Grenke AG — Annual Report 2009

Feb 16, 2010

GRENKELEASING AG GROUP

FINANCIAL REPORT 2009

2009

KEY FIGURES

	Jan. 1, to Dec. 31, 2009	Change (in %)	Jan. 1, to Dec. 31, 2008	Units
Key figures of GRENKE Group including franchise partners
New business of GRENKE Group	497,120	-17.3	600,975	EURk
- of which: Germany	244,537	-23.6	320,113	EURk
-of which: International	252,582	-10.1	280,862	EURk
New business of franchise partners (Factoring consolidated in the GRENKELEASING AG Group from Q3 2009)	43,806	24.1	35,294	EURk
Factoring business (Germany)	43,627	-24.9	58,105	EURk
Deposits GRENKE BANK	106,379	n. a.	0	EURk
Key figures of GRENKE Group leasing business excluding factoring / bank
New business GRENKE Group leasing business	453,492	-16.5	542,870	EURk
Contribution margin 2 (CM2) of new business	85,262	-1.0	86,159	EURk
Number of new contracts	62,321	-10.7	69,824	Units
Share of IT products in the lease portfolio	86	1.2	85	percent
Share of corporate customers in the lease portfolio	100	0.0	100	percent
Mean acquisition value	7.3	-10.3	7.8	EURk
Mean term of contract	46	0.0	46	Months
Volume of leased assets	1,711	1.4	1,687	EURm
Number of current contracts	226,806	2.2	222,032	Units
GRENKELEASING AG Group, consolidated figures
Net interest income	71,781	5.5	68,044	EURk
Settlement of claims and risk provisioning	-31,189	55.1	-20,110	EURk
Profit from insurance business	20,301	0.7	20,151	EURk
Profit from new business	23,047	-5.3	24,327	EURk
Profit from disposals (income exceeding the calculated residual value)	-312	-113.8	2,266	EURk
Result from currency translation difference	726	-124.9	-2,911	EURk
Other operating income	2,671	101.4	1,326	EURk
Costs of new contracts	14,288	-8.2	15,568	EURk
Costs of current contracts	5,659	3.8	5,453	EURk
Project costs and basic distribution costs	14,334	18.7	12,076	EURk
Management costs	13,355	0.9	13,232	EURk
Costs of the bank	3,819	n. a.	0	EURk
Other costs	1,573	-26.5	2,140	EURk
EBIT (Earnings before interest and taxes)	33,997	-23.8	44,624	EURk
Other interest result	-203	-531.9	47	EURk
Income / expenses from market valuation of financial instruments	-159	n. a.	0	EURk
EBT (Earnings before taxes)	33,635	-24.7	44,671	EURk
Net profit for the period	24,612	-25.7	33,143	EURk
Earnings per share	1.80	-25.6	2.42	EUR
Dividend (2009 proposed distribution)	0.60	0.0	0.60	EUR
Embedded value of the lease portfolio (incl. equity before taxes)	365	2.5	356	EURm
Embedded value of the lease portfolio (incl. equity after taxes)	336	3.7	324	EURm
Cost / income ratio	61.1	14.2	53.5	percent
Return on equity (ROE) after taxes	9.4	-30.4	13.5	percent
Average number of employees	507	5.2	482	persons

LETTER TO SHAREHOLDERS FROM THE BOARD OF DIRECTORS	3
REPORT OF THE SUPERVISORY BOARD	5
THE BOARD OF DIRECTORS OF GRENKELEASING AG	9
THE SUPERVISORY BOARD OF GRENKELEASING AG	10
CORPORATE GOVERNANCE REPORT	11
OUR SHARES AND INVESTOR RELATIONS	16
GROUP MANAGEMENT REPORT FOR FISCAL YEAR 2009	21
CONSOLIDATED FINANCIAL STATEMENTS FOR FISCAL YEAR 2009	53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR FISCAL YEAR 2009	60
AUDIT OPINION	128
DECLARATION IN ACCORDANCE WITH SEC. 297 (2) SENTENCE 4 AND SEC. 315 (1) SENTENCE 6 HGB	129
CALENDAR 2010 AND CONTACT	130

LETTER TO SHAREHOLDERS FROM THE BOARD OF DIRECTORS

Dear Shareholders, Ladies and Gentlemen,

The business model of GRENKELEASING is established and well developed – it has proven itself in growth phases and recessions alike over past decades. This protects the Group in a recession as difficult as that of the 2009 fiscal year. While it has left marks on our income statement, 2009 will remain only a minor and short-lived deviation from our long-term growth trend overall.

As early as the beginning of 2009, we had already comprehensively adapted our company management to the changing macroeconomic environment in Europe. Our efforts throughout the year centred around increasing the profitability of new business while at the same time limiting risks. And we have been highly successful: The contribution margin 2 for new business in the GRENKE Group leasing division including franchise partners rose to 18.8 percent in the 2009 fiscal year after 15.9 percent in the previous year.

Thus, we cushioned the negative effects of the recessive environment with rising interest income. In particular, these negative effects were reflected by an increase in losses and income from disposals only slightly below our forecast. The crucial factor is that the loss rate did not exceed the peak levels reached during previous recessions in spite of the extraordinary severity of the current recession and that losses stabilised in the fourth quarter of 2009. We have therefore once again highlighted our ability to manage the risk profile of our receivables portfolio successfully in the long term.

In the light of the elevated uncertainty regarding future economic developments and the liquidity of the capital markets, we initially restricted our new business at the beginning of 2009. However, as the first indications of economic stability emerged, we steered back towards growth in the summer without relinquishing our focus on a low risk profile. In some international markets in particular, where competitors have now taken on a more restrictive positioning or withdrawn altogether, the change in direction was brought about very quickly, allowing us to increase significantly again over the course of the year. In net terms, the new business of the GRENKE Group declined by 17.3 percent in 2009 to EUR 497.1 million.

In the past fiscal year, we did not just continue the GRENKE Group's development along its previous heading, we also opened a brand new chapter in the history of the company with the acquisition of Hesse Newman bank (now: GRENKE BANK). Through this company we can now manage our refinancing independently of banks and the capital markets with deposits from private and commercial customers. Already in the 2009 fiscal year, we collected total bank deposits of EUR 106.4 million – initially mainly from private clients. We reach our customers efficiently and at low cost through our Internet portal www.grenkebank.de.

The banking licence now obtained has also opened up new opportunities to expand our product range in lease financing and in completely new product areas. The launch of our first additional products is scheduled to take place very shortly. The goal is to provide our existing base of small and medium-sized customers comprehensively with all financial products that are suitable for online sales and that we can offer using our IT-based, automated contract settlement system at attractive conditions. The broad diversification of our receivables portfolio and active risk management will remain the key cornerstones of our product range. In line with this thinking, we will also further expand our factoring business, which we integrated into the Group with the acquisition of our former franchise partner in 2009. Furthermore, we reinitiated the expansion of our European presence in the opening weeks of this new fiscal year with a new location in Belfast and the signing of an agreement with a further franchise partner in Luxembourg.

To accompany these milestones in product development we also expressly emphasised our ability to refinance our future growth in 2009: Alongside the standard business activities and the addition of bank deposits to our refinancing range, August saw the highlight of our issuing activities in the 2009 fiscal year with the placement of a three-year fixed-rate bond of EUR 100 million that was more than twice oversubscribed. The New Year also got off to a good start with the placement of an ABS bond at the beginning of 2010.

We are therefore well positioned for a further successful fiscal year and are confident of visibly outstripping our long-term target of at least ten percent with planned growth of around 15 percent. Firstly, this is because the strong market demand is being documented by continual increases in leasing requests. Secondly, and above all, because we have a first-rate team that again proved its special dedication and efficiency in 2009, making the success of the past fiscal year possible. For this, the Board of Directors wishes to thank all the employees of the Group. I would also like to thank our shareholders and business partners on behalf of the Board of Directors for their trust in the GRENKE Group. We are working intensively to deserve and earn this trust anew every single day.

Wolfgang Grenke Chairman of the Board of Directors

REPORT OF THE SUPERVISORY BOARD

The Supervisory Board performed the activities required of it by law and the articles of incorporation of GRENKELEASING AG in the fiscal year 2009. It worked with the Board of Directors on an ongoing basis, advised it regularly and monitored its management of business. The strategic orientation of the Group was closely coordinated between the Board of Directors and the Supervisory Board. The Board of Directors directly involved the Supervisory Board in all decisions of fundamental significance to the company. The Supervisory Board also received information regularly, comprehensively and in a timely manner, both orally and in writing, on all key issues, including on the basis of submissions by the Board of Directors and minutes of meetings. The Board of Directors provided the Supervisory Board with detailed information on the strategic development of the Group, its economic situation, the current course of business and current events, the status of corporate planning and the personnel situation. The Board of Directors submitted matters requiring approval for resolution in a timely manner.

There were no conflicts of interest on the part of members of the Board of Directors or Supervisory Board that would have required immediate disclosure to the Supervisory Board and reporting to the Annual General Meeting in the fiscal year.

In the first three quarters of the year, the Supervisory Board regularly acknowledged reports on the risk management system of the Group and its ongoing development, the current risk situation due to the recession and sales management in line with the particular refinancing situation. If so required by law and the articles of incorporation, the Supervisory Board closely examined, discussed and then voted on the reports and resolution proposals of the Board of Directors. The key issues at the meetings of the Supervisory Board included the adoption of the annual financial statements of GRENKELEASING AG and the approval of the consolidated financial statements as of December 31, 2008 and the monitoring of the international entities. Furthermore, the Supervisory Board's discussions in the reporting year also focused on the preparation for and execution of the acquisition of the bank Hesse Newman & Co. and the integration of the recently acquired entities.

In the reporting year, the Supervisory Board dealt in depth with the German Corporate Governance Code in its respective versions. In this context it also discussed the changes in the legal situation regarding the appropriateness of Board of Directors salaries and the new duties of the Supervisory Board and its members. It found that it was not necessary to amend its established practices. Together with the Board of Directors it issued the declaration of compliance of GRENKELEASING AG in line with Section 161 of the German Stock Corporation Act on the recommendations of the Government Commission on the German Corporate Governance Code (versions dated June 6, 2008 and April 27, 2009) as promulgated by the Federal Ministry of Justice in the official section of the electronic Federal Gazette on August 8, 2008. The Board of Directors also reports on corporate governance at GRENKELEASING AG on behalf of the Supervisory Board in this financial report on the fiscal year 2009. All the members of the Supervisory Board have personally undertaken to comply with the principles of corporate governance applicable in the reporting year.

The Supervisory Board met a total of five times in the fiscal year 2009. The meetings took place on January 12 and 29, April 7, July 27 and November 8/9, 2009. The extraordinary kick-off meeting at the start of the year essentially concerned the planned purchase of the Hesse Newman bank and its strategic significance to the Group. The meeting on January 29 focused on the adoption of the annual financial statements and the approval of the consolidated financial statements as of December 31, 2008. As per the articles of incorporation, the Supervisory Board and the Board of Directors also resolved at the same meeting to broadcast the speech of the Board of Directors and the general debate at the Annual General Meeting of May 12, 2009 on the Internet. The members of the Supervisory Board were in almost full attendance at all meetings.

The Supervisory Board was also informed by the Board of Directors of transactions of particular significance between its meetings. As the Chairman of the Supervisory Board, I personally maintained close, regular contact with the Board of Directors outside scheduled meetings and informed myself of current business development and key transactions. In particular, the due diligence for the Hesse Newman bank, the talks with the Federal Office for Supervision of Financial Services and on deposit insurance formed a part of my activities. The special situation on the capital markets in the first half of the year called for a commitment beyond the meetings of the Supervisory Board in order to guarantee refinancing. Other issues discussed in personal talks with the Board of Directors included those of compliance, internal controlling and risk management.

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 2009 were:

Prof. Dr. Ernst-Moritz Lipp, Chairman Gerhard E. Witt, Deputy Chairman Dieter Münch Dr. Oliver Nass Erwin Staudt Dr. Brigitte Sträter

There were no changes in the members of the Supervisory Board or the Board of Directors in the reporting year.

In accordance with its Rules of Procedure, the Supervisory Board formed two committees to assist in the efficient performance of its duties, the Audit Committee and the Personnel Committee (Executive Committee). The latter also performs the function of a nomination committee. The Supervisory Board has also transferred certain authorities to the committees in accordance with its Rules of Procedure. The committees prepare the issues and resolutions relevant to them, which are then discussed by the Supervisory Board as a whole. The chairs of the committees reported to the Supervisory Board in detail on the work of their committees in its meetings.

The Audit Committee consists of the following three members with special knowledge in the area of accounting:

Prof. Dr. Ernst-Moritz Lipp Gerhard E. Witt (Chairman) Dieter Münch

The Audit Committee primarily deals with issues of internal and external accounting, the systems of corporate planning and risk management at the company. It reviews and monitors the requisite independence of the auditor in accordance with Article 7.2.1 of the German Corporate Governance Code, commissions the auditor, determines the audit focus and is responsible for the fee agreement with the auditor. In the reporting year the Audit Committee did not learn of any circumstances calling the independence of the auditor into question and therefore took no further measures to ensure this.

The Audit Committee met twice in the reporting year. At its meetings on January 16 and 29, 2009 the Audit Committee dealt in particular with the 2008 annual financial statements and discussed these in depth with the auditor in attendance. The meeting also prepared the decision of the Supervisory Board to adopt the 2008 annual financial statements and approve the consolidated financial statements. On February 1, 2010 the Audit Committee again prepared the decision of the Supervisory Board to adopt the annual financial statements and approve the consolidated financial statements and, in the presence of the auditor, discussed the 2009 annual financial statements in depth.

The Personnel Committee consists of the following three members:

Prof. Dr. Ernst-Moritz Lipp Gerhard E. Witt Erwin Staudt (Chairman)

In particular, the Personnel Committee is responsible for the Supervisory Board's personnel decisions and for concluding, amending and terminating employment agreements with the members of the Board of Directors. The Personnel Committee met once in the 2009 fiscal year. The purpose of this meeting was to determine the remuneration parameters for members of the Board of Directors with regard to the forthcoming fiscal year.

The annual financial statements of GRENKELEASING AG as of December 31, 2009 prepared by the Board of Directors, the management report of the company for the 2009 fiscal year, the consolidated financial statements as of December 31, 2009 and the Group management report for the 2009 fiscal year were submitted to the Supervisory Board for review at its meetings on February 1 and 4, 2010. The Board of Directors made its proposal to the Supervisory Board for the appropriation of the profits of GRENKELEASING AG.

The annual financial statements were audited by Ernst & Young GmbH, Wirtschaftsprüfungsgesellschaft, Eschborn/Frankfurt am Main, the legal successor to the auditor elected by the Annual General Meeting on May 12, 2009, Ernst & Young AG, Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Eschborn/Frankfurt am Main. The accounting of the separate financial statements of GRENKELEASING AG was prepared in accordance with the provisions of the German Commercial Code (HGB). The HGB annual financial statements were audited in accordance with the provisions of Section 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, IDW PS 200). The consolidated financial statements and the Group management report for the fiscal year from January 1 to December 31, 2009 were prepared in accordance with the provisions of Section 315a (1) HGB on the basis of the International Financial Reporting Standards (IFRSs) as adopted in the EU.

The consolidated financial statements were audited in accordance with the provisions of Section 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW). Unqualified audit opinions were issued for both the annual financial statements of GRENKELEASING AG and the consolidated financial statements of the GRENKELEASING AG Group.

These documents and the proposal of the Board of Directors for the appropriation of profits were issued to the Supervisory Board by the Board of Directors in a timely manner. The Supervisory Board examined the annual financial statements submitted to it by the Board of Directors and the auditor in depth and discussed them in its meetings on February 1 and 4, 2010. The auditor responsible took part in the discussions and reported on the key results of the audit. Following its own examination, the Supervisory Board raised no objections to the results of the audit of the annual financial statements by the auditor and thereby adopted the annual financial statements of GRENKELEASING AG on February 1, 2010 and, by an additional decision on February 4, 2010, approved the GRENKELEASING AG consolidated financial statements. The Supervisory Board endorsed the proposal of the Board of Directors on the appropriation of the profits of GRENKELEASING AG.

In the meeting on February 1, 2010 the Supervisory Board also dealt with the mandatory disclosures in accordance with Section 289 (4) and 315 (4) HGB and the related report. Please see the corresponding information in the management report of GRENKELEASING AG and in the Group management report. The Supervisory Board has reviewed these disclosures and this information, which it believes to be complete, and adopts them.

The GRENKE shares performed extremely well in the 2009 fiscal year with growth of more than 50 percent. Thus, during the general market recovery following the down year of 2008, they improved significantly more than their relevant indices, the DAX and SDAX. When examining this positive share price performance it should also be remembered that the shares underwent significantly less of a correction than their comparative indices in the previous year. Capital market participants thereby offered a striking acknowledgement of the resilience of GRENKE's business model in the worst recession in over 70 years, confirming the confidence advanced in 2008.

In the 2009 fiscal year again, the refinancing of the GRENKELEASING Group was ensured at all times on account of its diversified sources of capital and targeted liquidity management, in spite of the persistently more difficult conditions on the capital markets. A key contribution to this was also made by the Hesse Newman bank which, operating under its new name of GRENKE BANK AG, was successfully integrated within a very short time.

The Supervisory Board wishes to thank all the employees and the members of the Board of Directors for their ready commitment in a challenging time and the work they have done. Your personal commitment made it possible for the GRENKELEASING AG Group to continue developing successfully and to bring the year 2009 to a successful close.

Baden-Baden, February 4, 2010

On behalf of the Supervisory Board

Prof. Dr. Ernst-Moritz Lipp Chairman

THE BOARD OF DIRECTORS OF GRENKELEASING AG

THE SUPERVISORY BOARD OF GRENKELEASING AG

Name/Residence	Activity	Other Supervisory Board / Advisory Board Functions
Prof. Dr. Ernst-Moritz Lipp Baden-Baden, DE Born 1951 First elected: 2003 Elected until the Annual General Meeting 2012	Chairman of the Supervisory Board, Professor of international finance, General manager of ODEWALD & COMPAGNIE Gesellschaft für Betei- ligungen mbH	BOA Holding GmbH, Karlsruhe- Stutensee, DE; OYSTAR Holding GmbH, Karlsruhe, DE; walter services Holding GmbH, Ettlingen, DE; Sodexo Beteiligungs B.V. & Co. KG, Heidelberg, DE; GRENKE BANK AG, Hamburg, DE
Gerhard E. Witt Baden-Baden, DE Born 1945 First elected: 1997 Elected until the Annual General Meeting 2012	Vice Chairman of the Supervisory Board, Public auditor and tax advisor	Grenke Investitionen Verwal- tungs KGaA, Baden-Baden, DE
Dr. Brigitte Sträter Düsseldorf, DE Born 1940 First elected: 2001 Elected until the Annual General Meeting 2010	Member of the Supervisory Board, Owner and manager of the PR- Agency CENA
Dieter Münch Weinheim, DE Born 1943 First elected: 2000 Elected until the Annual General Meeting 2010	Member of the Supervisory Board, Retired bank officer, Chairman of a foundation	Grenke Investitionen Verwal- tungs KGaA, Baden-Baden, DE; Weisenburger Bau + Grund AG, Halle/Saale, DE; Kazenmaier FleetService GmbH, Karlsruhe, DE
Dr. Oliver Nass Paris, FR Born 1968 First elected: 2005 Elected until the Annual General Meeting 2010	Member of the Supervisory Board, General manager of ESG France
Erwin Staudt Leonberg, DE Born 1948 First elected: 2005 Elected until the Annual General Meeting 2010	Member of the Supervisory Board, Economics graduate, President of the football club VfB Stuttgart 1893 e.V.	PROFI Engineering Systems AG, Darmstadt, DE; USU AG, Möglingen, DE; Hahn Verwal- tungs-GmbH, Fellbach, DE

CORPORATE GOVERNANCE REPORT

Responsibility and good corporate governance represent the cornerstones of management activity at GRENKELEASING. The Board of Directors, Supervisory Board and executive employees of GRENKELEASING AG identify with the principles of value-based and transparent company management. They are aware of the special significance of these principles for the assessment and valuation of the company by shareholders and capital providers on the capital market and for increasing confidence among present and future customers, employees, business partners and the public at large.

GRENKELEASING AG complies with the recommendations of the German Corporate Governance Code dated June 6, 2008 without exception. The Board of Directors and the Supervisory Board have discussed their compliance with the Code in their meetings and passed the declaration of compliance with the Code reproduced on page 15 of this financial report. The declaration can also be found on the website of GRENKELEASING AG.

GROUP MANAGEMENT AND MONITORING

GRENKELEASING AG has a Board of Directors consisting of five members and a Supervisory Board composed of six members.

The Supervisory Board

In the fiscal year 2009, the Board of Directors reported to the Supervisory Board regularly, in detail and comprehensively on the economic and refinancing situation of the company, the status of corporate planning and current events. The Supervisory Board coordinated strategic development with the Board of Directors and discussed issues of risk provisioning and risk management.

The responsibilities of the Supervisory Board include appointing and monitoring the members of the Board of Directors and adopting the annual financial statements of GRENKELEASING AG and approving the consolidated financial statements, taking into consideration the reports by the auditors and the findings of the Audit Committee (see the "Report of the Supervisory Board" on page 5). A further key activity is examining and approving acquisitions of companies. The Rules of Procedure of the Supervisory Board provide for the formation of committees. The Supervisory Board of GRENKELEASING AG has formed two committees to assist in the efficient performance of its duties and has transferred certain authorities to them in line with its Rules of Procedure. The committees prepare the issues and resolutions relevant to them, which are then discussed by the Supervisory Board as a whole. The chairs of the committees report to the Supervisory Board in detail on the work of their committees in its meetings.

The Audit Committee

The Audit Committee consists of three members with special knowledge in the area of accounting and compliance. It primarily deals with issues of external and internal accounting and the systems of corporate planning and risk management at the company. It reviews and monitors the independence of the auditor in accordance with Article 7.2.1 of German Corporate Governance Code, determines the audit focus and is responsible for the fee agreement with the auditor. The Audit Committee also prepares the decision of the Supervisory Board on the adoption of the annual financial statements and the approval of the consolidated financial statements.

As part of the Supervisory Board's activities under the German Corporate Governance Code, the Audit Committee also deals with compliance issues. The Board of Directors regularly reports to the Audit Committee on the compliance situation in the company.

Personnel Committee (Executive Committee)

The Personnel Committee consists of three members. In particular, it prepares the personnel decisions of the Supervisory Board and is responsible for concluding, amending and terminating employment agreements with the members of the Board of Directors.

The Board of Directors

The Board of Directors manages the Group under its own responsibility and is responsible for the strategic development of the company and compliance with principles of corporate policy. In addition, it prepares the quarterly financial statements, the annual financial statements of GRENKELEASING AG and the consolidated financial statements. The Board of Directors reports to the Supervisory Board regularly and comprehensively by way of reports and proposals on the company as a whole, issues of strategy and its implementation, planning, business performance, the financial and earnings situation and business risks.

The Rules of Procedure of the Board of Directors contain a list of transactions requiring approval. Key decisions by the Board of Directors – such as acquisitions and financial measures – require the approval of the Supervisory Board. The Board of Directors and the Supervisory Board are liable to pay damages to the company in the event of culpable neglect.

Remuneration Structure and Remuneration of the Board of Directors and the Supervisory Board

The principles of the remuneration system for the Board of Directors provide for a fixed basic annual salary and a variable remuneration component. It is calculated on the basis of the company's results for the current fiscal year and criteria relating to the long-term success of the company.

EUR	Grenke	Konprecht	Kostrewa	Kindermann	Dr. Hack	Total 2009	Total 2008
Gross salary	328,965.89	172,505.34	127,612.34	128,202.64	267,181.98	1,024,468.19	1,023,168.86
Performance bonus	156,909.00	77,290.25	57,967.70	57,967.70	132,939.23	483,073.88	472,304.34
Bonus	80,010.00	40,005.00	30,003.75	30,003.75	68,808.60	248,831.10	147,725.00
Phantom stocks	0	0	0	0	300,195.00	300,195.00	0
Pensions	0	0	0	0	21,000.00	21,000.00	21,000.00
Total costs	565,884.89	289,800.59	215,583.79	216,174.09	790,124.81	2,077,568.17	1,664,198.20

Remuneration of the Board of Directors

Total remuneration for the Board of Directors amounted to EUR 2,078k in the 2009 fiscal year (2008: EUR 1,664k). The criteria for the variable remuneration component are defined in advance each year based on the development of EBIT (earnings before interest and taxes) and the development of the key performance indicators of a balanced scorecard (BSC). The attainment of the EBIT 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 is intended to increase enterprise value in the long term. 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 and a reinvestment offer with Dr. Hack for the fiscal years 2007 to 2009. It is treated as a cash settlement plan. 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.

If the options have any value, the changes in value are taken to profit or loss in the income statement for the relevant fiscal years. Under the programme, Dr. Hack is required to invest the respective net amount paid plus a personal contribution of 25 percent of that amount in GRENKELEASING AG shares. The basic share price for 2009 was EUR 19.2759. In 2009, the unweighted arithmetic mean of the Xetra closing prices was higher than the defined basic share price, which means that the phantom stocks multiplied by the difference in share price had a value of EUR 300,195 as of December 31, 2009.

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. The premium cannot be split individually. No further benefits have been agreed with any members 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.

		Basic
		remuneration	Audit	Personnel	Variable	Travel	Total	Total
Name	Function	2009	Committee	Committee	remuneration	expenses	2009*	2008*
EUR
Prof. Dr. Lipp	Chairman	9,000.00	600.00	900.00	5,250.00	398.51	16,148.51	16,246.50
	Member of the
Münch	Supervisory Board	6,000.00	600.00	–	3,300.00	882.64	10,782.64	12,072.59
	Member of the
Dr. Nass	Supervisory Board	6,000.00	–	–	3,000.00	1,112.92	10,112.92	11,482.58
	Member of the
Staudt	Supervisory Board	6,000.00	–	600.00	3,300.00	–	9,900.00	10,313.00
	Member of the
Dr. Sträter	Supervisory Board	6,000.00	–	–	3,000.00	929.70	9,929.70	10,071.60
Witt	Deputy Chairman	6,000.00	900.00	600.00	3,750.00	124.00	11,374.00	12,134.00
Total		39,000.00	2,100.00	2,100.00	21,600.00	3,447.77	68,247.77	72,320.27

Remuneration of the Supervisory Board

* fixed remuneration, variable remuneration and travel expenses

In the fiscal year 2009, the members of the Supervisory Board received a total of EUR 68.2k (previous year: EUR 72.3k) including travel expenses in remuneration for their work. The individual summary of Supervisory Board remuneration, broken down by fixed and variable components, is shown in the above table.

The remuneration of the members of the Supervisory Board is regulated in the articles of incorporation of GRENKELEASING AG and determined by the Annual General Meeting. As per the articles of incorporation, the members of the Supervisory Board received fixed annual remuneration of EUR 6,000, the Chairman EUR 9,000. There is also variable remuneration if a dividend of more than EUR 0.20 is distributed to shareholders.

If this occurs, the fixed remuneration is increased by one quarter of the percentage rate by which the dividend per share exceeds EUR 0.20. The variable remuneration component is limited to a maximum of 50 percent of the fixed remuneration of a member of the Supervisory Board. Remuneration increases by EUR 600 for each Supervisory Board member who is also a member of a committee, or by EUR 900 for the Chairman of a committee per year.

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 chairs of committees is reduced accordingly.

In addition, the directors' and officers' liability insurance of GRENKELEASING AG, which was described in the previous section "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 VAT insofar as they are entitled to invoice the tax separately and actually do so.

Accounting, Audits of Financial Statements and Financial Reporting

Group accounting for the fiscal year from January 1 to December 31, 2009 was conducted in accordance with the provisions of International Financial Reporting Standards (IFRSs) as adopted in the EU. In preparing the consolidated financial statements and the Group management report, the company also complied with and applied the provisions Section 315 a (1) HGB. The consolidated financial statements were audited in accordance with the provisions of Section 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, IDW PS 200).

The Audit Committee ensures the independence of the auditor and proposes an auditor for election to the Annual General Meeting. The auditor is elected by the Annual General Meeting in accordance with the statutory provisions.

