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Annual Report and Accounts – 2002
CCR Logistics Systems AG
The Figures at a Glance
2
Group Employees (1996-2002)
Costs (1996-2002)
Group Turnover/Gross Earnings (1996-2002)
1996 1997 1998 1999 2000 2001 2002
35
30
25
20
15
10
5
0
500
0
-500
-1000
-1500
-2000
7
6
5
4
3
2
1
0
60
50
40
30
20
10
0
1996 1997 1998 1999 2000 2001 2002
1996 1997 1998 1999 2000 2001 2002 1996 1997 1998 1999 2000 2001 2002
Profit after Tax / EBIT / EBITDA (1996-2002)
Other
Depreciation
Human Resources
Key Group Figures in € x1000 2002 2001 2000 1999 1998*
Turnover 23,745 21,205 16,525 13,140 9,215Gross Earnings 4,340 4,601 3,574 2,615 1,874EBITDA - 35 - 723 - 928 - 221 311EBIT - 926 - 1,804 - 1,875 - 996 238Profit / Loss - 1,223 - 1,727 - 1,588 - 1,088 73Cash Flow** 1,025 - 504 - 2,338 3,401 –Costs 5,854 6,893 5,857 3,709 1,720Included: Depreciation 891 1,080 948 774 73
Human Resources 2,478 3,171 2,681 1,289 754Other Costs 2,485 2,642 2,228 1,646 893
Liquid Funds 1,664 660 1,143 3,482 81Equity ratio 47.9 55.9 70.1 69.8 –Yield on Turnover - 4.9 - 8.5 - 11.4 - 8.2 0.8Number of Shares 7,008,500 6,758,000 6,758,000 6,758,000 –DVFA/share (EPS) - 0.11 - 0.16 - 0.13 - 0.12 –Share Price at End of Year in € 1.25 1.00 2.90 2.50 – Dividend 0 0 0 0 –Workforce 37 39 55 27 17
* CCR Components Recycling GmbH ** Change in level of funds with effect on payments
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Contents
Page 4: Company Portrait
Page 5: Foreword from the Chief Executive
Page 7: Supervisory Board’s Report
Page 8: CCR Supervisory Board
Page 9: CCR Executive Board
Page 10: CCR – Media Comments and References
Page 11: Group Overview
Page 13: Restructuring and Diversification
Page 19: Human Resources and Welfare Area
Page 20: Quality and Environmental Management
Page 21: Market Developments
Page 22: CCR on the Stock Exchange
Page 23: Outlook
Page 24: Corporate Governance Declaration
Page 24: Financial Calendar
Page 24: Press and Investor Relations
Page 25: Company and Group Situation Report
Page 30: Group Financial Statement
Page 32: Group Profit and Loss Account
Page 34: Financial Statement
Page 36: Profit and Loss Account
Page 37: Annexes (Company and Group)
Page 44: Summary of Investments
Page 45: Report according to Segments
Page 46: Summary of Group Capital Assets
Page 47: Auditor’s Certificate
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Company Portrait
CCR Logistics Systems AG (ISIN: DE0007627200) actsthroughout Europe as a manager and developer of wastematerial recovery and disposal systems. With core com-petences in operative logistics, disposal managementsoftware and consulting, CCR offers quality-assured, reverse-logistics networks for expert disposal and recy-cling in four business areas: automotive, electronics,construction and facilities.
CCR’s services strengthen its clients’ business activitiesin their core areas by developing sustainable, flexiblesolutions in response to specific logistic requirements. Itis CCR’s aim to be a leading provider of comprehensive,high-quality disposal and recycling services in Europe.
Ladies and Gentlemen,
Germany is currently in the fourth year of a stagnatingeconomy, exacerbated by structural problems of its ownmaking. The ability of German industry and commerce,despite economic and fiscal policy shortcomings, to with-stand recessive tendencies until now is all the moreremarkable.
The business areas in which CCR operates, includingwaste material disposal and recycling from automotiveworkshops, building and construction logistics, were notimmune from these economic trends in 2002. Althougha drop in motor-vehicle registrations led us to anticipatea weakening of business in the motor-vehicle repair andreplacement parts area, the market shares of CCR’sclients in fact rose overall compared with the previousyear. In addition, CCR expanded further by acquiring newclients, and statutory requirements also became morestringent, for example the European Union’s directive ofend-of-life vehicles and the disposal of automotive parts,which has now been put into effect as new German end-of-life automobile legislation and which has had the effectof stimulating demand for specific services as offered byCCR.
A further market for CCR services, the construction in-dustry, is still in a recessive condition. Here the pressureof competition has led to more marked demand for cost-reducing logistics, a situation from which CCR was ableto benefit. In the building logistic services area, the trendfor hotel chains to contract disposal services to providersof complete system solutions has grown. CCR has beenable to benefit from this and register its first successesin this still-young market.
Reverse-logistics systems, e. g. for old electrical applian-ces or one-way packaging materials, are a marketsegment with excellent future prospects for companiesoperating in this area. According to a survey undertakenby the Deutsche Bank, companies that do not committhemselves to this area will be exposed more strongly toincreased competition and the resulting concentrationprocess in the disposal and recycling industry; in otherwords, the days of the classic garbage collecting truckare numbered.
This confirms that CCR’s strategy in the past ten yearshas been correct: waste elimination as a logistic process,managed as a complete entity. The resulting flexibilityand the specific capabilities which this provides hasenabled us, for example, to bid for the clearing orga-nization that will have to be established on October 1,2003, when a nationwide return system for one-waypacks is to be introduced. Regardless of the contractdecision that is taken, this is evidence that a companysuch as CCR, which is able to establish tailor-madeconsortia to undertake such projects, is in a position todeliver rapid, flexible results at minimum cost.
Ernst Friedrich Schumacher’s economic metaphor,according to which the holes in the hull of a large shipcannot be patched up indefinitely, but security is onlyavailable by switching to a larger number of small ships(hence “small is beautiful”) conforms with the self-sustaining business principle practised by CCR. Theformation together with partners of integrated, quality-assured reverse-logistics networks has comparativeadvantages of both an ecological and an economicnature.
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Foreword from the Chief Executive
CCR’s vision of redefining the waste disposal and recy-cling market in a logistic context, using modern web-based communication techniques, has given it a leadover its competitors. It has also enabled CCR to dis-sociate itself from the general pattern of market deve-lopment which, as waste disposal quantities havedecreased, has incurred more severe competition and areduction in margins to cover costs. This strategy ofimplementing overall core competence and in particularoffering companies with a system of branches or sub-sidiaries an accurately structured reverse-logisticnetwork, was developed further in 2002, and it provedpossible to expand the advisory services and softwaredevelopment areas of competence successfully.
We are assuming that the increasing demand for ourconsulting services in future markets (for example returnsystems for end-of-life electronic equipment from 2005on) will have a positive effect on our long-term position-ing even now. With this in view, the ongoing developmentof CCR Logistics Systems AG into a return systemsmanager active throughout Europe, with three corecompetences – operative logistics, disposal managementsoftware and consulting services – in four business areas– automotive, electronics, construction and facilities –are a guarantee of successful corporate progress evenin times of economic weakness.
Munich, March 2003
Achim WinterChief Executive
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7
At the annual general meeting of shareholders on May14, 2002, three new members were elected to theSupervisory Board of CCR Logistics Systems AG:Friedrich Schneider, who was a member of the Board ofManagement of the mineral-water company AdelholzenerAlpenquelle GmbH in 2002, Dr. Christoph Stehmann andDr. Herbert Wörner, both currently independent businessconsultants with their offices in Hamburg and Munichrespectively. During the 2002 business year the enlargedSupervisory Board regularly advised the Executive Boardand monitored its business management activities. At anumber of meetings and on the basis of both verbal andwritten reports received from the Executive Board, theSupervisory Board was able to acquaint itself with thecompany’s situation, business progress and generalcorporate planning matters. Important business policyissues and specific individual procedures were discussedwith the Executive Board. These discussions wereconcerned with the commercial position of Groupcompanies and the ability to compete more effectively inthe individual business areas. Throughout 2002 theSupervisory Board received detailed and regular infor-mation on business progress at the foreign subsidiaries,and supports the Executive Board’s proposal for theirrestructuring. The establishment of a new company inSwitzerland was also approved in view of the presenceof orders from clients there. The Supervisory Boardwishes to thank the Executive Board and employees ofthe CCR Group for their excellent work in the difficultmarket situation encountered in 2002.
The Company’s and the Group’s annual report andaccounts for the period up to December 31, 2002 andthe combined situation report for CCR Logistics SystemsAG and the Group have been audited by PwC DeutscheRevision Aktiengesellschaft Wirtschaftsprüfungs-gesellschaft, which has issued an unrestricted audit certi-ficate. The Supervisory Board has inspected the annualreport drawn up by the Executive Board and the Groupannual report, and scrutinized the Group situation report.The audit reports from PwC Deutsche Revision wereavailable to all members of the Supervisory Board. Theauditors took part in the Supervisory Board’s meeting todiscuss the accounts on March 18, 2003 and reportedon the major findings of the audit. The Supervisory Boardapproves the results of the audit and also accepts theCompany and Group reports for CCR Logistics SystemsAG in respect of the 2002 business year as drawn up bythe Executive Board. The annual report and accounts arethus finalized.
The Supervisory BoardMunich, March 31, 2003
Count Ferdinand von SpiegelChairman of the Supervisory Board
Supervisory Board’sReport
Count Ferdinand von Spiegel studied law and took the second state examination for civil servants,after which he joined the Morgan Guaranty Bank in Munich, where his last position was that ofBranch Director. Since 1980 he has been a partner and general manager of the Mandatus GmbHfinancial services company, specializing in mergers and acquisitions and in private equity manage-ment. Count von Spiegel has been Chairman of the Supervisory Board of CCR LogisticsSystems AG since November 30, 1998.
Walter W. Sawallisch, a commercial studies graduate, has been a member of the SupervisoryBoard of CCR Logistics Systems AG since November 30, 1998. He worked for BMW asInternational Marketing Manager and was subsequently the Marketing General Manager of thenewly established BMW Japan Corporation from 1981 to 1988. On September 1, 1998 he estab-lished his own service company Sawallisch & Associates Ltd. which supplies financial and market-ing services and has offices in Tokyo, Hong Kong and Munich.
Karin Siegle-Kvarnström, a member of the CCR Logistics Systems AG Supervisory Board sinceMay 20, 2000, studied business management and economics in Paderborn, Münster and London,followed by PED in Lausanne. Her career began at the German reconstruction bank Kreditanstaltfür Wiederaufbau in Frankfurt, after which she moved to the A.T. Kearney business consultancyin Düsseldorf, where she specialized in logistics. Since 1990 she has been a partner at EgonZehnder International in Hamburg, where she manages the Service Practice Group with the mainfocus on logistics.
Friedrich Schneider was General Manager for Marketing and Sales, Technical Affairs andProduction at the mineral water company Adelholzener Alpenquellen GmbH until the end of 2002.Before this he was General Manager of the baby food sales company HiPP GmbH & Co. VertriebKG for five years and previously a member of the Board of Management of the Paulaner BrauereiAG brewery in Munich for fifteen years, including ten years as its Chief Executive until he movedto Hipp in 1991.
