Contents. Summary of the Management Report 2009/2010

Transcription

1 ANNUAL FINANCIAL STATEMENT P&I PERSONAL & INFORMATIK AG 1 APRIL MARCH 2010

2 Contents Summary of the Management Report 2009/2010 Overview of the fiscal year 1 The company 2 Economic Conditions 22 Business development for the Group 22 P&I AG 30 Summarised appraisal of Business Development 33 Corporate Risk Report 34 Supplementary Report 39 Forecast 39 AG Financial Statements for 2009/2010 according to HGB Balance Sheet 44 Statement of Income 45 Cash-flow Statement 46 Notes 47 Responsibility Statement 78 Audit Certificate 79

3 This Combined Management Report contains information concerning the P&I Personal & Informatik group (P&I Group) and P&I Personal & Informatik corporation (P&I AG). P&I Personal & Informatik AG is the parent company of the P&I Group and performs group leadership functions. Since P&I Personal & Informatik AG is a major part of the P&I Personal & Informatik Group, the Management Report of P&I AG is combined with that of the P&I Group pursuant to 315 Para. 3 of the German Commercial Code (HGB) in combination with 298 Para. 3 HGB. The respective details relate to the Group, unless P&I AG is expressly referred to. The Group accounts are prepared in conformity with the International Financial Reporting Standards (IFRS) in the manner required in the European Union, and with the additional commercial legislation to be applied pursuant to 315a Para. 1 HGB, The annual financial statements for the corporation have been compiled in compliance with the provisions of the German Commercial Code as well as of the German Companies Act. 1. Overview of the fiscal year Despite the continuing economic and financial crisis the P&I Group was able to record sales growth together with an increase in profitability during fiscal 2009/2010. Competence, quality, service-orientation and creativity all combine to ensure a successful and sustainable business. Increased sales and EBIT margin growth: P&I on the road to success - P&I Group sales rose by 7.2 per cent from 59.0 million euros to 63.3 million euros, which meant that the P&I Group exceeded its own target. - With an EBIT of 15.3 million euros, the P&I Group achieved a margin of 24.2 per cent, increasing the previous year's result by 2.2 million euros. - The P&I Group generated 38.4 per cent of their sales, 24.3 million euros, in the maintenance sector, a recurring and high-profit business. - A range of medium- and small-sized projects, especially those involving our existing customers through add-on business or the migration from old products to P&I solutions, resulted in license sales of 15.5 million euros (previous year: 17.2 million euros). A major project valued at 1.5 million euros was included in the previous year s licensing business but no projects of this size materialised during the fiscal year that has just ended. - P&I has expanded the product portfolio for our P&I TIME management solution and established it as the expert solution for time management as a result of the acquisition of Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh, of Höxter. - P&I AG made a dividend distribution in the previous year once again. It amounted to 1.00 euro per share. The Board of Directors intends to propose a dividend payment of 1.10 euros per share for fiscal 2009/2010 at the next AGM. - The P&I shares (prime standard quoted on the Frankfurter Stock Exchange) continued to develop extremely positively. They started fiscal 2009/2010 at a price of euros Euro and closed on March 31, 2010 at a price of euros (XETRA trading). 1

4 - The company acquired 177,248 shares as part of the share buyback scheme, which was introduced in October 2008 and ran until September 30, The most significant performance measurements for the P&I Group developed as follows: In 000 euros 2007/ /2009 Variance 2009/2010 Variance Incoming orders 33,926 34, % 42, % Sales 59,415 59, % 63, % Licensing sales 17,376 17, % 15, % Consulting sales 18,457 19, % 21, % Maintenance sales 22,205 21, % 24, % International sales 12,254 12, % 13, % EBIT 13,070 13, % 15, % EBIT margin 22.0 % 22.2 %./ %./. 2. The Company 2.1 Business activities The P&I Group is a corporation that is active throughout Europe as a provider of integrated software solution to the HR sector, providing software development, licensing, maintenance, and IT services. Whether it is payroll, HR, web-based employee and management portals or time management: the fully integrated P&I LOGA HR software covers virtually all of the HR management tasks and it is the leader both with regard to technological as well as functional capability. This software s payroll component has been designed so that it can be used for payroll accounting in ten different European countries. Numerous data centres and international HR service providers provide their customers with services based on our P&I LOGA solution. More than 3,000 customers in Germany and in other European countries are looked after directly by P&I. They all place their trust in P&I s huge expertise gained from over 40 years market presence. P&I provides HR solutions from a single source and readying solutions that will prepare the customers for the future. The corporate object for the Company and its subsidiaries is the creation, sale and maintenance of software and the provision of associated advice and training for operators, as well as retailing DP equipment and software for the HR and time management sectors. P&I is present in the market with four product lines - applicable for any size of business and any industry across Europe. Our complete portfolio of solutions for HR administration consists of 2

5 o P&I LOGA, which is an integrated HR software payroll accounting solution, that enables HR, time management and P&I HCM to be used as portal software within P&I LOGA for supporting web-based personnel work o P&I TIME, which is a stand-alone time management solution for upmarket requirements with interfaces that enable it to be embedded in existing IT landscapes o P&I PLUS, which is a web-based, HR and time management premium segment solution that operates independently from the payroll o P&I SMART, which is a payroll-focussed brand for medium- and smaller-sized enterprises. P&I is an independent corporation listed on the stock exchange, with a shareholder structure characterised by the more than 40 German and foreign institutional investors. 2.2 Corporate strategy Sustainability is the powerhouse of our company strategy. Competence, creativity, credibility, innovation and quality are our resources. Investment and concentration are our strategic activities: 1. Investment in new software products and modules. 2. Organisational developments arising from the ability to bundle concentration with competence. 3. Promoting the dedication and motivation of our employees. 4. Concentration on P&I's strengths. P&I is a medium-sized company and will only continue to remain successful if the company remains creative and flexible, responds quickly and continues to radiate competence and credibility. P&I is well-equipped to implement further strategic growth stages over the entire range of services that we provided. Our strategic activities will be fully deployed when the economic slump is overcome: top quality and innovative products, an improved service sector and a European business presence, motivated employees as well as excellent customer relations are the important success factors that P&I must realise in order to remain a valuable enterprise. P&I is positioned as a provider of services in the HR market, employing state-of-theart technology and selling highly integrated all-in-one HR management solutions. 1, P&I LOGA is the only HR software incorporating fully integrated payroll and time management modules whose payroll module can be employed in ten countries in Europe. 2. In the HR software sector, P&I is the trendsetter. This applies to the technological side just as much as to the continually expanding functionality of its product as well as to the service-oriented system range. 3

6 3. P&I has developed into an enterprise doing very lucrative business. Its objective of high profitability is achieved not only overall, but throughout the entire structure of the organisation, with each unit individually achieving this goal. This applies just as much to the foreign subsidiaries as to the individual operating units in Germany. Our guiding policy is that the more successfully each part operates, the more successful the Company as a whole will be. 4. Essentially P&I operates two types of business: On the one hand, as an all-in-one supplier, with the sale of licences to businesses which use P&I-Software in their HR administration, and on the other, provision of services in connection with software implementation and support. P&I offers its customers a holistic solution: an integrated all-in-one HR management solution based on cutting edge technologies and the provision of professional services. generating licensing, support and consulting sales. P&I owes its growth to this business principle. On the other hand, as a product supplier, P&I makes its software available to HR service providers, who in turn offer their services based on P&I software without their customers having to obtain a licence from P&I. P&I generates licensing and support sales in this way. P&I generates licensing and support sales in this way. These HR service providers are large, globally active businesses serving numerous clients. Sales and marketing strategies Over 15,000 end customers Europe-wide structure their HR business successfully using P&I solutions. Leading international HR service providers rely on P&I as a product supplier. They all trust the P&I's top level of expertise, gathered from more than 40 years in the marketplace. P&I clients appreciate P&I's integrated solutions with no internal interfaces just as much as the redundancy-free data storage. The data generator, creating data for evaluation ensures up-to-the-minute reporting with increased efficiency and a significant reduction in administration. This lowers running costs for businesses, making a value-added contribution to enterprises which have already opted for P&I-software solutions: software products with a provider who is oriented to the future. P&I is a strong and dependable partner in the HR management sector. Continuity: P&I has been in the software industry for a long time, with over 40 years of experience under its belt. Innovation for P&I means working together with clients and experts to shape the future - with cutting edge technologies, with intelligent business processes and with hands-on consulting. Holistic approach: We offer our customers holistic solutions: from software to IT services through to outsourcing. 4

7 Large customer base: more than 15,000 end customers profit from P&I's expertise in the area of software development. P&I achieves its sales revenues from licensing of HR software and from the related maintenance and services arising from implementation and ongoing advisory services. P&I's core business is based on three main cornerstones: new projects, migration projects and projects with existing customers. The HR software market has been for years one of the most highly saturated: every business does its payroll accounting. When a market is saturated, there is no growth in market volume, and increased sales can only be attained through an expansion of market share. In other words, destructive competition prevails. The acquisition of new customers for P&I's products therefore constitutes a very significant factor in its growth. Providing a business with a high-quality product which does not simply do the "obligatory" payroll accounting, but generates added value, thus contributing to the success of the company, is a powerful argument. In our customer acquisition we utilise direct sales channels as well as our partnerships. In the case of long-standing customers we are addressing important projects with a combination of P&I Time Management and P&I HCM. We are also developing new functions and modules, such as Scout Pro or our P&I LOGA analyser. Dealings with our existing customers are chiefly taken care of by our Direct Sales staff working together with our Consulting division. Migration business concerns only those projects where customers switch to P&I LOGA from acquired products, such as BAGE2000, JET PABIS NG, or the IBM product LOGAvplus. Here we work exclusively with our own sales and marketing team. Market position will be developed P&I holds a special position in the HR system providers market: Inbetween the small niche players, who use their software solutions to address specific issues and the global players, who provide complete ERP solutions. The market segment where P&I draws most of its customers from is the mid-sized companies segment, with 250 to 5,000 employees. P&I plays a leading role in this market segment. SAP dominates among the large enterprises, whilst there is a range of competitors such as s+p, Exact, HANSALOG, Sage, Varial, VEDA, etc., for smaller enterprises. Consequently, in the large enterprise market segment, SAP is virtually the only competitor we have attempting to use the logic of a complete ERP solution to penetrate our market segment. P&I can counter this with its more comprehensive range of functions and its more competitively priced solution. 5

8 In the smaller enterprise market segment, companies such as those mentioned above try to win market share from P&I through low prices. P&I can defend its position with a solution, which is more modern and has a more comprehensive functional range, as, in most cases, other providers are offering outdated, non-integrated solutions. Naturally, P&I is seeking to penetrate its competitor s market segment as well. P&I has been particularly successful with P&I PLUS and the future-orientated P&I TIME in the public administration sector, SAP s traditional market. P&I provide their P&I SMART brand for the smaller enterprise market segment. Communication and Marketing Strategy The P&I Group invests in sales and marketing activities on a continuing basis. In our company publication, "P&I NEWS, which was published four times in fiscal 2009/2010, we reported on various topics relating to personnel issues. Current developments in the world of HR management, presentations of P&I solutions, and best practice examples from various industry sectors were featured. The journal, with a print-run of more than 10,500 copies per issue, has met with an enthusiastic response from existing customers and, in particular, from prospective customers. The P&I e-newsletter appears weekly and is received by over 13,500 subscribers. Here we report on the A to Z of current developments in HR management - whether labour legislation or supplementary insurance. In the past year we have taken part in HR exhibitions and events as well as various industry events and have conducted advertising campaigns for P&I products in the leading trade journals. We firmly intend to go on presenting ourselves to the wider public and convincing it of our effectiveness in the future. Product strategy The essential features of our successful product strategy are: Wide ranging product portfolio: P&I can offer solutions for any industry and businesses of any size. P&I offers its broad customer base functional competence based on cutting edge technologies. The target market for P&I comprises businesses, public administration and institutions which require sophisticated software solutions. HR specialisation It is not just the functionality of our software which impresses, but also our competence in implementing it. Our customers reap the benefits of our top quality consulting skills and HR software solutions. P&I can guarantee its customers increased efficiency and ongoing productivity initiatives. 6

9 Orientation to processes What we focus on in our product development, sales activities and implementation of software solutions is not so much the individual modules involved, but the entire business process. In line with the Company's strategic orientation as a provider of an integrated software solution for payroll, time management and HR management, we offer customers an all-in-one package of services comprising software licences, maintenance services, consultation and the supply of hardware for time recording and access control. Market leadership in technology P&I's web interface presents a technologically advanced platform for in-house solutions, and at the same time, a platform for provision of high quality services in the BPO field. More and more functionalities have been made available as web services, accessible by other applications used by customers. This makes integration of P&I software into other environments ever easier and offers customers the kind of flexibility in their IT strategies that is demanded today. Investment protection Through user interfaces to solutions provided by the large ERP providers, customers from any industry or of any size can be expediently addressed. P&I's steady rate of growth in its Company result, its strong operating cashflow of 43.4 million euros and its high level of expenditure on continuing technological development means that the Company can offer customers high investment security. Acquisitions strategy P&I's acquisitions strategy is based on four guiding principles: o o o o Enhancement of P&I's market presence through an enlarged customer base Securing and expanding market leadership in technology Increasing competence through specialists gained Entry into new market segments. The employees represent an enormous enrichment in development and consultation expertise for P&I with the specialist knowledge they bring. For a take-over to result in a stronger P&I Group, the company culture and values must be compatible. And not least, the sales and earning power of the take-over candidate influence the decision strongly. P&I is constantly on the look-out for potential companies for take-over. Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh was acquired on May 1, 2009 during the fiscal year that has just ended and it was merged with P&I Personal & Informatik during the fiscal year. The new business reinforces P&I s product line competence in the time management sector. The standard P&I TIME software (previously called APG2000), which is platformindependent and can be customised to meet individual needs, provides integrated expertise through its access control and personnel deployment options. In addition to strengthening this market sector, P&I also sees growth opportunities in the upmarket requirements sector and recommends it as the expert time management solution. 7

10 Research and Development Costs A strong product is the prerequisite for sustainable development. P&I has established itself in the market with four strong HR brands. With the P&I LOGA, P&I TIME and P&I PLUS products, P&I possesses a valuable portfolio of brands in the European software industry. With P&I SMART, P&I has separated off the lower part of its market segment. For a software company, R&D activities traditionally play an extremely important role, laying the groundwork for future growth and for maintaining market leadership in technology. We have invested almost 19.5 per cent of our annual turnover in the maintenance and expansion of our product palette. We are convinced that our software must be leading-edge, both technologically and in terms of functionality. Tenacious commitment to the continued expansion of our range of solutions is the sine qua non for our sustainable success. We believe in an ingrained culture of innovation, which enables us to continually update our technological advancement. As in previous years, development expenses for software products were not capitalised but completely expensed. Intangible assets arising from development activities are only capitalised if, among other things, it is sufficiently probable that the future economic benefits attributable to the asset will flow to the enterprise and that the cost of the asset can be determined reliably. Research and development expenditure during the fiscal year that has just ended came to 12.4 million euros (previous year: 12.3 million euros). Included herein are the expenditure incurred by product improvement, updates for changes in legislation and collective bargaining agreements as well as technical innovations. The expenditures were incurred by four P&I product lines: P&I LOGA, P&I TIME (previously called APG), P&I PLUS and P&I SMART as well as the acquisition of the LOGAvplus, AZEA, BAGE2000, E-PM, eco-staff and JET PABIS NG products. In the year under review, P&I A invested in (inter alia): a) P&I LOGA P&I LOGA is distinguished by its modular and integrated hierarchy as well as the client / server technology, which enables it to be customised and implemented to meet specific customer requirements. As it is based on unified, redundancy-free as well as relational data models, P&I LOGA is able to take into consideration countryspecific laws throughout Europe and this makes it a standardised cross-border application that can be used in all sectors. Additional modules can be used to expand P&I LOGA at any time. P&I HCM (Human Capital Management) is the portal software integrated within P&I LOGA and supports web-based personnel work. Its prime functions are application / approval processing, personnel deployment planning, employee development, employee controlling and applicant data administration. The software is based on our P&I LOGA data model and all of the data stored in this comprehensive HR solution is also available via P&I HCM. Our P&I HCM employee portal has been designed so that all of a company s employees can access it, based on their role within the company. 8

11 This brings efficiency, integration and transparency objectives to the forefront. Efficiency is realised through functions such as employee self-service. P&I HCM has been designed as an open system, so that different customer applications can be integrated in the web-based graphical interface. The open internal architecture supports the different application-server platforms and databases. The data exchange is guaranteed by the use of miscellaneous interfaces such as XML or SOAP. Other modules integrated in our P&I LOGA system is a comprehensive time management module with classic electronic attendance recording and evaluation, access control and personnel deployment planning capabilities. The planning capability will enable you to look to the future with regard to personnel deployment planning. We also differentiate between shift planning (shift-based roster) and day planning (day-based roster). The Economic Packet II and ELENA (electronic payment certificate) system are other development focal points, as they have to be upgraded to comply with new German legislation. Accounting relevant matters such as federal contributions for legal health insurance or supporting short-time working have been incorporated in our Economic Packet II. The latest accounting-relevant measures have been effective since July P&I decided to implement a maintenance release during the course of the year. P&I LOGA User can now be used throughout the European SEPA (Single Euro Payment Area) payment area. The ELENA (electronic payment certificate) system has become the third obligatory electronic process in use since January 1, 2010 in addition to DEÜV and ELSTER. The ELENA process application area law covers five payment certificates together with their corresponding administrative processes. The employers report the payment certificate dates to the central data registry every month in the form of a multi-functional income data record. An office calling up the relevant payment data provided by the central data registry will be permitted to access it, provided that the participant has granted prior permission. b) P&I TIME (stand-alone time management solution) Our P&I TIME, sector-neutral, modularly designed software package fulfils all of the criteria of a modern time management system, ranging from work hours management up to access control. P&I TIME s strengths lie especially in the flexible options that enable it to be customised to meet a company s special requirements as well as the economical price-performance ratio and in the very short implementation times. P&I TIME is a stand-alone time management solution that has been designed for use in all sectors within a company. P&I TIME s functional design enables it to be optimised and scaled to match the respective requirements and the size of each company. Communications with existing or even newly implemented IT landscapes is guaranteed by the appropriate interfaces. P&I TIME is based on client/server architecture, supports SQL database technology and runs under Microsoft Windows or the most up-to-date web-browser technology (e.g. AJAX). These are today s prerequisites for a time management system running under the most up-to-date technical requirements. 9