Transparency and Reporting to Shareholders

GRENKELEASING uses the Internet to report to shareholders, all capital market participants and the media comprehensively, equally and promptly. All ad hoc disclosures and press releases, annual and quarterly reports and notifications in accordance with Section 15 of the German Securities Trading Act are published in German and English. The declarations of compliance with the German Corporate Governance Code are available on the website.

Shareholders can also find out about the Group, its management and organisational structure on the Internet. Notifications by the company are published in the electronic Federal Gazette (Bundesanzeiger). Shareholders can watch the report by the Board of Directors and the general debate at the Annual General Meeting on the Internet. Proxies appointed by the company can be entrusted to exercise voting rights, even in absentia. The dates of regular financial reporting are shown in the financial calendar. The GRENKE shares have been reported on in detail in the section "Our Shares and Investor Relations" on page 16.

Controlling and Risk Management

The risk management system at the GRENKELEASING AG Group 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 GRENKELEASING AG risk management system is continually expanded and operated using a risk management tool on the intranet of GRENKELEASING Group.

Since the 2009 Annual Tax Act came into effect, leasing companies must also comply with the Minimum Requirements for Risk Management [Mindestanforderungen an das Risikomanagement (MaRisk)] published by Deutsche Bundesbank and the German Federal Office for Supervision of Financial Services (BaFin). Leasing companies were granted 2009 as a transition period for implementation. Full implementation is required in 2010. The GRENKELEASING AG Group largely implemented MaRisk in 2009. The appropriate risk management and controlling processes demanded by MaRisk for the key types of risks – counterparty, market value, liquidity and operational risks – have been implemented in the GRENKELEASING AG Group.

The functionality of the risk management system and the results of its measures are reviewed by the internal audit department. The internal audit department reports directly to the Board of Directors. Details on the risk management system can be found on page 38.

Declaration of Compliance

The Board of Directors and Supervisory Board of GRENKELEASING AG issued the following declaration of compliance on April 27, 2009:

"Following due examination, the Board of Directors and the Supervisory Board of GRENKELEASING AG issue the following declaration of compliance:

GRENKELEASING AG complies with the recommendations of the German Corporate Governance Code dated June 6, 2008. Since issuing its last declaration on April 7, 2008, GRENKELEASING AG has complied with all recommendations of the German Corporate Governance Code as currently amended.

Baden-Baden, Germany, April 27, 2009

GRENKELEASING AG

The Supervisory Board The Board of Directors"

OUR SHARES AND INVESTOR RELATIONS

The price of the GRENKE share significantly outperformed the relevant benchmark indices in fiscal year 2009. While the SDAX price index climbed by 21 percent as the markets experienced a general recovery following the slump of almost 48 percent in the previous year and DAXsector Financial Services index gained almost seven percent, the GRENKE shares clearly outperformed by comparison with growth of 56.9 percent.

In contrast to the market as a whole, the GRENKE shares did not undergo any correction in the first quarter of 2009. Rather, it bucked the market by rising slightly from the beginning of the year, while the stock market continued its downward trend from 2008 and bottomed out in March 2009. The share price did not fall below the level at which it began the year; EUR 18.80 was the lowest point it reached over the year. The high for the year of EUR 30.22 was achieved on the penultimate day of trading, December 29, and the shares ended the year at EUR 29.50. In net terms, the price of the GRENKE share therefore rose continuously over the whole of 2009.

DIVIDEND POLICY

The dividend policy of GRENKELEASING AG is still based on the criteria of continuity, yield and safeguarding the equity base for future growth. Thus, the GRENKE shares offer investors ongoing income combined with attractive growth prospects and high intrinsic value. In recent years, we have enjoyed good profitability and continuously increased our equity ratio. Even over the last two years, known as a period of great difficulty for the international finance sector, at 16.9 percent in 2008 and 17.5 percent in 2009, we kept our equity ratio visibly above our strategic target of 16 percent, expanding this even further in the reporting year.

Thus, GRENKELEASING kept a tight rein on the pressures wrought by the financial market crisis overall. The priority in the 2009 fiscal year was shoring up our strong equity base. As a result, we maintained our high rating, thereby protecting our access to attractive refinancing opportunities. The criterion of distribution continuity can therefore also be upheld for the past fiscal year. Accordingly, the management is again proposing a distribution at the high end of the target distribution range. The Board of Directors and the Supervisory Board will therefore propose to the Annual General Meeting of GRENKELEASING AG on May 11, 2010 a dividend on par with the previous year's level of EUR 0.60 per share for the 2009 fiscal year.

INVESTMENT CASE

Regarding the positioning of our shares on the capital market, we focus on material aspects such as our growth strategy, market leadership in our core business, highly effective risk management – even under the new statutory requirements (MaRisk) – and their high intrinsic value in terms of return on equity and embedded value. By gearing management towards contribution margin 2, we are focusing our business on high-margin business areas. Regardless of the deliberate temporary slowdown in growth in the fiscal year 2009, it remains our clear goal to turn new business into earnings momentum in the medium term. The key requirement for this, namely efficient control of costs and risks, is ensured by our sophisticated risk management strategy. This allows us to clearly categorise and thereby quantify risks. Furthermore, we can react flexibly to changes in market conditions, while at the same time achieving appropriate risk premiums.

In particular, our ability to price in appropriate risk premiums proved highly beneficial in the financial market crisis of the past two fiscal years. Refinancing costs were again fully passed on to the market in 2009 and net interest income not only remained significantly above our target margin but also increased again. This effectively cushioned the inevitable rise in the loss rate due to the recession. A highly important property of our cost and risk management is its function as a barrier to market entry to competitors. Together with our finely honed sales system, we feel we are well equipped for future growth.

INVESTOR RELATIONS

Our investor relations work maintains an open and ongoing exchange of information with investors, analysts and media representatives. The Board of Directors again explained the business model of the GRENKE Group to the capital market and reported on the company's performance at a number of roadshows and investor conferences in Europe's leading financial centres in the fiscal year 2009.

In addition, we frequently speak to market participants and media representatives in one-on-one talks and in conference calls to discuss the business situation and prospects within the sector and the company. Thanks to this active communication policy we have steadily extended our investor base over the last few years. The Annual General Meeting is also an important forum for us to maintain contact with our shareholders. However, we involve the public in this as well. The Board of Directors' speech to the AGM and the general debate are broadcast as a live stream on our website. Up-to-date investor relations news, press releases and annual and quarterly reports can also always be found on the GRENKELEASING homepage.

We also aspire to be among the leading companies in terms of the quality and timeliness of the information we provide. We publish the latest figures on new business and contribution margins for the past quarter on the second working day of the subsequent quarter. The audited consolidated financial statements for the fiscal year are published at the start of February of the following year. Our website www.grenke.de also offers a user-friendly interactive financial report. And, in keeping with the spirit of high transparency, our reporting goes well beyond the required minimum.

Coverage

In the 2009 fiscal year, twelve (previous year: eleven) renowned banks and analysts covered and rated GRENKELEASING. The following institutes regularly publish reports on our shares. The most recent ratings as of January 8, 2010 are as follows:

Berenberg Bank	Buy	HSBC Trinkaus & Burkhardt	Overweight
BHF-Bank	Buy	LBBW	Buy
Cheuvreux	Outperform	Merrill Lynch	Neutral
Commerzbank	Buy	Sal. Oppenheim	Buy
equinet	Accumulate	Silvia Quandt	Neutral
Deutsche Bank	Sell	WestLB	Neutral

The agency Standard & Poor's issued a rating for GRENKELEASING AG in an analysis dated December 7, 2009. With a stable outlook and noting our strong risk management in particular, its assessment was as follows:

Counterparty Credit Rating	BBB+ / Stable / A-2
Senior unsecured	BBB
Short-term debt	A-3

Our shares at a glance

Code	GLJ
Code Bloomberg	GLJ_GR
Code Reuters	GKLG.DE
ISIN	DE0005865901
Market segment	Prime Standard
Index	SDAX
Designated Sponsors	HSBC Trinkaus & Burkhardt
	WestLB
No. of outstanding shares	13,684,099
Class	No-par value shares
Nominal value per share (rounded)	1.28 EUR

Shareholder structure according to Sec. 1.7 of the current Deutsche Börse stock indices guidelines

Free float	61.80%
Mr. and Mrs. Grenke	38.20%

	2009	2008	2007	2006	2005
Closing price XETRA	29.50 EUR	17.82 EUR	22.90 EUR	36.06 EUR	48.30 EUR
(last trading day)
Highest intraday price	30.22 EUR	28.20 EUR	42.00 EUR	64.45 EUR	49.32 EUR
Highest intraday price	17.82 EUR	17.40 EUR	19.60 EUR	32.30 EUR	29.70 EUR
Market capitalisation	EUR 404m	EUR 243m	EUR 313m	EUR 492m	EUR657m
(based on closing price)
Earnings per share	1.80 EUR	2.42 EUR	2.35 EUR	2.23 EUR	2.13 EUR
Price earnings ratio	16.4	7.4	9.8	16.2	22.7
(based on closing price)

GROUP MANAGEMENT REPORT FOR FISCAL YEAR 2009	21
General	21
Business Profile	21
Business Model	21
Presence across Europe	22
The Group's Growth Strategy	22
Development and Structure of Services	23
Corporate Management	23
Fiscal Year 2009	25
Economic Conditions and Industry Performance	25
Significant Developments in the Fiscal Year	26
Report on the Results of Operations	28
Report on the Financial Position and Net Assets	31
Overall Statement on the Financial Situation of the Group	32
Additional Information	33
Sales and Customer Structure	33
Structure of the Supplier Base	33
Research and Development	34
Personnel	34
Changes in the Executive Bodies	34
Remuneration Report	34
Shares Held and Share Transactions by the Executive Bodies	36
Disclosures Pursuant to Sec. 315 (4) HGB	36
Corporate Governance	38
Risk Management Report	38
Significant Events after the End of the Fiscal Year 2009	49
Report on Forecasts and the Outlook for the Group	50
CONSOLIDATED FINANCIAL STATEMENTS FOR FISCAL YEAR 2009	53
Consolidated Income Statement for Fiscal Year 2009	53
Consolidated Statement of Comprehensive Income for Fiscal Year 2009	54
Consolidated Balance Sheet as per December 31, 2009	55
Consolidated Cash Flow Statement for Fiscal Year 2009	57
Statements of Changes in Consolidated Equity	59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR FISCAL YEAR 2009	60
AUDIT OPINION	128
DECLARATION IN ACCORDANCE WITH SEC. 297 (2) SENTENCE 4 AND SEC. 315 (1) SENTENCE 6 HGB	129
CALENDAR 2010 AND CONTACT	130

GROUP MANAGEMENT REPORT FOR FISCAL YEAR 2009

GENERAL

The GRENKELEASING AG Group submits the following management report on the 2009 fiscal year ended December 31. The Group was formed as a sole proprietorship in 1978. GRENKELEASING AG was founded in 1997 and has been listed on the Frankfurt Stock Exchange since 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 internationally 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 new regional markets and to expand with new financing products.

We do not hold interests 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 partners with its expertise, operational infrastructure, a number of services and the right to use its name. GRENKELEASING AG usually refinances finance agreements by purchasing the franchisees' receivables or through sale and leaseback agreements, which means that the GRENKELEASING AG Group generates a portion of its new business by refinancing franchisees' new business.

This 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.

BUSINESS PROFILE

Business Model

GRENKELEASING was born out of the business idea of standardising lease financing using IT-based processes, making it economically viable to offer them even for small-ticket IT products. 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 with a net value upwards of EUR 500. In fiscal 2009, the mean value of the leases concluded in the GRENKE Group, including franchise partners, was EUR 7,277 after EUR 7,775 in the previous year. We thereby continued to uphold the already high diversification of our lease portfolio.

To make it economical to finance such low volumes, these agreements must be processed at very low costs per contract. Accordingly, GRENKELEASING's business model is geared towards maximising its efficiency. Standardisation, speed and comprehensive, IT-based automation are significant USPs and define key entry barriers in our market.

In particular, our lease financing is sold through independent specialist reseller partners who offer their customers – small and medium-sized enterprises – various financing options at the point of sale. A key factor in choosing GRENKELEASING is a fair price, which we achieve through our cost-efficient business processes and our broad-based refinancing. We also help our specialist reseller partners to conclude their transactions quickly by making prompt contract and payment commitments, which we can usually deliver within ten minutes. 70 percent – and as many as 83 percent in Germany – of all the GRENKE Group's financing requests, including

those received by franchise partners, are made using our online tool. All of the Group's lease contracts are managed and automatically processed centrally at our head office in Baden-Baden, Germany.

We measure and calculate risks and rates of default on finance using our internally developed IT-based scoring procedure, which is constantly optimised on an ongoing basis. The broad diversification of our receivables portfolio is not just due to the low volume of the individual agreements; focus on IT products for commercial use in offices leads to a broad distribution across different lines of business.

Risk limitation through diversification is also our philosophy for other aspects of our business model: We also take care that no cluster risks arise among our lessees and sales partners, our positioning for IT products is vendor-neutral and, not least, our refinancing range that has always been wide has now been diversified further in 2009 as a result of the acquisition of GRENKE BANK AG (formerly: Hesse Newman & Co. AG).

We bring our business model to the market in two ways: Firstly, we are growing in a number of European countries with our own subsidiaries and branch offices. Secondly, we are also expanding into new countries with our franchise model. As with our franchise partners, the purpose of sales employees at our subsidiaries and branch offices is to provide comprehensive support to our specialist reseller partners in all matters relating to leasing, thereby ensuring their business success. Thus, we have a unique offering in the smallticket area that clearly sets us apart from our competitors.

Our franchise model allows us to recruit specialist personnel who show the entrepreneurial spirit required to establish a new local company. The franchisees use the brand names "GRENKE" or "GRENKELEASING", thereby establishing themselves on the market. At the same time, our examination of the finance agreements as part of their refinancing ensures that we are thoroughly familiar with the receivables portfolio of the franchisee at all times. Incentives for the best possible receivables quality are established using defined parameters for determining a purchase price for the franchise company.

We have developed and established this business model in the market for small-ticket IT leasing. In future, we also intend to focus more strongly on offering additional finance products beyond our regional expansion. IT-based standardisation and broad diversification to limit risks will remain the cornerstones that define our business model.

Presence Across Europe

In Germany, the GRENKELEASING AG Group is represented with branch offices in 20 cities. In addition to our existing subsidiaries with nine branch offices in France, three branches each in Italy and Switzerland plus two each in Austria and Poland, we are represented by subsidiaries in Belgium, Denmark, the UK, Ireland, the Netherlands, Sweden, Spain (Barcelona) and the Czech Republic. GRENKELEASING is further represented by its franchise system in Finland, Norway, Portugal, Romania, Slovakia, Spain (Madrid) and Hungary. We also offer car leasing in Germany.

The Group's Growth Strategy

GRENKELEASING is a growth company. Individual years in which we deviate from our growth path owing to market forces do not change this. Following the global financial market crisis and the recession it triggered in most of the world's economies, we deliberately but temporarily scaled back our new business, particularly at the start of the 2009 fiscal year. However, as early as the second half of 2009 we began steering back to growth – while maintaining strong contribution margins and strict risk limitation.

In the past few years we have focused on systematically expanding our presence in small-ticket IT leasing in Europe. We have now established a significant market presence here – in 2009 we generated 53.7 percent of new business in the GRENKELEASING AG Group outside Germany. Thus, the foundation has been laid for further substantial and profitable growth in the coming years by continuing to solidify our European network.

Furthermore, we are also examining expansion opportunities on an ongoing basis in the financing of other products outside the classic IT sector. The main criteria are that these products allow us to maintain our focus on commercial clients, small average finance volumes and the high diversification of our portfolio across customers and lines of business. We also make no concessions in terms of our strategic targets for equity resources, risk management and profitability. The new products that we have built up in the last few years include in particular the purchasing of small amount receivables (factoring) and car leasing. Both activities were first initiated through a franchise partner. We acquired the factoring company and incorporated it in the Group in the autumn of 2009.

In the coming years, in addition to the further geographic expansion, our growth will also focus on tapping the additional potential that opened up when we acquired a banking licence through GRENKE BANK AG (hereinafter referred to as "GRENKE BANK"). This has generated considerable further scope not just for new finance products but also for additional forms of finance alongside our traditional leasing business. We are especially striving to develop products for our existing base of small and medium-sized enterprises to make the best possible use of our low-cost and efficient access to these customers in the GRENKE Group including its franchise partners. In particular, we are using indirect and online sales forms to attract new customers.

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, telecommunications products and software. We have developed a wide range of financing contracts for this purpose. The structure of the product portfolio has not changed significantly in the reporting year. It is determined by the type and extent of products used in office environments by small and medium-sized companies in Germany and Europe. Today, information technology is used in all offices in every industry. Accordingly, our focus prevents the creation of risk clustering in individual lines of business or regions. Under our franchise model we have also been active in small-ticket factoring and car leasing since 2005. As mentioned above, in autumn 2009 we took over the factoring company of our former franchise partner and will continue to develop it as part of the Group in future.

We extended the range of finance products offered by the GRENKELEASING AG Group in spring 2009 with the acquisition of GRENKE BANK. In addition to its credit portfolio, which we are continuing under the pre-existing agreements, we are also now offering different investment opportunities. We first established demand and term deposit offerings with which we initially addressed private customers to great success. We now also have various offerings for commercial clients such as payment accounts in euro and foreign currency and simple investment products such as term deposits and savings certificates that have been met with great interest by our customers.

Corporate Management

Key Target Values of Equity Ratio and Return on Equity

Our corporate management focuses on achieving a sustainably high rate of return on equity while at the same time maintaining a solid equity base. The target values for both the equity ratio and the post-tax return on equity are 16 percent. We believe that both of these figures are important for ensuring a good rating for our company. They also represent the cornerstones of an attractive valuation for our stock.

The equity ratio was 17.5 percent in fiscal year 2009, still above our medium-term target of 16 percent. While the ratio benefited from our downscaling of new business, our refinancing on the capital markets in particular was not affected by the financial market crisis. In addition to existing and additional extensive revolving refinancing programmes, we were again highly successful on the bond market in 2009 and raised considerable further bank deposits through GRENKE BANK.

Furthermore, we attach particular importance to the stability of profitability. While we are currently in a weak overall economic phase leading to a rise in losses, we are cushioning the strain on our earnings situation in two ways: Firstly, through the sophisticated management of the risk profile in our new business with our scoring models in the past. This is muting the current rise in losses in the financing portfolio. Secondly, by increasing the contribution margins in new business. Thus, we are increasing our future operating income from the new business contracted in this year.

In phases of rapidly rising losses, as in the reporting year, temporary reductions in profitability cannot be ruled out. Thus, we suffered a decline in the net return on equity to 9.4 percent in 2009 – or to 10.2 after adjustment for our slight overcapitalisation, i.e. based on an equity ratio of 16 percent.

In absolute terms, however, this high return during an historically extraordinary recession in Europe documents that the two control measures taken together are effectively limiting the volatility of income development. Also, in the medium term – as soon as the economy as a whole comes out of the recession – our control measures will lead to a significant increase in earnings power as losses will then diminish while we continue to benefit from higher contribution margins.

Broad Range of Instruments for Optimising the Refinancing of the Group

We have established a broad range of refinancing options. Thus, we can ensure the sufficient refinancing of the Group at all times and can also take advantage of different developments on the respective sub-markets for specific instruments to strengthen our competitive capability.

The Group has traditionally felt it a duty to maintain full transparency, particularly when it comes to financing. Primarily in the interest of a comprehensible, competitive rating, we have structured every newly acquired refinancing instrument in such a way that it must be accounted for in full from the very start. Off-balance sheet structures have deliberately been avoided. We will continue this policy to ensure complete transparency of the Group's obligations at all times in the future.

We issue asset-backed commercial paper (ABCP) programmes managed by DZ Bank AG, LBBW, SEB AG and WestLB through special purpose entities. We have also issued promissory note loans, debentures and bonds under a debt issuance programme (DIP). The DIP is supported by Deutsche Bank, HSBC and WestLB. A new financing instrument was used for the first time in 2006 when we placed an ABS bond. Our standing as an issuer is supported by Standard & Poor's ratings, unchanged since May 2003, of BBB+ (long-term) and A-2 (short-term).

Since the acquisition of GRENKE BANK, we have also conducted a substantial portion of refinancing through bank deposits that we receive via our online platform www.grenkebank.de. Together with the high equity base of the GRENKELEASING AG Group, we therefore still have sufficient scope to finance our growth.

Day-to-day business is geared towards ensuring that the Group is solvent at all times. To do this, GRENKELEASING AG maintains enough funds to refinance its own lease receivables as well as those of its subsidiaries at all times. The AG manages the Group's cash for the Group companies in a cash pool. We also take efforts to secure local or local-currency finance for some elements of our international expansion. Framework agreements are currently in place in Poland and Switzerland in particular.

FISCAL YEAR 2009

Economic Conditions and Industry Performance

Economy as a Whole

The existential crisis suffered by the financial sector in the closing quarter of 2008 triggered a severe reaction in many areas of the economy as a result of the illiquidity it engendered: Companies made it their utmost priority to safeguard their own liquidity. The consequence of this was a massive negative inventory cycle as orders were abruptly cancelled, investments stopped and payment terms exhausted to the extreme. In line with this, the upstream production sectors and the capital goods industry, not to mention world trade, suffered the severest crashes, while consumers were called on to prop up the economy almost everywhere. At the end of 2008/start of 2009, and especially in the first quarter of 2009, the world slid into the deepest recession since the Second World War, with the traditional export nations initially being hit particularly hard.

As the rescue and stabilisation measures by governments and central banks began to take effect, the financial system initially recovered, leading to an improved liquidity situation on the finance markets. At the same time, the massive efforts to kick-start the economy began to take effect from early summer 2009, as impressively demonstrated by the stimulus measures for the automotive industry ("scrapping bonuses" in many countries). Last but not least, a reversal of the inventory cycle was ushered in, the pipelines of the entire economy's value chains started to fill up and diminished inventories were built up again.

The industrialised and emerging nations, including Germany, have been back on track for growth since the second quarter of 2009, though the momentum and resilience of this growth are still very weak. The latter was shown – after the effects of the inventory situation that had remained positive throughout the summer of 2009 wore off – by the significant slowdown in industrial activity from the end of the third quarter, which also continued in the fourth. According to the first preliminary estimates by the Federal Office of Statistics from January 13, 2010, the German economy shrank overall in terms of gross domestic product (GDP) for the first time in six years in 2009. At minus 5.0 percent, it saw the biggest real drop in GDP in post-war history. The economic slump, the Office found, mainly occurred in the winter of 2008/2009. This is one of the biggest hits taken by an OECD nation. The OECD nations collectively saw a decline of only 3.5 percent, with euro zone OECD countries declining by 4.0 percent.

Industry Performance

European movable asset leasing experienced a considerable overall decrease in 2009. The industry was hit even harder than most by the severe economic recession in Europe as it operates in many of the highly cyclical lines of business. In November 2009, the German Leasing Association reported an anticipated 22.7 percent decline in volume to EUR 39.3 billion in Germany, while equipment investments in the economy as a whole will decline by 19.0 percent according to current ifo estimates.

However, there is very little meaningful industry data on the development of the segment of the leasing market relevant to us. One of the reasons for this is the extreme fragmentation of the market – in Germany alone, there are over 2,000 providers – and the fact that individual sub-markets showed distinctly different industry trends. Internationally, there are usually even 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.

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 that focus more on other areas of leasing or finance join or – as was increasingly seen during the crisis in 2009 – leave the market rather than if the volume of small-ticket IT leasing itself fluctuates.

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

The financial market crisis and the economic recession could create additional opportunities for small-ticket IT leasing as companies are using leasing to a significantly increasing degree. This is because refinancing by banks is becoming increasingly difficult or expensive, or because they are hoping to shield themselves against risks 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 infrastructures and therefore require smaller leasing volumes.

The development of the German factoring sector was also greatly affected by the recession in 2009. While the figures currently available show a significant increase in the number of customers in 2009 – the factoring companies that make up the German Factoring Association reported a rise of over 47 percent in the number of their customers to 8,700 in the first half of 2009 – the new business is not enough to compensate for the sales losses in existing business. As a result, the sales of the leading 26 factoring companies represented in the German Factoring Association fell by a nominal 14.8 percent to EUR 43.26 billion in the first half of 2009. This visibly reflects the sales declines experienced by factoring customers on account of the recession. In our factoring business in the 2009 fiscal year, we deliberately avoided new business in favour of quality and profitability, thereby recording a drop in new business of 25.0 percent to EUR 43.6 million.

In the 2009 fiscal year up until October, the last month for which figures were available from Deutsche Bundesbank prior to the deadline for this financial report, deposits of German and international non-banks at banks in Germany were down slightly by 0.8 percent to EUR 3.044 trillion. Thus, deposits declined for the first time this decade; in 2008 they had risen by 6.4 percent. While overnight deposits, not least as a result of the strong expansion of measures to safeguard liquidity throughout the commercial economy, increased by 21 percent (previous year: 6 percent) to EUR 1.118 trillion in 2009, time deposits fell by a total of 16 percent (previous year: 8.5 percent) to EUR 1.213 trillion. The combined total of savings deposits and certificates rose by 2.3 percent (previous year: +/-0 percent) to EUR 712.9 billion. Having taken deposits of EUR 58.4 million since acquiring GRENKE BANK, we have successfully established ourselves as a new provider on this market

Significant Developments in the Fiscal Year

Limiting Risks and Widening Margins in New Business

The fiscal year 2009 was dominated by limiting risks and widening margins in new business. In the light of the hefty recession in Europe, we concentrated most restrictively on business with low risks and above-average margins. At the same time we limited refinancing risks in the light of the persistent uncertainty on the capital markets and ensured the timely repayment of bonds including high-volume maturities of EUR 125 million in the second half of April 2009. In line with this deliberate tactic, the Group's new business declined significantly in the first half of 2009, while its contribution margin 2 rose strongly at the same time.

From summer 2009, signs that developments were bottoming out began to become visible in most sectors and countries, albeit at a very low level. Parallel to this, the situation on the capital markets around the world relaxed considerably thanks in part to the central banks' policy of cheap money. The confidence of capital market participants in the further efforts of governments and central banks to support the finance markets and the real economy had stabilised. We systematically utilised this phase to broaden our refinancing base substantially in summer 2009 (see also the comments in the next section).

At the same time, we began gradually steering the Group back towards growth without weakening our clear focus on risk limitation. To do this we adjusted the contribution margin 2 requirements for our subsidiaries and branches so that they could channel the continuing high demand for lease financing in the 2009 fiscal year into more business in line with their respective market conditions. Simultaneously, we intensified our sales efforts in the management of our specialist reseller partners.

Leasing requests in the GRENKELEASING AG Group rose to a total of 139,458 in the 2009 fiscal year after 137,322 in the previous year. Internationally in particular, we received significantly more requests than in the previous year (81,507 after 73,774). The GRENKE Group including franchise partners recorded 152,382 requests after 145,384 in the previous year, 93,996 of which from abroad (previous year: 81,256). Thus, in a market phase in which banks and marginal participants in small-ticket IT leasing took on a much more restrictive positioning or withdrew from the market altogether, we benefited strongly from the significant expansion of our presence in recent years. As part of the process of steering our business back towards growth over the course of the year, we raised our conversion rate (conversion of requests into contracts) within the Group from 39.6 percent in the first quarter to 44.3 percent in the fourth and in the GRENKE Group including franchise partners from 39.2 percent to 43.4 percent. .

In total, we concluded 57,719 new agreements in the GRENKELEASING AG Group in the 2009 fiscal year after 66,757 in the previous year, 31,647 of which abroad (previous year: 34,671). In the GRENKE Group including franchise partners 62,321 new contracts were concluded after 69,824 in the previous year, 35,917 of which abroad after 37,162 in the previous year. The volume of new business in the leasing division in the GRENKELEASING AG Group amounted to EUR 409.7 million after EUR 507.6 million in the previous year and in the GRENKE Group leasing division including franchise partners to EUR 453.5 million after EUR 542.9 million. The change in direction since the summer of 2009 was effected particularly quickly on our international markets of the UK, Italy and France, where new business volumes rose with strong double-digit growth rates in the second half of 2009 compared to the first six months of the reporting year.