Dr. Christoph Stehmann studied business management and then joined McKinsey & Co. as anconsultant in Düsseldorf, Hamburg and New York. In 1997 he moved to the Danzas freight hand-ling company with responsibility for marketing and sales in the Eurocargo (land-based Europeantransport) division. Following the acquisition of the land-based transport activities of NedlloydB.V., he became General Manager of the German Eurocargo division. Dr. Stehmann is currentlyactive as an independent consultant.
Dr. Herbert Wörner began his professional career at the BASF chemical company, after whichhe became Chairman of the Board of Management of a company in the metalworking industryuntil 1977, when he moved to Robert Bosch GmbH, joined the Board of Management of theJunkers division and later directed the Austrian Robert Bosch GmbH company in Vienna. From1987 until 2000 he was Chief Executive of Bosch-Siemens Hausgeräte GmbH (BSH), the domes-tic appliance manufacturer. Dr. Wörner is currently an independent business consultant.
Supervisory Board of CCR Logistics Systems AG
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Achim Winter has been Chief Executive of CCR Logistics Systems AG since November29, 1998, and established CCR Components Recycling GmbH in 1991. He was previouslythe owner of a transport company which he established while he was still a student. Heis an acknowledged specialist in logistics networking. He and his brother together holdabout one third of the CCR share capital.
Susanne Momberg, Member of the Executive Board with responsibility for HumanResources and Finance, trained in transportation matters and studied transportation mana-gement in Heilbronn. She was employed by Nixdorf, NEC and Avnet as Financial Controllerand Manager, then joined CCR in 1999 as Commercial Manager. She was appointed tothe Executive Board of CCR Logistics Systems AG on April 1, 2000 with responsibility forFinancial Affairs and Human Resources.
Executive Board of CCR Logistics Systems AG
9
Shareholder structure of CCR Logistics Systems AG at end of 2002
WIHA GmbH ............................................................................................ 33.3%Hydrogenion AG ...................................................................................... 11.1%Existing shareholders .............................................................................. 11.1%S & A GmbH ............................................................................................ 7.1%Supervisory Board ................................................................................... 6.4%Funds ....................................................................................................... 1.0%
Free float .................................................................................................. 30.0%
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CCR – Media Comments and References
11
In the 2002 business year, CCR Logistics Systems AGachieved a turnover of 23,745 thousand € (T€) comparedwith the previous year’s figure of 21,205 T€.1 Previousyear’s figures are shown in brackets. The loss accordingto EBIT (T€ -926) was reduced by half compared withthe previous year (-1,804). The EBITDA result improvedto T€ -35 (from -723).
On the cost side, depreciated claims at the Italian andBritish subsidiaries accounted for T€ -520. Without thesewrite-offs, the Group would have recorded a profit in thelast quarter of 2002. The 2002 cost figure for the Groupwas T€ -5,854 (-6,893), a reduction of T€ 1,039. Theparent company CCR Deutschland AG increased itsturnover by 19 percent to T€ 23,490 (19,714). Accordingto EBIT, CCR Deutschland AG earned a profit of T€ 1,119(524), a 114-percent increase.
At the end of December 2002 a new subsidiary wasestablished in Kreuzlingen, Switzerland, to servicedealers of new clients, Emil Frey AG (Switzerland’s largestimporter of motor vehicles) and BMW Switzerland, fromMarch 1, 2003 on. CCR expects its services to theseclients to generate an annual turnover of approximatelyT€ 500. The brands serviced by CCR in Switzerland,
namely Toyota, BMW, Subaru, Landrover, Kia, Jaguar andDaihatsu have gained it a 15-percent share of the work-shop waste elimination market from a standing start, asit were.
Prospecting for clients was stepped up in 2002 by otherEuropean national-market companies. CCR UK Ltd.began a pilot project with Peugeot in Great Britain tocollect waste from Peugeot dealerships throughout thecountry. After successful conclusion of this test phase,more extensive cooperation is aimed for. In particular witha view to the changes that are to be made to theEuropean Group Exemption Order, services for author-ized dealers that are organized centrally by the manu-facturer represent an additional incentive and also a linkbetween partners. Furthermore, the requirements ofEuropean end-of-life vehicle legislation compel manu-facturers and importers to introduce suitable disposaland recycling procedures. Peugeot can thus be seen asundertaking a pioneering function for other manufactu-rers on the British market, since it is facing up to itsresponsibility for the environment and society even beforethe EU directive becomes British law.
In Italy, in addition to local companies such as Norauto
Group Overview
CCR Logistics Systems AG - Group Structure
CCR Logistics Systems AG
88% 90% 100% 51% 100%
CCR Hispania CCR U.K. CCR Deutschland CCR Italia CCR SchweizS.A. Ltd. AG S.p.A. GmbH
1 If other earnings and turnover from CCR CENTERS not having to be allocated according to law to the CCR Group but also processed via theCCR Network are included, total CCR System turnover was T€ 32,628.
or Orecchia & Scavarda (Iveco), where waste collectionwas already taking place on an operative basis, newclients were secured in the form of the Italian subsidiariesof the BMW and Citroën automobile groups, and alsoBosch Car Systems. In addition to consultation on allquestions of waste elimination management and theintroduction of the necessary information-technologymethods, the waste collection system for these clients’individual car dealers and workshops is to be extendedin 2003. In addition, CCR has set up a telephone infor-mation service for these clients, capable of dealing with
all matters relating to waste disposal and recycling. CCRItalia S.p.A. also exhibited successfully at the Riciclawaste disposal and recycling trade rair in Rimini, held inthe second week of November 2002, where it was ableto sign a general agreement with Citroën.
This was also the first occasion on which CCR’s corecompetences and business areas were presented to thepublic as a new strategic positioning (see next section ofthis report for further details).
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New trade-fair display panels illustrated CCR’s strategic business areas and core competences
CCR’s stand at the RICICLA Trade Fair in Italy
In contrast to the hopes expressed by business analysts,the economic upturn antitipated for the second half of2002 did not take place. On the contrary, economic pros-pects have again become bleak since the last quarter of2002. However, despite the persistently unsatisfactoryoverall economic situation in Germany, the CCR Groupwas able to achieve its restructuring and repositioningobjectives. The earnings and turnover achieved in thepast year confirm the success of these measures. Sincemid-2001, activities abroad have been successfullyconsolidated and have created a foundation for futuresuccess. As well as consistent reductions in generaloverheads, they include the development of new links
with clients, for example Peugeot in England, Citroën inItaly and, in the case of the newly established Swiss sub-sdidiary, Emil Frey.In parallel with these developments, CCR has during thereview period pursued a strategy of structural diversifi-cation, which has grouped the available resourcestogether and greatly increased the company’s marketpenetration potential. In this respect, CCR adopted mid-way through 2002 a new business structure that takesthe form of a matrix of core competences and sub-sidiaries. Some examples of CCR’s activities in thesestrategic business areas will serve to illustrate the newconcept:
1. Software The interlinking of data flows and the formulation ofprocesses relating to the non-monetary economy in anelectronic data processing system are becoming in-creasingly important for the optimization of monitoringand control functions, but also as a means of ensuringthe clarity and security of processes in environmentallysensitive areas. The integration of all reverse-logisticschains and networks involves networking the real-worldprocess chains with their images in the virtual world ofinformation processing. The increasing complexity ofreverse-logistics services, as evident in the establishmentof system-integrating logistics services providers, hasled CCR to develop a web-based information technology
that permits the grouping together and reliable proces-sing of various waste management activities. The CCRnetwork allocates to the various partners those tasks thatthey are best capable of perfoming from the point of viewof optimum division of labor. The central CCR organiza-tion therefore devotes itself to general system develop-ment and also to the development and introduction ofreverse-logistics software. The licensees (the CCRCENTERS) in turn are responsible for the operativeprocessing of clients’ orders, including the provision ofbins, skips etc. and a local advisory service. Sincemodern “supply chain management” on both the supplyand disposal sides presupposes that all-embracing solu-tions must be found, the companies that will profit most
Restructuring and Diversification
13
Automotive Construction Facilities Electronics
Software Web-based order processing Web-based order processing Development of clearingand progress tracking system; and progress tracking system; and materials flowwaste depot management system planning of software for the management software forin Italy; internal electronic data German beverages pledge a return systemprocessing for materials flow clearing organizationmanagement (Quandis)
Consulting Help Desk; studies on the Planning the optimization of Logistic planning for Operations research on andisposal of light shredder- logistic processes in the Terminal II at Munich Airport; existing system for thefractions and motor-vehicle glass construction industry development of a clearing return of electronic com-in Europe; symposium on the and advising on organization for the return of ponents in Franceeffects of the ELV directive in building life-cycles a deposit on one-way Birmingham; advice on the beverages in Germanybuild-up of waste management-systems
Logistics Operative waste collection Separation of waste fractions Waste collection from Build-up of a Europeanfrom motor-vehicle workshops, and their disposal, con- factories, hotel chains and return system forfilling stations, tire dealers struction-site and road cleaning, administrative buildings electronic accessoriesand battery manufacturers logistic coordination, site
security and sanitary services
from forecast growth in the logistics industry will be thosecapable of undertaking the entire logistic value-addedchain including the associated flows of information.
By developing an order processing and documentationsystem operated via a web portal, the German and ItalianCCR subsidiaries have been able to offer their customersa process-oriented EDP system that even in the startingphase at the end of 2002 was able to link more than 2,000activity points with approximately 600 waste materialprocessors and 36 CCR CENTERS. The electronicnetwork created in this way reflects the actual reverse-logistic processes and also permits either decentral orcentral order management. The processes incorporatedinto this system call for a high level of experience andskill in the management of material flows and interfaces.Only by fulfilling these preconditions was it possible toconfigure software suitable for actual practice and com-bining ease of operation with high performance.
The step from exclusively internal use to the develop-
ment of software for third parties was a logical one. In2002 the RegistroWeb® waste depot managementprogram conceived for the Italian market and furthercentralized software services were made available to atotal number of users that has already reached approxi-mately 3,000. It not only permits EDP-aided registrationof depot movements but also combines this with thespecific requirements of Italian environmental protectionlaw in the “Modello Unico di Dichiarazione Ambientale”
(MUD). In addition, the program can be used to draw upenvironmental balance-sheets. In 2002, total salesproceeds in the software area from transactions withclients amounted to approximately T€ 420.
2. ConsultingThe second competence area, Consulting, faced its firstmajor challenge at the end of 2001 when logistic plan-ning for the new Terminal II at Munich Airport had to becarried out. The work was completed successfully earlyin 2002. In parallel with the introduction of the onlinesystems to which reference has already been made, a“Help Desk” was set up for clients that could be reacheddirectly by telephone during and on the Internet outsidebusiness hours, thus enabling advisory services to beaccessed at any time when questions of material dis-posal arose. In 2002 CCR also completed other con-sulting commissions, in some cases resulting from theneed to assess the problems likely to arise from newEuropean directives on the disposal of end-of-lifevehicles and electrical appliances. For a Japanese auto-mobile group, CCR conducted an investigation acrossEurope into the recycling situation regarding shredderfractions. A study on European glass recycling was alsoundertaken. Another consulting commission was toanalyze the tire disposal situation in Scandinavia. An in-vestigation of an existing system in France for the collec-tion of electronic components was also carried out anda cost reduction concept put forward. This developedinto a reverse-logistics order for Italy, Great Britain, Spainand Portugal, which will reach the operative stage in2003.
