Thinking ahead. Looking at the world from different angles. Making work innovative.

Perspectives

Annual Report 2007

Perspectives Summary

Information technology is presenting us with new ways of working, learning and spending our leisure time. They are leading to deep-rooted changes and new attitudes in business, politics, law and society. One of the key topics of our times is the future of work. This is because human labour is more than a mere production factor in a functioning economy. Our economic success, personal well-being, our system of values and our self-esteem all depend on work: we are what we think, what we achieve and how we act.

At the same time, the basic conditions are changing continually. Computer and communication technologies have gained a firm foothold in the working environment in virtually every sector of the economy. The information and knowledge age is changing how we live and is giving birth to new forms of organisation. An ever increasing number of companies are internationally active and confronted with the political instability in various regions of the world. National economies and financial markets are so inextricably linked that economic risks can take on global dimensions within the shortest space of time. Labour law is becoming increasingly complex and differs from one country to the next within the European Union. Nevertheless, companies are under tremendous internal and external pressure to act in line with rules, regulations and laws.

All this offers GFT both opportunities and new perspectives. We are benefiting from a world in which products are becoming increasingly individual, sophisticated and complex. Our IT solutions are helping to meet these demands. We are benefiting from a world in which expertise is becoming a primary commodity in both the services and consulting sectors, a world in which solutions and software generate additional value, and in which companies are increasingly cautious of offering their staff permanent employment. We recruit and refer flexible and highly-qualified IT specialists, who embrace lifelong learning and value self-determination with regards to their own labour and their work-life balance. This annual report offers you different takes on the trends that will shape our working world in future and shows you how we at GFT are mastering the challenges that this poses as well as the resulting opportunities for our company.

Divisions

1-23

2 Letter to the Shareholders

6 Share Why it is worthwhile investing in GFT
12 Values

What connects us

18 Processes

How we are working at becoming even more successful

24-41

24 Services

27 Trends in the IT Services market
28 Services Business Division

30 Resourcing

33 Trends in the IT Resourcing market
34 Resourcing Business Division

36 Software

39 Trends in the archiving market
40 Software Business Division

42-148

42 Leadership and Responsibility
44 Report of the Supervisory Board
48 Corporate Governance Report

52 Financial Information

52 Management Report and Group Management Report
73 Consolidated Financial Statements
127 Annual Financial Statements
146 Further information

GFT Group Summary

Financial Figures according to IFRS in €m	01/01/-31/12/2007	01/01/-31/12/2006

Revenue	247.068	173.678

Earnings before interest, tax, depreciation and amortisation	13.098	7.310
Total depreciation	1.416	1.163
Earnings before interest and taxes (EBIT)	11.683	6.147
Earnings before taxes (EBT)	12.362	6.665
Net income as of 31/12	8.594	5.109

IAS earnings per share, in €	0.33	0.19

Non-current assets	30.893	30.751
Cash, cash equivalents and securities	28.702	23.891
Other current assets	52.337	37.553
Balance sheet totals	111.932	92.195
Equity ratio, in %	52	53.54
Number of permanent employees
at the end of the year	1,087	1,057

Our Divisions Summary

preferred IT partner for reputable companies domestically

and abroad.

Services IT Services: reliable international direct Software E-mail archiving: automated pragmatic structured Resourcing Supplying IT personnel: flexible punctual suitable In the Services business division we conceive and develop innovative and individual IT applications. After implementing these solutions, we also take on their operation and maintenance. Our well-founded project and technological experience, as well as comprehensive industry competence in the financial and logistics services sectors, make GFT a The Resourcing business division covers the facilitation of IT specialists to companies in all industries. We find the sought-after IT experts, and supply them on a project basis to our customers, ensuring optimum cost-effectiveness. Our subsidiary emagine is the leader in Third Party Management in Germany. It offers its In the Software business divioptimisation of business proarchiving of documents. With inboxx we offer a userfriendly software solution for archiving platform hyparchiv. GFT

clients the customised management of their IT suppliers, which enables them to reduce costs, increase process quality and improve legal security.

sion we develop and implement customised IT solutions for the cesses and particularly for the

e-mail archiving. It is based on the mature technology of our The GFT inspire family of products supports companies in digitalising and automatising their internal processes.

Letter to the Shareholders

Ladies and Gentlemen,

We are very pleased to be able to present the best-ever business results in our company's history in this, our 20th anniversary year. The GFT Group recorded a positive overall development, one which clearly exceeded our forecasts and with which we are very satisfied. At € 247.1m, GFT increased total turnover by 42 percent compared to the previous year. Indeed earnings before tax even posted an 85 percent growth. Net earnings per share grew from € 0.19 to € 0.33. In balance sheet terms, well-balanced retained earnings have laid the foundation for a possible future dividend.

In the Services segment, the GFT Group primarily strengthened its market position in North America and Brazil. We are servicing our North American clients more intensively, and are endeavouring to gain new clients from the financial services industry through a new sales office in New York. We have extended the development centre in Brazil for two reasons: firstly, to further develop the local market and secondly to use it as a base in the Americas for serving US clients. At CeBIT 2008, we announced our partnership with Software AG, the market leader for client-specific company software, and together, we will be vigorously pursuing these new markets, allying our competences to create new successes.

GFT already occupies a leading position amongst IT providers in the financial sector. This has been confirmed in the American FinTech 100 ranking, in which GFT was included for the first time in 2007. GFT is ranked 57th among the 100 best IT service providers for the financial sector worldwide. The ranking is based on annual revenue volume and the proportion generated from the financial sector. In addition, together with the banking group ABN AMRO, GFT received the European Banking Technology Award, a distinction for the best European IT solution in the area of Corporate Clients and Investment Banking.

In the Resourcing segment, GFT is benefiting from several trends which we expect to continue for the foreseeable future: the increasing shortage of qualified staff and increasingly complex employment law make companies more wary when it comes to taking on permanent staff. At the same time many IT specialists would like to pursue varied freelance work. This was the background against which we successfully transferred the business model to our London and Zurich locations and opened up additional potential markets in the UK and Switzerland.

GFT reoriented its product offering in the Software segment in the second half of 2007. This is expressed in the name of our subsidiary company, GFT inboxx GmbH, where the emphasis now is on software solutions for e-mail archiving. In this area, companies of all sizes must meet the relevant legal requirements in the future.

In order that companies are increasingly spared the burden of a growing flood of legal stipulations, GFT is already including such content as telephone recordings from call centres or video material in its archiving solutions.

Now that inboxx is already successfully established in Germany, we are pushing forward with expansion into France, the UK, Austria and Switzerland.

Taken together, the three business divisions create an interesting portfolio, ensuring that we have a clear lead on our competitors and offering us promising prospects for the future. The high growth rates we attained in the last financial year vindicate this strategy. As an IT service provider, as a specialist for the recruitment of qualified IT staff and as a producer of software, GFT represents the fundamental areas of the digital value creation chain. We have thus become a highly trusted, strategic partner for many companies.

With our portfolio of products and services we influence to a great extent the way in which people will work in IT in the future – a highly topical subject which we have been addressing for years. Having looked back in the past year at two decades of GFT and at developments in information technology, we are now looking forwards: to the future of work. We are convinced that GFT will benefit from the far-reaching changes in technology, politics, law and society. Usually one step ahead of other industries, our group of companies is already practising global cooperation within highly flexible structures. This presents us with challenges time and time again, but the opportunities and potentials outweigh them. We now know how to use them to advantage our clients to do the same thing.

In the fourth quarter of 2007 the tense situation in the financial services sector and the capital markets also made itself felt at GFT: for the first time, a certain degree of wariness was noticeable amongst bank clients in terms of their investments in new projects. We are confident that financial service providers and supervisory authorities will direct even greater attention in the future to minimising possible risks with the help of technological solutions and investment in such solutions.

In 2007, we demonstrated that GFT is outstandingly well positioned to capitalise on growth opportunities in attractive markets and to expand the business internationally. This sets us on the right path for attaining our goal of at least € 350m revenue in 2011, even earlier than planned. A further contribution to this process is strategic acquisitions, by means of which we wish to expand the Resourcing and Services business divisions in the current year.

On behalf of the whole Executive Board, I thank our employees, whose high degree of commitment and great flexibility make GFT's success a reality. We also extend our thanks to our clients, shareholders and business partners, for their loyalty and their trust. We look forward to continuing to work for you and with you.

Yours Faithfully,

Ulrich Dietz

Chairman of the Executive Board

Chairman of the Executive Board, responsible for the Resourcing and Software business divisions, as well as for the central divisions Strategy, Marketing, Communication and Investor Relations.

Trust

Daring to do it. Investing in a sound company. Being a co-entrepreneur. Directing your thoughts forwards. Also being able to get through lean periods now and again. Trust: in facts and in people who are working for the future.

What I admire: people who are resolute and unwavering in the pursuit of goals. Who demonstrate staying power as they do so. Who sustainably create values, something which lasts. Who look into the future with optimism and seize the opportunities which emerge time and again. So it's the same at GFT. The company is growing and continuing to develop. For more than 20 years: each step solid and firmly rooted. More and more people are working on this. Going public in 1999 raised the degree of transparency and the pace. Transparency helps you to better assess your own market position. Yet we do not let the fluctuations on the stock market make us nervous. We think and act solidly, and with a long-term pespective – in the interests of our clients, employees and shareholders.

Trust GFT differs from many other publicly quoted companies. We combine the characteristics of a medium-sized family company with a high degree of transparency and the requirements of the capital market. This is what I stand for, together with my wife, as founders and major shareholders. The figures tell the story for us dispassionately, in black and white. What stands behind them is people: a team of creative, well-motivated men and women, accepting challenging demands in terms of quality, working for the future, shaping that future. They create added value, earning the trust of our clients and shareholders anew, day in day out. Our company spells out loyalty in capital letters.

Why it is worthwhile investing in GFT

The GFT share represents a rewarding investment for those investors interested in IT values with robust fundamentals and high growth potential.

Outstandingly positioned

The Group has the characteristics of a medium-sized company, has been established in the market for over two decades and has also shown that it can successfully steer its way through difficult times. It currently ranks amongst the leading international IT service providers in the Services, Resourcing and Software areas − three business divisions with growth potential in which GFT is outstandingly well positioned. The largest provider of client-specific IT solutions in the financial-services sector has proved itself in a lucrative niche where specialist knowledge is essential.

International presence

The GFT Group has an international presence and its IT solutions are being used in more than 30 countries – even in ones where we do not have our own locations. The company is building on a renowned client base, cultivating relationships with more than 250 active clients, of which more than 15 are global market leaders. Around 1,300 employees and a further 1,000 freelance IT specialists are in action for GFT wherever the client needs them.

Convincing financial figures

GFT presents a convincing case, with sustained profitability and significant revenue growth which we have outperformed in each successive quarter for the last six consecutive years. This growth is based on both organic development and on targeted acquisitions: in the past these have been able to be integrated into the existing organisation rapidly and efficiently and have then quickly contributed to further growth.

Sustainable growth

In the last financial year the GFT share posted value growth of almost 16 percent, whereby for long stretches it outperformed developments on the TecDax. Net earnings per share were therefore improved significantly for the fifth year in succession.

Solid financing

Up until now the GFT Group has consistently reinvested its profits into the business. The result is that it is not only well equipped to meet the future, but is also solidly financed, with an equity ratio of over 50 percent.

People who are working for the future

A sound company – trust is rewarded

Stable share ownership structure

Apart from the two members of the founding family, a range of institutional investors are also involved in the company, with shareholdings of varying sizes. Reporting thresholds were crossed in the last financial year by the Austrian AvW Group, at 5.01 percent and – temporarily – the English Ratio Asset Management, at 3.11 percent. The KST Beteiligungs Aktiengesellschaft went below the reporting thresholds of 5 and 3 percent respectively. As before, the Baden-Württembergische Investmentgesellschaft mbH (BWInvest) retains 6.00 percent of the voting rights. Above and beyond this, a broad base of private investors forms the free float. Share purchases by members of the executive bodies demonstrate that the Executive Board and the Supervisory Board are behind the strategy adopted.

Interesting growth potential

Directing the thoughts forward, using opportunities

The three business divisions addressed by GFT offer interesting growth potential, which the company will fully utilise. The Services and Resourcing business divisions are thus benefiting from the continuous increase in IT investments, above all in Europe: it is project-based services which are in demand, as is the outsourcing of IT applications or indeed of whole business processes. More and more companies are turning to service providers like GFT, who can acheive success across the globe with regional offices and flexible conditions. Even the crisis-hit financial-services sector will have to continue to invest in its IT infrastructure. Efficient IT solutions enable cost savings and risks to be better managed. Restrictive employment laws and a discernible lack of qualified staff in Europe are spurring on the demand for freelancers, thereby favouring the resourcing business. The Software segment is also, in e-mail archiving, concentrating on a promising market for the future which fulfils the requirements of public authorities and companies. 0 20 40 60 80 100

Transparent and active dialogue with the capital market

Facts: up to date and comprehensive

For GFT, a transparent and active communication policy is a matter of course. The Executive Board and Investor Relations regularly present the company at investor conferences, on roadshows and in the media. Private investors can obtain comprehensive information at the Annual General Meeting, via the Internet, in the Annual Report or by telephone. At the Vision Awards 2006, a competition for the best Annual Reports, GFT once again won the second-highest distinction, the Gold Award, in the category "Technology".

90,446

Information on the GFT share

ISIN	DE0005800601
Beginning of the official quotation	28 June 1999
Market segment	Prime Standard
Indices 150	German Entrepreneurial Index (GEX) Stuttgarter Aktienindex (SAX)
Designated sponsor	HSBC Trinkaus & Burkhardt AG Equinet AG
Institutions that regularly publish financial analyses of GFT	HSBC Trinkaus & Burkhardt AG SES Research GmbH Equinet AG
Number of issued bearer shares 120 with par value of € 1 per share	26,325,946

	2007	2006
Opening price at the beginning of the year	€ 2.72	€ 2.66
Closing price at year end	€ 3.15	€ 2.52
90 Value change	+ 16%	- 5%
High	€ 3.80 (4 July 2007)	€ 4.07 (2 May 2006)
Low	€ 2.60 (5 January 2007)	€ 2.14 (11 October 2006)
Market capitalisation as of 31 December	€ 83m	€ 66m
Average daily trading volume (shares)	81,026	90,446

Development of the GFT share indexed (Basis 2 January 2007 = 100%)

Marika Lulay

Member of the Executive Board, responsible for the Services business division, as well as for the central divisions Technology and Quality Management.

Selfconfidence

Finding a strong identity and culture. Formulating values that bring people together. Knowing what we are and what we want to be. How we want to work. Values which have not grown on a green field somewhere, but rather within the people – over many years. Neither lip service nor a mantra. Open to what is to come.

14 Values

When I see what our team has achieved over the years, I am filled with pride. Amidst all the changes in our lives and our working world that we experience every day, we are upholding common values. This is the secret of our success. A reliable variable as the basis for our business. The foundation on which everybody at GFT wants to work, irrespective of their business division or their country. Finding the right words for this was not easy. We in the management team have discussed at length every single formulation: Germans, Spaniards, French, British and Swiss. Problems of understanding and outright misunderstandings emerged; they were clarified, step by step, in intensive discussions. Now everybody stands behind the result. It is not even the words themselves which are the most important element in this. What is decisive is the path through which we found them and thus found our identity. This process was an enriching experience in terms of how we interact, strengthening our company culture. Also in terms of working together with the client. At the right time.

confidence What would I like to see? That we give life to these values in our business, every day. The preconditions for doing this are favourable: after all, we haven't just invented them. They are based on the experiences of the people who make GFT and drive it forward. The challenge is to live the values without carving them in stone. They must give us a prospect for the future and at the same time give us the leeway to make changes.

Self-

What connects us

As a service provider, GFT benefits from a strong company culture. We are connected by joint values. They formulate what distinguishes us and they give a binding framework. Such norms of behaviour awaken expectations and have an impact on our dealings with one another, as well as with clients, business partners and shareholders. In the light of continuous changes in our living and working conditions, they serve as a reliable variable. Our partners can trust in this, just like in the days when a deal was sealed with a handshake. There is a reason behind our chosen formulation: "We keep our promises." In practice this means for example: in the services which we provide for our clients, we fulfil quality expectations and keep our agreements on deadlines and budgets.

Constant values create our self-image and trust

Fundamental values are durable. Even over a long period, they retain their validity, define the way we see ourselves and our identity, creating trust and security. Yet with the people working for GFT and with the various companies integrated into our Group, the focus shifts. We consciously engage this issue time and again. Today, we have every right to claim: "We are strong as one international company." We perceive ourselves as a team with a positive quality, providing services of substantial value in a multicultural and ambitious environment. Every individual has his or her share in this: "Each of us moves the company forward." For instance, by sharing his or her knowledge with others. We promote this via company-wide knowledge management. Since November, various functionalities, such as company-internal forums, wikis or e-learning modules, have entered the test phase and will be ready to go live, starting in April.

Rocketing into the 21st century

We last fixed our values in writing in August 1996. A rocket and the confident message "Yes! It's possible!" described our vision back then for our path into the 21st century. The coloured handbook, with the blue cut-out figures, has accompanied us through many years. A lot has happened since then.

New colleagues are enriching our team, business locations have been added, a series of companies with differing cultures were integrated. Three strong business divisions are shaping a unique service portfolio with a high value creation chain. Going public has opened up new growth opportunities and raised our level of transparency. In addition it has entailed an obligation to create value with regard to a new interest group, the shareholders. The fact that we can provide the best possible service here is, not least, due to our software development cooperation with Spain and Brazil. Our experts are thus globally networked and can be used globally, depending on where their knowledge happens to be needed at a given time.

We are reliable

What we are and what we want to be 16

Connective values – the basis for our successful work

Finding a common language

At the end of our anniversary year, we are once again presenting values formulated in writing – the result of a long process. In several workshops, the GFT management team has initially singled out attributes and characteristics which, in their view, best describe the company. From these they have developed nine meaningful and reliable sentences. The challenge was to attain a common understanding of the significance of individual words and sentences. It was not always easy to find the term which got to the core of the thought, for all concerned – and in what was, for most of the people involved, a foreign language. Because as an international company we formulate our values exclusively in English; as was already the case back in 1996.

The core of our identity, as a client-oriented and employee-oriented service provider company, has remained the same. We attach importance to a trustful and positive way of interacting, both within the company and with our clients: "We as a team exceed the expectations of our clients." For they are every bit as diverse as our colleagues. The interplay of different cultures within GFT is the foundation for understanding and appropriate cooperation. From the Executive Board to the project specialist, the whole GFT team has taken on an obligation to provide services of the necessary quality on a continuous basis. Internationally acknowledged standards, such as CMMI (Capability Maturity Model Integration), a process model for software development, or the ISO certification of our Resourcing division, act as the foundation for our "GFT methodology".

The journey is the destination

Open to what is to come

The communication task has been taken over by the management team. They represent the values, give them life and instil them in the company. They have a free hand in terms of the way in which they convey these values to their team members. In this process of discovery, we have learned that the key issue is not so much the values decided upon in themselves, but the process itself, in which individuals and colleagues intently analyse and discuss the content. This is where the actual value is to be found.

Creating substantial values

That all of this reflects positively on our work is self-evident. The services which we provide have a substantial value. They are sustainable and reliable. "Our combination of business knowledge, IT expertise and attitude creates value." Our recipe for success sounds simple: "We use the right technology and deploy the right people to deliver impressive solutions." At our GFT Technology Office, we pool our research and development competences. In this way we ensure that, on the one hand, we are always informed about the newest technologies and, on the other, we always make this knowledge available across the Group. This means that quality standards rise, together with client satisfaction. This manifests itself, on the one hand, in the high rate of repeat orders from existing clients and, on the other, in various distinctions which we have received for our achievements (see p. 28).

Company culture as success factor

A clear vision and binding values are the engines driving our success. They give our colleagues and all those involved with them a secure prospect for the future. In the process, the key issue is to be open to new things, and to remain adaptable and innovative. Maintaining this balance and cultivating a strong and open culture: this is the strength of GFT.

Finding a strong identity

Dr. Jochen Ruetz Member of the Executive Board, responsible for the central divisions Finance, Controlling, Personnel, Internal Auditing, Legal Affairs and Internal IT.

Efficiency

Planning, measuring, comparing, evaluating, controlling, monitoring. Numbers and facts speak for themselves. Absolute transparency. Standardised and efficient processes. This is how to manage risk. Working in a targeted way sets the bar high. Higher. Success becomes tangible.

20 Processes

Like every Head of Finance I dream of a uniform infrastructure for all commercial and administrative procedures, on paper, in the IT systems and in the minds of the employees. Handling the same tasks in the same way – regardless of which site it is. The calculation is simple and it pays dividends: in higher efficiency and lower costs. No less important is transparency. After all, that is what the capital market demands of us. In addition, it helps in maintaining an overview of potential risks. From company headquarters, through to the smallest, most remote operative unit.

Efficiency One of our issues is comparability. We want to measure our performance against the best. That is why we plan and analyse. Calculate relevant financial figures. Set ourselves goals. Check results. Evaluate and compare. Communicate what we have achieved. Openly. Internally and externally. Everyone at GFT knows where we want to get to. That is decisive. We are all pulling in one direction. A learning process. We keep on developing. Our professionalism grows from year to year. Yet, as soon as we extend our group of companies, everything comes under scrutiny again. The best and the most tried and tested prevails. Routine? No chance of that!

How we are working at becoming even more successful

With our continuous improvement process we are striving to become even more successful and we want to be better than the competition. For this reason, apart from a central and efficient administration, we also rely on universally applied processes across the whole group of companies. It is not only in software development that we are working according to internationally standardised methods which meet the highest quality standards, but also follow a uniform standard at all levels in risk management and opportunity management. Our approach reaches into even the smallest or most remote operative units. In addition, established procedural models in administration and uniform systems provide growing efficiency and lower costs.

Searching for the optimum: standards set the yardstick

What appears to be a matter of course with respect to organic growth becomes a law in the case of acquisitions: only those who act according to standardised processes, implemented company-wide, are in a position to draw the best out of the existing and the new, promptly benefiting from synergies. This paid dividends for us when we were confronted with wholly different IT systems and procedures during the integration of the former Parity companies into the GFT Group. A status review rapidly made clear what was superior and what needed to be jettisoned. Thus we were rapidly able to re-create a uniform infrastructure, with the advantage that improvements yielded benefits for the business units in all countries. We were also able to implement the expansion of the Resourcing business to the UK and Switzerland without an additional technical workload. Our British and Swiss colleagues were trained using the already existing resourcing systems and have been applying them ever since.

Measuring in order to manage

We manage our business by planning and measuring the fundamental success factors. These include classic financial figures such as revenue, earnings or accounts receivable. We are also monitoring, for example, the capacity usage of production units, the order-generating potential of our sales team, the risk assessment on our fixed-price projects, the group margin on our maintenance projects, as well as the ratio of possible dismissals amongst freelancers supplied through us.

Standardised and efficient processes

Recognise risks early

Transparency and reliability

As a publicly quoted company, GFT undergoes a transparent reporting process on a quarterly basis – a requirement which places new demands on us each time. Efficiency is required in order to fulfil the expectations of public authorities, supervisory bodies and the capital market, in addition to a smooth-running cooperation between the national organisations, group management and the public auditors.

We take care to ensure continuity through communications, internally and externally. We retain established financial figures and their definition. Just as we expect reliable statements on present and future status from our employees, we also provide reliable statements to the capital market. We set ourselves realistic goals, communicate them openly and expect others to measure us in terms of how reliably we achieve them. Where deviations occur, we communicate them no less reliably and openly. Our reward for this is trust. Open communication

Competition promotes peak performance

Working in a targeted way sets the bar high

At GFT, we are concerned with healthy competition. We ensure that the heads of our operative units know the relevant financial figures and integrate these in their work. It is a matter of comparing our own performance with those who attain better results – internally and externally. This is how we learn where and how we can improve. The challenge consists in reducing the complexity of our group of companies to simple and easily comprehensible measurements. Every employee should know what contribution he can make to overall success and how this is measured. After all, these financial figures form the basis for the performance-dependent elements of our employees' salaries.

Flexibility and networking open up new perspectives

Our community of employees forms a close network: technically and personally. This enables us to practise new forms of collaboration. These include flexibility in terms of where people work and teamwork allocated across locations. What is called for is mobile and home-based work, as well as part-time work. This strengthens GFT's ability to deploy employees according to requirements and to better meet clients' wishes. Our employees gain the possibility to better harmonise their working and family lives and to open up new prospects for themselves within the GFT Group. Everyone benefits from this flexibility: clients, the workforce and GFT.

Our locations at a glance

At all 22 of our locations we work according to uniform quality standards and agreed processes. Our employees form a network across national boundaries and benefit from synergies arising from international cooperation. The foundation is the "GFT methodology" – uniform standards and processes which apply to everyone.

Reliability

Be a reliable partner. For clients everywhere in the world. Delivering performance, where your performance yields maximum benefit. Technically competent, highly motivated and thinking as a team. As a global network with tried and tested structures. Sounds visionary? At GFT, that's the way we already work.

Carlos Eres Managing Director of GFT Iberia Solutions S.A., responsible for the Services business division (financial services) in Southern Europe and America.

26 Services

Yesterday I returned from Brazil to Barcelona. It is impressive what our team has created there. The client is delighted, too. Technical progress makes it possible: global cooperation in our international production group, as we currently practise it, would still have been unthinkable only a few years ago. Now, new types of collaboration have emerged across national frontiers. We broke through the language barriers a long time ago. We overcome time zones and great distances with ease. For us, internationality and client proximity go hand in hand and are not mutually exclusive. Cost-competitive at offshore locations or at the client's location, providing comprehensive consultation: we perform, with full commitment − no matter whether the client is in New York, Berlin, London or in São Paulo.

Reliability This only works because we have built up a functioning and global network, which gives us security and cushions us. We have to be able to rely on it: on communications and organisational structures, on uniform quality standards and processes and on common values. It's the right mix that counts: heterogeneous teams combine the tried and tested with new ideas, think universally and take the local practices into consideration during implementation. Our clients can thus be assured that experience and innovation always go hand in hand and solutions are created which are individual and tailor-made. Quality you can count on. Yesterday and today. In Brazil, in Barcelona and in every other place where GFT is active.

Trends in the IT Services market

Globalisation

Globalisation will influence the way we live together: for example, through new possibilities for working together across national boundaries or for using country-specific advantages. Now that it is underway, the process of globalisation will continue. Technical progress, together with corresponding political decisions, has led to areas of activity in society becoming ever more closely interwoven internationally. The challenge for companies is to use the opportunities created by this profound change in society.

The next generation of outsourcing

The answer to these developments has seen the emergence of a new generation of outsourcing activities for business processes. In contrast to the early days of outsourcing, the low price is no longer the sole criterion for the decision. Many clients who have gained experience in Asian countries, for example, are even beginning to transfer their projects back to Europe in order to attain the quality demanded. Often the supposed cost advantage is undermined by a major commitment of resources to communication and coordination.

The framework conditions for outsourcing IT processes are subject to dynamic change. The complexity of outsourced services has increased hugely. Therefore factors such as the availability of expert knowledge, intercultural competence or the minimisation of geopolitical risk are gaining in significance. At the same time, the questions as to where the services are provided and where our clients obtain support are increasingly receding into the background.

Latest technologies

Everyone is now talking about service-oriented architectures (SOA), yet these are rarely efficient. Frequently the IT landscapes which have grown up are perceived to be too rigid and cumbersome, an unfortunate state of affairs and one which SOA is trying to improve. However, it is still only the beginning in terms of new ways of organising business processes. According to IT experts, this will change in 2008: they predict that companies are now prepared to press ahead with the necessary refinements in the business processes – both in technical and in organisational terms. This opens up whole new prospects for SOA applications.

The same applies to technologies such as Web 2.0 or virtual worlds. Already in existence for some time, they are now producing noticeable value-creation effects within companies. For technology companies, it now pays dividends to have already developed corresponding knowledge and to have suitable solutions in the portfolio.

For clients everywhere in the world

At GFT we are already realising visions

Services Business Division

In focus: Financial service providers

Be a reliable partner

In view of our technology and solutions competences, we primarily concentrate on financial services, in addition to the logistics sector. Both sectors are dependent on individual IT solutions, as standardised solutions insufficiently depict highly complex internal procedures. Only those who understand the internal process sequences and know the market can develop suitable solutions. This is why our clients – predominantly large national and international companies – trust our partnership, with its long-term focus: from strategy consultancy, via development and implementation of the appropriate IT solution, through to its maintenance and operation.

We are fascinated by the fast-paced development in the IT sector and use it to create a vision for our IT solutions. It can take time for a new technology to become widely adopted, yet we believe our processes and innovation make it worthwhile continuing with highly promising subjects, despite any initial difficulties; whether it be service-oriented architecture or virtual words. We have already examined these topics in depth and have the appropriate answers ready to hand.

In addition we continually observe the prevailing market conditions. If, for instance, new or changed rules within society necessitate changes to our clients' IT processes, we can offer a suitable solution.

Distinction for attaining client satisfaction

Technically competent, highly motivated In 2007 GFT was honoured as one of the best IT service providers for the financial sector globally. The evaluation of the American FinTech 100 Ranking takes into account issues such as dependability and continuity of the companies, as well their significance for the industry. This renowned distinction vindicates us in our daily work.

Similarly, we received the European Banking Technology Award (Corporate and Investment Banking) for a Client Management Application, which we developed together with our client ABN AMRO.

Global delivery model

If companies want to outsource certain services to a third party, it often involves a change in the requirements and expectations for the service. Some of them need services and software as quickly as possible, others as cheaply as possible and others again have a need to solve particularly complex requirements. It is also not unexpected for requirements to change in the course of a project. What counts in the end is the result: the project must be implemented, with the required quality, by the deadline fixed, at the price agreed. With this goal in mind, we work according to a model which offers us the essential flexibility, thanks to the wellthought-out combination of various locations worldwide: the global delivery model.

Functionally effective global GFT network

Cultural differences, various time zones and large physical distances can be disadvantageous in the daily work of a project. Our IT specialists are therefore organised in a functionally effective global network, in order to assemble a suitable team for each and every requirement from the client. If the client is in Europe for example, a project manager from that region will be selected. If the project is based in New York, the leading contact coming from that region or time zone will take on the project. The remaining composition of the team depends on the client's individual requirements: If the solution is to minimise total investment, the cost advantages of the Brazilian labour market can be used. If the project is more complex, requiring tight coordination, project team members are selected from within the region.

Growth prospects for the future

To obtain further growth, we are maintaining our strategy of expanding existing client relationships and acquiring new clients in a focused way in our target industries. In doing so, we have our goal clearly in our sights: a place among the top ten IT service providers globally. As we expand into new countries, experienced employees form the core of the team and we then also recruit locally. In this way the GFT culture and our competence are transported into the new team – at the same time they are enriched by the particular national competences and special characteristics. A uniform quality of services is thus ensured.

This principle has been successfully implemented at our subsidiary in Brazil. Situated in the same time zone as North America, we have used our development centre to acquire new clients in New York and to provide them with comprehensive client care from the outset – good support for the sales office newly opened up there.

Our most important capital: the employees

The diversity of the minds at GFT, the creativity, personality and knowledge which each individual adds to the equation form the basic capital of the company. At 22 locations, employees from 34 nations provide top-level performance – to secure joint success.

Well-grounded expertise in the latest technologies and methods are the crucial element in our success as an innovative company. This is particularly the case for the employees in the Services division, which forms around 87 percent of the total work. Using an individual coordinated tuition and further training programme, we ensure specialist qualification, as well as familiarity with the methods and social competence.

This includes promoting the interplay between our employees across national boundaries – essential because of our global focus. In addition, international projects provide the opportunity to work at a variety of locations, in accordance with individual preferences.

Delivering performance where it yields maximum benefit

Global network with tested structures

Flexibility

Experts on call-up. Highly qualified, essential for a particular project. Such are the needs of many companies. Flexible employment as an opportunity, enthusiasm for new assignments. That's the way an increasing number of professionals see it. Deciding for yourself about the use of your work as a resource, obtaining mastery of your time, getting your own worklife balance right. A philosophy of life and a professional philosophy with a future.

32 Resourcing

I admit: I'm impatient. Things rarely move quickly enough for me. We can improve here. Achieve more there. It's a matter of already outperforming today's goals tomorrow. New opportunities open up all the time. So you have to be flexible. To constantly be rethinking the present way of doing things. What excites me is the new, the lure of change. I want to get things moving forward; to do that, I need room to breathe.

Flexibility That is why the resourcing industry fascinates me as well. It's the answer to changing aspirations, needs and ideals in the labour market. Freelance IT specialists have decided: instead of being in long-term employment with one company, they want to work for different companies; instead of following one clearly predefined path, they want to turn off to the left and the right, constantly gaining new experiences. This trend is continuing within companies: they are becoming ever more reluctant to give people full-time permanent posts. They are afraid of strict labour legislation, valuing flexible employment relations and cost structures. This gives the necessary room to manoeuvre in order to remain competitive. The supposed security which was often associated with a permanent job has been changed by this trend. The model curriculum vitae no longer exists. More and more people find it enriching to have a more varied insight into different companies and industries, proving themselves in a whole range of roles. The future: flexible professionals, who employ their talents right where they are needed at the moment. They are self-assured in determining how to use their work as a resource and how to structure their relationship between work and leisure. A philosophy for an individual's life and profession, one with a future, one which I personally like very much.

