SLEEPZ AG — Annual Report 2014

May 19, 2015

bmp media investors AG

Berlin

Annual Report 2014

Management Report for the Business Year 2014

of bmp media investors AG

In addition to the further development of the existing holdings, the focus of work at the company was changes in the regulatory situation.

Since July 2014, the German Investment Code applies. This regulates possible approval requirements, also for venture capital companies.

With the uncertainty relating to the approval requirements for the bmp media investors AG investment activities, only one investment was made in 2014, sleepz GmbH. The investment in Greenhanger GmbH was sold to co-shareholders at a symbolic price in October 2014.

Structure of the annual financial statements

The assets side of the balance sheet consists predominantly of shares in investments. A material change in this structure is not anticipated. However, cash and cash equivalents will rise as a result of disposals of investments.

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Investments and loans (incl. listed securities)	99.4%
Bank balances	0.1%
Other	0.5%
Total	100.00%

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

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Shareholders’ equity	97.6%
Liabilities	2.4%
Total	100.00%

In terms of revenue, the income statement was 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 currently 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 reflect primarily the costs of stock market listing, IR and PR costs and costs for the financial statements and audits.

Revenue from the sale of equity investments and securities held as current assets amounted to € 91 thousand in 2014 (previous year: € 1,034 thousand), with depreciation on financial assets and securities totalling € 1,507 thousand (previous year: € 1,099 thousand). bmp media investors AG generated revenue according to HGB of € -2,372 thousand in business year 2014 (previous year: € -498 thousand). The share capital went down from € 15.3 million to € 14.8 million. The equity ratio moved down from 98.7% to 97.6%.

As of 31 December 2014 current bank loans of € 0.2 million were utilised. There was no significant level of bank balances. Short-term, marketable securities decreased to € 2.5 million as at 31 December 2014 (previous year: € 2.7 million).

Market development and market position

According to data (2014 annual report) from the German Private Equity and Venture Capital Association, the venture capital segment continued its positive development from 2013, even if momentum was not quite as high. Venture capital financing continued to be successful.

At € 0.65 billion, the venture capital investments did not quite match the level of the previous year (€ 0.72 billion), with all sub-areas (seed, start-up and later stage investments) posting downturns on 2013.

The number of companies financed with venture capital declined slightly, from 740 to 712. Overall, the number of companies funded with venture capital accounted for 53% of all companies funded in 2014. On the other hand, in 2014 investment volume in the area of private equity income by 40% from € 5.05 billion to € 7.06 billion. These are figures from market statistics, i.e. transactions at German companies, irrespective of the origin of the investment companies. The considerable upturn is due primarily to buyout transactions of foreign institutions.

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 11% of the companies funded over the course of the year had more than 200 employees and only 12% generated revenue of over € 50 million, according to the German Private Equity and Venture Capital Association.

In 2014, the sale of investments declined slightly against the (strong) 2013 year. The volume of investment sales reached € 5.37 billion, which represents a decrease of approximately 6% on the previous year (€ 5.72 billion). However, the lower figure is due primarily to a decline in total write-offs (divestment volume relates to the original investment amount, i.e. acquisition costs) and this is to be regarded positively from an overall perspective. With divestments of € 442 million, the venture capital sub-area reached almost exactly the level of the previous year (€ 444 million). Trade sales were the most prevalent exit route here, accounting for 49% of the total volume.

Sentiment among German equity investors improved over the course of 2014. It is particularly the early stage investors who are more satisfied. The is shown in the most recent Private Equity Barometer, the sentiment indicator for the investment market prepared jointly by the German Private Equity and Venture Capital Association and KfW. It shows that the upturn for sentiment for early phase financing moved up to the second highest figures since the indicator was created in 2003. The German Private Equity and Venture Capital Association is confident that this positive trend will also continue in 2015.

Business development:

Venture capital investments

There are 19 equity investments in the portfolio.

All of the investments come from the two markets that are relevant to bmp, namely Germany and Poland. One new investment was made - sleepz GmbH. At the same time, there was one disposal from the portfolio: the holding in Greenhanger GmbH was sold to co-shareholders.

Total investments in the area of venture capital direct investments amounted to € 2.6 million in business year 2014. Follow-up investments were made in some existing investments in addition to the new investment 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. One person was employed on average throughout the year.

Financial situation:

Profit situation

The company reported an annual result of € -2,372 thousand in business year 2014. Earnings thus deteriorated compared with the previous year, in which there was a net result of € -498 thousand. Revenue from the sale of equity investments and securities amounted to € 91 thousand (previous year: € 1,034 thousand), while there was consulting and commission income of € 718 thousand (previous year: € 712 thousand).

Other operating income decreased sharply from € 1,126 thousand to € 100 thousand, primarily resulting from a release from liabilities of € 584 thousand granted by KfW-Bankgruppe in the previous year.

At € 63 thousand, personnel expenses were at the same level as the previous year (€ 64 thousand). Other operating expenses declined from € 1,959 thousand to € 1,746 thousand, primarily because of losses from securitiy trades last year. Due to the fact that some equity investments did not develop in line with expectations, write-downs on financial assets and securities increased from € 1,099 thousand to € 1,507 thousand.

