InTiCa Systems AG — Annual Report 2006

Apr 20, 2007

Success in dynamically growing markets

Annual report 2006 of InTiCom Systems AG

Key figures of InTiCom Systems AG

The Group	2004	2005	2006	Change
	in TEUR	in TEUR	in TEUR	in %
Sales revenues	19,457	35,034	37,483	+7.0
Profit margin	5.2%	6.3%	4.2%
EBITDA	1,530	4,120	3,354	-18.6
EBIT	1,228	3,466	2,300	-33.6
EBT	1,194	3,584	2,420	-32.5
Net income	1,010	2,195	1,569	-28.5
Earnings per share (EUR, total 4,287,000 shares)	0.24	0.51	0.37	-16.7
Earnings per share (EUR, basic)	1.39	1.69	0.49	n.a.
Cash flow from operating activities per share (EUR)	0.50	0.32	0.17	-46.9
Cash flow from operating activities	2,132	1,354	745	-45.0
Capital expenditure	1,416	5,922	9,098	+53.6

	12/31/2004	12/31/2005	12/31/2006	Change
	in TEUR	in TEUR	in TEUR
Total assets	16,417	24,532	38,181	+55.6
Equity	11,139	13,480	24,614	+82.6
Equity ratio	68%	55%	65%
Employees	65	102	155	+52.0

The stock	2004 XETRA in EUR	2005 XETRA in EUR	2006 XETRA in EUR	(as of March 31) 2007 XETRA in EUR
Closing price	6.04	18.27	20.00	16.00
Period high	6.41	20.50	29.17	19.50
Period low	5.48	5.46	15.60	14.19
Market capitalization at end of period (mil. EUR)	25.9	78.3	85.7	68.6
Number of shares	4,287,000	4,287,000	4,287,000	4,287,000

Table of contents

Introduction	4
Company Boards	6
Company profile	7
Investor relations	14
Corporate governance	18
Corporate citizenship	21
Group management report	22
Risk report	28
Subsequent events	32
Outlook	33

Consolidated financial statements	35
Consolidated income statement	36
Consolidated cash flow statement	37
Consolidated balance sheet	38
Consolidated statement of changes in non-current
assets	40
Consolidated statement of changes in equity	41

Notes to consolidated
financial statements	42
Auditor's certificate	58
Report of the
Supervisory Board	60
Technical glossary	62
Financial calendar / Imprint	U3

Board of Directors (from left to right):: Dr. Paul Grohs, Maria Grohs, Dieter Schopf

Dear stockholders, dear customers and business partners, dear employees,

the high expectations for a fast expansion of the VDSL network started for the Soccer World Cup were not met in 2006. The delayed development of this high-speed network for telecommunication, caused by the discussion between European Union and German Federal Government over the issue whether VDSL needs to be subjected to regulation, and if so, in what form, made German telecommunication companies freeze their investments. Regardless of existing supply agreements, our company missed out on scheduled sales on a large scale for this reason.

However, InTiCom Systems managed to raise the sales volume by roughly 7 percent to 37.5 million Euro in the financial year 2006. The net income was 1.6 million Euro in 2006, compared to 2.2 million Euro in the previous year. The stock of InTiCom Systems, split 2-for-1 in the spring 2006, had a closing price of 20.00 Euro at the end of the year 2006 and generated earnings per share of 0.37 Euro (2005: 0.51 Euro).

This positive result in spite of all setbacks was brought about decisively by the DSL business which continues to boom, providing the company with a growth in DSL splitter unit numbers in excess of ten percent. By its international business, InTiCom Systems was able to more then compensate for the splitters' price deterioration: The sale of xDSL splitters abroad generated a considerable sales increase in the past year. Norway, Spain and Italy were the biggest growth markets for these products.

In 2007 the xDSL business of InTiCom Systems AG, both domestic and international, will continue to supply increasing unit numbers and sales figures. In Germany alone, growth rates comparable to 2006 are secured in the DSL segment. Additional market stimulation is provided by the domestic VDSL network, which is gradually given shape: Since December 2006, the company has been manufacturing the first filter coils for VDSL splitters which the network operators proceed to install on the service provider side despite the still unresolved regulation issue (as of March 2007).

Due to supply contracts with major international telecommunication companies, InTiCom Systems will also benefit even more than before from the development of new DSL and

VDSL markets in an increasing number of countries.

Furthermore, the company managed to break even already by the end of the year with its new business segment automotive electronics, for which production was started only in mid-year 2006 at the newly set up production location Prachatice in the Czech Republic. Among other products, InTiCom Systems develops and manufactures RFID solutions for keyless entry and tire pressure monitoring systems, anti-theft immobilizer systems, as well as inductive components and filter applications for increasingly complex automotive electronics, providing safety and comfort to vehicles of all classes.

In its half-year of start-up operation, the production of these electronic products already contributed just under four million Euro to total sales. Established and new contracts with leading domestic and international car manufacturers and suppliers to the automobile industry safeguard a significant sales increase for 2007. In the medium or long term, the automotive segment of InTiCom Systems will reach a scale comparable to the xDSL segment.

This could work, and will continue to work, only on account of careful planning of the production start-up, the up-to-date production facilities and innovative process cycles in Prachatice, and the smooth cooperation between the development divisions located in Passau and Austria and the production division. The early instruction of the new employees, beginning their training during the start-up stage of series production in February 2006, paid off by the fast audit and release of production by our customers in the automobile industry.

By the sum of these factors, InTiCom Systems managed within a very short period of time to work its way up from newcomer to internationally significant market participant and technology leader in the automotive segment as well – we are proud of that.

Our success would not be possible without our employees: They bring us in the position to supply innovative and technologically mature products

Board of Directors

Maria Grohs

Businesswoman Materials management, marketing and sales Managing director of InTiCom Systems Ges.m.b.H., Neufelden (Austria) appointed until June 30, 2011

Dr. Paul Grohs

Graduate engineer Development and production Managing director of InTiCom Components GmbH, Thessaloniki (Greece) appointed until June 30, 2011

Dieter Schopf

Graduate in business management Controlling, finances and accounting Managing director of InTiCom Systems s.r.o., Prachatice (Czech Republic) appointed until January 31, 2011

The entire Board of Directors is responsible for investments, public relations, and quality management.

Supervisory Board

Dr. Wulfdieter Braun,

Chairman Graduate physicist Passau

Karl Kindl,

Vice-chairman

Graduate in business administration (VWA), Member of supervisory Board of DES Data Empire Systems AG, Hauzenberg

Harald Nöth

Graduate engineer Co-partner and member of Board of directors of DES Data Empire Systems AG, Munich

of the highest quality, on schedule and with delivery reliability, to the markets of the world and thus effectively occupy dynamic market segments. We are grateful for that. We also thank our customers and suppliers and, not least, our shareholders who have put their trust in our

company. We are not going to disappoint you.

Passau, March 2007

Dr. Paul Grohs, Board of Directors

Maria Grohs, Board of Directors

Dieter Schopf, Board of Directors

Our strengths: Innovation and reliability

Finding new market segments and opening them with innovative products up to market leadership – these are the strengths of InTiCom Systems AG. DSL/VDSL is a case in point, and in the field of customized automotive electronics, InTiCom Systems is well on the way to giving another example: Merely a year after the start, our customer base is made up of globally leading car manufacturers. Our formula: production and quality reliability right from the start.

Production site Prachatice: Success is our program

The development has been rapid: The decision on building the production plant in Prachatice was made in November 2005, the production of automotive electronics was started in May 2006, and the production space will be doubled by August 2007 already.

Today 90 employees work in three shifts, 24 hours a day, seven days a week, in production hall 1 in Czech Prachatice, manufacturing large quantities of antennas for keyless entry systems, anti-theft immobilizer systems, and tire pressure monitoring systems. In the future a complete system unit of the stereo system will be supplied to a renowned German sports car specialist.

In addition, InTiCom Systems develops solutions for the power plant control of hybrid cars which can be operated,

according to the requirements, by electric motors, combustion engines (gas or diesel), or both power plants at the same time.

A few examples for the portfolio of individual products currently manufactured in Prachatice, and usually subjected to binding five-year contracts, are: complete so-called immobilizers (car anti-theft devices) and electronic access/driving authorization systems for keyless entry applications for German and Asian car manufacturers.

Apart from production for the automotive segment, VDSL filter coils have also been manufactured in Prachatice since January 2007. Because the German telephone network is being equipped on the service provider side of the high-speed telecommunication network with InTiCom Systems technology despite the still unresolved issue of regulation.

The quality standard to be met by all components and units is most challenging: All products pass through intensive quality control, piece by

piece, 100 percent. The effort made for quality control pays off: The average failure rates of all production batches are significantly below the maximum permissible values.

This is due not least to the large share of in-house developments among the machinery. More than 50 percent of the entire machinery used in Prachatice have been designed and developed by InTiCom Systems. Thus it is assured that the production facilities are exactly suited to the different requirements posed by the specific vehicle geometry and the components' individual performance ranges. Special tools have been connected upstream or downstream even to the standard machines for the plastic elements' injection molding.

Beginning in mid-2007, more than 150 employees will work in three shifts, 24 hours, 7 days a week, at these machines in two halls – the floor space will by then be exactly doubled, from 2,000 to 4,000 square meters.

Success has been planned minutely, and its route follows defined consolidation steps: Only when it had become clear by intensive preliminary conversations with the potential customers – European, Japanese, and U.S. carmanufacturing corporate Groups, global market and technology leaders in the sports and luxury car segments, and their significant suppliers – that InTiCom Systems would turn out to be as successful with automotive electronics as it has been with xDSL technology, the company management decided on the setup and ex-

pansion of this business field as the second main pillar.

Even in the start-up financial year 2006, the new business field broke even by generating sales revenues of almost four million Euro. Within the coming 5 to 7 years, the company management expects the automotive segment to make sales contributions of between 50 and 60 million Euro altogether.

There is ample space for an ongoing expansion: When InTiCom Systems acquired the property in 2005,

management already anticipated a fivefold increase of the first production hall's space requirement – the company management was that sure of success. This success is assured not only by factors such as the highest production and quality reliability right from the production start which the company guarantees for its products, mostly customized on the customer's order, or the absolute delivery reliability.

The location issue also plays a deciding part: The decision InTiCom Systems has made for Europe, for establishing the product and machine development divisions in Passau and in Austrian Neufelden, and for completing an almost isosceles triangle with distances of 80 kilometers each with the production site Prachatice is appreciated and rewarded by our customers.

The closeness between development and production makes sure that all critical issues which could jeopardize the production start-up or the manufacture of large quantities can be resolved in the shortest period of time – without protracted travel time, without communication difficulties, at low costs.

100 percent performance right from the start

Full load from the production start is an essential unique selling proposition of InTiCom Systems. This strategy is made possible by the early involvement of the employees in product and machine development. Downtime caused by maintenance and operating errors is avoided, and production reliability and high quality are secured.

It takes about 16 to 18 months from order receipt to production start – this is not an exception but rather the norm for the customized solutions the company supplies its customers with. Simplified and in brief, each product developed according to customer specifications at InTiCom Systems, be it solutions for telecommunication, industrial electronics, or the business field automotive electronics, passes through five phases.

The order for keyless go antennas InTiCom Systems received from a global car manufacturer in February 2007 for the Group's American car

models shows this in exemplary fashion: Series production will only begin in the summer of 2008. The order is about several antennas per vehicle, to be placed in the most diverse installation spaces inside the vehicle.

Order and coordination with the customer

During this first phase, the customer defines the requirements and specifications – performance parameters, maximum element size, and the vehicle's space availability in the case of keyless go antennas.

A project team is formed at InTiCom Systems, consisting of experts in different fields. This project team will see the project through all the phases up to series production.

It modifies the customer specifications considering aspects like assembly, price or performance advantages, or space saving and weight reduction, consults information and experience gained from similar products, and finally comes up with quite sophisticated unit number scenarios, complete with a detailed timetable and cost schedule. Time span of this phase: with new developments a maximum

six weeks, in the case of the keyless go systems just three weeks because the team could draw on the experience made over several ranges of the German model.

Feasibility study, status list procedure, machine development

During the second phase the antenna design is examined and, if necessary, modified accordingly, regarding the aspects and vantage points how production may be optimized, to what extent already existing machines may be used for the manufacture, and which machines and tools need to be

newly developed. Development manuals are written for each new product, existing manuals are consulted. The modification or development of new tools and machinery may take anywhere between one week and six months, depending on the tasks' complexity.

A, B and C sample phase

If the machine issue is basically resolved, three stages are usually sufficient: A samples are prototypes, B samples pass through processes similar to production, and C samples usually correspond to the validated product as it is supplied to the customers.

In individual cases, always depending on the product's complexity, a fourth stage may be added, or even two stages may be enough if experiences have been made with comparable products. A series handover certificate completes the ABC sample phase. According to the experiences collected during the ABC sample phase, the new or modified machines are either approved or they undergo further modifications.

