annual report alta fides ag 2008

Annual ReportALTA FIDES AG2008

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Letter to the Shareholders 4 – 8

The Share 22 – 23

Report by the Supervisory Board 24 – 29

Corporate Governance Report 30 – 38

Summary of the Management Report of ALTA FIDES

Aktiengesellschaft für Grundvermögen and of ALTA FIDES

Group for the Financial Year 2008 40 – 83

Consolidated Financial Statement of ALTA FIDES AG 84 – 189

– Consolidated Financial Statement of ALTA FIDES AG 92 – 189

– Audit Certifi cate by the Final Auditor 190 – 191

Responsibility Statement 192 – 193

Annual Financial Statement of ALTA FIDES AG 194 – 235

– Notes ALTA FIDES AG 200 – 235

– Audit Certifi cate by the Final Auditor 236 – 237

Financial Calendar for 2009 239

Table of Contents

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the share report by the supervisory board

A year full of changes and challenges lies behind us. The risks on the fi nancial markets and

the constant stream of bad news from the business world, and especially from the real estate

industry, have made the year 2008 particularly challenging.

In this turbulent environment, ALTA FIDES Aktiengesellschaft für Grundvermögen (“ALTA

FIDES AG“) has laid the foundations for the transformation of its business model towards

becoming the leading provider of residential facilities for students in Germany under the

brand name YOUNIQ (formerly known as “Campus“). We have paved the way to start the

successful marketing of YOUNIQ: Our fi rst three student residence properties, comprising

in total more than 500 residential units, will be opened in Greifswald, Leipzig and Erlangen

in the summer term of 2009.

Dear Shareholders,

letter to the shareholders

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group report fi nancial statement responsibility statement annual accounts alta fi des ag

With YOUNIQ we will be able to establish student accommodation as an independent asset

class of the German real estate market within a very short period. Even before the beginning

of construction, we succeeded in selling the fi rst stage of YOUNIQ Erlangen to an insurance

group. We have also experienced a high degree of interest in our other projects from private

and institutional investors.

Against this background, and amid the continuously increasing numbers of students and the

chronic housing shortage in the college and university towns of Germany, we will invest

more than EUR 200 million in the business segment “YOUNIQ – Student Living” in 2009

and 2010.

Furthermore, the annual investment volume will be increased considerably in the coming

years. In total, at least 1,500 to 2,500 residential units are to be completed per annum

starting from the year 2010.

This sustainable commitment in the business segment ”YOUNIQ – Student Living“ and the

fundamental transformation processes associated with it have resulted in a reduction of the

turnover of ALTA FIDES AG (including other income) by 39.1% to EUR 19,339,304 in the

business year 2008. The business year 2008 was concluded with a consolidated loss of

EUR 11,146,128. However, this loss was essentially caused by various special effects and

valuation adjustments because of the change of the majority shareholder and the strategic

realignment of the Company to YOUNIQ. If these special effects are taken into account,

the consolidated annual net profit for 2008 amounts to EUR 1,496,473. This reflects

a sat isfactory business performance, particularly when judged against the backdrop of the

poor performance of the entire economy.

The focus on YOUNIQ is also refl ected in the reduced activities within the three additional

fi elds of business activity of ALTA FIDES AG: In the fi nancial year 2008, the fi eld of Non-

Performing Loans was examined intensively with regard to its potential for future growth.

Henceforth, it was decided that this business area shall no longer be actively pursued.

In 2008, ALTA FIDES AG has not made any further acquisitions in the business fi eld of

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“Renting and Trading Real Estate“ (formerly ”Trading and Own Portfolio“). Rather, the focus

was placed on the establishment of active asset management in order to utilise the potential

for value creation entailed in the portfolio of high-value real estate. “High value real estate”,

in this sense, is comprised mostly of listed and reconstructed apartment buildings in what

are seen as high-potential locations.

For the time being, the business fi eld of “Project Development“ was continued at the current

level. In 2008, the focus was on the development of high-value, listed real estate proper-

ties in choice locations. Continuing this theme, ALTA FIDES AG has acquired “Liechsteiner

Gärten“ (Liechtenstein Gardens), a property in the south of Leipzig protected with ‘historic

monument’ status. This development has a living area of approximately 8,140 square metres

distributed over approximately 102 residential units. However, in the future, no new projects

will be acquired by this business segment, so that no major contributions to sales and results

by project development are planned in the medium term.

This shift in the business alignment of ALTA FIDES AG in favour of consistent growth in the

business fi eld of “YOUNIQ – Student Living“ is primarily supported by the commitment of

the new majority shareholder, a fund of CORESTATE CAPITAL AG, a Swiss private equity

investor and asset manager.

In December 2007, the fund initially acquired an interest of 14.18% in addition to call op-

tions amounting to approximately 14.82% of the capital stock of ALTA FIDES AG. Because

of the excellent growth forecasts and the early establishment of ALTA FIDES AG as a ‘fi rst

mover’ in the fi eld of student residential facilities, the fund increased its share to 76.24% in

July 2008 and subsequently submitted a mandatory offer to the remaining shareholders to

the amount of EUR 15.00 per share. As of the end of the term of acceptance of the public

mandatory offer on the 7th of October 2008, a further 19.71% of the shares in ALTA FIDES

AG were offered for sale and, as a result, the fund held in total approximately 95.94% of the

capital stock. By the end of the extended term of acceptance on the 15th of January 2009,

this share had increased yet again to approximately 98.03% of the capital stock of ALTA

FIDES AG.

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As a result of the new shareholder structure, the members of staff of the Management Board

and Supervisory Board of ALTA FIDES AG were changed. Daniel Schoch, Chief Financial

Offi cer of CORESTATE CAPIRAL AG, took over the position of the chairman of the Super-

visory Board from Prof. Dr. Alda with effect from the 21st/ 23rd of October 2008. On the

19th of December 2008, he was followed by Matthias Sprenker, Managing Director of the

Luxembourgian Corestate company SECHEP INVESTMENTS HOLDING S.à.r.l., and Martin

Hitzer, a lawyer at the law fi rm Freshfi elds Bruckhaus Deringer LLP in Düsseldorf, who re-

placed Natalie Wagner and Karl-Georg Wentz as members of the Supervisory Board.

Jan Giessler, Managing Partner of ConLead GmbH, Cologne, was appointed a member of

the Management Board of ALTA FIDES AG with effect from the 16th of October 2008. He

succeeded Norbert Ketterer, Christian Dunkelberg and Rainer Fuchs, who resigned from the

Management Board of the Company with the Supervisory Board’s agreement with effect

as of 15th October 2008 and 30th November 2008 respectively. Jan Giessler boasts more

than 16 years of professional experience in various industries, with a focus on strategy and

corporate fi nance. Prior to his new appointment, he was working in the real estate industry

for several years and, in the capacity of an interim manager, he has implemented growth

strategies, in particular for private equity corporations.

Additionally, Rudolf Bartsch was appointed a member of the Management Board of ALTA

FIDES AG with effect of 16th February 2009. In the future, he will manage the fi elds of

project development, the acquisition of plots and existing real estate properties, as well as

of strategic and operative asset management in addition to Jan Giessler. The 44-year old

executive brings 20 years of experience as a self-employed entrepreneur and management

consultant in the real estate industry – in particular in the fi eld of real estate project devel-

opment. In the past, Rudolf Bartsch has implemented and successfully marketed residential

real estate with a living space of 70,000 square metres in total.

With its new Management Board, a modifi ed corporate strategy as well as sustainable foun-

dations for long-term solid growth, the Management Board of ALTA FIDES AG regards the

year 2008 as having been concluded satisfactorily and looks forward to a successful 2009.

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At this point, ALTA FIDES AG would like to thank its shareholders for their support during

these times of change. We appreciate the high degree of trust that you have placed in the

Company.

We are convinced that the new fundamental alignment will help the Company to pursue

the right business strategy in these turbulent times. As a ‘fi rst mover’ in the asset class of

student residential facilities, ALTA FIDES AG will successfully press ahead in this innovative

business fi eld and ensure further growth and added value for our shareholders.

We would like to thank, in particular, all our members of staff for their unique commitment.

Without them, the success of ALTA FIDES AG during the fi nancial year 2008, the new

positioning as a ‘fi rst mover’ in the segment of student residential facilities and the creation

of our brand would not have been possible. We look forward to another year of successful

co-operation.

Stuttgart, April 2009

ALTA FIDES AG

Aktiengesellschaft für Grundvermögen

Rudolf J. Bartsch Jan W. Giessler

(Member of the Management Board) (Member of the Management Board)

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The increase in the number of students throughout Germany has already led to a short-

age of adequate housing. According to an ERNST & YOUNG study, the housing market

for students is expected to become even more challenging over the next 5 years.

increase in the number of students throughout

germany.

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: 2.7

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2007: 1.9 million students

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80%70%60%

50%

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40% of all students have a mean income of more than EUR 750 per month.

YOUNIQ offers an alternative to shared apartments or to the simple furnished

residential facilities provided by the universities.

40% of all students belong to the YOUNIQ target group.

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investments totalling

EUR 200 million for YOUNIQ

by 2010.

The fi rst 200 apartments will be operational by September 2009. From 2010 onwards,

at least 1500 to 2500 residential units are scheduled to be completed per year.

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YOUNIQ brings people together – networks for life.

the community is what makes the brand YOUNIQ strong.

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YOUNIQ Erlangen

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YOUNIQ Greifswald

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YOUNIQ Leipzig

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corporate governanceletter to the shareholders report by the supervisory board

The year 2008 was characterised by major turbulence on the international fi nancial markets,

as demonstrated by slumps on the major exchanges and sharp declines in the share prices

of renowned companies. The German share index, the DAX, dropped drastically. The DAX

closed the year at 4800 points – this was 40% lower than at the end of 2007. As a result,

the year 2008 will be remembered as the second-worst year in the 20-year history of the

index, 2002 being the worst year. Furthermore, the German real estate share index, the

DIMAX, also dropped by approximately 50% in 2008 compared with 2007. The DIMAX

index is published by the banking house Ellwanger & Geiger and is comprised of the shares

of companies generating their main income through the development and management of

real estate.

Regardless of these price losses on the national and international trading fl oors, ALTA FIDES

Aktiengesellschaft für Grundvermögen (“ALTA FIDES AG“), still managed to maintain a rel-

atively constant share price. Starting at a value of EUR 16.49 at the beginning of the year, it

rose to a maximum of EUR 17.00 in early January and then maintained a relatively constant

average value of EUR 14.38 throughout the course of the year. A share price of EUR 15.39

on 30th December 2008 constituted a successful conclusion to the year 2008.

the share

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fi nancial statement responsibility statement annual accounts alta fi des aggroup report fi nancial statement responsibility statement annual accounts alta fi des ag

Changes in the Shareholder Structure

On the 21st of December 2007, the CORESTATE German Residential Limited Fund, managed

by the private equity investor CORESTATE CAPITAL AG, (Zug, Switzerland) acquired a share-

holding of 14.18% through its indirect subsidiary REO-Real Estate Opportunities GmbH. The

fund later acquired call options on a further 14.82% of the capital stock of ALTA FIDES AG.

During the year 2008, the fund increased its stockholding in ALTA FIDES AG to a qualifi ed

majority of 76.24% by acquiring a further 61.3% shareholding stake in the Company. The

CORESTATE German Residential Fund subsequently submitted a mandatory offer of EUR

15.00 per share to the remaining shareholders. On the 7th of October 2008 (the end of

the acceptance term of the public mandatory offer), a further 19.71% of the shares in ALTA

FIDES AG were offered for sale and the fund henceforth acquired a total of approximately

95.94% of the capital stock of ALTA FIDES AG.

By the 15th of January 2009, the shareholding increased yet again to approximately 98.03% of

the total capital stock of ALTA FIDES AG. On account of the low remaining free fl oat, the ALTA

FIDES AG share is currently traded very thinly. This low-volume trading has led to a relatively

constant share price of between EUR 14.00 and EUR 15.00 per share.

Development of the share price

31.12.200805.11.200816.09.200828.07.200806.06.200816.04.200822.02.200803.01.2008

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letter to the shareholders the share

In the fi nancial year 2008, the Supervisory Board again carefully executed the tasks with

which it is entrusted according to the applicable law and the articles of association. It

regularly supported the work of the Management Board through consultations and mo-

nitored the management of ALTA FIDES AG. The Supervisory Board was involved in all

decisions of fundamental signifi cance to the Company at an early stage. The Management

Board informed the Supervisory Board regularly, as well as promptly, in the form of written

and verbal communications regarding all relevant questions of planning, the development

of current operations, risk management as well as the development of profi tability. Deviations

of the course of business from the plans and targets were explained to the Supervisory

Board in depth; the Supervisory Board then examined these deviations based on the com-

munications submitted. The Management Board co-ordinated the strategic alignment of

the Company with the Supervisory Board. During the period between the meetings of the

Dear Shareholders,

report by the supervisory board

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fi nancial statement responsibility statement annual accounts alta fi des agfi nancial statement responsibility statement annual accounts alta fi des aggroup report fi nancial statement responsibility statement annual accounts alta fi des ag

Supervisory Board the Management Board informed the Chairman of the Supervisory Board

of all subjects which were of importance to the Company. After thorough examination and

deliberation, the Supervisory Board passed resolutions on the reports and draft resolutions

by the Management Board in as far as this was required according to the applicable law and

the articles of association. In addition to the intensive work done in the context of regular

meetings, the members of the Supervisory Board other than the Chairman of the Supervisory

Board were also in regular contact with the Management Board outside the meetings. In

this way, they were able to thoroughly acquaint themselves with the current development of

business and the essential business transactions, as well as being able to offer their support

to the Management Board in an advisory capacity. Furthermore, the Chairman of the Super-

visory Board discussed the perspectives and the future alignment of the individual fi elds of

business in separate meetings with the Management Board.

In the course of the fi nancial year 2008, the Supervisory Board discussed the business

situation and the operative as well as strategic development of the Company and its busi-

ness fi elds in a total of four different meetings. The Management Board also informed the

Supervisory Board of special business transactions of fundamental importance for the

assessment of the Company’s situation and development in a timely manner. Additionally,

issues regarded as being important to the management of the Company were communi-

cated comprehensively, also during the periods between Supervisory Board meetings.

The Management Board submitted matters requiring approval to the Supervisory Board in

due time. In urgent cases, resolutions were adopted in writing after consultation with the

Chairman of the Supervisory Board. Confl icts of interest on the part of members of the

Management and Supervisory Board, which must be disclosed to the Supervisory Board

forthwith and of which the General Meeting must be informed, did not occur during the

year under review.

Focuses of the Deliberations

In the fi nancial year 2008 the Supervisory Board, in particular, dealt with the development

of the transactions of ALTA FIDES AG, important individual business transactions,

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the conclusion of intra-group domination and profi t transfer agreements between ALTA

FIDES AG as the dominating company and various subsidiary companies as controlled

companies. The Supervisory Board also discussed the comprehensive changes of the

Management and Supervisory Boards of the Company. Furthermore, the Supervisory

Board, in particular, dealt with the mandatory offer by GOETHE INVESTMENTS S.à.r.l.

required under current takeover legislation and issued a joint statement by the Manage-

ment and Supervisory boards. Furthermore, the Supervisory Board dealt, in particular,

with the approval of the annual and consolidated fi nancial statement for the business year

2007, the further developments in the business segment “YOUNIQ – Student Living”,

the amendment of the statute for the Management Board of the Company, approval of

the restructuring measures under corporate law, the preparation of the extraordinary

general meeting as well as approval of the conclusion of a contract regarding the provision

of a credit line between GOETHE INVESTMENTS S.à.r.l and the Company. In performing

these tasks, the Supervisory Board convened for a total of four meetings. No member

of the Supervisory Board was present in less than one half of the meetings. In urgent

cases, resolutions were adopted in writing after consultation with the Chairman of the

Supervisory Board.

Annual and Consolidated Financial Statement

KPMG AG Wirtschaftsprüfungsgesellschaft, Frankfurt am Main (formerly KPMG Deutsche

Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft) has audited the

annual fi nancial statement, the consolidated fi nancial statement and the report on the

situation of the Company and of the group for the fi nancial year 2008 which were prepared

by the Management Board. KPMG AG subsequently issued an unqualifi ed audit certifi cate.

In its meeting on 28th April 2009, and after inspection of the annual fi nancial statement,

the consolidated fi nancial statement and the report on the situation of the Company and

the group for the fi nancial year 2008, the Supervisory Board approved the result of the

audit by the fi nal auditor and adopted the annual fi nancial statement and the consolidated

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fi nancial statement. The annual fi nancial statement is henceforth taken as adopted. KPMG

AG Wirtschaftsprüfungsgesellschaft participated in the supervisory board meeting of the

28th of April 2009 and reported to the Supervisory Board and the Management Board

regarding the essential results of the audit.

Report by the Management Board on Relations with Affi liated Companies

according to Art. 312 AktG [German Exchange Act]

The Management Board of ALTA FIDES AG has forwarded the report on the relations with

affi liated companies, as well as the audit report prepared with regard to this by the fi nal

auditor, to the Supervisory Board in due time. This report is required according to art. 312

AktG.

According to the conclusion of the audit, the fi nal auditor has not raised any objections

against the report and has issued the following certifi cate:

“Following the audit and assessment in accordance with our duty we hereby confi rm that

1) the factual statements contained in the report are correct,

2) the performance of the Company with regard to the legal transactions listed in the

report was not inadequately high and

3) there are no indications of a considerably different evaluation than the one by the

Management Board with regard to the measures listed in the report.“

The report on the relations with affi liated companies was inspected by the Supervisory

Board. Based on its own inspection of the report, the Supervisory Board agrees to the

assessment by the fi nal auditor and does not raise any objections against the statement by

the Management Board regarding the relations with affi liated companies.

Changes to the Management Board and Supervisory Board

Norbert Ketterer and Christian Dunkelberg left the Management Board of the Company with

effect from the 15th of October 2008. Rainer Fuchs left the Management Board with effect

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from the 30th of November 2008. In its meeting on the 13th of October 2008, the Super-

visory Board appointed Jan Giessler to the Management Board of the Company with effect

from the 16th of October 2008. Shortly after the end of the fi nancial year 2008, Rudolf

Bartsch was appointed as a member of the Management Board of the Company with effect

from the 16th of February 2009.

After Prof. Dr. Willi Alda resigned from his position on the Supervisory Board and Dr. Raimund

Baumann resigned from his position as a deputy member of the Supervisory Board by

means of written notices, and with effect from the end of the 20th of October 2008 re-

spectively, Daniel Schoch was appointed as a member of the Supervisory Board for a term

of offi ce until the next general meeting of the Company by means of a ruling by Stuttgart

District Court on the 16th of October 2008. Mr. Schoch was elected Chairman of the

Supervisory Board by means of a written resolution of the Supervisory Board on the

23rd of October 2008.

By means of the written declarations of the 31st of October 2008, Natalie Wagner and Karl-

Georg Wentz resigned from their positions as members of the Supervisory Board with effect

from the end of the extraordinary general meeting of the Company on the 19th of Decem-

ber 2008. The extraordinary general meeting elected Daniel Schoch, Matthias Sprenker

and Martin Hitzer as members of the Supervisory Board for the remainder of the term of

offi ce of the resigned members. In the constitutive meeting of the Supervisory Board of 19th

December 2008, Daniel Schoch was elected chairman of the Supervisory Board. Matthias

Sprenker was elected as the fi rst deputy to the chairman, and Martin Hitzer was elected as

the second deputy to the chairman.

The Supervisory Board wishes to thank Prof. Dr. Willi Alda, Natalie Wagner and Karl-Georg

Wentz for their constructive and knowledgeable contributions as well as for their helpful

and trustworthy co-operation.

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Corporate Governance

The Management Board and the Supervisory Board have taken the requirements of the

German Corporate Governance Codex into account, with certain exceptions. With regard

to this, more detailed explanations are provided below in the framework of the Corporate

Governance Report and the Consolidated Management Report.

The joint Declaration of Compliance required under Art. 161 AktG is provided on the inter-

net at www.altafi des.de.

The members of staff of ALTA FIDES AG and its subsidiaries have contributed diligently to

the development of the Company in the year under review. The Supervisory Board would

like to thank and pay tribute for the work performed to the Management Board as well as

all members of staff.


On behalf of the Supervisory Board

Daniel Schoch

- Chairman -

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corporategovernancereport

Responsible and transparent corporate management and governance - based on sustainable

value creation (Corporate Governance) - takes a high priority at ALTA FIDES AG. Through

these principles we foster the trust of national and international investors, the fi nancial markets,

our business partners and members of staff as well as the trust of the general public. Effi cient

co-operation between the Management Board and the Supervisory Board, consideration of

shareholders’ interests as well as transparency in corporate communications constitute essen-

tial aspects of good corporate governance. The Management Board regularly, promptly and

comprehensively reports to the Supervisory Board regarding all relevant questions of corporate

planning and strategic development, the course of business as well as the current situation

of the group. In parallel, good corporate governance also includes responsible corporate risk

management. In the framework of its value-based corporate management, ALTA FIDES AG

employs systematic risk management in order to ensure that risks are detected and assessed

early on and, furthermore, that risk positions are optimised.

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fi nancial statement responsibility statement annual accounts alta fi des agfi nancial statement responsibility statement annual accounts alta fi des agfi nancial statement responsibility statement annual accounts alta fi des aggroup report fi nancial statement responsibility statement annual accounts alta fi des ag

The recommendations of the government commission “German Corporate Governance Codex“

(DCGK) constitute an established benchmark for the assessment of German listed companies’

corporate management and, hence, they constitute an important tool for the capital mar-

ket-oriented further development of transparency, comprehensibility, trust and control. The

Management and Supervisory Board of ALTA FIDES AG accept the principles of the German

Corporate Governance Codex of 6th June 2008 and these are implemented with some excep-

tions, which are explained in more detail below. These details are provided in the Declaration

of Compliance according to Art. 16 AktG, and issued by the Management Board and the

Supervisory Board on the 24th of April 2009.

Shareholders and General Meeting

The shareholders exercise their rights of Company co-administration and co-governance at

the general meeting. Each share in ALTA FIDES AG corresponds to one vote. In the general

meeting, the shareholders have the possibility of discharging their right to vote themselves

or have their wishes acted upon by an authorised representative of their choice, or by

an instruction-bound proxy of the Company. There is no maximum limit of the voting rights

held by an individual shareholder; moreover, there are no special voting rights. Every share-

holder is entitled to take part in the general meeting, to take the fl oor regarding the respec-

tive items on the agenda during these meetings and to request information on the matters of

the Company in so far as is required for the proper assessment of an item on the agenda.

Figure 2.3.1 DCGK: Due to the large volume of extensive documentation, the documents

relating to the domination and profi t transfer agreements with the respective subsidiaries that

were made available for inspection at the extraordinary general meeting on 19th December

2008 were not provided on the Company website.

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Collaboration between the Management Board and the Supervisory Board

The Management Board and the Supervisory Board co-operate closely and diligently for the

benefi t of ALTA FIDES AG in order to safeguard a suffi cient supply of information for the

Supervisory Board. The joint aim is to increase the value of the Company in a sustainable

manner.

Figure 3.8 DCKG: A D&O insurance has been taken out for the members of the

Management Board and the Supervisory Board. This insurance does not provide for any

retentions, as the Management Board and the Supervisory Board are already obliged to act

responsibly and properly by virtue of the rule of law.

Management Board

The Management Board of ALTA FIDES AG manages the Company under its own respon-

sibility. The work of the Management Board, the matters reserved for the entire Management

Board, as well as the required majorities for a resolution and transactions requiring approval

are established by the Supervisory Board in the statute for the Management Board.

In the fi nancial year 2008 the acquisition of control by GOETHE INVESTMENTS S.à.r.l.,

Luxembourg, which, in turn, is part of the corporate group of CORESTATE German

Residential Limited, St. Peter Port, Guernsey, (“Corestate“), resulted in changes to the

composition of the Management Board: Norbert Ketterer and Christian Dunkelberg left the

Management Board of the Company with effect from the 15th of October 2008. Rainer

Fuchs left the Management Board of the Company with effect from the 30th of November

2008. At the time of the publication of the Corporate Governance Report the Management

Board consisted of two members:

Jan W. Giessler,

born on the 10th of March 1965, Mr. Giessler was appointed as a member of the

Management Board of the Company for a term of twelve months on the 13th of

October 2008. His term of offi ce began on the 16th of October 2008 and will therefore

expire on the 15th of October 2009. The member of the Management Board holds sole

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power of representation with the power to conclude transactions with himself as the repre-

sentative of a third party on behalf of the Company. Furthermore, Mr. Giessler is a member

of the Management Board of both CAMPUS REAL ESTATE AG and PROFECTO AG.

Rudolf Bartsch,

born on the 13th of August 1965, Mr. Bartsch was appointed as a member of the Ma-

nagement Board of the Company for a term of 24 months on the 12th of February

2009. His term of offi ce began on the 16th of February 2009 and will, therefore,

expire on the 15th of February 2011. The member of the Management Board holds sole

power of representation with the power to conclude transactions, with himself as the

representative of a third party on behalf of the Company. Furthermore, Mr. Bartsch is

a member of the supervisory board of PROFECTO AG.

Figure 4.2.1 DCKG: After Rainer Fuchs left the Management Board of ALTA FIDES AG with

effect from the 30th of November 2008, Jan Giessler was the sole member of the

Man-agement Board for a transition period up to and including the 15th of February 2009.

Rudolf Bartsch was recruited as a result of the intensive search for qualifi ed executive

staff. Mr. Bartsch, was appointed as a further member of the Management Board of ALTA

FIDES AG with effect from the 16th of February 2009. It was decided that there should be

no chairman or spokesman of the Management Board due of the equality of the members.

Figure 4.2.2 / 4.2.3 DCKG: Jan Giessler, member of the Management Board, does not

receive any remuneration in connection with the performance of his offi cial duties. His

services for the company are remunerated in the framework of a transfer agreement

between ConLead GmbH and ALTA FIDES AG. According to this transfer agreement,

ConLead GmbH receives a fi xed monthly lump sum.

Figure 5.1.2 DCKG: The Management Board, the Supervisory Board and the Company

are of the opinion that the knowledge and experience of members of the bodies of the

Company should not be dispensed with simply because of age limitations. For this reason,

the Supervisory Board decides on the establishment of an age limit for the appointment of

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members of the Management Board on a case-by-by-case basis. However, there is currently

no requirement for an age limit on account of the current composition and age structure of

the Management Board.

Supervisory Board

The Supervisory Board of ALTA FIDES AG regularly advises, supervises and closely co-

operates with the Management Board in all matters of the affairs of the Company. As a

result of the acquisition of control by CORESTATE the composition of the Supervisory Board

changed in the fi nancial year 2008.

After Prof. Dr. Willi Alda resigned from his offi ce on the Supervisory Board and Dr. Raimund

Baumann resigned from his offi ce as a deputy member of the Supervisory Board, each with

effect from the end of the 20th of October 2008, Daniel Schoch was appointed as a mem-

ber of the Supervisory Board by means of a court order with effect from the 21st of October

2008. Mr. Schoch will remain in this position for a term until the end of the next general

meeting of the Company and, moreover, he was elected chairman of the Supervisory Board

by means of a written resolution by the Supervisory Board from the 23rd of October 2008.

Natalie Wagner and Karl-Georg Wentz resigned from their offi ces as members of the Super-

visory Board of the Company with effect from the end of the extraordinary general meeting

on the19th of December 2008. Daniel Schoch, Matthias Sprenker and Martin Hitzer were

elected members of the Supervisory Board for the remainder of the term of offi ce of the

resigned members of the Supervisory Board in the extraordinary general meeting on the

19th of December 2008.

Daniel Schoch,

born on 31st March 1974, Mr. Schoch is the chairman of the Supervisory Board of the

Company. Daniel Schoch is a management expert and member of the management

board of CORESTATE CAPITAL AG, Zug, Switzerland. Furthermore, he is a member

of the supervisory board of CAMPUS REAL ESTATE AG, PROFECTO AG, Stuttgart and

Roth & Rau Aktiengesellschaft, Hohenstein-Ernstthal.

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Matthias Sprenker,

born on 21st February 1954, Mr. Sprenker serves as the fi rst deputy chairman of the Super-

visory Board of the Company. Mr. Sprenker is the Managing Director of SECHEP INVEST-

MENTS HOLDING S.à.r.l., Luxembourg (City), Luxembourg. Matthias Sprenker is also a

member of the supervisory board of CAMPUS REAL ESTATE AG and PROFECTO AG,

Stuttgart.

Martin Hitzer,

born on 19th November 1968, Mr. Hitzer is the second deputy chairman of the Supervisory

Board of ALTA FIDES AG. He is a lawyer at the practice of Freshfi elds Bruckhaus Deringer

LLP, Düsseldorf. Martin Hitzer is also a member of the supervisory board of CAMPUS REAL

ESTATE AG, Stuttgart, and of Fette GmbH, Schwarzenbek.

Figure 5.3 DCKG: The entire Supervisory Board is regularly informed of the essential devel-

opments of ALTA FIDES AG. Since the Supervisory Board consists of only three members

according to its statute, and in view of the scope of the business activities of the Company,

the establishment of committees does not appear to be reasonable.

Figure 5.4.1 DCKG: The Company is convinced that, rather than placing a limit on the

maximum age of members of the Supervisory board, knowledge and experience as well

as quality and qualification are important. For this reason, a fixed age limit has not

been established for members of the Supervisory Board. However, there is currently no

requirement for an age limit on account of the present composition and age structure of the

Supervisory Board.

Figure 5.4.6 DCKG: The total compensation for the members of the Supervisory Board did

not provide for any performance-related components for the fi nancial year 2008. Currently,

a performance-related structure for the compensation of members of corporate bodies is not

in line with the Company’s interest in fast growth. As in the past, the annual general meet-

ing of the 1st of August 2008 adopted a resolution granting compensation to the amount

of EUR 10,000 each to all members of the Supervisory Board for the fi nancial year 2007.

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Transparency

In order to ensure the highest-possible degree of transparency ALTA FIDES AG has the

aim of providing the same information to all target groups concurrently. For this reason, all

press releases and ad-hoc communications are published on the website of ALTA FIDES

AG (www.altafi des.de). Additionally, our shareholders are informed of essential dates

through a fi nancial calendar that is published on the website. Even before the annual

general meeting, the shareholders are comprehensively informed regarding events of the

past fi nancial year as well as of the individual items on the agenda with the management

report and the invitation to the general meeting.

Furthermore, all other reports and documents required by law for the general meeting are

provided in conjunction with the agenda in an easily accessible format on the Company

website.

Figure 6.7 DCKG: Certain publications (quarterly reports, mid-year fi nancial reports and the

annual fi nancial statement) were not listed on the basis of a specifi c date but on the basis of

the specifi cation of the month of the respective publication in the fi nancial calendar of ALTA

FIDES AG for the fi nancial year 2008.

Accounting and Auditing

KPMG AG Wirtschaftprüfungsgesellschaft (formerly KPMG Deutsche Treuhand-Gesellschaft

Aktiengesellschaft Wirtschaftsprüfungsgesellschaft), Frankfurt am Main, was elected as the

fi nal auditor and as the auditor for the consolidated fi nancial statement for the fi nancial year

expiring on the 31st of December 2008 and commissioned by the Supervisory Board to

audit the annual and consolidated fi nancial statement in the annual general meeting 2008.

Figure 7.1.2 DCKG: The annual and consolidated fi nancial statement as well as the interim

reports were published in compliance with the statutory deadlines. The term for the publi-

cation of the consolidated fi nancial statement recommended in the codex was not adhered

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to since this would have necessitated considerable additional costs and resources. However,

in the future it is planned to prepare this or a preliminary consolidated fi nancial statement

within the term specifi ed by the Codex.

Figure 7.1.3 DCKG: Currently, there are no share option programmes or similar securities-

oriented incentive systems. As far as the Company is aware, the major shareholder GOETHE

INVESTMENTS S.à.r.l. has established a benefi t system to incentivise the members of the

Management Board. This benefi t system is tied to the development of the market value of

the ALTA FIDES share.

Declaration of Compliance according to art. 161 AktG

The Declaration of Compliance is published together with the German Corporate Governance

Codex on the internet at www.altafi des.de.

In the current fi nancial year, good corporate governance once again constitutes the focus of

the work of the Management Board and the Supervisory Board. ALTA FIDES AG will conti-

nue to align itself with the German Corporate Governance Codex and implement the Codes

accordingly.

Compensation Report

The Compensation Report for the year 2008, which the Management Board and the Super-

visory Board issue within the framework of the Corporate Governance Report, is provided in

section 5 of the Consolidated Management Report. The Supervisory Board has thoroughly

inspected the Compensation Report and adopts the statements contained therein. In order

to avoid repetitions a renewed inclusion at this point is deemed unnecessary. The statements

included in the consolidated management report also concurrently constitute an integral

component of the Corporate Governance Report.

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the share report by the supervisory boardletter to the shareholders report by the supervisory boardletter to the shareholders the shareletter to the shareholders the share report by the supervisory board

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bericht des aufsichtsratsdie aktiebrief an die aktionäre

Shareholdings by Members of the Management Board and of the Supervisory

Board

According to Art. 15a WpHG [German Securities Trading Act], the members of the

Management Board and the Supervisory Board of the Company are legally obliged

to inform the Company of the acquisition or sale of shares in ALTA FIDES AG henceforth.

During the 2008 fi nancial year, ALTA FIDES AG received the following communications:

On 3rd January 2008, Norbert Ketterer informed the Company that he had granted an

option regarding the acquisition of the 1,044,500 shares personally held by him. This option

should be exercised by the 31st of December 2009. The exercise price amounts to

EUR 13.50. This communication was published on the 9th of January 2008.

Furthermore, Norbert Ketterer informed the Company on the 3rd of January 2008 that he had

sold 1,000,000 shares off-exchange to Zweite REO-Real Estate Opportunities GmbH on the

21st of December 2007. This communication was published on the 9th of January 2008.

On the 31st of July 2008, Norbert Ketterer informed the Company that he had sold 2,293,150

shares to Corestate companies, off–exchange, on the 25th of July 2008. This communication

was published on the 31st of July 2008.

Furthermore, Natalie Wagner informed the Company on the 31st of July 2008 that she had

sold 52,500 shares to Corestate companies off-exchange on the 25th of July 2008. This

communication was also published on the 31st of July 2008.

As of the 31st of December 2008, the members of the Management Board and the Supervisory

Board held no shares in ALTA FIDES AG.


On behalf of the Management Board On behalf of the Supervisory Board

Rudolf J. Bartsch Jan W. Giessler Daniel Schoch

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fi nancial statement responsibility statement annual accounts alta fi des agfi nancial statement responsibility statement annual accounts alta fi des agfi nancial statement responsibility statement annual accounts alta fi des aggroup report fi nancial statement responsibility statement annual accounts alta fi des agkonzernlage-bericht

konzernabschluss konzern- bestätigungsvermerk

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1.1 Overall economic situation

Throughout the year 2008, the gross domestic product (GDP) of Germany increased, in

real terms, by 1.3%. In this context, a commercially strong start to the year was offset by

the considerably weaker economic performance which emerged from the second quarter

of 2008. Following a strong increase of 1.5% during the fi rst quarter, the gross domestic

product of Germany declined by 0.5% during the second and third quarters of 2008. This

trend continued reaching 2.1% in the fi nal quarter of the year. As a result, the economic

research institutes recorded the biggest quarter-on-quarter GDP decline in Germany since

reunifi cation.

The reasons for the beginning economic slump were twofold: a recession of the global eco-

nomy, as well as serious systemic problems within the US fi nancial system and the impact

1. Framework Conditions

Summary of the Management Report of ALTA

FIDES Aktiengesellschaft für Grundvermögen and

of ALTA FIDES Group for the Financial Year 2008

consolidated management report

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of these problems on the international money and capital markets. Because of the interna-

tional nature of global trade and fi nancial markets, and with exports accounting for 48% of

the German gross domestic product these aspects have also taken their toll on Germany.

As a result, Germany suffered a slump in exports and company investment was massively

curtailed. As a consequence, companies have started to introduce reduced working hours

and, in some cases, a reduction in headcount through layoffs.

This demonstrated that the turbulence on the global fi nancial and business markets

had reached the German labour market by the end of 2008. However, the German labour

market was well placed to deal with the economic problems for a long time so that,

initially, Germany only experienced a slow-down in the growth of the number of people

in employment. For example, in March 2008 the number of people in employment in-

creased by 1.7% when compared to the previous year. This growth was reduced to as little

as 0.9% in December when compared with the same month of the previous year. At the end

of December 2008, the number of people in employment only amounted to 40.37 million,

which corresponds to a decline from the maximum of 40.41 million in October 2008, after

adjustment for seasonal effects.

1.2 The real estate market in 2008

During the fi rst three quarters of 2008, the international real estate shares still managed to

exceed the general equity markets by 900 basis points. Against the background of the in-

ternational fi nancial crisis and the massive declines on the stock exchanges, the share prices

underwent largely the same negative development as those of the general equity markets. In

October 2008, the global real estate shares in the UBS Investors Index declined by 27.3 %,

while the MSCI World Equity Index fell by 16.3%.

The real estate industry transaction market saw similar sharp declines. After the record year

of 2007, the transaction volume declined by approximately 60% in 2008.

In the fourth quarter of 2008, the transaction market came to an almost complete standstill.

Sales were cancelled on account of insuffi cient fi nancing and a price collapse. This became

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particularly apparent in the residential real estate market. While roughly 15,000 apart-

ments were sold at an average price of EUR 62,740 during the fi rst quarter of 2008, in the

last three months of the year this number declined to 4,425 units sold at an average price

of EUR 57,610.

In total, only 92 packages consisting of more than 100 units each were sold on the German

residential real estate market in 2008. With a total volume of EUR 4.8 billion, the focus of the

transactions was on North Rhine-Westphalia with the sale of the State Development Corpora-

tion, followed by Saxony and Berlin. On the other hand, the commercial transaction volume

amounted to EUR 25.9 billion meaning that a total invested volume of EUR 21.1 billion was

reached in 2008. In this context, a considerable shift from portfolio deals towards individual

transactions could be observed. More than 80% of the transaction volume was realised

through the sale of individual real estate properties (the corresponding fi gure for 2007 was

approximately 45%), while portfolio sales accounted for only 17 %.

This demonstrates that the global ‘credit crunch’ and its associated impacts are now also

being felt in the German real estate industry. This is also shown by the King Sturge Real

Estate Economy Index, which is published every month. In the December survey of 1,000

market stakeholders, the index of the situation in the real estate industry only reached 40.7

points. The index had reached 48.2 points during the previous month and even reached

110.1 points in January 2008. The unprecedented low of the survey-based climate in the

real estate industry was largely due to the collapse of the investment market. In line with the

general disposition in the industry, based on hard economic facts the situation in the real

estate industry also reached a new record low in 2008 and fell from 136.7 to 126.9 points

in December 2008. During the previous year this index of activity in the real estate industry

had reached 184.5 points.

Against the backdrop of the increased diffi culties of obtaining fi nancing, the change in the

buyers’ market, which had already begun, continued. While this market had largely been

dominated by private equity investors that had acquired large portfolios by using external

fi nance, obtained at favourable interest rates since the year 2005, institutional investors,

insurances and pension funds have increasingly begun to dominate the investors’ market

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again. This is due to the reversal of the interest policy as well as the tightening of liquidity in

external fi nance since the beginning of 2008.

In addition to this change in the real estate investment landscape, in 2008 a clear trend

towards new residential facilities in cities, an increasing awareness of energy effi ciency as

well as a return to the principle of sustainable asset management emerged. These develop-

ments will continue to be important in 2009.

1.3 Competitive situation

Despite the diffi cult situation on the global real estate and fi nancial markets ALTA FIDES

Aktiengesellschaft für Grundvermögen (“ALTA FIDES AG“) has established a promising position

with the Company re-alignment to student residential facilities under the brand YOUNIQ.

There is a major potential for growth for ALTA FIDES AG in the segment of student residen-

tial facilities. ALTA FIDES AG has a decisive competitive advantage in this market which is

currently developing on account of the established integrated business approach and its

positioning on a national level. Even though there are some local providers, these do not

exceed the status of pure project development businesses and, hence, do not directly com-

pete with ALTA FIDES AG. The same also applies to the German National Association for

Student Affairs, which by its nature differs considerably from ALTA FIDES AG - particularly

on account of the real estate properties offered and, hence, the target group aimed at.

ALTA FIDES AG was established in 2000 and has its registered offi ce in Stuttgart and a sub-

sidiary offi ce in Leipzig. The Company operates in the business segments of “Renting and

Trading Real Estate“ (formerly “Trading and Own Portfolio“), “Project Development“ as well

as “Non-Performing Loans“ and “YOUNIQ – Student Living“ (formerly “CAMPUS“).

In the business segment of “Renting and Trading Real Estate“ ALTA FIDES AG has built a

high-value stock of real estate properties comprising in total 113,140 square metres of largely

2. Business activities

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listed and reconstructed apartment buildings in good locations. No further acquisitions were

made in the year 2008. Rather, the focus was on the establishment of active asset management

in order to utilise the future potential for value creation entailed in the portfolio.

In the year 2008 the business segment of “Project Development“, which focuses on the

acquisition of high-value listed real estate properties in choice locations, was continued

at the existing level. After properties are acquired, they are lavishly renovated and sold to

capital investors and owner-occupiers through a national distribution network. In this con-

text, ALTA FIDES AG acquired “Liechtensteiner Gärten“ [“Liechtenstein Gardens“], a listed

property with a living space of approximately 8,140 square metres distributed over circa 102

residential units, at the beginning of 2008.

However, ALTA FIDES AG does not plan to actively participate in this market in the future

– the current project portfolio is currently being implemented but new projects will not be

acquired in this segment.

In the fi nancial year 2008 the business segment of Non-Performing Loans was examined

intensively with regard to its potential for the future and, as a result of this examination, it

will no longer be actively pursued.

The focus of the future business activities of ALTA FIDES AG is on “YOUNIQ – Student

Living“. ALTA FIDES AG has already established a position as a ‘fi rst mover’ in this market

segment. In the coming years it will continue to strongly expand its leading position on the

market under the brand YOUNIQ.

All management and administrative functions of the group are refl ected in the business seg-

ment “Corporate“. Because of the company’s structure under corporate law, all company

personnel are employed in this segment – at the moment, all staff are exclusively employed

by the holding, ALTA FIDES AG.

These functions provide required services (administration, accounting, project development,

rental services, distribution, etc.) for the individual business segments and in this way support

them in the operative implementation of the respective strategy of the business segment.

brief an die aktionäre die aktie bericht des aufsichtsrats corporate governance

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2.1 Business segment “YOUNIQ – Student Living”

The YOUNIQ product

ALTA FIDES AG sees its lasting competitive strengths and economic potential in the fi eld of

student accommodation and the establishment of this segment as an independent real estate

asset class. ALTA FIDES AG is already involved in the development and management of

student residential facilities throughout Germany under the brand YOUNIQ. Three properties

in Greifswald, Leipzig and Erlangen with a total of more than 500 residential units are to be

completed soon and will be operational by the summer term of 2009. Construction for other

projects will commence shortly, while others are in the specifi c planning stage. More than

EUR 200 million are to be invested in student living in 2009/10 and the annual investment

volume will be further increased during subsequent years. In total, at least 1,500 to 2,500

residential units are scheduled to be completed per annum as of 2010.

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Even today there is a housing shortage in most university towns. The Associations for Student

Affairs alone estimate that at least 20,000 additional apartments are needed. Furthermore,

Germany is becoming more popular with foreign students. After the USA and Great Britain,

Germany ranks third among the most popular sites for university education worldwide

– today, 10% of all students studying in Germany come from abroad. Foreign students, in

particular, are interested in furnished student residential facilities for a fi xed term. Additio-

nally, the political decision-makers across all political parties wish to increase the numbers

of students attending German universities in the framework of the so-called University Pact

since the number of undergraduates in Germany is, at 39%, considerably below the OECD

average of 56%.

