YOC AG — Annual Report 2009

Apr 30, 2010

GESCHÄFTSBERICHT 2009

YOC Overview

(in TEUR)	2009	2008	Change	Change in %
Revenue and earnings
Total revenue	2 6 , 1 2 3	2 3 , 6 2 1	2,503	1 1 %
Germany	2 1,095	20, 252	8 42	4%
Other countries	5,028	3,368	1,661	49%
Mobile Marketing segment	1 7, 5 0 0	13,207	4,293	33%
Affiliate Marketing segment	6,540	7,865	-1,325	-17%
Mobile B2C Services segment	2,083	2,548	-465	-18%
Total	27,063	24,330	2,733	1 1 %
EBITDA	1,025	2,086	-1,061	-51%
EBITDA – margin (in %)	4%	9%	n.a.	n.a.
Adjusted EBITDA	1,828	2 , 2 1 1	-3 83	-17%
Adjusted EBITDA – margin (in %)	7%	9%	n.a.	n.a.
EBITA*1	645	1,694	-1,049	- 62 %
After-tax earnings	-143	510	-653	-128%
Earnings per share (diluted/basic in Euro)	-0,08	0,29	-0,37	-128%
Balance sheet and cash flow statement
Balance sheet total	28,968	28,250	7 1 8	3%
Equity ratio (in %)	41%	43%	n.a.	n.a.
Cash and cash equivalents	2,825	4,529	-1,704	-38%
Operating cash flow	2 , 5 02	1,895	607	32%
Employees
Average number of employees*²	159	133	26	20%
Number of employees at year end	173	145	28	19%
Total output per employee (in TEUR)	170	183	-13	-7%

*1 EBIT before amortisation due to purchase price allocations (EBIT adjusted to eliminate amortisation due to company acquisitions)

*² On the basis of permanent employees

Where rounded amounts and indicators are used, differences may occur because of commercial rounding.

To Our Shareholders

1 To Our Shareholders
Letter to Shareholders	3
The Management Board	6
Dialogue with the Management Board	8
Report of the Supervisory Board	10
Corporate Governance	12
The Share	17

The YOC Group

The YOC Group
Company structure	2	23
Operations		24
European presence		27
Strategy		29

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Konzernlagebericht

4 Konzernlagebericht
Market Environment	49
Business Activities	54
Company Performance	60
Strategic Acquisitions	66
Results of Operations	67
Changes in Net Assets and Financial Position	71
Forecast Report	74
Risk Report	76
Inspection and Risk Management Report on the Accounting Process	79
Information on the Shares	80
Management Board Explanatory Report	83
Declaration on Corporate Governance	84
Remuneration Report	88
Events after the Balance Sheet Reporting Date	89
Responsibility Statement by the Management Board	90

Consolidated Financial Statement

5 Consolidated Financial Statement
Auditor´s Opinion	95
Group Statement of Comprehensive Income	96
Consolidated Financial Statement	97
Auditor´s Opinion	98
Statement of Changes in Shareholder´s Equity	99
Notes to the Financial Statement	100
Financial Calendar	136

To Our Shareholders

	1
Letter to Shareholders	3
The Management Board	6
Dialogue with the Management Board	8
Report of the Supervisory Board	10
Corporate Governance	12
The Share	17

YOC Group Annual Report 2009

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Letter to Shareholders

Dear Shareholders,

In the financial year 2009, our focus was on the strategic development of the YOC Group. The consistent implementation of various measures of both a technological and a structural nature resulted in the sustained expansion of our leading position in the European market for mobile marketing. With its current orientation, our company can look to the future with tremendous optimism and can continue to benefit disproportionately from the dynamic growth of this market.

T h e co mp any s aw s al e s in cre as e a gain in th e financial year 2009. This is par ticularly pleasing given the general market conditions last year. Overall, YOC Group sales increased by 11% to EUR 26.1 million (2008: EUR 23.6 million). In the core segment of Mobile Marketing, we recorded growth of 33% to EUR 17. 5 million ( 2008: EUR 13. 2 million). EBITDA amounted to EUR 1.0 million. Adjusted to eliminate non-recurring expenses – such as costs incurred in connection with the uplisting to the Prime Standard – EBITDA totalled EUR 1.8 million (2008: EUR 2.1 million).

The year of strategic development

The most important strategic developments of the past year included the expansion and improvement of our technological platform, the development of the blind ad network ubiyoo, the establishment of YOC Mobile Advertising GmbH, the expansion of our international operations, the uplisting to the Prime Standard of the Frankfurt Stock Exchange and the Group-wide introduction of SAP.

With the merger and unification of our proprietary technologies last year, the YOC Group now has a unique platform; one that efficiently links various elements together, creating the possibility of significant synergy effects. The platform's flexibility, power, reliability and scalability allow us to react quickly to developments in our dynamic market.

In the financial year 2009, we also worked on the technological development of the blind ad network ubiyoo. ubiyoo is a globally oriented, automated marketplace for mobile advertising which, within the YOC Group, closes the gap between CPT and pure performance-based marketing. The introduction of the network in January 2010 has made YOC the only provider in the world to offer its customers the full range of mobile marketing solutions.

Another important step in the area of strategic optimisation was the transformation of the Mobile Advertising segment into a separate legal entity. With the creation of YOC Mobile Advertising GmbH, we have drawn a clear dividing line between the classic Mobile Marketing segment and marketing, which will allow us to provide even more targeted solutions for our customers in future.

Key decisions were also made in connection with our international growth strategy in the financial year 2009. The international market presence of the YOC Group was further expanded by the acquisition of the UK mobile marketing and mobile Internet provider Bluestar Mobile Ltd. and the Spanish mobile advertising agency Mobile Interactive Advertising Media, S.L.; companies that provide the ideal complement to our existing international activities.

With the change from the Entry Standard segment to the Prime Standard of the Frankfurt Stock Exchange, YOC AG is now listed in the segment of the Deutsche Börse with the highest transparency and disclosure requirements. This significantly increases the attractiveness of the YOC share for both institutional and private investors and serves to actively support the growth of our company.

Market developments in the financial year 2009

The market for mobile marketing grew significantly in the financial year 2009. The strongest driver of this development is the mobile Internet. Smartphones, flat rates for data and better transfer rates have pushed usage rates up rapidly and made mobile phones an even more important communications medium. In the past year, the "mobile" medium experienced a breakthrough as it became an indispensable communications instrument for many industries – media companies, publishing houses, portal operators and branded companies. We are convinced that the growth seen in the last year is just the beginning of massive developments in the years to come.

The YOC Group will benefit enormously from this growth. Our comprehensive product offering, our broad international presence, long-standing expertise and fast-growing customer base put us in a unique position in the European market – a position which was further consolidated by the strategic measures implemented last year. Our leading technology platform is a unique feature which enables us to offer our complete range of products internationally across all business units.

Outlook for the 2010 financial year

We are very optimistic about the current financial year: our unique technology will continue to provide us with a decisive advantage over our competitors in future and ensure the continued scaling of our business units. Our increasing order volume will thus be achieved at a correspondingly lower cost, which will be reflected in our improved profit margin.

The expected growth in revenue is supported by the significant growth in the industry resulting from the increasing proliferation of mobile devices and smartphones, as well as general market developments. For financial year 2010, we expect revenue of between EUR 30.0 million and EUR 32.0 million. Assuming this target is hit, we would be seeking an EBITDA in the range of EUR 3.0 million to EUR 3.2 million.

We would like to thank all our shareholders and business partners for the trust they have placed in us. We are very optimistic about the future and we look forward to continuing our successful cooperation.

Kind regards, Dirk Kraus, CEO of YOC AG

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The Management Board

YOC Group Annual Report 2009

Alex Sutter, CSO of YOC AG

"A mobile presence has become indispensable for advertisers. Our years of experience, our technological expertise and our focus on scalable business will allow us to reap the benefits of this very positive development again in 2010."

Mo, 05.01

Mo, 25.02 Di, 06.01 Mi, 07.01 Marktdaten 15,4 Mio. Deutsche nutzen das mobile Internet

Dirk Kraus, CEO of YOC AG

"In the financial year 2009 the focus was on strategic development. With the uplisting to the Prime Standard, the development of the ad network ubiyoo and the expansion of our international operations, we have successfully complemented our unique strategic positioning and are now by far the leading provider of mobile marketing in Europe."

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To Our Shareholders

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Jan Webering, COO of YOC AG

"We are uniquely positioned in the European mobile marketing segment. Our acquisitions in 2009 in the United Kingdom and Spain give us six international locations in the core markets of Europe. This positioning is made even stronger by our ad network ubiyoo, which from the very beginning has had a global orientation."

Fr, 09.01

Do, 08.01 Sa, 10.01 So, 11.01 Technologische Weiterentwicklung Release FIT Server 8.1.3

Dialogue with the Management Board

Mr Kraus, how satisfied are you with the financial year 2009?

In 2009, we increased revenue by 11% over the previous year. We grew by 33% in our core segment of Mobile Marketing. This is very good news, particularly in view of the difficult market conditions brought about by the broad economic and financial crisis. But 2009 was also a very important year for us from a strategic point of view. We focused on the optimisation of our technological platforms, the development of the ad network ubiyoo, the expansion of our international business as well as the uplisting to the Prime Standard of the Frankfurt Stock Exchange. These measures allowed us to optimise our strategic orientation and we are now by far the leading provider of mobile marketing in Europe. So I am very satisfied with the performance of the YOC Group in the financial year 2009.

What were the reasons for the change to the Prime Standard?

The market for mobile marketing recorded strong growth in the financial year 2009 and we are convinced that this is just the beginning. And it is no surprise that the capital market is also showing increasing interest in the YOC share. This makes it all the more important for us to be attractive to potential investors. The change to the Prime Standard moves us up to the segment of the stock exchange with the highest transparency requirement, which greatly increases the attractiveness of the YOC share. Given the rapid development of our industry due to the increasing usage rates of the mobile Internet and its commercialisation, the penetration of applications for smartphones and the introduction of the iPad, it is clear that the uplisting move was made at exactly the right time.

You transformed the Mobile Advertising segment into a separate legal entity in the financial year 2009. What is the strategic significance of this segment?

The Mobile Advertising product segment is of enormous strategic importance. The massive growth rates in the mobile Internet make mobile marketing increasingly vital. The number of mobile advertising campaigns grew by more than 80% in 2009 alone. As Europe's leading premium mobile marketer, we are one of the main beneficiaries of this trend. With the creation of YOC Mobile Advertising GmbH, we have drawn a clear dividing line between marketing and the classic Mobile Marketing segment, allowing us to provide optimal service to this rapidly growing market. But YOC is not active only in the area of premium mobile marketing. The launch of the automated blind ad network ubiyoo in January 2010 now allows us to offer performance-based marketing solutions in the mobile Internet. With ubiyoo, YOC now offers a unique, globally oriented service in the market for mobile advertising.

So you feel that ubiyoo complements the existing range of the YOC Group in the Mobile Advertising segment?

Right. With the development of the ubiyoo network, we have significantly expanded our range of services in the Mobile Advertising segment and we now have an inventory of around 2.0 billion ad impressions – spaces where ads can be delivered – each month. Of these spaces, 0.9 billion are in our premium network, while 1.1 billion are in our performance-based network. With the increasing availability of mobile Internet sites and the general increase in usage rates, the number and variety of marketable spaces is also continuously on the rise. This, in turn, gives advertisers the opportunity to achieve very different marketing objectives by making use of mobile advertising. Imagebased campaigns will continue to enjoy the benefits of well-known premium publications, while campaigns aiming to reach a broad audience will appreciate the advantages of blind ad networks. And combined marketing models are also an extremely attractive alternative, both for advertisers and for publishers.

Mr Kraus, YOCAG acquired two foreign companies in 2009. Did their integration go according to plan?

Yes, the integration of both Bluestar Mobile Ltd. in London and Mobile Interactive Advertising Media, S.L. in Madrid went smoothly. Both companies are a perfect fit and complement our activities extremely well. This naturally made the process considerably simpler. The acquisi-

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tion of Bluestar Mobile and the company's simultaneous incorporation into the existing business of our UK subsidiary YOC Ltd. made us the UK's leading full service provider of mobile marketing. We took the lead in the mobile marketing sector in Spain through our acquisition there. Overall we are very satisfied with both acquisitions.

What about the international growth strategy in 2010? Will acquisitions play a role again?

As a result of the implementation of our internationalisation strategy, 20% of our revenue is now generated abroad – and this figure is growing. We also intend to further expand our position as Europe's leading provider of mobile marketing in 2010. We will seek to do this primarily through the organic growth of the Group. At the same time, there are European markets in which inorganic growth could be the best way to enter a market or to expand existing business activities. So we will remain open to attractive takeover options in the future. However, as I said, the focus is on organic growth. ubiyoo, for example, has had a global orientation from the beginning, with publishers from Europe, North America and Asia. This position will facilitate our organic growth internationally in 2010.

The market for mobile marketing has developed very rapidly in the past year. How do you assess its potential for 2010?

The mobile marketing segment will continue to grow in 2010. With the greater popularity of smartphones and the increasing availability of flat rates, the usage rates of the mobile Internet – the primary driver of our industry – will continue to rise. 18% of all mobile phone owners now use their phones to access the Internet. This figure is growing daily, making the marketing of mobile websites increasingly important. The market is also being driven by the development of applications and new devices like Apple's iPad. We have now reached a point where the question most advertisers are asking themselves is no longer if they'll have a mobile presence, but what form their mobile presence will take. It's no surprise that Eric Schmidt, the CEO of Google, recently called for "mobile first". Google won't be the only company with this strategy in 2010 – of that I'm convinced.

What is the impact of the acquisition of Admob by Google and of Quattro Wireless by Apple on the industry?

These acquisitions are a clear demonstration of the relevance of the mobile marketing industry. Of course, we view this development as a very positive sign for the entire market. As regards the YOC share, there is no doubt that this was one of a number of factors driving our share price in the first quarter of 2010.

What will be the strategic priorities of the YOC Group in 2010?

In 2010, we are placing a great deal of emphasis on the development of our scalable business segments Mobile Advertising, Mobile Internet and Affiliate Marketing. The goal is to increase the profitability of the entire Group by optimising revenue while sustainably lowering costs. In addition, we will also be focusing on the expansion of our international activities this year. Our very successful first quarter makes us confident that we can achieve these goals and continue our dynamic growth in 2010.

Report of the Supervisory Board

The Supervisory Board attended to the duties it is responsible for pursuant to law and the articles of association during the period under review and regularly acted in an advisory capacity with regard to the management of the company for the Management Board. In keeping with its obligations, it attended to the situation of the company, the business development as well as the intended corporate policy and planning by providing regular written and verbal reports to the Management Board.

The Supervisory Board approved decisions or measures of the Management Board that were subject to the approval of the Supervisory Board according to the applicable law or rules of procedure of the Management Board after thoroughly examining and scrutinising the relevant documents.

In addition to many technical issues and measures requiring approval, the meetings focused on the company's performance and its competitiveness, taking particular account of the impact of the financial crisis on the company. Short-term, medium-term and long-term issues were all treated equally.

Tasks of the Supervisory Board

In 2009, the Supervisory Board held eight regular meetings on 9 March, 30 March, 17 April, 22 April, 14 May, 14 July, 1 September and 10 November and provided comprehensive assistance to the Management Board. Moreover, the entire Supervisory Board cooperated closely with the Management Board and assured a detailed exchange of ideas, whilst the Management Board regularly provided information on all important business transactions. The Supervisory Board also took advantage of the opportunity to discuss issues without the presence of the Management Board.

In the financial year 2009, the Supervisory Board focused particular attention on the uplisting of YOC AG from the Entry Standard to the Prime Standard of the Frankfurt Stock Exchange and the acquisitions of Bluestar Mobile Ltd. in May 2009 and Mobile Interactive Advertising Media, S.L. in September 2009. The Supervisory Committee also assisted the Management Board between meetings of the Supervisory Board.

At its meeting on 9 March 2009, the Supervisory Board approved changes in the corporate structure of YOC AG. These changes concerned the transfer of the belboon brand from YOC AG to adbutler GmbH, which now operates under the name belboonadbutler GmbH. The approved changes also included the spin-off of the Mobile Advertising segment into an independent legal entity called YOC Mobile Advertising GmbH. Moreover, the Supervisory Board approved the conversion of Sevenval AG into Sevenval GmbH. The Supervisory Board also approved the transfer of the Professional Services/Operations segment of Sevenval GmbH to YOC AG.

The Supervisory Board approved the annual financial statements for the financial year 2008 with the participation of the auditor and after detailed discussion with the auditor at its meeting on 17 April 2009. The annual financial statements were thus adopted.

At its meeting on 22 April 2009, the Supervisory Board approved the admission of the shares of YOC AG to the regulated market with simultaneous admission to the sub-segment of the regulated market with additional admission obligations (Prime Standard) on the Frankfurt Stock Exchange. The shares of YOC AG had previously been traded in the OTC segment (Entry Standard) on the Frankfurt Stock Exchange. At this meeting, the Supervisory Board also approved the creation of a YOC Management Incentive Programme involving the issue of stock options with subscription rights to YOC AG to members of the Management Board of YOC AG and employees of the company as well as the creation of conditional capital, the change in the 2006 authorised capital as well as the corresponding changes in the articles of association required by this action.

At its meeting on 14 May 2009, the Supervisory Board approved the acquisition of Bluestar Mobile Ltd. by YOC AG .

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At its meeting on 1 September 2009, the Supervisory Board approved the potential acquisition of the Mobile Interactive Advertising Media, S.L. The Supervisory Board also gave its approval to the observance by the YOC AG, with minor exceptions, of the Corporate Governance Code in accordance with the recommendations of the government commission on the German Corporate Governance Code.

The Supervisory Board approved the corporate financial plan of the YOC Group for 2010 at its meeting on 10 November 2009.

Audit of the annual and consolidated financial statements

The annual and consolidated financial statements and the management report for the period from 1 January to 31 December 2009 have been audited and given an unqualified audit opinion by Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Berlin, who were appointed by the General Meeting on 15 July 2009. The above-mentioned documents were submitted to all members of the Supervisory Board directly after their compilation.

The annual and consolidated financial statements and the respective management reports were discussed in the presence of the auditor, who reported on the scope, focus and results of its audit in detail at the meeting of the Supervisory Board on 15 April 2010. There was no reason to believe that the auditors had any conflict of interest. The Management Board explained the annual and consolidated financial statements at that meeting.

The Supervisory Board acknowledged and approved the results of the auditors' review. The Supervisory Board raised no objections on the basis of its own observations and review and approved the annual and consolidated financial statements of YOC AG dated 31 December 2009 on 26 April 2010. The annual financial statements are thus in accordance with § 172 AktG.

Corporate Governance

The Supervisory Board studied the details of the German Corporate Governance Code. In December 2009, the Management Board and the Supervisory Board delivered their joint declaration of conformity pursuant to § 161 AktG and made this declaration permanently accessible on the company's website.

YOC AG is broadly in compliance with the recommendations of the German Corporate Governance Code. The declaration of compliance with explanations regarding the deviations from the recommendations is on pages 15-16 of the annual report.

Changes in the Management Board

Dr Jürgen Wolff retired from the Management Board on 31 December 2009. Dirk Kraus assumed the responsibilities previously held by Dr Wolff, in addition to his role as CEO. The Supervisory Board thanks Dr Jürgen Wolff for his work.

Thanks to the members of the Management Board and the staff of the YOC AG

The Supervisory Board would like to thank the Management Board and all employees of the YOC Group for their deep commitment in the previous financial year and the Supervisory Board is convinced that the financial year 2009 made a major contribution to the continued positive, sustainable prospects for YOC AG's business operations.

Berlin, April 2010 The Supervisory Board

Gerd Schmitz-Morkramer Chairman

Corporate Governance

YOC AG attaches great importance to corporate governance: it represents the responsible and long-term value-driven management and control of our company. Efficient cooperation between the Management Board and the Supervisory Board, respect for the interests of shareholders and the openness and transparency of corporate communications are key aspects of good and responsible corporate governance and control.

With the admission of its shares to the regulated market (Prime Standard) of the Frankfurt Stock Exchange in late April 2009, YOC AG is, for the first time, required to make a statement on the recommendations of the government commission on the German Corporate Governance Code as defined in § 161 Stock Corporation Act (AktG).

The Management Board and the Supervisory Board report as follows on corporate governance at YOC AG:

The YOC AG complies with the corporate governance principles contained in the version of 18 June 2009, published in the electronic Bundesanzeiger on 5 August 2009, with the exception of nos. 2.3.2, 3.8 par. 2, 4.2.3 par. 5, 5.1.2 par. 2, sentence 3, 5.3.2, 5.3.3, 5.4.1, sentence 2, 5.4.4, 5.4.6 par. 2 and 7.1.2 sentence 4. The Management Board and the Supervisory Board of YOC AG have adopted the declaration of conformity to the Code attached to the end of this report. It is published on the website of YOC AG at www.yoc.com (Investor Relations area).

1. Shareholders and General Meeting

YOC AG reports to its shareholders four times in the financial year on business developments and on the assets, financial position and results of Group companies. The General Meeting passes resolutions on, inter alia, the allocation of earnings, the approval of the actions of the Management Board and the Supervisory Board, as well as on the selection of the auditor. Amendments to the articles of association and corporate actions are determined solely by the General Meeting and implemented by the Management Board. Shareholders may submit counter-motions on resolutions proposed by the Management Board and the Supervisory Board and may challenge decisions of the General Meeting.

The Management Board makes use of electronic communications, particularly the Internet, to facilitate the distribution of information about the General Meeting and to enable shareholders to exercise their voting rights in absentia by proxy.

2. Management and control structure

In accordance with the German Stock Corporation Act, YOC has a bipartite management and control structure, comprising the Management Board and the Supervisory Board. In the dual management system, the management (Management Board) and corporate control (Supervisory Board) are strictly separated. Simultaneous activity on the Supervisory Board and the Management Board is not legally permissible. The duties and responsibilities of these two bodies are clearly defined by law.

2.1 Management Board

The Management Board consisted of four members in 2009:

• Dirk Kraus, CEO,
• Alex Sutter, CSO,
• Jan Webering, COO,
• Dr Jürgen Wolff, CFO.

The Management Board manages the company on its own responsibility and exercises control over the Group companies. This binds it to the company's interests and obliges it to sustainably increase shareholder value. In consultation with the Supervisory Board, it is responsible for the strategic direction of the company.

The Management Board works closely with the Supervisory Board. It informs the Supervisory Board regularly, promptly and comprehensively of all issues relevant to overall company strategy and strategy implementation, planning, business development, financial position and earnings, compliance and corporate risk.

The Management Board is responsible for the preparation of quarterly reports, the half-yearly and annual financial statements of YOC AG and the consolidated financial statements. It ensures compliance with legal provisions and appropriate risk management within the company.

2.2 Supervisory Board

In accordance with Sections 96, par. 1, sixth case, 101 par. 1 AktG in conjunction with Section 10 par. 1 of the articles of association, YOC AG's Supervisory Board is composed of three shareholder members.

The Supervisory Board oversees and advises the Management Board in the management of the business. At regular intervals, the Supervisory Board discusses business development and planning as well as strategy and its implementation with the Management Board. The Supervisory Board approves the annual financial statements and takes note of and approves the group financial statements. It also appoints the members of the Management Board. Basic decisions affecting YOC AG require its approval. This includes decisions or measures that fundamentally change the assets, financial position or results of the company. The Supervisory Board determined the disclosure and reporting obligations of the Management Board.

The members of the Supervisory Board make their decisions independently and are not bound by the demands or instructions of third parties. In addition, consulting agreements, service agreements and certain other agreements between YOC AG and/or its subsidiaries and members of the Supervisory Board must be approved by the Supervisory Board.

3. Remuneration Report

The Remuneration Report is governed by the recommendations of the German Corporate Governance Code. It summarises the principles which are applied in setting the remuneration of the Management Board of YOC AG and explains the amount and structure of these payments. It also describes the principles and the amounts paid to the members of the Supervisory Board.

The Remuneration Report also contains details which German commercial law requires to be part of the Notes to the Consolidated Financial statements pursuant to Section 314 of the German Commercial Code (HGB) or of the Group Management Report pursuant to Section 315 of the German Commercial Code (HGB).

3.1 Remuneration of the Management Board

The Supervisory Board is responsible for determining the remuneration of the Management Board. When doing so, it considers the size and activities of the enterprise, its economic and financial position, the tasks of the relevant Board member and the amount and structure of the remuneration paid to members of other management boards in similar sectors. The remuneration is adjusted so that it remains at a level competitive within the market for highly qualified management personnel and offers an incentive to perform well.

The remuneration of the Management Board is performance-based; in financial year 2009 it consisted of a fixed component, a variable component and participation in the "YOC Management Incentive Programme":

• The fixed remuneration is paid as a monthly salary.
• The variable component represents a share in the Company's performance oriented to the operational result under IFRS.

• Participation in the "YOC Management Incentive Programme" gives the members of the Management Board subscription rights to shares in YOC AG.

The participation of the Management Board in the "YOC Management Incentive Programme" is intended to reward the contributions of the Management Board to increasing shareholder value and to promote the longterm success of the company. Through this component of the remuneration and the long-term incentive provided, the interests of the management are linked in a sensible way to those of the Company share.

The remuneration of the Management Board totalled TEUR 600 in financial year 2009. This amount is composed of the total fixed remuneration of TEUR 540 and a variable component which in 2009 was TEUR 60 distributed over the entire Management Board. During financial year 2009 the Management Board was due a total of 97,965 subscription rights.

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Name	Fixed remunera tion (in TEUR)	Variable re muneration (in TEUR)	Sub scription rights (in units)
Dirk Kraus	160	20	32.655
Alex Sutter	130	20	32.655
Jan Webering	120	20	32.655
Dr. Jürgen Wolff	130	0	0
Total	540	60	97.965

Dr Wolff resigned from the Management Board of YOC AG as of 31 December 2009 in agreement with the Supervisory Board. He was awarded a settlement of TEUR 91.8, and for the period January - March 2010 a fixed remuneration of TEUR 32.5 was paid.

As a fringe benefit of the contract, Mr Jan Webering has a claim to a company car for business and private use.

3.2 Remuneration of the Supervisory Board

At the proposal of the Management Board and Supervisory Board, the remuneration of the Supervisory Board has been set by the General Meeting. The remuneration of the Supervisory Board consists of a fixed payment. This comes to TEUR 7.5 for the entire financial year. The chairman of the Supervisory Board receives 2.5 times this fixed amount and the deputy chairman receives 1.5 times this amount. All components of remuneration for the completed financial year are due for payment following the Ordinary General Meeting at which the approved consolidated financial statements are presented for the last financial year. The remuneration of the Supervisory Board for financial year 2009 amounts to a total TEUR 26.25. Mr Peter Zühlsdorff waives the right to receive the remuneration due to him as deputy chairman of the Supervisory Board.

Remuneration of the Supervisory Board for 2009
Name	Fixed remuneration (in EUR)
Gerd Schmitz-Morkramer	18.750
Peter Zühlsdorff	./.
Dr. Arnold Bahlmann	7.500
Total	26.250

4. Accounting and auditing

The consolidated financial statements and interim reports are prepared in accordance with IFRS. The consolidated financial statements are prepared by the Management Board and reviewed by the auditor and the Supervisory Board. The consolidated financial statements for financial year 2008 were not prepared before the deadline for public disclosure of 90 days after the end of the financial year in accordance with no. 7.1 .2 sentence 4 of the German Corporate Governance Code. In the case of the interim reports, the deadline of 45 days after the end of the reporting period set out in no. 7.1.2, sentence 4 of the German Corporate Governance Code was also not complied with. The company will make every effort to comply with the recommendation in no. 7.1.2, sentence 4 of the German Corporate Governance Code, although this cannot be guaranteed for 2009. It was agreed with the auditor, Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Berlin, that the chairman of the Supervisory Board would report immediately any exclusions or conflicts of interest that arise during the audit and that the auditor would report immediately on all significant issues and events relevant to the tasks of the Supervisory Board resulting from the carrying out of the audit.

5. Transparency

YOC AG provides information to all participants in the capital markets uniformly, comprehensively, promptly and simultaneously. Reporting on the business situation and the results of YOC AG and the YOC Group is carried out through the annual report, the half-yearly report and the interim reports. As well as this, information is passed on through ad-hoc communication where legally necessary and through the Company's website.

Changes that have to be reported in the make-up of the shareholder structure according to Section 26 of the Securities Trading Act (WpHG) and the purchase and sale of shares of individuals who hold management positions with YOC AG (directors' dealing according to Section 15 a of the Securities Trading Act (WpHG)) are also published by the Management Board.

Below is a list of the holdings of the Management Board and Supervisory Board in YOC AG that directly or indirectly exceed 1% of the issued shares of the company:

Shareholdings of the Management Board at 31 December 2009
Number of shares
445.700
53.125

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Shareholdings of the Supervisory Board at 31 December 2009
Name	Number of shares
Peter Zühlsdorff	231.558

6. Further information about YOC AG's stock option programme

In 2009, the "YOC Management Incentive Programme" was launched with a total of 175,000 stock options. A stock option grants the right to one share of YOC AG. The options to purchase YOC shares can be granted to members of the Management Board (up to 115,500) and to employees (up to 59,500). The "YOC Management Incentive Programme" runs until 31 December 2012. On 1 October 2009 options to purchase 97,965 shares were issued to members of the Management Board and options to purchase 51,625 shares were issued to employees.

The subscription rights may be redeemed by their owners no earlier than three years after the respective issue date. The exercise price of the subscription rights is based on the average Xetra closing price of the YOC share for the last eight trading days before the start of acquisition period. However, the exercise price must be at least the closing price of YOC's share on the day on which the subscription rights were issued. The requirements for exercise of subscription rights include ongoing employment of the claimant and the fulfilment of certain performance targets. The performance targets provide for an increase in the YOC share price.

