2006/07Annual Report

Key figures

in thousand eur and % 2006/07 2005/06 Changerevenue 198,551 186,719 6.3%eBiTDA 18,651 16,806 11.0%eBiTDA-margin 9.4% 9.0% -eBiT 13,083 11,286 15.9%eBiT-margin 6.6% 6.0% -employees (asofJanuary31,2007) 1,344 1,217 10.4%Capital expenditure * 6,039 5,777 4.5%Cash flow from operating activities 4,476 15,258 -70.7%

* Payments tangible fixed assets and intangible assets

filo. Cutting edge design for people in motion.

� CONTENTS16 Companyprofile 17 Executivebodies

18 Group‘sorganisationalchart 20 LetteroftheManagementBoard

22 TheBeneShare InitialPublicOffering,SharePerformance, Dividend,InvestorRelations, FinancialCalendar,BasicFacts, Shareataglance,KeyFigures

24 StatusReport EconomicEnvironment SalesandEarningsSituation FinancialSituation CashFlow InvestmentsundAkquisitions RiskManagement InnovationundProductDevelopment Employees Sustainability 36 Segmentreporting Austria Germany UK Russia RestoftheWorld

51 ConsolidatedFinancialStatement

117 Locations

BENE AR2006/07

ANNELIESEZ.,QUALITYCONTROLCaffélatte.Intheglass.Decaf.Frothymilknotlessthan5cm.

STEFFENW.,QUALITYCONTROLGreentea.Privatemug.Severelyguarded.SouvenirfromMyanmar.

GABRIELEA.,PROJECTMANAGEMENTEspresso.Double.Black.Often.Nosugar.

MARKUSH.,MANAGEMENTASSISTANTCoke.Light.2x0.33l/hour.Vendingmachine0.5minutesaway.

BMWLeipzig,Germany

ArchitecturebyZahaHadid,furniturebyBene.Afteraconstructionphaseofalmostthreeyears,theBMWGroupinaugurateditsnewestplantinLeipzig.Beneinstalled729workstationsinthedesignedcentralbuilding–especiallydevelopedforthespecificrequire-mentsofanopen-spaceofficeenvironment.

Thearchitectmadeadeliberateefforttodesignthecen-tralbuildingasan“activenervecentre”oftheentirecom-plex:“Thecentralbuildingbundlesandchannelsallkeyflowsofmotionwithintheplant.Therefore,thisprojectisaformidableopportunitytotranslatemotionintodesign.”Awareofthefactthat,afterall,theautomobileproducerintendstogenerateproductivity.Butproductivitytodaynolongerderivesfromthefabricationprocessalone,norisitsimplyaresultofemployingstate-of-thearttechnology.Itismuchratheranintricateinteractiveprocessbetweenallstafffromcompletelydifferentareassuchasassemblyhallandbackoffice–whichindeedlendafurnishingconceptacompletelynewdimension.

ZahaHadidconvertedtheinteriorofherspectacularbuildingintogenerouslycascadingfloorsofdifferentlevels,whichaccommodatetheopenspaceofficeareas.Suspendedconveyerbeltsmovecarbodiesatdifferentstagesofcompletionacrossthe“openoffice”,pass-ingbythestaff.Staffandvisitorsalikearethusmadelivespectatorsinasophisticatedscenicdisplayoftheassemblingenvironment.Asfabricationbecomesvisibleandtransparenttoall,thebackofficesarealsovisuallyintegratedintotheproductioncycle.

STEPHENA.,TRENDSCOUTWaistpleatsrevival.Threebuttonjackets.Middlebuttonalwaysdoneup.

PENELOPEW.,PRESSOFFICETank-top.Cargopants.

Collectssneakersfromthe70ies.

POLORALPHLAURENGeneva,Switzerland

ThenewEuropeanheadquartersofPoloRalphLaurenclosetoGeneva,designedbySirNormanFosterareafirstclassshowpieceforBene.

250workstationsinthenewofficecomplexoftheexpandingAmericantopfashioncompany,whichrepre-sentsAmericanlifestyleanddesignatthebestlikenoothercompany,hadtobeconfiguredandfurnished.“WeowetheadditionofthisawesomebrandtoourcustomerportfoliotoagreatteameffortoftheprojectmanagersCraigMcDonaldandSteveChaneyaswellasofthedesignersLynneMackieandMicheleQueen”,enthusias-ticallystatedMarkBailey,directorofBenePlcinLondon.

Thedesignoftheindividualworkstations,thedifferentofficezonesandareasreflectPoloRalphLauren’sphi-losophy:adynamicandstimulatingworkingenvironmentthatnotonlypromotestalent,butalsomakesadesignstatementandcommunicatesthevaluesupheldbythecompany.

Anextraordinaryfloorplan:workstationsaresettledalongtheattractivewindowareasandthemanagementofficesarelocatedinthecentrezone.TheEnglishclusterisadaptedtothecontinentalrequirement.Dividingwallsoffervisualprivacyandlikewisegivestructuretotheteamofficearea.

JONATHANB.,DESIGNCONSULTANTV-necksweater.

Vikunja.Custommadeshoesonly.

EMILYS.,DESIGNERJeans.Vintagedarkdenim.Eyeglassesalwayswithspectaclechains.

HELOISEG.,TRAINEELAWYERRacingbicycle.AuctionpurchaseateBayatthepriceofexpensivehigh-heels.

JULIENG.,ACCOUNTANTV-Citroën2CVoutsidethedoor.DucatiDuodesmointhegarage.

FRESHFIELDSBRUCKHAUSDERINGERParis,France

FreshfieldsBruckhausDeringerisconsideredoneoftheworld’sleadinglawfirms.Withover2,400lawyersworldwideandampleexperienceinawiderangeoffields,Freshfieldsprovidesitsclients,includingnationalandinternationalcorporations,financialinstitutionsandgovernments,withcomprehensivelegalcounsel.Recently,thisfastgrowingcompanymovedintoan18thcenturybuildingcarefullyrevitalisedbythearchi-tecturecompanyF.S.Braun&AssociatesandsituatedrightintheheartofParis.

Thenewofficesarelocatedintwoindependent,oppositebuildingsseparatedbyagreenpedestrianzone.Theofficesaccommodatemorethan500employeesandpartnerswhosharefivefloorscoveringatotalareaofap-proximately14,000squaremeters.Toensuremaximumconfidentiality,eachdepartmentisassignedonespecificfloor.

FreshfieldscommissionedChristianLiaigre,anarchitectwidelyknowninFrance,toprovidethedesignofthepubliczones.Allconferencerooms,meetingareasandloungeswereeventuallyfurnishedwithtop-quality,hand-madeproducts.

Inaconsistentscheme,Bene’smanagementprogramAL_Groupwasdeliveredforthegenerously-sizedroomsassignedtothe35partners.Likewise,theassistanceofficeswerefullyfurnishedwithBeneproducts.“Fresh-fieldsbecameconvincedofthequalityofproductsandhomogeneouscolourscheme”,saysSusanneDanzer,BeneFrancesalesmanagement,addingthat“FreshfieldsfiguresamongourfinestandmostprestigiousprojectsinParis.”

PATRICIAK.,TREASURYANALYSTNumber483.

AttheLondonmarathon’06.

PATRICKD.,DIVISIONCONTROLLERAmateurboxer.

EveryFridayfrom5to8pm.

LONDONSTOCKEXCHANGELondon,UnitedKingdom

TheLondonStockExchange,London’scentrefortradingforover300years,hasmovedfromanhistoricenvironmenttoanew,openlight-drenchedofficebuildingthatlivesuptotheimageofoneoftheworld’sleadingfinancialinstitutions.InclosecooperationwiththeclientandthearchitecturefirmGensler,Benedevelopedanofficeenvironmentaccordingtothecustomer’sre-quirementsandaccompaniedthechangefromseparateofficestoanopenoffice.

TheLondonStockExchangeuseditsmovetoanewrep-resentativeofficebuildingforageneralneworientation.Itstrivedtopositionitselfasanopen,attractivecompanyatthepulseoftime.Theslogan“wemeanbusiness”andtheclaimtobetheleadingstockexchangeinEurope,gavethedirection.

Fortheacceptanceofthenewofficelayout,itwasimpor-tanttoinvolvetheemployeesfromtheverybeginninginthedecisionmakingprocess.Bene,thearchitectandtheclientjointlywiththeemployeesrigorouslyevaluatedtheprosandconsofindividualandcubefarmoffices.Thecooperationwasveryfruitfulandfinallyresultedinawelldesigned,timelessenvironmentthatthemorethan1,000employeesfindtobemorecreative,productiveandbeneficialtoteam-makingcomparedtotheformerofficebuilding.

SIMONG.,COUNSELINGSERVICESSnooker.Beer.Darts.

BRIANC.,BROKERAGESERVICESNosports.Dailyconsumptionof2,750caloriesinthejobislargelysufficient.

ANNAK.,SALESASSISTANTJobbedinamarketgardenduringherstudies.RICHARDO.,HEADOFSALES

Collectsplantseeds.

POLYTECGROUPHörsching,Austria

ThePolytecGroupisaninnovative,internationalandrenowneddeveloperandproducerofplasticpartsfortheautomotiveindustry.Acomponentandsystemsupplier,whichlikewiseoffersindividualproductsandcompleteprocesschains.ThePolytecGroupisagloballyactingcompanywith5,000employ-eesand27productionandassemblyfacilities.

Asaresultoftheconsiderablesalesincreasesofthelastyears,thepreviousheadquarterswereextendedbyanarchitecturaloutstandingnewconstruction.Fourlevelsaccommodateshowrooms,backofficeareas,arestaurantforemployeesandspaciousareasforthetopmanagement,whichareconnectedtoadministrativeof-fices,communicationandmeetingzones.

Thebuildingischaracterisedbyitstransparency.Aglassfacadecombinedwithglassdividingwallsunderlinethecompany’sopenphilosophyandatthesametimethetransparenthallwayallowsinterestingviewsandinsightstotheofficelife.

Thebackofficeconvincesthroughitsdetailedworksta-tionsanditshighlevelofflexibility.

Themanagementflooronthesecondlevelisashow-pieceforstate-of-theart,elegantandfunctionalofficefurnishing.

ThebackofficeareasandthemanagementofficeswereperfectlyplannedandfurnishedbyBene.Itstandsoutforitsextraordinarymaterialandcolourconcept.

WALTERS.,LOCALLOGISTICSOrchids,rosesandsometimesalsomarguerites.Nevercarnations.

VASSILIJR.,ACCOUNTANTLikesBreakfastClub,PrettyinPink

andSoulman.

OLEGD.,CONTROLLINGHasneverseenCitizenKane.

MATVEJENKOMoscow,Russia

Ademandingprojectataclassy,inner-citylocation.Anattractivebuildingwithamixofstores,officeandresidentialfloors.Theheadquartersofthewell-knownRussianmusicproducerMatvejenkoarelocatedononeofthefloorsofthisarchitecturalinterestingnewconstruction.Matvejenkoisacompanythatmanageswell-knownRussianpopgroupssuchasIwanushkiInter-national,LubeandFabrikaZvosd.Thenewofficeswererequiredtocreateameetingpointforartistsandmusi-ciansand,atthesametime,toprojectthecompany’sidentityandattitude.

Thearchitectsconceivedaninteriordesignconcept,whichmeetstheimageandthequalityrequirementsofthemusiclabel.

Anenjoyablemeetingandcommunicationarea,whereartistsexchangeanddiscusstheirconceptsandideas,constitutethefloor’scentralhub.

ThespaciousandopenbackofficeareahasexclusivelybeenfurnishedwithBeneproducts.Theconcept’stargetwastostrengthentheteamspiritandtoquicklyandeas-ilyintegratenewmembersintothecompany.

Themanagementareashavebeenstructuredthroughtransparentwallsandthusallowtheexecutivesaper-manentcontactandthenecessarydirectexchangeofinformationwiththeemployees.

Allinall,aconclusiveofficeconceptthatconvincesthroughformalindependence,colourfulnessandbalance.

IVANG.,ACCOUNTINGHasautographsfrom

HarrisonFordandCarrieFisher.

Bene.AEuropeangroupsettingofficetrends,shapedbythevarietyofitsconcepts,productsandservices.Abrandassociatedwithhighestqualityandfunc-tionality,withmoderndesignandinnovativetechnology.Aname,whichstandsforspaceandprocess,professional-ismandcompetence.

Beneinterpretsofficedesignasmanagementinstrumenttoprojectorganisationalstructures,tosupportworkingprocessesandtodocumentcompanies’cultureandself-conceptiontowardstheinsideandtheoutside.

Livingspace-office.Inaworld,inwhichofficeworkduetomoderninforma-tionandcommunicationtechnologiesisindependentoftimeandplace,theofficegainsastrategicvalue:ashome-base,asemotionalcrystallisationpointtotieemployeesandcustomerstothecompany.

Officesceneriesbecomeurbanlandscapes–animating,manifoldandmulti-faceted.Forthesensorybalance,thequalityoftheactuallocationisopposedtothevirtualityandtheobjectivityofprofessionallife.Thus,thelivingspaceofficeachievesthequality,whichweareusedtointhelifeoutsidetheoffice.Thereisdemandforhighpro-ductivityconceptsthatallowthequickchangebetweendynamicandlaissez-faire.

Successrequiresidentity.Identityneedsspace.Bene,jointlywithitscustomersandpartners,developsinnovativeofficesolutions,whichexpresscompanies’workingprocesses,cultureandidentityinaclearspatialdesignstatement.Beneoffersacompleteportfolioofintelligentconcepts,firstclassproductsandservicesforallofficeareas.Thatway,officedesigningandfurnish-ingbecomeamanagementinstrumentandthesuccessfactorforcompanies.

NumberoneinAustria,numbersixinEurope.Contrarytotheindustry’sgeneralmarkettrend,inthepastyears,theBeneGroup,oneoftheleadingEuropeansuppliers,hasbeengrowingsignificantly.BeneistheunchallengednumberoneinAustriaandnumbersixinEurope.Today,Beneissuccessfullyactivein29coun-trieswith74locations–thereof35ownbranchofficesandthusdisposesofoneoftheindustry’sstrongestdirectsalesnetwork.Withownbranchofficesandspe-cialisedtradepartners,BeneSalesNetprovidesregionalaccesstoallservicemodules.Adistributionsystemthatcross-nationallyaccompaniesinternationalcustomerswithregardtoadviceandservice.

Integratedproductionanddistributionsystems.Duetothesimultaneouscoordinationofdirectsalesandtheproduction(CompactFactory),Benediffersfromitscompetitors.TheCompactFactoryisanorder-relatedjust-in-timeproductionwithaconsistentdatastructurethatoffersthecustomersahighflexibilityandalargevarietyofmeasurements,surfaces,coloursandmaterials.Thisconstitutesacompetitiveedge-Bene,doesnotonlyscoreintheprojectbusinessbutlikewiseleveragesforsmallerquantities.

Full-rangesupplierofofficeandworkenvironments.Bene’sdecisivecompetitiveedgeisbuiltontheextensiveproduct,conceptandservicerange.Asfull-rangesup-plier,theBeneGroupdevelopsitsownproductportfoliowithhighcompetenceindesign.Intherangeofswivelchairsandseatingfurniture,Benecomplementsitsownproductlinewithproductsfromotherleadingbrands.Aconcept,whichenablesBenetooffersitscustomersacomprehensiveportfolioofproductsandservicesfortheplanning,designingandrealisationofcompleteofficeandworkenvironments.

COMPANYPROFILEWECONTRIBUTETOOURCUSTOMERS’SUCCESSBYEXPRESSINGTHEIRIDENTITY,VALUESANDCULTUREINACLEARSPATIALDESIGNSTATEMENT.

BENE AR2006/07

FRANKWIEGMANNWithBenesince2001MemberoftheManagementBoardsince2004ChairmanoftheManagementBoardsince2006

ResponsibilityFinanceTechnology

THOMASBENEWithBenesince1994MemberoftheManagementBoardsince2006

ResponsibilityMarketingPortfolio

ROLANDMAROUSCHEKWithBenesince1999MemberoftheManagementBoardsince2004

ResponsibilitySalesHumanResources

ChairmanMANFREDBENE

DeputyChairmanKURTSTIASSNY

MembersKARLSEVELDAERHARDSCHASCHL

DelegatedbytheworkscouncilMARTINHÖNICKLAUGUSTINHAGER

THEMANAGEMENTBOARD THESUPERVISORYBOARD

EXECUTIVEBODIESBENE AR2006/07

GROUP’SORGANISATIONALCHART

100%BeneBratislavaspol.sr.o.

100%BeneBudapestKft.

66,67%BeneLondonPLC

100%BeneLaibachd.o.o.

100%BeneInnovationGmbH

BENEAG100%

100%BeneOfficeFurnitureIrelandLtd.

49,5%BeneConsultingGmbH

49,5%CorporateOfficeDevelopmentGmbH

46,5%BeneConsultingGmbH,Frankfurt

49,5%StrategicFacilityManagementGmbH

50%BNFactoryKrosnoS.A.

BENE AR2006/07

100%BenePragspol.sr.o.

100%BeneBukarestS.R.L

100%BeneSofiaEOOD

100%BeneKievLLC

100%BeneMoskauOOO

100%BeneDeutschlandGmbH

100%ObjektformHamburgGmbH

100%BeneWarschauSp.zo.o.

100%PARTICIPATINGINTEREST

MAJORITYINTEREST

50%PARTICIPATINGINTEREST

MINORITYINTEREST

100%ObjektformAschaffenburgGmbH

100%ObjektformMünchenGmbH

100%EnterpriseGmbH

100%ObjektformFrankfurtGmbH

100%PlanquadratHamburgGmbH

100%ObjektformBonnGmbH

100%TillGmbH

100%TillConsultGmbH

BENE AR2006/07

Dearcustomers,businesspartners,employeesandshareholders.

Wearepleasedtoreportagainthatwehavehadasuc-cessfulyear,duringwhichwewereabletosignificantlyim-proveourpositioninthedifferentmarketsandtoincreasesalesandearnings.

SuccessfulIPO.AparticularlyimportanteventinthehistoryoftheBeneGroupandasignificantstrategiccrossroadsforthefurtherdynamicdevelopmentofBenewasthesuccessfulinitialpublicofferinOctober2006inthecontextofwhichwecouldplace12,830,977shareswithAustrianprivateandinstitutionalaswellaswell-knownEuropeaninstitutionalinvestors.AlthoughtheBeneshareislistedonlysinceNo-vember3,2006,meanwhileitcouldachieveanincreaseinthesharepriceof19.1%.WithequityofaboutEUR30million,flowninfromthecapitalincreaseandfromgreen-shoe,wenowcantakeanactiveroleintheconsolidatingofficefurnituremarket.Wehaveveryspecificplansfortheapplicationoftheissueproceeds:wewillusetwothirdoftheinflowingcapitalfortherealisationofourgrowthstrat-egyandonethirdfortheexpansionofproductioncapaci-tiesandothermeasurestoincreaseefficiency.AfirststepwassetalreadyinDecember2006.Withtheacquisitionof100%ofthesharesoftheTILLGruppe,aGermanofficefurnituredealer,wehavestrengthenedourmarketingforceinthemostimportantandlargestEuropeanofficefurnituremarket–Germany.

Asalistedcompany,wedonotonlyconsideractiveinves-torandpublicrelationsasobligation,butasanopportunitytoenhancetheconfidenceofourshareholdersandinves-tors,customers,employees,partners,mediasandotherstakeholdersintheBeneAGandthuswefeelobligedtoahighdegreeoftransparencyandpromptprovisionofinformation.

Well-positionedinEurope.Basedonextensiveexperienceinmarketing,distributionandintherealisationofnumerousinternationalprojects,inthepast45yearsweconsistentlydevelopedintoaleadingspecialistinofficeandworkingenvironments.Nowadays,theBeneGroupispresentin29countrieswith74pointsofsale,everywhereexcellentlypositioned,andoffersitsinternationalcustomersacompleteandversatileproductandservicerange,whichincludesthedevelopment,theproductionandthedistribution,thefurnishingofofficesandworkingenvironments,concepts,theprojectmanage-mentandlogistics.

Successfulbusinessperformance.FortheyearoftheIPO,wesetandaccomplishedveryambitiousgoals.Wehaveevenexceededourtargettoim-provetheoperatingresultsbymorethan5%.Withariseinsalesof6.3%toEUR198.6millionwecouldincreasetheEBITDA(earningsbeforeinterest,tax,depreciationandamortisation)by11.0%toEUR18.7millionandtheEBIT(earningsbeforeinterestandtax)evenby15.9%toEUR13.1million.Cornerstonesofthispositiveearn-ingsperformanceweretheprofitablegrowthasaresultofpushinghigh-marginproductgroupsinourmarketssuchastheUnitedArabEmirates,RussiaandIreland,theongoingoptimisationinallareas,thefurtherexpansionoftheEuropeansalesnetworkandaconsistentinvestmentpolicy.Comparedtothepreviousyear,earningspershareincreasedfromEUR0.40toEUR0.42.Thisdevelopmentallowsthecontinuationofourshareholder-friendlydividendpolicyandthustheManagementBoardwillproposetotheshareholders’meetinganincreaseofthedividendofEUR0.10intheprioryeartoEUR0.20pershare.Thiscorrespondstoadividendpaymentratioof47.6%orayieldof3.1%onthepriceoftheclosingdateforthefinan-cialyear2006/07.Providedthattheeconomicconditionsarefavourable,forthefutureweplantopayabout30to50%ofourannualprofitasdividends.Weareconvinced,thatwiththis,wecanofferourshareholdersaninterestingminimumreturnfortheircapitalemployed.Traditionally,theBeneGroupgeneratesveryhighfreecashflowsandusesthemfordividendpayouts,forregulardebtreductionandprincipallyforitsgrowth.Firstandforemost,westrivetorealisethisthroughalargenumberofsmallprojectsaimingfororganicgrowthandthroughselectedacquisitionsindifferentareasandsizes.Duetothespreadingoverdifferentprojects,weareabletominimisetheriskandtooptimisesynergieswithexistingactivities.Expansionofthecoresegments.Strategically,Benefocusesontheexpansionoftheexist-ingcoresegmentsAustria,Germany,RussiaandUK.Ourmottoforthesecoresegmentsis:Continuousoptimisationandprofitablegrowth.However,atthesametime,weareconstantlyworkingonthefurtherdevelopmentofourothermarketsinWesternandEasternEurope.

LETTEROFTHEMANAGEMENTBOARDBENE AR2006/07

FrankWiegmannChairmanoftheManagementBoardFinanceandTechnology

ThomasBeneMemberoftheManagementBoardMarketingandPortfolio

RolandMarouschekMemberoftheManagementBoardSalesandHumanRessources

Intheproductionweconcentrateonapossibleenlarge-mentoftheownproductionrangeandonverticalintegra-tionaswellasoncostefficiencyandonreductionoftheworkingcapital.

Morethan52%ofthesharesareonfreefloat.InthecourseoftheIPO,thereweremajorchangesintheownershipstructure.ThefinanceinvestorUIAG,whichjoinedinSeptember2004and,whichtogetherwithotherinvestorsheld60%ofBenehasexitedto100%asoftheIPO.

Thus,Benehasbecomeafullypublicly-ownedcompanyanditssharesareto52.7%onfreefloat.TheBenePrivatstiftung(privatetrust)asstableAustriancoreshareholderholds40.9%,6.4%areheldbythethreeManagementBoardMembersoftheCompany.Duetothebroadfreefloat,wehopetogenerateadditionaldemandforourshares.Thisdevelopmentalreadyreflectedintheshareperformance.

Outlook.Wehaveagainsetambitioustargetsforthebusinessyear2007/08andstriveforasolidgrowthoftheGroup

throughorganicgrowthandacquisitions.Thelattershallcontributetotheexpansionofthesalesforceaswellastotheenlargementofownproductionactivities.Atthesametime,wewanttoimprovetheoperatingresultandtheearningspershare.Bene’ssuccessisbasedonastrongcorporatecultureandtheresponsibleactingofallinvolved.ThelocalcompaniesofourGroupowetheirsuccesstothelocalemployeesandmanagers,whoactsustainablyfromaneconomic,ecologicandsocialpointofview.Thisisverymuchappreciatedbyourcustomersandpartnersandconstitutesthebasisofoursuccess.Atthispoint,wewouldliketotaketheopportunitytothankouremployeesandmanagersfortheircommitmentinthelastyear.WewouldliketoexpressourgratitudetotheSupervisoryBoardfortheefficienttreatmentoftopics.

TheattractivenessofBeneanditsshareliesinahighcashflow,sufficientpotentialforprofitablegrowthandlimitedrisk.Esteemedshareholders,wethankyouforthetrustyouplaceinus.RemainfaithfultotheCompanyandben-efitfromourgrowthpolicytowardsasuccessfulfuture.

Withbestregards,

BENE AR2006/07

THEBENESHARE

Bene

ATX

SHAREPERFORMANCE

Sinceitsinitiallisting,inthefirstmonthsuntiltheendofJanuary2007,theshareshowedaclearlypositivedevelopmentof19.1%andwithEUR6.55reacheditshighintheyearunderreviewonJanuary31,2007.

INITIALPUBLICOFFERING

Themostimportanteventofthefinancialyear2006/07wastheinitiallistingoftheBeneshareontheViennastockexchangeonNovember3,2006.UndertheleadmanagementofRaiffeisenCentrobankandABNAMRORothschild,inapublicoffer,inAustria,andinthecontextofaprivateplacementtoinstitutionalinvestorsinEurope,Benecouldplace7,233,625oldshares,mainlyheldbythefinancialinvestorSARPEDON–withtheUn-ternehmensInvestAG(UIAG)ascoreshareholder–and4,687,500newsharesarisingfromacapitalincrease.OnDecember1,2006thegreenshoeoptionson909.852newshareswereexercisedandthustheissuevolumeincreasedto12.830.977sharesintotalrespectivelytoanissuevolumeofaboutEUR70.5million.Basedontheis-suepriceofEUR5.50pershare,thisresultedinamarketcapitalisationofapproximatelyEUR134million(greenshoeincluded).

