009/10 eport 2 09/10 nnual R A Annual Report

Transcription

1 09/10 Annual Report

2 02 PARCS A milestone in the Bene product development 2009/10. An innovative product portfolio for the new communication areas in the office. A room-shaping furniture programme that creates an inspiring working environment for spontaneous exchange, personal encounters and working together. With PARCS, the central communication and work zones we-places can be holistically designed for the first time. PARCS can be freely combined and its spatial concept makes it both architectural and a furniture element at the same time. Key figures in TEUR and % 2009/10 Jan. 31, /09 Jan. 31, 2009 Change in % Revenue 179, , % EBITDA -5,199 18, % EBITDA-margin -2.9% 7.1 % EBIT -14,020 11, % EBIT-margin -7.8% 4.3 % Employees (as of Jan. 31) 1,248 1, % CAPEX* 14,248 20, % Cash flow from operating activities 7,438 15, % * Payments tangible fixed assets and intangible assets

3 03 Contents 10 Company profile 11 Strategy 12 Group s organisational chart 13 Executive bodies 14 Letter of the Management Board 18 The Bene share Shareholder structure, Share performance, Dividend, Investor relations, Financial calendar, Basic facts, Share at a glance 20 Status report Econonmic environment Sales and earnings situation Financial situation Information pursuant to article 243a of the Austrian Commercial Code Cash flow Investments Risk management and internal control system Innovation and product development Human resources Sustainability 38 Segment reporting Austria Germany UK Russia Other markets 51 Subsequent events 52 Corporate Governance report 54 Report of the Supervisory Board 55 Consolidated financial statements Consolidated balance sheet, Consolidated income statement, Consolidated statement of comprehensive income, Consolidated statement of changes in equity, Consolidated cash flow statement Notes Declaration of the Management Board according to article 82 (4) of the Austrian Stock Exchange Act Auditor s Report 132 Locations

4 4 Parcs. IDEA WALL. An ideal place for media supported presentations und discussions.

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7 7 PARCS. Wing Sofas. An inspiring working environment for meetings, spontaneous exchange and relaxation.

8 8 Parcs. TOGUNA. The curved forms encourage movement and are a symbol of breaking with rigid structures.

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10 10 Company profile Bene. One of the leading, internationally operating groups, setting office trends with the variety of its concepts, products and services. The name stands for space, creative quality and competence. The credo of the Bene brand is the integrated approach and design of the living space office. Tangible evidence of corporate culture. In an increasingly virtual world, the office becomes the tangible evidence of the corporate culture. Offices convey corporate values and brand values, they reflect the company s self-conception and identity becomes alive. Jointly with its customers and partners, Bene develops innovative office solutions, which express companies working processes, corporate culture and identity. A concept that inspires people and provides positive emotional support and thus contributes to the success of its customers. Living space office. Offices become living spaces, when they follow the needs of people for individuals as well as for the community. Functionality, quality and architectural design improve the working processes and increase motivation, creativity and commitment of employees. Intelligent office planning. Successful office planning pays attention to surface economy, reduces investment and operating costs and is easily and inexpensively adaptable to changing requirements. Bene defines three factors for the successful planning of offices: profitability, efficiency and communication of values. Urban landscape office. Modern office concepts appear more open and spacious, separated into different zones and areas. Divers locations for communication, cooperation, concentration and recreation are in demand similar to an urban landscape. Always tailored to the requirements of the company, the specific working processes and the job profiles of employees. Close to the customer. With own branches and specialised trade partners, the Bene Sales Net provides regional access to all service modules at 83 locations in 33 countries. A distribution system, which in combination with the Bene CompactFactory, cross-nationally supplies the customers with premium advice, planning, realisation and logistics service. Synergies of Sales Net and CompactFactory. The simultaneous coordination of direct sales (Sales Net) and production (CompactFactory) sets Bene apart from its competitors. CompactFactory, a flexible, process-optimised production system, provides customers with individuality in terms of measurements, surfaces and materials at prices of mass production. A competitive edge, that not only becomes more important to international customers and the project business, but also to the manufacturing of smallest quantities. Bene a sustainable approach. Ecological thinking and acting is a matter of course for Bene. The Company plays a leading role in the responsible environmental management, which encompasses all company divisions from product development, procurement, production and logistics up to product recycling.

11 11 Strategy With the target, to develop the Bene Group into a growth-oriented, innovative and leading Euro pean company, since 2001, Bene consistently pursues its strategy: The net gearing of 24.6 % is very solid. The financing structure is long-term oriented and secured. Build-up and expansion of direct sales as alternative to the model of manufacturer/specialised trade. Development and successful market introduction of a competitive full range of products and thus positioning as high-quality supplier to the volume segment. Creation of an integrated IT and process landscape with highly automated, centralised production. Rise to become the leading European brand, attaching great importance to the living space office. Although Bene had to report a substantial marketrelated loss in the challenging business year 2009/10, the success of the strategic measures implemented is reflected in essential positions: The gross profit margin improved from 50.7 % to 52.3 %. The operating cash flow of EUR 7.4 million is clearly positive. With the new product lines, own swivel chairs and the innovative product range PARCS, important steps towards a full range of products have been taken and have clearly consolidated the positioning. Investments in technology and the opening of the new research and innovation centre are important drivers on the way to innovation leadership. The equipment of the production site in Waidhofen/Ybbs, as one of the most modern in Europe, is secured for many years to come. Professional, extensive communication on the introduction of new products have significantly strengthened the Bene brand s content and awareness. The entry to the growth market India shows first successes. Through flexibilisation measures in Austria and abroad, particularly the successful implementation of the work-time model in Austria, the highly qualified and committed employees have been retained in the Company. B_Run. Made for demanding professional users.

12 12 Group s organisational chart 100 %-Participating interest Majority interest AG, Waidhofen/Ybbs 100 % 100 % OFFICE FURNITURE IRELAND LIMITED, Dublin 100 % Bene Deutschland GmbH, Frankfurt am Main 100 % Bratislava spol.s.r.o, Bratislava 100 % ROMANIA S.R.L, Bucarest 100 % Budapest Kft., Budapest 100 % Bene Belgium BVBA, Brussels % PLC, London 100 % SOFIA EOOD, Sofia 100 % Praha spol.s.r.o, Prague 100 % - WARSZAWA Sp.z o.o., Warsaw 100 % Bene GmbH, Hamburg 100 % Bene Ljubljana d.o.o., Ljubljana 100 % Bene GmbH, Essen 100 % KYIV TOV, Kiev 100 % Bene GmbH, Munich 100 % Bene GmbH, Villingen/ Schwenningen 100 % 100 % MOSKVA RUS OOO, Moscow OOO, Moscow 100 % Bene GmbH, Frankfurt am Main 100 % ENTERPRISE Gesellschaft für Büroeinrichtungen mbh, Frankfurt am Main

13 13 Executive bodies THE MANAGEMENT BOARD FRANK WIEGMANN With Bene since 2001 Member of the Management Board since 2004 Chairman of the Management Board since 2006 Responsibility Finance Technology THE SUPERVISORY BOARD Chairman MANFRED Deputy Chairman Norbert Zimmermann Members Karl Sevelda Richard Wolf THOMAS With Bene since 1994 Member of the Management Board since 2006 Delegated from the works council MARTIN HÖNICKL AUGUSTIN HAGER Responsibility Marketing Portfolio ROLAND MAROUSCHEK With Bene since 1999 Member of the Management Board since 2004 Responsibility Sales Human Resources

14 14 Letter of the management board Dear customers, business partners, employees and shareholders, the year 2009 was marked by the global financial and economic crisis. Many companies were forced to reduce or even to freeze investments. This led to sharp declines in sales in all markets and in many cases went along with the loss of jobs. The crisis also hit the office furniture industry and the Bene Group. This development has once again accelerated the consolidation process in the office furniture industry going on since the internet-crisis. Only very few manufacturers and specialist dealers worldwide succeeded in improving their undercapitalisation and the tight liquidity situation in good years. Against this background, the companies are faced with a continuously changing market, which in the coming years will be characterised by increasing industrialisation, internationalisation and crowding out. On the basis of its strategy being implemented since 2001, the Bene Group is well prepared for this challenging environment. Our main focus is on the following elements: Build-up and expansion of the direct sales net as alternative to the traditional model of manufacturer/ specialised trade. Development and successful market introduction of a competitive full range of products, which meets all essential customer requirements on office equipment. Creation of an integrated IT and process landscape with a highly automated, centralised production. To be the leading European brand that attracts the customers to the sales locations, products and services. The Bene Group was hit by the economic and financial crisis in the middle of its investment and development phase. Even though we have to report a sharp decrease in sales and the resulting loss, many developments and balance sheet items prove that the implemented strategic measures bear fruit. Compared to the previous year, sales of the Austria segment decreased by about 30.3 % to EUR 53.5 million during the reporting period. However, despite the difficult market environment we could acquire and successfully realise several major projects with renowned companies. At the same time, despite sharp declines in sales, we could strengthen our own product portfolio and thus keep the gross profit margins (contribution margins) stable. Likewise, in Germany sales dropped by 27.7 % in total to EUR 50.9 million but due to a good order situation for major projects, the sites in Hanover and Cologne could even increase sales compared the prior year. In spite of the partly considerable reduction in sales, we also increased the share of Bene in-house products in Germany. In combination with the targeted promotion of profitable product groups, we could keep gross profit margins in the largest European market at the previous year s level. As a result of the ongoing weak investment climate and the still clearly noticeable financial crisis in London the UK segment recorded further losses. In the reporting period, sales fell by 26.5 % to EUR 15.8 million. In Eastern Europe, the positive trend of the preceding year could not be continued and depending on the economic development of the individual countries, Bene suffered from heavy losses in sales: the Russia segment decreased by 40.6 % to EUR 23.6 million, the other markets segment by 37.6 % to EUR 35.4 million. As a result of the segments development, sales of the Bene Group declined by 32.4 % to EUR million compared to the historic high of the last year. The EBIDTA amounted to EUR -5.2 million and thus remained clearly below the reference value of the prior year (business year 2008/09: EUR 18.9 million). In the year under review, the Group s EBIT was EUR million. This loss is on the one hand resulting from the sharp decreases in sales but is also the result of the significant investment activities

15 15 of the prior years and the build-up and development of the direct sales net as alternative business model to the traditional manufacturer/specialised trade concept. In this situation, we took quick and consistent actions, and as of the first quarter of 2009/10 we implemented extensive measures to adjust costs, to reduce liquidity requirements and to improve the margins. The Group s personnel and non personnel costs were significantly lowered. This was achieved by a groupwide adjustment of personnel and particularly by a part time model for all employees of the AG. For the period from August 01, 2009 until July 31, 2010, the working hours and the income were cut down by 20.0 %. At the same time, the production capacities were immediately adjusted to the required capacity by flexibility measures (reduction of contract workers and suspension contracts). Thus, many employees including the Management and the Management Board within their means some beyond their possibilities have contributed to our cost saving goals. We would like to thank all our employees for their support. Active working capital management led to a significant reduction in inventories and receivables, and due to a consistent accounts receivable management, payment defaults remained at a low level. The gross profit margin, which despite the sharp declines in sales and the resulting pressure on prices, increased from 50.7 % in the business year 2008/09 to 52.3 % in the financial year 2009/10, considerably contributed to this positive cash flow development. This is the immediate consequence of the ongoing expansion of the share of in-house production, the newly developed products as well as of two meanwhile own swivel chair ranges. Moreover, with the development and the market introduction of the new product line PARCS, we took a further important step towards a full-range supplier and we are now also successfully active with our own products in the segment of upholstery. These measures are only a part of our program to strengthen the Bene Group. In the financial year 2009/10 we have restructured our financing from short to long-term and thus have further secured the Bene Group. At the same time we have initiated an extensive project for the quality and efficiency increase within the Group over the coming years. In coordination with the Supervisory Board, we will consistently follow our strategy and establish an alternative distribution channel with the direct sales net. We will promote the product development and intensify our sales activities in order to grow both, quality and quantity wise in the existing distribution channel. In this context, we likewise stopped the investments in the capacity expansion of the plant in Waidhofen/Ybbs and we almost exclusively finished current projects. Innovation and product development projects were stretched and thus adjusted to the business environment. Nevertheless, we will although at considerably reduced capacity further expand resp. maintain our advantage achieved over our competitors. Our estimates for the business year 2010/11 remain very conservative, since the visibility on the markets is still very limited and a volatile situation and development are to be assumed. From today s point of view, we cannot yet say when and to what extent an economic recovery may be expected. In any case, we expect no significant trend reversal in the first half-year of 2010 and thus we anticipate a negative result for the financial year 2010/11. Due to the consistent implementation of all these measures, in the past business year, the Bene Group has generated a clearly positive cash flow in the amount of EUR 7.4 million, which is about 50.0 % lower than the previous year s cash flow (EUR 15.2 million). The Management Board defines its duty so as to consistently implement the long-term strategy of the Bene Group and to economically and carefully use the available means. Therefore, we will propose to the General Meeting not to distribute a dividend for the business year 2009/10.

16 16 Letter of the management board In the challenging business year 2009/10 we stayed on track, have maintained our sales organisation in its basic structure and through our extensive flexibility measures, to a large extent, we could keep our qualified employees within the Company. At the site in Waidhofen/Ybbs, the research and innovation centre was taken into operation. For the first time, it allows the Group to comprehensively present its overall product competence to customers and employees. Further more, with the acquisition of adjacent building grounds in the past years, we have created the necessary prerequisites for a step-by-step expansion of the factory. Adjusted to the economic situation, first successful steps into the new market India were taken and in the cities of Munich, Mannheim and Ljubljana we moved to better locations at more favourable conditions. With PARCS we succeeded in introducing a product to the market, which with its integrated approach sets new accents in the industry and due to the high level of attention, PARCS led to a marked increase in the perception of the Bene brand. Thus, when the markets recover, the Bene Group has a strong organic growth potential on the basis of the existing capacities. In case of a market recovery, the Bene Group should be able to realise a considerably higher increase in earnings, compared to the industry. Particularly against the background of the introduction of profitable products and essential capacity investments during the last years. Bene s success is based on a strong corporate culture and the responsible acting of all involved. The individual companies of our Group owe their success to the local employees and managers. This is very much appreciated by our customers and partners and constitutes the basis for our success. At this point, we would like to take the opportunity to thank our employees, managers and works council for their commitment in the past, difficult and hard year. We would also like to express our gratitude to the Supervisory Board, who promptly dealt with upcoming topics and thus essentially contributed to the success of the Company and the implementation of our strategy. Esteemed shareholders, we thank you for the confidence you placed in us during these stormy times at the stock markets. We are convinced that our business model will be very successful in the medium term and we invite you to continue accompanying us. With best regards,

17 17 Roland Marouschek Member of the Management Board Sales and Human Resources Frank Wiegmann Chairman of the Management Board Finance and Technology Thomas Bene Member of the Management Board Marketing and Portfolio

18 18 The Bene share The Bene share, listed at the Prime Market of the Vienna Stock Exchange since November 03, 2006 shows an eventful development since its initial listing. With regard to its investor relations activities, the Bene Group pays particular attention to an active and continuous investors service. As result of transparent information policy and numerous investor relations activities, the share is nowadays well positioned on the capital market as active and sustainable title and furthermore is part of the Austrian Sustainability Index VÖNIX. Stable shareholder structure. Since the IPO, the Company has a clear and attractive shareholder structure for investors. With a share of 51.5 % of the stock capital, the free float still exceeds the important 50 % threshold and thus confirms the AG s orientation as public company. The Bene Privat stiftung (private trust), which holds more than 42 % of the share, is a stable and reliable core shareholder. The members of the Management hold about 6 % of the shares. Sharehodler structure Despite first signs of recovery of the international capital markets, the economic environment still remained strained in the past business year. Nevertheless, the Bene share showed a positive performance under these difficult conditions. SHARE PERFORMANCE The ongoing macro-economic conditions on the international stock markets likewise reflected in the share price of the AG. Particularly at the beginning of the business year 2009/10, the price was under considerable pressure and in March 2009 reached a historic low of EUR At the beginning of the new financial year, a parallel development of the share price to the ATX Prime index started. The further performance of the share price will strongly depend on the macroeconomic developments of the year 2010/ % Bene Privatstiftung (private trust) 51.5 % Free float 6.1 % Management ATX Prime Source: DATASTREAM 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % -10 % -20 % -30 % January 30, 2009 January 29, 2010

19 19 DIVIDEND On the occasion of the IPO, the AG has defined a clear dividend policy. Accordingly, in times of good business success and positive outlooks, the Company pursues a dividend-oriented distribution policy. Due to the unpredictable recovery of the economic situation on the financial markets and the continuing neutral economic prospects for the business year 2010/11, just as in the financial year 2008/09, the Management Board will propose to the shareholders meeting on June 09, 2010, not to distribute a dividend for the fiscal year 2009/10 in order to further consolidate the AG s capital strength. INVESTOR RELATIONS The AG is committed to an open and transparent communication policy. The target of investor relations is to meet the capital market s requirements on transparency and to provide a fair image of the Company. As relatively young stock quoted company, Bene particularly strives to develop the relationship with existing investors, to approach new ones and to guarantee comprehensive transparency. Road shows, discussions with investors and analysts as well as comprehensive quarterly reporting are current activities of investor relations. Under bene.com >> Investor Relations, the AG provides all share key data, current analyses, key figures and dates as well as all news and reports of the Company to investors and interested parties. BASIC FACTS OF THE SHARE ISIN Code AT Market issued Vienna Stock Exchange, Prime Market Type of shares Ordinary no-par value voting bearer shares Total number of shares 24,347,352 Authorised capital EUR 9 million International dual listings none Indices ATX Prime, WBI Ticker symbol Free float 51.5 % FINANCIAL CALENDAR Announcement of results for the business year 2009/10 May 19, 2010 Annual General Meeting for 2009/10 June 09, 2010 Ex-Dividend Day June 16, 2010 Dividend Payment June 16, 2010 Results first quarter of 2010/11 June 23, 2010 Results first half year of 2010/11 September 22, 2010 Results third quarter of 2010/11 December 15, 2010 SHARE AT A GLANCE Highest closing price EUR 1.83 on September 18, 2009 Lowest closing price EUR 0.97 on March 19, 2009 Market capitalisation as of January 31, 2010 EUR 34.1 million Average trading volume EUR 46,944

20 20 Status Report ECONOMIC ENVIRONMEnt The year 2009 was marked by the global economic crisis and thus was characterised by an extremely tense market environment. For the first time since more than 60 years, the global economy had to face a decline in economic performance. The European and the US-American markets were particularly hit. With further although slightly weakened growth rates, particularly China proved to be a stabilizer. Worldwide, first signs of recovery were visible at the beginning of the third quarter of Forward-looking indicators point to a continuation of the moderate upturn, however the economy is expected to still remain fragile in the longer term. Even though the economy in the euro zone picked up in speed at the end of the year 2009, on the annual basis, in 2009, the economy decreased by 4.1 % and thus stronger than ever before in the history of the Monetary Union. In Germany, the largest national economy of the Union, the economic performance dropped even by 4.9 %. In the USA, the stabilisation continued in the year 2009, even though the industrial production further decreased and the unemployment figures reached new highs. In the past year, the USA had to record a decline in the gross domestic product (GDP) by 2.4 %. The economic environment of the individual core markets of the Bene Group will be further specified in the respective segment reporting. DEVELOPMENT OF S CORE MARKETS GDP-growth in % vs prior year Inflation in % vs prior year Trade balance in % vs prior year Austria Germany UK Russia Europe (27) Sources: WKO, Deutsche Bank Office furniture market. In the year 2008, the Western European office furniture market reached sales of almost EUR 8,594 million and since 2005 recorded a steady annual growth of up to 8.1 % (2007). The global economic downturn became noticeable in the fourth quarter of For 2010, the office furniture market in Central Europe expects a reduction in sales by 3.3 % compared to 2009, which corresponds to about EUR 0.3 billion. According to experts from InterConnection, the decline will stabilise in 2010, and a growth of 1.6 % in 2011 and even of 3.3 % in 2012 might be achieved. However, it will take time to reach again the sales volume of the year Until 2008, the prices of the individual products of all divisions rose steadily due to increasing material costs and a strongly growing demand; for the first time since 2005, prices went down in As a result of the economic and financial crisis, both, material costs as well as the demand on the European market for office furniture dropped rapidly that is why the manufacturers and their dealers granted generous rebates. According to CSIL-experts, the producers will face pressure on prices until the year Those companies that find the best answers to these challenges will disproportionately benefit from the upswing after the end of the difficult phase and thus will have a clear competitive advantage over the competitors.

21 21 Outlook. In the latest report of the International Monetary Fund (IMF) on the development of the global economy in the year 2010, the pessimistic expectations of the last year are revised and a growth of the world economy is assumed. On a global level, the IMF expects an increase in the economic performance of 3.9 % for the year 2010 a rise of 0.8 percentage points compared to the previous estimation and of 4.3 % for the year With a plus of 10.0 % in the current year and of 9.7 % in the coming year, China will remain the most important growth driver. According to the IMF, the USA, the worldwide largest national economy, will grow by 2.7 % in the current year and in the next year by 2.4 %. In historical comparison, the IMF expects that the growth of most developed economies might remain restrained. The euro zone might grow by 1.0 % (previously expected: 0.3 %). The IMF increased its estimates for the current year for Germany to 1.5 % and thus by 1.2 percentage points compared prior assumptions made in the latest world economic outlook. In the coming year, the recovery might accelerate to 1.9 %. The IMF foresees a significantly stronger growth for the emerging countries. It should reach 6.0 % in the current year and 6.3 % in the coming year. Besides China, likewise the Indian economy with rates only slightly below 8.0 % will give impetus to the global economy. However, the IMF also mentioned a number of important risks for its more favourable outlook. The IMF warns that in case of an early suspension of government subsidies, a new collapse could happen. The prerequisites for such an exit strategy are a perceptible return of private demand and improvements on the employment market. Likewise, new risks may arise from weakened financial systems and housing markets as well as from increasing unemployment. Particularly in emerging countries, the real estate prices increased rapidly, which stirs fear of bubbles. Furthermore there are worries about increasing national deficits in many countries, which might create disturbances on the financial markets and might increase credit costs. Likewise, higher raw material prices are among the problems. Source: IMF World Economic Outlook Update, Jan. 26, 2010 The reason for these clearly positive forecasts is the more solid and broader growth in the second half-year of Thus, the global economic recovery presents itself stronger than still expected a few months ago. However, the development will have very different levels, warned the IMF. Main factor behind the recovery are thus the multi-billion economic programs of the major industrial and emerging countries.

22 22 Status Report 19.8 % Other markets SALES AND EARNINGS SITUATION The worldwide decline in the economy in 2009 and the impact on the industries relevant to Bene clearly reflected in the Group s business performance in 2009/10. Compared to the results of the business year 2008/09, the Bene Group had to report significant decreases in sales and earnings. Due to the early reaction to the changed conditions on the markets and the adjustment of the cost structures, the Bene Group could in fact stabilise the situation, however it could not compensate the decline in business in its overall dimension. Against this background, compared to the historic high of the business year 2008/09, consolidated sales of the Bene Group decreased by 32.4 % to EUR million (2008/09: EUR million). A consideration per segment shows that the segments other markets and Russia were most hit by the drop in sales. In the other markets segment, particularly Poland, Ireland, Croatia and Bulgaria were strongly affected by the crisis, whereas markets such as Belgium, France and the Middle East due to a better order situation were able to succeed with major projects. Sales by segment as of January 31, % Austria Despite the decline in sales and the ongoing pressure on prices for major projects, the Bene Group could further improve its margins compared to the business year 2008/09 due to the expansion of the share of in-house products and the permanent innovations in the product development for example the innovative product range PARCS or the Bene swivel chairs. In the past financial year, the gross profit margin (ratio between expenses for materials and supplies and revenues) reached 52.3 % (2008/09: 50.7 %) and thus made a positive contribution to earnings. Through quickly implemented personnel measures in the second quarter a combination of a part time model, short time work, suspension contracts and a targeted reduction in personnel in the individual segments and companies personnel expenses of the Bene Group were reduced by 15.6 % to EUR 65.4 million compared to the previous year (2008/09: EUR 77.5 million). Already in the first quarter of 2009/10, the Bene Group adopted an extensive non personnel cost cutting program, which led to a reduction of other expenses of 14.5 % to EUR 38.3 million (2008/09: EUR 44.7 million). Against this background the last year s EBIDTA reached EUR -5.2 million and thus remained clearly below the reference value of the prior year (2008/09: EUR 18.9 million). Adapted to the business planning and on the basis of conservative, realistic assumptions with regard to future developments of the markets, the Bene Group has carried out impairment tests in the financial year 2009/10. In the reporting period, impairment of goodwill amounted to EUR 0.2 million. Total amortisation and impairments reached EUR 8.8 million (2008/09: EUR 7.6 million) % Russia 8.8 % UK EBIT by segment as of January 31, % Germany The cost cutting programs carried out in all segments could not compensate the partly substantial decline in sales and thus all segments of the Bene Group had to report a negative EBIT in the business year 2009/10. In the year under review, in total, the EBIT of the Bene Group amounted to EUR million (2008/09: EUR 11.4 million ) % Other markets 37.6 % Austria 10.0 % Russia 8.5 % UK 24.0 % Germany

23 23 In the Austria segment non-recurring costs for restructuring and the conservative realistic valuation of current assets resulted in additional EBIT charges. The administrative costs for the production, development and holding site Waidhofen/Ybbs, which are stated in the Austria segment, could be further reduced by the introduction of a part time model for all employees of the AG and non personnel cost savings. At the same time, the Bene Group has adjusted the production capacities in Waidhofen/Ybbs to the changed capacity situation through the reduction of contract personnel and the implementation of suspension contracts with reemployment guarantee for industrial workers. The increased interest charges from the corporate bond issued in April 2009 negatively influenced the financial result of the year The only security position in the investment spectrum, value adjusted in the previous year, could slightly increase its value and thus does not require any additional impairment. In total, the financial result dropped by EUR 0.1 million to EUR -2.8 million in the financial year (2008/09: EUR -2.7 million). In the current reporting period, the above-mentioned influencing factors led to deterioration in earnings before tax (EBT) to EUR million (2008/09: EUR 8.7 million). Since August 2009, employees at selected sites in Germany are on short-time work. In all other segments, the Management focuses on hiring freeze, the use of natural attrition and non personnel cost savings to compensate the EBIT impacts caused by sales reduction. Compared to the previous year, the tax ratio decreased to 1.9 % (2008/09: 46.2 %). The low tax rate is on the one hand resulting from the losses of individual subsidiaries and on the other hand from the declining earnings, for which there are no applicable loss carry-forwards. In the financial year 2009/10, the earnings after tax amounted to EUR million (2008/09: EUR 4.7 million ). Thus, the Bene Group reported a loss per share of EUR (2008/09: EUR 0.19). B_Cause. Classic design, re-interpreted.

