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Annual Report 2007

Kardex Remstar Group at a glance

Continued operations

EUR millions 2007 2006

Bookings 436.2 388.0

Backlog (31 December) 107.8 88.5

Net revenues 422.5 379.1

Operating result 35.2 18.6

Operating result in % 8.3 4.9

Operating result before depreciation 44.4 28.5

Operating result before depreciation in % 10.5 7.5

Net result 23.1 13.5

Net result in % 5.5 3.6

Capital expenditure 7.6 27.1

Number of employees (31 December) 1 883 1 832

EUR millions 2007 2006 +/– %

KRM

Bookings 258.2 242.4 +6.5

Segment net revenues 252.7 233.0 +8.5

Operating result 24.6 19.6 +25.5

Number of employees (31 December) 1 315 1 270 +3.5

Stow

Bookings 178.0 145.6 +22.3



Number of employees (31 December) 557 546 +2.0

Kardex Remstar Group


Net cash flow from operating activities 51.1 –9.3

Net cash flow from operating activities in % 12.1 –2.5

Net financial debt 38.5 65.8

Equity (31 December) 74.2 55.8

Equity ratio in % 29.4 19.2

Net result 21.8 –33.2

Kardex Remstar Group at a glance Cover

Report of the Board of Directors 2

KRM Division 4

Stow Division 12

Financial statements 2007 of the Kardex Remstar Group

and Kardex AG (Holding) 16

Corporate Governance 81

Group companies, addresses and contacts 96

Contents

Group KRM Division Stow Division Holding

1

Kardex AG (Holding): the share

Price movements on SWX Swiss Exchange 2007

Share price Swiss Market Index

CHF 2007 2006 +/– %

Share

Closing rate 61.50 52.00 +18.3

High 73.00 75.50 –3.3

Low 49.95 41.50 +20.4

Market capitalization (31 December) CHF millions 346.09 292.63 +18.3

Per share

Net result1 6.35 –9.29

Net cash flow from operating activities1 14.91 –2.60

Number of shares (31 December) 5 627 453 5 627 453

1 – Translation income statement at average rates.– For details of earnings per share see note 4.25.

2

Ladies and Gentlemen

The Kardex Group experienced strong growth in 2007. The two continuing

divisions, KRM (Dynamic Storage and Retrieval Systems) and Stow (Static

Storage Systems) both achieved record net revenues and bookings. Operating

profit (EBIT) saw an exceptional increase. In 2007, after the sale of the AFT

Division (Industrial Automation and Conveyor Technology), the Kardex Group

achieved a successful turnaround with a double-digit net result and a major

reduction in debt.

Outstanding performance in fiscal 2007

The consolidated net revenues of the Kardex Group’s continuing divisions outstripped

the comparable figure for 2006 by 11.4%, reaching EUR 422.5 million (2006: EUR

379.1 million); adjusted for exchange rate effects the increase was 12.3%. Bookings

were up 12.4% to EUR 436.2 million (EUR 388.0 million), while the order backlog

exceeded the previous year’s by 21.8% at EUR 107.8 million (EUR 88.5 million).

KRM contributed 59.8% (61.5%) to the Group’s net revenues, while Stow accounted

for 40.2% (38.5%).

Significantly higher profitability

Strong net revenue growth, determined cost management and continuing advances

in productivity led to a significant increase in earning power. The operating profit

(EBIT) of the continuing divisions grew 89.2% to EUR 35.2 million (EUR 18.6 million)

and the EBIT margin improved to 8.3% (4.9%). The continuing divisions’ net result

also saw a significant gain of 71.1% to EUR 23.1 million (EUR 13.5 million). Including

the effects of the discontinued AFT Division, the Kardex Group’s consolidated net

result was EUR 21.8 million (EUR –33.2 million).

Equity basis strongly reinforced

The balance sheet was strengthened substantially. Equity increased by EUR 18.4 million

from the previous year to EUR 74.2 million (31 December 2006: EUR 55.8 million),

and the Kardex Group regained an equity ratio of 29.4% (19.2%) on 31 December

2007. With a much-reduced net debt of EUR 38.5 million (EUR 65.8 million), the

gearing ratio was 51.9% (117.9%).

Report of the Board of Directors

Leo SteinerChairman of the Board of Directors

Jos De VuystChief Executive Officer

Group

3

Changes in the Board of Directors

Following the decision of Dr Rudolf Huber not to seek re-election to the Board of

Directors of Kardex AG (Holding), the General Meeting of 22 April 2008 will be

asked to approve the appointment of David J. Schnell, a finance graduate, from

Berg in the canton of St. Gallen, resident in Uster. The Board of Directors regrets

Dr Huber’s decision and thanks him for his valuable support during the past few

years, which have been crucial in the development of the Kardex Group.

Outlook

The Kardex Group will continue to pursue a dual strategy, focusing mainly on sus-

tainable organic growth with a further increase in profitability in the KRM and Stow

Divisions and ongoing strengthening of the financing structure. With the integration

of the previously autonomously managed Kardex and Megamat brands, KRM is

seeking to dynamically expand its service business, intensify its market development

efforts in the United States and further increase net revenues and profitability in the

emerging Asian and Eastern European markets. Stow will continue its successful

Operational Excellence programme and exploit further process and cost optimization

potential in production. The division is steadily expanding its strong market position

in Central and Eastern Europe, and the completion of the new Stow plant in China

will also significantly strengthen its market standing in the Asia Pacific region. In ad-

dition, opportunities for external growth in the global logistics market are reviewed

on an ongoing basis.

Based on the solid order backlog at the start of the year and continuing strong

demand in the first weeks of fiscal year 2008, the Kardex Group’s management is

optimistic in regard to the outlook for net revenue and profit.

4

ProfileThe KRM Division is a leading global provider of development, production and main-

tenance services for computer-controlled, flexibly designed storage, retrieval and

distribution systems. KRM logistics solutions are geared primarily towards customers

in industrial production, commerce, administration and the service sector.

Another record year for KRM

With an 8.5% increase in net revenues to EUR 252.7 million (EUR 233.0 million) in

fiscal year 2007, the KRM Division achieved the highest revenue level in its history. The

operating result increased by a strong 25.5% to EUR 24.6 million (EUR 19.6 million),

while the EBIT margin continued to improve in line with the corporate strategy to

9.7% (8.4%). The KRM Division took advantage of the continuing good economic

climate and robust demand for efficient computer-based, flexibly designed storage,

retrieval and distribution systems. Bookings during the year under review saw further

growth of 6.5% to EUR 258.2 million (EUR 242.4 million), and the backlog on

31 December 2007 stood at EUR 71.9 million (EUR 64.3 million). Concurrently, KRM

worked to tighten processes and structures during the year, launching a strategic

project in November to support long-term dynamic and sustainable growth by starting

full integration of the Kardex and Megamat market units, previously under separate

management.

Robust growth in European market

The euro zone again accounted for the bulk of KRM’s net revenues (58.6%) in fiscal

year 2007, with the rest of Europe contributing 22.3%. Sales in Germany saw espe-

cially strong growth. Switzerland and the Gulf region were also vibrant markets, as

was the United States, which contributed 12.4% to the Division’s net revenues and

posted renewed solid growth. The dynamic Asian region, particularly the rapidly

growing India and China markets, contributed 6.7% of net revenues. KRM again

invested considerable sums in market development, particularly in expanding sales

and distribution networks in Asia, Russia and the United States.

KRM (Dynamic Storageand Retrieval Systems Division)

Jürg MüllerHead of the KRM Division

Euro countries

Other European countries

Asia, Pacific Rim

Americas

12.4%

6.7%

22.3%

58.6%

Net revenuesby markets

5

KRM Division

Customizing

Special development teams work continually

to improve Kardex’s flexible system solutions,

adapting them to the individual needs of

existing and potential customers to ensure

maximum customer benefit.

Service & Support

Kardex provides international customer support

with flexible on-site service. A comprehensive

range of support services ensures sustainable

use and long-term value in Kardex’s flexibly

designed storage, retrieval and distribution

systems.

State-of-the-art software

Experienced in-house developers work con-

tinually to improve and adapt the powerful

software used to control Kardex’s efficient

storage, retrieval and distribution systems to

customers’ specific needs.

KRM (Dynamic Storage and Retrieval Systems Division)6

Consolidated key figures for the KRM Division

EUR millions 2007 2006 +/– %

Bookings 258.2 242.4 +6.5

Backlog 71.9 64.3 +11.8


Operating result before depreciation and amortization 29.7 25.4 +16.9


Number of employees 1 315 1 270 +3.5

Integration of Kardex and Megamat market units

In previous years the Kardex, Megamat and Remstar market units functioned as

stand-alone units, with no unified branding for the KRM Division as a whole. With

the current ongoing process of fully integrating the successful Kardex and Megamat

units, KRM is realizing sustainable potential synergies and creating a solid foundation

for further rapid and profitable growth.

The KRM Division will in future take its name from Kardex, the largest individual

market unit. The integration process will involve a careful analysis of the specific

strengths of Kardex and Megamat and their rebundling within the Division. The

range of standardized Kardex solutions and tailored customer-specific Megamat

solutions will be strategically optimized and expanded. The Remstar brand with its

traditional strength in the United States will continue to be responsible for Kardex

distribution, service and support on American markets. Remstar essentially offers an

identical product and service range to Kardex, plus manufacturing and distribution

of the KRM Division’s vertical carousels.

7

KRM Division

Sustainable growth potential

KRM’s diverse product range comprises computer-controlled, flexibly designed storage,

retrieval and distribution systems together with unique logistics solutions in combina-

tion with a high-performance service and support structure. KRM systems have the

potential to increase efficiency wherever things are built, automated, modernized

and rationalized. They provide customers with substantial cost savings, particularly

where space is limited and where the cost of premises and personnel is high.

Looking forward

The structural adjustment and process optimization measures launched in the KRM

Division in 2007 will continue in 2008. Productivity and flexibility in development

and manufacturing will be substantially improved. As part of the integration of

Kardex and Megamat, the KRM service network is becoming denser, the product

range is undergoing continual expansion and the Division is achieving significantly

greater closeness to the customer. KRM continues to anticipate exceptionally high

growth from the geographical markets of the US and Russia and from the Asia

region, primarily from India and increasingly also from China. In the European market,

the continuing expansion of KRM’s already strong position is moving forward apace.

KRM will also realize further potential for sustainable profitable growth in the course

of continual process optimization, further production automation and major invest-

ments in a successive strengthening of the distribution organization.

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High-bay warehouses

Tailor-made high-bay storage solutions from Stow are adapted to a wide rangeof customer needs and provide a foundation for efficient logistics solutions.

10/11

12

ProfileThe core activity of the Stow Division is the manufacturing and distribution of the

storage solutions typically used in high-bay warehouses. Its most important customer

groups include general contractors specializing in logistics, industrial companies and

logistics service suppliers (warehouses).

Sizable increase in net revenues and earnings

In the fiscal year 2007 the Stow Division achieved substantial 15.6% year-on-year

growth in net revenues to EUR 171.2 million (EUR 148.1 million). At EUR 9.8 million

(EUR 1.2 million), the operating result showed an even more substantial year-on-year

increase, and the EBIT margin improved significantly to 5.7% (0.8%). Once ramp-up

difficulties were resolved, production at Stow’s new automated plant in Belgium has

been efficient and cost-optimized. Productivity and manufacturing quality in particular

have seen major improvements. Stow has become substantially more selective with

regard to return on investment and risks, focusing on high-quality orders. Changes

in commodity prices, particularly steel prices, are quickly passed on to customers.

In fiscal 2007 Stow took advantage of a good economic environment and stable

demand to achieve record profits.

The Stow Division once again succeeded in winning major orders from key global

customers, including large logistics enterprises and an international furniture distri-

butor. Collaboration with a major OEM customer continued to develop very

favourably, growing even closer than before. Bookings saw a 22.3% year-on-year

increase to EUR 178.0 (EUR 145.6 million). At the end of the year, the Stow Division

had a backlog of EUR 35.9 million (EUR 24.2 million).

Broken down geographically, euro zone markets again accounted for the largest

portion of net revenues in fiscal 2007 at 55.5%. The rest of Europe including eastern

Europe made up 36.8%, while the growth markets in the Asia Pacific region con-

tributed 7.7% of the Stow Division’s net revenues. A new plant in China scheduled

to open in 2008 will further strengthen Stow’s position in this region. Overall, the

Stow Division plans to expand its global annual production capacity from the current

125 000 tonnes to approximately 140 000 tonnes by financial year 2010.

Stow (Static Storage Systems Division)

Hans De StaerckeHead of the Stow Division

Net revenuesby markets

Euro countries

Other European countries

Asia, Pacific Rim

7.7%

36.8%

55.5%

13

Stow Division

Excellence

Stow is committed to optimizing the benefits

of its high-bay storage solutions, creating

implementations ideally suited to the needs of

global general logistics contractors, manufac-

turers and logistics service companies (ware-

houses) through internal excellence teams.

Efficiency in production

Education and training programmes tailored

to specific processes ensure high efficiency

in production and dependable performance

quality. Processes are steadily optimized

through a continuous improvement pro-

gramme.

Further cost-efficiency gains in series production

With its new production facility in Belgium and the planned second-quarter 2008

opening of a new plant in China, the Stow Division is one of the world’s leading

automated mass producers of static storage systems. Most of Stow’s individually

planned, custom-built high-bay storage solutions are composed of system elements

produced in fully automated processes. Continual efficiency improvements and opti-

mization of production processes are an increasingly crucial factor for success in the

extremely price-sensitive market for static storage systems. Production lines must

meet the most stringent flexibility and throughput time requirements. To meet these

ever stricter production standards, the Stow Division launched a long-term continuous

improvement programme in late 2006, which had already begun to bear fruit during

fiscal 2007.

Stow (Static Storage Systems Division)14

Consolidated key figures for the Stow Division

EUR millions 2007 2006 +/– %

Bookings 178.0 145.6 +22.3

Backlog 35.9 24.2 +48.3


Operating result before depreciation and amortization 13.9 5.2 +167.3


Number of employees 557 546 +2.0

15

Stow Division

Exceptionally high demand

The Stow Division is pursuing a sustainable growth strategy. In the core regions, es-

pecially Europe, Russia and China, Stow is proceeding with investments to successively

expand its market position. Market potential for Stow static storage systems is also

growing as companies with international operations expand their global supply

chains. Competition forces these companies to continually optimize delivery systems

for their customers and increase the efficiency of distribution and warehouse and

transport logistics. They are increasingly using Stow solutions to meet these needs.

Besides transport facilities, the basic infrastructure in new markets increasingly in-

cludes both centralized and regional warehousing facilities, most of which are set

up by general logistics contractors, logistics service companies, bulk distributors,

and major national and international enterprises. With its customized engineering,

a flexible range of systems and efficient assembly structures and the company’s own

and experienced outsourced teams, the Stow Division provides these customers a

one-stop shop for efficient high-bay storage solutions. New system elements for

construction of even higher storage systems incorporating more levels and designed

for heavier items promise additional market potential for Stow.

Looking forward

The Stow Division is committed to moving forward with its successful continuous im-

provement programme. Return on investment and risk of new projects are carefully

balanced. Sales and marketing are supported by new, high-performance sales soft-

ware, and business software systems are being optimized throughout the Division.

Stow will continue to profit from the shifts in global markets and anticipates excep-

tional growth especially in the Eastern European market. There is additional growth

potential in systematically expanding the company’s operations to new industrial and

geographical markets and in a selective extension of the value chain. Stow today is

well situated for long-term profitable growth.

16

Financial statements 2007

Contents

Financial reporting 2007 17–19

Consolidated financial statements

Consolidated income statement 20

Consolidated balance sheet 21

Consolidated cash flow statement 22

Consolidated statement of changes in equity 23

Notes to the consolidated financial statements

General information 24

Significant accounting policies 24–36

Financial risk management 37–38

Segment reporting 40–41

Foreign currency translation 42

Notes to the income statement 43–45

Notes to the balance sheet 46–62

Other information 63–68

Subsidiaries 69–70

Release for publication and approval of the financial statementsEvents after the balance sheet date 70

Report of the group auditors 71

Financial statements of Kardex AG

Income statement 72

Balance sheet 73

Notes to the financial statements 74–78

Proposal for the appropriation of retained earnings 79

Report of the statutory auditors 80

17


Net revenues

Buoyed by the healthy state of international logistics markets, the Kardex Group’s

two continuing divisions, KRM and Stow, performed very well in fiscal 2007. The

Kardex Group’s net revenues increased by 11.4% over comparable figures for 2006

to EUR 422.5 million (EUR 379.1 million). KRM boosted net revenues by 8.5% to

EUR 252.7 million (EUR 233.0 million) while Stow posted a 15.6% gain to EUR

171.2 million (EUR 148.1 million). Geographically speaking, Europe continued to

account for the largest share of net revenues at 85.5% (84.1%). The United States’

contribution to net revenues declined slightly to 7.4% (7.5%), while that of Asian

markets also fell to 7.0% (8.4%).

Operating profit (EBIT)

The Kardex Group posted an 89.2% gain in operating profit (EBIT) for the period

under review to EUR 35.2 million (EUR 18.6 million). The gross margin grew to

25.5% (24.8%), thanks mainly to operational improvements. One-time effects

such as proceeds of EUR 1.2 million from the sale of System Schultheis and EUR

2.1 million from the disposal of AFT also affected operating profit.

The EBIT margin of the continuing divisions improved to 8.3% (4.9%). Investments

in the marketing and sales organization resulted in somewhat higher marketing and

sales expense. A one-time charge of EUR 2.6 million was taken for integration of the

previously autonomous market units Kardex and Megamat. The KRM Division boosted

its EBIT by 25.5% to EUR 24.6 million (EUR 19.6 million), and the Stow Division, having

finally overcome ramp-up difficulties at its new plant, increased EBIT several times

over to EUR 9.8 million (EUR 1.2 million).