12 c) P&I PLUS P&I PLUS is a web-based HR and time management solution which meets demanding criteria for flexibility when designing processes. This solution is most used by large companies and administrative bodies with specific individual requirements. The solution, supplemented by the time management module, enables comprehensive staff deployment planning and supports companies and administrative bodies in the implementation of flexible working-hours models. The HR management system P&I PLUS is no longer limited to the client/server version, but is now available as a full browser version. P&I PLUS has been developed further on the basis of real customer requirements, achieving a higher capacity for performance. It consists of online interfaces linking it into the P&I LOGA and KIDICAP payroll accounting systems. Batch interfaces also link it into the SAP-HR and PAISY systems. d) P&I SMART P&I SMART is an all-inclusive package specially designed for businesses with up to 250 employees. The software covers the basic HR administration processes: payroll accounting, travel expenses and if required, time management. The manufacturer's initial settings enable the system to be installed easily and up and running within a few days. For the future, apart from guaranteeing the updates for changes in legislation, P&I Group will continue developing the entire product palette. Investments in the coming years will be focussed on technological development of the software solutions of P&I LOGA, P&I TIME, P&I PLUS and P&I SMART, and also on adding to our products for standardising and optimising business processes, including, for instance, using new add-on modules as well as links to external systems, especially in other European countries. The economic and financial crisis notwithstanding, the P&I Group will not be putting the brakes on for investment in R&D in the coming years; but rather pushing on with plans for expansion. The aim is, through intensifying investment, to emerge from this crisis in a stronger position than our competitors. The P&I Group will continue to invest heavily in R&D over the coming years. The aim here is to emerge from the crisis stronger than our competitors as a result of our intensive investments. Corporate management Our goal is to increase shareholder value systematically and constantly through profitable growth and concentration on the business areas which offer the most advantageous development potential in terms of our competitiveness and capacity to perform. The key elements of management include an integrated concept for financial control, control metrics and as well, comprehensive measures aimed at profitable growth and increased efficiency. The significant key data for our Company are sales, in particular, Licensing sales, operating result (EBIT) and the EBIT margin. As is generally true for the software industry, sales and EBIT are the most important control metrics - so value-oriented 10

13 performance metrics relating to capital turnover play a lesser role for P&I as well. Our capital commitment is low, but employee costs and external services in connection with support for our software products constitute high cost pools for P&I. Permanent monitoring of sales and forecasting for the revenue types of Licensing, Maintenance and Purchased Services underpin the development of profitability. Licensing sales are the major growth engine for Services and Maintenance. In this connection, incoming orders for Licensing plays an key role. Sustained tracking of Licensing sales at all levels of management, from the first customer contact to signing of the contract through to implementation is an important element. Monthly monitoring is carried out across the entire organisation. The second cornerstone of our profitability development is cost management. All cost items are subject to strict budget controls. Due to employee costs and purchased services in connection with the maintenance of our products, the fixed costs proportion is very high in the P&I Group. Variable budgets are therefore released, dependent on current sales development, during the course of the year. These result from the monthly monitoring process, which involves reviewing historical budget adherence as well as making rolling forecasts. Mapping of the significant value drivers to the remuneration system for executives rounds off the internal control system for the Group. Licensing sales, total Group sales and EBIT are the value drivers on which measurement of the variable remuneration components paid is based. In this way, the remuneration system guarantees an optimal orientation to an increase in shareholder value. 2.3 Organisation / Personnel At March 31, 2010 The P&I Group employed 360 people (previous year: 343). The annual average of full-time-equivalent employees rose from 306 to 334. Of those, 250 were employed in Germany (previous year: 222), a total of 84 employees in the rest of Europe (previous year: 84), where the Company was most strongly represented in Austria, with 31 people (previous year: 34), and in Slovakia, with 41 (previous year: 39) employed by the development centre. The P&I organisation sells in two strong sectors, the private and public sectors and is also efficiently and effectively positioned in the consulting business sector. The regional locations of our sales and consulting staff give us an organisational structure that is distinguished by its closeness to the customers. Short trips to visit the customers and internally: this builds trust. The intense focus on our customers was an important part of our success in this crisis-stricken year. The Consulting/Systems Integration division supports customers in the implementation of P&I software solutions and ongoing operations. The palette of services offered includes, aside from advisory services, training for software end customers and technical and specialised hosting. The division also provides product training and specialist updating services (social security and income tax). P&I advises its customers on how they can structure their processes to be as efficient and straightforward as possible in order to reduce process costs and to be an even better partner for their departments and management. 11

14 P&I's consultants take responsibility for their customers this means that each customer has their own P&I consultant assigned to them who acts as a contact person. The advisers ensure that the users acquire the requisite knowledge of all the areas relevant to them. An annual average of 121 employees (previous year: 114) over the year were employed in this division. The Development division focuses strongly on application development, technology, quality assurance and design. Four new software releases per fiscal year are developed and placed at the disposal of customers. Development is headquartered in Wiesbaden. The development unit founded in Bratislava in 2002 is increasingly assuming localisation tasks, although support also comes from decentralised quality assurance and development units in Austria, Holland and Switzerland. The expansion of the development centre operation in Slovakia has been continued in fiscal 2008/2009 through the opening of a new development centre in Zilina. We are working here with very young software developers whose abundance of ideas and level technological know-how are exciting and infectious. The acquisition and merger of former Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh has strengthened the development team. The people-intensive area of Consulting employed the highest number of employees in the P&I Group with an average over the year of 131 (previous year: 119). A total of 43 (previous year: 37) people were employed in Sales and Marketing in the past year. We were active in the market with two organisational units: Public Administration and Private Sector. European sales activities are coordinated by our headquarters in Wiesbaden. In Austria and also in Switzerland, we have local sales agents. Focussing on the incoming orders for licences shaped our market cultivation in sales. The requirement for solutions from a single source is increasing not only with respect to the software, but recurring service business as well. We will continue to expand our focus on sales. As in the previous year, the P&I Group's administrative sector employed 39 employees (previous year: 36). In fiscal 2009/2010, employee expenses amounted to 28.9 million euros (previous year: 27.8 million euros). The Company's management policy is grounded in a broad-ranging target system. Corporate targets are broken down into division and individual targets and linked to appropriate, variable salary components depending on the respective level of responsibility involved. The corporate targets arise out of the planning data with respect to incoming orders, sales, and operating result. P&I is a medium-sized company and will only continue to remain successful if the company remains creative and flexible, responds quickly and continues to radiate competence and credibility. This is why young professionals continue to join the P&I team in addition to our staff with expertise gained over many years. They all have extensive knowledge of our products and our customers. They are all competent in their jobs. P&I will continue to invest in our staff through advanced internal and external training. 12

15 2.4 Details pursuant to 289 Para. 4 and 315 Para. 4 HGB Subscribed capital, voting rights and additional restrictions Please refer to Note C. 4.1 Capital stock in the AG notes as well as Note 20 Subscribed capital and reserves and Note 21 Share buyback programme in the Group notes with regard to this. Direct or indirect capital investments Please refer to Note E. 6 in the AG Notes as well as Note 38 in the Group notes ( Details pursuant to 160 AktG ) with regard to this. Special privileges for shareholders There are no shares in the Company with special privileges. System of control of voting rights in the event of employees' participations and where they do not directly exercise their voting rights The Company has no knowledge of whether its employees hold participations in the Company and if voting rights control is carried out. Appointment/dismissal of members of the Board of Directors and amendments to the Memorandum and Articles of Association Members of the Board of Directors are appointed for a maximum of five years. A reappointment or extension of the period of office, for five years respectively, is permissible, but requires a new resolution to be passed by the Supervisory Board, which may be made, at the earliest, one year before the expiry of the previous term of office. The Supervisory Board may revoke the appointment of a member of the Board of Directors and/or the appointment of a Chairperson of the Board of Directors, if cause exists within the meaning of 84 Para. 3 German Companies Act (AktG). Members of the Board of Directors are appointed and dismissed pursuant to 84 f, AktG. Amendments to the Memorandum and Articles of Association are made pursuant to 179 AktG by the Annual General Meeting with a majority of at least three quarters of the capital stock represented at the time of the resolution. Important agreements of the Company in the case of Change in Control as a result of a take-over bid The Company avails itself here of the option not to make public disclosure. Compensation agreements with members of the Board of Directors/employees in the event of a take-over bid Please refer to the Compensation agreements with the members of the Board Note E. 2 in the AG notes as well as Note 29 in the Group notes ( Executive bodies of the company ). Compensation agreements with the employees do not exist. Dependency of P&I AG P&I AG is not a dependent enterprise within the meaning of 17 AktG 13

16 2.5 Management declaration pursuant to 289a HGB Due to the newly introduced 289a HGB, P&I Personal und Informatik AG (P&I AG) is now obliged to issue a management declaration and to include it either in the management report or to publish it on the company s internet site in order to comprehensively and transparently present P&I AG s company management and operational structures and their management body. The declaration is based on the German Corporate Governance Code, which clarifies the obligation of the Board of Directors and the Supervisory Board in accordance with the principle of a social free market economy with regard to ensuring the continuance of the company and its sustainable added value. Declaration persuant to 161 AktG (issued in December 2009): The Board of Directors and the Supervvisory Board of P&I AG declare in accordance with 161 Companies Act: P&I AG complies with the recommendations of the Government Commission on German Corporate Governance Code listed in the version published on June 18, 2009 and will continue to comply in the future with the exception of the following divergences: Deductible in directors and officers liability insurance policies (Code Item 3.8, Paras. 2 and 3) The current D&O insurance for directors and officers (Board of Directors and Supervisory Board), which remains valid until the end of the current fiscal year, does not include a deductible. The Board of Directors and the Supervisory Board are of the opinion that a deductible in the D&O insurance policy would not serve to improve the motivation and responsibility with which the executive bodies discharge their duties. In so far as the last Declaration of Compliance submitted in November 2008 differed from the recommendations listed in Item 3.8, Para. 2 of the Code in the version issued on June 6, 2008, it was stated that an appropriate deductible will be agreed upon, when the Company concludes a D&O insurance for both the Board of Directors and the Supervisory Board. However, the Board of Directors and the Supervisory Board intend to propose, based on the law covering the appropriateness of the Board of Directors remuneration and the general experience gained during this financial crisis, that the existing D&O insurance will be brought into line on April 1, 2010 and a deductible will then be introduced for both for the Board of Directors as well as the Supervisory Board. It is expected that this sum will amount to more than the 10 per cent of the assessment or at least one and a half times the amount of the Boards fixed annual remuneration, as stipulated in 93, Para. 2, Sentence 3 AktG in the version of the law covering the appropriateness of the Board of Director s remuneration. Company bylaws for the Board of Directors (Code Item Sentence 2) The company bylaws for the Board of Directors include a majority clause covering the Boards resolutions without a regulation covering the deciding vote to be cast by the Chairman of the Board. As it would not be possible to rule in favour of one or the other of the members by majority ballot with a two-member Board of Directors, the view of the Supervisory Board is that there is no place for such a ruling given the present composition of the Board of the Company. 14

17 Board of Directors emoluments Emolument structure (Code Item 4.2.3, Para. 2) The currently valid Board of Directors employment contracts were agreed upon for the coming into force of the law covering the appropriateness of the Board of Director s remuneration and were last altered on September 1, 2008; they will also remain valid until March 31, The emolument structure still does not correspond to the regulations stipulated in the current version of the Code published on June 18, 2009 and the principles for establishing the salaries of the members of the Board of Directors in accordance with 87 of the German Companies Act included in the version of the law covering the appropriateness of the Board of Director s remuneration. The Supervisory Board intends to bring the emolument structure into line with the stipulations listed in the Code and the German Companies Act as quickly as possible. Board of Directors remuneration No settlement cap for change of control (Code Item 4.2.3, Para. 5 in conjunction with Para. 4) The Company did not comply with the settlement cap during a change of control ruling during fiscal year 2008/2009 that has just ended and did not previously declare our non-compliance with the regulation. An agreement was concluded with Mr. Triadis and Dr. Voß, both of whom were members of the Board of Directors, on September 1, 2008, and the applicable summary which was published in the half-yearly report released on November 5, 2008 that covered the period April 1 until September 30, 2008 (P. 18), is as follows: In the first half of fiscal 2008/2009, it was agreed with the members of the Board of Directors that in the case of a change in control they shall have the right to resign from their position and terminate their employment contract within a specific period. They shall then receive a settlement to the amount of the remuneration (including the variable component), which they would otherwise have received up to the end of the term of their contract. The relevant passage can be found in the Board of Directors Compensation Report for fiscal 2008/2009 (reprinted in the Annual report, P. 35): A change of control will take place as per the agreement if a third party acquires at least 30% of the Company s voting rights through the purchase of shares or other means in compliance with 39, 35 Para. 1, Sentence 1, WpÜG. 22 Paras. 1 and 2, WpHG, have to be complied in order to calculate the voting rights. The Board of Directors employment contracts still had a term of 3 years and 7 months to run at the point in time when the agreements were made on September 1, Consequently, a settlement cap would have to be agreed upon in order to comply with the recommendation listed in Code Item 4.2.3, Para. 5 and in conjunction with Para. 4. We did not comply with this obligation. The last Declaration of Compliance submitted by the Board of Directors and the Supervisory Board in November 2008 did not include any indication that the Company would not be complying with the recommendations in the Code covering the settlement caps. The Board of Directors and the then Supervisory Board were of the opinion that this was unnecessary, as at the time of the publication of the Declaration of Compliance (December 1, 2008) the members of the Board of Directors were not allowed to accrue a settlement that amounted to more than three-times the annual remuneration when the agreed resignation period (3 months) was taken into account in accordance with the change-of-control clause. Compliance with the Code is not currently required for assessing the Board of Directors remuneration, as no change of control has taken place since the contracts were concluded on September 1, The Supervisory Board will ensure that the Company complies with the Code regulations covering settlement caps in the future. 15

18 Disclosure of the remuneration of the Board of Directors in the Compensation Report (Code Item 4.2.5) The Board of Directors and the Supervisory Board will comply with the recommendation regarding the disclosure of the remuneration paid to members of the Board of Directors in the Compensation Report only to the extent that doing so does not conflict with the decision taken by the Annual General Meeting held on August 29, 2006, to refrain from individual disclosure of the Board of Directors' remuneration. At the 2010 Annual General Meeting the Board of Directors and the Supervisory Board intend to propose that the above-mentioned resolution is rescinded and this will then permit individual disclosure of the remuneration paid to the members of the Board of Directors to be made. Conflict of interest Ancillary activities (Code Item 4.3.5) Code Item states that: Members of the Board of Directors should only accept ancillary activities with the approval of the Supervisory Board. This recommendation has been upheld in practice. However, the employment contracts for the members of the Board of Directors merely state that ancillary activities only require the approval of the Supervisory Board if these activities might conflict with the Company s interests. The Supervisory Board aims to change the employment contracts as quickly as possible in order to bring them into line with the regulation stipulated in the Code and the members of the Board of Directors are already prepared for this eventuality. Formation of committees (Code Items to 5.3.3) The Supervisory Board has not formed any committees as opposed to the recommendation listed in the Code. The Supervisory Board is comprised of only three members. The formation of committees in addition to the full Supervisory Board appear to serve no purpose, as a committee, in which at least three members would have to be present, would have to pass resolutions instead of the full Supervisory Board. Age limit for members of the Supervisory Board (Code Item Sentence 2) The Code recommends establishing an age limit for members of the Supervisory Board. We have not complied with this recommendation. The Company views the recommendation as an inappropriate reduction of the shareholders' right to elect suitable candidates as members of the Supervisory Board. Candidate proposed as Chairman of the Supervisory Board (Code Item 5.4.3, Sentence 3) The Code recommendation could not be implemented at the last Annual General Meeting held on September 1, 2009, as a Supervisory Board vote could not be taken as no candidates had been nominated as the proposed Chairman of the Supervisory Board. The reason that a Supervisory Board vote did not take place was that nobody was aware that a Chairman of the Supervisory Board change had to take place. This recommendation will be complied with in the future, provided that it is possible to do so. 16

19 Results-oriented remuneration for members of the Supervisory Board (Code Item 5.4.6, Para. 2) Results-orientated remuneration has not been planned for the Supervisory Board as opposed to the recommendation listed in the Code. The view of the Company continues to be that this type of remuneration for the Supervisory Board would be in contradiction to its monitoring function and, given the size and structure of the Company, it would not appear to be in order either. This declaration is published on the company's website under Investor relations as are all previous declarations. Relevant details covering corporate governance practises, which have to be applied in accordance with the legal requirements: Management and supervisory structure For P&I AG, 'corporate governance' means management and supervision of the organisation in a manner that is responsible, transparent and oriented towards increased shareholder value in the long term. For the Board of Directors and Supervisory Board, the pre-eminent qualities for good management are sustainability, transparency and a value-based orientation. The chief cornerstones of good corporate governance are effective cooperation between the Board of Directors and the Supervisory Board, safeguarding of the interests of all parties involved in the company's business success, responsible handling of risks, abiding by the legal and intra-group regulations as well as open, reliable and transparent channels of communication. P&I AG is subject to the German Stock Corporation Act and has a two-tier structure of management and supervision. It is incumbent on the Board of Directors to carry out the management of the company under the supervision of the Supervisory Board. The Board of Directors and the Supervisory Board collaborate closely for the benefit of the company and maintain regular contact. Four regular meetings of the Supervisory Board are convened annually at P&I AG. The Board of Directors provides the Supervisory Board, on a monthly basis, with a comprehensive and up-to-date picture of business developments, targets, the current risk situation and any deviation from original targets in business developments. The operations of both the Board of Directors and the Supervisory Board are governed by the respective Company bylaws. Directors Dealings There were no reportable transactions carried out in fiscal 2009/2010. Open and transparent communication P&I AG informs shareholders, analysts and journalists according to standardised criteria. All information is made transparent for all capital market participants. 17

20 Ad hoc announcements, press releases and presentations given at press or analysts' conferences are published promptly on P&I AG's website. The Board of Directors publishes insider information affecting the company immediately, apart from individual cases exempted from the disclosure obligation. Insiders are listed in accordance with statutory requirements and must observe confidentiality. P&I AG, observing a fixed financial calendar, publishes reports on its website four times annually on business developments and the current situation regarding its assets, finances and profits. In addition, all information relating to the AGM, such as the invitation, agenda, annual financial statements, memorandum and articles of association and explanatory notes to draft resolutions, is published on the company's website on the day of issue of the invitation. The website is also a repository of the information from previous AGMs, as well as the quarterly reports from the fiscal year just ended and from past fiscal years. According to the new German Transparency Directive Implementation Act (TUG), as from January 20, 2007, the notification threshold for voting rights held in a company listed on the stock exchange has been lowered to three per cent. A suitably qualified agent will undertake the Europe-wide disclosures that are required under this law for P&I AG. In addition, all published information is published in German and English. We also comply fully with the German Electronic Commercial Registers and Company Register Act (EHUG), which came into effect on January 1, 2007, in that we transmit to the publishers of the electronic pages of the Bundesanzeiger, in electronic form, as stipulated, all documents required to be disclosed. Functions of the Board of Directors and the Supervisory Board: Board of Directors The Board of Directors bears independent responsibility for the management of P&I AG. It is committed to the interests of the Company and under an obligation to increase shareholder value over the long term. The Board of Directors provides the Supervisory Board with comprehensive and prompt information, on a regular basis, covering all conception questions that are relevant to P&I AG, business development, risk management and adherence to the intra-group regulations. The Board of Directors is responsible for the company s strategic orientation and these are regularly jointly agreed upon with the Supervisory Board. At present, the Board of Directors consists of two members. P&I AG can be represented either by both members of the Board of Directors or by one member of the Board of Directors accompanied by an authorised officer (procurist). Eight employees were delegated as authorised officers (procurists) in fiscal 2009/2010. Supervisory Board The Supervisory Board advises the Board of Directors in its management of the organisation and also supervises and monitors its operations. The Supervisory Board is involved in all decision-making of fundamental importance for the organisation. In order to more closely define the reporting duties for the Board of Directors, the Supervisory Board has laid down a list of business transactions requiring approval, which forms part of the respective company bylaw. The Supervisory Board of P&I AG consists of three members. 18