Stableshareholderstructure.AftertheIPO,theBenePrivatstiftung(privatetrust)isstillacoreshareholderandwithaninterestof40.9%itremainsthelargestindividualshareholder,whereasthefinancialinvestorSARPEDONdisinvestedcompletelyinthecourseoftheIPO.Thefreefloatamountstoabout52.7%,theremaining6.4%areheldbytheManage-ment.

Asexpected,themajorityoftheshareswassubscribedbyinstitutionalinvestors.However,theofferattractedalsowideinterestfromAustrianprivateinvestorsandfromemployeesoftheBeneGroup.Thegeneralallocationquotawas85%.

Freefloat:52.7% BENEPrivatstiftung:40.9%

Management:6.4%

DIVIDEND

WiththeexceptionofadividendofEUR0.10forthefinancialyear2005/06,Benedidnotpayanydividendsinthepreviousyears.However,thelastdividen-dssetnostandardsforfuturepayouts.

Onthebasisofapositivebusinessperformanceandthecurrentgrowthprospectsforthenextbusinessyear,theManagementBoardwillproposetotheshareholders’meetingonJune6,2007adividendofEUR0.20pershare–thusthedistributionwouldamounttoaboutEUR4.9million.Thiscorrespondstoadividendpayoutratioof47.6%.

25,0 %

20,0 %

15,0 %

10,0 %

5,0 %

0,0 %

-5 %

03.11.2006 31.12.2006 31.01.2007

INVESTORRELATIONS

AnopenandtransparentcommunicationpolicyconstitutesanintegralpartoftheBeneAG’scor-porateculture.Thetargetofinvestorrelationsistomeetthecapitalmarket’srequirementsontransparencyandtoprovideatrueimageoftheCompany.EspeciallyaftertheIPOandtheresultinginterestinBene,theCompanyimprovesitseffortsinordertostrengthenitsrelationstoinvestorsandtoguaranteeextensivetransparency.TheBeneAGundertakestocomplywiththeAustrianCodeofCorporateGovernance(OCGK)publishedinOc-tober2002andamendedinFebruary2005andJanuary2006.TheÖCGK2006primarilyaddressesAustrianandstocklistedcompaniesandsupportsthemwithregulationswithregardtomanagementfunctionsandsupervisorytasks.Targetofthecodeistheresponsiblemanagementandsupervisionofcompaniesandgroups,whichaimatcreatingsustainableandlong-lastingvalues.Thecodeprovideshighertransparencyforthecompany’ssharehold-ersandbecomeseffectivebyvoluntaryself-commitmentofthecompanies.

Thecurrenttasksofinvestorrelationsareroad-showsinthecoremarketsAustria,Germany,Switzerland,BeneluxandGreatBritain,discussionswithinvestorsandanalystsaswellasregularquarterlyreporting.

Theinvestorrelationslinkonthebene.comwebsiteprovidesinvestorsandinterestedpartieswithacompactoverviewoftheshare’sperformance,currentanalyses,keyfiguresandeventsaswellaspreviousnewsandreportsoftheCompany.

Thankstothistransparentinformationpolicy,Beneattractsinterestfromwell-knowninvestmentbanks,whichperma-nentlyobserveandanalyseBene.Currently,theBeneAGiscoveredbyfourofthose.

FINANCIALCALENDAR

Resultsfortheyear2006/07 10May2007AnnualGeneralMeeting 06June2007Ex-DividendDay 14June2007DividendPayment 14June2007Resultsforthefirstquarterof2007/08 29June2007Resultsforthefirsthalfof2007/08 28Sept.2007Resultsforthefirstthreequartersof2007/08 17Dec.2007

BASICFACTSONTHEBENESHARES:

ISINcode AT00000BENE6Marketissued: ViennaStockExchange,PrimeMarketTypeofshares:ordinaryno-parvaluevotingbearersharesTotalnumberofshares: 24,347,352Authorizedcapital: noneInternationalduallistings: nootherlistingsIndices: ATXPrime,WBITickersymbols: BENEFreefloat: 52.7%

BENESHAREATAGLANCE:

Highestclosingprice EUR6.55onJanuary31,2007Lowestclosingprice EUR5.30onNovember8,2006MarketcapitalisationasofJanuary31,2007 EUR159.5mAveragetradevolume EUR468,959

STOCKMARKETKEYFIGURES 2006/2007 2005/2006Earnings/shareinEUR 0.42 0.40Dividend/shareinEUR 0.20 0.10Dividendyieldin% 3.1% n.a.Bookvalue/shareinEUR 3.2 n.a.MarketcapitalisationinEUR 159.5m n.a.Changesin% 19.1% n.a.Price-earningsratio 16 n.a.

BENE AR2006/07

DrivenbyastrongGDPgrowthintheUSAandChina,withanincreaseof5.1%after4.7%intheyear2005,theworldeconomywasingoodshapeintheyear2006.Theeconomyofsomeemergingcountries,mainlyChinaandIndiadevelopedevenbetterthanex-pectedandachievedgrowthratesof10.7%respectively9.7%.ThestrongupswingoftheworldeconomyandtherecoveryofthemostimportantEuropeanmarketshavealsopositivelyimpactedonthestockprices.Likewise,theeconomicactivityinEuropegainedmomen-tuminthefirsthalf-yearof2006.ParticularlyGermanyandItaly,thosemarkets,whichinthepreviousyearsrecordedincreasesbelowaverageinEuropeancomparison,showedanacceleratedrecovery.Altogether,intheyear2006,theEU25realisedaneconomicgrowthof2.6%after1.7%intheprioryear.Thisupwardstrendisprimar-ilyresultingfromthehighexportactivitybasedonastronginternationaldemandandonhigherinvestmentactivitiesofEuropeancompaniesin2006.

Similarly,themarketsinCentralandEasternEuropedevel-opedverydynamicallyinthepastyear.Thestockmarketsintheseregions,allinall,showedagoodperformance.Thestrongmarketcorrectioninthecourseofthesecondquarterof2006hasbeenmorethanrecoveredinthesecondhalf-yearof2006.Thereasonforquicklyovercom-ingthissetbackandthegoodannualperformancewerethepersistingaboveaveragegrowthratesinthecountriesoftheseregions,whichledtohighprofitincreasesforthestocklistedcompanies.In2006,thegrowthofthenewEUmembercountriesexceededthefivepercentmarkandaccordingtocurrentforecastsoftheWienerInstitutfürInternationaleWirtschaftsvergleiche(TheViennaInstituteforInternationalEconomicStudies)willagainbeachievedintheyear2007.ThegrowthrateforRussiaisexpectedtobeevenhigherbyonepercentpoint.Thereareparticularlybrightprospectsforthebuildingindustry,whichisdrivenbyalargenumberofinfrastructureprojects.TheCEEeconomistsoftheUniGreditGroupexpectanoverallriseof9%fortheregion.

ECONOMICENVIRONMENT

STATUSREPORT

GDPDevelopmentinBene‘scoremarkets 2003 2004 2005 2006 2007eAustria,inbn.EUR 226.2 235.8 245.1 256.5 267.8Germany,inbn.EUR 2,161.5 2,207.2 2,241.0 2,308.0 2,362.9UK,inbn.EUR 1,604.5 1,733.6 1,790.7 1,890.0 2,004.5Russia,inbn.USD 431.6 582.2 763.3 938.4 1,140.7Europe(27),inbn.EUR 10,041.6 10,530.4 10,947.5 11,504.9 12,046.8

Officefurnituremarket.IncreasingcompetitionfromofficefurniturecompaniesinEasternEuropeandAsiaisresultinginacompetitivemarketenvironmentforsmallandmedium-sizedWesternEuropeanbusinesses.Inthefuture,onlythestrategicfocusonownstrengths,theinternationalisationandaboveaverageperformancesinservice,designandqualitywillallowasuccessfulexistence.

TheeconomicopportunitiesarisingfromtheexpansionoftheEuropeanUnionshowtheirimpactalsoontheofficefurnituremarketandthusinthefuture,CentralandEasternEuropewillbelongtothecoremarketsfortheofficefurnituremanufacturers.Themarketsoftheseregionsarehighlycompetitivesinceatthesametime,WesternEuro-peanandAsiansuppliersstrivetocapturetheindividualmarkets.

OfficefurnituremarketEurope 2003 2004 2005 2006 2007eWesternEurope 7,115,885 6,714,549 6,884,541 7,202,795 7,486,522Austria 220,862 223,093 225,632 233,708 245,861Germany 1,657,290 1,488,896 1,543,910 1,636,910 1,764,195UK 1,104,448 951,290 939,110 950,562 944,185Value:e 1,000

BENE AR2006/07

DevelopmentoftheEuropeanofficefurnituremarkets.InmostoftheEuropeaninvestmentcentres,thedemandforofficepropertiesisnolongercharacterisedbyshiftingsurfacesfortheoptimisationoflocations,butbyadditionalleasingofsurfacesandthusnumerousmetropolises,suchasMadridorLondonexperienceadynamicgrowthperiod.Atthesametime,inmostoftheWesternEuropeancountriesintheyear2006,thebuildingactivitynotice-ablysloweddownandconsequentlythehigherdemandresultedinalowerlevelofvacantpropertiesinEurope.At26investigatedEuropeanlocations,thelevelofemptyspacesdecreasedby0.8percentpointswithinoneyear.

However,therentalpricelevelremainedstableinalmostallEuropeanofficecentres.Highestincreasesarere-cordedfromDublinandMoscow.

SlightincreaseinEuropeanconstructionindustry–StronggrowthinCEE.Intheyears2006until2008theoverallEuropeanbuildingindustrywillslightlyrecover.AccordingtopredictionsoftheEuroconstructnetwork,growthratesof1.5%,1.7%and1.9%areexpectedforthenextthreeyears.Inthisperiod,theconstructionvolumeinWesternEuropewillonlyriseslightly,whereasratesof7.5%upto8%areassumedforCEE.

TheboominEasternEuropeisduetoinvestmentsinthetransportinfrastructurenetwork(roadsandrail)aswellasinenvironmentalprojects.Here,thesecountriessustainablybenefitfromEUdevelopmentfunds.Duringtheindicatedperiod,theentireinfrastructuresectorwillgrowdoubledigit.Onthecontrary,inWesternEurope,theweakdevelop-mentofthenewhousingmarket,shrinkingin2006and2007andstagnatingin2008,issubduingtheoverallsituation.AmongtheWesternEuropeancountries,Spainshowsthestrongestdynamic,whereboth,residentialcon-structionandinfrastructureconstructionrecordanongo-ingbriskdemand.GermanywillrecoverafteraverylongperiodofnegativegrowthandAustriaexpectsaslightlyaboveaverageincreaseofabout2%forthenextyears.Source:pressetext.austria

Outlook2007.NotleastasaresultoftherestrictivefinancepolicyinGermanyandItaly,therecoveryoftheeurozoneisslow-ingdown.However,thedecelerationwillbelessimportantthanintheUSA.Intheyear2007,theeconomyoftheEU25countriesispredictedtogrowby2.4%,whichis0.4%lessthanin2006.Inthecourseof2007,theECBwillprobablyraisethekeyinterestratetoatleast3.75%.

TheOesterreichischeNationalbank(Austriannationalbank)expectsfurtherconsiderableGDPgrowthratesof2.8%and2.4%fortheyears2007and2008.Theinflation,whichinthecourseoftheyear2006wasalreadydroppingsignificantly,willfurtherdecreaseto1.4%in2007.Employmentwillcontinuetoriseandwillleadtoanotabledeclineoftheunemploymentrateof5.2%in2005to4.7%intheyear2008.Source:OesterreichischeNationalbank

Arestrictivefinancepolicy,theVATincrease,thecancella-tionoftheown-homeallowancecombinedwithaweakerinternationalenvironmentwillleadtoaslowdownoftheeconomicgrowthinGermanyto2.1%intheyear2007.However,theunemploymentratewilldropagainbelowthe10percentmark.In2007,theCEEregionwillremaintheEuropeangrowthmotor.PrognosespredictgrowthratesbeingtwiceashighastheEUaverage.

BENE AR2006/07

Asaresultofanumberoforganicandacquisition-related(seeTILLGruppe)growthsteps,thecontinuousoptimisationofallactivitiesaswellaspositivemarketdevelopmentsinmostofBene’srelevantmarkets,inthebusinessyear2006/07Benehasagainachievedextraordinarygoodresults.

DuetosignificantquantityincreasesinWestern,CentralandEasternEurope,theofficefurnituregroupreportsanaugmentationofitsconsolidatedsalesof6.3%toEUR198.6millioncomparedtotheprioryear.Negativecur-rencyeffectsdidnothaveanyimpactontheconsolidatedsales.

BenewasparticularlysuccessfulinUK,wheretheGrouprealisedaconsiderableincreaseinsales.Withagrowthof14.9%,similartothepreviousyear,UKprovedtobeastablesuccessfactor.LikewiseinAustria,thehomemarket,thedemandforBeneproductsandserviceswaspersistentlyhighduringtheentirebusinessyear.GermanyandIrelanddevelopedespeciallywellandinSpain,Benesucceededinenteringthemarketthroughaco-operationwithastronglocaldealer.

TheGroup’sEBIT(earningsbeforeinterestandtax)de-velopedevenbetterthansalesandincreasedbyEUR1.8millionor15.9%toEUR13.1million.Besidethesalesincrease,cornerstonesofthepositivedevelopmentweretheoptimisedproductmixandahigherportionofproductsfromownproductioncomparedtothepreviousyearandtheongoingcost,processandqualityoptimisation.ThisalsoreflectedinaclearlyimprovedgroupEBIT-marginwhichrosefrom6.0%to6.6%.WithaplusofEUR1.0milliontoEUR3.0million,RussiarecordsthehighestriseinEBIT.TheresultsofUKdidexceedtheexpectationsandlikewisedidtherestoftheworldsegmentwithaslightEBITincreasecomparedtotheprioryear.SalesincreaseandthefocusontheoptimisationofcontributionmarginsandprocessesweretheessentialfactorsforanEBITincreaseinGermany.

TheaveragelownetdebtandtheincomefromsecuritiesresultedinafinancialresultofEUR–0.7millionimprovedby24.9%.TheinterestresultofEUR–0.9millionre-mainedby34.0%belowthelastyear’svalue(2005/06:EUR–1.4million).

Thetaxratioincreasedto27.7%(2005/06:24.7%).

Duetotheoperatingearningsincreases,theBeneGroupimproveditsearningsaftertaxfromEUR7.8milliontoEUR9.0millionandthusearningspershareincreasedby5.0%fromEUR0.40toEUR0.42.

SALESANDEARNINGSSITUATION

STATUSREPORT

23%Russia

10%Germany

18%Austria

16%UK

33%Othermarkets

EBITbysegmentsasofJanuary31,200727%Germany

34%Austria

13%UK

16%Othermarkets

10%Russia

SalesbysegmentasofJanuary31,2007

BENE AR2006/07

Comparedtothepreviousyear,mainlyduetotheIPO,butalsobecauseofacquisitions,thebal-ancesheettotalincreasedby33%toEUR140.2million.Bene’sbalancesheetstructureischaracterisedbymoder-ateinvestmentintensityandasignificantshareinlong-termfinancingcomponents.

Theshareofproperty,plantandequipmentdecreasedandnowamountsto19.4%(2005/06:25.7%).Inthereportingperiod,theCompanyspendEUR6.0millionforreplacement,rationalisation,expansionandenvironmentinvestments.Thisamountcorrespondsto108.5%ofamortisations.

TheexpansionoffixedassetsismainlyduetoincreasedinvestmentsintheproductionsiteWaidhofen/YbbsinAustria.Thetangiblefixedassetsexceededtheprioryear’svaluebyEUR0.2million(2005/06:EUR27.1Mio.)andrepresents59.2%ofthecapitalemployed.NetpaymentsforacquisitionscametoEUR0.9millionandwererelatedtothepurchaseoftheTILLGruppeinthegreaterStuttgartareaandtotheacquisitionoftheofficefurnituredealerLebichinHanover.

OnthebalancesheetdateJanuary31,2007,inventoriesarestatedattheamountofEUR14.7million(2005/06:EUR11.4million).Seasonally,theyarelowerattheendoftheyearthanduringthebusinessyear.Thematurityofcustomerreceivablesincreasedbyeightdaysto55days(2005/06:47days).Likewise,theaveragetermoftradeliabilitiesroseto88dayscomparedto71daysinthepastyear.TheworkingcapitalintheamountofEUR25.1millionrepresented54.5%ofthecapitalemployedafter47.4%inthebusinessyear2005/06.

Liquidity,consistingofcashholdingsandbankbalancesincreasedbyEUR4.9milliontoEUR22.8million.AsaresultofthecapitalincreaseinthecontextoftheIPOamountingtoEUR30.8millionandduetotheposi-tiveGroupresultofEUR9.0million,consolidatedequityincludingminorityinterestsimprovedtoEUR63.9million.AtthebalancesheetdateonJanuary31,2007theequitycoveredfixedassetsby235%.

Longandshort-termprovisionsandobligationstoemploy-eesofEUR13.3millionor9.5%ofthebalancesheettotalincreasedby4.3%.

FINANCIALSITUATION

AssetsinTEUR

EquityandliabilitiesinTEUR

06/07 05/06 05/06 06/07

140,152

105,248 105,248

140,152

Intangibleassetsandproperty,plantandequipment

Inventories

Receivablesandotherassets

Otherlong-andshort-termassets

Cashandcashequivalents

Equity

Long-andshort-termprovisions

Tradepayables

Long-andshort-termfinancialliabilities

Otherlong-andshort-termdebt

1,138

22,807

28,165

41,532

14,688

32,960

30,991

11,440

33,026

11,863

17,92727,964

24,588

21,786

29,348

63,900

23,055

23,314

28,745

1,562

BENE AR2006/07

Interest-bearingliabilities(financeliabilities)droppedbyEUR1.3milliontoEUR23.3million.54.4%(2005/06:69.0%)arelong-termand45.6%(2005/06:31.0%)areshort-termfinanceliabilities.Thus,thelong-termliabilitieswerereducedby14.6%.Theportionoffixedinterest-bearingliabilitiescameto9.5%oftheportfolioandthevariableinterest-bearingliabilitiescameto90.5%.Onthebalancesheetdate,allfinancingwasdenominatedineuro.OnJanuary31,2007,netdebtstoodasEUR–17.9millionandthuswasbyEUR22.9millionlowerthanthepreviousyear’svalueofEUR5.0million.

Duetothesalesincreaseandtheincreaseininventoriesandreceivables,theBeneGroupgeneratedacashflowfromoperatingactivitiesintheamountofEUR4.5million(2005/06:EUR15.3million),which,likewiseinthefuture,willconstitutethesoundbasisforaself-financedgrowthoftheBeneGroup.Thecashflowfrominvestmentactivities,duetoexpensesforreplacement,expansion,rationalisationandenvironmentinvestments(normalinvestments)andmainlyasaresultoftheprocurementofsecurities,changedtoEUR–22.4million,whereasEUR–0.9millionwerespentforcompanyacquisitions.

EUR–1.9millionofthefinancingcashflowwerespentforthedividendofthebusinessyear2005/06,whichcametoEUR0.10pershare.Thecashflowfromchangesininterest-bearingliabilitiestotallingEUR–2.1millionwasresultingfromloanandcreditreductions.

CASHFLOW

STATUSREPORT

In Thousand EUR

2006/07January31,2007

2005/06January31,2006

Cashflowfromoperatingactivities 4,476 15,258

Cashflowfrominvestmentactivities -22,423 -1,656

Cashflowfromfinancingactivities 22,994 -15,696

Changeincashandcashequivalents 5,047 -2,094

Cashandcashequivalentsatbeginningofperiod 17,927 19,504

Cashandcashequivalentsatendofperiod 22,807 17,927

Between1and5years

Lessthan1year

Morethan5years

Maturities–bankliabilitiesasofJanuary31,2007

Between1and5years

Lessthan1year

Morethan5years

Maturities–bankliabilitiesasofJanuary31,2006

BENE AR2006/07

Inthepastbusinessyear,Beneex-pendedEUR6.0million(2005/06:EUR5.8million)onreplacement,rationalisation,expansionandenvironmentalinvestments(normalinvestments).Investmentsinproperty,plantandequipmentamountedtoEUR4.1millionandcapitalexpenditureinintangibleassetstotalledEUR1.9million.

Aftersomeyearsofratherconservativeinvestmentactivi-ties,inthefinancialyear2006/07,BeneagainreachedaninvestmentlevelthatcorrelateswiththesizeandthedevelopmentoftheCompany.

Ongrouplevel,Benefurthermeasuresthereturnoncapitalemployed(ROCE),whichinthepastbusinessyearcameto21.3%(2005/06:24.6%).Thenetoperatingprofitaftertax(NOPAT)iscorrelatedtotheGroup’stotalcapitalemployed.ItshowsinhowfarBenemeetstheinterestexpectationsofitsinvestors.

Inthereportingyear,thenetoperatingprofitaftertax(NOPAT)increasedby15.9%toEUR9.8million.ThecapitalemployedrosetoEUR46.0million(+33.8%).Thiswasbasicallyduetothegoodoperatingresultandthegoodnetdebtposition.

Besidethedevelopmentofnewfinancingsources,theGroup’streasuryfocusedonthefinanceriskmanagementandthestructuringoftheGroup’screditportfolio.Fortheoptimisationofitscreditportfolio,Benehasconsiderablyaugmenteditsshareoflong-termfinancingsandthusthedefinedtreasuryguidelinetargetof66%wassustainablymet.Againstthebackgroundoftheattractiveinterestratelevel,Benecouldclearlyoverpassandcouldevenensurethedefinedbenchmarkof50%forfixed-interestfinanceliabilitiesforthefollowingyears.

Toimprovethegroup-internalriskmanagement,thegrouptreasuryhasoptimisedtherollingliquidityplanningandhasfurtherpushedtheimplementationofthedailyfinancialstatus.TargetoftheseinformationsystemsistostrengthenthecashpoolingwithintheGroup.

Benecontinuouslymonitorsthedevelopmentofthecur-renciesinallmarketsrelevanttothecompany,inordertobeabletotakeappropriatehedgingmeasures.

INVESTMENTSANDACQUSITIONS

InThousandEURand%

Intangibleassets Property,plantandequipment

Financialassets Total

January31,2006 3,916 27,075 2,129 33,120

Acquisitions 3,222 3,930 307 7,458

Changesinthescopeofconsolidation 4 460 1 465

Depreciation -1,411 -4,033 -12 -5,456

Disposals 0 -276 -575 -851

Currencytranslationsandother 0 74 0 74

January31,2007 5,730 27,230 1,850 34,810

BENE AR2006/07

Inthecontextofitsbusinessactivitiesasinternationallyoperatingcompany,theBeneGroupisexposedtoavarietyofrisks.Theserisksbasicallyrelatetotheeconomicdevelopmentofthetargetmarkets,sinceaweakeconomywithalowinvestmentactivityofthecompanieshaveamajorinfluenceontheGroup’ssalessituation.

TheextensiveEuropeanbusinessorientationandthebroadmanagementteam,however,provideageographicaldiversification,whichleadstoaminimisationofbusinessrisks.

AsaresultofthelongstandinginternationalexperienceinthecorebusinessaswellastheCompany’ssignificantmarketpositions,riskscanbedetectedatanearlystageandcanbeevaluatedappropriately.Duetothegeographi-caldiversification,specificmarketorproductrisksneverthreatentheentireGroupbutonlylocalpartialorganisa-tions.Thus,theBenebusinessmodelcontributestoanaturalbalancingofrisks.

Riskconception.TheBeneGroupconsidersthepossibilityofadeviationfromcompanytargetsasrisk.Thetermof„risk“includesthepossibilityofaloss(riskintheliteralsense)aswellasthemissedadditionalprofit.TheriskmanagementisanintegralpartofalldecisionsandbusinessprocesseswithinBene.Organisationally,theriskmanagementisintegratedintotheoperatingprocesses,whichmainlyincludethemanagementstructure,theplanningsystemandthedetailedreportingandinformationsystems.

Riskpolicy.Thelocalcompaniesdeliberatelytakeonrisksonlywithintheoperatingbusinessactivity,inthecontextoftheproductionandthesalesofofficefurnitureandtherelatedextensiveservices.Theserisksarealwaysevaluatedinrelationtopotentialgainsandopportunities.

Risksbeyondthescopeofoperatingactivities,forexamplefinancialrisks,aremonitoredandhedgedbyBeneAGasparentcompanyoftheGroup.Thelocalcompaniessup-portthisfunctionbyprovidinginformation.

Inadditiontooperatingrisks,theCompanyonlyincursthefollowingrisks:risksrelatedtoacquisitions,financingandparticipations.Allotherrisksareavoidedorhedged.Aboveall,actionsnotrelatedtooperatingbusinessactivi-tiesareprohibited.

Riskmanagement.Variousmanagementandinvestmentsprinciplesandguidelinessuchasforthetreasuryregulatethedealingwithindividualoperatingrisks.

InsurancepolicieshavebeenconcludedtocoverspecificliabilityrisksanddamagesinordertolimitortoexcludepossibleconsequencesfortheCompany.Thescopeoftheseinsurancesisanalysedregularlyandisbasedonthemaximumcostassociatedwiththeinsuredriskandtherelevantinsurancepremium.

Inordertocounterpotentialriskthatcouldresultfromthewidevarietyoffiscal,competition,patent,cartelandenvi-ronmentalregulationsandlaws,decisionsandbusinessprocessesaretakenonthebasisofextensiveconsultingthroughinternalandexternalexpertsandspecialists.