Financial result

The financial result worsened, due mainly to exceptionally high bank debt at the start

of fiscal year 2007 in consequence of the large losses sustained by the AFT Division,

later sold, in the previous year. The substantial increase in financial expenses is primarily

attributable to higher average debt over the course of the year and higher margins

for bank financing. The financial result includes a gain of EUR 0.4 million resulting

from a fair-value adjustment of conversion rights. Depending on movements in the

Kardex share price, expenses may also be charged to this line in future. The fair-value

Group

Financial reporting 2007

Chief Financial Officer

18

adjustment has no effect on the Kardex Group’s liquidity. The fair value of the con-

version right posted to financial liabilities will be written to income upon redemption

of the bonds or to shareholders’ equity upon conversion, according to whether the

conversion right is exercised or not. For more information, see notes 4.18 and 4.23

of this Annual Report.

Profit from continued operations

The profit from the continuing divisions outstripped the prior year’s by 71.1% at

EUR 23.1 million (EUR 13.5 million), corresponding to a margin of 5.5% (3.6%).

The tax rate was 22.5% (16.1%).

Profit (consolidated)

Including a negative result of EUR –1.3 million (EUR –46.7 million) from the discontinued

AFT Division, consolidated profit for the Group came to EUR 21.8 million (EUR –33.2

million). Earnings per share for fiscal 2007, based on the average number of out-

standing shares, amounted to EUR 3.87 basic and EUR 3.73 diluted, following

a loss of EUR –5.91 basic and diluted for 2006.

Consolidated balance sheet of the Kardex Group

At 31 December 2007, total assets had declined from the previous year to EUR 252.3

million (EUR 290.6 million). Cash and cash equivalents remained at the same level as

in 2006. The rise in net revenues led to a slight increase in trade accounts receivable.

However, optimization of net current assets resulted in a sharp reduction in inventor-

ies by EUR 11.0 million. As there were no major capital investment projects pending

in 2007, depreciation and amortization along with the disposal of non-current assets

in the sale of System Schultheis actually led to a slight decline in non-current assets.

Of the intangible assets, EUR 28.8 million is goodwill from acquisitions. As required

by the relevant accounting standards, goodwill from acquisitions was subject to no

further depreciation in fiscal 2007; in addition, there was no need for impairments.

Non-current liabilities increased from the previous year’s EUR 26.5 million to EUR

60.0 million. This increase was due to the issue of CHF 55.0 million in convertible

bonds (2007–2011) at 2.25%. The cash from this convertible bond issue was used

to retire bank debt. Cash generated by measures taken to reduce net current assets

was also used to lower current liabilities to EUR 118.1 million (EUR 201.3 million).

In particular, the Kardex Group’s current financial liabilities could be reduced by EUR

52.4 million to EUR 13.5 million (EUR 65.9 million). Net debt was cut significantly

to EUR 38.5 million (EUR 65.8 million). Equity increased by EUR 18.4 million to EUR

74.2 million (EUR 55.8 million) in the year under review. The Kardex Group’s equity

ratio improved considerably to 29.4% (19.2%).

Financial reporting 2007

19

Consolidated cash flow statement

The consolidated cash flow statement shows cash flow from operating activities of

EUR 51.1 million (EUR –9.3 million) for fiscal year 2007. It is gratifying that net current

assets were successfully reduced from the prior year’s level despite the increase in net

revenues. The cash outflows associated with the disposal of AFT led to net cash flow

from investing activities of EUR –22.0 million (EUR –14.2 million). Net cash flow from

financing activities, including an increase in long-term financial liabilities – primarily

from the convertible bond issue – along with a decrease in current financial liabilities,

came to EUR –31.8 million (EUR 27.0 million). In all, cash and cash equivalents de-

clined by EUR –3.2 million (EUR 3.4 million).

Discontinued AFT Division

The AFT Division generated net revenues of EUR 7.9 million (EUR 76.1 million) before

its sale with effect from 21 February 2007. AFT’s result (after taxes) was negative at

EUR –1.3 million (EUR –46.7 million) due to continuing high fixed costs. The disposal

process proceeded according to plan, and outstanding warranties were successively

reduced, reaching EUR 1.0 million by 31 December 2007. The disposal of AFT resulted

in one-time revenues of EUR 2.1 million. From today’s perspective, the remaining

provisions for warranty and contractual risks in connection with the disposal of AFT

are sufficient.

Group

EUR millions Notes 2007 2006


Net revenues 4.1, 4.3

Cost of goods sold and services provided

Gross profit

Marketing and sales expenses

Administrative expenses

Development expenses

Other operating income 4.4

Other operating expenses 4.5

Operating result 4.1

Financial income 4.7

Financial expense 4.8

Fair-value adjustment for conversion right 4.18

Result before tax

Income tax 4.9

Result from continued operations

Result from discontinued operation (after tax) 4.30

Net result

Earnings per share for continued operations

– basic (EUR) 4.25

– diluted (EUR) 4.25

Loss per share Group

– basic (EUR) 4.25

– diluted (EUR) 4.25

20

Consolidatedincome statement

422.5

–314.7

107.8

–46.9

–23.5

–2.7

6.5

–6.0

35.2

1.0

–6.8

0.4

29.8

–6.7

23.1

–1.3

21.8

4.11

3.97

3.87

3.73

379.1

–285.0

94.1

–46.4

–25.8

–2.3

1.2

–2.2

18.6

1.0

–3.5

–

16.1

–2.6

13.5

–46.7

–33.2

2.40

2.40

–5.91

–5.91

21

Group

Consolidatedbalance sheet

EUR millions Notes 31.12.2007 31.12.2006

Property, plant and equipment 4.10

Goodwill 4.10, 4.11

Other intangible assets 4.10

Financial assets 4.12

Deferred tax assets 4.13

Non-current assets

Inventories and construction contracts 4.14

Trade accounts receivable 4.15

Income tax receivables

Other receivables and prepaid expenses 4.16

Cash and cash equivalents 4.17

Assets held for sale 4.10, 4.30

Current assets

Assets

Share capital

Reserves

Treasury shares

Equity

Non-current financial liabilities 4.18

Pension liabilities 4.19

Deferred tax liabilities 4.13

Non-current provisions 4.20

Other non-current liabilities

Non-current liabilities

Trade accounts payable

Current financial liabilities 4.18

Income tax payables

Current provisions 4.20

Other current liabilities and accruals 4.21

Liabilities related to assets held for sale 4.30

Current liabilities

Liabilities

Equity and liabilities

61.8

28.8

4.2

0.6

4.5

99.9

27.0

90.6

0.8

7.3

24.8

1.9

152.4

252.3

48.7

26.6

–1.1

74.2

49.8

6.9

2.7

0.6

–

60.0

57.7

13.5

3.7

11.5

31.7

–

118.1

178.1

252.3

67.1

28.8

3.7

0.6

5.8

106.0

38.0

85.8

0.2

8.1

23.7

28.8

184.6

290.6

48.7

7.1

–

55.8

23.6

6.1

2.9

0.7

0.2

33.5

50.1

65.9

2.9

8.0

31.9

42.5

201.3

234.8

290.6

EUR millions Notes 2007 2006

Operating result (incl. discontinued operation) 4.1

Depreciation and impairment losses on property, plant andequipment, and intangible assets

Result of measuring current assets at fair value less costs to sell

Changes in provisions and pension liabilities

Fair-value adjustment for conversion right 4.18

Other non-cash items

Cash flow before change in net current assets

Change in net current assets

Cash flow from operating activities

Taxes paid

Net cash flow from operating activities

Purchase of property, plant and equipment

Sale of property, plant and equipment

Purchase of intangible and financial assets

Sale of intangible and financial assets

Acquisition of companies 4.30

Disposal of subsidiaries and divisions 4.30

Interest received

Net cash flow from investing activities

Purchase of treasury shares

Increase in long-term financial liabilities

Repayment of long-term financial liabilities

Increase in current financial liabilities

Decrease in current financial liabilities

Interest paid

Net cash flow from financing activities

Effect of exchange rate changes on cash and cash equivalents

Net change in cash and cash equivalents

Cash and cash equivalents at 1 January

Cash and cash equivalents at 31 December

– thereof continued operations 4.17

– thereof discontinued operation

Net change in cash and cash equivalents, Group

22

Consolidatedcash flow statement

34.1

9.2

–

4.3

–0.4

1.6

48.8

7.8

56.6

–5.5

51.1

–5.0

0.1

–1.5

0.1

–0.6

–16.1

1.0

–22.0

–1.1

32.7

–6.6

1.4

–53.8

–4.4

–31.8

–0.5

–3.2

28.0

24.8

24.8

–

–3.2

–25.2

17.1

15.0

6.0

–

–4.4

8.5

–14.8

–6.3

–3.0

–9.3

–14.3

2.0

–2.7

0.5

–

–

0.3

–14.2

–

1.2

–3.5

46.4

–12.8

–4.3

27.0

–0.1

3.4

24.6

28.0

23.7

4.3

3.4

23

Group

Consolidated statementof changes in equity

EUR millions

31 December 2005 48.7 79.3 –38.7 – 1.0 41.6 – 90.3

Exchange rate differences1 – – – – –1.3 –1.3 – –1.3

Income and expense recognized directly in equity – – – – –1.3 –1.3 – –1.3

Net result – – –33.2 – – –33.2 – –33.2

Total recognized income and expense – – –33.2 – –1.3 –34.5 – –34.5

Treasury shares2 – – – – – – – –

31 December 2006 48.7 79.3 –71.9 – –0.3 7.1 – 55.8

Exchange rate differences1 – – – – –2.4 –2.4 – –2.4

Hedging transactions – – – 0.1 – 0.1 – 0.1

Income and expense recognized directly in equity – – – 0.1 –2.4 –2.3 – –2.3

Net result – – 21.8 – – 21.8 – 21.8

Total recognized income and expense – – 21.8 0.1 –2.4 19.5 – 19.5

Treasury shares2 – – – – – – –1.1 –1.1

31 December 2007 48.7 79.3 –50.1 0.1 –2.7 26.6 –1.1 74.2

1 This item also includes the exchange rate differences arising from net investments in foreign operations less deferred tax.2 All outstanding treasury shares were used in fiscal year 2006 to compensate the Board of Directors.

In the course of financial 2007, Kardex AG purchased treasury shares in the amount of EUR 1 075 thousand (2006: EUR 2,7

thousand).3 5 627 453 bearer shares at par value CHF 13.50 on 31 December 2007 and 2006.

Sharecapital3

Capitalreserves

Retainedearnings

Cum

ulativetrans-

lationdifferences

Hedging

reserves

Totalreserves

Treasuryshares

Equity

24

1. General informationThe consolidated financial statements of the Kardex Remstar Group include Kardex

AG (referred to as the “Company”) and its subsidiaries (referred to collectively as the

“Group”). Kardex AG is the Group’s parent company, a limited company under Swiss

law, which is registered and domiciled in Zurich, Switzerland. The Company is listed

on the SWX Swiss Exchange.

The Group’s financial statements are prepared in accordance with International

Financial Reporting Standards (IFRS) and comply with Swiss law.

2. Significant accounting policies

2.1 Changes in accounting policies

Effective from 1 January 2007, Kardex applies the following amended or new stand-

ards and interpretations published by the IASB:

– IFRS 7 “Financial Instruments: Disclosures”

– IAS 1 “Presentation of Financial Statements: Notes on Equity”

– IFRIC 7 “Applying the Restatement Approach under IAS 29 – Financial Reporting

in Hyperinflationary Economies”

– IFRIC 8 “Scope of IFRS 2”

– IFRIC 9 “Reassessment of Embedded Derivatives”

– IFRIC 10 “Interim Financial Reporting and Impairment”

Other than additional disclosures under particular standards, the amendments do

not affect the consolidated financial statements.

Notesto the consolidated financial statements

25

2.2 Future changes in accounting policies

The following new and revised standards and interpretations have been issued but

will only become effective later and have not been early adopted in these consolidated

financial statements. Their effects on the Kardex consolidated financial statements

have not yet been systematically analyzed and the expected effects are merely an

initial estimate on the part of the Management Board.

– IFRS 3 “Business Combinations” (from 2010)

– IFRS 8 “Operating Segments” (from 2009)

– IAS 1 “Presentation of Financial Statements” (from 2009)

– IAS 23 “Borrowing Costs” (from 2009)

– IAS 27 “Consolidated and Separate Financial Statements” (from 2010)

– IFRIC 11 “IFRS 2: Group and Treasury Share Transactions” (from 2008)

– IFRIC 12 “Service Concession Arrangements” (from 2008)

– IFRIC 13 “Customer Loyalty Programmes” (from 2009)

– IFRIC 14 “The Limit on a Defined Benefit Asset, Minimum Funding Requirements

and their Interaction” (from 2008)

No material impact on the consolidated financial statements is anticipated from

these changes other than additional disclosures or changes in presentation.

2.3 Basis of preparation

Consolidation is based on the individual Group companies’ audited financial state-

ments, prepared on a consistent basis. Balance sheet date for all Group companies is

31 December. The consolidated financial statements are prepared on a historical cost

basis with the exception of the following assets and liabilities, which are stated at

their fair value:

– derivative financial instruments

– financial instruments and financial assets held for trading

– financial instruments and financial assets classified as available for sale

Non-current assets (disposal groups) held for sale are stated at the lower of their

carrying amount or fair value less costs to sell.

Group

26

2.4 Significant estimates

Preparing the consolidated financial statements requires management to make esti-

mates and assumptions that affect reported earnings, expenses, assets, liabilities and

contingent liabilities at the date of the financial statements. If these estimates and

assumptions, made by management to the best of their knowledge at that date,

subsequently transpire to diverge from the facts, the original estimates and assump-

tions are adjusted for the year in which the circumstances changed.

2.4.1 Impairment of non-current assets

Apart from the periodic assessment of goodwill, the value of tangible assets and in-

tangible assets is also reassessed when their carrying amount may no longer be

covered as a result of events or changed circumstances. If such a situation arises, the

value of the asset that could be recovered on the basis of expected future earnings is

calculated. This is equivalent either to the present value of expected net future cash

flows or the expected net sales price. If these values are lower than the current

carrying amount, the latter is reduced to the same level as the newly calculated value.

This impairment is recognized in the income statement. Assumptions important in

these calculations are growth rates, margins and discount rates. The cash flows

effectively achieved may differ considerably from the projected and discounted

future values. Furthermore, an asset’s useful life may decrease or its value impaired

if property, plant and equipment are put to a different use, production facilities are

relocated or relinquished or the medium-term inflow of revenues is lower than

expected. The carrying amounts of property, plant and equipment, and of intangible

assets, are stated in note 4.10.

2.4.2 Employee retirement benefit plans

Kardex maintains various types of employee retirement benefit plans. The majority

of the company’s employees are covered by these plans. In order to measure

liabilities and expense, it is first necessary to establish from an economic point of

view whether the plans are defined contribution or defined benefit plans. In the case

of defined benefit plans, assumptions are made in order to estimate future develop-

ments. These include assumptions and estimates regarding the discount rates,

the expected return on plan assets in the various countries and expected wage in-

crease rates. The actuaries also use statistical data, such as mortality tables and staff

turnover rates in the actuarial calculations they perform with a view to determining

employee benefit obligations. If these parameters shift as a result of changes in the

economic situation or new conditions in the markets, subsequent results may differ

significantly from the actuarial reports and calculations. In the medium term, these

can have a considerable influence on the expenses and income pertaining to em-

ployee retirement benefit plans. The carrying amount of pension assets and liabilities

is explained in note 4.19.


27

2.4.3 Provisions for warranties and onerous contracts

In the course of their day-to-day operations, Group companies may become involved

in litigation. Provisions for pending cases are made on the basis of the realistic

expected cash outflow as indicated by the information available. Depending on the

outcome of these cases, claims against the Group may arise that are not covered, or

not completely covered, by provisions or insurance policies. The carrying amount of

these provisions is explained in note 4.20.

2.4.4 Income tax

Income tax liabilities are measured based on the current interpretation of tax laws in

force in the countries in question, the accuracy of these calculations being confirmed

(or otherwise) by the final assessment or following an audit by the tax authorities.

The latter can result in significant changes to the actual tax expense. Furthermore,

the assessment regarding the capitalization of tax loss carryforwards requires a critical

estimation of the probability of their being able to be set off against future profits,

which are dependent on many different influences and developments.

2.5 Consolidation principles

The consolidated financial statements include Kardex AG as well as all domestic

and foreign subsidiaries in which the Company holds a direct or indirect ownership.

Acquisitions are accounted for using the purchase method.

All subsidiaries in which the Group controls more than 50% of the voting stock or

is able to exercise a controlling influence on the company’s operating or financial

policies are accounted for using the full consolidation method, which incorporates

assets and liabilities as well as revenues and expenses in their entirety. Minority inter-

ests in equity and net result are stated separately. Negative minority interests are at-

tributed to the main shareholders if there is no binding obligation on the minority

shareholder to inject further capital equal to his share of the negative equity when

called upon to do so, or if he were unable to do so.

Companies acquired or sold are included in the consolidated financial statements

from the date of acquisition or until the date of sale. Intra-group balances, trans-

actions and profits not realized by third parties are eliminated in the consolidation

process.

Investments in associated companies in which the Group has a significant but not

controlling interest as well as joint ventures are accounted for using the equity

method. As required by this method, proportional profits or losses, as well as net

assets, are recognized in the Group’s financial statements.

Group

28

2.6 Foreign currency translation

2.6.1 Functional and reporting currency

The consolidated financial statements are presented in million euros. The euro is

Kardex AG’s functional currency and the reporting currency of the Group. The func-

tional currency of a subsidiary is the currency of its primary operating environment.

2.6.2 Foreign currency transactions

Foreign currency transactions are translated into a Group company’s functional cur-

rency using the exchange rates prevailing at the dates of the transactions. Foreign

exchange gains and losses resulting from the translation of monetary assets and

liabilities denominated in foreign currencies are recognized in the income statement,

unless they relate to cash flow hedges and are thus recognized in equity.

