Letter of the President of the Management Board

Dear Shareholders,

In 2010, the Comarch Group has succeed in export sales, yet again increased its level of revenue and achieved highly favorable financial results. In 2010, revenue from sales of the Comarch Group increased by 4.4 % and amounted to 761.4 million PLN. The Group achieved extremely positive financial results for sales of core proprietary products and services. There was an increase in EBIT margin from 2 % to 3.3 % despite restructuring of German subsidiary company Comarch Software und Beratung AG, continued in 2010, and despite the costs incurred through developing new and innovative IT projects. In 2010, the operating profit of the Comarch Group amounted to 24.8 million PLN, and net profit attributable to the company’s shareholders reached 43.7 million PLN.

2010 also saw the Comarch Group continue to pursue its long-term growth strategy based on proprietary products and development of foreign activity. The Comarch brand is renowned both domestically and internationally and is associated with technologically advanced IT systems, high quality services and a professional customer-focused approach. Comarch systems support customers from various branches in dozens of countries not only in Poland and Europe, but also in both the Americas and in the Middle East. In 2010, the Comarch Group concluded IT contracts, significant in value and on the European market. They were signed with demanding customers, like E-plus, German telecommunication operator. The company’s strategic guidelines for the coming year include the strengthening of the company’s market position as a global provider of IT products and services for international corporations. To achieve this, the company plans to continue significant infrastructure investment and to intensify marketing operations, especially within the DACH region (Germany, Austria and Switzerland). From the beginning of 2011, the Group has een conducting its business on new markets in Europe and Northern America (Finland, Luxembourg, Canada). The Comarch Group is one of the largest IT enterprises on the domestic market and pursues a large number of projects in all sectors of the economy. A main success achieved by the company over the course of the year 2010 resulted in selling proprietary software to banks and financial institutions (with an increase of 19.1 million PLN in revenue) and to telecommunication enterprises (with an increase of 17.1 million PLN in revenue).

The Comarch Group has placed great emphasis on its investment in human resources, in the most advanced technologies and in novel and innovative products to secure and maintain a long-term competitive advantage. Expenditure on research and development has now exceeded 12 % of sales revenue, which has been financed both by proactively seeking out European funds and from the company’s own resources. In 2010, the Comarch Group acquired 200 employees, mostly IT specialists, as this is a key factor in executing an increased number of contracts, and in the further development of the company.

In 2010 Comarch continued to expand its production resources. Works on the fifth office and production building in the Special Economic Zone were continued and works on Comarch branch in Łódź has been initiated. Works on the construction of new offices and Date Center in Dresden and Lille were also continued. Following the completion of these investments, Comarch S.A. will be equipped with high quality workspace enabling seamless execution of IT projects.

The Comarch S.A Management Board shall make every effort to ensure that consistent growth is aligned with gains in the efficiency of operations in order to deliver long-term increases in the value of the Group to its shareholders, along with maintaining the stable diversification and security of conducted activity.

Profesor Janusz Filipiak
Prezes Zarządu
Comarch S.A.