21 Elections to the Supervisory Board are made in accordance with the recommendations of the Corporate Governance Code: Each member of the Supervisory Board is elected singly. Audit pursuant to 111, Para. 2, Sentances 1 and 2, AktG The Supervisory Board resolved that an audit of specific matters pursuant to 111 Para. 2, Sentences 1 and 2, AktG, should be implemented at their meeting held on January 18, The audit had not been completed by the point in time when the annual financial statement and the P&I AG consolidated financial statement were compiled. According to information given to the Board of Directors on May 7, 2010 as well as May 21, 2010 an interim report has been complied by the experts authorised to undertake the audit, but it still has not been presented to the Board of Directors. At the point in time when the financial statements were compiled, the Board of Directors were not in possession of any information regarding whether this interim report or the status of the special investigation might have an important effect on the annual financial statement or the consolidated financial statement. 2.6 Acquisition The Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh (traded as P&I Zeitmanagement GmbH as from May 2009), of Höxter, was acquired as of May 1, The new company has reinforced P&I s position and competence as a provider of integrated HR software solutions in the time management product line. The standard APG2000 software, which is platform-independent and can be customised to meet individual needs, provides integrated expertise through its access control and personnel deployment options. This has enables P&I to reinforce its competence as a provider of integrated HR software solutions in the time management product line. P&I also sees opportunities for growth in the access control sector in addition to strengthening our market share. The second acquisition has enabled P&I to re-position itself as a time management expert. P&I Zeitmanagement GmbH was merged with P&I Personal & Informatik AG on January 1, The effect of this merger on our sales and results is described in Note 3, of the consolidated financial statement. 2.7 Remuneration systems Board of Directors Remuneration for the members of the Board of Directors is determined by the Supervisory Board and comprises both fixed and variable components. The fixed component, aside from a fixed-amount monthly remuneration, also includes benefits in kind, in particular the valuation for company vehicles to be applied in compliance with German taxation regulations. 19

22 One part of the variable component of the Board of Directors' remuneration constitutes a performance related target income. The amount of the performance related target income is calculated on the basis of the degree to which the target Group EBIT (earnings before interest and taxes) set by the Supervisory Board has been fulfilled. Bonus schemes also constitute part of the Board of Directors' variable remuneration: Payment of a long-term bonus (providing a long-term incentive) as a variable remuneration component was agreed on with one member of the Board of Directors with effect from September 1, Granting of the long-term bonus and its amount are dependent on the achievement of the target Group EBIT agreed previously with the Supervisory Board, and on the degree to which targets have been met in the respective fiscal year, and are also strictly dependent on the continuation of the board member's employment contract. The term of this agreement extends to the end of fiscal 2011/2012. Payment of 50 per cent of the long-term bonus claims accumulated up to the end of fiscal 2009/2010 (March 31, 2010) will be effected seven days after discharge of the Board of Directors by the Annual General Meeting for fiscal 2009/2010. Payment of the remainder of the bonus claims which have accumulated in the fiscal years up to March 31, 2010, and of the long-term bonus claims arising after March 31, 2010 and up to the end of the term. at March 31, 2012, will be effected seven days after discharge of the Board of Directors by the Annual General Meeting for fiscal 2011/2012. Payment of a bonus as a variable remuneration component was agreed on with one further member of the Board of Directors, with effect from April 1, Granting of the bonus and its amount are dependent on the achievement of the target Group EBIT agreed previously with the Supervisory Board, and on the degree to which targets have been met in the respective fiscal year, and are also strictly dependent on the continuation of the board member's employment contract. The agreement is valid until the end of fiscal 2011/2012, in accordance with the extended term of the Board of Directors' employment contract. Payment of the bonus due in any fiscal year shall be payable within two weeks of adoption of the annual financial statements. In fiscal 2008/2009, it was agreed with the members of the Board of Directors that in the case of a Change in Control they shall have the right to resign from their positions, within specified periods of time respectively, and terminate their employment contract. They shall then receive a settlement to the amount of the remuneration (including the variable component) which they would otherwise have received up to the end of the term of their contracts. Through the law regulating the disclosure of the Board of Directors' compensation (Transparency Law for the Compensation of Corporate Executives, (VorStOG)) of August 3, 2005, a basic obligation regarding the individual disclosure of remuneration for the boards of directors of corporations listed on the stock exchange was introduced. However, pursuant to 286 Para. 5 and 314 Para. 2 Sentence 2 of the German Commercial Code (HGB), the annual general meeting of such an entity can decide to withhold this information in part. 20

23 The AGM of P&I AG on August 29, 2006 resolved that the details required by 285 Sentence 1 No. 9 lit. a) HGB and 314 Para. 1 No. 6 lit. A) HGB in the annual financial statements and Group financial statements for the Company for fiscal years 2006/2007 to 2010/2011 inclusive, will remain undisclosed, at the latest, until August 28, Therefore in the following, only statements regarding the total payments are made. The total remuneration for the members of the Board of Directors in fiscal 2009/2010 and the previous year is shown in the following table: In '000 euros 2008/ /2010 Fixed income / benefits in kind EBIT variable SAR schemes Bonus schemes 1,950 1,878 Total remuneration No further additional salary components exist. Supervisory Board In fiscal 2009/2010 the Supervisory Board of P&I AG was composed as follows: April 1, 2009 September 1, 2009: Klaus C. Ploenzke, Chairman Michael Pluemer, Deputy Chairman Robert Vinall. Since September 1, 2009: Michael Wand, Chairman Robert Vinall, Deputy Chairman Dr Thomas Heidel. Each member of the Supervisory Board received, in accordance with the Articles of Association, a fixed annual remuneration of 11, euros. The Chairman of the Supervisory Board received 14, euros per annum and the deputy Chairman of the Supervisory Board received 12, euros per annum. The company also reimbursed the members of the Supervisory Board for any expenses and VAT incurred in exercising their office. With Supervisory Board members Messrs. Klaus C. Ploenzke and Michael Pluemer, consultancy agreements had been entered into for consultation services over and above their normal Supervisory Board duties. 21

24 The total remuneration for the members of the Supervisory Board in fiscal 2009/2010 In euros Fixed remuneration Expenses reimbursed Consultation l Klaus C. Ploenzke 6, , Michael Wand 8, Michael Pluemer 5, , , Robert Vinall 12, , Dr Thomas Heidel 6, Economic conditions The international monetary fund (IMF) described the previous year as the the most severe global recession experienced in recent times. It was against this background that the IMF predicted in January 2010 that the global gross national product would fall by 2.3 per cent as compared to the previous year. In 2009 the Euro zone recorded overall negative growth of minus 4.1 per cent as compared to the 1.0 per cent increase recoded in the previous year. The German economy recorded a gross national product of minus 5.0 per cent (plus 1.3 per cent in the previous year) and has developed more poorly than the average for the Euro zone. The global economic crisis also included the IT market in Gartner, a market research company, reported that global sales in the IT sector fell by about 5.0 per cent in According to the BITKOM industry association the IT market in the European Union shrunk by 2.6 per cent in Many companies affected by the crisis, especially in the machinery or automobile manufacturing industries, have shelved their proposed IT projects. The German IT market shrunk by 5.4 per cent according to the figures published by BITKOM in February 2010 to 63,5 billion euros (previous year: 67,1 billion euros). The IT services market shrunk slightly by 2.5 per cent to 32,2 billion euros (previous year: 33,0 billion euros). In 2009 the German software market shrunk by 5.2 per cent to 14.3 billion euros (previous year: 15.0 billion euros). 4. Group business performance As compared to the previously mentioned negative growth in the software market, the P&I Group recorded sales growth of 7.2 per cent, up to 63.3 million euros, which is a very good company operating result (EBIT) of 15.3 million euros and the P&I Group sees this as a general positive market trend. 22

25 4.1 Profit Situation Sales development P&I Group sales grew in fiscal 2009/2010 to 63.3 million euros from 59.0 million euros in the previous year. The sales growth recorded during the fiscal year just ended was bolstered by a strong service business and growth in the high profit maintenance business. Addressing our existing customers with intelligent software upgrades and the intensification of the consulting business with regard to improving our customer support were the significant factors that contributed to this success. Overall licensing sales dropped back as expected due to a negative one-off effect posted in the previous year. Therefore we can safely say that the P&I Group has maintained its position very well despite the economic and financial crisis. Sales ( 000 euros) 2008/ /2010 Change Licensing 17,243 15, % Consulting 19,101 21, % Maintenance 21,161 24, % Other 1,519 2, % Total 59,024 63, % Licensing business The decline in the company s willingness to make investments during the crisis has given the P&I Group the chance to make a breakthrough in our licensing business and win new customers. However, as a result of the conclusion of a variety of small and medium sized projects, especially with our existing customers, the P&I Group was only able to realise licence sales of 15.5 million euros, which corresponds to a year-on-year decline of 10.2 per cent when compared to the previous year s sales of 17.2 million euros. P&I can point to our clever module solutions here, but there was also good demand for our time management solutions as well as the web-based HCM HR solution. Last but not least were the customers who changed over to the P&I brand after the acquisition of an old product, which will generate P&I migration licence sales. Included in the previous year s licensing business was a major project valued at 1.5 million euros. Projects of this size were not expected to materialise during this fiscal year. A newly acquired major project will only start to have an affect on our sales over the next two fiscal years. The licensing business share of total Group sales amounts to 24.5 per cent. Current licensing sales are an important indicator for the future for the P&I Group, as licence sales are followed after a certain period by regular annual maintenance services or else they ensure the maintenance for the coming year in the case of migration customers. Maintenance business on the way to growth Development of P&I's maintenance service income mainly follows the licensing sales realised during the previous years. Revenue of 24.3 million euros was generated by the maintenance business. 23

26 This is a year-on-year increase of 3.2 million euros or 15.0 per cent, which represents a 38.4 per cent share of overall sales. The excellent maintenance business is mainly the result of the successful licence sales realised during the previous year. The acquisition-contingent maintenance sales amounted to 0.9 million euros. A climb in maintenance income results in increased earning power, since the expenses for maintaining the software remain virtually independent of the number of customers to be serviced. The product income linked to the attractive margins the sum from the licensing and maintenance incomes showed a moderate increase of 3.7 per cent as they are directly related to the decline in the licensing business. Virtually 63 per cent of overall P&I sales were generated by this product sector. The service business recorded a two-digit sales increase P&I recorded an 11.8 per cent or 2.2 million euros increase over the previous year s result in the Consulting / SI business sector, which amounted to 21.3 million euros and this sum corresponds to 33.7 per cent of P&I Group s overall sales. Shown here are revenues from seminars and training courses in addition to those arising from introductory projects and from ongoing existing customer support services. The P&I Group will offer a seminar package for the first time in Purchasing a seminar package will ensure that a customer is able to participate in release events, user conferences and the end-of-year seminar and will always be up-to-date with legal changes and the latest software. Sales development in the segments Sales ( 000 euros) 2008/ /2010 Change Domestic 46,816 49, % Austria 6,487 7, % Other foreign 5,721 6, % countries Total 59,024 63, % Domestic business growth Sales growth in the traditionally strongly competitive domestic market was well under the Group average but an excellent increase of 2.6 million euros was still recorded here million euros or 78 per cent of P&I Group sales were generated in Germany. Virtually 70 per cent of the increase in sales (1.7 million euros) can be traced back to the acquisition of Gronemeyer Gesellschaft für Datentechnik, EDV und Systemberatung mbh. Increase in sales in the Austrian business environment The best increase in sales was the 15.0 per cent increase recorded in the Austrian business environment. 7.5 million euros of the P&I Group s overall sales were realised during the fiscal year that has just finished. A proportion of the sales increase can be traced back to the acquisition of JET PABIS NG during course of the previous year. 24

27 Other foreign countries Other foreign countries includes sales from Germany made to international customers as well as sales recorded by our foreign subsidiary businesses in Holland, Switzerland and Slovakia. Sales recorded during the fiscal year that has just ended amounted to 6.4 million euros as opposed to 5.7 million euros in the previous year and sales increased by a good 12 per cent. Development in Sales and Orders The inflow of orders (licensing and consulting) in fiscal 2009/2010 grew by 8,2 million euros as compared to the previous year and amounted to 41.2 million euros (previous year: 33.0 million euros). The order from the Finance Ministry in the State of Saxony- Anhalt, with a volume of more than 5 million euros, which was won during the fiscal year that has just ended, is the third biggest order won in the history of P&I. However the increasing trend by companies in the IT environment in the private sector to put investment decisions on ice has been compensated for by the demand from the public sector. Incoming orders (licenses, consulting and maintenance) stand at 36.6 million euros, which is more than 1.7 million euros above the previous year's level (34.9 million euros). Orders on hand include a future maintenance income of 24.6 million euros (previous year: 22.8 million euros) over the next 12 months. Profit Situation: operating margin improved In '000 euros 2008/ /2010 Operating result (EBIT) 13,098 15,337 EBIT margin 22.2% 24.2% Earnings before tax EBT 13,673 16,041 Consolidated result 8,966 10,878 Return on sales 15.2% 17.2% Return on assets ROA 1) 43.8% 31.7% Earnings per share (in euros) Share price end of March 09 and 10 in euros Price-profit ratio ) (EBIT + interest income) / operating assets (consisting of the sum of intangible assets, tangible assets, stocks, trade receivables as well as payments and cash equivalents) The operating result increased by 2.2 million euros to 15.3 million euros when compared to the previous year s result. This represents an EBIT margin of 24.2 per cent as opposed to 22.2 per cent in the previous year. 25

28 Cost increases of 4.5 per cent were recorded along with a 7.2 per cent increase in sales. The higher cost of sales is directly proportional to the increase in sales. Conversely, the overall development and marketing costs have only increased slightly when compared to the previous year. The increase in the administrative costs can be traced back to increased consultation requirements. Additional expenditure was incurred by the depreciation of the customer base arising from the acquisition of P&I Zeitmanagement GmbH (previously called Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh ) as well as the goodwill impairment requirement. Two special effects were recorded in the other operating income / expenses sector during the year that has just ended. The first involved the P&I Group received an insurance refund covering the settlement of claims and damages in a customer project, which had a positive effect on the results. The second was the expenditure recorded for the work undertaken by an external consulting company. The engagement was made after the Board addressed potential investors and reassured them about market rumours concerning an impending takeover. A fragmented share structure, the company s good economic condition as well as the sustained low share prices made the P&I Group an attractive takeover candidate at the end of 2008 and in Spring The contract with the consulting company was terminated in July 2009 after the re-entry of the Carlyle Group. Profit situation in the segments In '000 euros 2008/ /2010 Change Domestic 11,711 12, Austria Other foreign 1,277 3,005 1,728 countries Operating result (EBIT) 13,098 15,337 2,239 The Group earnings situation is determined by the parent company and domestic business. Domestic sales only recorded a slight increase in profits, as the sales increases during the fiscal year were balanced out in the operating result due to the acquisition of Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh in Höxter as well as the one-off cost incurred in conjunction with our investor-relations activities. An overall increase was recorded in our foreign business when compared to the previous year. All of our foreign subsidiaries recorded positive results up to March 31, The acquisitions made in Austria during the previous year have resulted in a rise in sales, yet this rise is simultaneously accompanied by high expenses incurred in conjunction with the support and development of three independent software products, the JET PABIS NG payroll product, eco-staff personnel leasing software and the E-PM HR/payroll solution. Support for the E-PM payroll product was stopped during the fiscal year on December 31,

29 The earning power of the Other foreign countries segment in the fiscal year that has just ended was strengthened by the successful business operations in Holland and Switzerland as well as the international business activities undertaken by the German P&I parent company. When examining the segment reporting one must take into consideration that the earning power of the Other foreign countries business segment is dependent on the business activities in the Austria segment. The P&I Group generated an operating result after taxes amounting to 10.9 million euros (previous year: 9.0 million euros). Earnings per share Earnings per share amounted to 1.45 euros (previous year: 1.17 euros). 4.2 Financial state of affairs Cashflow development and liquidity situation The financial crisis has enormously increased the importance of securing liquidity. The P&I Group has paid due attention to this fact. The financial situation of the Group remains sound. The Group has had no need for short-term refinancing and has access to sufficient financial resources for the future development of the concern. Cashflow in fiscal 2009/2010 was chiefly characterised by the following factors: on the one hand, by the shift of cash and cash equivalents to current financial assets to the amount of 11.7 million euros, and on the other, by payouts to our shareholders (dividends and share buyback scheme) of 8.1 million euros as well as investments of 2.2 million euros. Thereafter remains a holding of liquid assets and liquid asset equivalents totalling 28.4 million euros. In '000 euros 2008/ /2010 Change Cashflow from - operating activities 17,230 21,512 4,282 - investments -17,454 8,416 25,870 - financing -6,104-8,058-1,954 Total -6,328 21,870 28,198 Cashflow from operating activities rose from 17.2 million euros to 21.5 million euros in 2009/2010, the year under review. This increase can be attributed to the improvement in the operating results and the increased inflow of receivables and other assets as compared to the previous year. Tax payments were also reduced slightly, whereas the tax liability grew. Cashflow from the investment activities increased from 17.5 million euros in the previous year to the present level of 8.4 million euros. Cash and cash equivalents amounting to 14.4 million euros were placed in money market funds and term deposits with a term of more than three months during fiscal 2008/2009 and the funds from these short-term investments became available during fiscal 2009/2010 and were therefore posted to liquid funds. The cash balance for investments also includes the net payment for the purchase of Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh in Höxter. 27

