of shares took place in 2011. In total, 67,585 shares were transferred to the sellers, with 62,785 of these being transferred in 2011. The acquisition costs of the treasury shares bought back on the market after being transferred to the sellers amounted to a total of CHF 14.3 million (2011: CHF 13.4 million; 2010: CHF 0.9 million) and were charged to capital reserves as at the time of the transfer.

Also in 2011, Mobimo issued 1,028,350 new registered shares from existing authorised capital. The capital increase safeguarded shareholders' subscription rights. Each existing shareholder was granted one subscription right per registered share held. Five subscription rights entitled the holder to purchase one new Mobimo registered share at the price of CHF 192 per share. By the end of the subscription period on 5 December, 99.8% of the subscription rights had been exercised. The remaining 1,959 shares were placed at the price of CHF 206 each. Share capital thus increased by a nominal CHF 29.8 million. The amount of CHF 167.6 million in excess of the nominal value was credited to capital reserves. The costs of the capital increase, which amounted to CHF 5.3 million, were charged to capital reserves and the consequent tax effect of CHF 0.4 million was credited to capital reserves. This resulted in an overall increase of CHF 192.6 million.

There is also conditional share capital of a maximum of CHF 34.3 million for the issue of up to 1,182,891 fully paid-up registered shares with a nominal value of CHF 29, of which

  • up to CHF 0.3 million is designated for the exercise of option rights granted to members of the Board of Directors, employees of Group companies and related parties. Shareholders' subscription rights are excluded;
  • up to CHF 0.9 million is designated for the exercise of subscription rights created after 5 May 2010 under an employee share option programme. Shareholders' subscription rights are excluded;
  • up to CHF 33.1 million is designated for the exercise of conversion and/or option rights connected to convertible bonds, bonds with warrants, similar bonds or other financial market instruments of the company or granted by Group companies. Shareholders' subscription rights are excluded.

Finally, authorised share capital is available allowing the Board of Directors to increase the share capital of the company by a maximum of CHF 33.1 million within two years at most (up to April 2013) via the issue of a maximum of 1,141,150 registered shares, to be fully paid up, with a nominal value of CHF 29 per share.

The authorised capital of CHF 33.1 million and the conditional capital are linked together insofar as upon using the authorised capital, the equivalent amount of conditional capital will no longer be available to the Board of Directors. The same applies in the reverse scenario; if the conditional capital is used, the equivalent amount of the authorised capital will no longer be available. The amount of the authorised capital of 33.1 million available to the Board of Directors for increasing the share capital as at 31 December 2012 is thus reduced by the outstanding portion of the convertible bond of CHF 23.5 million (conditional capital).

The Board of Directors will propose to the upcoming General Meeting of 9 April 2013 a distribution of CHF 55.9 million in the form of a distribution of paid-in capital of CHF 9 per share.

Capital structure

Total Number of Nominal value
TCHF registered shares per share (CHF)
Capital as at 31 December 2012
Share capital 180,058 6,208,913 29
Authorised capital (until 6 April 2013) max. 33,093 1,141,150 29
Conditional capital max. 34,304 1,182,891 29
Changes in capital
Share capital as at 31. 12. 2005 192,411 2,600,145 74
Share capital as at 31. 12. 2006 225,346 3,466,860 65
Share capital as at 31. 12. 2007 243,232 4,343,425 56
Share capital as at 31. 12. 2008 204,230 4,345,323 47
Share capital as at 31. 12. 2009 192,035 5,053,552 38
Share capital as at 31. 12. 2010 148,804 5,131,170 29
Share capital as at 31. 12. 2011 178,933 6,170,098 29
Share capital as at 31. 12. 2012 180,058 6,208,913 29
Authorised capital as at 31. 12. 2005 26,640 360,000 74
Authorised capital as at 31. 12. 2006 23,400 360,000 65
Authorised capital as at 31. 12. 2007 20,160 360,000 56
Authorised capital as at 31. 12. 2008 16,920 360,000 47
Authorised capital as at 31. 12. 2009 18,687 491,771 38
Authorised capital as at 31. 12. 2010 34,800 1,200,000 29
Authorised capital as at 31. 12. 2011 33,978 1,171,650 29
Authorised capital as at 31. 12. 2012 33,093 1,141,150 29
Conditional capital as at 31. 12. 2005 11,163 150,855 74
Conditional capital as at 31. 12. 2006 9,750 150,000 65
Conditional capital as at 31. 12. 2007 7,848 140,150 56
Conditional capital as at 31. 12. 2008 6,498 138,252 47
Conditional capital as at 31. 12. 2009 5,254 138,252 38
Conditional capital as at 31. 12. 2010 36,558 1,260,634 29
Conditional capital as at 31. 12. 2011 36,252 1,250,056 29
Conditional capital as at 31. 12. 2012 34,304 1,182,891 29

20. Earnings per share

Undiluted earnings per share are calculated on the basis of Group profit and the average number of outstanding shares.

Diluted earnings per share are calculated using Group profit and the average number of outstanding shares (not including treasury shares), taking into account the effects from all potential shares, options and conversions.

2012 2011
Calculation of earnings per share
Number of outstanding shares as at 1 January 6,168,351 5,130,099
Effect of capital increase (average) 25,716 79,013
Effect of change in holdings of treasury shares –2,283 –6,486
Average number of outstanding shares 6,191,784 5,202,626
Effect of outstanding options:
– average number of potential shares 11,548 22,402
– average number of shares which would be issued at average market value –1,542 –3,095
Average number of potential shares from convertible bond 819,461 832,544
Effective number of shares as basis for calculation of diluted earnings per share 7,021,251 6,054,477
Profit in TCHF (attributable to the shareholders of Mobimo Holding AG) 76,323 80,454
Net income from revaluation in TCHF (attributable to the shareholders of Mobimo Holding AG) –36,921 –41,194
Attributable deferred tax in TCHF 9,230 10,299
Profit not including revaluation (and attributable deferred tax) in TCHF 48,631 49,558
Effect of coupon payment on convertible bond in TCHF 5,440 4,701
Attributable income tax in TCHF –424 –367
Profit after eliminations from convertible bond in TCHF 81,339 84,788
Profit not including revaluation or effects from convertible bond in TCHF 53,647 53,893
Earnings per share in CHF 12.33 15.46
Diluted earnings per share in CHF 11.58 14.00
Earnings per share not including revaluation (and attributable deferred tax) in CHF 7.85 9.53
Diluted earnings per share not including revaluation (and attributable deferred tax) in CHF 7.64 8.90
Calculation of net asset value (NAV) per share
Number of outstanding shares as at 31 December 6,200,169 6,168,351
Number of outstanding options 9,295 17,610
Number of potential shares from convertible bond 810,880 841,386
Number of shares as basis for calculation of diluted NAV 7,020,344 7,027,347
Equity as at 31 December in TCHF 1,197,514 1,174,183
Liability component convertible bond 165,719 169,999
Deferred taxes on convertible bond 230 390
Option exercise (outstanding options x nominal value) in TCHF 270 511
Shareholders' equity after conversion and option exercise in TCHF 1,363,733 1,345,083
NAV per share in CHF 193.14 190.36
NAV per share, diluted, in CHF 194.25 191.41

21. Income from rental of properties

Rental income can be broken down among the individual divisions as follows:

2012 2011
Commercial properties 73,152 71,154
Residential properties 19,027 15,775
Income from rental of investment properties 92,179 86,929
Trading properties1 586 1,858
Total income from rental of properties 92,765 88,787
Commercial properties 9,978 9,743
Losses on receivables commercial properties 264 333
Residential properties 2,568 2,444
Losses on receivables residential properties 31 83
Investment property expense 12,841 12,603
Rented trading properties 73 150
Losses on receivables trading properties 24 0
Net income from revaluation 12,937 12,753
Net rental income 79,828 76,034

Rental income contains net rental income, i.e. the rents received. The year-on-year increase in 2012 is mainly attributable to the first-time letting of properties completed during the course of the previous year and in the current year.

Direct expenses contains all costs relating to maintenance and administration (including building superintendent remuneration) which cannot be passed on to tenants.

22. Profit on disposals of trading properties 2012 2011 Proceeds from sale of trading properties 151,954 133,029 Total income from sale of trading properties 151,954 133,029 Pro-rata construction costs of trading properties sold 129,576 111,398 Changes in valuation allowances 638 –684 Total expenses from sale of trading properties 130,214 110,714 Profit on sale of trading properties 21,740 22,315

Further details of the trading properties sold can be found in Note 5.

1 Rental income from development properties

23. Other income

Total other income 776 907
Other income 776 907
2012 2011

Other income includes income from the management of third-party property in Lausanne and income from the preparation of property heating and ancillary cost statements.

24. Net income from revaluation

Net gains from revaluation 36,889 41,194
Negative fair value adjustments –17,045 –13,136
Positive fair value adjustments 53,934 54,330
2012 2011

Of the CHF 36.9 million in net income from revaluation, CHF 15.7 million relates to the completion of properties under construction for the company's own portfolio in 2012.

25. Profit on disposals of investment properties

Profit on disposal of investment properties –124 2,484
Sales costs 0 –591
Carrying amount –311 –86,556
Sales proceeds investment properties 187 89,631
2012 2011

There were some land cessions in the period under review (see Note 7).

26. Personnel expense

2012 2011
Salaries 11,734 10,831
Profit-sharing (management / employees) 2,122 3,034
Social security contributions 1,148 1,095
Defined contribution plans 175 142
Defined benefit plans 90 789
Compensation for Board of Directors 1,428 1,496
External training and education costs 143 110
Other personnel expenses 1,118 557
Total personnel expenses 17,958 18,054
Headcount as at 31 December (full-time basis) 85,2 84,1
Average headcount (full-time basis) 82,9 78,9

The lower personnel expense for defined benefit plans compared to the previous year is due to the lower cost of employee benefit plans calculated under IAS 19 (see Note 17).

27. Operating expense

Total operating expenses 5,945 5,542
Other operating expenses 4,925 4,885
Capital taxes 727 281
Costs for investigations in connection with the acquisition of properties, sales documentation 121 250
Room costs 172 126
2012 2011

Other operating expenses includes a loss of TCHF 27 (prior year: TCHF 20) on the disposal of property, plant and equipment.

28. Administrative expense

Total administrative expenses 2,563 2,683
Other administrative expenses 226 320
Consulting expense in respect of related parties 392 510
Consulting expense 1,945 1,852
2012 2011

29. Depreciation and amortisation

Total depreciation and amortisation 1,320 1,356
Amortisation of intangible assets 178 242
Depreciation on owner occupied properties 783 734
Depreciation on other property, plant and equipment 359 381
2012 2011

Depreciation on other property, plant and equipment consists of ordinary depreciation for vehicles, furniture and hardware. Depreciation on owner-occupied properties comprises ordinary depreciation for the property at Seestrasse 59 in Küsnacht, as well as for the owner-occupied parts of the properties at Rue de Genève 7 and Rue des Côtes-de-Montbenon 16 in Lausanne.

30. Financial result

2012 2011
Financial income
Interest on bank and other deposits 551 223
Interest on loans and debt instruments 104 200
Interest on loans to associates 0 17
Total interest income 655 440
Dividend income from equity investments 107 107
Income from financial instruments (derivatives) 0 0
Gains from sale of financial assets 58 975
Other income 5 0
Total financial income 825 1,523
Financial expense
Interest expense –27,029 –28,093
Cost of financial instruments (derivatives) –135 –4,248
Other financial charges –285 –132
Total financial expense –27,449 –32,472
Total financial result –26,624 –30,949

In the 2012 financial year, a total of CHF 4.6 million (prior year: CHF 2.2 million) in borrowing costs was capitalised under trading properties and investment properties under construction. The average rate of interest on the capitalised interest amounted to 3.00% (prior year: 1.91%).

31. Tax expense

Tax expense can be broken down as follows:

2011
8,443 6,193
9,366 7,985
–196 –284
0 –1,981
9,170 5,720
17,613 11,913
2012

Current tax expense contains an amount of CHF 1.4 million (prior year: CHF -5.4 million) for income tax from prior periods. Enacted tax rates were used in the calculation of current income tax.

Other comprehensive income (equity) includes current tax income of CHF 0.3 million (prior year: CHF 2.9 million) from recognising the losses on financial instruments classified as cash flow hedges (swaps). In the prior year, the positive tax effect of CHF 0.4 million in current tax resulting from reporting the costs of the capital increase in equity was also recognised directly in equity.

Details on deferred tax and deferred tax recognised directly in other comprehensive income can be found in Note 18.

Tax expense can be analysed as follows:

2012 2011
Group profit before tax 93,653 92,367
Applicable tax rate 25% 25%
Tax expense at applicable tax rate 23,413 23,092
Non-deductible expenses 281 1,527
Creation / reversal for prior-year current tax 1,417 –5,412
Non-recognition of tax loss carryforwards 0 900
Utilisation of previously unrecognised tax losses –213 0
Capitalisation of deferred tax assets 0 –3,667
Expense / income which is taxed at a lower / higher tax rate –5,553 –2,637
Impact of changes in tax rate on deferred tax items recognised –1,258 –1,981
Other effects –474 91
Total taxes 17,613 11,913

The applicable tax rate in the year under review was a mixed rate. It takes account of the fact that gains subject to cantonal and local authority tax are currently taxed at an average rate of 22% (including direct federal tax), while property gains subject to property gains tax are taxed at rates of up to 35%.

The low tax rate in the 2011 financial year was mainly attributable to the implementation of the Swiss Federal Supreme Court judgement of 4 April 2011, which ended the longstanding legal dispute between Mobimo AG ("Mobimo") and the City of Zurich. The dispute concerned the possibility of deducting expenses and loss carryforwards in connection with the assessment of property gains tax. As a result of the Supreme Court's ruling in Mobimo's favour, the company was able to release tax provisions of CHF 5.5 million. There are still a number of unresolved issues currently being clarified with the local tax authorities relating to how the Supreme Court judgement is to be effectively implemented.

34. Pledged assets/assets not freely disposable

The carrying amount of pledged assets is as follows:

2012 2011
Trade receivables 92 303
Other receivables 4,337 0
Trading properties 104,567 57,568
Investment properties and investment properties under construction 1,867,613 1,773,408
Owner occupied properties 16,635 16,630
Carrying amount of pledged assets 1,993,244 1,847,909

With the exception of other receivables, this is the carrying amount of those assets which are pledged either in full or in part for the purpose of securing bank mortgage loans. These assets were effectively mortgaged in an amount of CHF 897.2 million (prior year: CHF 892.6 million) (see Note 12).

33. Operating leases

Mobimo as tenant and lessee

Obligations from non-cancellable rental and leasing agreements are as follows:

2012 2011
Rental and leasing obligations up to 1 year 24 50
Total future rental and leasing obligations 24 50

The obligations relate to third-party leases for premises and car park facilities and to rented photocopying equipment. The rental and leasing expenses charged to the income statement amounted to TCHF 70 (prior year: TCHF 83).

Mobimo as landlord

The future rental income set out below will be generated from non-cancellable rental agreements for investment properties:

Commercial Residential
2012 properties properties Total
Rental income within 1 year 67,342 1,930 69,272
Rental income within 2 to 5 years 198,293 3,332 201,625
Rental income in over 5 years 130,902 2,963 133,865
Total future rental income from non-cancellable rental agreements 396,537 8,225 404,762
Commercial Residential
2011 properties properties Total
Rental income within 1 year 61,664 3,749 65,413
Rental income within 2 to 5 years 173,403 2,152 175,555
Rental income in over 5 years 197,628 711 198,338
Total future rental income from non-cancellable rental agreements 432,695 6,612 439,306

Rental agreements for commercial properties generally contain an index clause stating that rents may be increased on the basis of the consumer price index. Rent increases for residential properties are generally linked to the mortgage interest rate (reference interest rate), among others. As at 31 December 2012, 79.6% (CHF 74.8 million) of rental income came from rental agreements with index clauses. The vast majority of these agreements contain a 100% adjustment in line with the index.

The five biggest tenants generate the following shares of rental income:

2012 2011
Name of tenant share in % share in %
Swisscom Group 6.5 6.7
SV (Schweiz) AG 6.1 6.0
Coop 3.8 3.9
MIGROS
Cooperative Association
3.3 3.5
Rockwell Automation AG 3.3 3.4

Shares of the five biggest tenants (as at 31 December 2012)

Further details of rental income can be found in Note 21.

Length of existing fixed rental agreements (as at 31 December 2012)

34. Financial risk management

34.1 General information

Through its activities, Mobimo is exposed to various financial risks: credit risk, liquidity risk and market risk. Of the various market risks, interest rate risk is particularly significant.

Risk management is assured by Internal Controlling. Internal Controlling operates in accordance with the principles of Mobimo's risk management concept, which are monitored by the Audit and Risk Committee. Risk management focuses on the identification, description, management, monitoring and control of credit, interest rate and liquidity risks. The Group uses derivative financial instruments to hedge certain risks.

The risk management principles and the processes applied are subject to regular review in order to take account of changes in market conditions and in the activities of the Group. The aim is to use existing training and management guidelines and processes to maintain a disciplined and constructive control environment in which all employees can fulfil their function and exercise their duties. Risk management is part of the processes of the integrated management system.

The following paragraphs provide an overview of the exposure to each of the individual risks together with information on the objectives, policies and processes for measuring, monitoring and hedging risks and on capital management within the Group. Further information on financial risks can be found elsewhere in the Notes (see Note 9 to the annual financial statements of Mobimo Holding AG, Risk assessment).

34.2 Credit risk

Credit risk is the risk that Mobimo could suffer financial losses if clients or counterparties to a financial instrument fail to fulfil their contractual obligations. Credit risk arises primarily in connection with trade receivables and cash.

In order to minimise credit risk in connection with cash, short-term bank deposits are held with first-rate institutions. Trade receivables are receivables from property sales and from rental agreements. Property sales are exposed to only limited credit risk, since these sales are based on a publicly certified purchase agreement which is regularly secured via an irrevocable promise to pay. With rental agreements, credit risk is reduced via creditworthiness checks and by monitoring the age structure of amounts outstanding. Deposits or bank guarantees of three to six times the monthly rent are also demanded.

The maximum credit risk exposure corresponds to the carrying amounts of the individual financial assets. There are no guarantees or similar obligations which could lead to an increase in risk in excess of the carrying amounts. As at the reporting date, the maximum credit risk exposure was as follows:

Carrying amounts Carrying amounts
2012 2011
Cash (bank deposits) 97,645 252,059
Trade receivables 4,019 6,368
Other receivables1 4,736 449
Accrued income and prepaid expenses2 2,768 3,278
Financial assets (loans) 80 282
Total 109,248 262,436

34.3 Liquidity risk

Liquidity risk is the risk that Mobimo will not be able to meet its financial obligations when they become due. Investment properties are generally financed via medium- to long-term loans, and condominium development properties via short-term loans. Liquidity is managed via a liquidity planning tool, in combination with a mortgage database.

2 Not including costs paid in advance

1 Not including tax receivables, receivables in relation to social insurance and advance payments

The table below sets out the contractual maturities (including interest) in relation to Mobimo's financial liabilities. Future variable rates of interest have been estimated using the yield curve as at the reporting date.