Parallel to this volume management, we clearly concentrated on risk limitation in 2009 while at the same time expanding our contribution margin 2. We raised our requirements of the quality of receivables in new business and instructed our sales departments to aim for a higher contribution margin 2. This will lead to a strong development in operating income in future and thereby is already partly countering the negative effects on the earnings situation caused by the increase in losses due to the recession. As the recession draws to a close, the loss rate will also be scaled back, with the result that the greater contribution margin 2 can then deliver its full positive effect on the Group's profitability.

In line with our initially highly restrictive rein on business in the reporting year and the stronger shift towards growth over the course of the year, we gradually reduced the contribution margin 2 of new business in the GRENKELEASING AG Group over the fiscal year from 22.1 percent in the first quarter of 2009 to 17.7 percent in the fourth. In the reporting year overall we therefore achieved a significant increase to 18.9 percent after 15.8 percent in the previous year and even the reduced margin for the fourth quarter was well above that for the 2008 fiscal year. This also applies to countries in which our return to a growth strategy was particularly marked in the second half of 2009. In the UK in the 2009 fiscal year we increased the contribution margin 2 of new business to 20.1 percent after 16.7 percent in the previous year, in Italy to 15.9 percent after 15.2 percent and in our largest international market, France, to 20.8 percent after 16.8 percent.

Broadening of Refinancing Base and Acquisition of the Hesse Newman bank

Even in a year plagued by uncertainty on the financial markets, our broad range of refinancing instruments and good standing on the capital markets again fully proved themselves in the 2009 fiscal year. In addition to the asset-backed commercial paper (ABCP) programmes worth EUR 512.2 million in place at the start of the year, other revolving loan facilities of EUR 120 million were also extended. In addition, promissory notes with a total volume of EUR 58.5 million were extended in the opening months of 2009.

Various other transactions were successfully concluded in the months that followed, leading to an inflow of EUR 51.5 million from two further promissory notes, additional lines of refinancing of EUR 150 million under a further ABCP programme and EUR 15 million under other loan facilities. Furthermore, we placed a smaller bond and a smaller debenture with a combined total of EUR 22.05 million. The highlight of our issuing activities was the successful placement of a three-year fixed-income bond of EUR 100 million that was more than twice oversubscribed in August 2009.

Parallel to this additional refinancing, total bonds of EUR 146.2 million and debentures of EUR 7 million were repaid over the course of 2009, primarily from the Group's current cash flow. The maturities structure of refinancing instruments over the next three years was optimised in line with the duration of our receivables portfolio of 17 months as of the end of December 2009.

Additionally, we moved in a new era in the development of our company with GRENKE BANK. Owing to the special situation of the bank, the GRENKELEASING AG Group received cash of EUR 32.0 million on its acquisition even after deduction of the purchase price. Over the course of the fiscal year, we were highly successfully in establishing ourselves on the market for bank deposits and collected deposits of EUR 106.4 million by the end of the year. Alongside marketing within our existing customer base, we have arranged sales activities highly efficiently, particularly with regard to deposit conditions, which leads GRENKE BANK to be ranked correspondingly highly in the relevant Internet portals.

Thanks to bank deposits we have achieved more than just adding a further instrument to our refinancing range. For the first time we now have access to a form of financing that is independent of both banks and the capital market, which in turn makes us less dependent on the cycles of these markets. Furthermore, we accept deposits from both private and commercial customers, thereby significantly expanding our existing customer base beyond the small and medium-sized enterprises on the liabilities side of our balance sheet. And for this instrument, too, the structuring of our offering centres on refinancing our financing receivables with matching maturities.

GRENKELEASING Ratings Confirmed

On December 7, 2009, the Standard and Poor's rating agency again confirmed its counterparty ratings for GRENKELEASING. Since May 2003, the long-term rating has remained at BBB+ with stable outlook and the short-term rating has held steady at A-2. Standard & Poor's still attests to our excellent market position, the broad diversification of our receivables portfolio, solid capitalisation and strong risk management for ensuring our profitability. The renewed rating confirmation affirms our unchanged, strong standing on the capital markets.

Acquisition of Franchise Partner in Factoring Business

We intend to develop GRENKELEASING into a comprehensive financing partner for small and medium-sized enterprises in Europe. As part of this strategy we had offered our customers in Germany small-ticket factoring finance through a franchise partner since 2005. In the third quarter of 2009, GRENKELEASING AG acquired the company of its franchise partner. GRENKEFACTORING GmbH (hereinafter referred to as "GRENKEFACTORING") thus became a Group company.

Factoring is steadily developing into the third pillar of debt financing by companies in addition to bank loans and leasing. The general trend toward the use of factoring will be supported by the financial market crisis as the banks will once again be much more restrictive in their lending.

Report on the Results of Operations

The success of our management geared towards profitability and increasing the contribution margin 2 in the 2009 fiscal year can be seen by the 3.5 percent increase as against the previous year in interest and similar income from financing business to EUR 114.6 million. This increase is highly satisfactory in spite of the decline in new business and the simultaneous gearing of new business towards better risks.

In line with this, expenses from interest on refinancing and deposit business remained virtually constant. This was due to lower refinancing requirements on account of the decline in the receivables portfolio and favourable refinancing from bank deposits on the one hand and the widening of spreads on the capital markets on the other. Increased interest income therefore almost entirely benefited net interest income.

This thereby cushioned the negative earnings effect of the substantial rise in the settlement of claims and risk provisions of EUR 11.1 million as against the previous year, taking the total to EUR 31.2 million. The historically extraordinary speed with which this recession took hold and the unusual depth of the economic downturn meant that earnings were still reduced substantially on account of the necessary time lag needed for our adjustments to take effect. However, the loss rate in the fiscal year 2009 remained within the peak levels reached during the last recession. Another positive factor was the only limited rise in losses in the fourth quarter of 2009 as against the previous quarter.

The profit from insurance business remained stable year-on-year in 2009, profit from new business declined in line with developments in new business. The development in the profit from disposals shows our conservative calculation of the carrying amounts of lease assets in our agreements: Even in times of extraordinary economic difficulty such as we are currently experiencing, we have virtually recovered estimated residual values, despite declining demand and declining prices. A profit of EUR 2.3 million was generated in the previous year. In total, operating income therefore amounted to EUR 83.6 million in the reporting year after EUR 94.7 million in the prior-year period.

Effective February 12 of the reporting year, GRENKELEASING AG acquired all shares in GRENKE BANK and, on August 19, all shares in GRENKEFACTORING, which had previously operated as a franchise partner. The two companies did not make significant contributions to operating income as a whole or to the individual earnings items in the fiscal year. However, the first-time consolidation of the two companies led to significant increases in the GRENKELEASING AG Group's operating expenses in the reporting year. At GRENKE BANK in particular, however, the earnings situation already improved substantially over the course of the year following the acquisition.

Furthermore, the Group's selling and administration expenses especially were considerably higher than in the previous year. This resulted – alongside the effects of first-time consolidation – from the development of new products that we wish to place on the market through GRENKE BANK and the difficult overall economic situation. The selling expenses per contract naturally rise in a recession. In addition, the average value per lease fell from EUR 7,775 in the previous year to EUR 7,277 in the reporting year. This means that a greater number of leases must be concluded and processed to reach a specific contract volume, leading to a rise in selling and administration expenses.

In total, the 2009 fiscal year saw a reduction in earnings before taxes to EUR 33.6 million after EUR 44.7 million in the previous year. The net profit for the period was down to EUR 24.6 million after EUR 33.1 million. Earnings per share amounted to EUR 1.80 after EUR 2.42 in the 2008 fiscal year.

Report on the Development of the Segments

Since the acquisition of the bank, the Group manages its reportable segments of Leasing Business, Banking Business and Factoring Business on the basis of the available financial information. The Leasing Business segment accounts for all activities performed by GRENKELEASING AG and its subsidiaries until the acquisition of GRENKE BANK and GRENKEFACTORING. In managing Leasing Business, the Group essentially focuses on the individual regions and countries. Thus, the Leasing Business segment is a combination of several operating segments defined by countries or groups of countries and the reportable Leasing Business segment.

The Banking Business segment comprises the activities of GRENKE BANK, which have mainly focused on the Internet site and the associated sales activities since its acquisition by GRENKELEASING AG. The bank's business focuses mainly on German customers. The Factoring segment includes the activities of GRENKEFACTORING, which performs traditional factoring services in Germany and is a financial services provider.

In addition to new business volume and contribution margin 2 for the Leasing segment, the main performance figures for segment development are operating segment income in total, segment results before other net financial income and personnel expenses. Personnel expenses in leasing business in Italy and the "Others" region rose as a result of growth in the 2009 fiscal year. Expenses were essentially constant year-on-year in other countries. This is partly due to the fact that we retain our well trained and established employees in the Group even in a year of temporary weakness in order to be prepared for future growth. Also, variable remuneration is based on strategic targets, such as the number of lease applications that we have defined in our balanced scorecard. Precisely in times of economic difficulty, it is crucial to the long-term development of the Group to ensure a strong presence and high visibility on the market.

The information in the above section on the development of individual items within the Group naturally relates to the segments in the same way – and this is especially true in leasing business, which accounts for the largest share of our business. The following information therefore focuses on particular factors relevant to developments in individual segments. The main losses in operating segment income were recorded in our two largest segments, Germany and France, as the negative developments in the 2009 fiscal year, as described above, particularly affected these areas. As ongoing operating expenses only fluctuate in line with business developments to a limited extent, the declines were also significantly reflected in segment results.

While new business in Germany remained restrained over the course of the fiscal year as a whole and the contribution margin 2 rose considerably to 18.4 percent after 14.8 percent in the previous year, we successfully steered back towards growth in France in the second half of 2009, recording substantial increases in the fourth quarter in particular. In line with our focus on increasing profitability while at the same time reducing risks in new business, we strongly increased the contribution margin 2 to 20.8 percent in the reporting year after 16.8 percent in the previous year.

While we also recorded declining segment income in the Switzerland region, where we are the clear market leader in small-ticket IT leasing as in Germany, we significantly expanded the segment margin on account of the absence of certain expenses compared to the previous year. New business again grew substantially in the fourth quarter of 2009 and the contribution margin increased from its already high level of 21.4 percent in the previous year to 21.9 percent in the 2009 fiscal year.

Developments in the Italy region, which has enjoyed very strong growth in recent years, were extremely encouraging in the reporting year as well. Operating segment income rose considerably, segment results more than doubled, new business increased substantially again in the fourth quarter in particular and the contribution margin 2 expanded from 15.2 percent in the previous year to 15.9 percent overall in the reporting year.Performance in the countries that comprise the "Others" region was also highly successful. Our subsidiaries are achieving the size and maturity that enable profitable business operations in more and more countries. With significant increases in operating segment income and no need to substantially increase personnel expenses, segment results multiplied from EUR 0.2 million in the previous year to EUR 3.6 million in the reporting year.

Of the countries in this group, we are now reporting new business development in the UK, the Netherlands, Poland and Spain separately as their volume has now reached a level in excess of EUR 10 million per year. The figures for Spain include the development of our own subsidiary and that of our franchisee. The refocus on growth over the course of 2009 took effect very quickly in the UK and Spain in particular. At the same time, we expanded the contribution margin 2 in all four countries in the 2009 fiscal year. Of particular note here is the development in the UK, where the margin climbed from 16.7 percent in the previous year to 20.1 percent in the reporting year.

The Banking Business segment currently still has very low operating segment income that is slightly less than personnel expenses alone. Including all the other expenses attributable to this segment, the segment result for the reporting year 2009 was EUR -1.6 million. Thanks to the additional possibility of refinancing the GRENKELEASING AG Group with bank deposits, the banking business made highly substantial contributions towards the ongoing strategic development of the Group in 2009 that far outweigh its negative contributions to earnings. Nonetheless, we of course adjusted the bank's cost structures over the year in line with its future place within our Group activities and are aiming to make it profitable in future. In the short term, however, we are still investing in the development of new bank products, which will impair earnings development.

Factoring business is currently still immaterial from a Group perspective. At present, we are essentially steering business in line with risk and expense limitation aspects. Accordingly, new business saw a drop in the factoring volume of 24.9 percent to EUR 43.6 million. The margin on the factoring volume was 1.95 percent after 2.0 percent in the previous year. This margin relates to the average period for a factoring transaction of around 32 days (previous year: 34 days). The segment result for the 2009 fiscal year was EUR -0.4 million.

Report on the Financial Position and Net Assets

The first-time consolidation of GRENKE BANK and GRENKEFACTORING had only a limited effect on the structure of the assets of the GRENKELEASING AG Group. Goodwill still accounted for only a very slight volume at EUR 11.2 million as of December 31, 2009 after EUR 8.2 million in the previous year. In line with the nature of our business, most of our total assets relate to lease receivables. After an initially much more significant decline in receivables over the course of 2009 – as part of our more restrictive management of new business – the receivables volume was virtually unchanged as of the end of 2009 at EUR 1,134.8 million after EUR 1,143.2 million in the previous year.

On the acquisition of GRENKE BANK, bank deposits became available to the Group as a source of refinancing. As a result, the Group reported deposits for the first time of EUR 106.4 million as of the reporting date. This, together with the successful use of the broad range of other refinancing tools available to the Group, means that our cash situation is still extremely comfortable. As of December 31, 2009, the GRENKELEASING AG Group had cash on hand and balances with banks of EUR 109.9 million after EUR 77.0 million in the previous year. The equity ratio climbed to 17.5 percent as against 16.9 percent in the previous year. It was therefore still visibly in excess of our target figure of 16 percent, which represents an excellent validation for the Group in the current time of economic difficulty.

The Group employs a range of instruments for its refinancing and staggers their maturity dates across several periods. This enables GRENKELEASING to react flexibly to changes on the refinancing markets. The table below shows the expected cash outflows resulting from contractual obligations as of December 31, 2009.

		Payments falling due (in EUR k)
		Within	In 3 months	In 1–5	In more than
	In total	3 months	to 1 year	years	5 years
Financial liabilities	1,212,544	284,765	284,055	641,558	2,166
Leases and tenancies	13,826	1,674	3,349	7,719	1,084
Purchase commitments*	76,155	76,155
Commitments from pending transactions**	4,832	4,832
Contractual agreements in total	1,307,357	367,426	287,404	649,277	3,250

* Legally binding commitments to accept goods and services and trade payables

** This depicts the present value of all future cash flows. The Group considers this to be the appropriate representation of the cash flows that would become payable if it were necessary to close these items. Derivatives balances are assigned to the "on demand" category, as this depicts the earliest possible cash out. The actual durations of the contracts can extend over much longer periods.

See point 5.4 in the Notes

Besides the usual purchase commitments from ordinary activities, interest and capital repayments for financial liabilities fall due in particular within the next fiscal year. A substantial portion of the EUR 284 million in financial liabilities that fall due in 2010 is accounted for by ABS and ABCP programmes, which fundamentally consist of individual tranches of short duration.

These are generally pledged for a period of 12 months and can be utilised on a revolving basis. Amounts released through the repayment of lease receivables can therefore be utilised repeatedly. Although the programme with WestLB that is included in this volume expires on May 3, 2010, we were able, after the end of the fiscal year, to place an ABS bond with WestLB and KfW. The tranche allocated to WestLB largely replaces the programme's previous volume with the Company.

The largest single item among the other financial liabilities falling due in 2010 is a bond in the value of EUR 100 million, which matures in March 2010, and three low-volume promissory notes, which mature in December 2010. The repayment will be effected using the operating cash flow from the available refinancing facilities and through the utilisation of additional refinancing, should attractive opportunities present themselves.

The GRENKELEASING AG Group manages the utilisation of refinancing funds closely in line with the development of new business and the cash flow from the receivables portfolio. With regard to the high level of cash as described above, the cash inflow of refinancing funds was limited as of the end of the 2009 fiscal year. Accordingly, net cash flow from operating activities declined from EUR 42.7 million to EUR 16.0 million in the reporting year:

Cash flow from investing activities amounted to EUR 31.1 million in net terms, primarily due to the cash inflow from the acquisition of GRENKE BANK and, to a lesser extent, GRENKEFACTORING, and low payments for the acquisition of operating and office equipment. In the previous year, there had been an overall outflow of EUR 9.7 million, particularly as a result of the acquisition of the two former franchise companies in the UK and Poland in the first quarter of 2008.

Cash flow from financing activities in the amount of EUR -11.6 million after EUR -8.6 million in the previous year results primarily from dividend distributions and a reduction in bank liabilities of EUR 3.4 million in the reporting period. Total cash flow increased to EUR 35.6 million in the 2009 fiscal year (previous year: EUR 24.4 million).

Overall Statement on the Financial Situation of the Group

The GRENKELEASING AG Group was highly successful in mastering the challenges of the 2009 fiscal year, which left deep scars on the German economy. With a net return on equity that, while in decline at 9.4 percent after 13.5 percent in the previous year, was still almost in double digits, the Group impressively distanced itself from the average development on the economy. In addition, GRENKELEASING was not only able to successfully continue its existing business, it also strengthened and advanced its strategic positioning.

Thanks to its acquisition of GRENKE BANK, the Group has obtained access to bank deposits as a source of refinancing, thereby again broadening its range of refinancing options. In addition, the acquisition of a banking licence has allowed the Group to expand its product range in the established leasing business and to offer further forms of finance. The development of additional products has already reached an advanced stage.

The refinancing of this future expansion is secure. As well as the strong inflow of bank deposits in the 2009 fiscal year, the Group was again highly successful on the refinancing markets. The highlight of these activities was the placement of fixed-income bond of EUR 100 million that was oversubscribed several times in August 2009.

Therefore, as of the time of this financial report going to press, the Group is excellently prepared to face successfully the risks still haunting the economy as a whole and the finance markets in the 2010 fiscal year.

ADDITIONAL INFORMATION

Sales and Customer Structure

The GRENKELEASING AG Group concentrates on business with small-ticket IT leasing. Owing to the small size of the individual lease agreements, direct sales to new customers are not an option for us – it is not economically feasible. We therefore practise what are known as "partner 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.

This gives us the option to position a key distinguishing feature among the competition. Intensive personal training and support for all aspects of lease financing provided by our own staff in local sales offices or by our franchisees allows us to build close and lasting connections with specialist reseller partners. Our sales employees and franchisees thereby contribute to the business success of specialist reseller partners. This also ensures that leasing generates the highest possible share of their new business.

Accordingly, we regularly offer specialist reseller partners new service programmes. These cover sales issues and sales support in addition to organisational matters and other topics for increasing process efficiency. This, too, strengthens ties between specialist reseller partners and the GRENKE brand. Our service programme also includes the expansion of our quality management system with the aim of improved customer orientation.

Our online activities represent a significant and growing additional sales channel for our entire range. They can be found on the websites www.grenke.de and www.weblease-europe.com.

We use key account management for manufacturers of IT products. We also rely on the highest process quality and efficiency to strengthen customer loyalty with these sales partners. We additionally manage selected corporate clients under a direct sales model. Each quarter we review our receivables portfolios for possible framework financing with suitable customers. We pay close attention to potential risk clustering in line with our risk philosophy of a broad customer structure: Even among these lessees, no single customer is permitted to owe total liabilities in excess of two percent of the Group's equity.

Structure of the Supplier Base

We offer vendor-independent lease finance for small and medium-sized enterprises. Thus, the structure of German and European SMEs' demand for IT products has a material effect on the structure of our supplier portfolio and individual manufacturers. Without our exercising any active influence, it varies according to the IT products on offer, manufacturers' product policies and customers' usage patterns. As a result, the supplier structure of the GRENKELEASING AG Group also remains broad based. This matches our risk philosophy as well.

Moreover, competition between manufacturers means that the products forming the basis of our leases represent the state of the art. We thereby largely avoid the risk of technology becoming obsolete by making our leases full payout agreements that to a large extent 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. It therefore does not perform research or development. However, the company's core competence is providing efficient leasing logistics through the use of centralised, highly standardised IT processes. To do this we use standard market products optimised using applications individually programmed for our needs. This demands a limited amount of IT development work for online platforms for our franchisees that takes into account the particular requirements of the respective market environments.

Personnel

In the reporting year, the GRENKELEASING AG Group essentially continued its growth with the acquisition of GRENKE BANK and GRENKEFACTORING. Mainly as a result of these transactions, the number of employees (not including the Board of Directors) rose from 482 in the previous year to an average of 507. Changes in other areas of the Group were limited in the light of general market developments.

The fluctuation rate in the 2009 fiscal year was 9.27 percent after 12.04 percent in the previous year. In the reporting year this rate was again largely affected by the higher fluctuation in our international activities now in an advanced stage of development. The rate was correspondingly much lower within Germany. Fluctuation was mainly observed among clerks and part-time employees, and remained at less than one percent at management level and among executives in Germany and abroad. We attach great importance to our employees' professional development and thus offer them extensive training and development opportunities. 19 young people trained with us in the 2009 fiscal year. In addition to traditional career paths in the areas of administration and financing, where we currently have five trainees, we also regularly support new training courses, as we are currently doing in dialog marketing, where we have three trainees.

In addition, six students are currently taking international business management degree programmes that combine work and study at Lörrach University of Cooperative Education. Both GRENKELEASING AG and our subsidiaries in Switzerland and France offer young people opportunities such as these. We have been working with Lörrach since 2004. Since 2007, we have also been working together with the universities of cooperative education in Karlsruhe (business computing), where three GRENKELEASING employees are currently enrolled, and Mannheim (accounting and controlling), where we have two students.

Changes in the Executive Bodies

There were no changes in the Supervisory Board or the Board of Directors in the fiscal year.

Remuneration Report

Remuneration of the Board of Directors

EUR	Grenke	Konprecht	Kostrewa	Kindermann	Dr. Hack	Total 2009	Total 2008
Gross salary	328,965.89	172,505.34	127,612.34	128,202.64	267,181.98	1,024,468.19	1,023,168.86
Performance bonus	156,909.00	77,290.25	57,967.70	57,967.70	132,939.23	483,073.88	472,304.34
Bonus	80,010.00	40,005.00	30,003.75	30,003.75	68,808.60	248,831.10	147,725.00
Phantom stocks	0	0	0	0	300,195.00	300,195.00	0
Pensions	0	0	0	0	21,000.00	21,000.00	21,000.00
Total costs	565,884.89	289,800.59	215,583.79	216,174.09	790,124.81	2,077,568.17	1,664,198.20

Total remuneration for the Board of Directors amounted to EUR 2,078k in the reporting year (2008: EUR 1,664k). Remuneration for members of the Board of Directors includes fixed and variable components. The criteria for the variable remuneration component are defined in advance each year based on the development of EBIT (earnings before interest and taxes) and the development of the key performance indicators of a balanced scorecard (BSC). The attainment of the EBIT 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. 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 with Dr. Hack for the fiscal years 2007 to 2009. It is treated as a cash settlement plan. 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 previous year. The maximum payment arising from this agreement is limited to EUR 600,000 for the period of three years. If the options have any value, the changes in value are taken to profit or loss in the income statement for the relevant fiscal years. Under the programme, Dr. Hack is required to invest the respective net amount paid plus a personal contribution of 25 percent of that amount in GRENKELEASING AG shares.The basic share price for 2009 was EUR 19.2759. In 2009, the unweighted arithmetic mean of the Xetra closing prices was higher than the defined basic share price, which means that the phantom stocks multiplied by the difference in share price had a value of EUR 300,195 as of December 31, 2009.

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. The premium cannot be split individually.

No further benefits have been agreed with any members 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.

		Basic
		remuneration	Audit	Personnel	Variable		Total	Total
Name	Function	2009	Committee	Committee		remuneration Travel expenses	2009*	2008*
EUR
Prof. Dr. Lipp	Chairman	9,000.00	600.00	900.00	5,250.00	398.51	16,148.51	16,246.50
	Member of the
Münch	Supervisory Board	6,000.00	600.00	–	3,300.00	882.64	10,782.64	12,072.59
	Member of the
Dr. Nass	Supervisory Board	6,000.00	–	–	3,000.00	1,112.92	10,112.92	11,482.58
	Member of the
Staudt	Supervisory Board	6,000.00	–	600.00	3,300.00	–	9,900.00	10,313.00
	Member of the
Dr. Sträter	Supervisory Board	6,000.00	–	–	3,000.00	929.70	9,929.70	10,071.60
Witt	Deputy Chairman	6,000.00	900.00	600.00	3,750.00	124.00	11,374.00	12,134.00
Total		39,000.00	2,100.00	2,100.00	21,600.00	3,447.77	68,247.77	72,320.27

Remuneration of the Supervisory Board

* fixed remuneration, variable remuneration and travel expenses

In the fiscal year 2009, the members of the Supervisory Board received a total of EUR 68.2k (previous year: EUR 72.3k) including travel expenses in remuneration for their work. The remuneration for each individual member can be found in the table above.

The members of the Supervisory Board receive fixed remuneration of EUR 6,000 for each full year on the Board, the Chairman receives EUR 9,000, plus EUR 600 for each committee membership and EUR 900 for each committee chaired. The members of the Supervisory Board also 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 chairs of committees is reduced pro rata temporis.

In addition, the directors' and officers' liability insurance of GRENKELEASING AG, which was described in the previous section "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 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, 2009 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. The members of the executive bodies did not perform any directors' dealings in GRENKELEASING AG shares in the 2009 fiscal year.

	Shares as of Dec. 31, 2009		Shares as of Dec. 31, 2009
The Board of Directors		Member 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

Disclosures Pursuant to Sec. 315 (4) HGB

The shares of GRENKELEASING AG 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 issued capital amounts to EUR 17,491,421.86 and is divided into 13,684,099 no-par-value bearer shares with a notional nominal value of EUR 1.28 each. 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, 2009, which represents 35.93 percent of the capital stock. 38.20 percent of the capital stock, which represents 5,227,951 shares, is held by Mr. and Mrs. Grenke.

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. Unless 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 that only relate to their wording. In addition, the Supervisory Board is authorised to adapt the wording of Art. 4 of the articles of incorporation governing the amount and division of the capital stock, according to the utilisation of the approved capital or after the end of the authorisation period.

In accordance with the resolution adopted on May 12, 2009 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 May 11, 2014 by up to a nominal amount of EUR 8,500,000 by issuing new no-par-value bearer shares against cash 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 disapply shareholder subscription rights 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 disapplied.

By way of resolution adopted of 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-value bearer shares or up to EUR 3,834,690 (contingent capital III). The contingent 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 disapplied. No options or convertible bonds have been issued since authorisation was granted.

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 way of resolution of the Annual General Meeting on May 12, 2009, the company was again authorised in accordance with Sec. 71 (1) no. 8 of the German Stock Corporation Act to acquire treasury shares of up to a total of ten percent of the capital stock existing at the time of the resolution. The authorisation can 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 can be redeemed without a resolution of approval by the Annual General Meeting. The authorisation applies until November 11, 2010. 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 deviations.

Good corporate governance, which manifests itself in value-based, transparent company management and control, is an integral part of how GRENKELEASING AG – i.e. the Board of Directors, Supervisory Board and executive employees – does business. GRENKELEASING AG and the GRENKELEASING AG Group agree very strongly with the principles of the German Corporate Governance Code and see their implementation as a key factor helping to build trust among 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 become a considerably more important factor 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.

GRENKELEASING AG therefore traditionally complies in full with the recommendations of the Corporate Governance Code. This was last declared by the Board of Directors and the Supervisory Board of the company on April 27, 2009 in their declaration of compliance with the version of the Code dated June 6, 2008.

The company's current declaration of compliance is reproduced in the "Corporate Governance" chapter of the 2009 Financial Report and on its website (www.grenke.de) in German and in English. The German Corporate Governance Code can also be viewed there.

RISK MANAGEMENT REPORT

General

The risk management system at the GRENKELEASING AG Group 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 Group's risk management is a coordinated process at all relevant levels of its organisation and is closely coordinated with the activities of the Group's divisions. The Board of Directors bears full responsibility for the monitoring of and compliance with risk management in the Group. The functionality of the risk management system and the status and results of its measures are reviewed by the internal audit department. The internal audit department reports directly to the Board of Directors.

