Swietelsky Baugesellschaft m.b.h.

Transcription

1 Swietelsky Baugesellschaft m.b.h. (Incorporated as a company with limited liability in the Republic of Austria) Offering of EUR 50,000,000 Perpetual Junior Subordinated Fixed to Floating Rate Bonds Swietelsky Baugesellschaft m.b.h. (Swietelsky or the Issuer or the Company) will issue EUR 50,000,000 perpetual junior subordinated fixed to floating rate bonds with a denomination of EUR 1,000 each (the Bonds) on 16 November 2007 at an issue price of per cent of the principal amount of such Bonds (the Offering). The volume of the Offering may be decreased or increased by the Issuer until the Issue Date up to a total amount of EUR 70,000,000. The Bonds are perpetual and the holders of the Bonds (the Bondholders) shall have no right to call for their redemption. The Bonds constitute unsecured and perpetual junior subordinated obligations of the Issuer and in the event of the dissolution, liquidation or insolvency of the Issuer or composition or other proceedings for the avoidance of insolvency of the Issuer, the obligations under the Bonds will be subordinated to all subordinated and unsubordinated obligations of the Issuer, except as otherwise required by mandatory statutory law. In the event of the dissolution, liquidation or insolvency of the Issuer or composition or other proceedings for the avoidance of insolvency of the Issuer, no payments will be made under the Bonds until all claims of all unsubordinated and subordinated creditors shall first have been satisfied in full. Application has been made to the Vienna Stock Exchange for the Bonds to be admitted to the Second Regulated Market (Geregelter Freiverkehr). The Bonds will be governed by Austrian law. The Issuer may request the Austrian Financial Market Authority (Finanzmarktaufsichtsbehörde, the FMA) to provide competent authorities in other member states within the European Economic Area with a certificate of approval attesting that this Prospectus has been drawn up in accordance with the Austrian Capital Market Act (Kapitalmarktgesetz), which implements the Directive 2003/71/EC of the European Parliament and the Council of 4 November 2003 (Prospectus Directive) into Austrian law. Prospective investors should be aware that an investment in the Bonds involves risks and that, if certain risks, in particular those described in the chapter "Risk Factors" materialise, the investors may lose all or a very substantial part of their investment. A prospective investor should conduct its own thorough analysis (including its own accounting, legal and tax analysis) prior to deciding whether to invest in the Bonds as any evaluation of the suitability for an investor of an investment in the Bonds depends upon a prospective investor's particular financial and other circumstances. This Prospectus does not constitute an offer to sell, or the solicitation of an offer to buy Bonds in any jurisdiction where such offer or solicitation is unlawful. In particular, the Bonds have not been and will not be registered under the United States Securities Act of 1933 (the Securities Act). This Prospectus constitutes a prospectus pursuant to, and is in compliance with the requirements of, the Prospectus Directive. It has been filed with the FMA, has been approved by the FMA and has been published by making it available in printed form, free of charge, to the public at the registered office of the Issuer, Edlbacherstraße 10, 4020 Linz, and at the specified office of the Paying Agent. Erste Bank der oesterreichischen Sparkassen AG Sole Lead Manager Prospectus dated 29 October 2007

2 RESPONSIBILITY STATEMENT Swietelsky, with its seat in Linz and its business address at Edlbacherstraße 10, 4020 Linz, Austria, is registered with the Austrian companies register under registration number FN 83175t, assumes responsibility for the information contained in this Prospectus and hereby declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus for which it is responsible is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import. The Issuer further confirms that (i) this Prospectus contains all information with respect to the Issuer and to the Bonds which is material in the context of the Offering, including all information which, according to the particular nature of the Issuer and of the Bonds is necessary to enable investors and their investment advisers to make an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of the Issuer and the rights attached to the Bonds; (ii) the statements contained in this Prospectus relating to the Issuer and the Bonds are in every material particular true and accurate and not misleading; (iii) there are no other facts in relation to the Issuer or the Bonds the omission of which would, in the context of the Offering, make any statement in the Prospectus misleading in any material respect and (iv) reasonable enquiries have been made by the Issuer to ascertain such facts and to verify the accuracy of all such information and statements. 2

3 NOTICE This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the Bonds offered hereby and does not constitute an offer to sell or a solicitation of an offer to buy any Bonds offered hereby to any person in any jurisdiction in which it is unlawful to make any such offer or solicitation to such person. Neither the delivery of this Prospectus nor any sale made hereby shall under any circumstances imply that there has been no change in the affairs of Swietelsky or its affiliated companies (together the Swietelsky Group or the Group) or that the information contained herein is correct as of any date subsequent to the earlier of the date hereof or any date specified with respect to such information; irrespective of the obligation of the Issuer to mention in a supplement to the Prospectus every significant new factor, material mistake or inaccuracy relating to the information included in the Prospectus which is capable of affecting the assessment of the securities and which arises or is noted between the time when the Prospectus is approved and the final closing of the offer to the public or, as the case may be, the time when admission to listing on a regulated market is granted (in accordance with 6 of the Austrian Capital Market Act (Kapitalmarktgesetz)). This Prospectus has been prepared by the Issuer in connection with the Offering solely for the purpose of enabling prospective investors to consider the purchase of the Bonds. Reproduction and distribution of this Prospectus or disclosure or use of the information contained herein for any purpose other than considering an investment in the Bonds is prohibited. The information contained in this Prospectus has been provided by Swietelsky and other sources identified herein. No representation or warranty, explicit or implied, is made by the Sole Lead Manager as to the accuracy or completeness of the information set forth herein and nothing contained in this Prospectus is, or shall be relied upon as a promise or representation, whether as to the past or the future. No person has been authorised to give any information or to make any representation not contained in this Prospectus in connection with the Offering and, if given or made, any such information or representation should not be relied upon as having been authorised by Swietelsky or the Sole Lead Manager. The contents of this Prospectus are not to be construed as legal, business or tax advice. Each prospective investor should consult its own lawyer, financial adviser or tax adviser for legal, financial or tax advice. This document comprises a Prospectus for the public offering of the Bonds, issued by Swietelsky and for the admission to listing of the Bonds on the Second Regulated Market (Geregelter Freiverkehr) of the Vienna Stock Exchange. This document has been prepared in accordance with Commission Regulation (EC) No 809/2004 of 29 April 2004, as amended, and conforms to the requirements of the Austrian Capital Market Act, as amended, and the Austrian Stock Exchange Act (Börsegesetz), as amended. This Prospectus has been approved as a Prospectus by the FMA and has been filed with the Notification Office (Meldestelle) at Oesterreichische Kontrollbank Aktiengesellschaft in accordance with the Austrian Capital Market Act. This Prospectus will be filed as a Listing Prospectus (Börseprospekt) with the Vienna Stock Exchange. 3

4 The Bonds offered hereby have not been and will not be registered under the Securities Act or with any authority of any state of the US, or the applicable securities laws of Australia, Canada, Japan and the United Kingdom, and may not be offered or sold in the US or to, or for the account of, any US persons or to any person resident in Australia, Canada, Japan, the United Kingdom and the US. This Prospectus contains statements under the captions "Summary of the Prospectus", "Risk Factors", and elsewhere which are, or may be deemed to be, "forward-looking statements". In some cases, these forward-looking statements can be identified by the use of forwardlooking terminology, including the words "believes", "estimates", "anticipates", "expects", "intends", "targets", "may", "will", "plans", "continue" or "should" or, in each case, their negative or other variations or comparable terminology or by discussions of strategies, plans, objectives, goals, future events or intentions. The forward-looking statements contained in this Prospectus include certain "targets". These targets reflect goals that the Issuer is aiming to achieve and do not constitute forecasts. The forward-looking statements contained in this Prospectus include all matters that are not historical facts and include statements regarding the Issuer's intentions, beliefs or current expectations concerning, among other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy and the industry and markets in which the Issuer operates. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events, and depend on circumstances, that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. Prospective investors should not place undue reliance on these forward-looking statements. Many factors could cause the actual results, performance or achievements of Swietelsky to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Some of these factors are discussed in more detail under "Risk Factors" below. Should one or more of these risks or uncertainties described in this Prospectus occur, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Prospectus as anticipated, believed, estimated or expected. The Issuer has no intention to and assumes no responsibility for updating the information contained in this Prospectus after the end of the Offering. 4

5 STABILISATION IN CONNECTION WITH THE OFFERING, ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG, (THE STABILISING MANAGER) (OR PERSONS ACTING ON ITS BEHALF) MAY OVER-ALLOT BONDS (PROVIDED THAT THE AGGREGATE PRINCIPAL AMOUNT OF BONDS ALLOTTED DOES NOT EXCEED 105 PER CENT OF THE AGGREGATE PRINCIPAL AMOUNT OF THE BONDS) OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE BONDS AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG, (OR PERSONS ACTING ON ITS BEHALF) WILL UNDERTAKE STABILISATION ACTION. ANY STABILISATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE FINAL TERMS OF THE OFFER OF THE BONDS IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE BONDS AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE BONDS. SUCH STABILISING SHALL BE IN COMPLIANCE WITH ALL LAWS, REGULATIONS AND RULES OF ANY RELEVANT JURISDICTION. 5

6 TABLE OF CONTENTS SUMMARY OF THE PROSPECTUS...7 RISK FACTORS TERMS AND CONDITIONS OF THE BONDS GENERAL INFORMATION ABOUT THE ISSUER BUSINESS OF THE ISSUER MARKETS AND SECTOR ENVIRONMENT SELECTED FINANCIAL INFORMATION OF THE ISSUER TAXATION SUBSCRIPTION AND SALE INDEX TO THE ANNEXES STATEMENT PURSUANT TO COMMISSION REGULATION (EC) NO 809/

7 SUMMARY OF THE PROSPECTUS The following summary should be read as an introduction to this Prospectus, and any decision to invest in the Bonds should be based on consideration of the Prospectus as a whole by the investor, including the risks of investing in the Bonds as set out in "Risk Factors". Civil liability will attach to Swietelsky in respect of this summary of the Prospectus, but only if it is misleading, inaccurate or inconsistent when read together with other parts of this Prospectus. Where a claim relating to the information contained in this Prospectus is brought before a court in a member state of the EU, the plaintiff may, under the national legislation of the state where the claim is brought, be required to bear the costs of translating this Prospectus before the legal proceedings are initiated. In the event that such legal proceedings are initiated before a court in Austria, a German translation of the Prospectus may be required, and the costs thereof will have to be borne initially by the plaintiff investor, who will be reimbursed for such costs, or parts thereof, by the other party or parties to the proceedings only if the plaintiff investor is successful in such proceedings. Words and expressions defined in "Terms and Conditions of the Bonds" shall have the same meanings in this section. Summary regarding the Issuer Issuer Swietelsky Baugesellschaft m.b.h., Edlbacherstraße 10, 4020 Linz, Austria, registered with the Austrian companies register under FN 83175t. Business Activity of the Issuer Swietelsky is active in all sectors of the construction business, including inter alia the construction of roads, bridges, tunnels, railways, commercial and residential buildings, sports and recreation facilities, plazas and public spaces, structural engineering, underground engineering and construction, including subway stations and garages. Construction in mountainous terrains, environmental technologies, as well as production of asphalt and concrete are further business areas of Swietelsky. Swietelsky and its group companies are mainly active in Austria, Germany and Italy, Great Britain as well as in the Central and South Eastern European countries. Subsidiaries are located in Austria (in all provinces), Germany, Hungary, Czech Republic, Slovakia, Poland, Croatia, Italy, Romania, Great Britain and Serbia. 7

8 Key Financials The key financials are described in detail under the caption "Selected Financial Information" (page 72 et seq). (in EUR million) 1/4/2005 to 31/3/2006 1/4/2006 to 31/3/2007 Output volume 1, ,277.1 Revenues ,183.7 Equity Cash flow (from operating activities) EBIT Margin (in %) EBT ROCE (in %) ROE (in %) EAT Source: Annual consolidated financial statements for the business years ending 31 March 2006 and 31 March 2007 prepared in accordance with IFRS; all figures provided herein have been audited or derived from audited figures. Summary regarding the Bonds Issuer Swietelsky Baugesellschaft m.b.h. Issue Size 50,000,000 Denomination EUR 1,000 Increase of the Offer Issue Price The total amount may be decreased or increased by the Issuer up to a total amount of EUR 70,000,000. The issue price of the Bonds will be. The Issue Price is expected to be between 97 per cent and 103 per cent of the principal amount. Issue Date 16 November 2007 Sole Lead Manager or Manager Reasons for the Offer and Use of Proceeds Term Ranking of the Bonds Erste Bank der oesterreichischen Sparkassen AG. The Issuer intends to use the net proceeds of the issue of the Bonds for general corporate purposes in line with its strategy and strengthening its capital base. The Bonds are perpetual and have no scheduled maturity. The Bonds will rank (i) junior to all current and future unsubordinated and subordinated liabilities of the Issuer, (ii) pari passu with each other and with any Parity Securities (as 8

9 defined in the Terms and Conditions of the Bonds) of the Issuer, and (iii) senior to the Issuer's ordinary shares and any other class of share capital, including non-voting preference shares (if any) of the Issuer. Remuneration Optional Deferral of Remuneration Subject to the limitations as described below under "Optional Deferral of Remuneration" and as described in more detail in the Terms and Conditions of the Bonds, remuneration on the Bonds accrues from and including the Issue Date up to and excluding 16 November 2012 (the Step-Up Date) at a rate of per cent p.a., payable annually in arrears on 16 November in each year, commencing on 16 November 2008 and from and including the Step-up Date at a rate equal to three-month Euribor plus per cent, payable quarterly in arrears on 16 November, 16 February, 16 May and 16 August in each year. The Issuer shall have the right to defer Remuneration Payments (as defined in the Terms and Conditions of the Bonds) on the Bonds on a Remuneration Payment Date (as defined in the Terms and Conditions of the Bonds) if none of the following events has occurred in the 12 month period immediately preceding the relevant Remuneration Payment Date: (a) (b) (c) (d) a dividend or other distribution or payment was declared or made in respect of any ordinary shares of the Issuer; a payment or other distribution has been made on any Parity Securities treated as Equity or Junior Securities treated as Equity (all such terms as defined in the Terms and Conditions of the Bonds); the Issuer or any of its subsidiaries has redeemed, repurchased or otherwise acquired any of its ordinary shares (unless this occurs in connection with any present or future stock option plan), Junior Securities or Parity Securities (all such terms as defined in the Terms and Conditions of the Bonds); and (A) the Issuer's annual audited consolidated financial statements for its most recently completed business year are determined showing a difference of Capital Expenditure less Depreciation being more than EUR 10,000,000, or (B) the Paying Agent receives a certificate from the Issuer's auditors to the effect that the condition in sub-clause (A) above is satisfied (all such terms as defined in the Terms and Conditions of the Bonds). Deferred Remuneration Payments will not bear interest. 9

10 Deferred Remuneration Payments may be paid at any time at the discretion of the Issuer and must be paid (i) immediately following a Mandatory Payment Event (which are each of the events mentioned above in (a) to (d)), (ii) on the due date for redemption of the Bonds, or (iii) upon institution of insolvency proceedings in respect of the Issuer. Redemption at the Option of the Issuer The Issuer may redeem, in whole but not in part, the Bonds on the Step-Up Date or on any Floating Remuneration Payment Date (as defined in the Terms and Conditions of the Bonds) thereafter at par plus accrued remuneration. Upon loss of tax deductibility or loss of IFRS equity treatment the Issuer may redeem the Bonds at an amount calculated as the greater of the principal amount of the Bonds and the Make- Whole Amount of the Bonds plus accrued remuneration until the date of redemption. In case of a grossing-up obligation for withholding taxes the Issuer may redeem the Bonds prior to the remuneration payment date occurring in October 2012, at par plus accrued remuneration. The Issuer shall not be entitled to redeem the Bonds if any Arrears of Remuneration remain outstanding. (all such terms as defined in the Terms and Conditions of the Bonds). Change of Control Step-Up If any person or persons, acting in concert or any person or persons acting on behalf of such person(s), at any time directly or indirectly acquire(s) more than 50 per cent of the shares of the Issuer (other than a direct or indirect acquisition of shares by a person or an entity who at the time of the Offering directly or indirectly holds a share in the Company or by a private foundation (Privatstiftung) controlled by such a person or entity), the Issuer may at its sole discretion elect to (i) obtain, within six months following the Change of Control, an Issuer's senior credit rating from one or more senior credit ratings by of either Moody's Investor Services, Inc. of at least Baa3, Standard & Poor's Rating Services a division of The McGraw-Hill Companies, Inc. of at least BBB-, or Fitch Ratings Ltd of at least BBB- or their respective successor companies and each such rating assigned as a sponsored rating by either of the Rating Agencies shall be at least "BBB-" in the case of Standard & Poor's and Fitch and "Baa3" in case of Moody's (each an "Investment Grade Rating") or (ii) redeem the Bonds, in whole but not in Part at their Early Redemption Amount (Change of Control call right). If the Issuer does not obtain a credit rating as defined above 10

11 within six months following the Change of Control and does not decide to redeem the Bonds, the rate of remuneration of the Bonds will step up by further 500bps. Taxes Negative Pledge Cross Default Paying Agent Listing Governing Law Jurisdiction International Securities Identification Number (ISIN) All payments in respect of the Bonds will be made without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by way of withholding or deduction at source by or on behalf of the Republic of Austria or any of its political subdivisions or authorities that has power to tax unless such withholding or deduction is required by law. In such event, the Issuer will pay such additional amounts as shall be necessary in order that the net amounts received by the Bondholders (as defined in the Terms and Conditions of the Bonds) after such withholding or deduction shall equal the respective amounts of principal and remuneration which would otherwise have been receivable in respect of the Bonds without such withholding or deduction, subject to customary exceptions as set out in the Terms and Conditions of the Bonds. Austrian withholding tax (Kapitalertragsteuer) does not constitute a tax for which the Issuer is obliged to pay additional amounts. The Terms and Conditions of the Bonds do not contain a negative pledge provision. The Terms and Conditions of the Bonds do not contain a cross default provision with respect to other obligations of the Issuer. Erste Bank der oesterreichischen Sparkassen AG. Application has been made to the Vienna Stock Exchange for the Bonds to be admitted to the Second Regulated Market (Geregelter Freiverkehr). The Bonds are governed by Austrian law. Non-exclusive place of jurisdiction for any legal proceedings arising under the Bonds is Vienna, Austria. AT0000A07LU5 Summary regarding Risk Factors Risk Factors The Issuer and the Bondholders are subject to a number of risks which in case they materialise could have a material adverse effect on the Issuer's business, results of operations and 11

12 financial condition and the value of the Bonds. The risks are described in detail under the caption "Risk Factors" (page 14 et seq). The risks are, inter alia, the following: Risks regarding the Issuer and its business activities: Competition in the industry Anti-trust risks Calculation and pricing of construction projects, in particular lump sum pricing risk Dependency on economic conditions Penalties and delays in payment Seasonal fluctuations Availability of skilled labour Tax risk Dependency on key personnel Expected growth Risks associated with the acquisition of other businesses Lack of controlling interest in some companies through which the Issuer conducts its business Financial and other covenants under certain credit facilities Liquidity and financing International business Use of proceeds from the issue of the Bonds Dependency on subcontractors and contractual partners Dependency on supply market Restrictive statutory provisions Liability risks and other legal risks Appropriate risk management Guarantees by the Issuer Capital market activities Dependency on certain customers, including governments funding infrastructure projects Dependency on public spending Interest rate risk Currency risk Capital requirements Risk of changing taxation Risks regarding the Bonds: The Bonds have no stated maturity Payments of remuneration under the Bonds may be deferred at the election of the Issuer Claims under the Bonds are junior subordinated Early redemption and reinvestment risk The Issuer may incur additional indebtedness ranking senior and/or pari passu with the Bonds No express events of default and cross default clauses exist Fixed rate securities are exposed to specific market risks 12

13 Floating rate securities may suffer a decline in remuneration rate Risk of changing interest rates Public market for Bonds and uncertainty of price development Illiquid markets 13

14 RISK FACTORS GENERAL Prospective investors should consider carefully the risk factors described below and the other information contained in this Prospectus prior to making any investment decision with respect to the Bonds. These issues and points raised could lead to the Issuer's results in future reporting periods being below the expectations of analysts and investors which could in turn cause a decline in price of the Bonds. It is not even possible to entirely preclude a complete loss of the capital invested. The following investment considerations and risk factors constitute the main risks in the opinion of the Issuer, however, they are not exhaustive. Words and expressions defined in "Terms and Conditions of the Bonds" shall have the same meanings in this section. If not stated otherwise in the context of the risk factors set out below, all references to the Issuer made hereinafter also include other companies of the Swietelsky Group. RISKS REGARDING THE ISSUER AND ITS BUSINESS ACTIVITIES Competition in the industry The Issuer operates in a variety of local and international markets, with many factors affecting the competitive environment which the Issuer faces in these markets. These factors include the number of competitors operating in a specific market, the pricing policies of such competitors, their market penetration, the pre-existing relationships with customers or customers' prior experience with specific contractors, a track record of being able to complete construction projects on time, financial strength (including key financial data which are prerequisites in certain bidding processes), the total production capacity serving the market, up to-date technology in terms of construction methods and equipment, market entry barriers (which are low in certain business segments of the Issuer), and the proximity of natural resources, as well as general economic conditions and demand within the market. Each of these factors or a combination thereof has a bearing on the competitive environment in the markets in which the Group operates and may have a material adverse impact on the demand for its products and services and on its market share. Also, the implementation of construction projects under certain legal structures entails additional risks on top of project completion risks. In particular, this holds true in the infrastructure business segment, where major projects are increasingly financed by public-private-partnerships ("PPP"). In the typical PPP scenario - the government assigns responsibility for constructing and operating a piece of infrastructure, such as a highway, to a company but retains regulatory control and ownership. In a particular type of PPP arrangement referred to as build-operate-transfer ("BOT"), a public sector entity grants a concession to a private company, which undertakes to construct, finance and operate a piece of infrastructure over the period of the concession before finally transferring the facility, at no cost to the government, as a fully operational facility. The return on investment in such projects depends on the duration of the concession, on the amount of usage revenues collected, the debt service costs and other factors. Thus in addition to the risk of failure of a 14

15 construction project as such, the Group is exposed to risks involved in the operation of infrastructure projects in the long term, which may materially and adversely affect its results of operations. Anti-trust risks In the construction industry's recent past, a number of anti-trust investigations by relevant authorities have been carried out on both national and international levels. The Group has been the subject of such investigations but was never indicted. This however does not guarantee that in the future, and notwithstanding the ethical standards the Group seeks to follow, that such an indictment does not take place. This risk is high in situations where the Group is participating in private and public procurement procedures among a limited number of competitors. In such situations there is always a risk that the relevant authorities, competitors, or contractors suspect the existence of illegal agreements between market participants, which restrict competition, and accordingly institute proceedings or investigations against them. In case this happens, this may have a materially adverse impact on the Issuer's reputation, business, financial condition and results of operations. It should be noted that currently a broad investigation is being conducted in Hungary on all market participants in the field of road construction. Calculation and pricing of construction projects, in particular lump sum pricing risk The calculation and pricing of projects, in particular lump sum projects and functional tendering procedure projects (funktionale Ausschreibung) expose the Issuer to significant risks. Because the margins achieved on most such projects are relatively low, a small number of such loss-making projects could have a significant effect on the Issuer's overall results. Dependency on economic conditions The financial performance of the Issuer depends heavily on infrastructure, commercial and to some degree residential construction activity and spending levels. The construction activity and spending levels vary across the Issuer's markets and generally tend to be cyclical, especially in mature economies. The construction industry is sensitive to interest rates and the economic situation of specific countries/markets as well as other factors outside the Group's control. Economic downturns may lead to recessions in the construction industry, either in individual markets or globally, and construction spending may fall even in growing economies. The Group may thus be affected significantly by global downturns or downturns in one or more of its significant markets. Penalties and delays in payment The Issuer is engaged in a large number of projects and is, in particular in the case of major projects, under an obligation to pay penalties for delayed performance. Furthermore, many major projects are subject to long decision-making processes and implementation procedures. These circumstances add to the fact that closing and thus final payments for such projects are often being delayed because of external factors which cannot be influenced by the Issuer notwithstanding the fact that the Issuer is required to provide its 15

16 services, and incur costs in advance. This skews cash flows and financial results and may adversely affect the Issuer's financial, business and operational results. Seasonal fluctuations The Issuer is subject to fluctuations in construction activity caused by the weather and seasonal influences. Construction activity decreases substantially during periods of cold weather, snow or heavy or sustained rain. Consequently, demand for construction services is significantly lower during the winter in the markets where the Issuer is active. However, even during the better weather season, high levels of rainfall can adversely impact the operations of the Issuer. Accordingly, seasonal patterns and adverse weather conditions can materially adversely affect the results of operations of the Group, particularly if such conditions occur with unusual intensity, during abnormal periods, or last longer than usual. Availability of skilled labour The construction industry in Europe faces an increasing shortage of skilled workers. In Central and Eastern Europe, particularly in Poland, the problem is amplified by the fact that since the enlargement of the EU, many construction workers have relocated to countries that offer higher wages. Consequently, competition among the construction companies for skilled labour is intense and may result in both a deterioration of quality of services provided and an increase in labour costs. Occasionally, entire teams of construction personnel decide to accept offers from competitors, which typically has a significant negative impact on the completion of affected ongoing construction projects. A continued and lasting shortage of skilled personnel, may materially and adversely affect the Group's ability to further pursue its growth strategy. Tax risk Austrian companies are subject to regular audits by the tax authorities adjusting, when necessary, the taxes due. The Austrian Federal Fiscal Procedures Act (Bundesabgabenordnung) provides in sec 148(3) that a period that has already been audited once may not be audited again, except in specifically listed cases. The last audit of the Issuer by the tax authorities included the period until March 2004 and settled all outstanding matters. The Issuer is of the opinion that complete and correct tax declarations have since been submitted, but cannot guarantee that taxes could not be assessed differently, especially concerning corporate restructuring or accrued liabilities. As a result tax statements could be changed and additional tax could be demanded which could have a material adverse effect on the Issuer's financial condition. Dependency on key personnel A key factor in the successful economic development of the Issuer is the technical know how as well as market knowledge of its management and key personnel. The loss of management personnel or key personnel could have a material adverse effect on the Issuer's business, results of operations and financial condition. This negative influence could only be compensated if within appropriate time the Issuer could hire under equivalent conditions equally qualified key personnel. 16

17 Expected growth The Issuer's management intends to foster further growth by expanding its existing fields of business. In order to be in a position to deal with this expected growth it will become necessary for the Issuer to assess new services, control and monitor activities and costs, maintain effective quality assurance and extend internal management, technical and cost control systems. In case the Issuer is not able to meet these challenges, the expected growth could have negative effects on the financial, managerial and corporate resources and on the Issuer's business, results of operations and financial condition. Risks associated with the acquisition of other businesses The Issuer's growth strategy may include the acquisition of new businesses and the integration thereof into its organisation and operations. Synergies from recent and future acquisitions may however prove to be less than originally expected, thereby diminishing their values. Also, acquisition candidates may have liabilities or adverse operating issues, which the Issuer may fail to discover prior to the acquisition. These risks could be compounded if these acquisitions are financed through additional debt, which increased the Issuer's debt burden. Furthermore, acquisition targets may either not be available or the Issuer may fail to successfully complete acquisitions due to competition from other construction companies. Consequently, the Issuer's ability to pursue its growth strategy may be impaired thereby preventing it from achieving its planned operation results. Lack of controlling interest in some of the companies through which the Issuer conducts its business The Issuer does not have a controlling interest in some of the companies through which it conducts its business and may make future investments in companies in which it will not have a controlling interest. Some key matters, such as the approval of business plans and the timing and amount of cash distributions, require the consent of the other shareholders or may be approved by the other shareholders without the consent of the Issuer. Consequently, the strategy of such companies may not always be aligned with the Issuer's interests. These and other limitations arising from investments in companies the Issuer does not control may prevent the Issuer from achieving its objectives for these investments. Furthermore, actions by minority investors whose interests are not always aligned with the Issuer's may adversely impact the operating and financial strategies planned by the Group for these companies. This could have a materially adverse impact on these companies/businesses, which in turn will affect the Issuer. Financial and other covenants under certain credit facilities The Group is party to several credit facility agreements that restrict its ability to engage in certain activities, including its ability (subject to certain exceptions) to incur liens or encumbrances, incur additional indebtedness or guarantee obligations in excess of certain thresholds, dispose of a material portion of assets, effect material acquisitions, engage in a merger with a third party or pledge accounts receivable. If the Group fails to meet the terms of these covenants or of any other restrictions contained in the credit facility agreements, an event of default could occur, which could result in the acceleration of some or all of the Group's outstanding indebtedness causing such 17

18 debt to become immediately due and payable. If such acceleration occurs, the Group may not be able to repay such indebtedness on a timely basis which could have a material adverse effect on its business operations and, in the worst case, lead to its insolvency. Liquidity and financing The Group has a significant need for liquidity and financing, which until now, were primarily covered by cash flow from operations and through bank loans and corporate bonds. Further, the Issuer has taken out various facilities permitting the issuance of letters of guarantee for various purposes (e.g., bid bonds, performance bonds). To the extent that the Issuer's cash flow from operations is insufficient, the Group may require additional financing. The Group's ability to obtain such financing on economically favourable terms in the future will depend in part upon prevailing capital markets conditions, particularly interest rate levels, conditions imposed on its business and operating results and credit ratings. If adequate funds are not available on acceptable terms or at all, the Group may not be able to make future investments, acquire businesses, pursue other opportunities or respond to competitive challenges which could have a materially adverse impact on its business. International business The Issuer and its group companies are mainly active in Austria, Germany and Italy, Great Britain as well as in the Central and South Eastern European countries. Subsidiaries are located in Austria (in all provinces), Germany, Hungary, Czech Republic, Slovakia, Poland, Croatia, Italy, Romania, Great Britain and Serbia. Due to this regional focus and planned expansions, the business activities of the Issuer are subject to higher risks which are normally associated with international business activities. Such risks arise out of the necessary restructuring and the expansion of corporate infrastructure, different legal frameworks, economic systems, concession requirements, limitations of liability as well as currency risks. These risks could have a material adverse effect on the Issuer's business, results of operations and financial condition. Use of proceeds from the issue of the Bonds The Issuer intends to use the net proceeds of the issue of the Bonds for general corporate purposes, including the strengthening of its financial position. However, the use of the funds obtained from the Offering is at the sole discretion of the Issuer's management board. If the Issuer fails to efficiently apply these funds, this could have a material adverse effect on the Issuer's business, results of operations and financial condition. Dependency on subcontractors and contractual partners As a construction company the Issuer often needs to cooperate with subcontractors and contractual partners. The Issuer is subject to the risk that some subcontractors and/or contractual partners render their services inadequately or not in a timely manner. Such subcontractors and/or contractual partners may become insolvent during their engagement resulting in a delay of the completion of construction projects. In that case the Issuer could lose customers or the further growth of the Issuer could be impaired. This could have a material adverse effect on the Issuer's business. 18

19 Dependency on supply market The Issuer depends on the supply market to secure construction and raw materials such as cement, sand, gravel, reinforcing bars and bitumen (the later accounting for approximately 50 per cent of asphalt costs). The cost of such construction materials as well as any increases of the costs thereof can usually be passed on to the customers. However, should the Issuer for any reason, not be in a position to pass such costs on to customers, the Issuer may be forced to bear these increased costs and this could have a material adverse effect on the Issuer's business. Restrictive statutory provisions The Issuer's business activities are subject to a number of strict statutory provisions relating inter alia to the protection of the environment, including waste treatment and the handling and disposal of hazardous materials. These regulations entail considerable expenses which are normally included in project costing. Also, environmental awareness is rising in Europe and rejection of major projects by action groups and ecological groups can delay planned construction projects or stop construction projects for which the required permissions have already been obtained. In addition to numerous other statutory provisions, public procurement laws apply to many projects the Issuer and its group companies are seeking to participate in. Potential conflicts in such projects could impair the prospects of success for the participation in such major projects. An increase of costs necessary to abide by statutory provisions, the impairment or prevention of the planning and performance of construction projects for ecological reasons, or public procurement procedures with a disadvantageous outcome may result in additional expenditures for the Issuer. Liability risks and other legal risks The Issuer regularly takes out insurances to the extent necessary for the company to be insured against typical liability risks which are usually connected to the services of the Issuer. However, it cannot be excluded for the future that the Issuer will not be subject to claims for damages which are not insurable or not covered (completely or partly) by existing insurances. This could have a material adverse effect on the Issuer's business, Appropriate risk management The Issuer's risk management system is designed to assist with the assessment, avoidance and reduction of risks which could jeopardize its business. However, despite the risk management system in place, there can be no assurance that violations of internal guidelines, applicable law or criminal acts by employees or third parties retained by the Issuer such as subcontractors or consultants and their employees can be entirely prevented. If the Issuer's risk management system does not achieve its objectives or if the Issuer's internal organizational, information, risk monitoring, and risk management systems are inadequate, corporate or administrative failures or illegal activities could occur or wrong decisions could be made, which in turn could have material adverse effects on the Issuer's reputation. 19

20 Guarantees by the Issuer The Issuer has in the past issued guarantees for related companies. As of 31 March 2007, the Group has assumed sureties and guarantees in an amount totalling approximately EUR mn (Sources: Annual consolidated financial statements as of 31 March 2007 pursuant to IFRS). Should these companies not fulfil their obligations, the obligations under the guarantees would have to be fulfilled by the Issuer. This could have a material adverse effect on the Issuer's business and financial condition. Capital market activities The Issuer has the possibility to raise additional funds from the capital market. However, the Issuer has not yet planned any such steps. When accepting additional funds from the capital market the risk remains that the Issuer's success lags behind the expectations. The repayment of obligations could therefore fall short and the market price of the Issuer's securities could develop negatively. This could have a material adverse effect on the Issuer's business. Dependency on certain customers, including governments funding infrastructure projects Companies and governments of countries that regularly award construction contracts could restrict or suspend awarding contracts to the Issuer due to political or other considerations. The construction industry generally is to some extent dependent on the amount of infrastructure work funded by various governmental agencies which, in turn, depends on the condition of the existing infrastructure in the relevant countries, the need for new or expanded infrastructure and federal, state or local government spending levels. In the new EU member states, the Issuer partly depends on the extent to which infrastructure programs are funded by the EU. The award of contracts by contracting authorities is furthermore subject to uncertainties as a result of restricted or altered, budgets, the participation in costly tender procedures with uncertain outcome, bureaucracy and corruption. A decrease in government funding of infrastructure projects could decrease the number of construction projects available and limit the Issuer's ability to obtain new contracts, which could reduce revenues and/or profits. Dependency on public spending More than 50 per cent of the Issuer's business in the business year 2006/2007 was rendered for public authorities. Saving measures and budgetary restrictions may affect the order book of the Issuer and could have a material adverse effect on the Issuer's business, results of operations and financial condition. Interest rate risk The expansion of Swietelsky's business activities in the ordinary course of its business requires additional debt financing of assets, resources, investments and acquisitions. The present debt structure of the Issuer includes both fixed and floating interest obligations. After completion of the Offering, the debt financing structure of the Issuer is expected to consist of about 40 per cent fixed and 60 per cent floating interest rate financing. However, the composition of the debt financing structure varies significantly during the course of a business year of the Issuer. An increase of the interest rate level may therefore have a 20