Carrying Contractual 1 month 1−3 3−12 Over
2012 amount cash flows or less months months 1−5 years 5 years
Non-derivative financial liabilities
Trade payables1 10,383 10,383 10,383
Other payables2 1,179 1,179 1,179
Accrued expenses and deferred income3 14,181 14,181 14,181
Financial liabilities 1,062,908 1,262,634 100 68,124 24,857 412,817 756,736
Derivative financial liabilities
Interest rate swaps 26,825 27,360 331 870 3,534 15,760 6,866
Total 1,115,476 1,315,737 431 94,737 28,391 428,577 763,602
Carrying Contractual 1 month 1−3 3−12 Over
2011 amount cash flows or less months months 1−5 years 5 years
Non-derivative financial liabilities
Trade payables1 6,456 6,456 6,456
Other payables2 154 154 154
Accrued expenses and deferred income3 23,325 23,325 23,325
Financial liabilities 1,062,657 1,268,555 63,073 126,185 70,131 421,017 588,149
Derivative financial liabilities
Interest rate swaps 25,358 37,060 431 1,088 4,526 15,740 15,275
Total 1,117,950 1,335,550 63,504 157,208 74,657 436,757 603,424

1 Not including rents and ancillary costs paid in advance

2 Not including tax payables and payables in relation to social insurance

3 Not including deferred income and unused annual leave

34.4 Market risks

Market risk is the risk that changes in market prices such as exchange rates, interest rates and the fair value of financial instruments could have an impact on the profit from and fair value of financial instruments held by Mobimo.

Market risks are managed in order to monitor and control such risks and to ensure that they do not develop beyond a specific extent.

Currency risk

The Group is only active in Switzerland and all business is transacted in Swiss francs.

Interest rate risk

The Group's cash is used to reduce variable-rate mortgages or is invested on a short-term basis.

The majority of interest on financial liabilities relates to loans for the financing of investment properties and development properties (trading properties). With investment properties, interest rate risk is generally addressed via the conclusion of long-term fixed-rate mortgage agreements. Where necessary, derivative financial instruments are also used to hedge interest rates. As at the reporting date, construction financing in the amount of CHF 63.5 million had been taken out on investment properties (prior year: CHF 0) in the form of fixed advances with a term of three months and exposed to heightened interest rate risk.

Based on its market assessment, Mobimo has set itself the goal of maintaining the average residual term to maturity of financial liabilities over the long term via mortgages with long terms and derivative financial instruments.

Further information on the interest rate profile of financial liabilities, forward rate agreements and interest rate swaps can be found in Note 12.

Interest rate risk can be broken down into interest-related cash flow risk, i.e. the risk that future interest payments will change as a result of fluctuations in market interest rates, and interest-related fair value risk, i.e. the risk that the fair value of a financial instrument will change as a result of fluctuations in market interest rates.

Fair value sensitivity analysis for fixed-rate financial instruments

Mobimo has no fixed-rate financial assets or liabilities which are classified at fair value in the income statement. Fixed-rate financial instruments are measured at amortised cost. With these positions, therefore, a change in market interest rates would have no impact on the profit for the year.

Mobimo may hold forward rate agreements and interest rate swaps measured at fair value. Changes in fair value for interest rate swaps not held for hedge accounting purposes are recognised in the financial result and therefore have no direct impact on the profit for the year. Changes in fair value for forward rate agreements used for hedge accounting purposes are recognised directly in equity.

An increase of 100 basis points in the interest rate would have increased the Group result by CHF 5.3 million (prior year: CHF 6.2 million) as a result of changes in fair value for swaps not held for hedge accounting purposes. Changes in fair value for swaps held for hedge accounting purposes would have increased other income (equity) by CHF 24.7 million (prior year: CHF 24.5 million). An equivalent reduction in the interest rate would have reduced the Group result and other income by a similar amount. This analysis is based on the assumption that all other variables remain unchanged.

Cash flow sensitivity analysis for variable-rate financial instruments

Mobimo's variable-rate financial liabilities are exposed to interest-related cash flow risk. An increase of 100 basis points in the interest rate would have lowered the Group result by CHF 0.6 million (prior year: CHF 0 million). An equivalent reduction in the interest rate would have reduced the Group result by the same amount. This analysis is based on the assumption that all other variables remain unchanged.

Fair values

The carrying amounts in the annual financial statements for cash, trade receivables, other current receivables and current liabilities approximate to fair value given the short terms involved.

For interest rate swaps and forward rate agreements, fair value is the present value of the forward contract.

For fixed-rate financial liabilities, fair value corresponds to the time value of the future cash flows to be discounted as at the reporting date using the market interest rate. As at the reporting date, for fixed-rate mortgages this figure was CHF 108.7 million (prior year: CHF 87.4 million) higher than the carrying amount. The reason for this is that, as at 31 December 2012, market interest rates were considerably lower than the level hedged. The fair values of fixed-rate mortgages are based on early repayment penalties calculated by the lending banks as at the respective date. For the listed convertible bond, fair value, which corresponds to the closing price on the stock exchange, is CHF 11.5 million (prior year: CHF 9.0 million) higher than the carrying amount.

Interest rates used in determining fair value

Rates of interest for discounting future cash flows are based on money and capital market rates as at the time of measurement plus an adequate interest spread. For 2012, the discount rates used were between 0.57% and 2.00% (prior year: between 0.57% and 2.00%).

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by measurement method, as at 31 December 2012. The different levels have been defined as follows:

Level 1: quoted prices in active markets

Level 2: inputs other than quoted prices in active markets that are observable either directly (i.e. prices) or indirectly (i.e. derived from prices) Level 3: inputs that are not based on observable market data.

2012 Level 1 Level 2 Level 3
Derivative financial instruments (net) 0 –26,825 0
2011 Level 1 Level 2 Level 3
Derivative financial instruments (net) 0 –25,358 0

Mobimo does not hold any financial instruments carried at fair value which are classified as Level 1.

The fair value of the financial instruments classified as Level 3 changed as follows in 2012:

2012 2011
As at 1 January 0 3,205
Sale of the investment in Olmero AG 0 –1,367
Decrease through change to measurement at cost 0 –1,838
As at 31 December 0 0

The item "Decrease through change to measurement at cost" shown in the prior year related to the investment in Parking Saint-François S.A, for which a corresponding fair value was calculated and recognised as part of the purchase price allocation (PPA) for the acquisition of the LO Group. Insufficient information was available to produce a regular and reliable calculation of the current fair value, however.

34.5 Categories of financial instruments

The table below shows the carrying amounts of all financial instruments by category:

Carrying amount Carrying amount
2012 2011
Loans and receivables
Cash 97,645 252,059
Trade receivables 4,019 6,368
Other receivables1 4,736 449
Accrued income and prepaid expenses2 2,768 3,278
Financial assets (loans) 80 282
Total loans and receivables 109,248 262,436
Financial assets available for sale
Financial assets (equity investments) 1,870 1,871
Financial liabilities measured at amortised cost
Trade payables3 10,383 6,456
Other payables4 1,179 154
Accrued expenses and deferred income5 14,181 23,325
Financial liabilities 1,062,908 1,062,657
Total liabilities measured at amortised cost 1,088,651 1,092,592
Financial liabilities held for trading purposes
Derivative financial instruments 12,605 12,471
Financial liabilities held for hedging purposes
Derivative financial instruments 14,220 12,887

34.6 Capital management

The Board of Directors seeks to ensure a solid capital base. With regard to its capital structure, Mobimo aims to achieve long-term net gearing (ratio of net debt to shareholders' equity) of a maximum of 150%. In addition, equity should not drop below 40% of total assets, in accordance with investment guidelines. Mobimo also consistently distributes a high dividend. Over the past five years the dividend yield (capital contribution or nominal value repayment) has amounted to an average of about 4.9% (prior year: 5.1%). As at the end of 2012, the return on equity was 6.7% (prior year: 8.5%) (profit in relation to average equity). The shares are characterised by a high level of stability in value, calculability and good profitability.

1 Not including tax receivables, receivables in relation to social insurance and advance payments

2 Not including costs paid in advance

3 Not including rents and ancillary costs paid in advance

4 Not including tax payables and payables due to social insurance

5 Not including deferred income and unused annual leave

35. Share-based payments

The regulations governing the profit-sharing plan for the Executive Board in force since 1 January 2010 have been amended due to the expansion of the Executive Board. The amended regulations came into effect on 1 January 2012 and are now valid up to and including the 2015 financial year (Corporate Governance, Section 5 Remuneration and profit-sharing). The 7% share of consolidated profit for the year that exceeds a hurdle of 5% of return on equity will continue to be allocated to the Executive Board as variable remuneration. At least 50% of the variable performance-related remuneration element must be drawn in the form of shares. The high water mark principle still stipulates that if figures drop below the 5% hurdle, profit-sharing only becomes possible again when the difference is made up. The annual share of profits for the individual members of the Executive Board is limited to a maximum of 150% of fixed gross annual salary.

All the shares issued under profit-sharing arrangements are subject to a vesting period, generally of five years.

For the 2012 financial year, a total of 4,528 shares (prior year: 7,392) were allocated to the Executive Board as a share of profits. The cost of the approved share allocation was recognised as TCHF 991 (prior year: TCHF 1,538), measured at the share price on 31 December 2012 of CHF 218.90 per share (prior year: CHF 208). Sharebased remuneration for the Executive Board was based on the assumption that a ratio of 55% applies (prior year: 60%).

In accordance with the regulations that came into effect in the 2009 financial year, the Board of Directors receives fixed remuneration structured on a modular basis. The modules used reflect members' individual activities on the Board of Directors, thus ensuring that remuneration is in line with the level of responsibility involved and the time required. Each member of the Board of Directors may receive the compensation in cash or partly or fully in shares in accordance with the allocation resolution. In total, remuneration of CHF 1.1 million was paid in cash (prior year: CHF 1.0 million) and CHF 0.4 million in the form of shares (1,742 shares) (prior year: CHF 0.4 million, 1,708 shares) in 2012.

Until 31 December 2009 (31 December 2008 in the case of the Board of Directors), the Executive Board and employees were subject to profit-sharing regulations which stated that should a hurdle of 5% return on equity be exceeded, options (with dilution protection) would be granted on shares in an amount of 20% of annual unrealised gains (valuation gains on properties less deferred taxes). The high water mark principle stipulated that if figures dropped below the 5% hurdle, profit-sharing would only become possible again when the difference was made up. From 1 January 2006, the number of options was determined on the basis of the fair value of the option using the Black Scholes model. The option plan was in force from 1 July 2000 and the regulations governing the plan were updated following the introduction of new profit-sharing regulations for employees effective 1 January 2005 and 1 January 2006. In addition, the Board of Directors and the Executive Board were granted special one-time options in 2001 for the successful establishment of the Mobimo Group.

The strike price for all options corresponds to the nominal value at the time of exercise. There was no nominal value reduction in the 2012 financial year, so the strike price remains unchanged at CHF 29.

All options issued are subject to individual vesting periods of at least three years from the issue date (21 November 2001 for the establishment of the Group and profit-sharing 2000, 28 August 2002 for profit-sharing 2001). The first possible date for exercising options was 21 November 2004. The regulations, effective from 1 January 2006, governing the granting of options from the 2006 financial year onwards specify an exercise period of between the third and tenth year.

In line with the allocation regulations applicable at the time, the Executive Board received a share of profits in the form of options for the last time in 2009. The Board of Directors was allocated a share of profits in the form of options for the last time in connection with the 2008 financial year.

The options issued can be broken down as follows:

Grant date 2012 2011
– For the successful establishment of the Group
21. 11. 2001
13,000 13,000
– From profit-sharing 2000
21. 11. 2001
55,900 55,900
– From profit-sharing 2001
28. 08. 2002
18,725 18,725
– Special allocation Executive Board 2004
31. 12. 2004
2,293 2,293
– From profit-sharing 2005
01. 01. 2005
8,592 8,592
– From profit-sharing 2006
01. 01. 2006
8,322 8,322
– From profit-sharing 2007
01. 01. 2007
6,494 6,494
– From profit-sharing 2008
01. 01. 2008
1,825 1,825
– From profit-sharing 2009
01. 01. 2009
2,403 2,403
Total options issued 117,554 117,554
Options exercised 108,259 99,944
Expired options 0 0
Total options outstanding 31 December 9,295 17,610
Exercisable options 416 0

36. Capital commitments

As at 31 December 2012, capital commitments for future construction investments in investment properties amounted to CHF 65.7 million. These commitments relate to the agreements concluded with general contractors for the investment properties under construction at Zurich City West site C, Lausanne "La Poste", Lausanne "Les Pépinières" and Affoltern am Albis, Obstgartenstrasse/Obfelderstrasse. There is also a future commitment of CHF 17.3 million arising from the notarised agreement for the purchase of an investment property.

37. Contingencies

There are no contingent liabilities.

38. Significant shareholders

As at the reporting date, the following shareholders hold more than 3% of the shares and options in Mobimo Holding AG:

31 December 2012 2011
Pensionskasse des Kantons Zug 3.38% 3.40%
BlackRock, Inc. 3.07%

39. Related parties

Related parties include shareholders who could exert a significant influence over Mobimo, the Board of Directors and management, associates, companies controlled by members of the Board of Directors of the Mobimo Group and the Mobimo pension plan. Among the companies controlled by members of the Board of Directors are Ledermann Immobilien AG, the law firm weber schaub & partner ag and Immopoly Sàrl owned by Paul Rambert. Paul Rambert's son is a managing partner in the company Oloom Sàrl, which provides interior design services.

The Board of Directors and the Executive Board received the following remuneration in the year under review (in TCHF):

2012 2011
Members of the Board of Directors/Executive Board 5,812 6,173
broken down as follows
– salaries 3,910 3,733
– social security contributions 531 548
– share-based payments 1,371 1,892

The regulations governing the remuneration system for the Board of Directors were amended in 2009 and the existing option plan discontinued (see Note 35). As of the 2010 financial year, the option plan for the Executive Board was also replaced by the new profit-sharing regulations for the Executive Board (see Note 35).

EB profit-sharing/BoD remuneration 2010 5,651 shares
EB profit-sharing/BoD remuneration 2011 9,100 shares
EB profit-sharing/BoD remuneration 2012 6,270 shares

Further details of the Executive Board profit-sharing regulations can be found in Note 35.

Further relationships with related parties are as follows:

The income statement includes expenses of TCHF 389 (prior year: TCHF 488) for tax consulting by the tax and legal consulting firm weber schaub & partner ag. TCHF 80 (prior year: TCHF 27) was paid for advisory services provided by Immopoly Sàrl and TCHF 11 (prior year: TCHF 176) for design advisory services provided by Oloom Sàrl. The apartment in the Mobimo Tower purchased by Dr. C. Caviezel in 2011 was used by Mobimo as a show apartment until June 2012 and rental income of TCHF 47 was paid for it in the year under review. In addition, the donation of TCHF 40 paid in the previous year to the committee supporting Georges Theiler's campaign for election to the Council of States was repaid.

The information on transparency pursuant to the Swiss Code of Obligations can be found in the notes to the annual financial statements of Mobimo Holding AG.

40. Group companies

The scope of consolidation comprises the following companies:

Share capital Ownership interest Consolidation
Company Domicile in TCHF in % method
Mobimo Holding AG Lucerne 180,058 F
Mobimo AG Küsnacht 72,000 100.00 F
Mobimo Management AG Küsnacht 100 100.00 F
JJM Participations SA Lausanne 6,001 100.00 F
LO Holding Lausanne-Ouchy SA Lausanne 12,000 100.00 F
LO Immeubles SA Lausanne 2,000 100.00 F
Parking du Centre SA Lausanne 6,000 50.00 E
Flonplex SA Lausanne 2,000 40.00 E
Parking Saint-François SA Lausanne 1,150 26,521 not cons.
O4Real AG Lausanne 1,000 100.00 F
Immobilien Invest Holding AG Glarus 150 75.33 F
Petit Mont-Riond SA Lausanne 50 75.33 F

F = fully consolidated

E = equity valuation

not cons. = not consolidated

In the year under review, Mobimo Holding AG purchased 75.33% of the shares of Immobilien Invest Holding AG, Glarus, which holds 100% of the shares of Petit Mont-Riond SA, Lausanne.

As part of a restructuring within the companies covered under the scope of consolidation, the companies FLON Events Sàrl, Lausanne, and LO Gestion SA, Lausanne, were merged in the year under review into LO Immeubles SA, Lausanne.

41. Events after the reporting date

The Board of Directors approved the consolidated financial statements for publication on 11 February 2013. These statements are also subject to approval by the General Meeting of Mobimo Holding AG on 9 April 2013.

At the end of the year, Mobimo and Hochtief Development Schweiz AG signed an agreement with Rheinmetall relating to their joint development of the latter's current location in Zurich-Oerlikon. Rheinmetall has medium-term plans to move from its current location, which measures some 53,000m2. Following the move the site, which is superbly located between the station and a residential area in Zurich-Oerlikon, will offer a major opportunity for an attractive, mixed-use urban development with a residential focus, thereby further enhancing Mobimo's basis for new and attractive projects.

On 1 February 2013 Mobimo purchased a property in Uetikon am See for CHF 8.4 million that it intends to develop as condominiums. The Investments for Third Parties business area also signed an agreement to purchase the shares of a real estate company with a property in Olten. The purchase agreement is expected to be completed in the next two months.

No other events occurred between 31 December 2012 and the date of approval of the consolidated annual financial statements which would require adjustments to the carrying amounts of the Group's assets and liabilities as at 31 December 2012 or would require disclosure in this section.