The return on equity, measured by net income for the business year and in relation to average shareholders’ equity, was -15.7%.

Assets and capital structure

Fixed assets include shares in investment companies and loans given to these companies. At € 12,576 thousand, they comprise 99.95% of fixed assets. Working capital dropped 27.8% from € 3,620 thousand to € 2,614 thousand. Cash in hand and bank balances were € 19 thousand at the end of 2014 following € 819 thousand in 2013. The balance sheet total decreased from € 15.5 million to € 15.2 million. Equity decreased 3.2% from € 15.3 million to € 14.8 million. Liabilities rose from € 32 thousand to € 241 thousand. By contrast, the equity ratio moved down from 98.7% to 97.6%. Marketable securities and cash equivalents were € 3.4 million at the end of the year (previous year: € 4.6 million).

Opportunities and risks of future development, risk management

The German Investment Code was passed in the Bundestag on 16 May 2013 with most of its regulations coming into force on 22 July 2013. The German Investment Code opts for a comprehensive regulation approach and covers all collections of capital which can be classified as investment assets. Investment assets in the meaning of section 1 (1) sentence 1 German Investment Code is each undertaking for joint investments which collects capital from a number of investors in order to invest it for the benefit of these investors in line with a stipulated asset strategy and which is not an operating company outside the financial sector. If a specific structure falls until this definition, it is covered in principle by the German Investment Code. As a result, the management and sales of units is subject to specific permission and registration obligations.

On the matter of investment strategy, the Federal Financial Supervisory Authority states the following:

“A further proviso is that the undertaking for joint investments which collects capital from a number of investors invests it “in line with a stipulated investment strategy” for the benefit of these investors. The term “investment strategy” is not defined either in the AIFM Directive or in the German Investment Code.

According to the regulations of the ESMA (European Securities and Markets Authority) an undertaking has a stipulated investment strategy if in the context of a strategy it specifies how the joint capital must be managed in order to generate a common return for the investors.

The following characteristics individually or cumulatively can indicate the existence of an investment strategy:

- the strategy is stipulated no later than the time the participation of the investor has becoming binding;

- the strategy is recorded in a document which is part of the investment conditions or the Articles of Association of the undertaking or reference is made in the investment conditions to the Articles of Association;

- the undertaking has a legally binding obligation which can be asserted by the investors to adhere to the strategy on behalf of the investors;

- the strategy details the directives according to which the investment has to be made (e.g. investment in specific categories of assets, restrictions at asset allocation, following specific strategies, investment in specific geographic regions, restrictions on leverage, specific holding periods or other risk diversification requirements).

According to the explanatory memorandum to section 1 (1) German Investment Code, the existence of a specified investment strategy requires that the criteria according to which the collected capital is invested is determined precisely in writing to an extent which goes beyond a general business strategy (in what followings “corporate strategy”). A specified investment strategy thus distinguishes itself from a general corporate strategy in that the investment criteria are precisely determined and the scope for action of the AIFM is restricted in the investment conditions, the Articles of Association or in the shareholder agreement.”

In the view of the company and its legal advisors, there is no specified investment strategy so that bmp media investors AG does not come under the purview of the German Investment Code. The purpose of the company stated in the bmp media investors AG Articles of Association reflects the general corporate strategy and does not meet the above criteria. Unfortunately the Federal Financial Supervisory Authority does not share this opinion. More detailed reasons were not provided.

As a result the Executive Board is examining how it can deal with legal consequences resulting from this Federal Financial Supervisory Authority assessment and what this means for all shareholders and stakeholders. It is also being examining whether the services necessary for this can be provided internally or whether they may be provided by a third party and the extent to which the flexibility required for the VC business remains.

In addition to the considerable financial resources required to establish an internal structure or for an external service provider, there would also be increased costs for the valuation of the equity investments and for the external depository holding. The holdings in the equity investments would have to be delivered to a securities account at this depository holding. As the depository holding is liable for the proper transfer of the holdings, it is probable that each deposition would be accompanied by a legal statement.

Overall, the Executive Board, with the approval of the Supervisory Board, came to the conclusion that with these conditions a profitable and streamlined continuation of the venture capital business is no longer possible. It should also be noted that infringements against the German Investment Code can result in imprisonment for up to three years or a fine for the Executive Board members. On the other hand the Federal Financial Supervisory Authority has the right to appoint someone to wind up the company.

Direct investments

Venture capital is speculative or risk capital, granted with the aim of achieving high returns. Compared with 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 attainable disposal proceeds

bmp media investors AG generates income primarily from the sale of investments to an institutional or industrial investor (trade sale) or by means of 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.

With a view to the regulatory requirements resulting from the German Investment Code in combination with the resulting requirements to sell the investments, the sale of investments is rendered more difficult and can thus result in negative results of bmp media investors AG.

Uncertainty of the economic development of individual companies in the portfolio

Write-offs of 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 especially with early stage financing. bmp media investors AG counteracts the financial impact of a drop in the value of investments with early support and countermeasures, the continuous improvement of investment control as well as appropriate provisions for risk (recognising valuation allowances) in accounting measurement.