The subscription rights may only be exercised during a clearly defined exercise period. The exercise periods are also based on the timing of the annual press conference of the Company and the publication of the report on the first half of the year. The exercise periods each comprise 17 exchange-trading days.

All claimants are required to comply with the provisions of insider-trading laws.

7. 2009 Declaration of conformity with the German Corporate Governance Code

In accordance with Section 161 AktG, the Management Board and the Supervisory Board of YOC AG declare:

With the following exceptions, YOC AG is in conformity with the recommendations announced on 5 August 2009 in the official section of the online Federal Gazette by the government commission on the "German Corporate Governance Code (the Code)", as amended 18 June 2009:

• Point 2.3.2 of the Code: The Company regards the announcement of the invitation to attend the General Meeting in the electronic Bundesanzeiger as sufficient.

• Point 3.8 par. 2 of the Code: The D&O liability insurance for the Management Board and Supervisory Board has been concluded without a deductible. The Company believes that the motivation and responsibility with which the members of the Management Board and Supervisory Board carry out their duties will not be improved by a deductible. The D&O liability insurance serves to safeguard against the Company's material own risks and at most serves as a second-line defence of the assets of the members of those Boards. With regard to the D&O liability insurance for the Management Board, Section 23 of the introductory act to the Stock Corporation Act (EGAktG) (transitional provision of the Reasonableness of Management Remuneration Act (Gesetz zur Angemessenheit der Vorstandsvergütung) is observed.

• Point 4.2. 3 par. 5 of the Code: In deviation from the Corporate Governance Code, payments in the event of a change of control are not limited to 150% of the severance cap. A limit could jeopardise the ability to attract highly qualified employees. According to the Board remuneration structure, a change of control, particularly when Board members participate in the share option programme, will also have the effect of increasing the YOC share price. In addition to the beneficiaries of the share option programme, however, it is also the shareholders who will profit from the rise in the share price, so that in this respect the interests of the Management Board and shareholders are guaranteed to coincide.

• Point 5.1.2 par. 2 Sentence 3 of the Code: The Supervisory Board has not set an age limit for members of the Management Board. The members of the Supervisory Board are convinced that the suitability for company management depends to a large extent on the individual ability to perform.

• Point 5.3.2 and 5.3.3. of the Code: With the Supervisory Board of YOC AG having only three members, it is not practical to establish an Audit Committee and a Nomination Committee. The increased efficiency of auditing the accounts intended by the Code through the establishment of an Audit Committee would not be achieved because the Audit Committee would have to be filled with almost all plenum members. Similarly, the Nomination Committee would have to be filled with almost all plenum members, which would not result in any improved preparation of the decision proposals of the Supervisory Board concerning the election proposals of the shareholders.

• Point 5.4.1, sentence 2 of the Code: No age limit has been set for members of the Supervisory Board. Suitability to monitor the Management Board as a member of the Supervisory Board and to be an equal-ranking contact for the Management Board depends to a large extent on individual effectiveness.

• Point 5.4.4 of the Code: In the opinion of the Management Board and Supervisory Board, in certain cases it may be worthwhile for former members of the Management Board to move to the Supervisory Board and there also to take over the chairmanship of the Supervisory Board or to chair certain committees.– The internal knowledge of the former members of the Management Board concerning the enterprise serves to enhance the efficiency of the control exercised by the Supervisory Board.

• Point 5.4.6 par. 2 of the Code: The remuneration of the Supervisory Board consists of a fixed payment. Any variable remuneration to be granted beyond this is unnecessary for a performance-related motivation of the Supervisory Board and would not effect any additional incentive or motivational step.

17

4

The Share

2009: A Turbulent year for investors

In 2009 the stock market experienced extremes: investors' hopes for an end to the global real estate and financial crisis led to some strong price gains last year. For example, the DAX rose by 3,589 points from its low in March 2009 to end the year at 5,957, an increase of about 66%. Similar to the DAX, the SDAX has also risen steadily since March. The SDAX gained over 26% from its level at the end of December 2008. This strong upward trend mainly reflected the hopes of investors for a revival of the global economy. The still tentative positive economic news does not yet fully justify this optimism, but some market watchers think it can be interpreted as a harbinger of an economic recovery.

YOC share:

Strong price increase in the first quarter of 2010

During the reporting period, the YOC share price underperformed the SDAX as it fell by 12.6% based on the closing price of 30 December 2008. The YOC share price, however, recorded a significant jump at the beginning of 2010: on 4 January 2010 the share was listed at EUR 13; it then shot up by 169% to just under EUR 36 by 31 March 2010. At times in the first three months the price went over the EUR 43 mark, its highest level since inclusion in the Prime Standard of the Frankfurt Stock Exchange. The share also turned in a strong outperformance compared to its benchmark companies and to the SDAX during this period - the SDAX rose by only 7% in this time. The YOC share followed a similar trend for the period from 1 January 2009 to the end of March 2010, with a gain of 166%.

Development of YOC share and SDAX Performance Index

SDAX +37.7%

	YOC AG	SDAX Performance Index
2 January 2009	13.25 Euro*1	2,829.67 Pkt
31 March 2010	35.65 Euro*1	3,895.95 Pkt
Change	+169.1%	+37.7%

*1 XETRA closing price

Growing interest of analysts in YOC

The interest of international investors in YOC's share increased significantly following the successful switch to the Prime Standard at the end of April 2009. In June 2009, Deutsche Bank took up coverage with a buy recommendation.

Continuous and transparent investor relations

YOC AG strives constantly to strengthen or expand contacts with investors and analysts. The company views transparent financial communication as a key to sustainable increase in shareholder value. For this reason, the management and IR officers of YOC AG participated in several investor and capital market events again last year and also had numerous meetings with investors and analysts. The YOC Group presented its business model,

YOC AG + 169.1%

explained its strategic goals and described its operating success. YOC AG made numerous new contacts at the Equity Forum in Frankfurt in November 2009.

The company will continue to communicate with analysts and investors in 2010 in regular telephone conferences and via investor conferences and road shows, discussing the company's development and providing information on key data and strategic objectives.

Further financial information can be found online at www. yoc.com under the heading Investor Relations.

Shareholder structure as at 31/12/2009

5

The YOC Group

2	Company structure	23
	Operations	24
	European presence	27
	Strategy	29

Company Structure

Aⁱliat^{e M}arketin^{g M}obⁱl^{e B}2^{C S}ervice^{s M}obil^{e M}arketin^g international mehr als 500 mobilen Portalen • Mobile Video Solution • Mobile Banking Solution Mobile Marketing Mobile Advertising

• Mobile AdServing Solution inkl. In-App and Mobile Video AdServing
• Mobile Advertising Premium Vermarktungsnetzwerk in Europa
• Mobile Reichweiten-Vermarktung (ubiyoo)

Mobile Entertainment

• B2C Online und Mobile Content Shop
• Content Syndication und Lizensierung

Affiliate Marketing

• Integrierte Online und Mobile Affiliate Marketing Plattform (belboon)

2

Culients & Products

Mobile Internet

• Multi-Channel Internet Plattform (FIT-Technologie) inkl. CMS und Device Database

• Erstellung und Betrieb von

• Integration des Handys in den Media-Mix

• Innovative Technologie-Plattform zur Realisierung individueller Mobile Marketing Lösungen
• Realisierung von mobilen Markenportalen und Smartphone Apps (iPhone, Android etc.)
• Messaging Gateway System zum zielgerichteten Versand und Empfang von SMS, MMS und E-Mails
• CRM und Permission Marketing Plattform

Operations

The YOC Group is Europe's leading full-service provider for the use of mobile phones as an advertising, information and transaction medium. The company has developed a powerful, proprietary IT system landscape for use in mobile and Internet services. The numerous interfaces and modules that allow the integration of networked, multimedia applications produce considerable synergy effects for its customers. The range of services offered by the YOC Group has five cornerstones: mobile marketing, mobile advertising, mobile Internet, affiliate marketing and mobile B2C services.

Mobile Marketing

The YOC Group offers its customers tailor-made mobile marketing solutions based on scalable technology platforms. Branded companies from various sectors use YOC mobile advertising to communicate with their target audiences, which are increasingly difficult to reach through traditional media. Compared to TV, print or outdoor advertising, the mobile channel offers the advertising industry the unbeatable advantage of specifically addressing their target audience without wastage and with a high level of interactivity. No medium is used more often than the mobile phone and consumers have them available virtually all the time. Mobile Marketing can be designed in a wide variety of ways:

Extensive on-package promotion for the Coca-Cola brand Fanta

Mobile push marketing allows target audiences, with their permission, to be addressed with relevant ad messages directly via text message, MMS or e-mail. For this type of permissions-based digital marketing, the YOC Group makes use of its own media space in the form of a database of registered users, whom YOC can reach either by mobile phone, by e-mail, via the Internet or via some combination of these channels.

In the area of mobile response marketing, the mobile phone is integrated into the media mix of advertisers as a return channel. YOC makes advertising in TV, print or outdoor advertising as well as product packaging interactive by integrating a text message short code or a QR code. In addition to the system architecture and the messaging infrastructure, YOC also provides the required text messaging, MMS, and WAP push sending and receiving capacity through direct connections to mobile operators.

QR code integration with traditional media for the Nissan Qashqai

With the mobile channel playing a greater role in corporate communications strategies, mobile Internet portals are becoming increasingly important. A successful mobile campaign has to transfer the existing brand world and optimise the delivery of all content for different devices. YOC makes possible the creation of individual mobile websites that are optimised for use on the mobile phone. In addition, YOC covers the entire spectrum of mobile applications: from useful tools to attractive showroom applications and targeted mobile games. The applications developed by YOC can be used on all platforms such as the iPhone, Blackberry and Android, as well as to less common devices, to provide customers with complete market coverage.

4

25

Mobile applications

The focus is increasingly shifting to the development of tailor-made, branded, location-based services. YOC develops site-specific services such as navigation services, traffic monitors, city services and shop finders, which automatically provide users with the right information for their situation by making use of position, time and personal data. With voice and video call technology, YOC also transmits informative and emotive voice and video messages. The mobile phone is also gaining in importance as a transaction medium. For this reason, YOC has developed mobile solutions to initiate various transactions via payment systems, mobile coupons and mobile tickets.

Mobile Internet

In the product area of mobile Internet YOC creates and maintains mobile Internet portals through which content and advertising materials can be accessed via mobile devices, and the company licenses the required software to customers. In this area, YOC offers both the creation of individual mobile Internet sites, whose content differs – sometimes substantially – from the customer's fixed Internet presence, as well as the automated conversion of fixed sites for mobile use. Customers in this area mainly include media and publishing houses and Internet platforms, transaction providers and banks. The FIT technology used enables YOC customers to make efficient use of their web services on other Internet-enabled devices such as mobile phones or televisions and gaming consoles, set-top boxes or the new Apple iPad in addition to the PC.

Development of more than 500 international mobile portals

The development of mobile banking portals requires a particularly high level of technological expertise. The security requirements necessary for the implementation of account access, transfers and similar transactions safety requirements can only be ensured through the combination of a variety of technology components. Numerous wellknown banks now make use of YOC's secure Mobile Banking Solutions.

Mobile Advertising

YOC has been marketing mobile ad display space (banner ad space as well as special forms of advertising, such as mobile video advertising) on mobile Internet sites since 2007, making it possible for operators, such as media houses, to generate advertising revenue on their mobile product offerings. The technical requirements to do this include the use of specialised AdServing technology and a dedicated AdServer to which the entire marketing network of YOC is technically connected and which is centrally controlled. The mobile AdServing system allows the device-specific delivery of the ad and the extensive targeting of the audience of a mobile advertising campaign in the YOC marketing network, which may be based on the particular mobile operator, the type of mobile phone used and – in conjunction with the anonymised customer data of a mobile operator – socio-demographic. The system also enables technical services such as accounting and planning services, monitoring and optimisation of ongoing campaigns ("on-the-fly optimization") as well as the creation of campaign-specific landing pages. With over 180 mobile websites in various industries in its portfolio, YOC has the most extensive international premium marketing network in the mobile Internet.

Mobile advertising for the Sixt iPhone app

In addition to the marketing of premium sites, YOC offers mobile affiliate marketing via its subsidiary belboon-adbutler GmbH. This performance-based marketing is based on socalled "cost per performance" models such as cost per click, cost per lead or cost per order processed.

ubiyoo, the third marketing unit of the YOC Group, bridges the gap between CPT and purely performance-based marketing. The web-based, globally-designed, self-service technology platform brings together advertisers and publishers in the mobile Internet on the basis of a variable pricing system. The network enables advertisers to ensure efficient and targeted placement of advertising on the mobile Internet on the basis of an individually identifiable CPC or CPM pricing model, whereas publishers can monetise their mobile website quickly and easily with "ubiyoo".

Affiliate Marketing

In the Affiliate Marketing segment, YOC provides affiliate networks for advertisers under the "belboon" brand through its subsidiary belboon-adbutler GmbH. With the merger of "adbutler" and "belboon" into a single affiliate network in January 2009, the YOC Group operates the third largest, performance-based Internet marketing network in the German-speaking world. At the core of affiliate marketing in both the fixed and mobile Internet is the creation of partnerships between advertisers from different industries ("advertisers") and the operators of Internet or mobile Internet portals ("publishers"). belboon-adbutler GmbH provides its partners with automated advertising management, campaign tracking tools and fully automated billing of advertising services. In this form of performance marketing, the publisher is compensated using the so-called "cost per performance" model.

Mobile B2C Services

In the mobile B2C services segment, the YOC Group offers end-users both self-created and service-provider related mobile value-added services and entertainment services such as wallpaper, screen savers, customised user interfaces ("themes"), logos that can be personalised by consumers, ringtones, cartoons, movies and mobile games in several European countries. These products can be obtained individually or via subscription. In addition, YOC licenses in-house and third-party mobile content for distribution to operators and portals.

Marketing with ubiyoo

European presence

27

International presence of the YOC Group

The YOC Group has a unique position in the European market. This is due to the comprehensive range of services the company offers in the mobile marketing segment and to its broad international presence. In addition to its German sites (Berlin and Cologne), the YOC Group has five other sites in Austria (Vienna), the UK (London), Spain (Madrid), France (Paris) and Belgium (Brussels). The international business of the YOC Group is conducted by the wholly-owned subsidiaries YOC Central Eastern Europe GmbH (Vienna), YOC Ltd. and Bluestar Mobile Ltd. (London), YOC Spain (Madrid) and Moustik S.p.r.l. (Brussels). In France, the company operates via YOC AG. As at 31 December 2009, the YOC Group had a total of 182 employees, of which 21 were outside Germany. This represents 11% of the number of total employees during the financial year 2009. The YOC Group offers its core range of services in the mobile marketing segment in Germany, Austria, the UK, Spain and France. As the only provider in the mobile marketing market, the company is thus wellequipped to meet the growing demand of customers for cross-border, internationally-oriented campaigns. In Belgium, the subsidiary Moustik S.p.r.l. operates the mobile B2C business of the YOC Group. The technological platform of the YOC Group is operated and developed exclusively at the sites in Berlin and Cologne. The international subsidiaries of the YOC Group themselves do not provide any technological services, but make use of those provided by the two German sites – which creates considerable synergies across the Group. In 2010 the YOC Group continues to pursue its objective of further strengthening its international positioning. In this effort, the emphasis is on organic growth. However, the company remains open to attractive international acquisition options.

Strategy

Continuing to strengthen our position in the market Mobile Marketing

YOC is the European leader in the Mobile Marketing segment and has the most extensive network for the marketing of mobile Internet sites (publishers), apart from the portals of mobile operators. Moreover, the business operations of all three product segments within the mobile marketing unit are already internationally-oriented, with comprehensive project experience in the European core markets and attractive European niche markets. YOC intends to maintain and expand this European-wide market position in future, although the increase in sales and the volume of business operations still play the most important roles. Further growth is expected to come from the increased use of the mobile Internet and the continued technological development of mobile devices, of which the YOC Group will be a major beneficiary as a result of its established and proven technologies. The company plans to intensify existing cooperation with media and advertising agencies as well as online marketers.

Another element is the continuous expansion of the product range by adding additional applications and content that can be transported on mobile devices. In the Mobile Marketing business unit, the company also intends to intensify the use of synergy potentials and economies of scale between the different product segments of the Mobile Marketing business unit, particularly between the units of Mobile Advertising and Mobile Internet, and to exploit cross-selling potential, i.e. the acquisition of customers from one product segment for products of the other two product segments, respectively.

Affiliate Marketing

YOC also intends to make increased use of synergies between advertising via the Internet and advertising via the mobile phone in the Affiliate Marketing business unit in the future. YOC expects that the platform for affiliate advertising via mobile phone will grow stronger due to the increased distribution of mobile websites, and plans to participate at an above-average rate in the growth of this market on the basis of its existing technologies and economies of scale. In addition, YOC is constantly working on the expansion of the affiliate networks and the creation of other exclusive partner programmes. Long-term customer retention will be increased by a focus on maximum customer service.

Mobile B2C Services

While the expansion of the product portfolio has been a priority recently, YOC plans to expand its customer relationships and to reduce the rate at which existing subscribers are replaced by new subscribers (the so-called churn rate) in the future, thus minimising the cost per subscription. The launch or revision of mobile portals for the marketing of B2C services in Belgium and Germany is another objective.

Geographical expansion

The YOC Group intends to continue its growth course in the rest of Europe. This makes it vital to achieve organic growth by acquiring new customers in the rest of Europe and expanding existing customer relations into other countries. Organic growth includes the implementation of mobile marketing measures in several European countries, the development and technical implementation of mobile Internet portals and the placement of ad banners on mobile Internet portals and smartphone applications. We are also planning to gradually internationalise the Affiliate Marketing segment, to extend our technological and functional market leadership geographically and to gain more market share in order to better position ourselves in relation to our competitors. The key here is the high level of technological expertise of the YOC Group, which allows the content, which is mostly generated by our customers, to be distributed internationally.

Fokussierung auf skalierbare Geschäftsaktivitäten

YOC intends to increasingly use economies of scale in order to optimise its turnover and to reduce its expenses, especially in the Mobile Marketing and Affiliate Marketing segments. For this reason, the focus will be on intensifying the use of customer contacts for the entire product range in these segments and on making cross-divisional use of applications for marketing and technology operations

Group Management Report

4 Group	Management Report
	Market Environment	39
	Business Activities	54
	Company Performance	58
	Strategic Acquisitions	66
	Results of Operations	67
	Changes in Net Assets and Financial Position	71
	Forecast Report	74
	Risk Report	76
	Inspection and Risk Management Report on the Accounting Process	79
	Information on the Shares	8 0
	Management Board Explanatory Report	83
	Declaration on Corporate Governance	84
	Remuneration Report	88
	Events after the Balance Sheet Reporting Date	89
	Responsibility Statement by the Management Board	90

Market Environment

International mobile telephone market: Current trends

Germany valued at EUR 62 billion for financial year 2009. The mobile telephone market (network operators and providers) makes up EUR 23.6 billion of this. The number of activated SIM cards was estimated at 109.1 million compared with 107.2 million in 2008, and the percentage of non-voice revenues increased to 27% compared with 25% in 2008 (source: DIALOG CONSULT / VATM: 11th consolidated market analysis, 2009).

Mobile telephone penetration was calculated at 42% in 2008, an increase of 8%. Portio Research estimates that the number of worldwide mobile telephone subscribers rose to 3.9 billion in 2009 and will increase to 4.9 billion by 2012 (penetration rate gain to 70%). According to TNS Infratest, mobile telephone subscribers were distributed across the individual regions in 2008 as follows: Asia with 47% of mobile telephone subscribers, Europe with 25% of mobile telephone subscribers, America with 19% of mobile telephone subscribers, Africa with 9% of mobile telephone subscribers, and Oceania with 1% of mobile telephone subscribers. In the USA, mobile telephone penetration was approximately 88% in 2008; it was thought to have increased to 92% in 2009. There continued to be almost unrelenting growth in mobile telephone access in Germany as well: Mobile telephone penetration rose by 11 percentage points to 131% in 2008 (source: Federal Ministry of Economics and Technology / TNS Infratest Business Intelligence: 12th Fact Report of the Federal Ministry of Economics and Technology, 2009).

Mobile telephone replaces fixed network telephony

In addition to trends for occupational mobile telephone use, mobile applications for private use such as subscriptions to social networks like Twitter or Facebook are becoming increasingly well established. At the same time, mobile communications are increasingly replacing fixed network telephony: In July, 2008, findings released by BITKOM reported that 24% of households in the EU telephoned exclusively with mobile telephones. In the Czech Republic, 64% of all households telephoned with mobile phones exclusively, in Finland 61% and in Lithuania 53% of the households. Other Eastern European countries also had above average exclusive use of mobile phones. In Germany, 11% of the households used mobile telephones exclusively (source: Federal Ministry of Economics and Technology / TNS Infratest Business Intelligence: 12th Fact Report of the Federal Ministry of Economics and Technology, 2009).

Growing prevalence of smartphones

In the global mobile telephone market, the increasing prevalence of the latest generation of smartphones continued to provide significant revenue growth in 2009. The growth rate from 2006 to 2007 was 15%, from 2007 to 2008 5% and from 2008 to 2009 approximately 11% (source: Federal Ministry of Economics and Technology / TNS Infratest Business Intelligence: 12th Fact Report of the Federal Ministry of Economics and Technology, 2009). In 2009, approximately 1.2 billion mobile communication devices were sold worldwide of which 14% were smartphones; this represents an increase of 24% compared to the previous year (source: Gartner, press release of 15 December 2009). Juniper Research predicts a market share of 23% for 2013 and ABI Research forecasts 31%. For Germany, the percentage of 3G devices in 2008 was 21% and the percentage of smartphones was 9% (source: Federal Ministry of Economics and Technology / TNS Infratest Business Intelligence: 12th Fact Report of the Federal Ministry of Economics and Technology, 2009).

• Smartphone sales in Germany
• Sales (in millions of units)
• Revenue (in billions of euros)

Source: EITO, IDATE

In 2009, the penetration rates were 28% in Italy, 23% in Spain, 13% in Sweden, 12% in Germany and the United Kingdom and 11% in France (source: The Nielsen Company (2009): Mobile or Not to Mobile - Digital Strategies for Advertisers). In Germany, an estimated 8.2 million smartphones will be sold in 2010, which corresponds to an increase of 47%. One out of every three mobile telephones sold will be a smartphone; in 2009, the figure was one out of five. Revenue is expected to grow by 33% to EUR 1.5 billion (source: BITKOM 2010).

The distribution of mobile data services is being advanced with the changeover of current GSM technology to third generation mobile telephones (3G). At the same time, fourth generation (4G) mobile communications networks are already being developed on the basis of LTE (long-term evolution) technology. In 2008, the number of UMTS mobile telephones in Germany rose from 10 million to 16 million (53% growth) according to data from the industry organisation BITKOM. Growth of 43% was forecast by BITKOM for 2009 (corresponding to 22.7 million UMTS devices). The percentage of UMTS devices of all German mobile telephone connections increased from 15% in 2008 to 20% in 2009. Morgan Stanley also estimated the UMTS penetration rate in Germany at about 20%; for 2010, the penetration rate is expected to hit 54% (compared with 39% in 2009) in Western Europe (source: Morgan Stanley: The Mobile Internet Report, 2009). Smartphones have evolved to become the strongest mega-trend in this context. In addition to mobile interoffice and data communication, they also offer "smart gadgets" such as navigation systems, applications, Bluetooth and touchscreen in one device. It is conceivable that mobile devices will soon be the preferred way to access the Internet.

The continued growth of the non-voice revenue percentage of mobile network operators will still be generated primarily through "real" data communication services (source: DIALOG CONSULT / VATM: 11th consolidated market analysis, 2009). According to estimates from BITKOM, approximately EUR 5.2 billion in revenue was generated from mobile data communications in Germany; revenue throughout Europe is estimated to be about EUR 32.6 billion (source: European Information Technology Observatory, July 2009).

Strong growth in mobile Internet usage

At the same time, the use of the mobile Internet also continued to grow in the past 12 months. In Germany, the percentage of the population that used the mobile Internet at least once a month was estimated at approximately 10% in 2008. Other studies indicate that 20% of mobile telephone users accessed the mobile Internet in 2009 (source: Nielsen Mobile, European Commission; in: Federal Ministry of Economics and Technology / TNS Infratest Business Intelligence: 12th Fact Report of the Federal Ministry of Economics and Technology, 2009; TNS Infratest Global Telecoms Insights, 2009).

It is precisely the growth of UMTS access that favourably affects the use of the mobile Internet. After all, almost 14% of mobile telephone users indicate that they also use mobile broadband technology (source: TNS Infratest on behalf of E-Plus: Mobile Telephone Use and Usage Purposes 2009). According to information from the Federal Network Agency, there were already 17 million UMTS subscribers in Germany in the third quarter of 2009 (source: Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway: annual report 2008/2009). In this regard, the providers improved pricing models have a strong influence on increased use for mobile surfing (source: BVDW Mobile Monitor Q4/2009). About 35% of mobile Internet users have a corresponding flat data rate that simplifies monitoring of individual costs (source: Accenture Mobile Web Watch, 2009). In general, this is the preferred rate model for two-thirds of mobile telephone users with regard to mobile data transfers (source: TNS Infratest on behalf of E-Plus: Mobile Telephone Use and Usage Purposes 2009). Strong interest in Apple's iPhone also has a positive effect on the use of the mobile Internet: According to information from T-Mobile, iPhone users surf in the mobile Internet 30 times more frequently than users of other end devices. 80% of iPhone users access the mobile Internet with their telephone at least four times per week (source: Chip.de, 15 January 2009). According to information from Morgan Stanley, approximately 2 million iPhones have been sold in Germany since the market launch at the end of 2007 (source: Morgan Stanley: The Mobile Internet Report, 2009). According to Apple, a total of more than 25 million iPhones were sold worldwide in 2009; this makes the total units sold more than 42.4 million since sales began (source: Apple Reports from Fourth Quarter Results 2007 to First Quarter Results 2010). IMAGE Mobile Internet use in Germany 2009 Mobile Internet use according to age group (in %) source: Accenture (2009): Mobile Web Watch 2009

Mobile internet usage in Germany

Mobile internet usage in Germany according to age group (in %) source: Accenture (2009): Mobile Web Watch 2009

The retrieval and transmission of e-mail still dominates mobile Internet use; however, broader usage is becoming increasingly noticeable overall. Also of interest – in addition to the retrieval of news and information – are maps, weather forecasts and surfing online communities such as Facebook, StudiVZ or Xing (source: Accenture: Mobile Web Watch, 2009; Opera: State of the Mobile Web, 2009). Visiting mobile social networks is the most frequently used mobile application among people age 13-34 in the United Kingdom, Germany, France, Spain and Italy (source: Comscore, 2009).

Anticipated sales for mobile marketing and mobile advertising

According to estimates, USD 7.36 billion was spent on mobile marketing projects worldwide in 2009; of this figure, USD 6.44 billion went to mobile messaging services (88%). The lion's share of this fell under pure text message transmission and about 20% went to mobile marketing according to the Federal Association of the Digital Industry (source: YOC Group, internal calculation). Moreover, approximately USD 338 million went to mobile display advertising and about USD 597 million to mobile search advertising (source: eMarketer in: The Netsize Guide 2009). According to estimates, turnover in mobile marketing in 2009 in the USA alone totalled USD 391 million (source: Forrester Research, 2009). Other studies indicate total worldwide sales of USD 2.36 billion (gross revenue) for the area of mobile advertising (mobile search advertising, mobile display advertising, mobile permission marketing and in-game advertising) (source: Juniper Research in: Detecon: Mobile Internet Ecosystems and Carrier Strategies, 2009).

Mobile advertising volumes global

Mobile Display Advertising Spending Worldwide (in millions of USD)

source: eMarketer (2008) in: Netsize S.A. (2009): The Netsize Guide (2009) In Germany, a mobile net advertising turnover of EUR 140 million, including mobile affiliate marketing and mobile search advertising, was forecast for 2009 (source: Goldmedia, 2008). On the basis of internal calculations the YOC Group estimates that the mobile advertising market segment alone will generate about EUR 12 million in net revenue for 2009 (corresponding to EUR 20 million gross revenue) and EUR 17 million net revenue in 2010 (source: YOC Group, Advertising Revenue Volume 2009/2010). In financial year 2009, compared with the previous year, by more than 80%. At the same time, the number of advertising companies that use mobile advertising rose by 43% (source: Mobile Advertising Circle (MAC) / Federal Association of the Digital Industry (BVDW), 2010).

At the same time, advertising on mobile phone displays generates a considerably higher click rate than conventional Internet advertising (source: Capgemini Deutschland, 2009). Case studies of individual marketers show that click rates of up to 5% are being achieved. In contrast, the click rate today in typical advertising markets lies at about 0.10% on average (source: Heike Scholz, Mobile-Zeitgeist. de, 2010). Even within the digital advertising format, the increased significance of mobile marketing can be seen: As part of an expert survey, 40% of the decision-makers interviewed indicated that they would use more than 10% of their digital advertising budget for mobile campaigns in the future (source: The Netsize Guide 2009, 2009).

