Annual Report • Mar 27, 2009
Annual Report
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margin
EBITDA
1 Germany 48%
in € million
in € million
Equity and Net debt in € million
1 Deutschland 52% 1 Professional Services 25%
2 Zentral-Osteuropa 24% 2 Business Solutions 36%
3 Süd-Westeuropa 14% 3 Technology & Infrastructure 39%
| Earnings Data | 2008 | 2007 | Chg. in % | |
|---|---|---|---|---|
| Revenues | in € million | 106.21 | 98.33 | +8 |
| EBITDA | in € million | 7.79 | 0.35 | >100 |
| EBIT | in € million | 3.83 | -16.68 | >100 |
| Profit before tax | in € million | 2.38 | -17.91 | >100 |
| Profit after tax | in € million | -2.10 | -19.91 | +89 |
| Free cash flow1) | in € million | 3.86 | -4.64 | >100 |
| Capital expenditure | in € million | 2.45 | 2.82 | -13 |
| Acquisitions2) | in € million | 2.22 | 10.05 | -78 |
| Employees3) | 1,153 | 1,164 | -1 |
| Balance Sheet Data | 2008 | 2007 | Chg. in % | |
|---|---|---|---|---|
| Equity | in € million | 24.15 | 26.27 | -8 |
| Net debt | in € million | 4.89 | 6.53 | -25 |
| Capital employed | in € million | 28.86 | 32.62 | -12 |
| Working capital | in € million | 5.38 | 4.77 | +13 |
| Balance sheet total | in € million | 66.31 | 74.34 | -11 |
| Gearing | in % | 20 | 25 | - |
| Stock Exchange Data4) | 2008 | 2007 | Chg. in % | |
|---|---|---|---|---|
| Earnings per share | in € | -0.14 | -1.29 | +89 |
| Adjusted earnings per share5) | in € | 0.09 | -0.47 | >100 |
| Dividend per share | in € | 0.00 | 0.00 | - |
| Share price high | in € | 2.58 | 3.46 | -25 |
| Share price low | in € | 1.01 | 1.76 | -43 |
| Share price at year-end | in € | 1.89 | 1.92 | -2 |
| Shares outstanding (weighted) | in 1,000 | 15,387 | 15,387 | 0 |
| Market capitalization at year-end | in € million | 29.08 | 29.54 | -2 |
| Geographical Segments 2008 in € million |
Germany | Europe | Central East | South West Europe |
North Europe | Other | Holding and | |||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | 51.25 | (+10%) | 15.48 | (+5%) | 28.42 | (+4%) | 11.06 | (+17%) | 0 | - |
| EBITDA | 3.92 | (>100%) | 1.54 | (+69%) | 1.76 | (-19%) | 1.11 | (+6%) | -0.53 | (+87%) |
| EBIT | 2.47 | (>100%) | 0.50 | (>100%) | 1.07 | (+24%) | 0.40 | (>100%) | -0.60 | (+85%) |
| Capital expenditure | 0.65 | (-54%) | 0.24 | (-98%) | 0.82 | (+35%) | 0.65 | (-5%) | 0.09 | (>100% ) |
| Employees3) | 492 | (+5%) | 166 | (-5%) | 393 | (-6%) | 92 | (+2%) | 10 | (-23%) |
1) Cash flow from operating activities minus cash flow from investing activities plus acquisitions
2) Including payments with own shares
3) Average number of employees during the period
4) Vienna Stock Exchange
5) Adjusted for non-recurring income and expense, see explanations on page 44 and 45
As a leading IT company we provide software and services. The company is specialised in integrating business solutions and optimizing ICT infrastructures:
…because IT is our business. Not yours. You have better things to do with your time and money.
have implemented Microsoft Office Communication Server 2007 for the hospital and its branches:
the benefits were improved business communication and collaboration between the care teams at the different hospital locations:
Project duration: 4 months
Ideal weather for a video conference. Save yourself the car ride.
Here the money grows. With careful maintenance and support for the risk management software.
implemented an individually tailored Corporate Performance Management solution on basis of Cognos for:
this means a central, integrated business database and faster planning processes:
Project start: 2007
Refrigerator empty? Don`t blame sales planning.
Keep control. The toll system controls the traffic. We control the toll system.
supply SD.cube, a company-wide integration platform for IT service management:
the solution enables central and quick access to information derived from various systems for Groupwide management of service processes:
Project start: 2006
We have nothing better to do than to save our customers time and money. That pays off. For everyone.
In 2008 we have increased total revenues by 8% to € 106.21 million and raised EBITDA from € 0.35 to 7.79 million. We also considerably improved our balance sheet structure based on a strong cash flow from operating activities.
BRAIN FORCE can look back at one of the most successful years in its corporate history. The Group significantly improved its operational performance indicators and balance sheet in 2008. Revenues rose 8%, to € 106.21 million, the EBITDA climbed from € 0.35 to 7.79 million, and EBIT increased from € -16.68 to +3.83 million. Due to a strong cash flow from operating activities, gearing declined from 25 to 20%, and the ratio of net debt to EBITDA was a solid 0.6x at the balance sheet date.
Despite the good operational performance, we had to report a negative profit after tax for the 2008 financial year of € -2.10 million, which can be attributed to two non-recurring effects: the write-off of the convertible bond in Kemp Technologies Inc. (New York) which the previous Management Board subscribed to (€ – 0.63 million), and the legally stipulated elimination of German tax loss carry-forwards (€ – 2.90 million) following the takeover by the Cross/Beko Group. However, both measures are not cash-effective, and thus are relatively easy to cope with.
The economic crisis will also not leave BRAIN FORCE untouched. Nevertheless, we look ahead to the future with confidence. In 2008, we developed a new corporate strategy focusing on the Business Solutions and Infrastructure Optimization areas, and immediately began with its implementation. Our aim is to achieve positive operating results again in 2009, and position the Group to generate sustainable growth after the crisis has ended. In the current financial year we will primarily focus on optimizing the cash flow from operating activities.
BRAIN FORCE provides intelligent IT solutions in the fields of Business Solutions (solutions for crucial business processes) and Infrastructure Optimization (solutions enabling our customers to set up a more manageable and efficient IT infrastructure). Professional Services (body leasing) complements our service offering, in which BRAIN FORCE recruits and supplies the right IT experts at the right time. Accordingly, our customers profit from tailor-made services, flexible solutions and products.
CEO Letter and Interview
Service
BRAIN FORCE HOLDING AG can look back at one of the most successful years in its corporate history. In 2008, the Group achieved a significant improvement in all operational performance indicators and in its balance sheet structure, and once again generated profits following the losses posted in 2007. The restructuring drive initiated in the third quarter of 2007 was a major success in 2008, so that we actually surpassed our original guidance for the financial year. The only downside was the elimination of our German tax loss carryforwards, which had a negative impact on our earnings after tax. The cash flow from operating activities developed extremely positive, which enabled us to considerably improve our balance sheet and boast a high level of cash and cash equivalents.
For a good part of 2008, the business environment in our markets was satisfactory, although we were not spared the initial effects of the economic crisis in the second half of the year. In particular, demand in the IT branch weakened on the Italian market towards the end of the financial year. In contrast, the German, Austrian and Dutch markets continued to perform well until the end of 2008, but demand also weakened compared to the beginning of the year.
Against the backdrop of this business environment, the restructuring and consolidation efforts already launched in 2007 proved to be effective. The following measures were responsible for the good operating results of the BRAIN FORCE Group in 2008: for one thing, we stopped to the buy and build strategy, and focus on integrating the companies acquired in the past. At the same time, the existing product and service portfolio was optimized, and BRAIN FORCE concentrated on profitable business areas and implementing cost reductions in all countries. As a result, all the companies which posted losses in 2007 primarily as a result of depreciation on goodwill and restructuring costs of € 14.15 million, once again generated profits in 2008.
In Germany, the largest market for BRAIN FORCE, we increased revenues by 10% to € 51.25 million, and generated an EBIT of € +2.47 million, following an EBIT of € -11.51 million in the previous year. Revenues in the Region Central East Europe were up 5% to € 15.48 million, featuring a positive EBIT of € 0.50 million, compared to an EBIT of € -0.18 million in 2007. The Region North Europe substantially improved its performance, boosting revenues to € 11.06 million, a growth of 17%. Similarly, EBIT rose from € -1.74 to +0.40 million. The Region South West Europe succeeded in raising revenues by 4% to € 28.42 million, with EBIT climbing from € 0.86 million in 2007 to € 1.07 million in 2008.
Total Group revenues were up 8% to € 106.21 million, surpassing the € 100 million threshold for the first time. EBITDA amounted to € 7.79 million, compared to € 0.35 million in the previous year, and EBIT improved to € +3.83 million, following a loss of € -16.68 million in the restructuring year 2007. Accordingly, we outper-
formed our own guidance forecasting an EBIT of € 2 to 3 million, and achieved the highest operating results in the 25 year history of BRAIN FORCE. I would like to particularly emphasize the improvement in our cash flow from operating activities, which rebounded from € -2.02 million in 2007 to € +6.28 million in the past financial year, which enabled us to reduce net debt from € 6.53 million to € 4.89 million despite investments of € 4.64 million. At the balance sheet date, cash and cash equivalents totaled € 8.80 million, and gearing (ratio of net debt to equity) was reduced from 25 to 20%. All in all, the balance sheet structure of the BRAIN FORCE Group developed very favorably and is now sound.
Despite the good operational performance, we had to report negative earnings after tax for the 2008 financial year of € -2.10 million, which can be attributed to two non-recurring effects. For one thing, to be on the safe side of things, we completely wrote off the convertible bond in KEMP Technologies Inc. (New York) which the previous Management Board subscribed to, burdening the financial result to the amount of € 0.63 million. Our own financing ability has been secured and is completely independent of the repayment of this convertible bond. In addition, following an amendment to Germany's Corporate Tax Law, the tax loss carry-forwards for our German subsidiary were eliminated after the takeover of BRAIN FORCE by BF Informationstechnologie-Beteiligungsgesellschaft m.b.H. (BFIB), thus requiring us to increase deferred tax expenses by € 2.90 million. Both steps are not cash-effective, and thus can easily be borne by the BRAIN FORCE BRAIN FORCE can look back at one of the most successful years in its corporate history.
Group. The Management Board will propose to the Annual General Meeting on May 14, 2009 that no dividend be distributed for the 2008 financial year, in order to ensure that sufficient liquidity is available to implement the Group's business strategy.
In March 2008, BFIB, a subsidiary of CROSS Industries AG and Unternehmens Invest AG, made a takeover offer of € 2.40 per share to the shareholders of BRAIN FORCE HOLDING AG. After expiration of the takeover bid on July 22, 2008, BFIB held 46.82 % of the BRAIN FORCE shares. BFIB was then integrated into BEKO HOLDING AG by its owners effective in September 2008. Today BRAIN FORCE is part of the BEKO Group, which according to current reports holds a 53.85% stake in BRAIN FORCE. In addition, CROSS Industries AG (the parent company of BEKO HOLDING AG) owns 0.63% of BRAIN FORCE shares. The new shareholder structure provides the Group with a stable ownership structure. A settlement was reached at the end of November in regards to the legal conflict with former BRAIN FORCE Chief Executive Officer Helmut Fleischmann.
Despite the economic crisis, BRAIN FORCE considers itself to be well positioned and looks ahead to the future with confidence. On the basis of the existing portfolio, we developed a new corporate strategy and immediately began its implementation. Our future strategy will focus on Business Solutions and Infrastructure Optimization, two business areas with disproportionately high growth potential according to Gartner Group. In the field of Infrastructure Optimization, we offer our customers solutions enabling them to create a more manageable and efficient IT infrastructure and thus increase their productivity. The Business Solutions area develops solutions to support the business processes of our customers enabling them to gain competitive advantages. This service offering is complemented by Professional Services ("body leasing") in Germany and Austria, where BRAIN FORCE recruits and makes IT specialists available for customer projects. The new strategic orientation is designed to create a stronger awareness of the BRAIN FORCE Group on the marketplace on the basis of a clearly recognizable core competence, lay the groundwork for greater revenue potential and achieving an improved cost structure. Following numerous acquisitions carried out in the past, the current focus is on the efficient integration of the new companies and the exploitation of synergies. This approach will further strengthen the successful business operations of the BRAIN FORCE Group and provide the basis for the penetration or expansion of new trend-setting business areas.
In spite of the economic downturn, BRAIN FORCE had orders valued at € 32.64 million as of December 31, 2008, the highest order intake I have ever seen at the company. The prevailing level of uncertainty in respect to future developments is clearly obvious, and we will be confronted with difficult economic times. The current forecasts made by economic experts still seem to be overly optimistic to us, and we are preparing for a decline in revenues on the basis of consistent cost optimization. In my view, it is not possible at the present time to issue a realistic or reliable guidance in respect to the development of revenues and operating results in the 2009 financial year. However, the company is well positioned and has sufficient liquidity at its disposal. Our target is to achieve a positive operating result once again in 2009 and optimally position the Group to generate long-term growth. In 2009 we will primarily concentrate on optimizing the cash flow from operating activities.
I would like to take this opportunity to thank our customers and business partners for their good cooperation and the confidence they have placed in us. I would also like to sincerely extend my thanks to our employees for their hard work and dedication as well as the good business results in the past financial year, and to the Supervisory Board for the efficient way in which it dealt with the strategic issues of the company. Esteemed shareholders, I ask you to objectively evaluate our operational performance. At a time marked by a historic downward trend on stock markets everywhere, do not only judge us on the basis of our share price!
Yours
Günter Pridt
Günter Pridt: When I assumed the position of Chief Executive Officer in September 2007, I immediately realized that BRAIN FORCE was essentially a well positioned company which was temporarily having a rough time. As a longstanding member of the Supervisory Board, I was intimately familiar with the company's strengths and weaknesses. We had to quickly make some far-reaching decisions and implement them right away, including a complete stop to all acquisitions, integration of acquired companies, optimization of the product portfolio focusing on profitable business areas, the shutdown of unprofitable subsidiaries, comprehensive cost reductions and last but not least, stabilizing the organization and promoting the motivational level of our employees. Looking back at this time, I can confidently say that these measures worked, and that the business developed very successfully in 2008. All business areas improved considerably compared to the restructuring year 2007.
Günter Pridt: On an operational level, the performance of the BRAIN FORCE Group in 2008 was nothing short of fantastic. All subsidiaries made a positive contribution to the business results. We achieved the highest revenues in the company's history, at € 106.21 million, an increase of 8% compared to 2007. EBITDA amounted to a record € 7.79 million, which was significantly higher than the previous year's figure of € 0.35 million. The EBIT of € 3.83 million not only outperformed the original guidance by far, but is also unprecedented for BRAIN FORCE.
Thomas Melzer: On the basis of the takeover offer for BRAIN FORCE, which ultimately led to the majority shareholding on the part of Beko, we are subject to an amendment to Germany's Corporate Tax Law, which completely eliminates tax loss carry-forwards for our German subsidiary. We had to cautiously recognize this item with the approval of the auditors. This meant that the deferred tax expenses turned our good profit before tax into a loss. Nevertheless, I have to point out that this represents a non-cash accounting charge, and thus the impact on our consolidated balance sheet is manageable and we can easily cope with it. In addition, the possibility does exist to reactivate these tax loss carry-forwards on a medium-term basis, due to the fact that tax experts in Germany doubt the constitutionality of this new law. In order to fully deal with another burden from the past, we wrote off a convertible bond issued by Kemp Technologies Inc. (New York) which the previous Management Board subscribed to, and recognized this as a loss of € 0.63 million in the financial result. This was also a cautious measure in accounting terms, and it represents a non-cash item. Our own financing is secure and fully independent of this convertible bond.
Thomas Melzer: The BRAIN FORCE balance sheet is sound, as demonstrated by all the indicators included in the balance sheet analysis starting on page 46. Our solid balance sheet structure is primarily related to the considerable improvement in the cash flow from operating activities, from € -2.02 million in 2007 to € +6.28 million in 2008, allowing us to reduce net debt to under € 5 million. Accordingly, all the relevant balance sheet indicators showed a major improvement. In addition to our strong cash flow, we also secured sufficient lines of credit from banks to finance working capital. I do not foresee any short-term or mediumterm refinancing requirements. It was also important for me to optimize our investor relations work and the related costs. With regards to the 2009 financial year, we created the basis for Group-wide cash pooling, and strengthened our risk management system. In the light of the current economic crisis, we want to realize improvements in working capital in 2009, and implement further cost reduction measures.
Günter Pridt: We laid the groundwork for our future growth in 2008, using the existing portfolio to focus on areas with high growth potential. Business Solutions and Infrastructure Optimization will comprise the two cornerstones of our business in the future. The product and service offering in these two growth areas will not only be covered in individual countries in the future, but by local business units throughout the Group, enabling increased visibility and recognition of the BRAIN FORCE brand on an international level. Further-
Quick and persistent restructuring were the basis for a successful 2008
Record results, revenues above € 100 million
Net loss related to elimination of German tax loss carry-forwards and write-off of convertible bond
Sound BRAIN FORCE balance sheet and significant improvement of operating cash flow
Strategic orientation of business operations to growth drivers: Business Solutions and Infrastructure Optimization
Günter Pridt, CEO Thomas Melzer, CFO
more, BRAIN FORCE is marketing its existing portfolio (financial service solutions, IT Service Management, ICT Suite) from a central location on the basis of a competence center structure in accordance with the "do once approach", in order to bundle know-how and reduce costs. BRAIN FORCE also provides suitable experts for customer projects. These specialists are being made available to clients in Austria and Germany by a separate strategic competence center for Professional Services ("body leasing").
Günter Pridt: In the future, BRAIN FORCE will grow both organically and by acquisitions. On an organizational level, we will expand the Infrastructure Optimization area. Inorganic growth will be achieved through targeted acquisitions of companies specializing in the field of Business Solutions, particularly Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Corporate Performance Management and Business Intelligence (CPM/BI).
Thomas Melzer: At the end of 2008, our orders on hand amounted to € 32.64 million, a 24% improvement from the previous year. However, the prevailing level of uncertainty in respect to future developments is clearly obvious from today's point of view, the forecasts made by economic experts as outlined in this annual report in the section on the overall business environment now even seem to be overly optimistic, and we are preparing for a potential decline in revenues at all subsidiaries by means of further restructuring measures and a determined effort to optimize costs. At the present time, we do not believe it is possible to issue a reliable guidance in respect to the development of revenues and operating results in the 2009 financial year. However, the company is well positioned and has secured financing. Our declared objective is to achieve positive operating results in 2009 and optimally position the Group to generate long-term growth. In the current financial year, we will primarily focus on optimizing the cash flow from operating activities.
Günter Pridt: The cooperation with Beko in Austria is proceeding well. At the turn of the year, our holding and the Austrian operating company moved into the same office building as Beko in order to save costs and take advantage of close proximity and short distances to facilitate communications with the majority shareholder. BRAIN FORCE is now part of a larger IT Group, and we are now jointly exploring ways to exploit synergies and potential to create as much value as possible on behalf of all shareholders.
The business strategy foresees organic growth and acquisitions
2009 target: positive operating result
Cooperation within Beko Group is proceeding well
Chief Executive Officer, appointed until December 2009. Born 1951, married
Günter Pridt joined IBM in 1973. After holding various consulting positions related to key accounts and management positions in distribution and marketing, he assumed overall responsibility for the services segment of IBM Austria, Central Europe and Russia. In this function, he also served on the Management Board. From November 1997 to October 2000, he served as general manager and sole managing director of IBM Austria. In 2001, he joined the Management Board of BRAIN FORCE SOFTWARE AG, where he was in charge of the operating business as COO until 2004, particularly promoting the development of the services business. He subsequently served on the Supervisory Board of the company. Since September 2007, Günter Pridt has been Chief Executive Officer of BRAIN FORCE HOLDING AG.
Chief Financial Officer, appointed in April 2008 to serve until March 2011. Born 1970, married
Thomas Melzer, who holds a master's degree in business administration, has served as Chief Financial Officer of BRAIN FORCE HOLDING AG since April 2008. He previously worked in various positions for Wienerberger AG, the world's largest brick manufacturer: from 1997 to 1999 in controlling and Group accounting, and starting in the year 2000 as director of investor relations and corporate communications. From 2001 to 2008, Thomas Melzer was also a member of the Management Committee of Wienerberger AG, and served on the Supervisory Board of the Pipelife Group from June 2007 to February 2008. In addition, Thomas Melzer was a member of the Management Board of Cercle Investor Relations Austria (C.I.R.A.), serving as its chairman from October 2004 to September 2007.
u Internal Communications
u Business Strategy
Neither Günter Pridt nor Thomas Melzer serves on the management or supervisory boards of other domestic or foreign companies.
The following list contains the names of the top executives of the most important national subsidiaries of the BRAIN FORCE Group, along with their areas of responsibility.
u Professional Services
Franco Righini, Italy, Spokesman of the Management Board, responsible for
responsible for
u Finance & Administration
Jean Renes, Netherlands, Spokesman of the Management Board, responsible for
(up to March 2, 2009), responsible for
Günter Pridt and Karl Haas, Netherlands, Members of the Management Board
Bojan Damnjanovic, Austria, Spokesman of the Management Board, responsible for
in segment Technology & Infrastructure (SolveDirect) responsible for
Hannes Griesser, Austria, Member of the Management Board, responsible for
u Finance
Drahomír Hrubý, Czech Republic / Slovakia, Sole Managing Director
Karl Haas, Switzerland, Sole Managing Director
The Supervisory Board and the Management Board held a total of seven meetings in the 2008 financial year, intensively discussing the overall business environment and the future strategic development of the company, as well as significant events and investments. Within the context of its regular reporting and a comprehensive report submitted for all meetings, the Management Board informed the Supervisory Board about the present state of business and the financial position of the Group and its strategic investments, as well as the personnel situation. Additional information was supplied about extraordinary developments.
An important focal point of the work done by the Supervisory Board is the earnings situation of the BRAIN FORCE Group. The determined restructuring implemented in the last one and a half years achieved considerable success in 2008. The BRAIN FORCE Group posted the best operational performance since it was founded in the year 1983, generating revenues of € 106.21 million (+8%), an EBITDA of € 7.79 million (2007: € 0.35 million) and EBIT of € 3.83 million (2007: negative EBIT of € -16.68 million). Despite the good operating result, the company had to report negative earnings after tax of € 2.10 million due to the write-off of a convertible bond subscribed by the previous Management Board, and a high deferred tax expense related to the elimination of tax loss carry-forwards in the German subsidiary following acquisition of a majority shareholding by the Cross/Beko Group. However, these non-recurring effects did not have any direct impact on the cash flow, which parallel to the operating result also developed very favorably during the year under review. The balance sheet structure of the company is sound, and there is no concern in respect to the financing situation.
In its meetings held on February 15, 2008 and March 26, 2008, the Supervisory Board intensively discussed the takeover offer submitted by BF Informationstechnologie-Beteiligungsgesellschaft m.b.H. (BFIB), in which Unternehmens Invest AG and CROSS Industries AG have a majority stake. The Supervisory Board and the Management Board issued a joint declaration on this mandatory public tender offer on April 2, 2008 and published the takeover offer on its corporate Website (www.brainforce.com). Following expiration of the acceptance period for the offer on July 22, 2008, the bidder held 46.82% of the shares in BRAIN FORCE. In September 2008, BFIB was integrated by its owners in Beko HOLDING AG, which now owns a 53.85% of the shares and voting rights in the company. Moreover, it was announced that CROSS Industries AG had acquired a controlling interest in Beko HOLDING AG. More information on the current shareholder structure of BRAIN FORCE can be found on page 42 of this annual report.
The Supervisory Board meeting held on March 26, 2008 dealt with the resolution proposed by a key shareholder (Helmut Fleischmann Privatstiftung) to convene an extraordinary general meeting focusing on two agenda items "Proposal to carry out a special audit" and "Changes in the Supervisory Board" (dismissal and re-election). The Supervisory Board resolved to add these two items to the agenda of the Annual General Meeting on May 28, 2008. Furthermore, the
Supervisory Board was continually informed about the status of the court proceedings between BRAIN FORCE HOLDING AG and the previous CEO Helmut Fleischmann. In November 2008, the Management Board ended the lawsuit by concluding an out of court settlement with the approval of the Supervisory Board.
The committees dealt with individual specialized issues in detail and subsequently reporting its findings to the entire Supervisory Board. The Audit Committee convened three times, whereas the Remuneration and Nomination Committee met once. In addition, the Presidium of the Supervisory Board was continually informed about the current business situation by the Management Board. The Remuneration and Nomination Committee evaluated the performance-based salary component of the Management Board members. The criteria of variable remuneration, the principles of retirement benefits and termination benefits as well as the list of individual Management Board salaries are presented in the Remuneration Report found on page 28. No member of the Supervisory Board was absent for more than half of the Supervisory Board meetings. Exept for one meeting all members were present at all the meetings of the Audit Committee and the Remuneration and Nomination Committee.
The Audit Committee held a meeting on March 26, 2008 together with the auditors to discuss the annual financial statements for the 2007 financial year. In the subsequent meeting, the Supervisory Board dealt with and formally approved the annual financial statements of BRAIN FORCE HOLDING AG, and also resolved upon the consolidated financial statements, the Management Report, the proposal for the distribution of the dividend submitted by the Management Board and the Report of the Supervisory Board to the Annual General Meeting. Furthermore, a declaration by the Chairman of the Supervisory Board was prepared in respect to the proposed auditors for the 2008 financial year, their legal relations to the BRAIN FORCE Group and the members of its corporate bodies were evaluated and the fees for the audit were negotiated. The meeting on May 20, 2008 prepared the resolution for the election of the auditors by the Annual General Meeting. The Audit Committee convened on September 18, 2008 to deal with the issue of risk management in the company, which did not give rise to any objections. A further item on the agenda was the discussion and definition of the procedure, schedule and audit of the annual financial statements for 2008, and the specific additional responsibilities of the Audit Committee in the light of the upcoming changes in legal regulations.
In a written notification dated May 27, 2008, the Supervisory Board members Christian Wolff and Christian Schamburek announced their resignations from the Supervisory Board effective the date on which new Supervisory Board members were elected within the framework of the 10th Annual General Meeting. At the Annual General Meeting of May 28, 2008, Wolfgang Hickel was re-elected, whereas Josef Blazicek, Michael Hofer, Stefan Pierer and Friedrich Roithner were elected to the Supervisory Board of BRAIN FORCE HOLDING AG for the first time for a term of office lasting until the 14th Annual General Meeting. In the constituent meeting of the new Supervisory Board,
Christoph Senft, Chairman of the Supervisory Board
Christoph Senft was confirmed as Chairman of the Supervisory Board and Friedrich Roithner was elected to the position of Deputy Chairman. Due to the fact that the composition of the Supervisory Board had significantly changed on the basis of the new elections and was expanded to consist of seven members, the Audit Committee was newly constituted in June 2008 with three members (Friedrich Roithner as Chairman, Christoph Senft as Deputy Chairman and Josef Blazicek), and a combined Remuneration and Nomination Committee was established with Christoph Senft as the Chairman and Friedrich Roithner as Deputy Chairman.
In its meeting of August 28, 2008, the Supervisory Board discussed the new Strategy 2009+ developed by the management and authorized the Management Board to implement the business strategy. Strategy 2009+ is presented in this annual report on page 36. Moreover, this session of the Supervisory Board also defined the independence criteria for Supervisory Board members pursuant to C-Rule 53 of the Austrian Corporate Governance Code, and the individual members of the Supervisory Board submitted their independence declarations based on these criteria. The independence criteria can be viewed on the corporate Website of the company as well on page 30. The duties and responsibilities of the Supervisory Board committees are contained on page 27, whereas a list of the Supervisory Board members and their functions and the committee members can be found on the following pages. A further item on the agenda at the Supervisory Board of August 28, 2008 was the sale of BRAIN FORCE Hamburg GmbH, a subsidiary of BRAIN FORCE Software GmbH, Munich. The proposal submitted by the Management Board to sell this company was approved.
The Supervisory Board meeting held on November 27, 2008 dealt with the current business development of the company, an overview of the annual results for 2008 and the 2009 budget as well as medium-term business planning. The Management Board pointed
to the increasingly difficult business environment and presented a detailed cost savings plan for the 2009 financial year. The budget was approved by the Supervisory Board.
The annual financial statements and Management Report of BRAIN FORCE HOLDING AG as well as the consolidated financial statements for 2008 in accordance with IFRS were audited by PwC INTER-TREU-HAND GmbH, Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Vienna and granted an unqualified auditor's opinion. All documentation related to the annual financial statements, the proposal for the distribution of the profit and the Independent Auditor's Report were discussed in detail with the auditors and presented to the Supervisory Board. The Supervisory Board evaluated the documents pursuant to Section 96 Austrian Stock Corporation Act and agrees with the results of the audit. Accordingly, the annual financial statements have been adopted by the Supervisory Board in accordance with Section 125 (2) of the Austrian Stock Corporation Act. Furthermore, the Supervisory Board also approves the proposal of the Management Board for the appropriation of the result.
The Supervisory Board would like to thank the management as well as all employees for their dedication and hard work, and the good operating result achieved in the past financial year.
Vienna, March 26, 2009
Christoph Senft, Chairman of the Supervisory Board
A resolution passed at the Annual General Meeting held on May 28, 2008 expanded the Supervisory Board to seven members.
u Independent pursuant to Rule 53 Austrian Corporate Governance Code, term of office until the end of the annual general meeting resolving upon the 2011 financial year, first elected June 14, 2000,
born in 1949
u Principal of the Höhere Technische Bundeslehr- und Versuchsanstalt Spengergasse school in Vienna
Christian Wolff, born 1972, and Christian Schamburek, born 1961, resigned their positions on the Supervisory Board of BRAIN FORCE effective May 28, 2008.