Cluster risks

The three biggest holdings together represent around 54% of the carrying amount of equity investments and securities. The carrying amounts of brand eins Medien AG, dailyme TV GmbH and Heliocentris Energy Solutions AG range between € 2.1 million and € 3.1 million.

Risks from foreign companies

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 as well as country-specific conditions can thus lead to unexpected risks. At present, bmp holds three foreign investments in Poland.

Liability associated with 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 the possibility that such liabilities will occur in some individual cases.

Risks 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.

Risk from contractual relationships

With bmp Beteiligungsmanagement AG there is an investment consultancy agreement which runs to 31 December 2021. As the contractual performance is not required or not required in full as a result of the changed business model, there is the risk that an early termination of the contract would result in having to pay a compensation payment.

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. Another risk is that the company must accept exchange losses from foreign currency balances if no hedging transactions exist.

Risks resulting from changes to legal conditions

There is the risk that in addition to the German Investment Code there will be further regulatory obstacles which could lead to higher costs of a further restriction of operations.

Risks resulting from the changed business model

The management will propose a change of the business purpose to the Annual General Meeting on 17 June 2015. If the Annual General Meeting approves this change, then bmp media investors AG will become an operating company outside the financial sector which is subject to the relevant risks with its majority holdings in subsidiaries. At the moment these cannot yet be quantified.

Company dependence on economic cycles and financial markets

Up to now, the economic success of bmp media investors AG has been dependent primarily 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 commercial development for all, several or individual companies in the portfolio can be caused by various external or internal factors that the company may not be able to 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.

In the context of future business operations, this risk will become lower and be replaced by new industry-specific risks.

Overall evaluation and risk management

bmp media investors AG has recognised extensive provisions for all discernible individual risks in the annual financial statements for 2014. Activities in the area of risk management were further expanded in 2014.

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. A quality handbook has been created.

The service provider in the investment consultancy 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 with suitable financial mathematical 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 continuous recording of fair values and investment controlling makes it possible to take appropriate measures to counteract undesired developments of the investment interests.

bmp media investors’ current liquidity and the available credit facilities are adequate for its existing business. All obligations can be met.

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. Mr Borrmann and Mr Spyrka are remunerated by bmp Beteiligungsmanagement AG with which an investment consultancy agreement is in place.

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 of the Stock Corporation Act in conjunction with Article 7 of the Articles of Association.

In accordance with section 84 Stock Corporation Act, 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 Stock Corporation Act.

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) Stock Corporation Act, 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) Stock Corporation Act, a resolution to amend the Articles of Association requires a minimum three-quarters majority of the capital represented at the adoption of the resolution. Otherwise, resolutions by the Annual General Meeting in accordance with section 133 Stock Corporation Act 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 € 20,701,174 as at the balance sheet date. It is divided into 20,701,174 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 € 10,350,587.00 by issuing new bearer shares against cash and/or noncash contributions until 26 June 2019, and in doing so stipulate the terms for issuing shares (Authorised Capital 2014/I).

The Executive Board is authorised, with the approval of the Supervisory Board, to issue on one or several occasions up to 26 June 2019 warrants and/or convertible bonds with a total nominal amount of up to € 30 million with or without a limited maturity date and to grant bearers of warrant bonds options and bearers of convertible bonds conversion rights to up to 10,350,587 non-par value bearer shares (shares) of the company in line with the warrant and convertible bond conditions (bond conditions).

The Executive Board is also authorised, with the approval of the Supervisory Board, to buy back up to 1.75 million shares up to 6 July 2015.

In respect of section 289 (4) 3 German Commercial Code, please refer to the notes, which state that further disclosures in line with section 289 (4) are not required.

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

On 4 February 2015, the Executive Board and the Supervisory Board of bmp media investors AG resolve to propose the shareholders a change of the business purpose at the Annual General Meeting on 17 June 2015.

The background of this decision is the current interpretation of the German Investment Code by the Federal Financial Supervisory Authority which means that, without a corresponding change in the Articles of Association, bmp media investors AG would in the future to subject to additional regulations that would result in additional financial charges and restrictions in the scope of action which in the opinion of the Executive Board and Supervisory Board would not be acceptable for the shareholders and the company.

By letter dated 23 March 2015, the Federal Financial Supervisory Authority informed the company on the condition of a corresponding change in the Articles of Association and a sale of the preponderant part of the investment portfolio that the Federal Financial Supervisory Authority assumes that the das German Investment Code is not to be applied to bmp media investors AG.

Forecast report:

Market environment

After the planned change of the company purpose at the Annual General Meeting on 17 June 2015, the company will concentrate on a new market segment outside the venture capital business. From today’s perspective, we anticipate that we will address a relatively stable and large market.

Investment activity

Due to the regulatory changes, bmp media investors AG will not acquire any more equity holdings with the intention of a later sale. Within the context of the new business purpose, it is possible that the company acquires strategically appropriate majority holdings.