30 Cashflow from the financing activities amounted to -8.1 million euros (previous year: -6.1 million euros) and this includes the dividend distribution (7.5 million euros as opposed to 4.6 million euros in the previous year) as well as the share buyback scheme (0.5 million euros). Rise in liquid funds Holding cash and current financial assets to the amount of 43.4 million euros (previous year: 33.2 million euros) the P&I Group is in a very sound financial position. This guarantees the Company's independence - especially in times of economic and financial crisis. In '000 euros 2008/ /2010 Change Cash and cash equivalents 6,558 28,428 21,870 Securities 26,681 15,000-11,681 Cash and short-term financial assets 33,239 43,428 10,189 Liquid funds Net borrowing -33,239-43,428-10,189 Share of total assets 54.4% 62.6%. /. In addition to this the Group possesses two long-term, fixed-interest securities worth a total of 1,890,000 euros, which provide collateral for a line of credit, which is shown in the balance sheet under Financial Assets. Financial management The P&I Group has regularly had very high liquidity surpluses for many years. This surplus liquidity, when not used for investments, is held partly in bank balances and partly in marketable, available-for-sale securities. This policy corresponds with the management's view, shortly to have the Company s full liquidity at our disposal. Investment in securities is only made in euros and the most financially sound investments in order to minimise the risk of substantial fluctuations in value. The break-down respectively development of cash and cash equivalents of the Group is set out in the notes to the accounts and in the cashflow statement. Derivative Financial instruments The aim of using derivative financial instruments is to prevent as far as possible the risks arising from negative developments on the financial markets affecting the Company's assets, finances and profits. P&I does not make use of any derivative instruments at present. Off-balance sheet financial instruments, such as the sale of trade receivables, or sale-and-lease-back transactions are not used. 4.3 Assets The balance sheet total of the P&I Group rose by 13.7 per cent due to the addition of assets and debts from acquisitions as well as to the increase in business volume, amounting to 69.4 million euros (previous year: 61.0 million euros). This is shown in the rise in noncurrent assets, in particular in the intangible assets arising from the acquisition of companies, the customer base and goodwill. 28

31 In '000 euros 2008/ /2010 Change Noncurrent assets 10,523 11,627 1,104 Current assets 50,494 57,742 7,248 Assets 61,017 69,369 8,352 Equity 29,840 32,395 2,555 Noncurrent liabilities 2,897 2, Current liabilities 28,280 34,185 5,905 Equity and Liabilities 61,017 69,369 8,352 Key data 2008/ /2010 Equity ratio 48.9% 46.7% Gearing % % Working capital in '000 euros 22,214 23,557 *) Net borrowing / Equity **) Short-term assets less short-term liabilities The P&I Group holds assets with respect to non-current / long-term assets to the value of 11.6 million euros (previous year: 10.5 million euros), and recorded an increase of 1.1 million euros in the year under review. This rise can be attributed to the acquisitions made in the fiscal year that has just ended, which overcompensated for the scheduled depreciations as well as the goodwill impairment that was implemented. Furthermore, the financial assets used for securing the line of credit were extended. Current assets, chiefly comprising liquid funds and receivables, rose significantly due to the inflow of funds from operating activities. The decline in receivables from 15.4 million euros to 12.7 million euros is substantially attributable to the contractually agreed instalment payments from major projects. Liquid funds (Cash and cash equivalents and current financial assets) rose by 10.2 million euros to 43.4 million euros (previous year: 33.2 million euros). The positive Group result of 10.9 million euros was more than sufficient to cover the dividend payout and the purchase of treasury shares, with the result that equity rose absolutely in comparison with the previous year. However, the equity capital ratio fell slightly from 48.9 per cent to 46.7 per cent as a result of the increase in the balance sheet total. Long-term liabilities fell by 0.1 million euros to 2.8 million euros when compared to the previous year. The main reason for this was the decline in long-term liabilities associated with a long-term bonus scheme (for further details: see 2.7) and the insolvency insurance covering pert-time employment liability. Deferred tax liabilities increased from 1.8 million euros to 2.1 million euros. The reason for this was the deferred tax liability arising from the acquisition of Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh. The sum of short-term liabilities rose by 5.9 million euros to 34.2 million euros. Included herein are liabilities arising from trade payables, tax liabilities, deferred items (+2.2 million euros) and other short-term liabilities. 29

32 Other short-term liabilities are also responsible for the increased tax liabilities (+2.0 million euros) in addition to the liabilities arising from the excellent results. Tax liabilities of 4.5 million euros include P&I AG s tax on earnings accruals for the fiscal years 2007/2008, 2008/2009 and 2009/2010, which will be offset against the tax prepayments for this fiscal year. Other short-term liabilities amounted to 9.9 million euros at the close of the fiscal year (previous year: 7.9 million euros) and included, among others, payment obligations to personnel resulting from the variable compensation components. There was a clear increase recorded in our deferred items, which have to be assembled in advance at the start of the calendar year and it consists of annual invoices that have to be paid and these are reversed on a monthly basis in compliance with the sales realisations. Invoices drawn up in advance and payments received for the annual seminar package have been included in this fiscal year for the first time. 5. P&I AG 5.1 Profit Situation Business developments ran an overall positive course in the past year. P&I Zeitmanagement GmbH, of Höxter, previously known as Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh, merged with P&I Personal & Informatik AG on January 1, P&I AG s annual results therefore include three months sales and expenditure arising from the merged business sectors. Sales development In fiscal 2009/2010, total sales amounted to 54.3 million euros (previous year: 52.0 million euros). This includes 49.3 million euros (previous year: 47.4 million euros) sales to third parties, which corresponds to an increase aof 4.1 per cent. Sales in '000 to 2008/ /2010 Change - third parties 47,378 49, % - affiliated companies 4,609 4, % Total 51,987 54, % Net change in inventories /. Overall performance 52,355 54, % The highest contribution to sales was made by Maintenance. A sales volume of 21.8 million euros (previous year: 19.8 million euros), meant that Maintenance made a 40.2% contribution to our sales. The second strongest sales category was Consulting with a contribution of 31.8 per cent, which corresponds to 17.9 million euros (previous year: 15.5 million euros). Licensing sales dropped back in this crisis-ridden fiscal year to 13.4 million euros (previous year: 15.2 million euros). The previous year s licensing business included a major project valued at 1.5 million euros. 30

33 Projects of this size were not expected to materialise during this fiscal year. The volume of other sales, which amounted to 1.8 million euros (previous year: 1.5 million euros), was 3.4 per cent of overall sales. Another effect, which resulted in a reduction in the inventory in the fiscal year that has just ended, was the services, which were carried out as part of the work contracts or fixed-price projects in Consulting and added to the sales during the fiscal year that has just ended after acceptance of the completed work or the implementation phase. Many projects were completed during reporting period. However, new projects were also received during the same period. The inventory was reduced by a total of 0.2 million euros, whereas the inventory increased by 0.4 million euros during the previous year. Profit Situation: Result of ordinary business activities The result of ordinary business activities rose by 0.9 million euros to 14.7 million euros (previous year 13.8 million euros). Sales increases based on moderate cost increases resulted in an overall improvement in the operating results. Two special effects materialised in the fiscal year that has just ended. The first involved the P&I Group received an insurance refund covering the settlement of claims and damages in a customer project, which had a positive effect on the results. The other materialised as a result of expenditure incurred from using an external consulting company in the context of investorrelations activities. Our subsidiary company in Switzerland has fully repaid its loans as a result of the positive development of their business activities. After repaying 0.6 million euros in the previous year another sum of 0.8 million euros was repaid during the fiscal year that has just ended and this has been posted as income. Tax expenses rose in comparison to the previous year by 0.3 million euros to 4.7 million euros, chiefly as a result of the rise in profit. Annual profit and dividends Annual profit rose by 0.6 million euros from the previous year's 9.4 million euros to 10.0 million euros in the reporting year. This represents an increase of 6.3 per cent. The net profit shown in the annual financial statements of P&I Personal & Informatik AG, prepared in accordance with commercial legislation, is, pursuant to the German Companies Act, fundamental for a dividend distribution. In the previous year a dividend of 1.00 euros was paid out. In view of the positive development of the result, the Board of Directors intend to propose a payout of a dividend of 1.10 euros per share entitled to dividend, at the next Annual General Meeting. With 7,700,000 shares issued, of which 7,522,752 are, as at balance sheet date March 31, 2010, entitled to a dividend for fiscal 2009/2010, the sum to be distributed amounts to 8,275, euros. 31

34 5.2 Financial state of affairs Cashflow development and liquidity situation The cashflow development in fiscal 2009/2010 can be initially characterised by a shifting of liquid assets and liquid asset equivalents held in other securities amounting to 6.6 million euros and secondly by the dividend payout to our shareholders that amounted to 7.5 million euros and the outflow of funds arising from own stock acquisition as well as the acquisition of Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh. However, the overall liquid funds and securities increased by 3.8 million euros as a result of the excellent operating cashflow that amounted to 16.7 million euros (previous year: 13.4 million euros). In '000 euros 2008/ /2010 Change Cash and cash 20,259 24, % equivalents Securities 10,320 16, % Liquid funds 30,579 40, % Liquid funds rise Adding the financial investments, the total amount of liquid resources came to 41.0 million euros (previous year: 30.6 million euros), which corresponds to an increase of 10.4 million euros. As before, there were no liabilities due to banks. Financial management & financial instruments Please refer to the details given under Assets In '000 euros 2008/ /2010 Change Fixed assets 9,044 6,543-2,501 Current assets 44,109 54,796 10,687 Accrued assets Assets 53,757 62,146 8,389 In '000 euros 2008/ /2010 Change Equity 26,533 28,977 2,444 Accruals 10,233 14,326 4,093 Liabilities 5,248 5, Deferred income 11,743 13,776 2,033 Equity and liabilities 53,757 62,146 8,389 32

35 The value of fixed assets fell from 9.0 million euros in 2008/2009 to 6.5 million euros in 2009/2010. Two reasons can be given for this: The first is that the repayment of the loans previously made to affiliated companies resulted in a reduction from 2.4 million euros to zero euros as well as the accretion of the ZHS Group to P&I AG that reduced the share of affiliated companies to 1.7 million euros and the other is the implementation of scheduled depreciations. Conversely, an increase will materialise in the intangible assets after the P&I Zeitmanagement GmbH merger as well as the accretion of the ZHS Group. Current assets, consisting of receivables, other intangible assets and liquid funds, increased by 10.7 million euros from 44.1 million euros to 54.8 million euros. Whereas the receivables and other intangible assets remained virtually unchanged as compared to the previous year at 10.8 million euros (previous year: 10.9 million euros), the liquid funds, including other securities, recorded clear growth. They increased from 30.6 million euros in 2008/2009 to a present value of 41.0 million euros. The own stock inventory has now grown from 1.5 million euros to 2.0 million euros. The dividend payout that amounted to 7.5 million euros can easily be compensated for by the cashflow generated from our current business activities. Equity showed an increase year on year of 2.4 million euros, rising to the present 29.0 million euros, accounted for by an annual profit of 7.5 million euros for fiscal 2008/2009 as against the dividend payout of 10.0 million euros for fiscal 2009/2010. Capital stock remained unchanged at 7.7 million euros. Accruals rose year on year by 4.1 million euros to 14.3 million euros. Tax accruals of 4.2 million euros includes the expected additional tax payments for P&I AG for fiscal years 2007/2008, 2008/2009 and 2009/2010. Other accruals rose by 2.3 million euros to 10.1 million euros (previous year: 7.8 million euros). This figure includes allocations to the bonus scheme for the Board of Directors amounting to 0.8 million euros, as well as other accruals for employees costs (details see item 2.7). Liabilities, at 5.1 million euros, are in comparison to the previous year (5.2 million euros) nearly unchanged. The increase in the deferred income is initially due to the growth in the number of maintenance contracts and also due to the accrued income from recurring services (seminars, etc.). Deferred income takes into account income due after balance sheet date, which has been received before balance sheet date. 6. Summarised evaluation of the business development P&I have been outstandingly successful over the past three years. P&I exceeded the targets that we had set for ourselves in fiscal 2009/2010 and sales and results have increased when compared to the previous year, despite the economic and financial crisis and the resulting consequences. The P&I Group is in a very sound financial position. The P&I Group is also well positioned to meet all of our financial obligations in the future, as a result of the excellent income and financial situation. Our perceived aim is to become the most professional software company in the European HR market. 33

36 7. Corporate Risk Report In the context of its business activities, P&I is exposed to various risks which arise from, or can be attributed to ongoing operating activities or changes in external conditions. We define risks, in the broadest sense of the word, as the danger that we will not fulfil our financial, operative or strategic aims as planned. In order to secure the success of the enterprise in the long term, it is essential to identify and analyse risks, and to remove or limit them through appropriate management strategies. We aim for a good balance between risk and opportunity, taking on risks only if there is a high probability that the business activities will raise the value of the Company. 7.1 Organisation of the risk management system P&I has a comprehensive risk management system which enables us to detect and analyse risks early on and take appropriate measures. The Group-wide precautions are guided and monitored centrally by P&I AG in Wiesbaden. Here, risk reports are prepared, further developments of the risk management system initiated and standard requirements for reducing risk, applicable Group-wide, are worked out. We are now in the eighth fiscal year where risk management software has been supported by the Risk to Chance tool (R2C) which enables the active, web-based involvement of all managers in all risk management procedures. As well as financial data, the risk management procedure encompasses all activities of the organisation, systematically and continuously following through the steps of identification, analysis, evaluation, control, documentation, and communication. A risk inventory is a system whereby previously identified and new risks are classified according to type, following a formalised procedure, and evaluated according to the probability of their occurrence and the degree of damage they might inflict. 7.2 Risk management systems and internal control systems with regard to the accounting process P&I is obliged, as it is an equity market orientated business within the meaning of 264d HGB and based on 289 (5) HGB in conjunction with 315 (2) No. 5 HGB, to explain the important features of the internal risk management systems and the internal control systems with regard to financial accounting listed in the management report. A definition of this system does not have to be given under the law. We believe that we have adhered to the principles, procedures and actions for guaranteeing the correctness and reliability of the internal and external financial accounting and also adhered to the significant legal regulations applicable to P&I in accordance with the PS 261 Auditing standard issued by the Institut der Wirtschaftsprüfer in Deutschland e.v. (Institute of Auditors). All of the business transactions were undertaken in accordance with the legal regulations have been recorded in full and promptly, inventories have been carried out correctly, assets and liabilities have been listed and evaluated accurately. 34

37 The prerequisite throughout the Group has been the integration of the tax and monitoring instruments and the appropriate reporting in the important financial accounting processes. P&I is distinguished by a clear management and company structure, which guarantees that the basic legal conditions and the statutory regulations have been fulfilled. It consists of clearly defined separation of the functions involved in the incoming orders, accounting and Group controlling activity fields and the assigned responsibilities. Accounting and controlling are both tangible as well as personal forms and they enable correct and precise implementation and mapping of the financial accounting process. We use our own guidelines and standards for the development of our financial accounting processes. The processes are audited on a regular basis and they are upgraded to meet current developments whenever necessary. External experts are brought in to evaluate complex matters such as mergers, accretions, legal risks and tax problems. The internal financial accounting related checks are carried out regularly using automatic plausibility checks and manually with the aid of divergence analyses, which involves comparing them against defined key data as well as the budget figures. Any differences that might be detected can then be answered and eliminated. An important area for monitoring and checking risks is reporting, which guarantees that the transaction was mapped and presented in accordance with the Group s guidelines. The data is called up, prepared and made available for the various evaluations as part of the reporting system. The four-eyes principle is always used here. The Board of Directors and the Supervisory Board are informed about the asset, financial and profit situations at least once every month. Any short-term risks that arise are reported to the Board of Directors and the Supervisory Board immediately. Regular discussions about important key financial data are held with the relevant operating department in order to further support the reliability of our financial accounting. All of our internal checks are regularly audited, developed and optimised to meet new requirements, in order to guarantee functional processes. Our internal guidelines are also regularly revised, in order to implement processing improvements or corrections. Due to the size of the business we do not undertake autonomous internal revisions. Those responsible for the respective profit center assume responsibility for completing the incumbent tasks involved in an internal revision: They are the divisional manager in the German organisation and the respective general manager in the foreign subsidiaries. Our systems are protected against unauthorised access and manipulation by the implementation of the relevant security measures. Access to the systems by our employees is clearly defined and restricted. 35

38 We guarantee that controlled operational procedures are used throughout the company and that our organisational security measures and the relevant control mechanisms are able to promptly detect undesirable developments and implement suitable counter-measures. 7.3 Risk factors Market risks P&I's high equity ratio and its high level of liquid funds provide security, even under difficult economic conditions. The market environment is continually monitored by P&I, possible development opportunities examined and potential differentiation from competitors exploited. In particular, the financial market crisis which began in 2008 poses risks for the sale of our products. Customers' IT budgets are being cut as a result of the crisis. We can also not rule out the possibility that our competitors will grant extremely favourable price reductions to customers. The resulting pressure on prices could affect P&I's profit situation adversely. We are convinced, however, that we have the right strategy for competing in the small and mid-sized enterprises environment, with our concept of organic growth complemented by targeted acquisitions and the P&I product palette. Strategic company risks The demand for our recently introduced products and services and their acceptance by our customers is subject to a high degree of uncertainty and this due entirely to the current economical situation. An important component of P&I s strategy is the further development of our position as a medium sized company by winning new medium sized customers. Despite all of our endeavours, for example, the expansion of our sales and partner network or the reorganisation in the consulting sector, the demand for our products and services by medium sized companies has not developed as planned and this might have a negative effect on our business activities as well as our financial and profit situations. P&I generates a considerable proportion of its sales income from its large base of long-standing customers. These customers, in the case of a decline in customer satisfaction, could decide not to prolong maintenance contracts, take out new licences or conclude other contracts for further products or services with us, or decide against reducing the scope of their existing maintenance contracts. The effect would be considerably detrimental to P&I's revenues and profits. However, given P&I's sound business development in dealings with its long-standing customers and its future-oriented technology strategy, which has earned recognition from analysts and customers alike, this scenario seems rather unlikely. The risk is greater that customers will postpone a planned migration from an legacy product to a P&I software solution with respect to licensing business and as a consequence of the economic and financial crisis. 36