Friedrich Roithner (Chairman), Christoph Senft (Deputy Chairman), Josef Blazicek
The duties of the Audit Committee include:
Three meetings of the Audit Committee were held in the 2008 financial year, focusing on the following issues:
A resolution passed by the Supervisory Board led to the setting up of a joint Remuneration and Nomination Committee.
Christoph Senft (Chairman), Friedrich Roithner (Deputy Chairman)
The duties of the Remuneration and Nomination Committee include:
One meeting of the Remuneration and Nomination Committee was held in the 2008 financial year, focusing on remuneration of the Management Board.
Transparent presentation of remuneration paid to the Management and Supervisory Board in the Remuneration Report
The aim of the remuneration scheme is to ensure an adequate and performancebased compensation
Annual bonus of Management Board oriented to profit before tax (PBT), and is limited to 100% of annual fixed salary
25% of total gross salary is variable
Supervisory Board approval is required for a Management Board member to do additional work. This ensures that the time involved or the remuneration received does not lead to a conflict of interest with the individual's responsibilities at BRAIN FORCE. In 2008, the Management Board members of BRAIN FORCE did not perform any other jobs in the form of Supervisory or Management Board mandates with other domestic or foreign companies outside of the BRAIN FORCE Group. No remuneration is paid for positions Management Board members do not serve on other boards
assumed in BRAIN FORCE subsidiaries.
Severance payments for Management Board members reflect legal regulations in Austria
In the case of a termination of the employment relationship to a particular member of the Management Board, this individual is entitled to severance pay pursuant to the legal regulations prevailing in Austria. In 2008, payments to "Mitarbeitervorsorgekassen" (statutory contributions to a fund for employee severance payments) totaled € 6,758 (2007: € 1,121). A defined contribution pension scheme exists for the Chief Financial Officer which will first be borne by the company in the 2009 financial year. Pension expenses in 2008 for previous Management Board members amounted to € 76.664 (2007: € 0).
The Remuneration Report summarizes the principles applied in determining the remuneration paid to the Management Board of BRAIN FORCE HOLDING AG, and explains the amount and structure of the income received by the members of the Management Board. In addition, the report also presents the principles and amount of remuneration paid to the members of the Supervisory Board. The Supervisory Board delegated responsibility for determining the remuneration for the BRAIN FORCE Management Board to the Remuneration and Nomination Committee.
Pursuant to the stipulations contained in the Austrian Stock Corporation Act, the Management Board is appointed for a specified period of time (Günter Pridt until December 31, 2009, Thomas Melzer until March 31, 2011). Employment contracts for the individual members of the BRAIN FORCE Management Board are concluded for the respective term of office, defining the amount and structure of the remuneration. The aim of the remuneration scheme is to provide appropriate compensation for the Management Board members in accordance with the scope of their functions and areas of responsibility, taking account of national and international comparisons in the IT sector. An important aspect of the remuneration system is a variable salary component which incorporates the success of the company. For this reason, the total gross salary is based on fixed and performance-based salary components, in which case the performance-related component is calculated in accordance with the respective Group profit before tax.
The fixed basic salary is oriented to the areas of responsibility assumed by each Management Board member, and is paid in fourteen monthly installments at the end of the respective month, as is customary in Austria. The consequence is that each Management Board member has a different fixed salary depending on the range of his duties and functions, taking the strategic and operational responsibility into consideration. The annual bonus represents a variable cash remuneration, the amount of which directly depends on the profit before tax (PBT) of the BRAIN FORCE Group. The performance-based salary component may not surpass the limit of 100% of the total annual fixed salary. The fixed salary and annual bonus are paid on a pro rata basis if the period of employment is for periods of less than one year.
The total gross cash salaries paid to the members of the Management Board for the 2008 financial year amounted to € 592,692 (2007: € 632,851), of which 75% is comprised of the fixed basic salary and 25% of the variable salary component which is paid in 2009.
| Cash salaries of | 2008 | 2007 | ||||
|---|---|---|---|---|---|---|
| Mgmt. Board in € | Fixed | Variable | Total | Fixed | Variable | Total |
| Günter Pridt | 280,000 | 92,967 | 372,967 | 91,041 | 0 | 91,041 |
| Thomas Melzer | 165,000 | 54,725 | 219,725 | 0 | 0 | 0 |
| Helmut Fleischmann | 0 | 0 | 0 | 254,335 | 0 | 254,335 |
| Wolfgang Lippert | 0 | 0 | 0 | 287,475 | 0 | 287,475 |
| Total | 445,000 | 147,692 | 592,692 | 632,851 | 0 | 632,851 |
The Annual General Meeting of May 28, 2008 approved the following remuneration scheme for members of the Supervisory Board: in addition to reimbursement for expenses, the Supervisory Board members receive a fixed remuneration for their work on the Supervisory Board in the 2008 financial year, depending on the functions they perform. Accordingly, the Chairman of the Supervisory Board receives € 10,000 p.a., the Deputy Chairman € 8,000 p.a. and every other Supervisory Board member is paid € 6,000 annually. In addition, the Chairman is granted an attendance fee of € 1,000 for each Supervisory Board meeting he attends, whereas the Deputy Chairman is paid € 800, and the other members € 600 for attending. The chairman of a committee is given € 500, the deputy chairman € 400 and other members € 300 for each committee meeting they personally attend. If Supervisory Board members perform additional work on behalf of the company, they may be granted special remuneration by a resolution of the Annual General Meeting. The total remuneration for members of the Supervisory Board recognized for the 2008 financial year (paid in 2009) amounted to € 70,067, whereas the comparable figure for the 2007 financial year (paid in 2008) was € 66,600.
No remuneration was granted for services performed above and beyond the above-mentioned Supervisory Board duties, in particular for any consulting fees or commissions. No pension obligations exist for members of the Supervisory Board of BRAIN FORCE HOLDING AG.
Sales and acquisitions of BRAIN FORCE shares by members of the Management Board and Supervisory Board are reported to the Financial Market Authority in accordance with Section 48 Austrian Stock Exchange Act, and is published on the BRAIN FORCE Website under "Investors/Corporate Governance/ Directors' Dealings".
BRAIN FORCE pursues a strategy to ensure the sustainable enhancement of shareholder value. The goal of the new Management Board and Supervisory Board is to implement a strict policy focusing on good corporate governance and transparency, and the ongoing further development of an efficient system of corporate control. This approach is designed to create confidence in the company and establish the basis for long-term value creation.
A compliance code has been enacted in the company to prevent insider training, implementing the stipulations of the Compliance Decree for Issuers promulgated by the Austrian Financial Market Authority. Adherence to these provisions is continually monitored by the compliance officer.
BRAIN FORCE is committed to complying with the Austrian Corporate Governance Code (ÖCGK), and has pledged to adhere to the guidelines contained in it. In 2008, the company already oriented its business operations to the newly revised version of the Austrian Corporate Governance Code, although these stipulations first apply for financial years beginning after December 31, 2008. In addition to observing the obligatory "L-Rules" (Legal Requirements), the BRAIN FORCE Group also abided by the "C-Rules" (Comply or Explain) of the revised code in the 2008 financial year, bearing in mind explanations provided below. The current updated version of the Austrian Corporate Governance Code and the Corporate Governance Report are available online at www.brainforce.com under "Investors".
On the basis of the large number of BRAIN FORCE HOLDING AG shareholders, the company is committed to the principle of transparency and the goal of providing a "true and fair view" to all owners. All relevant information is published in our annual report, quarterly reports, on the corporate Website and within the context of our ongoing press relations work. Reports are prepared in accordance with the recognized accounting principles contained in the International Financial Reporting Standards (IFRS). BRAIN FORCE HOLDING AG also informs its shareholders about all issues and developments of relevance to the company by means of ad-hoc announcements and corporate news. The financial calendar already points out important dates in a timely manner. Comprehensive information is published in the "Investors" section of the BRAIN FORCE Website, and is thus available to all shareholders at the same time.
Annual General Meeting resolution on remuneration for the Supervisory Board
No pension obligations for the Supervisory Board
Disclosure of transactions in own shares on the Website
Implementation of a strict policy focusing on good corporate governance and transparency
Guidelines enacted to prevent insider trading
Commitment to Austrian Corporate Governance Code
Commitment to transparency and a "true and fair view"
Protection of private shareholders through a provision in the Articles of Association
Ongoing and intensive coordination between the Management and Supervisory Boards
Independence criteria for the Supervisory Board pursuant to Austrian Corporate Governance Code
All Supervisory Board members are independent pursuant to the Austrian Corporate Governance Code
Report on related party transactioins in the Notes The company has issued a total of 15,386,742 ordinary, no-par value bearer shares. There are no preferential shares. We are committed to observing the principle of "one share – one vote". The provision contained in Section 13 (2) of our Articles of Association, which states that "a shareholder directly or indirectly holding more than 70% of the company's shares is entitled only to vote this percentage of shares" is designed to protect the interests of private shareholders. The shareholder structure is depicted on page 42 of this annual report.
The Management Board provides information to the Supervisory Board within the framework of regular meetings (at least one in each quarterly period). Additional meetings are held when necessary, for example to prepare an Annual General Meeting, to consult on the budget or discuss current strategic decisions. As a result, the Supervisory Board has access to all the relevant information required enabling it to perform its consulting and supervisory duties. In line with the Austrian Corporate Governance Code, the Management and Supervisory Board maintain ongoing contact above and beyond the formal sessions to discuss the development and strategic orientation of the company. Depending on the significance and type of duty to be fulfilled, the Supervisory Board has also established committees to carry out specific functions.
The Supervisory Board has enacted guidelines to determine the independence of Supervisory Board members of BRAIN FORCE HOLDING AG in accordance with C-Rule 53 of the Austrian Corporate Governance Code:
All Supervisory Board members of BRAIN FORCE HOLDING AG are to be considered as independent in line with the above-mentioned guidelines. The main responsibility of the Supervisory Board is to supervise the work of the Management Board in accordance with Section 95 Austrian Stock Corporation Act. These responsibilities are being completely carried out by the currently appointed Supervisory Board. The company has a free float exceeding 20% and less than 50%. Two members of the Supervisory Board are not owners of the company with a stake of more than 10%, or represent the interests of a large shareholder. Employees of BRAIN FORCE HOLDING AG have not elected a works council. For this reason, no employee represen-tative is a member of the Supervisory Board.
BRAIN FORCE HOLDING AG has neither granted loans to Management or Supervisory Board members, nor has it concluded contractual agreements with these individuals. Related party transactions are detailed in the Notes to the consolidated financial statements on page 82. The composition and mode of operation of the Management Board as well as the Supervisory Board and its committees are detailed in the Corporate Governance section of this annual report.
PwC Inter-Treuhand GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft was appointed by the 10th Annual General Meeting to serve as the auditors of the consolidated annual financial statements and annual financial statements of BRAIN FORCE HOLDING AG for the 2008 financial year. In addition to this work, PwC and partner offices around the world also sporadically perform tax and consulting services on behalf of the BRAIN FORCE Group. In 2008, total consulting fees invoiced by PwC to BRAIN FORCE
HOLDING AG amounted to € 0.12 million. The fee charged for auditing the consolidated financial statements and carrying out audit-related services totaled € 0.18 million. Contractual agreements have been concluded with the holding company for project-related consulting services in 2008 to optimize working capital in the Group.
No separate "internal audit" department has been set up in the light of the company's size. However, an internal controlling and reporting system has been established enabling the Management Board to identify risks and quickly implement an appropriate response. The Supervisory Board, in particular the Audit Committee, is regularly informed about the internal control mechanisms and risk management of the Group. Further information on risk management can be found on this page below as well as in the Notes to the consolidated financial statements on page 79.
Information on disclosures required by Section 243a Austrian Commercial Code can be found in the following sections of the annual report: "On the composition of BRAIN FORCE capital", "Types of shares", "Limitations and Rights", "Authorization to the members of the Management Board to issue and buy back shares" on page 29 as well as in the Notes to the consolidated financial statements on page 73, in point 18, "Direct or indirect stakes in the equity capital of BRAIN FORCE" in the BRAIN FORCE Share and Owners section on page 42. The BRAIN FORCE Group has neither set up an employee participation scheme nor a stock option program. "Change of control" clauses are contained in the Management Board employment contracts and in the bonded loan of Deutsche Bank (refer to the Notes on page 79). The principles of the company's remuneration policy along with a list of the individual remuneration paid to members of the Management Board are contained in the Remuneration Report on page 28. The sale and purchase of shares in the company by members of the corporate bodies of BRAIN FORCE are continually being disclosed on the Website at www.brainforce.com in the section "Investors/Corporate Governance/Directors' Dealings".
The BRAIN FORCE Group is subject to various risks within the context of its international business operations. For the BRAIN FORCE Group, an effective risk management represents a crucial factor for the sustainable preservation of corporate success and the achievement of the business targets designed to create and enhance shareholder value. Accordingly, risk is not only the negative deviation from corporate goals, but also the failure to realize potential profits. BRAIN FORCE strengthened its risk management in 2008 and initiated a centrally managed Group-wide risk management system to take account of the growing size of the company (surpassing € 100 million in revenue for the first time), and the changed business environment. The aim is to regularly and systematically identify risks within the Group, in order to evaluate them in respect to their probability of occurrence and potential damage and to implement suitable countermeasures to manage risk. BRAIN FORCE will focus its efforts on the top 10 corporate risks.
In line with the decentralized structure of the BRAIN FORCE Group, the local business units are responsible for managing operational risks. However, the level of compliance with risk management processes is monitored on the level of the holding company, which also prepares a Group-wide risk report. The relevant events are discussed by the entire Management Board and reported to the Supervisory Board.
Disclosure of auditor`s fees
Risk management and internal control system but no "internal audit" department
Initiation of a Group-wide risk management process focusing on the top 10 risks
Local responsibility but centralized risk management
The planning and controlling processes, Group-wide guidelines, ongoing reporting and the 14 day rolling forecasting comprise the most important instruments of risk monitoring and control. Reporting plays a major role in the monitoring and control of current business risks. Each year, the auditors of the consolidated financial statements also evaluate in the course of the annual audit the proper functioning of risk management processes in the Group and present their conclusions to the Management Board and Supervisory Board. As a contribution to optimal risk prevention and management, the local business units only intentionally take operational risks where necessary, and always in relation to the potential profits. In particular, it is absolutely forbidden to engage in any speculative activities above and beyond the scope of normal business operations. Risks that go beyond the scope of everyday business, such as financial risks, are also monitored by the holding company, and hedged if necessary. From today's perspective, the Group has not identified a single existence-threatening risk with any appreciable probability of occurrence. The biggest individual risk in terms of total value represents less than 10% of Group EBITDA 2008. The assessement of all top 10 risks accounts for approx. 15% of total equity. The relevant risks and the pre-defined countermeasures are described below. Financial risk management Liquidity risk is monitored by ongoing financial planning on the level of the local business units, and also by the Group holding company. In 2008, the basis was established for a cash pool encompassing the most important subsidiaries in Austria, Germany, Italy and the Netherlands. The cash pooling was launched at the beginning of 2009, and enables the holding company to put together an up-to-date settlement of accounts, secure better terms and conditions in investing surplus funds and optimize the Group's financing requirement on the basis of the internal equalization of liquidity and low financing costs. The previous Management Board subscribed for a convertible bond of Kemp Technologies Inc., New York, on September 30, 2005 to the amount of USD 900,000 (due June 30, 2009), which was completely written off in the 2008 financial statements to be on the safe side. However, due to the very positive development in the operating cash flow, a high level of cash and cash equivalents and sufficient lines of credit made available by banks, the financing ability of the BRAIN FORCE Group is independent of the repayment of this convertible bond. It was not necessary to carry out an amortization of the goodwill of SolveDirect (Status on December 31, 2008: € 4.68 million) in the 2008 financial year However, an improvement in the earnings of this subsidiary must be achieved in 2009 to justify the high acquisition price negotiated by the previous Management Board. Because of the fact that the BRAIN FORCE Group operates almost exclusively in the Euro area, currency risk can hardly be considered a problem at the current time. However, within the framework of the planned expansion of business ties to customers in the USA, the holding company will closely monitor the exchange rate risk and take appropriate hedging measures if required. The interest rate risk is the risk related to changes in the value of financial instruments as a consequence of a change in the market interest rates. The interest-bearing financial liabilities of the BRAIN FORCE Group are comprised of 82% fixed-interest and 18% variable-interest components. The investments of liquid funds is carried out within the framework of a cash pool and managed by corporate treasury. A more detailed description of the financing situation is contained in the notes to the consolidated financial statements on page 77. Reporting is an important instrument in monitoring risk Only operational risks are taken No existence-threatening risks have been identified Creation of a Group-wide cash pool to ensure optimized Group financing at a low cost Financing of the BRAIN FORCE Group has been secured Goodwill of SolveDirect confirmed Currency risk plays a minor role but is being monitored Interest rate risk managed by corporate treasury
The BRAIN FORCE Group operates in a highly competitive environment. In addition, software and IT services are subject to cyclical fluctuations. These factors are taken into consideration by focusing on the Group's core competencies and profitable business areas, and by the targeted development of new technologies and penetration of new markets within the framework of the "Strategy 2009+" (see page 36). A surplus of IT consultants can potentially lead to price pressure and uncovered costs. In order to act flexibly and minimize the impact on our profitability, 46% of the employees in our Professional Services segment work for BRAIN FORCE on a free-lance basis.
The BRAIN FORCE Group offers a diverse range of products which are subject to ongoing and rapid technological change and customer demands which are continually changing in ever-shorter cycles. The company's efforts to permanently further develop products and tailor them to market requirements are designed to counteract this risk. Moreover, the growth of the BRAIN FORCE Group is dependent on factors such as the exploitation of customer potential and its success in new markets. The ongoing monitoring and analysis of the markets by local managing directors, who without exception boast long-standing experience in the IT sector, enables the company to minimize the risk of deviating from these crucial factors in achieving goals. In addition, studies prepared by renowned market research institutes are analyzed to evaluate future trends and make sound decisions pertaining to the strategic orientation of the Group.
Despite a broad-based customer basis, the business in the operational subsidiaries of the BRAIN FORCE Group displays a significant level of dependence on individual, large-sized customers. However, this risk is considerably limited by the fact that the five largest customers only account for about 30% of total Group revenues. As a means of minimizing the impact on earnings resulting from a potential loss of customers, the company is continuously striving to expand its customer base and thus reduce its dependence on any individual customers. In addition, the company will attach particular importance 2009 to closely monitor receivables default risk, and has initiated a project to optimize working capital.
Highly qualified specialists and executives are an important success factors in our branch. We offer attractive, performance-based remuneration schemes and professional development programs and trainings to hire and retain top notch employees.
The BRAIN FORCE Group works together with its customers in developing and integrating individualized software solutions, or sells standard software solutions which have usually been developed or improved by the company. In order to identify potential product liability claims at an early stage which arise from program errors or avoid such legal disputes altogether, the development as well as the implementation of the respective product is carried out in a quality controlled manner on the basis of pre-defined processes. When the product is deemed to be market ready, a customer acceptance test occurs which either confirms the proper functioning of the software or identifies deficiencies in the program which must be corrected. Problems arising from program errors are resolved within the context of the warranty period. Ongoing project controlling aims at minimizing potential liability risks from project work. Depending on the size and risk potential of the project, a risk and change management system is installed to support project execution. A legal review of all important contracts is mandatory. Insurance policies have been concluded to protect against specific liability risks and damage claims. The policy size is being continually assessed and oriented to the economic relation of the maximum possible risk and the insurance fees.
The decision-making process of the BRAIN FORCE management is based on internal and external consultations designed to effectively manage and counteract risks relating to the diverse range of tax and legal regulations. The consistent compliance with rules and the evaluation of how employees deal with risks are among the fundamental responsibilities of all managers in the company.
There is no further risk involved in connection with the dismissal of the former CEO Helmut Fleischmann in September 2007, and the lawsuits filed at court by both parties, due to the fact that an out of court settlement was reached in November 2008.
Focus on core competencies and profitable business areas is designed to minimize risks related to future earnings
The product portfolio is oriented to customer requirements and expected trends and is being continually adapted
Top 5 customers account for 30% of Group revenues
Employee retention promoted by trainings and performancebased remuneration
Insurance policies concluded to protect against specific contract liabilities arising
Decisions made on the basis of internal and external consultations
Out of court settlement with the former CEO
Leading IT services Group with 1,153 employees in seven European countries
BRAIN FORCE was established in 1983
BRAIN FORCE is a leading IT services group with approximately 1,153 employees at 12 locations in seven European countries. The corporate headquarters of BRAIN FORCE, a publicly listed company on the Vienna Stock Exchange, are located in Vienna, Austria. Germany is the largest single market, generating 48% of total revenues, followed by South West Europe (particularly Italy) which contributes 27%, Central East Europe (led by Austria) with a 15% share of revenues, and North Europe (Netherlands) which accounts for 10% of revenues.
Founded in1983, BRAIN FORCE has considerably expanded its portfolio of products and services since the Initial Public Offering in the year 1999 (Neuer Markt segment in Frankfurt). The core business of the company rests upon two pillars.
u The Business Solutions area develops solutions to support business processes in companies, enabling them to achieve competitive advantages.
u The Infrastructure Optimization area offers solutions providing companies with a more manageable and efficient IT infrastructure and thus increasing the productivity of BRAIN FORCE customers.
This portfolio is complemented by Professional Services ("body leasing") in Germany and Austria, where BRAIN FORCE recruits and supplies IT specialists for customer requirements.
BRAIN FORCE is represented at the following locations:
BRAIN FORCE offers intelligent IT solutions on the basis of best practices, effective services and innovative products in the fields of Business Solutions and Infrastructure Optimization. Professional Services complement the BRAIN FORCE portfolio, offering the recruitment and provision of the right IT experts at the right time. Customers profit from a tailor-made service offering, flexible solutions and products. Professional IT processes reduce costs and contribute to the business success of customers.
Business Solutions encompass solutions in the following areas:
| Business Solutions | Infrastructure Optimization | |
|---|---|---|
| Enterprise Resource Planning Customer Relationship Management Corporate Performance Management/ Business Intelligence |
to be implemented through Business Units in every country |
Server and Data Management Workspace Management Application Provisioning and Control Communication and Collaboration |
| Financial Services Solutions | driven by central Competence Centers ("do once approach") |
IT Service Management Solutions Network Management & Billing |
Recruitment and staffing of IT experts in selective countries
Intelligent IT solutions contribute to the business success of customers
BRAIN FORCE supplies optimized solutions for businesscritical processes
We provide customers with a more manageable and efficient ICT infrastructure
Merger of the German subsidiaries to exploit synergies and ensure closer cooperation
In August of the 2008 financial year, the German company BRAIN FORCE SOFTWARE GmbH merged with BRAIN FORCE Frankfurt GmbH, in order to further intensify the cooperation of both firms and optimize the cost structure. Moreover, BRAIN FORCE Hamburg GmbH, a 100% subsidiary of BRAIN FORCE in Germany, was sold to the Thalanx Group, and an ongoing, extensive collaboration agreement on a project basis was concluded with this customer.
The following chart shows the existing Group structure on the balance sheet date:
*) of which 85% is held by BRAIN FORCE Software s.r.o., Czech Republic, and 15% by BRAIN FORCE GmbH, Austria
Following the successful consolidation of the company, the management has set the course for the future, with BRAIN FORCE focusing on solutions with high growth potential based on the existing product and service offering. The Business Solutions and Infrastructure Optimization areas will comprise the two pillars of the company in the future.
The product and service offering in these two growth areas will not only be covered in individual countries in the future, but by local business units throughout the Group, enabling increased visibility and recognition of the BRAIN FORCE brand on an international level. Furthermore, BRAIN FORCE is marketing its existing portfolio (financial services solutions, IT Service Management, ICT Suite) from a central location on the basis of a competence center structure in accordance with the "do once approach", in order to bundle know-how and reduce costs.
In order to strengthen the position of the BRAIN FORCE Group in the Business Solutions area, the potential acquisition of established providers in the fields of ERP, CRM and CPM/BI is being evaluated. At the same time, the company is promoting the marketing of its own software solutions such as FINAS Suite (sales and consulting solutions for financial service providers), Rebecca (mortgage administration) and Jupiter (asset management) in accordance with the respective market potential.
The Infrastructure Optimization area attaches particular importance to expanding its offering of services and software products with growth potential to other markets. The focus is on those services and products which are already being successfully marketed by the Group in individual countries and which are suitable for application on an international basis, in particular Workspace & Server Management for dynamic, user-oriented workplaces, along with Application Provisioning & Control for highly available and compatible applications. The company aims to organically extend or further expand this business area to all existing local markets.
Focus on solutions with high growth potential
Creation of a clearly-defined core competence and increase brand recognition
Expanded market position for Business Solutions through acquisitions
Organic expansion of Infrastructure Optimization solutions in all BRAIN FORCE markets
The Infrastructure Optimization portfolio is complemented by solutions focusing on issues such as IT Service Management (SolveDirect Solutions developed in Vienna, Austria), Network Management & Billing (ICT Suite from Berlin, Germany) and Communication & Collaboration (from Veenendaal, Netherlands), which will be marketed in each case from a central location.
The solutions offered by BRAIN FORCE focus on offering efficient consulting in respect to the selection, implementation and maintenance of suitable products. These products are partly developed by BRAIN FORCE itself, and partly from business partners. Irrespective of the particular software products, BRAIN FORCE also provides suitable experts for customer projects. These specialists are made available in Austria and Germany by a separate Professional Services competence center ("body leasing").
The new strategic orientation is designed to create a stronger awareness of the BRAIN FORCE Group on the marketplace on the basis of a clearly recognizable core competence, lay the groundwork for greater revenue potential and an improved cost structure. Following numerous acquisitions carried out in the past, the current focus is on the efficient integration of the new companies and the exploitation of synergies. This approach will further strengthen the successful business operations of the BRAIN FORCE Group and provide the basis for the penetration or expansion of new trend-setting business areas.
The decisive factor underlying the success of BRAIN FORCE is the ability to offer the optimal combination of software and services for the benefit of our customers. For this reason, it is absolutely essential to continually improve our portfolio of products and services. Research and development carried out at the BRAIN FORCE Group focus on the Business Solutions and Infrastructure Optimization areas. In the 2008 financial year, BRAIN FORCE invested a total of about € 1.30 million in developing its own software products.
New software solutions in a FINAS environment were developed by our German subsidiary in the past financial year, and tailored to the market conditions prevailing in the banking and insurance sectors. The BRAIN FORCE Abgeltungsteuer Plus (tax optimized investment) solution was launched, enabling investment consultants to optimize the portfolio of private customers in the light of revisions to German tax regulations. The solution BRAIN FORCE Wohnriester (building financing with government aid) significantly simplifies personal consultations on the issue of retirement benefits in Germany. An additional consultant solution was developed for BRAIN FORCE Basisrente direkt (tax optimized pension planning) to calculate pension provisions and thus efficiently compare the old and new tax laws in Germany. Furthermore, the software BRAIN FORCE Vorsorgeoptimierung (optimization of pension planning) was certified by the testing and inspection organization TÜV Süd, which confirmed its legal compliance and efficiency as a consulting solution.
In Italy, our subsidiary rolled out a new version for MS Dynamics NAV, a significant extension of capabilities in comparison to the standard version, encompassing functionalities such as bank information management, cost center reclassification and periodic invoicing. The sales start of the new software was timed to enable our customers to fulfill the new requirements contained in Italian financial laws in a timely manner. In the fourth quarter, BRAIN FORCE Italy presented Version 8.8 of its own ERP development Visual Space, adapting the user interface to have the same look and feel as MS Outlook while simultaneously incorporating other functional and technical extensions of the interface. In addition, competencies in the field of supply chain management were newly established and the product offering in the field of ERP add-ons was expanded on the basis of the acquisition of MyPlan and the recruitment of a small team of professionals.
Centralized marketing of existing solutions
Professional Services complement the core business areas in Germany and Austria
Creation of revenue potential and an improved cost structure
Research and development in the fields of Business Solutions and Infrastructure Optimization
Extended consulting solution FINAS, TÜV Süd certifies BRAIN FORCE Vorsorgeoptimierung
New ERP updates, development of a supply chain management competence in Italy BRAIN FORCE Packaging Robot 2.1 enables the quicker and more cost-effective roll out of new systems
New SolveDirect solutions improve IT service quality
A new version of BRAIN FORCE Desktop Manager was rolled out in the Technology & Infrastructure area in the Netherlands. This allows companies to more effectively manage and monitor servers and PCs. Softgrid Support was also extended to facilitate the administration of the configuration, applications and user profiles from a central server onto individual PCs, thus significantly reducing the time and expense connected to the internal administration of a company's ICT infrastructure. The marketing of Packaging Robot 2.1 was launched in the fourth quarter of 2008. Companies aiming to implement the virtualization of their software applications now have the opportunity to generate VMware ThinApp packages. Existing formats can be virtualized, enabling the quicker and more cost-effective roll out of new software solutions and systems in corporate networks.