The risk management system introduced in 2003 is run via a risk management tool on the GRENKELEASING AG Group intranet and has organically developed further since that time. Risk surveys in which the employees of the Group are requested to assess actual and potential risks are regularly carried out using the risk management tool. If risks are rated as relevant, countermeasures are determined to control these risks.

In addition to regular risk surveys and ad hoc risk reporting, comprehensive instruments are used for handling risks in financial and risk controlling in particular. These include monthly calculations of finance market risk positions and the regular presentation and discussion of the interest risk and liquidity position. The risk work group meets regularly and at least three times a year. In addition to the CEO and CFO, the risk work group includes the managers responsible for accounting, administration, quality management and controlling plus a branch office manager.

A risk inventory, i.e. a stock-taking of all relevant and significant risks, is performed at least once per year as part of risk controlling. In particular, this involves an analysis of the latest risk surveys and recent ad hoc risk reports. Changes or new risks are communicated immediately.

Minimum Requirements for Risk Management

Since the 2009 Annual Tax Act came into effect, leasing companies must also comply with the Minimum Requirements for Risk Management [Mindestanforderungen an das Risikomanagement (MaRisk)] published by Deutsche Bundesbank and the German Federal Office for Supervision of Financial Services (BaFin). Leasing companies were granted 2009 as a transition period for implementation.

Full implementation is required in 2010. The GRENKELEASING AG Group largely implemented MaRisk in 2009. These minimum requirements include qualitative expectations of risk management to be implemented by financial service providers in line with the scale, type, extent, complexity and risk content of their business. The appropriate risk management and controlling processes demanded by MaRisk for the key types of risks – counterparty, market value, liquidity and operational risks – have been implemented in the GRENKELEASING AG Group.

GRENKELEASING AG, based in Baden-Baden, is the parent company of GRENKE BANK AG, based in Hamburg, which is subject to the regulatory requirements of the German Banking Act [Kreditwesengesetz (KWG)] and the German Solvency Regulation [Solvabilitätsverordnung (SolvV)]. In addition to the parent company, GRENKELEASING AG and GRENKE BANK AG, the financial service providers GRENKEFACTORING GmbH and Grenke Investitionen Verwaltungs KGaA are also subject to the KWG and to BaFin regulation.

Under the KWG, the regulatory consolidated group would be limited to the above bank and financial service providers. Our petition to the BaFin to identify the regulatory consolidated group with the consolidated accounting group was approved. Thus, all the Group companies of the GRENKELEASING AG Group, i.e. the parent company GRENKELEASING AG and all its German and international subsidiaries are included in the regulatory consolidation group.

Risk Strategy

Our risk policy aims to measure and actively manage risks which arise from operating activities. The purpose of this is to be able to precisely measure – and therefore take – risks. We pay attention not just to individual risks but also to potential risk clustering in particular and wider interdependences. We have now built up a long track record in risk management.

We are able to measure the risks of default in our business very accurately. 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 and we have diversified our refinancing among various banks. Our international growth strategy also leads to an even wider diversification of our receivables portfolio.

Asset and earnings risks resulting from open residual values are avoided in our leasing model. Contractual risks are limited by only holding full payout leases in our portfolio and never entering into maintenance or warranty risks. While we calculate the residual amounts for the recognition of lease receivables in line with IAS 17 as part of IFRS accounting, our consistently positive profit from disposal in normal economic situations shows that we do not overstate the residual values of portfolios in these calculations.

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. Its systematic and ongoing improvement is a part of our corporate philosophy.

Above all, this includes our scoring process to evaluate credit risks 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 programmes 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.

The aim of risk management is not to completely avoid all risks but rather to allow them to be handled systematically. The following principles are key in this:

• avoidance of transactions that are incompatible with the risk strategy of the Group
• income prospects and risks must be in reasonable proportion to each other
• risk clusters should be largely avoided
• derivatives are used for hedging purposes only, i.e. to limit a risk position. The earnings prospects should play no role in this
• the management of bad debt that arise with the aim of limiting losses
• forms and agreements with third parties must be subject to legal review

Risk-bearing Capacity

The risk-bearing capacity of the Group is determined on a quarterly basis. Sufficient risk-bearing capacity exists if the material risks are not permanently measured as higher than the available risk cover. The risk cover essentially consists of the Group's IFRS equity. It is broken down into several levels to which individual risk items are assigned in line with the value-at-risk model.

In normal loss situations, the total risk potential and the individual risks should not exceed level 1 risk cover, which consist of pre-tax earnings and the provision for possible loan losses. In normal loss cases the confidence level is 84 percent; at level 5 it is 99.9 percent.

Emergency Concept

The emergency concept is documented in the form of an emergency plan that details all the measures to be taken in the event of an emergency and all the necessary information. It is designed to reduce the extent of possible losses and includes plans for both the continuation and restart of business. The emergency concept can be accessed by the employees concerned not just in digital form but also in paper form at several locations. As a central instrument in reacting to a potential crisis, a crisis staff will be formed, consisting of a manager and a crisis staff team. The responsibilities of the crisis staff can be broken down into the areas of situation assessment, coordination of measures, communication with parties involved, activation of measures to restart processes and restoring operating continuity.

In order to ensure the suitability, efficiency and topicality of emergency planning and emergency and crisis management, the precautionary measures, organisational structures and the different plans must be regularly reviewed in tests, exercises and simulations. These tests take place at least once per year and cover all salient points.

Counterparty Risks and Credit Risks

Receivables Volume

The receivables volume in the GRENKELEASING AG Group breaks down as follows in line with IFRS:

EURk	Dec. 31, 2009	Dec. 31, 2008
Current receivables
Cash	109,865	77,012
Lease receivables	459,315	438,868
Financial instruments with positive market value (short term portion)	1,238	3,274
Other current financial assets	68,821	32,047
Trade receivables	3,046	5,955
Total current assets	642,285	557,156
Non-current receivables
Lease receivables	675,564	704,350
Other non-current financial assets	82,615	89,360
Financial instruments with positive market value (long term portion)	785	3,819
Total non-current assets	758,964	797,529
Total receivables assets	1,401,249	1,354,685

Cash on hand and balances with banks include central bank balances of EUR 26,826k as of December 31, 2009. The remaining cash on hand and balances with banks include (cash of up to EUR 38k) balances at German and international banks. The financial instruments with positive fair values represent the Group's derivatives carried at fair value as of the reporting date.

Leasing Business

Counterparty risks are defined in the Group as possible losses on receivables from business partners. Since 1994, we have assessed the creditworthiness of our lessees using a scoring system. The quality of this system has been consistently and sufficiently proven by the levels of loss experienced since its implementation. This applies to our established domestic business as well as to new international markets that we have been gradually entering. 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 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 years that experienced very low actual loss rates, we continued to factor the average loss rate of the last recession into our contribution margin 2 management. 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. Loss rates are measured at all times throughout the Group. This is done by comparing the historical acquisition costs of the volume of leased assets and the contracts that have become bad debt over a defined period. Over time, this analysis serves as an early indicator of expected defaults and thereby the quality of the portfolio. The company aims for a loss rate that does not exceed the calculated losses of the contribution margin calculation. The main risks in the leasing business are combated by the scoring system combined with a hierarchical authority structure based on volumes and extending from sales employees to the Board of Directors.

The Group uses a portfolio approach for contracting lease agreements. The differentiation is as follows:

• lessees: highly diversified portfolio of lessees that are almost entirely business or corporate clients.
• resellers: no dependency on individual resellers or manufacturers.
• leased assets: no significant outstanding residual amounts (full cost recovery); maintenance or warranty risks are borne by suppliers/manufacturers.
• lease contracts: high number of current agreements with a portfolio duration below two years and a focus on small tickets below EUR 25k (95% of all leases).
• sales channels: represented in virtually all sales channels.
• geographic: represented in all major European economies with locations in 20 countries.

Lending Business at GRENKE BANK

The main financial risk at GRENKE BANK is its credit risks. In the past, the bank actively financed investments in closed-end funds pro rata. Thus, there is a possible systematic risk (concentration risk). This risk is taken into account by risk provisioning which is validated by intra-year reporting of anomalies in the lending business. The credit volume of GRENKE BANK (credit as defined by Sec. 19 (1) KWG) was EUR 126 million as of December 31, 2009.

Factoring Business of GRENKEFACTORING

Owing to risk considerations, we essentially offer small-ticket factoring as "notification factoring". As opposed to non-notification factoring, this also means additional security as debtors will only be discharged in respect to their payment obligations if they pay directly to us. In the event of non-notification factoring, payments discharging obligations can usually only be paid to a bank account pledged to us.

Financing of Franchise Companies

The franchise companies of the GRENKE Group operate on their respective leasing markets as lessors. They generally operate in the small-ticket IT segment, though we also offer car leasing under our franchise model. The leases contracted by the franchise companies are usually predominantly refinanced by the GRENKELEASING AG Group. The basis for this is formed by the refinancing framework agreement concluded between the franchisee and the GRENKELEASING AG Group. This refinancing is provided in the form of either loans or forfeiting. The instalments in future lease instalments are usually discounted at the refinancing interest rate.

Derivatives

The GRENKELEASING AG Group uses derivative financial instruments exclusively and only when ordinary business activities entail risks that can be minimised or eliminated by using suitable derivatives. Interest rate swaps, caps and forward exchange contracts are used in the GRENKELEASING AG Group. Each derivative contract is subject to an economic hedged item with a correspondingly opposite risk position. The partners are always only banks of prime credit standing. We regularly ensure a prime credit standing when selecting partners. Therefore, and on account of the diversification among our contract partners, counterparty risk plays a subordinate role.

Financial Market Risk

Fluctuations in market prices on the financial markets can have a significant effect on cash flow and net profit. In particular, changes in interest rate markets and in certain currencies can 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. We use derivative financial instruments only 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 consider sensitivities and elasticities to be important 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.

The main market price risks and the outstanding interest rate and currency risk items are discussed at least once per month at Board of Directors level or in Controlling on the basis of ongoing reports. Any action required is carried out immediately.

The GRENKELEASING AG Group is not exposed to risks from changes in share prices as the Group does not hold any listed shares. Changes in the prices of commodities also have no effect on the risk position as the Group holds nothing in these categories.

Interest Rate Risk

Identification

The interest rate risk for the operations of the GRENKELEASING AG Group stems mainly from the sensitivity of its financial liabilities to changes in market interest rates (interest rate risk). We endeavour to limit the impact of such risks on interest expenses and net interest income by using appropriate derivatives. Financial liabilities primarily consist of floating-rate debentures, ABCP programmes and the ABS bond. Further information on these risks is presented in the "Financial Risk Strategy" section 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 interest rate curve by plus 100 basis points for the past fiscal year would lead to a EUR 418k (previous year: EUR 615k) reduction in earnings before tax. This is equivalent to approximately 0.6 percent of net interest income. In the previous year this figure was 0.9 percent.

Instruments

Issuing bonds and contracting interest rate swaps are elements of a financing strategy that separates refinancing from interest rate hedging in order to obtain maximum flexibility for refinancing activities. The resulting risks (variable cash flows) are then 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 virtually 100 percent effective, the changes in fair value in relation to their clean value (excluding accrued interest) were recognised fully in equity.

Under the ABCP programme with DZ-Bank (CORAL) and LBBW (Weinberg), GRENKELEASING AG is responsible for interest rate hedging and thus interest rate risk management. The ABCP transaction also serves here as an underlying transaction with a floating rate and cash flows are 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 programmes. However, the SPEs are the contracting parties. Therefore we do not account for the derivatives and also do not apply hedge accounting.

The parameters of the underlying transaction, 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 largely identical to those of the hedged item. Furthermore, the volume contracted in the swaps will never be greater than the volume of the hedged financing. Existing and planned refinancing transactions are actively incorporated into risk management and the related hedges are subject to ongoing analysis through quarterly effectiveness tests using a method permitted under IFRSs. These tests have proved highly effective in the past.

The fair value of the interest rate swaps recognised in hedge accounting under IAS 39, which have a negative fair value of EUR 3,715k on the balance sheet date (previous year: negative fair value of EUR 3,833k), would have had a negative fair value of EUR 2,988k on the balance sheet date (previous year: positive fair value of EUR 182k) if the above interest rate scenario were assumed (parallel shift in interest rate curve of 100 basis points). Due to hedge accounting under IAS 39, the corresponding change would largely be shown in equity or in hedge reserves.

A corresponding downwards shift in the interest rate curve would lead to a rise of EUR 1,903k (previous year: rise of EUR 2,152k) in earnings before tax. The asymmetrical sensitivities result from the use of interest rate caps, which were mainly used for ABCP financing. In these cases, a cap is set for interest expense which limits the risk of rising interest rates. However, participation in lower interest rates is still possible. 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 788k (previous year: EUR 4,056k), which would mostly be taken straight to equity.

The interest rate risk is usually calculated once per month as an open position. This is done by comparing the floating and fixed-rate assets with the floating and fixed-rate liabilities. The elasticity of the floating rate positions is 1, as almost all reference interest rates reflect 1 or 3-month Euribor and are sufficiently mapped. In addition to the balance sheet items and their planned pattern of amortisation, the latest yield curves, exchange rates and all derivative items are also included in the calculations. The results are regularly analysed at Board of Directors level.

Currency Risk

The GRENKELEASING AG Group is exposed to currency risks because of its European activities and the growing significance of its international markets. Derivatives are used to mitigate or eliminate these risks. The derivatives used in this context are disclosed under financial assets or financial liabilities at their fair value as of the balance sheet date. Reassessment 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.

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. Thus the exchange rate for financing in Polish zloty, pound sterling, Hungarian forint, Swiss francs (for the refinancing of Hungarian leases, which are contracted in Swiss francs), Danish and Norwegian krone, Swedish krona and Czech koruna for holding lease receivables of the respective subsidiaries is known and contracted for the main part.

However, in the course of the companies' growth there are risks in respect to open tranches which are under the hedging threshold. 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.

Switzerland is not mentioned in this context, as we have an agreement with a Swiss bank to provide lease refinancing in local currency. Also, in the context of economic hedging, there are cash flows between the currencies.

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.

Value-at-risk

To identify open positions that are subject to currency risk, foreign currency cash flows are compared against the forward exchange contracts concluded. The cash flows from the refinancing of franchise operations in foreign currency, the cash flows or refinancing of Group companies in foreign currency and the cash flows of forward exchange contracts are relevant for the calculation of open risk positions. The outstanding loan in Swiss francs for the refinancing of a construction project was not included in the calculation.

If open cash flows are identified that exceed EUR 500k in total when translated at current rate then these are hedged. The value-at-risk (VaR) method is used to calculate the risks of open currency positions. This calculates the value of the loss not exceeded on a specific risk position at a given probability and time horizon. This value must be covered by the risk cover assets. Standard deviation and the average of historical time series for the last two years are calculated for each currency, with the help of which the value-at-risk can be determined for the currencies.

It must also be taken into account that the contractually agreed term of a lease must be hedged. With a lease volume outside the euro zone of EUR 67.2 million as of the reporting date, however, even minor deviations such as extraordinary repayments, cancellations or delays in instalment payments can accumulate negatively for the entire portfolio merely on account of unfavourable transaction delays caused by banks in periods of above-average currency fluctuation.

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, 2009, an appreciation of the euro of ten percent would have caused consolidated earnings before taxes to rise by EUR 59k (previous year: EUR 516k). A respective depreciation of the euro would have led to a EUR 41k (previous year: EUR 517k) 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 65 million (previous year: EUR 44 million) on the balance sheet date. In terms of nominal value and new lease business, the pound sterling, Polish zloty and Swiss franc are the most significant currencies.

An isolated analysis of the depreciation of the euro against pound sterling or the Swiss franc would have had a positive earnings effect of EUR 92k for the pound and EUR 198k for the franc. An appreciation of ten percent would have entailed an earnings reduction of EUR 3k for pound sterling positions and EUR 198k for Swiss franc positions. Given the same appreciation of the euro, positions in Polish zloty would have increased pre-tax profits by EUR 107k while a depreciation would have reduced them by EUR 103k.

Refinancing Risks

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

Our refinancing instruments range from traditional bank financing to revolving loan facilities and asset-backed commercial paper (ABCP) programmes. This financing is fixed for defined periods 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 programme. Given 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. We can currently use them to refinance 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.

In the 2009 fiscal year, the easing of the shortage of refinancing funds on the international finance markets was slow and limited in spite of the massive stimulus packages mounted by governments and central banks to stabilise the global financial system. At the same time, however, the significant drop in risk aversion on the part of investors meant that interest rate spreads fell strongly from the highs they had reached. The refinancing of the GRENKELEASING AG Group was not significantly affected by the ongoing financing shortage among SMEs in particular. At the start of the financial market crisis in 2008, we took up extensive refinancing funds and also adjusted new business management, with the result that we did not experience greater refinancing requirements in the 2009 fiscal year. All refinancing measures in the reporting year were completed in full, speedily and at attractive conditions.

Liquidity Risks

The management of liquidity risks ensures that the Group is always able to meet its payment obligations on time.

Short-term Liquidity

Liquidity risk management comprises the day-to-day management of incoming and outgoing payments. A "liquidity overview" is prepared for short-term reporting on a weekly basis, i.e. on the first working day of each calendar week, and discussed at Board of Directors level. It includes all relevant information on short-term cash developments in the coming weeks. The weekly liquidity overview provides the current liquidity status of the Group. It focuses on cash flows from leasing business.

Reporting distinguishes between four liquidity levels:

• cash liquidity: credit on all bank accounts plus overdrafts and all "immediate" (one-week) cash flows
• liquidity 1: cash liquidity plus cash flows due or received within one month. This also includes tied-up assets that can be monetarised within this period
• liquidity 2: liquidity 1 plus cash flows due or received within three months. This also includes tied-up assets that can be monetarised within this period
• liquidity 3: liquidity 2 plus cash flows due or received in more than three months. This also includes tied-up assets that can be monetarised in a period of more than three months

Medium and Long-term Liquidity

In addition to short-term liquidity management and weekly reporting, dynamic liquidity planning is also prepared usually monthly or at least once per quarter. The aim of cash planning here is to map the liquidity status for the coming periods. There is a more detailed presentation at quarterly level and at least for the next two years. As the duration on the assets side of the portfolio is roughly the same as this period, this is a suitable parameter for liquidity management at Group level.

Operational Risks

The GRENKE Group defines operational risks as the possible occurrence of losses in connection with contractual agreements, employees, technology and IT, failure or collapse of infrastructure, customer relations and cooperations, projects and external influences. This does not include general business and reputation risks. Operational risks are essentially controlled with the Group's risk profile management. This is supplemented by regular employee surveys using the risk management tool on the Group's intranet. Their assessments of operational risks are therefore included in risk profile management on an ongoing basis.

Certification

TÜV Management Service GmbH certified our company in line with DIN EN ISO 9001:1994 in 1998. Our quality management system was tested and certified in 2009 by Technical Control Association officers from TÜV Management Service GmbH in accordance with the new standard DIN EN ISO 9001:2008. In addition to the German branches, the subsidiaries in Austria, France, the Netherlands, Switzerland and Spain, GRENKEFACTORING GmbH, the Hungarian franchisee, Grenkeleasing kft and Grenke Investitionen Verwaltungs KGaA, which is responsible for asset sales, have also been certified.

The Board of Directors regularly assesses the effectiveness of the management system. Any necessary corrective measures are taken 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 9001:2008 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, the IT organisation and processes are subject to regular internal audits.

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 enabled us to achieve more than 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 as well.

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 as banks are currently being much more restrictive in granting refinancing. This trend is likely to continue beyond 2009.

Key Features of the Internal Control System and the Risk Management System of the GRENKELEASING AG Group in Terms of the Accounting Process

As a listed corporation as defined by Sec. 264d HGB, we are required under Sec. 289 (5) HGB to describe the key features of the internal control and risk management system with regard to the accounting process.

The internal control and risk management system with regard to the accounting process and the consolidated accounting process has not been defined by law. We understand the internal control and risk management system as a comprehensive system and follow the definitions of the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW), Düsseldorf, of the internal control system for accounting (IDW PS 261 (19) f.) and the risk management system (IDW PS 340 (4)). These define an internal control system as the principles, procedures and measures introduced in a company by its management geared towards the organisational implementation of management decisions

• to ensure the effectiveness and efficiency of business activities (including the protection of assets, which extends to preventing and covering asset losses),
• to ensure the correctness and reliability of internal and external accounting and
• to ensure compliance with the legal provisions relevant to the company.

The risk management system includes all organisational regulations and measures for risk detection and the handling of risks of business activity. The following structures and processes have been implemented in the Group with regard to the accounting and consolidated accounting processes:

The Board of Directors bears full responsibility for the internal control and risk management system with regard to the accounting and consolidated accounting processes. All the companies included in the consolidated financial statements are also included into a firmly defined management and reporting organisation.

The principles, structure and process organisation and the processes of the internal control and risk management system for accounting throughout the Group are documented in a manual that is adapted in line with external and internal developments at regular intervals.

Regarding the accounting and consolidated accounting processes, we consider such features of the internal control and risk management system to be significant that can have a material effect on the Group's accounting and the overall statement of the consolidated financial statements including the Group management report. In particular, these are the following elements:

• the identification of significant risk fields and control areas of relevance to the Group-wide accounting process
• controls to monitor the Group-wide accounting process and its results at the level of the Board of Directors and at the level of the companies included in the consolidated financial statements
• preventative control measures in the finance and accounting system of the Group and of the companies included in the consolidated financial statements and in the operative, performance-oriented company processes that generate significant information for the preparation of the consolidated financial statements including the Group management report, including a separation of functions and of pre-defined approval processes in relevant areas
• measures that safeguard proper IT-based processing of matters and data relevant to Group accounting
• the establishment of an internal audit system to monitor the internal control and risk management system for the consolidated accounting process

The GRENKELEASING AG Group has also implemented a risk management system for the Group-wide accounting process that contains measures to identify and assess significant risks and corresponding risk-mitigating measures to ensure the correctness of the consolidated financial statements.

The risk management system established throughout the Group for the accounting process thereby guarantees the preparation of accurate and reliable information for the public.

Risk Summary

The Group already largely implemented the Minimum Requirements for Risk Management published by Deutsche Bundesbank and the German Federal Office for Supervision of Financial Services in 2009. 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 recognised at an appropriate level using conservative benchmarks. With respect to the future development of GRENKELEASING AG and its subsidiaries, there are no particular business-related risks exceeding the normal measure.

SIGNIFICANT EVENTS AFTER THE END OF THE FISCAL YEAR 2009

Since the second half of 2009, we have again been managing the Group with a stronger focus on growth. As part of this revision we also recommenced our expansion in Europe and opened a further subsidiary in Luxembourg and an additional location in the UK, in Belfast, after the end of the reporting year.

We also again highlighted our good standing on the capital markets by redeeming the remaining volume of an existing ABS bond and placing a new one at the start of the year. The bond now issued has a volume of up to EUR 300 million and can be used for refinancing German lease receivables. It has a revolving structure in its first three years and will be redeemed in line with the repayment of receivables from the fourth year onwards.

The bond is listed but held exclusively by KfW and WestLB. KfW only recently added this financing option to its range – as part of its liquidity support for German SMEs. We positioned ourselves early on to take advantage of this new offering. By contrast, WestLB was already one of our refinancing partners. In return for assuming its tranche of the bond, it has reduced an existing ABS programme, which means that the placement of the bond has increased the ABS lines of the GRENKELEASING AG Group by EUR 90 million net.

REPORT ON FORECASTS AND THE OUTLOOK FOR THE GROUP

Economic Environment

In the spring of 2010, the further development of the world's economy will depend largely on the knock-on effects of the government spending programmes of the industrialised nations and the robustness of the economies in key emerging markets, particularly China. The resilience of the recovery that emerged in early summer 2009 as a result of stimulus packages is still low. This is shown by the persistently very low order situation for German mechanical engineering companies, the significant slowdown in industrial activity in the fourth quarter of 2009, the enormous debt problems in a number of countries and the continuing poor condition of the US real estate market, the slump in which is generally considered to be the cause of the global economic crisis in 2008/09.

As the data situation is also contradictory – the November change in incoming orders for all German industry was recently adjusted upwards from -0.2 percent to +2.8 percent on account of corrected information from just one reporting company – forecasts overall are highly restrained. In January 2010, the experts and market players questioned by the Centre for European Economic Research (ZEW) in Mannheim were again more sceptical regarding the German economy. The index of economic forecasts generated by the survey slid for the fourth month in succession to its lowest point since July 2009. Growth forecasts for 2010 are therefore fluctuating at a low level of between one and just over two percent overall. Hardly anyone is predicting a self-supporting, stable upswing. The German government is assuming a rise in economic output of around 1.5 percent, the Bundesbank is forecasting 1.6 percent.

According to a joint analysis by the German ifo Institute, the French INSEE and the Italian ISAE Institute, the prospects for economic development will also remain dull in the euro zone for at least the first half of 2010. The study stated that real GDP will grow by only 0.2 percent in each of the first two quarters. The slowing impetus from fiscal policy, the restrictive lending conditions and the tense labour market situation in particular are considered to be the negative factors and expansion in industrial production is therefore expected to remain modest.

The OECD is facing a similar situation: It is forecasting growth of only 0.9 percent in 2010 for the thirteen OECD nations in the euro area. OECD forecasts are also muted for other countries important to the GRENKELEASING AG Group outside the euro area. Switzerland is expected to see growth of only 0.9 percent, the UK of 1.2 percent. Poland alone offers the promise of strong economic growth at 2.5 percent after an increase of 1.4 percent in 2009.

As the GRENKELEASING AG Group and the GRENKE Group including franchise partners is the only company to focus solely on this market there are no independent forecasts or official historical data for the development of small-ticket IT leasing. As in the previous year, it can be assumed that European SMEs will be highly cautious in their investment plans in 2010, especially in order to preserve credit lines and cash assets. The lending policies of banks overall have also become very much more restrictive following the financial crisis.

Given that leasing spares liquidity by its nature, this means that there are good prospects for leasing business, particularly for the smallticket area geared towards SMEs. In a joint study together with the German Leasing Association, the ifo Institute came to the conclusion that leasing has always been able to particularly increase its overall market share in Germany precisely in times of economic difficulty.

Opportunities and Risks

The following report summarises the opportunities and risks forecast for the Group and its segments of leasing business, banking business and factoring business. The fundamental statements concerning domestic leasing business also apply to the reportable leasing business segments in international markets.

The 2009 acquisition of GRENKE BANK means additional risks but also opportunities for the GRENKELEASING AG Group from the traditional banking business on which GRENKE BANK AG concentrates. The risks chiefly relate to risk provisioning for the remaining portfolio of loans and advances and punctual repayment of liabilities from deposits business. Generally, we do not anticipate that the business of GRENKE BANK will result in any significant change in the risk profile in the 2010 fiscal year. This also applies to the factoring activities acquired in the third quarter of 2009 that were previously managed by a franchise partner within the Group and that have not had a significant impact on the Group's risk profile.

Regarding international leasing business, there are two additional significant risks compared to business In Germany. Firstly, new business growth in smaller international 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 GRENKELEASING AG Group is also aiming to reach a substantial size in all its international markets to successively reduce the relative significance of individual employee turnover as business grows.

Secondly, currency risks may arise in markets outside the euro zone. As soon as these risks reach an economically meaningful minimum level we limit these risks through the use of derivative instruments in line with our risk strategy. The extraordinary expenses due to currency translation differences experienced in fiscal 2008 as a result of the international financial market crisis did not occur again in 2009. We are assuming that in spite of the high indebtedness of some countries and the resulting fluctuation risks, such massive distortions as those seen in 2008 will not happen again in the current fiscal year. Nonetheless, we are watching developments on the currency markets very closely and will adapt our risk strategy if necessary and viable.

As a lease provider, the whole Group is subject to interest rate risk. This can affect 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. The refinancing available to the GRENKELEASING AG Group through the stable and growing deposit business of GRENKE BANK has visibly improved the risk profile on the refinancing side. We will fully continue this successful policy.

The GRENKELEASING business model is also sensitive to interest rates. Growth and profitability of new business can be influenced by interest rate changes and by the interest rate spreads required. The refinancing markets that became temporarily illiquid following the financial market crisis have now largely normalised again with the result that interest rate spreads have narrowed considerably. We are assuming that this process of normalisation will also continue in the current year. We do not expect spreads to return to pre-crisis levels – and thereby the risk of a new financial market bubble. To date, we have passed on increased refinancing costs to the market in our leasing conditions. Group management will also remain clearly focused on high-yield new business in future.