According to surveys by King Sturge and Ernst & Young, the demand for student apartments

will increase in the coming years. This is due to, amongst other factors, the high numbers

of school-leavers from years with high birth rates and the switch to university entrance

exams after 12 instead of 13 years of school. It is forecasted that the number of students

will increase from 2 million in the winter term of 2008/2009 to 2.5 - 2.7 million in 2013/14.

Several Forsa studies commissioned by ALTA FIDES AG and comprising target group

inquiries and tests of sample apartments have proven the high demand for student residen-

tial facilities in Germany.

In view of the direct and indirect economic importance of universities for the towns they are

situated in, and because of the partly chaotic housing situation at the beginning of every

term, investors can be sure of ample good will and support for the implementation of

projects for student residential facilities on the part of political decision-makers and

university administrations.

The sites: The YOUNIQ towns

In general, a university town is suitable as a YOUNIQ site if the share of students among the

overall population is high and the supply, especially of small apartments, is extremely short.

Also, the level of the local rents must permit a commercially profi table realisation and

operation of the project. This is usually the case in traditional, renowned and expanding

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university sites in western Germany, such as Heidelberg, but also in less traditional university

towns, such as Erlangen.

Overall, the situation in the old federal states is much more heterogeneous than in the new

federal states. In the new federal states, the potential tends to be somewhat lower because

of generally lower rent levels and a comparatively lower demand. However, there are also

exceptions, such as Greifswald. Here, there is a very renowned university, the town has a

very high share of students as a proportion of the overall population and there is a serious

housing shortage at the beginning of each semester.

Furthermore, sites with a chronic housing shortage are particularly attractive. A small

number of apartments with a living space of less than 40 square metres also makes sites

attractive for YOUNIQ. An interesting starting point comes from sites with a high number

of inhabitants and a generally high rent level as well as with a high degree of political and

private support.

The most important selection criteria for housing decisions specifi ed by students in the

Forsa surveys leads to the following conclusions with regard to the location of the student

residential facility projects at the respective site:

– Location/environment (54%)

– Distance to university (51%)

– Accessibility of public transport network (45%)

– Quiet environment (28%)

– Part of town (17%)

– Student environment (15%)

Ideally, the properties should be located in a part of town which has an urban character or

is shaped by student life. It should be close to the university and/or within easy reach of the

public transport network.

The market as seen by institutional investors

Because of the very high demand for student apartments and in view of a generally high and

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increasing rent level, a large number of university sites are ideal for long-term and sustainable

investments in student apartments. The minimisation of construction and operating costs

constitutes the precondition for comparatively high continuous payouts.

ALTA FIDES AG achieves this through very good market contacts in the acquisition of plots

of land and existing properties, through construction cost control from strict project

management as well as through excellent purchasing management, such as for furnishing

the apartments (e.g. bathrooms, kitchens, furniture) and also through effi cient continuous

management of the properties. Furthermore, student real estate yields a systematic rate of

rent increase: according to information by the German University Information System and

the German National Association for Student Affairs, the costs of renting student accommodation

increased by between 5.3% and 11.0% (depending on the form of property) during the

years 2003 and 2006.

From the institutional investors’ perspective the asset type of student real estate entails the

following advantages:

- Stable cash fl ows coming from a high demand for the apartments, independent of the

economic situation

- Secure cash fl ows through a strong diversifi cation on account of a broad base of

tenants

- Constant adjustment of the rent level on the market on account of short leasing terms

- Low risk of non-occupancy on account of an acute and increasing shortage of student

housing

- Low risk of vacancies between lettings since apartments are let on a term-by-term basis

Because of these advantages YOUNIQ embodies a new real estate asset type which, as

a niche product, promises institutional and capital investors moderate but secure returns

independent of the long-term economic outlook.

In the short term ALTA FIDES AG will sell selected properties to fi nal institutional investors.

There is a very high degree of interest in directly investing in such properties on the part of

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German core investors, such as insurances and pension funds, as well as of wealthy private

investors. In this context, forward deals and co-investments also appear feasible. Moreover,

individual residential units in existing listed properties, which, however, form an exception

in the portfolio, are also sold to capital investors.

The product features in detail: YOUNIQ is more than accommodation

With YOUNIQ, ALTA FIDES AG has developed an integrated product for the students of

today and tomorrow. In order to fulfi l the needs of students with its offer ALTA FIDES AG

regularly carries out comprehensive fi eld research – for example with renowned research

institutes such as Forsa, or consultancies such as Ernst & Young und ConLead GmbH.

The result is a form of residence which transcends the mere letting of apartments to

students and indulges the spirit and lifestyle of today’s student generation, as well as offering

an optimum learning environment. YOUNIQ not only represents convenient and affordable

student residences but also represents a high-value support and additional value concept.

This concept includes sports and leisure facilities in addition to educational offerings and

career counselling. As a result of this, YOUNIQ is not in direct competition with the free

housing market, and to an even lesser degree in competition with the Associations for

Student Affairs, but rather a completely new housing concept.

YOUNIQ offers an urban, convenient and affordable lifestyle with a timeless design to a

new generation of students. However, YOUNIQ encompasses more than just residential

facilities: YOUNIQ enters into the spirit of the times and refl ects the attitude which today’s

student generation has towards life. YOUNIQ takes these concepts and develops them into

a community - real estate property with real student life! YOUNIQ offers an individual life-

style within a community.

The units consist of independent apartments. Each apartment has its own bathroom and a

complete kitchen with a ceramic glass hob, microwave oven and refrigerator. Each facility has

its own communal areas, such as a lounge with reception desk. This leads to an additional

value concept. This concept also includes various additional benefi ts, usually comprising

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corporate governancebericht des aufsichtsratsdie aktiebrief an die Aktionäre

internet access, ”Scout Service” and common rooms depending on the respective site. Life

in a YOUNIQ facility entails living in a modern apartment facility close to the university,

permitting individual personal development in combination with a shared student living and

learning experience.

The YOUNIQ apartments are fully furnished and immediately ready for occupation. The

rental agreements address the needs of today’s student generation and allow for short

periods of notice and rental on a term-by-term basis. The costs of heating and decorative

repairs are included in the rental contract.

The use of high-value materials in the units ensures advantages for both tenants and

operators. Particular attention has been paid to quality, durability and energy effi ciency. For

example, this includes using materials for noise abatement, using materials requiring low

maintenance, and the use of renewable energies. On average, a typical apartment has an

area of no less than 23 square metres and rental costs are between EUR 350 and EUR 450

(including heating) per month.

The service and additional value concept: The YOUNIQ world

YOUNIQ stands for individual living without having to forego a communal student life. In

this sense, YOUNIQ offers students access to a comprehensive service and additional

value concept comprising the elements of community, learning, career and job, social

commitment, leisure and sports.

This additional value concept is based on the idea of establishing a community of like-

minded students going beyond a pure, traditional neighbourhood concept. In this way,

structures which are known in the target group (StudiVZ, Xing, etc.) and fi lled with life in the

business world (for example, the Rotary club) are put into service and moved to a different

level.

The YOUNIQ additional value concept begins with advantages for regional service offers

and extends to joint leisure activities (for example sports and social activities), and even

to comprehensive career advice. These additional services, the unique character of the

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YOUNIQ apartments as well as target group oriented branding, generate a lifestyle which

sets YOUNIQ apart from mere residential facilities: YOUNIQ encompasses not just residential

facilities, but studying and life too!

In parallel, this comprehensive service and additional value concept creates an offer which

is also attractive to the students’ “sponsors“, or parents: “My child has the environment

which helps him or her to focus on his or her studies. My child is living in a social environ-

ment which creates a community of peers, motivates young people to study successfully,

lays important foundations for careers and helps them to establish networks early on”.

2.2 Restructuring on the level of the shareholders and of the Company

Expansion of the Corestate shareholding and mandatory offer

On the 21st of December 2007, Norbert Ketterer sold 1,000,000 ALTA FIDES shares and

granted a call option regarding the sale of a further 797,750 ALTA FIDES shares to an indirect

subsidiary of CORESTATE German Residential Limited, Zweite REO-Real Estate Opportunities

GmbH. Norbert Ketterer irrevocably authorised Zweite REO-Real Estate Opportunities GmbH

to exercise the voting rights in these option shares in its own interest. On the 27th of June 2008

Zweite REO-Real Estate Opportunities GmbH sold the 1,000,000 ALTA FIDES shares it held

on account of this transaction to GOETHE INVESTMENTS S.à r.l.

Furthermore, CORESTATE CAPITAL Beteiligungs GmbH also acquired a call option regarding

the purchase of 246,750 ALTA FIDES shares from Norbert Ketterer on the 21st of December

2007. Norbert Ketterer irrevocably authorised CORESTATE CAPITAL Beteiligungs GmbH to

exercise the voting rights in these option shares in its own interest. On the 25th of July 2008

this call option, including the authorisation to exercise the voting rights, was taken over by

GOETHE INVESTMENTS S.à r.l. by way of a transfer of contract.

On the 25th of July 2008 Zweite REO-Real Estate Opportunities GmbH exercised its call

option regarding the acquisition of 797,750 ALTA FIDES shares, which had been granted by

Norbert Ketterer, who then transferred these shares to Zweite REO-Real Estate Opportunities

GmbH on the 6th of August 2008. Additionally, GOETHE INVESTMENTS S.à r.l. also

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exercised the call option regarding the acquisition of 246,750 ALTA FIDES shares on the

25th of July 2008. These shares were transferred to GOETHE INVESTMENTS S.à r.l. by

Norbert Ketterer on 6th August 2008.

During the period from mid-April 2008 until the 16th of July 2008 the representatives of

CORESTATE German Residential Limited and of CORESTATE CAPITAL AG negotiated with

representatives of ALTA FIDS AG regarding the takeover of ALTA FIDES AG through a joint

acquisition vehicle.

On the 21st of May 2008, ALTA FIDES AG, on the one hand, and CORESTATE CAPITAL

AG and SECHEP INVESTMENTS HOLDING S.à r.l., Luxembourg, (an indirect subsidiary of

CORESTATE German Residential Limited), on the other hand, concluded a legally binding

memorandum of understanding regarding the takeover of ALTA FIDES AG. According to this

memorandum of understanding, the takeover was to be executed by way of a voluntary

takeover bid, within the meaning of the German Securities Acquisition and Takeover Act.

Based on the memorandum of understanding CORESTATE CAPITAL AG and SECHEP

INVESTMENTS HOLDING S.à.r.l. carried out a due diligence examination of ALTA FIDES

AG during the period from 29th May 2008 to 13th June 2008. This examination was rest-

ricted in terms of time and content. Following the due diligence examination, negotiations

were continued with ALTA FIDES AG regarding the execution of a voluntary takeover bid.

On the 18th of June 2008, an information meeting was held between representatives

of CORESTATE CAPITAL AG, CORESTATE German Residential Limited and the members

of the Management Board of ALTA FIDES AG, in which the latter provided information on

the situation of ALTA FIDES AG. In a letter of 16th July 2008 the Management Board of ALTA

FIDES AG informed GOETHE INVESTMENTS S.à r.l. and SECHEP INVESTMENTS HOLDING

S.à r.l. that the consideration offered thus far was not completely aligned with the intrinsic

value of the ALTA FIDES shares and that, therefore, the Board expected a proposal regarding

a higher bid price from GOETHE INVESTMENTS S.à r.l..

Since CORESTATE German Residential Limited and CORESTATE CAPITAL AG were still

interested in the acquisition of control over ALTA FIDES AG, they then held talks regarding the

acquisition of ALTA FIDES shares with major shareholders of ALTA FIDES AG. For this reason,

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GOETHE INVESTMENTS S.à r.l. concluded agreements regarding the acquisition of a total of

3,276,546 ALTA FIDES shares (corresponding to approximately 46.48% of the current capital

stock of ALTA FIDES AG) with Norbert Ketterer, uniVersa Krankenversicherung a.G., uniVersa

Lebensversicherung a.G., Gerd Eichinger, Dr. Raimund Baumann, Proprietary Partners Fund

Ltd., Karl Ketterer, Natalie Wagner and Little Rock Business Corp. on the 25th of July 2008.

The transfer of these ALTA FIDES shares to GOETHE INVESTMENTS S.à r.l. was effected sub-

ject to the condition precedent of the payment of the purchase price of EUR 15.00 for each

ALTA FIDES share by GOETHE INVESTMENTS S.à r.l. Furthermore, GOETHE INVESTMENTS

S.à r.l. also obtained a call option for the acquisition of a further 246,750 ALTA FIDES shares

held by Norbert Ketterer. This call option included a shareholder’s proxy regarding the option

shares by way of a transfer of contract from CORESTATE CAPITAL Beteiligungs GmbH on the

25th of July 2008. As a result, GOETHE INVESTMENTS S.à r.l. acquired control of ALTA FIDES

AG within the meaning of art. 29 paragraph 2 WpÜG on the 25th of July 2008 since it, hence,

held 64.16% of the voting rights in ALTA FIDES AG or since these voting rights were assigned

to it according to art. 30 paragraph 1 sentence 1 fi g. 5 WpÜG or according to art. 30 para-

graph 1 sentence 1 fi g. 6 WpÜG. For this reason, GOETHE INVESTMENTS S.à r.l. announced

its acquisition of control of ALTA FIDES AG on the 31st of July 2008.

On account of this acquisition of control GOETHE INVESTMENTS S.à r.l. was obliged to sub-

mit a public takeover bid regarding the ALTA FIDES shares according to art. 35 paragraph 2

WpÜG. The corresponding bid document was published by GOETHE INVESTMENTS S.à r.l.

on the 9th of September 2008 with an initial term of acceptance from the 9th of September

2008 until the 7th of October 2008. During the term of acceptance GOETHE INVESTMENTS

S.à r.l. was offered a further 19.71% of the ALTA FIDES shares for sale at a price of EUR 15.00

each so that upon expiry of the term of acceptance GOETHE INVESTMENTS S.à r.l. together

with its affi liate companies held approximately 95.94% of the ALTA FIDES shares.

The original term of acceptance was extended until the 15th of January 2009. During this

extended term of acceptance GOETHE INVESTMENTS S.à r.l. was offered a further 147,287

ALTA FIDES shares and as a result of this, GOETHE INVESTMENTS S.à r.l. and its affi liates now

hold approximately 98.03% of all shares in ALTA FIDES AG.

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Extraordinary General Meeting on the 19th of December 2008

In the framework of the extraordinary general meeting of ALTA FIDES AG on the 19th of December

2008, various amendments to the Articles of Association were adopted. Essentially, these amend-

ments concern adjustments to changes of law which are now in effect, as well as clarifi cations.

These amendments are intended to align the Articles of Association of the Company with the state

of the art of the articles of association of a listed joint stock corporation. Moreover, they are

intended to improve clarity within the Articles of Association. Furthermore, Daniel Schoch, Matt-

hias Sprenker and Martin Hitzer were elected as members of the Supervisory Board of ALTA FIDES

AG in the extraordinary general meeting. Additionally, resolutions regarding the approval of a total

of 14 domination and profi t transfer agreements by and between ALTA FIDES AG as well as its

direct and indirect subsidiaries were adopted in the framework of extraordinary general meeting.

These fourteen domination and profi t transfer agreements e.g. pursue the aim of achieving tax

savings for ALTA FIDES group to an amount of approximately EUR 1 million. All of these

agreements were registered with the competent commercial registers before the end of the

fi nancial year 2008, so that the provisions regarding the transfer of profi ts were already applicable

for the entire 2008 fi nancial year with retroactive effect enabling the aforementioned tax savings.

2.3 Staff

On average, ALTA FIDES AG employed a staff of 18 people in 2008 (cf. fi gure 5.6 in the

Notes to the Consolidated Financial Statement).

Information on the fundamental principles relating to the compensation system is provided

in the Compensation Report. For both ALTA FIDES AG and the entire ALTA FIDES Group,

the fi nancial year 2008 was shaped by the change of the majority shareholder as well as the

extraordinary factors and the new strategic alignment connected with these.

3.1 Group profi t situation

The 2008 fi nancial year was characterised by various extraordinary factors and valuation

adjustments on account of the change of the majority shareholder and the new strategic

3. Course of business

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alignment of the Company. As a result of this, the profi t and loss account for the fi nancial year

2008 shows a loss of EUR 11,146,128 (previous year – profi t: EUR 6,125,149).

The loss for the 2008 fi nancial year is due to a considerable degree to one-off expenses. Additio-

nally, the loss is due to the revision of the amounts stated for assets in the framework of the

acquisition of the majority of shares by GOETHE INVESTMENTS S.à r.l., Luxembourg on the 25th

of July 2008. In connection with the change of the majority shareholder, the accounting methods

and assessment principles were checked with regard to the previous year and – in as far as necessary

– these were corrected retrospectively in line with the provisions of IAS 8. The correction resulted

in an impact on results of in total EUR 5,608,034, so that the annual net profi t for the group for

2007 was reduced accordingly to EUR 6,125,149 (profi t before corrections: EUR 11,733,182).

When adjusted for extraordinary factors the annual net profi t for the group for 2008 amounts to

EUR 1,496,474 and was therefore reduced by EUR 4,628,675 after correction, when compared

to the previous year:

Extraordinary factors and corrections

(EUR) 2008 2007 Change

Group result (before extraordinary factors and corrections) (11,146,128) 11,733,182 (22,879,311)

Revision of values stated for assets and debts as of

31st July 2008 and 31st December 2008

Depreciations on inventories 5,204,275 - 5,204,275

Depreciations on production orders 1,287,848 - 1,287,848

Reduction in value of investment property 1,908,751 - 1,908,751

Depreciation of unusable tax 1,499,183 - 1,499,183

loss carry-forward

(art. 8c KStG n.F. [German Corporate Tax Act, new version]) 3,296,082 - 3,296,082

Corrections as per IAS 8 - (7,898,639) 7,898,639

2,050,011 3,834,544 (1,784,533)

Reverse effect from deferred taxes (553,537) 2,290,605 (2,844,142)

Consolidated profi t (adjusted) 1,496,474 6,125,149 (4,628,675)

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The extraordinary factors regarding depreciations and reductions in value on assets – in as

far as the values are not the subject of retrospective corrections according to IAS 8 – result

from the fact that all real estate properties held as capital investments, and real estate

properties held for development and sale were re-evaluated with the help of valuation

expertises by the internationally active real estate experts CB Richard Ellis GmbH, Frankfurt

am Main, according to accepted valuation methods as of the valuation date of the 31st of

July 2008. The valuations made before the 31st of July 2008 were structurally relatively

simple and tended to lead to the higher values as stated on the balance sheet.

Due to the current cost controlling procedures, the total costs and the results regarding

production orders cannot be reliably determined. Therefore, revenue is reported here only

to the amount of the costs incurred – retroactively as of the 2007 fi nancial year. In the

framework of the loss-free valuation of the production orders, additional depreciations on

three production orders to an amount of in total EUR 1,287,848 were required as of the

31st of December 2008.

Deferred tax assets regarding tax loss carry-forwards from the previous years were written

off entirely. This is because they cannot be used any more on account of the change of the

majority shareholder in ALTA FIDES AG (art 8c KStG n.F. [German Corporate Tax Law, new

version]).

The additional expenses for legal and professional fees as well as for services procured are

connected with the strategic and structural re-alignment of the future core business segment

“YOUNIQ – Student Living“ and for this reason have the character of an “investment“. With

the exception of the increased expenses referred to above, all other extraordinary factors

and corrections explained did not have any impact on payments. The other essential

revenue parameters of ALTA FIDES Group are as follows:

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Group Revenue Parameters adjusted for Extraordinary Factors

EBITDA

Depreciations

EBIT

Financial result

EBT

Tax on earnings

Annual result forthe Group

Actual fi gures

555,794

(6,535,770)

(5,979,976)

(4,315,725)

(10,295,701)

(850,427)

(11,146,128)

Adjustments

5,204,833

6,492,123

11,696,956

-

11,696,956

945,646

12,642,602

AdjustedResult

5,760,627

(43,647)

5,716,980

(4,315,725)

1,401,255

95,219

1,496,474

Actual fi gures

9,487,048

(51,816)

9,435,232

(1,786,175)

7,649,057

(1,523,908)

6,125,149

(3,726,421)

8,169

(3,718,252)

(2,529,550)

(6,247,802)

1,619,127

(4,628,674)

(EUR) 2008 2007 Change in result

Compared to the previous fi nancial year, the adjusted operating result (EBITDA) was

EUR 3,726,421 lower.

The sales revenue in the business segment of “Renting and Trading Real Estate“ decreased

by 70.6% to EUR 7,019,326. This can be attributed to the reduced business activity in the

fi eld of acquisitions, sale of real estate properties and the lower margins and/or reduced

increases in value from the first valuations of new real estate properties, which are

connected with this. On the one hand, this reduced business activity is a consequence of

the current situation on the capital markets; however, on the other hand, it is also the result

of the Company’s strategic focus on the segment of “YOUNIQ – Student Living“.

In the business segment of “Project Development“, which comprises the development of

listed real estate properties, a considerable gain in sales revenue of EUR 6,102,663 (which

corresponds to 134.3%) was achieved on account of the further progress of the projects and

the commencement of new projects.

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On account of the structure of the business model “YOUNIQ – Student Living“, the total

turnover and revenue (sales revenue plus change in inventories) for the segment constitutes the

decisive parameter. The total turnover and revenue more than doubled from EUR 4,491,255

for the previous year to EUR 10,108,876 for the fi nancial year 2008. This was achieved

through the strategic acquisition of real estate properties in addition to the continued devel-

opment of existing projects.

An essential share of the net change in the market value of the real estate properties held

as capital investments is due to the fi rst-time assessment at the respective fair value (EUR

3,162,147) of the newly acquired, but already existing, real estate properties in the segment

of “YOUNIQ – Student Living“ in Berlin, Göttingen and Jena. However, the positive changes of

the market values of the remaining real estate properties held as capital investments, especially

in the segment of “Renting and Trading Real Estate“, were moderate at EUR 911,489. This

was due to low real estate acquisitions during the 2008 fi nancial year.

The segment of “YOUNIQ – Student Living“ generated a positive EBIT of EUR 2,899,818. This

confi rms the validity of the new focus and strategic development of this business segment.

A negative EBIT was generated in the business segments of “Renting and Trading Real

Estate“ and “Project Development“. The EBIT was reduced when compared to the previous

year. This is essentially due to the reduced sales revenue, an increase in material expenses

and extraordinary factors (depreciations).

The EBIT of the business segment “Corporate“ was also negatively impacted by extraordinary

factors (one-off additional expenditure) and the increase of personnel expenditure at ALTA

FIDES AG. Moreover, the fact that ALTA FIDES AG does not yet charge any apportionment

of costs and service fees to subsidiaries also contributed to this situation.

Compared with the previous year the net interest charge of EUR 4,315,725 increased con-

siderably by EUR 2,529,550. This increase was essentially caused by borrowing growth

capital and fi nancing of the acquisition of existing properties in the segment of “YOUNIQ

– Student Living“. This increase can also be attributed to the partial use of the newly granted

credit line from GOETHE INVESTMENTS S.à r.l. used for fi nancing further growth.

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See the segment information according to IAS 14 in the Notes to the Consolidated Financial

Statement (section 7) for further details.

At EUR 11,146,128, the 2008 annual result for the group is clearly negative. However, when

adjusted for the effects caused by the entry of GOETHE INVESTMENTS S.à r.l. and the new

alignment, the annual result is positive at EUR 1,496,473. Overall, the Management Board

is satisfi ed with the development of the company when extraordinary factors are taken into

account in particular against the backdrop of the current macroeconomic situation. As in the

previous year, all adjusted result parameters are positive and constitute a good basis for the

future overall development of the group.

3.2 Financial Situation of the Group

Assets and liabilities structure 2008 2007 Change

Asset structure (long-term/short-term assets) in % 112.37% 104.78% 7.24%

Ratio of fi xed to total assets

(long-term assets/balance sheet total) in % 52.91% 51.17% 3.41%

Current assets to total assets

(short-term assets/balance sheet total) in % 47.09% 48.83% -3.57%

Equity ratio in % 26.10% 39.98% -34.71%

Fixed-assets-to-net-worth ratio

(long-term debt/ long-term assets) in % 55.44% 81.88% -32.29%

Debt-equity ratio (loan capital/ real estate assets) in % 58.96% 60.52% -2.57%

Balance sheet total in EUR 164,947,832 136,336,499 20.99%

Real estate assets in EUR 155,156,695 104,836,743 48.00%

Short-term assets in EUR 77,669,734 66,575,922 16.66%

Long-term assets in EUR 87,278,098 69,760,577 25.11%

Equity in EUR 43,058,179 54,509,479 -21.01%

Long-term debt in EUR 43,567,079 62,117,462 -29.86%

Short-term debt in EUR 78,322,574 19,709,559 297.38%

Loan capital in EUR 91,487,023 63,443,804 44.20%

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Compared to the previous year, the balance sheet total for the group increased

by EUR 28,611,333 to EUR 164,947,832. This increase resulted, in particular, from

the investments in the real estate properties held as financial investments (by EUR

26,583,734) and the inventories (without the totals carried over from other balance

sheet items by EUR 15,675,430). The causes of this are largely found in the segment

of “YOUNIQ – Student Living“, in which for example existing real estate properties

in Berlin, Göttingen and Jena were acquired by CAMPUS 1. Verwaltung GmbH at a

cost of acquisition of EUR 23,318,464. The increase in inventories can be attributed

mainly to the acquisition of plots of land and buildings in Heidelberg, Lausen and,

primarily, Leipzig. This increase is also due to the continued construction activities.

The financial situation of the Group is balanced as a result of the strategic alignment

to the field of “YOUNIQ – Student Living“, as well as the long-term lease and the

sale of the existing real estate properties held in the segment of “Renting and Trading

Real Estate“ (also in Student Living). In this way, the Group can generate stable cash

flows and reinforce the security of the entire business model.

The Group is financed through both equity capital and external capital. The equity

ratio has decreased from 40.0% in the 2007 financial year to 26.1% in the 2008

financial year. This change was essentially due to the negative Group result of EUR

11,146,128, which is burdened by extraordinary factors, in addition to the increased

balance sheet total. At 59.0% the debt-equity ratio for the financial year remained

stable compared to the previous year (60.5%).

There are no off-balance-sheet assets. All activities are reported in the consolidated

balance sheet.

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3.3 Financial Situation of the Group

The fi nancial planning instruments used across the Group safeguard the early recognition

of the future liquidity situation as it evolves from the implementation of the Group strategy

and Group planning process. Regular reports on the fi nancial and liquidity situation to the

corresponding bodies form an essential part of the risk management system.

The cash fl ow statement was prepared according to the indirect method. The summarised

version of the statement is as follows:

The cash outfl ow from current operations is mainly due to one-off additional expenses in

the framework of the strategic alignment to the segment “YOUNIQ – Student Living”.

The cash outfl ow in the fi eld of the investment activities is essentially due to the acquisition

of plots of land and buildings in the fi eld of inventories (primarily in the segment “YOUNIQ

– Student Living“) as well as to subsequent acquisition costs for the existing real estate

properties in the business segment “Renting and Trading Real Estate“.


Cash fl ow from current activities (3,196,121) (11,377,430) 8,181,308

Cash fl ow from investment activity (17,357,569) (33,880,649) 16,523,081

Cash fl ow from fi nancing activity 13,335,855 42,208,681 (28,872,826)

Change in cash and cash equivalents

affecting payments (7,217,835) (3,049,398) (4,168,437)

Cash and cash equivalents at the beginning of the accounting period 9,295,736 12,345,135 (3,049,398)

Cash and cash equivalent at the end of the accounting period 2,077,902 9,295,736 (7,217,835)

Change in cash and cash equivalents (7,217,835) (3,049,398) (4,168,437)

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The purchase price for the three newly acquired existing real estate properties in Berlin,

Göttingen and Jena in the business segment “YOUNIQ – Student Living“ will only fall due

on the 15th of June 2009. Accordingly, there has not yet been any cash outfl ow in this

fi eld.

The investments are fi nanced through loans from banks (EUR 4,008,578; previous year:

EUR 42,482,165) and through the possibility of using the credit line of in total EUR 30 million,

which is provided by the majority shareholder GOETHE INVESTMENTS S.à r.l., for the

long-term and is now available for the fi rst time. As of the balance sheet date, a total of EUR

11,280,272 of this credit line has been used.

Additionally, the existing liquidity (including securities used for short-term investments and

interest optimisation) was used to fi nance the current operations and the new alignment of

the group so that the amount of cash and cash equivalents has fallen by EUR 7,217,835 to

EUR 2,077,902 as against the previous year.

There were no delays and defaults in the repayment of loans and interest payments during

both the 2007 and 2008 fi nancial years. There have been no violations of loan agree-

ments.

3.4 Profi t situation of ALTA FIDES AG

ALTA FIDES AG fulfi ls an almost exclusive holding function. In this context, it manages the

fi nancing of its subsidiaries using both equity and external capital. The own real estate

property held by ALTA FIDES AG is of secondary importance.

With the further development of ALTA FIDES Group, the role of ALTA FIDES AG will be

expanded to the intra-group provision of services for real estate companies in future, in

addition to securing group fi nancing. The conclusion of service agreements with subsidiaries

is planned in this context.

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An overview of the essential items is presented in the table below:

Compared to the previous year, the investment result fell by EUR 11,040,753. This was

essentially due to the conclusion of domination and profi t transfer agreements with 14 sub-

sidiaries in order to utilise tax losses and optimise the total tax burden within the Group,

from which ALTA FIDES AG had to assume losses of in total EUR 10,533,375. On account

of comprehensive depreciations of existing real estate properties, plots of land and buildings

earmarked for sale (not offset by operating results), the subsidiaries concerned incurred

losses in the 2008 fi nancial year. While the losses were assumed, revenue of only EUR

1,020,325 was transferred under profi t transfer agreements.

The operating result, which is EUR 2,670,268 lower than during the previous year, is essentially

due to the one-off cost burdens associated with the change of the majority shareholder, in

addition to the increase in the personnel expenditure. The remaining cost burdens essentially

comprise legal and professional fees as well as costs for services employed in connection with

the re-alignment of the group. Hence, these costs have the character of an “investment“.

Profi t situation of ALTA FIDES AG

(EUR) 2008 2007 Change in results

Investment result (9,508,049) 1,532,703 (11,040,753)

Operating result (5,623,930) (2,953,663) (2,670,268)

EBIT (15,131,980) (1,420,959) (13,711,021)

Financial result 141,839 234,651 (92,812)

EBT (14,990,141) (1,186,308) (13,803,833)

Earnings tax 184,132 (14,296) 198,428

Net loss (14,806,009) (1,200,604) (13,605,405)

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The increase in personnel expenditure is due to an increase in the average number of

employees (2008: 18 employees, previous year: 13 employees). This increase was necessi-

tated by the increased workload due to the further development of business during the 2008

fi nancial year.

The positive overall fi nancial result fell by EUR 92,812 to EUR 141,839. This decline is e.g.

due to lower interest revenue from the investment of surplus cash funds and the interest

payable to the majority shareholder GOETHE INVESTMENTS S.à r.l. in connection with the

use of the credit line granted.

On account of the negative result for the year and the taxable entities formed with

subsidiaries in the 2008 fi nancial year tax refunds are only reported for previous years

(EUR 184,132).

3.5 Financial situation of ALTA FIDES AG

Assets and liabilities structure 2008 2007 Change

Equity ratio in % 49.54% 79.91% -38.01%

Fixed-assets-to-net-worth ratio (medium- and

long-term liabilities/ fi xed assets) in % 94.56% 9.33% 913.40%

Balance sheet total in EUR 48,732,352 48,737,360 -0.01%

Current assets in EUR 36,345,804 34,021,748 6.83%

Fixed assets in EUR 12,386,548 14,715,612 -15.83%

Equity capital in EUR 24,141,424 38,947,433 -38.02%

Medium- and long-term debt capital in EUR 11,713,275 1,373,177 753.01%

Short-term debt capital in EUR 12,877,653 8,416,750 53.00%

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Assets and capital remained almost constant compared with the previous year; however, the

structure of both assets and capital has changed.

With respect to assets, the securities contained in the current assets (reduction: EUR

1,674,960) and cash funds (reduction: EUR 3,549,633) in particular have been reduced, in

addition to the fi nancial assets (reduction: EUR 2,282,284). On the other hand, dues from

affi liates (increase: EUR 7,990,765) from the fi nancing of subsidiaries have increased.

The conclusion of domination and profi t transfer agreements has resulted in the assumption

of losses incurred by subsidiaries. Furthermore, the increase in liabilities to affi liates is due to

the refi nancing through the partial use of the credit line granted by the majority shareholder

GOETHE INVESTMENTS S.à r.l. in order to fi nance the growth of the company.

Even though the equity ratio has declined signifi cantly by 38.0% as against the previous

year, equity capital still accounts for approximately one half of the total capital and is there-

fore on an adequate level. The decline in the equity ratio is due to the conclusion of

domination and profi t transfer agreements with subsidiaries (as explained above) and the

one-off effects of additional expenses.

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3.6 Financial situation of ALTA FIDES AG

An abbreviated version of the cash fl ow statement (according to DRS [German Accounting

Standard] 2) is as follows:

The cash outfl ow from current operations is essentially due to the one-off additional expenses

incurred in the course of the strategic realignment of the Group. The increase in receivables and

liabilities from the assumption of losses as a consequence of the newly concluded domination

and profi t transfer agreements was also assigned to the cash fl ow from current operations.

In the 2008 fi nancial year, the cash fl ow from investment activities which was also negative was

infl uenced, in particular, by the redemption of minority shares in subsidiaries as well as by other

capital measures in subsidiaries totalling EUR 961,093. The change of the legal form of various

subsidiaries of ALTA FIDES AG from a limited commercial partnership (KG) to a limited liability

company (GmbH), on the other hand, did not have any impact on the cash fl ow from invest-

ment activity. The original fi xed capital was converted into a reserve and the remaining capital


Cash fl ow from current activities (3,357,572) 2,337,995 (5,695,567)

Cash fl ow from investment activity (568,699) (9,906,480) 9,337,781

Cash fl ow from fi nancing activity 376,638 2,874,164 (2,497,526)

Change in cash and cash equivalents

affecting payments (3,549,632) (4,694,320) 1,144,688

Cash and cash equivalents at the beginning

of the accounting period 3,616,294 8,310,615 (4,694,321)

Cash and cash equivalent at the end

of the accounting period 66,662 3,616,294 (3,549,633)

Change in cash and cash equivalents (3,549,633) (4,694,321) 1,144,688

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accounts were transferred to the settlement account with ALTA FIDES AG. At the same time,

ALTA FIDES AG furnished a contribution in kind of an amount equal to the sum of the equity

capital of EUR 25,000.

At EUR 11,280,272, the positive cash fl ow from the fi nancing activity is largely due to

the partial use of a credit line of EUR 30 million granted by the majority shareholder

GOETHE INVESTMENTS S.à r.l. A further infl ow of funds resulted from the assumption of

debt regarding a long-term loan taken out by the subsidiary AF Trading GmbH from BHW

Bausparkasse AG, Hameln (amount as of 31st December 2008: EUR 481,003; interest rate

4.89 % p.a.) as well as from the liquidity generated by the sale of all stocks and shares. In

contrast, the outfl ow of funds from Group fi nancing amounted to EUR 13,008,829.

The existing liquidity (including the stocks and shares used as short-term capital invest-

ment and for the purpose of interest optimisation) was used to fi nance the current business

activities and the realignment of the group. This led to a reduction of the cash funds by

EUR 3,549,633 to EUR 66,662.

3.7 Overall assessment of the business situation of ALTA FIDES AG

The 2008 financial year was characterised by various extraordinary one-off factors.

Because of the new domination and profit transfer agreements concluded at the end

of the year 2008, ALTA FIDES AG had to assume major losses incurred by subsidiaries.

Furthermore, the Company’s operating results were adversely affected by increased

additional expenditure in the framework of the Company realignment.

On account of the new strategic focus further investments, which are expected to put

additional pressure on operating results, will become necessary on the level of ALTA FIDES

AG during the 2009 fi nancial year. However, in the 2009 fi nancial year, positive profi t

contributions, which will at least lead to a balanced earnings situation overall, are expected

to be generated through the conclusion of service agreements with subsidiaries on the one

hand and by the affi liates connected with the Company through the domination and profi t

transfer agreements, on the other hand.

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– As of 31st December 2008, the equity capital of ALTA FIDES AG amounts to EUR

7,050,000 and consists of 7,050,000 registered ordinary no-par shares.

– There are no restrictions on rights of transfer and/or voting rights.

– As of 31st December 2008, CORESTATE German Residential Limited, St. Peter Port,

Guernsey, indirectly held a total of 95.94% of the equity capital of ALTA FIDES AG

through GOETHE INVESTMENTS S.à r.l. and its affi liates. By the end of the extended

term of acceptance on 15th January 2009, this share increased again to 98.03%.

– There are no ALTA FIDES AG shares with special rights.

– Employees who do not directly exercise their rights of control do not have an interest in

the Company’s capital.

– According to articles 76 to 85 AktG [German Companies Act] and art. 6 of the Articles

of Association of ALTA FIDES AG, the Management Board consists of one or more

members. The Supervisory Board appoints the members of the Management Board

and specifi es the number of members. The Supervisory Board can appoint a member

of the Management Board as the chairman or spokesman of the Management Board.

Moreover, it can appoint other members of the Management Board as deputy chairmen

or deputy spokesmen.

– The statutory provisions according to art. 179 to 181 AktG apply with regard to amend-

ments of the Articles of Association.

– In the general meeting of 25th June 2007 the Management Board was authorised to

increase the equity capital of the Company by issuing new registered no-par shares

once or several times in return for cash contributions or contributions in kind until

15th June 2012 with the approval by the Supervisory Board. However, such an

increase is limited to a maximum of EUR 3,525,000 (authorised capital). The new

4. Information according to art. 289 paragraph 4 HGB [German Commercial Code]

and art. 315 paragraph 4 HGB

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shares can also be issued to employees of the Company.

The Management Board establishes the amount of issue of the new shares and can also

determine the commencement of the participating rights of such in deviation to art.

60 paragraph 2 AktG. It is authorised to determine the further details of the respective

capital increase, as well as the conditions of the issue of the shares and the contents of

the rights inherent in the shares with the approval of the Supervisory Board. In principle,

the shareholders shall be granted a subscription right; however, according to art. 186

paragraph 5 sentence 1 AktG the shares can also be taken over by one or several credit

institutions or by one or several companies operating according to art. 53 paragraph

1 sentence 1 or art. 53b paragraph 1 sentence 1 or paragraph 7 of the German Credit

Services Act with the obligation to offer the shares in question to the shareholders for

subscription. The Management Board is authorised to exclude the shareholders’ sub-

scription right, with the approval by the Supervisory Board.

– On 1st August 2008, the annual general meeting adopted a resolution regarding the crea-

tion of conditional capital. With regard to this, the Management Board was authorised to

issue registered or bearer convertible bonds and/or option bonds, or participation rights

with or without conversion or option rights, or a conversion obligation with a total nomi-

nal amount of up to EUR 80 million with a term of up to 20 years once or more than once

until 15th June 2013 with the approval by the Supervisory Board and to grant the bearers

and/or creditors of bonds conversion or option rights regarding new no-par bearer shares

of the Company with a proportionate share in the equity capital of up to EUR 3,525,000

as provided for in the terms of the bonds. To that end, the equity capital of the Company

was increased by up to EUR 3,525,000, by issuing up to 3,525,000 new no-par bearer

shares, accounting for a proportionate share in the equity capital of EUR 1 each.

– There are no further essential agreements which are subject to the condition of a change

of control in the event of a takeover bid.

– In the case of a takeover bid, there are no further compensation agreements concluded

by and between the Company and members of the Management Board or employees.

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The Compensation Report, as detailed below, is also part of the Corporate Governance

Report.

5.1 Compensation of the Management Board

The compensation for the Management Board is established by the Supervisory Board at an

adequate amount on the basis of a performance appraisal taking any possible group emoluments

into account. The tasks of the respective member of the Management Board, his/her personal

performance, the performance of the Management Board taken as a whole as well as the

business situation, the success and future prospects of the company, in particular, constitute

criteria for the adequacy of the compensation.

Norbert Ketterer and Christian Dunkelberg left the Management Board of the Company with

effect from 15th October 2008. Rainer Fuchs left the Management Board of the Company with

effect from 30th November 2008. A termination agreement was concluded with each of the

former members of the Management Board. Agreements regarding severance indemnity were

not made.

In 2006, a contract of service regarding employment on the Management Board was concluded

between ALTA FIDES AG and the former member of the Management Board, Norbert Ketterer.

According to said contract, Mr. Ketterer was entitled to claim a management bonus, in

addition to his regular monthly compensation of EUR 20,000. This claim to a management

bonus amounts to 4% of the annual net profi t, according to the German Commercial Code

before corporate and commercial tax and the bonus itself in the case that such annual net profi t

amounts to less than EUR 1 million and to 2% of the annual net profi t in the case that the fi gure

is higher than EUR 2 million.

The contract of service regarding employment on the Management Board concluded with

Norbert Ketterer was terminated by means of an agreement of 13th October 2008, with effect

from 15th October 2008. An agreement was made whereby Mr. Ketterer would receive his

monthly remuneration until 15th October. Mr. Ketterer is not entitled to any other remuneration

(variable and fi xed) for the 2008 fi nancial year or for previous fi nancial years. Furthermore,

Mr. Ketterer is not entitled to any severance indemnity.

5. Compensation Report

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There was a contract of service regarding employment on the Management Board in the version

of 22nd June 2006 between ALTA FIDES AG and the former member of the Management Board

Rainer Fuchs. According to said contract, Mr. Fuchs was entitled to a regular monthly compen-

sation to the amount of EUR 10,000. According to art. 5 paragraph 1 of the contract of service,

Mr. Fuchs was entitled to a subscription right for virtual shares as of 31st December 2008 subject

to the provision that he was still a member of the Management Board of ALTA FIDES AG on that

date and that the share price amounted to more than 120% of the issue price.

The contract of service concluded with Mr. Fuchs regarding work on the Management Board

was terminated by means of an agreement of 13th October 2008, with effect from 30th Novem-

ber 2008. In this context, it was agreed that Mr. Fuchs would receive his monthly compensation

until 30th November 2008. Furthermore, Mr. Fuchs is not entitled to any other remuneration (var-

iable or fi xed) for the 2008 fi nancial year, and he is also not entitled to a severance indemnity.

There was a contract of service regarding work on the Management Board in the version of

26th June 2007 between ALTA FIDES AG and the former member of the Management Board

Christian Dunkelberg. According to said contract, Mr. Dunkelberg was entitled to a regular

monthly compensation to the amount of EUR 20,000. Furthermore, Mr. Dunkelberg held

an interest in CAMPUS REAL ESTATE AG. The contract of service regarding employment on

the Management Board was valid until 31st July 2010.

Furthermore, the contract provided for a special right of termination in the case of a third

party directly or indirectly acquiring more than 50% of the shares in ALTA FIDES AG

in deviation from the current shareholder structure (“Change of Control“ provision). If the

special right of termination is exercised, the severance indemnity amounts to 80% of the

compensation not yet paid out until the end of the term of the contract of service regarding

employment on the Management Board.

The contract of service regarding employment on the Management Board with Mr. Dunkel-

berg was terminated with the settlement agreement of 31st October 2008 and with effect

from 30th September 2008. In this context, it was agreed that Mr. Dunkelberg would

receive his monthly remuneration until 30th September 2008. Mr. Dunkelberg is not entitled

to any other remuneration (variable or fi xed) for the fi nancial year 2008, or to a severance

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Norbert Ketterer,

until 15th October 2008 EUR 190,000 EUR 0 EUR 190,000 EUR 0 EUR 0

Christian Dunkelberg,

until 15th October 2008 EUR 180,000 EUR 0 EUR 180,000 EUR 0 EUR 0

Rainer Fuchs,

until 30th November 2008 EUR 110,000 EUR 0 EUR 110,000 EUR 0 EUR 0

Jan Giessler,

from 16th October 2008 EUR 0 EUR 0 EUR 0 EUR 0 EUR 0

Member of the Management Board

Fixedcompensation

Variable compensation

Totalcompensation

Pensioncommitments

Other fringe ben-efi ts or long-term incentivising com-ponents

Compensation of the Management Board

indemnity. Mr. Dunkelberg renounced his claim to the severance indemnity under the

special right of termination.