2.6.3 Financial statements of subsidiaries

The assets and liabilities of subsidiaries whose financial statements are prepared in

currencies other than the euro are converted for consolidation purposes as follows:

– Assets and liabilities are converted on balance sheet date at the exchange rate

prevailing on that date.

– Revenues and expenses as well as cash flows are converted at the average

exchange rate.

– Equity is converted at historical rates.

All resulting translation differences (with the exception of cash flows) are shown

separately under equity (cumulative translation differences). If a subsidiary is sold, its

cumulative translation differences are included in the income statement as a part of

the profit or loss arising from the sale.

2.6.4 Net investment in subsidiaries

Exchange differences arising from the translation of net investments in subsidiaries or

of financial liabilities and other currency instruments used to hedge such investments

are recognized, net of deferred tax, in equity (cumulative translation differences) and

do not affect the income statement. If a subsidiary is sold, the cumulative translation

differences are included in the income statement as a part of the profit or loss arising

from the sale.


29

2.7 Derivative financial instruments and hedging transactions

The Group uses derivative financial instruments exclusively to hedge its exposure

to foreign exchange and interest rate risks arising from operational, financing and

investment activities. Derivative financial instruments are recognized at fair value

when contracts are entered into and in subsequent reporting periods. Recognition

of the resulting gains or losses depends on whether the derivate qualifies for hedge

accounting or is reported for trading purposes.

– Derivatives that do not qualify for hedge accounting: changes resulting from

revaluation of derivatives are recognized directly in the income statement.

– Hedging transactions: changes in the fair value of a derivative financial instrument

that qualifies as a fair-value hedge and proves to be highly effective are recognized,

together with the change in fair value of the hedged balance sheet position, in the

income statement. The effective part of the changes in the fair value of a derivative

financial instrument that qualifies as a cash flow hedge in a highly effective hedging

transaction, are recognized directly in equity. If the forecasted transaction leads to

the subsequent recognition of a non-financial item in the balance sheet – property,

plant and equipment, for example – the gains or losses resulting from fair-value

changes previously included in equity are transferred to the appropriate balance

sheet item. Changes in value resulting from cash flow hedges recognized directly

in equity are transferred to the income statement in the period in which the cash

flow (e.g. interest payments) from the hedged transaction affects the income state-

ment.

2.8 Property, plant and equipment

2.8.1 Owned assets

Items of property, plant and equipment are stated at acquisition or construction cost

less accumulated depreciation and impairment losses. Where parts of an item of

property, plant and equipment have different useful lives, they are accounted for as

separate components of property, plant and equipment. Borrowing costs related to

an asset under construction are not capitalized.

2.8.2 Leased assets

Leasing agreements in which the Group assumes the risks and rewards of ownership

are treated as finance leases. These assets are stated at an amount equal to the lower

of their fair value or the present value of the minimum lease payments at the begin-

ning of the lease, less accumulated depreciation and impairment loss. Obligations

arising from finance leasing are recognized as liabilities.

2.8.3 Subsequent costs

Major renovation or modernization work, as well as expenses that extend the

estimated useful life of property, plant or equipment, are capitalized. Repairs and

maintenance costs are recognized directly under operating expenses.

Group

30

2.8.4 Depreciation

Depreciation is charged to the income statement on a straight-line basis over the

following estimated useful lives:

Buildings 25–50 years

Machinery and production tools 4–10 years

Equipment and vehicles 6–12 years

Information technology 3 years

Depreciation expense is included in cost of goods sold and services provided,

marketing and sales expenses, administrative expenses and development expenses.

The residual value is reviewed annually. Profits and losses arising from the sale of

property, plant and equipment are recognized in the income statement.

2.9 Intangible assets

2.9.1 Goodwill

Goodwill, the difference between the cost of acquisitions and the fair value of the

net assets acquired, results from the purchase of subsidiaries, associates and joint

ventures. All business combinations are accounted for using the purchase method.

2.9.2 Research and development

Expenditure on research activities related to new technologies or know-how is

recognized in the income statement as an expense, as incurred.

Development costs which relate to the design or production of new or substantially

improved products and processes, are capitalized if the product or process is technic-

ally and commercially feasible and the Group has sufficient resources to complete

development. Development costs are stated at cost less accumulated amortization

and impairment losses.

2.9.3 Other intangible assets

Other intangible assets are stated at cost less accumulated amortization and

impairment losses.

2.9.4 Subsequent expenditure

Subsequent expenditure on existing intangible assets is capitalized only when it

increases the future economic benefits of the assets. All other expenditure is

expensed at the time incurred.


31

2.9.5 Amortization

Amortization of intangible assets is charged to the income statement on a straight-

line basis over their estimated useful lives. Goodwill and intangible assets with an in-

definite useful life are not amortized. Amortization of intangible assets begins at the

date they are available for use. The estimated useful lives are as follows:

Capitalized development costs 3 years

Licences and patents 5 years

Capitalized software 5 years

Other intangible assets 5 years

Amortization is included in cost of goods sold and services provided, marketing and

sales expenses, administrative expenses and development expenses.

2.10 Financial assets

Financial assets are measured as follows:

– financial assets held for trading purposes at fair value, whereby changes

in the fair value are immediately recognized in the income statement

– loans and receivables at amortized cost, whereby the difference between

the issue and repayment amount is recognized in the income statement

using the effective interest method over the period to maturity

– investments held to maturity at amortized cost

– financial assets available for sale at fair value, whereby unrealized gains and losses

are recognized directly in retained earnings: in the event of their sale or impairment,

they are transferred to the income statement

The classification of financial assets depends on the purpose for which they were

acquired. Management determines the classification at initial recognition.

2.11 Impairment of assets

Goodwill and other intangible assets that have an indefinite useful life are tested

annually for impairment. Property, plant and equipment and other non-current assets,

including intangible assets with indefinite and finite useful lives as well as goodwill,

are tested for impairment whenever there are indications that their carrying amount

may exceed their recoverable amount. If the carrying amount exceeds the recoverable

amount, an impairment loss is recognized. The recoverable amount is either the

asset’s fair value less costs to sell or the value in use of the asset based on expected

future cash flow, whichever is higher.

Group

32

2.12 Trade accounts receivable

Trade accounts receivable are stated at amortized cost, which is normally equivalent

to their nominal value. In cases where it is doubtful whether the receivable is recov-

erable, an adjustment is made based on the estimated recoverable amount.

2.13 Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is calculated

on a weighted-average basis and includes purchase cost as well as the transport of

inventories. In the case of inventories manufactured by the Group, production

costs also include an appropriate share of overhead. Adjustments are made for items

lacking marketability and for slow-moving items.

2.14 Construction contracts

Provided that the revenues and expenses arising from construction contracts can

be reliably estimated, revenues are recognized using the percentage-of-completion

method: the revenues and expenses are recognized in the income statement propor-

tionately to the stage of completion. The stage of completion is determined using

the cost-to-cost method, i.e. by calculating the ratio between the project costs

incurred to date and the estimated overall costs of the project. Expected losses from

construction contracts are immediately recognized in the income statement.

2.15 Cash and cash equivalents

Cash and cash equivalents comprise cash balances, postal and bank account balances

and other liquid investments with a maximum total maturity of three months.

2.16 Treasury shares

If the Company repurchases its own shares, the payments, including directly related

costs, are deducted from equity. Any gains or losses arising from transactions with

treasury shares are recognized within capital reserves.

2.17 Dividends

Dividends are recognized as a liability in the period in which they are approved.


33

2.18 Liabilities

Liabilities are initially stated at fair value less any transaction costs and subsequently

at amortized cost. Differences between the cash inflow (after deduction of transaction

costs) and the redemption amount are recognized in the income statement using the

effective interest method during the liability’s term.

2.19 Employee benefits

There are several employee pension plans within the Group, each of which complies

with legal requirements for the country in question. These plans are funded by contri-

butions from employees and employers.

2.19.1 Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognized

as an expense in the income statement, as incurred. The recognized expense is the

employer’s contributions.

2.19.2 Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated separately

for each plan. The pension cost is calculated annually by actuaries using the projected

unit credit method. The obligation is discounted to the present value and offset with

the fair value of any plan assets. The discount rate applied is the interest rate for

liabilities prevailing on balance sheet date, with similar maturities to the pension obli-

gations of the Group. Any surplus or deficit in the fair value of plan assets compared

with the present value of the defined benefit obligation is stated in the balance sheet

as an asset or liability after taking into account all unrecognized actuarial gains or

losses and past service costs. However, an asset is only capitalized to the extent in

which a future economic benefit is available to the Group.

All actuarial gains and losses were recognized upon transition to IFRS at 1 January

2004. Actuarial gains and losses arising subsequent to 1 January 2004 are accounted

for using the corridor method, i.e. to the extent they exceed the higher of 10% of

the present value of the defined benefit obligation or the fair value of plan assets.

Such gains or losses are recognized over the expected average remaining working

lives of the employees participating in the plan.

2.19.3 Other long-term benefits to employees

Other long-term benefits to employees include deferred compensations which Group

companies are legally obliged to pay in the countries in question. The cost of these

benefits is calculated on an actuarial basis and provided for at their present value

under personnel expenses.The corresponding obligations are included in the position

pension liabilities.

Group

34

2.20 Provisions

Provisions are made

– insofar as the Group has, or may have, an actual or possible obligation (legal or

constructive) due to past events,

– insofar as it is probable that settlement of this obligation will lead to an outflow of

resources,

– insofar as the extent of the obligation can be reliably estimated.

2.20.1 Warranties

The provision for warranty risks from the sale of products and services is based on

information about warranties from earlier periods and available production data.

2.20.2 Restructuring

Restructuring costs are provided for in the period in which an official, detailed

restructuring plan is available to the Group, which is implemented or publicly

announced. No provision is made for future operating losses. Restructuring costs

are recognized/presented under other operating expenses.

2.20.3 Site restoration

Provisions are made when an obligation to restore a site becomes probable and the

costs can be estimated.

2.20.4 Onerous contracts

A provision for onerous contracts is recognized when the Group’s expected benefits

to be derived from a contract are lower than the estimated cost of meeting its obli-

gations under the contract.

2.21 Trade accounts payable and other current liabilities

Trade accounts payable and other current liabilities are stated at amortized cost,

which is normally equivalent to their nominal value.

2.22 Revenues from goods sold and services rendered

Net revenues include all revenues from products sold and services provided less items

such as rebates, other agreed discounts and value-added tax. Revenue from the sale

of goods is recognized when the risks and rewards of ownership have transferred

to the buyer. Provided that income and expenses arising from construction contracts

can be reliably estimated, the resulting revenues are reported using the percentage-

of-completion method. Revenues from services are recognized according to the stage

of completion. No revenue is recognized if there is significant uncertainty regarding

recovery of the consideration due, associated costs or the possible return of goods.


35

2.23Government grants

Asset-related government grants are deducted from the carrying amount of the

asset. Government grants are recognized as income during the period in which the

subsidized expenses are incurred.

2.24Operating lease payments

Payments made under operating leases are recognized in the income statement

using a straight-line basis over the term of the lease.

2.25 Finance lease payments

Minimum lease payments are allocated between the financing costs and repayment

of the principal. The finance costs are allocated to each period during the lease term to

produce a constant periodic rate of interest over the term of the liability.

2.26 Financing

Net financing costs comprise interest expense for the convertible bond, on borrowings

and finance leasing, interest earned on investments, earnings and expenses from

discounts, gains and losses from foreign currency translation, as well as gains and

losses from derivative financial instruments used for exchange rate hedging, all of

which are recognized in the income statement. Interest income and expense are rec-

ognized in the income statement as they accrue, using the effective interest method.

2.27 Income tax

Income tax comprises current and deferred tax. Income tax is recognized in the in-

come statement unless it relates to items recognized directly in equity. Current tax is

the expected tax payable on the taxable income for the year and any adjustment to

tax payable related to previous years. Income tax is calculated using tax rates already

in force or substantially enacted at the balance sheet date. Deferred tax is calculated

using the balance sheet liability method on the basis of tax rates already in force or

substantially enacted at the balance sheet date and is based on temporary differences

between IFRS carrying amounts and the tax base. Tax benefits on future taxable in-

come resulting from tax losses carried forward and other temporary differences are

recognized only to the extent to which it is probable that future taxable profits will

be available.

Group

2.28 Segment reporting

The primary segment reporting format is the Group’s internal organization, manage-

ment and financial reporting structure; the secondary segment reporting format is its

geographical structure. Segment results are determined at an operating result level.

Operating assets and liabilities that relate either directly to the segments, or which

can be allocated on a reasonable basis, are stated in the corresponding divisions or

geographical markets. Intra-group transactions are effected on an arm’s length basis.

Eliminations relate to internal balances between the divisions or with Group head-

quarters.

Beginning on 21 February 2007, the Group now consists only of the following two

segments:

– The Dynamic Storage and Retrieval Systems Division (KRM) is primarily involved in

the production, worldwide distribution, assembly and maintenance of dynamic

storage, retrieval and distribution systems. These logistics solutions are established

under the Kardex, Remstar and Megamat (KRM) brands and are used in industrial

manufacturing, commerce and administration.

– The core activity of the Static Storage Systems Division (Stow) is the manufacturing

and distribution of the storage solutions typically used in high-bay warehouses.

Its most important customer groups include general contractors specializing in

logistics, large corporations and logistics service suppliers (warehouses).

The Industrial Automation and Conveyor Technology Division (AFT) was sold on

21 February 2007 (see also note 4.30).

36 Notes to the consolidated financial statements

37

3. Financial risk managementThe various risk positions arising from existing assets and liabilities as well as from

future commitments are recorded and managed centrally at Group level. Derivative

financial instruments are used only to hedge exposure to fluctuation in foreign ex-

change rates and interest rates.

3.1 Credit risk

The Group has a credit policy and risk is continually monitored by local management.

An external credit report is always obtained for new customers. For existing customers

a recurring credit assessment is made upon reaching a certain threshold. As a matter

of policy, down payments are required for large orders. Significant business activities

in the international environment and activities in high-risk countries are generally

secured by bank guarantees or letters of credit.

Investments are allowed only in liquid securities and only with high-credit-quality

financial institutions. Transactions involving derivative financial instruments are with

counterparties who have a sound credit rating. Given the counterparties’ high credit

ratings, management expects all of them to meet their obligations.

At balance sheet date no significant concentration of credit risk existed. The

maximum exposure to credit risk is shown in the carrying amount of each financial

asset, including derivative financial instruments, in the balance sheet.

3.2 Liquidity risk

Prudent liquidity risk management requires that the Group maintains sufficient cash

and cash equivalents and the availability of funding through an adequate level of

contractual credit facilities. The Group has agreed sufficient credit lines with its credit

institutions. Furthermore, the Group engages in rolling liquidity planning based on

expected cash flows.

As at the balance sheet date, the following cash balances and credit lines are available:

EUR millions 31.12.2007 31.12.2006

Cash and cash equivalents 24.8 28.0

Lines of credit 103.4 146.2

Lines of credit utilized –37.7 –113.5

Total liquidity reserves and lines of credit 90.5 60.7

For fiscal year 2008 and following years, the Kardex Group anticipates a positive net

inflow of cash from operations.

Group

38

3.3 Foreign currency risk

The Group is exposed to foreign currency risk in respect of sales, purchases and bor-

rowing in currencies other than the functional currency of each company. The primary

currencies for which risk exposure exists are the Swiss franc, British pound sterling

and the US dollar.

The Group utilizes forward contracts and, in the case of the convertible bond, an

interest rate and currency swap to partially hedge against exchange rate risk. The

forward currency contracts mature in less than one year from the balance sheet date.

If necessary, currency contracts will be renewed at maturity. In addition, there is a

foreign currency effect from translation of the financial statements of the subsidiaries

into the currency of this report, the euro.

The Kardex Group does not conduct business in currencies that are exceptionally

volatile or otherwise regarded as unusually risky.

3.4 Interest rate risk

The Group takes out long- and short-term loans at both floating and fixed interest

rates. Group treasury is responsible for monitoring interest rate movements continu-

ously and for optimizing future interest expenses.

As a means of partially hedging interest rate risk, the Group uses interest rate swaps.

Interest rate swaps have maturity dates more than a year after balance sheet date.

If necessary, interest rate swaps are renewed at maturity.

3.5 Capital management

The Group manages its capital with the aims of ensuring adequate liquidity and of

optimizing the ratio of equity to debt capital. The Management Board and Board of

Directors review the capital structure every six months, addressing capital costs and

associated risk. The Group has a target equity ratio of at least 30%. This target capital

structure was not achieved due to losses from the division sold on 21 February 2007.

The Group’s overall strategy is unchanged since fiscal year 2006.


39

Group


4. Detailed information on the consolidated financial statements

4.1 Segment reporting

Primary segment reporting format 2007: business segments

Secondary segment reporting format 2007: geographical segments

KRM1 Stow1 Other/ Elimin- Con- AFT Elimin- GroupFinance2 ations tinued (discon- ations

oper- tinued)EUR millions ations

Bookings 258.2 178.0 – – 436.2 9.2 – 445.4

Order backlog 71.9 35.9 – – 107.8 – – 107.8

Net revenues, third party 252.7 169.8 – – 422.5 7.9 – 430.4

Net revenues, with other divisions – 1.4 – –1.4 – – – –

Segment net revenues 252.7 171.2 – –1.4 422.5 7.9 – 430.4

Operating result 24.6 9.8 0.8 – 35.2 –1.1 – 34.1

In per cent of segment net revenues 9.7 5.7 – – 8.3 – – 7.9

Operating result before depreciation,amortization and impairment 29.7 13.9 0.8 – 44.4 –1.1 – 43.3


Segment assets 128.9 113.4 10.0 – 252.3 – – 252.3

Segment liabilities 61.9 68.9 47.3 – 178.1 – – 178.1

Capital expenditure 4.3 3.2 0.1 – 7.6 – – 7.6

Depreciation and amortization of property,plant and equipment and intangible assets 5.1 4.1 – – 9.2 – – 9.2

Impairments – – – – – – – –

Employees 1 315 557 11 – 1 883 – – 1 883

Euro Other North, Asia, Others Groupcountries European Central, Pacific Rim

countries SouthEUR millions America

Net revenues, third party 246.4 119.8 32.6 31.4 0.2 430.4

Segment assets 183.7 44.4 14.0 10.2 – 252.3

Capital expenditure 5.5 0.2 0.2 1.7 – 7.6

1 In contrast to last year’s Annual Report, two small companies that used to be shown under Stow are now assignedto the KRM segment. Where necessary, the previous year’s figures for segment reporting have been restated.

