SLEEPZ AG — Annual Report 2013

Jul 17, 2014

bmp media investors AG

Berlin

Jahresabschluss zum Geschäftsjahr vom 01.01.2013 bis zum 31.12.2013

Annual Report 2013

MANAGEMENT REPORT FOR THE 2013 FINANCIAL YEAR

Business year 2013 progressed well for bmp media investors AG.

In 2013, three new investments were made, including department one GmbH, ferret go GmbH and komoot GmbH. The investment in MBR Targeting GmbH was sold to Ströer Digital Group GmbH in October 2013.

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 for these items, the cost structure is as follows:

scroll

T€	2013
Outside services	25
Costs of Annual General Meeting	44
Insurance, premiums and levies	49
Advertising, travel and stock market expenses	174
Costs of fund management	563
Supervisory Board costs	49
Costs of financial statements and audits	67
Legal and consulting costs	11
Miscellaneous operating costs	69
Total	1,051

Therefore the cost base is on the level of the previous year. the slight increase is attributable to increased expenditure in the area of investor relations.

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.

scroll

	2013	2012
Investments and loans (incl. listed securities)	93.82%	72.13%
Bank balances	5.28%	23.19%
Other	0.90%	4.68%
Total	100.00%	100.00%

By contrast, the equity and liabilities side predominantly consists of equity.

scroll

	2013	2012
Shareholders’ equity	98.71%	92.43%
Liabilities to banks	0.00%	5.69%
Other liabilities	1.29%	1.88%
Total	100.00%	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 reflect 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 and marketable securities amounted to T€ 1,034 in 2013 (previous year: T€ 1,252), depreciations on investments and marketable securities was T€ 1,099 (previous year: T€ 1,626).

In the 2013 financial year, bmp media investors AG generated a HGB result of T€ -497.7 (previous year: T€ -1,307.0). Equity declined from € 15.8 million to € 15.3 million and rose from 92.43% to currently 98.71% of total assets.

As at 31 December 2013, cash in hand and bank balances were down around € 3.2 million on the previous year’s level at € 0.8 million. Short-term, stock-market listed securities declined slightly to € 2.7 million as at 31 December 2013 (previous year: € 3.0 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 (2013 annual report) from the German Private Equity and Venture Capital Association (BVK Bundesverband Deutscher Kapitalbeteiligungsgesellschaften e.V.), with its positive development in 2013 the venture capital segment stood out from the overall weaker investment market. This meant that the venture capital financing transactions, which were already strong in the first half of 2013, continued to be successful.

At € 0.67 billion, the venture capital investments exceeded the previous year’s result (€ 0.57 billion) by 19%, with almost all sub-areas (seed, start-up and later stage investments) posting gains on 2012. However, at 723 the number of companies funded was not quite reached (780). Overall, the number of companies funded with venture capital accounted for 56% of all companies funded in 2013. By contrast, the total investment volume in the area of private equity decreased in 2013, after three successive years of increased investments since 2010 (down 29% on 2012 to € 4.68 billion).

Nevertheless, these figures clearly show the central role played by investment capital in this country in the financing of what are mainly small and medium-sized enterprises. Only 8% of the companies funded over the course of the year had more than 200 employees and only 9% generated revenue of over € 50 million, according to the BVK.

While 2012 was relatively restrained with regard to exit activities, investment sales picked up considerably in 2013, according to data from the BVK. The volume of investment sales reached € 5.73 billion, which represents an increase of almost 50% on the previous year (€ 3.88 billion). The increase was primarily due to a significant rise in trade sales and sales to other investment companies. While trade sales made up a volume of € 861 million in 2012, they accounted for € 1.35 billion in 2013.

With divestments up 20% on 2012, the sub-area of venture capital did not quite match the strong upturn in the overall market. Trade sales were the most prevalent exit route here too, accounting for 39% of the total volume. It is positive to note that the volume of total losses in the venture capital segment declined further in 2013 as well (from € 183 million in 2012 to € 134 million in 2013).

The BVK believes that the hopeful economic outlook for 2014 should give the investment market in Germany some momentum. The optimism in the industry is underscored by both the results of the latest Private Equity Barometer, the sentiment indicator for the investment market jointly developed by the BVK and KfW, and the “Private Equity Forecast 2014”, a survey of BVK members on their projections for fundraising, investments and investment sales this year.

