1、Annual Report 200831.12.200831.12.2007Sales revenue(EUR thousand)15,02910,745Total operating revenue(EUR thousand)15,00811,681EBIT(EUR thousand)2,7752,332EBIT margin(in terms of sales revenvue)18.5%21.7%EBIT margin(in terms of total operating revenue)18.5%20.0%EBT(EUR thousand)2,8642,217Net income f
2、or the period(EUR thousand)2,0341,561Earnings per share(weighted)(EUR)11.38312.26Equity ratio60.0%17.6%Net debt(EUR thousand)2-7,599-1,510121 During the 2007 business year on average 5,000 shares were issued,whereas the figure for the 2008 business year was 1,472,240.If the results per share are cal
3、culated in relation to the 1,665,000 shares that had been issued on 31 December 2008,this provides a result per share of EUR 1.22(EUR 0.94 in 2007).2 Surplus from interest-bearing liabilities over cash and cash equivalents(negative value:to all intents and purposes free of debt)Overview of KPIsTable
4、 of contentOverview of KPIs.2Table of content.3Profile of GK SOFTWARE AG.41.To our shareholders.7A.Preface of the Managing Board.7B.Report from the Supervisory Board.9C.Corporate Governance.11D.GK SOFTWARE AG Shares.132.Consolidated Management Report.17I.Business Report.17II.Report on Key Events aft
5、er the Balance Sheet Date.28III.Report on Risks and Prospects at GK SOFTWARE.28IV.Other Information According to Section 315 of the German Commercial Code.313.Consolidated financial statements .34A.Consolidated balance sheet as of December 31,2008.34B.Consolidated income statement for the financial
6、year until January 1 to December 31,2008.36C.Consolidated cash flow statement as of December 31,2008.37D.Consolidated statement of changes in equity as of December 31,2008.38E.Notes to the consolidated financial statements as of September 30,2008.394.Audit Opinion.575.Declaration by legal representa
7、tives.58Imprint/Notes.59The leading technology developer and provider of standard software for the retail sector in Europe with an extensive range of products for stores and enterprise headquartersTechnology and innovation leader on the market as a result of its open GK/Retail Suite software solutio
8、ns,which can be used on any platform;they are completely programmed using JavaModular software opens up significant cost savings potential for the retail stores business as a result of process optimization and improved competitiveness thanks to a variety of possibilities for increasing customer loya
9、ltyProfile of GK SOFTWARE AG1st Quarter2nd QuarterAppointment of Andr Hergert as CFO March6 Projects won,e.g.:Coop (Switzerland)/MayHornbach/DecemberJYSK/December IPO June,first successful IPO in Prime Standard in 2008 Successful 2nd quarter figures showing dynamic growthCoop(Switzerland)as first fo
10、reign customer Q2,StoreWeaver its first project with Coop(Switzerland)July 54PROFILE OF GK SOFTWARE AG213 employees at company headquarters in Schneck and four other locations in Berlin,St.Ingbert,Plzen(CZ)and Basel/Riehen(CH)Well-known German and international retail customers,including Galeria Kau
11、fhof,Parfmerie Douglas,Coop(Switzerland),EDEKA Hannover-Minden,Hornbach,JYSK Nordic(Denmark)Lidl,Netto Marken-Discount and TchiboThe modular software suite is being used at more than 55,000 POS units in approx.13,000 stores in Germany and further afield in 25 countriesA profitable company showing st
12、rong growth20082nd Quarter3rd Quarter4th QuarterSurplus from interest-bearing liabilities over cash and cash equivalents(negati-ve value:debt-free)Roll-out for Kaufhof,Depot completed on schedule in Q3,Roll-out for Thalia Austria finished in Q4Start of international sales with staff in UK and activi
13、ties in Russia OctoberStoreWeaver branch opened in St.Ingbert NovemberCoop(Switzerland)launches productive operations in first pilot store November Rainer GlCEOStephan KronmllerCTORonald ScholzCOOAndr HergertCFO761.TO OUR SHAREHOLDERSDear shareholders,We are very proud to be able to present to you o
14、ur first annual report from GK SOFTWARE AG as a listed company.The 2008 business year was once again very successful for our company with double digit growth and a high degree of profitability.Sales revenues rose by almost 40%in comparison with the previous year to EUR 15.0 million.And in terms of e
15、arnings before interest and tax(EBIT),the growth rate was approx.19%to EUR 2.8 million.This gives rise to an EBIT margin of 18.5%.In general terms,consolidated profits were EUR 2.0 million,an increase of approx.30%.This dynamic development was the result of many new projects and the expansion of our
16、 existing customer relations.Not only were the consolidated results outstanding but we have also reached important milestones for ongoing corporate developments.Despite a difficult market environment,we successfully celebrated our IPO in June.We were one of just two companies that managed to enter t
17、he premium segment at the German Stock exchange,the Prime Standard.The gross yield of EUR 8.7 million forms a solid basis for our further international growth.The three members of the Management Board were joined by a new CFO,Andr Hergert,in March in connection with the IPO.During 2008 we were able
18、to acquire a number of new,trend-setting projects.In international terms,the Swiss group Coop should be mentioned here as the first foreign customer.Coop has now installed GK/Retail in the first pilot store.This means that this complex project with central architecture has reached a productive stage
19、 after just seven months.This is the first important milestone in this complex project that involves central architecture.Overall 1,400 Coop stores operating in various lines of business will be equipped with GK/Retail.The Danish company JYSK Nordic,one of the leading European fittings and furniture
20、 trading companies,signed an agreement for a new international store solution in November.The 1.To our shareholdersA.Preface of the Managing Boardcompany is planning to complete the roll-out during the next three years.JYSK Nordic currently has business operations in eleven countries and the agreeme
21、nt with GK SOFTWARE involves plans to expand into 21 countries,including China.The solutions provided by GK SOFTWARE AG attracted a great deal of interest in Germany too and we were able to acquire a new customer in the shape of Hornbach,a successful retail company in the home improvement sector.Thi
22、s order represents a first important step towards opening up the home improvement stores retail sector for the GK/Retail standard software.The company also successfully completed roll-outs at Galeria Kaufhof GmbH,the“DEPOT”sales line at Gries Deco Company GmbH and at Austrian stores of Thalia.These
23、are examples of important projects,which we managed to complete or make progress in 2008.Our research and development department also met an important target:The go-ahead was given for the new major version called GK/Retail 12 in the fall.It combines a variety of innovations in both functional and t
24、echnological terms and it represents a quantum leap forwards in terms of quality.The end-to-end store solution is now completely based on the new ABC technology(Advanced Business Components).This technology,which meets SOA standards,allows customer functions,new solution components and subsystems to
25、 be integrated with ease.The 2009 business year has started well for us:We received a major order from the food retail company Lidl in February to supply our software for the complete Lidl network,which is spread over twenty European countries.Lidl has been working with our DOS-based till software s
26、ince the end of the 1990s this is now due to be completely replaced by the modern Java solution,GK/Retail.Our subsidiary StoreWeaver GmbH is also trading very successfully in the market place.Building on the technological expertise of GK SOFTWARE AG,it expanded its range of products in 2008 and bega
27、n to realize the first customer projects using its own development team.StoreWeaver opened a new competence center in the IT center of St.Ingbert in the German state of Saarland in November 2008.This location is due to operate as an innovation and conference center.Despite the global economic crisis
28、,we are confident that our positive corporate development will continue in 2009 too.We are expecting further growth in sales again and corresponding profitability in the new business year.We are also planning to hire more staff,particularly for StoreWeaver.The current financial crisis has not had an
29、y negative effects on our operating business so far.We are currently involved in concentrated discussions with potential customers and the progress being made with our existing customers is going according to plan.But it is difficult to make a clear forecast about the investment behavior of the reta
30、il sector as the economic consequences of the financial crisis cannot yet be fully measured.It will not be possible to make more specific forecasts about our prospects until later in the year as developments will depend on how the economy fares in Europe and how this affects the retail sector.As iss
31、ues like customer loyalty,increases in customer satisfaction and optimizing store processes in the retail sector in particular become more important during any economic downturn,we remain confident that business developments at GK SOFTWARE AG will continue to be successful during 2009.We are delight
32、ed to know that you are supporting GK SOFTWARE AG along its pathway of growth and we would like to thank you for placing your confidence in us.Andr Hergert(CFO)Rainer Gl(CEO)Stephan Kronmller(CTO)Ronald Scholz(COO)The Management Board 981.TO OUR SHAREHOLDERSB.Report from the Supervisory BoardDear sh
33、areholders,GK SOFTWARE AG,which has its headquarters in Schneck,has been listed on the Frankfurt Stock Exchange in the Regulated Market segment(Prime Standard)since 19 June 2008.This means that this report is the first by the Supervisory Board since the companys IPOComposition of the Supervisory Boa
34、rdIn line with the articles of incorporation,the Supervisory Board consists of three members.No committees have been formed.The following people belonged to the body during the 2008 business year:Uwe Ludwig(Chairman)Heinrich Sprenger(Deputy Chairman)Thomas Bleier Uwe Ludwig and Heinrich Sprenger hav
35、e been appointed until the end of the annual shareholders meeting in 2011.Thomas Bleier has been appointed until the end of the annual shareholders meeting in 2009.Composition of the Management BoardIn line with a decision taken by the Supervisory Board on 28 March 2008,the Management Board,which un
36、til that time had consisted of three members,was expanded by the appointment of Andr Hergert,who had already been working in an advisory capacity for GK SOFTWARE AG.This coincided with the future listing on the stock exchange and the consequential additional obligations required for financial report
37、ing.MeetingsThe Supervisory Board met for eight meetings in all during the 2008 business year on 28 March,15 May,28 May,30 May(x2),17 June,18 June,15 September and 3 November some of which were held in the form of a telephone conference.All the members of the body took part in all the meetings.They
38、were also in regular contact with each other above and beyond the meetings and also with the Management Board,particularly through the chairman of the Supervisory Board.Decisions were taken during meetings and by circulating written memos.During its meetings the Supervisory Board was given detailed
39、information about the companys economic and financial situation and its fundamental business policies through verbal and written reports from the Management Board.The Management Board regularly prepared interim reports about the way that business was progressing.Other meetings were held,particularly
40、 in connection with the preparations and implementation of the IPO.The Supervisory Board set up its own rules of procedure through a decision taken on 28 May 2008.Tasks of the Supervisory BoardThe Supervisory Board at GK SOFTWARE AG performed to the letter the tasks expected of it according to the l
41、aw,articles of incorporation,the German Corporate Governance Code and the Supervisory Boards internal rules of procedure and continually monitored and advised the company managers.The Supervisory Board also worked on the further development of risk management procedures.During the course of the 2008
42、 business year,significant progress was made here considerable progress was achieved,for example,in the field of project monitoring and this has markedly improved company management in the operational business.The Management Board regularly,promptly and comprehensively informed the Supervisory Board
43、 about any issues of planning,business development,the risk situation,risk management,strategic measures and important business processes that were relevant to the company during the 2008 business year.The major themes at the meeting held on 28 March were the report from the auditors on the annual a