RISKMANAGEMENT

STATUSREPORTBENE AR2006/07

Riskmonitoringandcontrol.Themostimportantinstrumentsforthemonitoringandcontrolofrisksareplanningandcontrollingprocesses,Groupguidelinesandregularreporting.Inthemonitor-ingandcontrolofrisksassociatedwithnormalbusinessoperations,reportingplaysamajorrole.Informationonindicatorsthatpointtoamajorpotentialriskoropportunityandthatarenotincludedintheformalreportingprocedureispassedontothenexthighermanagementlevelwithoutdelay.

Responsibilitiesandduties.TheriskmanagementisintegratedinBene’sorganisation-alprocessesandprocedures.TheoverallresponsibilityforriskmanagementatgrouplevellieswiththeManagementBoard.Operatingrisksarehandledbythelocalmanage-ment,whilespecificindividualrisks(e.g.foreigncurrencyrisk)aremonitoredbyserviceunitsatgrouplevel.

Benehasimplementedanapprovedgroup-widemonitor-ingandcontrolmanagementtoidentifyrisksalreadyatanearlystageandtoquicklyinitiatecountermeasures.ThissystemisanessentialpartoftheGroup’sactiveriskmanagement.Thecontrolandthemanagementoffinancerisksconsti-tuteimportantelementsofBene’sgroup-widecontrolling,accountingandtreasurysystems.Permanentcontrollingandregularreportingshallensuretheidentificationofma-jorrisksataveryearlystageand–ifnecessary–initiatecountermeasures.

Foramajorpartofbusinesstransactions,thepaymentriskisminimisedbyanactiveandpermanentcreditmonitoringofthecustomers.DuetothestrategicfocusondevelopedEuropeantargetmarkets,theriskofdeliveriestopoliticallyriskycountriescanusuallybeavoided.Asinternation-allyoperatingGroupthatconductsitssourcingalmostexclusivelyonthebasisofeuro,onlycurrencyexchangeratefluctuationsoutsidetheeurozonecannegativelyinflu-enceonthesalesandearningssituations.Therefore,wehavetakenactivestepsinRussiatoconvertfromdollartoeuroinvoicingandthus,toreducetheexchangeriskofoursalesinRussiatoalargeextend.SincetheBeneGroupgeneratesthemajorpartofitstotalsalesintheeurozoneandgenerallyinvoicingisbasedoneuroalsoinmostcountriesoutsidetheeurozone,therearenomajorforeigncurrencyrisksfromthecashflowofoperatingbusinessactivities.Forthisreason,currentlytherearenolimitationsandcontrolofinterestandexchangerateriskthroughtheuseofderivativefinancialinstrumentssuchase.g.forwardexchangedealsorswaps.Acentralcashmanagementsystemguaranteesthecon-sistenttransparencyofallcashflowswithintheCompanyandthepoolingofliquidityattheheadquartersbytheaccelerationofallresultinginter-groupcashflowsfromcurrentbusinessoperations.However,forthetimebeing,traditionalcashpoolinghasnotbeenconsideredneces-saryduetotheabovementionedreasons.

Agroup-widefinancialandliquidityplanningensuresthatsufficientliquidityisavailableorthatanecessaryfinancingisguaranteedbyanadequatecreditlinetofulfiltheGroup’sfinancialobligations.Liquiditynotrequiredintheshort-termiseitherparkedinshort-termtimedepositaccountsorisinvestedinquotedconservativesecurities.TheCompanyhasestablishedtreasuryguidelinesforthetransparencyoftheriskandinvestmentprofile.

BENE AR2006/07

Creditrisks.Creditrisksortheriskofpaymentdefaultonthepartofpartnersaremitigatedbycreditchecksandlimitsaswellasmonitoringroutines.Asfarasappropriate,theCompa-nyreceivesgovernmentexportguaranteesorguaranteesfromsimilarprivateorganisationstoreducetheriskofpay-mentdefault.Inaddition,thereisnosignificantconcentra-tionofdefaultriskssincethesearewidelyspreadoveralargenumberofcontractingparties.

ThecreditriskislimitedastheGrouponlyco-operateswithfinancialpartnerswithgoodcreditstanding.

TheCompanyhasmadevalueadjustmentsforallexistingrisksandthusBene’smanagementisoftheopinionthattherearenoothermajorcreditrisks.

Thebookvalueofthestatedreceivablesrepresentsthemaximumdefaultrisk.

Interestriskandcashflowrisk.ThemajorpartofinterestsontheGroup’sloansisvari-able.

Themanagementjudgestheriskofchangesininterestratesonfinancialinvestmentsandliabilitiestobecalcu-lable.Accordingly,derivativeinstrumentsforprotectionagainstinterestrateriskarenotapplied.

STATUSREPORTBENE AR2006/07

BeneiscontinuouslyworkingonthefurtherdevelopmentofitsproductsandconceptsandhasspentaroundEUR3millionduringthelastbusinessyear.Attheendofthebusinessyear,Beneemployedabout60peopleintheresearchanddevelopmentdepartment,whoworkonnewdevelopments,improvementsandcomple-tionsoftheproductportfolio.Beneismeetingspecialandindividualcustomers’requirementbytailor-madeprojects.Intheyear2006,theCompanyhasonceagainprovenitsinnovativestrengthandhasdevelopedtwonewproductfamilies.TheT-platformisacompletelynewlydevelopeddesksystemandconstitutesthespineofthe“BackOf-fice”-products.TheT-platformhasbeendesignedwithregardtomaximumflexibilityandconsequentlyfollowsthetechnicalapproachofamodularcomponentfamily.Thechallengeinthedevelopmentofthenewplatformwasthecombinationofthetechnologicalprinciplewithhighestdemandsondesignquality.

Amongthepartitionwalls,theRF-corridorwallcountstotheupperclasswithregardtodesignrequirementsbutalsoinrespectoftechnologicalperfection.Theinnovativeconstructionimpressesthroughmaximumtransparency;thedesignqualityappearsinthedetails.Anewtypeofbondingtechnologyandthelevellingelementsunderlinetheproduct’suniquetechnology.

Ithasbeenappliedforapatentforbothproductfamiliesandtheregistereddesignswereprotected.

Furthermore,inthelastbusinessyear,Benedevelopedanewdividingwallsystem,anunder-tablepedestalseriesandatechnologicallynew,openstoragefurniturepro-gram,whichshallbebroughtontothemarketinthefirsthalf-yearof2007.ThedevelopmentsofBeneinclude–evenifitconcerns„individualitems“–alwaysaproductfamily,whichconsistsofdifferentsizes,configurations,decorsanddesigns.Fortheimprovedorganisationofthediversityofvariants,adatamodel,whichillustrateseachproductwithitsproductiondatauptosalesdata,hasbeenimplementedinthepastbusinessyear.Parallel,Benehasreorganisedes-sentialcomponentsoftheinternalsoftware,whichposedabigchallengefortheentireITinfrastructure.

Inthefuture,Benewillcontinuedevelopingwell-engi-neeredandinnovativeconceptsandproducts,whichmeettherequirementsofmodernofficeenvironmentsandarchitectureandatthesametime,combineprofitabilitywithaestheticsandfunctionality.

INNOVATIONANDPRODUCTDEVELOPMENTBENE AR2006/07

STATUSREPORT

Inthelastbusinessyear,ontherefer-encedateJanuary31,2007,theBeneGroupoccupied1.344employeesworldwide.Theincreaseof10.4%comparedtothepreviousyearisresulting,amongoth-ers,fromthetakeoveroftheTILLGruppeinGermany.

ThefuturesuccessoftheBeneGroupismainlybasedonafutureoriented,strategichumanresourcesdevelop-mentandasustainablestaffdevelopment.

AccordingtothecompanystructureoftheBeneGroup,thehumanresourcesmanagementisthejointtaskofthebiglocalcompaniesandthecentralhumanresourcesdepartmentofthemothercompanyBeneAG.Theper-sonnelpolicyforexecutivesisconceivedcentrallyandfo-cusesontheinternalidentification,educationandfurthertrainingandthesupportoffutureandexistingexecutives.Thepreparationofpotentialsformanagementtasksandthedealingwithnewcompanymanagementtechniquesandtoolsforthetopmanagementareotherpriorities.

Atpresent,thekeysubjectfortheseniormanagementistheimplementationoftheBenemissionstatement2005,whichsummarisestheprinciplesofthesustainabilityandtheessentialcorestatementsofthecompanyphilosophy.

Secondandthirdlevelexecutivesoftheoperatingunitsandthestafffunctionsarespecificallytrainedduringthesocalled“BeneImpulstag”.Inthecourseofseveralsem-inarsspreadoveraperiodoftwoyears,theirknowledge,competencesandtheirleadershipbehaviouraswellastheirspecialistknowledgeareenlargedandbroughttoahighestlevel.AnotherimportantelementofthisprogramisthecreationofinternalnetworksandtheexchangeofexperiencewithinthestronglygrowingBeneGroup.

Inadditiontotheknowledgetransfer,afurtherobjectiveofthesetrainingprogramsisthecreationofanopenandconstructiveinternationalcompanyculture.

TheemployeescanparticipateinthefuturedevelopmentoftheCompanyandinthecourseoftheIPOinautumn2006,theycouldsubscribeforsharesofanominalvalueofuptoEUR7,200lessadiscountof20%.Manyem-ployeeshaveacceptedthisattractiveoffer.

Inadditiontothefixedcompensation,theManagementandtheCompany’skeyemployeesreceivevariablesala-riesbasedonkeysuccessfiguresandqualitativecriteria.Culturaldiversity,decentralisedresponsibilityandentre-preneurialthinkingatalllevelsareourmostimportantprinciples.Theyformthe“Benespirit”andensuretheCompany’sfuture.TheManagementoftheBeneGroupisconvincedthatthefurtherdevelopmentoftheemploy-eesandastrongcompanyculturealsoconstitutethebasisforpersonalcommitmentandlong-termsuccess.

EMPLOYEESBENE AR2006/07

Sincemanyyears,Bene’scompanyprinciplesincludearesponsibleenvironmentalmanage-mentaswellasanecologicalthinking.Thecompany’sdemanddoesnotonlyaimattheobservationofthelegallyprescribedminimumstandards,butecologicalthinkingandactingareratherapermanentfeatureofthecompanyphilosophyandarebasicallyappliedineverycompanydivision.

Onthelongrun,economictargetscanonlybeachievedbyarespectfultreatmentoftheenvironment.Thesus-tainableprotectionofwater,soilandair,aswellastheeconomicaluseofrawmaterialsandenergybelongtotheprimarytargetsoftheBeneenvironmentalprogram.ThatiswhytheBeneGroupsupportsandplansmeasuresfortheimprovementoftheenvironmentalsituationtothebenefitofnatureandmen.

Likewise,thecarefulchoiceofrawmaterialscontributesessentiallytotheenvironmentalprotection.Thenaturalmaterialwood,whichrepresentsmorethan60%ofBene’smaterialin-put,isbasicallypurchasedfromCentralEuropeanforests.Furthermore,theuseofdomesticwoodleadstoadrasticreductionoftransports,afact,whichduetothereducedemissionofpollutantshasagainapositiveimpactontheenvironment.

Fortheconservationofresources,thepanelblanksareoptimisedbycomputersupportedsystems.Inaddition,cuttinginstallationsareequippedwithaspecialpanellayoutadministration.BeneisexclusivelyusingclassE1glueslowinformaldehyde.About80%ofthewoodpanelwasteisreturnedtothechipboardsupplierandsubse-quentlyisreturnedtotheproductionprocess.Theremain-ingwoodwasteisaprecioussolidfuelforBene.AtthelocationinWaidhofenanderYbbs,anoilandabiomassboilerareusedforthefiringofwoodwastetoheattheproductionandtheofficepremises.

Despitetheexpansionoftheproductionbuildingbyabout30%intheyear2002,Benewasabletokeepitsenergyconsumptionroughlyonthesamelevelduringthelastyears.

Sincetheyear1998,Beneusespaintingandcoatinginstallationswithlacquerrecovery.Theover-sprayisrecycledandensuresarecoveryofmorethan95%.

Aconsiderableimprovementofthesurfacequalitywasachievedbyswitchingtopaintingproceduresbasedonwater-solubleUVcuringlacquers.Inaddition,theemissionlevelsofBene’sfurnituresurfacesarewellbelowthelegallyrequiredstandards.Furthermorethewasteheatfromthepneumaticcompres-sorsisreasonablyreused.Inthepaintshop,thewasteheatisusedfortheheatingofthedryinginstallationandthusthedemandinheatingoilisadditionallyreduced.Allyearround,thewarmwaterisprocessedbyaheatrecoveryinstallation.

Theavoidance,reduction,utilisationofwasteanditsdisposalaremaintopicsofenvironmentalprotectionandlikewiseofimportancetoBene.ForBene,wasteavoid-ancerangesfromtheprocurementofmaterialsandrawmaterialstotheproduction.TheCompanywillcontinuetodealcarefullywithresourcesandthussustainablycontrib-utestoenvironmentalprotection.

SUSTAINABILITYBENE AR2006/07

SEGMENTREPORTING

Organisationalstructure.ThesegmentAustriaincludestheproductionsiteinWaid-hofenanderYbbsandtheeightAustrianpointsofsale.AstheGroup’sprinciple,directsalesarealsopushedinAustriaandproductsfromtheBeneproductlinearedistributedthroughtheseeightpointsofsale.Thus,inthissegmentweoperateatninelocationswith896employees,ofwhich480arewhite-collarworkersand416areblue-collarworkers.

Economicenvironment.WithaGDPgrowthofabout2.8%,intheyear2006,theoveralleconomicsituationinAustriawasverypositive.Likewise,theeconomicresearchersoftheAustrianFed-eralEconomicChamber(WKO)expectagrowthof2.4%fortheyear2007.

Industrydevelopment.OntheAustrianofficefurnituremarket,thelevelsofcus-tomers’demandsarestillverydifferent.Thestandardised,commodity-alikeworkplaceisfacingahighpricepres-sure,whereasinthehigh-qualitymanagementsectorandinthecommunicationandmeetingareasthetrendtowardshigh-classandexpressivefurniturelinesisstillpersistingundertheheadingof“creatingidentity”.

Therearenomajornewplayersonthesuppliers’side,sothatBeneisfacinganestablishedcompetitors’structureinthissegment.Thefuturedevelopmentofthecompeti-tivestructurewill,besidethegeneralmarketdevelopment,dependstronglyonthefurtherdevelopmentoftheproduc-tionandbusinessprocessesoftheindividualmarketparticipants.Inanycase,inthenearfuturecapital-intenseinvestmentsinthedifferentproductionsiteswillbeneces-sarytomeettheinternationalandnationalrequirementinthefuture.

InAustriathecustomers’trendisclearlygoingtowards

–Individualisation–customerstrytopositionthemselvesthroughindividualsolutions

–Internationalisation–increasingdemandintrans-national,complexprojects

–Professionalisation–focusedandcentralisedpurchas-ing–alsoincreasinglyfromsmallandmedium-sizedcompanies

SEGMENTAUSTRIA

TheBeneGroup’sactivitiesaresegmentedaccordingtoregionalaspects.Inthissense,theGroupreportsaboutthesegmentsAus-tria,Germany,UK,RussiaandRestoftheworld.

Currently,theBeneGroupproduc-esofficefurnitureandofficedivid-ingwallsatitsplantinWaidhofenanderYbbs.

BENE AR2006/07

Benemarketprofile.Asclearmarketleader,BenesuccessfullycoversallmajorcustomersegmentsofitshomemarketAustria.Duetothehighmarketshareofabout27%,ineachcustomerproj-ect,Beneencountersastrongcompetitivesituation,whichtheGroupfaceswithaclearproductandserviceportfoliotakingtherequirementsofnewworkingenvironmentsintoaccount.

Businessperformance.Inthebusinessyear2006/07,theBeneGroupcouldincreaseitssalesinAustriaby7.7%toEUR68.2million.TheEBITofEUR2.4millionremainedbyEUR0.4millionbelowthepreviousyear’svalue.Thisdevelopmentisresultingfromtheincreaseinfixedpersonnelandmaterialcosts,requiredagainstthebackgroundofthepositivebusinessperformance.However,determiningfactorswereone-timecostsrelatedtotheIPO.

Consequently,inthepastyear,thesegmentgenerated34.4%ofconsolidatedsalesand18.1%oftheGroup’sEBIT.Withregardtotheprojectbusiness,inthelastyear,thefollowingprojectshavetobeparticularlypointedout:HypoGroupAlpeAdria(EUR3.1million),GeneraliVersicherung(EUR1.8million)andAndritzAG(EUR0.8million).

TheBeneGroupallocatesallcostsoftheproductionandadministrationsiteinWaidhofenanderYbbstotheAus-trianEBIT.Consequentlytheincreaseinfixedpersonnelandadministrationcostsprimarilyreflectinthissegment.

Outlook.BasedonthepreviouslymentionedoveralleconomicprospectsforAustriaintheyear2007andthefurtheroptimisationofthebusinessprocesses,theManagementexpectsagainincreasesinsalesandearningsforthenextbusinessyear.

Dexter.Classicelegance–dressedbythefashiondesignerPaulSmith.

BENE AR2006/07

SEGMENTREPORTING

Organisationalstructure.In1987,BenestarteditsactivitiesinGermanywithanowndirectsalesbranch.In1998,BeneacquiredtheObjektformgruppe,which,atthattime,usedtobethelargestnationalofficefurnituredealer.Inthecourseofasustainablerestructuringaftertheeconomicallydifficultyears2002and2003,theGrouphasbeenstrategicallyreoriented.Currently,intheGermanysegment,thereare13ownlocationsandmorethan180employeesinsales.Thus,BeneispresentwithownandstrongdistributionbranchesinallmajoreconomicGermanmetropolitanareas.Inthefewgeographicareas,inwhichBeneisnotyetactive,theproductsandservicesaredistributedthroughthird-partydealers.However,therelationbetweenownandsecondarydistributiongoesclearlytowardsowndistributionandreachedapproximately93%to7%inthelastbusinessyear.

Economicenvironment.In2006,Germanyachievedaneconomicgrowthof2.7%after1.1%intheyear2005.Besidestrongexports,tradi-tionallythemotoroftheGermaneconomy,inthelastyear,thedomesticdemandregainedmomentum.DuetotheVATincreaseasofJanuary1,2007,advancedpurchasesofconsumergoodsandofhousinginvestments,whichboostedtheprivateconsumption,wereobservedattheendof2006.Onthejobmarket,theHartzIVreformsre-sultinfirstsuccesses:In2006thenumberofunemployedpeopledroppedby300.000.

Industrydevelopment.Sincetheconsiderabledropinsalesofupto23.4%intheGermanfurnituremarketintheyears2000to2003,themarketrecoveredin2006andincreasedby2.4%.Manycompanieshavealreadypartlymadeupforthedelayedinvestmentsandmorecatch-upeffectsarefore-castedfortheyear2007.Basically,theGermanfurnituremarketischaracterisedbyasteadygrowth.Externalob-serverspredictanincreaseof4to6%fortheyear2007.

Benemarketprofile.AlsoinGermany,Beneisspecialisedintheconceptionanddesigningofworkingenvironmentsandcountsamongtheleadingsuppliersofofficefurniture.Apartfromtheorganicgrowth,inthepastyear,theBeneGroupcouldexpanditspositioninGermanythroughtheacquisitionof100%ofthesharesoftheTILLGruppe,asuccessfulofficefurnituredealerinGermanyandBeneAG’ssalespartnersince1996.Withthisacquisition,hastakenabigsteptowardsitsstrategictargettoachieveprestigiousmarketsharesinallimportanteconomicmetropolitanareas.TheGreaterStuttgartareaaswellaslargepartsofBaden-Württemberg,wheretheTILLGruppeislocatedareoneoftheeconomicallymostdevelopedregionsinGermany.

Inadditiontothegeographicalfocus,inthepast,Benesuccessfullytriedtogainarelevantpositionandapositiveconceptionfromthetargetgroupofarchitectsanddeci-sionmakers.Lastyear,officialstudieshaveproventhesuccessoftheseambitions.BesideUSMandVitra,Beneenjoysthethirdhighestbrandawarenessandapprecia-tionoftheserelevanttargetgroups.(BBEBranchenreport2005)

SEGMENTGERMANYBENE AR2006/07

Outlook.Despitesomemacroeconomicperturbations,suchasarestrictivefinancepolicyandtheVATincreaseforthecurrentyear,BeneexpectsapositivedevelopmentoftheGermanofficefurnituremarketbasedonthestillstrongexportactivitiesandtheincreasedinvestmentsasaresultofthecatch-upeffects.

Businessperformance.Intheyear2006/07,salesinGermanymettheexpecta-tionsandroseagainby7.0%toEUR52.6million.ThankstohighersalesofBeneself-productionintheGermanysegment,thedisproportionallyincreasedpersonnelcostsandthemaintaineddisciplineoncosts,theEBITofEUR1.3millionexceededthepreviousyear’slevelby15.6%andreachedadecentvalue,whichconstitutesagoodba-sisforthefurtherdevelopment.Besidetheuseofallmar-ketopportunities,oneofthemainreasonsforthisexcellentdevelopmentistheconsistentfocusontheoptimisationofsalesmargins.Withregardtotheprojectbusiness,thelastyear’sprojectswithCCLeasing(EUR4.0million),Mainova(EUR0.7million)andDeutzAG(EUR0.6million)havetobementioned.

BENE AR2006/07

Rondo.Smooth,flowinglinesascounterpointtoourtoday’srationalworld.

SEGMENTREPORTING

Organisationalstructure.Since1988,BeneisrepresentedbyanowncompanyintheUK,oneofEurope’smostdynamicmarkets.Benestrivestomeetthespecialrequirementsofthemarket,whichtoalargeextentisdeterminedbyarchitects,byaconclusiveproductpositioningandparticularlybyaprecisetargetgroupstrategy.

Currently,Benehas45employeesinthismarketandanoutlooktothefuturedoesnotshowanyslow-downofthisdynamic.

Economicenvironment.Afteraslightlyweakergrowthin2005comparedto2004,theUKsegmentrecordsaneconomicgrowthofmorethan2.7%in2006comparedto2005.

Industrydevelopment.TheUKofficefurnituremarketreacheditspeakintheyear2000withatotalmarketvolumeofEUR1.74million.Afterwards,themarketstagnatedatthishighleveland,comparedtothepreviousyear,evendroppedby24%ineachoftheyears2002and2003.Inthebusinessyears2004and2005,themarketvolumestabilisedandsincethenremainedrelativelyconstantatavalueofapproxi-matelyEUR940million.In2006,theindustrygrewbyabout1.2%.

Benemarketprofile.DespitetheratherflatgrowthcurveinUK,thisregionremainsanimportantsegmentfortheBeneGroup.EspeciallythefinanceandeconomiccentreLondoncon-stitutesanimportantandstablemarketforofficefurniture.Meanwhile,theconditionsremainstableandinthelastyear,thesegmentcouldgenerate13.3%oftheGroup’stotalsalesandthusisoneofthemostimportantsegmentswithagrowthof14.9%.Besidestheclearpositioninginademandingsegment,thesegment’sstrengthliesinthecloserelationstocustomers,architectsandrealestatedeveloperscombinedwithacompetitiveprice-perfor-manceratio.

SEGMENTUKBENE AR2006/07

Mezzo.Asuccessfulall-rounderforallofficezonesandareas.

Businessperformance.Afteraweakerfirstquarterin2006,intheoverallbusinessyear2006/07,salesincreasedby14.9%fromroundEUR22.9milliontoEUR26.3millionasaresultoftheacquisi-tionofseverallarge-scaleprojectsandconsequentlyBenecouldfurtherstrengthenitsmarketposition.

TheBeneGroupwasabletoincreaseitsself-productionsharealsointhissegment.Despiteaseverecompeti-tion,thisreflectedinimprovedmargins.Asaresultofadisciplinedexpenditurepolicy,theEBIT-marginimprovedconsiderablyto8.1%(previousyear:5.8%).Thus,inthelastbusinessyear,theUKsegment’sresultincreasedby58.8%fromEUR1.3milliontoEUR2.1million.

Withashareinconsolidatedsalesof13.3%,thesegmentgenerated16.2%oftheGroup’sEBIT,whichimpres-sivelyunderlinestheimportanceoftheUKbusiness.

Outlook.DespitesomeweakperiodsoftheEUeconomy,com-paredtotheotherindustrialnations,theUKeconomyisstilldoingrelativelywell.Particularlytheserviceindustryandespeciallythebankingsectorarecharacterisedbygrowth–thebanks’annualbalancesheetsreportrecordprofitsandthebonuspaymentswereincreasing.Basedonthisbusinessenvironment,Beneisexpectingalsoapositivedevelopmentofthepropensitytoinvestinthefurnituresegment.

BENE AR2006/07

SEGMENTREPORTING

Organisationalstructure.Russiaand,inthefirstplace,thecapitalMoscowislook-ingbackoneconomicallystrongyears.TheBeneGrouphasveryearlyrecognisedthepotentialofthecountryandhasstarteditsbusinessactivitieswiththefoundationofanowncompanyintheyear1988.Inspiteoftemporarydifficulteconomicconditions,sincethen,Benedidnotonlysucceedinmaintainingtheoperatingbusinessbutwasevenabletocontinuouslyexpanditsbusinessandtocreatepromisingstructures.Atpresent,Benehas56employeesonthemarket.

Economicenvironment.TheEasternEuropeanmembercountriesingeneralandRussiainparticularshowanexcellentperformanceinthelastyear2006.Theconsiderablemarketcorrectioninthecourseofthesecondquarterof2006hasbeenmorethanrecoveredduringthesecondhalf-yearof2006.