Validation and run and rate tests follow, subjecting the machines and products to performance checks. The run and rate tests provide information

with regard to the equipment's productive efficiency in consideration of the products' quality requirements. After successful testing, the equipment is finally handed over to production.

The fifth phase, series production, can begin.

What is special at InTiCom Systems is that the employees are involved closely in the product development from the B sample stage on and that they take part in every step to follow.

On the one hand, the employees deliver important information where a product still poses problems or what does not run smoothly in the machines' handling or mode of operation, i.e. where changeovers, modifications, or fine tuning is necessary. On the other hand, the employees become acquainted with product and machine very early on, long before series production. Last but not least, InTiCom Systems is thus able to find out at an early stage which employees are particularly suited for the specific product's more demanding manufacturing processes and production steps. The presently 90 employees at the production plant Prachatice are involved as deeply as possible, i.e. without interfering with running production, in these learning processes in order to guarantee full load operation from the start of series production during all shifts without downtime due to maintenance or operating errors. This provides InTiCom Systems with an essential edge over the competition, and the customers appreciate that.

InTiCom Systems – Stock and investor relations

Stock performance InTiCom Systems against TecDAX

Source: IS. Teledata AG

The performance of the important German stock indices DAX, MDAX, SDAX, and TecDAX in the year 2006 was characterized by a clear upward trend once again. While the DAX had achieved a plus of 22% by the end of the year, MDAX and SDAX even recorded gains of 28 and 30 %, respectively. The TecDAX gained approximately 25%. However, a powerful market correction in the second quarter also left its mark on the positive course of the year, leveling the gains accumulated since the beginning of the year for the most part. The market saw a general recovery from mid-July, followed by a rally with new price highs by the end of the year. This trend held up during the first months

of 2007 but was discontinued abruptly by a downward movement by the end of February.

In the year 2006 InTiCom Systems AG realized two capital increases. As of March 14 of the past financial year, 129,000 non-par stocks from the authorized capital were placed. Thereby the stock capital was increased from EUR 1,300,000 to EUR 1,429,000. Another capital increase was executed from the company's own resources approved by shareholders' resolution at the Annual General Meeting of May 18, 2006. It was realized in the form of a conversion of stated paid-in capital to the partial amount of EUR 2,858,000 so that the stock

capital rose to EUR 4,287,000. The stockholders received stock dividends (or bonus stock) at the ratio of 1:2. The stock price's mathematical split by three resulted from these financial measures. The stock quotations were adjusted accordingly in retrospect. However, the value of each stock parcel and the company on the whole remained the same.

Starting from the closing price 2005 of EUR 18.27, the stock gained significantly at first, reaching its 52-week high on March 20, 2006 at EUR 29.17. This equals a price gain of roughly 60%, clearly above the 22% the TecDAX recorded for the same time period. On the whole, the performance of the first four months reflected the positive expectations of the market for the company's continued growth in sales and profit. In the course of the general decline of the market, the InTiCom Systems stock showed a significantly volatile downward movement. Compared to the TecDAX, this downturn was more pronounced, leading to a 52-week low of EUR 14.60 on July 19, 2006. In the aftermath of heavy fluctuations the price recovered at first, outperforming the TecDAX in October once again. While the TecDAX continued its upturn towards the end of the year, the price of the InTiCom Systems stock dropped severely, falling to an interim low of EUR 15.60 on November 28, 2006. By the end of the year, the stock closed at a smooth EUR 20.00, thereby 9% above the previous year's closing price. The stock price performance was certainly clouded by the announcement that the planned expansion of the VDSL network in Germany was delayed massively, resulting in sales shortfall. In the course of this year, the price movement has not followed the index performance so far. The after-affects of the temporarily clouded profit situation are thus clearly noticeable. The market mirrors the prevailing insecurity with regard to the future development of the growth in sales and profit. It is the company's goal – particularly that of

investor relations – to turn this insecurity into confidence in the perspectives and prospects of the business activity of InTiCom Systems.

In the year 2006 the Board of Directors continued to intensify the contact with the stockholders, potential investors, financial analysts, and business journalists, in Germany as well as in other European countries. In the course of a targeted investor relations effort, a large number of road shows were realized during the financial year 2006. Destinations were Basel and Zurich in Switzerland, Vienna and Linz in Austria, and Frankfurt/Main in Germany. In contrast to the previous year, one road show was also conducted in the United States. In the current year, road show activity will be further expanded, especially in Europe. Following a presentation realized in London most recently, road shows are scheduled to be held in Hamburg, Paris, again London, and the Netherlands, in addition to the previously mentioned destinations. The investor relations team aims at expanding the circle of institutional investors substantially in order to reduce the stock price's short-term fluctuation range. As in the year 2006, InTiCom Systems will participate in capital market and analysts' conferences and thereby intensify the company's contact with the capital market.

Another platform of active communication, the Annual General Meeting was held on May 18 in the past financial year. It recorded a presence of 24% and was used by the attendees for lively discussions with the Board of Directors. All items on the agenda were passed with majorities close to 100%. The Board of Directors is happy to invite all stockholders and other interested parties to this year's Annual General Meeting of InTiCom Systems AG to be held on May 24, 2007 in Passau.

The invitation and corresponding documents can be found under the heading "investor relations" on the Internet website of InTiCom Systems at www.inticom-systems.de, under the item "Annual General Meeting".

The website also gives interested parties the opportunity to inform themselves about all issues involving the InTiCom Systems stock in detail, by downloading annual reports, quarterly figures, press releases, or other sources of information, or mail direct inquiries to the company.

Stock data of the InTiCom Systems stock

ISIN	DE0005874846
Stock exchange symbol	IS7
Trading segment	Prime Standard
Prime industry	Technology
Industry Group	Communications Technology
Indices	Prime All Share, Tec All Share, CDAX
Designated sponsor	Concord Effekten AG
Capital stock	EUR 4,287,000
Stock category	Non-par common bearer stocks

Stockholder structure of InTiCom Systems AG

Key figures of the InTiCom Systems stock

(in EUR)	2005	2006
Closing price (XETRA 12/30)	18.27	20.00
52-week high	20.50	29.17
52-week low	5.46	14.60
Market capitalisation in mil. EUR (XETRA 12/30)	78.30	85.74
Stocks traded on daily average (XETRA + floor in stock numbers)	10,228	14,525
Price-earnings ratio (P/E ratio) (XETRA 12/30)	35.7	54.1
Earnings per share (EPS)	0.51	0.37
Cash flow per share (CFPS)	0.32	0.17

The prices have been calculated

on the basis of the new number of 4,287 million stocks.

Directors' dealings

Share in the capital stock of Dec. 31, 2006	in numbers	in %
Board of Directors
Maria Grohs and Dr. Paul Grohs together	120,000	2.8
Dieter Schopf	120,000	2.8
Supervisory Board
Karl Kindl	150,264	3.5
Dr. Wulfdieter Braun	6,015	0.1
Harald Nöth	3,486	0.1

Corporate governance

The German Corporate Governance Code (GCGC) defines standards for the management and supervision of companies listed on the stock exchange. The established standards increase the company management's transparency and efficiency and provide confidence on the part of international and domestic investors, customers, employees, and the public at large. Board of Directors and Supervisory Board of InTiCom Systems AG feel committed to a company management oriented towards added value. In the corporate governance report at hand, Board of Directors and Supervisory Board present the essential cornerstones of corporate governance realized at InTiCom Systems AG. This includes a remuneration report, explaining the basics of the remuneration system of Board of Directors and Supervisory Board.

Dual management structure

In compliance with German stock corporation law, Board of Directors and Supervisory Board form the dual management structure of InTiCom Systems AG. The Board of Directors runs the company with sole responsibility. It is responsible for the company's strategic orientation, budgeting, and the preparation of interim reports and the consolidated financial statements, among other things. The three members of the Board of Directors are Mrs. Maria Grohs, Dr. Paul Grohs, and Mr. Dieter Schopf. They have not appointed a spokesperson or chairperson. Thanks to the smooth and close cooperation on the Board so far, its members have not found this necessary. Within the framework of a D&O insurance policy, retention of

TEUR 20 for the members of the Board of Directors is provided for.

The Supervisory Board has a monitoring and advisory function. It has three members as well: Dr. Wulfdieter Braun (chairman), Mr. Karl Kindl (vicechairman), and Mr. Harald Nöth. Because of the small number of employees, employee representatives are not on the Supervisory Board.

Board of Directors and Supervisory Board collaborate closely to the company's benefit. The Supervisory Board appoints the members of the Board of Directors. The Board of Directors explains the strategic planning and its realization to the Supervisory Board in written and oral reports. Decisions of essential importance made by the

Declaration of compliance

Board of Directors and Supervisory Board of InTiCom Systems Aktiengesellschaft declare with regard to the recommendations of the "Government Commission German Corporate Governance Code" according to Section 161 AktG (Corporations Act):

InTiCom Systems AG has fulfilled the recommendations of the German Corporate Governance Code in its version of June 12, 2006 since the last declaration of compliance, and will fulfill them until further notice, with the following exceptions:

Differing from No. 4.2.1 sentence 1, the company's Supervisory Board has not appointed a chairperson or spokesperson of the Board of Directors. The teamwork of the Board members so far has not made the appointment of a chairperson or spokesperson necessary.

Differing from No. 4.2.3, the remuneration of the members of the Board of Directors contains no variable components. All members of the Board of Directors are stockholders of the company as well. Therefore they are automatically committed to the company's added value and the other stockholders' benefit.

Differing from No. 5.1.3, the Supervisory Board has not prepared any rules of procedure for itself. Because of the small number of members, the Supervisory Board does not consider it necessary to regulate its members' collaboration with additional formalities.

Differing from Nos. 5.3.1 and 5.3.2, the Supervisory Board has not established an audit committee or other committees. Because of the small number of three Supervisory Board members, the Supervisory Board deals with all issues in its entirety.

Differing from Nos. 5.1.2 and 5.4.1, there is no age limit for members of the Board of Directors and the Supervisory Board. In our opinion, specialist skills and competence are the principal factors for qualifying as a member of any of both Boards.

Differing from No. 5.4.7, members of the Supervisory Board do not receive a success-oriented remuneration. In our opinion, a remuneration oriented towards profit targets is not supportive of the execution of the monitoring function as assigned to the Supervisory Board.

Differing from No. 7.1.2, the company's interim reports are published only within 60 days after the end of the period under report, and the consolidated financial statements are published only within 120 days after the end of the period under report. Limited capacities in the finance and accounting departments are the reason for that.

Board of Directors depend on the Supervisory Board's consent. Based on the auditor's reports, the Supervisory Board approves the financial statements prepared by the Board of Directors. Because of the small number of only three Board members, the Supervisory Board has not set up committees; all issues are dealt with by the entire Board. Following the election of the Supervisory Board at the general meeting on May 18, 2006, Dr. Wulfdieter Braun was appointed the Supervisory Board's new chairman. Mr. Karl Kindl was appointed vicechairman.

Remuneration report

The following remuneration report presents the basics of the remuneration system of Board of Directors and Supervisory Board of InTiCom Systems AG. In particular with regard to variable remuneration components, the implemented remuneration system differs from the recommendations of the GCGC. While general remarks are to follow, further information can be found in the management report and the individualized disclosure in the annual report's notes to the consolidated financial statements. No loans have been given to members of the Board of Directors and the Supervisory Board.

Remuneration of the Board of Directors

The current remuneration is based on the Supervisory Board's resolution of February 1, 2006 and essentially consists of a fixed annual remuneration

paid monthly. Contributions to the Board members' retirement provisions are made as well. The payment of contributions is made by means of a pension plan in the shape of a relief fund financed by deferred compensation. Fringe benefits essentially include perquisites in form of the provision of company cars for members of the Board of Directors. Differing from the Code's recommendations, the remuneration does not provide for variable components or components with long-term incentive effect and risk involvement, in the shape of options or phantom stocks. However, as all members of the Board of Directors do hold stocks of the company, they are directly committed to the company value. Special promises for the case of the occupation's termination or so-

Directors' Dealings

Name	Date	Number	Price (in EUR)	Volume (in EUR)	Market	Purchase/Sale
Dr. Wulfdieter Braun	01/17/2006	2,000	61.25	122,500	off-market	sale
Dieter Schopf	02/16/2006	2,350	76.80	180,480	Xetra	sale
Dr. Paul Grohs	02/17/2006	500	76.50	38,250	Xetra	sale
Dr. Paul Grohs	02/17/2006	1,000	77.00	77,000	Xetra	sale
Maria Grohs	03/01/2006	500	78.30	39,150	Xetra	sale
Maria Grohs	03/02/2006	500	79.00	39,500	Xetra	sale
Dieter Schopf	03/02/2006	1,250	79.50	99,375	Xetra	sale
Maria Grohs	04/12/2006	1,000	80.63	80,630	Xetra	sale

Stockholding

Board of Directors	Stocks Number	in percent	Supervisory Board	Stocks Number	in percent
Maria Grohs and			Dr. Wulfdieter Braun	6,015	0.1
Dr. Paul Grohs together	120,000	2.8	Karl Kindl	150,264	3.5
Dieter Schopf	120,000	2.8	Harald Nöth	3,486	0.1
Total Board	240,000	5.6	Total Board	159,765	3.7

called change of control clauses are not part of the contracts concluded. No pension promises have been made to the members of the Board of Directors for future pension or retirement annuity payments.

