annual report ag 2008/2009 p&i personal & … · summary of the management report 2008/2009...

ANNUAL REPORT AG 2008/2009P&I PERSONAL & INFORMATIK AG

Contents Summary of the Management Report 2008/2009 • Overview of the fiscal year 3 • The company 4 • Economic Conditions 21 • Business development for the Group 21 • P&I AG 29 • Summarised appraisal of Business Development 32 • Corporate Risk Report 33 • Supplementary Report 36 • Forecast 36 AG Financial Statements for 2008/2009 according to HGB • Balance Sheet 43 • Statement of Income 44 • Cash-flow Statement 45 • Notes 46 • Development of fixed Assets 2008/2009 63 • Development of fixed Assets 2007/2008 64 Responsibility Statement 65 Report from the supervisory Board 66 Audit Certificate 69

Combined Management Report (Group and Corporation)

This Combined Management Report contains information concerning the P&I Personal & Informatik group (P&I Group) and P&I Personal & Informatik corporation (P&I AG). P&I Personal & Informatik AG is the parent company of the P&I Group and performs group leadership functions. Since P&I Personal & Informatik AG is a major part of the P&I Personal & Informatik Group, the Management Report of P&I AG is combined with that of the P&I Group pursuant to § 315 Para. 3 of the German Commercial Code (HGB) in combination with § 298 Para. 3 HGB. The respective details relate to the Group, unless P&I AG is expressly referred to. The Group accounts are prepared in conformity with the International Financial Reporting Standards (IFRS) in the manner required in the European Union, and with the additional commercial legislation to be applied pursuant to § 315a Para. 1 HGB, The annual financial statements for the corporation have been compiled in compliance with the provisions of the German Commercial Code as well as of the German Companies Act. 1. Overview of the fiscal year Notwithstanding the worsening economic environment in the second half of the year due to the world financial and economic crisis, fiscal 2008/2009 was a successful business year for P&I. Sales and results for the P&I Group were consistent with the previous year's figures. P&I continues writing its own success story: EBIT margin at 22.2 per cent

- In fiscal 2008/2009, sales for the P&I Group generated sales of 59.0 million euros, following the previous year's 59.4 million euros. Taking into account the contribution of 3.9 million euros made to last year's sales by the LOGA/400 business sold in the previous year, the adjusted sales figure rose by 6.3 per cent.

- With an EBIT of 13.1 million euros, the P&I Group achieved a margin of 22.2 per cent, a slight improvement on the previous year's margin of 22.2 per cent.

- Although no new major contracts were won, Licensing sales for the Group of 17.2 million euros were at a comparable level to the previous year's (17.4 million euros).

- The P&I Group's acquisitions strategy in Austria continued successfully, with the acquisition of P&I Steyr GmbH and the JET PABIS NG, the HR business area of Data Systems Austria Aktiengesellschaft & Co KG, Vienna.

- Once again, in the year just ended, P&I AG paid out a dividend amounting to 0.60 euros per share. At the next Annual General Meeting in 2009, the Supervisory Board and Board of Directors intend to propose a payout of a dividend of 1.00 euros per share for fiscal 2008/2009.

- In spite of sound Group financial figures, the P&I share could not escape the effects of the world financial and economic crisis and the resulting price collapses on share markets: opening in fiscal 2008/2009 at 17.05 euros, the P&I share (Prime Standard on the Frankfurt Stock Exchange) closed on March 31, 2009 at 11.00 euros.

- A share buyback scheme was introduced in October 2008. Up to March 31, 2009, the Company had repurchased 135,682 shares.


The most significant performance measurements for the P&I Group developed as follows: In ‘000 euross 2006/2007 2007/2008 Variance 2008/2009 VarianceIncoming orders 38,195 33,926 -11.2 % 34,170 0.7 %Sales 54,541 59,415 8.9 % 59,024 -0.7 %Licensing sales 14,407 17,376 20.6 % 17,243 -0.8 %Consulting sales 17,994 18,457 2.6 % 19,101 3.5 %Maintenance sale s 20,679 22,205 7.4 % 21,161 -4.7 %International sales 11,368 12,254 7.8 % 12,208 -0.4 %EBIT 12,252 13,070 6.7 % 13,098 0.2 %EBIT margin 22.5 % 22,0 % ,/, 22.2 % ,/,

2. The Company 2.1 Business activities

The P&I Group is a premium provider of integrated software solutions for software development, licensing and maintenance as well as IT services Europe-wide.

The corporate object for the Company and its subsidiaries is the creation, sale and maintenance of software and the provision of associated advice and training for operators, as well as dealings in EDP equipment and software, in the HR and time management sectors. P&I has been active in the market for 40 years and offers complete solutions for HR management with a spectrum of services consisting of:

o software applications and solutions in the areas of payroll accounting, personnel management and time management ;

o provision of personnel for support services ranging from the implementation of software to training and ongoing consulting, and including software maintenance and hotline services;

o top quality HR outsourcing services in partnership with international BPO (Business Process Outsourcing) providers;

o state-of-the-art time recording hardware.

P&I is present in the market with four product lines - applicable for any size of business and any industry across Europe. Our complete portfolio of solutions for HR administration consists of

o P&I LOGA as a payroll-linked solution, o P&I HCM as a web-based HR management solution, o P&I PLUS as an HR management solution independent of payroll for the

premium segment and o P&I SMART as a payroll-focused brand for smaller enterprises.


With its unified software, based on the three key components of payroll accounting, HR management and time management, P&I services the entire bandwidth of core personnel management processes. In the meantime, P&I LOGA is available for payroll accounting in eleven countries. Localisation of the software, adapting it to the legislative requirements and social security regulations of individual countries as well as to linguistic and cultural differences, means that today, P&I products are employed not only in Germany, but also Austria, Switzerland, Liechtenstein, the Netherlands, France, Poland, the Czech Republic, Slovakia, Hungary and Spain. P&I is an independent corporation listed on the stock exchange, with a shareholder structure characterised by the more than 40 German and foreign institutional investors. 2.2 Corporate strategy Our goal is to position P&I so that we emerge stronger from the economic and financial crisis, and as a winner in the line-up with our competitors. The strategic measures we are taking in order to achieve this goal are:

1. Unchanged investment in new software products and modules. 2. Unchanged investment in our organisational process structure with the aim of

improving customer support. Particular emphasis to be placed on the hotline service, transparency of procedures, overall customer satisfaction and software quality.

3. Investment in the dedication and motivation of our employees to encourage them to fully engage in the all-out pursuit of the newly established priorities for our corporate targets.

4. Concentration on P&I's strengths. P&I is well armed, with its entire spectrum of products and services, for advances in strategic growth. Our strategic measures will reach fruition once the economy has recovered: top quality products, a higher service and support share, business presence in Europe, motivated employees and good customer relations - the chief success factors which go to making P&I a valuable enterprise.

P&I is thus well positioned and well prepared not only to withstand the crisis but also exploit it, to emerge even stronger and take on the role of the leading European provider of HR management software. P&I is positioned as a provider of services in the HR market, employing state-of-the-art technology and selling highly integrated all-in-one HR management solutions.

1, P&I software is the only HR software incorporating fully integrated payroll and

time management modules whose payroll module can be employed in eleven countries in Europe.


2. In the HR software sector, P&I is the trendsetter. This applies to the

technological side just as much as to the continually expanding functionality of its product.

3, P&I has developed into an enterprise doing very lucrative business. Its

objective of high profitability is achieved not only overall, but throughout the entire structure of the organisation, with each unit individually achieving this goal. This applies just as much to the foreign subsidiaries as to the individual operating units in Germany. Our guiding policy is that the more successfully each part operates, the more successful the Company as a whole will be.

4. Essentially P&I operates two types of business:

On the one hand, as an all-in-one supplier, with the sale of licences to businesses which use P&I-Software in their HR administration, and on the other, provision of services in connection with software implementation and support. P&I offers its customers a holistic solution: an integrated all-in-one HR management solution based on cutting edge technologies and the provision of professional services. generating licensing, support and consulting sales. P&I owes its growth to this business principle.

On the other hand, as a product supplier, P&I makes its software available to HR service providers, who in turn offer their services based on P&I software without their customers having to obtain a licence from P&I. P&I generates licensing and support sales in this way. These HR service providers are large, globally active businesses serving numerous clients. The latter business type in particular is opening up new growth opportunities for P&I. Two major projects are typical of this new business enterprise for P&I. The two internationally leading service providers, ADP and Logica, will in future be offering their services based on P&I software. The powerful sales organisation of both concerns opens up enormous growth potential for P&I, as they can now offer their services to their customers based on a fully integrated solution. It is a solution which is ideally suited to mid-sized enterprises and whose international application is optimal for companies doing cross-border business - and not least, affords all users the transparency they require.

Sales and marketing strategies Over 15,000 end customers Europe-wide structure their HR business successfully using P&I solutions. Leading international HR service providers rely on P&I as a product supplier. They all trust the P&I's top level of expertise, gathered from more than 40 years in the marketplace. P&I clients appreciate P&I's integrated solutions with no internal interfaces just as much as the redundancy-free data storage. The data generator, creating data for evaluation ensures up-to-the-minute reporting with increased efficiency and a significant reduction in administration.


This lowers running costs for businesses, making a value-added contribution to enterprises which have already opted for P&I-software solutions: software products with a provider who is oriented to the future. P&I is a strong and dependable partner in the HR management sector. Continuity: P&I has been in the software industry for a long time, with over 40 years of experience under its belt. Innovation for P&I means working together with clients and experts to shape the future - with cutting edge technologies, with intelligent business processes and with hands-on consulting. Holistic approach: We offer our customers holistic solutions: from software to IT services through to outsourcing. Large customer base: more than 15,000 end customers profit from P&I's expertise in the area of software development. P&I achieves its sales revenues from licensing of HR software and from the related maintenance and services arising from implementation and ongoing advisory services. P&I's core business is based on three main cornerstones: new projects, migration projects and projects with existing customers. The HR software market has been for years one of the most highly saturated: every business does its payroll accounting. When a market is saturated, there is no growth in market volume, and increased sales can only be attained through an expansion of market share. In other words, destructive competition prevails. The acquisition of new customers for P&I's products therefore constitutes a very significant factor in its growth. Providing a business with a high-quality product which does not simply do the "obligatory" payroll accounting, but generates added value, thus contributing to the success of the company, is a powerful argument. In our customer acquisition we utilise direct sales channels as well as our partnerships. We see in our collaboration with international BPO partners and their role as "multipliers", an important mainstay for our business. In our dealings with our long-standing customers, we chiefly address projects related to P&I time management or P&I HCM. But we are also developing new modules to respond to the current needs of customers, such as our HR Control Centre, or DS Admin, the new P&I LOGA data protection concept. Dealings with our existing customers are chiefly taken care of by our Direct Sales people working together with our Consulting division. Migration business concerns only those projects where customers switch to P&I LOGA/HCM from products acquired by P&I, such as BAGE2000, E-PM and JET PABIS NG, or the IBM product LOGAvplus. Here we work exclusively with our own sales and marketing team.


Market position continues to strengthen P&I holds a special position in the HRM systems providers market. The market segment where P&I draws most of its customers from is the SME segment, companies with 250 to 5,000 employees. P&I plays a leading role in this market segment. SAP dominates among the large enterprises, while for smaller enterprises there is a range of competitors such as s+p, Exact, HANSALOG, SAGE, Varial, VEDA, etc. Consequently, in the large enterprise market segment, SAP is almost the only competitor we have attempting to use the logic of an all-in-one ERP solution to penetrate our market segment. P&I can counter this with its more comprehensive range of functionalities and its more competitively priced solution. In the smaller enterprise market segment, companies such as those mentioned above try to win market share from P&I through low prices. P&I can defend its position with a solution which is more modern and has a more comprehensive functional range, as, in most cases, other providers are offering outdated, non-integrated solutions. P&I thus finds itself in a “sandwich position“ between different types of competitors occupying the upper and lower limits of the market segment.

P&I itself seeks to penetrate the market segment of its competitors. In SAP’s traditional market, P&I has been particularly successful with P&I PLUS in the public administration sector. For the smaller enterprise market segment, P&I offers the P&I SMART trademark. Communication and Marketing Strategy The P&I Group invests in sales and marketing activities on a continuing basis. An advertising campaign launched in the past fiscal year aroused interest in P&I and attracted new attention.

A central element of the campaign is a three-dimensional P&I logo, around which are posed three 'customers' - two men and a woman. Accompanied by slogans such as 'Based on Trust' or 'Ready for the Future', the grouping conveys the core elements of the P&I brand - strength, trust, security, innovation and success.

The quarterly customer magazine, P&I NEWS, appeared on July 1, 2008 in the new design. The content of the new magazine also distinguishes it from preceding issues, with much more news included and an expanded section on practical topics. Visually, the magazine's look is oriented to the new exhibition stand display. And P&I's exhibition presence at the HRM Expo in Cologne in September 2008 was exceptional: the elaborate island stand, built to the new design and catered for every need of the visitors with a number of zones - advisory or just for lingering - attracted much attention and enjoyed very positive resonance. In December 2008, P&I presented its revamped website: a more attractive layout and an improved selection of information and news, but above, all placing importance on being user-friendly. All content can be quickly accessed in just a few clicks, is clearly-structured and oriented to the needs of specific target groups.


In our company publication, P&I NEWS, published four times in fiscal 2008/2009, we report on various topics relating to personnel issues. Current developments in the world of HR management, presentations of P&I solutions, and examples of best practice from various industry sectors have been featured. The journal, with an printing of more than 10,500 copies per issue, has met with an enthusiastic response from existing customers and, in particular, from prospective customers. The P&I e-newsletter appears weekly and is received by over 13,500 subscribers. Here we report on the A to Z of current developments in HR management - whether labour legislation or supplementary insurance. In the past year we have taken part in HR exhibitions and events as well as various industry events and have conducted advertising campaigns for P&I products in the leading trade journals. We firmly intend to go on presenting ourselves to the wider public and convincing it of our effectiveness.

Product strategy The essential features of our successful product strategy are: Wide ranging product portfolio: P&I can offer solutions for any industry and businesses of any size. P&I offers its broad customer base functional competence based on cutting edge technologies. The target market for P&I comprises businesses, public administration and institutions which require sophisticated software solutions. HR specialisation It is not just the functionality of our software which impresses, but also our competence in implementing it. Our customers reap the benefits of our top quality consulting skills and HR software solutions. P&I can guarantee its customers increased efficiency and ongoing productivity initiatives. Orientation to processes What we focus on in our product development, sales activities and implementation of software solutions is not so much the individual modules involved, but the entire business process. In line with the Company's strategic orientation as a provider of an integrated software solution for payroll, time management and HR management, we offer customers an all-in-one package of services comprising software licences, maintenance services, consultation and the supply of hardware for time recording and access control. Market leadership in technology P&I's web interface presents a technologically advanced platform for in-house solutions, and at the same time, a platform for provision of high quality services in the BPO field. More and more functionalities have been made available as web services, accessible by other applications used by customers. This makes integration of P&I software into other environments ever easier and offers customers the kind of flexibility in their IT strategies that is demanded today.


Web services relating to business processes within P&I HCM, the portal solution, have also been heavily expanded. P&I is well-equipped to deal with the current trend for “software on demand“. Investment protection Through user interfaces to solutions provided by the large ERP providers, customers from any industry or of any size can be expediently addressed. P&I's steady rate of growth in its Company result, its strong operating cashflow of 17.2 million euros and its high level of expenditure on continuing technological development means that the Company can offer customers high investment security. Acquisitions strategy P&I's acquisitions strategy is based on four guiding principles:

o Enhancement of P&I's market presence through an enlarged customer base o Securing and expanding market leadership in technology o Increasing competence through specialists gained o Entry into new market segments.

The employees represent an enormous enrichment in development and consultation expertise for P&I with the specialist knowledge they bring. For a take-over to result in a stronger P&I Group, the company culture and values must be compatible. And not least, the sales and earning power of the take-over candidate influence the decision strongly. P&I is constantly on the look-out for potential companies for take-over. In the fiscal year just ended, we concentrated our acquisitions activities on Austria, where we finalised two acquisitions. P&I Steyr was purchased through a share deal while JET PABIS NG, the HR business area of Data Systems Austria Aktiengesellschaft & Co KG, Vienna, through an asset deal. Both enterprises have been successfully integrated into P&I operations. Further acquisition plans were under consideration. The company, GRONEMEYER Gesellschaft fuer Datentechnik, EDV und Organisationsberatung mbH is one of these and was taken over on May 1, 2009, to strengthen the ranks of the P&I Group as from the new fiscal year, 2009/2010. For further comments please refer to points 2.5 and 8 of this Combined Management Report. Research and Development Costs A strong product is the prerequisite for sustainable development. P&I has established itself in the market with four strong HR brands. With the P&I LOGA, P&I HCM, and P&I PLUS products, P&I possesses a valuable portfolio of brands in the European software industry. With P&I SMART, P&I has separated off the lower part of its market segment. For a software company, R&D activities traditionally play an extremely important role, laying the groundwork for future growth and for maintaining market leadership in technology. Technological market leadership is founded on having a deeply ingrained culture of innovation: it is continually renewed through technological advances.