39 Fluctuations and declines in P&I s licensing business can affect service and maintenance income, which as a rule reflects the development of licensing sales, after a certain period of time. A significant reduction in the percentage share of software licensing income in total income could have a considerably negative impact on business, and thus on P&I's asset, financial and profit situation. Risks from existing or new contracts for large-scale and fixed price projects are continuously monitored and measured. The implementation of P&I software frequently involves the customer in the commitment of large quantities of resources and may be subject to a range of risks over which the Company often has no control. The possibility of long-drawn out installation processes, or project costs which exceed the agreed fixed price and result in recourse claims or damage to the company image cannot always be excluded. P&I believes that these risks have been sufficiently catered for, having being taken into account in financial planning, in particular through the formation of provisions. It is P&I's view that adverse effects on the expected business and result development through risks arising from large-scale and fixed price projects are rather low. Financial risks The Group is not subject to any significant credit risks. Liquid resources and securities are respectively deposited or invested with banks or their investment funds. P&I generally follows an extremely conservative investment strategy in order to hedge the financial risk of long-term impairment of financial assets. Due to interest rate risks and credit risks, investments are made in term deposit accounts of reputable financial institutions (at least A-Rating) with a short term to maturity. As a result of the high level of short-term funds available even after the dividend payout in fiscal 2009/2010, and as well, the long-term positive cashflow, the company is not subject to any liquidity risk. We were able to hold the bad debt losses at the previous year s level despite the worsening of the general economic situation. Trade receivables are measured on an ongoing basis in respect of their recoverability, and value adjustments are undertaken if discrepancies are detected. Credit risks do not endanger the inventory as P&I does not have any customers whose contribution to sales exceeds 10 per cent. Payment risks are managed by means of prepayments, by obtaining assumption declarations for receivables from the official receiver or through information on creditworthiness in doubtful cases. The Group does not maintain any other forms of collateral security such as entitlements to securities etc. The Group does not face a significant concentration of payment risks arising from one single contractual partner nor from a group of contractual partners with similar features. 37

40 Legal risks As a corporation listed on the stock exchange we are subject to increasing risks which could lead to our no longer being in a position to observe the many regulations and increasing changes in legislation. P&I counters this risk by establishing strict, formal procedures and by immediately implementing any new or amended basic conditions in its own organisation. Any allegation of a legal infringement lodged against P&I, whether justifiable or not, might well have a negative effect on our reputation and on the share price as well. P&I counters this risk by establishing strict, formal procedures and by immediately implementing any new or amended basic conditions in its own organisation. P&I is presently confronted with various claims and legal proceedings. The negative consequences of legal claims made against us or a process settlement on our part might result in the payment of damages or unwinding costs as well as bad debts. We believe that the outcome of these pending processes, both on an individual basis as well as an overall basis, will not have an adverse effect on our business activities, as precautionary reserves have been created and specific provisions have been made. Employee risks P&I is a specialist in standard software solutions for HR management. Accordingly, experts in these areas are also in demand with other software companies. In order to prevent our staff being poached, we enhance our employees' loyalty to the company through profit-sharing measures, provision of further training, and noncompetition clauses. Furthermore, we make sure that there are several people in each of the essential areas who possess the requisite expertise for the independent continuation of the work. Acquisition risks P&I has made specific acquisitions in the past and we shall continue to consider possible purchases for the future. Consequently, the P&I Group is subject to acquisition risks. The challenges arising here relate to integration in the product portfolio, the organisational process, the personnel and the different company cultures. The established integration checking mechanisms that we use will identify any potential problematic areas, whilst taking into consideration the important sectors in the acquired company, as quickly as possible. In the period under review, none of the risks identified and quantified in the context of P&I s risk management system reached the threshold level established as an indication for the existence of inventory risk. The overview shows that the risks P&I is subject to are limited and manageable. No risks have been identified which could endanger the continuing existence of the Company, now or in the future. 38

41 8. Supplementary report Significant events that have occurred after the balance sheet date have not been included above. 9. Forecast 9.1 The economy and industry in the new fiscal year A large number of market analysts are of the opinion that an upswing in the global economy will occur in The reason for this is the recovery in the financial markets and the growing consumer trust resulting from affirmative government action and support measures. The Institute for Growth Studies (IGS) estimates that as from January 2010 the economic strength of the European Union and its member states will see the gross national product in the Euro zone grow by 0.7 per cent in 2010 as opposed to the decline in the GNP of minus 4.1 per cent recorded during the previous year. The IGS has forecast an increase of 1.2 per cent for Germany as opposed to the negative growth of minus 5.0 per cent recorded in A study undertaken by the market research company Gartner at the start of 2010 shows the global IT market growing by 4.6 per cent as opposed to the previous year. This positive trend applies to all sectors; the major growth expected by the analysts is 5.6 per cent and 4.9 per cent respectively for IT services and software. The IT market in Europe will grow by 5.2 per cent in 2010 according to Gartner. The estimation of the BITKOM industry association released in February 2010 puts the German IT industry growth at 1.4 per cent for A growth of 0.9 per cent has been forecast for the IT software sector and an increase of 2.2 per cent for the IT services sector. 9.2 P&I Group and P&I AG: Expectations and Chances In the past year, the P&I Group has created a sound basis for continuing sustainable business development. We shall continue to build on this in the coming years. Independence from specific industries, a broad geographical base, new, innovative developments, a large number of long-standing customers, and dedicated, performance oriented employees are the hallmarks of our business model. As the parent company, P&I Personal & Informatik AG performs group leadership functions in the P&I Group and is a major part of the P&I Personal & Informatik Group. It chiefly determines the sales development and profitability of the P&I Group. The expectations of P&I Personal und Informatik AG are in the main the same as those of the P&I Group and differ only in respect of the impact of the business activities with affiliated companies. Our aim is to position P&I so that long-term success can be realise in the market. 39

42 We are focusing on three guidelines in order to realise this aim: Products and systems P&I has always placed a great importance on preparing top quality, innovative products that bring particular benefits to the user. P&I will continue to invest in innovative product development. Customers The strongest partner and the most important foundation of our business are our customers: Our customers are always the main focus of P&I s activities. Professional services and fully developed software solutions create added value for the company and this means growth. Growth means understanding. P&I knows the customer s requirements and understands them. P&I will continue to invest in customer satisfaction. Our employees The greatest potential that a company has are its employees. The company lives through the people that work in it, that manage it and control it. The company s success in the future must also be safeguarded through the promotion and development of talent in our company. P&I will continue to invest in employee development. We are heading towards far-reaching changes within the software industry. There are two main reasons for this: The first is the economic and financial crisis, which has resulted in unprecedented market slumps. We have reached the end or an era in which the requirements of close customer relationships, detailed innovation and the fulfilling of special needs with an increase of the number of items used, an increase in piece-rate services and the major battle over materials had to be answered. The customer s true needs were ignored by these procedures. One was only able to realise short-term business targets without taking the customer s true needs into account and without identifying technological trends. This type of trading always results in the company management setting solely result orientated targets and not having the capability to recognise product specific trends as well as the effects on their own product portfolio. This type of trading will finally result in the company slumbering in the future. The conclusion of a study undertaken by the market observer Gartner is that anyone who looses access here and now will be missing from the market tomorrow. The second reason ids the end of the supremacy of the Western markets. Demographics, economics and power-politics will belong to other markets in the future. This hinges on the sustainability of economical trading. Even though we operate successfully today in the market with our innovative products, we must implement a completely new dimension of changes in the postcrisis period. Software manufacturers, service providers and co-operation partner must prepare themselves now for a fundamental change in the requirements regarding mobility in the future, as the software industry stands at the forefront of rapid development in all the information technology used by all customer groups. Processors will become more powerful, so that all processing graphical displays will become even more significant. 40

43 Cloud-computing, company software, multi-media applications, security software, enormous databases, analysis programs and programs for the mobile internet, for mobile telephones, smart-phones, laptops and supercomputers will always need new application software. Software is already omnipresent. Nothing runs anymore with computer programs, whether it is in private households or in companies. Automobiles, coffee machines, production lines and even marketing can no longer function without software. All of the major providers are investing millions of dollars in the development of new programs or in the all-encompassing consulting and support of their customers in order to be able to cope with the changed demands in the future. American companies play a special pioneering role here, whether it is Microsoft with their Windows system and the Office application suite or Apple with their Snow Leopard or Google with their Chrome OS. Even the new internet-based Business by Design SAP system for small companies is a trendsetter for the industry. What paidoff yesterday will no longer pay-off today. Anyone who looses access here and now will be missing from the market tomorrow. Naturally, both developments affect our trading. Software manufacturers must redevelop their on-demand software from the ground up, as this hinges on the way that this software will be distributed. This means that key functions will have to be created for specific business processes and not distributed for a wide range of functions. On-demand software must be created so that it can be set up quickly, is easy to use and so that the user is not overloaded with comprehensive documentation or training requirements and without the existing system having to be optimised as well. The new software world will also affect the relationship between the manufacturer and the customer. The customer will need much faster and more flexible software services that are easy to implement and test when working in ondemand mode and this will therefore reduce the barriers between the provider and the user. We want to get even closer to the customer in the future, so that we can provide him with the functions that he wants and get to know even quicker, whether and how it was received by him. Companies that have made major investments in SAP ERP systems over the years will continue safeguard their investments and will expand these installations with on-demand services. We are planning for slight overall sales growth for the P&I Group and P&I AG as compared to the past year under review. We are planning for sales growth of up to 10 per cent in licensing, which should lie in the million euros region, and we have identified four important sources for licensing sales: - New customer business - Migration sales of our P&I LOGA comprehensive HR software solution arising from customers won as a result of acquisitions - Business with existing customers through on-demand products - Partial sales arising from the major project acquired during the fiscal year that has just ended will be realised under the PoC method (sales realisation according to the degree of completion). However, if enterprises cut back their investment budgets as a result of the economic and financial crisis, this is likely to affect P&I's new business negatively, particularly in licensing sales. 41

44 The P&I Group was able to compensate for the licensing decline in the private sector in the fiscal year that has just ended by the additional business generated in the public administration sector and the sale of on-demand products. However, we must state that spending freezes now exist in the public administration sector as a reaction to the reduced tax revenues, especially at municipal level, and that the IT market is particularly affected by the postponement of public administration IT projects. The noticeable reduction in the public calls for tender can be seen as a clear indicator here. We hope that the enthusiasm for investment in the private sector will have risen by the summer and that we can compensate for this downturn. We are aiming for annual sales at the previous year's level in the Consulting area. Our stable customer base has enabled the P&I Group to generate more than 38 per cent of sales through recurring maintenance services. We see an organic growth potential of 5 per cent here. It should be taken into account here that growth generated from licensing sales realised from customers who migrated to P&I LOGA from an acquired old product at their cost during the previous fiscal year, will not generate any additional maintenance sales in the following year. This will merely result in an existing maintenance contract from an acquired Old product being converted to a P&I LOGA maintenance contract. The P&I Group will therefore secure recurring maintenance sales as part of the Group s future. We have also planned investments for the Group s future for the coming year. Further technical software development, production of the new on-demand software module, reinforcing the organisation, safeguarding our employees expertise as well as expanding the range of services provided to our customers are all important constituent parts of our planning. We have to adjust to the new challenges regarding IT market requirements. The sustainability of the Group s success is centred on our decisions. We will strive maintain the EBIT margin at the same high level during the coming fiscal year. We will also continue to pursue our attractive dividend policy in the future and pay out dividends of at least 50 per cent of the net profit shown in the annual financial statements of P&I Personal & Informatik AG. Due to the high quality of our products and services we are of the opinion that the P&I Group and P&I AG can increase sales and results in the subsequent 2011/2012 fiscal year as compared to the current 2010/2011 fiscal year. Due to the changed basic conditions, the long-term (organic) goal of sales of around 80 million euros should now be realised by 2014, whereas the EBIT margin should also grow towards 25 per cent. 42

45 How will we realise these goals? o o Through growth based on our customer s structural needs, through innovation relating to technology, functionality and the system hierarchy of our software, o through the build up of our services, including the provision of systems to our existing customers as well as new customers, o through deciding on sustainable investments: In new development projects and in competent employees, o o through a strict value-based strategy, through continuity. Our claim as a specialist provider of integrated HR management processes is that we are the best there is. Whatever is defined as the best in the market will be provided by P&I. The unique content of the P&I brand must always be linked to the same quality inside the customer s head. Our customers demand new, future-orientated technologies from us and expect high level of utilisation from their co-operation with P&I. These demands will also be fulfilled in the future with all the required sustainability. We have demonstrated in the past and during the crisis that we have the necessary capability to think with regard to the long-term and to identify trends promptly. Wiesbaden, May 31, 2010 Vasilios Triadis Dr. Hartmut Voß 43

46 P & I Personal & Informatik AG, Wiesbaden Balance Sheeat as at March 31, Assets 000 euros 000 euros Equity and Liabilities 000 euros 000 euros A. FIXED ASSETS A. EQUITY I. INTANGIBLE ASSETS I. SUBSCRIBED CAPITAL 7,700 7, Software Customer bases 4,565 3,797 II. CAPITAL RESERVE Goodwill ,593 4,073 III. REVENUE RESERVE 1. Legal reserve 2 2 II. TANGIBLE ASSETS 2. Reserve for own shares 2,019 1, Factory and office equipment Other revenue reserve Fixtures IV. NET PROFIT/LOSS 18,440 16,531 III. FINANCIAL ASSETS 1. Shares in affiliated companies 129 1,834 EQUITY 28,977 26, Loans to affiliated companies 0 2, Shareholdings FIXED ASSETS 6,543 9,044 B. CURRENT ASSETS B. ACCRUALS I. INVENTORIES 1. Tay accruals 4,235 2, Work in progress 868 1, Other accruals 10,091 7, Goods ACCRUALS 14,326 10,233 1,029 1,169 II. RECEIVABLES AND OTHER ASSETS C. LIABILITIES 1. Trade receivables 7,990 8, Advance payments received on orders 3,465 3, Receivables from affiliated companies 1, of which with a residual term of up to one year: 3,465,000 euros 3. Receivables from affiliated companies 26 0 (previous year: 3,150,000 euros) and other participating interests 2. Trade payables Other assets 1,635 1,726 - of which with a residual term of up to one year 683,000 euros (previous year: 912,000 euros) 10,770 10, Accruals to affiliated companies III. SECURITIES - of which with a residual term of up to one year: 201,000 euros 1. Own shares 2,019 1,484 (previous year: 339,000 euros) 2. Other investments 16,890 10, Other liabilities ,909 11,804 - of which with a resiudal term of up to one year 718,000 euros (previous year: 847,000 euros) IV. CASH ON HAND - of which from taxes 687,000 euros (previous year: 824,000 euros) AND IN BANK BALANCE 24, of which relating to social security and similiar obligations 2,000 euros (previous year: 3,000 euros) CURRENT ASSETS 54,796 44,109 LIABILITIES 5,067 5,248 C. DEFERRED INCOME D. ACCRUALS AND DEFERRALS 13,776 11,743 62,146 53,757 62,146 53,757 44

47 P & I Personal & Informatik AG, Wiesbaden Statement of income for the fiscal year from April 1, 2009 to March 31, / / euros 000 euros 1. Sales 54,277 51, Decrease (previous year: increase) in stock of finished goods and in work in progress Other operating income 1, Cost of materials a) Cost of raw materials and supplies, consumable stores and purchased materials -1,330-1,265 b) Cost of purchased services -5,518-5, Peronsal expenses a) Wages and salaries -20,633-20,829 b) Social security and pension expenses -2,408-2,257 - of which for pension expenses: 0,000 euros (previous year: 0,000 euros) 6. Depreciation on intangible fixed assets and tangible assets -1,563-1, Other operating expenses -10,171-9, Income from financial investments of which from affiliated companies 0,000 euros (previous year: 499,000 euros) 9. Income by loans on investments in financial assets of which from affiliated companies 812,000 euros (previous year: 621,000 euros) 10. Other taxes and similar expenses of which from affiliated companies 132,000 euros (previous year: 248,000 euros) 11. Write downs on financial assets and marketable securities Taxes and similiar expenses Result of ordinary activities 14,174 13, Taxes on income -4,747-4, Other taxes Net income for the year 9,966 9, Profit carried forward from previous year 9,008 8, Transfer to the reserve for own shares , Retained earnings 18,440 16,531 45

48 P & I Personal & Informatik AG, Wiesbaden Calculation of Cash flow 2009/ /2009 As at March 31, euros 000 euros 1. Cash flow from operating activities Result of period 9,966 9,376 Depreciation (+)/Appreciation (-) of tangible and intangible asset 1,563 1,544 Income received from written-down claims Depreciaton (+)/Appreciation (-) of marketable securities Increase (+)/Decrease(-) in accruals 3,537 3,274 Losses (+)/Profit (-) from the disposal of tangible and intangible asset 1-1 Losses (+)/Profit (-) from the disposal of financial assets and of marketable securities 0-43 Increase (-)/Decrease (+) in inventories, trade receivables and other asse Increase (+)/Decrease (-) in trade payables and other liabilitie 1, Other operating income/expenditure Cash flow from operating activities 16,748 13, Cash flow from investing activities Proceeds (+) from the sale of tangible assets/intangible asset 1 11 Payments (-) for investments in tangible asset Payments (-) for investments in intangible asset Payments for acquisition of investments -1,718 0 Proceeds from repayments of loans to affiliated companies 4,670 4,913 Payments for the granting of loans to affiliated companies -1,499-3,378 Proceeds (+) from the sale of marketable securities 9,507 1,377 Payments (-) for the acquisition of marketable securitie -16,011-5,010 Cash-flow aus Investitionstätigkeit -5,489-2, Cash-flow aus Finanzierungstätigkeit Payments for the acquisition of own shares ,484 Payments for the distribution of the dividend -7,523-4,620 Cash flow from investing activities -8,058-6, Liquid resources at the end of the fiscal year Net changes in liquid resources affecting payments (interim sum of 1-3 3,201 4,697 Additions to liquid resources by accretion/mergin Liquid resources at the beginning of the fiscal year 20,259 15,562 Liquid resources at the end of the fiscal year 24,088 20, AG-Cashflow-englisch.xls, Cash flow

49 AG, Wiesbaden Notes 2009/2010 A. General Notes to the Annual Financial Statements The annual financial statements have been compiled in euros and in compliance with the provisions of Commercial Law. Disclosures in the balance sheet, the income statement, the notes to the accounts and the management report may be shown, for reasons of clarity, in euros, thousands of euros or millions of euros. B. Notes on the Accounting and Valuation Methods Intangible and Tangible Assets Acquired intangible assets are shown at their acquisition cost. Acquired copyrights and similar rights and assets will be linearly written off over two to five years. Other intangible assets acquired are systematically written off on a three-year straight-line basis. The customer base results from the acquisition of businesses or companies in the software industry and is written down on a straight-line basis over a period of between five and ten years Goodwill arising from the acquisition of businesses or companies as well as mergers or accreditations. Goodwill will be written off linearly over ten years. Property, plant, and equipment items are measured at their acquisition cost and, insofar as they are depreciable, are written down according to their estimated useful operating life. Non-scheduled depreciation is carried out if a lower valuation is mandatory. Fixtures are written off on a straight-line basis over four years, but no longer than the residual period of the lease at the time of their installation. Vehicles are written off on a straight-line basis over a period of five to six years. Ordinary computer hardware is written off on a straight-line basis over two to three years, while main frame computers or servers are written off on a straight-line basis over a period of seven years. Other business fixtures and equipment are written off on a straight-line basis over a period of between four and thirteen years. The intangible and tangible assets that were acquired by P&I Personal & Informatik AG as a result of mergers and accreditations in fiscal 2009/2010 were posted with the historical acquisition costs and the related cumulative depreciations. From January 1, 2008, low value fixed assets of up to 150 euros net in individual value are written off completely in the year of their purchase. For fixed assets with an individual value of between 151 to 1,000 euros, a compound item, as from January 1, 2008, was formed, written off on a straight-line basis over a period of five years Financial Assets Investments are measured at their acquisition cost. They are only depreciated to a lower value at balance sheet date if the decrease in value is expected to be lasting. Where a nonscheduled depreciation has been carried out on the lower fair value of investments in 47

