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SLEEPZ AG — Annual Report 2012
Aug 13, 2013
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Annual Report
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bmp media investors AG
Berlin
Annual Report 2012
Management Report for the Financial Year 2012
With the exception of the development at the equity investment Revotar AG, the 2012 financial year was satisfactory overall for bmp media investors AG.
There were five new investments in 2012. bmp media investors AG invested in the companies Retresco GmbH, MBR Targeting GmbH, iteelabs Sp. z o.o. and castaclip GmbH. Furthermore, bmp media investors AG renewed its interest in K2 Internet S.A., in which it had already held a position from 2000 to 2011. The equity investment in Newtron AG was sold to an investment company of the Liechtenstein Post Office in December 2012.
In the middle of 2011, fund management was spun off to what was then the subsidiary bmp Beteiligungsmanagement AG, with the result that bmp media investors AG was positioned purely as an investment company from 1 July 2011.
The separation of fund and fund manager was an important step in streamlining cost structures and enhancing transparency. 2012 was therefore the first full financial year in which the new cost structure was visible, allowing shareholders a better insight into the accounts and the costs of administration.
However, the costs reported in the income statement cannot be entirely used to assess the cost situation as some items in transit and costs not relevant to operations are reported under “Other operating expenses”. For example, “Consulting and commission income” includes T€ 700 in income from fund management services for BFB Frühphasenfonds Brandenburg GmbH, which are also reported in the same amount under expenses. Similarly, there are allocations to specific valuation allowances on interest receivables that were posted in income in this or prior periods. Adjusted by these positions, the cost structure constitutes as followed:
| T€ | 2012 |
|---|---|
| Outside services | 60 |
| Costs of Annual General Meeting | 41 |
| Insurance, premiums and levies | 44 |
| Advertising, travel and stock market expenses | 146 |
| Costs of fund management | 531 |
| Supervisory Board costs | 50 |
| Costs of financial statements and audits | 67 |
| Legal and consulting costs | 10 |
| Miscellaneous operating costs | 16 |
| Total | 965 |
Balance sheet structure
The assets side of the balance sheet predominantly consists of shares in investments and the cash required for further investments.
A material change in this structure is not anticipated; cash and cash equivalents will rise as a result of disposals of investments and fall as a result of new investments.
| Equity investments & loans (incl. listed securities) | 72.13% |
|---|---|
| Bank balances | 23.19% |
| Other | 4.68% |
| Total | 100.00% |
By contrast, the equity and liabilities side predominantly consists of equity and the refinancing loan of T€ 973. This loan was used to refinance the equity investment in Revotar Biopharmaceuticals AG and is 60% indemnified. As the equity investment refinanced filed for insolvency on 3 January 2013, it is expected that bmp media investors AG will repay the remaining 40% to KfW-Bankengruppe in 2013.
| Equity | 92.43% |
|---|---|
| Liabilities to banks | 5.69% |
| Other liabilities | 1.88% |
| Total | 100.00% |
In terms of revenue, the income statement is determined by revenue from sales of investments and the associated reduction in carrying amount.
In addition to personnel expenses for currently one employee, costs are incurred for investment consulting of 2.5% p.a. plus VAT on the average equity of bmp media investors AG in accordance with IFRS and a possible 15% profit share. Other operating expenses primarily arise from the costs of stock market listing, IR and PR costs and costs for the financial statements and audits. Other expenses are usually offset by income in the same amount, e.g. as for the expenses from fund management fees for BFB Frühphasenfonds Brandenburg GmbH.
The revenue from the sale of equity investments amounted to T€ 1,252 in 2012 (previous year: T€ 5,269), net income from remeasurement was T€ -1,593 (net write-downs and reversals thereof; previous year: T€ 514), of which T€ -1,482 related to the remeasurement of Revotar AG.
In the 2012 financial year, bmp media investors AG generated a HGB result of T€ -1,317 (previous year: T€ 1,934). Equity declined from € 17.1 million to € 15.8 million and rose from 90% to currently 92% of total assets.
As at 31 December 2012, cash in hand and bank balances were down around € 1.5 million on the previous year’s level at € 4.0 million. Short-term, negotiable securities climbed to € 2.9 million as at 31 December 2012 (previous year: € 2.7 million).
Market development and market position
The regional investment focus for direct investments is Germany and Poland, with an overwhelming number of investments in Germany.
According to data (2012 annual report) from the German Private Equity and Venture Capital Association (BVK Bundesverband Deutscher Kapitalbeteiligungsgesellschaften e.V.), the German investment market found its footing again by the end of the year after a weak start to 2012. At € 5.84 billion, investments almost matched the relatively good level of the previous year. In the past year, more than 1,200 companies in Germany were again financed with investment capital. This figure clearly shows the central role played by investment capital in this country in the financing of what are mainly small and medium-sized enterprises.
The investment volume dipped slightly by 6% as against the previous year. After investments increased significantly in 2010 and 2011, 2012 was characterised more as a phase of stabilisation. As in the previous year, majority investments/shareholder succession (buy-outs) accounted for most investments.
Meanwhile, the sector relevant to bmp – venture capital – remained relatively weak and fell short of the previous year’s figure (€ 717 million) by around a quarter at € 521 million. At 748, the number of companies funded with venture capital was also less than the previous year’s figure of 884. Despite isolated, outstanding financing transactions, the venture capital market is continuing to lose momentum on a broad front, according to the BVK.
The environment for exits proved restrained in the past year. The volume of investment sales was € 2.71 billion, virtually half of the previous year’s figure of € 5.35 billion. The drop was primarily due to a significant decline in trade sales. Trade sales in 2011 still accounted for 36%, while in 2012 they made up only 24.9%. One positive aspect is that the volume of total losses declined significantly by almost 75%. The most important exit channel in 2012 was sales to other investment companies (27% of total volume).
In the opinion of the BVK, economic performance and the political success in stemming the lingering debt crisis will be crucial factors for the direction taken by the German private equity market this year.
The investment companies are also optimistic for 2013. This has been found by the “Private Equity Forecast 2013”, a survey of BVK members on their projections for fundraising, investments and investment sales this year.
The Executive Board of bmp media investors AG is anticipating a good market environment for the venture capital industry for the course of 2013. Positive market development is also expected for the target markets of media and marketing services, as many new business concepts are currently under development and companies are forming that are seeking equity financing for their growth. bmp media investors is excellently positioned with its focus here and should profit from its more defined profile in 2013.
Business performance
Venture capital direct investments
The number of equity investments has increased from 14 to 18.
All of the investments come from the two markets which are relevant to bmp, namely Poland and Germany. Five new investments were entered into through bmp media investors AG in Retresco GmbH, MBR Targeting GmbH, iteelabs Sp. z o.o., castaclip GmbH and K2 Internet S.A. At the same time, there was one disposal from the portfolio: Newtron AG was sold in full by way of a trade sale.
In all, investments in the area of venture capital direct investments in the 2012 financial year amounted to a total of € 2.8 million. Most of this (€ 2.2 million) related to investments in new holdings. Follow-up investments were made in some existing investments in addition to the five new investments mentioned above.
Organisation and employees
Since the separation of the fund manager (bmp Beteiligungsmanagement AG) from the portfolio (bmp media investors AG) in 2011, responsibilities for departments have not been assigned and a chairman/CEO has not been appointed.
As at the reporting date, one permanent employee worked at bmp media investors AG in addition to the Executive Board. The company also had one employee on average over the year.
Financial situation
Result of operations
The company reported a result in accordance with HGB of T€ -1,317 for the 2012 financial year. Earnings therefore declined as against the previous year, in which the company had reported net income of T€ 1,934. Revenue from the sale of equity investments and securities amounted to T€ 1,252. In the previous year, revenue from the sale of equity investments and securities amounted to T€ 5,269. The other operating income declined from T€ 1,293 to T€ 555, as around T€ 800 more had been reported under reversals of write-downs on equity investments and securities in the previous year.
Personnel expenses were down 92% on 2011 at T€ 64, mainly as a result of the separation under company law of fund and fund manager. These savings in personnel expenses were offset in part by fund management expenses. Other operating expenses dropped from T€ 2,093 to T€ 1,784. Netted against each other, the two items (personnel expenses and other operating expenses) produced a cost reduction of T€ 1,023, T€ 329 of which was due to unrealised losses in zloty in 2011.