Trends in the IT Resourcing market

Flexible work models

Talents or high potentials represent an important and, at the same time, limited resource for a company's success. It's no surprise that the lack of qualified personnel has become the obstacle to companies' growth – above all in the IT sector. In addition, companies often want to remain flexible: they do not need highly qualified IT professionals for the long term, but they do need them very quickly. A consequence of this is a rapidly growing market for IT freelancers. They provide specialist knowledge for a fixed period. Companies can thus retain their flexibility and have at their disposal the expertise which they need right now.

An advantage which is equally valid for the freelancer: being flexible and selecting projects yourself is becoming an increasingly attractive option for many IT experts. Because of the present economic environment, there are a whole range of interesting projects for their selection. The biggest selection is guaranteed by professional agents, who, in addition, negotiate the conditions.

Technical knowledge alone is not enough

In spite of the strong demand for IT specialists, the prospects are not automatically on the up and up for every single programmer. On the contrary, the demand is for those possessing very specialised knowledge and extensive experience. And even technical expert knowledge alone no longer suffices in and of itself. International teams and the strengthening global distribution of projects make it essential to have robust language skills.

Third-party management

A consequence of the increasing use of freelance personnel is the increasing expenditure in companies' purchasing departments. It is not the project managers, but rather purchasers who are responsible for procuring and managing the services of the freelancers. An efficient purchasing strategy for IT service providers has by now become an indispensable element of a lean IT structure, adapted to the core business and to its processes.

International resourcing: strong variations in compliance requirements

The UK remains the largest volume market for resourcing services in the EU. The legal regulations in the UK make it easy to switch between being employed and being hired as a freelancer. The situation is more challenging in Germany and France: freelancers must fulfil various criteria in order to be able to earn their living in this way without legal problems. Resourcing agency experts help prospective workers to be able to meet all the requirements. Experts on call-up

Essential for a particular project

Resourcing Business Division

Advantages for our clients – flexibility and expert knowledge

Highly qualified, deployed in specific areas

In order to get through success-critical bottlenecks with assurance, companies are increasingly using external IT experts. As a reliable resourcing partner, GFT acts as intermediary for specialists, providing the best possible match for the need – no matter how specialised the requirement is. The clients are thereby in the position to close emerging gaps rapidly and to maintain their capacity to function fully.

Finding the most appropriate person for a vacant position is our daily challenge. Depending on the client's requirements, we select the suitably trained personnel, from the individual specialist for short-term projects, through to the complete team for international assignments. Candidates with specialised knowledge are a particularly scarce commodity. In order to be able to react directly, in cases where the client has a capacity bottleneck, we are permanently recruiting new IT freelancers for the international GFT network.

As an IT specialist company with more than 20 years experience, we are a tried and tested specialist for hiring skilled IT personnel. Our employees understand the processes and expectations of the clients and can, at the same time, assess the freelancers' specialist suitability. As a result we can place the suitable freelancer, more precisely and more efficiently. For us, "suitable" means not only that they are available – it encompasses more than solely meeting the technical knowledge requirements. Knowledge of the industry and soft skills are also factors which play a role in the selection process. Thus, continuously maintaining our experts' profiles and contacts, is one of our most important tasks.

The range of possible assignments is diverse: for instance, the restructuring of existing IT structures or the optimisation of processes for gaining and retaining clients. Particularly for strategic assignments, IT management personnel do not wish to release their control of developments, yet they nevertheless need qualified IT specialists. In some cases an assignment lasts a few days, in others several years. The process of sourcing the individual and securing their availability only takes two days, on average. To ensure this rapid reaction time, we centrally maintain our international pool of experts at our Resourcing centre in Berlin.

Flexible employment as an opportunity

Another factor in our agency work, valued by our freelancers, is the fact that we offer them interesting and varied assignments. Once they have taken up their new task, we do not simply leave them to themselves, but rather we concern ourselves with getting them integrated in their new location. Around 1,000 freelancers sourced and selected by us are presently on site at locations designated by the client.

Third-party management with emagine

The larger the number of external IT personnel in a company the more resources are tied up in managing them, both in purchasing and in the other specialist departments. A large number of individual service-providers, with small volumes, a lack of transparency and insufficient comparability of the services rendered; this causes a heavy administrative workload. The result: many clients do not fully capitalise on the potentials offered to them by possible framework contracts and by an efficient processing and management of their service providers.

As a partner for third-party management (TPM) we provide support. Clients benefit from the experience and expertise of our subsidiary emagine. The result: more efficient processes and the use of synergies. With our systematic solution-focused approach, clients obtain full transparency on the cooperation with external partners. Through consolidation of existing supplier structures, services and costs are optimised. At the same time weak points can be brought to light and potentials for savings can be used. Where it is purposeful, new service providers are used. The result is the highest quality of the service purchased, at the best price. The client can concentrate on the material issue: core competences and business success.

Our pool of experience is unique on the German market. Having successfully completed many projects means that we have the necessary experience to handle even extensive projects, involving several hundred service providers, professionally.

Certified quality

To make the decision as to which IT service provider ideally fulfils the specific requirements of our clients we work according to a multiple-stage quality assurance system. In the selection it is not solely the specialist qualification which counts, but rather the personality as well.

As one of the largest resourcing partners on the European mainland, we have been providing outstanding expert resources for IT projects for many years. Leading companies of all industries are convinced by our qualities. In order to guarantee our high standards, we have established a comprehensive quality-assurance system (certified according to ISO 9001:2001). Our own employees are continually given training and further training in order to remain as well qualified as possible at all times. This is how we ensure that our processes are continually improved, to attain the highest level of efficiency in our resourcing – both for our clients and for the freelancers.

A look into the future

Our services are aimed at large companies in a broad range of industries and we are broadening our client base in the process. In Germany and France we are, to an increasing extent, involved with companies from the manufacturing and retail sectors. In Switzerland and Great Britain we have successfully opened up the first potential and on this basis we will continue to extend our activities. Thus we are getting closer to our goal of attaining, across Europe, the position which we already have in Germany and in France: to be one of the top three resourcing partners.

Optimising the supplier structures

Continuous education ensures process quality

Structure

The flood of data is growing. No end is in sight. The costs are rising accordingly. What a waste! The solution: separating the important from the unimportant. Filtering out, structuring, retaining and retrieving. That's how simple work can be.

Jürgen Obermann Managing Director, GFT inboxx GmbH, responsible for the Software Business Division

38 Software

Monday morning. At the weekend, I spent a lot of time with my family. Previously, this used to make me feel that I would have to atone for this when I opened my e-mail in-box. Closed, due to being over-filled, the limits of my in-box had been burst by a colourful mixture of the important and the unimportant. The only consolation: I shared this fate with millions of other people. When I imagine how these people were simultaneously fighting through their in-boxes and ejecting every second e-mail into the great digital beyond… For how many minutes are national economies at an unproductive standstill for this reason every morning? What is it costing?

Structure Yet it can all be so simple. Companies like GFT are working intensively on archiving solutions which help clients get to grips with the growing flood of data and information. The art lies in differentiating the important from the unimportant. In structuring, archiving and, in case of need, retrieving material worth keeping – automatically. E-mails are only the start of this process: we are already thinking beyond the e-mail stage. Since we have installed our own solution in the company, I can once again look forward to a carefree weekend with my family. And to Monday morning.

Trends in the archiving market

Quantity of electronic information on the increase

About 22 billion times a day, e-mail users click on "Send", "Enviar", "Senden" or "Envoyer". On average, each user receives and sends a total of 84 e-mails per day – around 14.3 megabytes of electronic information. This is more data than the textual content of whole encyclopaedias – and the amount is rising. Electronic mail is thus one of the most important and most used forms of communications today.

In this process, much more so than private e-mails, it is business communications which have the greatest importance, having established themselves as a fundamental instrument of communication for daily business. A special challenge for the users who have to fight their way through their overflowing in-box every day. An expensive exercise: manual e-mail management costs a company with 1,000 employees more than 50,000 Euro annually. The IT departments within companies are also increasingly reaching their technical and organisational limits. Not least for cost reasons, management of the excessively large flood of information will be a major challenge for the next decade within IT departments.

Legal requirements are increasing

The rising flood of data is one challenge; the other is provided by the legal framework conditions. The same legal stipulations apply to business e-mails as to letters and to other business documents. Just one example: e-mails must be retained for six to ten years and be able to be reproduced in their original format. Transparency and monitoring are the fundamental objectives of the regulations, of which the Sarbanes-Oxley Act or Basel II are only two amongst many. Companies are consequently obliged to archive their e-mails in an appropriately ordered way and thus to conform to the Compliance stipulations. In the medium term one can work on the assumption that e-mails will also constitute proof before a court of law and will acquire the same credibility and significance as paper documents. In the USA, but also in Germany, proof in the form of e-mails already has significant influence today on the outcome of business-related trials.

No end is in sight

Within the issue of archiving, e-mails are only the start. In the future, the spectrum of information which must be retained and retrieved will expand significantly. For example the recordings of calls in a call centre. Or the documentation of the user-generated content of Web 2.0 applications. Accordingly, the forecasts for the archiving market look optimistic overall: Gartner's general forecast is for growth of around 33 percent annually up to 2010; the front runner is e-mail archiving with 58 percent.

The flood of data is growing, the costs are rising accordingly

The archiving market is growing dynamically

Software Business Division

E-mail archiving with inboxx

The solution: separating the important from the unimportant E-mails and electronic information can now be stored, administered and retrieved, to a greater or lesser degree of efficiency, by all the systems currently available on the market. These basic functions may be sufficient for private use. The decisive capacity and compliance problems are to be solved by a professional archiving system. With our inboxx software solution, we are pioneers and, at the same time, experienced experts in what is currently a top issue for business process management.

What is decisive here is the fully developed technology of our archiving platform hyparchiv. As a central company-wide infrastructure, hyparchiv provides cost-competitive long-term archiving, suitable for auditing requirements, covering all relevant information within the company. In the process, e-mails, documents and receipts, as well as application data or telephone recordings, are archived centrally and are useable across functional boundaries.

Particular focus is on our inboxx e-mail archiving software. In just one day, it is installed and ready to be operational, regardless of whether our clients work with Microsoft Exchange, Lotus Notes, Novell GroupWise or another e-mail system. "Ease of archiving" is what we call this user-friendly process. It is of particular benefit to large companies with over 1,000 mailboxes.

Answer to increased data quantities and costs

The more e-mails there are in the mail box, the more time they cost the users. Answering them is one issue; another is the sorting and electronic filing of the mails. Users are often simply overloaded, overlooking or – in the worst case – deleting even important information.

Filtering out, structuring, retaining and retrieving

Less attention is paid to the procedures in the background. The vast quantities of data are a crucial problem for IT management teams within companies. Where and how are they to be stored, what volume of data does each employee have at his or her disposal? How can the information be stored, safely and cost-competitively? And, at least equally importantly: how can it be retrieved, simply and rapidly? Today, the costs of e-mail correspondence are growing on a linear scale together with volume, while the stability of the systems is constantly on the decline – a high-priority problem for a company's IT management.

With our inboxx archiving software, we offer solutions to both problems. It is integrated into the existing e-mail infrastructure and supports all relevant mail systems. E-mails are stored, together with their attachments, in an archive network; duplicates are automatically eliminated. As a result, the volume on the mail servers is reduced by an average of 80 percent. The result: the e-mail infrastructure becomes substantially more stable and is ready to deal with sustained rapid growth.

IT management benefits from the simple integration into the existing infrastructure, users from being able to search in comfort. All types of information are archived into one system, making it possible, for example, to have full-text searches in attachments and scanned documents. If the framework conditions change, inboxx grows along with this change. Because problem-free scalability is designed as a core characteristic.

Answer to compliance issues

Personal archiving of electronic mail is a matter for the users to decide upon. In contrast, storage of business e-mails, deemed to be business documents, is subject to legislation. It is becoming ever more difficult to maintain an overview on national and international compliance regulations. If IT departments do not react quickly enough, there is the danger that important e-mails get lost.

inboxx puts our clients on the safe side in the legal sense. IT managers do not need to concern themselves in detail with the constantly varying legal regulations. This is taken over by our experts, who are always abreast of the changing situation. They ensure that all relevant requirements are automatically fulfilled by inboxx. Right from the first day of installation – with a guarantee of flexibility: If regulations change or new ones are added, the system can be extended, without a major workload.

Going into the future with a clear vision

We are already thinking one step ahead: to a large extent, many of our competitors limit themselves to archiving e-mails and documents. In contrast, we are currently working on comprehensive concepts, within which all other relevant contents, such as telephone recordings from call centres or video material, can alsobe included into a holistic archiving solution. Termed "unified archiving", this will become a key technology in the years to come.

To further optimise our products, we are permanently keeping track of the latest technology trends. This strategic competence benefits not only the users of our software solutions, but also the GFT Group as a whole. In Germany we have already been able to establish ourselves in the market and are presently working on expansion into the UK, France, Austria and Switzerland.

Be on the safe side with inboxx

International expansion

Leadership and Responsibility

Report of the Supervisory Board	44
Corporate Governance Report	48
Pursuant to Number 3.10 of the Code

Financial Information

Management Report and
Group Management Report	52
Consolidated Financial Statements	73
Annual Financial Statements	127
GFT Technologies AG

Report of the Supervisory Board

Dear Shareholders,

Over the past year, the Supervisory Board met on six occasions and held two telephone conferences during which the economic situation, the strategic development and the long-term positioning of the GFT Group were discussed at length. One member of the Supervisory Board sent his apologies for one board meeting, while two members were unable to attend a further meeting. All other meetings were fully attended.

Against the backdrop of a highly positive economic situation, the corporate strategy pursued by the Executive Board resulted in a very encouraging financial year 2007. With revenues for the year totalling € 247m, the sales target for 2007, which was raised to € 230m during the course of the year, was not just reached but clearly topped. The forecast operating margin of 5% was reached.

An intensive and cooperative dialogue between the Supervisory Board and Executive Board, and the ongoing collaboration upon which this is based, form the basis of a target-oriented organisation and implementation of our activity. During the reporting period we performed the tasks incumbent upon us pursuant to law and our Articles of Association, while continually advising the Executive Board and monitoring its management of the company. During our meetings, the Executive Board briefed us regularly, promptly and in detail on the development of business and the economic situation of the company and

that of its subsidiaries. The Supervisory Board was directly consulted on all decisions of fundamental importance for the company. Moreover, outside of the meetings, the Executive Board kept the Supervisory Board informed of the most important commercial key figures and submitted matters requiring approval to the Supervisory Board in good time for voting.

Between board meetings, the chairman of the Executive Board regularly briefed the chairman of the Supervisory Board, exchanging information and ideas concerning corporate strategy, current developments as well as risk management. Moreover, the Executive Board notified the chairman of the Supervisory Board on a regular basis of important business transactions and decisions of the Executive Board.

Wide range of subjects addressed at the meetings of the Supervisory Board

All operations of importance for the company were discussed in detail on the basis of the reports of the Executive Board. All measures and dealings requiring the approval of the Supervisory Board were dealt with in depth in our meetings. Regular features of these briefings were the development of revenue, earnings and employment for the Group and its financial position. As in the previous year, we considered the formation of committees to be unnecessary due to the low number of Supervisory Board members. There were no conflicts of interest of the Supervisory Board members during the reporting period.

Financial reports/audits

During our balance sheet meeting on 26 March 2007 we discussed in detail, in the presence of representatives of the appointed balance sheet and group auditors, Grant Thornton GmbH Wirtschaftsprüfungsgesellschaft, the Annual Financial Statements of GFT Technologies AG as prepared by the Executive Board and audited by the auditor, including the Consolidated Financial Statements for the period ending 31 December 2006, as well as the Group Management Report of GFT Technologies AG. During individual, in-depth discussions with the Executive Board and with the auditors, we assessed both the presented Annual Financial Statements and Management Report in addition to the presented Consolidated Financial Statements and Group Management Report and in doing so discussed the underlying balance-sheet policy. Moreover, based on the audit reports and the individual discussions with the auditors, we assessed the audit by the balance sheet and group auditors. In the opinion of the Supervisory Board, both the audit and the audit reports satisfy the requirements of Sections 317, 321 of the German Commercial Code (HGB). The Financial Statements for 2006 prepared by the Executive Board and already issued unqualified auditor's certificates by the auditor were – as was already reported last year – approved and hence established during this Supervisory Board meeting. During the course of the year, we were continually briefed on the periodic financial results and, during meetings held prior to the publication, discussed in depth with the Executive Board and the auditor the 2007 semi-annual report, as well as the interim financial reports for the first and third quarters.

Long-term positioning and international expansion

With regard to strategic alignment, the future international development of the company was discussed at length on a number of occasions. In doing so, we agreed with the Executive Board to focus in particular on organic growth and to complement this with specific acquisitions. In the Services business area, the aim will be to expand existing client relationships to begin with, and to acquire new clients in the Financial and Logistics target segments.

We will press ahead with international growth, especially in countries where GFT already has an office. The focus here will be on North and South America.

The growth strategy in the Resourcing business area aims at expanding the client base from the financial services sector to include blue-chip companies from other sectors. In Germany and France in particular, companies in the production and retail sector are to be approached. International growth will moreover be accelerated in Switzerland and in the United Kingdom.

In the Software segment, we are aiming for organic growth through product innovations; the international expansion of this business field will be stepped up through collaborations with partners. Our software product, inboxx, offers attractive potential for growth against a background of the comprehensive compliance requirements and the archiving market, which is growing dynamically as a result.

Realignment of GFT Solutions GmbH

The future development and organisation of GFT Solutions GmbH was discussed at a number of meetings during the past year under review. During these meetings, the new versions of the software products for business process optimisation and document archiving were presented. Together with the Executive Board we discussed various options for expanding the subsidiary. We share the opinion of the Executive Board that, despite its relative small business volume, the importance of GFT Solutions GmbH for the profile of the company as a whole should not be underestimated.

Risk Management

An important theme of several meetings was the risk management within the group. The Executive Board reported on the main risks and the risk-monitoring system of the company. During numerous meetings with the Executive Board and the auditor, the Supervisory Board was convinced of the effectiveness of the risk-monitoring systems in place. The Executive Board and Supervisory Board have come to realise that it makes sense to summarise the rules of conduct effectively applied in the past in a code of conduct. This was approved by the Executive Board following preparation and extensive discussion (see also "Corporate Governance").

Corporate Governance

We are convinced that good corporate governance forms a fundamental basis for the success, reputation and selfimage of the company. This is why we have continually monitored the further development of the Corporate Governance Standards as well as their implementation within the company. Among other things, this also included the regular appraisal of the efficiency of our own activity, using, as in previous years, a questionnaire on the work of the Supervisory Board to be answered by members of the Supervisory Board. In particular – and also in discussions with the auditor – the ongoing legitimacy of the business management and the efficiency of the business organisation were discussed. On several occasions, the discussion took place during Supervisory Board meetings without members of the Executive Board

attending. In order to continue honing the awareness of every employee of the importance of acting responsibly and legally at all times, as well as its existential importance for the company, we decided together with the Executive Board to introduce a written code of conduct for the company. This was passed by the Executive Board during the second half of the year and is particularly geared towards preventing any and all corrupt or corrupting practices.

Pursuant to 3.10 German Corporate Governance Code, the Executive Board and Supervisory Board report on Corporate Governance at GFT Technologies AG in the Corporate Governance report starting from p. 48. At the meeting of 18 December 2007, we brought our 2007 declaration of compliance issued pursuant to Section 161 German Companies Act (AktG) in line with the German Corporate Governance Code as amended on 14 June 2007, and made it permanently available to all shareholders on the company's website.

Personnel changes

With effect from 22 May 2007, Ingrid Schmidt resigned her seat on the Supervisory Board. Andreas Bernhardt was appointed to the Supervisory Board to replace her by resolution of the Annual General Meeting on 22 May 2007. With his many years' experience in the IT sector, Andreas Bernhardt will bring his particular expertise to the executive body.

Annual Financial Statements and Consolidated Financial Statements 2007

The accounting, the Annual Financial Statements together with the Management Report for the financial year 2007 as well as the Consolidated Financial Statements with notes and the Group Management Report for the year 2007 were audited by the Grant Thornton GmbH Wirtschaftsprüfungsgesellschaft, Hamburg, represented by its Stuttgart branch office, appointed as auditor and group auditor by the Annual General Meeting on 22 May 2007. Qualification, independence and efficiency of the auditor were checked by us on an ongoing basis during the year – as described.

The auditor has appended his unqualified audit opinion to the Annual Financial Statements and the Consolidated Financial Statements of GFT Technologies AG as prepared by the Executive Board including the Management Report and Group Management Report 2007. The Financial Statements were prepared in accordance with the International Financial Reporting Standards (IFRS). All members of the Supervisory Board were provided with full documentation in due time. We discussed the submitted documents and the auditor's reports with the Executive Board and auditor at length, in order to convince ourselves that these were prepared according to regulations; we are satisfied that the auditor's audit report for the year 2007 corresponds with the statutory requirements.

Prior to the meetings, comprehensive reports by the Executive Board, excerpts of company papers, in particular documents from Controlling, were sent out. The Supervisory Board was able to fulfil its monitoring duties on the basis of these documents and other information requested by the Supervisory Board during and outside of the meetings.

At the balance sheet meeting on 25 March 2008, the auditor reported on the most important results of the audits, and was available to provide further information and to answer any questions. In so doing, the members of the Supervisory Board were able to satisfy themselves that the audit complied with the legal requirements and was conducted in an adequate manner.

We subsequently agreed with the results of the audit and approved the Annual Financial Statements and the Consolidated Financial Statements submitted by the Executive Board as well as the Management Report and the Group Management Report of GFT Technologies AG, since the final results of our own audit gave no cause for objections. The Supervisory Board thus established the 2007 Annual Financial Statements.

Although the company would be in a position to distribute a dividend, such a distribution will only be possible starting from the coming financial year, for reasons of stock corporation law.

We would like to thank the Executive Board as well as all employees for their work in the past year. Through your personal commitment you have helped make the 20th anniversary year of GFT an exceedingly successful financial year.

Stuttgart, 25 March 2008

On behalf of the Supervisory Board

Franz Niedermaier

48 Corporate Governance Report

Pursuant to Number 3.10 of the Code

Responsible business management geared towards the sustainable creation of value is of great importance to GFT. We do not see corporate governance as a rigid system of rules and regulations, but rather as an ongoing process, in which values and principles develop in line with prevailing requirements. Our goal is to sustainably merit the trust placed in us by our shareholders, clients and employees.

Transparency and communication

Our goal is to ensure a high level of transparency for all market participants. This is why we disclose all information relevant to the business in a timely manner and report regularly on our business results. All information is made available concurrently in German and English.

On our website at www.gft.com, our shareholders can easily and quickly find detailed information about our company, including current and historic company data. In addition to continually reporting, we provide information about fundamental business changes through press releases, ad hoc communications, and on our website. We respond to increasing investor protection and corporate integrity requirements by forming special teams on an as-needed basis. These teams act in the interest of higher transparency for all market participants.

Executive Board and Supervisory Board

As a joint stock company, GFT is subject to German stock corporation law and therefore has a bipartite management and control structure comprising the Executive Board and the Supervisory Board. The basis for the success of the company has always been the efficient cooperation

between these two bodies. This includes open corporate communication, orderly accounting and auditing and concern for interests of shareholders, as well as the responsible handling of risks.

The Executive Board of GFT Technologies AG continues to be composed of three members. The Board is responsible for managing the company and conducting dealings in accordance with the law, the Articles of Association and the rules of procedure. Its principal tasks include the development and implementation of company strategies, the management of the Group, and the planning and guarantee of an efficient risk-management and controlling system. The duties and responsibilities of each of the Board members are defined in the Executive Board's rules of procedure.

The Executive Board's report can be found starting on page 2 of this Annual Report.

In performing its work, the Executive Board is in close consultation with the Supervisory Board, the latter advising the Executive Board and monitoring its management of the company.

The Executive Board informs the Supervisory Board regularly, promptly and comprehensively about the ongoing business development, all relevant questions relating to corporate planning and strategic further development, the financial and earnings situations as well as the implementation of plans and the attainment of goals. The Executive Board obtains the Supervisory Board's prior agreements in the case of special transactions that are specified in the rules of procedure.

Our Supervisory Board is composed of six members. It performs its tasks in compliance with the law, the Articles of Association and its rules of procedure. The Supervisory Board is responsible for appointing and dismissing members of the Executive Board, determining the remuneration for Board members and approving the Annual Financial Statements. Together with the members of the Executive Board, it plans its long-term succession.

Due to its manageable size and the competence of its members, the Supervisory Board again abstained from the formation of committees, as in previous years. The Supervisory Board was last elected at the 2004 Annual General Meeting for a five-year term of office. The term of office is the same for all Board members. Andreas Bernhardt was appointed to the Supervisory Board by the Annual General Meeting on 22 May 2007. He replaces former Supervisory Board member Ingrid Schmidt who resigned her chair on the Board with effect as of 22 May 2007.

The report of the Supervisory Board, beginning on page 44 of this Annual Report, provides information on the significant issues and decisions covered during the Supervisory Board meetings held in the last financial year.

No conflicts of interest between Executive Board and Supervisory Board

Consultancy and other contracts for work and services between the members of the Supervisory Board and the company did not exist during the reporting period. Moreover, nor did any conflicts of interest arise affecting members of either the Executive Board or the Supervisory Board, which would have required immediately disclosure to the Supervisory Board. During the financial year 2007 there were no dealings between GFT Technologies AG or its affiliates and members of the Executive Board or persons related to them.

Remuneration of members of the Executive Board and Supervisory Board

The remuneration of members of the Executive Board is composed of fixed compensation and profit-related components that are assessed on the basis of the Group's revenue and earnings, as well as on the duties of the respective Board member and his personal goals. In addition, remuneration of the members also includes the provision of a company vehicle for private use and, in two cases, contributions granted towards retirement pensions. A retroactive change of the contribution amounts is excluded. Stock-option programmes of similar securitiesoriented incentive systems do not currently exist.

The remuneration for members of the Executive Board totalled € 1.658m. in the 2007 financial year. On 23 May 2006, the Annual General Meeting of GFT Technologies AG resolved that the remuneration for individual Executive Board members should not be disclosed (Opting Out). In this respect, we are retaining our existing reporting structure.

The remuneration of the services rendered by members of the Supervisory Board is regulated in the Articles of Association, and is exclusively composed of fixed compensation. The remuneration for Supervisory Board members was adapted with the approval of the Annual General Meeting on 23 May 2006 to the increased qualification and liability requirements as well as to the market environment. The following table specifies the figures for each Supervisory Board member. Additional benefits or remuneration for personal services rendered, in particular for consulting and referral services, were not granted.

Members of the Supervisory Board	Renumeration for financial year 2007 in €
Franz Niedermaier	22,000
Dr. Peter Opitz	16,500
Prof. Dr. Gerhard Barth	11,000
Dr. Thorsten Demel	11,000
Dr. Simon Kischkel	11,000
Ingrid Schmidt	4,583
Andreas Bernhardt	6,417
Total	82,500

Members of the Supervisory Board	Numbers of shares
Franz Niedermaier	30,000
Dr. Peter Opitz	0
Prof. Dr. Gerhard Barth	0
Dr. Thorsten Demel	0
Dr. Simon Kischkel	1,302
Ingrid Schmidt	1,000
Andreas Bernhardt	13,000
Total	45,302

Members of the Executive Board	Numbers of shares
Ulrich Dietz	7,447,829
Marika Lulay	25,000
Dr. Jochen Ruetz	100,000
Total	7,572,829

No stock-option programmes or similar securities-oriented incentive systems exist for the Supervisory Board, either.

Directors' dealings pursuant to Number 6.6 of the Code

Living corporate governance

The corporate governance code is continually adapted. In the event that new requirements should arise, for example as a result of the amendment of the code on 14 June 2007, we discuss how these can be integrated into our internal and external processes in a timely manner.

Our compliance officer ensures that the guidelines and processes established in the code and in the rules of procedure are also observed by our domestic and international subsidiaries.

Legal requirements in specific countries as well as generally recognised processes that have been proven in practice are sensibly supplemented and expanded upon by the code. Rules of procedure that ensure the implementation of the corporate governance guidelines have proven effective in the individual companies.

Trade date	Name	Position/area of responsibility	Transaction type	Quantity/ nominal value	Price	Total volume
22/11/07/Xetra	Ulrich Dietz	Chairman of the Executive Board	Share purchase	9,700	€ 3.1806	€ 30,851.82
21/11/07/Xetra	Ulrich Dietz	Chairman of the Executive Board	Share purchase	35,000	€ 3.1643	€ 110,750.50
15/10/07/Stuttgart	Andreas Bernhardt	Supervisory Board	Share purchase	3,000	€ 3.56	€ 10,680.00
16/08/07/Frankfurt	Ulrich Dietz	Chairman of the Executive Board	Share purchase	50,000	€ 3.18	€ 159,063.33
10/08/07/Frankfurt	Marika Lulay	Executive Board	Share purchase	5,000	€ 3.24	€ 16,200.00
06/06/07/Xetra	Ulrich Dietz	Chairman of the Executive Board	Share purchase	76,712	€ 3.28	€ 251,580.43
05/06/07/Xetra	Ulrich Dietz	Chairman of the Executive Board	Share purchase	8,208	€ 3.28	€ 26,962.24
04/06/07/Stuttgart	Andreas Bernhardt	Executive Board	Share purchase	10,000	€ 3.28	€ 32,800.00
04/06/07/Xetra	Ulrich Dietz	Chairman of the Executive Board	Share purchase	20,000	€ 3.29	€ 65,700.00
01/06/07/Xetra	Ulrich Dietz	Chairman of the Executive Board	Share purchase	4,608	€ 3.30	€ 15,202.40
31/05/07/Xetra	Ulrich Dietz	Chairman of the Executive Board	Share purchase	25,472	€ 3.30	€ 84,057.60
30/05/07/Xetra	Ulrich Dietz	Chairman of the Executive Board	Share purchase	15,000	€ 3.35	€ 50,250.00

All dealings were also published on the Company's website at www.gft.com/ir.

Declaration of compliance with the German Corporate Governance Code

At their meeting on 18 December 2007, the Executive Board and Supervisory Board of GFT Technologies AG resolved to adopt the following declaration pursuant to § 161 of the German Stock Corporation Act (AktG). It also includes explanations for the deviations from the specific recommendations.

In the future, GFT Technologies AG will comply with all recommendations of the Government Commission's German Corporate Governance Code as amended on 14 June 2007, with the exception of the following departures:

4.2.4. "The total compensation of each member of the Management Board is to be disclosed by name, divided into non-performance-related, performance-related and long-term incentive components, unless decided otherwise by the General Meeting by three-quarters majority." On 23 May 2006, the Annual General Meeting of GFT Technologies AG resolved with a three-quarters majority that the remuneration for individual Executive Board member should not be disclosed.

5.3. Formation of Committees

With regard to the manageable size of the Supervisory Board, GFT AG generally abstains from the formation of committees. This guarantees an efficient performance and complete information of all members of the Supervisory Board.

5.4.7. (2). "Members of the Supervisory Board shall receive fixed as well as performance-related compensation. Performance-related compensation should also contain components based on the long-term performance of the enterprise."

The members of the Supervisory Board of GFT Technologies AG receive a fixed remuneration only.

Since the last Declaration of Compliance on 11 December 2006, GFT Technologies AG has complied with all recommendations of the Government Commission's German Corporate Governance Code as amended on 14 June 2007, with the exception of the following departures:

4.2.5. (3), sentence 1: "The substantive content of severance awards for Management Board members shall be disclosed if in legal terms the awards differ not insignificantly from the awards granted to employees." GFT AG does not publish the content of severance awards for Management Board members.

5.3. Formation of Committees

With regard to the manageable size of the Supervisory Board, GFT AG generally abstained from the formation of committees. This guarantees an efficient performance and complete information of all members of the Supervisory Board.

The members of the Supervisory Board of GFT Technologies AG receive a fixed remuneration only.

Corporate Governance in the Internet

Corporate Governance at GFT: www.gft.com/corporategovernance Complete wording of the German Corporate Governance Code as well as further information: www.corporate-governance-code.de

Management Report and Group Management Report

as of 31 December 2007

1.	Business operations	53
2.	Legal Framework Conditions	53
	2.1. Information pursuant to sections 315 (2) No. 4,
	289 (2) No. 5 of the German Commercial Code (HGB)	53
	2.2. Information pursuant to sections 315 (4)
	and 289 (4) of the German Commercial Code (HGB)	54
3.	Economic environment	56
	3.1. Macroeconomic developments	56
	3.2. Development in the industry	56
4.	Course of business	57
5.	Development of revenue	57
	5.1. Group revenue	57
	5.2. GFT AG revenue	60
6.	Earnings situation	60
	6.1. Group earnings	60
	6.2. GFT AG earnings	62
7.	Financial position	62
	7.1. Group financial position	62
	7.2. GFT AG financial position	63
8.	Net assets	63
	8.1. Group net assets	63
	8.2. GFT AG net assets	64
9.	Employees	64
10.	Research and development	65
11.	Risk report	66
	11.1. Risk management at GFT	66
	11.2. Business risks	66
	11.3. Personnel risks	68
	11.4. Technological risks	69
	11.5. Financial and currency risks	69
	11.6. Legal risks	69
	11.7. Overall risk assessment	70
12.	Post-reporting date events	70
13.	Opportunities and forecast	70

1. Business operations

Founded in 1987, GFT celebrated its 20th anniversary in 2007. The corporation's work force numbered a total of 1,087 throughout nine different countries, including employees of GFT Technologies AG (GFT AG) and other Group companies as of the end of 2007. GFT AG has been a publicly traded company since 28 June 1999, whose shares (WKN 580 060) are listed on all German stock exchanges.

