1 ANNUAL REPORT
2 YOC Group Overview (in keur) Change Change in % Revenue and earnings Total revenue 3 3, ,453 2,879 9% Germany 17,882 21,544-3,662-17% Other countries 15,450 8,909 6,541 73% Mobile Technology segment 13,019 18,699-5,680-30% Media segment 20, , ,558 73% Total 35,044 31,883 3,161 10% EBITDA -3,004 2, 819-5,823 < -100% EBITDA margin (in%) -9% 9% k.a. k.a. EBITA*1-4,960 2,062-5,762 < -100% Earnings after tax -7, ,552 < -100% Earnings per share (diluted in EUR) < -100% Earnings per share (basic in EUR) < -100% Financial position and liquidity Total assets 30,603 33,288-2,685-8% Equity ration (in %) 36% 52% k.a. k.a. Cash and cash equivalents 1, , ,604-70% Operating cash flow 676 1, % Employees Average number of employees*² % Number of employees at year end % Total output per employee (in EUR thousand) % *1 EBIT before amortisations due to purchase price allcations (EBIT adjusted for amortisations due to company acquisitions) *² On the basis of permanent employees Where rounded amounts are used, differences may occur due to commercial rounding.
3 INDEX of CONtENts
4 1 6 Letter to Shareholders 8 The Management Board 10 Report of the Supervisory Board 12 Corporate Governance 18 The Share to our shareholders The YOC Group 222 Company Structure 23 Operations 2 6 International Position 27 Strategy group management report 330 Market Environment 32 Scope of Service 34 Business Development 38 Development of Profit 40 Development of Net Assets and Financial Position 43 Forecast Report 47 Inspection and Risk Management Report on the Accounting Process 4 8 Information on Shares and Management Board Explanatory Report 50 Declaration on Corporate Governance 53 Remuneration Report 55 Important Events after the Balance Sheet Date 44 Opportunities and Risk Report COnsolidated financial statements and information concerning the Management Board and Supervisory Board 458 Consolidated Statement of Comprehensive Income 59 Consolidated Statement of Financial Position 60 Consolidated Cash flow Statement 61 Consolidated Statement of Changes in Equity 90 Statement of Responsibility made by the Management Board 91 Audit Opinion 92 Management Board 93 Supervisory Board 94 Financial Calendar 62 Notes to the Financial Statements
5 Our technology platform enables us to deliver billions of mobile page impressions every month
6 1 To our shareholders 6 Letter to Shareholders 8 The Management Board 10 Report of the Supervisory Board 12 Corporate Governance 18 The Share 1 To Our Shareholders 2 The YOC Group 3 Group Management Report 4 Consolidated Financial Statements
7 YOC Group Annual Report 2011 Letter to Shareholders Dear Shareholders, The financial year 2011 was a challenging year for our Group in which we did not achieve the goals that were set. For this reason, we worked intensively on the further development of the YOC Group strategy and the refocusing of its market appearance in the second half of the financial year to the discontinuing or active termination of activities that were no longer within the core business of the segment. In addition to this, a number of operative challenges needed to be overcome, particularly in the second and third quarter of The market launch of new products led to slower project handling and delayed sales and revenue recognition. This resulted in a strongly increased order backlog amounting to EUR 2.4 million at the end of the year. The key element of this process is the strict strategic concentration of our operations on the Mobile Technology and the Media segments. This includes pooling our competences in the Mobile Technology segment under the Sevenval brand whilst marketing the Media business under the YOC Media brand, both of which has also been reflected in the external image of the Group since the fourth quarter of Our aim is to generate growth in the Media segment and increase profitability in the Mobile Technology segment. To reflect this strategic focus, YOC Group has been reporting on the two segments Mobile Technology and Media since 1 January. However, a temporary decline in sales due to the ensuing structural reorganisation and discontinuation of side activities also has to be knowingly accepted. YOC Group generated sales totalling EUR 33.3 million in the financial year 2011 (2010: EUR 30.5 million) and an operating result amounting EUR -3 million (2010: EUR 2.8 million). This includes costs for the strategic reorientation and one-off expenses amounting to EUR 1 million. This strategic focus is particularly clear in the Mobile Technology segment. To reflect this process, we have started focussing our business operations on the implementation of larger projects with customers for whom the mobile channel is a strategic growth driver. The sales focus is on the retail, financial institutions, travel & transport and the automotive industry. At the same time, the Group has continued to boost recurring returns from licence, hosting and maintenance income. The focus of this segment is to achieve the profitability we were used to. The Mobile Technology segment reported sales revenues of EUR 13 million in the financial year This corresponds to a percentage of 39% in the total revenues of YOC Group. The percentage of the total group revenue amounted to EUR 18.7 million and 61% in the same period of the previous year. The implementation of the strategic focussing also led The business segment Media saw encouraging growth amounting 73% in the period under report. Due to the increase in sales revenue from EUR 11.8 million to EUR 20.3 million the percentage of total sales was already 61% in the period under report, while it amounted to 39% in the same period of the previous