Docstoc

gb_gfkl_2002-q3e

Document Sample
gb_gfkl_2002-q3e Powered By Docstoc
					The Mid Ticket Company




Interim Report
   as at September 30, 2002
Contents




           Corporate Structure.................................................................................................................... 4


           Financial Data of the GFKL Group........................................................................................... 5


           Letter to the Shareholders....................................................................................................... 6


           Interim Report as at September 30, 2002 (in accordance with IAS).............................. 8


           Development of the Group’s assets.......................................................................................16


           Annex to the consolidated accounts of September 30, 2002........................................ 18
                      l.    General explanatory notes.................................................................................................18
                      ll. Accounting and assessment principles............................................................................ 21
                      lll. Explanatory notes on the leasing business........................................................... ..............23
                      lV. Individual notes on the consolidated balance sheet.........................................................24
                      V. Details relating to the consolidated income statement.................................................... 38
                      Vl. Explanation of individual items in the consolidated statements of cash flows.......................44
                      Vll. Segment reporting......................................................................................................45
                      Vlll. Information about events since the accounting date........................................................45
                      lX. Relations with affiliated companies and persons................................................................46
                      X. Information concerning the company’s organs................................................................ 48


           Directors Holdings..................................................................................................................... 49


           Members of the Executive Board.......................................................................................... 50


           Members of the Supervisory Board.......................................................................................51




                                                                                                          GFKL/Interim Report as at 30.9.2002         3
 Corporate Structure




                                    GFKL
                                    Financial Services AG
                                    Essen




                                    GFKL Mobilien GmbH       Business activities                            Clients
                                    Essen                    Leasing and hire-purchase products for mo-     Small and medium-sized
Leasing Division




                                                             bile assets in the mid-ticket segment.Valued   businesses, especially dealer-
                                                             at between 25.000 EUR and 500.000 EUR          ships and manufacturers




                                    Universal-Leasing-       Business activities                            Clients
                                    GmbH                     Leasing and hire-purchase products for mo-     Small and medium-
                                    Augsburg                 bile assets in the mid-ticket segment.Valued   sized businesses via
                                                             at between 25.000 EUR and 500.000 EUR          direct marketing




                                    Proceed Portfolio        Business activities                            Clients
                                    Services GmbH            Acquisition and management of large            Banks, savings banks and
                                    Essen                    loan/credit portfolios in the mid-ticket       leasing companies
Financial Outsourcing Division




                                                             segment




                                    Proceed Asset            Business activities                            Clients
                                    Trading GmbH             Trading in mobile assets, especially arising   Banks, savings banks and
                                    Essen                    from performing and non-performing             leasing companies
                                                             financing mid-ticket contracts




                                    Proceed Securitization   Business activities                            Clients
                                    Services GmbH            Refinancing of small and medium-sized          Small and medium-sized
                                    Essen                    leasing companies through pooling and          leasing companies
                                                             securitization of mid-ticket receivables




4                     Interim Report as at 30.9.2002/GFKL
Financial data of the GFKL Group
                                                          1.1.– 30.9.2002 (kEUR)   1.1.– 30.9.2001 (kEUR)            Change


Cash earnings according to DVFA/SG                               12.910                    6.335                      104%
Earnings per share of stock (IAS 33)                                0,55                     0,36                       53%


Revenues                                                        240.041                  129.939                        85%
   thereof Leasing business                                       230.887                  123.344                        87%
   thereof Financial Outsourcing business                          15.338                    8.220                        87%
   thereof Holding                                                  7.570                    5.255                        44%
   thereof consolidation                                          -13.754                   -6.880                       100%

Interest income                                                  35.121                   14.102                      149%
Other operating income                                             4.871                   1.265                      285%


Total operating income                                          280.033                  145.306                        93 %


Lease expenses                                                  233.874                  123.779                        89%
Cost of purchased goods                                             843                      325                      159%
Personnel expenses                                               15.310                    7.468                      105%
Other operating expenses                                         16.056                    7.218                      122%
Other taxes                                                         177                        42                     321%


Operating cashflow                                               13.773                    6.474                      113 %
Depreciation and amortization                                      1.192                     636                        87%


Total operating expenses                                        267.452                  139.468                        92 %


Earnings before taxes                                            12.581                    5.838                      116 %
Taxes on income                                                    5.659                   2.474                      129%


Earnings after taxes                                              6.922                    3.364                      106 %
Profit- (+)/loss (-) carried forward from previous year            8.537                   4.261                      100%


Accumulated profit carried forward                               15.459                    7.625                      103 %


Earnings before taxes of the business units
   Leasing business                                                6.367                   3.975                        60%
   Financial Outsourcing business                                  7.776                   2.600                      199%
   GFKL Financial Services AG (Holding)                             -748                     313                          n/a
   Consolidation                                                    -814                   -1.050                         n/a


New Origination of the Leasing Division                         196.886                  112.012                        76%
Number of new contracts                                            4.023                   1.919                      110%
Average Contract Size                                                 49                       58                      -16%
Number of employees at the end of the period                        362                      239                        51%
Earnings before taxes per employee                                  40,6                     27,7                       47%


Total Assets                                                    234.819                  130.688                        80%
Shareholders’ equity                                             74.061                   21.627                      242%
Equity ratio                                                     31,54%                  16,55%                         91%
Time weighted after tax Return on equity*                        18,68%                  24,87%                        -25%
* Extrapolated to annualized value




                                                                                               GFKL/Interim Report as at 30.9.2002   5
Letter to the Shareholders




                                          Dear Sir or Madam,

                                          The economic situation in Germany deteriorated further in the third quarter of 2002. The economy
                                          is burdened by the increasing number of company insolvencies, declining investment activity and the
                                          high demand for value adjustments placed on the banks. Despite these difficult circumstances, the
                                          GFKL Group was able to use the third quarter to build on the successful developments of the first
                                          half-year, and again achieved a remarkable result.
                                               In comparison to September 30, 2001, the profit before taxes increased by an impressive 116%
                                          to 12.6 million EUR.
                                               Thanks to the successful acquisition of Universal-Leasing-GmbH, the result in the leasing area
                                          increased by 60% in the first three quarters. This gratifying result would have been even higher if it
                                          had not been necessary to put by an above-average allowance for doubtful accounts. In all, reserves
                                          amounting to 6.6 million EUR (other operating expenses) were formed at group level. These were
                                          offset against income from the release of reserves amounting to 1.9 million EUR (other operating
                                          income), which meant that after balancing, the remaining allowance deducted from the result
                                          amounted to 4.7 million EUR. It is expected that a further 2.5 million EUR in reserves will be neces-
                                          sary in the fourth quarter, in order to make adequate provision for foreseeable risks.
                                               While the increasing need for allowances underlined the negative effects of the recession on the
                                          leasing sector, the financial outsourcing area profited from the fact that the banks are currently
                                          exhibiting considerable willingness to hand assets and processes over to GFKL. This meant that the
                                          financial outsourcing area was able to triple its profit, thus making a major contribution to the positive
                                          development of the consolidated result.
                                               In the past 9 months, shareholders’ equity increased from 24.7 million EUR to 74.1 million EUR,
                                          constituting a rise in the shareholders’ equity rate from 17% to 32%. Because of this increase, the
                                          weighted return on equity after taxes decreased from 25% to 19%; however, this still makes GFKL
                                          a top performer among the European financial services companies.

                                          Highlights in the third quarter of 2002

                                          In the financial outsourcing sector, Proceed Securitization Services GmbH became active on the
                                          market for the first time. In July 2002, it started by purchasing a leasing and hire-purchase portfolio
                                          from DaimlerChrysler Services Structured Finances GmbH (previously DaimlerChrysler Capital
                                          Services (debis) Deutschland GmbH). At that time, the portfolio had a volume of almost 85 million
                                          EUR. The portfolio acquisition was largely refinanced via the ABN AMRO Bank N.V.’s TULIP program.
                                              Moreover, in September 2002, Proceed Securitization Services GmbH purchased a portfolio from
                                          the Royal Bank of Scotland GmbH, consisting of approximately 200 legally enforceable loan agree-
                                          ments. These agreements had a volume of 3.1 million EUR. The administration of both portfolios was
                                          taken over by Proceed Portfolio Services GmbH.
                                              In September, Proceed Asset Trading GmbH’s sales site was moved from Erfurt to Essen.The sales
                                          team, back-office staff and managing director took possession of new offices on site. The seller’s
                                          close proximity to the objects is expected to be a stimulus to both the sales income and the
                                          turnaround time.




6   Interim Report as at 30.9.2002/GFKL
Acquisition of SchmidtBank Leasing GmbH

After the successful integration of Universal-Leasing-GmbH into the GFKL Group, the executive board
has decided to make further acquisitions to promote its sound growth. On October 1, SchmidtBank
Leasing GmbH, Nuremberg, was successfully taken over from SchmidtBank GmbH & Co. KgaA in Hof.
     SchmidtBank Leasing GmbH has been active on the leasing market since 1987. Its regional
activity focuses on southern and eastern Germany. In the last business year, which came to an end
on September 30, 2002, the company with its 54 staff generated just under 70 million EUR of new
business. The leasing portfolio is divided into production equipment (31%), trucks and cars (30%),
and sales equipment (8%), which means that it is properly diversified and constitutes a very good
addition to the GFKL Group’s current portfolio.
     SchmidtBank Leasing GmbH will deal with all outstanding agreements itself; however, in future it will
cease to be active on the market. Furthermore, the integration strategy envisages the incorporation of
SchmidtBank Leasing GmbH’s sales units into those belonging to GFKL Mobilien GmbH and Universal-
Leasing-GmbH. In addition, a cooperation agreement with the SchmidtBank KgaA will regulate all future
collaboration with the GFKL Group. A marked increase in new business is expected in 2003 as a result
of the expansion of the GFKL Group's sales network and the cooperation with the SchmidtBank KgaA.

Developments in the fourth quarter of 2002

The refinancing basis is being continually expanded and diversified in order to allow for the increased
volume of new business. At the beginning of October, the ABCP line made available via the WestLB’s
Compass program was increased by 50 million EUR to 300 million EUR. Considerable progress has
been made in negotiations with a renowned major international bank concerning the provision of a
third ABCP line with a volume of 250 million EUR; the negotiations are expected to reach a conclu-
sion in the fourth quarter.
     At the beginning of October, Proceed Securitization Services GmbH acquired another portfolio
of legally enforceable loan agreements. The 250 agreements have a volume of 28.0 million EUR. The
servicing of this portfolio will likewise be taken over by Proceed Portfolio Services GmbH.

Outline

In the business year 2003, the volume of new business is expected to increase to 450 million EUR
as a result of the reinforcements to the sales team in the leasing sector resulting from the acquisi-
tion of SchmidtBank Leasing GmbH. Considerable potential still exists in the financial outsourcing
sector; at present, Proceed Portfolio Services GmbH is negotiating several large service mandates in
the mortgaged and commercial loan sector.
     In view of the general situation sketched here, the executive board is convinced that the 80%
increase in earnings forecast at the beginning of the year will be exceeded by a clear margin.

                      Yours faithfully,




                      Dr. Peter Jänsch
                      GFKL Financial Services AG



                                                                        GFKL/Interim Report as at 30.9.2002   7
Interim Report
as at September 30, 2002 (in accordance with IAS)




8   Interim Report as at 30.9.2002/GFKL
Interim consolidated balance sheet as of September 30, 2002 (in accordance with IAS)


ASSETS                                                             30.9.2002 (EUR)   30.9.2001 (EUR)         31.12.2001 (EUR)

Current assets

Cash and cash equivalents                                            41.349.233,27      6.338.995,86              6.177.371,73


Short-term receivables
Interest-bearing leasing and hire-purchase receivables               46.756.766,51     30.291.904,14            40.021.005,83
Receivables due from shareholders                                             0,00              0,00                         0,00
Trade accounts receivable                                            28.006.642,38     14.694.743,89            16.877.848,02
Receivables due from affiliated companies                               149.549,44        51.730,38                 231.331,31
Other interest-bearing receivables                                            0,00        21.474,26                          0,00
                                                                     74.912.958,33     45.059.852,67            57.130.185,16


Inventories
Finished goods and merchandise                                        1.946.489,63      2.819.726,34              2.805.413,37


Other assets
Other short-term operating receivables                               11.414.588,68      4.079.817,91              3.800.208,02
Tax refund claims                                                        34.805,36       117.554,63                 491.718,80
                                                                     11.449.394,04      4.197.372,54              4.291.926,82




Fixed assets

Tangible assets
Other equipment, furniture and fixtures                               1.450.532,47       992.600,46               1.045.911,31
Leasing assets                                                                0,00              0,00                         0,00
                                                                      1.450.532,47       992.600,46               1.045.911,31


Intangible assets
Software                                                              2.651.322,35      1.957.475,84              2.189.621,08


Financial assets
Financial investments - held to maturity                                 67.886,79        63.800,36                  67.886,79
Other loans                                                                   0,00           511,29                          0,00
                                                                         67.886,79        64.311,65                  67.886,79


Goodwill                                                              3.534.907,41        69.877,37                 68.173,10
Negative difference                                                  -4.439.330,62             0,00                         0,00


Long-term receivables
Long-term interest-bearing leasing and hire purchase receivables     85.170.182,78     64.790.385,56            66.391.217,14
Other long-term receivables                                          16.725.367,81      4.396.912,86              5.442.655,06
                                                                    101.895.550,59     69.187.298,42            71.833.872,20


Total assets                                                       234.818.944,26    130.687.511.15          145.610.361,56



                                                                                                 GFKL/Interim Report as at 30.9.2002   9
Interim consolidated balance sheet as of September 30, 2002 (in accordance with IAS)


Liabilities and shareholders’ equity                                      30.9.2002 (EUR)   30.9.2001 (EUR)   31.12.2001 (EUR)

Current liabilities

Liabilities due to banks                                                    35.161.791,01     25.891.600,96     23.219.740,58
Leasing liabilities from refinancing                                        16.150.494,90     18.782.667,69     19.272.687,48
Trade accounts payable                                                      10.731.842,09     12.440.917,46     22.008.207,45
Liabilities due to affiliated companies                                         49.785,85       135.053,90        109.031,20
                                                                            62.093.913,85     57.250.240,01     64.609.666,71


Accruals
Tax accruals                                                                         0,00       201.602,39               0,00
Other accruals                                                                 194.900,00        24.217,34       4.535.650,20
                                                                               194.900,00       225.819,73       4.535.650,20


Other liabilities
Current liabilities from income tax                                            343.400,00              0,00              0,00
Other short-term liabilities from operations                                33.599.449,38      9.047.066,59     11.414.214,30
                                                                            33.942.849,38      9.047.066,59     11.414.214,30