2 This column shows mainly the revenues and expenses, together with the assets and liabilities, of the parent company,together with other amounts not allocable to individual divisions.

41

Group

Primary segment reporting format 2006: business segments

Secondary segment reporting format 2006: geographical segments

KRM1 Stow1 Other/ Elimin- Con- AFT Elimin- GroupFinance2 ations tinued (discon- ations

oper- tinued)EUR millions ations

Bookings 242.4 145.6 – – 388.0 65.8 – 453.8

Order backlog 64.3 24.2 – – 88.5 35.9 – 124.4

Net revenues, third party 232.9 146.9 – –0.7 379.1 76.1 – 455.2

Net revenues, with other divisions 0.1 1.2 – –1.3 – – – –

Segment net revenues 233.0 148.1 – –2.0 379.1 76.1 – 455.2

Operating result 19.6 1.2 –1.6 –0.6 18.6 –44.4 0.6 –25.2

In per cent of segment net revenues 8.4 0.8 – – 4.9 – – –

Operating result before depreciation,amortization and impairment 25.4 5.2 –1.5 –0.6 28.5 –22.2 0.6 6.9


Segment assets 138.4 112.3 13.4 –1.3 262.8 27.8 – 290.6

Segment liabilities 46.6 52.6 102.2 –1.3 200.1 34.7 – 234.8

Capital expenditure 10.1 17.0 – – 27.1 – – 27.1

Depreciation and amortization of property,plant and equipment and intangible assets 5.8 4.0 0.1 – 9.9 1.6 – 11.5

Impairments3 – – – – – 20.6 – 20.6

Employees 1 270 546 16 – 1 832 299 – 2 131

Euro Other North, Asia, Others Groupcountries European Central, Pacific Rim

countries SouthEUR millions America

Net revenues, third party 261.8 112.9 34.9 45.0 0.6 455.2

Segment assets 209.3 47.4 13.3 12.0 8.6 290.6

Capital expenditure 23.4 0.8 0.2 2.7 – 27.1

1 In contrast to last year’s Annual Report, two small companies that used to be shown under Stow are now assignedto the KRM segment. Where necessary, the previous year’s figures for segment reporting have been restated.

2 This column shows mainly the revenues and expenses, together with the assets and liabilities, of the parent company,together with other amounts not allocable to individual divisions.

3 The impairment amounts to EUR 5.6 million on property, plant and equipment, and intangible assets and EUR 15.0 millionon current assets.

42

4.2 Foreign currency translation

The main exchange rates for currency translation are:

Average rates Year-end rates

2007 2006 31.12.2007 31.12.2006

1 CHF (Swiss franc) 0.609 0.636 0.605 0.622

1 GBP (pound sterling) 1.462 1.467 1.357 1.490

1 USD (US dollar) 0.731 0.797 0.679 0.760

A change of +/– 5% in the currencies listed above relative to the euro would have

the following effect on equity and net profit (excluding tax effects):

31.12.2007 Result

EUR millions +5% –5%

CHF –0.1 0.1

GBP – –

USD –0.1 0.1

31.12.2006

EUR millions

CHF –0.1 0.1

GBP –0.1 0.1

USD – –


The following foreign currency accounts existed at the balance sheet date (not consolidated; does not include hedged accounts):

31.12.2007, EUR millions CHF EUR GBP USD Other Total

Non-current assets – 0.9 0.9 – – 1.8

Current assets 0.9 3.4 – 1.0 – 5.3

Total financial assets 0.9 4.3 0.9 1.0 – 7.1

Non-current financial liabilities – 0.3 1.3 – – 1.6

Current financial liabilities 2.5 9.3 – – – 11.8

Total financial liabilities 2.5 9.6 1.3 – – 13.4

Net exposure –1.6 –5.3 –0.4 1.0 – –6.3

31.12.2006, EUR millions CHF EUR GBP USD Other Total

Non-current assets – 0.8 1.0 1.4 – 3.2

Current assets – 2.0 – 0.2 0.4 2.6

Total financial assets – 2.8 1.0 1.6 0.4 5.8

Non-current financial liabilities 0.3 0.1 1.4 – – 1.8

Current financial liabilities – 6.4 0.4 – – 6.8

Total financial liabilities 0.3 6.5 1.8 – – 8.6

Net exposure –0.3 –3.7 –0.8 1.6 0.4 –2.8

43

Group

4.3 Net revenues


Products 350.8 312.6

Software 9.4 9.3

Services 62.3 57.2

Total net revenues 422.5 379.1

4.4 Other operating income


Gains from the sale of non-current assets 0.2 0.1

Gains from disposal of subsidiaries and divisions 3.3 –

Other income 3.0 1.1

Total Other operating income 6.5 1.2

4.5 Other operating expenses


Losses from the sale of non-current assets –0.3 –0.1

Restructuring costs –2.6 –

Other expenses –3.1 –2.1

Total Other operating expenses –6.0 –2.2

4.6 Personnel expenses


Salaries and wages –70.8 –68.4

Social security contributions –17.7 –17.2

Expenses for defined benefit plans –1.6 –1.4

Expenses for defined contribution plans –0.4 –0.1

Other personnel expenses –5.2 –6.4

Total personnel expenses –95.7 –93.5

44

4.7 Financial income


Interest income1 1.0 0.7

Foreign exchange gains, net – 0.1

Other financial income – 0.2

Total financial income 1.0 1.0

1 Incl. discounts received.

4.8 Financial expenses


Interest expense1 –5.6 –3.0

Exchange rate losses, net –0.3 –

Other financial expenses –0.9 –0.5

Total financial expenses –6.8 –3.5

1 Incl. discounts granted.

4.9 Income tax


Current tax –5.7 –4.3

Deferred tax –1.0 1.7

Total income tax continued operations –6.7 –2.6

Total income tax discontinued operation – –0.2

Total income tax –6.7 –2.8

Analysis of tax expense (incl. discontinued operation)


Result before tax 28.4 –30.4

Expected tax expense based onweighted average tax rates 44.7% –12.7 21.4% 6.5

Effect of expenses not deductiblefor tax purposes 0.2 4.0

Changes in tax rates –4.2 –

Effect of tax assets not capitalized 10.8 –13.4

Tax deducted at source –0.2 0.1

Restatements from prior year –0.4 –

Others –0.2 –

Effective tax expense 23.6% –6.7 –9.2% –2.8


45

The calculated tax rate for the expected tax expense is the weighted (based on the

individual Group companies’ contribution to profit) average of local tax rates. These

range from 10.0% to 40.0%. The change in the expected tax rate to 44.7% (2006:

21.4%) is attributable to changes in the origin of profit and to the negative contribu-

tions to profit made by individual companies.

The effective tax rate of 23.6% (2006: –9.2%) is attributable to the fact that tax

effects of losses carried forward were not always capitalized in previous years, as the

likelihood of future realization could not be assessed at the time. Some of these loss

carryforwards were used in connection with the sale of the discontinued division.

The effect of changes in tax rates is essentially the consequence of the tax rate cut in

Germany, which led to a reduction of tax assets on existing tax loss carryforwards.

Group

4.10 Investment summary

4.10.1 Property, plant and equipment 2007


EUR millions

Acquisition cost, 1 January 43.5 70.7 7.7 6.4 3.3 131.4

Additions 0.1 1.3 0.3 0.7 3.7 6.1

Disposals –0.3 –5.0 –0.4 –0.4 – –6.1

Acquisition and disposal of subsidiaries –1.3 – – – – –1.3

Reclassification of property, plant and equipment held for sale –4.0 – – – – –4.0

Other reclassifications – 1.0 0.3 – –1.3 –

Exchange rate differences –0.4 –0.3 –0.1 –0.2 –0.2 –1.2

31 December 37.6 67.5 7.8 6.5 5.5 124.9

Accumulated depreciation, 1 January –11.9 –43.0 –4.1 –5.3 – –64.3

Additions –1.2 –5.5 –0.5 –0.5 – –7.7

Disposals 0.3 5.0 0.2 0.4 – 5.9

Acquisition and disposal of subsidiaries 0.3 – – – – 0.3

Reclassification as property, plant and equipment held for sale 2.1 – – – – 2.1

Other reclassifications – – – – – –

Exchange rate differences 0.1 0.3 0.1 0.1 – 0.6

31 December –10.3 –43.2 –4.3 –5.3 – –63.1

Net carrying amount, 1 January 31.6 27.5 3.6 1.1 3.3 67.1

Net carrying amount, 31 December 27.3 24.3 3.5 1.2 5.5 61.8

Carrying amount of fixed assets held under finance leases, 1 January 6.6 5.9 0.3 – – 12.8

Carrying amount of fixed assets held under finance leases, 31 December 6.4 6.6 0.2 – – 13.2

The insurance value of property, plant and equipment amounts to EUR 137.4 million.

Depreciation on property, plant and equipment relating to continued operations is included in cost of goods sold and services

provided (EUR 6.1 million), marketing and sales (EUR 0.5 million), administrative expenses (EUR 1.0 million) and development

expenses (EUR 0.1 million).

Additions to property, plant and equipment acquired through finance leases amount to EUR 1.1 million.

The reclassification of property, plant and equipment held for sale concerns a property in Belgium that will be sold in fiscal

year 2008.

In 2007 the Group received subsidies of EUR 0.8 million for construction of the plant in Belgium.

Land

and

buildings

Machineryand

productiontools

Equipm

entand

vehicles

Information

technology

Plantunder

construction

Totalproperty,plant

andequipment

47

Group

Property, plant and equipment 2006

EUR millions

Acquisition cost, 1 January 50.0 60.1 7.5 8.1 3.6 129.3

Additions 4.6 10.0 1.5 1.1 7.6 24.8

Disposals – –1.7 –0.5 –1.3 –0.9 –4.4

Reclassification as property, plant and equipment held for sale –12.3 –3.1 –0.3 –1.7 – –17.4

Other reclassifications 1.6 5.5 –0.5 0.3 –6.9 –

Exchange rate differences –0.4 –0.3 – –0.1 –0.1 –0.9

31 December 43.5 70.5 7.7 6.4 3.3 131.4

Accumulated depreciation, 1 January –16.4 –41.6 –4.1 –6.8 – –68.9

Additions –1.3 –5.5 –0.6 –0.9 – –8.3

Disposals – 1.1 0.4 0.8 – 2.3

Impairment –3.7 –0.4 –0.1 –0.1 – –4.3

Reclassification as property, plant and equipment held for sale 9.4 3.1 0.3 1.7 – 14.5

Other reclassifications – 0.1 – –0.1 – –

Exchange rate differences 0.1 0.2 – 0.1 – 0.4

31 December –11.9 –43.0 –4.1 –5.3 – –64.3

Net carrying amount, 1 January 33.6 18.5 3.4 1.3 3.6 60.4

Net carrying amount, 31 December 31.6 27.5 3.6 1.1 3.3 67.1

Carrying amount of fixed assets held under finance leases, 1 January 2.4 1.9 0.2 – – 4.5

Carrying amount of fixed assets held under finance leases, 31 December 6.6 5.9 0.3 – – 12.8

The insurance value of property, plant and equipment amounts to EUR 156.0 million.

The impairment of EUR 4.3 million results from valuing property, plant and equipment held for sale at fair value

less costs to sell.

Depreciation on property, plant and equipment relating to continued operations is included in cost of goods sold and services

provided (EUR 6.1 million), marketing and sales (EUR 0.5 million), administrative expenses (EUR 0.9 million) and development

expenses (EUR 0.1 million). Depreciation on property, plant and equipment for the discontinued operation amounts to EUR

0.7 million.

Additions to property, plant and equipment acquired through finance leases amount to EUR 10.5 million.

Land

and

buildings

Machineryand

productiontools

Equipm

entand

vehicles

Information

technology

Plantunder

construction

Totalproperty,plant

andequipment


4.10.2 Intangible assets 2007

EUR millions

Acquisition cost, 1 January 28.8 6.0 5.8 1.4 13.2

Additions – 0.8 0.7 – 1.5

Disposals – –2.3 –0.4 – –2.7

Acquisition and disposal of subsidiaries – –0.3 0.1 0.7 0.5

Reclassifications – – – – –

Exchange rate differences – –0.1 – – –0.1

31 December 28.8 4.1 6.2 2.1 12.4

Accumulated amortization, 1 January – –4.3 –3.9 –1.3 –9.5

Additions – –0.8 –0.6 –0.1 –1.5

Disposals – 2.3 0.2 – 2.5

Acquisition and disposal of subsidiaries – 0.3 –0.1 – 0.2

Reclassifications – – – – –

Exchange rate differences – 0.1 – – 0.1

31 December – –2.4 –4.4 –1.4 –8.2

Net carrying amount, 1 January 28.8 1.7 1.9 0.1 3.7

Net carrying amount, 31 December 28.8 1.7 1.8 0.7 4.2

Amortization of other intangible assets relating to continued operations is included in cost of goods sold and services

provided (EUR 1.2 million), administrative expenses (EUR 0.2 million) and development costs (EUR 0.1 Mio.).

Goodwill

Capitalized

developm

entcosts

Capitalizedsoftware

Patents,licencesand

otherintangibleassets

Totalother

intangibleassets

49

Group

Intangible assets 2006

EUR millions

Acquisition cost, 1 January 51.0 9.0 5.0 1.3 15.3

Additions – 1.0 1.1 0.2 2.3

Disposals – –0.3 –0.1 – –0.4

Reclassification of intangible assets held for sale –22.2 –3.6 –0.2 –0.1 –3.9

Exchange rate differences – –0.1 – – –0.1

31 December 28.8 6.0 5.8 1.4 13.2

Accumulated amortization, 1 January –22.2 –4.4 –3.4 –1.2 –9.0

Additions – –2.4 –0.6 –0.2 –3.2

Disposals – – – – –

Impairment – –1.2 –0.1 – –1.3

Reclassification of intangible assets held for sale –22.2 3.6 0.2 0.1 3.9

Exchange rate differences – 0.1 – – 0.1

31 December – –4.3 –3.9 –1.3 –9.5

Net carrying amount, 1 January 28.8 4.6 1.6 0.1 6.3

Net carrying amount, 31 December 28.8 1.7 1.9 0.1 3.7

The impairment of EUR 1.3 million results from valuing intangible assets held for sale at fair value less costs to sell.

Amortization of other intangible assets relating to continued operations is included in cost of goods sold and services

provided (EUR 2.0 million) and administrative expenses (EUR 0.2 million). Amortization of other intangible assets for the

discontinued operation amounts to EUR 1.0 million.

Goodwill

Capitalized

developm

entcosts

Capitalizedsoftware

Patents,licencesand

otherintangibleassets

Totalother

intangibleassets


4.11 Goodwill

EUR millions 31.12.2007 31.12.2006

Megamat GmbH 5.7 5.7

Stow Division 23.1 23.1

Total goodwill 28.8 28.8

The goodwill acquired in acquisitions is allocated to individual cash-generating units

made up of divisions or individual subsidiaries. The recoverable amount for a cash-

generating unit is determined by calculating its value in use. Cash flow projections

are based on the three-year plans drawn up by the Management Board and approved

by the Board of Directors.

The calculation of the value in use of goodwill is affected by the following

assumptions:

– Net sales: sales are projected on a regional basis. Depending on the cash-generating

unit in question, expected growth rates are between 1.0% and 8.4% (2006: 4.3%

to 7.1%).

– Profit from operations: in the long term, profit from operations are expected to

settle at a level of 4.8% to 8.3% (2006: 3.8% to 4.8%) of net sales.

– Weighted average cost of capital (WACC): The discount rate is based on a WACC

that takes into account the specific risks of the cash-generating units. Equity costs

were calculated on the basis of the interest on ten-year Swiss government bonds,

which represent a risk-free interest rate. It also contains an appropriate risk surcharge

for an equities portfolio. The different levels of risk in various countries and curren-

cies were also taken into account. The historic beta of Kardex shares, based on a

two-year regression, was applied in order to cover the systematic risk. Financing

costs are equivalent to the effectively paid average interest, adjusted to show the

proportionate taxation ratio of the divisions and/or subsidiaries.

– Growth rate: cash flows extending beyond the planning period are extrapolated;

the growth rate employed is 1.0% (2006: 1.0%). This growth rate does not exceed

the long-term average for the markets in which the individual divisions operate.

The gross profit margins calculated by the Management Board are based on

experience and are in line with expected business development.

Weighted average cost of capital (WACC) before tax

% 2007 2006

Megamat GmbH 10.7 11.2

Stow Division 12.2 11.2

Group

51

The Board of Directors and the Management Board consider the forecasts based on

the impairment tests to be reasonable and justifiable. The recoverability of goodwill

depends on the target figures being achieved. Divergences from the expected amounts

could cause changes in the recoverable amount.

The values in use of Megamat GmbH and the Stow Division are considerably higher

than their carrying amount. The organizational integration of the previously autono-

mous Megamat GmbH into the Kardex organization does not negatively affect good-

will impairment. In the opinion of the Management Board and Board of Directors, no

possible change in assumptions would lead to an outcome in which book values ex-

ceed utility values. Unforeseeable events are excluded from this assessment.