Paid content – digital contents increasingly pay off

The importance and relevance of digital contents increasingly boosts the preparedness to pay for it. This particularly affects information and chat offers in the Internet. In a study by the GfK on behalf of the Wall Street Journal Europe, at least 8% of those polled in Germany could conceive of paying for news, chat and information in the Internet, provided these are free of advertising in return (source: GfK Custom Research / GfK Association, 2009). In Western Europe, on average only 4% accept paid content with simultaneous advertising; the highest values here are for Sweden (23%) followed by the Netherlands and the United Kingdom, each at 20% (source: GfK Custom Research / GfK Association, 2009). Interestingly, readiness to pay for digital content is highest among mobile smartphone users. According to a study from law firm Olswang, which specialises in media rights, 30% of British iPhone owners can conceive of paying for digital newspaper articles or columns while the average approval for this is significantly lower at 19% (source: Olswang LLP, 2009). Revenue with digital print products in the Internet in the amount of EUR 403 million was forecast for 2009 in Western Europe (source: TNS Infratest Business Intelligence, 2009). The iPhone applications of the "BILD" newspaper and the daily newspaper "Die Welt" (both from Axel Springer Verlag) serve as an example of successful implementation of paid content and were downloaded more than 100,000 times within one month at a price of EUR 0.79 (BILD) and EUR 1.59 (Welt) (source: Bild.de, 15 January, 2010).

Affiliate marketing: current trends

The number of Internet connections and regular use of the Internet has grown throughout the world, and in Europe – at least in the Scandinavian countries – the percentage of people who have used the Internet in the last three months is close to the saturation point (source: Eurostat, 2009: in Federal Ministry of Economics and Technology / TNS Infratest Business Intelligence: 12th Fact Report of the Federal Ministry of Economics and Technology, 2009). At the end of 2009, about 69% of the German population 14 years or older was using the Internet, and 67% had also used the Internet in the last three months (source: AGOF-Berichtsband zur Internet facts 2009-III, 2009). Internet World Stats arrives at similar estimates: In Germany, there were 54.2 million users (penetration rate 66%), in the United Kingdom 46.7 million users (penetration rate 76%), in France 43.1 million users (penetration rate 69%), in Italy 30 million users (penetration rate 52%), and in Spain 29.1 million users (penetration rate 72%) (source: Internetworldstats, 2009). According to a study by yStats, Internet commerce grew by 13% in 2009 (source: yStats: Global B2C E-Commerce Report, 2009). At the same time, the number of online shoppers also continues to grow in Germany: Based on the Allensbach computer and technology analysis, the German e-Commerce and Distance Selling Trade Association estimates that there were 32.5 million Internet shoppers in 2009. This corresponds to a growth of 1.1 million shoppers compared with 2008. Total sales were estimated at EUR 21.8 billion (source: German e-Commerce and Distance Selling Trade Association (bvh), 2009).

Anticipated sales for affiliate marketing

In Germany between January and November of 2009 alone, approximately EUR 1.44 billion was spent on a net-net basis on Internet advertising; this corresponds to growth of 8.9% over the previous year. At the same time, advertising expenses in conventional media (above-the-line) declined by 1.4% to about EUR 18.74 billion (source: Nielsen Media Research, 2009).

According to OVK advertising statistics, gross online advertising expenditures including search-word marketing and affiliate marketing amounted to approximately EUR 4.05 billion in 2009 compared to EUR 3.67 billion in 2008. Of this, almost EUR 2.12 billion was spent on conventional online advertising (+10%), roughly EUR 1.62 billion went to search machine marketing (+10%) and EUR 308 million was spent on affiliate marketing (+15%) (source: OVKWerbestatistik, Online Marketer Circle in the Federal Association of the Digital Industry, 2009). However, to some extent there is a considerable difference between the gross expenditures and the net revenues, and the actual net revenues are accordingly estimated to be lower. For instance, PriceWaterhouse-Coopers assumes an overall volume of EUR 768 million for Internet advertising in 2009 and forecasts an increase of 3.4% to EUR 794 million for 2010 (source: PriceWaterhouse-Coopers: German entertainment and media outlook 2009 – 2013, 2009).

According to predictions by ZenithOptimedia, the Internet will continue to gain signficance as an advertising vehicle: By 2012, 16.2% of advertising expenditure will go to online advertising (source: Advertising Expenditure Forecasts, ZenithOptimedia, 2009).

Mobile B2C services: current trends

At least 15% of mobile telephone users in Germany indicated that they download or listen to music with their mobile phones (source: TNS Infratest on behalf of E-Plus: Mobile Telephone Use and Usage Purposes 2009). According to a study by Techconsult, 27% of Germans 10 years or older listen to music with their mobile phones, 18% watch videos with it and 9% download content such as games (source: Techconsult / BITKOM, 2009). In Germany, six million complete units of music were downloaded to mobile phones in 2008, generating sales of about EUR 9 million, while the demand for conventional ring tones decreased to 16 million downloads with sales of EUR 39 million (source: BITKOM 2009). EUR 103 million was spent on mobile phone games in Germany in 2009 (source: PriceWaterhouseCoopers: German entertainment and media outlook 2009–2013, 2009).

Anticipated sales for mobile B2C services

In 2009, sales of EUR 6.54 billion for music downloads, EUR 3.29 billion for games, EUR 2.04 billion for images, EUR 1.79 billion for videos, EUR 772 million for TV broadcasting offers, EUR 749 million for TV streaming offers and EUR 113 million for gambling were forecast for the mobile entertainment industry worldwide; for 2012, total sales of EUR 21.5 billion were expected (source: Informa Telecoms & Media in: Federal Ministry of Economics and Technology / TNS Infratest Business Intelligence: 12th Fact Report of the Federal Ministry of Economics and Technology, 2009). In 2008, EUR 96 million was spent on music downloads in the fixed and mobile Internet in Germany alone; in 2009, sales increased to EUR 121 million.

However, distribution of ring tones and dial tones for mobile terminals is declining: In 2010, a drop to EUR 6 million is predicted; but at the same time, sales of mobile phone games grew by 15.5% to EUR 119 million (source: PriceWaterhouseCoopers: German entertainment and media outlook 2009 – 2013, 2009).

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Business Activities

Business activities in the mobile marketing segment

In the mobile marketing sector, YOC Group develops solutions and offers services in order to efficiently integrate mobile phones into the media and communication mix of advertising companies, operators and media houses based on scalable technological platforms. Das Segment Mobile Marketing ist dabei in die drei Produktbereiche Mobile Marketing, Mobile Internet und Mobile Advertising aufgegliedert.The Mobile Marketing segment is divided into three product areas: Mobile Marketing, Mobile Advertising and the Mobile Internet.

The value-added chain within that segment includes the conception, planning and implementation of individual mobile marketing solutions in the mobile marketing product field, and extends from the development and operation of mobile Internet and transaction portals (e.g., mobile banking) to the mobile Internet field, to the support and marketing of mobile advertising space in the mobile advertising product field.

By its own estimates, YOC is positioned as the European market leader in the mobile marketing segment. The flexibility of the system software makes it possible to combine all available technologies individually with each other, allowing integrated, efficient solutions to be offered to customers.

The Mobile Marketing segment primarily resides at YOC AG and its subsidiaries Sevenval GmbH, YOC Ltd., YOC CEE GmbH, YOC Mobile Advertising GmbH, Bluestar Mobile Ltd., Mobile Interactive Advertising Media, S.L., ubiyoo GmbH and Brutus Media GmbH.

The Mobile Marketing segment

In the Mobile Marketing segment, YOC implements mobile marketing solutions at the international level for branded companies and service providers from different industries. YOC's services include the creation, design, technical implementation as well as the ongoing operation of mobile solutions. Furthermore, YOC provides customer consulting as well as evaluation of the implemented measures such as reporting, success analysis and market research results.

Services in this product segment are used across sectors by, for example, companies from the consumer goods sector, retail, the service sector, finance and the automotive industry. YOC creates mobile marketing solutions for brands such as Coca-Cola, Mercedes-Benz, Kraft Foods, Deutsche Post, CDU and Walt Disney. The product portfolio extends from the alliance of promotional communications from television, print media, radio and outdoor advertising sectors with mobile communication devices (mobile response marketing) to the direct contacting of consumers via mobile communication devices and the Internet (mobile and/or e-mail push marketing) to the development of new technological applications such as mobile applications, location-based services and mobile websites.

In the mobile response marketing segment , YOC develops mobile solutions for its customers to enable consumers to directly contact advertising companies via their mobile devices. Consumers can respond to commercials, radio programmes, print or outdoor advertising and product packaging (on-pack promotions) via text message, MMS or QR codes, thus entering into a dialogue with the advertising company, taking part in contests or requesting product samples.

On-pack promotion for Uncle Ben's in Austria

Mobile and e-mail push marketing means directly addressing consumers via mobile phone or e-mail, with the approval of the consumer. For this kind of digital permission marketing, YOC Group has its own media space in the form of a database with registered users that can contact YOC via mobile phone, e-mail, the Internet or sometimes via a combination of all these channels. The creative design of marketing concepts and strategies is either developed by YOC itself or by third parties such as advertising agencies. The implementation of mobile marketing measures occurs on the basis of self-developed technological solutions and applications. YOC purchases the text messaging and MMS components needed to carry out mobile marketing strategies via the Brutus Media GmbH subsidiary, which was fully taken over by YOC AG in 2007. Brutus Media GmbH specialises in telecommunication services focusing on the sending of text messages and MMS, including the trade of text messaging and MMS components and in providing technical services to a range of customers from the media industry. While mobile marketing campaigns were purely text-message based a few years ago, today a multitude of different technologies are available that permit highly emotional and multimediabased communication concepts to be implemented on a mobile phone. YOC has a unique technology platform with which all available technologies can be flexibly combined with one another. This allows an individual solution to be created for each campaign, specifically tailored for the relevant target group on the basis of its media use preferences. With the implementation of the mobile channel in the communications strategies of companies, Mobile Internet portals are playing an increasingly central role. The transfer of the existing brand philosophy as well as the optimised delivery of all content to various terminals are hereby a decisive factor for the success of the mobile entry. YOC therefore enables the creation of an individual mobile Internet presence that is optimised for specific use via mobile telephones.

In addition, YOC covers the entire spectrum of mobile applications: from useful tools to attractive showroom applications to targeted mobile games. The applications developed by YOC can be used on all platforms such as the iPhone, Blackberry and Android, as well as less common devices, to provide customers with the broadest possible market coverage.

YOC Application developments

The focus is increasingly shifting to the development of customised, branded, location-based services. YOC develops site-specific services such as navigation services, traffic monitors, city services and shop finders, which automatically provide users with the right information for their situation by making use of position, time and personal data. With voice and video call technology from YOC, informative and emotional voice and video messages can be conveyed. The linking of sound, image and telephony expands the possibility of direct interaction between customer and brand and enables the generation of awareness with high viral potential. Moreover, the mobile phone is becoming more and more significant as a transaction medium. YOC creates mobile solutions for its customers that allow them to initiate mobile payment procedures, mobile coupons or mobile tickets for various transactions.

YOC also offers its customers mobile SEM (search engine marketing) and mobile SEO (search engine optimisation) measures based on steady growth of the mobile Internet. Mobile SEM defines the switching of text and image displays on results pages and the content network of search machines in the mobile Internet through the entry of certain search terms. The main purposes of mobile SEM are to enhance coverage of mobile portals, generate leads, sales and visits and to boost market presence and visibility.

Mobile SEM for generating visits, leads and sales

Achieving and maintaining a good ranking in search results is the purpose of SEO (search engine optimization). Search engines are the most important method for generating new website visitors on the mobile Internet, too. This is best achieved by ensuring a position at the top of the list of responses. Mobile SEO broadens the methodology of "normal" online SEO by adding some particular aspects of the mobile Internet. This includes, among other things, the basic technical environment and other behaviour patterns of the mobile user. The development and enhancement of optimized source codes, which reflect the content of the mobile portal in a semantically correct form, result in an attractive mobile page for search engines. By applying different mobile SEO measures, YOC is able to boost visitor numbers for the mobile page, to allow customers to achieve their marketing goals or or to enhance the attractiveness of marketable advertising space and increase the portal operator's revenues.

The Mobile Internet segment

IIn the Mobile Internet segment, YOC develops and supports mobile Internet portals, where content, ad banners and advertisements can be accessed via mobile devices, and licenses the required software to customers. Internet portals that are not optimised for access via mobile devices are often not suited for access via mobile devices due to the volume of data and the devices processing ability and display. Mobile Internet portals created by YOC are developed specifically for use via mobile devices. In this area, YOC offers both the creation of individual mobile Internet sites, whose content differs – sometimes substantially – from the client's fixed Internet presence, as well as the automated conversion of fixed sites for mobile use. In both cases, a technology developed in-house by YOC Group is used. The FIT technology developed by the YOC subsidiary Sevenval GmbH not only enables the automated conversion of the fixed pages on the mobile communication device but is a technology solution that can respond to market innovations such as the iPad from Apple particularly quickly and innovatively. The multi-channel technology of Sevenval can thus also optimally deliver existing online content to this new mobile terminal and optimally support the usability of the iPad. More than 500 mobile portals of well-known companies such as Verlagsgruppe Handelsblatt, Postbank, FAZ, T-Online and WEB.DE use the mobile Internet technologies from the YOC Group. Just a few years ago, mobile Internet offerings were confined solely to simple information services such as stock market, weather and timetable information. Since then, however, there has been a shift towards complex interactive offerings such as Mobile Banking, Mobile Social Community Networks and Mobile Commerce. In these data-sensitive areas, exceptionally sophisticated technological expertise is indispensable since the security requirements which must be observed for accessing bank accounts, performing bank payments and transactions call for a combination of different technological components. YOC plays a leading role in this sector, having established its mobile Internet solutions with numerous publishing houses, media companies, Internet portals and banks.

Mobile banking for Postbank

The Mobile Advertising Segment

In the mobile advertising segment, YOC markets mobile Internet portals for media agencies, publishing companies and independent portal operators, as well as specific applications for smartphones, and uses these to generate advertising revenue. When offering targeted mobile marketing, YOC works mainly with media agencies and advertising agencies but also establishes direct activity with advertising companies from the consumer goods industry, the tertiary sector and the financial services industry. YOC Mobile Advertising clients include Coca-Cola, Mercedes-Benz, Intel, Deutsche Bahn and SAP. This includes the development of banner ads and advertisements created for distribution via mobile devices, and their subsequent placement and delivery on the mobile websites that are to be marketed. YOC also develops innovative advertising formats to do justice to the latest technology and to keep making advertising ever more attractive. The size of the recently developed expandable ad and the opportunities this offers distinguishes it from previous innovative advertising formats. Clicking the classic mobile advertising banner rolls the expandable ad across the entire mobile phone screen. This allows the layer to function as a complete landing page. The technical requirements to do this include the use of specialised AdServing technology and a dedicated AdServer to which the entire marketing network of YOC is technically connected and which is centrally controlled. YOC's proprietary AdServing technology ensures optimized delivery of advertising (e.g. banners) for different screen sizes of end-user devices, as well as defined feature targeting such as device or mobile communications networks. Working with mobile operators, YOC's AdServing technology also allows socio-demographic targeting and helps to substantially minimize wastage. The use of this technology also offers similar features to those known from online advertising platforms, such as campaign management, monitoring, optimisation, multitenancy and comprehensive reporting possibilities. YOC also offers this technology to other portal operators, irrespective of marketing contracts.

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Mobile Advertising for KFC

The sectors in its portfolio make YOC's international mobile Internet marketing network Europe's biggest. This network includes the mobile websites and applications of the Handelsblatt publishing group, the Independent's mobile Internet portal, newspapers belonging to Westdeutsche Allgemeine Zeitung, wetter.com, Krone. at and the mobile websites of Viacom and the Heise newspaper publishing company. Advertising companies are billed for delivered advertising formats on a cost per view and cost per impression (CPM) basis.

International marketing network of the YOC Group (extract)

In addition to the marketing of premium sites, YOC offers mobile affiliate marketing via its subsidiary belboon-adbutler GmbH. It processes performance-based marketing using cost-per-performance models such as cost per click, cost per lead and cost per order. belboonadbutler has the third largest affiliate marketing network for fixed Internet in Germany and, in 2008, established one of the world's first mobile affiliate networks. ubiyoo GmbH was set up in 2009 and covers YOC Group's third form of marketing, bridging the gap between CPM and purely performance-based marketing. ubiyoo is a web-based, global, self-service technology platform that brings advertisers and publishers together on the mobile Internet on the basis of a variable pricing system. The network enables advertisers to place and target their advertising efficiently on the mobile Internet on the basis of an individually selected CPC or CPM pricing model. Publishers, on the other hand, can use ubiyoo to monetise their mobile website quickly and simply.

Business Activities in the Affiliate Marketing Segment

In the affiliate marketing segment, belboon-adbutler GmbH, a YOC subsidiary, offers advertising companies an affiliate marketing network under the "belboon" brand. Since the technical merger of adbutler and belboon into a single affiliate network in January 2009, YOC Group has operated the third-largest Internet marketing network billed on a performance-related basis in the German-speaking world. An affiliate network is an Internet-based marketplace for arranging and handling performance-related, digital advertising and sales strategies for advertising companies (merchants/advertisers) and distribution partners (affiliates/publishers). Advertising companies use the market place for their partner programmes to make offers to distribution partners. This includes agreed performance-related commissions for well-defined successes (such as sales and user registrations) and available advertising material. Distribution partners can apply for these partner programmes and integrate the available advertising material with their digital media (websites, newsletters and the like), thus generating income. YOC brings together the pools of registered merchants and affiliates via the marketplace and takes care of the billing between the parties, providing the necessary tracking technology to track and classify performance-related commissions, and providing a sophisticated management and control platform for the affiliate marketing activities of marketplace participants. Advertisers are primarily providers of products and services, such as online shops, banks, insurance providers and telecommunication operators, aimed at end customers.Publishers are primarily website providers of all sizes, newsletter senders and freelancers specialising in search-engine marketing. In line with the industry standards, YOC services are billed on a performance-related and a commission-related basis. YOC provides these services for fixed Internet but it is also one of the first networks to offer its partners via belboon the opportunity for affiliate marketing on the mobile Internet. Customers in the affiliate marketing segment include Fox Mobile Distribution GmbH (part

of the Jamba Group), 1822direkt GmbH, AXA Insurance, Promarkt GmbH, Deutsche Kreditbank AG (DKB), Neck ermann Versand Österreich AG and Tchibo direct GmbH.

Business Activities in the Mobile B2C Services Segment

In the mobile B2C services segment, Moustik S.p.r.l. and Moustik GmbH, subsidiaries of YOC AG, offer mobile value-added services and entertainment services for mobile phone customers in different European coun tries, supported by YOC AG. The product range includes background images, games, animations, logos, films, poems, ring tones etc. that are sold directly to the end consumer, either individually or by subscription, via mobile devices. End consumers are encouraged to buy content via their mobile devices by advertisements in traditional and digital media such as newspapers, TV, Internet and videotext. YOC also develops and licenses content for third parties, such as portals and network operators, for selling via mobile devices. These devel opments are based on YOC's own technological infra structure and accumulated knowledge about the target group needs of the registered users. The target group for mobile B2C services is primarily 14-29 year olds The Company has many years of experience in content syn dication and distribution, and works with well-known multimedia agencies and publishing companies.

Extensive mobile content portfolio

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Company Performance

Selection of new and existing customers

The Company's Performance in the Mobile Marketing Segment

The YOC Group has had locations in Germany, Austria, the UK, Spain, France and Belgium for several years and has been among Europe's leading providers of mobile solutions. It further strengthened its position in the last financial year and strongly expanded internationally. YOC Group develops tailor-made mobile marketing solutions for its customers to integrate mobile phones with the media mix based on scalable technical platforms. In a dif ficult market environment, the YOC Group succeeded in raising its sales in the mobile marketing segment in financial year 2009 by 33% to around EUR 17.5 million – of which EUR 1.6 million is down to the acquisition of Bluestar Mobile Ltd. und MIAM, S.L. It developed and implemented domestic and international marketing solutions, for example for existing customers such as Mercedes-Benz, Deutsche Post, Coca- Cola, Adam Opel, CDU, Kraft Foods and Mars. It implemented, for instance, a mobile marketing campaign that was completely free for consumers for Coca-Cola's Fanta brand. In addition the Group won over attractive new customers, such as Intel, Austrian Airlines, A. Lange & Söhne, Audi, Sixt and Bacardi Martini. New applications and technologies for implementing innovative mobile solutions are at the heart of all the Group's activities. The main drivers of growth in financial year 2009 were the increasing number of mobile phones, the ever-rising transmission speeds through the growing use of UMTS and the dramatic rise in the use of smartphones and the related rise in the usage of the mobile Internet. Moreover, in the wake of application stores appearing on the scene, the significance of mobile applications has risen sharply. This trend is increasingly reflected in requests by customers for mobile applications for their iPhones, BlackBerrys and other smartphones. Accordingly we launched applications for various smartphones for customers including Deutsche Post, Intel and Handelsblatt at the same time as they appeared on the mobile Internet. YOC has also positioned itself here as an innovator and technological market leader in the industry.

Diverse applications following the Handelsblatt relaunch

In 2009, there was also another significant increase in new mobile portals and services. Many large companies now have their own mobile website on the mobile Internet. Following the developments in recent years, however, the mobile Internet has long since ceased to be just a trend for large companies. More and more small and mediumsized companies realise that this medium is a useful and attractive communication channel – and increasingly use it as an additional sales tool. In all, YOC Group set up more than 100 new mobile portals in financial year 2009 for customers such as ZeitOnline, Kronen Zeitung and The Independent This growing trend led to a large number of these portals being attracted to the YOC marketing network in 2009. The steady internationalisation of this business line opened up new marketing opportunities. Thus, YOC was able to expand and internationalise the mobile marketing advertising portfolio with the greatest media penetration. Exclusive marketing agreements were signed with many big names including news.at, haymarket, Marco Polo, BlackBerry World, The Inquirer, ELPAÌS.com, wallstreet online, finanzen.net, elmundo.es, The Sun, mtv.de and viva. tv We also expanded and intensified our cooperation in marketing with a number of companies including the Handelsblatt publishing group. Besides extending the portfolio to include new mobile portals, such as karrriere.de, we also built up our specialist marketing with top-quality applications from various segments, such as the Handelsblatt BlackBerry and iPhone application. In financial year 2009 YOC Group also registered steadily rising numbers of page impressions on the mobile portals it marketed. It also saw significant growth in traffic as a result of marketing various mobile applications for iPhones, BlackBerrys and other smartphones. In line with this trend, advertising customers increasingly booked specific targeting options for smartphones in order to keep wastage as low as possible. We also used the last financial year to develop innovative advertising formats to underscore once again our in-house development and innovation competence. YOC initiated the new kind of "expandable ad" for the first time for Austrian Airlines: one click on the classical mobile advertising banner makes this scroll out across the whole mobile phone screen.

1: "click to expand"

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2: Picture of the expanded banner

3: Link to Austrian Airlines mobile website

Innovative advertising format: expandable ad from YOC

Developments in the mobile advertising market over the last financial year led to the formation of the industry's first separate mobile marketing company. By spinning off its mobile advertising unit into its own GmbH, YOC Group will in future be able to address its customers' needs in an even more targeted way. By opening up new sectors and developing new technologies for mobile marketing, mobile Internet and mobile advertising, YOC Group laid the foundations in financial year 2009 for more dynamic growth in these fields.

The Company's Performance in the Affiliate Marketing Segment

The entire online advertising market has become the third-largest advertising medium after television and print media. This development clearly shows how much potential this market has. Against this background, YOC acquired adbutler GmbH in March 2008 in order to strengthen and expand its own affiliate marketing activities. The whole of YOC Group's affiliate marketing business was bundled into belboon-adbutler GmbH at the beginning of financial year 2009. At the same time, the formerly separate affiliate networks, belboon and adbutler, were technically merged into a single network in January 2009. This means that YOC Group operates the third-largest affiliate marketing network in the German-speaking world. Various publishers are currently operating around 1,300 partner programmes in the affiliate network. Merchant partners include names such as Neckermann, Axa Insurance, Vodafone, Roche Pharma AG, mydays GmbH, DKB Bank and Holiday Check AG. The affiliate networks of YOC Group include about 60,000 advertisers.

YOC Group's Affiliate Marketing reported sales of EUR 6.5 million in 2009, a fall of 17% against the figure for the previous year (EUR 7.9 million). belboonadbutler GmbH (formerly adbutler GmbH) was consolidated in the previous year from 12 March 2008. Adjusted to take account of acquisitions (EUR 0.9 million), sales therefore dropped 26%. A major feature of financial year 2009 was the organisation across all locations of staff and business processes. Communicating the "new" network and expanding the business were major challenges. In the fourth quarter of 2009, we made all the resolutions and took all the measures required to concentrate the business at our main location in Berlin. We shall have completed all the measures involved by the end of the first half of 2010. We continued to pursue our strategic goal of internationalising the affiliate marketing business in financial year 2009 by laying the foundations for a roll-out into France, Belgium and the Netherlands. We are likely to enter these markets in the second quarter of 2010. belboonadbutler GmbH is thus ensuring its growth in the future by meeting market demands and broadening its area of activity. By taking this step, belboon-adbutler will also be supporting YOC Group's international orientation.

The Company's Performance in the Mobile B2C Services Segment

Developments in the mobile entertainment market show that the economic crisis and the resulting increase in consumers' cost-consciousness have had a lasting negative impact on the market. Moustik reported sales of EUR 2.1 million for 2009, 18% below the figure for the previous year (EUR 2.5 million).

Reasons for the fall include the regulatory step taken by the Belgian legislature, which led to a transfer of advertising investments to the services provided by Moustik in Germany. These investments led to a slight year-on-year rise in sales over the last financial year, so that German business sales by Moustik companies were higher than budgeted. Overall, however, YOC Group's mobile B2C business did not quite meet expectations. Nevertheless it made a profit in the second half of 2009. This is down to what is traditionally a strong fourth quarter and the initial effects of the advertising investments together with new features launched since the middle of the year. New joint ventures with additional content providers and focussed advertising investments are also intended to have a positive effect on the next financial year.

Further Development of IT Infrastructure and Technological Integration

YOC has a high-performance IT system landscape and a YOC-developed software product that can be used for mobile and Internet-based services. The underlying technology platforms were entirely developed by YOC and are very flexible, powerful, reliable and scalable. They have numerous interfaces that enable the integration of networked multi-media applications. YOC has its own IT department for the support and development of the software (e.g. FIT technology). At first, mobile marketing measures were text-message based only; nowadays, however, a number of varying technologies are available. YOC developed its own software platform that links the varying technologies to create individual solutions for every mobile marketing campaign that is specific to the target group in question and its media use. In line with the rapid technological developments, the focus of its activities has increasingly shifted in recent years from the conception and creative design of marketing concepts and the technological implementation and support of mobile marketing measures to providing a full service. Technologies such as mobile advertising, SEM/SEO, QR codes and augmented reality have made a particular contribution towards this end.

YOC's mobile Internet technology enables the conception of new mobile Internet portals and the transformation of fixed Internet portals to make it suitable for mobile phone operation and the technical implementation and the support of running operations. The mobile portals of more than 500 well-known companies use this technology. It also includes a content management system that enables the customers to take an active part in developing, processing and managing the content of their mobile Internet portals. The user-friendly design enables customers to post content on their mobile websites without any programming skills. Intuitive technology enables YOC, for example, to sell products directly via mobile websites. YOC Group provides its customers with innovative applications, including ones for iPhones, Androids and BlackBerrys, as well as Java and Flash applications. YOC also develops mobile TV and video formats that are compatible with all commonly used mobile phone devices. This includes the development of advertising channels, using voice and video messages to directly address customers. Linking sound, images and telephony enables YOC to increase direct interaction between consumers and the marketed product or advertising company. Technologies developed by YOC include location-based services, such as real-time traffic monitoring, navigation services. All products help customers to benefit from direct interfaces with all mobile phone operators that offer easy payment methods for paid content. The following technologies are the most crucial among the different technologies used by YOC:

In the mobile Internet segment, it is the FIT mobile platform which is mainly used, and on the foundation of which fixed websites can be automatically transformed into mobile websites. YOC's technology platform now also includes a content management system (CMS) for the operation of Internet portals, which can be used to quickly and easily implement portals, microsites and landing pages as part of mobile marketing and mobile Internet campaigns. The YOC device database that is updated on a daily basis ensures the best representation of WAP portals possible on a huge number of commonly-used mobile handsets. This database is also used for MMS- and text-message based mobile marketing projects.

The YOC-developed mobile AdServing technology was launched by YOC Group in early 2007. This technology platform encompasses all functions implemented in online advertising platforms such as campaign management, content management, multi-client capabilities and extensive reporting features and possibilities. This mobile advertising technology also makes it possible to directly address target groups taking into consideration the users' different mobile handsets and/or mobile phone operators. The mobile coverage network ubiyoo was launched at the end of 2009. It functions on a global basis and is also based on the AdServing technology. This technological platform also offers specific targeting options by country, channel, weekday or hour of the day, as well as flexible pricing models.

We have also created a flexible interface structure that makes it easier to link up external systems. It is used for example to send user data generated via contests directly to the CRM systems of the customers. This platform can also be used to sell mobile content via mobile websites. The integrated billing interface enables billing via the user's mobile phone bill.

The individual software modules are developed by YOC Group developers using modern, data-based systems on the basis of object-oriented programming language. The database and application servers used by YOC are set up at the branches in Berlin and Cologne and are managed by the YOC IT department. To ensure security, there are also other servers, which are located in electronic data processing centres certified by the German Technical Inspection Service (TÜV), managed by YOC and hosted by external service providers. To avoid the disruption of service due to hardware failure, system and network reserve capacity is available. To prevent unauthorised persons from accessing the systems of YOC Group or third party data, we installed firewall systems, encrypted protocols and access rights management at critical points. Critical data is also duplicated in backup systems and backed up at different geographical locations.