Long-term liabilities

Special reserve for investment grants                                            1.020,61        60.165,48           7.182,65


Deferred taxes on income                                                     8.449.884,07      3.664.787,86      4.071.610,28


Liabilities
Liabilities due to banks                                                     7.558.252,89      1.745.141,45      1.674.838,82
Leasing liabilities from refinancing                                        38.753.359,51     32.319.053,49     33.544.985,95
Other long-term interest-bearing liabilities                                 9.763.329,14      4.748.222,75      1.016.912,00
                                                                            56.074.941,54     38.812.417,69     36.236.736,77



Shareholders' equity

Capital stock                                                               14.188.631,00    10.005.195,00     10.005.195,00
Capital contributions made under the equity capital increase resolution              0,00             0,00      3.291.184,00
Capital reserves                                                            44.350.009,75     3.932.306,87      2.837.908,25
Retained earnings                                                               63.587,70        63.587,70         63.587,70
Balance sheet profit                                                        15.459.206,36     7.625.924,22      8.537.425,70
                                                                            74.061.434,81    21.627.013,79     24.735.300,65

Total liabilities and shareholders’ equity                                234.818.944,26    130.687.511,15    145.610.361,56




10   Interim Report as at 30.9.2002/GFKL
Interim consolidated income statement for the period from January 1 to September 30, 2002
(in accordance with IAS)

                                                                                           1.1. – 30.9.2002   3rd. quarter 2002 1.1. – 30.9.2001 3rd. quarter 2001
                                                                                                 (EUR)              (EUR)             (EUR)            (EUR)

Sales/Total                                                                                240.041.220,51        86.136.342,40   129.938.899,07            44.046.406,26


Other operating income                                                                        2.755.298,67        1.027.031,56     1.264.702,43                736.251,52
Income from settlement of the negative difference                                             2.116.191,97        2.116.191,97              0,00                       0,00
Cost of materials:
     Cost of merchandise                                                                       -843.578,66         -310.253,84      -325.283,89               -175.833,28
     Leasing expenses                                                                      -233.873.579,37      -83.795.112,19   -123.778.684,51          -41.760.692,67
Personnel expenses:
    Wages and salaries                                                                      -13.411.725,90       -6.047.209,76     -6.457.686,30           -2.517.144,29
     Social security contributions and expenses
     for retirement benefits                                                                 -1.898.363,31         -679.177,48     -1.010.848,55              -378.739,92
Other operating expenses                                                                    -16.056.502,22       -5.915.148,27     -7.217.688,51           -4.198.884,16
Other taxes                                                                                    -176.793,99         -167.212,58        -42.145,26               -32.705,96
                                                                                            -21.347.832,30       -7.634.548,19     -7.628.735,52           -4.281.342,50


Other interest income and similar income                                                     48.898.107,12       18.711.086,96    21.423.665,04             9.367.755,33
Interest expenses and similar expenses                                                      -13.777.579,51       -5.379.248,66     -7.321.162,03           -2.739.959,72


Cash flow from operating activities                                                         13.772.695,31        5.697.290,11     6.473.767,49             2.346.453,11


Amortization and depreciation of intangibles
and tangible fixed assets                                                                    -1.191.949,91         -433.370,32       -634.161,67              -211.611,09
Depreciation of leasing assets                                                                        0,00                0,00         -1.182,82                       0,00


Earnings before taxes                                                                       12.580.745,40        5.263.919,79     5.838.423,00             2.134.842,02


Depreciation of financial assets                                                                      0,00                0,00            -95,61                     -95,61


Earnings before taxes                                                                       12.580.745,40        5.263.919,79     5.838.327,39             2.134.746,41


Taxes on income                                                                              -5.658.964,76       -2.692.976,85     -2.473.372,49              -912.436,41


Net income                                                                                   6.921.780,64        2.570.942,94     3.364.954,90             1.222.310,00


Accumulated profit carried forward from prior year                                            8.537.425,72        8.537.425,72     4.260.969,31             4.260.969,31


Balance sheet profit                                                                                 0,00                0,00               0,00                       0,00


Undiluted earnings per share of common stock in EUR (IAS 33)                                          0,58                0,18             0,36*                      0,13*
Diluted earnings per share of common stock in EUR (IAS 33)                                            0,58                0,18             0,36*                      0,13*


* for purposes of comparison, shares were split at a ratio of 1:7 for the previous years




                                                                                                                                         GFKL/Interim Report as at 30.9.2002   11
Consolidated Statements of Cash Flows as of September 30, 2002 (in accordance with IAS)


                                                                                 1.1. – 30.9.2002 (kEUR)   1.1. – 30.9.2001 (kEUR)


1. Cash flows from operating activities

     Net income for the year                                                              6.922                    3.365
     Depreciation and amortization                                                        1.192                      636
     Change in long-term accruals                                                             0                       -3
     Increase (+)/decrease (-) in special account with reserve character                     -6                      -31
     Deferred taxes affecting income                                                      4.802                    2.369


     Cash earnings according to DVFA/SG                                                  12.910                    6.336


     Increase (+)/decrease (-) in current accruals                                          149                     -159
     Changes in accruals for deferred taxes not affecting income                           -424                     -426
     Accounting profit from disposal of fixed assets (-)                                      0                       -3
     Accounting losses from disposal of fixed assets (+)                                      0                       21
     Increase (-)/decrease (+)
        in inventories                                                                      859                    2.365
        in trade accounts receivable and in other assets                                -25.121                  -10.220
     Increase (+)/decrease (-) in other liabilities                                      30.264                    2.936
     Changes in leasing fund:
     Additions to leasing receivables                                                  -387.550                 -108.862
     Payments by lessees                                                                 98.053                   58.270
     Disposals at residual book values                                                  312.416                  119.112
     Additions to liabilities from refinancing/annuity payments to refinancers          138.669                   25.200
     Repayment of leasing liabilities from refinancing                                 -150.005                  -51.738
     Interest income from leasing receivables                                           -48.434                  -20.727
     Interest expenses from leasing liabilities                                          13.422                    6.420


     Cash flow from operating activities                                                 -4.792                  28.525




2. Investing activities


     Additions to intangible, tangible and financial fixed assets                        -1.870                   -1.354
     Decrease of financial assets                                                             0                        3
     Income from disposal of fixed assets (+)                                                 0                       55
     Purchase of ULG minus net cash and cash equivalents                                 -3.581                        0


     Cash flow from investing activities                                                 -5.451                   -1.296




12    Interim Report as at 30.9.2002/GFKL
                                                                1.1. – 30.9.2002 (kEUR)    1.1. – 30.9.2001 (kEUR)


Financing activities


  Increase in capital reserves (+)                                      39.571                        -2.879
  Increase (+)/decrease (-) in capital stock                             2.833                         6.699
  Cash provided by/used for long-term bank loans                         5.883                          -230
  Cash provided by/used for refinancing though "Funding Ltd."           -2.872                      -35.013


  Cash flow from financing activities                                  45.415                       -31.423




4. Changes in cash and cash equivalents


  Cash flow from operating activities                                   -4.792                       28.523
  Cash flow from investing activities                                   -5.451                        -1.296
  Cash flow from financing activities                                   45.415                      -31.423


  equivalents                                                          35.172                        -4.196




5. Development of liquidity


  Cash and cash equivalents at beginning of period                       6.177                       10.535
  Net increase (+)/ decrease (-) in cash and cash equivalents           35.172                        -4.196


  Cash and cash equivalents at end of period                           41.349                         6.339




6. Composition of financial resources


  Cash and cash equivalents                                             41.349                         6.339


                                                                       41.349                         6.339




                                                                                   GFKL/Interim Report as at 30.9.2002   13
Consolidated Statements of Changes in Shareholders’ Equity for the period from
1.1. – 30.9.2002 (in accordance with IAS)




                                                                                   /
                                                                    d d it




                                                                                 e
                                                                               gs




                                                                        R) r th
                                                                 ar rie rof
                                                                         EU l




                                                                              es
                                                                       (k ita
                                                                             R)




                                                                             in




                                                                            R)
                                                             rw ar p
                                                                           rv




                                                                     EU o




                                                                    (k rs’
                                                                          rn




                                                                         EU
                                                                   se p




                                                                         R)
                                                      k




                                                                  (k e f
                                                          fo s c ted
                                                                 R) se
                                                                ea ca
                                                 R) oc




                                                                R) ea




                                                                ty e
                                                                      EU
                                                                      (k




                                                             ui old
                                                                     om
                                                             EU re




                                                             ss la
                                              EU st




                                                             cr d




                                                             EU d
                                                           in lve




                                                          lo mu
                                                          (k ine
                                                           (k l




                                                           ye inc




                                                          eq reh
                                            (k tal




                                                                 ta




                                                                e
                                                              so




                                                              ar
                                                              pi




                                                             cu
                                              pi




                                                             ta




                                                              a
                                                              t
                                                           Ne




                                                           Sh
                                                           Re




                                                           Ca
                                            Ca




                                                          Ac
                                                          Re
Shareholders.’ equity
as of 1.1.2001                              3.306             0     6.811   64   4.261      0    14.442
Capital increase as of 27.3.2001              68              0     1.980    0      0       0     2.048
Capital increase as vom 21.6.2001             36              0     1.038    0      0       0     1.074
Capital increase vom 4.8.2001               5.928             0    -5.928    0      0       0        0
Capital increase vom 4.9.2001                667              0        0     0      0       0      667
Issue of option bonds                          0              0       76     0      0       0       76
Settlement of costs for
capital increases                              0              0       -45    0      0       0       -45
Consolidated net income
as of 30.9.2001                                0              0        0     0      0    3.365    3.365


Shareholders’ equity
as of 30.9.2001                            10.005             0     3.932   64   4.261   3.365   21.627




Shareholders’ equity as of 1.1.2002        10.005         3.291     2.838   64   8.537      0    24.735
Capital increase as of 20.3.2002            1.350         -3.291   12.691    0      0       0    10.750
Capital increase as of 9.5.2002             2.834             0    29.467    0      0       0    32.301
Settlement of costs for
capital increases                              0              0      -646    0      0       0      -646
Consolidated net income
as of 30.9.2002                                0              0        0     0      0    6.921    6.921


Shareholders’ equity
as of 30.9.2002                            14.189             0    44.350   64   8.537   6.921   74.061




14   Interim Report as at 30.9.2002/GFKL
Segment reporting according to business units as of September 30, 2002




                                                                                                           1




                                                                                                        R)
                                                                                                       R)
                                                                                                       R)
                                                                                               2 ing
                                                                                                       R)




                                                                                                     EU
                                                                                                     EU
                                                                                                    EU
                                                                                                    EU




                                                                                            00 rc
                                                                                            00 g




                                                                                                  (k
                                                                                                  (k
                                                                                                  (k
                                                                                         .2 in
                                                                                                 (k




                                                                                          .2 u
                                                                                       .9 so
                                                                                      .9 as




                                                                                              02
                                                                                               2
                                                                                               2
                                                                                       .9 g
                                                                                               2




                                                                                             00
                                                                                            00
                                                                                    30 in
                                                                                    30 ut
                                                                                   30 Le




                                                                                  R) .20
                                                                                 – old




                                                                                          .2
                                                                                          .2
                                                                                 – O




                                                                                 – n
                                                                                 – s




                                                                              EU .9
                                                                                       .9
                                                                             1. le




                                                                              1. io
                                                                             1. ial




                                                                           (k 30
                                                                           1. p h




                                                                                    30
                                                                           1. ab




                                                                           1. t




                                                                           1. p
                                                                                  nc




                                                                                  si




                                                                               ou

                                                                                  –
                                                                               ou
                                                                              ov




                                                                              an
                                                                              na




                                                                              1.
                                                                              1.




                                                                            Gr
                                                                           Gr
                                                                           M




                                                                           Tr
                                                                           Fi
                                                                           1.
Sales                                                                   230.887                          15.338                          7.570         -13.754                 240.041
    of which internal sales                                                    4.178                          2.048                         7.528


Other revenues                                                              4.194                          5.804                            128         -5.255                    4.871
Interest income                                                           45.433                           3.639                         1.190          -1.364                   48.898


Total revenues                                                         280.514                          24.781                           8.888         -20.373                293.810


Depreciation and amortization                                                  465                            207                           748           -228                    1.192
Other segment expenses                                                  273.682                          16.798                          8.888         -19.330                 280.038


Results from operations                                                     6.367                          7.776                           -748           -815                   12.580
Non-operating result                                                               0                              0                             0            0                          0


Operating results (EBT)*                                                   6.367                           7.776                           -748          -815                   12.580


Investments**                                                               4.964                             268                        1.122          -1.043                    5.311
Segment assets***                                                       189.536                          31.203                         13.498            479                  234.716
Segment liabilities****                                                 124.783                          20.334                          6.212            635                  151.964



*      Earnings before Income Tax
**     The difference between investments in the segment report and the development of the Group’s assets results from ULG’s balance brought forward
***    Segment assets: total assets minus financial assets, receivables due from formerly affiliated companies, deferred taxes and tax refund claims
****   Segment liabilities: accruals and liabilities minus liabilities due from formerly affiliated companies, deferred taxes and tax accruals
1
       The Debis portfolio (leasing) is also included here




                                                                                                                                                         GFKL/Interim Report as at 30.9.2002   15
Development of the Group’s assets for the period from 1.1.2002 – 30.9.2002



                                                                       Acquisition and production costs
                                                     Situation as of        Additions     Disposals       Situation as of
                                                     1.1.2002 (EUR)           (EUR)         (EUR)         30.9.2002 (EUR)



Fixed assets
     I. Intangible assets
       1. Software                                     3.328.209,46        1.043.059,34         0,00        4.371.268,80
       2. Goodwill                                      102.258,38         3.654.575,88         0,00        3.756.834,26


                                                      3.430.467,84         4.697.635,22         0,00       8.128.103,06



     II. Tangible assets
       1. Other equipment, furniture and fixtures
           a) Vans/vehicles                              41.965,77           172.573,20         0,00          214.538,97
           b) Furniture and fixtures                   1.841.468,63          923.363,16     6.697,55        2.758.134,24
           c) Low-value items                                 0,00            55.714,57    55.714,57                0,00


                                                      1.883.434,40         1.151.650,93    62.412,12       2.972.673,21



     III.Financial assets
       1. Financial investments – held to maturity       67.886,79                 0,00         0,00           67.886,79