The BRAIN FORCE Division SolveDirect in Austria adapted the product SD.cube ML (ML stands for Multi Level) to the new demands of the marketplace. SD.cube ML enables a standardized and automated service process among several participants (service customer and service provider), creating a transparent service process. SD.cockpit constitutes an important component of SD.cube ML, providing for more efficient service management in a company. It provides an overview of the most important IT service management indicators, improving the quality of IT services and optimizing decision-making processes by mean of "realtime monitoring". At the end of 2008, SolveDirect launched its Winter Release 5.0, an IT service management platform which offers simplifications for quicker and more efficient work, as well as three special functions for service customers and service providers: SD.calendar to optimize technology management at a help desk, SD.survey to measure IT service quality, and SD.cockpit to coordinate the entire service supply chain with all integrated service partners.
Employees are the human capital of BRAIN FORCE
Trainings and knowledge transfer ensure employee satisfaction
Employees are the human capital of BRAIN FORCE. Their know-how and commitment are responsible for the success of the company. Our employees have enabled BRAIN FORCE to achieve a very good operating result in 2008, and thus once again transform it into a successful growth-oriented company. The ongoing, specialized training, further education and professional development of our employees is essential in order to effectively deal with the continuing changes and innovations in the fast-moving IT sector. This training starts with the IT consultants out working for customers, but is also provided to administrative and sales staff.
Regular training programs on the basis of Microsoft, VMware and Citrix, such as that carried out in the Netherlands, ensure a high level of customer acceptance and at the same time promote an aboveaverage employee satisfaction, as demonstrated in a company survey. Our Italian employees have to be continually trained and certified in the latest technologies developed by Microsoft Dynamics, Oracle, Symantec and Cisco as a basis for enabling greater market penetration. Considerable importance is also attached to knowledge transfer within the BRAINF FORCE Group. The BRAIN FORCE Academy in Austria provides a platform for the specialized transfer of know-how between the Professional Services area and SolveDirect. The operational dashboard meeting held once a month on Fridays presents and discusses important projects. In Germany, round table talks coordinated by top management take place to promote the exchange of ideas and expertise among employees and the different business areas.
An integral aspect of the new corporate strategy is promoting the intensive interaction of employees in each business area but also on an international basis. The newly developed approach plans to offer the BRAIN FORCE product and service portfolio in the Business Solutions and Infrastructure Optimization areas internationally and to market it on the basis of a unified approach. Moreover, the existing portfolio in financial services solutions, service management and ICT Suite will be offered from a central location on the basis of a competence center structure in accordance with the "do once approach", in order to bundle know-how and reduce costs. Both marketing approaches require close cooperation of our employees beyond the respective national borders in which they live and work.
The total number of employees working for the BRAIN FORCE Group as at December 31, 2008 amounted to 816 salaried employees, which represents a decline of 5% in the consolidation year 2008. In addition, BRAIN FORCE employed 313 people on a free-lance basis for numerous customer projects, a figure which is 11% higher than in the previous year. In total, the BRAIN FORCE Group employed 1,129 people at the balance sheet date of December 31, 2008, a slight drop of 1% from the comparable level of 2007.
The breakdown of staff (salaried and free-lance) by region as at December 31, 2008 is as follows:
On average, the staff of BRAIN FORCE was comprised of 846 salaried employees in the 2008 financial year (previous year: 854) and 307 people on a free lance basis (previous year: 310). All in all, the total average number of employees declined by 1%, same as the change in total headcount at the balance sheet date, to 1,153 people.
Intensive cross-border interaction among employees as an integral component of the corporate strategy
Slight decline in total staff in the consolidation year 2008
The European Commission expects a significant economic downturn in 2009 as a consequence of the economic and financial crisis. The gross domestic product (GDP) in the European Union is expected to decline by 1.8% in the current year, a development which will also be reflected in the most important markets of the BRAIN FORCE Group. Accordingly, forecasts call for negative GDP growth of 1.2% in Austria, 2.3% in Germany and 2.0% in both Italy and the Netherlands. The European Commission also anticipates a slight recovery at the end of the year, already leading to a slight GDP growth of 0.5% in 2010. Measures designed to stabilize financial markets, the easing of monetary policies and the numerous economic stimulus packages should boost economic prospects in the European Union and serve as the basis for a gradual recovery in the second half of the year. The management of the BRAIN FORCE Group does not share this optimistic assessment, and is thus preparing for a period of very weak economic development up until the year 2010.
Information technology is expected to remain the growth driver in the EU, further expanding in the current financial year despite the weakening of the global economy. According to forecasts issued by the international market research institute EITO, revenues derived from the sale of computers, software and IT services in Western Europe will increase by 2% in 2009 to about € 315 billion. The institute considers
Europe's IT sector also expected to grow in 2009
BRAIN FORCE doubts the current economic forecasts and is preparing for a difficult business environment
Economic forecasts for Germany are being continually revised downwards
Experts expect a decline in Italy's IT market but growth in Austria and the Netherlands
BRAIN FORCE anticipates recovery in IT expenditures in 2010 at the earliest
information technology to be strategically crucial to companies during an economic crisis, because it enables the firms to operate even more efficiently and profitably. For this reason, providers of software and IT services should expect 2009 revenues in Western Europe to rise 3.2% to € 228 billion, according to EITO. In Germany, the high-tech association BITKOM revised its revenue forecasts for 2009 downwards. Following the expected 1.2% growth in the German market for information technology, telecommunications and
digital consumer electronic in 2008, the latest predictions call for total revenues of € 144.6 billion in 2009, at approximately the same level as the previous year. However, the BITCOM forecast calls for a 1.5% growth in the information technology sector in 2009 to € 67 billion. This growth in the IT business will be driven by providers of software and IT services, which are expected to expand their German revenues by 3.1% to € 48.5 billion in 2009.
In Italy, an overall decline in IT revenues is expected in the current year, whereas software providers are expected to match their 2008 performance. Market analysts foresee 4.2% growth on the Austrian market, whereas overall expansion of 1.1% is forecasted in the IT sector in the Netherlands, though the software segment should grow by 5.0% and IT services by 4.0%.
The BRAIN FORCE management considers the forecasts of IT experts in Germany, Italy, Austria and the Netherlands to be overly optimistic, and expects a slight decrease in IT expenditures in these markets for 2009. BRAIN FORCE anticipates an upturn in IT expenditures in the course of 2010 at the earliest. Up until this time, customer investments will tend to focus on solutions designed to optimize their IT infrastructure, precisely the types of servies BRAIN FORCE offers in all its markets.
The year 2008 was shaped by the global financial crisis and massive losses on all relevant benchmark indices. In the first half of the year, stock markets still generally managed to hold their ground despite the massive increase in raw material prices. In contrast, the effects of the subprime mortgage crisis in the U.S. real estate market led to considerable turbulence on capital markets during the second half of 2008. The related collapse of several financial institutions and investment houses such as Lehman Brothers resulted in the collapse in share prices spanning almost all branches starting in September. The Vienna benchmark index ATX registered a 62% decline in value, reaching its high for the year of 4,549 points at the very beginning of 2008 and closing at 1,751 points on December 31, 2008. The German DAX index was not spared a similar fate, losing 39% in value between the highest level for the year of 7,949 points reached in January 2008 and the 4,810 points at the close of trading on December 31, 2008. However, the poor performance of all important indices was not related to the problems of numerous financial institutions, but also the expected recession in 2009 arising in connection with the credit crunch. Accordingly, the Dow Jones Industrial Index fell by 33% in 2008, and the NASDAQ-100 and TECDAX benchmark indices of particular relevance to the IT sector declined by 41% and 48% respectively in 2008.
The development of the BRAIN FORCE share in the first few months of 2008 was strongly impacted by the takeover offer of BF Informationstechnologie-Beteiligungsgesellschaft mbH (BFIB). In contrast, the delisting of the share in Germany as of May 13, 2008 and the trading focus on the Vienna Stock Exchange did not have any perceptible effects on the share price. The BRAIN FORCE share commenced trading on the Vienna Stock Exchange in 2008 at a share price of € 1.92 per share, and rose considerably in value as a result of the takeover offer, first to € 2.30 at the end of January and later to € 2.40 in the middle of February. At the beginning of April, the share traded at its yearly high of € 2.58. Up until October, the value of the BRAIN FORCE share remained fairly constant without major fluctuations, and was traded at approximately the share price contained in the takeover offer which expired in July. Despite the outstanding business results of the company which were already foreseeable in the meantime, the intensification of the financial crisis in October led to massive share price losses. Accordingly, the BRAIN FORCE share traded at its lowest point of € 1.01 at the end of November. The share price recovered significantly in December, and the stock closed the year 2008 at € 1.89, corresponding to a market capitalization of about € 29 million.
The volume of BRAIN FORCE shares traded on the Vienna Stock Exchange declined by 70% compared to the previous year, to € 3.53 million, corresponding to an average daily turnover of 8,166 shares (counted once). This development is primarily related to the takeover offer submitted by a subsidiary of Cross Industries AG and the lower number of shares in free float resulting from this. However, over-the-counter trading volume in the BRAIN FORCE share on Vienna's capital market reached a respectable level of € 12.7 million in 2008, more than three times the turnover in the preceding year (2007: € 4.0 million). Accordingly, 78% of total trading in BRAIN FORCE shares in the course of 2008 took place within the context of off-market trading. Total 2008 turnover (Vienna Stock Exchange and OTC) even rose by 1% compared to the previous year.
The global financial crisis leads to heavy losses on all relevant benchmark indices
Development of the BRAIN FORCE share in 2008 strongly affected by the takeover offer
Significant decline in stock exchange volume due to takeover offer, strong rise in OTC trading
| Key Data per Share | 2008 | 2007 | Chg. in % | |
|---|---|---|---|---|
| Earnings | in € | -0.14 | -1.29 | +89 |
| Adjusted earnings1) | in € | 0.09 | -0.47 | >100 |
| Dividend | in € | 0.00 | 0.00 | - |
| Free cash flow2) | in € | 0.25 | -0.30 | >100 |
| Equity | in € | 1.57 | 1.71 | -8 |
| Share price high | in € | 2.58 | 3.46 | -25 |
| Share price low | in € | 1.01 | 1.76 | -43 |
| Share price at year-end | in € | 1.89 | 1.92 | -2 |
| P/E ratio high3) | 27.8 | -7.4 | - | |
| P/E ratio low3) | 10.9 | -3.8 | - | |
| P/E ratio at year-end3) | 20.3 | -4.1 | - | |
| Share outstanding (weighted) | in 1,000 | 15,387 | 15,387 | 0 |
| Market capitalization at year-end | in € mill. | 29.08 | 29.54 | -2 |
| Average stock exchange turnover/day | in € 1,000 | 36.67 | 98.05 | -63 |
1) Excluding non-recurring income and expense; see also explanation on page 44 and 45
2) Cash flow from operating activities minus cash flow from investting activities plus acquisitions
3) Based on adjusted earnings per share
Management Board proposes to pay no dividend for 2008
1 BEKO HOLDING AG 53.85%
2 CROSS Industries AG 0.63%
3 Erster Privater Investmentclub Börsebius Zentral (GbR) 11.40%
4 Free Float 34.12%
Investor relations designed to inspire the confidence of all capital market participants
The relaunch of the Website and IR area makes all relevant information available for download
Ownership / Takeover offer On March 20, 2008, BF Informationstechnologie-Beteiligungsgesellschaft m.b.H. (BFIB), a subsidiary of Unternehmens Invest AG and CROSS Industries AG, submitted a mandatory takeover offer to BRAIN FORCE shareholders amounting to € 2.40 per share to acquire all the shares in BRAIN FORCE HOLDING AG. Following expiration of the takeover offer on July 22, 2008, BFIB held a 46.82 % stake in the share capital of the company. Together with a voting rights agreement concluded with BEKO Holding AG, BFIB exercised control over 53.14% of the voting rights. As of the end of July, Helmut Fleischmann Privatstiftung reduced its shareholding in BRAIN FORCE to below 5%. 4 2 3 1
The Management Board will propose to the Annual General Meeting scheduled for May 14, 2009 that no dividend be distributed for the 2008 financial year, in order to build up a sufficient level of cash and financ-
In September 2008, 100% of BFIB was integrated into BEKO Holding AG, which currently holds a 53.85% stake in BRAIN FORCE HOLDING AG. CROSS Industries AG, the parent company of BEKO, owns a further 0.63% shareholding in our company. Furthermore, we were informed that the investors association Erster Privater Investmentclub Börsebius Zentral (GbR), Cologne, Germany, controls 11.40% of the voting rights in BRAIN FORCE HOLDING AG as of January 21, 2009. This investment club consists of about 1,000 private German shareholders. Moreover, the share capital totaling € 15,386,742 and no-par value shares are in free float. 2 Zentral-Osteuropa 24% 3 Süd-Westeuropa 14% 4 Nordeuropa 10%
The Management Board of BRAIN FORCE HOLDING AG pursues a transparent and professional communications policy in its investor relations activities. We are putting considerable effort into inspiring confidence in the company among all target groups of relevance to the capital market, and continually striving to renew this confidence. Investor relations are coordinated by the Chief Financial Officer but closely involve the Chief Executive Officer as well. The declared goal of our IR work is to convey an accurate picture of the company as a means of enabling a correspondingly accurate assessment of the BRAIN FORCE share.
In the 2008 financial year, the BRAIN FORCE management presented the company at two investor conferences and several one-on-one meetings. The German Equity Forum held in Frankfurt on November 12, 2008 served as an important event to present the very good third quarter business results of the company to investors and analysts, announce a more optimistic outlook for the year 2008 as a whole and introduce the new
corporate strategy. Moreover, the investor relations area was also redesigned within the context of the Website relaunch. This provides the basis for offering an easily navigable and understandable platform containing all
relevant information to all those who are interested in the company and the BRAIN FORCE share.
The Management Board of BRAIN FORCE HOLDING AG was informed by the Vienna Stock Exchange on March 3, 2009 that the shares in the company would be removed its listing on the Prime Market segment effective March 23, 2009. The Vienna Stock Exchange justified its decision exclusively on the grounds that BRAIN FORCE no longer fulfilled the criterion of a minimum market capitalization in free float. As of March 23, 2009, the ordinary shares of BRAIN FORCE HOLDING AG will be listed in the Standard Market Continuous of the Vienna Stock Exchange. Our shareholders can rely on the fact that BRAIN FORCE will continue to meet the strict corporate governance and transparency standards of the Prime Market despite the changeover to another market segment.
The BRAIN FORCE share (15,386,742 outstanding no par value bearer shares) is currently being covered by SES Research (Hamburg, Germany). All analyses of the company carried out since the year 2005 are available for download in the investor relations area of our Website.
BRAIN FORCE is listed on the Standard Market Continuous as of March 23, 2009
Analyses on the company are available on the Website
| Investor Relations: | Thomas Melzer |
|---|---|
| Phone: | +43 1 263 09 09 12 |
| E-Mail: | [email protected] |
| Internet: | www.brainforce.com |
| Vienna stock exchange: | BFC |
| Reuters: | BFC.VI |
| Bloomberg: | BFC AV |
| Datastream: | O:BFS |
| ISIN: | AT0000820659 |
From an operating perspective, the financial year 2008 turned out to be very positive. This was due to the consistently and swiftly implemented restructuring measures of the past one and a half years as well as to shifting the focus on profitable business segments.
Group revenues rose 8% over the prior year to € 106.21 million, with all regions being able to generate sales increases. Adjusted for SolveDirect.com Internet-Service GmbH, Vienna, which was acquired in July 2007, and BRAIN FORCE Hamburg GmbH, which was deconsolidated as of September 30, 2008, the organic growth amounted to 6%. Despite the sale of BRAIN FORCE Hamburg GmbH the Germany region increased revenues by 10% to € 51.25 million and accounted for 48% of group revenues. In Central East Europe revenues rose 5% to € 15.48 million and the segment generated 15% of total revenues. The South West Europe region recorded a rise of 4% to € 28.42 million, which equals a share of 27% in group revenues. The North Europe region recorded a double-digit increase of 17% to € 11.06 million, accounting for 10% of total revenues. A stronger demand for IT services and products and good general economic conditions had a positive effect on the business success of the BRAIN FORCE Group despite a streamlining of the product and service portfolio.
| Profitability ratios | 2008 | 2007 |
|---|---|---|
| in % | in % | |
| Gross profit to revenues | 25.8 | 19.6 |
| Selling expenses to revenues | 10.9 | 12.1 |
| Administrative costs to revenues | 10.3 | 14.5 |
| Operating EBITDA margin1) | 7.3 | 2.5 |
| Operating EBIT margin1) | 3.6 | -2.6 |
1) Adjusted for non-recurring income and expense
The reporting year 2008 was very positive also in terms of results. The Group's EBITDA rose from € 0.35 to 7.79 million and EBIT (operating result) from € -16.68 to +3.83 million. The prior year EBIT included impairment of goodwill and other intangible assets in the amount of € 11.74 million as well as restructuring cost of € 2.41 million. From a purely operating perspective, the result increased significantly by € 6.36 million, to which all operating companies contributed. The Group's holding company also contributed significantly to this result by cost savings in the amount of € 0.73 million.
| EBIT by region | 2008 | 2007 | Change |
|---|---|---|---|
| in € million | in € million | in % | |
| Germany | 2.47 | -11.51 | >100 |
| Central East Europe | 0.50 | -0.18 | >100 |
| South West Europe | 1.07 | 0.86 | +24 |
| North Europe | 0.40 | -1.74 | >100 |
| Holding and Other | -0.60 | -4.12 | +85 |
| BRAIN FORCE Group | 3.83 | -16.68 | >100 |
The Germany region increased EBIT following the prior year, which was marked by impairment and restructuring, from € -11.51 to +2.47 million. The prior year figure included impairment of € 9.16 million and restructuring costs in the amount of € 0.93 million. Thus, the comparison of operating results shows an increase of € 3.89 million.
Positive EBIT in Central East Europe
EBIT in Central East Europe rose from € -0.18 to +0.50 million. The prior year figure included impairment of € 0,13 million and restructuring costs of € 0.20 million. Compared to the prior year, the operating EBIT was up +233%.
In South West Europe EBIT reached € 1.07 million, whereas in 2007 the operating result at € 0.86 million was significantly lower due to impairment (€ 0.38 million) and restructuring costs (€ 0.55 million).
In 2008 the North Europe region was able to raise EBIT from € -1.74 to +0.40 million. The prior year was negatively affected by impairment charges of € 2.07 million. No restructuring costs were incurred in North Europe.
In 2008, the Professional Services segment accounted for € 26.20 million (prior year: € 26.15 million) or 25% of group revenues, the Business Solutions segment generated € 38.21 million (prior year: € 38.16 million) or 36% and the Technology & Infrastructure segment € 41.80 million (prior year: € 34.02 million) or 39%. Compared to the prior year, revenues in the segments Professional Services and Business Solutions remained almost unchanged, whereas the Technology & Infrastructure segment grew significantly. The described development mainly results from two-digit sales increases of BRAIN FORCE B.V., Netherlands, and of the Frankfurt branch of BRAIN FORCE SOFTWARE GmbH, Germany.
| Income statement | 2008 | 2007 | Change |
|---|---|---|---|
| in € million | in € million | in % | |
| Revenues | 106.21 | 98.33 | +8 |
| Cost of sales | -78.79 | -79.06 | -0 |
| Gross profit | 27.41 | 19.28 | +42 |
| Selling expenses | -11.53 | -11.90 | -3 |
| Administrative expenses | -10.98 | -14.24 | -23 |
| Other operating expenses | -1.75 | -1.71 | +13 |
| Other operating income | 0.69 | 0.53 | +71 |
| Impairment of goodwill | 0 | -8.65 | -100 |
| Operating result (EBIT) | 3.83 | -16.68 | >100 |
| Financial result | -1.45 | -0.71 | >100 |
| Result from associates | 0 | -0.51 | -100 |
| Profit before tax | 2.38 | -17.91 | >100 |
| Income taxes | -4.48 | -2.00 | >100 |
| Profit after tax | -2.10 | -19.91 | +89 |
Slight improvement in South West Europe
EBIT turnaround in North Europe
Interest cover of 9x in 2008
Negative earnings after tax due to change in law and takeover
Adjusted EPS improved from € -0.47 to +0.09
The financial result deteriorated from € -0.71 to -1.45 million. The write-off of the KEMP convertible bond accounts for € 0.63 million of the decline in the amount of € 0.73 million and higher interest expenses for financing the variable portions of the purchase price (earn-out) from prior periods account for the rest. The interest cover (ratio of EBITDA to net interest) was 9x in 2008.
The profit before tax reached € +2.38 million, compared to € -17.91 million in the prior year. The earnings after tax rose from € -19.91 to -2.10 million. Although the result could be improved significantly year-on-year, due to a change in German tax law capitalized loss carry-forwards in the amount of € 2.90 million had to be written off, which resulted in negative earnings after tax.
Earnings per share (EPS pursuant to IFRS) improved from € -1.29 to -0.14. After adjustment for nonrecurring expenses incurred in 2008 for the write-off of the KEMP convertible bond and the German loss carry-forwards, an adjusted EPS of € +0.09 results, which is contrasted with the 2007 EPS of € -0.47 that had been adjusted for restructuring costs and charges.
Balance sheet total down 11%
Financial position
| Balance sheet total down 11% | The balance sheet total declined by 11% year-on-year to € 66.31 million. This is due primarily to an im provement in the working capital, to lower provisions for purchase price payments and the related reduction of goodwill, as well as the derecognition of loss carry-forwards in Germany. |
|---|---|
| Own work capitalized | The portion of non-current assets to total assets declined to 43% (prior year: 47%). In the past financial |
| accounts for 4% of total | year capital expenditure on property, plant and equipment and other intangible assets amounted to € 2.45 |
| assets | million, € 1.30 million of which was accounted for by development costs. At the balance sheet date Decem |
| ber 31, 2008 the development costs reported in the balance sheet totaled € 2.92 million (prior year: € 3.31 | |
| million) and thus accounted for 4% (prior year: 4%) of total assets. | |
| Reduction of goodwill not | Goodwill declined by € 1.35 million, due primarily to the adjustment of the variable purchase price obliga |
| affecting net income | tions (earn-out payments) that did not affect income. The acquisition of BRAIN FORCE B.V., Netherlands |
| (formerly VAI B.V.) accounts for € 0.32 million thereof, the acquisition of SolveDirect.com Internet-Service | |
| GmbH for € 0.90 million. |
Within non-current assets, other receivables and assets declined by € 0.65 million. The decline is due to the write-off of the convertible bond of KEMP Technologies Inc., USA, in the amount of USD 900,000. As a result of the economic development of this company and the difficult general conditions in the USA the repayment by KEMP Technologies Inc., USA, at the maturity date June 30, 2009 is considered uncertain and a conversion into shares seems unattractive.
As of December 31, 2008, deferred tax assets amount to € 0.05 million, which is € 2.58 million lower than the prior year figure. This decline and the resulting increased income tax expense are due to the write-off of capitalized tax carry-forwards in the amount of € 2.90 million at BRAIN FORCE Software GmbH, Munich. Despite the good earnings trend the write-off of the tax loss carry-forwards had to be made as a result of an amendment to the German Corporate Income Tax Act. By the Unternehmensteuerreformgesetz (Corporate Tax Reform Act) 2008 the restrictions on loss deductibility were significantly tightened. As of the financial year 2008, the regulation provides for restrictions on loss deductibility in case of indirect or direct transfers of shares or voting rights. By the takeover bid of BF Informationstechnologie-Beteiligungsgesellschaft m.b.H., Wels (BFIB) and the subsequent transfer of this company into BEKO HOLDING AG, the majority of the shares in BRAIN FORCE HOLDING AG were taken over in 2008. Thus, the loss carry-forwards had to be derecognised pursuant to IFRS. However, the constitutionality of this loss carry-forward regulation is disputed by legal experts, which could result in an amendment and, subsequently, in a rerecognition of tax loss carry-forwards. Until a decision is rendered by the Supreme Court, BRAIN FORCE will challenge the tax assessments by German fiscal authorities.
Write-off of Kemp convertible bond
Derecognition of German loss carry-forwards became necessary following a change in the law and takeover
| Balance sheet ratios | 2008 | 2007 | |
|---|---|---|---|
| Equity | in € million | 24.15 | 26.27 |
| Equity ratio | in % | 36.4 | 35.3 |
| Net debt | in € million | 4.89 | 6.53 |
| Gearing | in % | 20.2 | 24.9 |
| Working capital | in € million | 5.38 | 4.77 |
| Working capital to revenue | in % | 5.1 | 4.9 |
| Net debt / EBITDA | 0.6 | 18.7 | |
| EBITDA / net interest | 9.3 | 0.5 | |
| EBIT / net interest | 4.6 | n.a. | |
| FFO 1) / net debt | in % | 98.2 | n.a. |
1) FFO = Funds from Operations = Gross cash flow
Current assets declined by € 1.89 million to € 37.63 million and amount to 57% (prior year: 53%) of total assets. The decline in absolute terms is mainly due to the decrease in trade receivables. Despite the sales increase of 8% receivables could be reduced by 5% through efficient management. The days of sales outstanding (DSO) declined from 84 to 80 days by year-end. This high number is due to the general Italian payment terms.
Cash and cash equivalents, including cash in hand and bank balances, declined by 7% to € 8.80 million. By the significant rise in the operating cash flow cash and cash equivalents could be maintained almost at the prior year level despite investments of € 4.64 million and decrease of financial liabilities of € 2.28 million.
As of December 31, 2008 the Group's equity amounts to € 24.15 million and is 8% lower than the prior year figure. Despite the very good earnings trend in the financial year 2008, equity declined due exclusively to one-off effects (write-off of KEMP bond € 0.63 million, write-off of deferred taxes Germany € 2.90 million). As a result of the decline in the balance sheet total, the equity ratio increased from 35 to 36%.
The interest bearing liabilities (financial liabilities) fell by € 2.28 million to € 13.69 million, € 10.98 million (prior year: € 11.31 million) of which relating to non-current financial liabilities. 82% of financial liabilities carry fixed interest rates, and the rest variable interest rates. An analysis of the term structure shows that € 9.94 million of financial liabilities mature in 2014. € 1.03 million is due between 2010 and 2012. € 0.26 million of the remaining € 2.71 million (current financial liabilities) relates to loans with agreed repayment schedule, € 2.45 million relates to used bank credit lines.
| Calculation of net debt | 2008 | 2007 | Change |
|---|---|---|---|
| in € million | in € million | in % | |
| Non-current financial liabilities | 10.98 | 11.31 | -3 |
| Current financial liabilities | 2.71 | 4.66 | -42 |
| - Cash and cash equivalents | -8.80 | -9.44 | -7 |
| Net debt | 4.89 | 6.53 | -25 |
As of December 31, 2008, net debt amounted to € 4.89 million, which is 25% down from the prior year figure of € 6.53 million. Net debt declined as a result of the increased operating cash flow. The ratio of net debt to EBITDA was 0.6x, as compared to 18.7x in the prior year.
At the balance sheet date, other provisions amount to € 1.17 million, as compared to € 4.16 million in the prior year. € 2.34 million of this decline results from variable purchase price payments (earn-out payments) for companies acquired in prior years (SolveDirect and BRAIN FORCE Netherlands). Furthermore, the adjustments for expected purchase price payments resulted in a reduction of € 1.22 million that did not affect income. A total of € 0.90 million was allocated to warranty and other provisions. All other provisions are current (prior year: € 2.56 million).
Reduction of DSO from 84 to 80 days
Maturity of financial liabilities
Significant increase in the operating cash flow
Due to the significant improvement of the operating result the gross cash flow could be increased to € 4.80 million (prior year: € -3.96 million). Taking into account the cash inflow from the reduction of the working capital, a cash flow from operating activities of € 6.28 million (prior year: € -2.02 million) was generated. The cash flow from investing activities amounted to € -4.64 million (prior year: € -9.55 million). The free cash flow (cash inflow from the operating cash flow minus the cash flow from investing activities plus payments for acquisitions of companies) amounted to € 3.86 million (prior year: € -4.64 million). A cash outflow of € 0.09 million results from the sale of BRAIN FORCE Hamburg GmbH, Germany. The cash flow from financing activities shows a balance of increase and repayments of financial liabilities in the amount of € -2.28 million.
| Cash flow statement | 2008 | 2007 | Change |
|---|---|---|---|
| in € million | in € million | in % | |
| Cash flow from operating activities | 6.28 | -2.02 | >100 |
| Investments in property, plant and equipment and other intangible assets | -2.45 | -2.82 | +13 |
| Acquisition of subsidiaries | -2.22 | -6.93 | +68 |
| Divestments and others | 0.03 | 0.20 | -85 |
| Cash flow from investing activities | -4.64 | -9.55 | +51 |
| Acquisition of subsidiaries | +2.22 | +6.93 | -68 |
| Free cash flow | +3.86 | -4.64 | >100 |
1 Germany 48%
4 North Europe 10%
2 Zentral-Osteuropa 24% 3 Süd-Westeuropa 14% 4 Nordeuropa 10% 1 Deutschland 52% In the financial year 2008 Germany raised sales 10% to € 51.25 million and at 48% has the largest share in Group revenues. EBITDA rose to € 3.92 million, compared to € 0.26 million in the restructuring year 2007. After € -11.51 million in the prior year, EBIT was again clearly positive at € +2.47 million. The 2007 result had been adversely affected by impairment and restructuring costs in the amount of € 10.09 million.
In the Professional Services segment the order volume from existing customers could be increased, which had a positive effect on the utilization of employed and freelance project staff. We raised the number of IT consultants with one company in the cell phone industry significantly and won two major customers in the technology sector. At the same time, the order volume from one longstanding customer in the semiconductor industry declined, who had to launch a strict cost cutting program due to the economic crisis. The financial year was marked by a fiercely contested human capital market, which saw a consider-able excess of customer demand for IT experts over available consultants.