year. Due to the takeover of the French subsidiary MobilADdict SAS in the first quarter 2011 and the successful Media units in Germany, Spain, Austria and the United Kingdom we could strengthen our competitive position in Europe significantly. In the Media segment, the expansion into more markets and the resulting growth potential are of high strategic importance. We established a central organisational structure based on our experience to quickly and efficiently integrate newly created organisations in the respective countries and support them and the existing organisations in the development of their business activities. YOC Group thus lays the groundwork for continued participation in the positive development of the global mobile advertising market in the future. Outlook for the financial year 2012 The strict implementation of the defined strategy focussing on the Mobile Technology and Media segments enabled us to create the basis for the sustainable further development. Therefore, we expect the financial year 2012 to see an increase in sales to about EUR 40 million and a positive operating result. These expectations are supported by general market developments relating to the rapidly increasing use of the mobile internet and the resulting need for companies to go mobile. Due to the ever more challenging demands on mobile infrastructure solutions more and more customers and partners trust on our expertise in the field of Mobile Technology. Growth in the Media segment is increasingly driven by a budget shift from traditional media channels to mobile advertising.
8 7 We are convinced that with the strategic refocusing of YOC Group we are on the right track. The structural and operative measures that we have initiated have already begun to produce positive results. I would like to seize this opportunity to thank our Supervisory Board for its great commitment and support during the past financial year. On behalf of the Management Board I would also like to thank all shareholders as well as our customers and business partners for their cooperation in the financial year I would be delighted to see this cooperation continue in the future. Kind regards, Dirk Kraus CEO of YOC AG 1 To Our Shareholders 2 The YOC Group 3 Group Management Report 4 Consolidated Financial Statements
9 The Management Board YOC Group Annual Report 2011 Joachim von Bonin CFO Finances & Controlling, Human Resources, Central Purchasing Jan Webering Management Board Business Unit Mobile Technology Alex Sutter Management Board Business Unit Mobile Technology
10 9 Dirk Kraus CEO M&A, Corporate Development, Business Unit Media Patrick Feller Management Board Organisation, Strategy, Strategical Human Resources Develoment, Change Management 4 Consolidated Financial Statements
11 YOC Group Annual Report 2011 Report from the Supervisory Board The Supervisory Board carried out the tasks and duties incumbent upon it under law, the Articles of Association and the Rules of Procedure comprehensively and diligently during the financial year It intensively dealt with the situation of the company, regularly advised the Management Board on the management of the company and continuously monitored its activities. The Supervisory Board was directly involved in all decisions of fundamental importance to the company and discussed them in detail. In fulfilling its obligations, the Supervisory Board dealt with revenues and results of operations of the company, the business performance as well as the intended corporate policy and planning by means of regular written and verbal reports of the Management Board. After scrutinising the documents submitted and discussing approval in detail, the Supervisory Board approved Management Board decisions or measures subject to Supervisory Board approval pursuant to the law or the Management Board Rules of Procedure. Alongside a wide range of technical issues and measures subject to approval as well as the business development, meetings also focussed on basic questions concerning corporate planning and an adjustment of the corporate strategy to the changing framework conditions, the continued expansion of the international business, the safeguarding of the company's competitiveness as well as personnel decisions in the financial year Short-term, medium-term and long-term issues were treated in the same way. Material issues of the Supervisory Board activities The Supervisory Board held a total of five meetings demanding physical presence as well as two telephone conferences in the period under report; moreover, further written resolutions of the Supervisory Board were passed in writing. In doing so, the Supervisory Board engaged in a detailed consultation with the Management Board. Furthermore, the Supervisory Board as a whole was in close communication with the Management Board and was kept informed by the latter about the current business development and all important business transactions. The Supervisory Board also took advantage of the option to discuss issues without the presence of the Management Board. All Supervisory Board members participated in the meetings and other resolutions in 2011; no Supervisory Board committees were established. There were no indications for potential conflicts of interest among the Supervisory Board members in the financial year The Supervisory Board paid special attention to the acquisition of MobilADdict SAS in March 2011 as well as the strategic focusing of the company on the business units Mobile Technology and Media. The supervisory body also advised the Management Board on these matters between Supervisory Board meetings. At its meeting on 5 April 2011, the Management