Write-downs on financial assets and securities rose sharply from T€ 112 to T€ 1,626. This was mainly due to the write-down on the equity investment in Revotar Biopharmaceuticals AG.
The return on equity, measured as net income for the financial year in relation to average equity, was -8.0%.
Asset and capital structure
Fixed assets mainly include the shares in investment companies and loans to these companies. At T€ 9,348, they account for 99.9% of fixed assets. Current assets fell by 18% from T€ 9,413 to T€ 7,751. Cash in hand and bank balances amounted to T€ 3,969 at the end of the 2012 financial year after T€ 5,506 in 2011. Total assets declined from €19.0 million to €17.1 million.
Equity decreased by 7.6% from € 17.1 million to € 15.8 million. Liabilities declined from T€ 1,631 to T€ 1,153. T€ 973 of this relates to the KfW refinancing loans for an equity investment.
Liquidity
Current marketable securities and cash and cash equivalents amounted to € 6.8 million as at the end of the year.
Opportunities and risks of future development, risk management
Direct investments
Venture capital is speculative or risk capital, granted with the aim of achieving high returns. Compared to other forms of financing, venture capital clearly has a higher risk potential and requires a high degree of support. As the companies neither generate profits, nor can the success of their business model be taken for granted at the time the investment is entered into, this presents a high risk for the company. In principle, this risk increases significantly with greater proximity to the founding of the company.
Time of disposal and recoverable disposal proceeds
In the area of direct investments, bmp media investors AG primarily profits from the sale of investments to an institutional or industrial investor (trade sale) or by floatation (IPO). These sales methods are also called exit channels. The company cannot guarantee that an investment can be sold at a profit or sold at all. The sale of investments becomes particularly difficult in weak capital markets and this can therefore lead to negative results for bmp media investors AG.
Uncertainty of the economic development of individual companies in the portfolio
Write-downs on investments or even the total loss of investments due to insolvency cannot be avoided despite many years of business experience and intensive investment controlling, nor are they unusual in early stage financing in particular. bmp media investors AG counteracts the financial impact of a drop in the value of if investments with early support and countermeasures, the continuous improvement of due diligence and investment controlling as well as appropriate provisions for risk (recognising valuation allowances) in accounting measurement.
Cluster risks
The three biggest holdings together represent around 59% of the carrying amount of equity investments and securities. The carrying amounts of brand eins Medien AG, Heliocentris Energy Solutions AG and Self Loading Content GmbH range between € 1.2 million and € 3.1 million.
Risk from foreign transactions
bmp media investors’ foreign investments are subject to the laws of each respective country. In addition, individual agreements are also subject to the laws of each respective country. The company is thus exposed to the usual dangers and risks of a foreign legal system. The application of foreign law and country-specific conditions can therefore lead to unexpected risks. At present, bmp holds three foreign investments in Poland.
Liability on the disposal of investments
In terms of the disposal of investments, bmp investors AG as the seller or – under some circumstances – as a partner with the participation of other investors may have to grant guarantees particularly in regard to tax liabilities in favour of the purchaser or the purchasers. bmp media investors AG strives to limit the liability arising from such guarantees and indemnities to a certain percentage of the purchase price, insofar as guarantees are accepted at all. bmp media investors AG cannot rule out that in some individual cases such liabilities will occur.
Risk of changes in interest rates
Fixed interest rates on all credits, loans and callable bonds were arranged for their entire terms. Consequently there are no associated risks of changes in interest rates. However, short-term cash investments bear interest at floating rates.
Currency risks
In the past, the company has used various methods to pay in foreign currency for the acquisition of an investment or to receive payment for the disposal of an investment. Depending on the time of the initial investment and its disposal, there may also be a capital gain or loss due to currency fluctuation in addition to the gain or loss from the disposal. An additional risk is that the company must accept exchange losses on foreign currency balances where no hedging transactions exist.
Company dependence on economic cycles and financial markets
The economic success of bmp media investors AG is primarily dependent on the price at which bmp media investors AG can acquire its investments or holdings, the positive development of the companies in the investment portfolios and the disposal proceeds generated. A negative economic development for all, several or individual companies in the portfolio can be caused by various external or internal factors that the company cannot influence. The economic success of bmp media investors AG is heavily dependent on the general economic development, the development of the industries in which bmp media investors has invested and the development of the financial markets.
Overall evaluation and risk management
bmp media investors AG has recognised extensive provisions for all discernible individual risks in its 2012 annual financial statements. Activities in the area of risk management were expanded further in 2012.
In 2011, the Executive Board hived off its investment management to what was then the subsidiary bmp Beteiligungsmanagement AG. At regular intervals it checks the work of this service provider by way of spot checks at the level of both the equity investments and the company. There is a quality manual.
The service provider in the investment consulting agreement, bmp Beteiligungsmanagement AG, has developed an integrated system of investment controlling that allows it to assess the quantity and quality of risks arising in its investment business. In addition to comparing forecast and actual data at both an investment level and company level, the system enables full reporting while satisfying the purpose of a management information system.
Economic developments in our holdings are monitored by bmp Beteiligungsmanagement AG through intensive contact with the companies. The carrying amounts and the value development of investment companies are reviewed quarterly using suitable financial models. Depending on the type and degree of development of the investment companies, various measurement models are used to check whether their fair value exceeds amortised cost. The ongoing tracking of fair values and investment controlling make it possible to take appropriate measures to counteract undesirable developments in the equity investments.
bmp media investors’ current liquidity is adequate for its existing business and will enable the expansion of business. From a current standpoint, if the risks described were to occur individually or together they would still not pose a danger to the continuation of bmp media investors AG as a going concern. In the view of the Executive Board, bmp media investors AG has a lasting capability to remain in existence over the long term.
Remuneration system
Since 1 July 2011, no further remuneration has been paid to the Executive Board by the company. Mr. Spyrka alone has a continuing claim from his position prior to joining the Executive Board to a 5% profit share from an existing escrow claim from a previously sold investment.
In accordance with our Articles of Association, the members of the Supervisory Board have a claim to reimbursement of their expenses and to remuneration.
The fixed remuneration consists of an annual basic salary and remuneration per meeting day.
The Supervisory Board has the right to a performance-related bonus if the annual financial statements show net retained profits under HGB of at least 4% of the capital contributions on the lowest issue amount for shares, starting at € 0.20 cent per share outstanding.
Finally, the company has taken out D&O insurance for the members of the Executive Board and the Supervisory Board.
Appointment and dismissal of members of the Executive Board, amendments to the Articles of Association
The appointment and the dismissal of members of the Executive Board of bmp media investors AG are covered in sections 84 and 85 AktG in conjunction with Article 7 of the Articles of Association.
In accordance with section 84 AktG, the Executive Board is appointed by the Supervisory Board of the company for a term of up to five years. In exceptional cases only, a member of the Executive Board can also be court appointed in accordance with section 85 AktG.
The Executive Board of bmp media investors AG consists of one or more members. The Supervisory Board can revoke this appointment and the general appointment to the Executive Board with due cause.
In accordance with section 179(1) AktG, all amendments to the Articles of Association require a resolution by the Annual General Meeting. The Annual General Meeting can transfer its authority to amend the Articles of Association to the Supervisory Board only in cases where changes affect the wording only. There is a general authorisation in Article 17 of the Articles of Association.
In accordance with section 179(2) AktG, a resolution to amend the Articles of Association requires a minimum three-quarter majority of the capital represented at the adoption of the resolution. Otherwise, resolutions by the Annual General Meeting in accordance with section 133 AktG are adopted by a simple majority of votes cast in accordance with Article 22 of the Articles of Association of bmp media investors AG, unless a larger majority is required by mandatory legal provisions.
Shares and capital
The fully paid-in capital amounted to € 18,819,250 as at the balance sheet date. It is divided into 18,819,250 no-par value bearer shares. All shares are vested with same rights.
The Executive Board is authorised, with the approval of the Supervisory Board, to increase the share capital of the company on one or several occasions up to a total of € 8,750,000 by issuing new bearer shares against cash or non-cash contributions until 21 June 2016, and in doing so stipulate the terms for issuing shares. The Executive Board is also authorised, with the approval of the Supervisory Board, to buy back up to 1.75 million shares.