Russiabenefitedfromthehighdemandforrawandbasicmaterialsandforenergyresourcesandthuscouldprovidethebasisforaconsiderableeconomicgrowth.TheresultisadrasticreductioninRussia’sinternationaldebts.

In2006,thegrowthrateforRussiaamountedtoover20%andincreasedfromUS$763.3billiontoUS$938.4billion.

Industrydevelopment.Russia’sstrongnationaleconomicdevelopmentwaslead-ingtoastrongmigrationofnationalandinternationalcom-paniestoMoscow.Combinedwithastrengtheningofthenationaleconomy,especiallyoftheprimaryindustry,thelastyearsweremarkedbyabigdemandforhigh-qualityofficefurniture.Nexttolocalsuppliers,whichwithregardtotheirqualityareratheractiveinthestandardisedproductsegment,meanwhileallmajorinternationalofficefurnituremanufacturershaveestablishedtheirownbranchesinMoscow.Benebenefitsfromtheadvantageofitslongpresenceanditscontinuouslygrowingmarketexperience.

Thedevelopmentofthemarketbecomesmoreandmorecompetitive,focusedonthefull-rangesupplierwithaqualitativeconvincingvaluechainfromplanningoverofficefurnitureuptologisticsandassembly.

SEGMENTRUSSIABENE AR2006/07

Folding_ComTable.Aperfectactorontheconvertibleofficestage.

Benemarketprofile.WithgrowthratesinEasternEurope,whicharemorethantwiceashighastheEUaverage,theseregionsattractmanycompaniesthatrelyonthehugegrowthandinvest-mentpotential.ThatiswhyRussiabelongstotheBeneGroup’scoresegments.

Asaresultoftheincreasingcompetition,Beneencountersastrongcompetitivesituationforeachcustomerproject,whichtheGroupisfacingwithawelldirectedcustomerorientationandaclearproductportfolio.Similartoothermarkets,theaccesstodecisionmakersandarchitectsisofdecisiveimportanceinthestronglycompetitivemarket.Consequently,acontinuousandsustainablecustomertreatmentconstitutesanintegralpartofBene’sbusinessstrategyinRussia.

Businessperformance.Asaresultofseverallarge-scaleprojects,inthebusinessyear2005/06theBeneGrouprealisedsalesintheamountofEUR25.9millioninRussia,whichwithEUR20.7mil-lioninthepastbusinessyearcouldnotbere-achieved.However,duetoanumberofsmallerandmedium-sizedprofitableprojects,theEBITimprovedsignificantlyandincreasedfromEUR2.0milliontoEUR3.0million.TheshareintheGroup’sEBITrosefrom17.9%to23.2%.Importantlarge-scaleprojectwererealisedwithImpex-bank(EUR1.1million),FortuneEast(EUR0.6million)andwithKMTEngineering(EUR0.5million).Withacontribu-tionof23.2%totheconsolidatedresult,theRussiaseg-mentreconfirmsitsimportantpositionwithintheGroup.

Outlook.Duringthelastyears,theeconomicoutlooktothedevelop-mentofRussiahasalwaysbeendominatedbypoliticalaspects.However,for2007Beneexpectsastableeco-nomicgrowthexceedingtheWesternEuropeanlevel.ThesteadydemandforrawmaterialsandtheexpansionoftheinfrastructurewillremaincentralelementsoftheRussiannationaleconomy.Thefurnituremarketshallbeabletobenefitfromthis.

BENE AR2006/07

Organisationalstructure.Thesegment„Restoftheworld“includesthoseWesternandEasternEuropeanmarkets,onwhichBeneispartlyactivealreadysincethe1980ies(Switzerland).ThissegmentismainlydominatedbythestillsmallermarketsinCentralandEasternEurope.Benemadeuseofthepoliticalreversalattheendofthe80iesandaccompanieditsmajorAustriancustomersfromindustryandfinancetothesenewmarkets.Meanwhile,BenedevelopedintotheonlyEuropeanofficefurniturecompanywithanextensivesalesnetworkreachingasfarastheremainingYugoslavia.

InWesternEurope,BenestrengtheneditsactivitiesinBeneluxandontheIberianPeninsulahowever,theseareasarestilldominatedbythird-partydealers.WiththefoundationofanowncompanyinIrelandinthethirdquarterof2006/07,afurtherexpansionstepwassetinadynamicmarket.

Inthepastyear,theDubaibranch(UAE),openedintheyear2000,couldsuccessfullyexpanditsactivities.

Economicenvironment.Similartothepreviousyears,in2006,theCEEregionwasmarkedbyevengreatereconomicdynamiccomparedtothemorematureeconomiesinWesternEurope.

GDPgrowthratesbeyond5%characterisethisareaandthuswerealmosttwiceashighasinWesternEurope,wherethegrowthreachedabout2.6%.

Industrydevelopment.Theindustrydevelopmentinthissegmentisorientedonthefollowingstronglysellingregions.France,Switzerland,UnitedArabEmirates,Hungary,Croatia,Slovenia,etc.Until2008,inFrance,salesareexpectedtorisebetween5.8%and6.0%annually,similarinSwitzerland,whereafterthesharpdeclineoftheentireofficefurnituremarketintheyears2002/2003,asteadyrisecanberecognisedsincethen.LikewisetheUnitedArabEmirates,particularlyDubai,playanimportantroleinthissegment–therapidgrowthandtheincreasingpotentialofthelast-mentionedregionsbecameapparentalreadyduringthepastyears.

SEGMENTRESTOFTHEWORLD

SEGMENTREPORTINGBENE AR2006/07

Benemarketprofile.Comparedtothepreviousyear,in2006/07Benecouldachieveasalesincreaseof20.8%inthe„Restoftheworld“segment.Thisoutstandingdevelopmentisattributedtothestableeconomicconditionsandthedevelopmentofthesegment’scountries.Basically,Benecouldrecordsuccessesindemandingprojects.Inthissegment,Benefocusesontheexpansionofmarketshares–whicheacharesmallerthan5%–throughprojects.

Businessperformance.Inthebusinessyear2006/07,salesandearningsofthe„Restoftheworld“segmentincreasedconsiderably.Inthereportingperiod,thesegment’ssalesrosetoEUR30.7million,theEBITevenimprovedby6.7%toEUR4.2million.ThissuccessismainlyresultingfromthesalesincreasesintheUnitedArabEmirates(EUR2.7million),inCentralandEasternEurope(EUR2.1million)andinIreland(EUR0.5million).

IntheCEEmarkets,theprojectwiththeHVBBank(EUR1.2million)inHungaryhastobeparticularlypointedout.

Afterstart-updifficulties,thesituationinBeneluxstabilisedonagoodlevelduringthelastyear.Thankstoconsistentstructureandcostoptimisation,thetargetedoperatingprofitcouldbeachievedandgiventhemarketenvironmentgoodearningscouldbegenerated.

Outlook.TheeconomicdevelopmentofCentralandEasternEurope(CEE)willremainacentralfactorfortheAustrian(export)economyandtheViennastockmarketinthecomingyear2007.WithgrowthratestwiceashighastheEUaverage,presumablytheCEEregionwillremaintheEuropeangrowthmotoralsoin2007.ThestocklistedAustriancompanieswilllikewisebenefitfromthesecondstepoftheEU-eastwardenlargementandBenenotleastduetoitsstrongsalespresenceintheseregionswillbeabeneficiaryofthisdevelopment.

High_ComTable#2Keepsthebodyinmotionandthoughtsflowing.

BENE AR2006/07

BENEEMPLOYEES

In37branches,representedin16countries,BENE’sem-ployeesensureasmoothprocessingofordersandthedevelopmentofnewandinnovativeofficefurniture.Gettoknowsomeofouremployeesonthefollowingpages!

SimonKRAPF,Salesassistant,BeneInnsbruck

NataliaKARYAKINA,SalesManager,BeneMoscow

JanaHRDINOVA,Salesassistant,BenePrague

KerstinLÜDERS,Marketingandsalesstaff,ObjektformEssen

KostadinTOUMBEV,SalesDirector,BeneBulgaria

BjörnTSCHINKEL,Planningandprojectmanagement,BeneSwitzerland

EMPLOYEES

AgnesMATUSEK,Marketingandsalesstaff,BeneBudapest

CraigRAESIDE,AccountManager,BeneLondon

JürgenLÖSCHENKOHL,ExecutiveManager,BeneDubai

AhmedKANDIL,SalesDirectorMiddleEast,BeneDubai

BENE AR2006/07

AngelaBRANDSTäTTER,Salesassistant,BeneGraz

IngeNEUMEISTER,Salesassistant,BeneInnsbruck

PeterBRANDL,ProjectManager,BeneWaidhofen

ClaudiaPINTO,BackOfficeAdministration,BeneDubai

LinaPaolaRUIZ,Reception,BeneDubai

StefanGLEINSER,Salesassistant,BeneInnsbruck

EMPLOYEES

HeatherMcCRORY,Salessupport,BeneLondon

AlexeyKOULIKOV,SalesManager,BeneMoscow

KarelWANKE,SalesManager,BenePrague

BENE AR2006/07

Thepastfinancialyearisnotonlyoneofthemostsuccessfulyears,butwiththeIPOinautumn2006isoneofthemostprominentyearsofCompany’shistory.

AnewandchallengingareabeganonNovember3in2006.ThesuccessfulIPOwiththeCompany’slistingattheViennaStockExchangeallowedtheoriginalsharehold-ers,thefinancialinvestorSARPEDON,undertheleadmanagementoftheUIAG,asuccessfulandscheduledexitfromtheCompanyandtheBenePrivatstiftung(privatetrust),whichholds40.9%ofthesharescouldstrengthenitspositionasAustriancoreshareholder.Withafreefloatof52.7%,theBeneAGhasachievedthestatusofanat-tractivepublicly-ownedcompany.TheManagementholds6.4%ofthesharesandthus,theBeneAGhascreatedanattractiveandstableshareholdersstructureforallpar-tiesinvolved.

InadditiontotheIPO,theCompanyfocusedonthefur-therexpansionoftheorganisationandthuscouldestablishthebasisforasuccessfulbusinessyear2007/08.AgainstthebackgroundofpromisingeconomicprospectsforallmarketsrelevanttoBene,weareconfidentthatthecom-ingfinancialyearwillbeasuccessfuloneforallstakehold-ers.

Intheyearunderreview,duringfourmeetings,theSupervisoryBoardandtheManagementBoardintenselydiscussedtheCompany’seconomicsituationanditsstrategicfurtherdevelopmentaswellasessentialevents,investmentsandmeasures.TheSupervisoryBoardhascalledintheauditortothemeetingheldonMay4,2007,whichdealtwiththeannualfinancialstatementsfor2006/07.

Inallmeetings,theManagementBoardhasreportedtotheSupervisoryBoardatlengthandinthecontextofthereportingroutineshasinformedtheSupervisoryBoardabouttheGroup’sbusinessandfinancialsituation,aboutitsparticipations,thepersonnelsituationandaboutinvestmentandacquisitionprojects.Particulareventsweresubjecttoadditionalwrittenreports.Furthermore,inindividualoneononediscussions,theChairmanoftheSupervisoryBoardandhisdeputywereregularlyinformedbytheManagementBoard.

Inthepreviousyear,thecooperationbetweentheSuper-visoryBoardandtheManagementBoardwascharacter-isedbyvarioussubjects.Firstandforemost,thefocusoftheongoingdiscussionswastheIPOandtheresultingmeasuresandsteps.Theimplementationoftheprofitablegrowthstrategywasafurtherfieldofdiscussionsandreporting.Inthiscontext,thecurrentfinancingsituationandtheimplementationpossibilitiesofthestrategywereregularlyreviewed.Basedonthestrongcash-flow,theSupervisoryBoardconsidersthecurrentnetgearingof–28.0%assolidandpositivelysupportsthecontinuationoftheexpansionpolicy.

InthecourseoftheIPO,theSupervisoryBoardwasconcernedwiththeAustrianCorporateGovernanceCodeandhasapprovedtherequiredamendmentsoftherulesofprocedureoftheSupervisoryandtheManagementBoardaswellasthenecessarychangesofstatutes.

TheannualfinancialstatementsandthestatusreportoftheBeneAGaswellastheconsolidatedfinancialstate-mentsinaccordancewithIFRSwereauditedbyErnst&YoungGmbHWirtschaftsprüfungs-undSteuerbera-tungsgesellschaftandweregivenanunqualifiedauditcertificate.

Thebalancesheetcommittee,jointlywiththeauditor,dealtindepthwithallannualaccountingdocuments,theManagementBoard’sproposalfortheappropriationofprofitsandtheauditor’sreportsandpresentedthesetotheSupervisoryBoard.TheSupervisoryBoardhasauditedtheannualfinancialstatements,theproposalfortheappropriationofprofitsandthestatusreportincompli-ancewith§96AktG.Thesefinalconclusionsdidnotgivegroundsforanyobjections.

WaidhofenanderYbbs,May2007

ManfredBenem.p.,Chairman

BENE AR2006

REPORTOFTHESUPERVISORYBOARD

BENE AR2006/07

CONSOLIDATEDFINANCIALSTATEMENTASOFJANUARY31,2007

52 Consolidatedbalancesheet

53 Consolidatedincomestatement

54 Consolidatedstatementofchangesinequity

55 Consolidatedcashflowstatement

56 Companyinformation

57 Principlesofaccounting,financialreportingandvaluationmethods

72 Acquisitions74 Notestotheconsolidatedbalancesheet

98 Notestotheconsolidatedincomestatement

102 Notestotheconsolidatedcashflowstatement

103 Riskmanagement 108 Contingenciesandotherobligations

109 Subsequentevents

110 Businesstransactionswithrelatedparties

112 Executivebodies

113 Numberofemployees

114 Segmentreporting

116 Auditor‘sreport

in € 000 Comments 2006/07 2005/06

as of Jan. 31, 2007 as of Jan. 31, 2006

Assets

Intangible assets 4.1 5,730 3,916

Property, plant and equipment 4.2 27,230 27,075

Investments in affiliated companies 4.3 210 85

Non-current financial assets 4.4 1,850 2,129

Deferred tax assets 4.5 7,720 8,036

Non-current assets 42,740 41,241

Inventories 4.6 14,688 11,440

Receivables and other assets 4.7 41,532 33,026

Current financial assets 4.8 18,385 1,613

Cash and cash equivalents 4.8 22,807 17,927

Current assets 97,412 64,007

ToTAl AsseTs 140,152 105,248

equity and liabilities

Capital stock 24,347 18,750

Capital reserves 26,822 3,913

IAS 39 reserve 112 82

Currency translation reserves -635 -125

Accumulated profit/loss 12,356 6,038

stockholders equity 63,003 28,657

Minority interests 896 690

equity 4.10 63,900 29,348

Liabilities to employees 4.12 12,168 11,195

Long-term financial liabilities 4.14 12,687 16,954

Long-term provisions 4.13 50 100

Long-term government grants and subsidies 4.16 821 900

Deferred tax liabilities 4.5 47 0

Non-current liabilities 25,772 29,149

Trade payables 4.17 23,055 21,786

Current financial liabilities 4.15 10,627 7,634

Current provisions 4.13 214 727

Current tax provisions 4.13 873 735

Other liabilities 4.17 15,569 15,658

Current government grants and subsidies 4.16 141 210

Current liabilities 50,479 46,751

ToTAl equiTy ANd liAbiliTies 140,152 105,248

CoNsolidATed bAlANCe sHeeT As oF JANuARy 31, 2007 beNe AR 2006/07

in € 000 Comments 2006/07 2005/06

Continuing operations

Revenue 5.1 198,551 186,719

Inventory changes finished / semi-finished goods 166 -341

Other capitalised services 948 700

Other income 5.2 3,686 2,221

Materials and supplies 5.3 -93,199 -92,847

Personnel expenses 5.4 -60,092 -53,786

Other operating expenses 5.5 -31,409 -25,861

earnings before interest and taxes, depreciation and amortisation (ebiTdA) 18,651 16,806

Depreciation and amortisation -5,568 -5,520

earnings before interest and taxes (ebiT) 13,083 11,286

Interest expense 5.6 -1,118 -1,592

Income from interest 5.6 215 224

Other financial result 5.7 146 440

Result from affiliated companies 4.3 60 0

Financial result -698 -929

earnings before taxes (ebT) 12,386 10,357

Taxes on income 4.5 -3,434 -2,559

Result from continuing operations 8,952 7,798

discontinued operations 4.9

Income from discontinued operations 0 23

Net income 8,952 7,821

Thereof:

Shareholders of parent company 8,426 7,472

Minority interests 526 349

8,952 7,821

earnings per share (diluted = basic) in € 000:

from continuing operations 0.42 0.40

from discontinued operations 0.000 0.001

CoNsolidATed iNCoMe sTATeMeNTFoR THe busiNess yeAR 2006/07beNe AR 2006/07

in € 000 Capital stock Capital iAs 39 Currency Consolidated shareholders‘ Minority equity

reserves reserves translationreserves

net income/loss

equity interests

as of Jan. 31, 2005 18,750 3,913 66 -497 -889 21,344 640 21,984

Payment of dividends 0 -83 -83

Changes in minority interests -327 -327 -244 -571

Revenues and expenditures* 15 372 7,254 7,641 377 8,018

as of Jan. 31, 2006 18,750 3,913 82 -125 6,038 28,658 690 29,348

as of Jan. 31, 2006 18,750 3,913 82 -125 6,038 28,658 690 29,348

Payment of dividends -1,894 -1,894 -345 -2,239

Capital increase(see 4.10) 5,597 25,058 30,656 0 30,656

Transaction costs(see 4.10) -2,166 -2,166 0 -2,166

Share based payments(see 4.11) 16 16 0 16

Revenues and expenditures* 31 -510 8,212 7,733 551 8,284

as of Jan. 31, 2007 24,347 26,822 112 -635 12,356 63,003 896 63,900

* Total of revenues and expenditures accounted for

in € 000 Jan. 31, 2007 Jan. 31, 2006

Change in IAS 39 reserves (financial instruments available for sale)

Valuation profit / loss taken to equity 25 89

Valuation profit / loss taken to income 15 -69

Actuarial profits / losses -285 -253

Taxes on income taken to equity 62 58

Adjustment from foreign currency translation -485 372

Result included in equity -668 197

Consolidated net income / loss 8,952 7,821

Total of included revenues and expenditures 8,284 8,018

thereof shareholders of parent company 7,733 7,641

thereof minority interests 551 377

8,284 8,018

CoNsolidATed sTATeMeNT oF CHANGes iN equiTybeNe AR 2006/07

in € 000 Comments 2006/07 2005/06

earnings before tax from continuing and discontinued operations (ebT) 12,386 10,394

Depreciation and amortisation 5,567 5,520

Net interest income and income from securities 745 936

Profit/loss from disposal of property, plant & equipment and intangible assets -70 -86

Profit/loss from disposal of financial assets 7 -328

Result from affiliated companies 4.3 -60 0

Other non-cash expenses/income -506 -443

Changes in inventory 4.6 -2,929 1,249

Changes in receiveables and other assets 4.3, 4.7 -7,877 -7,603

Changes in trade payables 822 7,298

Changes in other liabilities -868 -511

Changes in long-term provisions (incl. employees) 4.12, 4.13 687 362

Changes in short-term provisions 4.13 138 370

Cash Flow from continuing operations 8,042 17,158

Taxes paid on income -3,408 -1,693

Withholding taxes paid -158 -207

Cash Flow from operating activities 4,476 15,258

Proceeds from assets disposals 346 503

Expenditures for property, plant & equipment and intangible assets -6,039 -5,777

Proceeds from financial assets 1,212 10,975

Expenditures for financial assets -17,397 -8,320

Proceeds from disposal of investments in subsidiaries 0 308

Expenditures for the acquisition of subsidiaries 3 -918 0

Interests received 215 222

Income from securities 158 433

Cash Flow from investing activities -22,423 -1,656

Capital increase 4.10 28,506 0

Raising of interest-bearing financial liabilities 4,500 0

Repayments of interest-bearing financial liabilities -6,605 -13,888

Interests paid -1,118 -1,592

Payment of dividends 5.9 -1,894 0

Payments to minority shareholders -395 -216

Cash Flow from financing activities 22,994 -15,696

Changes in cash and cash equivalents 5,047 -2,094

Cash and cash equivalents at beginning of period 17,927 19,504

Adjustment from foreign currency translation -168 517

Cash and cash equivalents at end of period 4.8 22,807 17,927

CoNsolidATed CAsH FloW sTATeMeNTFoR THe busiNess yeAR 2006/07beNe AR 2006/07

The present consolidated financial state-ments of Bene AG and its subsidiaries for the business year 2006/07 (as of January 31, 2007) were released for publication on May 4, 2007 by resolution of the Compa-ny’s Management.

The Bene Group develops, produces and sells office furniture and integrated office concepts, primarily for the European market. In its home market, the Company is market leader and on the European market it is one of the leading suppliers.

The Bene AG is a company according to Austrian law, with its headquarters in Schwarzwiesenstraße 3 in 3340 Waidhofen/Ybbs. The Company is registered in the com-mercial register of St. Pölten under FN 89102h.

1 CoMPANy iNFoRMATioNbeNe AR 2006/07

The consolidated financial statements of the Bene Group as of January 31, 2007 were prepared in compliance with the International Financial Reporting Standards (IFRS) valid for the business year 2006/07 and under consideration of the interpretations of the Interna-tional Financial Reporting Committee (IFRIC) applicable in the European Union.

The present consolidated financial statements were compiled under the condition of the continuation of the Company. The reporting and the consolidation of individual items in the balance sheet, the profit and loss statement, the cash flow statement and the changes in equity follow the principle of essentiality. The accounting of the compa-nies included in the consolidated financial statements is based on the consistent accounting methods of the Bene Group. These accounting principles were consistently ap-plied to the presented periods (January 31, 2006, January 31, 2007) as well as to the IFRS opening balance. This ensures the comparability of the previous year’s figures.

The consolidated financial statements were principally pre-pared by applying the acquisition cost principle. Financial investments available for sale are excluded thereof, these are stated at fair value.

The consolidated financial statements are prepared in eu-ros. Unless otherwise specified, all amounts are rounded to thousand EURO (TEUR, T €). The total of rounded amounts and percentages may show rounding related differences resulting from the use of automatic calculation methods.

Basically, the financial reporting and valuation methods correspond to the ones applied in the previous year, with the following exceptions:

In the business year 2006/07, the Group applied the following new and revised IFRS standards and interpreta-tions. No essential effects on the consolidated financial statements were arising from the application of these new or revised IFRS standards. However, they led to additional disclosures:

• IAS 19 amendment – employee benefits • IAS 21 amendment – effects of changes in foreign

exchange rates• IAS 39 amendment – recognition and valuation• IFRIC 4 determining, whether an agreement contains

a lease • IFRIC 5 rights to interests arising from decommission-

ing, restoration and environmental funds • IFRIC 6 liabilities arising from participation in a specific

market – old electrical and electronic appliances

The impacts are as follows:

iAs 19 employee benefits: The Group has adopted the amendments of IAS 19 for the first time in the business year 2006/07. Hence, additional disclosures on the trends in the context of assets and obligations arising from defined benefit obligation plans and on the assumptions, on which the components of expenses for defined benefit obligation plans are based, are given. Compliance with the new IAS 19 resulted only in additional disclosure. It did not lead to any change in the applied financial reporting and valuation methods.

iAs 21 effects of changes in foreign exchange rates: The Group has adopted the amendments of IAS 21 for the first time in the business year 2006/07. Hence, all exchange differences resulting from monetary items that form part of the Group’s net investment in a foreign opera-tion are recognised as separate component of equity in the consolidated financial statements. This is applicable regardless of the currency of the monetary item. Compli-ance with this standard did not have any substantial impact on the financial and earnings situation as of January 31, 2007 and January 31, 2006.

iAs 39 Financial instruments – recognition and valuation: Recognition of financial guarantees (published in August 2005) – Amendment of the scope of IAS 39. Financial guarantees, which are no insurance contracts, are initially recognised at fair value and subsequently at the higher of the amount in accordance with IAS 37 “provisions, contingent liabilities and contingent assets” and the amount initially recognised less, cumulative amortisation in accordance with IAS 18 “revenue”. The application of this amendment did not have any impact on the consolidated financial statements.

2 PRiNCiPles oF ACCouNTiNG, FiNANCiAl RePoRTiNG ANd VAluATioN MeTHodsbeNe AR 2006/07

2.1 PRiNCiPles oF ACCouNTiNG

iAs 39 Reporting of hedges of intra-group forecast transac-tions: (published in April 2005) – This new regulation of IAS 39 permits the foreign currency risk of a highly probable intra-group forecast transaction to qualify as the hedged item in a cash flow hedge in consolidated financial statements – provided that the transaction is denominated in a cur-rency other than the functional currency of the company entering into that transaction and the foreign currency risk will affect the consolidated financial statements. The Group does not enter such transactions and thus there was no impact on the consolidated financial statements from the amendment of IAS 39. iAs 39 Fair Value option: (published in June 2005) – This new regulation of IAS 39 limits the option to state financial assets or any financial liability at fair value. The Group does not use the fair value option and consequently no impact on the consolidated financial statements was resulting from the amendment of IAS 39.

iFRiC 4 determining, whether an agreement contains a lease: The Group adopted IFRIC 4 for the first time in the busi-ness year 2006/07. This interpretation gives guidance on determining whether an agreement contains a lease, on which reporting regulations have to be applied. This amendment of reporting and valuation methods did not have substantial impact on the financial and earnings situa-tion of the Bene Group.

iFRiC 5 Rights to interests arising from decommissioning, restoration and environmental funds:The Group adopted IFRIC 5 for the first time in the busi-ness year 2006/07. These interpretations regulate how to account for interests in funds issued for the financing of decommissioning of assets. The Bene Group does not hold such funds and thus no impacts were resulting on the consolidated financial statements.

iFRiC 6 liabilities arising from participation in a specific market – old electrical and electronic appliances:The Bene Group adopted IFRIC 6 for the first time in the business year 2006/07. This interpretation regulates the recognition of a liability for the decommissioning of old electrical and electronic appliances according to the EU directive for old electrical ad electronic appliances. Since there is no group-wide participation in a specific market with electrical and electronic appliances, no impacts on the Bene Groups financial and earnings situation were arising.