4.12 Financial assets

EUR millions 31.12.2007 31.12.2006

Investments 0.1 0.1

Other financial assets 0.5 0.5

Total financial assets 0.6 0.6

4.13 Deferred tax 31.12.2007 31.12.2006

EUR millions

Property, plant and equipment 0.5 3.4 0.4 4.1

Intangible assets – 1.4 0.1 1.4

Financial assets – 0.1 – 9.1

Inventories and construction contracts 0.9 0.1 1.4 0.1

Other assets 0.7 – 0.5 0.4

Provisions 1.2 1.3 0.8 3.7

Other liabilities 0.8 0.9 1.4 0.9

Capitalized loss carryforwards 4.9 – 18.0 –

Total deferred tax assets/tax liabilities 9.0 7.2 22.6 19.7

Set-off –4.5 –4.5 –16.8 –16.8

Net deferred tax assets/tax liabilities 4.5 2.7 5.8 2.9

Deferred tax assets are netted against deferred tax liabilities at individual company

level.

Deferredtax

assets

Deferredtax

liabilities

Deferredtax

assets

Deferredtax

liabilities


Non-capitalized loss carryforwards

EUR millions 31.12.2007 31.12.2006

Loss carryforwards by expiration

1 year – –

2 to 5 years 0.8 0.4

Over 5 years 66.9 75.4

Total loss carryforwards 67.7 75.8

The tax effects of loss carryforwards were capitalized to the degree that it was prob-

able they could be set off against future profits. Non-capitalized loss carryforwards

mainly relate to Germany and Switzerland.

The non-capitalized loss carryforwards at 31 December 2006 apply to continuing

operations.

4.14 Inventories and construction contracts

EUR millions 31.12.2007 31.12.2006

Raw materials, supplies and other consumables 15.9 17.3

Finished goods 9.4 10.0

Spare parts 6.6 6.6

Work in process 14.9 16.0

Allowances –4.2 –4.0

Advance payments by customers –17.1 –13.5

Construction contracts (POC) 0.8 4.9

Advance payments to suppliers 0.7 0.7

Total inventories and construction contracts 27.0 38.0

Details of construction contracts

EUR millions 31.12.2007 31.12.2006

Revenues from construction contracts (POC) 8.6 65.4

– of which from continued operations 0.7 10.1

– of which from discontinued operations 7.9 55.3

Accrued contract costs and recognized profit 0.7 14.2

Progress billings –1.4 –9.9

Contracts in process net –0.7 4.3

Construction contracts with amount duefrom customers (underfinanced) – 4.9

Construction contracts with amount dueto customers (overfinanced)1 –0.7 –0.6

Contracts in process net –0.7 4.3

Advances received (POC) – –

Retentions – 0.1

1 Included in the position other short-term liabilities.

Group

53

4.15 Trade accounts receivable

EUR millions 31.12.2007 31.12.2006

Trade accounts receivable 92.1 87.6

Allowances for doubtful accounts –1.5 –1.8

Total trade accounts receivable 90.6 85.8

Trade accounts receivable by currency:

CHF 1.4 1.6

EUR 65.7 58.9

GBP 6.8 8.6

USD 8.0 6.1

Other 8.7 10.6

Total 90.6 85.8

Ageing of trade accounts receivable:

Not yet due 61.0 60.5

0–30 days past due 18.6 14.5

31–60 days past due 5.7 5.1

61–90 days past due 2.5 3.2

91–180 days past due 3.0 2.6

Over 181 days past due 1.3 1.7

Total 92.1 87.6

Allowances for doubtful accounts –1.5 –1.8

Total 90.6 85.8

Receivables are broken down over the following regions:

EUR millions 31.12.2007 31.12.2006

Euro countries 51.9 46.7

Other European countries 25.9 30.0

Americas 7.3 5.6

Asia, Pacific Rim 5.3 3.4

Other 0.2 0.1

Total 90.6 85.8

Change in individual doubtful allowances:

1 January –0.6 –0.3

Additions –0.2 –0.5

Utilization 0.1 –

Reversal 0.1 0.2

Exchange rate differences – –

31 December –0.6 –0.6


Change in lumpsum allowances:

EUR millions 31.12.2007 31.12.2006

1 January –1.2 –1.1

Change 0.3 –0.1

31 December –0.9 –1.2

Trade accounts receivable are distributed over a widely scattered customer base.

Management does not anticipate any further material losses on receivables.

4.16 Other receivables and prepaid expenses

EUR millions 31.12.2007 31.12.2006

VAT, withholding and other refundable tax 1.5 1.6

Guarantees 0.4 0.4

Other receivables 2.4 3.8

Prepaid expenses 3.0 2.3

Total other receivables and prepaid expenses 7.3 8.1

4.17 Cash and cash equivalents

EUR millions 31.12.2007 31.12.2006

Cash, postal and bank current accounts 23.7 22.2

Time deposits 1.1 1.5

Total cash and cash equivalents 24.8 23.7

Cash and cash equivalents by currency:

CHF 1.4 0.7

EUR 13.6 17.6

GBP 2.9 1.9

USD 1.9 –

Others 5.0 3.5

Total cash and cash equivalents by currency 24.8 23.7

Of cash and cash equivalents, EUR 1.4 million (2006: EUR 1.2 million) are currently

held in China with specific formalities and request procedures for transfers abroad.

By complying with these requirements, the Group has these funds at its disposal.

55

Group

4.18 Financial liabilities

Non-current financial liabilities

EUR millions 31.12.2007 31.12.2006

Banks 6.6 12.3

Convertible bond 32.2 –

Finance lease liabilities 11.0 11.3

Total non-current financial liabilities 49.8 23.6

Non-current liabilities with banks by due date:

EUR millions 31.12.2007 31.12.2006

2 to 5 years 5.6 7.2


Total 6.6 12.3

Non-current liabilities by currency:

CHF 32.2 –

EUR 16.6 22.4

USD 1.0 1.1

Others – 0.1

Total 49.8 23.6

Current financial liabilities

EUR millions 31.12.2007 31.12.2006

Liabilities with banks 0.3 0.7

Current bank loans 7.9 43.9

Other financial liabilities 1.6 1.3

Current portion of finance leasing 2.3 1.9

Current portion of non-current financial liabilities 1.4 18.1

Total current financial liabilities 13.5 65.9

Current financial liabilities by currency:

CHF 0.3 0.3

EUR 13.1 65.0

USD – 0.5

Others 0.1 0.1

Total 13.5 65.9

Total financial liabilities 63.3 89.5


Net financial debt 38.5 65.8

Kardex AG issued 2.25% convertible bonds with a par value of CHF 55.0 million on

29 June 2007, using the proceeds to retire outstanding bank loans. The conversion

right may be exercised over the entire term of the bond, i.e. from 29 June 2007 until

29 June 2011. Bondholders may convert one bond with a par value of CHF 1 000.–


into 12.88 Kardex shares. The conversion price may differ over time as circumstances

change (see also Convertible Bond Prospectus of 26 June 2007, pages 29–34).

The market value (stock exchange price) of the bond issue as at 31 December 2007

was CHF 55.3 million. The book value of the bond issue of CHF 53.3 million as at

31 December 2007 includes the conversion right in the amount of CHF 3.7 million,

which represents an embedded derivative (debt financing instrument) and is carried

at fair value. The fair value of the option right is determined using a trinomial

model. A four-year risk-free rate of 3.0% and volatility of 20% were assumed as at

31 December 2007. The book value of the conversion right at the issue date was

CHF 4.3 million. Assuming that all parameters other than the share price remain con-

stant yields the following fair value adjustments as at 31 December 2007 (effective

impact on 2007 result EUR 0.4 million):

Share price, CHF Impact on result, EUR million

55.00 1.3

60.00 0.6

65.00 –0.3

70.00 –1.4

75.00 –2.6

80.00 –4.0

85.00 –5.5

90.00 –7.2

95.00 –8.9

100.00 –10.7

The fair-value adjustment does not affect liquidity.

The issue value of the bond (excluding the derivative) is carried to maturity or until

the conversion right is exercised at amortized cost using the effective interest rate

method. The effective interest rate of the convertible bond over its entire term is

5.37% p.a. Of this, the coupon accounts for 2.25% while the remainder is due to

compound interest on the convertible bond and charged to financial expenses. The

effective interest rate of 5.37% does not include the cost of the interest rate and

currency swap purchased for hedging purposes (see also note 4.23).

Financial liabilities at year-end in all currencies had an average interest rate of 6.0%

(2006: 4.5%).

The interest rates on the non-current liabilities with banks, lease liabilities, the con-

vertible bond and the swap are fixed to maturity. There are interest rate derivatives

for current bank loans of EUR 5.5 million, effectively fixing the interest rate to 2010.

Under the assumption that interest rates on the non-hedged current financial liabilities

change by 50 basis points and all other parameters, particularly exchange rates, remain

constant, net profit would change by approximately EUR 0.1 million (excluding tax

effects).

57

The AFT Division’s losses in 2005 and 2006 caused an infringement of covenants

(tangible net worth/ total assets and interest-bearing debt/EBITDA) and loan terms

agreed with lenders as at 31 December 2006. This led to the reclassification of EUR

13.2 million in long-term loans as current financial liabilities as at 31 December 2006.

The Group is in compliance with bank covenants as at 31 December 2007.

4.19 Pension liabilities

EUR millions 31.12.2007 31.12.2006

Pension liabilities relating to defined benefit plans 3.8 3.3

Other long-term benefits to employees 3.1 2.8

Total pension liabilities 6.9 6.1

Details of pension liabilities

Defined benefit plans

Present value of funded obligations 43.6 45.8

Present value of unfunded obligations 1.0 1.1

Total present value of obligations 44.6 46.9

Fair value of plan assets –37.6 –37.1

Benefit obligation in excess of plan assets 7.0 9.8

Unrecognized actuarial losses –3.2 –6.6

Unrecognized assets – 0.1

Pension liabilities in defined benefit plans 3.8 3.3

Allocation of plan assets:

Shares 2.7 2.8

Bonds 3.0 1.5

Claims against insurance companies(incl. other financial investments) 30.6 29.2


Total 37.6 37.1

Group


Movement in the present value of obligations



1 January 46.9 43.3

Current service cost 1.2 1.0

Interest expense 1.9 1.9

Benefits paid –2.9 –4.3

Acquisition and disposal of subsidiaries –1.3 –

Employees’ contributions 1.8 1.2

Exchange rate differences –1.1 –0.1

Reclassification as liabilities related to assets held for sale – –2.7

Actuarial gains and losses –1.9 6.6

31 December 44.6 46.9

Movement in plan assets



1 January 37.1 40.3

Expected return on plan assets 1.6 1.7

Employees’ contributions 1.8 1.2

Employer’s contributions 1.4 1.2

Benefits paid –2.8 –4.3

Acquisition and disposal of subsidiaries –1.4 –

Exchange rate differences –0.9 –0.2

Reclassification as liabilities related to assets held for sale – –2.0

Actuarial gains and losses 0.8 –0.8

31 December 37.6 37.1

Historical information

EUR millions 2007 2006 2005

Experience adjustments on expected claims 1.4 0.5 0.9

Experience adjustments on plan assets 0.4 –1.6 –1.0

Expenses for defined benefit plans


Current service cost 1.2 1.0

Interest expense 1.9 1.9

Expected return on plan assets –1.6 –1.7

Actuarial losses recognized 0.2 1.1

Effect of unrecognized assets according to paragraph 58a –0.1 –0.9

Total expenses for defined benefit plans 1.6 1.4

59

Group

The expense was included in the following items in the income statement:


Cost of goods sold and services provided 0.5 0.5

Marketing and sales expenses 0.3 0.3

Administrative expenses 0.8 0.6

Total 1.6 1.4

Actuarial assumptions

2007 2006

Discount rate 4.7% 4.2%

Expected rate of return on plan assets 4.6% 4.9%

Expected rate of increase in future compensation levels 2.7% 2.9%

Expected rate of increase in future pension levels 1.6% 1.7%

The effective return on plan assets was EUR 2.5 million (previous year EUR 0.9 million).

The expected long-term return on plan assets is 4.6%. The expected long-term rate

of return is based on the portfolio as a whole and not the sum of individual returns

from specific categories in the plan assets.

The expected contributions to defined-benefits plans for 2008 amount to EUR 1.5

million.

4.20 Provisions

War- Restruc- Others 2007 2006EUR millions ranties turing Total Total

1 January 5.2 – 3.5 8.7 5.7

Additions 2.3 2.6 5.0 9.9 8.7

Utilization –3.8 – –1.7 –5.5 –2.9

Reversal –0.3 – –0.6 –0.9 –0.6

Reclassification as liabilitiesrelated to assets held for sale – – – – –2.2

Exchange rate differences –0.1 – – –0.1 –

31 December 3.3 2.6 6.2 12.1 8.7

Non-current portion 0.5 – 0.1 0.6 0.7

Current portion 2.8 2.6 6.1 11.5 8.0

The provision for warranties covers the cost for guarantee claims. The actual amount

is based on current sales and available data. The provisions will be used in the next

one to two years.


The restructuring provisions concern the organizational integration of the previously

autonomous Megamat GmbH into the Kardex organization. Provisions for restruc-

turing include severance payments among other items and will only be charged to

the balance sheet once a plan has been presented to the parties affected. Normally

the expenses would fall due within the course of one year.

Other provisions also include provisions for pending litigation.

4.21 Other current liabilities and accruals

EUR millions 31.12.2007 31.12.2006

VAT, withholding tax and other tax liabilities 3.3 3.4

Social security and pension plan liabilities 1.8 1.6

Other current liabilities 3.3 3.8

Personnel claims 8.9 8.1

Accruals 14.4 15.0

Total current liabilities and accruals 31.7 31.9

4.22 Financial instruments

Financial assets and liabilities are classified in the following categories:

EUR millions 31.12.2007 31.12.2006

Held for sale 0.6 0.6

Financial assets 0.6 0.6

Loans and receivables 117.5 110.5


Other current receivables 2.1 1.1


Financial assets at fair value, change in fair valuerecognized in the income statement 0.2 0.2

Derivatives through income statement 0.2 0.2

Total financial assets 118.3 111.3

Other financial liabilities 124.6 145.1

Non-current financial liabilities 47.6 23.6

Trade accounts payable 57.7 50.1

Current financial liabilities 13.5 65.9

Accrued expenses 5.8 5.5

Financial liabilities at fair value, change in fair valuerecognized in the income statement 2.2 –

Derivatives through income statement 2.2 –

Derivatives for hedging 0.1 –


61

The maturity structure of financial liabilities is as follows:

EUR millions 31.12.2007 31.12.2006

From non-current financial liabilities

Non-current financial liabilities 56.5 26.1

2 to 5 years 51.1 21.9

over 5 years 5.4 4.2

Derivatives for hedging 33.3 –

2 to 5 years 33.3 –

over 5 years – –

Total from non-current financial liabilities 89.8 26.1

2 to 5 years 84.4 21.9

over 5 years 5.4 4.2

From current financial liabilities

Trade accounts payable 57.7 50.1

less than 6 months 57.7 50.1

from 6 to 12 months – –

Current financial liabilities 22.0 74.0


from 6 to 12 months 2.8 7.4

Other current liabilities 5.5 5.5


from 6 to 12 months – –

Total from current financial liabilities 85.2 129.6


from 6 to 12 months 2.8 7.4


Cash flow from derivatives 39.9 7.4

Total net financial liabilities 135.1 148.3

The market value of non-current liabilities with banks and the current portion of

non-current financial liabilities is EUR 7.9 million; the book value is EUR 8.0 million.

For the remaining financial liabilities, excepting the convertible bond, balance sheet

values are roughly equal to fair market value in accordance with IFRS.

Group


4.23 Derivative financial instruments

EUR millions 31.12.2007 31.12.2006

Currency derivatives

Contract volumes 6.7 7.8

Fair value (positive) – –

Fair value (negative) 0.1 –

Interest rate derivatives

Contract volumes 5.5 7.0

Fair value (positive) 0.2 0.2

Fair value (negative) – –

Interest rate and currency swap

Contract volumes 33.2 –

Fair value (positive) – –

Fair value (negative) 0.1 –

At 31 December 2006, EUR 0.4 million of the contract volume for currency derivatives

applied to the discontinued operation.

The currency derivatives are used to hedge the US dollar and the euro. The interest

rate derivative provides long-term hedging for a loan in euros. The currency contracts

and interest rate derivatives are recognized in the balance sheet at replacement (i.e.

market) value. Any gains and losses accruing are recognized directly in the income

statement.

Since the convertible bond with a par value of CHF 55.0 million was not issued in

Kardex AG’s functional currency, it must be recognized in full as a liability according

to IFRS. The conversion right is carried separately as an embedded derivative at fair

value; fluctuations in fair value are recognized in the income statement. The liability

component is carried at the present value of the redemption amount using the ef-

fective interest rate method over the term of the bond and recognized in the income

statement. If the conversion right is exercised, the proportional derivative obligation

is reclassified in equity. If the conversion right is not exercised, or if the intrinsic value

of the conversion right is zero, the derivative obligation is amortized on an ongoing

basis through the income statement based on the declining current value over the

term of the bond.

The denomination of the convertible bond in CHF gives rise to both cash flow risk

and translation risk for the Group. These risks have been fully hedged with an interest

rate and currency swap with initial and final trade at the same exchange rate. Kardex

AG will receive a fixed CHF interest rate of 2.25%, corresponding exactly to the

bond’s coupon, and pay a fixed EUR interest rate of 3.68%. As the hedge transaction

qualifies as a cash flow hedge, the effective portion of the change in value until final

settlement of the hedged transactions is recognized in equity (2007: CHF 0.1 million).

63

Group

4.24 Leasing obligations

4.24.1 Operating leases

EUR millions 31.12.2007 31.12.2006

Expense for operating leases for the year 7.5 8.2

Future minimum payments for non-cancellable lease agreements:

1 year 4.5 4.8

2 to 5 years 6.5 7.0


Total future minimum payments for operating leases 12.1 12.7

Operating leases apply mainly to vehicles and rent obligations. Leasing contracts are

agreed at current market conditions.