The Board of Directors' total remuneration in 2006 came to TEUR 664, 14 percent above the prior-year Board remuneration.

Remuneration of the Supervisory Board

The Supervisory Board's remuneration is regulated in Section 11 of the Articles of Incorporation of InTiCom Systems and consists of a fixed portion and an attendance fee. In accordance with the GCGC, the amount of the individual members' remuneration considers chairmanship and vice-chairmanship. As no committees have been established by the Supervisory Board, there is no need for an additional remuneration. Even though a variable remuneration component is allowed for by the Articles of Incorporation, it has not been applied so far. The Supervisory Board's total remuneration came to TEUR 15 in the past financial year.

Directors' dealings

In the past financial year, transactions according to Section 15 a WpHG (Securities Trading Act) were made by Mrs. Maria Grohs, Dr. Paul Grohs, and Mr. Dieter Schopf, all members of the Board of Directors, and by Supervisory Board member Dr. Wulfdieter Braun.

Stockholding

Members of the Board of Directors as well as of the Supervisory Board hold company stock. On the whole, members of the Board of Directors hold an interest in the company of 5.6 percent, and members of the Supervisory Board hold a 3.7 percent interest. Altogether, Board members hold roughly 9.3 percent of the company stock. The individualized disclosure as stipulated by No. 6.6 of the GCGC is made in the chart pictured above.

Corporate citizenship

Corporate citizenship, i.e. the corporate self-conception as part of society with social and collective responsibility, is focused on three areas at InTiCom Systems: training, sports, and cultural life.

As a medium-sized company which is characterized by the high significance placed on development and innovation and by its well-trained and committed employees, InTiCom Systems even supports initiatives for pre-school training. Kindergarten Obernzell has been equipped with several computer stations to make it possible for the children to become familiarized with EDP and information technology under didactic guidance early in life. InTiCom Systems also managed to make other sponsors provide game and learning software suitable for pre-school age.

In the financial year 2005, InTiCom Systems provided a large number of soldering stations for experimental physics classes to the high school Leopoldinum in Passau, the location of the company's headquarters. In 2006 experimental lab kits, each valued at roughly 2,500 Euro, were purchased and supplied for this high school's physics classes.

Even with regard to athletics, the company exclusively supports children's and youth teams of soccer and volleyball clubs in the Passau region by the donation of jerseys and balls and by financial contributions to team trips; in addition, InTiCom Systems pays for Board advertising in the Obernzell soccer stadium.

The Passau festival weeks have been sponsored by InTiCom Systems in the last three years: By financial contributions to one event each year, the purchase of a large contingent of tickets intended for employees and business partners, and lavish advertising in the festival programs.

By similar cultural sponsoring, the company has also supported the historic town party in Prachatice, the new production location in the automotive segment, since the financial year 2006. In the financial year 2007 the financial contributions will be raised.

The total annual amount InTiCom Systems dedicates to corporate citizenship is approximately 50,000 Euro at present.

Combined management report and Group management report for the financial year ended December 31, 2006

Business activity

InTiCom Systems is among Europe's market and technology leaders for products for the electrical and electronic industry on the basis of passive analog circuit technology and the inductive components it requires.

This technology finds application in products for fast data exchange in telecommunication (DSL, ADSL, VDSL; summarized as xDSL), in automobile network topologies, and in the fields of sensorics and electronics for the automobile industry.

For their functions, the transmission, filtering, and sending and receiving of electric signals, passive inductive components do not require an additional energy source, i.e. electricity

provided by power supply or battery, and they work virtually free of wear.

According to its own claim, InTiCom Systems combines comprehensive theoretical expertise with specific know-how acquired over many years of practical experience by the few experts for this technology still active in their profession worldwide.

With its developments and products, InTiCom Systems is busy in the following technology fields on the international market:

xDSL technology

For broadband Internet access via the existing and future telephone networks, InTiCom Systems develops, manufactures, and sells xDSL splitters to the distributors (service provider

side) and the triple play users (subscriber side). These products are based usually on most diverse specifications provided by present as well as potential customers: On the one hand, there are the national telephone companies, demanding splitters for the subscriber side; on the other hand, system suppliers to the national telephone companies order splitters for the service provider side from InTiCom Systems.

The actual market development in the field of xDSL technology continued to exceed all estimates and forecasts of the past in the financial year 2006 by far: By the end of the year 2006, in Germany alone roughly 14.1 million DSL connections were provided – thereby approximately 36 percent of all German households had a DSL con-

nection available. The share of Deutsche Telekom AG, including the socalled resellers, marketing Telekom DSL connections under their own brand names, was about 73 percent, leaving about 27 percent of all connections to competitors with their own networks. In addition to the market leader, almost all important competitors in Germany are supplied with xDSL splitters by InTiCom Systems.

Through customer relationships with major system suppliers, InTiCom Systems managed internationally to explore the markets for DSL as well as ADSL2+ (with transmission rates up to 16 Megabit) of Norway, Spain, and Italy.

Thus the company was able to more than compensate for the price decline of xDSL splitters in Germany: Due to ever-increasing unit numbers, InTiCom Systems profited from the continued German and European xDSL boom – despite the VDSL issue discussed at the beginning.

Automotive technology

In the field of automotive technology, InTiCom Systems develops, validates, and manufactures subsystems for RFID (Radio Frequency Identification) technology since May 2006 at the new, highly automated production site in the Czech Republic.

Among the applications are vehicle access authorization systems (remote keyless entry) and safety and monitoring systems such as tire pressure monitoring. Parallel to that, InTiCom Systems concerns itself with the recording, transmission and filtering of data in complex automotive network topologies, designated to replace the mainframe computer and control systems previously in use for their superior system stability.

In this new business field, the company was extremely successful: As soon as by the end of the year 2006, the company managed to win international automobile manufacturers up to the market leaders in the luxury and sports car segments (and their suppliers) as new customers.

Almost monthly new orders have been received since the start of production, both from existing and new customers. In order to stay abreast of this positive development, production space and manpower in Czech Prachatice (less than an hour's drive away from corporate headquarters in Passau or the machine development location Neufelden, Austria) will be doubled by mid-2007 again.

Inductive components/ Industrial electronics

In this field the company focuses on the development and production of customer specific inductive components in small and medium quantities, i.e. special solutions for electric and electronic devices.

In addition, InTiCom Systems developed the new business field industrial electronics in the past financial year. Examples for products in this business segment are transformers for transmission poles, manufactured by the customer's order in very small quantities. The company continues to have such special solutions in very small batches produced at the Croatian location; InTiCom Systems sold its 49 percent interest in the Croatian location to the majority stockholder in the past financial year.

Market and market conditions xDSL technology

In 2006 InTiCom Systems missed out on significant sales revenues due to the delayed VDSL network extension (initiated for the Soccer World Cup) – despite existing delivery contracts.

Background: The controversy on the issue whether this high-speed telecommunication technology needs to be regulated, and if so, within which legal framework. Since Germany's Federal Government has insisted on loose regulations by the deadline of March 28, 2007, the issue will probably be lead to a solution by the European Court of Justice in June 2007.

The Federal Government holds that the VDSL network facilitates entirely new services while the EU commission considers this network just an updated version of the existing technology and services.

As has already become apparent, the xDSL business will receive a massive market stimulus due to VDSL in the financial year 2007 and later which will benefit InTiCom Systems as market and technology leader tremendously, regardless of the regulation issue and the dispute's settlement. Deutsche Telekom schedules to have as many as 26 cities connected to the VDSL network by the end of 2007; in 2008 this number is supposed to be doubled.

Telekom also pushes the development of the so-called triple play via VDSL and ADSL2+ phone connections, making it possible by means of the Internet protocol to make phone calls, surf on the Internet, and watch TV, all at the same time. Deutsche Telekom alone plans to make 17 million households triple-play compatible together with its resellers until the end of 2007; the competition bets on triple play as well, mostly via ADSL2+.

That InTiCom Systems will participate in this business significantly is a fact: Since the beginning of 2007, the company has provided the system suppliers with VDSL splitters which are already being installed on the service provider side.

Automotive technology

The ever-increasing demand for more comfort and safety relevant fittings in automotive engineering, not only for luxury class vehicles but for mediumsized and compact cars as well, creates enormous growth potential for automotive electronics and thus also for radio frequency identification and network products, the likes of which have been successfully developed and manufactured by InTiCom Systems in large quantities at the new production location in the Czech Republic since May 2006.

In the medium and long term, the company will also concern itself with the future market of hybrid cars: Products for controlling and networking the different engines and powertrains are currently at the development stage. The so far very conservative forecasts of close to 450,000 hybrid automobiles in the Europe of the year 2010 do admittedly imply a certain amount of patience. However, the heated climate change discussion, taken up in February 2007 because of the corresponding UN report, is going to intensify the European car manufacturers' efforts towards catching up with the Asian competition, dominating the hybrid market by the end of 2006, as soon as possible.

Inductive components

The demand for standard components depends greatly on the economic situation of the electric and electronic industry and is also characterized by cutthroat competition, primarily due to suppliers in the Far East. The economical development and distribution of inductive components is therefore possible for InTiCom Systems only with relatively small quantities of specialized products. Because of the broad expert knowledge of ferrite material, molding and synthetic material injection molding, and the experiences made with winding technology, InTiCom Systems

is capable of supplying the market according to customer specifications.

Competition of InTiCom Systems

The development of xDSL splitters requires specialist know-how of materials, passive analog circuit technology, and the design of inductive components. This kind of knowledge, always maintained on a high level by InTiCom Systems through targeted staff marketing and the employees' intensive training, is matched only by a relatively small number of competitors.

Training the Prachatice staff, in employment since mid-February 2006, early on during the start-up stage of series production has been rewarded by the customers in the automobile industry with fast audits and production releases.

Positioning InTiCom Systems

With regard to all product segments covered by InTiCom Systems, the constant innovations, the rapid technological progress, and the rising expectations for performance parameters can only be met and achieved with the most recent and cutting-edge manufacturing technologies and state-of-the-art production machinery.

Having developed and manufactured part of its own production machinery ever since its foundation in the year 2000, the company stayed abreast of those requirements through 2006 consistently as well: The staff number of the development company founded in 2005 in Austria for that purpose was raised from four to ten until the end of 2006. In a concurrent measure, the capacity of product development in Passau was increased.

As it had in the past, the company continued to expand through 2006 in clearly and stringently planned steps, each promptly consolidated. After production capacity in Greece had been expanded considerably in 2005 in order to allow for the rapidly growing domestic and international markets for xDSL to be successfully worked and opened, the new production site for the automotive segment in the Czech Republic started its series production and broke even by the end of the year already.

The provision of new development capacity made a move to new premises at the Passau location necessary in the third quarter of 2006. The almost tripled floor space allows for continued additions to the development team in the future to safeguard continuing growth.

Internal management system

Within the framework of an internal management system, the profit margin was defined as the company management's central financial key figure. Among the non-financial performance indicators, the efficiency of internal processes, diverse technical key figures of quality control, and employee satisfaction are recorded above all. The quality management certification according to ISO/TS 16949:2002 safeguards the documentation and verifiability of measures for quality control. In this context, but also to push the employees' commitment, regular training courses are offered, and participation in measures for further advanced training is promoted. The implementation of environmental protection certifications for securing ecological standards is intended for the future as well.

Within the context of reporting and controlling, the development of all key figures and parameters is documented. In periodic meetings, the company management analyzes possible plan variances and discusses measures for achieving its objectives.

Business development

As most important supplier to the German telecommunication industry and market leader for DSL splitters, InTiCom Systems profited directly from the boom of DSL broadband connections in 2006 again through rising quantities. However, this success was clouded by the severe price deterioration of DSL splitters in Germany, generating sales revenues in the purely national splitter business almost six million Euro below the prior-year amount.

The international business, growing at the same time and providing the company with new customers, compensated for the decline in splitter prices.

Group sales development

At EUR 37.5 million, InTiCom Systems increased Group sales in 2006 by roughly 7 percent compared to the previous year (EUR 35.0 mil.). The main sales pillars were xDSL splitters for the subscriber and service provider side once again. The automotive electronics segment generated sales revenues of approximately EUR 3.7 million in 2006, inductive components contributed about TEUR 350 to Group sales.

