Dear Shareholders,
In the 2006 business year the Supervisory Board and Management Board held open and intensive discussions at regular intervals to consider the company‘s economic position. They also deliberated on strategic measures, investments and major events. For this purpose the Management Board notified the Supervisory Board orally and in writing in all the meetings, as part of the continuous reporting process, on the business and financial position, personnel changes, and the investment and acquisition plans of CA Immo International and its subsidiaries. In addition, the Chairwoman of the Supervisory Board remained in regular contact with her counterpart on the Management Board in order to discuss, in particular, strategy, the pattern of business and risk management.
The Supervisory Board performed all the duties prescribed by law and the Articles of Association, and monitored and advised on the conduct of business by the Management Board. Each member of the Supervisory Board complied with the statutory provisions governing minimum attendance. Besides the meetings, some resolutions were adopted by circulation. The committees did not need to be convened. Details concerning the individual members‘ responsibilities and the make-up of the committees are contained in the corporate governance report.
Among the key issues addressed by the Supervisory and Management Boards was the future strategic orientation of CA Immo International, which aims to reinforce the focus on activities in Eastern Europe and pave the way for entering the Serbian and Russian markets. In this context, the options for raising funds from institutional investors were considered, and the decision in favour of an IPO was taken. After the successful initial public offering in October 2006, the meeting on 6 December 2006 adopted resolutions to establish a fourth office, in Belgrade. It also approved the participation in UBM Realitätenentwicklung AG, the Vienna real estate development company, which was finalised at the turn of the year. Further subjects of discussion were acquisitions in Prague, Warsaw, Serbia and Moscow, and development activities to be conducted by the recently established CA Immo New Europe property fund, a project development fund under Luxembourg law, in which
CA Immo International holds a 51% interest. In this connection the Supervisory Board regularly received reports on the economic and structural changes taking place in the target markets. On several occasions it also discussed with the Management Board the opportunities and risks arising from the vigorous development of these markets, especially those in Eastern and South East Europe, as well as the CIS. The pattern of revenues and earnings, and the company‘s financial position, consistently formed part of the Supervisory Board‘s deliberations.
In the run-up to the IPO, the tenure of two Management Board members, namely Ing. Gerhard Engelberger and Mag. Wolfhard Fromwald, was extended, and Dr. Bruno Ettenauer was appointed Chairman of the Management Board. The extraordinary General Meeting on 21 September 2006 elected Mag. DDr. Regina Prehofer, Dr. Alarich Fenyves and Dr. Ernst Nonhoff to the Supervisory Board. Two members, Dkfm. Gerhard Nidetzky and Mag. Reinhard Madlencnik were reappointed, and Univ.-Prof. Dr. Christian Nowotny retired from the Supervisory Board.
CA Immo International has undertaken to comply with the rules of the Austrian Corporate Governance Code. The Supervisory Board fulfilled the duties and responsibilities prescribed by the Code and, in one meeting, discussed in detail the company‘s compliance with its provisions. The Articles of Association and internal rules of procedure are continuously being harmonised with the Code. With respect to the Compliance Decree for Issuers issued by the Financial Market Authority, the annual review of CA Immo‘s compliance with the Code was presented and explained to the Supervisory Board. In the 2006 business year the regular examinations conducted by the compliance officers did not give rise to any objections.
The annual financial statements for 2006 were examined in the meeting of the audit committee on 19 March 2007. During its examination of the annual financial statements of CA Immo International, the consolidated financial statements, the management report and the Management Board‘s proposal for the distribution of profit, the committee consulted the auditor. Before submitting its proposal on the appointment of the auditor, the committee obtained a peer review and closely examined the auditor‘s management letter. It reported its findings to the Supervisory Board.The committee also discussed and reported to the Supervisory Board on the implementation of risk management by CA Immo International.
KPMG Wirtschaftsprüfungs- und Steuerberatungs GmbH audited and attached its unqualified opinion to the annual financial statements and management report of CA Immo International, and to the 2006 consolidated financial statements according to IFRS. In compliance with Section 96 of the Austrian Joint Stock Companies Act (AktG), the audit committee discussed and examined the annual financial statements, management report and Group management report in the presence of the auditor and Management Board. Neither the conclusive examination by the auditor, nor the internal examination by the audit committee gave rise to any objections. The Supervisory Board has approved the annual financial statements, which were thus adopted according to Section 125 Subsection 2 AktG. The Supervisory Board agrees with the Management Board‘s proposal for the distribution of profit.
The Supervisory Board thanks the senior management an the employees for their commitment throughout the year which, in view of the successful IPO, represented a great challenge for everyone. It wishes the company much continued success.
Vienna, March 2007
For the Supervisory Board
Mag. DDr. Regina Prehofer
Chairwoman