44、ccounts and the authorization and approval of the 2007 annual accounts.The Supervisory Board also discussed the preparations for the IPO and the appointment of a Chief Financial Officer.One special topic at the meeting of the Supervisory Board on 15 May was the appointment of Uwe Ludwig as Superviso
45、ry Board chairman and Heinrich Sprenger as his deputy.The meeting on 28 May focused on a decision on the rules of procedure for the Supervisory Board and the approval of the IPO.The Supervisory Board approved the price range for the sales price of the ordinary shares as part of the stock exchange li
46、sting on 30 May and approved the adjusted price range during a second meeting.The change in the rules to increase the equity capital was adopted during the meeting on 17 June.The Supervisory Board gave its approval to the listing price on 18 June.The employers pension commitments for the Management
47、Board members Gl and Kronmller were adjusted during the meeting on 15 September.The Management Board informed the Supervisory Board of business developments during the meeting held on 3 November.No decisions were taken.In order to monitor management activities,the Supervisory Board was directed by t
48、he annual budget passed for 2008 and it ensured that the Management Board prepared reports,particularly concerning business policy and corporate planning,profitability,the course of business and important individual measures adopted by the company.The Supervisory Board listened to verbal reports abo
49、ut the way that the company was progressing in general and about the progress in the companys operating business in detail during the meetings that it held for this purpose during the 2008 business year.The Supervisory Board was also provided with information by the Management Board beyond the offic
50、ial meetings of the Supervisory Board and these facts were also discussed and checked by the Supervisory Board.Corporate GovernanceThe Supervisory Board and the Management Board act in the full knowledge that good corporate governance is an important basis for the success of the company and is also
51、in the interest of shareholders and the financial markets.The Management Board and Supervisory Board issued the annual compliance statement in line with Section 161 of the German Stock Companies Act in April 2009.A copy of this document is included with this annual report.The Management Board and Su
52、pervisory Board have agreed to implement the recommendations of the German Corporate Governance Index to the appropriate degree.The members of the Supervisory Board were not involved in any conflicts of interest during the 2008 business year.2008 Audit of the Annual AccountsThe annual accounts of GK
53、 SOFTWARE AG and the IFRS consolidated accounts presented by the Management Board in line with the rules in the German Commercial Code and the annual report for 2008 have been audited by Deloitte&Touche GmbH Wirt-schaftsprfungsgesellschaft and have been given a qualified audit certificate.Contrary t
54、o Section 315 a,Paragraph 1 of the German Commercial Code in conjunction with Section 314,Paragraph 1,Number 6,Letter a)of the German Commercial Code and Section 285,Sentence 1,Number 9,Letter a)of the German Commercial Code,the salaries of each individual member of the Management Board have not bee
55、n declared,either in the notes on the consolidated accounts or the notes on the final accounts.Having been informed of these auditing reports,the Supervisory Board checked the annual accounts made available by the Manage-ment Board,the consolidated accounts and the annual report about GK SOFTWARE AG
56、 and the group and examined the suggestion made by the Management Board on how to use the balance sheet profits.During the Supervisory Boards balance sheet review meeting held on 15 April 2009,the Management Board explained the companys annual accounts as at 31 December 2008 to the Supervisory Board
57、 and reported on the companys profitability,especially its equity 11101.TO OUR SHAREHOLDERScapital,and developments in business and the companys general situation.All the Supervisory Board members received the necessary documents prior to this meeting.The auditor of the annual accounts explained the
58、 auditing reports during the meeting and answered every question.There are no doubts about the independence of the auditor of the annual accounts.During its meeting on 15 April 2009,the Supervisory Board approved the GK SOFTWARE AG annual accounts and the consolidated accounts of GK SOFTWARE AG.The
59、annual accounts have therefore been approved.The Supervisory Board also supported the Management Boards suggestion on how to use the balance sheet profits.The Supervisory Board also prepared a report on relations to associated companies in line with Section 312 of the German Stock Companies Act.The
60、auditor of the annual accounts checked this and reported on the results to the Supervisory Board in writing and the Supervisory Board verbally during its meeting on 15 April 2009.The checks made by the Supervisory Board did not give rise to any issues that might be contested.It therefore did not rai
61、se any objections to the Management Boards final statement in its report according to Section 312 of the German Stock Companies Act.The Supervisory Board would like to thank the Management Board and all its members for the efforts that they are making at the company and the work that they have perfo
62、rmed and congratulates them on the successes that they have achieved.Schneck,15 April 2009Uwe Ludwig(Chairman of the Supervisory Board)The Management Board and Supervisory Board issued the annual compliance statement in line with Section 161 of the German Stock Companies Act on 16 April 2009.This st
63、atement shows that GK SOFTWARE AG meets most of the recommendations and suggestions in the German Corporate Governance Code.The declaration states:The Management Board and the Supervisory Board at GK SOFTWARE AG declare that they have satisfied the current valid recommendations of the“Government Com
64、mission of the German Corporate Governance Code”in the version dated 14 June 2007 or 6 June 2008 up to the current date,with the exception of the following discrepancies:Code Number 3.8 Contrary to the ruling in the Code about the agreement on an excess amount as part of the Directors and Officers i
65、nsurance,there are no provisions for any excess for insured persons in the GK SOFTWARE AG insurance scheme.GK SOFTWARE AG believes that the care and responsibility,with which the members of the Supervisory Board and the Management Board carry out their tasks,cannot be improved by any such excess amo
66、unt.Code 4.2.4 Contrary to the Code,the salaries of each individual member of the Management Board have not been declared in the notes on the consolidated accounts because GK SOFTWARE AG believes that this does not create any greater degree of transparency.Code Number 5.1.2 There is no age limit for
67、 the members of the Supervisory Board;in the view of GK SOFTWARE AG,the professional qualifications of the members of the Supervisory Board play a greater role.Code Number 5.3 Contrary to Number 5.3 of the Code,the Supervisory Board at GK SOFTWARE AG does not form any committees,as the consistent in
68、tensive level of information for all the members of the Supervisory Board can be guaranteed most efficiently in meetings where all the members of the Supervisory Board are present on account of the size of C.Corporate Governancethe body(the Supervisory Board consists of three members).Any issues can
69、 be handled and answered appropriately by the whole body.So no auditing committee(Number 5.3.2)has been set up.The same applies to the nomination committee(Number 5.3.3)and the particular specialist committees(Number 5.3.4).Code Number 5.4.1 There is no provision for an obligatory age limit on the m
70、embers of the Supervisory Board,as the older members of the Supervisory Board enrich the body as a result of their wide experience and their specialist qualifications are more important.Code 5.4.6 Payment for the members of the Supervisory Board is made exclusively according to fixed elements.No rem
71、uneration that is dependent on the companys success is granted to the members of the Supervisory Board as the members of the Supervisory Board must be able to pursue their task as a supervisory body for the company without any possible conflicts.Code 7.1.2 The consolidated accounts are not published
72、 within 90 days of the end of the business year,but after four months in line with the current guidelines published by Deutsche Brse AG.The interim reports are not made available after 45 days,but after two months in line with the current guidelines published by Deutsche Brse AG.GK SOFTWARE AG belie
73、ves that the periods of time set by Deutsche Brse AG are adequate to provide shareholders with sufficient information.Directors Dealings Information:Rainer Gl,CEOPurchase:12.11.2008 5,000 shares EUR 13.55Purchase:13.11.2008 5,000 shares EUR 12.39Ronald Scholz,COOPurchase:9.12.2008 2,500 shares EUR 1
74、3.75Purchase:12.12.2008 2,500 shares EUR 13.56Purchase:18.12.2008 2,300 shares EUR 12.8813121.TO OUR SHAREHOLDERSD.GK SOFTWARE AG Sharesi.Share Chartii.Summary/Chart DevelopmentGK SOFTWARE AG stocks have been listed in the Prime Standard section of the Frankfurt Stock Exchange since 19 June 2008.The
75、 issue price for the shares at the IPO was EUR 21.00 and during initial trading the shares rose to EUR 21.40.Despite the volatile capital market environment in connection with the ongoing financial crisis,the share performance during the first few months was stable.But the bankruptcy of the US Inves
76、tment Bank Lehman Brothers in the middle of September and the increasingly acute crisis on global financial markets triggered falls in the value of shares around the globe.GK SOFTWARE AG shares were not immune to this trend and traded at their lowest level since the IPO(EUR 10.00)on 28 October(Xetra
77、,intraday basis).But the value of the shares had recovered significantly by the end of the year.As a result the value of the shares on 30 December 2008 was EUR 13.00 and this corresponded to a market capitalization of EUR 21.7 million at the end of the year.iii.IPO and Capital IncreaseThe companys a
78、nnual shareholders meeting took two decision on 15 May 2008 to increase the equity capital,partly by converting the balance sheet profits and partly by converting“other retained income”amounting to EUR 0.155 million to EUR 1.25 million in the run-up to the IPO.The increase in equity capital was achi
79、eved without issuing any new shares.At the same time,it was decided to introduce a share split on a 1:250 ratio,with the result that a nominal value of EUR 1.00 in the equity capital was allotted to each par value share.The increase in share capital and the share split were both entered in the Comme
80、rcial Register on 29 May 2008.The companys equity capital then rose from EUR 1.25 million to EUR 1.665 million as a result of the IPO on 19 June 2008.In all,415,000 par value share payable to the bearer were also listed on the capital markets with a nominal value of EUR 1.00 in the equity capital at
81、 a price of EUR 21.00.The shares are fully entitled to receive dividend from 1 January 2008.31.36%of the IPO shares were assigned to private investors.Institutional Performance of GK SOFTWARE AG shares compared with the TecDAX since the IPO on 19 June 2008(in percent)-60-50-40-30-20-100in%GK SOFTWAR
82、E AGTecDAXJulyJune 08AugustSeptemberOctoberNovemberDecemberJanuaryFebruaryMarch 09Share price on 31 March 2009:EUR 11,25 Shareholder structure at GK SOFTWARE AG on 31 December 2008investors from Germany and abroad snapped up the other 68.64%of shares.The gross yield from the IPO was approx.EUR 8.7 m
83、illion and this will primarily be used for further investments and the international expansion of GK SOFTWARE AG.Key factsGerman Securities Identification Number(WKN)757142ISINDE0007571424Ticker symbolGKSIPOJune 19,2008Type of sharesNo-par value bearer sharesStock exchangesFrankfurt and XETRASegment
84、Regulated Market(Prime Standard)Designated SponsorICF Kursmakler AGNumber of shares outstanding1.665,000Number of shares from capital increase415,000Share capital1,665,000 EURFree float24.33%Offering PriceEUR 21.00Gross Issuing Volume EUR 8.72 millionFirst Price(XETRA)Jun.19,2008EUR 21.40iv.Sharehol
85、der StructureGK SOFTWARE AG has a very stable shareholder base,which allows the company to pursue sustainable,long-term growth.The company had the following shareholder structure at the reporting date on 31 December 2008:The founder and CEO Rainer Gl directly holds 2.85%of the shares.Stephan Kronmll