Internationalisation

YOC Group's foreign business performed well in financial year 2009. In May 2009, we took over our UK competitor, Bluestar Mobile Ltd., with its registered office in London. It complements perfectly the work carried out until now by the existing YOC Ltd. Bluestar Mobile Ltd. customers include publishers like The Sun, The Guardian and Trinity Mirror as well as brands like Bacardi and Motorola where Bluestar Mobile Ltd. acts as mobile marketing service provider. In the course of last year, we succeeded in switching the media customers' mobile portals, which had previously been based on an external technology, to the YOC mobile Internet technology. YOC Ltd.'s business, which is mainly involved in mobile advertising, performed to plan in 2009. YOC Ltd.'s business and the takeover and successful integration of Bluestar Mobile Ltd. enabled YOC Group to become one of the three leading providers of mobile marketing, mobile Internet and mobile advertising in the highly competitive UK market. In July 2009, YOC Group formed YOC Central Eastern Europe GmbH (CEE) in Austria with its registered office in Vienna in order to do justice to the market positioning it has achieved in Austria. YOC CEE operates mobile portals and iPhone applications for a large number of publishing companies and major Internet providers, such as Krone, News.at, Styria Media Group, ORF and Austrian Airlines. Concepts for mobile marketing and mobile advertising campaigns are developed and executed for customers like Bacardi, Mars, REWE and other providers. In September 2009 YOC Group acquired the Spanish mobile advertising provider, Interactive Advertising Media, S.L. (MIAM) with its registered office in Madrid. The purpose of this company is the marketing of mobile advertising space. MIAM is specialised in this business and is one of Spain's leading providers of mobile advertising. On being taken over by YOC Group, MIAM acquired access to its complete range of products and so extended its portfolio of services to include mobile marketing and mobile Internet. MIAM today is Spain's only full-service provider of mobile marketing. The first Spanish customer for the new product areas is L'Oréal España, which trusts in YOC Group's mobile Internet technology. The takeover of this Spanish provider has further extended YOC Group's international presence and enabled it to offer customers who particularly want to book pan-European campaigns a valuable Spanish advertising network in addition to our existing European advertising network.

Personnel

As at the end of financial year 2009 YOC Group had 173 permanent employees. The year-on-year rise in headcount is due to a number of factors including the expansion of international business and the acquisition of Bluestar Mobile Ltd. in the UK and MIAM, S.L. in Spain. In a demanding market environment, the technical qualifications and passion of our employees are a decisive competitive factor. As a result of the challenges facing them daily and the broad scope of their training, our employees are specialists in their respective fields. The company ensures this is achieved by very carefully selecting new colleagues from a growing number of applicants. This demonstrates not only the power of the market environment to attract candidates but also the growing attraction of YOC Group as an employer. A par ticularly high level of commitment and the desire to achieve in n ov a t ive s o l u t i o n s d is t in g u is h t h e c o m p a ny 's employees. YOC Group rewards this effort by trusting its employees and offering them considerable leeway in structuring their work, internal and external training opportunities, and regular events.

Permanent employees Total number of employees Freelance employees

Management Outlook

Owing to the leading market positioning we have built up, based on our international approach, YOC Group's unique product portfolio and the generally dynamic development of the market, YOC Group assumes that business development in the current financial year will continue to be positive.

49

Strategic Acquisitions

In order to boost international growth and open up new markets, YOC AG made two new strategic acquisitions in financial year 2009.

Mobile Interactive Advertising Media, S.L.

On 22 September 2009 YOC AG took over 100% of Madrid-based Mobile Interactive Advertising Media, S.L., a spin-off from Nokia. This takeover positions YOC Group as Spain's leading provider of mobile advertising. In addition Mobile Interactive Advertising Media, S.L. gains access to YOC Group's complete range of products, thus becoming Spain's sole full-service provider of mobile marketing. The integration of Mobile Interactive Advertising Media, S.L.'s marketing network substantially expands YOC Group's leading marketing network throughout Europe, giving it a unique market position. YOC expects to achieve a high level of synergies through this acquisition, partly due to the cross-selling potential for mobile marketing and mobile Internet.

Bluestar Mobile Ltd.

On 27 May 2009 YOC AG took over 100% of Bluestar Mobile Ltd. with its registered office in London. In acquiring this British mobile marketing and mobile Internet provider, YOC Group has significantly expanded its presence in the UK market, where it has been since 2005. Bluestar Mobile Ltd.'s business is an ideal supplement to the range of services provided by YOC Group. The lack of overlaps in the customer portfolios of the two companies means that YOC AG's sales volume on the UK market has expanded substantially. Bluestar Mobile Ltd. customers include The Sun, The Times, News of the World, New York Post, Mirror, Motorola, 20th Century Fox, Bacardi and a host of other big names. YOC AG expects the integration of Bluestar Mobile Ltd.'s business into YOC Group to be followed by a high level of synergies. A major potential for cutting costs is hidden by, for instance, Bluestar Mobile Ltd. bringing technical services that it used to obtain externally in house by having them provided from now on by YOC.

Sales Trend and Overall Performance

Despite the economy cooling at the end of 2008, YOC Group continued steadily along its growth path in financial year 2009. The strategy it had chosen of developing the company into an international business as a full-service provider for using mobile phones as a medium for advertising, information and transactions has proved to be a decisive factor in its success. In economically difficult times, it has also secured YOC Group's market position on a lasting basis. In the wake of the expansion of its business volume, sales revenues rose to EUR 26.1 million in the period under review. Compared to the previous year, when the company generated sales of EUR 23.6 million, this represented a rise of 11%. Due to own work capitalised in the form of software developed in house amounting to EUR 1.0 million, changes in inventories of finished goods and goods in progress amounting to EUR -0.2 million, and other operating income amounting to EUR 0.2 million, our total output in 2009 came to EUR 27.1 million. This improved the Group's total output over the period under review by around EUR 2.7 million over the EUR 24.3 million achieved in the previous year.

Sales by Segment

In the core mobile marketing segment, sales revenues rose by 33% over the period under review from EUR 13.2 million in 2008 to EUR 17.5 million. Of this amount, EUR 1.6 million relates to the acquisition in period under review of Bluestar Mobile Ltd. and Mobile Interactive Advertising Media, S.L. The share of this segment in the Group's total earnings thus rose to 67%. The continuing upward trend reflects the successful strategy of customer retention and the equally successful acquisition of new customers, which allowed major campaigns and increasingly long-term projects to be implemented. Sales in the affiliate marketing segment dropped year on year by 17% to EUR 6.5 million and contributed 25% to the Group's total sales. belboon-adbutler GmbH (formerly adbutler GmbH) was consolidated in the previous year from 12 March 2008. Adjusted to take account of acquisitions, sales therefore dropped 26%. The drop on sales is mainly due to the insolvency of a major customer and the temporary interruption to the affiliate marketing programme of another major customer. The sales volume of the mobile B2C services segment dropped from EUR 2.5 million to EUR 2.1 million on a yearon-year basis. The share of this segment in total earnings accordingly fell to 8%.

51

Distribution of sales by segment in %

Sales by region

The rise in sales revenues was achieved both internationally as well as on the German domestic market. Germany therefore remains the most important market for YOC. In financial year 2009, the Group built up its domestic sales by 4% from EUR 20.3 million to EUR 21.1 million and so reinforced its competitive position. The positive performance by the core mobile marketing business was responsible for this rise. The contribution to total earnings from sales in Germany came to 81% compared to 86% in the previous year.

Earnings generated internationally rose year on year by 49%, with sales rising from EUR 3.4 million to EUR 5.0 million in financial year 2009. The growing sales revenues prove that the YOC Group's internationalisation strategy was correct and underscore the significance of markets outside Germany. The most important international markets continued to be the UK and Belgium which contributed sales of EUR 2.2 million and EUR 1.2 million respectively. The remaining foreign sales were spread over a number of countries including Austria with EUR 0.7 million, Switzerland, Spain, France, the Netherlands and, for the first time, the USA.

Sales by region (in EUR million)	2009	2008
Germany	21.1	20.3
UK	2.2	1.1
Belgium	1.2	1.3
Austria	0.7	0.5
Spain	0.5	0.0
USA	0.2	0.0
Misc.	0.2	0.4
Total	26.1	23.6

Distribution of sales by region in %

Gross Income

Gross income increased in the period under review by EUR 2.2 million to EUR 16.5 million compared to EUR 14.3 million in financial year 2008. The gross margin, which represents the ratio of gross income to total output, improved from 59% in 2008 to 61% in financial year 2009. The disproportionately low rise of 5% from EUR 10.0 million to EUR 10.5 million in the cost of materials compared to the rise in the sales volume is responsible for the improvement in this key figure. This positive development is mainly down to growth in the mobile marketing segment with its solid margins.

Personnel Costs and Personnel Development

In realising the goals it had set for growth, YOC Group expanded its headcount in the period under review both internally and externally. This raised the average number of permanent employees from 133 to 159. The main reasons for this were, on the one hand, growth from the acquisition of the subsidiaries, Bluestar Mobile Ltd. and Mobile Interactive Advertising Media, S.L., and, on the other, the increase in headcount in Professional Services and Sales. Due to the increase in staff, personnel costs rose to EUR 9.4 million in financial year 2009. This is an increase of EUR 2.2 million on a year-on-year basis, pushing the share of personnel costs up from 29% to 35%. Adjusted for extraordinary items, personnel costs amounted to EUR 9.2 million in financial year 2009.

Personnel costs (in TEUR)	2009	2008
Personnel costs	9 , 3 74	7,125
Adjusted personnel costs	9,250	7,125

At the end of financial year 2009, YOC Group had 173 permanent employees. There were in addition a further 32 people working for the Group, namely freelancers, apprentices, trainees and those working only for a short time, so that the total headcount came to 205 at the end of 2009.

Other Operating Expenses

Other operating expenses rose 20% year on year from EUR 5.1 million to EUR 6.1 million. This was primarily made up of infrastructure costs, advertising costs and commission payments to partners for procurement of contracts. Reasons for the rise in other operating expenses in the period under review included the acquisitions and the consequent rise in the number of consolidated companies as well as extraordinary items amounting to EUR 0.7 million caused by the switch to the Prime Standard segment (EUR 0.3 million), defaults by customers (EUR 0.2 million) and higher marketing expenses (EUR 0.2 million). The ratio to total output, taking extraordinary items into account, is 23%, higher than the figure of 21% in the previous year. Adjusted for extraordinary items, the ratio of other operating income to total output stands at 20%, representing a disproportionately low rise compared to the rise in total output.

OOE (in TEUR)	2009	2008
OOE	6 ,115	4,975
Adjusted OOE	5,437	4,975

EBITDA

YOC Group achieved operating earnings before depreciation and amortisation of EUR 1.0 million in the period under review compared to EBITDA of EUR 2.1 million generated in financial year 2008. The fall in the EBITDA margin to 4% is almost exclusively down to the domestic and international expansion of business activities and related one-off expenses.

EBITDA (in TEUR)	2009	2008
EBITDA	1 , 02 5	2,086
adjusted EBITDA	1 , 8 2 8	2 , 2 1 1

EBITDA in the mobile marketing segment rose year on year from EUR 2.7 million to EUR 3.0 million. This change is mainly due to the sharp rise in sales revenues in this business line. Operating earnings before depreciation and amortisation in the affiliate marketing segment fell to a disproportionately low extent in relation to the change in sales. EBITDA in the mobile B2C services segment came to EUR 0.1 million in financial year 2009, roughly at the same level as in the previous year. YOC Group's overhead expenses for financial year 2009 amounted to EUR 3.1 million (2008: EUR 1.9 million) – these include extraordinary items of EUR 0.6 million.

EBITA (EBIT before purchase price allocations)

Earnings before interest, taxes and depreciation/amortisation from purchase price allocations (EBITA) amounted to EUR 0.6 million in financial year 2009 compared to EUR 1.7 million in the previous year. After adjusting for extraordinary items, it came to EUR 1.4 million.

EBIT

In the period under review EBIT fell to EUR 0.1 million compared to EUR 1.2 million in the previous year. After adjusting for extraordinary items, it came to EUR 0.9 million. Depreciation/amortisation arising from purchase price allocations rose as a result of the new company acquisitions to a total of EUR 0.5 million in financial year 2009.

Financial result

The financial result in financial year 2009 amounted to EUR -0.7 million, around EUR 0.3 million lower than the figure for the previous year. Financial income over this period stood at EUR 0.1 million. This has to be set off against financial expenses amounting to EUR 0.7 million, which were caused, on the one hand, by the interest expense for the loans taken up to finance the acquisitions in that year and, on the other, by the way the interest-rate hedging transactions related to these loans have to be reported.

Financial income 64 Financial expenses 727	2008
	173
	549
Financial result -663	-376

Earnings before tax

YOC Group ended financial year 2009 with a pre-tax loss of EUR 0.5 million compared to a pre-tax profit of EUR 0.9 million in 2008. Taking extraordinary items into account, there was a pre-tax profit for financial year 2009 of around EUR 0.3 million.

Earnings before tax (in TEUR)	2009	2008
EBT	-534	867
adjusted EBT	268	992

Earnings after tax

In financial year 2009, earnings af ter tax came to EUR -0.1 million, EUR 0.7 million down on the figure for the previous year. After adjusting for extraordinary items, adjusted EAT stood at EUR 0.7 million.

Earnings after tax (in TEUR)	2009	2008
EAT	-143	510
adjusted EAT	659	635

Changes in Net Assets and Financial Position

Net Asset and Financial Position

YOC Group's total assets rose year on year by 3% to EUR 29.0 million as at 31 December 2009. This slight increase only reflects to a limited degree the actual changes in the balance sheet structure resulting from the acquisitions made in 2009, the related financing activity and the reporting of the intangible assets included in the financial reporting of the acquisitions.

Non-current assets

The changes become clearer when the assets are considered individually. In 2009 non-current assets amounted to EUR 19.7 million, comprising 68% of total assets compared to 60% in the previous year. This is an increase of EUR 2.8 million, which is mainly due to the changes in two balance sheet items: As part of the acquisition of Bluestar Mobile Ltd. and Mobile Interactive Advertising Media, S.L., intangible assets were capitalised, which explains a large part of the EUR 1.5 million increase in this balance sheet item to EUR 8.0 million. At the same time, goodwill rose as a result of both these purchases to EUR 10.7 million. Impairment tests did not lead to any valuation allowances being made for this goodwill. The remaining items comprising tangible assets of EUR 0.7 million, deferred taxes of EUR 0.2 million and financial assets of EUR 1,000 only changed slightly year on year. The financial assets include a holding by YOC AG of around 2% in mando.tv GmbH, which was acquired in 2007 for strategic reasons. 60% of non-current assets were covered by equity capital on the reporting date.

2009	2008
725	624
10,744	8,957
8,036	6,510
1	1
154	749
19,660	16,841

Current assets

Current assets as at the reporting date amounted to EUR 9.3 million, down on the previous year by 18%. The main reason for this change was a 38% fall in cash at banks to EUR 2.8 million. The funds were required to repay loans, to pay out conditional purchase prices (earnouts) and for the acquisition of Bluestar Mobile Ltd. and Mobile Interactive Advertising Media, S.L. In the wake of the expansion in business activities and of the acquisitions, trade receivables also rose by 20% contributing EUR 5.9 million to the balance sheet on the reporting date.

Current assets (in TEUR)	2009	2008
Inventories	30	236
Prepayments	1 2 1	88
Accounts receivable	5,944	4,945
Receivables arising from other assets	157	224
Tax receivables	2 3 1	48
Securities	0	1,340
Cash at banks	2,825	4,529
Total	9,308	11,409

The other items under current assets comprise prepayments of EUR 0.1 million, tax receivables of EUR 0.2 million and other assets of EUR 0.2 million.

Equity Capital

YOC Group's equity capital fell by 3% from EUR 12.3 million in 2008 to EUR 11.9 million on the reporting date. The fall is both a result of the 10% drop in revenue reserves to EUR 1.3 million as a result of the allocation of the loss for the year as well as of the purchase of treasury shares in the amount of EUR 0.3 million. Moreover, converting the financial statements of the UK subsidiaries generated exchange losses, which slightly reduced equity capital. The increase in the capital reserve is mainly the result of the Management Incentive Programme and is equal to the personnel expenses reported in the period under review. In view of the minor adjustments, the capital ratio remained almost unchanged (41% compared to 43% in the previous year). Equity capital and non-current liabilities account for 51% of total equity capital and liabilities on the reporting date.

Equity capital (in TEUR)	2009	2008
Subscribed capital	1,750	1,750
Capital reserve	9,143	9,100
Revenue reserves	1,254	1,398
Difference arising from currency conversions	-15	3
Treasury shares	-263	0
Total	11,869	12,251

Non-current liabilities

The Group's non-current liabilities rose by EUR 0.3 million and amounted to EUR 3.0 million by the reporting date. The rise was mainly the result of taking up a further acquisition loan which pushed up liabilities to banks from EUR 0.8 million to EUR 1.3 million. Moreover, other non-current liabilities rose as a result of the allocation of the agreed variable purchase price for the acquisition of Mobile Interactive Advertising Media, S.L. and the valuation of the interest-rate swap as at 31 December 2009 from EUR 0.1 million to EUR 0.8 million. Deferred taxes fell to EUR 0.8 million. Non-current provisions, which continue to stay at less than EUR 0.1 million and were formed for archiving business documents, had little influence on the rise in non-current liabilities

2009	2008
48	48
1,330	837
823	146
802	1,639
3,003	2,670

Current liabilities

Current liabilities increased in financial year 2009 by 6% from EUR 13.3 million to EUR 14.1 million. The rise in trade payables from EUR 1.5 million to EUR 3.7 million was the main reason for this. Prepayments received also rose in financial year 2009 from EUR 1.2 million to EUR 1.6 million and were primarily booked in the affiliate marketing segment. This is to be set off against the change in current liabilities to banks as a result of the repayment of existing loans. As at the reporting date, these liabilities still stood at EUR 4.6 million, representing a year-on-year fall of 9%.

2009	2008
1,629	1,225
3,707	1,546
4,645	5,086
3,852	5,070
128	149
135	253
14,096	13,329

Allocation to current or non-current financial liabilities is dependent on the maturity date. Additional information, in particular on residual terms, may be found under liabilities in the notes to the consolidated financial statements. Partly as a result of paying out the variable purchase prices for acquiring the subsidiaries, Brutus Media GmbH, Sevenval GmbH (formerly Sevenval AG) and belboonadbutler GmbH (formerly adbutler GmbH), other current liabilities also fell by 24% to EUR 3.9 million compared to EUR 5.1 in the previous year. Short-term liabilities to financial institutions include a €4 million acquisition loan that is to be converted into a long-term loan. A smaller part of the change in current liabilities is made up of the allocation to current provisions for financial statements and audit costs, which stood at EUR 0.1 million as at the end of financial year 2009, and tax liabilities amounting to EUR 0.1 million.

Investments (without Acquisitions)

The additions to fixed assets arising from investments amounted to EUR 0.6 million in financial year 2009. These include the company acquisitions made in the course of the last financial year and mentioned above. EUR 0.3 million was spent on tangible and EUR 0.3 million on intangible assets. In the previous year, YOC Group spent EUR 0.2 million on tangible and EUR 0.1 million on intangible assets. The total investment volume of EUR 0.6 million was higher than depreciation on fixed assets in the amount of EUR 0.4 million. Development expenditure, in particular for the Group's mobile AdServing technology, our mobile Internet technology and our affiliate marketing platform belboon, amounted to EUR 1.0 million.

Cash-Flow

At the end of the period under review, YOC Group's cash and cash equivalents stood at EUR 2.8 million. This meant a year-on-year drop in liquidity of EUR 1.7 million. But the main factor here was only to a small extent the loss for the year – ultimately the reasons behind the fall in funds were the rise in acquisition costs from EUR 1.4 million in the previous year to EUR 3.8 million due to the purchase of the two subsidiaries, Bluestar Mobile Ltd. and Mobile Interactive Advertising Media, S.L., as well as the payment of agreed variable purchase prices (earn-outs) for earlier acquisitions.

To improve the cash flow statement, sales of securities amounting to EUR 1.4 million were allocated in the period under review to cash flows from investment activities. The amount for the previous year of EUR 1.2 million was reallocated accordingly. The significant rise in investments over the period under review reflects the company's consistent expansion of its potential. Investments in tangible assets and intangible assets, which rose year on year by 122% to EUR 0.6 million, also increased, as did payments for development costs of EUR 1.0 million. Changes in cash flows from financing activities amounted to around EUR 0.2 million, the net result of a EUR 1.2 million loan repayment and the taking up of a new loan in the amount of EUR 1.3 million. In addition there was a cash outflow EUR 0.3 million for the purchase of treasury shares reported under cash flows from financing activities.

Financial Management

As at the repor ting date of 3 1 December 2009, YOC Group held cash and cash equivalents amounting to EUR 2.8 million. All of the securities that the Group held, amounting to EUR 1.4 million, were sold. Available liquidity is invested by the company in time deposits, optimising maturities and interest rates.

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Research and Development

The costs of research and development of new products and technical innovations were incurred in the mobile marketing and affiliate marketing segments. They totalled EUR 1.6 million in the period under review compared to EUR 1.3 million in financial year 2008. Of this amount, around EUR 0.4 million was accounted for by the affiliate marketing segment, EUR 0.2 million for the development of a mobile platform in the mobile B2C services segment and around EUR 0.1 million on further developments in mobile advertising product areas. YOC Group also invested EUR 0.9 million to further develop the mobile Internet technology.

Summary of the Net Asset and Financial Position and Results of Operations

As at the time the management report was being prepared, the company's net asset and financial position and the results of operations show that YOC Group is in a healthy state.

Forecast Report

Mobile Marketing

With the early recovery of the tense global economic situation during the latter half of 2009, overall economic development is expected to be fairly positive during 2010 with further improvement likely during the following year based on economic forecasts such as those of the IMF (International Monetary Fund). The YOC Group is likely to profit above the average from the positive development of these market conditions, which is also expected to be reflected in the telecommunications market. BITKOM, the industry association forecasts further rises in the sale of mobile end devices in Germany during 2010. Smartphones such as the iPhone, or any of the by now numerous competing devices, are in high demand by virtue of the nationwide use of the UMTS network and the flat-rate charges for mobile Internet surfing. With the sharply increasing use of mobile data services – this has also been confirmed in studies carried out by market research bodies such as TNS Infratest – the "mobile" medium is becoming even better established in the communications mix of advertisers. The mobile medium is particularly well suited for this task as this instrument of communication keeps wastage to a minimum and delivers measurable results.

YOC Group is in a prime position to benefit in particular from these developments due to its leading AdServing technology, extensive mobile advertising marketing network and market-leading mobile Internet technology. In addition to this it has many years of experience in the design and implementation of mobile marketing solutions, through which intense relationships with customers and agencies have been built up. Through its strategic positioning, the YOC Group can thus provide a full-service offer which is unique in Europe and covers the entire value-added chain for the use of mobile phones as information and advertising media. In 2010 as well, the unique market positioning resulting from the combination of the product segments Mobile Marketing, Mobile Advertising and Mobile Internet will prove to be the optimal strategic structure. The increased merging of the individual product segments will tend to bring out further synergies within the YOC Group. On the basis of these general factors which favour business development, the YOC Group anticipates a significant rise in the operational result in the Mobile Marketing segment for the financial years 2010 and 2011. This can be traced in particular to the expected rise in order volume. Significant investments and one-off expenses such as those recorded during 2009 are not currently envisaged. An obvious increase in cash flow is thus expected.

The recovery of the international markets will be exposed to risk once the government economic stimulus programmes have ended. The YOC Group's international positioning in Europe will in future continue to be driven forward and consolidated, but will also be correspondingly exposed to other risks despite the substantial volumes of investment earmarked for this. Investments are also earmarked for the build-up of the new mobile ad network ubiyoo. The launch of a new product in a newly developing market environment is generally exposed to certain risks, although due to the unique market position, the longstanding familiarity with the market and the synergies to be expected with other product segments, these are easily assessed.

Affiliate Marketing

The Affiliate Marketing business segment will also benefit during the coming years from the development of the economy as a whole as well as the growing digitalisation of the advertising sector as predicted inter alia by OVK, the online marketing group within the German Digital Industry Association (BVDW). The segment will also profit from the synergies between advertising via the Internet and advertising through mobile phones. The YOC Group has also been steadily working on expanding the affiliate network and attracting new exclusive partner programmes. By focusing primarily on providing the best possible customer service it is planned to retain existing customers in the long run and attract new ones. The gradual internationalisation of the affiliate marketing business segment already initiated is part of the strategic business policy of the YOC Group and will be consistently developed in the future. Over the long term, another goal is to achieve leadership of the market in technological as well as functional terms so as to separate the company from its competitors and to gain further shares of the German-speaking markets.

We are expecting a clear rise in sales over the coming two years within this segment. Through the improved cost structure which is envisaged during the coming financial year, operating results are also expected to improve. The above assumptions are based on the premise that the partner programmes will continue to develop as planned.

Mobile B2C Services

Business in the Mobile B2C Services segment is expected to develop moderately or remain stable in Belgium and Germany during the coming year. Over the short term the focus will be on additional distribution channels as part of a reorientation of advertising strategy. Distri bution channels on the mobile and fixed Internet are also to be developed further and better linked. As soon as the new set-up comes into effect stronger growth is expected to occur in the long term. The converted advertising strategy and associated optimised cost structure should bring about a rise in the operational result over the medium term. This development will be exposed to risk by the coming results of the new distri bution channels and through possible changes in the law by the legislative authorities which might restrict business operations. At the time of preparing the finan cial statements, there is no information concerning changes to the law planned for the foreseeable future. In contrast, it is expected that the sector-specific gen eral conditions will tend more to favour business in the Mobile B2C segment during the coming years.

Outlook

Overall, we expect the YOC Group to continue its posi tive business development during the next two financial years which once again should be reflected in doubledigit growth.

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Risk Report

Principles of Opportunity and Risk Management

Formal risk management procedure

The YOC Group is an internationally active service provider operating in a dynamic market, which naturally involves entrepreneurial, sectoral and financial risks. These risks can arise because of the company's own business activities as well as external factors. The YOC Group has taken appropriate measures in order to allow it to detect and minimise these possible risks promptly. For this a suitable risk management system has been established through which the risks are gathered, evaluated and constantly monitored where necessary through a company-wide risk inventory that is carried out at regular intervals.

The YOC Group's risk policy which was established by the Management Board has not changed and is part of the company policy of seeking to achieve sustained growth, to enhance goodwill and to secure the existence of the company over the long term. To do this, necessary risks have been consciously taken on in awareness of the risk-reward relationship in order to make use of the market opportunities available and to allow the inherent potential success to be utilised. For the monitoring and control of these risks, the YOC Group has set up a risk management system with corresponding control and management systems. The operational management and Management Board have access for the management of risk to a reporting system with reports prepared at regular intervals by those responsible for handling risk and processed by the Risk Management unit. Forward-looking risk control as part of the internal control system allows early detection and calculation of risks and opportunities, so allowing prompt and appropriate response and the guarantee of efficient control of corporate performance. The measures to be undertaken as part of controlling risk are executed within the operational units.

Regular checks are carried out to ascertain whether the methods and processes used in risk management to identify, assess, control, monitor and communicate the risks are appropriate, and to adapt them to internal and external developments. Neither during the 2009 financial year nor at its end have any particular risks become apparent within the context of regular risk reporting which would have jeopardised the continued existence of the Group or any of its subsidiaries.

Risk management

Market Risks and Risks of Competition

The YOC Group is an actor in a dynamic and evolving market. This environment requires highly flexible processes and structures. Risks include changes and the unexpected development of market and competitive conditions, such as the entry of new competitors into the market, which the YOC Group endeavours to counter by continuous and precise market and company monitoring. It is the Market Research and Business Development segments in particular which have the task of detecting and recognising trends and new developments. Transparent and fast decision-making structures make it possible to respond immediately to risks and take appropriate measures to limit them, if need be. The YOC Group's market position continues to be strengthened by measures to retain customers and by technical and innovative expertise to improve and develop the product portfolio. Newly developed products, however, might not prove marketable in the long term and so render existing investments not worthwhile.

Changes in economic factors may also have an impact on the development of the YOC Group because of decreased orders, particularly in the advertising sector. Through the broad range of products and services offered and the diversified customer base, the economic crisis affecting all segments during the past financial year was overcome without strong fluctuations. With the recovery in the economic situation, the YOC Group is in an excellent position so that the risk of a fall in sales caused by economic factors is considered to be low.

Thanks to its leading market position, the YOC Group has many options open to it in terms of market and competition policy and a comfortable bargaining position when dealing with suppliers and customers. A crucial factor in competition is also continuous improvement of cost structures. That is why a number of measures have been developed and implemented. Keeping costs variable is still considered to be extremely important and comprises a deciding factor when endeavouring to maintain a competitive edge.

Risks from Acquisitions

Because of the company acquisitions made during the past three financial years and the Group's evolution into a full-service provider, the first synergy effects are already being felt. These potential synergies will be built up further in later years and are to be fully utilised. At all times, however, there is the risk that the potential synergies will not be achieved to the extent planned and that subsidiaries will not achieve the planned sales revenue. The goodwill arising in connection with the acquisition could mean value impairments because of a negative economic trend, partly through writedowns of goodwill which would depress the group result. At present, however, the general economic framework conditions and foreseeable development of the subsidiaries are deemed emphatically positive, so that no value impairment is to be expected within a foreseeable period.

The acquisitions of subsidiaries not only posed financial

risks but also involved challenges for the organisational consolidation of the companies. We have focused on the different corporate structures and the arrangement of organisational interdependencies so that synergies can ultimately be used optimally. During the past three financial years it has been impressively demonstrated that even larger companies have been integrated into the overall enterprise almost without difficulty.