The expense for operating leases for 2006 includes EUR 0.8 million for discontinued

operations. At 31 December 2006, EUR 0.7 million of the future minimum payments

for non-cancellable lease agreements applied to discontinued operations.

4.24.2 Finance leases

EUR millions Notes 31.12.2007 31.12.2006

Future minimum lease payments:

1 year 2.7 2.5

2 to 5 years 8.9 7.9


Total future minimum paymentsfor finance leases 16.0 16.1

Interest –2.7 –2.9

Present value of finance leases 13.3 13.2

Long-term finance leases 4.18 11.0 11.3

Short-term finance leases 4.18 2.3 1.9

Total finance leases 13.3 13.2

Finance leases apply mainly to property, plant and equipment. Leasing contracts

are agreed at current market conditions. The discontinued operation has no finance

lease obligations.


4.25 Earnings per share

2007 2006

Number of outstanding sharesat the beginning of the financial year 5 627 453 5 626 203

Purchases of treasury shares –32 042 –85

Disposal of treasury shares 3 576 1 335

Number of outstanding sharesat the end of the financial year 5 598 987 5 627 453

Weighted average number of outstanding shares 5 626 249 5 626 258

Adjustment for anticipated exercise of conversion rights 363 944 –

Diluted weighted average numberof outstanding shares 5 990 193 5 626 258

Net result Group 21 761 000 –33 231 000

Dilution effect

– Fair-value adjustment for conversion right –354 000 –

– Interest expense for conversion right 949 000 –

– Consolidated result, diluted 22 356 000 –33 231 000

Basic loss per share (EUR) 3.87 –5.91

Diluted loss per share (EUR) 3.73 –5.91

Result of continuing operations 23 130 000 13 502 000

Basic earnings per share (EUR) 4.11 2.40

Diluted earnings per share (EUR) 3.97 2.40

4.26 Capital commitments

EUR millions 31.12.2007 31.12.2006

Property, plant and equipment 4.6 0.7

Total capital commitments 4.6 0.7

The capital commitments at 31 December 2006 apply exclusively to continued

operations.

4.27 Contingent liabilities

EUR millions 31.12.2007 31.12.2006

Total contingent liabilities 0.5 2.1

EUR 1.5 million of contingent liabilities at 31 December 2006 apply to the

discontinued operation.

The Group is currently involved in various litigations arising in the course of business.

The Group does not anticipate that the outcome of these proceedings, either indi-

vidually or in sum, will have a material effect on its financial or income situation.

Group

65

4.28 Assets pledged or of restricted disposability

EUR millions 31.12.2007 31.12.2006



Inventories 1.7 3.6

Total assets pledged or of restricted disposability 51.2 63.9

At 31 December 2006, EUR 6.5 million of the assets pledged or of restricted

disposability applied to discontinued operations.

The residual purchase commitment remaining from the acquisition of the 40%

minority interests in the Stow Group is secured by 150 000 shares in Stow

International nv, Belgium. The residual purchase commitment to EUR 1.5 million

(2006: EUR 1.3 million) is included in current financial liabilities.

4.29 Related parties

Related parties include members of the Management Board and Board of Directors,

important shareholders and companies under their control. There are no outstanding

receivables from or liabilities towards these persons. No transactions of any significance

were carried out with related parties or companies during the year under review or

the previous year.

The total compensation to the Management Board and Board of Directors (including

members who resigned in the course of the business year) was as follows:


Short-term benefits1 1.9 1.4

Termination benefits – 0.1

Pension payments and social expenses 0.1 –

Total compensation 2.0 1.5

1 Of which EUR 0.2 million in 2006 and EUR 0.3 million in 2007 to non-executive

directors.

Compensation to the members of the Board of Directors is fixed. 70 to 80% of

compensation is paid in cash and the remaining 20 to 30% in Kardex shares. The

Management Board receives compensation consisting of a fixed base salary plus a

variable component. If targets are met, depending on individual position, this vari-

able component may be up to 45–50% of the fixed base pay. At least 20% and at

most 50% of the variable component is paid in shares. Shares are awarded at an

amount 20% lower than the prevailing average price for the preceding month and

cannot be traded for a period of three years. In 2007, compensation in the form of

shares amounted to EUR 174.6 thousand (2006: EUR 42.3 thousand).

Disclosures of compensation and shareholdings pursuant to the Swiss Code of

Obligations may be found in the Notes to the Financial Statements of Kardex AG.

Fair Revaluation Carrying amountmarket due to method of acquired

EUR millions value of acquisition enterprises

Property, plant and equipment – – –

Other intangible assets 0.6 0.6 –

Financial assets – – –

Inventories 0.2 – 0.2

Trade accounts receivable and other current assets 1.1 – 1.1

Cash and cash equivalents 1.7 – 1.7

Trade accounts payable and other liabilitiesincluding deferred tax liabilities –1.5 –0.2 –1.3

Identifiable acquired net assets 2.1 0.4 1.7

Goodwill –

Recognized net assets from merger 2.1

No goodwill was acquired.

EUR millions

Payment of purchase price 2.1

Transaction costs 0.2

Total cost of acquisition 2.3

Cash and cash equivalents acquired –1.7

Cash outflow from acquisition 0.6

Further information on the acquired company

EUR millions 21.9.–31.12.2007

Net revenues 1.5

Expenses –1.6

Result before tax –0.1

Income tax –

Result from acquired subsidiarysince 21 September 2007 –0.1

If the company had been acquired on 1 January 2007, consolidated net revenues

would have been EUR 427.6 million. The consolidated result would have remained

the same.


4.30 Acquisition and disposal of subsidiaries

4.30.1 Increase in assets, liabilities and equity from acquisitions

On 21 September 2007 the Group acquired 100% of shares in Leader Systèmes SA,

based in Le Mesnil-le-Roi near Paris. This company is the exclusive distributor for

France of products from Megamat, part of the KRM Division.

The following assets, liabilities and equity items were acquired in the purchase:

67

Group

4.30.2 Disposal of subsidiaries and divisions

4.30.2.1 Discontinued division

On 22 December 2006 Kardex signed a contract for the sale of the AFT Division

(Industrial Automation and Conveyor Technology). When no agreement on settlement

terms could be reached with the buyer, the AFT Division was sold to the German

company Certina Holding on approximately the same terms on 21 February 2007.

The following companies were included in the sale:

– AFT Benelux nv, Zandhoven, Belgium

– AFT Automation and Conveying Systems (Shanghai) Co. Ltd., Shanghai, China

– AFT Automatisierungs- und Fördertechnik GmbH & Co. KG, Schopfheim,

Germany

– AFT Verwaltungs GmbH, Schopfheim, Germany

– AFT Immobilien GmbH, Schopfheim, Germany

– AFT Förderanlagen Bautzen GmbH & Co. KG, Bautzen, Germany

– AFT Automation and Conveying Systems UK, Ltd., Telford Shropshire,

United Kingdom

– AFT Automatización y Sistemas de Transportación de México S.A. de C.V., México

– Dreier Systemtechnik AG, Reinach, Switzerland

– LT Engineering AG, Reinach, Switzerland

– Seo Kwang AFT Co.Ltd., Kyeonggi-Do, South Korea

– AFT Automation and Conveying Systems Ltd., Auburn Hills, Michigan, USA

Pursuant to IFRS 5, the assets (“disposal group”) held for sale were disclosed separ-

ately in current assets as at 31 December 2006 at the lower of carrying amount and

fair value less costs to sell (applied on a look-ahead basis). In the income statement,

the result from the discontinued division is disclosed separately as a single amount.

The previous-year figures in the notes on balance sheet items include the relevant

assets, liabilities and equity items from the AFT Division.

Assets, liabilities and equity held for sale

EUR millions 21.02.2007 31.12.2006


Inventories and long-term manufacturing contracts 11.0 10.0


Other current assets 6.7 5.9

Total assets 36.0 28.8

Non-current liabilities 6.4 2.6

Current liabilities 44.6 39.9

Total liabilities and equity 51.0 42.5

68

Further information on the discontinued division

EUR millions 1.1.–21.2.2007 2006

Net revenues 7.9 76.1

Expenses –9.2 –97.6

Result of valuation of assets held for sale at fair valueless costs to sell (including expenses for warranty provisions) – –25.0

Goodwill impairment – –

Result before tax –1.3 –46.5

Income tax – –0.2

Result from discontinued division –1.3 –46.7

Loss per share, basic (EUR) –0.24 –8.31

Loss per share, diluted (EUR) –0.24 –8.31

Net cash flow from operating activities –1.5 –25.0

Net cash flow from investing activities – 0.1

Net cash flow from financing activities –0.8 27.0

The cost of restructuring and separation of AFT amounted to EUR 25.0 million,

EUR 15.9 million of which had an impact on liquidity.

4.30.2.2 Disposal of subsidiaries

System Schultheis AG, based in Rapperswil, was sold on 1 October 2007.

The following assets and liabilities were included in the disposal:

Assets from disposal of subsidiaries

EUR millions 1.10.2007

Property, plant and equipment 1.0

Inventories and long-term manufacturing contracts –0.2

Trade accounts receivable 0.4

Other current assets 1.1

Total assets 2.3

Non-current liabilities 0.2

Current liabilities 0.7

Total liabilities and equity 0.9

The sale price was EUR 2.8 million. Deducting the cash and cash equivalents included

in the sale yields a net cash flow of EUR 1.7 million from the sale of System

Schultheis AG. The profit from the transaction is included in other operating income.


69

Group

Heldby:

4.31 Subsidiaries

Country Company, domicile

Australia � � Kardex VCA Pty Ltd., Wodonga AUD 1 300 000 100 1

Austria � Kardex Austria GmbH, Vienna EUR 300 000 100 1

� Stow GmbH Austria, Vienna EUR 110 000 100 2

Belgium � S.A. Kardex nv, Forest/Brussels EUR 348 736 100 1

� � � Stow International nv, Wevelgem EUR 11 375 939 100 1

China � � Shanghai Stow Storage Equipment Co. Ltd., Shanghai CNY 62 731 000 100 2

Cyprus � Kardex Systems Ltd., Limassol EUR 486 484 100 1

� KRI Logistics Ltd., Limassol EUR 27 400 100 1

� Kardex Systems (Cyprus) Ltd., Limassol CYP 20 000 100 6

Czech � Kardex s.r.o., Prague CZK 500 000 100 1Republic

� Stow Ceska Republika s.r.o., Prague CZK 500 000 100 2

Finland � � Kardex Finland OY, Muurame EUR 134 550 100 1

France � Kardex SASU, Neuilly-Plaisance Cedex EUR 1 835 000 100 1

� Leader Systèmes S.A., Le Mesnil-le-Roi EUR 229 000 100 1

� Stow France S.A., Saint-Pierre-du-Perray EUR 684 000 100 2

Germany � � Bellheimer Metallwerk GmbH, Bellheim/Pfalz EUR 4 243 722 74.7 325.3 4

� Kardex Office GmbH, Kronberg/Taunus EUR 49 000 100 5

� � GSS Global Software Solutions GmbH, Filderstadt EUR 25 565 100 5

� Kardex Deutschland GmbH, Bellheim/Pfalz EUR 511 292 100 1

� Kardex Megamat Beteiligungs GmbH, Neuburg/Kammel EUR 5 113 431 100 5

� Kardex GmbH, Kronberg/Taunus EUR 1 022 584 100 5

� � Megamat GmbH, Neuburg/Kammel EUR 2 045 167 100 3

� Stow Deutschland GmbH, Wiesbaden EUR 511 400 100 2

Hungary � Kardex Hungaria Kft., Budaörs HUF 2 514 000 100 1

Ireland � Kardex Systems Ireland Ltd., Dublin EUR 300 000 100 1

Italy � Kardex Te-Co S.p.A., Opera (Mi) EUR 309 874 100 1

Netherlands � Kardex Systemen bv, Woerden EUR 90 751 100 1

� Stow Nederland bv, Hoeven EUR 18 152 100 2

Norway � Kardex System AS, Oslo NOK 500 000 100 1

Poland � Stow Polska Sp.z.o.o., Warsaw PLN 500 000 100 2

� Kardex Polska Sp.z.o.o., Warsaw PLN 200 000 100 1

Russia � Kardex CO. LTD, Moscow RUB 10 000 100 1

� Finance, property, services � Development, production � Distribution, service

Currency

Sharecapitalin

localcurrency

Percentageholding


Country Company, domicile

Slovakia � Stow Slovensko s.r.o., Bratislava SKK 1 000 000 100 2

� Kardex Slovensko s.r.o., Bratislava SKK 200 000 100 1

Spain � Storage Solution Iberica S.L., Sant Just Desvern (Barcelona) EUR 150 000 100 1

� Kardex Sistemas S.A., San Fernando de Henares, Madrid EUR 300 506 100 1

Sweden � Kardex Scandinavia AB, Bromma SEK 100 000 100 1

Switzerland � Kardex Systems AG, Volketswil CHF 1 000 000 100 1

� KRM Service AG, Volketswil CHF 500 000 100 1

UK � Kardex Holdings Ltd., Epping GBP 1 828 000 100 1

� Megamat (UK) Ltd., Milton Keynes GBP 1 000 100 1

� Stow U.K. Co. Ltd., Sunbury-on-Thames GBP 220 000 100 2

USA � � Remstar International Inc., Westbrook (Maine) USD 2 050 000 100 1

� Finance, property, services � Development, production � Distribution, service

1 Kardex AG, Zurich, Switzerland

2 Stow International nv, Wevelgem, Belgium

3 Kardex Megamat Beteiligungs GmbH, Neuburg/Kammel, Germany

4 Kardex Organisationssysteme GmbH, Kronberg/Taunus, Germany

5 Kardex Deutschland GmbH, Bellheim, Germany

6 Kardex Holdings Ltd., Epping, UK

Currency

Sharecapitalin

localcurrency

Percentageholding

Heldby:

4.31 Subsidiaries (continued)

4.32 Release for publication and approvalof the financial statements

The Board of Directors approved these financial statements on 27 February 2008.

They must also be approved by the shareholders’ General Meeting.

4.33 Events after the balance sheet date

No events have taken place between 31 December 2007 and 27 February 2008

that would require an adjustment of the carrying amounts of assets and liabilities

of the Kardex Group or need to be disclosed here.

71

Report of the group auditors

To the General Meeting of Kardex AG, Zurich

Zurich, 27 February 2008

Report of the group auditors

As group auditors, we have audited the consolidated financial statements of Kardex AG, Zurich, and subsidiaries, presented

on pages 20 to 70 and consisting of the consolidated income statement, the consolidated balance sheet, the consolidated

cash flow statement, the consolidated statement of changes in equity and notes to the consolidated financial statements for

the year ended 31 December 2007.

These consolidated financial statements are the responsibility of the Board of Directors. Our responsibility is to express an

opinion on these consolidated financial statements based on our audit. We confirm that we meet the legal requirements

concerning professional qualification and independence.

Our audit was conducted in accordance with Swiss Auditing Standards and with the International Standards on Auditing

(ISA), which require that an audit be planned and performed to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement. We have examined on a test basis evidence supporting the amounts

and disclosures in the consolidated financial statements. We have also assessed the accounting principles used, significant

estimates made and the overall consolidated financial statement presentation. We believe that our audit provides a reasonable

basis for our opinion.

In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position, results of

operations and cash flows in accordance with the International Financial Reporting Standards (IFRS) and comply with Swiss law.

We recommend that the consolidated financial statements submitted to you be approved.

KPMG Ltd

Jürg Meisterhans Thomas Keusch

Auditor in Charge

72

Income statementKardex AG (Holding)

CHF millions Notes 2007 2006

Income from investments

Licensing income 12

Financial income

Other income

Extraordinary income

Change in loan impairments 6

Total income

Administrative expenses 10

Licensing expenses 12

Trademark amortization

Financial expenses 11

Income tax

Extraordinary expenses

Losses related to investments

Impairment charge on minority interests 6

Waiver of debts

Merger loss 12

Total expenses

Net result

7.7

4.9

6.2

9.0

41.2

69.0

–6.5

–0.2

–0.3

–10.6

–0.3

–

–6.3

–

–12.0

–36.2

32.8

9.1

–

5.1

0.3

–

14.5

–9.3

–

–

–3.4

–0.2

–32.6

–40.0

–63.2

–

–148.7

–134.2

73

Balance sheetKardex AG (Holding)

CHF millions Notes 31.12.2007 31.12.2006

Loans to Group companies 6

Investments 6

Trademarks 12

Non-current assets

Receivables from Group companies

Prepaid expenses and other short-term receivables

Treasury shares 7

Cash and cash equivalents

Current assets

Assets

Share capital

General reserve

Free reserve

Reserve for treasury shares 7

Retained earnings

Equity

Convertible bond 8

Bank liabilities

Non-current financial liabilities

Current financial liabilities

Payables to Group companies

Other payables

Current liabilities

Liabilities

Equity and liabilities

33.0

219.1

2.2

254.3

5.4

0.2

1.7

5.1

12.4

266.7

76.0

42.4

–

1.7

24.0

144.1

55.0

–

55.0

12.9

42.9

11.8

67.6

122.6

266.7

49.3

198.0

–

247.3

3.8

0.6

–

12.5

16.9

264.2

76.0

123.6

41.0

–

–129.3

111.3

–

21.2

21.2

57.9

35.6

38.2

131.7

152.9

264.2

Holding

74

1. Accounting principles

The financial statements of Kardex AG comply with the requirements of the Swiss

Code of Obligations.

2. Conditional capital

CHF millions 31.12.2007 31.12.2006

Total conditional capital 12.2 –

Conditional capital in the amount of CHF 12.2 million was created at the General

Meeting of 24 May 2007. The bearer shares with a par value of CHF 13.50 are

reserved for conversion of the 2.25% 2007–2011 convertible bond.

