GRENKELEASING AG GROUP

FINANCIAL REPORT FOR FISCAL YEAR 2008

KEY FIGURES OF GRENKELEASING AG GROUP AND THE GRENKE GROUP

	Jan. 1 to Dec. 31, 2008	Change in %	Jan. 1 to Dec. 31, 2007	Unit
Key figures of GRENKE Group incl. franchise partners
New business of GRENKE Group	600,975	18.0	509,171	EURk
– of which: Germany	320,113	6.0	301,786	EURk
– of which: International	280,862	35.4	207,385	EURk
New business of franchise partners (2008 ex Poland and UK)	93,399	-3.0	96,306	EURk
– of which: Factoring business (Germany)	58,105	19.1	48,799	EURk
Key figures of GRENKE Group leasing business excl. factoring
New business GRENKE Group leasing business	542,870	17.9	460,372	EURk
Contribution margin 2 of new business	86,159	32.3	65,120	EURk
Number of new contracts	69,824	16.4	60,000	Units
Share of IT products in the lease portfolio	85	-3.4	87	percent
Share of corporate customers in the lease portfolio	100	0.0	100	percent
Mean acquisition value	7.8	1.3	7.7	EURk
Mean term of contract	46	2.2	45	Months
Volume of leased assets	1,687	11.6	1,512	EURm
Number of current contracts	222,032	10.0	201,854	Units
GRENKELASING AG Group, consolidated figures
Net interest income from leasing business	68,044	9.1	62,389	EURk
Settlement of claims	-20,110	17.3	-17,139	EURk
Profit from insurance business	20,151	20.4	16,733	EURk
Profit from new business	24,327	19.1	20,418	EURk
Profit from disposal (income exceeding the calculated residual value)	2,266	19.7	1,892	EURk
Result from currency translation difference	-2,911	-3,730.3	-76	EURk
Other operating income	1,326	13.3	1,170	EURk
Costs of new contracts	15,568	21.3	12,834	EURk
Costs of current contracts	5,453	14.1	4,781	EURk
Project costs and basic distribution costs	12,076	12,6	10,723	EURk
Management costs	13,232	31.2	10,089	EURk
Other costs	2,140	23.3	1,736	EURk
Profit / loss from operating business (EBIT)	44,624	-1.3	45,224	EURk
Other interest result	47	-112.0	-393	EURk
Income/ Expenses from market valuation of financial instruments	0	-100.0	-16	EURk
EBT (Earnings before taxes)	44,671	-0.3	44,815	EURk
Net profit for the period	33,143	3.2	32,125	EURk
Earnings per share	2.42	3.0	2.35	EUR
Dividend (2008 planned distribution)	0.60	0.0	0.60	EUR
Embedded Value of the lease portfolio (incl. Equity before taxes)	356	11.3	320	EURm
Embedded Value of the lease portfolio (incl. Equity after taxes)	324	10.6	293	EURm
Cost-Income-Ratio	53.5	13.1	47.3	percent
Return on equity (ROE) after taxes	13.5	-3.6	14.2	percent
Average number of employees	482	17.3	411	persons

GROUP MANAGEMENT REPORT FOR FISCAL YEAR 2008	3
General	3
Business Profile	3
Fiscal Year 2008	7
Economic Conditions and Industry Performance	7
Significant Developments During the Fiscal Year	8
Report on the Results of Operations	11
Report on the Financial Position and Net Assets	14
Overall Statement on the Financial Situation of the Group	15
Additional Information	15
Sales and Customer Structure	15
Structure of the Supplier Base	16
Research and Development	16
Personnel	16
Changes in the Executive Bodies	17
Report on the Remuneration of Executive Bodies	17
Shares Held and Share Transactions by the Executive Bodies	19
Disclosures Pursuant to Sec. 315 (4) HGB	20
Corporate Governance	21
Risk Management Report	22
Events of Particular Significance After the Close of the Fiscal Year	28
Report on Forecasts and the Outlook for the Group	28
CONSOLIDATED FINANCIAL STATEMENTS FOR FISCAL YEAR 2008	31
Income Statement for Fiscal Year 2008	31
Balance Sheet as of December 31, 2008	32
Cash Flow Statement for Fiscal Year 2008	34
Statement of Changes in Equity for Fiscal Year 2007 and 2008	36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR FISCAL YEAR 2008	38
AUDITORS' REPORT	106
DECLARATION PURSUANT TO SEC. 264 (2) SENTENCE 3 AND SEC. 289 (1) SENTENCE 5 HGB	107
2009 CALENDAR AND CONTACT PERSONS	108

GROUP MANAGEMENT REPORT FOR FISCAL YEAR 2008

GENERAL

In what follows the GRENKELEASING AG Group presents its management report for the fiscal year ended December 31, 2008. The company goes back to a sole proprietorship which was established in 1978. GRENKELEASING AG was founded in 1997 and had its IPO on the Frankfurt Stock Exchange in April 2000. GRENKELEASING AG (hereinafter referred to as the "AG") and Grenke Investitionen Verwaltungs KGaA (hereinafter referred to as the "KGaA") are two separate entities in a unitary enterprise, the AG being the operating company and the KGaA the holding company. Both entities were originally founded to bundle the activities of the various companies controlled by Wolfgang Grenke.

The GRENKELEASING AG Group is represented abroad with its own subsidiaries, some of which have already established branch offices in their respective countries. We have also established a franchise model in order to tap into foreign markets and expand with new products. We do not hold a stake in the legally independent franchise companies, but we do have the option of acquiring them at pre-defined terms, generally after four to six years. Under its franchise agreements, GRENKELEASING AG provides its expertise, its operational infrastructure, a number of services and the right to use its name. GRENKELEASING AG usually refinances leases by purchasing the lease receivables of franchisees or through sale and leaseback agreements, which means that the GRENKELEASING AG Group generates a portion of its new business by refinancing the franchisee's new business. .

The following management report presents the development of the GRENKELEASING AG Group except where the GRENKE Group including franchise partners or the franchise model are explicitly mentioned. Additional information on the development of the franchise partners is presented in the relevant sections of the 2008 Annual Report outside of this management report.

BUSINESS PROFILE

Business Model

GRENKELEASING was born out of the business idea of standardising lease financing for small-ticket IT products using IT-based processes that allow them to be offered at economical conditions. By doing this, we carved out a new market which did not exist before GRENKELEASING was formed and which, even today, is not covered by the large majority of other lease providers, particularly the IT product manufacturers themselves and even banks.

We finance IT products from a net value of EUR 500. In fiscal year 2008, the mean value of the leases concluded in the GRENKE Group, including by franchise partners, was EUR 7,775, compared with EUR 7,673 in the prior year. Such small individual positions can only be financed economically by a company whose business processes are aimed at very low costs per contract. Accordingly, GRENKELEASING's business model focuses clearly on maximising its efficiency. Its unique selling propositions are standardisation, speed and automation. 64 percent – as many as 83 percent in Germany – of all the GRENKE Group's financing inquiries, including those received by franchise partners, are made using our online tool. All of the Group's lease contracts are managed centrally at our head office in Baden-Baden, Germany. The efficiency of our business model defines one of the most significant barriers to entry into our market.

Our internally developed IT-based scoring procedure, which is constantly being upgraded, ensures well calculated default rates. We attach great importance to our independence and therefore do not rely on any specific IT product manufacturers and have diversified our refinancing among various banks. We also take care to maintain a broadly diversified portfolio of lessees.

We sell our lease financing through independent specialist reseller partners who offer their customers various financing options at the points of sale. A decisive factor for choosing GRENKELEASING is a competitive price. We achieve this through our cost-efficient business process and wide range of refinancing options.

A simple contract structure and process speed are also key criteria for specialist dealers that weigh in our favour. We help our dealers to conclude their transactions quickly by making prompt contract and payment commitments, which we can usually deliver within 10 minutes. As the only lease provider in the small-ticket segment, we provide comprehensive individual and personal customer service through our local sales staff. Our full range of support in all areas of leasing allows us to assist our specialist reseller partners in achieving success.

We market our business model in two ways: first, we are growing in many European countries through our own subsidiaries and branch offices. Second, we are also expanding into new countries with our franchise model. In the year under review we concluded contracts with franchisees in Finland, Portugal and Slovakia.

The franchise solution allows us to recruit specialist personnel who show the entrepreneurial spirit required to establish a new local company. GRENKELEASING gives the franchisees access to our know-how, our proven management tools and efficient back-office support. They may also use the "GRENKE" and "GRENKELEASING" brand names. Because the franchisees are entitled to use the brand names from the very start, they will already be established on the market by the time the franchisee can be bought out by GRENKEEASING. Our review in connection with the refinancing of the lease agreements ensures that we are thoroughly familiar with the receivables portfolio of the franchisee at all times, even during the term of the franchise agreement.

Presence across Europe

In Germany, the GRENKELEASING Group is represented in 20 cities. In addition to our existing subsidiaries with nine branch offices in France, three branches each in Switzerland and Italy, as well as two in Austria, we are represented by wholly-owned subsidiaries in the Czech Republic, Spain (Barcelona), the Netherlands, Denmark, Sweden, Ireland, the United Kingdom, Poland and Belgium. GRENKELEASING is further represented by its franchise system in Norway, Hungary, Romania, Spain (Madrid), Portugal, Slovakia and in Finland. In addition, we offer car leasing and factoring in Germany through our franchise partners.

The Group's Growth Strategy

The GRENKELEASING AG Group is positioned for growth. Our time-tested growth strategy focuses on two lines of development: new countries and new products. Because our traditional business in small-ticket IT leasing opens up new possibilities for fast expansion into new countries and regions, our growth over the past few years has focused on new countries and the systematic expansion of our presence in Europe. We have now developed significant sources for growth.

We take up growth opportunities via additional new products – even outside the conventional realm of IT – wherever the market prospects support this. In doing so, we however are not departing from our strategic targets. We intend to grow on the strength of new products, particularly in our established markets, where we are operating with two thrusts. This applies particularly to the Germany market, which we know inside and out and where we have broadbased coverage. Once we have rolled out, tested and enhanced our new products in Germany, they will be launched in our established foreign markets. Currently, as part of our franchise model, we are growing particularly by purchasing receivables of small amounts (factoring) – a new approach to the market – and through car leasing.

As a matter of principle, are striving to set up a large network as quickly as possible so as to make customer access as cost-effective and efficient as possible through economies of scale. The number of financing inquiries is therefore a key performance indicator in our business. During the fiscal year, the GRENKE Group and its franchise partners recorded 145,384 leasing inquiries (prior year: 118,407), 81,256 of which were international (prior year: 56,589). These inquiries generated 69,824 new leases (prior year: 60,000), 37,162 of which were international (prior year: 27,481). This resulted in a 16.4 percent increase in the number of new agreements concluded compared to the prior year for the GRENKE Group.

The GRENKELEASING AG Group recorded 137,322 leasing inquiries (prior year: 106,891), 73,774 of which were international (prior year: 45,539). This generated 66,757 new leases (prior year: 54,819), 34,671 of which were international (prior year: 22,836).

Development and Structure of Services

In the small-ticket market, we finance an extensive portfolio of products, particularly in the area of information technology. It focuses on IT equipment, printers, photocopiers and telecommunications products, as well as software. Here we offer our specialist resellers and customers a wide variety of financing contracts. Furthermore, our franchise partners offer factoring and car leasing.

The structure of the product portfolio has not changed significantly over the past two years. It is determined by the type and extent of products used in office environments by small and medium-sized companies in German and Europe and is not actively shaped by the Group. The same applies for the structure of the industry.

Today, information technology is used in all offices in every industry. Accordingly, our focus prevents the creation of risk concentrations in individual industries or regions. Our focus on small-ticket items also contributes to the diversification of our receivables portfolio.

Corporate Management

Equity Ratio and Return on Equity Are Key Targets

The focus of corporate management is on achieving a sustainably high rate of return on equity while maintaining a solid equity base. The goal for the equity ratio and the after-tax return on equity is at least 16 percent in each case. We believe that both of these figures are important to ensure a good rating for our Company. They also represent the pillars of an attractive valuation for our stock.

It is important to us that the Group's profitability remain stable. We have demonstrated this on the basis of a track record that has been successful for decades. With our sophisticated and proven scoring model, we have demonstrated that we are able to calculate the risks to our business very precisely. This allows us to manage the default rates of our portfolio and the risk premiums of our financing to achieve a positive risk-return trade-off. Particularly in phases when investors are increasingly risk-aware, we consider the combination of a high rate of return after taxes with a low risk profile to be attractive.

The equity ratio was 16.9 percent in fiscal year 2008, which continued to be above our medium-term target of 16 percent. The divergences occurring on the international capital markets as a result of the financial market crisis, which in turn have generally made the availability of financing significantly more difficult, have not had any negative impact on the refinancing sources of the GRENKELEASING Group.

The net return on equity was 13.5 percent in fiscal year 2008, below our target of 16 percent. Factors which contributed to this were, firstly, the slight overcapitalisation in relation to our targeted quota, and secondly, unusually high expenses form currency translation difference in fiscal year 2008. Adjusted for these two effects, we would once again have come close to our return target. We are targeting a higher return, regardless of any possible downturns in the interim due to the financial market crisis and its spread to the real economy. In our experience, the loss ratio rises during a recession, which impacts net profit negatively. However, according to our experience so far the rise in the loss ratios remains within reasonable limits. Moreover, our current loss rate remains significantly below our calculated rate, which is managed on the basis of the contribution margin 2 (CM2)*. Because losses are mainly due to contracting parties' inability to pay, they are limited effectively and handled in a risk-adequate manner by means of our scoring tool, which has proven itself over many years of use.

A further increase in the return on equity seems to be fundamentally indicated over the next few years because the number of young companies now in the build up phase of their lifecycle will decrease. In turn, the proportion of those subsidiaries entering a period of very strong growth in their business volume following the end of their capital investment phase while seeing sharply rising profitability is expected to grow.

Our Broad Portfolio of Refinancing Instruments Allows Flexible Liquidity Management

Day-to-day business is geared to ensuring the Group's continuous solvency. To do this, GRENKELEASING AG reserves enough funds at all times to refinance its own lease receivables as well as those of its subsidiaries. The AG manages the Group's cash for the group companies in a cash pool.

We have dealt with financing partners such as Commerzbank AG and Stadtsparkasse Baden-Baden for many years. We access asset-backed commercial paper (ABCP) programs through special purpose entities which are managed by WestLB (Compass) and SEB AG (Kebnekaise). On September 9, 2008 DZ Bank AG (CORAL) joined as financing partner for these programmes with a programme volume of EUR 150 million, replacing the previously represented Deutsche Bank AG (Rheingold) with a volume of EUR 175 million. The ABCP programme (Rheingold) organised by Deutsche Bank AG, in place since December 1999, was terminated on September 26, 2008 with the repurchase of all lease agreements still refinanced by them. West LB, SEB AG, DZ Bank, Deutsche Bank and Commerzbank are our major partners for revolving credit facilities.

We have also issued promissory note loans, debentures, and bonds under a debt issuance program (DIP). The DIP is supported by Deutsche Bank, WestLB, and HSBC. A new financing instrument was used for the first time in 2006, when we placed an ABS bond.

The GRENKELEASING AG Group considers it a duty to maintain full transparency, particularly when it comes to financing. Primarily in the interest of a comprehensible, competitive rating, we have restructured every newly acquired refinancing instrument in such a way that they must be accounted for in full from the very start. Off-balance structures were deliberately not used. We will continue this policy to ensure complete transparency of the Group's obligations at all times in the future.

^* Contribution margin 2 (CM2): The contribution margin 2 is made up of the present value of operating income of a lease contract less risk and variable administrative costs.

The scope of the ABCP programmes, totalling EUR 512 million, was still far from being utilised, despite an ongoing rise in new business that extended into fiscal year 2008 (as at December 31, 2008: 79.42 percent). The programs are structured as revolving, i.e. expiring refinancing can be replaced by new arrangements. Further funds can be raised by issuing promissory note loans under the DIP. Combined with the strong equity base of the GRENKELEASING AG Group, this gives us sufficient financial scope, even amid the currently difficult capital market situation.

Foreign expansion is being financed in part locally and in the local currency. During fiscal year 2008, we entered into a framework agreement with a volume of PLN 74 million (roughly EUR 22 million) to refinance our new Polish subsidiary locally and increased the framework agreement to finance our Swiss subsidiary from CHF 50 million to CHF 60 million (roughly EUR 38 million). Following the increase in the refinancing funds available to the Group by EUR 223 million in the first half of 2008, a further three-year promissory note loan in the amount of EUR 21 million was successfully concluded in the third quarter.

FISCAL YEAR 2008

Economic Conditions and Industry Performance

Economy as a Whole

Data available internationally at the end of fiscal year 2008 showed that the crisis on the financial markets has spilled over into other sectors of the global economy. During the second half of 2008, the world slid into a deep recession, the scope of which – according to numerous observers and international organisations – is likely to dwarf all economic downturns since the end of World War II. The particular severity of the downturn is due primarily to the worldwide convergence of trends in industrialised, emerging and developing nations.

No mitigating effects from economic counter-trends are present, a fact that particularly impacts global trade. Lasting divergences on the international financial markets, worldwide deflation of asset prices and the resulting persistent crisis of confidence among banks are also having an adverse effect. Inherent particularly in the latter is the risk of a global credit squeeze that threatens not only the funding of capital expenditure, but also the day-to-day business operations of numerous companies.

During the second half of 2008, the governments and central banks of industrialised countries instituted coordinated counter-measures, the scope of which is unprecedented. The priority of these campaigns, which drew huge cash injections from the central banks, was to stabilise the international financial markets and prevent a collapse of the money markets. As a result, the financial market crisis spilled over into what we know as the real economy, giving rise to an increased need for action to support the economy and rescue key industries. Since then, governments across the globe have attempted to limit recession in the real economy with spending programmes of historically unprecedented scope.

During the first half of 2008, the German economy saw comparatively healthy growth; this also applies to the euro zone and the countries in the EU. However, over the course of the second half of the year, clear signs of the downturn emerged, particularly in foreign trade and in key areas of manufacturing such as the automotive industry and its suppliers – all the way back to steel-making. On the other hand, based on a higher employment rate and increased disposable income, private consumption remained solid through the Christmas shopping season.

Industry Performance

There is very little meaningful industry data on the development of that sector of the leasing market which is relevant to us. One of the reasons for this is the extreme fragmentation of the market – in Germany alone, there are a good 2,000 providers – and the fact that individual submarkets showed distinctly different industry trends. In addition, small-ticket IT leasing is not a market segment of its own and is targeted by only a handful of companies.

Thus the competitiveness of the market varies more if marginal participants whose focus is on other areas of leasing join or leave the market rather than if the volume of small-ticket IT leasing itself fluctuates. Abroad, there are usually fewer statistics available on the market as a whole. This applies in particular to those countries where lease financing is only just becoming widespread, i.e. where there is particularly strong growth potential.

Altogether, all statistics, studies and surveys indicate that the penetration of IT equipment in the office markets will continue to grow over the medium term – albeit with fluctuations – and that leasing as a method of financing will enjoy higher than proportionate growth. This applies in particular to small and medium-sized enterprises, our target market, whereas lease financing is already much more prevalent in large companies.

The financial market crisis could create additional opportunities for small-ticket IT leasing because companies are using leasing to a significantly increasing degree, due to the fact that refinancing by banks is becoming more difficult or more expensive, or because they are hoping to protect themselves against risks themselves and protect their cash flow and lines of credit at banks by maintaining the same level of refinancing as before. Offsetting these additional opportunities is the risk that companies will temporarily reduce their investment in IT infrastructure and therefore require smaller leasing volumes.

Significant Developments During The Financial Year

A Steep Growth Path

We successfully continued our growth strategy in fiscal year 2008 as well. Particularly gratifying was the fact that with an 18 percent rise to EUR 601 million, following EUR 509.2 million, we exceeded our planned target for new business in the GRENKE Group including franchise partners. We had targeted growth of more than 15 percent in this category. The 32.3 percent increase in the contribution margin 2 from the Group's new business to EUR 86.2 million from EUR 65.1 million attests not only to the dynamism of our growth but also, in a striking manner, its profitability.

The GRENKELEASING Group grew even more strongly during the fiscal year. New business rose by 23.0 percent, from EUR 412.8 million to EUR 507.6 million; and the contribution margin 2 increased by 34 percent, from EUR 60.0 million to EUR 80.4 million. Also adjusted for the first-time consolidation of the two former franchise companies in the UK and Poland, the Group's new business grew at a high rate of 22.1 percent, and the contribution margin 2 at a rate of 32.3 percent.

The GRENKELEASING Group and our franchise partners thus withstood the jitters on the finance markets and the increasingly gloomy global economic trends. In 2008, our business model did not merely prove to be crisis-proof – we even managed to expand our growth. In particular, it became apparent that our refinancing sources are adequate even in difficult times and that we are able to continue increasing our financial strength.

Our non-German European leasing activities are clear growth drivers. Almost across the board, they are showing high growth rates without negatively impacting profitability. CM2-margins* are increasing every where, and sharply for the most part.

^* CM2- margin for new business: The CM2-margin is defined as the contribution margin 2 as a percentage of the new business.

In France, by far our largest European foreign market, new business increased by 22.1 percent. Very recently, in January of 2009, another "cell division" of the Paris III branch took place with the opening of what is now the ninth French location. The contribution margin 2 increased from 14.2 percent to 16.8 percent. In Italy we continued to expand at a very fast pace in 2008. The volume of new business almost doubled, and the CM2-margin rose from 13.3 percent to 15.2 percent. Genoa, the second location to open in the prior year, is showing extremely pleasing progress.

The increased commitment of the Group to the United Kingdom, following the acquisition of the former franchise company Grenke Leasing Ltd., Guildford, is now bearing fruit. The volume of new business considerably increased, the CM2-margin also increased sharply. Our Polish subsidiary, also new, is prospering. There, new business increased 16.0 percent, and the CM2-margin rose from 10.9 percent to 11.7 percent. Among the countries not yet reported separately in our corporate communications, the subsidiary in the Netherlands passed the EUR 10 million mark for new business for the first time, and as a result will be recognised separately starting with fiscal year 2008. With a rise of 63.4 percent to EUR 11.6 million and a CM2-margin that increased to almost 19 percent, we are very satisfied with growth in the Netherlands.

Financial Markets Under Strain Due to Subprime Crisis

During fiscal year 2008, the international financial markets were impacted by massive distortions on the money and bond markets, a drop in asset prices of historic proportions and, from time to time, liquidity shortfalls, particularly on the money markets, which threatened to destabilise the system. Repeatedly, the lack of liquidity could only be supplied through globally coordinated supportive measures by the central banks, and that in a hitherto unprecedented scope. However, the crisis of confidence in the interbank market, and thus the squeeze in refinancing funds – which sometimes ran to extremes – continued at a high level through the end of 2008. Particularly in the lending industry, investor sentiment toward certain collateralised instruments, even those with first-class ratings, continued its slide toward the zero point at the end of 2008.

However, this hardly affected the GRENKELEASING AG Group's refinancing in 2008. We had already assessed the interest rate spreads, which remained historically low well into 2007, as unsustainable, and thus used them to secure refinancing volumes at favourable conditions. This enabled us not to us the market for larger refinancing projects as early as summer of 2007 and for 2008 as a whole. We restricted ourselves opportunistically to smaller tranches intended to test the receptiveness of the market, most recently in the third quarter with a three-year promissory note loan. All placements were carried out quickly and at attractive conditions. Overall we placed medium-term promissory notes with a volume of EUR 134 million, even during the extremely difficult financial market year of 2008.

As part of the massive spread increases of the past 18 months, an interest rate level that factors in default rates hardly likely even in the event of a serious global economic crisis has been established in the lending business. For the future, we are assuming that these exaggerations, and thus interest rate spreads, will gradually decrease mainly because central banks and governments worldwide have supplied historically high liquidity volumes and default guarantees. Even so, spreads are not likely even to come close to the lows of the first half of 2007 again, even if investors regain their receptiveness. The risk propensity of market players will remain limited, and they will demand "realistic" risk premiums, i.e. higher than those in 2007.

However, this does not necessarily imply that our interest margin will narrow. On the contrary, due to the higher refinancing costs we anticipate that small-ticket leasing will become less attractive to marginal participants whose IT infrastructure is not as sophisticated as ours. Thus they may either position themselves more aggressively than in the past or even withdraw from the market altogether. This will allow higher refinancing costs to be more easily passed on, while only slightly altering the net achievable interest margin.

GRENKELEASING Ratings Confirmed

On November 18, 2008, the Standard and Poor's rating agency once again confirmed its counterparty ratings for GRENKELEASING. Since May 2003, the long-term rating has remained at BBB+ with a stable outlook, and the shortterm rating has held steady at A-2, thus maintaining our solid standing on the capital markets.

Furthermore, in August 2008 Standard & Poor's upgraded the overall rating of our six-year ABS bond of August 4, 2006. The "AAA" rating of 85 percent of the total volume amounting to EUR 250 million was confirmed and received Moody's top rating "AAA" as well, while the subsequent tranches were upgraded from "A" to "AAA" and from "BBB" to "A", respectively.

Financial Regulation Adopted for the Leasing and Factoring Industries

As of January 1, 2009, leasing and factoring companies are considered as financial service institutions in terms of Sec. 1 (1a) 2 Numbers 9 and 10 of the German Banking Act [Kreditwesengesetz (KWG)]. This was decided by the Bundestag (lower house of the German Federal Parliament) with the agreement of the Bundesrat under the 2009 Annual Tax Act on December 19, 2008. The companies are thus on the one hand included in the so-called commercial trade tax banking privilege under Sec. 19 of the Trade Tax Implementation Regulations [Gewerbesteuer-Durchführungsverordnung (GewStDV)], and on the other hand they are subject to regulation by the German Federal Office for Supervision of Financial Services (BaFin) and by Deutsche Bundesbank as of January 1, 2009.

The inclusion in Sec. 19 of the Trade Tax Implementation Regulations means that the competitive disadvantage for leasing and factoring companies in comparison with banks, which resulted from the 2008 Annual Tax Act, is withdrawn.

The application of Sec. 19 of the Trade Tax Implementation Regulations is subject to the requirement that the leasing company demonstrably undertakes financial services exclusively in terms of Sec. 1 (1a) 2 Number 10 of the German Banking Act. These are the conclusion of finance leases and the administration of leasing companies. To date, this so-called "exclusivity rule" has not yet been exhaustively clarified. The Federal Ministry of Finance has announced a relevant text to clarify any questions of interpretation.

Together with advisors, we have reviewed the available facts and circumstances and equipment intensively and have come to the conclusion that we are fulfilling the requirements of Sec.19 of the Trade Tax Implementation Regulations. Since we have filed the notification necessary for the application of Sec. 19 of the Trade Tax Implementation Regulations Trade Tax Implementation Regulations under Sec. 64 (2) of the German Banking Act with BaFin in January 2009 as due, we have used Sec. 19 of the TradeTrade Tax Implementation Regulations Tax Implementation Regulations in the calculation of trade income tax provision for the German Group companies GRENKELEASING AG and GRENKE Investitionen Verwaltungs KGaA for 2008.

The future supervision of companies in the industry by BaFin and Bundesbank will result in corresponding supervisory obligations, which will however be less extensive than with banks. These obligations include above all:

` Notification of loans (1 million euro and higher)
` Selected notification obligations to the supervisory authorities
` Specific organisational duties
` Presentation of annual financial statements and an audit report.
` Obligation to gain permission to operate leasing and factoring companies
` Specialist suitability/reliability of the managers
` Reliability of holders of significant investments
` Permission for special audits
` Contribution to the cost of supervision
` Application of the regulation on financial reporting by banks and financial service institutions

The Board of Directors has agreed on the measures required to fulfil these obligations. These will be applied in the near future, if they have not already been applied. Because the detailed formulation of the regulations has not yet appeared, the extent of and work involved to comply with the new requirements cannot yet be evaluated conclusively. However, we consider the new regulations to be very positive overall for the GRENKELEASING AG Group. The withdrawal of additional charges in trade tax treatment of refinancing constitutes an important elimination of a competitive disadvantage as compared to banks. At the same time, our expenses from the additional regulatory obligations will be moderate, since as a listed company we are already in a position to be able to fulfil the strict requirements of the international capital market regulations.

Report on the Results of Operations

The GRENKELEASING AG Group's new business saw strong growth of 23.0 percent from EUR 412.8 million to EUR 507.6 million in the year under review. Also adjusted for the first-time consolidation of the two former franchise companies in the UK and Poland, the Group's new business grew at a high rate of 22.1 percent. We again succeeded in increasing the profitability of the new business. In the Group, contribution margin 2 widened strongly by 34.1 percent and by 32.3 percent when adjusted for the first-time consolidations. We thus achieved a contribution margin 2 of 15.8 percent for new business in 2008, as compared to 14.5 percent in the previous year. Without the first-time consolidations, the margin would even have been slightly better.