Another forward-looking project was an investigation ofthe possible effects of the European end-of-life returncommitment for electrical applicances (WEEE), underta-ken for a leading European group. The WEEE directive
Italian advertising poster offering CCR softwarefor electronic waste depot management
Electronicscrap – a
market for thefuture
14
15
has to be incorporated into member nations’ nationallegislation by 2005 in such a way that the operative returnof scrapped electrical equipment is assured by Augustof that year. This calls for immediate preliminary and plan-ning work, culminating in the build-up of a suitable logist-ical system from 2004 on. As with deposits on one waybeverages, CCR is preparing here too for a new marketto take shape.
For more than two years now, CCR has made itself readyfor the introduction of a system permtting one-way packsto be returned and a deposit recovered. A consortiumwas formed with two partners, the ClearingbankHannover AG and MRV Multi Reverse Vending GmbH.CCR realized at a very early stage the decisive factor insuch a return system is not so much reverse-logistics asclearing on a nationwide basis, assuming that this isintended to permit consumers to return their cans or PETbottles to any sales outlets, not only to those at whichthe product was purchased. CCR Logistics Systems AGand its partners in the European Clearing ReverseOrganization (ECRO) offer a neutral clearing system forthe compulsory deposit system introduced in January2003, and one to which the anti-trust authorities raise noobjections. The partners contribute specific knowledgeand skills: MRV GmbH is a manufacturer of automaticreturn machinery with profound knowledge of securitytechnology and interface management. ClearingbankHannover AG is a financial clearing specialist that posses-ses the bank status essential for the administration ofdeposits (third-party monies). CCR has many years ofexperience in the management of material flows for in-dustrial clients and excellent knowledge of the neces-sary EDP methods. The strict separation of financial clea-ring and material flow management demanded by theFederal German Monopolies Commission and the refu-sal to accept cost clearing are allowed for by the struc-ture proposed by the ECRO consortium. ECRO is admi-rably capable of building up and operating the Germanclearing organization if commissioned to do so by thefood trade and drinks industry. The knowledge that hasbeen accumulated in the past two years during prepara-tory work on this topic will most certainly be of benefit toCCR in the future, when end-of-life electrical equipmentdisposal management becomes acute.
As has already been pointed out, this market will be anall-European one from the very outset. To this extent the
CCR Group’s internationalization strategy, now that stepshave been taken to minimize losses, is of strategic impor-tance for the Group’s future. However, in 2002 consulting work was not only under-taken in the form of project-related advisory services orthe development of return systems and clearing points,but also included the organization of events such as theAutomobile Symposium held in Birmingham onNovember 1, 2002. CCR invited representatives from thegovernment, parliament, technical inspection authoritiesand vehicle manufacturers, associations and science todiscuss problems arising from the EU End of Life Vehicle
(ELV) directive and exchange views on how theseproblems could be solved. CCR representatives also tookpart in events concerned with environmental protectionand accompanied a delegation from the JapaneseEnvironment Ministry which came to Germany with theintention of learning more about economic recyclingpolicy. Although some of these activities cannot beshown to yield a quantifiable benefit, consulting servicesbased on contractual agreements none the less gene-rated an income of T€ 108 in 2002.
Consulting commissions often pave the way for follow-up orders in the operative logistics area. The appeal ofCCR’s activities in the waste management area lies in thecompany’s ability to supply a comprehensive service.
ELV – a new market for CCR
3. LogisticsOperative reverse-logistics is the largest source of turn-over within the CCR Group. The four business areas,Automotive (including Car Workshops/Filling Stations,Old Tires and Scrapped Batteries/Lead Recycling aspart-areas), Construction, Facilities and Electronics gene-rated a turnover of T€ 20,038 (16,992) during the reviewperiod.
3.1. Automotive
3.1.1. Waste collection from workshopsThis remains the most important part-area within CCR’sbusiness activities, contributing 70 % to turnover; itcomprises the work performed on behalf of clients suchas the Volkswagen Group, BMW, Toyota and the Essofilling stations.
Related to new motor-vehicle registrations in 2002, CCRhad a market share of 44.9 percent (43.7 percent in theprevious year). Income of T€ 14,473 represents anincrease of one-fifth on the previous year’s turnover ofT€ 12.341. CCR thus remains the undisputed marketleader in Germany. In the other European markets, CCR’smarket shares at the end of 2002 were one percent inSpain and the UK, five percent in Italy and 15 percent inSwitzerland. Further increases are anticipated for 2003in Italy in accordance with the market shares secured inJanuary and February by CCR’s clients (BMW, Citroën).With one exception, all of them were able to maintain orincrease their market shares in 2002.
An important precondition for the maintenance andexpansion of the CCR system in this business area iscustomer satisfaction with our services, which are anadvertisement for us and a yardstick for our quality. Byintroducing a new, ‘intelligent’ skip system for wastecollection from workshops in 2002, CCR took a furtherstep toward making waste management processes morestraightforward, transparent and reliable.
3.1.2. Old tiresSeveral new clients were obtained in Germany during2002. CCR will, for example, operate on behalf of theLandtechnischen Verbände Handel and Handwerk in
Comparison of absolute quantities (1998-2002)
1998 1999 2000 2001 2002
Glass scrap 7.345 4.556 6.984 4.992 6.589
Used oil, incl. hydraulic fluids 15.020 15.648 23.234 17.168 19.176
Old tires 5.083 8.002 17.172 19.120 27.440
Building scrap (concrete,asbestos, soil, slag) 6.104 45.149 60.748 2.955 15.034
Lead (batteries, wheel balance weights etc.) 6.773 9.876 15.997 17.830 19.823
Chemicals (dyes, brake,fluid, paints, antifreeze, acids, lyes) 5.206 4.904 7.023 7.533 3.955
Iron and steel 712 10.693 8.330 1.304 21.749
Electrical scrap 547 1.051 1.434 1.459 1.519
Trade waste 699 1.714 6.276 6.832 9.260
Wood 1.188 2.137 2.910 1.670 3.121
Plastics (foil, bumpers, (mixed 2.956 3.945 12.938 4.641 2.414
Air cleaner elements 757 2.086 4.514 3.484 1.379
Non-ferrous metals (copper, aluminum etc.) 237 1.207 1.697 385 278
Waste containing oil (fuelsand lubricants, oil filters, oil sludge, slurry and emulsions) 8.939 17.526 25.707 18.045 22.909
Paper and board 9.964 6.159 10.774 19.023 22.336Other waste fractions 128 722 734 250 156
Total (metric tons) 71.658 135.375 207.472 126.691 177.138
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Glass scrapUsed oil, including hydraulic fluidOld tiresBuilding scrap, concrete, asbestos, slag etc.Lead (batteries, wheel balance weights etc.)Chemicals (dyes, brake fluid, paints, anti-freeze, acids and lyes)Iron and steelElectrical scrap
Trade wasteWoodPlastics (foil, bumpers, mixed)Air cleaner elementsNon-ferrous metals (copper, aluminium etc.)Waste containing oil (fuels and lubricants, oilfilters, oil sludge, slurry and emulsions)Paper and boardOther waste fractions
Bayern (the Bavarian Agro-technical Trade and CraftAssociations in Bavaria) and dispose of old tires and ‘clas-sic’ workshop waste material. There are about 800 indi-vidual members of these associations from whom mate-rial must be collected. In addition, old tires have beencollected and disposed of on behalf of the PneuhageService GmbH company, which has 35 retail tire salesoutlets. In North Germany, CCR conveys secondary rawmaterials and other substances to the end-users as partof its waste disposal activities for an old tire processingcompany – a further example of how the CCR networkcompletes the cycle of materials. Disposal of old tires isone of the most rapidly growing segments in theAutomotive division and was able to match the success-ful progress it enjoyed in the previous year.
With a turnover of T€ 2,216 (2,101), 400 out of a total ofsome 5,000 tire dealers in Germany were being servedby CCR by the end of 2002, a market share of eightpercent. This makes CCR the second-largest old tiredisposal company in Germany following REG, a sub-sidiary of tire manufacturer Continental AG. In 2002, CCRdisposed of 27,440 metric tons (19,120 t) of old tires, anincrease of 43.5 percent.2 If the weight of old tires dis-posed of in Germany annually is 600,000 metric tons,CCR’s share by weight is then 4.6 (3.2) percent.
3.1.3. Scrapped batteriesIn the scrapped battery area, CCR Deutschland AG hassince mid-2002 been organizing the return system for a
starter battery manufacturer, Johnson Controls. Morerecently, a start has been made on removing and collec-ting traction batteries and stationary equipment for thebattery manufacturer Hoppecke.
In 2002, 182,000 metric tons of lead were used in theproduction of batteries in Germany, 90 percent of whichwere recycled material. The scrapped batteries collec-ted by CCR therefore supply rather more than 12 percentof the German market for secondary lead from batteryrecycling. In 2002, 19,823 (17,830) metric tons of leadwere passed on for recycling, in most cases from starterand traction batteries and stationary plants. Turnoverfrom battery logistics and the reprocessing of lead wasT€ 2,043, 30 percent higher than in the previous year(1,575).
3.2. ConstructionThe CCR construction-industry logistics concept com-prises management of organizational sequences on site,including the coordination of suppliers, consultation onthe building’s logistical concept after completion, accep-tability checks in accordance with social insurance andindustrial law, sanitary services, safety and site cleaning,and last but not least waste fraction separation, alloca-tion of waste material according to origin and classicdisposal of waste. Evidence is available that the CCRsystem saves clients up to one percent of the construc-tion cost compared with conventional waste disposalconcepts.
The current crisis in the construction industry has led toincreased demand for services such as CCR offers, inother words which are capable of reducing costs. Initialsuccess has been achieved with these concepts by theMax Bögl and Leonhard Weiss construction companies.The disposal or cables and other construction-industryscrap for Kabel Deutschland GmbH is also developingpositively. Turnover in this business area went up in 2001by 548 percent to T€ 1,058 (164), thus regaining the levelwhich it had attained in 2000, that is to say before thisbusiness area was restructured.
3.3. FacilitiesTurnover in the Facilities division in 2002 was T€ 228
The Automotive division is CCR’s most important businessarea. Material is being collected here from Volkswagen
17
2 The turnover stated here only includes amounts from clients in this segment. The tonnage relates to the volume achieved by the Automotivedivision. A proportion of the earnings not shown here is therefore to be found in the workshop waste material disposal area.
18
(271), a drop of 16 percent. This is explained by the factthat the Deutsche Post, was previously shown as aFacilities client but is now included more logically underAutomotive. (CCR collects waste material from theDeutsche Post AG’s motor-vehicle workshops.)