The Executive Board of bmp media investors AG anticipates a good market environment for the venture capital industry for the course of 2014. 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 well positioned with its focus here and should profit from its defined profile in 2014.

Business performance

Venture capital direct investments

The number of equity investments in the portfolio increased from 16 to 18.

All of the investments come from the two markets that are relevant to bmp, namely Germany and Poland. Three new investments were entered into via bmp media investors AG, namely department one GmbH, ferret go GmbH and komoot GmbH. At the same time, there was one disposal from the portfolio: MBR Targeting GmbH was sold in full via a trade sale.

Total investments in the area of venture capital direct investments amounted to € 3.6 million in business year 2013. Follow-up investments were made in some existing investments in addition to the three 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€ -497.7 for the 2013 financial year. Earnings thus improved compared with the previous year, in which there was a net loss of T€ -1,317.0. Revenue from the sale of equity investments and securities amounted to T€ 1,034 (previous year T€: 1,252), income from consulting and commissions amounted to T€ 712 as in the previous year. The other operating income increased from T€ 555 to T€ 1,126, primarily resulting from T€ 584 (previous year: T€ 0) from a release from liabilities granted by KfW-Bankgruppe and T€ 508 (previous year T€ 33) resulting from reversal of write-downs on financial assets.

At € 64 thousand, personnel expenses were at the same level as the previous year (€ 64 thousand). Other operating expenses went up from T€ 1,784 to € T€ 1,959.

Write-downs on financial assets and securities declined from T€ 1,626 to T€ 1,099.

The return on equity, measured as net result for the financial year in relation to average equity, was -3.20%.

Asset and capital structure

Fixed assets mainly include the shares in investment companies and loans to these companies. At T€ 11,895, they account for 99.9% of fixed assets. Current assets fell by 53.3% from T€ 7,751 to T€ 3,620. Cash in hand and bank balances amounted to T€ 819 at the end of the 2013 financial year after T€ 3,969 in 2012. Total assets declined from €17.1 million to €15.5 million.

Equity decreased by 3.2% from € 15.8 million to € 15.3 million. Liabilities declined from T€ 1,295 to T€ 201. By contrast, the equity ratio moved up from 92.4% to 98.7%.

Liquidity

Marketable securities and cash equivalents were € 4.5 million at the end of the year (previous year: € 6.8 million).

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 and securities (reported under current assets) together represent around 55% 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 € 1.6 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

The liabilities do not present any risks of changes in interest rates. Variable interest rates are assessed on all current money investments.

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.

Risks resulting from changes to legal conditions

With the introduction of the German Capital Investment Code (Kapitalanlagegesetzbuch – KAGB), the private equity industry is now also subject to extensive regulations. There is the risk that new obligations in relation to the acquisition and possession of investments may increase the costs associated with the transfer of shares and the costs of managing the company.

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 2013 annual financial statements. Activities in the area of risk management were expanded further in 2013.

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 it to meet all its obligations. The implementation of capital measures is required to expand the 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 remuneration has been paid to the Executive Board by the company.

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.

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 € 18,819,250.00 as at the balance sheet date. It is divided into 18,819,250 no-par value bearer shares. All shares are vested with the 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 € 9,409,625 by issuing new bearer shares against cash or non-cash contributions until 12 June 2018, and in doing so stipulate the terms for issuing shares. Furthermore the management board is allowed to buy back up to 1.75 million own shares provided consent is given by the supervisory board.

No further disclosures are required under section 289 (4) of the German Commercial Code (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

In February 2014, the company resolved to complete a cash capital increase by 1,881,924 shares at € 1 per share. The capital increase was entered in the Commercial Register on 3 March 2014.

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 2013, we confirmed our solid investment activity from the previous year with three new investments in media and marketing services companies. We expect at least three new investments for 2014 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 2014 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. Sales revenue resulting from the mandate of BFB Frühphasenfonds equals costs in the same amount.

Given our cost structure of around € 1.0 to 1.1 million per annum, we need income from the investment portfolio at this level, in order to calculate a balanced net result.