With profits of EUR 33.1 million in fiscal year 2008, we achieved profits at the upper end of our stated targeted range of EUR 30.6 million to EUR 33.0 million and have managed - in a year marked by massive upheavals in the markets – to exceed the previous year's profits of EUR 32.1 million. This confirms the robustness of our business model.

The consistently high new business of the GRENKELEASING AG Group was reflected during fiscal year 2008 with a positive development in operating revenue, which increased significantly in all positions and exceeded the rise in related expenses. The increase in refinancing costs which resulted from the financial market crisis was thus passed on to the market, and net interest from the leasing business was increased by 9.1 percent as compared to 2007, to EUR 68.0 million.

The rise in the refinancing margin can be illustrated by the development of iTraxx (Senior Financial) since 2007. Whilst the refinancing margins shown in this index had an annual average of 18 basis points in 2007, in 2008 the average value rose to 79 basis points, corresponding to a 400 percent increase. The increase in settlement of claims was within the range of our expectations. At 1.2 percent , the loss rate remained below what we had calculated. Despite the higher expenses in this area, we increased net interest income after settlement of claims by 5.9 percent to EUR 47.9 million.

The success of our contribution margin 2 management, including results contributions from the insurance business and from profit from disposal, is shown in the 12.3 percent increase in operating income to EUR 94.7 million. On the cost side, our investments are shown in the expansion of the Group's international presence. As a service provider, this is of course reflected particularly in a significant increase in staff costs and in higher sales and administrative costs. The development of these items is in line with our expectations.

However, other operating expenses were higher than planned. Here we saw an increase from EUR 0.8 million in the previous year to EUR 4.1 million in the year under review. This includes expenses form currency translation difference of EUR 2.9 million, compared to EUR 0.1 million in 2007. The reason for this was not individual developments, but rather considerable depreciation of currencies relevant to us, particularly in the fourth quarter of 2008.

We generally hedge open currency positions as soon as the financing volume reaches around EUR 1.0 million; however, in the course of the companies' growth there continue to remain open tranches within this minimum limit. So far it has not been economically appropriate to lower this threshold. Depending on the development of currency exchange markets, we may review this in the future.

Pre-tax profits of EUR 44.7 million were achieved in the year under review, as compared to EUR 44.8 million in the previous year. With a reduced tax rate of 25.8 percent (28.3 percent in 2007), profits increased from EUR 32.1 million to EUR 33.1 million. Here GRENKELEASING applied Sec. 19 of the Trade Tax Implementation Regulations for the period 2008 (see Note 2.19). In comparison to non-application of Sec. 19, this resulted in a EUR 607k lower tax expense for the year under review. Furthermore, deferred taxes amounting to EUR 616k were reversed as a result of applying the commercial tax bank privilege.

Report on the Development of the Segments

The primary segments that the GRENKELEASING AG Group operates in are its geographical regions. Regional segmentation distinguishes between lessees based in Germany, France, Switzerland, Italy or in another country. The "other countries" segment comprises Austria, the Czech Republic, Spain (Barcelona), the Netherlands, Denmark, Sweden, Belgium, Ireland, Poland and the UK. The UK and Poland are shown here for the first time after the takeover of the former franchise companies in the first quarter of 2008. Due to the strong growth of new business, Italy is shown as a regional segment for the first time in this report. The previous year's figures have been adjusted accordingly. The comments on the development of individual positions in the Group which appeared in the previous section naturally affect the segments in the same way. The following comments therefore focus on particular factors in individual countries.

In Germany we are the clear market leader for small ticket IT leasing. For this reason, we are not focussing here on expanding our market share further here. Rather we are concentrating on acquiring high-margin business. Our new business thus is driven largely by the development of small ticket IT investments by small and medium-sized German enterprises and according to the share of investments where leasing is used. Financing selected other products outside of the IT area currently only plays a minor role.

Accordingly, new business in Germany has been somewhat restrained overall in recent years, and in the first nine months of 2008 new business also remained at the level of the previous year. However, in the fourth quarter there was a significant revival, so that for fiscal year 2008 as a whole, visible growth was achieved. Simultaneously, we succeeded in increasing CM2-margin for new business from 14.4 percent in the previous year to 14.9 percent in 2008.

Despite the generally restrained growth already mentioned, revenue from the Germany segment was also increased in the past fiscal year. This again demonstrates the success of our contribution margin 2 management, which takes all revenue components into account. The segment result for the year under review remained slightly under that of the previous year, in particular because the very rapid foreign expansion in 2008 also created additional expenses for Group headquarters and so for the Germany segment.

France, our most important market outside Germany, once again developed excellently in 2008. New business rose by 22.1 percent to EUR 125.5 million. The contribution margin 2 likewise increased from 14.2 percent in the previous year to 16.8 percent. Segment revenue also rose by 22.2 percent to EUR 39.2 million. The segment result was of a similar magnitude. France is thus among our mature markets which contribute to the Group's income with a high level of profitability, but which continues to display attractive potential for further growth. The opening of a third branch in Paris in 2009 should enable the positive development in France to continue.

In Switzerland we also have a very high market share in small ticket IT leasing. The employment market there, with a very low unemployment rate and varied, attractive employment opportunities in the financial services sector, leads to significant fluctuations at our subsidiary there, which limit the growth of our new business. For the whole fiscal year 2008, there was a decrease of 3.6 percent to EUR 16.2 million. The fourth quarter in particular remained below expectations, whereas in the first nine months significant growth had still been achieved.

Nonetheless, we remain successful in our focus on revenues in Switzerland – for the whole of 2008, the contribution margin 2 of the new business increased to 21.4 percent following 20.9 percent in the previous year. The segment result was significantly below that of the previous year, but the segment margin of 30.2 percent still represents a very satisfactory level.

Italy remained our fastest-growing foreign market in 2008, with an 81.7 percent growth in new business to EUR 30.2 million and an improvement in the contribution margin 2 from 13.3 percent to 15.2 percent. The segment revenue increased even more strongly – by 92.8 percent to EUR 6.4 million – and the segment result appeared on the radar screen for the first time, with EUR 0.8 million following EUR 0.1 million in the previous year. The strong potential for growth in Italy led us to open a third branch in Bologna in 2008.

Out of the smaller activities in other European countries which are summarised in the group "Other Foreign Countries", the Netherlands' development in particular has been very satisfactory. Its new business increased from EUR 7.1 million in the previous year to EUR 11.6 million, meaning that for the first time it passed the EUR 10 million threshold beyond which we report on single countries separately in our corporate communications.

Our new subsidiaries in the UK and Poland also achieved good growth rates: by 56.8 percent to EUR 19.7 million and by 16.0 percent to EUR 13.8 million respectively. Of the remaining countries in this group, Austria in particular is developing very positively. With a new branch in Salzburg as of the end of fiscal year 2008, here too we prepared the way for further growth. In terms of the positive development of the contribution margin 2 for new business in these countries, the Netherlands in particular stands out, with a rise from 16.2 percent in the previous year to 19.2 percent in the year under review.

In the revenue from the "Other Foreign Countries" segment, the consistent growth of the countries in this group was reflected in an increase by 78.9 percent to EUR 25.5 million. This is not reflected in the 2008 segment results which decreased from EUR 2.5 million in the previous year to EUR 0.2 million. Here the expenses from currency translation difference, as described in the previous section, were evident.

Report on the Financial Position and Net Assets

The GRENKELEASING AG Group continues to have a balance sheet of high quality. In the context of high growth, the equity ratio decreased slightly to 16.9 percent following 17.9 percent in the previous year, although it still remains significantly above over our target of 16 percent. The EUR 194 million increase in the total assets results primarily from the higher lease receivables. Among the positive developments, what should in particular be underlined is the increase in cash on hand and balances with banks from EUR 53.4 million on the balance sheet date of the previous year to EUR 77.0 million. The high quality of the GRENKELEASING AG Group's balance sheet contributes significantly to our investment grade rating and thus our access to various refinancing instruments.

The Group uses various instruments and staggers their maturities across several periods. This allows GRENKELEAS-ING to react flexibly to changes on refinancing markets. The following table shows the expected cash outflows as of December 31, 2008 due to contractual obligations.

		Payments due (in EURk)
	Total	within 1 year	1–3 years	4–5 years	after 5 years
Financial liabilities	1,153,520	506,530	591,215	53,067	2,708
Lease and rental agreements	13,406	3,975	5,098	2,545	1,788
Purchase commitments*	78,402	78,402	0	0	0
Commitments from pending transactions**	5,434	5,434	0	0	0
Total contractual agreements	1,250,762	594,341	596,313	55,612	4,496

* Legally binding commitment to purchase goods and services, and trade payables

** The present values of all future cash flows are shown here. The Group considers this to be the appropriate representation for cash flows where payment is outstanding, if these positions had to be closed. Derivative holdings are shown in the due daily category, since this representation shows the earliest possible outflow of liquidity. The actual duration of a contract may extend to a much longer period.

Overall Statement on the Financial Situation of the Group

As of the date of completion of this management report, the Board of Directors of GRENKELEASING AG believes the GRENKELEASING Group is in healthy and stable condition, both in terms of business and finances. The growth milestones of fiscal year 2008 – particularly those during the second half, when the global economy and thus also the countries and regions relevant for our business increasingly slid into heavily recessive trends – have furnished impressive proof of the resilience of our business model. Moreover, the above-average growth in our foreign markets is proof positive of the Group's competitive strength on the European level.

The current condition of the refinancing markets makes forecasts about their future liquidity difficult. In order to reduce risk, we are therefore managing the Group closely in line with current market trends. The development of new business is mainly determined by the availability of funds for refinancing. However, on the basis of the present conditions in the capital market and the funds currently available to the Group, we belief that in 2009 beyond the refinancing of the lease book it should be possible to generate growth of around 10 percent for the business in the GRENKE Group including franchise partners, and of around 5 percent for the GRENKELEASING AG Group.

ADDITIONAL INFORMATION

Sales and Customer Structure

Our business focuses on the small-ticket IT leasing market. Selling directly to new customers does not make sense from a business perspective due to the small volume of a single lease agreement. For this reason, we practise what are known as "vendor programmes". We enter into most of our lease agreements with end customers after they are referred by manufacturers and particularly by our specialist reseller partners.

Intensive personal reseller support provided by our own staff in local sales offices or by our franchisees distinguishes us from our competitors. Our sales staff and franchisees advise and train the specialist reseller partners extensively on all aspects of lease financing. They thus contribute actively to their success and additionally ensure that leasing gains the highest possible share of their new business.

Toward this end, we regularly introduce new services for resellers. They cover areas such as sales support or improvements in process efficiency and play a significant role in increasing their loyalty to our company. Expanding our quality management system to improve customer service orientation is also part of our service programme. Finally, we offer our entire range of services online at our websites, www.grenkeleasing.de and www.weblease-europe.com.

Our key account management caters to IT product manufacturers. Also with these sales partners we rely on the excellent process quality and efficiency to strengthen customer loyalty. We support selected corporate customers as part of our direct sales model. We review our receivables balances quarterly for opportunities to offer framework financing to suitable customers. However, we maintain an overview of possible risk concentrations. Even among these lessees, no customer reaches total liabilities exceeding 2 percent of group equity. The customer structure thus remains broadbased.

Structure of the Supplier Base

The GRENKELEASING AG Group offers manufacturer-independent lease financing. The structure of our supplier portfolio results primarily from the structure of the demand of German and European small and medium-sized companies for IT products of various manufacturers. It varies independently of our influence according to the IT products that they offer, manufacturer's product policies and customers' usage patterns. As a result, the supplier structure of the GRENKE-LEASING AG Group also has a broad base.

Moreover, competition between manufacturers in their end markets means that the products forming the basis of our leases represent the state of the art. We thus avoid the risk of technology becoming obsolete by making our leases full amortisation agreements that rule out any risk of resale. Our resale business is operated independently of our leasing business.

Research and Development

As a financial services company, the GRENKELEASING AG Group offers lease financing for IT products. Accordingly, we do not conduct any basic research and development. However, the Company's core competence is the provision of efficient leasing logistics through the use of centralised, highly standardised IT processes. We utilise leading market products which have been expanded using applications individually programmed for our needs. We also develop online platforms for our franchisees that cover the special requirements of their market environments, whatever they may be. These areas demand a limited scope of IT development services.

Personnel

The GRENKLEASING AG Group pursued and increased its growth in the past fiscal year. Accordingly, the average number of employees (excluding the Board of Directors) rose from 411 in 2007 to 482.

The group rate of turnover in fiscal year 2008 was 12.04 percent, compared with 11.7 percent in the prior year. The rate was strongly influenced by high turnover during the start-up phase of our operations abroad; turnover in Germany was significantly lower. Fluctuation primarily occurred amongst non-management specialist staff and parttime workers, whereas turnover among middle and top managers was below one percent in Germany and abroad.

We attach great importance to our employees' professional development and thus offer them extensive training and development opportunity. One young person commenced their training at GRENKELEASING AG in fiscal year 2008. In addition to traditional training in the areas of administration and financing, where we currently have seven trainees, we also regularly support new training fields, such as currently in dialog marketing, which has four trainees.

Additionally, seven employees are currently completing three- or three and a half-year commercial computer science and international business management degree programmes which combine work and study at Loerrach University of Cooperative Education. Both GRENKELEASING AG and our subsidiaries in Switzerland and France provide this opportunity to young people, and we took on four new students during the fiscal year. We have been working with Loerrach since 2004.

Since 2007, we have also been collaborating with the universities of cooperative education in Karlsruhe (in the commercial computer science degree programme), where two students are currently enrolled and one student was added during the current fiscal year, and Mannheim (in the accounting and controlling degree programme), where we are already represented with one student and will enrol a further one during the current fiscal year.

Changes in the Executive Bodies

The Supervisory Board mandates of Prof. Ernst-Moritz Lipp and Mr. Gerhard E. Witt expired at the end of the Annual General Meeting on May 6, 2008. Prof. Ernst-Moritz Lipp and Mr. Gerhard E. Witt were re-elected with a large majority by the same Annual General Meeting as proposed by the Supervisory Board. They were elected for the period until the end of the Annual General Meeting that resolves the official approval of the actions of the Supervisory Board for fiscal year 2012.

No changes occurred in the Board of Directors during the fiscal year.

Report on the Remuneration of Executive Bodies

EUR	Grenke	Dr. Hack	Kindermann	Konprecht	Kostrewa	Total 2008	Total 2007
Gross salary	328,398.64	266,714.64	127,937.68	172,238.70	127,879.20	1,023,168.86	1,020,373.99
Performance bonus	154,054.00	129,713.37	56,561.11	75,414.75	56,561.11	472,304.34	326,110.53
Bonus	47,500	40,850.00	17,812.50	23,750.00	17,812.50	147,725.00	14,088.30
Pensions	0.00	21,000.00	0.00	0.00	0.00	21,000.00	21,000.00
Total	529,952.64	458,278.01	202,311.29	271,403.45	202,252.81	1,664,198.20	1,381,572.82

Remuneration of the Board of Directors

Total remuneration for the Board of Directors amounted to EUR 1,664k in the past fiscal year (FY 2007: EUR 1,382k). Remuneration for members of the Board of Directors includes fixed and variable components. The criteria for the variable remuneration component are defined in advance annually based on the development of EBT (earnings before taxes) and the development of key performance indicators of a balanced scorecard. The achievement of the EBT growth target is measured at the end of each year and the BSC criteria are measured at the end of each quarter.

The main criteria contained in the BSC correspond to the key performance indicators for the long-term development of the Group, such as number of lease agreements and new business. This approach aims to enhance the value of the Company in the long term. In fiscal year 2008 and in the prior year, the members of the Board of Directors did not receive any GRENKELEASING AG stock options – in accordance with the Stock Option Program II. An annual pension premium of EUR 21k is paid to a company provident fund for Dr. Hack.

On March 12, 2007, the Chairman of the Supervisory Board of GRENKELEASING AG concluded a phantom stock agreement for fiscal years 2007 to 2009 with, and for the benefit of, Dr. Hack. Under this agreement, Dr. Hack receives entitlement to payment equal to the increase in value of 30,000 shares in GRENKELEASING AG based on a defined underlying share price. The share price is the unweighted arithmetic mean of the Xetra closing prices on all trading days from December 1 to December 23 of the respective prior year. The maximum payment arising from this agreement is limited to EUR 600,000 for the period of three years. Under the program, Dr. Hack is obligated to invest the respective net amount paid plus a personal contribution of 25 percent of that amount in GRENKELEASING AG shares.

The underlying share price was EUR 22.18 for 2008 and has been set at EUR 19.28 for 2009. For 2008, the unweighted arithmetic mean of the Xetra closing prices was less than the defined level, with the result that the phantom stocks granted as of December 31, 2008 evidenced no value. The plan was treated as a cash settlement plan. Because the thresholds were not achieved, there was no outflow due from the options programmes for 2007, nor will there be for 2008. Recognition in the income statement is therefore not necessary. The Company has taken out directors' and officers' liability insurance for its executive bodies and top managers under which the insured party must pay a fixed deductible of EUR 3,000 per claim. Members of the Board of Directors are therefore also covered by the insurance. There is no possibility to split the premium individually.

No further benefits have been agreed with any member of the Board of Directors in connection with the termination of their appointment. Moreover, no member of the Board of Directors received benefits or promises from third parties relating to his position as a member of the Board of Directors in the past fiscal year.

Name	Function	Basic salary 2008	Audit Committee	Personnel Committee	Variable Remuneration	Travel Expenses	Total (fixed+ variable+ travel) 2008	Total (fixed+ variable+ travel) 2007
EUR
Prof. Dr. Lipp	Chairman	9,000.00	600.00	900.00	5,332.50	414.00	16,246.50	18,700.56
Münch	Member of the Supervisory Board (SB)	6,000.00	600.00	–	3,713.00	1,759.59	12,072.59	10,124.50
Dr. Nass	Member of the SB	6,000.00	–	–	3,949.50	1,533.08	11,482.58	10,519.17
Staudt	Member of the SB	6,000.00	–	600.00	3,713.00	0.00	10,313.00	10,724.50
Dr. Sträter	Member of the SB	6,000.00	–	–	3,375.00	696.60	10,071.60	10,161.00
Witt	Deputy Chairman	6,000.00	900.00	600.00	4,219.00	415.00	12,134.00	12,112.25
Total		39,000.00	2,100.00	2,100.00	24,302.00	4,818.27	72,320.27	72,341.98

Supervisory Board Compensation

In fiscal year 2008, the members of the Supervisory Board received a total of EUR ´72.3k (FY 2007: EUR 72.3k including travel expenses) in remuneration for their work. The remuneration contains EUR 2,702 not relating to the period (FY 2007: EUR 3,973). The remuneration for each individual member can be found in the previous table.

The members of the Supervisory Board receive fixed remuneration of EUR 6,000 for each full year of their membership, the chairman receives EUR 9,000, as well as EUR 600 for membership in each committee and EUR 900 for each committee chaired. On top of this, the members of the Supervisory Board receive a variable component if a dividend in excess of EUR 0.20 per share is paid to shareholders.

In this case, the fixed remuneration is increased by one quarter of the percentage by which the dividend per share exceeds the amount of EUR 0.20, but in doing so the variable remuneration component does not exceed 50 percent of the fixed remuneration. If membership of the Supervisory Board is not for a full fiscal year, the fixed remuneration, and thus the basis for variable remuneration, as well as the remuneration for members or chairpersons of committees is reduced accordingly.

In addition, GRENKELEASING's directors' and officers' liability insurance, which was described in the previous chapter "Remuneration of the Board of Directors", also covers members of the Supervisory Board. The Company also reimburses the members of the Supervisory Board for their cash expenses and the VAT insofar as they are entitled to invoice the tax separately and actually do so.

Shares Held and Share Transactions by the Executive Bodies

The directors' holdings as of December 31, 2008 are detailed in the table below. The members of the Board of Directors currently have no options on shares in GRENKELEASING AG. Members of the Supervisory Board were not granted stock options and there is no plan to do so.

	Shares as of Dec. 31, 2008(No.)		Shares as of Dec. 31, 2008(No.)
Members of the Board of Directors		Members of the Supervisory Board
Wolfgang Grenke	4,916,619	Prof. Dr. Ernst-Moritz Lipp	21,000
Dr. Uwe Hack	5,000	Dieter Münch	75
Mark Kindermann	52,053	Erwin Staudt	1,000
Thomas Konprecht	330,730
Michael Kostrewa	27,500
Total	5,331,902	Total	22,075

Executive obliged to report	Function	Type of dealing	No. of shares	Date of transaction	Price per share (EUR)	Transaction volume (EUR)
Wolfgang Grenke	Chairman of the Board of Directors	Purchase	20,000	03.07.2008	21.44	428,800.00
Wolfgang Grenke	Chairman of the Board of Directors	Purchase	8,000	12.02.2008	19.68	157,440.00
Wolfgang Grenke	Chairman of the Board of Directors	Purchase	8,000	11.02.2008	19.14	153,120.00
Wolfgang Grenke	Chairman of the Board of Directors	Purchase	9,000	08.02.2008	19.48	175,320.00
Dr. Uwe Hack	Deputy Chairman of the Board of Directors	Purchase	5,000	01.02.2008	21.50	107,500.00
Michael Kostrewa	Member of the Board of Directors	Sale	20,000	01.02.2008	20.36	407,200.00

The members of the executive bodies carried out the following directors' dealings in GRENKELEASING AG shares in fiscal year 2008.

Disclosures Pursuant to Sec. 315 (4) HGB

GRENKELEASING AG shares are admitted to trading on the Frankfurt Stock Exchange in the Prime Standard, the segment of the regulated market with additional post-admission obligations. The Company's subscribed capital totals EUR 17,491,421.86 and is divided into 13,684,099 no-par value bearer shares with a theoretical nominal value of EUR 1.28. All shares carry the same rights – there are no restrictions on voting rights, preferred shares or special control rights. The Board of Directors is not aware of any other restrictions agreed between shareholders relating to voting rights or the transfer of shares.

The Chairman of the Board of Directors of GRENKELEASING AG, Wolfgang Grenke, held 4,916,619 shares in the Company as of December 31, 2008, which represents 35.93 percent of the capital stock. 40.48 percent of the capital stock, which represents 5,539,283 shares, is held by Mr. and Mrs. Grenke and their dependent son.

The articles of incorporation do not provide for any regulations which deviate from the statutory regulations on the appointment of members of the Board of Directors by the Supervisory Board. These stipulate that members of the Board of Directors are appointed for a maximum of five years. Re-appointment is permitted. The Board of Directors of GRENKELEASING AG has at least two members. The Supervisory Board determines the number of members of the Board of Directors. It decides on their appointment, the revocation of their appointment and on the conclusion, amendment and termination of contracts of employment to be made with them. The Supervisory Board can nominate a chairman of the Board of Directors and a deputy chairman of the Board of Directors as well as deputy members of the Board of Directors.

In accordance with legal requirements, amendments to the articles of incorporation must be adopted by the Annual General Meeting. Except as otherwise required by legal regulations, resolutions are approved by the Annual General Meeting by a simple majority of votes cast and, if legislation requires a majority of capital in addition to a majority of votes, by a simple majority of the capital stock represented. The Supervisory Board is authorised to decide on amendments to the articles of incorporation which only relate to their wording. In addition, the Supervisory Board is authorised to adapt the wording of Art. 4 of the articles or incorporation governing the amount and division of the capital stock, according to the utilisation of the approved capital or the end of the authorisation period.

In accordance with the resolution adopted on May 9, 2006 by the Annual General Meeting, the Board of Directors is authorised, with the approval of the Supervisory Board, to increase the Company's capital stock once or several times by April 30, 2010 by up to a nominal amount of EUR 8,500,000 by issuing new no-par bearer shares in return for cash and/or non-cash contributions. The shareholders are to be granted a subscription right.

However, in the case of cash capital increases the Board of Directors is authorised, with the approval of the Supervisory Board, to partially or completely exclude the shareholders' right to subscribe for up to ten percent of the capital stock of the Company if the issue price of the new shares is not significantly lower than the market price. In addition, the shareholders' right to subscribe in the event of non-cash capital increases due to the purchase of entities, parts of entities or equity investments can be partially or completely excluded.

By resolution adopted by the Annual General Meeting on May 9, 2006, the capital stock of the Company was contingently increased by up to 3,000,000 new no-par bearer shares or up to EUR 3,834,690 (contingent capital III). The conditional capital serves to cover options or convertible bonds with a total nominal value of up to EUR 150,000,000 and a maximum term of ten years which the Board of Directors can issue, with the approval of the Supervisory Board, on one or more occasions until May 8, 2011. Existing shareholders' subscription rights may be excluded. Since authorisation was granted, no options or convertible bonds have been issued.

There are no compensation agreements with members of the Board of Directors or employees for the event of a takeover bid. No further disclosures are made pursuant to GAS 15a.27 ("change of control" clause) as they could be of a considerable disadvantage to the parent company.

By resolution of the Annual General Meeting on May 6, 2008, the Company has been authorised again, pursuant to Section 71 (1) No. 8 of the German Stock Corporation Act, to acquire treasury shares of up to a total of 10 percent of the capital stock existing at the time of the resolution. The authorisation may be exercised in whole or in part, on one or more occasions, by the Company itself or by third parties assigned by the Company. The shares may be redeemed without a resolution of approval by the Annual General Meeting. The authorisation is in force until November 5, 2009. No shares have been acquired to date.

Corporate Governance

Companies listed in Germany that have their registered office in Germany have a duty under the German Transparency and Disclosure Act ["Transparenz- und Publizitätsgesetz": TransPuG] to disclose the compliance of their corporate governance with the recommendations of the German Corporate Governance Code and to explain any departures.

Good corporate governance, which manifests itself in value-based, transparent company management and control, is an integral part of GRENKELEASING AG – i.e. of the Board of Directors, Supervisory Board and executive employees. The Company agrees very strongly with the principles of the German Corporate Governance Code and sees their implementation as an important contribution to building trust with all current and future stakeholders, with customers, shareholders, lenders, employees, business partners and the general public.

In the past few years, corporate governance has also enjoyed increased weight in the assessment and valuation of listed companies. It thus contributes significantly to the increase in the value of the Company and to securing and extending access to equity markets.

Thus by tradition, GRENKELEASING AG fully complies with all recommendations of the Corporate Governance Code. This was attested by the Board of Directors and the Supervisory Board of the Company on April 7, 2008 in their declaration of compliance with the version of the Code dated June 14, 2007.

The Company's current declaration of compliance is reproduced in the "Corporate Governance" chapter of the 2008 Annual Report and on its website (ww.grenke.de) in German and in English. The German Corporate Governance Code can also be viewed there.

RISK MANAGEMENT REPORT

The risk management system at GRENKELEASING AG has the function of systematically identifying, assessing, documenting and disclosing risks to the parent company and subsidiaries. It is designed to enable employees and management to address risks responsibly and make the most of the opportunities that present themselves.

The risk management system introduced in 2003 is run via a risk management tool on the GRENKELEASING AG Group intranet and has been developed further since that time. The function of the risk management system and the result of measures taken are reviewed by the internal audit department. The internal audit department reports directly to the Board of Directors.

Risk Policy/Strategy

Our risk policy aims to measure and actively manage risks which arise from operating activities. We are able to measure the credit risk of our business very exactly so that we can determine and factor in adequate risk premiums and thus achieve a positive risk/return trade-off. We also use derivatives to hedge interest rate risk. Our risk strategy aims to diversify our receivables widely, something which is already an integral part of our business model. Our focus on small-ticket leasing means there is no risk concentration, for example, in our lease portfolio or in new business. This applies to both customers and industries. Nor are we dependent on manufacturers. We have diversified our refinancing among various banks. Our international growth strategy also leads to an even wider diversification of our receivables.

A key element of our risk management system is extensive quality management, which also affords the additional benefit of ensuring a high level of service quality and satisfaction among our customers and business partners. Consistently and continuously improving the extensive quality management system we have introduced is part of our corporate philosophy. Above all, this includes our scoring process to evaluate credit risk arising from lease agreements, the evaluation of our reseller relationships based on counterparty risks, the documentation of our business processes and the development of IT programs to meet our specific needs in administering contractual arrangements with our lessees and franchise partners. In addition, the correctness of financing (avoidance of double financing, actual acquisition of lease assets) is reviewed and documented by external advisors every six months.