In addition to waste disposal from the Juvena company’splant (residue from the production of cosmetics) and clas-sic building logistics (for example as supplied to DeTeImmobilien), initial progress in the field of waste collec-tion from hotel chains has been promising. CCR has beenable to add a further hotel chain, Tryp Hotels (Sol MeliáGroup) to the Austrian Astron Hotels which it alreadyserves, and estimates that this market will continue todevelop positively in the next review period. Hotel wastedisposal is a particularly challenging task in view of theneed to avoid interruptions and comply with hygienicrequirements. Typical waste fractions include glass,paper and board, fats, food scraps and residual garbage.Here too, CCR has developed a system for the efficientlogistical control of the extensive waste disposal pro-cesses needed by the hotel trade. A special aspect ofthe service offered by CCR is that all the activities in-volved come from a single source and are offered at astandard that reflects the special character of the hotelbusiness.
As an extension to the CCR service for the completionof material cycles, CCR Deutschland GmbH has begunto collect waste material from BSB Recycling GmbH, asubsidiary of B.U.S. Berzelius Umwelt-Service AG, inclu-ding residual slag from the scrapped battery recyclingprocess (e.g. salts). These are reprocessed into subsoilstabilizers for land recultivation projects.
4. The business areas’ proportions of CCR Groupturnover
Part of the CCR Group’s strategy is to generate growthin turnover and income by securing new markets andmarket shares in existing business areas. This also re-duces the level of dependence on individual areas of in-dustry and commerce and thus represents a strategy ofrisk minimization. The “Miscellaneous” or “Other reverse-logistics” shown in 2000 and 2001 has been deleted in2002, and chemical waste disposal work from the Juvena,Auwa Chemie and Eckstein companies’ plants is nowincluded under Facilities. Earnings achieved as a resultof the conclusion of contracts in the software or con-
sulting areas, on the other hand (that is to say indepen-dently of consultation in the course of an operative agree-ment) have been shown separately in the accounts forthe first time.
The proportions of turnover refer only to operativeearnings in the various business areas. They amountedto T€ 20,566 in 2002, to T€ 16,992 in 2001 and toT€ 11,806 in 2000.
Business areas in % 2002 2001 2000Automotive, including:
Workshops, filling stations 70 73 77
Old tires 11 12 2
Scrap batteries 10 9 9
Construction 5 1 9
Facilities 1 2 1
Consulting, Software, other 3 3 2
2001 business areas, proportion of CCR Group turnover
73% car workshops
12% old tires
9% scrap batteries
1% Construction
2% Facilities
3% miscellaneous
70% car workshops
11% old tires*
10% scrap batteries*
5% Construction
1% Facilities
1% Consulting*
2% Software*
2002 business areas, proportion of CCR Group turnover
*Earnings based on a contract with the client
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At the end of the year the CCR group employed a staffof 37. This total was again lower than in the previous year,reflecting the jobs saved by restructuring at the Europeansubsidiaries. In the German companies (CCR Deutsch-land AG and CCR Logistics Systems AG), 30 employeeswere counted at the end of the account period (2001:23); staff at the European subsidiaries went down from16 to 7. During 2002 the average number of staffemployed by the German companies was 29 (2001: 26).For the foreign companies, this value was 8 (2001: 21).Employees made active use of the qualification and train-ing measures offered to them; these measures help toensure the continued high quality of our services in thefuture.
In the previous review period the Group’s employees andmembers of its Executive and Supervisory Boards wereoffered CCR shares at a price of 1€. On March 1, 2002the Supervisory Board released € 250,500 of approvedcapital with shareholders’ subscription rights excluded,for this purpose, thus increasing the capital of CCRLogistics Systems AG from € 6,758,000 to € 7,008,500;this change was entered in the trade register onSeptember 20, 2002. This step is to be understood notleast as a gesture of thanks to employees who were andremain loyal to the company in times that were not always
easy. 40 percent of these shares were taken up byDr. Herbert Wörner, Member of the Supervisory Board,as a sign of acceptance and approval for the CCRGroup’s business concept and vision of the future.
Human Affairs and Welfare Area
CCR CENTERS and their trucks – reliable partners for local industry
in Germany and Great Britain
A BMW employee disposes of old car glass ina CCR collecting skip. (BMW factory photo)
As evidence of the high quality and environmentalmanagement standards realized by CCR, we submitregularly to a certification process carried out by externalinspectors. In December 2001, CCR Logistics SystemsAG and CCR Deutschland AG were re-certified againaccording to DIN ISO 9002 and DIN ISO 14001 with noprovisos. The next certification is due to take place inFebruary 2003.
As long ago as 1995, CCR guaranteed, as a signatory tothe Bavarian Environment Pact, that its waste disposalsystem would comply with environmental standard ISO14001. All CCR CENTERS are rated as specialist wastedisposal operations in accordance with the 1995 FederalGerman Specialist Waste Disposal Company Order(EfBV), and are certified directly by the technical inspec-tion organizations.
All CCR CENTERS are audited regularly by CCR’s headoffices to ensure that environmental protection and statu-tory waste disposal standards are being maintained andto maintain the quality of their relationships with clients.With the aid of our integrated management and qualitysystem, the degree of target achievement is monitoredand opportunities for improvement are examined. CCRrequires the CCR CENTERS’ intermediate storagedepots for instance not only to satisfy building laws butalso to be approved in accordance with the more strin-gent immission protection regulations. The mutually highstandards which CCR imposes on its CCR CENTERSwith regard to the quality and safety of their waste hand-ling activities lead to ongoing improvements to the inte-grated waste management system.
The advantages of the CCR network for customersoperating internationally are that they have one contactpartner and can also expect German standards of qualityto be applied in all the countries concerned. This is animportant factor in the extension of the CCR networkthrough Europe, where a further 14 CCR CENTERS inItaly, Spain and Great Britain are now in operation in addi-tion to the 27 current CCR CENTERS in Germany.
Since CCR was established in 1991, the focal point of allCCR services has been precautionary, integrated activity.
The recycling concept as an element in CCR’s corporatepolicy encourages the company to set up closed mate-rial handling cycles wherever possible. For example, usedoil, vehicle’s wheel arch liners, brake fluid, antifreeze,starter batteries and even bumpers are collected fromCCR’s clients and recycled to yield materials that are thenincorporated wholly or partly into new products. A con-sequence of these agreements with clients is that “down-cycling” is reduced to a practicable minimum, in otherwords no significant deterioration in the quality of thematerial occurs during the recycling process. If the custo-mary downward spiral in the quality of the material canbe avoided, it is no longer necessary to incinerate ordump it at the end of the material cycle. CCR is alwayslooking for ways of recycling material in accordance withthe uses to which it was originally put. We regard en-vironmentally compatible and commercial aspects ascomplementary elements in the complete picture. Partof CCR’s outsourcing policy is to use its services to offerclients additional value in the ‘soft’ factor area as well,so that they can be employed for image enhancementpurposes (e.g. environmental protection, sustainability).
The EuropeanCCR network
Quality and Environmental Management
20
In accordance with § 11 of the German Packaging Orderdated August 21, 1998, CCR collects packaging mate-rial on behalf of industrial clients (e.g. board, carton,plastics, sheet metal and wood) and passes them on forrecycling in order to maintain the quotas laid down bylaw. CCR possesses considerable experience in this fieldof materials flow management.
It is well known that failure to comply with re-usable packquotas led, following various court cases, to the intro-duction of a compulsory deposit on one-way packs (the‘can pledge’). The quantities concerned, which werepartly disposed of until now by way of the so-called ‘DualSystem’ and partly discarded carelessly as litter, thusdefacing the environment, are now to be handled by newsystems. Together with cooperation partners, CCR hasdeveloped a clearly structured clearing system that iseasy to manage, equipped with all the necessary safetyprecautions, moderate in cost and equitable in charac-ter. The system provides all the services needed for clear-ing of the cash deposits and provision of the proofs calledfor by law.
Since the early 1980s the automobile industry has beenworking on concepts to reduce the variety of materialsused in its products and make them more suitable forrecycling. In 1995, BMW was the first manufacturer tojoin forces with CCR in introducing concepts aimed atcreating closed material cycles for workshop waste. Theend-of-life vehicle legislation that came into force in July2002 obliges motor-vehicle manufacturers to bear thecost of disposing of vehicles returned to them for scrap-ping. In accordance with the EU directive on which it isbased, this legislation not only applies to ‘end of life’vehicles but also to replacement and exchange parts andto workshop waste. Manufacturers are therefore requi-red to make suitable country-wide vehicle returnnetworks available to their dealers. Another developmentthat will change the conventional pattern of automobileworkshop waste disposal is the Group Exemption Order,also based on European law; this is because the largeautomobile manufacturing groups are keenly interestedin retaining the loyalty of their dealerships by offeringthem additional services, one of which is central mana-gement of waste material from the dealers’ workshops.
December 2002 saw the promulgation of the Europeandirective on Waste Electrical and Electronic Equipment(WEEE), which calls among other things for suppliers totake back ‘white goods’ (e.g. refrigerators), ‘browngoods’ (e.g. hi-fi systems) and IT and telecommunicationproducts (e.g. mobile phones and computers). As alreadymentioned, CCR’s European positioning and the effi-ciency of its systems make it an ideal outsourcing part-ner for manufacturers and importers. The value of themarket for old electrical appliance disposal within theterritory of the European Union is estimated at one billionEuro at least. Although implementation of the WEEEdirective cannot be expected before 2005, CCR is alreadyoffering the appropriate systems for this task to be carriedout internationally, and was able to conclude some signi-ficant consultancy agreements in 2002.
The tendency to ‘Europeanize’ high-quality wastemanagement services will continue. By virtue of its inter-nationalization strategy, CCR has been able at an earlystage to acquire experience in the build-up of reverse-logistical networks in other European countries. Theparallel trend, namely networking via the Internet and theintegration of market participants into the system bymeans of economic partnership models, has been takeninto account by CCR with its successful development ofreverse-logistical software and by building up the CCRnetwork logistics. CCR is therefore in a strategicallysound position for the future.
Market Developments
Europe –CCR’smarket
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Investor relations is an element in corporate communi-cation that represents an important added-value factorfor the company. CCR shares (International SecurityIdentification Number DE0007627200) are regarded asthe financial world’s forecast regarding the future of thecompany and, as a consequence of this, its creditwort-hiness. An increase in corporate value influences theconditions under which capital can be raised via the stockexchange but also financing outside the stock market.By means of a credible information policy we endeavorto retain the loyalty of our shareholders. We maintaincontact with the media, analysts and sources of collec-tive capital by supplying them regularly with informationin the form of press releases, quarterly reports and copiesof our annual report and accounts in German and English.
In accordance with a voluntary agreement concludedwith the Bavarian Recommended Issues Market, weissue two-language ad-hoc bulletins in accordance withthe requirements of § 15 WpHG, though in the meantimean order issued by the Federal German Financial ServicesInspection Authority (BAFin) prohibits the use of the term“ad hoc” for this purpose. None the less, in the interestsof our shareholders we continue to comply with thecommitment represented by the “ad hoc” bulletins. Thissubstitute service for the financial world is now dis-tributed via the Corporate News channel of the DGAP orthe Deutsche Presseagentur (dpa).