However, given a series of promising investments, we expect to work profitably in 2014. A precondition for this is a stable market environment on the one hand, profitable exits as well as a constant valuation basis for the existing investments 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, 2014

Oliver Borrmann

Jens Spyrka

Balance Sheet as of 31 December 2013

Assets

scroll

	EUR	EUR	EUR	31.12.2012 TEUR
A. Fixed assets
I. Intangible assets
Concessions, industrial property rights
and similar rights		6.148,30		9
II. Financial assets
1. Investments	10.816.419,69			9.026
2. Loans to investee companies	1.078.281,15	11.894.700,84	11.900.849,14	323
B. Current assets
I. Accounts receivable and other
assets
1. Trade accounts
receivable	399,00			78
2. Receivables from investee
companies	31.041,74			20
3. Other assets	100.593,07	132.033,81		688
II. Securities
Other securities		2.668.239,17		2.995
III. Cash on banks and cash on hand		819.254,03	3.619.527,01	3.969
C. Prepaid expenses			1.434,98	5
			15.521.811,13	17.113

Liabilities

scroll

	EUR	EUR	31.12.2012 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	-6.157.584,55	15.321.004,05	-5.660
B. Provisions
Other provisions		168.505,60	142
C. Liabilities
1. Liabilities to banks	0,00		973
2. Trade accounts
payable	27.794,64		38
3. Other liablilities	4.506,84	32.301,48	141
thereof from taxes: 4,506.84 EUR
(previous year: 1 TEUR)
		15.521.811,13	17.113

Berlin, 28 March 2014

Profit & Loss Statement For the Period 1 January - 31 December 2013

scroll

		EUR	01.01.-31.12.12 TEUR
1. Sales revenue
a) Income from disposal of investments and marketable securities	1.033.889,86		1.252
b) Income from consulting and commissions	712.000,00	1.745.889,86	712
2. Other operating income		1.126.423,94	555
3. Reduction in book value of investments and marketable securities		-427.907,16	-541
4. Staff costs
a) Wages and salaries	-51.660,00		-53
b) Social security contributions and costs for pensions and support	-11.945,52	-63.605,52	-11
5. Depreciations
a) Depreciation on intangible and tangible fixed assets		-2.418,73	-2
6. Other operating expenses		-1.958.920,82	-1.784
7. Income from investments		9.949,94	54
- thereof from affiliated companies:
9,949.94 EUR (previous year: 54 TEUR)
8. Interest and similiar income		186.375,95	195
- thereof from affiliated companies:
0 EUR (previous year: 42 TEUR)
9. Depreciations on investments and marketable securities		-1.098.910,21	-1.626
10. Interest and similiar expenses		-14.580,41	-68
11. Result from ordinary aktivities		-497.703,16	-1.317
12. Other taxes		0,00	0
13. Net year loss		-497.703,16	-1.317
14. Loss carried forward from previous year		-5.659.881,39	-4.343
15. Accumulated net loss		-6.157.584,55	-5.660

Cash Flow Statement for the Period from 1 January to 31 December 2013

scroll

		2013	2012
	EUR	EUR	TEUR
Loss for the year		-497.703,16	-1.317
+ Depreciations on financial assets		1.098.910,21	1.626
- Appreciations on financial assets and marketable securities		-507.873,80	-33
+ Depreciations on tangible and intangible assets		2.418,73	2
- Profit from disposal of financial assets		-481.495,46	-705
- Profit from release of liability KFW		-584.098,98	0
		-969.842,46	-427
-/+ Decrease/(-) increase in trade accounts receivables and other assets	658.812,09		282
+/- Decrease/(-) increase in in short-term privisions	26.727,51		-61
+/- Decrease/(-) increase in in trade accounts payable and other liablilities	-147.163,24	538.376,36	-235
Cash Flow from Operations		-431.466,10	-441
- Investments in other intangible and tangible assets		0,00	0
+/- Shares in affiliated companies		0,00	503
- Loans to investee companies		-1.824.743,22	-272
- Investments in holdings and securities		-2.040.378,46	-2.324
+ Cash-in from disposal of financial assets		1.536.164,82	1.240
+ Disposals of intagible and tangible assets at net book value		0,00	0
Cash-Flow from Investments		-2.328.956,86	-853
- Capital increase		0,00	0
- Refund of refinancing loan		-389.399,32	-243
Cash Flow from Financing		-389.399,32	-243
Overall, the liquid funds has developed as followed:
Cash Flow from Operations		-431.466,10	-441
Cash-Flow from Investments		-2.328.956,86	-853
Cash Flow from Financing		-389.399,32	-243
Change in liquid funds		-3.149.822,28	-1.537
+ Liquid funds at the beginning of business year		3.969.076,31	5.506
\= Liquid funds at the end of business year		819.254,03	3.969