2.1 TRADING PROPERT Y DETAILS

Location Address Site Register of Built Acquired
area in m2 polluted
sites
Building land
Dübendorf Sonnentalstrasse 103 11,292 no May 2012
Herrliberg Rigiweg 5,082 no Nov 2008
Lucerne Büttenenhalde 7,115 no Dec 2011
Meilen Feldgüetliweg 143/145 2,660 no Aug 2011
Weggis Hertensteinstrasse 105 3,043 no May 2010
29,192
Properties under construc
tion
Horgen Stockerstrasse 40 – 42 (Wisental II) 7,047 no Nov 2005
Regensdorf Im Pfand 2 5,082 no Jun 2007
Zurich Im Brächli 5 / 7 / 9 2,144 no Aug 2009
Zurich Turbinenstrasse Site A 5,144 no May 2011
Zurich Turbinenstrasse Site B 5,965 no May 2011
25,382
Completed properties
Aarau Buchserstrasse 8 241 no 1907 Mar 2011
Adliswil Wilacker I 7,231 no Dec 2007
Adliswil Wilacker II 10,935 no Dec 2007
Egerkingen Einschlagstrasse 8,729 no Mar 2011
Horgen Stockerstrasse 40 – 42 7,633 no Nov 2005
St. Erhard Längmatt 4,447 no 1979 Oct 2012
St. Moritz Via Maistra 292 557 no 1930 Jul 2010
Zurich Badenerstrasse 5952 2,389 no 1954 May 2012
Zurich Hinterbergstrasse 53 1,465 no Jul 2010
Zurich Turbinenstrasse trading property (Mobimo 1,936 no May 2008
Tower)
45,563

² Development properties

³ Sale as project

1 Status: certified purchase agreement

Sales status Carrying amount Realisation Project status Sales volumes Description
31.12. 20121 31. 12. 2012 31. 12. 2012 in TCHF
in TCHF
1/1 36,345 n/a in planning open n/a
0 / 8 17,720 2012 / 2013 in planning open 8 condominiums
0/24 5,937 2013 / 2015 in planning 29,421 24 condominiums
0 / 14 11,248 2012 / 2014 in planning 30,000 14 condominiums
0/1 10,279 open in planning open open
81,529 59,421
29 / 43 37,274 2011 / 2013 construction project 51,861 43 condominiums
0 / 45 11,010 2013 / 2015 construction project 33,956 45 condominiums
0 / 17 9,046 2011 / 2014 construction project 26,865 17 condominiums
55 / 63 47,148 2011 / 2013 construction project 60,720 63 condominiums
69 / 81 51,509 2011 / 2013 construction project 76,343 81 condominiums
155,987 249,745
open 470 open in planning open residential property
29 / 33 4,362 2010 / 2012 for sale 34,569 33 condominiums
22 / 24 1,581 2010 / 2012 for sale 27,709 24 condominiums
2 / 4 2,257 open for sale open 4 condominiums
47 / 47 6 2008 / 2010 for sale 60,192 47 condominiums
0/1 9,364 open for sale open open
open 15,734 2013 / 2014 in planning open open
0 / 41 20,794 2013 / 2014 in planning 49,520 41 condominiums
10 / 11 1,326 2011 / 2013 for sale 25,515 11 condominiums
36 / 53 53,058 2008 / 2011 for sale 172,526 53 condominiums
108,952 370,031

GEO GR APHIC BRE AK D OWN OF TRADING PROPERTIES

As at 31 December 2012, 20 trading properties were recognised in the balance sheet, of which

18 were new-build projects (prior year: 19)

2 were development projects (prior year: 4) Most residential development properties are located in the Canton of Zurich, primarily the city of Zurich itself and the Lake Zurich region.

Percentage breakdown of carrying amounts

in CHF

Canton of Zurich Canton of Lucerne Canton of Graubünden Canton of Solothurn

Canton of Aargau

2.2 COMMERCIAL PROPERT Y DETAILS

Location Address Acquired Built Year
renovated
Aarau Bahnhofstrasse 102 (Mediapark) Mar 2004 1975 1998
Aarau Polygon – Industriestrasse Jun 2001 2012
Aesch Pfeffingerring 201 May 2007 1973 2008
Baden-Dättwil Im Langacker 20/20a/22 Jun 2004 1972 1988
Brugg Bahnhofstrasse 11 Jun 2006 2005
Bülach Bahnhofstrasse 39 Sep 2005 1969 1995
Dierikon Pilatusstrasse 2 May 2009 1990 2007
Dübendorf Sonnentalstrasse 5 Mar/Dec 1999 1975 2000
Dübendorf Zürichstrasse 98 Jan 2000 1965 1983
Herisau Obstmarkt 1 Jul 2008 1984 2008
Horgen Seestrasse 80 Nov 2005 1960 2000/2008
Horgen Seestrasse 82 Nov 2005 2010/2011
Kreuzlingen Hauptstrasse 37 Sep 2005 1987
Kreuzlingen Lengwilerstrasse 2 Apr 2007 2007
Kreuzlingen Leubernstrasse 3 Nov 2006 1983/2003 2003
Kreuzlingen Romanshornerstrasse Nov 2006 n/a
Kriens Sternmatt 6 Feb 2004 1986 2008
Lausanne Flonplex Jun 2007 n/a
Lausanne Parking du Centre Nov 2009 n/a
Lausanne Place de la Gare 4 Nov 2009 1961 2000
Lausanne Place de la Navigation 4 – 6 Nov 2009 1895 2002
Lausanne Place de l'Europe 6 Nov 2009 1905 2012
Lausanne Place de l'Europe 7 Nov 2009 1905 2001
Lausanne Place de l'Europe 8 Nov 2009 1911 1989
Lausanne Place de l'Europe 9 Nov 2009 1900 2002
Lausanne Rue de Genève 2/4/5/6/8 Nov 2009 1904 2002
Lausanne Rue de Genève 7 Nov 2009 1932 1992/2011
Lausanne Rue de Genève 17 Nov 2009 1884 2002
Lausanne Rue de Genève 23 Nov 2009 1915 2005
Lausanne Rue de la Vigie 3 Nov 2009 1964
Lausanne Rue de la Vigie 5 Nov 2009 1963 1988
Lausanne Rue des Côtes-de-Montbenon 6 Nov 2009 1921 2009
Lausanne Rue des Côtes-de-Montbenon 8 Nov 2009 1946 1998
Lausanne Rue des Côtes-de-Montbenon 16 Nov 2009 1912 2007
Lausanne Rue des Côtes-de-Montbenon 24/26 Nov 2009 n/a
Lausanne Rue des Côtes-de-Montbenon 28/30 Nov 2009 n/a
Lausanne Rue du Port-Franc 9 Nov 2009 1927 2009
Lausanne Rue du Port-Franc 11 (Miroiterie) Nov 2009 2008
Lausanne Rue du Port-Franc 17 (Les Colonnades) Nov 2009 2002
Lausanne Rue du Port-Franc 20; Rue de Genève 33 Nov 2009 2007
Lausanne Rue du Port-Franc 22; Rue de la Vigie 1 Nov 2009 2007
Lausanne Voie du Chariot 3 Nov 2009 2008
Lausanne Voie du Chariot 4/6 Nov 2009 2008
Lausanne Voie du Chariot 5/7 Nov 2009 2008
Lucerne Alpenstrasse 9 Jun 2007 1890 2001/2010

1 Target gross yield as at reporting date 31 December 2012 as % of market value

² Vacancy rate as % of target rental income

Fair value
Acquisition costs
Gross yield Target rental revenues Vacancy rate as at Vacant area as at
in TCHF
in TCHF
in %1 in TCHF 31. 12. 2012 in %2 31. 12. 2012 in %
27,530 7.3 2,016 7.4 6.8
23,910 5.3 1,263 0.0 0.0
25,030 7.9 1,973 2.0 0.0
17,820 7.4 1,320 13.6 19.1
27,780 5.6 1,562 4.4 3.6
3,102 5.9 183 0.0 0.0
11,450 6.5 739 14.7 12.7
27,320 6.7 1,828 6.6 8.0
21,810 6.6 1,433 29.7 30.9
16,720 6.4 1,063 4.3 6.6
8,112 6.4 517 0.2 0.0
6,488 3.1 201 0.0 0.0
11,880 5.9 699 0.0 0.0
6,434 5.0 324 0.0 0.0
66,660 5.5 3,666 0.6 1.2
1,925 4.2 81 0.0 n/a
37,630 8.4 3,157 16.7 21.5
4,437 4.7 210 0.0 n/a
7,776 5.5 428 0.0 n/a
26,320 5.6 1,481 0.0 0.0
0.0
10,300 6.6 676 0.0
5,403 5.5 298 0.0
7,776 5.8 454 0.0
7,235 5.2 374 0.0
21,040
23,270
6.0
5.6
1,253
1,307
0.0
0.0
0.0
0.0
30,270 5.3 1,596 0.0 0.0
18,990 7.3 1,386 0.0
2,205 8.2 182 0.0 0.0
0.0
6,872 6.2 427 3.0 3.1
11,670 7.3 857 0.0 0.0
6,453 5.4 349 0.5 0.8
7,741 6.8 528 0.7 1.4
4,505 5.8 263 0.0 0.0
1,745 4.5 79 0.0 n/a
2,103 3.5 74 0.0 n/a
5,764 5.9 342 0.0 0.0
12,590 7.1 895 1.3 4.2
11,280 6.4 721 0.0 0.0
44,160 7.2 3,184 0.0 0.0
21,790 5.6 1,211 0.0 0.0
14,020 6.1 851 1.9 6.3
30,810 6.0 1,863 0.0 0.0
29,910 5.6 1,681 1.0 2.2
11,120 4.5 505 0.0

2.2 COMMERCIAL PROPERT Y DETAILS

Location Address Acquired Built Year
renovated
Neuhausen Victor-von-Bruns-Strasse 19 Mar 2007 2007
Renens Chemin de la Rueyre 116/118 Mar 2007 1989
St. Gallen Schochengasse 6 Feb 2004 1974 2000
St. Gallen St. Leonhardstrasse 22 Dec 2004 1900 2002/2006
St. Gallen Wassergasse 42/44 Feb 2004 1966 2000
St. Gallen Wassergasse 50/52 Feb 2004 1998
Winterthur Industriestrasse 26 Oct 1999 1994 2002
Zurich Bahnhofplatz 4 Jul 2006 1881 2002/2005
Zurich Friedaustrasse 17 Oct 1998 1968
Zurich Hardturmstrasse 3/5 (Mobimo Tower) Nov 1999 1974 2001/2008
Zurich Letzigraben 134 – 136 Sep 2006 1958/1975
Zurich Rautistrasse 12 Nov 1999 1972 2011
Zurich Schifflände 6; Kruggasse 1 May 1998 1950
Zurich Stauffacherstrasse 41 Jun 2000 1990 2011
Zurich Thurgauerstrasse 23; Siewerdtstrasse 25 Mar 2002 1963/1968/1985 1998
Zurich Turbinenstrasse – Mobimo Tower Hotel May 2008 2011
Zurich Witikonerstrasse 311 / 311b Sep 1997 1992
62 Commercial investment properties
Aarau Site 1 –Torfeld Süd Jun 2001/Aug 2008 1967/1984
Aarau Site 2 –Torfeld Süd Oct 2006 1905/1916/1929/1943/1954
Aarau Site 3 –Torfeld Süd Jun 2001/Oct 2006 1905/1916/1929/1943/1954
/1974
Aarau Site 4 –Torfeld Süd Jun 2001/ Oct 2006 / 1905/1916/1929/1943/1954/1
Feb 2009 967/1973
Kriens Mattenhof (building land) Mar 2005 n/a
Lausanne Avenue d'Ouchy 4 – 6 May 2010 1962
Lausanne Rue de Genève 19 Nov 2009 1893 2002
Lausanne Rue de Genève 21 Nov 2009 1902
Lausanne Rue des Côtes-de-Montbenon 1 / 3 Nov 2009 1930
Lausanne Rue des Côtes-de-Montbenon 5 Nov 2009 1930
Lausanne Rue des Côtes-de-Montbenon 11 / 24 Nov 2009 1935
Lausanne Rue des Côtes-de-Montbenon 12 Nov 2009 1918 2004
Lausanne Rue des Côtes-de-Montbenon 14 Nov 2009 1963
Regensdorf Althardstrasse 10 Dec 2001 1982
Regensdorf Althardstrasse 30 Dec 2001 1976
Zurich Albulastrasse /Hohlstrasse Apr 2010 1896/1928
16 Commercial development properties

Total commercial properties 1,367,228 1,208,513 6.0 82,481 9.7 14.2

¹ Target gross yield as at reporting date 31 December 2012 as % of market value

² Vacancy rate as % of target rental income

Fair value Acquisition costs
Gross yield
Target rental revenues Vacancy rate as at Vacant area as at
in TCHF in TCHF
in %1
in TCHF 31. 12. 2012 in %2 31. 12. 2012 in %
13,090 5.5 725 0.0 0.0
12,490 6.9 859 0.1 0.0
17,880 6.0 1,075 0.0 0.0
4,510 5.8 263 0.0 0.0
15,850 6.1 967 12.6 13.2
13,720 6.1 834 0.0 0.0
20,340 7.2 1,457 7.5 6.6
20,330 4.5 912 0.0 0.0
9,867 5.3 521 2.0 0.0
58,560 5.6 3,259 0.9 0.0
13,890 6.7 925 5.1 8.2
9.9
19,890
7,017
6.7
4.7
1,338
331
9.5
0.0
0.0
48,470 4.9 2,379 0.0 0.0
14,740 6.5 963 0.0 0.0
131,910 4.3 5,718 0.2 0.0
8,836 6.4 569 16.3 14.9
1,160,546 1,000,753
5.9
68,597 3.4 5.6
9,988 9.1 910 100.0 100.0
7,546 2.8 211 72.8 67.8
26,886 5.6 1,494 0.0
17,659 7.1 1,256 70.7
3,187 0.0 0 n/a n/a
65,330
2,787
6.2
13.4
4,045
374
31.0
11.9
33.8
20.5
2,588 11.0 284 1.3
608 13.9 85 8.1 11.4
253 11.2 28 0.0 0.0
0.0
151 8.2 12 0.0
1,648 8.5 140 0.0 0.0
0.0
450 8.0 36 0.0 0.0
19,150 9.7 1,864 26.5 23.9
14,530 13.3 1,936 89.3 88.9
33,920 3.6 1,209 19.3
206,682 207,759
6.7
13,884 41.2 38.8
1,367,228 1,208,513
6.0
82,481 9.7

2.2 COMMERCIAL PROPERT Y DETAILS

Location Address Ownership Site area in m2 Register of
polluted sites
Aarau Bahnhofstrasse 102 (Mediapark) sole ownership 5,675 no
Aarau Polygon – Industriestrasse sole ownership 3,840 yes (Code D)3
Aesch Pfeffingerring 201 sole ownership 16,034 no details
Baden-Dättwil Im Langacker 20/20a/22 sole ownership 8,792 no
Brugg Bahnhofstrasse 11 condo (773/1000) 2,726 no
Bülach Bahnhofstrasse 39 sole ownership 563 no
Dierikon Pilatusstrasse 2 sole ownership 4,397 no
Dübendorf Sonnentalstrasse 5 condo (929/1000) 4,368 yes (code D)3
Dübendorf Zürichstrasse 98 sole ownership 9,809 yes (petrol station)
Herisau Obstmarkt 1 sole ownership 1,602 no
Horgen Seestrasse 80 sole ownership 3,393 no
Horgen Seestrasse 82 sole ownership 0 no
Kreuzlingen Hauptstrasse 37 sole ownership 1,448 no
Kreuzlingen Lengwilerstrasse 2 sole ownership 7,027 no
Kreuzlingen Leubernstrasse 3 sole ownership 25,530 no
Kreuzlingen Romanshornerstrasse sole ownership 2,180 no
Kriens Sternmatt 6 sole ownership 28,757 no
Lausanne Flonplex sole ownership 1,953 yes8
Lausanne Parking du Centre sole ownership 5,065 yes8
Lausanne Place de la Gare 4 sole ownership 630 no
Lausanne Place de la Navigation 4 – 6 sole ownership 567 yes4
Lausanne Place de l'Europe 6 sole ownership 369 yes4
Lausanne Place de l'Europe 7 sole ownership 391 yes4
Lausanne Place de l'Europe 8 sole ownership 1,035 yes4
Lausanne Place de l'Europe 9 sole ownership 975 yes4
Lausanne Rue de Genève 2/4/5/6/8 sole ownership 2,260 yes4
Lausanne Rue de Genève 7 sole ownership 3,343 yes4
Lausanne Rue de Genève 17 sole ownership 2,312 yes4
Lausanne Rue de Genève 23 sole ownership 2,524 yes6
Lausanne Rue de la Vigie 3 sole ownership 972 yes7
Lausanne Rue de la Vigie 5 sole ownership 852 yes7
Lausanne Rue des Côtes-de-Montbenon 6 sole ownership 510 yes4
Lausanne Rue des Côtes-de-Montbenon 8 sole ownership 587 yes4
Lausanne Rue des Côtes-de-Montbenon 16 sole ownership 850 yes4
Lausanne Rue des Côtes-de-Montbenon 24/26 sole ownership 867 yes8
Lausanne Rue des Côtes-de-Montbenon 28/30 sole ownership 1,068 yes7
Lausanne Rue du Port Franc 9 sole ownership 2,733 yes6
Lausanne Rue du Port-Franc 11 (Miroiterie) sole ownership 612 yes5
Lausanne Rue du Port-Franc 17 (Les Colonnades) sole ownership 776 yes5
Lausanne Rue du Port-Franc 20; Rue de Genève 33 sole ownership 2,000 yes5
Lausanne Rue du Port-Franc 22; Rue de la Vigie 1 sole ownership 1,999 yes5
Lausanne Voie du Chariot 3 sole ownership 500 yes5
Lausanne Voie du Chariot 4/6 sole ownership 2,614 yes5
Lausanne Voie du Chariot 5/7 sole ownership 1,042 yes5
Lucerne Alpenstrasse 9 sole ownership 569 no

⁴ Site pollution unlikely – the property must be maintained in accordance with the design plan ("Gestaltungsplan") and has been subject to comprehensive renovation in recent years

⁵ Site pollution eliminated - property rebuilt in recent years

Other Residential Commercial space Sales space Office space Total rentable Property
in % space in % in % in % in % area in m2 description9
33.6 1.5 9.1 0.0 55.8 13,165 com
8.3 0.0 0.0 0.0 91.7 4,447 com
8.6 0.0 63.0 0.0 28.3 14,219 com
19.6 1.1 28.7 28.3 22.4 9,425 com
12.0 0.0 21.5 33.4 33.3 4,069 com
18.5 0.0 0.0 16.6 64.8 944 com
8.6 0.0 15.3 15.8 60.3 4,397 com
11.1 0.0 65.4 0.0 23.5 8,769 com
25.2 1.1 28.0 16.9 28.8 10,151 com
35.2 0.0 7.0 2.1 55.7 6,090 com
4.8 0.0 19.0 0.0 76.2 2,151 com
100.0 0.0 0.0 0.0 0.0 64 car park
31.9 0.0 0.0 17.9 50.2 2,792 com
33.5
1.9
0.0 0.0 66.5 0.0 1,348 com
0.0 0.0 89.3 8.8 17,822 com
100.0 0.0 0.0 0.0 0.0 n/a building right
21.4 0.9 48.7 3.6 25.5 27,556 com
100.0 0.0 0.0 0.0 0.0 1,953 building right
100.0 0.0 0.0 0.0 0.0 6,526 building right
100.0 0.0 0.0 0.0 66.6 4,485 com
100.0 0.0 0.0 0.0 0.0 2,800 com – hotel
0.0 0.0 0.0 0.0 923 com – hotel
0.0
0.0
0.0
0.0
7.9
24.5
66.3
75.5
1,423
1,593
com
com
0.0 0.0 31.3 43.3 3,492 com
0.0 0.0 85.5 10.3 4,401 com
20.9 0.0 27.2 12.4 5,114 com
0.0 7.2 20.8 43.4 6,680 com – share investment
prop.
0.0 0.0 0.0 0.0 2,104 com
0.0 0.0 0.0 54.9 3,104 com
0.0 0.0 0.0 61.6 3,645 com
0.0 26.7 18.5 37.0 2,182 com
0.0 3.6 0.0 73.9 2,226 com
33.6 0.0 0.0 66.4 819 com
100.0 0.0 0.0 0.0 0.0 867 building right
100.0 0.0 0.0 0.0 0.0 1,068 building right
0.0 42.4 20.5 21.9 1,733 com
0.0 0.0 57.9 0.0 2,309 com
17.1 24.9 0.0 0.0 57.9 2,142 com
32.8 0.0 0.0 32.3 34.9 9,971 com
0.0 0.0 8.9 81.3 4,066 com
0.0 0.0 15.5 75.5 2,168 com
16.0 0.0 0.0 65.2 32.0 5,438 com
13.8 0.0 15.9 54.3 5,030 com
77.2 0.0 13.1 0.0 1,979 res+com