3. Contingent liabilities

CHF millions 31.12.2007 31.12.2006

Contingent liabilities in favourof subsidiaries and third parties 10.7 84.6

Subordinated loans to subsidiaries 6.8 10.9

4. Securing of liabilities

The residual purchase commitment remaining from the acquisition of the 40%

minority interests in the Stow Group is secured by a total of 150 000 shares

(carrying amount CHF 7.8 million) in Stow International nv, Belgium.

In view of the group taxation principle, all Swiss companies bear unlimited joint and

several liability for value-added tax (in accordance with Art. 32, Par. 1e of Swiss VAT

legislation).

Kardex AG has joint responsibility for all liabilities arising from the cash-pooling

agreement.

Notes to the financial statementsKardex AG (Holding)

75

5. Liabilities towards pension funds

CHF millions 31.12.2007 31.12.2006

Liabilities towards pension funds – –

6. Subsidiaries and loans

Holdings in subsidiaries of Kardex AG are listed on pages 69/70 of this report.

The extraordinary income consists of write-backs of loan impairments associated

with the completed sale of the AFT Division.

Minority interests have changed through purchases and sales of interests (see also

note 4.30 and section 4.30.2.2 of the Consolidated financial statements) and

through reclassification of intra-group loans.

7. Additions, holdings and disposals of treasury shares

Number Price per Total

share in CHF TCHF

31 December 2005 1 250 51.84 65

Additions 2006 85 49.80 4

Disposals 2006 –1 335 51.71 –69

31 December 2006 – – –

Additions 2007 32 042 61.72 1 978

Disposals 2007 –3 576 61.28 –219

31 December 2007 28 466 61.78 1 759

8. Convertible bonds

TCHF 31.12.2007 31.12.2006

2.25% Convertible bond 2007–2011 55 000 –

Each bond, with a par value of CHF 1000.– is convertible to Kardex AG bearer shares

at a conversion price of CHF 77.66 between 8 August 2007 and 22 June 2011. The

conversion price is reduced by the amount of each dividend distribution per share

since 8 August 2007. As at 31 December 2007 the conversion price was CHF 77.66.

No convertible bonds were exchanged for shares in fiscal year 2007.

Holding

76

9. Significant shareholders on 31 December 2007,as defined by Art. 663c of the Swiss Code of Obligations

The following shareholders owned more than 3% of the share capital of CHF 76.0

million at the time of the most recent report:

31.12.2007 31.12.2006

Buru Holding and Philipp Buhofer 18.2% 18.2%

Credit Suisse Asset Management Funds 4.3% 5.1%

Grantham, Mayo, Van Otterloo & Co. LLC 3.6% unknown

Susquehanna Ireland Limited 3.5% unknown

GoldenPeaks Active Value Master Fund Ltd. 3.3% unknown

10. Administrative expenses

CHF millions 2007 2006

Personnel expenses 3.5 3.4

Other expenses 3.0 5.9

Total administrative expenses 6.5 9.3

11. Financial expenses

Costs in the amount of CHF 3.0 million were incurred during fiscal 2007 in connection

with the convertible bond, of which CHF 2.0 million were one-time transaction costs.

12. Merger of Sistemco with Kardex AG

Acquisition of the assets, liabilities and equity of licensing company Sistemco AG in

Cham pursuant to the Merger Agreement of 17 December 2007 and balance sheet

as at 30 June 2007. Kardex AG assumed assets of CHF 23.2 million and liabilities

of CHF 3.2 million. The activities of Sistemco AG have continued since 1 July 2007

within Kardex AG.

Notes to the financial statements Kardex AG (Holding)

77

TCHF

Cash payments 315 119 42 60 45 49

Share payments1, 2 Value 129 48 18 24 18 21

Units 2 608 970 364 485 364 425

Payments for additional work 10 – – 10 – –

Total 454 167 60 94 63 70

1 Valuation of the shares is based on the average share price for the month preceding the date of distribution (CHF 61.80/share).As all shares distributed to members of the Board of Directors are subject to a three-year vesting period, they are valued at20% below the relevant average share price.

2 The fixed minimum portion of the director’s fee drawn in shares is 20%. All members of the Board of Directors also have theoption of receiving up to an additional 10% of their total compensation in shares rather than cash.

No severance payments, credits or other emoluments of any kind were granted to

members of the Board of Directors or closely linked parties.

Management Board

TCHF

Cash payments (fixed) 1 852 534

Cash payments (variable) 672 232

Share payments (variable)3, 4 Value 221 58

Units 5 533 1450

Payments in kind5 67 58

Occupational pension expenses6 71 –

Total 2 883 882

3 Distributed shares are priced 20% below the average price for the preceding month and are subject to a three-year vestingperiod.

4 The Management Board receives compensation consisting of a fixed base salary plus a variable component. If targets aremet, depending on individual rank, this variable component may be up to 45–50% of the fixed base pay. At least 20% andat most 50% of the variable component is paid in shares.

5 Rent and vehicles.6 Employer contributions to state social insurance schemes (AHV, ALV, etc.) are not included.

No severance payments, credits or other emoluments of any kind were granted to

members of the Management Board or closely linked parties.

BoardofDirectorstotal

LeoSteiner

Chairm

anoftheBoardofDirectors

MemberoftheAuditCom

mittee

Philipp

Buhofer

MemberoftheBoardofDirectors

Dr.RudolfHuber


ChairoftheAuditCom

mittee

WalterT.Vogel


Martin

Wipfli


MemberoftheAuditCom

mittee

13. Compensation and shareholdings

13.1 Compensation

Board of Directors

Total

Management

Board

Highest

compensation:

JosDeVuyst,CEO

Holding

78 Notes to the financial statements Kardex AG (Holding)

Shares held 31 December 2007 1040 714 3 467 1023 511 12 319 992 425

Convertible bonds 31 December 2007 (TCHF) 5 075 230 4 700 145 – –

1 Including shares held by Buru Holding.

Management Board

Shares held 31 December 2007 1818 796 – 904 118

Convertible bonds 31 December 2007 (TCHF) – – – – –

BoardofDirectorstotal

LeoSteiner

Chairm

anoftheBoardofDirectors

MemberoftheAuditCom

mittee

Philipp

Buhofer1


Dr.RudolfHuber


Chairm

anoftheAuditCom

mittee

WalterT.Vogel


Martin

Wipfli


MemberoftheAuditCom

mittee

ManagementBoardtotal

JosDeVuyst

CEO

RetoWelte

CFO

JürgMüller

HeadofKRM

Division

HansDeStaercke

HeadofStow

Division

13.2 Shareholdings of members of the Board of Directors, the Management Board

and closely linked individuals and companies

Closely linked individuals and companies comprise family members and individuals or

companies subject to significant influence. All transactions with closely linked individ-

uals and companies are conducted at arm’s length.

Other than payment of compensation and ordinary contributions to the various pen-

sion plans for members of the Board of Directors and Management Board, no signifi-

cant transactions with closely linked individuals and companies have taken place.

Board of Directors

14. Events after the balance sheet date

No events took place between 31 December 2007 and 27 February 2008 that would

require an adjustment to the book value of Kardex AG’s assets, liabilities or equity or

that are required to be disclosed here.

79

Proposal for the appropriationof retained earnings

Proposal of the Board of Directors

The Board of Directors is proposing to the General Meeting to approve the following

appropriation of retained earnings:

CHF millions 31.12.2007 31.12.2006

Balance brought forward –129.3 4.9

Write-back of free reserves 41.0 –

Write-back of general reserves 79.5 –

Net profit/loss 32.8 –134.2

Retained earnings 24.0 –129.3

Balance to be carried forward 24.0 –129.3

The Board of Directors proposes not to distribute a dividend and to carry forward

retained earnings in the amount of CHF 24.0 million as at 31 December 2007 to the

new accounts.

Holding

80

To the General Meeting of Kardex AG, Zurich

Zurich, 27 February 2008

Report of the statutory auditors

As statutory auditors, we have audited the accounting records and the financial statements (income statement, balance sheet

and notes on pages 72 to 79) of Kardex AG, Zurich, for the year ended 31 December 2007.

These financial statements are the responsibility of the Board of Directors. Our responsibility is to express an opinion on these

financial statements based on our audit. We confirm that we meet the legal requirements concerning professional qualification

and independence.

Our audit was conducted in accordance with Swiss Auditing Standards, which require that an audit be planned and performed

to obtain reasonable assurance about whether the financial statements are free of material misstatement. We have examined

on a test basis evidence supporting the amounts and disclosures in the financial statements. We have also assessed the ac-

counting principles used, significant estimates made and the overall financial statement presentation. We believe that our audit

provides a reasonable basis for our opinion.

In our opinion, the accounting records and the financial statements and the proposed appropriation of available earnings

comply with Swiss law and the company’s articles of association.

We recommend that the financial statements submitted to you be approved.

KPMG Ltd

Jürg Meisterhans Thomas Keusch

Auditor in Charge

Report of the statutory auditors

81

The Kardex Remstar Group is committed to the recognized principles of corporate

governance as published in the Economiesuisse Swiss Code of Best Practice for

Corporate Governance. By acknowledging these principles, the Group aims to

strengthen and increase the trust shown towards the company by present and future

shareholders, investors, employees, business associates and the general public. In

order to meet these expectations, the Group regularly provides information about its

operations and current events. Apart from its regular publications (half-yearly and

annual reports), the Group publishes further details about the company on its web-

site at www.kri-group.com.

In the following section, as required by the guidelines of the SWX Swiss Exchange,

Kardex provides information about its own corporate governance. The information is

organized as in the guidelines. To avoid redundancy and in the interests of readabil-

ity, there are several cases where the reader is referred to other places in the Annual

Report or other Group publications. Any significant changes occurring between bal-

ance sheet date and this report going to press have been noted.

1. Group structure and shareholders

1.1 Group structure

Kardex AG is a public limited company of indeterminate duration under Swiss law

and is headquartered in Zurich, Switzerland. It is listed in the main segment of the

SWX Swiss Exchange (security no. 1 826 341, ISIN CH 001 826 341 5) and its market

capitalization on 31 December 2007 amounted to CHF 346 088 thousand (previous

year CHF 292 627 thousand).

The Group is managed by the Board of Directors through the Management Board

and the management of the operative divisions KRM and Stow. The Management

Board is made up of the CEO, the CFO and the heads of the two divisions. The Board

of Directors and the Management Board are assisted in their work by various central

Group functions.

Corporate Governance

Group

All of the fully consolidated subsidiaries of Kardex AG are non-listed companies.

An overview of all the Group’s directly and indirectly held interests is shown on

pages 69 and 70.

1.2 Significant shareholders

Information about significant shareholders can be found in the notes to the consoli-

dated financial statements of Kardex AG on page 76.

No shareholders’ agreements or other agreements exist between significant share-

holders and the Kardex Remstar Group.

1.3 Cross-shareholdings

There are no cross-shareholdings.

2. Capital structure

2.1 Capital

Kardex AG’s ordinary capital amounts to CHF 75 971 thousand on 31 December 2007

divided into 5 627 453 fully paid-in bearer shares each with a par value of CHF 13.50.

All shares are entitled to dividends and entitle the holder to one vote at the General

Meeting. Conditional capital as of 31 December 2007 is CHF 12 150 thousand.

.

2.2 Authorized and conditional capital

The Company has no authorized capital as of 31 December 2007.

Conditional capital for convertible bonds (31 December 2007)

In accordance with Article II Paragraph 3a of the Articles of Incorporation, share capital

Board of DirectorsCommittees:Audit Committee, Compensationand Nomination Committee

Management Board Corporate Functions

KRMDynamic Storage and RetrievalSystems Division

StowStatic Storage Systems Division

AFT(discontinued operation)

82

83

Group

may be increased through exercise of conversion rights by up to CHF 12 150 000.–,

corresponding to 900 000 fully paid-up bearer shares with a par value of CHF 13.50,

excluding shareholders’ subscription rights.

Article II Paragraph 3a of the Articles of Incorporation grants holders of bearer shares

a preferential subscription right in the event that such convertible and warrant bonds

are issued. The Company’s Board of Directors exercised this authority and listed a

convertible bond issue of CHF 55 million on 29 June 2007. For further details see

Section 2.5, Convertible bonds and options, of this Corporate Governance Report.

2.3 Capital changes

In the past four years, the following capital changes have taken place:

2.4 Participation certificates and profit participation certificates

Kardex AG has issued neither participation nor profit participation certificates by

31 December 2007.

Date

Description

Num

ber

ofshares

Parvalue

Num

berof

participation

certificates

Parvalue

Increase

(inCHF1000)

Decrease

(inCHF1000)

01.01.03 Initial inventory 375 000 100 424 500 100 79 950

17.05.04 Conversion of participationcertificates into bearer shares 424 500 100 –424 500 100

25.05.04 Par value reduction fromCHF 100 to CHF 71.20in 5:1 split 3 997 500 14.24

25.05.04 Issue of bearer shares1 1 629 953 14.24 185 80 135

23.05.05 Par value reduction fromCHF 14.24 to CHF 13.50 5 627 453 13.50 4 164 75 971

1 The Group published detailed information about the merger with Tuxedo Invest AG in the shareholder’s brochureof 19 April 2005.

Conditional capital convertible bonds

24.05.07 Creation for 2.25% conver- 900 000 13.50 12150 12 150tible bond 2007–2011

Capital

(inCHF1000)

2.5 Convertible bonds and options

On 26 June 2007 the company issued a convertible bond with the following essential

characteristics and subsequently listed the bond on the SWX Swiss Exchange. Existing

shareholders were granted preferential subscription rights.

Volume: CHF 55 million

Coupon: 2.25% p.a., payable each 29 June starting 29 June 2008

Maturity: 29 June 2011

Early redemption: Clean-up call, soft call, change of control in the issuer

Initial conversion price: CHF 77.66, subject to adjustment (conversion price on

31 December 2007: CHF 77.66)

Conversion ratio: The conversion ratio is determined by dividing the nominal

value of one bond (CHF 1000.–) by the conversion price in

effect at the time of conversion. If multiple bonds are

exercised at the same time, their sum is used. Fractions

are paid out in cash.

Quantity for sale: CHF 1 000.– or multiples thereof

Securitization: Permanent via global certificate; no right to issuance of

individual certificates is granted unless otherwise specified

in the bond conditions.

Assurances: Negative pledge (limited), pari passu, events of default,

cross default (limited)

Term to maturity: 4 years

Listing: SWX Swiss Exchange

Conditional capital: CHF 12150 000.–

Lead manager: Bank am Bellevue AG

Further details are available in the issue prospectus of 26 June 2007, which can be

downloaded from www.kri-group.com.

Kardex AG has no outstanding options on 31 December 2007.

Corporate Governance84

85

Group

3. Board of Directors

3.1 Members of the Board, other activities and interests

The Board of Directors of Kardex AG currently consists of five non-executive members

(according to the Articles of Incorporation between three and seven), all of whom are

independent in the sense of the Swiss Code of Best Practice for Corporate Governance.

Martin Wipfli was newly elected to the Board of Directors at the General Meeting on

24 May 2007. The Board of Directors thus consists of the following members:

Leo SteinerMember of the Board of Directors since 2004, term expires 2010

Chairman since the 2006 General Meeting

1943, Swiss citizen, grad. mechanical engineer, ETH Zurich, additional studies in

business management

Non-executive member

Since July 2007 chairman of the board of directors, Komax Holding AG

1992–2007 CEO of Komax Holding AG and head of executive management with the

Komax Group

Until 1991 Hayek Engineering & Management Consulting, Landis & Gyr,

Sulzer Escher-Wyss

Other directorships: Schaffner Holding AG

Has not served on either the management of the holding company or the manage-

ment board of any subsidiary during the past three years; has no material business

interest in either the holding company or any subsidiary.

Philipp BuhoferMember of the Board of Directors since 2004, term expires 2010

1959, Swiss citizen, HWV Horw/Lucerne


Since 1997 independent entrepreneur and board member with the companies

listed below

1987–1997 EPA AG, since 1993 member of executive management

1984–1987 Metro International

Other directorships: BURU Holding AG, DAX Holding AG (SME industrial interests),

Industrieholding Cham AG, RAPID Holding AG, Ziegler Papier AG




Dr. Rudolf HuberMember of the Board of Directors since 2005, term expires 2008

1955, Swiss citizen, doctor of economics, University of Zurich


Since 2005 independent entrepreneur, part-time lecturer at the Lucerne School of

Economics, lecturer at the University of St. Gallen, since 2006 president of the CFO

Forum Switzerland

1992–2004 Geberit Group, member of executive management and CFO

1987–1992 Bucher Guyer AG, head of finance and IT as well as head of group

finance of Bucher Holding AG

1986–1987 Sibir AG, head of controlling

Other directorships: Swiss Prime Site AG, Forbo Holding AG, Georg Fischer AG,

Wicor Holding AG, Zur Rose AG




Walter T. VogelMember of the Board of Directors since 2006, term expires 2009

1957, Swiss citizen, grad. mechanical engineer, ETH Zurich


Since 2007 CEO Aebi-Schmidt Group

2003–2007 CEO Von Roll Holding AG

1999–2003 Von Roll Group, head of the Infratec division and member of Group

management

1995–1999 HILTI AG, head of direct fastenings unit and member of extended Group

management

1992–1995 Aliva AG, director of sales and marketing and member of the executive

board

Other directorships: Schlatter Holding AG, Stadler Stahlguss AG




86 Corporate Governance

87

Group

Martin WipfliMember of the Board of Directors since 2007, term expires 2010

1963, Swiss citizen, lic. iur. University of Bern, lawyer


Since 1997 managing partner, Baryon AG

1995–1997 head of tax department of a Swiss private bank

1990–1995 Ernst & Young AG tax consulting

Other directorships: nebag, Elma Electronics AG, Frutiger AG, Schleuniger Holding AG

and other directorships with non-listed companies


ment of any subsidiary during the past three years; has no material business interest

in either the holding company or any subsidiary.

A proposal is to be put to the General Meeting of 22 April 2008 that Mr Dave

Schnell, 1947, Swiss citizen, graduate in business management, independent busi-

ness consultant, be elected to the Board of Directors.