21 material adverse effect on the Issuer's business, results of operations and financial condition. The Issuer has entered into interest swap agreements for a part of its current debt in order to reduce the debt service burden. Nevertheless, it cannot be guaranteed that the interest rate levels (and consequently the Issuer's interest rate expenses) will not rise. This could have a material adverse effect on the Issuer's business, results of operations and financial condition. Currency risk The Issuer finances its equipment, investments as well as expansions partly in currencies other than EUR, which is in line with the Issuer's internationally orientated business operations. For a material part of the cash flows in other currencies, transactions have been entered into which reduce the currency F/X risk, however, it cannot be guaranteed that the F/X rates will not change. This could have a material adverse effect on the Issuer's business, results of operations and financial condition. Capital requirements Due to the rules of the Basel II Accord (International Convergence of Capital Measurement and Capital Standards by the Basel Committee on Banking Supervision), banks may be required to monitor their capital adequacy requirements more closely in the future which in turn may result in higher costs of capital for the Issuer because of higher interest rate payments. This could have a material adverse effect on the Issuer's business. Risk of changing taxation The financial situation of the Issuer depends also on the taxation of profits both on the level of the Issuer and the level of the Group. Furthermore, the tax situation of the individual investor influences the investor's tax situation. It cannot be guaranteed that the current tax situation will remain unchanged in the future. A changed tax situation could have a material adverse effect on the Issuer's business, results of operations and financial condition, as well as on the attractiveness of the Bonds for each individual investor. RISKS REGARDING THE BONDS The Bonds have no stated maturity The Bonds have an indefinite term and the Bondholders have no right to call for their redemption (save in certain very limited circumstances provided by mandatory Austrian law). The Bonds may be redeemed at the option of the Issuer at a redemption price equal to their aggregate principal amount plus the accrued and unpaid remuneration for the thencurrent Remuneration Period to the date fixed for redemption on any Remuneration Payment Date falling on or after the Step-up Date (all terms as defined in the Terms and Conditions of the Bonds). Prior to the Step-up Date, the Bonds may only be redeemed at the option of the Issuer following a Gross-up Event, a Tax Event or an Accounting Event, in case of a Change of Control or in the event the outstanding principal amount of the Bonds has fallen below 25 per cent of the original principal amount of the Bonds due to a repurchase of Bonds by the Issuer or its subsidiaries (all such terms as defined in the Terms 21

22 and Conditions of the Bonds). Prospective investors should be aware that they may be required to bear the financial risks of an investment in the Bonds for an indefinite period of time. Payments of remuneration under the Bonds may be deferred at the election of the Issuer Subject to the Terms and Conditions of the Bonds, the Issuer has the option to defer any payment of remuneration on the Bonds if none of the Mandatory Payment Events set out in the Terms and Conditions of the Bonds has occurred in the 12 month period immediately preceding the relevant Remuneration Payment Date (as defined in the Terms and Conditions of the Bonds). Therefore, investors should be aware of the possibility that the Issuer may defer remuneration payments even in situations where it generates profits. Deferred Remuneration Payments (as defined in the Terms and Conditions of the Bonds) will not bear interest themselves. While the deferral of remuneration payments continues, the Issuer is not prohibited from making payments on any instrument ranking senior or - provided such instrument does not constitute Equity (as defined in the Terms and Conditions of the Bonds) - pari passu with the Bonds, and in such event the Bondholders are not entitled to claim payment of any Deferred Remuneration Payments. Claims under the Bonds are junior subordinated The payment obligations of the Issuer under or in connection with the Bonds constitute junior subordinated obligations of the Issuer. Upon the occurrence of any winding-up or insolvency proceedings over the assets of the Issuer, payments on the Bonds will be subordinated in right of payment to all unsubordinated and any other subordinated obligations of the Issuer, except for liabilities which rank pari passu with or junior to the Bonds. In a winding-up or insolvency proceeding of the Issuer, the Bondholders may recover proportionately less than the holders of unsubordinated or other subordinated liabilities of the Issuer or nothing at all, as the case may be. Unsubordinated liabilities of the Issuer may also arise from events that are not reflected on the balance sheet of the Issuer, including, without limitation, the issuance of guarantees or the incurrence of other contingent liabilities on an unsubordinated basis. Claims made under such guarantees or such other contingent liabilities will become unsubordinated liabilities of the Issuer, which in a winding-up or insolvency proceeding of the Issuer will need to be paid in full before the obligations under the Bonds may be satisfied. Early redemption and reinvestment risk In the event that the Bonds are redeemed or being sold, an investor may be subject to the risk that he may not find any reinvestment opportunities at better or at least the same conditions. The same applies to the reinvestment of remuneration payments derived from the investment. This could result in a material adverse effect for investors. The Issuer may incur additional indebtedness ranking senior and/or pari passu with the Bonds The Issuer has not entered into any restrictive covenants in connection with the issuance of the Bonds regarding its respective ability to incur additional indebtedness ranking senior or 22

23 pari passu with the obligations under or in connection with the Bonds. Incurring any additional indebtedness may increase the likelihood of a deferral of remuneration payments under the Bonds and/or may reduce the amount recoverable by Bondholders in the event of insolvency or liquidation of the Issuer. No express events of default and cross default clauses The Bondholders should be aware that the Terms and Conditions of the Bonds do not contain any express events of default and cross default clauses. Therefore, save in certain very limited circumstances provided by mandatory Austrian law, the Bondholders can not redeem the Bonds upon occurrence of an event of default or cross default. Fixed rate securities are exposed to specific market risks Until (excluding) 16 November 2012, remuneration payable on the Bonds accrues at a fixed rate. A holder of a Bond with a fixed remuneration rate is exposed to the risk that the price of such Bond falls as a result of changes in the market interest rate. While the nominal remuneration rate of a Bond with a fixed remuneration rate is fixed during the life of such Bond, the current interest rate on the capital market (market interest rate) typically changes continuously. As the market interest rate changes, the price of such Bond changes in the opposite direction. If the market interest rate increases, the price of such Bond typically falls, until the yield of such Bond is approximately equal to the market interest rate. If the market interest rate falls, the price of a Bond with a fixed remuneration rate typically increases, until the yield of such Bond is approximately equal to the market interest rate. Bondholders should be aware that movements of the market interest rate can adversely affect the price of the Bonds and can lead to losses for the Bondholders if they sell Bonds. Floating rate securities may suffer a decline in remuneration rate If not redeemed by (including) 16 November 2012, until their redemption, the Bonds will carry variable remuneration calculated on a floating rate base. Floating rate bonds tend to be volatile investments. A holder of a security with a floating remuneration rate is exposed to the risk of fluctuating remuneration rate levels and uncertain remuneration income. Fluctuating remuneration rate levels make it impossible to determine the yield of such securities in advance. The longer the remaining tenor of a corporate bond is, the more impact on the stock exchange price will be caused by a change in the interest rate level. Public market for Bonds and uncertainty of price development The Issuer intends to apply for admission to listing of the Bonds on the Second Regulated Market (Geregelter Freiverkehr) of the Vienna Stock Exchange. It cannot be guaranteed that the stock exchange prices at which the Bonds will be quoted will not be below par. Negative consequences on the stock exchange price of the Bonds may be caused in particular by an unsatisfactory business development of the Issuer, a worsened financial condition of the Issuer, a future low credit rating of the Issuer, a deterioration of the industry the Issuer is active in or the economy as a whole, an increase of interest rates as well as a general decline of the securities markets. The securities markets have seen material stock exchange price and trading volume fluctuations during the past years. Such fluctuations could result in a material adverse effect for investors. 23

24 Illiquid markets Although the Issuer intends to apply for admission to listing of the Bonds on the Second Regulated Market (Geregelter Freiverkehr) of the Vienna Stock Exchange, it cannot be guaranteed that active trading in these securities will develop and that the market for the Bonds will be liquid. Illiquid markets can result in a situation where investors may be forced to sell their securities below a fair market price, the price they have bought such securities or a price which is appropriate for such securities. This could result in a material adverse effect for investors. Advice This Prospectus does not alter each individual investor's need to seek the advice of a bank, a financial or investment adviser or a lawyer. 24

25 TERMS AND CONDITIONS OF THE BONDS The German version of the Terms and Conditions of the Bonds is the only legally binding version. The English translation is for convenience only. Nur die deutsche Fassung der Anleihebedingungen ist verbindlich. Die englische Fassung dient nur der Anwenderfreundlichkeit. ANLEIHEBEDINGUNGEN der EUR Tief nachrangige, ewig laufende, fix und variabel verzinsliche Schuldverschreibungen TERMS AND CONDITIONS of the EUR 50,000,000 Perpetual Junior Subordinated Fixed to Floating Rate Bonds 1 1 DEFINITIONEN UND AUSLEGUNG DEFINITIONS AND INTERPRETATION Soweit aus dem Zusammenhang nicht etwas anderes hervorgeht, haben die nachfolgenden Begriffe in diesen Anleihebedingungen die folgende Bedeutung: Anleihebedingungen bezeichnet diese Bedingungen der Schuldverschreibungen. Anleihegläubiger bezeichnet jeden Inhaber eines Miteigentumsanteils oder -rechts an der Dauersammelurkunde. Anwendbare Rechnungslegungsvorschriften bezeichnet die International Financial Reporting Standards (IFRS) oder diejenigen Rechnungslegungsvorschriften, die IFRS aufgrund zwingenden Rechts als auf den Abschluss der Emittentin anwendbare Rechnungslegungsvorschriften nachfolgen. Aufzahlungsereignis bezeichnet den Fall, dass die Emittentin (i) verpflichtet ist, oder verpflichtet sein wird, Zusätzliche Beträge (wie in 7 definiert) als Folge einer Änderung oder Ergänzung von Gesetzen der Republik Österreich oder einer ihrer Gebietskörperschaften oder Behörden (oder Unless the context otherwise requires, the following terms will have the following meanings in these Terms and Conditions: Terms and Conditions means these terms and conditions of the Bonds. Bondholder means any holder of a coownership participation or right in the Permanent Global Bond. Applicable Accounting Standards means the International Financial Reporting Standards (IFRS) or such accounting standards which succeed IFRS as mandatorily applicable to the financial statements of the Issuer. Gross-up Event means that (i) the Issuer has or will become obliged to pay Additional Amounts (as defined in 7) as a result of any change in, or amendment to, the laws (or any rules or regulations thereunder) of the Republic of Austria or any political subdivision or any authority of or in the 25

26 der Änderung oder Ergänzung von Bestimmungen und Vorschriften auf Grundlage dieser Gesetze), oder als Folge einer Änderung der offiziellen Auslegung oder Anwendung dieser Gesetze, Bestimmungen oder Vorschriften zu zahlen, soweit diese Änderung oder Durchführung an oder nach dem Ausgabetag wirksam wird; und (ii) diese Verpflichtung nicht durch das Ergreifen zumutbarer Maßnahmen vermieden werden kann. Republic of Austria, or any change in or amendment to any official interpretation or application of those laws or rules or regulations which amendment, change or execution becomes effective on or after the Issue Date and (ii) that obligation cannot be avoided by the Issuer taking reasonable measures available to it. Ausgabetag bezeichnet den Issue Date means 16 November Bildschirmseite bezeichnet Reuters Seite EURIBOR 01 (oder eine andere Bildschirmseite von Reuters oder einem anderen Informationsanbieter als Nachfolger, welche Reuters Seite EURIBOR 01 zur Anzeige solcher Sätze ersetzt). Clearingsystem bezeichnet Clearstream Luxemburg und Euroclear. Clearstream Luxemburg bezeichnet Clearstream Banking, société anonyme, Luxemburg. Dauersammelurkunde hat die in 2(2) festgelegte Bedeutung. Emittentin hat die in 2(1) festgelegte Bedeutung. Euroclear bezeichnet Euroclear Bank S.A./N.V. als Betreiberin des Euroclear Systems. Fitch bezeichnet Fitch Ratings Ltd (zusammen mit Moody's und Standard & Poor's oder deren Nachfolger die Rating- Agenturen). Geschäftstag bezeichnet jeden Tag (außer einen Samstag oder einen Sonntag), an dem TARGET (das Trans-European Automated Real Time Gross settlement Express Transfer System) zum Betrieb geöffnet ist. Screen Page means Reuters Page EURIBOR 01 (or such other screen page of Reuters or such other information service, which is the successor to Reuters Page EURIBOR 01 for the purpose of displaying such rates). Clearing System means Clearstream Luxembourg and Euroclear. Clearstream Luxembourg means Clearstream Banking, société anonyme, Luxembourg. Permanent Global Bond has the meaning specified in 2(2). Issuer has the meaning specified in 2(1). Euroclear means Euroclear Bank S.A./N.V., as operator of the Euroclear system. Fitch means Fitch Ratings Ltd (together with Moody's and Standard & Poor's, or their respective successor companies, the Rating Agencies). Business Day means any day (other than a Saturday or a Sunday) on which TARGET (the Trans-European Automated Real Time Gross settlement Express Transfer System) is operating. 26

27 Gleichrangige als Eigenkapital qualifizierte Wertpapiere bezeichnet Gleichrangige Wertpapiere, die nach Maßgabe der konsolidierten Bilanz der Emittentin als "Eigenkapital" qualifiziert werden. Gleichrangige Wertpapiere bezeichnet von der Emittentin begebene Wertpapiere oder andere Instrumente, die den Verpflichtungen der Emittentin gemäß den Schuldverschreibungen im Rang gleich stehen sowie von einer Konzernuntergesellschaft begebene Wertpapiere oder andere Instrumente, welche von der Emittentin garantiert werden und bei denen die Verpflichtungen der Emittentin unter der Garantie den Verpflichtungen der Emittentin gemäß den Schuldverschreibungen im Rang gleich stehen. Investment Grade Rating bezeichnet jedes Rating von zumindest "BBB-" im Falle von Standard & Poor's und Fitch und "Baa3" im Falle von Moody's, das als durch die Emittentin beantragtes und bezahltes Rating durch eine der Rating-Agenturen zugewiesen wird. Ein Kontrollwechsel gilt als eingetreten, wenn eine Person oder mehrere Personen, die abgestimmt handeln, oder einer oder mehrere Dritte, die im Auftrag einer solchen Person oder Personen handeln, zu irgendeinem Zeitpunkt mittelbar oder unmittelbar mehr als 50 % der Geschäftsanteile der Emittentin erworben hat (außer der direkte oder indirekte Erwerb von Geschäftsanteilen der Emittentin durch eine natürliche oder juristische Person, die am Ausgabetag direkt oder indirekt einen Geschäftsanteil der Emittentin hält oder der Erwerb durch eine Privatstiftung, die von einer solchen natürlichen oder juristischen Person kontrolliert wird), und als Wirksamkeitstag wird das Datum bezeichnet, an dem der Kontrollwechsel wirksam ist. Parity Securities treated as Equity means any Parity Securities which pursuant to applicable accounting standards qualify as "equity" in the consolidated balance sheet of the Issuer. Parity Securities means any securities or other instruments issued by the Issuer which rank pari passu with the Issuer's obligations under the Bonds as well as any securities or other instruments issued by a subsidiary of the Issuer which benefit from a guarantee given by the Issuer where the obligations under such guarantee rank pari passu with the Issuer's obligations under the Bonds. Investment Grade Rating means each rating assigned as a sponsored rating (meaning a rating applied for by the Issuer) by either of the Rating Agencies which is at least "BBB-" in the case of Standard & Poor's and Fitch and "Baa3" in case of Moody's. Change of Control means any person or persons, acting in concert or any person or persons acting on behalf of such person(s), at any time directly or indirectly acquire(s) more than 50 per cent of the shares of the Issuer (other than a direct or indirect acquisition of shares by a person or an entity who at the Issue Date directly or indirectly holds a share in the Company or by a private foundation (Privatstiftung) controlled by such a person or entity), and Effective Date means the date on which such Change of Control becomes effective. 27

28 Marge bezeichnet % p. a. Wenn die Emittentin nach dem Eintritt eines Kontrollwechsels die Schuldverschreibungen nicht gemäß 5(6) zurückzahlt, erhöht sich ab dem Variablen Vergütungszahltag, der dem Wirksamkeitstag des Kontrollwechsels unmittelbar folgt, die Marge um 5 % p. a., ausgenommen die Emittentin hat nach dem Kontrollwechsel ein oder mehrere Ratings für nicht-nachrangige unbesicherte Verbindlichkeiten entweder von Moody's, Standard & Poor's oder Fitch und vor dem Variablen Vergütungszahltag, der dem Wirksamkeitstag des Kontrollwechsels unmittelbar folgt, wird der Emittentin ein Investment Grade Rating zugewiesen. Moody's bezeichnet Moody's Investor Services, Inc. Nachrangige als Eigenkapital qualifizierte Wertpapiere bezeichnet Nachrangige Wertpapiere, die nach Maßgabe der Anwendbaren Rechnungslegungsvorschriften in der Bilanz der Emittentin als "Eigenkapital" qualifiziert werden. Nachrangige Wertpapiere bezeichnet von der Emittentin begebene Wertpapiere oder andere Instrumente, die den Verpflichtungen der Emittentin gemäß den Schuldverschreibungen im Rang nachgehen sowie von einer Konzernuntergesellschaft begebene Wertpapiere oder andere Instrumente, welche von der Emittentin garantiert werden und bei denen die Verpflichtungen der Emittentin unter der Garantie den Verpflichtungen der Emittentin gemäß den Schuldverschreibungen im Rang nachgeht. Obligatorischer Vergütungszahltag bezeichnet jeden Vergütungszahltag innerhalb eines Zeitraumes von 12 Monaten nach einem Obligatorischen Zahlungsereignis. Margin means per cent per annum. In case of a Change of Control, if the Issuer does not redeem the Bonds in accordance with 5(6), the Margin will be increased by 5 per cent per annum, taking effect from the Floating Remuneration Payment Date immediately following the Effective Date, unless following the Change of Control, the Issuer benefits from one or more senior credit ratings by either Moody's, Standard & Poor's or Fitch and, prior to the Floating Remuneration Payment Date immediately following the Effective Date, an Investment Grade Rating is assigned to the Issuer. Moody's means Moody's Investor Services, Inc. Junior Securities treated as Equity means any Junior Securities which pursuant to applicable accounting standards qualify as "equity" in the balance sheet of the Issuer. Junior Securities means any securities or other instruments issued by the Issuer which rank junior with the Issuer's obligations under the Bonds as well as any securities or other instruments issued by a subsidiary of the Issuer which benefit from a guarantee given by the Issuer where the obligations under such guarantee rank junior to the Issuer's obligations under the Bonds. Mandatory Remuneration Payment Date means any Remuneration Payment Date within the 12 month period following the occurrence of a Mandatory Payment Event. 28

29 Rechnungslegungsereignis meint, dass der Zahlstelle ein Gutachten einer anerkannten Wirtschaftsprüfungsgesellschaft übergeben worden ist, aus dem hervorgeht, dass die Emittentin die durch die Ausgabe der Schuldverschreibungen aufgenommenen Mittel nicht oder nicht mehr vollumfänglich als "Eigenkapital" im Sinne der Anwendbaren Rechnungslegungsvorschriften in einem Jahresabschluss der Emittentin auszuweisen berechtigt ist. Steuerereignis meint, dass der Zahlstelle ein Gutachten eines anerkannten unabhängigen Steuerberaters übergeben worden ist, aus dem hervorgeht, dass an oder nach dem Ausgabetag als Folge einer Änderung oder Ergänzung der Gesetze (oder von aufgrund dieser Gesetze erlassener Bestimmungen oder Vorschriften) der Republik Österreich oder einer ihrer Gebietskörperschaften oder Steuerbehörden, oder als Ergebnis einer Änderung oder Ergänzung der offiziellen Auslegung oder Anwendung solcher Gesetze oder Vorschriften durch eine gesetzgebende Körperschaft, ein Gericht, eine Regierungsstelle oder eine Aufsichtsbehörde (einschließlich des Erlasses von Gesetzen sowie der Bekanntmachung gerichtlicher oder aufsichtsrechtlicher Entscheidungen), Vergütungen, die von der Emittentin in Bezug auf die Schuldverschreibungen zahlbar sind, von der Emittentin für die Zwecke der österreichischen Ertragssteuern (insbesondere für Zwecke der Körperschaftsteuer) nicht mehr in mindestens demselben Umfang wie bei der Begebung der Schuldverschreibungen abzugsfähig sind. Schuldverschreibungen hat die in 2(1) festgelegte Bedeutung. Standard & Poor's bezeichnet Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc. Streitigkeiten hat die in 13(3) festgelegte Bedeutung. Accounting Event means that an opinion of a recognised accountancy firm has been delivered to the Paying Agent, stating that the funds raised through the issuance of the Bonds must not or must no longer be fully recorded as "equity" pursuant to the Applicable Accounting Standards for the purposes of the annual financial statements of the Issuer. Tax Event means that an opinion of a recognised independent tax counsel has been delivered to the Paying Agent, stating that on or after the Issue Date, as a result of any amendment to, or change in, the laws (or any rules or regulations thereunder) of the Republic of Austria or any political subdivision or any taxing authority thereof or therein, or as a result of any amendment to, or change in, any official interpretation or application of any such laws, rules or regulations by any legislative body, court, governmental agency or regulatory authority (including the enactment of any legislation and the publication of any judicial decision or regulatory determination), remuneration payable by the Issuer in respect of the Bonds is no longer fully deductible by the Issuer for Austrian income tax purposes (in particular for the purpose of the Körperschaftsteuer) to at least the same degree as upon issue of the Bonds. Bonds has the meaning specified in 2(1). Standard & Poor's means Standard & Poor's Rating Services, a division of The McGraw- Hill Companies, Inc. Disputes has the meaning specified in 13(3). 29

30 Vereinigte Staaten bezeichnet die Vereinigten Staaten von Amerika (einschließlich deren Bundesstaaten und des Districts of Columbia) sowie deren Territorien (einschließlich Puerto Ricos, der U. S. Virgin Islands, Guam, American Samoa, Wake Island und der Northern Mariana Islands). Verfahren hat die in 13(3) festgelegte Bedeutung. Vergütungszahltag hat die in 4(2)(b) festgelegte Bedeutung. Zahlstelle hat die in 9 festgelegte Bedeutung. United States means the United States of America (including the States thereof and the District of Columbia) and its possessions and territories (including Puerto Rico, the US Virgin Islands, Guam, American Samoa, Wake Island and Northern Mariana Islands). Proceedings has the meaning specified in 13(3). Remuneration Payment Date has the meaning specified in 4(2)(b). Paying Agent has the meaning specified in NENNBETRAG UND STÜCKELUNG; VERBRIEFUNG; ÜBERTRAGBARKEIT PRINCIPAL AMOUNT AND DENOMINATION; FORM; TRANSFERABILITY (1) Nennbetrag und Stückelung. Die Emission der Tief nachrangige, ewig laufende, fix und variabel verzinsliche Schuldverschreibungen der Swietelsky Baugesellschaft m.b.h. (die Emittentin) im Gesamtnennbetrag von EUR (in Worten: Euro Fünfzig Millionen) ist eingeteilt in an den Inhaber zahlbare und untereinander gleichrangige Teilschuldverschreibungen mit einem Nennbetrag von jeweils EUR (die Schuldverschreibungen; dieser Begriff umfasst sämtliche weiteren Schuldverschreibungen, die gemäß 10 begeben werden und eine einheitliche Serie mit den Schuldverschreibungen bilden). (2) Verbriefung. Die Schuldverschreibungen sind durch eine Dauersammelurkunde (die Dauersammelurkunde) ohne Vergütungsscheine verbrieft. Die Dauersammelurkunde trägt die eigenhändigen Unterschriften zweier ordnungsgemäß bevollmächtigter Vertreter (1) Principal Amount and Denomination. The issue of the Perpetual Junior Subordinated Fixed to Floating Bonds by Swietelsky Baugesellschaft m.b.h. (the Issuer) in the aggregate principal amount of EUR 50,000,000 (in words: euro fifty million) is divided into 50,000 Bonds payable to bearer and ranking pari passu among themselves, with a principal amount of EUR 1,000 each (the Bonds; this term includes any further Bonds issued pursuant to 10 that form a single series with the Bonds). (2) Form. The Bonds are initially represented by a permanent global note (the Permanent Global Note) without remuneration coupons. The Permanent Global Note shall be signed manually by two authorised signatories of the Issuer and shall be authenticated by or on behalf of the Paying Agent. Definitive Bonds 30

31 der Emittentin und ist von der Zahlstelle oder in deren Namen mit einer Kontrollunterschrift versehen. Einzelurkunden und Vergütungsscheine werden nicht ausgegeben. (3) Clearingsystem. Die Dauersammelurkunde wird voraussichtlich bei der Oesterreichischen Kontrollbank AG, Am Hof 4, 1010 Wien als Wertpapier- Sammelbank eingeliefert und solange von dem oder im Namen des Clearingsystems verwahrt, bis sämtliche Verpflichtungen der Emittentin aus den Schuldverschreibungen erfüllt sind. (4) Übertragbarkeit. Den Anleihegläubigern stehen Miteigentumsanteile oder -rechte an der Dauersammelurkunde zu, die nach Maßgabe des anwendbaren Rechts und der jeweils geltenden Regelwerke des Clearingsystems übertragen werden. and remuneration coupons will not be issued. (3) Clearing System. The Permanent Global Note is expected to be delivered to the Austrian Control Bank, Am Hof 4, 1010 Vienna in its function as Central Securities Depository and will be kept in custody by or on behalf of the Clearing System until all obligations of the Issuer under the Bonds have been satisfied. (4) Transferability. The Bondholders will receive co-ownership participations or rights in the Permanent Global Note that are transferable in accordance with applicable law and applicable rules of the Clearing System. 3 3 RANG DER RANKING OF THE BONDS SCHULDVERSCHREIBUNGEN Die Schuldverschreibungen begründen direkte, nicht besicherte, tief nachrangige Verbindlichkeiten der Emittentin, die untereinander im Rang gleich stehen und im Fall der Liquidation, der Auflösung oder der Insolvenz der Emittentin oder eines Vergleichs oder eines anderen der Abwendung der Insolvenz der Emittentin dienenden Verfahrens (a) allen gegenwärtigen oder zukünftigen nichtnachrangigen und nachrangigen Verbindlichkeiten der Emittentin (ausgenommen Verbindlichkeiten unter Gleichrangigen Wertpapieren) im Rang nachgehen, (b) untereinander und mit Gleichrangigen Wertpapieren gleichrangig sind, und (c) dem Stammkapital der Emittentin im Rang vorgehen, soweit zwingende gesetzliche Bestimmungen nichts anderes vorschreiben. Im Fall der Liquidation, der Auflösung oder der The Bonds constitute direct, unsecured and junior subordinated obligations of the Issuer ranking pari passu among themselves and in the event of the liquidation, dissolution or insolvency of the Issuer or composition or other proceedings for the avoidance of insolvency of the Issuer shall rank (a) junior to all current and future unsubordinated and subordinated liabilities (other than Parity Securities) of the Issuer, (b) pari passu with each other and with any Parity Securities of the Issuer, and (c) senior to the Issuer's ordinary share capital, except as otherwise required by mandatory provisions of law. In the event of the liquidation, dissolution or insolvency of the Issuer or composition or other proceedings for the avoidance of insolvency of the Issuer, no amounts shall be payable in respect of the Bonds until the claims of all unsubordinated and subordinated creditors of the Issuer shall 31

32 Insolvenz der Emittentin oder eines Vergleichs oder eines anderen der Abwendung der Insolvenz der Emittentin dienenden Verfahrens erfolgen Zahlungen auf die Schuldverschreibungen solange nicht, wie die Ansprüche aller nicht-nachrangigen und nachrangigen Gläubiger gegen die Emittentin nicht zuerst vollständig erfüllt sind. Die Anleihegläubiger sind nicht berechtigt, Forderungen aus den Schuldverschreibungen gegen mögliche Forderungen der Emittentin gegen sie aufzurechnen. Die Emittentin ist nicht berechtigt, Forderungen gegenüber Anleihegläubigern gegen Verpflichtungen aus den Schuldverschreibungen aufzurechnen. Für die Rechte der Anleihegläubiger aus den Schuldverschreibungen ist diesen keine Sicherheit durch die Emittentin oder durch Dritte gestellt; eine solche Sicherheit wird auch zu keinem Zeitpunkt gestellt werden. have first been satisfied in full. No Bondholder may set-off any claims arising under the Bonds against any claims the Issuer may have against it. The Issuer may not set off any claims it may have against the Bondholders against any of its obligations under the Bonds. No security is, or shall at any time be, provided by the Issuer or any other person securing rights of the Bondholders under the Bonds. 4 4 VERGÜTUNG REMUNERATION (1) Fester Vergütungszeitraum. (1) Fixed Remuneration Period. (a) Vorbehaltlich 4(3) werden die Schuldverschreibungen mit jährlich % ihres Nennbetrages ab dem Ausgabetag (einschließlich) bis zum (ausschließlich) (der Erhöhungstag) verzinst (der Festvergütungssatz). (b) Die feste Vergütung ist jährlich am eines jeden Jahres im Nachhinein zahlbar, beginnend am (jeweils ein Fester Vergütungszahltag). (c) Wenn die Emittentin nach dem Eintritt eines Kontrollwechsels die Schuldverschreibungen nicht gemäß 5(6) zurückzahlt, erhöht sich ab dem Festen Vergütungszahltag, der dem Wirksamkeitstag des Kontrollwechsels unmittelbar folgt, der Festvergütungssatz um (a) Subject to 4(3), remuneration on the principal amount of the Bonds from and including the Issue Date to and excluding 16 November 2012 (the Step-up Date) shall accrue at a rate of per cent. p.a. (the Fixed Remuneration Rate). (b) Fixed rate remuneration shall be payable annually in arrears on 16 November in each year, commencing on 16 November 2008 (each a Fixed Remuneration Payment Date). (c) In case of a Change of Control, if the Issuer does not redeem the Bonds in accordance with 5(6), the Fixed Remuneration Rate will be increased by 5 per cent. p. a. taking effect from the Fixed Remuneration Payment Date immediately following the Effective Date, unless 32

33 5 % p. a., ausgenommen die Emittentin hat nach dem Kontrollwechsel ein oder mehrere Ratings für nicht-nachrangige unbesicherte Verbindlichkeiten entweder von Moody's, Standard & Poor's oder Fitch und vor dem Festen Vergütungszahltag, der dem Wirksamkeitstag des Kontrollwechsels unmittelbar folgt, wird der Emittentin ein Investment Grade Rating zugewiesen. (d) Vergütungen, die auf einen festen Vergütungszeitraum von weniger als einem Jahr zu berechnen sind, werden auf Grundlage der Anzahl der tatsächlich vergangenen Tage des Vergütungsberechnungszeitraums geteilt durch 365 oder 366 (tatsächliche Anzahl der Tage im betreffenden Zinsjahr) berechnet. following the Change of Control, the Issuer benefits from one or more senior credit ratings by either Moody's, Standard & Poor's or Fitch and, prior to the Fixed Remuneration Payment Date immediately following the Effective Date, an Investment Grade Rating is assigned to the Issuer. (d) If remuneration is to be calculated for a fixed remuneration period of less than one year, it shall be calculated on the basis of the actual number of days elapsed in the remuneration calculation period, divided by 365 or 366 (the actual number of days in the relevant interest year). (2) Variabler Vergütungszeitraum. (2) Floating Remuneration Period. (a) Vorbehaltlich 4(3) wird der Nennbetrag der Schuldverschreibungen ab dem Erhöhungstag (einschließlich) bis zum Tag der Rückzahlung der Schuldverschreibungen (ausschließlich) mit dem von der Berechnungsstelle festgestellten Variablen Vergütungssatz verzinst. (b) Die variable Vergütung ist vierteljährlich im Nachhinein am , 16.2., und eines jeden Jahres zahlbar (jeweils ein Variabler Vergütungszahltag und zusammen mit den Festen Vergütungszahltagen jeweils ein Vergütungszahltag; der Zeitraum zwischen dem Ausgabetag und dem ersten Vergütungszahltag sowie einem Vergütungszahltag und dem unmittelbar folgenden Vergütungszahltag wird als Vergütungszeitraum bezeichnet). (c) Der variable Vergütungssatz (der Variable Vergütungssatz) für jeden Vergütungszeitraum nach dem Erhöhungstag ist, sofern nachstehend nichts Abweichendes bestimmt wird, der angezeigte Angebotssatz (ausgedrückt als Prozentsatz per annum) für (a) Subject to 4(3), remuneration on the principal amount of the Bonds from and including the Step-up Date to but excluding the day of redemption of the Bonds shall accrue at the Floating Remuneration Rate determined by the Calculation Agent. (b) Floating rate remuneration shall be payable quarterly in arrears on 16 November, 16 February, 16 May and 16 August in each year (each a Floating Remuneration Payment Date and, together with the Fixed Remuneration Payment Dates, each a Remuneration Payment Date and the period between the Issue Date and the first Remuneration Payment Date and a Remuneration Payment Date and the immediately succeeding Remuneration Payment Date a Remuneration Period). (c) The floating remuneration rate (the Floating Remuneration Rate) for each Remuneration Period after the Step-up Date will, except as provided below, be the offered quotation displayed (expressed as a percentage rate per annum) for three-month 33

34 Dreimonats-Einlagen in Euro (EURIBOR) für den jeweiligen Variablen Vergütungszeitraum, der auf der Bildschirmseite am Vergütungsfestlegungstag um 11:00 Uhr (Brüsseler Ortszeit) angezeigt wird, zuzüglich der Marge, wobei alle Festlegungen durch die Berechnungsstelle erfolgen. Vergütungsfestlegungstag bezeichnet den zweiten Geschäftstag vor dem Beginn des jeweiligen Vergütungszeitraumes. Sollte die Bildschirmseite nicht zur Verfügung stehen, oder wird kein Angebotssatz angezeigt (in jedem dieser Fälle zu der genannten Zeit), wird die Berechnungsstelle von fünf von ihr ausgewählten Referenzbanken (wie nachstehend definiert) deren jeweilige Angebotssätze (jeweils als Prozentsatz per annum ausgedrückt) für Dreimonats- Einlagen in Euro für den betreffenden Variablen Vergütungszeitraum gegenüber führenden Banken im Interbanken-Markt in den Teilnehmerstaaten der dritten Stufe der Wirtschafts- und Währungsunion im Sinne des Vertrages über die Europäische Union anfordern. Maßgeblich sind die Sätze um ca. 11:00 Uhr (Brüsseler Ortszeit) am Vergütungsfestlegungstag. Sofern zwei oder mehr der ausgewählten Referenzbanken der Berechnungsstelle solche Angebotssätze nennen, ist der Variable Vergütungssatz für den betreffenden Variablen Vergütungszeitraum das arithmetische Mittel dieser Angebotssätze (falls erforderlich, aufoder abgerundet auf das nächste ein tausendstel Prozent, wobei 0,0005 aufgerundet wird), zuzüglich der Marge. Für den Fall, dass der Variable Vergütungssatz nicht gemäß den vorstehenden Bestimmungen ermittelt werden kann, ist der Variable Vergütungssatz der Angebotssatz oder das arithmetische Mittel der Angebotssätze auf der Bildschirmseite, wie vorstehend beschrieben, deposits in euro (EURIBOR) for that Floating Remuneration Period which appears on the Screen Page as of 11:00 a. m. (Brussels time) on the Remuneration Determination Date, plus the Margin, all as determined by the Calculation Agent. Remuneration Determination Date means the second Business Day prior to the commencement of the relevant Remuneration Period. If the Screen Page is not available or if no such quotation is available, in each case and at such time, the Calculation Agent shall request five Reference Banks (as defined below) selected by it to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for three-month deposits in euro for the relevant Floating Remuneration Period to leading banks in the interbank market of the participating Member States in the third stage of the Economic and Monetary Union, as contemplated by the Treaty on the European Union. The relevant offered quotations shall be those offered at approximately 11:00 a. m. (Brussels time) on the Remuneration Determination Date. As long as two or more of the selected Reference Banks provide the Calculation Agent with such offered quotations, the Floating Remuneration Rate for such Floating Remuneration Period shall be the arithmetic mean of such offered quotations (rounded if necessary to the nearest one thousandth of a percentage point, with being rounded upwards), plus the Margin. If the Floating Remuneration Rate cannot be determined in accordance with the foregoing provisions, the Floating Remuneration Rate shall be the offered quotation or the arithmetic mean of the offered quotations on the Screen Page, as described above, on the last day preceding the Remuneration 34