Board presented the results for the financial year 2010 and current developments in the first quarter of 2011 to the Supervisory Board and discussed them with the Supervisory Board. The Supervisory Board discussed the issues of the ordinary General Meeting 2011 on 20 April The agenda was discussed with the Management Board and approved in the following. At its meeting on 31 May 2011, the Supervisory Board primarily dealt with the business performance and the results of the first quarter. Moreover, it decided on the appointment of Mr. Joachim von Bonin as Chief Financial Officer of the company. At its meeting on 23 August 2011, the Supervisory Board also discussed the results of the first half-year presented by the Management Board and was informed about the current development of the company. On 9 November 2011, the Management Board explained the performance in the third quarter to the Supervisory Board and presented the medium-term strategy focussing on the two business segments Mobile Technology and Media as well as the ensuing discontinuation of side activities and the measure implementation status so far. At its meeting of 6 December 2011, the Supervisory Board again dealt with the results of the strategy process as well as its implementation and the group economic planning of YOC Group for the year 2012, which was subsequently approved by the Supervisory Board. Moreover, the annual Declaration of Conformity in accordance with Sect. 161 Stock Corporation Act (AktG) presented and approved by common agreement by the Management Board of YOC AG was unanimously adopted following detailed examination and discussion. Audit of the annual and consolidated financial statements At its meeting of 5 April 2011, the Supervisory Board discussed the annual financial statements and the consolidated financial statements of YOC AG as of 31 December 2010 as well as the
12 11 summarised Management Report for YOC AG and the Group in depth. The annual and consolidated financial statements of YOC AG as of 31 December 2010 as well as the summarised Management Report were audited and given an unqualified audit opinion by Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart, branch office Berlin, the auditor appointed by the General Meeting on 16 June 2010 and commissioned by the Supervisory Board. The Supervisory Board received the respective documents and discussed them in depth in the presence of the auditor, who reported about his audit findings. The Supervisory Board acknowledged the report of the auditor and approved the findings of the audit. As its own examination did not lead to any objections, the Supervisory Board approved the financial statements prepared by the Management Board. Thus, the annual financial statements of YOC AG were adopted. Corporate governance The Supervisory Board also studied the recommendations of the German Corporate Governance Code in the financial year In this context, the Supervisory Board also reviewed whether the Management Board remuneration was adequate and customary. The horizontal and vertical customariness were reviewed, which means that the remuneration was compared with other companies from similar sectors and sizes on the one hand and in relation to the remuneration of lower-ranking hierarchy levels within the company on the other hand. Furthermore, the Supervisory Board discussed the efficiency of its activities as well as the contents of the Declaration on Corporate Governance, including the Declaration of Conformity with regard to the German Corporate Governance Code in accordance with Sect. 161 Stock Corporation Act (AktG). The Management Board and the Supervisory Board delivered their joint Declaration of Conformity in December The company largely complies with the recommendations of the German Corporate Governance Code. As part of the Declaration on Corporate Governance, the Declaration of Conformity together with explanations of deviations from the recommendations can be found on pages of the Annual Report and was made permanently accessible on the company s website. Further information about corporate governance at YOC AG can be obtained from the Corporate Governance Report published on page of the Annual Report. Personnel changes in the Management Board and Supervisory Board Mr. Michael Schwetje left the Supervisory Board at the end of the General Meeting on 6 June By resolution of the Local Court Charlottenburg of 14 June 2011, Patrick Feller was initially appointed to replace him until the end of the next ordinary General Meeting. The Supervisory Board approved an organisational and personnel modification by means of expanding the Management Board and subsequently appointed two new Management Board members. Within this scope, the areas of responsibility of the Management Board members were reallocated so that the Management Board can run the operational business even more efficiently and safeguard the implementation of the strategic focussing on the core segments. The Supervisory Board appointed Mr. Joachim von Bonin to the Management Board of the company as of 1 June Mr. von Bonin accepted the appointment as Chief Financial Officer. Mr. Patrick Feller was appointed from the Supervisory Board to the Management Board of the company as of 9 September By resolution of the Local Court Charlottenburg of 6 September 2011, Mr. Oliver Borrmann was appointed to replace him in the Supervisory Board until the end of the next General Meeting. The Supervisory Board appointed Mr. Borrmann as independent financial expert within the meaning of Sect. 100 Para. 5 Stock Corporation Act (AktG) having expertise in the field of accounting or auditing. Thanks to the members of the Management Board and all YOC AG staff The Supervisory Board would like to thank the Management Board and all staff of YOC AG and all other companies in the group for their great commitment and the work accomplished over the past financial year. Berlin, April 2012 The Supervisory Board Gerd Schmitz-Morkramer Chairman 1 To Our Shareholders 2 The YOC Group 3 Group Management Report 4 Consolidated Financial Statements