No further disclosures are required under section 315(4) HGB.
Integrated internal control and risk management system for the accounting process
The accounting-related internal control and risk management system that is crucial to the financial statements of bmp media investors AG includes measures that are intended to provide comprehensive, correct and up-to-date communication of information that is required to prepare the annual financial statements and the management report of bmp media investors AG. These measures are intended to minimise the risk of material misstatements in accounting and external reporting.
Accounting is organised centrally. All services pertaining to accounting and controlling are performed at the company’s headquarters by bmp Beteiligungsmanagement AG.
Uniform accounting based on the regulations applicable to the parent company is guaranteed by central processing and central accounting policies. Using the central accounting guideline, the proper measurement of investments is ensured by consistently observing the dual control principle.
Corporate governance declaration
The corporate governance declaration has been published on our homepage www.mediainvestors.com under “Investor Relations/Corporate Governance/Corporate Governance Declaration”.
Events after the balance sheet date
The equity investment Revotar Biopharmaceuticals AG filed for insolvency on 3 January 2013. Insolvency proceedings were opened on 25 March 2013.
Forecast
Market environment
The German venture capital market remains poorly developed by international standards. It can therefore be assumed that the demand for venture capital will continue to outstrip the supply of venture capital in the coming years. New providers are constantly entering the market, but at the same time market participants are constantly leaving the market. Hence we do not anticipate an increase in competition, especially not in the area of early stage financing, which is particularly high-risk.
The number of relevant investment inquiries should increase further in the coming years due to the clear positioning in the media and marketing services area. bmp already has a good reputation and is well known in this segment, and this will be built on in future years. We therefore anticipate that we will continue to receive sufficient interesting investment opportunities in the future.
Investment activity
In 2012, we confirmed our solid investment activity from the previous year with five new investments in media and marketing services companies. We expect at least five new investments for 2013 as well. We also intend to further expand our investment activity, although this is primarily dependent on our available funds. We are confident that we can successfully implement exits in 2013 as well.
Forecast result of operations
As the venture capital business is de facto a project business, and company disposals cannot be precisely planned, we are unable to give a specific forecast for the future profit situation. However, given our streamlined cost structure and a series of promising investments, we expect to continue to work profitably in 2013. A precondition for this is a stable market environment on the one hand and positive valuation events in our investment portfolio as a result of follow-up financing, stock market valuations or exits on the other.
Opportunity report
Given the focus of investment activities on media and marketing services, we expect a higher profile in the segment going forward, and thus an improved quality of deal flow in interesting investment opportunities. By streamlining the cost structure and positioning as a pure-play investment company, we also anticipate an increase in investment opportunities against the issue of shares in bmp media investors AG. Both factors should lead to a larger portfolio volume and an improved result of operations for the company in the long term.
The Executive Board is confident that it will close the current financial year with a profit.
Berlin, March 28, 2013
Oliver Borrmann
Jens Spyrka
Balance Sheet as at 31 December 2012
Assets
| 31,12,2011 | ||||||
|---|---|---|---|---|---|---|
| EUR | EUR | EUR | TEUR | |||
| A. Fixed assets | ||||||
| I. Intangible assets | ||||||
| Concessions, industrial property rights and similar rights | 8,567.03 | 11 | ||||
| II. Financial assets | ||||||
| 1. Shares in affiliated companies | 0.00 | 629 | ||||
| 2. Investments | 9,026,176.10 | 8,816 | ||||
| 3. Loans to investee companies | 322,500.00 | 101 | ||||
| 4. Securities of non-current assets | 0.00 | 9,348,676.10 | 9,357,243.13 | 0 | ||
| B. Current assets | ||||||
| I. Accounts receivable and other | ||||||
| assets | ||||||
| 1. Trade accounts receivable | 78,456.79 | 63 | ||||
| 2. Receivables from affiliated companies | 0.00 | 2 | ||||
| 3. Receivables from investee companies | 20,024.57 | 1 | ||||
| 4. Other assets | 688,404.52 | 786,885.88 | 1,132 | |||
| II. Securities | ||||||
| Other securities | 2,994,848.00 | 2,709 | ||||
| III. Cash on banks and cash on hand | 3,969,076.31 | 7,750,810.19 | 5,506 | |||
| C. Prepaid expenses | 5,395.00 | 0 | ||||
| 17,113,448.32 | 18,970 |
Liabilities
| 31,12,2011 | |||||
|---|---|---|---|---|---|
| EUR | EUR | TEUR | |||
| A. Shareholders` equity | |||||
| I. Subscribed capital | 18,819,250.00 | 18,819 | |||
| II. Capital reserves | 2,659,338.60 | 2,660 | |||
| III. Accumulated net loss | -5,659,881.39 | 15,818,707.21 | -4,343 | ||
| B. Provisions | |||||
| Other provisions | 141,778.09 | 203 | |||
| C. Liabilities | |||||
| 1. Liabilities to banks | 973,498.30 | 1,217 | |||
| 2. Trade accounts payable | 38,540.17 | 119 | |||
| 3. Liabilities to affiliated companies | 0.00 | 269 | |||
| 4. Other liablilities | 140,924.55 | 1,152,963.02 | 26 | ||
| thereof from taxes: € 2,033 (previous | |||||
| year: 2 T€) | |||||
| 17,113,448.32 | 18,970 |
Berlin, 28 March 2013
Profit and Loss Statement for the Period from 01.01.2012 to 31.12.2012
| 01.01.-31.12.11 | ||||
|---|---|---|---|---|
| EUR | TEUR | |||
| 1. Sales revenue | ||||
| a) Income from disposal of investments and marketable securities | 1,251,741.57 | 5,269 | ||
| b) Income from consulting and commissions | 712,000.00 | 1,963,741.57 | 731 | |
| 2. Other operating income | 555,160.07 | 1,265 | ||
| 3. Reduction in book value of investments and marketable securities | -541,129.50 | -2,899 | ||
| 4. Staff costs | ||||
| a) Wages and salaries | -52,616.33 | -710 | ||
| b) Social security contributions and costs for pensions and support | -11,001.60 | -63,617.93 | -67 | |
| - thereof cost for pensions: 4.826,90 € (previous year: 5 T€) | ||||
| 5. Depreciations | ||||
| a) Depreciation on intangible and tangible fixed assets | -2,418.73 | -6 | ||
| 6. Other operating expenses | -1,783,853.70 | -2,065 | ||
| 7. Income from investments | 54,194.99 | 259 | ||
| - thereof from affiliated companies: | ||||
| 54.194,99 € (previous year: 260 T€) | ||||
| 8. Interest and similiar income | 194,723.93 | 344 | ||
| - thereof from affiliated companies: | ||||
| 42.058,52 € (previous year: 166 T€) | ||||
| 9. Depreciations on investments and marketable securities | -1,625,882.67 | -112 | ||
| 10. Interest and similiar expenses | -67,954.41 | -75 | ||
| 11. Result from ordinary aktivities | -1,317,036.38 | 1,934 | ||
| 12. Other taxes | 0.00 | -1 | ||
| 13. Net year loss (prvious year: Net year profit) | -1,317,036.38 | 1,933 | ||
| 14. Loss carried forward from previous year | -4,342,845.01 | -6,276 | ||
| 15. Accumulated net loss | -5,659,881.39 | -4,343 |
Cash Flow Statement
| 2012 | 2011 | |||
|---|---|---|---|---|
| EUR | EUR | TEUR | ||