                                                         67.886,79                0,00          0,00          67.886,79




                                                      5.381.789,03         5.849.286,15    62.412,12      11.168.663,06




16     Interim Report as at 30.9.2002/GFKL
       Accumulated depreciation and amortization                  Residual book values
Situation as of     Additions    Disposals    Situation as of     30.9.2002                31.12.2001
1.1.2002 (EUR)         (EUR)      (EUR)       30.9.2002 (EUR)       (EUR)                      (EUR)




 1.138.582,49       581.363,96         0,00     1.719.946,45    2.651.322,35              2.189.621,07
    34.085,28       187.841,57         0,00       221.926,85    3.534.907,41                  68.173,10


1.172.667,77       769.205,53         0,00     1.941.873,30     6.186.229,76             2.257.794,17




     3.302,19       152.407,00         0,00       155.709,19       58.829,78                  38.663,58
   834.217,44       533.204,62      990,51      1.366.431,55    1.391.702,69              1.007.247,73
         0,00        55.714,57    55.714,57             0,00            0,00                         0,00


  837.519,63       741.326,19    56.705,08     1.522.140,74     1.450.532,47             1.045.911,31




         0,00             0,00         0,00             0,00       67.886,79                  67.886,79


        0,00             0,00         0,00             0,00       67.886,79                  67.886,79




2.010.187,40      1.510.531,72   56.705,08     3.464.014,04     7.704.649,02             3.371.592,27




                                                                         GFKL/Interim Report as at 30.9.2002   17
Annex to the
consolidated accounts
of September 30, 2002 (in accordance with IAS)




I. General explanatory notes

1. General information on the Group
                                                                            tungs-GmbH. The latter company is not carrying out any business opera-
MLQ Investors L.P., an indirect 100% subsidiary of the Goldman Sachs        tions at present. In accordance with a shareholder decision passed on
Group Inc. holds a share of 32.8% in GFKL Financial Services AG, Essen,     March 26, 2002, GFKL Portfolio Services GmbH was renamed Proceed
the parent company of the GFKL Group. In April this year, the ERGO Ver-     Portfolio Services GmbH and GFKL Securitization Services GmbH was
sicherungsgruppe AG acquired an indirect share of 19.7 % of GFKL            renamed Proceed Securitization Services GmbH. The renaming of the
Financial Services AG via a 100% holding in ERGO companies VICTORIA         companies was registered in the Commercial Register of Essen on April
Versicherung AG and Hamburg-Mannheimer Sachversicherungs AG. The            14, 2002.
remaining shares are spread between private investors, members of the           GFKL Financial Services AG functions as a pure holding company, and
executive board and employees. The company headquarter is located in        as such carries out staff functions such as financial management and
Essen, Germany. It is registered in the Commercial Register of the Magis-   accounting, controlling, software development and organization, personnel
trate’s Court in Essen under the registration number HRB No. 13522. As      management and tasks such as investor relations, risk management and
of February 22, 1999, Goldman Sachs provided one of the three members       internal auditing.With the exception of DarFin, the costs incurred by these
of the supervisory board in the person of Mr. Peter Cirenza of Tokyo; on    tasks are charged to the subsidiaries. The economic circumstances of the
January 23, 2002, Mr. Cirenza was replaced as a member of the supervi-      operational subsidiaries are as follows:
sory board by Mr. Mark Kogan of London. Since April 1, 2002, the ERGO
Versicherungsgruppe AG has also provided a member of the supervisory
board in the person of Dr. Franz Wilhelm Hopp. Dr. Hopp replaced Profes-    GFKL Mobilien GmbH
sor Dr. Michael August Adams as a member of the supervisory board.          As a sales financing company, GFKL Mobilien GmbH offers individual
     The GFKL Group has seven fully consolidated subsidiaries: GFKL         financing solutions for movable assets. These assets consist of all types of
Mobilien GmbH, Universal-Leasing-GmbH, Universal-Vermietungs-GmbH,          movable investment objects, in particular vehicles and special equipment
Proceed Portfolio Services GmbH (formerly GFKL Portfolio Services           and machinery used in the mechanical engineering, printing, foodstuff
GmbH), Proceed Securitization Services GmbH (formerly GFKL Securitiza-      and construction industries as well as in agriculture and forestry.The com-
tion Services GmbH) and Proceed Asset Trading GmbH, in which GFKL           pany concentrates on regional and product-based niche markets which
Financial Services AG holds a share of 100%. Moreover, GFKL Financial       require effective risk management and special product knowledge.
Services AG holds all shares in DarFin Verwaltungsgesellschaft GmbH,        GFKL Mobilien GmbH currently operates twenty offices. In accordance
which was purchased by means of a sales agreement dated November            with a shareholders’ decision passed on February 5, 2002, the legal domi-
11, 2002 with retroactive economic effect from July 10, 2002. DarFin        cile of GFKL Mobilien GmbH was moved to Essen. The move was entered
Verwaltungsgesellschaft GmbH is a special-purpose company which was         in the Commercial Register on April 6, 2002 (Essen Magistrate’s Court,
set up for the purchase of a loan portfolio.                                HRB 16348).The company’s previous domicile in Rostock still exists in the
     Universal-Leasing-GmbH holds a share of 100% in Universal-Vermie-      form of a registered branch.



18   Interim Report as at 30.9.2002/GFKL
Universal-Leasing-GmbH                                                         Proceed Asset Trading GmbH
As a sales financing company, Universal-Leasing-GmbH, Augsburg, offers         Proceed Asset Trading GmbH trades movable assets of all types and
individual financing solutions for movable assets. These assets consist of     provides the related services. Its core competence is the valuation, secur-
all types of movable investment objects, in particular vehicles, fitness       ing and marketing of movable assets from both expired and/or defaulting
equipment and machinery. The company is essentially active in Southern         property financing contracts and of securities. It carries out these activi-
Germany. In addition to its headquarter in Augsburg, it maintains a branch     ties as an outsourcing partner, especially for banks and savings banks,
in Leipzig and cooperates with several strategic partners throughout           but also for leasing companies, collecting agencies and insolvency
Germany.                                                                       managers. Its range of services also includes the management of expiring
    Universal-Leasing-GmbH has been active on the leasing market for           property financing contracts. Furthermore, Proceed Asset Trading GmbH
34 years and is thus one of the oldest leasing companies in Germany. It        offers manufacturers and traders used objects for sale, which if necessary
was purchased by GFKL Financial Services AG from the Allianz Ver-              revert to the company via repurchasing guarantees.
mögensbank-AG on March 31, 2002 with retroactive economic effect
from January 1, 2002.
    The acquisition of Universal-Leasing-GmbH means that the sales
offices of GFKL Mobilien GmbH have been augmented and now consti-
tute a network spread across Germany. Because of the differing compo-
sition of the financing portfolios of the two companies, property and
credit risks will be diversified even further in the future. Further synergy
potential realized in the short term is found in the mutual refinancing of
the leasing business via the existing Asset Backed Commercial Paper
(ABCP) programs of GFKL Mobilien GmbH and in the merging of areas of
responsibility such as the personnel department or call center.



Proceed Portfolio Services GmbH                                                2. Accounting
(formerly GFKL Portfolio Services GmbH)
Proceed Portfolio Services GmbH manages extensive receivables invento-         a) IAS regulations
ries for banks, savings banks and other institutional investors, in compli-    The consolidated accounts of GFKL Financial Services AG as of Septem-
ance with the directives of the Federal Banking Supervisory Office. The        ber 30, 2001 and September 30, 2002 were drawn up in accordance with
asset portfolios thus managed largely consist of consumer loans, leasing       international accounting specifications on the basis of the International
and hire-purchase agreements and mortgaged loans, but also include             Accounting Standards (IAS) as well as with the interpretations of the
innovative financing models. The service spectrum includes trust               Standing Interpretations Committee (SIC) of the International Accounting
management of both properly serviced receivables and receivables with          Standards Board (IASB).
payment irregularities, called or legally enforceable receivables and              The accounting and assessment principles applied have changed
usually the associated takeover of the corresponding accounting and            from those of the previous year. A large part of the sums displayed as
reporting services.                                                            accruals in the previous year were reorganized into liabilities as the due
                                                                               dates and totals of the amounts were not uncertain. Here the require-
                                                                               ments made by IAS 37 are taken into account. In order to establish com-
Proceed Securitization Services GmbH                                           parability with the previous year, the comparative figures were also
(formerly GFKL Securitization Services GmbH)                                   rearranged (IAS 1.40.). As of December 31, 2001, 4,489 kEUR and as of
The business activities of Proceed Securitization Services GmbH are            September 30, 2001, 3,057 kEUR were moved from "Accruals" to
focused on refinancing leasing companies by purchasing leasing and             "Other short-term liabilities from operations".
hire-purchase receivables. The pools of receivables thus created are secu-         The figures are given in thousand EURO (kEUR), in so far as no notes
ritized by Proceed Securitization Services GmbH in the form of Asset           exist to the contrary.
Backed Securities (ABS) or as part of ABCP programs and placed on the              The consolidated balance sheet was organized in accordance with
capital and/or money market. In addition, Proceed Securitization Services      the term concept of IAS 1.
GmbH intends to offer so-called securitization services to other leasing           In the annex, the values as of September 30, 2002 are compared to
companies in the future, i.e. by grouping receivables from other leasing       the equivalent figures as of September 30, 2001. In so far as no notes
companies in portfolios, electronically registering and analyzing them         exist to the contrary, the values as of September 30, 2001 refer to the
using the GFKL Group’s data processing platform, and organizing their          Group without Universal-Leasing-GmbH.
refinancing on the capital market on the basis of this analysis, taking over       For the comparative figures as of December 31, 2001, please refer to
the monthly reporting necessary for this purpose.                              the information in the annex of the audit report of December 31, 2001.



                                                                                                                      GFKL/Interim Report as at 30.9.2002   19
b) Explanatory notes on the differences between                                 3. Information on consolidation
consolidated accounts in accordance with IAS and
German accounting regulations respectively                                      a) Companies consolidated
In the course of changing the consolidated accounts from HGB (German            In comparison to the previous year, the number of companies consolidated
Commercial Code) to IAS format, adjustments to various items in the con-        increased to include Universal-Leasing-GmbH, Augsburg, Universal-
solidated balance sheet as well as in the consolidated income statement         Vermietung-GmbH,Augsburg and DarFin Verwaltungsgesellschaft GmbH,
were necessary in order to meet the accounting requirements of the IAS.         Essen; moreover, apart from the parent company GFKL Financial Services
     One of the company’s key activities is the conclusion of leasing and       AG, Essen, the companies consolidated include GFKL Mobilien GmbH,
hire-purchase agreements. Here the leasing agreements are drawn up as           Essen, Proceed Portfolio Services GmbH, Essen, Proceed Securitization
either full or partial amortization agreements and in HGB accounting            Services GmbH, Essen, and Proceed Asset Trading GmbH, Essen.
comply with the requirements of tax remission for leasing when the                  All subsidiaries excluding DarFin comprise an entity subject to
lessor is accounting for leasing objects.According to IAS 17 (revised), both    turnover tax. GFKL Mobilien GmbH, Proceed Portfolio Services GmbH,
the leasing and hire-purchase agreements concluded by the company               Proceed Securitization Services GmbH and Proceed Asset Trading GmbH
must qualify as "finance leases" in IAS terms. Leasing investment assets        are also entities subject to business tax and corporate tax and have
are therefore no longer specified in the quarterly statement of September       control and profit and loss transfer agreements.
30, 2002. In its place, the lessor has to display the cash value of the
future leasing installments as net asset value, constituting a special item     b) Consolidation principles
in the consolidated balance sheet. Further changes in this context result       The quarterly statements of all the companies included in the consolidated
from the removal of hire-purchase receivables and deferred income and           accounts are issued in accordance with the accounting date of the consol-
accrued expenses from special hire-purchase payments received.                  idated accounts.They are based on standardized accounting and evaluation
     The company sells receivables from existing leasing installments           methods.
and/or agreed residual values to refinancing institutions (either individu-         The capital consolidation of the included subsidiaries is carried out in
ally or consolidated in packages). According to HGB, the cash values            accordance with IAS 22.32 with the fair values of the acquired, identifiable
received from such sales are listed under "deferred income and accrued          assets and debts. Here the respective book value of participations for GFKL
expenses". According to IAS, however, they must be listed as leasing            Financial Services AG is compared to the shareholders’ equity of each of the
liabilities.                                                                    subsidiaries on the accounting date.
     In order to cover latent default risks, a general provision for doubtful       Internal receivables and liabilities between fully consolidated compa-
debts on trade accounts receivable without reserve for bad debts is made        nies are offset. Differences did not occur during offsetting as assets and
in commercial accounting. According to IAS, general accruals for doubt-         liabilities of equal value were matched.
ful debts are not permitted.                                                        Contingent liabilities have been consolidated to the necessary extent.
     The company has developed an independent software program for                  In the consolidation of expenses and income, the internal turnover and
the management of its own and third-party leasing agreements and                the internal income were offset against the respective expenses incurred.
receivables portfolios, covering both contract management and account-              Interim results from business carried out between companies included
ing. Deviating from the commercial law ban on the capitalization of             in the accounts were eliminated.
self-created intangible assets in accordance with § 248, par. 2 HGB, it is          As a result of applying standardized consolidated accounting and
possible to capitalize the costs as intangible assets and amortize them         assessment regulations, consolidating debts affecting the result and
over the expected period of use in accordance with IAS 38 no.10 and no.         eliminating interim results, tax deferrals had to be made which were
45 (revised).                                                                   combined with tax deferrals from the individual accounts.The deferrals from
     The directly imputable costs of the capital increase were offset           the individual accounts were reassessed from the point of view of the tax
against the capital reserves in accordance with SIC 17. According to HGB,       accrual accounting methods used in the Group.
these costs must be listed under personnel expenses and other operating
expenses.
     Deferred taxes were created for temporary differences between the
consolidated balance sheet and the tax balance sheet. Furthermore, a tax
accrual was recorded on accumulated loss carried forward.
     In accordance with IAS regulations, the Group's notes to the finan-
cial statements were expanded by segment reporting and further supple-
mentary information.