In addition, the Group has decided on the earlier adoption of IFRIC 8. No impacts on the Groups financial situation were arising from the application. However, it led to ad-ditional disclosures:

iFRiC 8 scope of iFRs 2: The Group has adopted IFRIC 8 early and for the first time in the business year 2006/07. This interpretation regulates the application of IFRS 2 to all agreements, for which the fair value of a consideration appears to be less than the fair value of the equity instruments granted. The Bene Group has issued equity instruments only to its employees in the context of the IPO and thus the application of this interpretation had no impact on the financial situation of the Group.

The BENE Group has not early adopted the following standards and interpretations:

• IAS 1 Amendment – presentation of financial statements Effective date: January 1, 2007

• IFRS 7 Financial instruments – disclosures Effective date: January 1, 2007

• IFRS 8 Operating segments Effective date: January 1, 2009

• IFRIC 9 Reassessment of embedded derivatives Effective date: June 1, 2006

• IFRIC 10 Interim Financial Reporting and Impairment Effective date: November 1, 2006

• IFRIC 11 IFRS 2 – Group and Treasury Share Transactions Effective date: March 1, 2007

• IFRIC 12 Service Concession Arrangements Effective date: January 1, 2007

The Group will apply these standards and interpretations to future reporting periods, to which the compliance is mandatory. By today’s standard, no major impacts on the Bene Group’s financial and earnings situation are expected.

beNe AR 2006/07

2.2.1 scope of consolidationThe consolidated financial statements include the Bene AG and their subsidiary companies. “Subsidiary compa-nies” are companies, in which the Bene AG directly or indirectly exerts more than 50 % of the voting rights of a company and consequently influences on the company’s finance and business policy and benefits from its activities. Subsidiaries are fully consolidated as from the date of acquisition i. e. as from the date, on which the company becomes as subsidiary to Bene. Companies are excluded from the scope of consolidation as from the date, on which a majority influence does no longer exist.

Jointly controlled entities (50 % interest) with equal shares of voting rights are stated according the pro-quota consoli-dation in the consolidated financial statements until such entities are no longer jointly controlled.

Entities, which are not controlled but on which Bene exerts a significant influence (interest less than 50 %) are always reported pursuant to the equity method.

The following companies have been included in the con-solidated financial statements:

2.2 PRiNCiPles oF CoNsolidATioN

Name in %share

in € 000equity

in € 000Annual profit/

loss

Method ofconsolidation

localcurrency

BENE AG, Waidhofen/Ybbs 63,538 6,996 HOLDING EUR

BENE London plc, London 66.67 2,688 1,579 FULL GBP

BENE Bratislava spol.s.r.o, Bratislava 100 363 74 FULL SKK

BENE Budapest Kft., Budapest 100 406 37 FULL HUF

BENE Praha spol.s.r.o, Prag 100 69 -3 FULL CSK

BENE Ljubljana d.o.o., Laibach 100 214 0 FULL SIT*

BENE Warszawa Sp.z o.o., Warschau 100 -265 -226 FULL PLZ

BENE Moscow OOO, Moskau 100 3,652 3,341 FULL RUB

BENE Romania S.R.L, Bukarest 100 297 -41 FULL ROL

BN Factory S.A., Krosno 50 859 1 QUOTE PLZ

Bene Innovation GmbH, Waidhofen/Ybbs 100 35 0 FULL EUR

BENE Sofia EOOD, Sofia 100 -17 -19 FULL BGN

BENE Office Furniture Ireland Ltd., Dublin 100 88 -12 FULL EUR

BENE Kiev LLC, Kiev 100 3 -6 FULL UAH

Bene Deutschland GmbH, Frankfurt am Main 100 2,046 -276 FULL EUR

Objektform Planen und Einrichten München GmbH, München 100 292 42 FULL EUR

Objektform Planen und Einrichten GmbH, Hamburg 100 399 53 FULL EUR

Objektform Planen und Einrichten GmbH, Frankfurt am Main 100 791 -13 FULL EUR

Objektform Büroeinrichtungen GmbH, Aschaffenburg 100 507 225 FULL EUR

Planquadrat Planung und Bürodesign GmbH, Hamburg 100 81 7 FULL EUR

Objektform Planen und Einrichten GmbH, Bonn 100 473 301 FULL EUR

Enterprise Gesellschaft für Büroeinrichtungen mbH, Frankfurt am Main 100 -71 -2 FULL EUR

Till GmbH, Villingen/Schwenningen 100 175 -128 FULL EUR

Till Consult GmbH, Villingen/Schwenningen 100 91 -1 FULL EUR

BENE Consulting GmbH, Waidhofen/Ybbs 49.5 210 60 AT EQUITY EUR

BENE Consulting COD GmbH, Waidhofen/Ybbs 49.5 - - AT EQUITY EUR

BENE Consulting GmbH, Frankfurt am Main 46.53 - - AT EQUITY EUR

BENE Consulting Strategic Facility Management GmbH, Wien 49.5 - - AT EQUITY EUR

* local currency EUR as of Jan. 01, 2007

beNe AR 2006/07

in € 000 Jan. 31, 2007 Jan. 31, 2006

Current assets 825 1,183

Non-current assets 417 146

Total assets 1,243 1,329

Current liabilities 384 478

Revenues 1,739 1,143

Expenditures -1,739 -1,175

Gross profit / loss from sales 0 -32

Financial result 2 1

Result from regular business operation 1 -31

Taxes on Income 0 0

Net income 1 -31

beNe AR 2006/07

Including the parent company, the scope of consolidation comprises 23 (2006: 18) fully consolidated companies.

The increase in number of the fully consolidated compa-nies results from the foundation of subsidiaries in Kiev, Dublin and Sofia as well as from the acquisition of the two TILL companies as of November 9, 2006 (see point 3). The four Bene-Consulting companies are consolidated at equity (2006: 4) (see point 4.4).

One company (2006: 1), the BN Factory S.A., in which the Bene AG holds an interest of 50 % is reported at pro-quota consolidation (in the course of the business year 2006/07, the BENE Nowy Styl S.a. changed its name to BN Factory S.A.). The BN Factory S.A. is a joint venture in Poland, which develops and produces office furniture.

The Group’s share in assets, liabilities, revenue and ex-penditures of the joint venture as of January 31, 2007 and January 31, 2006 is as follows:

2.2.2 Reporting dateThe consolidated financial statements were compiled as of January 31, 2007. Thus, the reporting date corresponds to the Bene AG parent company’s reporting date.

The reporting date is not completely consistent with the balance sheet dates of the local annual financial state-ments included in the consolidated financial statements. In case of significant business transactions or events oc-curring in between these reporting dates, adjustments are made in accordance with IAS 27.27. The balance sheet date of the following companies (De-cember 31, 2006) differs from the consolidated financial statements as of January 31, 2007: BENE Moscow OOO, BENE Romania S.R.L, BENE Kiev LLC, BENE Sofia EOOD and BN Factory S.A.

In the previous business year, the following subsidiaries’ accounts were based on the different local balance sheet date December 31, 2005 deviating from January 31, 2006: BENE Warszawa Sp.z o.o., BN Factory S.A., BENE Mos-cow OOO, BENE Ljubljana d.o.o, BENE Bratislava spol s.r.o, BENE Budapest Kft. and BENE Romania S.R.L.

2.2.3 Method of consolidationCapital is consolidated according to the acquisition meth-od, allocating the acquisition costs of purchased shares to the proportionate present value of the acquired assets and liabilities. The remaining difference is stated as goodwill. In case of unfavourable differences, identified assets, liabilities and contingencies are reassessed according to IFRS 3. Any remaining unfavourable differences are charged to the income statement. The item “minority inter-ests” reports the amount of equity share held by minority interests and the income of consolidated companies.

If the Group acquires minority interests, the difference between purchase price and book value of the minority in-terest is directly recorded under retained earnings without effect on net income. Receivables, loans, liabilities and contingencies between the companies included in the consolidated financial state-ments are set off. In the consolidated income statement, expenses and revenue from intra-group trade are set off. There were no interim results from intra-group transactions between fully consolidated companies.

beNe AR 2006/07

In preparing the Group’s financial state-ments, it is necessary to estimate certain figures and make assumptions that influence on the accounted assets and liabilities, the declaration of other obligations as at the balance sheet date and the reporting of revenues and expenses during the reporting period. The actual figures may differ from these estimates, however the Management Board is of the opinion that no essential negative devia-tions in the consolidated financial statements of the near future are arising. Particularly, the valuation of obligations to employees is based on assumptions with regard to the discount factor, the retirement age and the labour turnover. The param-eters applied during the reporting period are shown under point 4.12 obligations to employees.

At least once a year, the Group checks if there is any impairment of goodwill. This requires an estimate of the use value of the cash generating units, to which goodwill is allocated. For estimation of the use value, the Group estimates the prospective future cash flows of the cash generating units and defines an appropriate discount rate to determine the cash value of these cash flows. The parameters applied for determining the use value are explained under point 4.1 intangible assets and goodwill.

Furthermore, variable purchase price components for capital expenditures in the financial year 2006/07 were included in the assessment of goodwill. If, in the future, there should be any change of the underlying assump-tions, the amount of the determined goodwill could change. (see point 3)

The capitalisation of deferred tax assets is based on tax budgets according to the subsidiaries’ business plans. If an existing loss carried forward based on these prognoses will most likely not be used in an appropriate period of 3 – 5 years, it is not capitalised. The amount of non-capital-ised loss carried forward is further detailed under point 4.5 taxes on income.

2.3 JudGeMeNTAl deCisioNs ANd uNCeRTAiNTies FRoM esTiMATes

beNe AR 2006/07

2.4.1 Currency translationThe consolidated financial statements are prepared in euro, the Group’s functional and reporting currency. Each company within the Group determines its own functional currency. The items stated in the individual financial state-ments of the different companies are valued on the basis of this functional currency. Foreign currency transactions are initially translated at the exchange rate between the functional currency and the foreign currency valid on the date of the business transaction. As of the reporting date, monetary assets and liabilities in foreign currencies are converted to the functional currency. Currency conversion differences are stated in the periodical result.

In the business year 2006/07, exchange gains in the amount of TEUR 471 (2005/06: TEUR 378) and exchange losses totalling TEUR 482 (2005/06: TEUR 166) were recognised in the income statement.

Non-monetary items, which are valued at historical acquisition or production costs in a foreign currency, are converted at the exchange rate applicable on the day of the business transaction.

Based on the concept of functional currency, the annual financial statements of foreign subsidiaries are translated to euro. For all subsidiaries, this is their respective national currency, since the companies operate independently with regard to financial, economical and organisational mat-ters. At the balance sheet date, the assets and liabilities of these subsidiaries are translated into euro. Equity is converted at historical rates. Revenues and expenses are converted at the business year’s weighted average rate. Differences arising from currency conversion are stated as separate item of the equity. In the event of disposal of a foreign entity, its cumulative amount recorded under equity is closed with effect on net income.

2.4.2 intangible assetsInitially, intangible assets are stated at acquisition or production costs. The acquisition costs of an intangible asset, which has been acquired at a company merger, correspond to its fair value at the time of acquisition. After the initial capitalisation, the intangible assets are valued at acquisition or production costs less accumulated amortisa-tion and accumulated impairment expenses. Intangible as-sets are amortised on a straight line basis over their useful life. The amortisation period and the amortisation method are subject to yearly reviews.

Self-created intangible assets, with the exception of development costs, are not capitalised. Related costs are charged to the income statement for the period, in which they arise.

Intangible assets, of which the useful life is not determin-able are not amortised on a regular basis but are subject to an impairment test at least once a year or if facts or circumstances point to a possible impairment of the book value. In addition, in the reporting period, these assets are reviewed with regard to the justification of an unlimited useful life.

The expected useful life of intangible assets is assumed to range between 1 and 10 years. a) Goodwill

IFRS 3 was not applied to business combinations before March 31, 2004. Goodwill acquired in the past has been valued at acquisition costs less accumulated amortisa-tion and possible accumulated impairment expenses. The amortisation period has been determined at the time of acquisition, taking the individual situation into account, and ranges between 10 and 15 years. In accordance with the temporary arrangements of IFRS 3, the scheduled amor-tisation is discontinued as of the business year 2003/04 and the accumulated amortisations are set off against acquisition costs.

IFRS 3 was adopted for business combinations in the past business year. In accordance with this standard, goodwill is calculated as a residual amount from acquisition costs and the fair value of identifiable assets, liabilities and con-tingencies. As of the date of acquisition, goodwill acquired in the context of business combinations is assigned to the cash generating units or groups of cash generating units, which benefit from the synergy effects of the business combination.

2.4 ACCouNTiNG ANd VAluATioN PRiNCiPles

beNe AR 2006/07

Within the Bene Group, the legally independent company units constitute individual cash generating units.

A resulting goodwill is no longer amortised on a sched-uled basis but is, at least once a year or if incidents or circumstances point to a possible decrease in book value, subject to an impairment test.

A possible impairment is determined by the comparison of the realisable amount of the cash generating unit (group of cash generating units) with the book value of goodwill. If the realisable amount is lower than the goodwill’s book value, an impairment expense is recorded. Impairment expenses for goodwill can not be recovered in subsequent periods. Thus, after the initial recognition, goodwill or the company value is stated at acquisition costs less accumulated impairment expenses.

In the event of negative goodwill resulting from the comparison of acquisition costs and fair value of assets, liabilities and contingencies of the purchased company, the identified assets, liabilities and contingencies are reas-sessed pursuant to IFRS 3. Any remaining unfavourable differences are charged to the income statement.

b) Research and development costs

Research costs are recorded as expenditure in the period, in which they have arisen. An intangible asset from development, in the context of an individual project, is only shown if the company can prove the technical feasibility to complete the intangible assets for internal use or for sale and the intention to use or to sell it. Furthermore, the Company must prove the generation of future economic benefits through the asset, the availability of resources to complete the asset and the ability to reliably determine the intangible assets development costs.

After the initial recognition of development costs, the acquisition cost model is applied, according to which the asset is stated at acquisition costs less accumulated amortisations and accumulated impairment expenses. The capitalised amounts are depreciated over the period, for which sales can be expected from the respective project. The useful lives and the amortisation methods are reviewed at the end of each business year. Necessary changes are considered as changes from estimates.

c) Rights and licences

Amounts paid for concessions, industrial property rights and similar rights are capitalised and are amortised on a straight line basis over the expected useful life. The expected useful life ranges between 1 and 10 years.

beNe AR 2006/07

2.4.3 Property, plant and equipmentProperty, plant and equipment are recorded at acquisition or production costs less accumulated amortisation and ac-cumulated impairment expenses. The acquisition costs of assets comprise the purchasing price including import du-ties and non-reimbursable taxes and all other direct costs arising from the asset’s transport to the location of its use and from making it available for its intended operation. In addition, acquisition and production costs include costs for replacement of parts of an asset at the time, when such costs arise, if recognition criteria are fulfilled. Expenses arising after the asset’s start of operation, such as repairs, current maintenance and service are usually recorded in the period, in which they have accrued.

In the case of barter trades, valuation is at fair value un-less there is no economic substance to the transaction or neither the fair value of the asset received nor of the asset given is reliably measurable.

Ordinary straight-line amortisation is based on the expect-ed useful lives. The residual values, the useful lives and the amortisation method are reviewed periodically in order to ensure that these correspond to the asset’s expected economic use.

Expected useful lives:

Buildings 25 – 33 yearsTechnical installations and machinery 3 – 13 yearsPlant and business equipment 1 – 13 years

Assets not yet ready for operation are reported under assets under construction and valued at acquisition or production costs. Acquisition or production costs are the amount of cash or cash equivalents paid for the acquisition or the production of an asset or the fair value of another type of compensation at the time of acquisition or produc-tion.

An asset is deleted either at the time of disposal or if no more economic benefit is expected from its further use or sale. If an asset is sold or disposed of, the acquisition cost and the accumulated depreciation are written off and a possible profit or loss is reported with effect on income.

All leasing contracts concluded by the Bene Group are exclusively operating leasing agreements (see point 7.5).

2.4.4 borrowing costs Costs of debt are stated as expenditure in the period, in which they have arisen.

beNe AR 2006/07

2.4.5 impairmentsProperty, plant and equipment including goodwill are reviewed with regard to indicators on impairment on each balance sheet date. Goodwill and intangible assets with undefined useful life are subject to an impairment test at every balance sheet date without any evidence. The Group’s realisable amount for an asset serves as basis for such an impairment test. It corresponds to the higher amount of use value or fair value less costs of sale.

The use value of an asset corresponds to the cash value of the estimated future cash flows from its continued use, based on a 3 years planning and its sale at the end of the useful life on the basis of a usual and to the specific risks of the asset’s value adapted interest rate before tax. If no cash flow can be determined for an individual asset, the determination of the use value is based on the respec-tive cash generating unit. Within the Bene Group, each legally independent company unit constitutes an individual cash generating units.

The fair value less costs of sale is the amount achievable through the sale of an asset or a cash generating unit in a transaction at market conditions between knowledgeable and willing parties after deduction of costs of sale. If the realisable amount is lower than the asset’s book val-ue, impairment expenses corresponding to the difference amount are charged to the income statement. Impairment expenses are reported in the profit and loss statement under the position of “amortisation and depreciation of intangible assets and plant, property and equipment”.

If impairment ceases to exist – except for goodwill (see point 2.4.2) – this leads to a write-up to the lower value of amortised costs and realisable amount. After a write-up has been made, the amortisation expense has to be adjusted in future reporting periods, in order to prorate the asset’s adjusted book value less possible remaining book value systematically over its remaining useful life.

2.4.6 investments in affiliated companiesInvestments in affiliated companies are reported according to the equity method. An affiliated company is a company, on which Bene exerts a significant influence and which is neither a subsidiary nor a joint venture.

According to the equity method, shares in an affiliated company are stated in the balance sheet at acquisition costs plus changes of the Group’s share in net assets of the affiliated company, which were arising after the acqui-sition. Goodwill related to an affiliated company is included in the book value of the share and is not amortised on a scheduled basis. When applying the equity method, the Group determines whether additional impairment expendi-ture is required with regard to the Group’s net investment in the affiliated company.

The income statement includes the Group’s share in the net income of the affiliated company. Any changes in the affiliated company’s equity are likewise directly recorded in the Group’s equity and – if necessary – included in the schedule of changes in equity.

beNe AR 2006/07

2.4.7 Financial assetsWithin the Bene Group, financial assets are principally classified as “available for sale”. At the time of acquisition, financial assets are stated at fair value, in later periods they are reported at the respective updated fair value, whereas changes in value are shown in the equity, not affecting net income. Non-quoted equity instruments, for which the fair value cannot be reliably determined, are valued at amortised costs. The fair values of securities are based on the market price or on the market value published by the custodian bank as of the balance sheet date. At the date, on which the finan-cial asset is being written off or on which an impairment is detected, the previously in equity recognised accumulated profit or loss is reported in the profit and loss statement. Write-ups for equity instruments classified as available for sale are not stated in the periodical result. Write-ups for liability instruments are recorded in the income statement if the increase in current value is objectively resulting from an event, which was occurring after the reporting of impair-ment in the income statement.

In the event of objective indications that an impairment of an unquoted equity instrument, which is not stated at fair value since its fair value cannot be determined reliably, has occurred, the amount of impairment corresponds to the difference of the financial asset’s book value and the cash value of the estimated future cash flow, which are discounted at the current market return rate of a compa-rable financial asset.

The option of assessment of the financial assets at fair value through profit and loss is not exercised. Financial assets and other financial assets are reported as of their respective date of fulfilment.

2.4.8 loans and receivablesLoans and receivables are non-derivative financial instru-ments with fixed or determinable payments, which are not quoted in an active market. Such assets are carried at amortised costs, applying the effective yield method. Gains and losses are stated in the period under review if the loans or receivables are written off or depreciated and in the context of amortisation.

In the event of an objective indication on an impairment of loans and receivables carried at amortised costs, the amount of loss is resulting from the difference between the asset’s book value and the cash value of expected future cash flows (with the exception of future not yet incurred loan losses), discounted at the original effective interest rate of the financial asset (i. e. the initially determined inter-est rate).

The book value of the asset is reduced by using an adjust-ment account. The impairment loss is recognised in the income statement.

Financial assets of individual importance are specifically reviewed with regard to impairment. Assets of non-mate-rial importance are subject to an individual impairment test or are reviewed together with other assets of comparable default risk.

If the amount of the value adjustment decreases in one of the following reporting periods and if this decrease is objectively resulting from a circumstance arising after the recognition of impairment, the earlier stated value adjust-ment is reversed. The write-up amount is limited to the amortised costs at the time of write-up. The write-up is recognised in the income statement.

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2.4.9 de-recognition of financial assets A financial asset (respectively part of a financial asset or part of a group of similar financial assets) is derecognised, if one of the following conditions is fulfilled:

- The contractual rights to cash flows from a financial asset have expired

- The Group retains the contractual rights to cash flows from financial assets, however accepts a contractual obligation to pay cash flows without major delay to a third party in the context of an agreement complying with the conditions in IAS 39.19 (“pass-through ar-rangements”)

- The Group has ceded its contractual rights to cash flows from a financial asset:

(a) basically, the Group has ceded all risks and op-portunities related to the possession of the financial asset or

(b) basically, the Group has neither ceded nor retained all risks and opportunities related to the possession of the financial asset, but has ceded the authority to dispose of the asset.

If the Group cedes its contractual rights to cash flows from a financial asset and basically, does neither cede nor retain all risks and opportunities related with the possession of such asset and likewise retains the authority to dispose of the assigned asset, the Group still carries the ceded asset to the extend of its continuing commitment.

2.4.10 Finished goods, work in progress, raw materialsInventories, including work in progress and not yet invoice-able services are valued at acquisition or production costs or at the lower net realisable values after value adjustments for obsolete or slow moving items. The net realisable value is the achievable sales prices less costs of completion and necessary marketing and distribution costs. Costs are determined on the basis of the FIFO method. Production costs of finished goods and work in progress also include related fixed and variable overheads. Unrealis-able inventories have been fully written off. Not yet invoice-able services are stated at production costs.

2.4.11 Cash and short-term financial capital Cash and short-term financial resources in the balance sheet include cash at banks, bank balances and short-term deposits with an original maturity of less than three months. For the purpose of the consolidated cash flow statement, means of payment and equivalents comprise the above defined means of payments and short-term deposits.

2.4.12 obligations to employees

a) Pension obligations

The Bene Group is obliged to pension payments to 33 employees after their retirement. These obligations are based on individual contractual agreements. These defined benefit obligations are covered by plan assets and the obligations are assessed annually by qualified and independent actuaries.

These obligations are recognised in accordance with IAS 19 by determining the cash value of the defined benefit obligation (DBO) and comparing it to the fair value of the plan asset as of the balance sheet date. In case of a defi-cit, a liability is recognised, in case of a surplus, an asset is reported. The calculation of the DBO is based on the projected unit credit method. This method refers to future payments, based on realistic assumptions, collected over the period, in which the benefit is earned by the employee. Any difference between the provision amount and the actual value (actuarial gain/loss) is recognised in equity with no effect on income.

Subsequent recognition of service time is averaged up to the time of non-forfeitability. As far as entitlements are non-forfeitable immediately after introduction or amendment, the subsequent recognition of service time is immediately reported with effect on net income.

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b) Severance payment obligations

Due to legal regulations, the Group is obliged to pay a lump-sum to all Austrian employees with a service contract dated before January 1, 2003 in case of termination of the employment contract by the employer or at retirement. The severance payment depends on the length of service and the applicable remuneration and ranges between two and twelve monthly salaries. Provisions are set aside for this obligation.

Provisions for this obligation are calculated according to the projected unit credit method. The cash value of the future payments is collected over the period, in which the entitlement arises up to its maximum amount (25 years). Any difference between the provision amount based on assumptions and the actual value (actuarial gain/loss) is recognised in equity with no effect on the income.

Subsequent recognition of service time is averaged up to the time of non-forfeitability. As far as entitlements are non-forfeitable immediately after introduction or amendment, the subsequent recognition of service time is immediately reported with effect on net income.

The Group pays monthly contributions of 1.53 % of the remuneration to an employees pension fund (Mitarbeit-ervorsorgekasse), for employees, whose employment started after December 31, 2002. These amounts are invested in an account of the employee and are paid out at termination of the employment contract or the entitlement is passed on. The Bene Group’s obligation is limited to the payment of amounts, which are recognised in the fiscal year, in which they have incurred.

c) Other long-term obligations to employees

Based on Austrian collective agreements, the Group is committed to anniversary payments to employees with a certain service time (more than 15 years). A provision has been set aside for this obligation. The valuation of this provision is based on the methods applied to performance related post-employment obligations. Actuarial profits or losses are immediately recognised in the income state-ment.

2.4.13 other provisions (long-term and short-term)A provision is set aside if the Group has a present (legal or constructive) obligation that has arisen as a result of a past event, the outflow of resources to fulfil the obliga-tion is probable and the amount of the obligation can be estimated reliably. If the Group expects a reimbursement for some or all of the expenditure to settle a provision (i. e. from an insurance contract), the reimbursement is recognised as separate asset if it is virtually certain that the reimbursement will be received.