| Loss for the year (previous year: Profit for the year) | -1,317,036.38 | 1,934 | ||
| + | Depreciations on financial assets | 1,625,882.67 | 112 | |
| - | Appreciations on financial assets and marketable securities | -33,315.51 | -836 | |
| + | Depreciations on tangible and intangible assets | 2,418.73 | 6 | |
| - | Profit from disposal of financial assets | -668,433.81 | -475 | |
| - | Insertion of joint venture | 0.00 | -222 | |
| - | Profit from merger | 0.00 | -4 | |
| -390,484.30 | 515 | |||
| -/+ | Decrease/(-) increase in trade accounts receivables and other assets including securities | 245,016.38 | 2,953 | |
| +/- | Decrease/(-) increase in in short-term privisions | -61,121.13 | 13 | |
| +/- | Decrease/(-) increase in in trade accounts payable and other liabilities | -234,716.83 | -50,821.58 | -292 |
| Cash Flow from Operations | -441,305.88 | 3,189 | ||
| - | ||||
| Investments in other intangible and tangible assets | 0.00 | -17 | ||
| +/- | Shares in affiliated companies | 503,436.33 | -950 | |
| - | Loans to investee companies | -272,500.00 | -50 | |
| - | Investments in holdings and securities | -2,323,641.27 | -3,668 | |
| + | Cash-in from disposal of financial assets | 1,240,290.45 | 1,434 | |
| + | Disposals of intagible and tangible assets at net book value | 0.00 | 35 | |
| Cash-Flow from Investments | -852,414.49 | -3,216 | ||
| - | Capital increase | 0.00 | 0 | |
| - | Refund of refinancing loan | -243,375.00 | 0 | |
| Cash Flow from Financing | -243,375.00 | 0 | ||
| Overall, the liquid funds has developed as followed: | ||||
| Cash Flow from Operations | -441,305.88 | 3,189 | ||
| Cash-Flow from Investments | -852,414.49 | -3,216 | ||
| Cash Flow from Financing | -243,375.00 | 0 | ||
| Change in liquid funds | -1,537,095.37 | -27 | ||
| + | Liquid funds at the beginning of business year | 5,506,171.68 | 1,018 | |
| + | Additions to liquid funds from merger bmp Media Investors AG & Co. KGaA | 0.00 | 4,515 | |
| \= | Liquid funds at the end of business year | 3,969,076.31 | 5,506 |
Statement of Changes in Equity
| Subscribed | Capital reserves | Loss/profit carried | Total | |
|---|---|---|---|---|
| Capital | forward from | |||
| previous year | ||||
| EUR | EUR | EUR | EUR | |
| Shareholders` equity as of 1 January 2012 | 18,819,250.00 | 2,659,338.60 | -4,342,845.01 | 17,135,743.59 |
| Net year result | -1,317,036.38 | -1,317,036.38 | ||
| Shareholders` equity as of 31 December 2012 | 18,819,250.00 | 2,659,338.60 | -5,659,881.39 | 15,818,707.21 |
| Shareholders` equity as of 1 January 2011 | 17,500,000.00 | 2,131,338.60 | -6,277,036.54 | 13,354,302.06 |
| Capital increase | 1,319,250.00 | 528,000.00 | 1,847,250.00 | |
| Net year result | 1,934,191.53 | 1,934,191.53 | ||
| Shareholders` equity as of 31 December 2011 | 18,819,250.00 | 2,659,338.60 | -4,342,845.01 | 17,135,743.59 |
Statement of Fixed Assets
Historical Costs
| 01.01.2012 | Additions | Disposals | Transfers | 31.12.2012 | |
|---|---|---|---|---|---|
| EUR | EUR | EUR | EUR | EUR | |
| I. Intangible assets | |||||
| 1. Concessions, licences and similar goodwill | 16,392.28 | 0.00 | 0.00 | 0.00 | 16,392.28 |
| 16,392.28 | 0.00 | 0.00 | 0.00 | 16,392.28 | |
| II. Tangible assets | |||||
| 1. Other plant, factory and office equipment | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| III. Financial assets | |||||
| 1. Shares in affiliated companies | 4,337,192.40 | 0.00 | 4,211,967.84 | -125,224.56 | 0.00 |
| 2. Investments | 16,126,863.45 | 2,316,568.27 | 2,045,251.58 | 0.00 | 16,398,180.14 |
| 3. Loans to investee companies | 142,857.00 | 272,500.00 | 92,857.00 | 0.00 | 322,500.00 |
| 4. Securities of non-current assets | 7,073.00 | 7,073.00 | 14,146.00 | 0.00 | 0.00 |
| 20,613,985.85 | 2,596,141.27 | 6,364,222.42 | -125,224.56 | 16,720,680.14 | |
| Total fixed assets | 20,630,378.13 | 2,596,141.27 | 6,364,222.42 | -125,224.56 | 16,737,072.42 |
Accumulated Depreciations
| 01.01.2012 | Additions | Disposals | Appreciation | Transfers | 31.12.2012 | |
|---|---|---|---|---|---|---|
| EUR | EUR | EUR | EUR | EUR | EUR | |
| I. Intangible assets | ||||||
| 1. Concessions, licences and similar goodwill | 5,406.52 | 2,418.73 | 0.00 | 0.00 | 0.00 | 7,825.25 |
| 5,406.52 | 2,418.73 | 0.00 | 0.00 | 0.00 | 7,825.25 | |
| II. Tangible assets | ||||||
| 1. Other plant, factory and office equipment | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| III. Financial assets | ||||||
| 1. Shares in affiliated companies | 3,708,531.51 | 0.00 | 3,708,531.51 | 0.00 | 0.00 | 0.00 |
| 2. Investments | 7,310,595.82 | 1,575,193.67 | 1,480,469.94 | 33,315.51 | 0.00 | 7,372,004.04 |
| 3. Loans to investee companies | 42,167.00 | 50,689.00 | 92,856.00 | 0.00 | 0.00 | 0.00 |
| 4. Securities of non-current assets | 7,072.00 | 0.00 | 7,072.00 | 0.00 | 0.00 | 0.00 |
| 11,068,366.33 | 1,625,882.67 | 5,288,929.45 | 33,315.51 | 0.00 | 7,372,004.04 | |
| Total fixed assets | 11,073,772.85 | 1,628,301.40 | 5,288,929.45 | 33,315.51 | 0.00 | 7,379,829.29 |
Book Values
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| EUR | EUR | |
| I. Intangible assets | ||
| 1. Concessions, licences and similar goodwill | 8,567.03 | 10,985.76 |
| 8,567.03 | 10,985.76 | |
| II. Tangible assets | ||
| 1. Other plant, factory and office equipment | 0.00 | 0.00 |
| 0.00 | 0.00 | |
| III. Financial assets | ||
| 1. Shares in affiliated companies | 0.00 | 628,660.89 |
| 2. Investments | 9,026,176.10 | 8,816,267.63 |
| 3. Loans to investee companies | 322,500.00 | 100,690.00 |
| 4. Securities of non-current assets | 0.00 | 1.00 |
| 9,348,676.10 | 9,545,619.52 | |
| Total fixed assets | 9,357,243.13 | 9,556,605.28 |
Notes to the Annual Financial Statement as at 31 December 2012
1. ACCOUNTING POLICIES
The annual financial statements were prepared in accordance with the provisions of the Handelsgesetzbuch (HGB – German Commercial Code) and the Aktiengesetz (AktG – German Stock Corporation Act). The income statement has been prepared in accordance with the total cost format.
As a listed company, bmp media investors AG, Berlin (“bmp”) is considered a large corporation under section 267(3) sentence 2 HGB.
The balance sheet has been prepared in the form prescribed for large corporations in accordance with section 266 HGB. The income statement has been prepared in accordance with the total cost format in line with section 275(2) HGB.
Intangible assets
Intangible assets are recognised at cost less cumulative amortisation. Amortisation is recognised on a straight-line basis.
Tangible assets
Tangible assets are recognised at cost less cumulative depreciation. Depreciation is recognised on a straight-line basis.
Low-value assets
Low-value assets with a cost of up to € 150 are written down in full in the year of acquisition in accordance with section 6(2) sentence 1 of the Einkommensteuergesetz (EStG – German Income Tax Act). Low-value assets with a cost between € 150 and € 1,000 are written down on a straight-line basis over a period of five years in accordance with section 6(2 a) EStG.
Financial assets
Equity investments in subscribed capital are recognised at cost. Capital contribution obligations exceeding this are reported under other financial obligations.
Write-downs are recognised to carry assets at their lower fair value as at the reporting date.
Receivables and other assets
Receivables and other assets are reported at nominal amount. Actual risks are accounted for with specific valuation allowances.
Securities classified as current assets
Securities classified as current assets are recognised at cost. Where necessary, they are written down to the lower fair value in accordance with section 253(3) HGB.
