11 88 0 Solutions AG — Interim / Quarterly Report 2016

May 17, 2016

3-Months Report 2016

Content

Letter from the Management Board	3
Key Financial Figures	4
Management Report	5
Consolidated Income Statement (IFRS)	9
Consolidated Statement of Comprehensive Income (IFRS)	10
Consolidated Statement of Financial Position (IFRS)	11
Consolidated Statement of Cash Flows (IFRS)	12
Consolidated Statement of Shareholders' Equity (IFRS)	13
Notes to the Interim Consolidated Financial Statements	14
Corporate Structure telegate Group	22

Letter from the Management Board

Dear shareholders, customers and business partners,

We made good progress in our operating business in the first quarter of financial year 2016. We adhered to the plan we unveiled in November 2015, launching the first five specialist portals. On 11880.com and klicktel. de, consumers looking for roofers, removal companies, gardeners and landscapers, carpenters and painters are directly forwarded to our new verticals, our specialised portals. Here, they can request quotations from companies in their immediate area, compare prices and look for the right specialist business. As one of the largest suppliers of professionally compiled industry data, we provide not only a huge choice of certified specialist companies but also a detailed guide with many tips for consumers on the search topic in question. This enables businesses to reach their target group with a professional presence on our new specialist portals with no coverage waste due to non-selective marketing.

In summer we will merge the online directories klicktel.de and 11880.com and focus all online and offline activities on 11880.com. This will again raise awareness of 11880 among consumers as the key number for rapid assistance. People using our services to find information will be rewarded with high-quality hits, not large volumes of data like those provided by major search engines. Our add-on services also provide specific assistance in the implementation of projects, enabling people to save time and money.

In the directory assistance business, the addition of outbound services to our portfolio likewise bore fruit. Our experienced telephone experts now provide car glass support for the Euromaster workshop chain. So, not only did we gain a prestigious company as a customer, but we also have a respected reference for the award of further contracts.

Even though our earnings for the first quarter do not yet reflect this sea change, we managed to reduce the cost of revenues by nearly 30 percent compared with the first quarter of 2015. We succeeded in compensating for our field sales activities through far more efficient telesales measures. By launching our new product range, we added new customers once again and lifted revenue per employee at the same time.

We are well on track and are confident that with focused work we can return to creating long-term, promising prospects for our company.

We would like to thank you for your trust!

Christian Maar Michael Geiger

Munich, 11 May 2016

CEO of telegate AG Member of the Management Board

Key Financial Figures

in m Euro	3M 2016	3M 2015	Variance absolute	Variance in Percent
Revenues & profit Group
Revenues	11.8	14.0	-2.2	-16%
EBITDA1
	-0.2	0.6	-0.8	-
Net loss	-2.3	-1.8	-0.5	-
Details Segment
Revenues Digital	4.1	5.6	-1.5	-28%
EBITDA1 Digital	-0.2	0.2	-0.4	-
Revenues Directory Assistance	7.6	8.4	-0.8	-10%
EBITDA1 Directory Assistance	0.0	0.5	-0.5	-
Statement of financial position2
Total assets	45.8	49.6	-3.8	-8%
Cash and cash equivalents3	16.7	18.5	-1.8	-10%
Equity	35.9	38.2	-2.3	-6%
Equity ratio (in percent)	78%	77%	-	-
Cash Flow
Cash flow from operating activities	-0.8	-1.5	0.7	-
Cash flow from investment activities	2.1	1.0	1.1	-
Cash flow from financing activities	0.0	0.0	0.0	-
Net Cash Flow4	-1.8	-2.55	0.7	-
Key figuaree for the telegate share
Earnings per share (in EUR)	-0.1	-0.1	0.0	-
Share price (in EUR)6	1.1	2.7	-1.5	-58%
Market capitalisation	21.4	50.8	-29.4	-58%
Employeest
Number of employees7 , group	770	892	-122	-14%