Forecast result of operations

Due to the regulatory requirement of selling the preponderant part of the equity investments, we do not expect to close the 2015 business year with a profit. Rather, we anticipate acquiring a majority stake in at least on equity investment where the budget anticipates closing 2015 with a loss. Depending on the level of the stake and the time the majority holding is acquired, this equity stake will contribute a result of approximately € -0.5 million that in conjunction with the existing cost structures in the company will result in a loss of approximately EUR 1.5 million to € 2 million in 2015. The gain or loss on disposal of the preponderant part of the equity holdings can impact this result in a positive or a negative fashion.

Opportunity report

The Executive Board anticipates that the restructuring requirements in the current business year will be used to make preparations for establish the basis for growing profitably with a new profit over the next few years.

Berlin, 2 April 2015

Oliver Borrmann

Jens Spyrka

Balance Sheet as at 31 December 2014

Assets

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A. Fixed assets
I. Intangible assets
Concessions, industrial property rights
and similar rights		6,909.57		6
II. Financial assets
1. Investments	11,810,145.47			10,817
2. Loans to investee companies	765,514.13	12,575,659.60	12,582,569.17	1,078
B. Current assets
I. Accounts receivable and other
assets
1. Trade accounts
receivable	3,570.00			1
2. Receivables from investee
companies	40,965.74			31
3. Other assets	11,855.66	56,391.40		101
II. Securities
Other securities		2,538,261.00		2,668
III. Cash on banks and cash on hand		19,003.35	2,613,655.75	819
C. Prepaid expenses			6,651.46	1
			15,202,876.38	15,522
Liabilities
		EUR	EUR	31.12.2013 TEUR
A. Shareholders` equity
I. Subscribed capital		20,701,174.00		18,819
II. Capital reserves		2,659,338.60		2,660
III. Accumulated net loss		-8,529,356.33	14,831,156.27	-6,158
B. Provisions
Other provisions			130,930.26	169
C. Liabilities
1. Liabilities to banks		199,248.17		0
2. Trade accounts
payable		36,069.97		28
3. Other liablilities		5,471.71	240,789.85	4
thereof from taxes: 5,471.71 EUR
(previous year: 4 TEUR)
			15,202,876.38	15,522

Profit and Loss Statement for the Period from 1 January to 31 December 2014

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		EUR	01.01.-31.12.13 TEUR
1. Sales revenue
a) Income from disposal of investments
and marketable securities	91,316.86		1,034
b) Income from consulting and commissions	718,000.00	809,316.86	712
2. Other operating income		121,742.11	1,126
3. Reduction in book value of investments
and marketable securities		-91,530.72	-428
4. Staff costs
a) Wages and salaries	-50,569.91		-53
b) Social security contributions and costs for
pensions and support	-12,059.55	-62,629.46	-11
5. Depreciations
a) Depreciation on intangible and tangible
fixed assets		-3,213.73	-2
6. Other operating expenses		-1,768,016.59	-1,959
7. Income from investments		9,836.96	10
- thereof from affiliated companies:
9,936.94 EUR (previous year: 10 TEUR)
8. Interest and similiar income		123,565.04	186
9. Depreciations on investments and marketable
securities		-1,507,462.15	-1,099
10. Interest and similiar expenses		-3,380.10	-14
11. Result from ordinary aktivities		-2,371,771.78	-498
12. Other taxes		0.00	0
13. Net year loss		-2,371,771.78	-498
14. Loss carried forward from previous year		-6,157,584.55	-5,660
15. Accumulated net loss		-8,529,356.33	-6,158

Cash-Flow Statement 1 January to 31 December 2014

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	2014 EUR	EUR	2013 TEUR
Loss for the year		-2,371,771.78	-498
+ Depreciations on financial assets		1,507,462.15	1,099
- Appreciations on financial assets and marketable securities		-76,362.11	-508
+ Depreciations on tangible and intangible assets		3,213.73	2
- Profit from disposal of financial assets		0.00	-481
- Profit from release of liability KFW		0.00	-584
		-937,458.01	-970
-/+ Decrease/(-) increase in trade accounts receivables and other assets	70,639.79		659
+/- Decrease/(-) increase in in short-term privisions	-37,575.34		27
+/- Decrease/(-) increase in in trade accounts payable and other liablilities	9,240.20	42,304.65	-147
Cash Flow from Operations		-895,153.36	-431
- Investments in other intangible and tangible assets		-3,975.00	0
+/- Shares in affiliated companies		0.00	0
- Loans to investee companies		0.00	-1,825
- Investments in holdings and securities		-2,573,611.35	-2,040
+ Cash-in from disposal of financial assets		591,316.86	1,536
+ Disposals of intagible and tangible assets at net book value		0.00	0
Cash-Flow from Investments		-1,986,269.49	-2,329
- Capital increase		1,881,924.00	0
- Change of liabilities towards banks		199,248.17	-390
Cash Flow from Financing		2,081,172.17	-390
Overall, the liquid funds has developed as followed:
Cash Flow from Operations		-895,153.36	-431
Cash-Flow from Investments		-1,986,269.49	-2,329
Cash Flow from Financing		2,081,172.17	-390
Change in liquid funds		-800,250.68	-3,150
+ Liquid funds at the beginning of business year		819,254.03	3,969
\= Liquid funds at the end of business year		19,003.35	819