In order to ensure that our high standards of software are maintained, we have opened a new software development centre in Zilina in Slovakia. With over 15 newly appointed developers, we have taken the first steps along the road to even faster development of top quality modules. We have invested almost 21 per cent of our annual turnover in the maintenance and expansion of our product palette. We are convinced that our software must be leading-edge, both technologically and in terms of functionality. Tenacious commitment to the continued expansion of our range of solutions is the sine qua non for our sustainable success. As in previous years, development expenses for software products were not capitalised but completely expensed. Intangible assets arising from development activities are only capitalised if, among other things, it is sufficiently probable that the future economic benefits attributable to the asset will flow to the enterprise and that the cost of the asset can be determined reliably. Research and development expenses in the fiscal year just ended amounted to 12.3 million euros, following 11.4 million euros in the previous year. These include expenses for the ongoing product development of P&I LOGA, P&I HCM, P&I PLUS and P&I SMART, and also for the acquired products LOGAvplus, AZEA, BAGE2000, E-PM, eco-STAFF and JET PABIS NG.

In the reporting year, P&I A invested in (inter alia): a) P&I LOGA P&I LOGA is a comprehensive solution for payroll accounting in Europe. With its HR and time management components, it covers all HR processes. P&I LOGA is based on a unified, integrated data model which can be mapped using all commonly-used database systems. In order to improve the processing of queries and requests ("tickets") directed to the P&I hotline, a new functionality, "Ticket Reporter" has been incorporated into P&I LOGA. Ticket Reporter collates the necessary files for the analysis and solution of a problem by creating a log of the processes involved in each of the steps which lead to an evaluation. Development of extended possibilities for electronic transfer of official information and statistics is another focus of the work. Reporting of statistics often represents an extra burden for companies. Statistics compiled in the process of analysing the quarterly income statement can be submitted to the German Federal Statistics Office via the Internet. Automated procedures in P&I LOGA facilitate the work of personnel departments in issuing certification. In addition, we have made major investments in the variabilisation of the configuration for standard interpretations.


Aside from the comprehensive amendments and additions to social security and tax legislation which took effect as from January 1, 2009, as well as changes brought about by the German "Economic Stimulus Package II" (Konjunkturpaket II) for the German localisation of P&I LOGA, numerous new reporting procedures were realised. The P&I LOGA data protection concept, DS Admin, allows data protection to be outsourced from the respective application, and permits control of data security across applications. Emphasis is on the fact that under DS Admin, all activities related to access to the application and data are logged in revision-secure archives. The 70 per cent reduction in administration expenses makes this module very attractive, especially for data centres. Further to this, an integrated account concept for time management has been developed which will enable flexible, up-to-date ascertainment of figures. b) P&I HCM P&I HCM is P&I's Human Capital Management software: a web-based employee portal, supporting optimisation of HR management processes in the self-service area for management and employees. In the fiscal year just ended, P&I created the HR Control Centre, an instrument which enables a standardised, centralised overview of a company’s essential key figures and transactions from the HR management point of view. The HR Control Centre is integrated into the web-based employee portal of P&I HCM. Using the HR Control Centre, management obtains relevant information enabling it to steer personnel work to align closely with corporate strategy. The combination of operating data and analyses illustrated graphically, called up from the integrated P&I software, creates a comprehensive overview. Target fulfilment and changes made can be visualised as well. An action list with priority setting allows the user to function quickly and effectively. Strategic navigation questions are easy to follow and can be worked through in detail in just a few clicks. Thus, it is possible to analyse and evaluate processes relevant for HR management with the aid of process observation supported by key figures. Concrete HR key figures, such as number of employees, fluctuations, or employee illness status, serve as important indicators for the development of a company. Furthermore, trends can also be recognised at an early stage, incorrect decisions can be identified in good time and appropriate management measures can be initiated. The requirements that have been determined make it possible to implement long-term improvements with regard to working time models, seasonal aspects or vacation planning. c) P&I PLUS P&I PLUS is a web-based HR management solution which meets demanding criteria for flexibility when designing processes. This solution is most used by large companies and administrative bodies with specific individual requirements. The solution, supplemented by the time management module, enables comprehensive staff deployment planning and supports companies and administrative bodies in the implementation of flexible working-hours models. The HR management system P&I PLUS is no longer limited to the client/server version, but is now available as a full browser version.


P&I PLUS has been developed further on the basis of real customer requirements, achieving a higher capacity for performance. d) P&I SMART P&I SMART is an all-inclusive package specially designed for businesses with up to 250 employees. The software covers the basic HR administration processes: payroll accounting, travel expenses and if required, time management. The manufacturer's initial settings enable the system to be installed easily and up and running within a few days. For the future, apart from guaranteeing the updates for changes in legislation, P&I Group will continue developing the entire product palette. Investments in the coming years will be focused on technological development of the software solutions of P&I LOGA, P&I HCM, P&I PLUS and P&I SMART, and also on adding to our products for standardising and optimising business processes, including, for instance, using new add-on modules as well as links to external systems, especially in other European countries. The economic and financial crisis notwithstanding, the P&I Group will not be putting the brakes on for investment in R&D in the coming years; but rather pushing on with plans for expansion. The aim is, through intensifying investment, to emerge from this crisis in a stronger position than our competitors.

Corporate management Our goal is to increase shareholder value systematically and constantly through profitable growth and concentration on the business areas which offer the most advantageous development potential in terms of our competitiveness and capacity to perform. The key elements of management include an integrated concept for financial control, control metrics and as well, comprehensive measures aimed at profitable growth and increased efficiency. The significant key data for our Company are sales, in particular, Licensing sales, operating result (EBIT) and the EBIT margin. As is generally true for the software industry, sales and EBIT are the most important control metrics - so value-oriented performance metrics relating to capital turnover play a lesser role for P&I as well. Our capital commitment is low, but employee costs and external services in connection with support for our software products constitute high cost pools for P&I.

Permanent monitoring of sales and forecasting for the revenue types of Licensing, Maintenance and Purchased Services underpin the development of profitability. Licensing sales are the major growth engine for Services and Maintenance. In this connection, incoming orders for Licensing plays an key role. Sustained tracking of Licensing sales at all levels of management, from the first customer contact to signing of the contract through to implementation is an important element. Monthly monitoring is carried out across the entire organisation. The second cornerstone of our profitability development is cost management. All cost items are subject to strict budget controls.


Due to employee costs and purchased services in connection with the maintenance of our products, the fixed costs proportion is very high in the P&I Group. Variable budgets are therefore released, dependent on current sales development, during the course of the year. These result from the monthly monitoring process, which involves reviewing historical budget adherence as well as making rolling forecasts. Mapping of the significant value drivers to the remuneration system for executives rounds off the internal control system for the Group. Licensing sales, total Group sales and EBIT are the value drivers on which measurement of the variable remuneration components paid is based. In this way, the remuneration system guarantees an optimal orientation to an increase in shareholder value.

2.3 Organisation / Personnel

At March 31, 2009 The P&I Group employed 343 people (previous year: 301). The annual average of full-time-equivalent employees rose from 286 to 306. Of those, 222 were employed in Germany (previous year: 236), a total of 84 employees in the rest of Europe (previous year: 50), where the Company was most strongly represented in Austria, with 34 people (previous year: 21), and in Slovakia, with 39 (previous year: 21) employed by the development centre. The now-completed process of streamlining the company's Sales organisation and Consulting divisions from three to two main areas (private and public sectors) has improved efficiency and effectiveness of both divisions. Parallel to this, the regional orientation for Sales and Consulting employees was also streamlined. Each consultant was assigned customers whose company headquarters lie within a radius of 150 kilometres from the hometown of the consultant. Closely intermeshing the work of Consulting and Sales divisions helps us to maintain the focus on the client and their needs and requirements, even in challenging times. We have an organisational structure now which is characterised by its tremendous closeness to the customer. That creates trust. The Consulting/Systems Integration division supports customers in the implementation of P&I software solutions and ongoing operations. The palette of services offered includes, aside from advisory services, training for software end customers and technical and specialised hosting. The division also provides product training and specialist updating services (social security and income tax). P&I advises its customers on how they can structure their processes to be as efficient and straightforward as possible in order to reduce process costs and to be an even better partner for their departments and management. P&I's consultants take responsibility for their customers – this means that each customer has their own P&I consultant assigned to them who acts as a contact person. The advisers ensure that the users acquire the requisite knowledge of all the areas relevant to them. An annual average of 114 employees (previous year: 112) over the year were employed in this division.


The Development division focuses strongly on application development, technology, quality assurance and design. Four new software releases per fiscal year are developed and placed at the disposal of customers. Development is headquartered in Wiesbaden. The development unit founded in Bratislava in 2002 is increasingly assuming localisation tasks, although support also comes from decentralised quality assurance and development units in Austria, Holland and Switzerland. The expansion of the development centre operation in Slovakia has been continued in the current fiscal year through the opening of a new development centre in Zilina. We are working here with very young software developers whose abundance of ideas and level technological know-how are exciting and infectious. The acquisition of P&I Steyr and the personnel leasing software, eco-STAFF as well as the HR division JET PABIS NG have also strengthened the development team. The people-intensive area of Consulting employed the highest number of employees in the P&I Group with an average over the year of 119 (previous year: 94). A total of 37 (previous year: 44) people were employed in Sales and Marketing in the past year. For the Sales division, the market focus is on incoming orders for licences. Europe-wide, we were active in the market with two organisational units: Public Administration and Private Sector. European sales activities are coordinated by our headquarters in Wiesbaden. In Austria and also in Switzerland, we have local sales agents. Aside from emphasising the acquisition of new customers and the allied goal of gaining more market share in Germany and the rest of Europe, P&I Direct Sales, in close collaboration with Consulting staff, pursues the goal of bringing our expanded portfolio to our existing LOGA customers. As in the previous year, the P&I Group's administrative sector employed 36 employees. In fiscal 2008/2009, employee expenses amounted to 27.8 million euros (previous year: 26.4 million euros). The Company's management policy is grounded in a broad-ranging target system. Corporate targets are broken down into division and individual targets and linked to appropriate, variable salary components depending on the respective level of responsibility involved. The corporate targets arise out of the planning data with respect to incoming orders, sales, and operating result. The P&I group has an ongoing commitment to investment in training and further development for its employees. Our employees are the foundation of P&I's sustained success. With their energy, outstanding expertise, their critical but constructive perspectives on issues, as well as their dedication to performance and innovation, they constitute a vital precondition for our leading position in the market.


2.4 Capital disclosures pursuant to §§ 289 Para. 4, 315 Para. 4 HGB Subscribed capital and voting rights and restrictions

The capital stock of the Company amounts to 7,700,000 euros and is divided into 7,700,000 no-par value bearer shares. Each no-par share is attributed a pro rata amount of the capital stock of 1.00 euro. Each no-par share is granted the same rights, in particular, the same voting rights. No individual shareholder or shareholder group is entitled to special privileges. The Board of Directors is not aware of any restrictions with regard to voting rights or transfer of shares. Authorised capital and repurchase of shares The Board of Directors is, pursuant to § 3 Para. 3 of the Memorandum and Articles of Association authorised until September 1, 2013 to increase the capital stock of the Company with the consent of the Supervisory Board against monetary and/or non-monetary contributions to a maximum of 3,850,000 euros by single or multiple issues of new no-par value bearer shares (Authorised Capital 2008). Under certain circumstances and with the consent of the Supervisory Board, the Board of Directors may exclude the subscription rights of existing shareholders. Further details are contained in § 3 Para. 3 of the Memorandum and Articles of Association. The Board of Directors has yet not made use of the above mentioned authorisation. Until March 1, 2010 and with the consent of the Supervisory Board, the Board of Directors is authorised to purchase treasury stock amounting to up to ten per cent in total of the capital stock of the Company at the time of the resolution passed at the Annual General Meeting.

Use was made of this authorisation in the fiscal year under review: On October 23, 2008, the Board of Directors of P&I Personal & Informatik AG resolved to institute a share buyback scheme. Company shares amounting to up to four per cent of capital stock (a limit of 308,000 shares) are to be acquired on the stock exchange. However, the maximum price to be paid (excluding ancillary acquisition costs) should not exceed 4.5 million euros. The Board of Directors intends, with the consent of the Supervisory Board, to retire those of its own shares acquired during the buyback, thus reducing the capital stock. However, the Board of Directors reserves the right to use all or some of P&I's own shares for some other purpose, within the limitations of the authorisation granted by the AGM of September 2, 2008. The scheme, begun on October 23, 2008, was foreseen to end on March 31, 2009 at the latest. It was resolved on March 17, 2009 to extend the scheme, under otherwise unchanged conditions, to September 30, 2009.

In the period from October 27, 2008 to March 31, 2009, 135,682 of P&I shares were purchased at an acquisition cost of 1,484,672.68 million euros. Direct or indirect equity participations To the Company's knowledge, there are no shareholders at present with participations in the Company greater than 10 per cent. Special privileges for shareholders There are no shares in the Company with special privileges.


System of control of voting rights in the event of employees' participations and where they do not directly exercise their voting rights The Company has no knowledge of whether its employees hold participations in the Company and if voting rights control is carried out. Appointment/dismissal of members of the Board of Directors and amendments to the Memorandum and Articles of Association Members of the Board of Directors are appointed for a maximum of five years. A reappointment or extension of the period of office, for five years respectively, is permissible, but requires a new resolution to be passed by the Supervisory Board, which may be made, at the earliest, one year before the expiry of the previous term of office. The Supervisory Board may revoke the appointment of a member of the Board of Directors and/or the appointment of a Chairperson of the Board of Directors, if cause exists within the meaning of § 84 Para. 3 German Companies Act (AktG). Any amendment to the Memorandum and Articles of Association requires a resolution to be passed by the AGM. The AGM resolution requires a majority, which must encompass at least three-quarters of the capital stock represented at the time of the resolution. Members of the Board of Directors are appointed and dismissed pursuant to §§ 84 f, AktG. Amendments to the Memorandum and Articles of Association are made pursuant to § 179 AktG by the Annual General Meeting with a majority of at least three quarters of the capital stock represented at the time of the resolution. Important agreements of the Company in the case of Change in Control as a result of a take-over bid The Company avails itself here of the option not to make public disclosure. Compensation agreements with members of the Board of Directors/employees in the event of a take-over bid In the first half of fiscal 2008/2009, it was agreed with the members of the Board of Directors that in the case of a Change in Control, they shall have the right to resign from their positions, within specified periods of time respectively, and terminate their employment contracts. They shall then receive a settlement to the amount of the remuneration (including the variable component) which they would otherwise have received up to the end of the term of their employment contract. There are no compensation agreements with employees. Dependency of P&I AG P&I AG is not a dependent enterprise within the meaning of § 17 AktG.

2.5 Acquisitions With effect from April 1, 2008, P&I Personal & Informatik GmbH, Vienna, Austria, acquired P&I Steyr GmbH, Steyr, Austria through a share deal. The corporate object of the P&I Steyr GmbH is the HR business areas E-PM and eco-STAFF, formerly included in the business activities of ecosys Informationstechnologie Gesellschaft m.b.H., Steyr, Austria.


The eco-Staff software provides an industrial business solution for recruitment of personnel, covering the entire business process from distribution and scheduling functions, performance documentation and corporate management. The purchase of this business unit rounds out P&I GmbH Vienna's existing portfolio, addressing these future-oriented business areas. The take-over of the ecosys personnel management software, E-PM, has produced rewarding synergy effects with P&I's own product, P&I HCM. With effect from September 1, 2008, P&I Personal & Informatik GmbH, Vienna, Austria, purchased the HR business area JET PABIS NG of Data Systems Austria Aktiengesellschaft & Co KG, Vienna, Austria. The transfer of the assets and liabilities acquired was effected under the terms of an asset deal with no acquisition of shareholders' equity. The main benefit of the acquisition for P&I is the take-over of the customer base. The existing software-support agreements with customers, as well as the software itself, JET PABIS NG were taken over from the seller under the terms of the deal. The purchase has brought P&I nearer to its goal of market leadership for HR software in Austria. The effects on sales and results are described in the Consolidated Financial Statements, Item 3, and with respect to Group sales and the Group result were not substantial. With effect from May 1, 2009, P&I AG, Wiesbaden, purchased 100 per cent of the shares of GRONEMEYER Gesellschaft fuer Datentechnik, EDV und Organisationsberatung mbH. Through the take-over, P&I AG acquires the core product APG2000, giving it possession of a platform-independent, standard time management software which can be tailored to individual needs. For further commentary please refer to Item 8 of this Combined Management Report.