20    Interim Report as at 30.9.2002/GFKL
ll. Accounting and assessment principles

1. Consolidated balance sheet                                                     2. Consolidated income statement
Assets and other rights are listed at continued acquisition or manufactur-        The consolidated income statement was drawn up in accordance with the
ing costs. The intangible assets and tangible assets are listed at acquisition    total cost method.
and manufacturing costs reduced by regular depreciation and amortization.
Regular depreciation and amortization is carried out linearly in accordance
with the Group’s customary period of use. The depreciation and amortiza-
tion period corresponds to the service life of assets customary in the
market. The period is six years for software designed in-house, five to
seven years for motor vehicles and two to ten years for other equipment,
furniture and fixtures.
                                                                                  3. Initial consolidation of Universal-
    Furthermore a so-called impairment test is carried out on each                Leasing-GmbH and DarFin Verwaltungs-
accounting date.                                                                  gesellschaft GmbH
    Goodwill is amortized linearly over a period of 15 years.
    Financial assets are balanced with acquisition costs plus accumulated         As of January 1, 2002, Universal-Leasing-GmbH (ULG) was included in the
interest claims where necessary.                                                  companies consolidated in the GFKL Group for the first time.
    Deferred taxes are set up for differences between the tax valuation of            The proportion of the purchase price for the purchase of ULG (acquisi-
assets and debts and the valuation given in the consolidated accounts on          tion costs 10,418 kEUR) specified in accordance with IAS and exceeding
the accounting date, especially for differences in fixed assets and the           the shareholders’ equity of 6,763 kEUR was capitalized as goodwill. This
special considerations for accounting and assessment of leasing operations        goodwill will be amortized linearly over a period of 15 years and added up
according to IAS.                                                                 to 3,472 kEUR as of September 30. Thus the amortization sum totaled
    Active deferred taxes on benefits from as yet unused accumulated loss         183 kEUR as of September 30, 2002. As of March 31, 2002, a goodwill of
carried forward are capitalized in so far as a sufficient probability of future   8,349 kEUR was listed from the purchase. In the accounts as of March 31,
taxable income exists.The deferred taxes are determined in accordance with        2002, the executive board made various premises because of missing
IAS 12 no. 47 on the basis of the tax rates applicable at the time of             detailed information, especially concerning the leasing receivables of ULG.
realization and/or which are to be used in future.                                The final take-over of the ULG database and the conversion of the leasing
    Inventories are valued at acquisition costs. For properties from finalized    receivables resulted in a goodwill of 3,472 kEUR as of September 30, 2002.
reversed hire-purchase agreements, downward valuation adjustments are                 The following overview shows the proportion apportioned to
made in accordance with the conditions on the market in order to value            Universal-Leasing-GmbH in the group’s consolidated accounts, referring to
these inventories without loss.                                                   the most important items on the balance sheet and income statement:
    The leasing receivables are listed at cash value; receivables and other
fixed assets are assessed at acquisition costs. In the case of DarFin Verwal-
tungsgesellschaft GmbH, the receivables were listed with their respective
fair values. Appropriate accruals for bad debts were set up for all high-risk
items.
    In accordance with SIC 17, costs incurred by capital increases are
offset against capital reserves without affecting the result.
    The tax accruals and other accruals take into account all recognizable
risks and uncertain obligations and were listed at the amount of the prob-
able obligations.
    Liabilities were assessed with the amount repayable including accrued
interest.
    Financial derivative instruments were only used for purposes of securi-
tization and refer exclusively to interest hedging measures for refinancing
the leasing business or the ABCP program.
    The consolidated balance sheet was organized in accordance with the
term concept of IAS 1.




                                                                                                                        GFKL/Interim Report as at 30.9.2002   21
Consolidated balance sheet
                                                                              Group 30.9.2002 (kEUR)            ULG 30.9.2002 (kEUR)           Share in %


Assets
Current receivables:
Interest-bearing leasing and hire-purchase receivables                                     46.757                           8.436                    18,0
Other short-term operating receivables                                                     11.415                           3.933                    34,5


Long-term receivables:
Interest-bearing leasing and hire-purchase receivables                                     85.170                         11.252                     13,2
Other long-term receivables                                                                16.725                           6.150                    36,8


Liabilities and shareholders’ equity
Current liabilities:
Leasing liabilities from refinancing                                                       16.151                             311                      1,9
Liabilities due to banks                                                                   35.161                           3.964                    11,3
Trade accounts payable                                                                     10.732                           3.229                    30,1
Other short-term liabilities from operations                                               33.599                           5.789                    17,2



The items "Other long-term receivables" (6,150 kEUR) and "Other                        The liabilities due to banks amounting to 3,964 kEUR largely relate
short-term operating receivables" (3,933 kEUR) largely consist of a                to the initial and interim financing of leasing and hire-purchase
security deposit from the ABCP program entered on the assets side and              receivables.
amounting to 6% of the leasing receivables sold.                                       The other short-term liabilities from operations amounting to
     Forfeited installments and residual values are summarized in the item         5,789 kEUR mainly consist of the current share of deposits received.
"Leasing liabilities from refinancing".




Consolidated income statement
                                                                              Group 30.9.2002 (kEUR)            ULG 30.9.2002 (kEUR)            Share in %


Sales                                                                                     240.041                          61.196                     25,5
Leasing expenses                                                                          233.874                          61.581                     26.3
Other interest income and similar income                                                   48.898                          23.264                     47,6
Interest expenses and similar expenses                                                     13.778                           6.947                     50,4



     The largest proportion of the sales comes from the leasing sector.This            The interest expenses and similar expenses are largely composed of
proportion affects the result to a small degree only, as the sales are set         the initial and interim financing of leasing and hire-purchase receivables.
against equal leasing expenses.                                                        The most important items in the balance sheet and income statement
     As the sale of leasing and hire-purchase receivables into the ABCP            relating to DarFin Verwaltungsgesellschaft GmbH include the negative
programs is not listed in the consolidated balance sheet, the relevant             difference arising from the portfolio purchase and the adjustment of this
interest income is itemized under "Other interest income and similar               over time.
income".




22   Interim Report as at 30.9.2002/GFKL
III. Explanatory notes on the leasing business
In the leasing sector, the Group concludes leasing and hire-purchase
agreements for a fixed basic leasing period of 44 months on average for            risk of loss or damage and the obligation of the lessee or hire-purchaser
GFKL Mobilien GmbH agreements and 41 months for Universal-Leasing-                 to insure the contractual object (at its original value). GFKL is in no case
GmbH agreements. The success from the conclusion of these agreements,              liable for the supplier’s ability and willingness to deliver.
treated by IAS as "finance leases", results from interest income realized              Changes in the acquisition costs of the contractual object, e.g.
within the 44 months or 41 months respectively, and additional income              because of its specification, are also chargeable to the lessee or hire-
from the sale of returned leasing objects and fees.                                purchaser. The monthly installments are paid regularly by direct debit
    The Group balances the net leasing and hire-purchase receivables               authorization or credit transfer instruction. GFKL reserves the right to
charged to the lessee as assets in the accounts. These are set against the         rescind any agreement on important grounds.
liabilities from refinancing the leasing business on the liabilities side of the       The measures for safeguarding risks associated with the leasing
accounts. The leasing installments received and the repayments from                business are as follows:
refinancing are separated into interest and redemption proportions in
financial calculations.The interest proportion, affecting the result, is listed    Liquidity risks
under interest income or interest expenses; the redemption proportion is           Liquidity monitoring and verification of the utilization of the group's inter-
used to pay back the net leasing and hire-purchase receivables charged             nal free refinancing capacities is performed daily, supported by the con-
to the lessee or the liabilities from refinancing charged to the refinancing       tract administration software LEASE 1.
partner.
    The major part of the result in the leasing sector comes from interest         Object/residual value risks
revenues, that is from the difference between the internal contractual             The acquisition costs and the expected value-over-time of a leasing ob-
interest and the refinancing interest of a commitment. The internal                ject are examined for their appropriateness using continually updated as-
contractual interest is based on installments to be paid by the lessee             sessment databases linked through the system. Furthermore, the lessee is
during the agreed leasing period as well as on the net investment in the           liable for maintenance and property insurance in accordance with the
leasing property. Furthermore, the expected average revenues from the              contractual agreement. The sale of the property is effected through the
disposal of the leasing property to the lessee at the end of the leasing           trader or by Proceed Asset Trading GmbH.
period are taken into account when calculating the internal contractual                For information concerning further financial risks, please refer to our
interest for leasing agreements.                                                   report regarding financial instruments.
    The basic conditions for leasing and hire-purchase agreements are
customary in the sector and include for example the assumption of the




                                                                                                                           GFKL/Interim Report as at 30.9.2002   23
IV. Individual notes on the consolidated balance sheet

Current assets


1. Liquid funds
The bank inventories mainly comprise assets from current accounts.          As part of the sale of receivables into the ABCP programs, 6% or 8% of
     A fixed deposit of 586 kEUR as of September 30, 2002 at the            the receivables volume is retained as cash security deposit by Compass
Stadtsparkasse Köln is set against the liabilities from security deposits   Variety Funding Ltd. (Compass) and the Tulip Asset Purchase Company
under "Other liabilities".These were taken over by Frankfurter Kreditbank   B.V. (Tulip) respectively. As of September 30, 2002 the security deposits
GmbH and Frankfurter Leasing GmbH respectively as part of an ABS trans-     added up to 26.5 million EUR. This asset is listed in the balance sheet
action carried out in 1999.                                                 under the items "Long-term receivables" and "Other short-term operat-
                                                                            ing receivables".
                                   30.9.2002 (kEUR) 30.9.2001 (kEUR)        The increase in liquid funds compared to the previous year can be
                                                                            substantially put down to the capital increases carried out in 2002.
Deutsche Bank                              15.700           1.899
Landesbank Rheinlandpfalz                   7.417               0
Stadtsparkasse Köln                         6.522             836
Sparkasse Essen                             3.366           3.394
ABN Amro                                    3.061               0
Bremer Landesbank                           1.912               0
Other banks and
cash balance                                3.371             210


Total                                      41.349           6.339




2. Interest-bearing leasing and hire-purchase receivables
In the consolidated accounts, current interest-bearing leasing and hire-    Composition of net leasing receivables
purchase receivables are listed analogously to long-term interest-bearing
leasing and hire-purchase receivables. Current leasing and hire-purchase                                   30.9.2002 (kEUR) 30.9.2001 (kEUR)
receivables are divided as follows:
                                                                            Leasing                               22.250               11.341
                                                                            Hire-purchase                         24.507               18.951


                                                                            Inventory
                                                                            as of 30.9.2002                       46.757               30.292




24   Interim Report as at 30.9.2002/GFKL
3. Trade accounts receivable
Trade accounts receivable largely refer to loans receivable, receivables due   All trade accounts receivable are limited to less than a year. Additions to
from third parties from the sale of returned leasing objects and securities,   accruals for bad debts are balanced and explained under "Other operat-
receivables due from clients from the portfolio management business,           ing expenses".
receivables from overdue installments from leasing and hire-purchase
agreements as well as indemnity claims:


                               30.9.2002 (kEUR) 30.9.2001 (kEUR)


Trade accounts receivable              37.098               16.038
minus accruals for bad
debts                                    9.091                1.343


Total                                  28.007               14.695




4. Receivables due from affiliated companies
Receivables due from affiliated companies consist of service fee invoices
to the shareholder MLQ Investors L.P. not yet balanced at the quarterly
accounting date. These cover the trust administration of a receivables
portfolio consisting of consumer loans and real estate financing.




5. Finished goods and merchandise
Inventories refer to hire-purchase objects where the final invoice to the                                     30.9.2002 (kEUR) 30.9.2001 (kEUR)
lessee-purchaser was still open as of the accounting date, and other
objects from reversed leasing and hire-purchase agreements intended            Hire-purchase objects                     665                  1.122
for sale:                                                                      Other objects                             599                  1.698
                                                                               Advance payments made                     708                        0
                                                                               Consolidation                              -26                       0


                                                                               Total                                   1.946                  2.820




                                                                                                                     GFKL/Interim Report as at 30.9.2002   25
6. Other short-term operating receivables
                                   30.9.2002 (kEUR) 30.9.2001 (kEUR)           of the ABCP programs. The increase results in particular from the first-
                                                                               time sale of ULG leasing receivables into an ABCP program, and from the
Cash reserve                                9.743             1.668            sale of a large portion of the leasing and hire-purchase receivables in the
Other                                       1.672             2.412            portfolio acquired by Proceed Securitization Services GmbH from Daim-
                                                                               lerChrysler Services Structured Finance GmbH into the Tulip program.With
Total                                      11.415            4.080             regard to the representation in the consolidated balance sheet, please
                                                                               refer to the comments on "Other long-term receivables".
The item "Cash reserve" includes the current proportion of receivables         The item "Other" includes among others creditors with debit balances,
due from Compass and Tulip. This refers to the current security deposits       salary settlements, current deposits and receivables from recoverable
of 6% or 8% of the leasing receivables sold, which were set up as part         costs from other portfolio administration mandates.




7. Tax refund claims
Tax refund claims refer to corporation tax, sales tax, business tax, capital                                  30.9.2002 (kEUR) 30.9.2001 (kEUR)
gains tax and the solidarity surcharge and have developed as follows:
                                                                               Business tax                                 0                  55
                                                                               Capital gains tax                           34                  60
                                                                               Solidarity surcharge                         1                    3


                                                                               Total                                      35                  118




Fixed assets
The development of the individual items listed as fixed assets is present-
ed in an extra table, "Development of the Group's Fixed Assets", which
is attached to this annex.