⁶ Site pollution suspected but no measures expected - properties must be maintained in accordance with the design plan ("Gestaltungsplan")

⁷ Site pollution suspected, measures required in new-build plans

⁹ Com = commercial; Res = residential

2.2 COMMERCIAL PROPERT Y DETAILS

3 Code D: clarification necessary in the context of building projects

6 Site pollution suspected but no measures expected – properties must be maintained in accordance with the design plan ("Gestaltungsplan")

7 Site pollution suspected, measures required in new-build plans

9 Com = commercial; Res = residential

Property
description9
Total rentable
area in m2
Office space
in %
Sales space
in %
Commercial space
in %
Residential
space in %
Other
in %
com 2,806 93.8 0.0 0.0 0.0 6.2
com 4,339 67.2 0.0 0.8 0.0 32.0
com 4,460 95.4 0.0 0.0 0.0 4.6
com 1,090 79.1 12.8 0.0 0.0 8.2
com 3,958 86.2 0.0 0.0 9.4 4.4
com 3,554 72.3 0.0 0.0 0.0 27.7
com 11,329 63.1 0.8 21.9 0.0 14.3
com 757 63.5 27.9 0.0 0.0 8.6
com 2,535 62.0 0.0 7.1 10.0 20.9
com 8,228 94.3 0.0 0.0 0.0 5.7
com 6,872 16.2 0.0 33.1 1.3 49.4
com 6,094 73.4 15.2 1.8 1.3 8.2
com 511 50.9 0.0 0.0 7.4 41.7
com 6,755 60.6 1.0 0.0 0.0 38.4
com 3,902 59.1 6.8 6.9 0.0 27.2
com – hotel 22,551 0.0 0.0 0.0 0.0 100.0
res+com 2,084 34.2 0.9 30.6 28.8 5.5
309,475 38.6 14.5 15.6 2.0 29.3
com 4,286 85.9 0.0 0.0 0.0 14.1
com 4,084 4.4 2.4 82.7 6.9 3.6
com 21,248 0.5 0.0 93.3 0.0
com 9,929 0.0 0.0 96.4 3.6 0.0
land 0 0.0 0.0 0.0 0.0
com 25,446 20.9 15.4 47.7 0.0 16.1
com 3,374 0.0 18.1 26.6 0.0 55.3
com 3,515 0.0 17.1 26.9 0.0 56.0
com 314 0.0 0.0 100.0 0.0 0.0
com 272 0.0 0.0 36.4 0.0 63.6
com 220 0.0 0.0 100.0 0.0 0.0
com 935 0.0 0.0 21.4 0.0 78.6
com 640 0.0 0.0 100.0 0.0 0.0
com 13,751 38.6 28.2 9.5 0.0 23.7
com 12,893 61.2 0.0 29.5 2.2 7.1
com 7,712 3.3 0.0 85.1 0.0 11.6
108,619 20.9 8.4 55.1 0.9 14.7
418,094 34.1 12.9 25.8 1.7 25.5

2.3 RESIDENTIAL PROPERT Y DETAILS

Baltenschwilerstrasse 3/5/7/9/11/13/15/17 Oct 2007 renovated
1973/1980 1992/2007
Zürichstrasse 244/246 Nov 2005 1966 1997/2001
Seestrasse 43 – 49 Nov 2005 2011
Seestrasse 63 – 69 Nov 2005 2011
Avenue d'Ouchy 72/74 Nov 2009 1907
Avenue d'Ouchy 70 Nov 2009 1906 2004
Avenue d'Ouchy 76 Nov 2009 1907 2004
Place de la Navigation 2 Nov 2009 1895 2004
Rue Beau-Séjour 8 Nov 2009 2011
Rue des Fontenailles 1 Nov 2009 1910/1963 1993
Buchenacker 22/24/26/28; Unterer Buchenacker 7 Jun 2007 1994/1995
Farmanstrasse 47/49 Dec 2010 2009
Rütteliweg 8; Spitalhalde 40 Sep 2006 1972 2004
Teufenerstrasse 15 Dec 2006 1900 2005
Brühlwiesenstrasse 11a/11b/15a/15b/19a/19b Jun 2007 1984/1988
Katzenbachstrasse 221 – 231 Oct 2004/Feb 2005 2009
Katzenbachstrasse 239 Mar 2008 1969
Klingenstrasse 34; Konradstrasse 68 Nov 2001 1897 1987
Manessestrasse 190/192; Staffelstrasse 1/3/5 Dec 2005 2012
Wettingerwies 7; Zeltweg Apr 1999 1969 2003

20 Residential investment properties 380,440 317,277 5.3 20,010 5.4 4.0

Location Address Ownership Site area in m2 Register of
polluted sites
Bergdietikon Baltenschwilerstrasse 3/5/7/9/11/13/15/17 sole ownership 11,131 no
Binz Zürichstrasse 244/246 sole ownership 4,025 no
Horgen Seestrasse 43 – 49 sole ownership 6,047 no
Horgen Seestrasse 63 – 69 sole ownership 5,307 no
Lausanne Avenue d'Ouchy 72/74 easement 0 yes4
Lausanne Avenue d'Ouchy 70 sole ownership 478 yes4
Lausanne Avenue d'Ouchy 76 sole ownership 738 yes4
Lausanne Place de la Navigation 2 sole ownership 254 yes4
Lausanne Rue Beau-Séjour 8 sole ownership 3,827 yes5
Lausanne Rue des Fontenailles 1 sole ownership 716 no
Münchwilen Buchenacker 22/24/26/28; Unterer Buchenacker 7 sole ownership 5,741 no
Opfikon-Glattbrugg Farmanstrasse 47/49 sole ownership 3,840 no
Rheinfelden Rütteliweg 8; Spitalhalde 40 sole ownership 14,817 no
St. Gallen Teufenerstrasse 15 sole ownership 658 no
Wängi Brühlwiesenstrasse 11a/11b/15a/15b/19a/19b sole ownership 7,412 no
Zurich Katzenbachstrasse 221 – 231 sole ownership 6,137 no
Zurich Katzenbachstrasse 239 sole ownership 1,987 no
Zurich Klingenstrasse 34; Konradstrasse 68 sole ownership 361 no
Zurich Manessestrasse 190/192; Staffelstrasse 1/3/5 sole ownership 2,345 no
Zurich Wettingerwies 7; Zeltweg sole ownership 610 no

20 Residential investment properties 76,431 71,784 32 119 249 263 46 709 6.6

¹ Target gross yield as at reporting date 31 December 2012 as % of market value

² Vacancy rate as % of target rental income

⁴ Site pollution unlikely – the property must be maintained in accordance with the design plan ("Gestaltungsplan") and has been subject to comprehensive renovation in recent years

⁵ Site pollution eliminated – property rebuilt in recent years

Fair value Acquisition costs Gross yield Target rental revenues Vacancy rate as at Vacant area as at
in TCHF in TCHF in %1 in TCHF 31. 12. 2012 in %2 31. 12. 2012 in %
20,200 4.9 997 0.4 1.0
9,962 5.4 537 0.8 0.0
28,420 4.8 1,354 3.9 3.2
26,530 4.8 1,268 9.4 9.1
2,482 5.9 146 0.0 0.0
4,673 6.0 278 12.5 11.7
12,960 4.9 630 0.0 0.0
5,353 5.6 299 0.0 0.0
77,240 5.4 4,134 0.7 2.5
2,825 5.3 150 8.3 12.3
13,180 5.9 775 0.7 0.5
22,470 4.7 1,061 1.6 0.4
18,050 6.0 1,081 3.2 0.0
3,930 4.9 191 1.8 4.3
11,490 6.2 711 1.7 0.9
46,160 5.1 2,361 10.3 7.1
0.0
5,348 5.5 295 4.6
7,517 5.3 402 0.0
50,850 5.5 2,781 17.9 16.8
10,800 5.2 559 0.0 0.0
380,440 317,277 5.3 20,010 5.4 4.0
Property Total 1 – 1 ½- 2 – 2 ½- 3 – 3 ½- 4 – 4 ½- 5 or more Total Other forms
description9 rentable room room room room room apartments of use in %
area in m2 apartments apartments apartments apartments apartments
3 res 5,226 0 8 18 28 0 54
res 2,580 0 6 12 12 0 30
res 4,555 0 2 6 24 7 39
res 4,051 0 0 24 16 0 40
res 979 0 6 3 3 0 12
res+com 1,133 0 0 5 0 5 10
res+com 2,517 0 0 0 0 10 10 28.0
res+com 1,239 0 2 0 1 5 8
res 10,211 0 19 55 17 10 101
res 945 1 0 0 4 4 9
3 res 4,358 0 4 20 20 0 44
7 res 3,609 1 13 16 9 0 39 0.4
2 res 5,588 8 30 0 46 0 84 0.5
res+com 1,598 1 2 1 7 0 11 30.1
3 res 4,439 0 6 21 21 0 48
res 7,961 0 5 32 27 5 69 4.1
res 1,610 0 5 8 5 0 18 0.0
res+com 1,457 0 0 7 3 0 10 41.2
res 6,583 0 11 21 20 0 52 10.0
res+com 1,145 21 0 0 0 0 21 42.1
71,784 32 119 249 263 46 709

⁹ Com = commercial; Res = residential

2.4 DETAILS OF INVESTMENT PROPERTIES UNDER CONSTRUCTION

Location Address Ownership Acquired Built
Affoltern am Albis Obfelderstrasse –Mietwohnungen sole ownership Aug 2011 2013
Affoltern am Albis Obstgartenstrasse – Seniorenheim sole ownership Aug 2011 2013
Horgen Seestrasse 93 –Meilenwerk sole ownership Nov 2005 1956/2013
Lausanne Avenue d'Ouchy 4 – 6 (Administration) sole ownership May 2010 1962/2012
Lausanne Rue Voltaire 2 – 12 sole ownership Oct 2012
Lausanne Vallée du Flon – Les Pépinières sole ownership Nov 2009 2013
Regensdorf Schulstrasse 95/101/107/115; Riedthofstrasse 55/63; sole ownership Jun 2007 1963/1969
Feldblumenstrasse 44
Zurich Turbinenstrasse – CityWest, Baufeld C sole ownership Dec 2010 2013
8 Immeubles en cours de réalisation

All of the above investment properties are in the construction phase. Completion of the properties in Zurich, Turbinenstrasse – City West Site C, Lausanne, Avenue d'Ouchy 4 – 6, Affoltern am Albis, Obfelderstrasse and Lausanne, Les Pépinières is scheduled for 2013. Construction of the properties in Horgen, Seestrasse 93 – Meilenwerk, Affoltern am Albis, Obstgartenstrasse, and Lausanne, Rue Voltaire, is scheduled to end at the end of 2014; in Regensdorf, Schulstrasse 95, for 2015.

2.5 OWNER-OCCUPIED PROPERT Y DETAILS

Location Address Ownership Acquired Built Year renovated
Carrying amount
Site area
Register of
Description of
Total rentable
Lausanne Rue de Genève 7 sole ownership Nov 2009 1932 in TCHF
in m2
polluted sites
property9
area in m2
2011
3,902
3,343
yes4
com-share own-use
Lausanne Rue des Côtes-de-Montbenon 16 sole ownership Nov 2009 1912 2007
637
850
yes4
com-share own-use
Küsnacht Seestrasse 59 sole ownership Sep 2002 2006 12,096
2,125
no
com
3 Properties 16,635
6,318

2.6 CO - OWNER SHIP DE TAIL S

Location Address Ownership Acquired Built Fair value
Site area
Register of
Description of
Total rentable
Lausanne Flonplex co-ownership 40% Nov 2009 2001 in TCHF
in m2
polluted sites
9,665
0
property9
area in m2
yes5
multiplex cinema
5,256
Lausanne Parking du Centre co-ownership 50% Nov 2009 2002 28,250
0
yes5
car park
Lausanne Parking Saint-François co-ownership 26.5% Nov 2009 n/a 2,531
0
yes7
car park
3 Properties 40,446

³ Code D: clarification necessary in the context of building projects

⁵ Site pollution eliminated – property rebuilt in recent years

⁴ Site pollution unlikely – the property must be maintained in accordance with the design plan ("Gestaltungsplan") and has been subject to comprehensive renovation in recent years

Total rentable Description of Register of Site area Fair value
property9
area in m2
polluted sites in m2 in TCHF
res no 5,305 11,270
res no 3,537 21,180
com yes 10,542 34,700
com yes7 12,609 46,370
res no 4,743 19,020
com yes 2,602 20,000
2 res no 16,658 13,470
res no 7,431 78,240
74,484 63,427 244,250
Total rentable Description of Register of Site area Carrying amount Year renovated
area in m2 property9 polluted sites in m2 in TCHF
624 com-share own-use yes4 3,343 3,902 2011
244 com-share own-use yes4 850 637 2007
2,050 com no 2,125 12,096
2,918 6,318 16,635
Ownership
Acquired
Built
Fair value Site area Register of Description of Total rentable
in TCHF in m2 polluted sites property9 area in m2
co-ownership 40%
Nov 2009
2001
9,665 0 yes5 multiplex cinema 5,256
co-ownership 50%
Nov 2009
2002
28,250 0 yes5 car park 0
co-ownership 26.5%
Nov 2009
n/a
2,531 0 yes7 car park 0
40,446

⁷ Site pollution suspected, measures required in new-build plans

⁹ Com = commercial; Res = residential

2.7 BRE AK D OWN OF RE SIDEN T IAL AND COMMERCIAL INV E S TMEN T PROPER T IE S AND COMMERCIAL DEVELOPMENT PROPERTIES BY ECONOMIC AREA

As at 31 December 2012, 106 investment properties were recognised in the balance sheet; of which

  • 78 were commercial properties (prior year: 77)
  • 20 were residential properties (prior year: 20)

62 commercial investment properties

32.7%

8 were investment properties under construction (prior year: 8)

Charts: Breakdown of residential and commercial investment properties, commercial development properties and investment properties under construction by economic area

20 residential investment properties

As statutory auditor, we have audited the consolidated financial statements of Mobimo Holding AG, which comprise the statement of balance sheet, income statement, statement of comprehensive income, statement of changes in equity, cash flow statement and notes (pages 38 to 108), for the year ended 31 December 2012.

Board of Directors' Responsibility

The board of directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), Article 17 of the Directive on Financial Reporting (Directive Financial Reporting, DFR) of SIX Swiss Exchange and the requirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The board of directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards as well as International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements for the year ended 31 December 2012 give a true and fair view of the financial position, the results of operations and the cash flows in accordance with International Financial Reporting Standards (IFRS) and comply with Article 17 of the Directive on Financial Reporting (Directive Financial Reporting, DFR) of SIX Swiss Exchange as well as the Swiss law.

Report on Other Legal Requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.

In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the board of directors.

We recommend that the consolidated financial statements submitted to you be approved.

KPMG AG

Licensed Audit Expert Licensed Audit Expert Auditor in Charge

Reto Benz Reto Kaufmann

Root/ Lucerne, 11. February 2013

Report of the valuation expert

Valuation of the properties of Mobimo Holding AG

Mandate

In accordance with your mandate, we have undertaken a valuation of those properties held for investment purposes by your company. The valuation was undertaken as per 31st December 2012 for accounting purposes. On this date, the total portfolio of either investment properties or properties under construction as investment properties totalled 106 units¹.

The valuations result in the following summary table for the relevant portfolio of valued properties:

Projected rental
Fair value income
per 31. 12. 2012 Share 31. 12. 2012
Segment Units (CHF) of total (CHF) Gross yield
Investment units – commercial properties 62 1,160,546,000 58.3% 68,597,027 5.9%
Development units – commercial properties 16 206,681,600 10.4% 13,884,357 6.7%
Investment units – residential properties 20 380,440,000 19.1% 20,010,368 5.3%
All properties in inventory 98 1,747,667,600 87.8 % 102,491,751 5.9 %
Properties under construction 8 244,250,000 12.2%
All properties 106 1,991,917,600 100.0 %

The investment properties and the properties under construction have been valued as per 31st December 2012 using the "discounted cash flow" method. The properties are known to Wüest & Partner due to previous valuations, inspections carried out and documents and information made available to us. For the purposes of the update valuations Wüest & Partner was provided with current a tenant rent roll as per the date of valuation as well as the investment costs undertaken in the defined fiscal year.

It is on this basis and as an independent valuation expert that we undertook the valuation of the individual properties.

1 The portfolio of investment properties includes, in addition to existing properties, a further eight properties under construction. These are assessed in line with the rules and guidelines of IAS/IFRS as «Investment Properties under Construction (IPUC)».

Not included in the above summary table are the three self-used operational properties (Seestrasse 59, Küsnacht; Rue de Genéve 7, Lausanne; Cotes de Montbenon 16, Lausanne) as well as the properties of the affiliated companies (50%-share of Parking du Centre SA [PCSA], Lausanne; 40%-share of Flonplex SA, Lausanne; 26.5%-share of Parking St. François SA, Lausanne).

Basis for the Valuations

The market values determined by us, with the valuation date of 31st December 2012, have been completed in line with the definition of "fair value" as described in the "International Financial Reporting Standards" (IFRS) in accordance with IAS 40 "Investment Properties".

The reported "fair value" does not take into account any capital gains tax, property gains tax or value-added tax as well as any other costs or commissions associated with a possible sale of the properties. In addition, no owner liabilities regarding taxes (with the exception of regular property taxes) and financing costs are included.

The determination of "fair value" for investment properties has been undertaken in line with Paragraph 51 of IAS 40, thereby excluding future value-enhancing investments such as conversions, extensions, etc., as well as the associated increases in additional income. A standard marketing period has been included in the valuation for those rental units vacant on the date of valuation.

The valuation of properties under construction is undertaken in accordance with the expanded definition of income properties in IAS 40 (expansion per 1st January 2009). Under this definition those properties, which are scheduled for later use as investment properties and which are under construction on the date of valuation, fall under the scope of IAS 40 and as such are to be accounted for at market value.

Discounting is undertaken for each property in accordance with location and real estate criteria. These reflect both the relevant spatial characteristics of the macro and micro location as well as the most important aspects of the current economic circumstances of the property.

Independence and Confidentiality

We confirm that the valuations of the Mobimo Holding AG properties have been completed in accordance with our business policies, without interference by third parties and in solely in accordance with the above-mentioned mandate.

Wüest & Partner AG Zurich, 11. February 2013

Patrik Schmid Marcel Schmitt dipl. Arch. ETH / SIA, Partner lic. oec. publ., Manager

Additional information on DCF valuation

Value growth

The development of real estate value is influenced by various fundamental factors, whereby a distinction should be made between property-specific factors (e.g. property management) and exogenous factors arising from the real estate and financial market environments:

  • Changes in the property management situation on both the revenue and cost side result in a direct adjustment in the declared market value. Of particular significance are the impact of new leases and the expiry of existing tenancies, changes in the vacancy situation as well as changes in operating and maintenance costs.
  • Extraordinary investment programmes carried out in the reporting year have a direct impact on property values due to the absence of these funds in the cash flow summary. Value-enhancing investments can be passed on to tenants and thereby lead to higher rental income.
  • Developments in the relevant local real estate market have an impact on the calculation of potential rental income.
  • Changes in the capital or transaction markets have an influence on discount rates.