2.6 Remuneration systems

Board of Directors Remuneration for the members of the Board of Directors is determined by the Supervisory Board and comprises both fixed and variable components. The fixed component, aside from a fixed-amount monthly remuneration, also includes benefits in kind, in particular the valuation for company vehicles to be applied in compliance with German taxation regulations.

One part of the variable component of the Board of Directors' remuneration constitutes a performance related target income. The amount of the performance related target income is calculated on the basis of the degree to which the target Group EBIT (earnings before interest and taxes) set by the Supervisory Board has been fulfilled. Bonus schemes also constitute part of the Board of Directors' variable remuneration:


Payment of a long-term bonus (providing a long-term incentive) as a variable remuneration component was agreed on with one member of the Board of Directors with effect from September 1, 2007. Granting of the long-term bonus and its amount are dependent on the achievement of the target Group EBIT agreed previously with the Supervisory Board, and on the degree to which targets have been met in the respective fiscal year, and are also strictly dependent on the continuation of the board member's employment contract. The term of this agreement extends to the end of fiscal 2011/2012. Payment of 50 per cent of the long-term bonus claims accumulated up to the end of fiscal 2009/2010 (March 31, 2010) will be effected seven days after discharge of the Board of Directors by the Annual General Meeting for fiscal 2009/2010.

Payment of the remainder of the bonus claims which have accumulated in the fiscal years up to March 31, 2010, and of the long-term bonus claims arising after March 31, 2010 and up to the end of the term. at March 31, 2012, will be effected seven days after discharge of the Board of Directors by the Annual General Meeting for fiscal 2011/2012. Payment of a bonus as a variable remuneration component was agreed on with one further member of the Board of Directors, with effect from April 1, 2008. Granting of the bonus and its amount are dependent on the achievement of the target Group EBIT agreed previously with the Supervisory Board, and on the degree to which targets have been met in the respective fiscal year, and are also strictly dependent on the continuation of the board member's employment contract. The agreement is valid until the end of fiscal 2011/2012, in accordance with the extended term of the Board of Directors' employment contract. Payment of the bonus due in any fiscal year shall be payable within two weeks of adoption of the annual financial statements.

Until fiscal 2007/2008, Stock Appreciation Rights schemes for both members of the Board of Directors existed. As a result of the Change in Control, payments from the schemes fell due. The total expenses for the SAR programmes in fiscal 2007/2009 amounted to 1,636,000 euros.

In fiscal 2008/2009, it was agreed with the members of the Board of Directors that in the case of a Change in Control they shall have the right to resign from their positions, within specified periods of time respectively, and terminate their employment contract. They shall then receive a settlement to the amount of the remuneration (including the variable component) which they would otherwise have received up to the end of the term of their contracts. Through the law regulating the disclosure of the Board of Directors' compensation (Transparency Law for the Compensation of Corporate Executives, (VorStOG)) of August 3, 2005, a basic obligation regarding the individual disclosure of remuneration for the boards of directors of corporations listed on the stock exchange was introduced. However, pursuant to §286 Para. 5 and § 314 Para. 2 Sentence 2 of the German Commercial Code (HGB), the annual general meeting of such an entity can decide to withhold this information in part.


The AGM of P&I AG on August 29, 2006 resolved that the details required by §285 Sentence 1 No. 9 lit. a) HGB and §314 Para. 1 No. 6 lit. A) HGB in the annual financial statements and Group financial statements for the Company for fiscal years 2006/2007 to 2010/2011 inclusive, will remain undisclosed, at the latest, until August 28, 2011. Therefore in the following, only statements regarding the total payments are made.

The total remuneration for the members of the Board of Directors in fiscal 2008/2009 and the previous year is shown in the following table: In '000 euros 2007/2008 2008/2009Fixed income / benefits in kind 527 652EBIT variable 250 500SAR schemes 1,636 -Bonus schemes 242 760Total remuneration 2,655 1,912

No further additional salary components exist.

Supervisory Board Pursuant to the Memorandum and Articles of Association, each Supervisory Board member receives a fixed annual remuneration of 11,248.42 euros, The Chairman of the Supervisory Board receives 14,316.17 euros p.a. and the Deputy Chairman, 12,782.30 euros p. a. The Company reimburses the members of the Supervisory Board for expenses incurred in the course of carrying out their duties. With Supervisory Board members Messrs. Klaus C. Ploenzke and Michael Pluemer, consultancy agreements have been entered into for consultation services over and above their normal Supervisory Board duties. The total remuneration for the members of the Supervisory Board in fiscal 2008/2009 is shown in the following table:

In euros Fixed

remuneration Expenses

reimbursed-

Consultationl

Klaus C. Ploenzke Apr. 1, 2008 - Mar. 31, 2009 14,316.17 --- 26,372.62Michael Pluemer Apr. 1, 2008 - Mar.31, 2009 12,782.30 3,155.41 27,090.96Robert Vinall Sept.2, 2008 - Mar.31, 2009 6,530.33 4,250.69 ---Helmut Hilgers Apr. 7, 2008 - Sept. 2, 2008 4,561.85 1,051.20 ---Michael Abels Apr. 1, 2008 - Apr. 3, 2008 --- --- ---


3. Economic conditions Development of the global economy during the past year was deeply influenced by the global financial market crisis. The effects felt across the entire monetary sector and in the real economy led to a significant clouding of economic prospects and a corresponding need for the reevaluation of expectations by businesses and consumers alike. Given this background, the International Monetary Fund (IMF), in January 2009 assumed a rise in global GDP for 2008 of only 3.4 per cent in comparison with the previous year. In January 2008, the IMF had forecast an increase of 4.2 per cent. The euro area recorded total growth of only 1.0 per cent year on year in 2008, compared to 2.6 per cent in the previous year. The German economy was able to achieve a GDP of 1.3 per cent (previous year 2.5 per cent), developing somewhat better than the average euro area GDP. In the view of the US market research institute, International Data Corporation (IDC), the effects of the international financial market crisis on the real economy have noticeably influenced demand for IT worldwide. Even up to mid-2008, despite the crisis and the downturn in economic growth which had set in, the global IT market remained comparably buoyant. According to the IDC, since the effects of the financial crisis first began to impact on the real economy quite far on in 2008, the year may still close overall with a relatively good showing for the global IT market with growth of 6.9 per cent (previous year: 12.5 per cent). Growth in sales of application software reached 7.9 per cent (previous year: 14.4 per cent). In Germany as well, development in the IT industry has been substantially more positive than in the economy as a whole. Figures published by the industry association BITKOM (German Association for Information Technology Telecommunications and New Media) in December 2008 set growth in the IT industry for 2008 at 3.7 per cent (previous year: 5.0 per cent). Development in the IT software industry was seen as even more stable, with growth in 2008 of 4.2 per cent (previous year: 5.4 per cent). Even in tough economic times, the IT industry remains an engine of growth for the German economy. 4. Business development for the Group Fiscal 2008/2009 was divided into two phases for P&I - in the first half of the fiscal year, from April to September 2008, favourable economic conditions meant that we were able to continue the successful trend in business activities of previous years. The second half of the fiscal year, from October 2008 to March 2009, was shadowed by the worsening economic environment due to the world financial and economic crisis, and required extraordinary efforts from us. Nevertheless, the sales and results which the P&I Group succeeded in achieving were consistent with the previous year's figures, which also contained, for the last time, the revenues and result from the LOGA/400 business for 12 months, and which, owing to the sale of the LOGA/400 business, are not included in fiscal 2008/2009.


4.1 Profit Situation

Sales development In fiscal 2008/2009, the P&I Group generated sales of 59.0 million euros, following the previous year's 59.4 million euros. Taking into account the contribution of 3.9 million euros made to last year's sales by the now sold-off LOGA/400 business, the adjusted sales figure rose by 6.3 per cent. Sales development in the fiscal year just ended was characterised by displacement between sales categories, with reduced Maintenance sales of 21.2 million euros compared with 22.2 million euros in the previous year being expected due to the sale of the LOGA/400 business. On the other hand, despite the clouded current economic environment, the P&I Group achieved very good sales in Licensing of 17.2 million euros, and for Consulting even raised sales year-on-year by 3.5 per cent, to 19.1 million euros. Sales (‘000 euros) 2007/2008 2008/2009 ChangeLicensing 17,376 17,243 -0.8 %Consulting 18,457 19,101 3.5 %Maintenance 22,205 21,161 -4.7 %Other 1,377 1,519 10.3 %Total 59,415 59,024 -0.7 %

Ongoing Licensing business Development of Licensing business is crucial to increased profitability. The worsening economic conditions which set in during the second half of the fiscal year have not left us untouched. During the last quarter of our fiscal year, we have had to accept that there has been a noticeable slowdown. No major contracts such as those of previous years have been won. All the more gratifying, therefore, that our sales organisation has nevertheless achieved Licensing sales of 17.2 million euros through contracts for a number of medium and smaller-sized projects (previous year: 17.4 million euros). For the BPO providers, the difficult economic situation very quickly made itself felt, being reflected in a reduced number of billings. For this reason, no new large orders have come in from this market segment. On the positive side however, are the new contracts with customers who have migrated to a P&I solution from an acquired product. An important event for the P&I Group as well, that Brandenburg police force took acceptance of the P&I PLUS project, which is now up and running. Current licensing sales are an important indicator for the P&I Group, as sales of software licences are followed after a certain period by regular annual maintenance services. Maintenance business growing Development of P&I's Maintenance Service income follows in the main the product sales of previous years. Here, in the fiscal year just ended we were able to withstand the one-off negative effect resulting from the sale of the LOGA/400 business.


In this fiscal year, revenues of 21.2 million euros (previous year: 22.2 million euros) were posted here. Revenues of 3.5 million euros from LOGA/400 business for the 12-month period (April 2007 to March 2008) were included in the previous year's accounts for the last time. Adjusted, this represents a year-on-year increase of 13.3 per cent, with organic growth alone accounting for 11.4 per cent. A climb in maintenance income results in increased earning power, since the expenses for maintaining the software remain virtually independent of the number of customers to be serviced. Product income, with its attractive margins, is the sum of income from Licensing and Maintenance. This fell, as taken into account in planning, due to the sale of the LOGA/400 business in the previous year from 39.6 million euros to 38.4 million euros. Nevertheless, adjusted for the one-off negative effect, the Product area grew by 7per cent, generating around 65per cent of total sales for P&I.

Moderate increase in Service income Service business showed a moderate positive development in comparison to the previous year. Shown here are revenues from seminars and training courses in addition to those arising from introductory projects and from ongoing support. P&I increased the previous year's result by 0.6 million euros to 19.1 million euros, with 32.4 per cent of revenues coming from the Consulting business area. Sales development in the segments Sales (‘000 euros) 2007/2008 2008/2009 ChangeDomestic 47,161 46,816 -0.7 %Austria 4,535 6,487 43.0 %Other foreign countries

7,719 5,721 -25.9 %

Total 59,415 59,024 -0.7 % Adjusted domestic business grows Domestic business, with sales of 46.8 million euros, while showing an absolute decline of 1 per cent, actually grew when adjusted for the effect from the sold-off LOGA/400 business. The increase was mostly attributable to Licensing sales achieved in the context of migrations of the BAGE2000 product we have acquired, and also from Licensing business coming from the integrated time management solutions. Increase in sales in the Austrian business environment 6.5 million euros of total Group sales for P&I were realised in the Austrian market in the fiscal year just ended, corresponding to 11 per cent of Group sales. The P&I Group is reporting therefore for the first time for the business segment Austria, and shows the previous year's figures accordingly. A significant rise in sales was achieved in the Austrian market environment in the current year, a good 70 per cent being accounted for by the two acquisitions.


Other foreign countries "Other foreign countries" includes, on the one hand, sales from Germany to international customers and on the other, sales achieved by our foreign subsidiaries in Holland, Switzerland and Slovakia. In the fiscal year just ended, sales amounted to 5.7 million euros compared to 7.7 million euros in the previous year. The previous year's sales were influenced by a one-off effect from a major project. Development in Sales and Orders In fiscal 2008/2009 incoming orders (Licenses and Consulting) remained virtually unchanged year-on-year, amounting to 33.0 million euros (previous year: 32.9 million euros). After a third quarter where incoming orders reached a markedly higher level year-on-year, in Q4, a clear decline had to be accepted. In many cases, businesses were putting IT investment decisions on ice, particularly apparent in the private sector. Incoming orders (Licenses, Consulting and Maintenance) at 34.9 million euros were slightly above the previous year's level (34.7 million euros). This includes future maintenance income of 22.8 million euros (previous year: 20.1 million euros) for the next 12 months. Profit Situation: operating margin slightly improved

In '000 euros 2007/2008 2008/2009 Operating result (EBIT) 13,070 13,098 EBIT margin 22.0 % 22.2 %Earnings before tax EBT 13,517 13,673Consolidated result 9,628 8,966 Return on sales 16.2 % 15.2 %Return on assets ROA1) 36.5 % 43.8 %Earnings per share (in euros) 1.25 1.17Share price end of March 08 and 08 in euros

17.05 11.00

Price-profit ratio 13.64 9.401) (EBIT+ net interest income)/operating assets The operating result of 13.1 million euros remained the same as that of the previous year. A slight reduction in costs, however, led to a 0.2 per cent rise in the EBIT margin, reaching 22.2 per cent.


The slight decline in sales was thus accompanied by an equally slight dip in costs. Return on sales amounted to 15.2 per cent (previous year: 16.2 per cent), attributable to the rise in tax expenses. The previous year's result contained deferred tax revenue of 0.3 million euros arising from the adjustment of the previous year's figures to the change in the tax rate in Germany, from 39.7 per cent to 31.23 per cent. Tax expenses also rose in comparison to the previous year as foreign losses carried forward are now recorded solely in Switzerland. Profit situation in the segments In '000 euros 2007/2008 2008/2009 ChangeDomestic 9,388 11,711 2,323Austria 229 110 -119Other foreign countries

3,453 1,277 -2,176

Operating result (EBIT)

13,070 13,098 28

The Group earnings situation is determined by the parent company and domestic business. Even with a decline in foreign business in fiscal 2008/2009, all of our foreign subsidiaries still showed a positive result at March 31, 2009. with a good 10.6 per cent (previous year: 28.2 per cent) of the operating result being generated by the P&I Group's foreign business. In Austria, our subsidiary has reached a critical manning level. Though the acquisitions have indeed led to a noticeable rise in sales, they are accompanied by high expenses in connection with the support or development of three independent software products: the payroll product JET PABIS NG, personnel leasing software, eco-STAFF, and the payroll-HR solution E-PM. In the previous year, the Other Foreign Countries segment profited from the realisation of Licensing sales of a large BPO provider. In this year, Licensing sales at this level were not expected, thus earning power inevitably reduced correspondingly. The P&I Group generated an operating result after taxes amounting to 9.0 million euros (previous year: 9.6 million euros).

Earnings per share Earnings per share amounted to 1.17 euros (previous year: 1.25 euros). 4.2 Financial state of affairs Cashflow development and liquidity situation In past months, the financial crisis has enormously increased the importance of securing liquidity. The P&I Group has paid due attention to this fact. The financial situation of the Group remains sound. The Group has had no need for short-term refinancing and has access to sufficient financial resources for the future development of the concern.