Credit Risk

Since 1994, we have assessed the creditworthiness of our lessees using a scoring system. The quality of this system has been proven by the level of loss experienced since its implementation. This applies to our established domestic business as well as to new markets abroad which we have been penetrating systematically. A review is performed annually based on the actual loss figures using automated database reports which contain both publicly available data and internally generated historical data. The scoring system is being enhanced on an ongoing basis by specialist staff. A further key element of risk mitigation is the fact that no single lessee constitutes more than a one percent share of new business in one fiscal year.

Even in the past few years, which evidenced very low actual loss rates, we continued to factor the average loss rate of the last recession into our contribution margin 2 control system. Moreover, the Group is structured in such a way that it will continue to cover the operating costs of the company even if the loss rate increases significantly beyond this point. Not least on the basis of our clearly widened CM2-margin, we thus assess the credit risks to be manageable, even in consideration of the serious recession forecast by experts for 2009.

Reseller Risk

By diversifying our reseller relationships, we take into account the risk of the differing average credit risk of their customer portfolios. We evaluate our reseller relationships on a quarterly basis based on the credit risk of the agreements arranged by them. There has been no change in the fact that no reseller generates more than four percent of new business.

Cash Flow Risk

By cash flow risks, we mean the risk of non-payment of lease instalments by lessees or interest and redemption payments by the franchisee. In the case of lessees, such non-payments always arise directly from a deterioration in the creditworthiness of the lessees after conclusion of the contract.

In the case of franchisees, non-payment by their customers can indirectly result in the franchisees being unable to make their interest and redemption payments. These risks could be hedged using credit derivatives or traditional credit insurance strategies. Such instruments have not been used to date due to GRENKELEASING AG's many years of experience and proven performance in this area of risk management.

This also generally applies to the financing of franchisees, as receivables from their customers are usually assigned as hedge for the loan within the scope of franchisee financing.

Process Risk

TÜV Management Service GmbH issued our Company with DIN EN ISO 9001:1994 certification in 1998. Our quality management system was tested and certified in 2008 by Technical Control Association officers from TÜV Management Service GmbH in accordance with the new standard DIN EN ISO 9001:2000. In addition to the German branches, the subsidiaries in Austria, France, the Netherlands, Switzerland and Spain as well as Grenke Investitionen Verwaltungs KGaA, which is in charge of asset sales, have also been certified.

The Board of Directors regularly assesses the effectiveness of the management system. Any necessary corrective measures are made promptly. The current audit report confirms that GRENKELEASING AG and its subsidiaries have an exemplary management system, operated to a high standard. According to the report, the requirements of ISO 9001:2000 are met in full.

Any original lease contracts which have not been scanned in are kept in fireproof cabinets/safes. Thus, even in the event of damage to property (caused by fire, etc.), sufficient precautions have been taken. Contract data is stored and updated in our IT system, mainly using specially developed programs. Original contract data is stored both in branch offices as well as in the central contract management division in Baden-Baden, Germany.

Automatic backup programs and power interruption facilities safeguard data maintenance. IT systems play an important role in the processing and management of our leasing business. As such, IT organisation and processes are subject to regular internal audits.

Contractual Risk

Contractual risk relates to risks to net assets and earnings as a result of open residual values. Contractual risk is limited by generally concluding full payout leases and never entering into maintenance or warranty risks.

Sales Risk

Ongoing marketing measures serve to mitigate sales risk. These include:

` Gathering information
` Product development
` Procedural improvements
` Developing sales channels

During the history of our Company, which spans more than thirty years, we have gathered extensive experience in developing and managing our sales channels, which has not only enabled us to achieve lasting high growth. We now view this experience and the company reputation we have built up as an important market entry barrier for potential competitors.

We thus consider our position to be good, even amid the financial market crisis. Temporarily declining sales opportunities due to drops in IT expenditure by small and medium-sized companies cannot be ruled out. However, we expect that this will be a short-lived trend – if it represents a trend at all – because support for IT processes is essential to smaller companies. At this point, any decrease in productivity due to obsolete technology could threaten the existence of such a company.

Moreover, we believe that the proportion of IT expenditure devoted to leasing in our target market will continue to increase, because banks are currently being much more restrictive in granting refinancing. This trend is likely to persist in 2009.

Country Risk

Any risks that could arise from the different legal systems in each country are identified prior to market entry with the help of local legal and tax advisors and are taken into consideration in the lease contracts. As far as is necessary, the business model is adjusted accordingly.

Financial Market Risk

Fluctuations in market prices on the financial markets can have a significant effect on cash flow and net profit. Changes in interest rate markets and in certain currencies affect the GRENKELEASING AG Group. We actively manage these risks as part of our constant risk management and monitoring of interest rate and currency positions. GREN-KELEASING only uses derivative financial instruments to manage the risk positions of underlying contracts.

In addition to assessing risk-prone, market-sensitive positions such as a floating rate note or a receivable in a currency other than the euro, we also stress sensitivity and elasticity in handling financial market risk. We aim to limit the sensitivity of net profit to the volatility of market prices. This means aiming for the lowest possible dependency of net profit on the development of the interest rate and currency markets while maintaining a good balance between the cost and benefit of hedge relationships. The following parameters are used for risk analysis:

` A concurrent, parallel increase or decrease in the value of the euro compared with all foreign currencies by ten percent
` A parallel shift in term structures of interest rates by 100 bps points (1 percentage point)

The potential economic effects identified in the analyses are estimates. They are based on an artificial market condition and in particular on the assumption that all other conditions will remain the same. This means that the shift in the term structure of interest rates is viewed independently of any related effects on other interest rate-induced market developments. The actual effects on the Group's income statement can significantly differ from this as a result of how the market really develops.

Interest Rate Risk

The interest rate risk for GRENKELEASING primarily results from floating-rate debentures, ABCP programs and the ABS bond. We use derivatives to hedge interest rate risk. Further information on these risks is presented in the "Detailed Risk Review" chapter in the notes to the consolidated financial statements.

Sensitivity to financial performance is key to the identification of an open risk position, which leads to corresponding protection using derivative instruments. This means that overall we endeavour to achieve net interest income which demonstrates minimal sensitivity to interest rates. According to estimates from the sensitivity analysis, a parallel shift in the term structure of interest rates by plus 100 basis points for the past fiscal year would lead to a EUR 615k (FY 2007: EUR 776k) reduction in earnings before tax. This is equivalent to approximately 0.9 percent of net interest income. In the previous year, this value was still 1.2 percent. It has therefore been possible to reduce considerably the sensitivity of net interest in fiscal year 2008, despite a difficult market environment.

The fair value of the interest rate swaps recognised under hedge accounting in line with IAS 39, which have a negative fair value of EUR 3,833k on the balance sheet date, would have had a positive fair value of EUR 182k on the balance sheet date if the above interest rate scenario was assumed. Due to hedge accounting in line with IAS 39, the corresponding change would be shown in equity or in hedge reserves.

A corresponding downwards shift in the term structure of interest rates would lead to a EUR 2,152k (FY 2007: EUR 1,543k) increase in earnings before tax. The asymmetrical sensitivities result from the use of interest rate caps, which were used for ABCP financing, among other purposes. In these cases, a cap is set for interest expense which limits the risk of rising interest rates. But this does not exclude the possibility of benefiting from lower interest rates or the opportunities presented by falling interest rates. In terms of the fair value measurement of the interest rate swaps in hedge accounting, this interest rate scenario would result in a fair value which was lower by EUR 4,056k.

Currency Risk

Currency risks currently exist in financing for group companies or franchisees outside the euro area. These risks are generally hedged as soon as the amount of the financing volume outstanding reaches around EUR 1,000k. This amount was exceeded in Poland, Denmark, the UK, Norway, Sweden, the Czech Republic and Hungary. The exchange rate for financing granted by GRENKELEASING AG in Polish zloty, pounds sterling, Hungarian forint, Danish, Norwegian and Swedish kroner and Czech koruna for holding lease receivables of the respective subsidiaries is thus known and fixed for the largest part. However, in the course of the companies' growth there are risks in respect to open tranches which are under the hedging threshold.

It must also be taken into account that the contractually agreed payment schedule of a lease contract is hedged. However, with the current level of more than 220,000 contracts, in times of above-average currency volatility slight variations such as early repayments or cancellations and delays in instalments may accumulate negatively across the whole portfolio, for example, as a result of unfavourable bank processing periods.

Currently the outstanding volume of financing for the franchise partner in Romania is still insignificant, with the result that no currency hedging has been undertaken. The derivatives used here are disclosed under financial assets or financial liabilities at their fair value as of the balance sheet date.

Switzerland is not mentioned in this context, as lease refinancing is solely provided by Swiss banks in local currency. Also, in the context of economic hedging, there are cash flows between the currencies.

In Poland, the existing forward exchange contracts have been balanced out with the new framework agreement, which provides for refinancing in the local currency. The forward exchange contracts have been neutralised with corresponding back-to-back transactions in order to prevent any future effects on remeasurement of the forward transactions resulting from fluctuation in the value of the Polish zloty. Remeasurement due to the translation from a foreign currency of the net profit of group companies in non-euro countries has not been necessary due to the relative insignificance of the companies concerned.

Overall, risks arise from currency fluctuations relating to financial assets and receivables in foreign currency, from pending transactions in foreign currency and from the translation of group companies' financial statements. The use of derivatives (only forward exchange contracts are used for currency risk) offsets the market sensitivity of hedged items (i.e. cash flows from financial assets and receivables). Ideally, the instruments achieve an almost full offset. For the foreseeable future, hedge accounting will not be used for currency positions.

For our foreign currency sensitivity analysis we assume that the euro will gain or lose value against all currencies relevant to the GRENKELEASING Group. As of December 31, 2008, an appreciation of the euro of 10 percent had caused group earnings before taxes to rise by EUR 516k (FY 2007: EUR 464k). A respective devaluation of the euro would have led to a EUR 517k (FY 2007: EUR 454k) decrease in earnings before taxes according to estimates and assumptions made in the sensitivity analysis. In total, assets negatively impacted by foreign exchange rates totalled around EUR 44 million (FY 2007: EUR 50 million) on the balance sheet date. In terms of nominal value, the pound sterling is the most significant currency, accounting for 34 percent of the sensitivity effects.

Refinancing Risks

We refinance ourselves independently of individual banking institutions and also have direct access to the capital markets. We also ensure that our liabilities are well diversified and work together with several partner banks.

Our refinancing instruments range from traditional bank financing to revolving loan facilities and asset-backed commercial paper (ABCP) programs. This financing is fixed with agreed terms and maturities so that there are no risks relating to their availability within the agreed framework. In addition, we have direct access to the capital markets thanks to our ABS bond and the debt issuance program. Using these instruments we can make use of the most attractive financing channels offered at any time on the capital markets.

The ABCP programmes are financing loans based on defined underlying assets, i.e. lease receivables. Currently we may utilise them for refinancing our business in Germany, France and Austria. Moreover, for Switzerland and Poland, we have conventional bank financing that also has such an asset-oriented structure. On the other hand, the other refinancing instruments described are not asset-oriented, making them appropriate for use in line with our business performance as we see fit.

During fiscal year 2008, a further considerable shortage of funds, which went beyond the already unfavourable trends of the previous year, along with a visible widening of the interest rate spread, were observed on international financial markets as a result of the subprime crisis on the US real estate market. Despite massive supportive measures by governments and central banks, no forecasts can be made as to when this crisis will pass. The GRENKELEASING AG Group's refinancing was not markedly affected by this, however, as we had raised a substantial amount of refinancing funds before the crisis began and were thus only marginally dependent on the market starting in the second half of 2008.

As already stated elsewhere, the further development of the refinancing markets in 2009 cannot currently be predicted. We will therefore control the Group very closely in its day-to-day operations, and will orientate the development of new business, both as a whole and in the individual countries where we operate in line with the funds available for refinancing. The funds for our new business come from the total of operating cash flows, from available agreed lines of refinancing, and from available funds from the banking and capital markets. As can be seen from the cash flow statement (see also the annual financial statements, page 31), we also receive considerable funds via payments of lease installments of existing leases.

Risk Summary

The risk management system is appropriate and suitable for recognising significant risks at an early stage. Sufficient precautions have been taken to offset identified counterparty risk, credit risk, and similar risks arising from our leasing business. The corresponding write-downs, valuation adjustments, and provisions disclosed in the annual financial statements were computed at an appropriate level using conservative benchmarks. With respect to the future development of the GRENKELEASING AG and its subsidiaries, there are no particular business-related risks beyond the normal range.

EVENTS OF PARTICULAR SIGNIFICANCE AFTER THE CLOSE OF THE FISCAL YEAR

There were no significant events to report after the close of fiscal year 2008.

REPORT ON FORECASTS AND THE OUTLOOK FOR THE GROUP

Economic Environment

At the beginning of the year 2009, it is not possible to assess the severity and duration of the global recession. Economic, national and international institutions world-wide have repeatedly corrected their forecasts downwards to such an extent that there has been a demand to discontinue the publication of forecasts so as not to dampen sentiment further, thus exacerbating the crisis. Significant factors in the recession are the world-wide decline in investments following the deterioration of refinancing conditions, and the collapse in private consumption in the USA resulting from the property crisis, which led to a global lack of demand.

The most recent forecasts for the development of the situation in 2009 come from the European Commission and from the German government. They both anticipate a considerable decrease in Germany's GDP, of 2.3 percent and 2.25 percent respectively. As a heavily export-oriented economy, Germany would thus suffer more strongly from the recession. For the EU, the European Commission predicts a 1.8 percent decrease in the GDP in 2009. The greatest decline is expected in the first half of the year, after which a slight recovery is predicted which would lead to a growth in GDP of 0.5 percent for the EU and 0.7 percent for Germany in 2010.

Decisive factors in the development of the economic situation will be how quickly the world-wide national programmes to support the respective national economies have a positive effect, and when the provision of credit to businesses by banks reaches a sufficient level again.

Forecasts for the development of small ticket IT leasing are by its nature unavailable, just is the case with historic data about this market. However, it can be assumed that small and medium-sized enterprises in Europe will also evaluate and manage their investment projects more cautiously, at least at the beginning of 2009.

However, for leasing this could represent an opportunity for a strong development if businesses take more account of this form of financing in order to preserve credit lines and liquid funds. In the analyses which the ifo institute carried out together with the German Leasing Association, it established that in the 45 years and more that leasing has been present as a form of financing in Germany its market share has always increased particularly significantly in economically difficult times – most recently in the years 2001 to 2003 when there was a sharp decrease in capital expenditure.

Opportunities and Risks

The following report summarises the opportunities and risks forecast for the Group. The fundamental statements concerning domestic business also apply to the segments organised according to foreign markets.

For our foreign business, there are two additional significant risks in comparison with domestic business: Firstly, new business growth in smaller foreign markets can be influenced more strongly by employee turnover than in Germany, where both total business volume and the number of employees are higher. This is a typical risk for a small business segment. We combat it by offering intensive employee support and training.

In addition, the Group aims to reach a substantial size in all foreign markets to successively reduce the relative importance of individual employee turnover as business grows. However, there are individual markets such as Switzerland, where the circumstances make this target difficult to achieve, although we have developed a very high market share in small ticket IT leasing there. However, the high level of profitability of the business means that, although the growth of the company may be influenced by fluctuation, the profitability is not.

In addition, currency risks may arise in markets outside of euro zone. As soon as the risks reach an economically meaningful minimum level we limit these risks through the use of derivative instruments in line with our risk strategy. However, in the past fiscal year we experienced unusually high expenses form currency translation difference. The main reason for this was the unusually high depreciation observed in many different currencies simultaneously in the fourth quarter of 2008, meaning that in total the losses amounted to a significant volume. We will therefore carefully observe further developments in exchange rate fluctuations in 2009 and will adjust our risk strategy if it is necessary and economically appropriate to do so.

As a leasing provider, the whole Group is subject to interest rate risk. This can have an effect on various areas: Refinancing lease receivables is only subject to interest rate risks to a limited extent as the refinancing – if subject to a floating rate – is hedged using derivatives.

In addition, however, our business model is also sensitive to interest rates, meaning that the growth and profitability of new business can be influenced by interest rate changes and by the interest rate spreads required. In the course of the current financial market crisis, the refinancing markets saw a great lack of liquidity and the interest rate spreads have thus widened considerably. So far we have passed on these increased refinancing costs to the market in our leasing conditions. In the future we will likewise manage the Group with a focus on profitability of new business.

In 2009 there are considerable risks for business development here. At present it is not yet clear how the current financial market crisis will develop or how much volatility there will be in the markets in the near future. This means that we still cannot rule out the possibility that the Group's refinancing costs may be negatively impacted in the short term.

Moreover, it is also possible that the financial market crisis could again intensify and that this would have a considerable effect on the international banking system and thus on the availability of funds for refinancing in general, irrespective of the amount of the spreads. In the light of the support programmes announced by governments across the world, this currently seems unlikely. The German Federal Government's intended second economic stimulus package also directly provides additional refinancing funds for businesses in general and for the leasing industry in particular, thus acknowledging the significance of leasing as a source of refinancing for businesses. The current crisis is, however, characterised by historically unprecedented upheavals, meaning that it would be a mistake to see this as guaranteeing absolute security for the future.

Finally, risks result from the possibility that the loss rate in the current recession may exceed that of previous recessions. However, we consider that we have protected the Group well both by taking into account a loss rate which is representative of the whole economic cycle in our conditions, even in economically prosperous periods, and also through the Group's high profitability. As long as the decrease in GDP in 2009 is not both more severe and longerlasting than expected, we do not see any fundamental risks for the Group.

Anticipated Development of Business

Fiscal Year 2009

There is a great deal of uncertainty involved in the forecast for fiscal year 2009. The probability of occurrence of the opportunities and risks discussed cannot easily be estimated at present. We will therefore manage the Group closely in line with current developments. The growth of new business will be determined by the condition of refinancing markets and thus by the available funds. Expansion projects will be subjected to a rigorous review and will initially be implemented only in selected individual cases.

As long as market conditions do not significantly worsen, we currently consider growth of around 10 percent in new business within the GRENKE Group including franchise partners, to be achievable. This would be equivalent to or only slightly below our long-term target. For the GRENKELEASING AG Group, we consider growth of around 5 percent to be achievable.

The short-term limitation on growth means by nature that the resulting costs are not incurred. As on the same time profits will benefit from our strongly expanded new business during the last quarters, in a stable economic environment a significant positive development of earnings were to be expected. However, in the situation today a possible volatile development of refinancing costs and a potential significant increase in the loss rate pose significant risks. Nevertheless, we belief that current activities of the Group in 2009 can meet again the forecasts for net profit for the period in 2008, i.e. in the range between EUR 30.6 million and EUR 33 million. For this forecast to be achieved requires the targeted growth rate of around 10 percent for the GRENKE Group including franchise partners to be met.

Subsequent Years

We will keep our course of growth in the future, and continue to target consistent growth of more than 10 percent growth per year in new business within the GRENKE Group including franchise partners. Some individual years may of course deviate from this long-term goal. Just as in recent years these targets were sometimes significantly exceeded, it is not impossible that we may occasionally remain below the targets. In the current economic environment, a detailed forecast for the years following 2009 is not possible.

A key factor for the Group's growth in the future will be - as already shown for 2009 – the further development of the international banking crisis and the availability of funds for refinancing. This is what will determine how strongly we grow with our present network, how fast we increase the market penetration in our current markets through establishing further branches, and when we will undertake market entry in new countries.

On the other hand, the further development of the economic situation will exercise less influence on the growth rate at GRENKELEASING. This is because the risks from a possible temporary decline in small ticket IT investments on the part of small and medium-sized enterprises in Europe is countered by the possibility lease financing being increasingly utilised. We will manage our new business through the economic cycle with a high contribution margin 2, thus securing the Group's performance and a consistent return on equity of more than 16 percent.

Baden-Baden, Germany, January 26, 2009

Executive Board

CONSOLIDATED INCOME STATEMENT FOR FISCAL YEAR 2008

EURk	Note	Jan. 1 to Dec. 31, 2008	Jan. 1 to Dec. 31, 2007
Income from interest of leasing business	3.1	110,650	96,091
Expenses from interest on the refinancing
of the leasing business	3.2	42,606	33,702
Net interest income from leasing business		68,044	62,389
Settlement of claims	4	-20,110	-17,139
Net interest income after settlement of claims from leasing business		47,934	45,250
Profit from insurance business	5	20,151	16,733
Profit from new business	6	24,327	20,418
Profit from disposal	7	2,266	1,892
Income from operating business		94,678	84,293
Personnel expenses	8	27,428	21,839
Depreciation	9	2,769	2,233
Selling and administration expenses
(excl. personnel expenses)	10	17,087	15,368
Other operating expenses		4,096	799
Other operating income	11	1,326	1,170
Profit / loss from operating business		44,624	45,224
Expenses/ income from the fair value measurement		0	-16
Other interest income		829	839
Other interest expenses		782	1,232
Earnings before taxes (EBT)		44,671	44,815
Income taxes	12	9,532	23,877
Deferred taxes	12	1,996	-11,187
Net profit fort he period		33,143	32,125
Earnings per share (basic) in EUR	13	2,42	2,35
Earnings per share (diluted) in EUR	13	2,42	2,35

Average shares outstanding (basic)	13	13,684,099	13,682,454
Average shares outstanding (diluted)	13	13,684,099	13,682,454

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2008

EURk	Note	Dec. 31, 2008	Dec. 31, 2007
Assets

Current Assets
Cash on hand and balances with banks		77,012	53,395
Financial instruments with positive market value	14	7,093	2,721
Lease receivables	15	438,868	387,454
Other current financial assets	16	32,047	37,502
Trade recievables	17	5,955	3,441
Lease assets for sale		12,151	11,878
Tax recievables	18	5,211	8,251
Other current assets	19	18,949	23,913
Total current assets		597,286	528,555

Non-current assets
Lease recievables	15	704,350	612,604
Other non-current financial assets	23	89,360	69,013
Property, plant and equipment	20	35,714	32,830
Goodwill	21	8,239	2,157
Other intangible assets	22	2,296	1,023
Deferred tax assets	24	17,442	14,572
Other non-current assets		710	655
Total non-current assets		858,111	732,854

Total assets		1,455,397	1,261,409

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2008

EURk	Note	Dec. 31, 2008	Dec. 31, 2007
Liabilities and Equity

Liabilities
Current liabilities
Liabilities from the refinancing of the leasing business	26	441,847	340,666
Current portion of non-current bank liabilities	26	4,692	5,705
Financial instruments with negative fair value	27	5,434	1,261
Trade payables		8,466	7,410
Tax liabilities	28	3,101	3,781
Deferred liabilities	29	2,310	1,838
Other current liabilities		5,465	11,038
Deferred lease payments		70,217	52,219
Total current liabilities		541,532	423,918

Non-current liabilities
Liabilities from the refinancing of the leasing business	26	609,218	558,108
Non-current bank liabilities, less the current portion	26	7,819	8,209
Deferred tax liabilities	24	47,768	43,585
Other non-current liabilities	30	2,646	1,422
Total non-current liabilities		667,451	611,324

Equity	31
Capital stock		17,491	17,491
Capital reserve		60,166	60,166
Revenue reserves		5,317	2,417
Other reserves		-4,156	530
Unappropriated profit carried forward		167,596	145,563
Total equity		246,414	226,167

Total liabilities and equity		1,455,397	1,261,409

CONSOLIDATED CASH FLOW STATEMENT FOR FISCAL YEAR 2008

	EURk	Jan. 1 to Dec. 31, 2008	Jan. 1 to Dec. 31, 2007
	Earnings before taxes	44,671	44,815
	Non-cash items contained in net profit for the period and reconciliation to cash flow from operating activities
+ / -	Amortisation/ depreciation	2,769	2,233
- / +	Profit/ loss from the disposals of equipment and intangible assets	71	20
- / +	Investment income	-47	393
- / +	Non-cash changes in equity	-3,681	-356
+ / -	Increase/ decrease in other reserves	472	522

-	Additions of lease receivables	-539,615	-435,729
+	Payments by lessees	450,135	394,387
+	Disposals/ reclassifications of lease receivables at residual carrying values	96,806	83,068
+ / -	Changes from other set-offs	0	-71
-	Interest income from lease receivables	-110,650	-96,091
-	Increase in other receivables from lessees	-7,456	-1,405
+ / -	Currency translation differences	5,881	996
=	Change in lease receivables	-104,899	-54,845
+	Additions of liabilities from the refinancing of leasing business	1,257,913	623,200
-	Payment of annuities to refinancers	-230,525	-223,699
-	Disposal of liabilities from the refinancing of leasing business	-918,084	-377,858
+	Interest expense from leasing business	42,598	33,702
+ / -	Currency translation differences	388	-722
=	Change in liabilities from the refinancing of leasing business	152,290	54,623
-	Issue of loans	-18,618	-26,502
	Changes in other assets/liabilities
- / +	Increase/decrease in other assets	-38,578	-571
+ / -	Increase/decrease in deferred lease payments	17,998	9,849
+ / -	Increase/decrease in other liabilities	-440	67
=	Cash flow from operating activities	52,008	30,248

Continued on next page

	EURk	Jan. 1 to Dec. 31, 2008	Jan. 1 to Dec. 31, 2007
- / +	Taxes paid/ received	-9,311	-14,256
-	Interest paid	-782	-1,232
+	Interest received	829	839
=	Net cash flow from operating activities	42,744	15,599

-	Purchase of equipment and intangible assets	-2,498	-4,139
-	Proceeds from sale of equipment and intangible assets	-7,544	0
+	Acquistion of subsidiaries (net of cash aquired)	312	88
=	Cash flow from investing activities	-9,730	-4,051

+ / -	Raising/ repayment of bank liabilities	-392	-794
-	Dividend payment	-8,210	-7,524
+	Payments from stock options programme	0	119
=	Cash flow from financing activities	-8,602	-8,199

	Cash funds
	at the beginning of period	53,395	46,421
-	Cash on hand and balances with banks	-4,604	-1,011
=	Cash and cash equivalents at beginning of period	48,791	45,410

+ / -	Change due to currency translation	216	32
=	Cash funds after currency translation	49,007	45,442


	Cash funds at the end of period Cash on hand and balances with banks	77,012	53,395
-	Bank liabilities from overdrafts	-3,593	-4,604
=	Cash and cash equivalents at the end of period	73,419	48,791

	Change in cash and cash equivalents during the period
	(Sum of cash flows)	24,412	3,349

	Net cash flow from operating activities	42,744	15,599
+	Cash flow from investing activities	-9,730	-4,051
+	Cash flow from financing activities	-8,602	-8,199
=	Total cash flow	24,412	3,349

CONSOLIDATED CASH FLOW STATEMENT FOR FISCAL YEAR 2008: CONTINUED

STATEMENTS OF CHANGES IN CONSOLIDATED EQUITY FOR FISCAL YEAR 2007

	Capital stock	Capital reserve	Other reserves		Revenue reserves			Profit carryforward	Equity, Group
EURk			Hedging reserve	Reserve for actuarial gains and losses	Currency translation	Legal reserve	Reserve in accordance with the articles of incorporation
Note	31	31	31	31	31	31	31	31
Equity as of Jan. 1, 2007	17,486	60,052	1,310	-36	-511	1,871	48	121,460	201,680
Actuarial gains and losses				-34					-34
Fair value measure ment of hedging instruments			-125						-125
Currency translation					-97				-97
Deferred taxes on not affecting net income documented issues			15	8					23
Amount of profit/ loss included directly in equity	0	0	-110	-26	-97	0	0	0	-233
Net profit for 2007								32,125	32,125
Total net profit/ loss for the period of 2007	0	0	-110	-26	-97	0	0	32,125	31,892
Issue of shares	5	114							119
Dividend in 2007 for 2006								-7,524	-7,524
Allocation to legal reserves						498		-498
Equity as of Dec. 31, 2007	17,491	60,166	1,200	-62	-608	2,369	48	145,563	226,167

STATEMENTS OF CHANGES IN CONSOLIDATED EQUITY FOR FISCAL YEAR 2008

	Capital stock	Capital reserve	Other reserves		Revenue reserves			Profit carryforward	Equity, Group
EURk			Hedging reserve	Reserve for actuarial gains and losses	Currency translation	Legal reserve	Reserve in accordance with the articles of incorporation
Note	31	31	31	31	31	31	31	31
Equity as of Jan. 1, 2008	17,491	60,166	1,200	-62	-608	2,369	48	145,563	226,167
Actuarial gains and losses				-5					-5
Fair value measure ment of hedging instruments			-5,234						-5,234
Currency translation					-103				-103
Deferred taxes on not affecting net income documented issues			655	1					656
Amount of profit/ loss included directly in equity	0	0	-4,579	-4	-103	0	0	0	-4,686
Net profit for 2008								33,143	33,143
Total net profit/ loss for the period of 2008	0	0	-4,579	-4	-103	0	0	33,143	28,457
Issue of shares
Dividend in 2008 for 2007								-8,210	-8,210
Allocation to legal reserves						2,327	573	-2,900	0
Equity as of Dec. 31, 2008	17,491	60,166	-3,379	-66	-711	4,696	621	167,596	246,414

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR FISCAL YEAR 2008

1. COMMERCIAL REGISTER AND PURPOSE OF THE COMPANY

GRENKELEASING AG (hereinafter also referred to as "GRENKELEASING" or the "Company") is a stock corporation with its registered office at Neuer Markt 2, Baden-Baden, Germany. The Company is entered in the commercial register at the local court of Mannheim, section B, under HRB 201836.