Age-related deterioration of a property is also a major factor affecting its value. All other factors remaining constant, aging alone leads to an approximate 1%¹ depreciation in building value within the space of a single year.

Estimation of rental income

Valuations are based on actual rental income as stated in the property management company's rental schedule as at the valuation date. The declared rental income is taken into account in the valuation after the incorporation of any terms and conditions agreed in rental agreements. Future rental income is estimated on the basis of the individual rental properties, with an individual revenue cash flow modelled for each property, taking existing rental agreements into account.

For rental agreements of limited duration, the potential rental income attainable over the long term, from the current perspective, is adopted in the valuation on expiry of the contractual rental period. Potential rental income that is in line with the market is determined on the basis of the most recent rental agreements concluded either for the property concerned or for comparable properties in the vicinity of the property concerned, as well as on the comprehensive real estate market research carried out by Wüest & Partner.

The plausibility of potential rental income from retail space is verified using calculations of customary market turnover figures.

For existing rental agreements based on mixed usage, potential rental income is based on the separate individual forms of usage.

Genuine tenants' options to extend a lease are taken into account when actual rents are less than the market rents determined. Non-genuine options where provisions are in place for rents to be adjusted in line with market rents prevailing at a specific time are incorporated into the valuations as fixed-term rental agreements, as described above. For rental agreements of unlimited duration, as is common with residential use, adjustments in line with the potential rental income calculated take account of general conditions under rental law and the specific tenant turnover of the property in question.

Operating and maintenance costs

The operating and maintenance costs incorporated into valuations are based on the property accounts from prior years and on the budgets approved by the various bodies responsible at Mobimo Holding AG. The data are subject to a plausibility check based on existing contractual agreements from the property management side and compared with benchmarks from Wüest & Partner's database pool. Projected outlays for operation and ongoing maintenance are modelled on the basis of these analyses.

Long-term maintenance costs

Short-, medium- and long-term maintenance costs are of central importance in the DCF valuation. These valuations essentially reflect the investment plans provided by Mobimo Holding AG. The plausibility of these data is checked using specific cost benchmarks.

In order to determine the long-term maintenance costs, Wüest & Partner uses a life-cycle method for the long-term value preservation of the existing structural fabric. In this analysis, the long-term investment required to preserve the value of the property is calculated, taking into account the age of the characteristic building components along with production costs and the building's current structural condition.

¹ Actual accrued depreciation depends in particular on the type of construction and on the age and location of the property in question

Discount rate

The relevant discount rates determined reflect the risk assessment profile for each property. In determining these rates, Wüest & Partner takes both property-specific and location- and market-specific factors into account. The discount rates selected are regularly subject to empirical measurement and verification using known change of ownership and transaction data.

The market-based, risk-adjusted discount rate is structured around individual factors within the framework of a premium model. The basis is a riskfree interest rate (in this case a long-term government bond), and premiums are then determined and added to this basis for general real estate risk (such as the property becoming illiquid, market risks) and for specific property risks (relating to the specific characteristics of the property and the location).

Inflation

Inflation is implicitly incorporated into valuations via changes in cash flows. In calculating rental income, each rental position takes into account the contractually agreed inflation adjustment or indexation rate (e.g. 80% adjustment in line with changes in the consumer price index). Full inflation is generally factored into operating and maintenance costs. The discount rate selected is expressed in real terms.

Mobimo EPRA key performance metrics

The Mobimo Group reports its key performance metrics in accordance with the Best Practices Recommendations of the EPRA Reporting and Accounting Committee. The European Public Real Estate Association is an association of leading European property companies and is a partner of the FTSE EPRA/NAREIT index family, which added the Mobimo Holding AG share as one of its components on 20 June 2011. The figures published elsewhere by Mobimo on NAV, net initial yield and vacancy rates may deviate from the EPRA figures set out below, as Mobimo does not, for example, include the market value of trading properties, which are accounted for at cost, and bases its calculations on effective rents. However, when calculating earnings per share Mobimo does take account of gains on the sale of trading and investment properties.

A EPRA Earnings & EPRA Earnings Per Share 2012 2011
Earnings as per IFRS income statement 80,454
(i) Changes in value of investment properties, development properties held for investment and other interests –36,889 –41,194
Profits or losses on disposal of investment properties, development properties held for investment and other
(ii) interests 66 –3,459
Profits or losses on the sales of trading properties including impairment charges in respect of trading proper
(iii) ties –9,696 –22,316
(iv) Tax on profits or losses on disposals 2,886 7,317
(v) Negative goodwill/goodwill impairment n/a n/a
(vi) Changes in fair value of financial instruments and associated close-out costs 135 4,248
(vii) Acquisition costs on share deals and non-controlling joint venture interests n/a n/a
(viii) Deferred tax in respect of EPRA adjustments 9,189 10,687
(ix) Adjustments to positions (i) to (viii) in respect of joint ventures –614 –833
(x) Minority interests in respect of the above –32 n/a
EPRA Earnings 41,367 34,904
Average number of shares outstanding 6,191,784 5,202,626
EPRA Earnings Per Share 6.68 6.71
B EPRA Net Asset Value 2012 2011
NAV as per consolidated financial statements 1,197,514 1,174,183
Effect of exercise of options, convertibles and other equity instruments 166,219 170,900
Diluted NAV after the exercise of options, convertibles and other equity instruments 1,363,733 1,345,083
(i.a)
Revaluation of investment properties (if IAS 40 cost model is used)
n/a n/a
(i.b)
Revaluation of investment property under construction (IPUC) (if IAS 40 cost model is used)
n/a n/a
(i.c)
Revaluation of other non-current investments (owner-occupied properties)
9,560 8,847
(ii)
Revaluation of tenant leases held as finance leases
n/a n/a
(iii)
Revaluation of trading properties
37,069 47,495
(iv)
Fair value of financial instruments
26,825 25,358
(v.a)
Deferred tax
117,775 107,137
(v.b)
Goodwill as a result of deferred tax
n/a n/a
Adjustments to (i) to (v) in respect of joint ventures 3,690 n/a
EPRA NAV 1,558,651 1,533,921
Diluted no. of shares outstanding 7,020,344 7,027,347
EPRA NAV per share 222.02 218.28
C Triple Net Asset Value (NNNAV) 2012 2011
EPRA NAV 1,558,651 1,533,921
(i)
Fair value of derivative financial instruments
–26,825 –25,358
(ii)
Fair value of financial liabilities
–122,350 –96,385
(iii)
Deferred tax
–117,775 –107,137
EPRA NNNAV 1,291,702 1,305,041
Diluted No. of shares outstanding 7,020,344 7,027,347
EPRA NNNAV per share 183.99 185.71
D EPRA Net Initial Yield 2012 2011
Investment properties – wholly owned 1,991,918 1,835,558
Investment properties – share of joint ventures/funds 37,915 20,087
Trading property 346,467 319,008
Less developments –593,904 –505,159
Completed property portfolio 1,782,396 1,669,494
Allowance for estimated purchasers' costs 0 0
Gross up completed property portfolio valuation 1,782,396 1,669,494
Annualised cash passing rental income 97,233 92,810
Direct cost of investment properties –11,220 –12,771
Annualised net rents 86,014 80,039
Add: additional notional rent expiration of rent free periods or other lease incentives 0 0
Topped-up net annualised rent 86,014 80,039
EPRA net initial yield 4.8 % 4.8 %
EPRA "topped-up" net initial yield 4.8 % 4.8 %
E EPRA Vacancy Rate 2012 2011
Estimated rental income potential from vacant space 3,388 2,768
Estimated rental income from overall portfolio 88,607 84,980
EPRA vacancy rate 3.8 % 3.3 %

4.1 BALANCE SHEET AS AT 31 DECEMBER

All amounts in TCHF 2012 2011
Assets
Current assets
Cash 12,229 155,612
Trade receivables – Group 10,398 2,153
Other receivables – Group 200 301
Other receivables – third parties 1,409 278
Accrued income and prepaid expenses – Group 13,892 12,560
Accrued income and prepaid expenses – third parties 61 25
Treasury shares 1,910 363
Total current assets 40,098 171,291
Non-current assets
Financial assets
– Participations 310,885 281,115
– Loan – Group 567,798 475,132
Total non-current assets 878,683 756,247
Total assets 918,781 927,538
All amounts in TCHF 2012 2011
Equity and liabilities
Liabilities
Current liabilities
Payables – Group 1,519 1,764
Payables – related parties 250 500
Payables – third parties 2,976 611
Accrued expenses and deferred income – third parties 2,266 2,263
Total current liabilities 7,011 5,138
Non-current liabilities
Convertible bond 168,655 175,000
Total non-current liabilities 168,655 175,000
Total liabilities 175,666 180,138
Equity
Share capital 180,058 178,933
Statutory reserves
– General reserves 42,144 37,268
– Capital contribution reserve 325,901 381,083
– Reserve for treasury shares 1,910 363
Retained earnings
– Balance brought forward 149,753 128,042
– Profit for the year 43,349 21,711
Total equity 743,115 747,400
Total equity and liabilities 918,781 927,538

2 PROPERT Y DETAILS 4ANN U AL FINANCIAL STATEMENTS OF MOBIMO H OLDING AG

4.2 INCOME STATEMENT

All amounts in TCHF 2012 2011
Income from cost charges – Group 1,951 2,134
Income from participations – Group 31,546 21,255
Financial income – Group 17,648 10,590
Financial income – third parties 85 1,017
Total income 51,229 34,996
Personnel expenses –1,620 –2,293
Administrative expenses – related parties –3 –93
Administrative expenses – third parties –1,407 –6,954
Interest expense for convertible bond –3,537 –3,719
Other financial expense – third parties –79 –65
Tax expense –1,234 –161
Total expenses –7,880 –13,285
Profit for the year 43,349 21,711

1. Equity

The Annual General Meeting that was held on 18 April 2012 approved a distribution from capital contribution reserves for the 2011 financial year of CHF 9.00 per share, which was paid on 25 April. The nominal value of Mobimo shares remains at CHF 29. The share capital rose by CHF 0.2 million (prior year: CHF 0.3 million) due to the exercise of options, while general reserves increased by CHF 1.5 million (prior year: CHF 2.0 million). The share capital also rose by CHF 0.9 million (prior year: CHF 0 million) due to the issue of shares created through the exercise of conversion rights in connection with the convertible bond, while capital contribution reserves increased by CHF 5.5 million (prior year: CHF 0 million) due to the premium relating to the exercise of conversion rights in connection with the convertible bond.

As at 31 December 2012, share capital amounted to CHF 180.1 million, composed of 6,208,913 registered shares with a nominal value of CHF 29 each. All outstanding shares are entitled to dividends and confer the right to one vote per share at the company's general meetings.

2. Participations

Share capital Equity interest
Name Registered office Purpose in TCHF in %
Mobimo AG Küsnacht Real estate company 72,000 100.0
Mobimo Management AG Küsnacht Real estate company 100 100.0
LO Holding Lausanne-Ouchy SA1 Lausanne Real estate group 12,000 100.02
JJM Participations SA Lausanne Holding company 6,001 100.0
Immobilien Invest Holding AG1 Glarus Real estate group 150 75.33

In August 2012, Mobimo Holding AG purchased 75.33% of the shares of Immobilien Invest Holding AG, Glarus.

3. Conditional capital

Conditional share capital of a maximum of CHF 34.3 million is available for up to 1,182,891 fully paid-up registered shares with a nominal value of CHF 29 each (with shareholders' pre-emptive rights excluded), of which

a) up to CHF 0.3 million is designated for the exercise of option rights granted to members of the Board of Directors, employees of Group companies and related parties.

b) up to CHF 0.9 million is designated for the exercise of subscription rights created after 5 May 2010 under an employee share option programme.

c) up to CHF 33.1 million is designated for the exercise of conversion and/or option rights relating to convertible bonds, bonds with warrants, similar bonds or other financial market instruments of the company or granted by Group companies.

8,315 option rights were exercised in 2012.

4. Authorised capital

As at 31 December 2012, authorised share capital was available, allowing the Board of Directors to increase the share capital of the company by a maximum of CHF 33.1 million by 6 April 2013 via the issue of up to 1,141,150 registered shares, to be fully paid up, with a nominal value of CHF 29 per share.

At CHF 33.1 million, conditional and authorised capital are linked together insofar that upon using this authorised capital, conditional capital will no longer be available in the same amount to the Board of Directors. The same applies in the reverse scenario; if this conditional capital is used, the same amount of the authorised capital is no longer available. The amount of the authorised capital share of CHF 33.1 million, the amount by which the Board of Directors is authorised to increase share capital by as at 31 December 2012, is thus reduced by the units of the convertible bond still outstanding totalling CHF 23.5 million (conditional capital).

5. Treasury shares

As at 31 December 2012, the company held 8,744 treasury shares. Over the course of the financial year, the initial holding as at 1 January of 1,747 shares was increased through the purchase of a total of 20,591 shares at an average price of CHF 218.76. 4,108 shares were sold in the course of the year at a price of CHF 219.58. 9,486 shares were granted to the Board of Directors and management as part of their remuneration arrangements.

1 Subholding; see Note 40 to the consolidated financial statements for an overview of all Group companies

2 64.3% of this holding is held directly, and 35.7% via JJM Participations SA

6. Significant shareholders

As at the reporting date, the following shareholders hold more than 3% of the shares and options in Mobimo Holding AG:

31 December 2012 2011
Pensionskasse des Kantons Zug 3.38% 3.40%
BlackRock, Inc. 3.07%

7. Additional information

In the year under review, the members of the Board of Directors, related parties and the Executive Board received remuneration as set out below (disclosure in accordance with Article 663bis of the Swiss Code of Obligations).

Profit-sharing
Social Payments for
Fees, security additional
Name, function salary Shares in cash in shares contributions services Total 2012 Total 2011
BoD 1,092 286 0 0 50 0 1,428 1,476
Urs Ledermann, Chairman BoD1 480 0 0 0 0 0 480 480
Brian Fischer, BoD2 273 101 0 0 9 0 137 129
Wilhelm Hansen, BoD 193 101 0 0 9 0 129 129
Peter Schaub, BoD 150 0 0 0 0 0 150 162
Paul Schnetzer, BoD4 n / a n / a n / a n / a n / a n / a n / a 48
Georges Theiler, BoD5 1703 0 0 0 11 0 181 175
Daniel Crausaz, BoD 363 84 0 0 9 0 129 129
Bernard Guillelmon, BoD 703 0 0 0 4 0 74 76
Paul Rambert, BoD 1403 0 0 0 8 0 148 148
Executive Board6 2,213 0 605 740 481 0 4,039 4,235
Christoph Caviezel, CEO 743 0 216 264 172 0 1,395 1,654

Amounts equal the expense recognised in the consolidated annual financial statements of the reporting year (accrual accounting), with the exception of sharebased remuneration, which is disclosed at taxable value. Share-based remuneration for the Executive Board was based on the assumption that a ratio of 55% as stipulated in the remuneration regulations applies.

¹ The fee is billed via Ledermann Immobilien AG and also covers administrative services rendered

² Changed from being a member of the Audit & Risk Committee to a member of the Real Estate Committee in August 2012

³ Each individual remuneration payment includes a reimbursement for expenses amounting to TCHF 8

⁴ Up to April 2011

⁵ Chairman of the Real Estate Committee from April 2011

⁶ Executive Board expanded to include the Head of Investments for Third Parties from November 2011

As at 31 December 2012, the shareholdings of the members of the Board of Directors and the Executive Board were as set out below (disclosure in accordance with Article 663c of the Swiss Code of Obligations).

No. of shares No. Of
Name, function issued approved options Total 2012 Total 2011
BoD 56,546 0 1,299 57,845 52,569
Urs Ledermann, Chairman BoD 34,650 0 89 34,739 31,060
Brian Fischer, BoD 1,340 0 201 1,541 1,071
Wilhelm Hansen, BoD 3,178 0 89 3,267 2,652
Peter Schaub, BoD 832 0 89 921 921
Georges Theiler, BoD 4,786 0 564 5,350 5,350
Daniel Crausaz, BoD 1,706 0 89 1,795 1,283
Bernard Guillelmon, BoD 5,622 0 89 5,711 5,711
Paul Rambert, BoD 4,432 0 89 4,521 4,521
Executive Board1 17,690 4,528 1,783 24,001 23,601
Christoph Caviezel, CEO 6,941 1,617 1,065 9,623 12,002
Manuel Itten, CFO 4,293 970 191 5,454 4,176
Peter Grossenbacher, Head of Portfolio Management 4,524 647 275 5,446 5,019
Andreas Hämmerli, Head of Development 1,932 647 252 2,831 2,404
Thomas Stauber, Head of Third-Party Investments 0 647 0 647 0

8. Convertible bond

A CHF 175 million convertible bond maturing on 30 June 2014 was issued on 30 June 2010. The coupon is 2.125%. For further information, see Note 12 to the Consolidated Financial Statements.

9. Risk assessment

The Board of Directors addresses its risk management responsibilities via the Audit & Risk Committee (AC). The main duty of this Committee is to support the Board of Directors by means of preparatory work, audits and clarification. The four areas in which the Audit & Risk Committee is active are:

  • Budgeting, preparation of financial statements, external audit and external appraisal
  • Risk management and internal control system (ICs), including compliance with legislation, directives and internal guidelines (compliance)
  • Financing
  • Taxes

In the period under review, the Audit & Risk Committee worked with management to prepare a risk inventory which sets out the fundamental risks involved by risk category. For each risk, the risk owner, impact and measures implemented are analysed and then evaluated on the basis of likelihood, financial impact and damage to reputation and image. Where necessary, further measures are defined for the ongoing management of the assessed risks.

10. Joint and several guarantees and undertakings

Mobimo Holding AG forms a VAT group together with Mobimo AG, Mobimo Management AG, O4Real AG, JJM Participations SA, LO Holding Lausanne-Ouchy SA and LO Immeubles SA. It is jointly and severally liable for the liabilities arising therefrom.

As part of an external financing arrangement with a bank, Mobimo Holding AG provided a joint and several guarantee of CHF 20 million for a Group company. As part of another external financing arrangement, Mobimo Holding AG gave an undertaking in a letter of comfort to ensure that Mobimo AG maintains minimum equity of CHF 100 million. Moreover, Mobimo Holding AG provides joint and several guarantees to Group companies in certain construction projects for payments to contractors arising from service contracts. In addition, Mobimo Holding AG agreed to provide funds for Mobimo AG to submit bids for properties.

¹ Executive Board expanded to include the Head of Investments for Third Parties from November 2011

4.4 PROPOSED APPROPRIATION OF PROFIT

in TCHF 2012 2011
Balance brought forward 149,753 128,042
Profit for the year 43,349 21,711
Reversal of capital contribution reserves 55,851 55,813
Total available to the General Meeting 248,953 205,566
The Board of Directors proposes the following appropriation of profit to the General Meeting:
Payment of a dividend in the form of a distribution of paid-in capital of 55,851 55,813
Brought forward to new account 193,102 149,753
Total appropriation of profit proposed 248,953 205,566
Total distribution 55,851 55,813
./. Less share from capital contribution reserves –55,851 –55,813

The Board of Directors will propose to the General Meeting to pay a dividend of CHF 9 per share from capital contribution reserves.