The expenditure for the provision is stated in the profit and loss statement after deduction of the reimbursement. If the impact of the interest effect is substantial, provisions are discounted at an interest rate before tax, which, if necessary, reflects the obligation’s specific risks. In case of discounting, the time related increase of the provision is stated as interest expenditure.

2.4.14 Taxes on income, deferred taxes The income tax charge is based on the year’s profit and considers future tax assets and liabilities. The actual tax as-sets and tax liabilities for the current and the previous pe-riods are stated in the amount, in which a refund from the tax authority or a payment to the tax authority is expected. The amount is calculated on the basis of tax rates and tax regulations applicable on the balance sheet date. Actual taxes, which refer to items directly recognised in equity, are not reported in the income statement but are stated under equity.

Deferred tax assets and liabilities are calculated by apply-ing the balance sheet liability method. Future tax assets and liabilities reflect the tax effects of temporary differenc-es between the valuation of assets pursuant to the consoli-dated IFRS balance sheet and the tax amount stated. Deferred tax assets and liabilities are determined by using the expected tax rates for the taxable income applicable at the date, on which the temporary differences will be balanced. Therefore, tax rates (and tax regulations) that have been enacted or substantively enacted at the bal-ance sheet date are applied. The extent of deferred tax assets and liabilities reflects the tax consequences, which according to the company’s expectation would result on the balance sheet date if the book values of its assets and liabilities would be recovered or settled.

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Deferred tax assets and liabilities are recognised for all temporary differences regardless of when a reversal is likely to occur.

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax losses and unused tax credits, to the extent that it is probable that sufficient taxable profit will be available, against which the deductible temporary differences and the carry-forwards of unused tax losses and tax credits can be used, with the exception of:

• deferred tax assets from deductible temporary differ-ences resulting from the initial recognition of an asset or a liability of a business transaction, which is no business combination and, which at the time of the business trans-action neither influences on the annual result according to local Gaap nor on the taxable result, and

• deferred tax assets from taxable temporary differences arising in the context of shares in subsidiaries, affiliated companies and shares in joint ventures, if it is probable that the temporary differences will not reverse in the foreseeable future and no sufficient taxable profits are available, against which the temporary differences may be used.

On each balance sheet date, the Company reassesses the unrecognised deferred tax assets and the book value of deferred tax assets. Non-capitalised future tax assets are recognised to the extent, to which it is likely that future taxable profit will allow the use of deferred tax assets. In contrast, the book value of capitalised future tax assets is adjusted to the extent, to which it in no longer probable that in the future sufficient taxable profit for the use of capitalised future tax assets is available.

Future tax assets and liabilities are directly charged or credited to equity if the tax relates to items that are charged or credited in the same or in a different period directly to equity, including exchange rate differences aris-ing from the translation of inter-group loans. Deferred tax assets and deferred tax liabilities are set off, if a legally enforceable right to set off current tax assets against current tax liabilities and these deferred taxes relate to the same taxable entity and the same taxation authority.

2.4.15 Financial liabilities Financial liabilities are recognised in the amount actu-ally received. A premium, discount or other difference between the amount received and the amount repayable is realised over the term of financing according to the effective interest method and reported in the financial result (amortised costs). Profits and losses are stated in the period under review if debts are written off and in the context of amortisations.

2.4.16 Trade payables, other liabilitiesTrade payables are measured at fair value when trade payables arise. Subsequently, these liabilities are stated at amortised costs. Other liabilities are recognised at their amount payable.

2.4.17 de-recognition of financial liabilities A financial liability is derecognised when the obligation is met, cancelled or extinguished.

If an existing financial liability is exchanged for another financial liability of the same credit grantor, but which includes substantially different contract terms, or if the conditions of an existing liability are essentially changed, such an exchange or change is considered as de-recogni-tion of the original liability and recognition of a new liability. The difference between the respective book values is stated in the income of the reporting period.

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2.4.18 derivative financial instruments and hedges The Group does not use any derivative instruments.

2.4.19 Government grants and subsidies Government grants and subsidies are only reported if there is sufficient certainty that the grants will be received and that the Company fulfils the related conditions. Rev-enue-based grants are deferred in the balance sheet and released to the income statement to offset the related ex-penditure that they are intended to reimburse. If the grant relates to an asset, the fair value is credited to a deferred income account and is released to the income statement over the expected useful life of the relevant asset by equal annual instalments.

2.4.20 lease agreements Determining whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether fulfilment of the arrangement is dependent on the use of a specific asset or assets and whether the arrangement conveys a right to use the asset. Operating lease payments are recognised as expense in the income statement in the period in which they arise.

2.4.21 Recognition of expenses and revenue Revenue is recognised to the extent that is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue from sales of goods are stated when significant risks and opportunities of ownership have passed to the buyer.

Financing costs comprise interests arising from debt financing, similar expenses and charges. Revenue from financial investments includes realised interests, dividends and similar revenue resulting from the nature of financial assets as well as impairment losses and income from write ups. Interests are deferred on the basis of passage of time us-ing the effective interest method. Dividends are recognised when the distribution of dividends is decided.

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With the contract dated May 29, 2006, the Objektform Planen und Einrichten GmbH with its headquarters in Hamburg has acquired the business operation of Lebich Systembüro GmbH in Hanover. In the course of the acquisition, certain short-term and long-term assets assigned to the business operation as well as cus-tomer and distribution relations and certain contracts and offers were acquired respectively taken over. Receivables and liabilities as well as other liabilities were not taken over.

The fair value of the identifiable assets of Lebich System-büro GmbH at the time of acquisition and the correspond-ing book values shortly before the time of acquisition are as follows:

in € 000 Fair market value at time of acquisition

book value

Intangible assets 88 1

Property, plant and equipment 40 40

Inventories 21 21

150 62

3 ACquisiTioNsbeNe AR 2006/07

Goodwill from the take over of Lebich Systembüro GmbH amounts to TEUR 404 (see point 4.1.2). In addition to the fair value of the acquired assets, it represents the value of existing contacts, market presence and know-how.

Attributable costs for the acquisition of the Lebich System-büro GmbH (consisting of fixed and variable components) amounted to a total of TEUR 555. There was no outflow of funds, since the fixed purchase price component (TEUR 150) was recognised as assignment of receivables and the variable purchase price components were stated as liabilities (“other liabilities”).

In the preceding business year, consolidated sales include the Hanover site with TEUR 1,145 and the consolidated result with a loss of TEUR 6. No statement with regard to consequences from an acquisition as on February 1, 2006 can be made since only assets were taken over.

Furthermore, with the contract dated November 9, 2006, 100 % of the shares in the TILL Group, Villingen-Schwen-ningen (Germany) have been acquired. The company’s field of activity is sales and planning of office furnishings.

The fair value of the identifiable assets and liabilities of the TILL Gruppe at the time of acquisition and the corre-sponding book values shortly before the time of acquisition are as follows:

in € 000 Fair market value at time of acquisition

book value

Intangible assets 113 1

Property, plant and equipment 457 457

Non-current financial assets 55 55

Inventories 298 298

Receivables and other assets 1,062 1,062

Cash and cash equivalents 82 82

2,068 1,956

Long-term financial liabilities 250 250

Deferred tax liabilities 44 0

Trade payables 446 446

Current financial liabilities 583 583

Other liabilities 374 374

1,697 1,653

Acquired net assets 371 303

2,068 1,956

TEUR 112 for acquired customer relations were capital-ised in the context of initial recognition of the TILL Group. After consideration of deferred taxes, goodwill came to TEUR 630 for existing contacts, the market presence and the future synergy effects from the integration into the Bene Group (see point 4.1.2).

The attributable acquisition costs for the purchase of the TILL Group totalled TEUR 1,000 and were entirely paid at the time of acquisition. The outflow of funds is as follows:

The reported consolidated result was reduced by the loss of the TILL Group totalling TEUR 134.

If the acquisition had been realised already on February 1, 2006, sales would have been higher by TEUR 5,687 and the consolidated result would have been lower by TEUR 346.

in € 000

Funds acquired together with subsidiary 82

Outflow of funds -1,000

Actual outflow of funds -918

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4 NoTes To THe CoNsolidATed bAlANCe sHeeTbeNe AR 2006/07

4.1 iNTANGible AsseTs ANd GoodWill

intangible assets Rights andlicences

Capitaliseddevelopment costs

Goodwill deposits forintangible assets

Total

in € 000

Acquisition costs

as of Jan. 31, 2006 4,717 1,440 10,708 77 16,942

Additions 1,412 776 1,034 0 3,222

Changes in the scope of consolidation 67 0 0 0 67

Disposals -53 0 0 0 -53

Transfers -5 0 0 5 0

as of Jan. 31, 2007 6,138 2,216 11,742 82 20,178

depreciation and amortisation

as of Jan. 31, 2006 3,307 547 9,173 0 13,027

Amortisation 1,085 325 0 0 1,411

Changes in the scope of consolidation 63 0 0 0 63

Disposals -53 0 0 0 -53

as of Jan. 31, 2007 4,403 872 9,173 0 14,448

book value as of Jan. 31, 2006 1,410 894 1,535 77 3,916

book value as of Jan. 31, 2007 1,735 1,344 2,568 82 5,730

intangible assets Rights andlicences

Capitaliseddevelopment costs

Goodwill deposits forintangible assets

Total

in € 000

Acquisition costs

as of Jan. 31, 2005 3,699 973 10,708 3 15,382

Additions 1,405 467 0 52 1,924

Disposals -428 0 0 -3 -431

Transfers 40 0 0 26 66

Foreign currency effects 1 0 0 0 1

as of Jan. 31, 2006 4,717 1,440 10,708 77 16,942

depreciation and amortisation

as of Jan. 31, 2005 2,599 305 9,173 0 12,077

Amortisation 1,084 241 0 0 1,326

Disposals -428 0 0 0 -428

Transfers 50 0 0 0 50

Foreign currency effects 1 0 0 0 1

as of Jan. 31, 2006 3,307 547 9,173 0 13,027

book value as of Jan. 31, 2005 1,100 667 1,535 3 3,305

book value as of Jan. 31, 2006 1,410 894 1,535 77 3,916

4.1.1 intangible assetsAll intangible assets are amortised over the periods stated in section 2.4.3.

On January 31, 2007, the book value of capitalised development costs (in-house development of furniture programs) amounted to TEUR 1,344 (January 31, 2006: TEUR 894). The capitalised amounts are amortised over the period, in which sales from the respective projects are expected (normally 5 years). In the year under review, non-capitalisable development costs of TEUR 1,202 (2006: TEUR 1,045) were recognised in the positions “personnel expenses”, “other expenses” and “amortisation on intan-gible assets and plant, property and equipment”.

There are no intangible assets of undefined useful life within the Bene Group.

In the business year 2006/07, there was no evidence for impairment of intangible assets.

4.1.2 GoodwillOn January 31, 2007, goodwill of the Bene Group is as follows:

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in € 000 bene london bene deutschland oF Hamburg

Jan. 31, 2007 Jan. 31, 2006 Jan. 31, 2007 Jan. 31, 2006 Jan. 31, 2007 Jan. 31, 2006

Book value of goodwill 1,531 1,531 629 0 408 4

On the balance sheet date January 31, 2007, the recog-nised goodwill of TEUR 2,568 results on the one hand from the takeover of shares in the Bene PLC London in the previous business years and on the other hand from the acquisition of the TILL Group and the Lebich GmbH in the past business year (January 31, 2006: TEUR 1,535).

Goodwill arising from the acquisition of the TILL Gruppe and of the Lebich GmbH also include variable price com-ponents taken into consideration on the basis of current budgets (see point 3). In subsequent years, this can result in a change of goodwill.

The impairment test pursuant to IFRS 3 did not result in any impairment needs since the realisable value of all companies exceeds the book value. Within the Bene Group, the legally independent company entities are individual cash generating units. Thus, goodwill was fully allocated to the company in London, to BENE Deutschland GmbH and to the Objektform Planen und Einrichten GmbH in Hamburg.

The realisable amount of the cash generating units is determined on the basis of calculation of a use value by applying cash flow prognoses based on finance plans for a period of 3 years.

Depending on the individual market, the discount rate applied to the cash flow forecasts are 12 % for BENE London (2006: 9 %), 9 % for BENE Germany and OF Hamburg (2006: n. a.). The cash flows from BENE London are extrapolated by using an average growth rate of 8 % (sales increase) (2006: 8 %). This growth rate corresponds to the long-term, country specific, usual growth rate. The growth rate for BENE Germany and OF Hamburg is estimated at 8 %.

The cash flow forecasts are based on profit margins, which are determined by means of historical country spe-cific comparisons and market forecasts. The respective market developments are taken into account for determin-ing the increase in raw material prices.

The interest rate is calculated as a mixed rate of an aver-age loan rate and the Group’s expected interest on equity employed, thus taking into account the specific risk of the cash generating unit.

The management is of the opinion that no possible chang-es in the assumptions for determining the use value of a cash generating unit could lead to the fact that the book value of the cash generating unit substantially exceeds its realisable value.

Property, plant and equipment Property Plant and equipment other Totalin € 000

Acquisition costs

as of Jan. 31, 2006 30,763 16,882 21,096 68,740

Additions 263 1,089 2,577 3,930

Disposals -76 -1,063 -2,205 -3,343

Transfers -263 -288 618 67

Foreign currency effects 0 4 38 43

Changes in the scope of consolidation 0 0 1,215 1,215

as of Jan. 31, 2007 30,688 16,624 23,340 70,652

depreciation and amortisation

as of Jan. 31, 2006 18,044 9,103 14,518 41,665

Amortisation 722 1,144 2,166 4,033

Disposals -76 -1,067 -1,924 -3,067

Transfers -2 -101 112 9

Foreign currency effects 0 0 27 27

Changes in the scope of consolidation 0 0 755 755

as of Jan. 31, 2007 18,689 9,079 15,654 43,422

book value as of Jan. 31, 2006 12,719 7,779 6,577 27,075

book value as of Jan. 31, 2007 11,999 7,545 7,685 27,230

4.2 PRoPeRTy, PlANT ANd equiPMeNTbeNe AR 2006/07

Property, plant and equipment Property Plant and equipment other Totalin € 000

Acquisition costs

as of Jan. 31, 2005 30,918 15,916 21,261 68,095

Additions 64 1,304 2,417 3,785

Disposals -189 -358 -2,888 -3,434

Transfers -30 -5 251 217

Foreign currency effects 0 23 54 77

as of Jan. 31, 2006 30,763 16,882 21,095 68,740

depreciation and amortisation

as of Jan. 31, 2005 17,384 8,363 14,503 40,251

Amortisation 764 1,090 2,272 4,126

Disposals -104 -358 -2,556 -3,018

Transfers 0 0 274 274

Foreign currency effects 0 7 25 32

as of Jan. 31, 2006 18,044 9,103 14,518 41,665

book value as of Jan. 31, 2005 13,534 7,554 6,757 27,845

book value as of Jan. 31, 2006 12,719 7,779 6,577 27,075

beNe AR 2006/07

In the business year 2006/07, capital expenditure for property, plant and equipment came to TEUR 3,930 (2005/06: TEUR 3,785). The increase is mainly result-ing from rationalisation and expansion investments of the manufacturer Bene AG. In the reporting period, the largest individual investment was a bar processing centre in the amount of TEUR 303.

The other tangible assets include mainly operating instal-lations, operating and business equipment, car pool and EDP hardware.

In the period under review no impairment expenses were recognised. As in the reference period 2005/06, no fixed assets were pledged in the year under review (2006/07).

The investments in affiliated companies result from interests in the Bene Consulting companies, which were subject to disposal as of January 25, 2006. The Bene Consulting companies are carried at equity in the consolidated financial statements.

The recognition of investments in affiliated companies as of January 31, 2007 amounts to TEUR 210 (January 31, 2006: TEUR 85). The development of investments in affili-ated companies is as follows (in TEUR):

4.3 iNVesTMeNTs iN AFFiliATed CoMPANies

beNe AR 2006/07

in € 000

book value as of Jan. 31, 2006 85

+ proportionate net income 60

+ capital increase 40

+ contribution Bene AG 24

book value as of Jan. 31, .2007 210

In the past business year, short-term receivables of the Bene AG from the Bene Consulting Companies in the amount of TEUR 220 were converted into a loan with a term of 7 years and reported under the position “non-cur-rent financial assets”. Interests of the loan are based on usual market conditions. In addition, further short-term receivables of the Bene AG from the Bene Consulting companies amounting to TEUR 40 were recognised as capital increase and TEUR 24 were converted into an allowance.

All changes in the interest recognition of the Bene Con-sulting companies were not cash relevant.

Below, the summary of financial information on the Bene Consulting companies as of January 31, 2007:

in € 000 Jan. 31, 2007 Jan. 31, 2006

Current assets 2,665 1,198

Non-current assets 414 282

Total assets 3,079 1,480

Current liabilities 2,432 1,118

Non-current liabilities 223 190

Total liabilities 2,655 1,308

Revenues 3,515 2,591

Expenditures -3,394 -2,574

Annual profit 121 17

Proportionate annual profit bene AG 49.50 % 60 8

As of January 31, 2007, the result of Bene Consulting is reported in the consolidated profit and loss statement under the item „earnings from affiliated companies“. As of January 31, 2006, earnings of Bene Consulting were shown under „income from discontinued operation“.

On the balance sheet date January 31, 2007, non-current assets account for a total of TEUR 1,850 (January 31, 2006: TEUR 2,129). Basically, they consist of financial instruments available for sale in the amount of TEUR 1,544 (January 31, 2006: TEUR 2,129). Besides, there are loans to other companies in the amount TEUR 220 (January 31, 2006: 0) and other loans (mainly reinsurance for semi-retirement) of TEUR 86 (January 31, 2006: 0).

The financial instruments available for sale concern long-term securities and include mainly bond funds of domestic and foreign issuers with fixed and variable interest rates and no fixed due date. In addition, there are mixed funds with a maximum share portion of about 35 % in domestic and foreign emitters and which do not have any fixed due date. Interest rates as of January 31, 2007 ranged between 2.25 % and 6.50 % (January 31, 2006: 2.25 % and 6.50 %). For not publicly traded securities, the market value disclosed by the custodian bank was recognised.

At the closing date 2006/07, securities in the amount of TEUR 939 (January 31, 2006: TEUR 1,403) were pledged to two Austrian banks for partial securitisation of outstan-ding debts. In the reporting period, losses from changes in value of financial assets available for sale amounting to TEUR 13 (2005/06: TEUR 94) were recognised under the IAS 39 reserve. In the context of disposal, previously in the IAS 39 reserve recognised accumulated losses in the amount of TEUR 25 (2005/06: accumulated profit in the amount of TEUR 10) were charged to the income statement.

4.4 NoN-CuRReNT FiNANCiAl AsseTsbeNe AR 2006/07

1) Income taxes recognised in the conso-lidated profit and loss statement are as follows:

4.5 TAxes oN iNCoMebeNe AR 2006/07

in € 000 2006/07 2005/06

Actual taxes on income 3,046 2,138

Deferred tax income/expense from accrual and reversal of temporary differences 388 421

Taxes on income as reflected in the income statement 3,434 2,559

As of January 31, 2007, taxes on income include TEUR 722 of IPO related costs not affecting net income. The actual income tax expenses as of January 31, 2006 are based on transactions affecting net income.

The attributable income taxes on the directly under equity recognised amounts were likewise directly shown in the equity.

2) As of January 31, 2007, deferred taxes on income directly recognised in equity are as follows:

in € 000 2006/07 2005/06

Actuarial + profits / - losses severance payment provision -67 -66

Actuarial + profits / + losses pension payment provision -6 3

+ profits / - losses from assets available for sale 10 5

income tax expense / income taken to equity -62 -58

beNe AR 2006/07

3) The reconciliation of actual income tax expenses and the product of income for the period under review and the applicable tax rate of the Group for the years 2006/07 and 2005/06 are composed as follows:

in € 000 2006/07 2005/06

Earnings before taxes on income from continuing operations 12,386 10,344

Earnings before taxes on income from discontinued operation 0 37

earnings before taxes 12,386 10,381

Income tax expense at Austrian tax rate of 25 % 3,096 2,595

Non-deductible expenditures 391 328

Non-taxable income -221 -38

Deductible amortisation of shareholdings 0 -941

Taxable profits from foreign subsidiaries 0 199

Tax effects from previous years -61 0

Utilisation of not recognised loss carry-forwards -200 -118

Non-capitalisation of loss carry-forwards 200 645

Difference resulting from different local tax rates -73 0

Withholding taxes from dividend payments 156 0

Difference resulting from different Group tax rates 146 -97

income tax expense at effective income tax rate of 27.73 % (compared to 24.65 % in 2005/06)

3,434 2,573

Income tax expense from continuing operations 3,434 2,559

Income tax expense from discontinued operations 0 14

income tax expense recognised in the Group‘s income statement 3,434 2,573

in € 000 Jan. 31, 2007 Jan. 31, 2006

deferred income tax liabilities

Capitalised self-developed property, plant & equipment -22 -80

Capitalised development costs -336 -223

Buildings -187 -192

Intangible Assets -42 0

Other fixed tangible assets -5 0

Assets available for sale -63 -37

Total deferred income tax liabilities -655 -532

deferred income tax assets

Buildings 150 146

Receiveables 0 7

Finished goods 122 0

Severance payment provision 2,566 2,291

Pension payment provision 331 358

Anniversary payment provision 35 47

Other provisions 1 222

Prepayments received 1 0

Liabilities 1 0

Valuation of shareholdings 1,655 2,190

Total of deferred income tax assets 4,860 5,262

Loss carry-forwards 3,467 3,307

+ deferred income tax assets / - (-liabilities) 7,672 8,036

Recognised in the consolidated balance sheet as follows:

Deferred tax assets 7,720 8,036

Deferred tax liabilities -47 0

balance deferred tax assets / liabilities 7,672 8,036

4) On the balance sheet date, future deferred tax assets and liabilities are as follows:

In accordance with IAS 12, future deferred tax assets in the amount of TEUR 3,467 on existing losses carried forward in the amount of TEUR 14,301 (2005/06: TEUR 13,227) were capitalised since these may be set off against future taxable profits.

Within the Bene Group, deferred tax assets arising from losses carried forward in the amount of TEUR 27,034 (2005/06: TEUR 12,201) were not capitalised, since their use is not sufficiently secured. They include losses carried

forward in Germany for corporate tax purposes in the amount of TEUR 13,151 and losses carried forward for local business tax purposes amounting to TEUR 12,294.

No income tax related consequences from the distribution of dividends by the Bene Group to the shareholders are resulting neither for the business year 2006/07 nor for the reference period 2005/06.

beNe AR 2006/07

beNe AR 2006/07

4.6 iNVeNToRies

in € 000 Jan. 31, 2007 Jan. 31, 2006

Raw materials and supplies 4,784 3,810

Semi-finished goods 280 282

Finished goods and products 8,616 6,358

Prepayments on inventories 1,009 990

inventories 14,688 11,440

Inventories were assessed at acquisition or production costs. Prepayments made on inventories are related to prepayments for deliveries of goods.

4.7 ReCeiVAbles ANd oTHeR AsseTs

in € 000 Jan. 31, 2007 Jan. 31, 2006

Trade receivables 33,443 26,660

Receivables from associates 13 250

Other receivables 6,558 5,169

Accrued and deferred items 1,517 947

Receivables 41,532 33,026

Trade receivables do not bear interests and in general, have a maturity of 30 – 90 days. The recognised trade receivables include value adjustments of TEUR 1,422 (January 31, 2006: TEUR 1,290). Impairment losses in the reporting period were recognised in the consolidated income statement under other operating expenses.

As of January 31, 2007, other receivables amounting to TEUR 5,457 arise from receivables from Austrian and foreign finance authorities (refund of sales taxes) (January 31, 2006: TEUR 2,104). All recognised trade receivables, other assets and receiv-ables have a maximum maturity of 1 year.

4.8 liquidiTy ANd CuRReNT FiNANCiAl AsseTs

in € 000 Jan. 31, 2007 Jan. 31, 2006

Short-term securities available for sale 18,385 1,613

Cash 210 97

Cash at banks 22,597 17,831

liquidity and current financial assets 41,192 19,541

Cash at banks earns variable interests on overnight ac-counts. Investments in short-term securities are made for different periods of time, which, depending on the respective cash requirements, may vary between one day and three months. They earn interests at floating rates for short-term bank deposits. For not publicly traded securities, the value disclosed by the custodian bank was recognised. In the period under review, profit from changes in value of short-term securities available for sale in the amount of TEUR 38 (2005/06: losses of TEUR 4) were recognised in the IAS 39 reserve. In the context of disposal of assets, accumulated earnings of TEUR 10 (2005/06: TEUR 59) previously recognised in the IAS 39 reserve are reported in the income statement.

The fair value of cash and cash equivalents corresponds to TEUR 41,192 (January 31, 2006: TEUR 19,541).

As of January 31, 2007, the Group has non-utilised credit lines of TEUR 25,345 (January 31, 2006: TEUR 16,035), for the utilisation of which all necessary requirements have already been met.

As of the balance sheet date, there were no restraints on disposal of cash and cash equivalents and short-term financial assets.

beNe AR 2006/07

beNe AR 2006/07

On January 25, 2006, the Management of the Bene Group publicly announced its decision to sell respectively to reduce its majority interest in Bene Consulting to a minority interest. As of January 31, 2006 the shares in Bene Consulting were stated as affiliated company at equity in the consolidated financial statements

(see point 4.3 „investments in affiliated companies”).