The purpose of the Company is to lease all types of movable assets, to manage lease contracts for third parties, to broker property insurance for leased assets, to purchase and manage receivables from and for third parties (factoring), and to conduct all other related transactions.

The leasing business of the GRENKELEASING Group focuses on small-ticket leasing of IT products, such as PCs, notebooks, servers, monitors, and other peripheral devices, software, telecommunication and copier equipment and other IT products. Almost all contracts provide for full cost recovery (full payout leases). This means that the payments made by the lessee during the basic lease period, including the guaranteed residual values, exceed the acquisition and contract cost.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

GRENKELEASING AG, as a listed parent company which is traded on an organised market within the meaning of Sec. 2 (5) WpHG ["Wertpapierhandelsgesetz": German Securities Trading Act] (its stock has been listed in the Prime Standard since January 1, 2003 and was allocated to the SDAX index by Deutsche Börse on February 11, 2003), has, as in the prior year, prepared its consolidated financial statements in accordance with Sec. 315 a HGB ["Handelsgesetzbuch": German Commercial Code] on the basis of the International Financial Reporting Standards (IFRSs) published by the International Accounting Standards Board (IASB), as adopted in the EU.

All International Financial Reporting Standards (IFRSs) (formerly International Accounting Standards (IAS)) mandatorily applicable for fiscal year 2008 as well as all interpretations by the International Financial Reporting Interpretations Committee (IFRIC) (formerly the Standing Interpretations Committee (SIC)) were observed.

The consolidated financial statements for the fiscal year ended December 31, 2008 are prepared for GRENKELEAS-ING AG and the companies it controls. Control is normally evidenced when the Group holds, either directly or indirectly, 50 percent (or more) of the voting rights or the subscribed capital of an entity and/or has the power to govern the financial and operating policies of an entity so as to obtain benefit from its activities.

The financial statements of the companies included in GRENKELEASING AG's consolidated financial statements have all been prepared using uniform accounting policies. The financial statements in accordance with local commercial law have been prepared as of the balance sheet date of the consolidated financial statements and are audited by independent auditors when this is required by local law.

The reconciliation of the financial statements of all subsidiaries to IFRSs was audited in the audit of the consolidated financial statements.

The consolidated financial statements have been prepared in euros (EUR). Unless stated otherwise, all figures are rounded and stated in thousands of euros (EURk). The accounting policies used are the same as those used in the previous year. Exceptions are listed in Sections 2.2 and 2.3 below.

2.2 Changes in Disclosures

In the present consolidated financial statements, the format of both the balance sheet and the income statement has been adjusted to improve clarity and informational content. The names of various items have been standardised and/or combined or used for the first time. Changes in these two elements are rigorously incorporated in all other parts of the consolidated financial statements. The figures for the previous year have been adjusted in line with the current disclosures.

The following adjustments were made in the income statement:

` The term "Lease receivables" was uniformly replaced with the description "Leasing business" for revenue and earnings components in the income statement.
` For the insurance business and for disposals, only net results are shown. Gross income and expenses are shown in the Notes.
` The amount of total operating result was introduced as a subtotal.
` The position "Sales and administrative expenses (excluding personnel expenses)" covers the expense items "Operating expenses", "Administrative expenses", "Consulting and audit fees", "Selling expenses" and "Other taxes", which were previously shown separately. A breakdown according to the previous model can be found in the Notes.
` The term "Profit/loss from ordinary operations" is replaced with "Operating result".

The following changes appear in the balance sheet:

` Derivative financial instruments which were posted in the position "Financial assets" in the prior year are now shown in the position "Financial instruments with positive fair market value".
` The positions "Other current financial assets" and "Other non-current financial assets" have been introduced. This shows the current and non-current portion of the receivables from the refinancing of franchisees and the current/non-current receivables resulting from the ABCP programmes and the ABS bond. "Direct debits at end of month" are also included. Recognition for the prior year was adjusted at EUR 37,502k for the current part and EUR 69,013k for the non-current part. The corresponding amount was reduced in the former item "Other current assets"/ "Other non-current assets".
` "Other receivables from franchisees", which were previously classified under "Other current assets", are now part of "Trade receivables". The prior year's figures have been adjusted in the respective balance sheet positions.
` "Goodwill" is disclosed separately in the corresponding position. The figure for the prior year is EUR 2,157k. The value was originally shown as part of "Intangible assets".
` The position "Intangible assets" has been re-named "Other intangible assets" and reduced by the amount of goodwill in the prior-year figures.
` The term "Liabilities from the refinancing of lease receivables" is replaced by "Liabilities from the refinancing of the leasing business". There was no reclassification or resulting adjustment of the disclosures for the prior year.
` The position "Liabilities from tax" has been re-named "Tax liabilities".
` The position "Provisions" has been re-named "Deferred liabilities".
` For equity, the previously disclosed positions "Currency translation", "Hedge reserve" and "Reserve for actuarial gains/losses" are now summarised in the position "Other reserves". Details can be found in the Group's statement of changes in equity.
` The Statement of recognised profit and losses shown separately in the previous year has been included into the the Group's statement of changes in equity in the reporting year.

2.3 New Accounting Standards

In recent years, the IASB has published various amendments of IFRSs and new IFRSs as well as International Financial Reporting Interpretations Committee interpretations (IFRICs). The following standards/interpretations were mandatory for the first time in these annual financial statements:

` IFRIC 11 "IFRS 2 Group and Treasury Share Transactions"
` IFRIC 14 "IAS 19 Defined Benefit Assets and Minimum Funding Requirements and their Interaction"
` Changes in IAS 39 "Financial Instruments: Recognition and Measurement" and IFRS 7 "Financial Instruments: Disclosures"

In addition, GRENKELEASING has implemented voluntarily early application of the following standards/interpretations:

` Changes to IAS 23 "Borrowing Costs (amended 2007)"
` Changes to IFRS 2 "Share-based Payment (amended 2008)"
` IFRIC 13 "Customer Loyalty Programmes"

The application of these standards had no effect on the net assets, financial position and results of the GRENKELEAS-ING Group. However, in some cases it did lead to a change in accounting policies.

The interpretation IFRIC 12 "Service Concession Arrangements", which became mandatory under IFRS as of January 1, 2008, has not yet been adopted into EU law and therefore cannot be applied in these consolidated financial statements. Because the Group does not have any concessions relating to the supply of public services to private customers, there is no effect on the net assets, financial position and results of the Group and therefore no effect on conformity with the IFRS as they are applied in the EU.

2.4 Future Accounting Standards

Apart from the IFRSs whose application is mandatory, the IASB has also published other IFRSs and IFRICs, some of which have already received EU endorsement but which will only become mandatory at a later date. Below, only those standards and interpretations which could be relevant for GRENKELEASING and have not yet been applied early on a voluntary basis are described. Application of the standards listed below typically takes place as of the mandatory application date.

` IFRS 8 "Operating segments" was published in November 2006 and is operative for the first time for fiscal years beginning on or after January 1, 2009. IFRS 8 requires that information about the operating segments of a company is provided and replaces the obligation to determine primary (operating segments) and secondary (geographical segments) segment reporting formats for a company. IFRS 8 is based on so-called management approach where segment reporting is based exclusively on financial information which is used by the decision-makers in the company for the purposes of internal management of the company. Decisive factors here are the company's reporting and organisational structure and any financial figures which are used in making decisions about the allocation of resources and the measurement of financial performance. The Group opted not to implement early application of IFRS 8 and continues to use IAS 14 "Segment reporting". The new standard will influence the way in which financial information about the Group's operations is published, but will not influence the recognition and measurement of assets and liabilities in the consolidated financial statements.
` The revised IFRS 3 "Business combinations" was published in January 2008 and is operative for the first time for fiscal years beginning on or after July 1, 2009. The standard was subject to comprehensive revision as part of the IASB and FASB convergence project. Major changes include the introduction of an option for the measurement of non-controlling interests between recognising them at their share of the acquiree's net identifiable assets (purchased goodwill method) and the full goodwill method, whereby the total amount of goodwill acquired, including that attributable to non-controlling interests, is recognised.

Additional changes are the subsequent measurement of existing equity interests in profit or loss after obtaining control for the first time (successive business combination), the necessary recognition of consideration contingent on future events as of the acquisition date and the recognition of transaction costs in profit or loss. The transitional provisions specify prospective application of the changes. Assets and liabilities that arose from business combinations prior to the first-time application of the new standard are not affected.

` The revised version of IAS 27 "Consolidated and separate financial statements" was issued in January 2008. The changes are operative for the first time for fiscal years beginning on or after 1 July 2009. The amendments are the result of a joint project undertaken by the IASB and the FASB to revise the accounting provisions for business combinations. The amendments primarily relate to accounting for non-controlling interests (minority interests) that will in future participate in full in the group's losses and for transactions that lead to loss of control of a subsidiary and the effects of which are to be recognised in profit or loss.

Changes in ownership interest that do not result in a loss of control are accounted for as equity transactions. The transitional provisions, which generally specify retrospective application of changes, stipulate prospective application of the above changes. Assets and liabilities that arose from such transactions prior to the first-time application of the new standard are therefore not affected.

` The amendments to IAS 32 "Financial instruments: Presentation" and IAS 1 "Presentation of financial statements" were issued on February 14, 2008 and become effective for fiscal years beginning on or after January 1, 2009. The revision mainly concerns the classification of puttable shareholder contributions as equity or financial liabilities. The previous regulation forced entities in some cases to report the entity's capital as financial liabilities as a consequence of statutory termination rights on the part of the shareholder. In the future, such shareholder contributions should be classified as equity if settlement at fair value is agreed and the contributions have no priority over other claims to the net assets of the entity. As a result of the legal form of the parent company and the requirements of law and company law, the new regulations will have no effect on the future classification, measurement and reporting of shareholder contributions in consolidated financial statements.

` On May 22, 2008, the IASB published changes to existing standards for the first time as part of an annual procedure ("Improvements to IFRS 2008"). The primary aim of the collective standard is to remedy inconsistencies and to clarify formulations. The changes are mandatory for fiscal years beginning on or after January 1, 2009. Specifically, the following standards are affected. Unless explicitly stated, the Group does not expect any effects as a result of the relevant application:
− IAS 1 Presentation of Financial Statements: In accordance with IAS 39 "Financial instruments: Recognition and Measurement", assets and liabilities which are classified as held for trading are not automatically classified as current in the balance sheet. As a result, derivatives will be recognised under non-current financial instruments in the balance sheet.
− IAS 16 Property, plant and equipment: The term "net selling price" was replaced with the expression "fair value less cost to sell".
− IAS 23 Borrowing costs: The definition of borrowing costs was revised with the guidance on the effective interest rate in IAS 39 being assumed.
− IAS 28 Investments in associates: If an associate is carried at fair value in accordance with IAS 39, then only the requirements of IAS 28 must be applied, where the nature and extent of any significant restrictions on the ability of associates to transfer funds to the company in the form of cash or repayment of loans must be disclosed. In addition, an investment in an associate for the purpose of carrying out an impairment test is considered as a separate asset. For this reason, impairment is not attributed separately to goodwill in the investment balance.
− IAS 31 Investments in joint ventures: If a joint venture is carried at fair value in accordance with IAS 39, then only the requirements of IAS 31 must be applied, according to which the obligations of the venturer and of the joint venture must be disclosed, in addition to a summary of the financial information on assets, liabilities, revenue and expenses.
− IAS 36 Impairment of assets: Where the "fair value less costs to sell" is calculated based on a discounted cashflow model, additional disclosures on the discount rate are required in line with obligatory disclosures when a discounted cashflow model is used in determining the "value in use". This change does not have a direct effect on consolidated financial statements, since the recoverable amount of the Group's cash-generating entities is currently calculated based on the "value in use".
− IAS 38 Intangible assets: Expenditure on advertising and promotional activities is considered as expense when the Group has received the right to access the goods or services. This change does not affect the Group, since this kind of promotional activity is not undertaken. The statement that there is rarely, if ever, persuasive evidence to support a different amortisation method other than the straight-line amortisation method for intangible assets, was deleted.
− IFRS 7 Financial instruments: Disclosures: The reference to "total interest income" as a component of financing costs was deleted.
− IAS 8 Accounting policy, changes in estimates and errors: It is clarified that only guidance which constitutes an integral part of the IFRS is mandatory when selecting accounting policies.
− IAS 10 Subsequent Events: It is clarified that dividends declared after the reporting period do not constitute liabilities.
− IAS 16 Property, plant and equipment: Property, plant and equipment which is held to be leased and which in the ordinary course of business is to be sold after its rental, is transferred to inventories if it is held for sale after the end of its rental.
− IAS 18 Revenue: The term "direct costs" is replaced with "transaction costs" in terms of IAS 39.
− IAS 19 Employee benefits: Revision of the definition of "past service cost", "return on plan assets" and "shortterm employee benefits" as well as "other long-term employee benefits". Plan amendments which result in a benefit reduction for future services are posted as a curtailment. The statement in relation to the recognition of contingent liabilities was deleted to achieve agreement with IAS 37.
− IAS 20 Accounting for government grants and disclosure of government assistance: In the future loans at nil or low interest rates are not exempted from the requirement to quantify the interest benefit. The difference between the amount received and the discounted amount is accounted for as a government grant. In addition, certain wording was revised to establish consistency with other IFRS.
− IAS 27 Consolidated and separate financial statements: If a parent company reports a subsidiary in its separate financial statements at fair value in accordance with IAS 39, this treatment is retained if the subsidiary is subsequently classified as held for sale.
− IAS 29 Financial reporting in hyperinflationary economies: Amendment of the statement on the exception of measuring assets and liabilities at historical cost so that property, plant and equipment are only provided as examples, rather than suggesting that the list was complete. In addition, certain wording was revised to establish consistency with other IFRS.
− IAS 34 Interim reporting: When an entity is within the scope of IAS 33, the presentation of earnings per share in the interim report is provided.IAS 39 Financial instruments: Recognition and Measurement: After initial recognition, due to changed circumstances derivatives can be designated as "at fair value through profit and loss" or removed from this category because it is not a reclassification in line with IAS 39.
− In IAS 39 the reference to "segment" in relation to the judgement as to which an instrument qualifies as a hedging instrument is deleted. The use of the recalculated effective interest rate is required when a debt instrument is revalued after ending the fair value hedge accounting for hedging the fair value.
− IAS 40 Investment property: Amendment of the scope to classify property under construction or development for future use as "investment property". If the fair value cannot be reliably measured, the property under construction will be valued at cost until the fair value can be established or the construction concluded. The conditions for a voluntary change in account policy are now consistent with IAS 8. It is made clear that the carrying amount of a leased investment property corresponds to the fair value plus any recognised liabilities.
` IFRIC 16 "Hedges of a Net Investment in a Foreign Operation" was published on July 3, 2008. In conjunction with IAS 21 "The Effects of Changes in Foreign Exchange Rates" and IAS 39 "Financial Instruments: Recognition and Measurement", IFRIC 16 clarifies what can be considered a risk in a foreign operation when hedging a net investment and where the hedge can be held within the company group to minimise this risk. The interpretation is operative for fiscal years beginning on or after October 1, 2008.
` An addition to IAS 39 "Financial Instruments: Recognition and Measurement" was published on July 31, 2008. It contains principles for showing one-sided risks and inflation with regard to hedged items.
` IFRS 17, "Distributions of non-cash assets to owners", was published on November 27, 2008. The interpretation makes clear the measurement of distributions of non-cash assets, when these are to be recognised and how any differences to the carrying value are to be treated. The interpretation is operative for fiscal years beginning on or after July 1, 2009. In this case it is to be applied prospectively.

Other than additional or modified disclosures, no significant effects are currently expected for GRENKELEASING's consolidated financial statements as a result of the application of the above standards and interpretations.

2.5 Consolidation Policies

The consolidated financial statements contain all assets and liabilities as well as all expenses and income of GREN-KELEASING AG (hereinafter referred to as "Group") and of the subsidiaries it controls after eliminating all material intragroup transactions.

Subsidiaries are included in the consolidated group for as long as they are under the control of the parent. The purchase method of accounting was used for acquisitions. Entities acquired or disposed of during the fiscal year are included in the consolidated financial statements from the date of acquisition or until the date of disposal. Two acquisitions were implemented in fiscal year 2008. IFRS 3 was applied for the first time in fiscal year 2005 for past business acquisitions by the Group. This saw the discontinuation of goodwill amortisation in favour of an impairment test to be performed at least once a year (see Notes 2.14 and 2.22). Balances, income and expenses as well as unrealised profits and losses from intra-Group transactions are fully neutralised.

Name	Registered office	Equity investment 2008	Equity investment 2007

Germany
GLG Grenke-Leasing GmbH	Baden-Baden	100%	100%
Grenke Investitionen Verwaltungs Kommanditgesellschaft auf Aktien (84.4 percent directly, 15.6 percent indirectly via GLG Grenke-Leasing GmbH)	Baden-Baden	100%	100%
WEBLEASE NETBUSINESS AG	Baden-Baden	100%	100%

International
GRENKELEASING s.r.o.	Prague / Czech Republic	100%	100%
GRENKE ALQUILER S.A.	Barcelona / Spain	100%	100%
Grenkefinance N.V.	Vianen / Netherlands	100%	100%
GRENKELEASING AG	Zurich / Switzerland	100%	100%
GRENKELEASING AG	Vienna / Austria	100%	100%
GRENKELEASING ApS	Herlev /Denmark	100%	100%

In addition to GRENKELEASING AG, the following subsidiaries are included in the consolidated financial statements:

Name	Registered office	Equity investment 2008	Equity investment 2007

International
GRENKE LIMITED	Dublin / Ireland	100%	100%
GRENKE FINANCE Plc.	Dublin / Ireland	100%	100%
GRENKE LOCATION SAS	Schiltigheim / France	100%	100%
GRENKE Locazione S.r.l.	Milan / Italy	100%	100%
GRENKE LEASING S.r.l.	Milan / Italy	100%	100%
GRENKELEASING AB	Stockholm / Sweden	100%	100%
GRENKE LEASE Sprl*	Brussels / Belgium	100%	100%
Grenke Leasing Ltd.**	Guildford / UK	100%	-
GRENKELEASING Sp.z.o.o**	Poznan / Poland	100%	-

* GRENKELEASING AG holds a direct interest of EUR 1,499k in GRENKE LEASE Sprl in Brussels, Belgium, and an indirect interest of EUR 1k through its German subsidiary, GLG Grenke-Leasing GmbH.

** Acquisitions in fiscal year 2008 from franchise companies

The balance sheet date of all subsidiaries is December 31, 2008.

Equity investment	Equity Dec. 31, 2008 (EUR)	Net profit/loss 2008 (EUR)
Grenke Investitionen Verwaltungs Kommanditgesellschaft auf Aktien, Baden-Baden*	780,828.96	0.00
GLG Grenke-Leasing GmbH, Baden-Baden**	221,542.08	20,666.48
WEBLEASE NETBUSINESS AG, Baden-Baden	1,433,701.63	142,141.75
GRENKE LOCATION SAS, Schiltigheim / France	18,262,968.74	3,407,203.49
GRENKELEASING AG, Zurich / Switzerland	7,410,337.51	1,416,822.94
GRENKELEASING AG, Vienna / Austria	1,886,382.76	225,924.91
GRENKELEASING s.r.o., Prague / Czech Republic***	424,000.38	30,875.31
GRENKE ALQUILER S.A., Barcelona / Spain***	2,498,671.12	783,429.84
GRENKE Locazione S.r.l., Milan / Italy***	933,520.74	-2,246,242.16
Grenkefinance N.V., Vianen / Netherlands***	786,763.79	162,255.39
GRENKE LEASING S.r.l., Milan / Italy***	1,606,151.68	-135,041.35
GRENKELEASING ApS, Herlev / Denmark / *	140,522.05	-616,941.21
GRENKE LIMITED, Dublin / Irland***	1,908,117.87	295,752.18
GRENKE FINANCE Plc., Dublin / Irland***	17,070,969.75	8,606,945.84
GRENKELEASING AB, Stockholm / Sweden***	930,961.00	-654,962.90
GRENKE LEASE Sprl, Brussels / Belgium**	274,908.48	-280,477.90
Grenke Leasing Ltd., Guildford / UK*	-4,947,609.83	-1,831,676.13
GRENKELEASING Sp.z.o.o, Poznan / Poland*	1,798,839.21	1,267,174.25
* After profit/loss transfer

** 2008 profit distribution of EUR 280k

*** Provisional

The capital of these subsidiaries changed as follows in fiscal year 2008:
GRENKELEASING AB, Stockholm / Sweden	Dec. 31, 2008	Capital increase	EUR 18,399.26
GRENKE Locazione S.r.l., Milan / Italy	Dec. 17, 2008	Capital increase	EUR 1,200,000.00
GRENKELEASING ApS, Herlev / Denmark	Dec. 16, 2008	Capital increase	EUR 336,904.52
GRENKELEASING AB, Stockholm / Sweden	Dec. 16, 2008	Capital increase	EUR 910,498.04
GRENKE Locazione S.r.l., Milan / Italy	Oct. 20, 2008	Capital increase	EUR 1,800,000.00

***** Acquisitions in fiscal year 2008

2.6 Foreign Currency Translation

2.6.1 Foreign Currency Transactions

Foreign currency transactions are translated at the closing rate at the time of the transaction. Foreign currency monetary items (e.g. cash and cash equivalents, receivables and liabilities) are subsequently translated using the closing rate, with any translation differences reported in net profit or loss. Non-monetary items carried at historical cost are not subsequently translated, the rate on initial recognition being used.

2.6.2 Foreign Entities

Each business within the Group determines its own functional currency. Items included in the financial statements of the relevant business are measured using this functional currency. Foreign currency translations are translated into the functional currency at the spot rate on the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the closing rate. All currency translation differences are recognised in profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the dates of the initial transaction. Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the closing rate.

The local currency is the functional currency of all foreign operations. The assets and liabilities of these subsidiaries are translated into euros at the closing rate. Income and expenses of these subsidiaries are translated at the average exchange rates prevailing during the fiscal year (the arithmetic mean of the daily rates during the fiscal year). The exchange differences arising on translation are recognised as a separate component of equity. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss.

	Closing rate on Dec. 31, 2008	Average rate 2008	Closing rate on Dec. 31, 2007	Average rate 2007
CHF	1.4850	1.5874	1.6547	1.6427
CZK	26.8750	24.9460	26.6280	27.7660
DKK	7.4506	7.4560	7.4583	7.4506
GBP	0.9525	0.7963	0.7334	0.6843
HUF*	266.7000	251.5100	253.7300	251.3500
NOK*	9.7500	8.2237	7.9580	8.0165
PLN	4.1535	3.5121	3.5935	3.7837
RON*	4.0225	3.6826	3.6077	3.3353
SEK	10.8700	9.6152	9.4415	9.2501
SKK*	30.1260	31.2620	**	**

The development of the exchange rates of the currencies used in the Group in relation to the euro is illustrated below:

* Currency of the franchise companies, refinancing are granted partly in foreign currency

** Franchise company did not exist in this currency area in the prior year

2.7 Historical Cost Accounting

The consolidated financial statements are based on historical cost accounting. Unless otherwise stated, assets and liabilities are recognised at nominal value less necessary allowances. The only exception is the recognition of derivative financial instruments used in the Group. These are recognised at fair value.

2.8 Leases

2.8.1 Determining Whether an Arrangement Contains a Lease

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

A reassessment of whether an arrangement is a lease is only required after the inception of the arrangement when any one of the following conditions is met:

a. here is a change in the contractual terms, unless the change only renews or extends the arrangement;
b. A renewal option is exercised or an extension is agreed to by the parties to the arrangement, unless the term of the renewal or extension had initially been included in the lease term;
c. There is a change in the determination of whether fulfilment is dependent on a specified asset;

There is a substantial change to the asset.

2.8.2 The Group is the Lessor

Finance Leases

Under a finance lease, substantially all the risks and rewards incidental to legal ownership are transferred by the lessor to the lessee. The lease payment receivable is thus treated by the lessor as repayment of principal and finance income to reimburse and reward the lessor for its investment and services.

Assets from a finance lease are recognised in the balance sheet as receivables at an amount equal to the net investment, i.e. the present value of the residual receivables of all lease contracts existing at the end of a fiscal year. The net investment value is calculated on the basis of the net cost of the leased assets less a special lease payment made by the lessee. Initial direct costs incurred in connection with contract conclusion are offset against income over the entire term of the lease contract by proportionately reducing the unearned finance income by these initial costs. Finance income is recognised such that a constant periodic rate of return on the outstanding residual receivable is generated.

Operating Leases

Leases where the Group retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating and concluding an operating lease are added to the carrying amount of the leased asset and depreciated along with that to the residual value over the term of the leasing agreement. Contingent rents are recognised as income in the period in which they are generated. Operating lease assets are disclosed in the balance sheet based on the type of asset (see Note 20).

After the original lease has expired, the contract may be extended or a follow-on contract concluded. This leads to the lease being remeasured. In cases where the criteria for an operating lease are met, the leased asset is disclosed as property, plant and equipment from the start of the extension period and is carried at fair value.

2.8.3 The Group is the Lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased asset, are capitalised at the date of inception of the lease at the fair value of the leased property, or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability over the period. Finance charges are expensed immediately.

If there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the capitalised leased asset is fully depreciated over the shorter of the lease term or its useful life. The lease payments under an operating lease are recognised as an expense in the income statement on a straight-line basis over the lease term. Contingent rents are recognised as an expense in the period in which they are incurred.

2.9 Cash on hand and balances with banks

The cash and cash equivalents in the balance sheet comprise cash on hand and bank balances. Current account balances are deducted from cash and cash equivalents for the cash flow statement.

2.10 Financial Assets and Liabilities

Financial assets as defined by IAS 39 are, depending on their characteristics, classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments or available-for-sale financial assets. Financial assets are measured at fair value at initial recognition.

The carrying amounts of financial instruments other than those designated as at fair value through profit or loss include transaction costs that are directly attributable to the acquisition of the assets. The assessment whether a contract contains an embedded derivative is made when the entity first becomes party to the contract. Embedded derivatives are separated from the host contract if the latter is not measured at fair value through in profit or loss and an analysis reveals that the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract.

The financial assets are designated to the categories following initial recognition. Reclassifications are made as of the end of a given fiscal year where permissible and appropriate. No reclassifications took place in the reporting periods. All regular way purchases and sales of financial assets use settlement date accounting. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

The derivatives used in the Group other than for hedging purposes in line with IAS 39, are classified as held for trading and must therefore be recognised at fair value through profit or loss.

Financial assets held for trading are initially recognised at cost plus any transaction costs incurred and are carried at fair value on subsequent measurement. The derivate financial instruments used in the Group are measured using either Bloomberg (interest rate swaps and caps) or the measurement bases provided by the banks (forward exchange contracts). Any adjustments, other than hedge accounting adjustments in line with IAS 39, are recognised in profit or loss.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, loans and receivables are measured at amortised cost using the effective interest method less any impairment.

Amortised cost includes all discounts and premiums paid upon acquisition and includes all fees which are an integral part of the effective interest rate and the transaction costs. Gains and losses are recognised in net profit when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

The Group held no available-for-sale financial assets on the balance sheet date.

No financial assets or liabilities were designated as at profit or loss through fair value at initial recognition ("fair value option").

When hedging transactions are entered into to hedge the exposure to variability in cash flows which are determined by variable market prices (e.g. interest), certain derivatives are allocated to certain host contracts that are attributable to a particular risk associated with a recognised asset or liability or a forecasted transaction (cash flow hedge). The hedging instruments in a hedge are also recognised at fair value.

However, changes in value relating to the effective portion are recognised in the cash flow hedge reserve, a separate item under equity ("hedging reserve"). Any ineffectiveness is recognised in profit or loss. Effectiveness is measured as of the balance sheet date using the hypothetical derivative method.