13 YOC Group Annual Report 2011 Corporate Governance YOC AG attaches great importance to corporate governance: It stands for the responsible and long-term value-driven management and control of our company. Efficient cooperation between the Management Board and the Supervisory Board, respect for the interests of the shareholders as well as open and transparent corporate communications are key aspects of good and responsible company management and corporate governance. The Management Board and Supervisory Board report as follows on corporate governance at YOC AG: YOC AG complies with the recommendations of the "Government Commission of the German Corporate Governance Code" (hereinafter also referred to as "Code" or "DCGK") in the version of 26 May 2010 with the exception of Sect , 3.8 Para. 3, 4.1.5, Para. 2 and Para. 5, Para. 1 and Para. 2 and Para. 3, Para. 2 Sent. 3, 5.3.1, and 5.3.3, Para. 2 Sent. 1, Sent. 3, Para. 1 Sent. 3, Para. 2 and Sent. 4. The Management Board and the Supervisory Board of YOC AG have adopted the declaration on the Corporate Governance Code (Declaration of Conformity 2011) attached to the end of this report. It has been published on the website of YOC AG at (Investor Relations section). 1. Shareholders and General Meeting YOC AG reports to its shareholders four times in the financial year on business developments and the net assets, financial position and results of operations of the consolidated companies. Matters upon which the General Meeting decides include the appropriation of profit, discharge of the Management Board and the Supervisory Board as well as the election of the auditor. Amendments to the Articles of Association and corporate actions are resolved upon by the General Meeting alone and implemented by the Management Board. Shareholders may submit counter-motions to resolutions proposed by the Management Board or the Supervisory Board and challenge resolutions of the General Meeting. The Management Board makes use of electronic communication channels, in particular the internet, to facilitate shareholder access to information on the General Meeting and allow shareholders to vote in absentia, for example by appointing a proxy. 2. Management and control structure As required by the German stock corporation law, YOC AG has a two-tier management and control structure comprising a Management Board and a Supervisory Board. There is a strict personnel separation of management (Management Board) and corporate control (Supervisory Board) within this two-tier management system. It is not legally possible to simultaneously sit on both the Management Board and the Supervisory Board. Each of these two bodies has its own duties and responsibilities which are clearly defined by law. The Management Board is responsible for the management of the company while the Supervisory Board advises and monitors the Management Board. 2.1 Management Board The Management Board consisted of five members as of 31 December 2011: More information on the members of the Management Board and their areas of responsibility can be found on the pages 8 and 9 of this Annual Report. Furthermore, information about functions and CVs is available online at The Management Board has sole responsibility for the management of the company and exercises control over the consolidated companies. It has a duty to act in the interests of the company and is committed to increasing the sustainable company value. It is responsible for defining the company's strategic direction in consultation with the Supervisory Board. The Management Board works in close cooperation with the Supervisory Board, informing the latter regularly, promptly and in detail of all issues relevant for the entire company concerning strategy, strategy implementation, planning, business development, financial position and results of operations, compliance and corporate risks. The Management Board is responsible for drawing up the quarterly reports, half-year and annual financial statements of YOC AG as well as the consolidated financial statement. It ensures compliance with statutory provisions and appropriate risk management within the company. 2.2 Supervisory Board In accordance with Sections 101 et seq. AktG [German Stock Corporation Act] in conjunction with Section 10 of the Articles of Association, the Supervisory Board of YOC AG comprises three members elected by the General Meeting for one term of office ending with the conclusion of the General Meeting that resolves on the discharge for the fourth financial year following their election, not including the financial year in which the term of office commences. More information on the mem-