GFT is an international IT service provider, offering a unique portfolio of services through the Services, Resourcing and Software business segments.

In its Services business segment GFT develops individual IT applications primarily for businesses in the financial and logistics sectors. After rolling out an IT solution GFT takes over operation and maintenance. GFT is a strategic IT partner to prominent corporations worldwide because of the extensive project and technological experience and a depth of industry expertise.

The operations of the Resourcing segment involve the placement of IT professionals for companies in all industries. In the field of third-party management, GFT offers companies the management of their non-strategic IT service provider.

Products developed and implemented as part of our Software business help companies from all industries digitalise their document-based business processes. Since the second half of 2007, the main focus of this segment has been on e-mail archiving solutions.

GFT AG is the holding company for the GFT Group, although the company conducts its own business operations. GFT AG, determines corporate strategy and coordinates the activities of the other legally independent Group companies within and outside Germany. As parent company GFT AG, handles Group-level administrative functions on behalf of its individual subsidiaries. GFT is strategically aligned for sustained profitable growth and increased enterprise value over the long term. Business operations at all company locations are coordinated worldwide for our three business segments representing

GFT's areas of core competency. GFT employs revenue, EBT (earnings before tax), profit margin and account collection targets as its key financial figures for gauging strategic goal obtainment. Operations managers discuss all operational key figures with the Executive Board on a monthly basis, who together develop any necessary countermeasures for rapid implementation.

The Group tracks a number of non-financial performance indicators as well. Feedback on client satisfaction is obtained through ongoing dialogue between the Executive Board and our clients' management, which is one of the reasons why GFT is viewed as a strategic and preferred IT partner by our major corporate clients. Workload capacity utilisation for GFT development centre staff is another regularly monitored metric. The quality of our internal processes and developmental efforts is systematically monitored using the CMMI (Capability Maturity Model Integration) model and proprietary quality controls.

2. Legal Framework Conditions

2.1 Information pursuant to sections 315 (2) No. 4, 289 (2) No. 5 of the German Commercial Code (HGB)

Principles of the remuneration system for the Executive and Supervisory Boards

Executive Board: The remuneration of members of the Executive Board is composed of fixed compensation and results-related components that are assessed on the basis of the Group's revenue and results, as well as on the personal goals agreed upon with the individual members. In addition, remuneration for each of the members also includes the provision of a company vehicle for private use and, in two cases, contributions granted towards retirement pensions within a customary coverage framework. A retroactive change of the contribution amounts is excluded. Stock-option programmes or similar securitiesoriented incentive systems do not currently exist. During the past financial year, the total remuneration for members of the Executive Board totalled € 1.658m (prev. year: € 1.432m). On 23 May 2006, the annual general meeting of GFT Technologies AG resolved that the remuneration for individual Executive Board members should not be disclosed (opting out). In this respect, we are retaining our reporting structure to date.

Supervisory Board: The remuneration for members of the Supervisory Board is regulated in the Articles of Association, and is exclusively composed of fixed compensation. The remuneration for Supervisory Board members was adapted, with the approval of the Annual General Meeting on 23 May 2006, to match the increased requirements pertaining to skill and responsibility, as well as the market environment. Each member of the Supervisory Board receives a compensation of € 11,000 per year. The Chairman receives twice this amount, and his deputy receives 1.5 times this amount. During the past financial year, the remuneration for members of the Supervisory Board totalled € 82,500 (prev. year: € 82,500). Additional benefits or remuneration for personal services rendered, in particular for consulting and referral services, were not granted. There are also no stock-option programmes or similar securities-oriented incentive systems in place for the Supervisory Board.

2.2 Information pursuant to sections 315 (4) and 289 (4) of the German Commercial Code (HGB) Structure of the share capital (No. 1): As of

31 December 2006 the Company's issued share capital amounted to € 26,325,946.00 (no change from the previous year). It is divided into 26,325,946 bearer shares. The proportionate amount of share capital allocated to each share totals € 1.00. All Company shares were issued as ordinary bearer shares without nominal value (no-par shares). All shares grant equal rights. The rights and obligations imparted by the shares conform with the German Stock Corporation Act.

Shareholdings which exceed 10% of the voting rights (No. 3): As of 31 December 2007, the Company is aware of the following direct equity participations that exceed ten percent of the voting rights: Mr. Ulrich Dietz (Chairman of the Executive Board) holds 28.29% of the GFT shares (prev. year: 27.36%).

Rules governing the appointment and replacement of Executive Board members (No. 6):

The appointment and replacement of members of the Executive Board is regulated in sections 84 and 85 of the German Stock Corporation Act. The German Corporate Governance Code regulates further principles concerning the appointment of members in its section 5.1.2. Both regulations are taken into account. Pursuant to section 5 of the Articles of Association, the Supervisory Board determines the number of Executive Board members, which is a minimum of two. The Articles of Association do not contain any further regulations on the appointment or replacement of Executive Board members.

Rules governing the amendment of the Articles of

Association (No. 6): The requirements for the amendment of the Articles of Association are primarily regulated in sections 179 to 181 and 133 of the Companies Act. Reference is made to these provisions. The General Meeting can assign the authority to amend the Articles of Association to the Supervisory Board insofar as such amendments merely relate to the wording. This is allowed by the Company through the provisions in section 21 (1) of the Articles of Association.

Executive Board authorities, particularly the issuing and buy-back of shares (No. 7): Authorised capital:

Pursuant to section 4 (5) of the Articles of Association, the Executive Board is authorised until 22 May 2011 to increase the Company's share capital, with the approval of the Supervisory Board, by up to € 10,000,000.00 through a one-time-only or repeated issuance of up to 10,000,000 bearer shares, against cash contributions and/or contributions in kind (authorised capital). The Executive Board can decide on the exclusion of subscription rights, with the approval of the Supervisory Board, in particular cases established in the enabling resolution and in section 4 (5) of the Articles of Association. For further details we refer to the specifications in the Notes to the Consolidated Financial Statements, or in the Notes to the Financial Statements.

Conditional capital:

The Company disposes of two conditional capital (sections 192 et sq. German Stock Corporation Act), which are regulated in section 4 (6) of the Articles of Association.

Conditional capital I/1999

Share capital is conditionally increased up to a nominal € 780,000.00, divided in up to 780,000 shares made out to the owners (Conditional capital I/1999). This conditional capital increase serves the granting of purchase rights to members of the Executive Board and Company employees, as well as to members of executive management and employees of affiliated companies, in accordance with the resolution of the Annual General Meeting of 4 June 1999. The conditional capital increase will only be executed to the extent that holders of subscription rights utilise these rights. New shares participate in profits from the beginning of the financial year in which the exercise of subscription rights has taken place. The Executive Board is authorised to establish details on the execution of the conditional capital increase, as well as to define subscription rights with the consent of the Supervisory Board, provided this is in accordance with the resolution of the Annual General Meeting on 4 June 1999. Based on this authorisation, up until now 542,529 subscription rigths have been granted. These subscription rights expired without exercise by July 2005 at the latest.

Conditional capital II/2007

A conditional increase in share capital (Conditional capital II/2007) of up to € 7,500,000.00, through the issuance of a maximum 7,500,000 dividend-paying bearer shares, was authorised as of the new financial year. This conditional increase provides for the issuance of shares against cash in connection with the exercise of convertible bonds and/ or warrants issued by the Company or its subsidiaries through the date 21 May 2012, pursuant to a 22 May 2007 shareholder resolution. Only under the above conditions, namely the exercise of convertible bonds and/or warrants, may share capital be increased per the resolution. The Executive Board is authorised to determine the further specifics in connection with the issuance of shares under this contingency. Subscription rights in connection with this authorisation have thus far not been conferred.

Purchase of own shares: The purchase of own shares is exclusively allowed under section 71 (1) of the Companies Act, if one of the exceptional circumstances regulated therein is present. At present, the Company does not possess an enabling resolution for the purchase of private shares pursuant to section 71 (1) No. 8 of the German Stock Corporation Act. Therefore, the Executive Board can buy back own shares based exclusively upon the legal provisions of section 71 (1) of the German Stock Corporation Act, under the requirements therein regulated.

Compensation agreements with Executive Board members in the event of a change of control

(No. 9): In the event of a change of control, certain particularities will result in terms of the employment contracts with the Executive Board members, which are to be taken into account in evaluating the changed situation. In the event of a takeover bid following a change of control, and in other comparable situations, the members of the Executive Board are entitled to a temporary right of cancellation. The term "change of control" is individually defined in each case. A change of control is, for example, the conclusion of an affiliation agreement for a dependent company in accordance with section 291 of the German Stock Corporation Act, a company merger, and other comparable actions. A change of control is present, in any event, with the purchase of a minimum of 30% or the majority of voting rights in a company, by a third party or by several jointly acting third parties. If a member of the Executive Board should exercise his or her right to cancellation, such a member shall have an agreed upon claim to severance pay, which shall total at least 50% of the annual pay and which shall not exceed, in any case, the amount of the member's annual fixed salary that is valid at the time of the termination of contract, up to the end of the regular contract period. One of the regulations links the severance pay, instead, to a special right of cancellation at the time that the employment contract ends, within a determined time period following the change of control. Compensation equalling twice the annual fixed salary is agreed upon with the Executive Board member in question.

3. Economic environment

3.1. Macroeconomic developments

Global economic expansion was still at a high level in 2007, although not as strong as the previous year. Market turbulence in the second half of 2007 took a toll on the global economy, despite significant interest-rate cuts. Economic growth is anticipated to slow in 2008 on a global basis, the US economy being impacted in particular. 7 8

GFT's biggest markets retained the same growth momentum in 2007 as in the year prior. In Germany, gross domestic product (GDP) rose 2.5%, coming after 2.9% in 2006. The impact of the global financial crisis began to be felt in the fourth quarter, slashing growth to 0.3%. In the UK gross domestic product increased by 3.1% (prev. yr. 2.8%). A growth of the gross domestic product was also posted in Spain by 3.8% (prev. yr. 3.9%), in Switzerland by 2.1% (prev. yr. 2.7%), the USA by 2.1% (prev. yr. 2.9%) and France by 1.9% (prev. yr. 2.0%). 2 3 4 5 6

3.2. Development in the industry

The European IT industry showed solid growth, as in previous years. According to the European Information Technology Observatory (EITO), the overall European IT market grew by 4.4%. The fastest growing segments were software and IT services, which are among GFT's core competencies, posting 6.6% and 5.5% respectively. Professional IT services, including outsourcing, consulting and system integration, are in particular demand. According to the German Association for Information Technology, Telecommunications and New Media (BITKOM), demand was fuelled primarily by businesses massively investing in IT systems.

As in the previous year, data from the European Information Technology Observatory (EITO) indicates that the IT market grew faster in 2007 across all business segments relevant for GFT than gross domestic product in the countries in which we operate. The Spanish IT market once again took the lead, growing 6.1%, followed by the UK with 5.0% and France with 4.6%. In these countries, IT market growth exceeded the EU average by 4.4%. The Germany and Swiss IT markets fell below the EU average in 2007, as in the previous year, growth exceeding national GDP however in both cases.

for IT market: EITO 2007; for BIP: European Commission, Eurostat, OECD

4. Course of business

The GFT Group substantially exceeded its revenue and earnings targets for financial year 2007. The existing locations have been expanded and business with existing clients has been expanded. Besides, business in new markets and with new clients grew. At € 247.1m, the total revenue was 42% above that of the previous year. Earnings before tax (EBT) also rose accordingly: The GFT Group posted earnings of € 12.4m, up 85% versus 2006. Also the GFT AG reported a significant growth of revenue by almost 57% to € 119.7m compared to the previous year. Earnings before tax totalled € 2.6m. The Executive Board was extremely pleased with the development of the GFT AG and the GFT Group.

The GFT Group improved its market position in North America and Brazil in 2007. Existing North American client accounts are serviced with great attention from our New York sales office, which will also acquire new clients in the financial-services sector. GFT expanded the Brazil development centre for better penetration into the local market and use as a nearshore location for US clients. We will continue to vigorously pursue these activities in 2008.

GFT's being included in the American FinTech 100 ranking for the first time last year confirmed our status as a leading IT provider in the financial sector. GFT ranked 57th among the world's top 100 IT service providers to the financial sector. The ranking is based on annual revenue and percentage of revenue derived from financial-sector clients as indicators of provider stature and importance within the sector. GFT and client ABN AMRO jointly received the European Banking Technology Award for providing the best European IT solution for corporate clients and investment banking.

GFT's London and Zurich offices are now conducting operations in the Resourcing segment. In the UK, one of Europe's biggest markets for freelance IT personnel, by the end of the year we had assembled a dedicated fourman sales team and made some 60 permanent freelance placements.

In our Software segment, we realigned our product offering in the second half of 2007 to focus on software solutions for e-mail archiving. With this move, we are now addressing an attractive market projected to grow at an average 37% annually through 2011 according to Gartner market research.

5. Development of revenue

5.1. Group revenue

The GFT Group posted record revenue in its history of € 247.1m, up 42% (prev. yr. € 173.7m). Services accounted for 41% of consolidated revenue, reflecting increased business with existing financial-sector clients combined with vibrant new client acquisition. Revenue attributable to our largest client in the Services segment thus declined to 43% of total (prev. yr. 47%) in financial year 2007, although revenue from this client increased slightly year on year. Resourcing remained the highest revenue-generating business segment, contributing 57% of total, up 8% year on year. Software segment revenue accounted for 2% of total, down from 4%. Both Group revenue and Group earnings have been strong in financial years 2006 and 2007. Recovering from a slight decline in the fourth quarter 2006, revenue rose continuously throughout 2007.

Development of revenue and earnings before taxes for the GFT Group, on a quarterly basis 100

Revenue by divisions

The GFT Group's Services division 2007 posted a significant 22% rise in revenue to € 100.8m. The 6% decrease from 47% to 41% of total revenue was due to strong revenue growth in the Resourcing segment. Revenue growth in the Services segment was driven primarily by increased business with existing clients and projects for new financial sector clients. Due to the tense situation in the financial services industry and on the capital markets, the fourth quarter of 2007 saw a slight hesitancy to invest in

new projects on the part of bank clients for the first time. Having steadily risen over the first three quarters of the year (Q1: € 23.5m, Q2: € 25.5m, Q3: € 26.1m), revenue for the fourth quarter 2007 edged back to € 25.7m.

The Resourcing business division increased its share of total revenue year on year, up from 49% to 57% for 2007, accounting for well over half. The GFT Group saw a revenue increase from this segment by € 56.1m year on year to € 140.4m. The segment benefited from rising demand for freelance IT personnel in the Resource Management business (RM) and substantial orders from a new third-party management (TPM) client. TPM accounted for approximately 61% of Resourcing revenue or € 85.9m (prev. yr. € 44.1m). Resource Management (RM) revenue was up 36% to € 54.5m.

Software revenue attained € 5.9m, down 17% from the previous year (€ 7.1m), declining 2% in terms of percentage of total to 2%. In consequence, the Executive Board made the decision to focus in this business division on the fast-growing e-mail archiving market, initiating measures for the rapid implementation of this strategy.

2,0

Revenue by countries

Germany retained its status as top-selling market in 2007, increasing its lead versus the previous year. In its home market the GFT Group generated revenues of € 170.4m (prev. yr. € 109.0m), accounting for 69% of total revenue (prev. yr. 63%).

Revenue was also up in the UK, our second-largest market. There, the GFT Group generated revenue of € 24.2m with new and existing UK clients, an increase of € 9.2m as against financial year 2006. This represents 10% of total revenue (prev. yr. 9%).

With a revenue of € 15.5m, the spending behaviour of our Spanish clients almost stayed at the previous year's level (€ 13.7m). Percentage of total declined, however, from 8% to 6%, due to greater overall revenue growth. The strategy of utilising Spain as a nearshore development location for Germany and the UK continues to prove highly effective.

Brazil underwent further expansion as an offshore development centre for Europe and a nearshore location for North America during the past financial year. We will continue to pursue this same strategy in 2008 through selected partnerships. The € 11.9m in revenues generated (prev. yr. € 11.6m) derived chiefly from a major project being conducted with a Brazilian bank.

In France revenues increased by € 2.5m year on year to € 13.4m, thus accounting for 5% of total revenue for the year. In Switzerland, the GFT Group generated revenue of € 4.7m (prev. yr. € 4.3m) through projects for banks and public-sector clients, contributing 2% of total revenue as in the year prior. In other countries including Italy, Austria and the US we generated € 7.0m in revenue – € 2.2m less than for 2006.

Revenue by industry Services

At the Group level

The financial services sector was again the most important for the GFT Group in 2007, accounting for € 168.2m (prev. yr. € 111.3m) or 68% of consolidated revenue for 2007. This represents a 51% increase versus the previous year. In addition to large third-party management clients, Services projects were a major revenue driver, 78% of which was attributable to financial service clients. Logistics is the second most important sector for this business. Though down 1% in relative terms, in absolute terms an additional € 5.1m in revenue was generated from the sector, up to € 22.8m (prev. yr. € 17.7m). GFT generated 56% higher revenues from industrial sector clients for a total € 40.6m (prev. yr. € 26.1m), most of which stemmed from the Resourcing segment. The industrial sector accounted for 24% of revenue for this segment.

As the products of the Software division are not tied to any particular sector the Software revenues are distributed across all industries. Revenue from other industries fell from 11% to 6%.

5.2. GFT AG revenue

GFT AG revenue rose year on year by € 43.3m to € 119.7m (prev. yr. € 76.4m), representing a 57% increase. New Resourcing clients were the primary driver. Projects for banks and logistics firms led to an increase in Services revenue. The Services segment accounted for 28% of revenue (prev. yr. 42%), Resourcing 72% (prev. yr. 58%). Total operating revenue for GFT AG increased by € 44.9m or 58% to € 121.7m. GFT AG revenue derived 99% from the domestic market (prev. yr. 95%).

6. Earnings situation

6.1. Group earnings

Earnings before taxes (EBT) of € 12.4m substantially exceeded expectations for 2007, and were € 5.7m higher than the previous year's figure of € 6.7m, up 85%. Capacity utilisation increased significantly in the Services segment in 2007, yielding economies of scale boosting earnings. The Resourcing segment benefited in 2007 from integration of the former Parity companies into the GFT Group completed last year, having now put the associated charges behind it. The pretax operating margin increased to 5.0%, up from 3.8% last year.

GFT Group net income for 2007 increased 68% to € 8.6m (prev. yr. € 5.1m). The taxation rate declined to around 30% during the year under review with income taxes of € 3.8m. The taxation rate for 2006 was approximately 35%, adjusted for one-time income from recognition of a corporate tax credit of € 0.8m.

Earnings per share rose to € 0.33 for 2007 accordingly with the rise in net income, as compared to € 0.19 for 2006.

Group earnings by segment

The Services segment was the decisive factor in increasing segment earnings in the GFT Group. Services posted 37% higher earnings in 2007, increasing € 2.8m to € 10.3m (prev. yr. € 7.5m). Concentrating on the financial and logistics sectors paid off once again in 2007. The operating margin for the GFT Group in the Services segment reached 10.2% in 2007 (prev. yr. 9.1%), due mainly to the major project underway in Brazil and a jump in sales to UK financial clients. The only drag on segment earnings came from losses posted by business units in France (€ -0.7m) and India (€ -0.1m).

Resourcing earnings continue to improve, up € 2.2m to € 3.5m, more than double last year's result (prev. yr. € 1.3m). This increase is 171%, correlated with the substantial and purely organic revenue growth this business segment is experiencing. We are particularly pleased to report that both businesses within this segment showed earnings improvement, unlike last year. The TPM business flourished, earnings before taxes rising from € 0.5m last year to € 1.2m for the operating margin of 1.4%. The RM business fared similarly, posting EBT of € 2.3m for 2007, up € 1.5m versus the previous year (€ 0.8m), for a 4.2% operating margin. Efforts to build up the new RM units in the UK and in Switzerland resulted in charges of € 0.2m against earnings before tax.

The Software segment was unable to meet earnings expectations for 2007. EBT was lower by € 0.1m year on year at € -0.6m (€ -0.5m), principally because of poor revenues in financial year 2007. The realignment of this business segment around e-mail archiving and the inboxx product in the third and fourth quarter of 2007 involved expenses for a Europe-wide sales and marketing campaign which, while impacting earnings in the short run, are expected to have a positive return on investment for the segment in the future.

Group expenses and income

Other operating income for the Group amounted to € 2.0m for 2007 (prev. yr. € 3.0m). This was mainly due to a lack of a significant amount of profitable sales of securities in 2007 in contrast to 2006. The majority of other operating income stemmed from liquidating provisions to the amount of € 1.2m (prev. yr. € 0.9m).

Cost of materials mainly involves the purchasing of external personnel for the Resourcing segment and for client projects in the Services segment. The sharp rise in cost of materials, up € 62.9m or 72% to € 150.2m in 2007 (prev. yr. € 87.3m) is thus correlated with strong revenue growth in the Resourcing and Services segments. Personnel expenses, on the other hand, rose only 4.2% to € 64.5m, as against € 61.9m for the previous year. This modest increase reflects a shortage of skilled labour, making it impossible to hire the planned amount of personnel for the Services segment. External employees were hired for placement by Resource Management, generating additional revenues in Germany and the UK that had an offsetting effect.

Depreciation of non-current intangible assets and of tangible assets increased minimally in 2007 by € 0.2m, totalling € 1.4m (prev. yr. € 1.2m).

Other operating expenses for 2007 came to € 21.2m compared to € 20.2m for the year prior, up by € 1.0m. Operating expenses remained unchanged year on year at € 6.0m, which include in particular rental and utilities costs for office space. Sales expenses, the largest items under which are travel and marketing costs, were up slightly to € 7.1m (prev. yr. € 7.0m). Administrative expenses also increased by € 1.3m year on year to € 6.6m.

The GFT Group's financial result more than doubled in 2007, as against the previous year, to € 0.5m (prev. yr. € 0.2m). Net interest income rose slightly by € 0.2m to € 0.7m (prev. yr. € 0.5m). At the same time, depreciation on financial assets and securities declined to € 0.1m, lower than the previous year's figure (€ 0.3m) by € 0.2m.

6.2. GFT AG earnings

GFT AG's earnings before tax were lower by € 0.2m year on year, amounting to 2.6m (prev. yr. € 2.8m). Whereas business in Germany was largely at the same level as last year, in line with expectations, the French business unit included in GFT AG reporting fared poorly, posting a net loss of € -0.7m that impacted earnings accordingly (prev. yr. € -0.2m).

Rising costs of purchased services to the amount of € 46.6m for a total € 102.5m had a major impact on earnings for financial year 2007, involving a € 44.9m increase in total operating revenue to € 121.7m. Total operating revenue reflects a € 2.0m increase in inventories of work in progress (prev. yr. € 0.4m).

Income from investments, profit transfer agreements and tax sharing payments from subsidiaries increased by € 2.4m to € 4.5m (prev. yr. € 2.1m). This includes for the first time the profit transfer agreement with GFT Resource Management GmbH approved by the Annual General Meeting in 2007.

Net income for the year came in lower year on year by € 1.0m at € 2.5m. Net income for 2006 was boosted by one-time income from the recognition of a € 0.7m corporate tax credit

GFT AG expenses and income

Other operating income amounted to € 5.4m, down year on year by € 0.3m. The largest single item was income from administrative cost-sharing charges as payment for Group-level service functions to the amount of € 4.7m (prev. yr.: €3.9m).

Cost of materials rose for GFT AG from € 55.8m to € 102.5m. This was due in part to a substantial revenue increase in third-party management business, but also to increased use of external IT freelancers in the Services segment.

Personnel expenses fell 3% to € 17.2m (prev. yr. € 17.8m). This was the result of employee turnover, which was compensated for by external freelancers and increased use of our production centres in Spain and Brazil.

Other operating expenses increased in 2007 from € 7.9m last year to € 8.6m. Distribution expenses increased from € 0.5m last year to € 2.6m.

The financial result improved from € 2.4m to € 4.2m. This was substantially due to an improved result from investments in associated companies to € 2.7m (prev. yr. € 2.1m) and € 1.8m in transferred profits. Depreciations on investments and on short-term assets debited the financial result with € 0.8m (prev. year: € 0.3m).

7. Financial position

7.1. Group financial position

The GFT Group's stable financial position continued to improve, with the positive results attained in 2007. The level of unrestricted cash had again increased by € 5.5m as of 31 December 2007 to € 25.7m (prev. yr. € 20.2m). Liquid funds totalled € 28.7m, € 4.8m higher than the € 23.9m recorded last year. Offsetting current financial liabilities were almost entirely redeemed (-92%), with only € 0.2m left as opposed to € 2.4m last year. This reduction reflects the closing of the factoring credit line in France at the end of 2007.

Cash flows from operating activities also rose in consequence of the strong net profit for 2007, up 520% to € 9.3m versus € 1.5m in 2006. The change in provisions also contributed to increased cash flows from operating activities. A significant rise in trade receivables was offset nearly entirely by increasing trade payables.

Cash flows from investing activities for 2007 of € -1.5m were lower than last year's figure (€ -3.6m) by € 2.1m. While this item reflected almost exclusively investment in tangible assets in 2007, last year's figure reflected the substantial impact of acquisition of the former Parity companies, financed by the sale of securities. Investment in tangible assets increased minimally year on year to € 1.3m versus € 0.9m for 2006.

Cash flows from financing activities declined to € -2.4m in 2007 due to the closing of the factoring credit line in France, as mentioned above. In 2006, credit line borrowing involved cash flows of € 1.9m.

7.2. GFT AG financial position

GFT AG held cash on hand and on deposit totalling 16.1m as of 31 December 2007, an amount significantly higher than the € 11.5m reported for the prior year. This improvement was due to an improved result from investments of € 2.7m (prev. yr. € 2.1m) and the first-time transfer of profits from GFT Resource Management GmbH (including GFT Flexwork GmbH) to the amount of € 1.8m.

Cash flows from operating activities increased considerably from € -1.4m last year to € 5.3m in 2007. This was mainly the result of the change in provisions, increased depreciation, increased trade payables and prepayments on orders and a simultaneous substantial increase in trade receivables.

The trend in cash flows from investing activities was similar to cash flows from operating activities. Cash flows from investing activities increased from € -3.3m to € -0.7m. Investments in financial assets declined from € 7.0m in 2006 to € 0.5m. Simultaneously, receipts in connection with the short-term financial management of cash investments fell.

Both the GFT Group and GFT AG were able to meet their respective payment obligations at all times.

8. Net assets

8.1. Group net assets

The balance sheet total for the GFT Group as of 31 December 2007 increased by € 19.7m to € 111.9m versus € 92.2m in the previous year.

The biggest changes in assets concerned trade receivables, cash and securities. Trade receivables rose in connection with substantial revenue growth by € 13.8m, deriving chiefly from the Resourcing segment, for a total of € 47.9m as of 31 December 2007 (prev. yr. € 34.1m). The significant € 4.8m or 20% increase in cash and securities to a total of € 28.7m reflected rising net profits, as compared to € 23.9m last year. Goodwill remained unchanged in 2007.

GFT Group equity increased by € 8.3m year on year to € 57.7m (prev. yr. € 49.4m). This yields an equity ratio of 52% versus 54% for the prior year. The increase in equity was primarily due to net income for the year of € 8.6m. Capital reserve and retained earnings were drawn on to reduce consolidated balance sheet loss carried forward by € 25.2m to € 12.9m (prev. yr. € 46.7m).

Non-current liabilities remained stable at last year's level of € 2.8m, while current liabilities rose by € 11.4m to € 51.4m along with rising revenue (prev. yr. € 40.0m). This involved increasing trade payables from the Resourcing segment predominantly, up from € 15.6m in 2006 to € 28.9m in 2007.

The GFT Group's solid balance sheet is characterised by a high equity-to-fixed-assets ratio. Non-current assets totalling € 30.9m are 187% covered by equity (prev. yr. 161%).

8.2. GFT AG net assets

GFT AG's net assets rose by € 18.5m from € 48.6m to € 67.1m.

Fixed assets remained nearly unchanged at € 17.0m. This figure reflects a € 0.5m depreciation of the carrying value of an investment in an associated company. Sharply rising revenue was responsible for an increase in current assets driven by trade receivables, from € 7.5m to € 18.7m. Cash on hand and securities also rose substantially from € 14.7m to € 18.7m.

On the liabilities side, as of 31 December 2007 prepayments received from ongoing fixed-price projects increased by € 3.1m to € 4.1m (prev. yr. € 1.0m). Trade payables increased along with revenue by € 9.1m to € 19.2m (prev. yr. € 10.1m).

GFT AG equity rose from € 28.9m to € 31.4m as a result of the net profit posted for the year. The Executive Board resolved at financial year end to allocate € 25.2m from the capital reserve to be applied against the loss carried forward, as well as retained earnings. Based on net income for the financial year, the parent company thus broke even in terms of accumulated profit/loss, fulfilling the legal prerequisite on 31 December 2007 for a potential dividend distribution.

9. Employees

The number of employees in the GFT Group workforce increased by 30 year on year to a total of 1,087 as of 31 December 2007 – including part-time employees included on a pro-rata basis (prev. yr. 1,057). Most hiring was for the UK and Brazil locations and the Resourcing teams in France and Germany, where revenue was up accordingly.

Employees by divisions

The most personnel-intensive business segment in 2007 was Services, to which 87% of the total workforce belonged (prev. yr. 89%). The number of Resourcing personnel increased by two percentage points year on year to 7%. Staff levels for the Software segment were unchanged at 6% of total.

Employees by countries

The distribution of employees across the different countries in which we operate remained largely unchanged. Over half of GFT Group employees (56%) worked in Spain in financial year 2007 (prev. yr. 59%). Our Spanish subsidiary is utilised intensively as a development centre for clients in Germany in the Services segment. As in the previous year, 28% of the workforce was employed at locations in Germany.

The number of freelancers was up sharply year on year from 903 to 1,317 on 31 December 2007. In addition to increasing placements of freelancers, GFT is also deploying increasing numbers of external specialists for Services projects. This is in response both to the greater flexibility demanded by our clients and to the current shortage of skilled IT professionals in Germany and Spain.

The average number of employees for the financial year was 1,072 (prev. yr. 1,033), this figure being 1,060 for the first half of the year and 1,063 for the first nine months of 2007. The percentage of international employees was unchanged at 72% at year end, representing 786 staff members. Thus 28% of the total workforce or 301 staff members were employed in Germany.

As of 31 December 2007, GFT AG staff members numbered 186, 16 less than one year ago.

10. Research and development

The GFT Group's research and development expenses came to € 3.6m for 2007, approximating the previous year's level (prev. yr. € 3.9m) at 1.5% of revenue. Personnel expenses accounted for the lion's share at 89% or € 3.3m of total. Research and development efforts remained focused on process innovation. We made additional progress in software and system development in conformance with the international CMMI standard (Capability Maturity Model Integration). CMMI is a process model for measuring and improving the quality ("maturity") of product development processes in organisations. GFT production units have been in conformance with the demanding CMMI level 2 quality requirements since 2005. For 2008, plans are to achieve CMMI level 3 for the production centres in Spain and Brazil, major preparations for which were already undertaken in 2007.

GFT invested substantially in the further development of its software products for automated archiving, € 1.5m or 42% of total research and development expenses going to the Software segment. Efforts centered on further development of the inboxx software solution for automated e-mail archiving.

The GFT Group works constantly to optimise and expand internal communication channels for the sharing of information and knowledge. The nexus of these channels is the Group-wide internal portal GFT Workspace, which added on a number of new, key functionalities in 2007.

11. Risk report

As a leading global IT service company, the GFT Group is subject to a number of entrepreneurial opportunities and risks. Our risk strategy is based on a responsible assessment of risks and related opportunities. In the three business segments of the GFT Group, we assume consciously contained and foreseeable risks, provided that a reasonable increase in value can be expected. We thus pursue a combination of well-proven and promising engagements. The following risks and risk-prevention measures are therefore valid for the GFT Group, and correspondingly applicable for GFT AG.

11.1. Risk management at GFT

The objective of our systematic risk management is to identify and to evaluate early potential risks, as well as to initiate appropriate precautionary and safety measures in good time. The risk management system is directly oriented to the structure of GFT Group and decentrally organised. All managers are responsible for continuing to review and evaluate opportunities and risks. These include the Executive Board and the managing directors of associated companies, as well as the process and project managers. A non-hierarchical reporting system with a defined procedure ensures proper information management. The bodies of the GFT confer regularly throughout all levels, locations and countries in order to optimise exchange of information between operational and central areas.

The risk management system includes planning, information and control processes, and is documented in a manual available to all employees. The task of executives is to raise the awareness of their staff and thus to enable each individual to recognise opportunities and risks, as well as to react appropriately. If the assessment of a particular risk situation should change, specified processes regulate how to take appropriate measures as soon as possible.

The Risk Management Officer is the Group contact and takes action immediately if unforeseen risks occur. He is responsible for the development of the risk management system and its documentation in the risk management manual. In addition, it defines uniform standards and ensures that similar risk management processes are applied in the three business segments. Uniform risk groups have been defined for all associated companies. They are divided into external, operational, financial and organisational risks. External risks include the economic environment, industry development, the competitive situation, technological progress and the capital market. The Board and the Risk Management Steering Committee monitor the development in these areas. Group Controlling, the Investor Relations team and the employees responsible for sales and production support them thereby. Operating risks are those which may occur in the implementation of IT projects and in the placing of freelance IT specialists. Sales, earnings and liquidity planning are the financial control parameters, which are planned, analysed and evaluated in the monthly meetings of the Financial Council. Organizational risks are primarily in the areas of personnel, information technology and general organisation. They are monitored and controlled by the competent segment heads.