Statement of Changes in Equity

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	Subscribed Capital EUR	Capital reserves EUR	Loss/profit carried forward from previous year EUR	Total EUR
Shareholders` equity as of 1 January 2014	18,819,250.00	2,659,338.60	-6,157,584.55	15,321,004.05
Capital increase	1,881,924.00	0.00		1,881,924.00
Net year result			-2,371,771.78	-2,371,771.78
Shareholders` equity as of 31 December 2014	20,701,174.00	2,659,338.60	-8,529,356.33	14,831,156.27
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

Statement of Changes in Fixed Assets for the Business Year 2014

Acquisition Costs

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	01.01.2014 EUR	Additions EUR	Disposals EUR	Transfers EUR	31.12.2014 EUR
I. Intangible assets
1. Concessions, licences and
similar goodwill	16,392.28	3,975.00	0.00	0.00	20,367.28
	16,392.28	3,975.00	0.00	0.00	20,367.28
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	18,767,657.94	1,167,591.83	7,536,081.94	1,033,781.15	13,432,948.98
2. Loans to investee
companies	1,090,083.35	1,224,094.10	500,000.00	-1,033,781.15	780,396.30
3. Securities of non-current assets	0.00	0.00	0.00	0.00	0.00
	19,857,741.29	2,391,685.93	8,036,081.94	0.00	14,213,345.28
Total fixed assets	19,874,133.57	2,395,660.93	8,036,081.94	0.00	14,233,712.56

Accumulated Depreciations

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	01.01.2014 EUR	Additions EUR	Disposals EUR	Appreciation EUR	Transfers EUR	31.12.2014 EUR
I. Intangible assets
1. Concessions, licences and
similar goodwill	10,243.98	3,213.73	0.00	0.00	0.00	13,457.71
	10,243.98	3,213.73	0.00	0.00	0.00	13,457.71
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	7,951,238.25	1,264,275.92	7,516,348.55	76,362.11	0.00	1,622,803.51
2. Loans to investee
companies	11,802.20	3,079.97	0.00	0.00	0.00	14,882.17
3. Securities of non-current assets	0.00	0.00	0.00	0.00	0.00	0.00
	7,963,040.45	1,267,355.89	7,516,348.55	76,362.11	0.00	1,637,685.68
Total fixed assets	7,973,284.43	1,270,569.62	7,516,348.55	76,362.11	0.00	1,651,143.39

Book Values

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	31.12.2014 EUR	31.12.2013 EUR
I. Intangible assets
1. Concessions, licences and
similar goodwill	6,909.57	6,148.30
	6,909.57	6,148.30
II. Tangible assets
1. Other plant, factory and
office equipment	0.00	0.00
	0.00	0.00
III. Financial assets
1. Investments	11,810,145.47	10,816,419.69
2. Loans to investee
companies	765,514.13	1,078,281.15
3. Securities of non-current assets	0.00	0.00
	12,575,659.60	11,894,700.84
Total fixed assets	12,582,569.17	11,900,849.14

Notes to the Annual Financial Statements as at 31.12.2014

of bmp media investors AG

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:

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	T€
Equity investments	15,284
Write-downs	-3,474
Total	11,810

Receivables and other assets

All receivables and other assets are due within one year.

Subscribed capital

In February 2014 a capital increase from authorised capital was carried out. Subscribed capital was increased from € 18,819,250.00 € to € 20,701,174.00 by issuing 1,881,924 new no-par value bearer shares.

The fully paid-in capital amounted to € 20,701,174 as at the balance sheet date. It is divided into 20,701,174 no-par value bearer shares.

Authorised capital

In the shareholders’ meeting on 27 June 2014 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 € 10,350,587 by issuing new bearer shares against cash and/or non-cash contributions (Authorised Capital 2014/I).

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,

c) to eliminate fractional amounts.

Contingent capital

The Executive Board is authorised, with the approval of the Supervisory Board, to issue on one or several occasions up to 26 June 2019 warrant and/or convertible bonds with a total nominal amount of up to € 30 million with or without a limited maturity date and to grant bearers of warrant bonds options and bearers of convertible bonds conversion rights to up to 10,350,587 non-par value bearer shares (shares) of the company in line with the warrant and convertible bond conditions (bond conditions).

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€ 2), costs for accounting, financial statements and audits (T€ 74) and outstanding invoices (T€ 54).

Liabilities

Total liabilities as at 31 December 2014 are broken down by remaining term as follows:

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	Remaining term
	Less than 1 year T€	1 to 5 years T€	More than 5 years T€	Total T€
---	---	---	---	---
Liabilities to banks	199	0	0	199
Trade accounts payable	36	0	0	36
Other liabilities	5	0	0	5
Total	240	0	0	240

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

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	Remaining term
	Less than 1 year T€	1 to 5 years T€	More than 5 years T€	Total T€
---	---	---	---	---
Trade accounts payables	28	0	0	28
Other liabilities	5	0	0	5
Total	33	0	0	33

Sales revenue

Sales revenue include income from disposal of securities (T€ 91) and income from consulting and commission (T€ 718).

Other operating income

Other operating income include income from the reversal of write-downs on financial assets (T€ 122).