26   Interim Report as at 30.9.2002/GFKL
8. Interest-bearing leasing and hire-purchase receivables
According to IAS 17 No. 28 (revised), an asset from a "finance lease"         Despite the growth in new business, the net leasing receivables affecting
contract must be booked in the lessor’s balance sheets at the                 the consolidated balance sheet at first only rose from 106.4 million EUR
commencement of the agreement as an asset at an amount equal to the           as of January 1, 2002 to 131.9 million EUR. This was due to the altered
net investment from the lease. The basis for the calculation of the net       refinancing mix. The leasing receivables of Universal-Leasing-GmbH were
investment value comprises the acquisition costs of the leasing object less   shown as additions to the previous leasing receivables. The disposals
special lease payments made by the lessee.                                    during the business year include the leasing and hire-purchase receivables
    In accordance with IAS 17 No. 30 (revised), the leasing and hire-         sold into the Compass and Tulip ABCP programs.
purchase receivables were calculated as cash value of remaining assets
as of September 30, 2002. This calculation was based on the data held
by the contract management. The internal interest rate on which the cash      Transition of net leasing receivables
value calculation is based was calculated by comparing the net invest-        to gross leasing receivables
ment value with the total of all leasing payments plus a residual value or
calculated post-leasing income.                                                                              30.9.2002 (kEUR) 30.9.2001 (kEUR)
    Furthermore, in accordance with IAS 17 No. 33, direct costs incurred
by the lessor in connection with the conclusion of a leasing agreement        Net leasing receivables              131.927                  95.082
were neutralized by the corresponding entry of financial income not yet       Unearned interest                      22.645                 12.450
realized (initial direct costs). These remained unchanged compared to
2001, and were recorded at 3.8% with reference to the volume of new           Gross leasing receiv-
business, if and insofar as the leasing receivables were not sold under the   ables as of accounting
ABCP programs. For the receivables sold into the ABCP programs, only          date                                 154.572               107.532
around a quarter of the initial direct costs corresponding to the propor-
tionately collected interest income were taken into causal consideration.
    With effect from June 27, 2001, an ABCP program was concluded             Long-term and current leasing and hire-purchase receivables are booked
with Westdeutsche Landesbank Girozentrale, Düsseldorf. A further ABCP         net of unearned, contracted interest flowing to the Group with the clients’
program with a value of 250 million EUR was concluded with the ABN            annuity installments.
AMRO Bank N.V. with effect from June 28, 2002.The nominal value of the
leasing and hire-purchase receivables sold as of September 30, 2002 adds
up to 482,410 kEUR. On this date, the cash value of these unaccounted         Development of net leasing receivables
receivables added up to 421,245 kEUR. In the consolidated accounts of
September 30, 2002, a disposal of leasing and hire-purchase receivables                                      30.9.2002 (kEUR) 30.9.2001 (kEUR)
is matched by the capitalization of a security deposit of 26.5 million EUR.
(6% or 8%). 16,724 kEUR of this amount are booked under "Other long-          Residual term > 1 year
term receivables" and 9,743 kEUR under "Other short-term operating            and < 5 years                          82.022                 63.665
receivables".                                                                 Residual term > 5 years                 3.148                  1.125


Development of interest-bearing leasing receivables                           Inventory as of 30.9.                 85.170                 64.790


                               30.9.2002 (kEUR) 30.9.2001 (kEUR)
                                                                              Development of gross leasing receivables
Inventory as of 1.1.                  106.412             142.875
Additions during                                                                                             30.9.2002 (kEUR) 30.9.2001 (kEUR)
the business year                     387.550             108.862
Interest income during                                                        Residual term > 1 year
the business year                      48.434               20.727            and < 5 years                          97.232                 72.002
Installment payments                                                          Residual term > 5 years                 3.779                  1.272
during the business year               98.053               58.270
Disposals during                                                              Inventory as of 30.9.                101.011                 73.274
the business year                     312.416             119.112


Inventory as of 30.9.                131.927               95.082



                                                                                                                    GFKL/Interim Report as at 30.9.2002   27
9. Other long-term assets
Other long-term assets largely consist of receivables due from Compass         transactions"] (IDW RS HFA 8) with effect from October 30, 2001; but in
and Tulip of 16,724 kEUR. These are long-term security deposits amount-        accordance with IAS 39 No. 27 ff. and 39 no. 35 ff. respectively. The
ing to 6% or 8% of the leasing and hire-purchase receivables sold, which       remaining proportion of the security deposit (9,743 kEUR) is booked
were capitalized contrary to the draft of the IDW remarks on accounting        under the item "Other short-term operating receivables". Furthermore,
"Zweifelsfragen der Bilanzierung von Asset-Backed-Securities Gestaltun-        the other long-term receivables include paid deposits amounting to 1 kEUR.
gen oder ähnlichen Securitisation-Transaktionen" ["Doubtful cases in the
accounting of Asset Backed Securities packages or similar securitization




10. Other equipment, furniture and fixtures
To support the expansion of its business, the Group invested particularly
in the development of the distribution network. The staff in the existing
offices were reinforced further.




11. Software
As of September 30, 2002, the software designed in-house had
developed as follows:
                                                                                                       30.9.2002 (kEUR)          30.9.2001 (kEUR)


Inventory as of 1.1. relating to historical acquisition/production costs                                       2.754                    1.545
Additions during the business year                                                                               866                      870


Inventory as of 30.9. relating to historical acquisition costs                                                3.620                    2.415



Accumulated amortization as of 1.1.                                                                              685                      287
Additions during the business year                                                                               490                      261
Accumulated amortization as of 30.9.                                                                          1.175                      548


Book value (balance)                                                                                          2.445                    1.867



In accordance with IAS 38 No. 53 ff, the software designed in-house is
valued at production cost. It is amortized over its estimated useful life of
6 years.
     The costs for the development of new modules of the standard
administration software used by all companies in the group were capital-
ized or post-capitalized as fixed assets in the corresponding business
years.




28   Interim Report as at 30.9.2002/GFKL
12. Financial investments – held to maturity
The financial investments – held to maturity are fixed-interest zero         will be held until maturity on July 1, 2005. They are balanced (including
coupon bonds with a term of 10 years, which accrue interest annually and     accrued interest) at acquisition cost.




13. Goodwill
The goodwill booked in the consolidated accounts largely results from the    Investors L.P, New York/U.S.A, a wholly owned subsidiary of the Goldman
purchase of Universal-Leasing-GmbH. In the previous year, goodwill           Sachs Group Inc, in today’s GFKL Financial Services AG Group. Goodwill
resulted from the disclosure of hidden reserves at GFKL Mobilien GmbH        is amortized linearly over a period of 15 years.
in connection with its spin-off from the former Gesellschaft für Kommu-          The amortization is listed in the consolidated income statement
nal-Leasing GmbH & Co. KG in 1997. The group was separated and the           under the item "Amortization and depreciation of intangibles and tan-
hidden reserves disclosed for the purpose of a participation by MLQ          gible fixed assets".




14. Negative difference
The purchase of the loan portfolio by DarFin Verwaltungsgesellschaft
GmbH comes under the terms of reference described in IAS 22.4. At the        which was instantly realized at the time of the purchase in default of the
time of the purchase, a "fair value step-up" was carried out in the course   purchase of other non-monetary assets in accordance with IAS 22.62 (b)
of determining the purchase price. This led to an increase of 6.8 million    (1.9 million EUR). In further developments up to September 30, 2002, the
EUR in the debts outstanding, which brought the total to 9.8 million EUR.    negative difference decreased to 4.4 million EUR as a result of anticipa-
The negative difference of 6.8 million EUR thus created is to be divided     tory redemption.
into one amount constituting an allowance to cover the risks inherent in
the portfolio (4.9 million EUR) and another amount affecting the result




Current liabilities

15. Leasing liabilities from refinancing
The current leasing liabilities from refinancing, divided into installment   The proportion of leasing liabilities from refinancing with a residual term
payments and residual values sold as assets through real and unreal          of more than one year is balanced under the long-term leasing liabilities
factorization, have developed as follows in the last two business years:     from refinancing. Please refer to the relevant notes.


                                 30.9.2002 (kEUR) 30.9.2001 (kEUR)


Forfeited installment payments          3.235               3.337
Forfeited residual values                 265                 118
Refinanced installment
payments and residual values          12.651               15.328


Inventory as of 30.9.                 16.151              18.783



                                                                                                                      GFKL/Interim Report as at 30.9.2002   29
16. Liabilities due to banks
The current liabilities due to banks consist of the following items:       Liabilities due to banks are largely composed of the initial and interim
                                                                           financing of leasing and hire-purchase receivables and of current shares
                                   30.9.2002 (kEUR) 30.9.2001 (kEUR)       from loan liabilities when financing residual values.


Deutsche Bank AG                           14.794            7.550
Stadtsparkasse Köln                         6.591            3.864
Deutsche Kreditbank AG                      6.563            2.697
Landesbank Rheinland-Pfalz                  3.964                 0
Bremer Landesbank                           1.582              229
Sparkasse Essen                             1.384            5.395
Sparkasse Essen/ Deutsche
Ausgleichsbank                               247               257
DZ Bank AG                                     0             5.785
Other                                         37               115


Inventory as of 30.9.                      35.162          25.892




17. Trade accounts payable
The trade accounts payable are largely liabilities from the purchase of
leasing and hire-purchase objects and the obligation to pass on payments
received from the portfolio management:
                                                                                                   30.9.2002 (kEUR)           30.9.2001 (kEUR)


Liabilities from the purchase of hire-purchase and leasing objects                                         9.740                   10.524
Obligation to pass on payments received from portfolio management                                            890                    1.211
Other                                                                                                        102                     706


Total                                                                                                    10.732                    12.441




18. Liabilities due to affiliated companies
As in the previous year, liabilities due to affiliated companies include
liabilities from portfolio management due to MLQ Investors L.P, New
York/U.S.A.




30   Interim Report as at 30.9.2002/GFKL
19. Other accruals
Other accruals cover costs expected to arise from legal disputes. According                                      30.9.2002 (kEUR) 30.9.2001 (kEUR)
to IAS 37, the remaining amounts listed as accruals in HGB accounting
must be classified as liabilities and were therefore included under "Other           Inventory as of 1.1.                      170                      24
short-term liabilities from operations". For purposes of comparison, the             Consumption                                 20                       0
same procedure has been followed for the figures from September 30,                  Releases                                    45                       0
2001 and December 31, 2001.                                                          Additions                                   90                       0
    Accruals for litigation risks are referred to here. The amount was
calculated on the basis of empirical values from previous years. For this            Inventory as of 30.9.                     195                      24
reason, the exact amount and due date cannot be concretely determined.


Liabilities
The long-term and current liabilities of the Group as of September 30,
2002 are presented in the following table according to their maturity:



                                                         less than 1 year          1 to 5 years             more than 5 years            Total
                                                         (kEUR)                    (kEUR)                   (kEUR)                       (kEUR)


Liabilities due to banks                                           35.162                   6.571                    987                        42.720
Leasing liabilities                                                16.151                 36.755                 1.998                          54.904
Trade accounts payable                                             10.732                        0                     0                        10.732
Liabilities due to affiliated companies                                 50                       0                     0                             50
Current liabilities from income tax                                   343                        0                     0                            343
Other liabilities                                                  33.599                   9.404                    359                        43.362


Inventory as of 30.9.                                             96.037                 52.730                 3.344                        152.111



The current liabilities from income tax refer to tax liabilities from Universal-
Leasing-GmbH and DarFin Verwaltungsgesellschaft GmbH.
    Comments on the remaining individual items included in the current
and long-term liabilities are provided above and below respectively.




                                                                                                                           GFKL/Interim Report as at 30.9.2002   31
20. Other short-term liabilities from operations
The other short-term liabilities from operations are divided as follows:


                                                                                                            30.9.2002 (kEUR)       30.9.2001 (kEUR)


Obligation to pass on payments within the Compass program                                                        10.051                    0
Hornitex                                                                                                          5.673                    0
Customers with credit balances                                                                                    4.598                2.245
Loan ERGO                                                                                                         3.702                    0
Royalties, bonus and holiday liabilities                                                                          2.952                  203
Outstanding invoices                                                                                               939                   334
Wage and church tax payable                                                                                        670                   387
Security deposits received                                                                                         487                   895
Social security contributions payable                                                                              331                   224
Lease Receivables Funding Company Ltd., Jersey                                                                       0                 2.299
Other                                                                                                             4.196                2.459


Total                                                                                                           33.599                 9.046



The obligation to pass on payments refers to client payments passed on            Receivables Funding Company Ltd. was repaid by GFKL Mobilien GmbH
to Compass at the beginning of October.                                           and included in the ABCP program. In February 2002, the commitment
     In the business year 2001, a large part of the refinancing by Lease          was repaid in full by GFKL Mobilien GmbH.




Long-term liabilities


21. Leasing liabilities from refinancing
For refinancing purposes, the Group sells its receivables from existing           The long-term leasing liabilities from refinancing have developed as
leasing installments and/or agreed residual values to various refinancing         follows:
institutions, either individually or in packages. Furthermore, the refinanc-
ing of the receivables is mapped via bank loans. As of September 30,              Long-term leasing liabilities
2002, receivables with a total value of 10,897 kEUR were sold to refi-
nancing institutions and 44,007 kEUR were refinanced by means of bank                                            30.9.2002 (kEUR) 30.9.2001 (kEUR)
loans. In accordance with IAS, both refinancing methods are booked as
leasing liabilities.The proportion of leasing liabilities from refinancing with   Forfaited installments                   6.746          4.576
a residual term of less than one year is balanced under current leasing           Forfaited residual values                 651            154
liabilities. Please refer to the relevant notes.                                  Refinanced installments
                                                                                  and residual values                     31.356         27.589


                                                                                  Inventory as of 30.9.               38.753            32.319



32   Interim Report as at 30.9.2002/GFKL
Thereof with a residual term > 1 year and < 5 years                           The proportion of leasing liabilities from refinancing with a residual term
                                                                              of up to one year is balanced under current leasing liabilities from
                               30.9.2002 (kEUR) 30.9.2001 (kEUR)              refinancing.
                                                                                  Up to September 30, 2002, the lion’s share of all (long-term and
Forfaited installments                  5.220                4.570            current) receivables from the leasing business was refinanced by means
Forfaited residual values                 651                  154            of forfeiting via the ABCP programs. The refinanced long-term receivables
Refinanced installments and                                                   from installments and residual values, which have increased considerably,
residual values                        30.884               27.243            come from the initial financing of contracts that will be securitized
                                                                              (forfeited without recourse) in the coming months under the auspices of
Inventory as of 30.9.                 36.755               31.967             the ABCP programs.



Thereof with a residual term > 5 years

                               30.9.2002 (kEUR) 30.9.2001 (kEUR)


Forfaited installments                  1.526                      6
Forfaited residual values                    0                     0
Refinanced installments and
residual values                           472                  346


Inventory as of 30.9.                   1.998                  352




22. Liabilities due to banks
The long-term liabilities due to banks comprise loans held at the                                            30.9.2002 (kEUR) 30.9.2001 (kEUR)
Sparkasse Essen from funds of the Deutsche Ausgleichsbank. The leasing
receivables refinanced by these loans are booked as part of the leasing       Term to maturity > 1 year
liabilities.                                                                  < 5 years                               6.571                  1.058
                                                                              Term to maturity > 5 years                987                    687


                                                                              Inventory as of 30.9.                   7.558                  1.745




23. Deferred taxes
According to IAS 12, differences from the assessment in accordance with       Taking these premises into account, the development is as follows:
IAS and the tax law evaluation in the individual financial statements of
the affected corporations, which will be settled in the following years,                                     30.9.2002 (kEUR) 30.9.2001 (kEUR)
must be considered as deferred taxes or accruals in view of their effect on
corporation tax and business tax. The effects must be dealt with on the       Inventory as of 1.1.                    4.072                  1.722
basis of the anticipated tax rates that are to be used at the time of the     Change in the reporting
differences being settled. A corporation tax rate of 25 % and a 5.5 %         period                                  4.378                  1.943
solidarity surcharge were taken into account. It was assumed that the tax
rate for business tax would be calculated at a flat rate of 18%.              Total                                   8.450                  3.665



                                                                                                                    GFKL/Interim Report as at 30.9.2002   33
24. Other long-term interest-bearing liabilities
The other interest-bearing liabilities (security deposits) are organized as
follows:
                                                      Less than 1 year        1 to 5 years             More than 5 years          Total
                                                      (kEUR)                  (kEUR)                   (kEUR)                     (kEUR)


Security deposits received from leasing/hire
purchase business                                                 347                  1.332                    224                       1.903
Portfolio admin. security deposits received                       140                   360                     134                        634
Loan ERGO                                                       3.702                  7.713                       0                   11.415


Total                                                          4.189                   9.405                    358                    13.952


The current share of the security deposits received (less than 1 year) is
booked under "Other short-term liabilities from operations".