24 24 Status Report FINANCIAL SITUATION With a value of EUR million as of the balance sheet date January 31, 2010, the balance sheet total was 11.1 % higher than the previous year s reference value (January 31, 2009: EUR million). Thus, the equity ratio reached 31.7 % (January 31, 2009: 46.8 %). The Bene corporate bond, issued in April 2009 had significant influence on both, the increase of the balance sheet total as well as the change in the equity ratio. As of January 31, 2010, non-current assets increased to EUR 69.3 million due to additions to property, plant and equipment; this corresponds to a 42.8 % share of the balance sheet total (January 31, 2009: 45.2 %). In the reporting period, current assets rose by EUR 12.7 million to EUR 92.4 million and thus amounted to 57.2 % of the balance sheet total (January 31, 2009: 54.8 %). As a result of the decline in sales and an active working capital management, inventories fell by 27.7 % to EUR 13.8 million. The decrease in sales in combination with an active accounts receivable management led to a reduction in trade receivables. This was possible although, in the same period, the average maturity of customer receivables rose from 54 to 66 days. In the past business year the average term of trade liabilities likewise increased from 66 to 88 days. The significant improvement in working capital (inventories + trade receivables trade liabilities prepayments received) essentially contributed to secure the liquidity situation. Compared to the previous year, in the business year 2009/10, Bene reduced the inventories by EUR 5.3 million and trade receivables by EUR 13.4 million. Due to the focused use of payment terms and the reduction of prepayments received, trade liabilities (including prepayments received) dropped only by EUR 4.6 million. In total, the working capital decreased by EUR 14.1 million and reached EUR 20.9 million or 11.7 % of revenue (January 31, 2009: EUR 35.0 million or 13.2 % of revenue) on the balance sheet date. The cash inflow from the bond becomes particularly evident in the change of the balance sheet position cash and cash equivalents, which increased by EUR 32.0 to EUR 43.8 million (January 31, 2009: EUR 11.8 million). The financing structure of the Bene Group was and will be based on longer-term debt and the creation of strategic liquidity reserves. As of January 31, 2010, longterm financial liabilities increased to EUR 50.9 million (January 31, 2009: EUR 3.7 million) as a result of the issue of a corporate bond in the amount of EUR 40.0 million and the borrowing of a long-term investment credit of EUR 7.5 million, subsidised by the ERP-fund (European Recovery Program). Cash and cash equivalents 27.1 % 8.1 % 7.7 % 20.2 % 17.6 % Other long and shortterm debt Long and short-term financial liabilities Other long-term and short-term assets Receivables and other assets 7.1 % 18.8 % 31.0 % 16.2 % 16.0 % 37.6 % Inventories Intangible assets and property, plant and equipment 8.6 % 38.4 % 13.1 % 40.1 % 0.8 % 46.8 % 11.6 % 1.5 % 31.7 % Trade payables Long and short-term provisions Equity 09/10 08/09 Assets in TEUR 08/09 09/10 Equity and liabilities in TEUR

25 25 INFORMATION PURSUANT TO article 243a of the AUSTRIAN COMMERCIAL CODE The share capital of the AG consists of 24,347,352 ordinary no-par bearer shares. The Bene Privatstiftung (private trust) holds 42.4 % of the shares of the AG. There are no restrictions with regard to the voting rights or the transfer of shares. There are no holders of shares with specific controlling rights; this likewise includes employees, holding shares of the AG. Article 7 and article 9 of the statutes of the AG specify the provisions about the appointment and dismissal of members of the Management Board and the Supervisory Board, whereas no exceptional regulations are included. There is no age limit for the appointment of members to the Management Board or to the Supervisory Board. Currently, there is an authorisation for an increase of the share capital. According to this, the Management Board is authorised to increase the share capital within five years after the registration of the amendment to the statutes in the commercial register if necessary in several tranches by up to EUR 9,000,000 by issuing 9,000,000 no-par bearer shares against cash contribution without exclusion of subscription rights of the shareholders and to determine the issue price and the issuing conditions with the consent of the Supervisory Board. respective share capital. The acquisition of own shares for subsequent sale is explicitly excluded. The nominal value per share to be purchased must not fall below EUR The highest buyback price shall lie at EUR 4.50 per share. The Management Board is authorised to cancel repurchased own shares of the Company without further resolution of the General Meeting. Moreover, the Management Board is authorised to resell own shares purchased. However, according to the provisions of the Stock Exchange Act, the Management Board is committed to publish the respective share buy-back program and the period and a possible resale program immediately prior to the initiation. The authorisation begins on June 03, 2009 and has a term of 30 months. The Management Board is also authorised to resell own shares purchased within five years from the date of the resolution with consent of the Supervisory Board according to the article 65 (1b) of the Austrian Stock Corporation Act without further resolution of the General Meeting and under exclusion of the subscription rights of the shareholder, also in other ways than on the stock market or in a public offer. The amendment of the statutes of the AG does not provide for any stipulations deviating from the legal provisions. Furthermore, there are no significant agreements, to which the Company is a party, which would take effect, cause major changes or expire in the case of a change in control of the Company following a takeover bid. Furthermore, according to article 65 (1) (8) of the Austrian Stock Corporation Act, the Management Board is authorised to purchase own shares. However, the shares to be acquired must not exceed 10.0 % of the In case of a public takeover offer, no compensation agreements between the Company and its members of the Management Board and the Supervisory Board or employees were agreed.

26 26 Status Report CASH FLOW Despite the clearly negative operating result, in the business year 2009/10, the Bene Group achieved a positive operating cash flow in the amount of EUR 7.4 million (2008/09: EUR 15.2 million) as a result of active measures in the working capital and accounts receivable management and the consistent use of payment conditions with suppliers. In total, in the financial year 2009/10, the working capital declined by EUR 14.1 million compared to the previous year s reference value, whereas the amount of EUR 14.7 million accounts for the change in trade receivables. Due to the targeted use of payment terms and the reduction of prepayments received, trade liabilities dropped only by EUR 4.6 million, other liabilities decreased by EUR 2.2 million compared to the prior year. equipment and intangible assets decreased by EUR 6.7 million to EUR 14.2 million (2008/09: EUR 20.9 million). The portion for investments in the further strengthening of the Bene business model, particularly in the own product innovations and in new developments amounted to EUR 2.2 million (2008/09 EUR 3.5 million). Essential changes in the cash flow from financing activities resulted from the issue of the corporate bond in the amount of EUR 40.0 million and the borrowing of a long-term investment credit subsidised by the ERPfund. In addition to the repayment of existing long-term investment credits, short-term working credit lines were fully repaid from cash reserves from the bond. In the business year 2009/10, the cash flow from financing activities totalled EUR 37.3 million (2008/09: EUR 0.9 million). The cash flow from investing activities, predominantly determined by expenditures in property, plant and equipment and intangible assets (CAPEX), amounted to EUR million in the current reporting period (2008/09: EUR million). Due to the rigorous spending policy and the limitation of operating investments to rationalisation and maintenance measures, expenditures for the acquisition of property, plant and Total changes in cash (including cash flow from investing and financing activities) amounted to EUR 32.1 million in the financial year 2009/10 (2008/09: EUR -3.5 million). As of January 31, 2010, net debt of the Bene Group reached EUR 12.6 million (January 31, 2009: EUR 8.1 million; net gearing was 24.6 % (January 31, 2009: 11.9 %). in TEUR 2009/10 January 31, /09 January 31, 2009 Cash flow from operating activities 7,438 15,218 Cash flow from investing activities -12,672-19,651 Cash flow from financing activities 37, Change in cash and cash equivalents 32,102-3,533 Adjustment from currency conversion Cash and cash equivalents at end of period 43,773 11,763 Maturities financial liabilities as of January 31, 2010 Maturities financial liabilities as of January 31, 2009 More than 5 years Between 1 and 5 years Less than 1 year More than 5 years Between 1 and 5 years Less than 1 year

27 27 INVESTMENTS Taking the economic development into account, the Bene Group has considerably reduced its investments to EUR 13.3 million in the past business year (2008/09: EUR 22.5 million). The Group recorded additions to property, plant and equipment of only EUR 9.8 million (2008/09: EUR 16.1 million), investments in intangible assets amounted to EUR 3.5 million (2008/09: EUR 6.4 million) % or EUR 2.2 million (2008/09: 15.6 % or 3.5 million) of total investments accounted for own product innovations and new developments. This likewise reflects, as in previous years, the corporate strategy, which strives to sustainably strengthen the own product portfolio. In the past business year, the Bene has also initiated the first structural measures for the planned new site in Vienna. The opening is scheduled for midyear Even though to a limited amount, in the business year 2009/10, as in previous periods, the Bene Group continued spending in the expansion of the site in Waidhofen/Ybbs and the modernisation of the points of sale throughout Europe. During the reporting period, the sites in Munich, Mannheim and Ljubljana were modernised and adjusted to the new product range. At the site in Waidhofen/Ybbs, the construction of the research and innovation centre started in 2008/09, was finalised (investments 2009/10: EUR 2.7 million, investments 2008/09: EUR 5.9 million) and the centre was opened in the context of the Bene Fit Training Days in autumn Now, the Bene Group may use this modern centre to present its full product range to national and international customers. TREASURY All tasks of the Treasury are centralised within the Bene Group. Besides the control and the monitoring of the daily payment transactions, the tasks include cash and liquidity management, financing and disposition and hedging of foreign currency risks. Due to the unstable situation on the financial markets, the Bene Group Treasury focuses on the permanent monitoring of accounts receivable and the dunning process, the adherence to the Group s payment terms and the advance payments for major projects. Bene applied for a Government guarantee in the context of the Austrian law to enhance the liquidity of companies ( Unternehmensliquiditätsstärkungsgesetzes (ULSG)) to further secure liquidity for the short-term operating credit lines expiring at the end of the business year 2009/10. The target is to secure short-term operating credit lines for the period of three years by using the government guarantee. The funds of the bond issued in April 2009 were invested short-term in the business year 2009/10 resp. until the finalisation of the ULSG procedure will be used for the financing of the current, operating business. In the coming financial years, the proceeds from the issue of the bond ensure the consistent implementation of the corporate strategy and the use of possible acquisition opportunities. With further investments mainly in equipment and machinery the Bene production site in Waidhofen/ Ybbs is one of the most modern manufacturing facilities in Europe. in TEUR Intangible assets Property, plant and equipment Financial assets Total Book value as of Jan. 31, ,140 45, ,742 Investments 3,456 9, ,301 Depreciation and amortisation -2,565-5, ,558 Impairment of goodwill Disposals Foreign currency effects Book value as of Jan. 31, ,909 48, ,460

28 28 Status Report RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM Pursuant to article 267 (3b) of the Austrian Commercial Code in the version of the Corporate Law Amendment Act 2008, the Bene Group ( AG) is obliged to describe the essential features of the risk management and the internal control system as part of the consolidated status report in the context of the preparation of the consolidated annual financial statements: RISK MANAGEMENT As internationally operating company, the Bene Group is exposed to a variety of risks in the context of its business activity. In this respect, the economic cycle of the sales markets plays an important role, since the investment activity is usually lower in a weak economic environment, for both, the purchase of office furniture and other furniture. However, the geographic diversification of Bene counteracts this fact; not all markets, in which Bene is present, undergo the same development or are in the same economic cycle. Due to Bene s broad geographic spread and at the same time, the focus on the core business, country specific risks never threaten the overall Group. Moreover, due to many years of market presence and international experience, the Management may identify risks at an early stage and appropriately evaluate these risks. Risk conception. Bene defines risk as a possible deviation from company targets: on the one hand the possibility of a loss (risk in the literal sense), on the other hand the non-realisation of a possible additional profit. Thus, an efficient and effective risk management means to identify risks in time and to implement appropriate measures to minimise or to avoid the risk, or to keep the possible damage as low as possible. For this reason, risks have to be identified, evaluated, controlled and monitored. Risk policy. Bene does not pursue the strategy of an own risk management department, but has organisationally integrated the risk management in the individual operational processes, the management structure, the business planning and the reporting and information system. Hence, the risk management is embedded in the Company s organisational structure and procedures. On one side, the risk management concerns risks in the context of the operating activities (production and sale of office furniture and other furnishing and the performance of services). Risks taken beyond the operating activity are limited to acquisition, financial and equity risks controlled by the AG resp. hedged as far as possible. The protection against selected risks is ensured by the conclusion of insurance policies so as to limit or to exclude the possible consequences arising from such risks. The scope of these risks to be insured are subject to a regular control and must represent a reasonable balance between the economic benefit and the insurance premium to be paid. Responsibilities and duties. Whereas the overall responsibility for the monitoring of the risk management at group level lies with the Management Board, the local persons responsible resp. the heads of the different departments of the Company Headquarters are in charge of the operational risk management in their area of responsibility. The management of risks from the operating activity lies principally within the responsibility of the local companies and thus is decentralised. Hence, arising risks may be identified already at an early stage and prompt countermeasures may be initiated. Supporting measures for the reduction of risks or risk prevention, such as in form of internal organisational or commercial guidelines, are provided centrally.

29 29 The risk management of risks beyond the operating activities, such as financial risks is performed centrally. Risk monitoring and control. The internal reporting plays a major role for the monitoring and control of economic risks of the current business, since the Management Board has the overall responsibility for the monitoring of the risk management at group level. The permanent internal reporting of the Controlling, the Group Accounting and the QSU department, the annual budgeting process and the group-wide guidelines are thus important instruments for the monitoring and control of risks. The improvement of the internal control system in the past business year and derived measures essentially contribute to the monitoring and control of risks. 2. Production risk As every year, the annual external risk assessment of the fire risk at the production site in Waidhofen/Ybbs was classified as very good. The basis therefore constitute the high standard of the automated fire control systems (fire sprinkler system), the well-trained works fire brigade, which is in charge of the technical and organisational fire protection, the active risk management in all security and fire protection aspects and the existence of emergency measures and plans. The machinery is state-of-the-art and required technical controls are regularly performed and if necessary equipment replacement is provided. In the context of this external risk assessment, likewise the dependence relation between the suppliers and customers was classified as non-existent. In addition to the standard reporting, the Management is immediately informed about major risks and their damage potential. Major risks and uncertainties. Pursuant to article 243 (1) of the Austrian Commercial Code in the version of the Corporate Law Amendment Act 2008, the Bene Group ( AG) is obliged to describe the major risks and uncertainties, to which the Company is exposed. General, insured risks are not specified. 1. Market, price and competition risk The office furniture industry strongly depends on the economic development of the sales markets. Due to the diversification of the business activity on several sales markets, usually the influence of individual markets on the earnings situation of Bene is minor. However, meanwhile, the global economic crisis has reached a level, which negatively impacted all sales market, although in different intensities. The overcapacities of the competitors increased the pressure on prices. On the basis of forward looking indicators, the Bene Management has identified the risk and initiated appropriate measures, mainly the reduction of capacities, also in the production. 3. Procurement risk As every producing company, the Bene Group faces various procurement risks, however none of the risks is of above-average importance. For the procurement risk, it has to be noted that every supplier resp. any technology may be substituted. Bene has concluded long-term supplier cooperation contracts with all A -suppliers. The default risk is determined by supplier assessments so as to identify risks early if necessary. There are price agreements with all suppliers; basically the prices are agreed for one year. Any quantity and/or price deviations are analysed per material group on a monthly basis in cost report discussions between Controlling and Purchasing.

30 30 Status Report 4. Financial risks Payment default risk (credit risk) Due to the large number and diversity of customers and having no significant concentration on few customers, the payment default risk is principally limited. The payment default of a major customer is not existence threatening. Likewise, as a result of the AG s strategic focus on developed European markets, the risk of a delivery to a country with political risk is low. The active management of late payment risk is performed by the assessment of the customer s credit standing prior to the contract conclusion but also through credit limits, delivery blocks, or the agreement of advance invoices, bank guarantees or government export guarantees or guarantees of similar private institutions. This procedure minimises the payment default risk for most of the customers. Interest risk The Management Board considers the risk of changes in interest rates on financial investments and liabilities to be moderate; thus derivative financial instruments for protection against interest rate risks are not applied. About 19.0 % of the interests on the Group s financial liabilities (including bonds) are variable. The bond issued in 2009 in the amount of EUR 40.0 million has a fixed interest rate; if defined balance sheet key figures are not met by the end of the year, interests increase by 200 base points for the past period. This risk, likewise understood as risk of changes in interests is permanently monitored with regard to the agreed parameters and as far as possible, countermeasures against the risk are taken. Liquidity, financing and cash flow risk One of the essential financial risks in tense economic environments is the securing of liquidity and stability of the corporate finance. Bene succeeded in placing a bond in the amount of EUR 40.0 million in spring 2009 with a term until The annual interest charges and the repayment of the bond at final maturity are considered accordingly in the business planning. The daily accumulation of the liquidity situation of all Bene companies is ensured by a central cash management system and guarantees continued transparency, but also a quick availability of liquidity. Liquid funds not needed in the short-term are invested in time deposits. Exchange rate risk The procurement of goods is almost exclusively based on euro. Hence, only outside the euro zone, exchange rate fluctuations have a negative impact on the Group s earnings situation. So as to reduce the exchange rate risk for sales in Russia, the invoicing currency was changed from dollar to euro. The protection against exchange rate fluctuation in the scope of major projects is provided by derivative financial instruments (forward exchange dealings). This may be projects in AED (United Arab Emirates Dirham), GBP (British Pound) or USD (US Dollar). Hedging is exclusively controlled by the Treasury, which is subject to a treasury guideline, so that risks arising from these transactions are clear and transparent resp. are avoided. The protection against further foreign currency risks, primarily concerning the CEE region, is provided by forward dealings in case certain volume thresholds are exceeded.

31 31 Investment risk Currently, investment risks are considered to be low, since Bene mainly invests in time deposits with credit institutions of first-class credit standing. Furthermore, Bene has one single security position with a value of EUR 4.4 million (2008/09: EUR 3.7 million), which is subject to fluctuation risk. Moreover, non-current assets include qualified reinsurance policies for existing pension obligations. 5. Legal risks Extensive legal advice by internal as well as external experts, allows mitigating legal risks. These risks may have for example a tax, contract, rental, competition, patent, cartel or environmental background. In the course of the last two years, Bene has built up an own legal department that also involves external consultants. A group-wide applicable legal policy shall serve all employees to identify, reduce or even to avoid legal risks. B_Cause. Appealing with its clear lines and minimalist style. B_Run. Dynamic, architectural and ergonomic.

32 32 Status Report INTERNAL CONTROL SYSTEM Target of the Bene internal control system ( ICS ) is the preservation of the company assets, the reliability of the accounting and reporting system, the improvement in the efficiency of operational processes and the observance of guidelines or legal provisions. In the context of the ICS, appropriate controls for all major (mainly financial) risks are provided so as to reduce or even to avoid the identified risks. These controls may be carried out on daily, weekly, monthly, quarterly or yearly basis. In the past, the Bene ICS has been established according to the requirements and needs as well as with regard to the corporate strategy, the business volume and other important economic and organisational aspects. The system has been continuously expanded: on the one hand, essential company processes were documented in writing and permanently updated. On the other hand, the number, quality and actuality of written internal rules, standards, working instructions or other agreements have increased. This framework constituted a very good basis for a project launched in 2009 with the target, to meet the requirements of the Corporate Law Amendment Act Based on the existing ICS, all ICS relevant processes were determined systematically, their risks identified and controls were attached. Subsequently, the exact procedure was written down, if not yet available. Furthermore it has been decided how to document the controls. This documentation is required in case of key controls, so that the actual method of control is comprehensible for a third party. Moreover, control owners were nominated and the frequency of the necessary controls was coordinated. Any improvement measures (such as the implementation of missing controls, the creation of missing control documentations or descriptions) were identified and a deadline for completion was agreed with the persons in charge. Structure of the Internal Control System The framework of the Bene ICS follows the COSOmodel (Committee of Sponsoring Organizations of the Treadway Commission). Its purpose is that the Company does not only focus on the existing framework of the organisational structure (organisational chart, signing rules and similar) for the reduction of corporate risks but considers likewise the process organisation. The risks of the essential business and financial processes within the process organisation are identified; controls are implemented, described and documented. Therefore, the Bene ICS includes the following five basic elements: 1. Organisational structure (control environment): It includes the organisational framework implemented and used already for a long time, such as the corporate organisational chart, signing and authorisation concepts, rules of procedure and much more. 2. Process organisation (process documentation): So as to subsequently identify the risks and to establish controls, the written documentation of all processes is an essential basis for an effective ICS. 3. Risk identification and documentation (risk assessment): Eleven processes are identified as ICS relevant processes, that means processes, which have a major impact on the invoicing process: personnel, R&D capitalisation, legal, treasury, procurement, sales, IT, controlling, investments, cost accounting, FSCP (Financial Statement Closing Process). For each of these processes, risks were identified and analysed with regard to their importance. In case of any changes in the ICS relevant processes, or if further processes become relevant to the ICS, these processes have to be considered accordingly.

33 33 4. Performance and documentation of internal controls (control documentation): The performance and the documentation of the required controls is decentralised and lies in the responsibility of the control owner. 5. Monitoring and reporting: The monitoring of the actual realisation and the review of effectiveness of the control is realised centrally in the course of the year by a selected group of people. At least twice a year, the Management reports to the control committee in form of a monitoring report. The process of reporting during the year resp. the annual Group reporting is as follows: The organisational structure of the Group reporting (control environment) consists of the local accounting departments (Austria, Germany, Moscow, London), the external tax consultant firms of those Bene companies that have outsourced their accounting and the Group accounting in Austria, supported by the Controlling. The local companies (resp. their tax consulting firms) compile monthly local financial statements on the basis of the local accounting guidelines and quarterly reconcile to IFRS. These local financial statements reconciled to IFRSs are further processed by the Group Accounting; consolidation and elimination measures are carried out and all necessary data for the consolidated financial statements are compiled and reports are prepared. The quarterly and annual financial statements follow the financial calendar of the Bene Group; the adherence to schedules of the persons responsible is guaranteed by detailed timetables. The essential processes of the preparation of the consolidated financial statements are documented in group-wide applicable accounting and valuation methods; they are annually updated and provided to the local companies in form of the Corporate Manual. In the context of the compilation of the consolidated financial statements, the Group Accounting performs numerous manual and automated plausibility and data quality checks when reconciling the data of the local companies. The ICS relevant controls are described and the controls carried out by the Group Accounting are documented in writing. All these procedures are implemented so as to give a fair picture of the Bene Group s financial and earnings situation in the sense of the IFRSs. This includes the following reports prepared in the context of the group reporting: monthly management report, quarterly report, annual report/financial statements. B_Run. Its design language is restrained, elegant and yet self-confident.

34 34 Status Report INNOVATION AND PRODUCT DEVELOPMENT After several years of major investments in the product development, in the business year 2009/10, the Bene Group primarily focused on the expansion and diversification of existing product lines. With the introduction of new products, Bene has not only impressed its customers and the public, but has likewise further strengthened the own product portfolio. The new products include the P2 Management Program, the b_run office swivel chair, and the b_cause visitor s chair and not least the product range PARCS. With PARCS, Bene takes account for the structural change towards a knowledge society and creates offices, which fulfil the new requirements on modern working processes and at the same time support productivity and motivation. In total, Bene invested around EUR 1.0 million in the development of the new program. PARCS stands for multifunctional and space creating working environments, for communication and concentrated work in the office and includes three typologies: the Causeways, the Toguna and the Wing-series. All elements are flexibly combinable and offer space for various activities. Following the first presentations of the new product line, customers and partners showed great interest. The first PARCS settings have already been delivered to customers in Paris, London and Islamabad. In the business year 2009/10, investments in the product development amounted to about EUR 3.3 million; on the balance sheet date Bene employed 54 people in the product and data development and 4 employees in the seating division. In total, Bene finalised ten development projects: Project 3P: new table and reception panels, matching with the T table range Project K2: complements: upgrade and expansions to the K2 storage system Project Slope: new, additional set of table legs for the T table range Project P2 conference systems: conference tables for the P2 management program Project RV acoustics: addition of sound-absorbing panels to the RV dividing wall Project P2 partner office: P2 executive furniture, specially tailored to the requirements of the English market Project P2 media backboard: backboards with integrated screens resp. wide-angle beamers Project B_run: a new office swivel chair family Project B_cause: a new visitor s chair family Project PARCS: a new, extensive product range of divers furniture for the arrangement of modern transition and meeting areas In the year 2009/10, the activity focus of the innovation and product development division was on the life cycle management (LCM). As part of the life cycle management, all electrical installations (plug connectors, plug boxes with different configurations, network integrations, etc) were converted to a new system and thus a completely universally and modularly configurable standard was created. Meanwhile, almost all furniture is equipped with plugs resp. components of cable management and thus, nearly the overall product range had to be adjusted to the new elements. The second major LCM-activity concerned the sliding systems of the container ranges LT and KT. With new sliding systems, both product lines offer latest technical standard with regard to sliding comfort and functionality. An own internal Bene development team takes care of individual customer requirements. On request, existing furniture is modified or completely new furniture is designed according to customer s requests. Already since mid-2006, Bene develops all products on the basis of a parameterised highly flexible data model and with regard to variability and configurability of furniture plays as leading role in the industry. With its standard features, the T table range offers a very high variance. Furniture is no longer offered in standardised dimensions, but is individually produced according to customer requirements. The systematic implementation of this measure-customisation-philosophy and the possibility of a production batch of a single item lead to the manufacturing of unique individual pieces whereas the production costs remain at the level of standardised mass production. The ongoing improvement and further development of this approach is of particular priority to Bene. In order to keep the technological lead, Bene cooperates with colleges and universities and leading suppliers of appropriate software for the generation and administration of complex distribution and production data records.

35 35 HUMAN RESOURCES On the balance sheet date January 31, 2010, the Bene Group occupied 1,248 employees worldwide. This corresponds to a decrease of 270 employees or 17.8 % in comparison to January 31, 2009 and was resulting from personnel adjustment measures and natural labour turnover. Regionally, 840 people were employed by the AG in Austria (2008/09: 1,057), 187 employees in Germany (2008/09: 232), 41 in London (2008/09: 45), 100 in Moscow (2008/09: 86) and 80 employees in the remaining Bene Companies (2008/09: 98). In the reporting period, the number of female employees within the Group was 417 (2008/09: 532), that of male employees was 831 (2008/09: 986). Human resources management. As essential part of the corporate strategy, the Management Board directly controls the human resources management. The division regards itself as business resp. service partner for the employees and is responsible for the operational cooperation with the division managers and the departments. After years of dynamic organic growth of the Bene Group, the division of Human Resource Management had to face great challenges in the financial year 2009/10. The development work of the past years had to be adapted to the difficult business environment, and at the same time, the strategic prospects of an economic recovery and the possible effects on the personnel management had to be kept in mind. Against the background of the changed economic environment and as part of the comprehensive cost cutting and efficiency increase program, in the second half-year of 2009/10, the Bene Group implemented appropriate personnel adjustment measures in line with the Bene corporate culture and in coordination with the members of Works Council. As of August 01, 2009, the Bene implemented a work-time model, which provides for a reduction in working hours to 80.0 % and a corresponding reduction in salary for all salaried employees in Austria. In addition, since summer 2009 up to 60 industrial employees at the production site in Waidhofen/Ybbs were part of a revolving model of two months termination and reemployment guarantee. In Germany and Switzerland, the system of short-time work was partially used. Recruiting. Personnel marketing. In the last years, Bene could position itself as attractive employer in the market. In the difficult environment of the past business year, this positive image proved to be very helpful in the field of recruiting. The focus of recruiting was on the filling of strategically important key positions. The very successful personnel marketing strategy of the last years, to increasingly focus on the cooperation with national and international technical colleges was further developed in the financial year 2009/10. Moreover, workshops, in the context of this cooperation, with exactly defined target groups proved to be very efficient and beneficial. Well-directed personnel marketing activities will also be initiated in the future, to win over the best-qualified employees and to further strengthen Bene s position as employer. Personnel development. Education and further training. In the past years, Bene performed professional development work in the field of human resources management. Here again, it was important to further continue along our chosen path and at the same time to moderately and prudently respond to the changed circumstances. With Bene Wirkt, an integrated approach of market development, Bene set a group-wide focus in the business year 2009/10. In addition to the related sales initiatives, Bene Wirkt considerably contributed to the education and further training in many other divisions of the organisation. A not insignificant part of resources was invested in the qualification for Bene Wirkt. The executive and management competence program was thoroughly revised and further implemented. Several modules were integrated in a qualification program, which allows the Bene executives enhanced exchange of information with executives of other companies. This likewise included a cost-efficient handling of the program. The Management of the Bene Group considers leadership skills and management competence to be a key and strategic success factor for the Company and thus will continue to support the education and further training of its executives.

36 36 Status Report Also in the past business year, Bene remained highly committed to apprentice training, particularly as it constitutes a central strategic success factor for the medium and long-term personnel planning. At the end of the apprenticeship, the majority of trained apprentices is hired for regular jobs. In the past financial year, on the balance sheet date January 31, 2010, the Bene Group has trained 34 young employees in Austria and Germany to become carpenters, production engineers, ITengineers, engineering draftsmen, industrial clerks, clerks for office communication, wholesale, export and retail with specialisation in office furniture (2008/09: 34). As part of the central Bene educational program, all employees are provided access to training and education measures in the field of basic competence, technical competence, methodological competence, expert competence and personality development. The trainings are held by internal and external trainers. The internal trainer of the Bene trainings centre are of particular importance; on the one hand the internal know-how guarantees the product and application training and additionally, the internal trainers are more flexible and may be booked by the Management for many other subjects and workshops. Hence, Bene ensures a very individual and tailor-made education standard form many company divisions. Again, more than 400 employees participated in the biannual Bene-Fit-Tage and benefited from the opportunity of extensive information about newest products. Administration. Compensation. In the business year 2009/10, the administration was strongly influenced by the centralisation of the human resource department: all agendas of the human resources department in Frankfurt/Germany were integrated in the human resources management in Austria. With this step, synergies shall be used even more and corporate standards shall be implemented more efficiently. Corporate culture. Within the Bene Group, the initiative and the commitment of the employees are of important significance. In this context, it is of essential concern to the members of the management team, to always readily listen to the employees. A faithful and open communication constitutes a key element of the corporate culture and thus of the Bene spirit. Likewise, the Management strives for the integration and development of internationally acting employees and the further improvement of a positive corporate culture, which stands for customer orientation and responsible acting in line with strategies and targets. The strong and established corporate culture not only supported the necessary structural changes, but also particularly ensured the achieved saving potentials of the part-time model, in good understanding with the Works Council and the employees. The Management feels committed to preserve the Bene corporate culture. Summary. The Bene Group is well positioned with regard to its human resources management, not least due to the future oriented development work of the last years. All necessary strategic and organisational measures were taken so as to implement a responsible, entrepreneurial and target oriented personnel policy in economically difficult times, but also to guarantee further growth of the Company from the strategic perspective of an economic recovery.