Profit development

The Group net income came to roughly EUR 1.6 million in the past financial year, compared to EUR 2.2 million in 2005. The net income resulted in earnings per share of EUR 0.37 (2005: EUR 0.51), based on 4,287,000 shares outstanding.

The net profit margin of 4.2% turned out about a third below the prior-year level (6.3%), not least because of the significantly raised preparatory efforts within the context of capacity expansion, the advancement of the degree of automation, the setup of the production site for automotive technology in Czechia, and the enhancement of the machinery thus made necessary. The very good net profit margin – judging by these expenditures – was made possible by a significant increase of productivity in the separate product segments, a very stringent revenue-oriented cost management, clearly focused capital expenditure, and the company's high grade of liquidity.

Staff development

In 2006 the number of employees was raised from 102 as of January 1 to 155 by the end of the year. The personnel expense amounted to EUR 4.3 million as compared to the prior-year expense of EUR 3.1 million. The increased personnel expense is accounted for by the raised number of developers in Passau, the more than doubled number of machine developers of InTiCom Systems Austria, yet primarily by the staff development in Prachatice, the production location which took up production in May 2006, employing a staff of 41 by the end of the year.

The updated staff development indicates how rapidly the growth in Prachatice continues: In January 2007 the number of employees was 90

already, and by August it will be raised to about 150, coinciding with the second production hall's scheduled start of operation.

Remuneration system of Board of Directors and Supervisory Board The Supervisory Board decides the Board of Directors' remuneration by Supervisory Board resolution and conducts periodical reviews. The present remuneration is based on a Supervisory Board resolution of February 1, 2006. The remuneration considers the functions assumed by the individual member of the Board of Directors, his or her responsibilities, and the company's economic situation, and it orients its structure towards comparable companies. Accordingly, the members of the Board of Directors receive a fixed annual remuneration which is paid monthly. Contributions to the Board members' retirement provisions are made as well. The payment of contributions is made by means of a pension plan in the shape of a relief fund financed by deferred compensation. Fringe benefits essentially include perquisites in form of the provision of company cars to members of the Board of Directors. There are no variable remuneration components.

The Supervisory Board's remuneration is regulated in Section 11 of the Articles of Incorporation of InTiCom Systems and consists of a fixed portion and an attendance fee. The Annual General Meeting may decide on a remuneration of the Supervisory Board members which is oriented towards the company's retained earnings and thereby grant a variable remuneration. However, no use has been made of this possibility so far. The fixed remuneration of Supervisory Board members paid each year is TEUR 3. The chairman of the

Supervisory Board receives TEUR 5, the vice-chairman is paid TEUR 4. For attending the Supervisory Board meetings, each member receives EUR 500 per session. In addition, the members of the Supervisory Board are reimbursed for value added taxes on their Board activities and for possible expenses.

Research and development

Research and development expenses amounted to EUR 1.8 million in the financial year 2006, as opposed to EUR 1.3 million in the previous year. The increase in expenses is based primarily on the capacity increase of product development in Passau as well as additional capacities for the Group's in-house development towards the provision of the company's own manufacturing technologies.

Capital expenditure

Capital expenditures for property, plant and equipment came to EUR 9.1 million in the past financial year as compared to EUR 5.9 million in 2005. Principal recipients of these expenditures are the production site for automotive technology in the Czech Republic (costs for construction and machinery) as well as the provision of new development capacity in Passau, accompanied by the move to premises three times as large as the previous ones.

Non-current assets

Compared to the previous year (EUR 7.5 mil.), the non-current assets of InTiCom Systems rose to EUR 15.5 million in 2006. As has been mentioned before, this increase is due to the high capital expenditures for property, plant and equipment regarding production facilities. The intangible assets – most notably xDSL advancements and developments in the automotive

segment –, coming to EUR 1.2 million in 2005, increased to EUR 2.7 million.

Cash flow

The operating cash flow of EUR 2.6 million (2005: EUR 2.8 mil.) gives proof of the operating strength of InTiCom Systems AG once again. The reduced cash flow from operating activities of EUR 0.7 million (2005: EUR 1.4 mil.) is essentially due to inventories which increased by almost EUR 1.0 million over the previous year for a smooth production start in Prachatice. The capital expenditures for property, plant and equipment, greatly expanding capacities, were financed in part from the operating cash flow as well as from current bank loans. These are subject to variable interest rates, while the non-current loans have fixed interest rates,

partly reduced by promotion programs. The capital expenditure is therefore covered by solid mixed financing of equity and borrowed capital as well as the operating cash flow.

The Group's liquidity, comprised of securities marketable at any time (EUR 13.3 mil.) and cash and cash equivalents (EUR 0.5 mil.) added up to EUR 13.8 million in the year under report 2006, compared to the prior-year amount of EUR 10.7 million.

Equity

The stockholders' equity came to EUR 24.6 million as of balance-sheet date 2006 (2005: EUR 13.5 mil.), corresponding with a strengthened and very respectable equity ratio of roughly 65 percent (2005: 55 percent), guaranteeing the company's continued high reliability. The increase in equity primarily results from the capital increase realized in March 2006.

In the process of converting a part of the paid-in capital to capital stock, the stockholders were granted new stock dividends (so-called bonus stock) in the ratio 1:2. This means in the individual case that each stockholder now holds the triple amount of stocks, the calculated stock price has maintained only a third of its previous value, and the calculated value of each stock parcel and of InTiCom Systems AG as a whole has remained the same.

Risk management and risk report

According to Section 91 (2) AktG (Corporations Act), InTiCom Systems is obligated to maintain a system for risk management and early warning. The HGB (German Commercial Code) also stipulates reporting on the future development and the chances and risks involved.

The monitoring, analysis, and control of risks are therefore essential elements of management and guidance instruments. In periodic planning meetings, all business activities are examined for chances and risks, and on the basis of these findings targets are derived whose degree of realization is monitored by an EDP-supported controlling and reporting system. In the case of significant differences or changes of the market situation or the competition, these are recorded and analyzed immediately – and, in addition, the company's decision-makers are promptly informed. By the EDP software applied, the Board of Directors can actively access the specific risk status anytime and initiate adequate countermeasures.

Updates are realized constantly, and the monthly risk report is compiled from these individual presentations, depicting the separate potential risks, evaluating the probability of their occurrence, and estimating the potential amount of loss. The risks are derived from the current operating activities of the separate segments as well as from the corporate targets. Each of these risk reports is forwarded without delay to the Board of Directors to be dealt with by its members in the following Board meeting. The efficiency of the risk management as a whole is permanently monitored and analyzed. If potential for improvement is identified, the Board of Directors is notified and modifications are realized. Part of this

supervision is that the entire risk management and early warning system is documented consecutively and examined for suitability and fitness for its purpose.

Market and price risks

InTiCom Systems enjoys the advantage of moving in markets barely dependent on business fluctuations. This goes for xDSL as well as the automotive electronics segment. The xDSL broadband business has been a continuously booming market in the last five years – despite a weak economy –, and the improving general economic situation will result in increased demand in the present financial year. However, the enormous growth rates achieved in

the DSL business field expressed in quantities have been and will be accompanied by severe price deterioration: The mere DSL sales revenues of InTiCom Systems in Germany fell in the past year by roughly 6 million Euro. But by a development of the international business to sales of over 9 million Euro, this decline in prices could be more than compensated for.

In the past financial year, the company missed out on considerable revenues due to the unsolved question of regulation or non-regulation of the planned VDSL network, leading to a stop of investments in this future technology: The high expectations for an accelerated expansion of the DSL network in Germany could not be met.

However, the position of InTiCom Systems as Original Equipment Manufacturer (OEM) of splitters for the German VDSL network remains of high importance: Deutsche Telekom has been rigging its service provider side of the high-speed telecommunication network with InTiCom Systems technology since the beginning of 2007 despite the unresolved regulation issue. Accordingly, 250,000 VDSL filters a week have been manufactured in Prachatice apart from automotive electronics since January 2007.

Customer dependence

The company generates about 40% of the splitter revenues with one customer on the service provider side, roughly 60% with five commanding system manufacturers on the user side.

By an intensively pursued internationalization, InTiCom Systems has reduced its dependence on these key accounts: Service-provider side splitters have been developed for telecommunication companies e.g. in Greece, Croatia, and Norway, transferred to series production in 2005 already. Italy and Spain have been won as new markets thanks to a cooperation with a major customer in the financial year 2006.

Product diversification

Despite the tendency towards growth in the splitter business, unbroken for years: A decrease in demand, hardly conceivable at present, could have a very unfavorable effect on the company.

In order to counteract this risk, InTiCom Systems began the setup of the automotive electronics segment as its second main pillar early on. First developments in the field of Radio Frequency Identification and transmission via RFID were started with in 2004 already and advanced in the past financial year, such as vehicle entry authorization systems (remote keyless entry) and safety and monitoring systems (tire pressure monitoring or power steering). This concept, winning car manufacturers and their suppliers as customers through RFID has proven successful: In the meantime these customers have entrusted InTiCom Systems with development projects in the automotive field even beyond RFID technology (based on analog circuit technology). For example, the company now concerns itself with the recording, transmission, and

filtering of data in complex automotive network topologies.

For this product segment, InTiCom Systems has planned and built the new, highly automated production location in Czechia, which took up series production for numerous suppliers and leading European, American and Asian car manufacturers (and their suppliers) in May 2006 successfully: The location broke even by the end of the year 2006 already, so that the automotive segment will contribute a positive profit contribution to total sales in the financial year 2007 with rising sales revenues.

However, the pressure on prices the car manufacturers exert on their component suppliers could affect the margins of InTiCom Systems and impair the success of this business. Therefore an unchallenged technological top position is of the utmost importance because the company may possibly hold out against a mere pricing competition only to a limited extent.

The same goes for the xDSL business. Especially with regard to this aspect, the position InTiCom Systems holds as an Original Equipment Manufacturer of the German VDSL network gains in importance.

Technological risks

xDSL technology – Among other products, InTiCom Systems manufactures functional units which facilitate broadband Internet access by means of DSL splitter technology on the basis of analog and digital phone connections in copper cable networks.

Alternative solutions for that purpose which could jeopardize the business success of InTiCom Systems are based either on

• the TV cable network via cable modem,
• transmission via satellites, or
• conventional power lines, and:
• fiber optic cables as they have been run particularly in the East German federal states in the course of modernizing communication structures. These cables achieve the largest transmission capacities at present.

But: In the short and medium term, the costs for either the installation and operation of fiberglass networks connecting the entire federal territory or a technological update of the TV cable network would exceed those required for a technological update of the copper cable telephone networks by means of xDSL technology by far. And the powerline technology has hardly won a substantial number of users so far.

Even semiconductor technology which could be used for the separation of voice and data signals necessary for xDSL operation as a replacement for the passive analog circuit techno-

logy provided by InTiCom Systems xDSL splitters is currently not being offered at competitive prices, and it also requires the use of additional power sources.

Automotive electronics – The products and applications developed so far by InTiCom Systems for use in automotive electronics are based for the most part on RFID technology.

Besides RFID, alternative transmission methods such as Bluetooth or other technologies are possible. This could deflate the demand for products made by InTiCom Systems or necessitate additional development expenses.

Chances

Because of the company's growth, a constant know-how transfer takes place in each technology field to at least two technology experts in each case. Thus it is assured that staff problems such as medical conditions or movement of labor cannot jeopardize the continuity within each company segment.

The automobile industry attaches increasing importance to powerful suppliers which have located their development as well as their production in enlarged Europe. The decision InTiCom Systems has made for Europe, for establishing the product and machine development divisions in

Passau and in Austrian Neufelden, and for completing an almost isosceles triangle with distances of 80 kilometers each with the production site Prachatice, is appreciated and rewarded by our customers.

The proximity between development and production safeguards the necessary quality level and guarantees that all critical issues which could jeopardize the production start-up or the production of large unit numbers can be resolved in the shortest period of time – without protracted travel time, without communication difficulties, and at low costs.

InTiCom Systems Group management report | Subsequent events

Subsequent events

Currently new contracts with major car manufacturers and suppliers to the automobile industry are closed almost by the month.

In February 2007 InTiCom Systems received an order for the series production of keyless go antennas by a large global corporate Group: While InTiCom Systems has manufactured such antennas for several ranges of the renowned German corporate brand, the U.S. model ranges are to follow from the second half-year 2008. The volume amounts to approximately 1.2 million Euro at the start of production which covers an equipment rate of 15 percent of these model types – in the medium term the equipment rate is intended to be increased to 100 percent. Perhaps a second supplier will then be commissioned for reasons of security.

One month later, in March 2007, the company closed a contract for the supply of roughly 250,000 modules per annum for the so-called start-stop system of a major German car manufacturer. Start of production is midyear 2008 as well. Both agreements have contract terms of five years plus.