The final figure for the reversal/distribution of capital contribution reserves depends on the number of options exercised and the consequent number of shares with dividend entitlement issued by the date of the dividend payment. If not all exercisable options are exercised by this date, the reversal or distribution from capital contribution reserves will be correspondingly lower.

If convertible bonds are converted to shares before the date of the dividend payment, this may increase the number of shares eligible for a dividend and therefore the amount of the dividend payment too. This has not been taken into account in the proposed profit distribution.

The 8,744 treasury shares held on the reporting date are not eligible for the dividend payment. The number of shares eligible for a dividend on the date of the dividend payment may vary due to buybacks of further treasury shares.

As statutory auditor, we have audited the financial statements of Mobimo Holding AG, which comprise the balance sheet, income statement and notes (pages 116 to 122), for the year ended 31 December 2012.

Board of Directors' Responsibility

The Board of Directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and the company's articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity's preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements for the year ended 31 December 2012 comply with Swiss law and the company's articles of incorporation.

Report on Other Legal Requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (Article 728 Code Obligations (CO) and Article 11 AOA) and that there are no circumstances incompatible with our independence.

In accordance with Article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the Board of Directors.

We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company's articles of incorporation. We recommend that the financial statements submitted to you be approved.

KPMG AG

Reto Benz Reto Kaufmann Licensed Audit Expert Licensed Audit Expert Auditor in Charge

Root/ Lucerne, 11. February 2013

The Corporate Governance report is based on the structure of the SIX guideline concerning corporate governance information (RLCG). Cross-references are made to other sections of the Annual Report in order to avoid repetitions. The complete, current Articles of Association of Mobimo Holding AG are available online at www.mobimo.ch in the "Corporate Governance" section under "Investor Relations".

1 GROUP S TRU C TURE AND SHAREHOL DERS

1.1 Group structure

Mobimo Holding AG has the following legal structure and majority ownership interests:

¹ Subholding; see Note 40 to the consolidated annual financial statements for an overview of all Group companies ² 64.3% of this holding is held directly, and 35.7% via JJM Participations SA

The majority ownership interests in unlisted companies are shown below:

Share capital Ownership interest
Company Domicile in TCHF in %
Mobimo Management AG Küsnacht 100 100.00
Mobimo AG Küsnacht 72,000 100.00
LO Holding Lausanne-Ouchy SA Lausanne 12,000 100.00
LO Immeubles SA Lausanne 2,000 100.00
JJM Participations SA Lausanne 6,001 100.00
O4Real AG Lausanne 1,000 100.00
Immobilien Invest Holding AG Glarus 150 75.33
Petit Mont-Riond SA Lausanne 50 75.33

Mobimo AG and LO Immeubles SA are real estate companies that buy and sell real estate, construct new buildings, conduct or arrange renovations and assess all related activities on an independent basis. They define strategies with the assistance of Mobimo Management AG, appoint the architects, engineers and consultants, develop the basic concepts, oversee the construction sites and manage the services furnished by external providers.

In the year under review, Mobimo Holding AG acquired 75.33% of the shares of Immobilien Invest Holding AG, Glarus. Immobilien Invest Holding AG owns 100 % of the shares of Petit Mont-Riond SA, Lausanne.

O4Real AG and Petit Mont-Riond SA are real estate companies that each have a property in Lausanne.

Mobimo Management AG performs general services for the other Group companies.

JJM Participations SA is a pure investment company that holds shares in LO Holding Lausanne-Ouchy SA.

The Group's operational structure is divided into two divisions: Portfolio Management and Development (see also Note 1.5.3 to the consolidated annual financial statements as regards segment reporting).

Portfolio Management focuses on the long-term holding and management of the commercial and residential properties in Mobimo's own portfolio. Development is responsible for planning and realising commercial and residential properties for Mobimo's own portfolio or third parties. It also manages the first-time letting of completed commercial and residential properties and the sale of condominiums.

1.2 Significant shareholders

The following shareholders hold a significant proportion of the shares and options in Mobimo Holding AG as at 31 December 2012:

Pensionskasse des Kantons Zug 3.38%
BlackRock, Inc. 3.07%

The following reports based on Article 20 of the Swiss Federal Act on Stock Exchanges and Securities Trading (SESTA) were received during the year under review: – BlackRock, Inc. reported on 7 December 2012 that the group had exceeded the 3% threshold (3.07%), with a holding of 186,287 registered shares and 4,478

voting rights from CFDs (contracts for differences) or a total of 190,765 voting rights.

Of the total of 6,208,913 shares issued, 72% (4,461,272 shares) were also effectively recorded in the share register as at 31 December 2012. The proportion of shares pending registration of transfer is thus around 28%. Of the registered shares, around 84% are owned by Swiss investors, while some 74% of these are held by legal entities.

In terms of the overall registered equity holding, pension funds and foundations hold a share of approximately 36%.

1.3 Cross-shareholdings

There are no cross-shareholdings.

2 CAPI TAL S TRU C TURE

2.1 Capital

The following events had an impact on capital in 2012:

a)
b)
c)
Distribution of CHF 9.00 per share from capital contribution reserves
Capital increases via the exercise of outstanding option rights at a nominal value of CHF 29.00 per share as follows:
CHF 11,861 in March via the issue of 409 new shares
CHF 217,210 in April via the issue of 7,490 new shares
CHF 12,064 in June via the issue of 416 new shares
Capital increases via the exercise of conversion rights at a nominal value of CHF 29.00 per share as follows:
CHF 737,470 in April via the issue of 25,430 new shares
CHF 27,869 in May via the issue of 961 new shares
CHF 91,292 in June via the issue of 3,148 new shares
CHF 27,869 in July via the issue of 961 new shares
Total Number of Nominal value per
Capital as at 31 December 2012
(TCHF)
registered shares share (CHF)
Share capital
180,058
6,208,913 29.00
Authorised capital
max. 33,093
1,141,150 29.00

Conditional capital max. 34,304 1,182,891 29.00

Further information on changes in capital can be found in Note 19 to the consolidated annual financial statements.

2.2 Authorised and conditional capital

Authorised and conditional capital is defined in Articles 3a and 3b of the Articles of Association.

In the case of authorised capital, the Board of Directors is entitled, pursuant to Article 3a of the Articles of Association, to increase the share capital through the issue of up to a maximum of 1,141,150 fully paid-up registered shares within a period of no more than two years. Increases may take place all in one go or in stages. The issue price, type of contributions, conditions governing the exercise of subscription rights, allocation of the excluded subscription rights and timing of the dividend entitlement shall be determined by the Board of Directors. The Board of Directors decides on unexercised subscription rights in the best interests of the company. Once acquired, the new registered shares are subject to the restrictions on transfer set out in Article 6 of the Articles of Association. Shareholders' subscription rights are excluded; the shares issued can be used only as payment for the acquisition or financing of the acquisition of property or as payment for the takeover or financing of the takeover of companies, parts of companies or participations. If and to the extent that the Board of Directors, exercising its powers pursuant to Article 3b of the Articles of Association (see below), issues convertible bonds, warrant bonds or similar bonds, then the Board of Directors is no longer entitled, in the applicable amount, to create new share capital through the use of authorised capital (Article 3a para. 4 of the Articles of Association). At the current conversion price, a maximum of 810,880 registered shares will be created from conditional capital in connection with the convertible bond.

Pursuant to Article 3b of the Articles of Association, conditional capital may be increased through the issue of up to 1,182,891 fully paid-up registered shares, subject to the exclusion of subscription rights. Use thereof is restricted as follows: a) up to 9,711 fully paid-up registered shares can be issued through the exercise of option rights that have been granted to members of the company's Board of Directors, related parties and employees of Group companies; b) up to 32,446 fully paid-up registered shares can be issued through the exercise of option rights in connection with subscription rights for employees created after 5 May 2010; and c) up to 1,140,734 fully paid-up registered shares can be created through the exercise of conversion rights in connection with the convertible bond issued by the company (see Note 12). The acquisition of registered shares through the exercise of option rights and the subsequent transfer of these registered shares are subject to the restrictions on transfer set out in Article 6 of the Articles of Association. After the last registration of shares issued from conditional share capital in the Commercial Register on 25 April 2012, a further 416 registered shares were created through the exercise of option rights. As a result, as at the reporting date there remain 9,295 options to create registered shares from conditional capital in accordance with Article 3b (a) of the Articles of Association. The option plan effective up to 31 December 2009 is described in Note 35 to the consolidated annual financial statements.

2.3 Changes in capital

Total Number of Nominal value per
Change (TCHF) registered shares share (CHF)
Share capital as at 31. 12. 2008 204,230 4,345,323 47.00
Share capital as at 31. 12. 2009 192,035 5,053,552 38.00
Share capital as at 31. 12. 2010 148,804 5,131,170 29.00
Share capital as at 31. 12. 2011 178,933 6,170,098 29.00
Share capital as at 31. 12. 2012 180,058 6,208,913 29.00
Authorised capital as at 31. 12. 2008 16,920 360,000 47.00
Authorised capital as at 31. 12. 2009 18,687 491,771 38.00
Authorised capital as at 31. 12. 2010 34,800 1,200,000 29.00
Authorised capital as at 31. 12. 2011 33,978 1,171,650 29.00
Authorised capital as at 31. 12. 2012 33,093 1,141,150 29.00
Conditional capital as at 31. 12. 2008 6,498 138,252 47.00
Conditional capital as at 31. 12. 2009 5,254 138,252 38.00
Conditional capital as at 31. 12. 2010 36,558 1,260,634 29.00
Conditional capital as at 31. 12. 2011 36,252 1,250,056 29.00
Conditional capital as at 31. 12. 2012 34,304 1,182,891 29.00

Further information on changes in capital can be found in Note 19 to the consolidated annual financial statements.

2.4 Shares and participation certificates

Share capital stood at CHF 180,058,477 as at 31 December 2012 and comprised 6,208,913 fully paid-up registered shares with a nominal value of CHF 29.00, all of which are entitled to dividends and confer the right to vote. There are no preference shares or voting shares.

Mobimo Holding AG has not issued any participation certificates.

2.5 Dividend-right certificates

Mobimo Holding AG has not issued any dividendright certificates.

2.6 Restrictions on transferability and registration of nominees

Article 6 of the Articles of Association defines the restrictions on transferability. The Board of Directors may deny authorisation to transfer shares for the following reasons:

    1. Insofar as recognising a transferee as a full shareholder may – according to the information available to it – hinder the company from providing proof of Swiss control as stipulated by federal laws; specifically, in accordance with the Swiss federal law pertaining to the purchase of property by persons resident abroad (BewG) of 16 December 1983, including the amendments of 30 April 1997, and the Federal Council decision on measures against improper use of federal double taxation agreements of 14 December 1962.
    1. If, despite requests from the company, the transferee fails to expressly declare that they have acquired and intend to hold the shares in their own name and for their own account.
    1. If following the acquisition of the shares the number of shares held by the transferee exceeds 5% of the total number of shares recorded in the Commercial Register. Legal entities and partnerships vested with legal capacity which are grouped together in terms of capital or voting rights, by joint management or in a similar way, as well as natural persons or legal entities and partnerships which act together in a coordinated manner with a view to circumventing the restrictions on registration, shall be deemed as one transferee for the purposes of these conditions.
    1. As soon as and insofar as the acquisition of shares takes the total number of shares held by persons abroad as defined by the Swiss federal law pertaining to the purchase of property by persons resident abroad to over one-third of the shares

recorded in the Commercial Register. This restriction shall apply subject to Article 653c para. 3 of the Swiss Code of Obligations, including in the case of registered shares acquired through the exercise of subscription, option or conversion rights.

In order to ensure compliance with the thresholds indicated, prior to being entered in the share register new shareholders are scrutinised as regards their status as "Swiss citizens" pursuant to the Swiss federal law pertaining to the purchase of property by persons resident abroad. If they cannot be verified as "Swiss citizens", then provided all other conditions are met they are entered in the category of restricted persons without voting rights, as long as the threshold of one-third of all shareholders is not exceeded and provided there is no other risk, such as tighter practices on the part of the licensing authority, that the entry of the non-Swiss shareholder will result in the company no longer being able to furnish evidence of Swiss control.

As at 31 December 2012, 11.3% of the shares were held by shareholders with voting rights who are classified in the share register as "Non-Swiss" according to the above definition. The Articles of Association do not contain any provisions pertaining to the registration of nominees. The Board of Directors has laid down the following principles in the regulations governing the administration of the share register and the recognition and registration of shareholders of Mobimo AG: Nominees are registered subject to the following conditions: a) without disclosure of the name, head office/address and shareholding of those shareholders for whose account the nominee holds the shares, the nominee shall be entered in the share register as a shareholder with voting rights up to a maximum recognition threshold of 2% of the registered shares entered in the Commercial Register; b) without disclosure of the name, head office/address and shareholding, the relevant nominee may have no more than than 0.25% of the share capital that is entered in the Commercial Register entered in the share register as shares with voting rights for one and the same purchaser; and c) the nominee must conclude an agreement with the company that precisely defines the applicable rights and obligations. Nominee registrations may not in total exceed 10% of the shares entered in the Commercial Register. Once this 10% threshold is reached, the company may not register any further nominees. As at the reporting date nominee registrations accounted for 5.8% of registered shares. The restrictions mentioned above also apply (5% clause and maximum proportion of non-Swiss shares without voting right restrictions). No registrations were rejected during the year under review. The Articles of Association do not contain any provisions pertaining to the revocation of statutory privileges (and none have been granted) or the revocation of restrictions on transferability. As a result, the provisions of the Swiss Code of Obligations apply.

2.7 Convertible bond and options

Convertible bond

The company issued a convertible bond with the following key features on 30 June 2010:

Volume: CHF 175 million

Coupon: 2.125% p.a., payable annually on 30 June, with the first payment due on 30 June 2011

Term: four years (30 June 2010–30 June 2014) Conversion price: CHF 207.99 (the conversion price was adjusted after the 2011 capital increase; the conversion price before the capital increase was CHF 210.37)

The convertible bonds are traded on the SIX Swiss Exchange in Zurich in accordance with the standard for Bonds (security symbol: M0B10 / Swiss security number: 11299133 / ISIN code: CH0112991333, Bloomberg: MOBIMO Corp.). Each convertible bond has a nominal value of CHF 5,000 and can be converted into registered shares up to seven trading days before the end of the term at the conversion price of CHF 207.99 per registered share (subject to any amendments in accordance with the published conditions, particularly with respect to the prevention of dilution). As at the reporting date, a maximum of 841,880 registered shares may be issued at this conversion price. The company has created conditional capital for the creation of the registered shares.

The prospective exercise of conversion rights would dilute earnings per share. The convertible bond can be redeemed early at any time if more than 85% of the original bond volume is converted and/or redeemed or, from 21 July 2013, if the closing price of Mobimo Holding AG registered shares on the SIX Swiss Exchange (SIX) is 130% or more of the conversion price over a period of 20 consecutive trading days (see Note 12).

Options

In terms of options on Mobimo shares, as at 31 December 2012 only the 9,295 options assigned to members of the Board of Directors, related parties and the Executive Board of Mobimo Holding AG are outstanding. These options can be used to subscribe to the same number of fully paid-up registered shares. The details of this option are described in Note 37 to the consolidated annual financial statements.

3 BOARD OF DIREC TORS

3.1 Members of the Board of Directors

Urs Ledermann, Chairman, also member of the Real Estate Committee and Remuneration Committee Entrepreneur, Swiss, resides in Zollikon ZH

Urs Ledermann was born in Brugg on 14 July 1955. After completing a commercial apprenticeship at an import/export company in 1974, he held various positions in the steel, packaging and food industries. In 1977, he founded his own firm, Ledermann AG, an HR consultancy, in Zurich. In 1990, the firm was organised as a holding company and management was divided between three partners. Urs Ledermann sold his main office in Zurich in 1992 to devote his time to the five family-run offices in Geneva, Berne, St. Gallen, Lugano and Lucerne.

This was followed in 1993 by the founding of Urs Ledermann & Partner AG, a management and HR consultancy in Zurich. In 2002, Urs Ledermann sold this company to a partner; he has since concentrated on complex mandates in the real estate and banking sectors.

Today, his chief professional focus is on Ledermann AG Beteiligungen & Immobilien in Zurich, which was founded in 1983 and has now been merged into Ledermann Immobilien AG. A further focus is the family-owned Cleaning Store Company AG, Zurich (a leading textile cleaning group founded in 1957), together with research, analysis, planning, buying, selling and management for his own portfolio of apartment buildings and commercial properties in the Zurich region.

Urs Ledermann holds various directorships both within and outside his own group of companies. In particular, he serves on the Boards of Directors of SADA AG, Zurich, SCM Strategic Capital Management AG and Domicilium Verwaltung AG, and is a member of the real estate committee of Gaydoul Group. He is also employed as a real estate consultant by a number of pension funds.

Mr Ledermann has been a member of the Board of Directors of Mobimo Holding AG since 2003 and its Chairman since 2008. He has also been Chairman of the Boards of Directors of LO Holding Lausanne-Ouchy SA and LO Immeubles SA since 17 December 2009 and Chairman of the Board of Directors of O4Real SA since 4 May 2010. He is also a member of the Boards of Directors of Mobimo AG and Mobimo Management AG.

Georges Theiler, Vice Chairman, also Chairman of the Real Estate Committee and Remuneration Committee

Certified Operating Engineer, Federal Institute of Technology, Entrepreneur, Swiss, resides in Lucerne

Georges Theiler was born in Lucerne on 20 May 1949. He graduated from high school in Lucerne and studied at the Swiss Federal Institute of Technology Zurich until 1976. After two years as a consultant in the field of hospital planning, he served as Chairman of the Executive Board and member of the Board of Directors of construction company and general contractor Theiler + Kalbermatter T+K Bau AG in Lucerne, with 250 employees. This company, active in the building construction, tunnel construction, general contracting, real estate development and real estate management sectors, was sold to Batigroup AG in 1997.

Since 1997, Georges Theiler has owned GT-Consulting, which specialises in consulting and directorship mandates. Since 1995, he has represented the FDP Party in the National Council. He was elected to the Swiss Council of States as a representative of the canton of Lucerne in 2011. He has been a member of the Board of Directors of Mobimo Holding AG since 2000.

Daniel Crausaz also member of the Audit & Risk Committee and Remuneration Committee

Engineer, Master of Business Administration, Swiss, resides in St-Sulpice

Daniel Crausaz was born in Aarau on 28 May 1957. He studied engineering at the Swiss Federal Institute of Technology Lausanne and completed an MBA programme at the Faculty of Business and Economics at the University of Lausanne. He worked as an engineer for Felix Constructions SA in Bussigny from 1983 to 1985 and then for Bonnard & Gardel Ingenieurs Conseils Lausanne SA until 1989. He joined Banque Cantonale Vaudoise in 1990 and was appointed Managing Director in 1997. From 2003, Daniel Crausaz worked as an independent consultant on a number of mandates in French-speaking Switzerland. Since 2008 he has been Deputy Director of Agrifert AG, an international commodities trading firm. He is also a member of the Boards of Directors of Cadar SA, Zimal SA, Cormela SA, C.I.E.L. société coopérative and EP Electricité SA.