11.2. Business risks

Information technology is developing at a rapid pace, and the IT services and software markets will continue to be characterised by strong competition. We are working intensively at anticipating the needs of our clients through innovative solutions, at expanding our portfolio and utilising the competitive advantage that exists therein. For this reason we observe the market intensely, and take advantage of the opportunities to expand our global presence. We thus make ourselves independent of regional test markets and expand our customer base.

GFT currently generates about 77% of total revenue from financial and logistics service providers. The strategic focus is on these industries only in the Services segment. At the same time, this opens up sales potential for the other two business areas, which we consistently use. GFT achieved significant revenue with projects which benefit from the performances of two or even all three areas. Due to the rising share of total sales generated in the Resourcing segment and the broad diversification of industries in this business area, the risk of focusing on industries in the Services segment is reduced.

The performance spectrum of the three business areas of GFT – Services, Resourcing and Software – differs greatly, as does the risk structure. It will therefore be analysed separately for each segment.

We are working continuously on improving early recognition and management of opportunities and risks. The valuable findings of two supervision units are assimilated into this process. On the one hand, our internal review monitors the individual Group companies and projects within the scope of its regular and special audits. On the other hand, the organisation and operation of the early risk detection system are a component of the auditor's examination.

Services

The experts at the EITO (European Information Technology Observatory) report a solid growth rate of 5.5% in the European market for IT services for 2007, and forecast a stable development for 2008. Based on this information, we are generating above-average growth possibilities for the GFT Group. We are assuming that both of the branches on which GFT's Services segment focuses, financial and logistics services, will invest more than others. Our strong customer base, which distinguishes itself through its satisfied regular customers, makes us confident that we can tap this potential. According to the EITO experts, company investments will be less driven in the future by

short-term cost-saving potentials, and more by a longterm interest in sustainably increasing their own efficiency. This coincides with our observations, and allows us to create a more consistent and reliable development than in the past. We are well positioned thanks to a broad technological basis, and we are also in a position to react to short-term trends in a flexible manner.

GFT is holding its ground in the IT services market, against strong domestic and international competitors. Some of them, such as India, possess more comprehensive development resources. A considerable part of our revenue is earned from our large base of regular customers. Most of these revenues are secured by long-term contracts. Thanks to the continuous maintenance of core applications we have gotten acquainted with their IT environments in great detail over the years. With the procurement of projects we are able to expand upon these close customer relationships and, in addition to making use of our project experience, we are also able to demonstrate our deep level of expertise in the industry. Our clients further benefit from cost advantages. These result from our international software development network that enables an individual choice between onshore, nearshore, or offshore development.

The success of large and complex IT projects, as carried out by us, depends largely on whether we are in a position to implement such projects with high quality and at the agreed-upon budget and deadline conditions. Generally, orders are preceded by highly competitive proposal phases which require estimating expenses and project risks as precisely as possible. Due to unexpected technical challenges or unpredictable developments, the real costs could depart from the original estimates. This may affect the profit margin of a fixed-price project adversely or result in further financial consequences when a completion date, scope of service or other contractual covenants cannot be observed. In order to avoid these situations, GFT has established detailed and binding specifications,

both for the preparation of proposals as well as for project and quality management. In doing so, we are proceeding in accordance with the internationally recognized Capability Maturity Model Integration (CMMI) process model. In the past, this model has aided in considerably reducing technical problems, as well as budget and deadline overruns.

The share of revenue for our largest client in this business division totalled 43% (prev. year: 47%) in the Services segment. Restrained demand from this client could have a negative effect on the development of revenue and earnings. These high revenue shares and associated cash flow fluctuations are safeguarded by long-term contracts, intensive customer care at the Executive Board level, and focused account management.

Resourcing

We continue to assume that the trend among large companies of consolidating the IT suppliers will intensify. Large companies often place value on processes becoming uniform and streamlined, they do not consider the sourcing of non-strategic service providers to be a core function of the enterprise. A growing demand for TPM solutions is clearly manifest. We continue to see good chances for success for our resourcing of external IT specialists. We are counting on companies counteracting the current shortage of skilled workers in the IT industry and in their own companies by resorting to flexibly placeable external specialists. This development strengthens our growth potential in the entire Resourcing segment. Should GFT not succeed, however, in profiting from this favourable market environment, the revenue and earnings trend of the GFT Group could be adversely affected. 63% of our revenue in the Resourcing segment is generated from four major clients. Restrained demand from these clients would have a considerable effect on revenue, but only a marginal effect on income.

We attempt to counteract such possibilities by not entering into any permanet employment contracts with external service providers. Rather, we only enter into contracts that are limited in time according to the client's desired employment term. In doing so, we are able to react quickly and flexibly in the event of falling demand.

Software

In the Software business we operate as an experienced supplier in stiff competition with an array of suppliers of various sizes. In our portfolio this segment plays a complementary role. It achieves 2% of total revenue and opens up interesting foot-in-the-door possibilities with customers and thus opportunities for growth – even in other segments. We consider the growth potential for electronic archiving, particularly in the e-mail market, to be dynamic.

We also utilise the opportunity to implement our software products in the projects business in the Services segment, wherever interesting opportunities arise. Increasingly with relevant partners, we are tapping into market potentials in countries in which we are currently not active. We have to expect revenue and result risks if our products are not as successful in the market as considered.

11.3. Personnel risks

With their knowledge, motivation and flexibility, the highly-qualified employees contribute to the development and success of GFT. The IT industry is currently characterised by growing competition for professionals and executives, which may increase labour turnover and as a result the loss of know-how. As a measure for employee retention, we have established attractive remuneration systems and needs-based qualification and further training schemes. We thus retain knowledge holders in our company and address potential new staff and junior staff.

11.4. Technological risks

Our business activities in the Services and Software segments are subject to rapidly advancing technological development. The future market success of GFT as a leader in technology and innovation depends particularly on how successful we are at recognising technological trends early on. The Group Technology Office was assigned the bundling of these tasks and managing them Group-wide. This team observes market developments, prepares and evaluates trend analyses, and pursues research and development in those divisions that we have identified as potential growth areas.

In our company we rely on our IT systems functioning efficiently, being reliable and always available. Qualified internal experts are responsible for the service, maintenance and optimisation of our IT infrastructure. They have also established organisational and technical measures to practically rule out the unauthorised access to and loss of essential data. These measures include an extensive security concept and emergency planning, but also technical protective measures such as data backups, access protection, network monitoring, virus scanners and firewall systems.

11.5. Financial and currency risks

The financial and currency risks for the GFT Group continue to be considered to be low.

With regard to receivables, the clientele of the GFT Group consists mainly of large banks and industrial clients. For new customers, particularly in the Resourcing segment, a comprehensive credit screening accompanies the preparation of an offer. Furthermore, within the framework of internal group reporting, overdue receivables receive a thorough examination each month and corrective measures are implemented. Due to satisfactory liquidity and equity, we incurred only insignificant bank liabilities in the year 2007. Parallel to this, it proved possible to discharge

the credit line taken over in France through the acquisition of the former Parity units in the fourth quarter. In the field of investment in securities, GFT is subject to the usual market risks of interest-rate changes in the capital markets.

In addition, the currency risks of GFT will remain low, since significant amounts in foreign currency are only invoiced in the United Kingdom and Switzerland. In the case of projects that are produced and invoiced in a different currency, derivative financial instruments secure the amount required. This was not necessary in 2007.

The GFT Group has installed an active and centrally controlled treasury management, which monitors interest-rate and currency risks and, if necessary, intervenes to control them on an individual basis.

11.6. Legal risks

Our commitments to clients are regulated by contracts. We use specimen contracts that have been prepared and approved by our legal department. If the clients wish to make amendments to a contract, these need to be submitted to the legal department for review. Amendment requests are discussed and negotiated with clients when necessary. In doing so we ensure that any possible assumptions of liability associated with our activities (particularly regarding warranties) are correctly documented, and remain limited to a justifiable measure. Should contractual provisions exceed our standards or should guarantees be accepted or contractual penalties be agreed upon, for example, this shall require the additional vote and decision of the Executive Board.

11.7. Overall risk assessment

In the financial year 2007, no risks which might lead to inventory risk, or permanent or substantial impairment of the asset, financial and earnings situation of the GFT Group were identified. This assessment is based on the early-warning system for the detection of risks, implemented by the Executive Board of the GFT Group, which is constantly evolving and which will be reviewed by the auditor in accordance with the statutory requirements.

12. Post-reporting date events

Integration of the "emagine" business unit into GFT Resource Management GmbH

GFT Technologies AG integrated the "emagine" business unit into GFT Resource Management GmbH effective 1 January 2008. Active in Third Party Management, the emagine business unit takes over purchasing management for its clients with regard to non-strategic IT service providers and refers independent software developers/programmers and other smaller IT service providers. In 2007 emagine GmbH posted revenue of € 85.9m, generating € 1.2m in earnings for GFT Technologies AG. With the integration of emagine into GFT Resource Management GmbH, all Resourcing business operations in Germany are now conducted by GFT Resource Management GmbH or its subsidiaries. As of 1 January 2008, all revenue generated by GFT Technologies AG will be attributed to the Services business segment.

Sale of GFT India Ltd. shares

On 29 February 2008 GFT AG sold 70% of its shareholdings in GFT India Ltd., Trichy, India to the managing director of the company, in the interest of concentrating offshore activities in Brazil. GFT AG will continue to utilise the development centre in India, however, for the further development of internal applications and product development in the Software segment.

No other events of material importance to GFT transpired subsequent to the 31 December 2007 reporting date.

13. Opportunities and forecast

Global economic outlook

The global economy is expected to lose a degree of momentum in 2008 due to volatile financial markets, a weak dollar and high oil prices. Prominent economic analysts are forecasting slower growth in gross domestic product worldwide in 2008 than seen last year, even as global trade picks up somewhat. According to the International Monetary Fund, the effects of the mortgage and credit crisis will be increasingly felt in 2008, particularly in the US. In the Eurozone, the strong euro will play a large role in limiting and slowing economic expansion. The German economy showed continued growth going into the end of 2007, although slowing is anticipated for 2008, which is significant due to Germany being GFT's biggest market. The ifo Institute for Economic Research predicts growth will accelerate again later in the course of the year.

IT market

The market outlook for information and communications technology remains favourable. BITKOM, the German Association for Information Technology, Telecommunications and New Media, is forecasting 1.6% growth for the German market in 2008 to a size of € 145.2b, and 2% for 2009. Expectations are similar for GFT's other European markets (source: EITO).

BITKOM projects growth to be strongest for IT, in the order of 4.6%, reaching € 66.9b in sales. Within the IT sector, the outlook is best for IT services, which BITKOM sees growing 6.6% in 2008 to € 32.8b and 6.5% in 2009 to € 34.9b. Similarly, the software market is projected to grow 5.3% in 2008 to € 14.7b, maintaining the same momentum into 2009.

Near- and offshore services are a popular option for many businesses today. According to market research institute Lündenkonk, an estimated average 10% of IT service business volume is outsourced, with another 10% expected to be added on to this figure over the next three years. This trend, in combination with a growing shortage of IT personnel, bodes well for the market for placement of IT professionals.

Revenue and earnings estimates

GFT is positioned for further growth in 2008 on the heels of a successful financial year 2007. Barring a substantial deterioration in the economy, all three of our business segments should contribute positively towards growth.

In the Resourcing segment we will continue to benefit from the increasing preference in our markets for engaging freelance personnel. The Services segment, with its strong focus on the financial services sector, will be facing particular challenges in the first half of 2008 in view of the turmoil on international stock and bond markets. We are well prepared, however, to respond flexibly to changing market demands within our international softwaredevelopment capability, and see new opportunities with our financial clients being created through these changes. Our smallest business segment, Software, is now aligned for the high-growth e-mail archiving market, intensive preparatory efforts for this having gotten underway in autumn 2007.

For the financial year 2008 the GFT Group thus projects revenue ranging between € 250m and € 270m (2007: € 247.1m), rising steadily quarter by quarter. Rising revenues mean economies of scale on the cost side, boosting profitability. Additionally, a highly profitable Services project was completed at the end of 2007. The GFT Group thus estimates pretax operating profits to range between € 12.5m and € 13.5m for 2008 (2007: € 12.4m), up slightly versus the previous year.

In view of current market conditions, Services segment revenue for financial year 2008 is projected to reach the same high level attained the year prior (2007: € 100.8m). First-half revenue will likely fall just short of last year's figure due to the current slump in the bank market, in contrast to a number of highly successful projects in 2007. Our project in Brazil will be contributing less revenue and earnings in 2008 as we move out of the implementation phase. Excluding the Brazil order, Services revenue is projected to increase by 5% in 2008 versus the previous year. Our core business with large development and maintenance projects continues to grow steadily. We thus expect revenue to accelerate significantly in the second half of the year. We estimate a pretax operating margin of 8.5% (2007: 10.2%).

The Resourcing segment will be systematically pursuing growth opportunities in the IT freelancer market in 2008, and is expected to top last year's record, posting estimated revenue of € 150m (2007: € 140m). We anticipate Third Party Management revenue to fall approximately € 10m short of last year's high level due to special projects for a particular client being concluded in 2008. The more lucrative Resource Management business should however more than compensate for this deficit. Also, our UK and Switzerland business units launched last year will be generating substantial revenue for the first time in 2008. Accordingly, we estimate a pretax operating margin of 3.3% for 2008 (2007: 2.5%).

In the Software segment we will be moving into the attractive e-mail archiving market with our proven archiving solution in 2008, a market benefiting from heightened regulatory requirements. In response to the unsatisfactory results obtained in this segment in 2007 we will be rapidly and efficiently regearing for the high-growth e-mail archiving market. Expanding our national and international sales teams will give us greater market presence while

permitting the economies of scale which are necessary in this business. We estimate revenue of € 10m for this segment in financial year 2008 (2007: € 5.9m). Operating EBT is estimated at € -0.5m for 2008, due to sales and marketing expenditures (2007: € -0.6m).

The GFT Group will be actively pursuing profitable opportunities in the placement of freelance IT personnel, the outsourcing of IT projects and e-mail archiving in 2008, benefiting from a continuing favourable outlook for the IT market as we build upon the gains made in 2007. Targeted acquisitions of mid-sized firms in our growth markets are thus part of our strategy, as a means to expand our client base.

Finishing off a successful financial year 2007, the GFT Group is excellently positioned to capitalise on growth opportunities in attractive markets while expanding our business internationally. We thus are on track to reach our goal of € 350m in revenue by 2011 earlier than planned.

St. Georgen, 7 March 2008

GFT Technologies Aktiengesellschaft Executive Board

Ulrich Dietz Marika Lulay Dr. Jochen Ruetz Executive Board (Chairman) Executive Board Executive Board

73 Consolidated Financial Statements

Consolidated Financial Statements

Consolidated Balance Sheet	74
Consolidated Income Statement	76
Consolidated Cash Flow Statement	77
Consolidated Statement of Changes in Equity	78
Notes to the Consolidated Financial Statements	80
Responsibility Statement	125
Auditor's Report	126

Consolidated Balance Sheet (IFRS)

as of 31 December 2007

GFT Technologies Aktiengesellschaft, St. Georgen

Assets	Notes	31/12/2007 €	31/12/2006 €
Non-current assets

Intangible assets
Licences, industrial property rights and similar rights	(7)	873,656.13	742,751.92
Goodwill	(7)	20,365,010.57	20,365,010.57
		21,238,666.70	21,107,762.49
Tangible assets
Other equipment, office and factory equipment	(8)	2,615,952.56	2,447,985.92
Financial assets

Investments	(9)	0.00	0.00
Other assets	(12)	344,460.19	426,313.78
Current profits tax assets	(16)	750,815.88	799,500.00

Deferred tax assets	(16)	5,943,048.58	5,969,303.35
		30,892,943.91	30,750,865.54
Current assets
Inventories	(11)	9,052.66	5,125.00
Trade receivables	(11)	47,947,226.08	34,133,550.50
Securities	(13)	3,002,421.87	3,647,088.15
Current tax assets	(16)	1,146,047.05	780,365.03
Cash and cash equivalents	(13)	25,699,209.08	20,244,411.54
Other assets	(12)	3,235,047.23	2,634,043.67
		81,039,003.97	61,444,583.89









		111,931,947.88	92,195,449.43

Liabilities	Notes	31/12/2007 €	31/12/2006 €
Shareholders' equity
Equity attributable to equity holders of the parent
Share capital Conditional capital € 8.280.000,00 (prev. year: € 8.280.000,00)	(14)	26,325,946.00	26,325,946.00
Capital reserve	(14)	42,147,782.15	67,346,563.99
Retained earnings
Legal reserve	(14)	0.00	1,387.65
Other revenue reserves	(14)	2,343,349.97	2,343,349.97
Changes in equity not affecting net income
Foreign currency translations	(14)	34,331.96	42,176.11
Reserve of market assessment for securities	(14)	-196,300.00	23,437.50
Consolidated balance sheet loss	(14)	-12,925,134.60	-46,719,695.89
		57,729,975.48	49,363,165.33

Minority interests	(14)	0.00	0.00
		57,729,975.48	49,363,165.33
Liabilities
Non-current liabilities
Provisions for pensions	(15)	853,036.00	837,692.00
Other provisions	(17)	1,422,721.12	1,652,317.77
Financial liablilities	(18, 19)	0.00	150,000.00
Other liablilities	(18, 20)	2,404.22	9,616.34
Deferred tax liabilities	(16)	564,461.71	197,443.17
		2,842,623.05	2,847,069.28

Current liabilities
Other provisions	(17)	13,696,366.78	11,883,057.71
Current income tax liabilities	(16)	1,050,674.39	1,240,128.12
Financial liabilities	(18, 19)	150,000.00	2,415,840.80
Trade payables	(18)	28,915,694.45	15,593,508.15
Other liabilities	(18, 20)	7,546,613.73	8,852,680.04
		51,359,349.35	39,985,214.82

		54,201,972.40	42,832,284.10

		111,931,947.88	92,195,449.43

Consolidated Income Statement (IFRS)

for the period from 1 January to 31 December 2007 GFT Technologies Aktiengesellschaft, St. Georgen

	Notes	2007 €	2006 €

Revenue	(21)	247,067,931.06	173,677,688.18
Other operating income	(22)	2,020,751.64	2,956,765.43
Other capitalised service	(7)	124,281.51	326,781.02
		249,212,964.21	176,961,234.63
Cost of materials
a) Expenses for raw materials and supplies and for purchased goods	(23)	196,853.24	575,002.77
b) Costs of purchased services	(23)	150,019,278.28	86,704,301.60
		150,216,131.52	87,279,304.37
Personnel expenses

a) Salaries and wages	(23)	53,488,923.37	51,785,274.70
b) Social security and expenditures for retirement pensions	(15, 23)	11,038,603.23	10,150,329.47
		64,527,526.60	61,935,604.17
Depreciation on non-current intangible
assets and of tangible assets	(24)	1,415,801.31	1,163,187.28
Other operating expenses	(25)	21,235,909.39	20,160,309.03
Result from operating activities		11,817,595.39	6,422,829.78
Other interest and similar income	(27)	811,171.30	632,954.64
Depreciation on financial assets and on securities	(13, 24)	135,000.00	276,100.00
Interest and similar expenses	(27)	131,412.48	115,080.11
Financial result		544,758.82	241,774.53
Earnings before taxes		12,362,354.21	6,664,604.31

Taxes on income and earnings	(16)	3,767,962.41	1,555,256.81
Net income		8,594,391.80	5,109,347.50
– attributable to minority interest	(14)	0.00	0.00
– attributable to equity holders of the parent (consolidated net income)	(14)	8,594,391.80	5,109,347.50
Loss carried forward from previous year		-46,719,695.89	-51,829,043.39
Allocated from capital reserve		25,198,781.84	0.00
Allocated from retained earnings – thereof from the statutory reserve		1,387.65	0.00

Consolidated balance sheet loss		-12,925,134.60	-46,719,695.89

Net earnings per share - undiluted	(29)	0.33	0.19
Net earnings per share - diluted	(29)	0.33	0.19

Consolidated Cash Flow Statement (IFRS)

for the period from 1 January to 31 December 2007 GFT Technologies Aktiengesellschaft, St. Georgen

	2007 €	2006 €

Net income	8,594,391.80	5,109,347.50
Depreciation on non-current intangible and tangible assets as well as financial assets	1,415,801.31	1,163,187.28
Changes in provisions	1,599,056.42	-2,027,654.47
Other non-cash expenses/income	135,000.00	215,978.72
Profit/loss from the disposal of long-term tangible and intangible assets as well as financial assets	36,839.64	24,219.30
Changes in trade receivables	-13,813,675.58	-1,990,291.92
Changes in other assets	-813,820.76	-1,060,922.09
Changes in trade liabilities and other liabilities	12,186,472.68	67,423.54
Cash flow from operating activities	9,340,065.51	1,501,287.86

Cash receipts fom sales of tangible assets	6,182.36	54,653.15
Cash payments to acquire tangible assets	-1,276,426.31	-941,395.27
Cash receipts from sales of non-current intangible assets	0.00	0.00
Cash payments to acquire non-current intangible assets	-481,267.85	-625,511.62
Sale of consolidated companies net of cash and cash equivalents disposed of	0.00	-139,835.75
Acquisitions of consolidated companies net of purchased cash and cash equivalents	0.00	-6,018,984.81
Cash receipts for the short-term financial management of cash investments	3,786,823.79	9,470,076.13
Cash receipts for the short-term financial management of cash disposals	-3,510,957.51	-5,397,259.60
Cash flow from investing activities	-1,475,645.52	-3,598,257.77

Cash receipts from issuing bonds/loans	0.00	1,915,903.17
Cash payments for repayments of bonds/loans	-2,415,840.80	-23,305.90
Other changes in equity and minority interest	6,218.35	-203,278.33
Cash flow from financing activities	-2,409,622.45	1,689,318.94
Change in cash funds from cash-relevant transactions	5,454,797.54	-407,650.97
Cash funds at the beginning of the period	20,244,411.54	20,652,062.51
Cash funds at the end of the period	25,699,209.08	20,244,411.54

Consolidated Statement of Changes in Equity (IFRS)

as of 31 December 2007

GFT Technologies Aktiengesellschaft, St. Georgen

			Retained earnings
Subscribed capital €	Capital reserve €	Legal reserve €	Other revenue reserves €
26,325,946.00	67,346,563.99	1,387.65	2,343,349.97








26,325,946.00	67,346,563.99	1,387.65	2,343,349.97








	-25,198,781.84

		-1,387.65
26,325,946.00	42,147,782.15	0.00	2,343,349.97

					Changes in equity not affecting results
Total share capital €	Minority interests €	Equity attributable to equity holders of the parent €	Consolidated balance sheet loss €	Market assessment for securities €	Foreign currency translations €
44,457,096.16	0.00	44,457,096.16	-51,829,043.39	181,250.00	87,641.94
-6,000.00		-6,000.00		-6,000.00
-246,500.00		-246,500.00		-246,500.00
-45,465.83		-45,465.83			-45,465.83
94,687.50		94,687.50		94,687.50
-203,278.33	0.00	-203,278.33	0.00	-157,812.50	-45,465.83
5,109,347.50	0.00	5,109,347.50	5,109,347.50
4,906,069.17	0.00	4,906,069.17	5,109,347.50	-157,812.50	-45,465.83
49,363,165.33	0.00	49,363,165.33	-46,719,695.89	23,437.50	42,176.11

-233,800.00		-233,800.00		-233,800.00
0.00		0.00
-7,844.15		-7,844.15			-7,844.15
14,062.50		14,062.50		14,062.50
-227,581.65	0.00	-227,581.65	0.00	-219,737.50	-7,844.15
8,594,391.80	0.00	8,594,391.80	8,594,391.80
8,366,810.15	0.00	8,366,810.15	8,594,391.80	-219,737.50	-7,844.15
0.00	0.00	0.00	25,198,781.84
0.00	0.00	0.00	1,387.65
57,729,975.48	0.00	57,729,975.48	-12,925,134.60	-196,300.00	34,331.96

as of 31 December 2007 GFT Technologies Aktiengesellschaft, St. Georgen

General data and methods

1. General information

The Consolidated Financial Statements of the GFT Technologies Aktiengesellschaft (GFT AG) as of 31 December 2007 have been drawn up using Article 315a of the German Commercial Code, in accordance with the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) London, as they are to be applied in the EU, as well as the interpretations of the International Financial Reporting Interpretations Committee (IFRIC). The Consolidated Financial Statements of GFT Technologies AG as of 31 December 2007 is consistent with IFRS which has to be applied within the EU and has become effective until the closing date.

The Consolidated Financial Statements have been drawn up in €. As far as amounts are rounded to thousand Euros (€(k)) or million Euros (€m), this is noted. The income statement was prepared pursuant to the total cost method. The Consolidated Financial Statements were approved by the Executive Board on 7 March 2007, and released for publication by the Supervisory Board on 25 March 2007.

GFT is an international provider of innovative IT solutions, active in the Services, Resourcing, and Software divisions (see Segment report). GFT AG is registered in Germany in the legal form of a public limited company with headquarters at Leopoldstr. 1, 78112 St. Georgen. GFT AG is the ultimate parent company of the GFT Group.

2. Effects of new or changed standards

Accounting standards applied for the first time in the fiscal year 2007

In IFRS 7 "Financial Instruments: Disclosures" the notes to be complied with for financial instruments, which were dealt with in IAS 32 up to now, and the disclosure obligations arising from IAS 30, which previously only had to be complied with by banks and similar financial institutions, are combined and extended; they have to be applied henceforth regardless of the industry. With the publication of IFRS 7, IAS 1 has been extended to include disclosure obligations for capital management. The first application of IFRS 7 – apart from the extension of the disclosures in the notes to the consolidated financial statements – has no effect on the GFT Consolidated Financial Statements.

IFRIC 10 "Interim Financial Reporting and Impairment" deals with the relationship between the regulations of IAS 34 on interim financial reporting and the rules of IAS 36 and IAS 39 on reversal of an impairment loss in the case of specific assets. The interpretation makes it clear that impairment losses on goodwill or on specific equity instruments recorded in interim financial reports must not be reversed. The first application of IFRIC 10 has no effect on the GFT Consolidated Financial Statements.

IFRIC 7 "Applying the reinstatement approach under IAS 29 Financial reporting in hyper-inflationary economies", IFRIC 8 "Scope of IFRS 2" and IFRIC 9 "Reassessment of embedded derivates" did not have any practical relevance to GFT and therefore had no effect on the GFT Consolidated Financial Statements.

Newly issued, but not yet applied accounting standards

The table below shows which new or amended standards or interpretations issued by the IASB have not yet been applied by GFT in the fiscal year 2007.

	Standard Interpretation	Applicable to fiscal years from	Planned first appli cation at GFT from

IFRS 2	Share-based payment 1, 3	1 January 2009	1 January 2009
IFRS 3	Business combinations 3, 4	1 July 2009	1 January 2010
IFRS 8	Operating segments 2	1 January 2009	1 January 2009
IAS 1	Presentation of the financial statements 1, 3	1 January 2009	1 January 2009
IAS 23	Borrowing costs 1, 3	1 January 2009	1 January 2009
IAS 27	Consolidated and separate financial statements as per IFRS 3, 4	1 July 2009	1 January 2010
IAS 32	Financial instruments: Presentation 2, 3	1 January 2009	1 January 2009
IFRIC 11	IFRS 2 – Group and treasury share transactions 1	1 March 2007	1 January 2008
IFRIC 12	Service concession arrangements 1, 3, 5	1 January 2008	1 January 2008
IFRIC 13	Customer loyalty programmes 1, 3	1 July 2008	1 January 2009
IFRIC 14	The limit on a defined benefit asset 1, 3, 5	1 January 2008	1 January 2008

1 No notable effects are expected on the consolidated financial statements of GFT AG.

2 Mainly additional/modified notes to the consolidated financial statements of GFT AG are expected.

3 Announcement of the IASB/IFRIC has not been accepted by the EU.

4 Effect on the consolidated financial statements of GFT AG still has to be ascertained.

5 Subject to still outstanding endorsement by the EU.

3. Consolidated group

In the Consolidated Financial Statements as of 31 December 2007 in addition to GFT Technologies AG the following subsidiaries were also included (fully consolidated):

GFT Technologies (Schweiz) AG, Wallisellen, Switzerland
GFT Solutions GmbH (from 1 February 2008 GFT inboxx GmbH), Hamburg, Germany
GFT Technologies GmbH, Vienna, Austria
GFT UK Limited, London, UK
GFT Iberia Solutions, S.A., Sant Cugat del Vallés, Spain
emagine gmbh, Eschborn, Germany
GFT Technologies (India) Private Limited, Trichy, India
Emagine Servicios de Consultoría e Informática, S.A., Sant Cugat del Vallés, Spain
GFT Brazil Consultoria Informática Ltda., São Paulo, Brazil.
GFT Resource Management GmbH, Eschborn, Germany
GFT Flexwork GmbH, Berlin, Germany
GFT Technologies SARL, Paris, France
GFT Business Development GmbH, Eschborn, Germany.

As of 31 January 2006 the GFT AG acquired all shares in a business of the following companies:

1. GFT Technologies SARL, Paris, France
1. GFT Resource Management GmbH, Eschborn, Germany
Including its subsidiaries
GFT Flexwork GmbH, Berlin, Germany
Parity Eurosoft GmbH, Frankfurt am Main, and
Parity Business Solutions GmbH, Frankfurt am Main, Germany
all five companies together are called "Parity companies".

The above-mentioned companies were included in the Consolidated Financial Statements for the first time as of the acquisition date on 31 January 2006. Thus, they are included in the income statement and the cash flow statement of the fiscal year 2007 for twelve months, whereas they were only included in the fiscal year 2006 for eleven months. In this respect, comparability is impaired. Their contribution to the revenue of the GFT Group in the fiscal year 2007 amounted to € 53.7m (in the fiscal year 2006 € 40.1m), with a contribution to the net profit for the year of € 2.2m (in 2006 € 0.7m). Parity Eurosoft GmbH and Parity Business Solutions GmbH were merged with GFT Resource Management GmbH (assuming legal entity) as of the merger cut-off date of 1 January 2006.

The fact that GFT Business Development GmbH, Eschborn, which was acquired on 10 February 2006 and was included in the Consolidated Financial Statements at that time, is included in the income statement and cash flow statement of the fiscal year 2007 and the fiscal year 2006 over differing time periods, does not impair the comparability of the two periods of time, as this company has not been engaged in any operative activity since its acquisition.

All shares in the subsidiary, GFT Websolutions Kft., Budapest, Hungary, were sold by GFT AG on 29 December 2006. GFT Websolutions Kft. was excluded from the scope of consolidation as of 29 December 2006. The share of GFT Websolutions Kft. in the Group's revenues amounted to 0.6% in financial year 2005 and 0.2% in financial year 2006; at the time it was excluded from the consolidation the share in the Group's assets was 0.3%. The sale of GFT Websolutions Kft. has had no significant impact on the Group's asset, financial and earnings position and has no impact on the comparability of 2006 and 2007; expenses related to the sale totalled €(k) -115.

4. Consolidation methods

Assets and liabilities of domestic and foreign companies included in the Consolidated Financial Statements are stated in accordance with uniformly applicable accounting and valuation methods.

Capital was consolidated through application of the purchase method by offsetting the investment book values with the revalued equity of the subsidiaries at the time of acquisition. In this process, assets, debts and possible liabilities are stated at their current value. Remaining differences are reported as goodwill. The hidden reserves and encumbrances disclosed are amortised on the basis of the corresponding assets and debts. The stock market price on the day of transfer, or a minimum price contractually guaranteed to the purchaser, was the basis for the historical costs of shares in subsidiaries purchased through surrender of GFT shares.

The write-ups or depreciation on equity interests in group companies shown in individual financial statements have been cancelled again in the Consolidated Financial Statements.

Group-internal gains and losses, revenue, expenses, and income, as well as receivables and liabilities existing between consolidated companies are eliminated. Particularly assets included in assets and inventories from group-internal deliveries and services are adjusted by inter-company profits.

Income tax effects have been taken into consideration and deferred taxes are reported in the consolidation processes.

The Consolidated Financial Statements include businesses of those companies in which GFT AG holds the majority of voting rights either directly or indirectly (subsidiaries), or due to its economic authority arising from the activity of the affected companies, can take a majority of the economic impact, or must carry a majority of the risk, usually due to an equity holding in excess of 50%. Inclusion starts at the moment the possibility of dominance exists. It ends when the possibility of dominance no longer exists.

Those investments though, in which GFT AG exerts a significant influence – usually due to an equity holding ranging between 20 and 50 percent – are valued in accordance with the equity method. For investments valued in accordance with the equity method, historical costs are increased or reduced annually by the amount of respective equity changes in the GFT stake. For first-time inclusion of investments in accordance with the equity method, differences from first-time consolidation are treated in accordance with the principles of full consolidation. Currently GFT does not hold any investment that must be valued in accordance with the equity method.

The balance sheet dates of companies included in the Consolidated Financial Statements correspond to the date of the Consolidated Financial Statements (31 December).