37 37 SUSTAINABILITY Bene has always taken seriously its responsibility for the environment. Beside Bene s pioneering role in the responsible environmental management, ecology is defined as key element of the corporate strategy. In the context of its business activities, the office furniture supplier is well concerned about the sustainable protection of water, soil and air and the sparing use of raw materials and energy. This approach is implemented in all company divisions starting from product development, procurement, production and logistics up to product recycling. But likewise the support and the planning of measures for the improvement of the environmental situation count among the activities in environmental protection. In this sense, within the Group, Bene strives for a better and sustainable protection of the environment and considers the legal provisions to be the minimum requirements. Environmental policy. Implemented in 1987, Bene s principle of the environmental policy is: avoiding reducing recycling disposal. Thus, environmental policy starts with the choice of raw materials. Bene processes only environmentally friendly materials and avoids dangerous waste. With a share of about 60.0 %, Bene gives the natural material wood a special importance. Furthermore, Bene exclusively uses class E1 fine chipboards low in formaldehyde, which are produced according to the FSC and/or PEFC standards. Bene was certified by the HolzCert Austria in accordance with the Chain Of Custody Standard PEFC. With the on-site assembly of the products, Bene additionally contributes to environmental protection. In the past business year, Bene was certified according to the British FISP standard (Furniture Industry Sustainability Programme) and selected Bene products were further certified according to national and international ecological standards (such as Blue Angel). Production. After the expansion of the production site Waidhofen/ Ybbs to 42,000 m², nowadays, Bene has one of the most modern and efficient production plants of the European office furniture industry. With CompactFactory, a madeto-order just-in-time production with consistent data structure, the manufacturing follows the pull principle without production and dispatch stock. To save resources and to optimally use the residual panels, the cutting of blank panels is optimised by computer. About 90.0 % of the wood panel waste is returned and thus is reused in the production process. The remaining 10.0 % are used as combustible for heat generation (heating of the production and the office premises). For gluing, exclusively class E1 glues low in formaldehyde are applied. In the year 1998, the painting process was changed to water-soluble, UV-curing lacquers and coatings with lacquer recovery of more than 95.0 %. A finishing procedure, not only achieving highest quality of veneer surfaces, but also reducing the emission values well below the required standard value for VOC (volatile organic compounds; solvents). As a result of the conversion to water-based coatings, Bene saves about 90.0 % of solvents. This corresponds to an annual quantity of roughly 25 tons. Bene also benefits from the waste heat of the air compressors by reusing them in the paint shop for the heating of the drying installation and thus reduces the consumption of combustibles. Disposal. Already in the phase of the product design and engineering, particular importance is attached to easy disassembly of all Bene products. 100 % of the Bene table and storage product lines may be completely taken apart and thus may be sorted and recycled by material types. Carbon footprint. More than half of all materials used within Bene are CO 2 neutral. In the future, among other aspects, Bene will focus on the further increase in recycling of steel, glass, plastics, aluminium etc. so as to further reduce the footprint. The carbon footprint of the AG for the financial year 2009/10 is as follows: Production Traffic Electricity Recycling Materials Total 321 t CO 2 -Equ. 2,073 t CO 2 -Equ. 3,176 t CO 2 -Equ. -1,353 t CO 2 -Equ. 25,026 t CO 2 -Equ. 29,243 t CO 2 -Equ. The careful dealing with the resources to actively and sustainably contribute to environmental protection will remain of important concern to the Bene Group in the future.

38 38 SEGMENT REPORTING The segmentation of the Bene Group is based on regional aspects and is split into the segments Austria, Germany, UK, Russia and other markets. At its only production site in Waidhofen /Ybbs, the Bene Group produces office furniture and office dividing walls. Furthermore, the assembly and the dispatch of a major part of the Group s trade goods are performed at the site in Waidhhofen. SEGMENT AUSTRIA Organisational structure. The production site Waidhofen/Ybbs, the innovation and product development division, the Group s administration as well as the Austrian points of sale are included in the Austria segment. As for all other segments, direct sales play an important role in the strategic orientation. The complete Bene product portfolio is distributed by eight points of sale, whereas the Vienna site essentially contributes to sales and earnings. At the reference date January 31, 2010, in total 840 persons (459 white-collar workers and 381 blue-collar workers) were employed at nine locations. Economic environment. With its export-oriented industry, in the fourth quarter of 2009, Austria could benefit from the recovery of the world trade. Private consumption once again proved to be a backbone in times of crisis. However, compared to the previous year, Austria recorded a decline in the GDP of 3.7 %, which corresponded to one of the sharpest decreases in GDP per capita since the 1950s. Although, Austrian companies still act reserved with regard to investments, first upward trends are an indication that the economy has passed rock bottom of the investment cycle. The Austrian labour market was hit by the most severe slump since more than 60 years, caused by the financial and economic crisis. This reflected in a decline in employment and in a significant increase in unemployment. Experts still expect an increasing unemployment rate for the year Sources: WIFO, RZB, WKO Industry development. In the business year 2009/10, the Austrian office furniture industry had to face most divers requirements from the customers. On the one hand, there is a very high quality demand for representative areas, whereas high cost awareness dominated the standard segment. Bene meets this challenge with an enhanced product and service portfolio in order to best fulfil the requirements on modern working environments. Increasingly, companies recognise the importance to live their corporate culture and to give both, an inward and outward statement. Offices become living spaces following the needs of people. Against this background, a stronger demand for informal meeting areas to support cross-functional cooperation can be noticed. Bene market profile. With a market share of about 26.0 %, in the past business year, Bene was clear market leader in its home market Austria and successfully covered all major customer segments. Particularly in the project business, Bene has not only to face national but also increasingly international competitors. In this competitive environment, Bene scores with first class service in advice, planning, realisation, service and logistics which are offered in cooperation with the Bene CompFactory in Waidhofen/ Ybbs and the eight points of sale in Austria. In this sense, Bene jointly with customers and partners designs offices based on the requirements of companies, where people enjoy working. Business performance. Compared to the reference period of the previous year, sales of the Austria segment dropped by 30.3 % to EUR 53.5 million in the business year 2009/10. Despite the difficult market environment, Bene could successfully realise several major projects for renowned companies such as Generali Versicherungen, Ferro Montage Technik or Voest Alpine Stahl. In the current year 2009/10, other great projects were implemented in the context of the agreement with the Bundesbeschaffung GMBH. Despite the decrease in sales, the Bene Group could not least due to the strengthening of the own product portfolio maintain stable gross profit margins (contribution margins). At the same time, administrative costs for the production, development and holding site Waidhofen/Ybbs were further reduced through extensive personnel and material cost cutting actions. As part of comprehensive capacity adjustment measures, since August 2009, all employees in Austria work in a specially developed part-time model. Additionally, Bene has

39 39 adjusted the production capacities in Waidhofen/Ybbs to the changed utilisation by the reduction of contract workers and the implementation of suspension contracts with a guarantee for reemployment of industrial workers. Non-recurring costs for restructuring measures and the conservative realistic evaluation of current assets resulted in additional charges to the EBIT, which in the year under review amounted to EUR -5.3 million (2008/09: EUR 1.0 million ). Outlook. For the year 2010, a sustainable recovery of the economy cannot yet be expected. Forecasts assume a GDP-growth of 1.1 % in Austria in the year The private consumption, which is supported by state measures, might come under pressure due to the projected unemployment rates, the expiry of government aid measures and possible tax increases or cutbacks in social security spending. Sources: WIFO, RZB, WKO PARCS. CAUSEWAYS. Different heights encourage users to assume one of three different postures: sitting, standing or leaning.

40 40 SEGMENT REPORTING SEGMENT GERMANY Organisational structure. The Bene Group successfully entered the German market in the year 1987 with an own direct sales branch. In 1998, Bene took over the Objektform-Gruppe back then the largest national office furniture dealer in Germany. In the course of sustainable restructuring and a strategic reorganisation it was renamed into Bene Deutschland in the business year 2007/08. As of the balance sheet date January 31, 2010, the Germany segment included 13 own sites with 187 employees. Thus, the Bene is present with own and strong distribution branches in all major economic German metropolitan areas. In the few regions, where Bene is not yet present with own points of sales, products and services are distributed by selected specialist dealers. Economic environment. The economic development in Germany is still fragile. After an obvious turnaround in the third quarter of 2009, the recovery of the economy slowed down, the real gross domestic product stagnated in the fourth quarter. The environmental incentives for scrapping old cars has stabilised the private consumption substantially in Subsequently, private consumption in Germany slightly increased by 0.4 % compared to the year If there had not been the boost in the purchase of cars, in absolute terms, private consumption would have dropped by 0.5 %. According to the Deutsche Bank, Germany recorded a GDP decline of 4.9 % in total in the year Source: Deutsche Bank Industry development. After years of steady growth of the German office furniture industry, the phase of increase came to a temporary end towards the end of the first quarter of In line with the developments of the global economy, many companies have abruptly stopped the planned investments in new office buildings and revitalisations. This is likewise shown in the development of surface turnover of the real estate industry, where sales fell by 30.0 % on average in the year The Management expects a difficult year for The over capacities of the suppliers will lead to fierce competition for market shares and thus prices will come under severe pressure. Furthermore, in such economic phases, companies tend to decide in favour of products from low price suppliers. Bene market profile. In the last years, the Bene Group achieved steady growth rates in Germany, which were basically resulting from the expansion of the own distribution sites and the existing structure. Besides the geographical diversification, nowadays, Bene is positively perceived by architects and decision makers and has well positioned itself in this important environment. Bene intends to develop new segments with new products and thus to further improve its position in the existing market environment. The market introduction of PARCS, the new innovative system for the furnishing of transition areas shall provide appropriate support. The Orgatec, the European leading trade fair will be a fixed date for Bene in October; the Management expects additional positive momentum for the business year 2010/11 from Bene s participation in the exhibition. Business performance. In the business year 2009/10, sales of the Germany segment decreased by 27.7 % to EUR 50.9 million (2008/09 EUR 70.5 million). As a result of the difficult market environment, almost all sales regions and locations of the Germany segment suffered from reductions in sales compared to the prior year. However, the Hanover and Cologne site increased sales in comparison to the previous year due to a good order situation for major projects. In addition to numerous other projects, the Bene Group realised other interesting largescale projects for VHV Versicherungen (Hanover area), Sparkassen Versicherung (Frankfurt area) and Santander Consumer Bank (Essen/Düsseldorf area). Despite the partly considerable drop in sale, the Germany segment succeeded in maintaining the gross profit margins at the previous year s level by increasing

41 41 the share in own products and by the targeted promotion of profitable product groups. In the same period, the Bene Group further pursued the cost cutting program initiated in the business year 2008/09. With the closure of the location in Bonn and the transfer of the employees to other locations, Bene could reduce the fixed and structural costs and preserve the sales strength. Outlook. The International Monetary Fund considerably revised upwards its growth expectations for Germany. Initially, an economic growth of about 0.3 % was predicted; now the IMF expects an increase of the economic performance by 1.5 % for the year For the year 2011, The IMF forecasts an economic growth of up to 1.9 %. Likewise in the Germany segment, EBIT decreased due to the ongoing weak demand of the past business year. In order to counteract the decline, the Bene Group focused on hiring freeze, the use of natural attrition and non personnel cost savings. Since the beginning of the second quarter of 2009/10, Bene implemented shorttime work at selected sites in Germany. As in the Austria segment, additional non-recurring costs for restructuring measures and the conservative valuation of assets led to additional EBIT charges; the EBIT for the Germany segment recorded a loss in the amount of EUR -3.4 million (2008/09: EUR 1.1 million). This development means interesting and challenging conditions for the Bene Group. That is why Bene plans to benefit from these growth opportunities with its innovative product portfolio and the qualified and motivated employees. Sources: IMF, Deutsche Bank, Statistisches Bundesamt PARCS. AMERICAN DINER. Two Wing Sofas are sociably positioned opposite from one another.

42 42 SEGMENT REPORTING SEGMENT UK Organisational structure. Since more than 20 years, the Bene Group is represented by an own sales organisation in the UK. The focus of the business activities is on the greater London area. Here, Bene particularly attracts the important target group of architects, who with their requirements with regard to formal and commercial aspects set market standards. Bene convinces this target group with an integrated solution approach and trend-setting design. As of the balance sheet date January 31, 2010, the Bene Group employed 41 people in the UK segment. Economic environment. Although Great Britain s economy recorded a decrease in the gross domestic product of 4.8 % compared to the previous year, in the fourth quarter of 2009, the GDP increased by 0.5 % in comparison with the prior quarter. Pursuant to the Office for National Statistics, this is at least the successful step out of the recession. According to the figures, mainly the service and production industry contributed to this growth. Furthermore, an increase in the private consumption was observed. After Germany, France, the USA and Japan, Great Britain is thus the last major industrial country to report a growth. Sources: Deutsche Bank, Office for National Statistics Industry development. London, as most important financial market in Europe, has always immediately reflected fluctuations of the economic development. In the last years, sales of the office furniture market showed a rather flat growth curve, whereas in the year 2009 a downward trend was recognised. However, since mid-2009, a certain bottoming out can be observed and the Bene Group expects a stabilisation for 2010 and possibly a slight recovery. The requirements of the metropolis London significantly deviate from those of other European countries. This is mainly resulting from a strong architecture and interior design community, which is responsible for the design of new working environments. Furthermore, with regard to the professional management of existing office surfaces, the market is very well developed. Bene market profile. Also in the current year, the Bene Group plans to further expand its position on the important UK market with the introduction of new products. Especially the innovative product line PARCS, which was developed in cooperation with the London design office PearsonLloyd shall give new impetus to the design oriented UK market. Business performance. In the UK segment, due to the continuing weak investment climate Bene had to report declines in the business year 2009/10. In the year under review, sales dropped by 26.5 % to EUR 15.8 million (2008/09: EUR 21.5 million). Despite the tense environment, Bene succeed in realising projects with renowned customers such Nottingham University and Gallaher in the past business year. The cost and efficiency optimisation measures already initiated in the financial year 2008/09 could not compensate the negative impacts of the decrease in sales of 26.5 %, thus compared to the prior year, the EBIT dropped by EUR 3.2 million to EUR -1.2 million (2008/09: EUR 2.0 million).

43 43 Outlook. According to publications of the Office for National Statistics, the step out of the recession does not necessarily mean that Great Britain has overcome the crisis. For the current year, the Deutsche Bank assumes a GDP increase of 1.5 %, in the following year 2011, the GDP is expected to grow by 2.5 %. Sources: Deutsche Bank, Office for National Statistics PARCS. TOGUNA. A visual highlight in any office.

44 44 SEGMENT REPORTING SEGMENT RUSSIA Organisational structure. In Russia, Bene plays a pioneering role: as first office furniture supplier, the Group recognised and benefited from the opportunities in Russia and particularly in Moscow. About 20 years ago, Bene started its business activities in the Russian capital and since then has established itself as one of the most prestigious and successful international office furniture suppliers. Already in the business year 2008/09, with the foundation of the RUS OOO, a further step in the expansion of the sales activities throughout Russia was set and in 2009/10 a sales representation was opened in St. Petersburg to better reach the second largest local market in Russia. With the integration of employees of external logistics partners, in the current reporting period, Bene succeeded in a further step to strengthen the value chain and the service quality. In the year under review, a number of activities to increase the delivery and assembly quality, targeted customer advisory service and process optimisation and automation processes were initiated and successfully implemented. As of the balance sheet date, January 31, 2010, the Bene Group had 100 employees in Russia. Economic environment. According to figures of the Deutsche Bank, the Russian gross domestic product decreased by 7.9 % in the year Initially, Russian authorities expected a drop in GDP of 8.5 %. As stated by the Russian Office of Statistics Rossat, the service industry with a decrease of 18.3 %, the construction industry with losses of up to 16.4 % and the hotel and restaurant business with a minus of 15.4 % were hit most. Contrary, the public administration, the military and social services recorded a growth of about 3.2 %. Sources: IMF, Ria Novosti, Rosstat, Deutsche Bank Industry development. In the business year 2009/10, the strengthening of the regions still continued, although slightly weakened. Only a few years ago, Moscow used to be the focus, whereas nowadays cities such as St. Petersburg, Yekaterinburg or Kazan are important starting points for Bene s activities. The customer portfolio consists of national as well as international companies. Similar to all Bene markets, the competition has reached an international level, which is still intensified by national companies. Particularly in the changing economic situation, the Bene Group benefits from its long-time presence in Russia, combined with extensive market knowledge and experience. Compared to other European countries, the product mix is relatively balanced in Russia. This means that a fullrange supplier as Bene, offering a qualitatively convincing value chain from the planning over the office furniture up to logistics and assembly is well positioned for success. Bene market profile. Against the background of a dynamic development in Eastern Europe and particularly in Russia, in the past, many international companies have developed their presence in Russia resp. have started activities in this important market. Due to its early market entry, the Bene Group can benefit from clear competitive advantages. The fast-paced development of Russia, however also resulted in a very competitive market environment for all major customer projects. With a strong customer orientation, extensive local experience and a clearly structured product portfolio, Bene is well prepared for this competition. A continuous and sustainable service for all customer segments and early recognition of the target group of decision makers and architects are a central factor and element of the business strategy. Further, the performance of complete, reliable and high quality delivery and assembly logistics, both in Moscow and also in other urban agglomerations are of increasing importance to the customer.

45 45 Business performance. In the Russia segment, the positive trend of the previous years has not continued in the business year 2009/10 and thus compared to the historical record value of the previous year, sales fell by % to EUR 23.6 million (2008/09 EUR 39.8 million). Despite the dramatic decline in sales, Bene could slightly absorb the impact in Russia due to the highly variable compensation model and the consistent reduction of non personnel costs. The EBIT amounted to EUR -1.4 million (2008/09 EUR 3.5 million). Outlook. The International Monetary Fund has revised upwards its forecast for the growth of the Russian gross domestic product in 2010 by 2.1 percentage points to 3.6 %. In contrast, the world economy is expected to increase by 3.9 %. So far, the IMF assumed a rise of 3.1 %. Likewise, in January the European Bank for Reconstruction and Development (EBRD) has revised upwards its outlook for the growth of the Russian GDP in 2010 from 3.1 % to 3.9 %. In 2011, the growth is expected to slow down to 3.0 %. Sources: IMF, Ria Novosti PARCS. IDEA WALL. Screen for information and a dividing element with spatial quality.

46 46 SEGMENT REPORTING SEGMENT OTHER MARKETS Organisational structure. The segment other markets includes those markets in Western and Eastern Europe, where Bene has already been active since the 1980s and the Middle East and Asia. Important markets of the segment are particularly the Middle East and the markets in Central and Eastern Europe (CEE), where Bene successively started its activities already in the 90s. In the Middle East, Bene is currently represented by an own sales organisation in Dubai, a long-standing partner in Kuwait and since the business year 2009/10 by new partners in Qatar, Egypt and Australia. In CEE, Bene is the only European office furniture company with an extensive own direct sales net with a total of eight showrooms, where customers may experience the living space. Despite the difficult situation in the CEE, in the business year 2009/10, Bene moved to new sites in Prague (Czechia) and Ljubljana (Slovenia). With the opening of the showroom in 2008 in Singapore and an own sales team, Bene started its activities in Asia outside Japan. In addition to the local market, this office will support partners with own showrooms in Hong Kong, Japan and since 2009 also in Korea. The most important strategic expansion in the business year 2009/10 was the foundation of an official partnership with an Indian partner with four locations and with whom Bene has already implemented numerous joint projects in the past years. In Western Europe, Bene focuses on the expansion of activities in the existing markets Switzerland, France, Belgium and Holland. In line with its direct sales strategy, Bene has an own showroom in Zürich/Wallisellen to serve the Swiss market. Due to its long-standing presence in Switzerland, Bene benefits from a high level of brand awareness and is well known by marketing agents, architects and customers as supplier of high quality products. Bene has a broad customer portfolio in Switzerland and for example counts the Credit Suisse among its customers. Since the takeover of the former specialist dealer Office Technology in 2007, Bene has a direct sales organisation with own showroom in Brussels /Zaventem. In the Netherlands, Bene runs a showroom in the famous Van Nelle Factory in Rotterdam. Jointly with the specialist dealer Eckgart, Bene serves the Dutch market. In France, Bene is represented by selected specialist dealers, who are supported by a Bene specialist team. The main activities are provided together with the specialist dealer Silvera in Paris. Bene works in a close strategic partnership with Silvera and the Bene team is located at their premises. The French provinces are served by local specialist dealers such as in Toulouse, Lille, and Montpellier. With the acquisition of three specialist dealers in the past business year, Bene succeeded in entering the Italian market. Projects with a volume of EUR 0.5 million were already acquired and implemented. The outlook for 2010 is positive since many measures implemented with the sales partners in 2009 will show effects in As of the balance sheet date January 31, 2010, the other markets segment occupied 80 employees in total.

47 47 Economic environment. The recession in Eastern Europe was deeper than previously assumed. The Baltic States and Hungary were most hit. In Latvia, the gross domestic product (GDP) collapsed by 19.0 % in the year A severe cost-cutting program in Hungary shall lead to stagnation in the year 2010, after the drop in GDP by 6.5 % in the last year. Likewise, the investment activities of Austrian companies in Central and Eastern Europe (CEE) decreased drastically in the past year. So far, the investment activity was mainly supported by participations of Austrian banks and insurances in Eastern Europe, the retail industry and corporate services. As a result of the crisis, investments have already lost momentum in the course of the year 2008 and completely collapsed in the year The future economic development of the CEE-region will depend strongly on the events of the world economy, which still will be affected by major uncertainties. Moreover, the euro zone as most important trade partner is itself under pressure, since almost all member countries do not meet the EU-Maastricht criteria, which again has an effect on the growth potential of the CEEcountries. In the year 2009, the global financial and economic crisis led also to serious declines in GDP in the United Arab Emirates. However, the Government in Abu Dhabi has to a large extent successfully absorbed decreasing oil export revenues and liquidity shortages by state interventions and fiscal measures in the money market as well as by a huge financial cushion from previous years. Source: WIIW (Wiener Institut für Internationale Wirtschaftsvergleiche) Industry development. The segment other markets is mainly characterised by the project business, and thus the global economic situation was most noticeable there. In the Middle East, the economic change became apparent by the shifting of the concentration from Dubai to the other Emirates, but also to other countries in the region. Bene has reacted in time to the changing environment and thus has contributed to a clearly stabilising effect in these markets. Particularly in CEE, a sharp drop in investments of international companies was observed. The consequence was a successive disappearance of local dealers from the market and the strong polarisation with regard to product requirements. Nevertheless, Bene is convinced of the medium-term importance of these markets for a European supplier. In Asia, Bene recognises already first signs of recovery of the office furniture industry. This shows the affinity of those markets to European design and the quality requirements in the high-end segment. Likewise, the observed quality requirements from projects on the Indian market are encouraging. The Swiss market is dominated by domestic suppliers; only few international producers are represented. Change becomes evident as a result of the increasing internationalisation and the opening of Switzerland towards the EU-countries. Many, particularly German companies, recognise Switzerland as a target market. In Belgium, Bene used to focus on the financial services sector in Brussels. Belgium has a very limited number of local suppliers; in contrast, almost all international suppliers are strongly represented in Belgium and serve mainly the authorities, which has a negative impact on the price level. The Dutch market is characterised by strong domestic brands such as Ahrend and Aspa. Bene has positioned itself as niche provider in the superior segment and supported by the organisation of the Bene NL, serves especially international customers resp. their local subsidiaries.

48 48 SEGMENT REPORTING Bene market profile. Whereas the Bene acts primarily in the business to customer with international companies in the CEEcountries, in the Middle East, the focus of the office furniture supplier is clearly on high-quality large-scale projects with the prime target group of architects. In Asia, on the contrary, the cooperation with architects plays only an important role in executive furnishing. In the Western European markets, Bene is active in both, the business to customers of local and internationally operating companies and in the high-level business of large-scale projects. Business performance. Compared to the historical record year 2008/09, sales of the other markets segment decreased by 37.6 % to EUR 35.4 million (2008/09: EUR 56.8 million) in the business year 2009/10. The individual sales regions reported quite different trends in the sales development compared to the prior year, such as France with %, Belgium -2.0 %, Middle East % or Poland %. As already in previous years, major projects for customers such as Emirates Nuclear Energy or Dubai Chamber of Commerce were realised in the Middle East region. In France, Bene implemented an innovative reference project for the customer Bouygues Telecom SA. Outlook. According to the Wiener Institut für Internationale Wirtschaftsvergleiche (WIIW) (Vienna Institute for International Economic Studies) Central and Eastern Europe (CEE) have passed the bottom of the crisis at the end of Economic researchers expect a stagnation of the region for 2010; growth is expected to pick up in 2012 however at a lower level than prior to the crisis. Subsequently a lead in growth of two percentage points of the CEE-countries over Western Europe is assumed. As expected, the crisis has also aggravated the situation on the employment markets in the region. Particularly less qualified labour, which could also not benefit from the boom between 2002 and 2007 suffer thereof. Thus, the unemployment rate in the ten new EU-member countries will presumably increase from 6.5 % in the year 2008 to slightly over 10.0 % in the year Economic researchers expect an easing of the situation only with the restart of economic growth as of In total, the drop in sales of % in the other markets segment led to a deterioration in the EBIT by EUR -6.5 million to EUR -2.8 million in comparison to the historical record figures of the preceding period (2008/09: EUR 3.7 million).

49 49 Also for the United Arab Emirates, there are visible signs of recovery, including growing economic activity in the private sector, increasing liquidity in the banking sector and continued high project expenses in the non-oil sector and in the overall public sector. The temporary slow down in growth had a positive impact on the development of the temporarily very high inflation rate. At the beginning of 2010, it amounts to only about 3.0 % to 4.0 %. Despite the slightly negative balance of payments, experts consider the temporary economic bottom in the UAE as already overcome. Stable oil prices on the world market remain an important prerequisite for the progress of the upswing. The Emirate Dubai, which has no own oil reserves, is hit harder by the global economic and financial crisis; in November 2009 Dubai had to suspend debt repayments for a short time. Source: WIIW (Wiener Institut für Internationale Wirtschaftsvergleiche) PARCS. TABLES. A collection of practical work and side tables.

50 50 SEGMENT REPORTING GROUP OUTLOOK As late cyclical, the Bene group is hit by both, positive and negative developments only at a late stage. Towards the beginning of the third quarter of 2009/10, Bene experienced a slight stabilisation in demand, although at a low level. Due to the still prevailing general uncertainty in the markets, the Management of the Bene Group cannot make any reliable estimation about a possible bottoming out in the relevant markets. For the financial year 2010/11, the Management of the Bene Group makes a very conservative estimate, since the visibility on the markets remains very limited and a volatile situation and development are still to be assumed. When and to what extent an economic upturn might be expected, cannot be answered reliably from today s point of view. Therefore, the Management Board expects, that the Bene Group will report a negative result for the financial year 2010/11. The Bene Group starts from a strong market position into the year 2010/11 and with its broad geographic spread, the strategic right positioning in the growth markets and the market proximity through the strong direct sales net, Bene offers key assets and clear competitive advantages. The financial structure was sustainably strengthened by the proceeds from the issue of the corporate bond the Bene Group may use it for the consolidation of the market position or the expansion through acquisitions. On the basis of existing capacities, the Bene Group has a great organic growth potential to exploit as soon as the markets recover. In case of a recovery, the Bene Group should be able to realise a significant growth in earnings. Particularly against the background of the introduction of profitable products in the last year.

51 51 SUBSEQUENT EVENTS SUBSEQUENT EVENTS We refer to the notes to the consolidated financial statements of the AG as of January 31, Waidhofen/Ybbs, April 23, 2010 Frank Wiegmann Thomas Bene Roland Marouschek PARCS. The design is comfortable and yet decidedly modern.