The Bene Consulting comprises the following companies, in which the Bene Group held the following shares as of the respective balance sheet dates:

4.9 disCoNTiNued oPeRATioN

Company Jan. 31, 2006 Jan. 31, 2007

BENE Consulting GmbH, Waidhofen/Ybbs 49.50 % 49.50 %

BENE Consulting Corporate Office Development GmbH, Waidhofen/Ybbs 49.50 % 49.50 %

BENE Consulting GmbH, Frankfurt am Main 46.53 % 46.53 %

BENE Consulting Strategic Facility Management GmbH, Wien 49.50 % 49.50 %

The result of Bene Consulting, which was reported under the item „income from discontinued operation“ is as follows:

in € 000 2006/07 2005/06

Revenues 0 2,591

Expenditures 0 -2,565

Gross profit from sales 0 26

Financial result 0 3

Earnings before taxes from discontinued operation 0 29

Tax expense from operating activities of discontinued operation 0 -12

operating profit allocated to discontinued operation 0 17

Earnings before taxes from disposal of discontinued operation 0 8

Taxes from disposal of discontinued operation 0 -2

Earnings after taxes from disposal of discontinued operation 0 6

Profit allocated to discontinued operation 0 23

As of January 31, 2007 the equity method is applied and consequently the Bene Consulting’s result is stated under „earnings from affiliated companies“

As of January 31, 2006 Bene Consulting’s net cash flow included:

in € 000 2006/07 2005/06

Net Cash flow from operating activities 0 608

Net Cash flow from investing activities 0 -49

Net Cash flow from financing activities 0 -475

Net cash inflow (outflow) 0 84

Cash and cash equivalents at beginning of period 0 353

Cash and cash equivalents at end of period 0 437

As of January 31, 2006, earnings per share from the dis-continued operation came to (diluted = non-diluted):

in € 000 2006/07 2005/06

Earnings per share from discontinued operation 0.000 0.001

4.10 issued CAPiTAl ANd CAPiTAl ReseRVes

issued and fully paid in in thousands € 000

as of Jan. 31, 2006 18,750 18,750

Issue of 5,597,352 shares (IPO) 5,597 5,597

as of Jan. 31, 2007 24,347 24,347

On November 3, 2006, the Bene share was quoted for the first time at the Vienna stock market and since November 20, 2006 is part of the ATX prime market and of the Wie-ner Börse Index. The issue price of ordinary shares was EUR 5.50. In the course of the IPO, a total of 5,597,352 new shares with a calculated amount of EUR 1.00 were issued. Altogether, the transaction volume, which included the old shares, mainly from the financial investor Sarpe-don, the new shares from the capital increase and the greenshoe option, amounted to 12,830,977 shares.

From the total transaction costs, which were arising in the course of the IPO, TEUR 2,888 were set against the capital reserve. The allocated income taxes in the amount of TEUR 722 were also recognised in equity with effect on the income (see point 4.5). This results in a net amount of TEUR 2,166 stated in the equity.

Considering the, for the reporting period proportionately included, discounts from employees shares totalling TEUR 16 (see point 4.11 and point 5.4), a total effect in the amount of TEUR 2,150 is arising.

Capital reserves consider additional payments made by the shareholders as well as the portion of costs of the newly issued shares in the overall costs of the IPO. In the course of the IPO an agio of TEUR 25,058 was booked to the capital reserve. The IAS 39 reserve recognises changes of the fair value of assets available for sale. In the business year 2006/07, a loss in the amount of TEUR 15 was transferred from equity to the periodical result.

The adjustment item from currency translation serves to recognise differences resulting from the conversion of financial statements of foreign subsidiaries.

For more information on issued capital and capital reserves see summary of changes in equity.

Bene AG’s authorised capital in the amount of TEUR 24,347 is divided into 24,347,352 no par value shares.

The performance of common shares is as follows:

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In the course of the IPO, Austrian and foreign employees, with a valid employment status on October 19, 2006, were granted the opportunity to buy Bene share at preferential conditions. In the context of the employees’ action, all authorised em-ployees were granted a discount of 20 % on the condition of a 2 years lock-up period. If the employee quits or retires for unjustified reason, he must repay the 20 % discount.

In total, employees of the Bene Group purchased 117,861 shares. Considering the issue price of EUR 5.50 per share, this accounts for a total amount of TEUR 130. This sum is prorated under other personnel expenses over the lock-up period of 2 years (see point 5.4). In the business year 2006/07 it amounts to TEUR 16.

4.11 eMPloyees sHARe oWNeRsHiP PlAN

4.12 liAbiliTies To eMPloyees

in € 000 Jan. 31, 2007 Jan. 31, 2006

Provisions for pension payments 1,948 2,175

Provisions for severance payments 9,668 8,486

Provisions for anniversary payments 552 534

liabilities to employees 12,168 11,195

2) Items not affecting income included in the earnings and expenses summary:

4.12.1 Provisions for pension paymentsDue to individual contractual agreements, some group-companies are obliged to additional pension payments to employees as of their retirement. The amount of this pension is based on the service time and the remuneration at the time of retirement.

As of January 31, 2007, 33 employees were eligible to future pension payments (January 31, 2006: 32).

The following tables show the details of expenses for pension payments recognised in the consolidated income statement and of the amounts for the respective plans car-ried in the consolidated balance sheet.

1) Expenses for pensions included in personnel expendi-ture:

beNe AR 2006/07

in € 000 Jan. 31, 2007 Jan. 31, 2006

Current service costs -301 -302

Interest costs arising from obligations -136 -135

Expected yield from plan assets -33 -36

Effects from compensation payments -427 -736

expenses in fiscal year -897 -1,208

in € 000 Jan. 31, 2007 Jan. 31, 2006

Actuarial profits (+) / losses (-) from plan assets -8 -30

Actuarial profits (+) / losses (-) from Defined Benefit Obligation -16 40

Total actuarial profits (+) / losses (-) in period -24 10

Recognised actuarial profits (+ ) / losses (-) as of February 1 -185 -195

Total actuarial profits (+) / losses (-) in period -24 10

Recognised actuarial profits (+) / losses (-) as of January 31 -208 -185

3) Provisions for defined benefit obligations recognised in the balance sheet:

in € 000 Jan. 31, 2007 Jan. 31, 2006

obligation, not financed from funds 1,555 1,785

obligation, (partly) financed from funds 1,457 1,237

Defined Benefit Obligation 3,012 3,021

Fair value of plan assets -1,064 -846

Provision for pension payments 1,948 2,175

4) Changes in the cash value of the defined benefit obliga-tion are as follows:

in € 000 Jan. 31, 2007 Jan. 31, 2006

Defined Benefit Obligation as of February 1 3,021 2,996

Current service costs 301 302

Interest costs arising from obligations 136 135

Effects from compensation payments 427 736

Payments made -889 -1,107

Actuarial profits (+) / losses (-) 16 -40

defined benefit obligation as of January 31 3,012 3,021

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5) Changes in faire value of the plan assets are as follows:

in € 000 Jan. 31, 2007 Jan. 31, 2006

Present value of plan assets as of February 1 846 800

Expected yield from plan assets -33 -36

Employer‘s contribution to pension fund 258 192

Amounts paid out 0 -79

Acutarial profits (+) / losses (-) -8 -30

Present value of the plan assets as of January 31 1,064 846

Plan assets exclusively comprise qualified reinsurance policies. The expected return from plan assets is based on the earnings and market expectations of the respective insurance companies. The estimated employer’s contri-bution for the next financial year will probably come to the same amount as for the year 2006/07.

As of the balance sheet date, the amounts stated for pension provisions were calculated on the basis of actu-arial reports and the projected unit credit method and by applying the following parameters:

Assumptions – pension payments Jan. 31, 2007 Jan. 31, 2006

Interest rate 4.5 % 4.5 %

Pension and salary increases 0 - 1.5 % 0 - 1.5 %

Labour turnover rate 0 % 0 %

Retirement age for women 62 years1 62 years1

Retirement age for men 62 years1 62 years1

Life expectancy AVÖ 99 AVÖ 99

Expected yield from plan asset 4.5 % 4.5 %

1 Transitional provisions for elderly employees and women have been considered.

6) The amounts for the current and the three previous reporting periods are as follows:

in € 000 2006/07Jan. 31, 2007

2005/06Jan. 31, 2006

2004/05Jan. 31, 2005

2003/04Jan. 31, 2004

Defined benefit obligations 3,012 3,021 2,996 2,409

Plan assets 1,064 846 800 695

Experience-based adjustments of plan liabilities -16 40 -156 0

Experience-based adjustments of plan assets -8 -30 -39 0

There are no reference values for the forth preceding reporting period, since IFRS was still not applied.

2) Items not affecting income, included in the revenue and expenses summary:

4.12.2 Provisions for severance paymentsThe following tables show the details of expenses for sev-erance payments recognised in the consolidated income statement and the amounts for the respective plans stated in the Group’s balance sheet.

1) Expenses for severance payments included in the personnel-related expenses:

in € 000 Jan. 31, 2007 Jan. 31, 2006

Current service costs -761 -734

Interest costs arising from obligations -377 -350

Effects from compensation payments -203 -332

expenses in fiscal year -1,342 -1,415

in € 000 Jan. 31, 2007 Jan. 31, 2006

Actuarial profits (+) / losses (-) from plan assets 0 0

Actuarial profits (+) / losses (-) from Defined Benefit Obligation -261 -263

Total actuarial profits (+) / losses (-) in period -261 -263

Recognised actuarial profits (+ ) / losses (-) as of February 1 -103 160

Total actuarial profits (+) / losses (-) in period -261 -263

Recognised actuarial profits (+) / losses (-) as of January 31 -364 -103

3) Changes in cash value of defined benefit obligations:

in € 000 Jan. 31, 2007 Jan. 31, 2006

Defined Benefit Obligation as of February 1 8,486 7,907

Current service costs 761 734

Interest costs arising from obligations 377 350

Effects from compensation payments 208 332

Payments made -427 -1,099

Actuarial profits (+) / losses (-) 261 263

defined benefit obligation as of January 31 9,668 8,486

beNe AR 2006/07

Calculations as of January 31, 2007 and January 31, 2006 are based on the following assumptions:

The severance payment obligations, for which provisions were set aside are resulting from Austrian employments that started before January 1, 2003. A severance payment entitlement arises after three full service years.

In the period under review, a total amount of TEUR 123 (2005/06: TEUR 151) for the defined contribution pension

model, which applies to all employments in Austria that started after December 31, 2002, was paid to an internal pension provision fund.

4) The amounts for the current and the three previous reporting periods are as follows:

Assumptions – severance payments Jan. 31, 2007 Jan. 31, 2006

Interest rate 4.5 % 4.5 %

Pension and salary increases 3 % 3 %

Labour turnover rate 0 % 0 %

Retirement age for women 62 years2 62 years2

Retirement age for men 62 years2 62 years2

Life expectancy AVÖ 99 AVÖ 99

2 Transitional provisions for elderly employees and women have been considered.

There are no reference values for the forth precedent period since IFRS was still not applied.

2006/07 2005/06 2004/05 2003/04in € 000 Jan. 31, 2007 Jan. 31, 2006 Jan. 31, 2005 Jan. 31, 2004

Defined benefit obligations 9,668 8,486 7,907 7,359

Experience-based adjustments of plan liabilities -261 -263 160 0

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2) Changes in the cash value of defined benefit obligations are as follows:

4.12.3 Provisions for anniversary paymentsLong-term obligations to employees further include provisi-ons for anniversary payments.

1) Expenses for anniversary payments included in the personnel expenses:

in € 000 Jan. 31, 2007 Jan. 31, 2006

Current service costs 50 46

Interest costs arising from obligations 23 21

Actuarial profits (+) / losses (-) 23 7

expenses in fiscal year 95 74

in € 000 Jan. 31, 2007 Jan. 31, 2006

Defined Benefit Obligation as of February 1 534 476

Current service costs 50 46

Interest costs arising from obligations 23 21

Payments made -78 -16

Actuarial profits (+) / losses (-) 23 7

defined benefit obligation as of January 31 552 534

Calculations as of January 31, 2007 and January 31, 2006 are based on the following assumptions:

beNe AR 2006/07

Assumptions – anniversary payments Jan. 31, 2007 Jan. 31, 2006

Interest rate 4.5 % 4.5 %

Pension and salary increases 3 % 3 %

Labour turnover rate 9.68 % 9.68 %

Retirement age for women 62 years3 62 years3

Retirement age for men 62 years3 62 years3

Life expectancy AVÖ 99 AVÖ 99

3 Transitional provisions for elderly employees and women were considered.

2006/07 2005/06 2004/05 2003/04in € 000 Jan. 31, 2007 Jan. 31, 2006 Jan. 31, 2005 Jan. 31, 2004

Defined benefit obligations 552 534 476 484

Experience-based adjustments of plan liabilities -23 -7 26 0

3) The amounts of the current and the three previous reporting periods are as follows:

There are no reference values for the forth preceding reporting period since IFRS was still not applied.

beNe AR 2006/07

4.13 PRoVisioN (loNG-TeRM ANd sHoRT-TeRM)

in € 000 Jan. 31, 2007 Jan. 31, 2006

Other long-term provisions 50 100

long-term provisions 50 100

Other short-term provisions 214 727

Short-term tax provisions 873 735

short term provisions 1,088 1,462

The other long-term provisions include the provisions for the variable part of the purchase price of minority interests in Objektform Bonn. As of January 31, 2007, TEUR 50 are set aside from the amount assumed at the time of acquisition (January 31, 2006: TEUR 100). It is assumed that the costs will arise within two years after the balance sheet date.

Other short-term provisions basically include guarantees and warranties. As of the balance sheet date January 31, 2007, provisions in the amount of TEUR 162 (January 31, 2006: TEUR 525) were set aside for any possible warranty

claim. It is expected that the majority of costs will arise within the next business year and the total amount accrued within two years after the balance sheet date.

Short-term provisions for taxes contain actually incurred provisions for taxes on income, based on current earnings and taking tax loss carry forwards of the individual compa-nies into account.

in € 000 otherlong-term provisions

othershort-term provisions

short-termtax provisions

as of Jan. 31, 2006 100 727 735

Addition 0 17 716

Utilisation -50 -150 -423

Changes in the scope of consolidation 0 0 6

Reversals 0 -380 -159

as of Jan. 31, 2007 50 214 873

Type of financing Currency book valueJan. 31, 2007

1 - 5 years

book valueJan. 31, 2007

> 5 years

book valueJan. 31, 2006

1 - 5 years

book valueJan. 31, 2006

> 5 years

effective interest yieldJan. 31, 2007

interest yieldFixed / variable

Maturity

Working capital loan EUR 150 0 0 0 4.4 % variable 30/07/2009

Working capital loan EUR 100 0 0 0 4.7 % variable 30/07/2009

Investment loan EUR 856 215 0 0 3.9 % variable 31/12/2012

Investment loan EUR 0 0 76 0 4.2 % variable 30/06/2006

Investment loan EUR 0 0 128 0 3.2 % variable 31/12/2007

Investment loan EUR 0 0 138 0 3.2 % variable 01/10/2007

Investment loan EUR 0 0 145 0 3.4 % variable 31/12/2007

Investment loan EUR 2,416 0 3,625 0 3.1 % variable 02/01/2010

Investment loan EUR 580 0 870 0 3.1 % variable 02/01/2010

Investment loan EUR 0 0 636 0 4.1 % variable 30/06/2010

Investment loan CHF 0 0 1,426 0 3.0 % variable 29/03/2010

Investment loan EUR 2,040 1,542 2,040 2,052 3.9 % variable 06/10/2014

Investment loan EUR 1,924 842 1,924 1,684 4.0 % variable 31/07/2014

Bond EUR 884 1,137 830 1,379 6.3 % fixed 28/01/2016

Total non-current 8,951 3,735 11,839 5,115

in € 000 Jan. 31, 2007 Jan. 31, 2006

Term of 1 - 5 years

Term ofmore than 5 years

Term of 1 - 5 years

Term ofmore than 5 years

Bonds 884 1,137 830 1,379

Liabilities to banks 8,066 2,599 11,009 3,736

Non-current financial liabilities 8,951 3,735 11,839 5,115

4.14 NoN-CuRReNT FiNANCiAl liAbiliTies

Securities in the amount of TEUR 939 (2005/06: TEUR 1,403) were pledged as physical securities for non-current liabilities.

beNe AR 2006/07

in € 000 Jan. 31, 2007 Jan. 31, 2006

Current financial liabilities 10,627 7,634

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4.15 CuRReNT FiNANCiAl liAbiliTies

Current financial liabilities have a term of less than 1 year.

Type of financing Currency book valueJan. 31, 2007

book valueJan. 31, 2006

effectiveinterest yieldJan. 31, 2007

interest yieldFixed / variable

Maturity

Overdraft EUR 375 0 9.4 % variable no maturity

Investment loan EUR 0 43 4.2 % variable 31/12/2007

Investment loan EUR 214 0 3.9 % variable 31/12/2012

Export promotion loan EUR 4,360 4,360 3.2 % variable revolving

Export promotion loan EUR 3,000 0 3.2 % variable revolving

Investment loan EUR 0 77 4.2 % variable 30/06/2006

Investment loan EUR 0 145 3.2 % variable 31/12/2007

Investment loan EUR 0 194 3.2 % variable 01/10/2007

Investment loan EUR 0 218 3.4 % variable 30/06/2006

Investment loan EUR 1,208 1,208 3.1 % variable 02/01/2010

Investment loan EUR 290 290 3.1 % variable 02/01/2010

Investment loan EUR 0 182 4.1 % variable 30/06/2010

Investment loan CHF 0 259 3.0 % variable 31/07/2014

Investment loan EUR 510 0 3.9 % variable 31/10/2014

Investment loan EUR 481 481 4.0 % variable 29/03/2010

Bond EUR 188 177 6.3 % fixed 28/01/2016

Total current 10,627 7,634

4.16 GoVeRNMeNT GRANTs ANd subsidies

in € 000 Jan. 31, 2007 Jan. 31, 2006

as of February 1 1,110 1,352

Released to income statement 149 242

As of January 31 961 1,110

thereof current 141 210

thereof non-current 821 900

Government grants and subsidies include:

in € 000 Jan. 31, 2007 Jan. 31, 2006

Subsidy interests PIA 95 0 8

Subsidy Land NÖ Heizanlage (heating installation) 14 21

Subsidy NÖ WF Fonds 2003 467 532

Subsidy Land NÖ Abbiegespur (turning lane) 13 17

Subsidy AMF Gem. § 35A 2004 467 532

Total grants / subsidies 961 1,110

thereof current 141 210

thereof non-current 821 900

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Grants consider non-reimbursable public grants for capital expenditure in property, plant and equipment and are released over the weighted useful life of the sponsored investment based on the acquisition costs.

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4.17 TRAde PAyAbles, oTHeR liAbiliTies

in € 000 Jan. 31, 2007 Jan. 31, 2006

Prepayments received 9,267 7,899

Trade payables 12,675 13,206

Liabilities to consolidated companies 1,112 682

Trade payables 23,055 21,786

other liabilities 15,569 15,658

Total 38,624 37,445

The received prepayments mainly result from customers’ advanced payments in the context of usual payment terms for large scale projects of BENE Moscow OOO (January 31, 2007: TEUR 7,957, January 31, 2006: TEUR 6,676). Trade payables do not bear interests and normally have a maturity of 30 – 60 days.

Other liabilities include mainly liabilities to Austrian and foreign tax authorities in the amount of TEUR 5,484 (Ja-nuary 31, 2006: TEUR 8,270) as well as other short-term liabilities to employees amounting to TEUR 6,147 (January 31, 2006: TEUR 3,340). The silent partner’s interest of the Niederösterreichischen Beteiligung GmbH in the Bene AG no longer existed on January 31, 2007 (January 31, 2006: TEUR 991).

5 NoTes To THe CoNsolidATed iNCoMe sTATeMeNTbeNe AR 2006/07

5.1 ReVeNue

Sales revenues are presented according to the total cost method.

in € 000 Jan. 31, 2007 Jan. 31, 2006

Sale of goods 197,939 186,426

Sale of planning 1,112 997

Sale of services 1,457 1,199

Sales rebates -1,956 -1,902

sales Revenue 198,551 186,719

With regard to the development of revenues of the differ-ent markets we refer to the segment reporting.

5.2 oTHeR iNCoMe

in € 000 Jan. 31, 2007 Jan. 31, 2006

Income from disposal of assets 70 86

Income from exchange rate differences 471 378

Other income 3,145 1,757

other income 3,686 2,221

Other income basically concerns the Bene AG. Among others, the item includes the reversal of provisions (TEUR 1,274), the contributions for semi-retirement and the ap-prentice premium (TEUR 299), the proceeds from the fur-ther charging of IPO costs to the former financial in-vestor

(TEUR 221), the reversal of public subsidies (TEUR 159), rental revenue (TEUR 136), other proceed from waste disposal (TEUR 107) and other income (TEUR 949).

5.3 exPeNses FoR MATeRiAlANd suPPlies

in € 000 Jan. 31, 2007 Jan. 31, 2006

Material expenses -82,227 -78,873

Cost of purchased goods -1,257 -4,565

Assembly, production & logistics (purchased services) -8,426 -8,220

Other external personnel (purchased services) -1,290 -1,189

Materials and supplies -93,199 -92,847

beNe AR 2006/07

5.4 PeRsoNNel exPeNses

in € 000 Jan. 31, 2007 Jan. 31, 2006

Total wages -11,830 -10,659

Total salaries -34,073 -30,097

Severance payments -1,631 -1,574

Pension payments -957 -1,262

Expenses for social security contributions according to legal regulations -10,981 -9,782

Other voluntary personnel expenses -620 -410

Personnel expenses -60,092 -53,786

Expenses for severance payments are as follows:

in € 000 Jan. 31, 2007 Jan. 31, 2006

Expenses from defined benefit plans 1,342 1,415

Expenses from contributory plans 123 85

Other expenses 166 74

Total expenses for severance payments 1,631 1,574

Expenses for pension scheme include the following items:

in € 000 Jan. 31, 2007 Jan. 31, 2006

Expenses from defined benefit plans 897 1,208

Expenses from contributory plans 53 46

Other expenses 7 8

Total expenses for pension scheme 957 1,262

5.5 oTHeR oPeRATiNG exPeNses

in € 000 Jan. 31, 2007 Jan. 31, 2006

Marketing expenses -4,196 -3,144

Commissions -1,106 -1,110

Other expenses for internal personnel -694 -584

Other expenses for external personnel -838 -228

Product development -211 -120

Cost of dispatch -3,754 -3,262

Rent & lease -3,918 -3,457

Building cost -598 -626

Maintenance -2,201 -1,859

Motor vehicles -3,017 -2,681

Consulting -3,270 -1,764

Travelling expenses -2,844 -2,166

Communication expenses -1,520 -1,352

Exchange losses -482 -166

Other sales costs -916 -434

Insurances -377 -529

Other administrative costs -1,272 -2,268

Taxes (not on income) -195 -110

other operating expenses -31,409 -25,861

5.6 iNTeResT ResulT

in € 000 Jan. 31, 2007 Jan. 31, 2006

Interest expenses -1,118 -1,592

Income from interest 215 224

interest result -904 -1,369

5.7 oTHeR FiNANCiAl ResulT

in € 000 Jan. 31, 2007 Jan. 31, 2006

Earnings from the disposal of financial assets 0 52

Expenses from financial assets -12 -45

Earnings from securities 158 433

other financial result 146 440

Income from securities results mainly from the Bene AG’s securities held as long- and short-term financial assets.

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5.8 eARNiNGs PeR sHARe

Non-diluted earnings per share are cal-culated by dividing net earnings for the period attribut-able to bearers of ordinary shares of the parent company by the weighted average number of ordinary shares outstanding during the year.

During the period under review there was no dilutive effect on ordinary shares. Thus the di-luted earnings per share correspond to the undiluted earnings per share. The calculation of earnings per share is based on the following earnings attributable to the bearer of ordinary shares of the parent company:

in € 000 2006/07 2005/06

Earnings from continuing operations attributable tocommon shareholders 8,426 7,472

Earnings from discontinued operation attributable tocommon shareholders 0 17

earnings attributable to common shareholders 8,426 7,489

The calculation of earnings per share is based on the following weighted average ordinary shares.

In thousands 2006/07 2005/06

Weighted average number of common shares 20,074 18,750

In the financial year 2006/07, in the course of the IPO, the capital was increased by TEUR 5,597. 5,597.532 new shares (with a value of EUR 1.00 each) were issued (see point 4.10). In the context of the IPO, TEUR 22,909 were booked under the capital reserve. Thus, in the business year 2006/07 earnings per share were calculated on basis of the weighted average number of 20,073.517 ordinary shares.

In the period between the balance sheet date and the preparation of the consolidated financial statement no transactions with ordinary shares or potential ordinary shares took place.

5.9 diVideNd PRoPosed ANd disTRibuTed

In the past business year, the resolved dividend for the financial year 2005/06 in the amount of TEUR 1,894 (EUR 0.10 per ordinary share) was paid out. For the business year 2006/07, the Management Board proposes to the shareholders’ meeting, to distribute a dividend from net earnings (from net profit of TEUR 4,951 recognised in the individual financial statements of the Bene AG) of EUR 0.20 per share (not recognised as liability as of January 31, 2007).

6 NoTes To THe CoNsolidATed CAsH FloW sTATeMeNT beNe AR 2006/07

The Bene Group’s cash flow statement shows the Group’s changes in cash during the report-ing period resulting from the inflow and outflow of funds. The cash flow statement differ-entiates between cash flows from operating activities, from investment activities and from financing activities. Amounts recognised of fully consolidated foreign subsidiaries are converted as of the balance sheet date. The cash flow statement is prepared according to the indirect method. Cash and cash equiva-lents comprise liquid funds.

The cash flow from operating activities amounts to TEUR 4,476 (previous year TEUR 15,258). The high volume of orders received in the last quarter of 2006/07 led to a considerable increase in inventories and trade payables, which basically resulted in changes of the cash flow from operating activities

The increase in the cash flow from investing activities is mainly resulting from the raising

(payment) of short-term financial assets. It concerns the investment of funds from the capital increase in the course of the IPO. The position payouts for the acquisition of subsidiaries show the purchase price for the proportionate equity less payment funds.