61

Technological Risks

The business processes of the YOC Group are to a high degree based on modern technologies in the field of mobile communications and the Internet. To guarantee that these largely automated processes run efficiently and reliably, the YOC Group is pursuing a uniform IT strategy which is designed to ensure constant review and enhancement of the IT systems. The arrangements for the security of information comprise, for example, the implementation of encryption mechanisms, firewalls and virus scanners throughout the Group. Precautionary measures to guard against the breakdown of technical equipment have been taken by providing parallel operation of the technical applications, to ensure the smooth handling of customer orders at all times. In addition, back-up systems protect the database from the possible loss of data and ensure constant availability.

f technological innovations are not consistently advanced by producers, infrastructure providers and their technology partners, the growth of the company could be affected. Therefore, qualified internal and external specialists work on business-specific in-house developments if required. The YOC Group mainly opts for sector-specific standard software of well-known providers when choosing IT systems.

Financial and Treasury Risks

Ensuring constant liquidity is the main role of the YOC Group Treasury. Bad debt risk is counteracted by stringent debtor management, which focuses on monitoring the age structure of debts and the management of doubtful debts. The YOC Group's sales are made with a large number of customers of high credit standing. There is no dependence on specific customers. Claims are preferably denominated in the euro which is the Group's house currency. Payment flows in foreign currencies therefore only make up a comparatively small proportion of payments and so there is only a slight risk from possible foreign exchange fluctuations. Derivative financial instruments (interest rate swaps) are used to reduce the 4

cash flow-relevant interest rate risk. Interest hedging serves the purpose of reducing interest costs in line with a minimisation of interest expenditure volatility.

Moreover, these measures also serve the purpose of reducing the liquidity risk, which is also limited by permanent liquidity management. Furthermore, liquidity management ensures current and forward observation to manage the risks of fluctuations in payment flows. Information about the status of the Group's managed funds from all its companies is provided centrally and communicated to the management at regular intervals. Planning also involves liquidity planning for all the Group's accounts. Liquid assets and bank loans are used to finance the Group. Just as in previous years, the YOC Group relies on equity finance, which has turned out to be a strategic advantage during the economic crisis. Care is taken to ensure that the Group's ability to finance itself is safeguarded at all times. This is managed partly by tracking ratios which provide information on the Group's capital structure.

Legal Risks and Liabilities

All essential le gal trans ac tions are examine d by external lawyers to guard against legal risks. The YO C Gro up has comp reh ensive insuran ce cover against damages and possible liability risk, which is constantly subject to review. Directors and officers liabilit y insurance ser ves to protec t the manage ment against possible financial losses of the Company. During the financial year 2009, neither the YOC Group nor any of its subsidiaries were involved in any ongoing or foreseeable court actions or arbitration procedures which could affect the Group's economic position, and we do not expect any negative developments for the financial year to come. Statutory restrictions introduced by the state, such as a change in the law governing data protection, could have an adverse effect on the business activities of the YOC Group. In the past, legal amendments emanating from the Belgian government, for instance, had an impact on the mobile B2C business segment. At the time of preparing the financial statements, there was no information concerning changes to the law planned for the foreseeable future.

Personnel Risks

Highly qualified employees from all areas are translating our business objectives into practice. To further enhance company performance, it is necessary to retain a sufficient number of qualified employees in the long run. Personnel development measures and a performancerelated system of pay constitute the basis for attracting and retaining employees. Moreover, the successful implementation of training and further education measures ensure that more than one key employee works in each department so that no hard-to-fill vacancies occur in the event of dismissals. Defined representation and succession regulations ensure the safeguarding of business and decision-making processes. Companywide personnel planning and targeted personnel marketing measures reduce the risk of staffing bottlenecks. Employees handling confidential information are obliged to comply with the respective regulations and to treat such information responsibly.

Modelling Risks

Modelling risks are involved in forecasts of turnover and costs. The budgeting process was improved on the basis of professional controlling with the objective of generating reliable and achievable target figures. The internal calculation and forecasting system was further adjusted to the interests of the sales and marketing department with the help of commonly used software.

To refine the ongoing control still more, a new ERP system was implemented throughout the Group which will speed up and improve the process even more. Individual projects are examined on a regular basis using computers: if such examinations show that a project cannot achieve the planned turnover or contribution margin, the necessary countermeasures are taken immediately. A target-actual comparison is also used to make a deviation analysis relating to the project and business areas in order to compare the target figures against actual performance.

63 Inspection and Risk Management Report on the Accounting Process

(§289 Part 5 and §315 Part 2 No 5 HGB)

At YOC AG as well as within the YOC Group, the risk management system contains the complete organisational rules and measures aimed at the identification, evaluation and communication of risk and the business operations designed to handle that risk. With regard to the (consolidated) accounting process, the internal control system is to be designed so as to ensure that the relevant accounting rules and standards are observed and the regularity of the accounting is guaranteed, so that the financial reporting conveys a true and fair view of the net assets, financial position and results of operations of YOC AG and the YOC Group.

The Management Board bears overall responsibility for the internal control and risk management system with regard to the (consolidated) accounting process. All companies that are included in the Group financial statements are integrated via a properly defined management and reporting organisation. The operational responsibility lies with the member of the Board responsible for finance together with the Accounts department. We view the following elements of the internal control and risk management system within the YOC Group as essential with respect to the (consolidated) accounting process:

• Method of identifying, assessing and documenting all material corporate processes and areas of risk, including the associated key controls, relevant to accounting procedures . These include processes found in the finance and accounting departments as well as administrative and operational corporate processes which generate material information for the preparation of the annual and consolidated financial statements including the Management Report and Group Management Report.

• Process-integrated controls (computer-assisted controls and access restrictions, principle of dual control, separation of functions, analytical controls)

• Standardised financial accounting processes

• Safeguarding uniform accounting through Group-wide guidelines and procedures

• Monthly internal group reporting of the profit and loss account as well as monthly reporting on the performance of all cost centres including analysis and reporting on material developments and target-actual differences.

The effectiveness of the (consolidated) accounts-related internal control and risk management system is systematically reviewed and evaluated through regular control tests. A Group-wide reporting system safeguards the ongoing and prompt information of the Management Board and Supervisory Board.

Information regarding Shares

(§§289 Part 4, 315 Part 4 HGB)

Subscribed Capital

Th e sub s crib e d c apit al of YO C AG am o unt s to EUR 1,750,000 and is divided into 1,750,000 bearer nopar-value ordinary shares. Each share conveys a voting right. There are no other classes of share.

All shares incorporate the same rights and obligations. Each share confers the right of one vote at the General Meeting and denotes the shareholder's proportion of the company's profits. This does not include shares which confer no rights on the company (Section 71b of the German Stock Corporation Act (AktG)).

Restrictions on voting rights or transfer of shares

The Company is not aware of any restrictions to the voting rights of shares in YOC AG or the ability to trade shares in YOC AG.

Participations in the capital exceeding 10% of the voting rights

YOC AG has been notified of the following direct or indirect participations in the capital of the company YOC AG, which exceed ten per cent of the voting rights, by a notice of voting rights:

• Dirk Kraus: 25.47% of the nominal capital.

• DIH Finanz und Consult GmbH, Frankfurt am Main: 13.23% of the nominal capital. This participation is attributable to DIH Deutsche Industrie-Holding GmbH, Frankfurt am Main, which in total holds 13.23% of the company's nominal capital. This participation belongs to Mr Peter Zühlsdorff.

• Schwetje Invest GmbH, Köln: 22.50% of the nominal capital. This participation is attributable to Schwetje Holding GmbH, Köln, and to Mr Michael Schwetje. The participation controlled by Mr Michael Schwetje amounts in total to 22.60% of the nominal capital.

• IP Concept Fund Management S.A., Strassen, Luxembourg: 10.40% of the nominal capital.

Shares which entail special rights conferring controlling powers

There are no shares which entail special rights that confer controlling powers.

The nature of the control of voting rights if employees hold part of the capital and do not directly exercise their rights of control

The General Meeting of YOC AG resolved on 15 July 2009 to launch the YOC Management Incentive Programme. Within this programme subscription rights were issued to members of the Management Board and company employees in autumn 2009. Since the waiting period of the YOC Management Incentive Programme has not yet passed, no shares have yet been transferred to the members of the Management Board or Company employees.

In the event that YOC AG issues shares to employees within the YOC Management Incentive Programme, the shares will be transferred directly to the employees. The employees benefiting may exercise the rights accruing to them by virtue of the employee shares like other shareholders as determined by the statutory provisions and the provisions of the articles of association.

Rules on appointing and releasing members of the Management Board and amending the articles of association

The legal provisions concerning the appointment and release of members of the Management Board are contained in Sections 84 and 85 of the German Stock Corporation Act (AktG). The articles of association of YOC AG in Section 7 Par. 2 provide a corresponding provision. According to Sections 119 Par. 1, No. 5, 133, 179 Par. 1 and Par. 2 of the German Stock Corporation Act (AktG) the articles of association may be amended through a resolution by the General Meeting. The Supervisory Board is empowered to decide on changes to the articles of association which relate only to the way they are rendered (Section 17 of the articles of association of YOC AG).

Powers of the Management Board regarding the possibility of issuing or redeeming shares Purchase of own shares

Based on the resolution of the General Meeting dated 15 July 2009, the Company is entitled to acquire its own shares within 18 months of passing the resolution, in order to

• allow it to offer shares of the Company to third parties as part of a merger with an enterprise or the acquisition of an enterprise or participation in it;

• launch shares of the Company on foreign stock exchanges at which they have not been listed for trading before;

• offer shares to individuals for purchase who are or were employed by the Company or its affiliated undertakings;

• withdraw them from circulation.

The aforementioned powers may be used once or several times, singly or jointly. Based on this power, shares comprising up to 10% of the nominal capital may be acquired.

At the end of the financial year the Company held 21,000 of its own shares (corresponding to 1.20% of the nominal capital).

Authorised capital

Authorised Capital 2006/I is provided pursuant to Section 6 Par. 5 of the articles of association of YOC AG, and Authorised Capital 2006/II is provided pursuant to Section 6 Par. 7 of the articles of association of YOC AG.

aa) Authorised Capital 2006/I. The Management Board is empowered by a resolution of the General Meeting to increase the Company's nominal capital with the approval of the Supervisory Board by 11 April 2011 one or several times by up to a total of EUR 587,500.00 in return for contributions in cash or kind through the issue of new no-par value registered shares.

With the approval of the Supervisory Board, the Management Board must reach a decision on excluding the subscription rights of shareholders. In the following cases in particular an exclusion of subscription rights is permissible:

• to even out fractional amounts;

• in the context of capital increases for contributions in kind to grant shares for the purpose of acquiring enterprises, parts of enterprises or shares in enterprises;

• if the capital increase for cash contributions does not exceed 10% of the nominal capital and the issue price of the no-par value shares does not fall significantly below the stock market share price;

• for the purpose of further placing shares in the context of a public flotation of the Company's shares.

The Management Board shall decide on further details of the implementation of capital increases with the approval of the Supervisory Board.

bb) Authorised Capital 2006/II. The Management Board is empowered by a resolution of the General Meeting to increase the Company's nominal capital with the approval of the Supervisory Board by 15 May 2011 one or several times by up to a total of EUR 287,500.00 in return for contributions in cash or kind through the issue of new no-par value registered shares.

With the approval of the Supervisory Board, the Management Board must reach a decision on excluding the subscription rights of shareholders. In the following cases in particular an exclusion of subscription rights is permissible:

• to even out fractional amounts;

• in the context of capital increases for contributions in kind to grant shares for the purpose of acquiring enterprises, parts of enterprises or shares in enterprises;

• if the capital increase for cash contributions does not exceed 10% of the nominal capital and the issue price of the no-par value shares does not fall significantly below the stock market share price;

• for the issue of shares to strategic partners;
• for the purpose of further placing shares in the context of a public flotation of the Company's shares.

The Management Board with the approval of the Supervisory Board shall decide on the further content of the stock rights and the conditions of issue.

Contingent capital

The nominal capital of the Company is increased depending on the exercise of conversion rights by up to EUR 175,000 through the issue of up to 175,000 new registered no-par value shares. The contingent capital increase serves to operate the YOC Management Incentive Programme and the subscription rights granted as part of this programme. The contingent capital increase is only implemented provided those entitled to subscribe exercise their option to subscribe. The new shares resulting from the exercise of subscription rights shall share in the profit from the start of the financial year for which at the time of exercising the subscription rights no resolution of the General Meeting has yet been reached concerning the use of the net income for the year. The Management Board is empowered with the approval of the Supervisory Board to determine the further details of executing the contingent capital increase.

Material agreements of the Company subject to the condition of a change of control resulting from a takeover bid

There are no material agreements of the Company which are subject to the condition of a change of control resulting from a takeover bid.

Company agreements regarding compensation which are made with members of the Management Board or employees in the event of a takeover bid

In the event of a takeover bid subject to Sections 29, 35 of the German Securities Acquisition and Takeover Act (WpÜG), the YOC Management Incentive Programme envisages that the subscription rights already granted in an option agreement may be exercised by the subscription right holders, in other words the members of the Management Board and employees of the Company, within an additional exercise period on the fifth day of trading and the ten subsequent stock exchange trading days after publication of the takeover bid, provided thereby the statutory waiting period for the initial exercise of the subscription rights of at least two years is safeguarded. Should there be a takeover bid before the statutory waiting period of two years is ended, the Company will compensate the members of the Management Board in cash for the value of their subscription rights. There are no such corresponding compensation arrangements for employees of the Company.

Management Board Explanatory Report

(concerning the information provided in accordance with Section 289 Par. 4, Section 315 Par. 4 of the German Commercial Code (HGB) and in addition the information provided in accordance with Section 289 Par. 5 of the German Commercial Code (HGB))

Par. 4 and Section 315 Par. 4 of the German Commercial Code (HGB) are featured in the Management Report as at 31 December 2009 which provides the following statement in this regard:

The information contained in the Company's Management Report in accordance with Section 289 Par. 4 and Section 315 Par. 4 of the German Commercial Code (HGB) is accurate and corresponds to the facts known to the Management Board. The Management Board therefore limits itself to the following statement:

Beyond the information that was provided in the Management Report (and statutory restrictions of the voting rights such as those pursuant to Section 136 of the German Stock Corporation Act (AktG)) the Management Board is not aware of any restrictions relating to voting rights or the transfer of shares. All communications concerning investments in the Company capital that exceed ten per cent of the voting rights have been set out in the information pursuant to Section 289 Par. 4, Section 315 Par. 4 of the German Commercial Code (HGB). No description is provided of shares conferring special rights which lend the authority to control, because no such shares have been issued. Similarly, an explanation of special control of voting rights in the case of employee participation can be omitted because in any future participation of employees as part of the YOC Management Incentive Programme the shares will be issued directly to the employees who will also exercise their control rights directly like other shareholders.

In case any compensation has been agreed with members of the Management Board in the event of a change of control, the agreement serves to maintain the independence of the members of the Management Board.

In addition, the Management Board has also examined the information provided in the Management Report pursuant to Section 289 Par. 5 of the German Commercial Code (HGB). The information contained in the Management Report concerning the material features of the internal control and risk management system in respect of the account process is complete and comprehensive. Internal controls form an integral part of the accounting processes at YOC AG. The documentary requirements and procedures for the financial reporting process are defined within a general document that is uniform for the entire Group. Adherence to these rules is designed to prevent material misrepresentation in the consolidated financial statements, Management Report and in the interim reports because of errors or deception with reasonable certainty.

Berlin, April 2010 YOC AG The Management Board

Declaration on Corporate Governance

(Section 289a of the German Stock Corporation Act (AktG))

Statement of Compliance pursuant to Section 161 AktG

The German Corporate Governance Code is now available in its version dated 18 June 2009 which contains new material relating particularly to the area of remuneration which the previous version did not. During financial year 2009, the Management Board and Supervisory Board several times dealt with the issue of corporate governance and in December 2009 delivered the following joint Statement of Compliance 2009 in accordance with Section 161 of the German Stock Corporation Act (AktG):

Pursuant to Section 161 of the German Stock Corporation Act (AktG), the Management Board and Supervisory Board of YOC AG hereby declare that the recommendations made by the Government Commission on the German Corporate Governance Code" and published by the Federal Ministry of Justice on 5 August 2009 in the official section of the electronic German Federal Gazette (Bundesanzeiger) in the version dated 18 June 2009, and until 5 August 2009 in the version dated 6 June 2008, have been complied with apart from the following list of exceptions and will also be complied with in future:

• Point 2.3.2 of the Code: The Company regards the announcement of the invitation to attend the General Meeting in the electronic Bundesanzeiger as sufficient.

• Point 3.8 Par. 2 of the Code: The D&O liability insurance for the Management Board and Supervisory Board has been concluded without a deductible. The Company believes that the motivation and responsibility with which the members of the Management Board and Supervisory Board carry out their duties will not be improved by a deductible. The D&O liability insurance serves to safeguard against the Company's material own risks and at most serves as a second-line defence of the assets of the members of those Boards. With regard to the D&O liability insurance for the Management Board, Section 23 of the introductory act to the Stock Corporation Act (EGAktG) (transitional provision of the Reasonableness of Management Remuneration Act (Gesetz zur Angemessenheit der Vorstandsvergütung)) is observed.

• Point 4.2.3 Par. 5 of the Code: In deviation from the Corporate Governance Code, payments in the event of a change of control are not limited to 150% of the severance cap. A limit could jeopardise the ability to attract highly qualified employees. According to the Board remuneration structure, a change of control, particularly when Board members participate in the share option programme, will also have the effect of increasing the YOC share price. In addition to the beneficiaries of the share option programme, however, it is also the shareholders who will profit from the rise in the share price, so that in this respect the interests of the Management Board and shareholders are guaranteed to coincide.

• Point 5.1.2 Par. 2 sentence 3 of the Code: The Supervisory Board has not set an age limit for members of the Management Board. The members of the Supervisory Board are convinced that the suitability for company management depends to a large extent on the individual ability to perform.

• Points 5.3.2 and 5.3.3 of the Code: With the Supervisory Board of YOC AG having only three members, it is not practical to establish an Audit Committee and a Nomination Committee. The increased efficiency of auditing the accounts intended by the Code through the establishment of an Audit Committee would not be achieved because the Audit Committee would have to be filled with almost all plenum members. Similarly, the Nomination Committee would have to be filled with almost all plenum members, which would not result in any improved preparation of the decision proposals of the Supervisory Board concerning the election proposals of the shareholders.

• Point 5.4.1 Par. 2 of the Code: No age limit has been set for members of the Supervisory Board. Suitability to monitor the Management Board as a member of the Supervisory Board and to be an equal-ranking contact for the Management Board depends to a large extent on individual effectiveness.

• Point 5.4.4 of the Code: In the opinion of the Management Board and Supervisory Board, in certain cases it may be worthwhile for former members of the Management Board to move to the Supervisory Board and there also to take over the chairmanship of the Supervisory Board or to chair certain committees. The internal knowledge of the former members of the Management Board concerning the enterprise serves to enhance the efficiency of the control exercised by the Supervisory Board.

• Point 5.4.6 Par. 2 of the Code: The remuneration of the Supervisory Board consists of a fixed emolument. Any variable remuneration to be granted beyond this is unnecessary for a performance-related motivation of the Supervisory Board and would not effect any additional incentive or motivational step.

• Point 7.1.2 Par. 4 of the Code: The Company will endeavour to obey the recommendation such that the consolidated financial statements are to be available to the public within 90 days of the end of the financial year and the interim reports within 45 days of the end of the reporting period, but cannot guarantee this due to the large scope of consolidation.

Berlin, 30 December 2009 YOC AG The Management Board The Supervisory Board

The Statement has been made permanently available to the public on the website of YOC AG (www.yoc.com) under "Investor Relations".

Information concerning company management practices

Basic principles

Sustainable economic, ecological and social actions form a characteristic element of the corporate culture at YOC AG. This also includes integrity in the treatment of employees, investors, customers, suppliers, institutions, interest groups and other stakeholders as well as the public. YOC AG is a stock corporation with its registered office in Germany. The scope for corporate governance thus results on the basis of German law, particularly the Stock Corporation Law and the law on capital markets as well as the memorandum and articles of association of YOC AG. As a service company, YOC AG is compelled to win and maintain the trust of its customers and business partners through exemplary behaviour. The aim is to act in a credible, trustworthy and reliable manner and to convey this image.

69

Transparency

A uniform, comprehensive and prompt information policy in the relationship to employees, investors, customers, suppliers, institutions, interest groups and other stakeholders is of high importance to YOC AG. All those mentioned above are provided with information by YOC AG on a uniform, comprehensive, prompt and simultaneous basis. Reporting on the business situation and results of YOC AG and the YOC Group of companies takes place through the annual report, the semi-annual report and interim reports. As well as this, information is passed on through ad-hoc communication where legally necessary and through the Company's website. All messages, presentations and notices as well as the current financial calendar can be viewed on the Company's website (www.yoc.com) under "Investor Relations". Changes that have to be reported in the make-up of the shareholder structure according to Section 26 of the Securities Trading Act (WpHG) and the purchase and sale of shares of individuals who hold management positions with YOC AG (directors' dealing according to Section 15 a of the Securities Trading Act (WpHG)) are also published by the Management Board. YOC AG also keeps the stipulated insider registers in accordance with Section 15 b of the Securities Trading Act (WpHG). The individuals this relates to have been informed of the legal duties and sanctions.

Risk management

The YOC Group is one of the world's leading providers of mobile marketing, mobile advertising and mobile Internet and as such is exposed to many of the opportunities and risks specific to the sector and enterprise. YOC AG has an established, comprehensive and effective system which allows the company to detect, assess, report on and deal with opportunities and risks at an early stage in respect of all functions and business processes. The underlying principles and guidelines have been compiled as risk management guidelines which apply throughout the Group. The aim of these guidelines and all the systems concerned is to systematically detect risks at the earliest possible time, assess the likelihood of their occurring and the potential qualitative and quantitative impact and instigate effective countermeasures. The management of risk is regularly discussed at Management Board and Supervisory Board level, then developed further and discussed with the Company's auditors. Further information on the Company's risk management, the particular risks to which it is exposed and the accounts-related internal control and risk management system can be found in the Risk Report which forms part of the Company's Group Management Report.

Organs of the Company – composition and methods of working

As a German stock corporation, YOC AG is governed by the German Stock Corporation Act (AktG). Its executive organs are thus the General Meeting, the Management Board and the Supervisory Board. The Management Board and Supervisory Board have autonomous powers and collaborate closely and in confidence in steering and supervising the Company.

General Meeting

The YOC AG shareholders exercise their rights through the General Meeting. The Annual General Meeting of YOC AG takes place within the first eight months after each financial year comes to an end. The General Meeting decides on such matters pursuant to Section 119 of the Stock Corporation Act (AktG) as the memorandum and articles of association of the Company, the composition of the Supervisory Board, capital measures and the appointment of the auditors. Each share in the Company grants one vote. All shareholders who register punctually are entitled to participate in the General Meeting. The right to attend or vote may also be exercised through a proxy. In good time prior to each General Meeting YOC AG publishes the relevant invitation, the text of the envisaged resolutions and the necessary reports and information pursuant to the valid provisions of the laws governing stock corporations as published on the website as well as in stipulated media.

Supervisory Board

In accordance with Section 111 of the Stock Corporation Act (AktG) the Supervisory Board must advise and supervise the activities of the Management Board. It is involved in strategy and planning and in all issues which are of fundamental important for the Company and its approval has to be obtained for all major decisions taken by the Management Board. This includes the corporate planning for the year ahead prepared by the Company once a year (the budget); this is submitted to the Supervisory Board by the Management Board, discussed with it and adapted where necessary. The Supervisory Board also assigns the audit mandate to the auditor appointed by the General Meeting.

The YOC AG Supervisory Board consists of three members none of whom were previously on the Company's Management Board. The Supervisory Board is also responsible for appointing the members of the Management Board. The members of the Supervisory Board are Mr Gerd Schmitz-Morkramer (chairman of the Supervisory Board), Mr Peter Zühlsdorff (deputy chairman of the Supervisory Board) and Dr Arnold Bahlmann.

The way the Supervisory Board works is set out formally in rules it has devised. These dictate that it must meet at least once each quarter. The meetings normally demand the physical presence of the Board members. In addition to this, extraordinary meetings may be convened which can, if necessary, be conducted by telephone. The Company's Management Board attends the meetings regularly and in certain cases other members of the extended management are also invited to attend. At the first meeting each year demanding physical presence after the preparation and auditing of the annual financial statements, the Company's auditors are in attendance to present their report of the recent audit to the Supervisory Board. The agenda and applications for resolu tion by the Supervisory Board are communicated to all the participants in writing, allowing sufficient notice. When decisions are needed at short notice, they may be dealt with through a written circulation procedure. All the meetings of the Supervisory Board are minuted in writing. The completed minutes of the meeting have to be approved by all members. The chairman of the Supervisory Board explains the activities of the Super visory Board each year at the Annual General Meeting and in his report to the shareholders, which is printed in the company's Annual Report.

Management Board

The Management Board is appointed by the Supervisory Board. It manages the Company in accordance with Sec tion 76 of the Stock Corporation Act (AktG) and in line with rules established by the Supervisory Board. The periods in office of the members of the Management Board may last up to a maximum of five years, but a member may serve for several periods. The Supervi sory Board can nominate a member of the Management Board to be its chairman. Mr Dirk Kraus has been made chairman of the YOC AG Management Board. At present YOC AG has three Management Board posts. The tasks of the Board members are described in the Management Board regulations and do not overlap. Mr Dirk Kraus, the chairman of the Management Board, is responsible for the areas of product development, strategy, marketing and finance. Mr Alex Sutter is responsible for sales and marketing and business development. Mr Jan Webering heads professional services and internationalisation. The Management Board reports to the Supervisory Board regularly, promptly and completely on material facts and circumstances relating to the development of busi ness, strategy and planning, the risk situation of the Group and compliance and also consults the Supervi sory Board prior to all important strategic decisions. Meetings of the Management Board are normally held every two weeks for joint consultation. In addition to this, the Management Board regularly obtains informa tion from the members of the Company's second level of management.

Berlin, March 2010 YOC AG The Management Board 71

Remuneration Report

The Remuneration Report is governed by the recommendations of the German Corporate Governance Code. It summarises the principles which are applied in setting the remuneration of the Management Board of YOC AG and explains the amount and structure of these payments. It also describes the principles and the amounts paid to the members of the Supervisory Board.

The Remuneration Report also contains details which German commercial law requires to be part of the Notes to the Consolidated Financial statements pursuant to Section 314 of the German Commercial Code (HGB) or of the Group Management Report pursuant to Section 315 of the German Commercial Code (HGB).

Remuneration of the Management Board

The Supervisory Board is responsible for setting the remuneration of the members of the Management Board. When doing so, it considers the size and activities of the enterprise, its economic and financial position, the tasks of the relevant Board member and the amount and structure of the remuneration paid to members of other management boards in similar sectors. The remuneration is adjusted so that it remains at a level competitive within the market for highly qualified management personnel and offers an incentive to perform well.

The remuneration of the Management Board is related to performance; during financial year 2009 it is made up of a fixed payment, a variable component and participation in the YOC Management Incentive Programme:

• The fixed remuneration is paid as a monthly salary..
• The variable component represents a share in the Company's performance oriented to the operational result under IFRS
• With participation in the YOC Management Incentive Programme the members of the Management Board receive subscription rights to shares in YOC AG.

Participation of the members of the Management Board in the YOC Management Incentive Programme is designed to reward the contributions made by the Management Board to raising the Company's value and promoting its long-term success. Through this component of the remuneration and the long-term incentive provided, the interests of the management are linked in a sensible way to those of the Company share.

The overall remuneration of the Management Board came to a total of TEUR 600 in financial year 2009. This amount is composed of the total fixed remuneration of TEUR 540 and a variable component which in 2009 was TEUR 60 distributed over the entire Management Board. During financial year 2009 the Management Board was due a total of 97,965 subscription rights. The latest time value of the subscription rights at the time they were granted came to around TEUR 403.

Remuneration of the Management Board for 2009

Name	Fixed remunera tion (in TEUR)	Variable remunera tion (in TEUR)	Subscrip tion rights (in shares)
Dirk Kraus	160	20	32,655
Alex Sutter	130	20	32,655
Jan Webering	120	20	32,655
Dr. Jürgen Wolff	130	0	0
Total	540	60	97,965

Dr Wolff resigned from the Management Board of YOC AG as of 31 December 2009 in agreement with the Supervisory Board. He was awarded a settlement of TEUR 91.8, and for the period January - March 2010 a fixed remuneration of TEUR 32.5 was paid.

As a fringe benefit of the contract, Mr Jan Webering has a claim to a company car for business and private use.

Remuneration of the Supervisory Board

At the proposal of the Management Board and Supervisory Board, the remuneration of the Supervisory Board has been set by the General Meeting. The remuneration of the Supervisory Board consists of a fixed emolument. This comes to TEUR 7.5 for the entire financial year.

The chairman of the Supervisory Board receives 2.5 times this fixed amount and the deputy chairman receives 1.5 times this amount. All components of remuneration for the completed financial year are due for payment following the Ordinary General Meeting at which the approved consolidated financial statements are presented for the last financial year. The remuneration of the Supervisory Board for financial year 2009 amounts to a total TEUR 26.25. Mr Peter Zühlsdorff waives the right to receive the remuneration due to him as deputy chairman of the Supervisory Board.

Remuneration of the Supervisory Board for 2009
Name	Feste Vergütung (in EUR)
Gerd Schmitz-Morkramer	18,750
Peter Zühlsdorff	./.
Dr. Arnold Bahlmann	7,500
Total	26,250

Events after the Balance Sheet Reporting Date

N o eve nt s that wo ul d have ha d a mate rial ef fe c t o n th e n et as s et s , f inan cial p o sitio n an d re sult s of op erations of the YOC Group o ccurre d af ter the balance she et rep or ting date.