Prepaid expenses and deferred income
Expenses paid before the reporting date are reported as prepaid expenses if they relate to expenses for a certain time after this date. Income is reported as deferred income if it represents income for a certain time after the reporting date.
Other provisions
Provisions are recognised for uncertain obligations at the settlement amount deemed necessary in line with prudent business judgement.
Liabilities
Liabilities are reported at settlement amount.
Foreign currency translation
Foreign currency transactions are translated at the current rate on the day of the transaction. Foreign currency assets and liabilities are translated at the mean spot rate at the reporting date.
Sales
Income from the disposal of investments and securities is reported as sales in the income statement and the corresponding expenses from the disposal of participations and securities are reported as a separate item under cost of materials.
2. INCOME STATEMENT AND BALANCE SHEET DISCLOSURES
Financial assets
Long-term investments developed as shown in the statement of changes in non-current assets.
bmp media investors AG’s equity investments as at the balance sheet date can be broken down as follows:
| T€ | |
|---|---|
| Equity investments | 16,398 |
| Write-downs | -7,372 |
| Total | 9,026 |
The carrying amounts of equity investments of T€ 9,026 includes an equity investment in the amount of T€ 584, on which the management recognised a 100% write-down on the non-indemnified carrying amount. This asset item is offset by an indemnified refinancing loan to be waived by the KfW in the event of loss (usually insolvency) in the same amount reported under liabilities. If the loss event occurs, both the carrying amount of the equity investment and the refinancing loan in the same amount will be derecognised.
Receivables and other assets
All receivables and other assets are due within one year.
Subscribed capital
The fully paid-in capital amounted to € 18,819,250 as at the balance sheet date. It is divided into 18,819,250 no-par value bearer shares.
Authorised capital
The Executive Board is authorised, with the approval of the Supervisory Board, to increase the share capital of the company on one or several occasions up to a total of € 8,750,000 by issuing new bearer shares against cash or non-cash contributions (Authorised Capital 2011) until 21 June 2016, and in doing so stipulate the terms for issuing shares.
The pre-emption rights of shareholders can be disapplied:
a) for the acquisition of companies, parts of companies or investments in companies in exchange for shares in the company,
b) if a capital increase against cash contributions does not exceed 10% of the share capital of the company and the issue price of the shares is not substantially less than the market price,
c) to eliminate fractional amounts.
Capital reserves/revenue reserves
Premiums from the capital increases were transferred to capital reserves in accordance with section 272(2) no. 1 HGB.
Other provisions
Other provisions were recognised for outstanding holiday claims (T€ 3), costs for accounting, financial statements and audits (T€ 105), bonuses for former employees (T€ 5) and outstanding invoices (T€ 28).
Liabilities
Total liabilities as at 31 December 2012 are broken down by remaining term as follows:
| Remaining term | ||||
|---|---|---|---|---|
| Less than 1 year T€ |
1 to 5 years T€ |
More than 5 years T€ |
Total T€ |
|
| Liabilities to banks | 973 | 0 | 0 | 973 |
| Trade payables | 39 | 0 | 0 | 39 |
| Liabilities to affiliated companies | 0 | 0 | 0 | 0 |
| Other liabilities | 141 | 0 | 0 | 141 |
| Total | 1,153 | 0 | 0 | 1,153 |
Total liabilities as at 31 December 2011 are broken down by remaining term as follows:
| Remaining term | ||||
|---|---|---|---|---|
| Less than 1 year T€ |
1 to 5 years T€ |
More than 5 years T€ |
Total T€ |
|
| Liabilities to banks | 243 | 974 | 0 | 1.217 |
| Trade payables | 119 | 0 | 0 | 119 |
| Liabilities to affiliated companies | 269 | 0 | 0 | 269 |
| Other liabilities | 26 | 0 | 0 | 26 |
| Total | 657 | 974 | 0 | 1.631 |
Liabilities to banks are KfW refinancing loans. Liabilities to KfW are secured by assigning all of bmp media investors AG’s claims from the refinanced investments.
Sales
Sales include income from disposal of securities (T€ 1,252) and income from consulting and commission (T€ 712).
Other operating income
Other operating income includes income from the reversal of write-downs on financial assets (T€ 33), income from loans and receivables written down (T€ 239) and income from currency translation (T€ 195).
Write-downs
In the financial year, financial assets were written down to lower fair value in the amount of T€ 1,626 in accordance with section 253(2) sentence 3 HGB.
Deferred taxes
Investment business is exempt from taxes on income. The 5% flat rate does not result in taxable profits due to current costs. Furthermore, there are sufficient tax loss carryforwards in particular.
OTHER DISCLOSURES
Contingent liabilities
It is customary when selling shares in holding companies that financial investors must also extend guarantees and assurances to the purchasers. As is standard practice in the industry, bmp media investors AG has assumed extensive guarantees and assurances when selling shares.
Other financial obligations
Financial obligations result from an existing investment consultancy agreement with bmp Beteiligungsmanagement AG. The fixed remuneration amounts to 2.5% p.a. of “equity”. Equity in this sense comprises half of the total of the reported equity as at the beginning and the end of the respective calendar year. The applicable accounting standards are the IFRS standards which are mandatory in the EU. There is an additional performance-related remuneration.
Shareholdings
A list of companies in which the company has a shareholding of at least 20% either directly or indirectly within the meaning of section 285 no. 11 HGB can be found under "Shareholdings”.
Auditors’ fees
The following auditors’ fees were recognised as expenses in the 2012 financial year:
| In T€ |
|
|---|---|
| Fee for financial statements and audits | 65 |
| Tax advisory fees | 31 |
| Other services | 3 |
| Total | 99 |
Information on the executive bodies of the company
Executive Board
The members of the Executive Board of bmp media investors AG in the 2012 financial year were:
Oliver Borrmann, businessman
Jens Spyrka, businessman
Remuneration of the Executive Board
As a result of the restructuring carried out in the middle of 2011, the Executive Board members have received no further remuneration since 1 July 2011. Mr. Spyrka alone is still entitled to a performance-related bonus of T€ 5 from his time as an employee prior to joining the Executive Board, which has not been payable to date.
Receivables from Executive Board members
As at the end of the year, there were receivables of T€ 200 from the members of the Executive Board or companies attributable to them arising from two purchase agreements dated 21 December 2012 for shares in bmp Beteiligungsmanagement AG. The receivables were settled in the first week of January 2013.
Other offices held by the Executive Board
Mr. Borrmann is on the Supervisory Board of the following companies:
| Newtron AG (Chairman) | year-round |
| brand eins Medien AG (Chairman) | year-round |
| Revotar Biopharmaceuticals AG (Chairman) | year-round |
| Heliocentris Energy Solutions AG (Chairman) | year-round |
| YOC AG | year-round |
In addition, as at 31 December 2012, Mr. Borrmann was also a managing director of König & Cie. Private Equity Management GmbH, König & Cie.II. Private Equity Beteiligungs- und Treuhand GmbH, Cavy Capital GmbH and an Executive Board member of bmp Beteiligungsmanagement AG.
Mr. Spyrka is on the Supervisory Board of the following companies:
| K2 Internet S.A. | year-round |
| vertical techmedia AG (Chairman) | year-round |
As at 31 December 2012, Mr Spyrka was also an Executive Board member of bmp Beteiligungsmanagement AG.
Supervisory Board
The members of the Supervisory Board of the company are:
| Gerd Schmitz-Morkramer, Munich Chairman of the Supervisory Board |
Lawyer |
|---|---|
| Bernd Brunke, Berlin Deputy Chairman of the Supervisory Board |
Managing Director at Roland Berger Strategy Consultants |
| Ulrich Ankele, Oberursel Member of the Supervisory Board |
Director of KfW (retired) until 13 June 2012 |
| Michael Stammler, Lutzenberg (CH) Member of the Supervisory Board |
Businessman from 13 June 2012 |
Total payments to the members of the Supervisory Board of bmp media investors AG in the 2012 financial year amounted to T€ 49.