86、er,also a founder and the companys CTO,also has a direct holding of 2.25%of the shares.70.57%of the shares are owned by GK Software Holding GmbH,which are indirectly equally shared by the company partners Rainer Gl und Stephan Kronmller.This means that 24.33%of the shares are in free float.v.Investo
87、r RelationsGK SOFTWARE deliberately opted to have its shares listed in the most strictly regulated sector of the German stock exchange,the Prime Standard,for its IPO in the summer of 2008.From the outset,the highest possible levels of transparency towards its investors and all the other capital mark
88、et participants were among the most important principles at the company.The Management Board was involved in an in-depth dialogue with investors and financial journalists even before the IPO.The key task after the initial listing was to convince the shareholders about the companys successful growth
89、and its business model.For this purpose,the Management Board held comprehensive talks with investors and analysts in Germany and abroad.The company also attended the German Equity Capital Forum in November 2008 to answer questions from interested parties.GK SOFTWARE AG also attaches great importance
90、 to providing an ongoing flow of information for the future.Among other things,this means drawing up extensive quarterly,half-yearly and business reports in German and English,a financial calendar and the prompt publication Rainer GlStephan KronmllerGK Software Holding GmbHFreefloat2.85%2.25%24.33%7
91、0.57%15141.TO OUR SHAREHOLDERSiv.Financial calendar2008 annual reportApr.16,2009First quarter report for 2009May 14,2009Annual General Meeting in 2009Jun.15,2009Report on the first six months of 2009Aug.13,2009Third quarter report for 2009 Nov.12,2009of ad-hoc reports.Accounting,which has been adapt
92、ed to meet the international accounting standards(IFRS),also meets investors needs for information.The company is also planning to regularly attend analyst conferences and road shows both in Germany and abroad during 2009.17162.CONSOLIDATED MANAGEMENT REPORTa Business and Underlying Conditions for G
93、K SOFTWAREi.Corporate Structure and ShareholdingsGK SOFTWARE is one of the leading software partners for the retail trade.The company was set up by Stephan Kronmller and Rainer Gl in 1990 in Schneck,where the company headquarters have been located since that time.Schneck is the base for administrati
94、ve services and product development,project management and third level support.The company has an office in Berlin,which manages the companys marketing,sales and partner work.The 100 percent subsidiary EUROSOFTWARE s.r.o.based in Plzen in the Czech Republic handles software production work and resea
95、rch and development activities.So it is the major center for programming and further developments in technology.GK SOFTWARE AG also owns another 100 percent subsidiary,StoreWeaver GmbH,located in Basel/Riehen in Switzerland.This company is responsible for developing and selling the StoreWeaver produ
96、ct group and its technology could well be used in other fields as well as the retail sector.StoreWeaver opened its first business location in Germany in November 2008 in St.Ingbert in the state of Saarland.This center is mainly used as an innovation base and it has been possible to attract experienc
97、ed IT experts to the company.The two founding members,Rainer Gl(CEO)and Stephan Kronmller(CTO)are members of the Management Board at GK SOFTWARE AG.The Management Board also includes 2.Consolidated Management ReportI.Business ReportRonald Scholz(COO)and Andr Hegert(CFO),who worked as an external con
98、sultant for GK SOFTWARE AG from the spring of 2007 onwards and was appointed to the Management Board as CFO from 28 March 2008.The three-man Supervisory Board at GK SOFTWARE AG is headed by Uwe Ludwig.He has been a member of the Supervisory Board since 2001.The deputy chairman,Heinrich Sprenger,has
99、also been a member of the board since 2001.Thomas Bleier joined the Supervisory Board in 2003.ii.Human Resources GK SOFTWARE employed 213 people at the report date of 31 December 2008 this is an increase of 49 on the previous years figure(164).The second management level has been reinforced and more
100、 people have been hired in the project management department.The majority of employees(109 up from 85 a year earlier)work at company headquarters in Schneck.The Berlin office has eight employees they focus on sales and marketing in addition to project and partner management there.90 people are now e
101、mployed at the Czech subsidiary EUROSOFTWARE s.r.o.in Plzen(67 one year ago).The number of employees at StoreWeaver GmbH in Basel/Riehen(CH)and St.Ingbert has increased to six people.In the light of ongoing strong growth and many new projects,the company is planning to hire more staff during the nex
102、t few months,particularly in the project management,sales and R&D departments.In order to be able to control and promote corporate growth at GK SOFTWARE in terms of personnel,large amounts were invested in training and developing employees in 2008.A one-year trainee program was set up to deliberatel
103、y make qualified staff available.Five young people were taking part in this program at the reporting date on 31 December 2008.The scheme is designed to be available for about five to seven participants every yearGK Soft GmbHStoreWeaver GmbHEUROSOFTWARE s.r.o.100%100%100%Corporate structure at GK SOF
104、TWARE AG iii.Products and ServicesThe GK/Retail suite provides market-leading solutions for retail stores,the head office and end-to-end integration between stores and enterprise headquarters.All the GK/Retail solutions are fully based on Java and open standards.They provide the opportunity for comp
105、anies to comprehensively map business processes all round the stores.The official release of the new major version called GK/Retail 12,which took place in the fall of 2008,marks a significant milestone in the development of the product family.It contains a variety of innovations at functional and te
106、chnological levels.The ABC technology(Advanced Business Components),which has already been used in individual solutions,now provides an integrated architecture principle for all the individual components in the standard software.Newly developed or further developed components can easily and precisel
107、y be added to the overall structure like Lego bricks.Significant improvements have been made in Version 12,particularly for customer services in stores.Store SolutionsThe GK/Retail Store Solutions range of products is particularly used in retail company stores and includes the following components:G
108、K/Retail POS is a software solution for operating till systems.The application guarantees that all business processes are handled securely at the point of sale(POS)and it also provides extensive back office functions.GK/Retail Mobile is used on mobile terminals with standard operating systems and al
109、lows members of staff in a store to handle central business processes directly in the building,on the shelves or in a warehouse.GK/Retail Mobile covers important business tasks in stores e.g.deliveries,inventories,write-offs and accounts for empties machines.The information required for these proces
110、ses is directly available on mobile terminals for the goods.This means that members of staff have permanent access to important information like prices and the availability of goods.The devices can access background systems at high speed using wi-fi services,but can also work offline.GK/Retail Workf
111、low optimizes communications processes by means of an automatic,simultaneous and controlled distribution of any amounts of information within a store-based enterprise.The module,which has been specially designed to meet the needs of the retail sector,allows the flow of information to be increased wi
112、thin stores and between stores and enterprise headquarters and prevents information from going missing.GK/Retail Merchandise Management provides merchandise management processes in stores in conjunction with a central management system(e.g.SAP).This means that stock information in stores is always a
113、vailable in real time.The software supports important business processes like placing orders,inventories,price labeling or stock reportsEnterprise SolutionsGK/Retail Enterprise Solutions provide innovative solutions to enable enterprise headquarters to monitor and manage complex store structures.The
114、se solutions are based on the unified architecture of GK/Retail and dovetail with the solutions conceived for use in stores or with StoreWeaver.The GK/Retail StoreWeaver Enterprise server is the central nerve center for Distribution of employees at group business locations on 31 December 2008 2007 1
115、64 employees2008 213 employeesPlzenRiehen/St.IngbertWalldorfBerlinSchneck19182.CONSOLIDATED MANAGEMENT REPORTthe store server applications.Enormous savings potential at retail companies can be made by bringing together the systems,particularly when it comes to server care and management or simplifyi
116、ng the IT structure.The GK/Retail Lean Store Server allows all the back office services to be centralized.This means that stores are relieved of complex data storage,many processes and elaborate IT technology.In order to guarantee that the stores can continue working,even during a power outage,the B
117、CM technology(GK/Retail Business Continuity Manager)has been developed.It ensures that the quality of data is consistently high when using central back office servers.GK/Retail Enterprise Storemanager is a software solution for administration and technical monitoring services for large store network
118、s,including those that cross national frontiers.The solution allows extensive central management of basic data from stores and automatically supplies stores with this information.GK/Retail Enterprise Cockpit summarizes specialist and technical views of the complete corporation in a visualized displa
119、y.This allows operators to recognize technical problems in the stores immediately and sales data(like turnover)can be monitored in real time.This solution provides transparency throughout the corporation,both in terms of the status of systems in the stores and central business management data.GK/Ret
120、ail Enterprise Promotions Management is a complete solution for establishing,managing and administering sales promotions and special offers across the company.Typical applications include the management system for granting discounts in customer card systems or the acceptance of any number of coupons
121、 at tills.GK/Retail Stored Value Server guarantees the secure administration of all used gift certificates across any company.It provides a central data base for all the gift certificate information in the whole corporation and also handles all the processes linked to electronic gift cards.GK/Retail
122、 Digital Content Management is the central solution for distributing any amount of information to different output devices all over the company.As a result,photos,slide shows or videos can be distributed to the appropriate systems in the company or even simple text messages(e.g.for electronic shelf
123、labels).StoreWeaverThe StoreWeaver portfolio expands the GK/Retail Suite in the areas of store integration,linking up subsystems and merchandise management processes in stores.The primary task involves downloading and uploading the various stores systems on schedule(e.g.scales and tills)with current
124、 data.StoreWeaver also guarantees that data can be collected and fed on to central systems.If StoreWeaver is used as the universal data hub and interface for ERP systems(e.g.SAP),it is possible to link up and communicate with different software and hardware systems(empties machines,scales,tills,mobi
125、le terminals etc).There is only one interface in the store itself and all communications are handled via this point.It is then impossible for complex interrelated networks to occur at all.Mechanisms like transaction security,central monitoring,authorization and configurability guarantee smooth opera
126、tions at small or large store networks.ServicesGK SOFTWARE AG not only sells products,but also provides extensive services.For example,they include analysis and consultancy work when implementing new store solutions or adapting solutions already in place to the customers enhanced requirements e.g.th
127、e integration of new bonus systems in the till environment.The company also handles the preparation work for documents and training for handling the software products and provides the appropriate project management skills within the scope of projects.New Solutions and UpgradingGK SOFTWARE was able t