5. Currency translation

In the individual financial statements of the consolidated companies foreign currency transactions are translated at the rates valid at the time of the business transaction. In the balance sheet, monetary items in foreign currency are translated at the closing rate at year end, and the foreign exchange gains and losses are recognised in a manner that affects earnings.

The Annual Financial Statements of foreign Group companies are translated into € as stipulated in IAS 21, in accordance with the functional currency concept. Currently this is the respective national currency for all subsidiaries, as these companies operate their business in a manner that is financially, economically, and organisationally autonomous. Thus assets and liabilities are translated at the rate prevailing on the balance sheet date, expenses and earnings are translated at the annual average rate. Differences are shown separately in equity as "Deferred items for currency translation". If Group companies leave the consolidated group, the applicable currency translation difference is liquidated affecting net income.

6. Essential accounting and valuation methods

Intangible assets and impairment test

Intangible assets acquired for a consideration are activated at historical costs and – with the exception of goodwill and intangible assets with indeterminate useful life – are subject to depreciation on a straight-line basis over their economic useful life. This particularly involves software that is depreciated over three years; the depreciations start at the purchase date. Impairments are taken into consideration through non-scheduled depreciation. If the reasons for unscheduled depreciation drop out, appropriate attributions are written down that should not exceed the amortised historical cost.

There are intangible assets with no indeterminate useful life within the GFT Group.

Goodwill, including goodwill from the capital consolidation, is no longer subject to scheduled depreciation. In accordance with IFRS 3 and the thereby revised standards IAS 36 and IAS 38, goodwill is audited annually for possible impairment. If events or changed circumstances indicating a possible impairment occur, the impairment test has to be performed more frequently.

As part of the impairment test of assets in the GFT Group, the residual book values of individual cash-generating units with their respective recoverable amount, i.e. the higher value from fair value less costs to sell, and its value in use, are compared. In accordance with the definition of a cash-generating unit, the strategic divisions of the GFT Group are always used as cash-generating units.

If the book value of the cash-generating unit is higher than its recoverable amount, there is an impairment loss in the amount of the difference. In the first step, goodwill of the affected strategic unit thus determined is written off the amount of the impairments and recognised as expense. A possible remaining residual amount is distributed over the other assets of the respective strategic business unit proportionally to book value. Value adjustments are shown in the income statement under depreciation.

The cash value of future payments is used as the basis to determine the achievable amount, due to continuous use of the strategic unit and whose disposal is expected at the end of its useful life. The payment forecast is based on the current plans of the GFT Group. The capitalisation rate is determined as a pretax rate, with consideration of a risk component.

Research and development costs, internally produced intangible assets

Research costs are registered as an expense when they are accrued. Development costs for software products are capitalised as intangible assets provided the capitalisation requirements under IAS 38 are satisfied, particularly provided if an economic benefit for the GFT Group is expected to be generated by the intangible asset. If the requirements for capitalisation are not met, development expenditures are registered in the period they are incurred in. The acquisition or production costs of an internally produced intangible asset include all costs that can be directly allocated to the development process and an appropriate share of development-related overhead costs. Financing costs are not capitalised. Depreciation is charged over three years from the time of completion on a straight-line basis.

Tangible assets

Tangible assets are stated at historical costs, reduced by scheduled use-related depreciation and non-scheduled depreciation. Schedule depreciation is executed linearly over the useful life, from three to thirteen years. Repairs and maintenance costs are recognised as expense when they are incurred. Retroactive historical or production costs are activated if there is future economic benefit through the costs associated with the tangible asset.

Non-scheduled depreciation on intangible assets is executed in accordance with IAS 36 if the recoverable amount of the respective asset has dropped below the book value. The recoverable amount is the higher value from value in use and fair value, minus selling costs. If the reasons for non-scheduled depreciation discontinue, appropriate write-ups are undertaken. See the information on intangible assets and impairment test above for the impairment test procedure.

If tangible assets (or long-term immaterial assets) are leased, and if the economic ownership remains with the respective Group company (finance lease), such assets are activated at the beginning of the leasing relationship at fair value, or with the lower cash value of the minimum leasing rate in accordance with IAS 17, and depreciated according to their useful life; the respective payment liabilities from future leasing rates are recorded as liabilities. If economic ownership remains with the lessor, the leasing rates are recognised linearly as expense over the term of the leasing relationship (operating lease).

Inventories and work in progress

In accordance with IAS 2 assets that are held for sale in the course of normal business are shown under inventories (goods). The goods are valued at historical costs, or lower net realisable value, on the balance sheet date.

Work in progress is treated in accordance with IAS 18 or IAS 11 based on a percentage of completion that has been realised and the associated contract costs. Profit is thus realised in accordance with the services provided as of the balance sheet date; in this process the percentage of completion is determined for projects on the basis of employee/ subcontractor project time. Project losses are recognised immediately as expense.

Financial instruments

A financial instrument is a contract that simultaneously leads to the creation of a financial asset at one company and to a financial liability or an equity instrument at another company. Financial instruments recorded as financial assets or financial liabilities are always listed separately. Financial instruments are recorded as soon as GFT becomes the contracting party of the financial instrument. Financial instruments are initially recognised at fair value. Transaction costs directly attributable to the acquisition or the issue are included when determining the asset value if the financial instruments are not measured at fair value through profit or loss. For the follow-up valuation the financial instruments are assigned to one of the valuation categories listed in IAS 39.

Financial assets

Financial assets especially include trade receivables, cash and cash equivalents, other receivables and existing loans, securities, specific financial investments and derivative financial assets with positive fair values. Normal purchases and sales of financial assets are shown in the balance sheet on the settlement date.

– Financial assets measured at fair value through profit or loss

comprise the financial assets held for trading purposes, including derivates, unless they have been designated as hedging instruments and are effective as such. Certain securities existing at the time, which were classified as at fair value through profit or loss in the course of the initial application of the revised IAS 39 in 2005, also fall into this category. Amendments to the fair value of financial assets in this category are recorded as recognised in profit or loss at the time of the increase in value or impairment.

– Loans and receivables

are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are valued at the amortised cost using the effective interest method. The trade receivables, the financial receivables shown in the other assets and cash and cash equivalents are assigned to this valuation category. Profits and losses are recorded in the consolidated profit or loss if the loans and receivables are written off or depreciated. The interest effects from applying the effective interest method are also recorded as being recognised in profit or loss.

– Available-for-sale financial assets

comprise those non-derivative financial assets which have not been assigned to one of the aforementioned categories. These are in particular equity (investment) measured at fair value, and liabilities (securities) not held to maturity. After the initial valuation available-for-sale financial assets are measured at fair value, with the non-realised profits or losses recognised directly in equity in the market assessment reserve. If there are actual references to impairment, or if amendments to the fair value of a loan capital instrument result from currency fluctuations, these are recognised in profit or loss. When financial assets are retired, the cumulative profits or losses recognised in equity from the valuation are recorded at fair value through profit and loss. If the fair value of unquoted equity instruments cannot be determined with sufficient reliability, the shares are valued at amortised cost (if applicable, minus impairment). Interest received is recognised in profit or loss as interest income using the effective interest method. Dividends are recognised in profit or loss when the legal claim to payment arises.

Financial assets are written off if the contractual rights to payments from the financial assets no longer exist or the financial assets are transferred with all the material risks and opportunities.

Impairment of financial assets

The carrying amounts of financial assets which are not measured at fair value through profit or loss are examined on each balance sheet date, to establish whether actual references (such as considerable financial difficulties on the part of the debtor, increased risk of insolvency on the part of the debtor, breach of contract, significant changes in the technological, economic and legal environment and the market environment of the debtor) indicate an impairment. In the case of equity instruments, a sustained or significant reduction in the fair value is an actual reference to a potential impairment. GFT carries out an individual assessment of the impairment requirement on a case-by-case basis.

– Loans and receivables

The size of the impairments in the case of loans and receivables is the difference between the carrying amount of the assets and the present value of the expected future cash flow (with the exception of future loan defaults not yet suffered) discounting the original effective interest rate of the financial asset. The impairment is recognised in profit or loss. If the impairment sum falls in one of the following audit periods, and this reduction can be actually attributed to a situation occurring after the recognition of the impairment, the previously recognised impairment is reversed through profit or loss. The impairments of loans and receivables (e.g. trade receivables) are mainly recognised in value adjustment accounts. The decision regarding whether a credit risk will be taken into account by means of a value adjustment account or via a direct reduction in the receivable depends on the estimated level of bad debt probability. If receivables are classified as irrecoverable, the corresponding impaired asset is written off.

– Available-for-sale financial assets

If an available-for-sale asset is impaired in its value, an amount previously recognised only directly in equity is recognised in the income statement as the sum of the difference between the costs of purchase (minus any repayments or amortisation) and the current fair value, minus any valuation allowances for this financial asset already previously recognised in profit or loss. Reversal of an impairment loss in the case of equity instruments which are classified as available for sale is recognised directly in equity. Reversal of an impairment loss in the case of loan capital instruments is recognised in profit or loss if the increase in the fair value of the instrument can actually be attributed to an occurrence that took place after the impairment was recognised in profit or loss.

Financial liabilities

Financial liabilities include in particular trade payables, liabilities to banks or other lenders, specific other liabilities and derivative financial liabilities with negative fair values.

– Financial liabilities which are valued at amortised cost After the initial recognition, the financial liabilities are valued using the effective interest method at amortised cost.

– Financial liabilities which are measured at fair value through profit or loss

Financial liabilities which are measured at fair value through profit or loss comprise financial liabilities held for trading purposes. Derivates are classified as being held for trading purposes unless they have been included in hedge accounting as hedging instruments and are effective as such. Profits or losses from financial liabilities which are held for trading purposes are recognised in profit or loss.

Financial liabilities are written off if the contractual liabilities have been paid, cancelled or have expired.

Derivative financial instruments and hedge accounting

Derivative financial instruments such as futures trading, swaps, options, interest rate futures trading may be used to hedge risks. Derivative financial instruments are shown at their fair value when initially recognised and on each following balance sheet date. Derivatives are reported as an asset if their fair value is positive and as a liability if their fair value is negative.

If the guidelines of IAS 39 for hedge accounting have been met, GFT designates and documents the hedging relationship from this point in time, either as a fair value hedge or a cash flow hedge. In the case of a fair value hedge, the fair value of a recognised asset or liability or an unrecognised firm commitment is hedged. In the case of a cash flow hedge, payable or receivable fluctuating cash flows in connection with a recognised asset or a recognised liability or highly probable

future cash flows are hedged. The documentation of the hedging relationship contains the targets and strategy of the risk management, the type of hedging relationship, the hedged risk, the name of the hedging instrument and the basic transaction, as well as a description of the efficacy measurement method.

Changes in the fair value of derivates are regularly included in the earnings or in equity as part of the reserves, depending on whether the hedging relationships are fair value hedges or cash flow hedges. In the case of fair value hedges, the changes in the market value of derivative financial instruments and the relevant basic transactions are recognised in profit or loss. The changes in the fair value of derivative financial instruments which are attributed to a cash flow hedge are initially recognised directly in equity in the reserves to the sum of the hedge-effective portion after tax. The hedge-ineffective portions of the changes in fair value are recorded directly in earnings. The transfer to the income statement coincides with the effect on net income of the hedged basic transactions.

If derivative financial instruments are not included, or are no longer included in hedge accounting because the conditions for hedge accounting have not been or are no longer met, they are classified as being held for trading purposes.

Other receivables and liabilities as well as borrowing costs

Deferments, prepayments, as well as non-financial assets and liabilities are stated with the amortised historical costs. They are liquidated linearly or according to the provision of service.

Borrowing costs are recorded as an expense in the period in which they occur without consideration of the use of the borrowed capital.

Provisions

Provisions for employee benefits are made according to IAS 19. The actuarial valuation of pension provisions is based on the projected unit credit method prescribed in IAS 19. In addition to pensions and acquired entitlements known at the balance sheet date, expected future increases in salaries and pensions are also considered.

Provisions are formed in accordance with IAS 37 if, relative to third parties, a present liability exists from a past event that in the future probably results in an outflow of resources, and its amount can be reliably estimated. Other provisions are valued in accordance with IAS 37, possibly also in accordance with IAS 19, using the best possible estimate of the expenses that would be required to discharge the present liability as of the balance sheet date. If outflows of funds for a liability are only anticipated after more than one year, then the provisions are stated with the cash value of the foreseeable outflow of funds. Provisions are not offset with retrospective claims.

Revenue and profit realisation

Revenues from sales of goods are realised if the goods have been delivered and the risk has been transferred to the client.

Revenues from production contracts and services are realised in accordance with IAS 11 and IAS 18, based on the percentage of completion of the business on the balance sheet date, employing the percentage of completion method. Earnings are captured if the amount of revenue can be reliably estimated, if it is sufficiently probable that the economic benefit will accrue to the GFT Group, if the percentage of completion can be reliably determined on the balance sheet date, and if the costs incurred for the business, as well as the costs that can be anticipated until it is fully completed, can be reliably determined. Profit realisation from interest, user fees, rents, income under license agreements, and equivalent items is limited to the period; dividend earnings are realised with creation of legal title.

Income tax

Actual income tax is determined in accordance with the tax law of the countries in which the respective company is active.

Calculation of deferred income tax in accordance with IAS 12 includes tax deferrals and accruals of assets and liabilities on different valuations of assets and liabilities in the balance of trade (IFRS), on consolidation processes and on realisable taxable loss carry-forwards. Deferred tax assets for deductible temporary differences, and for taxable loss carry-forwards that exceed the taxable temporary differences are only shown in the extent to which it can be assumed with adequate probability that the respective company will earn sufficient taxable income to realise the respective benefit. Deferred tax assets and deferred tax liabilities are shown separately in the balance sheet. Deferred taxes are valued at the tax rates that are valid on the balance sheet date or that will legally come into force in the future.

Due to the changes of tax law in 2007 (Corporate Tax Reform 2008) the tax rate for the German affiliate companies have changed since 1 January 2008. For calculating the deferred income taxes as of 31 December 2007, individual tax rates are applied, taking into consideration the corporate income tax and trade income tax, which will end up between 28.0% and 32.0% (previous year: between 37.5% and 40.3%).

Management estimates and judgements

In drawing up the Consolidated Financial Statements, assumptions and estimates must be made to a certain extent that affect the amount and the presentation of reported assets and liabilities, earnings and expenses, as well as possible liabilities for the reporting period. The estimates and judgement essentially are based on assessment of the intrinsic value of intangible assets, determination of economic useful life for fixed assets, the percentage of completion of customer projects in progress, the collectibility of receivables, accounting and valuation of provisions, and the usability of taxable loss carry-forwards that have resulted in the statement of deferred taxes. Estimates and judgements are made on the basis of the most current information available. Due to developments that deviate from or that are beyond Management's sphere of influence, actual amounts can vary from the originally expected estimated values. If actual development deviates from expected development then the premises, and if necessary the book values, of the assets and liabilities concerned are adjusted accordingly. At the time the Consolidated Financial Statements were drawn up there were no significant risks underlying the estimates and judgements, so that from the present perspective there is no reason to assume a significant adjustment to book values of assets and debts shown in the Consolidated Financial Statements in the following financial year.

Consolidated Fixed Assets

GFT Technologies Aktiengesellschaft, St. Georgen

		Acquisition or production costs
	As of 01/01/2007 €	Additions Transfers T €	Disposals Transfers T €	As of 31/12/2007 €
Intangible assets
Other intangible assets	5,336,692.95	356,986.34 82,371.13 T	14,339.57	5,761,710.85
Development costs for self-developed software	326,781.02	124,281.51	0.00	451,062.53
Licenses, industrial property rights and similar rights	5,663,473.97	481,267.85 82,371.13 T	14,339.57	6,212,773.38
Goodwill	20,365,010.57	0.00	0.00	20,365,010.57
	26,028,484.54	481,267.85 82,371.13 T	14,339.57	26,577,783.95
Tangible assets
Other equipment, office and factory equipment	13,359,444.87	1,276,426.31	567,560.39 82,371.13 T	13,985,939.66
Financial assets
Investments	1,209,503.00	0.00	0.00	1,209,503.00

	40,597,432.41	1,757,694.16 82,371.13 T	581,899.96 82,371.13 T	41,773,226.61

	Depreciation
As of As of 31/12/2007 01/01/2007 € €	Depreciation of the financial year Disposals Transfers T Transfers €	As of T 31/12/2007 € €	As of 31/12/2007 €	As of 31/12/2006 €

5,761,710.85 4,920,722.05	292,372.31 14,339.57 65,184.93 T	5,263,939.72	497,771.13	415,970.90
451,062.53 0.00	75,177.53	0.00 75,177.53	375,885.00	326,781.02
6,212,773.38 4,920,722.05	367,549.84 14,339.57 65,184.93 T	5,339,117.25	873,656.13	742,751.92
20,365,010.57 0.00	0.00	0.00 0.00	20,365,010.57	20,365,010.57
26,577,783.95 4,920,722.05	367,549.84 14,339.57 65,184.93 T	5,339,117.25	21,238,666.70	21,107,762.49

13,985,939.66 10,911,458.95	1,048,251.47 524,538.39 65,184.93 T	11,369,987.10	2,615,952.56	2,447,985.92

1,209,503.00 1,209,503.00	0.00	0.00 1,209,503.00	0.00	0.00

41,773,226.61 17,041,684.00	1,415,801.31 538,877.96 65,184.93 T 65,184.93 T	17,918,607.35	23,854,619.26	23,555,748.41

Explanations of the Consolidated Income Statement

7. Intangible assets, goodwill

The development of intangible assets, including goodwill, of the GFT Group is presented on pages 90 to 91.

Since 1 January 2005 goodwill is no longer subject to scheduled amortisation, but it is tested once a year for impairment in accordance with IAS 36. The impairment test of goodwill was performed on the basis of the future anticipated cash flow as derived from planning. Planning is based on the approved budget for the upcoming 2008 financial year, which has been carried forward with defined growth rates for the subsequent two years. Third-year values have then been considered as constant for the extended future. Cash flow has been discounted with a uniform discount rate of 10% (prev. year: 9%) before taxes. The recoverable amount of the cash-generating units has thus been determined as value in use.

For the cash flow forecasts for the cash-generating unit "Services – Finance & Insurance", the management assumes that the existing client business with the Deutsche Bank will continue on a sustainable high level, that the existing business with the Deutsche Post will appreciably rise in the following year due to an acquired major project and the further growth will be mainly driven by business from new clients. For the payment generating segment Resourcing the management assumes a positive development with the existing clients and continuous growth with new clients. Our assumptions are based on experience, as well as on the signals received from the markets.

The book value of overall goodwill is assigned to the cash-generating units as follows:

	31/12/2007 €(k)	31/12/2006 €(k)

Cash-generating units
Services – Finance & Insurance	14,336	14,336
Services – Postal, Logistics & Others	–	–
Resourcing	6,029	6,029
Software	–	–
	20,365	20,365

Due to the results of the impairment test in financial year 2007 (as in the previous year) non-scheduled amortisation of goodwill was not undertaken.

Changes in goodwill reported during the financial year are as follows:

	2007 €(k)	2006 €(k)
Book value = Gross amount on 1 Jan 2006	20,365	15,348
Additions due to mergers Parity companies 31 Jan 2006	–	5,014
Addition due to merger GFT Business Development GmbH 10 Feburary 2006	–	3
Book value = Gross amount on 31 December	20,365	20,365

Intangible assets reported under licences, industrial property rights and similar rights relate to software acquired for consideration (€(k) 498; prev. year €(k) 416), as well as capitalised development costs for internally generated software developed in-house (€(k) 376; prev. year €(k) 327). Intangible assets with indeterminate useful life do not exist in the GFT Group.

8. Tangible assets

The development of tangible assets of the GFT Group is presented on pages 90 to 91.

Non-scheduled depreciation on property, plant and equipment due to impairment was not necessary in the fiscal year 2007, as in the prior year.

As of 29 February 2008 non-current assets (property, plant and equipment and intangible assets) in India were sold. These non-current assets had a carrying value of EUR 63,000 as of 31 December 2007, belonged to Segment Services and were disposed of in connection with the deconsolidation of GFT Technologies (India) Private Limited, Trichy, India, as of 29 February 2008.

9. Financial assets

The investments shown as financial assets are the investments in Thinkmap, Inc., New York, USA (5.5%; prev. year: 5.5%), as well as in incowia GmbH (formerly GFT Systems GmbH), Ilmenau (10.0%; prev. year: 10.0%).The investment in Thinkmap, Inc. was already written down to zero in 2002 and the investment in incowia GmbH written down to zero in 2004.

10. Investment holdings

As of 31 December 2007 GFT AG holds direct and indirect shares of at least 20% in the following companies:

Name	Location	Share of the capital		Equity 31/12/2007		Results for the business year
Direct investment
GFT Technologies (Schweiz) AG	Wallisellen, Switzerland	99.0%	CHF	151,506.56	CHF	10,233.52
GFT Solutions GmbH (as of 1 February 2008 GFT inboxx GmbH)	Hamburg, Germany	100%	EUR	7,169.07	EUR	-549,394.87
GFT Technologies GmbH	Vienna, Austria	100%	EUR	-118,218.00	EUR	6,136.13
GFT UK Limited	London, UK	100%	EUR	1,921,170.15	EUR	1,263,192.28
GFT Iberia Solutions, S.A.	Sant Cugat del Vallés, Spain	100%	EUR	8,211,610.77	EUR	5,053,119.71
emagine gmbh	Eschborn, Germany	100%	EUR	34,810.30	EUR	2,239.62
GFT Technologies (India) Private Limited	Trichy, India	100%	INR	19,648,362.50	INR	-7,254,979.50
GFT Resource Management GmbH	Eschborn, Germany	100%	EUR	1,778,996.03	EUR	0.00 *
GFT Technologies SARL	Paris, France	100%	EUR	1,211,300.99	EUR	319,429.96
GFT Business Development GmbH	Eschborn, Germany	100%	EUR	17,139.79	EUR	-772.60
Indirect investment
Emagine Servicios de Consultoría e Informática, S.A.	Sant Cugat del Vallés, Spain	100%	EUR	2,427,402.70	EUR	688,315.88
GFT Brazil Consultoria Informática Ltda.	São Paulo, Brazil	100%	BRL	-47,706.74	BRL	105,966.69
GFT Flexwork GmbH	Berlin, Germany	100%	EUR	375,000.00	EUR	0.00 **

* There is an agreement for the shifting of profits between the GFT Resource Management GmbH (profit shifting company) and GFT AG.

** There is an agreement for the shifting of profits between the GFT Flexwork GmbH (profit shifting company) and the GFT Resource Management GmbH.

GFT Resource Management GmbH, Eschborn and GFT Flexwork GmbH, Berlin utilised exemptions from section 264 (3) of the German Commercial Code (HGB) in the fiscal year 2007.

11. Inventories and trade receivables

As in the previous year, the inventories shown involve goods (hardware and software) that are scheduled for sale as within the framework of projects.

The trade receivables result from on-going business and are all due in the short term, as in the previous year. Required individual value adjustments based on the probable risk of default are taken into account with €(k) 862 (prev. year: €(k) 693). Trade receivables, in accordance with IAS 11, include realised revenue from unfinished projects as of the balance sheet date to the amount of €(k) 9,319 (prev. year: €(k) 7,402) minus prepayments received to the amount of €(k) 5,022 (prev. year: €(k) 1,034).

The cumulative value adjustments on trade receivables developed as follows:

	2007 €(k)	2006 €(k)

As of 1 January	693	940
Transfers	206	192
Drawings	-25	-417
Write-backs	-12	-22
Exchange-rate effects and other changes	0	0
As of 31 December	862	693

12. Other assets

Other assets can be broken down as follows:

	31/12/2007 €(k)	31/12/2006 €(k)

Non-current assets
Deposits	344	426

Other current assets
Claims for VAT and other tax refunds	1,470	1,555
Accruals	397	289
Claim from retained guarantees	733	238
Deferred interest	137	180
Deposits	132	138
Creditors with debit balance	30	64
Receivables from employees	162	14
Claims for reimbursements of rental overpayments	98	–
Balance of purchase price from sale of GFT Websolutions ft., Budapest	–	110
Other	76	46
	3,235	2,634
Total other assets	3,579	3,060

13. Securities as well as cash and cash equivalents

As of 31 December 2007, GFT Group securities are used for contingency capital insurance and interest rate optimisation and consist of fixed and variable interest rate debt instruments. They are broken down as follows:

	31/12/2007 €(k)	31/12/2006 €(k)
Category in accordance with IAS 39
Financial assets at fair value through profit and loss	1,048	3,460
Financial assets available for sale	1,954	187
	3,002	3,647

The rating of the securities "measured at fair value through profit or loss" led to expenses in the income statement of €(k) 135 (prev. year: €(k) 276) in the fiscal year 2007. In addition, a profit of €(k) 3 (prev. year: €(k) 37) and a loss of €(k) 288 (prev. year: €(k) 1) was realised from the sale of securities in the category "measured at fair value through profit or loss" in the fiscal year 2007.

In the fiscal year 2007, newly acquired securities were qualified as securities "available for sale". The amendment of the fair value of the securities "available for sale" led to a reduction in the "reserve for the market valuation of securities" in equity of €(k) 234 (prev. year: €(k) 6). The "reserve for the market valuation of securities" amounted to €(k) -196 minus deferred taxes of €(k)– (prev. year: €(k) 37 minus deferred taxes of €(k) 14) as of 31 December 2007. Profits previously recognised in equity of €(k) – (prev. year: €(k) 247) were recognised in the income for the period by selling securities "available for sale" in the fiscal year 2007.

Cash and cash equivalents include cash (€(k) 6; prev. year: €(k) 4) and short-term liquid credit at banks (€(k) 25,693; prev. year: €(k) 20,240).

14. Shareholders'equity

Please refer to the separately presented statement of changes in equity for the equity development during the financial years 2007 and 2006.

As of 31 December 2007 share capital to the amount of € 26,325,946.00 consisted of 26,325,946 no-par bearer shares (unchanged from 31 December 2006) which all grant equal rights.

The capital reserve includes the amount that was obtained in the issue of shares over the calculated value. The accumulated profit reserves are amounts that were formed from results in previous financial years.

The changes in equity not affecting results include income and expenses from currency translation (IAS 21) and from the valuation of securities that are classified as financial assets available for sale (IAS 39).

The capital management of the Group concerns Group equity, whose structure and possible uses are largely determined by the capital structure of GFT AG. In order to have more flexibility in the future, € 25.2m was removed from the capital reserve as of 31 December 2007 and the statutory reserve of €(k) 1 was utilised in full in favour of retained earnings. GFT is not subject to any external minimum capital requirements.

Authorised capital

In accordance with the resolution passed by the Annual General Meeting of 23 May 2006, the Executive Board is authorised to increase the share capital on or before 22 May 2011, with the consent of the Supervisory Board, through the issuance of new bearer shares against contributions in cash or in kind up to a total of € 10,000,000.00 on one or more occasions (Authorised Capital). The Executive Board is authorised to exclude shareholders' subscription rights with the consent of the Supervisory Board in the following cases:

To waive subscription rights for fractional amounts;
For capital increases against contributions in kind in order to grant shares for the purpose of acquiring companies or holdings in companies;
In the event of a capital increase against cash contributions, provided that the issue price of the new shares is not significantly lower than the stock exchange price and provided that the proportionate amount of share capital attributable to the new shares for which subscription rights are excluded, does not exceed ten percent of share capital, either at the time at which this authorisation becomes effective or at the time at which it is exercised;
In the event of a capital increase for the issue of employee shares, provided that the proportionate amount of share capital attributable to the new shares, for which subscription rights are excluded, does not exceed ten percent of share capital, either at the time at which this authorisation becomes effective or at the time at which it is exercised.

The Executive Board is authorised to establish additional details for the execution of a capital increase from authorised capital with the consent of the Supervisory Board.

Therewith, unutilised, authorised capital to the amount of €10,000,000.00 (prev. year: €10,000,000.00) exists as of 31 December 2007.

Conditional capital

Conditional capital amounted to € 8,280,000.00 as of 31 December 2007 (prev. year: € 8,280,000.00).

Share capital is conditionally increased up to a nominal € 780,000.00, divided in up to 780,000 individual bearer share certificates made out to the owners (Conditional capital I/1999). This conditional capital increase serves the granting of subscription rights to members of the Executive Board and company employees, as well as to members of the executive management and employees of affiliated companies, in accordance with the resolution of the Annual General Meeting of 4 June 1999.The conditional capital increase will only be executed to the extent that holders of subscription rights utilise these rights. New shares participate in profits from the beginning of the financial year in which the exercise of subscription rights has taken place. The Executive Board is authorised to establish details on the execution of the conditional capital increase, as well as to define subscription rights with the consent of the Supervisory Board, provided this is in accordance with the resolution of the Annual General Meeting of 4 June 1999.

By resolution of the Annual General Meeting of 22 May 2007 the authority of the Annual General Meeting of 29 May 2002 to issue convertible and/or option bonds and the existing conditional capital pursuant to section 4 (6) lit. b of the Articles of Association (Conditional capital II/2002) was rescinded. New conditional capital II/2007 was created as follows: Pursuant to the resolution of the Annual General Meeting of 22 May 2007 the share capital is to be conditionally increased by € 7.5m. by issuing up to 7,500,000 new individual bearer shares (Conditional capital II/2007). The conditional capital increase will only be carried out to the extent that

the owners or creditors of conversions rights or bonds that are appended to the convertible or option bonds to be issued by the company or by its majority holding companies by 21 May 2012 under the Annual General Meeting resolution of 22 May 2007 exercise their conversion or option rights or
the holders or creditors of convertible bonds to be issued by the company or by its majority holding companies by 21 May 2012 under the Annual General Meeting resolution of 22 May 2007 with an obligation to exercise their right of conversion actually discharge said obligation.

By resolution of the Annual General Meeting on 22 May 2007, the Executive Board was authorised, given Supervisory Board approval, to issue on a one-off basis or on multiple occasions up until 21 May 2012 bearer or registered convertible and/or option bonds ("bonds") with a total nominal value of up to € 100m with a maximum term of 15 years and to grant the owners or creditors of bonds, option or conversion rights in the company with a pro rata share in the share capital of up to € 7.5m in close accordance with the terms and conditions governing convertible or option bonds. The bonds may also be issued by direct or indirect majority holding companies of the company. In this case the Executive Board is authorised, given Supervisory Board approval, to accept a guarantee for the issuing majority holding company for the repayment of the bond and to grant holders of such option or conversion bonds in GFT Technologies AG in order to satisfy the rights conceded with these bonds. In certain cases, the Executive Board shall be authorised, given Supervisory Board approval, to exclude the subscription right of the shareholders to the bonds with option or conversion rights in GFT Technologies AG.

Stock option programmes

The purchasing rights stemming from the stock option programmes "1999/2004" and "2000/2005" established by the Executive Board expired on 6 July 2004 and 1 July 2005, respectively, without having been exercised. No more purchasing rights have existed since 1 July 2005 pursuant to section 192 (2) No. 3 of the German Stock Corporation Act.

Minority interests

There have been no more other associates since August 2004.

15. Provisions for pensions

Employee benefits are provided through contribution-oriented and performance-oriented plans.

For contribution-oriented plans contributions are paid by the company based on legal or contractual regulations, or on a voluntary basis, to state or private pension insurance institutes. The contributions paid in the financial year 2007 for contribution-oriented plans to state and private pension insurance institutes was €(k) 5,685 (prev. year: €(k) 5,425) and are included in personnel expenses.

The performance-oriented plans involve actual liabilities in Germany due to individual arrangements relative to retirement benefits, invalidity benefits, and provisions for dependents for an active manager and a manager who has left the company, as well as for a former Managing Director of a subsidiary (pension recipient).

	31/12/2007	31/12/2006

Discount rate	5.5%	4.5%
Expected return on plan assets	1.0%	1.0%
Expected salary increase	0.0%–2.5%	0.0%–2.5%
Average fluctuation	0.0%	0.0%

The following parameters were taken into consideration for determining the actuarial value of the provisions for pensions.

Assumptions relative to average fluctuation were not necessary due to the small number of people involved. The "2005 Guideline Tables" by Prof. Klaus Heubeck (Cologne 2005) were used as a basis for the computation.

	2007 €(k)	2006 €(k)
Change in present value of defined benefits
Present value of defined benefits 01/01	865	917
Service cost for the period	15	16
Interest expense	38	36
Actuarial gains (-)/losses (+)	-119	-66
Pension payments	-38	-38
Defined benefits present value 31/12	761	865

Fair value of plan assets 31/12 to be enclosed	–	–
Net amount recognised	761	865
Adjustment due to non-realised actuarial gains (-) / losses (+)	92	-27
Pension provisions	853	838

Actuarial gains and losses (i.e. effects of deviations between previous actuarial assumptions and actual development, and of changes in actuarial assumptions) are distributed applying the so-called corridor approach as expense or income on the expected average service lifetime of the employees participating in the plan, if they exceed 10% of the cash value of the performance-oriented liability.

Pension expenses are broken down as follows for the fiscal year:

	2007 €(k)	2006 €(k)

Service cost for the period	15	16
Interest expense	38	36
Amortisation on actuarial gains (-)/losses (+)	–	3
Pension expenses	53	55

The pension expenses are included in personnel expenses.