Financial liabilities are recognised initially at cost and subsequently at amortised cost. Liabilities from the refinancing of the leasing business are recognised at nominal value less the transaction costs, except for refinancing using loans, bonds or debentures with matching maturities. The deducted transaction costs and any debt discounts are amortised over the lease term using the effective interest method.

Liabilities from the refinancing of the leasing business which result from the sale of the lease receivables to the respective refinancing party are recognised at the present value of the payments yet to be made to the refinancing party. The originally agreed rate is used as the discount rate for fixed-interest loans. Upon repayment, regular payments are split into an interest portion and a principal component. The interest portions are disclosed as expenses from interest on the refinancing of the leasing business.

At each balance sheet date the Group assesses whether a financial asset or group of financial assets is impaired. If there is an objective indication of an impairment of loans and receivables carried at amortised cost, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding expected future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate (i.e. the effective interest rate determined on initial recognition). The carrying amount of the asset is reduced using an allowance account. The impairment loss is recognised directly in profit or loss.

If the amount of the impairment loss decreases in a subsequent period and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. The amount of the reversal is limited to amortised cost at the date of the reversal. The reversal is recognised in profit or loss.

2.11 Derecognition of Financial Assets and Liabilities

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when any one of the following three conditions is met:

` The contractual rights to receive cash flows from the financial asset expire.
` The Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them immediately in full to a third party under a "pass-through" arrangement pursuant to IAS 39.19.
` The Group has transferred the contractual rights to receive cash flows of a financial asset and has either (a) transferred substantially all the risks and rewards of ownership of the financial asset or has (b) neither transferred nor retained substantially all risks and rewards of ownership of the asset, but has transferred control of the asset.

When the Group transfers its contractual rights to receive the cash flows of an asset, but neither transfers nor retains substantially all the risks and rewards of ownership of the asset, and also retains control of the transferred asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement.

Financial liabilities are derecognised if the contractual obligation underlying the liability is discharged, cancelled or expires. If an existing financial liability is exchanged with another financial liability to the same lender with substantially different terms, or if the terms of an existing liability are changed substantially, then such an exchange or change is treated as an extinguishment of the original liability and the recognition of a new liability. The difference between the two carrying amounts is recognised in profit or loss.

2.12 Receivables and Other Assets

Receivables and other assets are carried at their nominal value. Adequate flat-rate specific bad debt allowances are recognised to account for the credit risk from non-performing lease receivables.

The Group generally treats a lease as a "non-performing lease receivable" as soon as the second lease payment is missed. The lease is then usually terminated. The present value of the outstanding payments is claimed as damages and an impairment loss is recognised on that amount.

2.13 Property, Plant and Equipment

Property, plant and equipment are recognised at cost plus directly attributable costs net of accumulated depreciation and accumulated impairment losses. Due to the voluntary early application of the revised IAS 23, financing costs are recognised from the beginning of fiscal year 2008 for the first time as far as the necessary requirements are met. In prior periods, in accordance with the option allowed in the previous IAS 23, these were recognised as an expense in the period in which they occurred, and not as an asset. Property, plant and equipment are subject to straight-line depreciation over their expected economic life. When property, plant and equipment are sold or retired, their cost and accumulated depreciation are eliminated from the accounts and any gain or loss resulting from their disposal is recognised in the consolidated income statement.

The depreciation rates are based on the following economic lives:

`	Office buildings	33 years
`	Furniture and fixtures
	IT hardware	3 years
	Vehicle fleet	4–5 years
	Leasehold improvements	10 years
	Other (office equipment)	3–20 years

The useful life and depreciation method are reviewed periodically to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from items of property, plant and equipment.

2.14 Goodwill

Goodwill resulting from acquisitions is initially measured at cost which is the excess of the purchase price over the fair value of the identifiable assets, liabilities and contingent liabilities of the acquired entity as of the date of acquisition plus the directly attributable acquisition costs.

Goodwill was amortised straight-line over its economic life until December 31, 2004. Following the implementation of IFRS 3, all goodwill was frozen at the value recognised as of December 31, 2004 and amortisation ceased at this time. This fixed value is now considered to be the new historical cost.

Instead of straight-line amortisation / after initial recognition, all goodwill is tested for impairment at least once a year pursuant to IAS 36 to prove its adequate valuation (impairment-only approach). This regular impairment test is conducted in the third quarter of each year on the basis of the six-month figures. If there are indications that goodwill might be impaired, more frequent tests must be conducted in addition to the mandatory annual impairment test.

Acquisitions in Fiscal Year 2008

Effective January 1, 2008, GRENKELEASING acquired all of the shares in GRENKELEASING, in accordance with the purchase agreement. Sp.z o.o, Poznan, Poland, and Grenke Leasing Ltd., Guildford, UK. The dates of purchase (date control was obtained) as defined in IFRS 3 were January 24, 2008 and January 30, 2008, respectively. Both entities had been part of the GRENKELEASING AG franchise system before they were acquired. Both companies operate in selling small-ticket leasing with a strong focus on IT equipment. The fair values of the identifiable assets and liabilities at the acquisition date and the corresponding carrying amounts immediately before the date of acquisition of the companies are as follows: The IFRS carrying amount at the date of acquisition in line with IFRS 3.67 is not shown, since up to the date of acquisition both companies had prepared their accounts exclusively according to local law and therefore an IFRS value was first determined for the purposes of initial consolidation in connection with GRENKELEAS-ING.

2.14.1 GRENKELEASING Sp.z o.o, Poznan / Poland

EURk	Fair value under IFRSs	Carrying amount
Intangible assets (dealer network)	1,330	2
Property, plant and equipment	84	114
Trade receivables	2	2
Lease receivables	16,965	15,893
Cash on hand and balances with banks	1,136	1,136
Deferred tax assets	404	171
Other assets	195	195
Total assets	20,116	17,513

Liabilities from the refinancing of lease receivables	15,703	15,703
Trade payables	386	386
Deferred tax liabilities	915	464
Other liabilities	112	112
Total liabilities	17,116	16,665

Net assets	3,000
Goodwill arising on acquisition	4,978
Total acquisition cost	7,978

The acquisition cost of the merger with GRENKELEASING Sp.z o.o totalled EUR 7,978k and included costs directly attributable to the business combination.

Acquisition cost	EURk
Purchase price	7,881
Cost directly attributable to the acquisition	97
Total	7,978

EURk
1,136
7,978
6,842

Goodwill of EUR 4,978k was disclosed.

2.14.2 Grenke Leasing Ltd., Guildford / UK

EURk	Fair value under IFRSs	Carrying amount
Intangible assets (dealer network)	618	0
Property, plant and equipment	378	93
Trade receivables	11	11
Lease receivables	21,296	19,718
Cash on hand and balances with banks	336	336
Deferred tax assets	1,656	0
Other assets	176	176
Total assets	24,471	20,334

Liabilities from the refinancing of leasing business	23,959	23,959
Trade payables	645	645
Deferred tax liabilities	967	0
Other liabilities	173	173
Total liabilities	25,744	24,777

Net assets	-1,273
Goodwill arising on acquisition	2,311
Total acquisition cost	1,038

The acquisition cost of the merger with Grenke Leasing Ltd. totalled EUR 1,038k and included costs directly attributable to the business combination.

Acquisition cost	EURk
Purchase price	1,000
Cost directly attributable to the acquisition	38
Total	1,038

Cash outflow on acquisition	EURk
Net cash acquired with the subsidiary	336
Cash paid	1,038
Net cash outflow	702

Goodwill of EUR 2,311k was disclosed.

The two companies' combined contribution to profits since the date of first-time consolidation amounts to a loss of EUR 76k. On the assumption that the date of acquisition for both mergers was at the start of the current period (January 1, 2008), the contribution of the acquired enterprises to the net profit of the Group is a loss of EUR 76k, with the contribution to income on lease receivables being EUR 6,692k.

Goodwill includes the fair value of expected synergies and growth opportunities from the acquisition. The dealer network is disclosed under intangible assets in accordance with IAS 38. It is identifiable and expected to generate future economic benefits. The amortisation period is six years based on past operating experiences. Receivables from finance leases were measured at their present values taking into account the refinancing interest rate valid on the acquisition date, the probability of default, and other related risks.

2.15 Intangible Assets

2.15.1 Licenses, Software

Licenses are carried at cost plus acquisition charges. The cost of software is capitalised and treated as an intangible asset if it is not an integral part of the related hardware. As licenses and software have limited useful lives, they are subject to straight-line amortisation over their economic life, generally three years.

2.15.2 Internally Generated Intangible Assets

An intangible asset developed as part of a project is only recognised if the Group is able to prove the technical feasibility of completing the intangible asset for internal use or sale and the intention to complete the intangible asset and use or sell it.

In addition, the generation of future economic benefits by the asset, the availability of resources to complete the asset, and the ability to measure the expenditure attributable to the intangible asset during its development must exist.

Internally generated intangible assets are measured at cost. The cost comprises all directly attributable costs necessary to create, produce, and prepare the asset to be capable of operating in the manner intended.

The capitalised amounts are amortised straight-line over the period during which the project is expected to generate revenue or during which the software can probably be amortised. Given the technical developments expected in future years, the economic life is assumed to be three years. Before an internally generated asset is used, it is tested for impairment once a year.

2.15.3 Dealer Network

With the acquisition of GRENKELEASING Sp.z o.o, Poznan, Poland and of Grenke Leasing Ltd., Guildford, UK, GREN-KELEASING AG acquired a dealer network of PLN 4,779k and GBP 453k respectively (equivalent to EUR 1,948k in total), which is amortised straight-line over its economic life of 6 years.

The initial valuation of the dealer network used the cost approach system. Estimated acquisition costs for the dealer portfolio of each country were used. In addition, we have evaluated the carrying amount using our contribution margin calculation.

2.16 Impairment of Non-Financial Assets

Assets within the meaning of IAS 36.1 are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognised as soon as the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the higher of an asset's net selling price and its value in use. The net selling price is the amount obtainable from the sale of an asset in an arm's length transaction less the costs of disposal.

Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. The recoverable amount is estimated for individual assets or, if this is not possible, for the cash-generating unit to which the asset belongs.

The carrying amounts of goodwill will be reviewed to assess the probability of continuing future benefits in accordance with the rules described in Note 2.14. Impairment is recognised in net profit or loss if the value in use is lower than the carrying amount of the respective cash-generating unit. If the reason for an impairment recorded in a prior period ceases to apply, an impairment loss is reversed. Exceptions to this rule exist only for impairments of goodwill which may, on no account, be reversed.

2.17 Provisions

Provisions are carried at their probable settlement amount if a present obligation (legal or constructive) exists for the Group due to an event occurring prior to the balance sheet date, it is probable that settlement of the obligation will lead to an outflow of resources embodying economic benefits, and if a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

2.18 Pensions and Other Post-Employment Benefits

In accordance with Swiss law, the Group has set up a defined benefit pension plan in Switzerland which requires contributions to be made to separately administered funds. The obligation under the defined benefit plans is calculated using the projected unit credit method. Actuarial gains and losses are recognised under equity in accordance with IAS 19.93A.

The carrying amount of the asset or liability under a defined benefit plan is the aggregate of the present value of the defined benefit obligation and the fair value of plan assets out of which the obligations are to be settled directly. Due to their immateriality, pensions are shown under other non-current liabilities.

Contributions to defined contribution plans are recognised as an expense when an employee has rendered service. They include contributions to statutory pension schemes and direct insurance premiums.

2.19 Tax

Current Tax Assets and Liabilities

Current tax assets and liabilities for current and prior periods are measured at the amount expected to be recovered from or paid to the tax authorities. They are calculated based on the tax rates and tax laws applicable as of the balance sheet date.

Deferred Tax Liabilities and Assets

Deferred tax liabilities are calculated using the liability method in accordance with IAS 12. The deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of an asset or a liability for financial reporting purposes and its tax base.

Deferred tax assets for previously non-utilised loss carryforwards are recognised if it is probable that taxable profit will be available to utilise these carryforwards. Deferred tax assets and liabilities are recognised on the basis of tax rates anticipated for the period in which the temporary differences will reverse. For this purpose, tax rates have been used which were applicable by the balance sheet date or will be applicable in the near future.

Deferred tax relating to items which are recognised directly in equity is recognised in that position and not in the income statement. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the entity expects, at the balance sheet date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are not discounted and are classified as non-current assets or liabilities in the consolidated balance sheet.

Value Added Tax

Revenue, expenses and assets are recognised net of VAT, with the following exceptions:

` Where the VAT incurred on a purchase of assets or services is not recoverable from the tax authorities, in which case the VAT is recognised as part of the cost of the asset or as part of the expense item.
` When receivables and liabilities are stated with VAT.

The net VAT recoverable from, or payable to, the tax authorities is stated under other receivables or liabilities in the consolidated balance sheet.

Trade tax

2.20 Revenue Recognition

Income From Leasing

Reference is made to the information in Note 2.8.2

Income from Insurance Business

Income from insurance business comprises premiums for insurance policies, which the lessees must conclude via GRENKELEASING if they do not insure the leased assets themselves. The insurance premiums are collected annually; these amounts are deferred and released to income pro rata temporis.

Sale of Lease Assets

Revenues from sales are recognised upon transfer of benefits and burdens.

Interest Income

Interest income from the leasing business is recognised when interest accrues under the effective interest method.

2.21 Significant Judgement

Using the accounting policies, the senior management has made the following judgements, which substantially influence the recognition and amounts in the financial statements. This does not include such decisions which include estimates.

Leasing:

Based on the contractual obligations the Group as lessor has come to the conclusion, that during the basic lease term in almost all leasing contracts all relevant opportunities and risks related to the ownership of a leasing asset is transferred to the lessee. This means that these lease contracts are dealt with entirely as finance leases.

Asset Backed Commercial Paper Programmes ("ABCP Programmes"):

For refinancing, the Group uses various ABCP programmes. These are special purpose entities established by various banks which purchase lease receivables from GRENKELEASING Group companies, bundle these and then issue shortterm commercial papers for their own refinancing. As part of an analysis of the contractual terms of the individual programmes, the Group reviewed a potential consolidation requirement in line with SIC-12 "Consolidation – Special Purpose Entities".

It is true that this financing structure provides the Group access to a broader form of refinancing and thus to corresponding benefits. However, the organising banks carry relevant and material risks due to the liquidity commitments they provide. After weighing the benefits created for GRENKELEASING against the risks borne in relation to the assessment in accordance with SIC – 12, consolidation in the Group (consolidation) should be ruled out.

In addition, in the assessment of the evaluation of the consolidation requirement it was taken into account that the legal owner of individual special purpose entities is a trust. This uses the services of various legal offices which are responsible for the relevant management on behalf of the trust. There is no possibility of the Group exercising influence over the trust or the management of the special purpose entities.

Refinancing via the ABCP programmes is based on the contractual sale of future lease payments. In the assessment according to IAS 39.17 ff. as to whether a derecognition of the underlying financial assets should be undertaken, the Group must evaluate to what extent it transfers risks and rewards from the underlying financial assets to the purchasing vehicle. Due to the opportunity-reward ratio in connection with lease claims, there is no derecognition in the context of the sale.

For this reason the use of refinancing via ABCP programmes in GRENKELEASING's financial statements is accounted for as a loan. There is no off-balance sheet recognition.

2.22 Use of Assumptions and Estimates

In preparing the consolidated financial statements, assumptions and estimates have been made which have had an effect on the recognition and carrying amounts of assets, liabilities, income, expenses, and contingent liabilities.

Assumptions and estimates generally relate to the uniform determination of useful lives of assets within the group, the measurement of provisions, the recoverability of receivables from terminated contracts, the recognition of realisable residual values for leased assets, the identification of parameters for assessing the ongoing value of intangible assets and other non-financial assets as well as and the probability of future tax benefits. The actual figures may in some cases differ from the assumptions and estimates. Any changes will be recognised in profit or loss as and when better information is available.

The main estimating uncertainties and the associated disclosure requirements are in the following areas:

` Assumptions made in impairment tests for measuring goodwill.
` Measurement of non-performing lease receivables on the basis of the recoverability rate.
` Use of estimated residual values at the end of the lease term to determine the present value of lease receivables.
` Recognition of lease assets for sale at estimated residual values.
` Recognition and measurement of deferred tax on loss carryforwards

The cash flows used to measure goodwill under the discounted cash flow method are based on current business plans and internal plans for the next five years. This involved making assumptions as to future revenues and costs.

Assumptions as to future investments in the Company's operations were made on the basis of past figures, and past income patterns were projected into the future. If significant assumptions differ from actual figures, adjustments may have to be made in the future. Average pre-tax costs of capital of 9.2 percent (FY 2007: 10.1 percent) were used to discount the cash flows.

Non-performing lease receivables are carried at nominal value less appropriate bad debt allowances. The amounts of bad debt allowances are determined using percentages and processing categories. Percentages are calculated using statistical methods. They are reviewed once a year for validity. Processing statuses are grouped together in processing categories set up with a view to risk. The following table lists the processing categories:

Category	Description
0	Current contract not in arrears
1	Current contract in arrears
2	Terminated contract with serviced instalment agreement
3	Terminated contract (recently terminated or court order for payment applied for)
4	Legal action (pending or after objection to court payment order)
5	Order of attachment issued / Debt-collecting agency commissioned
6	Statement in lieu of oath (applied for or issued) and insolvency proceedings instituted but not completed
7	Derecognised
8	Being settled (not terminated)
9	Discharged (completely paid)

A decrease in value is assumed for categories 2 to 7 as the contracts have been terminated due to defaults in payment. The allowance rates range between 5 percent and 100 percent.

Estimated residual values are used to determine the present value of lease receivables. Estimated residual values comprise anticipated sales proceeds and any revenues generated in a renewal period. Residual values are calculated upon conclusion of the corresponding lease contracts on the basis of the anticipated values. Proceeds are a best estimate based on statistical analyses. If the post-transaction recoverable amount is lower than expected (from sale and subsequent lease), the lease receivables are written down. However, an increase in recoverable amount is not recognised.

Lease assets for sale are measured on the basis of the average sales proceeds per age group realised in the past fiscal year in relation to the original acquisition cost.

Non-guaranteed residual values are used to calculate lease receivables in accordance with the definition in IAS 17. They are determined on the basis of past experience and statistical methods. Based on experience, residual values of additions until end-2006 range between 11 percent and 15 percent of historical cost, depending on the term of the lease.

In fiscal year 2007, this classification was split further into several groups according to the contract term. For additions from 2007 onward, the residual values range between 7.7 and 28.4 percent of historical cost.

Lease assets for sale are measured at historical residual values, taking into account their actual saleability. As of the balance sheet date, the residual values used amounted to between 6.5 percent and 22.4 percent of the historical cost (FY 2007: between 6.3 percent and 22.6 percent). If a sale is considered unlikely due to the condition of the asset, the asset is written off and recognised as an expense.

Deferred tax assets are recognised for all unused tax loss carryforwards to the extent to which it is likely that taxable income will be available, meaning that the loss carryforwards can in fact be used. In calculating the level of the deferred tax assets considerable use of judgement is required on the part of the management with regard to the expected occurrence and level of the future taxable income, as well as future tax planning strategies.

3. NET INTEREST INCOME FROM LEASING BUSINESS

3.1 Income from interest on the leasing business

Income from interest on the leasing business amounts to EUR 110,650k (FY 2007: EUR 96,091k). This includes EUR 2,532k (FY 2007: EUR 3,192k) from interest on loans to franchisees.

3.2 Expenses from Interest on the Leasing Business

Interest expense from refinancing the lease business amounts to EUR 42,606k (FY 2007: EUR 33,702k). This item also includes the interest income of EUR 2.532k (FY 2007: EUR 1,162k) generated by the loans issued under the ABCP programmes and the ABS bond (asset-backed securities) (see Notes 16 and 23).

4. EXPENSES FROM SETTLEMENT OF CLAIMS

Flat-rate specific bad debt allowances are calculated based on historical rates for the collectability of a receivable in conjunction with its categorisation (percentage-of-receivables approach).

EURk	2008	2007
Write-offs and net provision to specific bad debt allowances	18,943	15,838
Income from settlement of claims	23,257	17,719
Expenses from derecognition of performing lease receivables	24,424	19,020
Total	20,110	17,139

5. PROFIT FROM INSURANCE BUSINESS

Revenues and expenses from the insurance business are comprised as follows:

EURk	2008	2007
Income from insurance business	21,778	18,499
Expenses from insurance business	1,627	1,766
Profit from insurance business	20,151	16,733

6. PROFIT FROM NEW BUSINESS

Revenues from new business are comprised as follows:

EURk	2008	2007
Recognition of new lease receivables	539,615	435,729
Share of revenues from prior leases	3,309	2,704
Revenues from processing fees	1,845	1,301
Revenues from special lease payments	2,618	668
Summe	547,387	440,402

Expenses from new business are comprised as follows:

EURk	2008	2007
Cost of newly acquired leased assets	512,800	413,114
Commissions paid to dealers	10,260	6,870
Total	523,060	419,984

EURk	2008	2007
Profit from new business	24,327	20,418

The cost of newly acquired leased assets represents all expenses related to the acquisition of the assets. Revenue from capitalising lease receivables includes the present value of fixed lease payments and the present value of expected or fixed income from the post transaction. Because almost all contracted lease contracts provide for full cost recovery, the present value of expected cash flows is equal to or greater than cost. Related costs are capitalised when the contract is concluded.

7. PROFIT FROM DISPOSALS

EURk	2008	2007
Revenues from subsequent leases	17,112	14,471
Depreciation of leased assets in the subsequent lease period	-14,671	-13,279
Accounting gains from the disposal of the lease receivables	-175	700
Total	2,266	1,892

Revenues from subsequent leases relate to lease income recognised after the end of the basic lease term. Accounting gains from the disposal of lease receivables result from the revenues of terminated contracts less the disposal of the lease receivables at their carrying amount.

8. PERSONNEL EXPENSES

The average number of staff during the fiscal year totalled 482 (FY 2007: 411). There are 35 employees related to the businesses acquired in fiscal year 2008. Part-time staff were converted into fulltime equivalents.

EURk	2008	2007
Salaries	23,141	18,147
Social security and other benefit costs	4,287	3,692
Total	27,428	21,839

Almost all company pensions in the Group are defined contribution schemes. Under defined contribution plans, the entity pays contributions to public or private pension insurance schemes on the basis of statutory or contractual requirements, or voluntarily. The entity does not have any other benefit obligations beyond payment of contributions. The current contribution payments are recognised as an expense for the respective year. In 2008, they came to EUR 1,113k (FY 2007: EUR 978k) and mainly comprised contributions to the statutory pension insurance scheme in Germany.

9. AMORTISATION/DEPRECIATION

EURk	2008	2007
Equipment	1,291	1,267
Office buildings	476	440
Other intangible assets	1,002	526
Total	2,769	2,233

10. SALES AND ADMINISTRATIVE COSTS (EXCLUDING PERSONNEL EXPENSES)

Sales and administrative costs break down into the following categories:

EURk	2008	2007
Operating expenses	6,654	5,782
Administrative costs	2,862	2,790
Consulting and audit fees	2,411	2,674
Selling expenses (excluding commissions)	4,205	3,261
Other taxes	955	861
Sales and administrative expenses (without personnel expenses)	17,087	15,368

Consulting and Audit Fees

The consulting and audit fees of EUR 2,411k (FY 2007: EUR 2,674k) include fees of the auditor of GRENKELEASING AG, Baden-Baden, Germany, totalling EUR 391k (FY 2007: EUR 385k). The auditor's fees in fiscal year 2008 break down as follows:

EURk	2008	2007
Audit services	271	188
Other audit-related services	98	113
Other services	22	84
Total	391	385

EUR 78k of the total fees (FY 2007: EUR 51k) was not related to the period.

Expenses From Rent and Lease Contracts

Expenses of EUR 4,497k (FY 2007: EUR 3,810k) were incurred from rent and lease contracts in the fiscal year. They are primarily recognised under operating expenses and mainly relate to the rental of offices for branches and company car leases.

11. OTHER OPERATING INCOME

Other operating income breaks down as follows:

EURk	2008	2007
Franchise fees received	511	496
Court costs allocated to lessees	127	128
Other items	688	546
Total	1,326	1,170

12. TAX EXPENSES

EURk	2008	2007
Current taxes	9,532	23,877
Deferred taxes	1,996	-11,187
Total	11,528	12,690

Current taxes include expenses relating to previous years to the sum of EUR 114k. In 2007, a total of EUR 7,761k was included in the current tax expenses. EUR 387k of these expenses are from the final assessment of the French subsidiary und EUR 795k from the Irish subsidiary.

GRENKELEASING used the commercial tax bank privilege for the 2008 period (see Note 2.19). In comparison to non-application, this resulted in a EUR 607k lower tax expense for the year under review. Furthermore, deferred taxes amounting to EUR 616k were reversed as a result of applying the commercial tax bank privilege.

Reconciliation Between The Average Effective Tax Rate And The Expected Tax Rate

Reconciliation of the expected applicable tax rate of GRENKELEASING AG to the effective tax rate related to EBT (100 percent) is as follows:

Applicable tax rate	2008	2007

Trade tax	14.19%	16.92%
Corporate income tax (25 percent on income after trade tax) for 2007	n.a.	20.77%
Corporate income tax 2008*	15.00%	n.a.
Solidarity surcharge (5.5 percent of corporate income tax)	0.83%	1.14%
Average expected tax rate GRENKELEASING AG	30.02%	38.83%

Tax increases due to non-deductible expenses	0.12%	0.15%
Changes due to foreign taxes	-2.08%	-7.15%
Balance of tax reductions and increases due to changes in tax rates**	-1.13%	-7.38%
Expense from the amendment of deferred tax on loss carryforwards	0.00%	1.45%
Reversal of deferred trade tax (Sec. 19 of the Trade Tax Implementation Regulations)	-1.38%	0.00%
Back payments of tax from prior years***	0.26%	2.43%
Average effective tax rate for the Group	25.81%	28.33%
* Due to the application of the commercial tax bank privilege, treatment for commercial tax purposes is not included (see Note 2.19)

The main change in tax rates used to calculate deferred taxes was the following:
GRENKE Locazione S.r.l., Milan / Italy	Tax rate 2008	31.40%	(2007: 37.50%)
GRENKE LEASING S.r.l., Milan / Italy	Tax rate 2008	31.40%	(2007: 37.50%)
GRENKELEASING AG, Germany	Tax rate 2008	30.02%	(2007: 30.18%)
WEBLEASE NETBUSINESS AG	Tax rate 2008	30.02%	(2007: 30.18%)

*** Backpayments of tax for prior years in 2008 amounted to EUR 114k (FY 2007: 1,080).

13. EARNINGS PER SHARE

The calculation of both diluted and basic earnings is based on the net profit for the period. The average number of shares in fiscal year 2008 was calculated as the number of ordinary shares and the proportionate number of ordinary shares that may be issued in exchange for warrants. There was no dilutive effect in fiscal year 2008.

No.	2008	2007
Shares outstanding at beginning of period	13,684,099	13,679,679
Average number of new shares issued under the stock option programme	0	2,775
Average number of shares outstanding at end of period (basic)	13,684,099	13,682,454
Average number of shares outstanding at end of period (diluted)	13,684,099	13,682,454
Shares outstanding at end of period	13,684,099	13,684,099

14. FINANCIAL INSTRUMENTS WITH POSITIVE FAIR MARKET VALUE

EURk	Dec. 31, 2008	Dec. 31, 2007
Hedge derivatives	0	1,688
Non-hedge derivatives	7,093	1,033
Total	7,093	2,721

All contracted interest rate swaps are disclosed as hedge derivatives. Non-hedge derivatives relate exclusively to forward exchange contracts in foreign currencies with a positive fair value as well as interest caps held by the company as of the balance sheet date. Details of interest and currency derivatives can be found under Note 32.

15. LEASE RECEIVABLES

EURk	Dec. 31, 2008	Dec. 31, 2007
Outstanding minimum lease payments	1,089,135	939,803
+ Non-guaranteed residual values	158,934	145,490
Gross investment	1,248,069	1,085,293
- Unrealised (outstanding) finance income	183,242	155,129
Net investment	1,064,827	930,164
- Present value of non-guaranteed residual values	118,334	108,845
Present value of minimum lease payments	946,493	821,319

EURk	Less than 1 year	1 to 5 years	More than 5 years
Gross total investment	454,981	785,791	7,297
Gross total investment (previous year)	395,202	684,133	5,958
Present value of outstanding minimum lease payments	320,417	621,874	4,202
Present value of outstanding minimum lease payments (previous year)	280,428	537,632	3,289

The reconciliation of gross investment only contains contracts still in effect on the balance sheet date. The following adjustments have to be made to reconcile net investment to the carrying amount of lease receivables disclosed in the balance sheet:

Dec. 31, 2008	Dec. 31, 2007


930,195	876,755
134,632	53,440

1,064,827	930,195


139,435	134,248
-69,572	-65,790
69,863	68,458
27,514	17,103
15,283	11,916
11,001	10,700
14,704	14,482
78,391	69,863

1,000,058	945,213
	1,000,058
	1,143,218

* Item contains exchange differences of 200 EURk.