Cashflow in fiscal 2008/2009 was chiefly characterised by the following factors: on the one hand, by the shift of cash and cash equivalents to current financial assets to the amount of 14.4 million euros, and on the other, by payouts to our shareholders (dividends and share buyback scheme) of 6.1 million euros as well as investments of 3 million euros. In '000 euros Cashflow from

2007/2008 2008/2009 Change

- operating activities 11,635 17,230 5,595- investments 2,479 -17,454 -19,933- financing -7,700 -6,104 1,596Total 6,414 -6,328 -12,742

In fiscal 2008/2009, cashflow from operating activities rose from 11.6 million euros to 17.2 million euros. In the previous year (2007/2008), high tax payments, including those for prior years as well, characterised cashflow from current operating activities. In contrast, in the current fiscal year, above all tax prepayments were made, based on assessments from previous years. In addition, the previous year bore the brunt of payouts for the SAR programmes. There was a change in direction in cashflow from investment activities, from 2.5 million euros to minus 17.5 million euros. The P&I Group placed part of the funds from Maintenance annual income for 2009 in money market funds and term deposits with a term of more than three months. These funds will, however, become available again during the course of the year. Cash outflow for investments was characterised by two acquisitions of companies in Austria during the current fiscal year, whereas in the previous year no comparable activities took place. Cashflow from financing activities amounted to minus 6.1 million euros (previous year: -7.7 million euros) comprising the payouts for dividends of 4.6 million euros and for the share buyback scheme of 1.5 million euros. Rise in liquid funds Holding cash and current financial assets to the amount of 33.2 million euros (previous year: 24.8 million euros) the P&I Group is in a very sound financial position. This guarantees the Company's independence - especially in times of economic and financial crisis.

In '000 euros 2007/2008 2008/2009 ChangeCash and cash equivalents 12,886 6,558 -6,328Securities 11,877 26,681 14,804Liquid funds 24,763 33,239 8,476Interest bearing loans 0 0 0Net borrowing -24,763 -33,239 8,476Share of total assets 46.2 % 54.4 % , / ,Gearing -92.7 % -112.4 % , / ,

*) Net borrowing/ Net equity


In addition, the Group possesses a bond of 813,000 euros, providing collateral for a line of credit, which is shown in the balance sheet under Financial Assets. Financial management The P&I Group has regularly had very high liquidity surpluses for many years. This surplus liquidity, when not used for investments, is held partly in bank balances and partly in marketable, available-for-sale securities. This policy corresponds with the management's view, always to have the Company’s full liquidity at our disposal. Investment in securities is only made in euros and the most financially sound investments in order to exclude the risk of substantial fluctuations in value. The break-down of cash and cash equivalents of the Group is set out in the notes to the accounts and in the cashflow statement. Financial instruments The aim of using financial instruments is to prevent as far as possible the risks arising from negative developments on the financial markets affecting the Company's assets, finances and profits. P&I does not make use of any derivative instruments at present. Off-balance sheet financial instruments, such as the sale of trade receivables, or sale-and-lease-back transactions are not used. 4.3 Assets The balance sheet total of the P&I Group rose by 13.8 per cent due to the addition of assets and debts from acquisitions as well as to the increase in business volume, amounting to 61.0 million euros (previous year: 53.6 million euros). This is shown in the rise in noncurrent assets, in particular in the intangible assets arising from the acquisition of companies, the customer base and goodwill. In '000 euros 2007/2008 2008/2009 ChangeNoncurrent assets 9,232 10,523 1,291Current assets 44,408 50,494 6,086Assets 53,640 61,017 7,377

In '000 euros 2007/2008 2008/2009 ChangeEquity 26,673 29,840 3,167Noncurrent liabilities 1,890 2,897 1,007Current liabilities 25,077 28,280 3,203 Equity and Liabilities 53,640 61,017 7,377


Key data 2007/2008 2008/2009Equity ratio 49.7 % 48.9 %Gearing -92.7% -112.4%Working capital in '000 euros 19,331 22,214

The worth of the P&I Group’s noncurrent assets amounted to 10.5 million euros (previous year: 9.2 million euros), thus recording in the reporting year an increase of 1.3 million euros. The rise is attributable to the acquisitions made in the fiscal year just ended, which overcompensated for the scheduled depreciations carried out. Current assets, chiefly comprising liquid funds and receivables, rose significantly due to the inflow of funds from operating activities. The decline in receivables from 17.1 million euros to 15.4 million euros is substantially attributable to the contractually agreed instalment payments from major projects. Liquid funds (Cash and cash equivalents and current financial assets) rose by 8.5 million euros to 33.2 million euros (previous year: 24.8 million euros). The positive Group result of 9.0 million euros was more than sufficient to cover the dividend payout and the purchase of treasury shares, with the result that equity rose absolutely in comparison with the previous year. However, the equity capital ratio fell slightly from 49.7 per cent to 48.9 per cent as a result of the increase in the balance sheet total. Noncurrent liabilities rose year-on-year by 1.0 million euros to 2.9 million euros. Chiefly responsible for this was the rise in long term bonus scheme obligations (for further details see 2.6). Deferred tax liabilities increased from 1.5 million euros to 1.8 million euros. One reason for this is the deferred tax liability which arose from the acquisition of P&I Steyr. Current liabilities rose by 3.2 million euros to 28.3 million euros. This item includes trade payables, tax liabilities, deferred income and other current liabilities. The increase is due not only to the increased tax liabilities arising out of the positive results, but also to other current liabilities. The tax liabilities of 2.5 million euros mainly include P&I AG tax accruals for the fiscal years 2007/2008 to 2008/2009 which are offset against the tax prepayments for this fiscal year. At the close of the fiscal year, other current liabilities amounted to 7.9 million euros (previous year: 6.4 million euros) and included, inter alia, payment obligations to personnel resulting from the variable compensation components.


5. P&I AG

5.1 Profit Situation

Business developments ran a generally positive course in the past year. In the previous year's result, fiscal 2007/2008, revenues of 3.5 million euros from LOGA/400 business for a 12-month period were included for the last time. The sale of LOGA/400 business in fiscal 2008/2009 means that this revenue is no longer included.

Sales development In fiscal 2008/2009, total sales amounted to 52.0 million euros (previous year: 55.2 million euros). This includes 47.4 million euros (previous year: 49.7 million euros) sales to third parties. The previous year's revenues included, for the last time, LOGA/400 revenue amounting to 3.9 million euros. Adjusted for this one-off effect, sales rose by 1.3 per cent.

Sales in '000 to 2007/2008 2008/2009 Change - third parties 49,652 47,378 -4.6 % - affiliated companies 5,582

4,609 -17.4 %

Total 55,234 51,987 -5.9 %Net change in inventories -866

368 ./.

Overall performance

54,368 52,355 -3.7 %

The highest contribution to sales was made by Maintenance. With a sales volume of 19.8 million euros (previous year: 21.1 million euros, of that, 3.5 million euros LOGA/400-business), Maintenance contributed 38.1 per cent to sales. The second strongest sales category was Consulting with a contribution of 15.5 million euros, or 29.9 per cent to sales (previous year: 17.9 million euros). With 15.2 million euros (previous year: 14.9 million euros) Licensing sales rose by 0.3 million euros, contributing 29.2 per cent to sales. Sales volume for Other Sales accounted for 2.8 per cent of total sales, at 1.5 million euros (previous year: 1.3 million euros). In the fiscal year just ended, performance in Consulting within the scope of contracts for work and services or fixed price projects had the effect of increasing the value of inventory. Sales recognition is carried out after acceptance of completed work or after the implementation phase. In the period under review, many projects were completed. As new projects were begun, however, and two long-term projects to be completed only in the following year, inventory rose in total by 0.4 million euros, whereas in the previous year, inventory was reduced by 0.9 million euros.


Profit Situation: Result of ordinary business activities The result of ordinary business activities rose by 0.6 million euros to 13.8 million euros (previous year 13.2 million euros). Despite the decline in revenues caused by the sale of the LOGA/400 business, the operating result was improved. This was due to the fact that, unlike in the previous year, no non-scheduled depreciations on intangible assets were necessary. Owing to the positive development in business activities in our Swiss subsidiary, a partial amount of the loan was paid off, as in the previous year, amounting to 0.6 million euros (previous year: 0.6 million euros), and recognised as income. Tax expenses rose in comparison to the previous year by 0.2 million euros to 4.4 million euros, chiefly as a result of the rise in profit. Annual profit and dividends Annual profit rose by 0.3 million euros from the previous year's 9.1 million euros to 9.4 million euros in the reporting year. This represents an increase of 3.2 per cent. The net profit shown in the annual financial statements of P&I Personal & Informatik AG, prepared in accordance with commercial legislation, is, pursuant to the German Companies Act, material to a dividend distribution. In the previous year a dividend of 0.60 euros was paid out.

In view of the positive development of the result, the Supervisory Board and Board of Directors intend to propose a payout of a dividend of 1.00 euros per share entitled to dividend, at the next Annual General Meeting. With 7,700,000 shares issued, of which 7,564,318 are, as at balance sheet date March 31, 2009, entitled to a dividend for fiscal 2008/2009, the sum to be distributed amounts to 7,564,318.00 euros. If further shares are purchased before the next AGM, the number of shares entitled to dividend may fall. Correspondingly, if treasury shares are sold before the date of the next AGM, the number of shares entitled to dividend may rise. In these cases, if the dividend amount per no-par share entitled to dividend remains the same, an amended proposal will be made to the AGM. This will propose that the total amount of the distribution to shareholders be reduced by the partial amount which would have been paid on the shares newly acquired between April 1, 2009 and the date of the appropriation of profit decision treasury shares, and raised by the partial amount to be paid on treasury shares sold between April 1, 2009 and the date of the appropriation of profit decision. The profit carried forward is increased or decreased by these partial amounts.


5.2 Financial state of affairs

Cashflow development and liquidity situation Overall, the cashflow development for fiscal 2008/2009 was characterised, on the one hand, by the shift of 3.6 million euros of cash and cash equivalents to Other Securities, and on the other, by the dividend payout to our shareholders of 4.6 million euros, as well as the outflow of funds for purchase of our own shares. As a result of the good operating cashflow of 13.4 million euros, however, we were able to increase cash and cash equivalents overall by 4.7 million euros.

In '000 euros 2007/2008 2008/2009 ChangeCash and cash

equivalents 15,562 20,259 30.2 %

Securities 6,758 10,320 52.7 %Liquid funds 22,320 30,579 37.0 %

Liquid funds rise In contrast to the consolidated financial statements, in the individual financial statements, term deposits with an original term of more than three months are also shown under cash and cash equivalents. Adding the financial investments in Current Assets, the total amount of liquid funds came to 30.6 million euros (previous year: 22.3 million euros). As before, there were no liabilities due to banks. Financial management & financial instruments Please refer to the details given under 4.2.

5.3 Assets

In '000 euros 2007/2008 2008/2009 ChangeFixed assets 11,045 9,044 -2,001Current assets 34,007 44,109 10,102Accrued assets 314 604 290Assets 45,366 53,757 8,391

In '000 euros 2007/2008 2008/2009 ChangeEquity 21,777 26,533 4,756Accruals 6,959 10,233 3,274Liabilities 6,139 5,248 -891Deferred income 10,491 11,743 1,252Equity and liabilities 45,366 53,757 8,391

The value of fixed assets fell from 11.0 million euros in 2007/2008 to 9.0 million euros in 2008/2009. Two reasons can be found: firstly, lending to affiliated companies was reduced by 0.9 million euros through the repayment of partial amounts on a loan by the Dutch subsidiary, and secondly, scheduled depreciations were carried out.


Current assets, comprising receivables, other assets and liquid funds, rose by 10.1 million euros from 34.0 million euros to 44.1 million euros. While the receivables and other assets remained unchanged at 10.9 million euros (previous year: 10.9 million euros), liquid funds, including other securities, showed clear growth. This rose from 22.3 million euros in 2007/2008 to the present 30.6 million euros. A new addition is the portfolio of treasury shares amounting to 1.5 million euros. The dividend payout of 4.6 million euros was well-compensated for by the cashflow from current business activities. Equity showed a moderate increase year on year of 4.8 million euros, rising to the present 26.5 million euros, accounted for by an annual profit of 9.4 million euros for fiscal 2008/2009 as against the dividend payout of 4.6 million euros for fiscal 2007/2008. Capital stock remained unchanged at 7.7 million euros. Accruals rose year on year by 3.3 million euros to 10.2 million euros. Tax accruals of 2.5 million euros includes the expected additional tax payments for P&I AG for fiscal years 2006/2007, 2007/2008 and 2008/2009. Other accruals rose by 1.8 million euros to 7.8 million euros (previous year: 5.9 million euros). This figure includes allocations to the bonus scheme for the Board of Directors amounting to 0.8 million euros, as well as other accruals for employees costs. Liabilities, at 5.2 million euros, fell in comparison to the previous year (6.1 million euros). The reason for this is the decline in advance payments on orders which were fulfilled during the fiscal year just ended. The rise in deferred income is accounted for by growth in the number of support agreements. Deferred income takes into account income due after balance sheet date which has been received before balance sheet date.

6. Summarised appraisal of Business Development P&I has been outstandingly successful in the past three years. P&I has felt the effects of the economic and financial crisis to some extent in the last months of fiscal 2008/2009. Nevertheless, the Group was able to achieve its goals. The P&I Group has a solid financial foundation. On the basis of its very sound profit and financial situation, the P&I Group foresees that it will continue to be able to fulfil its financial obligations. Our goal is to be recognised as the most professional software company in the European HR market.


7. Corporate Risk Report In the context of its business activities, P&I is exposed to various risks which arise from, or can be attributed to ongoing operating activities or changes in external conditions. We define risks, in the broadest sense of the word, as the danger that we will not fulfil our financial, operative or strategic aims as planned. In order to secure the success of the enterprise in the long term, it is essential to identify and analyse risks, and to remove or limit them through appropriate management strategies. We aim for a good balance between risk and opportunity, taking on risks only if there is a high probability that the business activities will raise the value of the Company. 7.1 Risk management system of P&I AG

P&I has a comprehensive risk management system which enables us to detect and analyse risks early on and take appropriate measures. The Group-wide precautions are guided and monitored centrally by P&I AG in Wiesbaden. Here, risk reports are prepared, further developments of the risk management system initiated and standard requirements for reducing risk, applicable Group-wide, are worked out. We are now in the seventh fiscal year where risk management software has been supported by the Risk to Chance tool (R2C) which enables the active, web-based involvement of all managers in all risk management procedures. As well as financial data, the risk management procedure encompasses all activities of the organisation, systematically and continuously following through the steps of identification, analysis, evaluation, control, documentation, and communication. A risk inventory is a system whereby previously identified and new risks are classified according to type, following a formalised procedure, and evaluated according to the probability of their occurrence and the degree of damage they might inflict.

7.2 Market risks

P&I's high equity ratio and its high level of liquid funds provide security, even under difficult economic conditions. The market environment is continually monitored by P&I, possible development opportunities examined and potential differentiation from competitors exploited. In particular, the financial market crisis which began in 2008 poses risks for the sale of our products. Customers' IT budgets are being cut as a result of the crisis. We can also not rule out the possibility that our competitors will grant extremely favourable price reductions to customers. The resulting pressure on prices could affect P&I's profit situation adversely. We are convinced, however, that we have the right strategy for competing in the small and mid-sized enterprises environment, with our concept of organic growth complemented by targeted acquisitions and the P&I product palette.


7.3 Corporate strategy risks Risks from existing or new contracts for large-scale and fixed price projects are continuously monitored and measured. The implementation of P&I software frequently involves the customer in the commitment of large quantities of resources and may be subject to a range of risks over which the Company often has no control. The possibility of long-drawn out installation processes, or project costs which exceed the agreed fixed price and result in recourse claims or damage to the company image cannot always be excluded. P&I believes that these risks have been sufficiently catered for, having being taken into account in financial planning, in particular through the formation of provisions. It is P&I's view that adverse effects on the expected business and result development through risks arising from large-scale and fixed price projects are very slight. P&I generates a considerable proportion of its sales income from its large base of long-standing customers. These customers, in the case of a decline in customer satisfaction, could decide not to prolong maintenance contracts, take out new licences or conclude other contracts for further products or services with us, or decide against reducing the scope of their existing maintenance contracts. The effect would be considerably detrimental to P&I's revenues and profits. However, given P&I's sound business development in dealings with its long-standing customers and its future-oriented technology strategy, which has earned recognition from analysts and customers alike, this scenario seems rather unlikely. Fluctuations and declines in P&I’s licensing business can affect service and maintenance income, which as a rule reflects the development of licensing sales, after a certain period of time. A significant reduction in the percentage share of software licensing income in total income could have a considerably negative impact on business, and thus on P&I's asset, financial and profit situation. 7.4. Financial risks The Group is not subject to any significant credit risks. Liquid resources and securities are respectively deposited or invested with banks or their investment funds. P&I generally follows an extremely conservative investment strategy in order to hedge the financial risk of long-term impairment of financial assets. Due to interest rate risks and credit risks, investments are made in term deposit accounts of reputable financial institutions (at least A-Rating) with a short term to maturity. As a result of the high level of short-term funds available even after the dividend payout in fiscal 2008/2009, and as well, the long-term positive cashflow, the company is not subject to any liquidity risk.