And further contracts are close to their conclusions. It appears that the production expansion scheduled for mid-2007 will be followed quickly by the next step. If necessary, this will be possible quickly and without difficulty: The infrastructure of the entire property in Prachatice is fully developed – an additional prefab production hall can be erected in three to four months at the most.

Outlook

For 2007 InTiCom Systems expects a significant increase in sales and profit over the past financial year. The year 2006 was characterized considerably by preparations and reinforcements of development, production, and not least of corporate organization in order to position the company for new growth impulses to occur in the year 2007. First sales contributions from the automotive segment in the current financial year clarify the increasing importance of the automotive segment as the second main pillar of InTiCom Systems. In the year 2007 the full-year effect will come to bear in the automotive segment for the first time – and will become the essential driving force of future development.

The upgrade of the German DSL network for higher transmission rates

(VDSL) failed to occur in 2006 to a large extent; thereby InTiCom Systems missed out on considerable sales potential in 2006. However, the field of VDSL still represents an enormous potential for InTiCom Systems as the development of the German VDSL network is only postponed, and especially due to the large number of system providers in the other European countries determined to expand their VDSL business activities much more. Experts predict growth rates for VDSL technology at least as high as those DSL technology has enjoyed.

Order development

The order backlog of InTiCom Systems came to EUR 13.0 million as of December 31, 2006 (2005: EUR 12.5 mil.), with a scope of four months. InTiCom Systems managed within a very short

time to supply seven car manufacturers with its products either directly or indirectly. The most recent order in the automotive segment by which InTiCom Systems has made the step from component to system supplier for the very first time will prove decisive for the future. The pipeline of the considerably increased development capacities contains further innovative solutions the automobile industry has already shown clear interest in. Efforts are already being made for future developments of interference suppression for audio systems or concepts for the control of hybrid technology together with the car manufacturers. InTiCom Systems expects to generate sales in this field of EUR 50 to 60 million within the next 5 to 7 years.

InTiCom Systems Consolidated financial statements

Consolidated financial statements

for the financial year ended December 31, 2006

Consolidated income statement

for the financial year ended December 31, 2006

Notes	Financial year in TEUR	Previous year in TEUR
Sales	37,483	35,034
Other operating income 5	242	330
Changes in finished goods and work in process inventories	-39	-537
Other own costs capitalized	1,896	1,589
Material expense	29,629	27,732
Personnel expense	4,291	3,111
Depreciation	1,054	654
Other expenses 5	2,308	1,453
Operating income	2,300	3,466
Finance expenses	176	49
Other finance income	296	167
Earnings before taxes	2,420	3,584
Income taxes 6	851	1,389
Net income	1,569	2,195
Earnings per share in EUR (4,287,000 shares) 7	0.37	0.51

Cash Flow

Consolidated cash flow statement of InTiCom Systems

		Financial year in TEUR	Previous year in TEUR
	Net income	1,569	2,195
+	depreciation	1,054	654
+	other non-cash transactions	242	146
-	addition/disposal of assets not attributable to investing or financing activities
	deferred taxes	-183	-120
	inventories	-253	707
	trade receivables	-3,845	-916
	other assets	1,749	-2,151
+	addition/disposal of liabilities not attributable to investing or financing activities
	deferred taxes	804	498
	trade payables	1,519	-1,227
	other liabilities	-1,911	1,568
	Cash flow from operating activities	745	1,354
-	capital expenditures for intangible assets	-1,705	-1,012
-	capital expenditures for property, plant and equipment	-7,393	-4,910
+	disposal of financial assets	33	0
-	addition of financial assets within the context of current financial planning	-4,095	-9,156
	Cash flow from investing activities	-13,160	-15,078
+	payments-in from taking out loans and entering into finance lease agreements	2,875	4,918
-	payments-out for repayment of loans and in fulfillment of finance lease agreements	-767	0
+	payments-in from contributions to capital	9,323	0
	Cash flow from financing activities	11,431	4,918
	Cash flow total	-984	-8,806
	thereof tax expense	-528	-102
	thereof interest expense	-176	-49
	thereof interest income and other income	240	112
	Cash and cash equivalents at beginning of period	1,529	10,335
	Cash and cash equivalents at end of period*	545	1,529

* see item 12 in the notes – cash and cash equivalents

Consolidated balance sheet

of InTiCom Systems according to IFRS/IAS

Assets		Financial year	Previous year
	Notes	in TEUR	in TEUR
Non-current assets
Intangible assets
Other intangible assets		2,710	1,180
Property, plant and equipment		12,813	6,299
Financial assets	8	0	33
Deferred taxes	6	595	412
Total non-current assets		16,118	7,924
Current assets
Marketable securities	9	13,251	9,156
Inventories	10	883	630
Trade receivables	11	6,809	2,964
Tax assets		242	0
Other current receivables	11	321	2,312
Cash and cash equivalents	12	557	1,546
Total current assets		22,063	16,608
Total assets		38,181	24,532

	Notes	in TEUR	Financial year in TEUR	Previous year in TEUR
Equity
Capital stock	13		4,287	1,300
Paid-in capital			15,088	8,640
Other reserves
Surplus reserve	13	4,963		3,394
Currency translation reserve	13	276	5,239	146
Total equity			24,614	13,480
Non-current liabilities
Non-current interest-bearing liabilities			1,875	0
Other non-current liabilities	14		2,367	3,134
Deferred taxes			1,580	776
Total non-current liabilities			5,822	3,910
Current liabilities
Other current accrued liabilities	15		178	136
Income tax liabilities	15		3	1,045
Current interest-bearing liabilities	15		3,012	2,017
Trade payables			4,354	2,835
Other current liabilities	15		198	1,109
Total current liabilities			7,745	7,142
Total equity and liabilities			38,181	24,532

Equity and liabilities

Consolidated statement of changes in non-current assets

for the financial year ended December 31, 2006

		Acquisition costs/ Production costs				Accumulated depreciation	Book values		Depreciation over the finan cial year
		1/1/2006 TEUR	Additions TEUR	Disposals TEUR	Transfers TEUR	2006 TEUR	12/31/2006 TEUR	12/31/2005 TEUR	2006 TEUR
I.	Intangible assets
1.	Concessions, industrial proprietary rights and similar rights and assets as well as corresponding licenses	1,375 1,375	1,704 1,704	19 19	0 0	350 350	2,710 2,710	1,180 1,180	174 174
II.	Property, plant and equipment
1.	Land and buildings	0	79	0	0	0	79	0	0
2.	Buildings under construction	473	2,561	0	-30	0	3,004	473	0
3.	Furniture and fittings	0	110		30	3	137	0	3
4.	Technical equipment and machinery	5,515	1,395	86	641	1,723	5,742	4,449	757
5.	Vehicles	0	29	14	0	1	14	0	3
6.	Other facilities, furniture and office equipment	364	294	78	0	157	423	245	117
	7. Advance payments and construction in process	1,130	2,925	0	-641	0	3,414	1,132	0
		7,482	7,393	178	0	1,884	12,813	6,299	880
	III. Financial assets
	1. Investments	33	0	33	0	0	0	33	0
									0
		8,890	9,097	230	0	2,234	15,523	7,512	1,054

Consolidated statement of changes in equity according to IFRS/IAS

	Capital stock TEUR	Paid-in capital TEUR	Surplus reserve TEUR	Currency trans- lation reserve TEUR	Total equity TEUR
as of 1/1/2005	1,300	8,640	1,199	0	11,139
Currency translation reserve				146	146
Net income 2005			2,195		2,195
as of 12/31/2005	1,300	8,640	3,394	146	13,480
as of 1/1/2006	1,300	8,640	3,394	146	13,480
Capital increase	129	9,306			9,435
Capital increase from the company's own resources	2,858	-2,858			0
Currency translation reserve				130	130
Net income 2006			1,569		1,569
as of 12/31/2006	4,287	15,088	4,963	276	24,614

Notes to the consolidated financial statements of InTiCom Systems AG for the financial year 2006

1. General corporate information

The company was founded on August 16, 2000 and had its IPO on November 8, 2004.

InTiCom Systems specializes in developing, manufacturing, and selling products for the electric and electronic industry on the basis of passive analog circuit technology.

Many function requirements defined by new developments, e.g. broadband technology for fast data transfer (DSL) or RFID technology for use in automotive electronics, are met by passive analog circuit technology particularly well.

The corporate headquarters is located in Passau, under the business address Spitalhofstrasse 94, 94032 Passau, Germany. The corporation has investments in companies in Greece, Austria, and Czechia.

InTiCom Systems generated Group sales of TEUR 37,483 in the past financial year (py: TEUR 35,034), resulting in a Group net income of TEUR 1,569 (py: TEUR 2,195).

2. Accounting policies and valuation methods

2.1. Accounting standards The consolidated financial statements have basically been prepared by applying the acquisition cost method.

Exceptions are marketable securities (market value), valuated at the specific time values. The consolidated financial statements have been prepared in Euro. If not stated otherwise, all values are rounded to thousand Euro (TEUR).

Declaration on compliance with IFRS

The consolidated financial statements of InTiCom Systems and its subsidiaries have been prepared in compliance with the International Financial Reporting Standards (IFRS), as applicable in the European Union, and the additional applicable provisions of commercial law according to Section 315a Abs. 1 HGB (Commercial Code).

Principles of consolidation

The consolidated financial statements comprise the financial statements of InTiCom Systems and its subsidiaries as of December 31 of each financial year. In applying consistent accounting policies and valuation methods, the subsidiaries' financial statements are prepared as of the same balance-sheet date as the parent company's financial statements.

All Group-internal balances, transactions, income, expenses, gains, and losses originating from Group-internal transactions included in any asset's book value are eliminated to the full amount.

Subsidiaries enter full consolidation from the time of acquisition, i.e. as of the date the Group obtains control over the subsidiary. The inclusion in the consolidated financial statements ends as soon as the parent company can no longer exercise control over the subsidiary.

2.2. Changes in accounting policies and valuation methods

The accounting policies and valuation methods applied basically correspond with the policies and methods applied in the previous year. In compliance with IAS 1, the structure of the consolidated balance sheet has been arranged according to maturities.

2.3. Summary of the essential accounting policies and valuation methods

Foreign currency translation

The consolidated financial statements are prepared in Euro, the Group's functional and accounting currency. Each company within the Group determines its own functional currency. The items included in each company's financial statements are valuated in applying this functional currency. Foreign currency transactions are initially translated at the exchange rate of functional currency and foreign currency valid as of the day of the business transaction. Monetary assets and liabilities in a foreign currency are

translated into the functional currency at closing rates as of balance-sheet date. All foreign exchange rate differences are stated in the net income for the period. Non-monetary items valuated at their attributable time values in foreign currency are translated at the exchange rate valid as of the time of determining the attributable time value.

The Czech subsidiary's functional currency is the Czech Korona. Assets and liabilities of this subsidiary are translated for the accounting of InTiCom Systems (Euro) at the exchange rate as of balance-sheet date. Income and expenses are translated at the financial year's weighted average rate. The exchange rate differences resulting from the translation are recorded as separate components of equity. In the case of the sale of a foreign business enterprise, the cumulative amount recorded for this foreign business enterprise in equity is eliminated in the income statement.

Property, plant and equipment

Property, plant and equipment are capitalized at acquisition or production costs – with the exception of ongoing maintenance costs – less cumulative systematic depreciation and impairment expenses. Costs include costs for the replacement of a part of such an item by the time the costs incur if the valuation criteria are fulfilled.

The book values of property, plant and equipment are examined for impairment as soon as indicators show that an asset's book value may exceed its recoverable amount.

A tangible asset is eliminated either at its disposal or at the time no economic benefit is expected from the asset's continued use or its sale. Gains or losses resulting from the asset's elimination are determined by the difference between net sale proceeds and book value, and they are recorded in the income statement for the period in which the asset is eliminated.

The assets' residual values, useful lives, and depreciation methods are reviewed at the end of each financial year and adjusted if necessary. Systematic depreciation is realized according to the straight-line method over the following useful lives:

• Equipment Plants and office buildings 10 years
• Technical facilities and machines 5–8 years
• Vehicles and other facilities, furniture and office equipment 3–14 years

The costs of any major machine maintenance are recorded in the asset's book value as far as the valuation criteria are fulfilled. As of balance-sheet date, there were contractual obligations for the purchase of property, plant and equipment to the amount of TEUR 230.

Subsidies

Subsidies (investment grants) are deducted from the acquisition costs for the asset the grant has been applied for. A disclosure of the subsidies under liabilities is not provided. In the financial year 2006 the company has received no investment grants.

Borrowing costs

Borrowing costs are recorded as expenses in the period in which they incur.

Intangible assets

Separately acquired intangible assets are valuated for first-time valuation at acquisition or production costs. After their initial valuation, intangible assets are valuated at their respective acquisition or production costs less cumulative depreciation and all accumulated impairment expenses. Self-created intangible assets are not capitalized with the exception of capitalized development costs. Related costs are recorded in the income statement for the period in which they incur.