35 an dem letzten Tag vor dem Vergütungsfestlegungstag, an dem ein solcher Angebotssatz bzw. solche Angebotssätze angezeigt wurde(n), zuzüglich der Marge. Referenzbanken sind diejenigen Banken, deren Angebotssätze zur Ermittlung des angezeigten Angebotssatzes zu dem Zeitpunkt benutzt wurden, als solch ein Angebot letztmals auf der Bildschirmseite angezeigt wurde. (d) Die Berechnungsstelle wird zu oder baldmöglichst nach jedem Vergütungsfestlegungstag den Variablen Vergütungssatz bestimmen und den auf den gesamten Nennbetrag der Schuldverschreibungen zahlbaren Vergütungsbetrag (der Vergütungsbetrag) für den entsprechenden Variablen Vergütungszeitraum berechnen. Der Vergütungsbetrag ergibt sich aus der Multiplikation des Variablen Vergütungssatzes mit dem Vergütungstagequotienten (wie nachstehend definiert) und dem Nennbetrag je Schuldverschreibung, wobei der daraus resultierende Betrag auf den nächsten Eurocent auf- oder abgerundet wird, und 0,5 oder mehr eines Eurocents aufgerundet werden. Vergütungstagequotient bezeichnet im Hinblick auf die Berechnung des Vergütungsbetrages auf jede Schuldverschreibung für einen Variablen Vergütungszeitraum oder einen Teil davon (der Vergütungsberechnungszeitraum) die tatsächliche Anzahl von Tagen im Vergütungsberechnungszeitraum dividiert durch 360. (e) Die Berechnungsstelle wird veranlassen, dass der Variable Vergütungssatz, der Vergütungsbetrag für den jeweiligen Variablen Vergütungszeitraum, jeder Variable Vergütungszeitraum und der Determination Date on which such quotation or, as the case may be, quotations were offered, plus the Margin. Reference Banks means those banks whose offered rates were used to determine such quotation when such quotation last appeared on the Screen Page. (d) The Calculation Agent shall, on or as soon as practicable after each Remuneration Determination Date, determine the Floating Remuneration Rate and calculate the amount of remuneration (the Remuneration Amount) payable on the aggregate principal amount of the Bonds for the relevant Floating Remuneration Period. Each Remuneration Amount shall be calculated by multiplying the Floating Remuneration Rate with the Day Count Fraction (as defined below) and the principal amount of each Bond and rounding the resulting figure to the nearest Eurocent, with 0.5 or more of a Eurocent being rounded upwards. Day Count Fraction means, in respect of the calculation of an amount of remuneration on each Bond for any Floating Remuneration Period or part thereof (the Calculation Period), the actual number of days in the Calculation Period divided by 360. (e) The Calculation Agent will cause the Floating Remuneration Rate, each Remuneration Amount for each Floating Remuneration Period, each Floating Remuneration Period and the relevant 35

36 betreffende Variable Vergütungszahltag der Emittentin und jeder Börse, an der die Schuldverschreibungen zu diesem Zeitpunkt notiert sind und deren Regeln eine Mitteilung an die Börse verlangen, sowie den Anleihegläubigern gemäß 11 unverzüglich, aber keinesfalls später als am vierten auf die Festlegung folgenden Geschäftstag mitgeteilt werden. (f) Falls ein Variabler Vergütungszahltag auf einen Tag fallen würde, der kein Geschäftstag ist, wird der Variable Vergütungszahltag auf den nächstfolgenden Geschäftstag verschoben, es sei denn, jener würde dadurch in den nächsten Kalendermonat fallen; in diesem Fall fällt der Variable Vergütungszahltag auf den unmittelbar vorausgehenden Geschäftstag. (g) Sämtliche Bescheinigungen, Mitteilungen, Gutachten, Festsetzungen, Berechnungen, Quotierungen und Entscheidungen, die von der Berechnungsstelle und der Feststellungsstelle für die Zwecke dieser Anleihebedingungen gemacht, abgegeben, getroffen oder eingeholt werden, sind (sofern nicht vorsätzliches Fehlverhalten oder ein offensichtlicher Irrtum vorliegt) für die Emittentin und die Anleihegläubiger bindend. Floating Remuneration Payment Date to be notified to the Issuer and, if required by the rules of any stock exchange on which the Bonds are listed from time to time, to such stock exchange, and to the Bondholders in accordance with 11 without undue delay, but, in any case, not later than on the fourth Business Day after their determination. (f) If any Floating Remuneration Payment Date would otherwise fall on a day which is not a Business Day, the Floating Remuneration Payment Date shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which case the Floating Remuneration Payment Date shall be the immediately preceding Business Day. (g) All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of these Terms and Conditions by the Calculation Agent and the Determination Agent shall (in the absence of wilful default or manifest error) be binding upon the Issuer and the Bondholders. (3) Vergütungsaufschub. (3) Remuneration Deferral. (a) Die Emittentin ist berechtigt, vorbehaltlich der Regelung in 4(3)(e), Vergütungen, die während eines Vergütungszeitraumes auflaufen, aufzuschieben. Derartig aufgeschobene Vergütungen stellen Vergütungsrückstände dar. Die Emittentin ist nicht verpflichtet, Vergütungen zu zahlen, wenn sie sich gegen eine solche Zahlung entschieden hat, ausgenommen in den Fällen des 4(3)(e); eine Nichtzahlung aus diesem Grunde begründet keinen Verzug der Emittentin und keine sonstige Verletzung ihrer (a) The Issuer retains the right, subject to 4(3)(e), to defer any remuneration which accrues during a Remuneration Period. Such deferred remuneration shall constitute Deferred Remuneration Payments. The Issuer shall not have any obligation to make a remuneration payment unless provided otherwise in 4(3)(e); if it elects not to do so any such failure to pay remuneration shall not constitute a default of the Issuer or any other breach of obligations under the Bonds or for any other purpose. 36

37 Verpflichtungen aufgrund dieser Schuldverschreibungen oder für sonstige Zwecke. (b) Soweit sich die Emittentin gemäß 4(3)(a) entscheidet, die an einem Vergütungszahltag ansonsten fällige Vergütung aufzuschieben, hat sie dies den Anleihegläubigern gemäß 11 unter Einhaltung einer Frist von mindestens 10 und höchstens 15 Geschäftstagen vor diesem Vergütungszahltag bekannt zu machen. (c) Vergütungsrückstände werden nicht verzinst. (d) Die Emittentin kann ausstehende Vergütungsrückstände jederzeit ganz oder teilweise nach Benachrichtigung der Anleihegläubiger gemäß 11 unter Einhaltung einer Frist von nicht weniger als 10 und nicht mehr als 15 Geschäftstagen zahlen (wobei eine solche Mitteilung unwiderruflich ist und die Emittentin verpflichtet ist, die jeweiligen Vergütungsrückstände an dem in dieser Mitteilung genannten Zahltag zu zahlen). (e) Die Emittentin ist nur verpflichtet, ausstehende Vergütungsrückstände (vollständig, jedoch nicht teilweise) an dem zuerst eintretenden der folgenden Tage zu zahlen: (i) bei Eintritt eines Obligatorischen Vergütungszahlungsereignisses; (ii) an dem Tag, an dem die Schuldverschreibungen zur Rückzahlung fällig sind; und (iii) an dem Tage, an dem eine Verfügung zur Auflösung, Abwicklung oder Liquidation der Emittentin ergeht (sofern dies nicht für die Zwecke oder als Folge eines Zusammenschlusses, einer Umstrukturierung oder Sanierung geschieht, bei dem bzw. der die Emittentin noch zahlungsfähig ist und bei (b) If the Issuer decides to defer payment of remuneration otherwise due and payable on a Remuneration Payment Date in accordance with 4(3)(a), the Issuer shall notify the Bondholders in accordance with 11 not less than 10 and not more than 15 Business Days prior to such Remuneration Payment Date. (c) Deferred Remuneration Payments shall not bear interest. (d) The Issuer may pay outstanding Deferred Remuneration Payments (in whole or in part) at any time on the giving of not less than 10 and not more than 15 Business Days' notice to the Bondholders in accordance with 11 (which notice will be irrevocable and will oblige the Issuer to pay the relevant Deferred Remuneration Payments on the payment date specified in such notice). (e) The Issuer will only be obliged to pay outstanding Deferred Remuneration Payments (in whole but not in part) on the earlier of: (i) the occurrence of a Mandatory Payment Event; (ii) the due date for redemption of the Bonds; and (iii) the date on which an order is made for the winding-up, or dissolution or liquidation of the Issuer (other than for the purposes of or pursuant to an amalgamation, reorganisation or restructuring while solvent, where the continuing entity assumes substantially all of the assets and obligations 37

38 dem bzw. der die fortführende Gesellschaft im Wesentlichen alle Vermögenswerte und Verpflichtungen der Emittentin übernimmt) oder an dem ein Konkursverfahren über die Emittentin eingeleitet wird. (f) Definitionen: of the Issuer) or on which bankruptcy proceedings are instituted over the Issuer. (f) Definitions: Obligatorisches Vergütungszahlungsereignis jedes der folgenden Ereignisse: bezeichnet Mandatory Payment Event means any of the following events: (i) eine Dividende, andere Ausschüttung oder Zahlung (einschließlich zum Zweck der Rückzahlung oder des Rückkaufs von Anteilen) auf das Stammkapital der Emittentin wurde beschlossen oder gemacht; (ii) eine Dividende oder andere Ausschüttung auf Gleichrangige als Eigenkapital qualifizierte Wertpapiere oder auf Nachrangige als Eigenkapital qualifizierte Wertpapiere wurde gezahlt; (iii) die Emittentin oder eine ihrer Konzernuntergesellschaften hat Stammkapital der Emittentin (außer im Zusammenhang mit derzeit bestehenden oder zukünftig geschaffenen Aktienoptionsplänen), Nachrangige Wertpapiere oder Gleichrangige Wertpapiere zurückgezahlt, zurückgekauft oder auf sonstige Weise erworben; oder (iv) (A) der geprüfte konsolidierte Jahresabschluss der Emittentin für das letzte abgeschlossene Geschäftsjahr zeigt nach Feststellung, dass die Differenz der Brutto- Investitionsausgaben abzüglich Abwertungen (jeweils wie nachstehend definiert) einen Wert größer als EUR aufweist, oder (B) die Zahlstelle eine Bestätigung des Jahresabschlussprüfers der Emittentin erhält, wonach die in Unterpunkt (A) genannte Bedingung erfüllt ist. Brutto-Investitionsausgaben bezeichnet die Posten "Auszahlungen für (i) a dividend, other distribution or payment (including for the purposes of a redemption or repurchase of shares) was declared or made in respect of any share capital of the Issuer; (ii) a payment or other distribution has been made on any Parity Securities treated as Equity or Junior Securities treated as Equity; (iii) the Issuer or any of its subsidiaries has redeemed, repurchased or otherwise acquired any of its share capital (unless this occurs in connection with any present or future stock option plan), Junior Securities or Parity Securities; or (iv) (A) the Issuer's annual audited consolidated financial statements for its most recently completed financial year are determined showing a difference of Capital Expenditure less Depreciation (each as defined below) being more than EUR 10,000,000, or (B) the Paying Agent receives a certificate from the Issuer's auditors to the effect that the condition in sub-clause (A) above is satisfied. Capital Expenditure means the line items "Disbursements for additions to property, 38

39 Sachanlagenzugang", "Auszahlungen für Zugang Belieferungsrechte und Software" und "Auszahlungen für Zugang Entwicklungskosten" unter der Überschrift "Nettogeldfluss aus laufender Investitionstätigkeit". Abwertungen bezeichnet den Posten Abschreibungen für das jeweilige Geschäftsjahr, in jedem Fall wie ein solcher Posten in der Geldflussrechnung der Emittentin aufscheint. Bezugnahmen in dieser Definition auf Bilanzposten sollen als Referenzen zu solchen anderen gleichwertigen Bilanzposten verstanden werden, welche von Zeit zu Zeit auf die Emittentin nach den Anwendbaren Rechnungslegungsvorschriften anwendbar sind. Dabei muss aber jederzeit der wirtschaftliche Zweck eines Obligatorischen Vergütungszahlungsereignisses 4(3)(f)(iv) (unter Berücksichtigung der relevanten Bilanzposten zum Emissionstag) beachtet werden. (4) Ende des Vergütungslaufs. Der Vergütungslauf der Schuldverschreibungen endet mit Ablauf des Tages, der dem Tag vorausgeht, an dem sie zur Rückzahlung fällig werden. Sollte die Emittentin die Schuldverschreibungen bei Fälligkeit nicht einlösen, endet die Verpflichtung zu Zahlung von Vergütungen auf den ausstehenden Nennbetrag nicht am Fälligkeitstag, sondern erst mit dem Tag der tatsächlichen Rückzahlung der Schuldverschreibungen (ausschließlich). plant and equipment", "Disbursements for intangible assets" and "Disbursements for additions to development costs" under the heading "Net cash flow from investing activities"; and the term Depreciation means the item "Depreciation and amortization" for the relevant financial year, in each case as such line item appears in the annual statement of cash flows of the Issuer. References in this definition to line items may be construed as references to such other equivalent line items as may be applicable from time to time to the Issuer under the Applicable Accounting Standards but always with a view to preserving at all times the commercial effect of the Mandatory Payment Event set out in 4(3)(f)(iv) (having regard to the matters reflected in the relevant line items as of the Issue Date). (4) Cessation of Remuneration Payments. The Bonds shall cease to bear remuneration from the end of the day which precedes the day on which they are due for redemption. If the Issuer fails to redeem the Bonds when due, the obligation to pay remuneration on the outstanding principal amount shall continue to accrue beyond the due date until but excluding the date of actual redemption of the Bonds. 5 5 RÜCKZAHLUNG UND RÜCKKAUF REDEMPTION AND PURCHASE (1) Keine Endfälligkeit. Die Schuldverschreibungen haben keinen Endfälligkeitstag und werden, außer nach Maßgabe dieses 5, nicht zurückgezahlt. (2) Kündigungsrecht der Emittentin und vorzeitige Rückzahlung aus Aufzahlungs-, Steuer- oder Rechnungslegungsgründen. Bei Eintritt eines Aufzahlungsereignisses, eines (1) No Scheduled Maturity. The Bonds have no final maturity date and shall not be redeemed except in accordance with the provisions of this 5. (2) Issuer Call Right and Early Redemption for Gross-up, Tax or Accounting Reasons. If at any time prior to the Step-up Date either a Gross-up Event, an Accounting Event or a 39

40 Rechnungslegungsereignisses oder eines Steuerereignisses ist die Emittentin berechtigt, die Schuldverschreibungen jederzeit (insgesamt, jedoch nicht teilweise) durch eine unwiderrufliche Benachrichtigung der Anleihegläubiger gemäß 11 unter Einhaltung einer Frist von nicht weniger als 30 und nicht mehr als 60 Tagen zu kündigen und (a) im Falle eines Aufzahlungsereignisses zum Nennbetrag zuzüglich aller bis zum Rückzahltag (ausschließlich) aufgelaufenen Vergütungen und aller Vergütungsrückstände, und (b) im Falle eines Rechnungslegungsereignisses oder eines Steuerereignisses zum Vorzeitigen Rückzahlungsbetrag zurückzuzahlen. Dabei gilt für den Fall eines Aufzahlungsereignisses, dass eine solche Kündigungsmitteilung nicht früher als 90 Tage vor dem ersten Tag gemacht werden darf, an dem die Emittentin erstmals verpflichtet wäre, die jeweiligen zusätzlichen Beträge in Ansehung fälliger Beträge auf die Schuldverschreibungen zu zahlen. Vorzeitiger Rückzahlungsbetrag meint den für jede Schuldverschreibung an dem für die Rückzahlung bestimmten Tag (der Vorzeitige Rückzahltag) zahlbaren Betrag, der hinsichtlich einer Kündigung (a) vor dem Erhöhungstag entweder (A) dem Nennbetrag zuzüglich aller bis zum Rückzahltag (ausschließlich) aufgelaufenen Vergütungen und aller Vergütungsrückstände, oder (B) dem Abgezinsten Marktpreis (wie nachstehend definiert) entspricht, je nachdem, welcher höher ist, oder (b) am oder jederzeit nach dem Erhöhungstag dem Nennbetrag zuzüglich aller bis zu diesem Zeitpunkt aufgelaufenen Vergütungen und aller Vergütungsrückstände entspricht. Tax Event occurs, the Issuer may call and redeem the Bonds (in whole but not in part) (a) in case of a Gross-up Event at their principal amount together with any remuneration accrued until but excluding the redemption date plus all outstanding Deferred Remuneration Payments, and (b) at the Early Redemption Amount (as defined below) in case of an Accounting Event or a Tax Event, in each case at any time on giving not less than 30 and not more than 60 days' irrevocable notice to the Bondholders in accordance with 11. In the case of a Gross-up Event no such notice of redemption may be given earlier than 90 days prior to the earliest date on which the Issuer would be for the first time obliged to pay the additional amounts in question on payments due in respect of the Bonds. Early Redemption Amount means an amount payable in respect of each Bond on the date fixed for redemption (the Early Redemption Date), which shall be in respect of any redemption falling: (a) prior to the Step-up Date the greater of (A) its principal amount together with any remuneration accrued to but excluding the Early Redemption Date including any Deferred Remuneration Payments, and (B) its Make Whole Amount (as defined below), or (b) on or at any time following the Step-up Date, its principal amount together with any remuneration accrued thereon including any Deferred Remuneration Payments. 40

41 Wobei folgendes gilt: (i) Angepasste Rendite meint die Anleihen- Rendite zuzüglich %; (ii) Berechnungsdatum meint den vierten Geschäftstag vor dem Vorzeitigen Rückzahltag; (iii) Vergleichbare Anleihenemission bedeutet hinsichtlich eines Vorzeitigen Rückzahltages, die von der Feststellungsstelle nach Rücksprache mit der Emittentin ausgewählte Euro-Referenz- Anleihe mit einer mit der verbleibenden Laufzeit der Schuldverschreibungen bis zum Erhöhungstag vergleichbaren Laufzeit. Dabei handelt es sich um die Rendite einer solchen Euro-Referenz-Anleihe, die im Zeitpunkt der Auswahlentscheidung und entsprechend der üblichen Finanzmarktpraxis zur Preisbestimmung bei Neuemissionen von Unternehmensanleihen mit einer bis zum Erhöhungstag vergleichbaren Laufzeit verwendet würde; (iv) Vergleichbarer Anleihepreis meint (A) den Mittelwert von fünf Quotierungen von Referenzanleihehändlern, wobei die höchste und die niedrigste der Quotierungen von Referenzanleihehändlern nicht zu berücksichtigen ist, oder (B) wenn die Feststellungsstelle weniger als fünf solcher Quotierungen von Referenzanleihehändlern erhält, den Mittelwert dieser Quotierungen von Referenzanleihehändlern; (v) Abgezinster Marktpreis meint den von der Feststellungsstelle für jede Schuldverschreibung festgestellten und auf den nächsten Eurocent gerundeten Betrag in Euro (wobei ein halber Eurocent aufgerundet wird), der der Summe von (A) dem abgezinsten Wert des Nennbetrages der Schuldverschreibung zuzüglich aller Vergütungsrückstände, und (B) den abgezinsten Werten der vorgesehenen Whereby: (i) Adjusted Yield means the Bond Yield plus per cent; (ii) Calculation Date means the fourth Business Day prior to the Early Redemption Date; (iii) Comparable Bond Issue means, with respect to any Early Redemption Date, the euro benchmark security selected by the Determination Agent, after consultation with the Issuer, as having a maturity comparable with the remaining term of the Bonds to the Step-up Date that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the Step-up Date; (iv) Comparable Bond Price means (A) the average of five Reference Bond Dealer Quotations, after excluding the highest and lowest such Reference Bond Dealer Quotations, or (B) if the Determination Agent obtains fewer than five such Reference Bond Dealer Quotations, the average of all such Reference Bond Dealer Quotations; (v) Make Whole Amount means, in respect of each Bond, an amount in euro rounded to the nearest cent (half a cent being rounded upwards), as determined by the Determination Agent, equal to the sum of (A) the then present value of the principal amount of the Bond together with any Deferred Redemption Payments, and (B) the then present values of the scheduled remuneration payments, from and including 41

42 Vergütungszahlungen ab dem Vorzeitigen Rückzahltag (einschließlich) bis zum Erhöhungstag (ausschließlich). Die abgezinsten Werte von (A) und (B) werden errechnet, indem der Nennbetrag der Schuldverschreibungen, Vergütungsrückstände samt Zinsen (wenn solche bezahlt werden) und zuzüglich ab dem Vorzeitigen Rückzahltag (einschließlich) bis zum Erhöhungstag (ausschließlich) vorgesehener Vergütungszahlungen auf jährlicher Basis, unter Zugrundelegung eines Jahres mit 365 bzw. 366 Tagen und der Zahl der tatsächlich in dem Jahr verstrichenen Tage und der Angepassten Rendite (wie oben definiert) abgezinst werden. (vi) Anleihen-Rendite meint den jährlichen Satz, der der jährlichen Rendite bis zur Fälligkeit der Vergleichbaren Anleihenemission entspricht, wobei ein Preis zugrund gelegt wird, der dem Vergleichbaren Anleihepreis am Berechnungstag entspricht. (vii) Primäre Schuldtitelhändler meint jedes Kreditinstitut oder Finanzdienstleistungsinstitut, das regelmäßig mit Anleihen und anderen Schuldtiteln handelt; (viii) Referenzanleihehändler meint entweder die Feststellungsstelle oder jeden anderen Primären Schuldtitelhändler, der von der Feststellungsstelle nach Rücksprache mit der Emittentin ausgewählt wird; und (ix) Quotierungen von Referenzanleihehändlern meint den von der Feststellungsstelle festgestellten Mittelwert der Brief- und Geldkurse für die Vergleichbare Anleihenemission (jeweils als Prozentsatz des Nennbetrages ausgedrückt), wie der Feststellungsstelle gegenüber am Berechnungstag schriftlich durch den jeweiligen Referenzanleihehändler um 11:00 Uhr (Brüsseler Ortszeit) genannt. the Early Redemption Date to and excluding the Step-up Date. The present values of (A) and (B) shall be calculated by discounting the principal amount, any Deferred Remuneration Payments, interest accrued thereon, if any, and the scheduled remuneration payments from and including the Early Redemption Date to but excluding the Step-up Date at the Adjusted Yield on an annual basis, assuming a 365-day year or a 366-day year, as the case may be, and the actual number of days elapsed in such year and using the Adjusted Yield (as defined above). (vi) Bond Yield means the rate per annum equal to the annual yield to maturity of the Comparable Bond Issue, assuming a price equal to the Comparable Bond Price at the Calculation Date; (vii) Primary Bond Dealer means any credit institution or financial services institution that regularly deals in bonds and other debt securities; (viii) Reference Bond Dealer means either the Determination Agent, or any other Primary Bond Dealer selected by the Determination Agent after consultation with the Issuer; and (ix) Reference Bond Dealer Quotations means the average, as determined by the Determination Agent, of the bid and ask prices for the Comparable Bond Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Determination Agent by such Reference Bond Dealer at a.m. (Brussels time) on the Calculation Date. (3) Kündigung und vorzeitige Rückzahlung (3) Issuer Call Right and Early Redemption 42

43 nach Wahl der Emittentin. Die Emittentin kann die Wertpapiere an jedem Vergütungszahltag, der auf oder nach den Erhöhungstag fällt, vollständig, aber nicht in Teilbeträgen nach unwiderruflicher Kündigungsmitteilung an die Anleihegläubiger gemäß 11 unter Einhaltung einer Frist von nicht weniger als 30 und nicht mehr als 60 Tagen zum Nennbetrag zuzüglich der für diesen Vergütungszeitraum bis zum Rückzahltag (ausschließlich) aufgelaufenen ausstehenden Vergütung und aller Vergütungsrückstände kündigen und zurückzahlen. (4) Rückkauf. Die Emittentin und jede ihrer Konzernuntergesellschaften können jederzeit Schuldverschreibungen durch Angebot, auf dem freien Markt oder durch Privatkauf zu jedem beliebigen Preis kaufen, soweit dies gesetzlich erlaubt ist. Derartig erworbene Schuldverschreibungen dürfen eingezogen, gehalten oder veräußert werden. (5) Kündigung und vorzeitige Rückzahlung bei geringfügigem ausstehenden Nennbetrag. Wenn beispielsweise aufgrund von Rückkäufen zu irgendeinem Zeitpunkt der auf die Schuldverschreibungen ausstehende Nennbetrag 25% oder weniger des ursprünglichen Gesamtnennbetrags der Schuldverschreibungen beträgt, darf die Emittentin die restlichen Schuldverschreibungen vollständig, aber nicht in Teilbeträgen nach unwiderruflicher Kündigungsmitteilung an die Anleihegläubiger gemäß 11 unter Einhaltung einer Frist von nicht weniger als 30 und nicht mehr als 60 Tagen kündigen und zum Vorzeitigen Rückzahlungsbetrag zurückzahlen. (6) Kündigung und vorzeitige Rückzahlung bei Kontrollwechsel. Bei Eintritt eines Kontrollwechsels darf die Emittentin die Schuldverschreibungen innerhalb von 60 Tagen ab dem Zeitpunkt, an dem der Kontrollwechsel wirksam wird (der at the option of the Issuer. The Issuer may call and redeem the Bonds (in whole but not in part) on any Remuneration Payment Date falling on or after the Step-up Date at a redemption price equal to their aggregate principal amount plus the accrued and unpaid remuneration for the then-current Remuneration Period to but excluding the date fixed for redemption and any Deferred Remuneration Payments on giving not less than 30 and not more than 60 days' irrevocable notice of redemption to the Bondholders in accordance with 11. (4) Repurchase. The Issuer, or any of its subsidiaries, may purchase Bonds on any date as permitted by law by tender, in the open market or by private agreement at any price. Such acquired Bonds may be cancelled, held or resold. (5) Issuer Call Right and Early Redemption in case of Small Outstanding Principal Amount. In the event that (e.g. due to repurchases) at any time the outstanding principal amount of the Bonds has fallen below 25 per cent of the original principal amount of the Bonds, the Issuer may call and redeem the remaining Bonds (in whole but not in part) at the Early Redemption Amount by giving of not less than 30 and not more than 60 days' irrevocable notice to the Bondholders in accordance with 11. (6) Issuer Call Right and Early Redemption in case of Change of Control. If a Change of Control has occurred, the Issuer may call and redeem the Bonds (in whole but not in part) within 60 days of the Change of Control taking effect (the Effective Date) to redeem 43

44 Wirksamkeitstag) vollständig, aber nicht in Teilbeträgen zum Vorzeitigen Rückzahlungsbetrag nach unwiderruflicher Kündigungsmitteilung an die Anleihegläubiger gemäß 11 unter Einhaltung einer Frist von nicht weniger als 30 und nicht mehr als 60 Tagen zurückzahlen. Die Emittentin hat den Anleihegläubigern den Eintritt eines Kontrollwechsels unverzüglich gemäß 11 anzuzeigen. the Bonds in the period at the Early Redemption Amount by giving of not less than 30 and not more than 60 days' irrevocable notice to the Bondholders in accordance with 11. Immediately after the occurrence of a Change of Control the Issuer has to publish a notice to the Bondholders in accordance with ZAHLUNGEN PAYMENTS (1) Zahlung von Kapital und Vergütungen. Die Emittentin verpflichtet sich, Kapital und Vergütungen auf die Schuldverschreibungen sowie etwaige gemäß 7 zahlbaren Beträge bei Fälligkeit in Euro zu zahlen. Derartige Zahlungen erfolgen an die Zahlstelle zur Weiterleitung an das Clearingsystem oder an dessen Order zur Gutschrift für die jeweiligen Kontoinhaber. Die Zahlung an das Clearingsystem oder an dessen Order, vorausgesetzt, die Schuldverschreibungen werden noch durch das Clearingsystem gehalten, befreit die Emittentin in Höhe der geleisteten Zahlung von ihren entsprechenden Verbindlichkeiten aus den Schuldverschreibungen. (2) Fälligkeitstag kein Geschäftstag. Falls ein Fälligkeitstag für die Zahlung von Kapital und/oder Vergütungen kein Geschäftstag ist, erfolgt die Zahlung erst am nächstfolgenden Geschäftstag; Anleihegläubiger sind nicht berechtigt, eine Vergütungszahlung oder eine andere Entschädigung wegen eines solchen Zahlungsaufschubs zu verlangen. (1) Payment of Principal and Remuneration. The Issuer undertakes to pay in euro, as and when due, principal and remuneration as well as amounts, if any, payable pursuant to 7. Such payments shall be made to the Paying Agent for on-payment to the Clearing System or to its order for credit to the respective account holders. Payments to the Clearing System or to its order shall, to the extent of amounts so paid and provided the Bonds are still held by the Clearing System, constitute a valid discharge of the Issuer from its corresponding obligations under the Bonds. (2) Due Date not a Business Day. If the due date for any payment of principal and/or remuneration is not a Business Day, payment shall be made on the next following Business Day; a Bondholder shall have no right to claim payment of remuneration or other indemnity in respect of such delay in payment. 7 7 STEUERN TAXES Sämtliche Zahlungen von Kapital und Vergütungen in Bezug auf die Schuldverschreibungen werden ohne Einbehalt oder Abzug von Steuern, Abgaben, All payments of principal and remuneration in respect of the Bonds shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments 44

45 Festsetzungen oder behördlicher Gebühren jedweder Art geleistet, die von der Republik Österreich oder einer ihrer Gebietskörperschaften oder Behörden mit der Befugnis zur Erhebung von Steuern auferlegt, erhoben, eingezogen, einbehalten oder festgesetzt werden, es sei denn, ein solcher Einbehalt oder Abzug ist gesetzlich vorgeschrieben. In einem solchen Falle wird die Emittentin solche zusätzlichen Beträge (Zusätzliche Beträge) zahlen, dass die Anleihegläubiger die Beträge erhalten, die sie ohne Einbehalt oder Abzug erhalten hätten. Diese Zusätzlichen Beträge sind jedoch nicht in Bezug auf Schuldverschreibungen zahlbar, (a) die von einem Anleihegläubiger oder in dessen Namen zur Zahlung vorgelegt werden, der solchen Steuern, Abgaben, Festsetzungen oder behördlichen Gebühren in Bezug auf diese Schuldverschreibungen dadurch unterliegt, dass er eine Verbindung zu der Republik Österreich hat, die nicht nur aus der bloßen Inhaberschaft der Schuldverschreibungen besteht; oder (b) die von einem Anleihegläubiger oder in dessen Namen zur Zahlung vorgelegt werden, der einen solchen Einbehalt oder Abzug nach rechtzeitiger Aufforderung durch die Emittentin durch Vorlage eines Formulars oder einer Urkunde und/oder durch Abgabe einer Nichtansässigkeits- Erklärung oder Inanspruchnahme einer vergleichbaren Ausnahme oder Geltendmachung eines Erstattungsanspruches hätte vermeiden können; oder (c) die später als 30 Tage nach dem Tag vorgelegt werden an dem die betreffende Zahlung erstmals fällig wird, oder, falls nicht der gesamte an diesem Fälligkeitstag zahlbare Betrag an oder vor diesem Fälligkeitstag bei der Zahlstelle eingegangen ist, dem Tag, an dem den Anleihegläubigern der Erhalt des Gesamtbetrags nach Maßgabe des 11 bekannt gemacht wurde; oder or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by the Republic of Austria or any of its political subdivisions or authorities that has power to tax, unless such withholding or deduction is required by law. In such event, the Issuer will pay such additional amounts (Additional Amounts) as will result in receipt by the Bondholders of the same amounts as they would have received without such withholding or deduction, except that no Additional Amounts will be payable in respect of any Bond: (a) is presented for payment by or on behalf of a Bondholder who is liable to pay such taxes, duties, assessments or governmental charges in respect of such Bond by reason of it having some connection with the Republic of Austria other than the mere holding of that Bond; or (b) is presented for payment by or on behalf of a Bondholder who would have been able to avoid such withholding or deduction by presenting any form or certificate and/or making a declaration of non-residence or similar claim for exemption or refund upon timely request by the Issuer; or (c) is presented for payment more than 30 days after the date on which the payment in question first becomes due or, if the full amount payable on such due date has not been received by the Paying Agent on or prior to such due date, the date on which notice of receipt of the full amount has been given to the Bondholders in accordance with 11; or 45

46 (d) im Hinblick auf Abzüge oder Einbehalte aufgrund (i) der Richtlinie des Rates 2003/48/EC oder einer anderen Richtlinie der Europäischen Union, welche die Beschlüsse der Versammlung des Rates der Wirtschaftsund Finanzminister der Europäischen Union (ECOFIN) vom 26. bis 27. November 2000 betreffend die Besteuerung von Zinserträgen umsetzt, (ii) einer zwischenstaatlichen Vereinbarung über deren Besteuerung, an der die Republik Österreich oder die Europäische Union beteiligt ist, oder (iii) einer gesetzlichen Vorschrift, die eine solche Richtlinie, Verordnung oder Vereinbarung umsetzt oder befolgt; oder (e) die von einem Anleihegläubiger oder in dessen Namen zur Zahlung vorgelegt werden, der diesen Einbehalt oder Abzug durch Vorlage der Schuldverschreibungen bei einer Zahlstelle in einem anderen Mitgliedstaat der Europäischen Union hätte vermeiden können. Die österreichische Kapitalertragsteuer ist keine Steuer, für die seitens der Emittentin Zusätzliche Beträge zu zahlen sind. Eine Bezugnahme in diesen Anleihebedingungen auf Kapital oder Vergütungen schließt jegliche Zusätzlichen Beträge im Hinblick auf Kapital bzw. Vergütungen ein, die gemäß diesem 7 zahlbar sind. (d) with respect to deduction or withholdings made pursuant to (i) European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 2000 on the taxation of savings income, (ii) any international treaty or understanding relating to such taxation and to which the Republic of Austria or the European Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with, such Directive, Regulation, treaty or understanding; or (e) by or on behalf of a Bondholder who would have been able to avoid such withholding or deduction by presenting the Bond to a Paying Agent in another Member State of the European Union. Austrian withholding tax (Kapitalertragsteuer) does not constitute a tax for which the Issuer is obliged to pay Additional Amounts. Any reference in these Terms and Conditions to principal or remuneration will be deemed to include any additional amounts in respect of principal or remuneration (as the case may be) which may be payable under this VERJÄHRUNG LIMITATION Die Verjährungsfrist aus Ansprüchen auf das Kapital beträgt zehn Jahre. Die Verjährungsfrist aus Ansprüchen auf Vergütungen beträgt drei Jahre. The limitation period shall be ten years in respect of principal and three years in respect of remuneration on the Bonds. 46