Despite the downturn in the general economic situation, bad debt losses decreased year-on-year. Nevertheless, the continuation or worsening of the economic crisis may bring increased bad debt losses in its wake. In accordance with this risk, trade receivables will continue to be measured on an ongoing basis in respect of their recoverability, and value adjustments undertaken if discrepancies are present. As P&I does not have any customers whose contribution to sales exceeds 10 per cent, credit risks do not endanger inventory. Payment risks are managed by means of prepayments, by obtaining assumption declarations for receivables from the official receiver or through information on creditworthiness in doubtful cases. The Group does not maintain any other forms of collateral security such as entitlements to securities etc. The Group does not face a significant concentration of payment risks arising from one single contractual partner nor from a group of contractual partners with similar features. 7.5 Legal risks As a corporation listed on the stock exchange we are subject to increasing risks which could lead to our no longer being in a position to observe the many regulations and increasing changes in legislation. P&I counters this risk by establishing strict, formal procedures and by immediately implementing any new or amended basic conditions in its own organisation. 7.6 Employee risks P&I is a specialist in standard software solutions for HR management. Accordingly, experts in these areas are also in demand with other software companies. In order to prevent our staff being “poached“, we enhance our employees' loyalty to the company through profit-sharing measures, provision of further training, and non-competition clauses. Furthermore, we make sure that there are several people in each of the essential areas who possess the requisite expertise for the independent continuation of the work. 7.7 Acquisition risks In the past, we have made certain acquisitions, and we shall continue to consider possible purchases for the future. This of course means that the P&I group is subject to acquisition and integration risks. With respect to Licensing business, as a consequence of the economic and financial crisis, the risk is greater that customers will postpone a planned migration from an legacy product to a P&I software solution.


In the period under review, none of the risks identified and quantified in the context of P&I’s risk management system reached the threshold level established as an indication for the existence of inventory risk. The overview shows that the risks P&I is subject to are limited and manageable. No risks have been identified which could endanger the continuing existence of the Company, now or in the future. 8. Supplementary report With effect from May 1, 2009 P&I AG, Wiesbaden, purchased 100 per cent of the shares of GRONEMEYER Gesellschaft fuer Datentechnik, EDV und Organisationsberatung mbH in Hoexter. Through the take-over, P&I AG acquires the core product APG2000, giving it possession of a platform-independent, standard time management software which can be tailored to individual needs. The purchase strengthens P&I competence as a provider of integrated HR software solutions in the time management product line. In addition to consolidating market share, P&I sees growth potential in the field of access control. With the second acquisition, P&I has positioned itself in this market segment as an expert for time management. P&I takes over around 30 employees and approximately 300 customers, with 50 coming from Switzerland and the Netherlands. 9. Forecast

9.1 The economy and industry in the new fiscal year

IMF estimates made in January 2009, saw global GDP in 2009 slowing down to 0.5 per cent in comparison with 3.4 per cent in the previous year. For the euro area for 2009, the IMF was forecasting shrinking GDP of 2.0 per cent and for Germany, a distinct decline at 2.5 per cent. Current forecasts for 2009, made at the end of April 2009 by leading economic research institutes and the Federal Government of Germany, are for negative growth in GDP of between minus 5 per cent and minus 6 per cent. According to the IDC, the development of the global economy during the course of 2009 will influence the growth of the global IT business markedly, exerting a strong braking effect. IDC has revised its previous forecast for growth in global IT business for 2009, from 5.9 per cent forecast in mid-2008 to 0.5 per cent in February 2009. The forecast for growth in sales of application software was revised down from 6.2 per cent to 2.7 per cent. According to industry association BITKOM estimates, growth in the German IT industry for 2009 will reach 1.5 per cent. The IT software industry is expected to expand by 2.0 per cent.


9.2 P&I Group and P&I AG: Expectations and Chances

In the past year, the P&I Group has created a sound basis for continuing sustainable business development. We shall continue to build on this in the coming years. But even under the present difficult, ever more uncertain economic conditions, P&I has proven that it can attain a good result. Independence from specific industries, a broad geographical base, new, innovative developments, a large number of long-standing customers, and dedicated, performance oriented employees are the hallmarks of our business model. As the parent company, P&I Personal & Informatik AG performs group leadership functions in the P&I Group and is a major part of the P&I Personal & Informatik Group. It chiefly determines the sales development and profitability of the P&I Group. The expectations of P&I Personal und Informatik AG are in the main the same as those of the P&I Group and differ only in respect of the impact of the business activities with affiliated companies. Our goal is to position P&I in the coming year so that we emerge stronger from the economic and financial crisis, and as a winner in the line-up with our competitors. Central to this for us are three guiding principles: P&I has always placed enormous emphasis on making products that are top quality, innovative and above all provide benefits for the user. P&I will continue to invest in innovative product development. Our strongest partners and the most important cornerstone of our company are our customers. At P&I, our customers are the focus of our activities. Provision of professionally conducted services and mature software solutions creates added value for companies and lead to growth. To grow means to understand, and we know and understand the needs of our customers. P&I will continue to invest in customer satisfaction. The greatest potential of a company lies in its employees. A company lives through the people who work in it, manage it and guide it. By promoting and developing the talent present in our company we shall ensure our company's success in the future. P&I will continue to invest in employee development.

Today, P&I's software range, with its components for payroll accounting and time management and the web portal for employees and executives, encompasses solutions which support virtually all the HR administration requirements of a company. Performing services in connection with the implementation of software, advisory and consultation on its operation, training and providing extensive HR services via strategic partners, P&I is a provider of complete and comprehensive solutions for the most diverse of customers.


P&I has always placed enormous emphasis on offering the market for HR systems products which are top quality, innovative and, above all, which provide extra benefits for the user. With our constant, comprehensive investment in our software products we can offer our customers investment security and sustainability that they expect from us. Our goal is to add to the success of each of our customers. HR management is growing in importance for companies. Aside from the purely administrative personnel work, in a climate of ever tougher competition, HR takes on an increasingly important role in supporting executive management. We conceived the P&I HR Control Centre for precisely this important task, and now it is ready to be put into action. It enables a comprehensive overview of the company from the HR management point of view and provides, quickly and reliably, the information which the company's management require in order to take decisions. With the HR Control Centre, P&I customers can spot HR developments early on, enabling timely action to be taken, rather than reaction after the fact. Confidence in P&I and its products is so great that leading international HR service providers have opted for us as their long-term strategic partner. They will serve their customers in future using P&I software products. One such is the American HR service provider ADP, which, following the successful launch of the partnership in Germany, will be employing P&I products in Switzerland and Spain with its customers as well. All of them have placed their trust in P&I's successful concept: - Efficiency and cost reduction through integrated solutions (e.g. payroll accounting

and time management in one single system) - Security and protection of investments through high level of investment in the

continued development of our software - Competence in consultation through specialisation in HR management, with more

than 40 years experience. The successes we have achieved give us confidence that we will emerge from the current global economic crisis stronger than ever. Even though making realistic forecasts in the present situation is practically impossible, we intend to hold fast to our goal of taking over the market leadership for HRM software in Europe. We shall consolidate and expand on our present positioning in the market. We want all our customers, including the 400 new clients we have just gained through our Austrian acquisition, to feel convinced that we, P&I, with our software developed specifically for HRM, are the people who can support the complete sweep of HRM processes better than any other company. Our strategy of providing a personal support service for customers was developed last year and has now been implemented successfully to the satisfaction of our customers.


At this time, it is extremely hard to calculate the real impact of the economic and financial crisis. Given that the economic prospects are as uncertain as they are negative, our forecasts are more challenging to make and less ambitious than in previous years. If, as a result of the economic and financial crisis, enterprises cut back on investment, this is likely to affect P&I's new business negatively, particularly Licensing sales. We are therefore basing our targets on sales volumes in the licensing area of between 12 and 16 million euros. In the Consulting area, we are aiming for annual sales at the previous year's level. With its stable customer base, the P&I Group has traditionally generated more than 35 per cent of sales from recurring Maintenance Services. We are expecting year-on-year growth potential in this area of up to 10 per cent. In view of our commitment to long-term and continued investment, we do not foresee any potential savings in the area of costs. Given the current circumstances, the EBIT margin will aslo go down to between 15% and 20%. Overall, we expect that sales and results for the P&I Group for fiscal 2009/2010 will come in below the level achieved in the year under review. Given the current circumstances, the EBIT margin will also go down to between 15% and 20%. Overall, we expect that sales and results for the P&I Group for fiscal 2009/2010 will come in below the level achieved in the year under review. We will also continue to pursue our attractive dividend policy and pay out dividends of at least 50 per cent of the net profit shown in the annual financial statements of P&I Personal & Informatik AG. No one is currently in a position to make any realistic forecasts for exactly when the global economy will begin to recover. Nevertheless, on the basis of the high quality of our products and services, we expect that in fiscal year 2010/2011, the P&I Group and P&I AG will be able to achieve similar results with respect to sales and result as those forecast for fiscal 2009/2010. Even though our economic environment may have altered, we will hold fast to our vision for the future development of P&I. We want to achieve our long-term goal of sales of 100 million euros by 2014, with growth of 25 per cent in the EBIT margin. We see the opportunities there are for ongoing, sustainable business development and are taking the following measures to ensure this: - Development of new products

In the fiscal year just ended, we set up a new location for software development in Zilina (Slovakia). Including the employees in Bratislava, we now employ 45 young developers in Slovakia. The goal is the development of new products there, such as the HR Control Centre developed last year. The HR Control Centre is a new, innovative generator of data for evaluation and analysis, designed to enable the user to define the specific analysis required without needing knowledge of the structure of the database. A further example is DS Admin, the new P&I LOGA data protection concept. This is a new, web-based application which enables remote administration of user rights and user roles for data bases. For large service provider data centres in particular, this can make creation of new user profiles extremely simple and cost effective.


In future, we are planning only four new releases per year; one at the end of the calendar year, with amendments for changed legislation, and three others in March, June and September respectively. Simultaneously with the completion of each release, it is planned that at least one new module will also be ready to be offered to our existing customers as an extra (with a surcharge), and sold four or five hundred times. Thanks to the use of new technologies, by January 1, 2010 we will be in a position to offer payroll accounting modules for further countries: Great Britain, Slovenia and Croatia. The first customers in these countries will be companies which are already using our software in Germany. As from 2011, the localisations will be mature enough for us to be able to penetrate the markets in these countries deeply. Distribution will be through our own sales organisation or via partners. Although we are fully aware that in coming fiscal years, our product development costs will be higher, we also see the opportunity that is there to realise additional Licensing sales with existing customers.

- Increase in market share

Competition in our market segment is cut-throat. All companies and public administration bodies use high-performance IT systems for their payroll accounting and time management. Our response to this environment is our strategy of winning new customers through marketing and via our cooperation partners. In addition, we want to gain access to new customers through acquisitions. We focus our acquisitions strategy on the one hand on competitors and on businesses which will open up access to market niches for us. The other thrust is to acquire competitors with customer bases which represent large sales potential in business arising from migrations to P&I LOGA, where we generate sales from licensing, long-term software support agreements and consulting. This sort of migration business has been very successful, as we have seen with KSL Gesellschaft fuer kommunale Informationssysteme mbH and the two Austrian acquisitions in the fiscal year just ended, P&I Steyr and JET PABIS NG. With acquisitions of this kind, we aim to achieve full migration to P&I LOGA within three to five years. Our goal is to undertake from one to two acquisitions per year in order to double our present market share by 2014 - from the 5 million workers who are administered today using P&I LOGA, to 10 million.

- Aggressive marketing

The key to the success of an enterprise is the success of its marketing. This means that the whole enterprise must be organised along marketing-oriented principles. The organisation must do everything in its power to ensure that sales and marketing staff are motivated, enthusiastic and aggressive and gain new customers with the full support of their company. The thinking and acting of the entire organisation must be marketing-oriented, and marketing must be given the unlimited support of the rest of the organisation.


- Opening up new markets With our strategy for software development of one new release and a new supplementary product per quarter, we are targeting the penetration of new market segments through the new product or functionality which are too small-scale for the larger providers, who are now also demanding more functionalities in integrated software packages, on the basis of the new technologies available. At the moment, these market segments are exclusively served by small niche providers. This year, we plan to complete the ship's crew and master payroll accounting module and undertake our first foray into this particular segment. Our target is to offer a new segment solution every two years and then within three years, to have gained market share of 20 - 30 per cent.

- Careful selection of distribution partners

Our strategic partnership with ADP, the American HR service provider, has shown that P&I is no longer being seen purely as a product supplier, but also as a brand which enhances the success of HR service providers. In the meantime, in Germany alone, over 20,000 salary statements per month are being calculated using P&I Software in ADP data centres: ADP was able to attract this custom thanks to our software. In Spain, ADP's positioning with our software has resulted in their conclusion of service contracts with three new customers on the basis of P&I LOGA. We are developing our brand identity and are now perceived by partners as being an indispensable key element of their own business model. P&I must seek out and win a new strategic partner of this kind every two years, while taking the time to position the P&I brand so that the new partner can achieve greater success in acquiring further customers. The successful sales and marketing activities of such partners lead to sales for P&I of licenses and software support, and to a certain extent, to a share of consulting business. In the fiscal year just ended, at Logica in the Netherlands, more than 150 customers migrated to P&I LOGA. Logica has now fully integrated P&I-Software into its business model and is almost completely independent of us regarding customer support. It is particularly gratifying to us that Logica has recently decided to use our systems for its own payroll accounting for its round 7,000 employees, as from January 1, 2010. In setting up such partnerships, our vision is to develop close collaboration with strong partners and a muscular sales and marketing organisation. Our aim is that our partners will see that their collaboration with P&I is a unique selling point which will lead to their long-term economic success.


- Increasing sales to existing customers In April of last year, we had already begun to offer customers personalised consulting services as an outcome of the changes in orientation in Consulting. It is our goal to ensure customer satisfaction in all aspects of our dealings with them. P&I customers must always be made fully aware of why their decision to use P&I solutions was right; and that this decision was an assurance of continuity, as well as of personalised top quality. Currently, we generate 50 per cent of our Consulting sales from continuing support of existing customer accounts. In five years' time, we aim to have 1,000 customers who are using the whole P&I product portfolio. And we will endeavour to increase the number of existing customers using our time management module from the present 185 to 1,000.

P&I is a strong brand and strong partner: we are ready for tomorrow.