First it must be established if the intangible assets have limited or unlimited useful lives. Intangible assets with limited useful lives are depreciated over their economic useful lives and examined for possible impairment as soon as indicators suggest that the intangible

asset might be impaired. The depreciation period and the depreciation method for an intangible asset with a limited useful life are reviewed at the end of each financial year at the least. If an asset's expected useful life or an asset's expected depreciation curve has changed, a different depreciation period or a different depreciation method is applied. Changes of this kind are dealt with as changes of an estimate.

Research and development expenses

Research expenses are charged to expense in the period in which they have incurred. An intangible asset resulting from development within the framework of a single project is included only if the Group can prove both the technical feasibility of the intangible asset's completion, so that it can either be used within the Group or sold, and the intent to complete the intangible asset and to either use or sell it. The Group must also substantiate the generation of future economic benefit by this asset, the availability of resources required for the asset's completion, and the capability to reliably establish the expenses incurred by the intangible asset during its development. After the initial valuation of development expenses, the acquisition cost method is applied, according to which the asset is to be valuated at acquisition costs less cumulative depreciation and accumulated impairment expenses. The capitalized amounts are

depreciated over the term for which sales revenues are expected from the respective project.

The capitalized amount of development expenses is reviewed for impairment once a year if the asset is not yet in use or by the time indicators for impairment arise during the financial year.

Investments in affiliated companies

Investments in an affiliated company are capitalized according to the equity method. An affiliate is a company over which the Group exercises significant control, yet which is neither a subsidiary nor a joint venture.

According to the equity method, investments in an affiliated company are stated in the balance sheet at acquisition costs plus changes of the Group's portion of the affiliated company's net assets which have occurred after the acquisition. The goodwill connected to an affiliated company is included in the investment's book value and not depreciated systematically. In applying the equity method, the Group establishes whether an allowance for additional impairment expense is necessary with regard to the Group's net investments in the affiliated company. The income statement contains the Group's share in the affiliated company's success. Changes charged directly to the affiliated company's equity are also charged directly to the Group's equity to the

amount of the Group's investment and also – if necessary – reported in the consolidated statement of changes in equity.

Balance-sheet date and accounting policies and valuation methods for comparable business transactions and events of the affiliated company and the Group are consistent.

Impairment of assets

The Group determines at each balancesheet date if there are indicators for an asset's impairment. If there are those indicators or if an annual review for an asset's impairment is necessary, the Group makes an estimate of the recoverable amount. An asset's recoverable amount is the higher of both amounts, the attributable time value of an asset or of a cash-generating unit less costs of sale and the value in use. The recoverable amount is to be determined for each single asset unless an asset does not generate cash flow largely independent of cash flows generated by other assets or other groups of assets. If the asset's book value exceeds its recoverable amount, the asset is considered impaired and depreciated to its recoverable amount. To determine the value in use, the estimated future cash flows are discounted to their cash value in consideration of a discount rate before taxes which reflects the present market expectations regarding the interest effect and the asset's specific inherent risks.

At each balance-sheet date the Group verifies if there are indicators for impairment expenses recorded in previous periods under report to no longer exist or to exist only to a lesser amount. If there is such an indicator, the recoverable amount is estimated. A previously recognized impairment expense is to be eliminated if a change in the estimate has occurred since the recognition of the most recent impairment expense which has been considered for determining the recoverable amount. If such is the case, the asset's book value is to be raised to its recoverable amount. This increased book value must not exceed the book value which would arise after consideration of the depreciation if no impairment expense had been recognized in the years before. Such a gain in value is to be reported in the income statement for the period immediately. After a gain in value has been stated, the depreciation expense is to be adjusted for future reporting periods in order to allocate the asset's adjusted book value, less a possible residual book value, systematically to its remaining useful life.

Financial investments and other financial assets

According to IAS 39, financial assets are classified as financial assets valuated at attributable time values affecting the net income, loans and receivables, investments held to final maturity, or financial assets held as available-for-sale. Upon their initial valuation, financial assets are valuated at their attributable time values. The

Group establishes the classification of its financial assets with the first-time valuation and reviews this classification at the end of each financial year, as far as this is admissible and adequate.

In the case of customary acquisitions and sales of financial assets, the valuation is carried out as of the trading day, i.e. the day the company has assumed the obligation to purchase or sell the asset.

Financial assets valuated at attributable time values affecting the net income

Financial assets classified as held for trading are included in the category "financial assets valuated at attributable time values affecting the net income". Financial assets are classified as held for trading if they have been acquired with the intent of sale in the near future.

Inventories

Inventories are valuated at their acquisition or production costs or the lower recoverable net amount.

Costs incurred by delivering inventories to their current location and by realizing their present condition have been capitalized as follows:

• Raw materials: according to actual consumption
• Finished goods and work in process: Direct material and labor costs as well as adequate portions of manufacturing overhead based on the production facilities' regular capacity regardless of borrowing costs

The recoverable net amount is the estimated recoverable amount as attainable in the regular course of business less estimated costs for completion and estimated necessary distribution costs. .

Trade receivables and other receivables

Trade receivables, usually bearing a term of 14 to 60 days, are valuated at their original invoice amount less an allowance for potential credit losses. An allowance is made if there is objective substantial indication for the Group not to be able to collect the debt. Receivables are eliminated as soon as they are considered bad debts.

Cash and cash equivalents

Cash and current investments recorded in the balance sheet include cash on hand, cash in banks, and current investments with original maturities of less than three months.

For the purpose of preparing the consolidated cash flow statement, cash and cash equivalents include cash as defined above, current investments, and current account advances.

Leasing agreements

The statement if a certain agreement is or contains a leasing agreement is made on the basis of the agreement's economic matter and requires an appraisal whether the completion of a contractual agreement is dependent on the use of a certain asset or certain assets and if the agreement allows for the right to use said asset or assets.

Group as lessee

Finance lease agreements, by which essentially all risks and chances inherent in the ownership of the assigned asset are transferred to the Group, are capitalized as of the beginning of the leasing agreement at the leased item's attributable time value or at the cash value of the minimum lease payments if the lower amount. Lease payments are divided in their components finance expenses and repayment of lease debt so that the remaining residual book value of the lease debt is charged with a constant interest rate. Finance expenses are charged directly to expenses.

Lease payments for operating lease agreements are charged to expenses over the leasing agreement's term under the straight-line method.

Provisions

Provisions are made if the Group has a current obligation (statutory or factual) with historic origins, the disposal of Group resources of economic use for the fulfillment of the obligation appears probable, and a reliable estimate of the obligation's amount is possible. Insofar as the Group expects at least partial reimbursement for a provision charged to expenses (e.g. in the case of an insurance policy), the reimbursement is recognized as a separate asset only if the reimbursement is all but certain. The expense for making the provision is recognized in the income statement less the reimbursement amount. If the interest effect is material, provisions are discounted at an interest rate before taxes which accounts for the debt's specific risks if applicable. In the case of a discount, the provision's increase due to the time lapse is stated as interest expense.

Liabilities and current interestbearing payables

Liabilities and current interest-bearing payables are valuated at carried forward acquisition costs, i.e. their valuation occurs at the amounts of their repayment or fulfillment. Their elimination is realized under the straightline method or corresponding to the fulfillment of the obligation.

Income recognition

Income is recognized by the time it appears probable that the value in use will benefit the Group and the amount of the income can be determined reliably. In addition, the following valuation criteria must be fulfilled for realizing the income:

Sale of goods and products

Income is recognized by the time the risks and chances inherent in the sold goods and products have passed over to the purchaser.

Interest income

Income is recognized by the time interest has incurred.

Dividends

Income is recognized with the accrual of the Group's legal claim for payment.

Taxes Effective tax relief claims and tax liabilities

Effective tax relief claims and tax liabilities for the ongoing period and for previous periods are to be valuated at the amount to which tax relief from the tax authorities or tax payments to the tax authorities is expected. The calculation of the amount is based on the tax rates and tax laws in effect as of balance-sheet date or to be in effect in the near future.

Deferred taxes

The recognition of deferred taxes is carried out by applying the asset and liability method to all temporary differences between an asset's or liability's valuation in the balance sheet and the tax valuation as of the balance-sheet date.

Deferred tax liabilities are recognized for all taxable temporary differences.

Deferred tax assets are recognized for all tax-deductible temporary differences, not yet realized tax loss carry-forward, and unrealized tax credit to the amount it appears probable that there will be taxable income against which the deductible temporary differences and the unrealized tax loss carry-forward and tax credit can be used.

The book value of deferred tax assets is reviewed as of each balance-sheet date and reduced to the extent it appears no longer probable that sufficient taxable income will be available against which the deferred tax asset can be made use of entirely or in part. Not recognized deferred tax assets are reviewed as of each balance-sheet date and valuated at the amount it has become probable that future taxable income will make the realization of the deferred tax asset possible.

Deferred tax assets and liabilities are calculated by applying the tax rates expected to be in effect for the period in which an asset is realized or an obligation is fulfilled. In doing so, those tax rates (and tax provisions) are applied which are either in effect or announced as of the balance-sheet date.

Income taxes on items charged directly to equity are recognized in the statement of changes in equity, not in the income statement.

Deferred tax assets and deferred tax liabilities are offset against each other if the Group has an enforceable claim for the offset of effective tax relief claims against effective tax liabilities and these regard to income taxes on the same tax subject, raised by the same tax authority.

Value added tax

Sales revenues, expenses and assets are valuated after the deduction of value added tax. Exceptions to this procedure are as follows:

• If value added tax accrued by the purchase of goods or services cannot be collected by the tax authorities, the value added tax is recognized as part of the asset's production costs or part of the expenses; and
• receivables and payables are recognized with the included value added tax amounts.

The value added tax amount reimbursed by or paid to the tax authority is recognized in the balance sheet under receivables and payables.

Earnings per share

The basic/diluted earnings per share are determined by dividing the operating income attributable to the common stockholders by the weighted average number of common stocks outstanding over the period.

Subsequent events

Subsequent events, occurring after the balance-sheet date and providing additional information on the corporate situation as of balance-sheet date (events leading to adjustments), are recognized in the balance sheet. Subsequent events not leading to any adjustments are reported in the notes to the consolidated financial statements if material.

Time of release for publication The Board of Directors of InTiCom Systems decided on March 16, 2007 that the company's consolidated financial statements as of December 31, 2006 can be forwarded to the Supervisory Board.

3. Segment reporting

The Group is operated as a onesegment business. The Group's business activity basically concerns only one segment at present. The number of segments may increase if the company introduces new products or services or if a segment fulfills the criteria for materiality.

4. Basis of consolidation and Group changes

As of the balance-sheet date, three foreign subsidiaries were included in the consolidated financial statements besides the parent company. These consolidated companies are subsidiaries with an investment rate of 100 percent.

In the financial year 2006 the equity investment in ITS Components d.o.o., Ludbreg, Croatia, was sold at a net selling price of TEUR 33. This disinvestment resulted in a disposal of financial assets to the amount of TEUR 33 and a balanced result in the income statement.

The subsidiaries are as follows:

Subsidiaries and affiliated investments

Company name and location	Stock share in %	Equity TEUR	Profit/Loss TEUR
InTiCom Components GmbH, Thessaloniki (Greece)	100	263	2
InTiCom Systems Ges.m.b.H., Neufelden (Austria)	100	101	80
InTiCom Systems s.r.o. Prachatice (Czechia)	100	5,094	-296

5. Other income and expenses

5.1. Other income

	2006 in TEUR	2005 in TEUR
Capital gains	153	248
Other operating
income	89	82
	242	330

5.2. Other expenses

	2006 in TEUR	2005 in TEUR
Occupancy costs	350	154
Insurance premiums, contributions, public charges	146	74
Repairs, maintenance	9	24
Vehicle expenses	190	147
Advertising costs, travel expenses	328	189
Delivery costs	228	216
Other operating expenses	1,057	649
	2,308	1,453

6. Income taxes

The essential components of the current income tax expenses for the financial years 2006 and 2005 are as follows:

Income taxes

	2006 in TEUR	2005 in TEUR
Effective income taxes	118	1,011
Deferred income taxes
Accrual and conversion of temporary differences	733	378
	851	1,389

The income tax rate depends on each consolidated company's individual business conditions. The determination of a weighted anticipated average tax rate is based on the tax rates in effect since January 1, 2006. The reconciliation of current income tax

expense and the product of income for the period and applicable Group tax

rate for the financial years 2006 and 2005 is made up as follows:

Effective tax expense

	2006 in TEUR	2005 in TEUR
Earnings before taxes	2,420	3,584
Theoretical tax expense based on 38.89%	941	1,394
Other tax effects	-90	-5
Effective tax expense	851	1,389

Deferred income taxes

As of the balance-sheet date, deferred income taxes are made up as follows:

Deferred income taxes		Consolidated balance sheet		Consolidated IS
	2006 in TEUR	2005 in TEUR		2006 in TEUR	2005 in TEUR
Deferred tax liabilities from capitalization of non-current assets	1,523	680		844	402
Revaluation of financial assets held as available-for-sale at attributable time values	57	96		-40	96
	1,580	776
Deferred tax assets from IPO	401	289		-	-
Capital consolidation	3	3		0	0
Tax loss carry-forward	95	31		-64	-31
from consolidated interim profits	96	89		-7	-89
	595	412
Deferred income taxes				733	378

7. Earnings per share

The basic earnings per share are determined by dividing the income attributable to the parent company's common

stockholders by the weighted average number of common stocks outstanding over the year under report.