47 9 9 BEAUFTRAGTE STELLEN AGENTS (1) Zahlstelle. Erste Bank der oesterreichischen Sparkassen AG ist die anfängliche Zahlstelle (die Zahlstelle). (2) Feststellungsstelle. Erste Bank der oesterreichischen Sparkassen AG wird als anfängliche Feststellungsstelle bestellt (die Feststellungsstelle). (3) Berechnungsstelle. Erste Bank der oesterreichischen Sparkassen AG wird als anfängliche Berechnungsstelle bestellt (die Berechnungsstelle, und gemeinsam mit der Zahlstelle und der Feststellungsstelle, die Beauftragten Stellen). (4) Rechtsverhältnisse der Beauftragten Stellen. Die Beauftragten Stellen handeln ausschließlich als Beauftragte der Emittentin und übernehmen keine Verpflichtungen gegenüber den Anleihegläubigern; es wird kein Vertrags-, Auftrags- oder Treuhandverhältnis zwischen ihnen und den Anleihegläubigern begründet. (5) Ersetzung von Beauftragten Stellen. Die Emittentin behält sich das Recht vor, jederzeit andere Beauftragte Stellen zu beauftragen oder eine solche Beauftragung zu beenden und zusätzliche oder Nachfolger von Beauftragten Stellen zu ernennen. Solange die Schuldverschreibungen nicht zur Gänze zurückbezahlt wurden, wird die Emittentin sicherstellen, dass stets eine Zahlstelle und eine Berechnungsstelle beauftragt sind. Die Emittentin wird ferner gewährleisten, dass solange die Schuldverschreibungen an einer Börse notiert sind, jederzeit eine Zahlstelle in dem Staat beauftragt ist, in dem die Börse ihren Sitz hat, soweit die Regularien dieser Börse dies verlangen. Den Anleihegläubigern werden Änderungen in Bezug auf die Beauftragten Stellen oder ihre jeweils angegebenen (1) Paying Agent. Erste Bank der oesterreichischen Sparkassen AG shall be the initial paying agent (the Paying Agent). (2) Determination Agent. Erste Bank der oesterreichischen Sparkassen AG shall be appointed as initial determination agent (the Determination Agent). (3) Calculation Agent. Erste Bank der oesterreichischen Sparkassen AG shall be appointed as initial calculation agent (the Calculation Agent, and together with the Paying Agent and the Determination Agent, the Agents). (4) Status of the Agents. The Agents act solely as agents of the Issuer and do not assume any obligations towards or relationship of contract, agency or trust for or with any of the Bondholders. (5) Replacement of Agents. The Issuer reserves the right at any time to appoint other Agents or terminate such appointment and to appoint successor or additional Agents. The Issuer will ensure that until all Bonds have been redeemed, a Paying Agent and a Calculation Agent are appointed at all times. Furthermore, for as long as the Bonds are listed on a stock exchange, the Issuer will at all times ensure that a Paying Agent is appointed in the jurisdiction in which such stock exchange is located, where required by the rules of such stock exchange. Notice of any changes relating to the Agents or to their specified offices will be given without undue delay to the Bondholders in accordance with

48 Geschäftsstellen umgehend gemäß 11 mitgeteilt AUFSTOCKUNG INCREASE Die Emittentin kann ohne Zustimmung der Anleihegläubiger weitere Schuldverschreibungen begeben, die in jeder Hinsicht (oder in jeder Hinsicht mit Ausnahme der ersten Vergütungszahlungen und der Bestimmungen in 2(2)) die gleichen Bedingungen wie diese Schuldverschreibungen haben und die zusammen mit diesen Schuldverschreibungen eine einzige Serie bilden. The Issuer may without the consent of the Bondholders issue further Bonds which have the same Terms and Conditions as these Bonds in all respects (or in all respects, except for the first payment of remuneration and the provisions contained in 2(2)) and form a single series with these Bonds MITTEILUNGEN NOTICES (1) Zeitung. Falls die Schuldverschreibungen zum Handel an einer oder mehreren Börsen zugelassen werden, gelten sämtliche Mitteilungen an die Anleihegläubiger als ordnungsgemäß bekannt gemacht, wenn sie in dem Staat einer jeden Wertpapierbörse, an der die Schuldverschreibungen notiert werden, in einer Tageszeitung mit landesweiter Verbreitung veröffentlicht werden, solange diese Notierung fortdauert und die Regeln der jeweiligen Börse dies erfordern. Jede Mitteilung gilt mit dem Tag der ersten Veröffentlichung als bekannt gemacht; falls eine Veröffentlichung in mehr als einer Tageszeitung zu erfolgen hat, ist der Tag maßgeblich, an dem die Bekanntmachung erstmals in allen erforderlichen Tageszeitungen erfolgt ist. (2) Mitteilungen an das Clearingsystem. Mitteilungen an die Anleihegläubiger können anstelle der Veröffentlichung in einer Zeitung nach Maßgabe des 11(1) (vorbehaltlich anwendbarer Börsenvorschriften bzw. -regeln) solange eine die Wertpapiere verbriefende Sammelurkunde für das Clearingsystem (1) Newspaper. If the Bonds are admitted for trading on one or more stock exchanges, all notices to the Bondholders are deemed to be properly published if they are published in a daily newspaper with nationwide circulation in the state of each stock exchange on which the Bonds are listed, for so long as the listing of the Bonds continues and the rules of any such exchange so require. Any such notice shall be deemed to have been given on the date of first publication or, when required to be published in more than one daily newspaper, on the date on which the notice has first been published in all required daily newspapers. (2) Notice to Clearing System. Notices to Bondholders may (subject to applicable stock exchange rules and requirements), so long as a global Note representing the Bonds is held on behalf of the Clearing System, be given in lieu of publication in a newspaper pursuant to 11(1) by delivery of the relevant notice to the Clearing System for communication to 48

49 gehalten wird, durch Abgabe der entsprechenden Mitteilung an das Clearingsystem zur Weiterleitung an die Anleihegläubiger ersetzt werden. the Bondholders ERSETZUNG DER EMITTENTIN SUBSTITUTION OF THE ISSUER (1) Ersetzung. Die Emittentin ist jederzeit berechtigt, ohne Zustimmung der Anleihegläubiger eine andere Gesellschaft, die direkt oder indirekt von der Emittentin kontrolliert wird, als neue Anleiheschuldnerin für alle sich aus oder im Zusammenhang mit den Schuldverschreibungen ergebenden Verpflichtungen mit schuldbefreiender Wirkung für die Emittentin an die Stelle der Emittentin zu setzen (die Neue Anleiheschuldnerin), sofern (a) die Emittentin sich nicht mit einer fälligen Zahlung auf die Schuldverschreibungen in Verzug befindet; (b) die Neue Anleiheschuldnerin sämtliche Verpflichtungen der Emittentin aus oder im Zusammenhang mit den Schuldverschreibungen übernimmt; (c) die Neue Anleiheschuldnerin sämtliche für die Schuldnerersetzung und die Erfüllung der Verpflichtungen aus oder im Zusammenhang mit den Schuldverschreibungen erforderlichen Genehmigungen erhalten hat; (d) die Neue Anleiheschuldnerin in der Lage ist, sämtliche zur Erfüllung der aufgrund der Schuldverschreibungen bestehenden Zahlungsverpflichtungen erforderlichen Beträge in Euro an das Clearingsystem zu zahlen, und zwar ohne Abzug oder Einbehalt von Steuern oder sonstigen Abgaben jedweder Art, die von dem Land (oder den Ländern), in dem (in denen) die Neue Anleiheschuldnerin ihren Sitz oder Steuersitz hat, auferlegt, erhoben oder eingezogen (1) Substitution. The Issuer may at any time, without the consent of the Bondholders, replace the Issuer with another company which is directly or indirectly controlled by the Issuer, as new issuer (the New Issuer) in respect of all obligations arising under or in connection with the Bonds, with the effect of releasing the Issuer of all such obligations, if: (a) the Issuer is not in default of any payment due under the Bonds; (b) the New Issuer assumes any and all obligations of the Issuer arising under or in connection with the Bonds; (c) the New Issuer has obtained all authorizations and approvals necessary for the substitution and the fulfilment of the obligations arising under or in connection with the Bonds; (d) the New Issuer is in the position to pay to the Clearing System in euro all amounts required for the performance of the payment obligations existing in relation to the Bonds without deducting or withholding any taxes or other duties of whatever nature imposed, levied or deducted by the country (or countries) in which the New Issuer has its domicile or tax residence; and 49

50 werden; und (e) die Neue Anleiheschuldnerin sich verpflichtet hat, die Anleihegläubiger hinsichtlich solcher Steuern, Abgaben oder behördlicher Gebühren freizustellen, die den Anleihegläubigern bezüglich der Ersetzung auferlegt werden. (f) alle für die Wirksamkeit der Ersetzung notwendigen Dokumente (die Dokumente) von der Anleiheschuldnerin und der Nachfolgeschuldnerin unterzeichnet werden, entsprechend denen die Nachfolgeschuldnerin zu Gunsten jedes Anleihegläubigers alle Verpflichtungen aus diesen Anleihebedingungen und dem Zahlstellenübereinkommen, welches von der Emittentin mit den Zahlstellen am oder um den abgeschlossen wird, übernimmt, als sei sie von Anfang an Stelle der Anleiheschuldnerin Partei dieser Vereinbarungen gewesen, und entsprechend denen die Anleiheschuldnerin zu Gunsten jedes Anleihegläubigers unbedingt und unwiderruflich die Zahlung aller fälligen und durch die Nachfolgeschuldnerin als Hauptschuldner zahlbaren Beträge garantiert (wobei diese Garantie im Folgenden als Ersetzungs-Garantie bezeichnet wird); (2) Bezugnahmen. Im Fall einer Schuldnerersetzung nach Maßgabe von 12(1) gilt jede Bezugnahme in diesen Anleihebedingungen auf die Emittentin als eine solche auf die Neue Anleiheschuldnerin und jede Bezugnahme auf die Republik Österreich als eine solche auf den Staat, in welchem die Neue Anleiheschuldnerin steuerlich ansässig ist. (3) Bekanntmachung und Wirksamwerden der Ersetzung. Die Ersetzung der Emittentin ist gemäß 11 bekannt zu machen. Mit der Bekanntmachung der Ersetzung wird die Ersetzung wirksam und die Emittentin (und im Falle einer wiederholten Anwendung dieses 12 jede frühere Neue (e) the New Issuer has agreed to indemnify the Bondholders against such taxes, duties or governmental charges as may be imposed on the Bondholders in connection with the substitution. (f) such documents shall be executed by the Issuer and the New Issuer as may be necessary to give full effect to the substitution (together the Documents) and pursuant to which the New Issuer shall undertake in favour of each Bondholder to be bound by these Terms and Conditions and the provisions of a paying agent agreement concluded between the Issuer and the Paying Agents on or around 14 November 2007 (the Paying Agent Agreement) as fully as if the New Issuer had been named in the Bonds and the Paying Agent Agreement as the principal debtor in respect of the Bonds in place of the Issuer and pursuant to which the Issuer shall irrevocably and unconditionally guarantee in favour of each Bondholder the payment of all sums payable by the New Issuer as such principal debtor (such guarantee of the Issuer herein referred to as the Substitution Guarantee); (2) References. In the event of a substitution of the Issuer pursuant to 12(1), any reference in these Terms and Conditions to the Issuer shall be a reference to the New Issuer and any reference to the Republic of Austria shall be a reference to the New Issuer's country of residence for tax purposes. (3) Notice and Effectiveness of Substitution. Notice of substitution of the Issuer shall be published in accordance with 11. The substitution shall become effective upon such publication, and the Issuer (and in the event of a repeated application of this 12, any previous New Issuer) shall be discharged 50

51 Anleiheschuldnerin) von ihren sämtlichen Verpflichtungen aus oder im Zusammenhang mit den Schuldverschreibungen frei. Im Falle einer solchen Ersetzung werden die Wertpapierbörsen informiert, an denen die Schuldverschreibungen notiert sind. from any and all obligations under or in connection with the Bonds. In case of such substitution, the stock exchanges on which the Bonds are listed will be notified ANWENDBARES RECHT UND GERICHTSSTAND GOVERNING LAW AND JURISDICTION (1) Anwendbares Recht. Form und Inhalt der Schuldverschreibungen sowie die Rechte und Pflichten der Anleihegläubiger und der Emittentin unterliegen ausschließlich österreichischem Recht. (2) Erfüllungsort. Erfüllungsort ist Wien, Republik Österreich. (3) Gerichtsstand. Die Emittentin vereinbart zugunsten der Anleihegläubiger, dass das für Wien Innere Stadt zuständige Gericht der Gerichtsstand für alle Klagen, Verfahren oder Rechtsstreitigkeiten gegen die Emittentin, die aus oder im Zusammenhang mit den Schuldverschreibungen entstehen (jeweils Verfahren oder Streitigkeiten), ist. Die Emittentin erkennt diesen Gerichtsstand zu diesem Zweck unwiderruflich an. (4) Verzicht auf Einreden. Die Emittentin verzichtet unwiderruflich darauf, Einwendungen oder Einreden geltend zu machen, die jetzt oder in Zukunft gegen die Vereinbarung vorgebracht werden könnten, dass die für Wien Innere Stadt zuständigen Gerichte der Gerichtsstand für alle Verfahren und Streitigkeiten sein soll, und verpflichtet sich, nicht zu bestreiten, dass diese Gerichte geeignet oder zuständig sind. (5) Nichtausschließlichkeit. Die Gerichtsstandsvereinbarung beschränkt nicht das Recht eines Anleihegläubigers (und wird auch nicht dahingehend ausgelegt), Verfahren vor einem anderen zuständigen Gericht anzustrengen. Ebenso wenig schließt (1) Governing law. The form and contents of the Bonds and the rights and obligations of the Bondholders and the Issuer shall be governed exclusively by, and construed in accordance with Austrian law. (2) Place of Performance. Place of performance is Vienna, Republic of Austria. (3) Jurisdiction. The Issuer agrees for the benefit of the Bondholders that the courts competent for Vienna First District shall have jurisdiction for any actions, proceedings or legal disputes against the Issuer which may arise out of or in connection with the Bonds (Proceedings and Disputes respectively) and, for that purpose, the Issuer irrevocably submits to the jurisdiction of such courts. (4) Waiver of Defences. The Issuer irrevocably waives any objection which it might now or hereafter have to the courts competent for Vienna Inner City being the forum for any Proceedings and Disputes, and agrees not to claim that these courts are not a convenient or appropriate forum. (5) Non-exclusivity. The submission to the jurisdiction of the above courts shall not (and shall not be construed so as to) limit the right of any Bondholder to take Proceedings in any other court of competent jurisdiction, nor shall the taking of Proceedings in any one or 51

52 die Einleitung von Verfahren an einem oder mehreren Gerichtsständen die Einleitung von Verfahren an einem anderen Gerichtsstand aus (gleichgültig, ob diese gleichzeitig geführt werden oder nicht), falls und soweit dies rechtlich zulässig ist. more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by law SPRACHE LANGUAGE Diese Anleihebedingungen sind in deutscher Sprache abgefasst und mit einer Übersetzung in die englische Sprache versehen. Der deutsche Wortlaut ist allein rechtsverbindlich. Die englische Übersetzung ist unverbindlich. These Terms and Conditions are drawn up in the German language and provided with an English language translation. The German version shall be the only legally binding version. The English translation is for convenience only. 52

53 GENERAL INFORMATION ABOUT THE ISSUER GENERAL The legal name of the Issuer is Swietelsky Baugesellschaft m.b.h.. The Issuer's commercial name is "Swietelsky Baugesellschaft m.b.h." or "Swietelsky". The Issuer is registered with the Austrian companies register under FN 83175t. The competent court for registrations is the provincial court Linz (Landesgericht Linz). The Issuer was initially registered with the companies register on 24 June It has been established for an indefinite period of time. The Issuer is a company with limited liability (Gesellschaft mit beschränkter Haftung) incorporated and existing under Austrian law and has its business address at Edlbacherstraße 10, 4020 Linz, Austria. Its telephone number is +43/732/ History and development of the Issuer Swietelsky started out as a small construction company founded by DI Hellmuth Swietelsky in 1936 and developed into an international group with currently more than 6,700 employees. Based on total annual revenue, Swietelsky is the fourth largest Austrian construction company (Source: Deloitte; European Powers of Construction 2006 Analysis of key players and markets in construction). The following summarises key milestones in the Company's history: 1936: Establishment of the road building company "Ing. Hellmuth SWIETELSKY" in Gmunden, Austria. Initially, the focus was placed on road construction and paving. 1937: Relocation of the Company to Linz, Austria. 1938: Start of operation of the Company's own asphalt mixture facility. 1939: Commencement of railroad construction in the area of Vienna, establishment of the Vienna subsidiary. 1941: Establishment of the "Kontinentale Bau" company in Vienna for assignments abroad. 1945: New start after the war. In the following 30 years, the Company grew and services were broadened to most construction branches. Subsidiaries in all Austrian provinces were established and the Company established its position as a leading Austrian construction company in terms of total annual revenues. 1957: The Company was converted into a Ges.m.b.H. & Co. KG (limited liability partnership). 1962: Establishment of a subsidiary in Munich, Germany, with branches in Traunstein and Emmerting. 53

54 1974: Establishment of a central laboratory at St. Martin, Austria to act as "Stateauthorized test institute". Project monitoring included international activities in Mauritania, Cameroon and the former USSR. 1975: Establishment of the "Hoch-Tief-Bau Gesellschaft m.b.h.", Imst (structural-civil and underground-engineering construction company) and award of the Austrian state award (staatliche Auszeichnung), entitling the Company to bear the Austrian state crest. 1987: Conversion into Swietelsky Baugesellschaft m.b.h. (a company with limited liability) to 1999: Establishment of affiliates in Hungary, the Czech Republic, Slovakia, Slovenia and Croatia. 2000: Establishment of an affiliate in Poland. On 8 March 2000, Swietelsky received a quality management certificate according to so-called DIN EN ISO 9001 : to 2005: Strategic acquisition of several construction companies to broaden the services of the Company and establish its presence in all relevant branches of the construction industry. These strategic acquisitions included the purchase of 100 per cent of the shares of construction companies such as Baumeister Karl Sedlmayer GmbH, Kallinger Bau GmbH, C. Peters Baugesellschaft m.b.h., Ing. Rudolf Seibt Gleisbau GmbH, Stollen- und Tunnelbau Ast-Holzmann (Swietelsky Tunnelbau GmbH & Co KG), Ast-Holzmann Tirol Baugesellschaft m.b.h. (A.S.T. Baugesellschaft m.b.h.), Jos. Ertl GmbH, Wadle Bauunternehmung and Georg Feßl GmbH. In 2005, Ms Veronika Hovaguimian (a daughter of the late DI Hellmuth Swietelsky) and her family, as well as Ing. Hellmuth Brustmann and DI Kurt Kladensky (the members of the Issuer's management board) and their families increased through TRIAS Holding GmbH (a holding company; for details see below) their indirect shareholdings in the Issuer by acquiring shares from other members of the family of the late DI Hellmuth Swietelsky. 2006: Establishment of SWIETELSKY d.o.o. Beograd. CORPORATE PURPOSE According to section 2 of the Issuer's articles of association, the corporate purpose of the Issuer comprises inter alia building construction as well as civil and underground engineering business, road building, railway construction, structural engineering/building construction, underground engineering and bridge building and all activities which are necessary or beneficial for the achievement of such corporate purpose. SHARE CAPITAL The Issuer's share capital (Stammkapital) amounts to EUR 7,705,000 and is divided into 7,705,000 shares. The share capital of the Issuer is fully paid-in. 54

55 MAJOR SHAREHOLDERS The Issuer currently has the following shareholders: HPB-Holding GmbH (approximately 3.75 per cent), Thumersbacher Geräteverleih Gesellschaft m.b.h. (8.00 per cent) and TRIAS Holding GmbH (approximately per cent). The shares in HPB-Holding GmbH are currently owned by Ing. Hellmuth Brustmann, one of the two members of the Issuer's management board (Geschäftsführung) and members of his family. The shares in Thumersbacher Geräteverleih Gesellschaft m.b.h. are currently owned by Ms Veronika Hovaguimian and members of her family (including Dr. Andre Hovaguimian, a member of the Issuer's supervisory board (Aufsichtsrat)). The shares in TRIAS Holding GmbH are currently owned by (i) HPB-Holding GmbH (35.41 per cent), (ii) KKL-Holding GmbH, a holding company controlled by DI Kurt Kladensky, who is the second member of the Issuers' management board (28.34 per cent), and the remaining (36.25 per cent) by Ms Veronika Hovaguimian and members of her family (including Dr. Andre Hovaguimian, a member of the Issuer's supervisory board (Aufsichtsrat)). The following chart depicts the shareholders of the Issuer: Ing. Hellmuth Brustmann and members of his family 100 per cent KKL-Holding GmbH (controlled by DI Kurt Kladensky) per cent Ms Veronika Hovaguimian and members of her family 100 per cent HPB-Holding GmbH per cent per cent TRIAS Holding GmbH Thumersbacher Geräteverleih Gesellschaft m.b.h per cent per cent 8.00 per cent Swietelsky Baugesellschaft m.b.h. The transfer of shares in the Issuer requires the consent of 75 per cent of the total outstanding shares. Furthermore, the shareholders have pre-emptive rights (Vorkaufsrechte) with regard to the shares of a leaving shareholder, except in certain limited exceptions, such as the transfer to a spouse or to close relatives, as well as tag-along rights (Mitverkaufsrechte) to sell their shares in conjunction with another selling shareholder, to the extent they do not exercise their pre-emptive rights. RELATIONSHIP AND RELATED PARTY TRANSACTIONS There are no agreements among the Issuer's shareholders relating to the ownership or voting of the Issuer's shares other than described under the heading "Major Shareholders" above. Swietelsky concluded and performed various transactions with affiliated entities in the course of its normal business operations. All transactions involving directors, shareholders 55

56 and employees are carried out on an arm's length basis, in accordance with normal market practice and terms. ORGANISATIONAL STRUCTURE The Swietelsky Group comprises various holdings and subsidiaries in Austria and other European countries. The Group's headquarters are in Linz, Austria. The Issuer is the parent company of the Group and has direct and indirect interests in the following subsidiaries: Subsidiaries in Austria: Subsidiaries abroad: The abbreviation "GF" in the charts above refers to the managing director of the respective company. 56

57 MANAGEMENT AND SUPERVISORY BODIES The Issuer management and supervisory bodies comprise the management board (the Management Board), the supervisory board (the Supervisory Board) and a shareholders' meeting (Generalversammlung) (the Shareholders' Meeting) as foreseen by the Austrian Companies with Limited Liability Act (Gesetz über Gesellschaften mit beschränkter Haftung). The current Supervisory Board comprises five members. The Supervisory Board exercises control over the Management Board and performs such other duties as provided by law and by the articles of association. The Supervisory Board may inter alia request at any time from the Management Board any information or report on the affairs of the Company, including its relations to a group company, but may not appoint or remove members of the Management Board, which is a prerogative of the Shareholders' Meeting. The Shareholders' Meeting is the supreme body of the Issuer, as foreseen by the Austrian Companies with Limited Liability Act. It appoints and recalls the members of the Management Board and determines their remuneration as well as their terms of employment. The Shareholders' Meeting also approves the annual financial statements and discharges the members of the Management Board from their liability. It may deal with any company matter and give the members of the Management Board binding instructions on management issues. Certain important matters are specifically reserved for approval by the Shareholders' Meeting. Management Board Members of the Management Board are appointed by notarized shareholders' resolution. A member of the Management Board may be removed by shareholders' resolution at any time, however, without prejudice to his rights under existing contracts. Strategy and day-to-day management of the Issuer rests with the Management Board, which represents the Issuer externally. The articles of association of the Issuer provide that the Company can be represented either jointly by two members of the Management Board (Geschäftsführer) or by one member of the Management Board together with a person holding a general power-of attorney (Prokurist). However, any notice given to or document served upon any of the members of the Management Board generally has a binding effect on the Company. The Management Board currently consists of two members, Ing. Hellmuth Brustmann who handles the railway and railway related activities and DI Kurt Kladensky who is in charge of the remaining activities of the Company. Ing. Hellmuth Brustmann Mr Brustmann was born in 1949 and is working for the Issuer since the completion of a school for higher technical education (Höhere Technische Lehranstalt) in

58 DI Kurt Kladensky Mr Kladensky was born in He completed his studies of construction engineering at the Vienna University of Technology in From 1968 to 1969 he worked as a structural engineer for voestalpine AG. Since 1969 he is working for the Issuer. The members of the Management Board can be contacted at the address of the Issuer, Edlbacherstraße 10, 4020 Linz, Austria. It should be noted that in addition to his functions as a member of the Management Board, DI Kurt Kladensky is also: Chairman of the management board of GESTRATA (Gesellschaft zur Pflege der Straßenbautechnik mit Asphalt), and Member of the management board of VIBÖ (Vereinigung industrieller Bauunternehmungen Österreichs). These assignments do not present a conflict of interest and occupy only a fraction of the time of DI Kurt Kladensky. Members of the Supervisory Board Members of the Issuer's Supervisory Board are Dr. Richard Schenz, former chairman of the management board of OMV Aktiengesellschaft and currently "Kapitalmarktbeauftragter der Österreichischen Bundesregierung"; Dr. Günther Grassner, attorney-at-law and senior partner of the law firm Grassner, Lenz, Thewanger und Partner in Linz; Dr. Andre Hovaguimian, former Director for Central Asia, Middle East and North Africa of IFC International Finance Corporation, a Member of the World Bank Group; Johann Karmedar, member of the Issuer's work council; and Werner Klement, member of the Issuer's work council. (the last two being appointed in accordance with the Austrian Labour Constitutional Act (Arbeitsverfassungsgesetz)). The members of the Supervisory Board can be contacted at the address of the Issuer, Edlbacherstraße 10, 4020 Linz, Austria. Audit committee The Issuer has no audit committee. However, the Supervisory Board as a whole reviews in detail the Company's financial statements for consideration by the Shareholders' Meeting. Administrative, Management, and Supervisory Board's conflicts of interests Swietelsky is not aware of any potential conflict of interest between the duties to Swietelsky by the persons listed above and their private duties and/or other duties. There are no family ties between members of the Management Board and the Supervisory Board. 58

59 Austrian Corporate Governance Rules The Austrian Corporate Governance Code (the ACGC) is not mandatory under Austrian law, but is recommended and customary for listed Austrian stock corporations. The ACGC however, is neither designed nor suitable for Austrian companies with limited liability such as the Issuer and the Issuer has thus not submitted a formal statement of compliance with the rules of the ACGC. Nonetheless, the Issuer complies - to the extent applicable to companies with limited liability - with many "comply-or-explain" provisions of the ACGC. The Issuer however does not comply, for instance, with rule 6 of the ACGC, which requires the publication without undue delay of voting results of shareholders' meetings on its website. Intellectual property and brand names The trade mark and brand name "Swietelsky" is adequately protected by law and currently the Company is not aware of any conflicts with or infringements of third party rights. Statutory auditors The audited consolidated financial statements notes thereto, included in the annexes 1 and 2 of this Prospectus have been audited by KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Linz, (KPMG), as indicated in the audit opinion with respect thereto. KPMG has issued an unqualified audit opinion on the audited consolidated financial statements dated 14 July 2006 for the business year 2005/2006 and dated 16 July 2007 for the business year 2006/2007. KPMG is a member of the Austrian Chamber of Chartered Accountants (Kammer der Wirtschaftstreuhänder Österreich). No auditors have resigned, been removed or not been re-appointed during the period covered by the historical financial information. 59

60 BUSINESS OF THE ISSUER CORPORATE PRINCIPLES The Swietelsky group has established itself in Austria and Central Europe by relying on five key corporate principles: Problem solving: The Group aims at maintaining competent and motivated staff that is able to provide customers with cost effective solutions in all areas of the construction industry at competitive costs. Customer satisfaction: The Group believes in a mutually profitable business relationship with its customers through a fair and ethical cooperation which fulfils their objectives and expectations. Repeated business is one of the Group's strengths for which a satisfied customer is a necessary prerequisite. Social responsibility: The Group believes in fair competition and is aware of its social responsibility to the public and the environment. It also emphasises ethical standards, both internally and externally. Financial strength: The Group believes that, particularly in the construction business, it is essential to maintain at all times the confidence of customers and financial markets by maintaining solid financial results. Entrepreneurial staff: The principle of staff who takes personal involvement in their projects stands at the forefront of the Group's staff policy/rewards. This is aimed to be achieved through a largely decentralized organization which promotes independent actions, rewards entrepreneurial spirit through a profit sharing in the Company's financial success and a continued training program to promote business thinking. To that effect, the Group maintains management information systems to measure the financial performance of all divisions, branches and subsidiaries which are organized as independent profit centres. GROUP OBJECTIVES In the last five years, the Group acquired several construction companies and established subsidiaries in a number of countries. The objective of the Group was to broaden its services both geographically and functionally and establish its presence in all relevant branches of the construction industry. This strategy led to a significant increase of the Group's business volume and its profitability (Source: Company). The Group intends to continue to focus on consolidating growth and on further improving its margins and business results. Therefore, particular attention will be given to the reduction of the central operations costs and to the increase of productivity in the handling of construction projects. The Management Board also intends to focus on the identification and avoidance of unprofitable projects. In its business segment railway construction, the Group's objective is to consolidate its strong position in the European market by further growth and innovation. To that effect, the upgrade and further development of the modern multi-tasking equipment have been 60

61 accelerated by the Group and are likely to continue over the next few years. In the view of the Issuer, this would place the Group in a state of readiness in the application of new technologies and techniques. The expansion of the Group's rail services in terms of transportation and logistics services could also permit a further expansion of that business segment, according to the opinion of the Issuer. BUSINESS SEGMENTS The activities of the Group cover the whole spectrum of the construction industry and related services. The Issuer divides its business in six categories (road construction, building construction, civil engineering/construction, railways, tunnels and bridge construction). The following provides an overview on the Issuer's business segments: Road construction Swietelsky started its business over 70 years ago as a road construction company. Today, Swietelsky is a company engaged in building roads, highways, airport landing strips, mountain path/roads, as well as parking lots and squares in countries such as Austria, Germany, Hungary, Czech Republic, Romania, Croatia, Serbia and Slovakia. Since the beginning of its business, Swietelsky operated its own asphalt mixing plants. Today, the Company produces over two million tonnes of asphalt per year in more than 40 asphalt mixing plants covering all key markets in which the Company operates. This coverage allows the Company to be effective in recycling and re-using raw material. Asphalt is primarily used by the Issuer, and a small quantity is sold to third parties. Road construction accounted for 28 per cent of the output volume of the Group in the business year 2006/2007. As in previous years, this was the largest segment of the Issuer's business. Building construction For several decades, Swietelsky has been involved in building construction projects of various sizes and complexity in Austria and abroad. These projects included the construction of office buildings, hotels, hospitals, shopping malls, plants and industrial buildings, apartments and single family houses. The Group is also involved in the renovation and remodelling thereof. The Group and its specialized teams are also successful in promoting, planning, financing, and marketing real estate projects in Austria and abroad. The Issuer's business segment of building construction (Building Construction) amounted to 24 per cent of the output volume of the Group in the business year 2006/2007 and together with civil engineering/construction (see below) was the second largest segment of its business. 61

62 Civil Engineering/Construction In the Issuer's opinion the Group is among the leading companies of the industry in the field of civil engineering/construction (Civil Engineering/Construction) in the markets where it operates. Over the years, the Group has earned experience in the construction of subways, power plants, highways and bridges requiring advanced construction techniques and methods. The Group is a well positioned market participant in various areas such as securing slopes, retaining walls, pilings, and anchoring required in construction of subway stations, roads or foundations of high rise buildings. Furthermore, in the area of environmental protection and technology, the Group is active in the establishment and repair of waste disposal facilities, canal works, water purification plants and the building of dumps. Given the growing importance of environmental protection, this field of activities has developed into an important international component of the Group's business. One of the Group's subsidiaries, Hoch-Tief-Bau Gesellschaft m.b.h. Imst, specializes in high altitude work in the Alps in Western Austria and the neighbouring regions of Italy, in particular in the area of avalanche control including the construction of avalanche galleries and barriers, the controlled inducement of avalanches with explosives, artificial snow production and the construction of cable-cars and lifts and shelters. For decades, a further activity of the Group in Civil Engineering/Construction has been the building, repair and upgrade of sports grounds and leisure facilities, including ball game facilities, gyms, ice-curling alleys, golf courses, and swimming-pools. The Group has a specialized team for this business. In large projects in highway and public building construction, Public Private Partnership (PPP) models are gaining increased importance. In such projects, the Group has to take care not only of the construction of the project but also its structuring, financing and revenues collection. The Group has therefore established specialized teams for these functions. Civil Engineering/Construction accounted to 24 per cent of the output volume of the Group in the business year 2006/2007 and this business segment ranked together with Building Construction as the second largest segment of the Group's business. Railways Swietelsky has a 70-year continuous experience in the railway business (Railways) and considers itself to be a leading company in Europe in this field in terms of market share. The Group has modern multi-tasking equipment which is capital intensive and operated by skilled technical personnel. Activities in this sector entail: Project engineering and the new building and reconstruction of railway embankments and turnouts. The European objective to move some of the traffic volume from the 62

63 roads into rail is likely to result in the development of additional projects in this field. In the Issuer's opinion, the Group should be able to compete in these projects thanks to its modern equipment, which can complete up to 2,400 linear meters of finished rails per shift and upgrade/reconstruct existing tracks to meet the constantly higher standards required in this field. Track-bounded substructure rehabilitation, which is a prerequisite for a lasting, loadcarrying capacity of the tracks. The modern systems, equipment and techniques used by Swietelsky bring major advantages to its customers, including significant material saving by on-site recycling of the ballast on the multi-tasking equipment, high performances and, related to it, long distances completion within a short time. Tamping of tracks and turnouts: The Group uses up-to-date equipment for a fast and efficient execution of these works to ensure the maintenance of existing railway tracks. Tram and subway construction: In the opinion of the Issuer, increasing traffic within cities should give trams and subways an increasing importance. Swietelsky is active in this field directly and in cooperation with other contractors in the construction of tunnels and the building of rails. The building of slap track systems: The Group offers different ways to build firmer track system which substitute the classical ballast and which are needed for high speed trains as well as trams and subways. Illustrative examples of the Group's railway work in the year 2006 included the: refurbishing of more than 120 km of railways; construction and reconstruction of 160 km of new and existing tracks; tamping of more than 1,000 turnouts and 1,100 km of tracks; and construction and reconstruction of 270 pieces of new and existing turnouts In addition, since 2005 Swietelsky has established itself with its subsidiary, the RTS Rail Transport Service GmbH, as a railway traffic enterprise in Austria and Germany and is in the position to transport rail construction equipment, optimize the logistics of its construction work, and avail its customers with various services in this field. Railway activities accounted for 19 per cent of the output volume of the Group in 2006/07 and ranked as the fourth segment of its business. The railway construction is however the fastest growing business segment of the Group. Tunnels In the business segment of galleries and tunnels the Group operates through its subsidiary, Swietelsky Tunnelbau GmbH & Co KG, which is involved in the construction and the repair and maintenance of galleries and underground reservoirs. These include galleries for hydropower projects, as well as tunnels for railway and tramway. 63

64 The Group's galleries and tunnels activities accounted for 3 per cent of the output volume in the business year 2006/2007 and ranked as the fifth largest segment of its business. Bridge construction Swietelsky has decades of experience in building and renovating bridges of all dimensions and in various levels of technical difficulties. The Group's activities in this field comprise the construction and maintenance of arch bridges, composite material bridges and pre-stressed concrete bridges. Swietelsky's bridge building and maintenance activities accounted for about 2 per cent of the output volume of the Group in the business year 2006/2007 and ranked as the sixth largest segment of its business. Bridge construction is however gaining increased importance. LOCATIONS The headquarters of the Group are located in Linz, Austria. The Group has also branches and offices in all provinces of Austria and a number of subsidiaries which ensures its country-wide market presence in Austria in all sectors of the construction industry. In 1962, the Group established its first foreign subsidiary to expand operations into Germany in the larger Munich area. At present, Swietelsky is active in all its construction activities in Southern Germany and the region of Saxony. Certain business segments are covered country-wide in Germany, notably the railway sector, canal works, and waste disposal construction. 64