52 52 CORPORATE GOVERNANCE REPORT The Austrian Corporate Governance Code (ÖCGK) published in October 2002 primarily addresses Austrian stock listed public companies. The framework of the Code are the provisions of the Austrian Stock Corporation Law, the Stock Exchange Law and the Capital Market Law, the EU-Recommendations regarding the responsibilities of the Supervisory Board members and the compensation of Directors as well as the principles of the OECD Guidelines for Corporate Governance. The ÖCGK supports Austrian companies with a set of rules for the company management and supervision. The goal of the Code is to pursue a responsible, sustainable and long-term value creating management and supervision of companies and corporations. The code shall provide higher transparency for the shareholders of the company and becomes effective by voluntary self-commitment of companies. In the course of the IPO, the Management Board was concerned with the Austrian Corporate Governance Code and has approved the required amendments of the rules of procedure of the Supervisory Board and the Management Board as well as the necessary modifications of the statutes. The AG undertakes to comply with the Corporate Governance Code in the version of January The Code is available and publicly accessible on the homepage of the working group Arbeitskreis für Corporate Governance in Österreich under www. corporate-governance.at. Categories of rules of the Austrian Corporate Governance Code: The Austrian Corporate Governance Code comprises the following three categories of rules: L-Rules (Legal Requirement): refer to mandatory legal requirements. C-Rules (Comply or Explain): are to be followed; any deviation must be explained and the reasons stated. R-Rules (Recommendation): the nature of these rules is a recommendation; non-compliance requires neither disclosure nor explanation. Beyond the mandatory L-Rules (Legal Requirement), the AG complies with all C-Rules (Comply or Explain) of the ÖCGK with the following exception: C-Rule 18 Due to the size of the Company and for economic reasons, it is not considered necessary to install an internal audit as separate staff unit of the Management Board or to contract out the function to a competent institution. C-Rules 30/31/51 The AG is of the opinion that the individual disclosure of the remuneration of the members of the Management Board resp. the compensation of the Supervisory Board does not provide any relevant information to the shareholders or other stakeholders and thus does not give any additional insights with regard to economic aspects. Composition of the Management Board pursuant to article 243b (2) of the Austrian Commercial Code: Name Frank Wiegmann Chairman of the Management Board Finance & Technology Thomas Bene Member of the Management Board Marketing & Portfolio Roland Marouschek Member of the Management Board Sales & Human Resources First Year of birth appointment 1957 Oct. 30, Feb. 01, Oct. 30, 2004 The Members of the Management Board of the AG have no other mandates in management or supervisory boards outside the Bene Group. Composition of the Supervisory Board pursuant to article 243b (2) of the Austrian Commercial Code: Name Year of birth First appointment Manfred Bene Chairman of the Supervisory Board 1941 Feb. 01, 2006 Norbert Zimmermann Deputy Chairman of the Supervisory Board 1947 June 06, 2007 Karl Sevelda Member of the Supervisory Board Richard Wolf Member of the Supervisory Board Martin Hönickl Appointed by the Works Council August Hager Appointed by the Works Council 1950 Sept. 08, June 06, June 05, Sept. 28, 2001

53 53 The Supervisory Board of the AG meets four times a year and with regard to the criteria of independence is guided by the guidelines stipulated in the annex 1 of the Corporate Governance Code. Pursuant to these guidelines, all members of the Supervisory Board of the AG are regarded to be independent, with the exception of Manfred Bene. Committees of the Supervisory Board of the AG: The Supervisory Board establishes an audit committee, with at least one financial expert. Someone who has been member of the Management Board or executive or auditor of the annual accounts of the Company during the last three years or someone who has signed the auditor s report must not be chairman of the audit committee or financial expert. The audit committee of the Supervisory Board of the AG consists of Norbert Zimmermann as Chairman, Richard Wolf as Deputy Chairman and Manfred Bene. The Supervisory Board establishes a personnel committee, which takes over the responsibilities of a nomination committee and the compensation committee. The personnel committee submits proposals for the filling of vacancies in the Management Board to the Supervisory Board and deals with succession planning, with issues concerning the remuneration of the members of the Management Board as well as with the content of employment contracts of Management Board members and submits proposals for the filling of vacancies in the Supervisory Board to the General Meeting. The Personnel committee consists of the Chairman and the Deputy Chairman of the Supervisory Board. Other Supervisory Board memberships in Austrian and foreign listed companies: Other Supervisory Board Name memberships Manfred Bene Buy-Out Central Europe II Norbert Zimmermann Schoeller Bleckmann Oilfield Equipment AG Berndorf AG Berndorf Immobilien AG Delta AG tecnet equity Technologiebeteiligungs-Invest AG OMV AG Oberbank Allianz Elementar- Versicherungs AG Siemens Österreich AG Gebr. Weiss Gmbh Karl Sevelda Raiffeisen International Bank-Holding AG * ) Raiffeisen Investment AG * ) RZB Private Equity Holding AG * ) Raiffeisen Centrobank AG * ) Raiffeisen Factor Bank AG * ) Rail Cargo Austria AG HFA Zwei Mittelstandsfinanzierungs-AG *) Mandates not considered due to corporate ties or due to participations of the RZB pursuant to article 86 (3) of the Austrian Stock Corporation Act. Richard Wolf Martin Hönickl August Hager ASSET ONE Immobilienentwicklungs AG None None

54 54 REPORT OF THE SUPERVISORY BOARD In the business year 2009/10, the Supervisory Board has performed its duties under law and statutes. Four meetings attended by the Management Board took place on February 25, on May 07, on September 23 and on December 11. Furthermore, the Management Board has reported to the Supervisory Board continuously in writing and verbally about the course of the business and the Company s and its subsidiaries situation. Beyond the meetings of the Supervisory Board, the Chairman of the Supervisory Board was in regular contact with the Chairman of the Management Board and discussed the strategy, business performance and the risk situation of the Company. The effects of the global financial and economic crisis hit the Bene Group stronger than still expected at the beginning of Against this background, securing liquidity was of first priority. The Management Board s major focus was on the medium and long-term financing of the Group and the adjustment of structures to the weak market environment. With this package of measures, fixed costs were saved on a large scale, active working capital management was pursued and investments were cut down. In addition to the current development, the Supervisory Board dealt particularly with the strategy of the Bene Group and the consistent medium-term implementation. The focus of discussion was the strategic orientation and the further development of the Group. Due to the still high equity ratio of 31.7 %, the positive operating cash flow of EUR 7.4 million and the net gearing of 24.6 %, the Supervisory Board still considers the financial situation to be solid and positively supports the continuation of the general corporate strategy. that the accounting, the annual financial statements and the status report comply with the legal regulations and that the provisions of the statutes were observed. After the final conclusions, the audit did not give grounds for any objection and the financial year 2009/10 was given an unqualified audit certificate. This audit certificate likewise applies to the consolidated financial statements. The consolidated financial statements in accordance with IFRSs have been complemented by the Group s status report and further explanations pursuant to article 245a of the Austrian Commercial Code. The Supervisory Board approves the annual financial statements as of January 31, 2010 and the status report as well as the corporate governance report for the business year 2009/10. Thus, in accordance with article 96 (4) of the Austrian Stock Corporation Act, the annual financial statements 2009/10 of the AG are approved. The Supervisory Board gives its consent to the consolidated financial statements compiled in compliance with article 244 et seq. of the Austrian Commercial Code in combination with article 245a of the Austrian Commercial Code according to the International Financial Reporting Standards (IFRSs) applicable in the European Union and to the consolidated status report. The Supervisory Board has examined and approved the Management Board s proposal to the General Meeting, not to distribute any dividend due to the losses suffered. The Supervisory Board would like to thank all members of the Management Board and all employees of the Bene Group for their outstanding commitment in a very difficult market environment characterised by the global financial and economic crisis. The annual financial statements of the AG as of January 31, 2010 and the status report including the accounting were audited by Ernst & Young Wirtschaftprüfungsgesellschaft mbh in Vienna. The audit concluded Waidhofen/Ybbs, May 2010 Manfred Bene Chairman of the Supervisory Board of the AG

55 55 CONSOLIDATED FINANCIAL STATEMENTS AS OF JANUARY 31, Consolidated balance sheet 57 Consolidated income statement 58 Consolidated statement of comprehensive income 58 Consolidated statement of changes in equity 59 Consolidated cash flow statement 60 Notes to the consolidated financial statements 60 Company Information 61 Principles of accounting, financial reporting and valuation methods 77 Acquisitions and change of minority interests 78 Notes to the consolidated balance sheet 104 Notes to the consolidated income statement 108 Notes to the consolidated cash flow statement 109 Financial risk management 124 Contingencies and other obligations 124 Subsequent events 125 Business transactions with related parties 126 Executive bodies 127 Number of employees 127 Segment reporting 130 Declaration of the Management Board according to article 82 (4) of the Austrian Stock Exchange Act 131 Auditor s report

56 56 CONSOLIDATED BALANCE SHEET AS OF JANUARY 31, 2010 in TEUR 2009/ /09 Comments as of Jan. 31, 2010 as of Jan. 31, 2009 Assets Intangible assets ,909 13,140 Property, plant and equipment ,191 45,283 Investments in affilitated companies Non-current financial assets Deferred tax assets 4.5 6,809 6,736 Non-current assets 69,268 65,868 Inventories ,829 19,116 Trade receivables ,828 39,228 Other receivables and assets 4.7 4,608 5,919 Current financial assets 4.8 4,389 3,711 Cash and cash equivalents ,773 11,763 Current assets 92,427 79,736 TOTAL ASSETS 161, ,604 Equity and liabilities Capital stock 24,347 24,347 Capital reserves 26,935 26,935 IAS 39 reserve Currency translation reserves -2,617-2,166 Accumulated profit/loss 1,659 18,742 Stockholders equity 51,027 67,858 Minority interests Equity ,250 68,073 Liabilities to employees ,704 11,546 Long-term financial liabilities ,931 3,658 Long-term tax provisions Long-term government grants and subsidies , Deferred tax liabilities Non-current liabilities 63,341 16,185 Trade payables (incl. prepayments received) ,756 23,309 Current financial liabilities ,846 19,923 Current provisions , Current tax provisions Other liabilities ,785 17,058 Current government grants and subsidies Current liabilities 47,105 61,346 TOTAL EQUITY AND LIABILITIES 161, ,604

57 57 CONSOLIDATED INCOME STATEMENT FOR THE BUSINESS YE in TEUR Comments 2009/ /09 Revenue , ,318 Inventory changes finished/semi-finished goods -4, Other capitalised services ,728 3,508 Other income 5.2 3,428 4,913 Materials and supplies , ,967 Personnel expenses ,383-77,481 Other expenses ,261-44,733 Earnings before interest, depreciation, amortisation and impairments, taxes and income from securities (EBITDA) and result from affiliated companies -5,199 18,948 Depreciation, amortisation and impairments -8,821-7,555 Earnings before interest, taxes, income from securities (EBIT) and result from affiliated companies -14,020 11,392 Interest expense -2,974-1,241 Income from interest Other financial expenses ,933 Other financial income Financial result 5.6-2,831-2,689 Result from affiliated companies Earnings before taxes (EBT) -16,848 8,720 Taxes on income ,029 Net income -17,168 4,691 Thereof: Shareholders of parent company -17,257 4,597 Minority interests ,168 4,691 Earnings per share (diluted = basic) in TEUR:

58 58 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE BUSINESS YE in TEUR Comments 2009/ /09 Net income -17,168 4,691 Other comprehensive income Valuation profit/-loss of available for sale financial instruments Taxes on income Disposal of available for sale financial instruments 4.4, ,228 Taxes on income Actuarial profits/losses Taxes on income Adjustment from foreign currency translation ,203 Other comprehensive income after taxes Total comprehensive income for the period -16,738 4,249 thereof shareholders of parent company -16,831 4,190 thereof minority interests ,738 4,249 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE BUSINESS YE in TEUR Comments Capital stock Capital reserves IAS 39 reserve Currency translation reserves Consolidated net income/ Shareholders loss equity Minority interests Equity as of Feb. 01, ,347 26, ,031 19,048 68, ,188 Net income 4.9 4,564 4, ,658 Other comprehensive income 275-1, Total comprehensive income 275-1,135 5,050 4, ,249 Payment of dividends 6-5,356-5, ,356 Share based payments Acquisition of minority interests as of Jan. 31, ,347 26, ,166 18,742 67, ,073 as of Feb. 01, ,347 26, ,166 18,742 67, ,073 Net income ,257-17, ,168 Other comprehensive income Total comprehensive income ,083-16, ,738 Acquisition of minority interests as of Jan. 31, ,347 26, ,617 1,659 51, ,250

59 59 CONSOLIDATED CASH FLOW STATEMENT FOR THE BUSINESS YE in TEUR Comments 2009/ /09 Earnings before taxes (EBT) -16,848 8,720 Depreciation, amortisation and impairments 4.1, 4.2 8,821 7,555 Impairment of available for sale financial instruments 4.8, ,933 Net interest income and income from securities 2, Profit/loss from disposal of property, plant & equipment and intangible assets Profit/loss from disposal of financial assets Profit/loss from disposal of subsidiaries Result from affilitated companies Share based payments Other non-cash expenses/income Changes in inventory 4.6 5, Changes in receivables and other assets ,711 3,260 Changes in trade payables ,568-1,346 Changes in other liabilities ,157-2,877 Changes in long-term provisions (incl. employees) 4.11, Changes in current provisions , Cash flow from continuing operations 8,323 18,931 Taxes paid on income ,296 Withholding taxes paid Cash flow from operating activities 7,438 15,218 Proceeds from disposal of property, plant & equipment and intangible assets 1, Expenditures for property, plant & equipment and intangible assets 6-14,248-20,920 Proceeds from disposal of financial assets 0 1,079 Expenditures for financial assets Proceeds from disposal of subsidiaries Proceeds from disposal of shares in affiliated companies Expenditures for the acquisition of minority interests Interests received Income from securities Cash flow from investing activities -12,672-19,651 Raising of interest-bearing financial liabilities 4.13, ,500 10,990 Repayments of interest-bearing financial liabilities 4.13, ,305-3,617 Raising of government grants and subsidies ,231 0 Interests paid 5.6-1,089-1,116 Payment of dividends to shareholders of parent company ,356 Cash flow from financing activities 37, Changes in cash and cash equivalents 32,102-3,533 Cash and cash equivalents at beginning of period 11,763 16,139 Adjustment from foreign currency translation Cash and cash equivalents at end of period ,773 11,763

60 60 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ACCORDING TO IFRSs AS OF JANUARY 31, COMPANY INFORMATION The present consolidated financial statements of the AG and its subsidiaries for the business year 2009/10 (as of January 31, 2010) will be released for publication by the Management Board on April 23, 2010 and presumably will be presented to the Supervisory Board on May 12, The Bene Group develops, produces and sells office furniture and integrated office concepts, primarily for the European market. In its home market, the Company is market leader and on the European market it is one of the leading suppliers. The AG is a company according to Austrian law, with its headquarters in Schwarzwiesenstraße 3 in 3340 Waidhofen/Ybbs. The Company is registered in the commercial register of St. Pölten under FN 89102h.

61 61 2 PRINCIPLES OF ACCOUNTING, FINANCIAL REPORTING AND VALUATION METHODS 2.1 PRINCIPLES OF ACCOUNTING The consolidated financial statements of the AG as of January 31, 2010 were prepared in compliance with the International Financial Reporting Standards (IFRSs) valid for the business year 2009/10 and under consideration of the interpretations of the International Financial Reporting Committee (IFRIC) applicable in the European Union. The present consolidated financial statements were compiled under the condition of the continuation of the Company. The reporting and the consolidation of individual items in the balance sheet, the profit and loss statement, the statement of comprehensive income, the cash flow statement and the statement of changes in equity follow the principle of essentiality. The accounting of the companies included in the consolidated financial statements is based on the consistent accounting methods of the Bene Group. These accounting principles were consistently applied to the presented periods (business year 2009/10 and business year 2008/09). This ensures the comparability to the previous year s figures. All intra-group balances, income and expenditures were completely eliminated. The consolidated financial statements were principally prepared by applying the acquisition cost principle. Financial investments available for sale and derivative financial instruments are excluded thereof; these are stated at fair value. The consolidated financial statements are prepared in EURO. Unless otherwise specified, all amounts are rounded to thousand EURO (TEUR, T ). The total of rounded amounts and percentages may show rounding related differences resulting from the use of automatic calculation methods. In the business year 2009/10, the Group applied the following mandatory, new and revised IFRS standards and interpretations. Amendments to IFRS 1 First time adoption of the International Financial Reporting Standards and IAS 27 Consolidated and separate financial statements pursuant to IFRSs: to be adopted for financial years starting on or after January 01, 2009 IFRS 2 Share based payment: vesting conditions and cancellations: to be adopted for financial years starting on or after January 01, 2009 IFRS 7 Financial instruments: disclosures: to be adopted for financial years starting on or after January 01, 2009 IFRS 8 Operating segments: to be adopted for financial years starting on or after January 01, 2009 IAS 1 Presentation of financial statements (revised): to be adopted for financial years starting on or after January 01, 2009 IAS 23 Borrowing costs (revised): to be adopted for financial years starting on or after January 01, 2009 IAS 32 Financial instruments: presentation and IAS 1 presentation of financial statements: Puttable financial instruments and obligations arising on liquidation: to be adopted for financial years starting on or after January 01, 2009 IFRIC 13 Customer loyalty programs: to be adopted for financial years starting on or after July 01, 2008 IFRIC 15 Agreements for the construction of real estate: to be adopted for financial years starting on or after January 01, 2009 IFRIC 16 Hedges of a net investment in a foreign operation: to be adopted for financial years starting on or after October 01, 2008 Improvements to IFRS 2008: Individual effective dates for a variety of standards Basically, the financial reporting and valuation methods correspond to the ones applied in the previous year, with the following exceptions:

62 62 Any impact on the financial or earnings situation of the Bene Group arising from the adoption of a standard or an interpretation will be further specified below: IAS 1 Presentation of financial statements: The revised standard requires separate presentation of changes in equity resulting from transactions with shareholders in their capacity as equity investors and other changes in equity. The adoption of the revised IAS 1 led only to changes in the presentation. The Bene Group will continue to report the statement of comprehensive income in two presentations. IAS 23 Borrowing costs (revised): The revised IAS 23 requires the capitalisation of borrowing costs, which can directly be attributed to the acquisition, the construction or the production of qualified assets. Until January 31, 2009, the Bene Group recognised borrowing costs in the net income in the period, in which they have arisen. According to the transitional provisions of the revised IAS 23, the Bene Group has adopted the standard prospectively. Thus, borrowing costs, which are related to qualified assets, of which the initial capitalisation was on or after February 01, 2009 are capitalised. During the past business year, the capitalised amount of borrowing cost was lower than TEUR 1, since with the exception of additions of subordinate importance, for development projects launched as of February 01, 2009 no qualified assets were acquired or produced in the business year 2009/10. with regard to business transactions related to derivatives and assets used for purposes of liquidity management. The disclosures for determining the fair value are presented under point 7.6 Financial instruments. The new regulation does not lead to essential changes in disclosures to the liquidity risks they are described under point 7.3 Liquidity risk. IFRS 8 Operating segments: As of the effective date, IFRS 8 replaces IAS 14 segment reporting (IAS 14). Instead of the business and geographical segment reporting provided for in IAS 14, IFRS 8 pursues a management approach, according to which the published segment information is based on that information, which the company s decision makers consult for their decisions about the allocation of resources and valuation of profitability. The distinction between primary and secondary segments ceases to apply. On the contrary, in compliance with IFRS 8 basically also business segments, which exclusively or mainly provide internal services, are subject to reporting. For the Bene Group, the identified business segments according to IFRS 8 correspond to the previously identified segments per region pursuant to IAS 14. Thus, the reported figures were only adapted to the internal management reporting. Disclosures pursuant to IFRS 8, including adapted information for the business year 2008/09 are presented under point 13 Segment reporting. IFRS 7 Financial instruments: disclosures: The revised standard provides for additional disclosures about fair value measurement and liquidity risk. The amendment requires a quantitative analysis of determination of the fair value on the basis of a threelevel hierarchy for each class of financial instruments recognised at fair value. Additionally, for valuations at fair value at level 3, reconciliation between opening and closing balance is mandatory as well as the disclosure of major reclassifications between the levels 1 and 2 of the determining hierarchy. Furthermore, the amendment clarifies the requirements on disclosures of liquidity risks Improvements to IFRS 2008: In May 2008, for the first time, the Board published improvements to IFRS standards on a collective basis with the primary target to eliminate inconsistencies and to clarify wording. There is a transitional provision for each standard. Amendments of standards, which were developed in the context of the project for improvements to IFRS 2008, were for the first time adopted in the business year 2009/10. All new regulations in the improvements to IFRS 2008 did not result in any effects on the accounting methods and the presentation of the financial and earnings situation of the Bene Group.

63 63 The following already published and from the European Union adopted new or revised standards and interpretations were not early adopted in the business year 2009/10. The Bene Group will apply these standards and interpretations to future reporting periods, to which the adoption is mandatory: IFRS 1 First time adoption of the International Financial Reporting Standards (revised): to be adopted for financial years starting on or after July 01, 2009 IFRS 2 Share based payment: group cash-settled share-based payment: to be adopted for financial years starting on or after January 01, 2010 IFRS 3 Business combinations (revised) and IAS 27 consolidated and separate financial statements (revised) including the subsequent amendments to IFRS 7, IAS 21, IAS 28, IAS 31 and IAS 39: to be adopted for financial years, starting on or after July 01, 2009 IAS 32 Financial instruments: presentation: classification of rights issues: to be adopted for financial years starting on or after February 01, 2010 IAS 39 Financial instruments: recognition and measurement: appropriate transactions: to be adopted for financial years starting on or after July 01, 2009 IFRIC 9/IAS 39 Financial instruments: recognition and measurement (revised) reassessment of embedded derivatives: to be adopted for financial years starting on or after July 01, 2009 IFRIC 17 Distribution of non-cash assets to owners: to be adopted for financial years starting on or after July 01, 2009 IFRIC 18 Transfer of assets from customers: to be adopted for financial years starting on or after July 01, 2009 Improvements to IFRS 2009: Individual effective dates for a variety of standards With the exception of the following standards described below, the Bene Group expects no effects on the presentation of the financial and earnings situation of the Group arising from the first time adoption of these modified or new standards or interpretations. IFRS 3 Business combinations (revised) and IAS 27 consolidated and separate financial statements (revised): IFRS 3 (revised) introduces essential amendments with regard to the accounting method for business combinations realised after the application date. There are consequences on the measurement of shares without controlling interest, the accounting of transaction costs, the first time recognition and the subsequent measurement of a contingent consideration and step acquisitions. These new regulations will have an effect on the amount recognised for the goodwill, on the net income of the current period, in which the business combination takes place and on future results. IAS 27 (revised) requires that a change in the interest in a subsidiary, which does not lead to the loss of control are accounted as transactions with shareholders in their capacity as shareholders. Thus, such transactions can neither result in a goodwill nor in a profit or loss. Furthermore, provisions with regard to the allocation of losses to shareholders of the parent company and the shares without controlling influence and the accounting regulations for transactions, which lead to a loss of control, were amended. The amendments from IFRS 3 (revised) and IAS 27 (revised) may have an effect on future acquisitions or loss of control in subsidiaries.

64 PRINCIPLES OF CONSOLIDATION Scope of consolidation The consolidated financial statements include the AG and its controlled companies. Controlled companies are companies, in which the AG has the opportunity to influence on the company s finance and business policy to benefit from its activities. Subsidiaries are fully consolidated as from the date of acquisition i. e. as from the date, on which the company is controlled by Bene. Companies are excluded from the scope of consolidation as from the date, on which the control of the parent company does no longer exist. Jointly controlled entities with equal voting rights are stated according to the pro-quota consolidation in the consolidated financial statements until such entities are no longer jointly controlled. Entities that are not controlled however, on which Bene exerts a significant influence are always reported pursuant to the equity method. As of April 01, 2009, the Bene Deutschland GmbH has sold the Bene GmbH based in Munich, the Bene GmbH based in Hamburg, the Bene GmbH based in Essen and the Bene GmbH based in Villingen/Schwenningen to the AG. For the consolidated financial statements of the AG as of January 31, 2010 no effects with regard to the financial and earnings situation are resulting from this transaction. Against the background of a consistent market appearance, as of April 01, 2009, the Office Technology BVBA, Brussels changed its name. The Belgian company now operates under the name of Bene Belgium BVBA, Brussels. The following companies were included in the consolidated financial statements: in % Method of Local Name Share consolidation currency AG, Waidhofen/Ybbs HOLDING EUR PLC, London FULL GBP Bratislava spol.s.r.o, Bratislava 100 FULL EUR Budapest Kft., Budapest 100 FULL HUF Praha spol.s.r.o, Prague 100 FULL CSK Ljubljana d.o.o., Ljubljana 100 FULL EUR -WARSZAWA Sp.z o.o., Warsaw 100 FULL PLZ MOSKVA OOO, Moscow 100 FULL RUB ROMANIA S.R.L, Bucarest 100 FULL ROL SOFIA EOOD, Sofia 100 FULL BGN OFFICE FURNITURE IRELAND LIMITED, Dublin 100 FULL EUR KYIV TOV, Kiev 100 FULL UAH Bene Belgium BVBA, Brussels 100 FULL EUR RUS OOO, Moscow 100 FULL RUB Bene Deutschland GmbH, Frankfurt am Main 100 FULL EUR Bene GmbH, Munich 100 FULL EUR Bene GmbH, Hamburg 100 FULL EUR Bene GmbH, Frankfurt am Main 100 FULL EUR Bene GmbH, Essen 100 FULL EUR ENTERPRISE Gesellschaft für Büroeinrichtungen mbh, Frankfurt am Main 100 FULL EUR Bene GmbH, Villingen/Schwenningen 100 FULL EUR

65 65 As of the reference date June 30, 2009, additional 4.74 % of shares were acquired from other shareholders in the PLC, London (exercise of second call option). Thus, the participating interest of the AG increased from % (January 31, 2009) to % (January 31, 2010). Comparing the purchase price paid in cash (TEUR 199) with the book value of the additionally acquired shares from other shareholders (TEUR 86), the resulting goodwill amounts to TEUR 113. Since the previously fully consolidated Bene Innovation GmbH was sold in the past business year, the scope of consolidation includes 21 fully consolidated companies on the balance sheet date January 31, 2010 (January 31, 2009: 22). At the time of disposal, the book values of assets and liabilities of the Bene Innovation GmbH were as follows: in TEUR Nov. 01, 2009 Total assets 34 Net assets disposed on sale of shares 34 The proceeds from the sale of the 100 % share in the Bene Innovation GmbH were fully paid at the time of sale. The comparison to the cash and cash equivalents gives the following picture as of November 01, in TEUR Inflow of funds from sale of shares in the subsidiary 25 Outflow of funds -33 Actual outflow of funds -8 A loss on disposal in the amount of TEUR 9 is resulting from the comparison of the purchase price received and the net assets sold. The shares in the Bene Consulting companies, which in previous years were stated at equity in the consolidated financial statements of the AG, were likewise sold in the third quarter of the past business year (see point 4.3 Investments in affiliated companies). Hence, as of January 31, 2010, the number of companies recognised at equity is 0 (January 31, 2009: 4).

66 Reporting date The consolidated financial statements were compiled as of January 31, Thus, the reporting date corresponds to the AG parent company s reporting date. The reporting date is not completely consistent with the balance sheet dates of the local annual financial statements included in the consolidated financial statements. In case of significant business transactions or events occurring in between these reporting dates and the reporting date of the parent company, adjustments are made in accordance with IAS Method of consolidation Capital is consolidated according to the acquisition method, allocating the acquisition costs of purchased shares to the proportionate present value of the acquired assets and liabilities. The remaining difference is stated as goodwill. In case of unfavourable differences, identified assets, liabilities and contingencies are re-assessed according to IFRS 3. Any remaining unfavourable differences are charged to the net income. The item minority interests reports the amount of share in equity held by minority interests and in income of consolidated companies. Due to local legal regulations, the balance sheet date December 31, 2009 (December 31, 2008) of the following companies differs from the consolidated financial statements as of January 31, 2010 (January 31, 2009): MOSKVA OOO, RUS OOO, ROMANIA S.R.L, KYIV TOV and SOFIA EOOD. If the Group acquires minority interests, the difference between purchase price and book value of the minority interest is stated as additional goodwill. Receivables, loans, liabilities and contingencies between the companies included in the consolidated financial statements are set off. In the consolidated income statement, expenses and revenue from intra-group trade are set off. There were no interim results from intra-group transactions between fully consolidated companies.