73

Responsibility Statement by the Management Board

(pursuant to Section 37y No. 1 of the Securities Trading Act (WpHG) in conjunction with Section 297 Par. 2 Sentence 4 and 315 Par 1 Sentence 6 of theSecurities Trading Act (WpHG))

We certify to the best of our knowledge that the consolidated financial statements convey a true and fair picture of the net assets, financial position and results of operations of the Group according to the applicable accounting principles and that the conduct of business including the business results and the situation of the Group are described in the Group Management Report so as to convey a true and fair view of the facts and circumstances as well as the material risks and opportunities of the Group's probable development.

Berlin, 19. April 2010

Dirk Kraus, CEO of YOC AG

Alex Sutter, CSO of YOC AG

Jan Webering, COO of YOC AG

75

5 Consolidated Financial Statement

Auditor´s Opinion	95
Group Statement of Comprehensive Income	96
Consolidated Financial Statement	97
Auditor´s Opinion	98
Statement of Changes in Shareholder´s Equity	99
Notes to the Financial Statement	100
Financial Calendar	136

Februar

Auditors' Opinion

We have audited the consolidated financial statements prepared by the YOC AG, Berlin – comprising the balance sheet, the income statement, statement of changes in equity, the cash flow statement and the notes to the consolidated financial statements – and the group management report for the business year from January 1 to December 31, 2009. The preparation of the consolidated financial statements and the group management report in accordance with the International Financial Reporting Standards (IFRS), as adopted by the EU, and the additional requirements of German commercial law pursuant to § 315a Abs. 1 HGB are the responsibility of the Parent Company's management. Our responsibility is to express an opinion on the consolidated financial statements and the group management report based on our audit.

We conducted our audit of the consolidated financial statements in accordance with § 317 HGB ("German Commercial Code") and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer. Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with IFRS and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of the audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the books and records, the consolidated financial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the financial statements of the enterprises included in the consolidated financial statements, the determination of the group of entities to be consolidated, the accounting and consolidation principles used and the significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements and the group management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the consolidated financial statements of the YOC AG, Berlin, comply with the IFRS, as adopted by the EU, the additional requirements of German commercial law pursuant to § 315a HGB and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group's position and suitably presents the opportunities and risks of future development.

Berlin, 23th of April 2010

Deloitte & Touche GmbH, Wirtschaftsprüfungsgesellschaft

Scharpenberg, Wirtschaftsprüfer ppa. Branz, Wirtschaftsprüfer

Do, 28.02 Sa, 30.02 So, 31.02 Fr, 29.02 CeBIT Mobilportal YOC realisiert das mobile Portal

Consolidated Statement of Comprehensive Income

Profit and Loss Statement in Euro	Note #	2009	2008
Sales revenues	5,1	26,123,498	23,620,780
Changes in inventory	5.2	-206,219	236,019
Internally produced and capitalised assets	5.2	967,000	412,000
Other operating income	5.3	178,394	60,847
Total output		27,062,673	24,329,646
Cost of materials	5.4	10,547,975	10,018,161
Personnel costs	5.5	9,373,946	7,125,189
Other operating expenses	5.6	6,115,554	5,099,863
EBITDA		1,025,198	2,086,433
Depreciation and amortisation	6.1	895,803	844,050
EBIT		129,395	1,242,383
Finance income	5.7	63,555	172,972
Finance expenses	5.7	727,410	548,551
Financial results		-663,855	-375,579
Earnings before taxes		-534,460	866,804
Taxes	5.8	-391,118	356,547
Earnings after taxes		-143,342	510,257
Earnings per share (diluted/basic)	5.9	-0.08	0.29
Number of shares in 2009/2008: 1,750,000

Comprehensive income in Euro	Note #	2009	2008
Earnings after taxes		-143,342	510,257
Changes from foreign exchange translation		-17,834	503
Other earnings	5.11	-17,834	503
Comprehensive income		-161,176	510,760
Proportion of comprehensive income accounted for by non-controlling shareholders		0	0
Proportion of comprehensive income accounted for by shareholders of YOC AG		-161,176	510,760

Consolidated Financial Statement

Note #	31.12.2009	31.12.2008
	19,659,689	16,841,317
6,1	725,074	624,040
6,2	10,743,776	8,957,053
6,3	8,035,727	6,510,046
6,4	1,000	1,000
5,8	154,112	749,178
	9,308,202	11,408,928
6,5	29,800	236,019
6,5	120,754	88,215
6,6	5,943,775	4,944,706
6,6	157,786	223,681
6,6	231,265	47,733
6,7	0	1,339,741
6,8	2,824,822	4,528,833
	28,967,891	28,250,245

Liabilities
Equity capital		11,868,875	12,251,098
Subscribed capital	6.9	1,750,000	1,750,000
Capital reserve	6.9	9,143,281	9,100,489
Revenue reserves	6.9	1,254,179	1,397,521
Difference arising from currency conversions	6.9	-14,746	3,088
Treasury shares	6.9	-263,839	0
Non-current liabilities		3,002,789	2,669,721
Provisions	6.10	48,200	48,200
Bank loans	6.11	1,329,898	837,000
Other liabilities	6.11	823,144	145,618
Deferred taxes	5.8	801,547	1,638,903
Current liabilities		14,096,227	13,329,426
Advance payments received	6.11	1,629,094	1,225,128
Trade payables	6.11	3,707,171	1,546,348
Bank loans	6.11	4,644,847	5,086,046
Other liabilities	6.11	3,851,299	5,070,133
Tax liabilities	6.11	128,393	149,193
Provisions	6.10	135,423	252,578
Total equity and liabilities		28,967,891	28,250,245

Cash flow Statement

in Euro	Note #	2009	2008
Earnings after taxes		-14 3 , 3 42	510,257
Depreciation		895,803	8 4 4 ,0 50
Taxes recognised in profit or loss		-391,118	3 56 , 5 47
Interest recognised in profit or loss		663,855	37 5, 579
Other non-cash expenses and income		24,274	-3 ,03 6
Cash earnings		1 ,0 49, 47 2	2,083,396
Gains/losses from asset disposals		25,494	-163
Changes in inventories		206,219	-2 3 6 ,019
Changes in receivables, advance payments and other assets		-443,159	-292, 201
Changes in liabilities, advance payments and other liabilities		2,274,431	1,017, 50 6
Changes in current provisions		-117,155	16 ,93 0
Interest received		52,964	172,972
Interest paid		-342,804	- 5 4 8 , 551
Taxes paid		-203,170	-3 18 , 553
Operating cash flow	7.1	2 , 5 02 , 2 92	1,895,317
Inflows from the sale of marketable securities		1,356,247	1, 20 0,660
Acquisition of equity investments		-3,778,302	-1, 379,07 3
Investments in property, plant and equipment		-278,645	-17 5, 320
Investments in intangible assets		-297,829	- 8 4 ,028
Payments for development costs		-967,000	- 412,0 0 0
Cash flow from investment activities	7.1	-3 , 9 6 5 , 5 2 9	-849,761
Loan repayments		-1,216,046	-1, 291,0 0 0
Loans		1,260,847	1,414 ,0 45
Acquisition of treasury shares		-287,579	0
Cash flow from financing activities	7.1	-242 ,7 78	123,045
Net increase/decrease		-1 ,70 6 ,0 1 5	1,168,602
Changes in cash and cash equivalents resulting from exchange rate variations		2,004	0
Cash and cash equivalents at the beginning of the reporting period	7.2	4 , 5 28 , 8 3 3	3,360,231
Cash and cash equivalents at the end of the reporting period	7.2	2 , 8 24 , 8 2 2	4,528,833

Statement of Changes in Shareholders' Equity

in Euro	Note #	Subscribed capital	Capital reserve	Retained earnings	Difference arising from currency translations	Treasury shares	Total
as of 31.12.2007	8	1,750,000	9,100,489	887,264	2,585	0	11,740, 338
Earnings after taxes				510,257			510,257
Difference arising from currency conversions					503		503
Comprehensive income				510,257	503		510,760
Acquisition of treasury shares							0
Disposal of treasury shares							0
Stock option programme							0
as of 31.12.2008	8	1,750,000	9,100,489	1, 397, 521	3,088	0	12, 251,098
Earnings after taxes				-143,342			-143,342
Difference arising from currency conversions					-17,834		-17,834
Comprehensive income				-143,342	-17,834		-161,176
Acquisition of treasury shares						-287,579	-287,579
Disposal of treasury shares			3,760			23,740	27,500
Stock option programme			39,032				39,032
as of 31.12.2009	8	1,750,000	9,143,281	1,254,179	-14,746	-263,839	11,868,875

No shares are held by non-controlling shareholders.

Notes to the Financial Statements

1. General Information	101
Application of new and modified standart	101
2. Consolidation	104
3. Significant Accounting Policies	105
3.1 General Principles	105
3.2 Currency Effects and Currency Conversion	108
4. Acquisitions	109
5. Notes on the Statement of Comprehensive Income	113
5.1 Sales Revenues	113
5.2 Changes in Inventory and Internally Produced and Capitalised Assets	113
5.3 Other Operating Income	113
5.4 Cost of Materials	113
5.5 Personnel Costs	114
5.6 Other Operating Expenses	114
5.7 Interest	114
5.8 Income Taxes	115
5.9 Earnings per Share	117
5.10 Segment Reporting	117
5.11 Other Earnings	118
6. Notes on individual balance sheet items	119
6.1 Property, plant and equipment	119
6.2 Goodwill	120
6.3 Intangible assets	120
6.4 Long-term investments	122
6.5 Advance payments made, Inventory	122
6.6 Receivables and other assets	123
6.7 Securities	123
6.8 Cash and cash equivalents	123
6.9 Shareholders' equity	124
6.10 Provisions	125
6.11 Liabilities	126
6.12 Other financial obligations	127
6.13 Public grants	128
6.14 Other disclosures on financial instruments	1 2 8
7. Notes on the Cash Flow Statement	130
7.1 Cash flow from specific activities	130
7.2 Cash and cash equivalents	130
8. Notes on changes in equity	131
Notes on changes in equity	131
9. Other disclosures	132
9.1 Contingencies, guarantees, contingent liabilities and similar obligations	132
9.2 Events after the balance sheet date	132
9.3 Report on risks and opportunities	132
9.4 Related-party disclosures	134
9.5 Remuneration of the Supervisory Board and management	134
9.6 Auditor's fees	135
9.7 Declaration of conformity with the German Corporate Governance Code	135
9.8 Responsibility Statement	135

1. General Information

YOC Aktiengesellschaft (AG), headquartered at Karl-Liebknecht-Straße 1, Berlin, Germany, is an international service provider in the field of advertising and marketing via mobile phone and the Internet in the Mobile Marketing, Affiliate Marketing and Mobile B2C Services product segments.

YOC AG shares were admitted to the Prime Standard of the Frankfurt Stock Exchange on 29 April 2009. They were listed for the first time on 30 April 2009 under the identification numbers WKN 593 273 and ISIN DE 0005932735.

The consolidated financial statements of YOC AG as of 31 December 2009 have been prepared pursuant to Section 315a of the German Commercial Code (HGB) in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Board (IASB), London, United Kingdom, and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC), as applicable in the European Union (EU), in effect on the closing date of the financial statements.

The consolidated financial statements of YOC AG thus conform to the IFRS as mandatory in the European Union from 1 January 2009.

The consolidated financial statements provide a fair presentation of YOC's results and financial position.

The Management Board of YOC AG approved the consolidated financial statements on 19 April 2009 for submission to the company's Supervisory Board.

Standards and interpretations to be applied in the current financial year

The following standards and interpretations relevant for YOC are mandatory and were applied for the first time in financial year 2009

• Amendments to IFRS 7 (revised 2009) "Improving Disclosures about Financial Instruments" provide for enhanced disclosures about financial instruments in the notes. In particular, a "fair value hierarchy" must be presented indicating the respective extent to which fair values of financial instruments have been determined using publicly available market data or unobservable internal corporate data. Furthermore, the required disclosures about the liquidity risk arising from financial instruments have also been enhanced. Initial application has resulted in additional disclosures in the notes to the YOC Group's consolidated financial statements.

• IAS 1 (revised 2007) "Presentation of Financial Statements" contains new regulations concerning the presentation of financial statements. In particular, "non-owner" changes in equity must in future be strictly separated from those resulting from transactions with owners, and additional disclosures made about other comprehensive income. The application of IAS 1 (revised 2007) has resulted in changes to the presentation of the consolidated financial statements and in additional disclosures in the notes.

The following standards and interpretations applicable for the first time in financial year 2009 have no material impact on the YOC Group's consolidated financial statements:

• Amendments to IFRS 1 and IAS 27 (revised 2008) "Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate"

• Amendment to IFRS 2 (revised 2008) "Vesting Conditions and Cancellations"

• IAS 23 (revised 2007) "Borrowing Costs"

• Amendments to IAS 32 and IAS 1 (revised 2008) "Puttable Financial Instruments and Obligations Arising on Liquidation"

• "Improvements to IFRSs (2008)"
• Amendments to IFRIC 9 and IAS 39 (revised 2009) "Embedded Derivatives"
• IFRIC 12 "Service Concession Arrangements"
• IFRIC 13 "Customer Loyalty Programmes"

Early application of standards

• IFRS 8 "Operating Segments" was already applied to the Group's segment reporting in the previous year.

• IFRS 8 was amended by the "Improvements to IFRSs (2009)" with the effect that, in addition to the liabilities, the assets of reportable segments should be reported only if such an amount is regularly provided to the chief operating decision maker. No such reporting takes place at YOC; this provision was therefore applied early, and the disclosures not made.

Published standards and interpretations that are not yet being applied

As of the date of approval of these financial statements for publication, the following standards, amendments and revisions of standards, and interpretations have been published, but their application is not yet mandatory.

The impact on the consolidated financial statements of the YOC Group of the following standards is currently being evaluated:

• "Improvements to IFRSs (2009)": The IASB has issued another omnibus standard as part of its annual improvements process. They contain a large number of smaller IFRS amendments intended to clarify wording and eliminate inconsistencies. Most of the changes are to be applied for financial years beginning on or after 1 January 2010.

The amendments to IFRS 8 are being applied early in financial year 2009.

• IFRS 3 (revised 2008) "Business Combinations" contains changes to the accounting treatment of acquisitions of businesses. The changes from the original version of IFRS 3 relate to the scope of the standard and to the accounting treatment of successive share purchases. IFRS 3 (revised 2008) additionally provides entities with the option to measure any interests of noncontrolling shareholders either at fair value or at their proportionate share of net assets. Depending on which of the two methods an entity elects to use, any amount of goodwill acquired as part of a business combination is measured either in full or at the share attributable to the controlling shareholder. The application of IFRS 3 (revised 2008) becomes mandatory for financial years beginning on or after 1 July 2009.

• IFRS 9 (revised 2009) "Financial Instruments" replaces the existing provisions of IAS 39 governing the classification and measurement of financial instruments. The application of IFRS 9 (revised 2009) becomes mandatory for financial years beginning on or after 1 January 2013.

• IAS 27 (revised 2008) "Consolidated and Separate Financial Statements":

With this revised version of IAS 27, the IASB has in particular changed the rules governing accounting for transactions with non-controlling shareholders of a group of companies. Transactions in which a parent company changes its ownership interest in a subsidiary without a loss of control shall in future be accounted for as equity transactions and not recognised in income. Accounting guidance was also provided for a loss of control of a subsidiary. The standard now specifies how a deconsolidation gain must be calculated and how the remaining investment in the former subsidiary after a partial disposal must be measured. The revised version of IAS 27 is to be applied, at the latest, for financial years beginning on or after 1 July 2009.

The following standards and interpretations not yet applicable in financial year 2009 are expected to have no material impact on the YOC Group's consolidated financial statements:

• IAS 24 (revised 2009) "Related Party Disclosures"
• IAS 32 (revised 2009): "Classification of Rights Issues"
• IFRS 1 (restructured 2008) "First-time Adoption of International Financial Reporting Standards"
• Amendment to IFRS 1 (revised 2010): "Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters"
• Amendment to IFRS 2 (revised 2009): "Group Cashsettled Share-based Payment Transactions"
• Amendment to IAS 39 (revised 2009): "Eligible Hedged Items"
• IFRIC 12 "Service Concession Arrangements"

• Amendment to IFRIC 14 (revised 2009): "Prepayments of a Minimum Funding Requirement"

• IFRIC 15 "Agreements for the Construction of Real Estate"

• IFRIC 16 "Hedges of a Net Investment in a Foreign Operation"

• IFRIC 17 "Distributions of Non-cash Assets to Owners"

• IFRIC 18 "Transfers of Assets from Customers"

• IFRIC 19 "Extinguishing Financial Liabilities with Equity Instruments"

The management assumes that the standards and interpretations mentioned above will be applied in the consolidated financial statements for the financial year in which their application becomes mandatory.

2. Consolidation

Consolidation principles

The consolidated financial statements include those companies in which YOC AG holds a direct or indirect majority of the voting rights (subsidiaries) or in which YOC AG, by virtue of its controlling position, obtains the majority of the economic benefits and bears the majority of the risks arising from their operations.

The inclusion of subsidiaries in the consolidated financial statements begins from the date on which YOC AG obtains control. The separate financial statements of the consolidated companies are prepared as of the reporting date of the consolidated financial statements. The results of subsidiaries acquired during the year are recognised in the consolidated income statement beginning on the actual date of acquisition.

Investments are consolidated using the purchase method by offsetting the carrying amounts of the investments against the remeasured equity of the subsidiaries at the date of their acquisition. Assets and liabilities that meet the recognition criteria of IFRS 3 are recognised at their fair values. Any residual amounts are reported as goodwill.

Intragroup profits and losses, revenues, income and expenses, as well as intercompany receivables, other assets and liabilities are eliminated.

Scope of consolidation

The scope of consolidation of YOC Group includes the following companies:

	Fully consolidated companies	Share in %	Held via no.	Since
Domestic
1	YOC AG, Berlin	-	-	-
2	Moustik GmbH, Berlin	100%	1	01/02/2007
3	Brutus Media GmbH, Regensburg	100%	1	3 1/07/20 07
4	Sevenval GmbH, Cologne	100%	1	25/09/2007
5	belboon-adbutler GmbH, Hiddenhausen	100%	1	12/03/2008
6	YOC Mobile Advertising GmbH, Berlin	100%	1	11/03/2009
7	ubiyoo GmbH, Berlin	100%	1	24/08/2009
International
8	YOC Ltd., London, United Kingdom	100%	1	01/01/2007
9	Moustik Sprl., Brussels, Belgium	100%	1	01/02/2007
10	Bluestar Mobile Ltd., London, United Kingdom	100%	1	27/05/2009
11	YOC Central Eastern Europe GmbH, Vienna, Austria	100%	1	01/06/2009
12	Mobile Interactive Advertising Media S.L., Madrid, Spain	100%	1	22/09/2009

Through the acquisition of 100% of the shares of Bluestar Mobile Ltd., London, United Kingdom and of Mobile Interactive Advertising Media S.L., Madrid, Spain, and through the establishment of YOC Central Eastern Europe GmbH, Vienna, Austria, the scope of consolidation of YOC AG as of 31 December 2009 increased by three additional foreign subsidiaries. Through the establishment of YOC Mobile Advertising GmbH, Berlin, and of ubiyoo GmbH, Berlin, the scope of consolidation of YOC AG increased by three additional domestic subsidiaries.

All subsidiaries of YOC AG are integrated in the consolidated financial statements by full consolidation.

Sevenval AG changed its legal form to become Sevenval GmbH. adbutler GmbH was renamed belboon-adbutler GmbH.

3. Significant Accounting Policies

YOC AG functions as the parent company of the Group and directly holds 100% of all companies of the YOC Group. The financial years for all subsidiaries coincide with the calendar year.

In preparing the consolidated financial statements, the Management Board has presumed that all the companies included in the consolidated financial statements are going concerns. Therefore, accounting and measurement were performed according to the going-concern principle.

The consolidated balance sheet is structured according to IAS 1 "Presentation of Financial Statements" and the principle of maturity. Consequently, the balance sheet items are divided into non-current and current assets or liabilities, respectively. As a matter of principle, assets and liabilities are classified as current when they have a remaining term to maturity or circulation of less than one year within the scope of ordinary business operations. Conversely, assets and liabilities are classified as non-current when they remain within the company for more than one year.

The preparation of consolidated financial statements according to IFRS requires assumptions and discretionary decision-making that relate to the future and by their nature need not conform to subsequent occurrences. Such assumptions and assessments affect the recognition and measurement of assets and liabilities and of income and expenses. Assessments and assumptions in these consolidated financial statements are based on empirical values as well as other factors that are considered plausible and commercially reasonable under the given circumstances. Because estimates can deviate from actual amounts, assumptions and assessments are reviewed regularly.

The annual financial statements of the companies included in these consolidated financial statements are based on uniform accounting policies. Tax bases are not used as carrying amounts in the consolidated financial statements. The consolidated financial statements were prepared in euro. For purposes of clarity and comparability, all amounts are generally – unless otherwise stated – indicated in thousands of euro (abbreviated as "TEUR"). Minor calculation differences may occur due to commercial rounding of individual items and percentages.

Comprehensive income is presented in two separate statements: the income statement according to the nature of expense method and the statement of comprehensive income.

The accounting policies described below were applied to the consolidated financial statements.

Intangible assets

Intangible assets include both acquired and self-developed intangible items.

Acquired intangible assets are measured at cost less any accumulated amortisation and impairment losses. This includes separately acquired intangible assets, as well as intangible assets acquired as part of a business combination, insofar as they fulfil the recognition criteria of IFRS 3.

Self-developed non-current intangible assets, from which future economic benefits are likely to flow to the Group and which meet the recognition criteria of IAS 38 "Intangible Assets", are measured at the production costs incurred during their development phase. Only directly attributable development costs are capitalised. Research costs are recognised as expenses in the periods in which they are incurred.

Unless they have indefinite useful lives, intangible assets are amortised on a straight-line basis over their respective expected economic lives. In the case of self-developed intangible assets, amortisation begins on the date of asset completion.

The useful lives are:

Intangible Assets	Useful life in years
Self-developed software and software acquired within the scope of business acquisitions	5–9
Licences	3–5
Customer bases	8–10
Other intangible assets	8–10

Intangible assets with indefinite useful lives are not amortised. Instead, these assets are tested for impairment annually and whenever there are indications that an asset may be impaired. If an intangible asset is impaired, such asset is written down to its fair value.

Goodwill

values. If no market values exist, fair values are calculated on the basis of recognised financial calculation models. Any changes in fair value are recognised in income.

Financial derivatives that do not meet the criteria for hedge accounting are recognised in income at fair value.

Property, plant and equipment

Property, plant and equipment are measured at historical cost and depreciated on a straight-line basis over their expected economic lives as follows:

Property, plant and equipment	Useful life in years
Tenant fixtures	10
Factory and office equipment	3-11

If there is an indication of impairment, an impairment test is also performed.

Gains and losses on asset disposals are recognised in other operating income or in other operating expenses, respectively.

Investment subsidies and grants provided by public authorities for the acquisition and production of property, plant and equipment are recognised on the grant date by deducting the grant from the cost, and are depreciated over the useful lives of the assets in the form of reduced depreciation and recognised in income upon disposal of the grant-supported assets.

Financial assets

The Group's financial assets relate to an interest in a German limited company (GmbH) constituting neither control nor significant influence. This interest is carried at cost because no active market exists for it and its fair value cannot be measured reliably.

Derivative financial instruments

Initial recognition and subsequent measurement of derivative financial instruments always takes place at fair value. Market values of listed derivates are used as fair values. If no market values exist, fair values are calculated on the basis of recognised financial calculation models. Any changes in fair value are recognised in income.

Financial derivatives that do not meet the criteria for hedge accounting are recognised in income at fair value.

Inventories

The item inventory includes work in progress. Work in progress is recognised at cost, which contains directly attributable production costs as well as appropriate overhead expenses. Financing costs do not constitute any part of the production cost.

Inventories are measured on the balance sheet date at the lower of cost and net realisable sales price less costs incurred in the future.

Advance payments, receivables and other assets

Trade receivables and other assets are measured at fair value when recognised. Subsequent measurement takes place at amortised cost, taking into account any impairments resulting from differences between the carrying amount of a receivable and the estimated future cash flows to be expected from that receivable. The receivables and other assets thus reported are current assets and are not discounted.

Securities

Securities are measured at fair value.

Cash and cash equivalents

Cash consists of bank balances and cash on hand. Short-term deposits with maturities of up to 90 days are summarised under cash equivalents. All cash and cash equivalents are measured at their nominal values.

Deferred taxes

Deferred taxes are recognised for temporary differences between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements, as well as on tax loss carryforwards, in order to accurately account for future tax liability and relief.

Deferred taxes were measured using tax rates expected to apply on the basis of current legislation at the end of the financial year. The individual conditions governing the respective legal entities were taken into account in the tax calculations. The respective country-specific tax rates were used for foreign companies.

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised in such cases where recoverability seems sufficiently probable in the near future. The tax effect of tax loss carryforwards was recognised in the extent to which a future use of such carryforwards can be expected.

Deferred tax assets and liabilities are offset in the extent to which a legal right of set-off against the same tax authority exists.

Provisions

Provisions are made for present obligations towards third parties if an obligation is likely to lead to a future outflow of resources and the amount of the obligation can be reliably estimated. Short-term provisions are recognised in the amount of their expected settlement values. Longterm provisions are recognised at their present values. To calculate present value, provisions are discounted to the balance sheet date on the basis of an adequate market interest rate for comparable maturities.

Advance payments received

Advance payments received are recognised at their settlement values.

Financial liabilities

Financial liabilities (liabilities to banks, trade payables and other liabilities) are initially recognised at fair value, taking into account transaction costs (such as discounts). Subsequent measurement of non-current liabilities takes place at amortised cost using the effective interest method. Subsequent measurement of current liabilities takes place at undiscounted settlement values.

Tax liabilities

Tax liabilities are recognised in the amounts of the expected tax payments.

Treasury shares

Treasury shares are measured at cost and deducted directly from equity with no effect on income.

Share-based payment

Under the YOC Management Incentive Programme, the first and second management tiers in the YOC Group are granted subscription rights to shares. These are measured at the fair value of the equity instrument on the grant date and expensed on a straight-line basis over the period until vested.

The estimate of the number of vested equity instruments is reviewed on each balance sheet date. Any effects of changes to the original estimates shall be recognised in income over the remaining period until vested, with a corresponding adjustment made to the capital reserve.

Sales revenue and expenses

The YOC Group generates its sales revenue from the provision of services. Sales revenue is recognised when services are provided or when the risks of ownership are transferred to the customer, respectively, so that the resulting economic benefits for the Group are allocated to the accounting periods in which the services are provided.

Sales revenues are measured at the fair value of the consideration received, and reduced by any allowed rebates or similar deductions. Agency commissions are not deducted from sales revenues but are instead reported under other expenses. Expenses are recognised in income as incurred.

Interest

Interest income and expense is recognised in income on an accrual basis.

Leasing

At the YOC Group, there are finance leases as well as operating leases.

In an operating lease, the resulting expense is recognised on a straight-line basis over the lease term. If incentives were received in order to enter into an operating lease, such incentives are recognised as a liability. They are then recognised on a on a straight-line basis over the lease term as a reduction of current rental expense, unless another systemic basis is representative of the time pattern of the benefit from use.

Assets acquired under finance leases were recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. A corresponding amount has been recognised on the balance sheet for liabilities due to lessors.

There are no leases in which companies of the YOC Group act as lessors.

The euro is the functional currency of the parent company and the presentation currency of the Group.

If transactions are invoiced in a foreign currency, receivables and payables are converted at the exchange rate applicable on the closing date of the transaction and entered in the accounting records. Receivables and payables existing on the balance sheet date are adjusted for any changes in exchange rates.

Currency conversion for the annual financial statements of the foreign companies takes place according to the functional currency concept. The functional currency of the respective subsidiary is its national currency.

Assets and liabilities of affiliated companies with functional currencies other than the euro are converted into euro at the exchange rate applicable on the balance sheet date. Changes during the year, as well as expenses and income, are converted into euro at annual average exchange rates. Equity is converted at the respective historical exchange rate.

The differences resulting from the conversion at closing date rates are recognised in equity as currency conversion differences.

Currency conversion is subject to the following exchange rates:

	Closing date exchange rate			Average exchange rate
		31/12/2009 31/12/2008	2009	27/05/2009- 3 1/ 12/ 2009	2008
1 EUR=GBP	0.8998		0.9735 0.8905	0.8824 0.8383

The following table indicates the sensitivity of the Group's consolidated pre-tax earnings and of its equity to a percentage-point change in the exchange rate of the pound sterling (GBP) deemed possible according to reasonable judgement. All other variables remain constant in the analysis.

(in TEUR)	Exchange rate change of the foreign currency in % points	Effect on ear nings before taxes	Effect on equity
2009
Pound sterling (GBP)	+5%	-5	10
	-5%	6	-12
2008
Pound sterling (GBP)	+5%	-16	3
	-5%	17	-3

4. Acquisitions

On 27 May 2009, YOC AG acquired 100% of the shares of Bluestar Mobile Ltd., London, United Kingdom. Bluestar Mobile Ltd. is a British provider of services in mobile marketing and the mobile Internet, operating mobile Internet portals for customers and running mobile marketing campaigns. The acquisition cost of TEUR 1,964 includes incidental acquisition costs amounting to TEUR 116. Customer bases were capitalised in the purchase price allocation. Inseparable synergy effects are included in goodwill. The acquisition resulted in total goodwill of TEUR 1,264.