Furthermore, ALTA FIDES AG provided one company car each to the former members of

the Management Board.

Mr. Jan Giessler, who was appointed a member of the Management Board of ALTA FIDES

AG with effect from 16th October 2008, will not receive any compensation in connection

with the performance of his duties. His services to the company are remunerated in the

framework of a secondment agreement by and between ConLead GmbH and ALTA FIDES

AG. According to said secondment agreement ConLead GmbH receives a fi xed amount of

EUR 50,000, plus the respective statutory value-added tax per calendar month, as a fi xed

monthly lump sum for the secondment of Mr. Giessler.

During the 2008 fi nancial year, the total compensation for the Management Board

amounted to EUR 480,000. In this context, the compensation of the Management Board

had the following detailed composition:

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Rainer Fuchs held a subscription right regarding shares in the company; however, this right

was not exercised.

A contract of service regarding employment on the Management Board was concluded bet-

ween ALTA FIDES AG and Rudolf J. Bartsch, for a term of 24 months, and with effect from

16th February 2009. According to said contract, Mr. Bartsch is entitled to a performance-

related variable management bonus to the maximum amount of 100% of his fi xed gross

annual salary, in addition to his fi xed gross annual salary of EUR 250,000. Performance

targets, which are established for the following year at the latest four weeks before the

beginning of every fi nancial year according to reasonable discretion on the basis of the

plan for the fi nancial year adopted by the Supervisory Board, are decisive for this variable

compensation. The objectives can comprise both fi scal parameters (e.g. EBIT, annual profi t,

free cash fl ow) and objectives lying specifi cally within the sphere of responsibility of the

Management Board. Such objectives have already been defi ned and fi rmly established for

the fi nancial year from 1st January until 31st December 2009.

As of 31st December 2008 there were no advances and loans to members of the Management

Board.

5.2 Compensation of the Supervisory Board

The compensation of the Supervisory Board is provided for in the Articles of Association of ALTA

FIDES AG. According to art. 16 of the Articles of Association in the version of 27th September

2007, the members of the Supervisory Board each receive compensation for their expenses, in

addition to a refund of the value added tax which might have to be paid on their remuneration

and expenses. According to art. 16 paragraph 2 of the Articles of Association in the version of

27th September 2007, the general meeting can establish a fi xed compensation.

Pursuant to art. 16 of the Articles of Association in the version of 19th December 2008

a provision has now been established specifying that the members of the Supervisory

Board of ALTA FIDES AG will each receive a lump-sum compensation of EUR 10,000.

The chairman will receive double this amount. Additionally, expenses will be refunded.

However, according to art. 16 paragraph 2 of the Articles of Association in the version

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of 19th December 2008, the general meeting can adopt resolutions on other forms

of remuneration for the members of the Supervisory Board and on benefi ts having the

character of remuneration.

Provided the general meeting of ALTA FIDES AG approves the compensation for the mem-

bers of the Supervisory Board to the amount outlined below, the total emoluments for the

Supervisory Board amount to EUR 50,000 for the 2008 fi nancial year. The emoluments of

the Supervisory Board have the following detailed structure:

For his position as a member of the Supervisory Board of PROFECTO AG, a subsidiary of

ALTA FIDES AG, Prof. Dr. Willi Alda receives annual emoluments to the amount of EUR

10,000, in addition to a refund of expenses. Norbert Ketterer does not receive any separate

Emoluments for the Supervisory Board

Prof. Dr. Willi Alda, until 20th October 2008 EUR 10,000

Nathalie Wagner, until 19th December 2008 EUR 10,000

Karl-Georg Wentz, until 19th December 2008 EUR 10,000

Daniel Schoch, from 16th October 2008 EUR 20,000

Matthias Sprenker, from 19th December 2008 EUR 0

Martin Hitzer, from 19th December 2008 EUR 0

Fixed emoluments per year Member of the Supervisory Board

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remuneration for his activities as the chairman of the Supervisory Board of PROFECTO AG.

ALTA FIDES AG has concluded a commission agreement regarding the placement of non-

performing loans with Prof. Dr. Alda. With regard to this, no commission fees were paid to

Prof. Dr. Alda in 2008.

Furthermore, Prof. Dr. Alda received a credit of EUR 142,800 gross for the consultancy

services provided to ALTA FIDES AG on 2nd October 2008.

As of 31st December 2008, there were no advances and loans to members of the Supervisory

Board.

6.1 Risk management system of ALTA FIDES Group and ALTA FIDES AG

Because of the current group structure (domination and profit transfer agreements

concluded by ALTA FIDES AG and all major subsidiaries) and the guarantees and other

commitments assumed for the subsidiaries (guarantees by ALTA FIDES AG) ALTA FIDES AG

is subject to the same risks as the operating subsidiaries.

ALTA FIDES AG is strategically aligned so as to attain sustainable growth and an increase

of its corporate value and, hence, of the corporate values of all of its subsidiaries. For this

reason, risk management constitutes an essential and fundamental component of the active

business operations of ALTA FIDES AG. The risk management system is designed for the

entire Group and includes all subsidiaries. The risk management system, which includes

all areas of the Group and is designed in line with the size of the Group, is aligned to the

unpredictability of the developments on the fi nancial and real estate markets and aims at

minimising any potentially negative impacts on the Group’s asset, fi nancial and profi t situa-

tion. Currently, risk management is still provided by the Management Board in line with the

standards adopted by the Supervisory Board.

ALTA FIDES AG identifi es and assesses risks and hedges against these in close co-operation

with the experts of the asset manager of the group holding CORESTATE German Residential

Limited – in so far as this is permitted under German Company Law.

6. Risk Report

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The Management Board and the Supervisory Board provide appropriate specifi cations

regarding the management of interest and credit risks and the use of excess liquidity. The

Management Board and the Supervisory Board are regularly informed of the fi nancial risk

factors within ALTA FIDES Group.

6.2 Risks to the Company as a going concern

Considering all relevant individual risks – also in their entirety – the continued existence of

ALTA FIDES AG or of the Group is not at risk. Having said this, the Management Board does

not currently know of any risks which might lead to the possibility of the Company ceasing

to function as a going concern in the future. The liquidity requirement arising from short-

and medium-term performance and fi nancial planning for the implementation of the growth

strategy in the business segment “YOUNIQ – Student Living“ is safeguarded through the

existing credit line provided by the majority shareholder GOETHE INVESTMENTS S.à r.l.

6.3 Project selection risk

The Company’s successful business operations are based on the precondition that the

Company can acquire suitable properties and plots of land. The location, the structure of

the buildings as well as the development and marketing potential constitute decisive criteria

when making the decision to purchase a property. Since ALTA FIDES AG competes with

other real estate companies, there might be an increasing scarcity of real estate properties

complying with the Company’s return requirements in the future.

6.4 Risks in construction and reconstruction

In the execution of own development projects, risks can arise in particular on account of

the fact that higher costs and/or unforeseen additional expenses may arise in the course of

reconstruction. In addition to this, risks in the implementation of new construction projects

might arise on account of the absence of building permits. ALTA FIDES AG minimises this

risk by only acquiring properties which are already classifi ed as building land and with

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regard to which the building law permit situation has largely been resolved.

In the case of plots of land, which are e.g. classifi ed as prospective building land,

ALTA FIDES AG does not conclude the transaction for the acquisition of the property.

Construction cost risks are minimised by a suitable contract awarding policy as well as

rigorous project control.

6.5 Risks inherent in the existing stock

With regard to the existing real estate properties of ALTA FIDES AG, external factors, such

as e.g. a deterioration in the transport connections or social structure and construction

measures in the area, can cause risks lowering the rental income or the sales value of the

property. Moreover, maintenance and other management costs might become higher than

originally expected.

ALTA FIDES AG continuously monitors the development of all accounts receivable regar-

ding the Group and, if required, takes steps at short notice in order to secure payments by

the debtors and reduce default possibilities and actual defaults. Arrears billing regarding

the accounts receivable from the lease relationships is partly processed by the property

managers.

The default risk in the fi eld of letting is also minimised by having an appropriate mix of

tenants and acceptable credit ratings of the tenants (letting taking place only after previous

satisfactory credit investigations).

6.6 Risks in marketing

Risks regarding marketing and the sale of real estate properties can arise in case the sale

of the property takes longer than originally planned. Further risks might arise in case the

budgeted sales prices cannot be achieved on account of changes which were not foreseeable

at the time of the purchase or if taxation, political or other market conditions change. In this

connection, problems might arise on the real estate market, in particular, on account of the

current real estate crisis. However, ALTA FIDES AG monitors these problems and risks, and

acts accordingly. Default risks in the framework of the execution of sales of plots of land

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and/or apartments are minimised by the usual hedging tools in processing of contracts. In

relation to these, the legal title is only transferred once the full payment has been received.

6.7 Operating risks, especially dependency on staff and IT

The decision to have a small staff was consciously taken by the Company. The Company

assumes that even a possible unforeseen loss of a key member of staff can be compensa-

ted for promptly in the operations of the company (if required through external service

providers). However, the operational organisation of ALTA FIDES AG needs to be optimised

further in the course of the year 2009. In this connection, the internal as well as external

processes will be optimised – in particular in co-operation with property managers and

external service providers.

The operation of the IT systems is safeguarded through the use of external service providers.

The Company regards the emergency plans of the respective service providers as being

suffi cient for the needs of the Company.

6.8 Liability risks

The Company bears the risk that the plots of land which it owns might be contaminated

with waste or subject to soil contamination and that public authorities or private third

parties might have to be employed in order to rectify this situation. Legally, the Company

can only exclude such a liability to a restricted degree. The Company counters possible

adverse effects by employing its comprehensive knowledge of the market and providing

the necessary expertises or having such provided by third parties for the acquisition of

properties, if required.

6.9 Risks in taking out debt capital

For the implementation of its business concept and growth strategy the Company needs

extensive funds in order to be able to consistently pursue the acquisition of residential real

estate and the planned project developments. In this context, the Company is obliged to

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provide the funds in advance while returns of funds in the form of advance payments by

buyers/clients or the fi nal purchase price payments can partly only be collected in stages

according to the progress of the projects (or according to the German Real Estate Agent

and Commercial Builders Ordinance [MaBV]) pursuant to mandatory legal provisions. For

this reason, the Company has taken out debt capital for interim fi nancing. This entails the

risk that the acquisition of debt capital from credit institutions might not be possible in due

time in the future or that such might only be possible at unfavourable conditions and that

payments (of purchase prices) by the customer might be effected later than planned. If debt

capital cannot be taken out in the future or if such cannot be taken out under adequate

conditions or in case the raising of debt fi nancing takes longer than planned by the Com-

pany, this might adversely affect the Company’s operations as well as its fi nancial situation.

Financial planning tools employed throughout the Group permit the early identifi cation of

future liquidity requirements as such arise from the implementation of the Group’s strategy

in business operations. In addition to the current overview of loans connected with a

repayment plan comprising several years, the Group also keeps a liquidity plan on a rolling

monthly basis for a planning term of twelve months each.

The planning systems refl ect the entire scope of consolidation. A cautious liquidity management

policy includes a suffi cient reserve of liquid funds. As of 31st December 2008, ALTA FIDES AG

has a credit line of EUR 30 million from the majority shareholder GOETHE INVESTMENTS

S.à r.l., of which only EUR 11.3 million were used by the balance sheet date.

6.10 Risks on account of changes in the framework conditions

The real estate market depends on tax and statutory framework conditions shaping the

decision-making criteria of potential real estate buyers. ALTA FIDES AG assumes that its

products will retain their attractiveness in the future. Nonetheless, changing framework

conditions, in particular the tax treatment of property ownership, can have a negative

impact on the demand for real estate and real estate investment products.

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7.1 Market outlook

The international fi nancial crisis will continue to put a strain on the real estate industry in

Germany at least until the end of 2009.

However, in international comparison, Germany as a site is considered to be among the

most promising: In an Ernst & Young survey among international real estate companies

two thirds of the respondents classifi ed Germany as an interesting investment site in 2009

compared with 2008. In a comparison with other European locations, this number even

increased to 90%. Approx. 70% of the companies surveyed indicated that they also wanted

to invest in Germany in the current year. More than 90% stated that they would use much

more own capital to that end than they had done so far.

The transaction volume for German commercial and residential real estate is assessed as

declining only slightly. Ernst & Young estimates that this volume will amount to between

EUR 20 and 24 billion.

Family offi ces, insurances and sovereign wealth funds are mentioned as the most important

groups of buyers, while banks, opportunity and private equity funds and open funds

dominate among the sellers.

7.2 Prospects for ALTA FIDES AG

On the basis of the current Group structure the future performance of ALTA FIDES AG is

established from the sum of the results achieved by the individual subsidiaries in the

corresponding segments.

While there is a high demand for accommodation for students, which will increase even

further over the next years, there is a comparatively tight supply in traditional and fl ourishing

university towns on the other hand. Neither the Associations for Students Affairs with their

student hostels which largely date back to the 1970s nor church or other organisations

operating such facilities can even approximately cover the demand. Furthermore, there is

7. Outlook report

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considerable potential for student accommodation on the German market on account of the

increasing number of undergraduates over the next years.

In this market environment ALTA FIDES AG has a success-oriented and crisis-proof position

thanks to its sustainable and integrated YOUNIQ concept.

Furthermore, a trend towards the renaissance of real estate as a store of value on account

of the events of the fi nancial crisis and the turbulence on the stock markets associated with

these, is emerging.

According to current surveys, institutional investors, such as insurances and pension funds

are planning to increase their real estate holdings, by on average 10%. This development

supports the business model adopted by ALTA FIDES AG for the establishment and

successful marketing of the business segment “YOUNIQ – Student Living“ as an asset class

of its own through numerous completed apartments and a full product pipeline in the year

2009.

In this context, Great Britain, where the segment of student accommodation has long since

moved from a niche product to an asset class of its own on the real estate market and where

investors appreciate this segment, serves as a role model.

Through the early development of a niche in the real estate market ALTA FIDES AG has

already managed to establish itself as a ‘fi rst mover’ with a considerable head start in this

market in Germany and will continue to defend and consistently develop its leading position

in this segment in the future.

In principle, ALTA FIDES AG expects increasing positive contribution margins in particular

from the projects in the business segments “YOUNIQ – Student Living“ and “Project

Development“ for the fi nancial year 2009. However, these are partly burdened by

further investments in the development and expansion of the business segment “YOUNIQ

– Student Living“ so that at the moment, at least, a balanced result is expected for the

fi nancial year 2009.

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In January 2009 4 real estate and project development fi nancing packages by DG Hyp AG

totalling EUR 10.715 million were extended until 30th June 2010. The special redemption

payment made in the framework of the prolongation agreement amounted to EUR 0.938

million.

Furthermore, a fi xed interest rate for a total stock of loans comprising EUR 1.551 million

from Deutsche Kredit Bank AG (“DKB“) was established for a term until January 2014. In

addition, a prolongation until April 2014 was established for two further loans by DKB total-

ling EUR 2.370 million in the course of May 2009.

With the exception of the appointment of Mr. Bartsch as a member of the Management

Board of ALTA FIDES AG with effect from 16th February 2009 there were no further events

of special importance after the end of the fi nancial year.

8. Events after the balance sheet date

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On 25th July 2008 the CORESTATE German Residential Limited Fund, St. Peter Port, Guern-

sey managed by the private equity investor CORESTATE CAPITAL AG, Zug, Switzerland

attained control of ALTA FIDES AG through its indirect subsidiary GOETHE INVESTMENTS

S.à r.l., Luxembourg. At that time, GOETHE INVESTMENTS S.à r.l. had increased its share-

holding in ALTA FIDES Aktiengesellschaft für Grundvermögen to approx. 64.16% of the

equity capital. For this reason, the Management Board has prepared a subordinate status

report and submitted it for inspection. The subordinate status report comprises the following

fi nal statement:

“With regard to the legal transactions and/or measures listed in the report on the relations

with affi liates, our Company has received adequate consideration and has not been adver-

sely affected by the fact that measures were taken or failed to be taken according to the

circumstances of which we were aware at the time at which said legal transactions were

carried out or failed to be taken.“

Stuttgart, 27th March 2009

ALTA FIDES AG Aktiengesellschaft für Grundvermögen



9. Subordinate status report according to art. 312 AktG [German Companies Act]

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corporate governanceletter to the shareholders the share report by the supervisory board

consolidatedfi nancial statement

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fi na

nc

ial

sta

tem

en

t

group report responsibility statement annual accounts alta fi des ag

Notes 2008 2007

Sales revenue 5.1 18,795,785 30,904,037

Change in inventories 5.2 12,710,309 (7,381,018)

Changes in the market value of the

investment properties (net) 5.3 4,073,636 10,027,870

Other revenue 5.4 543,519 837,791

Total revenue 36,123,249 34,388,680

Material costs 5.5 (26,074,271) (18,083,202)

Payroll costs 5.6 (1,832,597) (1,613,877)

Other costs 5.8 (7,660,587) (5,204,553)

Earnings before taxes, interest and depreciations (EBITDA) 555,795 9,487,048

Depreciations 5.7 (6,535,770) (51,816)

Operating result (EBIT) (5,979,975) 9,435,232

Financial income 5.9 397,050 523,239

Expenditure 5.9 (4,712,775) (2,309,414)

Pre-tax income (EBT) (10,295,701) 7,649,057

Income tax 5.10 (850,427) (1,523,908)

Consolidated annual loss (previous year: consolidated annual profi t) (11,146,128) 6,125,149

Of which shares of the Group shareholders in the result (11,240,929) 5,648,012

Of which shares of outsiders to the Group in the result 4.16.7 94,801 477,137

Individual share certifi cates 5.12 7,050,000 7,050,000

Result per share 5.12 (1.59) 0.80

Consolidated Profi t and Loss Account

for the Period from 1st January until 31st December 2008 (in EUR)

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Notes 31/12/2008 31/12/2007

Long-term assets

Intangible assets 4.1 2,060 2,060

Property, plant and equipment 4.2 413,870 7,233,788

Investment properties 4.3 85,908,125 59,324,391

Other long-term accounts receivable 4.4 - 1,100,465

Deferred tax assets 4.5 954,043 2,099,873

Long-term assets, total 87,278,098 69,760,577

Short-term assets

Inventories 4.6 69,248,570 45,512,352

Accounts receivable from contract production 4.7 773,755 3,041,267

Accounts receivable for goods and services 4.8 3,111,502 5,727,790

Dues from affi liates 4.9 499,853 -

Tax refund claims 4.10 1,011,008 169,358

Other short-term accounts receivable 4.11 224,604 559,940

Other short-term assets 4.12 626.341 97,365

Investments 4.13 - 2,172,114

Cash and cash equivalents 4.14 2,077,902 9,295,736

77,573,534 66,575,922

Long-term assets held for sale 4.15 96,200 -

Short-term assets, total 77,669,734 66,575,922

Total assets 164.947.832 136.336.499

Consolidated Balance Sheet as of 31st December 2008 (in EUR)

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Notes 31/12/2008 31/12/2007

Equity capital 4.16

Subscribed capital 4.16.1 7,050,000 7,050,000

Capital reserve 4.16.4 30,682,842 30,682,842

Retained income 4.16.5 15,626,069 10,186,786

Consolidated profi t/ loss (11,240,929) 5,648,012

Revaluation reserve 4.16.6 180,494 237,072

Equity which the Group shareholders account for 42,298,475 53,804,712

Minority shares 4.16.7 759,704 704,767

Total equity capital 43,058,179 54,509,479

Long-term debt

Liabilities to banks 4.17 24,658,925 54,382,360

Deferred tax liabilities 4.18 7,209,974 7,409,968

Accrued liabilities 4.19 - 162,000

Accounts payable to affi liated companies 4.20 11,280,272 -

Other long-term accounts payable 4.21 417,909 163,133

Total long-term debt 43,567,079 62,117,462

Short-term debt

Accounts payable to affi liated companies 4.20 23,734,426 -

Accrued liabilities 4.22 608,944 419,270

Tax liabilities 4.23 908,832 1,196,934

Liabilities to banks 4.24 43,093,672 9,061,444

Accounts payable for goods and services 4.25 4,720,552 2,651,328

Accounts payable from contract production 4.7 975,541 802,303

Payments received on account 4.26 997,895 372,632

Other short-term liabilities 4.27 3,282,711 5,205,647

Total short-term debt 78,322,574 19,709,559

Sub-total, debt 121,889,653 81,827,020

Total equity capital and debt 164,947,832 136,336,499

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Consolidated Statement of Changes in Equity for the

Period from 1st January 2007 until 31st December 2008 (in EUR)

Notes Subscribed Capital reserve Retained income capital

As of 31/12/2006 7,050,000 30,687,001 4,263,488

Corrections as per IAS 8 (2006) 2.5 - - (10,508)

Capital brought forward as of 01/01/2007 7,050,000 30,687,001 4,252,980

Reclassifi cation of consolidated

profi t for the previous year - - 5,933,807

Consolidated profi t for 2007 - - -

Change in revaluation reserve - - -

Change in capital reserve - (4,159) -

Corrections according to IAS 8 (2007) 2.5 - - -

Consolidation measures - - -

As of 31/12/2007 4.16 7,050,000 30,682,842 10,186,786

Capital brought forward as of 01/01/2008 7,050,000 30,682,842 10,186,786

Reclassifi cation of consolidated profi t

for the previous year - - 5,648,012

Consolidated profi t for 2008 - - -

Change in revaluation reserve 4.16.6 - - -

Redemption of minority shares 2.7 - - (351,648)

Change in capital reserve - - -

Consolidation measures 2.5 - - 142,918

As of 31/12/2008 4.16 7,050,000 30,682,842 15,626,069

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Consolidated Revaluation Shares held by Shares held by Total profi t/loss reserve Group shareholders outsiders equity

5,933,807 328,688 48,262,984 99,966 48,362,950

- - (10,508) - (10,508)

5,933,807 328,688 48,252,476 99,966 48,352,442

(5,933,807) - - - -

11,256,046 - 11,256,046 442,348 11,698,394

- (91,616) (91,616) - (91,616)

- - (4,159) - (4,159)

(5,608,034) - (5,608,034) (549,800) (6,157,834)

- - - 712,252 712,252

5,648,012 237,072 53,804,712 704,767 54,509,479

5,648,012 237,072 53,804,712 704,767 54,509,479

(5,648,012) - - - -

(11,240,929) - (11,240,929) 94,801 (11,146,128)

- (56,578) (56,578) - (56,578)

- - (351,648) (39,864) (391,513)

- - - - -

- - 142,918 - 142,918

(11,240,929) 180,494 42,298,475 759,704 43,058,179

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Consolidated Cash Flow Statement

for the Period from 1st January until 31st December 2008 (in EUR)

Notes 2008 2007

Consolidated profi t (11,146,128) 6,125,149

Tax expenditure 850,427 1,523,563

Interest income 4,315,726 1,786,175

Earnings before interest and taxes (EBIT) (5,979,975) 9,434,887

(Adjustment to transition from EBIT to

cash fl ow before taxes and interest)

Depreciations 6,535,770 51,816

Write up regarding investment properties (4,073,636) (10,027,870)

Adjustment of value of fi xed assets (revaluation method) 52,848 -

Addition to revaluation reserve (56,578) (91,616)

Cash fl ow before taxes and interest (3,521,571) (632,783)

Change in accounts receivable from long-term production 122,059 (4,665,684)

Change in other long-term accounts receivable 1,100,465 3,943,387

Change in inventories from construction activities and distribution (3,092,004) 9,562,946

Change in accounts receivable for goods and services 2,616,289 (1,731,276)

Change in other short-term accounts receivable (164,696) (285,391)

Change in other short-term assets (459,243) 34,341

Change in payments on account received 625,264 4,281,605

Change in reserves 27,673 (1,099,755)

Change in accounts payable for goods and services 2,069,224 (13,357,131)

Change in other accounts payable (1,485,418) (6,925,239)

Taxes paid (1,034,163) (502,449)

Cash fl ow from current operations 6 (3,196,121) (11,377,430)

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Notes 2008 2007

Payments from the sale of fi xed assets

and investment properties 4,113,279 627,110

Investments in fi xed assets and intangible assets (392,242) (979,848)

Investments in real estate properties held for development

and disposal (only land and buildings) (17,787,700) (12,740,977)

Payments for investment properties (2,899,434) (20,786,935)

Payments from acquisition of minority shares (391,472) -

Cash fl ow from investing activity 6 (17,357,569) (33,880,649)

Payment from capital increase - (4,159)

Change in minority shares (39,864) 712,252

Profi t shares for minority shareholders

in (commercial) partnerships - (34,789)

Borrowing from the majority shareholder 11,280,272 -

Borrowing and repayment of loans from banks (accounting balance) 4,008,578 42,482,165

Acquisition and sale of securities (capital investment) 2,172,114 839,386

Interest paid 327,317 523,239

Interest received (4,412,561) (2,309,414)

Cash fl ow from fi nancing activity 6 13,335,855 42,208,681

Net change in cash and cash equivalents (7,217,835) (3,049,398)

Cash and cash equivalents at the beginning

of the accounting period 4.14 9,295,736 12,345,135

Cash and cash equivalents at the end of the accounting period 4.14 2,077,902 9,295,736

Change in cash and cash equivalents (7,217,835) (3,049,398)

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corporate governanceletter to the shareholders the share report by the supervisory board corporate governanceletter to the shareholders the share report by the supervisory board

of ALTA FIDES Aktiengesellschaft für Grundvermögen

for the fi nancial year from 1st January until 31st December 2008

1. General Information regarding the Company

The corporate name of the Company is: “ALTA FIDES Aktiengesellschaft für Grundvermö-

gen”. The shares of the Company (hereinafter: “ALTA FIDES AG”) were admitted to offi cial

trading on the Frankfurt Stock Exchange (General Standard) under ISIN DE000A0B7EZ7 on

6th December 2006.

GOETHE INVESTMENTS S.à r.l., Luxembourg, which, in turn, is part of the group of

CORESTATE German Residential Limited, St Peter Port, Guernsey, (highest holding),

acquired a majority shareholding in ALTA FIDES AG on 25th July 2008.

The Company has its registered offi ces in Stuttgart (Federal Republic of Germany). It is

registered as a stock corporation in the commercial register of Stuttgart Local Court under

HRB 24693. The current offi ces of the Company are located in Königstraße 10c in 70173

Stuttgart. In addition, there are further premises in 04107 Leipzig, Schwägrichenstraße 11.

notes to the consolidated fi nancial statement

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ALTA FIDES AG and its subsidiaries (hereinafter the “Group“) are project developers and

dealers in the product market segments “exclusive residential real estate“ and “student

apartments“. As one of the leading companies in Germany, ALTA FIDES Group develops

and operates lifestyle apartment facilities comprising 150 and more residential units for

students throughout Germany in the business segment “YOUNIQ – Student Living“. This

concept is based on the idea of offering students partly furnished one-bedroom apartments

in a state-of-the-art environment at rents in line with the market.

The Management Board prepared the annual fi nancial statement for ALTA FIDES AG as of

31st December 2008 on 27th March 2009. The annual fi nancial statement was approved

and cleared for publication by a resolution of the Supervisory Board of the Company of 28th

April 2009.

The consolidated fi nancial statement of ALTA FIDES AG for the fi nancial year which expired

on 31st December 2008 was cleared for publication by a resolution of the Management

Board of 27th March 2009 and presented to the Supervisory Board afterwards. The Super-

visory Board is in charge of inspecting the consolidated fi nancial statement and establishing

whether it approves the consolidated fi nancial statement.

2.1 Declaration regarding Compliance with IFRS

According to art. 290 ff. HGB [German Commercial Code], ALTA FIDES AG is obliged to

prepare a consolidated fi nancial statement. ALTA FIDES AG has prepared its consolidated

fi nancial statement according to the International Financial Reporting Standards (IFRS), in the

form in which these are mandatory in the EU, and the provisions under German commercial

law which have to be applied in addition according to art. 315a paragraph 1 HGB. All of

the IFRS which were published by the International Accounting Standards Board (IASB) and

in force at the time of the preparation of this consolidated fi nancial statement are applied

provided such have been adopted by the EU. The term IFRS also includes the International

Accounting Standards (IAS) which are still in force. All interpretations by the International

Financial Reporting Interpretations Committee (IFRIC) – formerly: Standing Interpretations

Committee (SIC) – which are binding for the fi nancial year 2008 were also applied.

The requirements of the standards applied were fully complied with and ensure that an impres-

sion of the asset, fi nancial and profi t situation of ALTA FIDES Group which is in line with the ac-

tual situation is conveyed. As a result, the consolidated fi nancial statement complies with IFRS.

2. Accounting and valuation principles

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The framework of IASB is not part of IFRS and has not been taken over into the EU acquis

communautaire. IAS 8.11b requires the use of the defi nitions and valuation criteria for the

assets, liabilities, expenses and earnings laid down in the framework for the purpose of

interpretation and fi lling of loopholes. The framework constitutes the basis for the formation

of an opinion in developing solutions for accounting problems. For this reason and on

account of the express reference to the framework in IAS 8.11b, it is used without any

restrictions in preparing the consolidated fi nancial statement of ALTA FIDES AG.

The additional disclosure requirements to be taken into account according to art. 315a HGB

[German Commercial Code] are listed under the notes in section 9.

2.2 Principles regarding the preparation of the fi nancial statement

The consolidated fi nancial statement was prepared subject to the assumption of continued

operation of the company. The 31st of December 2008 constituted the balance sheet date.

The fi nancial year of ALTA FIDES AG and all of its subsidiaries corresponds to the calendar

year.

The reporting currency is the Euro (EUR) (unless the specifi cations are commercially rounded

to thousand Euros (KEUR)). This currency also constitutes the functional currency of

the Group. During the year under review there were no business transactions in foreign

currencies.

In adding up rounded sums, and percentages calculation differences caused by rounding

can arise through the use of automatic calculation tools.

The profi t and loss account was prepared according to the total cost method. In order to

improve the clarity of the presentation various items of the consolidated balance sheet and

of the consolidated profi t and loss account are summarised and explained accordingly in

the Notes.

According to IAS 1 and the Accounting Interpretation No. 1 (RIC 1) of the German Accoun-

ting Standards Committee e.V., long- and short-term assets and debts are differentiated in

reporting in the balance sheet. Those items which fall due within one year or which can be

assigned to one business cycle are considered to be short-term. Deferred taxes are reported

as long-term on principle.

The cash fl ow statement was prepared according to the indirect method.

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2.3 New Financial Reporting Standards

On principle, the accounting and valuation methods applied comply with the methods used

during the previous year.

The International Accounting Standards Board (IASB) has adopted new standards/inter-

pretations or it has amended existing standards/interpretations, the application of which has

been mandatory since 1st January 2008. However, according to art. 315a HGB, standards

and interpretations may only be used in a fi nancial statement as per IFRS once these have

been adopted by the EU.

Standard

Standards and interpretations which have been adopted by the EU and the use of which is mandatory from 1st January 2008

IFRIC 11

Amendments to IAS 39 and IFRS 7

IFRIC 12

IFRS 8

IFRS 2: Group and Treasury Share Transactions

Reclassifi cation of Financial Instruments

Service Concession Arrangements

Operating Segments

1/3/2007

1/7/2008

1/1/2008

1/1/2009

Adopted on1/6/2007

Adopted on15/10/2008

Adopted on 26/3/2009

Adopted on22/11/2007

Designation Mandatory for fi nancial years from

Status of adoption into EU law

Standards and interpretations which have been adopted by IASB but not taken over by the EU and the use of which is mandatory for fi nancial years beginning from 1st January 2008

Standards and interpretations which have been adopted by the EU and which can be used voluntarily for fi nancial years beginning from 1st January 2008

The new and revised IFRS standards and inter-pretations concern the following:

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Amendments to IFRS 1 and IAS 27

Amendments to IFRS 2

IFRS 3 Revised

Amendments to IAS 1

Amendments to IAS 23

Amendments to IAS 27

Amendments to IAS 32 and IAS 1

IAS 39

Various

IFRIC 13

IFRIC 15

IFRIC 16

Cost of an Investment in a Subsidiary, Jointly-Controlled Entity or Associate

Share-based Payment: VestingConditions and Cancellations

Business Combinations

Presentation of Financial Statements: A Revised Presentation

Borrowing Costs

Consolidated and Separate Financial Statements

Puttable Financial Instruments and Obligations Arising on Liquidation

Financial Instruments: Recognition and Measurement: Eligible Hedged Items

Improvements to IFRSs

Customer Loyalty Programmes

Agreements for theConstruction of Real Estate

Hedges of a Net Investment ina Foreign Operation

1/1/2009

1/1/2009

1/7/2009

1/1/2009

1/1/2009

1/7/2009

1/7/2009

1/7/2009

1/1/2009

1/7/2008

1/1/2009

1/10/2008

Adoption expected for Q1/2009

Adoption expected for the end of 2008






EFRAG recommenda-tion still pending





Standards and interpretations which have been adopted by IASB but which have not yet been taken over by the EU

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All of the standards and interpretations whose use is mandatory for the fi nancial year 2008

have been taken into account. On principle, new standards and interpretations which have

been published but not yet entered into force are not applied prematurely with the excep-

tion of IAS 32. The contents and effects of these new standards and interpretations are

described as follows:

“Improvements to IFRS“

In May 2008 IASB published improvements of existing IFRS in the framework of its Annual

Improvement Project. In some cases, these amendments regarding different IFRS have an

impact on the valuation, assessment and reporting of business transactions; in other cases,

however, these improvements comprise corrections of terms or editorial corrections. Most

of these improvements enter into force for fi nancial years beginning on or after 1st January

2009. Premature application is possible. The application of these improvements will not

have any essential impacts on the consolidated fi nancial statement.

IFRS 3 und IAS 27

In January 2008 IASB published a revised version of IFRS 3, “Business Combinations“ (“IFRS

3R“), and an amended version of IAS 27, “Consolidated and Separate Financial Statements“

(“IAS 27R“). While the application of the purchase method is extended to mergers in IFRS

3R, IAS 27R contains amended provisions on fi nancial reporting of minority shares as well

as on balancing in the event of the loss of the dominating infl uence on a subsidiary. IFRS

3R provides for an option for the assessment of the minority shares either at the fair value

at the time of the acquisition or at the fair value of the proportionate identifi able assets and

liabilities of the company acquired for the acquiring company, which can be exercised

in the framework of every corporate merger. In the event of the successive acquisition of

a company, the identifi able assets and liabilities of the company acquired are assessed at

the fair value at the time at which the buyer acquires the dominating infl uence over the

company. Any profi t or loss is recorded in a manner affecting net income to the amount

of the difference between the fair value of the shares in the acquired company held so far

and its accounting value. Furthermore, IAS 27R requires recording of the effects of all

transactions with the owners of minority shares in the equity capital in a manner which does

not affect the operating result if the domination ratio does not change. If transactions, on

the other hand, lead to the loss of the possibility of control, the resulting profi t or loss has

to be recorded in a manner affecting net income. The profi t or loss also comprises effects

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on account of a revaluation of the retained shareholding stakes at the fair value. Moreover,

IFRS 3 established the provision that all considerations transferred in the framework of a

corporate merger, including conditional considerations, are assessed and reported at the fair

value at the time of acquisition. Transaction costs which the acquiring company incurs in

connection with the corporate merger are not recorded as part of the costs of acquisition

of the transaction but as expenses. This does not apply in case such costs are incurred in

connection with the emission of debt instruments or shares. In this case, these are balanced

according to IAS 39, “Financial Instruments: Recognition and Measurement“. IFRS 3R and

IAS 27R enter into force for mergers during the fi nancial years beginning on or after 1st July

2009. Premature application of these provisions is permissible in case both standards are

applied simultaneously. IFRS 3R and IAS 27R have been adopted by IASB; however, they

still need to be taken over into European law by the EU. In future fi rst consolidations or

deconsolidations, these standards might have effects on the consolidated fi nancial statement

of ALTA FIDES.

IAS 32 und IAS 1

In February 2008, IASB published amendments on IAS 32 “Financial Instruments: Presen-

tation“ and IAS 1 “Presentation of Financial Statements“ under the title “Puttable Financial

Instruments and Obligations Arising on Liquidation“. Under certain conditions, the changed

conditions provide for a classifi cation of fi nancial instruments terminable at the fair value and

obligations, which only arise in case of liquidation, as equity capital. These provisions enter

into force for fi nancial years beginning on or after 1st January 2009. Premature application is

permissible. With the exception of reporting of minority shares in partnerships, the premature

application of these amendments has not had any essential impact on the consolidated fi nan-

cial statement.

IFRS 2 Amendment “Share-based Payment Vesting Conditions and Cancellations“

The amendment of this standard comprises amendments of the defi nition and treatment of

vesting conditions as well as the defi nition and treatment of non-vesting conditions. Further-

more, the amendments deal with the treatment of cancellations of an assurance by another

party than the company itself.

The amendments of IFRS 2 are retroactively applicable to all share-based compensations

within the scope of application of IFRS 2 for fi nancial years beginning on or after 1st January

2009. The application of the new provisions will not have any impacts on the consolidated

fi nancial statement of ALTA FIDES AG.

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IFRS 8 “Operating Segments“

The amendment of the standard comprises new provisions for the presentation of segment

reporting. According to these, segment reporting has to be prepared in accordance with the

so-called “Management Approach“. Pursuant to this, the defi nition of the segments and the

information provided for the segment is based on the information which the management uses

internally for the purposes of resource allocation and the evaluation of the performance of the

individual divisions of the company. The application of IFRS 8 is mandatory for the fi rst time for

fi nancial years beginning on or after 1st January 2009. The effects of the fi rst application of the

amendments with regard to the consolidated fi nancial statement of ALTA FIDES are currently

being examined in connection with the reinforced alignment to the business segment “YOUNIQ

– Student Living“.

lAS 1 (2007) “Presentation of Financial Statements“

The standard contains new provisions on the presentation of the fi nancial statement. Ac-

cording to these new provisions, non-owner-related changes in equity have to be reported

separately from owner-related equity changes and extended information on Other Compre-

hensive Income has to be provided. lAS 1 (2007) fi rst has to be applied for fi nancial years

beginning on or after 1st January 2009. The fi rst application of lAS 1 (2007) will not lead to

any essential changes in the presentation of the profi t and loss statement and the statement

of changes in equity in the consolidated fi nancial statement of ALTA FIDES.

lAS 23 (2007) “Borrowing Costs“

The standard provides for the abolition of the right of option for the treatment of borrowing

costs incurred directly in connection with the acquisition, construction or production of

qualifi ed assets. According to the revised provision, these borrowing costs have to be capi-

talised as an element of the costs of acquisition or production of the assets. lAS 23 (2007) has

to be applied for the fi nancial years beginning on or after 1st January 2009 for the fi rst time.

The application of the new provisions will have an impact on the consolidated fi nancial state-

ment of ALTA FIDES since ALTA FIDES Group has not yet capitalised borrowing costs so far.

2.4 Estimates and discretionary decisions

The preparation of the consolidated fi nancial statement in compliance with IFRS requires

assumptions to be made, discretion to be exercised and estimates to be made with regard

to various items, which might have an impact on the amount and disclosure of the assets

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and liabilities reported in the balance sheet, the revenue and expenses as well as contingent

assets and liabilities.

Estimates and assumptions are required, in particular, for the following:

– The evaluation of the need for a value adjustment and the amount of such, especially

regarding the real estate properties reported under the inventories, as well as in cor-

porate values and “Loans and Receivables“.

– The establishment of the assessment parameters for the stock option plans.

– The establishment of the fair value of the real estate properties held as fi nancial invest-

ments and receivables. In this context, the expected payment fl ows and the discounting

factor, in particular, constitute essential evaluation parameters.

– The estimate and evaluation of reserves.

– The establishment of the realisability of active deferred taxes.

Estimates are made on the basis of the latest available reliable information. The assets, debts,

earnings, expenses as well as contingent assets and liabilities included in the balance sheet

on the basis of estimates can deviate from the amounts which can be realised in the future.

Amendments will be taken into account respectively at the time at which better insights are

obtained. For this reason, the actual amounts can deviate from the assumptions and estimates

made. However, a fundamental change of the estimates and assumptions used cannot be

assumed at the time of the preparation of the consolidated fi nancial statement.

In addition, discretionary decisions were made in connection with the real estate properties

held as fi nancial investments. In this context, a decision has to be made as to whether these

can be sold in their current state and whether their sale is very likely. If this is the case, the

real estate properties are reported as “assets held for sale“.

As of 31st December 2008 real estate properties held as financial investments are

exclusively assessed on the basis of an updated valuation expertise by the internationally

operating real estate expert CB Richard Ellis GmbH, Frankfurt am Main. On principle, the

valuation is effected in accordance with the discounted cash fl ow method (DCF method)

– or in case market values can be derived from the sale of comparable properties – in

accordance with the comparative value method under consideration of the RICS Valuation

Standards (Red Book, 6th edition, published by: Royal Institution of Chartered Surveyors,

1st January 2008).

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If the DCF method is used, future cash fl ows are discounted to the balance sheet date. To

that end, the surplus payments from the respective property are established in a detailed

planning stage of ten years. These payments are established by balancing expected

payments and payouts. While the payments usually comprise net rents, the payouts usually

comprise operating costs which have to be assumed by the owner. The surplus payments

during every period under review are discounted to the valuation date by applying a

property-specifi c discounting rate in accordance with the situation on the market. During the

2008 fi nancial year, these rates amounted to between 5.5% and 6.35% depending on the

property concerned. The net present value of the surplus payments for the respective period

is established on this basis. A residual value of the valued property is forecast for the end of

the ten-year detailed planning period. This value refl ects the most likely price which can be

achieved at the end of the detailed planning period. In this process, the surplus payments for

the tenth and eleventh year are capitalised as perpetuity at the so-called capitalisation rate

(cap rate between 4.75% and 5.35% depending on the property). After that, the residual

value is also discounted using the discount interest rate. The total of the discounted surplus

cash and the discounted residual value yield the fair value of the valuation property.

During the previous year, expertises were exclusively obtained by using the comparative

value method (on the basis of the comparison to purchases and sales of comparable real

estate properties) on the basis of the International Valuation Standards as of the valuation

date, which corresponded to the balance sheet date. These values were established without

consideration of taxes and costs of capital of any type.

The assumptions made in the assessment of the real estate portfolio can subsequently turn

out to be partially or fully incorrect or unexpected problems or unforeseen risks might arise

in connection with real estate portfolios. Such developments, which can also occur within

a short period of time, could lead to a worsening of the profi t situation, a reduction of the

value of the assets acquired and a considerable decline of the sales revenue which can be

generated from the privatisation of the apartments as well as the current rents.

The intrinsic value of real estate assets is primarily determined on the basis of the devel-

opment of the real estate market and of the general economic situation in addition to the

factors inherent in the property. There is a risk that the valuation assumptions employed by

the Group might have to be corrected in case of a negative development of the real estate

market and of the general economic situation. In case a deterioration of the value of the

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Group’s real estate property has to be recorded, this would adversely affect the Group’s

assets, fi nancial and profi t situation.