25. Special reserve for investment allowances
The special reserve for investment allowances was created in accordance                                       30.9.2002 (kEUR) 30.9.2001 (kEUR)
with § 247 section 3 HGB in connection with § 2 InvZulG (German
Investment Subsidy Law) and will be paid off linearly over the remaining        Inventory as of 1.1.                        7                     91
time period of the objects benefited. The expenses from the allocation to       Allocations                                 0                      0
the special reserve for investment allowances were included in the other        Amortizations                               6                     31
operating expenses, while amortizations were listed under other operating
income.                                                                         Inventory as of 30.9.                       1                  60




26. Financial instrument reporting
Risk of interest changes:                                                       due dates and that an early termination fee will always be charged or
In order to assess the risk of interest changes, the financial instru-          paid in the case of premature paying-off of receivables or liabilities.
ments are basically subdivided into those with fixed and those with                  There is only a limited number of financial instruments with
variable interest rates in accordance with IAS 32.                              variable interest rates; these exist for the pre-financing of asset pools
    For the fixed-interest financial instruments – these comprise all           for the purposes of a later final refinancing of leasing receivables
leasing receivables and leasing liabilities and/or the loan liabilities         planned as part of a securitization. In these cases, the risk of interest
congruent with the timelines as well as the forfeited hire-purchase             changes is compensated by an interest swap, from which losses from
receivables not covered in the consolidated balance sheet along with            interest rate changes must be balanced and profits must be trans-
their refinancing liabilities – a fixed interest rate is agreed for the         ferred. All interest hedging instruments outside the stock market are
entire term. GFKL Mobilien GmbH refinances business deals through               contracted solely with banks of first-rate financial standing.
purchasing receivables or credit lines fundamentally congruous with                  Furthermore, the risk of interest changes is limited to the very
the timelines and approaching the end of the agreement period.                  short time period between the promise of financing to the customer
    The risk that the value of these receivables and liabilities might          and payment of the refinancing by the refinancing bank. Depending
change in the case of varying interest rates is compensated by the fact         on the interest scenario, interest hedging instruments commonly used
that all receivables and liabilities are kept in the portfolio until their      in the market are applied to compensate the remaining risk.



34   Interim Report as at 30.9.2002/GFKL
    Financial derivatives are used for security purposes for business deals     subjective elements. For the most important refinancing institutions, they
already booked. Commitments to secure undecided or expected business            form the basis for the swift settlement of the transaction through block
deals or commercial positions for the purpose of speculation are not            refinancing. The data requested in the scoring systems and also the
entered into.                                                                   analysis functions saved are regularly monitored and adapted to market
    Since the beginning of the business year 2001, the company has              conditions. In this way, the existing risk management systems guarantee
carried out measures to secure interest rates on the basis of interest          the continuous monitoring and early control of relevant risk fields.
swaps. These business deals were made with Deutsche Bank AG, Frank-                 Since August 2002, the RiskCalc rating tool from Moody’s KMV has
furt a.M., as well as with Westdeutsche Landesbank Girozentrale,                also been used when doing business with major and individual customers.
Düsseldorf. The swap deals were concluded exclusively to secure actually        The rating, which calculates the individual probability of default and is
existing variable-interest liabilities. They comprise the current initial and   based on an analysis of the balance sheets and income statements,
intermediate financing lines at banks as well as refinancing through the        enables both a direct assessment of the company’s credit standing and a
ABCP programs Compass and Tulip. As of September 30, 2002, the                  classification within the sector in question. Each rating is additionally
interest swaps had a volume of 420.8 million EUR                                furnished with detailed analysis ratios.
                                                                                    The collection of receivables via the debit transfer system by debit
Currency risks:                                                                 order makes it possible to analyze the liquidity and payment behavior of
Currency risks are changes in the value of balance sheet items caused by        the customers, allows a largely automated dunning process and the
alterations in foreign exchange rates.                                          creation of patterns for a direct, supportive dunning process by telephone.
    At no time during the business years 2001 and 2002 did the Group            In the business year 2001, a call center was set up to further reduce the
hold foreign currency stocks; neither did it generate or hold receivables in    reaction time when payment disruptions occur. A legal department very
foreign currencies or enter into liabilities in foreign currencies. Further-    well-equipped in terms of staff and work technology supports the pursuit
more, the Group does not hold shares in foreign companies that might            of legal remedies in the efficient handling of nonperforming commitments
cause paper profits or paper losses in the case of exchange rate adjust-        and cases of fraud, and ensures the transfer of technical information and
ments affecting the valuation in the consolidated balance sheet.                know-how between external legal advisors and the employees of the
                                                                                legal department of the company.
Creditworthiness and credit risks:                                                  A large part of the entire receivables portfolio of GFKL Mobilien
Taking over credit risks in the Group is a core business and also a core        GmbH and the entire receivables portfolio of Universal-Leasing GmbH
competence of the leasing sector. In contrast to the banks, GFKL Mobilien       were refinanced by forfeiting. Here the credit risk is transferred to the
GmbH and Universal-Leasing-GmbH can view object risks and customer              forfeiting bank; GFKL Mobilien GmbH only bears a risk in the case of
risks as a single unit. The above-average third-party sales value of the        business refinanced by loans.
investment goods financed by the company allows greater flexibility when            The credit risk otherwise arising in connection with the investment of
taking over credit risks. The risk of default is nevertheless limited by        liquid funds is limited by the fact that the Group only cooperates with
defining target customers, investment assets and contract constellations.       partners of irreproachable credit standing. Moreover, the derivative
The vote of the sales employee who provides the customer with long-             business does not mean a significant credit risk, since business deals are
term service on site is still an important element of the credit decision. A    only concluded with partners with a first-class credit rating. This require-
risk-sensitive system assessing customer creditworthiness fosters appro-        ment must be met independently for the securitization of receivables from
priate risk consciousness among the sales staff, thus balancing the usual       the leasing business.
conflict of interests between sales department and credit department.
Unexpected situations that do not follow any predefined concept are thus
recognized early and subsumed into the criteria of the credit decision
process.
    Risk measurement is carried out using quantitative data and qualita-
tive classifications. The existing scoring systems are continually being        Shareholders’ equity
developed further in cooperation with the company’s big refinancing
institutions. They take into account all available data about the customer,     With regard to the changes in shareholders’ equity, we refer to the
the object to be financed, additional securities, and, if appropriate, the      consolidated statements of changes in shareholders’ equity as well as to
creditworthiness of the customer’s security provider. Thus statements           the explanatory notes below. The dates listed correspond to the dates of
concerning the quality and temporal development of the default risk can         entry into the company’s commercial register.
be made as early as the preliminary stage of a business deal. The struc-
ture of a financing scheme is modeled from early on to ensure that the
maximum risk of default and its temporal development meet the desired
criteria. These objective, sometimes individualized scoring systems
(depending on the refinancing institution) cannot be influenced by



                                                                                                                       GFKL/Interim Report as at 30.9.2002   35
27. Subscribed capital
A capital increase already initiated in 2001 consisting of 1,350,065               With the entry of the capital increases into the Commercial Register,
shares sold at an issue price of 10.40 EUR was concluded on being              the share held by indirect partner Goldman Sachs, New York, decreased
entered into the Commercial Register on March 20, 2002. The subscribed         from 46.5% to 32.8% of the subscribed capital. 19.7% of the subscribed
capital was thus increased by 1,350,065.00 EUR.                                capital is held by ERGO Versicherungsgruppe AG. The remaining shares
     Another capital increase of 2,833,371.00 EUR, concluded on March          are spread between German private investors; most of the shares
20, 2002, became effective on being entered on May 9, 2002. The issue          (11.68 %) are held directly or indirectly by members of the executive
price per share was 11.40 EUR.                                                 board and the supervisory board and their families.




28. Capital reserves
A premium of 42,158 kEUR flowed to the company as a result of the              were balanced with the capital reserves in accordance with SIC 17. In this
capital increases carried out in the first half-year.                          context, income tax amounting to 424 kEUR accrued, and was included
     The costs of 646 kEUR incurred when effecting the capital increases       directly in the shareholders’ equity in accordance with SIC 17.9.




29. Retained earnings
According to § 150 AktG (German Stock Corporation Law), one twentieth          to distribution of profits corresponds to the right of 6,000 shares (former
of the annual net income diminished by an accumulated loss carried for-        shares at par valued at DM 5 each). The profit certificate participates
ward from the previous year is added to the revealed legal reserves until      fully in the losses of the company, and in the case of liquidation or
the legal reserves and the capital reserves according to § 272 Section 2       settlement will be honored after all other creditors and coequally with the
No. 1-3 HGB together reach one tenth (or a higher percentage defined in        shareholders. The unlimited profit certificate can be cancelled at the end
the statutes) of the capital stock (subscribed capital). Furthermore, the      of the business year by GFKL AG after giving six months’ notice. However,
retained earnings include the profit certificate emitted in 1998. The own-     no cancellation has yet been effected. The holder of a profit certificate has
er of the profit certificate is the shareholder MLQ Investors L.P. (MLQ),      no right of cancellation.
New York/USA. At that time, the profit certificate gave MLQ the capital
majority, but not the majority of votes. The profit certificate with a nomi-
nal value of 15 kEUR was issued with a premium of 10 kEUR. The claim




36   Interim Report as at 30.9.2002/GFKL
30. Conditional capital
The shareholders’ meeting of July 4, 2001 authorized the executive board        the last 10 trading days before the day of issue of the option right
to emit up to 900,000 blocks of subscription rights on shares of GFKL           (allocation date), and at least equal to the closing price on the day of
Financial Services AG (hereinafter referred to as option rights) to             emission of the option right.
selected employees by July 4, 2006. Members of the executive board and              The option right may only be exercised if at any time prior to being
the managing directors of associated companies will each receive a              exercised, the value of the GFKL share on the basis of the valuation on
maximum of 20%, other employees will receive a total maximum of 60%             the Frankfurt Stock Exchange was equal to at least 110% of the basic
of the option rights. These option rights will be granted in two annual         price (exercise limit). Furthermore, blocking periods exist before and after
tranches, beginning from 2002.                                                  the announcement of quarterly or annual figures. As no stock exchange
    The issue price per share when exercising the option right is equal to      listing has yet been effected, no option rights have been granted so far;
the basic price plus an agio of 10% of the basic price, however no less         neither have they been recorded in the balance sheet.
than the attributed sum of the subscribed capital accounting for one                The option rights can be exercised not earlier than two years after the
share. The basic price is in principle equal to the average closing price of    date of their allocation. They expire no later than seven years after the
a GFKL share in the XETRA trading system or in a comparable successor           respective date of issue.
system replacing the XETRA system on the Frankfurt Stock Exchange in




31. Authorized capital
With the approval of the supervisory board and under revocation of the              However, in all a maximum of up to 10% of the shares may be sold
previously existing authorized capital, the shareholders’ meeting of May        against cash or emitted against cash deposit, including the authorization
28, 2002 authorized the executive board to increase the company’s sub-          to buy own shares for other purposes listed under item 8 of the agenda
scribed capital by issuing up to 7,000,000 no-par shares payable to the         of the shareholders’ meeting of May 28, 2002.
holder against cash deposits and/or tangible assets once or several times           Finally, the executive board is authorized, with the consent of the
until May 27, 2007; however the increase may not be more than                   supervisory board, to exclude the option right of the shareholders in the
7,000,000.00 EUR.                                                               case of a capital increase against cash deposits of up to 5,000,000.00 EUR
    Shareholders must be granted an option right. However, the executive        (up to 5,000,000 shares payable to the holder without nominal value
board is authorized to exclude residual amounts from the shareholders’          (no-par-shares)), provided that in the framework of an initial stock
option right with the approval of the supervisory board. Moreover, in the       exchange listing of company shares, the new shares are signed by
case of capital increases against cash deposits, the executive board is         members of a consortium of banks or an individual bank with the
authorized with the approval of the supervisory board to exclude the            obligation to place and spread the shares widely by public offer within the
shareholders’ option right for an increase of up to a total of 10% of the       Federal Republic of Germany or with investors abroad.
subscribed capital at the time of efficacy and at the time of the exercise          This change in the statutes was entered into the Commercial Register
of entitlement to available subscribed capital, in order to emit new shares     on June 26, 2002.
at an issue price not significantly lower than the stock market price.




32. Contingent liabilities
Contingent liabilities result from the takeover of directly enforceable guar-   nomic risk corresponds to the risk of a refinanced hire-purchase agree-
antees that were taken over for various customers in order to make pos-         ment. As of September 30, 2002, the contingent liabilities added up to
sible corresponding bank financing for the purchase of objects. The eco-        1.9 million EUR (September 30, 2001: 1.4 million EUR).