The Infrastructure Optimization segment managed not only to intensify the longstanding rollout project with an internationally operating airline, but also to agree on the future cooperation for the long term. Furthermore, BRAIN FORCE consolidated its strong position with the public sector and won numerous new customers for the network documentation solution Net Organizer, as well as implemented the first version of the BRAIN FORCE ICT Bill at utility group.
The Business Solutions segment was able to generate additional business with existing customers on the one hand and several new customers on the other hand. A Hamburg insurance group, for instance, opted for the entire BRAIN FORCE Financial Analysis Center in addition to the BRAIN FORCE Customer Relationship Management System. Moreover, new tools such as BRAIN FORCE Abgeltungssteuer Plus (tax optimized investment), BRAIN FORCE Wohnriester (building financing with government aid) and BRAIN FORCE Basisrente direkt (tax optimized pension planning) were sold successfully. In addition, the renowned certification company TÜV Süd examined and certified the BRAIN FORCE Vorsorgeoptimierung solution, which enhances the future marketing potential considerably.
At mid-year the two German companies in Munich and Frankfurt were merged to achieve an even closer cooperation and to further optimize the cost structure. Upon expiration of the Managed Service contract with the Thalanx Group, we sold BRAIN FORCE Hamburg GmbH to this customer at a small book gain.
In the Central East Europe region revenues rose 5% to € 15.48 million, which equaled a share of approx. 15% in Group revenues. EBITDA increased 69% to € 1.54 million. Despite higher amortization due to the purchase price allocation relating to the acquisition of SolveDirect, EBIT was positive at € +0.50 million (prior year: € -0.18 million).
In the Business Solutions segment (service management and integration solutions of SolveDirect) several follow-up orders could be won from existing customers. For instance, at one IT infrastructure service provider the premium product SD.cube was implemented and the solution adjusted to the needs of a provider of traffic telematics systems. After a slightly sluggish business development in the first half of 2008 the segment could increase significantly and positively contribute to the Group result.
After losses incurred in the prior year, the Payroll Services segment (RZ Lohn) reported positive earnings again and contributed to the result through cost savings. Despite a slightly declining number of IT consultants employed after the cost saving measures had been implemented, the Professional Services segment also showed a very solid EBIT development. In addition to a major contract of a large cell phone company in Austria several smaller projects were realized in the Java environment.
In the Czech Republic the first BRAIN FORCE Net Organizer license was sold to a large bank. In Slovakia one financial service provider and one insurance company opted for the asset management solution Jupiter Pro.
The South West Europe region generated revenues of € 28.42 million, a slight plus of 4% over the prior year. The share of this segment in Group revenues amounted to approx. 27%. EBITDA reached € 1.76 million, compared to € 2.17 million in the prior year. This was due to restructuring measures in the Infrastructure Optimization segment in Italy and higher intercompany charges. EBIT amounted to € 1.07 million, whereas in the prior year it was still lower at € +0.86 million due to impairment and restructuring costs.
In Italy several customers could be won in the healthcare sector, with solutions being applied from the Infrastructure Optimization segment (based on VMWare) and from the Business Solutions segment (based on Microsoft CRM). Moreover, BRAIN FORCE Italy was able to underscore its competence in the metal processing industry and to win additional customers for the Microsoft Dynamics AX solution.
1 Germany 50%
Merger of the companies in Munich and Frankfurt
Slight revenue increase in Central East Europe and positive EBIT
SolveDirect up considerably in the second half-year
Cost savings result in positive earnings in the Payroll Services segment
Sales successes also in the Czech Republic and Slovakia
EBITDA down due to restructuring and higher intercompany charges
Competence in metal processing industry enhanced Restructuring in Infrastructure Optimization results in improved project pipeline
Improved EBITDA and EBIT
Position in the public sector expanded further; leading position in healthcare sector
Massive cost savings and intercompany charges improve the result of the holding
Significant increase in orders at year-end
Order intake by region
3 South West Europe 14%
4 North Europe 7%
The Infrastructure Optimization segment underwent a fundamental structural change at the beginning of 2008. Already in the second quarter promising new contracts could be won in the large customer segment (large accounts) so that the project pipeline improved significantly. The expanded management team for optimized pre-sales and project execution showed first successes in the further course of the year.
The North Europe region raised revenues in the reporting period by 17% to € 11.06 million and accounts for approx. 10% of group revenues. Within the same period, EBITDA rose by 6% to € 1.11 million and EBIT from € -1.74 to +0.40 million.
The Dutch company further expanded its position in the public sector and won numerous customer projects. This way the BRAIN FORCE Packaging Robot solutions came to be applied at municipalities and also at a local utility company. Furthermore, BRAIN FORCE Netherlands was able to demonstrate its leading position in the healthcare sector. The largest Dutch hospital group relies on the competence of BRAIN FORCE for the packaging of software and systems. Moreover, the close cooperation with the IT service provider Atos Origin was expanded further and together several packaging and migration projects could be concluded.
The EBITDA relating to the Holding and Other segment improved significantly from € -4.05 to -0.53 million and the EBIT from € -4.12 to -0.60 million. Cost savings of € 0.73 million in the holding company had a significant impact on the development of the result in this segment, although extraordinary expenses were incurred in connection with the takeover offer. In addition, the charging of trademark licensing fees to operating entities contributed to this strong improvement in the result of this segment. In order to further optimize the costs of the holdings company in 2009, at the turn of the year the corporate headquarters, including the Austrian operating company, was relocated to a new office building, thus significantly reducing rental costs.
As of December 31, 2008 the order volume at the Group level amounted to € 32.64 million, up 24% over the prior year level of € 26.32 million, which was mainly due to a large project order in Germany. South West Europe also saw a rise in order volumes. By contrast, Central East Europe as well as North Europe experienced slight declines.
At the balance sheet date, the order volumes are attributable to the segments as follows:
The significant rise in order volumes in Germany results from another major contract from a globally operating airline for our Frankfurt branch, which has specialized in Managed Services. As of December 31, 2008 the order volume at the Group level has to be considered very positive despite the difficult economic situation in Europe, although some shifts in incoming orders have already occurred in the third and fourth quarter. 3 Süd-Westeuropa 14% 4 Nordeuropa 10%
BRAIN FORCE had set as guidance for the financial year 2008 revenues of at least € 100 million, an EBITDA of € 6 to 7 million and an EBIT of € 2 to 3 million. We were not only able to meet these targets, but also to exceed them, generating revenues of € 106.21 million, an EBITDA of € 7.79 million and an EBIT of € 3.83 million.
It has to be noted that the guidance for 2008 was issued on the basis of a stable economic forecast in November 2007 and that the business development of BRAIN FORCE had hardly been affected by the financial and economic crisis in 2008. This changed in the first quarter 2009. The general uncertainty about the further economic development in the coming quarters is obvious. The forecasts made by experts in the chapter Business Environment on page 40 seem to paint a too positive picture from today's perspective. Based on this assessement, BRAIN FORCE prepares for declines in revenues of all subsidiaries through additional restructuring measures and will consistently optimize costs.
At present, we consider a reliable earnings guidance impossible. However, the Company is well positioned and financed. The cash flow developed very positively in the past year, which resulted in solid balance sheet ratios as of December 31, 2008:
The clear focus of the BRAIN FORCE management for 2009 is "Optimization of the operating cash flow". To that end, we have launched a working capital project, which will be implemented until summer. Our target in 2009 is to generate a positive operating result and to prepare the Group for growth in the long term.
Guidance for 2008 significantly exceeded
BRAIN FORCE prepares for very difficult environment through further restructuring
BRAIN FORCE is well positioned, a reliable earnings guidance currently impossible
Focus for 2009: Optimization of the cash flow from operating activities
| Income Statement in EUR | Note | 2008 | 2007 |
|---|---|---|---|
| Revenues | 1 | 106,207,702 | 98,333,257 |
| Cost of sales | 2 | -78,793,977 | -79,056,321 |
| Gross profit | 27,413,725 | 19,276,936 | |
| Selling expenses | 2 | -11,533,529 | -11,898,283 |
| Administrative expenses | 2 | -10,981,742 | -14,241,460 |
| Other operating expenses | 2 | -1,754,501 | -1,705,580 |
| Other operating income | 3 | 687,944 | 531,134 |
| Impairment of goodwill | 0 | -8,645,810 | |
| Operating profit (EBIT) | 3,831,897 | -16,683,063 | |
| Financial income | 6 | 37,491 | 71,924 |
| Financial costs | 6 | -1,485,745 | -785,330 |
| Financial result | 6 | -1,448,254 | -713,406 |
| Result from associates | 0 | -513,346 | |
| Profit before tax | 2,383,643 | -17,909,815 | |
| Income taxes | 7 | -4,484,543 | -2,004,895 |
| Profit after tax | -2,100,900 | -19,914,710 | |
| Result for the period attributable to Equity holders of the parent company | -2,100,900 | -19,914,710 | |
| Earnings per share | 30 | -0.14 | -1.29 |
| Segment Reporting 2008 in EUR |
Germany | Central East Europe |
South West Europe |
North Europe | Holding and Other |
Group |
|---|---|---|---|---|---|---|
| Revenues (consolidated) | 51,248,971 | 15,482,742 | 28,420,407 | 11,055,582 | 0 | 106,207,702 |
| Result before segment depreciation and amortization (EBITDA) |
3,922,116 | 1,536,174 | 1,756,380 | 1,113,219 | -534,597 | 7,793,292 |
| Depreciation and amortization | -1,448,196 | -1,040,115 | -688,432 | -715,105 | -69,548 | -3,961,396 |
| Operating profit (EBIT) | 2,473,920 | 496,059 | 1,067,948 | 398,114 | -604,144 | 3,831,897 |
| Financial result | -1,448,254 | |||||
| Share in profit of associates | 0,00 | |||||
| Profit before tax | 2,383,643 | |||||
| Income taxes | -4,484,543 | |||||
| Profit after tax | -2,100,900 | |||||
| Segment assets | 20,963,975 | 17,356,800 | 18,865,834 | 8,571,605 | 552,393 | 66,310,607 |
| Segment liabilities | 9,326,613 | 4,017,122 | 11,306,432 | 1,721,014 | 15,790,308 | 42,161,489 |
| Capital expenditure | 651,988 | 242,588 | 816,432 | 646,675 | 94,987 | 2,452,670 |
| Segment Reporting 2007 in EUR |
Germany | Central East Europe |
South West Europe |
North Europe | Holding and Other |
Group |
|---|---|---|---|---|---|---|
| Revenues (consolidated) | 46,778,152 | 14,780,004 | 27,332,922 | 9,442,179 | 0 | 98,333,257 |
| Result before segment depreciation and amortization (EBITDA) |
263,591 | 911,078 | 2,172,683 | 1,052,643 | -4,053,966 | 346,029 |
| Depreciation and amortization | -11,771,782 | -1,089,880 | -1,308,219 | -2,789,683 | -69,528 | -17,029,092 |
| Operating profit (EBIT) | -11,508,191 | -178,802 | 864,464 | -1,737,040 | -4,123,494 | -16,683,063 |
| Financial result | -713,406 | |||||
| Share in profit of associates | -513,346 | -513,346 | ||||
| Profit before tax | -17,909,815 | |||||
| Income taxes | -2,004,895 | |||||
| Profit after tax | -19,914,710 | |||||
| Segment assets | 20,859,777 | 19,494,599 | 19,278,768 | 9,346,013 | 5,363,253 | 74,342,410 |
| Segment liabilities | 8,258,702 | 4,892,526 | 14,099,246 | 2,270,253 | 18,556,261 | 48,076,988 |
| Capital expenditure | 1,432,162 | 14,543,936 | 602,778 | 678,594 | 43,062 | 17,300,532 |
| Balance Sheet in EUR | Note | 31.12.2008 | 31.12.2007 |
|---|---|---|---|
| Assets | |||
| Property, plant and equipment | 8 | 2,493,383 | 2,328,060 |
| Goodwill | 9 | 14,516,571 | 15,861,876 |
| Other intangible assets | 10 | 11,328,281 | 13,065,053 |
| Investments in associates | 11 | 11,466 | 11,466 |
| Financial assets | 12 | 183,128 | 179,781 |
| Other receivables and assets | 16 | 101,712 | 750,912 |
| Deferred tax assets | 13 | 50,723 | 2,628,433 |
| Non-current assets | 28,685,264 | 34,825,581 | |
| Inventories | 14 | 185,787 | 268,534 |
| Trade receivables | 15 | 26,898,432 | 28,168,703 |
| Other receivables and assets | 16 | 1,741,880 | 1,638,649 |
| Cash and cash equivalents | 17 | 8,799,244 | 9,440,943 |
| Current assets | 37,625,343 | 39,516,829 | |
| Total assets | 66,310,607 | 74,342,410 | |
| Equity and liabilities |
|||
| Equity attributable to equity holders of the parent company | |||
| Share capital | 18 | 15,386,742 | 15,386,742 |
| Reserves | 18 | 15,245,099 | 15,260,503 |
| Retained earnings | -6,482,723 | -4,381,823 | |
| Equity | 24,149,118 | 26,265,422 | |
| Financial liabilities | 20 | 10,975,548 | 11,308,022 |
| Other liabilities | 22 | 144,891 | 73,605 |
| Provisions for post-employment benefits | 19 | 2,271,221 | 2,559,369 |
| Other provisions | 24 | 0 | 1,603,503 |
| Deferred tax liabilities | 13 | 2,613,772 | 2,561,714 |
| Non-current liabilities | 16,005,432 | 18,106,213 | |
| Financial liabilities | 20 | 2,713,156 | 4,664,467 |
| Trade payables | 21 | 8,340,473 | 9,780,848 |
| Other liabilities | 22 | 13,105,463 | 12,206,583 |
| Income tax provisions | 23 | 824,561 | 762,239 |
| Other provisions | 24 | 1,172,404 | 2,556,638 |
| Current liabilities | 26,156,057 | 29,970,775 | |
| Total equity and liabilities | 66,310,607 | 74,342,410 |
| Attributable to equity holders of the parent company | |||||||
|---|---|---|---|---|---|---|---|
| Changes in equity in EUR | Note | Share capital |
Share premium |
Other reserves |
Retained earnings |
Treasury shares |
Total equity |
| Balance 1.1.2007 | 15,386,742 | 24,750,604 | -275,134 | 8,365,027 | -134,737 | 48,092,502 | |
| Fair value adjustments of securities | 0 | 0 | -4,506 | 0 | 0 | -4,506 | |
| Currency translation differences | 0 | 0 | 4,123 | 0 | 0 | 4,123 | |
| Transfer of reserves | 0 | -9,162,973 | 0 | 9,162,973 | 0 | 0 | |
| Net income/loss recognised directly in equity | 0 | -9,162,973 | -383 | 9,162,973 | 0 | -383 | |
| Profit after tax | 0 | 0 | 0 | -19,914,710 | 0 | -19,914,710 | |
| Total result for the period | 0 | -9,162,973 | -383 | -10,751,737 | 0 | -19,915,093 | |
| Dividends paid | 0 | 0 | 0 | -1,505,546 | 0 | -1,505,546 | |
| Change in treasury shares | 0 | -51,611 | 0 | 0 | 134,737 | 83,126 | |
| Other changes in minority interests | 0 | 0 | 0 | -489,567 | 0 | -489,567 | |
| Balance 31.12.2007 | 18 | 15,386,742 | 15,536,020 | -275,517 | -4,381,823 | 0 | 26,265,422 |
| Fair value adjustments of securities | 0 | 0 | 3,734 | 0 | 0 | 3,734 | |
| Currency translation differences | 0 | 0 | -19,138 | 0 | 0 | -19,138 | |
| Net income/loss recognised directly in equity | 0 | 0 | -15,404 | 0 | 0 | -15,404 | |
| Profit after tax | 0 | 0 | 0 | -2,100,900 | 0 | -2,100,900 | |
| Total result for the period | 0 | 0 | -15,404 | -2,100,900 | 0 | -2,116,304 | |
| Balance 31.12.2008 | 18 | 15,386,742 | 15,536,020 | -290,921 | -6,482,723 | 0 | 24,149,118 |
| Cash Flow Statement in EUR | Note | 2008 | 2007 |
|---|---|---|---|
| Profit before tax | 2,383,643 | -17,909,815 | |
| Depreciation/amortization | 3,961,396 | 17,029,092 | |
| Financial result | 1,448,254 | 713,406 | |
| Income from investments in associates | 0 | 513,346 | |
| Gains/losses from the disposal of property, plant and equipment and intangible assets | 35,314 | 1,714 | |
| Other non-cash income | -250,000 | 0 | |
| Changes in non-current provisions and liabilities | -351,326 | -1,364,416 | |
| Net interest paid | -769,504 | -543,072 | |
| Income taxes paid | -1,655,296 | -2,404,279 | |
| Gross cash flow | 25 | 4,802,481 | -3,964,024 |
| Changes in inventories | 82,747 | 74,679 | |
| Changes in trade receivables | 984,059 | 1,633,660 | |
| Changes in trade payables | -1,453,993 | 1,218,229 | |
| Changes in other current assets and liabilities | 1,851,991 | -973,059 | |
| Currency translation differences | 13,341 | -6,684 | |
| Cash flow from operating activities | 25 | 6,280,626 | -2,017,199 |
| Acquisition of subsidiaries | -2,215,220 | -6,929,734 | |
| Net payments for the sale of subsidiaries | -87,116 | 0 | |
| Investments in property, plant and equipment and other intangible assets | -2,452,670 | -2,820,623 | |
| Investments in financial assets | 37,491 | 143,848 | |
| Sale of property, plant and equipment and other intangible assets | 78,974 | 53,765 | |
| Cash flow from investing activities | 26 | -4,638,541 | -9,552,744 |
| Increase in financial liabilities | 884,769 | 12,577,314 | |
| Repayment of financial liabilities | -3,168,553 | -231,845 | |
| Dividends paid | 0 | -1,505,546 | |
| Capital increase | 0 | 0 | |
| Purchase of treasury shares | 0 | -3,032,962 | |
| Cash flow from financing activities | 27 | -2,283,784 | 7,806,961 |
| Change in cash and cash equivalents | 28 | -641,699 | -3,762,982 |
| Cash and cash equivalents at the beginning of the year | 9,440,943 | 13,203,925 | |
| Change in cash and cash equivalents | -641,699 | -3,762,982 | |
| Cash and cash equivalents at the end of the year | 28 | 8,799,244 | 9,440,943 |
Within the past few years BRAIN FORCE HOLDING AG, Vienna, as medium-sized IT company transformed itself from a pure project service provider to an IT solutions provider. The BRAIN FORCE Group offers its products and services on the relevant markets through individual subsidiaries, mainly in the sectors insurance and financial services, telecommunications and industry. The Company's head office is located in Karl-Farkas-Gasse 22, 1030 Vienna, Austria.
BEKO Holding AG, Nöhagen is the majority shareholder of BRAIN FORCE Holding AG. The parent company in the group is CROSS Industries AG based in Wels.
The consolidated financial statements at December 31, 2008 were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the applicable Austrian regulations pursuant to Section 245a UGB. Presentation currency is the Euro.
The measurement principles applied in the preparation of the consolidated financial statements are based on historical acquisition or production cost, with the exception of derivative financial instruments and available-for-sale securities, which are measured at fair value at the balance sheet date.
The preparation of the consolidated financial statements in accordance with generally accepted accounting and measurement principles pursuant to IFRS as adopted by the EU requires the use of estimates and assumptions which influence the amount and presentation of assets and liabilities in the balance sheet, disclosed contingent assets and liabilities at the balance sheet date, and income and expenses recorded during the reporting period. Although these estimates are made by the management board to the best of their knowledge and are based on current transactions, actual values may eventually differ from these estimates.
The following standards and interpretations are effective as of 2008:
The IASB or IFRIC adopted further standards and amendments to standards and interpretations which had been adopted by the EU by the time these consolidated financial statements were prepared and published in the official journal. These standards and interpretations are not yet mandatory in the financial year 2008 and have not been adopted early by BRAIN FORCE. The impact of these provisions is immaterial and in part cannot yet be estimated reliably.
The financial statements included in consolidation were all drawn up with a uniform consolidated balance sheet date at December 31, 2008.
In addition to BRAIN FORCE HOLDING AG, domestic and foreign subsidiaries are included in the consolidated financial statements over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights.
Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The consolidated group changed as follows, compared to the financial statements at December 31, 2007: In accordance with the merger agreement dated August 21, 2008 BRAIN FORCE Frankfurt GmbH, Langen, Germany, as transferring company was merged with BRAIN FORCE Software GmbH, Munich, Germany. Furthermore, by purchase and transfer agreement dated August 14, 2008 all shares in BRAIN FORCE Hamburg GmbH, Munich, Germany, were sold. September 30, 2008 was set as the date for the transfer of the shares. BRAIN FORCE Hamburg was deconsolidated as of September 30, 2008.
Thus, the consolidated financial statements include BRAIN FORCE HOLDING AG, Vienna, and the listed subsidiaries and associates:
| Company | Method of consolidation | Share in % |
|---|---|---|
| BRAIN FORCE SOFTWARE GmbH, Vienna | V | 100 |
| BRAIN FORCE Software GmbH, Munich, Germany | V | 100 |
| BRAIN FORCE S.p.A., Milan, Italy | V | 100 |
| BRAIN FORCE Network Solutions B.V., Veenendaal, Netherlands | V | 100 |
| BRAIN FORCE B.V., Veenendaal, Netherlands | V | 100 |
| BFS Brain Force Software AG, Kloten, Switzerland | V | 100 |
| BRAIN FORCE SOFTWARE s.r.o., Prague, Czech Republic | V | 100 |
| Brain Force Software s.r.o., Bratislava, Slovakia 1) | V | 100 |
| NSE Capital Venture GmbH, Munich, Germany 2) | V | 100 |
| CONSULTING CUBE s.r.l., Bologna, Italy 3) | E | 25 |
| KEMP Technologies Inc., New York, USA | E | 30 |
V... Full consolidation
1) 85% of the share is held by BRAIN FORCE SOFTWARE s.r.o., Prague, Czech Republic, 15% by BRAIN FORCE SOFTWARE GmbH, Vienna.
2) The share is held by BRAIN FORCE Software GmbH, Munich, Germany.
3) The share is held by BRAIN FORCE S.p.A., Milan, Italy.
E... Equity method of consolidation
Consolidation is carried out in accordance with the regulations of IFRS 3. All business combinations are accounted for using the purchase method. The acquisition costs of the shares in the subsidiaries included in consolidation plus costs directly attributable to the acquisition are offset against the proportionate net assets based on the fair values of the assets and liabilities assumed at the time of acquisition or transfer of control.
Identifiable intangible assets are recognised separately and amortized systematically. The remaining goodwill is allocated to the cashgenerating unit(s) and is tested for impairment at least annually at this level.
If the fair value of the net assets of the subsidiary acquired exceeds the cost of acquisition, the assets acquired and liabilities and contingent liabilities assumed as well as acquisition costs have to be remeasured and any remaining excess has to be recognised directly in the income statement.
Intragroup receivables and liabilities, income, expenses and any interim results are eliminated.
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (functional currency). All financial statements are presented in the respective local currencies.
The consolidated financial statements are presented in euro, which is the functional currency of the parent company and the presentation currency of the Group.
The differences resulting from the translation of financial statements of consolidated entities are recognised in equity, not affecting net income.
In the individual financial statements of group companies foreign currency transactions are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
The financial statements of foreign subsidiaries that have a functional currency different from the presentation currency of the Group are translated into the presentation currency at the respective year-end exchange rates.
The euro exchange rates for the major currencies are presented in the following table:
| Currency | Rate at the balance sheet date 2008 |
Rate at the balance sheet date 2007 |
|---|---|---|
| 1 EUR | 1 EUR | |
| CHF Swiss Franc | 1.4955 | 1.6560 |
| GBP British Pound | 0.9745 | 0.7355 |
| CZK Czech Crowns | 26.600 | 26.600 |
| SKK Slovak Crowns | 30.126 | 33.620 |
| USD US Dollar | 1.4160 | 1.4725 |
Property, plant and equipment is stated at historical cost less systematic depreciation. PP&E is depreciated on a straight-line basis over the expected useful lives of the assets. The assets are depreciated on a pro rata temporis basis from the month in which the asset is available for use.
Systematic depreciation is based on the following useful lives which are uniform within the Group:
| Property, plant and equipment | Useful life |
|---|---|
| Building investments in non-owned facilities | 10 years |
| IT equipment | 3 to 5 years |
| Office machines | 4 to 5 years |
| Office equipment | 5 to 10 years |
If an asset is impaired, the carrying amount is reduced to its recoverable amount.
Maintenance expenses are recognised in the income statement in the period in which they are incurred.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straightline basis over the period of the lease.
In accordance with IFRS 3, goodwill arising from a business combination shall not be amortized systematically.
Assets accounted for in connection with the allocation of the purchase price are amortized as follows:
Other purchased intangible assets are recognised at cost less amortization calculated according to the straight-line method and based on the estimated useful lives of the assets. As a rule, estimated useful lives of assets are between 3 and 5 years for software, 3 years for licenses and distribution rights, and 10 years for registered trademarks.
If an asset is impaired, the carrying amount is reduced to its recoverable amount. In addition, goodwill shall be tested annually for impairment.
Expenditure on research is recognised as an expense. Development costs, both for bought-in goods and services and also for internal development costs arising from development projects, if they meet the required criteria, are recognised as assets arising from development (other intangible assets) in accordance with IAS 38 to the extent that such expenditure is expected to generate future economic benefits. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Capitalized development costs are amortized on a straight-line basis over the expected useful life of the respective product, currently 3 to 5 years.
Investments in associates, i.e. companies in which the Group, directly or indirectly, holds more than 20% of the voting rights or in another way can exercise a significant influence on the operating policies of the associated company, are accounted for using the equity method. Under this method, investments are initially recorded at cost and subsequently adjusted according to the investor's share in the net assets of the associated company. The income statement reflects the investor's share in the results of the associated company.
In addition to investments, financial assets include securities held for an indefinite period that may be sold for liquidity requirements or due to changes in interest rates. They are classified as "available-for-sale".
Available-for-sales securities are subsequently measured at fair value (based on stock prices), with unrealised changes in value being recognised in equity under other reserves.
Investments are also classified as available-for-sale financial assets, they are, however, normally measured at cost, as an active market value does not exist for these companies and the respective fair values cannot be determined reliably at reasonable expense. If there are any indications to a lower fair value, this value will be recognised.
If any indications exist, assets will be tested for impairment. If assets are impaired, the corresponding impairment loss is recognised in profit or loss.
All purchases and sales are recognised at the date of settlement; acquisition costs include transaction costs.
Property, plant and equipment, goodwill and other intangible assets are examined to assess whether changed circumstances or events indicate that the carrying amount is no longer recoverable. If an asset is impaired, the carrying amount is reduced to its recoverable amount. The recoverable amount is the higher of an asset's net selling price and its value in use. In order to assess impairment, assets are grouped into cash-generating units, i.e. the smallest identifiable group of assets that generates separate cash inflows. If the reason for the impairment no longer exists, a corresponding write-up is made, except for goodwill.
Inventories are recognised at the lower of cost or net realisable value in accordance with IAS 2. The net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
The profit from a construction contract is recognised as soon as it can be estimated reliably. The Group uses the percentage-of-completion method to determine the appropriate amount in a period. The stage of completion is shown as the number of hours worked up to the balance sheet date in proportion to all the hours allocated to the project. Losses are recognised at the earliest possible date. Advance payments received are deducted from the receivables from construction contracts. Any negative balance for a construction contract resulting from this will be recognised as a liability from construction contracts.
Receivables and other assets are recognised at cost less any necessary provision for impairment. Receivables in foreign currencies are measured at the exchange rate prevailing at the balance sheet date.
Non-current receivables falling due within twelve months after the balance sheet date are recognised under current assets.
Cash and cash equivalents include cash in hand and bank deposits. Deposits held in foreign currencies are measured at the exchange rate prevailing at the balance sheet date December 31, 2008.
Liabilities are recognised at cost or at the amount repayable, if different. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings, using the effective interest method.
Liabilities in foreign currencies are measured at the exchange rate prevailing at the balance sheet date.
Provisions are recognised, if the Group has a present legal or constructive obligation as a result of past events and it is probable that an outflow of resources will be required to settle this obligation, and that the amount can be estimated reliably.
Long-term provisions are recognised at the amount repayable, discounted to the balance sheet date, if the interest effect resulting from discounting is material.
Provisions for post-employment benefits include long-term obligations for pensions and termination benefits (severance payments) calculated in accordance with actuarial methods pursuant to IAS 19. The present value of the defined benefit obligation = DBO is calculated on the basis of the length of service, the expected development of salary and (in the case of pensions) the pension adjustment. The obligation resulting according to the projected unit credit method is reduced for pensions payable by a multi-employer pension fund by the plan assets of the fund. To the extent that the plan assets do not cover the obligation, the net obligation is recognised as a liability under provisions for pensions.
The expense for the period to be recognised includes service cost, interest cost, and expense or income from the amortization of past service costs and actuarial gains and losses. The calculation of the obligations is based on actuarial assumptions, particularly with regard to the interest rate applicable for discounting, the rate of increase for salaries and pensions, the pensionable age and probabilities concerning labour turnover and the probability of occurrence. The calculation is based on local biometrical data.
The interest rate applied in calculating the present value of defined benefit obligations is based on the average market yield on corporate bonds with the same term to maturity.