65 Since the beginning of the 1990s, the Group's foreign activities were concentrated on the emerging states of Central and Eastern Europe. Business in Hungary and the Czech Republic was expanded to achieve presence in the entirety of these markets. In addition, Swietelsky is present in the markets of new and future EU member countries and candidates, namely Slovakia, Romania, Croatia, Poland, Serbia and Slovenia through subsidiaries. Swietelsky has also established an affiliate company in the United Kingdom involved in the railway sector. Finally, since about a year the Northern Italian market is being promoted through the establishment of newly founded subsidiaries, HTB Italia and SND Italia, which operate in the regions of Southern Tyrol and Trentino. The Group's railway business covers all of the Italian market. EMPLOYMENT The average number of employees in the business year 2006/2007 was 6,776, thereof 4,755 labourers and 2,021 salaried employees. During the current business year 2007/2008, the total number of employees is expected to rise to over 7,000. Result-oriented employees constitute a central element of the long-term strategy of the Group. Therefore, the Group offers - apart from other initiatives - a program for young specialists and leading staff to foster talent and bind them closely to the Company to fill internally important future positions. Through presentations by experts from inside and outside the Group, employees are offered programs of continued education in technical and legal subjects as well as fostering personal growth. Particular attention is given to safety and accident prevention on construction sites. Safety and health of employees are central concerns of the Group. TECHNOLOGY AND INNOVATION The Group has established an independent test centre which checks and monitors the compliance with norms and quality of asphalt and concrete. It also undertakes chemical analysis of water, run-off water, soil and hazardous substances for waste facilities and earth moving. The independent test centre also performs field tests and is an accredited test and monitoring centre by Austrian authorities to issue certified test and inspection reports. The centre therefore performs an important role in construction techniques and environmental protection of the Group. Swietelsky is a member of the "Christian Doppler Society" and collaborates with its laboratory for the "optimization of flexible roads". The laboratory is engaged in researching the complex characteristics of asphalt and developing computer models of pavement under 65

66 heavy mechanical and thermal loads. This work aims at building better roads and developing new paving materials. Also, to further technology and innovation in the railroad sector, the Group cooperates closely with Plasser und Theurer, Export von Bahnbaumaschinen Gesellschaft m.b.h., a manufacturer of railroad construction machines. SUPPLIERS OF RAW MATERIALS AND EQUIPMENT To foster competition and in line with market practice, the Group has a diversified basis of external suppliers for its raw material and equipment to ensure that these are delivered on a timely basis and competitive terms and conditions. Moreover, the Group operates, alone or within a consortium, over forty asphalt mixing plants in Austria, Bavaria, the Czech Republic, Hungary, the Slovak Republic and Croatia. A large number of these are also equipped with recycling facilities for old asphalt. The Group also produces ready-mix concrete and holds shares in four concrete mixing plants in Austria. Finally, the Group's requirements for raw material are covered by numerous quarries and gravel producing plants, thereby providing the Group with diversified sources of raw material and equipment for its commercial activities. PROTECTION OF THE ENVIRONMENT During all phases of its projects, Swietelsky pays attention to protect the environment by using environment-friendly equipment, reducing noise levels, shocks, dust and other emissions. The Issuer sees at this moment no threats to the environment that could impede its capacity to fulfil its obligations under the Bonds. As this situation may change, potential investors should read the "Restrictive Statutory Provisions" in the "Risk Factors" section. MATERIAL CONTRACTS In the usual course of its business, Swietelsky enters into numerous contracts with various other entities. Swietelsky has not, however, entered into any material contracts outside the ordinary course of its business within the past two years. LEGAL PROCEEDINGS The Issuer and its subsidiaries are parties to lawsuits and administrative proceedings before various courts and governmental agencies arising from the ordinary course of business involving various contractual, labour and other matters. The Issuer believes that the ultimate effect of these proceedings will not have a material adverse impact on the Issuer's financial position or results of operations. 66

67 MATERIAL CHANGES / TREND INFORMATION There has been no material adverse change in the prospects of the Issuer since the date of its last published audited financial statements. The Issuer is not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the Issuer's prospects for at least the current business year. RECENT EVENTS AND OUTLOOK No recent events exist which are to a material extent relevant to the evaluation of the Issuer's solvency/business activities. No negotiations with regard to a possible change of control (as defined in the Terms and Conditions) are currently taking place. No major acquisitions have taken place since the end of the last business year and no major acquisitions are currently under consideration by the Issuer. The Issuer is however finalizing a smaller acquisition, namely that of the construction company Petri Hoch- Tiefbau GesmbH & Co KG, Wiener Neustadt. This acquisition has been approved by the Supervisory Board of the Issuer and has been filed for non-objection with the Austrian competition authority. The Issuer does not deem this to be a major investment due to the relatively small size of Petri Hoch- Tiefbau GesmbH & Co KG (approximately 50 employees; annual revenues of approximately EUR 6 mn) and expects that it will not be objected to by the Austrian competition authority. 67

68 MARKETS AND SECTOR ENVIRONMENT 2 The Issuer operates via branches and subsidiaries in the following markets and, on a project-related basis, also directly from Austria. The total output volume of the Group increased in the business year 2006/2007 by about 14.7 per cent to more than EUR 1,277 mn and was geographically distributed as follows: (in EUR thousand) Country 2006/ /06 Austria 655, ,343 Hungary 241, ,850 Czech Republic 149,527 96,839 Germany 138, ,461 Romania 31,410 3,274 Croatia 20,470 14,976 Poland 18,110 9,615 United Kingdom 11,829 0 Slovakia 6,707 3,360 Serbia 3,228 0 Total European Union 1,253,398 1,098,742 Total remaining Europe (Croatia and Serbia) 23,698 14,976 Total output volume 1,277,096 1,113,718 Source: Company Austria The Austrian economy grew by 3.2 per cent in the year For 2007, a further growth of approximately 3 per cent is expected. The Austrian construction industry benefited in total from the positive economic situation and develops in a dynamic way: The actual construction volume increased in 2006 by 5.5 per cent and growth in the year 2007 is expected to be around 4.5 per cent. However, the profit situation in Austria tightened: Whereas the building price index increased by 3 per cent in 2006 compared to the previous year, building costs increased by approximately 6.5 per cent compared to The construction performance of the Austrian members of the Group increased in the business year 2006/2007 by approximately 18 per cent to EUR mn (Source: 2 The contents of this chapter "Markets and sector environment" are, where not otherwise stated, derived from "Euroconstruct Conference; Country Report Austria, Prague, June 2007". 68

69 Company). Therefore, Austria remains to be the most important regional market of the Group with approximately 50 per cent of its total construction performance. In terms of business segments, the output volume of the Group in Austria in the business year 2006/2007 was the following: Total in EUR Building Construction Bridge Construction Tunnels Road Construction Railways Civil Engineering/ Construction Output Volume 655,970,646 Share 28.43% 2.03% 5.71% 16.07% 23.66% 24.10% Hungary The Hungarian construction industry felt the impact of low investments by public authorities in the year Investments in building construction and underground engineering dropped by 1.7 per cent, mainly due to a decline in residential construction and underground engineering. In line with the above, the Issuer's total output volume in Hungary decreased by 26 per cent, compared to its previous business year. This larger than national decrease was however due to the fact that two major projects were completed by the Group in the previous business year. With a share of 19 per cent in the total output volume of the Group, Hungary is the third largest regional market of the Issuer. In terms of business segments, the construction performance of the Group in Hungary in the business year 2006/2007 was the following: Total in EUR Building Construction Bridge Construction Tunnels Road Construction Railways Civil Engineering/ Construction Output Volume 241,759,617 Share 27.65% 0.87% 0.00% 39.39% 13.61% 18.47% The Issuer expects for the current business year 2007/2008 a further decrease of its output volume in Hungary, resulting from the continuation of the restrictive spending policy adopted by the Hungarian government. Czech Republic The Czech Republic and especially its construction industry achieved in the year 2006 a strong economic growth. The main reasons of the positive development were inter alia the fast growth of foreign investments and the favourable changes of the Czech economy. The Issuer had a total construction work of approximately EUR 150 mn in the Czech Republic in the business year 2006/2007. This represented a growth rate of 54 per cent compared to the previous business year. With a share of 12 per cent in the total output volume of the Group, the Czech Republic is the third largest regional market of the Issuer. 69

70 In terms of business segments, the output volume of the Group in the Czech Republic in the business year 2006/2007 was the following: Total in EUR Building Construction Bridge Construction Tunnels Road Construction Railways Civil Engineering/ Construction Output Volume 149,527,337 Share 17.25% 5.20% 0.00% 47.95% 0.32% 29.28% Germany In the year 2006, investments in building construction and underground engineering grew significantly faster than the German total gross domestic product with a growth rate of 4.1 per cent and 4.6 per cent compared to This resulted from the recovery of the German construction industry which, in recent past, faced constant declines until The Issuer's output volume in all business segments increased by 38 per cent in the business year 2006/2007 as compared to the previous business year. Germany was the fourth important regional market of the Issuer in the business year 2006/2007 with approximately 11 per cent of the Issuer's total output volume. In terms of business segments, the construction performance of the Group in Germany in the business year 2006/2007 was the following: Total in EUR Building Construction Bridge Construction Tunnels Road Construction Railways Civil Engineering/ Construction Output Volume 138,084,367 Share 6.92% 0.99% 0.00% 40.24% 19.94% 31.91% Other countries Next to the four main markets (Austria, Hungary, Czech Republic and Germany), the Issuer currently has business presences in Romania, Poland, Croatia, the United Kingdom, Slovakia and Serbia. These countries account for a total of approximately 7 per cent of the Issuer's total output volume. In terms of business segments, the output volume of the Group in these countries in the business year 2006/2007 was the following: Total in EUR Building Construction Bridge Construction Tunnels Road Construction Railway s Civil Engineering/ Construction Output Volume 91,754,173 Share 21.31% 0.00% 0.00% 27.49% 36.71% 14.49% 70

71 Romania Romania's construction industry (2.5 per cent of the Issuer's total construction work) has grown for years at above average rates compared to the Romanian gross domestic product. The Issuer expects growth to continue in the coming years, with a peak in the years 2007 and Positive developments may come from the sector of building construction and infrastructure construction. Croatia Croatia's construction industry (1.6 per cent of the Issuer's total output volume) has grown in the past years at above average rate compared to the Croatian gross domestic product. The peak is likely to have been reached, because of the strong growth of the residential construction and infrastructure projects in the last two years. For the coming years, it is expected that the growth dynamic will slightly decelerate. Poland Poland's construction industry (1.4 per cent of the Issuer's total output volume) has grown at above average rate compared to the Polish gross domestic product. For the year 2007, a growth rate of 10.6 per cent is expected. The strongest growth rate in Poland is likely to occur in the underground engineering sector. United Kingdom The Issuer is predominantly active in the United Kingdom (0.9 per cent of the Issuer's total output volume) in the area of railway sector, where the Issuer is providing services and know-how to the British Rail Company whose strategic focus was on modernisation and renovation. In the year 2006, investments in the United Kingdom in the field of railroad construction were nearly unchanged compared to the previous year. For 2007 and the coming years, a slight increase is expected. Slovakia In Slovakia (0.5 per cent of the Issuer's total output volume), investments in the construction industry in the year 2006 increased by 15.3 per cent compared to the previous year. The Issuer believes that the peak was already reached in the year A decrease in the growth rate is expected for the coming years. Serbia Construction activity in Serbia (0.3 per cent of the Issuer's total output volume) grew constantly in the past years. Bilateral and EU programmes, especially the infrastructure construction are increasing. The demand for further modernisation and renovation still remains high. For instance, the Serbian railway system has not had any meaningful investment since the early 1970's. Also there is further potential for investments in the areas of the road network, as well as in building construction. The Issuer is therefore actively investigating projects in that country with secured financing. 71

72 SELECTED FINANCIAL INFORMATION OF THE ISSUER The table below shows highlights of the audited consolidated financial data for the business years 2005/2006 and 2006/2007. Swietelsky prepares its annual consolidated financial statements on the basis of International Financial Reporting Standards (IFRS): (in EUR million) Financial Information Definition 1/4/2005 to 31/3/2006 1/4/2006 to 31/3/2007 Revenues Average number of employees Total revenues for the period after rebates and returns Average number of employees of Swietelsky , ,981 6,776 Equity Share Capital plus Retained Earnings Cash flow (from operating activities) EAT adjusted for non-cash income and non-cash expenses + changes in working capital + changes in provisions + changes in deferred tax Total Balance sheet Total assets Liabilities Total liabilities excluding provisions EBIT Earnings before financial result and before result from financial instruments and income taxes EBIT Margin (in %) ratio of EBIT to revenues EBT Earnings before income taxes ROCE (in %) ROE (in %) EAT Return on Capital Employed, computed as: EAT + interest expenses x (1 tax rate) / (average equity capital + average interest-bearing financial liabilities (excl. liabilities from financial instruments)) Return on Equity, ie ratio of EAT to average equity capital Earnings after taxes (including income from financial instruments)

73 Short-term Liabilities Liquid Assets Total of provisions and liabilities with a duration of less than 1 year Liquid funds including cash at banks, petty cash and cheques received Source: Annual consolidated financial statements of the Company as of 31 March 2006 and 31 March All figures provided above have been audited or derived from audited figures prepared in accordance with IFRS. The average is calculated as the balance at the beginning of the business year plus balance at the end of the business year, divided by two. No financial information is provided for interim periods. COMPARISON OF CASH FLOWS FOR THE BUSINESS YEARS ENDED 31 MARCH 2007 AND 31 MARCH 2006 The table below summarises Swietelsky's cash flows for the business years ended 31 March 2007 and 31 March 2006: (in EUR thousand) Financial Information 1/4/2005 to 31/3/2006 1/4/2006 to 31/3/2007 Earnings after taxes 19,276 26,416 Deferred taxes 1,397 1,365 Non cash results from associated companies 833-2,926 Increase/Decrease 14,874 15,345 Change in long-term provisions 637 1,769 Profits/losses from sale/disposal of assets ,240 Cash-flow from profits 36,082 40,729 Change in items: Inventories -6,034-4,740 Receivables from trade, construction contracts and joint ventures -35,981-70,715 Group receivables and receivables from affiliates 2,410-3,940 Other assets 829-2,628 Liabilities from trade, construction contracts and joint ventures 1,236 54,528 Group liabilities and liabilities to affiliates 5,600-1,423 Other liabilities 11,139 1,749 Short-term provisions -3,812 9,468 Cash-flow from operating activities 11,469 23,028 73

74 Acquisition of financial assets -28,240-29,965 Profits/losses from sale/disposal of fixed Assets 935 1,240 Reduction of fixed assets at book value 6,643 5,686 Exchange rate differences and changes in consolidation circle minus acquired cash and cash equivalents 2, Cash-flow from investing activities -17,680-22,918 Changes in bank liabilities 7,172 18,328 Changes in bond loans 29, Changes in liabilities from finance leases -2,361-1,033 Changes in group financings 0-8,337 Distribution of company profits -28,896-5,600 Cash-flow from financing activities 5,171 3,201 Cash-flow from operating activities 11,469 23,028 Cash-flow from investing activities -17,680-22,918 Cash-flow from financing activities 5,171 3,201 Net changes in cash and cash equivalents -1,040 3,311 Cash and cash equivalents at the beginning of the business year 11,039 10,102 Changes in cash and cash equivalents due to exchange rate differences Cash and cash equivalents at the end of the business year 10,102 13,593 Additional information on cash flows: Interest paid 3,454 6,349 Interest received 1,435 1,594 Taxes paid 7,457 2,721 Source: Annual financial statements of the Company as of 31 March 2006 and 31 March All figures provided above have been audited or derived from audited figures prepared in accordance with IFRS. Cash flow from profits The Issuer's cash-flow from profits increased from approximately EUR 36.1 mn in the business year 2005/2006 to approximately EUR 40.7 mn in the business year 2006/2007 mainly reflecting the increase in profit for the period. Non cash results from associated 74

75 companies had an influence of EUR -2.9 mn due to increased profits of associated companies without cash inflow in the period 2006/07. Cash flow from operating activities The cash-flow from operating activities grew by nearly 101 per cent to approximately EUR 23.0 mn, thus fully covering the requirements for investing activities of approximately EUR 22.9 mn. This increase was mainly due to changes in working capital, especially the increase of liabilities from trade, construction contracts and joint ventures by EUR 53.3 mn, while receivables from trade, construction contracts and joint ventures increased only by EUR 34.7 mn. Cash flow from investing activities Cash flow from investing activities was influenced by increased investing activities and a decrease of exchange rate differences and changes in consolidation circle minus acquired cash and cash equivalents and the decrease of reduction of fixed assets at book value. Cash flow from financing activities Cash flow from financing activities was EUR 3.2 mn. This was mainly the result of cash inflow from bank liabilities of EUR 18.3 mn, while dividends and cash outflow from group financings amounted to EUR 13.9 mn. The liquid funds as of the end of the business year 2006/2007 amounted to nearly EUR 13.6 mn, representing an increase of 34.6 per cent compared to the previous business year. Please see the audited financial statements as of 31 March 2007 attached as Annex 1 for further information. Liquidity and capital resources Swietelsky's primary sources of liquidity have been free cash-flow, bank borrowings and the issuance of a senior bond in the business year 2005/06 via a private placement. Swietelsky's need for liquidity in the current business year will arise primarily from working capital requirements. Swietelsky expects that the majority of its liquidity and financing needs in the next three years will be funded by the same means as mentioned above. Summary of commitments As of 31 March 2007, the Group had an outstanding financial liability of approximately EUR mn (2005/2006: EUR mn) of, including a senior bond issued in the business year 2005/2006 with an interest rate of per cent with a nominal amount of EUR 30 mn and a tenor until November 2012, bank borrowings of EUR mn (2005/2006: EUR mn) and finance leasing in an amount of approximately EUR mn (2005/2006: EUR mn), EUR mn (2005/2006: EUR mn) of which are short-term liabilities (Sources: Annual consolidated financial statements as of 31 March 2006 and 31 March 2007 pursuant to IFRS). 75

76 As of 31 March 2007, the Group has assumed sureties and guarantees in an amount totalling approximately EUR mn (2005/2006: EUR mn) (Sources: Annual consolidated financial statements as of 31 March 2006 and 31 March 2007 pursuant to IFRS). To cover working capital requirements, the Group has secured working capital facilities from a number of commercial banks. Derivatives are exclusively used to secure existing risks in changes of currency- and interest rates. In particular, as of 31 March 2007 an interest rate swap for an amount of EUR 30 mn is in place to hedge the fixed interest rate payments on the outstanding senior bond. The use of derivatives in the Group is subject to appropriate authorisation and supervision procedures. Trading of derivatives is not permissible. Accounts payable are handled in line with the terms of trade. A more detailed overview over the Group's financial liabilities is contained in the notes to the consolidated financial statements for the business year ending on 31 March Group equity Share capital and profit distribution The share capital of Swietelsky amounts to EUR 7,705,000 and has been contributed in full. The share capital is divided into 7,705,000 shares with a nominal value of EUR 1.00 each. The Shareholders' Meeting of the Issuer has established detailed guidelines regarding the payment of dividends which are currently included in its articles of association. Currently, and for as long as TRIAS Holding GmbH is a shareholder of the Issuer and has outstanding bank debt, the Issuer's articles of association foresee that, unless the Shareholders' Meeting with a majority of 75 per cent resolves otherwise, the whole balance sheet profit is to be distributed to the shareholders. If TRIAS Holding GmbH ceases to be a shareholder of the Issuer or has no outstanding bank debt anymore, a distribution of profits requires an unanimous resolution by the Shareholders' Meeting if the financial thresholds which are set out in the Issuer's articles of association are not met. If the Issuer does not pay a dividend in any given year, this could entitle the Issuer to defer Remuneration Payments on the Bonds for that year. Other equity positions As of 31 March 2007, the equity of the Issuer includes retained earnings in the amount of approximately EUR mn (2005/2006: EUR mn), currency translation differences in the amount of approximately EUR mn (2005/2006: EUR 397,000), capital reserves in the amount of approximately EUR mn (2005/2006: EUR mn), revaluation reserves of approximately EUR mn (2005/2006: EUR mn) and minorities (see below) of EUR mn (2005/2006: EUR mn). Retained earnings comprise the mandatory and free earnings reserves, the profit for the period and the results brought forward from previous periods of the Issuer and its 76

77 consolidated subsidiaries, in as far as these have not been eliminated by way of capital consolidation. Minorities refer to minority shareholders in CELL-BAHNBAU Danubia Kft., Hungary and Mavepcell Kft., Hungary (Sources: Annual consolidated financial statements as of 31 March 2006 and 31 March 2007 pursuant to IFRS). Development of Group equity The following table shows the changes in the consolidated shareholders' equity of the Issuer as of the dates stated below and should be read in conjunction with the annual consolidated financial statements as of 31 March 2007 attached in annex 1: (in EUR thousand) Share capital Capital reserves Revaluation reserves Retained earnings Currency conversion differences Equity Minority interests Balance as of 31 March ,705 1,093 9,922 74, , ,081 Currency conversion differences Change of minorities ,641 1,641 Change of revaluation reserves Other adjustments of minorities Group profit , , ,276 Subsidy Dividends , , ,896 Balance as of 31 March ,705 1,094 9,301 65, ,127 1,326 85,453 Currency conversion differences ,372 1, ,751 Change of revaluation reserves Change in financial instruments IAS Group profit , , ,416 Dividends , , ,600 Balance as of 31 March ,705 1,094 9,608 86,222 1, ,398 1, ,026 Source: Annual financial statements of the Company as of 31 March 2006 and 31 March All figures provided above have been audited or derived from audited figures prepared in accordance with IFRS. The proceeds of the dividend distribution of EUR mn in the business year 2005/2006 were used by its recipients to (partly) finance the buy-out of the shares of certain members of the Swietelsky family (see the section "History and Development of the Issuer" on page 53). Total 77

78 The Issuer's equity ratio (i.e., the ratio of equity to total assets) as of 31 March 2007 was 21.3 per cent; its debt ratio (i.e., the ratio of total liabilities to total assets) as of 31 March 2007 was 78.7 per cent. There are no restrictions on the use of equity capital resources that have materially affected, or could materially affect, directly or indirectly, Swietelsky's operations. Financing arrangements following the Offering Swietelsky believes that its operating cash flows, together with borrowings and in connection with the Offering will be sufficient to fund its working capital needs, anticipated capital expenditures and debt service requirements as they become due. Despite its belief, Swietelsky cannot assure investors that the funds available to it from time to time will be sufficient to cover its expenditures. See "Risk Factors". 78

79 TAXATION All payments in respect of the Bonds will be made without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by way of withholding or deduction at source by or on behalf of the Republic of Austria or any of its political subdivisions or authorities that has power to tax unless such withholding or deduction is required by law. In such event, the Issuer will pay such additional amounts as shall be necessary in order that the net amounts received by the Bondholders after such withholding or deduction shall equal the respective amounts of principal and remuneration which would otherwise have been receivable in respect of the Bonds without such withholding or deduction, subject to customary exceptions as set out in the Terms and Conditions of the Bonds. GENERAL Individuals resident in Austria are subject to income tax (Einkommensteuer) on their worldwide income (unlimited income tax liability; unbeschränkte Einkommensteuerpflicht). Individuals are considered resident if they have a permanent domicile (Wohnsitz) available in Austria and/or if they have their habitual abode (gewöhnlicher Aufenthalt) in Austria, otherwise they are non-resident. Non-resident individuals are subject to income tax only on income from certain Austrian sources (limited income tax liability; beschränkte Einkommensteuerpflicht). Corporations resident in Austria are subject to corporate income tax (Körperschaftsteuer) on their worldwide income (unlimited corporate income tax liability; unbeschränkte Körperschaftsteuerpflicht). Corporations are considered resident if their place of effective management (Ort der Geschäftsleitung) is in Austria and/or if they have their registered seat (Sitz) in Austria, otherwise they are non-resident. Non-resident companies are subject to corporate income tax only on income from certain Austrian sources (limited corporate income tax liability; beschränkte Körperschaftsteuerpflicht). Both in case of unlimited and limited tax liability Austria's right to tax may be restricted or reduced by double taxation treaties. Austrian (corporate) income tax Individuals (holding Bonds as a non-business asset) Individuals subject in Austria to unlimited income tax liability (unbeschränkt steuerpflichtige natürliche Personen) holding Bonds (Forderungswertpapiere) in the meaning of 93 para 3 of the Austrian Income Tax Act (Einkommensteuergesetz) as a nonbusiness asset (Privatvermögen) are subject to income tax on all resulting interest payments pursuant to 27 para 1 No 4 and 27 para 2 No 2 of the Austrian Income Tax Act. If interest is paid out by an Austrian paying agent (kuponauszahlende Stelle), then such payments are subject to a withholding tax of 25 per cent; no additional income tax is levied over and above the amount of tax withheld (final taxation pursuant to 97 para 1 of the Austrian Income Tax Act; Endbesteuerung) if the Bonds are in addition legally and factually offered to an indefinite number of persons. If interest is not paid out by an Austrian paying agent, then such payments must be included in the income tax return; in 79

80 this case they are subject to a flat income tax rate of 25 per cent, provided that the Bonds are in addition legally and factually offered to an indefinite number of persons. If the Bonds are not legally and factually offered to an indefinite number of persons, then the interest payments must be included in the income tax return; in this case they are subject to income tax at a marginal rate of up to 50 per cent, any withholding tax being creditable against the income tax liability. Capital gains (i.e. the difference between the sales price and the acquisition cost of the Bonds) realized upon sale of the Bonds within one year after acquisition are subject to income tax at a marginal rate of up to 50 per cent pursuant to 30 of the Austrian Income Tax Act; other capital gains are tax-free. Individuals (holding Bonds as a business asset) Individuals subject in Austria to unlimited income tax liability holding Bonds as a business asset (Betriebsvermögen) are subject to income tax on all resulting interest payments. If interest is paid out by an Austrian paying agent, then such payments are subject to a withholding tax of 25 per cent; no additional income tax is levied over and above the amount of tax withheld (final taxation pursuant to 97 para 1 of the Austrian Income Tax Act) if the Bonds are in addition legally and factually offered to an indefinite number of persons. If interest is not paid out by an Austrian paying agent, then such payments must be included in the income tax return; in this case they are subject to a flat income tax rate of 25 per cent, provided that the Bonds are in addition legally and factually offered to an indefinite number of persons. If the Bonds are not legally and factually offered to an indefinite number of persons, then the interest payments must be included in the income tax return; in this case they are subject to income tax at a marginal rate of up to 50 per cent, any withholding tax being creditable against the income tax liability. Capital gains (i.e. the difference between the sales price and the acquisition cost of the Bonds) realized upon sale of the Bonds are always subject to income tax at a marginal rate of up to 50 per cent. Corporations Corporations subject in Austria to unlimited corporate income tax liability (unbeschränkt steuerpflichtige Körperschaften) are subject to corporate income tax on all interest payments resulting from Bonds at a rate of 25 per cent. Under the conditions set forth in 94 No 5 of the Austrian Income Tax Act no withholding tax is levied. Capital gains (i.e. the difference between the sales price and the acquisition cost of the Bonds) realized upon sale of the Bonds are subject to corporate income tax at a rate of 25 per cent. Private foundations Private foundations (Privatstiftungen) pursuant to the Austrian Private Foundations Act (Privatstiftungsgesetz) fulfilling the prerequisites contained in 13 para 1 of the Austrian Corporate Income Tax Act (Körperschaftsteuergesetz) and holding Bonds as a non-business asset are subject to corporate income tax (interim taxation; Zwischenbesteuerung) on all resulting interest payments pursuant to 13 para 3 No 1 of the Austrian Corporate Income Tax Act at a rate of 12.5 per cent, provided that the Bonds are in addition legally and factually offered to an indefinite number of persons. If the Bonds are not legally and factually offered to an indefinite number of persons, then the interest payments are subject to corporate income tax at a rate of 25 per cent. Under the conditions set forth in 94 No 11 of the Austrian Income Tax Act no withholding tax is levied. Capital gains (i.e. the 80

81 difference between the sales price and the acquisition cost of the Bonds) realized upon sale of the Bonds within one year after acquisition are subject to corporate income tax at a rate of 25 per cent; other capital gains are tax-free. EU withholding tax 1 of the Austrian EU Withholding Tax Act (EU-Quellensteuergesetz) which transforms into national law the provisions of Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments provides that interest payments paid or credited by an Austrian paying agent to a beneficial owner who is an individual resident in another Member State are subject to a withholding tax if no exception from such withholding applies. Currently, the withholding tax amounts to 15 per cent. Austrian inheritance and gift tax Pursuant to the Austrian Inheritance and Gift Tax Act (Erbschafts- und Schenkungssteuergesetz), transfers of assets inter vivos and causa mortis are taxable. 15 para 1 No 17 of the Austrian Inheritance and Gift Tax Act provides for a tax exemption in the case of a transfer of Bonds causa mortis insofar as the Bonds were legally and factually offered to an indefinite number of persons and insofar as the interest resulting from the Bonds is subject to final taxation or to the special tax rate of 25 per cent. It should be noted that the Austrian Constitutional Court (Verfassungsgerichtshof) has recently declared the inheritance tax and the gift tax as unconstitutional. The two decisions will become effective on 1 August It remains to be seen whether the Austrian Parliament will reenact an inheritance tax and/or a gift tax in Austria and under what terms. THIS SECTION ON TAXATION CONTAINS A BRIEF SUMMARY OF THE ISSUER'S UNDERSTANDING WITH REGARD TO CERTAIN IMPORTANT PRINCIPLES WHICH ARE OF SIGNIFICANCE IN CONNECTION WITH THE PURCHASE, HOLDING OR SALE OF THE BONDS. THIS SUMMARY DOES NOT PURPORT TO EXHAUSTIVELY DESCRIBE ALL POSSIBLE TAX ASPECTS AND DOES NOT DEAL WITH SPECIFIC SITUATIONS WHICH MAY BE OF RELEVANCE FOR CERTAIN POTENTIAL INVESTORS. IT IS BASED ON THE CURRENTLY VALID TAX LEGISLATION, CASE LAW AND REGULATIONS OF THE TAX AUTHORITIES, AS WELL AS THEIR RESPECTIVE INTERPRETATION, ALL OF WHICH MAY BE AMENDED FROM TIME TO TIME. SUCH AMENDMENTS MAY POSSIBLY ALSO BE EFFECTED WITH RETROACTIVE EFFECT AND MAY NEGATIVELY IMPACT ON THE TAX CONSEQUENCES DESCRIBED. IT IS RECOMMENDED THAT POTENTIAL PURCHASERS OF THE BONDS CONSULT WITH THEIR LEGAL AND TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THE PURCHASE, HOLDING OR SALE OF THE BONDS. TAX RISKS RESULTING FROM THE BONDS SHALL IN ANY CASE BE BORNE BY THE PURCHASER, SAVE AS PROVIDED OTHERWISE IN THE TERMS AND CONDITIONS OF THE BONDS. 81

82 SUBSCRIPTION AND SALE Pursuant to a subscription agreement (Übernahmevertrag) to be entered into on or about 14 November 2007 (the Subscription Agreement) between the Issuer, the Sole Lead Manager and other syndicated banks, the Sole Lead Manager and other syndicated banks will agree, subject to certain conditions, to subscribe and pay for the Bonds the Issue Price, less certain commissions. The conditions as referred to in the first sentence of this paragraph will be customary closing conditions as set out in the Subscription Agreement. The Issuer has furthermore agreed to reimburse the Sole Lead Manager and other syndicated banks for certain expenses incurred in connection with the issue of the Bonds. The expenses of the issue of the Bonds will be approximately EUR 600,000. In the Subscription Agreement, the Issuer will make certain representations and warranties in respect of its legal and financial matters. The Subscription Agreement entitles the Sole Lead Manager and other syndicated banks to terminate its obligations thereunder in certain circumstances prior to the payment of the purchase price of the Bonds. The Issuer will make certain representations to indemnify the Sole Lead Manager and other syndicated banks against certain liabilities in connection with the offer and sale of the Bonds. The Subscription Agreement is governed by Austrian law. The Sole Lead Manager and other syndicated banks (or their affiliates) have provided from time to time, and expect to provide in the future, investment services to the Issuer (or its affiliates), for which the Sole Lead Manager and other syndicated banks (or their affiliates) have received or will receive customary fees and commissions. There are no interests of natural and legal persons involved in the issue, including conflicting ones, that are material to the Offering. The public offer of the Bonds (as defined in the Prospectus Directive and the relevant implementing measures) will end on the later of (i) the issue date of the Bonds and (ii) the date on which the Bonds are admitted to trading on the regulated market of the Vienna Stock Exchange. The subscription period for non-institutional investors is expected to be in the period from 8 November 2007 to 9 November The Issuer and the offering banks have reserved the right to shorten the subscription period. The Bonds will be offered to institutional investors during a bookbuilding procedure after a road show in Vienna and other European cities. Advertisements to be published in newspapers are planned. Settlement date for the Bonds is on or about 16 November The minimum amount for the subscription corresponds to the minimum denomination of the Bonds which is EUR 1,000. For the Bonds, no maximum subscription amount has been set. The Issue Price is expected to be between 97 per cent and 103 per cent of the principal amount. The Bonds will entitle investors to a fixed remuneration until and excluding 16 November 2012 at a rate which is expected to be between 6.5 per cent and 9.5 per cent per annum. Following a book building procedure the Issue Price and the fixed remuneration will be determined on or about 7 November

83 The book building procedure serves the purpose of recording the demand of institutional investors, like credit institutions, insurance companies and funds, by the banks of the syndicate. In the course of a book building procedure, the Sole Lead Manager will accept within a limited period of time binding book-building orders from institutional investors, including orders within a predetermined credit spread range. Subsequently, the Sole Lead Manager determine in consultation with the Issuer the fixed remuneration rate (including the Margin and the Adjusted Yield, as determined in the Terms and Conditions of the Bonds) and Issue Price at which the Bonds are issued. The Issue Price at which retail investors may buy the Bonds during the subscription period is calculated on the basis of the re-offer price, which is the price at which institutional investors may buy the Bonds, plus an extra charge of 2 per cent. The Issue Price, the Margin and the Adjusted Yield will be published prior to the subscription period in accordance with applicable laws in Austria. SELLING RESTRICTIONS European Economic Area In relation to each Member State of the European Economic Area (the EU plus Iceland, Norway and Liechtenstein) which has implemented the Prospectus Directive (each, a "Relevant Member State"), the Manager has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Member State (the "Relevant Implementation Date") it has not made and will not make an offer of Bonds to the public in that Relevant Member state prior to the publication of a prospectus in relation to the Bonds which has been approved by the competent authority in that Relevant Member State in accordance with the Prospectus Directive or, where appropriate, published in another Relevant Member State and notified to the competent authority in that Relevant Member State in accordance with Article 18 of the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Bonds to the public in that Relevant Member State at any time: (a) (b) (c) to legal entities which are authorised or regulated to operate in the financial markets, or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; to any legal entity which has two or more of (1) an average of at least 250 employees during the last fiscal year; (2) a total balance sheet of more than EUR 43,000,000 and (3) an annual turnover of more than EUR 50,000,000, as shown in its last annual or consolidated accounts; in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the expression an "offer of Bonds to the public" in relation to any Bonds in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Bonds to be offered so as to enable an investor to decide to purchase or subscribe to the Bonds, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression "Prospectus Directive" means Directive 2004/809/EC and includes any relevant implementing measure in each Relevant Member 83