2.5 Corrections according to IAS 8 and modifi cations of the accounting,

valuation and presentation methods

In order to improve the signifi cance of the consolidated fi nancial statement of ALTA

FIDES AG the structure of the consolidated balance sheet and the consolidated profi t and

loss account has been revised. Furthermore, modifi cations of the following items of the

consolidated balance sheet and of the consolidated profi t and loss account were effected

retrospectively according to IAS 8:

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549,800.00 a) -549,800.00 0.00 72,134,391.00 b) -12,810,000.00 59,324,391.00 542,645.03 b) 12,810,000.00 b) -6,118,857.31 7,233,787.72 2,052,893.37 c) 46,980.00 2,099,873.37 8,394,345.62 d) -3,720,497.31 d) -1,632,581.48 3,041,266.83

10,197,294.28 c) -10,508.00 10,186,786.28 11,256,045.53 -5,608,033.54 5,648,011.99 1,254,567.08 a) -549,800.00 704,767.08

9,657,885.61 -2,247,917.25 7,409,968.36 0.00 c) 162,000.00 162,000.00 0.00 e) 163,132.94 163,132.94 798,773,15 f) -379,503.00 419,270.15 0.00 d) 802,303.44 802,303.44 4,895,432.41 d) -4,522,800.75 372,631.66 4,989,277.02 e)f) 216,370.06 5,205,647.08

32,536,618.96 d) -1,632,581.48 30,904,037.48 6,471,229.79 -13,852,247.83 -7,381,018.04 18,278,636.50 g) -17,440,845.14 837,791.36

0.00 g) 16,146,726.81 b) -6,118,857.31 10,027,869.50 -30,824,179.56 h) 12,740,977.12 -18,083,202.44 -1,466,676.82 c) -147,200.00 -1,613,876.82 -1,345,934.28 g) 1,294,118.33 -51,815.95 -6,315,823.90 h) 1,111,270.71 -5,204,553.19 -3,814,513.16 2,290,605.25 -1,523,907.91

Corrections according to IAS 8

Balance as originally reported

31/12/2007EUR

Reclassifi cations

EUR

Revalua-tions

EUR

Corrected balance as of

31/12/2007 EUR

Consolidated balance sheetas of 31/12/2007

AssetsSubscribed capital unpaidReal estate properties held as fi nancial investments Property, plant and equipmentDeferred tax assetsAccounts receivable from contract production

Equity capitalRetained incomeConsolidated profi t/lossMinority shares

Borrowed capitalDeferred tax liabilitiesOther long-term reservesOther long-term liabilitiesOther short-term reservesLiabilities from contract productionPayments received on accountOther short-term liabilities

Consolidated profi t andloss account 2007

Sales revenueChanges in inventoriesOther incomeChanges in the market value of the real estate properties held as fi nancial investments (net)Material costsPersonnel expenditureDepreciationsOther operating expensesIncome tax

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The adjustments and corrections above are explained as follows:

Regarding a) The subscribed capital unpaid reported in the consolidated financial

statement as of 31st December 2007 entirely consists of contributions by minority shareholders

which have not be been made yet. These were set off accordingly with the minority shares

reported separately under equity capital.

Regarding b) In the consolidated fi nancial statement as of 31st December 2007 a real

estate property located at a central site in Leipzig, which was to be developed for the future

use as a fi nancial investment, was reported as an investment property in deviation to IAS

40.9d and valued at the fair value on the basis of a residual value determination prepared

by an external expert. This balancing led to the restriction of the audit certifi cate by the

fi nal auditor. For this reason, the real estate property is retroactively re-classifi ed as a part

of plant, property and equipment (IAS 16) and evaluated at the costs of acquisition and

production. Deferred taxes to the amount of 29% were calculated on the valuation

difference which arose from the correction (EUR 6,118,857).

Regarding c) The former Chief Financial Offi cer, Rainer Fuchs, was granted a subscription

right regarding 100,000 shares in ALTA FIDES AG from ALTA FIDES AG. In deviation to

the provisions of IFRS 2, balancing of the share-based remuneration transaction with cash

settlement was not effected during the previous years. The obligation had the following

values as of:

31/12/2006: 100,000 shares x EUR 0.74 per share x 6/30 months = EUR 14,800

31/12/2007: 100,000 shares x EUR 2.70 per share x 18/30 months = EUR 162,000

The reserve was entered in the records retroactively. In this context, the value of the obligation

was recorded in the opening balance sheet as of 1st January 2007 against the retained

income as of 31st December 2006. Deferred taxes were calculated accordingly with regard

to the valuation difference from the correction.

Regarding d) Because of the current structure of controlling, results from construction

orders as per IAS cannot be estimated reliably. For this reason, revenue is only recorded at

the amount of the order costs incurred in retrospective application of IAS 11.32a. Therefore,

the profi ts from construction orders to the amount of EUR 1,632,581 reported as of 31st

December 2007 were withdrawn. Deferred taxes were calculated accordingly with regard

to the valuation difference from the correction.

A further correction was made in order to report construction orders with a net credit

balance for customers as an asset (accounts receivable from contract production to the

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amount of EUR 3,041,267) and production orders with a net debit balance for customers

as a liability (accounts payable from contract production to the amount of EUR 802,303)

according to IAS 11.42. The payments received on account were corrected by EUR

4,522,801 in the other direction.

Regarding e) During the year under review, security deposits and deposits were reported

under the other long-term liabilities (previous year: other short-term liabilities). The values for the

previous year were adjusted accordingly (EUR 163,133). The total of the deposits is reported as

restricted cash.

Regarding f) During the year under review IAS 37.11 was taken into account by reporting only

those debts as reserves with regard to which there are uncertainties regarding the time and the

amount of the expenses which will be required in the future. The values for the previous year

were adjusted accordingly (EUR 379,503).

Regarding g) During the previous year, negative changes in the fair time value of the investment

properties were shown as depreciations while the positive changes of the fair values formed part

of the other operating income. Because of the importance of these changes for the Group’s profi t

situation and because of the specifi cation of the net profi ts or losses from the adjustment of the

fair value such changes are now shown as a separate item in the profi t and loss account. The

values for the previous year were adjusted accordingly.

Regarding h) During the previous year, the operating expenses were shown under the other

operating expenses – regardless of whether such costs can be charged on to the tenants. In order

to ensure correct reporting these costs would have to be shown under material expenses. For this

reason, the values for the previous year were adjusted accordingly (EUR 1,111,271).

Regarding i) During the previous year the acquisition of properties (land and buildings) held

for sale was fully recorded as material expenses and then capitalised as inventory through

changes in inventories. In order to improve the conclusiveness of the profi t and loss account

only the construction services procured as well as raw materials and supplies will be

recorded as affecting net income from the fi nancial year 2008. This accounting method was

changed retrospectively so that material expenses and the change in stock for the previous

year were corrected by EUR 13,852,248.

The information in the notes according to IFRS 7 Financial instruments: Notes, which were

not provided last year, were added for the year under review.

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In the framework of the changes of the scope of the Group through the accrual of assets and

debts to other affi liates and in connection with the change of the legal form of several

subsidiaries changes have occurred in capital consolidation which are due to processes

during previous years. These adjustments have led to an increase of retained income of in

total EUR 142,918. A retrospective correction was dispensed with on grounds of negligibility.

2.6 Consolidation methods

The consolidated fi nancial statement comprises the fi nancial statement of ALTA FIDES

AG and its subsidiaries as of 31st December of any given financial year. The financial

statements for the subsidiaries are prepared as of the same balance sheet date as the

fi nancial statement of the parent company and by applying uniform accounting and

valuation methods.

All those companies whose fi nancial and business policy the Group controls are defi ned

as subsidiaries. Usually, the possibility of control arises if the share in the voting rights

exceeds 50%. Potential voting rights which can be exercised or converted at the

moment are taken into account in the evaluation of the question of whether control can

be exercised.

The time of acquisition and, hence, the day on which control of the net assets and of the

business operations of the company acquired really passes to the parent company

constitutes the time of fi rst consolidation. The provisions of IFRS 3 Business combinations

are applied with regard to mergers. Acquisitions of shares in companies which were

recorded before the time of the switch to IFRS were made using the facilities of IFRS 1.

According to IFRS 3, capital consolidation was effected as per the purchase method at the

time of acquisition. The acquisition costs for the purchase correspond to the fair value of

the assets provided, the equity capital instruments issued and of the debt incurred and/

or assumed at the time of acquisition plus the costs directly attributable to the acquisition.

Assets, debts and contingent liabilities which can be identifi ed in the framework of a

merger are assessed at their fair values at the time of acquisition regardless of the extent

of the minority shares during fi rst consolidation. Afterwards, the acquisition costs for the

purchase are offset against the proportionate fair values of the net assets assessed.

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Any positive difference resulting from this is capitalised as a business or corporate value,

submitted to an impairment test as of the balance sheet date and then also subjected

to impairment if required. If an unfavourable difference (surplus of the buyer’s share in

the net fair value of the identifi ed assets, debts and contingent liabilities of the acquired

company over and above the acquisition costs) after capital consolidation, the identifi ed

assets, debts and contingent liabilities of the company acquired and the assessment of

the acquisition costs of the merger are evaluated again. Any surplus remaining after this is

recorded with an effect on net income right away.

The hidden reserves and unrealised losses disclosed in the context of time value assessment

of the assets and debts in the framework of fi rst consolidation are continued, depreciated

or written back in line with the development of the respective assets and debts in the

framework of initial consolidation during the following accounting periods. In the following

accounting periods the business or corporate value is submitted to an impairment test

at least annually at a specifi c point in time. An impairment is immediately recorded with

its effect on expenses in the profit and loss account and is not reversed during the

following accounting periods.

The tax accruals and deferrals required according to IAS 12 are established with regard to

the temporary differences from consolidation.

The inclusion in the consolidated fi nancial statement ceases as soon as the control by the

parent company ceases. They are deconsolidated at the time at which control ceases.

Upon the acquisition of minority shares in subsidiaries which are already fully consoli-

dated, the difference between the purchase price of the shares in the subsidiary and the

amount in the group equity for which the minority share accounts is set off directly with

the group equity (retained income).

All intra-group balances, transactions, revenues, expenses, profi ts and losses from intra-

group transactions which are comprised in the accounting value of assets are eliminated

to the full amount.

Shares which are held by minority shareholders are reported separately under the equity

capital of the Group. The minority shares of shares in (commercial) partnerships, on the

other hand, are reported as borrowed capital unless they correspond to the defi nition of

equity capital in the amended version of IAS 32.

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2.7 Scope of consolidation

All subsidiaries are included in the consolidated fi nancial statement through full consolidation.

During the 2008 fi nancial year ALTA FIDES AG has not identifi ed any mergers. Instead of

this, ALTA FIDES AG or an affi liate has established several new companies in the legal form

of a limited commercial partnership or acquired shell companies for the purpose of the

purchase of real estate properties during the fi nancial year 2008.

– CAMPUS 7. Vermögensverwaltung GmbH & Co. KG (newly established company)





– AF HEKATE GmbH & Co. KG (newly established company)

– AF ATHENA GmbH & Co. KG (newly established company)

– Widicon Trade & Consulting GmbH & Co. KG (acquisition)

– Widicon GmbH (acquisition)

– CAMPUS 1. Verwaltung GmbH (acquisition)

The costs of acquisition exclusively result from the start-up costs in as far as the contribution

was already furnished in cash at that time. Directly allocable ancillary expenses of the

establishment were only incurred to a low extent and were immediately recorded with an

effect on expenses.

In the course of the reorganisation of the structure under German corporate law in Novem-

ber 2008, the assets and debts of CAMPUS 7. Vermögensverwaltung GmbH & Co. KG to

11. Vermögensverwaltung GmbH & Co. KG and of IVB Coppistraße 39 GmbH & Co. KG

accrued to two affi liates for taxation reasons.

ALTA FIDES AG and AF ATHENA GmbH & Co. KG purchased a total of 500,000 shares

(10.0%) in the fully consolidated CAMPUS REAL ESTATE AG from Mr. Dunkelberg at a

purchase price of EUR 366,512 with the contract of sale of 31st October 2008. In addition,

ALTA FIDES AG purchased 100,000 shares (2.0%) in CAMPUS REAL ESTATE AG from Mr.

Ketterer at a purchase price of EUR 25,000 with the contract of sale of 17th December 2008.

The difference (EUR 351,648) between the purchase prices of the shares in the subsidiary

specifi ed above and the amount in the equity of the Group of EUR 39,864 for which the minority

share accounts was set off directly with the equity of the Group (retained income).

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The following companies are included in the scope of consolidation as of 31st December

2008:

ALTA FIDES Aktiengesellschaft für Grundvermögen Stuttgart Parent CompanyIVB Menckestraße 39 GmbH & Co. KG Stuttgart 100.00 100.00 1)IVB Immobilien Vermittlung und Beratung GmbH Stuttgart 94.23 94.23IVB Immobilien Vermögen und Beteiligungs GmbH Stuttgart 100.00 100.00AF Röntgenstraße 12 GmbH Stuttgart 100.00 100.00AF Marienhöhe GmbH & Co. KG Stuttgart 100.00 100.00 1)AF Ferdinand-Lasalle-Straße 16 GmbH Stuttgart 100.00 100.00AF 5. Vermögensverwaltung GmbH Stuttgart 100.00 100.00AF 12. Vermögensverwaltung GmbH Stuttgart 100.00 100.00ER_C@MPUS GmbH & Co. KG Stuttgart 55.00 55.00ER_C@MPUS Verwaltung GmbH Stuttgart 55.00 55.00AF 14. Vermögensverwaltung GmbH Stuttgart 100.00 100.00AF 15. Vermögensverwaltung GmbH & Co. KG Stuttgart 51.00 51.00 1)AF 16. Vermögensverwaltung GmbH Stuttgart 100.00 100.00AF Trading GmbH Stuttgart 100.00 100.00AF Leibnizstraße 11 GmbH Stuttgart 100.00 100.00AF Seeresidenz Markkleeberg GmbH Stuttgart 100.00 100.00AF Schlossresidenz GmbH Stuttgart 100.00 100.00AF Schlossgut GmbH Stuttgart 100.00 100.00AF Property GmbH Stuttgart 100.00 100.00AF 11. Vermögensverwaltung GmbH Stuttgart 100.00 100.00Haus- und Grundstücksgesellschaft Holzhausen mbH Leipzig 94.23 94.23IVB - HGH GbR Stuttgart 88.58 88.58 2)CAMPUS Service GmbH Stuttgart 97.84 97.84CAMPUS Karlsruhe GmbH Stuttgart 97.84 97.84CAMPUS Heidelberg GmbH Stuttgart 97.84 97.84CAMPUS 3. Vermögensverwaltung GmbH Stuttgart 97.84 97.84CAMPUS 4. Vermögensverwaltung GmbH Stuttgart 97.84 97.84CAMPUS 5. Vermögensverwaltung GmbH Stuttgart 97.84 97.84CAMPUS 6. Vermögensverwaltung GmbH Stuttgart 97.84 97.84CAMPUS 1. Verwaltung GmbH Stuttgart 100.00 100.00PF 1. Verwaltung GmbH Leipzig 100.00 100.00PF St.-Annen-Straße GmbH Leipzig 100.00 100.00Widicon GmbH Bad Ems 51.20 51.20Widicon Trade & Consulting GmbH & Co. KG Bad Ems 51.00 51.00 1)CAMPUS REAL ESTATE AG Stuttgart 97.84 97.84PROFECTO AG Stuttgart 100.00 100.00AF ATHENA GmbH & Co. KG Stuttgart 94.90 94.90 1)AF HEKATE GmbH & Co. KG Stuttgart 92.85 92.85 1)

Overview of the scope of consolidation as of 31st December 2008

Company Registered offi ce Share (%) Voting rights (%) Comment

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3. Accounting and valuation methods and the modifi cation of such

Regarding comment 1): According to art. 264b HGB [German Commercial Code], these

companies are exempt from the obligation to prepare an annual fi nancial statement and,

if applicable, a management report according to the provisions applicable to joint stock

companies, to have such audited and to publish such.

Regarding comment 2): Even though the company is a company under civil law, the annual

fi nancial statement is prepared in accordance with the provisions under commercial law.

Art. 264b HGB [German Commercial Code] is also applied here.

The subsidiaries are not restricted in their relationship to the parent company with regard to

transfer payments or dividends paid to such.

2.8 Currency conversion

The scope of consolidation exclusively includes national subsidiaries so that there are no

annual fi nancial statements in foreign currencies which would have to be converted.

3.1 Intangible assets

The intangible assets comprise licenses and rights of use (software). These are recorded at

the respective continued costs of acquisition. In as far as these assets are subject to wear,

they are depreciated linearly over an estimated period of use of three years. There are no

intangible assets with an indefi nable period of use.

Company values constitute the surplus of the acquisition costs from the acquisition of a

company over and above the fair value of the share of the group in the net assets of the com-

pany acquired at the time of acquisition. A company value created through the acquisition

of the company is allocated to the intangible assets. The goodwill is assessed at the original

costs of acquisition minus accumulated depreciations in value. It is allocated to the cash-

generating units and subjected to an impairment test annually as well as in case of the pres-

ence of indications of a depreciation in value. Profi ts and losses from the sale of a company

also consider the asset value of the company value which is assigned to the company sold.

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3.2. Property, plant and equipment

Property, plant and equipment, which are shown as an asset, are assessed at the costs of

acquisition or production upon their fi rst assessment. The costs of acquisition or production

comprise the purchase prices and the directly allocable ancillary costs. The subsequent

valuation can be carried out according to the cost of acquisition model (IAS 16.30) or

according to the revaluation model (IAS 16.31).

This right of option was used by selecting the revaluation method in the fi eld of owner-

occupied real estate. The increases and depreciations in value from the revaluation were

recognised directly in a revaluation reserve as a part of equity (IAS 16.39).

Scheduled depreciations are made according to the linear method. The period of deprecia-

tion is based on the expected period of use. The period of depreciation for the buildings

amounts to 50 years.

Furniture and fi xtures are assessed at the continued costs of acquisition. Scheduled depre-

ciations are made according to the linear method. The period of depreciation is based on

the expected period of use of 3 to 15 years.

The residual book values and the commercial periods of use of the intangible assets and of

property, plant and equipment are reviewed as of every balance sheet date and adjusted if

required.

Profi ts and losses from the disposals of intangible assets and property, plant and equipment

are established as the difference between the sales revenues and the book value if applica-

ble minus any directly allocable costs of sale and recorded with their impact on income.

3.3 Impairment of assets (impairment test)

Intangible assets with an indefi nable period of use are not depreciated according to

schedule; they are, rather, checked for a possible impairment requirement annually as well

as upon special occasions.

The remaining intangible assets and property, plant and equipment are subjected to an

impairment test if corresponding events or changes of the circumstances indicate that the

book value can probably not be achieved any more. To that end, properties and buildings

are considered collectively. An impairment loss is recorded to the amount of the book value

exceeding the amount which can be achieved.

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The achievable amount is the higher value of the fair value of the asset minus the costs of

sale and the value in use.

In the framework of the impairment test the valuation might have to be carried out on the

level of cash-generating units. These are formed on the basis of the legal units.

In case the reasons for an impairment cease to apply, the impairment loss is reversed up

to the continued book value which would have resulted if the impairment had not been

recorded. In case impairments were recorded with regard to the goodwill as well as other

intangible assets with an indefi nable period of use, the impairment loss is not reversed in

subsequent accounting periods even if the reasons for the impairment cease to apply.

3.4 Leasing

According to IAS 17 the subject of a lease is allocated to the lessor or to the lessee on the

basis of the criterion of allocability of all essential risks and opportunities connected with

the possession of the object of the lease.

Leasing relationships in which an essential share of the use and of the risks of possession of

the subject of the lease remains with the lessor are classifi ed as operating leasing. Payments

made or received under an operating lease are recorded in the profi t and loss account for

the term of the leasing relationship.

As lessors, ALTA FIDES AG and/or its subsidiaries let real estate properties (apartments as

well as commercial real estate in as far as such is contained in the residential buildings) on

a large scale. These tenancies constitute leasing relationships under which the payments are

immediately recorded as sales revenue in that sense.

Contracts of lease under which the lessee assumes the essential risks and the use of the

object of the lease are classifi ed as fi nancial leasing.

3.5 Real estate properties held as fi nancial investments

Real estate properties are classifi ed as real estate properties held as fi nancial investments (invest-

ment properties) if they are held to generate rental income and/ or for the purpose of increasing

the value of the property and provided the share of own use does not exceed 10% of the rental

area. Otherwise, the real estate property is shown in the balance sheet as property, plant and

equipment. In deviation to the investment property, inventories constitute assets which are held

for sale in the normal course of business, which are in the process of construction for such sale

or which are used in the course of the production of products and/or the provision of services.

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This means that real estate properties which are held for sale in the framework of normal

business operations or which are constructed or developed with the aim of selling these do

not lie within the scope of application of IAS 40. These have to be reported under

inventories (IAS 40.9a) and, hence, lie in the scope of application of IAS 2. As a result of this,

real estate properties are recorded as inventories within ALTA FIDES Group in case such

were acquired with the aim of reselling in the course of the ordinary business cycle, in case

such are constructed for specifi c resale or in case such were initially held as investment pro-

perties but development of the properties was begun with the intention of reselling these.

During the fi rst valuation, investment property is assessed at the costs of acquisition or pro-

duction including ancillary expenses which are directly allocable to the acquisition.

In the framework of the following assessment, the fair value model according to IAS 40.33

was selected for investment properties. The Management Board is convinced that recording

in the balance sheet according to the fair value model leads to a more transparent presen-

tation of the asset situation of the Group since hidden reserves or unrealised losses are

disclosed and the consolidated fi nancial statement conveys more relevant information, as a

result, and increases comparability within the competitive environment and since it is also

in compliance with the best practice recommendations of the European Public Real Estate

Association (EPRA).

The fair value corresponds to the amount at which the real estate properties could be trans-

ferred between competent business partners that are willing to conclude appertaining con-

tracts and are independent of each other. On principle, the fair value is determined by

obtaining expertises from independent real estate experts as of the balance sheet date.

Profi ts or losses resulting from changes in the fair values are recorded in the profi t and loss

account for the year during which such arise. Investment properties are written off if they are

sold or if they are no longer used in the long run and in case a future commercial benefi t is

not expected any more. Profi ts and losses arising from the closure or disposal of investment

properties are recorded with their impact on net income in the profi t or loss account during

the year of such closure or disposal.

3.6 Inventories

The inventories essentially comprise real estate properties intended for sale (real estate

properties held for sale) and developer properties.

Inventories are assessed at the respective lower value of the costs of acquisition or production

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or the net disposal value. The costs are determined on the basis of the inventory valuation at

average prices or at cost prices. The costs of fi nished and unfi nished products comprise the

costs for planning/construction preparation, direct personnel expenses, other direct costs

and fi xed and variable overheads which can be systematically allocated to the project in

addition to material and prime costs. The net sales value is determined as the estimated sales

price minus the estimated costs until completion and the estimated required sales costs.

3.7 Accounts receivable from contract production

According to IAS 11, a construction order is defi ned as a contract regarding the customer-

specifi c construction of an asset. The construction also comprises pure modernisation and

reconstruction activities. Usually, contracts of sale with fi xed prices have already been con-

cluded for these properties (or for the individual apartments within the properties) prior to

the beginning of the modernisation and reconstruction activities.

In case the result from a construction order can be established reliably and the order is likely

to be profi table, the order revenue is recorded throughout the duration of the order. If the

total order costs exceed the total order revenue, the expected loss is immediately recorded

as expenditure. The Group applies the “percentage of completion“ method in order

to determine the revenue to be recorded during a given business year. The degree

of completion corresponds to the percentage of the order costs incurred until the balance

sheet date compared to the expected total costs of an order (so-called “cost-to-cost“

method, IAS 11.30). If the result of a construction order cannot be determined reliably, the

order revenue is only recorded to the extent to which the order costs incurred can probably

be reimbursed.

All current construction orders with a net credit balance towards the customers, in which

the costs incurred plus the profi ts recorded (or minus the losses recorded) exceed the total

of the partial invoices and/or the payments received on account, are shown as an asset in

the consolidated fi nancial statement. On the other hand, all current construction orders with

a net debit balance towards customers in which the total of the partial invoices exceeds the

costs incurred plus the profi ts recorded (or minus the losses recorded) are shown under

liabilities.

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3.8 Financial assets and liabilities

3.8.1 Financial assets

Generally, the fi nancial assets shown in the balance sheet are divided into the following

categories:

- “Loans and receivables“ [LaR]

- Financial assets available for sale [AfS]

- Financial investments to be held until fi nal maturity

- Financial assets held for sale or designated at the fair value [FAHfT]

“Loans and Receivables“ (accounts receivable for sales and services, other accounts re-

ceivable and parts of other assets) are non-derivative fi nancial assets with fi xed and/or

defi nable payments, which are not listed on an active market. These arise if ALTA FIDES

Group directly provides cash and cash equivalents, goods or services to a debtor without

any intention of trading in the accounts receivable.

“Loans and receivables“ are initially assessed at the fair value which usually corresponds to

the costs of acquisition under consideration of transaction costs; as of subsequent cut-off

dates, these are assessed at continued costs of acquisition.

If there are doubts as to whether accounts receivable will be covered, adequate individual

adjustments of value are made. Delayed or sluggish payments received, bankruptcies and

legal proceedings in combination with missing securities or securities which do not retain

their value are indications of this. If the amount of the value adjustment is reduced during

one of the following reporting periods and if this reduction is objectively attributable to

circumstances which have arisen after the impairment is recorded, the value adjustment

recorded earlier is reversed again. A subsequent reversal of the impairment losses is

recorded with an impact on net income in as far as the book value of the asset at the time

of the reversal of impairment does not exceed the continued costs of acquisition.

Accounts receivable are written off as soon as they become irrecoverable.

Financial assets available for sale are non-derivative fi nancial assets, which either have

to be allocated to this category or which have not been allocated to any other category

reported.

They are recognised directly at the fair value in equity by offsetting against other reserves

(revaluation reserve).

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Acquisitions and sales of fi nancial assets which are common on the market are assessed as

of the trading day.

As of every cut-off date an inspection is carried out as to whether there are objective

indications of an impairment of the fi nancial asset. In the event of equity instruments which

are classifi ed as fi nancial assets available for sale, an essential or lasting decline of the fair

value to below acquisition costs has to be considered an indication of an impairment. If

there is an indication for a lasting impairment of assets available for sale, a depreciation on

the fair value is effected. The cumulated losses recognised directly in equity so far are then

recognised in the depreciations in as far as such affect income. Impairment losses recorded

with their impact on income are not written up again with an impact on income.

Financial assets held for sale or designated at the fair value are assessed at the fair value

(market value) both during initial and subsequent valuations. This includes the fi nancial

assets held for trading and the derivative fi nancial instruments (with a positive fair value).

Cash and cash equivalents (cash in hand and cash at bank) are shown at their nominal

value which corresponds to the fair value on account of their short-term character.

3.8.2 Financial obligations

Loan liabilities and other liabilities [FLAC] are assessed at their fair value during the

fi rst assessment. Subsequent valuation is effected at the continued costs of acquisition.

Differences in the liabilities between the amount payable (after deduction of the trans-

action costs) and the amount repayable are generally distributed over the term of the loan

agreement by using the real interest rate method (use of the original real interest rate) and

recognised in the profi t and loss account.

Liabilities are classifi ed as being long-term if the contract provides for redemption after a

period of 12 months.

Financial liabilities held for sale or designated at the fair value [FLHfT] are assessed at

the fair value (market value) both during initial assessments and during the following

assessments. This includes the fi nancial liabilities held for trading and the derivative fi nancial

instruments (with a negative fair value).

So far, the Group has not used any derivative financial instruments or hedging trans-

actions.

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3.9 Long-term assets held for sale

Long-term assets which are to be sold by means of an asset deal are shown separately in the con-

solidated balance sheet in accordance with IFRS 5 provided a sale in the current state is possible

and very likely during the next 12 months. The properties intended for sale are shown separately

in the consolidated statement of changes in non-current assets.

The evaluation of the assets intended for individual sale is effected immediately before reclas-

sifi cation according to the relevant provisions so far. After that, the book values established this

way are compared to the net time values (fair value minus costs of sale) of the asset and/or of

the group of assets to be sold with the exception of the investment property assessed at the fair

value model. These assets are shown at the respective lower value of book value and fair value

less costs to sell. After that, only changes in the fair value less costs to sell are considered in the

subsequent assessment of individual long-term assets held for sale.

3.10 Reserves, contingent assets and contingent liabilities

Reserves are debts which are uncertain in terms of their amount or due date. Reserves are

formed in case the group has a legal or actual obligation to another party and in case

the settlement of the obligation is likely to lead to an outfl ow of value and the amount of the

reserve can be determined reliably. The reserve is valued on the basis of the best possible

estimate of the extent of the obligation according to IAS 37, IAS 19 and IFRS 2. Reserves which

do not lead to an outfl ow of resources as early as during the following year are reported at

their settlement value discounted to the balance sheet date in case the interest rate effect is

essential. Discounting is based on interest rates before taxes refl ecting the current market

expectations regarding the interest rate effect and the risks which are specifi c to the liability.

Liabilities are not netted out against claims to reimbursement.

If the amount of the liability can be determined clearly and there is no doubt regarding the

claims on such, the liability is reported under the balance sheet item “Accounts payable for

goods and services” or “Other short-term liabilities”.

Contingent liabilities are not shown in the consolidated fi nancial statement; however, they

are specifi ed in the notes to the consolidated fi nancial statement provided the outfl ow of

resources is possible with a commercial benefi t. Likewise, contingent assets are not shown

in the balance sheet of the consolidated fi nancial statement; however, they are recorded in the

notes to the consolidated fi nancial statement if the infl ow of a commercial benefi t is possible.

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3.11 Taxes

3.11.1 Deferred tax assets and tax liabilities

Deferred tax assets and tax liabilities are formed using the asset and liability method. De-

ferred tax assets and tax liabilities are assessed for temporary differences between the tax

base of the assets and liabilities and their book values in the IFRS statement. Furthermore,

deferred tax assets and liabilities are taken into account at the level of the Group in case

such result from consolidating entries.

Deferred tax assets for temporary differences and tax losses carried forward are assessed at

the amount at which the temporary differences and/or the tax losses can probably be set

off against a positive future tax income. A lump-sum risk deduction of 40% was effected in

the calculation of the deferred tax assets on tax losses brought forward as of 31st December

2008.

Deferred tax assets are evaluated using the tax rates and laws which are already in force on

the balance sheet date or which have essentially been adopted legally and the validity of

which is expected at the time of the realisation of the deferred tax asset.

As in the previous year, a tax rate of on average 29.0%, which corresponded to the uniform

corporation tax rate of 15.0% plus solidarity tax (5.5%) as well as the applicable business

tax rate (13.175%), was used for the calculation of the deferred taxes.

Deferred tax assets and tax liabilities are shown in the balance sheet after netting-out in

case such exist at the same tax authority for the same taxable entity. Deferred tax assets and

tax liabilities are reported as an element of the long-term liabilities on account of aspects of

maturity on the basis of the structure of the balance sheet.

3.11.2 Sales taxes

Except for the following cases, sales revenue, expenses and assets are recorded after the

deduction of sales tax:

– In case the sales tax incurred upon the acquisition of assets or services cannot be

refunded by the tax authority, the sales tax is recorded as a part of the costs of production

of the asset and/or as a part of the expenses.

– Accounts receivable and accounts payable are assessed together with the amount of

sales tax contained therein.

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The amount of sales tax which is refunded by the tax authority or paid over to it is shown

under the other short-term accounts receivable or other short-term accounts payable in the

consolidated balance sheet.

3.11.3 Taxes on income and profi ts

The actual claims to a tax refund or tax liabilities for the current accounting period are

shown at the amount which is expected for a refund by the tax authority or a payment to

the tax authority. The calculation of the amount is based on the tax rates and tax laws in

force on the balance sheet date.

3.12 Costs of loan capital

The costs of loan capital were recorded according to the benchmark method which was

permissible until 31st December 2008. According to said method, the full amount of the

interest on loan capital was reported as expenses in the accounting period during which

such interest was incurred.

3.13 Realisation of revenue

Revenue is realised if the commercial benefi t is likely to accrue to the Group and the amount

of the revenue can be determined reliably. Revenue has to be assessed at the fair value of the

consideration received. Cash discounts, discounts and sales tax or other charges shall not be

considered. Furthermore, the realisation of revenue is based on fulfi lment of the recognition

criteria listed below.

The sales revenue comprises:

– Net rents

– Ancillary leasing costs

– Services

Realisations of revenue in sales transactions (e.g. of investment property) are effected once

all essential commercial opportunities and risks in connection with the property have been

transferred to the buyer and once the seller does not retain any rights of disposal or effective

authority to dispose of the subject of the sale and once the amount of the revenue as well

as the actual costs which have been incurred or will be incurred in connection with the sale

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can be determined reliably and once the commercial benefi t from the sales transaction is

suffi ciently likely to accrue to the company. Profi ts and losses from the disposals of long-

term assets are established as the difference between the sales revenue and the book value,

if applicable, minus any directly allocable selling costs and recognised under the other

operating revenue or expenses in as far as such affected income.

Interest revenue and expenses are adjusted on an accrual basis under consideration of the

investment and/or loan amounts received and the interest rates to be applied on the basis

of contractual agreements.

Revenues from services (e.g. reimbursement of operating costs) are realised in accor-

dance with the progress of the performance which is established as per the “cost-to-cost“

method.

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4.1 Intangible assets

The intangible assets comprise software acquired for valuable consideration. The deprecia-

tions exclusively comprise scheduled depreciations.

4.2 Property, plant and equipment

The real estate property used by the Company itself (offi ces and business premises) in Leipzig,

Schwägrichenstraße 11 and real estate properties constructed for future use as a fi nancial

investment, as well as the furniture and fi ttings (including the sample apartment in Leipzig) are

reported under property, plant and equipment.

If applicable, all upstream ancillary costs of acquisition regarding the future investment

properties are shown under this item. As long as equitable property in these real estate prop-

erties has not been transferred to the Group, these costs are treated as construction in progress

(cf. IAS 40.9d). A reclassifi cation to investment properties is effected at the time at which

ownership, use, charges as well as risks and opportunities regarding the real estate property

are transferred to the Group.

Costs of acquisition

As of 1st January 2,319 - Additions 1,032 2,319 Disposals - - As of 31st December 3,351 2,319

Depreciations

As of 1st January 259 - Additions 1,032 259 Disposals - - As of 31st December 1,291 259

31. Dezember 2,060 2,060

4. Notes to the balance sheet

Intangible assets

(EUR) 2008 2007

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During the year under review property, plant and equipment have developed as follows:

Property, plant and equipment

Costs of acquisitionand productionAs of 1st January 2008 7,099,163 271,290 - 7,370,453Additions 338,804 52,406 - 391,210Transfers (7,029,947) - - (7,029,947)Disposals (85,717) - - (85,717)As of 31st December 2008 322,303 323,696 - 645,999

DepreciationsAs of 1st January 2008 19,455 117,210 - 136,665Additions 2,197 40,419 - 42,616Revaluation 52,848 - - 52,848Disposals - - - 0As of 31st December 2008 74,500 157,628 - 232,129

Total 247,803 166,067 0 413,870

Furniture and fi xtures Upstream costsof acquisition

Land and buildings 2008

(EUR)

Costs of acquisitionand productionAs of 1st January 2007 799,041 229,773 - 1,028,814Additions 6,691,143 52,823 - 6,743,966Disposals (391,020) (11,306) - (402,327)As of 31st December 2007 7,099,163 271,290 - 7,370,453

DepreciationsAs of 1st January 2007 33,851 84,171 - 118,022Additions 3,875 47,681 - 51,556Disposals (18,270) (14,643) - (32,914)As of 31st December 2007 19,455 117,210 - 136,665

Total 7,079,708 154,080 0 7,233,788

Furniture and fi xtures Upstream costsof acquisition

Land and buildings 2007

(EUR)

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The development property in Leipzig, Grimmaischer Streinweg 7-9 was transferred from

property, plant and equipment to inventories as of 31st December 2008 after the original

intention of developing the property for a future use as an investment property had been

abandoned.

The book value of the real estate property used by the company in Leipzig, Schwägrichen-

straße 11, which would have been assessed as of 31st December 2008 if the property had

been assessed according to the historical cost principle, would have amounted to EUR

148,095 (revaluation model EUR 247,803).

4.3 Investment property

During the 2008 fi nancial year the book value of the investment property developed as

follows:

The total amount of the additions concerns the acquisition of existing real estate properties

in the segment of student living in Berlin, Göttingen and Jena by CAMPUS 1. Verwaltung

GmbH.

The real estate properties were assessed at the fair values (current values) as of 31st

December 2008. The fair value corresponds to the total for which an asset could be

traded between competent parties willing to enter into a contract as between third parties

as of the valuation date.

Fair Value

(EUR) 2008 2007

As of 1st January 59,324,391 34,533,721Additions 23,318,464 17,162,598Additions from subsequent acquisition costs 3,315,396 -Transfers to assets held for sale (96,200) -Disposals (4,027,562) (2,399,799)Net profi t (loss) from the fair value assessment 4,073,636 10,027,870

As of 31st December 85,908,125 59,324,391

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As of the 31st of December 2008 the fair values amounted to:

– KEUR 45,682 for real estate properties valued according to the DCF method,

– KEUR 40.226 for real estate properties valued according to the comparative value

method.

The fair values were established at the level of the accounting entities. Accounting entities

usually comprise the entire real estate property (land and buildings, plant facilities as well as

outdoor facilities and garages).

There are no legal restrictions on the disposal of the investment properties; de facto

restrictions on disposal cannot be discerned.

There are no legal obligations to sell the investment properties at certain prices or to buy

such properties.

In 2008 the rental income from the investment property amounted to EUR 6,123,130 (pre-

vious year: EUR 4,552,662). This only includes rents from the real estate properties held by

CAMPUS 1. Verwaltung GmbH for approximately six months on account of the acquisition

of the property in the course of the year.

During the past fi nancial year the vacancy rate of the investment properties amounted to

14.06% of all rental units or 13.03% of the entire rental area on average. Furthermore,

1.52% of all rental units or 1.18% of the entire rental area were not available for letting.

Haus- und Grundstücksgesellschaft Holzhausen mbH 35,704,924 30,426,477CAMPUS 1. Verwaltung GmbH 27,180,000 -AF Property GmbH 15,877,086 19,501,063ALTA FIDES AG 3,965,160 4,070,000AF Ferdinand-Lasalle-Straße 16 GmbH 1,386,118 2,699,061AF Trading GmbH 1,199,377 1,641,142AF Leibnizstraße 11 GmbH 348,000 752,649AF Röntgenstraße 12 GmbH 247,460 234,000

Total 85,908,125 59,324,391

Fair value of the real estate propertiesbroken down according to affi liated companies

(EUR) 31/12/2008 31/12/2007

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4.4 Other long-term accounts receivable

The balance sheet value of EUR 1,100,465 reported for the previous year essentially com-

prised funds due under a loan to Berner Group GmbH, Wiesbaden, (EUR 1,008,489), which

was repaid except for an interest element. The accounts receivable from interest are reported

under the short-term assets.

4.5 Deferred tax assets

During the previous year Haus- und Grundstücksgesellschaft Holzhausen mbH only had

deferred tax assets regarding usable tax losses brought forward. In accordance with the

provisions in art. 8c KStG n.F. [German Corporate Tax Act, new version], these could not be

used any more and were fully written off after the change of the majority shareholder at the level

of ALTA FIDES AG in July 2008.

For this reason, only losses incurred from August 2008 were taken into account in the calculation

of the deferred tax assets on usable tax losses brought forward as of the balance sheet date.

4.6 Inventories

The inventories (EUR 69,248,570; previous year: EUR 45,512,352) comprise real estate

properties which are to be sold without any further modifi cations (real estate property held

Deferred tax assets

(EUR) 31/12/2008 31/12/2007

Deferred tax assets Usable losses brought forward (corporate tax) 548,400 818,088 Usable losses brought forward (trade tax) 371,323 681,094 Valuation differences in the investment properties 34,320 419,737 Valuation differences in liabilities - 93,085 Valuation differences in the reserves - 46,980 Valuation differences in the remaining assets - 40,888

Total 954,043 2,099,873

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for sale) as well as developer properties which do not fulfi l the criteria for turnover recogni-

tion as per IAS 11 “Construction Contracts“.

Structure of the inventories

Heidelberg, Kranichweg 7,772,508 -

Leipzig, Grimmaischer Steinweg 7-9 6,620,000 -

Nürnberg, Ulmenstr.15-29 4,830,000 5,305,560

Dresden, Räcknitzhöhe 35 3,700,000 4,357,407

Brandenburg, St.-Annen-Straße 3,616,028 -

Nuremberg, Sulzbacher Str.9 3,300,000 3,485,077

Karlsruhe, Degenfeldstr. 5 3,165,650 2,686,765

Greifswald, Scharnhorststraße 2,985,189 -

Osnabrück, Wilhelm-von-Euch-Str.36-44 2,800,000 2,811,738

Leipzig, Paul-List Str. 24/26 2,632,572 1,811,255

Leipzig, Liechtensteinstr. 9-39 2,424,886 -

Lübeck, Große Burgstr. 55-59 2,100,000 2,205,000

Leipzig, Kurt-Eisner-Str. 70 2,000,000 2,287,678

Nürnberg, Sulzbacher Str. 35 1,930,000 2,205,000

Bielefeld, Feilenstr. 8 1,455,798 1,455,798

Bensheim, Hauptstr. 35 1,400,000 1,455,798

Lausen (only land) 1,344,453 -

Leipzig, Hauptmannstr. 2 1,259,070 -

Leipzig, Adolf Str. 26 1,212,485 526,696

Karlsruhe, Kaiserstr.186 1,183,910 1,195,831

Erlangen, Drausnickstr. 1/1a 1,119,407 1,966,396

Leipzig, Querstraße 1,046,231 -

Markkleeberg, Villa Barclaya 1,030,842 -

Greifswald, Mittelstraße 982,635 -

Reutlingen, Tübinger Str. 61/63 910,000 1,091,846

Neu-Ulm, An der kleinen Donau 2 883,876 883,876

Brandis, Schloß Brandis 679,292 -

(EUR) 31/12/2008 31/12/2007

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Continued

Nuremberg, Harsdörfferstr. 4 640,000 728,230

Hannover, Grahnstr. 17,19 590,000 727,903

Gießen, Johannesstr. 15 571,921 571,921

Saarbrücken, Kaiserstr. 6 571,921 571,921

Nuremberg, Landshuter Str. 33 415,947 -

Nuremberg, Heynestr. 40 390,000 416,135

Leipzig, Ferdinand-Lassalle-Str. 7 374,337 1,247,712

Greifswald, Hafenstr./Marienstraße 346,806 -

Leipzig, Schwägrichen Str. 15 210,086 5,000

Leipzig, Lausicker Straße 165,961 226,623

Leipzig, Simsonstr. 7 158,160 -

Markkleeberg, Villa G 113,681 198

Markkleeberg, Villa H 111,175 171,625

Leipzig, Rosentalgasse 2 73,103 76,214

Leipzig, Mozartstr. 19 59,074 50,527

Leipzig, Obere Eichstädt Str. 2-4 34,424 34,424

Leipzig, Dorfstraße 16,075 89,206

Markkleeberg, Villa Elisiana 9,495 180,566

Markkleeberg, Villa Fabiola 7,367 103,589

Leipzig, Schokoladenpalais 2,400 2,400

Markkleeberg, Villa Darvin 1,806 196,104

Brandis, Brandis Castle – Ailette Rustique - 485,626

Leipzig, Adolf Str. 28 - 441,705

Regensburg, Landshuter Straße - 415,947

Leipzig, Ferdinand-Lassalle-Str. 16 - 408,885

Others - 2,628,169

Total 69,248,570 45,512,352

(EUR) 31/12/2008 31/12/2007

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As of 31st December 2008, the following transfers were made:

The development property in Leipzig, Grimmaischer Steinweg 7-9, was transferred from

property, plant and equipment to inventories as of 31st December 2008. A valuation report

for the property as of the balance sheet date was prepared by the internationally active real

estate experts CB Richard Ellis GmbH, Berlin. The valuation (EUR 6,620,000) was prepared

according to the residual value method.