Statement of Changes in Equity as at 31 December 2013

scroll

	Subscribed Capital EUR	Capital reserves EUR	Loss/profit carried forward from previous year EUR	Total EUR
Shareholders` equity as of 1 January 2013	18.819.250,00	2.659.338,60	-5.659.881,39	15.818.707,21
Net year result			-497.703,16	-497.703,16
Shareholders` equity as of 31 December 2013	18.819.250,00	2.659.338,60	-6.157.584,55	15.321.004,05
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

Statement of Fixed Assets for Business Year 2013

scroll

				Historical Costs
	01.01.2013 EUR	Additions EUR	Disposals EUR	Transfers EUR	31.12.2013 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. Investments	16.398.180,14	1.754.826,48	150.348,68	765.000,00	18.767.657,94
2. Loans to investee companies	322.500,00	1.824.743,22	292.159,87	-765.000,00	1.090.083,35
3. Securities of non-current assets	0,00	0,00	0,00	0,00	0,00
	16.720.680,14	3.579.569,70	442.508,55	0,00	19.857.741,29
Total fixed assets	16.737.072,42	3.579.569,70	442.508,55	0,00	19.874.133,57

scroll

					Accumulated depreciations
	01.01.2013 EUR	Additions EUR	Disposals EUR	Appreciation EUR	Transfers EUR	31.12.2013 EUR
---	---	---	---	---	---	---
I. Intangible assets
1. Concessions, licences and similar goodwill	7.825,25	2.418,73	0,00	0,00	0,00	10.243,98
	7.825,25	2.418,73	0,00	0,00	0,00	10.243,98
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. Investments	7.372.004,04	1.087.108,01	0,00	507.873,80	0,00	7.951.238,25
2. Loans to investee companies	0,00	11.802,20	0,00	0,00	0,00	11.802,20
3. Securities of non-current assets	0,00	0,00	0,00	0,00	0,00	0,00
	7.372.004,04	1.098.910,21	0,00	507.873,80	0,00	7.963.040,45
Total fixed assets	7.379.829,29	1.101.328,94	0,00	507.873,80	0,00	7.973.284,43

scroll

		Book Values
	31.12.2013 EUR	31.12.2012 EUR
---	---	---
I. Intangible assets
1. Concessions, licences and similar goodwill	6.148,30	8.567,03
	6.148,30	8.567,03
II. Tangible assets
1. Other plant, factory and office equipment	0,00	0,00
	0,00	0,00
III. Financial assets
1. Investments	10.816.419,69	9.026.176,10
2. Loans to investee companies	1.078.281,15	322.500,00
3. Securities of non-current assets	0,00	0,00
	11.894.700,84	9.348.676,10
Total fixed assets	11.900.849,14	9.357.243,13

NOTES TO THE ANNUAL FINANCIAL STATEMENTS AS AT 31 DECEMBER 2013

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 revenue

Income from the disposal of investments and securities is reported as sales revenue 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:

scroll

T€
Equity investments	18,768
Write-downs	-7,951
Total	10,817

Receivables and other assets

From receivables and other assets T€ 125 are due within one year and T€ 7 in the year 2015.

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

In the shareholders’ meeting on 13 June 2013 the removal of the existing authorised capital and the establishment of new authorised capital was concluded.