Trading in CCR shares takes place within the Xetrasystem and on the Munich, Frankfurt and Hamburg stockexchanges. The total number of bearer shares is7,008,500, approximately 30 percent of which were in thehands of small investors at the end of 2002. During thatyear, the CCR share price fluctuated between € 0.80 and€ 1.60. The lowest price was reached in July, the highestin mid-June. At the end of the calendar year the pricewas € 1.25, 25 percent higher than at the beginning ofthe year. In the trade magazine Logistik Inside (01/2003)the CCR share was rated the second-best for 2002among the 100 largest logistics shares when assessedaccording to increase in value.
The EuroStoxx 50 chart clearly illustrates the worldwideweakening on the stock markets due to political uncer-tainty factors and a loss of confidence in stocks andshares as a method of investment. This latter develop-
ment was stimulated by accounting scandals thatbecame known from March 2002 on, involving suchcompanies as Enron and Worldcom, but also because ofa number of insolvencies on the New Market. By the endof 2002, German shares had lost on average 40 percentof their value at the beginning of the year. Economic deve-lopments in ‘Euroland’ contributed significantly to thisunfavorable mood. Growth in 2002 failed to reach onepercent. Germany was at the bottom of the list in Europein this respect, and this was reflected on its stockmarkets. High social security payments and taxes,together with increasing burdens on the economy suchas the higher cost of labor led to private consumptiondwindling and with it the willingness to purchase stocksand shares.
CCR shares were only able to avoid this trend to a limi-ted extent; this is evident in the drop in transactions toan average of 4,000 shares per day. The CCR share nonethe less demonstrated its strength: those who investedin it at the beginning of 2002 incurred no loss by the endof the year. Agreed, the shares have lost 62 percent oftheir value compared with the issue price at the end of
1999, but within thesame period the DAXindex went down by 58and the NEMAX 50index by as much as 93percent. The situationwithin the CCR Groupfollowing fundamentalrestructuring representsa good starting point fora rise in the CCR shareprice in 2003.
The CCR share price in 2002
CCR on the Stock Exchange
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The steady increase in our turnover will continue in 2003.The structural improvement in our earnings situation thatbegan to materialize in the last quarter of 2002 will yielda positive result in the coming year as a result of success-ful restructuring measures in our foreign business area.
We anticipate further growth in the Automotive,Construction and Facilities areas in view of the ordersituation. We shall start to collect used material for ITequipment in Portugal, Spain, Italy and England for aleading manufacturer. As already mentioned, the esta-blishment of a new Swiss subsidiary will contribute abouthalf a million Euro to our turnover. At the same timeexpenditure for the remaining national companies will beminimized. These costs will be kept as low as possible.By enlarging the range of services we offer, we have furt-her improved our operative business margins. We shallalso expand our software and consultancy services, theaim being to position ourselves internationally as a part-ner to industry in the development and implementationof reverse-logistical systems well before the new wasteelectrical and electronic equipment order comes intoforce in 2005.
The trend in demand for the management of complexdisposal and return systems encourages the position heldby CCR on its markets, which in some cases are still inthe pioneer phase. In 2003, a successful increase inturnover and a positive earnings situation can be expec-ted both from the German companies and those on otherEuropean markets.
Outlook
23
Financial CalendarAccounts press conference April 15, 2003, 11 a.m.
Conference Room, Bavarian StockExchange, Lenbachplatz 2a, Munich
Annual general meeting May 12, 2003, 10 a.m.Forum Hotel, Hochstrasse 3,Munich, Conference Rooms 6 & 7
2002 report and accounts March 31, 2003 Quarterly report 4 / 2002 February 15, 2003Quarterly report 1 / 2003 May 9, 2003Quarterly report 2 / 2003 August 15, 2003, half-yearly figuresQuarterly report 3 / 2003 November 14, 2003Quarterly report 4 / 2003 February 16, 2004
Interim share report at least three times a year between the quarterly reports
Press and Investor Relations ContactDr. Alexander Röhreke Telephone: +49 (0) 89-49049-130
Fax: +49 (0) 89-49049-131
E-mail: [email protected]
Further information on the CCR Group is available on theInternet at http://www.ccr.de
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Declaration by the Executive and Supervisory Boards ofCCR Logistics Systems AG
concerning the Recommendations issued by theGovernment Commission on the German Corporate Governance Codex
in accordance with § 181 of the German Joint Stock Companies Act
The Executive and Supervisory Boards hereby declare that they are in compliance with the recommenda-tions made by the Government Commission on the German Corporate Governance Codex as published bythe Federal German Ministry of Justice in the electronic issue of the Federal German Official Gazette, withthe following exceptions:
No. 3.8.There is no loading on the policy with D & O Insurance on account of international activity.
No. 5.4.5.Until 2001, members of the Supervisory Board received no payment; since 2002 they have received a smallfixed payment.
No. 7.1.1.Invoicing is currently in accordance with national regulations (German HGB). Conversion to IAS is plan-ned.
Munich, December 19, 2002
Chief Executive Officer Chairman of the Supervisory Board
CCR Logistics Systems AG – Company and GroupSituation Reports for the 2002 Business Year
1. General Economic SituationThe weak Western European business economy in 2002has also affected the business areas in which CCR isactive. In the automotive trade, the motor-vehicle popu-lation is rising only slightly, and new registrations fell backby three percent in 2002. None the less, the marketshares of CCR’s clients, for example BMW, Citroën orToyota, rose slightly compared with the previous year.The market is stagnating in the old tires and filling-stationwaste disposal segments.
Statutory requirements such as the EU directive on end-of-life vehicle and parts disposal, which have nowbecome part of German law, have stimulated the demandfor specific servicves of the kind offered by CCR. Thesecondary raw material recycling market registered aslight drop in the market price for scrap lead during 2002,but this was made good by an increase in the tonnageof lead collected by CCR.
The second most important market for CCR’s servicesis the construction industry, which continues to struggleagainst over-capacity. Investment in new constructionworks went down by 6 percent in 2002 compared withthe previous year, and a further drop of 4 percent is antici-pated in 2003. The pressure of competition had led to anincreased interest in offers devoted to lowering logistic-al costs on the construction site, a trend from which CCRwas able to profit.
In the building logistics area, the tendency for hotel chainsto contract their disposal requirements to systemsuppliers was strengthened. Following initial salessuccesses for CCR’s services, the prospects in this newmarket segment have accordingly improved.
In the market now developing for the return of one-waypacks on which a cash deposit was paid, opportunitiesexist for waste management companies because of thelikelihood that the trade and the manufacturers willcommission third parties to recover, sort and process therelevant drinks packs. Medium-sized waste managementcompanies, however, are exposed to severe competitionin this area in particular, since it is to be expected thatthe large trade outlets (for example discounters, who willhave to cope with the return of many one-way packs) will
tend to contract the work to only a few waste manage-ment companies, in order to negotiate more favorableconditions and reduce the costs per transaction. Thisbasically speaks in favor of increased concentrationtaking place within the waste management industry. CCRsets itself apart from competitors by its offer to operatea higher-level clearing organization within the ECRO(European Clearing Reverse Organisation).
The markets for consulting services and the developmentof software solutions for the return of goods at the endof their life-cycle are in some cases still in the pioneeringphase. These are areas to which CCR has committeditself with determination and been able to secure a corres-ponding volume of orders. It can be assumed that futuremarkets such as the disposal of electronic scrap (from2005 on) will even now have a continued positive effecton CCR’s positioning as a result of the demand for ad-visory services and the preparation of surveys.
2. Business patternsThe pattern of business enjoyed by the CCR Group in2002 was to a large extent determined by three factors.The first of these, domestic business restructuring, in-volved expansion into new business segments and ad-jacent trade areas, and began to bear initial fruit in 2002.This enabled CCR Deutschland AG to extend its positionon the market for waste magagement services. Thissubsidiary company’s earnings and liquidity situationdeveloped extremely well.
Second, the group’s strategic focussing on three compe-tence areas and four business areas led to an internaloptimization of process chains and grouping of com-petences that were particularly effective in the Softwareand Consulting areas, where above-average salessuccesses were achieved.
Third, restructuring of foreign business activities laid afoundation for optimization of the cost structures at theEuropean national-market subsidiaries in 2003.
The pattern of business with new clients in 2002 was alsomost satisfactory. In Germany and Switzerland, newclients included Johnson Controls, Tryp Hotels and the
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Emil Frey AG, with BMW and Citroën in Italy. On a stag-nating waste management market, the CCR Groupsucceeded in setting itself apart from general economictendencies by virtue of its innovative business proces-ses. These include the development of special softwareand consulting services, but also the making available ofa new skip system that has been well accepted by custo-mers. The foundations for steady upward progress in theforthcoming review periods have been laid.
The CCR Group’s operating deficit (EBIT) in 2002 wasT€ 926. This represents a halving of the previous year’sdeficit (T€ 1,804) and shows that the measures whichwere taken are beginning to show fruit.
3. Assets, financial and earnings situationCCR Logistics Systems AG is the functional holdingcompany for the CCR Group’s operative units. It isresponsible for the Group’s strategic business policy andalso performs administrative tasks.
Sales proceeds within the Group went up from T€ 21,205in the previous year to T€ 23,745, equivalent to a 12 %increase in turnover.
On the expenditure side, the cost of bought-in goods andservices went up from T€ 16,605 to T€ 19,405 (17 %).The gross trading margin, excluding other operativeincome went down by T€ 261 to T€ 4,340, equivalent toa margin of 18 percent (previous year: 22 percent). Thisdrop is due to the fact that the CCR CENTERS receivedentry fees of T€ 1,699 in 2001 but only T€ 309 in 2002.Since these entry fees are once-only earnings, it is all themore gratifying that an additional margin of T€ 1,390 wasachieved from business with central clients as a meansof compensating for the missing entry fees.
Human resources costs went down by 22 percent fromT€ 3,171 in the previous year to T€ 2,478. There were37 employees (2001: 39) at the end of 2002.
Compared with the previous year (T€ 1,080), deprecia-tion was T€ 189 lower, at T€ 891.
Other business expenditure went down by T€ 157 fromT€ 2,642 to T€ 2,485.
In the separate accounts of CCR Logistics Systems AG,holdings in foreign subsidiaries (T€ 1,180) were writtenoff by T€ 980 to a new total of T€ 200.
The Group balance-sheet total went up by T€ 381compared with the previous year, to T€ 11,671.
The company’s equity was increased by T€ 250,500 in2002 from T€ 6,758,000 to the new total of T€ 7,008,500by the issue of new bearer shares.
The balance-sheet deficit of CCR Logistics Systems AGincreased by T€ 3,335 to T€ 6,136, since depreciationshad to be undertaken in respect of claims against theforeigh subsidiary companies and of holdings.
The CCR Group’s deficit for the year is T€ 1,037, that isto say T€ 1,107 lower than in the previous year; in otherwords the previous year’s losses were halved.
4. WorkforceCompared with the previous year (39) the workforce wasreduced by 5 percent to 37. 16 of these employees workfor the holding company and 21 for the subsidiaries.
The Group’s employees are a key factor in its success.The workforce is noted for its high motivation, dedica-tion to the task and systematic client orientation.
The management of our company is aware of the highvalue that attaches to the work of its employees andregards its maintenance as an important managerial task.
The Executive Board takes this opportunity of thankingall employees for their efforts on the company’s behalf.