84 State. United States of America and its territories The Bonds have not been and will not be registered under the Securities Act and may not be offered, or sold within the United States of America or to, or for the account and benefit of, U. S. persons except in accordance with Regulation S under the Securities Act. Each Manager has represented and agreed that it has offered and sold the Bonds, and will offer and sell the Bonds (i) as part of its distribution at any time and (ii) otherwise until 40 days after the completion of the distribution of all the Bonds only in accordance with Rule 903 of the Regulation S under the Securities Act. Neither the Manager, its affiliates nor any persons acting on its or their behalf have engaged or will engage in any directed selling efforts with respect to the Bonds, and it and they have complied and will comply with the offering restrictions requirements of Regulation S under the Securities Act. Each Manager has also agreed that at or prior to confirmation of sale of Bonds, it will have sent to each distributor, dealer, or person receiving a selling concession, fee or other remuneration that purchases Bonds from it during the restricted period a confirmation or notice to substantially the following effect: "The Bonds covered hereby have not been registered under the U. S. Securities Act of 1933, as amended (the Securities Act) and may not be offered or sold within the United States of America or to, or for the account or benefit of, U. S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the completion of the distribution of the Bonds as determined and certified by each Manager, except in either case in accordance with Regulation S under the Securities Act. Terms used above have the meaning given to them in Regulation S under the Securities Act." Terms used in the preceding paragraphs have the meaning given to them in Regulation S under the Securities Act. United Kingdom of Great Britain and Northern Ireland Each Manager has represented and agreed that: (a) (b) (c) (i) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business and (ii) it has not offered or sold and will not offer or sell the Bonds other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the Bonds would otherwise constitute a contravention of Section 19 of the FSMA by the Issuer: it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 (1) of the FSMA) received by it in connection with the issue or sale of the Bonds in circumstances in which Section 21 (1) of the FSMA does not apply to the Issuer; and it has complied and will comply with all applicable provisions of the FSMA with 84

85 General respect to anything done by it in relation to the Bonds in, from or otherwise involving the United Kingdom. In addition to the specific restrictions set out above, the Manager agrees that it will observe all applicable provisions of law in each jurisdiction in or from which it may offer Bonds or distribute any offering material. 85

86 GENERAL INFORMATION AUTHORISATION The Bonds will be issued on the basis of a resolution by the Issuer's Management Board dated 1 June The Supervisory Board has approved the issue of the Bonds on 4 June ISSUE DATE The Bonds will be issued on or around 16 November USE OF PROCEEDS The issue price per Note multiplied by the number of issued Bonds results in the maximum possible total proceeds (gross) of the Offering. The Issuer intends to use the net proceeds of the issue of the Bonds for general corporate purposes and the strengthening of its capital base. INCREASE The volume of the Offering may be decreased or increased by the Issuer until the Issue Date up to a total amount of EUR 70,000,000. ACCOUNTING OF THE ISSUER The annual consolidated financial statements of the Issuer as of 31 March 2007 and 31 March 2006 are attached to this Prospectus as Annex 1 and Annex 2. The annual consolidated financial statements were prepared in accordance with IFRS and have been audited. The Issuer is not publishing any profit forecasts or profit estimates. Furthermore, the Issuer has not published quarterly or semi-annual financial information since the date of its last audited financial statements. The latest financial information contained in this Prospectus is taken from the annual financial statements as of 31 March 2007 of the Issuer. Such information is not older than 18 months. There has been no significant change in the Issuer's financial position since 31 March AVAILABILITY OF DOCUMENTS During the validity of this Prospectus, copies of the Issuer's articles of association, and the annual financial statements for the business years ended 31 March 2007 and 31 March 2006 can be inspected at the registered office of the Issuer, Edlbacherstraße 10, 4020 Linz, Austria, during usual business hours. The Prospectus will be published in accordance with 10 para 3 No 2 of the Austrian Capital Market Act and will be made available in printed form, free of charge, to the public 86

87 at the registered office of the Issuer, Edlbacherstraße 10, 4020 Linz, Austria, and at the office of the Paying Agent. CLEARING AND SETTLEMENT The Bonds are intended to be delivered to Oesterreichische Kontrollbank Aktiengesellschaft, Am Hof 4, 1010 Vienna, Austria, to be cleared by either Euroclear Bank S.A./N.V., 1. Boulevard du Roi Albert II, B-1210 Brussels or Clearstream Banking société anonyme, Luxembourg, 42 Avenue JF Kennedy, L-1855 Luxembourg (together the Clearing-Systems). LISTING AND ADMISSION TO TRADING The Issuer has applied for admission to listing of the Bonds on the Second Regulated Market (Geregelter Freiverkehr) of the Vienna Stock Exchange. Although the Issuer expects to be granted admission to listing for the Bonds, the Issuer cannot guarantee that such admission will indeed be granted. The first day of listing for the Bonds is expected to be on or about 16 November There are no other listings. PAYING AGENT Erste Bank der oesterreichischen Sparkassen AG is appointed as paying agent for the Bonds. SECURITY CODES The ISIN (International Securities Identification Number) is AT0000A07LU5. YIELD OF THE BONDS The Issue Price is expected to be between 97 per cent and 103 per cent of the principal amount of the Bonds. The Bonds will entitle investors to a fixed interest until (and excluding) 16 November 2012 at a rate which is expected to be in the range of 6.5 per cent and 9.5 per cent per annum and thereafter at a floating rate based on EURIBOR plus a Margin. Following a book building procedure, the Fixed Remuneration Rate, the Margin as well as the Adjusted Yield will be determined on or about 7 November 2007 and published thereafter. RATING No rating has currently been assigned to the Issuer and/or the Offering. TYPE AND THE CLASS OF THE BONDS The Bonds are issued in an aggregate principal amount of EUR 50,000,000 and are divided into 50,000 bearer notes. The Bonds will have a denomination of EUR 1,000 each. The aggregate principal amount of the Offering may be increased up to a maximum amount of EUR 70,000,

88 The Bonds confer to its bearer the rights described in the section "Terms and Conditions of the Bonds" (page 25). Only the German language version of the "Terms and Conditions of the Bonds" shall be binding; the English translation of such terms and conditions shall be for convenience only. LEGISLATION UNDER WHICH THE BONDS HAVE BEEN CREATED The Bonds are governed by Austrian law. REGISTRATION AND CERTIFICATIONS OF THE BONDS The Bonds will be represented in whole by a changeable global bearer note (veränderbare Sammelurkunde) pursuant to 24 lit b of the Austrian Depository Act (Depotgesetz) which bears the signatures of authorised representatives of the Issuer and a control signature of the Paying Agent. Definitive Bonds and coupons will not be issued. The global bearer note representing the Bonds will be deposited with a common depository for the Clearing-Systems. The Bondholders are entitled to joint ownership interests in the global bearer note representing the Bonds in accordance with Austrian law. CURRENCY OF THE BONDS ISSUE The Bonds are denominated in Euro. RANKING OF THE BONDS The Bonds rank junior to all current and future unsubordinated and subordinated liabilities of the Issuer, pari passu with each other and with any Parity Note (as defined in the Terms and Conditions of the Bonds) of the Issuer and senior to the Issuer's ordinary shares and any other class of share capital, including non-voting preference shares (if any) of the Issuer. RIGHTS ATTACHED TO THE BONDS, INCLUDING ANY LIMITATIONS OF THOSE RIGHTS, AND PROCEDURE FOR THE EXERCISE OF THOSE RIGHTS The rights of the Bondholders are set out in the Terms and Conditions of the Bonds. The Bonds carry a remuneration as set out in 4 of the Terms and Conditions of the Bonds. The Bonds are perpetual. They may not be redeemed by the Issuer prior to the first call date except in certain limited circumstances, where mandatory Austrian law allows the extraordinary termination of permanent legal obligations (Dauerschuldverhältnisse). The Issuer may only redeem the Bonds in accordance with the provisions set out in 5 of the Terms and Conditions of the Bonds. The Bonds are not subject to a negative pledge obligation and the Terms and Conditions of the Bonds do not contain express events of default. Claims for payment in respect of principal of the Bonds are prescribed and become void unless made within 10 years after they became due, and claims for payment of remuneration under the Bonds are prescribed and become void unless made within 3 years after they became due. 88

89 REMUNERATION Subject to the limitations described below, remuneration on the Bonds will accrue from the Issue Date up to and excluding 16 November 2012 (the Step-Up Date) at a rate of per cent p.a., payable annually in arrears on 16 November in each year, commencing on 16 November 2008 and from and including the Step-up Date at a rate equal to three-month Euribor plus per cent, payable quarterly in arrears on 16 November, 16 February, 16 May and 16 August in each year, as described in more detail in the Terms and Conditions of the Bonds. In case of a Change of Control, the interest rate may increase by 5 per cent, if the Bonds are not redeemed. The Issuer shall have the right to defer Remuneration Payments (as defined in the Terms and Conditions of the Bonds) on the Bonds on a Remuneration Payment Date (as defined in the Terms and Conditions of the Bonds) if none of the following events has occurred in the 12 month period immediately preceding the relevant Remuneration Payment Date: (a) (b) (c) (d) a dividend or other distribution or payment was declared or made in respect of any ordinary shares of the Issuer; a payment or other distribution has been made on any Parity Securities treated as Equity or Junior Securities treated as Equity (all such terms as defined in the Terms and Conditions of the Bonds); the Issuer or any of its subsidiaries has redeemed, repurchased or otherwise acquired any of its ordinary shares (unless this occurs in connection with any present or future stock option plan), Junior Securities or Parity Securities (all such terms as defined in the Terms and Conditions of the Bonds); and (A) the Issuer's annual audited consolidated financial statements for its most recently completed business year are determined showing a difference of Capital Expenditure less Depreciation being more than EUR 10,000,000, or (B) the Paying Agent receives a certificate from the Issuer's auditors to the effect that the condition in sub-clause (A) above is satisfied (all such terms as defined in the Terms and Conditions of the Bonds). Deferred Remuneration Payments will not bear interest. Deferred Remuneration Payments may be paid at any time at the discretion of the Issuer and must be paid (i) immediately following a Mandatory Payment Event (which are each of the events mentioned above in (a) to (d)), (ii) on the due date for redemption of the Bonds, or (iii) upon institution of insolvency proceedings in respect of the Issuer. MATURITY DATE AND REPAYMENT PROCEDURES The Bonds are perpetual and have no scheduled maturity. The Bonds may be redeemed at the option of the Issuer, in whole but not in part, at a redemption price equal to their aggregate principal amount plus the accrued and unpaid remuneration for the then-current Remuneration Period (as defined in the Terms and Conditions of the Bonds) to the date fixed for redemption on any Remuneration Payment Date (as defined in the Terms and Conditions of the Bonds) falling on or after the Step-up Date. 89

90 Prior to the Step-up Date, the Bonds may be redeemed at the option of the Issuer, in whole but not in part, in the following instances: (a) (b) (c) (d) following a Gross-up Event (i.e. imposition of Withholding Tax in Austria) at the principal amount plus accrued remuneration plus all Deferred Remuneration Payments; following a Tax Event (i.e. loss of deductibility for corporate income tax purposes as a result of a change in law) or an Accounting Event (i.e. loss of IFRS equity treatment) at the Early Redemption Amount; in case of a Change of Control at the Early Redemption Amount; or in the event that the outstanding principal amount of the Bonds has, due to repurchases of Bonds by the Issuer or any of its subsidiaries, fallen below 25 per cent of the original principal amount of the Bonds at the Early Redemption Amount (all such terms as defined in and subject to the Terms and Conditions of the Bonds). REPRESENTATION OF BONDHOLDERS The Terms and Conditions of the Bonds contain no provisions on the representation of the Bondholders. In certain cases, a joint representative (Kurator) may be appointed to represent the Bondholders before the Austrian courts in accordance with the Curator Act. TRANSFERABILITY The Bonds are bearer securities which are transferable without limitation. OTHER This Prospectus includes neither a statement nor a report from a third party as an expert. Erste Bank der oesterreichischen Sparkassen AG acts as Sole Lead Manager for the Offering. 90

91 INDEX TO THE ANNEXES Annex 1 Annex 2 Annual IFRS consolidated financial statements for the business year ending 31 March 2007 Annual IFRS consolidated financial statements for the business year ending 31 March

92 ANNEX 1: ANNUAL IFRS CONSOLIDATED FINANCIAL STATEMENTS FOR THE BUSINESS YEAR ENDING 31 MARCH 2007

93 Swietelsky Baugesellschaft m.b.h., Linz C o n s o l i d a t e d P r o f i t a n d L o s s A c c o u n t for the business year 2006/ / /06 Notes TEUR TEUR Sales (1) Change in inventories Own work capitalised Other operating income (2) Cost of materials and services purchased (3) Personnel expenditures (4) Depreciation (5) Other operating expenditures (6) Earnings before financial results and taxes Result from participations in associated companies (7) Other financial results (8) Financial results Profit before taxes Income tax (9) Profit for the period Attributable to: Minority interest Attributable to: Equity holders of the parent

94 Swietelsky Baugesellschaft m.b.h., Linz C o n s o l i d a t e d B a l a n c e S h e e t as of March 31, 2007 Assets: Non-current assets: March 31, March 31, Notes TEUR TEUR Intangible assets (10) Tangible assets (10) Shares in associated companies (11) Other financial assets (11) Trade receivables and receivables for services rendered (13) Other accounts receivable and other assets (13) Deferred taxes (15) Current assets: Inventories (12) Trade receivables and receivables for services rendered (13) Other accounts receivable and other assets (13) Cash and cash equivalents (14)

95 Swietelsky Baugesellschaft m.b.h., Linz Shareholder's Equity and liabilities: Shareholder's Equity: March 31, March 31, Notes TEUR TEUR Capital stock Capital reserves Revaluation reserves Retained earnings Minority interests Non-current liabilities: (16) Provisions (17) Financial liabilities (18) Liabilities from trade payables and payables for services rendered (18) Other liabilities (18) Deferred taxes (15) Current liabilities: Provisions (17) Financial liabilities (18) Liabilities from trade payables and payables for services rendered (18) Other liabilities (18)

96 Swietelsky Baugesellschaft m.b.h., Linz C o n s o l i d a t e d C a s h - F l o w S t a t e m e n t for the business year 2006/ / /06 TEUR TEUR Net income Deffered taxes Non cash effective results from associated companies Decpreciations/Appreciations Change in long-term provisions Profits/losses from sale/disposal of plants Cash-flow from profits Change in items: Inventories Receivables from trade, construction contracts and joint ventures Group receivables and receivables from companies with whom a participation relationship exists Other assets Liabilites from trade, construction contracts and joint ventures Group liabilities and liabilities to companies with whom a participation relationship exists Other liabilities Short-term provisions Cash-flow from operating activities / /06 TEUR TEUR Acquisition of financial assets Profits/losses from sale/disposal of plants Reduction of fixed assets at book value Exchange rate differences and changes in consolidation circle minus acquired cash and cash equivalents Cash-flow from investing activities

97 Swietelsky Baugesellschaft m.b.h., Linz 2006/ /06 TEUR TEUR Changes in bank liabilities Changes in bond loans Changes in liabilites from finance leases Changes in group financing Distribution of company profits Cash-flow from financing activities / /06 Notes TEUR TEUR Cash-flow from operating activities Cash-flow from investing activities Cash-flow from financing activities Net changes in cash and cash equivalents Changes in cash and cash equivaltens due to exchange rate differences Cash and cash equivalents at the end of the business year (14) / /06 TEUR TEUR Interests paid Interests received Taxes paid

98 Swietelsky Baugesellschaft m.b.h., Linz Development of the Consolidated Shareholder's Equity for the business year 2006/07 Currency Share- Capital Capital Revaluation Retained conversion holder's Minority stock reserves reserves earnings differences Equity interests Total TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR Balance at April 1, Differences arising from currency conversion Acquisition of minorities Other adjustment of minorities Change of revaluation reserve Net profit for the period Subvention Distribution of company profits Balance at April 1, Differences arising from currency conversion Change of revaluation reserve Change financial instruments IAS Net profit for the period Distribution of company profits Balance at March 31,

99 Swietelsky Baugesellschaft m.b.h., Linz Statement of recognized income and expenses 2006/ /06 TEUR TEUR Net income Differences arising from currency conversion Changes in financial instruments IAS Change of revaluation reserve Total of recognized income and expense for the period Net income recognized directly in equity Attributable to: Equity holders of the parent Attributable to: minorities

100 Group Notes to the Financial Statements for the 2006/07 business year of Swietelsky Baugesellschaft m.b.h., Linz Basic principles The consolidated financial statement of Swietelsky Baugesellschaft m.b.h., Linz, under application of 245a of the Austrian Commercial Code, have been drawn up as of March 31, 2007 in accordance with the "International Financial Reporting Standards" ("IFRS") stipulations issued by the "International Accounting Standards Board" ("IASB") and including the interpretations of the "International Financial Reporting Interpretations Committees" ("IFRIC") which had to be applied on deadline date for the first time. Applied were exclusively those standards and interpretations adopted by the European Commission before the reporting deadline and published in the Official Journal of the European Union. Further reporting requirements of Article 245a Paragraph 1 of the Austrian Commercial Code (UGB) were fulfilled as well. As well as the profit and loss account and the balance sheet, a cash flow statement in accordance with IAS 7 will be drawn up and the changes in equity and the shares of other shareholders shown (IAS 1). As the company's share has not been traded openly the notes will not comprise segment reporting in accordance with IAS 14. In order to improve the clarity of the representation various items in the balance sheet and the profit and loss account have been combined. These items have been shown separately and explained in the notes. The consolidated profit and loss account has been drawn up in accordance with the classification of expenses by category.

101 Changes to accounting and valuation The IASB has passed a series of changes to the existing body of IFRS as well as several new IFRS standards which must be applied as of January 1, The first-time application of IFRS standards mentioned essentially had the following consequences on consolidated financial statement of the Swietelsky Baugesellschaft m.b.h. as of March 31, 2007: IAS 39 (Financial Instruments) Financial guarantee contracts which were unlikely to be claimed were previously recognized under Contingent Liabilities in the Notes. Since April 1, 2006, such financial guarantee contracts are to be recognized at fair value in the balance sheet and as long as there is no probable loss shall be reported at continued initial recognition. At Swietelsky, the advantages gained from the financial guarantee contracts correspond to the fair value to be classified as equity so that the new rules have no consequences for the consolidated financial statements. The outstanding amount of the financial guarantee contracts is declared in the Notes as usual. For annual periods beginning on or after January 1, 2006, the amendments to the fair-value option apply. The fair-value option allows a financial instrument under certain circumstances to be recognized at fair value through profit and loss. This option was not applied in the 2006 financial statement. For annual periods beginning on or after January 1, 2006, the amendments to the fair-value option apply. The fair-value option allows a financial instrument under certain circumstances to be recognized at fair value through profit and loss. This option was not applied in the 2006/07 financial statement.

102 IFRIC 4: Determining whether an Arrangement Contains a Lease IFRIC 4 requires the determination be made whether an arrangement directly or indirectly contains a lease. Such an arrangement must be accounted for in accordance with IAS 17. The application of IFRIC 4 produced no appreciable changes in the consolidated financial statement. Future Amendments to Accounting Standards IASB and IFRIC have also passed the following Standards and Interpretations, which are not effective for the 2006/07 business year: Effective for annual periods beginning on or after IFRS 7 Financial Instruments: Disclosures January 1, 2007 IFRIC 8 Scope of IFRS 2 May 1, 2006 IFRIC 9 Reassessment of Embedded Derivatives June 1, 2006 IFRIC 10 Interim Financial Reporting and Impairment November 1, 2006 IFRS 8 Operating Segments January 1, 2009 IAS 23 Borrowing Costs January 1, 2009 The company does not expect substantial changes to the consolidated financial statement by applying these standards and Interpretations. Consolidated group As well as Swietelsky Baugesellschaft m.b.h., all the important domestic and foreign subsidiaries are included in the consolidated financial statement of March 31, 2007, in which Swietelsky Baugesellschaft m.b.h. has the direct or indirect majority of votes. Immaterial subsidiaries as well as associated companies are accounted at equity or with continued initial costs. The financial statements of all fully-consolidated important companies or domestic and foreign companies, which are obliged to be audited according to national law, were audited by independent auditors and awarded the unqualified stamp of confirmation.

103 24 (previous year: 21) affiliated companies were not included, as their influence on the group assets-, financial and earnings situation is immaterial. The turnover volume of the subsidiaries, which are not included, is less than 1.9 per cent of the group sales. The companies included in the 2006/07 consolidated financial statement can be seen in the list of participations (Attachment 2 to the notes). Balance sheet date of all companies included in the group is March 31, 2007, except Swietelsky Constructii Feroviare s.r.l., Bukarest, Romania, which business year ends as of December 31. The consolidated group developed as follows in the 2006/07 business year: Full consolidation Equity valuation Situation on April 1, First time inclusion in the year under report 1 0 Mergers -1 0 Situation on March 31, therefrom foreign companies 12 7 The following company was included for the first time in the consolidation group at the balance sheet date: Nominal Shares initial Company Currency capital % consolidation Swietelsky Constructii Feroviare s.r.l., Bukarest, Rumänien RON Due to its increased development of business the company was included in the consolidated group in the 2006/07 business year. The company was formed before April 1, The company, which was consolidated for the first time in 2006/07 contributed TEUR 25,803 to sales and TEUR 1,211 to profit.

104 Stavebni a inzenyrska a.s., Dolni Rychnov was merged with Swietelsky stavební s.r.o., eské Bud jovice, Czech Republic, wih retrocpective effect on April 1, There were no other changes in the consolidated group during the 2006/07 business year. Consolidation Methods The financial statements of the domestic and foreign companies included in the consolidation are drawn up in accordance with uniform accounting and valuation principles. The annual financial statements of the domestic and foreign group companies are adapted accordingly; insignificant deviations remain unchanged. For acquisitions from April 1, 2003 capital consolidation is made in accordance with the stipulations in IFRS 3. All assets and debts of the subsidiaries are recorded at the accompanying values. The proportional equity thereby determined is offset by the participation book value. Differying amounts on the assets side, which are allotted to special, identifiable intangible assets, which were acquired within the framework of the business combination, are recognised separately from the goodwill. If a useful life can be allocated to these assets, the planned amortisation is made over the projected useful life. Intangible assets with an indefinite useful life are tested annually for their intrinsic value and amortised if necessary on the basis of an impairment test. Any remaining differying amounts on the assets side are capitalised as goodwill and amortised on the basis of an impairment test in accordance with IAS 36. There is no planned depreciation of goodwill resulting from acquisitions after April 1, The internal reporting figures formed the basis for the impairment test. Within the framework of the application of the DCF-method market interest rates after tax were applied. No unscheduled depreciation resulted from impairment tests. The differences on the liabilities side in the capital consolidation are recorded directly as affecting the income statement. In the 2006/07 business year, a balance on the liabilities side of TEUR 41 is reflected as other operating income.

105 The same principles of capital consolidation are applied to participations included under the Equity-Method as in the case of fully-consolidated companies, whereby the respective last available financial statement serves as the basis for the equity consolidation. In the case of companies recognised under the equity method the local valuation principles are kept only in case of insignificant differences. Within the framework of debt consolidation, receivables from trade, loans as well as other receivables are rounded up with the corresponding liabilities and provisions among the subsidiaries included in the financial statement. Expenditure and income from internal-group trade have been eliminated. Interim results incurred from internalgroup trade transactions in the fixed- and current assets have been cancelled, as far as they are not of minor importance. Minority interests in the equity and in the result of the companies, which are controlled by the parent company, are shown separately in the consolidated financial statement. The necessary tax deferrals are made for consolidation procedures affecting the profit and loss account. Currency translation The group currency is the Euro. The financial statements for the foreign companies are converted into Euro according to the concept of the working currency. As the companies run their business independently regarding financial, economic and organizational matters in all companies this is the respective local currency. All balance sheet items are converted at the mean foreign exchange price at the balance sheet date. Expenditure- and income items are converted at the average annual price. In the business year exchange rate differences of TEUR (previous year: TEUR -21) are recognized in the equity with no effect on the operating result in the course of the capital consolidation.

106 The currency translation differences between the cut off date within the balance sheet and the average price within the profit and loss account are allocated to equity. Accounting and valuation principles Intangible assets and tangible assets Acquired intangible assets and tangible assets are recognized at their historical or production price, minus planned and unplanned depreciation. Both the direct and the appropriate parts of overhead costs for the self-constructed plants are included in the production costs. The planned depreciation of the depreciable fixed assets is made according to the straight line method in accordance with the foreseeable useful life, whereby in the case of utilization over a six month period of an asset acquired in the business year the depreciation is recognized at the full annual amount, in the case of shorter utilization period at half the annual amount. Should there be indications of impairment in the case of assets and should the market value of the future cash surpluses be under the market values, then an impairment is made according to IAS 36 to the lower accompanying value. The following useful lives were assumed in the determination of the rate of depreciation: Intangible assets: Software and licenses 3-4 Tangible assets: Buildings Machinery and technical equipment 4-17 Other plant, furniture and fixtures Useful life in years 4-10

107 Leasing contracts on assets, on which all the chances and risks essentially lay with the company, are treated as finance leases. The fixed assets underlying these leasing agreements are capitalized at the present value of the minimum payments at the beginning of leasing relations and depreciated over the foreseeable useful life or over shorter contract terms. These are offset by the liabilities arising from future leasing payments, whereby the former are recognized at the present value of the outstanding obligations at the balance sheet date. In addition there are leasing agreements for tangible assets, which are regarded as operating leases. Leasing payments resulting from these contracts are recognized as expenditure. Revaluation Real estates as well as flats and stock spaces will be revaluated. Differing amounts minus deferred taxes, which result from revaluation, will be charged against the equity. The accumulated amount of revaluations added up to TEUR 9,608 (previous year: TEUR 9,301) on the date of balance sheet. The deferred taxes concerning revaluations amounted to TEUR 2,694 (previous year: TEUR 2,652) on the date of balance sheet. Expenses for debasement amounting to TEUR 440 (previous year: TEUR 589) in the business year are directly acquired in the equity. Tangible assets (real estates and buildings) were revaluated according to an independent expertise from: Weismann+Pitschmann February 23, 2007 for Austria Dipl.-Ing. (FH) Wilfried Mirbeth April 1, 2007 for Germany Dippong Magdolna und Zsuffa Kálmán Spring 2006 for Hungary For determining the current market price the reference value method has been used.

108 Financial assets In accordance with IAS 28 shares in associated companies are evaluated at equity - in far as they are not shares of minor significance. Basically the same valuation methods are applied here as for fully consolidated companies. Subsidiaries, which are not consolidated, and participations, which are not reported at equity, are reported at their historical cost or at the lower accompanying value, in accordance with IAS 39 in as far as this value can be reliably determined. Interest-bearing loans are, as long as no value deductions are necessary, reported at nominal value. Interest-free or low interest-bearing loans are discounted to their present value. Securities classified as available for sale are on initial recognition valued according to acquisition costs and later recognized at fair value. Fair value changes are in principle recognized directly in equity and only recognized in the consolidated income statement upon disposal of the security. The permanent impairment of securities classified as available for sale is recorded in the consolidated income statement. Inventories Inventories are evaluated at historical cost or production cost or at the lower market value of a lower accompanying value. The production costs include all direct costs as well as appropriate parts of overheads arising in the production. Distribution costs as well as costs for general administration are not included in the production costs. The interest on borrowing in connection to the production is not capitalized.

109 Accounts receivable and other assets Receivables from trade and other receivables are evaluated at their nominal value minus valuation adjustments for realizable individual risks. Graduated valuation adjustments are formed according to risk groups in order to take general loan risks on customer receivables into consideration. Non-interest bearing and low-interest bearing receivables are discounted. Foreign currency receivables are evaluated on balance sheet date at the valid exchange rate or in the case of hedging at the hedged rate. In the case of receivables from construction contracts the results are realized according to the Percentage of Completion Method. The output actually attained by the balance sheet date serves as a benchmark for the degree of completion. Threatening losses from the further construction process are accounted for by means of appropriate depreciations. When the performance to be evaluated, which was provided within the framework of a construction contract, exceeds the payments received for it, then this is shown on the assets side under receivables from construction contracts. In the reverse case this is reported on the liabilities side under liabilities from trade. The results, in the case of construction contracts, which are carried out in consortia, are realized according to the Percentage of Completion Method in accordance with the degree of completion on balance sheet date. Threatening losses arising from further construction work are accounted for by means of appropriate depreciations. Receivables from or liabilities to consortia include the proportional contract result as well as capital contributions, in- and out payments and charges resulting from services. The valuation of other assets is made at historical cost minus extraordinary depreciation.

110 Deferred taxes The determination of tax deferral is made according to the Balance Sheet Liability Method for all temporary differences between the carrying value of the balance sheet items in the IFRS consolidated financial statement and their existing tax values in the case of individual companies. Furthermore, the tax advantage which can probably be realized from existing losses carried forward, is included in this process. Differing amounts from non-tax deductible goodwill are exceptions to this extensive tax deferral. Deferred tax assets are only recognized if it is probable that the included tax advantage is realizable. The calculation of the tax deferral is based on the usual income tax rate in the respective country at the point of the predicted reversal in their value difference. Provisions Provisions for severance pay are created as a result of statutory regulations. The provision for severance payments is determined by using the actuarial expertise. Here the future claim over the length of employment of the employees is collected while taking any future pay rises into consideration. The present value of the partly earned partial-claims on deadline day is recognized as the provision. The change in value of the determined provision amount as a result of changes in the calculation parameter (= actuarial profit or loss) is immediately recognized as a whole in the profit and loss account. Pension provisions are calculated according to the Projected Unit Credit Method. In this method the discounted pension claim acquired up to balance sheet date is determined. The effect in value of the change to these assumptions is recognized as an actuarial profit and loss and is in total immediately recognized in the profit and loss account. Service costs are recognized in the personnel expenditure, the proportion of the interest in the allocation of provisions in the financial result.

111 The calculation of the severance pay- and pension provisions is based on an interest rate of 4.5 % and an expected development of income and pensions of 3 %. Life expectancy for severance pay and pension provisions are calculated according to AVÖ 1999-P "gemischter Bestand" and AVÖ 1999-P "Angestellte". The other provisions take into consideration all realizable risks and uncertain obligations. They are recognized at the respective amount, which is necessary at the balance sheet date according to commercial judgment, in order to cover future payment obligations, realizable risks and uncertain obligations within the group. Hereby the respective amount is recognized, which arises as the most probable on careful examination of the facts. Long-term provisions are, in as far as they are not immaterial, accounted at their discounted discharge amount on balance sheet date. The discharge amount also includes the cost increases to be considered on balance sheet date. Provisions, which arise from the obligation to recultivate gravel sites, are allocated according to the rate of utilization. Liabilities Liabilities are basically recognized at the repayment amount. Foreign currency liabilities are evaluated at the mean foreign currency rate at balance sheet date. Interest free liabilities especially those from financial leasing liabilities, are accounted at the present value of the repayment obligation. Contingent liabilities Contingent liabilities are possible or existing obligations, with which an outflow of resources is not probable. They are not recognized in the balance sheet. The reported obligation volumes of the contingent liabilities correspond to the extent of liability on the balance sheet date.

112 Derivative financial instruments Derivative financial instruments are employed exclusively to mitigate risks arising from movements interest rates. All derivative financial instruments are accounted at fair value in accordance with IAS 39 and reported under Other Receivables or Other Liabilities. Derivative financial instruments are measured on the basis of inter-bank conditions and, if necessary, the loan margin or stock exchange price applicable for Swietelsky, under application of the buying and selling rate on the balance sheet date. Where stock exchange prices are not used, the fair value is calculated by means of financial mathematic methods. Gains and losses from derivative financial instruments designated as qualified hedging instruments within the framework of a fair value hedge, or for which no qualified hedge relationship in accordance with IAS 39 could be established and which therefore do not qualify for hedge accounting, are recognized with an effect on income in the consolidated income statement. Estimations and assumptions Estimations and assumptions, which refer to the amount and recognition of the assets and liabilities accounted, the income and expenditure as well as the statement of contingent liabilities, are necessary for the preparation of the consolidated financial statement according to IFRS and essentially concern the assessment of building projects until completion, in particular the amount of the realization of profits, the accounting and evaluation of provisions and the impairment test of goodwill and other assets. In the case of future-oriented assumptions and estimations on the balance sheet date the turnover at the time of the preparation of the consolidated financial statement as well as the realistically expected development of the global and branch-related environment are taken into account with regard to the expected future business development. In the case of developments in the underlying conditions which deviate from the assumptions and which are beyond the control of the management board the amount, which actually results can deviate from the estimated values. In the case if such a development occurs the assumptions and, if necessary, the carrying values of the affected assets and liabilities are adjusted to the latest information. As the consolidated financial statement is being prepared, there are no signs which indicate the necessity to significantly change the underlying assumptions and estimations.

113 Notes on the items of the consolidated Profit and Loss Account (1) Sales Sales of TEUR 1,183,725 (previous year: TEUR 925,895) are attributed in particular to revenue from construction contracts, sales revenue of own projects, trade to consortia, other services as well as proportionally acquired profits from consortia. Sales from construction contracts, which contain the periodical part of profits according to the level of completion of the respective contract (Percentage of Completion Method) amount to TEUR 555,330 (previous year: TEUR 466,346). Sales only reflect an incomplete picture of the output achieved in the business year. Therefore the total output of the group is additionally represented, which includes the proportional output of consortia and not consolidated or at-equity participations. 2006/ /06 Mio EUR Mio EUR Austria Hungary Tzech Republic Germany Romania Croatia Poland Great Britain Slowakia Serbia , ,113.7

114 (2) Other operating income 2006/ /06 TEUR TEUR Income from disposal and appreciation of fixed assets excluding financial assets 1,764 1,134 Income from reversal of provisions Others 6,672 7,133 9,333 8,404 The other remaining operational income mainly includes revenues from rent and leasing, insurance compensation, furtherances and exchange rate differences. (3) Cost of material and services purchased 2006/ /06 TEUR TEUR Cost of materials 461, ,494 Cost of services 299, , , ,351 Cost for services are mainly attributed to services of subcontractors and professionals craftsmen as well as planning services, machine rentals and third-party repairs. (4) Personnel expenditures 2006/ /06 TEUR TEUR Wages 127, ,727 Salaries 72,107 53,013 Expenditure for severance payments and contributions to pension funds 3,646 2,681 Expenditure for pensions Social security payments and expenditure for support 44,022 44,303 Other social expenditure 10,207 2, , ,071

115 Included in the expenditure for severance pay and in the expenditure for pensions are expenditure for service costs and actuarial profits. The proportion of interest included in the expenditure for severance payments as well as for pensions are recognized under the financial result. The average number of employees developed as follows: 2006/ /06 Salaried employees 2,021 1,759 Labourers 4,755 4,222 6,776 5,981 (5) Depreciation The planned and extraordinary depreciation of intangible assets and tangible assets are represented in the consolidated development of fixed assets. (6) Other operating expenditures The other operational expenditure of TEUR 131,668 (previous year: TEUR 105,835) mainly includes maintenance costs, rental- and lease costs, travel- and advertising costs. Other taxes amounting to TEUR 1,939 (previous year: TEUR 1,577). Expenditure for research and development incurred in various technical special proposals, in connection with concrete competitive projects and the introduction of building processes and products onto the market was therefore recognized in total in the profit and loss account.