128、o introduce a number of important innovations during 2008.The most fundamental new development was the consistent availability of all the solution elements as Advanced Business Components(ABC).The consistent implementation of the ABC concept,which has been developed by GK SOFTWARE,allows customers t
129、o decide which parts of the software they would like to use centrally or locally.This provides an even higher realization speed and flexibility for current and future projects.At the same time,GK/Retail with release 12 is based on the current Java version,which opens up new opportunities for develop
130、ing software and improving security concepts.The integration of Windows and Linux environments,which have been optimized for retail applications,and support for other enterprise data bases have been completed with release 12.Many detailed improvements accelerate work with the solutions and allows ne
131、w business processes to be handled.For example,the integration of a mobile payment solution or the ability to link up a self-checkout feature are increasing the attractiveness of GK/Retail and demonstrate the openness of the solution when linking in outside applications.GK/Retail has also been prepa
132、red for use in a new sector where there is a huge need for investments:new functions have been developed for the drinks sector.Two new country versions were realized by GK SOFTWARE in 2008 Hungary and Russia.This means that there are now versions for 26 countries.Three other national versions are cu
133、rrently being prepared.After successfully participating in the most important North American retail IT fair(National Retail Fair or NRF)in New York at the start of January 2009,GK SOFTWARE AG presented some more new features shortly afterwards:The new major version,GK/Retail 12,was presented to a sp
134、ecialist audience at the EuroCIS in Dsseldorf for the very first time the EuroCIS is Europes leading trade fair for information technology and security in trading.In addition,the company also used this fair to demonstrate its new digital signage solution with the GK/Retail Digital Content Management
135、 system for the first time.It can be used,for example,to automatically distribute photos,slide shows or videos to appropriate output media throughout a company.A newly developed integrated solution for digital signatures at POS units was also on display.StoreWeaver introduced the latest version of i
136、ts integration platform for stores the new label printing module and new mobile solutions.iv.Research and Development The further development of existing products and the development of new software solutions have always been the major focus at the company over the past few business years and they w
137、ill continue to be a competitive factor in the future too.This is reflected by the continually rising number of employees in this department.The subsidiary EUROSOFTWARE s.r.o.in Plzen is responsible for the research and development work.GK SOFTWARE employs 15 software developers alone there and they
138、 are dealing with the current trends in the software market in order Lean Store ServerEnterprise StoremanagerEnterprise CockpitEnterprise Promotions ManagementStored Value ServerPoint of SaleERP-SystemSubsystemeBackstore ManagementWorkflowMerchandise ManagementBusiness Continuity ManagerMobileStore
139、SolutionsEnterprise Solutions21202.CONSOLIDATED MANAGEMENT REPORTto develop new trend-setting products.Additional impetus for research comes from management,sales and marketing and directly from customers of GK SOFTWARE AG.The successful completion of the major version 12 was one particular key busi
140、ness activity during the 2008 business year.Extensive development work,years of research and the experience gained from many international large-scale projects have all been incorporated in GK/Retail 12.Alongside this,other new solutions were developed.The new GK/Retail version,for example,has a ful
141、ly integrated digital signature feature.This allows quick processes at the point of sale(POS)without the need for any paper and provides immediate access to data stored in Backoffice and enterprise headquarters.Development work on a solution for distributing digital information in stores(e.g.to mana
142、ge advertising materials on flat screens)was completed with the introduction of the GK/Retail Digital Content Management application.In addition to this,the software solutions will be further developed to open up access to additional business sectors.The integration of a solution for mobile payment
143、and the incorporation of self-checkout tills were also completed in 2008,so that these items are now ready for sale.The central architectures were also further developed to enable customers to distribute components in the software at will.Another key element in our work was PCI-DSS,the standard deve
144、loped by credit card institutions to provide the safe handling of card data.Retail companies are responsible for adhering to these international rules and checking them.GK/Retail is a modern application that is designed in such a way that security risks cannot arise in the first place.As the PA DSS
145、rules have all been implemented,the current version is now being checked by external inspectors.This work will probably be complete by the summer of 2009.GK/Retail was certified by IBM for the new Retail Integration Framework(RIF)in close conjunction with IBM at the start of 2009.Work on renewing ce
146、rtification for SAP has also been started and is due to be completed by the end of May.The conceptual design of mobile and merchandise management processes at stores were the major focus for the StoreWeaver software and realization work has already begun here.Approval for new operating system option
147、s was granted in 2008.The major emphasis was on the scheduled further development along the road map and also on integrating new ideas and technologies based on information acquired from sales and marketing operations and customers themselves.v.Customers and Projects The customers for GK SOFTWARE pr
148、oducts mainly come from the retail sector at the moment.Particular market segments include the food retail sector,drugstore and household goods,fashion and lifestyle or technology and cars.The company provides pre-configured solutions in the cash&carry,department store,discount/food,specialist retai
149、l and cell phone sectors.These products are tailored to the needs of these segments.The products and services are designed for companies of various sizes.Important new projects in 2008:Coop(Switzerland,1,400 stores,various sales lines,new solution for label printing)Hornbach(development of a customi
150、zed home improvement store version of GK/Retail,128 stores in nine countries)Lidl(8,000 stores in more than 20 countries)JYSK Nordic(21 countries including china,many mobile processes)Manufactum(9 stores in Germany)TSG 1899 Hoffenheim(equipping the fan shops in the new stadium at Sinsheim)All the pr
151、ojects are being implemented on schedule and initial production roll-outs have already taken place at Coop and Lidl(for the newly acquired project in 2009).vi.Market and Competitive EnvironmentThe success of GK SOFTWARE is affected by economic developments and the willingness on the part of the reta
152、il sector to make investments.Sales in the retail sector in Germany rose by 1.1%to EUR 399.6 billion in 2008.But in real terms sales declined by 0.8%.As per 30 March 2009,the German Retail Association(HDE)is expecting nominal sales in the retail sector during the current year to range between zero a
153、nd minus 1 percent.The HDE says that investment volumes will probably be lower than those of the previous year.1 Developments largely depend on the situation in the jobs market.The IT budgets at retail companies normally amount to 1%of gross sales(in a range between 0.4 and 1.3%).If the global econo
154、mic crisis does not create major long-term break-downs in the real economy and specific developments in the retail sector are roughly within the expectations of the HDE,GK SOFTWARE AG believes that the general development trends enjoyed in 1 Source:http:/www.einzelhandel.de/servlet/PB/1096030_yno/in
155、dex.html;Statement by HDE Managing Director Stefan Genth during the HDE press conference on the economic situation in Dsseldorf on 30 March 2009 the past can be continued.In the course of increasing expansion and the growing intensity of competition,the retail sector will have to press ahead with mo
156、re investments in the near future.After all,information technology is viewed as a critical success factor at most retail companies.So the retail sector could have to make further investments in the IT area.According to a survey carried out by the EHI Retail Institute in Germany,IT equipment is on av
157、erage more than six years old.About 20%of existing systems are even 10 years old or more.The most important demands on modern IT systems are that they should optimize processes and encourage customer loyalty.In its latest study entitled“IT Investments in Trade in 2009”,the EHI emphasizes that the is
158、sue of till software is the highest priority for stores.Older software systems are increasingly unable to cope with requirements,which are becoming more and more complex,and they need to be replaced.According to information provided by the EHI,fairly large proportions of the IT budget could be inves
159、ted in web-based information portals for stores and the technical requirements for this are largely in place already(broadband services etc).The EHI underlines that another major issue for those making decisions on IT investments is the introduction of new solutions for mobile data acquisition.Almos
160、t 20%of companies questioned are planning to use self-checkouts in future and 10%at least want to test them.Many German retail companies have now also internationalized their business operations.According to a study carried out by KPMG(“Trends in Trading in 2010”),efforts to establish an internation
161、al presence are one of the most crucial factors for the retail sector.New,strategically attractive target markets are,for example,the USA and Russia.According to the study,an international presence and Germanys proximity to Eastern European markets are the most important factors behind the expansion
162、 of German retail companies.This also provides huge sales and growth opportunities for GK SOFTWARE.In addition,the issue of customer retention is playing an Slection of customers of the GK SOFTWARE AG23222.CONSOLIDATED MANAGEMENT REPORTincreasingly important role for the retail sector.Consumers are
163、looking even more closely for ways to make savings,particularly in a time of recession.This fact and the opportunities that GK products provide to integrate a wide variety of bonus and gift certificate systems opens up potential sales markets for GK SOFTWARE.According to the study entitled“SITSI Ver
164、ticals-Retail&Wholesale Germany”prepared by Pierre Audin Consultants(PAC),IT expenditure in the retail sector was approx.EUR 6 billion in Germany in 2007 and will rise to approx.EUR 6.5 billion by 2011.According to estimates made by PAC,the market potential for GK SOFTWARE in Germany could lie betwe
165、en EUR 250 and 290 million from the total IT investments that need to be made.The total number of stores in sectors targeted by GK SOFTWARE AG in the past was approx.49,000.Taking into account the strategically planned penetration of other retail sectors,the target segment would increase by 100%to 9
166、8,000 stores.The company is aiming to benefit from this additional market potential in future.PAC assumes that IT investments will mainly focus on two target areas in the next few years:firstly,reductions in costs and optimization and secondly,matters related to customers to a greater degree.This,it
167、 says,will particularly affect the till area with new hardware and software in order to speed up payment procedures,unify store processes and increase customer loyalty.Even if the growth in IT investments is muted in 2009 and possibly in 2010 too,sector experts still believe that there is plenty of
168、potential for the IT market in the retail sector.Greater standardization and automation of processes and therefore of IT systems will stimulate investments both at store and enterprise headquarters levels.Market Position As a result of its successful IPO,the company has been able to significantly im
169、prove its market position.This is partly evident from the number of new projects like JYSK Nordic or Hornbach,and the companys good competitive position in current tendering procedures.The companys rapid implementation of projects,wide portfolio of products,solutions that are internationally compati
170、ble and the long-term reductions in operating costs are all crucial advantages that GK SOFTWARE AG enjoys over its rivals.Reductions in operating costs in particular are an important argument for acquiring news customers in Great Britain and France in the future(total cost of ownership).GK SOFTWARE