	Present value of minimum lease	Present value	Other receivables	Carrying
EURk	payments	of residual values	from lessees	amount
2007
Current lease receivables	280,428	37,162	69,863	387,454
Non-current lease receivables	540,921	71,683	0	612,604
Prior year total	821,349	108,845	69,863	1,000,058

2008
Current lease receivables	320,417	40,060	78,391	438,868
Non-current lease receivables	626,076	78,274	0	704,350
Total (2008)	946,493	118,334	78,391	1,143,218

Receivables from non-performing contracts are included in current lease receivables.

Overdue on the balance sheet date in the following time bands Lease receivables EUR m Net carrying amount Thereof overdue on the balance sheet date Receivables subject to bad debt allowances on the balance sheet date < 90 days Between 91 and 180 days Between 181 and 360 days Between 1 and 5 years > 5 years As of Dec. 31,2007 Not impaired 7.2 - - 5.2 0.5 0.5 0.9 0.0 Impaired 62.7 132.3 69.6 5.7 5.1 10.1 78.3 33.1 Total 69.9 132.3 69.6 10.9 5.6 10.6 79.2 33.1 As of Dec. 31, 2008 Not impaired 8.1 6.0 0.7 0.4 0.9 0.0 Impaired 70.3 143.6 73.3 8.6 6.6 11.7 72.0 44.7 Total 78.4 143.6 73.3 14.6 7.3 12.1 72.9 44.7

The following table lists non-performing receivables with the number of days overdue.

There were no indications that performing lease receivables were impaired as of the balance sheet date.

The maximum credit risk, without taking into account security, credit assessment systems and other tools, is the carrying amount of the receivables.

As of December 31, 2008, there were no indications that financial assets (in particular lease receivables) which are neither impaired nor overdue will be defaulted upon. Thanks to effective risk management and a very diversified contract and lessee portfolio, the lease receivables have a particularly diversified risk structure with regard to credit risk.

The following table shows changes in write-downs on current and non-current receivables.

EURm	Dec. 31, 2008	Dec. 31, 2007
Write-downs at the beginning of the fiscal year	69.6	65.8
Allocation to specific bad debt allowance	14.9	14.5
Utilisation of specific bad debt allowance	3.8	5.7
Reversal of specific bad debt allowance	7.2	5.0
Currency translation differences*	-0.2	0.0
Write-downs at year-end	73.3	69.6

* Due to rounding, the currency translation difference for 2007 is stated as zero in this table. The actual currency translation difference for 2007 is EUR 20k.

16. OTHER CURRENT FINANCIAL ASSETS

EURk	Dec. 31, 2008	Dec. 31, 2007
Receivables from franchisees (refinancing)	30,475	34,531
Current portion of subordinated loan ABS bond	1,363	2,549
Direct debits at end of month	209	422
Total	32,047	37,502

Please see Note 23 for details of the receivables from franchisees and the subordinated loan. None of the receivables is overdue or impaired.

17. TRADE RECEIVABLES

Trade receivables of EUR 5,955k (FY 2007: EUR 3,441k) mainly relate to receivables from resellers and third parties resulting from the disposal of lease assets. EUR 850k (FY 2007: EUR 307k) of these receivables are overdue and EUR 491k (FY 2007: EUR 242k) of this amount is impaired.

Trade receivables include other receivables from franchisees to a sum of EUR 3,513k (FY 2007: EUR 948k). In the prior year this position was included in other current assets. EUR 2,549k of this (FY 2007: EUR 496k) relates to the clearing account with the franchise operations in Norway. The shareholder of the franchisee has provided a letter of comfort for this receivable dated January 13, 2009.

18. TAX RECEIVABLES

EURk	Dec. 31, 2008	Dec. 31, 2007
Corporate income tax refund claim	4,485	4,644
Trade tax refund claim	502	1,408
Refund from the tax audit in France	0	2,140
Other items	224	59
Total	5,211	8,251

The corporate income tax and trade tax refund claims are the result of prepayments being too high. With regard to France, please also see Note 37. The previous year's value was adjusted to reflect the refund from the tax audit, since this was included in other current assets in the previous year.

19. OTHER CURRENT ASSETS

EURk	Dec. 31, 2008	Dec. 31, 2007
VAT refund claim	17,237	21,881
Prepaid expenses	519	474
Other items	1,193	1,558
Total	18,949	23,913

20. PROPERTY, PLANT AND EQUIPMENT

20.1 Overview For Fiscal Year 2007

				Leasing assets
EURk	Land and buildings	Furniture and fixtures	Assets under construction	from operating leases	Total
Cost Jan. 1, 2007	10,771	8,828	4,154	10,748	34,501
Currency translation differences	0	8	0	0	8
Additions	812	1,666	850	16,445	19,773
Disposals	0	639	0	13,279	13,918
Reclassifications	5,004	0	-5,004	0	0
Cost Dec. 31, 2007	16,587	9,863	0	13,914	40,364

Accumulated depreciation
Jan. 1, 2007	1,363	5,045	0	0	6,408
Currency translation differences	0	4	0	0	4
Additions	440	1,267	0	13,279	14,986
Disposals	0	585	0	13,279	13,864
Reclassifications	0	0	0	0	0
Accumulated depreciation
Dec. 31, 2007	1,803	5,731	0	0	7,534

Net carrying amounts Dec. 31, 2007	14,784	4,132	0	13,914	32,830
Net carrying amounts Jan. 1, 2007	9,408	3,783	4,154	10,748	28,093

20.2 Overview For Fiscal Year 2008

	Land and	Furniture and	Assets under	Leasing assets from operating
EURk	buildings	fixtures	construction	leases	Total
Cost Jan. 1, 2008	16,587	9,863	0	13,914	40,364
Currency translation differences	0	17	0	0	17
Additions	36	1,993	0	17,680	19,709
Of which additions in the context of an acquisition	0	130	0	332	462
Disposals	0	715	0	14,671	15,386
Reclassifications	0	0	0	0	0
Cost Dec 31, 2008	16,623	11,158	0	16,923	44,704

Accumulated depreciation
Jan. 1, 2008	1,803	5,731	0	0	7,534
Currency translation differences	0	22	0	0	22
Additions	476	1,291	0	14,671	16,438
Disposals	0	333	0	14,671	15,004
Reclassifications	0	0	0	0	0
Accumulated depreciation Dec. 31, 2008	2,279	6,711	0	0	8,990
Net carrying amounts Dec. 31, 2008	14,344	4,447	0	16,923	35,714

The operating leases are mainly lease contracts whose basic lease term has expired and which may be terminated at any time. Depreciation on lease assets from operating leases is shown in profit from disposals (see Note 7).

21. GOODWILL

EURk	2008	2007
Acquisition cost as of Jan. 1	2,157	2,091
Currency translation differences	-1,207	66
Additions in the context of an acquisition	7,298	0
Disposals	0	0
Reclassifications	0	0
Acquisition cost as of Dec. 31	8,239	2,157

Accumulated depreciation as of Jan. 1	0	0
Currency translation differences	0	0
Additions	0	0
Disposals	0	0
Reclassifications	0	0
Accumulated depreciation as of Dec. 31	0	0

Net carrying amounts Dec. 31, 2008	8,239
Net carrying amounts Jan. 1, 2008	2,157
Net carrying amounts Dec. 31, 2007		2,157
Net carrying amounts Jan. 1, 2007		2,091

21.1 Goodwill Impairment

A scheduled impairment test was conducted on the basis of the half-year figures as of June 30, 2008 in accordance with IAS 36 on the goodwill acquired in business combinations. GRENKELEASING tests goodwill for impairment at least once a year. The basic assumptions which are used in calculating cash flow which can be generated in the respective entity are based on growth rates of up to 50 percent in new business and on discount factors after tax of 6.07 percent. Discounting factors are calculated based on the WACC (weighted average cost of capital).

Forecasts for the development of new business have proved to be stable in the past. Due to the particular business alignment of the Group, the forecasting parameters available on the market are not suitable for providing forecasting quality, since they relate only to the entire leasing market, which is heavily influenced by the leasing of property, capital goods and vehicles. Forecasts for the development of new business are therefore based on the Company's past experience. The recoverable amount of each of the cash-generating units was determined based on a value-in-use calculation using cash flow projections derived from five-year financial plans approved by senior management. A fair value less the costs of disposal is not currently available. Cash flows after a period of five years were integrated into calculations on the basis of the perpetual annuity.

The cash-generating units used as a basis for testing the impairment of goodwill are usually legal entities. The key parameters for determining their value are the future expectations with regard to the development of new business and profitability.

Carrying amounts of goodwill relate to the following cash-generating units:

EURk	Dec. 31, 2008	Dec. 31, 2007
WEBLEASE NETBUSINESS AG, Baden-Baden / Germany	379	379
GRENKELEASING s.r.o., Prague / Czech Republic	1,270	1,274
GRENKE LEASING S.r.l. und GRENKE Locazione S.r.l., Milan / Italy	504	504
Grenke Leasing Ltd., Guildford / Great Britain	1,779	n.a.
GRENKELEASING Sp.z.o.o, Poznan / Poland	4,307	n.a.
Total	8,239	2,157

21.2 Sensitivity of Assumptions

The fair value of a cash-generating unit where the major value drivers are cash flow generated and the discount rate is very sensitive to changes in the discount rate. The discount rate is largely determined on the basis of a risk-free interest rate, a market risk premium and a beta factor for systematic risk. These values were based on external sources of information. Fluctuations in the components stated above may affect the discount rate.

As part of the validation of the fair values determined for the cash-generating units, the major value drivers are reviewed annually for each unit. In addition, to test the resilience of the fair values a sensitivity test was performed on discount rates und growth rates of new business – the key determinants used for the discounted cashflow modelling. In this context, the management is of the opinion that realistic changes to the assumptions deployed for implementing impairment tests within the Group do not result in any impairment.

The changes to the parameters made due to the financial markets crisis since the routine impairment test on September 30, 2008 on the basis of the six-month figures do not affect the impairment of the individual cash-generating units. In particular the change in interest rate markets led to a lower risk-free interest rate. Furthermore, the beta factor that is to be taken into account when calculating the WACC fell, so that the discount rate saw an overall decrease on the basis of the balance sheet date. With all other assumptions remaining unchanged, this led to a higher fair value in the impairment test.

22. OTHER INTANGIBLE ASSETS

22.1 Overview For Fiscal Year 2007

EURk	Development costs	Software licenses	Dealer network	Total
Cost Jan. 1, 2007	659	1,179	0	1,838
Currency translation differences	0	-1	0	-1
Additions	183	626	0	809
Disposals	105	25	0	130
Reclassifications	0	0	0	0
Cost Dec. 31, 2007	737	1,779	0	2,516

Accumulated depreciation Jan. 1, 2007	216	828	0	1,044
Currency translation differences	0	0	0	0
Additions	251	275	0	526
Disposals	65	12	0	77
Reclassifications	0	0	0	0
Accumulated depreciation Dec. 31, 2007	402	1,091	0	1,493

Net carrying amounts Dec. 31, 2007	335	688	0	1,023
Net carrying amounts Jan. 1, 2007	443	351	0	794

22.2 Overview For Fiscal Year 2008

EURk	Development costs	Software licenses	Dealer network	Total
Cost Jan. 1, 2008	737	1,779	0	2,516
Currency translation differences	0	0	-322	-322
Additions	83	516	1,948	2,547
Disposals	0	35	0	35
Reclassifications	0	0	0	0
Cost Dec. 31, 2008	820	2,260	1,626	4,706

Accumulated depreciation Jan. 1, 2008	402	1,091	0	1,493
Currency translation differences	0	0	-51	-51
Additions	249	432	322	1,003
Disposals	0	35	0	35
Reclassifications	0	0	0	0
Accumulated depreciation Dec. 31, 2008	651	1,488	271	2,410
Net carrying amounts Dec. 31, 2008	169	772	1,355	2,296

Development costs mainly relate to internally developed factoring software and webshop programming. Additions to the Dealer network fully relate to the acquisitions closed in 2008.

23. OTHER NON-CURRENT FINANCIAL ASSETS

EURk	Dec. 31, 2008	Dec. 31, 2007
ABCP loans	64,844	26,541
Receivables from franchisees (refinancing)	21,310	37,777
Subordinated loan ABS bond	706	2,195
Reserve accounts ABS bond	2,500	2,500
Total	89,360	69,013

In addition to the liquidity reserve of between 8.0 percent and 9.2 percent, depending on country of origin and vehicle utilised of the volume of lease receivables sold for the purpose of refinancing, the ABCP loans and the ABS bond include loans to the SPEs which need to be granted as collateral for the refinancing volume under the respective agreements. These loans depend on the refinancing volume and on the origin of the receivables refinanced through the SPEs. The interest income generated in this connection is netted with the interest expense from refinancing liabilities.

The loans to franchisees (see Notes 16 and 36) are loans granted mainly to refinance the lease agreements concluded by the franchisees. By way of security for the loan receivables, the franchisees have assigned both title to the leased assets and the claim to lease receivables. The loans are therefore equivalent to a purchase of receivables. As such, interest income of EUR 2,532 generated from such loans is recognised as income from interest on leasing business. Loans granted in foreign currencies are translated using the closing rate.

In connection with the issue of the ABS bond, GRENKE FINANCE Plc. Dublin, Ireland, granted a subordinated loan of EUR 5,625k, which bears interest at a floating rate. The nominal amount of the loan was fixed until August 15, 2007 and will then be gradually reduced to 2.25 percent of the outstanding nominal amount of the tranches issued. An amount of EUR 1,363k was classified as current due to the expected pattern of repayment. In addition, GRENKE FINANCE Plc. was required to set up interest-bearing reserve accounts totalling EUR 2,500k. These assets are not considered to be impaired.

24. DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets and liabilities break down as follows:

Dec. 31, 2008	Dec. 31, 2007	2008	2007

11,599	9,559	-150	3,168
5,302	4,993	-155	-941
21	20	0	0
520	0	0	0
17,442	14,572	-305	2,227


47,199	42,966	2,814	-13,320
569	619	-513	-94
47,768	43,585	2,301	-13,414
		1,996	-11,187
30,326	29,013


17,442	14,572
47,768	43,585
		Balance sheet	Income statement

A total of EUR 2,937k of deferred taxes on loss carryforward relates to the subsidiaries in the UK, Belgium and Sweden. At these companies, deferred tax assets on loss carryforwards exceed deferred tax liabilities for temporary differences by a total of EUR 1,618k. However, based on the budgets of each subsidiary, we believe that sufficient taxable profit will be generated to enable these tax loss carryforwards to be utilised. This was likewise demonstrated in the other countries in which GRENKELEASING operates. In the Danish company, the deferred tax assets on tax loss carryforwards were limited to EUR 107k (FY 2007: EUR 67k) to match the deferred tax liabilities.

Deferred tax liabilities of EUR 655k were reversed directly in equity in the fiscal year (FY 2007: EUR 214k recognised), with no effect on income. These liabilities resulted from the cash flow hedge reserve recognised directly in equity. Deferred tax assets of EUR 1k (FY 2007: EUR 8k) were also taken into account in connection with the recognition of actuarial losses in equity.

In accordance with IAS 12, deferred taxes in consolidated financial statements on differences between the proportionate equity of a subsidiary recognised in the consolidated balance sheet and the carrying amount of equity investment for the subsidiary, are to be recognised in the parent company's tax balance sheet ("outside basis differences") if the difference is likely to be realised. Because both GRENKELEASING AG and the relevant subsidiaries are corporations, these differences are largely tax-free upon realisation in line with Article 8b of the Corporate Tax Act and are therefore of a permanent nature.

Also in the case of temporary differences (e.g. those resulting from the 5-percent global calculation in Article 8b of the Corporation Tax Act), in line with IAS 12.39 there should be no recognition of deferred tax liabilities unless – in the case of control on the part of the parent company - it is probable that these differences are reversed in the foreseeable future. Because this reversal is currently expected in relation to a partial amount for the subsidiary in Switzerland, only those deferred taxes amounting to EUR 26k (FY 2007: EUR 0k) were included in the balance sheet. No deferrals were recognised for the remaining differences of EUR 1,798k (FY 2007: EUR 1,129k).

25. ADDITIONAL INFORMATION ON FINANCIAL INSTRUMENTS

				Carrying amount in accordance with IAS 39		Carrying amount in accordance with IAS 17
Dec. 31, 2007 EURk	Measure ment category	Carrying amount Dec. 31, 2007	Fair value directly under equity	Fair value through profit or loss	Amortised cost
Assets
Cash on hand and balances with banks	L&R	53,395			53,395
Financial instruments with positive fair market value	AtFVtPL/n.a.	2,721	1,688	1,033
Lease receivables	L&R/n.a.	1,000,058			69,863	930,195
Other financial assets	L&R	106,515			106,515
Trade receivables	L&R	3,411			3,411
Other assets	n.a.	24,568

Aggregated categories
	L&R				233,184
	AtFVtPL/n.a.		1,688	1,033

				Carrying amount in accordance with IAS 39
Dec. 31, 2007 EURk	Measure ment category	Carrying amount Dec. 31, 2007	Fair value directly under equity	Fair value through profit or loss	Amortised cost
Liabilities
Liabilities from the refinancing of leasing business	oL	898,774			898,774
Trade payables	oL	7,410			7,410
Bank liabilities	oL	13,914			13,914
Financial instruments with negative fair market value	AtFVtPL/n.a.	1,261		1,261
Other liabilities	oL/n.a.	12,460			12,371
Aggregated categories
	oL				932,469
	AtFVtPL/n.a.			1,261

Abbreviations:

AtFVtPL: At fair value through profit and loss Financial assets and liabilities

L&R: Loans and receivables

n.a. Not applicable

oL Other liabilities

Net gains and losses Dec. 31, 2007 (EURk)	From interest	From dividends	Currency translation	Write downs	From disposal	Net gains and losses
Loans and receivables	828	11	-462	-6,012	-11,655	-17,290
At Fair Value through Profit and Loss			356		814	1,170
Other liabilities	-1,232		132			-1,100

				Carrying amount in accordance with IAS 39		Carrying amount in accordance with IAS 17
Dec. 31, 2008 EURk	Measure ment category	Carrying amount Dec. 31, 2008	Fair value directly under equity	Fair value through profit or loss	Amortised cost
Assets
Cash on hand and balances with banks	L&R	77,012			77,012
Financial instruments with positive fair market value	AtFVtPL	7,093		7,093
Lease receivables	L&R/n.a.	1,143,218			78,391	1,064,827
Other financial assets	L&R	121,407			121,407
Trade receivables	L&R	5,955			5,955
Other assets	n.a.	19,659
Aggregated categories
	L&R			7,093	282,765
	AtFVtPL
Liabilities
Liabilities from the refinancing of lease receivables	oL	1,051,065			1,051,065
Trade payables	oL	8,466			8,466
Bank liabilities	oL	12,512			12,512
Financial instruments with negative fair market value	AtFVtPL/n.a.	5,434	3,833	1,601
Other liabilities	oL/n.a.	8,045	8,111		8,021
Aggregated categories
	oL				1,080,064
	AtFVtPL/n.a.		3,833	1,601

Abbreviations:

AtFVtPL: At fair value through profit and loss Financial assets and liabilities

L&R: Loans and receivables

n.a. Not applicable

oL Other liabilities

Net gains and losses Dec. 31, 2008 (EURk)	From interest	From dividends	Currency translation	Write downs	From disposal	Net gains and losses
Loans and receivables	830	0	-7,420	-6,681	-14,997	28,268
At Fair-Value through Profit and Loss	72		5,554			5,706
Other liabilities	-769		-431			-1,200

The net gains from lease receivables comprise interest income, profit from new business and profit from disposals and stand at EUR 137,242k (FY 2007: EUR 118,401k). ). The net gains and losses from financial instruments include not only the changes in fair value (for forward exchange contracts shown as the effect from the currency translation and for interest hedges as interest effect), the results from accrued interest and from the early disposal in the context of an early sale.

26. CURRENT AND NON-CURRENT BANK LIABILITIES

GRENKELEASING's financial liabilities comprise liabilities from the refinancing of the leasing business, bank liabilities, and other financial liabilities.

EURk	Dec. 31, 2008	Dec. 31, 2007
Financial liabilities

Current financial liabilities
Liabilities from the refinancing of leasing business	441,847	340,666
- Liabilities from ABS/ABCP	178,170	151,698
- Bonds, revolving facilities, debentures and private placements	233,117	165,000
- Sales of receivables agreements	30,560	23,968

Current portion of non-current bank liabilities	4,692	5,705
Other current financial liabilities	2,682	2,233
Total current financial liabilities	449,221	348,604

Non-current financial liabilities
Liabilities from the refinancing of leasing business	609,218	558,108
- Liabilities from ABS/ABCP	269,957	220,066
- Bonds, debentures and private placements	306,043	318,000
- Sales of receivables agreements	33,218	20,042

Non-current bank liabilities	7,819	8,209
Total non-current financial liabilities	617,037	566,317

Total financial liabilities	1,066,258	914,921

The volume of non-current bank liabilities payable in one to five years and more was as follows as of December 31, 2008.

EURk		Total	1 to 5 years	More than 5 years	Secured amount
Type of liability
	2008	609,218	608,090	1,128	303,175
Liabilities from the refinancing of leasing business	2007	558,108	557,109	999	240,108
	2008	7,819	2,843	4,976	10,800
Bank liabilities	2007	8,209	2,389	5,820	10,800

The bank liabilities include the non-current portion of a loan totalling CHF 5,834k (originally CHF 11,724k) which was translated at the exchange rate on the balance sheet date. It runs from December 23, 2002 to June 30, 2016 and bears interest at 2.95 percent p.a. The loan is secured by a land charge of EUR 8,000k on the office building for Commerzbank Aktiengesellschaft, Baden-Baden, entered in the Oos land register under no. 6080.

A ten-year loan of EUR 5,500k bearing interest at 3.1 percent was raised to finance the construction of a new office building. Interest is payable quarterly in arrears. The first repayment on the loan was due on September 30, 2008; thereafter repayments are due semi-annually. 96 percent of the loan amount was paid out. A further land charge of EUR 2,800k was registered as security on October 11, 2006.

Current and non-current lease receivables totalling EUR 511,903k (FY 2007: EUR 510,251k) have been assigned to the refinancing institutions to secure the liabilities from the refinancing of the leasing business. Each individual item of security is assigned until the outstanding receivable on the lease has been settled. Then the collateral is reassigned. The items of security for assigned receivables are marked so that they can be clearly distinguished from non-assigned receivables.

Further details on the refinancing sources and the main categories of financial liabilities are given below:

26.1 ABS Bond and ABCP Programs

ABS Bond

To provide liquidity and ensure growth at attractive conditions, the first ABS bond amounting to EUR 250,000k with a term of six years was placed through the SPE GOALS (GRENKE Ongoing Assets Lease Securitisation) on August 4, 2006. The interest rate is variable at the three-month EURIBOR plus a spread ranging between 0.08 and 1.75 percent depending on the tranche.

With this type of refinancing, several tranches of bonds with different ratings (risk classes) are issued by the SPE. The size of the best rated tranche is a reflection of the quality of the leasing portfolio and internal risk management and directly impacts the costs of this type of financing. 85 percent (EUR 212,500k) of the bond was given the highest rating by Standard & Poor's (AAA) and Moody's (Aaa). The wholly-owned subsidiary of GRENKELEASING AG, GRENKE FINANCE Plc., Dublin, Ireland, subscribed to the last tranche (nominal value EUR 5,000k) of the ABS bond. As a result, funds of only EUR 245,000k flowed to the Group. The carrying amount of the total liability stood at EUR 37,622k on the balance sheet date (FY 2007: EUR 103,528 k).

GRENKELEASING does not de-recognise the future lease receivables sold as part of the ABS bond. In contrast to the ABCP programs, there is no repurchase of non-performing leases; however, the losses of receivables remain with the wholly-owned subsidiary GRENKE FINANCE Plc. and thus in the Group, due to the settlement mechanisms. For the ABS bond, the sale of the future lease receivables is treated as a loan and is shown as such on the balance sheet.

ABCP Programs

The GRENKELEASING Group has three asset-backed commercial paper programmes (ABCPs) with a total volume of EUR 512,200k as of the reporting date (previous year: EUR 575,000k). The ABCP programme of WestLB Compass Variety Funding Limited comprises a volume of EUR 250,000k. The volume of Kebnekaise Funding Limited, the ABCP programme of SEB AB, amounts to EUR 112,200k as of the reporting date. The SEB programme is effectively of a perpetual nature. The programme with WestLB runs until May 3, 2010. At the end of the 2008 fiscal year, 79% of the refinancing framework of the ABCP program was utilised (previous year: 45%).

The SPEs conclude various interest rate hedges (caps and swaps) to hedge the variable cash flows from the placement of commercial papers under the ABCP programs. Any costs incurred in this context are recharged to GRENKELEAS-ING. In return, the Company participates in the interest rate hedge as the benefit paid to the ABCP program resulting from the related hedge is passed on to GRENKELEASING via the excess spread. The costs incurred by GRENKELEASING are classified as transaction costs under IAS 39 and amortised over the term of the underlying refinancing packages.

The agreement with DZ-Bank for a new ABCP program (CORAL PURCHASING Limited) was signed on September 9, 2008. The contract largely corresponds with the agreements of the ABCP programs already in place and allows for a sale of receivables from German leases of up to EUR 150,000k. The first financing took place on October 22, 2008.

The ABCP program Rheingold No. 9 Limited, which was organised with Deutsche Bank AG and had been in place since December 1999, ended on 26 September 2008 by the buyback of all the leases still refinanced there in the amount of around EUR 22,000k. The derivatives previously used by the ABCP program to secure interest rates (interest rate caps) were transferred to Grenke Investitionen Verwaltungs-KGaA as part of processing. The nine interest rate caps currently have a nominal volume of EUR 51,339k and the positive fair value as of the reporting date was EUR 72k.

The three ABCP programs in place at the reporting date - with DZ Bank, WestLB and SEB AB - provide for the purchase of GRENKELEASING receivables from German, Austrian and French lessees. There is therefore no currency risk. The present value of the programs stood at EUR 410,505 k on the balance sheet date (FY 2007: EUR 268,236k). As the amount of financing provided is always identical to the balance of sold receivables (less discounts, etc.), the hedging strategy must be based on the sold receivables portfolio.

Unlike the sales of receivables described in Note 26.2, however, the interest rates on the assets and liabilities side do not match because the purchase of the receivables is financed via the ABCP programs in the commercial paper market. The reference rate for all programs is one-month EURIBOR, i.e. interest is variable. The programs' average interest rate in 2008 was 4.58 percent (FY 2007: 4.18 percent).

GRENKELEASING does not de-recognise the future lease receivables sold as part of the ABCP programs. Although from a legal perspective, all rights to the receipt of cash flows are transferred to the relevant SPEs, the Company retains all economic risks and rewards. This ensures that the rating and thus the interest on the refinancing liability remain constant. The sale of the future lease receivables is treated in all cases as a loan and is shown as such on the balance sheet. GRENKELEASING does not include any of the SPEs used under the ABCP programs or ABS bond in its consolidated financial statements. There is no off-balance sheet recognition (see Note 2.21).

26.2 Sales of Receivables Agreements

Such agreements are currently in place with Stadtsparkasse Baden-Baden, Commerzbank AG, UBS AG in Switzerland and with the Commerzbank subsidiary BRE-Bank SA in Poland. In all cases, they are concluded to refinance lease contracts with matching tenors. For this purpose, individual lease contracts with similar tenors are grouped together and lease receivables are purchased for the same tenor.

This ensures that at any time in the future the interest charge for GRENKELEASING is fixed and known for the entire tenor of the contract. There is therefore no interest risk. For this reason, derivatives are not used for this type of financing. There was no requirement to derecognise any items. The present value of the obligations is EUR 63,778 k (FY 2007: EUR 44,010k).

Effective May 30, 2008, the Polish subsidiary GRENKELEASING Sp.z o.o concluded a master agreement for local refinancing with a Polish bank. The maximum possible refinancing is PLN 74,000k based on a term-based swap rate plus a margin of 0.85 percent. The internal Group refinancing previously in place was therefore dissolved. As a result of the local refinancing, the Group no longer has an internal exchange rate risk from refinancing.