50 financial assets, should the grounds for the depreciation no longer exist at a later balance sheet date, revaluation will take place. Current Assets Inventory items are recognised at their acquisition cost or historical cost respectively or at the lower fair value. Receivables from sales of software are recognised insofar as a valid signed contract exists with the customer without right of rescission and the software has been delivered. Receivables from maintenance sales are recognised proportionately to the period of the contract. The proportion of the maintenance service income that has not yet been realised is recorded as deferred items. Receivables from consulting and training services are recognised according to the type of service performed. Receivables are shown at their nominal value. Valuation adjustments on receivables are made according to the probability of bad and doubtful debts occurring. A general provision for bad and doubtful debts of 1 per cent (previous year: 1 per cent) was formed for debts not individually adjusted. Short-term investments are recognised at purchase cost or with the lower fair value as at balance sheet date. Gains in securities are recognised according to their realised value. Losses in securities are recognised when they arise. Other tangible assets included in the corporation tax credit have been valued with a present value of 82,000 euros (previous year: 104,000 euros). The par value as of March 31, 2010 amounts to 97,000 euros (previous year: 109,000 euros). Deferred items Deferred items and accrued income are determined commensurate with the accrual accounting of expenditure. Deferred items takes into account income due after balance sheet date which has been received before balance sheet date. Accruals Tax accruals and other accruals are recognised respectively at the amount that is required according to reasonable and prudent business judgement, taking into account all identifiable risks and doubtful accounts. Liabilities Liabilities are recognised at their redemption amount. Foreign Currency Translation Receivables and payables are converted at the day's exchange rate applying when the transaction is booked. At balance sheet date the value of receivables or payables in foreign currency is measured in accordance with the lower of cost or market or chief value principle respectively. 48

51 C. Balance Sheet Details 1. FIXED ASSETS 1.1. INTANGIBLE ASSETS Software '000 euros Customer bases '000 euros Goodwill '000 euros Total '000 euros Acquisition costs April 1, ,836 15, ,502 Zugänge 2009/ Disposals 2009/ Accretions/mergers 2009/ , ,629 March 31, ,513 17, ,231 Accumulated depreciations April 1, ,560 11, ,429 Additions 2009/ ,170 Disposals 2009/ Accreditations/mergers 2009/ March 31, ,777 12, ,638 Net carrying amount March 31, 2010 Net carrying amount March 31, , , , ,073 The column "Software" contains property rights acquired and similar rights and assets as well as licences to such rights and assets. The Company writes off acquired property rights on a straight-line basis over a period of two to five years. Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh, in Höxter was acquired on May 1, 2009 and was merged with P&I Personal & Informatik AG, of Wiesbaden, on January 1, Hidden reserves were discovered as part of this merger, which were sub-dived as follows: P&I Time (previously: APG) software amounting to 212,000 euros, a customer base of valued at 1,064, 000 euros as well as goodwill valued at 299,000 euros. During the fiscal year running from January 1, 2009 to December 31, 2009 Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh (renamed as P&I Zeitmanagement GmbH later on) generated a profit of 228,000 euros. Furthermore, ZHS Zeitmanagement Hard- und Software GmbH & Co. KG and ZHS Verwaltungs GmbH & Co. KG were accreted and absorbed by P&I AG as a result of the withdrawal of the partner with unlimited liability (P&I Beteiligungsgesellschaft mbh, of Wiesbaden) from the partnership. Hidden reserves were discovered as a result of this, which were sub-divided as follows into software (valued at 166,000 euros) and the customer base (valued at 689,000 euros) and an accretion loss amounting to 543,000 euros, which is included in the other operating expenses. 49

52 1.2. TANGIBLE ASSETS Fixtures. '000 euros Other property, plant and equipment. '000 euros Total '000 euros Acquisition costs April 1, ,514 2,560 Additions 2009/ Disposals 2009/ Mergers 2009/ March 31, ,919 2,982 Accumulated depreciations April 1, ,754 1,782 Allocations 2009/ Disposals 2009/ Mergers 2009/ March 31, ,138 2,177 Net carrying amount March 31, 2010 Net carrying amount March 31, The "Disposals 2009/2010" item in "Other property, plant and equipment" is accounted for in the main by the scrapping of individual items FINANCIAL ASSETS Shares in affiliated companies In '000 euros P&I GmbH Vienna P&I AG Horgen P&I BV Amsterdam P&I s.r.o. Bratislava P&I Beteil. GmbH Wiesb. ZHS GmbH & Co. KG Wiesbaden P&I Zeitman. GmbH Höxter*) Total Acquisition costs April 1, , , ,639 Additions ,718 1,718 Disposals ,705 1,718 3,423 March 31, , ,934 Depreciations April 1, , ,805 Additions Disposals March 31, , ,805 Carrying amount March 31, Carrying amount March 31, ,834 *) Previously know as Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh 50

53 The additions refer to the 100 per cent acquisition of the shares of Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh on May 1, The disposaly result from the merger of P&I Zeitmanagement GmbH (preveiously known as Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh, valued at 1,718,000 euros) with P&I Personal & Informatik AG, of Wiesbaden, which became effective on January 1, 2010 and the accretion of ZHS Verwaltungs GmbH & Co. KG (1,705,000 euros) to P&I Personal & Informatik AG on March 31, Investments 25.1 per cent of the shares of Lothal Datentechnik & Partner AG, of Zurich were transferred to P&I Personal & Informatik AG as a result of the merger with P&I Zeitmanagement GmbH (previously known as Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh) on January 1, The investment value amounts to 16,000 euros. Lending to affiliated companies In '000 euros P&I AG Horgen P&I B.V. Amsterdam P&I Timeman. B.V. Amsterdam Totals 1. April 1, , ,141 Additions 1, ,499 Disposals 1,796 2, ,670 Mergers March 31, Depreciations 1. April 1, Additions Disposals Mergers March 31, Net carrying amount March 31, Net carrying amount March 31, ,359 There were no longer any loans open to affiliated companies on March 31, 2010, the balance sheet date (previous year: 2,359,000 euros). Additions to the loans to affiliated companies in fiscal 2009/2010 amounted to 1,499,000 euros (previous year: 3,378,000 euros). No nonscheduled depreciations were carried out in this fiscal year. P&I Personal & Informatik AG, of Horgen, made repayments amounting to 782,000 euros on its loan during the fiscal year that has just ended. This means that the loan has been fully repaid. A value adjustment amounting to 782,000 euros was implemented and liquidated accordingly. P&I Timemanagement B.V., of Amsterdam, has fully repaid the open loan of more than 30,000 euros, which was open with P&I Zeitmanagement GmbH and was transferred to with P&I Personal & Informatik AG, of Wiesbaden as a result of the merger implemented during the fiscal year that has just finished. A value adjustment amounting to 30,000 euros was implemented and liquidated accordingly. 51

54 2. CURRENT ASSETS 2.1. INVENTORIES 2009/2010 '000 euros 2008/2009 '000 euros Work in progress 868 1,028 Merchandise Total 1,029 1,169 Work in progress arises out of contracts for which where P&I must deliver a specific contractual object. Included here are fixed price Consulting and Development projects undertaken jointly with the customer, generally for the purpose of extension of standard software. The services still in progress were valued using an average personnel cost daily rate on the balance sheet date RECEIVABLES AND OTHER ASSETS Trade receivables 2009/2010 '000 euros 2008/2009 '000 euros Trade receivables 8,302 8,511 Specific provision for bad and doubtful debts General provision for bad and doubtful debts Total 7,990 8,325 To cover general credit risks and the cost of reminders, a general provision for bad debts was formed amounting to 1 per cent of receivables which have not been individually adjusted. Receivables from affiliated companies 2009/2010 '000 euros 2008/2009 '000 euros P&I Personal & Informatik GmbH, Horgen, Switzerland P&I Personal & Informatik AG, Vienna Austria P&I Personeel & Informatica B. V., Amsterdam, Netherlands P&I Steyr GmbH, Steyr, 2 3 Austria ZHS Verwaltungs GmbH & Co. KG, Wiesbaden, Germany P&I Timemanagement B. V., Amsterdam, 6 0 Netherlands Total 1, These receivables arise out of current deliveries and services and from results transfer. 52

55 Receivables outstanding from companies with which an investment relationship exists 2009/2010 '000 euros 2008/2009 '000 euros Lothal Datentechnik & Partner AG, Zurich, Switzerland 26 0 Total 26 0 Other Assets 2009/2010 '000 euros 2008/2009 '000 euros Securities for securing employee credit 1, Receivables outstanding, Infoniqa Holding GmbH Retirees insolvency insurance Corporation tax refund claim Interest receivable 43 0 Other Total 1,635 1,726 All receivables and other assets have a term of less than one year, as in the previous year. Amongst the other assets there are assets valued at 82,000 euros (previous year: 104,000 euros) that have a term longer than one year SECURITIES 2009/2010 '000 euros 2008/2009 '000 euros Own shares 2,019 1,484 Money market funds 0 9,508 Bonds Bonded loans 15,000 0 Mortgage bonds 1,006 0 Other securities 18,909 11,804 "Own Shares" contains shares purchased under the share buyback scheme implemented by P&I Personal & Informatik AG. We refer to the details listed under Section 4, Equity CASH ON HAND AND CASH IN BANK BALANCES 2009/2010 '000 euros 2008/2009 '000 euros Term deposits 10,000 17,030 Cash in bank balances 14,086 3,228 Cash on hand 2 1 Total 24,088 20,259 The fixed term of the term deposits runs up to August 2,

56 3. DEFERRED ITEMS "Deferred items" in fiscal 2009/2010 amounts to 807,000 euros (previous year: 604,000 euros) and contains, in addition to accrued insurance premiums and maintenance fees, contains advance payments on activities taking place in the next fiscal year. 4. EQUITY 4.1. CAPITAL STOCK The capital stock of the Company remained unchanged at 7,700,000 euros as at March 31, 2010 and is divided into 7,700,000 no-par value bearer shares. In the year under review, as in the previous year, no subscription rights were issued. At the AGM held on September 2, 2008 the Board of Directors were further authorised, with the consent of the Supervisory Board to increase the capital stock of the Company against monetary or non-monetary contributions to a maximum of 3,850,000 euros up to September 1, 2013, by issuing new shares (authorised capital 2008); under certain circumstances, the subscription rights of existing shareholders may be excluded. Furthermore, the Board of Directors, with the consent of the Supervisory Board, were authorised to purchase treasury stock amounting to up to ten per cent in total of the capital stock owned by the Company at the time of the resolution passed at the Annual General Meeting up to March 1, This authorisation was renewed at the AGM held on September 1, 2009 and the deadline was extended to February 28, These authorisations were implemented in fiscals 2008/2009 and 2009/2010 as follows: On October 23, 2008, the Board of Directors of P&I Personal & Informatik AG resolved to institute a share buyback scheme and this scheme terminated on September 30, Company shares amounting to up to four per cent of capital stock (a limit of 308,000 shares) were allowed to be acquired on the stock exchange. However, the maximum total acquisition price (not including acquisition costs) was limited to 4.5 million euros. The Board of Directors intends, with the consent of the Supervisory Board, to retire the own stock acquired during the buyback, thus reducing the capital stock. However, the Board of Directors reserves the right to use all or some of the acquired P&I own stock for some other purpose, within the limitations of the authorisation granted by the AGM of September 2, ,248 shares were re-purchased during the period October 27, 2008 to September 30, 2009, of which 135,682 shares were acquired in fiscal 2008/2009 and 41,566 shares in fiscal 2009/2010. The volume of re-purchased shares corresponds to a proportional amount of capital stock totalling 177, euros, which is 2.30 per cent of the shares issued on the date that the resolution was adopted. The payments made during the fiscal year that has just ended amounted to 534, euros. Own stock having an overall purchase price of 2,018, euros was acquired CAPITAL RESERVES The capital reserve of the Company remained unchanged at March 31, 2010, at 770,000 euros REVENUE RESERVES The legal reserves of the Company remained unchanged at March 31, 2010 at 2,000 euros. 54

57 Legal reserves were formed in compliance with 150 AktG. (German Companies Act). Owing to the share buyback scheme introduced during the fiscal year just ended, reserves for treasury shares were formed. As at March 31, 2010 these amounted to 2,018, euros. The other revenue reserves of the Company remained unchanged at 31 March 2009, at 46,000 euros NET PROFIT/LOSS The transfer of profits of 18,440,000 euros for fiscal 2009/2010, as at March 31, 2010, is set out as follows: '000 euros Profit carried forward 16,531 Dividend distribution -7,523 Allocation to reserves for treasury shares -534 Annual net profit 9,966 As at March 31, ,440 The net profit shown in the annual financial statements of P&I Personal & Informatik AG, prepared in accordance with commercial legislation, is, pursuant to the German Companies Act, material to a dividend distribution. Paid out dividends 2008/2009 The Annual General Meeting passed a resolution on September 1, 2009 to pay out for fiscal 2008/2009, from the net profit for fiscal 2008/2009 of 16,530,908,74 euros, the sum of 7,522, euros for a dividend of 1.00 euros per no-par share entitled to a dividend. The remaining, non-paid-out net profit, an amount of 9,008, euros, would be carried forward to new account. The dividend was paid out on September 2, Proposed dividend 2009/2010 The Board of Directors intends to propose to the next AGM that the net profit of the Company for fiscal 2009/2010 be appropriated as follows: Dividend payout of 1.10 euro per no-par share entitled to a dividend. '000 euros Dividends 8,275, Profit carried forward 10,164, Retained earnings 18,440, The proposal for appropriation of profit takes into account own stock not entitled to dividend held by P&I AG as at March 31, If further own stock is disposed of by the time of the next AGM, then the number of shares entitled to dividend may increase. In these cases, if the dividend amount per dividend entitled share remains the same, an amended profit distribution proposal will be made to the AGM, in which the total amount to be distributed to the shareholders will be increased by the partial amount realised between April 1, 2010 and the date of the profit distribution resolution by the disposal of the own stock. The profit carried forward will be decreased by this partial amount. 55

58 5. ACCRUALS 5.1. TAX ACCRUALS 2009/2010 '000 euros 2008/2009 '000 euros Corporation tax and solidarity surcharge-{}- 2,326 1,334 Business tax 1,909 1,149 Total 4,235 2,483 Tax accruals include accruals for tax charges from fiscal 2007/2008 (989,000 euros), the previous fiscal year 2008/2009 (1,484,000 euros) as well as the fiscal year just ended (1,762,000 euros). This also includes the tax charge transfer arising from the P&I Zeitmanagement GmbH merger (74,000 euros) and the tax charge transfer arising from the accretion of ZHS Zeitmanagementsysteme Hard- und Software GmbH & Co. KG (43,000 euros). The existing tax accrual for the corporation tax was used, as the final tax assessment for fiscal 2006/2007 had been received in the meantime OTHER ACCRUALS 2009/2010 '000 euros 2008/2009 '000 euros Premiums, commissions and bonuses 4,057 3,295 Employee credit 1, Annual leave Outstanding purchase invoices Long-term bonus 1, Salaries Part-time scheme for near retirees (Altersteilzeit) Legal and consulting expenses Trade association Other 1, Total 10,091 7,750 Payment of a performance related target income, providing a long-term incentive, was agreed on with one member of the Board of Directors and has been in effect since September 1, The long-term bonus depends on the achievement of the target Group EBIT agreed on previously with the Supervisory Board and on the degree to which targets have been met in the respective fiscal year. The term of this agreement extends to the end of fiscal 2011/ LIABILITIES As in the previous year, all liabilities have a residual term of less than one year as at balance sheet date and are not secured. 56

59 7. DEFERRED ITEMS 2009/2010 '000 euros 2008/2009 '000 euros R Accrued maintenance fees 12,937 11,676 Accrued rents software Accrued seminar fees Other deferred items Total 13,776 11,743 The company has concluded maintenance contracts for the ongoing updating of software, in particular with relation to amendments in legislation. As the Company invoices customers in January as a rule, maintenance income due after balance sheet date is deferred. This also applies to income in the area of software hire/leasing. The income from the seminar sector includes seminar packages for 2010 as the invoices were sent out in advance. Services that have to be provided by the company in the period after the balance sheet date have been deferred and will be included in the sales figures after the seminar event has been completed. 8. CONTINGENCIES AND OTHER FINANCIAL OBLIGATIONS Contingencies Credit by way of bank guarantee The Company has a master agreement with the Dresdner Bank AG on furnishing collateral ("credit by way of bank guarantee ) for its liabilities to a total amount of 820,000 euros (previous year: 800,000 euros). As at balance sheet date, availment of credit by way of bank guarantee to the amount of 814,000 euros (previous year: 686,000 euros) was made use of. Group guarantee The Company has declared that in the event that P&I Personeel & Informatica, B.V., Amsterdam, Netherlands is unable to fulfil the contact it has concluded with a major client, it will enter fully into the contractual obligations agreed between P&I Personeel & Informatica, B.V., Amsterdam, Netherlands and the client. The Company has declared that it will assume unconditional and unqualified responsibility for the company debts of P & I Personal & Informatik AG, Horgen, Switzerland in the event of its insolvency. The company debts of P & I Personal & Informatik AG, Horgen, Switzerland, according to the individual financial statements of the company as at March 31, 2010, amounted to 2,093, Swiss franks respectively 1,466, euros (previous year: 2,478,00.00 Swiss franks). The company has not entered into any further contingencies pursuant to 251 in conjunction with 268 Para. 7 of the German Commercial Code (HGB). 57

60 Business not included in the balance Business not included in the balance sheet as defined by 285 No. 3 HGB are listed as follows: '000 euros Rents 1,414 Property, plant and equipment 105 Vehicles 1,443 Total 2,962 This covers rental contracts for business premises as well as leasing contracts for office equipment and vehicles. The amounts have been defined as nominal values. A reduction in the long-term capital commitment has been realised by these contracts. The outflow of liquid funds is spread over the following years: '000 euros 2010/2011 1, / / / and later 24 Total 2,962 The company has an operating fund credit line with Deutsche Bank AG totalling 500,000 euros (previous year: 1,000,000 euros). This line of credit can be optionally used via a current account at a charged interest rate of 6.75 per cent, per annum or for short-term special financing with a term of up to three months. In addition to this the company also has another operating fund credit line with the Wiesbadener Volksbank eg amounting to 1,534,000 euros (previous year: 1,534,000 euros) that is available for use via a current account at a charged interest rate of 7.50 per cent, per annum. Neither of these bank credit lines was included on the balance sheet date. The credit available via a bank guarantee listed under contingencies can be used for guarantee, leasing, payment and contract fulfilment sureties. The company will use all present or future securities held for safekeeping at the Dresdner Bank AG as collateral with the Commerzbank Group. The call amounting to 814,000 euros mainly includes leasing and contract sureties. No significant risks were used for the evaluation of the financial situation included in the business that was not included in the balance sheet on the balance sheet date. The special details relating to the other financial liabilities were not listed as the business not included in the balance sheet in accordance with 285 No. 3 HGB corresponds with other financial liabilities in accordance with 285 No. 3a HGB. 58