14 13 bers of the Supervisory Board can be found on page 93 of this Annual Report. Furthermore, their CVs are available online at The Supervisory Board monitors and advises the Management Board with regard to the management of the business. The Supervisory Board discusses the business development and planning as well as the strategy and its implementation with the Management Board at regular intervals. The Supervisory Board approves the annual financial statement and takes note of and approves the consolidated financial statement following discussion with the auditor and own examination. Moreover, it appoints the members of the Management Board. Fundamental decisions affecting YOC AG require Supervisory Board approval. These include decisions or measures that would significantly change the net assets, financial position or results of operations of the company. The information and reporting obligations of the Management Board were defined by the Supervisory Board. The members of the Supervisory Board make their decisions independently and are not bound by the demands or instructions of third parties. Furthermore, consultancy, service and other agreements between YOC AG and its subsidiaries on the one hand and members of the Supervisory Board on the other hand must be approved by the Supervisory Board. 3. Remuneration Report The Remuneration Report is based on the recommendations in the German Corporate Governance Code. It sets out principles which are applied in setting the remuneration of the Management Board of YOC AG and explains the amount and structure of these payments. It also describes the principles applied to and the amount of Supervisory Board remuneration. The Remuneration Report also contains details which German commercial law requires to be part of the notes to the consolidated financial statement pursuant to Sect. 314 German Commercial Code (HGB) as well as the group management report pursuant to Sect. 315 German Commercial Code (HGB). 3.1 Management Board remuneration The Supervisory Board is responsible for setting the Management Board remuneration. Its decision takes account of the size and activities of the company, the company's economic and financial position, the tasks of the respective Management Board member as well as the amount and structure of management board remuneration at other companies in the sector. Management Board remuneration is performance-related. Remuneration is determined in such a way that it remains at a level competitive within the market for highly qualified management personnel and offers a performance incentive. In the financial year 2011, it consisted of a fixed basic component, a variable component and the participation in the YOC Management Incentive Programme. The basic remuneration is a fixed cash remuneration referring to the entire year based on the area of responsibility of the respective Management Board member and paid out in twelve monthly instalments. The variable component consists of a cash remuneration as profit-sharing based on the results of operations according to IFRS (EBITDA) of YOC AG and is subject to an upper limit. With the participation in the YOC Management Incentive Programme initiated in 2009, the members of the Management Board - and other employees of the company - receive subscription rights to shares in YOC AG. The subscription rights granted in this respect are subject to a holding period of several years. The exercise of subscription rights requires an own investment of the subscription right owners at an exercise price derived from the stock market price of the YOC share at the time of issuance of the respective subscription rights (market value) (also see Section 6 below). The participation of the Management Board in the YOC Management Incentive Programme is intended to reward the contribution of the Management Board to increase the shareholder value and to promote the long-term success of the company. This element of remuneration and the long-term incentive it offers create a useful link between the interests of the management and those of the shareholders. Management Board remuneration in 2011 Name Fixed (in keur) Variable (in keur) Subscription rights (in numbers) Dirk Kraus Alex Sutter Jan Webering Joachim von Bonin (ab 01. Juni 2011) Patrick Feller (ab 09. September 2011) , Total ,625 1 To Our Shareholders 2 The YOC Group 3 Group Management Report 4 Consolidated Financial Statements
15 YOC Group Annual Report 2011 Remuneration received by the Management Board in 2011 totalled keur 620. The Management Board held a total of 16,625 subscription rights in the financial year The fair value of the subscription rights amounted to around keur 170 as of the balance sheet date. As a contractual fringe benefit, Mr. Jan Webering has the right to a company car. 3.2 Supervisory Board remuneration Supervisory Board remuneration was set by the General Meeting of YOC AG on the basis of a proposal by the Management Board and Supervisory Board. Supervisory Board remuneration is fixed. The fixed remuneration amounts to keur 7.5 for one financial year. The chairman of the Supervisory Board receives 2.5 times and the deputy chair 1.5 times this fixed amount. Supervisory Board remuneration in 2011 Name Fixed (in keur) Gerd Schmitz Morkramer Peter Zühlsdorff Michael Schwetje 3.23 Patrick Feller Oliver Borrmann Total There was no remuneration of personally rendered services outside the board activities, particularly with regard to any consulting and referral services. The remuneration is paid out following the ordinary General Meeting at which the approved consolidated financial statement for the last financial year is presented. Supervisory Board remuneration for the financial year 2011 totalled keur Accounting and auditing The consolidated financial statements and interim reports are drawn up in accordance with the IFRS. The consolidated financial statements are drawn up by the Management Board and reviewed by the auditor and the Supervisory Board. The consolidated financial statements for the financial year 2011 were not completed by the deadline for public disclosure of 90 days after the end of the financial year as defined in Sect Sent. 4 of the German Corporate Governance Code. The company shall make every effort to comply with the recommendation pursuant to Sect Sent. 4 of the German Corporate Governance Code, but cannot guarantee compliance for It was agreed with the auditor, Ernst & Young GmbH, Wirtschaftsprüfungsgesellschaft, Stuttgart, Berlin branch, that the chairman of the Supervisory Board would immediately be informed of any reasons precluding the employment of the auditor and any conflicts of interest arising during the audit and that the auditor would immediately report on all issues and events significant for the tasks of the Supervisory Board revealed during the conduct of the audit. 