Write-downs

In the financial year, financial assets were written down to lower fair value in the amount of T€ 1,507 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 2014 financial year:

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in T€
Fee for financial statements and audits	50
Tax advisory fees	12
Other services	2
Total	64

Information on the executive bodies of the company

Executive Board

The members of the Executive Board of bmp media investors AG in the 2014 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 anymore, both gentlemen are remunerated by bmp Beteiligungsmanagement AG with which an investment consultancy agreement is in place.

Other offices held by the Executive Board

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

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brand eins Medien AG (Chairman)	year-round
Revotar Biopharmaceuticals AG (Chairman)	1.1.2014-4.3.2014
Heliocentris Energy Solutions AG (Chairman)	year-round

In addition, as at 31 December 2014, 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:

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

As at 31 December 2014, Mr Spyrka was also an Executive Board member of bmp Beteiligungsmanagement AG.

Supervisory Board

The members of the Supervisory Board of the company are:

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Gerd Schmitz-Morkramer, Munich Chairman of the Supervisory Board	Lawyer
Bernd Brunke, Berlin Deputy Chairman of the Supervisory Board	Businessman
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 2014 financial year amounted to T€ 46.

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

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

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

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eCAPITAL entrepreneurial Partners AG	year-round
WM Treuhand und Steuerberatungsgesellschaft AG	year-round
Heliocentris Energy Solutions AG	year-round
Aquisuisse AG	year-round
Taunus Trust Group AG (Chairman)	year-round

Mr. Schmitz-Morkramer and Mr. Brunke had no further mandates on supervisory boards or other comparable controlling bodies.

Shareholdings of the Executive Board and the Supervisory Board as at 31 December 2014

The members of the Executive Board held 3,242,956 shares, the members of the Supervisory Board held 620,000.

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 2014:

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Oliver Borrmann	15.30%
Roland Berger Group	7.46%
Carin Pepper	6.35%

In the 2014 financial year there were the following disclosures in accordance with section 26(1) WpHG:

“biw Bank für Investments und Wertpapiere AG, Willich, Germany, informed us on 5 March 2014 in accordance with section 21 (1) WpHG that its share in the voting rights of bmp media investors AG, Berlin, Germany on 3 March 2014 exceeded the thresholds of 3% and 5% of the voting rights and on this day amounted to 9.57% (this corresponds to 1981924 voting rights).”

“XCOM Aktiengesellschaft, Willich, Germany, informed us on 5 March 2014 in accordance with section 21 (1) WpHG that its share in the voting rights of bmp media investors AG, Berlin, Germany on 3 March 2014 exceeded the thresholds of 3% and 5% of the voting rights and on this day amounted to 9.57% (this corresponds to 1981924 voting rights).”

Voting rights of 9.57% (this corresponds to 1,981,924 voting rights) are thus attributable to the company in accordance with section 22 (1) sentence 1 WpHG.

The attributable voting rights are held via the following companies controlled by XCOM Aktiengesellschaft, whose share of the voting rights in bmp media investors AG is 3% or more:

- XCOM Finanz GmbH

- biw Bank für Investments und Wertpapiere AG”

“XCOM Finanz GmbH, Willich, Germany, informed us on 6 March 2014 in accordance with section 21 (1) WpHG that its share in the voting rights of bmp media investors AG, Berlin, Germany on 3 March 2014 exceeded the thresholds of 3% and 5% of the voting rights and on this day amounted to 9.57% (this corresponds to 1981924 voting rights).

Voting rights of 9.57% (this corresponds to 1981924 voting rights) are thus attributable to the company in accordance with section 22 (1) sentence 1 WpHG.

The attributable voting rights are held via the following company controlled by XCOM Finanz GmbH, whose share of the voting rights in bmp media investors AG is 3% or more:

- biw Bank für Investments und Wertpapiere AG”

“biw Bank für Investments und Wertpapiere AG, Willich, Germany, informed us on 10 March 2014 in accordance with section 21 (1) WpHG that its share in the voting rights of bmp media investors AG, Berlin, Germany on 7 March 2014 moved below the thresholds of 3% and 5% of the voting rights and on this day amounted to 1.46% (this corresponds to 301924 voting rights).”

“XCOM Aktiengesellschaft, Willich, Germany, informed us on 11 March 2014 in accordance with section 21 (1) WpHG that its share in the voting rights of bmp media investors AG, Berlin, Germany on 7 March 2014 moved below the thresholds of 3% and 5% of the voting rights and on this day amounted to 1.46% (this corresponds to 301924 voting rights).

Voting rights of 1.46% (this corresponds to 301924 voting rights) are thus attributable to the company in accordance with section 22 (1) sentence 1 WpHG.”

“XCOM Finanz GmbH, Willich, Germany, informed us on 11 March 2014 in accordance with section 21 (1) WpHG that its share in the voting rights of bmp media investors AG, Berlin, Germany on 7 March 2014 moved below the thresholds of 3% and 5% of the voting rights and on this day amounted to 1.46% (this corresponds to 301924 voting rights).

Voting rights of 1.46% (this corresponds to 301924 voting rights) are thus attributable to the company in accordance with section 22 (1) sentence 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.