The development property in Markkleeberg was transferred from property, plant and equip-

ment to inventories since there are no corresponding construction contracts.

Depreciations on inventories were effected to the amount of EUR 5,204,275 (previous year:

EUR 0) in order to include these in the balance sheet at the lower net realisable value. With

the exception of the development property in Leipzig referred to above, the depreciations

were effected on the basis of a valuation expertise according to the residual value method.

Transfers

(EUR) 2008 2007

Leipzig, Grimmaischer Steinweg (Augustusplatz) 7,029,947 -

Markkleeberg, Villa Barclaya 1,030,842 -

Total 8,060,789 0

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4.7 Accounts receivable and payable from contract production

The accounts receivable and accounts payable from contract production concern the real

estate properties for which modernisation, reconstruction or other construction measures

are carried out on behalf of third parties minus the payments received on account.

Structure of the accounts receivable and payable from contract production according to construction orders as of 31st December 2008

Current construction contracts with net credit

balance towards customers

Brandis, Brandis Castle – Orangerie 2,781,045 2,151,592 629,453

Brandis, Brandis Castle – Ailette Rustique 2,744,001 2,599,699 144,302

Total 5,525,046 4,751,291 773,755

Current construction contracts with net debit

balance towards customers

UniVersa (Erlangen, Drausnickstraße 1) 6,067,337 6,581,973 (514,636)

Leipzig, Sasstr. 22 (front building) 672,944 1,133,848 (460,905)

Total 6,740,281 7,715,822 (975,541)

Gross account receivable

Payment received on account

Net account receivable

(EUR)

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Costs to the amount of EUR 13,553,175 (previous year: EUR 6,761,764) were incurred for the

construction orders; as during the previous year, the profi ts reported amounted to EUR 0 since

the result of a construction order cannot be estimated reliably at the moment on account of the

internal cost accounting method. An expected loss on account of the construction order was

taken into account through the following depreciations:

Structure of the accounts receivable and accounts payable fromcontract production according to construction orders as of 31st December 2007

(EUR) Gross account receivable

Payment received on account

Net account receivable

Current construction contracts withnet credit balance towards customers

Brandis, Brandis Castle – Ailette Rustique 1,241,795 107,781 1,134,015

Brandis, Brandis Castle – Orangerie 1,037,926 0 1,037,926

Markkleeberg, Castle Manor II 879,074 306,623 572,451

Markkleeberg, Seeresidenz – Villa Candida 483,680 331,209 152,471

Leipzig, Ferdinand-Lassalle-Straße 16 (rear building) 293,858 203,594 90,264

Markkleeberg, Seeresidenz – Villa Alba 443,972 389,833 54,140

Total 4,380,306 1,339,040 3,041,267

Current construction contracts withnet debit balance towards customers

UniVersa (Erlangen, Drausnickstraße 1) 1,966,396 2,434,768 (468,372)

Markkleeberg, Castle Manor I 415,061 748,993 (333,931)

Total 2,381,458 3,183,761 (802,303)

Depreciations

(EUR) 2008 2007

Erlangen, Drausnickstraße 1 (UniVersa) 900,009 -

Leipzig, Sasstraße 22 (front building) 271,339 -

Brandis, Brandis Castle (Ailette/Rustique) 116,501 -

Total 1,287,848 0

(EUR)

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The security deposits reported under short-term debt capital amount to EUR 154,519

(previous year: EUR 90,039).

4.8 Accounts receivable for sales and services

The trade receivables largely comprise accounts receivable for rents and billed service

charges (in the previous year these also comprised outstanding payments from the sale of

apartments).

4.9 Accounts receivable from affi liated companies

Accounts receivable for sales and services

(EUR) 31/12/2008 31/12/2007

Trade receivables 1,263,523 5,776,876

Apportionable operating costs (as yet unrealised) 1,890,601 -

Apportionable operating costs (as yet unrealised) 3,154,123 5,776,876

Valuation adjustments (42,622) (49,087)

Total 3,111,502 5,727,790

(EUR) 31/12/2008 31/12/2007

Wallace Properties S.à r.l. 221,560 -

Roslyn Properties S.à r.l. 204,146 -

REO – Real Estate Opportunities GmbH 74,146 -

Total 499,853 0

Accounts receivable from affi liated companies

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The accounts receivable from affi liated companies are connected with the acquisition of

real estate properties and concern payments of rents and services charges to a notary trust

account (blocked account) until the full payment of the purchase price by CAMPUS 1. Ver-

waltung GmbH.

4.10 Tax assets

The tax assets from corporate tax including solidarity tax essentially include capital gains tax

in connection with the dividend payments in 2007.

The tax assets to the amount of EUR 169,358 reported in the previous year largely concerned

overpayments of tax.

Tax assets

(EUR) 31/12/2008 31/12/2007

Corporate tax and solidarity tax 990,200 159,055

Trade tax 20,808 10,304

Total 1,011,008 169,358

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4.11 Other short-term accounts receivable

The account receivable from Gerd Eichinger results from capital gains tax regarding the

profi t distribution for 2007.

Other short-term accounts receivable

(EUR) 31/12/2008 31/12/2007

Accounts receivable from Gerd Eichinger 57,605 28,516

Input tax refund claims, sales tax prepayments 39,629 223,782

Accounts receivable from Norbert Ketterer 30,366 -

Accounts receivable from loans (various) 21,704 158,299

Payments on account regarding commission fees BHS 21,500 -

Deposits 13,938 4,500

Accounts receivable from property management 8,827 -

Cash in transit - 57,800

Others 92,164 87,043

Total gross accounts receivable 285,732 559,940

Adjustments (61,129) -

Total net accounts receivable 224,604 559,940

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4.12 Other short-term assets

CAMPUS REAL ESTATE AG and AF HEKATE GmbH & Co. KG granted short-term loans

totalling EUR 372,400 and EUR 47,600 to Mr. Engelhardt in a contract of 28th November

2008. These loans are unsecured and non-interest-bearing. The loan contracts can be termi-

nated by either party with a period of notice of two banking days if the condition precedent

of the notarised contract of sale and transfer of shares of 27th November has been fulfi lled

or if Mr. Engelhardt has waived fulfi lment of the condition precedent.

The sale of all shares in ER_C@MPUS GmbH & Co. KG (in total 45%) held by Mr. Engelhardt

to CAMPUS REAL ESTATE AG and AF HEKATE GmbH & Co. KG at a price of in total EUR

420,000 constituted the subject of the notarised contract of sale and transfer of shares of

27th November 2008. The contract is subject to the condition precedent of the conversion

of ER_C@MPUS GmbH & Co. KG into a German limited liability company [GmbH] and of

approval of the purchase by the general meeting, if such is required.

Both conditions had not been fulfi lled by 31st December 2008.

4.13 Stocks and shares

All stocks and shares were sold during the year under review. They were used as short-term

investments and for the purpose of interest optimisation. The stocks and shares held for sale

were shown in the balance sheet at their market values in accordance with IAS 39. The market

values as of the cut-off date for the previous year amounted to EUR 2,172,114.

Other short-term assets

(EUR) 31/12/2008 31/12/2007

Accounts receivable from Georg Engelhardt 420,000 -

Prepayments 83,426 34,251

Interest from funds due under a loan to Berner Group GmbH 69,733 -

Others 53,182 63,114

Total 626,341 97,365

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4.14 Cash and cash equivalents

Cash and cash equivalents

Haus- und Grundstücksgesellschaft Holzhausen GmbH 410,405 734,440AF 5. Vermögensverwaltung GmbH 386,605 1,256AF 11. Vermögensverwaltung GmbH 275,965 577,402Widicon Trade & Consulting GmbH & Co. KG 189,938 -AF Röntgenstraße 12 GmbH 161,617 7,698AF 12. Vermögensverwaltung GmbH 112,766 2,140AF Seeresidenz Markkleeberg GmbH 98,223 332,076AF Schlossgut GmbH 95,646 6,687ALTA FIDES AG 66,662 3,616,294PF St.-Annen-Straße GmbH 64,333 -AF Property GmbH 65,300 166,394AF 14. Vermögensverwaltung GmbH 32,993 84AF Ferdinand-Lasalle-Straße 16 GmbH 24,058 9,081AF Trading GmbH 23,073 87,549PF 1. Verwaltung GmbH 21,781 -PROFECTO AG 16,530 241,801ER_C@MPUS GmbH & Co. KG 8,437 2,437,726CAMPUS REAL ESTATE AG 6,455 751,699CAMPUS Heidelberg GmbH 5,550 -CAMPUS 3. Vermögensverwaltung GmbH 2,911 -AF Leibnizstraße 11 GmbH 2,033 121,652CAMPUS 6. Vermögensverwaltung GmbH 1,687 -AF 16. Vermögensverwaltung GmbH 1,021 -IVB Immobilien Vermögen und Beteiligungs GmbH 849 8,653CAMPUS 5. Vermögensverwaltung GmbH 844 -AF Schlossresidenz GmbH 741 107,863CAMPUS 4. Vermögensverwaltung GmbH 431 -AF Marienhöhe GmbH & Co. KG 273 9,450IVB Menckestraße 39 GmbH & Co. KG 212 904ER_C@MPUS Verwaltung GmbH 190 4,390IVB – HGH GbR 166 29,886CAMPUS 1. Verwaltung GmbH 116 -CAMPUS Service GmbH 70 25,507CAMPUS Karlsruhe GmbH 13 14,222IVB Immobilien Vermittlung und Beratung GmbH 6 293Widicon GmbH 1 -IVB Coppistraße 39 GmbH & Co. KG - 589

Total 2,077,902 9,295,736

(EUR) 31/12/2008 31/12/2007

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The item “Cash and cash equivalents“ to the amount of EUR 2,077,902 (previous year: EUR

9,295,736) comprises cash and short-term bank deposits held within the Group.

Cash and cash equivalents to the amount of EUR 219,329 (previous year: EUR 89,729) are

not freely available since these are largely security deposits.

4.15 Long-term assets held for sale

This asset concerns an apartment of the affi liated company AF Trading GmbH (segment

“Renting and Trading Real Estate“) which has been sold. However, the transfer of equitable

property to the buyer will only take place in 2009.

4.16 Equity

With regard to the development of equity reference is made to the Statement of Changes

in Equity.

4.16.1 Subscribed capital

As of 31st December 2008 the subscribed capital of ALTA FIDES AG amounts to EUR

7,050,000 (previous year: EUR 7,050,000). The equity capital is divided into 7,050,000

ordinary bearer shares without any changes compared to the past.

Long-term assets held for sale

(EUR) 2008 2007

As of 1st January - -

Additions from reclassifi cation 96,200 -

Disposals - -

Net profi t (loss) from the fair value evaluation - -

As of 31st December 96,200 0

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4.16.2 Authorised capital

In the general meeting of 25th June 2007 the Management Board was authorised to increase

the equity capital of the Company by issuing new ordinary bearer shares once or several

times in return for cash contributions or contributions in kind until 15th June 2012 with the

approval by the Supervisory Board. However, such increase shall amount to at maximum

EUR 3,525,000 (authorised capital). The new shares can also be issued to employees of the

Company. The Management Board establishes the amount of issue of the new shares and

can also determine the commencement of the participating rights of such in deviation to art.

60 paragraph 2 AktG [German Companies Act]. It is authorised to determine the further de-

tails of the respective capital increase as well as the conditions for the issue of the shares and

the contents of the rights inherent in the shares with the approval by the Supervisory Board.

On principle, the shareholders shall be granted a subscription right; however, according to

art. 186 paragraph 5 sentence 1 AktG the shares can also be taken over by one or several

credit institutions or by one or several companies operating according to art. 53 paragraph 1

sentence 1 or art. 53b paragraph 1 sentence 1 or paragraph 7 of the German Credit Services

Act with the obligation to offer the shares in question to the shareholders for subscription.

The Management Board is authorised to exclude the shareholders’ subscription right with

the approval by the Supervisory Board.

4.16.3 Conditional capital

In the general meeting on 1st August 2008 the Management Board was authorised to issue

registered or bearer convertible bonds and/or option bonds or participation rights with or

without conversion or option rights or a conversion obligation (referred to jointly as the

“bonds” hereinafter) with a total nominal amount of up to EUR 80,000,000 with a term

of up to 20 years once or more than once until 15th June 2013 with the approval by the

Supervisory Board and to grant the bearers and/or creditors of bonds conversion or option

rights regarding new ordinary bearer shares of the Company with a proportionate share in

the equity capital of up to EUR 3,525,000 as provided for in the terms of the bonds.

Furthermore, the Management Board was authorised to increase the equity of the Compa-

ny by up to EUR 3,525,000 by means of the issue of up to 3,525,000 new ordinary bearer

shares accounting for a proportionate share in the equity capital of EUR 1 each (conditional

capital).

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4.16.4 Capital reserve

The capital reserves essentially comprise the payments made on account of the increase of

the equity in the fi nancial year 2006 (agio). The costs of the capital increase and of fl oatation

were deducted from this item.

4.16.5 Retained income

The equity item “Retained income” comprises the statutory reserve according to art. 150

AktG and other retained income.

The other retained income comprises retained profi ts from the previous years. The retained

income is structured as shown in the statement on changes in equity.

4.16.6 Revaluation reserve

The change in the revaluation reserve comprises EUR 52,848 for the adjustment of the fair

value of the real estate property used by the Company in Leipzig, Schwägrichenstraße 11

on the basis of an independent expertise as of 31st July 2008 and the disposal of the stocks

and shares classifi ed as assets held for sale.

4.16.7 Minority shares

Profi t shares to the amount of EUR 94,801 (previous year: 477,137) are allocated to the

minority shares.

4.17 Long-term liabilities to banks

Liabilities to banks with a residual term of more than one year are reported. As of the

balance sheet date this concerned a total of 36 loans, which largely have a fi xed interest rate

(interest rates as of the balance sheet date between 3.75% and 6.5% p.a.).

All liabilities to banks are secured by registered land charges to the amount of the respective

loan proceeds.

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4.18 Deferred tax liabilities

4.19 Other long-term reserves

The reserve exclusively concerns the share option granted to the former chief fi nancial offi cer.

The reserve was written back during the year under review following the termination of the

contract of service with the member of the Management Board in October 2008 with effect

from 30th November 2008.

Latent tax liabilities

(EUR) 31/12/2008 31/12/2007

Valuation differences regarding investment properties 7,209,974 6,032,311

Valuation differences in the inventories - 1,406,128

Valuation differences in the liabilities - (28,471)

Total 7,209,974 7,409,968

Long-term reserves

(EUR) 2008 2007

As of 1st January 162,000 14,800

Call on reserves - -

Retransfer (162,000) -

Additions - 147,200

As of 31st December 0 162,000

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4.20 Accounts payable to affi liated companies

The main shareholder, GOETHE INVESTMENTS S.à r.l., granted ALTA FIDES AG a credit line

to the amount of EUR 30 million until 31st December 2010 by means of a contract of 25th

November 2008. In the framework of the current liquidity plan, the credit line can be used

specifi cally for interim fi nancing of project developments, for fi nancing existing properties

or for one-off expenses incurred in the framework of restructuring of ALTA FIDES AG. The

loans granted by GOETHE INVESTMENTS S.à r.l. (EUR 7.8 million) until 25th November

2008 are taken into account with regard to the credit line. The interest rate amounts to 9.0%

p.a. As of 31st December 2008, the credit line was used to an amount of EUR 11,280,272.

The short-term liabilities towards affi liated companies essentially comprise the outstanding

purchase price liabilities (including interest) from the acquisition of existing real estate

properties in the segment “YOUNIQ – Student Living“ in Berlin, Göttingen and Jena by

CAMPUS 1. Verwaltung GmbH.

Accounts payable to affi liated companies

(EUR) 31/12/2008 31/12/2007

Long-term 11,280,272 0

GOETHE INVESTMENTS S.à r.l. 11,280,272 -

Long-term 23,734,427 0

Wallace Properties S.à r.l. 9,813,359 -

REO – Real Estate Opportunities GmbH 9,451,108 -

Roslyn Properties S.à r.l. 4,469,960 -

Total 35,014,698 0

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4.21 Other long-term liabilities

The security deposits largely comprise retentions from subcontractors until the end of the

warranty period.

Deposits received largely concern rent security deposits.

4.22 Other short-term reserves

Other long-term liabilities

(EUR) 31/12/2008 31/12/2007

Security deposits 219,329 89,729

Deposits received 198,580 73,403

Total 417,909 163,133

Other short-term reserves

(EUR) 2008 2007

Other short-term reserves 419,270 2,045,728

Call on reserves (263,916) (1,604,498)

Retransfer (136,775) (422,650)

Additions 590,365 400,690

As of 31st December 608,944 419,270

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4.23 Tax liabilities

The capital gains tax still to be paid results from a supplementary tax return (January 2009)

regarding the dividend payments by two affi liated companies made in March 2008. The

amount will be reclaimed in the framework of the tax return for 2008.

Structure of the short-term reserves

(EUR) 31/12/2008 31/12/2007

Accounts payable 215,555 100,897

Personnel costs and supervisory board emoluments 103,000 33,000

Costs of the general meeting, publications 37,800 36,000

Consultancy fees 31,240 58,049

Archiving costs 18,580 28,580

Others 202,769 162,744

Total 608,944 419,270

Tax liabilities

(EUR) 31/12/2008 31/12/2007

Capital gains tax to be paid 706,975 -

Trade tax 178,232 1,143,032

Corporate tax (including solidarity tax) 23,625 53,902

Total 908,832 1,196,934

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4.24 Short-term liabilities to banks

(EUR) Original amount

of loanEnd of

lock-down period for

interest rate

Interest rate

Short-term liabilities to banks

Type of interest

Deutsche Genossenschafts-Hypothekenbank AG 3,538,000 - Euribor plus margin Floating 3,554,233 n.a.

Deutsche Genossenschafts-Hypothekenbank AG 500,000 - Euribor plus margin Floating 500,000 n.a.

Deutsche Genossenschafts-Hypothekenbank AG 4,700,000 - Euribor plus margin Floating 4,700,000 n.a.

Deutsche Kreditbank AG 319,046 - 5.270 Fixed 319,046 n.a.

Deutsche Genossenschafts-Hypothekenbank AG 900,000 31.12.2008 Euribor plus margin Floating 900,000 n.a.

Deutsche Genossenschafts-Hypothekenbank AG 300,000 31.12.2008 - - 300,000 n.a.

Deutsche Genossenschafts-Hypothekenbank AG 1,714,219 31.12.2008 Euribor plus margin Floating 1,735,000 n.a.

Deutsche Kreditbank AG 550,000 23.01.2009 7.670 Fixed 550,000 n.a.

Deutsche Kreditbank AG 1,820,000 30.01.2009 8.400 Fixed 1,841,190 n.a.





Deutsche Bank AG 618,062 01.03.2009 5.850 Fixed 616,559 n.a.



Deutsche Kreditbank AG 256,702 30.06.2009 Cap 6.00 Floating 256,702 n.a.

Deutsche Kreditbank AG 227,332 30.07.2009 Cap 6.00 Floating 229,252 n.a.



SEB AG 22,645,353 31.12.2009 6.000 Fixed 22,645,353 n.a.

Bayerische Hypo- undVereinsbank AG 1,510,000 30.03.2009 6.846 Fixed 1,510,000 n.a.

Others (e.g. deposit liabilities) 299,865 9,061,444

Total 43,093,672 9,061,444

31/12/2008 31/12/2007

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4.25 Accounts payable for goods and services

The trade payables primarily comprise accounts receivable by suppliers from current

construction operations and for services procured.

The accounts payable for the procurement of legal, counselling and evaluation services

by ALTA FIDES AG largely comprise accounts payable to the law fi rm Lovells LLP (EUR

420,044), the consulting fi rm Dr. Baumann Böltz Wacker & Baur Steuerberater Rechtsan-

wälte Wirtschaftsprüfer (EUR 255,404), ConLead GmbH (EUR 228,539), KPMG AG Wirt-

schaftsprüfungsgesellschaft (EUR 98,517), CBRE Richard Ellis GmbH (EUR 41,650) and

CORESTATE Capital AG (EUR 6,750).

4.26 Payments on account received

Payments on account received concern payments on account by real estate buyers (both

private and professional investors). The payments on account received essentially comprise

payments on account for specifi c purposes by the clients. In as far as required by law or

agreed contractually, the payments on account received are called in line with the

provisions contained in art. 2 paragraph of the German Real Estate Agent and Commercial

Builders Ordinance.

Payments on account regarding the construction orders (EUR 12,467,113; previous year;

EUR 4,522,801) are shown netted out against these orders.

Accounts payable for goods and services

(EUR) 31/12/2008 31/12/2007

Trade payables 2,745,619 2,651,328

Prepayments of incidental rental expenses 1,974,933 -

Total 4,720,552 2,651,328

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4.27 Other short-term liabilities

The minority shares regarding shares in professional (commercial) partnerships to the amount

of EUR 0 (previous year: EUR 94,390) have ceased to apply since either the legal form of the

affi liated companies was changed to the legal form of a German limited liability company

(GmbH) during the year under review or the minority shares fulfi l the defi nition of equity

according to the amended IAS 32.

Other short-term liabilities

(EUR) 31/12/2008 31/12/2007

Outstanding construction cost invoices from

the allocation of services as of the balance sheet date 1,214,930 57,963

Purchase price liabilities regarding plot of land in Lausen 1,200,000 -

Financial statements and auditing costs 359,760 321,540

Prepaid rents 115,383 63,344

Accounts payable from payroll and church tax 37,883 39,166

Accounts receivable with credit balances

and settlement accounts 15,715 -

Accounts payable from social insurance 1,738 -

Minority shares in professional partnerships - 94,390

Accounts payable from sales tax - 222,942

Others 337,302 4,406,301

Total 3,282,711 5,205,647

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5.1 Sales revenue

The sales revenue comprises sales revenue for real estate properties, commission fees and

rental revenue and is structured as follows:

5.2 Change in stocks of fi nished goods and in work-in-progress

The item “Change in stocks of fi nished goods and in work-in-progress” essentially comprises

the capitalised production costs regarding the project development properties shown under

inventories and decreases in stock from sales.

5. Notes to the Profi t and Loss Account

Sales revenue

(EUR) 2008 2007

Revenue from contract production 10,251,822 6,761,764

Rents and invoiced service charges 6,123,130 4,552,662

Revenue from service charges which can be recharged (unrealised) 1,880,309 -

Sale of apartments 481,662 19,687,891

Commission fees received - 3,580

Other tax-free revenue 102,143 4,104

Sales reduction (43,280) (105,965)

Total 18,795,785 30,904,037

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5.3 Changes in the market value of

investment properties (net)

The existing real estate properties in the segment “YOUNIQ – Student Living” in Berlin,

Göttingen and Jena account for an essential part of the net changes in market value.

5.4 Other revenue

The other revenue is structured as follows:

Changes in the market value ofinvestment properties (net)

(EUR) 2008 2007

Appreciations in value 23,002,876 11,321,988

Impairments (18,929,240) (1,294,118)

Total 4,073,636 10,027,870

Other operating income

(EUR) 2008 2007

Revenue from the retransfer of reserves 298,775 422,650

Revenue unrelated to the accounting period 146,542 433

Insurance recoveries 4,515 6,875

Revenue from appreciations in value of short-term assets 707 11,920

Others 92,980 395,914

Total 543,519 837,791

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5.5 Material costs

Material expenses comprise the expenses for inventories (costs of production for the real

estate properties held for sale) and for modernisation and renovation measures (property

developer activity).

5.6 Payroll costs

The payroll costs are structured as follows:

Material costs

(EUR) 2008 2007

Construction costs and other services procured 20,007,253 15,426,457

Utility costs (e.g. power, gas, water) 3,469,553 1,111,271

Sales commissions 2,597,464 1,545,475

Others - -

Total 26,074,271 18,083,202

Payroll costs

(EUR) 2008 2007

Wages and salaries (staff and members of Management Board) 1,365,127 1,389,910

Salaries managing director and chief representative 310,326 -

Statutory social insurance contributions 148,849 78,401

Grants - (1,635)

Stock option schemes (allocation to reserve) - 147,200

Others 8,294 -

Total 1,832,597 1,613,876

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18 members of staff (previous year: 13) were employed on an annual average. On 31st

December 2008, the staff numbered 20 employees.

5.7 Depreciations

Depreciations

(EUR) 2008 2007

Depreciations on inventories 5,204,275 -

Depreciations on construction orders 1,287,848 -

Depreciations on property, plant and equipment 42,616 51,556

Depreciations on intangible assets 1,032 259

Total 6,535,770 51,816

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5.8 Other operating costs

The other operating costs essentially comprise costs of administration, distribution as well

as other operating costs.

This item is structured as follows:

Other expenses

(EUR) 2008 2007

Legal and professional fees 3,175,768 605,410

Advertising expenses, entertainment 809,560 396,956

Costs of auditing, preparation and counselling

(fi nancial statement costs) 681,438 481,436

Common charge, caretaker 427,032 310,019

Outside services 265,208 298,787

Rents, expenses for premises 213,391 536,649

Contributions, fees, donations and other charges 212,685 79,007

Vehicle costs (including leasing fees) 180,406 117,049

Supervisory Board emoluments 172,431 49,212

Travelling expenses 147,709 101,288

Expenses unrelated to the accounting period 119,699 24,056

Bank charges and other fees 112,391 199,613

Rent guarantees 85,216 106,180

Costs for stock exchange, publications, etc. 82,648 247,854

IT costs 38,885 46,179

Insurances 11,043 36,391

Non-deductible input tax 1,023 297,157

Losses on bad debts 663 119,899

Others 923,391 1,151,413

Total 7,660,587 5,204,554

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5.9 Financial result

The fi nancial result consists of fi nancial income and expenditure:

The interest to affi liated companies concerns the loan by GOETHE INVESTMENTS S.à r.l.

Financial income

(EUR) 2008 2007

Interest income from short-term investment 224,126 402,392

Interest income from loans (e.g. Berner Group GmbH) 64,291 63,041

Interest income according to art. 233a AO [German Revenue Code] 6,561 -

Others 102,072 57,806

Total 397,050 523,239

Financial expenditure

(EUR) 2008 2007

Interest from loans 4,578,730 2,250,588

Interest to affi liated companies 113,760 0

Interest expenditure according to art. 233a AO [German Revenue Code] 16,350 10,615

Others 3,936 48,210

Total 4,712,776 2,309,413

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5.10 Income taxes

According to IAS 12, the income taxes for the accounting period consist of the current taxes

on income and earnings and of deferred taxes.

Tax claims and tax liabilities are shown separately in the balance sheet.

The real income tax expenditure depends on the rules regarding the determination of taxable

profi t to be applied for the individual subsidiaries (taxable income of the companies). The

taxable income is derived from the individual fi nancial statements prepared in accordance

with the taxation provisions.

Income taxes – (income)/expenditure

(EUR) 2008 2007

Deferred taxes 947,201 1,022,896

Taxes on income and earnings 26,766 484,437

Additional tax payments for previous years 134,934 16,948

Additional tax payments for previous years (258,474) (373)

Total 850,427 1,523,908

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5.11 Offsetting and reconciliation of tax expenditure

5.12 Result per share

According to IAS 33, information on the result per share has to be presented for companies

whose common stock is traded publicly or trading of which at a stock exchange has been

initiated.

According to IAS 33, the result per share is established by dividing the consolidated annual

net profi t by the weighted average number of the shares issued. On principle, this parameter

can be diluted by so-called potential shares (convertible bonds, option bonds, share options).

Offsetting and reconciliation of taxes

(EUR) 2008 2007

Consolidated result before taxes on income (10,295,701) 7,649,057

Tax rate 29.00% 29.00%

Expected (tax revenue)/tax expenditure (2,985,753) 2,218,226

Non-deductible expenses 40,411 (56,352)

Non-usable losses carried forward

(art. 8c KStG n.F. [German Corporate Tax Act, new version]) 1,401,356 -

Non-usable losses carried forward (40% risk deduction) 613,149 -

Depreciation on losses carried forward from previous year 1,499,183 1,188,340

Tax refunds/ additional payments for previous years (123,540) -

Effect of missing deferral, elimination of intercompany profi ts and losses (259,550) -

Aperiodic effects 503,005 -

Tax rate for partnerships - (334,843)

Other effects 162,167 (1,491,464)

Total 850,427 1,523,908

Effective tax rate -8.26% 19.92%

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So far, ALTA FIDES AG has issued neither options or conversion rights nor share options. For

this reason, a dilution is excluded. Therefore, the diluted result per share is not calculated

since this result corresponds to the undiluted result.

However, if the instruments adopted by the general meeting of ALTA FIDES AG (authorised

and conditional capital) are used, this could lead to a dilution of the result per share in the

future.

The undiluted result per share amounts to EUR –1.59 for the 2008 fi nancial year and to EUR

0.80 for the 2007 fi nancial year (before IAS 8 corrections: EUR 1.60).

The cash fl ow statement shows how cash and cash equivalents have changed in the course

of the fi nancial year on account of the infl ow and outfl ow of funds. According to IAS 7,

payment fl ows from current operations and from investing and fi nancing activities are dif-

ferentiated.

The cash funds considered in the cash fl ow statement include all forms of cash funds and

cash equivalents consisting of cash in hand and cash at banks. Cash funds to the amount of

EUR 219,329 (previous year: EUR 89,729) are not freely available since these are deposits by

tenants which are not yet kept separately from the Group’s assets at the moment.

The cash fl ows from the investment and fi nancing activity are established on a cash basis.

The cash fl ow from current operations, on the other hand, is derived indirectly based on the

annual net profi t for the Group. In the framework of the indirect calculation the changes in

balance sheet items in connection with the current operations, which have been taken into

account, are adjusted for the effects from a change of the scope of consolidation. For this

reason, the changes in the balance sheet items concerned cannot be adjusted to the corre-

sponding values based on the published consolidated balance sheet.

Interest received and paid is reported as fi nancing activity in the cash fl ow statement.

Essential non-cash transactions concern deferred taxes and depreciations.

6. Cash fl ow statement

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IAS 14 provides for a differentiation of segment reporting according to primary and

secondary segment report formats. In this context, the prevailing origin and the type of risks

and earnings determine whether the primary report format will be business divisions or

geographical regions.

Disclosures regarding geographic regions have been omitted due to the fact that the Group

operates exclusively in Germany. The business divisions described below constitute the

primary segments.

The Group is divided into the following business divisions: “Renting and Trading Real Estate“

(formerly: “Trading and Own Portfolio“), “Project Development“, “Non-Performing Loans“,

“YOUNIQ – Student Living“ (formerly: Campus) and “Corporate“ (formerly: “Cross-

Divisional“).

With the exception of the plots of land intended for sale (inventories), the division “Renting

and Trading Real Estate“ has a long-term orientation and comprises letting as well as the sale

of real estate properties and accounts receivable.

The division “Project Development“, which has a short-term orientation, focuses on the

acquisition, modernisation and renovation of real estate properties and on the sale of these

to investors and to owner-occupiers. These properties are predominantly listed properties

which provide buyers the possibility of a special tax depreciation according to art. 7i of the

German Income Tax Act (EStG).

In the framework of the business division “YOUNIQ – Student Living“, which also has a

short-term orientation, ALTA FIDES Group as the market leader in this segment operates

lifestyle apartment facilities with 150 and more residential units for students throughout Ger-

many. This concept is based on the idea of offering students partly furnished one-bedroom

apartments in a modern environment at rents in line with the market. This is an offer which

is almost unparalleled in German university towns.

The objective of the segment “Non Performing Loans“ (or “NPL“ for short) was to buy and

sell debts secured by real estate properties. However, no sales with external third parties

were generated in the segment “Non Performing Loans“ in the fi nancial year 2008 so that

this business segment will no longer be pursued actively as of 31st December 2008.

7. Segment Reporting

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The item “Corporate“ comprises fi elds of activities which cannot be allocated to any of the

other segments.

Offsetting and reconciliation of the individual segment items to the consolidated fi nancial

statement is reported as “consolidation“. The segment revenue contains internal rent reve-

nue to the amount of EUR 22,200. The other operating income comprises transactions with

other segments (on-debiting of costs, services for project controlling and transfer of know-

how) totalling EUR 1,427,068. The internal transfer prices are based on the costs incurred.

All revenue from internal transactions constituted the subject of consolidation and/or the

elimination of intercompany profi ts and losses in the consolidated fi nancial statement. All

other transactions and trades were concluded with third parties.

The segment report is enclosed with these Notes to the Consolidated Financial Statement

as Annex 1. Annex 1 provides an overview of the distribution of sales across the business

divisions as well as of the direct costs allocated to the segments. Because of the corrections

according to IAS 8 described in section 2.5 as well as the changes regarding the accounting,

valuation and presentation methods the specifi cations regarding the previous year were

adjusted accordingly. The fi nancial impacts on the information on the individual segments

can be derived from section 2.5.

The contribution margins of the business divisions are established on this basis. The over-

head expenses which cannot be directly allocated to the segments as well as interest and

taxes are taken into account at the level of the Company in order to establish the overall

result.

According to IAS 14.61, the essential non-cash expenses have to be reported for every seg-

ment. These are primarily depreciations which can be allocated to the segments as well as

changes in the market value of the investment properties. Apart from these, there are no

further essential non-cash expenses and revenues for each segment.

The direct costs include the costs of acquisition and production of the plots of land sold, fee

and commission expenses and allocable expenses for premises.

The overhead expenses e.g. include expenses for premises which cannot be allocated, per-

sonnel overheads and various ancillary expenses.

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8.1 Risk factors

Because of its business activities the Group is generally exposed to various fi nancial risks:

currency risks, credit risks, liquidity risks and interest risks.

There are no market risks regarding fi nancial instruments since there are no fi nancial instru-

ments classifi ed as held for sale and trading in fi nancial instruments is no longer part of the

business activities of the Group following the decision not to actively pursue the segment of

“Non-Performing Loans“ with effect from 31st December 2008.

The risk management system designed in accordance with the size of the Group and

transcending the individual segments is aligned to the unpredictability of developments on

the fi nancial markets and aims at minimising the potentially negative impact on the Group’s

fi nancial situation.

At the moment, risk management is still provided by the Management Board in line with the

specifi cations adopted by the Supervisory Board.

ALTA FIDES AG identifi es, assesses and hedges fi nancial risks in close co-operation with

the fi nancial experts of the asset manager of the holding, CORESTATE German Residential

Limited.

The Management Board and the Supervisory Board establish provisions regarding interest

and credit risk management as well as regarding the appropriation of any liquidity surplus.

The Management Board and the Supervisory Board are regularly updated on the Group’s

fi nancial risk factors.

8.2 Currency risk

Up to now ALTA FIDES Group operates exclusively within the euro area. Therefore, there

are no currency risks.

8. Financial risk and capital management

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8.3 Credit risk

There are no essential credit risks within the Group. So far, the Group has not concluded

any contracts on derivative fi nancial instruments. For this reason, fi nancial transactions

are only concluded with fi nancial institutions with a high credit rating in order to keep the

counterparty risk as low as possible.

In business operations outstanding accounts are monitored both centrally at ALTA FIDES

AG and locally by the respective property managers (rents receivable). Default risks are

taken into account through individual value adjustments.

The maximum theoretical default risk is refl ected by the book value of the fi nancial assets

shown in the balance sheet. Payments received on account, security deposits and rental

deposits reduce the default risk accordingly.

The default risk is also minimised by the mix of tenants and the tenants’ credit rating (let-

ting only after prior credit investigation).

Default risks arising in the framework of the settlement of sales of plots of land or apart-

ments are minimised by the usual hedging tools in contract management. This means legal

property is only transferred once full payment has been received.

8.4 Liquidity risk

Financial planning instruments applicable throughout the Group safeguard the early identi-

fi cation of the future liquidity situation as it emerges from the implementation of the Group

strategy and group planning process. In addition to the current overview of loans connected

with a repayment plan comprising several years, the Group also keeps a liquidity plan on a

rolling monthly basis for a planning term of twelve months. The planning systems refl ect the

entire scope of consolidation.

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Financing of existing real estate properties is provided through customary real estate loans

by renowned German banks. These long-term loans are tied to the properties and repaid

from the sales proceeds in case the properties are sold. This leads to the risk that loans

might have to be taken out at considerably worse conditions in the framework of follow-

up fi nancing or upon interest rate adjustment dates. The investment properties are largely

fi nanced long-term.

ALTA FIDES Group uses comprehensive funds for the acquisition and construction of real

estate properties in the framework of project development and contract production. In this

context, the Company is usually obliged to provide the funds in advance while returns of

funds in the form of advance payments by buyers/clients or the fi nal purchase price

payments can partly only be collected in stages according to the progress of the projects (or

according to the German Real Estate Agent and Commercial Builders Ordinance – MaBV)

pursuant to mandatory legal provisions. For this reason, the Company has taken out debt

capital for interim fi nancing. This, in turn, entails the risk that the acquisition of debt capital

from credit institutions might not be possible in due time in the future or that such might

only be possible at unfavourable conditions and that payments (of purchase prices) by the

customer might be effected later than planned. If debt capital cannot be taken out in the

future or if such cannot be taken out at adequate conditions or in case raising of debt fi nan-

cing takes longer than planned by the Company, this might adversely affect the Company’s

operations as well as its fi nancial situation.

Cautious liquidity management includes a suffi cient reserve of liquid funds. As of 31st

December 2008, ALTA FIDES AG has a credit line of EUR 30 million from the majority

shareholder GOETHE INVESTMENTS S.à r.l., of which only EUR 11.3 million were used by

the balance sheet date.

There were no delays and defaults in the repayment of loans and the interest payments.

Moreover, there were no violations of the loan agreements.

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8.5 Interest risk

Interest rate risks are caused by the fl uctuations of interest rates on account of the situation

on the market. On the one hand, these have an impact on the amount of the future interest

expenditure within ALTA FIDES Group. On the other hand, they can infl uence the market

value of fi nancial instruments.

31/12/2008 Within 1 year > 1 year

Liabilities to banks 67,752,597 43,093,672 24,658,925

Liabilities to affi liated companies 35,014,697 23,734,426 11,280,272

Accounts payable for goods and services 4,720,552 4,720,552 -

Payments received on account 13,465,008 13,465,008 -

Other liabilities 3,700,620 3,282,711 417,909

Total fi nancial liabilities 124,653,475 88,296,370 36,357,105

EUR 31/12/2007 Within 1 year > 1 year

Liabilities to banks 63,443,805 9,061,444 54,382,360

Accounts payable for goods and services 2,651,328 2,651,328 -

Payments received on account 4,895,432 4,895,432 -

Other liabilities 5,368,780 5,205,647 163,133

Total fi nancial liabilities 76,359,345 21,813,852 54,545,493

Due dates of the fi nancial liabilities (31st December 2008)

EUR

Due dates of the fi nancial liabilities (31st December 2007)

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In this context, the aim is to minimise the risk of fl uctuating interest expenditure in the

future. Therefore, the predominant share of bank liabilities within ALTA FIDES Group is

concluded with a fi xed interest rate so that the impacts of interest rate fl uctuations can be

foreseen in the medium term. Nonetheless, there is a risk of adverse adjustments of the

conditions at the end of the lock-down period for the interest rates.

With regard to the (loan) liabilities with a variable interest rate there is the risk of changes

of the interest rate in as far as the interest rate for the loans taken out is connected to the

EURIBOR (European Interbank Offered Rate) reference interest rate. On the balance sheet

date, the actual interest rates of liabilities with a variable interest rate amounted to between

5.45 % and 8.57%.

8.6 Additional information on fi nancial instruments

Within ALTA FIDES Group, only original fi nancial instruments are used. The fi nancial

assets and liabilities can be divided into evaluation categories with the following book

values and fair values:

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In EUR IAS 39 Book value category 31/12/2008

Accounts receivable from contract production n/a 773,755Accounts receivable for sales and services LaR 3,111,502Accounts receivable from affi liated companies LaR 499,853Other short-term accounts receivable LaR 224,604Other short-term assets LaR 626,341Cash and cash equivalents n/a 2,077,902Financial assets, total 7,313,956 Liabilities to banks (long-term) FLAC 24,658,925Liabilities to banks (short-term) FLAC 43,093,672Liabilities to affi liated companies FLAC 35,014,697Accounts payable for goods and services FLAC 4,720,552Liabilities from contract production n/a 975,541Payments received on account FLAC 997,895Other liabilities FLAC 3,700,620Financial liabilities, total 113,161,903

In EUR IAS 39 Book value category 31/12/2007

Accounts receivable from contract production n/a 3,041,267Accounts receivable for sales and services LaR 5,727,790Other long-term accounts receivable LaR 1,100,465Other short-term accounts receivable LaR 559,940Other short-term accounts receivable LaR 97,365Stocks and shares (IAS 39) AfS 2,172,114Cash and cash equivalents n/a 9,295,736Financial assets, total 21,994,677 Liabilities to banks (long-term) FLAC 54,382,360Liabilities to banks (short-term) FLAC 9,061,444Accounts payable for goods and services FLAC 2,651,328Liabilities from contract production n/a 802,303Payments received on account FLAC 372,632Other liabilities FLAC 5,368,780Financial liabilities, total 72,638,848

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Continued Fair value (not Costs of costs of affecting net Not Fair value acquisition acquisition income) applicable 31/12/2008

- - - 773,755 773,755 - 3,111,502 - - 3,111,502 - 499,853 - - 499,853 - 224,604 - - 224,604 626,341 - - - 626,341 - - - 2,077,902 2,077,902 626,341 3,835,958 0 2,851,657 7,313,956 - 24,658,925 - - 24,658,925 - 43,093,672 - - 43,093,672 - 35,014,697 - - 35,014,697 - 4,720,552 - - 4,720,552 - - - 975,541 975,541 - 997,895 - - 997,895 - 3,700,620 - - 3,700,620 0 112,186,362 0 975,541 113,161,903

Continued Fair value (not Costs of costs of affecting net Not Fair value acquisition acquisition income) applicable 31/12/2007

- - - 3,041,267 3,041,267 - 5,727,790 - - 5,727,790 - 1,100,465 - - 1,100,465 - 559,940 - - 559,940 97,365 - - - 97,365 - - 2,172,114 - 2,172,114 - - - 9,295,736 9,295,736 97,365 7,388,195 2,172,114 12,337,003 21,994,677 - 54,382,360 - - 54,382,360 - 9,061,444 - - 9,061,444 - 2,651,328 - - 2,651,328 - - - 802,303 802,303 - 372,632 - - 372,632 - 5,368,780 - - 5,368,780 0 71,836,545 0 802,303 72,638,848

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The fi nancial assets available for sale are reported at the fair value and the remaining fi nan-

cial assets are reported at the continued acquisition costs. On principle, the fair values are

established with the help of approved valuation methods – if possible by using a mark-to-

market valuation. In the case of “Accounts receivable for sales and services“ and “Other

short-term accounts receivable“ it is assumed that the nominal amount minus individual value

adjustments corresponds to the fair value. In the case of the remaining short-term “Loans

and accounts receivable“, it is assumed that the book value corresponds to the fair value.

The original fi nancial instruments reported under liabilities comprise the liabilities assessed

at the continued costs of acquisition. With regard to the short-term liabilities it is assumed

that the book value corresponds to the fair value. The fair value of fi xed-rate, long-term

loans, which are largely granted for specifi c real estate properties, cannot be established

reliably since there is no active market and the current discounting rate cannot be established

objectively (e.g. on account of the credit rating of the Company, fl uctuations in the fair values

of the real estate properties to be used as security).

As during the previous year, the effective interest rate for borrowed capital amounts to less

than 6.0% p.a.

8.7 Capital management

Capital management within ALTA FIDES Group primarily aims at ensuring that the capacity

to repay debts and the fi nancial strength of the company are preserved – also with a view

to the future. In addition to this, capital management pursues the aim of establishing an

optimum mixture of borrowed capital and equity with regard to the return on equity.

Financial security is essentially measured with the help of the equity ratio as a parameter.