On September 25, 2008, the refinancing volume for receivables sales agreements with UBS AG, Switzerland was increased from CHF 50,000k to CHF 60,000k.

26.3 Bonds, Promissory Notes and Private Placements

Unless mentioned otherwise, the reference interest rate for the floating-rate bonds, promissory notes and private placements is three-month EURIBOR.

The relevant terms for bonds using the debt issuance program are as follows:

Debt-issuance-programme

		Term	Coupn	Discount	Nominal value Dec. 31, 2008	Nominal value Dec. 31, 2007
Description	from	to		EURk	EURk	EURk
Euro bond	27/04/2004	27/04/2009	4.75%	11	1,000	1,000
Euro bond	10/06/2004	10/06/2009	5.00%	215	20,000	20,000
Euro bond	22/03/2005	22/03/2010	Euribor + 0.60%	486	100,000	100,000
Euro bond	20/04/2006	20/04/2009	4.00%	360	100,000	100,000
Euro bond	06/06/2007	20/04/2009	Euribor + 0.20%	23	25,000	25,000

A bond with a nominal amount of EUR 100,000k was repaid on time effective April 30, 2008.

The bond of EUR 100,000k issued on March 22, 2005 entailed an unconditional and irrevocable guarantee for the proper and punctual payment of principal, interest and other amounts due on the debenture for GRENKELEASING AG.

		Coupn	Discount	Nominal value Dec. 31, 2008	Nominal value Dec. 31, 2007
from	to		EURk	EURk	EURk
06/12/2005	05/12/2010	3.77%	-	20,000	20,000
22/12/2005	22/12/2010	Euribor + 0.61%	62	17,000	17,000
16/08/2007	16/08/2010	Euribor + 0.48%	-	10,000	10,000
13/09/2007	06/12/2010	5.092%	-	15,000	15,000
25/10/2007	25/10/2010	5.09%	-	10,000	10,000
10/03/2008	10/03/2011	4.719%	57	25,500	-
10/03/2008	10/03/2011	Euribor + 0.85%	86	37,500	-
30/04/2008	30/04/2011	4.6905%	-	40,000	-
30/04/2008	30/04/2011	5.21%	15	10,000	-
30/07/2008	30/07/2011	6.05%	-	21,000	-
		Term

Promissory note loan (PNL)

In the third quarter of 2008, a fixed-interest promissory note loan with an interest rate of 6.05 percent and a nominal value of EUR 21,000k was concluded. Annual repayments of EUR 7,000k will be made over the three-year term.

GRENKELEASING AG became party to the agreement on the promissory note loan of EUR 20,000k raised on December 6, 2005 and has joint and several liability. GRENKELEASING AG has assumed the unconditional and irrevocable guarantee for the proper and timely payment of interest and principal and any other amounts payable for the debenture.

All debentures are bullet debt securities and are subject to constant rating. If the Standard & Poor's rating were to be downgraded, the interest rate on the EUR 20,000k fixed-interest debenture would be adjusted (raised) by between 0.5 and 1.5 percentage points. As a downgrading is not expected, no hedge has been concluded to date.

The discounts are released over the term of the debt securities using the effective interest method.

26.4 Revolving Credit Facility

On September 18, 2006, GRENKE FINANCE Plc., Dublin, Ireland, concluded three revolving credit facilities with three German banks. In the first quarter of 2008, two further credit facilities were concluded, both of which had a duration of one year, meaning that they will come up for extensions in the first quarter of 2009. The total volume of those facilities thus rose from EUR 90,000k to EUR 150,000k. Over the one-year term of the agreement, minimum amounts of EUR 5,000k can be drawn on at any time for a period of at least one month. Three of the loan facilities in place since 2006 with a total volume of EUR 90,000k were prolonged for a further year in September 2008 at the same conditions. Utilisation is disclosed under current liabilities from refinancing of the leasing business.

As of December 31, 2007, a total volume of EUR 80,000k (FY 2007: EUR 65,000k) was drawn on these credit lines, bearing interest at an average of 4.87 percent (FY 2007: 5.20 percent). The loans are repayable within one month and will therefore be repaid in January 2009 (see Note 39).

Revolving credit facilities are disclosed under refinancing liabilities.

27. FINANCIAL INSTRUMENTS WITH NEGATIVE FAIR MARKET VALUE

EURk	Dec. 31, 2008	Dec. 31, 2007
Derivatives in a hedge in line with IAS 39	3,833	94
Derivatives not in a hedge in line with IAS 39	1,601	1,167
Total	5,434	1,261

The Company discloses negative fair values in connection with interest rate swaps (see Note 32.3) and forward exchange contracts (see 32.2) in the current fiscal year. The forward exchange contracts are disclosed as non-hedge derivatives in terms of IAS 39. As of December 31, 2008, forward exchange contracts on the Swiss franc, Polish zloty, Swedish krone and Danish krone had a negative fair value of EUR 1,601k (FY 2007: negative fair value of EUR 1,167k on the Polish zloty, Norwegian krone and Czech koruna). These forward exchange contracts have an aggregate volume of EUR 17,278k (FY 2007: EUR 46,639k) and residual maturities of between 1 and 46 months.

As of the balance sheet date, all contracted interest rate swaps have a negative fair value of EUR 3,833k. All interest rate swaps are found in hedge accounting and have a high level of hedge effectiveness under IAS 39 on the balance sheet date.

28. TAX LIABILITIES

EURk	Dec. 31, 2008	Dec. 31, 2007
Corporate income tax	2,029	1,984
Trade tax	545	1,797
Total	2,574	3,781

29. DEFERRED LIABILITIES

This item mainly present deferred liabilities for personnel and consulting services.

	Currency translation
Jan. 1	differences	Allocation	Utilisation	Reversals	Dec. 31
EURk	EURk	EURk	EURk	EURk	EURk
1,838	-1	2,199	1,702	24	2,310
1,316	-1	1,819	1,278	18	1,838

All deferred liabilities are current.

30. OTHER NON-CURRENT LIABILITIES

The following schedule of liabilities illustrates how other non-current liabilities break down by residual maturities:

EURk	Total	1 to 5 years	More than 5 years	Secured amount
Other non-current liabilities	2,646	2,614	32	0
2007	1,422	1,396	26	0

The other non-current liabilities include pensions of EUR 90k (FY 2007: EUR 89k).

The provision for pensions recorded under other non-current liabilities relates to compulsory funded retirement benefit plans (endowment insurance) in Switzerland obliging companies to make additional contributions.

As of January 1, 2008, the present value of the obligation (DBO) under the defined benefit pension plans for Switzerland amounted to EUR 373k (CHF 618k). Less the fair value of the plan assets of EUR 285k (CHF 471k), the net obligation stood at EUR 88k (CHF 147k). The external expert opinion is based on the following actuarial assumptions:

	Dec. 31, 2008	Dec. 31, 2007
Discount rate	3.50%	3.50%
Estimated future salary increases	3.50%	3.50%
Estimated future pension increases*	0.00%	0.00%
Expected return on plan assets	2.00%	2.00%

* Assuming a zero pension rise as no pensions are currently paid to employees.

	Dec. 31, 2008	Dec. 31, 2007
Mortality	EKV 2000	EVK 2000
Probability of invalidity	EKV 2000	EVK 2000
Probability of exit	BVG 2005	BVG 2005

On the basis of the actuarial report, the following income and expenses were recognised in fiscal year 2008:

`	Service cost		EURk 51 (CHFk 81)
`	Interest expense		EURk 14 (CHFk 23)
`	Income from interest on plan assets	EURk 7	(CHFk 11)

Service cost is recognised as staff cost, whilst interest expenses and income from interest on plan assets are shown under other interest income or expenses.

As of December 31, 2008, the provision for pensions disclosed under non-current liabilities amounted to EUR 90k (CHF 134k). This amount comprises the present value of the obligation (DBO) of EUR 532k (CHF 790k), the fair value of the plan assets of EUR 442k (CHF 656k) and an actuarial loss of EUR 4k (CHF 7k). The actuarial loss was recognised in equity in a separate line under other reserves in accordance with the revised IAS 19.

EURk (CHFk)	2008	2007	2006	2005	2004
Present value of the obligation (DBO)	532 (790)	373 (618)	268 (431)	221 (343)	196 (302)
Present value of plan assets	442 (656)	285 (471)	207 (333)	193 (300)	204 (315)
Net obligation	90 (134)	88 (147)	61 (98)	28 (43)	-8 (-13)

Experience adjustments totalled EUR -12 k (CHF -17k) to the obligations and EUR 16k (CHF 24k) to assets. Employer contributions in the next period are estimated at EUR 44k (CHF 65k).

EURk	2008	2007
Change in defined benefit obligations:
Defined benefit obligation at beginning of period	373	269
Interest expense	14	10
Current service cost	51	27
Employer contributions	29	25
Benefits paid	28	37
Actuarial gains and losses recognised in equity	-11	-13
Currency translation differences from foreign plans	47	-8
Defined benefit obligation at end of period	532	373

EURk	2008	2007
Change in plan assets
Fair value of plan assets at beginning of period	285	207
Expected return	7	5
Employer contributions	73	61
Benefits paid	28	38
Actuarial losses recognised in equity	-15	-20
Currency translation differences from foreign plans	34	-6
Fair value of plan assets as of Dec. 31, 2008	442	285

31. EQUITY

For details of changes in equity, please see the consolidated statement of changes in equity.

The Group's capital management activities are primarily aimed at maintaining its credit rating in order to support its operations and safeguard liquidity. The Group monitors capital using the equity ratio, the ratio of equity to total assets. In accordance with group guidelines, we aim for an equity ratio higher than 16 percent, as in previous year.

The fully paid-in subscribed capital of GRENKELEASING AG amounts to EUR 17,491k (FY 2007: EUR 17,491k). It is divided into 13,684,099 (FY 2007: 13,684,099) no-par bearer shares. The change in the prior year is attributable to the exercise of the stock option program, where exercise was possible for the last time. In this context, 4,420 new shares were issued from the contingent capital (see also the following details on contingent capital). There were no changes in the past fiscal year.

On May 9, 2006, the Annual General Meeting adopted a resolution authorising the Board of Directors, with the approval of the Supervisory Board, to increase the Company's capital stock by April 30, 2010 by up to a nominal amount of EUR 8,500k by issuing new no-par bearer shares in return for cash and/or non-cash contributions. The approved capital increase may be split into tranches. The shareholders will be granted a subscription right. However, under certain conditions, the Board of Directors is authorised to wholly or partly exclude the right of shareholders to subscribe to capital increases in return for cash contributions, with the approval of the Supervisory Board.

The articles of incorporation were amended accordingly. In this context, the approved capital of EUR 5,963k, which expired on February 28, 2005, was cancelled.

31.1 Contingent Capital

As a result of the resolution passed by the Annual General Meeting on April 16, 2002, the contingent increase in capital of up to EUR 959k ("Contingent Capital I"), approved on February 28, 2000, was reduced by EUR 180k. The sole purpose of the contingent capital increase was to enable options to be granted under the employee stock option program for the IPO in 2000. Since both tranches of the employee stock option plan expired in 2006, Contingent Capital I no longer has a purpose.

On January 23, 2006, the Supervisory Board resolved to cancel Contingent Capital I. The articles of incorporation were amended accordingly. The change in the articles of incorporation was entered in the commercial register on April 21, 2006.

The Annual General Meeting also approved a further contingent increase ("Contingent Capital II") of EUR 948k which was entered in the commercial register on June 7, 2002. Contingent Capital II was reduced by EUR 199k to EUR 749k by the exercise of 155,201 stock options from 2004 to 2006. Following the final exercise of 4,420 stock options in 2007, Contingent Capital II was reduced by EUR 5k to EUR 743k.

On June 22, 2007 the Supervisory Board made the following decisions based on the authorisation in Article 11 (2) of GRENKELEASING AG 's articles of incorporation:

As a result of plan participants' final declaration to purchase a total of 4,420 Company shares (preemptive shares) under the terms of the stock option program (GRENKELEASING employee stock option program) issued based on a resolution adopted by the Annual General Meeting on April 16, 2002, Article 4 (1) and Article 2 of the articles of incorporation of GRENKELEASING AG are revised as follows:

(1) "The Company's capital stock amounts to EUR 17,491,421.86 (in words: seventeen million four hundred and ninety-one thousand four hundred and twenty-one euros and eighty-six cents).
(2) It is divided into 13,684,099 no-par value shares which are made out to the bearer".

The amendment of the articles of incorporation was notarised on July 9, 2007 and submitted to the commercial register.

Contingent Capital II, which was designed to meet subscription rights under the stock option programs, has become obsolete because the subscription rights have expired. The articles of incorporation were amended accordingly as resolved by the Supervisory Board on September 3, 2007.

At the Annual General Meeting of GRENKELEASING AG on May 9, 2006, it was decided to increase capital contingently by a nominal amount of up to EUR 3,834,690 by issuing up to 3,000,000 new no-par value bearer shares ("Contingent Capital III"). The creation of contingent capital also entitles the Board of Directors, with the consent of the Supervisory Board, to issue on one or more occasions until May 8, 2011 options or convertible bonds with a total nominal value of up to EUR 150,000,000 and a maximum term of ten years. Existing shareholders' subscription rights may be excluded. In addition, the Annual General Meeting authorised the Board of Directors, with the consent of the Supervisory Board, to issue until May 8, 2011 participation certificates on one or more occasions up to a maximum of EUR 150,000,000. The shareholders may not subscribe in this case. To date, no warrants or convertible bonds have been issued from Contingent Capital III.

31.2 Authorisation to Acquire Treasury Shares Pursuant to Section 71 (1) No. 8 AktG

By resolution of the Annual General Meeting on May 9, 2006, the Company has been authorised to acquire treasury shares of up to a total of 10 percent of the capital stock existing at the time of the resolution. The authorisation may be exercised in whole or in part, on one or more occasions, by the Company itself or by third parties assigned by the Company.

The Board of Directors is authorised to sell treasury shares in return for contributions in kind or to third parties in return for cash. The shares may be redeemed without a resolution of approval by the Annual General Meeting.

The authorisation took effect at the close of the Annual General Meeting and was effective until November 8, 2007. By resolution adopted at the Annual General Meeting on May 8, 2007, this authorisation was extended until November 7, 2008. This authorisation was once again confirmed as of the end of the Annual General Meeting on 6 May 2008 and expires on 5 November 2009.

No treasury shares have been purchased to date.

31.3 Participation Certificate Capital

By resolution of the Annual General Meeting on May 9, 2006, the Board of Directors was authorised, with the consent of the Supervisory Board, to issue participation certificates of up to EUR 150,000k with an indefinite term. The authorisation expires on May 8, 2011. The shareholders may not subscribe. The participation certificates do not grant shareholder status, they merely confer creditor rights on a contractual basis. A conversion or option right in respect of shares in the Company is expressly precluded. No participation rights have been issued to date.

31.4 Profit Carryforward

The Annual General Meeting on May 6, 2008 adopted the resolution on the appropriation of GRENKELEASING AG's retained earnings for fiscal year 2007 of EUR 50,472,724.26. The Annual General Meeting approved the proposal of the Board of Directors and the Supervisory Board, resolving to appropriate the retained earnings for 2007 as follows:

Retained earnings 2007	EUR 50,472,724.26
Distribution of a dividend of 0.60 EUR per share for a total of 13,684,099 shares	EUR 8,210,459.40
Transfer to revenue reserves	--
Profit carryforward (to new account)	EUR 42,262,264.86

The dividend was paid to the shareholders of GRENKELEASING AG on May 7, 2008.

In the prior year, the Annual General Meeting adopted the proposal of the Board of Directors and the Supervisory Board, resolving to appropriate, and appropriating, the retained earnings for 2006 as follows:

Retained earnings 2006	EUR 51,069,498.00
Distribution of a dividend of EUR 0.55 per share for a total of 13,679,679 shares	EUR 7,523,823.45
Transfer to revenue reserves	--
Profit carryforward (to new account)	EUR 43,545,674.55

The company's management will propose the distribution of a dividend of EUR 0.60 per share for the past fiscal year 2008 to the Annual General Meeting. This distribution is not recognised as a liability as of December 31, 2008.

31.5 Reserves

The capital reserves of EUR 60,166k (FY 2007: EUR 60,166k) mainly result from the IPO of GRENKELEASING AG in April 2000. The Company opted to offset these IPO costs against the capital reserves in 2000. The reversal resulted in an effect of EUR 211k in 2003, including the effect of deferred taxes of EUR 81k. The change in the capital reserves in 2006 and 2007 was due to stock options being exercised under a stock option program. On this basis, a sum of EUR 114k was transferred to the capital reserves in fiscal year 2007.

In addition to GRENKELEASING AG's revenue reserves, revenue reserves also comprise the revenue reserves and profits of the consolidated subsidiaries.

A hedge reserve was recognised in equity in fiscal year 2003, when cash flow hedges were recognised for the first time. Changes in the fair value of derivatives designated as hedging instruments in cash flow hedges are recognised in equity so long as an appropriate effectiveness in terms of IAS 39 can be demonstrated. The change in fair value during the fiscal year was EUR -5,234 k (FY 2007: EUR -125k) plus deferred taxes of EUR 655k (FY 2007: EUR 15k).

As a result of the recognition of pension provisions in accordance with IAS 19, an amount of EUR -5k (FY 2007: EUR -34k) was recognised in equity to account for actuarial gains and losses. As a corresponding liability is not recognised under local law in Switzerland, the deferred taxes attributable to actuarial gains and losses EUR 1k; (FY 2007: EUR 8k) were also recognised under equity.

32. DERIVATIVE FINANCIAL INSTRUMENTS

32.1 Financial Risk Strategy

Business Model

As a small-ticket IT leasing company, GRENKELEASING leases mobile IT assets to B2B customers.

To date, the contractual terms for the lease portfolio, i.e. all lease contracts, have been fixed for the duration of each individual contract, fixing both the periodical payments and the interest rate used to calculate the payments when the contract is concluded. Neither of the parties can subsequently amend these terms.

GRENKELEASING only dissolves or agrees to dissolve contracts prematurely (repurchase, exchange option, termination, etc.) if the lessee bears the potential loss (i.e. due to lost interest). Please refer to the risk report and the report on the financial position and net assets for quantitative disclosures regarding credit risk, liquidity risk and market risks.

Hedging Policy

Derivatives are used when, and only when, underlying contracts need to be hedged. Underlying contracts are the contractual obligations entered into by GRENKELEASING AG in order for it to achieve its objectives. Treasury is not a separate profit centre. The use of derivatives is limited to hedging the profits of GRENKELEASING AG to the extent stipulated in the Company's articles of incorporation.

Items are hedged in terms of volume or amount, with various instruments being used. The choice of instrument is always a management decision based on the risk profile, i.e. the potential income associated with the risk in question. For example, besides benefiting from falling interest rates, interest rate caps also entail a risk of rising finance costs until the strike is reached, whereas swaps fix a specified interest rate for the term of the swap.

Measurement

Because the derivatives used are so-called OTC derivatives rather than standardised listed financial instruments, recognised measurement models are used for calculating fair values. The necessary parameters for measurement, such as interest rates, yield curves and foreign exchange spot and forward rates can be observed on the market at all times and can be accessed via external sources of information. To each balance sheet date, GRENKELEASING receives a measurement overview / a current fair value measurement from the perspective of the bank counterparty. In cases of interest rate swaps, GRENKELEASING calculates the corresponding fair values on a parallel basis.

32.2 Currency Risk Management

GRENKELEASING is exposed to currency risks because of its European activities and the growing significance of its foreign markets. Derivatives are used to mitigate or eliminate these risks.

Derivative Financial Instruments to Hedge Currencies

Forward exchange contracts were and are used to hedge the cash flows from the refinancing of the franchise companies in Norway and Hungary and of the British, Polish, Czech, Swedish and Danish subsidiaries. The Company finances the lease receivables generated by the franchisees and the subsidiaries in the foreign currencies and receives payments in those currencies over the term of the underlying lease contracts.

Because refinancing in Poland was restructured in the past fiscal year, no new derivative hedging instruments are needed here for the foreseeable future in relation to the Polish zloty. The current positions in forward exchange contracts were de facto closed on the basis of contracting relevant counter-positions once. No risk of change in fair value for forward exchange contracts between the euro and the Polish zloty has resulted from the change in the Polish zloty.

In Sweden und Denmark, forward exchange contracts to safeguard against the foreign currency risk were implemented for the first time to the end of the fiscal year.

Hedge accounting was not applied. The fair values of the forward exchange contracts are posted on the balance sheet under financial instruments with positive fair value / financial instruments with negative fair value and are allocated at fair value through profit or loss according to their category in IAS 39 (see Note 25). As of the balance sheet date, there were forward exchange contracts with positive and negative fair values, leading to disclosure as assets (see Note 14) and liabilities (see Note 27).

	Nominal volume per		Maturity of the nominal volume on Dec. 31, 2008	Hedged
	Dec. 31, 2007	Dec. 31, 2008	2009	2010	2011	later	average rate
	EURk	EURk	EURk	EURk	EURk	EURk
EUR Buy
CZK	3,519	4,514	2,017	2,179	318	0	25.6218
GBP	23,631	31,813	13,890	15,226	2,696	1	0.7840
CHF*	0	3,657	1,485	2,015	157	0	1.5417
HUF	0	782	403	379	0	0	284.33
NOK	4,892	2,847	1,667	1,050	130	0	8.3013
SEK	0	2,790	0	2,790	0	0	10.9040
DKK	0	3,021	0	3,021	0	0	7.5095
PLN**	14,597	6,997	4,706	2,292	0	0	3.8296
EUR Sell
PLN**	0	7,811	5,357	2,454	0	0	3.4307

As of the balance sheet date, there were forward exchange contracts with a nominal volume of EUR 64,232k (FY 2007: EUR 46,639k) on the basis of the euro. They break down by currency as follows:

* The outstanding forward exchange contracts in Swiss francs result from the refinancing of the franchisee based in Hungary, which offers lease contracts etc. on the basis of Swiss francs due to the local market conditions.

** In the context of the new possibility for refinancing in the local currency with BRE-Bank SA in Poland, all outstanding forward exchange contracts, i.e. purchase of EUR, were closed out with respective counter-transactions, i.e. sale of EUR.

The refinancing for other non-euro countries was not hedged as the current volume is insignificant.

32.3 Interest Rate Risk Management

The interest rate risk for GRENKELEASING's operations stems mainly from the sensitivity of its financial liabilities to changes in market interest rates. GRENKELEASING endeavours to limit the impact of such risks on interest expense and net interest income by employing appropriate derivatives.

Derivative Financial Instruments to Hedge Interest Rates

Issuing bonds and contracting interest rate swaps are elements of a financing strategy under which GRENKELEASING AG separates refinancing from interest rate hedging in order to obtain maximum flexibility for its refinancing activities. The resulting risks (variable cash flows) are hedged by appropriate interest rate derivatives. Interest rate swaps are used as hedging instruments and designated as hedges in accordance with IAS 39. As all interest rate derivatives used in hedge accounting have been proven to be 100 percent effective, the changes in fair value in relation to their clean value (excluding accrued interest) were recognised fully in equity.

Under the newly implemented ABCP program with DZ-Bank (CORAL), GRENKELEASING is responsible for interest rate hedging and thus managing of interest rate risk. The ABCP transaction also serves here as an underlying transaction with a floating rate and cash flows are being hedged by deploying interest rate swaps.

Both interest rate caps and interest rate swaps are used to limit the interest rate risk under the remaining ABCP programs. However, the contracting parties are the SPEs. Therefore GRENKELEASING does not account for the derivatives and does not apply hedge accounting.

The caps transferred to GRENKELEASING from the processing of the Rheingold caps have a fair value of EUR 72k on the balance sheet date. The caps are shown in the position "Financial assets with positive fair value". Hedge accounting in line with IAS 39 is not used for the interest rate caps.

Notes on the Prior-Year Figures:

As of January 1, 2007 GRENKELEASING had hedged a total volume of EUR 214m through interest rate swaps. The fixed interest rate of these contracted swaps was between 3.29 percent and 3.81 percent. On December 31, 2007 the contracted volume for interest rate swaps in the Group amounted to EUR 323m, with fixed interest rates of between 3.29 percent and 4.51 percent.

The fixed interest actually paid in the year 2007 was between 3.29 percent and 4.51 percent. The variable side of the swap received by GRENKELEASING to secure floating-rate refinancing was between 3.55 percent and 4.79 percent. A total of 10 new swaps were contracted in 2007, with a nominal volume of EUR 195m as of December 31, 2007.

Fiscal Year 2008

A total of 21 new swaps were contracted in the past fiscal year, which evidenced a nominal volume of EUR 135m as of December 31, 2008. The fixed interest rate of the new contracted swaps was between 2.52 percent and 4.56 percent.

The fixed interest actually paid in 2008 across all existing swaps was between 3.29 percent and 4.74 percent. The variable side of the swaps was in the range of between 2.97 percent and 5.14 percent. The swaps in place at the balance sheet date have a nominal volume of EUR 202m as of December 31, 2008, and contracted fixed interest rates over the relevant maturities of between 2.52 percent and 4.60 percent. The duration of the longest contracted interest rate swaps is up till January 2012.

The table below shows the development of the nominal volume as of the balance sheet date for the coming years. The average interest rate is the arithmetic mean of the existing swaps. As we only contract payer swaps from the perspective of GRENKELEASING, this is the agreed fixed interest rate from interest rate swaps.

Nominal volume as of Dec. 31						Average interest rate
	2007	2008
	EURk	EURk	EURk	EURk	EURk
Contracted prior to 2008	323,120	66,993	21,965	0	0	4.25%
Contracted in 2008	0	135,000	205,000	35,000	10,000	4.03%
Total	323,120	201,993	226,965	35,000	10,000	4.16%

32.4 Hedge Effectiveness

Accounting in accordance with IFRSs requires documentation and a risk analysis when derivative financial instruments are used. The relationship between the hedged item and the hedging instrument determines the effectiveness of a hedge. As it uses derivatives for interest rate hedging, GRENKELEASING applies hedge accounting in accordance with IAS 39. Hedge effectiveness, as required by IFRSs, is in line with GRENKELEASING's intention of using derivatives only to hedge risks from designated hedged items and to never enter into derivatives for speculative reasons.

The tests of effectiveness for each financial derivative accounted for in a hedge in accordance with IAS 39 were performed as of the end of the quarter using the hypothetical derivative method. The documentation of each hedging relationship describes the hedged item, hedged risk, strategy, hedging instrument, estimate of effectiveness, and names the counterparty.

A hedging relationship only exists in substance for currency hedging. Although the hedging instruments are specifically designated, hedge accounting pursuant to IAS 39 is not applied.

Forward Exchange Contracts

The hedged item for all forward exchange hedges is determined by the payments resulting from the financing of the leasing business in the respective currency area. These foreign currency cash flows are the basis for the forward contracts. The hedge can be classified as highly effective because only the actual cash flows, and never a higher amount, are hedged. Ideally, the dates of the financing and the foreign exchange hedge coincide to ensure the best possible hedge of the exposure to variable cash flows.

Interest Rate Swaps

The parameters of the host contract, i.e. those of the financing (liability), are considered first and foremost when contracting interest rate swaps. For this reason, the interest rate terms of the swaps on the variable side are identical to those of the hedged item. Furthermore, the volume contracted in the swaps is never greater than the volume of the hedged financing.

The active integration of existing and future planned refinancing transactions allows a forward-looking risk management. Quarterly tests of effectiveness will be conducted as part of this ongoing analysis, in which the effectiveness of the hedges is tested using a method allowed under IFRSs. To date, the hedging relationships between interest rate swaps and existing and planned financing have proven to be highly effective. Under the hypothetical derivative method, effectiveness was 100 percent. Both the retrospective and the prospective effectiveness of the hedging relationships are confirmed at 100 percent on the balance sheet date.

33. FAIR VALUE OF FINANCIAL INSTRUMENTS

33.1 Fair Value of Derivative Financial Instruments

The interest rate swaps have a total negative fair value of EUR 3,833k on the balance sheet date (FY 2007: a positive fair value of EUR 1,594k). The fair value of the caps in the Group to be posted on the balance sheet for the first time amounts to EUR 72k on the reporting date.

EURk	Fair Value 2008	Fair Value 2007
EUR Buy
CZK	172	- 98
GBP	5,769	1,044
CHF	- 202	n.a.
HUF	65	n.a.
NOK	448	- 74
SEK	- 19	n.a.
DKK	- 8	n.a.
PLN*	562	- 995
EUR Sell
PLN*	- 1,367	n.a.