The basic/diluted earnings per share are as follows:

Earnings per share

	2006 in TEUR	2005 in TEUR
Net income	1,569	2,195
Weighted average of stocks outstanding (in thousand stocks)	3,175	1,300
Earnings per share (EUR)	0.49	1.69

During the time between the balancesheet date and the preparation of the consolidated financial statements, no transactions involving common stock or potential common stock were made.

8. Investments in affiliated companies

Investments in affiliated companies The Group held an interest of 49% in ITS Components GmbH, Varazdin (Croatia). This company manufactures and sells products in the field of electronic components and systems and provides related services.

In addition to the Group's internal production, a part of production is covered by third-party supply. Within the context of third-party supply, ITS Components GmbH competes directly with other suppliers of InTiCom Systems. Apart from that, the Group does not pursue other relevant business interests with this investment.

The classification of this investment as affiliated company was based solely on the possibility of exerting decisive influence based on the investment. The Group was neither able nor was there an opportunity to decide the financial and business policies of ITS Components GmbH in the Group's interest independently or together with others in a common interest. Subsequent to the sale the company has held neither a direct nor an indirect interest.

9. Marketable securities

As of the balance-sheet date, the

Group held the following marketable securities:

Marketable securities

	Market value at acquisition in TEUR	Unrealized losses in TEUR	Unrealized gains in TEUR	Market value at end of period in TEUR
Stocks	375	9	40	406
Fixed-interest securities	8,151	89	48	8,110
Investment funds	4,706	34	63	4,735
	13,232	132	151	13,251

In the financial year 2006 gains of TEUR 229 were realized (2005: TEUR 4). Regarding the realization of gains through sale, marketable securities are subject to the customary market risks.

2006

2005

10. Inventories

No expenses for impairment were recognized in valuating inventories in 2006 (2005: TEUR 0).

Inventories

	in TEUR	in TEUR
Raw materials (valuated at acquisition costs)	450	159
Work in process (valuated at production costs)	211	46
Finished goods (valuated at production costs)	222	425
Total inventories (valuated at acquisition/production costs	883	630

or lower recoverable net amount)

11. Trade receivables and other current receivables

Trade receivables are not interestbearing. In the financial year no allowances for credit loss were necessary (2005: TEUR 0).

Other current receivables

	2006 in TEUR	2005 in TEUR
Accruals	12	1
Value added tax	164	917
Receivables against affiliated companies	0	1,330
Other current receivables	145	64
	321	2,312

12. Cash and cash equivalents

Cash and cash equivalents

	2006 in TEUR	2005 in TEUR
Cash in banks	554	1,535
Cash on hand	3	11
	557	1,546

Cash in banks bears interest at variable interest rates for daily terminable accounts. The attributable time value of cash and cash equivalents comes to EUR 557,396.76 (2005: 1,546,145.67).

As of balance-sheet date the Group has credit limits to the amount of TEUR 3,700 not taken advantage of at its disposal (2005: TEUR 2,265), all required conditions for the usage of which are already fulfilled. The effective interest rates are between 5.0 and 7.8% (2005: 5.0 – 7.3%).

For the preparation of the consolidated cash flow statement, the holding of cash and cash equivalents as of balance-sheet date is made up as follows:

	2006 in TEUR	2005 in TEUR
Cash in banks	557	1,546
Current account advances	-12	-17
	545	1,529

13. Capital stock and reserves

The capital stock is divided into 4,287,000 non-par bearer stocks fully entitled to dividend.

With the entry in the Commercial Register on March 20, 2006, a capital increase by EUR 129,000.00 from EUR 1,300,000.00 to EUR 1,429,000.00 within the framework of authorized capital was realized. Transaction expense incurred to the amount of TEUR 288 by the capital increase. The Annual General Meeting of May 18, 2006 decided the capital stock's increase by EUR 2,858,000.00 from EUR 1.429.000,00 to EUR

4,287,000.00 by stockholders' resolution. The capital increase was financed from the company's own resources and found entry in the Commercial Register on May 24, 2006.

The Board of Directors is authorized by stockholders' resolution of September 6, 2004 to increase the capital stock with the Supervisory Board's consent until September 6, 2009 against contributions in cash or contributions in kind, once or several times, by up to EUR 600,000.00 under preclusion of the stockholders' subscription rights (authorized capital 2004/I). The authorized capital originating from September 6, 2004 (authorized capital 2004/I) amounts to EUR 471,000.00 after partial use.

Other reserves include the following items:

	2006 in TEUR	2005 in TEUR
Surplus reserve	3,394	1,199
Net income	1,569	2,195
	4,963	3,394
Currency translation reserve	276	146
	5,239	3,540

Exchange rate differences

The currency translation reserve serves the recognition of differences from the translation of the financial statements of foreign subsidiaries.

14. Other non-current liabilities

Other non-current liabilities consist solely of obligations from finance lease agreements. The effective interest rate is at 4.2% with terms until the year 2009.

15. Current liabilities

Provisions and tax liabilities

	2005 in TEUR	Consumption in TEUR	Withdrawal in TEUR	Allocation in TEUR	2006 in TEUR
Outstanding accounts	62	62	0	64	64
Personnel expenses	52	52	0	77	77
Others	22	22	0	37	37
Provisions	136	136	0	178	178
Income tax liabilities	1,045	1,045	0	3	3

Current interest-bearing liabilities

	Effective interest rate in %	Maturity	2006 in TEUR	2005 in TEUR
Current account advances	5.0–7.8	on demand	12	17
Current bank loans	4.0	1–3 months	3,000	2,000
			3,012	2,017

Current account advances are subject to variable interest rates within one

year while current loans have fixed rate agreements valid until they mature.

Other current liabilities

	2006 in TEUR	2005 in TEUR
Deferrals	1	10
Value added tax	0	853
Other current liabilities	197	246
	198	1,109

Other current liabilities and trade payables bear no interest and usually mature within 10 to 60 days.

16. Liabilities from rental and leasing agreements and other financial liabilities

Liabilities from operating lease agreements and rental agreements

The Group has entered into leasing or rental agreements for various cars, technical facilities, and business premises. The agreements have average contract terms between 3 and 10 years and usually do not contain extension options.

No obligations are imposed on the lessee by the conclusion of these leasing agreements.

As of the balance-sheet date there are the following future minimum payment obligations based on non-cancelable contracts

Minimum lease payment obligations

	thereof rental in TEUR	thereof leasing in TEUR
2007	281	100
2008	176	52
2009	176	29
2010	176	0
2011	172	0
after	816	0
	1,797	181

Cash value of

TEUR

856 778 670

2,304

minimum lease payments

Minimum lease payments

TEUR

890 842 754

2,486

-182 2,304

Liabilities from finance lease agreements

The Group has entered into finance lease agreements for technical facilities. The agreements contain purchase options except for the case of full amortization. The future minimum payment obligations based on finance lease agreements can be related to their cash values as follows:

17. Essential stockholders and related parties

Board of Directors Maria Grohs Materials management, marketing and sales

Dr. Paul Grohs Development and production

Dieter Schopf Finances, administration and human resources

Supervisory Board

2006 2007 2008

Dr. Wulfdieter Braun Chairman of the Supervisory Board, Passau; management consultant

Minimum lease payment Less interest expense based on discounting

Karl Kindl

Vice-chairman of the Supervisory Board, Hauzenberg; entrepreneur Member of the Supervisory Board of DES Data Empire Systems AG, Munich

Harald Nöth

Munich; member of the Board of Directors of DES Data Empire Systems AG, Munich

Remuneration report

The remuneration report comprises the principles applied for the determination of the remuneration of the Board of

Directors of InTiCom Systems and explains amounts and structure of the Board remuneration.

In addition, remuneration principles and amounts regarding the members of the Supervsiory Board are described.

The report complies with the recommendations of the German Corporate Governance Code and contains statements which, according to the stipulations of German business law extended by the Directors' Remuneration Disclosure Act ("VorstOG"), are constituents of the notes to the consolidated financial statements in accordance with Section 285 HGB or the Group management report in accordance with Section 289 HGB.

Remuneration of the Board of Directors

The Supervisory Board is authorized to determine the remuneration of the Board of Directors. In determining the remuneration, the Supervisory Board members consider the company's size and business activity, its economic and financial situation, as well as the remuneration amount and structure implied by comparable companies. Furthermore, the contributions and responsibilities of the individual members of the Board of Directors are taken into account. The remuneration amount is customary, and it is intended to provide an incentive for successful work.

In 2006 the Board remuneration included two components:

a) a fixed annual remuneration,

b) pension provision contributions.

The fixed remuneration is paid as a monthly salary. It contains a cash portion and fringe benefits. The fringe benefits include perquisites in form of the provision of company cars.

In detail the following amounts have incurred:

Board of Directors

in EUR	Year	Fixed remuneration	Fringe benefits	Total remuneration
Dieter Schopf	2006	192,879	18,007	210,886
	2005	165,712	18,007	183,719
Maria Grohs	2006	192,796	12,054	204,850
	2005	166,240	12,054	178,294
Dr. Paul Grohs	2006	192,560	12,894	205,454
	2005	163,582	12,894	176,476
Total Board	2006	578,235	42,955	621,190
	2005	495,534	42,955	538,489

In the previous year, the former member of the Board of Directors Otto Mayerhofer received salaries of EUR 45,954 and fringe benefits of EUR 28,460.

The payment of pension provision contributions is made by means of a pension plan in the shape of a relief fund financed by deferred compensation. The following amounts have been paid:

Pension provision

	Year	Amount
Dieter Schopf	2006 2005	13,651 13,651
Maria Grohs	2006 2005	13,058 13,058
Dr. Paul Grohs	2006 2005	15,892 15,892
Total Board	2006 2005	42,601 42,601

No loans are given to members or former members of the Board of Directors by the company.

Remuneration of the Supervisory Board

The Supervisory Board's remuneration has been decided by the Annual General Meeting on the recommendation of Board of Directors and Supervisory Board. It is laid down in the Articles of Incorporation.

The remuneration of the Supervisory Board orients itself towards the company size, the tasks and responsibilities of the Supervisory Board members, and the company's economic situation and development. The remuneration is made up of a fixed portion and an attendance fee. The chairman and the vice-chairman receive additional remuneration.

Other information

Essential stockholders are as of the balance-sheet date:

Essential stockholders

Name	Stockholding in %
KST Beteiligungs AG, Stuttgart	over 5
UBS Fund Management (Switzerland) AG, Basel	over 5

Stockholdings of the company Boards' members*:

Name	Stockholding in number of stocks
Karl Kindl	150,264
Dr. Paul und Maria Grohs	120,000
Dieter Schopf	120,000
Dr. Wulfdieter Braun	6,015
Harald Nöth	3,486

* including individuals subjected to mandatory reporting

The Supervisory Board remuneration standards presently in effect have been decided by stockholders' resolution at the Annual General Meeting on May

18, 2006. Accordingly, the members of the Supervisory Board have been remunerated as follows:

Supervisory Board

in EUR	Year	Fixed remuneration	Attendance fee	Total
Dr. Wulfdieter Braun	2006	5,000	1,000	6,000
	2005	1,000	0	1,000
Karl Kindl	2006	4,000	1,000	5,000
	2005	1,000	0	1,000
Harald Nöth	2006	3,000	1,000	4,000
	2005	1,000	0	1,000
Total Board	2006	12,000	3,000	15,000
	2005	3,000	0	3,000

The remuneration of the Supervisory Board members is shown as net remuneration. The company does not grant loans to members of the Supervisory Board.

Individuals and companies related to the Group include the members of the Board of Directors and the Supervisory Board as well as the consolidated subsidiaries.

Business transactions with related companies and individuals are executed at customary conditions.

Transactions with related companies valuated in the Group at-equity at the beginning of the financial year result from supply and performance exchange. Transactions are carried out exclusively via an invitation to tender and at current market conditions.

InTiCom Systems received and paid for EDP hardware and other services from DES Data Empire Systems AG within the framework of IT system support. Goods and services received in the past financial year amounted to TEUR 76.