5. Transparency All participants of the capital market are provided with information by YOC AG on a uniform, comprehensive, prompt and simultaneous basis. Reporting on the business situation and results of YOC AG and YOC Group takes place through the annual report, the half-year report and the interim reports. Furthermore, information is passed on through ad-hoc communications, where legally necessary, and through the company's websites. Changes in the make-up of the shareholder structure which have to be reported in accordance with Sect. 26 Securities Trading Act (WpHG) as well as the purchase and sale of shares of individuals who hold management positions within YOC AG (Directors Dealings according to Sect. 15a Securities Trading Act (WpHG)) are also published by the Management Board. The tables below list all holdings of the Management Board and the Supervisory Board in YOC AG which directly or indirectly exceed 1% of shares issued by the company: Management Board holdings as of 31 December 2011 Name Number of shares Dirk Kraus 447,450 Alex Sutter 54,925 Jan Webering 14,250 Supervisory Board holdings as of 31 December 2011 Name Number of shares Peter Zühlsdorff 248,560 Michael Schwetje 218, Further information about the YOC AG share option programme 2009 saw the launch of the YOC Management Incentive
16 15 Programme with a total of 175,000 subscription rights. One subscription right entitles the holder to acquire one share in YOC AG. The subscription rights for the acquisition of YOC shares can be granted to members of the Management Board (up to 115,500 subscription rights) and to employees (up to 59,500 subscription rights). The YOC Management Incentive Programme runs until 31 December As of 31 December 2011, subscription rights for the acquisition of 114,590 shares had been granted to members of the Management Board and subscription rights for the acquisition of 51,000 shares to employees. The subscription rights may only be acquired during precisely specified acquisition periods. The first acquisition period in the year is based on the timing of the company's annual press conference on financial results and lasts ten stock trading days. The second acquisition period in the year is based on the publication of the first half-year report for the financial year and also lasts ten stock trading days. The final acquisition period for subscription rights will be in the year The subscription rights may be exercised by the holders no earlier than three years from the respective issue date. The exercise price of the subscription rights is based on the average Xetra closing price of the YOC share for the last eight stock trading days before the beginning of the acquisition period. However, the exercise price must be at least equal to the closing price of the YOC share on the day on which the subscription rights were issued. The prerequisites for the exercise of subscription rights include the holder's ongoing employment with the company at the time of exercise and the fulfilment of certain performance targets. The performance targets include an increase in the YOC share price. The subscription rights may only be exercised during the precisely specified exercise periods. Exercise periods are also based on the timing of the company press conference on the annual result and the publication of the report on the first half of the year. Each exercise period comprises 17 stock trading days. All holders of subscription rights must comply with the provisions of insider trading laws. 7. Declaration of the Management Board and the Supervisory Board of YOC AG in accordance with Sect. 161 Stock Corporation Act (AktG) on the German Corporate Governance Code in the version of 26 May 2010 (Declaration of Conformity 2011) Pursuant to Sect. 161 Stock Corporation Act (AktG), the Management Board and the Supervisory Board of a listed stock company shall annually declare that the recommendations made by the "Government Commission of the German Corporate Governance Code" in the official part of the electronic Federal Gazette published by the Federal Ministry of Justice were or are complied with or which recommendations were or are not applied including the respective reasons. The declaration is to be made publicly available on the website of the company. The German Corporate Governance Code (DCGK) contains regulations with different binding effects. Aside representations of the applicable corporation law, it contains recommendations from which companies may deviate; however, in this case they are obliged to disclose their deviations annually. In accordance with Sect. 161 Stock Corporation Act (AktG), deviations from the recommendations of the DCGK shall also be justified. Furthermore, the DCGK contains suggestions from which companies may deviate without disclosure. The following declaration concerns the period of time since the last Declaration of Conformity of December 2010 and refers to the requirements of the DCGK in its current version of 26 May The Management Board and the Supervisory Board of YOC AG declare that