67 JUDGEMENTAL DECISIONS AND UNCERTAINTIES FROM ESTIMATES In preparing the Group s financial statements, it is necessary to estimate certain figures and make assumptions that influence on the accounted assets and liabilities, the declaration of other obligations as at the balance sheet date and the reporting of revenues and expenses during the reporting period. The actual figures may differ from these estimates, however the Management Board is of the opinion that no essential negative deviations in the consolidated financial statements of the near future are arising. At least once a year, the Group reviews if there is any impairment of goodwill. Additionally, the assets of the cash generating unit AG are subject to an impairment test if indicators for impairment exist. This requires an estimate of the use value of the cash generating units, to which goodwill is allocated. For estimation of the use value, the Group estimates the prospective future cash flows of the cash generating units and defines an appropriate discount rate to determine the cash value of these cash flows. The parameters applied for determining the use value are explained under point Impairments. Within the Bene Group the impairment test of non-current assets is analogous to the review for impairment of intangible assets and goodwill. The management is of the opinion that no possible changes in the assumptions for determining the use value of the cash generating unit PLC, London could lead to the fact that its book value substantially exceeds its realisable value. The break-even interest rate is 24.6 %. Furthermore, missing the planned sales in the individual planning periods by more than 13.1 % would lead to impairments. The management is of the opinion that no possible changes in the assumptions for determining the use value of the cash generating unit Bene GmbH, Hamburg could lead to the fact that its book value substantially exceeds its realisable value. The break-even interest rate is 16.6 %. Furthermore, missing the planned sales in the individual planning periods by more than 4.1 % would lead to impairments. The management is of the opinion that no possible changes in the assumptions for determining the use value of the cash generating unit Bene Belgium BVBA (previously Office Technology BVBA) could lead to the fact that its book value substantially exceeds its realisable value. The break-even interest rate is %. Furthermore, missing the planned sales in the individual planning periods by more than 17.5 % would lead to impairments. The management is of the opinion that no possible changes in the assumptions for determining the use value of the cash generating unit AG could lead to the fact that its book value substantially exceeds its realisable value. The break-even interest rate is 15.9 %. Furthermore, missing the planned sales in the individual planning periods by more than 7.7 % would lead to impairments. Moreover, variable purchase price components for capital expenditures in the business year 2006/07 and 2007/08 were included in the assessment of goodwill. If, in the future, there should be any change of the underlying assumptions, the amount of the determined goodwill could change (see point 3 Acquisitions and change of minority interests). The capitalisation of deferred tax assets is based on tax plannings according to the AG s and subsidiaries business plans. If an existing loss carried forward based on these prognoses will most likely not be used in an appropriate period of 3 5 years, it is not capitalised. The amount of non-capitalised losses carried forward is further detailed under point 4.5 Taxes on income. Provisions are set-aside in that amount, which at the time of compilation of the consolidated financial statement might be determined by the best estimate of the Management of the Bene Group (see point 4.12 Provisions (long-term and current)). Particularly, the valuation of obligations to employees is based on assumptions with regard to the discount factor, the retirement age and the labour turnover rate. The parameters applied to the reporting period are shown under point 4.11 Liabilities to employees. Receivables require assumptions about the probability of default (see point 4.7 Other receivables and assets).

68 ACCOUNTING AND VALUATION PRINCIPLES Currency translation The consolidated financial statements are prepared in euro, the Group s functional and reporting currency. Each company within the Group determines its own functional currency. The items stated in the individual financial statements of the different companies are valued on the basis of this functional currency. Foreign currency transactions are initially translated at the exchange rate between the functional currency and the foreign currency valid on the date of the business transaction. As of the reporting date, monetary assets and liabilities in foreign currencies are converted to the functional currency by using the period-end exchange rate. Any currency conversion differences are stated in the net income. In the business year 2009/10, exchange gains in the amount of TEUR 1,382 (2008/09: TEUR 2,380) and exchange losses totalling TEUR 1,150 (2008/09: TEUR 2,580) were recognised in the net income. Thereof, TEUR 459 account for exchange losses from forward exchange dealings of the Bene Group, existing on the balance sheet date (2008/09: exchange gains of TEUR 206) (see point 7.7 Derivative financial instruments ). Non-monetary items, which are valued at historical acquisition or production costs in a foreign currency, are converted at the exchange rate applicable on the day of the business transaction. Based on the concept of functional currency, the annual financial statements of foreign subsidiaries are translated to euro. For all subsidiaries, this is their respective national currency, since the companies operate independently with regard to financial, economical and organisational matters. At the balance sheet date, the assets and liabilities of these subsidiaries are translated into euro by using the period-end exchange rate. Equity is converted at historical rates. Revenues and expenses are converted at the business year s weighted average rate. Differences arising from currency conversion are stated as separate item of the other comprehensive income. In the event of disposal of a foreign entity, its cumulative amount recorded under equity is closed with effect on net income Intangible assets Initially, intangible assets are stated at acquisition or production costs. The acquisition costs of an intangible asset, which has been acquired at a company merger, correspond to the fair value at the time of acquisition. After the initial capitalisation, the intangible assets are valued at acquisition or production costs less accumulated amortisation and accumulated impairment expenses. Intangible assets are amortised on a straightline basis over their useful life. The amortisation period and the amortisation method are subject to yearly reviews. Just as intangible assets from development projects not yet ready for use, intangible assets, for which the useful life is not determinable, are not amortised on a regular basis, but are subject to an impairment test at least once a year or if facts or circumstances point to a possible impairment of the book value ( impairment test ). In addition, in the reporting period, these assets are reviewed with regard to the justification of an unlimited useful life. The expected useful life of intangible assets ranges as following indicated between 3 and 8 years. a) Goodwill IFRS 3 was applied to business combinations as from March 31, In accordance with this standard, goodwill is calculated as a residual amount from acquisition costs and the fair value of identifiable assets, liabilities and contingencies. As of the date of acquisition, goodwill acquired in the context of business combinations is assigned to the cash generating units or groups of cash generating units, which benefit from the synergy effects of the business combination. Within the Bene Group, the legally independent company units constitute individual cash generating units. A resulting goodwill is at least once a year or if incidents or circumstances point to a possible decrease in book value, subject to an impairment test.

69 69 A possible impairment is determined by the comparison of the realisable amount with the book value of the assets of the cash generating unit including goodwill. If the realisable amount is lower than the goodwill s book value, an impairment expense is recorded. Impairment expenses for goodwill cannot be recovered in subsequent periods. Thus, after the initial recognition, goodwill is stated at acquisition costs less accumulated impairment expenses. b) Research and development costs Research costs are recorded as expenditure in the period, in which they have arisen. An intangible asset from development, in the context of an individual project, is only shown if the company can prove the technical feasibility to complete the intangible asset for internal use or for sale and the intention to use or to sell it. Furthermore, the Company must prove the generation of future economic benefits through the asset, the availability of resources to complete the asset and the ability to reliably determine the intangible asset s development costs. After the initial recognition of development costs, the acquisition cost model is applied, according to which the asset is stated at acquisition costs less accumulated amortizations and accumulated impairment expenses. The capitalised amounts are depreciated over the period, for which sales can be expected from the respective project (5 to 8 years). The useful lives and the amortisation methods are reviewed at the end of each business year. Necessary changes are considered as changes from estimates. c) Rights and licences Amounts paid for rights and licences are capitalised and are amortised on a straight-line basis over the expected useful life. For customer lists resp. relations, the expected useful life ranges between 3 and 5 years, for software it is 3 years. costs arising from the asset s transport to the location of its use and from making it available for its intended operation. In addition, acquisition and production costs include costs for replacement of parts of an asset at the time, when such costs arise, if recognition criteria are fulfilled. Expenses arising after the asset s start of operation, such as repairs, current maintenance and service are usually recorded as expense in the period, in which they have accrued. In the case of barter trades, valuation is at fair value unless there is no economic substance to the transaction or neither the fair value of the asset received nor of the asset given is reliably measurable. Ordinary straight-line amortisation is based on the expected useful lives. The residual values, the useful lives and the amortisation method are reviewed periodically in order to ensure that these correspond to the asset s expected economic use. Expected useful lives: Buildings Technical installations and machinery Plant and business equipment years 3 13 years 1 13 years Assets not yet ready for operation are reported under assets under construction and valued at acquisition or production costs. Acquisition or production costs are the amount of cash or cash equivalents paid for the acquisition or the production of an asset or the fair value of another type of compensation at the time of acquisition or production. An asset is deleted either at the time of disposal or if no more economic benefit is expected from its further use or sale. If an asset is sold or disposed of, the acquisition costs and the accumulated depreciation are written off and a possible profit or loss is reported with effect on net income Property, plant and equipment Property, plant and equipment are recorded at acquisition or production costs less accumulated amortisation and accumulated impairment expenses. The acquisition costs of assets comprise the purchasing price including import duties and non-reimbursable taxes and all other direct

70 Borrowing costs Borrowing costs, that are directly attributable to the acquisition, the construction or the production of an asset, for which a considerable period of time is required to bring the asset in condition for its intended use or sale are capitalised as part of the acquisition and production costs of the corresponding asset. All other borrowing costs are recognised as expenditure in the period, in which they incurred. Borrowing costs are interests and other costs, which arise in the context of borrowed capital. The Group capitalises borrowing costs for all qualified assets, for which the acquisition or the production started on or after February 01, Within the Bene Group, this concerns basically intangible assets from development projects. Borrowing costs related to development projects initiated prior to February 01, 2009 are still recognised as expense. Within the Bene Group, the realisable amount of the cash generating units is determined on the basis of calculation of a use value by applying cash flow prognoses based on finance plans for a period of 3 years. For the period after these 3 years, it is calculated with perpetuity on the basis of the third year s values by applying the following growth rates. The cash flow forecasts are based on profit margins, which are determined by means of historical country specific comparisons and market forecasts. The respective market developments are taken into account for determining the increase in raw material prices. The interest rate is calculated as a mixed rate of an average loan rate and the Group s expected interest on equity employed, thus taking into account the specific risk of the cash generating unit. With regard to the cash flow forecasts of the cash generating units, for the business year 2009/10 (2008/09), the following parameters were applied: Impairments Property, plant and equipment as well as intangible assets including goodwill are reviewed with regard to indicators on impairment on each balance sheet date. Goodwill and intangible assets with undefined useful life are subject to an impairment test at every balance sheet date without any evidence. The Group s realisable amount for an asset serves as basis for such an impairment test. It corresponds to the higher amount of use value or fair value less costs of sale. The use value of an asset corresponds to the cash value of the estimated future cash flows, determined on the basis of a usual and to the specific risks of the asset s value adapted interest rate before tax. The fair value less costs of sale is the amount achievable through the sale of an asset or a cash generating unit in a transaction at market conditions between knowledgeable and willing parties after deduction of costs of sale. If no cash flow can be determined for an individual asset, the determination of the use value is based on the respective cash generating unit. Within the Bene Group, each legally independent company unit constitutes an individual cash generating unit. As in the business year 2008/09, as of the balance sheet date January 31, 2010, the cash flows of all companies were extrapolated without growth rate for the calculation of the perpetuity. Due to a similar risk profile with regard to competitors/ customers and the general market maturity, within the Bene Group the discount rate applied to cash flow forecasts for the markets UK, Germany and Belgium is 9.1 % (January 31,2009: 9.0 %). The slight increase compared to the previous balance sheet date is resulting from the higher sensitivity of the Bene Group with respect to the volatile market environment. In the business year 2009/10, a risk adequate interest rate of 11.1 % was applied to the impairment testing of intangible assets from development projects. On the one hand, this reflects the shorter project lead times and on the other hand higher uncertainties. The review is based on the resulting assets from the individual development projects. When determining the use value, any resulting cash flows for the finalisation of the respective development project and the resulting cash flows from the future use of the development are assumed. The cash flow forecasts are based on current estimates of the Management, derived from experience with similar reference projects in the past and on the ongoing monitoring of sales and customer requirements.

71 71 If the realisable amount is lower than the asset s book value, impairment expenses corresponding to the difference amount are charged to the income statement. Impairment expenses are reported in the profit and loss statement under the position of depreciation, amortisation and impairments. If impairment ceases to exist except for goodwill (see point Intangible assets) this leads to a writeup in the net income of the period to the lower value of amortised costs and realisable amount. After a write-up has been made, the amortisation expense has to be adjusted in future reporting periods, in order to prorate the asset s adjusted book value less possible remaining book value systematically over its remaining useful life Investments in affiliated companies Investments in affiliated companies are reported according to the equity method. An affiliated company is a company, on which Bene exerts a significant influence and which is neither a subsidiary nor a joint venture. According to the equity method, shares in an affiliated company are stated in the balance sheet at acquisition costs plus changes of the Group s share in net assets of the affiliated company, which were arising after the acquisition. Goodwill related to an affiliated company is included in the book value of the share and is not amortised on a scheduled basis. When applying the equity method, the Group determines whether additional impairment expenditure is required with regard to the Group s net investment in the affiliated company. The income statement includes the Group s share in the net income of the affiliated company. Any changes in the affiliated company s equity are likewise directly recorded in the Group s equity and if necessary included in the statement of changes in equity Financial assets Within the Bene Group, original financial instruments that are no loans and receivables are principally classified as available for sale (i.e. securities or investment fund shares held as non-current and current assets). At the time of acquisition, financial assets are stated at fair value, in later periods they are reported at the respective updated fair value, whereas changes in value are shown in the other comprehensive income. This does not apply to permanent or essential impairments as well as currency-related impairments, which are recognised in the net income. Non-quoted equity instruments, for which the fair value cannot be reliably determined, are valued at amortised costs. The fair values of securities are based on the market price or on the market value published by the custodian bank as of the balance sheet date. At the date, on which the financial asset is being written off or on which an impairment is detected, the previously in the other comprehensive income recognised accumulated profit or loss is reported in the net income. For equity instruments classified as available for sale, a significant or permanent decrease in the fair value below its acquisition costs leads to the recognition of impairments. For debt instruments classified as available for sale, a decline in the expected future cash flows leads to impairment. Write-ups for equity instruments classified as available for sale are not stated in the net income but in the other comprehensive income. Write-ups for liability instruments are recorded in the net income if the increase in fair value is objectively resulting from an event, which was occurring after the reporting of impairment in the net income.

72 72 In the event of objective indications that an impairment of an unquoted equity instrument, which is not stated at fair value since its fair value cannot be determined reliably, has occurred, the amount of impairment corresponds to the difference of the financial asset s book value and the cash value of the estimated future cash flow, which are discounted at the current market return rate of a comparable financial asset. In the event of an objective indication that not all due amounts from trade receivables will be received according to the initially agreed invoicing terms (i. e. probability of an insolvency or significant financial difficulties of the debtor) an impairment is stated by using an adjustment account. The book value of an asset is reduced by using an adjustment account. The impairment loss is recognised with effect on net income. The option of assessment of the financial assets at fair value through profit and loss is not exercised. Financial assets and other financial assets are reported as of their respective date of fulfilment. With regard to derivative financial instruments see point Derivative financial instruments Loans and receivables Loans and receivables are non-derivative financial instruments with fixed or determinable payments, which are not quoted in an active market. Such assets are carried at amortised costs, applying the effective yield method. Gains and losses are stated in the period under review if the loans or receivables are written off or impaired. In the event of an objective indication on an impairment of loans and receivables carried at amortised costs, the amount of loss is resulting from the difference between the asset s book value and the cash value of expected future cash flows (with the exception of future not yet incurred loan losses), discounted at the original effective interest rate of the financial asset (i. e. the initially determined interest rate). Financial assets of individual importance are specifically reviewed with regard to impairment. If, on the basis of this individual assessment, no impairment is required, a further impairment test together with other assets of comparable default risk is made. Assets of non-material importance are subject to an individual impairment test or are reviewed together with other assets of comparable default risk. A de-recognition of a receivable is made, if it is considered as uncollectible, i.e. it is almost certain, that there will be no receipt of payment De-recognition of financial assets A financial asset (respectively part of a financial asset or part of a group of similar financial assets) is derecognised, if one of the following three conditions is fulfilled: The contractual rights to cash flows from a financial asset have expired. The Group retains the contractual rights to cash flows from financial assets, however accepts a contractual obligation to pay cash flows without major delay to a third party in the context of an agreement complying with the conditions in IAS ( pass-through arrangements ). The Group has ceded its contractual rights to cash flows from a financial asset and (a) basically, the Group has ceded all risks and opportunities related to the possession of the financial asset or (b) basically, the Group has neither ceded nor retained all risks and opportunities related to the possession of the financial asset, but has ceded the authority to dispose of the asset. If the Group cedes its contractual rights to cash flows from a financial asset and basically, does neither cede nor retain all risks and opportunities related with the possession of such asset and likewise retains the authority to dispose of the assigned asset, the Group still carries the ceded asset to the extend of its continuing commitment. If the amount of the value adjustment decreases in one of the following reporting periods and if this decrease is objectively resulting from a circumstance arising after the recognition of impairment, the earlier stated value adjustment is reversed. The write-up amount is limited to the amortised costs at the time of write-up. The write-up is recognised in the net income.

73 Finished goods, work in progress, raw materials Inventories, including work in progress are valued at acquisition or production costs or at the lower net realisable values (after value adjustments for obsolete or slow moving items). The net realisable value is the achievable sales prices less costs of completion and necessary marketing and distribution costs. Costs are determined on the basis of the FIFO method. Production costs of finished goods and work in progress also include related fixed and variable overheads. Unrealisable inventories are fully written off. They are stated in the income statement under the position materials and supplies Cash and cash equivalents Cash and cash equivalents in the balance sheet include cash at banks, bank balances and short-term deposits with an original maturity of less than three months. For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise the above-defined cash and cash equivalents and short-term deposits Liabilities to employees a) Pension obligations The Bene Group is obliged to pension payments to 31 employees after their retirement. These obligations are based on individual contractual agreements. These defined benefit obligations are covered by plan assets and the obligations are assessed annually by qualified and independent actuaries. These obligations are recognised in accordance with IAS 19 by determining the cash value of the defined benefit obligation (DBO) and comparing it to the fair value of the plan asset as of the balance sheet date. In case of a deficit, a liability is recognised, in case of a surplus, an asset is reported. The calculation of the DBO is based on the projected unit credit method. This method refers to future payments, based on realistic assumptions, collected over the period, in which the benefit is earned by the employee. Any difference between the provision amount and the actual value (actuarial gain/loss) is recognised in the other comprehensive income. Subsequent recognition of service time is averaged up to the time of non-forfeitability. As far as entitlements are non-forfeitable immediately after introduction or amendment, the subsequent recognition of service time is immediately reported with effect on net income. b) Severance payment obligations Due to legal regulations, the Group is obliged to pay a lump sum to all Austrian employees with a service contract dated before January 01, 2003 in case of termination of the employment contract by the employer or at retirement. The severance payment depends on the length of service and the applicable remuneration and ranges between two and twelve monthly salaries. Individual severance agreements are concluded for the members of the Management, who are not considered by the employment law provisions. Provisions are set aside for these obligations. Provisions for this obligation are calculated according to the projected unit credit method. The cash value of the future payments is collected over the period, in which the entitlement arises up to its maximum amount (25 years). Any difference between the provision amount based on assumptions and the actual value (actuarial gain/loss) is recognised in the other comprehensive income. Subsequent recognition of service time is averaged up to the time of non-forfeitability. As far as entitlements are non-forfeitable immediately after introduction or amendment, the subsequent recognition of service time is immediately reported with effect on net income. The Group pays monthly contributions of 1.53 % of the remuneration to an employees pension fund (Mitarbeitervorsorgekasse) for employees, whose employment started after December 31, These amounts are invested in an account of the employee and are paid out at termination of the employment contract or the entitlement is passed on. The Bene Group s obligation is limited to the payment of amounts, which are recognised in the fiscal year, in which they have incurred. The corresponding contribution payments are immediately recognised with effect on net income in the position personnel expenses. c) Other long-term obligations to employees Based on Austrian collective agreements, the Group is committed to anniversary payments to employees with a certain service time (more than 15 years). A provision has been set aside for this obligation. The valuation of this provision is based on the methods applied to performance related severance-payment obligations. Actuarial gains or losses are immediately recognised in the net income.

74 Other provisions (long-term and current) A provision is set aside if the Group has a present (legal or constructive) obligation that has arisen as a result of a past event, the outflow of resources to fulfil the obligation is probable and the amount of the obligation can be estimated reliably. If the Group expects a reimbursement for some or all of the expenditure to settle a provision (i. e. from an insurance contract), the reimbursement is only recognised as separate asset if it is virtually certain that the reimbursement will be received. The expenditure for the provision is stated in the profit and loss statement after deduction of the reimbursement. If the impact of the interest effect is substantial, provisions are discounted at an interest rate before tax, which, if necessary, reflects the obligation s specific risks. In case of discounting, the time related increase of the provision is stated as interest expense Taxes on income, deferred taxes The income tax charge is based on the year s profit and considers future tax assets and liabilities. The actual tax assets and tax liabilities for the current and the previous periods are stated in the amount, in which a refund from the tax authority or a payment to the tax authority is expected. The amount is calculated on the basis of tax rates and tax regulations applicable on the balance sheet date. Actual taxes, which refer to items directly recognised in the other comprehensive income, are not reported in the income statement but are shown in the other comprehensive income. Deferred tax assets and liabilities are calculated by applying the balance sheet liability method. Future tax assets and liabilities reflect the tax effects of temporary differences between the valuation of assets pursuant to the consolidated IFRS balance sheet and the tax amount stated. Deferred tax assets and liabilities are determined by using the expected tax rates for the taxable income applicable at the date, on which the temporary differences will be balanced. Therefore, tax rates (and tax regulations) that have been enacted or substantively enacted at the balance sheet date are applied. The extent of deferred tax assets and liabilities reflects the tax consequences, which according to the company s expectation would result on the balance sheet date if the book values of its assets and liabilities would be recovered or settled. Deferred tax assets and liabilities are recognised for all temporary differences regardless of when a reversal is likely to occur. Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax losses and unused tax credits, to the extent that it is probable that sufficient taxable profit will be available, against which the deductible temporary differences and the carry-forwards of unused tax losses and tax credits can be used, with the exception of: deferred tax assets from deductible temporary differences resulting from the initial recognition of an asset or a liability of a business transaction, which is no business combination and, which at the time of the business transaction neither influences on the annual result according to corporate law nor on the taxable result, and deferred tax assets from taxable temporary differences arising in the context of shares in subsidiaries, affiliated companies and shares in joint ventures, if it is probable that the temporary differences will not reverse in the foreseeable future and no sufficient taxable profits are available, against which the temporary differences may be used. On each balance sheet date, the Company reassesses the unrecognised deferred tax assets and the book value of deferred tax assets. Non-capitalised future tax assets are recognised to the extent, to which it is likely that future taxable profit will allow the use of deferred tax assets. In contrast, the book value of capitalised future tax assets is adjusted to the extent, to which it in no longer probable that in the future sufficient taxable profit for the use of capitalised future tax assets is available.

75 75 Future tax assets and liabilities are directly charged or credited to equity or other comprehensive income if the tax relates to items that are charged or credited in the same or in another period directly to equity or other comprehensive income Derivative financial instruments The Bene Group uses derivative financial instruments for hedging foreign currency risks from projects, of which sales are invoiced in AED (United Arab Emirates Dirham) and GBP (British Pound). Future tax assets and liabilities are set off, if a legally enforceable right to set off current tax assets against actual tax liabilities and these deferred taxes relate to the same taxable entity and the same taxation authority Financial liabilities At initial recognition, financial liabilities are stated at fair value less the transaction costs directly related to the borrowing. A premium, discount or other difference between the amount received and the amount repayable is realised over the term of financing according to the effective interest rate method and reported in the financial result (subsequent valuation at amortised costs). Profits and losses are stated in the period under review if debts are written off Trade payables, other liabilities Trade payables are measured at fair value when trade payables arise. Subsequently, these liabilities are stated at amortised costs. Other liabilities are recognised at their amount payable De-recognition of financial liabilities A financial liability is derecognised when the underlying obligation is met, cancelled or extinguished. If an existing financial liability is exchanged for another financial liability of the same credit grantor, but which includes substantially different contract terms, or if the conditions of an existing liability are essentially changed, such an exchange or change is considered as derecognition of the original liability and recognition of a new liability. The difference between the respective book values is stated in the net income of the reporting period. At the time of initial recognition, valuation is based on the fair value. These fair values are likewise relevant to the subsequent assessment. The fair value corresponds to the market value. This value might either be positive or negative. In case, no market values are available, the fair values are calculated on the basis of approved actuarial models. Derivative financial instruments, recognised as assets are stated under other receivables and assets in the balance sheet, derivative instruments recognised as debt are reported as other liabilities in the consolidated balance sheet. Within the Bene Group, the requirements for the accounting of hedging relationships according to IAS 39 are not met Government grants and subsidies Government grants and subsidies are only reported if there is sufficient certainty that the grants will be received and that the Company fulfils the related conditions. Expenditure-based grants are released to the income statement to offset the related expenditure that they are intended to reimburse. If the grant relates to an asset, the fair value is credited to a deferred income account and is released to the net income over the expected useful life of the relevant asset by equal annual instalments.

76 Lease agreements Determining whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether fulfilment of the arrangement is dependent on the use of a specific asset or assets and whether the arrangement conveys a right to use the asset. Operating lease payments are recognised as expense in the income statement in the period in which they arise. Lease agreements concluded by the Bene Group are exclusively operating leasing contracts (see point 7.10 Rent and lease) Recognition of expenses and revenue The income statement is presented according to the total cost method. Revenue is recognised to the extent that is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue from sales of goods are stated when significant risks and opportunities of ownership have passed to the buyer. Within the Bene Group, revenues from services (planning or assembly services) are stated according to the actually performed hours after finalisation of the project. Total financing costs comprise interests arising from financing, similar expenses and charges, losses from sale of financial assets as well as impairment losses. Total financial revenues include realised interests, dividends and similar revenue, income from sale of financial assets as well as income from write-ups. Interests are deferred on the basis of passage of time using the effective interest method. Dividends are recognised when the distribution of dividends is decided.

77 77 3 ACQUISITIONS AND CHANGE OF MINORITY INTERESTS 3.1 Acquisitions in the business year 2009/10 (business year 2008/09) In the past two business years, there were no company acquisitions within the Bene Group. 3.2 Acquisitions and change of minority interests in the business year 2009/10 In the business year 2007/08, the AG has acquired call options for the acquisition of the remaining 20.0 % minority interest in the PLC, London which may be exercised in 4 tranches split over the next 4 years. 3.3 Acquisitions and change of minority interests in the business year 2008/09 In the business year 2008/09, 4.74 % of shares from other shareholders in the PLC, London were acquired as of the reference date June 30, 2008 (= exercise of the first call option). Consequently, the participating interest of the AG increased from % (January 31, 2008) to % (January 31, 2009). Comparing the purchase price paid in cash (TEUR 541) with the book value of the additionally acquired shares from other shareholders (TEUR 56), results in a goodwill of TEUR 485 (see point Goodwill). On the basis of the underlying purchase price conditions, the resulting fair value as of January 31, 2010 is TEUR 0 (January 31, 2009: TEUR 0). As a result of the acquisition of 4.74 % of shares held by other shareholders of the PLC, London (= exercise of the second call option) in the second quarter of 2009/10, the participating interest in the PLC, London increased from % (January 31, 2009) to % (January 31, 2010). Comparing the cash paid purchase price (TEUR 199) with the book value of the additionally acquired shares from other shareholders (TEUR 86), the resulting goodwill amounts to TEUR 113 (see point Goodwill).