61 D. Notes on the Income Statement 1. SALES Most sales income was generated by domestic sales. 2009/2010 '000 euros 2008/2009 '000 euros Licenses 13,383 15,198 Consulting 17,239 15,536 Maintenance 21,822 19,782 Merchandise Other 1,475 1,280 Total 54,277 51,987 Included in sales income are sales with affiliated companies amounting to 4,979,000 euros (previous year: 4,609,000 euros). Consulting sales also includes income from training and seminars as well as travel expenses debited to third parties. 2. OTHER OPERATING INCOME Other operating income included claims for compensation totalling 330,000 euros (previous year: 18,000 euros), income from the sale of securities amounting to 396,000 euros (previous year: 44,000 euros) and income from the appreciation of securities amounting to 71,000 euros (previous year: 0,000 euros). 3. DEPRECIATIONS Included in depreciations are customer base and goodwill write-downs amounting to 992,000 euros (previous year: 953,000 euros). Like the previous year, no non-scheduled depreciations were carried out. 4. OTHER OPERATING EXPENDITURE The other operating expenditure mainly includes leasing and rental expenditure (2,049,000 euros), travel expenses (1,764,000 euros), legal and consulting expenses (2,144,000 euros) as well as telecommunication costs (556,000 euros). Furthermore, fiscal 2009/2010 included the loss arising from the accretion of the ZHS businesses that amounted to 543,000 euros, which has not been listed as extraordinary expenditure due to its secondary significance. The accretion loss had no effect on the tax on income for fiscal 2009/ FINANCIAL RESULTS Income of 783,000 euros (previous year: 621,000 euros) refers to the receipt of payments for impaired loans made in the previous years to our subsidiary in Switzerland. The information is shown under the income from lending of financial assets, as the former depreciation recorded under the depreciation of financial assets and in the financial results as well. In this fiscal year, the Company shows income from investments to the amount of 000,000 euros (previous year: 499,000 euros) from ZHS Verwaltungs GmbH & Co. KG, Wiesbaden. 59

62 6. TAXES ON INCOME Income tax expenses are broken down as follows: 2009/2010 '000 euros 2008/2009 '000 euros Income tax current year Corporation tax 2,300 2,128 Business tax 2,330 2,156 Solidarity surcharge Income tax - previous years Total 4,748 4,435 A tax credit (9,000 euros) arising from adjustments made for the previous year as well as adjustments caused by the capitalised corporation tax credit pursuant to 37 of the German Corporate Income Tax Act (KoeStG.) is due. E. Other Details 1. NUMBER OF EMPLOYEES The average number of employees, based on the number of people employed at the end of the respective quarter, amounted to 229 (previous year 220). Members of the Board of Directors, trainees or students completing internships are not included. The figure can be broken down into the following categories: Employees 222 (previous year: 212) Senior executives 7 (previous year: 8) 24 employees (of which 8 are trainees) were transferred to P&I Personal & Informatik AG as a result of the merger with P&I Zeitmanagement GmbH (previously known as Gronemeyer Gesellschaft für Datentechnik, EDV und Organisationsberatung mbh, of Höxter) on January 1, EXECUTIVE BODIES OF THE COMPANY The Board of Directors of the Company consists of at least two members. The Supervisory Board determines the number of members on the Board of Directors (see 4 Para.1 of the Memorandum and Articles of Association, last amended on September 2, 2009). The Members of the Board of Directors are: Vasilios Triadis, Chairman of the Board, Director of Consulting, Research and Development and M&S. Dr Hartmut Voss, Director of Finance, HR and Administration. Mr Vasilios Triadis is a member of the Scientific Advisory Committee of otris Software AG, Dortmund and of Solvenius GmbH, Stuttgart. Dr Voss is Deputy Chairman of the Supervisory Board of e.bootis AG, Waiblingen. 60

63 Mr Vasilios Triadis and Dr Hartmut Voss represent the Company together with one other member of the Board of Directors or with an authorised officer. Remuneration for the members of the Board of Directors is determined by the Supervisory Board and comprises both fixed and variable components. The fixed component, aside from a fixed-amount monthly remuneration, also includes benefits in kind, in particular the valuation for company vehicles to be applied in compliance with German taxation regulations as well as other financial benefits. One part of the variable component of the Board of Directors' remuneration constitutes a performance related target income. The amount of the performance related target income is calculated on the basis of the degree to which the target Group EBIT (earnings before interest and taxes) set by the Supervisory Board has been fulfilled. During fiscal 2008/2009 it was agreed with the members of the Board of Directors that in the case of a change in control they shall have the right to resign from their position and terminate their employment contract. They shall then receive a settlement to the amount of the remuneration (including the variable component), which they would otherwise have received up to the end of the term of their contract. The total remuneration for the members of the Board of Directors in fiscal 2009/2010 and the previous year is shown in the following table: In '000 euros 2009/ /2009 Fixed income / benefits in kind EBIT variable SAR schemes Bonus schemes 1,878 1,950 Total remuneration A detailed description of the remuneration system for the Board of Directors is to be found in the Combined Management Report under item 2.7. In accordance with 95 AktG (German Companies Act) in conjunction with 6 of the Memorandum and Articles of Association, version of September 1, 2009, the Company has a Supervisory Board consisting of three members. The members of the Supervisory Board from April 1, 2009 to September 1, 2009 were: Klaus C. Ploenzke, Chairman Michael Pluemer, Deputy Chairman Robert Vinall. The members of the Supervisory Board since September 1, 2009 (with supplementary details up to March 31, 2010): Michael Wand, Chairman Mr Michael Wand, Director, The Carlyle Group, London (GB), is: a member of the Advisory Board of UC4 Software GmbH, of Wolfsgraben, in Austria, a member of the Supervisory Board of FRS Global, of Brussels, in Belgium and Chairman Administrative Board of KCS.net AG, of Liestal, in Switzerland. Robert Vinall, Deputy Chairman Mr Robert Vinall, Managing Director of RV Capital GmbH, of Kilchberg, in Switzerland, does not have a seat on the controlling bodies of any other foreign or domestic companies. 61

64 Dr Thomas Heidel Dr Thomas Heidel, who specialises in commercial, corporate and tax law, of Bonn, Germany, does not have a seat on the controlling bodies of any other foreign or domestic companies. Each member of the Supervisory Board received, in accordance with the Articles of Association, a fixed annual remuneration of 11, euros. The Chairman of the Supervisory Board received 14, euros per annum and the deputy Chairman of the Supervisory Board received 12, euros per annum. The company also reimbursed the members of the Supervisory Board for any expenses incurred in exercising their office. Consultancy contracts were awarded to Klaus C. Ploenzke and Michael Pluemer, who have left the Supervisory Board, for future consulting services. The salaries of the members of the Supervisory Board during fiscal 2009/2010 are listed in the following table: In euros Fixed remuneration Reimbursements Consultancy services Klaus C. Ploenzke 6, , Michael Wand 8, Michael Pluemer 5, , , Robert Vinall 12, , Dr Thomas Heidel 6, AUDITORS FEES (DETAILS ACCORDING TO 285 HGB) The auditor s fees for fiscal 2009/2010 are calculated as follows: 2009/2010 '000 euros 2008/2009 '000 euros Annual audit Other auditing services 0 0 Accountancy services 0 0 Other services 0 0 Total

65 4. AFFILIATED COMPANIES The Company is the parent company for the following subsidiaries as defined by 290 of the German Commercial Code (HGB) and which are thereby also affiliated companies according to 271 Para. 2 of the German Commercial Code (HGB). The breakdown of P&I Personal & Informatik AG shareholdings with a direct or indirect share in the Company's capital, shareholder s equity and profit or loss for the year as at March 31, 2010 is set out as follows and expressed in 000 euros: In '000 euros DOMESTIC P&I Beteiligungs Gesellschaft mbh, Wiesbaden, Germany Share in capital 100 % Profit / loss (-) for the year 2009/2010 Equity of the company 2009/ FOREIGN P&I Personal & Informatik AG, Horgen, Switzerland 100% P&I Personal & Informatik GmbH, Vienna, Austria 100% 213 2,500 P&I Steyr GmbH, Steyr, Austria *) 100% P&I Personeel & Informatica B.V., Amsterdam, Netherlands 100% 425 2,333 P&I Personal & Informatik s.r.o., Bratislava, Slowakia 100% P&I Timemanagement B.V., Amsterdam, Netherlands **) 100% 0-22 Lothal Datentechnik & Partner AG, Zurich, Switzerland ***) 25.1% * Lower-tier subsidiary, 100 per cent subsidiary of P&I Personal & Informatik GmbH, of Vienna, in Austria ** Lower-tier subsidiary, 100 per cent subsidiary of P&I Personeel & Informatica B.V., of Amsterdam, in the Netherlands *** Details relate to the annual financial statement released on December 31, 2008 and have been converted from Swiss Francs into euros. 5. Consolidated financial statements Personal & Informatik AG, of Wiesbaden, is quoted on the Prime Standard of the Frankfurt Stock Exchange and, as the parent company of the P&I Group, has compiled this consolidated financial statement in compliance with the IFRS regulations. The annual financial statement and the P&I Personal & Informatik AG, of Wiesbaden, management report included with the Group management report as well as the P&I Group s consolidated financial statement for fiscal 2009/2010 will be published in the electronic pages of the Bundesanzeiger together with the auditor s certificate. They will also be published on our company s internet site. Furthermore, copies can be requested from P&I Personal & Informatik AG, Kreuzberger Ring 56, Wiesbaden, Germany. 63

66 6. DISCLOSURES PURSUANT TO 160 AktG The Company was informed in the first half year of fiscal 2008/2009, that the following investments pursuant to 21 Para. 1 of the German Securities Trading Act (WpHG) exist: Invesco Perpetual from Oxfordshire (United Kingdom) has declared to P&I Personal & Informatik AG on May 26 th, 2009: The Invesco Limited from Hamilton (Bermuda)hereby gives notice, that on 22 nd of May 2009 the voting interest in P&I Personal & Informatik AG fell below the threshold of 3% and amounted to 1.37% (this corresponds to 106,010 voting rights). These voting rights are in their entirety attributed to Invesco Limited in accordance with sec. 22 para. 1 sent. 1 no. 6 and sent. 2 of the WpHG. The Invesco UK Limited from London (United Kingdom) hereby gives notice, that on 22 nd of May 2009 our voting interest in P&I Personal & Informatik AG fell below the threshold of 3% and amounted to 1.37% (this corresponds to 106,010 voting rights). These voting rights are in their entirety attributed to Invesco UK Limited in accordance with sec. 22 para. 1 sent. 1 no. 6 and sent. 2 of the WpHG. The Deutsche Bank AG, London (United Kingdom) has declared pursuant to sec. 21 para. 1 WpHG to P&I Personal & Informatik AG on May 28 th, 2009: We hereby give notice, that on 25 th of May, 2009 the percentage holding of the voting rights held by our subsidiary DWS Investment GmbH, Frankfurt (Germany) in P&I Personal & Informatik AG fell below of the threshold of 3% and amounted to 2.95%. The total number of voting rights is 227,000. Hermes Administration Services Limited, London (United Kingdom) has declared pursuant to sec. 21 para. 1 WpHG to P&I Personal & Informatik AG on 15 June 2009: We, Hermes Administration Services Limited as the authorised administration agent on behalf of BT Pension Scheme Trustees Limited, London, England ( BTPSTL ) would like to make the following notifications regarding the holding of voting rights held in P&I Personal & Informatik AG (the Company ) according to 21, 22 para. 1 WpHG in the name of BTPSTL and its subsidiaries - BriTel Fund Nominees Limited, London, England ( BFNL ), - BriTel Fund Trustees Limited, London, England ( BFTL ), - Hermes Fund Managers Limited, London, England ( HFML ), and - Hermes Investment Management Limited, London, England ( HIML ). 1. On 12 June 2009 the voting interest held by BTPSTL in the Company fell below the 3% threshold of 21 para. 1 WpHG and amounted to 0% voting rights (i.e. 0 shares with voting rights) on this day. 2. On 12 June 2009 the voting interest held by BFNL in the Company fell below the 3% threshold of 21 para. 1 WpHG and amounted to 0% voting rights (i.e. 0 shares with voting rights) on this day. 3. On 12 June 2009 the voting interest held by BFTL in the Company fell below the 3% threshold of 21 para. 1 WpHG and amounted to 0% voting rights (i.e. 0 shares with voting rights) on this day. 4. On 12 June 2009 the voting interest held by HFML in the Company fell below the 3% threshold of 21 para. 1 WpHG and amounted to 0% voting rights (i.e. 0 shares with voting 5. On 12 June 2009 the voting interest held by HIML in the Company fell below the 3% threshold of 21 para. 1 WpHG and amounted to 0% voting rights (i.e. 0 shares with voting rights) at this day. 64

67 Armor Advisors, LLC from New York (U.S.A.) has declared to P&I Personal & Informatik AG on 16 th of June, 2009: The Armor Advisors, LLC hereby gives notice, that on 14 th of June 2009 the voting interest in P&I Personal & Informatik AG fell below the threshold of 3% and amounted to 2.47% (this corresponds to 190,106 voting rights) at this day. These voting rights are in their entirety attributed to Armor Advisors, LLC in accordance with sec. 22 para. 1 sent. 1 no. 2 and sent. 2 of the WpHG. Lazard Asset Management LLC, New York (U.S.A.) has declared pursuant to sec. 21 para. 1 WpHG to P&I Personal & Informatik AG on June 17 th, 2009: We hereby give notice, pursuant to 21 para. 1 of the WpHG, that on 15 th of June 2009 the percentage holding of the voting rights held by Lazard Asset Management LLC in P&I Personal & Informatik AG Fell below the threshold of 3% and at that date amounted to 2.149%. The total number of voting rights is 165,439. All of those voting rights are attributable pursuant to 22 para. 1 sent. 1 no. 6 WpHG. Kinney Asset Management LLC. from Chicago (U.S.A.) has declared to P&I Personal & Informatik AG (Germany) on 18 th of June, 2009: Acacia Capital L.P. from Chicago (U.S.A.) hereby gives notice, pursuant to sec. 21 para.1 of WpHG, that on 12 th of June 2009 the voting interest in P&I Personal & Informatik AG (Germany) fell below the threshold of 3% and amounted to 1.25% (this corresponds to 96,000 voting rights) on this day. Peter Kinney, General Manager from Acacia Capital L.P. (U.S.A.) has declared to P&I Personal & Informatik AG on 18 th of June, 2009: Peter Kinney hereby gives notice, pursuant to sec. 21 para.1 of WpHG, that on 12 th of June 2009 the voting interest in P&I Personal & Informatik AG (Germany) fell below the threshold of 3% and amounted to 1.34% (this corresponds to 103,050 voting rights) on this day. These voting rights are attributable to Peter Kinney under sec. 22 para. 1 sent. 1 no. 6 sent. 2 of the WpHG. 1.25% (this corresponds to 96,000 voting rights) of these voting rights are also attributed to him under section 22 para. 1 sent. 1 no. 1 WpHG. Kinney Asset Management LLC from Chicago (U.S.A.) has declared to P&I Personal & Informatik AG (Germany) on 18 th of June, 2009: Kinney Asset Management LLC hereby gives notice, pursuant to sec. 21 para.1 of WpHG, that on 12 th of June 2009 the voting interest in P&I Personal & Informatik AG (Germany) fell below the threshold of 3% and amounted to 1.34% (this corresponds to 103,050 voting rights) on this day. These voting rights are attributable to Kinney Asset Management LLC under sec. 22 para. 1 sent. 1 no. 6 of the WpHG. 1.25% (this corresponds to 96,000 voting rights) of these voting rights are also attributed under section 22 para. 1 sent. 1 no. 1 WpHG. On 3 rd of August 2009 (Correction of the publication from June 26 th, 2009), Argon GmbH & Co. KG, Blitz GmbH (to be renamed Argon Verwaltungs GmbH), CETP Investment 1 S.à.r.l., CETP II Participations S.à.r.l. SICAR, Carlyle Europe Technology Partners II, L.P., CETP II GP, L.P., CETP II Managing GP, L.P., CETP II GP (Cayman), Ltd., CETP II Investment Holdings, L.P., CETP II Managing GP Holdings, Ltd., TC Group Cayman, L.P, TCG Holdings Cayman, L.P., Carlyle Offshore Partners II, Limited, CETP II ILP (Cayman) Limited, TC Group Cayman Investment Holdings, L.P., TCG Holdings Cayman II, L.P. and DBD Cayman, Limited reported as follows to P&I Personal & Informatik AG pursuant to Sec. 21 of the German Securities Trading Act [Wertpapierhandelsgesetz - WpHG]: 1. Argon GmbH & Co. KG (formerly named Blitz GmbH & Co. KG) of Munich, Germany, exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal & Informatik Aktiengesellschaft of Kreuzberger Ring 56 in D Wiesbaden (P&I) (German securities identification number [WKN] /ISIN DE ) on 16 June

68 The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 No. 5 WpHG. The acquired 341,700 shares (correspondending to 4.44% of the voting rights) in P&I Personal und Informatik Aktiengesellschaft are held by Argon GmbH & Co. KG directly and in its own name. 2. Blitz GmbH (to be renamed Argon Verwaltungs GmbH) of Munich, Germany, exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to Blitz GmbH (to be renamed Argon Verwaltungs GmbH) pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to Blitz GmbH (to be renamed Argon Verwaltungs GmbH) are attributed to it through Argon GmbH & Co. KG (formerly named Blitz GmbH & Co. KG) which is controlled by it (No. 1.) and holds 3% or more of the voting rights in P&I. 3. CETP Investment 1 S.à.r.l. of Luxembourg, Luxembourg, exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to CETP Investment 1 S.à.r.l. pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to CETP Investment 1 S.à.r.l. are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I: (a) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.), and (b) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to CETP Investment 1 S.à.r.l. pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 4. CETP II Participations S.à.r.l. SICAR, 2 of Luxembourg, Luxembourg, exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to CETP II Participations S.à.r.l. SICAR pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to CETP II Participations S.à.r.l. SICAR are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I: (a) CETP Investment 1 S.à.r.l. (No. 3.) (b) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.), and (c) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to CETP II Participations S.à.r.l. SICAR pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 66