This parameter comprises the Group’s balance sheet total as well as the equity reported in

the consolidated balance sheet, which also forms the capital within the meaning of IAS

1 within ALTA FIDES Group. The equity ratio is used as an important parameter for the

majority shareholder, the investors, analysts and rating agencies.

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ALTA FIDES AG can control its capital structure by adjusting dividends, reducing capital

and/or issuing new shares or fi nancial instruments which are specifi ed as equity capital

according to IFRS. With regard to this, reference is made to the explanations on the

authorised and conditional capital in sections 4.16.2 and 4.16.3.

ALTA FIDES AG is subject to the minimum requirements for joint stock companies. Compliance

with these requirements is monitored continuously. The requirements were complied with

in 2008.

9.1 Notes regarding contingent liabilities and contingent assets

ALTA FIDES AG has only established joint liabilities in rem and under the law of obligations

with regard to liabilities of subsidiaries included in the scope of consolidation. Such

liabilities were not established towards third parties.

There were no essential contingent assets as of the balance sheet date.

9.2 Other fi nancial obligations

There are no other fi nancial obligations from orders issued for investment projects which

have been begun or are planned and on the basis of contractual agreements with tenants

and other contractual partners.

9. Other notes

Equity ratio parameter (in EUR)

31/12/2008 31/12/2007

Total equity 43,058,179 54,509,479

Balance sheet total for the Group 164,947,832 136,336,499

Equity ratio for the Group 26.10 % 39.98%

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The liabilities from investments in construction orders concern the construction measures

already commissioned, while liabilities from investment properties concern acquisition,

construction and expansion measures as well as repair, maintenance and improvement.

9.3 Leasing agreements

In the 2008 fi nancial year, a leasehold contract regarding a property was concluded for the fi rst

time within ALTA FIDES Group. Within the consolidated fi nancial statement of ALTA FIDES AG

(lessee) this contract is classifi ed as an operating lease and has the following structure as of 31st

December 2008:

CAMPUS 1. Verwaltung GmbH: Plot of land in Göttingen, Zimmermannstraße, term of the

lease agreement: 99 years (beginning on 1st June 1982), leasehold rent: EUR 144,829 p.a.,

ancillary costs of acquisition of the leasehold: EUR 77,091.

In addition to this, there is an operating lease from renting of business premises in Leipzig,

Schwägrichenstraße 11 and in Stuttgart with a minimum lease payment of in total EUR 49,929

for the next two years.

Moreover, there are other fi nancial obligations arising from vehicle lease contracts of in total

EUR 130,579 for the years 2009 and 2010. According to IAS 17, the vehicle lease contracts

concluded are also classifi ed as operating leases.

ALTA FIDES Group (lessor) has concluded contracts regarding letting of its investment

properties (operating leases). In the fi eld of residential real estate, there are usually leases

for an indefi nite term which can be terminated in accordance with the statutory periods of

notice, however. The leases which cannot be terminated concern commercial real estate

properties and usually have residual terms of between 1 and 5 years.

Various lease agreements contain a clause according to which the rent can be increased

annually on the basis of the respective conditions prevailing on the market. Only a few of

the contracts concluded for a fi xed term provide for a renewal option for the tenant. There

are no purchase options on the part of the tenants.

In the fi nancial year 2009 the Group will probably receive minimum lease payments (net

rent exclusive of heating) to the amount of EUR 4.8 million (based on the lease agreements

as of 31st December 2009) under the contracts which cannot be terminated and had been

concluded by the balance sheet date. An estimate regarding future minimum lease payments

for the subsequent business years does not appear appropriate on account of the possibility of

terminating lease agreements in the fi eld of residential real estate and rent indexation.

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9.4 Information provided according to art. 160 paragraph 1 fi gure 8 AktG

[German Companies Act] (Reportable shareholdings)

The announcements published according to the German Securities Trading Act had the

following contents (exact wording of the published announcements):

According to art. 21 paragraph 1 sentence 1 WpHG [German Securities Trading Act] GOETHE

INVESTMENTS S. à r. l., Luxembourg, Luxembourg, and SECHEP INVESTMENTS HOLDINGS

II S. à r. l., Luxembourg, Luxembourg, have announced the following to us:

On 13th October 2008, the share of GOETHE INVESTMENTS S. à r. l. and of SECHEP

INVESTMENTS HOLDINGS II S. à r. l. in the voting rights of ALTA FIDES Aktiengesellschaft für

Grundvermögen, Altenbergstraße 3, D-70180 Stuttgart, Germany exceeded the thresholds of 75%

and amounted to approx. 84.63% of the voting rights (5,966,343 voting rights) on that day.

According to art. 22 paragraph 1 sentence 1 fi gure 1 WpHG, a share in the voting rights of ALTA

FIDES Aktiengesellschaft für Grundvermögen to the amount of approx. 84.63% (5,966,343

voting rights) is allocated to the share in the voting rights held by SECHEP INVESTMENTS

HOLDINGS II S. à r. l.

The voting rights are assigned to SECHEP INVESTMENTS HOLDINGS II S. à r. l. via compa-

nies controlled by it whose allocated share in the voting rights amounts to 3% or more each:

GOETHE INVESTMENTS S. à r. l.

According to art. 21 paragraph 1 sentence 1 WpHG, SEB Investment GmbH, Frankfurt am

Main, Germany has informed us that it held 0.0% of the voting rights (which corresponds

to 0 voting rights) in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart on 7th

October 2008 and that it, hence, no longer reached the threshold of 3% of the voting rights

in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart.

According to art. 21 paragraph 1 sentence 1 WpHG, Zweite REO-Real Estate Opportunities

GmbH, Frankfurt am Main, Germany informed us that its share in the voting rights in ALTA

FIDES Aktiengesellschaft für Grundvermögen, Stuttgart, Germany amounted to 0.00% (which

corresponds to 0 voting rights) on 21st August 2008 and that it, hence, no longer reached

the thresholds of 10%, 5% and 3% of the voting rights in ALTA FIDES Aktiengesellschaft für

Grundvermögen, Stuttgart, Germany.

According to art. 21 paragraph 1 sentence 1 WpHG, RABANO PROPERTIES S.à.r.l., Luxem-

bourg, Luxembourg, informed us that its share in the voting rights in ALTA FIDES Aktienge-

sellschaft für Grundvermögen, Stuttgart, Germany amounted to 11.32% (which correspond to

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797,750 voting rights) on 21st August 2008 and has, hence, exceeded the thresholds of 10%,

5% and 3% of the voting rights in ALTA FIDES AG, Stuttgart, Germany.

According to art. 21 paragraph 1 sentence 1 WpHG, SEB Invest GmbH, Frankfurt am Main,

Germany has informed us that it held 3.42% of the voting rights (which correspond to 241,510

voting rights) in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart, on 18th

August 2008 and that, hence, it has exceeded the threshold of 3% of the voting rights in ALTA

FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart.

According to art. 25 paragraph 1 sentence 1 WpHG, CORESTATE German Residential Limited,

St. Peter Port, Guernsey, Great Britain, YANWORTH HOLDINGS LIMITED, Gibraltar, SECHEP

INVESTMENTS HOLDING S.à.r.l., Luxembourg, Luxembourg, as well as Zweite REO-Real

Estate Opportunities GmbH, Frankfurt am Main, Germany (the “Communicators“) have infor-

med us that they no longer directly or indirectly hold any fi nancial instruments granting them

the right to buy shares in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart,

Germany since the exercise of fi nancial instruments on 06th August 2008. This would mean

that the Communicators no longer reached the thresholds of 10% and 5% of the voting rights

in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart, Germany on 06th August

2008 and that the Communicators would each hold a share in the voting rights of 0.00%

(which corresponds to 0 voting rights).

According to art. 21 paragraph 1a WpHG, METZLER INVESTMENT GMBH, Frankfurt am

Main, Germany has informed us that it held 9.472% of the voting rights (which correspond to

667,795 voting rights) in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart, on 7th

December 2006 and that it has, hence, exceeded the thresholds of 3% and 5% of the voting

rights in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart. Of this share 9.472%

(which correspond to 667,795 voting rights) have to be allocated to METZLER INVESTMENT

GMBH via UNIVERSA Lebensversicherung a. G. and UNIVERSA Krankenversicherung a. G.

according to art. 22 paragraph 1 sentence 1 fi gure 6 [correction of the announcement of 11th

July 2008; correction of the voting rights announcement of 8th July 2008 according to art. 21

paragraph 1a WpHG].

According to art. 21 paragraph 1 WpHG, METZLER INVESTMENT GMBH, Frankfurt am Main,

Germany has informed us that it held 0.0% of the voting rights (which corresponds to 0 voting

rights) in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart on 06 August 2008 and

that it, hence, no longer reaches the threshold of 10%, 5% and 3% of the voting rights in ALTA

FIDES Aktiengesellschaft für Grundvermögen Stuttgart.

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According to art. 21 paragraph 1 WpHG, uniVersa Krankenversicherung a.G. and uniVersa

Lebensversicherung a. G., both of Nuremberg, Germany have informed us that they each

held 0.0% of the voting rights (which corresponds to 0 voting rights) in ALTA FIDES Aktienge-

sellschaft für Grundvermögen, Stuttgart, on 06th August 2008 and that they, hence, failed to

reach the thresholds of 5% and 3% of the voting rights in ALTA FIDES Aktiengesellschaft für

Grundvermögen, Stuttgart.

According to art. 21 paragraph 1 WpHG, Mr. Norbert Ketterer, Germany has informed us that

he held 0.1418% of the voting rights (which correspond to 10,000 voting rights) in ALTA FIDES

Aktiengesellschaft für Grundvermögen, Stuttgart on 06th August 2008 and that he, hence, no

longer reached the thresholds of 30%, 25%, 20%, 15%, 10%, 5% and 3% of the voting

rights in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart.

According to art. 21 paragraph 1 WpHG, Mr. Karl Ketterer, Dr. Raimund Baumann and Mr.

Gerd Eichinger, all of Germany, have informed us that they each held 0% of the voting rights

(which corresponds to 0 voting rights) in ALTA FIDES Aktiengesellschaft für Grundvermögen,

Stuttgart on 06th August 2008 and that they each no longer reach the thresholds of 5% and

3% of the voting rights in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart.

According to art. 21 paragraph 1 WpHG, Ms. Natalie Wagner, Germany has informed us

that she held 0.0% of the voting rights (which corresponds to 0 voting rights) in ALTA FIDES

Aktiengesellschaft für Grundvermögen, Stuttgart on 06th August 2008 and that she hence no

longer reaches the threshold of 3% of the voting rights in ALTA FIDES Aktiengesellschaft für

Grundvermögen, Stuttgart.

According to art. 21 paragraph 1 WpHG, CORESTATE CAPITAL AG, Zurich, Switzerland,

CORESTATE CAPITAL Beteiligungs GmbH, Frankfurt am Main, Germany and Mr. Ralph Winter,

Switzerland have each informed us that they each held 0.0% of the voting rights (which cor-

responds to 0 voting rights) in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart

on 25th July 2008 and that, hence, they no longer reached the threshold of 3% of the voting


According to art. 21 paragraph 1 WpHG, Julius Bär Holding and GAM Holding AG, both

of Zurich, Switzerland, GAM (U.K.) Ltd. and GAM International Management Ltd., both of

London, England and GAM European Small Cap Hedge Investments Inc., Road Town, British

Virgin Islands have each informed us that they each held 2.86% of the voting rights (which

correspond to 201,550 voting rights) in ALTA FIDES Aktiengesellschaft für Grundvermögen,

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Stuttgart on 30th July 2008 and that, hence, they each no longer reached the threshold of 3%

of the voting rights in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart.

According to art. 22 paragraph 1 sentence 1 fi gure 6 in conjunction with art. 22 paragraph 1

sentence 2 WpHG, the voting rights are allocated to Julius Bär Holding AG and GAM Holding

AG, both of Zurich, Switzerland and to GAM (U.K.) Ltd., London, England, each to the full extent

of 2.86% (which correspond to 201,550 voting rights). According to art. 22 paragraph 1 sen-

tence 1 fi gure 6 WpHG, the voting rights are allocated to GAM International Management Ltd.,

London, England, to the full extent of 2.86% (which corresponds to 201,550 voting rights).

Julius Bär Holding AG, Zurich, Switzerland has informed us that it retracts the voting rights

announcements regarding ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart,

Germany by GAM Sterling Management Ltd., London, England and GAM London Ltd., London,

England according to art. 21 paragraph 1a WpHG of 14th December 2006 for 7th December

2006 as well as according to art. 21 paragraph 1 WpHG of 21st September 2007 for 19th

December 2006. There were no obligations to notify with regard to these two companies

since no voting rights were allocated to these (withdrawal of voting rights announcement

according to art. 21 paragraph 1a WpHG).


CORESTATE CAPITAL Beteiligungs GmbH, Frankfurt am Main, Germany and Mr. Ralph

Winter, Switzerland have each informed us that they each held 0.0% of the voting rights


Stuttgart on 25th July 2008 and that, hence, they each no longer reached the threshold of 3%

of the voting rights in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart.

According to art. 21 paragraph 1 WpHG, SEB Investment GmbH, Frankfurt am Main, Germany

has informed us that it held 2.72% of the voting rights (which correspond to 191,510 voting

rights) in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart on 01 August 2008 and

that it, hence, no longer reached the threshold of 3% of the voting rights in ALTA FIDES Akti-

engesellschaft für Grundvermögen, Stuttgart.


St. Peter Port, Guernsey, United Kingdom, YANWORTH HOLDINGS LIMITED, Gibraltar,

SECHEP INVESTMENTS HOLDINGS II S. à r. l., Luxembourg and GOETHE INVESTMENTS S. à r. l.,

Luxembourg have informed us of the following:

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I. The share of CORESTATE German Residential Limited and YANWORTH HOLDINGS

LIMITED in ALTA FIDES Aktiengesellschaft für Grundvermögen, Altenbergstraße 3,

D-70180 Stuttgart, Deutschland exceeded each of the thresholds of 30%, 50% and 75%

on 25th July 2008 and amounted to approx. 75.48% of the voting rights (5,321,046

voting rights) on that day.

Of their share in the voting rights, CORESTATE German Residential Limited and

YANWORTH HOLDINGS LIMITED are assigned a share in the voting rights of

ALTA FIDES Aktiengesellschaft für Grundvermögen to the amount of approx. 14.18%

(1,000,000 voting rights) according to art. 22 paragraph 1 sentence 1 fi gure 1 WpHG,

a share in the voting rights to the amount of approx. 46.48% (3,276,546 voting rights)

according to art. 22 paragraph 1 sentence 1 fi gure 5 sentence 2 WpHG and a share in the

voting rights of approx. 14.82% (1,044,500 voting rights) according to art. 22 paragraph

1 sentence 1 fi gure 6 sentence 2 WpHG.

The voting rights are assigned to CORESTATE German Residential Limited through the

following companies which are controlled by it and whose allocated share in the voting

rights amounts to 3% or more each: YANWORTH HOLDINGS LIMITED, SECHEP

INVESTMENTS HOLDING II S. à r. l. and GOETHE INVESTMENTS S. à r. l.

YANWORTH HOLDINGS LIMITED is allocated the voting rights through the following

companies which are controlled by it and whose allocated share in the voting rights

amounts to 3% or more each: SECHEP INVESTMENTS HOLDING II S. à r. l. and

GOETHE INVESTMENTS S. à r. l.

CORESTATE German Residential Limited and YANWORTH HOLDINGS LIMITED are

assigned the voting rights from the shares of the following third parties whose allocated

share in the voting rights amounts to 3% or more each: Mr. Norbert Ketterer, Mr. Gerd

Eichinger, Dr. Raimund Baumann, uniVersa Krankenversicherung e.G. and uniVersa

Lebensversicherung e.G.

II. On 25th July 2008, the share of SECHEP INVESTMENTS HOLDING II S. à r. l. and of

GOETHE INVESTMENTS S. à r. l. in the voting rights in ALTA FIDES Aktiengesellschaft

für Grundvermögen, Altenbergstraße 3, D-70180 Stuttgart, Germany exceeded each of

the thresholds of 15%, 20%, 25%, 30% and 50% and amounted to approx. 64.16%

of the voting rights (4.523.296 voting rights) as of that day.

Of its share in the voting rights, SECHEP INVESTMENTS HOLDING II S. à r. l. is assigned

a share in the voting rights amounting to approx. 14.18% (1,000,000 voting rights)

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according to art. 22 paragraph 1 sentence 1 fi gure 1 WpHG, a share in the voting rights

amounting to approx. 46.48% (3,276,546 voting rights) according to art. 22 paragraph

1 sentence 1 fi gure 5 sentence 2 WpHG as well as a share in the voting rights to the

amount of 3.5% (246,750 voting rights) according to art. 22 paragraph 1 sentence 1

fi gure 6 sentence 2 WpHG.

Of its share in the voting rights, GOETHE INVESTMENTS S. à r. l. is assigned a share

in the voting rights of approx. 46.48% (3,276,546 voting rights) according to art. 22

paragraph 1 sentence 1 fi gure 5 WpHG and a share in the voting rights of approx. 3.5%

(246,750 voting rights) according to art. 22 paragraph 1 sentence 1 fi gure 6 WpHG.

SECHEP INVESTMENTS HOLDING II S. à r. l. is allocated the voting rights through the

following companies which are controlled by it and whose share in the voting rights

amounts to 3% or more each: GOETHE INVESTMENTS S. à r. l.

SECHEP INVESTMENTS HOLDING II S. à r. l. and GOETHE INVESTMENTS S. à r. l. are

assigned the voting rights from the shares of the following third parties, whose allocated




On 11th July 2008 METZLER Investment GmbH, Frankfurt am Main, Germany informed us

according to art. 21 paragraph 1a WpHG that its share in the voting rights in ALTA FIDES AG

für Grundvermögen amounted to 9.472% (which correspond to 667,795 voting rights) on

08th December 2006.

On 08th July 2008, METZLER Investment GmbH, Frankfurt am Main, Germany informed us

that its share in the voting rights in ALTA FIDES AG für Grundvermögen exceeded the threshold

of 10% on 27th June 2008 and corresponded to 10.00065% (which correspond to 705,046

voting rights) on that day. Of this 10.00065% (which correspond to 705,046 voting rights)

have to be allocated to METZLER Investment GmbH, Frankfurt am Main, Germany via Universa

Krankenversicherung a. G., Nuremberg, Germany and Universa Lebensversicherung a. G.,

Nuremberg, Germany according to art. 22 paragraph 1 sentence 1 fi gure 6 WpHG.

According to art. 21 paragraph 1 sentence 1 WpHG, SECHEP INVESTMENTS HOLDING S.à r.l.,

Luxembourg, Luxembourg, SECHEP INVESTMENTS HOLDING II S.à r.l., Luxembourg, Lux-

embourg, Zweite REO-Real Estate Opportunities GmbH, Frankfurt am Main, Germany and

GOETHE INVESTMENTS S.à r.l., Luxembourg, Luxembourg have informed us of the following:

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I. The share of SECHEP INVESTMENTS HOLDING S.à r.l. and of Zweite REO-Real Estate

Opportunities GmbH in ALTA FIDES AG Aktiengesellschaft für Grundvermögen no longer

reached the thresholds of 25%, 20% and 15% each on 27th June 2008 and amounted to

11.32% (which correspond to 797,750 voting rights) on that day. Of this 11.32% (which

correspond to 797,750 voting rights) have to be assigned to SECHEP INVESTMENTS

HOLDING S.à r.l. according to art. 22 paragraph 1 sentence 1 fi gure 6, sentence 2 WpHG

and to Zweite REO-Real Estate Opportunities GmbH through Mr. Norbert Ketterer,

Germany according to art. 22 paragraph 1 sentence 1 fi gure 6 WpHG.

II. The share of SECHEP INVESTMENTS HOLDING II S.à r.l. and of GOETHE INVESTMENTS

S.à r.l. in the voting rights of ALTA FIDES AG Aktiengesellschaft für Grundvermögen ex-

ceeded each of the thresholds of 3%, 5% and 10% on 27th June 2008 and amounted to

14.18% (which correspond to 1,000,000 voting rights) on that day. Of this 14.18% (which

correspond to 1,000,000 voting rights) have to be assigned to SECHEP INVESTMENTS

HOLDING II S.à r.l. according to art. 22 paragraph 1 sentence 1 fi gure 1 WpHG through

ALTA FIDES Aktiengesellschaft für Grundvermögen. SECHEP INVESTMENTS HOLDING

II S.à r.l. is assigned the voting rights via the following companies which it controls and

whose share in the voting rights amounts to 3% or more: GOETHE INVESTMENTS S.à r.l.

According to art. 21 paragraph 1 WpHG, Universa Krankenversicherung a. G., Nuremberg,

Germany has informed us that its share in the voting rights in ALTA FIDES AG Aktienge-

sellschaft für Grundvermögen exceeded the threshold of 5% on 26th June 2008 and that it

amounted to 5.0002% (which correspond to 352,513 voting rights) on that day.

According to art. 21 paragraph 1 WpHG, Universa Lebensversicherung a. G., Nuremberg,

Germany has informed us that its share in the voting rights in ALTA FIDES AG Aktiengesellschaft

für Grundvermögen exceeded the threshold of 5% on 26th June 2008 and that it amounted

to 5.0005% (which correspond to 352,533 voting rights) on that day.

According to art. 21 paragraph 1 WpHG, SEB Invest GmbH, Frankfurt am Main, Germany

informed us that it held 3.79% of the voting rights (which correspond to 267,010 voting rights)

in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart on 30th August 2007 and

that it, hence, exceeded the level of 3% of the voting rights in ALTA FIDES AG Aktiengesell-

schaft für Grundvermögen, Stuttgart.

In this context, the fi nancial instruments which it holds indirectly are held by the following

companies which it controls: YANWORTH HOLDINGS LIMITED, Gibraltar, SECHEP

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INVESTMENTS HOLDINGS S. à r. l., Luxembourg and Zweite REO-Real Estate Opportunities

GmbH, Frankfurt am Main, Germany.

YANWORTH HOLDINGS LIMITED, Gibraltar, has informed us that it still held fi nancial instru-

ments granting it the right to acquire shares in ALTA FIDES AG Aktiengesellschaft für Grund-

vermögen, Stuttgart accounting for 11.32% of the voting rights (797,750 voting rights) on 15th

January 2008. On account of the exercise of fi nancial instruments, however, it did not reach

the thresholds of 25%, 20% and 15% of the voting rights in ALTA FIDES AG Aktiengesellschaft

für Grundvermögen, Stuttgart with regard to the fi nancial instruments on that day.

The fi nancial instruments which it still holds indirectly have the following exercise period: 21st

December 2007 until 31st December 2009.


companies which it controls: SECHEP INVESTMENTS HOLDINGS S. à r. l., Luxembourg and

Zweite REO-Real Estate Opportunities GmbH, Frankfurt am Main, Germany.

SECHEP INVESTMENTS HOLDINGS S. à r. l., Luxembourg , has informed us that it still held

fi nancial instruments granting it the right to acquire shares in ALTA FIDES AG Aktiengesellschaft

für Grundvermögen, Stuttgart accounting for 11.32% of the voting rights (797,750 voting rights)

on 15th January 2008. On account of the exercise of fi nancial instruments, however, it did not

reach the thresholds of 25%, 20% and 15% of the voting rights in ALTA FIDES AG Aktien-

gesellschaft für Grundvermögen, Stuttgart with regard to the fi nancial instruments on that day.




companies which it controls: Zweite REO- Real Estate Opportunities GmbH, Frankfurt am

Main, Germany.

Zweite REO-Real Estate Opportunities GmbH, Frankfurt am Main, Germany has informed us

that it still held fi nancial instruments granting it the right to acquire shares in ALTA FIDES AG

Aktiengesellschaft für Grundvermögen, Stuttgart accounting for 11.32% of the voting rights

(797,750 voting rights) on 15th January 2008. On account of the exercise of fi nancial instru-

ments, however, it did not reach the thresholds of 25%, 20% and 15% of the voting rights in

ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart with regard to the fi nancial

instruments on that day.



CORESTATE German Residential Limited, St. Peter Port, Guernsey, Great Britain has informed

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us according to art. 25 paragraph1 WpHG that it indirectly held fi nancial instruments granting

the right to acquire shares in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart

accounting for 25.50% of the voting rights (1,797,750 voting rights) on 21st December 2007. On

that day, the company would have exceeded the thresholds of 5%, 10%, 15%, 20%, 25% of

the voting rights in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart.

The exercise period for a part of the fi nancial instruments granting the right to acquire 11.32% of

the voting rights (797,750 voting rights) in ALTA FIDES AG Aktiengesellschaft für Grundvermögen,

Stuttgart, comprises the following period: 21st December 2007 until 31st December 2009.

The due date for a part of the fi nancial instruments granting the right to acquire 14.18% of the

voting rights (1,000,000 voting rights) in ALTA FIDES AG Aktiengesellschaft für Grundver-

mögen, Stuttgart, is the 15th of January 2008.

In this context, the fi nancial instruments held by the company are held via the following compa-

nies which it controls: YANWORTH HOLDINGS LIMITED, Gibraltar, SECHEP INVESTMENTS

HOLDING S. à r. l., Luxembourg, Zweite REO Real Estate Opportunities GmbH, Frankfurt am

Main, Germany.

According to art. 25 paragraph 1 sentence 1 WpHG, YANWORTH HOLDINGS LIMITED,

Gibraltar, has informed us that it indirectly held fi nancial instruments granting the right to

acquire shares in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart accounting

for 25.50% of the voting rights (1,797,750 voting rights) on 21st December 2007. On that

day, the company would have exceeded the thresholds of 5%, 10%, 15%, 20%, 25% of the

voting rights in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart on account of

the fi nancial instruments.


the voting rights (797,750 voting rights) in ALTA FIDES AG Aktiengesellschaft für Grundvermö-

gen, Stuttgart, comprises the following period: 21st December 2007 until 31st December 2009.


voting rights (1,000,000 voting rights) in ALTA FIDES AG Aktiengesellschaft für Grundvermögen,

Stuttgart, is the 15th of January 2008.

In this context, the fi nancial instruments held by the company are held via the following

companies which it controls: SECHEP INVESTMENTS HOLDING S. à r. l., Luxembourg, Zweite

REO-Real Estate Opportunities GmbH, Frankfurt am Main, Germany.

According to art. 25 paragraph 1 sentence 1 WpHG, SECHEP INVESTMENTS HOLDINGS

S. à r. l., Luxembourg, has informed us that it indirectly held fi nancial instruments granting it


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accounting for 25.50% of the voting rights (1,797,750 voting rights) on 21st December 2007.

On that day, the company would have exceeded the thresholds of 5%, 10%, 15%, 20%,

25% of the voting rights in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart

on account of the fi nancial instruments.





voting rights (1,000,000 voting rights) in ALTA FIDES AG Aktiengesellschaft für Grundvermö-

gen, Stuttgart, is the 15th of January 2008.


companies which it controls: Zweite REO Real Estate Opportunities GmbH, Frankfurt am

Main, Germany.


GmbH, Frankfurt am Main, Germany, has informed us that it indirectly held fi nancial instru-

ments granting the right to acquire shares in ALTA FIDES AG Aktiengesellschaft für Grundver-

mögen, Stuttgart accounting for 25.50% of the voting rights (1,797,750 voting rights) on 21st

December 2007. On that day, the company would have exceeded the thresholds of 5%, 10%,

15%, 20%, 25% of the voting rights in ALTA FIDES AG Aktiengesellschaft für Grundvermögen,

Stuttgart on account of the fi nancial instruments.








St. Peter Port, Guernsey, Great Britain, SECHEP INVESTMENTS HOLDING S.à r.l., Luxembourg,

Zweite REO Real Estate Opportunities GmbH, Frankfurt am Main, Germany and Yanworth

Holdings Limited, Gibraltar have informed us that their share in the voting rights in ALTA FIDES

AG Aktiengesellschaft für Grundvermögen exceeded each of the thresholds of 3%, 5%, 10%,

15%, 20% and 25% on 21st December 2007 and amounted to 25.50% (which correspond

to 1,797,750 voting rights) each on that day.

Of this 14.18% of the voting rights (which correspond to 1,000,000 voting rights) have to

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be assigned to CORESTATE German Residential Limited, SECHEP INVESTMENTS HOLDING

S.à r.l., Luxembourg, and Yanworth Holdings Limited, Gibraltar according to art. 22 paragraph

1 sentence 1 fi gure 5 in conjunction with sentence 2 WpHG and to Zweite REO Real Estate

Opportunities GmbH, Frankfurt am Main, Germany through Mr. Norbert Ketterer, Germany

according to art. 22 paragraph 1 sentence 1 fi gure 5 WpHG.

A further 11.32% of the voting rights (which correspond to 797,750 voting rights) have to


S. à r. l., Luxembourg and Yanworth Holdings Limited, Gibraltar, according to art. 22 paragraph


Opportunities GmbH, Frankfurt am Main through Mr. Norbert Ketterer, Germany according

to art. 22 paragraph 1 sentence 1 fi gure 6 WpHG.

According to art. 21 paragraph 1 WpHG, CORESTATE Capital AG, Zurich, Switzerland,

Corestate Capital Beteiligungs GmbH, Frankfurt am Main, Germany and Mr. Ralph Winter,

Appenzell, Switzerland have informed us that their share in the voting rights in ALTA FIDES AG

Aktiengesellschaft für Grundvermögen each exceeded the threshold of 3% and that said share

amounted to 3.50% (which correspond to 246,750 voting rights) on that day. Of this 3.50%

(246,750 voting rights) each have to be assigned to CORESTATE Capital AG, Zurich, Switzer-

land and Mr. Ralph Winter, Appenzell, Switzerland according to art. 22 paragraph 2 sentence

1 fi gure 6 in conjunction with sentence 2 WpHG and to Corestate Capital Beteiligungs GmbH,

Frankfurt am Main, Germany, through Mr. Norbert Ketterer, Germany according to art. 22

paragraph 1 sentence 1 fi gure 6 WpHG.

9.5 Members of the Management Board and their Compensations

Jan Giessler, Managing Partner of ConLead GmbH, was appointed a member of the Manage-

ment Board of Alta Fides AG with effect from 16th October 2008. He succeeded Norbert

Ketterer, Christian Dunkelberg and Rainer Fuchs, who left the Management Board of the

Company in accordance with the Supervisory Board with effect from 15th October 2008

and 30th November 2008. Jan Giessler boasts more than 16 years of professional experience

focussing on strategy and corporate fi nance in various industries. Previously, he worked in the

real estate industry for many years and implemented growth strategies especially for private

equity companies in his capacity as an interim manager.

Furthermore, Rudolf Bartsch was appointed a member of the Management Board of ALTA

FIDES AG with effect from 16th February 2009. In future, he will work on the Management

Board together with Jan Giessler and be in charge of the fi elds of project development, the

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acquisition of properties and existing properties as well as of strategic and operational asset

management.

During the 2008 fi nancial year, the total compensation of the members of the Management

Board amounted to EUR 480,000. The compensation of the Management Board had the fol-

lowing detailed structure:

Mr. Norbert Ketterer was a member of the management board of the subsidiary CAMPUS

REAL ESTATE AG and a member of the supervisory board of PROFECTO AG.

Mr. Christian Dunkelberg was a member of the management board of the subsidiary

CAMPUS REAL ESTATE AG.

Mr. Rainer Fuchs held a subscription right for shares in the Company, which was not

exercised, however (cf. section 9.6).

Furthermore, Mr. Jan W. Giessler is a member of the management board of the subsidiary

CAMPUS REAL ESTATE AG and PROFECTO AG.

As of 31st December 2008 there were no advance payments and loans to members of the

Management Board.

Fringe benefi ts or components with long-termMember of the Fixed Variable Total Pension incentivising Management Board compensation compensation compensation commitments effect

Nobert Ketterer, until 190,000 0 190,000 0 015th October 2008 (230,000) (0) (230,000) (0) (0)

Christian Dunkelberg, 180,000 0 180,000 0 0until 15th October 2008 (102,000) (0) (102,000) (0) (0)

Rainer Fuchs, until 110,000 0 110,000 0 030th November 2008 (126,000) (0) (126,000) (0) (0)

Jan W. Giessler, from 0 0 0 0 016th October 2008

in EUR

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

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With regard to further explanations on the compensation of the members of the Management

Board reference is made to the compensation report contained in the Summary of the

Management Report (section 5).

9.6 Share-based compensation

The former Chief Financial Offi cer Rainer Fuchs was granted a subscription right regarding

5% of the total of all shares in ALTA FIDES AG, which were offered for trading upon fl oata-

tion, on 22nd June 2006. This subscription right is based on the following cornerstones:

– Grant date: 22nd June 2006

– Vesting period: 22nd June 2006 until 31st December 2008, i.e. 30 months

– Exercise period: from 1st January 2009 for as long as Mr. Fuchs is a member of the

Management Board of ALTA FIDES AG and provided the share price amounts to > 120%

of the issue price.

Accordingly, the exercise price amounts to EUR 20.40 per share, the subscription price is

EUR 17.00 per share (price upon fl oatation). The subscription quantity comprises 100,000

shares in ALTA FIDES AG.

The subscription right expires upon the termination of the employment contract concluded

with Mr. Fuchs.

If the subscription right is exercised, ALTA FIDES AG is entitled either to sell the shares at the

subscription price or to redeem this right through a redemption payment, which is estab-

lished on the basis of the difference between the subscription price and the exercise price at

the time at which the subscription right is exercised multiplied by the quantity subscribed.

According to IFRS 2.41, the possibility of compensation through equity instruments does not

have any commercial effect since own shares were not held and conditional capital had not

been approved for share option schemes. As a result of this, the provisions regarding share-

based compensation transactions with cash settlement are applied.

The obligation was evaluated on the basis of the following assumptions: The option is a

European option and expires on 31st December 2008. Implicit volatilities are not available

for the evaluations so that a volatility of 28% was used as of 31st December 2007 (on the

basis of the DAX volatility of approx. 20% at that time). A time series of 15 days is available

for the evaluation as of 31st December 2006. On this basis, volatility was estimated to

amount to 10%.

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On the dates specifi ed below, the obligation had the following value:

31/12/2006: 100,000 shares x EUR 0.74 per share x 6/30 months = EUR 14,800.00

31/12/2007: 100,000 shares x EUR 2.70 per share x 18/30 months = EUR 162,000.00

31/12/2008: EUR 0, since the employment contract regarding work on the Management

Board was terminated in October 2008 with effect from 30th November 2008.

9.7 Members of Supervisory Board and their emoluments

During the past fi nancial year 2008, the Supervisory Board had the following members:

Daniel Schoch, graduate in business administration, since 21st October 2008 (chairman

since 23rd October 2008)

Mr. Schoch is a member of the management board of CORESTATE CAPITAL AG, Zug,

Switzerland. Moreover, Mr. Schoch is a member of the following supervisory boards which

have to be established according to the applicable law or of comparable national or inter-

national controlling boards of commercial enterprises:

– Roth & Rau Aktiengesellschaft, Hohenstein-Ernstthal

– PROFECTO AG, Stuttgart

– CAMPUS REAL ESTATE AG, Stuttgart

Matthias Sprenker, managing director of SECHEP INVESTMENTS HOLDING S.à r.l.,

Luxembourg, since 19th December 2008

Mr. Schenker is a member of the following supervisory boards which have to be estab-

lished according to the applicable law or of comparable national or international controlling

boards of commercial enterprises:



Martin Hitzer, lawyer, since 19th December 2008

Mr. Hitzer is a member of the following supervisory boards which have to be established

according to the applicable law or of comparable national or international controlling boards

of commercial enterprises:


– Fette GmbH, Schwarzenbek

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Prof. Dr. Willi Alda, merchant, chairman, until 20th October 2008

Mr. Alda is a member of the following supervisory boards which have to be established



– Chairman of the advisory board of the German Property Database (International

Property Data Bank)

– Member of the board of trustees and advisory board of the foundation “Die lebendige

Stadt“

– Chairman of the Supervisory Board of Trustees of the Urban Land Institute

Natalie Wagner, merchant, deputy chairperson, until 19th December 2008

Karl-Georg Wentz, merchant, until 19th December 2008

Subject to the precondition that the general meeting of ALTA FIDES AG approves the

emoluments for the members of the Supervisory Board to the amount outlined below, the

total emoluments for the Supervisory Board for the fi nancial year 2008 amount to in total

EUR 50,000. In this context, the emoluments for the Supervisory Board have the following

detailed structure:

Member of the Supervisory Board Fixed remuneration per annum (in EUR)

Prof. Dr. Willi Alda, until 20th October 2008 10,000

(previous year: 10,000)

Nathalie Wagner, until 19th December 2008 10,000


Karl-Georg Wentz, until 19th December 2008 10,000


Daniel Schoch, from 16th October 2008 20,000

Matthias Sprenker, from 19th December 2008 0

Martin Hitzer, from 19th December 2008 0

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Prof. Dr. Willi Alda receives annual emoluments to the amount of EUR 10,000 and a refund

of expenses for his activity as a member of the supervisory board of PROFECTO AG, a sub-

sidiary of ALTA FIDES AG. Mr. Norbert Ketterer does not receive any separate remuneration

for his work as the chairman of the supervisory board of PROFECTO AG.


supervisory board.

With regard to further explanations on the emoluments for the Supervisory Board reference

is made to the compensation report contained in the Summary of the Management Report

(chapter 5).

9.8 Relations with persons and companies related to the Company

In addition to ALTA FIDES AG and its subsidiaries, the persons and companies related to the

Group also include the highest parent company CORESTATE German Residential Limited,

St. Peter Port, Guernsey. As a result of this, all affi liated companies of CORESTATE German

Residential Limited are also affi liated companies of ALTA FIDES AG and related companies

at the same time. The asset manager and initiator of the closed property fund CORESTATE

German Residential Limited, CORESTATE CAPITAL AG as well as its affi liated companies

are also considered related companies.

Furthermore, the related persons and companies include the members of the Man-

agement Board and the Supervisory Board as well as members of the boards of subsidiaries,

each including close relatives, as well as those companies on which the members of the

Management Board or the Supervisory Board of the Company and/or their close relatives

can exercise decisive infl uence or in which they hold a major share in the voting rights.

Moreover, the related persons include those companies with which ALTA FIDES AG forms

a corporate group or in which it holds a share enabling it to exercise decisive infl uence on

the business policy of the associate company and the main shareholders in ALTA FIDES AG,

including their affi liated companies.

During the 2008 fi nancial year the following real estate transactions were concluded with

related companies and persons.

In addition, the following service relationships existed between affi liated companies and/or

related companies and persons:

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a. Service relationships with affi liated companies

With a contract of 25th November 2008 GOETHE INVESTMENTS S.à r.l. granted ALTA

FIDES AG an unsecured credit line to the amount of EUR 30 million until 31st December

2010. The credit line can be used in the framework of the current liquidity plan specifi cally

for interim fi nancing of project developments, for fi nancing of existing properties and for

one-off expenses in the context of restructuring of ALTA FIDES AG. The loans granted by

GOETHE INVESTMENTS S.à r.l. (EUR 7.8 million) with effect as of 25th November 2008

were taken into account with regard to the credit line. The interest rate amounts to 9.0%

p.a. As of 31st December 2008, a total of EUR 11,280,272 of said credit line was used. This

resulted in interest expenditure of EUR 113,760 in the 2008 fi nancial year.

Seller Buyer Project Location Price (EUR)

REO-Real Estate Opportunities CAMPUS Student Göttingen Purchase of existing 4,350,000GmbH 1. Verwaltung GmbH real estate property Roslyn Properties S.à r.l. CAMPUS Student Berlin Purchase of existing 9,100,000 1. Verwaltung GmbH real estate property

Wallace Properties S.à r.l. CAMPUS Student Jena Purchase of existing 9,550,000 1. Verwaltung GmbH real estate property

AF Schlossresidenz GmbH Mr. Norbert Ketterer Project Brandis Sales price for 1,013,579 development 6 apartments

AF Schlossresidenz GmbH Mr. Norbert Ketterer Project Brandis Commission fee 202,716 development for six apartments

AF Schlossresidenz GmbH Mr. Gerd Eichinger Project Brandis Sales price for 405,014 development 3 apartments

AF Schlossgut GmbH Mr. Norbert Ketterer Project Mark- Sales price for 1,521,196 development kleeberg 5 gate houses

Total 26,142,505

Real estate purchase agreements/ commission fees established with related companies and persons

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b. Compensation for services and other fi nancial transactions with related persons

Jan W. Giessler/ConLead GmbH

Mr. Jan Giessler is Managing Partner of ConLead GmbH, Cologne, a specialised consulting

fi rm for fi nancial investors, banks and medium-sized companies. ConLead GmbH seconds

Mr. Giessler to ALTA FIDES AG as a “temporary manager“ so that he can assume the posi-

tion of a member of the Management Board of ALTA FIDES AG. The terms and conditions

of this secondment were laid down in more detail in the contract by and between ConLead

GmbH and ALTA FIDES AG of 11th December 2008. According to said contract, the monthly

fee comprises a lump sum of EUR 50,000 plus sales tax for a regular working time of

5 days per week. Additional work is considered settled with the fee. If Mr. Giessler’s de facto

working time is lower than the regular working time agreed on, settlement shall be effected

pro rata temporis. Out-of-pocket expenses and travelling costs incurred by Mr. Giessler are

settled through a lump sum to the amount of 15% on the fee. The contract of secondment

commenced retroactively as of 16th October and will expire automatically on 15th October

2009. During the 2008 fi nancial year ConLead GmbH also provided consultancy services

for ALTA FIDES AG in addition to Mr. Giessler’s secondment. The compensation for all

services rendered amounted to EUR 762,870 gross.

Rudolf J. Bartsch

Mr. Bartsch was a member of the executive board of REC24 Immobilien GmbH, Leipzig, a

company focussing on the reconstruction of historic buildings and infi ll construction within

the area of the city of Leipzig. Currently, Ms. Elke Bartsch is the managing director of the

company. During the fi nancial year 2008, REC24 Immobilien GmbH provided services

totalling EUR 95,200 for ALTA FIDES Group.

Norbert Ketterer

ALTA FIDES AG purchased 100,000 shares (2.0%) in CAMPUS REAL ESTATE AG from Mr.

Ketterer at a purchase price of EUR 25,000 on the basis of a purchase agreement of 17th

December 2008.

With regard to the various sales of shares by Mr. Norbert Ketterer to GOETHE INVESTMENTS

S.à r.l. or its affi liated companies reference is made to the announcements according to

art. 160 paragraph 1 fi gure 8 AktG [German Companies Act] (Reportable Shareholdings).

As of the balance sheet date, Mr. Ketterer still held a share in the shares of ALTA FIDES AG

amounting to 0.14% (previous year: 46.56%).

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On 25th July 2008 Mr. Karl Ketterer (close relative of Mr. Norbert Ketterer) sold 70,350

shares (1.00% share in the registered capital) in ALTA FIDES AG to GOETHE INVESTMENTS

S.à r.l. at a price of EUR 15.00 per share.

Christian Dunkelberg

Mr. Dunkelberg held 500,000 shares (10.0%) in CAMPUS REAL ESTATE AG. The registered

capital of CAMPUS REAL ESTATE AG amounts to EUR 5,000,000, 25% of which have been

paid in. Mr. Dunkelberg sold 345,000 shares (6.9%) to ALTA FIDES AG (purchase price EUR

252,893) and 155,000 shares to AF ATHENA GmbH & Co. KG (purchase price EUR 113,619)

on the basis of contracts of sale of 31st October 2008. Equitable property was transferred

upon the payment of the purchase prices on 31st October 2008.

Gerd Eichinger

During the year under review, Mr. Gerd Eichinger held shares of 6.0% in IVB-HGH GbR

and 5.77% in IVB Immobilien Vermittlung und Beratung GmbH.

For his work on the supervisory board of CAMPUS REAL ESTATE AG in 2008 and 2007

(supplements) a total of EUR 20,180 was reported in the balance sheet for the fi nancial year

2008.