171、has many competitors,which vary in their corporate size,range of products and the target markets that they address.Approx.10,400 stores in Germany were using solutions from GK SOFTWARE AG on 31 December 2008,which represents a significant market share of approx.21%in the markets that have been targe
172、ted so far.The company has successfully squeezed out rivals and has therefore grown much faster than the market itself during the last few years.The company has been able to penetrate the market contrary to its rivals,particularly during the last few months.GK SOFTWARE AG was able to win all six of
173、the most important jobs,for which it bid in 2008.Mention should particularly be made here of new customers in the shape of the Swiss retail group Coop,Hornbach Baumarkt AG and the Danish furniture and fittings specialist,JYSK Nordic.This means that the company has been able to demonstrate its compet
174、itive advantages and innovation leadership in the fields of technology,functionality and international capabilities on an international scale too.The company is benefiting from its position as the leading technology provider of software solutions for the retail sector.GK SOFTWARE can be distinguishe
175、d from complete providers,which offer hardware(e.g.tills,printers)and software for operations in retail stores.On the other hand,it is also different from service companies,which also focus on retail software,but have invested less in technology and do not provide any state-of-the-art software solut
176、ions.The combination of store solutions,central components,mobile merchandise management solutions for stores and an integration platform provide unique selling points as no other rival has a comparably large range of products that incorporate the latest technological solutions.vii.Corporate Strateg
177、ySince it was set up,GK SOFTWARE AG has continually pursued further developments on its own.The companys primary goal is to continue to expand its market presence on the core German market.To achieve this,the company is continually analyzing the IT infrastructure of leading German retail companies i
178、n order to recognize any possible investment needs at an early stage and be included in tender procedures for IT projects.GK SOFTWARE AG is aiming to acquire other customers like this and expand relations with existing customers.The company also wishes to open up new sectors and expand its customer
179、basis in Germany.The company will continue to strengthen its sales and marketing organizational work in this specific direction.One important component in the companys growth strategy involves targeting the small and medium-sized retail company market sector.This expansion of business is initially s
180、et to apply to the German market,as the company already has a strong market position here.But there are also plans to gain access to this new circle of customers using strategic partners,which,for their part,have specialized in small and medium-sized retail companies.But the German market is not the
181、 only aim:the company also wishes to penetrate the international market to a greater degree.Strategic partnerships should also make this global expansion possible.The revenues from the IPO provide the financial basis for this international expansion process.The company wishes to focus on leading ret
182、ail companies in the markets in question in order to acquire showcase projects.In a further step,the company would like to set up its own branch offices or sales subsidiaries in the countries involved,depending on how attractive the market is there.The international expansion will be backed up by de
183、liberate marketing activities in order to increase the companys profile in the individual markets.The main geographical target markets are initially German-speaking neighboring countries and Great Britain,the USA and Russia.The company can already demonstrate initial major successes in its expansion
184、 strategy through acquiring new international customers like the Swiss retail group Coop or the Scandinavian group,JYSK Nordic.Specific strategic acquisitions of companies or joint ventures are viewed as a tool to achieve the goal of becoming one of the worlds leading international complete provider
185、s on the market for software solutions for the retail sector.Possible target companies could be foreign firms,which have an established market position and customer contacts in their region.Countries where customers of GK SOFTWARE AG have their corporate headquartersDirect target markets for GK SOFT
186、WARE AGCountries where GK SOFTWARE AG solutions are already in use25242.CONSOLIDATED MANAGEMENT REPORTb.Explanation of the Business Results and an Analysis of the Assets,Financial and Earnings Situationi Earnings SituationGK SOFTWARE once again increased its growth in a strong manner in the 2008 bus
187、iness year.Both sales and results rose significantly.Sales revenues amounted to EUR 15.30 million,compared with EUR 10.75 million in the previous year,and this represents a growth rate of 39.9%.The annual net income rose by 30.1%from EUR 1.56 million to EUR 2.03 million.The reason for the significan
188、t improvement in sales and earnings was the wide customer base,which generated important new projects.At the same time,existing customer relations were deepened and expanded and this resulted in several follow-up orders for major projects,which had already been completed.After successfully realizing
189、 these,the company completed a number of these orders by December 2008 so that they had a positive effect on earnings e.g.the roll-out for Galeria Kaufhof GmbH or the“Depot”project.Taking into account the total sales in the 2008 business year,approx.20.6%came from licenses(32.9%in the previous year)
190、.Services accounted for 56.9%of earnings(54.5%in the previous year),while maintenance work accounted for 17.7%(12.3%).Taking into account the change in stocks of finished goods and work in progress and own work capitalized,which were executed to the required degree in the business year that has just
191、 expired,total operating revenue increased from EUR 11.19 million in 2007 by 28.5%to EUR 15.01 million in 2008.Gross profits improved by 29.5%to EUR 14.49 million(EUR 11.68 million in the previous year).As a result of these above average figures for this sector,the company can once again underline i
192、ts efficient use of resources.Expenditure on materials,which totaled EUR 0.51 million(EUR 0.49 million in the previous year),mainly included hardware costs.Taking into account the planned ongoing growth at GK SOFTWARE,development capacities were expanded in the course of 2008 and appropriately quali
193、fied members of staff were hired to handle the growing number of major projects.As a result,human resources expenditure rose by 30.8%from EUR 6.15 million to EUR 8.05 million.This means that the human resources expenditure rate was 53.5%-57.3%in the previous year.Scheduled write-downs in the company
194、 building and own work capitalized led to depreciation of EUR 0.72 million(EUR 0.53 million in the previous year).Other operating expenditure increased from EUR 2.18 million to EUR 2.95 million during the 2008 business year.This not only included expenditure on marketing,sales and administration cos
195、ts,but also the expenditure for the IFRS accounts.The increasing standardization of products and processes at the company particularly increased productivity during the reporting period.On the earnings side,GK SOFTWARE generated earnings before interest and taxes(EBIT)of EUR 2.77 million in 2008.Thi
196、s means that the EBIT rose by almost one fifth when compared with the previous years figure of EUR 2.33 million.In terms of the total operating revenue,the EBIT margin amounted to 18.5%,while the figure was 20.0%in the previous year.The financial results in 2008 were EUR 0.1 million(EUR-0.12 in the
197、previous year).Interest payments amounting to EUR 0.14 million were largely the result of real estate funding and the costs of servicing a silent partners interest.So the company was able to increase its earnings before taxes(EBT)by 29.2%to EUR 2.86 million(EUR 20072008 Developments in sales compare
198、d to the previous year and a breakdown of the various sectorsLicensesMaintenanceServicesOther2.22 million in the previous year).After taxes,the consolidated annual net income amounted to EUR 2.03 million,an improvement of more than 30%over the previous year(EUR 1.56 million).Based on the outstanding
199、 number of shares(1,665,000)at the reporting date,this represents profits per share of EUR 1.22.When calculating the weighted average of issued shares(1.472.240 shares),this provides a figure of EUR 1.38 per share.ii.Asset SituationAs a result of the IPO and the associated capital increase during th
200、e first six months,the balance sheet total for GK SOFTWARE increased significantly from EUR 11.83 million(31 December 2007)to EUR 19.63 million at the reporting date on 31 December 2008.This figure also includes a significant increase in the reported equity capital from EUR 2.08 million to EUR 11.78
201、 million.In conjunction with the improvement in the earnings situation,the equity ratio increased to 60.0%,while the figure was only 17.6%on 31 December 2007.The IPO generated gross revenues of EUR 8.72 million.This means that GK SOFTWARE has a very stable capital structure and can sustainably fund
202、future growth.It was possible to reduce the non-current liabilities to EUR 2.38 million at the end of the year,whereas the figure was EUR 2.87 million on 31 December 2007.This particularly includes the funding for the companys own real estate in Schneck.The changes resulted from agreed repayments an
203、d a repayment of the silent partners interest into current liabilities.It was also possible to reduce the latter to EUR 5.46 million(EUR 6.88 million on 31 December 2007).They mainly contain advance payments by customers,which therefore represent an important tool for company funding.If the cash and
204、 cash equivalents are contrasted with the interest-bearing liabilities amounting to EUR 1.26 million,this results in net accounts payable of EUR-7.60 million.which means that GK SOFTWARE AG is to all intents and purposes free of debt and largely independent of any outside bank funding.On the assets
205、side,the long-term assets rose from EUR 3.77 million to EUR 4.22 million,which is largely the result of changes to intangible assets.They rose from EUR 1.13 million on 31 December 2007 to EUR 1.63 million on the reporting date of 31 December 2008.This development is particularly due to the capitaliz
206、ation of own work in the further development of the GK/Retail software suite,which the company handled according to the accounting rules.In addition,minor investments were made in outside licenses.Property,plant and equipment remained at a similar level as in 2007 EUR 2.59 million compared with EUR
207、2.62 in the previous year.These figures mainly contain real estate and buildings(primarily the real estate in Schneck)at approx.EUR 2.17 million and operating and business equipment at EUR 0.42 million.Taking a year-on-year rate,current assets also increased.The figure rose from EUR 8.06 million 200
208、8200720062005 Changes in EBIT between 2005 and 2008EBIT in EUR thousand3,0002,5002,0001,5001,000500027262.CONSOLIDATED MANAGEMENT REPORT(on 31 December 2007)to EUR 15.38 million on the reporting date(31 December 2008).The reason for this is primarily the increase in cash and cash equivalents as a re
209、sult of the IPO from EUR 2.90 million at the end of 2007 to EUR 8.85 million at the end of 2008.On the other hand,existing inventories fell from EUR 2.00 million to EUR 0.74 million in connection with the successful acceptance of projects and particularly the completion of the major project for Gale
210、ria Kaufhof GmbH.Trade accounts receivable increased in conjunction with the companys expanded business operations on the reporting date of 31 December 2008 to EUR 3.02 million(EUR 2.26 million on the reporting date for the previous year).The working capital therefore amounted to approx.EUR 9.92 mil
211、lion at the end of 2008(EUR 1.19 million on 31 December 2007).Other accounts receivable and assets accounted for EUR 2.77 million on the balance sheet reporting date in comparison with EUR 0.90 million for the previous year.This item particularly consists of accounts receivable from the public secto
212、r as a result of investment subsidies,accounts receivable from taxes on income and revenues,accounts receivable from menbers of board and disbursed loans towards third parties.The accounts receivable from members of board and the disbursed loans towards third parties are subject to interest and are