¹ Earnings before interest, tax and depreciation

² comparative values as of December 31

³ Portfolio of cash and cash equivalents as well as financial assets available for sale

⁴ Cash flow from operations + cash flow from investing activities - interest expense +/- adjusting for sale of money market and bond funds

⁵ For a better comparability, the 2015 value was adjusted

⁶ XETRA-closing prices as of last trading day

⁷ Headcounts as of March 31

Management Report

In summary: 3-month report 2016

telegate started financial year 2016 on a strong footing, making good progress in its operating business in particular. The comprehensive project plan entitled "Genesis" that was unveiled in the previous year has already been largely implemented and is starting to show results. For example, the Group has launched the first five specialist portals. On the 11880.com and klicktel.de sites, through the forwarding to our specialised portals consumers can now request quotations from suitable companies, compare prices and look for the appropriate specialist business in the surrounding area.

The merging of the online directories klicktel.de and 11880.com is planned for the summer of the current financial year, with the result that all online and offline activities will be focused on 11880.com.

Positive results are also being achieved in the field of directory assistance. By extending the service we offer, we gained a high-profile company as a customer.

Earnings (EBITDA) in the first quarter of 2016 are within the range of the guidance published. The development of the revenues is proceeding as planned. As expected, the revenues are decreased mainly due to the restructuring of sales. Nevertheless, by implementing considerably more efficient telesales measures telegate succeeded in generating higher revenue per employee. The share of the digital business continued to grow, accounting for 65 percent of consolidated revenues in the first quarter of 2016. Revenues from traditional voice-based directory assistance declined by around 26 percent on account of the continuing downturn in the market. The decrease is not so high as expected in this segment. The costs of sales and selling costs showed an encouraging trend, with extensive measures generating a reduction in expenses compared with the prior-year period.

Financial situation

Results of operations

Consolidated revenues at the 31 March 2016 reporting date were € 11.8 million (previous year: € 14.0 million).

The consolidated cost of revenues was € 6.5 million in the first quarter of 2016, a decrease of 8 percent year-on-year (previous year: € 7.1 million). The cost reduction is primarily due to lower personnel expenses, depreciation/amortisation and capitalisation.

Selling and distribution costs were reduced from € 6.4 million to € 4.7 million, a € 1.7 million or 27 percent improvement, which was primarily the result of the realignment in sales with a focus on telesales.

The general administrative expenses incurred in the first three months increased year-on-year from € 2.7 million to € 3.0 million.

Consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by € 0.8 million to € -0.2 million from € 0.6 million in the prior-year period. Earnings after taxes in the first quarter were € -2.3 million (previous year: € -1.8 million).

Net assets and financial position

Capital expenditures

Capital expenditures in the first quarter of 2016 totalled € 1.0 million (previous year: € 1.1 million). In the Directory Assistance segment, these capital expenditures comprised purchases for the modernisation of call centre workstations and investments in IT infrastructure. Capital expenditures in the Digital segment were undertaken primarily in product improvements and innovations. The capital expenditures item also included capitalised customer contracts of € 0.2 million (previous year: € 0.5 million) and capitalised customer websites in the amount of € 0.1 million (previous year: € 0.3 million).

Statement of financial position

As of 31 March 2016, total assets amounted to € 45.8 million, showing a decrease of € 3.8 million compared with 31 December 2016 (31 December 2015: € 49.6 million).

Current assets declined from € 32.2 million to € 29.1 million. This is due primarily to the decrease in available-for-sale financial assets by € 3.0 million. As of 31 March 2016, telegate had investments in short-term money market and bond funds that are reported as available-for-sale financial assets. The fair value of these investments was € 14.5 million (31 December 2015: € 17.5 million). At € 1.9 million, other current assets remained virtually constant compared with € 1.7 million in the prior-year period. These included current customer contracts in the amount of € 0.7 million (31 December 2015: EUR 0.7 million) as well as customer websites of EUR 0.3 million (31 December 2015: EUR 0.1 million). Current customer contracts concerned capitalised direct selling expenses that are directly associated with the Digital segment. The slight decline in trade accounts receivable is attributable to the downturn experienced in the directory inquiries business and the correspondingly lower sales volume.