Finally, risks result from the possibility that, following the recession and in the light of the only very restrained economic recovery to date, the loss rate will remain relatively high and persist at the upper end of the range usually seen in recession phases. However, we feel that the Group has been well protected both by systematically taking into account a loss rate representative of the economic cycle as a whole in our conditions, even in economically prosperous periods, and also by the Group's strong profitability. We therefore do not anticipate any fundamental risks to the Group.

Forecast Business Development

Fiscal Year 2010

The forecast for the 2010 fiscal year entails less uncertainty than the previous year's forecast at the start of 2009. The probabilities of the risks and opportunities described can now be much better assessed. We therefore already geared the Group's management back towards growth in new business in the course of the second half of 2009. We also intend to continue this strategy in the current fiscal year – not least because conditions on the refinancing markets have stabilised again and the availability of refinancing funds as a growth-limiting criterion for new business has improved significantly. Our consistently strong capital market rating remains a major cornerstone of our business.

Provided that market conditions do not deteriorate again, we currently consider growth in new business in the GRENKE Group including franchise partners of around 15 percent to be possible for 2010. We therefore intend to generate growth significantly in excess of our long-term target of at least ten percent in the current fiscal year.

In addition to growth in net interest income from a rise in new business, we are also forecasting a tangible and strong increase in net interest income, as the effects of the margin expansion achieved in the course of 2009 will be enjoyed throughout the whole of the current fiscal year. We anticipate that the loss rate will consolidate at its current level. With overall economic developments remaining restrained, only low income from disposals will be achievable. We again intend to expand our European presence in the fiscal year 2010 with additional subsidiaries and branches, which will affect the Group's expenses. Overall, we forecast a net profit for 2010 of between EUR 25 million and EUR 28 million.

Subsequent Years

We will stick to our growth course in future as well. We will continue to strive for sustainable growth in new business in the GRENKE Group including franchise partners of more than ten percent per year, regardless of whether individual years deviate from this long-term target. As a pan-European company, we will also clearly shape our future growth at a European level.

This strong diversification across a number of countries makes us largely independent of the respective developments in individual countries. As the significance of our international business continues to grow, this will naturally also apply to the German leasing market. We will systematically take advantage of the strong growth prospects in countries that currently have low levels of lease penetration and countries in which we have only a small market share at present. We will continue to manage our new business with a high contribution margin 2 throughout the economic cycle, thereby ensuring the Group's performance and a sustainable return on equity of 16 percent.

Baden-Baden, Germany, January 30, 2010

The Board of Directors

CONSOLIDATED INCOME STATEMENT FOR FISCAL YEAR 2009

	Jan. 1 to	Jan. 1 to
Note	Dec. 31, 2009	Dec. 31, 2008
3.1	114,566	110,650
3.1	42,785	42,606
	71,781	68,044
3.2	-31,189	-20,110
	40,592	47,934
3.3	20,301	20,151
3.4	23,047	24,327
3.5	-312	2,266
	83,628	94,678
3.6	29,306	27,428
3.7	2,901	2,769
3.8	20,118	17,087
	703	4,096
3.9	3,397	1,326
	33,997	44,624
	-159	0
	1,039	829
	1,242	782
	33,635	44,671
3.10	16,256	9,532
3.10	-7,233	1,996
	24,612	33,143
3.11	1.80	2.42
3.11	1.80	2.42
3.11	13,684,099	13,684,099
3.11	13,684,099	13,684,099

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR FISCAL YEAR 2009

	Jan. 1 to	Jan. 1 to
EURk	Dec. 31, 2009	Dec. 31, 2008
Net profit for the perios	24,612	33,143
Allocation / reduction of the hedging reserve (before taxes)	614	-5,234
Income taxes	-176	655
Allocation / reduction of the hedging reserve (after taxes)	438	-4,579
Allocation / reduction of reserve for actuarial profits and losses (before taxes)	-131	-5
Income taxes	85	1
Allocation / reduction of reserve for actuarial profits and losses (after taxes)	-46	-4
Change of currency translations	-324	-103
Other comprehensive income	68	-4,686
Total comprehensive income	24,680	28,457

See Point 4.18 in the Notes

CONSOLIDATED BALANCE SHEET AS PER DECEMBER 31, 2009

EURk	Note	Dec. 31, 2009	Dec. 31, 2008
Assets
Current Assets
Cash	4.1	109,865	77,012
Financial instruments with positive market value (short term portion)*	4.2	1,238	3,274
Lease receivables	4.3	459,315	438,868
Other current financial assets	4.4	68,821	32,047
Trade receivables	4.5	3,046	5,955
Lease assets for sale		12,727	12,151
Tax receivables	4.6	838	5,211
Other current assets	4.7	22,076	18,949
Total current assets		677,926	593,467
Non-current assets
Lease receivables	4.3	675,564	704,350
Financial instruments with positive market value (long term portion)*	4.2	785	3,819
Other non-current financial assets	4.4	82,615	89,360
Property, plant and equipment	4.8	35,394	35,714
Goodwill	4.9	11,178	8,239
Other intangible assets	4.10	2,333	2,296
Deferred tax assets	4.11	15,557	17,442
Other non-current assets	4.7	307	710
Total non-current assets		823,733	861,930
Total assets		1,501,659	1,455,397

* Previous year adjusted (see Note 2.3)

CONSOLIDATED BALANCE SHEET AS PER DECEMBER 31, 2009

EURk	Note	Dec. 31, 2009	Dec. 31, 2008
Liabilities and equity
Liabilities
Current liabilities
Refinancing liabilities	4.12	379,343	441,847
Liabilities from deposit business	4.12	75,817	0
Short-term debt	4.12	2,346	4,692
Financial instruments with negative market value (short term portion)*	4.13	3,667	2,707
Trade payables		5,766	8,466
Tax liabilities	4.14	11,521	3,101
Deferred liabilities	4.15	3,884	2,310
Other current liabilities		7,606	5,465
Deferred lease payments		67,711	70,217
Total current liabilities		557,661	538,805
Non-current liabilities
Refinancing Liabilities	4.12	601,822	609,218
Liabilities from deposit business	4.12	30,561	0
Long term debt	4.12	6,516	7,819
Financial instruments with negative market value (long term portion)*	4.13	1,165	2,727
Deferred tax liabilities	4.11	38,580	47,768
Pensions*	4.16	1,358	90
Other non-current liabilities*	4.17	1,112	2,556
Total non-current liabilities		681,114	670,178
Equity	4.18
Capital stock		17,491	17,491
Capital reserve		60,166	60,166
Retained earnings		83,900	5,317
Other components of equity		-4,088	-4,156
Balance sheet profit		105,415	167,596
Total equity		262,884	246,414
Total liabilities and equity		1,501,659	1,455,397

* Previous year adjusted (see Note 2.3)

CONSOLIDATED CASH FLOW STATEMENT FOR FISCAL YEAR 2009

		Jan. 1 to	Jan. 1 to
	EURk Earnings before taxes	Dec. 31, 2009 33,635	Dec. 31, 2008 44,671
	Non-cash items contained in net profit for the period and
	reconciliation to cash flow from operating activities
+ / -	Amortisation / depreciation	2,901	2,769
- / +	Profit / loss from the disposals of equipment and intangible assets	-18	71
- / +	Investment income	203	-47
- / +	Non-cash changes in equity	378	-3,681
+ / -	Increase / decrease deferred liabilities	473	472
-	Additions of lease receivables	-445,503	-539,615
+	Payments by lessees	469,397	450,135
+	Disposals / reclassifications of lease receivables at residual carrying values	109,482	96,806
-	Interest and other income from financing business	-114,566	-110,650
-	Increase in other receivables from lessees	-7,937	-7,456
+ / -	Currency translation differences	-2,533	5,881
=	Change in lease receivables	8,340	-104,899
+	Additions of liabilities from refinancing	1,094,519	1,257,913
-	Payment of annuities to refinancers	-280,590	-230,525
-	Disposal of liabilities from refinancing	-926,516	-918,084
+	Expenses from interest on refinancing and on deposit business	42,785	42,598
+ / -	Currency translation differences	-98	388
=	Change in refinancing liabilities	-69,900	152,290
+	Change in liabilities from deposit business	58,341	0
-	Change in loans to franchisees	-18,945	-18,618
	Changes in other assets / liabilities
- / +	Increase / decrease in other assets	15,208	-38,578
+ / -	Increase / decrease in deferred lease payments	-2,506	17,998
+ / -	Increase / decrease in other liabilities incl. pensions	-8,442	-440
=	Cash flow from operating activities	19,668	52,008

continued on next page

CONSOLIDATED CASH FLOW STATEMENT FOR FISCAL YEAR 2009: CONTINUED

		Jan. 1 to	Jan. 1 to
	EURk	Dec. 31, 2009	Dec. 31, 2008
- / +	Taxes paid / received	-3,462	-9,311
-	Interest paid	-1,242	-782
+	Interest received	1,039	829
=	Net cash flow from operating activities	16,003	42,744
-	Purchase of equipment and intangible assets	-1,070	-2,498
- / +	Payments / proceeds from acquisition of subsidiaries	32,139	-7,544
+	Proceeds from sale of equipment and intangible assets	63	312
=	Cash flow from investing activities	31,132	-9,730
+ / -	Raising / repayment of bank liabilities	-3,374	-392
-	Dividend payment	-8,210	-8,210
=	Cash flow from financing activities	-11,584	-8,602
	Cash funds at the beginning of the 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 beginning of the period	73,419	48,791
+ / -	Change due to currency translation	-236	216
=	Cash funds after currency translation	73,183	49,007
	Cash funds at the end of the period
	Cash on hand and balances with banks	109,865	77,012
-	Bank liabilities from overdrafts	-1,131	-3,593
=	Cash and cash equivalents at the end of the period	108,734	73,419
	Change in cash and cash equivalents during the period (=Total cash flows)	35,551	24,412
	Net cash flow from operating activities	16,003	42,744
+	Cash flow from investing activities	31,132	-9,730
+	Cash flow from financing activities	-11,584	-8,602
=	Total cash flow	35,551	24,412

STATEMENTS OF CHANGES IN CONSOLIDATED EQUITY

					Reserve for
	Capital	Capital	Retained	Hedging	actuarial profits	Currency	Total
EURk	stock	reserve	earnings	reserve	and losses	translation	equity
Equity as per
Jan. 1, 2008	17,491	60,166	147,980	1,200	-62	-608	226,167
Total comprehensive
income			33,143	-4,579	-4	-103	28,457
Dividend in 2008
for 2007			-8,210				-8,210
Equity as per
Dec. 31, 2008	17,491	60,166	172,913	-3,379	-66	-711	246,414
Equity as per
Jan. 1, 2009	17,491	60,166	172,913	-3,379	-66	-711	246,414
Total comprehensive
income			24,612	438	-46	-324	24,680
Dividend in 2009
for 2008			-8,210				-8,210
Equity as per
Dec. 31, 2009	17,491	60,166	189,315	-2,941	-112	-1,035	262,884

See Point 4.18 in the Notes

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR FISCAL YEAR 2009

1 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. GRENKELEASING AG is the parent company of the GRENKELEASING Group (hereinafter also referred to as the Group).

The Group conducts financing business, as a partner for mainly small and medium-sized enterprises, ranging from leases to factoring, various payment transaction services and deposits business with private customers. The Group's business areas comprise the leasing of all types of movable assets, the management of lease contracts for third parties, the broking of property insurance for leased assets, the purchase and management of receivables from and for third parties (factoring), banking business and all other related transactions.

Leasing business 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 BASIC PRINCIPLES OF THE CONSOLIDATED FINANCIAL STATEMENTS

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 has, as in the previous 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). The consolidated financial statements comply with IFRSs as published by the International Accounting Standards Board (IASB) and as adopted in the EU as of December 31, 2009.

All International Financial Reporting Standards (IFRSs) (formerly International Accounting Standards (IAS)) applicable to fiscal year 2009 and the 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, 2009 are prepared for GRENKELEASING AG and its subsidiaries.

The annual financial statements of the companies included in GRENKELEASING AG's consolidated financial statements are all based on uniform accounting policies. The annual 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 euro (EUR). Unless stated otherwise, all figures are rounded and stated in thousands of euro (EURk).

The accounting policies used are the same as those used in the previous year. Exceptions are listed in notes 2.2 and 2.3 below.

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

2.2 Effects of New or Amended IFRSs

2.2.1 Accounting Standards Implemented in 2009

In recent years, the IASB has published various different amendments of IFRSs and new IFRSs as well as International Financial Reporting Interpretations Committee interpretations (IFRICs). The Group applied the following new and revised IFRS, listed below, as of January 1, 2009:

• IFRS 2 "Share-Based Payment: Vesting Conditions and Cancellations" entered into force on January 1, 2009
• IFRS 7 "Financial Instruments: Disclosures" entered into force on January 1, 2009
• IFRS 8 "Operating Segments" entered into force on January 1, 2009
• IAS 1 "Presentation of Financial Statements" entered into force on January 1, 2009
• IAS 23 "Borrowing Costs (revised)" entered into force on January 1, 2009
• IAS 32 "Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements: Puttable Financial Instruments and Obligations Arising on Liquidation" entered into force on January 1, 2009
• IFRIC 13 "Customer Loyalty Programs" entered into force on July 1, 2008
• IFRIC 15 entered into force on January 1, 2009
• IFRIC 16 "Hedges of a Net Investment in a Foreign Operation" entered into force on October 1, 2008
• Improvements to IFRS 2008 entered into force on January 1, 2009

The following section briefly describes the provisions which are relevant to GRENKELEASING, as well as their effects on the consolidated financial statements.

• IAS 1 "Presentation of Financial Statements" was published in September 2007 and is operative for the first time for the reporting period beginning on or after January 1, 2009. The new version of the standard includes significant changes in the presentation and reporting of financial information in financial statements. From now on, only transactions relating to equity holders acting in their capacity as equity holders are to be reported in the statement of changes in equity. Other changes in equity are to be shown in an "Overall statement of total income".

• IFRS 7 "Financial Instruments: Disclosures" provides for additional disclosures on the measurement of fair values and the liquidity risk. The amendment requires a quantitative analysis of the measurement of the fair values on the basis of a three-level hierarchy for each class of financial instrument carried at the fair value. In the case of valuations at the fair value of level 3, reconciliation from the beginning balances to the ending balances is now provided for as well as disclosure of significant reclassifications between levels 1 and 2 of the hierarchy. The amendment also sets out requirements concerning disclosures of liquidity risks with transactions relating to derivatives and assets used for the purposes of liquidity management.

• 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, replacing IAS 14 "Segment Reporting". IFRS 8 requires reporting on financial and descriptive information relating to companies' reportable segments. Reportable operating segments are components of a company or groupings of operating segments in line with certain criteria. In particular, for these segments separate financial information must be available which is reviewed on a regular basis by the company's highest management committee in order to measure and evaluate business performance. The financial information should be reported on the basis of internal management as IFRS 8 follows the management approach. (see note 7)

• 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 eliminate inconsistencies and to clarify formulations. The changes are applicable to fiscal years beginning on or after January 1, 2009. The following section describes only the amended standards which affect the financial statements. Specifically, the following standards are affected. Unless explicitly stated, the Group does not expect any effects as a result of the application in question:
• 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 are recognised under non-current financial instruments in the balance sheet.
• IAS 36 "Impairment of Assets": Where the "fair value less costs to sell" is calculated based on a discounted cash flow model, additional disclosures on the discount rate are required in line with obligatory disclosures when a discounted cash flow 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 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 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.

2.2.2 Accounting Standards Already Published But Not Yet Implemented

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 AG are explicitly described. Voluntary early application of these standards is explicitly permitted/recommended. GRENKELEASING AG is not exercising this option.

"Improvements to IFRSs" was published by the IASB on April 16, 2009. It is the second standard published as part of the Annual Improvements Process (AIP) project. Improvements to IFRSs include 15 different changes to twelve existing IFRSs. In addition to the changes proposed in the exposure draft "Proposed Improvements to IFRSs" in August 2008, these Improvements to IFRSs include five further changes, some of which were issued to the public for comment as part of the first improvements exposure draft "Proposed improvements to IFRSs" in October 2007, and others as part of the exposure draft "ED/2009/1" published at the end of January 2009. By grouping these changes together in a single document, the IASB intends to reduce the expense for all involved.

The revised version of IFRS 3 "Business Combinations (IFRS 3R) published in January 2008 by the IASB and the amended version of IAS 27 Consolidated and Separate Financial Statements" (IAS 27R) have been adopted into European law by the EU and will become obligatory for the Group as of January 1, 2010. This has resulted in effects on the measurement of interests without controlling influence, the recognition of transaction costs, the initial recognition and subsequent measurement of a related consideration and subsequent acquisitions. These new rules will have an effect on the rate of goodwill amortization, on earnings in the period under review, in which a merger takes place, and on future earnings.

The revised IAS 27 stipulates that a change in the proportion of ownership interest in a subsidiary, which does not result in loss of control, will be recognised as an equity transaction with owners. No goodwill amortization or gain or loss can result from such a transaction. Provisions on the attribution of losses to shareholders of the parent company and interests without controlling influence and the accounting rules for transactions which result in loss of control were also amended. The new rules from IFRS 3 (revised) and IAS 27 (revised) will have an effect on future acquisitions and losses of control of subsidiaries and transactions with interests without controlling influence.

On June 19, 2009, the IASB published an amended version of IFRS 2 "Share-based Payment". The revised standard is operative for the first time for fiscal years beginning on or after January 1, 2010. In addition to a few clarifications, the IASB in particular incorporated IFRIC 8 "Scope of IFRS 2" and IFRIC 11 "IFRS 2 Group and Treasury Share Transactions" into IFRS 2.

IASB amendments to IFRIC 9 "Reassessment of Embedded Derivatives" and IAS 39 "Financial Instruments: Recognition and Measurement" were published in March 2009 under the name "Embedded Derivatives". According to these amendments, a company must assess to what extent a derivative embedded in a host contract can be separated from the contract on reclassification of the entire financial instrument out of the 'at fair value through profit or loss' category. If the fair value of a derivative to be separated cannot be calculated, the entire financial instrument cannot be reclassified. These provisions mandatory for fiscal years starting after June 30, 2009 had no effect on the consolidated financial statements.

In November 2009 the IASB published IFRS 9 "Financial Instruments: Classification and Measurement". This standard marked the end of the first of three stages in the IASB project to revise IAS 39 "Financial Instruments: Recognition and Measurement". The main components of the new standard are new, less complex provisions on the categorisation and measurement of financial instruments. The provisions must be applied from January 1, 2013. The IASB also intends for IFRS 9 to completely replace the still effective IAS 39 by the end of 2010.

The recently published revised IAS 24 "Related party disclosures" has no effect on the consolidated financial statements as the amendments essentially relates to simplifications in reporting requirements for companies in which governments hold stakes.

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.

In addition, the following standards/interpretations were adopted, which should have no effect on the consolidated financial statements.

• IFRIC 17 Distributions of Non-Cash Assets to Owners
• IFRIC 18 Transfers of Assets from Customers
• IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

2.3 Changes in Disclosures

The format of the balance sheet and of the income statement was adjusted in the first quarter of 2009 mainly due to the acquisitions of GRENKE BANK AG (previously "Hesse Newman & Co. AG") and of GRENKEFACTORING GmbH in the third quarter and in order to improve clarity and informational content. Some items were reclassified/introduced for the first time. Wherever the figures for the previous year were affected, these were adjusted accordingly.

The following adjustments were made in the income statement. The figures for the previous year were not altered for any of the items concerned as generally the adjustments involved clarifications of terms.

• The "Interest and similar income from financing business" item replaces the previous term "Interest income from leasing business". In addition to interest income from leasing, this item also comprises interest income from loans and financing provided to third parties, which also includes the lending business of the acquired bank, and fees from factoring business.
• "Interest expense from refinancing the lease business" was renamed "Expense from interest on refinancing and on deposit business" as interest from deposits business is included in this item.
• "Net interest income" includes the entire Group net interest income from the financing business and the previous "Net interest income from leasing business".
• "Settlement of claims" was renamed "Settlement of claims and risk provisioning" and includes settlement of claims from leasing and factoring business and risk provisioning for the portfolio of loans and advances in banking activities.

The following changes appear in the balance sheet:

• "Cash" includes all cash assets, cash in accounts at central banks and all cash in bank accounts. This does not affect the figures for the previous year.
• Loans and advances to customers and receivables from the factoring business are included under other financial assets.
• Both "Financial instruments with a positive market value" on the assets side and "Financial instruments with a negative market value" on the liabilities side are divided into current and non-current categories. The figures for the previous year were adjusted accordingly.
• "Liabilities from deposit business" was introduced for the first time. This item consists of liabilities due to customers from GRENKE BANK AG deposit business. The figure for the previous year is thus zero.
• "Pensions" are now shown in a separate line and are eliminated accordingly from "Other non-current liabilities". The figure for the previous year was adjusted accordingly to show pensions at EUR 90k for 2008.

2.4 Consolidation Policies

2.4.1 Consolidated Group

The consolidated financial statements contain all assets and liabilities as well as all expenses and income of GRENKELEASING AG (hereinafter referred to as the "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. Control is normally evidenced when the Group holds, either directly or indirectly, 50 percent (or more) of the voting rights or the issued 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.

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

Name	Registered office	Equity investment 2009	Equity investment 2008
Germany
GRENKE SERVICE AG
(formerly GLG Grenke-Leasing GmbH) 1) / 2)	Baden-Baden	100%	100%
Grenke Investitionen Verwaltungs
Kommanditgesellschaft auf Aktien
(84.4 percent directly, 15.6 percent indirectly via GRENKE
SERVICE AG)	Baden-Baden	100%	100%
WEBLEASE NETBUSINESS AG	Baden-Baden	-	100%
GRENKE BANK AG 3)	Hamburg	100%	-
GRENKEFACTORING GmbH 4)	Baden-Baden	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%
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 Sprl5)	Brussels/Belgium	100%	100%
Grenke Leasing Ltd.	Guildford/UK	100%	100%
GRENKELEASING Sp.z o.o	Poznan/Poland	100%	100%
FCT GK COMPARTMENT G1 6)	Pantin/France	100%	–

1) Renamed in 2009 - GRENKE SERVICE AG is the legal successor to GLG Grenke-Leasing GmbH.

2) WEBLEASE NETBUSINESS AG was merged with GRENKE SERVICE AG in 2009.

3) Acquisitions in fiscal year 2009.

4) Acquisitions in fiscal year 2009 from franchise companies.

5) GRENKELEASING AG holds a direct interest of EUR 1,499k (of a total of EUR 1,500k) in GRENKE LEASE Sprl in Brussels/Belgium and an indirect interest of EUR 1k through its German subsidiary, GRENKE SERVICE AG.

6) Founded in 2009 as part of the ABCP programme Coral for French lease receivables. GRENKELEASING AG holds indirect interests in this company through its Irish subsidiary GRENKE FINANCE Plc. (EUR 150k) and its German subsidiary GRENKE SERVICE AG (EUR 150k).

The balance sheet date of all subsidiaries is December 31, 2009.

Equity investment	Equity Dec. 31, 2009 (EUR)	Net profit/loss 2009 (EUR)
Grenke Investitionen Verwaltungs
Kommanditgesellschaft auf Aktien, Baden-Baden 1)	780,828.96	0.00
GRENKE SERVICE AG (formerly GLG Grenke-Leasing GmbH) , Baden-Baden	1,362,287.73	-292,955.98
GRENKE BANK AG, Hamburg 1) / 2) / 3) / 4)	11, 398,230.07	0.00
GRENKEFACTORING GmbH, Baden-Baden 3) / 4)	654,398.77	-891,506.01
GRENKE LOCATION SAS, Schiltigheim/France	21,230,259.38	2,967,290.64
GRENKELEASING AG, Zurich/Switzerland	8,420,934.63	1,515,859.23
GRENKELEASING AG, Vienna/Austria	2,182,040.69	290.576.76
GRENKELEASING s.r.o., Prague/Czech Republic	312,278.15	-104,122.69
GRENKE ALQUILER S.A., Barcelona/Spain	2,578,807.61	259,577.62
GRENKE Locazione S.r.l., Milan/Italy	1,526,968.39	593,447.65
Grenkefinance N.V., Vianen/Netherlands	328,391.13	-458,372.66
GRENKE LEASING S.r.l., Milan/Italy	1,620,309.79	-85,841.89
GRENKELEASING ApS, Herlev/Denmark	-791,722.22	-932,265.09
GRENKE LIMITED, Dublin/Ireland	1,960,570.17	52,452.30
GRENKE FINANCE Plc., Dublin/Ireland	23,155,461.46	4,408,982.05
GRENKELEASING AB, Stockholm/Sweden	882,079.61	-42,926.39
GRENKE LEASE Sprl, Brussels/Belgium 3)	249,485.55	-225,422.93
Grenke Leasing Ltd., Guildford/UK 3)	-2,063,185.06	-89,702.22
GRENKELEASING Sp.z o.o, Poznan/Poland	1,960,745.82	366,117.68
FCT "GK" COMPARTMENT "G1" Pantin/France 5)	300.00	0.00

1) After profit/loss transfer

2) In 2009 GRENKE BANK AG had two short fiscal years from January 1, 2009 to March 31, 2009, in which it generated earnings of EUR 99,155.75 and from April 1, 2009 to December 31, 2009 in which it transferred its earnings as shown in the table to GRENKELEASING AG.

3) The capital of these subsidiaries changed as follows in fiscal year 2009:

GRENKE LEASING S.r.l., Milan/Italy	Dec. 29, 2009 Capital addition EUR 100,000.00
GRENKE BANK AG, Hamburg/Germany	Dec. 28, 2009 Capital addition EUR 5,000,000.00
Grenke Leasing Ltd., Guildford/UK	Dec. 23, 2009 Capital addition GBP 3,000,000.00 (EUR 3,360,215.05)
GRENKE LEASE Sprl, Brussels/Belgium	Dec. 23, 2009 Capital addition EUR 250,000.00
GRENKE FACTORING GmbH, Baden-Baden/Germany	Aug. 31, 2009 Capital addition EUR 3,400,000.00

4) Acquisitions in fiscal year 2009

5) Company founded in 2009 as part of the ABCP programme Coral for French lease receivables.

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 completed in fiscal year 2009. 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 2.5.7 and 2.5.14). Balances, income and expenses as well as unrealised profits and losses from intra-Group transactions are fully neutralized. The amendments to IFRS 3R and IAS 27R will be applied from January 1, 2010

2.4.2 Foreign Currency Translation

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 is used.

Foreign Entities

Each company within the Group determines its own functional currency. Items included in the financial statements of the relevant company 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 euro at the closing rate at the balance sheet date. 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.

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

		Average rate		Average rate
	Closing rate on Dec. 31, 2009	2009	Closing rate on Dec. 31, 2008	2008
CHF	1.4836	1.5099	1.4850	1.5874
CZK	26.4730	26.4548	26.8750	24.9460
DKK	7.4418	7.4463	7.4506	7.4560
GBP	0.8881	0.8911	0.9525	0.7963
HUF 1)	270.4200	280.5442	266.7000	251.5100
NOK 1)	8.3000	8.7288	9.7500	8.2237
PLN	4.1045	4.3298	4.1535	3.5121
RON 1)	4.2363	4.2396	4.0225	3.6826
SEK	10.2520	10.6200	10.8700	9.6152
SKK 1) / 2)	-	-	30.1260	31.2620
USD 3)	1.4406	-	-	-
CAD 3)	1.5128	-	-	-
JPY 3)	133.1600	-	-	-
1)	Currency of the franchise companies, refinancing granted partly in foreign currency

2) Launch of the euro in Slovakia as of Jan. 1, 2009

3) Foreign currencies relevant only in credit and deposit portfolios of GRENKE BANK AG

2.5 General Accounting Policies

2.5.1 Leases

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. there 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; or
• d. there is a substantial change to the asset.

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 purchase 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.

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 terms 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.