On 25th July 2008 Mr. Eichinger sold 505,000 shares (share in the registered capital of

7.16%) in ALTA FIDES AG to GOETHE INVESTMENTS S.à r.l. at a price of EUR 15.00 per

share.

Dr. Raimund Baumann

Until the end of 20th October 2008, Dr. Raimund Baumann was a deputy member of the

Supervisory Board of ALTA FIDES AG. Until 20th October 2008, a leasing vehicle was

provided to Dr. Baumann by ALTA FIDES AG. In the fi nancial year 2008, the leasing

payments and ancillary expenses paid by ALTA FIDES AG totalled EUR 13,567 (previous

year: EUR 14,554).

Furthermore, Dr. Baumann was also a shareholder in ALTA FIDES AG. On 25th July 2008

Dr. Baumann sold 505,000 shares (share in the registered capital of 7.16%) in ALTA FIDES

AG to GOETHE INVESTMENTS S.à r.l. at a price of EUR 15.00 per share.

Dr. Baumann is a partner in the consulting fi rm Dr. Baumann Böltz Wacker & Baur Steuer-

berater Rechtsanwälte Wirtschaftsprüfer, Stuttgart and Ellwangen. The fi rm has provided

services for ALTA FIDES AG and its subsidiaries in connection with the preparation of

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annual fi nancial statements, tax consultancy and consulting services in connection with

legal questions for several years. During the fi nancial year 2008 the fee for these services

amounted to approximately EUR 0.5 million.

Prof. Dr. Willi Alda

Prof. Dr. Alda received a credit of EUR 142,800 gross for the consultancy services provided

to ALTA FIDES AG on 2nd October 2008.

Natalie Wagner

On 25th July 2008 Ms. Wagner sold 52,500 shares (share in the registered capital of 0.74%)

in ALTA FIDES AG to GOETHE INVESTMENTS S.à r.l. at a price of EUR 15.00 per share.

9.9 Final audit fee according to art. 314 paragraph 1 fi gure 9 HGB

[German Commercial Code]

In 2008, the expenses for the fi nal audits by KPMG AG Wirtschaftsprüfungsgesellschaft

(previous year: dr. plöger corporate Revision GmbH Wirtschaftsprüfungsgesellschaft, Leip-

zig) amounted to EUR 221,340 gross (previous year: EUR 148,000).

In addition, other services within the meaning of art. 314 paragraph 1 fi gure 9d HGB

[German Commercial Code] to the amount of EUR 98,517 gross (previous year: EUR 94,531)

were provided by the fi nal auditor.

9.10 Important events after the balance sheet date

Until completion of the consolidated fi nancial statements there have been no important

events which had a decisive infl uence on the asset, fi nancial and profi t situation.

With regard to events of special importance after the end of the fi nancial year 2008 ref-

erence is made to the Summary of the Management Report (chapter 8 “Events after the

balance sheet date“).

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9.11 Consolidated fi nancial statement

ALTA FIDES Group is included in the consolidated fi nancial statement of the highest

parent company CORESTATE German Residential Limited, St. Peter Port, Guernsey as of

31st December 2008 which has to be prepared in accordance with the legal provisions of

Guernsey (Great Britain). Said consolidated fi nancial statement is prepared according to the

International Financial Reporting Standards.

9.12 Publication

The annual fi nancial statement of ALTA FIDES AG as of 31st December 2008, which was

audited by KPMG AG Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, and the consol-

idated fi nancial statement of ALTA FIDES AG as of 31st December 2008 are published in the

German Electronic Federal Gazette.

9.13 Declaration according to art. 161 AktG [Companies Act]

In April 2008, the Management Board and the Supervisory Board of ALTA FIDES Aktienge-

sellschaft für Grundvermögen jointly issued the declaration of compliance according to art.

161 AktG regarding the recommendations by the German Corporate Governance Codex in

the version of 14th June 2007, which will probably be re-issued in April 2009. The form and

contents of the declarations of compliance are permanently accessible for the shareholders

on the Company’s website (www.altafi des.de/sites/ir_corpgov.html).




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Year Renting and Trading Project Real Estate Development

Sales revenue 2008 7,019,326 10,646,570

2007 23,904,036 4,543,907

Change in inventories 2008 710,597 3,042,923

2007 (2,304,432) (7,349,248)

Change in market value 2008 911,489 -

of the investment properties 2007 10,027,870 -

Other operating income 2008 651,440 55,508

2007 759,268 64,755

EBITDA 2008 4,551,370 (937,649)

2007 11,202,577 (527,416)

Depreciations 2008 (5,206,584) (390,972)

2007 (51,478) -

EBIT 2008 (655,214) (1,328,621)

2007 11,151,099 (527,416)

Financial result 2008 (3,437,559) (122,811)

2007 (1,656,680) (137,525)

Profi t tax 2008 (71,977) 193,568

2007 (1,646,842) 91,252

Consolidated annual net profi t 2008 (4,164,749) (1,257,863)

2007 7,847,576 (573,689)

Segment assets 2008 150,002,977 20,968,139

2007 99,882,348 29,232,307

Segment liabilities 2008 104,901,885 20,842,192

2007 78,770,065 21,995,024

Segment investment 2008 3,083,901 -

2007 18,089,623 -

Segment reporting (according to IAS 14) in EUR

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Non Performing Youniq – Corporate Consolidation Total Loans Student Living

- 1,152,088 - (22,200) 18,795,785

237,500 2,218,594 - - 30,904,037

- 8,956,788 - - 12,710,309

- 2,272,661 - - (7,381,018)

- 3,162,147 - - 4,073,636

- - - - 10,027,870

17,091 906,662 339,885 (1,427,068) 543,519

12,141 - 1,628 - 837,792

(463,479) 3,800,659 (6,395,106) - 555,795

(336,963) (460,877) (390,274) - 9,487,048

(260) (900,841) (37,114) - (6,535,770)

(338) - - - (51,816)

(463,739) 2,899,818 (6,432,220) - (5,979,975)

(337,300) (460,877) (390,274) - 9,435,232

(40) (1,276,952) 521,636 - (4,315,726)

26,884 (19,147) 292 - (1,786,175)

- (973,006) 988 - (850,427)

- (19) 31,700 - (1,523,908)

(463,779) 649,859 (5,909,596) - (11,146,128)

(310,416) (480,042) (358,281) - 6,125,149

736,645 56,066,650 2,330,650 (65,157,230) 164,947,832

767,889 8,052,115 39,216,915 (40,815,075) 136,336,499

49,194 54,346,021 2,037,725 (60,287,365) 121,889,653

109,719 7,363,764 7,306,766 (33,718,318) 81,827,020

- 23,318,464 53,438 - 26,455,803

- - 52,823 - 18,142,446

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We have audited the consolidated fi nancial statement prepared by ALTA FIDES Aktiengesell-

schaft für Grundvermögen consisting of the balance sheet, the profi t and loss account, the

statement of changes in equity, the cash fl ow statement and the notes to the consolidated

fi nancial statement and the management report on the situation of the Company and the

Group for the fi nancial year from 1st January to 31st December 2008. The preparation of the

consolidated fi nancial statement and the consolidated management report in accordance with

the International Financial Reporting Standards (IFRS), as adopted by the EU, and the addi-

tional requirements of German commercial law pursuant to Article 315a paragraph 1 of the

German Commercial Code (HGB) and the supplementary provisions of the Articles of Asso-

ciation lie within the responsibility of the legal representatives of the Company. It is our task to

express an opinion on the consolidated fi nancial statement and the consolidated management

report on the basis of the audit carried out by us.

We conducted our audit of the consolidated fi nancial statement in accordance with art. 317

HGB and the generally accepted German auditing standards established by the Institute of

Public Auditors in Germany (IDW). According to those standards, the audit has to be planned

and executed in such a manner that inaccuracies and violations materially affecting the

presentation of the asset, fi nancial and profi t situation to be conveyed by the consolidated

fi nancial statement in compliance with the accounting standards to be used and by the consol-

idated management report are discerned with suffi cient certainty. Knowledge of the business

activities and the economic and legal environment of the Group as well as expectations as

to possible misstatements are taken into account in the determination of audit procedures.

The effectiveness of the accounting-related internal control system and the evidence support-

ing the disclosures in the consolidated fi nancial statement and the consolidated management

report are primarily examined on the basis of random tests within the framework of the audit.

The audit comprises the assessment of the annual fi nancial statements of those entities

included in the consolidated fi nancial statement, the determination of the scope of consol-

idation, the accounting and consolidation principles applied and the essential estimates by the

legal representatives as well as an evaluation of the overall presentation of the consolidated

fi nancial statement and the consolidated management report. We believe that our audit

provides a suffi ciently reliable basis for our opinion.

Our audit has not given rise to any objections.

Auditor’s report

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In our opinion based on the fi ndings of our audit, the consolidated fi nancial statement

complies with the IFRS, as adopted by the EU, and the additional requirements according to

art. 315a paragraph 1 HGB and the supplementary provisions of the Articles of Association

and conveys a true and fair view of the asset, fi nancial and profi t situation of the Group in

line with the actual situation in accordance with these requirements. The consolidated man-

agement report is consistent with the consolidated fi nancial statement and, as a whole, provides

an adequate view of the Group’s situation and appropriately presents the opportunities and

risks entailed in the future development of the Group.

Frankfurt am Main, 27th April 2009

KPMG AG Wirtschaftsprüfungsgesellschaft

(formerly: KPMG Deutsche Treuhand-Gesellschaft

Aktiengesellschaft Wirtschaftsprüfungsgesellschaft)

Dr. Lemnitzer Steinborn

Auditor Auditor

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responsibility statement

The Management Board of ALTA FIDES Aktiengesellschaft für Grundvermögen is responsible

for the preparation, completeness and correctness of the consolidated fi nancial statement

and the consolidated management report as well as the other information provided in the

management report.

The consolidated fi nancial statement was prepared in accordance with the International

Financial Reporting Standards (IFRSs), as adopted by the EU, and the supplementary provi-

sions under German commercial law to be applied according to art. 315 a paragraph 1 HGB

[German Commercial Code].

The consolidated management report comprises an analysis of the assets, fi nancial and

profi t situation of the group as well as further explanations which have to be provided

according to the provisions of the German Commercial Code (art. 318 HGB).

corporate governancebericht des aufsichtsratsdie aktiebrief an die aktionäre

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An effective internal control system has been put in place in order to safeguard the complete-

ness and reliability of the data for the preparation of the consolidated fi nancial statement

and of internal reporting. This system comprises uniform guidelines regarding accounting

and risk management in accordance with the German Law on Control and Transparency

in Companies (KonTraG) applicable throughout the Group and an integrated controlling

concept as an element of value-oriented management. This enables the Management

Board to detect fundamental risks early on and to initiate countermeasures which might be

required.

The declaration according to art. 37y fi gure 1 WpHG [German Securities Trading Act] in

conjunction with art. 297 paragraph 2 sentence 4 and art. 315 paragraph 1 sentence 6 HGB

[German Commercial Code] has the following wording:

“We assure to the best of our knowledge that the consolidated fi nancial statement conveys

an impression of the asset, fi nancial and profi t situation of the Group which is in line with

the actual situation in accordance with the accounting principles to be applied and that

the course of business including the results of the activities and the situation of the Group

are presented in the consolidated management report in such a manner that an impression

corresponding to the actual situation is conveyed and that the essential opportunities risks

of the probable development of the Group are described.“


ALTA FIDES AG

Aktiengesellschaft für Grundvermögen



konzernlagebericht jahresabschluss alta fi des ag

bila

nze

id

konzernabschluss

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corporate governanceletter to the shareholders the share report by the supervisory board corporate governanceletter to the shareholders the share report by the supervisory board corporate governanceletter to the shareholders the share report by the supervisory board

of ALTA FIDES Aktiengesellschaft

für Grundvermögen

for the fi nancial year from

1st January to 31st December 2008

annualfi nancialstatement

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group report fi nancial statement responsibility statement

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Previous YearASSETS EUR EUR EUR

A. Fixed assets

I. Intangible assets 1. Licences, industrial property rights and equivalent rights and values as well as licenses in such rights and values 2,060.00 2,060.00

II. Property, plant and equipment 1. Real property, rights equivalent to real property and buildings, including buildings on third-party land 1,850,660.20 1,888,370.20 2. Other equipment, furniture and fi xtures 143,544.50 152,614.50 1,994,204.70 2,040,984.70

III. Financial assets 1. Shares in affi liated companies 10,390,283.26 12,672,567.66

12,386,547.96 14,715,612.36 B. Current assets

I. Inventories 1. Land and buildings held for sale 205,188.25 205,188.25

II. Accounts receivable and other assets 1. Accounts receivable for sales and services 4,525.89 0.00 2. Accounts receivable from affi liated companies 35,225,421.61 27,234,656.30 3. Other assets 818,192.02 1,265,251.11 36,048,139.52 28,499,907.41

III. Stocks and shares 1. Other stocks and shares 0.00 1,674,960.00 IV. Cash in hand, deposits at federal bank, cash at banks and cheques 66,661.79 3,616,294.36

36,319,989.56 33,996,350.02 C. Accruals 25,814.77 25,397.78

48,732,352.29 48,737,360.16

Balance sheet as of 31st December 2008ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart

31/12/2008

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Previous YearLIABILITIES EUR EUR EUR

A. Equity I. Subscribed capital 7,050,000.00 7,050,000.00

II. Capital reserve 32,000,000.00 32,000,000.00

III. Retained income 1. Statutory reserve 47,700.00 47,700.00

IV. Loss for the fi nancial year -14,956,275.69 -150,266.93

24,141,424.31 38,947,433.07

B. Reserves 1. Taxes reserved 0.00 164,850.00 2. Other reserves 743,850.00 347,200.00

743,850.00 512,050.00

C. Accounts payable 1. Liabilities to banks 1,860,574.85 1,430,339.66 2. Accounts payable for goods and services 1,298,786.96 149,085.50 3. Accounts payable to affi liated companies 20,569,775.47 7,613,993.82 4. Other accounts payable 115,787.44 81,938.64 - Of which from taxes: EUR 30,279.61 (previous year: EUR 43,753.86) - Of which in the framework of social security: EUR 2,828.26 (previous year: EUR 0.00)

23,844,924.72 9,275,357.62

D. Deferrals 2,153.26 2,519.47

48,732,352.29 48,737,360.16

31/12/2008

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2008 Previous year EUR EUR

1. Sales revenue 279,570.86 872,827.45

2. Increase (previous year: reduction) in the inventory of fi nished and unfi nished products 24,308.59 -155,425.36

3. Total turnover and operating revenue 303,879.45 717,402.09

4. Other operating income 947,290.57 157,523.97

5. Costs of material Expenses for raw materials, consumables and supplies and for goods procured -99,227.46 -10,612.37

6. Payroll costs a) Wages and salaries -1,170,511.90 -944,673.13 b) Social insurance contributions and expenses for retirement pensions and for support -108,303.12 -58,360.75 - - Of which for retirement pensions EUR 1,200.00 (previous year: EUR 600.00)

7. Depreciations on intangible assets of the fi xed assets and property, plant and equipment -78,285.72 -97,457.76

8. Other operating expenditure -5,414,918.20 -2,703,737.09

9. Income from fi nancial investments 5,000.00 1,532,703.49 - Of which from affi liated companies EUR 0.00 (previous year: EUR 1,532,703.49)

10. Income from profi t transfer agreements 1,020,325.09 0.00

11. Other interest and similar income 440,946.22 347,828.83 - Of which from affi liated companies EUR 254,052.90 (previous year: 0.00)

12. Interest and similar income -299,107.38 -113,178.00 - Of which to affi liated companies EUR 113,760.17 (previous year: 3,182.46)

13. Costs from assumption of losses -10,533,374.53 0.00

14. Result from ordinary activities -14,986,286.98 -1,172,560.72

15. Taxes on income and profi t (income; previous year: expenses) 184,132.10 -14,295.60

16. Other taxes -3,853.88 -13,747.57

17. Loss for the fi nancial year -14,806,008.76 -1,200,603.89

18. Loss brought forward (previous year: profi t brought forward) from previous year -150,266.93 1,050,336.96

19. Balance sheet loss -14,956,275.69 -150,266.93

Profi t and loss account from 1st January 2008 to 31st December 2008ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart

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Notes regarding the fi nancial year 2008

ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart

1. General information regarding the annual fi nancial statement

ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart – also referred to as “ALTA

FIDES AG“ or the “Company“ hereinafter – constitutes a large corporation within the

meaning of art. 267 paragraph 3 sentence 2 HGB [German Commercial Code] since it uses

an organised market within the meaning of art. 2 paragraph 5 of the German Securities

Trading Act through stocks and shares issued by it.

The annual fi nancial statement as of 31st December 2008 is based on the provisions of the

German Commercial Code regarding fi nancial reporting for all businessmen, the supple-

mentary provisions regarding corporations and the provisions of the Companies Act and the

Articles of Association.

The business objective of ALTA FIDES AG comprises the purchase, sale and brokerage of

real estate properties as well as the arrangement of fi nancing. The Company is entitled to

carry out the activities specifi ed directly or indirectly through holding companies and subsi-

diaries. In this connection, the Company is a holding company (various property holding

companies with different legal forms as subsidiaries), on the one hand, and it also has its

own portfolio of real estate properties, on the other hand. On account of the fact that the

Company’s own stock of real estate properties (e.g. residential real estate properties) is still

of secondary importance, the application of the German ordinance on forms for structuring

the annual fi nancial statements of professional housing providers of 6th March 1987 was

dispensed with. The heating costs and service charges still to be settled with the tenants are

reported under Other assets, while the corresponding advance payments of service charges

are reported under the Other liabilities.

The accounting, valuation and depreciation methods applied take all discernible risks into

account; they are detailed in the notes to the balance sheet items.

2. Essential events during the fi nancial year

On 25th July 2008, the CORESTATE German Residential Limited Fund, St. Peter Port, Guernsey

managed by the private equity investor CORESTATE CAPITAL AG, Zug, Switzerland

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obtained control of ALTA FIDES AG, e.g. through its indirect subsidiary GOETHE

INVESTMENTS S.à r.l., which increased its shareholding in ALTA FIDES AG to approx.

64.16% of the registered capital.

Through the acquisition specifi ed above further subsidiaries of CORESTATE German

Residential Limited, which was entitled to in total up to 76.24% of the voting rights in ALTA

FIDES AG, have indirectly attained control of ALTA FIDES AG.

After that, GOETHE INVESTMENTS S.à r.l. submitted a mandatory offer according to the

German Securities Trading and Takeover Act to the external shareholders for the acquisition

of their ordinary no-par bearer shares at a price of EUR 15.00 per share in cash. On account

of this and on the basis of further purchases CORESTATE German Residential Limited in-

directly held approximately 95.94% of the shares in ALTA FIDES AG as of 31st December

2008.

ALTA FIDES AG acquired 345,000 shares (6.9%) in CAMPUS REAL ESTATE AG from Mr.

Dunkelberg at a purchase price of EUR 252,892.94 with the purchase agreement of 31st

October 2008. At the same time, it assumed the payment obligation with regard to the

contributions not furnished yet (75% of EUR 345,000) so that the total costs of acquisition

amounted to EUR 511,642.94.

Moreover, ALTA FIDES AG acquired 100,000 shares (2.0%) in CAMPUS REAL ESTATE AG

from Mr. Ketterer at a purchase price of EUR 25,000.00 with the purchase agreement of

17th December 2008. At the same time, it assumed the payment obligation with regard to

the contributions not furnished yet (75% of EUR 100,000) so that the total costs of acquisi-

tion amounted to EUR 100,000.00.

In the fi nancial year 2008 various subsidiaries of ALTA FIDES AG in the legal form of a

limited partnership (KG) were converted to the legal form of a German limited liability com-

pany (GmbH) primarily in order to use tax losses and to safeguard the optimisation of the

total tax burden within the group associated with this. The original fi xed capital was con-

verted into a reserve; the remaining capital accounts were transferred to the settlement

account with ALTA FIDES AG. At the same time, ALTA FIDES AG furnished a contribution

in kind to the amount of the authorised capital of EUR 25,000. Subsequent to the change of

the legal form of the companies domination and profi t transfer agreements were concluded

in order to establish an interlocking relationship with regard to corporation and trade tax.

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Resolutions regarding the approval of the domination and profi t transfer agreements of 4th

November 2008 with the subsidiaries specifi ed below were adopted in the extraordinary

general meeting of ALTA FIDES AG on 19th December 2008:


– AF Schloßgut GmbH, Stuttgart

– AF Seeresidenz Markkleeberg GmbH, Stuttgart

– AF Schloßresidenz GmbH, Stuttgart

– AF 5. Vermögensverwaltung GmbH, Stuttgart




– AF Trading GmbH, Stuttgart

– AF Ferdinand-Lasalle-Strasse 16 GmbH, Stuttgart

– AF Röntgenstrasse 12 GmbH, Stuttgart

– CAMPUS 1. Verwaltung GmbH, Stuttgart

– AF Property GmbH, Stuttgart

– Haus- und Grundstücksgesellschaft Holzhausen mbH, Leipzig

All contracts were registered in the competent commercial registers before the end of the

fi nancial year 2008 and, hence, became effective before the end of the fi nancial year 2008.

3. Accounting and valuation methods

The annual fi nancial statement as of 31st December 2008 was prepared in accordance with

the provisions of the third volume of the German Commercial Code.

The provisions of art. 267 paragraph 1 HGB [German Commercial Code] are applied with

regard to the Company’s fi nancial reporting.

The annual fi nancial statement was prepared in compliance with the general valuation

principles as per art. 246-251 HGB and by applying the special valuation principles accord-

ing to art. 267-274a, 276-278 HGB mutatis mutandis.

The structure of the balance sheet and the profi t and loss account comply with art. 266 and

art. 275 HGB; moreover, the aggregate cost method is used for the profi t and loss account.

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With the exception of the shareholdings in outside companies, the valuation principles were

applied without any changes as against the previous year. In the annual fi nancial statement

as of 31st December 2007, the shares in AF 14. Vermögensverwaltung GmbH (formerly: AF

14. Vermögensverwaltung GmbH & Co. KG) to the amount of EUR 50,000 were reported

in the balance sheet as shareholdings in outside companies (art. 266 paragraph 2 A.III.3

HGB) even though the company was a wholly owned subsidiary of ALTA FIDES AG. For this

reason, the report for the previous year was corrected accordingly.

The annual fi nancial statement was prepared in compliance with the general valuation

provisions contained in art. 252-256 HGB and by applying the special valuation provisions

for corporations contained in art. 279-283 HGB mutatis mutandis.

The valuation methods were applied without any changes as against the previous year. In

detail, valuation was effected as follows:

3.1 Fixed assets

The intangible assets acquired comprise software and licences purchased for valuable

consideration and are reported at continued costs of acquisition. Depreciations are made

according to the linear method in accordance with the average useful life of three years.

The land and buildings and the furniture and fi xtures are assessed at costs of acquisition less

the scheduled depreciations through use. Depreciations are effected linearly in accordance

with the probable period of use and on the basis of the tax-approved maximum rates:

– Buildings (at maximum 50 years)

– Other equipment, furniture and fi xtures (between three and fi fteen years)

Additions are depreciated on a pro rata temporis basis. Extraordinary depreciations are

effected in as far as the valuation at a lower value is required.

The fi nancial assets include shareholdings in affi liated companies. Financial assets are

reported at costs of acquisition or at their respective lower fair value in as far as the impair-

ment is of a lasting character.

In ordinary partnerships the liable capital as well as the compulsory capital contributions

under the articles of partnership are reported in the balance sheet; profi ts are transferred to

the respective settlement account; losses are deducted.

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The development of the individual items of the fi xed assets is shown in the assets analysis

(Annex 1 to the Notes) along with a specifi cation of the depreciations for the fi nancial

year.

3.2 Current assets

The properties held for sale are assessed without loss at the costs of acquisition and/or

according to the lower-of-cost-or-market principle within the meaning of art. 253 paragraph

1 and 2 sentence 2 HGB [German Commercial Code].

Accounts receivable and other assets are assessed on the basis of the nominal value. Credit

risks are taken into account by means of corresponding depreciation charges.

According to art. 253 paragraph 3 HGB [German Commercial Code], the other stocks and

shares are assessed at their costs of acquisition and depreciated to a lower value, which is

established on the basis of a stock exchange or market price.

Cash at banks was assessed at its nominal value in compliance with the bank statement as

of the balance sheet date.

3.3 Equity

The subscribed capital was reported in the balance sheet in compliance with the statements

in the Articles of Association and the registration in the commercial register as of the balance

sheet date.

3.4 Reserves

On principle, the reserves are assessed at the fulfi lment value estimated cautiously accord-

ing to commercial evaluation; all risks which have arisen by the balance sheet date and have

become discernible by the day of the preparation of the balance sheet as well as liabilities

which are uncertain in their amount have been taken into account.

3.5 Accounts payable

The accounts payable are carried as liabilities at their respective amounts repayable. There

were no currency liabilities as of the balance sheet date.

3.6 Costs of outside capital

Costs of outside capital are recorded as expenses during the accounting period in which

they are incurred.

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4. Notes to the balance sheet

4.1 Fixed assets

The development of the costs of acquisition or production as well as of the value adjust-

ments of all items of the fi xed assets during the fi nancial year 2008 is shown in the assets

analysis (gross assets analysis according to art. 268 paragraph 2 HGB [German Commercial

Code]).

With regard to the shares in affi liated companies the book value (EUR 25,000) for AF Leibniz-

straße 11 GmbH is higher than the fair value of EUR –81,747 (net asset value based on

IFRS values). AF Leibnizstraße 11 GmbH holds 2 offi ce units in Leipzig, Ferdinand-Lassalle-

Straße 12. It is assumed that these offi ce units can be sold at a sales price which is higher than

the book value within a short period of time on account of the location and the condition

of the property which is as good as new.

4.2 Shareholding

The list of shareholdings according to art. 285 sentence 1 fi gure 11 HGB shows the result

for the last fi nancial year for companies with which effective domination and profi t transfer

agreements have been concluded after the profi t transfer and/or assumption of losses. Over-

all, expenses to the amount of EUR 10,533,375 were incurred and revenue to the amount

of EUR 1,020,325 was generated in the framework of the domination and profi t transfer

agreements.

As of 31st December 2008, the Company’s trade investments had the following structure:

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Company Registered Shareholding Equity capital Annual result offi ces (in %) (in EUR) (in EUR)

Direct shareholdings IVB Menckestraße 39 GmbH & Co. KG Stuttgart 100.00 443,559 (26,672)AF Ferdinand-Lasalle-Straße 16 GmbH Stuttgart 100.00 27,000 - AF Röntgenstraße 12 GmbH Stuttgart 100.00 28,120 - AF Marienhöhe GmbH & Co. KG Stuttgart 100.00 424,913 3,639AF 5. Vermögensverwaltung GmbH Stuttgart 100.00 27,987 - AF Schloßgut GmbH Stuttgart 100.00 26,731 - AF Leibnizstraße 11 GmbH Stuttgart 100.00 (81,747) (106,747)AF Seeresidenz Markkleeberg GmbH Stuttgart 100.00 25,000 - AF Schloßresidenz GmbH Stuttgart 100.00 25,000 - AF 12. Vermögensverwaltung GmbH Stuttgart 100.00 30,352 - AF 14. Vermögensverwaltung GmbH Stuttgart 100.00 27,974 - AF 15. Vermögensverwaltung GmbH & Co. KG Stuttgart 51.00 44,587 (5,413)AF 16. Vermögensverwaltung GmbH Stuttgart 100.00 (902,087) (927,379)IVB Immobilien Vermögen und Beteiligungs GmbH Stuttgart 100.00 73,365 48,365AF Trading GmbH Stuttgart 100.00 35,000 - AF Property GmbH Stuttgart 100.00 27,000 - AF 11. Vermögensverwaltung GmbH Stuttgart 100.00 27,000 - IVB Immobilien Vermittlung und Beratung GmbH Stuttgart 94.23 47,901 21,901PROFECTO AG Stuttgart 100.00 3,687,451 - CAMPUS REAL ESTATE AG Stuttgart 97.84 4,394,385 (605,615)ER_C@MPUS GmbH & Co. KG Stuttgart 55.00 (402,959) (405,596)AF ATHENA GmbH & Co. KG Stuttgart 94.90 49,099 (901)CAMPUS 1. Verwaltung GmbH Stuttgart 100.00 25,000 - Indirect shareholdings Haus- und Grundstücksgesellschaft Holzhausen mbH Leipzig 94.23 1,383,668 - PF St.- Annen-Straße GmbH Leipzig 100.00 60,632 33,632PF 1. Verwaltung GmbH Leipzig 100.00 19,418 (5,582)CAMPUS Service GmbH Stuttgart 97.84 13,880 (11,120)CAMPUS Karlsruhe GmbH Stuttgart 97.84 16,259 (8,741)CAMPUS Heidelberg GmbH Stuttgart 97.84 (196,118) (222,209)CAMPUS 3. Vermögensverwaltung GmbH Stuttgart 97.84 18,449 (7,641)CAMPUS 4. Vermögensverwaltung GmbH Stuttgart 97.84 (11,697) (37,787)CAMPUS 5. Vermögensverwaltung GmbH Stuttgart 97.84 40 (26,050)CAMPUS 6. Vermögensverwaltung GmbH Stuttgart 97.84 26,090 - ER_C@MPUS Verwaltungs GmbH Stuttgart 55.00 19,069 (5,931)Widicon Trade & Consulting GmbH & Co. KG Bad Ems 51.00 (35,935) (37,935)Widicon GmbH Bad Ems 51.20 20,073 (4,927)AF HEKATE GmbH & Co. KG Stuttgart 92.85 48,824 (1,176)IVB - HGH GbR Stuttgart 88.58 - (6,843)

List of shareholdings according to art. 285 sentence 1 fi gure 11 HGB

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4.3 Accounts receivable, other assets and accruals

As during the previous year, all accounts receivable and other assets have a term of up to

one year. The accounts receivable from affi liated companies essentially result from Group

fi nancing and from the assumption of results in the framework of the new domination and

profi t transfer agreements concluded in the fi nancial year 2008 by and between ALTA FIDES

AG and certain subsidiaries. These concern the subsidiaries listed below:

Accounts receivable from affi liated companies (in EUR)

31/12/2008 31/12/2007

CAMPUS REAL ESTATE AG 10,263,670 - AF 11. Vermögensverwaltung GmbH 7,264,587 8,031,133Haus- und Grundstücksgesellschaft Holzhausen mbH 2,487,966 3,979,337AF Röntgenstraße 12 GmbH 2,218,859 272,218AF Property GmbH 1,901,108 2,466,867AF 16. Vermögensverwaltung GmbH 1,837,762 - IVB Immobilien Vermittlung und Beratung GmbH 1,656,707 1,969,571AF Ferdinand-Lasalle-Straße 16 GmbH 1,550,268 2,323,684AF 14. Vermögensverwaltung GmbH 1,228,921 1,202,319AF Seeresidenz Markkleeberg GmbH 1,178,590 1,361,439AF Schloßresidenz GmbH 1,068,068 1,227,152AF 12. Vermögensverwaltung GmbH 933,209 62,879AF Trading GmbH 502,814 756,777AF Leibnizstraße 11 GmbH 441,955 257,456AF Schloßgut GmbH 371,686 294,975Widicon Trade & Consulting GmbH & Co. KG 200,000 - AF ATHENA GmbH & Co. KG 113,268 - AF 15. Vermögensverwaltung GmbH & Co. KG 5,984 - CAMPUS Karlsruhe GmbH - 2,332,328ER_C@MPUS GmbH & Co. KG - 332,987AF 5. Vermögensverwaltung GmbH - 274,056PROFECTO AG - 87,868ER_C@MPUS Verwaltungs GmbH - 1,611

Total 35,225,422 27,234,656

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The other assets have the following structure:

The accruals comprise prepaid fees, commission fees and down payments for leasing

contracts.

4.4 Equity

As of 31st December 2008, the subscribed capital of ALTA FIDES AG amounts to EUR

7,050,000 (previous year: EUR 7,050,000): Moreover, the equity capital is divided into

7,050,000 ordinary bearer shares without any changes compared to the past.

Authorised capital

In the general meeting of 25th June 2007 the Management Board was authorised to increase

the equity capital of the Company by issuing new ordinary bearer shares once or several

times in return for cash contributions or contributions in kind until 15th June 2012 with the

approval by the Supervisory Board. However, such an increase shall amount to at maximum

EUR 3,525,000 (authorised capital). The new shares can also be issued to employees of the

Company. The Management Board establishes the amount of issue of the new shares and

Other assets (in EUR)

31/12/2008 31/12/2007

Corporation tax reclaims 579,354 138,022

Loan to Berner Group GmbH, Wiesbaden 69,733 1,008,489

Accounts receivable from loans 43,290 90,563

Accounts receivable from Mr. Ketterer 30,366 -

Heating costs and service charges still to be settled 24,309 -

Security deposits 13,938 4,500

Sales tax receivables 12,633 1,893

Others 44,570 21,784

Total 818,192 1,265,251

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can also determine the commencement of the participating rights of such in deviation to art.

60 paragraph 2 AktG [German Companies Act].

It is authorised to determine the further details of the respective capital increase as well as

the conditions for the issue of the shares and the contents of the rights inherent in the shares

with the approval by the Supervisory Board. On principle, the shareholders shall be granted

a subscription right; however, according to art. 186 paragraph 5 sentence 1 AktG, the shares

can also be taken over by one or several credit institutions or by one or several companies

operating according to art. 53 paragraph 1 sentence 1 or art. 53b paragraph 1 sentence 1

or paragraph 7 of the German Credit Services Act with the obligation to offer the shares in

question to the shareholders for subscription. The Management Board is authorised to ex-

clude the shareholders’ subscription right under the conditions specifi ed with the approval

by the Supervisory Board.

Conditional capital

In the general meeting on the 1st of August 2008 the Management Board was authorised

to issue registered or bearer convertible bonds and/or option bonds or participation rights

with or without conversion or option rights or a conversion obligation (referred to jointly as

the “bonds” hereinafter) with a total nominal amount of up to EUR 80,000,000 with a term

of up to 20 years once or more than once until 15th June 2013 with the approval by the

Supervisory Board and to grant the bearers and/or creditors of bonds conversion or option

rights regarding new ordinary bearer shares of the Company with a proportionate share in

the equity capital of up to EUR 3,525,000 as provided for in the terms of the bonds.

Furthermore, the Management Board was authorised to increase the equity of the Company

by up to EUR 3,525,000 by means of the issue of up to 3,525,000 new ordinary bearer

shares accounting for a proportionate share in the equity capital of EUR 1 each with the

approval by the Supervisory Board (conditional capital).

The entire capital reserve is the result of agio amounts (art. 272 paragraph 2 fi gure 1 HGB

[German Commercial Code]).

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4.5 Reserves

The development and structure of the tax reserves and the other reserves is shown in the

provisions schedule:

1/1/2008 Consumption Retransfer Addition 31/12/2008

Trade tax 164,850 (164,850) - - 0

Corporate tax 0 - - - 0

Total 164,850 (164,850) 0 0 0

Tax reserves (in EUR)

1/1/2008 Consumption Retransfer Addition 31/12/2008

Financial statements and auditing costs 208,600 (208,600) - 260,450 260,450

Accounts payable for consultancy services 0 - - 160,500 160,500

Other accounts payable 0 - - 144,240 144,240

Emoluments for the Supervisory Board 30,000 (30,000) - 75,000 75,000

Costs of general meeting 36,000 (36,000) - 36,000 36,000

Management bonuses 12,000 (12,000) - 28,000 28,000

Vacation not taken 33,000 (33,000) - 25,000 25,000

Archiving 10,000 - - - 10,000

Overtime 3,000 (3,000) - 3,000 3,000

Contributions to professional associations 1,200 (1,200) - 1,600 1,600

Interest 9,000 - (9,000) - -

Phone costs 400 (400) - - -

Land tax 4,000 (524) (3,476) - -

Others 0 - - 60 60

Total 347,200 (324,724) (12,476) 733,850 743,850

Other reserves (in EUR)

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4.6 Liabilities and accruals and deferred income

There are liabilities totalling EUR 241,003 (previous year: EUR 1,118,496) with a residual

term of more than fi ve years.

The liabilities to banks essentially comprise two loans from Deutsche Kreditbank Aktien-

gesellschaft, Leipzig (in total: EUR 1,368,461, interest rate 4.9% p.a. and 6.0% p.a.). The

lock-down period for the interest rate of these loans will expire in mid-2009. In addition to

this, a long-term loan of AF Trading GmbH taken out from BHW Bausparkasse AG Hameln

was taken over through the assumption of debt on 11th September 2008 (amount as of 31st

December 2008: EUR 481,003, interest rate: 4.89% p.a.). Liabilities to banks are secured by

mortgages through registered land charges.

Other liabilities are not secured.

The accounts payable to affi liated companies primarily result from Group fi nancing, contri-

butions still to be furnished as well as the assumption of results in the framework of the new

domination and profi t transfer agreements concluded.

Type of liabilities Total Up to 1 year 1 to 5 years More than 5 years Secured

Liabilities to banks 1,860,575 1,427,572 192,000 241,003 1,860,575

(previous year) 1,430,340 57,162 254,681 1,118,496 1,430,340

Accounts payable for goods and 1,298,787 1,298,787 0 0 0

services (previous year) 149,086 149,086 0 0 0

Accounts payable to affi liated 20,569,775 9,289,504 11,280,272 0 0

companies (previous year) 7,613,994 7,613,994 0 0 0

Other liabilities 115,787 115,787 0 0 0

(previous year) 81,939 81,939 0 0 0

Total 23,844,925 12,131,650 11,472,272 241,003 1,860,575

(previous year) 9,275,358 7,902,180 254,681 1,118,496 1,430,340

Liabilities analysis (in EUR)

Of which with a residual term of

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Accounts payable to affi liated companies (in EUR)

31/12/2008 31/12/2007

GOETHE INVESTMENTS S.à r.l. 11,280,272 -

PROFECTO AG 3,622,888 3,000,000

CAMPUS REAL ESTATE AG 3,533,750 3,225,000

IVB - HGH GbR 700,996 377,577

IVB Menckestraße 39 GmbH & Co. KG 452,434 470,957

CAMPUS 1. Verwaltung GmbH 269,922 -

AF Marienhöhe GmbH & Co. KG 267,233 414,845

AF 5. Vermögensverwaltung GmbH 173,006 -

ER_C@MPUS GmbH & Co. KG 97,968 -

IVB Immobilien Vermögen und Beteiligungs GmbH 91,358 69,480

AF ATHENA GmbH & Co. KG 47,450 -

AF 15. Vermögensverwaltung GmbH & Co. KG 25,500 25,911

AF Schloßgut GmbH 5,000 -

AF 16. Vermögensverwaltung GmbH 2,000 1,422

IVB Coppistraße 39 GmbH & Co. KG - 26,802

AF 11. Vermögensverwaltung GmbH - 2,000

Total 20,569,775 7,613,994

GOETHE INVESTMENTS S.à r.l. granted ALTA FIDES AG a credit line to the amount of

EUR 30 million until 31st December 2010 by means of a contract of 25th November 2008.

This credit line can be used specifi cally for interim fi nancing of project developments,

fi nancing existing properties or one-off expenses in the context of the restructuring of ALTA

FIDES AG in the framework of the current liquidity plan. The loans granted by GOETHE

INVESTMENTS S.à r.l. (EUR 7.8 million) until 25th November 2008 are taken into account

with regard to the credit line. The interest rate amounts to 9.0% p.a. As of 31st December

2008, a total of EUR 11,280,272 of the credit line was used.

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The other liabilities concern the following:

The deferrals comprise rents paid in advance.

5. Notes to the profi t and loss account

5.1 Sales revenue

Within ALTA FIDES Group the revenue from the sale of apartments is only realised once the

transfer of rights and liabilities agreed on in the appertaining contract has taken place and

the owner of the apartment has accepted the apartment purchased and such acceptance

has been documented in writing. Apartments were not sold during the 2008 fi nancial year.

The entire sales revenue was generated in Germany.

Sales revenue (in EUR)

2008 2007

Rents and commission fees 279,571 173,801

Sales of apartments - 699,027

Total 279,571 872,827

Other liabilities (in EUR)

31/12/2008 31/12/2007

Advance payments of service charges by tenants 62,370 -

Payroll tax to be paid over 30,280 33,104

Security deposits received 15,471 16,757

Social insurance contributions to be paid over 2,828 -

Sales tax liabilities - 10,650

Others 4,839 21,428

Total 115,788 81,938

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5.2 Changes in inventories

The changes in inventories comprise the accrual of heating costs and services charges for

2008 (EUR 24,309) still to be settled with the tenant to the full amount. During the previous

year the disposal from the inventory arising from the sale of the real estate property in

Leipzig, Schwägrichenstraße 15 was reported.

5.3 Other operating income

In August 2008, ALTA FIDES AG charged a lump sum of EUR 857,000 to ER_C@MPUS

GmbH & Co. KG for the contribution of its expert knowledge in the framework of project

development at the site in Erlangen. In addition to this, services for project controlling to the

amount of in total EUR 37,500 were invoiced.

Other operating income (in EUR)

2008 2007

Compensation for contribution of expert knowledge to ER_C@AMPUS GmbH / Co. KG 857,000 -

Cost transfer to ER_C@AMPUS GmbH / Co. KG for project controlling 37,500 -

Offsetting of remunerations in kind 23,901 20,058

Retransfer of reserves 12,476 30,222

Additions to current assets 600 11,435

Others 15,814 95,808

Total 947,291 157,524

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5.4 Payroll costs

18 members of staff (previous year: 13) were employed on an annual average. On 31st

December 2008, the staff number totalled 20 employees.

Payroll costs (in EUR) 2008 2007

Wages and salaries 1,170,512 944,673

Wages and salaries (including salaries for

members of the Management Board) 1,157,564 939,873

Wages for temporary workers 4,400 4,800

Others 8,548 -

Social insurance contributions and expenses

for retirement pensions and for support 108,303 58,361

Statutory social insurance contributions 105,138 56,859

Contributions to trade associations 1,965 1,339

Expenses for retirement pensions 1,200 600

Sickness benefi t allowance - (855)

Others - 419

Total 1,278,815 1,003,034

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5.5 Depreciations on intangible assets of the fi xed assets and on plant, property

and equipment

5.6 Other operating expenditure

Other operating expenditure (in EUR)

2008 2007

Legal and professional services, notary’s fees and charges 2,721,995 320,090

Costs of advertising and travelling expenses 643,285 382,563

Financial statements and auditing costs 471,826 242,531

Selling costs 308,775 441,112

Expenses for premises, rents 138,051 163,857

Vehicle costs and leasing of vehicles 129,325 106,173

Costs for stock exchange 82,648 247,854

Emoluments for the Supervisory Board 78,800 33,594

Repair and maintenance 37,209 42,116

Insurances, contributions and charges 10,611 13,018

Non-deductible input tax - 271,292

Book loss from disposal of assets - 188,961

Value adjustments on accounts receivable - 99,224

Others 792,394 151,351

Total 5,414,918 2,703,737

Depreciations (in EUR)

2008 2007

on intangible assets 1,032 259

on buildings (plant, property and equipment) 37,710 37,710

on furniture and fi xtures 37,368 44,845

on low-value items 2,176 14,643

Total 78,286 97,457

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The fee for the fi nal auditor recorded for the fi nancial year according to art. 285 sentence

1 fi gure 17 HGB [German Commercial Code] amounts to EUR 221,340 (previous year: EUR

148,000) gross for the fi nal audits and to EUR 98,517 (previous year: 94,531) gross for other

consultancy services.

5.7 Income from fi nancial investments

The income from fi nancial investments to the amount of EUR 5,000 (previous year: EUR

1,532,703) includes the profi t shares from a partnership according to art. 9 GewStG

[German Trade Tax Act]. In the previous year, income from subsidiaries was reported

including the profi t distribution by Haus- und Grundstücksgesellschaft Holzhausen mbH.