Wiesbaden, May 19, 2009 Board of Directors

P & I Personal & Informatik AG

Balance Sheeat as at March 31, 2009

2009 2008 2009 2008Assets 000 euro 000 euro Equity and Liabilities 000 euro 000 euro

A. FIXED ASSETS A. EQUITY

I. INTANGIBLE ASSETS I. SUBSCRIBED CAPITAL 7,700 7,7001. Software 276 3632. Customer bases 3,797 4,750 II. CAPITAL RESERVE 770 770

4,073 5,113III. REVENUE RESERVE

II. TANGIBLE ASSETS - Legal reserve 2 21. Factory and office equipment 760 813 - Reserve for own shares 1,484 02. Fixtures 18 12 - Other revenue reserve 46 46

778 825III. FINANCIAL ASSETS IV. NET PROFIT/LOSS 16,531 13,259

1. Shares in affiliated companies 1,834 1,8342. Loans to affiliated companies 2,359 3,273 EQUITY 26,533 21,777

4,193 5,107

FIXED ASSETS 9,044 11,045B. ACCRUALS

B. CURRENT ASSETS 1. Tay accruals 2,483 1,0332. Other accruals 7,750 5,926

I. INVENTORIES 10,233 6,9591. Work in progress 1,028 6602. Goods 141 133

1,169 793 C. LIABILITIES

II. RECEIVABLES AND 1. Advance payments received on orders 3,150 4,133OTHER ASSETS - of which with a residual term of up to one year: 3,150,000 euro1. Trade receivables 8,325 85,33 (previous year: 4,133,000 euro)2. Receivables from affiliated companies 826 591 2. Accruals to affiliated companies 339 2673. Other assets 1,726 1,770 - of which with a residual term of up to one year: 339,000 eurow

10,877 10,894 (previous year: 267,000 euro)3. Trade payables 912 671

- of which with a residual term of up to one year 912,000 euroIII. SECURITIES (previous year: 671,000 euro)

1. Own shares 1,484 0 4. Other liabilities 847 1,0682. Other investments 10,320 6,758 - of which with a resiudal term of up to one year 847,000 euro

11,804 6,758 (previous year: 1,068,000 euro) - of which from taxes 824,000 euro (previous year: 310,000 euro)

IV. CASH ON HAND - of which relating to social security and similiar obligations 3,000 euro AND IN BANK BALANCE 20,259 15,562 (previous year: 10,000 euro)

5,248 6,139CURRENT ASSETS 44,109 34,007

D. ACCRUALS AND DEFERRALS 11,743 10,491C. DEFERRED INCOME 604 314 - of which future maintenance income 11,676 10,449

53,757 45,366 53,757 45,366


Statement of income for the fiscal year from April 1, 2008 to March 31, 2009

2008/09 2007/08000 euro 000 euro

1. Sales 51,987 55,234

2. Increase in stock of finished goods and in work in progress 368 -866

3. Other operating income 451 761

4. Cost of materials

a) Cost of raw materials and supplies, consumable stores and purchased materials -1,265 -1,146b) Cost of purchased services -5,485 -5,887

5. Peronsal expensesa) Wages and salaries -20,829 -20,995

b) Social security and pension expenses -2,257 -2,427 - of which for pension expenses: 0,000 euro (previous year: 0,000 euro)

6. Depreciation on intangible fixed assets and tangible assets -1,544 -4,138

7. Other operating expenses -9,109 -9,031

8. Income from financial investments 499 412- of which from affiliated companies 499,000 euro (previous year: 412,000 euro)

9. Income by loans on investments in financial assets 621 629- of which from affiliated companies 621,000 euro (previous year: 629,000 euro)

10. Other taxes and similar expenses 479 795- of which from affiliated companies 132,000 euro (previous year: 248,000 euro)

11. Write downs on financial assets andmarketable securities -104 -103

12. Taxes and similiar expenses 0 -10 13. Result of ordinary activities 13,812 13,228 14. Taxes on income -4,435 -4,183

15. Other taxes -1 43

16. Net income for the year 9,376 9,088

17. Profit carried forward from previous year 8,639 4,171

18. Transfer to the reserve for own shares -1,484 0

19. Retained earnings 16,531 13,259


2008/2009 2007/2008as at March 31, 2009 000 euro 000 euro

1. Cash flow from operating activitiesResult of period 9,376 9.088

Depreciation (+)/Appreciation (-) of tangible and intangible assets 1,544 4,138Income received from written-down claims -621 -629Depreciaton (+)/Appreciation (-) of marketable securities 103 104Increase (+)/Decrease(-) in accruals 3,274 -4,020

Losses (+)/Profit (-) from the disposal of tangible and intangible assets -1 66

Losses (+)/Profit (-) from the disposal of financial assets and of marketable securities -43 0

Increase (-)/Decrease (+) in inventories, trade receivables and other assets -638 -333

Increase (+)/Decrease (-) in trade payables and other liabilities 361 -306

Other operating income/expenditure 0 161

Cash flow from operating activities 13,355 8,269

2. Cash flow from investing activities

Proceeds (+) from the sale of tangible assets/intangible assets 11 757Payments (-) for investments in tangible assets -405 -553

Payments (-) for investments in intangible assets -62 -24Proceeds from repayments of loans to affiliated companies 4,913 4,143Payments for the granting of loans to affiliated companies -3,378 -4,137Proceeds (+) from the sale of marketable securities 1,377 8,196

Payments (-) for the acquisition of marketable securities -5,010 -5,944

Cash flow from investing activities -2,554 2,438

3. Cash flow from financing activitiesPayments for the acquisition of own shares -1,484 0Payments for the distribution of the dividend -4,620 -7,700

Cash flow from financing activities -6,104 -7,700

4. Liquid resources at the end of the periodNet changes in liquid resources affecting payments (interim sum of 1 - 3) 4,697 3,007Liquid resources at the beginning of the period 15,562 12,555Liquid resources at the end of the period 20,259 15,562

P & I Personal & Informatik AG, Wiesbaden

Notes 2008/2009 A. General Notes to the Annual Financial Statements The annual financial statements have been compiled in euros and in compliance with the provisions of Commercial Law. Disclosures in the balance sheet, the income statement, the notes to the accounts and the management report may be shown, for reasons of clarity, in euros, thousands of euros or millions of euros. B. Notes on the Accounting and Valuation Methods Intangible and Tangible Assets Acquired intangible assets are shown at their acquisition cost. Acquired property rights are written down on a straight-line basis over five years. Depreciation of the LOGA® software begins after the completion of the respective localisations (adaptation of the LOGA® property rights to individual host country conditions). Other intangible assets acquired are systematically written off on a three-year straight-line basis. The customer base results from the acquisition of businesses or companies in the software industry and is written down on a straight-line basis over a period of between five and ten years Property, plant, and equipment items are measured at their acquisition cost and, insofar as they are depreciable, are written down according to their estimated useful operating life. Non-scheduled depreciation is carried out if a lower valuation is mandatory. Fixtures are written off on a straight-line basis over four years, but no longer than the residual period of the lease at the time of their installation. Vehicles are written off on a straight-line basis over a period of five to six years. Ordinary computer hardware is written off on a straight-line basis over two to three years, while main frame computers or servers are written off on a straight-line basis over a period of seven years. Other business fixtures and equipment are written off on a straight-line basis over a period of between four and thirteen years. From January 1, 2008, low value fixed assets of up to 150 euros net in individual value are written off completely in the year of their purchase. For fixed assets with an individual value of between 151 to 1,000 euros, a compound item, as from January 1, 2008, was formed, written off on a straight-line basis over a period of five years Financial Assets Investments are measured at their acquisition cost. They are only depreciated to a lower value at balance sheet date if the decrease in value is expected to be lasting. Where a non-scheduled depreciation has been carried out on the lower fair value of investments in financial assets, should the grounds for the depreciation no longer exist at a later balance sheet date, revaluation will take place.

Current Assets Inventory items are recognised at their acquisition cost or historical cost respectively or at the lower fair value. Receivables from sales of software are recognised insofar as a valid signed contract exists with the customer without right of rescission and the software has been delivered. Receivables from maintenance sales are recognised proportionately to the period of the contract. Receivables from consulting and training services are recognised according to the type of service performed. Receivables are shown at their nominal value. Valuation adjustments on receivables are made according to the probability of bad and doubtful debts occurring. A general provision for bad and doubtful debts of 1% (previous year: 1 %) was formed for debts not individually adjusted. Short-term investments are recognised at purchase cost or with the lower fair value as at balance sheet date. Gains in securities are recognised according to their realised value. Losses in securities are recognised when they arise.

Prepaid expenses Prepayments and accrued income are determined commensurate with the accrual accounting of expenditure. Deferred income takes into account income due after balance sheet date which has been received before balance sheet date. Accruals Tax accruals and other accruals are recognised respectively at the amount which is required according to reasonable and prudent business judgement. taking into account all identifiable risks and doubtful accounts. Liabilities Liabilities are recognised at their redemption amount. Foreign Currency Translation Receivables and payables are converted at the day's exchange rate applying when the transaction is booked. At balance sheet date the value of receivables or payables in foreign currency is measured in accordance with the lower of cost or market or chief value principle respectively.

C. Balance Sheet Details 1. FIXED ASSETS 1.1. INTANGIBLE ASSETS

Software

'000 euros

Customer bases

'000 euros

Total

'000 eurosAcquisition costs April 1, 2008 3,777 15,666 19,443Additions 2008/2009 62 0 62Disposals 2008/2009 3 0 3March 31, 2009 3,836 15,666 19,502 Accumulated depreciation April 1, 2008 3,414 10,916 14,330Additions 2008/2009 149 953 1,102Disposals 2008/2009 3 0 3March 31, 2009 3,560 11,869 15,429 Net carrying amount March 31, 2009

276 3,797 4,073

Net carrying amount March 31, 2008

363 4,750 5,113

The column "Software" contains property rights acquired and similar rights and assets as well as licences to such rights and assets. The Company writes off acquired property rights on a straight-line basis over a period of five years. 1.2. TANGIBLE ASSETS

Fixtures.

'000 euros

Other property, plant and equipment.

'000 euros

Total

'000 eurosAcquisition costs April 1, 2008 37 2,272 2,309Additions 2008/2009 9 396 405Disposals 2008/2009 0 154 154March 31, 2009 46 2,514 2,560Accumulated depreciation April 1, 2008 25 1,459 1,484Allocations 2008/2009 3 439 442Disposals 2008/2009 0 144 144March 31, 2009 28 1,754 1,782 Net carrying amount March 31, 2009

18 760 778

Net carrying amount March 31, 2008

12 813 825

The item "Disposals 2008/2009" in "Other property, plant and equipment" is accounted for in the main by the scrapping of individual items.

1.3. FINANCIAL ASSETS Shares in affiliated companies In '000 euros P&I

GmbH Vienna

P&I AG

Horgen

P&I BV

Amster-dam

P&I s.r.o.

Bratislava

P&I Beteil. GmbH Wiesb.

ZHS GmbH & Co. KG, Wiesbaden

Total

Acquisition costs April 1, 2008 37 1,805 18 49 25 1,705 3,639Additions 0 0 0 0 0 0 0Disposals 0 0 0 0 0 0 0March 31, 2009 37 1,805 18 49 25 1,705 3,639 Depreciations April 1, 2008 0 1,805 0 0 0 0 1,805Additions 0 0 0 0 0 0 0Disposals 0 0 0 0 0 0 0March 31, 2009 0 1,805 0 0 0 0 1,805 Carrying amount April 1, 2009

37 0 18 49 25

1,705 1,834

Carrying amount March 31, 2008

37 0 18 49 25

1,705 1,834

Lending to affiliated companies In '000 euros P&I

GmbH Vienna

P&I AG

Horgen

P&I BV

Amsterdam

P&I s.r.o.

Bratislava

P&I Beteil. GmbH Wiesbaden

Total

April 1, 2008 0 1,403 3,273 0 0 4,676Additions 0 1,141 2,237 0 0 3,378Disposals 0 1,762 3,151 0 0 4,913March 31, 2009 0 782 2,359 0 0 3,141 Depreciations April 1, 2008 0 1,403 0 0 0 1,403Additions 0 0 0 0 0 0Disposals 0 621 0 0 0 621March 31, 2009 0 782 0 0 0 782 Carrying amount March 31, 2009

0 0 2,359 0

0 2,359

Carrying amount March 31, 2008

0 0 3,273 0

0 3,273

Lending to affiliated companies refers to loans. Additions to lending to affiliated companies in fiscal 2008/2009 amounted to 3,378,000 euros (previous year: 4,137,000 euros). No non-scheduled depreciations were carried out in this fiscal year.

In the fiscal year just ended, P&I Personal & Informatik AG Horgen (previously Thalwil) made repayments on its loan. The loan amount was reduced from 1,403,000 euros to 782,000 euros. An amount of 621,000 euros of the loan loss provision formed was reversed in consequence. 2. CURRENT ASSETS 2.1. INVENTORIES

2008/2009'000 euros

2007/2008'000 euros

Work in progress 1,028 660Merchandise 141 133Total 1,169 793

Work in progress arises out of contracts for which P&I must deliver a specific contractual object. Included here are fixed price projects in Consulting and Development carried out jointly with the customer, generally for the purpose of extension of standard software. The services rendered are measured at their historical cost as at balance sheet date. 2.2. RECEIVABLES AND OTHER ASSETS Trade receivables

2008/2009'000 euros

2007/2008'000 euros

Trade receivables 8,511 8,752Specific provision for bad and doubtful debts -104 -140General provision for bad and doubtful debts -82 -79Total 8,325 8,533

To cover general credit risks and the cost of reminders, a general provision for bad debts was formed amounting to 1% of receivables which have not been individually adjusted. Receivables from affiliated companies

2008/2009'000 euros

2007/2008'000 euros

P&I Personal & Informatik GmbH, Vienna, Austria

324 179

P&I Steyr GmbH, Steyr, Austria

3 0

ZHS Verwaltungs GmbH & Co. KG, Wiesbaden

499 412

Total 826 591 These receivables arise out of current deliveries and services and from the results transfer from ZHS Verwaltungs GmbH & Co. KG.

Other Assets

2008/2009'000 euros

2007/2008'000 euros

Securities for securing employee credit 760 797

Receivable outstanding, Infoniqa 750 750Corporation tax refund claim 104 100Interest receivable 0 69Other 112 54

Total 1,726 1,770 All receivables and other assets have a term of under one year. In the previous year, “Other Assets” amounted to 2,000,000 euros and had a residual term of more than one year. 2.3. SECURITIES

2008/2009'000 euros

2007/2008'000 euros

Own shares 1,484 0Money market funds 9,508 5,842Bonds 812 916Other securities 11,804 6,758

"Own Shares" contains shares purchased under the share buyback scheme of P&I Personal & Informatik AG. 2.4. CHEQUES, CASH ON HAND, AND CASH IN BANK BALANCES

2008/2009'000 euros

2007/2008'000 euros

Term deposits 17,030 12,985Cash in bank balances 3,228 2,555Cheques 0 20Cash on hand 1 2Total 20,259 15,562

3. PREPAID EXPENSES "Prepaid expenses" in fiscal 2008/2009 amounts to 604,000 euros (previous year: 314,000 euros) and contains, in addition to accrued insurance premiums and maintenance fees, contains advance payments on activities taking place in the next fiscal year.

4. EQUITY 4.1. CAPITAL STOCK The capital stock of the Company remained unchanged at 7,700,000 euros as at March 31, 2009 and is divided into 7,700,000 no-par value bearer shares. In the year under review, as in the previous year, no subscription rights were issued. At the Annual General Meeting of September 2, 2008, the Board of Directors was authorised, with the consent of the Supervisory Board and until March 1, 2010, to purchase treasury stock to a maximum of ten per cent of the capital stock of the Company existing at the time of the resolution passed at the Annual General Meeting. On October 23, 2008, the Board of Directors of P&I Personal & Informatik AG resolved to institute a share buyback scheme. Company shares amounting to up to four per cent of capital stock (a limit of 308,000 shares) are to be acquired on the stock exchange. However, the maximum price to be paid (excluding ancillary acquisition costs) should not exceed 4.5 million euros. The Board of Directors intends, with the consent of the Supervisory Board, to retire those of its own shares acquired during the buyback, thus reducing the capital stock. However, the Board of Directors reserves the right to use all or some of P&I's own shares for some other purpose, within the limitations of the authorisation granted by the AGM of September 2, 2008. The scheme, begun on October 23, 2008, was foreseen to end on March 31, 2009 at the latest. It was resolved on March 17, 2009 to extend the scheme, under otherwise unchanged conditions, to September 30, 2009. In the period between October 27, 2008 and March 31, 2009, a total of 135,682 shares was repurchased. The number of repurchased shares corresponds to a proportional amount of the capital stock of a total of 135,682 million euros, which is 1.76 % of shares issued at the date of adoption of the resolution. The payments made amounted to 1,484,672.68 euros. The Board of Directors has been further authorised, with the consent of the Supervisory Board and until September 1, 2013, to increase the capital stock of the Company against monetary or non-monetary contributions to a maximum of 3,850,000 euros by issuing new shares (authorised capital 2008); under certain circumstances, the subscription rights of existing shareholders may be excluded. 4.2. CAPITAL RESERVES The capital reserve of the Company remained unchanged at 31 March 31, 2009, at 770,000 euros. 4.3. REVENUE RESERVES The legal reserves of the Company remained unchanged at March 31, 2009 at 2,000 euros. Legal reserves were formed in compliance with § 150 AktG. (German Companies Act).

Owing to the share buyback scheme introduced during the fiscal year just ended, reserves for treasury shares were formed. As at March 31, 2009 these amounted to 1,484,672.68 euros. The other revenue reserves of the Company remained unchanged at 31 March 2009, at 46,000 euros. 4.4. NET PROFIT/LOSS The transfer of profits of 16,531,000 euros for fiscal 2008/2009, as at March 31, 2009, is set out as follows:

'000 eurosProfit carried forward 13,259Dividend distribution -4,620Allocation to reserves for treasury shares -1,484Annual net profit 9,376As at March 31, 2009 16,531

The net profit shown in the annual financial statements of P&I Personal & Informatik AG, prepared in accordance with commercial legislation, is, pursuant to the German Companies Act, material to a dividend distribution. Paid out dividends 2007/2008 The Annual General Meeting passed a resolution on September 2, 2008 to pay out for fiscal 2007/2008, from the net profit for fiscal 2007/2008 of 13,259,168.00 euros, the sum of 4,620,000.00 euros for a dividend of 0.60 euros per no-par share entitled to a dividend. The remaining, non-paid-out net profit, an amount of 8,639,168.00 euros, would be carried forward to new account. The dividend was paid out on September 3, 2008. Proposed dividend 2008/2009 The Board of Directors intends to propose to the next AGM that the net profit of the Company for fiscal 2008/2009 be appropriated as follows: Dividend payout of 1.00 euro per no-par share entitled to a dividend.