5. Environmental and quality managementCCR Logistics Systems AG and CCR Deutschland AGare subjected to regular inspection and certification byindependent experts. In December 2001 the Germancompanies were examined successfully and grantedcertification in accordance with DIN EN ISO 9002 andDIN EN ISO 14001. The next inspection is due in February2003. In addition, we intend at the end of this year toconvert our element-oriented quality and environmentalmanagement procedures to process orientation.
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27
All our CCR CENTERS that undertake waste manage-ment activities on our behalf have been certified in accor-dance with the German Specialist Waste DisposalCompanies Order (EfbV).
In addition, we conduct an internal quality audit to stan-dards which exceed those called for in the EfbV audit.
At the end of 2002 it was agreed with clients (VW Group,BMW and Toyota Deutschland) that a joint audit catalogshould be compiled. From 2003 on, internal CCR qualityaudits will be accompanied by a client’s representative.This will avoid the cost and effort of individual audits foreach client.
6. Internal administrative changesAt the annual general meeting of shareholders on May14, 2002 the Supervisory Board was increased in sizefrom three to six members. The new members appoin-ted to the Supervisory Board are Dr. Herbert Wörner,former Chairman of the Board of Management of thedomestic appliance manufacturer Bosch SiemensHausgeräte GmbH, Friedrich Schneider, former GeneralManager of the Adelholzner mineral water company andDr. Christoph Stehmann, former General Manager of acompany in the Danzas Group.
7. Risk managementIncurring risks is a familiar element in business activity.The opportunities associated with them represent thecompany’s potential for growth and profit. It is thereforethe task of CCR Deutschland’s risk management toobtain systematic control over the commercial riskswhich the company faces.
Above and beyond the conventional risk area, it is thetask of risk management to detect and evaluate poten-tial risks to commercial success and to make it possiblefor them to be kept under control.
CCR Deutschland AG’s risk management is therefore anintegral element in our overall management concept andone that not only helps to safeguard business successbut also to enhance the value of the company.
Following risk identification, the risks are evaluatedaccording to the likelihood of their occurring and theextent of the damage that would then result. The neces-sary measures are, depending on where the competencelies, taken either by the ‘risk owner’ or by the ExecutiveBoard. The Executive Board supervises risk managementand reports regularly to the Supervisory Board.
Significant risksThe risk of environmental damage as a result of incorrectwaste handling by a CCR CENTER or an associatedrecycling company is always present in latent form. Suchan occurrence could cause harm our reputation or leadto the client terminating the relationship with us. CCRtakes steps to limit this risk by maintaining strict qualitymanagement standards and conducting internal andexternal audits.
According to our current information regarding GroupExemption Order No. 1400/2002 for the motor vehicletrade, the effects on workshop waste removal businesscannot yet be finally estimated. Any risks will be avoidedby adapting the services offered by CCR to match thespecific requirements of the Group Exemption Order.
The termination of contractual relationships could incertain circumstances lead to a definite loss of turnoverand earnings. We endeavor to counteract this risk byproviding intensive customer support and supplying indi-vidually tailored services.
8. OutlookThe implementation of statutory requirements in the end-of-life automobile and parts disposal area, the return ofold electrical appliances for scrapping and recycling, andthe introduction of returnable deposits on one-way packsare all factors that lead to the creation of new markets inwhich the technological and cost-saving potential of CCRsystems can be fully exploited. Unceasing developmentand modification of its integrated reverse-logisticsnetworks has given CCR a lead over its competitors inknow-how and cost-effectiveness. In particular whensatisfying the demand for waste disposal systems that
can be applied to large companies’ branches, the CCRsystem proves to be ideal and CCR Logistics SystemsAG a trustworthy outsourcing partner for clients in indu-stry and commerce.
The strong competition already encountered on all thefour trade areas in which CCR is active is certain tobecome even more severe in view of the general eco-nomic climate. However, the trend towards increaseddemand for the management of complex waste disposaland reverse-logistical systems favors CCR’s position onmarkets that have in some cases not yet moved out ofthe pioneering phase. For these reasons it is anticipatedthat both the German and the European national-marketcompanies will increase their turnovers successfully andenjoy a positive earnings situation in 2003.
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CCR Logistics Systems AG, MunichGroup Balance Sheet for the Year ending December 31, 2002
A s s e t s
31.12.2002 31.12.2001€ €
A. Fixed assetsI. Intangible assets
1. Concessions, industrial protection rights or similarand values such as licenses to such rights 238,021.77 319,799.17
2. Business or corporate value 6,040,852.51 6,549,592.586,278,874.28 6,869,391.75
II. Tangible assets1. Technical plant and equipment 23,464.51 35,092.502. Other factory and office plant and equipment 132,930.33 162,513.72
156,394.84 197,606.22III. Financial assets
Holdings in affiliated companies 0.00 1.006,435,269.12 7,066,998.97
B. Current assetsI. Inventories
1. Unfinished services 4,606.36 2,366.722. Finished goods and merchandise 13,758.00 26,978.09
18,364.36 29,344.81II. Accounts receivable and other assets
1. Receivables from deliveries and services 2,879,556.60 3,027,793.61(including € 227,183.17 with a residual period of more than one year;previous year: € 54,607.53)
2. Receivables from affiliated companies 0.00 1.003. Other assets 652,722.34 484,752.62
3,532,278.94 3,512,547.23III. Cash in hand, cash at banks 1,664,316.94 660,290.81
5,214,960.24 4,202,182.85
C. Deferred income 20,925.82 20,536.33
11,671,155.18 11,289,718.15
31
L i a b i l i t i e s
31.12.2002 31.12.2001€ €
A. EquityI. Capital stock 7,008,500.00 6,758,000.00
II. Capital reserves 3,983,048.00 3,983,048.00III. Retained profits 61,175.02 0.00IV. Deficit carried forward -4,413,033.15 -2,686,493.96V. Group loss -1,223,310.08 -1,726,539.19
VI. Adjustments for other partners’ holdings 166,477.67 -11,377.89VII. Adjustments for foreign currency translation 5,610.82 192.96
5,588,468.28 6,316,829.92
B. ProvisionsMiscellaneous provisions 1,049,660.99 444,479.99
C. Liabilities1. Liabilities to banks 495,107.39 651,860.95
(including € 204,516.84 with a residual period up to one year;previous year € 204,516.84)
2. Liabilities from deliveries and services 3,221,371.76 2,863,513.57(including € 3,221,371.76 with a residual period up to one year; previous year € 2,863,513.57)
3. Other liabilities 1,136,653.26 1,013,033.72(including € 1,136,653.26 with a residual period up to one year; previous year € 1,013,033.72) (including € 26,780.46 for taxes;previous year € 168,411.77) (including € 29,485.37 for social security contributions; previous year € 7,634.81)
4,853,132.41 4,528,408.24
D. Deferred liabilities 179,893.50 0.00
11,671,155.18 11,289,718.15
CCR Logistics Systems AG, MunichGroup Profit and Loss Accountfrom January 1 to December 31, 2002
2002 2001€ €
1. Sales 23,744,779.05 21,205,431.532. Other income 588,212.50 488,320.253. Cost of materials
a) Cost of purchased goods -50,158.30 -27,113.52b) Cost of commissioned services -19,354,698.36 -16,577,527.97
-19,404,856.66 -16,604,641.494. Cost of labor
a) Wages and salaries -2,229,960.64 -2,667,903.63b) Social security, pension and welfare
contributions -247,716.85 -502,756.43(including € 26,253.87 for pensions;previous year € 30,115.19)
-2,477,677.49 -3,170,660.06
5. Depreciation a) Depreciation of intangible fixed assets
and tangible assets -891,407.69 -903,445.83b) Depreciation on current assets, if exceeding the
depreciations customary within the Group 0.00 -176,809.90-891,407.69 -1,080,255.73
6. Other operating expenses -2,485,051.39 -2,641,728.70926,001.68 -1,803,534.20
7. Other interest received and similar income 11,112.30 5,661.818. Depreciation on financial assets and securities
as current assets 0.00 -252,749.009. Interest paid and similar expenses -120,008.04 -91,510.3410. Financial result -108,895.74 -338,597.5311. Result from ordinary activities -1,034,897.42 -2,142,131.73
12. Taxes on income and earnings -2,280.05 0.0013. Other taxes 0.00 -1,587.0514. Loss for the year -1,037,177.47 -2,143,718.7815. Profit accruing to other partners (previous year’s loss) -124,957.59 417,183.5916. Allocations to retained profits -61,175.02 0.00
17. Group loss -1,223,310.08 -1,726,535.19
32
33
CCR Logistics Systems AG, MunichBalance Sheet for the Year ending December 31, 2002
A s s e t s
31.12.2002 31.12.2001€ €
A. AssetsI. Intangible assets
1. Concessions, industrial protection rights or similarand values such as licenses to such rights 116,912.00 270,399.49
2. Business or corporate value 4,993,187.00 5,447,112.815,110,099.00 5,717,512.30
II. Tangible assetsFactory and office plant and equipment 96,956.02 99,911.44
III. Financial assetsHoldings in affiliated companies 2,213,610.15 3,180,383.22
7,420,665.17 8,997,806.96
B. Current assetsI. Accounts receivable and other assets
1. Receivables from deliveries and services 4,950.49 46,088.302. Receivables from affiliated companies 1,366.72 1,597,078.303. Other assets 166,713.74 22,238.53
173,030.95 1,665,405.13II. Cash and cash equivalents 809,199.12 2,592.70
982,230.07 1,667,997.83
C. Deferred income 5,723.67 13,378.77
8,408,618.91 10,679,183.56
34
L i a b i l i t i e s
31.12.2002 31.12.2001€ €
A. EquityI. Capital stock 7,008,500.00 6,758,000.00
II. Capital reserves 3,983,048.00 3,983,048.00III. Deficit carried forward -2,800,290.50 -952,213.46IV. Loss for the year -3,335,512.93 -1,848,077.04
4,855,744.57 7,940,757.50
B. ProvisionsMiscellaneous provisions 218,747.76 224,484.08
C. Liabilities1. Liabilities to banks 426,076.39 651,860.95
(including € 204,516.84 with a residual period up to one year;previous year € 204,516.84)
2. Liabilities from deliveries and services 98,292.97 113,651.47(including € 98,292.97 with a residual period up to one year; previous year € 113,651.47)
3. Liabilities to affiliate companies 1,931,676.21 827,951.11(including € 1,931,676.21 with a residual period up to one year; previous year € 827,951.11)
4. Other liabilities 878,081.01 920,478.45(including € 699,182.23 with a residual period up to one year; previous year € 920,478.45) including € 3,898.78 for taxes; previous year € 147,763.59)
D. Rechnungsabgrenzungsposten 3,334,126.58 2,513,941.98
8,408,618.91 10,679,183.56
35
CCR Logistics Systems AG, MunichProfit and Loss Accountfrom January 1 to December 31, 2002
2002 2001€ €
1. Sales 629,043.91 889,666.722. Other income 694,214.35 226,635.253. Cost of materials
a) Cost of purchased goods -6,000.00 -17,753.35b) Cost of commissioned services 0.00 -1,947.00
-6,000.00 -19,700.354. Cost of labor
a) Wages and salaries -1,045,157.83 -909,939.08b) Social security and pension contributions -127,073.11 -96,378.33
(including € 10,908.88 for pensions;previous year € 5,681.47)
-1,172,230.94 -1,006,317.41
5. Depreciation a) Depreciation of intangible fixed assets
and tangible assets -697,122.94 -741,263.19b) Depreciation on current assets, if exceeding
the depreciations customary within the Group -1,968,433.68 -176,809.90
-2,665,556.62 -918,073.096. Other operating expenses -804,868.03 -654,906.66
-3,325,397.33 -1,482,695.547. Income from profit transfer agreements 1,162,325.29 0.008. Other interest received and similar income 63,153.33 655.41
(including € 57,134.75 from affiliated companies;previous year € 0.00)
9. Depreciation on financial assets and securitiesin current assets -980,381.23 -252,749.00
10. Interest paid and similar expenses -255,212.99 -113,052.72(including € 140,205.41 to affiliated companies;previous year € 36,207.45)
11. Financial result -10,115.60 -365,146.31
12. Result from ordinary activities -3,335,512.93 -1,847,841.85
13. Other taxes 0.00 -235.1914. Loss for the year -3,335,512.93 -1,848,077.0415. Loss carried forward from previous year -2,800,290.50 -952,213.46
16. Net loss -6,135,803.43 -2,800,290.50
36
I. General remarks and consolidation principles
PrefaceThe Group annual report and accounts for CCR LogisticsSystems AG has been compiled in accordance with therelevant accounting requirements of commercial andcorporate law.