In the course of the capital increase, there was an inflow of funds in the amount of TEUR 28,506. Further the interest-bearing finance liabilities were reduced by TEUR 2,105 net.

7 RisK MANAGeMeNTbeNe AR 2006/07

7.1 PRiNCiPles ANd MeTHods oF RisK MANAGeMeNT As internationally operating company serving a large number of different markets and cus-tomers, the Group is exposed to certain risks. These risks are related to the economic devel-opments of the target markets. A weak economy with low propensity to invest has a major impact on the Group’s sales volume.

Bene has implemented a reliable group-wide monitor-ing and control management to identify risks already at an early stage and to quickly initiate counter measures. This system is an essential part of the Group’s active risk management.

The control and the management of finance risks consti-tute important elements of Bene’s group-wide controlling, accounting and treasury systems. Permanent controlling and regular reporting shall ensure the identification of ma-jor risks at a very early stage and – if necessary – initiate counter measures.

For a major part of business transactions, the payment risk is minimised by an active and permanent credit monitoring of the customers. Due to the strategic focus on developed Euro-pean target markets, the risk of deliveries to politically risky countries can usually be avoided. As internationally operating Group that conducts its sourcing almost exclu-sively on the basis of euro, only currency exchange rate fluctuations outside the euro zone can negatively influ-ence on the sales and earnings situations. Therefore, we have taken active steps in Russia to convert from dollar to euro invoicing and thus to reduce the exchange risk of our sales in Russia to a large extend. Since the Bene Group gener-ates the major part of its total sales in the euro zone and generally invoicing is based on euro also in most countries outside the euro zone, there are no major foreign currency risks from the cash flow of operating business activities.

For this reason, currently there are no limitations and control of interest and exchange rate risk through the use of derivative financial instruments such as e. g. forward exchange deals or swaps.

A central cash management system guarantees the con-sistent transparency of all cash flows within the Company and the pooling of liquidity at the headquarters by the acceleration of all resulting inter-group cash flows from current business operations. However, due to the above mentioned reasons, for the time being, traditional cash pooling has not been deemed necessary.

7.2 liquidiTy RisKs

A group-wide financial and liquidity plan-ning ensures that sufficient liquidity is available or that a necessary financing is guaranteed by an adequate credit line to fulfil the Group’s financial obligations. Liquidity not required in the short-term is either parked in short-term time deposit accounts or is invested in quoted conserva-tive securities. The Company has established treasury guidelines for the transparency of the risk and investment profile.

7.3 CRediT RisKs

Credit risks or the risk of payment default on the part of partners are mitigated by credit checks and limits as well as monitoring routines. As far as appropriate, the Company receives government export guarantees or guarantees from similar private organisations to reduce the risk of payment default. In addition, there is no significant concentration of default risks since these are widely spread over a large number of contracting parties.

The credit risk is limited as the Group only cooperates with financial partners with good credit standing.

The Company has made value adjustments for all existing risks and thus Bene’s management is of the opinion that there are no other major credit risks.

The book value of the stated receivables represents the maximum default risk.

beNe AR 2006/07

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in € 000

Type of financing Redemptionwithin

one year

1 - 2years

2 - 3years

3 - 4years

4 - 5years

more than 5 years

Total

VARiAble iNTeResT-beARiNG

Overdraft 375 375

Export promotion loan 4,360 4,360

Investment loan 214 214 214 214 214 215 1,286

Export promotion loan 3,000 3,000

Working capital loan 0 0 100 100

Working capital loan 0 0 150 150

Investment loan 1,208 1,208 1,208 3,625

Investment loan 290 290 290 870

Investment loan 510 510 510 510 510 1,542 4,092

Investment loan 481 481 481 481 481 842 3,247

Fixed iNTeResT-beARiNG

Bond 188 201 214 227 242 1,137 2,209

Total 10,627 2,904 3,167 1,432 1,448 3,735 23,314

Total current 10,627

Total non-current 12,687

7.4 iNTeResT RisK ANd CAsH FloW RisK

The majority of interests on the Group’s loans is variable.

The management judges the risk of changes in interest rates on financial investments and liabilities to be calcu-lable. Accordingly, derivative instruments for protection against interest rate risk are not applied. On the balance sheet date, interest rates were as follows:

2006/07 2005/06

Credit on current accounts 1.3 % 1.3 %

Short-term investments 3.1 % 2.4 %

Securities available for sale, short-term 2.5 % 2.5 %

Securities available for sale, long-term 3.5 % 3.5 %

Overdraft credits 4.1 % 3.6 %

Short-term financial liabilities 4.0 % 3.2 %

Long-term financial liabilities 4.4 % 4.1 %

Bonds 6.3 % 6.3 %

Maturities are as follows:

7.4.1 liquid funds and short-term financial assets Due to the relatively short-term of these financial assets, the book value of liquid funds and short-term financial as-sets corresponds to the market value.

7.4.2 securities held as short-term and long-term assets The fair value of publicly trade securities is based on current rates. The Group’s securities are classified as financial assets available for sale and are assessed at the market value on the balance sheet date.

7.4.3 Receivables and liabilitiesReceivables and liabilities stated at amortised costs basi-cally correspond to the fair value.

7.4.4 short-term financial liabilitiesDue to the short-term maturity of these liabilities, their book value corresponds basically to the fair value.

7.4.5 long-term liabilities to banks Long-term loans and other liabilities at variable interest rate basically correspond to their book values. The Manage-ment is of the opinion that risk of interest rate changes for financial assets and other liabilities is within a reasonable scope.

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7.5 ReNT ANd leAse

The Group has incurred several lease obligations for its sales areas, show-rooms, office and storage spaces. These rental agreements have an average term between 1 and 5 years and partly include options for prolongation.

Furthermore, the Group has entered into several leasing agreements for vehicles. These leasing contracts have an average duration between 3 and 5 years and partly include options for prolongation and options for purchase at residual value.

These rental and leasing agreements do not include any limitations of the Group’s activities with respect to dividends, additional debts or other additional leasing agreements.

The consolidated income statement for the year under review includes minimum rental and leasing payments in the amount of TEUR 4,619 (2005/06: TEUR 4,098). The duration of minimum rental and leasing payments is as follows:

in € 000 Jan. 31, 2007 Jan. 31, 2006

Within 1 year 5,093 3,972

Between 1 and 5 years 8,139 7,836

Longer than 5 years 0 12

8.1 liTiGATioN

As of January 31, 2007, a provision in the amount of TEUR 100 from the title of a contract termi-nation of a former sales partner for the region Serbia and Montenegro was built. (January 31, 2006: 0).

Due to new findings, the existing provision of TEUR 30 as of January 31, 2006 (from the title of contract termina-tion of an external assembly and logistics partner) was adjusted to TEUR 63 as of January 31, 2007. The first hearing date is fixed for June 6, 2007. As of January 31, 2007, there are no further major pending legal proceedings (i. e. lawsuits resulting from ordinary business activity, legal disputes concerning product liability, legal ac-tions due to delivery contracts or other contracts as well as patent issues).

8 CoNTiNGeNCies ANd oTHeR obliGATioNsbeNe AR 2006/07

8.2 GuARANTees ANd WARRANTies

Past experience shows that due to the high level of product quality, warranty is rarely claimed. In the event of specific cases, provisions are set aside ac-cordingly.

9 subsequeNT eVeNTsbeNe AR 2006/07

On April 5, 2007, 100 % of the shares of the former Bene dealer Office Technology BVBA with its head quarters in Zaventem (Belgium) were acquired. The company founded in 2004 is engaged in the sales and planning of office furnishings. Exact fair value recognition of the assets taken over and the identification of any goodwill will be possible in the context of the initial statement only after the approval of the annual financial statements for the interim financial year from January 1, 2007 to March 31, 2007.

10 busiNess TRANsACTioNs WiTH RelATed PARTiesbeNe AR 2006/07

10.1 TRANsACTioNs WiTH RelATed PARTies

The table below shows the total amounts from transactions between related parties in the financial years concerned. The Group’s controlling, superior parent company is the Bene AG. Business transactions with related parties refer to the Bene Group. Distinction is made between companies with significant influence, joint ventures and related parties in key functions.

in € 000 sales proceeds from associated companies and

persons

Acquisitions from associated companies and

persons

Amounts due from associated companies and

persons

Amounts due to associated

companies and persons

Companies with significant influence within the Group 49,596 99 14,760 28

Joint ventures 71 0 0 163

Associated persons 34 312 23 31

Persons in key functions 0 0 0 0

as of Jan. 31, 2007 49,700 411 14,783 222

in € 000 sales proceeds from associated companies and

persons

Acquisitions from associated companies and

persons

Amounts due from associated companies and

persons

Amounts due to associated

companies and persons

Companies with significant influence within the Group

36,877 155 9,487 78

Joint ventures 163 17 0 7

Associated persons 16 45 0 7

Persons in key functions 6 0 0 0

as of Jan. 31, 2006 37,061 218 9,487 93

Sales to and purchase from affiliated/associated parties are executed at common market conditions. Open items at the end of the business year are not collateralised, are interest-free and are paid in cash. There are no guarantees for receivables from or liabilities to related parties.

Sales to related parties exclusively refer to deliveries of goods.

Purchases from related parties as of January 31, 2007 are resulting from TEUR 290 for consultancy services of Mr. Manfred Bene (January 31, 2006: TEUR 45 from legal consultancy of Kanzlei Braunegg, Hoffmann & Partner).

Furthermore, in the past business year, the Bene AG has granted a loan to the Bene Con-sulting companies (see point 4.3).

There were no other related-party transactions as of Janu-ary 31, 2007.

beNe AR 2006/07

10.2 beNeFiTs FoR PeRsoNs iN Key FuNCTioNs

Employees in key functions are mainly entitled to pensions from the Bene Group. Expenses for pensions as of Janu-ary 31, 2006 include a partial lump-sum settlement in the amount of TEUR 1,000 paid at retirement of a member of the Management Board.

The total of short-term liabilities includes liabilities of TEUR 1,235 (January 31, 2006: TEUR 1,162) to active and former members of the Management Board and of TEUR 900 (January 31, 2006: TEUR 788) to executives.

Expenses for pensions in the amount of TEUR 36 (January 31, 2006: 35) referred to the members of the Management Board, in the amount of TEUR 124 (January 31, 2006: 1,000) to members of the Supervisory Board and TEUR 23 (January 31, 2006: 23) referred to executives.

Expenses for severance and anniversary payments ac-count for TEUR 92 (January 31, 2006: 207) paid to mem-bers of the Management Board and TEUR 22 (January 31, 2006: 15) paid to executives.

in € 000 Jan. 31, 2007 Jan. 31, 2006

Near-term benefits to active and former members of the Management Board and to executives 2,135 1,950

Expenses for pensions 183 1,058

Expenses for severance payments and anniversary payments 114 222

Total 2,432 3,231

11 exeCuTiVe bodiesbeNe AR 2006/07

In the business year 2006/07 the follow-ing persons have been appointed to the executive bodies:

Management board:

Thomas BeneRoland MarouschekFrank Wiegmann (Chairman)

supervisory board:

Manfred Bene (Chairman)Erhard SchaschlKarl SeveldaKurt StiassnyMartin Hönickl (appointed by the works council)Augustin Hager (appointed by the works council)

12 NuMbeR oF eMPloyeesbeNe AR 2006/07

On the balance sheet date January 31, 2007, the Group employed 1,344 persons (2005/06: 1,217), of which 896 (2005/06: 869) were based in Austria and 448 (2005/06: 348) in the affiliated companies abroad Austria. The number of employees of the propor-tionately considered BN Factory S.A., Krosno came to 102 (2005/06: 74) on January 31, 2007.

In the financial year 2006/07, the Group’s average head-count stood at 1,247 staff members (2005/06: 1,036) of which 845 (2005/06: 653) were white collar workers and 402 (2005/06: 383) were blue collar workers. BN Factory S.A. employed 80 persons on average (2005/06: 28).

13 seGMeNT RePoRTiNGbeNe AR 2006/07

Due to regionally different market char-acteristics, the geographical regions essentially influ-ence the Group’s business policy. Business decisions are taken with regard to the individual regional market. Likewise, these geographical regions constitute the basis for the internal reporting to the Group’s management. Thus, segment reporting is based on the geographical regions within the Bene Group. As a result of the uniform product portfolio “office equipment”, the secondary segment corre-sponds to the consolidated balance sheet and the income statement.

Production is included in the segment Austria. All other countries, which cannot be allocated to any of the other segments, are included in the segment “Other markets” Transfer prices between the segments are based on com-parable market conditions. Segment reporting for the business year 2006/07 is presented below:

in € 000 Austria Germany uK Russia other markets Adjustment for inter-group transactions

Total Group

Revenue 115,990 52,573 26,341 20,728 30,685 0 198,551

from third parties 68,225 52,573 26,341 20,728 30,685 0 198,551

from other segments 47,765 0 0 0 0 -47,765 0

ebiT per segment 2,374 1,311 2,121 3,042 4,236 0 13,083

Result from affilitated companies 60 0 0 0 0 0 60

Assets of affiliated companies 210 0 0 0 0 0 210

Segment assets 79,244 14,264 10,116 14,798 11,793 2,219 132,432

Segment liabilities 54,456 7,074 4,666 8,415 1,594 0 76,205

Investments in property, plant & equipment and intangible assets 5,224 78 90 103 545 0 6,039

Depreciation and amortisation 4,942 265 90 81 190 0 5,568

in € 000 Austria Germany uK Russia other markets Adjustment for inter-group transactions

Total Group

Revenue 100,531 49,127 22,934 25,880 25,402 0 186,719

from third parties 63,376 49,127 22,934 25,880 25,402 0 186,719

from other segments 37,155 0 0 0 0 -37,155 0

ebiT per segment 2,790 1,134 1,336 2,018 3,970 38 11,286

Result from discontinued operation 23 0 0 0 0 0 23

Segment assets 54,904 11,570 5,861 16,477 7,471 929 97,212

Segment liabilities 54,670 6,613 2,763 10,597 1,107 150 75,900

Investments in property, plant & equipment and intangible assets 5,029 77 90 103 479 0 5,777

Depreciation and amortisation 4,959 202 93 103 162 0 5,520

Segment reporting for the business year 2005/06 is presented as follows:

beNe AR 2006/07

Notes to the present segment reporting as of January 31, 2007 and to the changes between January 31, 2006 and January 31, 2007: The increase in revenue by TEUR 11,832 to TEUR 198,551 is resulting from the good business performance of all segments. Only the segment Russia reports a de-crease in revenue. Below, the EBIT growth of TEUR 1,797 to TEUR 13,083 is further detailed per segment. The Austria segment increased its sales by TEUR 4,849 to TEUR 68,225. This upsurge in sales is basically result-ing from BENE’s stable high market share of about 25 % and the good order situation for large scale projects. With regard to the project business, the following projects have to be pointed out: “Hypo Alpe Adria” (sales volume of TEUR 3,140), “Generali Versicherungen” (sales volume TEUR 1,810) and “Andritz AG” (sales volume TEUR 778). The increase in fixed personnel and material related costs as well as one-time effects of costs for the IPO (partly capitalised) led to a drop in EBIT by TEUR – 416 to TEUR 2,374 compared to the previous year.

Sales of the Germany segment rose by TEUR 3,446 to TEUR 52,573. This was due to the sales increase of all German locations and the good demand for large scale projects. Here, the projects “CC Leasing” in Essen and Düsseldorf (sales volume of TEUR 3,951), “Mainova” in Frankfurt (sales volume of TEUR 708) and “Deutz AG” in Munich (sales volume of TEUR 567) are standing out. The slight increase in personnel and material costs were more than compensated by the stable margin situation.

The UK segment (Great Britain) pushed its sales by TEUR 3,407 to TEUR 26,341. This rise results from the expan-sion of the local sales team, the consistent focus on the cooperation with architects and real estate developers and the ongoing good demand for large scale pro-jects. The following projects were of major importance: “Alliance Bernstein” (sales volume of TEUR 2,218), “Capital Interna-tional” (sales volume of TEUR 840) and “Anglo American Serv-ices” (sales volume of TEUR 367). Compared to the previous year, the EBIT grew by TEUR 785 to TEUR 2,121. The improved margin situation of large scale proj-ects could compensate minor increases in the personnel and material expenses and thus essentially contributed to the increase in EBIT.

The Russia segment’s sales dropped by TEUR 5,152 to TEUR 20,728. The unusually high project volume („Raif-feisen“ TEUR 1,671, „Ruhrgas“ TEUR 1,070 and „Syra-cuse“ TEUR 1,144) in the third and forth quarter of the prior year (2005/06) led to this development. Despite the increasing competition in major projects, some prestigious projects such as “Impexbank” (sales volume of TEUR 1,066), “Fortune East” (sales volume of TEUR 615) and “KMT Engineering” (sales volume of TEUR 466) could be acquired. As a result of the stable per-sonnel and material expenses as well as a significantly improved margin situa-tion, the EBIT rose by TEUR 1,024 to TEUR 3,042.

The segment Other markets increased its sales by TEUR 5,283 to TEUR 30,685. This growth is mainly due to sales increases in the United Arab Emirates of TEUR 2,721, Central Europe (Czechia, Slovakia, Poland, Hungary, Romania, Slovenia and Croatia) of TEUR 2,051 and Ire-land of TEUR 457. The EBIT rose by TEUR 266 to TEUR 4,236.

Waidhofen/Ybbs, May 4, 2007

The Management Board

Frank Wiegmann m.p. Roland Marouschek m.p. Thomas Bene m.p.

beNe AR 2006/07

AudiToR´s RePoRT(TRANslATioN)

Report on the Consolidated Financial statements

We have audited the accompanying consolidated financial statements of Bene AG, Waidhofen/Ybbs, for the financial year from February 1, 2006 to January 31, 2007. These consolidated financial statements comprise the balance sheet as at January 31, 2007 and the income statement, statement of changes in equity and cash flow statement for the year ended January 31, 2007 and a summary of significant accounting policies and other explanatory notes.

Management’s Responsibility for the Consolidated Financial StatementsThe Company’s management is responsible for the prepara-tion and fair presentation of these consolidated financial statements in accordance with International Financial Re-porting Standards as adopted by the EU. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstate-ment, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these con-solidated financial statements based on our audit. We con-ducted our audit in accordance with laws and regulations applicable in Austria and in accordance with International Standards on Auditing, issued by the International Auditing and Assurance Standards Board (IAASB) of the Interna-tional Federation of Accountants (IFAC). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the con-solidated financial statements. The procedures selected depend on the auditor’s judgment, including the assess-ment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design au-dit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting poli-cies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionOur audit did not give rise to any objections. Based on the results of our audit in our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the group as of January 31, 2007 and of its financial performance and its cash flows for the financial year from February 1, 2006 to January 31, 2007 in accordance with International Financial Reporting Standards as adopted by the EU.

Report on other legal and Regulatory Requirements Laws and regulations applicable in Austria require us to perform audit procedures whether the consolidated management report is consistent with the consolidated financial statements and whether the other disclosures made in the consolidated management report do not give rise to misconception of the position of the group.

In our opinion, the consolidated management report for the group is consistent with the consolidated financial statements.

Vienna, May 4, 2007

WIRTSCHAFTSPRÜFUNGSGESELLSCHAFT MBH

KARL FUCHS M.P. PPA ERNST SCHÖNHUBER M.P. Wirtschaftsprüfer Wirtschaftsprüfer

beNe AR 2006/07

loCATioNsAustriaBene HeadquartersSchwarzwiesenstrasse 3A-3340 Waidhofen an der Ybbs+43-7442-500-0office@bene.comwww.bene.com

Bene WienRenngasse 6-8A-1010 Wien+43-1-534 26 0office@bene.comwww.bene.com

Bene LinzRainerstraße 14A-4020 Linz+43-732-65 64 81office@bene.comwww.bene.com

Bene SalzburgFranz-Josef-Straße 35A-5020 Salzburg+43-662-87 64 64office@bene.comwww.bene.com

Bene St. PöltenJosefstraße 46aA-3100 St. Pölten+43-2742-740 01office@bene.comwww.bene.com

Bene GrazGrabenstraße 23A-8010 Graz+43-316-82 12 71office@bene.comwww.bene.com

Bene KlagenfurtSchleppe-Platz 6A-9020 Klagenfurt+43-463-541 45office@bene.comwww.bene.com

Bene InnsbruckDr. Ferdinand-Kogler-Straße 30A-6020 Innsbruck+43-512-39 18 18office@bene.comwww.bene.com

Bene BregenzArlbergstraße 99 - 101A-6900 Bregenz+43-5574-753 20office@bene.comwww.bene.com

bulgariaBene Sofia EOODPorsche Center Sofia, 41 Christopher Columbus Blvd.BG-1592 Sofia+35-92-81705-4430sofia@bene.comwww.bene.bg

switzerlandBene Zürich-WallisellenAlte Winterthurerstraße 14aCH-8304 Zürich-Wallisellen+41-1-283 80 00office@bene.comwww.bene.com

Czech RepublicBene PragBelgická 20CZ-12000 Prag 2+42-0222 51 23 33praha@bene.comwww.bene.cz

GermanyObjektform Büroeinrichtungen GmbH Magnolienweg 12D-63741 Aschaffenburg+49-6021-84090aschaffenburg@objektform.dewww.objektform.de

Objektform Büroeinrichtungen GmbH Wasserweg 8-10 D-60594 Frankfurt+49-69-710404-0frankfurt@objektform.dewww.objektform.de

Objektform DüsseldorfZollhof 4D-40221 Düsseldorf+49-211-540584-0duesseldorf@objektform.dewww.objektform.de

Objektform Büroeinrichtungen GmbH Marthin-Luther-Ring 13D-04109 Leipzig+49-341-49 72 10leipzig@objektform.dewww.objektform.de

Objektform Büroeinrichtungen GmbH Friedrichsplatz 8D-68165 Mannheim+49-621-419880mannheim@objektform.dewww.objektform.de

Objektform Büroeinrichtungen Hamburg GmbH Van-der-Smissen-Strasse 2D-22767 Hamburg+49-40-38026400hamburg@objektform.dewww.objektform.de

Objektform HannoverGreifswalder Strasse 2D-30880 Laatzen+49-5102-70910hannover@objektform.dewww.objektform.de

Objektform Planen & Einrichten Essen GmbHRüttenscheider Strasse 144D-45131 Essen+49-201-879 38 0essen@objektform.dewww.objektform.de

Objektform Planen & Einrichten GmbHLietzenburger Str. 48-50D-10789 Berlin+49-30-886160berlin@objektform.dewww.objektform.de

Objektform Planen & Einrichten GmbHIngolstädter Strasse 14D-80807 München+49-89-35873710muenchen@objektform.dewww.objektform.de

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Objektform Planen und Einrichten GmbH Sandkaule 9 - 11D-53111 Bonn+49-228-911840bonn@objektform.dewww.objektform.de

Planquadrat Van-der-Smissen-Strasse 2aD-20767 Hamburg+49-40-38026-900gerd.kailuweit@objektform.dewww.objektform.de

Bene Deutschland GmbHWasserweg 8 - 10D-60594 Frankfurt+49-69-26 95 96-0bene.frankfurt@bene.comwww.bene.com

Till Gmbh Der ObjekteinrichterBreitwiesenstraße 19D-70565 Stuttgart-Möhringen+49-711-3418180stuttgart@till-online.dewww.till-online.de

Till Gmbh Der ObjekteinrichterIn der Lache 2 - 4D-78056 Villingen-Schwenningen+49-7720-85 97-0schwenningen@till-online.dewww.till-online.de

uKBene Plc.St. John Street 47 - 53UK-EC1M 4AN London+44-20-76 89 12 34london@bene.comuk.bene.com

HungaryBene BudapestRákóczi út 42.H-1072 Budapest+36-1268 12 28budapest@bene.comwww.bene.hu

irelandBene Office Furniture Ltd.50, City QuayIE-Dublin 2+35-3-16750-464margaret.cunningham@bene.comwww.bene.com

PolandBene WarschauAl. Armii Ludowej 26PL-00-609 Warszawa+48-22-579 34 80warszawa@bene.comwww.bene.com

RussiaBene Moscow LLCStrastnoy Blvd. 16RF-107031 Moscow+7-95-792 32 00moscow@bene.comwww.bene.ru

RomaniaBene BukarestStr. Pictor Ion Negulici nr. 13C, Etaj. 2, Sector 1RO-011941 Bukarest+40-21-316 78 57bucuresti@bene.comwww.bene.ro

sloveniaBene LaibachBTC City Smartinska 140SI-1000 Ljubljana+38-61-585 19 90ljubljana@bene.comwww.bene.com

slowakiaBene BratislavaZilinská 7 - 9SK-81105 Bratislava+42-12-52 62 02 32bratislava@bene.comwww.bene.sk

ukraineBene KievChigorina Street 18, Office 226aUA-01042 Kiev +38-044-284-89-47 tatyana.borisova@bene.comwww.bene.com

united Arab emiratesBene DubaiDubai Airport Free Zone, Phase 4, Office 4A-711, P.O. Box 33861 UAE-Dubai+971-4-204 57 22office@bene.comwww.bene.com

loCATioNs

iMPriNTBeNe

AR2006/07 Responsibleforthecontent

BeneAG

InvestorRelations

Schwarzwiesenstrasse3

A-3340Waidhofen/Ybbs

www.bene.com

Consultingandtext

PleonPublico

PublicRelations&LobbyingGmbH

1030Wien,Neulinggasse37

www.pleon-publico.at

Graphicconceptandlayout

section.d

design.communication.gmbh

1020Wien,Praterstraße66

www.sectiond.com

www.bene.com