78 78 4 NOTES TO THE CONSOLIDATED BALANCE SHEET 4.1 INTANGIBLE ASSETS AND GOODWILL Intangible assets in TEUR Rights and licences Capitalised development costs Goodwill Deposits for intangible assets Total Acquisition costs as of Jan. 31, ,952 7,749 4, ,231 Additions 1,046 2, ,456 Disposals Transfers Foreign currency effects as of Jan. 31, ,952 9,955 4, ,509 Depreciation and amortisation as of Jan. 31, ,235 1, ,092 Amortisation 1, ,565 Impairment of goodwill Disposals Foreign currency effects as of Jan. 31, ,889 2, ,601 Book value as of Jan. 31, ,716 5,993 4, ,140 Book value as of Jan. 31, ,064 7,490 4, ,909

79 79 Intangible assets in TEUR Rights and licences Capitalised development costs Goodwill Deposits for intangible assets Total Acquisition costs as of Jan. 31, ,875 4,282 4, ,304 Additions 2,059 3, ,403 Disposals Transfers Foreign currency effects as of Jan. 31, ,952 7,749 4, ,231 Depreciation and amortisation as of Jan. 31, ,688 1, ,974 Amortisation 1, ,135 Impairment of goodwill Disposals Foreign currency effects as of Jan. 31, ,235 1, ,092 Book value as of Jan. 31, ,187 2,995 4, ,330 Book value as of Jan. 31, ,716 5,993 4, ,140

80 Intangible Assets All intangible assets are amortised over the periods stated in section On January 31, 2010, the book value of capitalised development costs (in-house development of furniture programs) amounted to TEUR 7,490 (January 31, 2009: TEUR 5,993). The increase, compared to the previous year is resulting from the consistent implementation of the strategy for the expansion of the product portfolio of the Bene Group. The capitalised amounts are amortised over the period, in which sales from the respective projects are expected (between 5 and 8 years). In the year under review, non-capitalisable development costs of TEUR 2,329 (2008/09: TEUR 2,481) were recognised in the positions personnel expenses and other expenses. There are no intangible assets of undefined useful life within the Bene Group. In the business year 2009/10, there was no evidence for impairment of intangible assets Goodwill On January 31, 2010, goodwill of the Bene Group is as follows: PLC, London Bene GmbH, Villingen/ Schwenningen Bene GmbH, Hamburg Bene Belgium, BVBA in TEUR Jan. 31, 2010 Jan. 31, 2009 Jan. 31, 2010 Jan. 31, 2009 Jan. 31, 2010 Jan. 31, 2009 Jan. 31, 2010 Jan. 31, 2009 Book value of goodwill 3,164 3, On the balance sheet date January 31, 2010 the recognised goodwill of TEUR 4,355 (January 31, 2009: TEUR 4,259) results from the take over of shares in the PLC, London (in previous business years and in 2009/10) as well as from the acquisition of the Till Group (stated in the Bene GmbH Villingen/Schwenningen), from the acquisition of the Lebich GmbH (stated in the Bene GmbH, Hamburg) in the business year 2006/07 and from the acquisition of the Office Technology BVBA (stated in the Bene Belgium, BVBA) in the business year 2007/08. The development of goodwill between January 31, 2009 and January 31, 2010 is as follows: in TEUR as of Jan. 31, ,259 Acquisition of minority interests ( PLC, London) 113 Foreign currency effects ( PLC, London) 48 Adjustment of variable purchase price components (Bene GmbH, Villingen/Schwenningen) 10 Impairment (Bene GmbH, Villingen/Schwenningen) -147 Adjustment of variable purchase price components (Bene GmbH, Hamburg) 72 as of Jan. 31, ,355

81 81 The change in goodwill of the PLC, London results from the increase of the shares from % to % (see point 3.2 Change of minority interests in the business year 2009/10). On the other hand, accumulated exchange losses from the conversion of GBP to EUR in the amount of TEUR 309, which are related to the acquisition of shares from the business year 2007/08 onwards, were considered (January 31, 2009: accumulated exchange losses of TEUR 357). Initially, in the past year, goodwill of the Bene GmbH Villingen/Schwenningen increased due to the change of the variable purchase price components. As the impacts of the negative general economic conditions on the company s earnings situation are stronger than previously assumed, an impairment loss of TEUR 147 was recognised in the context of the impairment test performed on the balance sheet date January 31, 2010, which is included in the Germany segment (position depreciation, amortisation and impairments ). Taking the variable purchase price components into consideration, further changes in goodwill may arise in subsequent years. Goodwill attributable to the acquisition of the Office Technology BVBA in the business year 2007/08 likewise includes variable purchase price components based on present forecasts (stated in the Bene Belgium, BVBA). The consideration of variable purchase price components may result in changes of goodwill in subsequent years. Within the Bene Group, the legally independent company entities are individual cash generating units. Thus, goodwill was fully allocated to the companies PLC, London, to the Bene GmbH, Villingen/ Schwenningen, to the Bene GmbH, Hamburg and to the Bene Belgium BVBA. The impairment test of the capitalised goodwill required pursuant to IFRS 3, resulted in an impairment requirement of goodwill of the Bene GmbH, Villingen/ Schwenningen, since as of the balance sheet date, the book value exceeded the realisable value of the cash generating unit. All other goodwill of the Bene Group was classified as sustainable as of January 31, With regard to the parameters applied as of January 31, 2010 (January 31, 2009) see point Impairments. The change of variable purchase price components as of the balance sheet date January 31, 2010 led to a change in goodwill of the Bene GmbH, Hamburg. Future variable purchase price components are considered on the basis of budgets as of January 31, This may result in changes of goodwill in subsequent years.

82 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment Property Plant and equipment Other Total in TEUR Acquisition costs as of Jan. 31, ,765 18,814 38,023 89,601 Additions ,067 9,804 Disposals ,207-2,784 Transfers 9,973 4,329-14,302 0 Foreign currency effects as of Jan. 31, ,577 23,468 29,597 96,642 Depreciation and amortisation as of Jan. 31, ,203 10,921 17,194 44,319 Amortisation 955 1,983 3,055 5,993 Disposals ,303-1,871 Foreign currency effects as of Jan. 31, ,155 12,339 18,957 48,451 Book value as of Jan. 31, ,562 7,892 20,829 45,283 Book value as of Jan. 31, ,422 11,129 10,640 48,191 Property, plant and equipment Property Plant and equipment Other Total in TEUR Acquisition costs as of Jan. 31, ,683 17,219 26,310 79,213 Additions ,566 16,112 Disposals -3, ,688-5,394 Transfers Foreign currency effects as of Jan. 31, ,765 18,814 38,023 89,601 Depreciation and amortisation as of Jan. 31, ,934 9,643 15,885 44,462 Amortisation 834 1,389 2,899 5,122 Disposals -3, ,400-5,075 Transfers Foreign currency effects as of Jan. 31, ,203 10,921 17,194 44,319 Book value as of Jan. 31, ,749 7,577 10,426 34,751 Book value as of Jan. 31, ,562 7,892 20,829 45,283

83 83 In the business year 2009/10, capital expenditure for property, plant and equipment came to TEUR 9,804. The finalisation and the start-up of the research and innovation centre at the site in Waidhofen/Ybbs (TEUR 2,655) and the modernisation and expansion of the distribution sites in Vienna (TEUR 1,282), Munich (TEUR 96), Belgium (TEUR 64) and Ljubljana (TEUR 174) represented the most important positions. Further investments in machinery equipment at the production site in Waidhofen/Ybbs amounted to TEUR 1,616. In the business year 2008/09, capital expenditure for property, plant and equipment came to TEUR 16,112. The construction of the research and innovation centre (TEUR 5,889), the enhancement of the exhaust extraction system (TEUR 1,951) and the exchange of the drilling installation (TEUR 1,219) (all in Waidhofen/Ybbs) represented the most important additions to property, plant and equipment. The other tangible assets include mainly operating installations, operating and business equipment, car pool and EDP hardware. Furthermore, other tangible assets comprise installations under construction in the amount of TEUR 5,546 (January 31, 2009: TEUR 11,674) of which TEUR 2,082 are related to the research and innovation centre and TEUR 1,282 are attributed to the new site in Vienna. As of the balance sheet date January 31, 2010, existing obligations with regard to the purchase of property, plant and equipment are totalling TEUR 343 (January 31, 2009: TEUR 4,696). Obligations from the purchase of property, plant and equipment are basically related to the acquisition of tools and investments in IT-installations at the site in Waidhofen/Ybbs. In the period under review no impairment expenses were recognised. Just as in the reference period 2008/09, no fixed assets were pledged in the reporting period 2009/10.

84 INVESTMENTS IN AFFILIATED COMPANIES Since the shares in the Bene Consulting companies previously stated at equity, were sold in the third quarter of 2009/10, at the end of the past business year, there are no companies recognised at equity to be included in the consolidated financial statements. The summarised financial information about the Bene Consulting companies as of January 31, 2010 is as follows : in TEUR Jan. 31, 2010 Jan. 31, 2009 Current assets 0 1,605 Non-current assets Total assets 0 2,106 Current liabilities 0 1,110 Non-current liabilities Total liabilities 0 1,324 Revenues 1,969 5,004 Expenditures -2,010-4,971 Annual profit Proportionate annual profit AG 49.5 % At the time of disposal of shares, the book value in the AG amounted to TEUR 371 (the change in the business year 2009/10 was not cash relevant): in TEUR Book value as of Jan. 31, Proportionate net income -20 Book value as of Sept. 07, The book values of assets and liabilities of the Bene Consulting companies stated at equity showed the following picture on September 07, 2009, the date of disposal: in TEUR Sept. 07, 2009 Current assets 1,949 Non-current assets 476 Total assets 2,424 Current liabilities 1,444 Non-current liabilities 230 Total liabilities 1,673 Net assets on sale of shares 751 Book value in the AG 371

85 85 The proceeds from the sale of the 49.5 % shares amounted to TEUR 394 and were fully paid in the business year 2009/10. Since the cash and cash equivalents of the Bene Consulting companies were not included in the cash and cash equivalents of the Bene Group due to the recognition at equity, in the business year 2009/10, there was an inflow of funds in the amount of the sales proceeds. Comparing the received purchase price and the recognition of the book value sold, the capital gain amounts to TEUR 23. Together with the proportionate net income for the period of the Bene Consulting companies it is stated in the position result from affiliated companies. 4.4 NON-CURRENT FINANCIAL ASSETS On the balance sheet date January 31, 2010, non-current financial assets account for a total of TEUR 359 (January 31, 2009: TEUR 319). Basically they consist of other loans (mainly reinsurance for semiretirement) in the amount of TEUR 346 (January 31, 2009: TEUR 306). At the closing date 2009/10 no securities were pledged (January 31, 2009: TEUR 0) TAXES ON INCOME 1) Income taxes recognised in the net income are as follows: in TEUR 2009/ /09 Actual taxes on income 586 4,028 Deferred tax income/expense from accrual and reversal of temporary differences Taxes on income as reflected in the income statement 319 4,029 The income tax expense as of January 31, 2010 is based on transactions affecting net income. The attributable income taxes on amounts recognised in equity or other comprehensive income were likewise directly shown in equity or other comprehensive income.

86 86 2) As of January 31, 2010, actual and deferred taxes on income recognised in equity or other comprehensive income are as follows: in TEUR 2009/ /09 Actuarial + profits / - losses severance payment provision Actuarial + profits / + losses pension payment provision Profits / - losses from assets available for sale Income tax expense / income taken to equity ) The reconciliation of actual income tax expenses and the product of net income for the period under review and the applicable tax rate of the Group for the years 2009/10 and 2008/09 are composed as follows: in TEUR 2009/ /09 Earnings before taxes -16,848 8,720 Income tax expense at Austrian tax rate of 25.0 % -4,212 2,180 Non-deductible expenditures Non-taxable income Tax effects from previous years Utilisation of not recognised loss carry-forwards Devaluation of loss carry-forwards Non-capitalisation of loss carry-forwards 4,918 1,308 Withholding taxes from dividend payments Difference resulting from different branch tax rates Difference resulting from different Group tax rates Income tax expense at effective income tax rate of -1.9% (2008/09: 46.2 %) 319 4,029

87 87 4) On the balance sheet date, future deferred tax assets and liabilities are as follows: in TEUR Jan. 31, 2010 Jan. 31, 2009 Deferred income tax liabilities Capitalised development costs and show room furniture -1,873-1,493 Higher depreciation on non-current assets Capitalised intangible assets at company acquisition Valuation reserve from special tax amortisation Value adjustment receivables Valuation of forward exchange dealings 0-52 Total of deferred income tax liabilities -2,260-1,814 Deferred income tax assets Lower depreciation on non-current assets 36 2 Valuation of pension payments Valuation of severance payments 2,723 2,640 Valuation of anniversary payments 7 12 Tax allocation of investment amortisation 1, Tax losses carried forward 4,503 4,433 Valuation of payables Differing recognition date of other revenue Total deferred tax assets 8,856 8,431 + Deferred income tax assets /- liabilities 6,596 6,618 Recognised in the consolidated balance sheet as follows: Deferred tax assets 6,809 6,736 Deferred tax liabilities Balance deferred tax assets/liabilities 6,596 6,618 As of January 31, 2010, in accordance with IAS 12, future deferred tax assets in the amount of TEUR 4,503 (January 31, 2009: TEUR 4,433) on existing losses carried forward in the amount of TEUR 18,012 (2008/09: TEUR 16,746) were capitalised since these may be set off against future taxable profit. The recognised losses carried forward exclusively concern losses carried forward of the AG, whereas in the business year 2009/10 losses carried forward in the amount of TEUR 15,010 of the AG were not stated (2008/09: TEUR 4,303). Within the Bene Group, there are losses carried forward in the amount of TEUR 40,596 (2008/09: TEUR 26,821), for which no future tax assets were capitalised, since their use is not sufficiently secured. They include losses carried forward in Germany for corporate tax in the amount of TEUR 11,332 (2008/09: TEUR 10,875) and losses carried forward for local business tax amounting to TEUR 9,866 (2008/09: TEUR 9,957). No income tax related effects for the business year 2008/09 were resulting from the distribution of dividends by the Bene Group to its shareholders.

88 INVENTORIES in TEUR Jan. 31, 2010 Jan. 31, 2009 Raw materials and supplies 5,111 4,981 Semi-finished goods Finished goods and products 8,569 13,587 Prepayments on inventories Inventories 13,829 19,116 Inventories were assessed at acquisition or production costs. Prepayments made on inventories are related to prepayments for deliveries of goods. Impairment expenses in the amount of TEUR 1,053 (2008/09: TEUR 1,634) were recognised in the past business year. 4.7 OTHER RECEIVABLES AND ASSETS in TEUR Jan. 31, 2010 Jan. 31, 2009 Trade receivables 25,828 39,228 Receivables from associates 0 10 Other receivables 3,411 4,720 Accrued and deferred items 1,196 1,189 Receivables 30,436 45,147 Trade receivables do not bear interests and in general have a maturity of days. In the business year 2009/10 there was as collateralisation of financial liabilities with the Erste Bank and RZB (totalling TEUR 9,000) a cession of receivables of the AG amounting to TEUR 10,021 (business year 2008/09: TEUR 7,360 ) (see point 4.14 Current financial liabilities). As of January 31, 2010, other receivables amounting to TEUR 1,237 (January 31, 2009: TEUR 2,790) arise from receivables from Austrian and foreign finance authorities and receivables from employees in the amount of TEUR 458 (January 31, 2009: TEUR 291). In the business year 2008/09, this position also included profits from the valuation of GBP forward exchange dealings in the amount of TEUR 206 existing in the Bene Group as of January 31, 2009 (see point 7.7 Derivative financial instruments). All recognised trade receivables, other assets and receivables have a maximum remaining term of 1 year. On the balance sheet date, trade receivables shown per currencies are as follows: in TEUR Jan. 31, 2010 Jan. 31, 2009 Trade receivables EUR and other currencies 23,518 35,263 Trade receivables GBP 1,466 3,495 Trade receivables RUB Trade receivables Total 25,828 39,228

89 89 As of January 31, 2010, the stated amount of trade receivables includes value adjustments of TEUR 2,080 (January 31, 2009: TEUR 1,373). The development of the value adjustment account is as follows: in TEUR Original currency of receivables EUR and other Total currencies GBP as of Feb. 01, ,351 1, Additions affecting expenditure 1, Utilisation Reversal as of Jan. 31, ,373 1, Additions affecting expenditure 1,495 1, Utilisation Reversal as of Jan. 31, ,080 2, Impairment expenses of the reporting period were recognised in the income statement under other expenses. Classified per specific allowances and generalised specific allowances, additions affecting expenses and reversals affecting net income as of January 31, 2010 resp. January 31, 2009 are as follows: in TEUR Original currency of receivables EUR and other Total currencies GBP Additions affecting expenditure in the business year 2009/10: 1,495 1, thereof from specific allowances 1,495 1, Reversals affecting income in the business year 2009/10: thereof from specific allowances in TEUR Original currency of receivables EUR and other Total currencies GBP Additions affecting expenditure in the business year 2008/09: 1, thereof from specific allowances 1, Reversals affecting income in the business year 2008/09: thereof from specific allowances As of January 31, 2010, (January 31, 2009) there are only value adjustments for the classes trade receivables in EUR and other currencies as well as GBP.

90 90 As of January 31, 2010 (January 31, 2009) the maturity of the stated book value of trade receivables is as follows: in TEUR Neither overdue nor impaired Overdue, up to 30 days Overdue, days Overdue, days Overdue, but not impaired Overdue, days Overdue, days Overdue, > 360 days Overdue, impaired Jan. 31, 2010 Trade receivables EUR and other currencies 23,518 15,519 3,526 1, ,269 Trade receivables GBP 1,466 1, Trade receivables RUB Trade receivables Total 25,828 16,634 3,848 1, , ,269 in TEUR Neither overdue nor impaired Overdue, up to 30 days Overdue, days Overdue, days Overdue, but not impaired Overdue, days Overdue, days Overdue, > 360 days Overdue, impaired Jan. 31, 2009 Trade receivables EUR and other currencies 35,263 20,691 6,876 2,891 1,309 1,160 1, Trade receivables GBP 3,495 1, Trade receivables RUB Trade receivables Total 39,228 22,380 7,838 3,385 1,566 1,644 1, In the business year 2009/10 (business year 2008/09) there were no essential financial assets, of which terms have been changed.

91 CASH AND CASH EQUIVALENTS in TEUR Jan. 31, 2010 Jan. 31, 2009 Short-term securities available for sale 4,389 3,711 Cash Cash at banks 43,717 11,566 Cash and cash equivalents 48,162 15,474 Cash at banks earns variable interests on overnight accounts. Investments in short-term securities are made for different periods of time, which, depending on the respective cash requirements may vary between one day and three months. They earn interests at floating rates for short-term bank deposits. For not publicly traded securities, the value disclosed by the custodian bank was recognised. The fair value of cash and non-current deposits amounts to TEUR 48,162 (January 31, 2009): TEUR 15,474). In the business year 2009/10, no current financial instruments available for sale were acquired or sold (business year 2008/09: sale with a book value of TEUR 1,034) Previously in the IAS 39 reserve stated profits from valuation in the amount of TEUR 21 were recognised with effect on net income in the position other financial income in the financial year 2008/09. The valuation losses of the first quarter of 2009/10 (TEUR 259) were recognised with effect on net income (position other financial expenses ). Since the financial instruments available for sale are classified as equity instruments within the Bene Group, as of the second quarter of 2009/10, profits from valuation in the amount of TEUR 937 are stated in the other comprehensive income (IAS 39 reserve). Due to essential and permanent changes in value, at the end of the reporting period 2008/09, the accumulated losses of current securities classified as available for sale in the amount of TEUR 388 stated in the IAS 39 reserve as of January 31, 2008 were recognised with effect on net income, as well as accumulated losses as of October 31, 2008 (of TEUR 861), which were previously reported in the other comprehensive income (see point 7.9 Development of the IAS 39 reserve). In the business year 2008/09, total accumulated losses amounted to TEUR 1,933 and was reported in the income statement under the position Other financial expenses (see point 5.6 Financial result). As of January 31, 2010, the Group had non-utilised credit lines of TEUR 44,000 (January 31, 2009: TEUR 26,900), for the utilisation of which all necessary requirements have already been met. As of the balance sheet date, there were no restraints on disposal of cash and cash equivalents and short-term financial assets.

92 ISSUED CAPITAL AND CAPITAL RESERVES For more information on issued capital and capital reserves see consolidated statement of changes in equity. AG s authorised capital in the amount of TEUR 24,347 is divided into 24,347,352 no par value shares. The development of common shares is as follows: Issued and fully paid in in thousands TEUR as of Jan. 31, ,750 18,750 Issue of 5,597,352 shares (IPO) 5,597 5,597 as of Jan. 31, ,347 24,347 as of Jan. 31, ,347 24,347 as of Jan. 31, ,347 24,347 as of Jan. 31, ,347 24,347 During the reporting period 2009/10, there were no changes in the capital stock. However, there is an authorisation of the Management Board to increase the capital stock by ordinary bearer shares by TEUR 9,000 against cash contributions within 5 years as of the registration of the amendment of statutes in the commercial register (thus until 2014). Furthermore, in compliance with article 65 (1) (8) of the Austrian Stock Corporation Act the members of the Management Board are authorised to acquire own shares for cancellation or resale. However, shares to be acquired must not exceed 10.0 % of the respective capital stock. Capital reserves consider additional payments made by the shareholders less the transaction costs for the newly issued shares in the context of the IPO in the business year 2006/07. In the business year 2009/10, the amount of capital reserves remained unchanged (business year 2008/09: increase of the capital reserves resulting from the recognition of the discount granted to employees in the context of the IPO in the amount of TEUR 49). The IAS 39 reserve recognises changes of the fair value of assets available for sale. In the business year 2009/10, a profit of TEUR 937 was recognised in the other comprehensive income (2008/09: a loss in the amount of TEUR 388 was transferred from equity to the result of the period) (see point 7.9 Development of the IAS 39 reserve). The currency translation reserve serves to recognise differences resulting from the conversion of financial statements of foreign subsidiaries.

93 SHARE BASED PAYMENTS In the course of the IPO in the business year 2006/07, Austrian and foreign employees, with a valid employment status on October 19, 2006, were granted the opportunity to buy Bene shares at preferential conditions. In the context of the employees action, all authorised employees were granted a discount of 20.0 % on the condition of a 2 years lock-up period. If the employee quits or retires for unjustified reason, he must repay the 20.0 % discount. In total, employees of the Bene Group purchased 117,861 shares. Considering the issue price of EUR 5.50 per share, this accounts for a total amount of TEUR 130. This sum was prorated under other personnel expenses over the lock-up period of 2 years until October 2008 (see point 5.4 Personnel expenses). It amounted to TEUR 49 in the business year 2008/ LIABILITIES TO EMPLOYEES in TEUR Jan. 31, 2010 Jan. 31, 2009 Provisions for pension payments Provisions for severance payments 9,618 9,990 Provisions for anniversary payments Liabilities to employees 10,704 11, Provisions for pension payments Due to individual contractual agreements, some Group companies are obliged to pension payments to employees as of their retirement. The amount of this pension is based on the service time and the remuneration at the time of retirement. As of January 31, 2010, 31 employees were eligible to future pension payments (January 31, 2009: 33 employees). The following tables show the details of expenses for pension payments recognised in the consolidated income statement and of the amounts for the respective plans carried in the consolidated balance sheet. 1) Expenses for pensions included in personnel expenses : in TEUR Jan. 31, 2010 Jan. 31, 2009 Current service costs Interest costs arising from obligations Expected yield from plan assets Effects from compensation payments Expenses in fiscal year

94 94 2) Items included in the other comprehensive income: in TEUR Jan. 31, 2010 Jan. 31, 2009 Actuarial + profits / - losses from plan assets Actuarial + profits / - losses from Defined Benefit Obligation Total actuarial + profits / - losses in period Recognised + actuarial profits / - losses as of Feb Total actuarial + profits / - losses in period Recognised actuarial + profits / - losses as of Jan ) Provisions for defined benefit obligations recognised in the balance sheet: in TEUR Jan. 31, 2010 Jan. 31, 2009 Obligation, not financed from funds Obligation, (partly) financed from funds 1,742 1,691 Defined Benefit Obligation 1,919 2,215 Fair value of plan assets -1,457-1,262 Provision for pension payments ) Changes in the cash value of the defined benefit obligation are as follows: in TEUR Jan. 31, 2010 Jan. 31, 2009 Defined Benefit Obligation as of Feb. 01 2,215 2,633 Current service costs Interest costs arising from obligations Effects from compensation payments Payments made Actuarial - profits / + losses Defined Benefit Obligation as of Jan. 31 1,919 2,215

95 95 5) Changes of fair value of the plan assets are as follows: in TEUR Jan. 31, 2010 Jan. 31, 2009 Fair value of plan assets as of Feb. 01 1,262 1,159 Expected yield from plan assets Employer's contribution to pension fund Amounts paid out Actuarial + profits / - losses Fair value of the plan assets as of Jan. 31 1,457 1,262 Plan assets exclusively comprise qualified reinsurance policies. The expected return from plan assets is based on the earnings and market expectations of the respective insurance companies. In the business year 2009/10, actual earnings from plan assets recognised in the consolidated income statement under the position other financial income amounted to TEUR 10 (January 31, 2009: TEUR -130). The estimated employer s contribution for the next business year will probably come to the same amount as for the business year 2009/10. The amounts stated for pension provisions were calculated on the basis of actuarial reports and the projected unit credit method and by applying the following parameters as of January 31, 2010 (January 31, 2009): Assumptions pension payments Jan. 31, 2010 Jan. 31, 2009 Interest rate 5.25 % 5.5 % Pension and salary increases 0 1.5% 0 1.5% Labour turnover rate 0 % 0 % Retirement age for women 62 years 62 years 1 Retirement age for men 62 years 62 years 1 Life expectancy AVÖ 2008 AVÖ 2008 Expected yield from plan assets 3.5 % 4.5 % 1 Transitional provisions for elderly employees and women have been considered. 5) The amounts for the current and the four previous reporting periods are as follows: in TEUR 2009/10 Jan. 31, /09 Jan. 31, /08 Jan. 31, /07 Jan. 31, /06 Jan. 31, 2006 Defined benefit obligations 1,919 2,215 2,633 3,012 3,021 Plan assets 1,457 1,262 1,159 1, Experience-based adjustments of plan liabilities Experience-based adjustments of plan assets

96 Provisions for severance payments The following tables show the details of expenses for severance payments recognised in the consolidated income statement and the amounts for the respective plans stated in the Group s balance sheet. 1) Expenses for severance payments included in the personnel-related expenses: in TEUR Jan. 31, 2010 Jan. 31, 2009 Current service costs Interest costs arising from obligations Effects from compensation payments Expenses in fiscal year -1,682-1,053 2) Items included in the other comprehensive income: in TEUR Jan. 31, 2010 Jan. 31, 2009 Actuarial + profits / - losses from Defined Benefit Obligation Total actuarial + profits / - losses in period Recognised actuarial + profits / - losses as of Feb Total actuarial + profits / - losses in period Recognised actuarial + profits / - losses as of Jan. 31 1, ) Changes in cash value of defined benefit obligations: in TEUR Jan. 31, 2010 Jan. 31, 2009 Defined Benefit Obligation as of Feb. 01 9,990 9,745 Current service costs Interest costs arising from obligations Effects from compensation payments Payments made -1, Actuarial - profits / + losses Defined Benefit Obligation as of Jan. 31 9,618 9,990

97 97 Calculations as of January 31, 2010 and January 31, 2009 are based on the following assumptions: Assumptions severance payments Jan. 31, 2010 Jan. 31, 2009 Interest rate 5.25 % 5.5 % Salary increase 3 % 3 % Labour turnover rate 0 % 0 % Retirement age for women 62 years 2 62 years 2 Retirement age for men 62 years 2 62 years 2 Life expectancy AVÖ 2008 AVÖ Transitional provisions for elderly employees and women have been considered. The severance payment obligations, for which provisions were set aside, are resulting from Austrian employments that started before January 01, A severance payment entitlement arises after three full service years. For members of the Management Board, the period over which the entitlement is built up is based on individual agreements. In the period under review, a total amount of TEUR 237 (2008/09: TEUR 263) for the defined contribution pension model, which applies to all employments in Austria that started after December 31, 2002, was paid to a pension provision fund. The estimated employer s contribution for the next business year will probably come to the same amount as for the past business year. 4) The amounts for the current and the four previous reporting periods are as follows: in TEUR 2009/10 Jan. 31, /09 Jan. 31, /08 Jan. 31, /07 Jan. 31, /06 Jan. 31, 2006 Defined benefit obligations 9,618 9,990 9,745 9,668 8,486 Experience-based adjustments of plan liabilities

98 Provisions for anniversary payments Long-term obligations to employees further include provisions for anniversary payments. 1) Expenses for anniversary payments included in the personnel expenses: in TEUR Jan. 31, 2010 Jan. 31, 2009 Current service costs Interest costs arising from obligations Actuarial - profits / + losses Expenses in fiscal year ) Changes in the cash value of defined benefit obligations are as follows: in TEUR Jan. 31, 2010 Jan. 31, 2009 Defined Benefit Obligation as of Feb Current service costs Interest costs arising from obligations Payments made Actuarial - profits / + losses Defined Benefit Obligation as of Jan Calculations as of January 31, 2010 and January 31, 2009 are based on the following assumptions: Assumptions anniversary payments Jan. 31, 2010 Jan. 31, 2009 Interest rate 5.25 % 5.5 % Salary increase 3 % 3 % Labour turnover rate % 9.68 % Retirement age for women 62 years 3 62 years 3 Retirement age for men 62 years 3 62 years 3 Life expectancy AVÖ 2008 AVÖ Transitional provisions for elderly employees and women have been considered. 3) The amounts of the current and the four previous reporting periods are as follows: in TEUR 2009/10 Jan. 31, /09 Jan. 31, /08 Jan. 31, /07 Jan. 31, /06 Jan. 31, 2006 Defined benefit obligations Experience-based adjustments of plan liabilities

99 PROVISIONS (LONG-TERM AND CURRENT) in TEUR Jan. 31, 2010 Jan. 31, 2009 Long-term tax provisions Long-term provisions Other current provisions 1, Current tax provisions Current provisions 2, The long-term tax provision stated as of January 31, 2009 from the title of subsequent taxation of the operations losses of the AG in Switzerland and Singapore was reversed to the result for the period in the business year 2009/10, since no subsequent taxation in Austria is expected for the following years. Other current provisions as of January 31, 2010 include provisions for guarantees and warranties in the amount of TEUR 215 (January 31, 2009: TEUR 235) as well as provisions for the termination of employments in the amount of TEUR 807 (January 31, 2009: TEUR 0). Current provisions also include a provision for possible rebuilding obligations resulting from the upcoming relocation in Vienna totalling TEUR 476. It is expected, that for all provisions recognised on the balance sheet date, the costs will arise within the next business year. Current tax provisions contain actually incurred provisions for taxes on income, based on current earnings and taking tax loss carry forwards of the individual companies into account. It is assumed that the costs will arise within the business year 2010/11. in TEUR Long-term tax provisions Other current provisions Current tax provisions as of Jan. 31, Addition 0 1, Utilisation Reversal Foreign currency effects as of Jan. 31, , As of January 31, 2009 the long-term and current provisions of the Bene Group were as follows: in TEUR Long-term tax provisions Other current provisions Current tax provisions as of Jan. 31, Addition Utilisation Reversal Foreign currency effects as of Jan. 31,

100 LONG-TERM FINANCIAL LIABILITIES in TEUR Term of > 1 5 years Jan. 31, 2010 Jan. 31, 2009 Term of Term of > 5 years > 1 5 years Term of > 5 years Bonds 41, , Liabilities to banks 9, , Long-term financial liabilities 50, , Type of financing in TEUR Currency Book value Jan. 31, 2010 > 1 5 years Book value Jan. 31, 2010 > 5 years Book value Jan. 31, 2009 > 1 5 years Book value Jan. 31, 2009 > 5 years Effective interest yield Jan. 31, 2010 Interest yield Fixed/ variable Maturity Investment loan EUR 2, , % variable Sept. 30, 2014 Investment loan EUR 7, % fixed Dec. 31, 2014 Bond EUR 1, , % fixed Jan. 31, 2016 Bond EUR 40, % fixed Apr. 29, 2014 Total long-term 50, , In addition to regular repayments in the amount of TEUR 207, the change in the business year 2009/10 is resulting from the use of an investment credit of TEUR 7,500 in the context of the European Recovery Program (ERP) resp. the issue of a corporate bond in the amount of TEUR 40,000. The ERP investment loan (with a term until December 31, 2014) has a fixed interest rate and a guarantee commission depending on financial key figures. It is used to finance the acquisition of new machinery and the construction of the research and innovation centre. The bond (denomination of TEUR 50) placed with Austrian institutional investors has a fixed interest rate of % p.a.; the term is five years. If certain financing figures are not met, there may be an increase of the interest rate by 200 basis points, however it may not lead to an early repayment of the bond. The agreed conditions and other terms of the investment loan with a book value of TEUR 2,052 as of January 31, 2010 changed during the past business year (increase of the margin by 0.75 % p.a.) whereas those of the bond with a book value of TEUR 1,067 as of January 31, 2010 remained unchanged. As of the balance sheet date January 31, 2010 no securities were pledged as physical securities for noncurrent financial liabilities (January 31, 2009: TEUR 0). Furthermore, as of January 31, 2010 there are no physical securities for long-term financial liabilities (January 31, 2009: TEUR 0).