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Company	Share %	Equity 31.12.2013		Result 2013
		in T€		in T€
Xamine GmbH, Munich	46,34%	-156		-47
dailyme TV GmbH, Berlin	46,18%	-739		-890
department one GmbH, Berlin	45,00%	337		-142
Retresco GmbH, Berlin	40,56%	151		-467
brand eins Medien AG, Hamburg	35,36%	1.136		407
ferret go GmbH, Bernau	30,98%	-856		-637
Ubertweek GmbH, Berlin	27,06%	50		-351
Instream Media Sp. z o.o., Posen/Poland	25,93%	179 TPLN	(1)	-120 TPLN	(1)
iversity GmbH, Bernau	25,25%	-711		-1.398
castaclip GmbH, Potsdam	25,08%	1.192		2
iteelabs Sp. z o.o., Warsaw/Poland	24,71%	641 TPLN		-936 TPLN
vertical techmedia AG, Munich	22,50%	152		15

(1) Balance sheet data as at 31.12.2012

Berlin, April 2, 2015

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 RSM Verhülsdonk GmbH and endorsed with an unqualified audit certificate in April 2015.

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

At least once per year, the Executive Board and the Supervisory Board of bmp media investors AG are obligated to submit a statement 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 (statement of compliance).

With reference to their statement last submitted on 2 December 2013 as well as to previous statements, 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 24 June 2014; published by the Federal Ministry of Justice in the official section of the Federal Gazette [Bundesanzeiger] on 30 September 2014) have been and will be complied with, with the following restrictions:

D&O insurance deductibles (Section 3.8)

With regard to D&O insurance for 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 low 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 consist of more than one person and have a chairman or spokesperson. In addition, responsibilities for departments should be set down in the rules of procedure. Furthermore, the Supervisory Board is to 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 that go beyond the criteria of expertise and competence in the search for suitable Executive Board candidates.

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 Annual General 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 shareholders 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 Annual General 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.

Report of the Supervisory Board

of bmp media investors AG

Dear shareholders,

In the dual management system of a stock corporation under German law, the Supervisory Board is the control body responsible for monitoring the Executive Board’s management of the company on a continuous basis. We are also available to the Executive Board in an advisory and supportive capacity, particularly with regard to strategic issues affecting the company and other important transactions.

Our actions are always based on the principles of responsible and good corporate governance, which focus particularly on monitoring the legality, proper order, expediency and economic efficiency of the company’s management.

In business year 2014, we once again fulfilled our duties responsibly, carefully and in full.

Collaboration between the Executive Board and the Supervisory Board

To ensure that we are in a position to fulfil our monitoring task, it is paramount that we receive regular and fully comprehensive reports from the Executive Board and that there is trustful dialogue between the Executive Board and the Supervisory Board.

On the one hand, the Executive Board provides verbal reports at meetings of the Supervisory Board. Here, in accordance with Section 90 (1) of the German Stock Corporation Act (AktG), it reports, for example, on the planned business policy and on other fundamental questions relating to corporate planning including financial, investment and human resources planning as well as in regard to the company’s profitability.

For months in which no meeting of the Supervisory Board or discussion of quarterly reports takes place, we have agreed that the Executive Board will submit a written report.

Moreover, the size of both the Executive Board and the Supervisory Board means that it is unproblematic to hold discussions by e-mail or to convene teleconferences whenever unforeseeable events arise. We also hold teleconferences to discuss interim financial reports if they are not due to be discussed at a Supervisory Board meeting that is already scheduled to take place.

Information from the Executive Board is provided to us sufficiently well in advance and is appropriate in terms of quantity and quality. We thus had a fully comprehensive picture of the company’s position, the status of individual projects and the financial and risk situation at all times. It was therefore possible for us to discuss all the issues properly and without any restrictions at all times. Equally, there were therefore no obstacles to passing resolutions based on proposals of the Executive Board requiring Supervisory Board approval in accordance with the law, Articles of Association or rules of procedure.

Topics at plenary meetings of the Supervisory Board

As prescribed by law, the Supervisory Board held four meetings requiring attendance in person in business year 2014.

We also held five teleconferences. Two of these teleconferences related exclusively to the discussion of interim financial reports, which meant that no resolutions were passed in this connection.

A resolution concerning additions to the agenda of the Annual General Meeting 2014 was passed by e-mail vote and was approved in writing by the Chairman of the Supervisory Board on 6 May 2014.

All the members of the Supervisory Board participated in the four meetings requiring their personal attendance as well as in the teleconferences. The members of the Executive Board also attended these meetings and were available to discuss the relevant issues there. Where it was deemed necessary or useful with regard to individual topics, the Chairman of the Supervisory Board also invited guests to attend the meetings and teleconferences, including in particular the CFO of bmp Beteiligungsmanagement AG.

At the meetings of the Supervisory Board, we were regularly updated by the Executive Board with regard to the current situation of the company and the status of the investments as well as about strategic considerations.

Since we refrained from forming committees in view of the size of the Supervisory Board, our Supervisory Board meetings also dealt regularly with matters relating to the risk situation and risk management, compliance and accounting as well as HR matters concerning the Executive Board.

In the past business year, we dealt with two topics particularly thoroughly.