As of the reporting date, the Group had non-current assets worth € 16.7 million (31 December 2015: € 17.5 million). The decline by € 0.8 million stemmed from the decrease in property and equipment and intangible assets as a result of depreciation and amortisation.

Current liabilities decreased by € 1.4 million to € 8.4 million (31 December 2015: € 9.8 million), with accrued current liabilities decreasing from € 6.0 million to € 4.4 million.

telegate has no significant non-current liabilities, no liabilities in foreign currencies and no loan liabilities to banks.

Equity declined by € 2.3 million year-on-year to € 35.9 million (31 December 2015: € 38.2 million), due mainly to the net loss for the period.

Cash flow & financing

As expected, the first-quarter cash flow from operations in 2016 amounted to € -0.8 million, compared to € -1.5 million during the prior-year period due to the reduce of the Miscellaneous current assets.

The cash inflow from investing activities in the first three months amounted to € 2.1 million (previous year: € 1.0 million). The cash flow from investing activities includes the purchase and sale of money market funds and bond funds. Adjusted for these investments, the cash flow from investing activities improved by € 0.1 million year-on-year, from € -1.0 million to € -0.9 million.

The cash flow from financing activities was € 0.0 million in the first three months, which is unchanged from the previous year.

Net cash flow in Q1 2016 (cash flow from operations + cash flow from investing activities - interest expense +/- adjusting for sale of money market and bond funds) improved year-on-year from € -2.5 million to € -1.8 million. For a better comparability, the 2015 value was adjusted.

Segment report

At € 7.6 million, revenues in the Digital business were down year-on-year (previous year: € 8.4 million). The Digital business now accounts for around 65 percent of total revenue (previous year: 60 percent).Three-month earnings (EBITDA) as of the reporting date were € -0.2 million (previous year: € 0.2 million).

The traditional directory assistance business accounted for € 4.1 million of total revenue (previous year: € 5.6 million). The decrease in this segment of € 1.5 million was not as high as in the previous year (€ 1.9 million). Earnings (EBITDA) fell by € 0.5 million in the first three months to € 0.0 million (previous year: € 0.5 million).

Outlook

Directory Assistance segment

In the Directory Assistance segment, telegate AG expects that the negative trend with respect to call volumes in Germany will also persist in 2016. The group expects call volume in 2016 for directory assistance to decrease by the same amount as in 2015. To partially offset the effects of this downturn in revenue, the group continued to work on increasing revenue per call in 2015. The group assumes that it will only be able to achieve smaller increases in the future. New business models are being examined in order to ward off decreases in business volume and ensure long-term success.

telegate expects the Directory Assistance segment to generate revenues of € 15.3 to € 16.2 million in 2016. In 2015, segment revenues were € 21.0 million.

In terms of the development of earnings, telegate continues to plan posting EBITDA of around € 0.8 to € 1.2 million for the Directory Assistance segment in 2016. In 2015, EBITDA amounted to € 2.9 million.

Digital segment

The strategic focus of the Digital segment will be on the implementation of the Genesis project. Comprehensive capital expenditures in new products and the brand as well as an optimised corporate structure, an improved product portfolio and the development of vertical markets will facilitate sustainable growth in revenues and customers. In the area of new customer business, telegate is working on a noticeable increase in the 2016 financial year. Telegate also intends to achieve success in its existing customer business with the help of a catalogue of measures in order to develop the loss of customers, which had already subsided considerably at the end of 2015, into a significant expansion of the customer portfolio in 2016

Overall, the group plans to generate revenues within a range from € 29.3to € 32,5 million in the Digital segment in 2016. In 2015, segment revenues were € 32.5 million.