He has been a member of the Board of Directors of LO Holding Lausanne-Ouchy SA since 1999 and a member of the Board of Directors of Mobimo Holding AG since 17 December 2009.

Brian Fischer,

also member of the Real Estate Committee

Attorney-at-Law and Swiss-certified tax expert, Swiss, resides in Langnau am Albis ZH

Brian Fischer was born in Melbourne, Australia, on 27 January 1971. After graduating from high school in Davos in 1990, he went on to study at the University of Berne until 1996. From 1997 until the end of 2000 he was employed as a tax and legal advisor at PricewaterhouseCoopers AG.

Since 2001 he has been Head of External Asset Managers within Bank Vontobel AG's Investment Banking unit. He has been a member of the Board of Directors since 2008 and sits on the Board of Directors of Mobimo Holding AG in an independent capacity. In 2012 Brian Fischer switched from the Audit & Risk Committee to the Real Estate Committee within the Board of Directors of Mobimo Holding AG.

Bernard Guillelmon

Engineer, Masters in Energy, Master of Business Administration, dual nationality (Swiss and French), resides in Berne

Bernard Guillelmon was born in Zurich on 5 November 1966. After high school, he studied engineering at the Swiss Federal Institute of Technology Lausanne, specialising in microtechnology, and went on to complete a Masters in energy. He also completed the MBA programme at INSEAD in Fontainebleau with distinction. From 1990 to 1998 Bernard Guillelmon worked as an engineer and department head for BKW AG, heading up a range of complex reorganisation projects.

Following a short period as an independent consultant, he was appointed Head of Energy at Swiss Federal Railways at the beginning of 2001. He held further key positions at Swiss Federal Railways, with his last positions being Deputy Head of Infrastructure and Head of Business Management. He has been CEO of BLS AG since 1 July 2008. Since 2005 he has been a member of the Board of Directors of LO Holding Lausanne-Ouchy SA.. Bernard Guillelmon is a member of the Board of Directors of JJM Holding in Lausanne and has been a member of the Board of Directors of Mobimo Holding AG since 17 December 2009.

Wilhelm Hansen,

also member of the Audit & Risk Committee and Remuneration Committee

lic. rer. pol., management consultant, Swiss, resides in Basel

Wilhelm Hansen was born in Mönchengladbach, Germany, on 30 August 1953. After high school, he studied economics at the University of St. Gallen HSG and the University of Basel, where he was awarded the degree rer. pol.

After 25 years working in the capital investments field (as an investment advisor at the former Union Bank of Switzerland, head of the securities division at Basler Versicherungen and co-owner of the private bank Baumann & Cie), in 2002 he specialised as an independent management consultant in the areas of organisational and strategic development and corporate governance. He also holds a number of directorships, including as a member of the Governing Board of Basellandschaftliche Kantonalbank, Vice Chairman of the Board of Directors of Scobag Privatbank AG and a member of the Boards of Directors of Tareno AG and Tarimo AG. He has been a member of the Board of Directors of Mobimo Holding AG since 2008.

Paul Rambert,

also member of the Real Estate Committee

Certified Architect, Federal Institute of Technology, Swiss, resides in Lausanne

Paul Rambert was born in Zurich on 5 January 1945. He studied architecture at the Swiss Federal Institute of Technology Zurich, spent an additional year studying at Harvard University and held a number of key positions at suter + suter in Basel over many years. He was a member of the Executive Board of Zschokke AG from 1993 to 1997, and headed up LO Holding Lausanne-Ouchy SA in Lausanne between 1998 and 2009. He works as a real estate consultant in his company Immopoly Sàrl in Lausanne.

He also holds various directorships, including as Chairman of the Boards of Directors of Parking du Centre SA and Flonplex SA Lausanne and as a member of the Boards of Directors of LO Holding Lausanne-Ouchy SA, Securitas AG, Berne and Solvalor Fund Management SA, Lausanne. He also sits on the Foundation Board of the Fondation Métropol, Lausanne, and has been a member of the Board of Directors of Mobimo Holding AG since 17 December 2009.

Peter Schaub, also Chairman of the Audit & Risk Committee Attorney-at-Law, Swiss,

resides in Uster ZH

Peter Schaub was born in Zurich on 4 December 1960. After graduating from high school in Zurich, he studied law at the University of Zurich, receiving his Masters degree in 1987. In 1987/88, he was employed as a legal advisor at the Schellenberg Wittmer law firm in Zurich, and in 1990 he obtained his licence to practice law in the canton of Zurich. Between 1990 and 1993 he worked as a tax commissioner for the canton of Zurich, and since 1994 he has been a partner in the tax and law firm Weber Schaub & Partner in Zurich.

He also holds various directorships, including as Chairman of the Board of Directors of CPH Chemie + Papier Holding AG, Perlen, Vice Chairman of the Board of Directors of UBV Uetikon Betriebs- und Verwaltungs AG, Uetikon am See, and member of the Board of Directors of Rüegg Cheminée Holding AG, Zumikon. He has been a member of the Board of Directors of Mobimo Holding AG since 2008.

Dr.Alfred Meili is the Honorary Chairman of Mobimo Holding AG. He was the driving force behind the creation of the Mobimo Group and was Chairman of the Board of Directors until 2008.

Laurent Rivier is the Honorary Chairman of LO Holding Lausanne-Ouchy SA, where he was Chairman of the Board of Directors from 2000 to 2009.

Alfred Meili and Laurent Rivier were both appointed Honorary Chairmen in recognition of their services to their respective companies. This office confers neither the right to sit on the Board of Directors, nor any other rights and obligations of a member of the Board of Directors, nor any entitlement to directors' compensation or other remuneration.

3.2 Other activities and interests

Mobimo Holding AG has concluded special agreements with all members of the Board of Directors and Executive Board in order to avoid conflicts of interest. In these agreements, the members of the Board of Directors and Executive Board undertake, inter alia:

  • Not to take up any directorship mandates with other real estate companies without the approval of the Board of Directors of Mobimo Holding AG
  • To keep the company informed about any offers to acquire land and property and grant the company a priority claim, provided such offers are not confidential
  • Not to accept any additional remuneration such as arrangement commissions

Urs Ledermann owns his own real estate portfolio focused primarily on the City of Zurich, both privately and through his company Ledermann Immobilien AG. Appropriate organisational and contractual arrangements are in place to avoid any conflicts of interest.

Georges Theiler is a member of the Board of Directors of Schindler Aufzüge (Schweiz) AG and works for Implenia AG in an advisory capacity.

Wilhelm Hansen is a member of the Governing Board of Basellandschaftliche Kantonalbank and holds 20% of the shares in Tarimo AG, Basel. These companies own and finance properties. He is also a member of the Board of Directors of Kantonspital Baselland, Psychiatrie Baselland and SUGRO Holding AG, Reinach.

Peter Schaub is Chairman of the Board of Directors of CPH Chemie + Papier Holding AG and Vice Chairman of the Board of Directors of UBV Uetikon Betriebs- und Verwaltungs AG. Both these companies own operating and development properties and investment properties.

Daniel Crausaz is a member of the Board of Directors of Cadar SA and Zimal SA.

Bernard Guillelmon is Chairman of the Board of Directors of BLS Cargo AG and a member of the Board of Directors of RAlpin AG. He is also a member of the Management Board and Committee of the Swiss Public Transport Union (Verband öffentlicher Verkehr, VöV) in Berne.

Paul Rambert works as a real estate consultant in his company Immopoly Sàrl in Lausanne.

Besides those listed above, the members of the Board of Directors of Mobimo Holding AG do not occupy any further positions in the management and supervisory bodies of major Swiss and foreign entities or in institutions and foundations under public or private law, and also do not carry out any further long-term management or advisory functions for key Swiss or foreign interest groups.

3.3 Cross-involvements

There is no mutual participation on the Boards of Directors of listed companies.

3.4 Election and term of office

The Board of Directors of Mobimo Holding AG consists of at least three members and is elected for a period of one year at the General Meeting. In the year under review, the Board of Directors had eight members. The aim is to reduce the number of members to six over the next few years. The term of office of the members of the Board of Directors ends on the day the corresponding General Meeting is held. They may be immediately reelected upon expiry of their term of office.

3.5 Internal organisation

The Board of Directors constitutes itself and has nominated Urs Ledermann as its Chairman and Georges Theiler as its Vice Chairman.

The Board of Directors is quorate if the majority of its members are present and passes resolutions by a majority of the votes cast.

A total of five ordinary meetings and two teleconference meetings were held in 2012. The meetings generally lasted one day. The Board of Directors was present in full at every meeting apart from two.

The CEO, CFO and the other members of the Executive Board occasionally take part in the meetings of the Board of Directors, although the Board of Directors always meets first without these persons present. The Chairman decides whether employees or other external advisors are to be included in the meeting in order to deal with specific issues.

An external assessment of the Board of Directors' activities is planned for 2013 in line with good governance practices.

The Board of Directors has three committees: the Real Estate Committee, the Audit & Risk Committee and the Remuneration Committee. The purpose, tasks, duties and competences of the committees are set out in a supplement to the organisation regulations. The Audit & Risk Committee met four times in 2012. The Real Estate Committee met seven times, and the Remuneration Committee three times.

The Board of Directors established the Real Estate Committee to ensure that the strategic investment and divestment targets it sets each year are implemented successfully. The competences of the Board of Directors, Real Estate Committee and Executive Board with respect to purchases and sales are laid down in the organisation regulations of Mobimo Holding AG and summarised below. The Real Estate Committee aims to provide the Board of Directors with as broad-based real estate expertise as possible by

  • Conducting ongoing market observations
  • Developing the network for investors, etc.
  • Cooperating closely with management
  • Providing regular information to the Board of Directors

The Real Estate Committee fulfils three functions, namely

  • Deciding on property purchases and divestments for property transactions between CHF 10 million and CHF 30 million
  • Submitting requests to the Board of Directors for property transactions which have a volume of over CHF 30 million and therefore lie within its competence
  • Supervising investment and development business as well as the external property appraisals to be carried out periodically

The obligations and competences assigned to the Board of Directors in accordance with the organisation regulations and the law remain with the Board of Directors as the overriding body.

The Audit & Risk Committee fulfils a supervisory function. It may request any measures it deems necessary in order to perform its duties and has direct access to all documentation, employees and the auditors. The main duty of the Audit & Risk Committee is to support the Board of Directors by means of preparatory work, audits and clarification. The four areas where the Audit & Risk Committee is active are as follows:

  • Budgeting, preparation of financial statements, external audit and external appraisal
  • Risk management and internal control system (ICS), including adherence to legislation, directives and internal guidelines (compliance)
  • Financing
  • Taxes

The Remuneration Committee oversees all matters relating to remuneration policy and the remuneration system. This involves preparing the remuneration report to shareholders and drawing up budgets for the remuneration of all staff and the individual remuneration paid to members of the Board of Directors and Executive Board.

The Remuneration Committee does not have the power to make decisions, but carries out reviews, reports the results of these reviews to the Board of Directors and submits requests to the full Board of Directors for consideration.

3.6 Approval authority regulations

The principles of top-tier management, including the allocation of authority, are defined in the company's organisation regulations. The Board of Directors is responsible for managing the company and supervising the Executive Board. It represents the company to the outside world and takes decisions on all matters that do not fall under the remit of another body within the company by law or pursuant to the Articles of Association or other regulations. In addition to its non-transferable duties in accordance with Article 716a of the Swiss Code of Obligations, the Board of Directors also has the following duties and competences:

  • a) Defining the Group policy and business policy of the Group companies (such as defining the guidelines governing the strategic focus of the Group and of the Group companies/portfolio approach)
  • b) Defining and monitoring the financial and investment budgets of the Group companies
  • c) Making fundamental decisions concerning the appointment and dismissal of members of the Board of Directors, Group company auditors and valuation experts
  • d) Passing resolutions on the foundation, acquisition and disposal of Group and affiliated companies
  • e) Initiating business relations between the Mobimo Group and important third parties
  • f) Overseeing the measures that need to be implemented with regard to stock exchange listings
  • g) Defining the corporate identity
  • h) Defining the accounting principles, including the consolidation of all financial statements
  • i) Approving participation and option plans

The Executive Board manages the Group companies as BoD and/or Executive Board members in line with the approval authority regulations and local organisation regulations.

The Board of Directors of Mobimo Holding AG makes decisions on all property transactions exceeding CHF 30 million; transactions of between CHF 10 million and 30 million fall under the remit of the Real Estate Committee. Operating decisions pertaining to property transactions up to an investment volume of CHF 10 million are delegated to the Executive Board.

3.7 Information and control instruments with regard to the Executive Board

The Chairman of the Board of Directors holds coordination and information meetings with the CEO every two weeks. The Real Estate Committee met seven times during the financial year. The Chairman of the Real Estate Committee may convene additional meetings at any time. The CEO normally takes part in the meetings. Minutes must be taken at every meeting and subsequently distributed to all members of the Board of Directors. The Board of Directors is also kept up-to-date with the latest business developments by means of monthly reports.

The Remuneration Committee met three times in 2012.

The Audit & Risk Committee met four times in the past financial year. Topics discussed at Audit & Risk Committee meetings include the annual and semi-annual results, the reports of the statutory auditors and external appraisers, important technical accounting, legal, tax and regulatory issues, other necessary reports and risk management/ICS.

The Board of Directors addresses its risk management responsibilities via the Audit & Risk Committee. The main duty of this Committee is to support the Board of Directors by means of preparatory work, audits and clarification. The Audit & Risk Committee liaises with management to prepare an annual risk inventory setting out significant risks by risk category. For each risk, the risk owner, impact and measures implemented are analysed and then evaluated on the basis of likelihood, financial impact and damage to reputation and image. Where necessary, further measures are defined for the ongoing management of the assessed risks.

The Chairman of the Audit & Risk Committee may convene additional meetings at any time. If necessary, the Audit & Risk Committee may invite members of the Executive Board, other employees, external advisors or auditors to its meetings, or request that they meet with members of or advisors to the Audit & Risk Committee. The CFO normally takes part in the meetings. Minutes must be taken at every meeting and subsequently distributed to all members of the Board of Directors.

The entire Board of Directors receives a quarterly management report informing them about the following areas: financial situation/budget achievement, risk situation, progress and planned activities of the operating and administrative areas, and personnel situation. The information relates to developments and events since the last management report, together with expected developments and planned activities. The Executive Board is present during the meetings of the Board of Directors and reports on items on the agenda and/or is available for general questions and information.

A formal internal audit is not appropriate due to the size of the company. Internal control and risk management is performed by Controlling.

The implementation of regulatory and accounting changes is worked out at an early stage in cooperation with the statutory auditors. The statutory auditors and property appraisers are also consulted on a regular basis to help assess larger-scale transactions.

4 EXECUT IVE BOARD

4.1 Members of the Executive Board

Dr. Christoph Caviezel

CEO, Dr. iur., Attorney-at-Law, Swiss, resides in Horgen

Christoph Caviezel, from Laax, canton of Grisons, was born on 19 August 1957. After completing high school in Chur, he went on to obtain a degree in law from the University of Fribourg in 1980.

He was admitted to the bar in the canton of Grisons and obtained his Doctorate (Dr. iur.) in 1988. After a number of years as a practising attorney-at-law, he was appointed Head of Real Estate at Swiss Federal Railways in Lucerne in 1986. In 1995 he joined the listed company Intershop Holding AG. He was appointed to the Board of Management in 1999 with responsibility for real estate in Switzerland. He was appointed CEO of Intershop in 2001 and also became a member of the Board of Directors in 2003. Christoph Caviezel has been CEO of the Mobimo Group since 1 October 2008 and directly manages the Purchase and Divestment division. He sits on the Investment Committee of the Investment Foundation for Overseas Real Estate (Anlagestiftung für Immobilienanlagen im Ausland, AFIAA) in Zurich. He has also been Chairman of the Boards of Directors of Mobimo AG and Mobimo Management AG since 25 March 2009. Since 17 December 2009 he has been a member of the Boards of Directors of LO Holding Lausanne-Ouchy SA and LO Immeubles SA, and Chairman of the Board of Directors of JJM Participations SA. He has also been a member of the Board of Directors of O4Real SA since 4 May 2010 and Chairman of the Boards of Directors of Immobilien Invest Holding AG and Petit Mont-Riond SA since 24 August 2012 and 29 August 2012 respectively.

Manuel Itten

CFO, Business Administration FH, Swiss, resides in Zurich

Manuel Itten was born in Zurich on 3 October 1965. Following basic commercial and design studies and after gaining several years of professional experience, he obtained a business administration degree (Business Economist HWV) from a university of applied science (Fachhochschule). After working in the audit and consulting fields, he spent several years as Head of Controlling at Livit AG.

Manuel Itten joined Mobimo in 2004, working as Head of Controlling until February 2009. He has been a member of the Boards of Directors of Mobimo AG and Mobimo Management AG since 25 March 2009. In addition, he has been a member of the Boards of Directors of LO Holding Lausanne-Ouchy SA, LO Immeubles SA and JJM Participations SA since 17 December 2009 and of O4Real SA since 4 May 2010. He has also been a member of the Board of Directors of Parking du Centre SA since 2 March 2010 and of Flonplex SA since 17 March 2010.

Peter Grossenbacher

Head of Portfolio Management, Master of Advanced Studies in Real Estate Management from the Zurich Fachhochschule and Certified Real Estate Trustee (dipl. Immobilientreuhänder), Swiss, resides in Weisslingen ZH

Peter Grossenbacher was born in Schaffhausen on 10 November 1969. After completing his basic construction training and obtaining his site supervisor diploma, he held a number of senior positions in the construction and real estate sector.

He has been with Mobimo since 2002. He spent five years in charge of the Project Management division, with primary responsibility for the development and construction of premium and ecologically sound condominium properties in good locations. He has been Head of Portfolio Management since July 2008.

Andreas Hämmerli

Head of Development, Certified Architect HTL, Swiss, resides in Scheuren BE

Andreas Hämmerli was born in Brüttelen in the canton of Berne on 22 June 1957. After training as a Certified Architect HTL he spent 12 years in a number of positions within the field of architecture (development/project management/marketing/head of an architectural practice). He was Head of Real Estate Trading at Göhner Merkur AG, where he was responsible for real estate divestment and the management and restructuring of part of the general contractor. At Livit AG he was a member of the Management Board and headed the Real Estate Consulting Switzerland division (development/real estate trading/real estate trusts and first-time letting).

Prior to joining Mobimo he was involved in the development, implementation and management of the D4 Business Center Lucerne in Root, an initiative of Suva Asset Management.

He has been Head of Development since 1 October 2008, with responsibility for all aspects of real estate development, construction and sales.

Thomas Stauber

Head of Investments for Third Parties, Certified Civil Engineer, Federal Institute of Technology/Swiss society of Engineers and Architects, Swiss, resides in Meilen ZH

Thomas Stauber was born in Zurich on 30 October 1964. After graduating from high school in Zurich, he obtained a degree in civil engineering from the Swiss Federal Institute of Technology Zurich (ETH Zurich) in 1989. He subsequently completed postgraduate studies in industrial management and manufacturing at the BWI Center for Industrial Management at ETH Zurich, and attended the SKU Advanced Management Program in 2002.