16. Income tax

The item income tax shown in the income statement includes:

	2007 €(k)	2007 €(k)

Current tax expense	3,361	2,074
Deferred tax income	407	-519
Tax expense	3,768	1,555

Actual tax expense reported of €(k) 3,361 (prev. year: €(k) 2,074) is reduced by tax proceeds arising from activation of a claim for payment of a corporate tax credit in accordance with section 37 of the German Corporate Tax Act for consolidated companies to the amount of €(k) 53 (prev. year: €(k) 800). Due to the use of previously non-deferred taxable loss carry-forwards (€(k) 1,002; prev. year: €(k) 1,576) actual tax expense was reduced by €(k) 367 (prev. year €(k) 593). The actual tax expense includes out-of-period actual tax proceeds of €(k) 5 (prev. year €(k) 2).

The deferred income taxes were due to the following causes:

	2007 €(k)	2007 €(k)

From temporary differences	407	-519
From taxable loss carry-forwards	–	–
Deferred tax income	407	-519

The deferred tax earnings include a deferred tax expense due to devaluations of deferred tax assets of €(k) 155, whereas in the previous year deferred tax expense from depreciations of deferred tax assets of €(k) 5 occured. From assets credited directly from the equity, differed taxes of €(k) -14 (prev. year: €(k) 95) resulted which could not be booked affecting net income.

Due to the changes in tax rates, the deferred tax expense rose by €(k) 1,329 (prev. year: €(k) –). The deferred tax expense is reduced by the subsequent use of deferred tax assets on tax loss carry-forward by (€(k) 1,266; prev. year:€(k)–) and temporary differences (€(k) 28; prev. year: €(k)–).

The trade tax liabilities shown in the balance sheet are broken down as follows:

	31/12/2007 €(k)	31/12/2006 €(k)
Claims to deferred tax assets	5,943	5,969
Ongoing claim to income tax (Assets from corporate tax according to section 37 KStG)	751	800
Short-term assets from profits tax	1,146	780
	7,840	7,549

100

	31/12/2007 €(k)	31/12/2006 €(k)

Deferred tax liabilities	564	197
Current tax liabilities	1,051	1,240
	1,615	1,437

The tax deferrals and accruals are allocated to individual balance sheet items as follows:

	31/12/2007 €(k)	31/12/2006 €(k)

Taxable loss carry-forwards	5,000	5,000
Anniversary and other provisions for employees	397	354
Intangible assets and equipment	364	391
Other provisions	126	170
Provisions for pensions	28	30
Other assets	13	12
Provisions for possible losses (prim. rental agreements)	13	7
Liabilities	2	5
Claims to deferred tax assets	5,943	5,969

	31/12/2007 €(k)	31/12/2006 €(k)
Receivables	556	170
Securities	8	13
Holdings	0	14
Deferred tax liabilities	564	197

For cumulated taxable loss carry-forwards at Group companies of € 15.6m. (prev. year: € 18.4m.) and for deductible temporary differences of € 0.2m. (prev. year: € 1.3m.) no deferred tax assets were formed, as we cannot currently consider a future offset; the loss carry-forwards are not non-forfeitable. The deferred tax asset for the carry forward of unused tax losses as of 31 December 2007 exclusively affects GFT Technologies AG (€(k) 5,000 (prev. year: €(k) 5,000). After GFT AG was able to use tax loss carry-forwards of € 0.8m. for the third consecutive year in the financial year 2007 (prev. year € 0.9m.) the Executive Board assumes, based on profitability planning, that in the future sufficient taxable results will be available for GFT AG against which the unused tax losses can be applied.

The adjustment between the effective tax rate of the GFT Group and the German tax rate of GFT AG of 37.5% (prev. year: 37.5%) is presented as follows; the applicable tax rate of GFT AG changed slightly due to changed trade tax rates of assessment.

	2007 €(k)	2006 €(k)
Earnings before taxes	12,362	6,664
Expected tax expenses of 37.5%	4,636	2,499
Addition (prev. year capitalisation) of assets for payment of corporate tax according to section 37 KStG	-53	-800
Passivation of the liability from subsequent taxation of EK 02 balance	7	–
Other non-tax-deductible expenses and tax-free income	88	302
Value adjustments/non-entry deferred tax assets	0	85
Current financial year losses which cannot be offset by tax assets	505	175
Appreciation/retrospective application of deferred tax assets	-2,051	-593
Tax rate differences and changes of tax rates	634	-108
Aperiodic effects	-5	3
Other tax effects	7	-8
Effective tax expense	3,768	1,555
Effective tax rate	30.5%	23.3%

17. Other provisions

The other provisions show the following trend in the financial year 2007:

	As of 01/01/2007 €(k)	Consumption Liquidation (L) €(k)	Transfer €(k)	As of 31/12/2007 €(k)
Employee commissions/bonuses/anniversaries/sever ance payments Indemnifications	7,680	5,342 374 (L)	6,601	8,565
Holiday obligations	1,475	1,399	1,362	1,438
Contributions to industry associations	111	100 11 (L)	74	74
Provisions for personnel costs	9,266	6,841 385 (L)	8,037	10,077
Outstanding purchase invoices	1,712	1,243 63 (L)	2,680	3,086
Possible losses from rental agreements	704	545 84 (L)	–	75
Possible losses from projects	398	154 196 (L)	309	357
Warranty	91	91	102	102
Other	1,364	576 441 (L)	1,075	1,422
	13,535	9,450 1,169 (L)	12,203	15,119

Due to maturity i.e. the expected settlement date of resulting outflows of economic benefit, other provisions are shown in the balance sheet as follows:

	31/12/2007 €(k)	31/12/2006 €(k)
Other long-term provisions
Provisions for employees/jubilees/compensation/exemption salaries	1,375	1,522
Impending loss from rental agreements	32	114
Others	16	16
	1,423	1,652
Other short-term provisions	13,696	11,883
Total other provisions	15,119	13,535

In 2007 interest-bearing long-term other provisions increased by €(k) 7 (prev. year: €(k) 28) due to the elapsed time.

18. Liabilities

The remaining terms and collaterisation of the liabilities are shown in the following overview:

		Remaining term	Total amount	Thereof secured through liens and similar rights	Nature and form of the collateral
	up to 1 year €	more than 5 years €	31/12/2007 €	€
Financial liabilities	150,000.00 (prev. yr.: €(k) 2,416)	0.00 (prev. yr.: €(k)–)	150,000.00 (prev. yr.: €(k) 2,566)	0.00 (prev. yr.: €(k) 2,416)	prev. yr.: Release of covenant
Trade liabilities	28,915,694.45 (prev. yr.: €(k) 15,594)	0.00 (prev. yr.: €(k)–)	28,915,694.45 (prev. yr.: €(k) 15,594)		Usual reser vation of property rights
Deferred tax liabilities	0.00 (prev. yr.: €(k)–)	0.00 (prev. yr.: €(k)–)	564,461.71 (prev. yr.: €(k) 197)
Current income tax liabilities	1,050,674.39 (prev. yr.: €(k) 1,240)	0.00 (prev. yr.: €(k)–)	1,050,674.39 (prev. yr.: €(k) 1,240)
Other liabilities	7,546,613.73 (prev. yr.: €(k) 8,853)	0.00 (prev. yr.: €(k)–)	7,549,017.95 (prev. yr.: €(k) 8,862))
- thereof from taxes (not income tax)	2,180,794.87 (prev. yr.: €(k)2,295)
- thereof within the scope of social security	945,547.71 (prev. yr.: €(k) 808)
	37,662,982.57 (prev. yr.: €(k) 28,102)	0.00 (prev. yr.: €(k)–)	38,229,848.50 (prev. yr.: €(k) 28,459)

There are trade liabilities of €(k) 141 (prev. year: €(k) 34) to companies with whom an equity interest exists.

19. Financial liabilities

	31/12/2007 €(k)	31/12/2006 €(k)
Non-current financial liabilities
Loan from a fund for the promotion of research	–	150

Current financial liabilities
Loan from a fund for the promotion of research	150	–
Short-term liabilities on a factoring company	–	2,416
Total financial liabilities	150	2,566

Financial liabilities to the amount of €(k) – are secured (in the previous year by the assignment of claims €(k) 2,416).

20. Other liabilities

Other liabilities are broken down as follows:

	31/12/2007 €(k)	31/12/2006 €(k)

Other long-term liabilities
Advance payments on orders	2	10

Other current liabilities
Wage tax, VAT, and other tax liabilities	2,916	4,783
Deferred credits to income	2,181	2,295
Advance payments on orders	946	808
Liabilities from social security contributions	987	415
Liabilities to employees	220	142
Debtors with credit balances	46	58
Handicapped levy	27	28
Deferred grants received	7	7
Other	217	316
	7,547	8,852
Total other liabilities	7,549	8,862

21. Segment report

In these statements the business segments Services, Software and Resourcing are defined as primary segment report format. All activities in conjunction with IT solutions (services and projects) are summarised in the Services segment. The Software segment involves in-house software product development, its sale, as well as the associated services. Resourcing includes the provision of freelance IT specialists. The segment report is shown in the table below.

	Services		Software
	31/12/2007	31/12/2006	31/12/2007	31/12/2006
	€(k)	€(k)	€(k)	€(k)
Revenues
External sales	100,819	82,354	5,887	7,083
Inter-segment sales	432	50	28	55
Total revenues	101,251	82,404	5,915	7,138

Result
Segment result	10,250	7,485	-600	-544

Unallocated income/expenses
Operating result
Interest expenses
Interest income
Share of net profits of associated companies
Earnings before tax
Income tax expense
Net income
Other information
Segment assets	43,058	39,135	1,820	1,331
Investment in associates reported according to the equity method
Unallocated corporate assets
Consolidated total assets

Segment liabilities	22,105	21,496	1,639	2,684
Unallocated corporate liabilities
Consolidated total liabilities
Capital expenditure	1,330	1,009	207	384
Depreciation	1,079	872	180	121
Non-cash expenditure other than depreciation	–	–	–	–

Resourcing		Total		Eliminations		Consolidated
31/12/2007 €(k)	31/12/2006 €(k)	31/12/2007 €(k)	31/12/2006 €(k)	31/12/2007 €(k)	31/12/2006 €(k)	31/12/2007 €(k)	31/12/2006 €(k)

140,362	84,241	247,068	173,678
3,163	286	3,623	391	-3,623	-391
143,525	84,527	250,691	174,069	-3,623	-391	247,068	173,678


3,490	1,286	13,140	8,227			13,140	8,227
						-1,458	-2,080
						11,682	6,147
						-131	-115
						811	633
						–
						12,362	6,665
						-3,768	-1,556
						8,594	5,109

56,098	40,465	100,976	80,931			100,976	80,931
						–	–
				10,956	11,264	10,956	11,264
						111,932	92,195

28,270	16,813	52,014	40,993			52,014	40,993 1,839
				2,188	1,839	2,188 54,202	42,832

162	5,195	1,699	6,588	59	33	1,758	6,621
111	146	1,370	1,139	46	24	1,416	1,163
–	–	–	–	135	276	135	276

The Parity companies are included in the Resourcing segment for twelve months in the fiscal year 2007 and for eleven months in the fiscal year 2006 (see Point 3 above). The investments listed for the Resourcing segment in 2006 of € 5.2m refer to the sum of € 5.0m to the addition of the goodwill from the business combination of the Parity companies; please refer to Point 7 (Intangible assets, Goodwill).

In addition to the segment data on business areas aligned to the corporate structure the following table shows the regional data in accordance with IAS 14 (secondary segment information).

in €m	to external clients *	Revenue from sales	Carrying amount of segment asset		Investments equipment and intangible assets
	2007	2006	2007	2006	2007	2006

Germany	170.4	109.0	82.0	64.0	0.8	5.5
UK	24.2	15.0	8.3	5.6	0.3	0.0
Spain	15.5	13.7	13.8	15.4	0.5	0.5
Brazil	11.9	11.6	0.4	0.2	0.1	0.2
France	13.4	10.9	5.6	5.5	0.0	0.3
Switzerland	4.7	4.3	1.5	1.1	0.0	0.0
Other foreign countries	7.0	9.2	0.3	0.4	0.1	0.1
	247.1	173.7	111.9	92.2	1.8	6.6

* Determined by client location

Segment revenues and segment results include transactions between business segments (primary reporting format) and regions (secondary reporting format) as well. Transactions between segments are undertaken at market prices under terms that would customarily be agreed with third parties. These intra-group transactions are eliminated in the consolidation.

22. Other operating income

These items include:

	2007 €(k)	2006 €(k)

Reversals of provisions	1,169	860
Benefits in kind – employee private motor vehicle use	319	332
Out of period income	132	253
Income from exchange rate differences	112	26
Income from derecognition of liabilities	100	335
Rental income	76	76
Income from decrease of value adjustments and from deferred receivables	15	22
Cost transfers corresponding with the acquisition of GFT Resource Management GmbH, Eschborn	11	208
Grants from private and public organisations	7	7
Insurance recoveries	4	9
Income from the disposal of fixed assets	4	2
Income from disposals and write-ups of securities	3	675
Earnings from selling GFT Websolutions Kft., Budapest, Hungary	–	60
Other	69	92
	2,021	2,957

The grants of private and public institutions in 2007 are grants from local promotional organisations in Spain (previous year from local development funds in Austria and Spain). If they were granted as a percentage of incurred expenses then they are shown in the periods of the corresponding expense as income. If grants were received for activated investments then they are taken over the useful life of the investment in a manner that affects earnings.

The other operating income includes income that is ascribed to another financial year to the amount of €(k) 1,420 (prev. year: €(k) 1,472). They involve liquidation of provisions (€(k) 1,169; prev. year: €(k) 860), reduction of value adjustments and incoming payments on written-off receivables (€(k) 100; prev. year: €(k) 335), other out-of-period income (€(k) 132; prev. year: €(k) 253), depreciation of adjustments and receipts from written-off receivables (€(k) 15; prev. year: €(k) 22) and profits from sales of non-current assets (€(k) 4; prev. year: €(k) 2).

23. Material expenses, personnel expenses

In addition to expenses for software and hardware resold as part of projects (€(k) 197; prev. year: €(k) 575), in the material expenses the vast majority of expenses for services rendered by outside personnel (consultants, software developers) and subcontractors are also included (€(k) 150,019; prev. year: €(k) 86,704); this also includes expenses for freelance agency revenue.

Personnel expenses include expenses for GFT Group's own personnel. For the expenses for retirement pensions we refer to point 15.

24. Depreciation

The depreciation on long-term intangible assets and fixed assets in the financial year 2007 include no depreciation on goodwill due to depreciations (previous year: €(k) –).

The asset amortisations on securities affects losses from changes of the time value of securities to be included. (€(k) 135; previous year €(k) 276), see point 13.

25. Other operating expenses

Other operating expenses are broken down as follows:

	2007 €(k)	2006 €(k)

Operating expenses	6,049	5,968
Distribution expenses	7,093	6,950
Administrative expenses	6,561	5,348
Value adjustments and uncollectable receivables	574	192
Losses from disposal of securities	288	1
Project losses, contract penalties, warranties	287	386
Exchange rate losses	106	60
Out of period expenses	41	89
Losses from disposal of fixed assets	41	26
Reserve allocations for other risks	–	525
Expenses due to rented space standing empty	–	196
Expenditure from the disposal of "GFT Media"	–	192
Of GFT Websolutions Kft., Budapest, Hungary	–	175
Other operating expenses	196	52
	21,236	20,160

Other operating expenses including other out-of-period operating expenses to the amount of €(k) 82 (prev. year: €(k) 307) were incurred. Last year's out-of-period operating expenses include an amount of €(k) 192 from the sale of the GFT Media division, which occurred in the financial year 2005, since the buyer did not achieve specified revenue targets.

26. Research and development expenses

In the financial year 2007 total expenses of €(k) 3,637 were recorded for research and development (prev. year: €(k) 3,892). The Group is reporting only expenses from the development of new technologies in this item.

27. Interest income, interest expenses

The interest result:

	2007 €(k)	2006 €(k)
Other interest and similar income
Interest from securities	226	319
Interest on bank balances	491	168
Interest on tax receivables	–	31
Other unearned interests (basically from clients' requirements)	94	115
	811	633
Interest and similar expenses
Interest on financial liabilities	-131	-115
	-131	-115
Interest result	680	518

Other Data

28. Cash flow statement

The GFT Group cash flow statement for the financial year 2007 is shown separately. The additional information as per IAS 7 is indicated as follows:

The financial fund on which the cash flow statement is based, is comprised of payment means and items equivalent to payment means (cash and bank balances); it matches the balance sheet items of the same name. €(k) 250 (prev. year: €(k) 565) of cash and cash equivalents is restricted, since balances at banks of this amount are being used as collateral at the respective banks.

The cash flow from taxes on income for the financial year 2007 amounts to €(k) -3,905 (net pay-out; prev. year: €(k) -2,732); like the cash flow resulting from interest, it is included in the cash flow from ongoing business activities. Interest paid during the 2007 financial year totals €(k)131 (prev. year: €(k) 115), deposits from interest income total €(k) 901 (prev. year: €(k) 717).

29. Net earnings per share

The earnings per share as per IAS 33 for the GFT Group are shown in the following table.

	2007 €	2006 €

Undiluted earnings per share as per IAS 33	0.33	0.19
– Current result allowed for	8,594,391.80	5,109,347.50
– Number of ordinary shares allowed for	26,325,946	26,325,946

Diluted earnings per share as per IAS 33	0.33	0.19
– Current result allowed for	8,594,391.80	5,109,347.50
– Number of ordinary shares allowed for	26,325,946	26,325,946

After the completion of the most recently arranged GFT AG share-option programme on 1 July 2005, no diluted potential ordinary shares could be produced.

30. Reporting on financial instruments

Information on financial instruments according to categories

The table on page 110 shows the carrying amounts and the fair value of the individual financial assets and liabilities for each individual category of financial instruments and transfers them to the corresponding balance sheet items. As the balance sheet positions contain other assets and other liabilities of both financial instruments and non-financial assets/ non-financial liabilities (e.g. sales tax receivables, wage tax liabilities or received prepayments), the column "non-financial assets/liabilities" is used for this transfer.

The fair value of a financial instrument is the price at which a party would take on the rights and/or obligations of this financial instrument from an independent, contractually willing other party.

In the case of financial instruments to be accounted for at fair value, the fair value is determined on the basis of market prices. If no market prices are available, a valuation is carried out using typical valuation methods based on instrumentspecific market parameters.

The fair value of loans and receivables and of original liabilities is determined as the present value of future cash inflows or outflows, discounted at a current interest rate on the balance sheet date taking into account the respective due date of the asset items or the residual term of the liability. Should a market value or market price be available, this is fixed as the fair value. Owing to the mainly short maturity term of trade payables and receivables, other receivables and liabilities and cash and cash equivalents, the carrying amounts on the balance sheet date do not vary significantly from the fair value.

Financial assets which GFT has made available as security for liabilities exist in the form of securities with a carrying amount of €(k) 250 (pev. year: €(k) 250), which have been pledged to the entitled parties up to a security amount of €(k) 250 (prev. year: €(k) 250) to safeguard an existing pension commitment. Of the cash and cash equivalents, €(k) 250 (prev. year: €(k) 565) was pledged to the respective bank for security purposes.

Income, expenses, profits and losses from financial instruments

The following table shows the net profits (+) or losses (-) from financial instruments:

	2007 €(k)	2006 €(k)
Net profits/losses from financial assets measured at fair value through profit or loss (from those which were classified as such when the revised IAS 39 was first applied in 2005)	-237	68
Net profits/losses from financial liabilities measured at fair value through profit or loss (from derivatives without balance sheet hedging relationship held for trading purposes)	18	-26
Net profits/losses from available-for-sale financial assets:	–	638
– Profit/loss which was directly recognised in equity (market assessment reserve)	-234	-6
– Amount which was transferred from equity (market assessment reserve) to the income statement	–	247

Net profits/losses from loans and receivables:	-374	-345
– Expenses from impairment	-206	-192
– Income from reversal of an impairment loss	12	22
– Write-offs	-180	-175

Net profits/losses from financial liabilities which are valued as amortised cost:	100	335
– Write-offs	100	335

The net profits or losses from financial assets and liabilities measured at fair value through profit or loss also include interest expenses and income from these financial instruments in addition to earnings from changes in market value.

The net profits or losses from available-for-sale financial assets comprise the effects on net income due to disposals, impairment or reversal of an impairment loss recognised in profit or loss of the securities and investments classified as available for sale.

The net profits or losses arising from loans and receivables, and from financial liabilities which are valued at amortised cost, mainly contain earnings from impairment, reversal of an impairment loss and write-offs, which are shown in other operating income or expenses.

Information on financial instruments according to categories

GFT Technologies Aktiengesellschaft, St. Georgen

31 December 2007
	Valued at amortised costs		Valued at fair value		Non financial assets/ liabilities	Carrying amount in the balance sheet
in €(k)	Carrying amount	Fair value	Carrying amount	Fair value	Carrying amount
Financial assets
Investments			0	0		0
Financial assets available for sale			0	0		0
Trade receivables	47,947	47,947				47,947
Receivables from goods and services rendered	43,650	43,650				43,650
Loans and receivables	43,650	43,650				43,650
Amounts due from customers for construction work	4,297	4,297				4,297
Loans and receivables	4,297	4,297				4,297
Securities			3,002	3,002		3,002
Financial assets available for sale			1,954	1,954		1,954
Financial assets measured at fair value through profit or loss (classified as such upon initial application of the revised IAS 39)			1,048	1,048		1,048
Cash and cash equivalents	25,699	25,699				25,699
Loans and receivables (par value)	25,699	25,699				25,699
Other assets	1,713	1,713			1,866	3,579
Loans and receivables	1,713	1,713				1,713
Sum of financial assets	75,359	75,359	3,002	3,002
Loans and receivables	75,359	75,359	0	0
Financial assets available for sale	0	0	1,954	1,954
Financial assets measured at fair value through profit or loss	0	0	1,048	1,048
Financial liabilities
Financial liabilities	150	150				150
Financial liabilities valued at amortised cost	150	150				150
Trade liabilities	28,916	28,916				28,916
Financial liabilities valued at amortised cost	28,916	28,916				28,916
Other liabilities	483	483			7,066	7,549
Financial liabilities valued at amortised cost	483	483				483
Other provisions			48	48	15,071	15,119
Financial liabilities measured at fair value through profit or loss (derivatives without balance sheet hedging relationship held for trading purposes)			48	48		48
Sum of financial liabilities	29,549	29,549	48	48
Financial liabilities valued at amortised cost	29,549	29,549	0	0
Financial liabilities measured at fair value through profit or loss	0	0	48	48

31 December 2006

	Valued at amortised costs			Valued at fair value		Carrying amount in the balance sheet
in €(k)	Carrying amount	Fair value	Carrying amount	Fair value	Carrying amount
Financial assets
Investments			0	0		0
Financial assets available for sale			0	0		0
Trade receivables	34,134	34,134				34,134
Receivables from goods and services rendered	27,766	27,766				27,766
Loans and receivables	27,766	27,766				27,766
Amounts due from customers for construction work	6,368	6,368				6,368
Loans and receivables	6,368	6,368				6,368
Securities			3,647	3,647		3,647
Financial assets available for sale			187	187		187
Financial assets measured at fair value through profit or loss (classified as such upon initial application of the revised IAS 39)			3,460	3,460		3,460
Cash and cash equivalents	20,244	20,244				20,244
Loans and receivables (par value)	20,244	20,244				20,244
Other assets	1,217	1,217			1,843	3,060
Loans and receivables	1,217	1,217				1,217
Sum of financial assets	55,595	55,595	3,647	3,647
Loans and receivables	55,595	55,595	0	0
Financial assets available for sale	0	0	187	187
Financial assets measured at fair value through profit or loss	0	0	3,460	3,460
Financial liabilities
Financial liabilities	2,566	2,566				2,566
Financial liabilities valued at amortised cost	2,566	2,566				2,566
Trade liabilities	15,594	15,594				15,594
Financial liabilities valued at amortised cost	15,594	15,594				15,594
Other liabilities	516	516			8,346	8,862
Financial liabilities valued at amortised cost	516	516				516
Other provisions			66	66	13,469	13,535
Financial liabilities measured at fair value through profit or loss (derivatives without balance sheet hedging relationship held for trading purposes)			66	66		66
Sum of financial liabilities	18,676	18,676	66	66
Financial liabilities valued at amortised cost	18,676	18,676	0	0
Financial liabilities measured at fair value through profit or loss	0	0	66	66

The total interest income and expenses for financial assets and financial liabilities which are not classified as measured at fair value through profit or loss are as follows:

	2007 €(k)	2006 €(k)
Total interest income	628	294
Total interest expenses	131	115

For a statement of impairment loss on trade receivables please refer to "The development of valuation allowance" in Point 11. In the case of other assets, impairment losses of €(k) 98 recognised in profit and loss (prev. year: €(k) 175) were accrued. In the reporting period, impairment on investments and securities in the "available-for-sale" category of €(k) – (prev. year: €(k) –) was recognised in profit or loss.

Hedge accounting

As of 31 December 2007, as on the cut-off date in the prior year, no derivates existed that were part of a hedge relationship within the meaning of IAS 39. Derivates which are used in the GFT Group according to interest, currency and pride hedging operating criteria but do not meet the strict criteria of IAS 39, are assigned to the "measured at fair value through profit or loss" category. As of 31 December 2007 one such derivate (the same interest swap) existed, as on the cut-off date in the prior year, whereby the profit from the change in the fair value is recognised in the income for the period; in addition, the operational hedging purpose no longer applied in 2006 due to the disposal of the underlying security.

The total sum of the change in the fair value of financial instruments estimated with the aid of a valuation technique, which was recognised in profit or loss in the reporting period, amounted to €(k) 18 (prev. year: €(k) -26).

General information on risks arising from financial instruments

GFT is exposed to various risks in connection with financial instruments, which are detailed below: The risk report within the combined Management Report and Consolidated Management Report (Point 11.5) also contains statements on the risks arising from financial instruments, which we hereby refer to.

GFT has issued internal guidelines which concern risk-controlling processes and thus contain a clear separation of functions with regard to the operative financial activities, their handling, bookkeeping and the controlling of the financial instruments. The guidelines which form the basis for the Group's risk-management processes are aimed at identifying and analysing the risks on a Group-wide basis. In addition, they are aimed at the appropriate limitation and control of risks and their supervision.

Credit risk

The credit risk is the risk of a financial loss arising because a contracting party fails to meet its contractual payment obligations. The credit risk includes both the direct credit risk and the risk of deterioration in creditworthiness.

The liquid funds are mainly composed of cash and cash equivalents and short-term realisable securities. The Group is exposed to losses from credit risks in connection with the investment of cash and cash equivalents if banks and issuers of securities do not meet their obligations. When investing cash and cash equivalents, the banks and issuers of securities are selected with care. The maximum risk exposure from cash and cash equivalents corresponds to the carrying amounts of these assets.

The trade receivables result from sales activities of the Group. The credit risk includes the credit risk of customers; customer receivables are not hedged as a rule. GFT controls credit risks from trade receivables on the basis of internal guidelines. In order to safeguard against credit risk, creditworthiness checks are carried out by counterparties. Processes also exist for regular monitoring, especially of default-endangered receivables. Valuation allowances are carried out for the risk inherent in trade receivables if required. The maximum risk exposure from trade receivables corresponds to the carrying amount of these receivables. The carrying amounts of trade receivables with a separate disclosure of overdue and valueadjusted receivables are comprised as follows:

	31/12/2007 €m	31/12/2006 €m

Neither overdue nor value-adjusted receivables Overdue receivables which have not been value adjusted	44.3	30.6
Less than 90 days	2.3	2.2
90 to 180 days	0.2	0.5
180 to 360 days	0.1	0.0
More than 360 days	0.0	0.0
Value-adjusted receivables	1.0	0.8
Carrying amount	47.9	34.1

The maximum credit risk exposure of the financial assets shown in Other Assets corresponds to the carrying amount of these instruments; GFT is only exposed to a minimal credit risk from Other Assets. There are no overdue, but not valueadjusted other financial assets.

Risk concentrations arose in the area of credit risk as follows:

	Trade receivables 31/12/2007 €m	Trade receivables n 31/12/2006 €m

Carrying amount	47.9	34.1
Concentration according to customers:
Receivables from 5 biggest customers	31.1	24.3
Receivables from rest of customers	16.8	9.8
Concentration according to regions:*
Germany	28.0	19.0
Europe (outside Germany)	10.5	9.5
Rest of the world	9.4	5.6

* According to location of customers

Liquidity risk

The liquidity risk describes the risk that a company cannot adequately meet its financial obligations.

GFT mainly generates funds from operative business: external financing only plays a subordinate role. The funds are mainly used to finance working capital and investments. GFT controls its liquidity by the Group holding cash and cash equivalents to a sufficient extent in addition to the inflow of cash from the operative business and maintains a credit line with banks. The liquid funds are mainly composed of cash and cash equivalents and short-term realisable securities. Some of the instruments held as cash and cash equivalents are exposed to market price risks, whereby decisions with regard to hedging are taken on an individual basis.

The operative liquidity management comprises a cash-pooling process for the German companies, through which the daily consolidation of cash and cash equivalents is carried out. The foreign companies are included in the liquidity management by means of a central treasury. Liquidity surpluses and demands can thus be controlled according to the needs of the entire Group, as well as individual companies in the Group. The due dates of financial assets and financial liabilities and estimates of the operative cash flow are included in the short- and medium-term liquidity management.

A breakdown of the residual term of financial liabilities based on the contractually agreed due dates is shown below: The contractually agreed undiscounted cash flows are also shown.

Carried amount	Cash flows up to	Cash flows of 1 to	from 3 months to	Cash flows of	Cash flows of more than 5 years

28,916	22,521	6,395
483	483
48
29,597
Carried amount 31/12/2006	Cash flows up to 1 month	Cash flows of 1 to 3 months	Cash flows from 3 months to 1 year	Cash flows of 1 to 5 years	Cash flows of more than 5 years
2,566			2,416	150
15,594	14,315	1,279
516	516
66 18,742
	31/12/2007 150	1 month	3 months	Cash flows 1 year 150	1 to 5 years

1 A statement has not be made on the cash flow of derivative financial liabilities, as only one interest swap is involved with a term up to 31 December 2015. The effects of this interest swap on the cash flow of the fiscal year 2015 cannot be predicted.

The liquidity kept in reserve, the credit lines and the ongoing operative cash flow give GFT sufficient flexibility to cover the Group's refinancing needs. The liquidity risk is low; there are no risk concentrations in relation to liquidity risks.

Market risk

In terms of market risk, risk means that the fair value or future cash flows of a financial instrument fluctuate due to the changes in market prices. Market risk includes the three risk types, exchange rate risk, interest risk and other price risks (e.g. share price risks). Market risks may have a negative impact on the Group's financial position and profit or loss. GFT controls and monitors market risks mainly via its operative business and financing activities and, if it is appropriate and meaningful in individual cases, by using derivative financial instruments. The Group regularly assesses these risks by following changes in economic key indicators and market information.

GFT is also subject to exchange rate risks due to the international orientation of the GFT Group. Exchange rate risks occur in the case of financial instruments which are denominated in a foreign currency, i.e. a different currency to the functional currency in which they are valued. Financial instruments in functional currency and non-monetary items do not exhibit any exchange rate risk.

The exchange rate risk of the GFT Group arising from operative business is very low for the following reasons:

The revenue of the GFT Group is generated virtually exclusively in Euros (2007 approximately 97%, 2006 approximately 95%), which is the functional currency of the invoicing company. This also applies to sales with customers in England and Brazil in addition to customers in the euro zone. Sales through customers in Switzerland are normally invoiced in Swiss francs, which is the functional currency of the Swiss international affiliate, and so no exchange rate risk is incurred.
The purchases of the GFT Group (mainly outside services, staff) are also carried out virtually exclusively in the functional currency of the procuring company (in practice largely in €).

Effects may arise from the currency conversion within the scope of consolidation from the conversion from the balance sheet and income statement of subsidiaries whose functional currency is not the euro. These currency conversion effects recognised directly in equity have only resulted in minimal amounts over the last few years (< €(k) 100).

There are no currencies that pose a significant risk to the Group. This also applies to the US dollar, whose development does not directly affect the financial instruments of the GFT Group. In the fiscal years 2007 and 2006 exchange rate hedging, e.g. through derivative financial instruments, was not necessary and was not carried out.

Interest risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to the changes in the market interest rate. As regards financial assets, GFT does not see any risk from interest rate changes in the case of the largely short-term due and non-interest-bearing trade receivables or the other financial assets. In the case of cash and cash equivalents there is a risk that a lower market interest rate will lead to lower interest income; a fall in the market interest rate by one percentage point would in this case lead to a fall in the interest income of between €(k) 150 and €(k) 200 p.a. The securities with a partially variable rate of interest (liabilities) are subject to an interest risk that is reflected in both the fair value and the size of the interest income. Owing to the manageable scale of the existing security portfolios, GFT sees the interest risk for securities in relation to interest income as insignificant (approximately €(k) 25 to €(k) 35 per percentage-point change in interest), whereas the impact on the fair value of the securities may be considerable. No original financial liabilities with a variable rate of interest existed in 2006 and 2007, so that there is no interest risk with regard to the main part of the financial liabilities. In 2006 and 2007 a derivative financial liability (interest swap) existed, which is subject to an interest risk; since the existence of the interest swap (2005) the fair value was between €(k) -40 and €(k) -66, which is why the interest risk is not seen as significant. Hedging of the interest risk was not necessary and was not carried out in 2007 and 2006.

As GFT does not hold any shares in quoted joint-stock companies, and other financial instruments are not dependent on share prices or share price indexes, there is no share price risk.