Turning to the development of earnings in the Digital segment, the telegate group expects EBITDA in 2016 of € -0.2 to -1.8 million. By means of comparison, the figure for the last financial year was € -3.2 million.

Group

At group level, telegate expects to post revenues of € 44.6 to € 48.7 million in 2016. In comparison, revenues were generated in the amount of € 53.5 million in 2015. With respect to profitability, the group expects EBIT-DA in 2016 to be in the range of € 0.9 to € -1.2 million as a result of capital expenditures in the digital business. In comparison, the company generated EBITDA in the amount of € -0.2 million in 2015.

In 2016, the company expects a net cash flow of between € -6.3 and € -8.4 million due to the capital expenditures in the digital business and the further business transformation.

Employees

On 31 March 2016, the telegate group had 770 employees (head count; excluding trainees, "mini-jobs" and dormant employment contracts). Year-on-year, this represents a decline of 14 percent (previous year: 892). This decline in numbers is largely due to continued capacity adjustments and further personnel capacity adjustments reflecting the new sales structure.

Planegg-Martinsried, 29 April 2016

The Management Board

Consolidated Income Statement (IFRS)

3-Months Report (unaudited)

in kEUR	1.1. - 31.03.2016	1.1. - 31.03.2015
Continuing operations
Revenues	11,792	13,959
Cost of revenues	-6,473	-7,095
Gross profit	5,319	6,864
Selling and distribution costs	-4,666	-6,361
General administrative expenses	-2,973	-2,723
Other operating income	1	2
Other operating expense	-12	-6
Operating income (loss)	-2,331	-2,224
Interest income	67	128
Interest expense	-3	-5
Gain (loss) from marketable securities	-36	-21
Gain (loss) on foreign currency translation	0	2
Financial income (loss)	28	104
Income (loss) before income tax	-2,303	-2,120
Current income tax	0	26
Deferred income tax	0	251
Income tax	0	277
Net income (loss) from continuing operations	-2,303	-1,843
Discontinued operations
Net income (loss) from discontinued operations	-26	-5
Net income (loss)	-2,329	-1,848
Attributable to:
Owners of the parent	-2,329	-1,848
Non-controlling interests	0	0
	-2,329	-1,848
Earnings per share for net income (loss) for the reporting period attributable to ordinary equity holders of the parent (in euro)	-0.12	-0.10
Earnings per share for continuing operations for net income (loss) for the reporting period attributable to ordinary equity holders of the parent (in euro)	-0.12	-0.10
Earnings per share for discontinued operations for net inco me (loss) for the reporting period attributable to ordinary
equity holders of the parent (in euro)	0.00	0.00

See accompanying notes to the consolidated financial statements.

Consolidated Statement of Comprehensive Income (IFRS)

3-Months Report (unaudited)
1.1. - 31.03.2016	1.1. - 31.03.2015
-2,329	-1,848
-10	18
1	15
-9	33
-2,338	-1,815
-2,312	-1,810
-26	-5
-2,338	-1,815
-2,338	-1,815
0	0
-2,338	-1,815

See accompanying notes to the consolidated financial statements.

Consolidated Statement of Financial Position (IFRS)