2.5.2 Cash on hand and balances with banks

The cash on hand and balances with banks item in the balance sheet comprises cash on hand, bank balances and balances at central banks. Current account liabilities are deducted from cash on hand and balances with banks for the cash flow statement.

2.5.3 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 on 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 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.

Financial assets are designated to the measurement 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 derivatives 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 and 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 refinancing 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 deposit business are also recognised at nominal value plus deferred interest components. Interest expenses are shown as expenses from interest on deposits business in net interest income.

Liabilities from refinancing 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 fixedinterest 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 refinancing.

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.

2.5.4 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 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.

2.5.5 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.

2.5.6 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 estimated economic lives:

Office buildings	33 years
Operating and office equipment
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 for property, plant and equipment 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.

2.5.7 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 scheduled 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.

2.5.8 Intangible assets

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.

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.

Dealer Network/Customer Base

With the acquisition in fiscal 2008 of GRENKELEASING Sp.z o.o, Poznan, Poland and of Grenke Leasing Ltd., Guildford, UK, GRENKELEASING 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 six years. The initial measurement 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.

The customer relationships from the acquisition of GRENKE BANK AG in 2009 provisionally measured at EUR 656k will be written off over an expected useful life of five years. Initial measurement was by way of forecasting and discounting future cash flows.

2.5.9 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 cashgenerating unit to which the asset belongs.

The carrying amounts of goodwill are reviewed to assess the probability of continuing future benefits in accordance with the rules described in note 2.5.7. 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, reversal of which is expressly prohibited.

2.5.10 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.

2.5.11 Pensions and Other Post-Employment Benefits

Defined benefit plans relate to benefits after the end of employment and are based on direct benefit commitments for which the amount of the benefit is determined and dependent on factors such as age, remuneration and time employed. The provision recognised in the balance sheet for defined benefit plans is the present value of the defined benefit obligation on the balance sheet date less the fair value of any plan assets, adjusted for unrecognised past service cost. The unrecognised past service cost will be recognised on a straight-line basis over the average period until the entitlements become vested.

The present value of the defined benefit obligation is calculated annually by an independent actuarial expert using the projected unit credit method by discounting forecast future cash outflows with the interest rate of industrial bonds of excellent credit standing. The industrial bonds are denominated in the currency of the payment amounts and their terms match those of the pension obligations. In particular, the calculation also takes into account a current market rate of interest and forecasts of future salary and pension increases in addition to biometric assumptions.

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. There are also defined benefit pension plans for employees of GRENKE BANK AG acquired in the year under review that left the company as of or on the reporting date. These benefits are not financed by funds. The underlying pension plans are for both final salary and flat salary pension plans. Actuarial gains and losses are recognised in 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. 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.

2.5.12 Taxes

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 are used which are applicable as of 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

Leasing and factoring companies are considered as financial service institutions as defined by Sec. 1 (1a) 2 numbers 9 and 10 of the German Banking Act [Kreditwesengesetz (KWG)]. The companies were thus on the one hand included in the so-called commercial trade tax banking privilege from 2008 under Sec. 19 of the Trade Tax Implementation Regulations [Gewerbesteuer-Durchführungsverordnung (GewStDV)], and on the other hand they have been subject to regulation by the German Federal Office for Supervision of Financial Services (BaFin) and by Deutsche Bundesbank since the 2009 Annual Tax Act came into effect on December 25, 2008.

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. The Federal Ministry of Finance issued a statement on November 27, 2009 to clarify issues of interpretation. In line with the findings of the supreme financial authorities on the interpretation of the exclusivity rule, auxiliary and additional transactions accompanying financial services are not a violation of the exclusivity rule. Such transactions occur when they are essential to the performance of the respective financial services. According to the transition regulations contained in the written statement by the Federal Ministry of Finance, companies that offered transactions other than factoring and finance leases before December 24, 2008 will only be affected by the exclusivity rule for the first time for the 2011 assessment period.

Together with advisors, we have reviewed the facts intensively and have come to the conclusion that we are fulfilling the requirements of Sec. 19 of the Trade Tax Implementation Regulations. Consequently, we applied Sec. 19 GewStDV in the calculation of the trade income tax provision for the German Group companies GRENKELEASING AG, GRENKE Investitionen und Verwaltungs KGaA and GRENKEFACTORING GmbH for the 2009 assessment period.

2.5.13 Revenue Recognition

Income from Leasing

Please see the information in note 2.5.1.

Income from insurance business

Income from insurance business comprises premiums for insurance policies in lease business, 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 and similar income from financing business are recognised when interest or similar fees (e.g. factoring fees) arise using the effective interest method.

2.5.14 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 an analysis of its contractual conditions, the Group as lessor has come to the conclusion that during the basic lease term all relevant opportunities and risks related to the ownership of a lease asset are transferred to the lessee in almost all leases. This means that these leases are shown entirely as finance leases.

Asset-backed Commercial Paper Programmes ("ABCP Programmes")

The Group uses various ABCP programmes for refinancing. If these are special purpose entities established by various banks that purchase lease receivables from GRENKELEASING Group companies, bundle them and then issue short-term commercial papers for their own refinancing, they are not included in the consolidated group. 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 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 the above 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.

2.5.15 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 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. Depending on country and currency, average costs of equity of between 6.4 percent and 10.7 percent (previous year: 9.2 percent) were used to discount 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. Non-guaranteed residual values are used to calculate lease receivables in accordance with the definition in IAS 17. Estimated residual values comprise anticipated sales proceeds and any revenues generated in a renewal period. 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 allocation was broken down further into more detailed maturity groups on account of the increase in forecastability in the statistical population.

For additions from 2007 to 2008, the residual values range between 7.7 and 28.4 percent of historical cost depending on the term of the lease. Residual values of between 6.5 percent and 28.4 percent were used for additions in 2009. 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. 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 6.6 percent and 22.8 percent of the historical cost (previous year: between 6.5 percent and 22.4 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 SELECTED NOTES ON THE INCOME STATEMENT

3.1 Net Interest Income

3.1.1 Interest and Similar Income from Financing Business

Interest and similar income from financing business break down as follows:

EURk	2009	2008
Net interest income from leasing business	109,883	108,118
Interest income from the bank's lending business	935	0
Interest and similar income from factoring business	291	0
Interest income from the refinancing of franchisees	3,457	2,532
Total	114,566	110,650

3.1.2 Expenses from Interest on Refinancing and Deposit Business

Interest expenses from refinancing and deposit business liabilities amounted to EUR 42,785k (previous year: EUR 42,606k). Deposit business interest for 2009 amounted to EUR 1,647k. This item also includes the interest income of EUR 1,954k (previous year: EUR 2,532k) generated by the loans issued under the ABCP programmes and the ABS bond (asset-backed securities) (see notes 4.3 and 4.4).

3.2 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	2009	2008
Derecognition of and net addition to flat-rate specific bad debt allowances	31,147	18,943
Income from settlement of claims	37,554	23,257
Expenses from the derecognition of performing lease receivables	37,517	24,424
Allowance for losses on the bank's loans and advances	-18	0
Allowance for losses in factoring business	97	0
Total	31,189	20,110

3.3 Profit from insurance business

Revenues and expenses from insurance business for leasing business are as follows:

EURk	2009	2008
Income from insurance business	22,177	21,778
Expenses from insurance business	1,876	1,627
Profit from insurance business	20,301	20,151

3.4 Profit from new business

Revenues from new contracted lease business are comprised as follows:

EURk	2009	2008
Recognition of new lease receivables	445,503	539,615
Share of revenues from leasing downpayments	2,495	3,309
Revenues from processing fees	1,626	1,845
Revenues from special lease payments	1,615	2,618
Total	451,239	547,387

Expenses for new contracted lease business are comprised as follows:

EURk	2009	2008
Cost of newly acquired leased assets	420,284	512,800
Commissions paid to dealers	7,908	10,260
Total	428,192	523,060
Profit from new business	23,047	24,327

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. As almost all contracted lease contracts provide for full cost recovery, the total of expected cash flows is equal to or greater than cost. Related costs are capitalised when the contract is concluded.

3.5 Profit from Disposals

EURk	2009	2008
Revenues from subsequent leases	20,919	17,112
Depreciation of leased assets in the subsequent lease period	-18,905	-14,671
Accounting losses from the disposal of the lease receivables	-2,326	175
Total	-312	2,266

Revenues from subsequent leases relate to lease income recognised after the end of the basic term of the respective lease. 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.

3.6 Personnel Expenses

The average number of staff during the fiscal year totalled 507 (previous year: 482). On average, 19 employees related to the companies acquired in the 2009 fiscal year. Part-time staff were converted into full-time equivalents.

EURk	2009	2008
Salaries	24,609	23,141
Social security and other benefit costs	4,697	4,287
Total	29,306	27,428

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 2009, they came to EUR 1,077k (previous year: EUR 1,113k) and mainly comprised contributions to the statutory pension insurance scheme in Germany. A total net pension expense of EUR 127k (previous year: EUR 56k) was recognised for existing pension plans in personnel expenses in the fiscal year 2009. EUR 300k relating to the phantom stock programme was also recognised as personnel expenses (see note 8.4).

3.7 Depreciation and Amortisation

EURk	2009	2008
Operating and office equipment	1,448	1,291
Office buildings	476	476
Other intangible assets	977	1,002
Total	2,901	2,769

As in the previous year, no impairment expenses were incurred in the fiscal year.

3.8 Selling and Administration Expenses (excl. Personnel Expenses)

Selling and administrative expenses break down into the following categories:

EURk	2009	2008
Operating expenses	8,121	6,654
Administrative expenses	3,541	2,862
Consulting and Audit Fees	3,693	2,411
Distribution costs (without commissions)	3,894	4,205
Other taxes	869	955
Total selling and administrative expenses (excl. personnel expenses)	20,118	17,087

Consulting and Audit Fees

The consulting and audit fees of EUR 3,693k (previous year: EUR 2,411k) include fees (and expenses) for the auditor of GRENKELEASING AG totalling EUR 539k (previous year: EUR 391k). The auditor's fees in fiscal year 2009 break down as follows:

EURk	2009	2008
Audits of financial statements	344	271
Other assurance or valuation services	117	98
Other services	78	22
Total	539	391

EUR 81k of the total fees (previous year: EUR 78k) related to prior periods.

Expenses from Rent and Lease Contracts

Expenses of EUR 4,541k (previous year: EUR 4,497k) 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.

3.9 Other Operating Income

Other operating income breaks down as follows:

EURk	2009	2008
Franchise fees received	686	511
Administration fees received	506	0
Court costs allocated to lessees	77	127
Commission income from banking business	500	0
Collection fees from factoring business	23	0
Currency translation differences recognised in profit and loss	726	0
Other items	879	688
Total	3,397	1,326

3.10 Tax Expenses

EURk	2009	2008
Current taxes	16,256	9,532
Deferred taxes	-7,233	1,996
Total	9,023	11,528

Current taxes include income relating to previous years of EUR 182k. In 2008, total expenses of EUR 114k were included in the current taxes.

GRENKELEASING applied the commercial tax bank privilege for the 2008 assessment period (see note 2.5.12). In comparison to nonapplication, this resulted in a EUR 431k (previous year: 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 in the previous year for the first time.

Statement of Reconciliation from the Average Effective Tax Rate and the Expected Tax Rate

The reconciliation of the expected applicable tax rate of GRENKELEASING AG to the effective tax rate based on EBT (100 percent) is as follows:

	Applicable tax rate	2009	2008
	Trade tax			14.19%	14.19%
	Corporate income tax			15.00%	15.00%
Solidarity surcharge (5.5 percent of corporate income tax)				0.83%	0.83%
	Average expected tax rate GRENKELEASING AG	30.02%	30.02%
	Tax increases due to non-deductible expenses			0.19%	0.12%
Changes due to foreign taxes			-3.22%	-2.08%
Balance of tax reductions and increases due to changes in tax rates 1)				-0.19%	-1.13%
Utilisation of non-capitalised loss carryforwards				-0.16%	0.00%
	Reversal of deferred trade tax (Sec. 19 of the Trade Tax Implementation Regulations)			0.00%	-1.38%
	Back payments and tax rebates from previous years 2)			-0.54%	0.26%
Other			0.73%	0.00%
	Average effective tax rate for the Group			26.83%	25.81%
1)	Essentially the following change arose in the tax rates used to calculate deferred taxes:
	GRENKELEASING AG Zurich/Switzerland	Tax rate 2009	23.45%	(previous year 24.81%)

GRENKELEASING AG Zurich/Switzerland	Tax rate 2009	23.45%	(previous year 24.81%)
GRENKELEASING s.r.o. Prague/Czech Republic	Tax rate 2009	20.00%	(previous year 24.00%)
	Tax rate 2010	19.00%
GRENKE SERVICE AG	Tax rate 2009	29.13%	(previous year 30.02%)

2) Tax rebates for prior years in 2009 amounted to EUR 183k (previous year: backpayments of tax from previous years EUR 114k).

3.11 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 2009 was calculated as the number of ordinary shares and the proportionate number of ordinary shares that may be issued in exchange for warrants. As in the previous year, there was no dilutive effect in fiscal year 2009. Earnings per share came in at EUR 1.80 for the year under review (previous year: EUR 2.42).

No.	2009	2008
Shares outstanding at beginning of period	13,684,099	13,684,099
Average number of new shares issued under the stock option programme	0	0
Average number of shares outstanding at end of period (basic)	13,684,099	13,684,099
Average number of shares outstanding at end of period (diluted)	13,684,099	13,684,099
Shares outstanding at end of period	13,684,099	13,684,099

4 SELECTED NOTES ON THE BALANCE SHEET

4.1 Cash and cash equivalents

EURk	Dec. 31, 2009	Dec. 31, 2008
Cash in hand	38	6
Balances at central banks	26,826	0
Bank balances	83,001	77,006
Total	109,865	77,012

4.2 Financial instruments with positive fair value

As in the previous year, financial instruments with positive fair values of EUR 2,023k (previous year: EUR 7,093k) relate solely to nonhedge derivatives, which are mainly interest rate caps and foreign currency forwards. Details of interest and currency derivatives can be found under note 5.2.

4.3 Lease receivables

EURk	Dec. 31, 2009	Dec. 31, 2008
Outstanding minimum lease payments	1,070,360	1,089,135
+ Non-guaranteed residual values	152,905	158,934
Gross investment	1,223,265	1,248,069
– Unrealised (outstanding) finance income	174,715	183,242
Net investment	1,048,550	1,064,827
– Present value of non-guaranteed residual values	114,781	118,334
Present value of minimum lease payments	933,769	946,493

EURk	Less than 1 year	1 to 5 years	More than 5 years
Gross total investment	460,279	757,727	5,259
Gross total investment (previous year)	454,981	785,791	7,297
Present value of outstanding minimum lease payments	332,157	598,586	3,026
Present value of outstanding minimum lease payments (previous year)	320,417	621,874	4,202

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:

EURk	Dec. 31, 2009	Dec. 31, 2008
Changes in performing lease receivables
Balance at beginning of period	1,064,827	930,195
+ Change during the period	-16,277	134,632
Lease receivables (current + non-current) from current contracts at end of period	1,048,550	1,064,827
Changes in non-performing lease receivables
Gross receivables at beginning of period	151,667	139,435
- Accumulated valuation allowances at beginning of period	-73,276	-69,572
= Non-performing lease receivables at beginning of period	78,391	69,863
+ Change in gross receivables during the period	40,119	27,514
- Disposals of gross receivables during the period	22,397	15,283
+ Disposal of accumulated valuation allowances during the period	13,201	11,001
- Addition of accumulated valuation allowances during the period*	22,985	14,704
Non-performing lease receivables at end of period	86,329	78,391
Lease receivables (carrying amounts of current and non-current receivables) at beginning of period	1,143,218	1,000,058
Lease receivables (carrying amounts of current and non-current receivables) at end of period	1,134,879	1,143,218

* Item contains exchange differences of EUR 100k (previous year: EUR 200k).

	Present value of minimum	Present value of residual	Other receivables from
EURk	lease payments	values	lessees	Carrying amount
2008
Current lease receivables	320,417	40,060	78,391	438,868
Non-current lease receivables	626,076	78,274	0	704,350
Total (previous year)	946,493	118,334	78,391	1,143,218
2009
Current lease receivables	332,157	40,829	86,329	459,315
Non-current lease receivables	601,612	73,952	0	675,564
Total (2009)	933,769	114,781	86,329	1,134,879

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

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

				Overdue on the balance sheet date in the following time bands
		thereof overdue on the	Receivables subject to bad debt
Lease receivables	Net carrying	balance sheet	allowances on the		Between 91	Between 181	Between 1 and
EUR million	amount	date	balance sheet date	< 90 days	and 180 days	and 360 days	5 years	> 5 years
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
As of Dec. 31, 2009
Not impaired	10.7			8.9	0.7	0.5	0.6	0.0
Impaired	75.6	158.6	83.0	9.5	11.1	18.8	66.2	53.0
Total	86.3	158.6	83.0	18.4	11.8	19.3	66.8	53.0

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, 2009, 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 highly 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 valuation allowances on current and non-current receivables.

EUR million	Dec. 31, 2009	Dec. 31, 2008
Valuation allowances as of the beginning of the fiscal year	73.3	69.6
Allocation to specific bad debt allowance	23.0	14.9
Utilisation of specific bad debt allowance	9.0	3.8
Reversal of specific bad debt allowance	4.2	7.2
Currency translation differences	-0.1	-0.2
Valuation allowances as of the end of the fiscal year	83.0	73.3

4.4 Other financial assets

EURk	Dec. 31, 2009	Dec. 31, 2008
Other current financial assets
Receivables from franchisees (refinancing)	25,061	30,475
ABCP loans*	34,015	0
Current portion of subordinated loan for ABS bond	651	1,363
Reserve accounts for ABS bond	2,500	0
Instalments collected at end of month	615	209
Loans (bank)	3,379	0
Receivables from refinancers	867	0
Receivables from factoring business	1,733	0
Total other current financial assets	68,821	32,047
Other non-current financial assets
ABCP loans*	32,950	64,844
Receivables from franchisees (refinancing)	42,876	21,310
Subordinated loan for ABS bond	0	706
Reserve accounts for ABS bond	0	2,500
Loans (bank)	6,789	0
Total other non-current financial assets	82,615	89,360
Total financial assets	151,436	121,407

* This item was reported in full as a non-current asset in the previous year.

Receivables from franchisees (see also note 2.5.3) include receivables resulting from the refinancing for leases concluded by franchise operators. By way of security for the loan receivables or in forfaiting agreements, the franchisees have assigned both title to the leased assets and the claim to lease receivables. Accordingly, interest income generated in this context of EUR 3,457k (see also note 3.1.1) is reported as interest income under net interest income. Refinancing granted in foreign currencies is translated using the closing rate. None of the receivables are overdue or impaired.

In addition, EUR 3,074k (previous year: NOK 25,513k) related to a loan receivable with a term until December 31, 2011 from the company in Norway. The shareholder of the debtor has provided a letter of comfort for this receivable dated January 8, 2010.

In addition to the liquidity reserve of between 8.0 percent and 30 percent, depending on country of origin and vehicle utilised, based on 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 are based on the refinancing volume and 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. None of the receivables are overdue or impaired.

In connection with the issue of the ABS bond, GRENKE FINANCE Plc. Dublin, Ireland, originally 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. The total amount of EUR 651k was classified as current due to the expected pattern of repayment (see note 4.12.1). In addition, GRENKE FINANCE Plc. was required to set up interest-bearing reserve accounts totalling EUR 2,500k. The assets shown are not overdue nor considered to be impaired.

As of the reporting date, the receivables from the lending business of GRENKE BANK AG acquired at the start of 2009 had a volume of EUR 10,168k. Interest income is recognised as such under net interest income.

Owing to GRENKE FACTORING GmbH acquired in August, the Group reported total receivables from factoring business as of December 31, 2009 of EUR 1,733k. The factoring fees and income similar to interest generated in rendering factoring services are reported as similar income under net interest income.

4.5 Trade receivables

Trade receivables of EUR 3,046k (previous year: EUR 5,955k) mainly relate to receivables from resellers and third parties resulting from the disposal of lease assets. EUR 1,367k (previous year: EUR 850k) of these receivables are overdue and EUR 1,124k (previous year: EUR 491k) of this amount is impaired.

Trade receivables include other receivables from franchisees of EUR 1,531k (previous year: EUR 3,513k).

4.6 Tax Receivables

EURk	Dec. 31, 2009	Dec. 31, 2008
Corporate income tax receivables	314	4,485
Trade tax receivables	59	502
Other items	465	224
Total	838	5,211

The corporate income tax and trade tax receivables are the result of prepayments being too high.

4.7 Other Current Assets

EURk	Dec. 31, 2009	Dec. 31, 2008
VAT receivable	19,455	17,237
Prepaid expenses	732	519
Other items	1,889	1,193
Total	22,076	18,949

4.8 Property, plant and equipment

4.8.1 Overview For Fiscal Year 2008

		Operating and office	Assets under	Lease assets from
EURk	Land and buildings	equipment	construction	operating 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

4.8.2 Overview For Fiscal Year 2009

		Operating and office	Assets under	Lease assets from
EURk	Land and buildings	equipment	construction	operating leases	Total
Cost
Jan. 1, 2009	16,623	11,158	0	16,923	44,704
Currency translation differences	0	23	0	28	51
Additions	63	1,743	0	18,752	20,558
Of which additions in the context of an
acquisition	0	950	0	0	950
Disposals	0	296	0	18,905	19,201
Reclassifications	0	0	0	0	0
Cost
Dec. 31, 2009	16,686	12,628	0	16,798	46,112
Accumulated depreciation
Dec. 31, 2009	2,279	6,711	0	0	8,990
Currency translation differences	0	14	0	0	14
Additions	476	1,448	0	18,905	20,866
Disposals	0	210	0	18,905	19,152
Reclassifications	0	0	0	0	0
Accumulated depreciation
Dec. 31, 2009	2,755	7,963	0	0	10,718
Net carrying amounts Dec. 31, 2009	13,931	4,665	0	16,798	35,394

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 3.5).

4.9 Goodwill

EURk	2009	2008
Acquisition cost as of Jan. 1	8,239	2,157
Currency translation differences	191	-1,216
Additions in the context of an acquisition	2,748	7,298
Disposals	0	0
Acquisition cost as of Dec. 31	11,178	8,239
Accumulated depreciation as of Jan. 1	0	0
Currency translation differences	0	0
Additions	0	0
Disposals	0	0
Accumulated depreciation as of Dec. 31	0	0
Net carrying amounts Dec. 31, 2009	11,178
Net carrying amounts Jan. 1, 2009	8,239
Net carrying amounts Dec. 31, 2008		8,239
Net carrying amounts Jan. 1, 2008		2,157

4.9.1 Goodwill Impairment

The goodwill acquired in business combinations was tested for impairment on the basis of the 2009 half-year figures as of September 30, 2009 in accordance with IAS 36. 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 euro discount factors of 6.4 percent. Discounting factors are calculated based on the CAPM (capital asset pricing model), taking into account a risk-free euro interest rate of 3.2 percent (previous year: 3.2 percent) and a beta factor of 0.63 (previous year: 0.75 ). Overall, there are country- and currency-specific discount rates of between 6.4 percent and 10.7 percent.

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, 2009	Dec. 31, 2008
GRENKE SERVICE AG, Baden-Baden	379	379
GRENKELEASING s.r.o., Prague/Czech Republic	1,281	1,270
GRENKE LEASING S.r.l. and GRENKE Locazione S.r.l., Milan/Italy	504	504
Grenke Leasing Ltd., Guildford/UK	1,909	1,779
GRENKELEASING Sp.z o.o, Poznan/Poland	4,357	4,307
GRENKE BANK AG*, Hamburg	592	0
GRENKEFACTORING GmbH*, Baden-Baden	2,156	0
Total	11,178	8,239

* The calculation of goodwill is still provisional as purchase price allocation had not been finalised as of the reporting date (see note 6.1).

4.9.2 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 and growth rates of new business – the key determinants used for the discounted cash flow modelling. In this context, the management is of the opinion that realistic changes to the assumptions used for implementing impairment tests within the Group do not result in any impairment.

The changes arising in parameters since the routine impairment test on September 30, 2009 on the basis of the six-month figures and the reporting date do not affect the impairment of the individual cash-generating units.

4.10 Other Intangible Assets

4.10.1 Overview For Fiscal Year 2008

EURk	Development costs	Software licenses	Dealer network	Total
Acquisition 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
Acquisition cost Dec. 31, 2008	820	2,260	1,626	4,706
Accumulated amortisation 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 amortisation Dec. 31, 2008	651	1,488	271	2,410
Net carrying amounts Dec. 31, 2008	169	772	1,355	2,296

4.10.2 Overview For Fiscal Year 2009

EURk	Development costs	Software licenses	Dealer network	Total
Acquisition cost Jan. 1, 2009	820	2,260	1,626	4,706
Currency translation differences	0	0	48	48
Additions	0	215	656	871
Disposals	619	1	0	620
Additions of subsidiaries	0	110	0	110
Reclassifications	0	0	0	0
Acquisition cost Dec. 31, 2009	201	2,584	2,330	5,115
Accumulated amortisation Jan. 1, 2009	651	1,488	271	2,410
Currency translation differences	0	0	19	19
Additions	125	474	378	977
Disposals	619	5	0	624
Reclassifications	0	0	0	0
Accumulated amortisation Dec. 31, 2009	157	1,957	668	2,782
Net carrying amounts Dec. 31, 2009	44	627	1,662	2,333

Development costs mainly relate to internally developed factoring software and webshop programming. Additions to the dealer network relate solely to the acquisitions concluded in 2008 and 2009.

4.11 Deferred Tax Assets And Liabilities

Deferred tax assets and liabilities break down as follows:

	Balance sheet	Income statement
EURk	Dec. 31, 2009	Dec. 31, 2008	2009	2008
Deferred tax assets
Tax loss carryforwards	11,034	11,599	1,107	-150
Remeasurement of lease liabilities	2,024	5,302	3,207	-155
Remeasurement of lease receivables	2,124		-2,124
Pensions	113	21	0	0
Other remeasurements (derivatives)	262	520	0	0
Total	15,557	17,442	2,190	-305
Deferred tax liabilities
Remeasurement of lease receivables	35,120	47,199	-12,314	2,814
Remeasurement of lease liabilities	3,424		3,424
Other remeasurements	36	569	-533	-513
Total	38,580	47,768	-9,423	2,301
Deferred tax liabilities/(assets)			-7,233	1,996
Net deferred tax liabilities	23,023	30,326	-
Reported on the balance sheet as follows:
Deferred tax assets	15,557	17,442
Deferred tax liabilities	38,580	47,768

A total of EUR 2,123k of deferred taxes on loss carryforwards relates to the subsidiaries in the UK, Belgium and Sweden and the acquired GRENKEFACTORING GmbH. At these companies, deferred tax assets on loss carryforwards exceed deferred tax liabilities for temporary differences by a total of EUR 1,274k. 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. At the Danish company, the deferred tax assets on tax loss carryforwards were limited to EUR 161k (previous year: EUR 107k) to match the deferred tax liabilities.

Deferred tax assets of EUR 176k were reversed directly in equity in the fiscal year (previous year: reversal of deferred tax liabilities recognized EUR 655k). These liabilities resulted from the cash flow hedge reserve recognised directly in equity. Deferred tax assets of EUR 85k (previous year: EUR 1k) 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. As both GRENKELEASING AG and the relevant subsidiaries are corporations, these differences are largely tax-free upon realisation in line with Sec. 8b of the Corporate Tax Act and are therefore of a permanent nature.

Also in the case of any temporary differences (e.g. those resulting from the 5 percent global calculation in Sec. 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 will reverse in the foreseeable future. As this reversal is currently only expected in relation to a partial amount for the subsidiary in Switzerland, only deferred taxes amounting to EUR 23k (previous year: EUR 26k) were included in the balance sheet. No deferrals were recognised for the remaining differences of EUR 564k (previous year: EUR 1,798k).