101 CURRENT FINANCIAL LIABILITIES Current financial liabilities have a term of less than 1 year. in TEUR Jan. 31, 2010 Jan. 31, 2009 Current financial liabilities 9,846 19,923 Type of financing Currency Book value Jan. 31, 2010 Book value Jan. 31, 2009 Effective interest yield, Jan. 31, 2010 Interest yield Fixed/variable Maturity Current account EUR 0 6,350 n.a. variable n.a. Working capital loan EUR n.a. fixed July 30, 2009 Working capital loan EUR 0 2,000 n.a. variable Feb. 27, 2009 Export promotion loan EUR 5,000 5, % variable revolving Export promotion loan EUR 4,000 4, % variable revolving Investment loan EUR 0 1,208 n.a. fixed Jan. 02, 2010 Investment loan EUR n.a. fixed Jan. 02, 2010 Investment loan EUR % variable Sept. 30, 2014 Bond EUR % fixed Jan. 31, 2016 Total current 9,846 19,923 Although the agreed credit lines increased compared to the prior year, current financial liabilities decreased due to the repayment of used credit lines in the amount of TEUR 8,600 and loans for investments of TEUR 1,498. The conditions (provision fee, spread) slightly increased compared to the previous reference date, whereas the covenants remained unchanged. Concerning the collateralisation of the export promotion loans in the business year 2009/10 (business year 2008/09) see point 4.7 Other receivables and assets.

102 GOVERNMENT GRANTS AND SUBSIDIES in TEUR Jan. 31, 2010 Jan. 31, 2009 as of Feb Granted during the business year 1,231 0 Released to income statement as of Jan. 31 1, thereof current thereof non-current 1, Government grants and subsidies include the following: in TEUR Jan. 31, 2010 Jan. 31, 2009 Subsidy NÖ WF Fonds Subsidy Land NÖ Abbiegespur (turning lane) 2 6 Subsidy AMF acc. art. 35A Subsidy ERDF NÖ Subsidy AMFG Land NÖ Total grants/subsidies 1, thereof current thereof non-current 1, Within the Bene Group, generally grants consider nonreimbursable public grants for capital expenditure in property, plant and equipment, regional development and the creation and securing of jobs. They are released over the weighted useful life of the sponsored investments in the result for the period. The AMF subsidy according to article 35A 2004 with a book value of TEUR 272 on January 31, 2010 is tied to securing resp. creation of jobs, whereas the criteria of the subsidy NÖ WF Fonds 2003 with a book value of TEUR 272 is linked to investments in property, plant and equipment at the site in Waidhofen/Ybbs. The change in the past year is resulting from two new subsidies: on the one hand a grant of the European Regional Development Fund (ERDF) with a book value of TEUR 813 as of January 31, 2010, and on the other hand a subsidy from the NÖ Wirtschafts- und Tourismusfonds (economic and tourism fund of Lower Austria), which is directly related to the ERDF-grant and as of January 31, 2010 has a book value of TEUR 396. Whereas the grant of funds from the European Regional Development Fund (ERDF) is tied to a certain investment volume in property, plant and equipment, the criteria for the subsidy from the NÖ Wirtschafts- und Tourismusfonds is bound to the creation of jobs. As of the balance sheet date January 31, 2010 it is assumed that all required covenants will be met in the future. If these expectations should not be met, the noncompliance with the required covenants could lead to proportionate repayment of subsidies.

103 TRADE PAYABLES, OTHER LIABILITIES AND PREPAYMENTS RECEIVED in TEUR Jan. 31, 2010 Jan. 31, 2009 Prepayments received 3,082 10,536 Trade payables 15,675 12,773 Trade payables 18,756 23,309 Other liabilities 15,785 17,058 Total 34,542 40,367 The received prepayments mainly result from customers advanced payments in the context of usual payment terms for large-scale projects of MOSKVA OOO, RUS OOO (January 31, 2010: TEUR 1,045, January 31, 2009: TEUR 7,489) and AG (January 31, 2010: TEUR 1,469, January 31, 2009: TEUR 2,073). Trade payables do not bear interests and normally have a maturity of days. Other liabilities include mainly liabilities to Austrian and foreign tax authorities in the amount of TEUR 3,414 (January 31, 2009: TEUR 2,557) as well as other short-term liabilities to employees (such as holiday or compensatory time credits) amounting to TEUR 5,507 (January 31, 2009: TEUR 10,626). In the business year 2009/10, this position further includes losses from the valuation of forward exchange dealings in GBP and AED existing within the Bene Group as of January 31, 2010 in the amount of TEUR 327 (see point 7.7 Derivative financial instruments). On the balance sheet date, trade payables and liabilities shown per currency are as follows: in TEUR Jan. 31, 2010 Jan. 31, 2009 Trade payables in EUR and other currencies 14,440 11,129 Trade payables in GBP 1,202 1,643 Trade payables in RUB 33 1 Total 15,675 12,773

104 104 5 NOTES TO THE CONSOLIDATED INCOME STATEMENT 5.1 REVENUE in TEUR 2009/ /09 Sale of goods 177, ,516 Sale of planning 1,319 1,422 Sale of services 3,086 2,781 Sales rebates -2,441-3,400 Sales Revenue 179, ,318 With regard to the development of revenues of the different markets we refer to the segment reporting (see point 13 Segment reporting). 5.2 OTHER INCOME in TEUR 2009/ /09 Income from disposal of assets Income from exchange rate differences 1,382 2,380 Other income 1,962 2,477 Other income 3,428 4,913 Other income of the business year 2009/10 mainly concerns the AG. This item includes other proceeds from waste disposal in the amount of TEUR 164 (2008/09: TEUR 399), contributions for semi-retirement and the apprentice premium totalling TEUR 192 (2008/09: TEUR 174), the reversal of government grants and subsidies of TEUR 155 (2008/09: TEUR 141), rental revenue amounting to TEUR 40 (2008/09: TEUR 40) and other income of TEUR 1,411 (2008/09: TEUR 1,723). 5.3 EXPENSES FOR MATERIALS AND SUPPLIES in TEUR 2009/ /09 Material expenses -71, ,502 Cost of purchased goods -2,012-2,060 Assembly, production & logistics (purchased services) -8,159-15,422 Other external personnel (purchased services) ,983 Materials and supplies -82, ,967

105 PERSONNEL EXPENSES in TEUR 2009/ /09 Total wages -13,515-15,217 Total salaries -36,047-45,203 Severance payments -2,370-1,401 Pension payments Expenses for social security contributions according to legal regulations -12,369-14,182 Other voluntary personnel expenses Personnel expenses -65,383-77,481 Expenses for severance payments are as follows: in TEUR 2009/ /09 Expenses from defined benefit plans -1,682-1,053 Expenses from contributory plans Other expenses Total expenses for severance payments -2,370-1,401 Expenses for pension scheme include the following items: in TEUR 2009/ /09 Expenses from defined benefit plans Expenses from contributory plans Other expenses 0-3 Total expenses for pension scheme

106 OTHER EXPENSES in TEUR 2009/ /09 Marketing expenses -3,529-5,157 Commissions -3,252-3,115 Training, recruiting Other expenses for external personnel Product development Cost of dispatch -3,071-6,068 Rent & lease -5,170-5,109 Building cost Maintenance -2,058-2,876 Motor vehicles -4,007-4,410 Consulting -3,547-3,423 Travelling expenses -2,373-3,803 Communication expenses -1,442-1,709 Exchange losses -1,150-2,580 Other sales costs -1, Insurances Other administrative costs -3,407-1,777 Taxes (not on income) Other expenses -38,261-44,733 The position consulting includes expenditure for the auditor of the annual consolidated financial statements of the AG in Waidhofen/Ybbs, and consists of: in TEUR 2009/ /09 Fees for consolidated financial statements and annual audit Certification services -5 0 Tax consultancy services Other services Total FINANCIAL RESULT in TEUR 2009/ /09 Interest expense -2,974-1,241 Income from interest Other financial expenses ,933 Other financial income Financial result -2,831-2,689

107 107 As of January 31, 2010, accrued interests of the corporate bond in the amount of EUR 2,010 payable in April 2010 are stated in the position interest expense. Furthermore, the position includes interests for long-term financial liabilities and overdrafts totalling TEUR 911. Other financial income as of January 31, 2010 reports distributed profits from the sale of the AG s current securities available for sales in the amount of TEUR 77. As of January 31, 2009, the position included dividends in the amount of TEUR 79 as well as sales profits from disposal of the AG s current securities available for sale of TEUR 45. Other financial expenses as of January 31, 2010 include the recognised impairment losses of current securities available for sale amounting to TEUR 259 due to essential and permanent changes in value stated in the net income for the period (see point 4.8 Cash and cash equivalents) and the loss on disposal from the sale of the Bene Innovation GmbH in the past business year in the amount of TEUR 9 (see point 2.2 Principles of consolidation). 5.7 EARNINGS PER SHARE Non-diluted earnings per share are calculated by dividing net earnings for the period attributable to bearers of ordinary shares of the parent company by the weighted average number of ordinary shares outstanding during the year. During the period under review there was no dilutive effect on ordinary shares. Thus the diluted earnings per share correspond to the undiluted earnings per share. The calculation of earnings per share is based on the following earnings attributable to the bearer of ordinary shares of the parent company: in TEUR 2009/ /09 Earnings attributable to common shareholders -17,257 4,597 The calculation of earnings per share is based on the following weighted average ordinary shares: In thousands 2009/ /09 Weighted average number of common shares 24,347 24,347 During the business year 2009/10 no transactions with ordinary shares or potential ordinary shares took place. Thus the weighted average number of ordinary shares corresponds to the situation on January 31, In the period between the balance sheet date and the preparation of the consolidated financial statements no transactions with ordinary shares or potential ordinary shares took place. 5.8 DIVIDEND PROPOSED AND DISTRIBUTED The Management Board proposes to the shareholders meeting not to distribute a dividend for the business year 2009/10 (business year 2008/09: no distribution of dividends).

108 108 6 NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT The Bene Group s cash flow statement shows the Group s changes in cash during the reporting period resulting from the inflow and outflow of funds. The cash flow statement differentiates between cash flows from operating activities, from investing activities and from financing activities. Amounts recognised of fully consolidated foreign subsidiaries are converted as of the balance sheet date. The cash flow statement is prepared according to the indirect method. Cash and cash equivalents comprise liquid funds. The cash flow from operating activities amounts to TEUR 7,438 (business year 2008/09: TEUR 15,218). This was achieved despite the clearly negative operating result in particular by active measures in the working capital and receivables management as well as by the consistent use of payment conditions of suppliers. As a result of expenses for replacement, expansion and rationalisation investments in the amount of TEUR -14,248 (business year 2008/09: TEUR -20,920) a negative cash flow from investing activities of TEUR -12,672 (business year 2008/09: TEUR -19,651) is arising. In the business year 2009/10, the position proceeds from disposal of subsidiaries includes the loss from sale of the Bene Innovation in the amount of TEUR -8 (see point 2.2 Principles of consolidation). In addition, in the business year 2009/10, proceeds from disposal of the Bene Consulting companies are stated in the amount of TEUR 394 (see point 4.3 Investments in affiliated companies). As in the business year 2008/09, likewise in the business year 2009/10 expenditures related to the acquisition of additional shares in the PLC, London are included in the position expenditures for the acquisition of minority interests (business year 2009/10: TEUR 199, financial year 2008/09: TEUR 541) (see point 3 Acquisitions and change of minority interests). The essential changes in the cash flow from financing activities are resulting from the issue of the corporate bond in the amount of TEUR 40,000 and from the borrowing of a long-term investment loan subsidised by the ERP-fund (see point 4.13 Long-term financial liabilities). In addition to repayments of existing, long-term investment loans, short-term working credit lines were fully repaid from the cash reserves of the bond (see point 4.14 Current financial liabilities). In the past business year, no dividends were distributed (business year 2008/09: TEUR 5,356). Thus, the cash flow from financing activities amounts to TEUR 37,337 (business year 2008/09: TEUR 900). The cash flow statement for the business year 2009/10 (business year 2008/09) takes the following non-cash relevant transactions into account: Additions to property, plant and equipment and intangible assets include a non-cash relevant amount of TEUR 323 (business year 2008/09: TEUR 1,111), which is mainly related to the expansion investments for the production site in Waidhofen/Ybbs. TEUR 2,010 (business year 2008/09: TEUR 125) of the interest expenses in the business year 2009/10 reported in the consolidated income statement refer to non-cash deferred interests. Impairment expenses of short-term securities classified as available for sale, which in the business year 2009/10 are recognised in the income statement under the position,other financial expenses amount to TEUR 259 (business year 2008/09: TEUR -1,933) (see point 5.6 Financial result).

109 109 7 FINANCIAL RISK MANAGEMENT The Bene Group s essential financial instruments include cash and cash equivalents and current financial funds, long-term and current financial instruments available for sale, trade receivables, other receivables and assets, long-term and current financial liabilities, trade liabilities as well as other liabilities. As of the balance sheet date January 31, 2010 (January 31, 2009) there are forward exchange dealings for the hedging of currency risks from existing projects in place (see point 7.7 Derivative financial instruments). There is no hedge accounting as defined in IAS 39. In the past business year and in the business year 2008/09 no deals with derivatives took place. 7.1 PRINCIPLES AND METHODS OF RISK MANAGEMENT As internationally operating company, the Bene Group is exposed to a variety of risks in the context of its business activity. In this respect, the economic cycle of the sales markets plays an important role, since the investment activity is usually lower in a weak economic environment, for both, the purchase of office furniture and other furniture. However, the geographic diversification of the Bene counteracts this fact; not all markets, in which Bene is present, undergo the same development or are in the same economic cycle. Due to Bene s broad geographic spread and at the same time, the focus on the core business, country specific risks never threaten the overall Group. Moreover, due to many years of market presence and international experience, the Management may identify risks at an early stage and appropriately evaluate these risks. With regard to its assets, liabilities and planned transactions, the Bene Group is particularly subject to risks arising from the change in exchange rates, interest rates and stock market prices. Target of the financial risk management is to limit these market risks by permanent operating and finance-oriented activities. According to the assessment of risk, selected derivative hedging instruments are used. However, basically only the risks with major impact on the Group s cash flow are hedged. Derivative financial instruments are exclusively used as economic hedging tools, i.e. these are not applied for trading or other speculative purposes. For reduction of default risk, hedges are principally concluded only with leading financial institutes. The basic principles of the financial policy are specified by the Management Board and are documented in writing in the Corporate Treasury Guidelines. They are updated on a yearly basis. This guideline constitutes a key element of the documentation and monitoring of all ICS relevant processes within the treasury. The implementation of the financial policy and the ongoing risk management lie in the responsibility of the Group s Treasury. The early identification, the monitoring and the management of finance risks constitute essential elements of Bene s group-wide controlling, accounting and treasury systems. Permanent controlling and regular reporting shall ensure the identification of major risks at a very early stage and if necessary initiate counter measures. Furthermore, the Management Board is regularly informed about the extent and the amount of the current risk exposure and is involved by release processes and monitoring of the ICS.

110 CREDIT RISK Credit risks or the risk of payment default on the part of partners are mitigated by credit checks and limits as well as monitoring routines. Therefore, external ratings of Dun & Bradstreet (D&B) are used. Accordingly, as of the balance sheet date, there are no essential concerns with regard to our contract partners credit quality; this particularly applies to those financial assets, which are neither overdue nor impaired. As far as appropriate, the Company receives government export guarantees or guarantees from similar private organisations to reduce the risk of payment default. In addition, there is no significant concentration of default risks since these are widely spread over a large number of contracting parties. The maximum default risk is limited to the book value recognised under trade receivables, other receivables (see point 4.7 Other receivables and assets). For other financial assets of the Group, such as cash and cash equivalents and financial instruments available for sale, the maximum credit risk in case of failure of the contracting party likewise corresponds to the instruments book value (see point 4.8 Cash and cash equivalents). The credit risk is limited as the Group only cooperates with financial partners with good credit standing. Accordingly, the Bene Group does not hold loan securities. As of the balance sheet date January 31, 2010, there are no financial assets within the Bene Group, of which the contract terms have been amended. 7.3 LIQUIDITY RISK A group-wide financial and liquidity planning ensures that sufficient liquidity is available or that a necessary financing is guaranteed by an adequate credit line to fulfil the Group s financial obligations. The daily accumulation of the liquidity situation of all Bene companies is ensured by a central cash management system and guarantees a continued transparency, but also quick availability of liquidity. Liquid funds not needed in the short-term are invested in time deposits or in quoted, conservative securities. The investment profile was approved by the Supervisory Board and is documented in the treasury guidelines. As of the balance sheet date, Bene holds cash and cash equivalents in the amount of TEUR 48,162 (January 31, 2009: TEUR 15,474) (see point 4.8 Cash and cash equivalents). As of January 31, 2010, unused credit lines come to TEUR 44,000 (January 31, 2009: TEUR 26,900). The contracted (non-discounted) interest payments and repayments for original financial instruments as of January 31, 2010 are as follows: Book value Jan. 31, 2010 Cash Flows 2010/11 Cash Flows 2011/12 Cash Flows 2012/13 Cash Flows 2013/14 Cash Flows 2014/15ff in TEUR Interest Repayment Interest Repayment Interest Repayment Interest Repayment Interest Repayment Trade payables -15,675-15,675 thereof trade payables in EUR and other currencies -14,440-14,440 thereof trade payables in GBP -1,202-1,202 thereof trade payables in RUB Other liabilities -15,785-15, Financial liabilities (incl. bonds) -60,777-3,400-9,846-3,161-2,627-3,085-2,643-2,978-2,660-2,879-43,002

111 111 in TEUR The situation as of January 31, 2009 was as follows: Book value Jan. 31, 2009 Cash Flows 2009/10 Cash Flows 2010/11 Cash Flows 2011/12 Cash Flows 2012/13 Cash Flows 2013/14ff Interest Repayment Interest Repayment Interest Repayment Interest Repayment Interest Repayment Trade payables -12,773-12,773 thereof trade payables in EUR and other currencies -11,129-11,129 thereof trade payables in GBP -1,643-1,643 thereof trade payables in RUB -1-1 Other liabilities -17,058-16, Financial liabilities (incl. bonds) -23, , ,139-1,401 The overview of contractually agreed (non-discounted) interest payments and repayments as of January 31, 2010 includes all financial liabilities on the balance sheet date and for which payments were already contracted. Foreign currency amounts were converted as of the balance sheet date s exchange rate. The variable interest payments were determined by applying the interest rates of January 31, Financial liabilities repayable at any time are always attributed to the earliest date. During the business year 2009/10 (business year 2008/09), within the Bene Group there were no contract and payment defaults with respect of the fulfilment of financial liabilities. 7.4 MARKET PRICE RISK Due to its business activities, the Bene Group is exposed to various market risks. These risks include the interest, currency and security price risk. For the presentation of market risks, IFRS 7 requires sensitivity analyses, which reflect interdependencies of hypothetic changes of relevant risk variables on earnings and equity, assuming that all other risk variables remain constant. The periodic impacts are determined by referring the hypothetic changes of risk variables to the holding of financial instruments during the business year.

112 Interest risk The Bene Group is subject to interest risks mainly in the euro zone. Yearly, the Management Board defines for a future period of one year the mix of fixed and variable interest-bearing net financial liabilities. About 19.0 % of the interests on the Group s financial liabilities are variable. The Management Board judges the risk of changes in interest rates on financial investments and liabilities to be calculable. Accordingly, derivative financial instruments for protection against interest rate risk are not applied. On the balance sheet date, interest rates were as follows: 2009/ /09 Credit on current accounts 0.1 % 1.5 % Short-term investments 0.7 % 4.0 % Overdraft credits n.a. 4.8 % Current financial liabilities 1.6 % 4.0 % Long-term financial liabilities 1.9 % 4.4 % Bonds 6.9 % 6.3 % In compliance with IFRS 7, interest risks are illustrated by means of sensitivity analyses. These show the impact of changes of the market interest rates on interest payments, earnings and expenses as well as other earnings positions and equity, assuming that all other risk variables remain constant. Interest sensitivities are based on the following assumptions: If, in the business year 2009/10 the market interest rate level had been higher/lower by 100 basis points (business year 2008/09: 100 basis points), earnings would have been higher/lower by TEUR (business year 2008/09: TEUR 59.4). The hypothetic impact on income of TEUR results from the potential effects of original, variable interest-bearing financial debt.

113 Currency risk Currency risks in the sense of IFRS 7 result from financial instruments, which are denominated in a currency deviating from the functional currency and which are of monetary nature. All non-functional currencies, in which the Bene Group uses financial instruments, are generally considered as relevant risk variables. The currency risks of the Bene Group only arise from operating activities. Currency risks are hedged as far as they have a major impact on the Group s cash flows. The individual Group companies basically conduct their operating activities in their respective functional currency. Consequently, the Bene Group is exposed to foreign currency risks due to the invoicing of sales of individual subsidiaries in other currencies than the Group s currency. Basically this concerns GBP, RUB and AED. In the case of high-risk exposure, the Bene Group uses foreign exchange dealings for hedging. As a result of these hedging activities, on the closing date, the Bene Group was not exposed to major currency risks from operating activities. exchange gains/losses would have been higher/ lower by TEUR 1,886 (in the business year 2008/09: TEUR 3,879 higher/lower). The hypothetic impact on income of TEUR 1,886 is mainly arising from the currency sensitivities, which basically concern sales and purchases in the respective local currency. If, in the business year 2009/10, the euro had been appreciated/depreciated by 10.0 % against the RUB, equity would have been higher/lower by TEUR 386 (in the business year 2008/09: TEUR 227 higher/lower). The hypothetic impact on equity of TEUR 386 is mainly arising from the currency sensitivities due to the translation of the foreign subsidiaries currencies into the Group s currency EURO in the course of the consolidation. If, in the business year 2009/10, the euro had been appreciated/depreciated by 10.0 % against the GBP, exchange gains/losses would have been higher/lower by TEUR 1,122 (in the business year 2008/09: TEUR 1,558 higher/lower). The hypothetic impact on income of TEUR 1,122 is mainly arising from the currency sensitivities, which basically concern sales and purchases in the respective local currency. Due to the business volume of Bene subsidiaries, financial instruments in RUB and GBP are explained in more detail. With regard to the currency risk from AED, no sensitivity calculations were made, since the overdue receivables in AED are of minor importance. If, in the business year 2009/10, the euro had been appreciated/depreciated by 10.0 % against the RUB, If, in the business year 2009/10, the euro had been appreciated/depreciated by 10.0 % against the GBP, equity would have been higher/lower by TEUR 50 (in the business year 2008/09: TEUR 55 higher/lower). The hypothetic impact on equity of TEUR 50 is mainly arising from the currency sensitivities due to the translation of the foreign subsidiaries currencies into the Group s currency EURO in the course of the consolidation.

114 Security price risk According to IFRS 7, security price risks arise from financial instruments, of which the price is subject to permanent changes. Price-relevant risk variables are not stated separately, but are collectively reflected in the price performance. The Bene Groups security price risks result only from the changes in the securities held, which are classified as available for sale and which consequently are recognised in the IAS 39 reserve as long as it concerns value fluctuations. In case of significant and permanent impairment, the valuation loss is recognised with effect on net income (see notes to the income statement). Appreciations of securities available for sale, which are classified as equity are recognised in subsequent periods in the IAS 39 reserve of the other comprehensive income. Risks from price variations are not actively hedged. With the definition of the maximum risk profile, the established treasury guidelines contribute to the passive limitation of risks. For the presentation of market risks, IFRS 7 requires sensitivity analyses, which illustrate impacts of hypothetic changes of relevant risk variables on earnings and equity, assuming that all other risk variables remain unchanged. The security price risks are based on the following assumptions: If, as of January 31, 2010 the security price had been higher/lower by 10.0 %, equity would have been higher/ lower by TEUR 439 (January 31, 2009: TEUR 371). The hypothetic effect on equity of TEUR 439 is arising from potential changes in price. A permanent and significant impairment is recognised in the net income.