	(unaudited)	(unaudited)
ASSETS in kEUR	31 March 2016	31 March 2015	31. Dec. 2015
Current assets
Cash and cash equivalents	2,226	3,726	940
Trade accounts receivable	10,023	11,217	11,092
Current tax assets	226	165	203
Available for sale financial assets	14,481	20,669	17,530
Other financial assets	131	220	690
Other current assets	1,981	1,919	1,734
Total current assets	29,068	37,916	32,189
Non-current assets
Goodwill	6,789	6,789	6,789
Intangible assets	7,671	9,588	8,146
Property and equipment	2,257	3,263	2,507
Other financial assets	13	15	13
Deferred tax assets	5	3	0
Total non-current assets	16,735	19,658	17,455
Total assets	45,803	57,574	49,644
LIABILITIES AND EQUITY in kEUR
Current liabilities
Trade accounts payable	1,286	961	1,071
Accrued liabilities	4,406	6,077	6,047
Provisions	160	150	266
Other current liabilities	2,541	2,383	2,410
Total current liabilities	8,393	9,571	9,794
Non-current liabilities
Provisions	932	619	1,034
Provisions for retirement benefits	48	88	48
Deferred tax liabilities	564	1,531	564
Total non-current liabilities	1,544	2,238	1,646
Total liabilities	9,937	11,809	11,440
Equity Share capital	19,111	19,111	19,111
Additional paid in capital	32,059	32,059	32,059
Retained earnings	-15,301	-5,504	-12,972
Other components of equity	-3	99	6
Equity attributable to owners of the parent	35,866	45,765	38,204
Total equity	35,866	45,765	38,204
Total liabilities and equity	45,803	57,574	49,644

Consolidated Statement of Cash Flows (IFRS)

	(unaudited)	(unaudited)
in kEUR	1.1. - 31.03.2016	1.1. - 31.03.2015
Cash flow from operating activities
Income (loss) before income tax from continuing operations	-2,303	-2,120
Income (loss) before income tax from discontinued operations	-26	-5
Income (loss) before income tax	-2,329	-2,125
Adjustments for:
Amortisation and impairment of intangible assets	1,393	1,927
Depreciation and impairment of property and equipment	271	474
Depreciation of current intangible assets	474	471
Gain (loss) on disposal of property and equipment	11	4
Interest income	-67	-128
Interest expense	3	5
Gain (loss) from marketable securities	36	21
Gain (loss) on foreign currency translation	0	-2
Valuation allowance for trade accounts receivable	106	2
Gain (loss) from the sale of subsidiaries	26	5
Changes in non-current provisions	-101	-35
Operating income (loss) before changes in operating assets and liabilities	-177	619
Changes in operating assets and liabilities:
Trade accounts receivable	683	344
Current intangible assets 1)	-649	-589
Miscellaneous current assets	486	90
Trade accounts payable	380	-347
Current provisions	-7	-6
Accrued expenses and other current liabilities	-1,494	-1,617
Income taxes paid	-23	-15
Cash used in operating activities	-801	-1,521
Cash flow from investing activities
Purchase of intangible assets excl. customer contracts	-575	-550
Purchase of customer contracts with contract period > 1 year	-223	-502
Purchase of property and equipment	-39	-47
Proceeds from sale of property and equipment	0	3
Disbursement for the sale of subsidiaries	-140	-13
Purchase of available for sale financial assets	0	-6,986
Disposal of available for sale financial assets	3,001	8,950
Interest received	67	130
Cash provided by investing activities	2,091	985
Cash flow from financing activities Interest paid	-3	-4
Cash used in financing activities	-3	-4
Effect of exchange rate changes on cash and cash equivalents	-1	4
Change in cash and cash equivalents	1,286	-536
Cash and cash equivalents at the beginning of reporting period	940	4,262
Cash and cash equivalents at the end of reporting period	2,226	3,726
Cash and cash equivalents as well as short-term available for sale financial assets at the end of reporting period	16,707	24,395

1) Current intangible assets include exclusively purchases for capitalized customer contracts and websites for customer with a contract period up to one year and are shown separately within the operating activities.

