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DES GB2012 E

Currency translation The Group currency is the euro (€). The companies located outside the eurozone that are included in the consolidated financial statements are treated as legally independent, but economically dependent, integrated companies. The reporting currencies of these compa- nies (Polish zloty and Hungarian forint) therefore deviate from the functional currency (euro). Under IAS 21, annual financial statements prepared in foreign currencies are translated using the functional currency method, with the result that the balance sheet is to be translated as if the transactions had arisen for the Group itself, as the local currency of the integrated companies is deemed to be a foreign currency for these companies themselves. Monetary values are therefore translated at the closing rate and non-monetary items at the rate that applied at the time of initial recognition. Non-monetary items to be reported at fair value are translated at the closing rate. Items in the consolidated income statement are translated at average rates for the year or, in the event of strong fluctuations, using the rate that applied on the date of the transaction. Any translation differences that may arise if the translation rates of the balance sheet and consolidated income statement differ are recognised in profit or loss. A closing rate of HUF 291.29 (previous year: HUF 311.13) and an average rate of HUF 289.42 (previous year: HUF 279.28) were used in the translation of the separate Hungarian financial statements for Einkaufs-Center Arkaden Pécs KG, Hamburg, from forint to euros. A closing rate of PLN 4.0822 (previous year: PLN 4.4168 ) and an average rate of PLN 4.185 (previous year: PLN 4.1189) were taken as a basis for translating the separate financial statements of the Polish property company. Changes in accounting policies ADJUSTMENT OF PREVIOUS YEAR’S VALUES IN ACCORDANCE WITH IAS 8 (CORRECTION OF AN ERROR) The Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin – German Federal Financial Supervisory Authority) has notified us that an audit of the financial statements for the financial year 2011 revealed two mistakes: The item “Measurement gains/losses” indicated in the consolidated income statement was €8.3 million too low because merger-related expenses connected to the acquisition of the Billstedt-Center Hamburg which should have been recognised in financial year 2010 were erroneously recognised in financial year 2011. In the 2011 consolidated financial statements, cash inflows in the amount of €155.2 million are recognised in “Cash flow from operating activities” and cash outflows in the same amount are recognised in “Cash flow from investment activities”, both in connection with the acquisition of the Billstedt-Center Hamburg, yet no cash inflows or outflows in this amount actually took place during the period. Additionally, within the scope of corrections made to the cash flow statement, a correction was made to the way pur- chase price prepayments in connection with the increased shareholdings in the Allee-Center Hamm and the Rhein- Neckar-Zentrum in 2011 were depicted. { 149 } DES ANNUAL REPORT 2012 CONSOLIDATED FINANCIAL STATEMENTS Currency translation