the recommendations made by the "Government Commission of the German Corporate Governance Code" are and were principally complied with in the past. The Management Board and the Supervisory Board of YOC AG also intend to remain compliant in the future. Only the following recommendations of the German Corporate Governance Code were and are not applied: Sect of the Code: The company regards the announcement of the invitation to attend the General Meeting in the electronic Federal Gazette as sufficient. Sect. 3.8 Para. 3 of the Code: The company believes that the motivation and responsibility with which the members of the Management Board and Supervisory Board carry out their duties will not be improved by an excess. The D&O liability insurance serves to safeguard against the company's material own risks and at most serves as a second-line defence of the assets of the members of those bodies. Therefore, the D&O insurance for the Supervisory Board was concluded without excess. Sect of the Code: When filling their managerial posi- 1 To Our Shareholders 2 The YOC Group 3 Group Management Report 4 Consolidated Financial Statements
17 YOC Group Annual Report 2011 tions within the company, the Management Board is to consider company-specific realities as well as an appropriate level of diversity. In our opinion, however, the guidelines of the DCGK inappropriately restrict the Management Board in its selection of suitable candidates for managerial positions which need to be filled. Sect Para. 2 Sent. 2 of the Code: The remuneration structure of the Management Board members focuses on sustainable corporate development. In case of a temporary appointment of a Management Board member for a period of less than one year, however, the granting of variable remuneration components was renounced as these did not appear reasonable in the same way as a multi-annual assessment basis in this individual case. Sect Para. 5 of the Code: In deviation from the recommendation of the Corporate Governance Code, payments in the event of a change of control are not generally limited to 150% of the severance cap. Such a limit could affect the ability to attract highly qualified employees. According to the Management Board remuneration structure, a change of control case could also have the effect of increasing the YOC share price when Management Board members participate in the share option programme of the company. In addition to the beneficiaries of the share option programme, however, the shareholders also profit from the rise in the share price, so that the interests of the Management Board and the shareholders coincide in this respect. Sect Para. 1 as well as Sect Para. 2 and Para. 3 of the Code: A guideline for the structure of the Management Board as stipulated in Sect Para 1 of the Code inappropriately restricts the Supervisory Board in its election of suitable members of the Management Board. The same applies to an objective for the composition structure of the Supervisory Board as stated in Sect Para. 2 and 3 of the Code. We are fundamentally of the opinion that this constitutes a too extensive limitation in the selection of suitable candidates for the Supervisory Board on an individual case basis. Moreover, such an objective also compromises the right of our shareholders to elect the members of the Supervisory Board. Sect Para. 2 Sent. 3 of the Code: The Supervisory Board has not set an age limit for members of the Management Board. The members of the Supervisory Board believe that suitability for a company management position depends first and foremost on individual ability and performance. Sect , and of the Code: As the Supervisory Board of YOC AG has only three members, it would not be practical to set up committees, and especially not an audit committee or a nomination committee. The purpose of the audit committee as proposed by the Code is to increase the efficiency of auditing. This aim would not be achieved at YOC AG as nearly all members of the plenum would have to sit on the audit committee. Similarly, nearly all plenum members would sit on the nomination committee, which would not bring any improvement in the preparation of Supervisory Board recommendations regarding candidates proposed by the shareholders. Sect Para. 2 Sent. 1 of the Code: No age limit has been set for Supervisory Board members. A candidate's ability to monitor and act as a fit contact for the Management Board depends first and foremost on individual capabilities. Sect Sent. 3 of the Code: The recommendation that proposed candidates for the chairmanship of the Supervisory Board be announced to the shareholders has not been adopted. Pursuant to Sect. 11 Para. 1 of the company's Articles of Association, the Supervisory Board elects its chair from amongst its members. According to the Supervisory Board's Rules of Procedure, the selection of a chairperson takes place during the first meeting after the election of the Supervisory Board without having to specially call for a meeting. With that said, the announcement of proposed candidates is not practical. Sect Para. 1 Sent. 3 of the Code: The company meets the recommendations of the Code regarding the remuneration of the chair and deputy chair of the Supervisory Board with the exception of the provisions on committees; chairmanship and membership of committees is not considered separately for lack of formed committees. Sect Para. 2 of the Code: The remuneration of the Supervisory Board consists of a fixed payment. Any variable remuneration to be granted beyond this is unnecessary for a motivation of the Supervisory Board and would not lead to any additional incentive or motivational boost.
