7 | Consolidated Financial Statements
Due to the expiry of conversion rights in the 2009 and 2010 fiscal years, authorized capital has decreased by EUR 24,400.00, which has not yet been entered in the commercial register. The company’s authorized capital on the balance sheet date amounted to EUR 166,500.00 (1,665 bonds each consisting of 100 shares). Please also refer to the section on the Convertible Bond Program.
Purchase of treasury shares As of the end of the day of the General Meeting on May 21, 2010, in accordance with Section 71, paragraph 1, point 8 of the Stock Corporation Act (AktG), the company was authorized to purchase treasury shares amounting to up to 10 percent of share capital (EUR 5,295,952.00 at this point in time) up until May 20, 2015 for purposes other than trading in treasury shares. The shares purchased, together with other treasury shares held by the company or attributable to the company as per Section 71a ff. of the German Stock Corporation Act, must at no time amount to more than 10 percent of share capital. This authorization was not utilized in fiscal year 2010.
Share-based payment REALTECH AG has set up various convertible bond programs for Executive Board members, senior executives and other employees in the Group. The expense recognized for services during fiscal year 2010 is EUR 13 thousand (previous year: EUR 0 thousand). This concerns expenses resulting from equity-settled share-based payment transactions in accordance with IFRS 2. The measurement is based on expected volatility of 25.90 percent. It is assumed that future trends can be derived from historical volatilities, whereby the actual volatility may differ from the assumptions made here. The calculation is made based on the Black-Scholes formula. A risk-free interest rate of 3.93% is applied. The anticipated term of these options is five years. The exercise price is EUR 5.87.
Convertible bond program The contingent capital increase resolved by the General Meeting on May 16, 2002 to issue convertible and/or warrant-linked bonds also entails bonds being issued to company employees and managers – apart from the group of four founding shareholders – as well as to employees and members of the executive boards of companies associated with the company in accordance with Section 15 of the German Stock Corporation Act (Aktiengesetz, AktG).
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