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 € 9,409,625 by issuing new bearer shares against cash or non-cash contributions (Authorised Capital 2013/I) until 12 June 2018, 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) for emission to strategic partners,

d) 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€ 76), outstanding invoices (T€ 29), profit shares resulting from an investment consultancy agreement (T€ 22) and Other (T€ 38)

Liabilities

Total liabilities as at 31 December 2013 are broken down by remaining term as follows:

scroll

	Remaining term
	Less than 1 year T€	1 to 5 years T€	More than 5 years T€	Total T€
---	---	---	---	---
Liabilities to banks	28	0	0	28
Other liabilities	5	0	0	5
Total	33	0	0	33

Total liabilities as at 31 December 2012 are broken down by remaining term as follows:

scroll

	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	0 141	0 0	0 0	0 141
Other liabilities	1
Total	1,153	0	0	1,153

Sales revenue

Sales revenue include income from disposal of securities (T€ 1,034) and income from consulting and commission (T€ 712).

Other operating income

Other operating income include income from the reversal of write-downs on financial assets (T€ 508) and profit from release of liability to KfW-Bankengruppe (T€ 584).

Write-downs

In the financial year, financial assets were written down to lower fair value in the amount of T€ 1,099 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 including VAT) were recognised as expenses in the 2013 financial year:

scroll

in T€
Fee for financial statements and audits	52
Tax advisory fees	12
Other services	3
Total	67

Information on the executive bodies of the company

Executive Board

The members of the Executive Board of bmp media investors AG in the 2013 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 remuneration since 1 July 2011.

Other offices held by the Executive Board

Mr. Borrmann is on the Supervisory Board of the following companies:

scroll

brand eins Medien AG (Chairman)	year-round
Revotar Biopharmaceuticals AG (Chairman)	year-round
Heliocentris Energy Solutions AG (Chairman)	year-round
YOC AG	until 06 June 2013

In addition, as at 31 December 2013, 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:

scroll

K2 Internet S.A.	year-round
vertical techmedia AG (Chairman)	year-round
bidlab sp. z o.o.	since 27 December 2013
iteelabs sp. z o.o.	year-round

As at 31 December 2013, Mr Spyrka was also an Executive Board member of bmp Beteiligungsmanagement AG.

Supervisory Board

The members of the Supervisory Board of the company are:

scroll

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
Michael Stammler, Lutzenberg (CH) Member of the Supervisory Board	Businessman

Total payments to the members of the Supervisory Board of bmp media investors AG in the 2013 financial year amounted to T€ 46.

In total, each Supervisory Board member was entitled to the following remuneration:

scroll

in T€
Gerd Schmitz-Morkramer	24
Bernd Brunke	11
Michael Stammler	11
Total	46

Mr. Schmitz-Morkramer is on the Supervisory Board of the following companies:

YOC AG (Chairman) until 06 June 2013

Mr. Stammler is on the Supervisory Board of the following companies:

scroll

eCAPITAL entrepreneurial Partners AG, Münster	year-round
WM Treuhand und Steuerberatungsgesellschaft AG	year-round
Heliocentris Energy Solutions AG, Berlin	year-round
Aquisuisse AG, Frankfurt am Main	since April 2013
Taunus Trust Group AG, Wolfhalden, Switzerland, President of Administrative Council	since May 2013

Mr. Brunke has no further mandates on supervisory boards or other controlling bodies.

Shareholdings of the Executive Board and the Supervisory Board as at 31 December 2013

The members of the Executive Board held 3,377,956 shares, the members of the Supervisory Board held 500,000.

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 2013:

scroll

Oliver Borrmann	17.55%
Roland Berger Group	8.18%
Carin Pepper	6.98%

In the 2013 financial year there were no disclosures in accordance with section 26(1) WpHG:

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 2013

scroll

Company	Share in %		Equity as at 31.Dec. 2012	Annual result 2012
			in T€	in T€
GreenHanger GmbH, Berlin	49.97%		-1,075	-83
Xamine GmbH, München	49.42%		-109	-132
departnent one GmbH, Berlin	45.00%		452	36
Self Loading Content GmbH, Berlin	43.91%		151	-591
Retresco GmbH, Berlin	40.56%		26	-442
brand eins Medien AG, Hamburg	35.36%		729	-265
castaclip GmbH, Potsdam	28.46%		-590	-540
Ubertweek GmbH	27.06%		54	-434
Instream Media Sp. z o.o., Posen/Polen	25.93%		179 TPLN	-120 TPLN
iversity GmbH, Bernau	25.02%		-711 (1)	-1,398 (1)
iteelabs Sp. z o.o., Warschau/Polen	24.71%		227 TPLN	-411 TPLN
vertical techmedia AG, München	22.50%		137	-3

(1) Balance sheet data as of 31.12.2013

Berlin, March 28, 2014

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 March 2014.