                                                                                                                       GFKL/Interim Report as at 30.9.2002   37
V. Details relating to the consolidated income statement

1. Sales
The division of sales among the segments "Movables Leasing" and                 leasing, the sales income relating to the leasing sector of Proceed
"Financial Outsourcing" can be seen from the segment reporting                  Securitization Services GmbH (1,344 kEUR) was listed in the movables
attached to this document. In order to be better able to compare sales          leasing sector of the following representation.
income from the leasing sector against the corresponding expenses for                 The sales are assigned to the following sectors:



                                                                                                                30.9.2002 (kEUR)                  30.9.2001 (kEUR)


Income from finance leases                                                                                              183.269                     110.287
Income from operating leases                                                                                                      0                       0
Income from sales                                                                                                        48.962                      13.057


Total income movables leasing                                                                                          232.231                      123.344


Service fee                                                                                                                3.291                      2.851
Incentive fee                                                                                                              1.975                        299
Reimbursement of expenses                                                                                                     208                     2.774
Fee income from sales                                                                                                      7.527                      2.159
Other income financial outsourcing                                                                                            993                       138


Total income financial outsourcing                                                                                       13.994                       8.221


Sales income from the holding                                                                                              7.570                      5.255
Consolidation of the Group’s internal sales                                                                             -13.754                       -6.880


GFKL Financial Services AG Group Total                                                                                 240.041                      129.940


                                                                                      The volume of receivables administered in each case and/or the
The largest proportion of the Group’s sales comes from the leasing              number of individual receivables managed for a customer vary because of
sector. This proportion affects the result to a very small degree only, since   the different type and quality of the receivables. The necessary servicing
the sale of the financed objects of new business has to be balanced as a        intensity for the various portfolios also varies significantly – but not
transit item in the sales and, at the same time, as an expense from the         necessarily the amount of income received from one particular mandate.
purchase of goods*. However, the growth of the sales in the leasing             The administration of very large loan and credit portfolios is, for example,
sector reflects the continually very positive development of new business.      carried out more or less automatically, while comparatively small portfo-
The financial outsourcing sector obtains its sales from inventory-dependent     lios consisting exclusively of nonperforming receivables require intensive
and success-dependent fees as well as from one-off payments for special         manual servicing, even though the income potential may be equally high.
operations. Inventory-dependent compensation is received for the                Therefore neither the number of individual receivables administered nor
administration of recurring receivables and the management of commit-           the total receivables volume administered is significant for the growth of
ments with payment irregularities. Moreover, fees are charged for the           business in the financial outsourcing sector, but rather the number of
physical and technical integration of portfolios into the administrative        mandates serviced.
system.                                                                               Since the foundation of Proceed Portfolio Services GmbH, it has been
     In addition, this sector receives success-dependent payments from          possible to constantly increase the number of mandates and thus the
the handling of nonperforming commitments and the post-leasing busi-            income from this division.
ness for leasing contracts nearing the end of their term as well as from              Further information about the division of sales according to business
special operations such as the cancellation of loans. In this way, the Group    units can be found in the segment reporting (see VII.)
participates directly in the client’s success and achieves an optimization      * Please refer to the explanatory notes on the leasing business

of service quality by bringing different interests into line.



38   Interim Report as at 30.9.2002/GFKL
2. Other operating income
This item comprises in particular fees collected through the commercial
dunning procedure, indemnities, amortization of accruals and income
from the disposal of the Group’s own tangible fixed assets.




3. Income from the settlement of the negative difference
The income from the settlement of the negative difference results from the
"fair value step-up" (cf. point 14).




4. Leasing expenses
The leasing expenses mainly come from the purchase of leasing objects for
new business as well as from the use of goods when selling returned
leasing objects and additional securities:
                                                                                                      30.9.2002 (kEUR)             30.9.2001 (kEUR)


Purchase of leasing objects                                                                                   183.246                  110.250
Expenses for disposal of leasing objects/securities                                                            50.643                    13.437
Leasing expenses for double-barreled transactions                                                                  21                         92
Group consolidation                                                                                               -36                           0


Total                                                                                                         233.874                 123.779


The expenses for disposals relate to objects taken back from prematurely     very small number of contracts from a double-barreled financing
terminated and cancelled commitments from the existing portfolio.            agreement concluded with Müting GmbH & Co. Handels- und Leasing-
    The leasing expenses from double-barreled transactions result from a     gesellschaft, Erfurt, in 1997.




5. Personnel expenses
Due to the substantial staff increase and the acquisition of Universal-
Leasing-GmbH, personnel expenses have increased compared to the time                                              30.9.2002             30.9.2001
period between January 1, 2001 and September 30, 2001. The develop-
ment in personnel is shown in the following overview, divided into           Movables leasing                            194                    109
business units:                                                              Financial outsourcing                        83                        64
                                                                             Staffing and other                           85                        66


                                                                             Employees as of 30.9.                      362                     239
                                                                             Employees on average                       343                     214



                                                                                                                     GFKL/Interim Report as at 30.9.2002   39
6. Other operating expenses
The other operating expenses consist of the following:
                                                                                                        30.9.2002 (kEUR)           30.9.2001 (kEUR)


Third-party services                                                                                           11.442                    5.320
Allocation to accruals for bad debts (for receivables)                                                          7.488                    1.071
Commissions paid                                                                                                1.583                       553
Rental and premises expenses                                                                                    1.311                       831
Legal, counseling and audit expenses                                                                            1.197                       436
Motor vehicle expenses                                                                                          1.078                       842
Amortization of assets                                                                                            796                       415
Realization expenses                                                                                              717                       339
Postage, telephone and office supplies                                                                            506                       714
Advertising costs                                                                                                 281                       208
Travel, training, entertainment expenses                                                                          242                       138
Information fees                                                                                                  141                        61
Membership dues and insurance premiums                                                                            130                       147
Bank charges and fees/ancillary refinancing costs                                                                 125                        99
Freelance costs                                                                                                   112                        77
Third-party services and consulting costs for software development                                                105                       755
Other                                                                                                             658                       601


Subtotal                                                                                                      27.912                   12.607
Consolidation                                                                                                 -11.855                    -5.388
Total                                                                                                         16.057                     7.219



The other operating expenses have increased with the growth of new              the general deterioration in payment behavior were also considered when
business in the leasing sector and the expansion of the financial               determining the accruals for bad debts.
outsourcing sector. This increase corresponds to the rise in the number of          Commissions have increased significantly as a result of the strong
employees caused by the considerable growth in business and the rein-           growth in new business and the marketing structure of Universal-Leasing-
forcements which were correspondingly necessary in the staffing areas.          GmbH.
     The third-party services largely consist of the company’s services             In contrast to the commercial accounting standards, appropriations
(e.g. controlling, auditing, personnel) for the subsidiaries; however, these    to general accruals for doubtful debts relating to trade accounts receiv-
are neutralized in the consolidation process.                                   able for which no provision has been made may not be listed under this
     Because of the significant growth of the receivables portfolio, the risk   item. The IAS regulations strictly forbid the formation of general accruals
accruals were increased on the basis of individual agreements. Further-         for doubtful debts.
more, the emerging negative economic developments in Germany and




40   Interim Report as at 30.9.2002/GFKL
7. Other interest income and similar income
Other interest income and similar income was distributed as follows:           A large part of the success from the conclusion of "finance lease"
                                                                           agreements is based on the difference between contractual interest and
                               30.9.2002 (kEUR) 30.9.2001 (kEUR)           refinancing interest realized in the course of approximately four years.The
                                                                           new business, which has increased once again, and the sale of leasing
Interest income from leasing                                               receivables to Compass and Tulip along with the related receipt of large
and hire-purchase                    48.434              20.727            parts of the interest margin, in particular caused by the sale of almost the
Other                                    464                697            whole receivables portfolio of Universal-Leasing-GmbH to the Tulip
                                                                           program, is largely reflected in the interest income.
Total                                 48.898             21.424                The other interest income concerns interest from agreements where
                                                                           payment has been effected before the actual availability of the object
                                                                           towards the middle or end of the calendar month. Moreover, it includes
                                                                           interest on outstanding payments for commitments with payment irreg-
                                                                           ularities, interest on extensions once extensions were arranged, and also
                                                                           interest on credit from current accounts at banks.




8. Interest expenses and similar expenses
Interest expenses mainly refer to the refinancing costs from the leasing       The increase in interest expenses is largely a result of the increased
and hire-purchase business.                                                financing volume due to the addition of Universal-Leasing-GmbH. As a
                                                                           result of the sale of almost the whole receivables portfolio of Universal-
                               30.9.2002 (kEUR) 30.9.2001 (kEUR)           Leasing-GmbH to the Tulip program, these expenses will decrease in
                                                                           future.
Interest expenses for
refinancing                           13.340               6.420
Interest expenses for early
payment                                   82                 680
Other interest expenses                  356                 222


Total                                13.778               7.322




                                                                                                                  GFKL/Interim Report as at 30.9.2002   41
9. Amortization and depreciation of intangibles and tangible fixed assets

The regular depreciation and amortization developed as follows folgt:


                                                                                                              30.9.2002 (kEUR)                    30.9.2001 (kEUR)


Acquired software                                                                                                             91                               88
Software designed in-house                                                                                                  490                               261
Goodwill                                                                                                                    188                                  5


Total depreciation and amortization of intangibles                                                                         769                               354


Motor vehicles/lorries                                                                                                      152                                  8
Furniture and fixtures                                                                                                      533                               234
Low-value fixed assets                                                                                                        56                               38


Total depreciation and amortization of tangible fixed assets                                                               741                               280


Total*                                                                                                                  1.510                                634



     The goodwill largely results from the purchase of Universal-Leasing-           Unscheduled amortization was not necessary.
GmbH. In addition, goodwill resulted from the disclosure of hidden
                                                                              * The difference of depreciation between the development of investment assets and the profit & loss
reserves at GFKL Mobilien GmbH in 1997 in connection with its spin-off
                                                                                statement as of 30.9.2002 are the result of the balance carried forward of Universal-Leasing-GmbH.
from the former Gesellschaft für Kommunal-Leasing GmbH & Co. KG.
Goodwill is amortized linearly over a period of 15 years.




10. Taxes on income
Tax expenses in the year 2002 have generally increased in line with                                                     30.9.2002 (kEUR) 30.9.2001 (kEUR)
earnings. Because of the differences between the tax result and the result
according to IAS, deferred taxes were set up for the temporary differences.   Actual taxes                                            343                         104
The taxes on income including the allocations to deferred taxes from the      Deferred taxes                                        5.316                      2.369
transfer of the tax results according to IAS consist of the following:
                                                                              Total                                                 5.659                       2.473



42   Interim Report as at 30.9.2002/GFKL
The following table shows the transfer of the theoretical tax expenses to
the taxes on income listed in the consolidated income statement:


                                                                                                              30.9.2002 (kEUR)           30.9.2001 (kEUR)


Earnings before taxes                                                                                               12.581                      5.880
Theoretical tax expenses at a theoretical tax rate of 38.89%                                                         4.893                      2.287
Change in theoretical tax expenses due to
       non-deductible expenses                                                                                         731                         161
       back taxes/reduced taxes (-) previous years                                                                       35                         25


Taxes on income                                                                                                      5.659                      2.473


    An expected average tax rate of 38.89% (trade tax 18%, corporate
tax 25%, solidarity surcharge 5.5% of the corporate tax) was used to
calculate the deferred taxes for the years 2001 and 2002.




11. Earnings per share of common stock
The earnings per share are determined on the basis of the consolidated                Earnings per share
net income and the number of shares at the Group’s parent company                     The average number of shares as of September 30, 2002 was determined
GFKL Financial Services AG. The average number of shares as of Septem-                as follows:
ber 30, 2002 was 12,474,431.15.


Beginning of period               End of period                    No. of days                      No. of shares                   Weighting


        1.1.2002                         19.3.2002                               78                       10.005.195                    2.858.627,14
       20.3.2002                          8.5.2002                               50                       11.355.260                    2.079.717,95
        9.5.2002                         30.9.2002                              145                       14.188.631                    7.536.086,06


Total 1st – 3rd quarters 2002                                                   273                                                  12.474.431,15



    In accordance with IAS 33, the earnings per share result from the divi-               As no option bonds and subscription rights were in circulation during
sion of the consolidated annual net income by the weighted number of sha-             the period covered by the report, it is not necessary to determine the
res (without considering the accumulated profits carried forward) as follows:         diluted earnings per share.


                                          30.9.2002           30.9.2001


Consolidated net income (kEUR)                  6.922              3.365
Weighted number of shares in units        12.474.431        9.283.529,8


Earnings per share in EUR                      0,55               0,36




                                                                                                                           GFKL/Interim Report as at 30.9.2002   43
VI. Explanation of individual items in the consolidated statements of cash flows

The statements of cash flows show how the cash assets of GFKL Financial      5. The acquisition of ULG was represented in the cash flow from
Services AG have changed over the report years because of cash inflow            investing activities less the acquired net resources to the total of
and outflow. In these statements of cash flows, the payment movements            3,581 kEUR. Together with investments in tangible assets to the
are organized according to operating activities, investing activities and        amount of 1,870 kEUR, this results in a negative cash flow from
financing activities (IAS 7). The following explanations are given:              investing activities of 5,451 kEUR. Due to the purchase of the loan
                                                                                 portfolio of DarFin Verwaltungsgesellschaft GmbH, no outflow of
1. The financial resources fund consists exclusively of cash and cash            resources occurred above the value of the identifiable assets. The
     equivalents.                                                                development of the negative difference was therefore represented in
                                                                                 the cash flow from operating activities.
2. The cash flow from operating activities contains the outflow from
     interest payments as well as the inflow from interest income related    6. In the first nine months of 2002, the cash flow from financing activ-
     to the leasing fund. In addition, the interest payments up to Septem-       ities was above all marked by the capital increase and the resulting
     ber 30, 2002 amounted to 356 kEUR, and the other interest income            inflow of resources. It was possible to increase the capital reserve by
     added up to 464 kEUR.                                                       39,571 kEUR, while the subscribed capital was increased by 2,833 kEUR.
                                                                                 A further 5,883 kEUR flowed to the Group from long-term loans. The
3. The cash earnings include interest income not affecting payment from          complete repayment of the existing refinancing agreement with
     gain on sale accounting, as well as the initial direct costs.               Lease Receivables Funding Ltd. in February led to an outflow of
                                                                                 2,872 kEUR. A total of 45,415 kEUR flowed to the Group from the
4. As of September 30 of this year, the Group had to record a negative           cash flow from financing activities.
     cash flow from operating activities of 4,792 kEUR. This development
     is caused by the ABCP program's cash reserve which has to be
     established (balance as of September 30, 2002: 26,467 kEUR). The
     leasing receivables and liabilities of ULG were represented as addi-
     tions to the leasing fund.




44   Interim Report as at 30.9.2002/GFKL
VII. Segment reporting
The business units are the company’s primary reporting format. Thus the
information required according to IAS 14 No. 50 ff. is given for the leas-
ing and financial outsourcing sectors existing in the company.
    The lack of geographical separation of the Group’s activities means
that reporting is only possible in the primary reporting format "Business
segments".
    The segment reporting is included as a special attachment to this annex.




VIII. Information about events since the accounting date

After the successful integration of Universal-Leasing-GmbH into the GFKL       its 54 staff generated just under 70 million EUR of new business.
Group, the executive board has decided to make further acquisitions to             In order to facilitate further growth in the leasing sector, the volume
promote its sound growth. On October 1, 2002, SchmidtBank Leasing              of the ABCP program with the West LB was increased by 50 million EUR
GmbH (SBL), Nuremberg, was successfully taken over from SchmidtBank            to 300 million EUR.
GmbH & Co. KGaA, Hof, by GFKL Financial Services AG at a purchase price            In the financial outsourcing sector, the purchase of a portfolio
of 5 million EUR.                                                              consisting of 250 legally enforceable loan receivables was successfully
    SBL has been active on the leasing market since 1987, and its              concluded by Proceed Securitization Services GmbH in October 2002. At
regional focus is on the South and East of Germany. In the last business       this time, the portfolio had a volume of 28 million EUR. The administra-
year, which came to an end on September 30, 2002, the company with             tion of the portfolio was taken over by Proceed Portfolio Services GmbH.