The Company and Group annual reports are explainedtogether. Unless otherwise indicated, statements refer toboth reports.
Consolidated GroupIn accordance with § 294 Par. 1 HGB the Group report andaccounts include, in addition to CCR Logistics SystemsAG as the parent company, one domestic and four foreignsubsidiary companies in which CCR Logistics Systems AGhas a majority shareholding, in accordance with the fullconsolidation principle.
The consolidated Group changed as follows during thebusiness year:With effect from January 1, 2002 the holding in CCRHispania S.A. was increased by 6.15 percent from 82 to88.15 percent. With effect from December 31, 2002 the CCR SchweizGmbH company, established in December 2002, was inclu-ded in the Group accounts for the first time. Its initial equityis 20,000 Swiss francs (€ 13,609.15). The company under-took no business activities in 2002.
Differences arising from foreign-exchange conversionarose only in the case of CCR UK Limited. The equity wasvalued at the historic exchange rate; the other items in thebalance sheet and profit and loss account were valued atthe rate when the accounts were closed.
An overview of participations is given by the list of holdingsat the end of the annex.
Consolidation principlesThe annual accounts of the consolidated companies areclosed on the same day as the Group accounts, namelyDecember 31, 2002.
Capital consolidation of companies consolidated in theGroup accounts deviates from German AccountingStandard 4 and is carried out by the book-value methodin accordance with § 301 Par. 1 Sentence 2 No. 1 HGB, byoffsetting the purchase values of subsidiary companiesagainst the equity accruing to the parent company on thedate of acquisition or initial consolidation. Active differen-ces occurring as a result are shown as business or cor-porate values.
Claims and liabilities between the consolidated companieshave been eliminated.
The accounts for the individual companies’ accounts arerecorded uniformly according to valid accounting andevaluating methods for consolidation in the Group report.
Correct accounting principles have been adhered to at alltimes.
Third parties’ shares of the equity and the annual resultsof subsidiary companies are shown as holdings of othershareholders.
The profit and loss statement is drawn up in accordancewith the total costs principle.
CCR Logistics Systems AG MunichNotes on the Company and Group Financial Statementsfor the 2002 Business Year
37
II. Accounting and valuation methods
Valuation options have been exercised in the Groupreport in the same way as in the parent company’s annualreport.Amounts in foreign currencies were converted at theexchange rate effective on the balance-sheet date.
Fixed assetsIntangible fixed assets and tangible assets that wereacquired are shown at their purchase cost including ancil-lary purchase expenses, taking reductions in thepurchase cost into account, and depreciated linearly prorata temporis for their probable economic life.
Capital goods of low value are written off in full in the yearof acquisition.
The business or corporate values shown in the Groupaccounts relate to the active differences arising from theinitial consolidation of CCR UK Limited, CCR HispaniaS.A. and CCR Services AG. CCR Services AG was amal-gamated with CCR Logistics Systems AG on January 1,2001. The resulting difference appears as a business orcorporate asset item in the separate accounts of CCRLogistics Systems AG.
Holdings in affiliated companies have been balanced inthe separate CCR Logistics Systems AG accountsagainst the acquisition costs, book values carried forwardor deposit values, taking the necessary value reductionsinto account.
Current assetsAccounts receivable and other asset itemsAll identifable risks have been taken into account in theform of reasonable value reduction in the case of re-ceivables shown at their nominal values. In addition, alump-sum depreciation has been undertaken to coverthe general credit risk applicable to receivables.
Cash in hand, cash at bankCash in hand and bank balances have been posted atnominal values. Sums in foreign currencies are valued atthe exchange rates.
Deferred itemsDeferred income has been posted as the amounts occur-ring after the balance-sheet closure date if linear dis-tribution is applied.
ProvisionsProvisions have been allocated on the basis of carefulcommercial judgment and cover all risks identifiable onthe balance-sheet date.
LiabilitiesLiabilities have been posted as the amounts repayable.
Foreign currency conversionInsofar as the fully consolidated subsidiary companies’annual accounts contain items based on foreign curren-cies, they have been converted into Euro at the trans-action rate or at a lower (claims) or higher (liabilities) rateon the balance-sheet date.
Conversion of the balance sheets of the British and Swisssubsidiary companies is at the cash rate on the date ofclosure for the annual report and accounts. Any diffe-rences in the conversion of the equity are shown sepa-rately.
Conversion of items in the foreign subsidiary companies’profit and loss accounts takes place similarly.
38
39
III. Notes on the Balance Sheet
Fixed assetsFixed asset movements and depreciation in the businessyear for the company and the Group are shown in twoseparate tables at the end of this report.
Business or corporate values from initial consolidationare written off over a period of 15 years in accordancewith customary business practice. The period of use forbusiness or corporate values shown as assets in the indi-vidual accounts is 13 years, representing the residualperiod for Group goodwill.
Tangible assets include in particular the customary opera-ting and business equipment.
The holding in CCR Nordic OY was written off in thereview year.
Current assetsAccounts receivable from affiliated companies in theseparate CCR Logistics Systems AG accounts refer toclaims against CCR Italia S.p.A. (T€ 1).
CapitalThe equity of CCR Logistics Systems AG is € 7,008,500and was, as of December 31, 2002, divided into7,008,500 bearer shares.
On January 3, 2002 and with the approval of theSupervisory Board on March 1, 2002 the Executive Boardexercised its right to increase the equity (approved capi-tal) in accordance with § 3 Par. 3 of the company articles.By issuing 250,000 new shares the company’s equity wasincreased by € 250,500 from € 6,758,000.00 to€ 7,008,500.00, shareholders’ subscription rights beingexcluded. The articles were amended accordingly.
On December 31, 2002 the amount of capital approvedbut not yet taken up in accordance with the articles rela-
ting to the issue of new shares was € 593,500.
Capital reservesThe capital reserves comprise the redemption premiumfrom the stock exchange launch of T€ 3,887.
Retained profitsThe Group’s retained profits consist of the statutory pro-vision of T€ 61 to be formed by law in the separate CCRDeutschland AG accounts.
ProvisionsThe provisions are principally made up of the followingamounts:
Group Company report
T€ T€
Official delivery obligation 260 0
Calculated incorrect amounts 189 0
Provisions for personnel 163 42
Quality bonus 46 0
Legal costs 111 41
Cost of annual report and accounts 43 23
Industrial accident insurers 9 5
Unpaid invoices 35 26
Restructuring costs 81 0
Participation risks 80 80
Other 32 2
1,049 219
LiabilitiesOf the liabilities to banks, T€ 426 are a loan from theDeutsche Bank AG for an original amount of T€ 1,023,for repayment by 2005. In addition, the Group accountsinclude a loan of T€ 69 for CCR Italia S.p.A.
The liabilities to affiliated companies in the individualaccounts only relate to CCR Deutschland AG (T€ 1,932).
The other liabilities in the individual and Group accountsinclude liabilities to shareholders in the sum of T€ 841,of which T€ 400 are covered by sequential withdrawaldeclarations. T€ 175 have a residual period of more thanone and less than five years.
IV. Group Capital Flow Statement
2002 2001
T€ T€
Group result for the period -1,037 -2,144
Loss to be borne by other partners
(previous year’s loss) -125 417
Depreciation of assets 891 1,156
Increase (+)/decrease (-) in deferrals
relating to other partners’ holdings
and exchange-rate differences 183 -413
Increase (+)/decrease (-) in short-term provisions 606 -121
Loss/profit from disposal
of assets 37 15
Increase (+)/decrease (-)
- in inventories 11 3
- in accounts receivable 148 -538
- in other assets including asset deferrals -168 138
Increase (+)/decrease (-)
- in liabilities from deliveries and services 357 1,494
- in other liabilities including deferrals 304 174
Cash flow from current business activity 1,207 181
Payments for fixed-asset investments -297 -481
Cash flow from investments -297 -481
Increase in capital 250 0
Loans repaid -204 -204
Loans taken up 69 0
Cash flow from financial activity 115 -204
Changes to funds with an effect on payments 1,025 -504
Funds at start of period 639 1,143
Funds at end of period 1,664 639
In the funds in hand, the balance of cash at bank andbank liabilities from current accounts is shown.
V. Notes on Profit and Loss Statement
The profit and loss statement was compiled and laid outin accordance with the total-cost principle.
Sales proceeds in the Group accounts mainly concernthe following items:• Orders from central clients including disposer’s fees
(T€ 20,566)• Current franchise fees (T€ 2,415)• Acquisition of CCR CENTER territories (T€ 309)• Other items (T€ 455).In the Company accounts, the sales proceeds consist ofsales of territories to CCR CENTERS, current license fees(T€ 521) and income from consulting services (T€ 108).
Depreciations include goodwill write-offs of T€ 547(Group) and T€ 454 (Company).
Other operating costs in the Company and Groupaccounts are made up as follows:
Group CompanyAccounts
T€ T€
Legal, consulting and accountancy costs 396 167
Depreciation of receivables 584 13
Miscellaneous costs 344 186
Vehicle costs 256 60
Cost of premises 165 31
Travel expenses 122 55
Communication costs 152 31
Marketing expenditure 136 70
Cost of offices 53 11
Other personnel costs 36 16
Upkeep costs 102 90
Insurances/subscriptions 46 28
Payments to Supervisory Board members 32 32
Cost of leasing 46 8
Hospitality costs 15 7
Total 2,485 805
Depreciation on financial assets refers to the initial holdingof T€ 155 in CCR Italia, of T€ 310 in CCR Hispania andof T€ 515 in CCR UK.
40
41
VI. Segment reporting
Segment reports were drawn up in accordance withGerman Accounting Standard 3.
It should be noted that the high positive result achievedby the foreign companies is due to the waiving of a claimfor T€ 1,968 by the reporting company.
In order to provide better information, the compositionof the individual segments was therefore also shown.Details of segment reports are shown as an enclosure tothis annex.