The German Health Insurance Relief Act of July 16, 2009 was published in the Federal Law Gazette on July 22, 2009. The tax relief measures it contains to combat the financial and economic crisis include a temporary redevelopment privilege that eases the loss deduction restriction of Sec. 8c of the Corporation Tax Act (KStG) for certain cases. Under this privilege, an equity investment acquired after December 31, 2007 and before January 1, 2010 does not affect the restriction on loss utilisation of Sec. 8c (1) KStG if acquired for the purpose of the redevelopment of the operations of the loss-making company. An eligible redevelopment is defined as a measure intended to prevent or eliminate insolvency or overextension while at the same time retaining the essential operating structures.

We included a tax asset of EUR 543k (corporation tax: EUR 299k; trade income tax: EUR 244k) as part of the first-time consolidation and purchase price allocation of GRENKEFACTORING GmbH. The necessary retention of essential operating structures was satisfied by the addition of essential operating assets by way of deposits (see note 2.4.1).

4.12 Current And Non-current Bank Liabilities

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

EURk	Dec. 31, 2009	Dec. 31, 2008
Financial liabilities
Current financial liabilities
Liabilities from the refinancing of the leasing business	379,343	441,847
ABS/ABCP liabilities	124,644	178,170
Bonds, revolving facilities, debentures and private placements	226,072	233,117
Sales of receivables agreements	28,627	30,560
Current liabilities from deposit business	75,817	0
Current portion of non-current bank liabilities	2,346	4,692
thereof current account liabilities	1,131	3,593
Total current financial liabilities	457,506	446.539
Non-current financial liabilities
Liabilities from the refinancing of the leasing business	601,822	609,218
ABS/ABCP liabilities	189,461	269,957
Bonds, debentures and private placements	383,506	306,043
Sales of receivables agreements	28,855	33,218
Non-current liabilities from deposit business	30,561	0
Non-current bank liabilities	6,516	7,819
Total non-current financial liabilities	638,899	617,037
Total financial liabilities	1,096,405	1,063,576

EURk		Total	1 to 5 years	More than 5 years	Secured amount
Type of liability
Liabilities from the refinancing of the leasing business	2009	601,822	601,173	649	218,316
	(previous year)	609,218	608,090	1,128	303,175
Liabilities from deposit business	2009	30,561	30,561	0	0
	(previous year)	0	0	0	0
Bank liabilities	2009	6,516	4,421	2,095	10,800
	(previous year)	7,819	2,843	4,976	10,800

The volume of non-current bank liabilities payable in one to five years and more was as follows as of December 31, 2009.

The bank liabilities include the non-current portion of a loan totalling CHF 5,052k (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 was secured on December 18, 2002 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 loan has been repaid semi-annually since September 30, 2008. 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.

Bank liabilities also include the liabilities from the utilisation of cash lines (current account liabilities). As of the reporting date these lines had been utilised to the amount of EUR 1,131k (previous year: EUR 3,593k).

The liabilities from deposit business comprise deposits by customers of GRENKE BANK AG. EUR 75,817k of the total current liabilities of EUR 24,286k relate to deposits payable on demand as of the reporting date. Appropriate terms have been arranged for the other deposits consisting of time and fixed-term deposits.

Current and non-current lease receivables totalling EUR 371,587k (previous year: EUR 511,903k) 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. The collateral is then 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:

4.12.1 ABS Bond

The first ABS bond of EUR 250,000 was launched on August 4, 2006 via the SPE GOALS (GRENKE Ongoing Asset Lease Securitization) with a planned term of six years. The interest rate is variable at 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 was EUR 6,973k on the balance sheet date (previous year: EUR 37,622k).

GRENKELEASING does not derecognise the future lease receivables sold as part of the ABS bond. In contrast to the ABCP programmes, 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.

In December 2009, GRENKELEASING applied for the early repayment of the ABS bond, referred to as a clean-up call, as provided for by the terms of the agreement. Given the planned repayment of the volume of EUR 6,973k outstanding as of the reporting date by January 15, 2010, all financial assets and liabilities associated with the ABS bond have been reported under the current portions of their respective items as of the reporting date.

4.12.2 ABCP Programmes

The GRENKELEASING Group has several asset-backed commercial paper programmes (ABCPs) with a total volume of EUR 662,200k as of the reporting date (previous year: EUR 512,200k). The overview of the programmes as of the reporting date is as follows:

ABCP Programme/SPV Initiating bank Refinanceable lease receivables	as of Dec. 31, 2009
Compass Variety Funding Limited WestLB German and Austrian lease receivables	250,000
Kebnekaise Funding Limited SEB AB German and French lease receivables	112,200
CORAL PURCHASING Limited DZ-Bank German and French lease receivables	150,000
Weinberg Capital Limited LBBW German lease receivables	150,000
Total	662,200

At the end of the 2009 fiscal year, 55 percent of the refinancing framework of the ABCP programmes was utilised (previous year: 79 percent). While the SEB, LBBW and DZ-Bank programmes are effectively of a perpetual nature, the WestLB programme runs to May 3, 2010.

An FCT (Fonds Commun de Titrisation á Compartments/French issuer) was created in France by GRENKELEASING in line with the current general conditions for securitisation to purchase French lease receivables via the SPE initiated by DZ-Bank, CORAL PURCHASING Limited, from October 1, 2009. The sole purpose of this FCT is to securitise French lease receivables under the ABCP programme through CORAL PURCHASING Limited.

The SPEs conclude sometimes different interest rate hedges (caps and swaps) to hedge the variable cash flows from the placement of commercial papers under the ABCP programmes. Any costs incurred in this context are recharged to GRENKELEASING. In return, the company participates in the interest rate hedge as the benefit paid to the ABCP programme 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.

There are no currency risks in ABCP refinancing as only euro transactions and euro-based leases are involved. The present value of the programmes was EUR 382,950k as of the balance sheet date (previous year: EUR 410,505k). 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 receivables portfolio sold.

Unlike the sales of receivables described in note 4.12.3, however, the interest rates on the assets and liabilities side do not match because the purchase of the receivables is financed via the ABCP programmes in the commercial paper market. The reference rate for all programmes is one-month EURIBOR, i.e. interest is variable. The programmes' average interest rate in 2009 was 2.03 percent (previous year: 4.58 percent).

GRENKELEASING does not derecognise the future lease receivables sold as part of the ABCP programmes. 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 programmes or ABS bond in its consolidated financial statements. There is no off-balance sheet recognition (see note 2.5.14).

Nevertheless, the FCT founded by GRENKELEASING as part of the transaction involving French lease receivables through the SPE CORAL PURCHASING Limited is fully included in consolidation. The SPE CORAL PURCHASING Limited is not included in consolidation on the basis of the above argument.

4.12.3 Sales of Receivables Agreements

Such agreements are currently in place with Stadtsparkasse Baden-Baden, Sparkasse Karlsruhe, Commerzbank AG, UBS AG in Switzerland and with the Commerzbank subsidiary BRE-Bank SA in Poland. The agreements with Commerzbank AG and BRE-Bank SA in Poland have been terminated. Repayments are being made in line with the portfolios contracted and new acquisitions are currently not possible. 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 57,482k (previous year: EUR 63,778k).

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.

4.12.4 Bonds, Debentures and Private Placements

Unless mentioned otherwise, the reference interest rate for the floating-rate bonds, promissory notes and private placements is threemonth EURIBOR. The discounts and the initial expenses directly corresponding to the transaction concerned are reversed over the term of the debt securities using the effective interest method.

All debentures are bullet debt securities and are subject to constant rating. If the Standard & Poor's rating were to be downgraded, the agreed interest rate would be contractually adjusted (increased). As a downgrade is not expected, no hedge has been concluded to date.

Debt Issuance Programme

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

					Nominal amount	Nominal amount
		Term	Coupon	Discount	Dec. 31, 2009	Dec. 31, 2008
Description	from	to	Percent p.a.	EURk	EURk	EURk
Euro bond	22.03.2005	22.03.2010	Euribor + 0.60	486	100,000	100,000
Euro bond	20.04.2009	20.04.2011	Euribor + 2.80		10,000	-
			Euribor + 0.75
Euro bond	18.05.2009	04.07.2011	(gradually + 0.50)		11,950	-
Euro bond	13.08.2009	13.08.2012	6.1250	157	100,000	-

At the specified date on April 20, 2009, the Group repaid the fixed-income bond of EUR 100,000k issued in 2006 under the DIP and the floating-rate bond of EUR 25,000k issued in 2007. The repayment was made predominantly from the Group's current cash flow. In addition, a bond of EUR 10,000k was issued on April 20, 2009 as part of the DIP, with a term of two years and a variable coupon with a premium of 2.80 percent.

The bonds due on April 27, 2009 and June 10, 2009 with a total nominal amount of EUR 21,000k were repaid on time.

A floating-rate debenture of EUR 12,050k was issued on May 18, 2009. The initial premium (up until October 4, 2009) for this floatingrate debenture is 0.75 percent, which is stepped up in the subsequent periods and increases by 50 basis points each quarter. In the final interest period from April 4, 2011 to July 4, 2011 the premium over Euribor is 4.25 percent.

The Group issued a bond of EUR 100,000k under the DIP on August 13, 2009. The fixed-income bond with a coupon of 6.125 percent is due on August 13, 2012. The amount of the loan is EUR 99,243k taking into account the arrangement fee.

The bond of EUR 100,000k issued on March 22, 2005 by the Irish subsidiary Grenke Finance Plc. 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.

Promissory Note Loan (PNL)

The general data for the promissory note loans can be seen in the following table:

Description							Nominal amount Nominal amount
			Term	Coupon	Discount	Dec. 31, 2009	Dec. 31, 2008
	Note	from	from	Percent p.a.	EURk	EURk	EURk
Unchanged PNLs
EUR–PNL		06.12.2005	05.12.2010	3.7730	-	20,000	20,000
EUR–PNL		22.12.2005	22.12.2010	Euribor + 0.61	62	17,000	17,000
EUR–PNL		13.09.2007	06.12.2010	5.0920	-	15,000	15,000
EUR–PNL		30.04.2008	30.04.2011	4.6905	-	40,000	40,000
EUR–PNL		30.07.2008	30.07.2011	6.0500	-	14,000	21,000

Description							Nominal amount Nominal amount
			Term	Coupon	Discount	Dec. 31, 2009	Dec. 31, 2008
	Note	from	from	Percent p.a.	EURk	EURk	EURk
Adjustments to PNLs
EUR–PNL	(I)	19.03.2009*	10.03.2014	5.1374	-	10,000	10,000
EUR–PNL	(II)	30.03.2009*	28.03.2013	5.7610	-	10,000	10,000
EUR–PNL	(III)	10.03.2008	10.03.2011	4.7190	57	2,500	25,500
EUR–PNL	(IV)	10.03.2008	10.03.2011	Euribor + 0.85	86	35,500	37,500
EUR–PNL	(V)	30.03.2009*	28.03.2013	5.7610	15	10,000	10,000
New PNL issues
EUR–PNL	(a)	10.03.2009	10.03.2014	5.8900	-	10,000	-
EUR–PNL	(b)	10.03.2009	11.03.2013	5.1680	-	4,000	-
EUR–PNL	(c)	30.03.2009	10.03.2014	5.8800	-	14,500	-
EUR–PNL	(d)	25.05.2009	25.05.2012	5.5400	-	26,500	-
EUR–PNL	(e)	15.06.2009	15.06.2013	Euribor + 3.75	-	10,000	-
EUR–PNL	(f)	15.06.2009	15.06.2013	Euribor + 3.75	-	15,000	-

* Date of the extension/interest rate adjustment.

On March 19, 2009, the promissory note loan of EUR 10,000k – table (I) – which was originally due to mature as of August 16, 2010, was extended until March 10, 2014. At the same time, the agreed variable interest rate was changed to a fixed interest rate, with a fixed coupon of 5.1374 percent valid as of March 19, 2009.

On March 30, 2009, the repayment date for the promissory note loan of October 25, 2007 – table (II) – which was originally due to mature on October 25, 2010 and had a fixed interest rate of 5.09 percent, was extended until March 28, 2013 and a new fixed interest rate of 5.761 percent was agreed.

The promissory note loan with an original notional amount of EUR 25,500k – table (III) – was adjusted overall in its nominal volume to EUR 2,500k. EUR 7,500k in nominal volume on this loan was repaid on March 10, 2009 and at the same time a new promissory note loan was issued – table (a) – with a volume of EUR 10,000k, a fixed interest rate of 5.89 percent and a term ending on March 10, 2014. In addition, on March 30, 2009, EUR 14,500k was issued as a new promissory note loan – table (c) – with a fixed interest rate of 5.88 percent and maturity on March 10, 2014 and the nominal volume of EUR 1,000k was also repaid on March 30, 2009. The discount on the original promissory note loan with an initial value of EUR 57k is recognised in profit or loss at the amount of EUR 37k as a result of adjustments in the first quarter of 2009.

The promissory note loan – table (IV) – with an initial volume of EUR 37,500k still has a nominal volume of EUR 35,500k on the balance sheet date. EUR 2,000k of this promissory note loan was repaid on March 10, 2009 and at the same time a new promissory note loan of EUR 4,000k was contracted – table (b) – with the redemption date on March 11, 2013. The newly issued promissory note loan has a fixed interest rate of 5.168 percent. The reversal of the discount related to the original issue, with an initial value of EUR 86k, was recognised in full in profit or loss at the amount of EUR 56k for the first quarter of 2009.

On March 30, 2009, the redemption date for the promissory note loan – table (V) – which was originally due to mature on April 30, 2011 was extended until March 28, 2013. In this context, the fixed interest rate of 5.21 percent was changed to 5.761 percent for this term. The discount on the issue, initially totalling EUR 15k, was recognised as an expense with its residual carrying value at EUR 10k.

On May 25, 2009, a new promissory note loan was issued – table (d) – with a nominal volume of EUR 26,500k. It has a fixed interest rate of 5.54 percent over its entire term of three years.

Two floating-rate promissory note loans – table (e) and (f) – were issued by GRENKELEASING AG on June 15, 2009, with a nominal volume of EUR 10,000k and EUR 15,000k. They each have a term of four years and a premium of 3.75 percent on the Euribor-based variable interest rate, which may rise up to 4.75 percent depending on the issuer's rating. At the same time, an issue of EUR 10,000k was contracted for March 24, 2010. This future issue has identical parameters to those of the two issues mentioned above, i.e. it matures on June 15, 2013 and its Euribor-based interest rate has a current premium of 3.75 percent. The loan is used to refinance the bond from the debt issuance programme, which matures in March 2010.

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 by the Irish subsidiary Grenke Finance Plc. 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.

4.12.5 Loan Agreement

On June 29, 2009, GRENKELEASING AG's French subsidiary concluded a loan agreement with a nominal volume of EUR 5,000k with the Banque Populaire d'Alsace. The duration of the agreement is from July 1, 2009 to July 1, 2011, over which period the utilisation of the loan volume can be variably structured. The interest rate on the utilised loan volume amounts to the average of the three-month Euribor, which is calculated on a quarterly basis plus a margin of 1.80 percent. This credit volume had not been utilised as of December 31, 2009.

4.12.6 Revolving Credit Facility

In the context of revolving credit facilities with a total volume of EUR 120,000k available to GRENKE FINANCE Plc., Dublin/Ireland, the Group has the possibility to take on short-term funds with a minimum amount of EUR 5,000k and a term of at least one month at any time. Four of the loan facilities in place since 2006 with a total volume of EUR 120,000k were again prolonged for a further year. The facility with SEB was prolonged until July 2010, while the facility with WestLB was extended to August 2010, the facility with Deutsche Bank until September 2010 and the facility with DZ-Bank was extended to October 2010. The half-year extension of EUR 30,000k granted in February 2009 by Commerzbank expired in August 2009. As of December 31, 2009, these credit lines had been utilised to the amount of a total volume of EUR 60,000k (previous year: EUR 80,000k). Utilisation is disclosed under current liabilities from refinancing of the leasing business.

4.13 Financial Instruments with Negative Fair Value

EURk	Dec. 31, 2009	Dec. 31, 2008
Hedging derivatives as defined by IAS 39	3,715	3,833
Non-hedging derivatives as defined by IAS 39	1,117	1,601
Total	4,832	5,434

The company has reported negative fair values in connection with interest rate swaps (see note 5.2.3) and forward exchange contracts (see 5.2.2) for the current fiscal year.

The forward exchange contracts are disclosed as non-hedging derivatives as defined by IAS 39. As of December 31, 2009, forward exchange contracts on the Swiss franc, Polish zloty, pound sterling, Hungarian forint, Swedish krona, Norwegian krone and Danish krone had a negative fair value of EUR 1,107k (previous year: negative fair value of EUR 1,601k on the Polish zloty, Norwegian krone and Czech koruna). These forward exchange contracts have a total volume of EUR 74,939k (previous year: EUR 64,232k) and residual maturities of between one and 64 months (see note 5.2).

In addition to the forward exchange contracts, non-hedge derivatives as defined under IAS 39 include interest rate swaps of EUR 10k (previous year: EUR 0k).

All other contracted interest rate swaps, which are all included in hedge accounting in line with IAS 39, had a negative fair value of EUR 3,715k as of the reporting date and were in highly effective hedges in line with IAS 39.

4.14 Tax Liabilities

EURk	Dec. 31, 2009	Dec. 31, 2008
Corporate income tax	4,386	1,072
Trade tax	7,135	2,029
Total	11,521	3,101

4.15 Deferred Liabilities

This item mainly relates to deferred liabilities for staff and consulting services.

	Jan. 1	differences	Addition	Utilisation	Reversals	Dec. 31
	EURk	EURk	EURk	EURk	EURk	EURk
2009	2,310	3	5,174	3,188	415	3,884
2008	1,838	-1	2,199	1,702	24	2,310

All deferred liabilities are current.

4.16 Pensions

The provision for pensions relates to compulsory funded retirement benefit plans (endowment insurance) in Switzerland obliging companies to make additional contributions for GRENKELEASING AG, Zurich, and the pension obligations from final salary and flat salary pension plans in Germany for GRENKE BANK AG, Hamburg.

A total net pension expense of EUR 127k (previous year: EUR 56k) was recognised for existing pension plans in personnel expenses in the fiscal year 2009.

4.16.1 Pensions in Germany

The pension obligations of GRENKE BANK AG relate to direct and vesting pension commitments made in the past exclusively for former employees. The accounting provisions for defined benefit plans are applied to these commitments.

The pension provisions were calculated on the basis of the following parameters:

	Dec. 31, 2009
Discount rate	5.75%
Estimated future salary increases	2.50%
Estimated future pension increases	2.00%
Expected return on plan assets	2.00%

The defined benefit obligation developed as follows:

EURk	2009
Change in defined benefit obligations
Defined benefit obligation at beginning of period	1,153
Interest expense	57
Current service cost	41
Employer contributions	0
Benefits paid	46
Actuarial gains and losses recognised in equity	-32
Currency translation differences from foreign plans	0
Defined benefit obligation at end of period	1,173

The amounts recognised in the balance sheet are calculated as follows:

EURk	2009
Present value of defined benefit obligation	1,205
Unrecognised actuarial gains and losses	-32
Present value of defined benefit obligation	1,173

4.16.2 Pensions in Switzerland

As of January 1, 2009, the present value of the obligation (DBO) under the defined benefit pension plans for Switzerland amounted to EUR 532k (CHF 790k). Minus the fair value of the plan assets of EUR 442k (CHF 656k), the net obligation was EUR 90k (CHF 134k). The external expert opinion is based on the following actuarial assumptions:

	Dec. 31, 2009	Dec. 31, 2008
Discount rate	3.25%	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 percent pension increase as no pensions are currently being paid to employees.

	Dec. 31, 2009	Dec. 31, 2008
Mortality	BVG 2005	EVK 2000
Probability of invalidity	BVG 2005	EVK 2000
Probability of departure	BVG 2005	BVG 2005

On the basis of the actuarial report, the following income and expenses were recognised in fiscal year 2009:

Service cost	EUR 64k	(CHF 96k)
Interest expense	EUR 19k	(CHF 28k)
Income from interest on plan assets	EUR 9k	(CHF 13k)

The service cost is recognised as personnel expenses, while interest expenses and income from interest on plan assets are shown under other interest income or expenses.

As of December 31, 2009, the provision for pensions disclosed under non-current liabilities amounted to EUR 184k (CHF 273k). This amount comprises the present value of the obligation (DBO) of EUR 636k (CHF 943k), the fair value of the plan assets of EUR 452k (CHF 670k) and an actuarial loss of EUR 28k (CHF 43k). The actuarial loss was recognised in equity in a separate line under other reserves in accordance with the revised IAS 19.

EURk (CHFk)	2009	2008	2007	2006	2005
Present value of the obligation (DBO)	636 (943)	532 (790)	373 (618)	268 (431)	221 (343)
Present value of plan assets	452 (670)	442 (656)	285 (471)	207 (333)	193 (300)
Net obligation	184 (273)	90 (134)	88 (147)	61 (98)	28 (43)

Experience adjustments totalled EUR 3k (CHF 4k) to the obligations and EUR -26k (CHF -39k) to assets. Employer contributions in the next period are estimated at EUR 44k (CHF 65k).

EURk	2009	2008
Change in defined benefit obligations
Defined benefit obligation at beginning of period	532	373
Interest expense	19	14
Current service cost	64	51
Employer contributions	29	29
Benefits paid	-12	28
Actuarial gains and losses recognised in equity	3	-11
Currency translation differences from foreign plans	1	48
Defined benefit obligation at end of period	636	532

EURk	2009	2008
Change in plan assets
Fair value of plan assets at beginning of period	442	285
Expected return	9	7
Employer contributions	72	73
Benefits paid	-12	28
Actuarial losses recognised in equity	-26	15
Currency translation differences from foreign plans	-33	34
Fair value of plan assets as of Dec. 31, 2009	452	442

4.17 Other non-current liabilities

The following schedule of liabilities, which primarily comprise security deposit liabilities and deferred income, illustrates how other noncurrent liabilities break down by residual maturities:

EURk	Total	1 to 5 years	More than 5 years	Secured amount
Other non-current liabilities	1,112	1,074	38	0
(previous year)	2,556	2,524	32	0

4.18 Equity

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

The fully paid-in subscribed capital of GRENKELEASING AG amounts to EUR 17,491k (previous year: EUR 17,491k). It is divided into 13,684,099 (previous year: 13,684,099) no par value bearer shares.

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 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 until April 30, 2010. The authorised capital increase can be split into tranches. The shareholders will be granted a subscription right. However, under certain conditions, the Board of Directors is authorised, with the approval of the Supervisory Board, to wholly or partly disapply the right of shareholders to subscribe to capital increases in return for cash contributions.

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

4.18.1 Contingent Capital

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 can be disapplied. 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 subscription rights of shareholders have been disapplied in this case. To date, no options or convertible bonds have been issued from Contingent Capital III.

4.18.2 Authorisation to Acquire Treasury Shares in accordance with 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 can 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 to third parties for cash or non-cash contributions. The shares can 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 way of resolution of the Annual General Meeting of May 8, 2007, May 6, 2008 and May 12, 2009, this authorisation was extended to November 7, 2008, November 5, 2009 and November 11, 2010.

No treasury shares have been purchased to date.

4.18.3 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 subscription rights of shareholders have been disapplied.

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.

4.18.4 Balance Sheet Profit

The Annual General Meeting on May 12, 2009 adopted the resolution on the appropriation of GRENKELEASING AG's profits for fiscal year 2008 of EUR 55,711,683.62. The Annual General Meeting approved the proposal of the Board of Directors and the Supervisory Board, resolving to appropriate the balance sheet profit for 2008 as follows:

Balance sheet profit for 2008	EUR 55,711,683.62
Distribution of a dividend of EUR 0.60 per share for a total of 13,684,099 shares	EUR 8,210,459.40
Appropriation to revenue reserves	EUR 45,048,353.78
Profit carryforward (to new account)	EUR 2,452,870.44

The dividend was paid to the shareholders of GRENKELEASING AG on May 13, 2009.

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 balance sheet profit for 2007 as follows:

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

The management will propose the distribution of a dividend of EUR 0.60 per share for the fiscal year 2009 to the Annual General Meeting. This distribution has not been recognised as a liability as of December 31, 2009.

4.18.5 Reserves

The capital reserves of EUR 60,166k (previous year: 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 programme. On this basis, an amount of EUR 114k was appropriated 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. By way of resolution of the Annual General Meeting on May 12, 2009, EUR 45,048,353.78 of GRENKELEASING AG was appropriated to the revenue reserves.

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 614k (previous year: EUR -5,234k) plus deferred taxes of EUR -176k (previous year: EUR 655k).

As a result of the recognition of pension provisions in accordance with IAS 19, an amount of EUR -131k (previous year: EUR -5k) 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 of EUR 85k; (previous year: EUR 1k) were also recognised in equity.

Deferred taxes were also recognised in equity for the pensions of GRENKE BANK AG on the difference between the DBO and the amounts permitted under tax law to the extent that these related to amounts recognised in equity.

5 DISCLOSURES ON FINANCIAL INSTRUMENTS

5.1 Additional Information on Financial Instruments

					Carrying amount in accordance with
					IAS 17
L&R	77,012			77,012
FVPL/n.a.	7,093		7,093
L&R/n.a.	1,143,218			78,391	1,064,827
L&R	5,955			5,955
L&R	121,407			121,407
L&R				282,765
FVPL/n.a.			7,093
OL	1,051,065			1,051,065
OL	8,466			8,466
OL	12,512			12,512
FVPL/n.a.	5,434	3,833	1,601
OL				1,072,043
FVPL/n.a.		3,833	1,601
	Measurement category	Carrying amount Dec. 31, 2008	Fair value in equity	Fair value through profit or loss	Carrying amount in accordance with IAS 39 Amortised cost

Abbreviations:

FVPL Financial assets and liabilities measured at fair value through profit and loss

L&R: Loans and receivables

n.a. Not applicable

OL Other liabilities

		From	Currency	Valuation
Net gains and losses Dec. 31, 2008 (EURk)	From interest	dividends	translation	allowance	From disposal	Net earnings
Loans and receivables	830	0	-7,420	-6,681	-14,997	-28,268
At fair value through profit and loss	72		5,554			5,626
Other liabilities	-769		-431			-1,200

						Carrying amount
				Carrying amount in accordance		in accordance
				with IAS 39		with IAS 17
Dec. 31, 2009	Measurement	Carrying amount	Fair value in	Fair value through
EURk	category	Dec. 31, 2009	equity	profit or loss	Amortised cost
Financial instruments with positive market
value
Cash on hand and balances with banks	L&R	109,865			109,865
Financial instruments with positive fair value	FVPL/n.a.	2,023		2,023
Lease receivables	L&R/n.a.	1,134,879			86,329	1,048,550
Trade receivables	L&R	3,046			3,046
Other financial assets	L&R	151,436			151,436
Aggregated categories
	L&R				350,676
	FVPL/n.a.			2,023
Financial liabilities
Liabilities from the refinancing of lease
receivables	OL	981,165			981,165
Liabilities from deposit business	OL	106,378			106,378
Trade payables	OL	5,766			5,766
Bank liabilities	OL	8,862			8,862
Financial instruments with negative fair value	FVPL/n.a.	4,832	3,715	1,117
Aggregated categories
	OL				995,793
	FVPL/n.a.		3,715	1,117

Abbreviations:

FVPL Financial assets and liabilities measured at fair value through profit and loss

L&R: Loans and receivables

n.a. Not applicable

OL Other liabilities

		From	Currency	Valuation
Net gains and losses Dec. 31, 2009 (EURk)	From interest	dividends	translation	allowance	From disposal	Net earnings
Loans and receivables	1,039	0	4,641	-11,920	-21,811	-28,051
At fair value through profit and loss	-63		-4,521		-216	-4,800
Other liabilities	-1,242		6			-1,236

The net gains from lease receivables comprise interest income, profit from new business and profit from disposals and amounted to EUR 137,301k (previous year: EUR 137.243k). 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.

5.2 Derivative Financial Instruments

5.2.1 Financial Risk Strategy

Business Model

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

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. As of each balance sheet date, GRENKELEASING receives a measurement overview or the 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 through Bloomberg.

5.2.2 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 for Hedging 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.

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 5.1). As of the balance sheet date, there were forward exchange contracts with positive and negative fair values, leading to disclosure as assets (see note 4.2) and liabilities (see note 4.13).