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.

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).

With reference to their declaration last submitted on 23 April 2013 as well as to previous declarations, the Executive Board and the Supervisory Board of bmp media investors AG declare, in accordance with Section 161 AktG, that the recommendations of the Government Commission of the German Corporate Governance Code (version dated 13 May 2013; published by the Federal Ministry of Justice in the official section of the Federal Gazette [Bundesanzeiger] on 10 June 2013) have been and will be complied with, with the following restrictions:

D&O insurance deductibles (Section 3.8)

The Code recommends, with regard to D&O insurance for Supervisory Board members, 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.

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. Furthermore, the Supervisory Board will ensure diversity in the composition of the Executive Board and, in doing so, strive for appropriate consideration of women in particular.

The Executive Board of bmp media investors AG is composed of only two members, who have the same areas of responsibility. Therefore, the Supervisory Board deems the nomination of one the Executive Board members as Chairman, as well as the formulation of an allocation of duties, to be impractical. This also applies to the use of characteristics in the search for suitable Executive Board candidates that go beyond the criteria of expertise and competence.

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 as per Section 5.4.2, an age limit for Supervisory Board members (to be defined), and diversity, particularly with regard to the appropriate consideration of women, in light of the company’s specific situation. These targets should also be taken into consideration by the Supervisory Board when making candidate recommendations to its selection committees; together with the Executive Board, the Supervisory Board is to publish information on target implementation status as part of the Corporate Governance Report. Furthermore, when making recommendations at the General Stockholders‘ Meeting, the Supervisory Board is to disclose each candidate’s personal and professional relations to the company, to bodies of the company, and to any major stockholder.

Due to the size of the company, the Supervisory Board of bmp media investors AG consists of only three members. Given these circumstances, the Supervisory Board considers the use of criteria for the selection of Supervisory Board candidates beyond expertise and competence to be unsuitable. Accordingly, it has not set itself any targets in this regard. This also applies to the number of independent Supervisory Board members as per Section 5.4.2 of the Code. Therefore, there is no corresponding consideration for recommendations to the selection committees and no reporting on the matter.

Furthermore, in bmp media investors AG’s view, the Code’s wording regarding personal relationships of the Supervisory Board to be disclosed is vague and its delimitation unclear. In the interest of the legal certainty of future Supervisory Board elections, the Executive Board and the Supervisory Board of bmp media investors AG have decided to declare an exception to this recommendation.

Proposed candidates for the Supervisory Board chair during Supervisory Board elections (Section. 5.4.3)

The Code recommends that Chairman of the Supervisory Board candidates be announced to stockholders during Supervisory Board elections. 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.

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.

The Executive Board of bmp media investors AG does not receive remuneration. In addition, due to its size, the Supervisory Board of bmp media investors AG foregoes the formation of committees. The recommendations under Section 4.2.2 – 4.2.5 (Executive Board remuneration) or under Section 5.2. (2) , Section 5.3. (Formation of committees) of the Code therefore do not apply.

Berlin, 2 December 2013

scroll

For the Supervisory Board:	Executive Board
Gerd Schmitz-Morkramer Vorsitzender	Oliver Borrmann Jens Spyrka

Report of the Supervisory Board of bmp media investors AG

Dear shareholders,

It is the duty of the Supervisory Board to advise the bmp media investors AG Executive Board and to monitor its actions. We represent the company to the Executive Board and appoint its members.

We are also subject to a duty to review in particular the annual financial statements, the proposal for appropriation of the net retained profits and the Management Report. Moreover, we have a duty to report to the Annual General Meeting.

In the past business year 2013, we once again fulfilled our duties responsibly, carefully and in full. Please find our report below:

Advising the Executive Board and monitoring corporate governance

Our monitoring function is defined in Section 111 (1) of the Stock Corporation Act. It states further in Section 90 (1) of the Stock Corporation Act, that the Executive Board is required to report regularly to the Supervisory Board on the planned business policy, other fundamental questions relating to corporate planning including financial, investment and human resources planning as well as in regard to the company’s profitability. This applies in particular to transactions or events likely to have a material impact on the company. In this context, the Supervisory Board is also entitled to define those transactions that require its approval prior to implementation.