The forward currency transactions have the following fair values for the individually contracted currencies:

* In the context of the new possibility for refinancing in the local currency with BRE-Bank SA in Poland, all outstanding forward exchange contracts, i.e. purchase of EUR, were closed out with respective counter-transactions, i.e. sale of EUR.

33.2 Fair Value of Primary Financial Instruments

Fair value is the amount for which financial instruments would be exchanged, sold, bought or settled on the balance sheet date between knowledgeable, willing contracting parties in an arm's length transaction.

The fair value of lease receivables is estimated by using, instead of the internal rate, an interest rate which would be charged if the full amount were refinanced. A market rate of interest on December 31, 2008 was used for liabilities from the refinancing of lease receivables.

Financial instruments whose fair value differs from their carrying amount are listed below:

EURk	Fair value 2008	Carrying amount 2008	Fair value 2007	Carrying amount 2007
Lease receivables	1,244,061	1,143,218	1,085,824	1,000,058
Liabilities from the refinancing of leasing business	1,045,632	1,051,065	898,545	898,774

34. MATURITY OF FINANCIAL OBLIGATIONS

The table below shows the maturities of the earliest possible non-discounted contractual cash flows of the financial obligations on the balance sheet date of the last and penultimate fiscal years. Some amounts do not accord with the amounts shown on the balance sheet, since they generally relate to undiscounted cash flows.

As of Dec. 31, 2008

EURk	On demand	Less than 3 months	3 to 12 months	1 to 5 years	More than 5 years
Type of liability
Liabilities from the refinancing of leasing business	0	152,018	348,748	638,986	1,363
Bank liabilities	3,627	540	1,597	5,954	1,345
Other liabilities*	0	1,366	4,099	2,614	32
Trade payables and other liabilities*	0	8,466	0	0	0
Negative fair values from derivative financial instruments**	5,434	0	0	0	0

Total:	9,061	162,390	354,444	647,554	2,740

* The carrying amounts are categorised according to their individual class of maturity, so long as this is considered possible and appropriate.

** The present values of all future cash flows are shown here. The Group considers this to be the appropriate representation for cash flows where payment is outstanding, if these positions had to be closed. Derivative holdings are shown in the on demand category, since this representation shows the earliest possible outflow of liquidity. The actual duration of a contract may extend to a much longer period.

As of Dec. 31, 2007

EURk	On demand	Less than 3 months	3 to 12 months	1 to 5 years	More than 5 years
Type of liability
Liabilities from the refinancing of leasing business	0	125,069	259,537	605,461	1,039
Bank liabilities	4,222	189	1,244	5,520	4,292
Other liabilities*	0	2,760	8,278	1,396	26
Trade payables and other liabilities*	0	7,410	0	0	0
Negative fair values from derivative financial instruments**	1,261	0	0	0	0

Total:	5,483	135,428	269,059	612,377	5,357

* The carrying amounts are categorised according to their individual class of maturity, so long as this is considered possible and appropriate.

** The present values of all future cash flows are shown here. The Group considers this to be the appropriate representation for cash flows where payment is outstanding, if these positions had to be closed. Derivative holdings are shown in the on demand category, since this representation shows the earliest possible outflow of liquidity. The actual duration of a contract may extend to a much longer period.

35. SEGMENT REPORTING

The GRENKELEASING AG Group's risks and rates of return on equity vary depending on the geographical regions in which it operates. In accordance with IAS 14, certain items of information in the financial statements have therefore been disclosed by region (primary segments) and by division (secondary segments). Regional segmentation distinguishes between lessees based in Germany, France, Switzerland, Italy or in another country. The "other countries" segment comprises Austria, Italy, the Czech Republic, Spain, the Netherlands, Denmark, Sweden, Belgium, Ireland and the UK. Due to the strong growth of new business, Italy is shown as a regional segment for the first time in this report. The previous year's figures for other countries have been adjusted accordingly and are shown separately for Italy.

For segmentation by division, a distinction is made according to the method of acquisition, i.e. which lease contracts were acquired through conventional channels via specialist dealers, or via the subsidiary WEBLEASE NETBUSI-NESS AG, i.e. via e-commerce shops, and directly on the internet. The gains and losses from the contracts settled using internally developed internet software are allocated to the Internet segment.

The segment information was calculated as follows:

` Segment revenue comprises revenue from capitalising lease receivables, sales proceeds from leased assets, insurance revenue, and interest income.
` Segment result is calculated before taxes.
` Amortisation and depreciation relates to property, plant and equipment and intangible assets and the portion of goodwill amortisation from the acquisition of consolidated subsidiaries directly attributable to the segment.
` Capital expenditure relates to additions of property, plant and equipment and intangible assets, including the portion of goodwill attributable to the segment.
` Operating segment assets and liabilities are operating assets and debt capital excluding interest-bearing claims and liabilities and without taxes.

Segment revenue breaks down as follows:

EURk	2008	2007
Income from interest on leasing business	110,650	96,092
Profit from new business	24,327	20,418
Insurance income	21,778	18,499
Income from disposals	17,112	14,471
Total:	173,867	149,480

SEGMENT REPORT FOR FISCAL YEARB 2008 REGIONS (PRIMARY REPORTING FORMAT)

EURk		Germany		France		Switzerland		Italy		Other countries	Total segments
	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008
	to	to	to	to	to	to	to	to	to	to	to	to
	Dec. 31, 2008	Dec. 31, 2007	Dec. 31, 2008	Dec. 31, 2007	Dec. 31, 2008	Dec. 31, 2007	Dec. 31, 2008	Dec. 31, 2007	Dec. 31, 2008	Dec. 31, 2007	Dec. 31, 2008	Dec. 31, 2007
Revenues	95,323	92,676	39,226	32,100	7,428	7,133	6,387	3,312	25,503	14,259	173,867	149,480
Segment result	23,856	24,620	17,541	14,456	2,240	3,127	828	80	206	2,532	44,671	44,815
Earnings before taxes											44,671	44,815
Income taxes											11,528	12,690
Net profit for the period											33,143	32,125
Amortisation / depreciation	1,871	1,787	214	204	63	53	84	40	536	149	2,768	2,233
Significant non-cash expenses	9,543	12,094	4,521	2,802	1,032	512	1,151	858	3,864	873	20,111	17,139
Capital expenditure	1,544	3,564	282	262	40	51	195	121	437	140	2,498	4,138
Segment assets	720,909	735,010	312,671	254,094	46,982	37,279	51,262	26,053	298,683	188,289	1,430,507	1,240,725
Unallocated items											24,890	20,684
Total assets											1,455,397	1,261,409
Segment liabilities	573,495	585,796	226,446	185,411	27,396	20,461	43,588	19,208	287,188	177,000	1,114,525	987,876
Unallocated items											50,869	47,366
Total liabilities											1,165,394	1,035,242

DIVISIONS (SECONDARY REPORTING FORMAT)

				Conventional lease
EURk		Internet		business		Total segments
	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008	Jan. 1, 2008
	to	to	to	to	to	to
	Dec. 31, 2008	Dec. 31, 2007	Dec. 31, 2008	Dec. 31, 2007	Dec. 31, 2008	Dec. 31, 2007
Revenues	101,851	83,843	72,016	65,637	173,867	149,480
Segment result	33,414	31,134	11,257	13,681	44,671	44,815

Capital expenditure	1,459	2,321	1,039	1,817	2,498	4,138

Segment assets	842,355	699,351	588,152	541,374	1,430,507	1,240,725

36. FRANCHISE SYSTEM

GRENKELEASING AG aims to expand into other markets with its business model that has been tried and tested in many European countries; for this, it employs a franchise system.

The following companies already operate as franchisees:

` GRENKE-AUTOLEASING GmbH, Bremen / Germany
` Grenke Leasing AS, Oslo / Norway
` GRENKEFACTORING, Baden-Baden / Germany
` Grenkeleasing Magyarország Kft., Budapest / Hungary
` Kazenmaier FleetService GmbH, Karlsruhe / Germany
` GRENKELEASING SRL, Bucharest / Romania
` GRENKE RENT, S.A., Madrid / Spain

Three new franchise companies signed agreements in fiscal year 2008:

` GC Leasing Slovensko s.r.o. with registered office in Bratislava / Slovakia (contract signed on January 15, 2008)
` GRENKE RENTING, S.A., with registered office in Lisbon / Portugal (contract signed on January 25, 2008)
` GC Leasing Finland Oy with registered office in Helsinki / Finland (contract signed on April 25, 2008)

GRENKELEASING provides its know-how, infrastructure and funds for refinancing lease contracts under a franchise agreement. However, it does not own shares in the above franchisees, nor does it have any control over the franchisees' business policies. In addition to the franchise charge totalling EUR 511k (FY 2007: EUR 496k), the Group generated income from interest on loans of EUR 2,532k (FY 2007: EUR 3,192k). As of the balance sheet date, apart from the loans (see Notes 16 and 23), there were receivables from franchisees totalling EUR 3,513k (FY 2007: EUR 948k).

37. CONTINGENT LIABILITIES AND OTHER FINANCIAL OBLIGATIONS

No contingent liabilities existed as of the balance sheet date which must be stated in the balance sheet or in the notes. The Company has other financial obligations related to rent, building maintenance, and lease contracts. The resulting financial obligations are presented below:

EURk	Dec. 31, 2008	Dec. 31, 2007
Rent, maintenance and lease obligations
due in the following year	4,027	3,851
due in 2 to 5 years	7,798	6,443
due in more than 5 years	1,788	1,139
Total	13,613	11,433

There are extension options of between one and five years on leases for rented premises.

Under three agreements on the sale of receivables of Grenke Investionen Verwaltungs KGaA to secure all receivables of the holding company (Grenke Investitionen Verwaltungs Kommanditgesellschaft auf Aktien) from the operating company, the operating company (GRENKELEASING AG) assigns to the holding company the following from lease contracts with end lessees (sublease contract) for leasing assets which are the subject of a purchase agreement between the operating company and the holding company:

All receivables, claims and rights arising from these sublease contracts, including any claims from extended leases following expiry of the original lease term, any claims for compensation payments, residual values, and payment of a purchase price from the sale of the respective lease asset. Claims from credit and property insurance from the sublease contract are also assigned, as are any claims from repurchase obligations on the part of suppliers of lease assets or of third parties. The buyer of the receivables acquires the equitable lien on the lease assets underlying the receivable purchase agreement.

Our Irish subsidiary, GRENKE FINANCE Plc., Dublin, Ireland, realised income from intragroup factoring, loans and leasing in 2007 and 2008. With its above-mentioned income in Ireland, GRENKE FINANCE Plc. is subject to a nominal income tax charge of 12.5%, and consequently a lower level of taxation in the meaning of the International Transactions Tax Act (AstG). Special tax liability treatment of the income of GRENKE FINANCE Plc. does not occur according to the current legal position, pursuant to the effects of the decision by the European Court of Justice on the Cadbury Schweppes case as well as pursuant to the memorandum dated January 8, 2007, issued by the Federal Ministry of Finance, in the instance that GRENKE FINANCE Plc. exercises an economic activity.. In 2008, GRENKE FINANCE Plc. put forward an application at the Central German Tax Office under Sec. 50d of the Income Tax Act for the issuance of an exemption certificate and/or reimbursement of tax deductions for licence fees and similar remuneration on the grounds of the Double Taxation Agreement between Germany and Ireland.

In processing the application, the Central German Tax Office holds additional information and notifications in terms of the meeting the requirements of economic activity at GRENKE FINANCE Plc in Ireland. After an extensive examination, the Central German Tax Office considered the requirements to be fulfilled and issued the exemption certificate. In our opinion, the pre-conditions for economic activity on the part of GRENKE FINANCE Plc. are consequently satisfied in 2007 in 2008. No contingent liabilities or other obligations therefore arise from this matter as of the reporting date.

Objections are pending to six assessment notices on the separate and uniform determination of tax bases for 2000 for GLG Grenke-Leasing GmbH & Co. Baden-Baden KG, GLG Grenke-Leasing GmbH & Co. Düsseldorf KG, GLG Grenke-Leasing GmbH & Co. Hamburg KG, GLG Grenke-Leasing GmbH & Co. München KG, GLG Grenke-Leasing GmbH & Co. Nürnberg KG, and GLG Grenke-Leasing GmbH & Co. Stuttgart KG. The assets of the above companies were merged into GRENKELEASING AG as of February 28, 2000.

The amended tax assessment notices from the tax authorities differ from our application for amendment of the tax assessment notices for 2000 following the incorporation of the tax audit findings for the years 1996 to 1999. If the tax authorities' view proves correct, tax expense would increase by EUR 92k.

Tax Audit in France

There were differences of opinion between ourselves and the tax authorities on the allocation of the intragroup twotier financing arising from the audit for the years 2000 to 2002. An expert third party issued a tax opinion on this matter stating that GRENKE LOCATION SAS stood a good chance that the matter accounted for by us had been presented clearly and transparently. The French tax authorities issued GRENKE LOCATION SAS with a tax assessment notice that did not take this opinion into consideration. The company has lodged an appeal against this notice and initiated proceedings before the tax court.

The follow-up audit for 2003 and 2004 was performed in the first half of 2006. During this audit, the points addressed in the prior audit were reviewed. A mutually acceptable solution was reached in a mutual agreement procedure with the central audit office in Paris (Interlocuteur départemental). The original findings were for the most part overturned.

The mutual solution is also applicable to the current proceedings relating to the audit findings for 2000 to 2002. In accordance with the final assessment notices, all of the withholding tax including interest (EUR 821k) and corporation tax of EUR 1,953k was reimbursed from the EUR 3,4548k paid in 2004, which was capitalised as a receivable due from the tax authorities.

We have received an interest credit of EUR 96k on the refund of withholding tax. Interest on the refunded corporate income tax will be paid separately. As a result, corporate income tax for 2000 of EUR 145 and for 2001 of EUR 316 and default interest on VAT of EUR 232 are payable. The proceedings before the tax court were withdrawn by letter dated November 8, 2007.

Final notices for the audit of the 2005 and 2006 fiscal years, which was carried out in November 2007, have been issued. No findings that have an impact on earnings have resulted since the mutually acceptable solution reached in a mutual agreement procedure with the central audit office in Paris (Interlocuteur départemental) relating to the previous audit is binding also for this audit. The procedure has consequently been concluded, and the company is taxassessed until 2006 inclusive.

Tax Audit in Germany

The tax audit for fiscal years 2000 to 2004 that commenced in September 2006 is still ongoing. On the balance sheet date there were no audit findings.

38. RELATED PARTY DISCLOSURES

Third parties are considered as related if one party directly or indirectly controls the other or if it exercises considerable influence over the business or operative decisions of the other party. Related third parties include people in key positions and their family members, and subsidiaries of GRENKELEASING AG.

GRENKELEASING AG renders various services for subsidiaries in its ordinary course of business. Conversely, the various group companies also render services within the GRENKELEASING AG Group as part of their business purpose. These extensive deliveries of goods and services are transacted at market conditions.

The companies which work together with GRENKELEASING under the franchise system (see Note 36) are not considered as related parties.

In accordance with the articles of incorporation, the Supervisory Board of GRENKELEASING AG has six members. The members of the Supervisory Board in fiscal year 2008 were:

` Prof. Dr. Ernst-Moritz Lipp, Baden-Baden, Chairman, Professor of International Finance and General Manager of ODEWALD & COMPAGNIE Gesellschaft für Beteiligungen mbH
` Mr. Gerhard E. Witt, Baden-Baden, Deputy Chairman, public auditor and tax advisor
` Mr. Dieter Münch, Weinheim, retired bank officer, member of foundation board
` Dr. Oliver Nass, Paris, general manager of ESG France
` Mr. Erwin Staudt, Leonberg, economics graduate, president of the soccer club VfB Stuttgart 1893 e.V.
` Dr. Brigitte Sträter, Düsseldorf, owner and manager of the PR agency CENA

The shares held by the Supervisory Board members are listed below:

	Shares as of Dec. 31
No.	2008	2007
Dieter Münch	75	75
Prof. Dr. Ernst-Moritz Lipp	21,000	21,000
Erwin Staudt	1,000	1,000
Total	22,075	22,075

Mr. Gerhard E. Witt and Mr. Dieter Münch have also been supervisory board members of Grenke Investitionen Verwaltungs KGaA, Baden-Baden, Germany, a GRENKELEASING Group company, since February 20, 2003. Mr. Dieter Münch is also a member of the supervisory board of Weisenburger Bau + Grund AG, Halle/Saale, Germany. Mr. Erwin Staudt is a member of the supervisory boards of PROFI Engineering Systems AG, Darmstadt, Germany, USU AG, Möglingen, Germany, and Hahn Verwaltungs-GmbH, Fellbach, Germany. Prof. Dr. Ernst-Moritz Lipp is also a member of the advisory board of TFL International GmbH, Weil am Rhein; he is a member of the Supervisory Board of BOA Holding GmbH, Karlsruhe, Stutensee of Oystar Holding GmbH, Karlsruhe and of walter services Holding GmbH, Ettlingen.

Dr. Brigitte Sträter and Dr. Oliver Nass are not members of any other supervisory boards or comparable oversight bodies within the meaning of Sec. 125 (1) Sentence 3 AktG.

Pursuant to Sec. 102 (1) AktG and Art. 7 (2) of the article of incorporation of GRENKELEASING AG, the terms in office of the Supervisory Board members Prof. Dr. Ernst-Moritz Lipp and Mr. Gerhard E. Witt ended as of the end of the Annual General Meeting on 6 May 2008.

The Annual General Meeting approved the proposal of the Supervisory Board to re-elect Prof. Dr. Ernst-Moritz Lipp and Mr. Gerhard E. Witt. They were elected for the period until the end of the Annual General Meeting that resolves the official approval of the actions of the Supervisory Board for the fiscal year 2012.

The remaining members of the Supervisory Board have been appointed until the end of the Annual General Meeting which decides on their exoneration for fiscal year 2009.

The Supervisory Board's remuneration (including payments for supplementary services) totalled EUR 72k (FY 2007: EUR 69k). In accordance with Sec. 113 (1) Sentence 2 No. 1 AktG, supervisory board remuneration is defined in Art. 10 of GRENKELEASING AG's articles of incorporation. This provision does not envisage the participation of the members of the Supervisory Board in any of the employee stock option programs. Remuneration of the Supervisory Board breaks down as follows:

		Total	Remuneration AG		Remuneration KGaA		Payments for supplementary services
EURk	2008	2007	2008	2007	2008	2007	2008	2007
Total	81	78	72	69	9	9	0	1

In addition to her work for the Supervisory Board, Dr. Sträter also assisted the Company in public relations in the previous year.

The Board of Directors of GRENKELEASING AG is comprised as follows:

` Mr. Wolfgang Grenke, businessman, Baden-Baden, Germany (Chairman) Special responsibility: strategy, company development, internal audit
` Dr. Uwe Hack, business administration graduate, Metzingen, Germany (Deputy Chairman) Special responsibility: investor relations, treasury, controlling
` Mr. Mark Kindermann, business graduate, Bühl, Germany Special responsibility: accounting, quality management, human resources, legal, administration
` Mr. Thomas Konprecht, programming graduate, certified leasing and financial consultant (VWA), Düsseldorf, Germany

Special responsibility: marketing, sales, management services

` Mr. Michael Kostrewa, businessman and industrial IT graduate, Gaggenau, Germany Special responsibility: information technology, e-business

Mr. Wolfgang Grenke holds sole power of representation. The other members of the Board of Directors represent GREN-KELEASING AG jointly with another member of the Board of Directors or with an authorised signatory.

The remuneration of the Board of Directors is as follows:

EURk	Total remuneration	Fixed portion	Variable portion
Total	1,664	1,044	620
2007	1,382	1,042	340

An annual pension premium of EUR 21k (FY 2007: EUR 21k) is included for a provident fund for Dr. Hack.

On March 12, 2007, the Chairman of the Supervisory Board of GRENKELEASING AG concluded a phantom stock agreement with, and for the benefit of, Dr. Hack. Under this agreement, Dr. Hack receives for the current fiscal year and the following fiscal year a claim to payment equal to the increase in value of 30,000 shares in GRENKELEASING AG in relation to a defined basic share price for the respective fiscal year. The share price is the unweighted arithmetic mean of the Xetra closing prices on all trading days from December 1 to December 23 of the respective prior year.

The basic share price for 2008 was EUR 22.18. The maximum payment arising from this agreement is limited to EUR 600,000 for the period of three years. Under the program, Dr. Hack is obligated to invest the respective net amount paid plus a personal contribution of 25 percent of that amount in GRENKELEASING AG shares.

As of December 31, 2008, the phantom stock had no value. The plan was treated as a cash settlement plan. But because the thresholds were not achieved, there was no outflow due from the options programmes for 2007, nor will there be for 2008. Recognition in the income statement is therefore not necessary. The basic price for 2009 is EUR 19.28.

Their shares are shown below:

	Shares as of Dec. 31
No.	2008	2007
Wolfgang Grenke	4,916,619	4,871,619
Thomas Konprecht	330,730	330,730
Mark Kindermann	52,053	52,053
Michael Kostrewa	27,500	47,500
Dr. Uwe Hack	5,000	0
Total	5,331,902	5,301,902

Mr. Wolfgang Grenke is also general manager of GLG Grenke-Leasing GmbH, Baden-Baden / Germany, and GRENKE Locazione S.r.l., Milan / Italy. He is chairman of the supervisory board of WEBLEASE NETBUSINESS AG, Baden-Baden / Germany, and of GRENKELEASING AG, Vienna / Austria. He is also a member of the advisory board of Deutsche Bank AG, Freiburg region / Germany.

Mr Mark Kindermann is also chairman of GRENKE LIMITED, Dublin / Ireland and a member of the supervisory boards of WEBLEASE NETBUSINESS AG, Baden-Baden / Germany, GRENKELEASING AG, Vienna / Austria, GRENKELEAS-ING AB, Stockholm / Sweden, and Grenkefinance N.V., Vianen / Netherlands.

Mr. Thomas Konprecht is also the chairman of the board of directors of GRENKE ALQUILER S.A., Barcelona / Spain, a member of the supervisory board of GRENKELEASING AG, Vienna / Austria, and a general manager of GLG Grenke-Leasing GmbH, Baden-Baden / Germany.

Mr. Michael Kostrewa is also a member of the supervisory boards of GRENKELEASING AB, Stockholm / Sweden, and WEBLEASE NETBUSINESS AG, Baden-Baden / Germany.

39. SUBSEQUENT EVENTS

Of the revolving credit facilities totalling EUR 80,000k, mentioned under Note 26.4, EUR 50,000k was repaid on time and the remaining EUR 30,000k was extended by an additional month.

The receivable mentioned under figure 17 due from the franchisee in Norway was converted into a long-term loan after the reporting date.

40. DECLARATION PURSUANT TO SEC. 161 AKTG

The Board of Directors and Supervisory Board of GRENKELEASING AG have issued the declaration for 2008 pursuant to Sec. 161 AktG and made this available to shareholders.

AUDITORS' REPORT

We have audited the consolidated financial statements prepared by GRENKELEASING AG, Baden-Baden, Germany, comprising the balance sheet, the income statement, the statement of changes in equity, the cash flow statement and the notes to the consolidated financial statements, together with the group management report for the fiscal year from January 1 to December 31, 2008. The preparation of the consolidated financial statements and group management report in accordance with IFRSs [International Financial Reporting Standards] as adopted by the EU, and the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB ["Handelsgesetzbuch": German Commercial Code] is the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statements and on the group management report based on our audit.

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

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRSs as adopted by the EU, the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group's position and suitably presents the opportunities and risks of future development.

Eschborn/Frankfurt am Main, Germany, January 26, 2009

Ernst & Young AG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft

Bangemann Kirch Wirtschaftsprüferin [German Public Auditor] Wirtschaftsprüfer [German Public Auditor]

DECLARATION PURSUANT TO SEC. 264 (2) SENTENCE 3 AND SEC. 289 (1) SENTENCE 5 HGB

We confirm that, to the best of our knowledge, the consolidated financial statements give a true and fair view of the net assets, financial position and results of operations of the Group and the group management report gives a true and fair view of business performance including financial performance and the situation of the Group, and describes the main opportunities and risks relating to the Group's anticipated development in accordance with the applicable financial reporting framework.

Baden-Baden, Germany, January 26, 2009

Executive Board

DATES 2009

05/02/2009 Publication of Annual Accounts for 2008 DVFA Analyst Conference / Balance Press Conference in Frankfurt (Main)
30/04/2009 Publication of Quarterly Financial Report as per March 31, 2009
12/05/2009 Annual General Meeting in Baden-Baden
28/07/2009 Publication of Quarterly Financial Report as per June 30, 2009
28/10/2009 Publication of Quarterly Financial Report as per September 30, 2009 DVFA Analyst Conference in Frankfurt (Main)

CONTACT

Renate Hauss Corporate Communications

GRENKELEASING AG Neuer Markt 2 76532 Baden-Baden

Tel.: +49 (0) 7221 – 500 72 04 Fax: +49 (0) 7221 – 500 71 12

www.grenke.de www.weblease-europe.com www.asset-broker.de

E-Mail: [email protected]

You may find the detailed glossary to this report on: www.grenke.de

The report is published in German and as an English translation. In the event of any conflict or inconsistency between the English and the German versions, the German original shall prevail.

GRENKELEASING AG Neuer Markt 2 D - 76532 Baden-Baden

Tel.: +49 (0) 7221 5007-204 Fax: +49 (0) 7221 5007-112

www.grenke.de www.weblease-europe.com www.asset-broker.com

E-mail: [email protected]

AI assistant

Grenke AG — Annual Report 2008

189_10-k_2009-03-04_0bad0ff1-c7fc-4ff5-8587-3953d08cd165.pdf

KEY FIGURES OF GRENKELEASING AG GROUP AND THE GRENKE GROUP

GROUP MANAGEMENT REPORT FOR FISCAL YEAR 2008

GENERAL

BUSINESS PROFILE

Business Model

Presence across Europe

The Group's Growth Strategy

Development and Structure of Services

Corporate Management

Equity Ratio and Return on Equity Are Key Targets

Our Broad Portfolio of Refinancing Instruments Allows Flexible Liquidity Management

FISCAL YEAR 2008

Economic Conditions and Industry Performance

Economy as a Whole

Industry Performance

Significant Developments During The Financial Year

A Steep Growth Path

Financial Markets Under Strain Due to Subprime Crisis

GRENKELEASING Ratings Confirmed

Financial Regulation Adopted for the Leasing and Factoring Industries

Report on the Results of Operations

Report on the Development of the Segments

Report on the Financial Position and Net Assets

Overall Statement on the Financial Situation of the Group

ADDITIONAL INFORMATION

Sales and Customer Structure

Structure of the Supplier Base

Research and Development

Personnel

Changes in the Executive Bodies

Report on the Remuneration of Executive Bodies

Remuneration of the Board of Directors

Supervisory Board Compensation

Shares Held and Share Transactions by the Executive Bodies

Disclosures Pursuant to Sec. 315 (4) HGB

Corporate Governance

RISK MANAGEMENT REPORT

Risk Policy/Strategy

Credit Risk

Reseller Risk

Cash Flow Risk

Process Risk

Contractual Risk

Sales Risk

Country Risk

Financial Market Risk

Interest Rate Risk

Currency Risk

Refinancing Risks

Risk Summary

EVENTS OF PARTICULAR SIGNIFICANCE AFTER THE CLOSE OF THE FISCAL YEAR

REPORT ON FORECASTS AND THE OUTLOOK FOR THE GROUP

Economic Environment

Opportunities and Risks

Anticipated Development of Business

Fiscal Year 2009

Subsequent Years

Executive Board

CONSOLIDATED INCOME STATEMENT FOR FISCAL YEAR 2008

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2008

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2008

CONSOLIDATED CASH FLOW STATEMENT FOR FISCAL YEAR 2008

CONSOLIDATED CASH FLOW STATEMENT FOR FISCAL YEAR 2008: CONTINUED

STATEMENTS OF CHANGES IN CONSOLIDATED EQUITY FOR FISCAL YEAR 2007

STATEMENTS OF CHANGES IN CONSOLIDATED EQUITY FOR FISCAL YEAR 2008

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR FISCAL YEAR 2008

1. COMMERCIAL REGISTER AND PURPOSE OF THE COMPANY

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

2.2 Changes in Disclosures

2.3 New Accounting Standards

2.4 Future Accounting Standards

2.5 Consolidation Policies

2.6 Foreign Currency Translation

2.6.1 Foreign Currency Transactions

2.6.2 Foreign Entities

2.7 Historical Cost Accounting

Grenke AG Annual Report 2008