In total, each Supervisory Board member was entitled to the following remuneration:
| In T€ | |
|---|---|
| Gerd Schmitz-Morkramer | 24 |
| Bernd Brunke | 11 |
| Ulrich Ankele | 3 |
| Michael Stammler | 7 |
| Total | 45 |
Mr. Schmitz-Morkramer is on the Supervisory Board of the following companies:
| YOC AG (Chairman) | year-round |
Mr. Stammler is on the Supervisory Board of the following companies:
| Heliocentris Energy Solutions AG | year-round |
|---|---|
| eCAPITAL entrepreneurial Partners AG (Deputy Chairman) |
year-round |
| WM Treuhand und Steuerberatungs-gesellschaft AG | year-round |
Mr. Brunke and Mr. Ankele have no further mandates on supervisory boards or other controlling bodies.
Shareholdings of the Executive Board and the Supervisory Board as at 31 December 2012
The members of the Executive Board held 3,450,486 shares, the members of the Supervisory Board held 459,929.
Employees
In the financial year, bmp media investors AG had an average of one salaried employee in addition to the Executive Board. As at the end of the year, the company had one employee in addition to the Executive Board.
German Corporate Governance Code
The Executive Board has issued the declaration required by section 161 AktG with the individual adjustments for bmp media investors AG and made it available to shareholders on the Internet at www.mediainvestors.com.
Reported shareholdings in accordance with section 21(1) or (1a) WpHG as at 31 December 2012:
| Oliver Borrmann | 17.94% |
|---|---|
| Roland Berger Group | 8.18% |
| Carin Pepper | 6.98% |
In the 2012 financial year there were the following disclosures in accordance with section 26(1) WpHG:
“28 December 2012 - section 26
Publication in accordance with section 26(1) WpHG
ING Towarzystwo Funduszy Inwestycyjnych S.A./ING Parasol Fundusz Inwestycyjny Otwarty
1. In accordance with section 21(1) WpHG, Towarzystwo Funduszy Inwestycyjnych S.A., Warsaw, Poland, notified us on 21 December 2012 that its share in the voting rights of bmp media investors AG, Berlin, Germany, fell below the threshold of 5% of voting rights on 12 December 2012 and amounted to 4.97% (935,428 voting rights) on this date. 4.97% of the voting rights (935,428 voting rights) are attributable to the company through ING Parasol Fundusz Inwestycyjny Otwarty in accordance with section 22(1) sentence 1 no. 6 WpHG.
2. In accordance with section 21(1) WpHG, ING Parasol Fundusz Inwestycyjny Otwarty, Warsaw, Poland, notified us on 21 December 2012 that its share in the voting rights of bmp media investors AG, Berlin, Germany, fell below the threshold of 5% of voting rights on 12 December 2012 and amounted to 4.97% (935,428 voting rights) on this date.
Responsibility statement
To the best of our knowledge, and in accordance with the applicable reporting principles for financial reporting, the annual financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the company, and the management report of the company includes a fair review of the development and performance of the business and the position of the company, together with a description of the principal opportunities and risks associated with the expected development of the company.
| Shareholdings of bmp media investors AG as at 31 December 2012 | ||||||
|---|---|---|---|---|---|---|
| Companies in which the company has a direct or indirect investment within the meaning of section 285 no. 11 HGB: | ||||||
| Subsidiaries: | ||||||
| Name | Share in % | Equity at 31 December 2011 | Annual result 2011 | |||
| T€ | T€ | |||||
| GreenHanger GmbH, Berlin | 49.97% | -991 | -40 | |||
| Xamine GmbH, Munich | 49.42% | 23 | -193 | |||
| Self Loading Content GmbH, Berlin | 43.91% | 741 | -637 | |||
| Revotar Biopharmaceuticals AG, Henningsdorf | 37.94% | 1,726 | -2,347 | |||
| brand eins Medien AG, Hamburg | 35.36% | 342 | 269 | |||
| Iteelabs Sp z o.o., Warsaw/Poland | 30.14% | n.a. | n.a. | |||
| Instream Media Sp. z o.o., Posen/Poland | 25.37% | TPLN 238 | TPLN -54 | |||
| Retresco GmbH, Berlin | 25.05% | 1 | -30 | |||
| vertical techmedia AG, Munich | 22.50% | 140 | 39 | |||
| Castaclip GmbH, Potsdam | 21.36% | -687 | -573 | |||
| Ubertweek GmbH | 20.03% | 177 | (1) | -434 | (1) | |
| 1) Balance sheet data as at 31 December 2012 | ||||||
| n.a.= not available |
Berlin, March 28, 2013
Oliver Borrmann
Executive Board
Jens Spyrka
Executive Board
The accounts of bmp media investors AG drawn up in the German language were audited by the auditing firm Verhülsdonk & Partner GmbH and endorsed with an unqualified audit certificate in April 2013.
This English translation of our Annual Report was prepared to the best of our knowledge and belief, but it has not been certificated. The German version of the Annual Report is the authoritative version.
The Management Board
Annual Declaration of Compliance in accordance with Section 161 of the AktG
The Executive Board and the Supervisory Board of bmp media investors AG are obligated to submit an annual declaration regarding the extent to which the Company followed the recommendations of the current version of the German Corporate Governance Code (the “Code”) in the reporting period and will follow them in future (declaration of compliance). On 4 March 2013, the Executive Board and Supervisory Board resolved the following declaration of compliance in accordance with Section 161 of the AktG:
The Executive Board and Supervisory Board of bmp media investors AG declare that bmp media investors AG
1. followed the recommendations of the Code in the version dated 26 May 2010, as published in the electronic Federal Gazette on 2 July 2010, for the period from 1 January 2012 to 15 June 2012, barring the exceptions named in its last declaration of compliance of 13 February 2012.
2. followed the recommendations of the Code in the version dated 15 May 2012, as published in the Federal Gazette on 15 June 2012, for the period from 15 June 2012 and will follow them, barring the following exceptions:
Electronic delivery of documentation announcing the convening of the General Stockholders‘ Meeting (Section 2.3.2)
All domestic and international financial services providers, shareholders and shareholders‘ associations are to be notified of the convening of the General Stockholders‘ Meeting by electronic means, including all related documentation, providing that the approval requirements are met. bmp media investors AG has bearer shares and therefore does not know its shareholders or their e-mail addresses. For this reason, it cannot guarantee that the documentation announcing the convening of the General Stockholders‘ Meeting is actually delivered to all domestic and international financial services providers, shareholders and shareholders‘ associations by electronic means. In addition, there are legal uncertainties, especially owing to Section 30 b (3) of the German Securities Trading Act (WpHG). Here, it is stipulated that in the case of transferral of information by means of telecommunications, shareholders be securely identified and addressed to (Section 30 b (3) WpHG No. 1 lit. c) – bmp media investors AG believes that this cannot be ensured. In addition, the consent of all shareholders to electronic data transfer is required (Section 30 b (3) WpHG No. 1 lit. d). Legal uncertainties result from this as well if, for example, explicit consent is not given or is negated. The recommendation was not and will not be followed.
D&O insurance deductibles (Section 3.8)
If the company obtains D&O insurance on behalf of Supervisory Board members, the Code recommends a deductible equal to the legally prescribed deductible for members of the Executive Board in accordance with Section 93 (2) sentence 3 AktG. bmp media investors AG considers the measure neither suitable for increasing the motivation and sense of responsibility of the members of the Supervisory Board nor appropriate in view of the level of Supervisory Board remuneration. The recommendation was not and will not be followed.
Diversity in filling managerial positions (Section 4.1.5)
The Code recommends that diversity be ensured when filling managerial positions in the company, particularly with regard to appropriate consideration of women. bmp media investors AG employs only one person. The recommendation was not and will not be followed.
Composition of the Executive Board (Section 4.2.1)/Diversity in the filling of Executive Board positions (Section 5.1.2)
The Code recommends that the Executive Board be composed of several persons and have a Chairman or Spokesman. In addition, rules of procedure are to govern the allocation of duties. However, the Executive Board of bmp media investors AG is composed of only two members, who have the same areas of responsibility. As a result, the recommendation is impracticable. Therefore, it was not and will not be followed.
Furthermore, the Supervisory Board is to ensure diversity in the composition of the Executive Board, particularly with regard to appropriate consideration of women. In view of the size of the Executive Board, the Supervisory Board does not consider it sensible to have selection criteria other than the characteristics “expertise” and “competence”. Therefore, the recommendation was not and will not be followed.