VII. Equity overview
The company’s equity overview has been drawn up inaccordance with German Accounting Standard 7.Equity changes are shown as an enclosure to this annex.
VIII. Supplementary information
Human resourcesThe Group employed an average of 37 persons duringthe year; this was also the total workforce when theannual accounts were closed. CCR Logistics SystemsAG employed an average of 15 persons; on December31, 2002 it had a workforce of 16.
Employee optionsThe Executive Board of CCR Logistics Systems obtainedthe approval of the shareholders’ annual general meetingon October 6, 1999 for the introduction of an employeeparticipation scheme or “Stock Appreciation Rights Plan”(Star-Plan 2000). The plan envisages participation in theincrease in the CCR share price in the form of a cashpayment, the actual sum being calculated from the diffe-rence between the price when the right is exercised andthe basic price determined when the plan goes intooperation; this is equivalent to the CCR share issue priceof € 3.30. Members of the Executive and SupervisoryBoards and senior managers and sales staff of CCRLogistics Systems AG and its affiliated subsidiary com-panies are entitled to acquire “STARS”.So far, 1 percent of the share volume has been alloca-ted. STARS are issued in accordance with individualagreements and the rights to them can only be exercisedafter they have been held for two years.
There is also a threshold which prevents the rights frombeing exercised unless sales proceeds in the year underassessment exceed those in the issue year by 60 percent.Within the retention period, 80 percent of the budgetedturnovers and results must be achieved by the sub-sidiaries in each business year.
Contingent liabilitiesIn addition to the liabilities shown in the balance sheetthere are contingent liabilities of T€ 17 from leasing sureties.
Other financial commitmentsOther financial commitments from leasing and hirecontracts are made up as follows:
2002 T€
CCR Deutschland AG 185
CCR Logistics Systems AG 151
CCR UK Limited 104
CCR Italia S.p.A. 28
468
Principal holdings
Share of equity %
Fully consolidated companies - Germany
CCR Deutschland AG 100.00
Fully consolidated companies abroad
CCR Hispania S.A. 88.15
CCR UK Limited 90.00
CCR Italia S.p.A. 51.00
CCR Schweiz GmbH 100.00
The statement of holdings has been deposited with theMunich Registrar of Companies.
Declaration in accordance with § 161 German AktGThe Executive and Supervisory Boards of CCR LogisticsSystems AG have submitted the declaration regardingthe German Corporate Governance Codex callled for by§ 161 of German Joint Stock Companies Law and madeit available to shareholders on the Internet at www.ccr.de.
42
IX. Details of Corporate Structure
Members of the Executive Board:• Achim Winter, Gmund am Tegernsee• Susanne Momberg, Gröbenzell
Members of the Executive received fixed remunerationsonly, in the total sum of € 297,776.40 (previous year€ 297.026,52). The targets specified in the “Star” planfor variable payments were not reached.
Members of the Supervisory Board• Count Ferdinand von Spiegel, Counsellor-at-Law,
Gmund am Tegernsee (Chairman)• Karin A. Siegle, management consultant,
Bargtheheide• Walter Wilhelm Sawallisch, Managing Partner of
Sawallisch & Associates GmbH, Munich• Dr. H. Wörner, commerce graduate, Grünwald
(Greater Munich) (since May 14, 2002)Other supervisory-board memberships:ThyssenKrupp Stahl AG, DuisburgRWE Net AG, Dortmund
• Friedrich Schneider, company director, Pullach (Greater Munich) (since May 14, Mai 2002)
• Dr. Christoph Stehmann, business management graduate, Düsseldorf (since May 14, 2002)
Remuneration of the Supervisory Board for the year2002 was € 30,000.
X. Proposal for the allocation of the net result
The balance-sheet loss of CCR Logistics Systems as atDecember 31, 2002 is T€ 6,136. The Executive andSupervisory Boards propose that this be carried forwardto the new account.
Munich, February 10, 2003
The Executive Board
43
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803.
290.
0065
7,51
4.83
48,5
53.1
71,
574,
764.
955,
110,
099.
005,
717,
512.
30
II. T
ang
ible
ass
ets
1. T
echn
ical
equ
ipm
ent a
nd m
achi
nery
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2. O
ther
pla
nt, f
acto
ry a
nd o
ffice
eq
uipm
ent
30
6,74
1.08
61,2
90.7
115
8,15
2.70
209,
879.
0920
6,82
9.64
0.00
39,6
08.1
113
2,81
8.68
113,
619.
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99,9
11.4
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0.00
696.
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0069
6.00
0.00
0.00
0.00
0.00
0.00
696.
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00
306,
741.
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158,
152.
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0,57
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640.
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132,
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6811
3,61
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96,9
56.0
299
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III. F
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Hol
ding
s in
affi
liate
d co
mpa
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3,43
3,13
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13,6
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3,19
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0,38
1.23
252,
749.
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0,38
1.23
2,21
3,61
0.15
3,18
0,38
3.22
10,4
23,1
88.8
912
5,69
7.39
459,
455.
8610
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1,42
5,38
1.93
0.00
1,67
7,50
4.17
434,
120.
852,
668,
765.
257,
420,
665.
178,
997,
806.
96
CC
R L
og
isti
cs S
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AG
, Mu
nic
hO
verv
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of
Gro
up
Ass
ets
as a
t D
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ber
31,
200
2
CC
R L
og
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AG
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nic
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Ove
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w o
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ets
as a
t D
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31,
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2
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€
CC
R
CC
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Tota
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on
solid
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tal,
CC
RC
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lidat
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Sys
tem
s A
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erm
any)
(Ger
man
y)
T€
T€
T€
T€
T€
T€
T€
T€
T€
T€
T€
Sal
es p
roce
eds
23,4
9062
924
,119
-614
23,5
0518
2310
714
892
23,7
45
Oth
er in
com
e89
694
783
-494
289
753
862
747
2,36
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587
Tota
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1,32
324
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771
885
854
2,51
0-1
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24,3
32
Cos
t of m
ater
ials
-19,
946
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9,95
261
4-1
9,33
8-1
338
25-9
2-1
9,40
5
Mar
gin
3,63
31,
317
4,95
0-4
944,
456
758
885
892
2,53
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100
1998
100
104
105
20
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-900
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77
Dep
reci
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ns-5
86-2
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5147
6-2
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-24
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41,
957
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Oth
er o
pera
ting
expe
nses
-1,0
28-8
05-1
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494
-1,3
39-8
1-7
40-4
20-1
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96-2
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Tota
l-2
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-4,6
42-7
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970
-6,1
86-1
13-8
19-7
88-1
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2,05
3-5
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Op
erat
ing
res
ult
1,11
9-3
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-2,2
0647
6-1
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645
6610
481
5-1
1-9
26
Inte
rest
ear
ned/
paid
145
-192
-47
-47
-31
-25
-5-6
1-1
08
Dep
reci
atio
n of
fina
ncia
l ass
ets
-980
-980
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098
00
Res
ult f
rom
ord
inar
y ac
tivity
1,26
4-4
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3347
6-2
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614
4199
754
969
-1,0
34
Taxe
s-2
0-2
-2-1
-1-3
Res
ult f
rom
res
ult-
equa
lizin
g ag
reem
ents
-1,1
621,
162
Gai
n/D
efic
it f
or
the
year
100
-3,3
35-3
,235
476
-2,7
5961
441
9875
396
9-1
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Pro
fits
accr
uing
to o
ther
par
tner
s-7
3-4
-48
-125
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Allo
catio
n to
res
erve
s-6
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1-6
1-6
1
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fit/
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ss39
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476
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2054
137
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CC
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rep
ort
ing
, 200
2
45
46
Paid-up Capital Earned Group Adjustments due Equity Equity Groupcapital reserves equity to exchange-rate- equity
conversions
€ € € € € € €
Position on December 31, 2001 6,758,000.00 3,983,048.00 -4,413,033.15 192.96 6,328,207.81 -11,377.89 6,316,829.92
Issue of shares 250,500.00 250,500.00 250,500.00Purchase/recovery of own sharesDividends paidChanges to consolidated group 38,333.95 38,333.95
Other changes
Group surplus/deficit -1,223,310.08 -1,223,310.08 124,957.59 -1,098,352.49for the year 0.00Remaining Group result 61,175.02 5,417.86 66,592.88 14,564.02 81,156.90
Overall Group result 0.00 0.00 -1,162,135.06 5,417.86 -1,156,717.20 139,521.61 -1,017,195.59
0.00Position on December 31, 2002 7,008,500.00 3,983,048.00 -5,575,168.21 5,610.82 5,421,990.61 166,477.67 5,588,468.28
CCR Logistics Systems AG, MunichGroup Equity Overview, 2002
MinoritypartnersParent company
47
Confirmatory Note from AuditorsWe have examined the annual accounts drawn up byCCR Logistics Systems AG of Munich, including theaccount records and the Group annual report andaccounts (comprising the Group balance sheet, the Groupprofit and loss statement and the Group annex) with asummarized annex and the summarized report on theposition of the company and the Group for the businessyear concluded on December 31, 2002. Maintaining theaccounts and compiling these documents is the respon-sibility of the company’s Executive Board. Our task is toexamine and assess the annual accounts with referenceto the bookkeeping records and also to assess the Groupreport and the summarized situation report.We have examined the Company and Group annualaccounts in accordance with § 317 of the GermanCommercial Code (HGB), taking into consideration theprinciples of correct accounting for German companieslaid down by the German Institute of Auditors (IDW).These call for the audit to be planned and conducted insuch a way that errors and infringements having a sig-nificant effect on the manner in which the company’sassets, financial and earnings situation is presented in itsannual accounts and the Group’s annual accounts,bearing in mind the principles of correct bookkeepingpractice, and also in the summarized situation report, areidentified with sufficient certainty. Knowledge of thecompany’s and the Group’s business activities and theireconomic and legal situation and any anticipated errorsare taken into consideration when the auditing proceduresare determined. During the audit, the efficacy of internalaccounting monitoring systems and evidence of thecorrectness of details recorded in the account records andthe company’s and Group’s annual accounts and situa-tion report are assessed, in most cases by making randomchecks. For the annual accounts the audit includesassessment of the balance-sheet accounting principlesthat have been adopted; for the Group annual accounts,it includes assessment of the annual reports and accountsof companies included in the Group’s annual report andaccounts, the extent of the consolidated group and thebalance-sheet accounting and consolidating principlesused. For both sets of accounts it includes assessment
of the main estimates issued by the company’s ExecutiveBoard and an evaluation of the overall picture presentedby the company’s and Group’s annual report and accountsand the summarized situation report. We are of the opinionthat our audit constitutes a sufficiently reliable basis forthis assessment.
Our audit has not yielded any objections.
We are convinced that the Company’s and Group’s annualreport and accounts present their assets, finances andearnings situation in a manner which conforms with theactual situation and observes the principles of correctaccounting practice. The summarized situation reportsupplies an accurate overall picture of the position of theCompany and the Group and states the risks associatedwith future developments in an accurate manner.
Munich, February 17, 2003
CCR Logistics Systems AGRosenheimer Str. 139
81671 Munich, GermanyTel: +49 (0) 89-49049-100 Fax: +49 (0) 89-49049-101
email: [email protected]
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