115 CAPITAL MANAGEMENT Priority target of the Group s capital management is to ensure that the Group maintains a high credit rating and a good equity ratio for the benefit of its business activity and for the maximisation of the shareholder value. The Group controls its capital structure and makes adjustments taking changes of the economic environment into account. For maintaining or adjusting the capital structure, the Group may adjust dividend payments to the shareholders or return capital to the shareholders or issue new shares. In the business year 2009/10, a bond in the amount of TEUR 40,000 was issued to strengthen the capital structure. Apart from that, no modifications of targets, guidelines or procedures were made in the reporting and reference period. The Group controls its capital by a leverage ratio, which corresponds to the ratio of net financial debt to equity. According to the group-internal guidelines the defined dept equity ratio should not exceed %. Net financial debts include interest-bearing loans less cash and cash equivalents and short-term financial means. Equity comprises the total equity of the Bene Group. As of January 31, 2010, the situation is as follows: in TEUR Jan. 31, 2010 Jan. 31, 2009 Interest-bearing financial liabilities 60,777 23,582 - Short-term financial assets -4,389-3,711 - Cash and short-term financial assets -43,773-11,763 Net debt 12,615 8,108 Total equity 51,250 68,073 Equity and net debt 63,864 76,181 Debt-equity ratio 19.8 % 10.6 %

116 FINANCIAL INSTRUMENTS As of the balance sheet date, the book value, the fair values and the amounts stated of financial instruments as per valuation categories and classes are as follows: CLASSES of financial instruments in TEUR Valuation category according to Book value IAS 39 Jan. 31, 2010 Balance sheet recognition according to IAS 39 Fair value in Amortised other comprehensive acquisition Fair value in costs income net income Fair Value, Jan. 31, 2010 ASSETS Cash and cash equivalents LaR 43,773 43,773 43,773 Trade receivables Total LaR 25,828 25,828 25,828 Trade receivables EUR and other currencies LaR 23,518 23,518 23,518 Trade receivables GBP LaR 1,466 1,466 1,466 Trade receivables RUB LaR Receivables and other assets LaR 4,967 4,967 4,967 Available for sale financial assets AfS 4,389 4,389 4,389 LIABILITIES Trade payables Total LaR -15,675-15,675-15,675 Trade payables EUR and other currencies LaR -14,440-14,440-14,440 Trade payables GBP LaR -1,202-1,202-1,202 Trade payables RUB LaR Other liabilities other LaR -15,459-15,459-15,459 Other liabilities forward exchange dealings* HfT Financial liabilities (incl. bonds) LaR -60,777-60,777-66,975 Thereof according to valuation categories pursuant to IAS 39: Loans and Receivables (LaR) Assets LaR 74,568 74,568 74,568 Loans and Receivables (LaR) Liabilities LaR -91,910-91,910-98,108 Available for sale financial assets (AfS) AfS 4,389 4,389 4,389 Held for Trading Liabilities (HfT) HfT * concerning derivative financial instruments see point 7.7

117 117 As of January 31, 2010, financial instruments not being subject to IFRS 7 resp. non-financial assets and nonfinancial debt are as follows: Non-financial assets in TEUR Book value Jan. 31, 2010 Intangible assets 13,909 Property, plant and equipment 48,191 Deferred tax assets 6,809 Inventories 13,829 Equity and non-financial liabilities in TEUR Book value Jan. 31, 2010 Equity -51,250 Liabilities to employees -10,704 Long-term and current provisions -2,454 Prepayments received -3,082 Government grants, deferred tax liabilities -1,969

118 118 As of January 31, 2009, book values, fair values and amounts stated of financial instruments as per valuation categories and classes are as follows: CLASSES of financial instruments in TEUR Valuation category according to Book value IAS 39 Jan. 31, 2009 Balance sheet recognition according to IAS 39 Fair value in Amortised other comprehensive acquisition Fair value in costs income net income Fair Value, Jan. 31, 2009 ASSETS Cash and cash equivalents LaR 11,763 11,763 11,763 Trade receivables Total LaR 39,228 39,228 39,228 Trade receivables EUR and other currencies LaR 35,263 35,263 35,263 Trade receivables GBP LaR 3,495 3,495 3,495 Trade receivables RUB LaR Receivables and other assets other LaR 6,032 6,032 6,032 Receivables and other assets forward exchange dealings* HfT Available for sale financial assets AfS 3,711 3,711 3,711 LIABILITIES Trade payables Total LaR -12,773-12,773-12,773 Trade payables EUR and other currencies LaR -11,129-11,129-11,129 Trade payables GBP LaR -1,643-1,643-1,643 Trade payables RUB LaR Other liabilities LaR -17,058-17,058-17,058 Financial liabilities (incl. bonds) LaR -23,582-23,582-23,692 Thereof according to valuation categories pursuant to IAS 39: Loans and Receivables (LaR) Assets LaR 57,022 57,022 57,022 Loans and Receivables (LaR) Liabilities LaR -53,412-53,412-53,522 Available for sale financial assets (AfS) AfS 3,711 3,711 3,711 Held for Trading Assets (HfT) HfT * concerning derivative financial instruments see point 7.7

119 119 As of January 31, 2009, financial instruments not being subject to IFRS 7 resp. non-financial assets and nonfinancial debt are as follows: in TEUR Book value Jan. 31, 2009 Investments in affiliated companies 391 Non-financial assets in TEUR Book value Jan. 31, 2009 Intangible assets 13,140 Property, plant and equipment 45,283 Deferred tax assets 6,736 Inventories 19,116 Equity and non-financial liabilities in TEUR Book value Jan. 31, 2009 Equity -68,073 Liabilities to employees -11,546 Long-term and current provisions -1,238 Prepayments received -10,536 Government grants, deferred tax liabilities -798 The fair value of financial assets and liabilities corresponds to the book value stated as of January 31, 2010 with the exception of fixed interest-bearing financial liabilities: Due to the relatively short term, the book value of cash and cash equivalents as well as current financial assets corresponds to the market value. Securities held as long-term and current assets are classified as available for sale and thus are assessed at the fair value as of the balance sheet date. Due to the short-term maturity of current financial liabilities, their book value corresponds basically to the fair value. The fair value of variable interest-bearing long-term financial liabilities basically corresponds to the book value. The Management is of the opinion that the risk of interest rate changes for financial assets and other liabilities is within a reasonable scope. The book values of receivables and liabilities recognised at amortised acquisition costs basically correspond to the fair values.

120 120 The book values and fair values of fixed interest-bearing financial liabilities as of January 31, 2010 are as follows: Book value Fair value Book value Fair value in TEUR Jan. 31, 2010 Jan. 31, 2010 Jan. 31, 2009 Jan. 31, 2009 FIXED INTEREST BEARING Investment loan 0 0 1,208 1,208 Investment loan Investment loan Investment loan 7,500 7, Bond 1,715 1,877 1,922 2,029 Bond 40,000 45, TOTAL 49,215 55,412 3,670 3,780 The fair value of the investment loan (ERP-loan for research and development) in the amount of TEUR 7,627 as well as of the two bonds in the amount of TEUR 1,877 resp. TEUR 45,908 were determined as cash values of the debt related payments applying the valid interest structure curve. On the balance sheet date January 31, 2010, the Bene Group applies the following hierarchy for the determination and recognition of fair values of financial instruments depending on the valuation method: Level 1: Quoted (unadjusted) prices on active markets for similar assets or liabilities. Level 2: Procedures, where all input parameters, which have a major impact on the fair value recognised are directly or indirectly observable. Level 3: Procedures using input parameters, which have a major impact on the fair value recognised and are not based on observable market data. in TEUR Jan. 31, 2010 Level 1 Level 2 Level 3 Assets measured at fair value Available for sale financial assets 4,389 4, Liabilities measured at fair value Financial liabilities measured at fair value in the net income: Forward exchange dealings In the past business year, there were no transfers between the valuations at fair value of level 1 and level 2.

121 DERIVATIVE FINANCIAL INSTRUMENTS As of January 31, 2010, the Bene Group uses five forward exchange dealings to hedge future currency risks arising from existing projects, which will be invoiced in GBP and AED (January 31, 2009: four forward exchange dealings in GBP): in EUR Market value as of Jan. 31, 2010 Fair Value as of Jan. 31, 2010 Term until GBP 1,500,000 foreign exchange sales 1,649,077-81,155 Apr. 29, 2010 GBP 1,500,000 foreign exchange sales 1,648,895-80,877 July 30, 2010 GBP 1,500,000 foreign exchange sales 1,648,171-81,550 Oct. 29, 2010 GBP 1,500,000 foreign exchange sales 1,646,542-82,734 Jan. 28, 2011 AED 933,404 foreign exchange sales 181, Mar. 31, 2010 Total 6,774, ,598 As of January 31, 2010, the fair value was recognised in the net income (position other expenses ). In the past business year, losses from forward exchange dealings were recognised in the amount of TEUR 459 (business year 2008/09: profits in the amount of TEUR 206). Derivative financial instruments are stated in the consolidated balance sheet in the positions other liabilities. As of January 31, 2009 the situation was as follows: in EUR Market value as of Jan. 31, 2009 Fair Value as of Jan. 31, 2009 Term until GBP 1,500,000 foreign exchange sales 1,722,158 50,631 Apr. 30, 2009 GBP 1,500,000 foreign exchange sales 1,724,138 51,777 July 31, 2009 GBP 1,500,000 foreign exchange sales 1,725,129 51,804 Oct. 30, 2009 GBP 1,500,000 foreign exchange sales 1,726,122 51,862 Jan. 29, 2010 Total 6,897, ,074 In both business years (2009/10 and 2008/09) no derivative financial instruments were applied for speculative purposes.

122 NET RESULT ACCORDING TO VALUATION CATEGORIES As of the balance sheet date January 31, 2010: in TEUR Net result Jan. 31, 2010 from interest from income from securities from fair value valuation in net income from FX valuation from value adjustment from derecognition from fair value valuation in other comprehensive income Loans and Receivables (LaR) Assets -1, , Loans and Receivables (LaR) Liabilities -2,783-2, Available for sale financial assets (AfS) Held for Trading Liabilities (HfT) As of January 31, 2009, the net result as per valuation category was as follows: in TEUR Net result Jan. 31, 2009 from interest from fair value valuation in net income from FX valuation from value adjustment from disposal from de-recognition Loans and Receivables (LaR) Assets Loans and Receivables (LaR) Liabilities -1,783-1, Available for sale financial assets (AfS) -1, , Held for Trading Assets (HfT) In the past business year, there were no restatements or reclassifications of financial assets. With the exception of interest expenses and earnings, the individual components of the net result are presented under the position other expenses resp. under the position other income. The interest result and changes of the available for sale financial assets affecting net income are stated under the position financial result.

123 DEVELOPMENT OF THE IAS 39 RESERVE in TEUR as of Feb. 01, Valuation changes in other comprehensive income -645 Recycling in net income 920 as of Jan. 31, as of Feb. 01, Valuation changes in other comprehensive income 703 as of Jan. 31, The presentation of the IAS 39 reserve is based on the consideration of deferred taxes. In the business year 2009/10, impairments in the amount of TEUR 259 were stated in the net income (position other financial expenses ) (business year 2008/09: TEUR 1,933) RENT AND LEASE The Group has incurred several lease obligations for its sales areas, show rooms, office and storage spaces. These rental agreements have an average term between 1 and 5 years and partly include options for prolongation. Furthermore, the Group has entered several leasing agreements for vehicles. These leasing contracts have an average duration between 3 and 5 years and partly include options for prolongation and options for purchase at residual value. These rental and leasing agreements do not include any limitations of the Group s activities with respect to dividends, additional debts or other additional leasing agreements. The consolidated income statement for the year under review includes minimum rental and leasing payments in the amount of TEUR 6,407 (2008/09: TEUR 6,277). The duration of minimum rental and leasing payments is as follows: in TEUR Jan. 31, 2010 Jan. 31, 2009 Within 1 year 5,471 6,354 Between 1 and 5 years 9,386 8,911 Longer than 5 years 1,

124 124 8 CONTINGENCIES AND OTHER OBLIGATIONS 8.1 LITIGATION The provision in the amount of TEUR 100 for the title of contract termination of a former distribution partner for the region Serbia and Montenegro already set up on January 31, 2009 is still in place in the unchanged amount, but due to new findings during the business year 2009/10, a solution is expected in the business year 2010/ GUARANTEES AND WARRANTIES Past experience shows that due to the high level of product quality, warranty is rarely claimed. In the event of specific cases, provisions are set aside accordingly. As of January 31, 2010, there are no further major pending legal proceedings (i. e. lawsuits resulting from ordinary business activity, legal disputes concerning product liability, legal actions due to delivery contracts or other contracts as well as patent issues). 9 SUBSEQUENT EVENTS There were no essential subsequent events between the balance sheet date January 31, 2010, and the publication of the consolidated financial statements of the AG, which would have led to a different presentation of the financial and earnings situation.

125 BUSINESS TRANSACTIONS WITH RELATED PARTIES 10.1 TRANSACTIONS WITH RELATED PARTIES The table below shows the total amounts from transactions between related parties and persons in the business years concerned. The Group s controlling, superior parent company is the AG. Distinction is made between affiliated companies, associated persons and persons in key functions. in TEUR Sales proceeds from associated companies and persons Acquisitions from associated companies and persons Amounts due from associated companies and persons Amounts due to associated companies and persons Affiliated companies Associated persons Persons in key functions as of Jan. 31, in TEUR Sales proceeds from associated companies and persons Acquisitions from associated companies and persons Amounts due from associated companies and persons Amounts due to associated companies and persons Affiliated companies Associated persons Persons in key functions as of Jan. 31, Sales to and purchase from related parties are executed at common market conditions. Open items at the end of the business year are not collateralised, are interest-free and are paid in cash. Purchases from affiliated companies include exclusively consulting services purchased from the Bene Consulting Group, whose shares were sold in the third quarter of the past business year (see point 4.3 Investments in affiliated companies). Sales to related parties exclusively refer to deliveries of goods. In the business year 2009/10, purchases from related parties in the amount of TEUR 405 are resulting from consultancy services provided by Manfred Bene (business year 2008/09: TEUR 517) and of TEUR 48 from consultancy services of Kanzlei Wolf Theiss & Partner (business year 2008/09: TEUR 23). There were no other related-party transactions as of January 31, 2010.

126 FITS FOR PERSONS IN KEY FUNCTIONS in TEUR 2009/ /09 Near-term benefits to active and former members of the Management Board and to executives 2,027 2,190 Near-term benefits to active members of the Supervisory Board 8 17 Expenses for pensions Expenses for severance payments and anniversary payments Total 2,108 2,332 Employees in key functions are mainly entitled to pensions from the Bene Group. The total of near-term benefits includes liabilities of TEUR 970 (business year 2008/09: TEUR 1,305) to active and former members of the Management Board and of TEUR 1,057 (business year 2008/09: TEUR 885) to executives. In the business year 2009/10, compensations in the amount of TEUR 8 (business year 2008/09: TEUR 17) were paid to members of the Supervisory Board. Expenses for pensions in the amount of TEUR 34 (business year 2008/09: TEUR 31) refer to the members of the Management Board, in the amount of TEUR 0 (business year 2008/09: TEUR 40) to the members of the Supervisory Board and TEUR 9 business year 2008/09: TEUR 19) to executives. Expenses for severance and anniversary payments account for TEUR 14 (business year 2008/09: TEUR 13) paid to members of the Management Board and TEUR 16 (business year 2008/09: TEUR 22) paid to executives. 11 EXECUTIVE BODIES In the business year 2009/10 the following persons have been appointed to the executive bodies: Management Board: Frank Wiegmann (Chairman) Thomas Bene Roland Marouschek Supervisory Board: Manfred Bene (Chairman) Norbert Zimmermann Karl Sevelda Richard Wolf Martin Hönickl (appointed by the works council) Augustin Hager (appointed by the works council)

127 NUMBER OF EMPLOYEES On the balance sheet date January 31, 2010, the Group employed 1,248 persons (January 31, 2009: 1,518), of which 863 (January 31, 2009: 1,086) were within the AG and 385 (January 31, 2009: 432) within the subsidiaries abroad Austria. In the business year 2009/10, the Group s average headcount stood at 1,390 (2008/09: 1,488) of which 953 (2008/09: 1,006) were white-collar workers and 437 (2008/09: 482) were blue-collar workers. 13 SEGMENT REPORTING Due to the regionally different market characteristics, the geographical regions essentially influence on the Group s business policy. Business decisions are taken with regard to the individual regional market. Likewise, these geographical regions constitute the basis for the internal reporting to the Group s Management. Thus, the segment reporting is based on the geographical regions within the Bene Group. The basis for the segmentation are the registered offices of customers. With regard to the breakdown of sales generated by Bene by product groups, we refer to point 5.1 Revenue. There is no further subdivision of sales of goods due to the consistent product portfolio of office equipment. The performance of planning and assembly services is exclusively a complementary service. The manufacturer is included in the segment Austria. All other countries, which cannot be allocated to any of the other segments, are included in the segment other markets. The key figures of the individual segments of the internal reporting to the Group Management are based on IFRS values. Segment assets include current and non-current assets except deferred tax assets. Segment liabilities consist of current liabilities including liabilities to group companies. The transfer prices between the segments are based on comparable market conditions. The segment reporting for the business year 2009/10 is presented below: in TEUR Austria Germany UK Russia Other markets Adjustment for inter-group transactions Total Group Revenue 95,835 50,936 15,797 23,624 35, ,298 from third parties 53,496 50,936 15,797 23,624 35, ,298 from other segments 42, ,339 0 EBIT per segment -5,267-3,362-1,185-1,395-2, ,020 Result from affilitated companies Segment assets 140,118 16,453 6,246 10,497 12,316-30, ,886 Segment liabilities 34,709 9,873 1,981 9,260 6,099-18,161 43,760 Depreciation, amortisation and impairments 7, ,821

128 128 The segment reporting for the business year 2008/09 was as follows: in TEUR Austria Germany UK Russia Other markets Adjustment for inter-group transactions Total Group Revenue 148,914 70,495 21,494 39,792 56, ,318 from third parties 76,725 70,495 21,494 39,792 56, ,318 from other segments 72, ,189 0 EBIT per segment 1,048 1,127 2,044 3,511 3, ,392 Result from affilitated companies Assets of affiliated companies Segment assets 113,639 29,400 8,290 15,137 18,149-45, ,868 Segment liabilities 47,050 16,880 3,489 10,031 7,035-24,762 59,722 Depreciation, amortisation and impairments 6, ,555 For consolidation purposes the following positions were eliminated in the business year 2009/10 (2008/09): Revenue with other segments in the amount of TEUR 42,339 (TEUR 72,189) Investments of the AG in subsidiaries in the amount of TEUR 13,765 (TEUR 17,673) and receivables from group companies in the amount of TEUR 16,979 (TEUR 28,075) included in segment assets Liabilities to group companies in the amount of TEUR 18,161 (TEUR 24,762) included in segment liabilities As of January 31, 2010 (January 31, 2009), non-current assets included in the segment assets of the Bene Group are as follows: in TEUR 2009/ /09 Austria 55,017 51,298 Other regions 7,442 7,834 Compared to the reference period of the prior year the Bene Group s revenue decreased by TEUR 86,020 to TEUR 179,298. The decline is resulting from the business performance of all segments marked by the tight macroeconomic environment and following is detailed by segment. Compared to the previous year s reference period, the EBIT of the Bene Group fell by TEUR 25,412 to TEUR -14,020. The development of the EBIT is specified by segment. Compared to the reference period of the previous year, sales of the Austria segment dropped by 30.3 % to TEUR 53,496 in the business year 2009/10. With regard to the project business, Bene successfully realised several major projects for renowned companies such as Generali Versicherungen, Ferro Montage Technik or Voest Alpine Stahl. However, despite the increase in gross profit margins, the reduction in sales could not be compensated. As part of extensive cost adjustment measures, all salaried employees in Austria work in a specially developed part-time model. Additionally, Bene has adjusted the production capacities in Waidhofen/Ybbs to the changed capacity utilisation by the reduction in contract workers and the implementation of revolving suspension contracts with reemployment guarantee for industrial workers. Furthermore, non personnel cost savings were realised in all areas and thus the EBIT of the Austria segment decreased by TEUR 6,315 to TEUR -5,267.

129 129 In the business year 2009/10, sales of the Germany segment decreased by 27.7 % to TEUR 50,936 (2008/09 TEUR 70,495). Projects for renowned customers such as VHV Versicherungen (Hanover area), Sparkassen Versicherung (Frankfurt area) and Santander Consumer Bank (Essen/Düsseldorf area) have to be mentioned. Despite the partly considerable drop in sale, the Germany segment succeeded in maintaining the gross profit margins at the previous year s level by increasing the share in own products and by the targeted promotion of profitable product groups. In the same period, the Bene Group further pursued the cost cutting program initiated in the business year 2008/09. Bene focused on hiring freeze, the use of natural labour turnover and on non personnel cost savings. Since the beginning of the second quarter of 2009/10, a selected number of German sites are on short-time work. With the closure of the location in Bonn, Bene could further reduce the fixed and structural costs. In total, the EBIT of the Germany segment recorded a loss in the amount of TEUR -3,362 (2008/09: TEUR 1,127). In the UK segment Bene had to report declines in the business year 2009/10, due to the continuing weak investment climate. In the year under review, sales dropped by 26.5 % to TEUR 15,797 (2008/09: TEUR 21,494). Despite the tense environment, Bene succeed in realising projects with renowned customers such as Nottingham University and Gallaher in the past business year. The cost and efficiency optimisation measures already initiated in the business year 2008/09 could not compensate the negative impacts of the decrease in sales; thus compared to the prior year, the EBIT dropped by TEUR 3,229 to TEUR -1,185 (2008/09: TEUR 2,044). In the Russia segment, the positive trend of the previous years has not continued in the business year 2009/10 and thus compared to the historical record value of the previous year, sales fell by 40.6 % to TEUR 23,624 (2008/09: TEUR 39,792). Despite the dramatic decline in sales, Bene could slightly absorb the impact in Russia due to the highly variable compensation model and the consistent reduction of non personnel costs. The EBIT amounted to TEUR -1,395 (2008/09: TEUR 3,511). Compared to the historical record year 2008/09, sales of the other markets segment decreased by 37.6 % to TEUR 35,445 (2008/09: TEUR 56,813) in the business year 2009/10. The individual sales regions reported quite different trends in the sales development compared to the prior year, such as France with %, Belgium -2.0 %, Middle East % or Poland %. As already in previous years, major projects for customers such as Emirates Nuclear Energy or Dubai Chamber of Commerce were realised in the Middle East region. In France, Bene implemented an innovative reference project for the customer Bouygues Telecom SA. In total, the drop in sales of 37.6 % in the other markets segment led to a deterioration in the EBIT by TEUR -6,472 to TEUR -2,810 in comparison to the historical record figures of the preceding period (2008/09: TEUR 3,662). Waidhofen/Ybbs, April 23, 2010 The Management Board Frank Wiegmann Thomas Bene Roland Marouschek

130 130 DECLARATION OF THE MANAGEMENT BOARD ACCORDING TO article 82 (4) OF THE AUSTRIAN STOCK EXCHANGE ACT Pursuant to article 82 (4) (3) of the Austrian Stock Exchange Act, the signing members of the Management Board as legal representatives of the AG herewith confirm that a.) the consolidated annual financial statements compiled in accordance with the International Financial Reporting Standards (IFRSs) applicable in the EU give a true and fair view of the financial and earnings situation of the Group; b.) the consolidated status report represents the business performance, the earnings and the Group s situation in a manner so as to give a true and fair view of the financial and earnings situation and so as to describe the essential risks and uncertainties, to which the Group is exposed. Waidhofen/Ybbs, April 23, 2010 Frank Wiegmann Thomas Bene Roland Marouschek

131 131 AUDITOR s report *) (TRANSLATION) Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of AG, Waidhofen an der Ybbs, and its subsidiaries (hereinafter referred to as the Group ) for the financial year from February 1, 2009 to January 31, These consolidated financial statements comprise the consolidated balance sheet as at January 31, 2010, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated cash flow statement and the consolidated statement of changes in equity for the year ended January 31, 2010, and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Consolidated Financial Statements and for the Group Accounting The Company s management is responsible for the group accounting as well as the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s Responsibility and Description of Type and Scope of the Statutory Audit Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and Austrian Standards on Auditing as well as in accordance with International Standards on Auditing (ISAs), issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). Those standards require that we comply with professional guidelines and that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion Our audit did not give rise to any objections. Based on the results of our audit in our opinion, the consolidated financial statements comply with legal requirements and present fairly, in all material respects, the financial position of the Group as of January 31, 2010, and of its financial performance and its cash flows for the financial year from February 1, 2009 to January 31, 2010 in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. Comments on the Management Report for the Group Laws and regulations applicable in Austria require us to perform audit procedures to determine whether the consolidated management report is consistent with the consolidated financial statements and whether the other disclosures made in the consolidated management report do not give rise to misconception of the position of the Group. The auditor s report must also include a statement as to whether the consolidated management report for the Group is consistent with the consolidated financial statements and whether the disclosures pursuant to section 243a UGB (Austrian Commercial Code) are appropriate. In our opinion, the management report for the Group is consistent with the consolidated financial statements. The disclosures pursuant to section 243a UGB (Austrian Commercial Code) are appropriate. Vienna, April 23, 2010 Ernst & Young Wirtschaftsprüfungsgesellschaft m.b.h. Gerhard Schwartz Ernst Schönhuber Certified Public Accountant Certified Public Accountant *) On disclosure or reproduction of the consolidated financial statements in a form differing from the audited original German version (e.g. shortened version and/or version translated into another language), the auditor s report may neither be quoted nor referred to without our approval.

132 132 Locations Austria AG Arlbergstraße Bregenz Tel.: Fax: AG Grabenstraße Graz Tel.: Fax: AG Dr. Ferdinand-Kogler-Straße Innsbruck Tel.: Fax: AG Schleppe-Platz Klagenfurt Tel.: Fax: klagenfurt@bene.com AG Rainerstraße Linz Tel.: Fax: linz@bene.com AG Franz-Josef-Straße Salzburg Tel.: Fax: salzburg@bene.com AG Josefstraße 46a 3100 St. Pölten Tel.: Fax: st.poelten@bene.com AG Schwarzwiesenstraße Waidhofen/Ybbs Tel.: Fax: office@bene.com AG Renngasse Vienna Tel.: Fax: wien@bene.com Belgium Bene Belgium BVBA Corporate Village, Da Vincilaan 2 bus 7, Business Centre Zaventem Tel.: Fax: info@bene-belgium.be Bulgaria SOFIA EOOD Porsche Center Sofia 41 Christopher Columbus Blvd Sofia Tel.: Fax: sofia@bene.com Czech Republic Praha spol.s.r.o. The Park Building 2 V PARKU 2294/ Praha 4 Chodov Tel.: Fax: praha@bene.com Germany Bene GmbH Magnolienweg Aschaffenburg Tel.: Fax: aschaffenburg@bene.com Bene GmbH Europacenter Officetower Tauentzienstraße Berlin Tel.: Fax: berlin@bene.com Bene GmbH Sandkaule Bonn Tel.: Fax: bonn@bene.com Bene GmbH Zollhof Düsseldorf Tel.: Fax: duesseldorf@bene.com Bene GmbH Rüttenscheider Straße Essen Tel.: Fax: essen@bene.com Bene GmbH Wasserweg Frankfurt/Main Tel.: Fax: frankfurt@bene.com Bene GmbH Van-der-Smissen-Straße Hamburg Tel.: Fax: hamburg@bene.com Bene GmbH Rheinauhafen, Im Zollhafen Köln Tel.: Fax: köln@bene.com Bene GmbH Greifswalder Straße Laatzen Tel.: Fax: hannover@bene.com Bene GmbH Martin-Luther-Ring Leipzig Tel.: Fax: leipzig@bene.com

133 133 Bene GmbH Gottlieb-Daimler-Straße Mannheim Tel.: Fax: Bene GmbH Destouchesstraße Munich Tel.: Fax: Bene GmbH Breitwiesenstraße Stuttgart Tel.: Fax: Bene GmbH In der Lache Villingen/Schwenningen Tel.: Fax: schwenningen@bene.com Hungary Budapest Kft. Rákóczi út Budapest Tel.: Fax: budapest@bene.com Ireland OFFICE FURNITURE IRELAND LIMITED 50 City Quay Dublin 2 Tel.: Fax: gerhard.grabner@bene.com Netherlands AG Van Nelleweg 2130 Unit Ko , Postbus Rotterdam Tel.: manfred.jansen@bene.com Poland -WARSZAWA Sp.z o.o ul. Al. Armii Ludowej nr Warszawa Tel.: Fax: warszawa@bene.com Romania ROMANIA S.R.L. Str. Tipografilor nr S-Park Aripa 1 2 Parter Bucharest Tel.: Fax: bucuresti@bene.com Russia RUS OOO Strastnov Blvd Moscow Tel.: Fax: moscow@bene.com Serbia AG Predstavništvo u Beogradu Toranj Ušće 12. Sprat Bulevar Mihajla Pupina 6A, Belgrade Tel.: michael.weritz@bene.com Singapore AG SINGAPORE BRANCH 16 Collyer Quai, #11-01, Hitachi Tower Singapur Tel.: Fax: nicholas.mcmicking@bene.com Slovakia Bratislava spol.s r.o. Zilinská Bratislava Tel.: Fax: bratislava@bene.com Slovenia Ljubljana d.o.o. Dunajska cesta Ljubljana Tel.: Fax: ljubljana@bene.com Switzerland AG Waidhofen/Ybbs (AT) Zweigniederlassung Wallisellen Alte Winterthurerstraße 14a 8304 Wallisellen Tel.: Fax: office@bene.com Ukraine KYIV TOV 8 Illinska Street 1 st floor, Podol District, Kyiv Kiev Tel.: Fax: kiev@bene.com United Arab Emirates AG Dubai Airport Free Zone Building 4E Office 4A-711 P.O. Box Tel.: Fax: dubai@bene.com United Kingdom PLC St. John Street London EC1M 4AN Tel.: Fax: london@bene.com

134 134 Imprint Responsible for the content AG Investor Relations Schwarzwiesenstraße 3 A-3340 Waidhofen/Ybbs Consulting and text Pleon Publico Public Relations & Lobbying GmbH Neulinggasse Vienna Graphic concept and layout section.d design.communication.gmbh Praterstraße Vienna

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