69 5. Carlyle Europe Technology Partners II, L.P., of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to Carlyle Europe Technology Partners II, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to Carlyle Europe Technology Partners II, L.P. are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: (a) CETP II Participations S.à.r.l. SICAR (No. 4.) (b) CETP Investment 1 S.à.r.l. (No. 3.) (c) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (d) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to Carlyle Europe Technology Partners II, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 6. CETP II GP, L.P. of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to CETP II GP, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to CETP II GP, L.P. are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: (a) Carlyle Europe Technology Partners II, L.P. (No. 5.) (b) CETP II Participations S.à.r.l. SICAR (No. 4.) (c) CETP Investment 1 S.à.r.l. (No. 3.) (d) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (e) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to CETP II GP, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 7. CETP II Managing GP, L.P. of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to CETP II Managing GP, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to CETP II Managing GP, L.P. are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: 67

70 (a) Carlyle Europe Technology Partners II, L.P. (No. 5.) (b) CETP II Participations S.à.r.l. SICAR (No. 4.) (c) CETP Investment 1 S.à.r.l. (No. 3.) (d) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (e) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to CETP II Managing GP, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 8. CETP II GP (Cayman), Ltd. of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to CETP II GP (Cayman), Ltd. pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to CETP II GP (Cayman), Ltd. are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: (a) CETP II GP, L.P. (No. 6.) (b) Carlyle Europe Technology Partners II, L.P. (No. 5.) (c) CETP II Participations S.à.r.l. SICAR (No. 4.) (d) CETP Investment 1 S.à.r.l. (No. 3.) (e) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (f) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to CETP II GP (Cayman), Ltd. pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 9. CETP II Investment Holdings, L.P., of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to CETP II Investment Holdings, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to CETP II Investment Holdings, L.P. are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: (a) CETP II Managing GP, L.P. (No. 7.) (b) Carlyle Europe Technology Partners II, L.P. (No. 5.) (c) CETP II Participations S.à.r.l. SICAR (No. 4.) (d) CETP Investment 1 S.à.r.l. (No. 3.) (e) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (f) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to CETP II Investment Holdings, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 68

71 10. CETP II Managing GP Holdings, Ltd. of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to CETP II Managing GP Holdings, Ltd. pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to CETP II Managing GP Holdings, Ltd. are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: (a) CETP II Managing GP, L.P. (No. 7.) (b) Carlyle Europe Technology Partners II, L.P. (No. 5.) (c) CETP II Participations S.à.r.l. SICAR (No. 4.) (d) CETP Investment 1 S.à.r.l. (No. 3.) (e) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (f) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to CETP II Managing GP Holdings, Ltd. pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 11. TC Group Cayman, L.P. of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to TC Group Cayman, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to TC Group Cayman, L.P. are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: (a) CETP II GP (Cayman), Ltd. (No. 8.) (b) CETP II GP, L.P. (No. 6.) (c) Carlyle Europe Technology Partners II, L.P. (No. 5.) (d) CETP II Participations S.à.r.l. SICAR (No. 4.) (e) CETP Investment 1 S.à.r.l. (No. 3.) (f) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (g) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to TC Group Cayman, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 12. TCG Holdings Cayman, L.P. of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to TCG Holdings Cayman, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. 69

72 The voting rights attributed to TCG Holdings Cayman, L.P. are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: (a) TC Group Cayman, L.P. (No. 11.) (b) CETP II GP (Cayman), Ltd. (No. 8.) (c) CETP II GP, L.P. (No. 6.) (d) Carlyle Europe Technology Partners II, L.P. (No. 5.) (e) CETP II Participations S.à.r.l. SICAR (No. 4.) (f) CETP Investment 1 S.à.r.l. (No. 3.) (g) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (h) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to TCG Holdings Cayman, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 13. Carlyle Offshore Partners II, Limited of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to Carlyle Offshore Partners II, Limited pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to Carlyle Offshore Partners II, Limited are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: (a) TCG Holdings Cayman, L.P. (No. 12.) (b) TC Group Cayman, L.P. (No. 11.) (c) CETP II GP (Cayman), Ltd. (No. 8.) (d) CETP II GP, L.P. (No. 6.) (e) Carlyle Europe Technology Partners II, L.P. (No. 5.) (f) CETP II Participations S.à.r.l. SICAR (No. 4.) (g) CETP Investment 1 S.à.r.l. (No. 3.) (h) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (i) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to Carlyle Offshore Partners II, Limited pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 14. CETP II ILP (Cayman) Limited of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to CETP II ILP (Cayman) Limited pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to CETP II ILP (Cayman) Limited are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: 70

73 (a) CETP II Investment Holdings (No. 9.) (b) CETP II Managing GP, L.P. (No. 7.) (c) Carlyle Europe Technology Partners II, L.P. (No. 5.) (d) CETP II Participations S.à.r.l. SICAR (No. 4.) (e) CETP Investment 1 S.à.r.l. (No. 3.) (f) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (g) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to CETP II ILP (Cayman) Limited pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 15. TC Group Cayman Investment Holdings, L.P. of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to TC Group Cayman Investment Holdings, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to TC Group Cayman Investment Holdings, L.P. are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: (a) CETP II Managing GP Holdings, Ltd. (No. 10.) (b) CETP II Managing GP, L.P. (No. 7.) (c) Carlyle Europe Technology Partners II, L.P. (No. 5.) (d) CETP II Participations S.à.r.l. SICAR (No. 4.) (e) CETP Investment 1 S.à.r.l. (No. 3.) (f) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (g) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to TC Group Cayman Investment Holdings, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 16. TCG Holdings Cayman II, L.P. of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to TCG Holdings Cayman II, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to TCG Holdings Cayman II, L.P. are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: (a) TC Group Cayman Investment Holdings, L.P. (No. 15.) (b) CETP II ILP (Cayman) Limited (No. 14.) (c) CETP II Managing GP Holdings, Ltd. (No. 10.) (d) CETP II Investment Holdings, L.P. (No. 9.) (e) CETP II Managing GP, L.P. (No. 7.) (f) Carlyle Europe Technology Partners II, L.P. (No. 5.) (g) CETP II Participations S.à.r.l. SICAR (No. 4.) (h) CETP Investment 1 S.à.r.l. (No. 3.) 71

74 (i) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (j) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to TCG Holdings Cayman II, L.P. pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. 17. DBD Cayman, Limited of George Town, Grand Cayman, Cayman Islands exceeded the thresholds of 3%, 5%, 10%, 15%, 20% and 25% of the voting rights in P&I Personal und Informatik Aktiengesellschaft on 16 June The percentage of voting rights held by it was 29.34% (2,259,000 votes) as at that date % of these voting rights (corresponding to 1,917,300 votes) are attributed to DBD Cayman, Limited pursuant to Sec. 22 Para. 1 Sentence 1 No. 1 WpHG. 4.44% (341,700 votes) are attributed to it pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG. The voting rights attributed to DBD Cayman, Limited are held by the following companies which are controlled by it and each hold 3% or more of the voting rights in P&I Personal und Informatik Aktiengesellschaft: (a) TCG Holdings Cayman II, L.P. (No. 16.) (b) TC Group Cayman Investment Holdings, L.P. (No. 15.) (c) CETP II ILP (Cayman) Limited (No. 14.) (d) CETP II Managing GP Holdings, Ltd. (No. 10.) (e) CETP II Investment Holdings, L.P. (No. 9.) (f) CETP II Managing GP, L.P. (No. 7.) (g) Carlyle Europe Technology Partners II, L.P. (No. 5.) (h) CETP II Participations S.à.r.l. SICAR (No. 4.) (i) CETP Investment 1 S.à.r.l. (No. 3.) (j) Blitz GmbH (to be renamed Argon Verwaltungs GmbH) (No. 2.) (k) Argon GmbH & Co. KG (No. 1.). 4.44% of these voting rights (corresponding to 341,700 votes) are attributed to DBD Cayman, Limited pursuant to Sec. 22 Para. 1 Sentence 1 No. 5 in conjunction with Sentence 2 WpHG from Argon GmbH & Co. KG. Armor Advisors, LLC, New York, USA, has notified us on 2 nd of September 2009 pursuant to section 21 (1) WpHG that her percentage of voting rights in our company exceeded the thresholds of 3% and 5% on 28 th of August 2009 and amounts to 5.81% (447,122 voting rights) as per this date. Of these voting rights, 3.38% (260,016 voting rights) are to be attributed to Armor Advisors, LLC pursuant to section 22 (1) sentence 1 no. 6 WpHG. Voting rights of the following shareholders holding 3% each or more in P&I Personal & Informatik AG are to be attributed to Armor Advisors, LLC: - Farringdon Capital Management SA: 3.38% (260,016 voting rights). The threshold excesses are valid for the period of time of the general meeting of the P&I Personal & Informatik AG on 1 st of September After the end of the general meeting, the percentage of voting rights of Armor Advisors, LLC in our company amounts to 2.43% (187,106 voting rights). Hermes Administration Services Limited, London (United Kingdom) has declared pursuant to sec. 21 para. 1 WpHG to P&I Personal & Informatik AG on 10 December 2009 the following correction of their notification from 15 June 2009: We, Hermes Administration Services Limited as the authorised administration agent on behalf of BT Pension Scheme Trustees Limited, London, England ( BTPSTL ) would like to make the following notifications regarding the holding of voting rights held in P&I Personal & Informatik AG (the Company ) according to 21, 22 para. 1 WpHG in the name of BTPSTL and its subsidiaries 72

75 - BriTel Fund Nominees Limited, London, England ( BFNL ), - BriTel Fund Trustees Limited, London, England ( BFTL ), - Hermes Fund Managers Limited, London, England ( HFML ), and - Hermes Investment Management Limited, London, England ( HIML ). 1. On 16 June 2009 the voting interest held by BTPSTL in the Company fell below the 3% threshold of 21 para. 1 WpHG and amounted to 0% voting rights (i.e. 0 shares with voting rights) on this day. 2. On 16 June 2009 the voting interest held by BFNL in the Company fell below the 3% threshold of 21 para. 1 WpHG and amounted to 0% voting rights (i.e. 0 shares with voting rights) on this day. 3. On 16 June 2009 the voting interest held by BFTL in the Company fell below the 3% threshold of 21 para. 1 WpHG and amounted to 0% voting rights (i.e. 0 shares with voting rights) on this day. 4. On 16 June 2009 the voting interest held by HFML in the Company fell below the 3% threshold of 21 para. 1 WpHG and amounted to 0% voting rights (i.e. 0 shares with voting rights) on this day. 5. On 16 June 2009 the voting interest held by HIML in the Company fell below the 3% threshold of 21 para. 1 WpHG and amounted to 0% voting rights (i.e. 0 shares with voting rights) at this day. Voting Rights Announcement (Stimmrechtsmitteilung) pursuant to Sec. 21, 22 German Securities Trading Act ( WpHG ) in relation to P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) On March 17, 2010 Argon GmbH & Co. KG annouced as follows: The Argon GmbH & Co. KG hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). On March 17, 2010 Argon Verwaltungs GmbH annouced as follows: The Argon Verwaltungs GmbH hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30,05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). All of the aforementioned voting rights are to be attributed to Argon Verwaltungs GmbH pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via Argon GmbH & Co. KG. On March 17, 2010 CETP Investment 1 S.à r.l. annouced as follows: The CETP Investment 1 S.à r.l. hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). All of the aforementioned voting rights are to be attributed to CETP Investment 1 S.à r.l. pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via the following companies: (a) Argon Verwaltungs GmbH (b) Argon GmbH & Co. KG. On March 17, 2010 CETP II Participations S.à r.l. SICAR annouced as follows: The CETP II Participations S.à r.l. SICAR hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). 73

76 All of the aforementioned voting rights are to be attributed to CETP II Participations S.à r.l. SICAR pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via the following companies: (a) CETP Investment 1 S.à r.l. (b) Argon Verwaltungs GmbH (c) Argon GmbH & Co. KG. On March 17, 2010 Carlyle Europe Technology Partners II, L.P. annouced as follows: The Carlyle Europe Technology Partners II, L.P. hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). All of the aforementioned voting rights are to be attributed to Carlyle Europe Technology Partners II, L.P. pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via the following companies: (a) CETP II Participations S.à r.l. SICAR (b) CETP Investment 1 S.à r.l. (c) Argon Verwaltungs GmbH (d) Argon GmbH & Co. KG. On March 17, 2010 CETP II Managing GP, L.P. annouced as follows: The CETP II Managing GP, L.P. hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). All of the aforementioned voting rights are to be attributed to CETP II Managing GP, L.P. pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via the following companies: (a) Carlyle Europe Technology Partners II, L.P. (b) CETP II Participations S.à r.l. SICAR (c) CETP Investment 1 S.à r.l. (d) Argon Verwaltungs GmbH (e) Argon GmbH & Co. KG. On March 17, 2010 CETP II GP, L.P. annouced as follows: The CETP II GP, L.P. hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). All of the aforementioned voting rights are to be attributed to CETP II GP, L.P. pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via the following companies: (a) Carlyle Europe Technology Partners II, L.P. (b) CETP II Participations S.à r.l. SICAR (c) CETP Investment 1 S.à r.l. (d) Argon Verwaltungs GmbH (e) Argon GmbH & Co. KG. On March 17, 2010 CETP II Managing GP Holdings, Ltd. annouced as follows: The CETP II Managing GP Holdings, Ltd. hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). All of the aforementioned voting rights are to be attributed to CETP II Managing GP Holdings, Ltd. pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via the following companies: (a) CETP II Managing GP, L.P. (b) Carlyle Europe Technology Partners II, L.P. (c) CETP II Participations S.à r.l. SICAR (d) CETP Investment 1 S.à r.l. 74

77 (e) (f) Argon Verwaltungs GmbH Argon GmbH & Co. KG. On March 17, 2010 CETP II Investment Holdings, L.P. annouced as follows: The CETP II Investment Holdings, L.P. hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). All of the aforementioned voting rights are to be attributed to CETP II Investment Holdings, L.P. pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via the following companies: (a) CETP II Managing GP, L.P. (b) Carlyle Europe Technology Partners II, L.P. (c) CETP II Participations S.à r.l. SICAR (d) CETP Investment 1 S.à r.l. (e) Argon Verwaltungs GmbH (f) Argon GmbH & Co. KG. On March 17, 2010 CETP II GP (Cayman), Ltd. annouced as follows: The CETP II GP (Cayman), Ltd. hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). All of the aforementioned voting rights are to be attributed to CETP II GP (Cayman), Ltd. pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via the following companies: (a) CETP II GP, L.P. (b) Carlyle Europe Technology Partners II, L.P. (c) CETP II Participations S.à r.l. SICAR (d) CETP Investment 1 S.à r.l. (e) Argon Verwaltungs GmbH (f) Argon GmbH & Co. KG. On March 17, 2010 TC Group Cayman Investment Holdings, L.P. annouced as follows: The TC Group Cayman Investment Holdings, L.P. hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). All of the aforementioned voting rights are to be attributed to TC Group Cayman Investment Holdings, L.P. pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via the following companies: (a) CETP II Managing GP Holdings, Ltd. (b) CETP II Managing GP, L.P. (c) Carlyle Europe Technology Partners II, L.P. (d) CETP II Participations S.à r.l. SICAR (e) CETP Investment 1 S.à r.l. (f) Argon Verwaltungs GmbH (g) Argon GmbH & Co. KG. On March 17, 2010 CETP II ILP (Cayman) Limited annouced as follows: The CETP II ILP (Cayman) Limited hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). All of the aforementioned voting rights are to be attributed to CETP II ILP (Cayman) Limited pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via the following companies: (a) CETP II Investment Holdings, L.P. (b) CETP II Managing GP, L.P. 75

78 On March 17, 2010 DBD Cayman, Limited annouced as follows: The DBD Cayman, Limited hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). All of the aforementioned voting rights are to be attributed to DBD Cayman, Limited pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via the following companies: (a) TCG Holdings Cayman II, L.P. (b) TC Group Cayman Investment Holdings, L.P. (c) CETP II Managing GP Holdings, Ltd. (d) CETP II ILP (Cayman) Limited (e) CETP II Investment Holdings, L.P. (f) CETP II Managing GP, L.P. (g) Carlyle Europe Technology Partners II, L.P. (h) CETP II Participations S.à r.l. SICAR (i) CETP Investment 1 S.à r.l. (j) Argon Verwaltungs GmbH (k) Argon GmbH & Co. KG. On March 17, 2010 Carlyle Offshore Partners II, Limited annouced as follows: The Carlyle Offshore Partners II, Limited hereby notifies pursuant to Sec. 21 para. 1 WpHG that its share in the voting rights of P&I Personal & Informatik Aktiengesellschaft (ISIN DE ) exceeded the threshold of 30% on March 16, 2010 and amounts, as at this date, to 30.05% (this corresponds to 2,314,000 out of a total of 7,700,000 voting rights). All of the aforementioned voting rights are to be attributed to Carlyle Offshore Partners II, Limited pursuant to Sec. 22 para. 1 sentence 1 no. 1 WpHG via the following companies: (a) TCG Holdings Cayman, L.P. (b) TC Group Cayman, L.P. (c) CETP II GP (Cayman), Ltd. (d) CETP II GP, L.P. (e) Carlyle Europe Technology Partners II, L.P. (f) CETP II Participations S.à r.l. SICAR (g) CETP Investment 1 S.à r.l. (h) Argon Verwaltungs GmbH (i) Argon GmbH & Co. KG. 6. DECLARATION OF COMPLIANCE PURSUANT TO 161 AktG The Company submitted the Declaration of Compliance pursuant to 161 AktG in November It is published on P&I s website and can also be requested from the Company. P&I complies with the recommendations of the German Government Commission with the exception of personal liability under the D&O insurance, the individual disclosure of the Board of Directors' emoluments, the disclosure of the remuneration of the Board of Directors (see Corporate Governance Report), the ruling on majorities required for resolutions to be passed by the Board of Directors, the formation of Supervisory Board committees, and the results-oriented remuneration and age limit for members of the Supervisor 76

79 7. EVENTS AFTER THE BALANCE SHEET DATE Significant events that have occurred after the balance sheet date have not been included above. Wiesbaden, May 31, 2009 Vasilios Triadis Dr. Hartmut Voß 77

80 Responsibility Statement "To the best of our knowledge, and in accordance with the applicable reporting principles for the annual financial statements, the annual financial statements give a true and fair view of the assets, liabilities, financial situation and profit or loss of P&I Personal & Informatik AG, and the management report, which has been combined with the Group management report, includes a fair review of the development and performance of the business and the situation of P&I Personal & Informatik AG, as well as a description of the principal opportunities and risks associated with the expected development of P&I Personal & Informatik AG." Wiesbaden, May 31, 2010 P&I Personal & Informatik AG Vasilios Triadis Dr. Hartmut Voß 78