One of these topics related to the capital increase carried out in February 2014 where subscription rights were disapplied. We had already initially considered and discussed this measure in principle in business year 2013, enabling further debates on the topic to take place at the start of 2014 particularly by e-mail, in bilateral telephone calls between the Executive Board and the Supervisory Board and during teleconferences on 14 February 2014, 20 February 2014 and 26 February 2014. The Supervisory Board also passed the necessary resolutions during the teleconferences.

Throughout the whole of business year 2014 – at all meetings as well as by e-mail and in bilateral telephone calls between the Executive Board and the Supervisory Board – we also dealt particularly thoroughly and comprehensively with the impact on bmp media investors AG of the German Capital Investment Code (KAGB), which came into force in July 2013, and debated necessary and alternative courses of action. We had already commenced our discussions on the topic in the previous business year.

As this topic was especially significant for the company, a comprehensive legal consultation was and is being used in this regard and the process supported by a well-known law firm.

In addition, our meeting of 10 April 2014 focused on the reports and discussion of the annual financial statements 2013. The auditor elected at the previous year’s Annual General Meeting was present at the meeting and was available to answer questions. Furthermore, we approved the report of the Supervisory Board for business year 2013 and the resolutions proposed by management for the Annual General Meeting 2014. We also resolved to extend the appointment of the Executive Board and approved the acceptance of an advisory board mandate at an investment by the Executive Board member Jens Spyrka.

At the meeting of 27 June 2014, we were briefed on IR and PR activities in the first half of 2014 and also briefly discussed potential further financing options in this regard, both of which are over and above the usual scope of reporting.

The timing of the meeting of 26 August 2014 was such that we were firstly able to discuss the Half Year Report at this meeting. We also dealt in detail with the liquidity position and long-term financing of the company. In this connection, the Executive Board and the Supervisory discussed a large number of different options and their respective opportunities and risks.

This meeting further focused on the topic of risk management. The Executive Board briefed us on the further development of the risk management system as well as on the handling of present or potential risks. In connection with this, we were also given a comprehensive report on the current status with regard to the impact of the KAGB.

Finally, we also directed particular attention to the topic of the KAGB at the meeting of 3 December 2014. We were briefed in detail about the current status of discussions with the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht), defined the actions necessary in the short term together with the Executive Board and discussed various alternative courses of action. In addition, we approved the annual plan for 2015. We also debated corporate governance at the company and together with the Executive Board approved the annual Statement of Compliance pursuant to Section 161 of the German Stock Corporation Act (AktG).

Corporate governance

As mentioned above, the Executive Board and the Supervisory Board also dealt with the topic of corporate governance in 2014 and issued the annual Statement of Compliance pursuant to Section 161 AktG. It was published on our company homepage www.mediainvestors.com in December 2014 and is also part of the corporate governance declaration pursuant to Section 289a of the German Commercial Code (HGB) along with further information on corporate governance at bmp. The corporate governance declaration can also be found in the Annual Report.

Due to the parallel listing of its shares on the regulated market of the Warsaw Stock Exchange, bmp media investors AG is 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 Spółek Notowanych na GPW). The executive board also produces a report on this on the extent to which these principles are observed. This report is – as with all other information that has been or must be published in line with the capital market regulations applicable in Poland – made immediately available in Germany on our company homepage.

We review the efficiency of our work on an ongoing basis. As our board consists of only three members and we are thus able to identify and remedy any weaknesses quickly, to date we have deliberately chosen not to mandate an external consultant to evaluate the efficiency of our activities. In doing so we weighed up the costs against the potential benefits.

No conflicts of interest concerning members of the Executive Board or Supervisory Board that require notification to the Annual General Meeting were disclosed in business year 2014.

Audit of the annual financial statements 2014

bmp media investors AG has prepared its separate financial statements 2014 in accordance with national financial reporting standards (HGB). Additionally, and as a voluntary information medium for shareholders, the company is publishing financial statements for business year 2014 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 2014 were properly audited by the accountancy firm elected at the Annual General Meeting 2014, RSM Verhülsdonk GmbH; Wirtschaftsprüfungsgesellschaft - Steuerberatungsgesellschaft, Düsseldorf, Berlin office. 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 2014 an unqualified audit certificate.

At our Supervisory Board meeting on 22 April 2015, we dealt in detail with the annual financial statements, the Management Report and the auditor’s audit report.

The Executive Board had delivered the necessary documents to us sufficiently in advance of the meeting. We were thus able to obtain an independent picture.

We discussed the annual financial statements extensively with the Executive Board and the auditor. Our own review of the financial statements and the information provided by the auditor and the Executive Board did not give rise to any objections.

We therefore endorsed the annual financial statements as at 31 December 2014 in accordance with HGB, which were thereby approved.

Personnel matters

The appointment of Mr Oliver Borrmann and Mr Jens Spyrka expired on 30 June 2014.

At our meeting of 10 April 2014, we extended both of their appointments as members of the Executive Board until the end of 30 June 2017.

The Supervisory Board would like to thank the members of the Executive Board as well as our employee for their work throughout business year 2014.

Berlin, 22 April 2015

Gerd Schmitz-Morkramer, Chairman of the Supervisory Board