116 (7) Result from participations in associated companies 2006/ /06 TEUR TEUR Income from participations in associated companies 7,810 3,312 Expenditure on participations in associated companies ,685 2,390 (8) Other financial result Included in interest and similar expenditure are interest components from the allocation of severance payment- and pension provisions amounting to TEUR 512 (previous year: TEUR 540). 2006/ /06 TEUR TEUR Interest and similar income 3,295 1,462 Interest and similar expenditure -10,269-5,618 Net interest income -6,974-4,156 Income from subsidaries Income from disposal and appreciation of financial assets and short-term securities 3 28 Other financial income Other financial expenditure Other financial result ,530-3,705

117 (9) Income tax Taxes paid in the individual companies, as well as the taxes owed on income and revenue and deferred taxes are recognized as income tax: 2006/ /06 TEUR TEUR Tax expenditure 6,292 5,689 Deferred tax 1, ,754 5,942 The reasons for the difference between the Austrian corporate income tax of 25 % and the recognized overall group ratio are represented as follows: 2006/ /06 TEUR TEUR Earnings before taxes 34,170 25,218 Theoretical tax expenditure 25 % 8,542 6,305 Differences from foreign tax rates Tax effects from: Non-tax deductible expenditure and tax-free earnings Tax-free reserves Change of tax rate/loss carry forward Tax-free income from associates Change of valuation adjustment on deferred tax assets Other Recognized income tax expenditure 7,754 5,942

118 Notes on items of the consolidated Balance Sheet Fixed assets The composition and changes in the fixed assets is represented in the table "Consolidated development of fixed assets" (Attachment 1 to the notes). (10) Intangible assets and tangible assets The book values of revaluated real estates and buildings that would have been resulted from valuation according to the cost model (IAS 16) would amount to TEUR 5,564 (previous year: TEUR 4,436). On the balance sheet date the following book values are included in the tangible assets due to existing finance leasing contracts: Real estate leasing March 31, March 31, TEUR TEUR Historical costs 5,474 5,745 Depriciation (accumulated) Book value 4,504 4,994 Machinery leasing March 31, March 31, TEUR TEUR Historical costs 11,028 11,028 Depriciation (accumulated) -4,496-3,789 Book value 6,532 7,239

119 Offset against these are liabilities from the present value of leasing obligations amounting to TEUR 9,291 (previous year: TEUR 11,061). The terms of the finance leases for real estate are between 10 and 25 years, while those for the machine leases are between 4 and 11 years. In subsequent business years the following liabilities (without outstanding payments) will arise from leasing: March 31, March 31, TEUR TEUR Term up to one year 2,146 2,339 Term between one to five years 3,106 4,816 Term over five years 3,351 3,332 8,603 10,487 As well as the finance leases there are also operating leases for the utilization of technical plants, machines, other plant, furniture and fixtures. The expenditure from these contracts is recognized as affecting the profit and loss. The payments made for the 2006/07 business year amount to TEUR 29,308 (previous year: TEUR 12,204). Payment obligations arising from operating lease agreements in subsequent business years are represented as follows: March 31, March 31, TEUR TEUR Term up to one year 20,099 9,931 Term between one to five years 56,379 25,600 Term over five years 16,201 4,344 92,679 39,875 In the year under report, extraordinary depreciation on tangible assets to the amount of TEUR 4 (previous year: TEUR 297) were made.

120 Restrictions on property, plant and equipment On the reporting date, there were no property collaterals. On balance sheet date there are no significant liabilities concerning the acquisition of tangible assets, which have not been considered in the financial statement. (11) Financial assets Detailed information on the group participations (shares of more than 20 %) can be found in the list of participations (Attachment 2 to the notes). Changes in the book value of participations, which are listed as associated companies, are recognized in the consolidated development of fixed assets under additions and disposals. Cur- Balance rency Balance on Trans- Ad- Trans- Dis- on lation ditions fers posals TEUR TEUR TEUR TEUR TEUR TEUR Shares in affiliated companies 3, , ,138 Equity participations 7, , ,573 Other participations 6, ,490 Long term securities 4, , Other loans Advance payments made , ,840-4,957 1,249 24,528 Long-term securities were transferred to cash equivalents (short term securities) as asset cover of provisions for severance payments is no longer obligatory. None of the securities have been pledged as collateral for sector-typical contingent liabilities.

121 The following table shows financial information of the associated companies (100 %): March 31, March 31, TEUR TEUR Total Assets 84,925 68,857 Total Liabilities 62,085 52,750 Sales 194, ,794 Profit 17,404 6,982 (12) Inventories March 31, March 31, TEUR TEUR Undeveloped grounds 17,721 13,981 Raw materials and supplies 16,153 14,270 Payments made 2,962 4,683 36,836 32,934 (13) Accounts receivable and other assets March 31, 2007 March 31, 2006 short- long- short- long- Total term term Total term term TEUR TEUR TEUR TEUR TEUR TEUR Receivables from construction contracts 480, , , ,160 0 Payments rendered on these -364, , , , , , ,375 80,375 0 Other accounts receivable from trade 92,298 89,448 2,850 71,345 68,750 2,595 Accounts receivable from consortia 44,240 44, ,402 25, Trade receivables and receivables for services rendered 252, ,441 2, , ,463 2,659

122 March 31, 2007 March 31, 2006 short- long- short- long- Total term term Total term term TEUR TEUR TEUR TEUR TEUR TEUR Accounts receivable from affiliated companies 6,771 6, ,597 3, Accounts receivable from companies with whom a participation relationship exists 14,161 14, ,058 5,057 1 Other accounts receivable and accruals and deferrals 19,389 18,389 1,000 14,077 12,891 1,186 Other accounts receivable and other assets 40,321 39,321 1,000 22,732 21,081 1,651 As usual in the branch the customer has the contractual right to retain part of the total amount of the invoice. These retainers are, however, redeemed as a rule by security (bank- or group guarantees). Accounts receivable from participation contracts are represented as follows: All contracts not invoiced for at balance sheet date: March 31, March 31, TEUR TEUR Costs incurred to balance sheet date 541, ,671 Profits arising to balance sheet date 33,276 30,869 Accumulated losses -19,436-13,193 Minus accounts receivable recognized under liabilities -74,936-73, , ,160 Receivables from construction contracts amounting to TEUR 74,936 (previous year: TEUR 73,186) are recognized under liabilities as payments received from these exceed the accounts receivable.

123 (14) Cash and cash equivalents Cash and cash equivalents include cash in hand, cash at banks and securities. (15) Deferred taxes Based on the currently valid tax regulations it can be assumed that the majority of the differing amounts between the tax related participation value and the proportional equity of the subsidiaries included in the consolidated financial statement, which arises in the profits received, remains tax-free. Therefore there was no accrual and deferral of taxes. Deferred taxes on losses carried forward were capitalized, as these can probably be offset with future taxable profits. No deferred tax assets were made for differences in book value on the assets side and tax losses carried forward of TEUR 0 (previous year: TEUR 0), as their effectiveness as final tax relief is not sufficiently assured. Temporary differences in amount stated in the IFRS financial statement and the respective tax amounts stated affect the tax accruals and deferrals recognized in the balance sheet as follows: March 31, 2007 March 31, 2006 Assets Liabilities Assets Liabilities TEUR TEUR TEUR TEUR Tangible assets 0 4, ,146 Financial assets Inventories Accounts receivable 0 4, ,767 Accruals and deferrals , ,386 Provisions 3, ,252 0 Liabilities Tax losses carried forward Deferred tax assets 4,517 10,543 3,724 8,386 Netting out of deferred tax assets and liabilities to the same tax authorities Deferred taxes netted out 4,517 10,543 3,724 8,386

124 (16) Shareholder's Equity The fully-paid Capital stock amounts to EUR 7,705, and is held by following shareholders: TRIAS Holding GmbH, Linz 88.2 HPB-Holding GmbH, Vienna 3.8 Thumersbacher Geräteverleih Gesellschaft m.b.h., Zell am See 8.0 % In the business year 2006/07, the company has made no transactions with TRIAS Holding GmbH. At balance sheet date there have been liabilities due TRIAS Holding GmbH amounting to TEUR 4,144 (previous year: TEUR 3,092). The retained earnings include currency translation differences and the statutory and mandatory retained earnings, the profit for the period as well as the result brought forward from previous periods of Swietelsky Baugesellschaft m.b.h. and their included subsidiaries, in as far as these were not eliminated by the capital consolidation. Acquisition of minorities mainly affect CELL-BAHNBAU Danubia Kft. and Mavepcell Kft., both are affiliated companies in Hungary. Details on the equity of the Swietelsky Baugesellschaft m.b.h.-group can be found in the development of equity.

125 (17) Provisions Balance on Changes Balance on April 1, Currrency in con- Allo- Appro- Utili- March 31, 2006 differnces solidation cation priation zation 2007 TEUR TEUR TEUR TEUR TEUR TEUR TEUR Provisions for severance pay 12, , ,610 Provisions for pensions Provisions for taxes , ,883 Other provisions: Constructionrelated provisions 12, , ,678 20,110 Other relations , , ,085 37,666 Provisions with a residual term up to more than one year concern personnel-related provisions as well as construction-related provisions amounting to TEUR Provisions for severance pay show the following development: March 31, March 31, TEUR TEUR Present value of the defined benefit obligaton (DBO) on ,223 11,490 Changes in consolidation Service costs Interest costs Severance payments Actuarial profit/loss Present value of the defined benefit obligaton (DBO) on ,610 12,223

126 The amount of the provision for severance pay is calculated using the actuarial methods based on AVÖ 1999-P "gemischter Bestand" guideline. This is based on a discounting rate of 4.5 % (previous year: 4.5 %) and in the case of salary-related commitments a salary increase of 3 % (previous year: 3 %). For new entrants these commitments will be taken over by a public severance fund from Jan- uary 1, 2003 on. The development of the provisions for pensions is represented as follows: March 31, March 31, TEUR TEUR Present of the defined benefit obligation (pension) on Interest costs Pension payments Actuarial profit/loss Present of the defined benefit obligation (pension) on The amount of the provision for pensions is calculated using the actuarial methods based on AVÖ 1999-P "Angestellte" guideline. This is based on a discounting rate of 4.5 % (previous year: 4,5 %). Future pension valorization are not considered. The provisions for pensions are formed for obligations from the right to future pension payments and current payments to present and past employees and their dependents. The obligations primarily refer to retirement pensions. The individual commitments are generally determined according to the employment conditions of the employee at the time of the commitment (and length of service, salary of employee). Basically no new commitments have been awarded since 1993.

127 The company pension plan consists of a non fund-financed and performance-oriented pension system. In the case of performance-oriented pension systems the company is obliged to fulfill payment commitments to present and past employees. There are no contribution-oriented pension systems in the form of financing be relief funds. The construction-related provisions mainly include provisions for threatening losses, guarantee obligations, obligations resulting from consortia and legal costs. (18) Liabilities The liabilities can be represented as follows: Financial liabilities: March 31, 2007 March 31, 2006 short- long- short- long- Total term term Total term term TEUR TEUR TEUR TEUR TEUR TEUR Bonds 29, ,099 29, ,256 Liabilities to banks 74,334 42,599 31,735 55,097 29,197 25,900 Liabilities from finance leases 10, ,643 11, ,061 Liabilities from trade payables and payables for services rendered: 113,462 42,985 70,477 95,414 29,197 66,217 Accounts receivable from construction contracts -74,936-74, ,186-73,186 0 Payments received from these 91,376 91, ,261 83, ,440 16, ,075 10,075 0 Other liabilities from trade 130, ,216 4, ,310 96,018 7,292 Liabilities to consortia 30,592 30, ,285 6, , ,215 4, , ,200 7,470 In the business year 2005/06 a new bond was placed with an nominal amount of EUR 30,000,00.00.

128 Other liabilities: March 31, 2007 March 31, 2006 short- long- short- long- Total term term Total term term TEUR TEUR TEUR TEUR TEUR TEUR Liabilities to affiliated companies 5,514 5, ,656 4, Liabilities due to companies with whom a participation relationship exists 1,720 1, ,537 3, Other liabilities, accruals and deferred income 53,470 49,300 4,170 51,293 49,384 1,909 60,704 56,069 4,635 59,486 56,806 2,680 of these from tax 10,154 10, ,582 15,582 0 of national insurance 5,079 5, ,227 4,227 0 of personnel-related liabilities and deferrals 21,081 21, ,876 29,876 0 In order to secure liabilities to banks real securities amounting to TEUR 0 (previous year: TEUR 2,730) have been booked. (19) Contingent liabilities Due to new regulations in IAS 39 financial guarantees are not shown as contingent liabilities but are instead reflected in the balance sheet. The amount of outstanding financial guarantees are shown under credit risk (see 23). (20) Notes on consolidated cash-flow statement The representation of the cash flow statement was made according to the indirect method and separated into the payment streams resulting from operating, investing and financing activities. The cash and cash equivalents are composed as follows: March 31, March 31, TEUR TEUR Cash in hand, cash at banks 13,593 10,102

129 Any effects of changes in consolidation were eliminated and represented in the cash-flow from investing activities. (21) Financial Instruments The financial instruments basically include primary and derivative financial instruments. Financial assets, trade receivables, cash at banks, financial liabilities and trade and other payables form the most significant basis for the existing group primary financial instruments. The amount of primary financial instruments arises from the balance sheet. Derivative instruments are exclusively used to secure existing risks in changes of interest rates. The use of derivative financial instruments in the group is subject to the appropriate authorization and supervision processes. The connection to a mainstay business is a must, trading is not permissible. Risk of changes in interest rate Above all the financial instruments bear variable interest rates both, on the assets and liabilities side. There is the risk of increasing interest charges or sinking interest revenue, which result from an unfavorable change in market interest rates. In particular cases the risk of changes in interest rate will be covered by interest rate swaps. The financial instruments bear variable interest rates on the assets side, on the liabilities side there are both variable and fixed interest obligations. The risk of financial instruments bearing variable interest rates consists of increasing interest charges and sinking interest revenue resulting from an unfavourable change in market interest rates. Fixed interest obligations mainly result from the bond issued amounting to a total of 30 Mio EUR.

130 As of March 31, 2007, the following interest rate hedging transactions existed: Interest rate swaps: Nominal value Market value March 31, March 31, March 31, March 31, TEUR TEUR TEUR TEUR Bank Austria Creditanstalt AG 500 1, Bond Erste Bank 30,000 30, ,500 31, The amount of cash and liabilities to banks according to currency - giving the average interest rate at balance sheet date - is represented as follows: Cash at banks Weight average Book interest rate value 2006/2007 Currency TEUR % EUR 4, GBP 2, HRK 2, RON 1, HUF 1, PLN SKK CZK CHF ,593

131 Liabilities to banks Weighted average Book interest rate value 2006/07 Currency TEUR % EUR 59, CHF 5, HUF 3, CZK 3, SKK 1, ,334 Currency conversion risk Due to the decentral nature of the group, which is characterized by local companies in the respective countries, it is mainly closed currency positions which appear in the balance sheet. That means accounts receivable and liabilities from business activities mainly offset each other in the same currency. Loan financing and investments were predominantly made by the group companies in the respective country's local currency. Development of the significant group currencies Market Market rate at Average rate at Average March 31, rate March 31, rate / /06 Currency 1 Euro = 1 Euro = 1 Euro = 1 Euro = HUF CZK PLN CHF RON GBP HRK SKK

132 Credit risk The risk for accounts receivable from clients can, due to the wide dispersion and a constant creditworthiness check, be rated as very low. The risk of default for other primary financial instruments shown on the assets side can also be regarded as low, as the contract partners are exclusively financial institutes with the highest level of creditworthiness. The maximum risk of default is the book values of each financial asset in the balance sheet. Generally the risk of default can be regarded as low, as the financial partners of the group are exclusively financial institutes with the highest level of creditworthiness. Furthermore, there is a derived credit risk arising from the financial guarantee contracts (guarantees issued) of TEUR 22,063 (previous year: TEUR 17,479). Furthermore as is usual in the branch in the case of consortia, in which companies of the Swietelsky Baugesellschaft m.b.h.-group participate, there is joint liability with the other partners. Against associated companies there are financial guarantee contracts amounting to TEUR 3,644. Market value The market value of the financial assets and liabilities are depicted under the respective items. The market value of fixed interest bearing financial liabilities and derivate financial instruments were calculated on the basis of recognised evaluation methods. Market values of derivative financial instruments are shown under the hedging transactions. Market values of the fixed interest bearing financial liabilities amount to TEUR 1,985 as of March 31, 2007 (Carrying amount as of March 31, 2007 TEUR 2,006). (22) Notes on Related Parties There exist no arm's-length business relations with related parties. The member of the supervisory board, Dr. Günther Grassner, is Partner of "Rechtsanwälte Grassner, Lenz, Thewenger & Partner", Linz, who renders consulting services for the group at arm s length.

133 (23) Notes on the management - and supervisory board and employees In the business year following persons have been acted as executive directors: Ing. Hellmuth B r u s t m a n n Dipl.-Ing. Kurt K l a d e n s k y In the business year following persons have been member of the supervisory board: Senator h.c. Komm.rat Dipl.-Ing. Dr. Richard S c h e n z, Chairman Dr. Günther G r a s s n e r, Vice-Chairman Dr. Andre H o v a g u i m i a n, Vice-Chairman Johann K a r m e d a r Werner K l e m e n t The salary expenses include the total salaries of the members of the board with TEUR 1,151 (previous year: TEUR 1,010). Compensations amounting to TEUR 80 (previous year: 103) have been granted to the members of the supervisory board. (24) Significant events after the balance sheet date There are no significant events after the closure of the business year. Linz, July 16, 2007 Executive directors Ing. Hellmuth Brustmann Dipl.-Ing. Kurt Kladensky Attachment 1/1 to the notes: Consolidated development of fixed assets as of March 31, 2007 Attachment 1/2 to the notes: Consolidated development of fixed assets as of March 31, 2006 Attachment 2 to the notes: List of participants

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135 Swietelsky Baugesellschaft m.b.h., Attachment 1/2 Linz to the notes C o n s o l i d a t e d D e v e l o p m e n t o f f i x e d a s s e t s as of March 31, 2006 I. Intangible assets: Balance Balance Balance Balance Balance Balance at Changes Exchange at at Changes Exchange at at at April 1, in conso- rate Trans- March 31, April 1, in conso- rate Trans- March 31, March 31, March 31, 2005 lidation differences fers Additions Disposals lidation differences fers Additions Disposals TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR 1. Concessions, trade marks and similar rights, licences Goodwill II. Tangible assets: Real estate and equivalent rights, buildings on third party property (real estate value TEUR 13,734; previous year: TEUR 13,877) Machinery and technical equipment Other plant, furniture and fixtures Plant an machinery in process of construction III. Financial assets: Historical and production costs Accumulated depreciation Book value Shares in affiliated companies Equity participations Other participations Long term securities Other loans Advance payments made ) Appreciations

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140 ABCD Swietelsky Baugesellschaft m.b.h., Linz Report on the Audit of the Consolidated Financial Statements for the Year ended March 31, 2007 July, 16, 2007 Independent Auditor's Report Report on the consolidated financial statements We have audited the accompanying consolidated financial statements of Swietelsky Baugesellschaft m.b.h., Linz, for the business year from April 1, 2006 to March 31, These consolidated financial statements comprise the balance sheet as at March 31, 2007, and the income statement, statement of changes in equity and cash flow statement for the year ended March 31, 2007, and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the EU. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and in accordance with International Standards on Auditing, issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

141 ABCD Swietelsky Baugesellschaft m.b.h., Linz Report on the Audit of the Consolidated Financial Statements for the Year ended March 31, 2007 Opinion Our audit did not give rise to any objections. Based on the results of our audit in our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the group as of March 31, 2007, and its financial performance and its cash flows for the business year from April 1, 2006 to March 31, 2007 in accordance with International Financial Reporting Standards as adopted by the EU. Report on Other Legal and Regulatory Requirements Laws and regulations applicable in Austria require us to perform audit procedures whether the management report for the group is consistent with the consolidated financial statements and whether the other disclosures made in the management report for the group do not give rise to misconception of the position of the group. In our opinion, the management report for the group is consistent with the consolidated financial statements. Linz, July, 16, 2007 KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft Dr. Helge Löffler Public Austrian Accountant Mag. Peter Humer Public Austrian Accountant This report is a translation of the original report in German, which is solely valid. Publication of the consolidated financial statements together with our auditor's opinion may only be made if the financial statements are identical with the audited version attached to this report. 281 Abs 2 öugb applies.

142 ANNEX 2: ANNUAL IFRS CONSOLIDATED FINANCIAL STATEMENTS FOR THE BUSINESS YEAR ENDING 31 MARCH 2006

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146 Swietelsky Baugesellschaft m.b.h., Linz C o n s o l i d a t e d C a s h - F l o w S t a t e m e n t for the business year 2005/ / /05 TEUR TEUR Net income Deffered taxes Non cash effective results from associated companies Decpreciations/Appreciations Change in long-term provisions Profits/losses from sale/disposal of plants Cash-flow from profits Change in items: Inventories Receivables from trade, construction contracts and joint ventures Group receivables and receivables from companies with whom a participation relationship exists Other assets Liabilites from trade, construction contracts and joint ventures Group liabilities and liabilities to companies with whom a participation relationship exists Other liabilities Short-term provisions Cash-flow from operating activities / /05 TEUR TEUR Acquisition of financial assets Profits/losses from sale/disposal of plants Reduction of fixed assets at book value Exchange rate differences and changes in consolidation circle minus acquired cash and cash equivalents Cash-flow from investing activities

147 Swietelsky Baugesellschaft m.b.h., Linz 2005/ /05 TEUR TEUR Changes in bank liabilities Changes in bond loans Changes in liabilites from finance leases Distribution of company profits Cash-flow from financing activities / /05 Notes TEUR TEUR Cash-flow from operating activities Cash-flow from investing activities Cash-flow from financing activities Net changes in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Changes in cash and cash equivaltens due to exchange rate differences Cash and cash equivalents at the end of the financial year (14) / /05 TEUR TEUR Interests paid Interests received Taxes paid

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149 Group Notes to the Financial Statements for the 2005/06 business year of Swietelsky Baugesellschaft m.b.h., Linz Basic principles The consolidated financial statement of the Swietelsky Baugesellschaft m.b.h., Linz, under application of 245a of the Austrian Commercial Code, have been drawn up as of March 31, 2006 in accordance with the "International Financial Reporting Standards" ("IFRS") stipulations issued by the "International Accounting Standards Board" ("IASB") and including the interpretations of the "International Financial Reporting Interpretations Committees" ("IFRIC") which had to be applied on deadline date for the first time. Applied were exclusively those standards and interpretations adopted by the European Commission before the reporting deadline and published in the Official Journal of the European Union. Further reporting requirements of Article 245a Paragraph 1 of the Austrian Commercial Code (HGB) were fulfilled as well. As well as the profit and loss account and the balance sheet, a cash flow statement in accordance with IAS 7 will be drawn up and the changes in equity and the shares of other shareholders shown (IAS 1). As the company's share has not been traded openly the notes will not comprise segment reporting in accordance with IAS 14. In order to improve the clarity of the representation various items in the balance sheet and the profit and loss account have been combined. These items have been shown separately and explained in the notes. The consolidated profit and loss account has been drawn up in accordance with the classification of expenses by category. Changes to accounting and valuation The IASB has passed a series of changes to the existing body of IFRS as well as several new IFRS standards which must be applied as of January 1, The first-time application of IFRS standards mentioned essentially had the following consequences on consolidated financial statement of the Swietelsky Baugesellschaft m.b.h. as of March 31, 2006:

150 IAS 1 Presentation of financial statements IAS 1 (2003) requires the presentation of a classified balance sheet separating current and noncurrent assets and liabilities. The balance sheet thus reports assets and liabilities as long or short-term. Assets and liabilities are classified as short-term if they are held for trading within the next twelve months or if they can be realized/settled within the enterprise s normal operating cycle. The item Other Financial Assets includes stakes held in associated companies, other investments, loans and long-term security investments. The stakes held by other shareholders are posted as special items in the Statement of Shareholders Equity. Changes in minority holdings are reflected in the Statement of Changes in Shareholders Euity. Reserves for pension, severance pay and similar liabilities are shown in Long-Term Liabilities, in accordance with their character. Deferred Taxes are to be classified in the balance sheet fundamentally as long-term. Asset and liability accruals and deferrals are no longer posted as special items in the balance sheet, but instead will be classified under Other Assets and Receivables or Other Liabilities. Financial Instruments Financial assets classified as available-for-sale are on initial recognition valued according to acquisition costs and later measured at fair value in the balance sheet if reliable assessment of value is possible. Previously, fair value changes above the cost of acquisition are recognized directly in equity; changes below the cost of acquisition are recognized directly in the financial results.

151 Future changes to financial reporting requirements The IASB and the IFRIC have approved further standards and interpretations, not yet mandatory for the 2005/06 accounting year. The new standards and interpretations are as follows: IFRS 7 (Financial Instruments: Disclosures) is effective for annual periods beginning on or after January 1, IFRIC 4 (Determining whether an arrangement contains a Lease) is effective for annual periods beginning on or after January 1, The future application of these standards and interpretations will not significantly affect the consolidated financial statement. Consolidated group As well as Swietelsky Baugesellschaft m.b.h., all the important domestic and foreign subsidiaries are included in the consolidated financial statement of March 31, 2006, in which Swietelsky Baugesellschaft m.b.h. has the direct or indirect majority of votes. Balance sheet date of all material companies included in the consolidated financial statement is March 31, Immaterial subsidiaries as well as associated companies are accounted at equity. The financial statements of all fully-consolidated important companies or domestic and foreign companies, which are obliged to be audited according to national law, were audited by independent auditors and awarded the unqualified stamp of confirmation. 21 (previous year: 12) affiliated companies were not included, as their influence on the group assets-, financial and earnings situation is immaterial. The turnover volume of the subsidiaries, which are not included, is less than 1.6 per cent of the group sales. The companies included in the 2005/06 consolidated financial statement can be seen in the list of participations (Attachment 2 to the notes).

152 The financial year of all consolidated companies starts with April 1 and ends with March 31 of the ensuring year. The consolidated group developed as follows in the 2005/06 business year: Full consolidation Equity valuation Situation on April 1, Initial inclusion in the year under report 5 1 Mergers -1 0 Exclusions in year under report Situation on March 31, therefrom foreign companies 12 7 The following companies were included for the first time in the consolidation group at the balance sheet date: Purchase-/ Nominal Shares Foundation- Company Currency capital % date Stavební a inženýrská a.s., Dolni Rychnov, Czech Republic TCZK 4, Mavepcell Kft., Celldömölk, Hungary THUF 196, CELL-BAHNBAU Danubia Kft., Celldömölk, Hungary THUF 6, Georg Feßl GmbH, Zwettl TEUR SWIETELSKY Construction Company Ltd., London, Great Britain TGBP ) 1) The consolidation of companies included for the first time was made at the point of acquisition or to the nearer balance sheet date in far as no significant effects arose from the inclusion at the point of acquisition. 1) Due to their increasing business volume, these companies were included in the group s circle of fully consolidated companies for the first time. The companies were established or acquired before April 1, 2005.

153 The total volume of first-time consolidations involves primarily the acquisition of Georg Feßl GmbH and the CELL-BAHNBAU Danubia Kft./Mavepcell Kft.-group. With the contract for purchase and transfer of March 7, 2005 all shares of Georg Feßl GmbH were acquired from Montalcino Privatstiftung, Vienna per cent of the shares of CELL-BAHNBAU Danubia Kft. and of their subsidiary Mavepcell Kft. were acquired for TEUR 10,520 at June 14, At October 13, 2005 the company accomplishes control. Minorities amounting to 21.5 per cent remain in possession of two former shareholders. The purchase price can be broken down into assets and liabilities as follows: CELL-BAHNBAU/Mavepcell-Group Acquired assets and liabilities TEUR Goodwill 4,528 Other non-current assets 2,198 Current assets 37,434 Increase in minority interest in equity -1,641 Non-current liabilities 0 Current liabilities -31,999 Purchase price 10,520 Acquired cash and cash equivalents -14,341 Net inflow from the acquisition -3,821 The goodwill of TEUR 4,528 arising from the acquisition of the CELL-BAHNBAU/Mavepcellgroup can primarily be attributed to the entry into Hungarian market.

154 Georg Feßl GmbH Acquired assets and liabilities TEUR Goodwill 732 Other non-current assets 1,165 Current assets 2,583 Increase in minority interest in equity 0 Non-current liabilities -373 Current liabilities -3,107 Purchase price 1,000 Acquired cash and cash equivalents -161 Net outflow from the acquisition 839 The goodwill of TEUR 732 arising from the acquisition of Georg Feßl GmbH can primarily be attributed to the entry in the segment of structural engineering in the region. The remaining first-time consolidations involve Stavební a inženýrská a.s., Dolni Rychnov, Czech Republic, and SWIETELSKY Construction Company Ltd., London, Great Britain. They were recognized because of their relevancy. As of 31 March 2006, the following companies were no longer included in the group s basis of consolidated companies: Full Consolidation: Baldauf Fliesen und Baustoffe Gesellschaft m.b.h., Linz Czernilofsky Gesellschaft m.b.h., Vienna SND-Bauträger Ges.m.b.H., Innsbruck Wolfgang & Schwarz Bauunternehmungsgesellschaft m.b.h., Innsbruck

155 At-equity valuation: AMG Gunskirchen GmbH AWM Asphaltwerk Mötschendorf Gesellschaft m.b.h. AWB Asphaltmischwerk Weißbach Betriebs-GmbH C. Peters Baugesellschaft m.b.h. FMA Asphaltwerk GmbH G.K.S Swietelsky Kft. Gaspix Beteiligungsverwaltungs GmbH GSB Gleitschalungsbau GmbH GZW Gesundheitszentrum Wörgl ErrichtungsgmbH Jos. Ertl GmbH Karl Sedlmayer Installationsgesellschaft m.b.h. KIESWERK BETRIEBSGESELLSCHAFT MBH ÖKO-Consult-Umwelttechnik GmbH Nfg KEG PAM Pongauer Asphaltmischanlagen GmbH RPM Wiebe & Swietelsky BeteiligungsgmbH SWIETELSKY gradbeno podjeteje d.o.o. Swietelsky Tunnelbau GmbH TAM Traisental Asphaltmischwerk Ges.m.b.H. Transportbeton und Asphalt Gesellschaft m.b.h. TBG-Swietelsky Beton Kft. VAM - Valentiner Asphaltmischwerk Gesellschaft m.b.h. Consolidation Methods The financial statements of the domestic and foreign companies included in the consolidation are drawn up in accordance with uniform accounting and valuation principles. The annual financial statements of the domestic and foreign group companies are adapted accordingly; insignificant deviations remain unchanged.

156 For acquisitions from March 31, 2003 capital consolidation is made in accordance with the stipulations in IFRS 3. All assets and debts of the subsidiaries are recorded at the accompanying values. The proportional equity thereby determined is offset by the participation book value. Differying amounts on the assets side, which are allotted to special, identifiable intangible assets, which were acquired within the framework of the business combination, are recognised separately from the goodwill. If a useful life can be allocated to these assets, the planned amortisation is made over the projected useful life. Intangible assets with an indefinite useful life are tested annually for their intrinsic value and amortised if necessary on the basis of an impairment test. Any remaining differying amounts on the assets side are capitalised as goodwill and amortised on the basis of an impairment test in accordance with IAS 36. There is no planned depreciation of goodwill resulting from acquisitions after April 1, In the 2005/06 financial year, TEUR 5,580 in goodwill arising from capital consolidation were recognized as asset. The same principles of capital consolidation are applied to participations included under the Equity-Method as in the case of fully-consolidated companies, whereby the respective last available financial statement serves as the basis for the equity consolidation. In the case of companies recognised under the equity method the local valuation principles are kept only in case of insignificant differences. Within the framework of debt consolidation, receivables from trade, loans as well as other receivables are rounded up with the corresponding liabilities and provisions among the subsidiaries included in the financial statement. Expenditure and income from internal-group trade have been eliminated. Interim results incurred from internalgroup trade transactions in the fixed- and current assets have been cancelled, as far as they are not of minor importance. Minority interests in the equity and in the result of the companies, which are controlled by the parent company, are shown separately in the consolidated financial statement.

157 The necessary tax deferrals are made for consolidation procedures affecting the profit and loss account. Currency translation The group currency is the Euro. The financial statements for the foreign companies are converted into Euro according to the concept of the working currency. As the companies run their business independently regarding financial, economic and organizational matters in all companies this is the respective local currency. All balance sheet items are converted at the mean foreign exchange price at the balance sheet date. Expenditure- and income items are converted at the average annual price. In the business year exchange rate differences of TEUR -21 (previous year: TEUR 1,359) are recognized in the equity with no effect on the operating result in the course of the capital consolidation. The currency translation differences between the cut off date within the balance sheet and the average price within the profit and loss account are allocated to equity. Accounting and valuation principles Intangible assets and tangible assets Acquired intangible assets and tangible assets are recognized at their historical or production price, minus planned and unplanned depreciation. Both the direct and the appropriate parts of overhead costs for the self-constructed plants are included in the production costs.

158 The planned depreciation of the depreciable fixed assets is made according to the straight line method in accordance with the foreseeable useful life, whereby in the case of utilization over a six month period of an asset acquired in the financial year the depreciation is recognized at the full annual amount, in the case of shorter utilization period at half the annual amount. Should there be indications of impairment in the case of assets and should the market value of the future cash surpluses be under the market values, then an impairment is made according to IAS 36 to the lower accompanying value. The following useful lives were assumed in the determination of the rate of depreciation: Intangible assets: Software and licenses 3-4 Tangible assets: Buildings Machinery and technical equipment 4-17 Other plant, furniture and fixtures Useful life in years 4-10 Leasing contracts on assets, on which all the chances and risks essentially lay with the company, are treated as finance leases. The fixed assets underlying these leasing agreements are capitalized at the present value of the minimum payments at the beginning of leasing relations and depreciated over the foreseeable useful life or over shorter contract terms. These are offset by the liabilities arising from future leasing payments, whereby the former are recognized at the present value of the outstanding obligations at the balance sheet date. In addition there are leasing agreements for tangible assets, which are regarded as operating leases. Leasing payments resulting from these contracts are recognized as expenditure.

159 Revaluation Real estates as well as flats and stock spaces will be revaluated. Differing amounts minus deferred taxes, which result from revaluation, will be charged against the equity. The accumulated amount of revaluations added up to TEUR 9,301 (previous year: TEUR 9,922) on the date of balance sheet. The deferred taxes concerning revaluations amounted to TEUR 2,652 (previous year: TEUR 2,791) on the date of balance sheet. Expenses for debasement amounting to TEUR 589 in the financial are directly acquired in the equity. Tangible assets (real estates and buildings) were revaluated according to an independent expertise from: Weissmann+Pitschmann February 25, 2004 for Austria Dipl.-Ing. (FH) Wilfrid Mirbeth January 13, 2004 for Germany Dippong Magdolna und Zsuffa Kálmán Spring 2004 for Hungary For determining the current market price the reference value method has been used. Financial assets In accordance with IAS 28 shares in associated companies are evaluated at equity - in far as they are not shares of minor significance. Basically the same valuation methods are applied here as for fully consolidated companies. Subsidiaries, which are not consolidated, and participations, which are not reported at equity, are reported at their historical cost or at the lower accompanying value, in accordance with IAS 39 in as far as this value can be reliably determined. Interest-bearing loans are, as long as no value deductions are necessary, reported at nominal value. Interest-free or low interest-bearing loans are discounted to their present value.

160 All the securities in the fixed assets are reported at cost at the date of acquisition and evaluated in later periods at the respective market value. The ensuing value adjustments are recognized in the respective year in the profit and loss account as affecting the current-period result. The market values of the securities result from the official price at the balance sheet date. Inventories Inventories are evaluated at historical cost or production cost or at the lower market value of a lower accompanying value. The production costs include all direct costs as well as appropriate parts of overheads arising in the production. Distribution costs as well as costs for general administration are not included in the production costs. The interest on borrowing in connection to the production is not capitalized. Accounts receivable and other assets Receivables from trade and other receivables are evaluated at their nominal value minus valuation adjustments for realizable individual risks. Graduated valuation adjustments are formed according to risk groups in order to take general loan risks on customer receivables into consideration. Non-interest bearing and low-interest bearing receivables are discounted. Foreign currency receivables are evaluated on balance sheet date at the valid exchange rate or in the case of hedging at the hedged rate. In the case of receivables from construction contracts the results are realized according to the Percentage of Completion Method. The output actually attained by the balance sheet date serves as a benchmark for the degree of completion. Threatening losses from the further construction process are accounted for by means of appropriate depreciations.