18. Financial risk management

The essential financial instruments employed by the Group are bank loans and current amount advances, finance lease agreements, as well as cash and cash equivalents and current investments. The main purpose of these financial instruments is financing the Group's business activity. The Group has further different financial assets and liabilities such as trade receivables and trade payables as an immediate result of its business activity.

It is and always has been the Group's policy not to engage in trading financial instruments.

The Group partly operates on the international level, subjecting itself to market risks due to exchange rate fluctuations. The Group does not assume at present that these risks could have a material effect on the Group's financial position and results. Owing to the small extent, there were no hedging activities in response to currency risks in the year under report.

The Group's risk regarding raw materials is immaterial.

The Group directs its efforts at disposing of sufficient cash and cash equivalents or non-cancelable credit limits to fulfill its obligations effectively.

Credit loss is eliminated as the Group transacts its business only with wellknown creditworthy third parties. New customers are subjected to a credit assessment. In addition, the actual receivables are constantly reviewed, to the consequence that there is no material risk of credit loss as of the balance-sheet date.

19 Additional information

Auditor's fees

For services rendered by the auditor, Nirschl, Grössl & Koll. GmbH Wirtschaftsprüfungsgesellschaft, Eging am See, the following fees have been charged to expenses in the financial year:

Auditor's fees

	2006 TEUR	2005 TEUR
Audit	25	19
Other consulting services	5	14
	30	33

Fees for the audit primarily include fees for the Group audit as well as the parent company's audit. Fees for tax counseling and other consulting services refer to project-related require– ments regarding income and value added tax as well as tax legislation for non-residents.

Human resources

The Group had an average of 142 employees (previous year: 89) in the financial year.

Human resources

	2006 TEUR	2005 TEUR
Employees	92	54
Industrial employees	44	32
Salaried employees	3	2
Trainees	3	1
	142	89

German Corporate Governance Code

The Board of Directors and the Supervisory Board of InTiCom Systems declare in how far the Group follows and has followed the recommendations of the "Government Commission German Corporate Governance Code" published by the Federal Ministry of Justice in the official section of the electronic Federal Gazette.

The declaration of conformity is made permanently available to the stockholders on the company's Internet website, www.inticom-systems.de, within the context of the annual report published there.

Passau, March 15, 2007

The Board of Directors

Publication

The financial statements, the consolidated financial statements according to Section 315a HGB, and the combined management report and Group management report of InTiCom Systems for the financial year 2006 are published in the electronic Federal Gazette ("Bundesanzeiger").

Auditor's certificate

"We have audited the consolidated financial statements prepared by InTiCom Systems, consisting of consolidated balance sheet, consolidated income statement, consolidated statement of changes in equity, consolidated cash flow statement, and notes to the consolidated financial statements for the financial year ended December 31, 2006. The preparation of consolidated financial statements and Group management report according to IFRS as applicable in the European Union and the additional provisions of commercial law as applicable according to Section 315 a (1) HGB are the responsibility of the

company's legal representatives. It is our responsibility to issue an assessment of the consolidated financial statements and the Group management report on the basis of our audit.

In compliance with Section 317 HGB, we have conducted our audit in accordance with the German accounting principles established by the Institut der Wirtschaftsprüfer (IDW). These principles require the audit to be planned and performed in such a way that inaccuracies and violations which materially effect the disclosure of financial position and results from operations as presented by the Group

management report and the consolidated financial statements with regard to applicable accounting provisions are identified with sufficient reliability. In establishing the audit procedures, knowledge of the business activity, the Group's economic and legal framework, and an anticipation of possible mistakes are taken into consideration. Within the context of the audit, the effectiveness of the internal accounting control systems as well as proof for the disclosures made in the consolidated financial statements and the Group management report are predominantly examined on the basis of random sampling. The

audit contains assessments of the financial statements of the companies included in the consolidated financial statements, the definition of the basis of consolidation, the accounting and consolidation principles applied, and the legal representatives' material estimates as well as an evaluation of the overall presentation of the consolidated financial statements and the Group management report. It is our opinion that our audit provides a sufficiently reliable basis for our assessment.

Our audit has not resulted in any objections.

According to our assessment based on the conclusions from our audit, the consolidated financial statements are compliant with the IFRS as applicable in the European Union and the additional provisions of commercial law as applicable according to Section 315 a (1) HGB, and they communicate – with regard to these provisions – a presentation of the Group's financial position and results from operations which corresponds with the actual conditions. The Group management report is consistent with the consolidated financial statements, communicates an overall correct impression of the situation of the Group, and describes the chances and risks of the future development coherently."

Eging am See, March 23, 2007

G. Nirschl Auditor

Report of the Supervisory Board for the financial year 2006

The Supervisory Board of InTiCom Systems consists of three members and has not established any committees because of its size but deals with all issues in its entirety instead.

The Supervisory Board assembled in four meetings in the past financial year. With the exception of one meeting, all members of the Supervisory Board were present in these meetings. Board of Directors and Supervisory Board collaborate closely to the company's benefit. The Board of Directors informs the Supervisory Board comprehensively about the company's

economic situation, the essential business events, and corporate planning.

In its meeting on March 20, 2006, in which the auditor was also present, the Supervisory Board approved of the financial statements 2005. The Supervisory Board also passed the proposals to the Annual General Meeting of May 18, 2006 unanimously.

In the course of the year 2006, the Supervisory Board assembled for meetings on May 15, August 18, and November 24. The meeting on August 18, 2006 was held in Prachatice, Czechia.

During the meetings, the Board of Directors gave detailed account of the course of business and the interim financial statements of the preceding quarters. Subsequent to these reports, the Supervisory Board discussed the developments with the Board of Directors.

The chairman of the Supervisory Board had regular contact with the Board of Directors in between meetings, and they discussed the company's strategy, business development, and risk management. The chairman of the Supervisory Board was informed timely and

comprehensively by the Board of Directors about all events of material importance for the assessment of the company's situation and development as well as for the company management.

Among the important events during the past financial year 2006, the following events are particularly noteworthy:

• In March the capital stock was increased initially within the context of authorized capital by EUR 129,000 from EUR 1,300,000 to EUR 1,429,000. On May 18, 2006 the Annual General Meeting decided the conversion of paid-in capital stated in the balance sheet as of December 31, 2005 to the partial amount of EUR 2,858,000 to capital stock. Thereby the capital stock was increased to EUR 4,287,000. The capital increase was realized by the issuance of 2,858,000 non-par bearer stocks. The stockholders received stock dividends (also called bonus stocks) at the rate of 1:2. The capital stock was thus increased in the course of the year from EUR 1,300,000 to EUR 4,287,000.
• In the Annual General Meeting on May 18, 2006, the Supervisory Board was newly elected. The Annual General Meeting followed the election proposals and appointed Dr. Wulfdieter Braun, Mr. Karl Kindl, and Mr. Harald Nöth members of the Supervisory Board by stockholders' resolution. In the subsequent constituent Supervisory Board meeting, Dr.

Wulfdieter Braun was elected new chairman, Mr. Karl Kindl was elected vice-chairman.

• The Annual General Meeting on May 18, 2006 also approved of the proposal for the new structure of the Supervisory Board remuneration from the beginning of the financial year 2006. Accordingly, the chairman of the Supervisory Board receives a fixed annual compensation of TEUR 5, the vice-chairman receives TEUR 4, and each additional Supervisory Board member receives TEUR 3. An additional attendance fee of EUR 500 is granted per member and meeting.
• During the third quarter, the investment of InTiCom Systems in ITS Components was finally sold as planned. The Supervisory Board gave its unanimous approval in its meeting on May 15, 2006.
• The setup of a new production location in the Czech Republic was completed in the course of the year. Regular production was started after trial operations.

The Wirtschaftsprüfungsgesellschaft Nirschl, Grössl & Koll GmbH, Eging, Germany, has audited the financial statements according to HGB for the financial year ended December 31, 2006 and the consolidated financial statements according to IFRS/IAS for the same period. The auditor has issued unqualified auditor's certificates.

The Supervisory Board has approved the result of the auditor's examination and its certification and has taken approving cognizance of the auditor's reports on the financial statements and consolidated financial statements.

The financial statements and the management report according to HGB for the financial year 2006 have been examined as well by the Supervisory Board. No objections were to be raised after the completion of this examination. In its meeting on April 5, 2007 the Supervisory Board approved of the financial statements 2006. The financial statements are hereby established.

The consolidated financial statements and the Group management report according to IFRS/IAS for the financial year 2006 have been examined by the Supervisory Board. The closing result did not lead to any objections to be raised, either. The consolidated financial statements and the Group management report were also approved of in the meeting on April 5, 2007.

Passau, April 6, 2007

Dr. Wulfdieter Braun

Chairman of the Supervisory Board

Technical glossary

ADSL

Asymmetric Digital Subscriber Line; broadband technology on the basis of conventional telephone lines allowing higher data transmission rates for downloads than for uploads.

Analog circuit technology

Purposeful combination of different electric components (e.g. coils, capacitors, resistors, etc.) to form a complete electric system with defined electrical and physical properties, recording signals in periodic form.

Antennas (Aerials)

Antennas in the sense of RFID technology are sender as well as receiver antennas on the basis of winding technology (inductive components or coils).

A sample

Lab samples, no series-production readiness.

Bit

Smallest digital unit of information, or rather a computer's smallest memory unit. It can assume the values one or zero.

B sample

A sample close to production yet still tested for series-production readiness.

CO

Central Office; the telecommunication companies' network distribution centers.

Coil

See inductive components.

CPE

Customer Premises Equipment is the DSL subscriber component group (splitters for DSL Internet users).

Download

Download means the transfer of all kinds of data from the Internet to a computer.

DSL

Digital Subscriber Line; broadband technology (fast data transfer via the Internet) on the basis of conventional telephone lines. With a download speed of 768 kbit and more per second, it is much faster than both analog modems and ISDN (using one line). The upload speed of 128 kbit/s is as high as the parallel use of both ISDN lines.

Filter

Electronic component for the separation of different signal sources.

Inductive components

Inductive components usually consist of a ferrite core, a plastic coil body and copper wire for the transmission, filtering, and sending or receiving of electric signals. They are functional without external energy input.

Inductivity

Physical measuring unit for the characterization of an inductive component.

Internet

The term was initially derived from "interconnecting network", i.e. a network which connects separate networks with each other. Today the Internet consists of an immense number of regional and local networks all over the world, creating the "networks' network" together. The Internet applies a uniform addressing scheme as well as TCP/IP protocols for the transfer of data. This global digital network primarily interconnects computers in research centers but also an increasing number of computers used by companies and individuals.

ISDN

Integrated Services Digital Network. ISDN uses the existing telephone lines, but the transfer of all data is digital instead of analog as before. By a concerted use of several channels, transmission rates of 128 kbit/s are achieved.

Kbit/s

Kilo bits per second; unit for the transmission rate or speed of data transfer.

Keyless-Entry

New technology for vehicle locking and unlocking devices; instead of a key, it requires only a chip card which exchanges signals with the vehicle. As soon as the card holder approaches the car or touches the door handles, the door opens. The motor is started by touching a pushbutton or starter button.

POTS

Plain Old Telephone Systems – term for the classic analog telephone system.

Powerline

Powerline technology allows the transfer of data on the Internet via public power lines.

Power Steering

Electronically supported steering of an automobile.

Remote Keyless-Entry

see under keyless entry

RFID

Radio Frequency Identification; wireless transmission system for object identification.

Splitter

Electronic component for merging or separating voice and data signals.

U-ADSL

Universal Asymmetric Digital Subsciber Line; VDSL and U-ADSL are advancements of the present DSL system for realizing higher data transmission rates – both systems are still at the developing stage.

Upload

Universal Asymmetric Digital Subsciber Line; VDSL and U-ADSL are advancements of the present DSL system for realizing higher data transmission rates – both systems are still at the developing stage.

VDSL

Very High Data Rate Digital Subscriber Line; see under U-ADSL.

Financial calendar

April 18, 2007 Press conference in Frankfurt/Main – Balance sheet presentation
April 18, 2007	Analysts' event in Frankfurt/Main
May 24, 2007	Annual General Meeting in Passau
May 30, 2007	Publication of the 3-month financial statements
August 30, 2007	Publication of the 6-month financial statements
November 30, 2007	Publication of the 9-month financial statements

Imprint

Publisher:	InTiCom Systems AG, Spitalhofstraße 94, 94032 Passau, Germany
	Phone +49(0)851 9 66 92-20, Fax +49(0)851 9 66 92-15
	www.inticom-systems.de; info@inticom-systems.de
Concept:	PvF Investor Relations, Frankfurt/Main; www.pvf.de
	English translation: Marc Donay, Cologne
Illustrations:	Uwe Dettmar, Frankfurt/Main
	Wolfgang Geißler, Deggendorf
	Kaps Fotoatelier, Passau
Design:	Sieler Kommunikation und Gestaltung GmbH, Frankfurt/Main
Print:	Passavia Druckservice GmbH & Co. KG, Passau