213、backed up by securities.iii.Financial SituationThe operating cash flow amounted to EUR 1.43 in 2008,while it was possible to achieve an operating cash flow of EUR 1.92 for the whole of 2007.The reason for the fall is primarily the change in working capital related to the reporting date,which results
214、 from an increase in accounts receivable and a decline in advance payments received and the payment of income taxes,which were incurred in previous years.While the increase in accounts receivable can be explained by the expansion in operating business,the decline in advance payments can be attribute
215、d to the successful completion of projects during the business year like Galeria Kaufhof or Depot.Cash flow in the narrower sense(primarily pre-tax results adjusted by depreciation that does not affect liquidity and income taxes that affect the results),however,rose to EUR 3.54 million in 2008 and t
216、his reflects the high earning capacity of GK SOFTWARE AG.After totaling EUR-2.05 million in the 2007 business year,the cash flow from investments amounted to EUR-2.58 million.The lower payments for investments are largely due to the disbursement of loans.Investments in property,plant and equipment h
217、ave returned to normal levels following the special situation where investments were made in expanding company headquarters at Schneck.The financing of the building at the companys headquarters was the crucial factor here last year,whereas investments in 2008 were primarily made in office and busine
218、ss needs,particularly computer hardware and software to equip workplaces and the further development of the GK/Retail software suite.The cash flow from funding operations amounted to EUR 7.10 million in 2008 after a figure of EUR-0.57 million in the 2007 business year.The reason for this increase is
219、 primarily the inflow of cash and cash equivalents as a result of the IPO,as a result of which GK SOFTWARE was able to achieve revenues of EUR 8.7 million before IPO costs.Thanks to the expansion of operating business and the success of the companys capital increase,it was possible to increase cash
220、and cash equivalents significantly from EUR 2.90 million(31 December 2007)to EUR 8.85 million by the end of 2008.As a result,GK SOFTWARE has very solid current assets in order to be able to fund the planned further growth with the necessary securities.GK SOFTWARE AG received an order from the food r
221、etail company Lidl in February 2009 to supply the new store software for the complete network of Lidl stores in Europe.So GK SOFTWARE AG will provide software for the POS and background systems at approx.8,000 Lidl stores in twenty countries and the software to manage the stores.Lidl has already bee
222、n operating DOS-based till software from GK SOFTWARE AG in more than half its stores since the end of the 1990s.This will now be completely replaced by the modern Java software,GK/Retail.GK SOFTWARE was also able to report at the beginning of March 2009 that Netto Marken-Discount AG&Co.KG,which is p
223、art of EDEKA,will switch all the PLUS stores that it has taken over to GK/Retail during the next few months.The approx.2,500 stores will be equipped with the same software solutions from GK SOFTWARE AG as are already being used by Netto.GK SOFTWARE AG is going to complete its first order as the prim
224、e contractor including the complete roll-out and support for Gebr.Heinemann KG,a leading operator of airport shops in many different countries.A start was made on the roll-out of the system in the spring of 2009,initially in approx.130 shops at airports in Germany and Denmark.For this project,GK/Ret
225、ail has been specially adapted to the specific requirements for selling items at airports and the duty-free business.The roll-out in Germany is due to be completed in 2009.At the same time,preparations will be made to switch the stores in Denmark.After this,there are plans to equip Gebr.Heinemann sh
226、ops in other countries.After the reporting date,GK SOFTWARE AG was able to acquire more customers and this will have a positive effect on sales and revenues in 2009 for the first time.Risks GK SOFTWARE deliberately takes entrepreneurial risks in order to be able to benefit from the opportunities pre
227、sented by the market.In order to recognize,manage and minimize risks at an early stage,the initial modules of a risk management system have already been put in place.These modules include a monthly meeting by the Management Board in order to identify possible risks and initiate countermeasures.The S
228、upervisory Board is informed of the results of these discussions.On an operating basis,the relevant project managers provide information to the appropriate member of the Management Board about possible risks during the course of current projects.GK SOFTWARE believes that the degree of customer satis
229、faction and the number of new customer contacts are important indicators for assessing risks.So both these factors are subject to particular monitoring and are regularly checked as part of sales controls.As a next stage,GK SOFTWARE is planning to prepare an extensive risk management manual in order
230、to identify potential risks in good time,define who is responsible for managing risks and document countermeasures.The business development of customers of GK SOFTWARE depends on the general consumer climate in Germany and Europe.The current global economic crisis has not yet affected the customers
231、of GK SOFTWARE,but no definite forecast can be provided on further developments.In particular,the depth and duration of developments,which are now affecting the real economy,are unclear.The strong declines in incoming orders at German mechanical engineering companies and developments at vehicle manu
232、facturers will have a marked effect on jobs and therefore on the customers of GK SOFTWARE the OECD is expecting as many as five million unemployed in Germany and the numbers of people on short-time work are continuing to rise.These negative forecasts are already being confirmed by developments in th
233、e jobs markets in the USA and Great Britain and the II.Report on Key Events after the Balance Sheet DateIII.Report on Risks and Pros-pects at GK SOFTWARE29282.CONSOLIDATED MANAGEMENT REPORTdevelopments in the retail sector in these countries.It is true that the forecasts provided by associations and
234、 analysts suggest that developments will be relatively calm in the retail trade in comparison with changes in other sectors,but the psychological effects of generally negative news on the investment behavior of the GK SOFTWAREs customers is hard to predict.In response to this general development,the
235、 Management Board is attempting to create room for maneuver by introducing flexible cost measures and using sensible cost management.The companys business is dominated by large individual projects involving a relatively small number of customers.As a result,these business relations have a significan
236、t effect on sales and results in any business year.The Management Board assumes that this will be the case in the future too.If one business partner cancels a project or gets into difficulties with making payments,this may have financial consequences for GK SOFTWARE,but this risk is limited by the u
237、se of regular payment plans or making payments dependent on so-called project milestone payments.The ongoing consolidation of the retail sector market may lead to a reduction in the number of store networks in the short term,so that demand from the retail sector could rise.The retail sector in Germa
238、ny is generally dominated by price wars.Retail companies therefore seek to pass on the resulting pressure on prices to their suppliers and contractual partners.This process is also felt for investments in IT equipment and may have an effect on producers of retail sector software.As GK SOFTWARE,howev
239、er,provides solutions for a highly central function within retail sector groups,these risks are not classified as a threat to the companys existence.The planned expansion is also associated with certain financial risks.These mainly arise from preliminary services provided to acquire customers.In the
240、 course of any further expansion,the project business will have to be increasingly scaled and this will take place by using partners.However,there are other risks when working with partners not every process can be precisely controlled.GK SOFTWARE does not rule out a situation where it partly acquir
241、es its products and sales base by deliberate acquisitions in order to complete the planned expansion of its business operations in the next few years.The company will exercise the maximum possible degree of prudence when preparing for and checking acquisitions.But it is impossible to completely elim
242、inate the risk that an acquisition may have negative effects on the results of GK SOFTWARE.To ensure further growth,the company needs additional highly qualified employees and we cannot rule out the possibility that members of staff in key positions will leave the firm.So it will be an ongoing chall
243、enge for the company to commit current staff to the firm and at the same time attract new,motivated specialists.As a result of the IPO,the company believes that it has created important conditions for this.In addition to the risks already mentioned,there are other factors,which could also affect the
244、 sales and revenue situation.They include,for example,risks from current projects or warranty claims.Exchange rate risks should also be mentioned here,but they will be further reduced in future by using exchange rate hedging instruments.In particular,fluctuations in the euro/Czech crown exchange rat
245、e could have a negative effect.There was no risk at the end of 2008,which might prove to be a threat to the very existence of GK SOFTWARE.Opportunities There are growth opportunities for the company both in Germany and abroad.The issues targeted by the products of GK SOFTWARE are key strategic IT pr
246、ojects that are high on the list of priorities at many retail companies.In order to be a success in the international market place,the company is well placed with plenty of good references from the German retail sector and a technically well-developed product.GK SOFTWARE products are already well re
247、presented on the international market and are being used at more than 55,000 POS units in 13,000 stores in 25 countries.GK SOFTWARE also has several major partners with excellent networks in the retail sector.This should make it easier to gain access to new customers in international markets like th
248、e USA or Asia.The company can make use of the experience that it has gained with its German customers,as the solutions have already been successfully introduced in 25 countries and therefore can be quickly transferred to foreign customers.The growth prospects in Germany have not yet been exhausted e
249、ither by a long way.The focus of GK SOFTWARE will be on new sectors in the future.They include,for example,the drinks trade,catering,restaurants and fast food chains and gas stations and this would significantly expand the target group of potential customers.Fairly small and medium-sized chains of s
250、tores,which have not been a prime target in the past,provide further huge potential,particularly if standardized solutions are sold.Integrated and automated processes for optimizing inventories,managing them and efficient customer management systems can help reduce warehouse costs and increase custo
251、mer loyalty.As a result,the retail trade will almost certainly invest in solutions that integrate all the business processes.Without standardization and simplification of the processes,retail companies margins will come under pressure as well.Homogenized till systems and centralized data flows will
252、therefore be very important to retailers in the future.GK SOFTWARE can clearly benefit from this investment behavior in the retail sector.The funds that have been generated by the IPO are being primarily used for international expansion.After all,the consolidation process in the software industry ha
253、s already started with sector solutions for retailers.GK SOFTWARE wishes to play an active role in this process with its attractive range of products and solid financial base.OutlookIt is difficult to make serious and reliable forecasts about the way that the new business year will develop against t
254、he background of the global economic crisis.Changes in the investment behavior of our customers are likely,depending on the depth and duration of the crisis.Our customers have not yet changed their behavior to extend projects or postpone them or even cancel them.But we cannot rule out reactions like
255、 these in the future and they would have negative consequences on the business operations at GK SOFTWARE.However,we are certain that the basic trends,which have supported the growth of GK SOFTWARE over the past few years,will not change,but at most they may be overtaken by other considerations at ti