31. Contingencies

Securities totalling €(k) 250 (prev. year: €(k) 250) have been pledged to secure existing pensions to authorised persons. In the previous year, the GFT Group had access to bank custody accounts totalling €(k) 3,289 only with the express consent of the corresponding banks.

From the assets at credit institutes, €(k) 250 (prev. year €(k) 565) is pledged to each bank.

32. Other financial obligations

The amount of future minimum leasing payments from operating leasing relations is put together as follows:

	31/12/2007 €(k)	31/12/2006 €(k)
Obligations from temporary rental, leasing and licensing contracts at nominal value:
– 2008	4,903	4,073
– 2009 – 2011	9,540	7,257
– 2012 and later (excluding obligations unlimited in time)	2,113	3,150
	16,556	14,480
Annual obligations from open-ended rental contracts:	442	415

Payments under operating leases that are recorded as expenses in the period under review total €(k) 4,865 (prev. year €(k) 4,824). All lease agreements of the GFT Group can be qualified as operating leases from a commercial point of view, so that leased objects are attributed to the lessor, not GFT, the lessee. Leases primarily relate to business premises, as well as to vehicles and office equipment. Lease agreements for buildings are generally concluded for a fixed lease period and had remaining terms of up to ten years as of 31 December 2007. Operating leases for vehicles and office equipment have terms of between three and seven years. Agreements usually terminate automatically at the end of the term of the agreement.

33. Relationships with affiliated companies and persons

Affiliated persons from the shareholder group that held shares in the Company prior to the IPO in June of 1999 are the Chairman of the Executive Board, Ulrich Dietz, as well as Mrs. Maria Dietz, an authorised signatory of GFT AG. Ulrich Dietz and Maria Dietz have informed the company that they hold 29.94% and 9.67% of voting rights in GFT Technologies AG, respectively, as of 1 April 2002. As of 31 December 2006, Ulrich Dietz holds 28.29% (prev. year: 27.36%) of GFT shares. There were no other relationships or transactions above and beyond the existing employment relationships with the individuals mentioned above during the financial year 2007.

In the 2007 financial year Executive Board member Marika Lulay owned one share (=0.33%) in the GFT Technologies (Schweiz) AG, Wallisellen/Switzerland subsidiary.

We refer to the following section on parent company organs for the composition of people affiliated to the Executive and Supervisory Boards, their remuneration and ownership of GFT shares.

34. Parent company organs

Executive Board

Mr. Ulrich Dietz, Chairman of the Executive of the Board (Chief Executive Officer), responsible for the segments Resourcing and Software as well as for the corporate functions Marketing, Communications and Investor Relations.

Supervisory Board seats:

GFT Iberia Solutions, S.A., Sant Cugat del Vallés, Spain (Chairman)

Sparkasse Schwarzwald-Baar (Advisory Board)

further memberships in comparable controlling bodies:

Deutsche Bank AG, Stuttgart (Advisory Committee)

Mrs. Marika Lulay, Member of the Executive Board (Chief Operating Officer), responsible for the segment Services as well as for the corporate functions Technology and Quality Management

Supervisory Board seats:

GFT Iberia Solutions, S.A., Sant Cugat del Vallés, Spain (Assistant Chairman)

GFT Technologies (Schweiz) AG, Wallisellen, Switzerland (Advisory Board)

GFT UK Limited, London (Member of the Board)

GFT Technologies (India) Private Limited, Trichy, India (Member of the Board)

Dr. Jochen Ruetz, Member of the Executive Board (Chief Financial Officer), responsible for the corporate functions Finance, Controlling, Human Resources, Internal Revision, Legal and Internal IT

Supervisory Board seats:

G. Elsinghorst Handelsgesellschaft mbH, Bocholt, Germany

GFT Iberia Solutions, S.A., Sant Cugat del Vallés, Spain

Supervisory Board

Mr. Franz Niedermaier, former CEO Oracle Deutschland GmbH, Chairman Further Supervisory Board seats: SECARON AG, Munich (Assistant Chairman) Intrafind Software AG, Munich (Chairman)

Dr. Peter Opitz, lawyer, Assistant Chairman

Prof. Dr. Gerhard Barth, Associated partner at Boyden Interim Management Bersch, Lange & Partner Gesellschaft für Organisationsentwicklung mbH, Bad Homburg, Germany (since 20 October 2007) Partner at IMACOS Truckenmüller • Struck & Partner, Stuttgart (until end 2007) Partner at IMACOS Truckenmüller • Struck & Partner, Stuttgart (until end 2007) Dr. Thorsten Demel, Chief Operating Officer, Managing Director Global Technology & Operations, Deutsche Bank AG Further Supervisory Board seats:

Pago eTransaction GmbH, Cologne, Germany

Dr. Simon Kischkel, Project Director GFT Technologies AG, St. Georgen (employee)

Mr. Andreas Bernhardt (since 22 May 2007), owner of the individual enterprise Executive advice, Erdmannshausen; Associated Partner at Boyden Interim Management Bersch, Lange & Partner Gesellschaft für Organisationsentwicklung mbH, Bad Homburg (since 1 January 2008)

Mrs. Ingrid Schmidt (until 22 May 2007), Project Manager GFT Technologies AG, St. Georgen (employee)

Total remuneration for the Executive Board for the 2007 fiscal year amounted to €(k) 1,658 (prev. year: €(k) 1,432). It is exclusively due in the short term as defined by IAS 24.

Total remunerations for the Supervisory Board for the 2007 fiscal year amounted to €(k) 83 (prev. year: €(k) 83). It is exclusively comprised of fixed, not profit-related commission. As the year before, in the financial year 2007, no further commissions for personally fulfilled activities were paid nor were any advantages assured to the members of the Supervisory Board.

The stocks of GFT shares held by members of the Group's organs in the 2005 financial year are comprised as follows:

Executive Board Members	Ulrich Dietz	Marika Lulay	Dr. Jochen Ruetz	Total
Shares	Quantity	Quantity	Quantity	Quantity
As of 01/01/2007	7,203,129	20,000	100,000	7,323,129
Additions	244,700	5,000	0	249,700
Subtractions	0	0	0	0
As of 31/12/2007	7,447,829	25,000	100,000	7,572,829

Supervisory Board Members	Franz Nieder maier	Dr. Peter Opitz	Prof. Dr. Gerhard Barth	Dr. Thorsten Demel	Dr. Simon Kischkel	Ingrid Schmidt Quantity	Andreas Bernhardt	Total
Shares	Quantity	Quantity	Quantity	Quantity	Quantity	Quantity	Quantity	Quantity
As of 01/01/2007	30,000	0	0	0	1,302	1,000	0	32,302
Additions	0	0	0	0	0	0	13,000	13,000
Subtractions	0	0	0	0	0	-1,000*	0	-1,000
As of 31/12/2007	30,000	0	0	0	1,302	0	13,000	44,302

* Disposals allude to the resignation of Ingrid Schmidt from the Supervisory Board in May 2007.

35. Employees

In the 2007 financial year there were on average 1,072 employees, in 2006 1,033.

36. Honorarium for the Balance Sheet Auditor

The honorarium recorded for the auditors of the consolidated accounts, Grant Thornton GmbH Wirtschaftsprüfungsgesellschaft, as an expense in the 2007 financial year totalled:

	2007 €(k)	2006 €(k)

Auditing of financial statements	201	190
Other ratification or valuation services	58	73
Tax accountancy services	1	10
Other services provided to the parent company or subsidiaries	14	10
	274	283

37. Events after the balance sheet key date

No noteworthy events have occurred during the year on or before 7 March 2008. We refer to the information in the Consolidated Financial Statements and the Financial Statements.

38. Disclosures pursuant to section 160 (1) No. 8 of the German Stock Corporation Act

GFT AG received notification on 19 September 2007 from AvW Group AG, Krumpendorf, Austria, regarding an equity stakeholding, the text of which was as follows:

"AvW Group AG, Krumpendorf, Austria, disclosed in a letter dated 19.09.2007 in line with section 21 (1) of the Securities Trading Act (WpHG) that its voting equity stake in our company exceeded the 5% threshold for voting rights on 17/09/2007, totalling 5.0127% on this date (number of shares disclosed: 1,319,641)."

Also, in a letter dated 19/09/2007 from AvW Beteiligungsverwaltung GmbH (Vienna, Austria), Dr. Wolfgang Auer von Welsbach (Austria) and the Auer von Welsbach Privatstiftung (Vienna, Austria) were informed that shareholdings of the aforementioned individuals/legal entities in our company had exceeded the 5% threshold for voting rights on 17/09/2007 by means of shareholdings in AvW Group AG, totalling 5.0127% on this date (number of shares disclosed: 1,319,641). This voting contingent accrues to the respective individuals/legal entities above pursuant to section 22 (1), sentence 1, no. 1 of the Securities Trading Act (WpHG) .

In addition, the following shareholdings were also disclosed:

AvW Beteiligungsverwaltung GmbH (FN 204069 b) holds a 100% stake in AvW Group AG. The Auer von Welsbach Privatstiftung (private foundation - FN 171457 v) is the sole shareholder of AvW Beteiligungsverwaltung GmbH. Dr. Auer von Welsbach, founder of the Auer von Welsbach Privatstiftung, has sole right to amend the foundation deed of the Auer von Welsbach Privatstiftung."

GFT AG received notification on 10 September 2007 from AvW Group AG, Krumpendorf, Austria, regarding an equity stakeholding, the text of which was as follows:

"AvW Group AG, Krumpendorf, Austria, disclosed in a letter dated 10/09/07 in line with § 21 section1 of the Securities Trading Act (WpHG) that its voting equity stake in our company had exceeded the 3% threshold for voting rights on 06/09/2007, totalling 4.112% on this date (number of shares disclosed: 1,082,641)."

Also, in a letter dated 10/09/2007 from AvW Beteiligungsverwaltung GmbH (Vienna, Austria), Dr. Wolfgang Auer von Welsbach (Austria) and the Auer von Welsbach Privatstiftung (Vienna, Austria) were informed that shareholdings of the aforementioned individuals/legal entities in our company by means of shareholdings in AvW Group AG had exceeded the 3% threshold for voting rights on 06/09/2007, totalling 4.112% on this date (number of shares disclosed: 1,082,641).This voting contingent accrues to the respective individuals/legal entities above pursuant to section 22 (1), sentence 1, no. 1 of the Securities Trading Act (WpHG).

In addition, the following shareholdings were also disclosed:

AvW Beteiligungsverwaltung GmbH (FN 204069 b) holds a 100% stake in AvW Group AG. The Auer von Welsbach Privatstiftung (FN 171457 v) is sole shareholder of AvW Beteiligungsverwaltung GmbH. Dr. Auer von Welsbach, founder of the Auer von Welsbach Privatstiftung, has sole right to amend the foundation deed of the Auer von Welsbach Privatstiftung."

GFT AG received notification on 7 September 2007 from Ratio Asset Management LLP, 52 Cornhill, London, UK, regarding an equity stakeholding, the text of which was as follows:

"Ratio Asset Management LLP, 52 Cornhill, London, UK, disclosed in a letter dated 07/09/2007 in line with the Securities Trading Act (WpHG) that its voting equity on 06/09/2007 fell below the 3% threshold for voting rights threshold, now equal to 0.0%. No voting rights are to be assigned to Ratio Asset Management LLP, pursuant to section 22 (1), sentence 1 no. 6 of the Securities Trading Act (WpHG)."

GFT AG was notified by Ratio Asset Management LLP, 52 Cornhill, London, UK, on 20 August 2007 regarding an equity stakeholding, the text of which was as follows:

"Ratio Asset Management LLP, 52 Cornhill, London, UK, disclosed in a letter dated 20/08/07 in line with section 21 (1) of the Securities Trading Act (WpHG) that its voting equity exceeded the 3% threshold for voting rights as of 17/08/2007; and now totals 817.964). 3.11% (number of votes: 817,964) are to be assigned, pursuant to section 22 (1), sentence 1 no. 6 of the Securities Trading Act (WpHG)."

GFT AG was informed on 25 June 2007 by the KST Beteiligungs Aktiengesellschaft, Stuttgart, of an equity stakeholding, the text of which was as follows:

KST Beteiligungs Aktiengesellschaft with its registered office in Stuttgart, Germany, disclosed in a letter dated 25/06/2007 pursuant to section 21 (1) of the Securities Trading Act that its voting stake in GFT Technologies AG fell below the 5% and 3% thresholds as of 20/06/2007, and now totalled 2.53% (equivalent to 666,300 votes)."

On 12 January 2007, GFT AG was informed by the Baden-Württembergische Investmentgesellschaft mbH, Stuttgart, of the existence of equity interest, the content of which was made public as follows:

"The Baden-Württembergische Investmentgesellschaft mbH, with headquarters in Stuttgart, has informed GFT via a communication dated 12/01/2007, pursuant to section 21 (1) of the German Securities Trading Act (WpHG), that its percentage of voting rights in GFT Technologies AG, including those represented in all investment funds, exceeded the voting rights threshold of 5% on 6 December 2006 and presently amounts to 5.997%. This disclosure is the result of the merger of SüdKA and BWK and the simultaneous renaming of BWK to BWInvest, as the company is legally known as of 6 December 2006."

On 3 April 2002, GFT AG was informed by Mr. Ulrich Dietz and Mrs. Maria Dietz, of St. Georgen, of the existence of equity interest, the content of which was made public as follows:

"Mr. Ulrich Dietz, domiciled in St. Georgen, informed us on 03/04/2002, pursuant to section 41 (2), No. 1 of the German Securities Trading Act, that 29.94% of the voting rights in GFT Technologies AG are imputable to him as of 01/04/2002. Mrs. Maria Dietz, domiciled in St. Georgen, informed us on 03/04/2002, pursuant to section 41 (2), No. 1 of the German Securities Trading Act, that 9.67% of the voting rights in GFT Technologies AG are imputable to her as of 01/04/2002."

39. Issuance of the Statement on the German Corporate Governance Code pursuant to section 161 of the German Stock Corporation Act

On 18 December 2007, the Executive Board and the Supervisory Board issued the updated Declaration of Conformity pursuant to section 161 of the German Stock Corporation Act, and made it available to all shareholders on the Company's website as of 20 December 2007.

St. Georgen, 7 March 2008

GFT Technologies Aktiengesellschaft Executive Board

Executive Board (Chairman) Executive Board Executive Board

Ulrich Dietz Marika Lulay Dr. Jochen Ruetz

Responsibility Statement

To the best of our knowledge, and in accordance with the applicable reporting principles, the Consolidated Financial Statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Group Management Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group.

St. Georgen, 7 March 2008

Executive Board (Chairman) Executive Board Executive Board

Ulrich Dietz Marika Lulay Dr. Jochen Ruetz

Auditor's Report

GFT Technologies Aktiengesellschaft, St. Georgen – Consolidated Financial Statements, St. Georgen

We have audited the Consolidated Financial Statements of the GFT Technologies Aktiengesellschaft, St. Georgen (comprising balance sheet, income statement, changes in shareholder's equity statement, cash flow statement, and notes to the financial statements) and its summarised management and Group Management Report for the business year from 1 January 2007 to 31 December 2007. The preparation of consolidated financial statements and the summarised Management Report and Group Management Report in accordance with the International Financial Reporting Standard (IFRS) as used in the EU and the supplementing commercial law guidelines that are used in accordance with Article 315a (1) of the German Commercial Code are the responsibility of the company's legal representatives. Our responsibility is to express an opinion on the consolidated financial statements and the summarised Management Report and Group Management Report based on our audit.

We conducted our audit of the consolidated financial statements in accordance with Article 317 of the German Commercial Code and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). These standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and earnings situation in the annual financial statements in accordance with German principles of proper accounting and in the summarised Management Report and Group Management Report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the books and records, and in the consolidated financial statements and Management Report and Group Management Report are examined primarily on a test basis within the framework of the audit. The audit includes the assessment of the financial statements of the companies included in the consolidated financial statements, the segregation of the consolidated group, the accounting and consolidation principles used, and the significant estimates made by legal representatives, as well as evaluating the overall presentation of the consolidated financial statements and the summarised Management Report and Group Management Report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the Consolidated Financial Statements of GFT Technologies Aktiengesellschaft, St. Georgen satisfy the IFRS as applied in the EU, and the supplemental commercial law guidelines that are used in accordance with Article 315a, Section 1 of the German Commercial Code, and with due consideration of these guidelines give a true and fair view of the net assets, financial situation, and earnings situation of the Group in accordance with the actual conditions. The summarised Management Report and Group Management Report agree with the consolidated financial statements, and as a whole provide a suitable view of the Group's situation and accurately represents the opportunities and risks of future development.

Stuttgart, 11 March 2008

Grant Thornton GmbH Wirtschaftsprüfungsgesellschaft

Annual Financial Statements

Schulze Osthoff Scheftschik Auditor Auditor

Annual Financial Statements

GFT Technologies AG

Balance Sheet	128
Income Statement	130
Notes	131
Responsibility Statement	144
Auditor's Report	145

Balance Sheet (HGB)

as of 31 December 2007

GFT Technologies Aktiengesellschaft, St. Georgen

Assets	31/12/2007 €	31/12/2006 €

A. Non-current assets
I. Intangible assets
1. Licences, industrial property rights and similar rights and values	163,547.00	268,426.00
2. Goodwill	0.00	0.00
	163,547.00	268,426.00
II. Tangible assets
Other equipment, office and factory equipment	791,142.60	709,762.36
III. Financial assets
1. Shares in affiliated companies	16,073,656.70	16,073,644.52
2. Investments	0.00	0.00
	16,073,656.70	16,073,644.52
	17,028,346.30	17,051,832.88

B. Current assets
I. Inventories
Work in progress	3,778,271.70	1,779,485.06
II. Receivables and other current assets
1. Trade receivables	18,723,032.39	7,517,915.19
2. Receivables from affiliated companies	6,651,430.74	5,576,660.07
3. Other assets	1,966,093.95	1,556,534.88
	27,340,557.08	14,651,110.14
III. Securities
Other securities	2,634,500.00	3,251,400.00

IV.Cash balance, cash at banks	16,085,699.33	11,460,906.91
	49,839,028.11	31,142,902.11
C. Accruals and deferrals	85,058.02	109,364.87

D. Deferred tax assets	175,768.74	290,388.62

	67,128,201.17	48,594,488.48

Liabilities	31/12/2007 €	31/12/2006 €
A. Shareholder's equity

I. Share capital	26,325,946.00	26,325,946.00
Conditional capital € 8,280,000.00 (prev. year € 8,280,000.00)
II. Capital reserve	2,745,042.36	27,943,824.20
III.Retained earnings
1. Legal reserve	0.00	1,387.65
2. Other revenues reserve	2,343,349.97	2,343,349.97
IV.Net earnings	0.00	–

V. Loss carried forward	–	-31,223,978.28
VI.Net income	–-	3,542,919.58
	31,414,338.33	28,933,449.12
B. Provisions
1. Provisions for pensions	217,393.00	208,157.00
2. Provisions for taxation	504,616.00	594,011.00
3. Other provisions	6,559,714.83	5,327,640.62
	7,281,723.83	6,129,808.62
C. Liabilities
1. Advance payments on orders	4,083,449.14	1,007,259.00
2. Trade liabilities	19,150,958.09	10,140,944.74
3. Liabilities to affiliated companies	4,097,078.97	1,546,902.49
4. Liabilities to participations	114,067.11	33,770.53
5. Other liabilities	780,776.53	802,353.98
	28,226,329.84	13,531,230.74
D. Accruals and deferrals	205,809.17	0.00




	67,128,201.17	48,594,488.48

Income Statement (HGB)

for the period from 1 January to 31 December 2007 GFT Technologies Aktiengesellschaft, St. Georgen

		2007 €	2006 €

1.	Revenue	119,676,238.34	76,400,278.24
2.	Change in inventories of work in progress	1,998,786.64	407,594.24
3.	Other operating income	5,438,355.80	5,679,137.77
		127,113,380.78	82,487,010.25
4.	Cost of materials:
	a) Cost of purchased goods	2,025.30	2,889.36
	b) Costs of purchased services	102,450,348.21	55,835,934.55
		102,452,373.51	55,838,823.91
5.	Personnel expenses:
	a) Salaries and wages	14,997,929.13	15,425,511.56
	b) Social security and expenditures for retirement pensions - of which for retirement pensions € 42,033.80 (prev. year: € 55,935.73 )	2,166,398.46	2,418,486.66
		17,164,327.59	17,843,998.22
6.	Depreciation on intangible assets and tangible assets	508,874.76	477,103.44
7.	Other operating expenses	8,570,342.36	7,929,094.65
		-1,582,537.44	397,990.03
8.	Income from investments - of which from affiliated companies € 2,700,000.00 (prev. year: € 2,142,028.22)	2,700,000.00	2,142,028.22
9.	Income from profit transfer agreements	1,544,657.04	0.00
	10. Tax sharing payments from subsidiaries	304,540.00	0.00
	11. Other interest and similar income - of which from affiliated companies € 213,784.89 (last year: € 159,364.58)	583,970.29	573,953.67
	12. Depreciation on financial assets and on securities classified as current assets	831,300.00	276,100.00
	13. Interest and similar expenses - of which to affiliated companies € 123,713.82 (prev. year: € 82,357.83)	132,810.89	85,963.94
		4,169,056.44	2,353,917.95
	14. Result from ordinary business activities	2,586,519.00	2,751,907.98
	15. Taxes on income	80,395.98	-721,409.62
	16. Other taxes	25,233.81	-69,601.98
		105,629.79	-791,011.60
	17. Net income	2,480,889.21	3,542,919.58
	18. Loss carried forward from previous year	-27,681,058.70
	19. Allocated from capital reserve	25,198,781.84
	20. Allocated from retained earnings - from the statutory reserve	1,387.65
	21. Net earnings	0.00

Notes to the Financial Statements (HGB)

as of December 2007 GFT Technologies Aktiengesellschaft, St. Georgen

I. General Data on the Annual Financial Statement and on the Accounting and Valuation Methods

1. General information

The Annual Financial Statement for GFT Technologies Aktiengesellschaft (GFT AG or the company) was prepared in € pursuant to the regulations of the German Commercial Code (HGB) and the German Stock Corporations Act (AktG). The profit and loss statement was prepared pursuant to the total cost method. The company is a large public limited company in terms of section 267 of the German Commercial Code. Special issues are respected in the profit and loss statement by addition or breakdown of items.

2. Accounting and valuation methods

Goodwill acquired is capitalised and amortised according to schedule over fifteen years. Other intangible assets acquired are valuated at cost, reduced by scheduled linear depreciation amounts. The regular useful life is of three years.

Tangible fixed assets are valued at cost, reduced by scheduled wear-and-tear depreciation amounts. The depreciations for movable tangible fixed assets are made linearly over useful lives of three to thirteen years. Low-value capital goods are fully depreciated in the year of acquisition, and their disposal is also imputed in the year of acquisition.

The financial assets are valued at cost under observation of the lower-of-cost-or-market principle.

As far as the value of fixed assets calculated according to existing principles is higher than the value attached to them on the balance sheet date, it will be accommodated through special write-offs. As far as the reasons for depreciations carried out in previous years no longer exist, a write-up will be undertaken.

The valuation of unfinished services is carried out on the basis of manufacturing costs accrued. Projects with loss expectations are assessed at lower values.

With receivables, write-downs take into account identifiable single risks. The general credit risk is sufficiently accommodated with a general bad debt provision of 1.0% (prev. year: 1.0%) on receivables.

Securities of liquid assets are valued at cost or at lower market prices.

Deferred taxes on the assets side are applied from case to case in exercising the voting right according to section 274 (2) German Commercial Law, to the amount of the expected tax savings in the subsequent years. It is calculated taking into account the Corporate Tax Reform 2008 at a tax rate of 28.0% (prev. year: 37.5%). €(k) 74 can be applied to the tax rate changes.

The fractional value of the pension obligations was calculated according to mathematical insurance methods based on a rate of interest of 6%. The "2005 G Guideline Tables" by Prof. Klaus Heubeck (Cologne 2005) were used as a basis for the computation. The anniversary provisions are calculated at an interest rate of 5.5%, using the same "2005 G Guideline Tables" as basis.

The other provisions take into account all identifiable risks and contingent obligations. If needed, the taxation provisions also include deferred tax liabilities, in addition to the actual liabilities.

The remaining assets and liabilities are reported at the nominal value or repayment amount.

Receivables and liabilities in a foreign currency are valued at the exchange rate corresponding to the transaction date. Losses from exchange rate fluctuations are taken into account.

II. Explanations of the Income Statement

1. Balance sheet

Non-current assets

The development of the assets is shown in the attachment on the pages 134 and 135.

Share ownership

As of 31 December 2007, the company held, directly and indirectly, shares of a minimum of 20% in the following companies:

Name	Location	Share of the capital		Equity 31/12/2007		Results for the business year
Direct investment
GFT Technologies (Schweiz) AG	Wallisellen, Switzerland	99.0%	CHF	151,506.56	CHF	10,233.52
GFT Solutions GmbH (as of 1 February 2008 GFT inboxx GmbH)	Hamburg, Germany	100%	EUR	7,169.07	EUR	-549,394.87
GFT Technologies GmbH	Vienna, Austria	100%	EUR	-118,218.00	EUR	6,136.13
GFT UK Limited	London, UK	100%	EUR	1,921,170.15	EUR	1,263,192.28
GFT Iberia Solutions, S.A.	Sant Cugat del Vallés, Spain	100%	EUR	8,211,610.77	EUR	5,053,119.71
emagine gmbh	Eschborn, Germany	100%	EUR	34,810.30	EUR	2,239.62
GFT Technologies (India) Private Limited	Trichy, India	100%	INR	19,648,362.50	INR	-7,254,979.50
GFT Resource Management GmbH	Eschborn, Germany	100%	EUR	1,778,996.03	EUR	0.00 *
GFT Technologies SARL	Paris, France	100%	EUR	1,211,300.99	EUR	319,429.96
GFT Business Development GmbH	Eschborn, Germany	100%	EUR	17,139.79	EUR	-772.60
Indirect investment
Emagine Servicios de Consultoría e Informática, S.A.	Sant Cugat del Vallés, Spain	100%	EUR	2,427,402.70	EUR	688,315.88
GFT Brazil Consultoria Informática Ltda.	São Paulo, Brazil	100%	BRL	-47,706.74	BRL	105,966.69
GFT Flexwork GmbH	Berlin, Germany	100%	EUR	375,000.00	EUR	0.00 **

* There is an agreement for the shifting of profits between the GFT Resource Management GmbH (profit shifting company) and GFT Technologies AG.

** There is an agreement for the shifting of profits between the GFT Flexwork GmbH (profit shifting company) and GFT Resource Management GmbH.

Receivables and other current assets

The receivables from affiliated companies concern trade receivables to the amount of €(k) 108 (prev. year: €(k) 703) as well as other assets to the amount of €(k) 6,543 (prev. year: €(k) 4,874). Of other current assets, an amount of €(k) 638 (prev. year €(k) 679) shows a maturity of more than a year. It concerns the receivable for payment of corporate tax income according to § 37 KStG.

Deferred tax assets

The deferred tax assets shown pertain to differences between the commercial and tax balance sheets, in the valuation of the anniversary provisions. Taxes from income and earnings for the business year 2007 include expenses from the decrease of deferred tax assets in comparison to the previous year's balance sheet date, in the amount of €(k) 115 (prev. year: revenue: €(k) 41).

Equity

As of 31 December 2007, share capital to the amount of € 26,325,946.00 exists out of 26,325,946 no-par bearer shares (unchanged as of 31 December 2006) which all grant equal rights.

According to the commercial law, for the Financial Statements as of 31 December 2007 the Annual Results are accounted for, whereas in 2006, the Annual Results were not included. According to this, in the Financial Statements as of 31 December 2007, instead of "loss carried forward" and "net income", the item "balance sheet earnings" is included.

The transition from net income to accumulated loss pursuant to section 158 (1) of the German Stock Corporations Act results as follows:

	2007 €	2006 €

17. Net income	2,480,889.21	3,542,919.58
18. Loss carried forward from previous year	-27,681,058.70	-31,223,978.28
19. Withdrawal from capital reserve	25,198,781.84	0.00
20. Withdrawal from retained earnings
- From legal reserve	1,387.65	0.00
21. Balance sheet income (prev. year: balance sheet loss)	0.00	-27,681,058.70

At a glance, the changes in equity during business years 2007 and 2006 resulted as follows:

	Share capital €	Capital reserve €	Legal reserve €	Other retained earnings €	Balance sheet loss/income €
As of 31 December 2005	26,325,946.00	27,943,824.20	1,387.65	2,343,349.97	-31,223,978.28
Net income 2006					3,542,919.58
As of 31 December 2006	26,325,946.00	27,943,824.20	1,387.65	2,343,349.97	-27,681,058.70
Net income 2007					2,480,889.21
Withdrawals from capital reserve 2007		-25,198,781.84			25,198,781.84
Withdrawals from statutory reserve 2007			-1,387.65		1,387.65
As of 31 December 2007	26,325,946.00	2,745,042.36	0.00	2,343,349.97	0.00

Changes in Fixed Assets

for the period from 1 January to 31 December 2007 GFT Technologies Aktiengesellschaft, St. Georgen

		At costs
	As of 01/01/2007 €	Additions €	Disposals €	As of 31/12/2007 €
I. Intangible assets
1. Licenses, industrial property rights and similar rights	3,444,975.46	32,749.67	4,785.70	3,472,939.43
2. Goodwill	127,822.97	0.00	0.00	127,822.97
	3,572,798.43	32,749.67	4,785.70	3,600,762.40
II. Tangible assets
Other equipment, office and factory equipment	6,805,600.57	453,584.33	194,044.75	7,065,140.15
III. Financial assets
1. Shares in affiliated companies	40,577,596.20	500,012.18	0.00	41,077,608.38
2. Investments	1,109,679.15	0.00	0.00	1,109,679.15
	41,687,275.35	500,012.18	0.00	42,187,287.53

	52,065,674.35	986,346.18	198,830.45	52,853,190.08

Book values			Depreciation
As of 31/12/2007 € €	As of 31/12/2007	Disposals €	Depreciation of the financial year €	As of 01/01/2007 €

163,547.00	3,309,392.43	4,785.70	137,628.67	3,176,549.46
0.00	127,822.97	0.00	0.00	127,822.97
163,547.00	3,437,215.40	4,785.70	137,628.67	3,304,372.43

791,142.60	6,273,997.55	193,086.75	371,246.09	6,095,838.21

16,073,656.70	25,003,951.68	0.00	500,000.00	24,503,951.68
0.00	1,109,679.15	0.00	0.00	1,109,679.15
16,073,656.70	26,113,630.83	0.00	500,000.00	25,613,630.83

17,028,346.30	35,824,843.78	197,872.45	1,008,874.76	35,013,841.47

A transfer to legal reserves is inapplicable, not only because there is no transferable net income in terms of section 150 (2) of the German Stock Corporation Act, but also because the legal reserve funds pursuant to section 150 (2) of the German Stock Corporation Act already total more than 10% of the share capital, due to the high capital reserves according to section 272 (2) No. 1 of the German Commercial Code.

Authorised capital

To waive subscription rights for fractional amounts;
For capital increases against contributions in kind in order to grant shares for the purpose of acquiring companies or holdings in companies;
In the event of a capital increase against cash contributions, provided that the issue price of the new shares is not significantly lower than the stock exchange price and provided that the proportionate amount of share capital attributable to the new shares, for which subscription rights are excluded, does not exceed ten percent of share capital, either at the time at which this authorisation becomes effective or at the time at which it is exercised;
In the event of a capital increase for the issue of employee shares, provided that the proportionate amount of share capital attributable to the new shares, for which subscription rights are excluded, does not exceed ten percent of share capital, either at the time at which this authorisation becomes effective or at the time at which it is exercised.

The Executive Board is authorised to establish additional details for the execution of a capital increase from authorised capital with the consent of the Supervisory Board.

Under-utilised, authorised capital to the amount of € 10,000,000.00 (prev. year: € 10,000,000.00) is in existence as of 31 December 2007.

Conditional capital

Conditional capital amounted to € 8,280,000.00 as of 31 December 2007 (prev. year: € 8,280,000.00).

Share capital is conditionally increased up to a nominal € 780,000.00, divided in up to 780,000 individual bearer share certificates made out to the owners (Conditional capital I/1999). This conditional capital increase serves the granting of subscription rights to members of the Executive Board and company employees, as well as to members of the executive management and employees of affiliated companies, in accordance with the resolution of the Annual General Meeting of 4 June 1999. The conditional capital increase will only be executed to the extent that holders of subscription rights utilise these rights. New shares participate in profits from the beginning of the financial year in which the exercise of subscription rights has taken place. The Executive Board is authorised to establish details on the execution of the conditional capital increase, as well as to define subscription rights with the consent of the Supervisory Board, provided this is in accordance with the resolution of the Annual General Meeting on 4 June 1999.

By resolution of the Annual General Meeting of 22 May 2007, the authority of the Annual General Meeting of 29 May 2002 to issue convertible and/or option bonds and the existing conditional capital pursuant to section 4 (6) lit. b of the Articles of Association (Conditional capital II/2002) was rescinded. New conditional capital II/2007 was created as follows:

Pursuant to the resolution of the Annual General Meeting of 22 May 2007 the share capital is to be conditionally increased by € 7.5m by issuing up to 7,500,000 new individual bearer shares (Conditional capital II/2007). The conditional capital increase will only be carried out to the extent that

the owners or creditors of conversion rights or bonds that are appended to the convertible or option bonds to be issued by the company or by its majority holding companies by 21 May 2012 under the Annual General Meeting resolution of 22 May 2007 exercise their conversion or option rights or
-– the holders or creditors of convertible bonds to be issued by the company or by its majority holding companies by 21 May 2012 under the Annual General Meeting resolution of 22 May 2007 with an obligation to exercise their right of conversion actually discharge said obligation.