161 When the performance to be evaluated, which was provided within the framework of a construction contract, exceeds the payments received for it, then this is shown on the assets side under receivables from construction contracts. In the reverse case this is reported on the liabilities side under liabilities from trade. The results, in the case of construction contracts, which are carried out in consortia, are realized according to the Percentage of Completion Method in accordance with the degree of completion on balance sheet date. Threatening losses arising from further construction work are accounted for by means of appropriate depreciations. Receivables from or liabilities to consortia include the proportional contract result as well as capital contributions, in- and out payments and charges resulting from services. The valuation of other assets is made at historical cost minus extraordinary depreciation. Deferred taxes The determination of tax deferral is made according to the Balance Sheet Liability Method for all temporary differences between the carrying value of the balance sheet items in the IFRS consolidated financial statement and their existing tax values in the case of individual companies. Furthermore, the tax advantage which can probably be realized from existing losses carried forward, is included in this process. Differing amounts from non-tax deductible goodwill are exceptions to this extensive tax deferral. Deferred tax assets are only recognized if it is probable that the included tax advantage is realizable. The calculation of the tax deferral is based on the usual income tax rate in the respective country at the point of the predicted reversal in their value difference.

162 Provisions Provisions for severance pay are created as a result of statutory regulations. The provision for severance payments is determined by using the actuarial expertise. Here the future claim over the length of employment of the employees is collected while taking any future pay rises into consideration. The present value of the partly earned partial-claims on deadline day is recognized as the provision. The change in value of the determined provision amount as a result of changes in the calculation parameter (= actuarial profit or loss) is immediately recognized as a whole in the profit and loss account. Pension provisions are calculated according to the Projected Unit Credit Method. In this method the discounted pension claim acquired up to balance sheet date is determined. The effect in value of the change to these assumptions is recognized as an actuarial profit and loss and is in total immediately recognized in the profit and loss account. Service costs are recognized in the personnel expenditure, the proportion of the interest in the allocation of provisions in the financial result. The calculation of the severance pay- and pension provisions is based on an interest rate of 4.5 % and an expected development of income and pensions of 3 %. Life expectancy for severance pay and pension provisions are calculated according to AVÖ 1999-P "gemischter Bestand" and AVÖ 1999-P "Angestellte". The other provisions take into consideration all realizable risks and uncertain obligations. They are recognized at the respective amount, which is necessary at the balance sheet date according to commercial judgment, in order to cover future payment obligations, realizable risks and uncertain obligations within the group. Hereby the respective amount is recognized, which arises as the most probable on careful examination of the facts. Long-term provisions are, in as far as they are not immaterial, accounted at their discounted discharge amount on balance sheet date. The discharge amount also includes the cost increases to be considered on balance sheet date. Provisions, which arise from the obligation to recultivate gravel sites, are allocated according to the rate of utilization.

163 Liabilities Liabilities are basically recognized at the repayment amount. Foreign currency liabilities are evaluated at the mean foreign currency rate at balance sheet date. Interest free liabilities especially those from financial leasing liabilities, are accounted at the present value of the repayment obligation. Contingent liabilities Contingent liabilities are possible or existing obligations, with which an outflow of resources is not probable. They are not recognized in the balance sheet. The reported obligation volumes of the contingent liabilities correspond to the extent of liability on the balance sheet date. Derivative financial instruments The valuation of interest rate swaps is made at the point of entry at historical cost, in later periods at the respective current market value. Estimations and assumptions In the consolidated financial statement, to a certain degree assumptions and estimations have to be made, which influence the accounted assets and liabilities, the declaration of other obligations on the date of balance sheet and the discloser of income and expenses during the reporting period. The actual amounts can differ from the estimations. The handling of material errors according to IAS 8.31 During the preparation of the consolidated report for the business year 2005/06 a material error at the revaluation of fixed assets from the prior year was detected.

164 For the classification of the lease contracts wrong estimates of the economic lives were used. The lease contracts originally were classified as finance lease. The classification, based on the correct economic lives, lead to a classification as operating lease. To correct this error the consolidated financial statements as of March 31, 2005 were adapted. The impact on the financial statements as of March 31, 2005 due to the correction of material errors are shown as follows: March 31, 2005 TEUR before after adaption adaption change Balance sheet: Assets: 110,532 95,732-14,800 Fixed assets Shareholder's Equity and liabilities: Retained earnings 75,133 75, Non-current liabilities: Financial liabilities 41,573 26,450-15,123 Deferred taxes 6,360 6, Profit and loss account: Depreciation -15,116-13,511 1,605 Other operating expenses -81,517-83,487-1,970 Other financial results -3,091-2, Income tax -4,739-4, Result 106

165 Notes on the items of the consolidated Profit and Loss Account (1) Sales Sales of TEUR 925,895 (previous year: TEUR 700,050) are attributed in particular to revenue from construction contracts, sales revenue of own projects, trade to consortia, other services as well as proportionally acquired profits from consortia. Sales from construction contracts, which contain the periodical part of profits according to the level of completion of the respective contract (Percentage of Completion Method) amount to TEUR 466,346 (previous year: TEUR 345,831). Sales only reflect an incomplete picture of the output achieved in the business year. Therefore the total output of the group is additionally represented, which includes the proportional output of consortia and participations. 2005/ /05 Mio EUR Mio EUR Austria Hungary Germany Tzech Republic Poland Croatia Slowakia Romania ,

166 (2) Other operating income 2005/ /05 TEUR TEUR Income from disposal and appreciation of fixed assets excluding financial assets 1,134 1,057 Income from reversal of provisions Others 7,133 6,523 8,404 8,262 The other remaining operational income mainly includes revenues from rent and leasing, insurance compensation, furtherances and exchange rate differences. (3) Cost of material and services purchased 2005/ /05 TEUR TEUR Cost of materials 327, ,433 Cost of services 249, , , ,237 Cost for services are mainly attributed to services of subcontractors and professionals craftsmen as well as planning services, machine rentals and third-party repairs.

167 (4) Personnel expenditures 2005/ /05 TEUR TEUR Wages 111,727 83,624 Salaries 53,013 54,441 Expenditure for severance payments and contributions to pension funds 2,681 2,507 Expenditure for pensions Social security payments and expenditure for support 44,303 40,685 Other social expenditure 2,305 1, , ,201 Included in the expenditure for severance pay and in the expenditure for pensions are expenditure for service costs and actuarial profits. The proportion of interest included in the expenditure for severance payments as well as for pensions are recognized under the financial result. The average number of employees developed as follows: 2005/ /05 Salaried employees 1,759 1,430 Labourers 4,222 3,287 5,981 4,717 (5) Depreciation The planned and extraordinary depreciation of intangible assets and tangible assets are represented in the consolidated development of fixed assets.

168 (6) Other operating expenditures The other operational expenditure of TEUR 105,835 (previous year: TEUR 83,487) mainly includes maintenance costs, rental- and lease costs, travel- and advertising costs. Other taxes amounting to TEUR 1,577 (previous year: TEUR 1,424). Expenditure for research and development incurred in various technical special proposals, in connection with concrete competitive projects and the introduction of building processes and products onto the market was therefore recognized in total in the profit and loss account. (7) Result from participations in associated companies 2005/ /05 TEUR TEUR Income from participations in associated companies 4,026 4,007 Expenditure on participations in associated companies -1, ,390 4,006

169 (8) Other Financial result Included in interest and similar expenditure are interest components from the allocation of severance payment- and pension provisions amounting to TEUR 540 (previous year: TEUR 492). 2005/ /05 TEUR TEUR Interest and similar income (of this from affiliated companies EUR 0.00; previous year: TEUR 0) 1,462 1,318 Interest and similar expenditure (of this from affiliated companies EUR 0.00; previous year: TEUR 0) -5,618-4,667 Net interest income -4,156-3,349 Income from subsidaries Income from disposal and appreciation of financial assets and short-term securities Other financial income Other financial expenditure Adoption accordant to IAS 8 (Lease) Other financial result ,705-2,568 (9) Income tax Taxes paid in the individual companies, as well as the taxes owed on income and revenue and deferred taxes are recognized as income tax: 2005/ /05 TEUR TEUR Tax expenditure 5,689 6,628 Deferred tax 253-1,837 5,942 4,791

170 The reasons for the difference between the Austrian corporate income tax of 25 % and the recognized overall group ratio are represented as follows: 2005/ /05 TEUR TEUR Earnings before taxes 25,218 13,782 Theoretical tax expenditure 25 % 6,305 3,445 Differences from foreign tax rates Tax effects from: Non-tax deductible expenditure and tax-free earnings Tax-free reserves Back duty due to tax audit 0 5,009 Back duty/tax credit Change of tax rate/loss carry forward 0-1,935 Tax-free income from participations Valuation of affiliated comanies at equity Recognized income tax expenditure 5,942 4,791

171 Notes on items of the consolidated Balance Sheet Fixed assets The composition and changes in the fixed assets is represented in the table "Consolidated development of fixed assets" (Attachment 1 to the notes). (10) Intangible assets and tangible assets The book values of revaluated real estates and buildings that would have been resulted from valuation according to the Benchmark-method (IAS 16) would amount to TEUR 4,436 (previous year: TEUR 4,481). On the balance sheet date the following book values are included in the tangible assets due to existing finance leasing contracts: Real estate leasing March 31, March 31, TEUR TEUR Historical costs 5,745 5,745 Depriciation (accumulated) Book value 4,994 5,213 Machinery leasing March 31, March 31, TEUR TEUR Historical costs 11,028 12,894 Depriciation (accumulated) -3,789-3,821 Book value 7,239 9,073

172 Offset against these are liabilities from the present value of leasing obligations amounting to TEUR 11,061 (previous year: TEUR 13,424). The terms of the finance leases for real estate are between 10 and 25 years, while those for the machine leases are between 4 and 11 years. In subsequent business years the following liabilities (without outstanding payments) will arise from leasing: March 31, March 31, TEUR TEUR Term up to one year Term between one to five years Term over five years As well as the finance leases there are also operating leases for the utilization of technical plants, machines, other plant, furniture and fixtures. The expenditure from these contracts is recognized as affecting the profit and loss. The payments made for the 2005/06 business year amount to TEUR 12,204 (previous year: TEUR 7,076). Payment obligations arising from operating lease agreements in subsequent business years are represented as follows: March 31, 2006 TEUR March 31, 2005 TEUR Term up to one year 9,931 5,735 Term between one to five years 25,600 11,553 Term over five years 4,344 4,017 39,875 21,305 In the year under report, extraordinary depreciation on tangible assets to the amount of TEUR 297 (previous year: TEUR 0) were made.

173 On balance sheet date there are no significant liabilities concerning the acquisition of tangible assets, which have not been considered in the financial statement.

174 (11) Financial assets Detailed information on the group participations (shares of more than 20 %) can be found in the list of participations (Attachment 2 to the notes). Changes in the book value of participations, which are listed as associated companies, are recognized in the consolidated development of fixed assets under additions and disposals. Securities in the fixed assets amounting to TEUR 4,957 (previous year: TEUR 4,853) primarily serve to cover domestic provisions for severance payments and pensions. (12) Inventories March 31, March 31, TEUR TEUR Undeveloped grounds 13,981 13,838 Raw materials and supplies 14,270 12,336 Payments made 4, ,934 26,174 (13) Accounts receivable and other assets March 31, 2006 March 31, 2005 short- long- short- long- Total term term Total term term TEUR TEUR TEUR TEUR TEUR TEUR Receivables from construction contracts 393, , , ,916 0 Payments rendered on these -312, , , , ,375 80, ,370 58,370 0 Other accounts receivable from trade 71,345 68,750 2,595 41,692 38,663 3,029 Accounts receivable from consortia 25,402 25, ,471 19,471 0 Accounts receivable from trade 177, ,463 2, , ,504 3,029

175 March 31, 2006 March 31, 2005 short- long- short- long- Total term term Total term term TEUR TEUR TEUR TEUR TEUR TEUR Accounts receivable from affiliated companies 3,597 3, Accounts receivable from companies with whom a participation relationship exists 5,058 5, ,566 10,566 0 Other accounts receivable and accruals and deferrals 14,077 12,891 1,186 14,439 13, Other accounts receivable and other assets 22,732 21,081 1,651 25,657 24, As usual in the branch the customer has the contractual right to retain part of the total amount of the invoice. These retainers are, however, redeemed as a rule by security (bank- or group guarantees). Accounts receivable from participation contracts are represented as follows: All contracts not invoiced for at balance sheet date: March 31, March 31, TEUR TEUR Costs incurred to balance sheet date 448, ,946 Profits arising to balance sheet date 30,869 19,186 Accumulated losses -13,193-6,301 Minus accounts receivable recognized under liabilities -73, , , ,916 Receivables from construction contracts amounting to TEUR 73,186 (previous year: TEUR 124,915) are recognized under liabilities as payments received from these exceed the accounts receivable.

176 (14) Cash and cash equivalents Cash and cash equivalents include cash in hand, cash at banks and securities. (15) Deferred taxes Based on the currently valid tax regulations it can be assumed that the majority of the differing amounts between the tax related participation value and the proportional equity of the subsidiaries included in the consolidated financial statement, which arises in the profits received, remains tax-free. Therefore there was no accrual and deferral of taxes. Deferred taxes on losses carried forward were capitalized, as these can probably be offset with future taxable profits. No deferred tax assets were made for differences in book value on the assets side and tax losses carried forward of TEUR 0 (previous year: TEUR 0), as their effectiveness as final tax relief is not sufficiently assured. Temporary differences in amount stated in the IFRS financial statement and the respective tax amounts stated affect the tax accruals and deferrals recognized in the balance sheet as follows: March 31, 2006 March 31, 2005 Assets Liabilities Assets Liabilities TEUR TEUR TEUR TEUR Tangible assets 0 4, ,617 Financial assets Inventories ,217 Accounts receivable 0 3, ,929 Accruals and deferrals , ,387 Provisions 3, Accruals and deferrals 0 0 2,320 0 Liabilities Tax losses carried forward ,584 0 Deferred tax assets 3,724 8,386 3,914 8,387 Netting out of deferred tax assets and liabilities to the same tax authorities 0 0-1,924-1,924 Deferred taxes netted out 3,724 8,386 1,990 6,463

177 (16) Shareholder's equity The fully-paid Capital stock amounts to EUR 7,705, and is held by following shareholders: EUR % TRIAS Holding GmbH, Linz 6,799, HPB-Holding GmbH, Vienna 289, Thumersbacher Geräteverleih Gesellschaft m.b.h., Zell am See 616, ,705, In the business year 2005/06, the company has made no transactions with TRIAS Holding GmbH. At balance sheet date there have been liabilities due TRIAS Holding GmbH amounting to TEUR 3,092. The retained earnings include currency translation differences and the statutory and mandatory retained earnings, the profit for the period as well as the result brought forward from previous periods of Swietelsky Baugesellschaft m.b.h. and their included subsidiaries, in as far as these were not eliminated by the capital consolidation. Acquisition of minorities mainly affect CELL-BAHNBAU Danubia Kft. and Mavepcell Kft., both are affiliated companies in the Hungary. Details on the equity of the Swietelsky Baugesellschaft m.b.h.-group can be found in the development of equity.

178 (17) Provisions The personnel-related provisions amounting to TEUR 29,876 (previous year: TEUR 17,335) will be transferred to other liabilities. Provisions with a residual term up to more than one year concern personnel-related provisions as well as construction-related provisions amounting to TEUR 543. Balance on Changes Balance on April 1, Currrency in con- Allo- Appro- Utili- March 31, 2005 differnces solidation cation priation zation 2006 TEUR TEUR TEUR TEUR TEUR TEUR TEUR Provisions for severance pay 11, , ,223 Provisions for pensions Provisions for taxes 6, , Other provisions: Constructionrelated provisions 9, , ,919 12,020 Other relations , , ,263 25,774 Provisions for severance pay show the following development: March 31, March 31, TEUR TEUR Present value of the defined benefit obligaton (DBO) on ,490 10,477 Changes in consolidation Service costs Interest costs Severance payments Actuarial profit/loss Present value of the defined benefit obligaton (DBO) on ,223 11,490

179 The amount of the provision for severance pay is calculated using the actuarial methods based on AVÖ 1999-P "gemischter Bestand" guideline. This is based on a discounting rate of 4.5 % (previous year: 5 %) and in the case of salary-related commitments a salary increase of 3 % (previous year: 3 %). For new entrants these commitments will be taken over by a severance fund from January 1, 2003 on. The amounts paid to the employees' provision fund in the previous business year add up to TEUR 142. The development of the provisions for pensions is represented as follows: March 31, March 31, TEUR TEUR Present of the defined benefit obligation (pension) on Interest costs Pension payments Actuarial profit/loss 15 9 Present of the defined benefit obligation (pension) on The amount of the provision for pensions is calculated using the actuarial methods based on AVÖ 1999-P "Angestellte" guideline. This is based on a discounting rate of 4.5 % (previous year: 5 %). Future pension valorization of 3 % (previous year: 3 %) is considered. The provisions for pensions are formed for obligations from the right to future pension payments and current payments to present and past employees and their dependents. The obligations primarily refer to retirement pensions. The individual commitments are generally determined according to the employment conditions of the employee at the time of the commitment (and length of service, salary of employee). Basically no new commitments have been awarded since 1993.

180 The company pension plan consists of a non fund-financed and performance-oriented pension system. In the case of performance-oriented pension systems the company is obliged to fulfill payment commitments to present and past employees. There are no contribution-oriented pension systems in the form of financing be relief funds. The construction-related provisions mainly include provisions for threatening losses, guarantee obligations, obligations resulting from consortia and legal costs. (18) Liabilities The liabilities can be represented as follows: Financial liabilities: March 31, 2006 March 31, 2005 short- long- short- long- Total term term Total term term TEUR TEUR TEUR TEUR TEUR TEUR Bonds 29, , Liabilities to banks 55,097 29,197 25,900 49,157 35,958 13,199 Liabilities from finance leases 11, ,061 13, ,251 Liabilities from trade payables and payables for services rendered: 95,414 29,197 66,217 62,580 36,130 26,450 Accounts receivable from construction contracts -73,186-73, , ,915 0 Payments received from these 83,261 83, , , ,075 10, ,825 8,825 0 Other liabilities from trade 103,310 96,018 7,292 71,383 67,487 3,896 Liabilities to consortia 6,285 6, ,343 6, , ,200 7,470 86,551 82,655 3,896

181 Other liabilities: March 31, 2006 March 31, 2005 short- long- short- long- Total term term Total term term TEUR TEUR TEUR TEUR TEUR TEUR Liabilities to affiliated companies 4,656 4, Liabilities due to companies with whom a participation relationship exists 3,537 3, ,876 1,876 0 Other liabilities, accruals and deferred income 51,293 49,384 1,909 38,080 35,625 2,455 59,486 56,806 2,680 40,672 38,217 2,455 of these from tax 15,582 15, ,491 6,491 0 of national insurance 4,227 4, ,731 3,731 0 In order to secure liabilities to banks real securities amounting to TEUR 2,730 (previous year: TEUR 2,815) have been booked. (19) Contingent liabilities The company has accepted the following guarantees: March 31, March 31, TEUR TEUR Guarantees 17,479 14,822 Furthermore as is usual in the branch in the case of consortia, in which companies of the Swietelsky Baugesellschaft m.b.h.-group participate, there is joint liability with the other partners. Against associated companies there are contingent liabilities amounting to TEUR 6,739.

182 (20) Notes on consolidated cash-flow statement The representation of the cash flow statement was made according to the indirect method and separated into the payment streams resulting from operating, investing and financing activities. The cash and cash equivalents are composed as follows: March 31, March 31, TEUR TEUR Short-term securities 15,369 16,634 Cash in hand, cash at banks 10,102 9,774 25,471 26,408 Any effects of changes in consolidation were eliminated and represented in the cash-flow from investing activities. (21) Financial Instruments The financial instruments basically include primary and derivative financial instruments. The primary financial instruments mainly include financial assets, accounts receivable, cash equivalents, liabilities to banks and liabilities from trade. The amount of primary financial instruments arises from the balance sheet. Derivative instruments are exclusively used to secure existing risks in changes of currency- and interest rates. The use of derivative financial instruments in the group is subject to the appropriate authorisation- and supervision processes. The connection to a mainstay business is a must, trading is not permissible. Risk of changes in interest rate Above all the financial instruments bear variable interest rates both, on the assets and liabilities side. There is the risk of increasing interest charges or sinking interest revenue, which result from an unfavorable change in market interest rates. In particular cases the risk of changes in interest rate will be covered by interest rate swaps.

183 The amount of cash and liabilities to banks according to currency - giving the average interest rate at balance sheet date - is represented as follows: Cash at banks Weight average Book interest rate value March 31, Currency TEUR 2006 EUR 3, % HUF % CZK % CHF % PLN 2, % HRK 1, % GBP 1, % SKK % 10,102 Liabilities to banks Weighted average Book interest rate value March 31, Currency TEUR 2006 EUR 38, % HUF 7, % CZK 3, % CHF 5, % HRK % 55,097

184 Currency conversion risk Due to the decentral nature of the group, which is characterized by local companies in the respective countries, it is mainly closed currency positions which appear in the balance sheet. That means accounts receivable and liabilities from business activities mainly offset each other in the same currency. Loan financing and investments were predominantly made by the group companies in the respective country's local currency. Development of the significant group currencies Market Market rate at Average rate at Average March 31, rate March 31, rate / /05 Currency 1 Euro = 1 Euro = 1 Euro = 1 Euro = HUF CZK PLN CHF HRK SKK Credit risk The risk for accounts receivable from clients can, due to the wide dispersion and a constant creditworthiness check, be rated as very low. The risk of default for other primary financial instruments shown on the assets side can also be regarded as low, as the contract partners are exclusively financial institutes with the highest level of creditworthiness. The maximum risk of default is the book values of each financial asset in the balance sheet. Generally the risk of default can be regarded as low, as the financial partners of the group are exclusively financial institutes with the highest level of creditworthiness.

185 Market value The market value of the financial-assets and liabilities are depicted under the respective items. Derivative financial instruments Derivative instruments (interest rate swaps) are exclusively used to secure existing risks in changes of currency- and interest rate. Derivative financial instruments are not used for trading. The nominal value of the derivative financial instrument is the result of the historical costs. The market value of interest rate swaps is equivalent to the amount, which the company would receive or would have to pay in case of liquidation on balance sheet date. Interest rate swaps: Nominal value Market value March 31, March 31, March 31, March 31, TEUR TEUR TEUR TEUR Bank Austria Creditanstalt AG Bond Erste Bank (22) Notes on the management - and supervisory board and employees In the business year following persons have been acted as executive directors: Ing. Hellmuth B r u s t m a n n, Vienna Dipl.-Ing. Kurt K l a d e n s k y, Linz

186 In the business year following persons have been member of the supervisory board: Senator h.c. Komm.rat Dipl.-Ing. Dr. Richard S c h e n z, Chairman (since ) Dr. Andre H o v a g u i m i a n, Vice-Chairman Dr. Günther G r a s s n e r, Vice-Chairman (since ) Johann K a r m e d a r Werner K l e m e n t (since ) Dr. Norbert N a g e l e (since until ) Mag. Dr. Leopold B e d n a r (until ) Ing. Ernst N u ß b a u m e r (until ) Dr. Erwin P r o d i n g e r (until ) Dipl.-Ing. Werner B a i e r (until ) Baumeister Ing. Ernst D r a s c h a n (until ) Johann M e i s s n i t z e r (until ) The salary expenses include the total salaries of the members of the board with TEUR 1,010 (previos year: TEUR 948). Compensations amounting to TEUR 103 (previous year: 247) have been granted to the members of the supervisory board.

187 (23) Significant events after the balance sheet date Significant events after the closure of the business year are described in the management report. Linz, July 14, 2006 Executive directors Ing. Hellmuth Brustmann Dipl.-Ing. Kurt Kladensky Attachment 1/1 to the notes: Consolidated development of fixed assets as of March 31, 2006 Attachment 1/2 to the notes: Consolidated development of fixed assets as of March 31, 2005 Attachment 2 to the notes: List of participants

188 Swietelsky Baugesellschaft m.b.h., Attachment 1/1 Linz to the notes C o n s o l i d a t e d D e v e l o p m e n t o f f i x e d a s s e t s as of March 31, 2006 I. Intangible assets: Balance Balance Balance Balance Balance Balance at Changes Exchange at at Changes Exchange at at at April 1, in conso- rate Trans- March 31, April 1, in conso- rate Trans- March 31, March 31, March 31, 2005 lidation differences fers Additions Disposals lidation differences fers Additions Disposals TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR 1. Concessions, trade marks and similar rights, licences Goodwill II. Tangible assets: Real estate and equivalent rights, buildings on third party property (real estate value TEUR 13,734; previous year: TEUR 13,877) Machinery and technical equipment Other plant, furniture and fixtures Plant an machinery in process of construction III. Financial assets: Historical and production costs Accumulated depreciation Book value Shares in affiliated companies Equity participations Other participations Long term securities Other loans Advance payments made ) Appreciations

189

190 Swietelsky Baugesellschaft m.b.h., Attachment 2/1 Linz to the notes L i s t o f p a r t i c i p a n t s as of March 31, 2006 Share Name % Fully-consolidated companies: Austria: A.S.T. Baugesellschaft m.b.h., Innsbruck 100,00 Baumeister Karl Sedlmayer Gesellschaft mit beschränkter Haftung, Grafenwörth 100,00 C. Peters Baugesellschaft m.b.h. & Co KG., Linz 100,00 Georg Feßl GmbH, Zwettl 100,00 Hoch- Tief- Bau- Imst Gesellschaft m.b.h., Imst 100,00 Ing. Rudolf Seibt Gleisbau GmbH, Vienna 100,00 Jos. Ertl GmbH & Co KG, Breitbrunn 100,00 Kallinger Bau GmbH, Vienna 100,00 Kontinentale Baugesellschaft m.b.h., Vienna 100,00 Swietelsky Bauträger Ges.m.b.H., Linz 100,00 SWIETELSKY - INTERNATIONAL Baugesellschaft m.b.h. 100,00 Swietelsky Tunnelbau GmbH & Co KG, Innsbruck 100,00 Germany: Swietelsky Baugesellschaft m.b.h., Traunstein 100,00 Wadle Bauunternehmung GmbH, Essenbach 100,00 Hungary: CELL-BAHNBAU Danubia Kft., Celldömölk 78,50 Mavepcell Kft., Celldömölk 78,50 1) SWIETELSKY Épitö Kft., Budapest 100,00 Czech Republic: Kašpar -Koller, Stavitelství s.r.o., Ceské Budéjovice 100,00 Stavební a inženýrská a.s., Dolni Rychnov 100,00 Swietelsky stavební s.r.o., Ceské Budejovice 100,00 Other: SWIETELSKY Construction Company Ltd., London, Great Britain 100,00 SWIETELSKY d.o.o., Zagreb, Croatia 100,00 SWIETELSKY - SLOVAKIA s.r.o., Bratislava, Slovakia 100,00 SWIETELSKY Sp. Z o.o., Lublin, Poland 100,00 1) Calculated

191 Swietelsky Baugesellschaft m.b.h., Attachment 2/2 Linz to the notes Share Name % Associated companies: AMG GUNSKIRCHEN GMBH & CO. KG ASPHALTMISCHWERK, Linz 33,33 AMS Asphaltmischwerk Süd Gesellschaft m.b.h., Linz 35,00 AMW Asphaltwerk Weitendorf G.m.b.H., Weitendorf 22,00 AWB Asphaltmischwerk Weißbach GmbH & Co. Nfg. KG, Weißenbach bei Lofer 45,00 AWM Asphaltwerk Mötschendorf GmbH & Co. KG, Graz 50,00 AWT Asphaltwerk GmbH, Stadtschlaining 33,33 Baldauf Fliesen und Baustoffe Gesellschaft m.b.h., Linz 100,00 Brn nská Obalovna s.r.o., Brno, Czech Republic 25,00 Chebská obalovna spol. s.r.o., Stenovice, Czech Republic 33,33 Eurailpool GmbH, Kirchheim, Germany 50,00 FMA Asphaltwerk GmbH & Co KG, Feldbach 30,00 KIESWERK - BETRIEBSGESELLSCHAFT MBH & CO KG, Zams 22,50 PAM - Pongauer Asphaltmischanlagen GmbH & Co KG, St. Johann 50,00 PETSCHL FRÄSTECHNIK Ges.m.b.H., Perg 29,03 RBA - Recycling- und Betonanlagen Ges.m.b.H & Co. Nfg. KG, Zirl 24,00 RPM Wiebe & Swietelsky GmbH & Co. KG, Achim, Germany 49,00 Strakonická Obalovna s.r.o., Strakonice, Czech Republic 51,00 Swietelsky - Faber GmbH-Kanalsanierung, Schlierschied, Germany 50,00 SWIETELSKY - MAVÉPCELL Vasútépitö Kft., Celldömölk, Hungary 89,47 2) TAM Traisental Asphaltmischwerk Ges.m.b.H. & Co KG, Nußdorf 33,33 Transportbeton und Asphalt GesmbH & Co KG, Zams 45,00 VAM - Valentiner Asphaltmischwerk GmbH. & Co KG, Linz 25,00 Not consolidated companies: 1) ALBA ASZFALT Épitöipari és Kereskedelmi Kft., Szekesfehervar, Hungary 100,00 AMG GUNSKIRCHEN GMBH ASPHALTMISCHWERK, Linz 33,33 AWB Asphaltmischwerk Weißbach Betriebs-GmbH, Weißenbach 45,00 AWM Asphaltwerk Mötschendorf Gesellschaft m.b.h., Graz 50,00 Belváros Tet tér Kft., Budapest, Hungary 96,67 C-Bau Kft., Budapest, Hungary 100,00 2) C. Peters Baugesellschaft m.b.h., Linz 100,00 1) insignificant importance 2) calculated

192 Swietelsky Baugesellschaft m.b.h., Attachment 2/3 Linz to the notes Share Name % Czernilofsky Gesellschaft m.b.h., Vienna 100,00 DRUMSERV SA, Targu Mures, Romania 95,80 Duna Autopalya Rt, Budapest, Hungary 20,00 EULAB Kft., Dunakeszi, Hungary 50,00 FMA Asphaltwerk GmbH, Feldbach 30,00 Gaspix Beteiligungsverwaltungs GmbH, Vienna 24,00 G.K.S Swietelsky Ingatlanforgalmazo Kft., Budapest, Hungary 100,00 GSB Gleitschalungsbau GmbH, Hamburg, Germany 33,33 GZW Gesundheitszentrum Wörgl ErrichtungsgmbH, Wörgl 44,92 HTB Italia Srl, Bolzano, Italy 100,00 Jos. Ertl GmbH, Breitbrunn 100,00 Karl Sedlmayer Installationsgesellschaft m.b.h., Grafenwörth 100,00 KIESWERK - BETRIEBSGESELLSCHAFT MBH, Zams 25,00 MABA Hungaria Kft, Celldömölk, Hungary 63,97 M6 Kkt, Budapest, Hungary 33,33 ÖKO-Consult-Umwelttechnik GmbH -Nfg KEG, Bergheim 26,00 Ostre Beteiligungs GmbH, Vienna 33,33 PAM - Pongauer Asphaltmischanlagen GmbH, St. Johann 50,00 Passzázs Ház Kft., Budapest, Hungary 100,00 2) Pinzgau Beton GmbH, Bergheim 37,00 Pinzgau Beton GmbH & Co. KG, Bergheim 37,00 RPM Wiebe & Swietelsky BeteiligungsgmbH, Achim, Germany 49,00 RTS Rail Transport Service GmbH, Graz 90,00 S.C. AMFIBOSWIN SRL, Sibiu, Romania 56,50 S.C. Andemur S.R.L., Stanceni, Romania 51,00 Silver Invest Kft., Hungary 50,00 SND-Bauträger Ges.m.b.H., Innsbruck 76,00 SR Beiteiligungs GmbH, Linz 51,00 Swietelsky Tunnelbau GmbH, Innsbruck 100,00 Swietelsky Constructii Feroviare s.r.l., Bukarest, Romania 95,00 SWIETELSKY gradbeno podjetje d.o.o, Ljubljana, Slovenia 100,00 TAM Traisental Asphaltmischwerk Ges.m.b.H., Nußdorf 33,33 TBG - Swietelsky Beton Kft., Tatabanya, Hungary 50,00 Transportbeton und Asphalt Gesellschaft mbh, Zams 50,00 VAM - Valentiner Asphaltmischwerk Gesellschaft m.b.h., Linz 25,00 Wolfgang & Schwarz BauunternehmungsgmbH, Innsbruck 100,00 2) calculated

193 ABCD Swietelsky Baugesellschaft m.b.h., Linz, Austria Consolidated financial statements March 31, 2006 Auditor s report and unqualified audit certificate To the Supervisory Board and the management of Swietelsky Baugesellschaft m.b.h. We have audited the consolidated financial statements of Swietelsky Baugesellschaft m.b.h., Linz, Austria, for the business year from April 1, 2005 to March 31, The Company s management is responsible for the drawing up and for the content of these financial statements in accordance with the International Financial Reporting Standards (IFRSs), issued by the International Accounting Standards Board, as they are to be applied in the European Union. Our responsibility is to express an opinion on these financial statements based on our audit and to state whether the management report is in accordance with the financial statements. We have conducted our audit in accordance with the Austrian legal requirements and standards governing the establishment of an orderly audit of annual accounts. These standards require that we plan and perform the audit in order to obtain reasonable assurance that the financial statements are free of material misstatement and that an opinion can be made whether the management report is consistent with the financial statements. The audit takes into consideration information concerning business activity, the economic and legal framework of the company and expectations of possible errors. An audit includes examining, on a test basis, evicence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Our audit has resulted in no objections to the annual report. As a result of the insight gained form our audit, it is our opinion that the consolidated financial statements are conform with the legal requirements and that they present fairly, in all material respects, the financial position of the company as of March 31, 2006, as well as the results of its operations and its cash flows for the fiscal year from April 1, 2005 to March 31, 2006 in accordance with International Financial Reporting Standards (IFRSs) as they are to be applied in the European Union. The management report is consistent with the financial statements. Linz, July 14, 2006 KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft Mag. Ernst Pichler Public Austrian Accountant and Tax Consultant Mag. Rudolf Kraus Public Austrian Accountant and Tax Consultant The consolidated financial statements with our audit certificate may only be published or circulated in the form certified by us. For variant versions (e.g. shortening or translation into an other language) the requirements of Article 281 Paragraph 2 of the Austrian Commercial Code (HGB) apply.

194 STATEMENT PURSUANT TO COMMISSION REGULATION (EC) NO 809/2004 Swietelsky Baugesellschaft m.b.h., represented by Ing. Hellmuth Brustmann and DI Kurt Kladensky, managing directors of the Issuer, is responsible for this Prospectus and declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import, and signs this prospectus in accordance with 8 of the Austrian Capital Market Act. Swietelsky Baugesellschaft m.b.h. (as Issuer) Ing. Hellmuth Brustmann DI Kurt Kladensky

195 ISSUER Swietelsky Baugesellschaft m.b.h. Edlbacherstraße Linz Austria SOLE LEAD MANAGER Erste Bank der oesterreichischen Sparkassen AG Graben Vienna Austria PAYING AGENT Erste Bank der oesterreichischen Sparkassen AG Graben Vienna Austria TRANSACTION COUNSEL WOLF THEISS Rechtsanwälte GmbH Schubertring Vienna Austria AUDITOR KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft Kudlichstraße Linz Austria