256、mes.In order to efficiently service more and more individual consumer needs in an increasingly internationalized world of stores and achieve customer loyalty by using differentiated features that go beyond prices,efficient IT structures will be needed.Exact information about business management issu
257、es within the network of stores will enable companies to manage their networks precisely and achieve positive results,even in economically troubled times and this is only possible if companies have appropriate IT structures.Our newly acquired projects e.g.for the complete European network of Lidl st
258、ores or the software switch of approx.2,500 PLUS markets as a result of the takeover by Netto Marken-Discount are clear evidence of this.We are currently involved in in-depth negotiations with potential customers in Germany and abroad and the progress being made in projects with our existing custome
259、rs is going according to plan.At the same time,we introduced important product innovations on to the market in 2008 with our release 12 and demand for this is high and this represents an important basis for our future growth.31302.CONSOLIDATED MANAGEMENT REPORTWe are therefore expecting further grow
260、th in sales during the 2009 business year with profitability to match.As we have already pointed out,it will only be possible to make this forecast more specific as the year progresses and things will depend on the way that the economy develops particularly the retail sector.As issues like customer
261、loyalty,increasing customer satisfaction and optimizing stores processes in the retail sector become more important,particularly during any economic downturn,we remain confident that business for GK SOFTWARE will continue to be successful in the year 2009.Principles of the salary system at the compa
262、nyThe members of the companys Management Board not only receive a fixed salary,but also a component,which depends on results and is coupled to the consolidated operating results and quality target objectives.According to IFRS,the operating results are defined as the consolidated results before incom
263、e tax and interest and any payments that are dependent on performance.The quality target objectives for the members of the Management Board are set by the Supervisory Board.Contrary to this definition,the gross earnings are used as the basis for the management bonus for the Chief Operating Officer,w
264、here the gross earnings are defined as the net income from project sales over and above the direct costs of the project.An annual bonus,which depends on the annual net income of GK SOFTWARE AG,has also been agreed for the Chief Operating Officer.Quality target objectives have also been agreed for th
265、e Chief Operating Officer.A fixed salary is all that has been agreed for the Chief Financial Officer.The members of the Supervisory Board receive an annual fixed salary.No financial reward based on company performance has been agreed.Information according to Section 315(4)GK SOFTWARE AG is the paren
266、t company of the GK SOFTWARE company group and is using an organized market in the sense of Section 2 Paragraph 7 of the German Securities Acquisition and Takeover Act as a result of the shares it has issued with voting rights.The company therefore has to report its results according to Section 315
267、Paragraph 4 of the German Commercial Code.Capital ratios.1.The equity capital at GK SOFTWARE amounted to EUR 1,665,000 on 31 December 2008 and is divided up into 1,665,000 individual share certificates.Each individual share certificate represents one vote according to Section 4 of the articles of in
268、corporation.Shareholders rights and obligations.2.The same rights and obligations are linked to each IV.Other Information Accord-ing to Section 315 of the Ger-man Commercial CodeCompanies Act.The Supervisory Board may decide the version of the articles of incorporation i.e.only linguistic amendments
269、 to the articles of incorporation.Any decisions taken by the annual shareholders meeting only require a simple majority of the votes cast,if the law does not specify anything different.The Management Boards powers to issue 5.and repurchase shares.Contingency capital.According to Section 4a of the ar
270、ticles of incorporation,the Management Board is entitled to grant purchase options on up to 37,000 individual share certificates to members of the Management Board,company managers,where GK SOFTWARE AG already has a direct or indirect shareholding(“associated companies”)and managers at the company a
271、nd their associated companies on one or more occasions until 14 May 2013,provided that the Supervisory Board approves these measures.The contingency capital increase shall be executed in such a way that the owners of the share options,which were issued as part of the 2008 share option program,make u
272、se of their purchase rights.Approved capital.According to Section 4b of the articles of incorporation,the Management Board is empowered until 14 May 2013 to increase the companys equity capital on one or more occasions by up to EUR 625,000 by issuing up to 625,000 individual share certificates.Purch
273、asing rights must be granted to the shareholders;the Management Board is,however,entitled,to exclude any purchasing rights for one or several capital increases as part of the approved capital in order to balance out fractional amounts,in the case of capital increases against non-cash contributions,p
274、articularly when purchasing companies,if the capital increase takes place through cash contributions and the proportion of the new shares issued according to Section 186 Paragraph 3 Sentence 4 of the German Stock Companies Act,which excludes any purchasing rights,does not exceed 10%of the equity cap
275、ital.There are no major agreements at GK SOFTWARE AG linked to a takeover offer.share.Shareholders are entitled to asset and administrative rights.The asset rights include the right to share in the profits and the buying option to purchase shares in any capital increase.The shareholders participatio
276、n in the companys profits is also defined by their share in the equity capital.Their administrative rights include the right to take part in the companys annual shareholders meeting,speak there and ask questions or make applications and exercise voting rights.Equity shareholdings.3.Any direct or ind
277、irect shareholdings,which exceed 10%,are as follows:Mr.Rainer Gl holds 635,000 shares,a.directly or indirectly,of which 587,500 shares are held indirectly through GK SOFTWARE Holding GmbH.Mr.Stephan Kronmller holds 625,000 b.shares,directly or indirectly,of which 587,500 shares are held indirectly t
278、hrough GK SOFTWARE Holding GmbH.GK SOFTWARE Holding GmbH directly c.holds 1,175,000 individual share certificates.This company is equally owned by Mr.Rainer Gl and Mr.Stephan Kronmller.Appointments to the Management 4.Board and amending the articles of incorporation.Appointing or dismissing members
279、of the Management Board are issues that are governed by Sections 84 and 85 of the German Stock Companies Act.Members of the Management Board are appointed for a maximum period of five years and an extension of their time in office is permissible for a maximum period of five years each time.According
280、 to the articles of incorporation,the number of members of the Management Board is determined by the Supervisory Board,but the Management Board must consist of at least two persons.The Management Board at GK SOFTWARE AG currently has four members.The articles of incorporation can only be amended by
281、the annual shareholders meeting according to the rules of the German Stock AssetsEURNote No.31.12.2008(audited)31.12.2007(audited)Non-current assetsProperty,plant and equipment2.1.;3.1.2,593,082.452,620,143.27Intangible assets2.2.;3.2.1,633,248.881,128,348.62Deferred taxes2.11.;4.9.17,836.3017,689.4
282、8Total non-current assets4,244,167.633,766,181.37Current assetsInventories2.3.;3.3.738,100.001,998,672.25Accounts receivable2.4.;3.4.3,023,201.582,262,831.52Other receivables and assets2.4.;3.5.2,765,481.55897,872.10Cash and cash equivalents2.5.;3.6.8,854,938.532,904,371.54Total current assets15,381
283、,721.668,063,747.41Total(balance sheet)19,625,889.2911,829,928.783.Consolidated financial statements A.Consolidated balance sheet as of December 31,200835343.CONSOLIDATED FINANCIAL STATEMENTS 35Equity and LiabilitiesEURNote No.31.12.2008(audited)31.12.2007(audited)Equity capital3.7.Subscribed capita
284、l1,665,000.00155,000.00Share premium7,436,970.730.00Retained earnings31,095.02207,134.07Balance sheet profits2,649,347.461,718,753.00Total equity capital11,782,413.212,080,887.07Non-current liabilitiesProvisions for pensions and similar commitments2.6.;3.8.48,719.1252,991.15Non-current liabilities t
285、o banks2.7.;3.9.1,140,434.501,251,775.46Deferred government grants2.8.;3.10.749,652.03784,195.00Other non-current liabilities2.7.;3.11.0.00471,214.31Deferred taxes2.11.;4.9.443,405.05313,037.49Total non-current liabilities2,382,210.702,873,213.41Current liabilitiesCurrent provisions2.9.;3.13.798,640
286、.70523,978.32Current liabilities to banks2.10.115,503.60123,888.01Accounts payable2.10.;3.14.525,974.39198,249.71Advance payments received2.10.;3.15.2,271,498.243,498,057.83Income tax liabilities3.16.211,149.471,228,022.25Other current liabilities2.10.;3.17.1,538,498.981,303,632.18Total current liab
287、ilities5,461,265.386,875,828.30Total liabilities7,843,476.089,749,041.71Total(balance sheet)19,625,889.2911,829,928.78EURNoteNo.2008(audited)2007(audited)Continued OperationsSales revenues4.1.15,028,546.8810,744,835.69Changes in stocks of work in progress-1,259,500.00-2,100.00Own work capitalized4.2
288、.814,637.21558,351.64Other operating revenues4.3.424,386.79379,484.93 15,008,070.8811,680,572.26Material expenditure4.4.513,628.62485,679.03Personnel expenditure4.5.8,046,862.156,152,103.83Amortization/depreciation 4.6.718,885.63526,595.39Other operating expenditure4.7.2,954,184.022,183,781.75 12,23
289、3,560.429,348,160.00Operating results2,774,510.462,332,412.26Financial results4.8.89,729.07-115,367.51Results before income taxes2,864,239.532,217,044.75Income taxes2.11;4.9.830,384.12655,755.97Net income2,033,855.411,561,288.78Profit carried forward1,718,753.00283,029.22Transfers to share premium-9
290、18,960.950.00Dividend payments-184,300.000.00Expenditure from the withdrawal of shares0.00125,565.00 Net retained profits2,649,347.461,718,753.00Number of shares issued(average)1,472,240 5,000Undiluted earnings per share(in EUR/share)4.10.1.38312.26B.Consolidated income statement for the financial y
291、ear until January 1 to December 31,200837363.CONSOLIDATED FINANCIAL STATEMENTS 37EUR thousand31.12.2008(audited)31.12.2007(audited)Cash flow from operating activitiesNet income/loss2,0341,561Income taxes affecting results830656Interest income/expenses affecting results-90115Earnings/losses from the
292、sale or disposal of property,plant and equipment180Reversals of deferred government grants-36-11Write-downs recognized for receivables6812Write-ups recognized for receivables-8-14Amortization/depreciation719527Expense from the withdrawal of shares0-126Other non-cash income and expense403,5392,720Cha
293、nges in net current assetsChange in accounts receivable and other assets-1,182-1,552Change in inventories1,2612Change in accounts payable and other liabilities1161,441Change in advance payments received-1,227-96Change in provisions affecting results270-130Influx of cash provided by operating activit
294、ies2,7772,385Interest received23145Interest paid-141-160Income tax paid-1,440-350Net cash flow provided by operating activities1,4271,920Cash flow from investment activitiesPayments for property,plant and equipment and non-current assets-1,215-2,613Investment subsidies used8567Disbursed loans to ass
295、ociated companies-8200Disbursed loans-5520Net cash used in investment activities-2,579-2,046Cash flow from financing activitiesDividend payments-184-800New equity7,8520Draw-down of loans01,425Repayment of credit-120-52Repayment of silent partnership-4500Net cash provided by financing activities7,098
296、573Net increase in cash and cash equivalents5,946447Cash and cash equivalents at beginning of year2,9042,457Impact of changes in exchange rates on cash and cash equivalents50Cash and cash equivalents on 31 Dec.20088,8552,904C.Consolidated cash flow statement as of December 31,2008EURSubscribed capit
297、alReserves (share premium)Reserves(retained earnings)Reserves(retained earnings)TotalBalance on 1 Jan.2007150,000.000.00207,134.071,083,068.471,440,202.54Annual net income0.000.000.001,561,288.781,561,288.78Capital increase5,000.000.000.000.005,000.00Dividend payments0.000.000.00-800,039.25-800,039.