Compensation of the Executive Board (Section 4.2.2 - 4.2.5)
The Code formulates various recommendations on the structuring of Executive Board remuneration and its publication in a remuneration report. However, bmp media investors AG has not concluded any employment contracts with the Executive Board members and also pays no Executive Board remuneration to be reported. In business year 2012, the Executive Board members were paid only a bonus, to which they were entitled from their employment contracts that were terminated as of 30 June 2011. Therefore, the recommendations in Section 4.2.2 - 4.2.5 of the Code do not apply.
Formation of committees (Sections 4.2.2, 5.2, 5.3.1, 5.3.2, 5.3.3)
The Code recommends that the Supervisory Board form committees with sufficient experience, depending on the specific of the enterprise and the number of its members, and gives recommendations on these at several points. However, in view of the company’s size, the Supervisory Board of bmp media investors AG consisted and consists of only three members, for which reason committees were and will not be formed. Therefore, the above recommendations were not and will not be followed.
Composition of the Supervisory Board (Section 5.4.1 - 5.4.2)
The Code recommends that the Supervisory Board establish specific targets with regard to its composition, taking into account the international activities of the company, potential conflicts of interest, the number of independent Supervisory Board members within the meaning of Section 5.4.2, an age limit for Supervisory Board members (to be defined) and diversity in light of the company‘s specific situation. The targets should be taken into consideration by the Supervisory Board when making candidate recommendations to its selection committees and – along with the status of their implementation – are to be published in the Corporate Governance Report. In view of the company’s size, the Supervisory Board of bmp media investors AG consists of only three members. For this reason, the Supervisory Board also considers it unsuitable to use selection criteria other than those of “expertise” and “competence” when filling positions in the Supervisory Board. Accordingly, it has not and will not set itself any targets in this regard. This also applies to the number of independent Supervisory Board members within the meaning of Section 5.4.2 of the Code. Accordingly, the recommendations to take into account any targets when making proposals to the selection committees and to report these and the status of their implementation within the framework of the Corporate Governance Code likewise were not and will not be followed.
In its election recommendations to the General Stockholders’ Meeting, the Supervisory Board should disclose the personal and business relations of each individual candidate with the enterprise, the executive bodies of the company and with a shareholder holding a material interest in the company. bmp media investors AG considers this newly formulated recommendation of the Code to be vague and unclear in its delimitation. In the interests of the legal security of future elections to the Supervisory Board, the Executive Board and Supervisory Board of bmp media investors AG have resolved to declare a deviation from this recommendation.
Proposed candidates for the Supervisory Board chair during Supervisory Board elections (Section. 5.4.3)
Proposed candidates for Supervisory Board chair shall be announced to the shareholders. However, such an announcement requires that the proposed candidate previously be elected as a member of the Supervisory Board by the General Stockholders‘ Meeting. Only afterwards shall a decision be made on the election of the Chairman of the Supervisory Board. This is to take place in accordance with Section 11 (1) of the Articles of Association of bmp media investors AG in connection with Section 107 (1) AktG in the first meeting of the Supervisory Board after its election and in the form that the then new Supervisory Board elects the Chairman and the Vice-Chairman from among its own members. This predefinition of proposed candidates for the position of Chairman of the Supervisory Board constitutes a restriction of the right of the Supervisory Board to decide freely on the matter. Therefore, the recommendation was not and will not be followed.
Compensation of the Supervisory Board (Section 5.4.6)
If the members of the Supervisory Board are promised performance-based compensation, this is to be oriented towards sustainable growth of the enterprise. In accordance with the resolution of the General Stockholders‘ Meeting of 9 July 2008, the Supervisory Board of bmp media investors AG receives both fixed compensation and performance-based compensation at present. - The latter is not directed towards sustainable growth of the enterprise and thus no longer corresponds to the recommendation of the current version of the Code. . Therefore, the management will present to the 2013 General Stockholders‘ Meeting a resolution proposal for revised Supervisory Board compensation that corresponds to the recommendations of the Code in the version dated 15 May 2012.
Publication of financial reports (Section 7.1.2)
Contrary to the recommendation of the Code, the annual financial statements are made publicly available within four months after the end of the business year and the interim reports within two months after the end of the respective reporting period, since the costs of faster preparation and publication are disproportionate to the level of information gained by the shareholders.
Berlin, 4 March 2013
For the Supervisory Board:
Gerd Schmitz-Morkramer
Executive Board:
Oliver Borrmann
Jens Spyrka
Report of the Supervisory Board
Dear shareholders,
The Supervisory Board of bmp media investors AG responsibly and carefully fulfilled the duties incumbent upon it in accordance with the law and the Articles of Association in the past business year as well. Numerous measures and transactions require the approval of the Supervisory Board before implementation, as stipulated by law or the rules of procedure for the Executive Board. These include the approval of the annual financial statements, the annual business plan including the investment and disinvestment planning, but also conclusions of contracts of particular importance for the company. The Executive Board supplied us with comprehensive information in advance on all pending resolutions so that we could examine these properly before our approval and discuss them intensively, both with and without the Executive Board.
In business year 2012, we had four meetings in person. At the meetings, we were comprehensively informed by the Executive Board about the current situation of the company, the status of the portfolio companies as well as about strategic considerations.
Since our Supervisory Board consists of only three members, we have refrained from forming committees. For this reason, personnel matters concerning the Executive Board as well as issues relating to the risk situation and risk management, compliance and accounting are dealt with in the meetings of the entire body.
We discuss the financial reports with the Executive Board before their publication – whether in a meeting in person or in a telephone conference.
Moreover, apart from the Supervisory Board meetings, we conducted strategy meetings together with the Executive Board both in February and in October 2012.
In the past business year, all of the members of the Supervisory Board attended all meetings and telephone conferences.
In months in which we do not hold a meeting or telephone conference to discuss a financial report, we receive a written report from the Executive Board on the current status. This report contains information about the current situation at the portfolio companies, planned new investments, IR and PR measures and, if appropriate, about the status of strategic projects. In addition, we receive a liquidity status report each month.
In view of the manageable size of the Executive Board and the Supervisory Board, it is also possible for us to engage in dialogue concerning unforeseeable events by telephone and/or e-mail at any time and at short notice. The Supervisory Board does this on a regular basis and – if necessary or conducive to the matter – without the Executive Board.
Overall, the Executive Board always provides us with us comprehensive information, doing so in good time with a view to the preparation of our meetings. We are thus always able to examine all planned and implemented measures with regard to their legality, proper order, expediency and economic efficiency.
We can fulfill our duties efficiently and in full at all times. Nevertheless, we review the efficiency of our work on a regular basis in order to discover and correct any weak points quickly. After considering the costs and any benefits, we have deliberately chosen not to bring in an external consultant to evaluate the efficiency of our activities.
Focus of the discussions
Along with the previously named, regularly recurring topics, individual issues of particular relevance for the company also emerged in the past business year. We devoted ourselves to each of these to a special degree over a longer period of time, both within and outside the Supervisory Board meetings.
These topics included the investment in Revotar AG. In late autumn 2011, it had already become apparent that the company would require further financing depending on milestones in February 2012. For this reason, it was necessary to receive regular, comprehensive and detailed information about the portfolio company – both from our Executive Board and from the Revotar management directly. We also informed ourselves about any exit possibilities and the likelihood of their occurrence in order to take this into account when analysing the opportunities and risks of further follow-up financing. After considering all aspects comprehensively, we approved a further investment in Revotar AG in February 2012.
Following the conclusion of the round of financing, we continued to receive regular and comprehensive information about the status and the most recent developments at Revotar AG. This also applies to all other investments in the portfolio. We considered it especially pleasing that as planned, bmp media investors AG carried out five new investments in business year 2012 and that it sold its shares in newtron AG to an affiliated company of Liechtensteinische Post at the end of the year.
We were also occupied to a special degree with the shares held by bmp media investors AG in bmp Beteiligungsmanagement AG.