Estimated future salary increases are derived from the average salary development of the past years, which is considered realistic for the future.
The deductions for labour turnover and for the probability of occurrence are based on figures for comparable prior periods.
The pensionable age used in the calculation of post-employment benefit obligations is derived from the actual commitments made; severance payments are calculated on the basis of estimated pensionable age.
Actuarial gains and losses are not taken into account unless they exceed the higher of 10% of total obligations or any plan assets (corridor). The amount exceeding the corridor will be taken through profit or loss over the average remaining service period of the active staff and recognised in the balance sheet.
Severance payments relate to obligations under Austrian or Italian law.
Severance payments under Austrian labour law are one-off employee benefits, which have to be paid on an enterprise's decision to terminate an employee's employment and when the employee goes into regular retirement. Their amount is based on the years of service and the amount of remuneration.
| Years of service | 3 | 5 | 10 | 15 | 20 | 25 |
|---|---|---|---|---|---|---|
| No. of months remuneration | 2 | 3 | 4 | 6 | 9 | 12 |
Since the beginning of 2003, defined contribution plans have been applicable to employees joining an Austrian company. Starting from the second month of the employment relationship, the employer pays a regular contribution of 1.53% of monthly remuneration and any additional payments to a Mitarbeitervorsorgekasse or MVK (statutory scheme for severance payments). No additional obligation exists on the part of the company. The employees' entitlements exist vis-à-vis the respective MVK, and the current contributions paid by the company are recognised under personnel expenses.
Severance payments under Italian law (TFR) are one-off employee benefits which have to be paid as soon as an employee leaves an enterprise. The amount of the compensation is based on the number of monthly salaries (indexed), whereby a monthly salary (annual salary divided by 13.5) is earned per service year. The employee can receive an advance of up to 70% of the entitlement under certain conditions, e.g. to purchase a home or medical care. As of the financial year 2007, the amounts earned have to be paid to the statutory social security or a provision fund designated by the employee.
Revenue is recognised upon delivery or transfer of risk to the customer, rebates and other discounts are deducted. Sales relating to the rendering of services in accordance with IAS 18 are measured using the percentage-of-completion method.
Borrowing costs are recognised in profit or loss in the period in which they are incurred.
Income taxes are recognised according to the source of tax and are based on the corresponding profit of the financial year.
Deferred taxes are determined on the basis of all temporary differences arising from tax values and IFRS values of all assets and liabilities using the liability method and the relevant national tax rates prevailing on the balance sheet date or which have been substantially enacted and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax liabilities are recognised under non-current liabilities, deferred tax assets under non-current assets.
The most important temporary differences result from the capitalization of development costs and other assets and liabilities identifiable in the allocation of the purchase price under IFRS 3, the depreciation of property, plant and equipment, receivables, provisions for tax purposes, construction contracts and the provisions for post-employment benefit obligations. Deferred taxes relating to tax loss carry-forwards and deductible temporary differences are recognised to the extent that it is probable that future taxable profit will be available against which they can be utilised.
Due to their short-term nature, trade receivables, other receivables and payables and cash and cash equivalents recognised in the balance sheet basically correspond to their fair values. The fair values stated for financial liabilities are determined as the present value of discounted future cash flows using the market interest rates applicable for financial debt of corresponding maturity and risk structure.
In applying the accounting and measurement principles BRAIN FORCE Group to a certain extent made assumptions about future developments and used estimates with regard to non-current assets, allowances for receivables, provisions and deferred taxes. Actual values may eventually differ from these assumptions and estimates.
The effects of adverse changes of estimates made in the annual impairment test of the interest rate by plus 10% or of the cash flow by minus 10% would not result in an impairment of the recognised goodwill.
If future taxable income within the plan period defined for the recognition and measurement of deferred taxes fell 10% short of the value assumed at the balance sheet date, the recognised net position of deferred tax assets would probably have to be reduced by EUR 32k (prior year: EUR 347k).
In the BRAIN FORCE Group actuarial gains and losses relating to pensions and severance payments under Austrian law are recognised in the income statement over the average remaining service period considering the corridor rule, in case of severance payments under Italian law immediately at the full amount.
The present value of the obligation depends on a number of factors which are based on actuarial assumptions. The assumptions used in calculating the expenses include the estimated increase in salaries and the interest rate. Any change in these assumptions has effects on the present value of the obligation and on actuarial gains and losses not yet recognised. Applying the corridor method, the amount of actuarial gains and losses outside the corridor has to be allocated in profit or loss over the average remaining service period of the beneficiary. Estimated future salary increases are derived from the average salary development of the past years, which is considered realistic for the future.
The Group calculates the relevant interest rate at the end of each year. This is the interest rate which is used in the calculation of the present value of expected future cash outflows for the payment of the obligation. The calculation of the interest rate is based on the interest rate for corporate bonds of the highest credit standing denominated in the currency in which the services are paid and whose maturities equal those of the pension and severance payment obligations. Further material assumptions are in part based on market conditions.
If the assumptions were based on a discount rate which fell 10 percent short of the estimates made by management, the present value of the obligation for pensions and severance payments would have to be raised by EUR 105k (prior year: EUR 105k).
With regard to the other balance sheet items, changes in estimates and assumptions do not result in significant effects on the assets and liabilities, the financial position and result of operations for the following financial year.
Revenues are broken down into the following items:
| in EUR | 2008 | 2007 |
|---|---|---|
| Current services | 69,326,440 | 70,940,432 |
| Construction/service contracts | 15,408,860 | 8,392,666 |
| Products | 21,472,402 | 19,000,159 |
| Revenues | 106,207,702 | 98,333,257 |
For the financial year 2007 the income statement was prepared using the function of expense method. The following presentation shows a breakdown by type of expenses.
| in EUR | 2008 | 2007 |
|---|---|---|
| Increase or decrease in services not yet invoiced | 97,768 | 91,645 |
| Cost of materials and purchased services | 35,053,565 | 33,222,591 |
| Own work capitalized | -1,299,486 | -1,317,257 |
| Personnel expenses | 49,415,490 | 49,944,772 |
| Depreciation and amortization | 3,961,396 | 8,383,282 |
| Impairment of goodwill | 0 | 8,645,810 |
| Rents and energy costs | 3,725,579 | 3,446,687 |
| Car expenses | 2,514,640 | 2,612,995 |
| Travel expenses | 2,158,630 | 1,780,047 |
| Advertising and marketing expenses | 856,364 | 1,502,489 |
| Legal, audit and consulting fees | 2,092,084 | 2,839,396 |
| Postage and communication charges | 671,930 | 720,313 |
| Bad debts and allowances for receivables | 357,803 | 531,153 |
| Other expenses | 3,457,986 | 3,143,531 |
| Cost of sales, selling and administrative expenses and other costs | 103,063,749 | 115,547,454 |
Prior-year depreciation and amortization in the amount of EUR 8,383,282 includes EUR 3,091,475 of impairment.
Other operating income includes:
| in EUR | 2008 | 2007 |
|---|---|---|
| Cancellation fees and compensations | 100,000 | 0 |
| Income from the deconsolidation of BRAIN FORCE Hamburg GmbH | 250,000 | 0 |
| Other | 337,944 | 531,134 |
| Other operating income | 687,944 | 531,134 |
These expenses are allocated to cost of sales and broken down as follows:
| in EUR | 2008 | 2007 |
|---|---|---|
| Cost of goods sold | 4,143,337 | 4,511,116 |
| Maintenance | 889,010 | 750,630 |
| Licenses | 2,320,175 | 1,796,063 |
| Cost of materials | 7,352,522 | 7,057,809 |
| Subcontractors | 27,701,043 | 26,164,782 |
| Cost of materials and purchased services | 35,053,565 | 33,222,591 |
Cost of sales, selling and administrative expenses include the following personnel expenses:
| in EUR | 2008 | 2007 |
|---|---|---|
| Salaries | 39,937,239 | 40,623,175 |
| Expenses for severance payments | 715,713 | 387,585 |
| Expenses for pensions | 52,211 | 36,337 |
| Expenses for statutory social security, payroll- related taxes and mandatory contributions | 8,710,327 | 8,897,675 |
| Personnel expenses | 49,415,490 | 49,944,772 |
Expenses for severance payments in addition to statutory entitlements (see Note 19) also include contributions payable to the staff provision fund ("Mitarbeitervorsorgekasse") in the amount of EUR 80,558 (prior year: EUR 62,690).
The financial result is calculated as follows:
| in EUR | 2008 | 2007 |
|---|---|---|
| Income from the disposal of securities | 37,491 | 71,924 |
| Interest and similar expenses | -843,871 | -705,044 |
| Write-off of convertible bond | -626,741 | 0 |
| Net losses from foreign currency translation | -15,133 | -80,286 |
| Financial result | -1,448,254 | -713,406 |
| in EUR | 2008 | 2007 |
|---|---|---|
| Current tax expense | 1,794,119 | 1,351,005 |
| Deferred tax expense | 2,690,424 | 653,890 |
| Income taxes | 4,484,543 | 2,004,895 |
The income tax expense for the year is EUR 3,888,632 higher (prior year: EUR 6,482,349 lower) than the calculated income tax expense of EUR 595,911 (prior year: EUR -4,477,454), which would result from applying a tax rate of 25% (prior year: 25%) on the profit before tax, with the tax rate equalling the income tax rate applicable to the parent company. The reasons for the difference between calculated and recognised income tax expenses are as follows:
| in EUR | 2008 | 2007 |
|---|---|---|
| Profit before tax | 2,383,643 | -17,909,815 |
| thereof 25% = calculated income tax expense | 595,911 | -4,477,454 |
| Effects of different tax rates in other countries | 778,763 | 273,112 |
| Effects of changes in tax rates | 0 | 794,179 |
| Income not subject to tax | -1,838 | -341,813 |
| Expenses not deductible for tax purposes | 29,444 | 804,968 |
| Other permanent differences | -108,609 | -2,607 |
| Write-off of deferred tax assets | 3,070,729 | 1,663,914 |
| Utilisation and subsequent capitalization of temporary differences and tax losses not recognised in the year in | ||
| which they arose | -306,641 | -217,065 |
| Tax losses for which no deferred tax assets have been recognised | 437,441 | 3,175,207 |
| Income tax expense – current period | 4,555,862 | 1,672,441 |
| Non-periodic income tax expense/income | -71,319 | 332,454 |
| Recognised income tax expense/income | 4,484,543 | 2,004,895 |
Property, plant and equipment have changed as follows:
| in EUR | Building invest ments in non owned facilities |
Office machines, IT equipment, other office equipment |
Total |
|---|---|---|---|
| Acquisition or production costs 1.1.2008 | 1,380,124 | 5,089,037 | 6,469,161 |
| Currency translation differences | 0 | 235 | 235 |
| Additions | 273,183 | 824,102 | 1,097,285 |
| Change in consolidated group | -9,634 | -189,450 | -199,084 |
| Disposals | -10,829 | -295,658 | -306,487 |
| Acquisition or production costs 31.12.2008 | 1,632,844 | 5,428,266 | 7,061,110 |
| Accumulated depreciation 1.1.2008 | 688,722 | 3,452,379 | 4,141,101 |
| Currency translation differences | 0 | 174 | 174 |
| Depreciation charge 2008 | 161,742 | 710,866 | 872,608 |
| Change in consolidated group | -3,635 | -182,618 | -186,253 |
| Disposals | -837 | -259,066 | -259,903 |
| Accumulated depreciation 31.12.2008 | 845,992 | 3,721,735 | 4,567,727 |
| Carrying amounts 31.12.2008 | 786,852 | 1,706,531 | 2,493,383 |
| in EUR | Building invest ments in non owned facilities |
Office machines, IT equipment, other office equipment |
Total |
|---|---|---|---|
| Acquisition or production costs 1.1.2007 | 877,568 | 4,486,243 | 5,363,811 |
| Currency translation differences | 386 | 366 | 752 |
| Additions | 505,912 | 825,273 | 1,331,185 |
| Change in consolidated group | 8,323 | 247,741 | 256,064 |
| Disposals | -12,065 | -470,586 | -482,651 |
| Acquisition or production costs 31.12.2007 | 1,380,124 | 5,089,037 | 6,469,161 |
| Accumulated depreciation 1.1.2007 | 558,969 | 3,190,774 | 3,749,743 |
| Currency translation differences | 77 | 348 | 425 |
| Depreciation charge 2007 | 132,468 | 689,072 | 821,540 |
| Disposals | -2,792 | -427,815 | -430,607 |
| Accumulated depreciation 31.12.2007 | 688,722 | 3,452,379 | 4,141,101 |
| Carrying amounts 31.12.2007 | 691,402 | 1,636,658 | 2,328,060 |
Goodwill changed as follows:
| Carrying amount 31.12. | 14,516,571 | 15,861,876 |
|---|---|---|
| Impairment charge | 0 | -8,645,810 |
| Disposal due to purchase price adjustment | -1,345,305 | -2,373,835 |
| Addition | 0 | 5,576,569 |
| Carrying amount 1.1. | 15,861,876 | 21,304,952 |
| in EUR | 2008 | 2007 |
The goodwill at January 1 of the financial year results from past acquisitions of corresponding shares for BRAIN FORCE S.p.A., Milan, Italy (formerly TEMA Studio di Informatica S.p.A.), beusen Solutions GmbH, Berlin, Germany (meanwhile merged with BRAIN FORCE Software GmbH, Munich, Germany), Brain Force Financial Solutions AG, Munich, Germany (formerly NSE Software AG, merged with BRAIN FORCE Software GmbH, Munich, Germany, in the financial year 2006), INDIS S.p.A., Milan, Italy (merged with BRAIN FORCE S.p.A., Milan, Italy, in the financial year 2006), BRAIN FORCE B.V., Veenendaal, Netherlands (formerly VAI B.V.) and BRAIN FORCE Frankfurt GmbH, Langen, Germany (formerly: SYSTEAM Ingenieurbüro für Datenkommunikation und Informatik GmbH, merged with BRAIN FORCE Software GmbH, Munich, Germany, in the financial year).
The addition of the prior year results from the acquisition of SolveDirect.com Internet-Service GmbH, which was merged with BRAIN FORCE SOFTWARE GmbH, Vienna, in the prior year.
The disposal mainly results from the adjustment of the obligation to pay a variable purchase price component regarding BRAIN FORCE B.V. and SolveDirect.com Internet-Service GmbH due to the failure to achieve certain objectives and changes in estimates, respectively.
In the financial year 2008 the impairment tests were performed for the following cash generating units:
| in EUR | Allocated goodwill |
|---|---|
| BRAIN FORCE S.p.A. – Segment SWE, BS division | 1,783,670 |
| BRAIN FORCE S.p.A. – Segment SWE, TI division | 1,014,887 |
| BRAIN FORCE Software GmbH – Segment DE, BS, Financial Solutions division | 1,172,812 |
| BRAIN FORCE B.V. – Segment NE | 3,842,616 |
| BRAIN FORCE SOFTWARE GmbH (SolveDirect.com Internet Services GmbH – Segment CEE, TI division) | 4,676,009 |
| BRAIN FORCE Frankfurt GmbH (formerly SYSTEAM) – Segment DE, TI-Aviation division | 2,026,577 |
| Carrying amount 31.12.2008 | 14,516,571 |
The recoverable amount of the cash-generating units was determined based on value-in-use calculations. These value-in-use calculations are based on cash flow projections derived from the 2009 financial budget approved by management and the resulting medium-term planning for the subsequent three years. The material assumptions of the management in the calculation of values in use are the estimated revenues, EBIT margins and discount rates. The calculation was based on an adequate EBIT margin on the basis of the segment performance by region.
Cash flows beyond this four-year period are extrapolated using the estimated growth rates stated below, which do not exceed the long-term average growth rate for the respective business segments. The calculations did not result in a need for impairment.
| in % | Growth rate | Discount rate before tax |
Discount rate after tax |
|---|---|---|---|
| BRAIN FORCE S.p.A. – Segment SWE, BS division | 0.0 | 29.2 | 10.5 |
| BRAIN FORCE S.p.A. – Segment SWE, TI division | 0.0 | 34.4 | 10.5 |
| BRAIN FORCE Software GmbH – Segment DE, BS, Financial Solutions division | 0.0 | 12.8 | 11.5 |
| BRAIN FORCE SOFTWARE GmbH (SolveDirect.com Internet Services GmbH – Segment CEE, TI division) |
1.0 | 13.6 | 11.1 |
| BRAIN FORCE B.V. – Segment NE | 0.0 | 13.0 | 10.3 |
| BRAIN FORCE Frankfurt GmbH (formerly SYSTEAM) – Segment DE, TI-Aviation division | 0.0 | 17.0 | 11.5 |
The respective discount rates before tax were determined iteratively on the basis of cash flows before taxes, using the value in use. The value in use is calculated by applying discount rates after taxes to cash flows after taxes. The discount rates account for the realisable tax loss carry-forwards. The deviations from the discount rates after taxes are due to the effective tax burden of the respective unit.
The discount rate used was derived from the weighted average cost of capital (WACC), computed according to the capital asset pricing model (CAPM), reflecting the financial structure and market risks associated with the business segments.
Other intangible assets changed as follows:
| in EUR | Development costs | Other | Intangible assets |
|---|---|---|---|
| Acquisition or production costs 1.1.2008 | 11,561,027 | 14,937,488 | 26,498,515 |
| Currency translation differences | 0 | 0 | 0 |
| Additions | 1,299,486 | 55,899 | 1,355,385 |
| Change in consolidated group | 0 | -83,286 | -83,286 |
| Disposals | 0 | 0 | 0 |
| Acquisition or production costs 31.12.2008 | 12,860,513 | 14,910,101 | 27,770,614 |
| Accumulated amortization 1.1.2008 | 8,250,384 | 5,183,078 | 13,433,462 |
| Currency translation differences | 0 | 0 | 0 |
| Amortization charge 2008 | 1,690,428 | 1,398,360 | 3,088,788 |
| Impairment charge | 0 | 0 | 0 |
| Disposals | 0 | -79,917 | -79,917 |
| Accumulated amortization 31.12.2008 | 9,940,812 | 6,501,521 | 16,442,333 |
| Carrying amounts 31.12.2008 | 2,919,701 | 8,408,580 | 11,328,281 |
| in EUR | Development costs | Other | Intangible assets |
|---|---|---|---|
| Acquisition or production costs 1.1.2007 | 10,851,712 | 6,113,251 | 16,964,963 |
| Currency translation differences | 5,095 | 4,781 | 9,876 |
| Additions | 1,317,257 | 172,181 | 1,489,438 |
| Change in consolidated group | 0 | 8,647,275 | 8,647,275 |
| Disposals | -613,037 | 0 | -613,037 |
| Acquisition or production costs 31.12.2007 | 11,561,027 | 14,937,488 | 26,498,515 |
| Accumulated amortization 1.1.2007 | 4,450,785 | 2,026,802 | 6,477,587 |
| Currency translation differences | 2,498 | 4,666 | 7,164 |
| Amortization charge 2007 | 2,555,132 | 1,915,135 | 4,470,267 |
| Impairment charge | 1,855,000 | 1,236,475 | 3,091,475 |
| Disposals | -613,031 | 0 | -613,031 |
| Accumulated amortization 31.12.2007 | 8,250,384 | 5,183,078 | 13,433,462 |
| Carrying amounts 31.12.2007 | 3,310,643 | 9,754,410 | 13,065,053 |
In addition to acquired software and rights, the item "other intangible assets" includes other intangible assets, such as trademark rights, distribution rights, orders on hand and customer relations, identified in the allocation of the purchase price in connection with acquisitions under IFRS 3 with a carrying amount of EUR 8,107,573 (prior year: EUR 9,479,884).
The investments in associates, which are recognised according to the equity method changed as follows:
| in EUR | 2008 | 2007 |
|---|---|---|
| Carrying amount 1.1. | 11,466 | 536,857 |
| Additions by acquisition | 0 | 0 |
| Dividend payout | 0 | 0 |
| Profit share after taxes | 0 | -13,063 |
| Elimination of intragroup transactions | 0 | -12,045 |
| Impairment charge | 0 | -500,283 |
| Disposals | 0 | 0 |
| Carrying amount 31.12. | 11,466 | 11,466 |
Based on the available information and assessment of the future development, a need for impairment was established and recognised in the result in the financial year 2007 regarding the share in KEMP Technologies Inc., USA. Thus, the carrying amount of the share in KEMP is EUR 0. The carrying amount of investments in associates reported in these consolidated financial statements relates exclusively to the 25% share in CONSULTING CUBE s.r.l., Italy.
The financial data of the company reported as associate at the balance sheet date are as follows:
| in EUR | 31.12.2008 |
|---|---|
| Assets | 203,704 |
| Liabilities | 157,839 |
| Revenues | 407,308 |
| Result for the period | 12,359 |
Financial assets changed as follows:
| in EUR | Securities |
|---|---|
| Carrying amount 1.1.2008 | 179,781 |
| Disposal | -387 |
| Adjustment to fair value | 3,734 |
| Carrying amount 31.12.2008 | 183,128 |
The securities are shares in investment funds, which are classified as available for sale and carried at fair value (stock market price at the balance sheet date).
Deferred tax assets are recognised under other non-current assets, deferred tax liabilities are included in non-current liabilities.
Deferred taxes are calculated as follows:
| in EUR | Jan. 1, 2008 | Currency translation |
Addition due to acquisition |
Change in income statement |
Dec. 31, 2008 |
|---|---|---|---|---|---|
| Provisions for post-employment benefits | 134,646 | 0 | 0 | -5,062 | 129,584 |
| Tax loss carry-forwards | 3,471,310 | 0 | 0 | -3,148,834 | 322,476 |
| Other | 260,966 | 0 | 0 | 22,347 | 283,313 |
| Deferred tax assets | 3,866,922 | 0 | 0 | -3,131,549 | 735,373 |
| Development costs and other intangible assets | 773,495 | 0 | 0 | -112,254 | 661,241 |
| Other non-current assets | 2,594,858 | 6 | 0 | -370,405 | 2,224,459 |
| Receivables | 332,124 | 0 | 0 | -34,536 | 297,588 |
| Other | 99,726 | 0 | 0 | 15,408 | 115,134 |
| Deferred tax liabilities | 3,800,203 | 6 | 0 | -501,787 | 3,298,422 |
| in EUR | Jan. 1, 2007 | Currency translation |
Addition due to acquisition |
Change in income statement |
Dec. 31, 2007 |
|---|---|---|---|---|---|
| Provisions for post-employment benefits | 150,786 | 0 | 0 | -16,139 | 134,647 |
| Tax loss carry-forwards | 5,974,564 | -2,374 | 0 | -2,500,880 | 3,471,310 |
| Other | 377,364 | 0 | 0 | -116,399 | 260,965 |
| Deferred tax assets | 6,502,714 | -2,374 | 0 | -2,633,418 | 3,866,922 |
| Development costs and other intangible assets | 2,021,734 | 0 | 0 | -1,248,238 | 773,496 |
| Other non-current assets | 1,397,709 | 0 | 2,157,999 | -960,850 | 2,594,858 |
| Receivables | 147,886 | 0 | 0 | 184,238 | 332,124 |
| Other | 54,404 | 0 | 0 | 45,321 | 99,725 |
| Deferred tax liabilities | 3,621,733 | 0 | 2,157,999 | -1,979,529 | 3,800,203 |
Deferred tax assets and deferred tax liabilities are netted and shown in the balance sheet as assets or liabilities provided that the company has an enforceable right to offset actual tax refund claims against actual tax liabilities and that the deferred tax assets and tax liabilities relate to income taxes levied by the same tax authority.
The following amounts were shown in the consolidated balance sheet after netting:
| in EUR | 2008 | 2007 |
|---|---|---|
| Deferred tax assets | 50,723 | 2,628,433 |
| Deferred tax liabilities | -2,613,772 | -2,561,714 |
| Carrying amount 31.12. | -2,563,049 | 66,719 |
Within the next 12 months a realisation of deferred tax assets is expected in the amount of EUR 198,026 and a settlement of deferred tax liabilities in the amount of EUR 627,433.
Deferred tax assets are recognised for loss carry-forwards to the extent that it is probable that future taxable profit will be available against which they can be utilised. In assessing the probability, estimates are based on the available budgeted figures.
In the financial year 2008 deferred tax assets on loss carry-forwards in the amount of EUR 2,903,834 were written off. The write-off was required due to an amendment of the German Corporate Income Tax Act (Körperschaftsteuergesetz). By the Unternehmensteuerreformgesetz (Corporate Tax Reform Act) 2008 the restrictions on loss deductibility were significantly tightened in Germany. As of the financial year 2008, the regulation provides for restrictions on loss deductibility in case of indirect or direct transfers of shares or voting rights. By the takeover bid of BF Informationstechnologie-Beteiligungsgesell¬schaft m.b.H., Wels (BFIB) and the subsequent transfer of this company into BEKO HOLDING AG, Nöhagen, the majority of the shares in BRAIN FORCE HOLDING AG were taken over in 2008.
Thus, no deferred tax assets have been recognised in the Group for the following unused tax losses and for deductible differences, respectively:
| in EUR | Basis | Deferred tax claim |
|---|---|---|
| Tax losses that can be carried forward for an unlimited period of time | 28,525,938 | 7,131,485 |
| Tax losses that can be carried forward for a limited period of time | 1,444,218 | 357,188 |
| Deductible temporary differences | 5,013,860 | 1,253,465 |
| Dec. 31.12.2008 | 34,984,016 | 8,742,138 |
| Dec. 31.12.2007 | 82,002,012 | 24,126,345 |
|---|---|---|
| Deductible temporary differences | 5,938,020 | 1,484,505 |
| Tax losses that can be carried forward for an unlimited period of time | 76,063,992 | 22,641,840 |
| in EUR | Basis | Deferred tax claim |
The significant decline in loss carry-forwards not recognised is due to the change in the German law, according to which the loss carryforwards are forfeited in full, if more than 50% of the shares or voting rights are transferred. The amount of deductible differences mainly relates to write-off made in previous years, which have to be allocated for tax purposes on a systematic basis over 7 years.
Inventories are measured at acquisition or production cost. A write-off to the net realisable value was not necessary in the financial years.
Inventories comprise the following items:
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Work in progress | 14,443 | 12,743 |
| Goods for resale | 171,344 | 255,791 |
| Inventories | 185,787 | 268,534 |
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Trade receivables already invoiced | 27,344,522 | 27,184,992 |
| Less allowance for doubtful accounts | -2,386,002 | -2,217,338 |
| Trade receivables not yet invoiced | 626,362 | 2,673,303 |
| Receivables from construction/service contracts | 1,313,550 | 527,746 |
| Trade receivables | 26,898,432 | 28,168,703 |
Adequate allowances were made to account for the estimated risk of default on receivables, which developed as follows:
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Allowance for doubtful accounts 1.1. | 2,217,338 | 1,843,405 |
| Addition due to acquisition | 0 | 7,230 |
| Utilisation | 0 | -29,570 |
| Reversal | -244,344 | -56,946 |
| Allocation | 413,008 | 453,219 |
| Allowance for doubtful accounts 31.12. | 2,386,002 | 2,217,338 |
The following trade receivables that were not written off are overdue at the balance sheet date:
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Less than 30 days | 4,252,389 | 3,838,657 |
| More than 30 days | 3,703,125 | 3,183,479 |
| Overdue receivables not written off | 7,955,514 | 7,022,136 |
The total of costs incurred and revenues recognised for projects underway at the balance sheet date amounts to EUR 1,679,386 (prior year: EUR 1,287,455). Prepayments received amount to EUR 587,105 (prior year: EUR 62,336).
Other receivables and assets comprise the following items:
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Deposits | 87,750 | 84,742 |
| Convertible bond | 0 | 611,208 |
| Other | 13,962 | 54,962 |
| Non-current other receivables and assets | 101,712 | 750,912 |
| Prepayments | 51,531 | 51,057 |
| Revenue authorities | 187,209 | 266,650 |
| Maintenance contracts and other prepaid expenses | 910,441 | 892,354 |
| Other | 592,699 | 428,588 |
| Current other receivables and assets | 1,741,880 | 1,638,649 |
Simultaneously with the conclusion of the purchase agreement on the acquisition of shares in KEMP Technologies Inc, New York, USA, a convertible bond issued by KEMP in 2005 in the amount of USD 900,000 was underwritten. The bond matures on June 30, 2009 and carries an interest rate of 12%. Due to the economic development of KEMP Technologies Inc., New York, USA, the convertible bond was fully written off.
Cash and cash equivalents comprise the following:
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Cash in hand | 10,244 | 12,991 |
| Cash at bank | 8,789,000 | 9,427,952 |
| Cash and cash equivalents | 8,799,244 | 9,440,943 |
The share capital amounts to EUR 15,386,742 (prior year: EUR 15,386,742) and is divided into 15,386,742 individual no-par value bearer shares.
The shares of the Company are listed on the Vienna Stock Exchange, after the Company had filed an application for the delisting of the shares of BRAIN FORCE HOLDING AG on the Regulated Market at the Frankfurt Stock Exchange on January 29, 2008, which became effective by resolution after May 13, 2008.
At the balance sheet date the authorised capital amounts to EUR 7,693,371 (prior year: EUR 7,693,371).
The authorisation granted at the annual general meeting on May 9, 2007 for the repurchase of treasury stock ended on November 9, 2008.