298、25Withdrawal of shares0.000.000.00-125,565.00-125,565.00Balance on 31 Dec.2007155,000.000.00207,134.071,718,753.002,080,887.07Annual net income0.000.000.002,033,855.412,033,855.41Dividend payments0.000.000.00-184,300.00-184,300.00Additions to retained earnings to increase capital 0.000.00918,960.95-
299、918,960.950.00Capital increase from company funds.1,095,000.000.00-1,095,000.000.000.00Capital increase(IPO)415,000.008,300,000.000.000.008,715,000.00Offsetting equity procurement costs with premium share less tax effect0.00-863,029.270.000.00-863,029.27Balance on 31 Dec.20081,665,000.007,436,970.73
300、31,095.022,649,347.4611,782,413.21D.Consolidated statement of changes in equity as of December 31,200839383.CONSOLIDATED FINANCIAL STATEMENTS 391.Reporting Principles1.1.General InformationGK SOFTWARE AG is an Aktiengesellschaft(German stock company)located in Germany.The companys registered office
301、is Waldstrasse 7,08261 Schneck.This is also its headquarters.GK SOFTWARE AG is registered in the commercial register at Chemnitz local court under number HRB 19157.The Groups business activities cover the development and production and selling and trading in software and hardware.Over the past few y
302、ears,the company has moved from being an exclusively project-oriented company to a product-oriented company.The Group manages its capital with the aim of maximizing income for its stakeholders by optimizing the equity/borrowing ratio.This ensures that all of the group companies can operate as going
303、concerns.The companys largest customers include:Lidl Stiftung&Co.KG,Neckarsulm,Edeka(MIOS Grohandel GmbH),Minden,Netto Michael Schels&Sohn GmbH&Co.oHG,Maxhuette-Haidhof,Tchibo Holding AG,Hamburg,dm-drogerie markt GmbH+Co.KG,Karlsruhe,Galeria Kaufhof GmbH,Kln,Parfmerie Douglas GmbH,Hagen.1.2.Basis of
304、 PresentationThe consolidated accounts of GK SOFTWARE AG have been prepared according to the International Financial Reporting Standards(IFRS)of the International Accounting Standards Board(IASB)as they applied at the balance sheet date.Standards,which have been published,but are not yet in force,ha
305、ve not yet been used in the 2008 business year.The Management Board assumes that the effects of these on the annual accounts will not be substantial.The International Standards Accounting Board(ISAB)has not published any new accounting standards(IFRS),which the company had to use for the first time
306、in the current business year.The consolidated financial statements were prepared for the first time according to IFRS as at 31 December 2005The consolidated accounts are presented in euros.The balance sheet is classified according to IFRS in line with the terms of the individual balance sheet items.
307、The income statement has been prepared using the total cost method.As a rule,accounts receivable and payable are shown as current items on the balance sheet.We report pension obligations as non-current liabilities in line with their character.Deferred tax assets and liabilities are shown as non-curr
308、ent.1.3.Consolidated GroupThe consolidated financial statements include GK SOFTWARE AG and all the companies,in which GK SOFTWARE AG holds a majority of the shareholders voting rights.The consolidated group consists of the parent company and three foreign companies.EUROSOFTWARE s.r.o.,Plzen/Czech Re
309、public,StoreWeaver GmbH,Riehen/Switzerland and GK Soft GmbH Zurich/Switzerland were set up as 100%subsidiaries of GK SOFTWARE AG in 2008 and are therefore included in these consolidated accounts for the first time.1.4.Principles of ConsolidationWhen capital is consolidated,the acquisition values of
310、the participating interests are offset against the present values of the acquired assets and liabilities.Any remaining positive difference is shown as goodwill.Any remaining negative difference is shown in income after the fair values of the acquired assets and liabilities have been reviewed.E.Notes
311、 to the consolidated financial statements as of September 30,2008Earnings,sales,expenditure and revenues or accounts receivable and payable within the group between the consolidated companies have been eliminated.1.5.Currency ConversionThe group companies prepare their annual accounts based on their
312、 respective functional currencies.Foreign currency transactions for consolidated companies are converted into the functional currency using the exchange rate on the date of the transaction.Assets and liabilities are adjusted using the valid exchange rates on each balance sheet date.The resulting cur
313、rency gains and losses are shown in income under other operating income or expenditure.41403.CONSOLIDATED FINANCIAL STATEMENTS 412.Accounting and Valuation Principles2.1.Property,Plant and EquipmentProperty,plant and equipment is shown at purchase or production costs plus incidental acquisition cost
314、s,less any scheduled depreciation.As a rule,assets are written down in line with their serviceable life using the linear method on a pro-rata basis.Any expected permanent impairment that goes beyond a loss in value caused by wear and tear is taken into account under unscheduled depreciation.If the r
315、easons for unscheduled write downs no longer exist,the assets are written up accordingly.No major unscheduled depreciation was required.Property is depreciated using the linear method over a serviceable life of 33 years.As a rule,moveable assets are written down using the linear method;the serviceab
316、le life for technical equipment and machinery is 3 to 20 years,and 3 to 10 years for other assets,operating and office equipment.Fully depreciated property,plant and equipment is shown under purchase and production costs and accumulated depreciation until the assets in question are decommissioned.If
317、 assets are disposed of,the purchase and production costs and the accumulated depreciation are deducted and earnings from the disposal of assets(revenues from the disposal less the remaining write-down value)are shown in the income statement under other operating income or other operating expenditur
318、e.2.2.Intangible Assets2.2.1.Purchased Intangible AssetsPurchased intangible assets are shown as purchase or production costs less accumulated amortization and impairment.The amortization expense is shown under income over the anticipated serviceable life using the linear method.The anticipated serv
319、iceable life and the amortization method are reviewed at the end of each fiscal year and any changes in forecasts are taken into account in relation to the future.2.2.2.Internally Generated Intangible Assets Research and Development CostsExpenditure on research activities is shown as expenditure in
320、the period when it was incurred.Any internally generated intangible assets,which stem from development activities(or from the development phase of an internal project),are only shown if the following evidence can be provided:The technical feasibility of completing the intangible asset so that it wil
321、l be available for use or sale.It is intended to complete the intangible asset and use or sell it.It is possible to use or sell the intangible asset.How the intangible asset will generate probable future economic benefits.The availability of adequate technical,financial and other resources to comple
322、te the development work and use or sell the intangible asset;andthe ability to reliably determine the assignable expenses incurred when developing the intangible asset.The amount,with which an internally generated intangible asset is capitalized for the first time,is the total expenditure incurred,s
323、tarting on the date on which the intangible asset fulfills the above criteria.If an internally generated intangible asset cannot be capitalized,the development costs are shown as they affect the results in the period when they were incurred.Internally generated intangible assets are measured in the
324、same way as individually acquired intangible assets:purchase and production costs less accumulated amortization and impairment.internally generated intangible assets are measured in the same way as individually acquired intangible assets:purchase and production costs less accumulated amortization an
325、d impairment.Depreciation starts in the year of capitalization on a pro rata temporis basis2.3.InventoriesFinished goods and services and work in progress are shown under inventories.Finished goods and services and work in progress are shown as purchase or production costs.Costs include the directly
326、 assignable costs as well as the production-related material and production overheads,including production-related depreciation and a reasonable portion of the necessary overheads.Borrowing costs are not capitalized as part of purchase and production costs,as there is no direct connection.If require
327、d,inventories are shown at their lower realizable net marketable value.2.4.Accounts Receivable and Other Receivables Receivables and other assets are reported at their nominal values.Recognizable individual risks have been taken into account by using impairment.2.5.Cash and Cash Equivalents Cash and
328、 cash equivalents are shown at their nominal values.Cash and cash equivalents comprise credit balances at banks and cash in hand.2.6.Provisions for Pensions and Similar CommitmentsProvisions for pensions are measured using the projected unit credit method.Future commitments are valued on the basis o
329、f actuarial surveys.There are re-insurance pension plans,which are pledged to the beneficiaries.As the conditions are met in order to show them as plan assets,the assets are netted with the provision.In this way,the calculations not only take into account the rights to old-age pensions known at the
330、balance sheet date,but also any increases in salaries and pensions anticipated in future and the inflation rate.In line with IFRS,the discount factor is based on the interest rate on the capital market.The corridor method has been used.In other respects,biometric probability calculations have been b
331、ased on Prof.Klaus Heubecks 2005 G mortality tables.2.7.Non-Current LiabilitiesNon-current interest-bearing liabilities are shown at their repayment values.2.8.Government GrantsGovernment grants are not shown until there is reasonable certainty that the group will fulfill the conditions associated w
332、ith the grants and the grants are actually issued.Government grants,for which the most important condition is the purchase,construction or other acquisition of non-current assets,are reported as deferred items on the balance sheet and the term of the appropriate asset is entered on a systematic and
333、reasonable basis as this affects the results.Other public subsidies are entered as income over the period that is required to allocate them to the appropriate expenditure that they are designated to cover on a systematic basis.Public grants that are collected to compensate for expenses already incurred or losses or for the purpose of immediate financial support for the group,for which there are no
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