We exercised this right in that we have issued a set of rules of procedure for the Executive Board. In accordance with these rules of procedure, transactions which, on account of their financial substance, have an impact extending beyond the company’s usual operations or which are of particular significance to the company, its corporate policy or the organisation of company management in some other way, shall require the Supervisory Board’s prior approval. Certain clearly defined transactions and measures relating to the company‘s investment business also require our approval. Such transactions include (follow-up) investment in holdings in which the equity risk reaches or exceeds € 3 million or the disposal of investments below their carrying amount.

It is paramount that we are updated regularly and in full by the members of the Executive Board to ensure that we are in a position to fulfil our monitoring task. The meetings of the Supervisory Board constitute the primary means for this, where, in addition to the submission of the reports from the Executive Board, important topics are introduced for joint debate.

We also discuss the interim financial reports at meetings of the Supervisory Board when the meeting dates coincide with publication. If this is not the case, a conference call is held to discuss the financial reports prior to publication.

For those months in which there is neither a meeting of the Supervisory Board nor a conference call for discussion of a financial report, the Executive Board rules of procedure provide for communication of a written status report. The Executive Board informs us in detail of current developments in the portfolio, new investments, IR and PR measures and the liquidity status. This report may be supplemented by information on other topics such as the status of strategic projects or HR matters.

In addition to the above, the size of both the Executive Board and Supervisory Board means that a brief exchange by telephone or by email is always possible where some unforeseeable event requires.

Overall, we are convinced that we are always fully and regularly informed by the Executive Board and – in particular with respect to the preparation for our meetings – sufficiently well in advance. This means at all times we are able to examine the actions of the Executive Board as well as all planned and implemented measures with regard to their legality, proper order, expediency and economic efficiency. We are always able to fulfil our duties efficiently and in full.

Supervisory Board discussions and resolutions

Pursuant to Section 10 (1) of our Articles of Association, the Supervisory Board of bmp media investors AG consists of three members. In view of the number of members, we have refrained from forming committees.

We have set down the framework for our collaboration in a set of rules of procedure.

Our discussions and resolutions are generally carried out at meetings of the Supervisory Board. The Executive Board usually attends these meetings. As mentioned above, we also discuss the interim financial reports in conference calls. For reasons of expediency, our rules of procedure also permit us to pass resolutions outside meetings provided the Chairman of the Supervisory Board directs the same and no member of the Supervisory Board raises objection to this procedure.

However, it is essential that the Executive Board supplies us with comprehensive information in advance. This is the only way to ensure that we are able to examine a management measure and discuss it in detail, either with the presence of the Executive Board or without, before giving our approval (or refusal).

In line with Section 110 (1) of the Stock Corporation Act, in business year 2013, we held four meetings in person in which resolutions were passed (see below for details). We passed one resolution by e-mail – relating to the statement pursuant to Section 161 of the Stock Corporation Act and the Corporate Governance Report for business year 2012.

Focus of the discussions

At the meetings of the Supervisory Board, we were regularly updated by the Executive Board with regard to the current situation of the company, the status of the portfolio companies as well as about strategic considerations. We also discussed matters relating to the risk situation and risk management, compliance and accounting at the meetings as well as HR matters concerning the Executive Board. Other topics discussed at the individual meetings in business year 2013 were as follows:

Meeting held on 22 April 2013

This meeting focused on the reports and discussion of the annual financial statements 2012. The auditor was present for this agenda item. The CFO of bmp Beteiligungsmanagement AG was also present for this item. bmp Beteiligungsmanagement AG assisted the bmp media investors AG Executive Board with the preparation of the annual financial statements under the terms of an investment consultancy agreement. Matters relating to risk management and control were also discussed. In addition, we dealt with the agenda for the Annual General Meeting 2013, including the resolutions proposed by the management.

Meeting held on 13 June 2013

The meeting was held immediately after the 2013 Annual General Meeting. The scheduled election of the members of the Supervisory Board was held at the Annual General Meeting. All members were reappointed. At the Supervisory Board meeting, we then elected the Chairman of the Supervisory Board and his deputy. The Executive Board then presented a brief summary of the status of the investments.