The development of share capital and reserves is shown in the table below:
| in EUR | Share capital | Reserves |
|---|---|---|
| Balance 1.1.2008 | 15,386,742 | 15,260,503 |
| Other changes | 0 | -15,404 |
| Balance 31.12.2008 | 15,386,742 | 15,245,099 |
| in EUR | Share capital | Reserves |
| Balance 1.1.2007 | 15,386,742 | 24,475,470 |
|---|---|---|
| Used to cover losses | 0 | -9,162,973 |
| Other changes | 0 | -51,994 |
| Balance 31.12.2007 | 15,386,742 | 15,260,503 |
Other reserves comprise the following items at the respective balance sheet date:
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Fair value reserve for securities | -2,774 | -6,508 |
| Reserve for currency translation differences | -288,147 | -269,009 |
| Other reserves | -290,921 | -275,517 |
Provisions for post-employment benefits are broken down as follows:
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Provisions for pensions | 60,806 | 77,590 |
| Provisions for severance payments | 405,815 | 383,780 |
| Provisions for severance payments (TFR) | 1,804,600 | 2,097,999 |
| Provisions for post-employment benefits | 2,271,221 | 2,559,369 |
Due to individual arrangements, three employees of BRAIN FORCE Software GmbH, Munich, Germany, were promised an additional pension after their retirement. The amount of this pension basically depends on the defined benefit plan.
The amounts recognised for provisions for pensions at the balance sheet dates are computed by actuaries based on the projected unit credit method and are broken down as follows:
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Actuarial present value of defined benefit obligation | 170,845 | 199,245 |
| Fair value of plan assets | -164,008 | -137,786 |
| 6,837 | 61,459 | |
| Unrecognised actuarial gains/losses | 53,969 | 16,131 |
| Liability in the balance sheet | 60,806 | 77,590 |
The plan assets pursuant to IAS 19 consist of the insurance cover for the pension commitments pledged in favour of employees. No expected incomes from the plan assets are shown.
The development of the actuarial present value of the defined benefit obligations is as follows:
| in EUR | 2008 | 2007 |
|---|---|---|
| Balance 1.1. | 199,245 | 479,615 |
| Current service cost | 9,531 | 14,967 |
| Interest expense | 7,057 | 15,886 |
| Actuarial (gains)/losses | -31,865 | -36,030 |
| Plan curtailments/settlements | -13,123 | -275,193 |
| Balance 31.12. | 170,845 | 199,245 |
| in EUR | 2008 | 2007 |
|---|---|---|
| Balance 1.1. | 137,786 | 294,969 |
| Actuarial gains/(losses) | 6,976 | -1,361 |
| Effects of plan curtailments/settlements | 0 | -214,605 |
| Paid contributions | 19,246 | 58,783 |
| Balance 31.12. | 164,008 | 137,786 |
The expense/income recognised in the income statement concerning defined benefit obligations comprises the following:
| in EUR | 2008 | 2007 |
|---|---|---|
| Current service cost | 9,531 | 14,967 |
| Interest expense | 7,057 | 15,886 |
| Amortization of actuarial gains | -14,126 | 0 |
| Effects of plan curtailments/settlements | 0 | -43,307 |
| Expense/income for defined benefit obligations | 2,462 | -12,454 |
The interest expense is recognised in the financial result. Thus the expenses for defined benefit obligations recognised in personnel expenses amount to EUR -4,595 (prior year: EUR -28k).
The basic actuarial assumptions are as follows:
| 2008 | 2007 | |
|---|---|---|
| Interest rate | 6% | 5.25% |
| Future salary increases | 3% | 3% |
| Future pension increases | 2% | 2% |
| Pensionable age | 60, 62 years | 60, 62 years |
| Mortality tables – Germany | Heubeck 2005 | Heubeck 2005 |
In addition to defined benefit obligations, fixed contributions are paid to a pension fund for some employees in Austria due to pension commitments; the payments made by the Company are recognised in accordance with IAS 19 as contributions to defined contribution plans.
Pension costs (excluding interest expense) recognised in personnel expenses are broken down as follows:
| in EUR | 2008 | 2007 |
|---|---|---|
| Pension costs – defined benefit plan | -4,595 | -28,340 |
| Pension costs – defined contribution plan | 56,807 | 64,677 |
| Pension costs (excluding interest expense) | 52,212 | 36,337 |
The amounts of the provisions for severance payments were computed in the same way as the provisions for pensions:
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Actuarial present value of defined benefit obligation | 315,257 | 308,750 |
| Unrecognised actuarial gains/losses | 90,558 | 75,030 |
| Liability in the balance sheet | 405,815 | 383,780 |
The development of the provision recognised in the balance sheet is as follows:
| in EUR | 2008 | 2007 |
|---|---|---|
| Balance 1.1. | 383,780 | 410,030 |
| Change in consolidated group | 0 | 69,274 |
| Expenses for severance payments | 46,440 | 75,460 |
| Payments of severance payments | -24,405 | -170,984 |
| Balance 31.12. | 405,815 | 383,780 |
The expense recognised in the income statement includes the following:
| in EUR | 2008 | 2007 |
|---|---|---|
| Current service cost | 33,028 | 51,769 |
| Interest expense | 16,138 | 21,787 |
| Amortization of actuarial losses | -2,726 | 1,904 |
| Expenses for severance payments (Austria) | 46,440 | 75,460 |
The interest expense is recognised in the financial result. Thus the expenses for defined benefit obligations recognised in personnel expenses amount to EUR 30,302 (prior year: EUR 54k).
| 2008 | 2007 | |
|---|---|---|
| Interest rate | 6% | 5.25% |
| Future salary increases | 3% | 3% |
| Average labour turnover | Age-related | Age-related |
| Pensionable age | According to pension reform 2004 | According to pension reform 2004 |
| Mortality tables | AVÖ 1999-P, employees | AVÖ 1999-P, employees |
In the financial year 2008 the values of provisions for severance payments (TFR - Italy) were computed in the same way as the provisions for pensions. The balance recognised at December 31, 2008 amounting to EUR 1,804,600 corresponds to the actuarial net present value of the obligation for severance payments (defined benefit obligation).
The development of the provision recognised in the balance sheet is as follows:
| in EUR | 2008 | 2007 |
|---|---|---|
| Balance 1.1. | 2,097,999 | 3,322,670 |
| Expenses for severance payments | 24,793 | -211,957 |
| Payments of severance payments | -318,192 | -1,012,714 |
| Balance 31.12. | 1,804,600 | 2,097,999 |
| in EUR | 2008 | 2007 |
|---|---|---|
| Current service cost | 0 | 18,892 |
| Interest expense | 104,821 | 115,932 |
| Income due to plan change | 0 | -319,707 |
| Recognition of actuarial gains/losses | -80,028 | -27,074 |
| Expenses for severance payments (Italy) | 24,793 | -211,957 |
The interest expense is recognised in the financial result. Thus, the expenses for defined benefit obligations recognised in personnel expenses amount to EUR 80,028 (prior year: EUR 8,182.08).
The basic actuarial assumptions are as follows:
| 2008 | 2007 | |
|---|---|---|
| Interest rate | 6% | 5% |
| Future salary increases | 3% | 3% |
| Inflation | 2% | 2% |
| Labour turnover | 12.5% | 12.5% |
| Pensionable age | 65 years | 65 years |
| Mortality tables | ISTAT 2002 | ISTAT 2002 |
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Non-current loans | 10,975,548 | 11,308,022 |
| Current loans | 263,520 | 425,500 |
| Bank overdrafts | 2,449,636 | 4,238,967 |
| Current financial liabilities | 2,713,156 | 4,664,467 |
Non-current financial liabilities include a bonded loan in the amount of EUR 10 million taken out in the financial year 2007. The bullet loan carries an interest rate of 5.17 percent and matures in March 2014.
Interest on other loans is currently charged at 2 to 5.5% and on overdrafts at 4.75 to 8.875% (2007: 5 to 9.5%).
At the balance sheet date, the Group had committed credit lines amounting to a total of EUR 7.0 million.
The fair value of the loans amounts to EUR 11,336,025 at the balance sheet date (prior year: EUR 11,505,166).
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Trade payables already invoiced | 6,706,827 | 6,412,185 |
| Advance payments from customers | 74,014 | 1,391,133 |
| Trade payables not yet invoiced | 1,559,632 | 1,977,530 |
| Trade payables | 8,340,473 | 9,780,848 |
Other liabilities include the following:
| in EUR | Dec. 31, 2008 | Dec. 31, 2007 |
|---|---|---|
| Non-current other liabilities | 144,891 | 73,605 |
| Taxes | 2,752,879 | 2,859,286 |
| Social security payables | 1,274,461 | 1,451,812 |
| Holiday entitlements and overtime payables | 1,833,806 | 1,763,086 |
| Bonuses | 1,553,230 | 933,445 |
| Payroll-accounting | 1,327,755 | 2,021,472 |
| Deferred income from maintenance contracts | 2,915,005 | 2,082,443 |
| Other | 1,448,327 | 1,095,039 |
| Current other liabilities | 13,105,463 | 12,206,583 |
| Balance Jan. 1, 2008 | Utilisation | Allocation/Reversal | Balance Dec. 31, 2008 | Balance Dec. 31, 2008 |
|---|---|---|---|---|
| EUR | EUR | EUR | EUR | EUR |
| 762,239 | -852,051 | 0 | 914,373 | 824,561 |
| in EUR | Balance Jan. 1, 2008 |
Utilisation | Reclassi fication |
Reversal | Allocation | Delivery | Balance Dec. 31, 2008 |
|---|---|---|---|---|---|---|---|
| Outstanding purchase price obligations from the acquisition of shares |
1,469,039 | 0 | -1,469,039 | 0 | 0 | 0 | 0 |
| Contingent losses | 74,854 | 0 | -74,854 | 0 | 0 | 0 | 0 |
| Other | 59,610 | -59,610 | 0 | 0 | 0 | 0 | 0 |
| Non-current | 1,603,503 | -59,610 | -1,543,893 | 0 | 0 | 0 | 0 |
| Outstanding purchase price obligations from the acquisition of shares |
2,334,287 | -2,345,671 | 1,469,039 | -1,218,926 | 0 | 0 | 238,729 |
| Rework | 0 | 0 | 0 | 0 | 0 | 668,675 | 668,675 |
| Contingent losses | 135,351 | 0 | 74,854 | -175,205 | 0 | 0 | 35,000 |
| Other | 87,000 | 0 | 0 | -87,000 | 0 | 230,000 | 230,000 |
| Current | 2,556,638 | -2,345,671 | 1,543,893 | -1,481,131 | 0 | 898,675 | 1,172,404 |
The outstanding purchase price obligations from the acquisition of shares at January 1, 2008 relate to BRAIN FORCE B.V., Veenendaal, Netherlands, and SolveDirect.com Internet-Service GmbH, Vienna, EUR 2,345,671 of which was used and EUR 1,218,926 was reversed against goodwill due to a change in planning assumptions and a failure to achieve certain objectives (earn-out obligations). The residual amount relates solely to BRAIN FORCE B.V., Veenendaal, Netherlands.
The cash flow statement was prepared using the indirect method.
It illustrates the change in cash and cash equivalents in the Group resulting from cash inflows and outflows over the reporting period, divided into cash flow from operating, investing and financing activities.
The cash flow from operating activities, based on the result before taxes adjusted for non-cash expenses/income, after changes of funds tied up in working capital and after deduction of paid interest (netted against interest earned), dividends received and income taxes, illustrates the inflow/outflow of cash and cash equivalents from operating activities.
This section shows all cash inflows and outflows relating to additions to and disposals of property, plant and equipment, intangible assets and financial investments, as well as financial assets.
The payments made for acquisitions of companies in 2008 are broken down as follows:
| in EUR | 2008 |
|---|---|
| Settlement variable purchase price obligation for the acquisition of SolveDirect.com Internet-Service GmbH, Vienna | 2,016,600 |
| Settlement variable purchase price obligation BRAIN FORCE B.V. (formerly VAI B.V.), Veenendaal, Netherlands | 325,599 |
| Subsequent adjustment of purchase price SYSTEAM | -126,979 |
| Payments made for acquisitions | 2,215,220 |
This section shows all cash inflows and outflows relating to equity and debt financing.
Cash and cash equivalents include cash in hand and at bank, as long as they are available at short notice and unrestricted.
The BRAIN FORCE Group is exposed to a variety of financial risks (liquidity risk, credit risk, foreign exchange risk, interest rate risk). The principles of risk management of the BRAIN FORCE Group are determined by the management board and monitored by the supervisory board. The risk strategy is implemented decentrally in the respective entities and is coordinated centrally. Necessary safeguards, such as e.g. insurances, are negotiated and concluded centrally for the Group, wherever possible. The liquidity, foreign exchange and interest rate risk is controlled centrally under policies set by the management board and is designed to minimize the potential negative effects on the financial position of the Group.
Liquidity risk refers to the risk that an entity will not have sufficient funds available at any given time to meet its obligations on time. Financial planning is monitored constantly at management level. In addition, detailed analyses and projections are prepared on a quarterly basis. Due to the dynamic nature of the IT industry, the Group aims to maintain flexibility in funding by keeping sufficient credit lines available.
In the financial year 2007 BRAIN FORCE has taken a long-term bonded loan in the amount of EUR 10 million, which matures in 2014 and carries a fixed interest rate of 5.17% per annum. On the part of the financing bank, a measurement was made using an international measurement system at the time the loan was granted, based on the 2005 consolidated financial statements. The measurement is renewed annually. In case the measurement deteriorates more than three notches within one year or falls below a determined notch, the creditors are entitled to terminate the loan agreement. This, however, may only be done on the condition that the termination on the whole is appropriate considering the economic circumstances.
It covers the risk of default in particular, hence the risk that one party fails to meet its obligations and that a default occurs. Despite a widely dispersed customer base in the Group, the operating companies of some countries of the BRAIN FORCE Group depend heavily on individual major customers. In order to be able to minimise the adverse effect on the result in case of defaults by customers, the focus is on expanding the customer base further to reduce these dependencies. The write-offs of receivables and allowances for doubtful accounts recognised in 2008 amount to approx. 1.5% of total receivables.
The risk resulting from fluctuations in fair values of financial instruments or other balance sheet items and/or cash flows due to foreign currency fluctuations is referred to as currency risk. In particular, the risk occurs where business transactions in currencies other than the local currency of the Group exist or can arise in the course of regular business operations.
The BRAIN FORCE Group is not exposed to significant foreign exchange risks as part of its operating activities. 99% of its revenues are generated within the Euro zone, the rest in Switzerland, the Czech Republic and Slovakia. On the assets side, the foreign exchange exposure results from trade receivables not denominated in euro of 1% and, on the liabilities side, from trade payables not denominated in euro of less than 1%.
These and other foreign currency positions are not hedged by derivative financial instruments, because the risk was considered insignificant at the balance sheet date. Thus, any further sensitivity analysis is considered unnecessary.
The interest rate risk refers to the risk resulting from the change of fluctuations in fair values of financial instruments, other balance sheet items and/or interest-related cash flows due to fluctuations of market interest rates. The interest rate risk comprises the fair value risk for balance sheet items bearing fixed interest rates and the cash flow risk for balance sheet items bearing variable interest rates.
For financial instruments carrying fixed interest rates a market interest rate is stipulated for the entire period. The risk exists that the market value (present value of future payments, i.e. interest and repayable amount, discounted at the market interest rate for the remaining term prevailing at the balance sheet date) of the financial instrument changes when the interest rate changes. The price risk caused by changes in interest rate results in a loss or gain, if the fixed-interest bearing financial instrument is sold before maturity. The interest rate for variable interest bearing financial instruments is adjusted immediately and normally follows the respective market interest rate. The risk involved here is that the market interest rate fluctuates and, as a result, changed interest payments will fall due.
At the end of the financial year 2008 financial liabilities accounted for 21% of the balance sheet total. The major part of financial liabilities is accounted for by the long-term bonded loan in the amount of EUR 10 million taken in 2007, which basically carries a fixed interest rate that can only be adjusted in case of a significant change in the credit standing (see liquidity risk). Short-term financial liabilities accounted for 4% of the balance sheet total and mostly carried variable interest rates.
The income and operating cash flows of the BRAIN FORCE Group are largely affected by changes in market interest rates. Cash and cash equivalents are invested on a short-term basis and only into asset-backed instruments of business partners with excellent credit standing.
The Group's objectives regarding the capital risk management include securing its going concern to continue to provide the shareholders with income and the other stakeholders with adequate services, and maintaining an optimal capital structure, in order to reduce capital costs. BRAIN FORCE is not subject to statutory capital requirements. The equity ratio amounts to 36% at the balance sheet date (prior year: 35%).
In the financial year 2008 the Group did not use any derivative financial instruments.
Embedded derivative financial instruments exist, if the economic characteristics and risks of the derivative are not closely related to those of the underlying transaction, a derivative financial instrument concluded on the same terms had to be recognised separately and the hybrid financial instrument is not measured at fair value through profit or loss.
The present case of an embedded derivative financial instrument with the BRAIN FORCE Group is a call option for BRAIN FORCE which is related to the KEMP convertible bond. The underlying transaction is an original financial instrument which is available for sale, however, as it is not listed on the stock exchange and as an active market does not exist, it is measured at amortized cost. If they can be determined reliably, derivative financial instruments are segregated from the respective underlying transaction, measured separately at fair values and recognised in profit or loss.
Due to their short-term nature, trade receivables, other receivables and payables and cash and cash equivalents recognised in the balance sheet basically correspond to their fair values. The fair values stated for financial liabilities are determined as the present value of discounted future cash flows using the market interest rates applicable for financial debt of corresponding maturity and risk structure.
At BRAIN FORCE the business segments of primary segment reporting are structured by region. Revenues, EBITDA and EBIT as well as of assets and liabilities are allocated according to the corporate domicile of the entities to the following regions:
The following business segments are defined for the secondary reporting:
The Professional Services segment offers the experience and know-how of its IT and telecommunications specialists in the form of temporary consulting and service assignments. Such assignments cover all project phases from planning over realisation, test and integration to the actual operation. The scope of the services offered includes: consulting, programming, infrastructure, integration, migration, rollout, operation, support und maintenance.
The Business Solutions segment provides optimized solutions for critical business processes in the following areas: Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Corporate Performance Management/Business Intelligence (CPM/BI) and Financial Services Solutions.
The Technology & Infrastructure segment (also referred to as Infrastructure Optimization) provides solutions for better manageable and more efficient IT infrastructure in the following areas: Server and Data Management, Workspace Management, Application Provisioning and Control, Communication and Collaboration as well as IT Service Management and Network Management & Billing.
The ratios for the financial year 2008 and the prior year are presented following the income statement.
| Business Segment Reporting 2008 in EUR |
Professional Services |
Business Solutions |
Technology & Infrastructure |
Holding and Other |
Group |
|---|---|---|---|---|---|
| Revenues (consolidated) | 26,197,510 | 38,213,841 | 41,796,351 | 0 | 106,207,702 |
| Assets | 6,227,688 | 24,334,438 | 30,541,093 | 5,207,388 | 66,310,607 |
| Capital expenditure | 185,413 | 990,187 | 1,182,083 | 94,987 | 2,452,670 |
| Business Segment Reporting 2007 in EUR |
Professional Services |
Business Solutions |
Technology & Infrastructure |
Holding and Other |
Group |
|---|---|---|---|---|---|
| Revenues (consolidated) | 26,152,450 | 38,162,068 | 34,018,739 | 0,00 | 98,333,257 |
| Assets | 13,536,814 | 17,258,681 | 38,183,663 | 5,363,252 | 74,342,410 |
| Capital expenditure | 348,939 | 1,008,525 | 15,900,007 | 43,061 | 17,300,532 |
Earnings per share is computed by dividing profit after tax by the weighted average number of ordinary shares, adjusted for treasury stock.
| in EUR | 2008 | 2007 |
|---|---|---|
| Profit after tax attributable to the equity holders of the parent company | -2,100,900 | -19,914,710 |
| Weighted average number of ordinary shares (basic and diluted) | 15,386,742 | 15,386,742 |
| Earnings per share (in EUR) | -0.14 | -1.29 |
The consolidated financial statements of the Company will be dealt with in the supervisory board meeting on March 26, 2009. The proposal on profit distribution, which has to be submitted together with the report of the supervisory board, is subject to approval by the annual general meeting.
The major shareholders and the management and supervisory board members of BRAIN FORCE HOLDING AG as well as associates are considered related parties.
Remunerations paid to members of the management board for the financial year 2008 amounted to EUR 592,692, the variable portion of which was EUR 147,692 (prior year: EUR 632,851, variable portion of which EUR 0). These remunerations include the entitlements of members of the management board earned in 2008 and recognised in the income statement. In the 2007 consolidated financial statements the remunerations paid out in the respective year were reported. The prior year figure was adjusted accordingly.
In addition, expenses for severance payments (contributions to staff provision funds) and pensions for members of the management board in the amount of EUR 6,758 (prior year: EUR -443) were expensed as incurred.
In the financial year 2008 remunerations paid to members of the supervisory board amounting to EUR 70,067 (prior year: EUR 66,600) were recognised in the income statement.
Neither were any loans granted to nor guarantees given for the benefit of members of the management and supervisory board.
By purchase and transfer agreement dated July 6, 2007 BRAIN FORCE HOLDING AG took over all shares in SolveDirect.com Internet-Service GmbH, Vienna. The purchase price was partly paid in BRAIN FORCE shares, which pursuant to the purchase and transfer agreement are subject to a gradual lockup.
In a supplemental agreement dated July 6, 2007, concluded between the sellers and BRAIN FORCE HOLDING AG, BRAIN FORCE HOLD-ING AG – provided that certain conditions are met – agrees to the transfer of the shares subject to the lockup to march.sixteen Finance Services LLP, London, Great Britain (M16).
In a separate agreement between the sellers and M16 the sellers undertake to assign 7.5% of the purchase price that the sellers receive from BRAIN FORCE HOLDING AG for the transfer of the shares in SolveDirect.com Internet-Service GmbH to M16, abandoning existing framework agreements. The 7.5% bonus arrangement is paid by the sellers to M16 provided that the purchase price is paid by BRAIN FORCE HOLDING AG to the existing shareholders, thus split into a fixed purchase price, earn-out 2007 and earn-out 2008. In the financial year 2008 the earn-out 2007, based on the 2007 EBITDA pursuant to UGB (Austrian Commercial Code), of SolveDirect.com Internet-Service GmbH was paid out. Since the SolveDirect segment did not achieve the objectives defined in the purchase agreement for the financial year 2008, no earn-out 2008 will be payable.
The former supervisory board member Christian Wolff is shareholder and general manager of M16.
In the financial year 2005 BRAIN FORCE HOLDING AG subscribed a convertible bond issued by the associate KEMP Technologies Inc., New York, USA, in the amount of USD 900,000. This convertible bond carries an interest rate of 12%. The financial result earned in the financial year 2007 before elimination of intragroup transactions is EUR 76,271 (USD 108,000) (prior year: EUR 73,345 (USD 108,000)).
Currently, a share-based compensation plan for employees of BRAIN FORCE HOLDING AG is not in place. Consequently, neither the members of the management board nor of the supervisory board hold any option rights.
The financial instruments listed in the balance sheet are securities, investments, cash and cash equivalents including bank accounts, receivables and supplier credits, as well as financial liabilities. The accounting principles described for each balance sheet item are applicable to original financial instruments.
Information on financial instruments by category:
| in EUR | 2008 | 2007 |
|---|---|---|
| Financial assets available for sale | 183,128 | 179,781 |
| Trade receivables | 26,898,432 | 28,168,703 |
| Other receivables and assets | 754,996 | 1,193,316 |
| Cash and cash equivalents | 8,799,244 | 9,440,943 |
| Loans and receivables | 36,452,672 | 38,802,962 |
| Financial liabilities | 13,688,704 | 15,972,489 |
| Trade payables | 8,266,459 | 8,389,559 |
| Other liabilities | 6,163,118 | 5,886,647 |
| Liabilities recognised at (amortized) cost | 28,118,281 | 30,248,694 |
The carrying amounts and cash flows of the financial liabilities with a remaining maturity of more than one year are as follows.
| Carrying amounts in EUR | 2008 | 2007 |
|---|---|---|
| Non-current financial liabilities | 10,975,548 | 11,308,022 |
| Current portion | 263,520 | 425,500 |
| Financial liabilities due in >1 year | 11,239,068 | 11,733,522 |
| Cash flows in EUR | 2008 | 2007 | |
|---|---|---|---|
| 2009 Redemption | 263,520 | 2008 Redemption | 425,500 |
| 2009 Interest | 566,957 | 2008 Interest | 596,116 |
| 2010 Redemption | 256,520 | 2009 Redemption | 439,562 |
| 2010 Interest | 552,106 | 2009 Interest | 572,774 |
| 2011 Redemption | 409,956 | 2010 Redemption | 482,383 |
| 2011 Interest | 531,785 | 2010 Interest | 548,053 |
| 2012 Redemption | 365,000 | 2011 Redemption | 452,716 |
| 2012 Interest | 520,438 | 2011 Interest | 525,820 |
| 2013 Redemption | 0 | 2012 Redemption | 0 |
| 2013 Interest | 517,000 | 2012 Interest | 517,000 |
| after 2013 Redemption | 9,944,073 | after 2012 Redemption | 9,933,361 |
| after 2013 Interest | 114,889 | after 2012 Interest | 631,889 |
Financial instruments were recognised in the income statement with the following net results:
| in EUR | 2008 | 2007 |
|---|---|---|
| Write-offs of and allowances for trade receivables Operating result, net | 357,803 | 531,153 |
| Financial assets available for sale | 45,060 | 72,994 |
| Loans and receivables | -343,529 | 233,758 |
| Liabilities recognised at (amortized) cost | -1,021,769 | -1,020,158 |
| Financial result, net | -1,320,238 | -713,406 |
| Operating lease commitments or rents in EUR | 2008 | 2007 |
|---|---|---|
| Not later than one year | 3,809,032 | 3,678,766 |
| Later than 1 and not later than 5 years | 10,427,760 | 8,163,414 |
| Later than 5 years | 3,529,113 | 4,790,428 |
| Average | At Dec. 31 | |||
|---|---|---|---|---|
| 2008 | 2007 | 2008 | 2007 | |
| Number of employees (salaried) | 846 | 854 | 816 | 863 |
On March 3, 2009 the management board of BRAIN FORCE HOLDING AG was informed by the Vienna Stock Exchange that the shares of the Company would be removed from the Prime Market Segment of the Vienna Stock Exchange as of March 23, 2009. The Vienna Stock Exchange justified its decision exclusively on the grounds that BRAIN FORCE does not fulfill the criterion of minimum free float market capitalization. As of March 23, 2009 the ordinary shares of BRAIN FORCE HOLDING AG will be traded in the Standard Market Continuous of the Vienna Stock Exchange.
These consolidated financial statements were prepared, signed and authorised for issue by the management board at the date indicated below. The separate financial statements of the parent company, which after the adoption of the applicable accounting standards were also included in the consolidated financial statements, together with the cosolidated financial statements, will be submitted to the supervisory board for review and regarding the separate financial statements also for adoption on March 26, 2009. The supervisory board and, in case of submittal to the general meeting, the shareholders can change these separate financial statements in a way which might also affect the presentation of the consolidated financial statements.
The following persons served on the management board in the financial year 2008:
The following persons served on the supervisory board in the financial year 2008:
Vienna, March 11, 2009 The Management Board:
Günter Pridt Thomas Melzer
The auditor's report below also contains a statement on the group management report, the individual parts of which are presented in the annual report in various sections. The sections concerned of the annual report are marked with an *. The auditor's report below relates to the consolidated financial statements and all parts of the group management report as a whole.
We have audited the accompanying consolidated financial statements of BRAIN FORCE HOLDING AG, Vienna, for the financial year from January 1 to December 31, 2008. These consolidated financial statements comprise the consolidated balance sheet as at December 31, 2008, the consolidated income statement, consolidated cash flow statement and consolidated statement of changes in equity for the year ended December 31, 2008, and a summary of significant accounting policies and other explanatory notes.
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and in accordance with International Standards on Auditing (ISA), issued by the International Auditing and Assurance Standards Board (IAASB) of the International Feder-ation of Accountants (IFAC). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Our audit did not give rise to any objections. Based on the results of our audit in our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the group as of December 31, 2008 and of its financial performance and its cash flows for the financial year from January 1 to December 31, 2008 in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
Utat at. Ut am, conse vulput ing ea ad el eu faci tate tatiscidunt prat. Ut lut in euipsuscilla alisl dolendre vero odigna faccumm olobor adip et, con utpat. Laws and regulations applicable in Austria require us to perform audit procedures whether the group management report is consistent with the consolidated financial statements and whether the other disclosures made in the group management report do not give rise to misconception of the position of the group.
ncilla feu feuis duis eu feu faccum aliqui blan veliqua tetumsan ulputpat ad euismol obortiscipit lore venit do eum volesed eugait irit nim dit In our opinion, the group management report is consistent with the consolidated financial statements.
feum velisim venis accum nisci enisisi tet nos atum vel iriusci blam iure facip et dolorero ent lumsan velit wisit, sim quipit, vendreet ullam, Vienna, March 11, 2009
tem nummoluptate magna facin vullan ent lortie eugait ulla facipit verostrud diat ing ea core conullaoreet alit aciduismodo consecte del elenim iriustrud dolorem dunt nullutat. Met at wiscing estrud tatin ut wis nos adignibh eriuscidunt ut voluptatin volore commodolor iliquat. Nos dit vero eugait praestin eugiamcommod mod dolorer iuscing elit nisl inim inci exerostio conullandit alit at. Onsequis aliqui ex esecte faciliquip PwC INTER-TREUHAND GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
volestio conullan utat. Volorem delent prat elent dolorero consecte commy nulluptat inciliquat ing ea adit nonsed dolobor perostrud magna signed:
faciniam ea feuisit, con eumsandre core veriure con henis nulla cortio do od tem zzrillandit luptatuer sequatem dolobore tat incilisis et autet adignim niam nosto od molobore erostis molortis nosto euis adignibh eugiat. Olorem el incil dolore min eugiat. mmy nullute dip eugiamconse molent ut nostrud tat, vel et augait prat, sequipis dolutatio do consectem zzriure feu facipis sequat veliquip ea faccum exeraessi. Magnisse tetummodolor susto dolore commodolore vel ullandigna faci tie modip eugiam in vullan ex exeros et, veros nullan hendre et alis non ex esequis ercil delisit acidui et volobor adio od magna accum quipissis numsan euguer alit lutat nulput praessim dolorem euguer si tat.