In financial year 2009, Bluestar Mobile Ltd. contributed to the Group's consolidated profit with revenues of TEUR 1,123 and earnings after taxes of TEUR 271. Had the company been consolidated into the YOC Group as of 1 January 2009, it would have contributed to the Group's consolidated profit with revenues of TEUR 2,022 and earnings after taxes of TEUR 262.

Purchase price allocation (excluding goodwill) of Bluestar Mobile Ltd. (in TEUR)	Historical car rying amounts	Adjustments	Fair values at acquisition
Non-current assets	10	861	871
Intangible assets	0	861	861
Property, plant and equipment	8	0	8
Deferred taxes	2	0	2
Current assets	463	0	463
Receivables and other assets	380	0	380
Bank balances and cash in hand	83	0	83
Debt	393	241	634
Liabilities	393	0	393
Deferred taxes	0	241	241
Net assets	80	620	700

On 22 September 2009, YOC AG acquired 100% of the shares of Mobile Interactive Advertising Media S.L. (MIAM, S.L.), Madrid, Spain. MIAM, S.L. is a mobile advertising service provider that markets advertising space on mobile Internet portals. The acquisition cost of TEUR 548 includes, aside from incidental acquisition costs amounting to TEUR 40, an amount of TEUR 508 consisting of 26,532 treasury shares at a share price of EUR 13.75, a cash payment of TEUR 25, 5,250 subscription rights at a grant-date fair value of EUR 4.12 per right and a conditional purchase price payment of TEUR 97. Customer bases were capitalised in the purchase price allocation. Inseparable synergy effects are included in goodwill. The acquisition resulted in total goodwill of TEUR 597.

In financial year 2009, MIAM, S.L. contributed to the Group's consolidated profit with revenues of TEUR 516 and earnings after taxes of TEUR 87. Had the company been consolidated into the YOC Group as of 1 January 2009, it would have contributed to the Group's consolidated profit with revenues of TEUR 787 and earnings after taxes of TEUR -39.

Purchase price allocation (excluding goodwill) of MIAM, S.L. (in TEUR)	Historical car rying amounts	Adjustments	Fair values at acquisition
Non-current assets	0	193	193
Intangible assets	0	139	139
Property, plant and equipment	0	0	0
Deferred taxes	0	54	54
Current assets	266	0	266
Receivables and other assets	259	0	259
Bank balances and cash in hand	7	0	7
Debt	473	35	508
Liabilities	473	0	473
Deferred taxes	0	35	35
Net assets	-207	158	-49

As the valuation of identifiable assets at Bluestar Mobile Ltd. and at MIAM, S.L., has not been fully completed and the costs of the acquisitions could only be determined provisionally as of the reporting date, the purchase price allocations were made on a preliminary basis and may be adjusted according to IFRS 3 "Business Combinations" within one year after the acquisitions on the basis of final information.

On 12 March 2008, YOC AG acquired 100% of the shares of adbutler GmbH, Hiddenhausen, Germany. adbutler GmbH is one of the leading platforms for affiliate marketing. The acquisition cost of TEUR 2,373 includes incidental acquisition costs amounting to TEUR 11. Customer bases, brands and self-developed software were capitalised in the purchase price allocation. Inseparable values such as synergy effects from the combination of resources and advertising space are included in goodwill. The acquisition resulted in total goodwill of TEUR 1,105.

In financial year 2008, adbutler GmbH contributed to the Group's consolidated profit with revenues of TEUR 3,768 and earnings after taxes of TEUR 146. Had the company been consolidated into the YOC Group as of 1 January 2008, it would have contributed to the Group's consolidated profit with revenues of TEUR 4,655 and earnings after taxes of TEUR 196.

When the consolidated financial statements for the year ended 31 December 2008 were prepared it was assumed that the valuation of identifiable assets at adbutler GmbH had not been fully completed. The final purchase price allocation performed in financial year 2009 produced results unchanged from the preliminary 2008 figures; subsequent adjustments were therefore not necessary.

Purchase price allocation (excluding goodwill) of adbutler GmbH (in TEUR)	Historicalcar rying amounts	Adjustments	Fair values at acquisition
Non-current assets	10	1,475	1,485
Intangible assets	2	1,475	1,477
Property, plant and equipment	8	0	8
Current assets	1,625	0	1,625
Receivables and other assets	121	0	121
Securities	317	0	317
Bank balances and cash in hand	1,187	0	1,187
Debt	1,400	441	1,841
Provisions	10	0	10
Liabilities	1,386	0	1,386
Deferred taxes	4	441	445
Net assets	235	1,034	1,269

External valuation experts were consulted for the implementation of the purchase price allocations for all acquisitions.

Regarding the acquisition of Brutus Media GmbH in financial year 2007, the variable purchase price was

reduced by TEUR 74 in financial year 2009, recognised as a reduction of goodwill.

The business acquisitions in financial years 2008 and 2009 break down as follows:

		2008		2009
Business acquisitions (in TEUR)	Values as of 31/12/2007	adbutler GmbH	Brutus Media GmbH	Bluestar Mobile Ltd.	MIAM, S.L.	Summe
Purchase price	13,666	2,362		1,848	508	18,384
Adjustment of variable purchase price			-74
Incidental acquisition costs	139	11		116	40	306
Total purchase price	13,805	2,373		1,964	548	18,690
Net assets at carrying amounts	2,243	235		80	-207	2 , 3 5 1
Fair value adjustments
Intangible assets	4,504	1,475		861	139	6,979
Deferred tax assets	605			0	54	659
Deferred tax liabilities	1 , 4 0 1	441		241	35	2 ,1 1 8
Total of acquired assets and liabilities	5 , 9 5 1	1,269		700	-49	7,871
Remaining goodwill	7,853	1,104	-74	1,264	597	10,744

The acquisition of Bluestar Mobile Ltd. will be settled in cash. The settlement of the purchase price of MIAM, S.L. involves both the payment of cash and the granting of treasury shares and stock options.

The net cash outflows from the transacted business acquisitions break down as follows:

Business acquisitions (in TEUR)	Bluestar Mobile Ltd.	MIAM, S.L.	Total
Total purchase price	1,964	548	2,512
Non-cash components in the financial year	-551	-523	-1,074
Cash acquired	-83	-7	-90
Net cash outflow	1,330	18	1,348

The amount of TEUR 3,778 shown under "Acquisition of equity investments" in the cash flow statement is derived as follows:

"Acquisition of equity investments" in the cash flow statement (in TEUR)	Brutus Me dia GmbH	Sevenval GmbH	belboon-ad butler GmbH	Bluestar Mobile Ltd.	MIAM, S.L.	Total
Purchase price with cash effects in the reporting year	0	0	0	1,413	25	1,438
Bank balances acquired in business acquisitions	0	0	0	-83	-7	-90
Variable purchase price components subsequently paid in 2009 (capitalised in previous years)	220	1,717	493	0	0	2,430
Acquisition of equity investments	220	1,717	493	1,330	18	3,778

5. Notes on the Statement of Comprehensive Income

The YOC Group generated sales revenues amounting to TEUR 26,123 (2008: TEUR 23,621) from the provision of services in the Mobile Marketing, Affiliate Marketing and Mobile B2C Services segments. The companies Bluestar Mobile Ltd. and MIAM, S.L. newly consolidated in financial year 2009, contributed to revenues in the amount of TEUR 1,123 and TEUR 516, respectively. All revenues arise from the provision of services in product segments that are continuing operations.

(in TEUR)	2009	2008
Changes in inventory	-206	236
Internally produced and capitalised assets	967	412
Total	761	648

No changes inventory and internally produced and capitalised assets are attributable to the acquisitions of the financial year.

Work in progress was capitalised in financial year 2009 in the amount of TEUR 30. The previous year's work in progress in the amount of TEUR 236 was completed and realised as sales revenue.

Furthermore, TEUR 967 was capitalised for the development costs of self-developed software. Development work was performed primarily on the AdServing technology, the functional further development of the mobile Internet technology, the belboon affiliate marketing platform and the development of software deployed for the provision of services in the Mobile Marketing and Mobile Advertising product segments.

The recognition criteria of IAS 38 were met. The directly attributable individual costs were capitalised as production costs for self-developed software. Production costs were determined on the basis of hourly logs and measured at daily rates per employee.

Re s e arch an d d eve l o p m e nt co s t s am o unte d to TEUR 1,627 in financial year 2009 (2008: TEUR 1,288).

They were allocated to the YOC Group's three business segments as follows:

Mobile Marketing	1,054	1,031
Affiliate Marketing	393	257
Mobile B2C Services	180	0
Total	1,627	1,288

Other operating income (in TEUR)	2009	2008
Price gains and gains on currency conversion	36	1
Other non-cash benefits	14	0
Income from government grants	19	0
Miscellaneous other income	109	60
Total	178	61

Miscellaneous other income includes gains on the disposal of property, plant and equipment and additional income of immaterial amounts.

The acquisitions of financial year 2009 contributed no other operating income to the Group's consolidated profit.

Cost of Materials (in TEUR)	2009	2008
Cost of materials for purchased goods	0	38
Cost of materials for purchased services	10,548	9,980
Total	10,548	10,018

The cost of materials for purchased services amounting to TEUR 10,548 (2008: 9,980) mainly contains costs incurred for infrastructure, advertising space on mobile portals and the sending of text messages, MMS and e-mails, as well as costs for fees in the context of affiliate marketing activities and for the utilisation of external services with regard to the implementation of individual projects.

The cost of materials contains an amount of TEUR 494 attributed to Bluestar Mobile Ltd. In the period of its affiliation in the Group, MIAM, S.L. generated material costs in the amount of TEUR 333.

5.5 Personalaufwand
Personnel Costs (in TEUR)	2009	2008
Wages and salaries	8,192	6,009
Social security payments	1 , 1 8 2	1 , 1 1 6
Total	9 , 3 74	7, 1 2 5

The increase in personnel costs in financial year 2009 resulted from the increase in the staff complement of the affiliated companies and, in addition, from the expansion of the scope of consolidation, which increased personnel costs by a total of TEUR 305. Of this amount, TEUR 240 is attributable to Bluestar Mobile Ltd. and TEUR 65 to MIAM, S.L.

An amount of TEUR 21 (2008: TEUR 19) for direct insurance policies is included in the personnel costs. An additional TEUR 39 was recognised as personnel costs in the context of the stock option programme introduced in financial year 2009.

Number of employees	2009	2008
Annual average number of employees	159	133
Number of employees at year-end	173	145

The calculation of the annual average number of employees is carried out on a pro-rata basis from the respective initial consolidation of the acquired company.

Other operating expenses (in TEUR)	2009	2008
Marketing, communications, media buying	3,054	2,484
Cost of day-to-day business operations	9 1 1	855
Legal and consulting expenses	421	228
Subcontracting	397	584
Travel expenses	392	359
Listing expenses	367	55
Allowances on receivables	2 1 6	16 4
Recruiting and further training costs	94	124
Price losses	33	98
Miscellaneous other operating expenses	2 3 0	149
Total	6,115	5,100

The expansion of the scope of consolidation led to an increase in other operating expenses in the amount of TEUR 62 in financial year 2009. TEUR 55 is attributable to Bluestar Mobile Ltd. and TEUR 7 to MIAM, S.L.

The cost of day-to-day business operations item includes rental expenses under long-term operating leases. As in the previous year, this expense amounted to TEUR 148 in financial year 2009.The item further includes lease expenses for motor vehicles in the amount of TEUR 35 (2008: TEUR 40).

The listing expenses of TEUR 367 include TEUR 313 in expenses incurred as part of the uplisting of YOC AG from the Entry Standard to Prime Standard.

Net interest income (in TEUR)	2009	2008
Income from securities and other interest income	64	173
Interest income	64	173
Interest and similar expenses	81	185
Interest expense for non-current liabilities	646	364
Interest expenses	727	549
Net interest income	-663	-376

The recognition of fair values for the variable purchase price components of the business acquisitions resulted in the discounting of the associated liabilities, which were originally classified as non-current, to the date of the business acquisition. Subsequent measurement (unwinding of the discount) produced an interest expense of TEUR 56 (2008: TEUR 127).

Interest expenses for non-current liabilities include an amount of TEUR 310 arising from the fair value measurement of financial derivatives (interest rate swaps) as of 31 December 2009.

The newly consolidated companies Bluestar Mobile Ltd. and MIAM, S.L. generated a net financial result of TEUR 2 in total.

The tax expense for financial year 2009 breaks down as follows:

Income taxes (in TEUR)	2009	2008
Actual taxes on income
Domestic	1	175
International	72	29
Actual taxes on income	73	204
Deferred taxes
Domestic	-346	281
International	-118	-129
Deferred taxes	-464	152
Total income taxes	-391	356

The taxes on income consist of the corporate income tax, the municipal trade tax and the solidarity surcharge in Germany, and of the foreign taxes on income.

Deferred taxes recognised in income break down as follows:

Deferred taxes recognised in income (in TEUR)	2009	2008
From temporary differences	-326	350
From tax loss carryforwards and tax credits	-138	-198
Total	-464	152

Deferred taxes recognised in income for the financial year amount to a total of TEUR -464 (2008: TEUR 152).

A total of TEUR 6 in deferred taxes recognised in income was incurred at the acquired subsidiaries in the financial year.

The following table shows the offsetting and reconciliation from expected tax expense to actual disclosed tax expense.

Reconciliation (in TEUR)	2009		2008
	TEUR	%	TEUR	%
Earnings before taxes	-534		867
Relevant tax rate		30,4		30,2
Expected tax expense	-163		262
Changes from the deviation of the tax base
Effects of differences in the trade tax multipliers	-55		0
Non-tax-deductible expenses	37		7
Tax rate differences
Effects of differences in the trade tax multipliers	21		19
Effects of differing foreign tax rates	-3		60
Recognition and measurement of deferred tax assets
Valuation adjustments of deferred taxes on tax loss carryforwards	87		0
Additions of deferred taxes on tax loss carryforwards	-341		0
Other
Other	26		8
Actual tax income (2008: tax expenses) according to profit and loss statement	-391		356

The expected tax expense is calculated by multiplying the Group's consolidated profit before taxes by the parent company's tax rate of 30.44% (2008: 30.18%). The relevant tax rate is calculated according to the tax regulations valid on the closing date of the financial statements. The corporate income tax, the solidarity surcharge and the municipal trade tax are considered accordingly.

The following deferred tax assets and liabilities were recognised on differences and on tax loss carryforwards:

Deferred tax assets and liabilities (in TEUR)		2009		2008
	Deferred tax assets	Deferred tax liabilities	Deferred tax assets	Deferred tax liabilities
Intangible assets	311	2,214	0	1,815
Property, plant and equipment	0	0	5	0
Receivables	0	2	0	12
Other provisions	0	3	5	3
Liabilities	85	1	0	60
Tax loss carryforwards and credits	1,176	0	984	0
Other	0	0	5	0
Total	1,572	2,220	999	1,889
Offsets	-1,418	-1,418	-250	-250
Recognised on the balance sheet	154	802	749	1,639

Deferred taxes are recognised for German tax issues using a corporate income tax rate of 15% and a solidarity surcharge of 5.5%. The municipal trade tax is calculated using a 3.5% base rate and the respective multiplier specific to each municipality.

Deferred taxes on balance sheet items relating to the foreign equity investments were recognised in consideration of the tax conditions applicable to the respective company.

Deferred taxes for tax loss carryforwards were included in consideration of their future recoverability. Deferred taxes on tax loss carryforwards in the amount of TEUR 341 not recognised in the previous year were recognised in financial year 2009 based on the new consolidated tax group. This was offset by valuation adjustments on deferred taxes on tax loss carryforwards in the amount of TEUR 87.

Tax receivables amounting to TEUR 231 (2008: TEUR 48) contain the following items:

Tax receivables (in TEUR)	2009	2008
Claims for refund of:
Corporate income tax	67	35
Municipal trade tax	60	0
Investment income tax	96	13
Solidarity surcharge	8	0
Total	231	48

No tax receivables are attributable to the newly consolidated companies.

Tax liabilities amount to TEUR 128 as of 31 December 2009 (2008: TEUR 149). Of this amount, TEUR 28 in tax liabilities is attributable to Bluestar Mobile Ltd.

The registered share capital as of 31 December 2009 is divided into 1,750,000 bearer shares (2008: 1,750,000 shares) each with a nominal value of EUR 1 per share. The conditional capital was not included in the computation of diluted earnings per share as its conditions were not fulfilled as of the balance sheet date. Earnings after taxes for financial year 2009 amounted to TEUR -143 (2008: TEUR 510).

Basic and diluted earnings per share thus both amount to EUR -0.08 (2008: EUR 0.29).

As in the previous year, segment reporting is based on internal management and reporting structures.

As of 31 December 2009, the YOC Group is organised in three reportable segments that are distinguished by the products they offer. The main activities are classified as follows:

• Mobile Marketing
• Affiliate Marketing
• Mobile B2C Services

In the Mobile Marketing segment, the YOC Group offers mobile marketing solutions based on scalable technological platforms. The solutions include permission-based contact via mobile phone in mobile push marketing, using the mobile phone as a backchannel in response marketing, the marketing of mobile display advertising space on mobile Internet sites, the development of mobile applications, the development of mobile Internet portals and the licensing of the associated software.

The Affiliate Marketing segment encompasses the operations of the belboon affiliate marketing network. The principal objective of this performance-based marketing is to support the creation partnerships between advertisers and the operators of stationary and mobile Internet portals.

In the Mobile B2C Services segment, value-added services and entertainment services such as screen backgrounds, screen savers, individually adapted user interfaces (themes), logos that can be personalised, ringtones, animations, films and mobile games are offered to end-consumers for purchase directly over the mobile phone.

The following table shows the earnings generated by the individual segments. In accordance with the internal reporting structure, EBITDA is used as the earnings metric:

Segment reporting (in TEUR)	Mobile Marketing	Affiliate Marketing	Mobile B2C Services	Consolidation	Overhead	YOC Group
01/01/2009 – 31/12/2009
External sales	17,500	6,540	2,083	-	-	26,123
Intercompany sales	2,456	30	878	-3,364	-	-
Total sales revenues	19,956	6,570	2,961	-3,364	-	26,123
Internally produced and capitalised assets	565	222	180	-	-	967
Changes in inventory	-206	-	-	-	-	-206
Other operating income	164	6	9	-	-	178
Overall performance	18,022	6,768	2,272	-	-	27,063
Cost of materials	5,292	4,930	326	-	-	10,548
Personnel costs	6,770	800	229	-	1,576	9,375
Other operating expenses	2,914	151	1,568	-	1,482	6,113
EBITDA	3,046	888	149	-	-3,058	1,025
01/01/2008 – 31/12/2008
External sales	13,207	7,865	2,548			23,621
Intercompany sales	608	35	851	-1,494		0
Total sales revenues	13,816	7,900	3,399	-1,494		23,621
Internally produced and capitalised assets	163	249	0			412
Changes in inventory	236	0	0			236
Other operating income	35	19	6			60
Overall performance	13,642	8,133	2,554			24,329
Cost of materials	3,286	6,280	452			10,018
Personnel costs	5,249	529	222		1,125	7,125
Other operating expenses	2,365	174	1,768		792	5,100

EBITDA 2,743 1,149 113 -1,917 2,086

Impairment charges and reversals of impairments were not recognised in any of the segments.

The accounting policies of the reportable segments are in line with the accounting policies used in the consolidated financial statements.

The internal reporting structure was changed from the previous year such that certain overhead costs are now reported separately whereas they had previously been reported in the Mobile Marketing segment. The previous year's figures have been restated accordingly.

EBITDA can be reconciled to earnings after taxes as follows:

Earnings after taxes (in TEUR)	2009	2008
EBITDA	1,025	2,086
Depreciation, amortisation and impairments	-896	-844
Financial result	-663	-376
Taxes	391	-356
Earnings after taxes	-143	510

TEUR 21,095 (2008: TEUR 20,252) in external sales is attributed to Germany and TEUR 5,028 ( 2008: TEUR 3,369) is attributed to international sales.

Sales revenues are generally allocated to the country in which the service is performed. If such allocation is not possible, the revenue is allocated to the country in which the request for the service originated.

Of the non-current assets, TEUR 4,543 is attributable internationally and TEUR 14,961 is attributable to Germany.

Other earnings in financial year 2009 include changes from currency conversion in the amount of TEUR 18 (2008: TEUR 1 gain).

No amounts have been recognised in the income statement. There were no taxes to be considered.

6. Notes on individual balance sheet items

Property, plant and equipment primarily includes operating and office equipment and IT infrastructure, especially server systems.

The consolidated balance sheet shows a tangible asset inventory amounting to TEUR 725 at the end of 2009 (2008: TEUR 624). Scheduled depreciation for tangible assets amounted to TEUR 159 for the financial year (2008: TEUR 184). Through its acquisition of Bluestar Mobile Ltd. in financial year 2009, the YOC Group acquired property, plant and equipment with a gross book value of TEUR 27. This is equal to a net book value of TEUR 8. Bluestar Mobile Ltd. contributed TEUR 5 to the amount of scheduled depreciation. Both on the acquisition date and at 31 December 2009, the subsidiary MIAM, S.L. had no tangible fixed assets.

There are no restraints on disposal or restrictions for individual tangible assets. Likewise, no tangible assets were pledged or offered as security in any other way.

There were no unscheduled write-downs or depreciation of tangible fixed assets.

Changes in property, plant and equipment (in TEUR)	Property, plant and equipment
Acquisition costs
as of 1/1/2008	1,448
Changes in the scope of conso lidation	51
Additions	189
Disposals	1 2 5
as of 31/12/2008	1,563
Depreciation
as of 1/1/2008	836
Changes in the scope of conso lidation	44
Additions	18 4
Disposals	1 2 5
as of 31/12/2008 Net book value on 31/12/2008	939 624
Acquisition costs
as of 1/1/2009 Changes in the scope of conso	1,563 26
lidation
Additions	279
Disposals	129
Currency translation effects	-2
as of 31/12/2009	1,738
Depreciation as of 1/1/2009	939
Changes in the scope of conso lidation	19
Additions	1 5 9
Disposals	103
Currency translation effects	-1
as of 31/12/2009	1,013

The changes in goodwill are shown in the following table:

as of 1/1/2008	7,701
Additions	1,256
Disposals	0
Impairments	0
as of 31/12/2008	8,957
Additions	1,861
Disposals	74
Impairments	0
as of 31/12/2009	10,744

The change in goodwill during financial year 2009 was partially attributable to the first-time consolidation of the two subsidiaries, Bluestar Mobile Ltd. and MIAM, S.L., which resulted in goodwill of TEUR 1,861. This was partially offset by the adjustment of the variable purchase-price component for Brutus Media GmbH, which reduced goodwill by TEUR 74. The goodwill attributable to the 2009 acquisitions was determined during the purchase price allocation process.

Additions and disposals during financial year 2009 refer exclusively to the Mobile Marketing business segment.

Goodwill was subject to an impairment test at the end of the year in accordance with IAS 36. In carrying out the impairment test, the goodwill was allocated to the cashgenerating units (reporting units) that are expected to benefit from the synergies of the acquired companies. These reporting units represent the lowest level at which goodwill is monitored for corporate management purposes. They correspond to the business segments defined in IFRS 8.

The impairment test involves identifying the value in use of the reporting units using estimated future cash flows, which are developed as part of medium-term planning. Medium-term planning relies on past empirical values and takes into account market growth expectations for specific business segments. The medium-term planning horizon is five years. Cash flows after this five-year period are projected using a growth rate of 2%, which does not exceed the assumed average market growth rate for the respective reporting units. Discount rates are based on the weighted average cost of capital customary for the industry and ranged from 8.7% to 10.6% before taxes for 2009.

The impairment test confirmed the intrinsic value of the goodwill.

The following table provides a breakdown of goodwill by business segment:

Die Werthaltigkeitstests bestätigten die Werthaltigkeit der (in TEUR)	2009	2008
Geschäfts- oder Firmenwerte. Mobile Marketing	9,042	7,255
Affiliate Marketing	1,104	1,104
Die nachfolgende Tabelle zeigt die Zuordnung der Mobile B2C Marketing	598	598
Geschäfts- oder Firmenwerte auf die Geschäftssegmente: Total	10,744	8,957

The inventor y of intangible asset s amounted to TEUR 8,036 (2008: TEUR 6,510) on 31 December 2009 and consists of the following:

Intangible assets (in TEUR)	2009	2008
Intangible assets with indefinite useful lives	1,538	1,483
Intangible assets with definite useful lives	6,498	5,027
Total	8,036	6,510

The item "Intangible assets with indefinite useful lives" includes websites worth TEUR 975 (2008: TEUR 937) and trademarks worth TEUR 563 (2008: TEUR 546).

Intangible assets with indefinite useful lives were allocated to specific cash-generating units as follows:

Business segment	Cash-generating unit	2009 (in TEUR)	2008 (in TEUR)
Mobile Marketing	Websites (from the Brutus Media GmbH acquisition)	911	911
	Other websites	64	26
	Other trademarks	17	0
Affiliate Marketing	Trademarks (from the adbutler GmbH acquisition)	546	546
Total		1,538	1,483

The adbutler brand was valued using the relief-fromroyalty method. A royalty rate of 1% was applied to trademark-related revenues. For 2009, the discount rate before taxes was 10.9%. The remarks concerning the procedure used to perform impairment tests on goodwill apply to the website valuation.

The impairment tests did not indicate the need to recognise any impairment.

Intangible assets with definite useful lives include the following items:

(in TEUR)	2009	2008
Software produced in-house	2,496	1,839
Software and licences	325	165
Customer bases	3,677	3,023
Total	6,498	5,027

Already completed portions of the software, which were valued at their production cost of TEUR 2,296, are amortisated on a straight-line basis over their useful lives of 5 to 9 years. As of 31 December 2009, the remaining useful lives were from 4.75 to 7.75 years. Software produced in-house, for which the development process has not yet been completed and which is not yet being used, was not subject to any depreciation during the financial year.

Customer bases amounting to TEUR 3,677 (2008: TEUR 3,023) include the customer bases acquired along with the subsidiary acquisitions. The acquisition in financial year 2009 led to an increase of TEUR 980 in customer bases.

Scheduled amortisation for intangible assets amounted to TEUR 737 for the financial year (2008: TEUR 660). Of that amount, TEUR 57 was attributable to the first-time consolidation of acquired companies.

There were no impairments.

There were no restraints on disposal or restrictions for individual intangible assets. Likewise, no intangible assets were pledged or offered as security in any other way.

Changes in intangible assets:

Changes in intangible assets (in TEUR)	Software produced in-house	Websites and trade mark rights	Software and licences	Customer bases	Total
Acquisition costs
as of 1/1/2008	1,323	911	627	3,135	5,996
Changes in the scope of consolidation	230	546	7	699	1,482
Additions	412	26	61	0	499
as of 31/12/2008	1,965	1,483	695	3,834	7,977
Amortisation
as of 1/1/2008	51	0	404	347	802
Changes in the scope of consolidation	0	0	4	0	4
Additions	174	0	121	366	660
Currency translation effects	0	0	0	0	0
as of 31/12/2008	225	0	529	713	1,467
Net book value on 31/12/2008	1,740	1,483	166	3,121	6,510
Acquisition costs
as of 1/1/2009	1,965	1,483	695	3,834	7,977
Changes in the scope of consolidation	0	0	0	1,000	1,000
Additions	967	55	260	0	1,282
Disposals	0	0	52	0	52
Currency translation effects	0	0	0	-20	-20
as of 31/12/2009	2,932	1,538	903	4,814	10,187
Amortisation
as of 1/1/2009	225	0	529	713	1,467
Changes in the scope of consolidation	0	0	0	0	0
Additions	211	0	101	425	737
Disposals	0	0	52	0	52
Currency translation effects	0	0	0	-1	-1
as of 31/12/2009	436	0	578	1,137	2,151
Net book value on 31/12/2009	2,496	1,538	325	3,677	8,036

The "Long-term investments" item recognises YOC AG's TEUR 1 equity investment in mando.tv GmbH, which was acquired in financial year 2007. This investment stake was acquired for strategic reasons.

No expenses or income have been reported for this investment.

On 31 December 2009, the YOC Group made advance payments of TEUR 121 (2008: TEUR 88) for text message volumes and telecommunication costs, among other things. Moreover, expenditures before the financial statement closing date that led to expenses for a certain period of time after the financial statement closing date were recognised as advance payments made. Such advance payments mainly contain prepaid leases, insurance premiums and licences.

At the end of the financial year, inventories were disclosed in the form of services in process totalling TEUR 30 (2008: TEUR 236).

There were no restraints on disposal or restrictions for inventories and advance payments made. Likewise, no inventories or advance payments made were pledged or offered as security in any other way.

Tr a d e r e c e i v a b l e s t o t a l l e d T E U R 5 , 9 4 4 o n 31 December 2009 (2008: TEUR 4,945) These consisted of the following:

Trade receivables (in TEUR)	2009	2008
Trade receivables, before write-downs	5,993	5,090
Specific loss allowances	-49	-145
Total	5,944	4,945

The loss allowances set up for trade receivables changed as follows:

(in TEUR)	2009	2008
Balance at 1/1	145	8
Additions from first-time consolidation	0	20
Utilisation	125	9
Additions	29	126
Balance at 31/12	49	145

Trade receivables due (in TEUR)
Not due as of 31/12/2009	3,329
Due on 31/12/2009, written down	60
Due on 31/12/2009, not written down	2 , 6 3 4
Total before write-downs	5,993

No collateral has been provided for trade receivables and other assets.

As of 31 December 2009, Bluestar Mobile Ltd. had TEUR 572 of trade receivables and MIAM, S.L. had trade receivables totalling TEUR 526.