Consolidated Statement of Shareholders' Equity (IFRS)

	Share capital	Additional paid in capital	Retained earnings	Other com ponents of equity	Total	Non-con trolling interests	Total equity
in kEUR
Balance at January 1, 2016	19,111	32,059	-12,972	6	38,204	0	38,204
Net income (loss)	-	-	-2,329	-	-2,329	-	-2,329
Available for sale financial assets	-	-	-	-9	-9	-	-9
Other comprehensive income	-	-	0	-9	-9	-	-9
Total comprehensive income (loss)	0	0	-2,329	-9	-2,338	0	-2,338
Balance at March 31, 2016	19,111	32,059	-15,301	-3	35,866	0	35,866
Balance at January 1, 2015	19,111	32,059	-3,656	66	47,580	0	47,580
Net income (loss)	-	-	-1,848	-	-1,848	-	-1,848
Available for sale financial assets	-	-	-	33	33	-	33
Other comprehensive income	-	-	0	33	33	-	33
Total comprehensive income (loss)	0	0	-1,848	33	-1,815	0	-1,815
Balance at March 31, 2015	19,111	32,059	-5,504	99	45,765	0	45,765

Equity attributable to owners of the parent

See accompanying notes to the consolidated financial statements.

Notes to the Interim Consolidated Financial Statements

1. Presentation of the interim consolidated financial statements

The business operations of telegate AG (hereinafter also referred to as the company) and its subsidiaries comprise the provision of telecommunications services of all kinds, the design and marketing of information databases and marketing advertisements, the provision of online marketing services, the provision of DA services (directory assistance services) about the subscribers of public telephone networks as well as other DA services in Germany and abroad.

Telegate AG is a listed stock corporation under German law domiciled in Martinsried near Munich, Germany; it is the parent company of the telegate group (hereinafter also referred to as the group/telegate/telegate group).

The interim consolidated financial statements of telegate AG and its subsidiaries for the first three months ending 31 March 2016 were prepared in accordance with the International Financial Reporting Standards (IFRS) as applicable in the European Union.

All International Accounting Standards (IAS), International Financial Reporting Standards (IFRS) as well as the interpretations of the IFRS Interpretations Committee (IFRIC) and the interpretations of the Standing Interpretations Committe (SIC) whose application was mandatory as of 31 March 2016 were taken into account.

The interim consolidated financial statements were prepared in accordance with IAS 34 Interim Financial Reporting and should be read in the context of the audited consolidated financial statements of telegate for the 2015 financial year.

The interim consolidated financial statements of the telegate group are presented in euros (EUR). Unless stated otherwise, all values were rounded to thousands of euros (EUR thousand).

The interim consolidated financial statements are generally prepared using the historical cost system.

The interim consolidated financial statements have not been audited. They were released for publication by the Management Board on 29 April 2016.

The consolidated financial statements and the group management report prepared as of 31 December 2015 were submitted with the publisher of the Federal Gazette and published electronically in the Federal Gazette.

2. Changes in accounting policies

The accounting policies applied in the interim consolidated financial statements are consistent with those applied in the consolidated financial statements for the 2015 financial year, except for the changes explained below.

IAS 19 Employee Benefits - Employee Contributions

The amendment to IAS 19 introduced an option to the standard for accounting for defined benefit pension commitments to which employees or third parties make required contributions.

The amendments were issued in November 2013 and must be applied for the first time in financial years beginning on or after 1 February 2015.

The application of these amendments does not affect the consolidated financial statements.

Annual improvements to IFRS - 2010-2012 Cycle

The changes effect the following standards:

• - IFRS 2 Share-based Payment
• - IFRS 3 Business Combinations
• - IFRS 8 Operating Segments
• - IFRS 13 Fair Value Measurement
• - IAS 16 Property, Plant and Equipment / IAS 38 Intangible Assets
• - IAS 24 Related Party Disclosures

The amendments were issued in December 2013 and must be applied for the first time in financial years beginning on or after 1 February 2015.

The application of these amendments do not affect the group's net assets, financial position and results of operations.

Amendments to IFRS 11 Joint Arrangements - Acquisitions of Interests in Joint Operations

The amendments add new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business. All of the principles on business combinations accounting must now be applied to the acquisition of interests in a joint operation of this nature.

The new provisions were issued in May 2014 and are applicable prospectively to acquisitions of interests taking place in reporting periods beginning on or after 1 January 2016.

The revised standard does not affect the consolidated financial statements.