                                                                                                                     GFKL/Interim Report as at 30.9.2002   45
IX. Relations with affiliated companies and persons

1. Affiliated companies                                                           On February 2, 1998, Proceed Portfolio Services GmbH signed a
                                                                              service agreement with MLQ Investors L.P. for the PM portfolio. Proceed
     MLQ Investors L.P., New York/USA, an indirect wholly owned               Portfolio Services GmbH takes responsibility from MLQ Investors L.P. and
subsidiary of the Goldman Sachs Group, Inc., was the biggest shareholder      other companies for the handling and administration of the loan agree-
at the end of the third quarter of 2002, holding 32.8% of the shares.         ments in the portfolio. In addition to the reimbursement of expenses,
Since 1998, MLQ Investors L.P. has additionally held a profit certificate     Proceed Portfolio Services GmbH receives a fixed amount per adminis-
with a nominal value of 15 kEUR, which was emitted with a premium of          tered loan as a service fee, as well as performance-related compensation
10 kEUR and, in addition to the entitlement for an annual repayment,          dependant on the internal rate of return of the portfolio.
also securitizes a pro-rated participation in losses as well as a pro-rated       The Group has concluded service agreements with various parties for
share of income from a possible liquidation. In this context, reference is    the FKB/FL portfolio and the ABS transaction FAST 1999-1 Ltd. resulting
made to the remarks on retained earnings.                                     from this. The company received the order to administer all of the leasing
     The Group was responsible for the trust administration of the            and factoring receivables of Frankfurter Kreditbank GmbH (FKB) and
following receivables portfolios for the Goldman Sachs Group:                 Frankfurter Leasing GmbH (FL), both wholly owned subsidiaries of the
                                                                              ABN AMRO Bank (Deutschland) AG.
Development in portfolio volume by outstanding                                    A share of the receivables is owned by Frankfurter Mobilien Limited
receivables                                                                   (FML), St. Helier, Jersey, a wholly owned subsidiary of the Goldman Sachs
                                                                              Group, plus two other functional companies that are not affiliated with
                            30.9.2002 (kEUR)       30.9.2001 (kEUR)           the Goldman Sachs Group or the GFKL Group. The purchase price for a
                                                                              significant share of the receivables initially acquired by FML was financed
PM portfolio                         23.784               26.318              by an ABS transaction via FAST 1999-1 Ltd., St. Helier, Jersey. The receiv-
FKB/FL portfolio/                                                             ables thus securitized are held and administered in trust by The Chase
FAST 1999-1 Ltd.                     42.676              141.472              Manhattan Bank, London. Proceed Portfolio Services GmbH is taking over
                                                                              the administration of all agreements for all parties to this transaction,
Total                               66.460              167.790               especially the enforcement of rights from agreements, the collection of
                                                                              receivables and the administration of leasing objects as well as the sale
                                                                              of securities if necessary. For the administration of active agreements,
Development in portfolio volume by number of                                  Proceed Portfolio Services GmbH receives considerations depending on
agreements                                                                    the inventory and also on the degree of success, on top of the reim-
                                                                              bursement of any expenses.
                                30.9.2002            30.9.2001                    The company carries out its business activities on leased premises in
                                                                              Essen. The lessor is Grundstücksgesellschaft Limbecker Platz 1 GmbH. The
PM portfolio                          2.872                3.311              sole partner in this company is JAP Grundstücksentwicklungs- und
FKB/FL portfolio/                                                             Verwaltungsgesellschaft mbH, Essen. Members of the executive board
FAST 1999-1 Ltd                            930             4.877              and the supervisory board hold a total of more than 50% of the shares
                                                                              in the latter company. The boards of GFKL AG are at the same time
Total                                3.802                 8.188              managing directors of both the direct and indirect lessors.The offices, with
                                                                              a total area of 3,843 m2, are rented at a monthly rate of EUR 8.70 per
                                                                              m2, which, in the opinion of the company, is customary for the location.
                                                                              To this are added monthly advance payments for operating costs of EUR
                                                                              3 per m³. The lease agreement is valid until December 31, 2003.




46   Interim Report as at 30.9.2002/GFKL
2. Affiliated persons
The members of the supervisory board received compensation of 24 kEUR           In addition, the liabilities include claims to royalties for 2002
for their activities in the year 2001, in accordance with § 15 of the       amounting to 2,050 kEUR and royalty payments for 2001 amounting to
statutes of GFKL Financial Services AG, Essen.                              895 kEUR.
    For the period covered by the report, the total payments to the exec-       In the past business years, the members of the executive board did
utive board and the compensation claims of the members of the supervi-      not receive any option rights in addition to the total payments listed.
sory board covered by the statutes developed as follows:                    Mr. Joerg Sellerbeck was appointed member of the executive board on
                                                                            August 17, 2001.
                              30.9.2002 (kEUR) 30.9.2001 (kEUR)                 A portion of 11.68% of the shares is in the direct or indirect posses-
                                                                            sion of members of the executive board and the supervisory board and
Members of the executive                                                    their families.
board                                  1.054                 574
Members of the supervisory
board                                     18                   18


Total                                  1.072                  592




                                                                                                                  GFKL/Interim Report as at 30.9.2002   47
X. Information concerning the company’s organs
In the past business years, the executive board was composed of the
following members:


Members of the executive board                                                                 Appointed on   Retired on


Dr. Peter Jaensch, Bottrop (Chairman)                                                            13.8.1997     ––––––––
Dr. Tom Haverkamp, Herne                                                                          1.4.1998     ––––––––
Prof. Dr. Thilo Woern, Rostock                                                                    1.2.1998     30.6.2000
Joerg Sellerbeck, Lübeck                                                                         17.8.2001     ––––––––



In accordance with § 9 of the statutes, the supervisory board is
composed of three members. In the past business years, the supervisory
board was composed of the following members:


Members of the supervisory board                                                               Appointed on   Retired on


Peter Cirenza, Tokio                                                                             23.2.1999     23.1.2002
Mark Kogan, London                                                                               23.1.2002     ––––––––
RA Georg Friedrich Thoma, Neuss (Chair)                                                           1.4.1998     ––––––––
Prof. Dr. Michael August Adams, Bonn                                                             13.8.1997     31.3.2002
Dr. Franz Wilhelm Hopp, Düsseldorf                                                                1.4.2002     ––––––––



According to § 9 par. 2 of the statutes, the shareholder MLQ Investors
L.P. is entitled to dispatch one member to the supervisory board as long
as it holds at least one quarter of the company’s subscribed capital. MLQ
Investors L.P. has made constant use of this right since 1999.




Essen, 6. November 2002




Dr. Peter Jaensch                          Dr. Tom Haverkamp                Joerg Sellerbeck




48   Interim Report as at 30.9.2002/GFKL
Executive Board/
Supervisory Board
Directors Holdings




Shareholdings of the Members of the Executive Board*
                                                                             Dr. Peter Jaensch   Dr. Tom Haverkamp          Joerg Sellerbeck


Status 1.1.2002                                                                   597.597             559.727                        9.982


Purchase from Prof. Dr. Adams and family 4.2.2002                                       0                   0                        5.554
Capital increase 20.3.2002                                                              0                   0                        1.426
Capital increase 9.5.2002                                                               0                   0                              0


Status 30.9.2002                                                                  597.597             559.727                      16.962


* Including family members and shareholdings by asset management companies




Shareholdings of the Members of the Supervisory Board*
                                                                             Georg F. Thoma         Mark Kogan             Dr. Franz W. Hopp


Status 1.1.2002                                                                   470.582                  0                               0


Capital increase 20.3.2002                                                         12.513                   0                              0
Capital increase 9.5.2002                                                               0                   0                              0


Status 30.9.2002                                                                  483.095                  0                               0


* Including family members




                                                                                                                GFKL/Interim Report as at 30.9.2002   49
Members of the Executive Board




                                           Dr. Peter Jaensch (Chief Executive Officer)
                                           Dipl. Kaufmann/MBA (GB)


                                           Dr. Peter Jaensch (35 years of age) received his doctorate in economics from the Carolo Wilhelmina
                                           University of Brunswick, Germany, in 1999. After completing his studies in business administration in
                                           Essen in 1995, he earned an Master of Business Administration (MBA) at Bradford University in 1997. In
                                           1992, Dr. Jaensch was a co-founder of GFKL. Since then, he has significantly contributed to the
                                           company’s development.With the transformation of the company into a stock corporation, Dr. Jaensch was
                                           appointed member of the management board of GFKL Financial Services AG on August 13, 1997. Dr.
                                           Jaensch is responsible for the Leasing Division and for the staff functions Business Development, Marketing,
                                           Investor Relations and Internal Auditing. Dr. Jaensch is also a member of the supervisory boards of Prisma
                                           Health AG, Conenergy AG, Essen, and EGIB Immobilien GmbH, Essen.



                                           Dr. Tom Haverkamp (Chief Financial Officer)
                                           Dipl. Informatiker, Chartered Financial Analyst


                                           After completing a degree in information technology at the Technical University of Munich in 1988, Dr.Tom
                                           Haverkamp was employed with Arthur Andersen & Co. Unternehmensberatung (since renamed Accenture) for
                                           two years. In 1990, he began his doctoral studies at the Schweizerisches Institut fuer Banken und Finanzen at
                                           the Hochschule St. Gallen, where he received a PhD in Business Administration in 1992. In addition, Dr. Haver-
                                           kamp gained the qualification of a Chartered Financial Analyst (CFA). Dr. Haverkamp was active in the growth
                                           of the Company from 1992 to 1994. In the meantime, he accepted a position as Stock Portfolio Manager in
                                           the Asset Management Division of the investment Bank of J. P. Morgan in Frankfurt am Main. In 1997 he was
                                           appointed Manager of the Shares and Mixed Portfolios Division. In April 1998, Dr. Haverkamp was appointed
                                           as a member of the executive board of GFKL Financial Services AG. He is responsible for the Financial Out-
                                           sourcing Division and for the staff functions Finance and Information Technology. In addition, Dr. Haverkamp
                                           is a member of the supervisory board of IDV AG, Munich.



                                           Joerg Sellerbeck (Chief Operating Officer)
                                           Dipl. Kaufmann/MBA (USA)


                                           After completing his apprenticeship with Deutsche Bank Joerg Sellerbeck studied business administration
                                           at the University of Essen and Clemson University, South Carolina, USA. Besides his studies in Germany in
                                           1993, Mr. Sellerbeck established the accounting department of the GFKL Group. Later he worked for
                                           Deutsche Bank Securities in New York and KPMG in Leipzig. In 1996, Mr. Sellerbeck joined the Strategic
                                           Services Group of Andersen Consulting (since then renamed Accenture) where he worked on various projects
                                           with Financial Institutions and major industrial companies. After returning to the GFKL Group in 1999, Mr.
                                           Sellerbeck became responsible for the Finance and Accounting division. On August 20, 2001, he was
                                           appointed member of the Executive Board of GFKL Financial Services AG and is responsible for Accounting,
                                           Organization, Controlling, Risk Management and Human Resources.



50   Interim Report as at 30.9.2002/GFKL
Members of the Supervisory Board




                         Georg Friedrich Thoma – Chairman (since 1.4.1998)
                         Mr.Thoma has been the managing partner and a member in the Mergers & Acquisitions Group of Shearman
                         & Sterling since 1991, the Managing European Partner from 1994 until 2000 and from 2000 a member
                         of the firm’s Executive Group. Mr. Thoma practices primarily in the areas of corporate law, mergers and
                         acquisitions, corporate restructuring and privatizations. He acts as counsel for German and international
                         industrial corporations, banks and insurance companies as well as investment banks in international and
                         cross-border mergers and acquisitions and other transactions. Mr. Thoma published articles on legal topics
                         in various publications.



                         Peter Cirenza (till 23.1.2002)
                         Peter Cirenza is managing director of the Goldman Sachs Group, Inc. He was responsible for the invest-
                         ment of Goldman Sachs in GFKL Financial Services AG. In 1999, Peter Cirenza managed the largest mixed
                         asset transaction to date (EUR 714 million) within the German leasing industry which was closed together
                         by Goldman Sachs and GFKL Financial Services AG.



                         Prof. Dr. Michael August Adams (till 31.3.2002)
                         Since 1997, Dr. Michael Adams is heading the Institute of Business Law – private law division at the
                         University of Hamburg and is counselor of the federal German government. He practices in the areas of
                         the economic analysis of law, corporate law and finance. Under his governance a number of laws and
                         changes to existing laws have been invented such as the KonTraG.



                         Mark Kogan (since 23.1.2002)
                         Mark Kogan is Managing Director of Goldman Sachs International, and co-head of the firm’s European
                         Structured and Principal Finance Group. He is also one of four Managing Directors that form an Operating
                         Committee that manages the firm’s global Mortgage Department. In 1985, Mark Kogan joined Goldman,
                         Sachs & Co.’s Real Estate Department in the Investment Banking Division following his graduation from
                         the Harvard Business School. In 1994, Mark Kogan transferred to the Mortgage Department in the firm’s
                         commercial mortgage securitization and trading business. Prior to moving to the firm’s London office in
                         2000, Mark Kogan was co-head of the Whole Loan Desk in the Mortage Department.



                         Dr. Franz Wilhelm Hopp (since 1.4.2002)
                         Since 1997, Dr. Franz Wilhelm Hopp has been a member of the executive board of ERGO Insurance Group
                         AG. He is responsible for the Finance Division of the ERGO group of companies. With total assets in the
                         amount of 90 Billion Euro, ERGO Insurance Group is among the biggest institutional investors in Germany.
                         With MEAG and ERGO Trust Dr. Hopp controls another important division for institutional investors. For
                         decades, Dr. Hopp has gained experience in the management of capital investments. In addition, Dr. Hopp
                         holds the office of the Asset Management Societies Commission and is a Member of the Capital Invest-
                         ment Committee of the GDV.



                                                                                               GFKL/Interim Report as at 30.9.2002   51
GFKL Financial Services AG
Limbecker Platz 1
45127 Essen



Investor Relations
Phone: + 49 (0) 2 01/102 -1111 oder 1113
Fax: + 49 (0) 2 01/102 -1199
E-Mail: ir@gfkl.com


Public Relations
Phone: + 49 (0) 2 01/102 -1111 oder 1113
Fax: + 49 (0) 2 01/102 -1199
E-Mail: pr@gfkl.com

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:21
posted:7/19/2011
language:English
pages:54