As of the balance sheet date, there were forward exchange contracts with a nominal volume of EUR 74,939k (previous year: EUR 64,232k) on the basis of the euro. They break down by currency as follows:

	Nominal volume as of		Maturity of the nominal volume as of Dec. 31, 2009
	Dec. 31, 2008	Dec. 31, 2009	2010	2011	2012		later Hedged average rate
	EURk	EURk	EURk	EURk	EURk	EURk
EUR buying
CZK	4,514	5,818	2,607	1,845	895	470	26.677
GBP	31,813	36,153	16,777	10,483	5,807	3,086	0.8653
CHF 1)	3,657	2,350	1,448	556	200	36	1.4995
HUF	782	2,259	1,045	802	308	77	319.7000
NOK	2,847	5,036	807	4,098	129	0	8.4393
SEK	2,790	6,847	2,789	4,058	0	0	10.6560
DKK	3,021	6,404	3,020	3,383	0	0	7.5198
PLN 2)	6,997	7,618	3,816	2,093	1,152	554	4.2933
EUR selling
PLN 2)	7,811	2,454	2,088	365	0	0	3.4700

1) 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.

2) In the context of the possibility for refinancing in the local currency with BRE-Bank SA in Poland (see note 4.12.3), all outstanding forward exchange contracts, i.e. purchase of EUR, were closed out in fiscal year 2008 with respective counter-transactions, i.e. sale of EUR.

5.2.3 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 for Hedging Interest Rates

Issuing bonds and contracting interest rate swaps are elements of a financing strategy under which GRENKELEASING 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 if the appropriate requirements have been met. As all interest rate derivatives used in hedge accounting have been proven to be virtually 100 percent effective, the changes in fair value in relation to their clean value (excluding accrued interest) were recognised fully in equity except for an amount of EUR 73k (previous year: EUR 0k) for hedge derivatives in line with IAS 39.

Under the ABCP programme with DZ-Bank (CORAL) and LBBW (Weinberg), GRENKELEASING is responsible for interest rate hedging and thus interest rate risk management. 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 programmes. 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 6k on the balance sheet date. The caps are recognised under "Financial instruments with positive market value". Hedge accounting in line with IAS 39 is not used for the interest rate caps.

Notes on Comparative Prior-year Figures

As of January 1, 2008, GRENKELEASING had hedged a total volume of EUR 323m through interest rate swaps. The fixed interest rate of these contracted swaps was between 3.29 percent and 4.60 percent. On December 31, 2008 the contracted volume for interest rate swaps in the Group amounted to EUR 202m, with fixed interest rates of between 2.52 percent and 4.56 percent.

The fixed interest actually paid in the year 2008 was between 3.29 percent and 4.74 percent. The variable side of the swap received by GRENKELEASING to secure floating-rate refinancing was between 2.97 percent and 5.14 percent. A total of 21 swaps were contracted in 2008, with a nominal volume of EUR 135m as of December 31, 2008.

Fiscal Year 2009

A total of six 6 new swaps were contracted in the past fiscal year with a nominal volume of EUR 57m as of December 31, 2009. The fixed interest rate of the new contracted swaps was between 1.38 percent and 2.20 percent. The fixed interest actually paid in 2009 across all existing swaps was between 1.38 percent and 4.22 percent. The variable side of the swaps was in the range of between 0.43 percent and 2.614 percent. The swaps in place at the balance sheet date have a nominal volume of EUR 273m as of December 31, 2009 and contracted fixed interest rates over the relevant maturities of between 1.87 percent and 4.22 percent. The duration of the longest contracted interest rate swap is until April 2012.

Interest rate caps were sold in the fiscal year generating revenue of EUR 158k recognised in profit and loss. In addition, interest rate swaps that no longer met the requirements for hedge accounting were closed out and an expense of EUR 157k was recognised in profit and loss.

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
	2008	2009	2010	2011	2012	2009
	EURk	EURk	EURk	EURk	EURk
Contracted prior to
2008	66,993	216,964	35,000	5,000	0	3.21%
Contracted in 2008	135,000	56,500	62,000	13,500	0	1.89%
Total	201,993	273,464	97,000	18,500	0	2.88%

5.2.4 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 underlying 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 the same as 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 from now on 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 almost 100 percent. For all derivatives in hedge accounting, both the retrospective and the prospective effectiveness of the hedging relationships are confirmed as of the balance sheet date.

The interest rate derivatives not included in hedge accounting in line with the provisions of IAS 39 are effective as hedges for interest rate risks in the opinion of GRENKELEASING and risk management in the Group.

5.3 Fair Value of Financial Instruments

5.3.1 Fair value

All derivative financial instruments, which include interest rate swaps and caps and forward exchange contracts, in the Group on the balance sheet date are recognised at fair value. All other items are not recognised at the fair value (see note 2.5). As per the hierarchy of measurement of financial instruments at the fair value of IAS 39, which is composed of the following:

• Level 1: quoted (unadjusted) prices on active markets for the same type of assets or liabilities,
• Level 2: procedures in which all input parameters, which have a significant effect on the fair value recognized, are directly or indirectly observable,
• Level 3: procedures which use input parameters that have a significant effect on the fair value recognized and are not based on observable market data,

all financial instruments, which are accounted for at the fair value, are assigned to level 2 (see note 2.5.3). There were no reclassifications between the three levels of the measurement hierarchy in the year under review.

5.3.2 Fair value of derivative financial instruments

The interest rate swaps have a total negative fair value of EUR 3,725k on the balance sheet date (previous year: positive fair value of EUR 3,833k). The fair value of the caps recognised in the Group amounts to EUR 6k as of the balance sheet date.

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

EURk	Fair value 2009	Fair value 2008
EUR buying
CZK	90	172
GBP	1,834	5,769
CHF	-81	- 202
HUF	-151	65
NOK	-145	448
SEK	-285	- 19
DKK	-3	- 8
PLN 1) / 2)	-2	562
EUR selling
PLN 1)	-413	- 1,367

1) In the context of the possibility for refinancing in the local currency with BRE-Bank SA in Poland, which is no longer available for new business, (see note 4.12.3), all outstanding forward exchange contracts, i.e. purchase of EUR, were closed out with respective counter-transactions, i.e. sale of EUR.

2) This includes both the closed out positions and the new forwards from ongoing new business.

5.3.3 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, 2009 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 2009	Carrying amount 2009	Fair value 2008	Carrying amount 2008
Lease receivables	1,229,149	1,134,879	1,244,061	1,143,218
Liabilities from refinancing	983,793	981,165	1,045,632	1,051,065

5.4 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 match the amounts shown on the balance sheet as they generally relate to undiscounted cash flows.

As of Dec. 31, 2009

EURk	Due 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	0	233,937	256,504	605,634	322
Liabilities from deposit business	24,286	24,878	26,654	30,561	0
Bank liabilities	1,131	533	897	5,362	1,844
Other liabilities	0	9,508	2,154	1,074	38
Trade payables 1)	0	5,766	0	0	0
Negative fair values from derivative financial
instruments 2)	4,832	0	0	0	0
Total:	30,249	274,622	286,209	642,631	2,204

1) The carrying amounts are categorised according to their individual class of maturity if this is considered possible and appropriate.

2) 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 on demand category as 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, 2008

EURk	Due 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	0	152,018	348,748	638,986	1,363
Liabilities from deposit business	0	0	0	0	0
Bank liabilities	3,627	540	1,597	5,954	1,345
Other liabilities	0	1,366	4,099	2,614	32
Trade payables 1)	0	8,466	0	0	0
Negative fair values from derivative financial
instruments 2)	5,434	0	0	0	0
Total:	9,061	162,390	354,444	647,554	2,740

1) The carrying amounts are categorised according to their individual class of maturity if this is considered possible and appropriate.

2) 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 on demand category as this representation shows the earliest possible outflow of liquidity. The actual duration of a contract may extend to a much longer period.

6 ACQUISITIONS

6.1 Acquisitions in Fiscal Year 2009

Effective February 12, 2009, GRENKELEASING AG acquired all of the shares in the Hamburg-based private bank GRENKE BANK AG, which at that time was still operating as "Hesse Newman & Co. AG". In accordance with the requirements of the purchase agreement, the date of purchase/closing date (date control was obtained) as defined by IFRS 3 was February 25, 2009. On May 7, 2009, the bank changed its name to GRENKE BANK AG by way of entry in the commercial register. In addition, the GRENKELEASING AG Annual General Meeting on May 12, 2009 resolved that a profit transfer agreement will be concluded between GRENKE BANK AG and GRENKELEASING AG.

On August 19, 2009, GRENKELEASING AG acquired 100 percent of GRENKEFACTORING GmbH, which had previously been operating as a franchise. GRENKEFACTORING GmbH operates on the German market as a factoring service provider.

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 GRENKE BANK AG are as follows:

GRENKE BANK AG, Hamburg

EURk	Fair value under IFRSs	Derived IFRS carrying amount
Cash and cash equivalents	39,072	39,072
Loans and advances to customers	18,395	18,395
Equity investments	38	38
Intangible assets (incl. customer base)	705	48
Property, plant and equipment	944	944
Deferred tax assets	22	63
Other assets	542	542
Total assets	59,718	59,102
Liabilities from deposit business	48,038	48,038
Pensions	1,153	1,285
Other provisions	1,277	1,277
Deferred tax liabilities	208	6
Other liabilities	2,362	2,362
Total liabilities	53,038	52,968
Net assets	6,680
Goodwill arising on acquisition	592
Total acquisition cost	7,272

The acquisition cost of the merger with GRENKE BANK AG totalled EUR 7,272k and included costs directly attributable to the business combination.

Acquisition cost	EURk
Purchase price	6,888
Cost directly attributable to the acquisition	384
Total	7,272
Cash outflow on acquisition	EURk
Net cash acquired with the subsidiary	39,072
Cash paid	7,272
Net cash inflow	31,800

In other liabilities, the bank has a subordinated loan with a nominal value of EUR 2,000k. This loan, which was originally given to the bank by the previous shareholder, was acquired at nominal value by GRENKELEASING AG as part of the purchase agreement. As a result of the consolidation of this intra-Group transaction, this loan is not shown in the consolidated balance sheet.

Due to the extraordinary liquidity situation of the acquired bank, cash totalling EUR 31,800k (after deduction of the purchase price paid) flowed to GRENKELEASING as a result of the purchase. The purchase price allocation is provisional in line with IAS 3.62 as all the relevant information for a final purchase price allocation is not yet available. The definitive purchase price will be determined in the first quarter of 2010, and the final risk attribution is being determined for certain areas. Thus, provisional goodwill of EUR 592k was reported as of the balance sheet date.

EUR 656k of the intangible assets provisionally relates to measured customer relationships. This customer base is thus to be written down over a scheduled useful life of five years. The bank's contribution to the net profit for the period before taxes totals a loss of EUR 1,437k, EUR 1,527k of which relates to net interest income for the period of the acquisition up until December 31, 2009. The bank's total net interest income in the current calendar year up to December 31, 2009 amounts to EUR 1,937k.

GRENKEFACTORING GmbH, Baden-Baden

EURk	Fair value under IFRSs	Derived IFRS carrying amount
Cash and cash equivalents	596	596
Trade receivables (factoring)	2,483	2,483
Intangible assets	62	62
Property, plant and equipment	4	4
Deferred tax assets	542	0
Other assets	64	64
Total assets	3,751	3,209
Financial liabilities	5,185	5,185
Trade payables	290	290
Provisions	39	38
Deferred tax liabilities	136	136
Total liabilities	5,650	5,649
Net assets	- 1,899
Goodwill arising on acquisition	2,156
Total acquisition cost	257

The acquisition cost of the merger with GRENKEFACTORING GmbH totalled EUR 257k and included costs directly attributable to the business combination.

Acquisition cost	EURk
Purchase price	250
Cost directly attributable to the acquisition	7
Total	257
Cash outflow on acquisition	EURk
Net cash acquired with the subsidiary	596
Cash paid	257
Net cash inflow	339

The purchase price allocation is provisional in line with IAS 3.62 as all the relevant information for a final purchase price allocation is not yet available. Provisional goodwill of EUR 2,156k was reported as of the balance sheet date.

The factoring company's contribution to the net profit for the period before taxes totals a loss of EUR 395k, of which EUR 253k relates to net interest income for the period from the takeover to December 31, 2009. Total interest income from GRENKEFACTORING GmbH until December 31, 2009 amounts to EUR 606k.

6.2 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 GRENKELEASING.

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

EURk	Fair value under IFRSs	Carrying amount
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
Cash outflow on acquisition	EURk

Net cash acquired with the subsidiary	1,136
Cash paid	7,978
Net cash outflow	6,842
Goodwill of EUR 4,357k was reported as of the balance sheet date (previous year: EUR 4,307k). Deviations from the purchase price

allocation shown and the previous year's reporting date relate solely to currency translation differences.

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 the 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 1,909k was reported as of the balance sheet date (previous year: EUR 1,779k). Deviations from the purchase price allocation shown and the previous year's reporting date relate solely to currency translation differences.

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 a contribution to income on lease receivables of 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 can be measured individually and is expected to generate future economic benefits. The amortisation period is six years based on past operating experience. 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.

7 SEGMENT REPORTING

Since the acquisition of the bank, the Group manages its reportable segments of Leasing Business, Banking Business and Factoring Business on the basis of the available financial information.

7.1 Description of Reportable Segments

Leasing Business

The Leasing Business segment accounts for all activities performed by GRENKELEASING AG and its subsidiaries until the acquisition of GRENKE BANK AG and GRENKEFACTORING GmbH. In managing Leasing Business, the Group essentially focuses on the individual regions and countries. Thus, the Leasing Business segment is a combination of several operative segments defined by countries or groups of countries and the reportable Leasing Business segment.

Banking Business

The Banking Business segment comprises the activities of GRENKE BANK AG, which have mainly focused on the Internet site and the associated sales activities since its acquisition by GRENKELEASING AG. The bank's business focuses mainly on German customers.

Factoring Business

The Factoring segment includes the activities of GRENKEFACTORING GmbH, which performs traditional factoring services in Germany and is a financial services provider.

7.2 Segment data

The accounting policies used to gather segment information are the same as those used for the consolidated financial statements (see note 2.5). Intragroup transactions are performed at standard market prices.

The Board of Directors of GRENKELEASING AG is responsible for assessing the performance of the GRENKELEASING Group. In addition to its new business volume and contribution margin 2, the main performance figures for the Leasing segment are operating segment income, segment results before other net financial income and personnel expenses.

Other net financial income and tax expenses/income are the main components of the consolidated income statement not included in the individual segment information.

The segment information was calculated as follows:

• Operating segment income consists of net interest income after settlement of claims and risk provisioning, profit from insurance business, profit from new business and profit from disposal.
• The segment result is calculated as an operating result before taxes.
• Segment assets are operating assets excluding tax assets.
• Segment liabilities are the liabilities attributable to the respective segment with the exception of tax liabilities.

			Leasing Business segment				Banking Business	Factoring Business	Total	Consoli	Group
							segment	segment	segments	dation
As of Dec. 31, 2008 (EURk)	Germany	France	Switzerland	Italy	Others
	region	region	region	region	region	Total
Operating segment income	50,659	23,698	4,522	3,755	12,044	94,678	0	0	94,678	0	94,678
Personnel expenses	16,724	3,774	1,213	1,152	4,565	27,428			27,428	0	27,428
Segment result	23,856	17,541	2,240	828	159	44,624	0	0	44,624	0	44,624
Reconciliation to consolidated										0
financial statements										0
Operating result									44,624	0	44,624
Net other financial income									47	0	47
Taxes									11,528	0	11,528
Net profit for the period									33,143	0	33,143
Segment assets	720,909	312,671	46,982	51,262		298,683 1,430,507	0		0 1,430,507		0 1,430,507
Reconciliation to consolidated
financial statements
Unallocated items											24,890
Total assets											1,455,397
Segment liabilities	573,496	226,446	27,396	43,588		287,188 1,158,114	0		0 1,158,114		0 1,158,114
Reconciliation to consolidated
financial statements
Unallocated items											50,869
Total liabilities											1,208,983

							Banking Business	Factoring Business	Total	Consoli
			Leasing Business segment				segment	segment	segments	dation	Group
	Germany	France	Switzerland	Italy	Others
As of Dec. 31, 2009 (EURk)	region	region	region	region	region	Total
Operating segment income	39,321	20,618	3,903	5,025	13,328	82,195	1,296	137	83,628	0	83,628
Personnel expenses	16,768	3,754	1,208	1,314	4,642	27,686	1,300	320	29,306	0	29,306
Segment result	14,770	13,572	2,188	1,841	3,616	35,987	-1,575	-415	33,997	0	33,997
Reconciliation to consolidated										0
financial statements
Operating result									33,997	0	33,997
Net other financial income									-362	0	-362
Taxes									9,023	0	9,023
Net profit for the period									24,612	0	24,612
Segment assets	720,904	302,078	41,155	19,921		356,128 1,440,186	120,495		2,631 1,563,312		-78,047 1,485,265
Reconciliation to consolidated
financial statements
Unallocated items											16,394
Total assets											1,501,659
Segment liabilities	533,326	252,444	25,271	10,558		332,653 1,154,252	108,722		3,747 1,226,721		-78,047 1,188,674
Reconciliation to consolidated
financial statements
Unallocated items											50,101
Total liabilities											1,238,775

8 OTHER NOTES

8.1 Capital Management

8.1.1 Economic Capital

The primary goal of the Group's capital management activities is to maintain its credit rating in order to support its operations and safeguard liquidity and to maintain risk-bearing capacity at all times within the requirements placed on the Group by the Minimum Requirements for Risk Management [Mindestanforderungen an das Risikomanagement (MaRisk)].

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 of 16 percent, as we did in the previous year.

In addition, the Group's determination of risk-bearing capacity and the risk-limiting system, i.e. the limiting of risk positions, guarantees that economic capital is monitored and safeguarded.

8.1.2 Regulatory Capital

Owing to the acquisition of GRENKE BANK AG and the fact that GRENKELEASING AG has been a financial services provider as defined by the German Banking Act since the end of 2008, the Group must comply with the requirements of the German Solvency Regulation [Solvabilitätsverordnung (SolvV)] at Group level. As the parent company, GRENKELEASING AG also reports the Group's overall capital ratio in accordance with the provisions of Sec. 3 of the German Solvency Regulation SolvV in conjunction with Sec. 10 a of the German Banking Act.

The overall capital ratio is calculated on the basis of the IFRS financial statements. Here, the Group's equity consists of the Tier 1 capital components of capital stock (EUR 17,491k), the capital reserve (EUR 60,166k) and revenue reserves (EUR 83,900k). There are also other reserves with a negative amount of EUR 4,088k and deductions, characterized by intangible assets, of EUR 13,511k. No other equity is included in the calculation of regulatory equity. The Group's total equity as of the reporting date amounted to EUR 143,958k.

8.2 Franchise System

GRENKELEASING provides its expertise, infrastructure and funds for refinancing lease contracts under a franchise arrangement. However, it does not own shares in these franchisees, nor does it have any control over the franchisees' business policies. In addition to the franchise charge totalling EUR 686k (previous year: EUR 511k), the Group generated income from interest on loans of EUR 3,457k (previous year: EUR 2,532k).

As of the balance sheet date, in addition to loans (see note 4.4) there were further receivables from franchisees totalling EUR 1,232k (previous year: EUR 3,513k).

8.3 Contingent Liabilities and Other Financial Obligations

As of the balance sheet date there were no contingent liabilities requiring comment on the balance sheet or disclosure 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, 2009	Dec. 31, 2008
Rent, maintenance and lease obligations
due in the subsequent year	5,023	4,027
due in 2 to 5 years	7,719	7,798
due in more than 5 years	1,084	1,788
Total	13,826	13,613

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 receivables purchase agreement.

Our Irish subsidiary, GRENKE FINANCE Plc., Dublin, Ireland, realised income from intragroup factoring, loans and leasing in 2008 and 2009. With its above-mentioned income in Ireland, GRENKE FINANCE Plc. is subject to a nominal income tax charge of 12.5 percent in 2008 and 2009 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. were therefore satisfied in 2008 and 2009. No contingent liabilities or other obligations therefore arise from this matter as of the reporting date.

8.4 Tax Audit in Germany

The tax audit at GRENKELEASING AG for fiscal years 2000 to 2004 that commenced in September 2006 is still ongoing. There were no audit findings on the balance sheet date. The audit at GRENKE BANK AG for the fiscal years 2004 to 2007 began in July 2009. There were no conclusive audit findings on the balance sheet date.

8.5 Related Party Disclosures

Third parties are considered 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 business activities. Conversely, the various group companies also render services within the GRENKELEASING AG Group as part of their business purpose. These extensive business transactions are performed at market conditions.

As part of its ordinary business activities, GRENKE BANK AG offers related third parties services under normal market conditions. At the balance sheet date, the bank has received deposits totalling EUR 6,325k from members of the Group's Board of Directors and their family members. It also received deposits totalling EUR 101k from members of the Group's Supervisory Board and their family members. No loans were granted to any of these individuals during the reporting period.

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 2009 were:

Prof. Dr. Ernst-Moritz Lipp, Baden-Baden, Chairman, Professor of International Finance and General Manager of ODEWALD & COMPAGNIE Gesellschaft für Beteiligungen mbH Gerhard E. Witt, Baden-Baden, Deputy Chairman, public auditor and tax advisor Dieter Münch, Weinheim, retired bank officer, member of foundation board Dr. Oliver Nass, Paris, general manager of ESG France 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.	2009	2008
Dieter Münch	75	75
Prof. Dr. Ernst-Moritz Lipp	21,000	21,000
Erwin Staudt	1,000	1,000
Total	22,075	22,075

Prof. Ernst-Moritz Lipp is also the Chairman of the Supervisory Board of GRENKE BANK AG, Hamburg and 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. Mr. Gerhard E. Witt and Mr. Dieter Münch have also been Supervisory Board members of Grenke Investitionen Verwaltungs KGaA, Baden-Baden, 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 and was a member of the Advisory Board of Kazenmaier FleetService GmbH, Karlsruhe. Mr. Erwin Staudt is a member of the Supervisory Boards of PROFI Engineering Systems AG, Darmstadt, USU AG, Möglingen, and Hahn Verwaltungs-GmbH, Fellbach.

Dr. Brigitte Sträter and Dr. Oliver Nass are not members of any other supervisory boards or comparable oversight bodies of companies in Germany or abroad within the meaning of Sec. 125 (1) sentence 3 AktG. Pursuant to Sec. 102 (1) AktG and Art. 7 (2) of the articles of incorporation of GRENKELEASING AG, the terms in office of the Supervisory Board members Prof. Ernst-Moritz Lipp and Mr. Gerhard E. Witt ended as of the end of the Annual General Meeting on May 6, 2008. The Annual General Meeting approved the proposal of the Supervisory Board to re-elect Prof. 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 68k (previous year: EUR 72k). 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 provide for the participation of the members of the Supervisory Board in any of the employee stock option programmes. Remuneration of the Supervisory Board breaks down as follows:

		Total		Remuneration AG		Remuneration KGaA		Payments for supplementary services
EURk	2009	Previous year	2009	Previous year	2009	Previous year	2009	Previous year
Total	77	81	68	72	9	9	0	0

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

Mr. Wolfgang Grenke, businessman, Baden-Baden (Chairman)

Special responsibility: strategy, company development, internal audit

Dr. Uwe Hack, business administration graduate, Metzingen (Deputy Chairman)

Special responsibility: investor relations, treasury, controlling

Mr. Mark Kindermann, business graduate, Bühl

Special responsibility: accounting, quality management, human resources, legal, administration

Mr. Thomas Konprecht, programming graduate, certified leasing and financial consultant (VWA), Düsseldorf

Special responsibility: marketing, sales, management services

Mr. Michael Kostrewa, businessman and industrial IT graduate, Gaggenau

Special responsibility: information technology, e-business

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

The Board of Directors agreements of Mr. Thomas Konprecht and Mr. Michael Kostrewa expire as of April 30, 2010.

The remuneration of the Board of Directors for 2009 is as follows:

EURk	Total remuneration	of which fixed	of which variable
Total	2,078	1,046	1,032
Total (previous year)	1,664	1,044	620

An annual pension premium of EUR 21k (previous year: 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 previous year.

The basic share price for 2009 was EUR 19.28. The maximum payment arising from this agreement is limited to EUR 600,000 for the period of three years. Under the programme, Dr. Hack is required to invest the respective net amount paid plus a personal contribution of 25 percent of that amount in GRENKELEASING AG shares.

The plan was treated as a cash settlement plan. However, the option programme did not pay out in 2007 or 2008 as targets were not met. The target was reached for the 2009 tranche, the last in the above programme. The claim to payment under the option programme is EUR 300k. This was recognised in the income statement as of December 31, 2009 under personnel expenses.

Please refer to the report on the financial position for detailed disclosures.

Shareholdings are shown by the table below:

	Shares as of Dec. 31
No.	2009	2008
Wolfgang Grenke	4,916,619	4,916,619
Thomas Konprecht	330,730	330,730
Mark Kindermann	52,053	52,053
Michael Kostrewa	27,500	27,500
Dr. Uwe Hack	5,000	5,000
Total	5,331,902	5,331,902

Mr. Wolfgang Grenke also the Chairman of GRENKE SERVICE AG, Baden-Baden. He is the Chairman of the Supervisory Board of GRENKELEASING AG, Vienna and sits on the Supervisory Board of GRENKE BANK AG, Hamburg. He is also a member of the Advisory Board of Deutsche Bank AG, Freiburg region.

Mr. Mark Kindermann is also the Chairman of GRENKE LIMITED, Dublin and a member of the Supervisory Boards of GRENKE SERVICE AG, Baden-Baden, GRENKELEASING AG, Vienna, GRENKELEASING AB, Stockholm, and Grenkefinance N.V., Vianen and GRENKE BANK AG, Hamburg.

Mr. Thomas Konprecht is also the Chairman of the Board of Directors of GRENKE ALQUILER S.A., Barcelona, a member of the Supervisory Board of GRENKELEASING AG, Vienna and GRENKE BANK AG, Hamburg, and the Chairman of GRENKE SERVICE AG, Baden-Baden.

Mr. Michael Kostrewa is also a member of the Supervisory Boards of GRENKELEASING AB, Stockholm and GRENKE SERVICE AG, Baden-Baden.

Dr. Uwe Hack is also the Chairman of GRENKE BANK AG, Hamburg.

8.6 Events after the Balance Sheet Date

On January 15, 2010, GRENKELEASING AG exercised the option granted under its first ABS bond to buy it back early. Receivables of EUR 8,624k were bought back.

On January 27, 2010, the Group signed the agreements to launch a second ABS bond with a three-year revolving structure and subsequent repayment phase. The maximum volume is EUR 300,000k and utilisation as of its launch on February 4 is EUR 160,000k.

8.7 Declaration in Accordance with Sec. 161 AktG

The Board of Directors and Supervisory Board of GRENKELEASING AG have issued the declaration for 2009 pursuant to Sec. 161 AktG and made this available to shareholders.

AUDIT OPINION

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, 2009. The preparation of the consolidated financial statements and group management report in accordance with IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB is the responsibility of the legal representatives of the company. 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, February 1, 2010

Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft

von Seidel Kirch Auditor Auditor

DECLARATION IN ACCORDANCE WITH SEC. 297 (2) SENTENCE 4 AND SEC. 315 (1) SENTENCE 6 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, February 1, 2010

The Board of Directors

CALENDAR OF EVENTS 2010

Feb. 9, 2010	Publication of Annual Accounts for 2009
	DVFA Analyst Conference/Balance Press Conference in Frankfurt (Main)
May 4, 2010	Publication of Quarterly Financial Report as per March 31, 2010
	May 11, 2010 Annual General Meeting in Baden-Baden
July 29, 2010	Publication of Quarterly Financial Report as per June 30, 2010
	Oct. 28, 2010 Publication of Quarterly Financial Report as per September 30, 2010 DVFA Analyst Conference in Frankfurt (Main)

CONTACT

Renate Hauss Corporate Communications

GRENKELEASING AG Neuer Markt 2 76532 Baden-Baden

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

www.grenke.de www.grenkebank.de www.grenkefactoring.de

E-Mail: investor@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 7221 5007-204 Fax : +49 7221 5007-112

www.grenke.de www.grenkebank.de www.grenkefactoring.de

E-Mail: investor@grenke.de