Annual Improvements to IFRS - 2012-2014 Cycle

This additional amendment standard as part of the annual improvements (2012-2014 cycle) contains amendments to the following standards:

• - •IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
• - •IFRS 7 Financial Instruments: Disclosures (with subsequent amendment to IFRS 1)
• - •IAS 19 Employee Benefits
• - •IAS 34 Interim Financial Reporting

The amendments were issued in September 2014 and are effective for reporting periods beginning on or after 1 January 2016.

Application of these amendments primarily influences the scope of disclosures in the notes and thus will not affect the group's net assets, financial position and results of operations.

Amendments to IAS 1 Presentation of Financial Statements: Disclosure Initiative

The amendments to IAS 1 provide for a stronger focus on the principle of materiality, further options for breaking down the minimum line items in the statement of financial position, as well as the disclosure of subtotals and greater flexibility in the preparation of the notes in relation to the sequence of the disclosures.

The amendments were issued in December 2014 and are effective for reporting periods beginning on or after 1 January 2016.

Application of these amendments influences the method of presentation in the consolidated financial statements and the disclosures in the notes and thus will not affect the group's net assets, financial position and results of operations.

3. Future changes in accounting policies

IFRS 16 Leases

The IASB issued the new standard IFRS 16 on lease accounting which supersedes IAS 17 Leases and the associated interpretations, IFRIC 4, SIC-15 and SIC-27.

A lessee must now account for all leases in the form of a right-of-use asset and a corresponding lease liability at the present value of the minimum lease payments. Consequently, the right-of-use asset must be depreciated over the lease term on a straight-line basis, while the lease liability must be measured using the effective interest method. A uniform presentation is made in the income statement in which a depreciation charge is continuously recognised for each lease agreement and interest expense is allocated over the lease term. While a lessee is no longer required to classify a lease as either a finance lease or an operating lease, IFRS 16 still requires lessors to do so.

The standard was issued in January 2016 and must be applied for the first time for financial years beginning on or after 1 January 2019. Voluntary early application is permitted if the entity also applies IFRS 15 Revenue from Contracts with Customers at this time. The standard has yet to be endorsed by the EU.

telegate is currently reviewing which effects the application of IFRS 16 has on the group's net assets, financial position and results of operations.

Amendments to IAS 12 - Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify the question of the recognition of deferred tax assets on temporary differences from unrealised losses.

The new guidance was issued in January 2016 and – subject to EU endorsement of the standard – must be applied for the first time for financial years beginning on or after 1 January 2017. Voluntary earlier application is permitted.

The amendments are not expected to affect the group's net assets, financial position and results of operations.

Amendments to IAS 7 Statement of Cash Flows: Disclosure Initiative

The objective of this amended standard is to improve the information provided about an entity's financing activities. The amendments set out that in the future entities will be required to provide enhanced disclosures on changes in liabilities arising from financing activities in the statement of financial position during the reporting period if cash flows from those financial liabilities were, or future cash flows will be, included in cash flows from financing activities in the statement of cash flows. In addition, the disclosure requirement also applies to changes in the carrying amount of financial assets if cash flows from those financial assets were, or future cash flows will be, included in cash flows from financing activities.

The amendments were issued in January 2016 and must be applied for the first time for reporting periods beginning on or after 1 January 2017. Voluntary earlier application – subject to EU endorsement – is permitted. When the entity first applies those amendments, it is not required to provide comparative information for preceding periods.

The amendments are not expected to affect the group's net assets, financial position and results of operations.

4. Restructuring measures

The restructuring plan initiated in October 2015 aimed at the discontinuation and closure of the entire field sales unit as of 31 December 2015 was largely completed in the first three months of the current financial year.