EURDividends 7,564,318.00Profit carried forward 8,966,590.74Retained earnings 16,530,908.74

The proposal for appropriation of profit takes into account own shares entitled to dividend held by P&I AG as at March 31, 2009. If further treasury shares are purchased up to the time of the next AGM, the number of shares entitled to dividend may decrease. Correspondingly, if treasury shares are sold before the next AGM, the number of shares entitled to dividend may rise. In these cases, if the dividend amount per no-par share entitled to dividend remains the same, an amended proposal will be made to the AGM. The proposal will be to reduce the total amount of the distribution to shareholders by the partial amount which would have been paid on the treasury shares newly acquired between April 1, 2009 and the date of the appropriation of profit decision made, and to raise it by the partial amount to be paid on treasury shares which are sold between April 1, 2009 and the date of the appropriation of profit decision. The profit carried forward is increased or decreased by these partial amounts.

5. ACCRUALS 5.1. TAX ACCRUALS

2008/2009'000 euros

2007/2008'000 euros

Corporation tax and solidarity surcharge-{}- 1,334 557Business tax 1,149 476Total 2,483 1,033

Tax accruals include accruals for tax charges from the fiscal 2006/2007 (96,000 euros), the previous fiscal year 2007/2008 (989,000 euros) as well as for the fiscal year just ended (1,398,000 euros). Tax accruals for 2006/2007 for corporation tax and the solidarity surcharge were used completely and those for business tax partially, as tax assessment notices have been received in the meantime. 5.2. OTHER ACCRUALS

2008/2009'000 euros

2007/2008'000 euros

Premiums, commissions and bonuses 3,295 2,394Employee credit 760 797Annual leave 713 619Outstanding purchase invoices 377 316Long-term bonus 842 242Salaries 209 195Part-time scheme for near retirees (Altersteilzeit)

235 190

Legal and consulting expenses 268 183Trade association 71 106Other 980 884Total 7,750 5,926

Payment of a performance related target income, providing a long-term incentive, was agreed on with one member of the Board of Directors and has been in effect since September 1, 2007. The long-term bonus depends on the achievement of the target Group EBIT agreed on previously with the Supervisory Board and on the degree to which targets have been met in the respective fiscal year. The term of this agreement extends to the end of fiscal 2011/2012. 6. LIABILITIES As in the previous year, all liabilities have a residual term of less than one year as at balance sheet date and are not secured.

7. DEFERRED INCOME

2008/2009'000 euros

2007/2008'000 euros

Accrued maintenance fees 11,676 10,449Accrued rents software 49 42Other deferred income 18 0Total 11,743 10,491

The company has concluded maintenance contracts for the ongoing updating of software, in particular with relation to amendments in legislation. As the Company invoices customers in January as a rule, maintenance income due after balance sheet date is deferred. This also applies to income in the area of software hire/leasing. 8. CONTINGENCIES AND OTHER FINANCIAL OBLIGATIONS

Contingencies Credit by way of bank guarantee The Company has a master agreement with the Dresdner Bank AG on furnishing collateral ("credit by way of bank guarantee“) for its liabilities to a total amount of 800,000 euros (previous year: 400,000 euros). As at balance sheet date, availment of credit by way of bank guarantee to the amount of 686,000 euros (previous year: 254,000 euros) was made use of. Group guarantee The Company has declared that in the event that P&I Personeel & Informatica, B.V., Amsterdam, Netherlands is unable to fulfil the contact it has concluded with a major client, it will enter fully into the contractual obligations agreed between P&I Personeel & Informatica, B.V., Amsterdam, Netherlands and the client. The Company has declared that it will assume unconditional and unqualified responsibility for the company debts of P & I Personal & Informatik AG, Horgen, Switzerland in the event of its insolvency. The company debts of P & I Personal & Informatik AG, Horgen, Switzerland, according to the individual financial statements of the company as at March 31, 2009, amounted to 1,236,193.47 Swiss franks (previous year: 830,781.54 Swiss franks). The company has not entered into any further contingencies pursuant to § 251 in conjunction with § 268 Para. 7 of the German Commercial Code (HGB).

Other financial obligations Details of other financial obligations as defined in §285 No. 3 (HGB) which neither appear in the balance sheet nor are required by § 251 HGB to be shown are set out as follows:

'000 eurosRents 794Property, plant and equipment 30Vehicles 1,410Total 2,234

Future financial obligations are distributed over the following years as per agreement:

'000 euros2009/2010 1,2582010/2011 5802011/2012 2612012/2013 792013 and later 56Total 2,234

D. Notes on the Income Statement 1. SALES Most sales income was generated by domestic sales.

2008/2009 '000 euros

2007/2008'000 euros

Licenses 15,198 14,872Consulting 15,536 17,910Maintenance 19,782 21,130Merchandise 191 302Other 1,280 1,020Total 51,987 55,234

Included in sales income are sales with affiliated companies amounting to 4,609,000 euross (previous year: 5,582,000 euros). Consulting sales also includes income from training and seminars as well as travel expenses debited to third parties. 2. EMPLOYEE EXPENSES Employee expenses are broken down as follows:

2008/2009 '000 euros

2007/2008'000 euros

Salaries 20,829 20,995Social security contributions 2,257 2,427Total 23,086 23,422

3. Depreciations Included in depreciations are write-downs on the customer base amounting to 953,000 euros (previous year: 3,458,000). No unscheduled depreciations were posted (previous year: 1,400,000 euros).

4. INCOME FROM PARTICIPATIONS The income of 621,000 euros (previous year: 629,000 euros) concerns, as in the previous year, receipt of payments on an impaired loan to our Swiss subsidiary made in previous years. In this fiscal year, the Company shows income from investments to the amount of 499,000 euros (previous year: 412,000 euros) from ZHS Verwaltungs GmbH & Co. KG, Wiesbaden. 5. TAXES ON INCOME Income tax expenses are broken down as follows:

2008/2009 '000 euros

2007/2008'000 euros

Income tax – current year Corporation tax 2,128 1,992 Business tax 2,156 2,021 Solidarity surcharge 117 110Income tax - previous years 34 60Total 4,435 4,183

Tax expenses (34,000 euros) for previous years are due to adjustments for previous years and also adjustments caused by the capitalised corporation tax credit pursuant to § 37 of the German Corporate Income Tax Act (KoeStG.) E. Other Details 1. NUMBER OF EMPLOYEES The average number of employees, based on the number of people employed at the end of the respective quarter, amounted to 220 (previous year 234). Members of the Board of Directors, trainees or students doing internships are not included. The figure can be broken down into the following categories: Employees 212 (previous year: 226) Senior executives 8 (previous year: 8) 2. EXECUTIVE BODIES OF THE COMPANY The Board of Directors of the Company consists of at least two members. The Supervisory Board determines the number of members on the Board of Directors (see §4 Para.1 of the Memorandum and Articles of Association, last amended on September 2, 2008). The Members of the Board of Directors are: Vasilios Triadis, Chairman of the Board, Director of Consulting, Research and Development and M&S.

Dr Hartmut Voss, Director of Finance, HR and Administration. Mr Vasilios Triadis is a member of the Scientific Advisory Committee of otris Software AG, Dortmund and of Solvenius GmbH, Stuttgart. Dr Voss is Deputy Chairman of the Supervisory Board of e.bootis AG, Waiblingen. Mr Vasilios Triadis and Dr Hartmut Voss represent the Company together with one other member of the Board of Directors or with an authorised officer. Remuneration for the members of the Board of Directors is determined by the Supervisory Board and comprises both fixed and variable components. The fixed component, aside from a fixed-amount monthly remuneration, also includes benefits in kind, in particular the valuation for company vehicles to be applied in compliance with German taxation regulations. One part of the variable component of the Board of Directors' remuneration constitutes a performance related target income. The amount of the performance related target income is calculated on the basis of the degree to which the target Group EBIT (earnings before interest and taxes) set by the Supervisory Board has been fulfilled.

The total remuneration for the members of the Board of Directors in fiscal 2008/2009 and the previous year is shown in the following table: In '000 euros 2008/2009 2007/2008Fixed income / benefits in kind 652 527EBIT variable 500 250SAR schemes - 1,636Bonus schemes 760 242Total remuneration 1,912 2,655

A detailed description of the remuneration system for the Board of Directors is to be found in the Combined Management Report. In accordance with § 95 AktG (German Companies Act) in conjunction with § 6 of the Memorandum and Articles of Association, version of September 2, 2008, the Company has a Supervisory Board consisting of three members. The Members of the Supervisory Board are: Klaus C. Ploenzke, Chairman Mr Klaus C. Ploenzke, Chairman of the Board of Directors of Ploenzke Holding AG, Wiesbaden, is member of the Supervisory Board of Syncwork AG, Dresden, member of the Supervisory Board of SolidLine AG, Walluf. member of the Supervisory Board of Viveon AG, Munich. member of the Supervisory Board of LH Systems AG, Kelsterbach. Michael Wand, Deputy Chairman Mr Michael Pluemer, Managing Director of OP&V GmbH, Iserlohn, does not have a seat on the controlling body of any other foreign or domestic companies. Michael Abels, until April 3, 2008 Mr Michael Abels, partner in Sozietaet Oppenhoff & Partner, Cologne, is Chairman of the Supervisory Board of OneVision Software AG, Regensburg.

Helmut Hilgers, from April 7, 2006 to September 2, 2008 Mr Helmut Hilgers, Management Consultant, Koenigstein, does not have a seat on the controlling body of any other foreign or domestic companies. Robert Vinall, from September 2, 2008. Mr Robert Vinall, Managing Director of RV Capital GmbH, Kilchberg (Switzerland), does not have a seat on the controlling body of any other foreign or domestic companies. As Chairman of the Supervisory Board, Mr Klaus C. Ploenzke received in this fiscal year, in accordance with the Articles of Association, a fixed remuneration of 14,318.17 euros, while Mr Michael Pluemer received, in accordance with the Articles of Association, a fixed remuneration of 12,782.30 euros. On a pro rata basis for the period of their membership of the Supervisory Board, Mr Helmut Hilgers and Mr Robert Vinall received respectively a fixed remuneration of 4,561.85 euros and 6,530.33 euros in accordance with the Articles of Association. Mr Michael Abels waived his claim to remuneration. Mr Klaus C. Ploenzke, member of the Supervisory Board of P&I Personal & Informatik AG, Wiesbaden, advises and supports the Company in making contact with new customers and also in identifying possible acquisitions and analysing synergy potential with these. In fiscal 2008/2009, consultation payments drawn amounted to 26,000 euros (previous year: 26,000 euros). Mr Michael Pluemer, Supervisory Board member of P&I Personal & Informatik AG, advises and supports the Company in the development of the business area of Business Process Outsourcing (BPO) as well as in identifying possible acquisitions and carrying out their purchase. In fiscal 2008/2009, consultation payments drawn amounted to 27,000 euros (previous year: 16,000 euros). 3. AUDITORS FEES (DETAILS ACCORDING TO § 285 HGB) In this fiscal year fees for the annual auditors within the meaning of § 319 Para. 1 HGB, of 86,000 euros (previous year: 98,000 euros) for the annual audit and 0.00 euros (previous year: 18,000 euros) for other services were expensed. 4. AFFILIATED COMPANIES The Company is the parent company for the following subsidiaries as defined by § 290 of the German Commercial Code (HGB) and which are thereby also affiliated companies according to § 271 Para. 2 of the German Commercial Code (HGB). The company is quoted on the Prime Standard in Frankfurt on Main and prepares its consolidated financial statements in conformity with the International Financial Reporting Standards (IFRS). The breakdown of P&I Personal & Informatik AG shareholdings with a direct or indirect share in the Company's capital, shareholder’s equity and profit or loss for the year as at March 31, 2009 is set out as follows, expressed in ‘000 euros:

In '000 euros

Share in capital Profit / loss (-)

Profit/loss(-) for the year

2008/2009

Equity of thecompany

2008/2009

DOMESTIC P & I Beteiligungsgesellschaft mbH, Wiesbaden

100 %3 33

ZHS Verwaltungs GmbH & Co. KG 100 % -1 * 103ZHS Zeitmanagementsysteme GmbH & Co. KG 100 % 500 * 102 FOREIGN P&I Personal & Informatik AG, Horgen, Switzerland 100 % 360 -868P&I Personal & Informatik GmbH, Vienna, Austria 100 % 157 2,287P&I Steyr GmbH, Steyr, Austria 100 % 83 119P&I Personeel & Informatica BV, Amsterdam, Netherlands 100 % 168

1,907

P&I Personalistika & Informatika s.r.o., Bratislava, Slovakia

100 %48 216

*before profit and loss transfer 5. DISCLOSURES PURSUANT TO §160 AktG The Company was informed, that the following investments pursuant to § 21 Para. 1 German Securities Trading Act (WpHG) exist: On May 16, 2008 P&I was notified by Deutsche Bank AG, headquartered in Frankfurt (Germany) pursuant to §§21 et seq. 1 WpHG of the following: 1 WpHG of the following: The percentage of voting rights in P&I Personal & Informatik AG held by our subsidiary, DWS Investment GmbH, Frankfurt (Germany), fell below the 5% threshold and now amounts to 3.83 % (corresponding to voting rights of 295,000). Hermes Administration Services Limited, based in London (Great Britain) advised P&I on September 29, 2008 pursuant to § 21 Para. 1 German Securities Trading Act (WpHG) of the following. We, Hermes Administration Services Limited as authorised administrators of the BT Pension Scheme Trustees Limited, Lloyds Chambers, 1 Portsoken Street, London E1 8HZ, England ("BTPSTL") advise, pursuant to §§ 21, 22 Para. 1 WpHG with regard to the possession of voting rights in P&I Personal & Informatik AG (the "Company") in the name of BTPSTL and its subsidiaries,

- BriTel Fund Nominees Limited Lloyds Chambers, 1 Portsoken Street, London E1 8HZ, England ("BFNL“)

- BriTel Fund Trustees Limited Lloyds Chambers, 1 Portsoken Street, London E1 8HZ, England ("BFTL“)

- Hermes Fund Managers Limited (formerly Hermes Pensions Management Limited), Lloyds Chambers, 1 Portsoken Street, London E1 8HZ, England ("HFML“), and

- Hermes Investment Management Limited, Lloyds Chambers, 1 Portsoken Street, London E1 8HZ, England ("HIML“) that:

Annex 1.4 / 16

as at August 23, 2007, pursuant to § 21 Para. 1 WpHG the percentage of voting rights of BTPSTL in the Company had risen above the 3 % threshold and now amounted to 4.87 % (corresponding to voting rights of 375,000). The entire 4.87 % of voting rights in the Company are, pursuant to § 22 Para. 1 Sentence No. 1 WpHG, assigned to BTPSTL via its subsidiaries BFTL and BFNL 1 as well as to BTPSTL, pursuant to § 22 Para. 1 Sentence No. 6 WpHG in association with § 22 Para. 1 Sentence 2 No. 1 WpHG. All voting rights are held directly by BFNL. as at August 23, 2007, pursuant to § 21 Para. 1 WpHG the percentage of voting rights of BFNL in the Company had risen above the 3 % threshold and now amounted to 4.87 % (corresponding to voting rights of 375,000). All voting rights are held directly by BFNL. as at August 23, 2007, pursuant to § 21 Para. 1 WpHG the percentage of voting rights of BFTL in the Company had risen above the 3 % threshold and now amounted to 4.87 % (corresponding to voting rights of 375,000). The entire 4.87 % of voting rights in the Company are, pursuant to § 22 Para. 1 Sentence No. 1 WpHG, assigned to BFTL via its subsidiary BFNL an well as, pursuant to 1 Sentence No. 6 WpHG in association with § 22 Para. 1 Sentence 2 WpHG, to BFTL. All voting rights are held directly by BFNL. as at August 23, 2007, pursuant to § 21 Para. 1 WpHG the percentage of voting rights of HFML in the Company had risen above the 3 % threshold and now amounted to 4.87 % (corresponding to voting rights of 375,000). The entire 4.87 % of voting rights in the Company are, pursuant to § 22 Para. 1 Sentence No. 6 WpHG in association with § 22 Para. 1 Sentence 2 WpHG assigned to HFML. All voting rights are held directly by BFNL. as at August 23, 2007, pursuant to § 21 Para. 1 WpHG the percentage of voting rights of HIML in the Company had risen above the 3 % threshold and now amounted to 4.87 % (corresponding to voting rights of 375,000). The entire 4.87 % of voting rights in the Company are, pursuant to § 22 Para. 1 Sentence No. 6 WpHG, assigned to HIML. All voting rights are held directly by BFNL. On February 10, 2009, Invesco Perpetual, headquartered in Oxfordshire, (UK), notified P&I pursuant to §21 Para. 1 WpHG of the following: As at January 20, 2009, the percentage of voting rights in P&I Personal & Informatik AG, Kreuzberger Ring 56, 65205 Wiesbaden, Germany, held by Invesco Limited had fallen below the 5% threshold and that the percentage of voting rights it held now amounted to 3.95 %% (corresponding to 304,581 voting rights). The voting rights are assigned to Invesco Limited pursuant to §22 Para. 1 Sentence 1, No. 6, and Sentence 2 WpHG. As at January 20, 2009, the percentage of voting rights in P&I Personal & Informatik AG, Kreuzberger Ring 56, 65205 Wiesbaden, Germany, held by Invesco UK Limited had fallen below the 5% threshold and that the percentage of voting rights it held now amounted to 3.95 %% (corresponding to 304,581 voting rights). The voting rights are assigned to Invesco UK Limited pursuant to §22 Para. 1 Sentence 1, No. 6, and Sentence 2 WpHG. On 24 February 24, 2009, P&I was notified by Investmentaktiengesellschaft fuer langfristige Investoren TGV, headquartered in Bonn (Germany) pursuant to §21 Para. 1 WpHG of the following: as at February 20, 2009, the percentage of voting rights in P&I Personal & Informatik AG, Kreuzberger Ring 56, 65205 Wiesbaden, Germany, held by the Investmentaktiengesellschaft fuer langfristige Investoren TGV had risen above the 3 % threshold and that the percentage of voting rights it held now amounted to 3.33 % (corresponding to 256,721 voting rights).