By resolution of the Annual General Meeting on 22 May 2007, the Executive Board was authorised, given Supervisory Board approval, to issue on a one-off basis or on multiple occasions up until 21 May 2012 bearer or registered convertible and/or option bonds ("bonds") with a total nominal value of up to € 100m with a maximum term of 15 years and to grant the owners or creditors of bonds, option or conversion rights in the company with a pro rata share in the share capital of up to € 7.5m in close accordance with the terms and conditions governing convertible or option bonds. The bonds may also be issued by direct or indirect majority holding companies of the company. In this case the Executive Board is authorised, given Supervisory Board approval, to accept a guarantee for the issuing majority holding company for the repayment of the bond and to grant holders of such option or conversion bonds in GFT Technologies AG in order to satisfy the rights conceded with these bonds. In certain cases the Executive Board shall be authorised, given Supervisory Board approval, to exclude the subscription right of the shareholders to the bonds with option or conversion rights in GFT Technologies AG.

Stock option programmes

The purchasing rights stemming from the stock option programmes "1999/2004" and "2000/2005" established by the Executive Board expired on 6 July 2004 and 1 July 2005 respectively, without having been exercised. No more purchasing rights have existed since 1 July 2005, pursuant to section 192 (2) No. 3 of the German Stock Corporation Act.

Other Provisions

	€(k)
Other provisions of considerable scope
Employee commissions / bonuses	2,422
Outstanding purchase invoices	1,705
Anniversary obligations	981
Holiday obligations	330
Preparation of accounts and audit	240
Annual General Meeting / Annual Report	190
Renovation Stuttgart/Eschborn	162
	6,030
Remaining	530
	6,560

Liabilities

The data on liabilities results from the following table:

				Secured through liens and	Type and form of the
	Remaining term		Total amount	similar rights	securities
	up to 1 year €	more than 5 years €	31/12/2007 €	€
Advance payments on orders	4,083,449.14 (prev. yr.: €(k) 1,007)	0.00 (prev. yr.: €(k) –)	4,083,449.14 (prev. yr.: €(k) 1,007)	0.00 (prev. yr.: €(k) 2,416)
Trade liabilities	19,150,958.09 (prev. yr.: €(k) 10,141)	0.00 (prev. yr.: €(k) –)	19,150,958.09 (prev. yr.: €(k) 10,141)		Customary ownership reservation
Liabilities to affiliates	4,097,078.97 (prev. yr.: €(k) 1,547)	0.00 (prev. yr.: €(k) –)	4,097,078.97 (prev. yr.: €(k) 1,547)
Liabilities to companies with which an investment exists	114,067.11 (prev. yr.: €(k) 34)	0.00 (prev. yr.: €(k) –)	114,067.11 (prev. yr.: €(k) 34)
Other liabilities	780,776.53 (prev. yr.: €(k) 802)	0.00 (prev. yr.: €(k) –)	780,776.53 (prev. yr.: €(k) 802)
- Thereof from taxes	372,191.28 (prev. yr.: €(k) 374)
- Thereof within the scope of social security	130,486.81 (prev. yr.: €(k) 104)
	28,226,329.84 (prev. yr.: €(k) 13,531)	0.00 (prev. yr.: €(k)–)	28,226,329.84 (prev. yr.: €(k) 13,531)

The liabilities to affiliates concern trade liabilities (€(k) 1,824; prev. year: €(k) 1,463) and other liabilities (€(k) 2,273; prev. year: €(k) 84). The liabilities to companies with which there is an investment are the result of deliveries and services (€(k) 114; prev. year: €(k) 34).

Derivative financial instruments

On 31 December 2007, an interest-related derivative financial instrument of the "swap" type, with a nominal volume of €(k) 1,000 and a current value of €(k) -48 (prev. year: €(k) -66) to be attached, came into existence. The current value to be attached was determined using the mark-to-market valuation methods, using the end-of-day mid-market exchange rate. The derivative financial instrument was registered in the balance sheet item "Other provisions" with a book value of €(k) -48, as of 31 December 2007.

2. Income statement

Revenue

	2007 €(k)	2006 €(k)
Breakdown by fields of operation
Freelance agency	85,945	44,100
Consulting and development of software	26,468	24,212
Maintenance proceeds	7,239	8,084
Sale of software products	20	-
Other revenue	4	4
	119,676	76,400
	2007 €(k)	2006 €(k)
Breakdown by regions
Domestic	117,826	72,394
International	1,850	4,006
	119,676	76,400

Other operating income / Other operating expenses

Other operating income of €(k) 479 (prev. year: €(k) 539) includes income that is imputable to a different business year; it essentially pertains to the reversal of provisions (€(k) 431; prev. year: €(k) 412), writing-off liabilities (€(k)–; prev. year: €(k) 127), income from incidental rental expenses ( €(k) 20; prev. year: €(k) –), income from asset disposal (€(k) 2; prev. year: €(k) –) and other out-of-period income (€(k) 26; prev. year: €(k) –).

Other operating expenses include an amount of €(k) 21 (prev. year: €(k) 192) which is to be attributed to another financial year.

Depreciation

The depreciation of financial assets and marketable securities contains depreciations of financial assets of €(k) 500 (prev. year: €(k) –) on the investment book value of GFT Solutions GmbH, Hamburg, pursuant to section 253 (2) No. 3 of the German Commercial Code.

Taxes on income

Taxes on income include tax proceeds from the addition of accrued interest (prev. year: activation) of the deferred asset of corporate tax payment to the amount of €(k) 46 (prev. year: €(k) 679) according to section 37 KStG. Besides, expenses from passivating liabilities from subsequent taxes of the former EK 02 assets to the amount of €(k) 7 (prev. year: €(k) –), a deferred tax proceed of €(k) 115 (prev. year: €(k) 41) and tax proceeds for previous years to the amount of €(k) 4 (prev. year: €(k) –) are included.

Other taxes

Other taxes include out-of-period proceeds to the amount of €(k) – (prev. year: €(k) 95).

Contingencies

GFT AG has a commitment to its subsidiary GFT Solutions GmbH (from 1 February 2008 GFT inboxx GmbH), Hamburg, throughout 2008, to take the necessary measures to prevent the over-indebtedness and insolvency of its subsidiary.

GFT AG has a commitment to its subsidiary GFT Technologies GmbH, Vienna, to fully pay for their debts in the case of insolvency and over-indebtedness, to the extent as this is required to eliminate over-indebtedness and insolvency.

GFT AG has a commitment to its subsidiary emagine gmbh, Eschborn, to financially equip emagine gmbh so that it is able to pay its debts to its customers. Such a commitment is also in place with regard to two clients of the subsidiary GFT Technologies (Switzerland) AG, Wallisellen/Switzerland. These commitments concern the ability to provide services to the clients.

In the previous year, the company was able to dispose of investment portfolios at financial institutions to the amount of €(k) 3,251 only with the express approval of the relevant banks.

Of the assets at the financial institutions, €(k) 250 (previous year: €(k) 565) has been mortgaged to the relevant banks for security purposes.

For the benefit of the associated companies, GFT AG provided debt guarantees to the banks to the amount of €(k) 5,028 (previous year: €(k) 5,028).

Other financial obligations

Obligations stemming from temporary rental, leasing and licence agreements exist, as far as they are not shown in the balance sheet, totalling €(k) 6,323 (prev. year: €(k) 4,552). In addition, obligations from open-ended rental agreements to the amount of €(k) 242 per year (prev. year: €(k) 213 per year) also exist.

Data pursuant to section 160 (1) No. 8 of the German Stock Corporation Act

GFT AG received notification on 19 September 2007 from AvW Group AG, Krumpendorf, Austria, regarding an equity stakeholding, the text of which was as follows:

In addition, the following shareholdings were also disclosed:

GFT AG received notification on 10 September 2007 from AvW Group AG, Krumpendorf, Austria, regarding an equity stakeholding, the text of which was as follows:

Also, in a letter dated 10/09/2007 from AvW Beteiligungsverwaltung GmbH (Vienna, Austria), Dr. Wolfgang Auer von Welsbach (Austria) and the Auer von Welsbach Privatstiftung (Vienna, Austria) were informed that shareholdings of the aforementioned individuals/legal entities in our company by means of shareholdings in AvW Group AG had exceeded the 3% threshold for voting rights on 06/09/2007, totalling 4.112% on this date (number of shares disclosed: 1,082,641). This voting contingent accrues to the respective individuals/legal entities above pursuant to section 22 (1), sentence 1, no. 1 of the Securities Trading Act (WpHG).

In addition, the following shareholdings were also disclosed:

"AvW Beteiligungsverwaltung GmbH (FN 204069 b) holds a 100% stake in AvW Group AG. The Auer von Welsbach Privatstiftung (FN 171457 v) is sole shareholder of AvW Beteiligungsverwaltung GmbH. Dr. Auer von Welsbach, founder of the Auer von Welsbach Privatstiftung, has sole right to amend the foundation deed of the Auer von Welsbach Privatstiftung."

GFT AG received notification on 7 September 2007 from Ratio Asset Management LLP, 52 Cornhill, London, UK, regarding an equity stakeholding, the text of which was as follows:

GFT AG was notified by Ratio Asset Management LLP, 52 Cornhill, London, UK, on 20 August 2007 regarding an equity stakeholding, the text of which was as follows:

"Ratio Asset Management LLP, 52 Cornhill, London, UK, disclosed in a letter dated 20/08/07 in line with section 21 (1) of the Securities Trading Act (WpHG) that its voting equity exceeded the 3% threshold for voting rights as of 17/08/2007, and now totals 817.964). 3.11% (number of votes: 817,964) are is to be assigned, pursuant to section 22 (1), sentence 1 no. 6 of the Securities Trading Act (WpHG)."

GFT AG was informed on 25 June 2007 by the KST Beteiligungs Aktiengesellschaft, Stuttgart, of an equity stakeholding, the text of which was as follows:

"KST Beteiligungs Aktiengesellschaft with its registered office in Stuttgart, Germany, disclosed in a letter dated 25/06/2007 pursuant to section 21 (1) of the Securities Trading Act that its voting stake in GFT Technologies AG fell below the 5% and 3% thresholds as of 20/06/2007, and now totalled 2.53% (equivalent to 666,300 votes)." On 12 January 2007, GFT AG was informed by the Baden-Württembergische Investmentgesellschaft mbH, Stuttgart, of the existence of equity interest, the content of which was made public as follows:

"The Baden-Württembergische Investmentgesellschaft mbH, with headquarters in Stuttgart, has informed GFT via a communication dated 12 January 2007, pursuant to section 21 (1) of the German Securities Trading Act (WpHG), that its percentage of voting rights in GFT Technologies AG, including those represented in all investment funds, exceeded the voting rights threshold of 5% on 6 December 2006 and presently amounts to 5.997%. This disclosure is the result of the merger of SüdKA and BWK and the simultaneous renaming of BWK to BWInvest, as the company is legally known as of 6 December 2006."

On 3 April 2002, GFT AG was informed through Mr. Ulrich Dietz and Mrs. Maria Dietz, of St. Georgen, of the existence of an equity interest, the content of which was made public as follows:

"Mr. Ulrich Dietz, domiciled in St. Georgen, informed us on 3 April 2002, pursuant to section 41 (2) No. 1 of the German Securities Trading Act, that 29.94% of the voting rights in GFT Technologies AG are imputable to him as of 1 April 2002. Mrs. Maria Dietz, domiciled in St. Georgen, informed us on 3 April 2002, pursuant to section 41 (2) No. 1 of the German Securities Trading Act, that 9.67% of the voting rights in GFT Technologies AG are imputable to her as of 1 April 2002."

Issuance of the Statement on the German Corporate Governance Code pursuant to section 161 of the German Stock Corporation Act

Honorarium for the Balance Sheet Auditor

The honorarium expense determined for the balance sheet auditor for the business year 2007 amounted to:

	€(k)

The auditing of financial statements	160
Other ratification or valuation services	58
Other services	14
	232

Board of Directors

Executive Board

Supervisory Board seats:

GFT Iberia Solutions, S.A., Sant Cugat del Vallés, Spain (Chairman)

Sparkasse Schwarzwald-Baar (Advisory Board)

further memberships in comparable controlling bodies:

Deutsche Bank AG, Stuttgart (Advisory Committee)

Mrs. Marika Lulay, Member of the Executive Board (Chief Operating Officer), responsible for the segment Services as well as for the corporate functions Technology and Quality Management

Supervisory Board seats:

GFT Iberia Solutions, S.A., Sant Cugat del Vallés, Spain (Assistant Chairman)

GFT Technologies (Schweiz) AG, Wallisellen, Switzerland (Advisory Board)

GFT UK Limited, London (Member of the Board)

GFT Technologies (India) Private Limited, Trichy, India (Member of the Board)

Dr. Jochen Ruetz, Member of the Executive Board (Chief Financial Officer), responsible for the corporate functions Finance, Controlling, Human Resources, Internal Revision, Legal and Internal IT

Supervisory Board seats: G. Elsinghorst Handelsgesellschaft mbH, Bocholt, Germany GFT Iberia Solutions, S.A., Sant Cugat del Vallés, Spain

Supervisory Board

Mr. Franz Niedermaier, former CEO Oracle Deutschland GmbH, Chairman further Supervisory Board seats: SECARON AG, Munich (Assistant Chairman) Intrafind Software AG, Munich (Chairman)

Dr. Peter Opitz, lawyer, Assistant Chairman

Prof. Dr. Gerhard Barth, Associated Partner at Boyden Interim Management Bersch, Lange & Partner Gesellschaft für Organisationsentwicklung mbH, Bad Homburg, Germany (since 20 October 2007) Partner at IMACOS Truckenmüller • Struck & Partner, Stuttgart (until end 2007)

Dr. Thorsten Demel, Chief Operating Officer, Managing Director Global Technology & Operations, Deutsche Bank AG further Supervisory Board seats:

Pago eTransaction GmbH, Cologne, Germany

Dr. Simon Kischkel, Project Director GFT Technologies AG, St. Georgen (employee)

Mrs. Ingrid Schmidt (until 22 May 2007), Project Manager GFT Technologies AG, St. Georgen (employee)

Mr. Andreas Bernhardt (since 22 May 2007), owner of the individual enterprise Executive Advice, Erdmannshausen; Associated Partner at Boyden Interim Management Bersch, Lange & Partner Gesellschaft für Organisationsentwicklung mbH, Bad Homburg (since 1 January 2008)

Total remuneration for the Executive Board for the 2007 fiscal year amounted to €(k) 1,658 (prev. year: €(k) 1,432). It is exclusively due in the short term as defined by IAS 24.

Total remunerations for the Supervisory Board for the 2007 financial year amounted to €(k) 83 (prev. year: €(k) 83).

Employees

During the financial year 2007, an average of 193 workers (previous year: 206) were employed.

Consolidated Financial Statement

As the parent company, GFT AG prepares a consolidated financial statement for the GFT Group, pursuant to section 315a of the German Commercial Code.

St. Georgen, 3 March 2007

GFT Technologies Aktiengesellschaft Executive Board

Ulrich Dietz Marika Lulay Dr. Jochen Ruetz Executive Board (Chairman) Executive Board Executive Board

Responsibility Statement

To the best of our knowledge, and in accordance with the applicable reporting principles, the financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of GFT Technologies AG, and the Management Report includes a fair review of the development and performance of the business and the position of the company, together with a description of the principal opportunities and risks associated with the expected development of the company.

St. Georgen, 7 March 2008

Ulrich Dietz Marika Lulay Dr. Jochen Ruetz Executive Board (Chairman) Executive Board Executive Board

Auditor's Report

GFT Technologies Aktiengesellschaft, St. Georgen

We have audited the Annual Financial Statements – comprising the balance sheet, profit and loss account and appendix – including the bookkeeping system, the summarised Management Report and Group Management Report for GFT Technologies Aktiengesellschaft, St. Georgen, for the financial year starting 1 January 2007 and ending 31 December 2007. The bookkeeping system as well as the summarised Management Report and Group Management Report according to the German Commercial Code are the responsibility of the company's legal representatives. It is our responsibility to express an opinion, based on our audit, of the Annual Financial Statement including the bookkeeping system, and of the summarised Management Report and Group Management Report.

We conducted our audit of the Annual Financial Statements in accordance with Article 317 HGB (German Commercial Code) and the German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW). These standards require that we plan and perform the audit such that misstatements materially affecting the presentation of net assets, financial position and earnings situation in the annual financial statements in accordance with German principles of proper accounting and in the summarised Management Report and Group Management Report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the company and expectations of possible misstatements are taken into account in the determination of the audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the bookkeeping system, the annual financial statements and the summarised Management Report and Group Management Report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the accounting principles applied and significant estimates made by the legal representatives as well as evaluating the overall presentation of the annual financial statements, the summarised Management Report and Group Management Report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the annual financial statements provide a true and fair view of the company's net asset, financial position and earnings situation, which is in keeping with the legal prescriptions and complies with the principles of proper accounting. The summarised Management Report and Group Management Report agree with the annual financial statements and as a whole provide a suitable view of the company's position and accurately present the opportunities and risks of future development.

Stuttgart, 7 March 2008

Grant Thornton GmbH Wirtschaftsprüfungsgesellschaft

Schulze Osthoff Scheftschik Auditor Auditor

Application Development

Development of software for corporate information systems and technical applications

Application Management

Operation, monitoring, and maintenance of software applications based on service agreements.

Audit

Accounting control, audit of companies, processes, or projects, etc.

Basel II

Basel II includes all recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision in the last few years. Since 1 January 2007, these rules are to be applied to all financial services providers and credit institutions of the European Union according to EU Directives 2006/48/EG and 2006/49/EG

Business Consulting

Due to extensive competence in sales management, in process organisation and technology support GFT advises financial services providers in the structure of business processes, the analysis and design of technological solutions, as well as in implementation of quality management. The service spectrum ranges from the analysis and optimisation of business processes to specification of requirements and functions in accordance with the proven GFT roadmap methodology, from valuation and selection of high-performance and flexible systems to programme management and quality management in implementation projects.

Business Process Management (BPM)

Extended workflow system that enables the automation of business processes. The processes thus become standardised, accelerated and consequently they become more efficient.

Capability Maturity Model Integration (CMMI)

Standardised process model in the software and systems development field to assess and improve the quality ("maturity") of product development processes. CMMI is the new version of the Capability Maturity Model (SW-CMM or CMM) software.

Compliance

Refers to continuous concurrence with codes of conduct, laws and guidelines.

Content Management Systems

Systems for managing and maintaining website content.

Corporate Governance Codex

Catalogue of rules for corporate governance rules based on internationally recognised standards of good and responsible corporate governance.

Cross-Selling Potential

Possibility of expanding the sales success of product / services in one area, on the basis of an existing customer relationship, to other sales channels or service / product areas of a company.

Customer Relationship Management (CRM)

CRM is the designation for the establishment, as well as management and maintenance, of customer relationships.

Directors' Dealings

Persons who take on management responsibilities in a company that issues shares are obligated, in accordance with Article 15a of the German Securities Trading Act, to report their own transactions involving shares of the company that issues stock, to the company that issued the stock and to the Federal Institute within five workdays.

Document Managment

Refers to database-supported management of electronic documents. In Germany the term includes management of documents that for the most part are paper-based documents in electronic systems. In the management of paper documents, on the other hand, reference is made to filing cabinets. The acronym DMS stands for Document Management System and is used in an extended sense as a term for the industry. Currently document management is considered to be an ECM component of the more inclusive term Enterprise Content Management (ECM).

Equity Story

The equity story describes the chances and risks of a stock-listed company. This information enables possible investors to evaluate the company.

FinTech 100 Ranking

Since 2004 the "American Banker" and "Financial Insights" publish their annual "Fortune 500 style ranking", which awards hardware, software and services providers of the financial services sector. FinTech 100 lists companies which generate more than a third of their revenue with financial services providers.

Fixed Value Project

Project for which fixed commitments in terms of price, completion date and scope of services have been made.

Freelance Business

Provision of freelance workers as well as their management.

Freelance Agency

Agency for procurement of freelance workers as well as their management.

Frontend

Graphic user surface that allows users to access, navigate, interact and communicate with stored programmes.

German Entrepreneurial Index (GEX)

New stock index computed and published by the German Stock Exchange as a performance and price index since 3 January 2005. The index reflects the trend in shares of owner-managed German firms. The GEX includes German companies from the Prime Standard of the Frankfurt Stock Exchange that have been listed for a maximum of ten years and that are managed by their owners. The owners must hold at least 25% of the shares.

German Takeover Directive Implementation Act

The German Takeover Directive Implementation Act from 8 July 2006 became effective on 14 July 2006. This Act implements the guideline 2004/25/EG (21 April 2004) of the European Parliament and the European Council referring to tender offers. The aim of the Takeover Directive is the creation of a basic regulation for takeover proceedings. Its purpose is to protect the investors' interests if there is a takeover offer and other gains of control. The definition of minimum standards for handling offers for takeover at aims for creating transparency within the whole Union.

GFT hyparchiv

Archiving and document management system of GFT. It helps organising the entire document pool in the enterprise and can be implemented in heterogenous IT landscapes via interfaces. GFT hyparchiv ensures tamper-proof, long-term archival for ERP, mail systems and web applications.

Goodwill Adjustment

Recording and set-off of goodwill. Goodwill arises when a company's purchase price exceeds the total of the asset and liability items taken over. This excess price is reported in the balance sheet as goodwill and is written down regularly over a certain period.

Human Resources

Personnel department.

inboxx

inboxx is a tool for e-mail archiving. It guarantees the audit compliant archiving of all e-mail communication. Thereby it increases a company's efficiency and saves costs.

Information Technology (IT)

The term extends from data processing in companies via Internet technologies to mobile communication via mobile phones.

Migration

In the IT context migration refers to integration or transfer of old technology to new technology with extensive utilisation of existing technology.

Near-shoring

Outsourcing services to external providers and concurrent outsourcing to other continents.

Offshoring

Outsourcing services to other countries and to other continents e.g. India, China.

Offshore outsourcing

Allocation of services to external providers and concurrent outsourcing to other continents.

Outsourcing

Final allocation of services that previously were created internally to external providers.

Prime Standard

A quality segment introduced on the German stock market in January 2003.

Recruiting Campaign

Campain with the purpose to gain new colleagues.

Resource Management

At GFT it refers to procurement and management of IT specialists.

Resourcing

Resourcing is one of GFT's business lines. It includes the entire procurement process, as well as contract and supplier management of non-strategic IT service providers; from individual freelance IT specialists to complete IT service providers.

Return on Investment (ROI)

Return on investment and capital.

Risk Controlling

Regular monitoring and control of risks and arrangements, including the development of methods as well as the analysis of risks and reporting through a neutral unit.

Risk Management

Regular systematic and continuous identification, analysis, evaluation and control of potential risks which might endanger the financial position or result in the long run.

Roadshow

Presentation of a company, mostly done by a member of the management at different places.

Sarbanes-Oxley Act

The Sarbanes-Oxley Act 2002 (SOX, SarbOx or SOA) is a US law for bindingly governing a company's reporting. It was the answer to company scandals like Enron or Worldcom. Named after sponsors Senator Paul Sarbanes (D-MD) and Representative Michael G. Oxley (R-OH), the Act was approved by the House and by the Senate.

Service Level Agreement (SLA)

Written agreement between a customer and a service provider (frequently as component of a service or maintenance agreement) for regulating business processes, competencies and costs. This includes scope and functionality of services that will be provided, as well as their performance level.

SOA

Service Oriented Architecture: in software architecture or in software design this is an approach for designing distributed systems.

Soft Skills

Soft Skills are a not exactly defined series of human characteristics, abilities and personality tendencies which are necessary or positive for practising a profession – towards colleagues as well as clients. It is related to social competence and social behaviour.

Small Cap Conference

A three-day conference, organised by the DVFA (German Association for Finance Analysis and Asset Management); especially for small stocklisted companies. It offers the possibility – by presentations, round-tables and one-on-one interviews – to present the company, to demonstrate the potential for investment, strategies and finance data in front of investors and intermediaries

TecDax

The TecDAX is a stock index. On 24 March 2003 it replaced the Nemax50, which had got a bad reputation due to insider trading and financial misstatements. Together with the DAX, MDAX and SDAX it belongs to the Prime Standard of the German stock exchange. It tracks the performance of the 30 largest German companies in the technology sector.

Third Party Management

Complete outsourcing of the procurement process for non-strategic suppliers. The GFT subsidiary emagine offers companies administration by freelance IT specialists, as well as small IT service providers, in order to significantly reduce the procurement and process costs of the purchasing company.

Vision Awards

The League of American Communications Professionals LLC headquartered in San Diego, USA, annually awards outstanding annual reports of the previous 12 months.

The GFT Group

Locations

Austria

Vienna

GFT Technologies GmbH Auhofstraße 1/10 1130 Vienna Austria

Brazil

São Paulo GFT Brazil Consultoria Informatica Ltda. Alameda Rio Negro, núm. 585 Ed. Jaçarí, 1 andar, CJ 18 06.454-000 Alphaville – Barueri (SP) Brazil

Sorocaba

GFT Brazil Consultoria Informatica Ltda, Av. Antonio Carlos Comitre, núm. 525 10 andar, CJ Premium N 18.047-520 Sorocaba (SP) Brazil

France

Paris

GFT Technologies SARL GFT Technologies AG Immeuble Blaise Pascal 12, rue Blaise Pascal 92200 Neuilly sur Seine France T +33 1 4192-5660 F +33 1 4192-5679

Germany

Berlin

GFT Technologies AG GFT Resource Management GmbH GFT Flexwork GmbH Hackescher Markt 2-3 10178 Berlin Germany T +49 30 2091 651-0 F +49 30 2091 651-19

Bonn

GFT Technologies AG Joseph-Schumpeter-Allee 1 53227 Bonn Germany T +49 228 2071-0 F +49 228 2071-3508

Dortmund

GFT inboxx GmbH Joseph-von-Fraunhofer-Str. 20 44227 Dortmund Germany T +49 231 9700-0 F +49 231 9700-748

Duesseldorf

GFT Resource Management GmbH Elisabethstraße 44-46 40217 Duesseldorf Germany T +49 211 863-2660 F +49 211 863-6611

Eschborn/Frankfurt

GFT Technologies AG GFT Resource Management GmbH GFT inboxx GmbH GFT Flexwork GmbH emagine gmbh Mergenthalerallee 55 65760 Eschborn Germany T +49 6196 969-0 F +49 6196 969-1001

Hamburg

GFT inboxx GmbH GFT Technologies AG GFT Resource Managment GmbH Brooktorkai 1 20457 Hamburg Germany T +49 40 35550-0 F +49 40 35550-270

Munich

GFT Resource Management GmbH GFT Flexwork GmbH Bavariaring 9 80336 Munich Germany T +49 89 340819-0 F +49 89 340819-20

St. Georgen (Schwarzwald)

GFT Technologies AG GFT inboxx GmbH Leopoldstraße 1 78112 St. Georgen Germany T +49 7724 9411-0 F +49 7724 9411-94

Stuttgart

GFT Technologies AG GFT Resource Management GmbH GFT inboxx GmbH Filderhauptstraße 142 70599 Stuttgart Germany T +49 711 62042-0 F +49 711 62042-101

Spain

Barcelona GFT Iberia Solutions, S.A. emagine Servicios de Consultoría e Informática, S.A. Parc d' Activitats Econòmiques Can Sant Joan Av. de la Generalitat, s/n 08174 Sant Cugat del Vallès Barcelona Spain T +34 93 5659-100 F +34 93 5659-128

Madrid

GFT Iberia Solutions S.A. emagine Servicios de Consultoría e Informática, S.A. C/Caleruega, 81, 5° A 28033 Madrid Spain T +34 91 781-4880 F +34 91 781-4899

Valencia

GFT Iberia Solutions S.A. emagine Servicios de Consultoría e Informática, S.A. Av. Barón de Cárcer, 48 Planta 2 46001 Valencia Spain T +34 96 310-2400 F +34 96 310-2410

Zaragoza

GFT Iberia Solutions S.A. emagine Servicios de Consultoría e Informática, S.A. C/Manifestación 38 Plantas 1-2-3 50003 Zaragoza Spain T +34 97 67636-00 F +34 97 67636-10

Switzerland

Basel

GFT Technologies (Schweiz) AG Holbeinstrasse 16 4051 Basel Switzerland T +41 61 20565 65 F +41 61 20565 66

Wallisellen/Zurich

GFT Technologies (Schweiz) AG Neugutstrasse 60 8304 Wallisellen Switzerland T +41 44 87816-00 F +41 44 87816-01

UK

London GFT UK Limited 40 Lime Street London EC3M 5BY UK T +44 20 7397-4220 F +44 20 7626-1232

USA

New York GFT New York 14 Wall Street. 20th floor New York, NY 10005 USA T +1 212 618-1230 F +1 212618-1705

Five-year Summary

Financial Figures according to IFRS in € m

	01/01/-31/12/ 2007	01/01/-31/12/ 2006	01/01/-31/12/ 2005	01/01/-31/12/ 2004	01/01/-31/12/ 2003

Revenue	247.068	173.678	120.944	125.527	138.085
Earnings before interest, tax, deprecia tion and amortisation	13.098	7.310	2.111	1.603	-1.548
Total depreciation	1.416	1.163	1.262	4.209	12.353
Amortisation of goodwill	0	0	0	2.389	8.669
Earnings before interest and taxes (EBIT)	11.683	6.147	0.849	-2.605	-13.901
Earnings before taxes (EBT)	12.362	6.665	1.579	-2.195	-13.428
Net income/net loss as of 31/12	8.594	5.109	1.064	-3.866	-17.711
IAS earnings per share, in €	0.33	0.19	0.04	-0.14	-0.67
Non-current assets	30.893	30.751	24.11	25.038	22.08
Cash, cash equivalents and securities	28.702	23.891	28.648	30.638	36.028
Other current assets	52.337	37.553	25.6	20,152	25.462
Balance sheet totals	111.932	92.195	78.358	75.828	83.57
Equity ratio, in %	52	53.54	57	57	56
Number of permanent employees at the end of the year	1,087	1,057	981	1,039	1,058

Financial Calendar/Imprint

Dates

27 March 2008
8 May 2008
11 June 2008
7 August 2008
6 November 2008

Further Information

Write to us or call us if you have any questions. Our Investor Relations Team will be happy to answer them for you. Or visit our website at www.gft.com/ir. There you can find further information on our company and the GFT share.

GFT Technologies AG

GFT Technologies AG Investor Relations Andrea Wlcek Filderhauptstr. 142 70599 Stuttgart Germany

T +49 711 62042-440 F +49 711 62042-301 [email protected]

The Annual Report is also available in German. The online versions of the Annual Reports in German and English are available on www.gft.com/ir.

Imprint
Concept:	GFT Technologies AG, St. Georgen, www.gft.com
Text:	GFT Technologies AG, St. Georgen, www.gft.com
	Candid communications, Augsburg, www.candid-com.com
	Creative concept and design: IR-One AG & Co. KG, Hamburg, www.ir-1.com
Photography:	Rüdiger Nehmzow, Berlin, www.nehmzow.de

GFT Technologies AG Filderhauptstrasse 142 70599 Stuttgart

T +49 711 62042-0 F +49 711 62042-101

[email protected] www.gft.com

Germany

AI assistant

GFT Technologies SE — Annual Report 2007

182_10-k_2008-04-23_1ac96938-2fea-4971-b5fc-65bb2e050374.pdf

Perspectives

Perspectives Summary

Divisions

Contents

1-23

2 Letter to the Shareholders

18 Processes

24-41

24 Services

30 Resourcing

36 Software

42-148

52 Financial Information

GFT Group Summary

Our Divisions Summary

Letter to the Shareholders

Ladies and Gentlemen,

Trust

Why it is worthwhile investing in GFT

Outstandingly positioned

International presence

Convincing financial figures

Sustainable growth

Solid financing

Stable share ownership structure

Interesting growth potential

Transparent and active dialogue with the capital market

Information on the GFT share

Development of the GFT share indexed (Basis 2 January 2007 = 100%)

Selfconfidence

14 Values

What connects us

Constant values create our self-image and trust

Rocketing into the 21st century

Finding a common language

The journey is the destination

Creating substantial values

Company culture as success factor

Efficiency

20 Processes

How we are working at becoming even more successful

Searching for the optimum: standards set the yardstick

Measuring in order to manage

Transparency and reliability

Competition promotes peak performance

Flexibility and networking open up new perspectives

Our locations at a glance

Reliability

26 Services

Trends in the IT Services market

Globalisation

The next generation of outsourcing

Latest technologies

Services Business Division

In focus: Financial service providers

Distinction for attaining client satisfaction

Global delivery model

Functionally effective global GFT network

Growth prospects for the future

Our most important capital: the employees

Flexibility

32 Resourcing

Trends in the IT Resourcing market

Flexible work models

Technical knowledge alone is not enough

Third-party management

International resourcing: strong variations in compliance requirements

Resourcing Business Division

Advantages for our clients – flexibility and expert knowledge

Flexible employment as an opportunity

Third-party management with emagine

Certified quality

A look into the future

Structure

38 Software

Trends in the archiving market

Quantity of electronic information on the increase

GFT Technologies SE Annual Report 2007