Other assets consist of the following:

Sonstige Vermögenswerte (in TEUR)	2009	2008
Accruals and deferrals	0	118
Other assets	158	106
Total	158	224

The item "Accruals and deferrals" summarises expenditure that will only lead to expenses within a certain period of time after the balance sheet closing date. The remaining assets encompass various small items such as deposits. There were no write-downs.

All receivables and other assets encompass short-term items.

There were no particular default risks. In particular, there were no major concentrations of default risks for receivables and other assets measured at fair value through profit or loss. The above-mentioned book values reflect the maximum default risk of the Group with regard to such receivables and assets.

During financial year 2009, the YOC Group sold all securities, which totalled TEUR 1,340 at 31 December 2008. This resulted in a capital gain of TEUR 17.

Liquid assets encompass all bank deposits and cash on hand as well as current fixed-term deposits, for a total of TEUR 2,825 (2008: TEUR 4,529). As of the balance sheet date, the credit balances with various banks were earning interest rates of between 0% and 2.55%. Bank accounts kept in foreign currencies were converted on the closing date. As of 31 December 2009, none of the liquid assets had been pledged as collateral.

The first-time consolidation of the subsidiaries Bluestar Mobile Ltd. and MIAM, S.L. added cash and cash equivalents of TEUR 179 and TEUR 13, respectively, as of 31 December 2009.

The YOC Group uses a liquidity forecast for the entire group based on a fixed planning horizon to counter the liquidity risk.

The YOC Group's subscribed capital totalled TEUR 1,750 on 31 December 2009 (unchanged). The subscribed capital is divided into 1,750,000 registered shares with a nominal value of EUR 1.00 per share. The subscribed capital was fully paid-up.

With the approval of the Supervisory Board, the Management Board may have at its disposal TEUR 587.5 of authorised capital through 11 April 2011 and additional authorised capital of TEUR 287.5 through 15 May 2011, meaning total authorised capital of TEUR 875. The authorised capital can be used on one or more occasions to increase share capital through the issuance of new registered shares.

The following table shows the shareholder structure of YOC AG on 31 December 2009:

Die nachfolgende Tabelle zeigt die Aktionärsstruktur der Shareholders of YOC AG	Beteiligungen in %
YOC AG zum 31. Dezember 2009: Management Board	22.57%
Management and Supervisory Boards	3.45%
Michael Schwetje*	22.60%
DIH Finanz und Consult GmbH	13.23%
IPConcept Fund Management S.A.	10.40%
dkam GmbH**	7.42%
YOC AG (Treasury stock)	1.20%
Free float	19.13%

*of which 22.50% is allocated to Michel W. Schwetje via Schwetje Holding GmbH, which in turn is allocated 22.50% of Schwetje Invest GmbH.

** The sole shareholder and Managing Director of dkam GmbH is Mr Dirk Kraus.

In financial year 2009, the company created contingent capital in order to be able for the first time to grant stock options to the management and employees of the company and their affiliated companies as part of the stock-option programme.

Of the total volume of 175,000 potential stock options, 115,500 shares, i.e., up to 66% of the total volume, may be granted to members of YOC AG's Management Board. Employees of YOC AG, as well as employees of affiliated companies, may be granted a total of 59,500 shares, i.e., up to 34% of the total volume. Each stock option confers the right to buy one share of YOC AG at the exercise price.

The exercise price is equal to 100% of the unweighted average Xetra closing price of the YOC share on the last eight trading days before commencement of the acquisition period in which the stock options are granted, but not less than the closing price of the share on the date when the stock options are granted. The stock options may only be exercised during certain exercise periods, but in any case not until three years from the date they are granted, at the earliest, and in 2017, at the latest.

Exercise of the shares is tied to an increase in the YOC share's stock market price of at least 15% by the third year following issuance of the respective stock options, at least 20% by the fourth year and at least 25% by the fifth year. In addition, the Exercising Party must have been continuously employed by YOC AG or one of its affiliated companies since the date when the stock options were granted. The right to exercise the stock options shall remain intact if the employment agreement is terminated due to long-term illness, disability, retirement, a mutual agreement to cancel the employment agreement or parental leave.

New stock options may be granted, as part of the total volume, for stock options that have lapsed due to terminations.

In the event of a takeover bid for YOC AG shares pursuant to Sections 29, 35 of the German Securities Acquisition and Takeover Act (WpÜG), the stock options may be exercised within an additional exercise period, so long as the statutory waiting period of two years is observed.

In financial year 2009, 149,500 stock options with an exercise price of EUR 13.25 were issued to employees and management of the company and its affiliated companies and were outstanding as of 31 December 2009. No stock options were exercised during the year under review and no stock options were exercisable as of 31 December 2009.

On 31 December 2009, the capital reserve (additional paid-in capital) totalled TEUR 9,143. The addition to the capital reserve includes TEUR 39 of liabilities which, as part of the stock-option programme, must be taken directly to equity in accordance with IFRS 2. The utilisation of previously acquired shares resulted in a further addition to the capital reserve of TEUR 4.

As of 3 1 December 2009, retained earnings totalled TEUR 1,254 (2008: TEUR 1,398).

The changes in reserves are shown in the Statement of changes in equity.

In financial year 2009, YOC AG bought back 23,000 shares of its own stock at an average price of EUR 12.50. During the acquisition of MIAM, S.L., 2,000 of the shares were granted to the seller as part of the purchase price at a price of EUR 13.75. No other shares were sold during financial year 2009. On 31 December 2009, YOC AG therefore held 21,000 shares of treasury stock.

Provisions consisted of the following:

Provisions (in TEUR)	Balance as of 1/1/2009	Utilisation	Reversal	Addition	Balance as of 31/12/2009
Filing provisions	48	3	0	3	48
Auditing and financial reporting provisions	253	253	0	135	135

On 31 December 2009, the YOC Group had provisions totalling TEUR 184 (2008: TEUR 301). Of this amount, TEUR 48 (2008: TEUR 48) is classified as non-current and TEUR 135 (2008: TEUR 253) is classified as current.

The item "Non-current provisions" includes filing provisions amounting to TEUR 48 (2008: TEUR 48) resulting from the obligation to retain company documents.

After netting the accrued interest and adjusting the interest rate to market conditions, there was no need for any major adjustment. The market value was determined on the basis of an average of listed, long-term bonds with the same maturities in consideration of an inflation rate of 0.4%.

Current provisions include obligations for financial reporting and auditing costs totalling TEUR 135 (2008: TEUR 143). This item also contains internal expenses for the preparation of the financial statements in addition to the external expenses for the 2009 audit.

Current provisions also include TEUR 4 for the first-time consolidation of Bluestar Mobile Ltd.

As of 31 December 2009, the YOC Group's liabilities totalled TEUR 16,113 (2008: TEUR 14,059). Of the total advance payments received, TEUR 7 was

2009		2008
Liabilities (in TEUR)	non-current	current	non-current	current
Advance payments received	0	1,629	0	1, 2 2 5
Tax liabilities	0	128	0	149
Non-financial liabilities	0	1,757	0	1 , 3 74
Financial liabilities	1,330	4,645	837	5,086
Trade payables	0	3,707	0	1 , 5 4 6
Other financial liabilities	823	3 , 8 5 1	14 6	5,070
Financial liabilities	2,153	12,203	983	11,702
Total	2,153	13,960	983	13,076

attributable to the first-time consolidation of Bluestar Mobile Ltd.

Th e tot al f inan cial liabilitie s of TEUR 5 , 97 5 on 31 December 2009 (2008: TEUR 5,923) contain non-current liabilities to banks of TEUR 1,330 (2008: TEUR 837) and current liabilities to banks of TEUR 4,645 (2008: TEUR 5,086).

Financial liabilities (in TEUR)	Utilisation	Effective rate of interest in %	Maturity
Long-term loan	837	EURIBOR+1.2%	quarterly repayment until 29/2/2012
thereof short-term	372	EURIBOR+1.2%
Long-term loan	1,125	6.60%	quarterly repayment until 30/6/2014
thereof short-term	260	6.60%
Short-term loan	4,000	EURIBOR+0.8%	Daily
Utilisation of credit line	13	7.50%	Daily
Total	5,975

Negotiations are currently under way concerning an extension of the short-term loan amounting to TEUR 4,000. The company is seeking a 3-year extension.

The interest-rate swaps entered into have resulted in an effective interest rate of 5.48% for the TEUR 837 longterm loan and 5.3% for the TEUR 4,000 short-term loan. Because all loans either have a fixed interest rate or have been hedged using interest-rate swaps, there is only an insignificant exposure to interest-rate risk for the TEUR 13 utilisation of the line of credit.

As of 31 December 2009, no collateral had been pro-

vided for the financial liabilities.

The Group's exposure to the risk of fluctuations in market interest rates mainly relates to the loan for financing company acquisitions, which is subject to a variable interest rate.

On the basis of the credit agreements that YOC AG concluded in financial years 2007 and 2008, the company arranged an interest-rate hedge covering 100% of the respective credit volume with two interest-rate swaps. The interest-rate swaps expire on 30 September 2012 and 29 February 2012, respectively. As of 31 December 2009, the fair value of the interest-rate swaps was TEUR -280 and TEUR -30, respectively. The change in the fair values was recognised in profit or loss.

As of 31 December 2009, trade payables totalled TEUR 3 ,707 ( 2008: TEUR 1, 5 4 6). Of this amount , TEUR 198 was attributable to Bluestar Mobile Ltd. and TEUR 417 was attributable to MIAM, S.L.

Other liabilities of TEUR 4,674 on 31 December 2009 (2008: TEUR 5,215) contain non-current liabilities of TEUR 823 (2008: TEUR 146) and current liabilities of TEUR 3,851 (2008: TEUR 5,070).

Other non-current liabilities mainly include long-term liabilities from contingent purchase price components of TEUR 457 relating to the acquisition of MIAM, S.L., liabilities from financial derivatives and liabilities from finance leases and deferred incentive payments for operating leases.

Other short-term liabilities particularly encompass obligations for variable purchase price components from company acquisitions. Furthermore, the item mainly contains liabilities for other taxes and goods and services received, which had neither been paid nor invoiced on 31 December 2009, as well as deferred amounts for personnel expenses and social security.

Of the total other current liabilities, TEUR 198 was attributable to Bluestar Mobile Ltd and TEUR 273 was attributable to MIAM, S.L.

As of 31 December 2009, the company had financial commitments for outstanding lease instalments for office space, leased operating and office equipment and vehicle leases.

Below is a schedule of commitments under operating leases:

Other financial obligations (in TEUR)	2009	2008
Up to 1 year	189	179
1 to 5 years	329	458
Over 5 years	0	0
Total	518	637

In financial year 2009, TEUR 183 was expensed as lease payments under operating leases. There were no lease commitments pursuant to IFRIC 4.

In addition, at 31 December 2009, the company had commitments under finance leases for tenant improvements and office equipment with maturities of 3 years. Of the TEUR 116 of total lease commitments under finance leases, the maturities are as follows:

Minimum lease payments (in TEUR)	2009	2008
Up to 1 year	42	0
1-5 years	74	0
more than 5 years	0	0
Total	116	0

The present value of the minimum lease payments is shown in the following table:

Present value of minimum lease payments (in TEUR)	2009	2008
Up to 1 year	27	0
1-5 years	47	0
more than 5 years	0	0
Total	74	0

The minimum lease payments can be reconciled with

the present value as follows:

Reconciliation (in TEUR)	31/12/2009	31/12/2008
Minimum lease payments as of the balance sheet date	116	0
- Future financing costs	-42	0
= Present value of minimum lease payments	74	0

Commitments under finance leases are included under the following balance sheet items:

Lease commitments (in TEUR)	31/12/2009	31/12/2008
Current liabilities	27	0
Non-current liabilities	47	0
Total	74	0

The fair value of the commitments under finance leases is essentially equal to the book value.

Lending and similar forms of financing do not apply.

In financial year 2009, the company received public grants totalling TEUR 19 to implement projects in the State of North Rhine-Westphalia and TEUR 54 in funding to cover the purchase of operating and office equipment.

The following table shows the book values of the financial assets and liabilities reported in the consolidated financial statements and their breakdown in accordance with IAS 39:

Financial assets (in TEUR)	2009	2008
Cash and cash equivalents	2,825	4,529
Securities (held for trading) mea sured at fair value through profit or loss	0	1,340
Loans and receivables
Trade receivables	5,944	4,945
Other assets	158	224
Financial liabilities (in TEUR) Derivatives (interest-rate swaps) mea sured at fair value through profit or loss – Shown under Other liabilities	310	263
Liabilities to banks measured at amortised cost
Liabilities to banks measured at amortised cost	5,975	5,923
Verbindlichkeiten aus Lieferungen und Leistungen	3,707	1,546
Other liabilities	4,364	4,953

Long-term investments amounting to TEUR 1 (Category: Available for sale) are measured at acquisition cost, as no market values are available.

The following table shows the contractually agreed,

future undiscounted cash outflows relating to financial instruments:

	Undiscounted cash outflows
Aging schedule (in TEUR)	Book value as of 31/12/2009	Up to 1 year	1 to 5 years	more than 5 years
Liabilities to banks	5,975	4,645	1,505	0
Other liabilities	4,674	3,866	869	0
Trade payables	3,707	3,707	0	0

Aging schedule (in TEUR)	Book value as of 31/12/2008	Up to 1 year	1 to 5 years	more than 5 years
Liabilities to banks	5,923	5,086	837	0
Other liabilities	5,216	5 , 1 1 6	146
Trade payables	1,546	1,546	0	0

The YOC Group has a Group-wide cash management system that monitors the liquidity of the Group companies on a daily basis.

The book values of the financial assets and liabilities are equal to their current market values.

As in the previous year, the maximum default risk as of 31 December 2009 was equal to the book value of the total assets.

The revenues and expenses, profits and losses recognised in the profit and loss statement are shown in the following table:

(in TEUR)	2009	2008
Loans and receivables (including cash and cash equivalents)	-166	-238
Financial liabilities measured at amortised cost	-417	-431
Financial assets measured at fair value through profit or loss	-293	0

Interest expense totalling TEUR 417 (2008: TEUR 431) and interest income totalling TEUR 47 (2008: TEUR 14) were not included in the item "Financial assets measured at fair value through profit or loss".

7. Notes on the Cash Flow Statement

Operating cash flow

The operating cash flow is determined according to the indirect method. The after-tax loss for the financial year amounting to TEUR -143 (2008: profit of TEUR 510) constitutes the starting point for the calculation.

Operating cash flow amounting to TEUR 2,502 (2008: TEUR 1,895) contains all transactions for the year affecting net income that are not attributable to investment or financing activities.

Cash flow from investment activities

Investment activities resulted in a cash outflow of TEUR -3,966 (2008: TEUR -850) for the financial year. The outflow mainly resulted from payments totalling TEUR 3,778 for the acquisition of equity investments.

The purchase of property, plant and equipment and intangible assets resulted in a cash outflow of TEUR 576 in 2009. Bluestar Mobile Ltd. accounted for TEUR 19 of this amount. Further cash outflows totalling TEUR 967 were attributable to the development of software. Non-cash components of the transactions were eliminated.

In addition, the management of the YOC Group decided to classify the cash flow from the sale of securities in financial year 2009 as cash flow from investment activities, unlike in financial year 2008. Management is convinced that classifying such transactions as cash flow from investment activities will provide a significantly more reliable basis for assessing the financial position of the YOC Group. The prior-year amount was reclassified accordingly.

Cash flow from financing activities

The company took out a TEUR 1,300 loan in conjunction with the acquisition of Bluestar Mobile Ltd., under which it utilised TEUR 1,248, and utilised TEUR 13 of a credit line, resulting in cash flow of TEUR 1,261. It also repaid TEUR 1,216 of bank loans.

The acquisition of treasury stock resulted in a TEUR 288 use of cash flow from financing activities.

Cash and cash equivalents includes cheques, cash on hand and bank deposits as well as short-term financial investments with a maturity of up to 90 days. On 31 December 2009, cash and cash equivalents totalled TEUR 2,825 (2008: TEUR 4,529).

8. Notes on changes in equity

In addition to the net income for the year which was added to retained earnings, the following items had an effect on shareholders' equity:

Currency translation effects from the consolidation of the foreign subsidiaries, YOC Ltd. and Bluestar Mobile Ltd., led to a TEUR 18 reduction in shareholders' equity (2008: increase of TEUR 1).

In addition, the share buyback programme in financial year 2009 reduced shareholders' equity by TEUR 288. This was partially offset by the use of treasury shares as a component of the purchase price in the MIAM, S.L. acquisition, which increased shareholders' equity by TEUR 28.

The introduction of YOC's Management Incentive Programme in financial year 2009 raised shareholders' equity by TEUR 39.

9. Other disclosures

Due to the YOC Group's business model, with the exception of lease contracts, no contracts or warranties are concluded which would establish long-term contingencies, guarantees or other warranties and obligations. There are no other contingent liabilities.

No events that could have had a material effect on the net assets, financial position and results of operations of the YOC Group occurred after the balance sheet date.

Principles governing the management of opportunities and risks

The YOC Group is an international service provider operating in a dynamic market, which naturally involves entrepreneurial, sectoral and financial risks. Such risks may result from the Group's own corporate activities or from external factors. The YOC Group has therefore adopted appropriate measures for the early detection and reduction of these potential risks. To this effect, a risk management system was established under which risks are recorded in a Group-wide risk inventory at regular intervals, evaluated and, where necessary, monitored on an ongoing basis.

The risk policy adopted by the Management Board for the YOC Group remains unchanged and operates as a component of corporate policy, as part of the Group's pursuit of sustainable growth, an increase in company value and the long-term focus on ensuring the company's continued existence as a going concern. In view of the above, and considering the risk-return ratio, the Group deliberately takes the risks necessary to take advantage of market opportunities and to exploit potential opportunities for success.

The YOC Group has instituted a risk management system with the appropriate monitoring and control systems in order to monitor and control these risks. Operating management and the Management Board have at their disposal a risk-management reporting system that is compiled at regular intervals by the risk officers and edited by the risk management team.

The forward-looking risk-control section of the internal control system helps us to detect and estimate risks and opportunities at an early stage so that we can respond promptly and appropriately and ensure efficient control of corporate performance.

The actions that need to be taken as part of risk control are handled by the operating units.

The appropriateness of the risk-management methods and processes used to identify, assess, control, monitor and communicate risks are reviewed at regular intervals and adjusted to take into account internal and external developments.

Neither during nor at the end of financial year 2009 did the regular risk reporting identify any particular risks that could have jeopardised the continued existence of the Group or any of the Group's subsidiaries.

Market and competitive risks

The YOC Group operates in a dynamic and evolving market. This environment requires highly flexible processes and structures. Unexpected changes in market and competitive conditions, such as the entry into the market of new competitors, are among the risks which the YOC Group tries to prevent through continuous, careful monitoring at both the market and company level.

The market research and business development divisions, in particular, focus on detecting and identifying trends and new developments. Transparent and fast decision-making structures make it possible to respond immediately to the risks and take appropriate measures to limit them, as needed. YOC's market position is further strengthened by measures to retain customers and by technical and innovative expertise to improve and expand the product portfolio. Over the long term, however, new product developments may turn out to be unmarketable, meaning that the investments made would be unprofitable.

Changes in economic parameters leading to a decline in orders, particularly in the advertising industry, may also have an impact on the development of the YOC Group. Thanks to our broad assortment of products and services and our diversified customer base, we were able to emerge in a relatively solid position from the economic crisis that affected every business segment during the year under review. Now that the economy is recovering, the YOC Group is in outstanding shape, so the risk that macroeconomic factors will cause a decline in sales revenues is estimated to be slight.

Furthermore, thanks to its leading market position, the YOC Group has ample room for manoeuvre in terms of market and competition policy and a comfortable bargaining position when dealing with suppliers and customers. Another crucial factor in competition is the continuous improvement of the cost structure. Further measures are being developed and implemented to this end. Keeping costs variable is still considered to be extremely important and a decisive factor for maintaining a competitive edge.

Risks relating to acquisitions

The first of the expected synergy effects are being felt from the company acquisitions completed during the last three financial years and from the Group-wide expansion into a full-service provider.

We intend to further expand and fully take advantage of these synergistic effects over the next few years. There is a risk that the potential synergies will not be fully achieved to the extent planned and that the subsidiaries will not achieve the targeted return on sales. Negative economic performance could require recognition of an impairment of goodwill, among other things through write-downs of goodwill, which would have a negative impact on Group earnings. Currently, though, the macroeconomic conditions and the outlook for the subsidiaries are unreservedly positive, so for the foreseeable future no impairment is expected.

The acquisitions of the subsidiaries not only entailed financial risks, but also involved the challenges of integrating the companies. We focused on the different corporate cultures and the arrangement of organisational ties to ensure that, ultimately, it will be possible to make the best possible use of the synergies. Strikingly, it has become clear over the last three financial years that even big companies can be integrated into the overall Group virtually without any problems.

Technological risks

The YOC Group's business model is based in large part on the latest technologies in the field of mobile communications and the Internet. In order to ensure that these business processes, which for the most part are automated, are both secure and efficient, the YOC Group follows a uniform IT strategy that involves constantly monitoring and further developing IT systems. For example, the rules governing data security include the Groupwide implementation of encryption mechanisms, firewalls and virus scanners. Precautionary measures have been taken to prevent the failure of technical facilities, including the parallel operation of technical applications, so that customer orders can be processed at all times without any problems. In addition, back-up systems protect the database from a possible data loss and ensure constant availability.

If technological innovations are not consistently put forward by producers, infra-structure providers and their technology partners, the growth of the company could be negatively affected. Therefore, qualified internal and external specialists work on business-specific in-house developments, where required. The YOC Group mainly opts for industry-specific standard software from well known providers when selecting IT systems.

Financial and treasury risks

The main function of the YOC Group's Group Treasury Department is to ensure solvency at all times. The baddebt risk is counteracted by a strict receivables management system, which focuses on monitoring the ageing of receivables and the management of doubtful accounts receivable. The YOC Group's sales revenues are generated from a large number of customers with good credit ratings. Moreover, the Group is not dependent on any individual customers. Receivables are primarily denominated in the Group's functional currency, the Euro; consequently, only a relatively small portion of payments are in foreign currencies, so there is only a slight risk of possible currency fluctuations. We use derivative financial instruments (interest-rate swaps) in order to reduce the interest-rate risk that is relevant to cash flow. Interest hedging reduces interest costs while simultaneously minimising the volatility of interest expense.

Moreover, the measures mentioned above serve the purpose of reducing the liquidity risk, which is also limited through ongoing liquidity management. Furthermore, the continuous and forward-looking monitoring carried out as part of the liquidity management system helps to control the risk of cash flow fluctuations. Information concerning the status of the cash position of all Group companies, which is managed on a Group-wide basis, is made available through the corporate office and is communicated to management at regular intervals. In addition, when the Group budget is compiled, a liquidity budget is drawn up that includes all Group accounting areas.

Cash and cash equivalents and bank loans are used to finance the Group's activities. As in the previous years, the YOC Group relies primarily on equity financing, which has proven to be a strategic advantage during the economic crisis. The Group always makes sure that it is in a position to finance itself at all times. Among other things, this is achieved by monitoring financial ratios that provide information about the company's capital structure.

Legal risks and liability risks

All essential legal transactions are examined by external lawyers to prevent legal risks. The YOC Group prevents damage and loss events and potential liability risk by means of comprehensive insurance cover, which is reviewed on an ongoing basis. The contracted directors & officers liability insurance serves the purpose of protecting the management against possible financial losses of the company. In financial year 2009, neither the YOC Group nor any of its subsidiaries was party to any current or foreseeable legal or arbitration proceedings that could affect the Group's financial position. Likewise, no negative developments are expected for the coming year. Legal limitations imposed by legislators, such as a change in the Data Protection Act, for example, could have a negative impact on the YOC Group's business. In the past, changes in Belgian law affected the Mobile B2C business segment in such a way. However, as of the balance sheet date, we are not aware of any proposed changes to the law for the foreseeable future.

Personnel risks

Corporate objectives are implemented by highly qualified employees in all business segments. The future development of the company will require retaining a sufficient number of skilled employees over the long term. Personnel development measures and a performance-related compensation system constitute the basis for attracting and retaining employees. Moreover, the successfully implemented training and continuing education programmes ensure that several key employees are working in each department so that no hard-to-fill gaps will occur in the event of a termination. Defined fill-in arrangements and rules concerning succession guarantee that business and decision-making processes are secure. Company-wide personnel planning and targeted personnel marketing measures reduce the risk of manpower shortages. Employees handling confidential information are obliged to comply with the respective regulations and to treat such information responsibly.

Modelling risks

Modelling risks exist in the field of turnover and cost forecasts. The budgeting process was further improved with professional controlling aimed at generating reliable and achievable target figures. The internal estimation and forecasting system has adopted a standard software product to better meet the needs of the sales and marketing department. In order to further refine ongoing control, a new ERP system that will further speed up and improve processes was implemented Group-wide.

Computer-based reviews of individual projects are performed on a regular basis. If such reviews show that a project cannot achieve the planned turnover or contribution margin, required counteractive measures are taken immediately. Furthermore, comparison of budget figures with actual figures is used for variance analyses that examine deviations of the budgeted numbers of projects and business units from the actual figures.

Under IAS 24, related parties (companies and persons) include members of the Management Board and the Supervisory Board of YOC AG, their family members and companies controlled by them.

With the exception of the remuneration described in the following section, there were no related-party transactions in financial year 2009 or the previous year.

Remuneration of the Management Board

In addition to a fixed salary component totalling TEUR 540, the remuneration of the Management Board includes a variable component totalling TEUR 60 that is based on the operating income of the YOC Group. Further, the Management Board received 97,965 stock options with a fair value of TEUR 403 as part of the YOC Management Incentive Programme. In financial year 2009, the remuneration paid to the members of the Management Board totalled TEUR 540.

The following table shows a breakdown of remuneration components for each member of the Management Board:

Name	Fixed rem uneration (in TEUR)	Variable re muneration (in TEUR)	Stock options (in units)
Dirk Kraus	160	20	32,655
Alex Sutter	130	20	32,655
Jan Webering	120	20	32,655
Dr. Jürgen Wolff	130	0	0
Total	540	60	97,965

Dr Wolff resigned from the Management Board of YOC AG as of 31 December 2009 in agreement with the Supervisory Board. He received a severance package of TEUR 92 and was paid a fixed remuneration of TEUR 33 between January and March 2010.

As a fringe benefit of the contract, Mr Jan Webering has a claim to a company car for business and private use.

In 2008, the Management Board received remuneration totalling TEUR 350, including TEUR 100 of bonuses that were paid out in financial year 2009.

No other advances, loans, collateral/margin requirements, pension commitments or similar benefits have been granted to the members of the Management Board.

Remuneration of the Supervisory Board

The remuneration of YOC AG's Supervisory Board consists of a fixed payment totalling TEUR 26 (2008: TEUR 36).

The following table provides a breakdown of the remuneration for each member of the Supervisory Board:

Supervisory Board Remuneration for 2009
Name Fixed remuneration (in EUR)
Gerd Schmitz-Morkramer	18,750
Peter Zühlsdorff	-
Dr. Arnold Bahlmann	7,500
Total	26,250

No advances, loans, collateral/margin requirements, pension commitments or similar benefits have been granted to the members of the Supervisory Board. Likewise, members of the Supervisory Board did not perform any consulting or referral services for YOC Group beyond their Supervisory Board tasks.

Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft charged the following fees for services rendered:

(in TEUR)	2009
Audits of the financial statements	105
Other certification and valuation services	66
Total	171

The declaration of conformity with the German Corporate Governance Code pursuant to Section 161 of the Stock Corporation Act (AktG) was issued by the Management Board and the Supervisory Board and made permanently available to YOC AG's shareholders on the website www.yoc.com under the section "Investor Relations".

To the best of our knowledge, and in accordance with the applicable accounting principles, the consolidated financial statements give a true and fair view of the net assets, financial position and results of operations of the Group, and the Group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group.

Berlin, 19 April 2010 The Management Board

Dirk Kraus, Alex Sutter, Jan Webering

Financial Calendar

Publication of the preliminary annual result 09.03.2010²⁰⁰⁹

Balance sheet press conference in Frankfurt 28.04.2010

Publication of the 1st Quarter 2010 18.05.2010

Annual General Meeting in Frankfurt 16.06.2010

Publication of the Semi-Annual Report 2010 12.08.2010

Publication of the 3rd Quarter 2010 1 0.1 1 . 2 0 1 0

YOC Contact

YOC AG YOC Mobile Advertising GmbH ubiyoo GmbH belboon-adbutler GmbH Brutus Media GmbH Moustik GmbH

Karl-Liebknecht-Straße 1 10178 Berlin Germany T: +49 (0) 30 726 162-0

YOC AG Sevenval GmbH

Bahnhofsvorplatz 1 50667 Cologne Germany T: +49 (0) 221 650 07-0

Moustik S.p.r.l.

Chaussee d'Alsemberg 596 1180 Brussels Belgium T: +32 (0) 234 744 42

YOC Central Eastern Europe GmbH

Kaiserstraße 113-115 1070 Vienna Austria T: +43 (0) 152 250 06

YOC France

1, Rue Descombes 75017 Paris France T: +33 (0) 647 274 779

YOC Ltd. Bluestar Mobile Ltd.

Ashbrook House 3-5 Rathbone Place London, W1T 1HJ United Kingdom T: +44 (0) 207 199 0129

YOC España

Doctor Esquerdo 57, 7c 28007 Madrid Spain T: +34 686 132 974

info@yoc.com www.yoc.com mobile.yoc.com www.twitter.com/yoc_group

Imprint

Editor

YOC AG Karl-Liebknecht-Straße 1 10178 Berlin

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Print

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Picture Credits

Sandra Kühnapfel, Kühnapfel Fotografie

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