Annex 1.4 / 17

On March 18, 2009, P&I was notified by the Investmentaktiengesellschaft fuer langfristige Investoren TGV, headquartered in Bonn (Germany) pursuant to §21 Para. 1 WpHG of the following: as at March 17, 2009, the percentage of voting rights in P&I Personal & Informatik AG, Kreuzberger Ring 56, 65205 Wiesbaden, Germany, held by the Investmentaktiengesellschaft fuer langfristige Investoren TGV had risen above the 5 % threshold and that the percentage of voting rights it held now amounted to 5.00027 % (corresponding to 385,021 voting rights). 6. DECLARATION OF COMPLIANCE PURSUANT TO § 161 AktG The Company submitted the Declaration of Compliance pursuant to §161 AktG in November 2008. It is published on P&I’s website and can also be requested from the Company. P&I complies with the recommendations of the German Government Commission with the exception of personal liability under the D&O insurance, the individual disclosure of the Board of Directors' emoluments, the disclosure of the remuneration of the Board of Directors (see Corporate Governance Report), the ruling on majorities required for resolutions to be passed by the Board of Directors, the formation of Supervisory Board committees, and the results-oriented remuneration and age limit for members of the Supervisory Board. 7. EVENTS AFTER THE BALANCE SHEET DATE With effect from May 1, 2009 P&I AG, Wiesbaden, purchased 100 % of the shares of GRONEMEYER Gesellschaft fuer Datentechnik, EDV und Organisationsberatung mbH, Hoexter. Through the take-over, P&I AG acquires the core product APG2000, giving it possession of a platform-independent, standard time management software product which can be tailored to individual needs. The approximately 30 employees of GRONEMEYER GmbH, which will be kept on as an independently functioning business in Hoexter, have been taken on by P&I AG. An opening balance sheet for GRONEMEYER Gesellschaft fuer Datentechnik, EDV und Organisationsberatung mbH, Hoexter, as at May 1, 2009 can be drawn up once interim financial statements for the company, as at April 30, 2009, have been prepared. At this point, therefore, it is not yet possible to state reliably the carrying amount of the assets and liabilities and their possibly diverging fair values, as well as goodwill which may exist. Wiesbaden, May 19, 2009 Board of Directors


Analysis of fixed assets as at March 31, 2009

Book Value Book Value

April 1, 2008 Additions Disposals March 31, 2009 April 1, 2008 Additions Disposals March 31, 2009 March 31, 2009 March 31, 2008

000 euro 000 euro 000 euro 000 euro 000 euro 000 euro 000 euro 000 euro 000 euro 000 euro

A. FIXED ASSETS

I. Intangible assets1. Software 3,777 62 3 3,836 3,414 149 3 3,560 276 3632. Customer bases 15,666 0 0 15,666 10,916 953 11,869 3,797 4,750

19,443 62 3 19,502 14,330 1,102 3 15,429 4,073 5,113

II. Tangible assets1. Fixtures 37 9 46 25 3 28 18 122. Factory and other equipment 2,272 396 154 2,514 1,459 439 144 1,754 760 813

2,309 405 154 2,560 1,484 442 144 1,782 778 825

III. Financial assets1. Shares in affiliated companies 3,639 3,639 1,805 1,805 1,834 1,8342. Loans to affiliated companies 4,676 3,378 4,913 3,141 1,403 621 782 2,359 3,273

8,315 3,378 4,913 6,780 3,208 0 621 2,587 4,193 5,107

TOTAL FIXED ASSETS 30,067 3,845 5,070 28,842 19,022 1,544 768 19,798 9,044 11,045

Acquisition and Production Cost Accrued Depreciation


Analysis of fixed assets as at March 31, 2008

Book Value Book Value

April 1, 2007 Additions Disposals March 31, 2008 April 1, 2007 Additions Disposals March 31, 2008 March 31, 2008 March 31, 2007

000 euro 000 euro 000 euro 000 euro 000 euro 000 euro 000 euro 000 euro 000 euro 000 euro

A. FIXED ASSETS

I. Intangible assetsSoftware 3,536 241 3,777 3,257 157 3,414 363 279Customer bases 22,338 2,127 8,799 15,666 14,748 3,458 7,290 10,916 4,750 7,590

25,874 2,368 8,799 19,443 18,005 3,615 7,290 14,330 5,113 7,869

II. Tangible ssetsFixtures 37 37 20 5 25 12 17Other assets, factory and office equipment 2,122 553 403 2,272 1,287 518 346 1,459 813 835

2,159 553 403 2,309 1,307 523 346 1,484 825 852

III. Financial assetsShares in affiliated companies 6,167 2,528 3,639 1,827 22 1,805 1,834 4,340Loans to affiliated companies 5,417 4,137 4,878 4,676 2,767 1,364 1,403 3,273 2,650Non-current marketable securities 0 0 0 0 0 0Other loans 0 0 0 0 0 0

11,584 4,137 7,406 8,315 4,594 0 1,386 3,208 5,107 6,990

TOTAL FIXED ASSETS 39,617 7,058 16,608 30,067 23,906 4,138 9,022 19,022 11,045 15,711

Acquisition and Production Cost Accrued Depreciation

Responsibility Statement "To the best of our knowledge, and in accordance with the applicable reporting principles for the annual financial statements, the annual financial statements give a true and fair view of the assets, liabilities, financial situation and profit or loss of P&I Personal & Informatik AG, and the management report, which has been combined with the Group management report, includes a fair review of the development and performance of the business and the situation of P&I Personal & Informatik AG, as well as a description of the principal opportunities and risks associated with the expected development of P&I Personal & Informatik AG." Wiesbaden, May 19, 2009 P&I Personal & Informatik AG The Board of Directors

Report from the Supervisory Board ____________ In fiscal 2008/2009, the Supervisory Board of P&I AG fulfilled its tasks in accordance with legislation, the Memorandum and Articles of Association and Company bylaws, and provided consultative support and supervision for the Board of Directors of the Company within the meaning of the German Corporate Governance Code. The subject matter of the regular meetings and decisions taken by the Supervisory Board included development of sales and results, the financial situation, the strategic orientation of the Company, risk management, the adoption of the Group budget, corporate governance issues, M&A activities, taking decisions on specific matters requiring approval and questions concerning the remuneration of the Board of Directors. The Supervisory Board held four regular and a further four extraordinary meetings in fiscal 2008/2009, each time with all members present and with at least one meeting per quarter. Apart from this, four circular resolutions were passed. The Supervisory Board did not form any committees. In fiscal 2008/2009, there were no conflicts of interest within the meaning of Item 5.5 of the Corporate Governance Code. The following matters of importance were dealt with at Supervisory Board meetings during the past fiscal year:

• At two extraordinary meetings in April and May 2008, the Supervisory Board dealt with questions concerning the remuneration of the Board of Directors.

• At the Supervisory Board meeting in May 2008, the adoption of the annual financial statements as at March 31, 2008 as well as the approval of the consolidated financial statements as at March 31, 2008 took priority. In addition, preparations for the AGM 2008 were discussed.

• At its meeting in September 2008, the Supervisory Board concerned itself with the question of the appropriateness and legality of the remuneration for the Board of Directors, and within the scope of its review, concluded that it was appropriate and conformed to legislation. Remuneration for the members of the Board of Directors comprises both fixed and variable components. The governing criterion in assessing the variable compensation component is the level the Group EBIT (earnings before interest and taxes) reaches for the year. The amount paid shall not exceed a maximum of two hundred percent (200 %) of the target bonus.

• At its meeting in November 2008, the Supervisory Board discussed the relevant new company law provisions contained in the German modernisation of company annual accounts act (BilMoG).

• At a further meeting in January 2009, benchmark figures for the budget for fiscal 2009/2010 were adopted. The final version of the Budget as well as the prolongation of the share buyback scheme were resolved on at an extraordinary meeting of the Supervisory Board in March 2009.

• Circular resolutions were passed, including resolutions regarding the takeover of the business area of Jet-Pabis NG of Data Systems Austria AG & Co KG, Vienna; the agenda for the AGM 2008; and the start of a share buyback scheme on October 2008.

The comprehensive information supplied to the Supervisory Board always enabled it to fulfil its tasks of supervising and providing consultative support to the Board of Directors and arriving at necessary decisions.

In fiscal 2008/2009, the Supervisory Board also concerned itself with the issue of corporate governance in depth as well as the German Corporate Governance Code. In November 2008, the Supervisory Board and the Board of Directors jointly submitted a Declaration of Compliance pursuant to § 161 of the German Companies Act (AktG), in conformity with the German Corporate Governance Code. This declaration has been made permanently available to shareholders through its publication on the P&I website. The Supervisory Board complies with the recommendations of the German Government Commission, with the exceptions of personal liability under the D&O insurance; the formation of Supervisory Board committees, the results-oriented remuneration as well as the setting of an age limit for members of the Supervisory Board and the ruling on majorities required for resolutions to be passed by the Board of Directors. The Annual General Meeting of the Company resolved on August 29, 2006 pursuant to § 286 Para. 5 German Commercial Code (HGB), that an individual disclosure of the Board of Directors' remuneration would be partially withheld. Accordingly, the Supervisory Board did not comply with the recommendations of the German Government Commission regarding the individual disclosure of remuneration of the Board of Directors, nor, therefore, with the disclosure of the remuneration of the Board of Directors in the Compensation Report. The consolidated financial statements, the annual financial statements of P&I Personal & Informatik AG and the combined management report for P&I Personal & Informatik AG and the Group have been audited by Deloitte & Touche GmbH Wirtschaftspruefungsgesellschaft, appointed by the Annual General Meeting as auditors on September 2, 2008, and granted an unqualified audit certificate. The consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS) additional commercial legislation to be applied pursuant to § 315a Para. 1 of the German Commercial Code (HGB). These consolidated financial statements prepared in accordance with IFRS exempt the Company from the obligation to prepare annual financial statements in accordance with the provisions of the German Commercial Code. Regarding the early detection of risk, the auditors concluded that the Board of Directors had taken the measures required by § 91 Para. 2 of the German Companies Act and that the Company's system for early detection of risk is suited to the early detection of any developments which could endanger the continued existence of the Company. All financial statements, the combined management report and the auditor's reports were presented in due time to all members of the Supervisory Board. The auditor participated in the final explanations and negotiations concerning the financial statements on May 28, 2009 and reported the significant findings of his audit. The Supervisory Board agrees with the audit findings. The consolidated financial statements and the annual financial statements of P&I Personal & Informatik AG, as well as the combined management report for P&I Personal & Informatik AG and the Group and the proposal for the appropriation of the balance sheet profit, were also independently examined by the Supervisory Board. No objections were raised. Pursuant to § 171 of the German Companies Act, the Supervisory Board has approved the annual financial statements and the consolidated financial statements for P&I Personal & Informatik AG prepared by the Board of Directors. The annual financial statements are thereby adopted. We

approve the proposal for the appropriation of the balance sheet profit for the year. The Supervisory Board agrees with the management report and, in particular, with the appraisal of the Group’s future development. At its meeting convened on May 28, 2009, the Supervisory Board also concerned itself with the obligatory disclosures pursuant to §§ 289 Para. 4 and 315 Para. 4 HGB, as well as with the related report. The explanatory notes in the combined management report were referred to. We have examined these disclosures and explanatory notes, which we find to be complete, and adopted them. Mr Michael Abels, Cologne, resigned his office at the commencement of fiscal 2008/2009 with effect from April 3, 2008. The appointment of Mr Helmut Hilgers, Koenigstein to the new Supervisory Board, as proposed by the Board of Directors, was implemented by the decision of the Wiesbaden local court of April 7, 2008. With effect from the close of the Annual General Meeting on September 2, 2008, Mr Hilgers stepped down as a member of the Supervisory Board. As proposed by the Supervisory Board, Mr Robert Vinall, Kilchberg (Switzerland), was appointed to the new Supervisory Board at the AGM. The sitting members of the Supervisory Board were appointed to serve until the close of the AGM which shall resolve on the discharge of the Board for fiscal 2010/2011. The Supervisory Board thanks the resigning officers sincerely for their commitment and trustworthy collaboration. The Supervisory Board would also like to sincerely thank the members of the Board of Directors and all employees for their commitment and successful efforts in the 2008/2009 fiscal year. Wiesbaden, May 29, 2009 The Supervisory Board Klaus C. Ploenzke Chairman

Auditors' certificate "We have examined the annual financial statements- comprising the balance sheet, the income statement, as well as the notes to the accounts - including an assessment of the accounting and of the management report, combined with the group management report, of P&I Personal and Informatik Aktiengesellschaft, Wiesbaden, for the fiscal year from April 1, 2008 to March 31, 2009. The accounting and preparation of these annual financial statements and management report combined with the group management report in compliance with German commercial legislation are the responsibility of the company’s Board of Directors. Our task is to submit an assessment, based on the audit we perform, of the annual financial statements, including an assessment of the accounting and of the management report. We have conducted our audit pursuant to § 317 of the German Commercial Code (HGB) taking into account the generally accepted German auditing principles laid down by the Institut der Wirtschaftspruefer (Institute of Auditors). According to these, an audit is to be planned and performed in such a manner that it can detect with adequate certainty any inaccuracies and violations that have a material impact on the view presented of the assets, financial situation, and profitability, as conveyed by the annual financial statements prepared in accordance with the generally accepted accounting principles, and by the management report. Knowledge regarding the company’s business activities, its commercial and legal environment, and expectations regarding possible errors are considered when establishing audit procedures. The effectiveness of the company’s accounts-related internal control mechanisms and supporting evidence for valuations and information reported in the accounting, annual financial statements and management report are assessed during the audit chiefly on a random-sample basis. The audit includes an evaluation of accounting principles applied and the significant estimates made by the Board of Directors as well as an appraisal of the general presentation of the financial statements and the management report. We believe that our audit provides a sufficiently reliable basis for our assessment. Our audit has not led to any objections being raised.

According to our assessment, based on the knowledge we gained through the audit we performed, the annual financial statements of the P&I Personal & Informatik Aktiengesellschaft, Wiesbaden, comply with the statutory provisions and present, in accordance with generally accepted accounting principles, an accurate account of the assets, financial situation and profitability of the Company. The Management Report combined with the Group Management Report is consistent with the annual financial statements, presents a true and accurate picture of the situation of the Company and gives a true representation of the risks and opportunities involved in future development.“ Frankfurt am Main, May 19, 2009 Deloitte & Touche GmbH Wirtschaftspruefungsgesellschaft (Auditors)

(Dr Buhleier) (per procura1 Botsch) Auditor Auditor

1 "Prokurist", holder of a special statutory authority Transl.

annual report ag 2008/2009 p&i personal & … · summary of the management report 2008/2009...

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