In the summer of 2011, bmp had restructured with the objective of positioning itself as purely a venture capital company in the area of media & marketing services and carrying out the final discontinuation of fund and management company. Consequently, bmp media investors AG disposed of further shares in bmp Beteiligungsmanagement AG in the course of business year 2012. Along with sales on the stock exchange, the disposal took place partly as part of a share buyback programme that bmp Beteiligungsmanagement AG implemented in December 2012. In addition, bmp media investors AG sold 35,000 shares held by it in bmp Beteiligungsmanagement AG to Cavy Capital GmbH - whose sole owner is the Executive Board member Oliver Borrmann - 25,575 shares to Executive Board member Jens Spyrka, and 25,575 shares to FAB asseT GmbH, solely owned by former Executive Board member Andreas van Bon, who resigned as of 30 June 2011. The sale price of € 4.00/share was identical to the offering price, which had been set in the framework of the share buyback programme of bmp Beteiligungsmanagement AG – in accordance with the conditions of the resolution to authorise the buyback of treasury shares passed by the General Stockholders’ Meeting of the company – which took place at the same time.
We also regularly discussed the price of the bmp share and opportunities to increase this – as well as liquidity in the share - sustainably. In view of the not yet fully completed restructuring, bmp media investors AG had been considerably restrained with IR and PR activities until 2012. However, since the summer of 2011 it had already been a stated aim of both the Executive Board and the Supervisory Board to increase the activities significantly again in the interests of the shareholders. For this reason, in business year 2012 we conducted two strategy meetings together with the Executive Board. These meetings focused on the question of how the bmp share can be developed into an attractive investment again.
Moreover, in the meeting of 18 April 2012 we dealt with the annual financial statements and the consolidated financial statements 2011, both of which were given an unqualified audit certificate by the auditor. In this connection, risk management and control matters were also discussed. The Executive Board had delivered to us the documents necessary for our preparation for the meeting namely the financial reports and the audit reports of the auditor – in advance and in good time.
Furthermore, at the meeting we also approved the Supervisory Board’s report on the annual financial statements 2011. In addition, we dealt with the agenda for the General Stockholders’ Meeting 2012, including the resolutions proposed by the management. Our discussions also included aspects of the principles of good corporate governance.
The meeting on 13 June 2012 was held immediately after the General Stockholders’ Meeting of bmp media investors AG. At this meeting, Mr. Michael Stammler had been elected to the Supervisory Board as successor to Mr. Ulrich Ankele, who had previously resigned his mandate with effect as of the conclusion of the General Stockholders’ Meeting 2012. As well as the election of the Chairman of the Supervisory Board and the Vice-Chairman, the meeting focused on the presentation of the equity investments, their respective status and their development.
We used the occasion of the meeting on 29 August 2012 to discuss the Half Year Results 2012 in detail with the Executive Board. In this connection, we also discussed what level of liquidity reserves it was sensible for the company to have available. Moreover, the Executive Board comprehensively presented the new investments that bmp media investors AG had entered into in the course of the second and third quarters.
The content of our meeting on 3 December 2012 focused on the annual business plan for 2013. On the basis of basic assumptions regarding the further development of all investments, the Executive Board explained in particular the further investments requirements as well as the anticipated value development of the company in business year 2013. The planning of new investments as well as exits was also discussed.
Corporate governance
In business year 2012, we concerned ourselves with the standards of good corporate governance and their further development on several occasions and in various contexts.
In February 2012, we had initially approved the annual declaration in accordance with Section 161 AktG for business year 2011, based on the recommendations of the Government Commission on the German Corporate Governance Code in the version dated 26 May 2010. In advance of the General Stockholders’ Meeting 2012, we then dealt extensively with the topic of Supervisory Board remuneration. This was due to a development of the corresponding recommendation of the Code that was already foreseeable in the spring. At the time of the convening of the General Stockholders’ Meeting 2012, the new version of the Corporate Governance Code had not yet been approved. Therefore, together with the Executive Board we resolved first to present the General Stockholders’ Meeting 2013 with a resolution proposal for new Supervisory Board remuneration which would then follow the recommendations of the Code at all events.
We also discussed intensively the recommendations of the Code on the composition of the Supervisory Board and the formulation of targets for the composition of the Supervisory Board. We consider the only guarantee for efficient collaboration in the Supervisory Board and for professional fulfilment of duties as a member of the Supervisory Board to be the criteria “competence” and “expertise”. It is undoubtedly sensible to take into account all other criteria for the preservation of diversity in the Supervisory Board named in the recommendations of the Code as well when selecting suitable candidates for the Supervisory Board. However, we do not consider the formulation of targets in this regard to be conducive to the matter. The Executive Board and the Supervisory Board made the relevant statement in their jointly approved declaration in accordance with Section 161 AktG for business year 2012. The declarations in accordance with Section 161 AktG have been made permanently available on our company website, www.mediainvestors.com, in the Investor Relations section. This also applies to the Corporate Governance Report.
Due to our parallel listing on the regulated market of the Warsaw Stock Exchange, bmp media investors AG also observes the principles of good corporate governance, as set out in the “Code of Best Practice for Companies Listed on the Warsaw Stock Exchange” (Dobre Praktyki Spólek Notowanych na GPW). The Executive Board also declares its compliance with these principles at least once a year. Moreover, it submits a comprehensive report at the same time as the annual financial statements are published. Both documents are also published on our company website.
Conflicts of interest
As already reported, follow-up financing took place at the investment Revotar AG in February 2012 as part of which a new shareholder agreement as well as a new participation agreement were also concluded. Executive Board member Oliver Borrmann was personally at the company at the time and thus was also involved in the corresponding agreement conclusion.
Furthermore, in December 2012 the company sold 35,000 shares in bmp Beteiligungsmanagement AG to Cavy Capital GmbH - whose sole owner is the Executive Board member Oliver Borrmann - 25,575 shares to Executive Board member Jens Spyrka, and 25,575 shares to FAB asseT GmbH, solely owned by former Executive Board member Andreas van Bon, who resigned as of 30 June 2011, all at € 4.00/share.
We had approved both measures in advance. Moreover, the Chairman of the Supervisory Board was authorised to represent the company towards the members of the Executive Board in accordance with Section 112 AktG in each case.
Conflicts of interest of Supervisory Board members were not notified in business year 2012.
Audit of the annual financial statements 2012
bmp media investors AG prepares its separate financial statements taking account of the provisions of the German Securities Trading Act in accordance with national accounting standards (HGB, German Commercial Code) as well as in accordance with the principles of the International Financial Reporting Standards, the application of which is mandatory in the EU. The Executive Board is responsible for the preparation of the financial statements.
The annual financial statements according to HGB and the Management Report as at 31 December 2012 were properly audited by VERHÜLSDONK & Partner GmbH, Berlin. The auditor focused particularly on the carrying value of the equity interests, changes in the investment portfolio and the review of revenue realisation. The auditor gave the annual financial statements 2012 an unqualified audit certificate.
At our Supervisory Board meeting on 22 April 2013, we dealt in detail with the annual financial statements, the Management Report and the auditor‘s audit report. To enable us to obtain an independent picture, the Executive Board had delivered to us the necessary documents in due time in advance of the meeting. The meeting was also attended by the representatives of the auditor, Verhülsdonk & Partner GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Berlin, who reported to us comprehensively about the focus, the progress and result of the audit. Together with the Executive Board and the auditor, we discussed the financial statements extensively. Our own review of the financial statements did not give rise to any objections. Thus, we agreed with the findings of the auditor and approved the financial statements prepared as at 31 December 2012. The annual financial statements were therefore approved.
Personnel matters of the Supervisory Board
Supervisory Board member Ulrich Ankele resigned from the Supervisory Board for personal reasons with effect as of the conclusion of the General Stockholders’ Meeting on 13 June 2012. Subsequently, the Supervisory Board elected Mr. Michael Stammler as the new member of the Supervisory Board with effect from the end of the General Stockholders’ Meeting on 13 June 2012 until the conclusion of the General Stockholders’ Meeting that decides on formal approval of the Board members’ actions for business year 2012.
We extend our warm thanks to Mr. Ankele for his many years of committed collaboration in our Supervisory Board.
We would also like to thank the members of the Executive Board and our employees for their good and trusting collaboration and their commitment on behalf of the company.
Berlin, 22 April 2013
Gerd Schmitz-Morkramer
Chairman of the Supervisory Board