Bor suscill andrem dolorem enis at lorem et wisim veros dionseq uismolor sequat. Mag. Dr. Aslan Milla Wirtschaftsprüfer
BRAIN FORCE Software GmbH Wilhelm-Wagenfeld-Strasse 30 80807 Munich Phone: +49 89 74 833 0 Fax: +49 89 74 833 920 [email protected] http://www.brainforce.de
BRAIN FORCE Software GmbH Ohmstrasse 12 63225 Langen bei Frankfurt Phone: +49 6103 906 767 Fax: +49 6103 906 789 [email protected] http://www.brainforce.de
BRAIN FORCE Software GmbH Im Mediapark 4d 50670 Cologne Phone: +49 221 160 20 0 Fax: +49 221 160 20 13 [email protected] http://www.brainforce.de
BRAIN FORCE Software GmbH Landsberger Allee 117a 10407 Berlin Phone: +49 30 54 99 32 0 Fax: +49 30 54 99 32 921 [email protected] http://www.brainforce.de
BRAIN FORCE S.p.A. Via Alessandro Volta, 16 20093 Milan – Cologno Monzese Phone: +39 02 231 621 Fax: +39 02 273 009 01 [email protected] http://www.brainforce.it
BRAIN FORCE S.p.A. Via Francesco Gentile, 135 00173 Rome Phone: +39 0672 910 119 Fax: +39 0672 159 74 [email protected] http://www.brainforce.it
BRAIN FORCE S.p.A. Via Ticino, 26 35030 Padua – Sarmeola di Rubano Phone: +39 049 897 680 0 Fax: +39 049 897 538 4 [email protected] http://www.brainforce.it
BRAIN FORCE B.V. Kantorenpark de Vendel Vendelier 69 3905 PD Veenendaal Phone: +31 318 560 360 Fax: +31 318 560 370 [email protected] http://www.brainforce.nl
BRAIN FORCE HOLDING AG Karl-Farkas-Gasse 22 / 4. OG 1030 Vienna Phone: +43 1 263 09 09 0 Fax: +43 1 263 09 09 40 [email protected] http://www.brainforce.com
BRAIN FORCE SOFTWARE GmbH Karl-Farkas-Gasse 22 / 2. OG 1030 Vienna Phone: +43 1 5 99 51 0 Fax: +43 1 5 99 51 13 [email protected] http://www.brainforce.at
BFS BRAIN FORCE SOFTWARE AG Balsberg 8058 Zurich Phone: +41 43 813 3310 Fax: +41 43 813 3312 [email protected] http://www.brainforce.ch
BRAIN FORCE SOFTWARE s.r.o. Malá Štepánská 1929 120 00 Prague 2 Phone: + 420 296 331 111 Fax: + 420 296 331 112 [email protected] http://www.brainforce.cz
BRAIN FORCE SOFTWARE s.r.o. Chorvatska 1 811 00 Bratislava 1 Phone: +420 224 817 424 - 6 Fax: +420 224 817 427 [email protected] http://www.brainforce.cz
Acquisitions: Expenditures involved in purchasing a company or equity stake
ATX: "Austrian Traded Price Index", benchmark index of the Vienna Stock Exchange
Body leasing: Recruitment and provisioning of IT experts
BRAIN FORCE Abgeltungssteuer Plus: Consulting solution to optimize pension benefits in accordance with the German tax reform law
BRAIN FORCE Basisrente direkt: Consulting solution to calculate pension benefits
BRAIN FORCE Desktop Manager: Solution for the fully automated administration of configurations, applications and user profiles
BRAIN FORCE Finanzanalyse Center: Integrated analysis solution enabling financial consulting of private and corporate customers
BRAIN FORCE FINAS Suite: Front office solutions for financial service providers
BRAIN FORCE ICT Suite: Comprehensive solution for the documentation and organiztion of ICT networks
BRAIN FORCE Net Organizer: Documentation and organization of ICT infrastructure
BRAIN FORCE Packaging Robot: Solution from best practice methodologies and software tools for automated software packaging
BRAIN FORCE Vorsorgeoptimierung: Consulting solution to determine gaps in pension benefits
BRAIN FORCE Wohnriester: Consulting solution to make use of public subsidies
Business solutions: Application solutions and services to support business processes
Capital employed: Equity and interest-bearing debt (incl. Group balances) less liquid funds and financial assets = the entire interest-bearing capital applied in the company
Capital expenditure: Additions to property, plant and equipment and intangible assets
Cash flow: Earnings indicator for corporate analyses – describes the increase in cash and cash equivalents in an accounting period
Corporate governance: Behavioral rules underlying responsible management and control of companies, laid out in the Austrian Corporate Governance Code, which is comprised of voluntary guidelines.
DAX: "Deutscher Aktien Index", the benchmark index of the German Stock Exchange
Deferred taxes: Temporary differences between the tax bases and the IFRS balance sheet lead to deferred taxes
Depreciation and amortization: Value which must be generated annually to have sufficient funds at the end of the useful life of assets to finance replacement investments
Do once approach: Area-wide sales organization with centralized product development
DSO: "Days Sales Outstanding"
EBIT: Earnings before interest and tax (operating profit)
EBITDA: Earnings before interest, tax, depreciation and amortization; operating profit before depreciation/amortization = gross cash flow
EBITDA margin: EBITDA in relation to revenues
Equity ratio: An indicator measuring the ratio of equity to total assets
EPS: Earnings per share = Profit after tax divided by the weighted number of shares less treasury stock
Equity method: Valuation method in Group accounting for equity stakes of between 20% and 50%
FFO: "Funds from operations" = Gross cash flow
Free cash flow: Cash flow from operating activities less cash flow from investing activities plus acquisitions; indicating the liquid funds generated in a given financial year which are available for dividends, expansion projects, loan repayments or share buybacks
Gearing: Ratio of net debt to equity
Goodwill: Positive difference between the acquisition price and the net worth of a company
IFRS: International Financial Reporting Standards
Infrastructure Optimization: Solutions enabling companies to achieve a more manageable and efficient IT infrastructure
Interest cover: Ratio of EBITDA to the net interest result, showing how often the operating result of a company can pay for the interest expense
ICT: Information and communication technology
Jupiter: Asset management solution for banks
Managed Services: Adoption of IT processes by customers
Microsoft Dynamics: Business solutions developed by Microsoft especially for mediumsized companies
Net debt: Balance of financial liabilities less cash and cash equivalents
OTC: Over-the-counter trading among financial market participants outside of the organized market
Payroll Services: Adoption of personnel and salary administration services
P/E ratio: price-earnings ratio, the yardstick underlying the valuation of a share on the capital market
Professional Services: Services from the fields of Business Solutions and Infrastructure Solutions complemented by IT recruiting
Rebecca: Solution for credit processing
SD.cube ML: Central application for all internal and external IT service processes
TECDAX: German share index for technology companies
Treasury: Corporate function designed to secure financing, manage financial risk and the cash management of the Group
Visual Space: Software for the resource planning of small and medium-sized enterprises
VMware ThinApp: Software for the virtualization of application programs
WACC: "Weight Average Cost of Capital", average costs of capital which a company must pay to finance its external borrowing and equity on financial markets
Working Capital: Current assets excl. cash - current liabilities excl. financial liabilities
The members of the Management Board confirm to best of their knowledge that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group as required by the applicable accounting standards. The group management report gives a true and fair view of the development and performance of the business and the position of the group, together with a description of the principal risks and uncertainties the group faces.
The members of the Management Board confirm to the best of their knowledge that the separate financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the parent company as required by the applicable accounting standards and that the management report gives a true and fair view of the development and performance of the business and the position of the company, together with a description of the principal risks and uncertainties the company faces.
Vienna, March 11, 2009
The Management Board:
Günter Pridt Thomas Melzer Chairman Deputy Chaiman
zum 31. Dezember 2008 nach UGB der BRAIN FORCE HOLDING AG, Wien
| 31.12.2008 | 31.12.2007 | 31.12.2008 | 31.12.2007 | |||
|---|---|---|---|---|---|---|
| EUR | TEUR | EUR | TEUR | |||
| A. Anlagevermögen | A. Eigenkapital | |||||
| I. Immaterielle Vermögensgegenstände |
I. Grundkapital |
15.386.742,00 | 15.387 | |||
| Software und Markenrechte | 62.693,18 | 153 | II. Kapitalrücklagen | |||
| gebundene | 19.568.310,46 | 19.568 | ||||
| II. Sachanlagen | III. Bilanzgewinn, davon Gewinnvortrag EUR 0 | 530.420,87 | 0 | |||
| 1. Bauten auf fremdem Grund | 58.343,40 | 3 | (Vorjahr: TEUR 2.188) | |||
| 2. andere Anlagen, Betriebs- und Geschäftsausstattung | 64.374,86 | 95 | 35.485.473,33 | 34.955 | ||
| 122.718,26 | 98 | |||||
| III. Finanzanlagen | B. Rückstellungen | |||||
| 1. Anteile an verbundenen Unternehmen | 43.394.538,74 | 44.740 | 1. Rückstellungen für Abfertigungen | 49.232,00 | 48 | |
| 2. Beteiligungen | 0,00 | 0 | 2. sonstige Rückstellungen | 904.091,78 | 4.380 | |
| 3. Ausleihungen an Unternehmen, mit denen ein | 953.323,78 | 4.428 | ||||
| Beteiligungsverhältnis besteht | 0,00 | 609 | ||||
| 4. Wertpapiere des Anlagevermögens | 32.748,00 | 33 | C. Verbindlichkeiten | |||
| 43.427.286,74 | 45.382 | 1. Verbindlichkeiten gegenüber Kreditinstituten | 11.058.848,95 | 10.511 | ||
| 43.612.698,18 | 45.633 | 2. Verbindlichkeiten aus Lieferungen und Leistungen | 238.210,21 | 112 | ||
| 3. Verbindlichkeiten gegenüber verbundenen Unternehmen | 656.838,71 | 469 | ||||
| B. Umlaufvermögen | 4. sonstige Verbindlichkeiten, | 470.234,10 | 282 | |||
| I. | Forderungen und sonstige Vermögensgegenstände | davon aus Steuern EUR 35.526,72 (Vorjahr: TEUR 50), | ||||
| 1. Forderungen gegenüber verbundenen Unternehmen | 4.852.888,61 | 3.100 | davon im Rahmen der sozialen Sicherheit EUR 13.615,69 | |||
| 2. sonstige Forderungen und Vermögensgegenstände | 242.462,49 | 150 | (Vorjahr: TEUR 17) | |||
| 5.095.351,10 | 3.250 | 12.424.131,97 | 11.374 | |||
| II. Kassenbestand, Guthaben bei Kreditinstituten | 58.045,29 | 1.734 | ||||
| 5.153.396,39 | 4.984 | |||||
| C. Rechnungsabgrenzungsposten | 96.834,51 | 140 | ||||
| 48.862.929,08 | 50.757 | 48.862.929,08 | 50.757 |
Eventualverbindlichkeiten 1.225.145,24 1.409
| 2008 | 2007 | |
|---|---|---|
| EUR | TEUR | |
| 1. Umsatzerlöse | 3.172.663,22 | 921 |
| 2. sonstige betriebliche Erträge | ||
| a) Erträge aus der Auflösung von Rückstellungen | 0,00 | 80 |
| b) übrige | 515.282,87 | 365 |
| 515.282,87 | 445 | |
| 3. Personalaufwand | ||
| a) Gehälter | -1.224.273,91 | -1.273 |
| b) Aufwendungen für Abfertigungen und Leistungen an | ||
| betriebliche Mitarbeitervorsorgekassen | -13.325,78 | -28 |
| c) Aufwendungen für Altersversorgung | -4.834,66 | -5 |
| d) Aufwendungen für gesetzlich vorgeschriebene Sozial | ||
| abgaben sowie vom Entgelt abhängige Abgaben und | ||
| Pflichtbeiträge | -170.386,82 | -233 |
| e) sonstige Sozialaufwendungen | -1.104,48 | 1 |
| -1.413.925,65 | -1.538 | |
| 4. Abschreibungen auf immaterielle Gegenstände des Anlage | ||
| vermögens und Sachanlagen | -130.598,85 | -132 |
| 5. sonstige betriebliche Aufwendungen | ||
| a) Steuern, soweit sie nicht unter Z 13 fallen | -13.872,37 | -32 |
| b) übrige | -2.782.997,22 | -3.850 |
| -2.796.869,59 | -3.882 | |
| 6. Zwischensumme aus Z 1 bis 5 (Betriebsergebnis) | -653.448,00 | -4.186 |
| 7. Erträge aus Beteiligungen an verbundenen Unternehmen | 2.000.000,00 | 0 |
| 8. sonstige Zinsen und ähnliche Erträge, davon aus verbun | ||
| denen Unternehmen EUR 112.460,85 (Vorjahr: TEUR 136) | 251.031,02 | 368 |
| 9. Aufwendungen aus Finanzanlagen und aus Wertpapieren | ||
| des Umlaufvermögens, davon | -609.380,70 | -6.959 |
| a) Abschreibungen EUR 609.120 (Vorjahr: TEUR 6.892) | ||
| b) Aufwendungen aus verbundenen Unternehmen EUR 0 | ||
| (Vorjahr TEUR 6.251) | ||
| 10. Zinsen und ähnliche Aufwendungen | -627.287,19 | -601 |
| 11. Zwischensumme aus Z 7 bis 10 (Finanzergebnis) | 1.014.363,13 | -7.192 |
| 12. Ergebnis der gewöhnlichen Geschäftstätigkeit | 360.915,13 | -11.378 |
| 13. Steuern vom Einkommen und vom Ertrag, | 169.505,74 | -108 |
| davon Steuerumlage an Gruppenmitglied EUR 169.505,74 | ||
| (Vorjahr: TEUR 108) | ||
| 14. Jahresüberschuss/-fehlbetrag | 530.420,87 | -11.486 |
| 15. Auflösung von Kapitalrücklagen | 0,00 | 9.163 |
| 16. Auflösung von Gewinnrücklagen | 0,00 | 135 |
| 17. Jahresgewinn/-verlust | 530.420,87 | -2.188 |
| 18. Gewinnvortrag aus dem Vorjahr | 0,00 | 2.188 |
| 19. Bilanzgewinn | 530.420,87 | 0 |
Auf den vorliegenden Jahresabschluss zum 31. Dezember 2008 wurden die Rechnungslegungsbestimmungen des Unternehmensgesetzbuches in der geltenden Fassung angewandt.
Der Jahresabschluss wurde unter Beachtung der Grundsätze ordnungsmäßiger Buchführung und Bilanzierung sowie unter Beachtung der Generalnorm, ein möglichst getreues Bild der Vermögens-, Finanz- und Ertragslage des Unternehmens zu vermitteln, aufgestellt.
Bei der Erstellung des Jahresabschlusses wurde der Grundsatz der Vollständigkeit eingehalten.
Bei der Bewertung der einzelnen Vermögensgegenstände und Schulden wurde der Grundsatz der Einzelbewertung beachtet und eine Fortführung des Unternehmens unterstellt.
Dem Vorsichtsprinzip wurde dadurch Rechnung getragen, dass nur die am Abschlussstichtag verwirklichten Gewinne ausgewiesen werden. Alle erkennbaren Risiken und drohenden Verluste wurden berücksichtigt.
Die Gewinn- und Verlustrechnung wird nach dem Gesamtkostenverfahren erstellt.
Die Bewertung der ausschließlich entgeltlich erworbenen immateriellen Vermögensgegenstände erfolgt zu Anschaffungskosten, vermindert um die der voraussichtlichen wirtschaftlichen Nutzungsdauer entsprechenden planmäßigen Abschreibungen. Die planmäßigen Abschreibungen werden linear vorgenommen.
Die Sachanlagen werden zu Anschaffungs- oder Herstellungskosten, vermindert um die planmäßigen Abschreibungen bewertet. Die planmäßigen Abschreibungen werden entsprechend der voraussichtlichen Nutzungsdauer linear vorgenommen.
Für Zugänge während der ersten Hälfte des Geschäftsjahres wird die volle Jahresabschreibung, für Zugänge während der zweiten Hälfte des Geschäftsjahres die halbe Jahresabschreibung verrechnet.
Geringwertige Vermögensgegenstände des Anlagevermögens mit Einzelanschaffungswerten von bis zu EUR 400 werden im Zugangsjahr voll abgeschrieben und im Anlagenspiegel als Zugang und Abgang dargestellt.
Die Finanzanlagen sind mit den Anschaffungskosten bzw. bei wesentlicher Wertminderung mit den niedrigeren Börsenkursen bzw. dem niedrigeren beizulegenden Wert zum Bilanzstichtag bewertet.
Die Forderungen und sonstigen Vermögensgegenstände sind zum Nennwert bewertet, soweit nicht im Fall erkennbarer Risiken erforderliche Einzelwertberichtigungen vorgenommen werden und der niedrigere beizulegende Wert angesetzt wird.
Forderungen in Fremdwährung werden mit dem Entstehungskurs oder mit dem für die Bilanzierung niedrigeren Stichtagskurs bewertet.
Kassenbestand und Guthaben bei Kreditinstituten werden zum Nennwert bewertet. Auf Fremdwährung lautende Guthaben bei Kreditinstituten werden mit dem Entstehungskurs oder dem niedrigeren Kurs zum Bilanzstichtag bilanziert.
Die Rückstellungen werden unter Bedachtnahme auf den Grundsatz der unternehmerischen Vorsicht in Höhe des voraussichtlichen Anfalls gebildet.
Die Bilanzierung der Rückstellungen für Abfertigungen nach versicherungsmathematischen Grundsätzen erfolgt gemäß den Richtlinien der "International Financial Reporting Standards" (IFRS) nach der sogenannten "Methode der laufenden Einmalprämien" nach IAS 19.
Die Berechnung erfolgt auf Basis eines Rechnungszinssatzes von 6% (Vorjahr: 5,25%) und einer wie im Vorjahr 3%-igen Gehaltssteigerung. Für die Berechnung der Rückstellungen wurden die Rechnungsgrundlagen AVÖ 2008-P verwendet. Das Pensionseintrittsalter wurde bei den Rückstellungen für Abfertigungen gemäß Pensionsreform 2004 angesetzt. Die Annahmen für die Fluktuation erfolgten auf Basis von Erfahrungswerten.
Auf Basis der getroffenen versicherungsmathematischen Annahmen wurde der Barwert der leistungsorientierten zukünftigen Verpflichtungen errechnet. Im Rahmen der Bewertung und Erfassung der Rückstellung sieht IAS 19 vor, dass im Rahmen der Bewertung aufgetretene versicherungsmathematische Gewinne oder Verluste nicht berücksichtigt werden müssen, soweit der Gesamtbetrag der versicherungsmathematischen Gewinne oder Verluste 10% (= Korridor) des Barwertes der Verpflichtung nicht übersteigt. Übersteigt der Betrag der nicht angesetzten versicherungsmathematischen Gewinne oder Verluste den Korridor, so ist der übersteigende Betrag erfolgswirksam verteilt über die Restdienstzeit der aktiven Dienstnehmer zu buchen.
Die Anwendung der Korridormethode gemäß IAS 19 führte bei den Rückstellungen für Abfertigungen zu im Bilanzansatz nicht berücksichtigten versicherungsmathematischen Gewinnen in Höhe von EUR 32.459 (Vorjahr: EUR 33.124).
Die Bewertung der Verbindlichkeiten erfolgte mit dem Rückzahlungsbetrag unter Bedachtnahme auf den Grundsatz der Vorsicht.
Fremdwährungsverbindlichkeiten wurden mit dem Entstehungskurs oder mit dem höheren Kurs zum Bilanzstichtag angesetzt.
Entwicklung des Anlagevermögens:
| Anschaffungs-/Herstellungskosten | kumulierte | Restbuchwerte | Abschreibungen | |||||
|---|---|---|---|---|---|---|---|---|
| Stand 1.1.2008 |
Zugänge | Abgänge | Stand 31.12.2008 |
Abschrei- bungen |
Stand 31.12.2008 |
Stand 31.12.2007 |
des laufenden Geschäftsjahres |
|
| EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | |
| I. Immaterielle Vermögensgegenstände Software und Markenrechte |
471.490,63 | 4.020,00 | 0,00 | 475.510,63 | 412.817,45 | 62.693,18 | 152.890,97 | 94.217,79 |
| II. Sachanlagen 1. Bauten auf fremdem Grund 2. andere Anlagen, Betriebs- und Geschäfts ausstattung *) |
2.920,00 332.922,79 |
66.252,72 24.714,00 |
10.829,32 66.654,33 |
58.343,40 290.982,46 |
0,00 226.607,60 |
58.343,40 64.374,86 |
2.774,00 95.389,68 |
1.082,93 35.298,13 |
| 335.842,79 | 90.966,72 | 77.483,65 | 349.325,86 | 226.607,60 | 122.718,26 | 98.163,68 | 36.381,06 | |
| III. Finanzanlagen 1. Anteile an verbundenen Unternehmen 2. Beteiligungen |
63.524.748,07 583.278,65 |
0,00 0,00 |
1.345.304,94 0,00 |
62.179.443,13 583.278,65 |
18.784.904,39 583.278,65 |
43.394.538,74 0,00 |
44.739.843,68 0,00 |
0,00 0,00 |
| 3. Ausleihungen an Unternehmen, mit denen ein Beteiligungsverhältnis besteht 4. Wertpapiere des Anlagevermögens |
751.590,00 35.405,28 |
0,00 0,00 |
0,00 380,70 |
751.590,00 35.024,58 |
751.590,00 2.276,58 |
0,00 32.748,00 |
609.120,00 33.128,70 |
609.120,00 0,00 |
| 64.895.022,00 65.702.355,42 |
0,00 94.986,72 |
1.345.685,64 | 63.549.336,36 1.423.169,29 64.374.172,85 |
20.122.049,62 20.761.474,67 |
43.427.286,74 43.612.698,18 |
45.382.092,38 45.633.147,03 |
609.120,00 739.718,85 |
*) davon geringwertige Vermögensgegenstände
gemäß § 13 EStG 6.587,90 6.587,90 6.587,90
Bei den immateriellen Vermögensgegenständen werden als Nutzungsdauern im Falle von Markenrechten 10 Jahre bzw. bei Software 4 - 5 Jahre angenommen.
Im Geschäftsjahr wurden keine immateriellen Vermögensgegenstände von verbundenen Unternehmen erworben (Vorjahr: keine).
Den linear vorgenommenen Abschreibungen liegen folgende Nutzungsdauern zugrunde:
| Jahre | |
|---|---|
| EDV-Anlagen | 3 - 5 |
| Büromaschinen | 4 - 5 |
| sonstige Büroeinrichtung | 4 - 10 |
Im Bereich der Anteile an verbundenen Unternehmen setzen sich die Abgänge in Höhe von EUR 1.345.304,94 (Vorjahr: TEUR 2.389) wie folgt zusammen:
| 31.12.2008 EUR |
|
|---|---|
| Anpassung der Anschaffungskosten der BRAIN FORCE B.V. (vormals VAI B.V.) Veenendaal, Niederlande |
318.366,00 |
| Anpassung der Anschaffungskosten der SolveDirect.com Internet Service GmbH, Wien (im Geschäftsjahr 2007 verschmolzen mit der |
|
| BRAIN FORCE SOFTWARE GmbH, Wien) Anpassung der Anschaffungskosten der BRAIN FORCE Frankfurt GmbH |
900.560,00 |
| (vormals SYSTEAM Ingenieurbüro für Datenkommunikation und In formatik GmbH) (im Geschäftsjahr 2008 verschmolzen mit der BRAIN |
|
| FORCE Software GmbH, München, Deutschland) | 126.378,94 |
| 1.345.304,94 |
Die Anpassungen der Anschaffungskosten der BRAIN FORCE B.V. und der SolveDirect.com Internet-Service GmbH erfolgten aufgrund nicht erreichter Ziele bzw. geänderter Einschätzungen und der damit zusammenhängenden Reduktion der variablen Kaufpreisverpflichtungen. Die Anpassung der BRAIN FORCE Frankfurt GmbH resultiert aus einer Haftungsinanspruchnahme der Alteigentümer und der darauf folgenden anteiligen Rückzahlung.
Im Geschäftsjahr 2007 wurde im Posten Beteiligungen der 30%-Anteil an der KEMP Technologies Inc., New York, USA, aufgrund einer eingetretenen Wertminderung vollständig abgeschrieben.
Die Ausleihungen beinhalten die im Geschäftsjahr 2005 von der KEMP Technologies Inc. ausgegebene Wandelanleihe in Höhe von USD 900.000. Die Anleihe hat eine Laufzeit bis 30. Juni 2009 und ist mit 12 % verzinst. Aufgrund der wirtschaftlichen Entwicklung und der schwierigen Rahmenbedingungen in den USA wird die Rückzahlung durch die KEMP Technologies Inc. am 30. Juni 2009 als unsicher betrachtet und zu 100 % abgeschrieben.
In den Forderungen und sonstigen Vermögensgegenständen sind Forderungen in Höhe von EUR 815.074,63 (Vorjahr: TEUR 1.142) enthalten, die eine Restlaufzeit von mehr als einem Jahr aufweisen.
Die Forderungen gegenüber verbundenen Unternehmen bestehen in Höhe von EUR 2.379.908,45 (Vorjahr: TEUR 362) aus Darlehen sowie aus einer Forderung in Höhe von EUR 900.000 (Vorjahr: TEUR 1.642) aus unbaren Entnahmen im Rahmen eines Umgründungsvorganges. Die restlichen Forderungen betreffen Lieferungen und Leistungen in Höhe von EUR 1.497.813,98 (Vorjahr: TEUR 1.096) sowie eine Forderung aus Steuerumlage in Höhe von EUR 75.166,18 (Vorjahr: TEUR 0).
In den sonstigen Forderungen sind Erträge in Höhe von EUR 175.151,04 (Vorjahr: TEUR 73) enthalten, die erst nach dem Bilanzstichtag zahlungswirksam werden.
Das Grundkapital beträgt zum Bilanzstichtag EUR 15.386.742 und ist in 15.386.742 nennwertlose Stückaktien, welche auf Inhaber lauten, aufgeteilt.
Die Aktien der Gesellschaft notieren an der Wiener Börse.
Die Gesellschaft hat am 29. Jänner 2008 einen Antrag auf Widerruf der Zulassung der Aktien der BRAIN FORCE HOLDING AG zum regulierten Markt an der Frankfurter Wertpapierbörse gestellt, welcher aufgrund eines Beschlusses mit Ablauf des 13. Mai 2008 wirksam wurde.
Das genehmigte Kapital beträgt zum Bilanzstichtag EUR 7.693.371 (Vorjahr: TEUR 7.693).
Das Grundkapital und die Kapitalrücklagen sind gegenüber dem Vorjahr unverändert.
Die in der ordentlichen Hauptversammlung vom 9. Mai 2007 erteilte Genehmigung zum Rückkauf von eigenen Aktien endete am 9. November 2008.
Die sonstigen Rückstellungen enthalten folgende Posten:
| 31.12.2008 EUR |
31.12.2007 TEUR |
|
|---|---|---|
| nicht konsumierte Urlaube | 23.813,42 | 22 |
| Prämien | 193.825,00 | 14 |
| Wirtschaftsprüfung und Beratung | 109.275,00 | 337 |
| offene Kaufpreisverpflichtungen aus Anteilserwerb | 238.729,00 | 3.803 |
| übrige | 338.449,36 | 204 |
| 904.091,78 | 4.380 | |
Am 6. März 2007 wurde ein endfälliges Darlehen über EUR 10 Mio. aufgenommen, welches am 20. März 2014 zurückzuführen ist.
Die restlichen Verbindlichkeiten haben eine Restlaufzeit von weniger als einem Jahr.
Die Verbindlichkeiten gegenüber verbundenen Unternehmen resultieren aus Lieferungen und Leistungen in Höhe von EUR 656.838,71 (Vorjahr: TEUR 469, davon TEUR 94 aus Steuerumlage).
In den sonstigen Verbindlichkeiten sind Aufwendungen in Höhe von EUR 470.234,10 (Vorjahr: TEUR 282) enthalten, die erst nach dem Bilanzstichtag zahlungswirksam werden.
Im Geschäftsjahr 2008 wurden Umsatzerlöse aus Dienstleistungen und aus der Verrechnung von Markenlizenzentgelten an Beteiligungsunternehmen erzielt.
Von den Umsatzerlösen in Höhe von EUR 3.172.663,22 (Vorjahr: TEUR 921) wurden EUR 458.089,86 (Vorjahr: TEUR 124) im Inland erwirtschaftet. Weitere EUR 2.705.498,85 (Vorjahr: TEUR 793) wurden in übrigen Ländern der Europäischen Union bzw. EUR 9.074,51 (Vorjahr: TEUR 4) in Nicht-EU-Ländern erzielt.