18 17 Sect Sent. 4 of the Code: The company will endeavour to comply with the recommendation that the consolidated financial statements are to be made available to the public within 90 days of the end of the financial year and the interim reports within 45 days of the end of the reporting period, but cannot guarantee this due to the large scope of consolidation. Berlin, December 2011 YOC AG The Management Board The Supervisory Board 1 To Our Shareholders 2 The YOC Group 3 Group Management Report 4 Consolidated Financial Statements
19 YOC Group Annual Report 2011 The Share The development of the YOC share in 2011 The YOC share price performed well in the first quarter of At the beginning of the year, the share price was EUR and reached its peak price for the quarter amounting to EUR (9 February 2011) only a few days after in February However, the European debt and banking crisis increasingly intensified in the months to come and the global economy slowed down dramatically. These influences dominated the performance of the stock markets in a clearly negative way. Thus, the euro crisis in connection with the tense financial situation of some European states made the leading German share index DAX drop by 27% from 7,300 to 5,300 points in the worst of times. The share of YOC AG was also caught up in this development alongside other technology stocks and dropped to EUR on 9 August Influenced by the weak sales results, especially in the third and fourth quarter, the share price of YOC AG fell and reached its low amounting to EUR on 12 December At the end of the year, the share was listed at a price of EUR on 31 December For us the development of the YOC Share is disappointing. 1.07% Management DIH Deutsche 12.98% Industrie Holding GmbH 20.19% Management Board 4.67% IP Concept Fund Management S.A. 6.78% dkam GmbH 6.27% Ruffer Investments LLP 27.07% Free Float 11.41% Schwetje Invest GmbH 9.35% Fidelity Investments 0.21% YOC AG (treasury stock) Shareholder structure as of 31 December 2011 Analysts show growing interest in YOC The YOC share has become more attractive - particularly to international investors - with our strategic focus on the business segments Mobile Technology and Media. This enables us to create a starting point for further growth and an increased profitability of the business segments. In the same way, the capital market benefits from this reporting structure and the ensuing optimised as well as more transparent communication. As Deutsche Bank in 2009 and Close Brothers Seydler Bank in 2010, WestLB included the coverage with a recommendation to buy in July 2011 and has since regularly published studies as well as comments on the current development of the company.
20 19 Consistent and transparent investor relations The intensive dialogue with the capital market is traditionally of particular value to YOC AG. It is the claim of the company to inform shareholders and all participants of the capital market about the current status of the corporate development, structural changes and strategic decisions transparently, promptly and in detail. Therefore, YOC AG sees transparent financial market communication as a key factor in sustainably increasing shareholder value. Aside regular quarterly, half-year and annual reporting, we also inform our shareholders in telephone and analyst conferences. YOC AG was presented at the German Equity Forum in Frankfurt on Main on 21 November This event as well as the participation in other investor conferences was also reflected in the constantly increasing interest in the YOC share as well as the market for Mobile Technology and Media in the financial year That is why the company will as 125% 100% 75% 50% YOC share and TecDAX Performance Index developments YOC AG % TecDAX % Information about the share [in EUR] Change Annual closing price % Maximum price % Minimum price % Market capitalisation % Daily trading volume (average) % usual be holding regular telephone conferences and attending conferences and road shows to talk to analysts and investors about the company s development, key indicators and strategic objectives. We are always pleased to provide information to institutional investors, analysts as well as private investors - at our general meeting, in individual discussions, via telephone or . Further information on how to reach us can be obtained from the Investor Relations section at There, you can also find our Financial Calendar containing important Investor Relations dates and publications about the business development for download. TecDAX YOC AG Performance Index EUR* Points EUR* Points Change % % *1 XETRA closing price Information on the listing Stock type Trading place Stock exchange segment Security identification number ISIN Domestic stock Xetra Prime Standard DE To Our Shareholders 2 The YOC Group 3 Group Management Report 4 Consolidated Financial Statements