Meeting held on 11 September 2013

At our third Supervisory Board meeting of the 2013 business year, in addition to the status reports, our discussions focused on the prospects of further development of certain individual investments. This included a summary of the financing rounds planned for the remainder of the business year. Reports on planned new investments were also presented. In this context, we also discussed the company’s future liquidity requirements. Moreover, the Executive Board reported to us on the renewal of more intensive investor and press meetings and possible approaches for an equity increase.

Meeting held on 2 December 2013

In December, we met for the fourth time in the business year. At this meeting, we approved the planning for business year 2014. The CFO of bmp Beteiligungsmanagement AG was also present for this agenda item. We benefited from his presence to gain a detailed report on any impact the new Capital Investment Code (KAGB) that came into effect in July 2013, may have on bmp media investors AG. There was no urgent need for action in business year 2013 since the KAGB provides for a period of transition to July 2014. However, together with the Executive Board, we shall follow matters attentively and hold discussions on this matter as well as initiating any necessary action. Finally, at this meeting, we dealt thoroughly with matters of Corporate Governance and approved the 2013 Statement of Compliance pursuant to Section 161 of the Stock Corporation Act.

Corporate governance

In Spring 2010, the bmp media investors AG (formerly: bmp Aktiengesellschaft) Executive Board and Supervisory Board had decided, in view of the coming into effect of the Accounting Modernisation Act (BilMoG) in May 2009, to change the cycle for making the annual Statement of Compliance pursuant to Section 161 of the Stock Corporation Act and to make this declaration at the first meeting of the Supervisory Board of the business year. The underlying reasons for this were that the Statement of Compliance, being a component of the statement on Corporate Governance, must always relate to the entire business year just ended. We have since come to hold the view that this is not essential.

We have since established that during the first meeting of the Supervisory Board in a business year which is also the meeting to approve the annual financial statements, there is frequently only limited time available for discussion of Corporate Governance. For these reasons, we decided to return to the old system and to submit the Statement of Compliance at the last meeting of the business year. Thus, in the business year just ended, we submitted two declarations, one in a resolution passed by email on 4 April 2013 with respect to business year 2012 and one at the meeting held on 2 December 2013 with respect to business year 2013. Both declarations were immediately made available to the public on the bmp media investors website.

In the statement on Corporate Governance pursuant to Section 289a of the German Commercial Code, also the Corporate Governance Report in accordance with Section 3.10 of the Corporate Governance Code, the Executive Board reports in detail on Corporate Governance at bmp media investors AG – also on behalf of the Supervisory Board. This report is also available on the bmp media investors AG website.

Due to our parallel listing on the regulated market of the Warsaw Stock Exchange, we are also required to observe 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 submits a statement in respect of these at least once yearly in a comprehensive report which is published online at the same time as the publication of the annual financial statements on the bmp media investors AG website.

We regularly review the efficiency of our work. In view of the size of the Supervisory Board, we are confident that we can quickly identify and remedy any weaknesses. After considering the costs and any benefits, we have deliberately chosen not to mandate an external consultant to evaluate the efficiency of our activities.

We are not aware of any conflicts of interest concerning members of the Executive Board or Supervisory Board that require notification to the Annual General Meeting.

Audit of the annual financial statements 2013

bmp media investors AG prepares its separate financial statements in accordance with national financial reporting 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 2013 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 2013 an unqualified audit certificate.

At our Supervisory Board meeting on 10 April 2014, 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. Jointly 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 2013. The annual financial statements were therefore approved.

Personnel matters of the Supervisory Board

At the close of the Annual General Meeting held on 3 June 2013, the term of office of the Supervisory Board came to an end.

The Annual General Meeting re-elected Mr Bernd Brunke, Mr Michael Stammler and Mr Gerd Schmitz-Morkramer as members. The new term of office shall end at the close of the Annual General Meeting that decides on formal approval of the Board members actions for the fourth business year following the commencement of the term of office, namely the Annual General Meeting 2018.

Berlin, 10 April 2014

Gerd Schmitz-Morkramer, Chairman of the Supervisory Board