5.8 Income from profi t transfer agreements

Income from profi t transfer agreements (in EUR)

2008 2007

AF Schloßgut GmbH 719,859 -

AF Trading GmbH 300,467 -

Total 1,020,325 0

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5.9 Costs from assumption of losses

5.10 Taxes on income and profi t

The profi ts tax comprises refunds (netted out against supplementary payments) of in total

EUR 184,132 (previous year: expenditure EUR 14,296) which concerned accounting periods

from previous years.

6. Other notes

6.1 Notes on liabilities and other fi nancial obligations

ALTA FIDES AG has established joint liabilities in rem and under the law of obligations with

regard to liabilities of subsidiaries. In this context, ALTA FIDES AG has limited guarantees

regarding in total EUR 97.3 million as of 31st December 2008; the corresponding loans

have a value of EUR 40.2 million. In the previous year, there were liabilities for loans by the

subsidiaries to the amount of EUR 60.5 million.

Costs from assumption of losses (in EUR)

2008 2007

AF 11. Vermögensverwaltung GmbH 2,186,495 -

Haus- und Grundstücksgesellschaft Holzhausen mbH 1,897,202 -

CAMPUS 1. Verwaltung GmbH 1,071,671 -

AF Property GmbH 869,996 -

AF Ferdinand-Lasalle-Straße 16 GmbH 753,000 -

PROFECTO AG 728,568 -

AF Röntgenstraße 12 GmbH 680,267 -

AF Schloßresidenz GmbH 676,881 -




AF Seeresidenz Markkleeberg GmbH 97,816 -

Total 10,533,375 0

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Such liabilities have not been established for third parties.

There are other fi nancial obligations from vehicle leasing agreements totalling EUR 130,579

for the years 2009 and 2010. In addition to this, there is another fi nancial obligation from

renting the business premises in Leipzig, Schwägrichenstraße 11 and in Stuttgart to the

amount of in total EUR 49,929.

6.2 Information provided according to art. 160 paragraph 1 fi gure 8 AktG [German

Companies Act] (Reportable shareholdings)

The announcements published according to the German Securities Trading Act had the

following contents (exact wording of the published announcements):

According to art. 21 paragraph 1 sentence 1 WpHG [German Securities Trading Act]

GOETHE INVESTMENTS S. à r. l., Luxembourg, Luxembourg, and SECHEP INVESTMENTS

HOLDINGS II S. à r. l., Luxembourg, Luxembourg, have announced the following to us:

On 13th October 2008, the share of GOETHE INVESTMENTS S. à r. l. and SECHEP

INVESTMENTS HOLDINGS II S. à r. l. in the voting rights in ALTA FIDES Aktiengesellschaft

für Grundvermögen, Altenbergstraße 3, D-70180 Stuttgart, Germany exceeded the threshold

of 75% and amounted to approx. 84.63% of the voting rights (5,966,343 voting rights) on

that day.

According to art. 22 paragraph 1 sentence 1 fi gure 1 WpHG, a share in the voting rights

of ALTA FIDES Aktiengesellschaft für Grundvermögen to the amount of approx. 84.63%

(5,966,343 voting rights) is allocated to the share in the voting rights held by SECHEP

INVESTMENTS HOLDINGS II S. à r. l.

The voting rights are assigned to SECHEP INVESTMENTS HOLDINGS II S. à r. l. via com-

panies controlled by it whose allocated share in the voting rights amounts to 3% or more

each: GOETHE INVESTMENTS S. à r. l.

According to art. 21 paragraph 1 sentence 1 WpHG, SEB Investment GmbH, Frankfurt am

Main, Germany has informed us that it held 0.0% of the voting rights (which corresponds

to 0 voting rights) in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart on 7th

October 2008 and that it, hence, no longer reached the threshold of 3% of the voting rights

in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart.


GmbH, Frankfurt am Main, Germany informed us that its share in the voting rights in ALTA

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FIDES Aktiengesellschaft für Grundvermögen, Stuttgart, Germany amounted to 0.00%

(which corresponds to 0 voting rights) on 21st August 2008 and that it, hence, no longer

reached the thresholds of 10%, 5% and 3% of the voting rights in ALTA FIDES Aktiengesell-

schaft für Grundvermögen, Stuttgart, Germany.

According to art. 21 paragraph 1 sentence 1 WpHG, RABANO PROPERTIES S.à.r.l., Luxembourg,

Luxembourg, informed us that its share in the voting rights in ALTA FIDES Aktiengesellschaft

für Grundvermögen, Stuttgart, Germany amounted to 11.32% (which correspond to 797,750

voting rights) on 21st August 2008 and has, hence, exceeded the thresholds of 10%, 5%

and 3% of the voting rights in ALTA FIDES AG, Stuttgart, Germany.


Germany has informed us that it held 3.42% of the voting rights (which correspond to

241,510 voting rights) in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart,

on 18th August 2008 and that, hence, it has exceeded the threshold of 3% of the voting

rights in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart.

According to art. 25 paragraph 1 sentence 1 WpHG, CORESTATE German Residential

Limited, St. Peter Port, Guernsey, Great Britain, YANWORTH HOLDINGS LIMITED, Gibraltar,

SECHEP INVESTMENTS HOLDING S.à.r.l., Luxembourg, Luxembourg, as well as Zweite

REO-Real Estate Opportunities GmbH, Frankfurt am Main, Germany (the “Communi-

cators“) have informed us that they no longer directly or indirectly hold any fi nancial instru-

ments granting them the right to buy shares in ALTA FIDES Aktiengesellschaft für Grund-

vermögen, Stuttgart, Germany since the exercise of fi nancial instruments on 06th August

2008. This would mean that the Communicators no longer reached the thresholds of 10%

and 5% of the voting rights in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart,

Germany on 06th August 2008 and that the Communicators would each hold a share in the

voting rights of 0.00% (which corresponds to 0 voting rights).

According to art. 21 paragraph 1a WpHG, METZLER INVESTMENT GMBH, Frankfurt am

Main, Germany has informed us that it held 9.472% of the voting rights (which correspond

to 667,795 voting rights) in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart, on

7th December 2006 and that it has, hence, exceeded the thresholds of 3% and 5% of the

voting rights in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart. Of this share

9.472% (which corresponds to 667,795 voting rights) have to be allocated to METZLER

INVESTMENT GMBH via UNIVERSA Lebensversicherung a. G. and UNIVERSA Kranken-

versicherung a. G. according to art. 22 paragraph 1 sentence 1 fi gure 6 [correction of the

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announcement of 11th July 2008; correction of the voting rights announcement of 8th July

2008 according to art. 21 paragraph 1a WpHG].

According to art. 21 paragraph 1 WpHG, METZLER INVESTMENT GMBH, Frankfurt am

Main, Germany has informed us that it held 0.0% of the voting rights (which corresponds to

0 voting rights) in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart on 06 August

2008 and that it, hence, no longer reaches the threshold of 10%, 5% and 3% of the voting

rights in ALTA FIDES Aktiengesellschaft für Grundvermögen Stuttgart.

According to art. 21 paragraph 1 WpHG, uniVersa Krankenversicherung a.G. and uniVersa

Lebensversicherung a. G., both of Nuremberg, Germany have informed us that they each

held 0.0% of the voting rights (which corresponds to 0 voting rights) in ALTA FIDES Aktien-

gesellschaft für Grundvermögen, Stuttgart, on 06th August 2008 and that they, hence, failed

to reach the thresholds of 5% and 3% of the voting rights in ALTA FIDES Aktiengesellschaft

für Grundvermögen, Stuttgart.

According to art. 21 paragraph 1 WpHG, Mr. Norbert Ketterer, Germany has informed us

that he held 0.1418% of the voting rights (which correspond to 10,000 voting rights) in ALTA

FIDES Aktiengesellschaft für Grundvermögen, Stuttgart on 06th August 2008 and that he,

hence, no longer reached the thresholds of 30%, 25%, 20%, 15%, 10%, 5% and 3% of

the voting rights in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart.

According to art. 21 paragraph 1 WpHG, Mr. Karl Ketterer, Dr. Raimund Baumann and Mr.

Gerd Eichinger, all of Germany, have informed us that they each held 0% of the voting rights


Stuttgart on 06th August 2008 and that they each no longer reach the thresholds of 5% and


According to art. 21 paragraph 1 WpHG, Ms. Natalie Wagner, Germany has informed us

that she held 0.0% of the voting rights (which corresponds to 0 voting rights) in ALTA FIDES

Aktiengesellschaft für Grundvermögen, Stuttgart on 06th August 2008 and that she, hence,

no longer reaches the threshold of 3% of the voting rights in ALTA FIDES Aktiengesellschaft



CORESTATE CAPITAL Beteiligungs GmbH, Frankfurt am Main, Germany and Mr. Ralph Win-

ter, Switzerland have each informed us that they each held 0.0% of the voting rights (which

corresponds to 0 voting rights) in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart

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on 25th July 2008 and that, hence, they no longer reached the threshold of 3% of the voting


According to art. 21 paragraph 1 WpHG, Julius Bär Holding and GAM Holding AG, both

of Zurich, Switzerland, GAM (U.K.) Ltd. and GAM International Management Ltd., both of

London, England and GAM European Small Cap Hedge Investments Inc., Road Town, British

Virgin Islands have each informed us that they each held 2.86% of the voting rights (which

correspond to 201,550 voting rights) in ALTA FIDES Aktiengesellschaft für Grundvermögen,

Stuttgart on 30th July 2008 and that, hence, they each no longer reached the threshold of


According to art. 22 paragraph 1 sentence 1 fi gure 6 in conjunction with art. 22 paragraph

1 sentence 2 WpHG, the voting rights are allocated to Julius Bär Holding AG and GAM

Holding AG, both of Zurich, Switzerland and to GAM (U.K.) Ltd., London, England, each to

the full extent of 2.86% (which correspond to 201,550 voting rights). According to art. 22

paragraph 1 sentence 1 fi gure 6 WpHG, the voting rights are allocated to GAM International

Management Ltd., London, England, to the full extent of 2.86% (which corresponds to

201,550 voting rights).

Julius Bär Holding AG, Zurich, Switzerland has informed us that it retracts the voting rights

announcements regarding ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart,

Germany by GAM Sterling Management Ltd., London, England and GAM London Ltd.,

London, England according to art. 21 paragraph 1a WpHG of 14th December 2006 for

7th December 2006 as well as according to art. 21 paragraph 1 WpHG of 21st September

2007 for 19th December 2006. There were no obligations to notify with regard to these

two companies since no voting rights were allocated to these (withdrawal of voting rights

announcement according to art. 21 paragraph 1a WpHG).


CORESTATE CAPITAL Beteiligungs GmbH, Frankfurt am Main, Germany and Mr. Ralph

Winter, Switzerland have each informed us that they each held 0.0% of the voting rights


Stuttgart on 25th July 2008 and that, hence, they each no longer reached the threshold of


According to art. 21 paragraph 1 WpHG, SEB Investment GmbH, Frankfurt am Main,

Germany has informed us that it held 2.72% of the voting rights (which correspond to

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191,510 voting rights) in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart on 01

August 2008 and that it, hence, no longer reached the threshold of 3% of the voting rights

in ALTA FIDES Aktiengesellschaft für Grundvermögen, Stuttgart.

According to art. 21 paragraph 1 sentence 1 WpHG, CORESTATE German Residential

Limited, St. Peter Port, Guernsey, United Kingdom, YANWORTH HOLDINGS LIMITED,

Gibraltar, SECHEP INVESTMENTS HOLDINGS II S. à r. l., Luxembourg and GOETHE

INVESTMENTS S. à r. l., Luxembourg have informed us of the following:

I. The share of CORESTATE German Residential Limited and YANWORTH HOLDINGS

LIMITED in ALTA FIDES Aktiengesellschaft für Grundvermögen, Altenbergstraße 3,

D-70180 Stuttgart, Germany exceeded each of the thresholds of 30%, 50% and 75%

on 25th July 2008 and amounted to approx. 75.48% of the voting rights (5,321,046

voting rights) on that day.

Of their share in the voting rights, CORESTATE German Residential Limited and

YANWORTH HOLDINGS LIMITED are assigned a share in the voting rights of ALTA

FIDES Aktiengesellschaft für Grundvermögen to the amount of approx. 14.18%

(1,000,000 voting rights) according to art. 22 paragraph 1 sentence 1 fi gure 1 WpHG,

a share in the voting rights to the amount of approx. 46.48% (3,276,546 voting rights)

according to art. 22 paragraph 1 sentence 1 fi gure 5 sentence 2 WpHG and a share in

the voting rights of approx. 14.82% (1,044,500 voting rights) according to art. 22 para-

graph 1 sentence 1 fi gure 6 sentence 2 WpHG.

The voting rights are assigned to CORESTATE German Residential Limited through the

following companies which are controlled by it and whose allocated share in the voting

rights amounts to 3% or more each: YANWORTH HOLDINGS LIMITED, SECHEP

INVESTMENTS HOLDING II S. à r. l. and GOETHE INVESTMENTS S. à r. l.

YANWORTH HOLDINGS LIMITED is allocated the voting rights through the following

companies which are controlled by it and whose allocated share in the voting rights

amounts to 3% or more each: SECHEP INVESTMENTS HOLDING II S. à r. l. and GOETHE

INVESTMENTS S. à r. l.

CORESTATE German Residential Limited and YANWORTH HOLDINGS LIMITED are as-

signed the voting rights from the shares of the following third parties whose allocated share in

the voting rights amounts to 3% or more each: Mr. Norbert Ketterer, Mr. Gerd Eichinger, Dr.

Raimund Baumann, uniVersaKrankenversicherung e.G. and uniVersa Lebensversicherung e.G.

II. On 25th July 2008, the share of SECHEP INVESTMENTS HOLDING II S. à r. l. and of

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GOETHE INVESTMENTS S. à r. l. in the voting rights in ALTA FIDES Aktiengesellschaft

für Grundvermögen, Altenbergstraße 3, D-70180 Stuttgart, Germany exceeded each of

the thresholds of 15%, 20%, 25%, 30% and 50% and amounted to approx. 64.16%

of the voting rights (4,523,296 voting rights) as of that day.

Of its share in the voting rights, SECHEP INVESTMENTS HOLDING II S. à r. l. is assigned

a share in the voting rights amounting to approx. 14.18% (1,000,000 voting rights)

according to art. 22 paragraph 1 sentence 1 fi gure 1 WpHG, a share in the voting rights

amounting to approx. 46.48% (3,276,546 voting rights) according to art. 22 paragraph

1 sentence 1 fi gure 5 sentence 2 WpHG as well as a share in the voting rights to the

amount of 3.5% (246,750 voting rights) according to art. 22 paragraph 1 sentence 1

fi gure 6 sentence 2 WpHG.

Of its share in the voting rights, GOETHE INVESTMENTS S. à r. l. is assigned a share

in the voting rights of approx. 46.48% (3,276,546 voting rights) according to art. 22

paragraph 1 sentence 1 fi gure 5 WpHG and a share in the voting rights of approx. 3.5%

(246,750 voting rights) according to art. 22 paragraph 1 sentence 1 fi gure 6 WpHG.

SECHEP INVESTMENTS HOLDING II S. à r. l. is allocated the voting rights through the

following companies which are controlled by it and whose share in the voting rights

amounts to 3% or more each: GOETHE INVESTMENTS S. à r. l.

SECHEP INVESTMENTS HOLDING II S. à r. l. and GOETHE INVESTMENTS S. à r. l. are

assigned the voting rights from the shares of the following third parties, whose allocated




On 11th July 2008 METZLER Investment GmbH, Frankfurt am Main, Germany informed us

according to art. 21 paragraph 1a WpHG that its share in the voting rights in ALTA FIDES

AG für Grundvermögen amounted to 9.472% (which correspond to 667,795 voting rights)

on 08th December 2006.

On 08th July 2008, METZLER Investment GmbH, Frankfurt am Main, Germany informed

us that its share in the voting rights in ALTA FIDES AG für Grundvermögen exceeded the

threshold of 10% on 27th June 2008 and corresponded to 10.00065% (which correspond

to 705,046 voting rights) on that day. Of this 10.00065% (which correspond to 705,046

voting rights) have to be allocated to METZLER Investment GmbH, Frankfurt am Main,

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Germany via Universa Krankenversicherung a. G., Nuremberg, Germany and Universa

Lebensversicherung a. G., Nuremberg, Germany according to art. 22 paragraph 1 sentence

1 fi gure 6 WpHG.

According to art. 21 paragraph 1 sentence 1 WpHG, SECHEP INVESTMENTS HOLDING S.à

r.l., Luxembourg, Luxembourg, SECHEP INVESTMENTS HOLDING II S.à r.l., Luxembourg,

Luxembourg, Zweite REO-Real Estate Opportunities GmbH, Frankfurt am Main, Germany

and GOETHE INVESTMENTS S.à r.l., Luxembourg, Luxembourg have informed us of the

following:

I. The share of SECHEP INVESTMENTS HOLDING S.à r.l. and Zweite REO-Real Estate

Opportunities GmbH in ALTA FIDES AG Aktiengesellschaft für Grundvermögen no

longer reached the thresholds of 25%, 20% and 15% each on 27th June 2008 and

amounted to 11.32% (which correspond to 797,750 voting rights) on that day. Of this

11.32% (which correspond to 797,750 voting rights) have to be assigned to SECHEP

INVESTMENTS HOLDING S.à r.l. according to art. 22 paragraph 1 sentence 1 fi gure

6, sentence 2 WpHG and to Zweite REO-Real Estate Opportunities GmbH through

Mr. Norbert Ketterer, Germany according to art. 22 paragraph 1 sentence 1 fi gure 6

WpHG.

II. The share of SECHEP INVESTMENTS HOLDING II S.à r.l. and of GOETHE INVESTMENTS

S.à r.l. in the voting rights of ALTA FIDES AG Aktiengesellschaft für Grundvermögen

exceeded each of the thresholds of 3%, 5% and 10% on 27th June 2008 and amounted

to 14.18% (which correspond to 1,000,000 voting rights) on that day. Of this 14.18%

(which correspond to 1,000,000 voting rights) have to be assigned to SECHEP INVEST-

MENTS HOLDING II S.à r.l. according to art. 22 paragraph 1 sentence 1 fi gure 1 WpHG

through ALTA FIDES Aktiengesellschaft für Grundvermögen. SECHEP INVESTMENTS

HOLDING II S.à r.l. is assigned the voting rights via the following companies which it

controls and whose share in the voting rights amounts to 3% or more: GOETHE IN-

VESTMENTS S.à r.l.

According to art. 21 paragraph 1 WpHG, Universa Krankenversicherung a. G., Nuremberg,

Germany has informed us that its share in the voting rights in ALTA FIDES AG Aktiengesell-

schaft für Grundvermögen exceeded the threshold of 5% on 26th June 2008 and that it


According to art. 21 paragraph 1 WpHG, Universa Lebensversicherung a. G., Nuremberg,

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Germany has informed us that its share in the voting rights in ALTA FIDES AG Aktiengesell-

schaft für Grundvermögen exceeded the threshold of 5% on 26th June 2008 and that it



Germany informed us that it held 3.79% of the voting rights (which correspond to 267,010

voting rights) in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart on 30th

August 2007 and that it, hence, exceeded the level of 3% of the voting rights in ALTA FIDES

AG Aktiengesellschaft für Grundvermögen, Stuttgart.

CORESTATE German Residential Limited, St. Peter Port, Guernsey, Great Britain, has in-

formed us that it still held fi nancial instruments granting it the right to acquire shares in ALTA

FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart accounting for 11.32% of the

voting rights (797,750 voting rights) on 15th January 2008. On account of the exercise of

fi nancial instruments, however, it did not reach the thresholds of 25%, 20% and 15% of the

voting rights in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart with regard

to the fi nancial instruments on that day. The fi nancial instruments which it still holds in-

directly have the following exercise period: 21st December 2007 until 31st December 2009.


companies which it controls: YANWORTH HOLDINGS LIMITED, Gibraltar, SECHEP

INVESTMENTS HOLDINGS S. à r. l., Luxembourg and Zweite REO-Real Estate Opportuni-

ties GmbH, Frankfurt am Main, Germany.

YANWORTH HOLDINGS LIMITED, Gibraltar, has informed us that it still held fi nancial

instruments granting it the right to acquire shares in ALTA FIDES AG Aktiengesellschaft für

Grundvermögen, Stuttgart accounting for 11.32% of the voting rights (797,750 voting rights)

on 15th January 2008. On account of the exercise of fi nancial instruments, however, it did not

reach the thresholds of 25%, 20% and 15% of the voting rights in ALTA FIDES AG Aktienge-

sellschaft für Grundvermögen, Stuttgart with regard to the fi nancial instruments on that day.

The fi nancial instruments which it still holds indirectly have the following exercise period:

21st December 2007 until 31st December 2009.


companies which it controls: SECHEP INVESTMENTS HOLDINGS S. à r. l., Luxembourg and

Zweite REO-Real Estate Opportunities GmbH, Frankfurt am Main, Germany.

SECHEP INVESTMENTS HOLDINGS S. à r. l., Luxembourg, has informed us that it still held

fi nancial instruments granting it the right to acquire shares in ALTA FIDES AG Aktiengesell-

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schaft für Grundvermögen, Stuttgart accounting for 11.32% of the voting rights (797,750

voting rights) on 15th January 2008. On account of the exercise of fi nancial instruments,

however, it did not reach the thresholds of 25%, 20% and 15% of the voting rights in

ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart with regard to the fi nancial

instruments on that day.




companies which it controls: Zweite REO- Real Estate Opportunities GmbH, Frankfurt am

Main, Germany.

Zweite REO-Real Estate Opportunities GmbH, Frankfurt am Main, Germany has informed

us that it still held fi nancial instruments granting it the right to acquire shares in ALTA FIDES

AG Aktiengesellschaft für Grundvermögen, Stuttgart accounting for 11.32% of the voting

rights (797,750 voting rights) on 15th January 2008. On account of the exercise of fi nancial

instruments, however, it did not reach the thresholds of 25%, 20% and 15% of the voting

rights in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart with regard to the

fi nancial instruments on that day.



CORESTATE German Residential Limited, St. Peter Port, Guernsey, Great Britain has in-

formed us according to art. 25 paragraph 1 sentence 1 WpHG that it indirectly held fi nan-

cial instruments granting the right to acquire shares in ALTA FIDES AG Aktiengesellschaft

für Grundvermögen, Stuttgart accounting for 25.50% of the voting rights (1,797,750 voting

rights) on 21st December 2007. On this day, the company would have exceeded the thresh-

olds of 5%, 10%, 15%, 20%, 25% of the voting rights in ALTA FIDES AG Aktiengesellschaft


The exercise period for a part of the fi nancial instruments granting the right to acquire

11.32% of the voting rights (797,750 voting rights) in ALTA FIDES AG Aktiengesellschaft für

Grundvermögen, Stuttgart, comprises the following period: 21st December 2007 until 31st

December 2009.

The due date for a part of the fi nancial instruments granting the right to acquire 14.18% of

the voting rights (1,000,000 voting rights) in ALTA FIDES AG Aktiengesellschaft für Grundvermö-



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companies which it controls: YANWORTH HOLDINGS LIMITED, Gibraltar, SECHEP INVEST-

MENTS HOLDING S. à r. l., Luxembourg, Zweite REO Real Estate Opportunities GmbH, Frank-

furt am Main, Germany.

According to art. 25 paragraph 1 sentence 1 WpHG, YANWORTH HOLDINGS LIMITED, Gibral-

tar, has informed us that it indirectly held fi nancial instruments granting the right to acquire shares

in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart accounting for 25.50% of the

voting rights (1,797,750 voting rights) on 21st December 2007. On that day, the company would

have exceeded the thresholds of 5%, 10%, 15%, 20%, 25% of the voting rights in ALTA FIDES

AG Aktiengesellschaft für Grundvermögen, Stuttgart on account of the fi nancial instruments.






gen, Stuttgart, is the 15th of January 2008. In this context, the fi nancial instruments held by

the company are held via the following companies which it controls: SECHEP INVESTMENTS

HOLDING S. à r. l., Luxembourg, Zweite REO-Real Estate Opportunities GmbH, Frankfurt am

Main, Germany.

According to art. 25 paragraph 1 sentence 1 WpHG, SECHEP INVESTMENTS HOLDINGS S. à

r. l., Luxembourg, has informed us that it indirectly held fi nancial instruments granting it the right

to acquire shares in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart accounting

for 25.50% of the voting rights (1,797,750 voting rights) on 21st December 2007. On that day,

the company would have exceeded the thresholds of 5%, 10%, 15%, 20%, 25% of the voting

rights in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart on account of the

fi nancial instruments.







In this context, the fi nancial instruments held by the company are held via the following companies

which it controls: Zweite REO Real Estate Opportunities GmbH, Frankfurt am Main, Germany.

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GmbH, Frankfurt a. M., has informed us that it indirectly held fi nancial instruments granting


accounting for 25.50% of the voting rights (1,797,750 voting rights) on 21st December 2007. On

that day, the company would have exceeded the thresholds of 5%, 10%, 15%, 20%, 25% of

the voting rights in ALTA FIDES AG Aktiengesellschaft für Grundvermögen, Stuttgart on account

of the fi nancial instruments.








St. Peter Port, Guernsey, Great Britain, SECHEP INVESTMENTS HOLDING S.à r.l., Luxembourg,

Zweite REO Real Estate Opportunities GmbH, Frankfurt am Main, Germany and Yanworth

Holdings Limited, Gibraltar have informed us that their share in the voting rights in ALTA FIDES

AG Aktiengesellschaft für Grundvermögen exceeded each of the thresholds of 3%, 5%, 10%,

15%, 20% and 25% on 21st December 2007 and amounted to 25.50% (which correspond to

1,797,750 voting rights) each on that day.

Of this 14.18% of the voting rights (which correspond to 1,000,000 voting rights) have to be

assigned to CORESTATE German Residential Limited, SECHEP INVESTMENTS HOLDING S.à r.l.,

Luxembourg, and Yanworth Holdings Limited, Gibraltar according to art. 22 paragraph 1

sentence 1 fi gure 5 in conjunction with sentence 2 WpHG and to Zweite REO Real Estate

Opportunities GmbH, Frankfurt am Main, Germany through Mr. Norbert Ketterer, Germany

according to art. 22 paragraph 1 sentence 1 fi gure 5 WpHG.

A further 11.32% of the voting rights (which correspond to 797,750 voting rights) have to


S. à r. l., Luxembourg and Yanworth Holdings Limited, Gibraltar, according to art. 22 paragraph


Opportunities GmbH, Frankfurt am Main through Mr. Norbert Ketterer, Germany according

to art. 22 paragraph 1 sentence 1 fi gure 6 WpHG.

According to art. 21 paragraph 1 WpHG, CORESTATE Capital AG, Zurich, Switzerland,

Corestate Capital Beteiligungs GmbH, Frankfurt am Main, Germany and Mr. Ralph Winter,

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Appenzell, Switzerland have informed us that their share in the voting rights in ALTA FIDES AG

Aktiengesellschaft für Grundvermögen each exceeded the threshold of 3% and that said share

amounted to 3.50% (which correspond to 246,750 voting rights) on that day. Of this 3.50%

(246,750 voting rights) each have to be assigned to CORESTATE Capital AG, Zurich, Switzer-

land and Mr. Ralph Winter, Appenzell, Switzerland according to art. 22 paragraph 2 sentence

1 fi gure 6 in conjunction with sentence 2 WpHG and to Corestate Capital Beteiligungs GmbH,

Frankfurt am Main, Germany, through Mr. Norbert Ketterer, Germany according to art. 22

paragraph 1 sentence 1 fi gure 6 WpHG.

6.3 Members of the Management Board and their compensations

During the 2008 fi nancial year, the total compensation of the Management Board amounted

to EUR 480,000. The compensation of the Management Board had the following detailed

structure:

Mr. Norbert Ketterer was a member of the management board of the subsidiary CAMPUS

REAL ESTATE AG and a member of the supervisory board of PROFECTO AG.

Mr. Christian Dunkelberg was a member of the management board of the subsidiary

CAMPUS REAL ESTATE AG.

Fringe benefi ts or components with long-termMember of the Fixed Variable Total Pension incentivising Management Board compensation compensation compensation commitments effect

Nobert Ketterer, until 190,000 0 190,000 0 015th October 2008 (230,000) (0) (230,000) (0) (0)

Christian Dunkelberg, 180,000 0 180,000 0 0until 15th October 2008 (102,000) (0) (102,000) (0) (0)

Rainer Fuchs, until 110,000 0 110,000 0 030th November 2008 (126,000) (0) (126,000) (0) (0)

Jan W. Giessler, from 0 0 0 0 016th October 2008

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

(previous year)

Compensation in EUR

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Mr. Rainer Fuchs held a subscription right regarding shares in the Company, which was not

exercised, however (cf. section 9.6).

Furthermore, Mr. Jan W. Giessler is a member of the management board of the subsidiary

CAMPUS REAL ESTATE AG and PROFECTO AG.


Management Board.

With regard to further explanations on the compensation for the Management Board re-

ference is made to the compensation report contained in the summary of the Management

Report (section 5).

6.4 Members of the Supervisory Board and their emoluments

During the past fi nancial year 2008, the Supervisory Board had the following members:

Daniel Schoch, graduate in business administration, since 21st October 2008 (chairman

since 23rd October 2008)

Mr. Schoch is a member of the management board of CORESTATE CAPITAL AG, Zug,

Switzerland. Mr. Schoch is a member of the following supervisory boards which have to

be established according to the applicable law or of comparable national or international

controlling boards of commercial enterprises:

– Roth & Rau Aktiengesellschaft, Hohenstein-Ernstthal



Matthias Sprenker, Managing Director of SECHEP INVESTMENTS HOLDING S.à r.l.,

Luxembourg, since 19th December 2008

Mr. Sprenker is a member of the following supervisory boards which have to be estab-

lished according to the applicable law or of comparable national or international controlling

boards of commercial enterprises:



Martin Hitzer, lawyer, since 19th December 2008

Mr. Hitzer is a member of the following supervisory boards which have to be established


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– Fette GmbH, Schwarzenbek

Prof. Dr. Willi Alda, merchant, chairman, until 20th October 2008

Mr. Alda is a member of the following supervisory boards which have to be established



– Chairman of the advisory board of the German Property Database (International

Property Data Bank)

– Member of the board of trustees and advisory board of the foundation “Die lebendige

Stadt“

– Chairman of the advisory board of the trustees of the Urban Land Institute

Natalie Wagner, merchant, deputy chairperson, until 19th December 2008

Karl-Georg Wentz, merchant, until 19th December 2008

Subject to the precondition that the general meeting of ALTA FIDES AG approves the

emoluments for the members of the Supervisory Board to the amount outlined below, the

total emoluments for the Supervisory Board for the fi nancial year 2008 amount to in total

EUR 50,000. In this context, the emoluments for the Supervisory Board have the following

detailed structure:

Prof. Dr. Willi Alda receives annual emoluments to the amount of EUR 10,000 and a refund

of expenses for his activity as a member of the supervisory board of PROFECTO AG, a

subsidiary of ALTA FIDES AG. Mr. Norbert Ketterer does not receive any separate remuner-

ation for his work as the chairman of the supervisory board of PROFECTO AG.


supervisory board.

With regard to further explanations on the emoluments for the Supervisory Board reference

is made to the compensation report contained in the Summary of the Management Report

(chapter 5).

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Member of the Supervisory Board Fixed remuneration per annum (in EUR)

Prof. Dr. Willi Alda, until 20th October 2008 10,000


Nathalie Wagner, until 19th December 2008 10,000


Karl-Georg Wentz, until 19th December 2008 10,000


Daniel Schoch, from 16th October 2008 20,000

Matthias Sprenker, from 19th December 2008 0

Martin Hitzer, from 19th December 2008 0

6.5 Declaration according to art. 161 AktG

In April 2008, the Management Board and the Supervisory Board of ALTA FIDES Aktienge-

sellschaft für Grundvermögen jointly issued the declaration of compliance according to art.

161 AktG regarding the recommendations by the German Corporate Governance Codex in

the version of 14th June 2007, which will probably be re-issued in April 2009. The form and

contents of the declarations of compliance are permanently accessible for the shareholders

on the Company’s website (www.altafi des.de/sites/ir_corpgov.html).

6.6 Consolidated fi nancial statement

The Company is included in the consolidated fi nancial statement of ALTA FIDES AG which

has to be prepared according to art. 315 a HGB (smallest scope of consolidation). The

consolidated fi nancial statement is available at the registered offi ces of the Company and/or

from the operator of the German Electronic Federal Gazette.

Furthermore, the Company is included in the consolidated fi nancial statement of

CORESTATE German Residential Limited, St. Peter Port, Guernsey to be prepared in

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accordance with the statutory provisions of Guernsey (Great Britain) (largest scope of

consolidation). Said fi nancial statement is prepared in accordance with the International

Financial Reporting Standards.

6.7 Proposal regarding the appropriation of earnings

The Management Board proposes to the general meeting that the full balance sheet loss as

of 31st December 2008 to the amount of EUR 14,956,275.69 be brought forward to new

account.

6.8 Publication

The annual fi nancial statement of ALTA FIDES AG, which was audited by KPMG AG Wirt-

schaftsprüfungsgesellschaft, Frankfurt am Main is published in the German Electronic

Federal Gazette.


Jan W. Giessler Rudolf J. Bartsch


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Composition and development of the fi xed assets

Capital share in % 01/01/2008 Additions Disposals 31/12/2008

1 Intangible assetsComputer software 2,319.49 1,031.77 0.00 3,351.26 2,319.49 1,031.77 0.00 3,351.26

2 Property, plant and equipmentLeipzig, Geibelstraße (land) 57,226.85 0.00 0.00 57,226.85Leipzig, Geibelstraße (building) 419,663.53 0.00 0.00 419,663.53Leipzig, Demmeringstraße (land and building) 50,971.70 0.00 0.00 50,971.70Leipzig, Demmeringstraße (building) 586,174.57 0.00 0.00 586,174.57Leipzig, Holbeinstraße 44 (land) 71,656.35 0.00 0.00 71,656.35Leipzig, Holbeinstraße 44 (building) 724,525.29 0.00 0.00 724,525.29Leipzig, Schwägrichenstraße 11 (building) 2,422.30 0.00 0.00 2,422.30Leipzig, Schwägrichenstraße 11 (land) 158,206.43 0.00 0.00 158,206.43Furniture and fi xtures 259,118.87 32,771.96 2,758.48 289,132.35 2,329,965.89 32,771.96 2,758.48 2,359,979.37

3 Financial assetsShares in affi liated companiesCAMPUS REAL ESTATE AG 97.84 4,300,000.00 611,642.94 0.00 4,911,642.94PROFECTO AG 100.00 4,050,000.00 0.00 0.00 4,050,000.00IVB Menckestraße 39 GmbH & Co. KG 100.00 470,231.40 0.00 0.00 470,231.40AF Marienhöhe GmbH & Co. KG 100.00 421,274.21 0.00 0.00 421,274.21AF ATHENA GmbH & Co. KG 94.90 0.00 47,450.00 0.00 47,450.00AF Trading GmbH 100.00 10,000.00 25,000.00 0.00 35,000.00AF 12. Vermögensverwaltung GmbH 100.00 26,127.75 25,000.00 20,775.81 30,351.94ER_C@MPUS GmbH & Co KG 55.00 30,227.75 0.00 0.00 30,227.75AF Röntgenstraße 12 GmbH 100.00 30,694.52 25,000.00 27,574.17 28,120.35AF 5. Vermögensverwaltung GmbH 100.00 148,000.00 25,000.00 145,012.60 27,987.40AF 14. Vermögensverwaltung GmbH 100.00 50,000.00 25,000.00 47,025.80 27,974.20AF 11. Vermögensverwaltung GmbH 100.00 1,821,883.88 25,000.00 1,819,883.88 27,000.00AF Ferdinand-Lasalle-Straße 16 GmbH 100.00 84,727.00 25,000.00 82,727.00 27,000.00AF Property GmbH 100.00 3,274.21 25,000.00 1,274.21 27,000.00CAMPUS 1. Verwaltung GmbH 100.00 0.00 27,000.00 0.00 27,000.00AF Schloßgut GmbH 100.00 194,026.15 25,000.00 192,295.15 26,731.00AF 15. Vermögensverwaltung GmbH & Co. KG 51.00 25,500.00 0.00 0.00 25,500.00AF 16. Vermögensverwaltung GmbH 100.00 2,000.00 25,000.00 1,707.93 25,292.07AF Schloßresidenz GmbH 100.00 469,204.23 25,000.00 469,204.23 25,000.00AF Seeresidenz Markkleeberg GmbH 100.00 296,545.53 25,000.00 296,545.53 25,000.00AF Leibnizstraße 11 GmbH 100.00 169,351.03 25,000.00 169,351.03 25,000.00IVB Immobilien Vermögen und Beteiligungs GmbH 100.00 25,000.00 0.00 0.00 25,000.00IVB Immobilien Vermittlung und Beratung GmbH 94.23 24,500.00 0.00 0.00 24,500.00IVB Coppistraße 39 GmbH & Co. KG 0.00 20,000.00 0.00 20,000.00 0.00 12,672,567.66 1,011,092.94 3,293,377.34 10,390,283.26

15,004,853.04 1,044,896.67 3,296,135.82 12,753,613.89

Annex 1 to the Notes

Costs of acquisition in EUR

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01/01/2008 Depreciations Disposals 31/12/2008 31/12/2008 31/12/2007

259.49 1,031.77 1,291.26 2,060.00 2,060.00 259.49 1,031.77 0.00 1,291.26 2,060.00 2,060.00

0.00 0.00 0.00 0.00 57,226.85 57,226.85 41,969.53 8,394.00 0.00 50,363.53 369,300.00 377,694.00 0.00 0.00 0.00 0.00 50,971.70 50,971.70 58,619.57 11,724.00 0.00 70,343.57 515,831.00 527,555.00 0.00 0.00 0.00 0.00 71,656.35 71,656.35 72,455.29 14,491.00 0.00 86,946.29 637,579.00 652,070.00 0.00 0.00 0.00 0.00 2,422.30 2,422.30 9,432.43 3,101.00 0.00 12,533.43 145,673.00 148,774.00 106,504.37 39,543.96 460.48 145,587.85 143,544.50 152,614.50 288,981.19 77,253.96 460.48 365,774.67 1,994,204.70 2,040,984.70

0.00 0.00 0.00 0.00 4,911,642.94 4,300,000.00 0.00 0.00 0.00 0.00 4,050,000.00 4,050,000.00 0.00 0.00 0.00 0.00 470,231.40 470,231.40 0.00 0.00 0.00 0.00 421,274.21 421,274.21 0.00 0.00 0.00 0.00 47,450.00 0.00 0.00 0.00 0.00 0.00 35,000.00 10,000.00 0.00 0.00 0.00 0.00 30,351.94 26,127.75 0.00 0.00 0.00 0.00 30,227.75 30,227.75 0.00 0.00 0.00 0.00 28,120.35 30,694.52 0.00 0.00 0.00 0.00 27,987.40 148,000.00 0.00 0.00 0.00 0.00 27,974.20 50,000.00 0.00 0.00 0.00 0.00 27,000.00 1,821,883.88 0.00 0.00 0.00 0.00 27,000.00 84,727.00 0.00 0.00 0.00 0.00 27,000.00 3,274.21 0.00 0.00 0.00 0.00 27,000.00 0.00 0.00 0.00 0.00 0.00 26,731.00 194,026.15 0.00 0.00 0.00 0.00 25,500.00 25,500.00 0.00 0.00 0.00 0.00 25,292.07 2,000.00 0.00 0.00 0.00 0.00 25,000.00 469,204.23 0.00 0.00 0.00 0.00 25,000.00 296,545.53 0.00 0.00 0.00 0.00 25,000.00 169,351.03 0.00 0.00 0.00 0.00 25,000.00 25,000.00 0.00 0.00 0.00 0.00 24,500.00 24,500.00 0.00 0.00 0.00 0.00 0.00 20,000.00 0.00 0.00 0.00 0.00 10,390,283.26 12,672,567.66

289,240.68 78,285.73 460.48 367,065.93 12,386,547.96 14,715,612.36

Cumulated depreciations in EUR Book value in EUR

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Auditor’s report

We have audited the annual fi nancial statement consisting of the balance sheet, the profi t

and loss account and the notes to the fi nancial statement and the management report on

the situation of the Company and of the Group for the fi nancial year from 1st January to

31st December 2008 including the accounting of ALTA FIDES Aktiengesellschaft für Grund-

vermögen, Stuttgart. Accounting and the preparation of the fi nancial statement and the

management report in accordance with the provisions of the German Commercial Code

(HGB) lie within the responsibility of the legal representatives of the Company. It is our task

to express an opinion on the fi nancial statement including accounting and the management

report on the basis of the audit carried out by us.

We conducted our audit of the annual fi nancial statement in accordance with art. 317 HGB

and in compliance with the generally accepted German auditing standards established

by the Institute of Public Auditors in Germany (IDW). According to those standards, the

audit has to be planned and executed in such a manner that inaccuracies and violations

materially affecting the presentation of the assets, fi nancial and profi t situation to be

conveyed by the fi nancial statement in compliance with the accounting standards to be

used and by the management report are discerned with suffi cient certainty. Knowledge of

the business activities and the economic and legal environment of the Group as well as

expectations as to possible misstatements are taken into account in the determination of

the audit procedures. The effectiveness of the accounting-related internal control system

and the evidence supporting the disclosures in the fi nancial statement and the management

report are primarily examined on the basis of random tests within the framework of the

audit. The audit comprises the assessment of the accounting principles applied and the

essential estimates by the Management Board as well as an evaluation of the overall

presentation of the fi nancial statement and the management report. We believe that our

audit provides a suffi ciently reliable basis for our opinion.

Our audit has not given rise to any objections.

In our opinion based on the fi ndings of our audit, the annual fi nancial statement complies

with the statutory provisions and conveys a true and fair view of the assets, fi nancial and

profi t situation of the Company in line with the actual situation in accordance with the

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methods of adequate and orderly accounting. The management report is consistent with the

annual fi nancial statement and, as a whole, provides an adequate view of the Company’s

situation and appropriately presents the opportunities and risks entailed in the future

development of the Company.

Frankfurt am Main, 27th April 2009

KPMG AG Wirtschaftsprüfungsgesellschaft

(formerly: KPMG Deutsche Treuhand-Gesellschaft

Aktiengesellschaft Wirtschaftsprüfungsgesellschaft)

Dr. Lemnitzer Steinborn

Auditor Auditor

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The annual report of ALTA FIDES AG contains statements referring to the future which are

based on current assumptions and evaluations. These statements should not be considered

a guarantee that these events will materialize.

This annual report is also available in German. In case of doubt, the German annual report

shall prevail.

An online version of the German and of the English annual report is available on the internet

at www.altafi des.de/sites/ir_fi nanzberichte.html.

Published by:

© 2009

ALTA FIDES Aktiengesellschaft für Grundvermögen

Königstraße 10c, 70173 Stuttgart

Phone: +49 (0) 711 222 54-150

Fax: +49 (0) 711 222 54-318

info@altafi des.de

www.altafi des.de

Layout and setting:

eilmes & staub

DESIGN & VISIONEN GmbH, Potsdam

Print:

MaXxPrint GmbH, Leipzig

Photography:

© iStockphoto:Title: djFoss, page 11: Entienou, page 12: Cimmerianpage 15: arsenik, page 16: sumnersgraphicsinc

© ALTA FIDES AG:Other photographs

Imprint

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group report responsibility statement annual accounts alta fi des aggroup report responsibility statement annual accounts alta fi des aggroup report fi nancial statement responsibility statement

FINANCIAL CALENDAR 2009

30 April 2009 – Publication of fi scal year 2008 annual fi nancial report19 May 2009 – Interim report January to March 200923 June 2009 – General Meeting26 August 2009 – Publication of half year fi nancial report January to June 200919 November 2009 – Interim report January to September 2009

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annual report alta fides ag 2008

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