Die Gesellschaft ist Gruppenträger einer Unternehmensgruppe nach § 9 KStG und hat mit dem Gruppenmitglied, der BRAIN FORCE SOFTWARE GmbH, Wien, einen Steuerumlagevertrag geschlossen. Die auf Basis der Belastungsmethode ermittelte Steuerumlage für das Geschäftsjahr 2008 sieht eine Belastung an das Gruppenmitglied in Höhe von EUR 169.505,74 (Vorjahr: Erstattung von TEUR 108) vor.
Der in der steuerlichen Gruppe aufgrund der zeitlichen Differenzen gemäß § 198 Abs. 10 UGB aktivierbare Betrag beträgt ohne Berücksichtigung des steuerlich entstandenen Verlustes bzw. der voraussichtlichen Nutzbarkeit EUR 1.312.405 (Vorjahr: TEUR 1.584) und resultiert vorwiegend aus der unterschiedlichen Behandlung von außerplanmäßigen Abschreibungen auf Beteiligungen.
| Name/Sitz | Anteil am Kapital |
Eigenkapital zum 31.12.2008 |
Jahres ergebnis |
|---|---|---|---|
| % | EUR | EUR | |
| BRAIN FORCE SOFTWARE GmbH, Wien BRAIN FORCE Software GmbH, München, |
100 | 2.805.180 | 419.446 |
| Deutschland 1) | 100 | 5.680.312 | 2.046.587 |
| BRAIN FORCE S.p.A., Mailand, Italien | 100 | 1.785.428 | 164.233 |
| BFS Brain Force Software AG, Kloten, | |||
| Schweiz 2) | 100 | -1.803 | 69.879 |
| BRAIN FORCE B.V. (vormals VAI B.V.), | |||
| Veenendaal, Niederlande | 100 | 2.178.570 | 269.655 |
| BRAIN FORCE Network Solutions B.V., | |||
| Veenendaal, Niederlande | 100 | -255.493 | 1.190 |
| BRAIN FORCE SOFTWARE s.r.o., Prag, | |||
| Tschechien 2) | 100 | 200.930 | 62.454 |
| KEMP Technologies Inc., New York, USA 3) | 30 | 32.763 | -81.385 |
1) inkl. der im Geschäftsjahr 2008 verschmolzenen BRAIN FORCE Frankfurt GmbH (vormals SYSTEAM Ingenieurbüro für Datenkommunikation und Informatik GmbH), Langen, Deutschland
2) Dabei handelt es sich um vorläufige Zahlen zum Jahresabschluss 2008.
3) Dabei handelt es sich um Zahlen zum 31. Dezember 2007.
Verbundene Unternehmen im Sinne des § 228 Abs. 3 UGB sind alle Unternehmen, die zum Konzern der CROSS Industries AG, Wels, gehören. Geschäfte mit diesen Gesellschaften werden wie mit unabhängigen Dritten abgewickelt.
Die BRAIN FORCE HOLDING AG, Wien, ist mehrheitlich im Besitz der BEKO HOLDING AG, Nöhagen. Die oberste Konzerngesellschaft ist die CROSS Industries AG mit Sitz in Wels.
Mit der BFS Brain Force Software AG, Kloten, Schweiz, wurde eine Rangrücktrittsvereinbarung basierend auf Forderungen der BRAIN FORCE HOLDING AG abgeschlossen. Der Umfang des vom Rangrücktritt erfassten Betrages ist EUR 83.849,99. Eine Begleichung der Forderung durch die BFS Brain Force Software AG, Kloten, Schweiz, ist nach Schweizer Recht erst möglich, wenn keine Besorgnis der Überschuldung mehr vorliegt.
Weiters hat die BRAIN FORCE HOLDING AG gegenüber der Deutsche Bank AG, München, Deutschland, eine unwiderrufliche und unbedingte Zahlungsgarantie für eine Finanzierungsverbindlichkeit der BRAIN FORCE Software GmbH, München, Deutschland, in Höhe von EUR 750.000 übernommen.
Gegenüber der Volksbank Dreieich eG hat die BRAIN FORCE HOLDING AG eine selbstschuldnerische Bürgschaft zur Sicherung der bestehenden Forderungen der Bank gegenüber der BRAIN FORCE Software GmbH, München, Deutschland, übernommen. Zum 31. Dezember 2008 beträgt die Forderung der Volksbank Dreieich eG EUR 391.295,25 (Vorjahr: TEUR 548).
Finanzielle Verpflichtungen der Gesellschaft aus der Nutzung von in der Bilanz nicht ausgewiesenen Sachanlagen des folgenden Geschäftsjahres betragen EUR 443.633,06 (Vorjahr: TEUR 495) und der Gesamtbetrag der folgenden fünf Jahre beläuft sich auf insgesamt EUR 2.057.450,44 (Vorjahr: TEUR 2.365).
Die durchschnittliche Zahl der Arbeitnehmer (= Angestellte) betrug im Geschäftsjahr 2008 9 Personen (Vorjahr: 11).
Derzeit besteht kein Mitarbeiterbeteiligungsprogramm in der BRAIN FORCE HOLDING AG.
Die Aufwendungen für Abfertigungen und Pensionen für Vorstandsmitglieder und leitende Angestellte im Sinne des § 80 AktG betragen EUR 9.755 (Vorjahr: TEUR 0) und für andere Arbeitnehmer EUR 8.405 (Vorjahr: TEUR 47). Von den Gesamtaufwendungen sind EUR 783 (Vorjahr: TEUR 14) unter dem Posten "Zinsen und ähnliche Aufwendungen" ausgewiesen.
Der Posten "Aufwendungen für Abfertigungen und Leistungen an betriebliche Mitarbeitervorsorgekassen" enthält Aufwendungen für Abfertigungen in Höhe von EUR 385 (Vorjahr: TEUR 17).
Die Bezüge der Vorstandsmitglieder für das Geschäftsjahr 2008 betrugen EUR 592.692 (Vorjahr: TEUR 633 , davon TEUR 44 von verbundenen Unternehmen). Die angegebenen Bezüge beinhalten die im Jahr 2008 erworbenen und im Aufwand erfassten Ansprüche der Vorstandsmitglieder. Im Jahresabschluss 2007 wurden die im jeweiligen Jahr ausbezahlten Bezüge berichtet. Der Vorjahreswert wurde entsprechend angepasst.
In den Bezügen sind variable Anteile in Höhe von EUR 147.692 (Vorjahr: TEUR 0) enthalten.
Im Geschäftsjahr 2008 wurden Vergütungen an Aufsichtsratsmitglieder in Höhe von EUR 70.067 (Vorjahr: TEUR 67) aufwandsmäßig erfasst.
Im Geschäftsjahr 2008 waren folgende Personen als Vorstand tätig:
Günter Pridt, Wien, Vorsitzender, vertritt selbständig Mag. Thomas Melzer, vertritt seit 1. April 2008 selbständig
Im Geschäftsjahr 2008 waren folgende Personen als Aufsichtsrat tätig:
Dr. Christoph Senft, Angerberg, Vorsitzender Mag. Friedrich Roithner, Linz (seit 28. Mai 2008), Vorsitzender-Stellvertreter Josef Blazicek, Perchtoldsdorf (seit 28. Mai 2008) Mag. Wolfgang M. Hickel, Wien Dr. Michael Hofer, Vöcklabruck (seit 28. Mai 2008) Prof. Ing. Peter Kotauczek, Breitenbrunn am Neusiedler See Dipl. Ing. Stefan Pierer, Wels (seit 28. Mai 2008)
Mag. Christian Schamburek, Brunn am Gebirge (bis 27. Mai 2008) Christian Wolff, Schweiz (bis 27. Mai 2008)
Wien, den 11. März 2009
Der Vorstand:
gez.:
gez.:
Günter Pridt
Thomas Melzer
Die wirtschaftlichen Rahmenbedingungen 2008 waren in den Märkten, in denen BRAIN FORCE tätig ist, weitgehend zufriedenstellend. Erste Anzeichen der Wirtschaftskrise waren in der zweiten Jahreshälfte zu spüren.
Die Europäische Kommission rechnet aufgrund der Wirtschafts- und Finanzkrise für 2009 mit einer deutlichen Konjunkturabschwächung. Das Wachstum des Bruttoinlandsproduktes (BIP) in der Europäischen Union soll im laufenden Jahr um 1,8% zurückgehen – eine Entwicklung die sich auch in den wichtigsten BRAIN FORCE Landesgesellschaften widerspiegeln wird. So wird aktuell mit einem Rückgang des BIP in Österreich um 1,2%, in Deutschland um 2,3% sowie in Italien und den Niederlanden um jeweils 2% gerechnet. Noch erwartet die Kommission europaweit eine leichte Erholung gegen Jahresende, so dass 2010 bereits wieder ein Anstieg von 0,5% im BIP vorhergesagt ist. Die Maßnahmen zur Stabilisierung der Finanzmärkte, die Lockerung der Geldpolitik und die zahlreichen Konjunkturprogramme sollen dafür sorgen, die wirtschaftliche Situation in der Europäischen Union zu unterstützen und die schrittweise Erholung in der zweiten Jahreshälfte einzuläuten – eine Einschätzung, die das BRAIN FORCE Management nicht teilt und sich daher auf eine bis ins Jahr 2010 sehr schwache Konjunkturentwicklung einstellt.
In Deutschland musste der Hightech-Verband BITKOM seine Umsatzerwartungen für 2009 nach unten korrigieren. Nach einem erwarteten Anstieg von 1,2% in 2008 wird der Markt für Informationstechnik, Telekommunikation und digitale Unerhaltungselektronik nach den jüngsten Einschätzungen im laufenden Jahr mit einem Volumen von 144,6 Mrd. €auf Vorjahresniveau bleiben. Im Bereich der Informationstechnik sieht die BITKOM-Prognose für 2009 jedoch einen Zuwachs von 1,5% auf 67 Mrd. €vor. Getragen wird das Wachstum im IT-Sektor von den Anbietern von Software und IT-Services, denen im Jahr 2009 ein Zuwachs um 3,1% auf 48,5 Mrd. €zugetraut wird.
In Italien rechnet die IT-Branche für 2009 mit einem Umsatzrückgang. Besser sieht es jedoch im Software-Umfeld aus, wo das Niveau des Vorjahres gehalten werden soll. In Österreich wird gemäß Marktanalysten ein Wachstum von 4,2% erwartet, in den Niederlanden eines von 1,1%, wobei im Bereich Software sogar mit einem Plus von 5% und im Bereich Services mit einem Zuwachs von 4% gerechnet wird.
Vor diesem Hintergrund ist der Geschäftsverlauf der BRAIN FORCE HOLDING AG zu sehen, die als Mutterunternehmen zahlreicher verbundener Unternehmen im Euroraum agiert. Diese Einschätzungen von Experten für die IT-Branche in den Ländern Deutschland, Österreich, Italien und den Niederlanden sind nach Ansicht des BRAIN FORCE Managements zu optimistisch und wir gehen aktuell in allen unseren Märkten von leichten Rückgängen der IT-Ausgaben in 2009 aus. Frühestens im Laufe des Jahres 2010 erwartet BRAIN FORCE wieder ein Anziehen der Umsätze im IT-Umfeld, bis dahin werden sich die Investitionen der Kunden auf Lösungen zur Optimierung ihrer IT-Infrastruktur fokussieren – Services, die BRAIN FORCE in allen Ländern anbietet.
Unternehmensgegenstand der BRAIN FORCE HOLDING AG ist unter anderem der Erwerb, das Halten, die Verwaltung und die Verwertung von Beteiligungen, die geschäftsführende Verwaltung dieser Unternehmen und die Erbringung von entgeltlichen Dienstleistungen sowie die Verwaltung und Verwertung von Patenten, Lizenzen und Urheberrechten. Die entgeltlich erbrachten Dienstleistungen gegenüber den Beteiligungsunternehmen und die ab dem Geschäftsjahr 2008 verrechneten Markenlizenzentgelte werden in den Umsatzerlösen ausgewiesen.
Die nachfolgende Aufstellung zeigt die Aufgliederung der wesentlichen Posten der Gewinn- und Verlustrechnung:
| 2008 | 2007 | |
|---|---|---|
| TEUR | TEUR | |
| Umsatzerlöse | 3.173 | 921 |
| Sonstige betriebliche Erträge | 515 | 445 |
| Personalaufwand | -1.414 | -1.538 |
| Sonstige betriebliche Aufwendungen | -2.797 | -3.882 |
| Beteiligungsergebnis | 2.000 | -6.819 |
| Sonstiges Finanzergebnis | -985 | -373 |
| Auflösung von Kapitalrücklagen | 0 | 9.163 |
Die Umsatzerlöse beinhalten Dienstleistungserträge und Markenlizenzentgelte gegenüber Beteiligungsunternehmen. Der Anstieg gegenüber dem Vorjahr resultiert aus den ab 2008 verrechneten Markenlizenzentgelten.
Die sonstigen betrieblichen Erträge beinhalten im Wesentlichen die Weiterverrechnung von Sachkosten an Konzerngesellschaften.
Der Personalaufwand des Geschäftsjahres 2008 reduzierte sich um 8% auf TEUR 1.414, was auf die Reduktion der durchschnittlichen Mitarbeiteranzahl von 11 auf 9 zurückzuführen ist.
Die sonstigen betrieblichen Aufwendungen verringerten sich um TEUR 1.085 auf TEUR 2.797. Dabei reduzierten sich insbesondere die Werbeaufwendungen durch das Einstellen der Sponsoringaktivitäten. Zusätzlich reduzierten sich im Wesentlichen die Reisekosten, die Kosten für Personalsuche sowie die Rechts- und Beratungskosten. Einen Anstieg zeigen die Mietaufwendungen.
Das Beteiligungsergebnis des Geschäftsjahres 2008 beinhaltet eine Gewinnausschüttung der BRAIN FORCE Software GmbH, Deutschland.
Das sonstige Finanzergebnis beinhaltet den Zinsensaldo in Höhe von TEUR -376 (Vorjahr: TEUR -233) sowie die Abschreibung der Wandelanleihe der KEMP Technologies Inc. (US\$ 900.000). Das Finanzergebnis der BRAIN FORCE HOLDING AG beträgt TEUR +1.015 (Vorjahr: TEUR -7.192).
Im Geschäftsjahr 2008 konnte ein Jahresüberschuss in Höhe von TEUR 531 (Vorjahr: Jahresfehlbetrag TEUR -11.486) erwirtschaftet werden.
Durch die Anzahl der im In- und Ausland gehaltenen Beteiligungen stellt die Einbeziehung der wirtschaftlichen Lage dieser Unternehmen einen wesentlichen Leistungsindikator der BRAIN FORCE HOLDING AG dar. Nachfolgende Aufstellung zeigt aussagekräftige Kennzahlen auf Ebene der Muttergesellschaft:
| 2008 | 2007 | Änderung | |
|---|---|---|---|
| TEUR | TEUR | in % | |
| Konzernumsatz | 106.208 | 98.333 | +8 |
| Konzern-EBITDA | 7.793 | 346 | >100 |
| Konzern-EBIT | 3.832 | -16.683 | >100 |
| Konzernergebnis vor Steuern | 2.384 | -17.910 | >100 |
| Konzernergebnis nach Steuern | -2.101 | -19.915 | +89 |
Der Konzern konnte im Jahr 2008 die operativen Kennzahlen und die Bilanzstruktur deutlich verbessern. Zusätzlich konnte ein sehr starker operativer Cash-flow erwirtschaftet werden , wodurch die Nettoverschuldung um 25% von 6,53 Mio. €auf 4,89 Mio. €reduziert werden konnte.
Trotz der guten operativen Performance aller Konzerngesellschaften musste in 2008 ein negatives Nettoergebnis von -2,10 Mio. € ausgewiesen werden. Dies ist auf zwei nicht wiederkehrende Effekte zurückzuführen: die Abschreibung (-0,61 Mio. €) der vom früheren Vorstand gezeichneten Wandelanleihe, ausgegeben von der KEMP Technologies Inc., New York, USA, und die Abschreibung von latenten Steueransprüchen (-2,90 Mio. €) durch eine Änderung des deutschen Körperschaftsteuerrechts.
Die Bilanzsumme der BRAIN FORCE HOLDING AG reduzierte sich im Vorjahresvergleich um 4% auf TEUR 48.863 (Vorjahr: TEUR 50.757).
Die nachfolgende Aufstellung zeigt die wesentlichen Bilanzposten:
| 31.12.2008 TEUR |
31.12.2007 TEUR |
Veränderung in % |
|
|---|---|---|---|
| AKTIVA | |||
| Immaterielle Vermögensgegenstände | |||
| und Sachanlagen | 186 | 251 | -26 |
| Finanzanlagen | 43.427 | 45.382 | -4 |
| Forderungen gegenüber | |||
| verbundenen Unternehmen | 4.853 | 3.100 | +57 |
| Kassenbestand, Guthaben bei | |||
| Kreditinstituten | 58 | 1.734 | -97 |
| PASSIVA | |||
| Eigenkapital | 35.486 | 34.955 | +2 |
| Rückstellungen | 953 | 4.428 | -78 |
| Verbindlichkeiten gegenüber | |||
| Kreditinstituten | 11.059 | 10.511 | +5 |
| Verbindlichkeiten aus Lieferungen | |||
| und Leistungen | 238 | 112 | >100 |
| Verbindlichkeiten gegenüber | |||
| verbundenen Unternehmen | 657 | 469 | +40 |
Der Rückgang der Finanzanlagen um TEUR 1.955 resultiert überwiegend aus der erfolgsneutralen Anpassung der Anschaffungskosten der Beteiligungen an der BRAIN FORCE B.V., Niederlande, und an der SolveDirect.com Internet-Service GmbH (im Geschäftsjahr 2007 verschmolzen mit der BRAIN FORCE SOFTWARE GmbH, Wien). Die Anpassungen wurden aufgrund geänderter Verpflichtungen zur Leistung der variablen Kaufpreisanteile vorgenommen. Zusätzlich reduzierten sich die Finanzanlagen durch die Abschreibung der Wandelanleihe der KEMP Technologies Inc.
Die Forderungen gegenüber verbundenen Unternehmen erhöhten sich vorrangig durch konzerninterne Finanzierungsaktivitäten.
Der Rückgang der liquiden Mittel zeigt die Verwendung für den konzerninternen Liquiditätsausgleich.
Das Eigenkapital erhöhte sich um 2% auf TEUR 35.486, was einer Eigenkapitalquote von 73% (Vorjahr: 69%) entspricht.
Die Rückstellungen reduzierten sich um TEUR 3.475 auf TEUR 953. Im Wesentlichen ist der Rückgang auf die Bezahlung von Kaufpreisverpflichtungen aus Anteilserwerben in Höhe von TEUR 2.342 zurückzuführen. Aufgrund der Anpassungen der erwarteten Kaufpreisverpflichtungen erfolgten ergebnisneutrale Auflösungen in Höhe von TEUR 1.219.
Die Finanzlage ist durch folgende Netto-Geldflüsse gekennzeichnet:
| 2008 | 2007 | |
|---|---|---|
| TEUR | TEUR | |
| Netto-Geldfluss aus laufender Geschäftstätigkeit | 1.322 | 30 |
| Netto-Geldfluss aus Investitionstätigkeit | -3.546 | -9.754 |
| Netto-Geldfluss aus Finanzierungstätigkeit | 548 | 8.682 |
| Veränderung Kassenbestand und liquide Mittel | -1.676 | -1.042 |
| Finanzmittelbestand zum 31.12. | 58 | 1.734 |
Vorrangig durch die Verrechnung der Markenlizenzentgelte verbesserte sich das Jahresergebnis und damit verbunden der Zufluss aus laufender Geschäftstätigkeit. Von wesentlicher Relevanz ist der Geldfluss aus Investitionstätigkeit. Dieser zeigt im Geschäftsjahr 2008 Auszahlungen für Finanzanlagen und sonstige Finanzinvestitionen in Höhe von TEUR 4.255 (Vorjahr: TEUR 10.711). Demgegenüber stehen Einzahlungen aus Finanzanlagenabgang und sonstigen Finanzinvestitionen in Höhe von TEUR 804 (Vorjahr: TEUR 999). Die Investitionen für immaterielle Vermögensgegenstände und Sachanlagen betragen TEUR 95 (Vorjahr: TEUR 42).
Der Geldfluss aus Finanzierungstätigkeit zeigt die Erhöhung der Finanzverbindlichkeiten um TEUR 548 (Vorjahr: TEUR 8.682).
Als kapitalmarktorientiertes Unternehmen werden in weiterer Folge relevante Börsekennzahlen dargestellt:
| 2008 | 2007 | ||
|---|---|---|---|
| Höchstkurs | in € | 2,58 | 3,46 |
| Tiefstkurs | in € | 1,01 | 1,76 |
| Ultimokurs | in € | 1,89 | 1,92 |
| Ultimo Börsekapitalisierung | in Mio. € | 29,08 | 29,54 |
| Durchschnittlicher Börseumsatz/Tag | in Tsd. € | 36,67 | 98,05 |
Wertpapierkennnummer (ISIN): AT0000820659 Börsenkürzel: BFC
Die BRAIN FORCE HOLDING AG hat im abgelaufenen Geschäftsjahr keine Forschung und Entwicklung getätigt.
Die Gesellschaft verfügt über keine Zweigniederlassungen.
Der Vorstand der BRAIN FORCE HOLDING AG wurde am 3. März 2009 von der Wiener Börse AG informiert, dass die Aktien des Unternehmens per 23. März 2009 aus dem Prime Market Segment der Wiener Börse ausscheiden. Die Wiener Börse begründete diese Entscheidung ausschließlich damit, dass BRAIN FORCE das Kriterium der Mindestkapitalisierung des Streubesitzes nicht mehr erfüllt. Ab 23. März 2009 werden die Stammaktien der BRAIN FORCE HOLDING AG daher im Standard Market Continuous der Wiener Börse gehandelt.
Nach dem überaus erfolgreichen Geschäftsjahr 2008 stellt sich BRAIN FORCE in 2009 auf ein wirtschaftlich schwieriges Marktumfeld ein. Trotz laufender Senkung der von Experten getroffenen Einschätzungen scheinen diese aus heutiger Sicht ein zu positives Bild zu zeichnen. BRAIN FORCE bereitet sich daher durch weitere Restrukturierungsmaßnahmen auf Umsatzrückgänge in allen Landesgesellschaften vor und wird konsequent die Kosten optimieren.
Eine seriöse Aussage zu Umsatz- und Ergebnisentwicklung halten wir aktuell für unmöglich. Das Unternehmen ist jedoch gut aufgestellt und hat derzeit keinen Finanzierungsengpass. Der klare Fokus des BRAIN FORCE Managements für 2009 lautet "Optimierung des operativen Cash-flows". Erklärtes Ziel ist es, auch 2009 ein positives operatives Ergebnis zu erzielen und das Unternehmen langfristig auf Wachstum auszurichten.
Erster Privater Investmentclub Börsebius Zentral (GbR): 11,40%
b) Erwerb eigener Aktien: Derzeit besteht keine Genehmigung zum Rückkauf eigener Aktien.
Als Muttergesellschaft von im In- und Ausland ansässigen und europaweit tätigen Unternehmen sieht sich die Unternehmensführung mit übergreifenden internationalen Risiken im Zusammenhang mit Finanzierung und Wertentwicklung des Konzerns, einheitlicher Markenführung und Produktentwicklung konfrontiert. Um der gewachsenen Konzerngröße und dem geänderten wirtschaftlichen Umfeld Rechnung zu tragen, hat BRAIN FORCE im Jahr 2008 das Risikomanagement verstärkt und einen zentral gesteuerten konzernweiten Prozess initiiert. Ziel ist es, die Risiken regelmäßig und systematisch zu identifizieren, hinsichtlich ihrer Eintrittswahrscheinlichkeit und dem möglichen Schadensausmaß zu bewerten sowie geeignete Maßnahmen zur Risikosteuerung zu treffen.
Gemäß der dezentralen Struktur liegt die Verantwortung für das Management der operativen Risiken bei den jeweils zuständigen lokalen Geschäftsleitern. Auf Ebene der BRAIN FORCE HOLDING AG wird die Einhaltung der Prozesse überwacht und ein gruppenweiter Risikobericht erstellt. Die Ergebnisse werden an den Gesamtvorstand und von diesem weiter an den Aufsichtsrat berichtet.
Die wichtigsten Instrumente zur Risikoüberwachung und -kontrolle sind der Planungsund Controllingprozess, konzernweite Richtlinien sowie die laufende Berichterstattung und das 14-tägig rolierende Forecasting.
Zur Risikovermeidung und -bewältigung werden in den lokalen Gesellschaften Risiken bewusst nur im operativen Geschäft eingegangen und dabei immer im Verhältnis zum möglichen Gewinn analysiert.
Das Liquiditätsrisiko wird durch laufende Finanzplanungen auf Ebene der lokalen Geschäftsführungen und zusätzlich von der Konzernholding überwacht. In 2008 wurden die Voraussetzungen für einen Cash Pool geschaffen, in den die wichtigsten Gesellschaften einbezogen werden sollen. Die Finanzierung der BRAIN FORCE Gruppe ist aufgrund der sehr positiven Entwicklung des operativen Cash-flows und ausreichender Banklinien gesichert.
Das Währungsrisiko spielt eine untergeordnete Rolle. Das Zinsänderungsrisiko stellt das Risiko dar, das sich aus der Änderung von Wertschwankungen von Finanzinstrumenten infolge einer Änderung der Marktzinssätze ergibt. Das Schuldscheindarlehen in Höhe von 10 Mio. €ist fix verzinst.
Im Zusammenhang mit der im September 2007 erfolgten Abberufung des ehemaligen Vorstandsvorsitzenden, Helmut Fleischmann, und den beiderseits bei Gericht eingereichten Klagen besteht kein Risiko mehr, da im November 2008 ein außergerichtlicher Vergleich geschlossen wurde.
Aufgrund der Geschäftstätigkeit der BRAIN FORCE HOLDING AG spielen Umweltbelange eine untergeordnete Rolle.
Für die strategische Absicherung und Entwicklung des wirtschaftlichen Erfolges zeichnet maßgeblich der derzeitige Vorstand der BRAIN FORCE HOLDING AG verantwortlich. Eine entscheidende Rolle in der Geschäftstätigkeit nehmen auch einzelne Mitarbeiter in Schlüsselpositionen ein. Daher ist es ein erklärtes Ziel, dieses Humankapital zu halten und zu motivieren.
Wien, am 11. März 2009
Der Vorstand:
gez.:
gez.:
Günter Pridt
Thomas Melzer
Wir haben den Jahresabschluss der BRAIN FORCE HOLDING AG, Wien, für das Geschäftsjahr vom 1. Jänner bis 31. Dezember 2008 unter Einbeziehung der Buchführung geprüft. Die Buchführung, die Aufstellung und der Inhalt dieses Jahresabschlusses sowie des Lageberichtes in Übereinstimmung mit den österreichischen unternehmensrechtlichen Vorschriften liegen in der Verantwortung der gesetzlichen Vertreter der Gesellschaft. Unsere Verantwortung besteht in der Abgabe eines Prüfungsurteils zu diesem Jahresabschluss auf der Grundlage unserer Prüfung und einer Aussage, ob der Lagebericht in Einklang mit dem Jahresabschluss steht.
Wir haben unsere Prüfung unter Beachtung der in Österreich geltenden gesetzlichen Vorschriften und Grundsätze ordnungsgemäßer Abschlussprüfung durchgeführt. Diese Grundsätze erfordern, die Prüfung so zu planen und durchzuführen, dass ein hinreichend sicheres Urteil darüber abgegeben werden kann, ob der Jahresabschluss frei von wesentlichen Fehldarstellungen ist, und eine Aussage getroffen werden kann, ob der Lagebericht mit dem Jahresabschluss in Einklang steht. Bei der Festlegung der Prüfungshandlungen werden die Kenntnisse über die Geschäftstätigkeit und über das wirtschaftliche und rechtliche Umfeld des Unternehmens sowie die Erwartungen über mögliche Fehler berücksichtigt. Im Rahmen der Prüfung werden die Nachweise für Beträge und sonstige Angaben in der Buchführung und im Jahresabschluss überwiegend auf Basis von Stichproben beurteilt. Die Prüfung umfasst ferner die Beurteilung der angewandten Rechnungslegungsgrundsätze und der von den gesetzlichen Vertretern vorgenommenen wesentlichen Schätzungen sowie eine Würdigung der Gesamtaussage des Jahresabschlusses. Wir sind der Auffassung, dass unsere Prüfung eine hinreichend sichere Grundlage für unser Prüfungsurteil darstellt.
Unsere Prüfung hat zu keinen Einwendungen geführt. Gemäß den bei der Prüfung gewonnenen Erkenntnissen entspricht der Jahresabschluss nach unserer Beurteilung den gesetzlichen Vorschriften und vermittelt ein möglichst getreues Bild der Vermögens- und Finanzlage des Unternehmens zum 31. Dezember 2008 sowie der Ertragslage des Unternehmens für das Geschäftsjahr vom 1. Jänner bis 31. Dezember 2008 in Übereinstimmung mit den österreichischen Grundsätzen ordnungsmäßiger Buchführung. Der Lagebericht steht in Einklang mit dem Jahresabschluss.
Wien, den 11. März 2009
PwC INTER-TREUHAND GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
gez.:
Mag. Dr. Aslan Milla Wirtschaftsprüfer
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