As of 31 March 2016, the obligations presented in the consolidated statement of financial position in connection with restructuring measures totalled EUR 329 thousand (31 December 2015: EUR 488 thousand), of which EUR 312 thousand (31 December 2015: EUR 368 thousand) was recorded for obligations arising under vehicle leases that are shown under non-current provisions. No expenses associated with ongoing restructuring measures were shown in the income statement (2015: EUR 0 thousand) in the first three months of the current financial year.

5. Segment reporting

For the purpose of management control, the telegate group divides its activities into two operating segments, Directory Assistance and Digital.

The two segments' main key performance indicators for operations are revenues and EBITDA (earnings before interest, taxes, depreciation and amortisation). Management decided to no longer calculate the key figure "EBITDA before non-recurring items" that was additionally presented in the previous years.

The accounting principles for the segments match those described in the consolidated financial statements for the year ended 31 December 2015.

There were no inter-segment revenues in the first three months of the current financial year or in the same period of the preceding year.

The table below shows the revenues and earnings of the group's operating segments:

1 January – 31 March 2016 in EUR thousand	Directory Assistance	Digital	Group
Revenues
Revenues from transactions with external customers	4,147	7,645	11,792
Total revenues	4,147	7,645	11,792
Earnings
EBITDA	-18	-175	-193
Depreciation and amortisation	-393	-1,745	-2,138
Net financial income			28
Earnings before income taxes			-2,303

1 January – 31 March 2015 in EUR thousand	Directory Assistance	Digital	Group
Revenues
Revenues from transactions with external customers	5,585	8,374	13,959
Total revenues	5,585	8,374	13,959
Earnings
EBITDA	483	164	647
Depreciation and amortisation	-684	-2,187	-2,871
Net financial income			104
Earnings before income taxes			-2,120

6. Financial instruments

The following table shows both the carrying amounts and the fair values of all financial instruments recognised in the consolidated financial statements, including their levels in the fair value hierarchy. It does not contain any information about the fair value of financial assets and liabilities that were not measured at fair value if the carrying amount suitably approximates the fair value.

as of 31 March 2016, in EUR thousand	Carrying amounts pursuant to IAS 39 measurement category			Fair value
	Loans and receivables	Available for-sale	Financial liabilities measured at amortised cost	Level 1	Level 2	Level 3
Financial assets measured at fair value
Securities	-	14,481	-	14,481	-	-
Financial assets not measured at fair value
Cash and cash equivalents	2,226	-	-
Trade accounts receivable	10,023	-	-
Current other financial assets	131	-	-
Non-current other financial assets	13	-	-
Financial liabilities not measured at fair value
Trade accounts payable	-	-	1,286

as of 31 December 2015, in EUR thousand		Carrying amounts pursuant to IAS 39 measurement category		Fair value
	Loans and receivables	Available for-sale	Financial liabilities measured at amortised cost	Level 1	Level 2	Level 3
Financial assets measured at fair value
Securities	-	17,530	-	17,530	-	-
Financial assets not measured at fair value
Cash and cash equivalents	940	-	-
Trade accounts receivable	11,092	-	-
Current other financial assets	690	-	-
Non-current other financial assets	13	-	-
Financial liabilities not measured at fair value
Trade accounts payable	-	-	1,071

In the first three months until 31 March 2016, there were no changes in the valuation techniques applied and no transfers between the levels of the fair value hierarchy.

7. Disclosure regarding the corporate bodies of telegate AG

Change in the Supervisory Board

On 11 February 2016, on the application of the Management Board, Antonio Converti was court-appointed to the Supervisory Board of telegate AG to succeed Vincenzo Santelia.

8. Corporate Governance Kodex

The joint declaration of compliance by the Management Board and Supervisory Board of telegate AG in accordance with section 161 AktG relating to the German Corporate Governance Code was made on 17 December 2015. The exact wording of the declaration can be retrieved under www.telegate.com.

Planegg-Martinsried, 29 April 2016

Christian Maar Michael Geiger Chairman of the Management Board Member of the Management Board

www.telegate.com

telegate AG • Fraunhoferstraße 12a • 82152 Martinsried