After working for a number of years as a project managing civil engineer, Thomas Stauber spent five years at Sony Berlin GmbH, where he took on project owner responsibility for the technical planning and realisation of the Sony Center in Berlin's Potsdamer Platz.

He returned to Switzerland in 2000 as Head of Project Development and member of the Executive Board at the general planning firm tk3 AG. TThereafter he took on various development and management tasks as Managing Director of the general contractor Bauengineering AG Zurich.

In 2004 he joined the listed company Allreal Generalunternehmung AG, where he was latterly a member of the Executive Board with responsibility for acquisition and project development.

He has been head of the newly created Investments for Third Parties business area since 1 November 2011, where he is responsible for the development, realisation and sale of investment properties to third-party investors. This business area is part of the Development division.

4.2 Other activities and interests

The members of the Executive Board perform no long-term management or advisory functions for key Swiss or foreign interest groups, nor do they perform any official functions or hold any political offices.

4.3 Management agreements

There are no management agreements with third parties. There are service agreements between the Group companies and Mobimo Management AG.

5 REMUNERAT ION AND PROFI T-SHARING

The remuneration report sets out the mechanisms used to determine remuneration and profit-sharing plans. It also provides information on the remuneration of the Board of Directors and Executive Board for 2012, which is also set out in the consolidated annual financial statements (Note 35 and Note 39) and the annual financial statements of Mobimo Holding AG (Note 7).

5.1 Content of and procedure for determining remuneration and profit-sharing plans

In line with Article 20 of the Articles of Association, the members of the Board of Directors are entitled to receive remuneration commensurate with their activities. This remuneration is set by the Board of Directors itself. Since 2009, the remuneration received by members of the Board of Directors consists solely of a fixed amount structured on a modular basis depending on the specific activities of each member. It is made up of basic remuneration of CHF 70,000 per year plus fixed supplements for involvement in a Board Committee (CHF 70,000 for the Real Estate Committee and CHF 50,000 for the Audit & Risk Committee) and fixed supplements for the Chairman of the Board of Directors (CHF 340,000) and the Chairmen of the Board Committees (CHF 30,000 each). This ensures that the remuneration paid to the Board of Directors is in line with the time required for their activities and the level of responsibility involved. The new remuneration structure was introduced by the Board of Directors in the form of remuneration regulations established for an indefinite period. The Board of Directors made no changes to the regulations in 2012. From 2013 the members of the Remuneration Committee will receive fixed remuneration of CHF 10,000 per year, while the Chairman of the Remuneration Committee will receive fixed remuneration of CHF 15,000 per year. The members of the Board of Directors also have an interest in the longterm success of the company, as all or part of their remuneration may take the form of shares in Mobimo Holding AG. The proportion of the total remuneration that may take the form of shares is set by the Board of Directors on an annual basis.

Shares are valued at the average price over a period of 20 days preceding the reference date, less the tax discount calculated due to the effective vesting period. All shares issued are subject to a defined vesting period, generally five years. The Board of Directors sets the vesting period and the reference date for the shares on an annual basis (see Note 39 to the consolidated annual financial statements and Note 7 to the annual financial statements of Mobimo Holding AG). A total of 1,742 shares were granted to the Board of Directors in the 2012 financial year as part of their fixed remuneration. The applicable tax discount to the average price over 20 days for the 2012 calculation was 25.274%.

Executive Board remuneration is broken down into a fixed element and a variable performance-related element based on the company's consolidated profit for the year after deduction of a hurdle (see below).

Remuneration is geared to the actual area of responsibility, the professional requirements and expertise of each member of the Executive Board and the amount of work involved. It is set by the entire Board of Directors in line with market conditions, with particular focus on salary levels in the real estate market. These competitive remuneration systems should enable Mobimo to recruit the senior managers it wants from the relatively small pool of suitable executives and tie them to the company for the long term. The company did not employ any external remuneration consultants in the year under review.

The variable remuneration element forms part of a company rule whereby 7% of the proportion of consolidated profit for the year that exceeds a minimum return on equity of 5% (hurdle) is allocated to the Executive Board.

The maximum variable remuneration element for each individual member of the Executive Board is limited to 150% of their fixed gross annual salary.

Executive Board members must draw at least 50% of the variable performance-related remuneration element in the form of shares in Mobimo Holding AG. The corresponding shares are generally subject to a vesting period of five years that remains in effect even after the employment relationship is terminated. This should ensure that at Executive Board level too the sustainable, long-term success of the company becomes established as a key criterion for Executive Board remuneration. The Board of Directors sets the reference date for the shares on an annual basis. The fair value of shares is calculated as the volume-weighted average price of the last 20 trading days before the reference date. The shares issued are all entitled to dividends. The number of shares assigned is calculated on the basis of the taxable value (fair value of the share less the tax discount due to the effective vesting period for the shares) of the share (performance-related remuneration to be drawn in the form of shares in CHF divided by the taxable value of the shares in CHF = number of shares).

These regulations for the variable remuneration payable to members of the Executive Board were valid up to and including the 2012 financial year and replaced the previous profit-sharing regulations. In view of the expansion of the Executive Board, the Board of Directors amended the remuneration regulations and set or extended the validity of the amended regulations for the 2012 financial year up to and including the 2015 financial year. The Board of Directors reserves the right to amend the regulations during their period of validity should the shareholders not approve the remuneration report. As of the General Meeting 2012, the Board of Directors will hold a consultative vote on the remuneration report every year.

The following amendments were made to the remuneration regulations:

Individual achievement of objectives is taken into account when determining the variable remuneration of Executive Board members (excluding the CEO). The company is entitled to repayment of all variable remuneration paid out on the basis of annual financial statements that do not reflect the company's actual results due to criminal activities or other forms of manipulation. The amount of the repayment entitlement corresponds to the extent of the falsification. Despite the increase in the number of Executive Board members, the overall profit-sharing entitlement of the Executive Board was kept at 7%. To offset the resulting reduction in the share of variable remuneration payable to each individual member, the fixed remuneration for each Executive Board member was increased by CHF 40,000.

Of the remuneration paid to members of the Executive Board in the year under review, 62% took the form of fixed remuneration and 38% was paid as variable remuneration in the form of cash and shares.

No agreements on severance compensation have been concluded with either the Board of Directors or the Executive Board.

Further information on remuneration, profit-sharing and loans can be found in Note 39 to the consolidated annual financial statements and Note 7 to the annual financial statements of Mobimo Holding AG.

5.2 Remuneration in 2012

In the year under review, the members of the Board of Directors, related parties and the Executive Board received remuneration as set out below (disclosure in accordance with Article 663bis of the Swiss Code of Obligations).

Profit-sharing
Social
Payments for
Fees, security additional
Name, function salary Shares in cash in shares contributions services Total 2012 Total 2011
BoD 1,092 286 0 0 50 0 1,428 1,476
Urs Ledermann, Chairman BoD1 480 0 0 0 0 0 480 480
Brian Fischer, BoD2 273 101 0 0 9 0 137 129
Wilhelm Hansen, BoD 193 101 0 0 9 0 129 129
Peter Schaub, BoD 150 0 0 0 0 0 150 162
Paul Schnetzer, BoD4 n / a n / a n / a n / a n / a n / a n / a 48
Georges Theiler, BoD5 1703 0 0 0 11 0 181 175
Daniel Crausaz, BoD 363 84 0 0 9 0 129 129
Bernard Guillelmon, BoD 703 0 0 0 4 0 74 76
Paul Rambert, BoD 1403 0 0 0 8 0 148 148
Executive Board6 2,213 0 605 740 481 0 4,039 4,235
Christoph Caviezel, CEO 743 0 216 264 172 0 1,395 1,654

Amounts equal the expense recognised in the consolidated annual financial statements of the reporting year (accrual accounting), with the exception of sharebased remuneration, which is disclosed at taxable value. Share-based remuneration for the Executive Board was based on the assumption that a ratio of 55% as stipulated in the remuneration regulations applies.

As at 31 December 2012, the shareholdings of the members of the Board of Directors and the Executive Board were as set out below (disclosure in accordance with Article 663c of the Swiss Code of Obligations).

No. of shares No. of
Name, function issued approved options Total 2012 Total 2011
BoD 56,546 0 1,299 57,845 52,569
Urs Ledermann, Chairman BoD 34,650 0 89 34,739 31,060
Brian Fischer, BoD 1,340 0 201 1,541 1,071
Wilhelm Hansen, BoD 3,178 0 89 3,267 2,652
Peter Schaub, BoD 832 0 89 921 921
Georges Theiler, BoD 4,786 0 564 5,350 5,350
Daniel Crausaz, BoD 1,706 0 89 1,795 1,283
Bernard Guillelmon, BoD 5,622 0 89 5,711 5,711
Paul Rambert, BoD 4,432 0 89 4,521 4,521
Executive Board6 17,690 4,528 1,783 24,001 23,601
Christoph Caviezel, CEO 6,941 1,617 1,065 9,623 12,002
Manuel Itten, CFO 4,293 970 191 5,454 4,176
Peter Grossenbacher, Head of Portfolio Management 4,524 647 275 5,446 5,019
Andreas Hämmerli, Head of Development 1,932 647 252 2,831 2,404
Thomas Stauber, Head of Investments for Third Parties 0 647 0 647 0

¹ Fee invoiced via Ledermann Immobilien AG and also includes administrative services provided

² Changed from being a member of the Audit & Risk Committee to a member of the Real Estate Committee in February 2012

³ A flat-rate reimbursement for expenses amounting to TCHF 8 is received for each individual reimbursement payment

⁴ Until April 2011

⁵ Chairman of the Real Estate Committee from April 2011

6 Executive Board expanded to include the Head of Investments for Third Parties from November 2011

Based on fair value measurement under IFRS, the following remuneration was reported in the consolidated annual financial statements for the Board of Directors and the Executive Board in the year under review (in TCHF):

2012 2011
Members of the Board of Directors/Executive Board 5,812 6,173
broken down as follows
Members of the Board of Directors
– Fees and remuneration 1,092 1,143
– Social security contributions 50 69
– Share-based payments (at fair value) 380 364
Members of the Executive Board1
– Salaries and profit-sharing (in cash) 2,818 2,591
– Social security contributions 481 479
– Share-based payments (at fair value) 991 1,527

6 SHAREHOL DERS' RIGHT S OF PART ICIPAT ION

6.1 Restrictions on voting rights and proxies (Articles 6 and 12 of the Articles of Association)

Only members entered in the share register are entitled to exercise their rights at General Meetings.

The Board of Directors may refuse to approve the transfer of registered shares, insofar as recognising a transferee as a full shareholder may, according to the information available to it, hinder the company from providing proof of Swiss control as stipulated under federal law (in particular the Swiss federal law pertaining to the purchase of property by persons resident abroad, BewG). The Board of Directors did not reject any entries in the share register in the year under review, insofar as shareholders provided the information required for entry (see above). Under Article 12 of the Articles of Association, any shareholder may be represented by another shareholder who has been granted a written proxy, the independent proxy or the proxy holder for shares.

6.2 Quorum prescribed by the Articles of Association (Articles 13 and 14 of the Articles of Association)

There is no quorum prescribed by the Articles of Association that goes beyond the statutory provisions on passing resolutions (Articles 703 and 704 of the Swiss Code of Obligations).

6.3 Convocation of General Meetings (Articles 9 and 10)

The convocation of General Meetings, the form of convocation and the right of shareholders to convene a General Meeting are governed by Articles 9 and 10 of the Articles of Association.

The Annual General Meeting is convened by the Board of Directors or if necessary by the auditor and is held once a year within six months of the end of the financial year. The Board of Directors may convene Extraordinary General Meetings at any time. Extraordinary General Meetings are to be convened by the Board of Directors on the basis of a resolution of the Annual General Meeting, at the request of the auditor or if one or more shareholders who together represent at least onetenth of the share capital request one in writing and submit the items for the agenda.

The liquidators also have the right to convene a General Meeting. Invitations to the General Meeting are issued at least 20 days prior to the date of the meeting via publication of a single notice in the Swiss Official Gazette of Commerce. Personal invitations are also sent to the shareholders entered in the share register giving the same amount of notice. The invitation must set out all the items on the agenda together with the proposals of the Board of Directors and any shareholders who have requested that a General Meeting be convened.

The annual report and auditor's report must be made available for inspection by shareholders at the company's registered office no later than 20 days prior to the Annual General Meeting. The availability of these reports and the right of shareholders to request that copies be sent to them must be indicated in the notice of convocation of the Annual General Meeting.

6.4 Agenda

(Article 10 of the Articles of Association)

The statutory provisions set out in Article 699 of the Swiss Code of Obligations apply to the right of shareholders to propose agenda items referred to in Article 10 of the Articles of Association. Shareholders who together represent at least 10% of the company's share capital may request that the Board of Directors convene a General Meeting. Shareholders who together represent shares with a nominal value of at least CHF 1 million may request that an item be placed on the agenda.

6.5 Entries in the share register (Article 6 of the Articles of Association)

Under Article 6 of the Articles of Association anyone entered in the share register is recognised as a shareholder or usufructuary. Entry is conditional on provision of evidence that the transfer meets formal requirements and is subject to the approval of the Board of Directors. The Board of Directors has defined this approval authority in regulations governing the administration of the share register and transferred responsibility for recognising and entering shareholders of Mobimo AG to the Audit & Risk Committee. The Audit & Risk

¹ Executive Board expanded to include the Head of Investments for Third Parties from November 2011

Committee has subsequently delegated all decisions that have no impact on stock exchange reporting thresholds or concern members of the Board of Directors or Executive Board to the CFO. No entries are made in the share register from a maximum of 20 days before until the day after the General Meeting. Prior to the Annual General Meeting on 9 April 2013, the share register will be closed for entries from 28 March 2013 onwards. The 2013 Annual General Meeting takes place in Lucerne on 9 April 2013.

6.6 Remuneration report

The Board of Directors has decided to provide the shareholders with a remuneration report each year as part of the annual report, and from the 2013 Annual General Meeting onwards to hold an annual consultative vote on the remuneration report irrespective of whether or not there have been significant changes compared with the previous year.

7 CHANGE OF CONTROL AND DEFENSIVE MEASURES

7.1 Obligation to make an offer

Anyone who acquires shares directly, indirectly or by mutual agreement with third parties, with the result that their total holding, including the securities they already own, exceeds the threshold of 33% of the voting rights of a listed company, whether exercisable or not, must make an offer to acquire all listed shares of said company (Article 32 of the Swiss Federal Act on Stock Exchanges and Securities Trading (SESTA)).

In view of the Swiss federal law pertaining to the purchase of property by persons resident abroad (BewG), the company has chosen not to make use of the opportunity to include an 'opting-out' or 'opting-up' clause in its Articles of Association. The legal provisions under Article 32 of SESTA governing the obligation to make a purchase offer therefore apply.

7.2 Change of control clauses

There are no change of control clauses.

8 AUDI TOR

8.1 Duration of mandate and term of office of lead auditor

Since Mobimo Holding AG was established in December 1999, the company's statutory and Group auditor has been KPMG AG, Root, Lucerne. The statutory and Group auditor are appointed annually by the the Annual General Meeting. In accordance with the seven-year rotation cycle, Reto Benz, Partner, has been lead auditor since the 2007 financial year.

8.2 Audit fee

KPMG received total fees of CHF 0.3 million for services relating to the audit of the interim results and 2012 annual results (including the LO Group).

8.3 Additional fees

KPMG was paid CHF 0.3 million for transactionrelated services (primarily tax advice and due diligence). Fees totalling CHF 0.4 million were also paid to the property valuer Wüest & Partner, Zurich, in the year under review.

8.4 Supervision and control instruments with regard to the auditor

  • The Audit & Risk Committee (AC) reviews the annual audit plan and scope, evaluates the performance, fees and independence of the statutory auditor and makes recommendations to the BoD.
  • The AC evaluates the classification of the risks of misrepresentations in the financial statements by the Executive Board and the statutory auditor, and evaluates and monitors the implementation of countermeasures.
  • The AC discusses the audited financial statements and the interim financial statements with the Executive Board and the statutory auditor, and undertakes a critical analysis, particularly with regard to special matters. The AC decides whether the individual and consolidated financial statements can be submitted to the BoD for approval and publication, prior to approval and publication by the BoD.
  • The AC discusses with the statutory auditor any significant problems arising during the audit and all management letters or other important reports on the ICS that are prepared by the statutory auditor or that the statutory auditor recom-

mends be prepared, as well as the responses of the Executive Board to such reports, submits its own reports to the BoD, with proposals for appropriate solutions where necessary, and monitors the implementation of countermeasures.

The AC discusses with the Executive Board and the statutory auditor their assessment of the general quality of the accounting policies applied by Mobimo in its financial reporting, undertakes a critical analysis thereof and submits reports to the BoD.

At the invitation of the Board of Directors, the statutory auditor's representatives participate either in person or by phone in the meetings of the AC or Board of Directors that deal with issues in this area.

9 INFORMAT ION POLIC Y

Mobimo Holding AG provides its shareholders and the capital market with information that is open, up-to-date and as transparent as possible. The Media and Analysts' Conference on the 2012 financial results takes place on 14 February 2013.

Financial reporting takes the form of semi-annual and annual reports. The consolidated annual financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the consolidated interim financial statements in accordance with International Accounting Standard 34 (IAS 34) on interim financial reporting. They comply with both Swiss law and the provisions of the listing rules and additional rules for the listing of real estate companies issued by the SIX Swiss Exchange.

The company is also subject to the obligation in respect of ad hoc publicity pursuant to Article 72 of the listing rules.

Further information about the company can be found on the website www.mobimo.ch.

Contact

Dr. Christoph Caviezel CEO Tel. +41 44 397 11 86

Mobimo Holding AG

Rütligasse 1 CH-6000 Lucerne 7 Tel. +41 41 249 49 80 Fax +41 41 249 49 89 www.mobimo.ch

Mobimo Management AG Mobimo AG

Seestrasse 59 CH-8700 Küsnacht Tel. +41 44 397 11 11 Fax +41 44 397 11 12

Mobimo Management SA LO Immeubles SA LO Holding Lausanne-Ouchy SA O4Real SA Rue de Genève 7 CH-1003 Lausanne Tel. +41 21 341 12 12 Fax +41 21 341 12 13

The Annual Report 2012 is also available in French and German. Only the German original is legally binding.

Publishing details

Overall responsibility: Mobimo Holding AG

Design and layout: Baldinger & Baldinger AG, Aarau

Photos:

Michael Kessler, www.profifoto.ch Ralph Bensberg, www.bensberg.ch Rudolf Hunziker, Atelier Lightning

Visualisations:

CCHE Architecture et Design SA, www.cche.ch Fischer Architekten AG, www.fischer-architekten.ch Swiss Interactive AG, www.swissinteractive.ch

Investment property under construction Rental apartments

Lausanne, "Petit Mont Riond" Rue Voltaire 2–12

Passion for real estate

Mobimo Holding AG · Rütligasse 1 · CH-6000 Lucerne 7 · Tel. +41 41 249 49 80 · Fax +41 41 249 49 89 · www.mobimo.ch

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