3.2 Elections and terms of office

The members of the Board of Directors are elected by the General Assembly at stag-

gered intervals for a term of office of three years. There is no limit to the number of

times a member may be re-elected. In the event of a by-election, new members are

elected for the term of their predecessors. In accordance with the Organizational

By-Laws and regardless of the point reached in their term of office, members of the

Board of Directors who have turned 70 must tender their resignation at the next

ordinary General Meeting.

Name Year elected Term expires

Leo Steiner 2004 2010

Philipp Buhofer 2004 2010

Dr. Rudolf Huber 2005 2008

Walter T. Vogel 2006 2009

Martin Wipfli 2007 2010

3.3 Internal organization

3.3.1 Allocation of tasks within the Board of Directors

Mr Leo Steiner has served as chairman of the Board of Directors since the 2006

General Meeting. Dr Rudolf Huber is chairman of the Audit Committee; Mr Leo

Steiner is chairman of the Compensation and Nomination Committee. There are

no further special functions.

3.3.2 Board committees

Two permanent committees exist to assist the Board in or prepare it for important

decisions: the Audit Committee and the Compensation and Nomination Committee.

The committees are constituted as follows:

Audit Compensation andCommittee Nomination Committee

Leo Steiner Member Chairman

Philipp Buhofer Member

Dr. Rudolf Huber Chairman

Walter T. Vogel Member

Martin Wipfli Member

According to the Organizational By-Laws, the Board of Directors may set up other

committees to help it carry out its duties more efficiently. It appoints the chairman

and members of the committees and defines their duties. The committees report

back to the Board of Directors on their activities. However, overall responsibility for

the duties delegated to the committees remains with the Board of Directors.

3.3.2.1 Audit Committee

The Audit Committee primarily assists the Board in and prepares it for decisions in

the following areas:

– accounting and financial reporting (evaluation of half-yearly and annual reports

on behalf of the Board of Directors)

– risk management and auditing

– internal control systems and measures

– financial strategy, capital structure, financial objectives, financial planning

and control

– M&A transactions and other business with major financial impact

Decision-making power in all areas remains with the full Board of Directors.

3.3.2.2 Compensation and Nomination Committee

The Compensation and Nomination Committee is empowered to adopt resolutions

primarily in the following areas:

– fundamental personnel issues within the Group

– the appointment of individuals to the Board of Directors and to key positions

in the Group

– basic criteria regarding the appointment of members of the Management Board

as well as salary, bonus and other incentive systems

– questions regarding the remuneration of the Board of Directors and members

of the Management Board

– questions regarding performance-related payments


3.3.3 Procedures of the Board of Directors and its committees

Kardex AG’s Board of Directors is the supreme managerial and supervisory body of

the holding company and the Group. The Board of Directors appoints a chairman

from among its own members for a period of one year. It convenes by invitation of

the chairman or a member representing him, or at the request of one of its members.

Minutes detailing the Board’s discussions and decisions are kept and signed by both

the chairman and the secretary. The secretary is appointed by the Board of Directors

and need not be a member. The chairman also presides over the General Meeting

and, together with the Management Board, ensures that shareholders and stake-

holders receive any necessary information in good time.

Apart from the irrevocable legal requirements outlined in Art. 716a of the Swiss Code

of Obligations, the Kardex AG Board of Directors has the following responsibilities in

particular:

– making decisions on issues that have not been reserved or transferred by law,

the Articles of Incorporation or other regulations to another body

– defining the company’s strategy and management

– financial planning and control

– appointment and dismissal of the Management Board and signatories

– regular review of business operations

– formulation and preparation of further proposals to be put to the General Meeting

The Board of Directors meets regularly as often as business requires. In accordance

with the Articles of Incorporation, the Board convenes at least four times per year

for regular meetings, which generally last six to seven hours. The Board of Directors

also meets once a year for a two-day strategy session. In 2007, the Board met on

18 occasions. These meetings lasted two to seven hours.

The CEO and CFO are invited to the regular meetings of the Board of Directors. The

full Management Board attends the strategy and budget session. The Board may

invite division heads, other management personnel or external advisers to attend as

needed when dealing with specific issues. During the year under review legal advisers

and the Company’s statutory auditors were often present at Board meetings in con-

nection with the sale of the AFT division.

The full Board of Directors meets with the statutory auditors at the end of each January

and February to discuss the annual financial statements. The Audit Committee meets

with the statutory auditors several times in the course of the year.

The full Board of Directors visits and inspects one of the Group’s production compa-

nies once a year.

The Audit Committee is composed of two (up to three) non-executive members of

the Board of Directors, elected for a term of one year. The majority, including the

chairman, should be experienced in financial matters and accounting. The Audit

Committee appoints its own chairman and meets as often as required, but at least

three times a year. In 2007 it met on five occasions. These meetings generally lasted

four to five hours.

89

Group

The Compensation and Nomination Committee comprises three members from the

Board of Directors: the chairman and two non-executive members, elected by the

Board from among its own members. The chairman of the Board of Directors presides.

The Compensation and Nomination Committee meets at least once a year. In 2007 it

met on one occasion. This meeting lasted two hours, in line with the usual duration

of the Committee’s meetings.

See also Sections 3.3.2.1 and 3.3.2.2 for the coordination and delineation of duties

of the Board of Directors and its committees.

3.4 Definition of areas of responsibility

Through the Organizational By-Laws the Board of Directors has, to the extent per-

mitted by law, delegated responsibility for the operational management of the Group

to the Management Board under the supervision of the CEO. The Board has also

appointed a head for each division. The Management Board manages the Group on

the basis of the strategy adopted by the Board of Directors, the business plan, the

annual targets and the budget. The duties and responsibilities of the Management

Board are defined in the Organizational By-Laws. The Management Board’s main

responsibilities are:

– operational management of the individual divisions

– optimization of the internal organization and processes

– external representation of the Kardex Remstar Group

– promotion of internal and external communication

The CEO bears primary responsibility for developing the corporate strategy for adop-

tion by the Board of Directors, for operational management of the Company, its

overall financial results and for implementation of the strategy and action plan

adopted by the Board of Directors. The CFO is responsible for financial, tax and

capital management and is accountable for the development and implementation of

the principles, regulations and limits of risk control. He is also responsible for creating

transparency in respect of financial results and accountable for timely, high-quality

financial reporting. Each head of division bears overall responsibility for his division

and the management, results and risks thereof.

3.5 Information and control instrumentsvis-à-vis the Management Board

The Board of Directors is informed about the course of business and important

business events by the CEO or other members of the Management Board at every

Board meeting. This enables the Board to carry its supervisory duties regarding the

Group’s strategic and operational progress.


91

Group

Other instruments that enable it to monitor and control the Management Board’s

actions are:

– monthly written reports from the Management Board featuring key figures with

comparisons against the previous year and the budget together with a brief report

by the CEO

– annual strategic analyses of the individual divisions together with a plan, amended

each year, for the next few years

– annual revision of the business risk matrix for the Group as a whole and individual

divisions

– special reports on important investments, acquisitions and cooperative agreements

Chairman of the Board of Directors

The chairman of the Board meets regularly with the CEO to discuss ongoing

business operations.

Audit Committee

The Audit Committee meets regularly with the CEO and the CFO to discuss business

operations and clarify the applicable laws, principles and procedures (e.g. accounting

regulations) in relation to the Company. The Audit Committee reviews the financial

reporting processes. The external auditors are also invited to selected Audit Commit-

tee meetings.

Internal auditors

The internal auditors carry out operational and systems audits in accordance with

the Audit Plan approved by the Audit Committee. The internal auditors support the

various organizational units in reaching goals related to the maintenance and im-

provement of internal control systems. Following their reviews, the internal auditors

submit reports to the Audit Committee or to the full Board of Directors. They report

actual or suspected irregularities to the Audit Committee.

Measures based on the various reports submitted to these bodies are placed on the

agenda for their meetings and handled in succession. No extraordinary measures

were required during the period under review.

4. Management Board

4.1 Members of the Management Board, other activitiesand interests

The CEO is responsible for management of the holding company and of the Group.

In addition, he is the head of the Management Board, whose duties include preparing

and advising on the affairs of Kardex AG and the Group.

Jos De Vuyst, CEO1963, Belgian citizen, grad. electrical engineer, RU Gent, MBA Vlerick Management

School

Since 1 January 2006 CEO of the Kardex Remstar Group

2005 COO of the Kardex Remstar Group

2004 CEO of the Stow Division (Static Storage Systems) and CEO of Stow

International nv

2001–2003 General Manager of the Stow Division (Static Storage Systems)

1996–2003 General Manager of Stow International nv

1989–1996 Financial Manager of Stow International nv

Reto Welte, CFO1959, Swiss citizen, lic. oec. HSG

Since 1 January 2007 CFO of the Kardex Remstar Group

2003–2006 CFO Feintool Group

2002 CFO Gretag Imaging Group

2000–2001 CFO co. don AG, Berlin

1991–2000 various financial functions with Alstom and head of the Medium Voltage

Technology unit

Jürg Müller, Head of Division KRM1947 Swiss citizen, lic. oec. publ. University of Zurich

Since 1 July 2004 Head of the KRM Division (Dynamic Storage and Retrieval Systems)

1994–2004 Regional Manager CEE (Central and Eastern Europe) of the Dynamic

Storage and Retrieval Systems Division (KRM)

1992–1994 Head of Sales & Marketing NCR and AT&T (Switzerland)

1986–1991 Head of Trade & Industry Division NCR (Switzerland)

Hans De Staercke, Head of Division Stow1969, Belgian citizen, licentiate Applied Economic Sciences State University Gent

(RUG)

Since 2005 Head of the Stow Division (Static Storage Systems) and CEO Stow

International nv

1999–2004 General Manager of Stow Polska Sp.z.o.o., Warsaw (Poland)

1996–1999 Regional Sales Manager Gates Europe nv, Erembodegem (Belgium)

1994–1996 Export Sales Manager Bosal Benelux nv, Oevel (Belgium)

4.2 Management contracts

Kardex AG and its subsidiaries have no management contracts with third parties.


5. Compensations, shareholdings and loans

5.1 Content and method of determining compensationand of shareholding programmes

Compensation of the members of the Board of Directors is paid at a fixed rate. It is

determined annually in advance by the Compensation and Nomination Committee.

70 to 80% of compensation is paid in cash and the remaining 20 to 30% in Kardex

stock. Shares thus obtained are priced 20% lower than the average price of the

month before allocation and cannot be traded for a period of three years.

The Management Board receive compensation made up of a fixed basic salary and

a variable component, which, if targets are achieved and depending on individual

rank, amounts to a maximum of 45 to 50% of their fixed salary. At least 20% and a

maximum of 50% of the variable amount is paid in stock. Shares thus obtained are

priced 20% lower than the average price of the month before allocation and cannot

be traded for a period of three years. The variable amount effectively paid is based

on the extent to which individual and financial goals set in advance each year have

been achieved. The financial goals are determined either at the Group level (in the

case of the CEO and CFO) or at division level. Compensation of the Management

Board is determined by the Compensation and Nomination Committee. This is done

at the Committee’s December meeting following discussion of management per-

formance and objectives for the past year in the presence of the CEO. The Committee

members determine the variable component of compensation for the Management

Board based on their experience from other managing bodies and companies.

6. Shareholders’ participation rights

6.1 Voting right restrictions and representation

Each Kardex AG bearer share entitles the holder to one vote at the General Meeting.

There are no voting right restrictions. Furthermore, any shareholder has the right to

have his shares represented at the General Meeting by a proxy authorized in writing.

6.2 Statutory quorums

The statutes of Kardex AG do not prescribe specific quorums other than those

required by company law.

6.3 Convocation of General Meeting

In addition to the requirements of company law, the statutes require that any convo-

cation of the General Meeting must be announced in the company’s official mouth-

piece.

93

Group

6.4 Agenda

In accordance with the requirements of company law, the company’s Articles of In-

corporation specify that items for inclusion on the agenda may be proposed only by

shareholders representing shares worth at least CHF 1 million. Such items must be

submitted to the Board of Directors at least 60 days before the General Meeting.

7. Changes of control and defence mechanisms

7.1 Obligation to make an offer

In accordance with Article 4 of Kardex AG’s Articles of Incorporation, a purchaser of

company shares is only obliged to make a public offer under the terms of Article 32

(the statutory opting-up clause) of the Swiss Stock Exchange Act (BEHG) if his holding

exceeds 49% of the company’s voting stock.

7.2 Change-of-control clause

There are no change-of-control clauses.

8. Auditors

8.1 Duration of the mandate and term of officeof the auditor in charge

KPMG Ltd, Zurich, have been Kardex AG’s statutory auditors since 2006.

The auditor in charge has been responsible for the mandate since the General

Meeting on 31 August 2006. The auditors are elected by the General Meeting

for a period of one year.

8.2 Audit fees

In 2007, KPMG provided audit services to the value of CHF 920 thousand (2006:

CHF 880 thousand).

8.3 Additional fees

KPMG was also paid fees totalling CHF 180 thousand (2006: CHF 1 250 thousand)

for non-audit-related services.


95

Group

8.4 Information tools of the external auditors

The statutory auditors are supervised by the Audit Committee. As part of their audit

services, they provide the Audit Committee with regular feedback on their findings

and suggestions for improvement. The Audit Committee also meets the external

auditors at least twice a year to assess the auditors’ activities on an annual basis.

It relies here on its experience in working with the external auditors and their own

quality assurance measures in carrying out their duties and ensures that the auditor

in charge is suitably qualified and independent. The Audit Committee also reviews

the auditor’s fees.

9. Information policyKardex AG is committed to an open information policy and provides shareholders,

the capital market, employees and the general public with open, transparent and

timely information about the Group’s activities. As an SWX-Swiss-Exchange-listed

company, it also publishes information relevant to its stock price in accordance with

ad hoc publicity Art. 72 of the listing regulations.

The Group publishes a report on its activities every six months. All publications are

available in electronic form; the Annual Report is also available in printed form. The

Half-Year Report will in future be published on the Company’s website and printed

on request.

The annual analysts’ meeting and the General Meeting are both held in Zurich,

Switzerland.

Information is sent by e-mail or fax to the SWX, to the Swiss Commercial Gazette

(the company’s official mouthpiece) and other relevant national business publications.

It is also published simultaneously on the Group website at www.kri-group.com.

In addition, interested parties who have registered on the website can receive the

requested information by e-mail.

The company’s official mouthpiece is the Swiss Commercial Gazette. Information

published in connection with the maintenance of bearer share listings on the SWX

Swiss Exchange complies with the SWX Swiss Exchange’s listing regulations. These

can be found on www.swx.com.

The website www.kri-group.com provides up-to-date information about the Group,

products and contact information.

96

The addresses and contacts of the discontinued AFT Division are no longer listed.

AustriaKardex Austria GmbHPuchgasse 1, AT-1220 ViennaTel. +43 1 895 87 48, fax +43 1 895 87 48 20, [email protected], www.kardex.atGeneral Manager: Udo Neumann

Stow GmbH AustriaPuchgasse 1, AT-1220 ViennaTel. +43 1 897 53 80, fax +43 1 897 53 80 11, [email protected], www.stow.atGeneral Manager: Petr Jiru°tka

BelgiumS.A. Kardex nv155, rue Saint-Denis, BE-1190 Forest/BrusselsTel. +32 2 340 10 80, fax +32 2 340 10 86, [email protected], www.kardex.beGeneral Manager: Ben Van Nuffel

Stow International nvIndustriepark 6B, BE-8587 Spiere-Helkijn /Avenue du Bois-Jacquet 10, BE-7711 DottenijsTel. +32 56 48 11 11, fax +32 56 48 63 70, [email protected], www.stow.beGeneral Manager: Hans De Staercke

CyprusKardex Systems Ltd.Iris House – 8th Floor, John Kennedy St., PO Box 53133, CY-3300 LimassolTel. +357 25 875 600, fax +357 25 590 091, [email protected], www.kardexinternational.comGeneral Manager: Chris Koufaris

Czech RepublicKardex s.r.o.Biskupsky dvur 8, CZ-110 00 Prague 1Tel. +420 2 2481 4420, fax +420 2 2482 9376, [email protected], www.kardex.czGeneral Managers: Jürg Müller, Pavel Kraus

Stow Ceska Republika s.r.o.Modletice 141, CZ-251 01 Ríčany u PrahaTel. +420 311 344 300, fax +420 311 344 310, [email protected], www.stow.czGeneral Manager: Petr Jiru°tka

FinlandKardex Finland OYPiippukatu 11, FI-40100 JyväskyläTel. +358 20 755 82 50, fax +358 20 755 82 51, [email protected], www.kardex.fiGeneral Manager: Jari Kaiho

Group companies,addresses and contacts

Europe

97

FranceKardex SASUZA la Fontaine du Vaisseau, 12, rue Edmond-Michelet, FR-93363 Neuilly-Plaisance CedexTel. +33 1 49 44 26 26, fax +33 1 49 44 26 29, [email protected], www.kardex.frGeneral Manager: Guillaume Doré

Leader Systèmes S.A.1, rue du Port, BP 20, FR-78600 Le Mesnil-le-RoiTel. +33 1 39 62 05 62, fax +33 1 39 62 51 41,[email protected], www.leadersystemes.comGeneral Manager: Klauspeter Bader

Stow France S.A.Avenue de la Tour-Maury, BP 46, ZAC du Fresne, FR-91280 Saint-Pierre-du-PerrayTel. +33 169 89 50 50, fax +33 169 89 04 06, [email protected], www.stow.frGeneral Manager: Michel Dekkers

GermanyBellheimer Metallwerk GmbHKardex-Platz, DE-76756 Bellheim/PfalzTel. +49 7272 70 90, fax +49 7272 70 92 49, [email protected], www.bellheim-kx.deGeneral Managers: Bernhard K. Früh, Arnold C. Schura

GSS Global Software Solutions GmbHIm Bruch 2, DE-76744 Wörth/RhineTel. +49 7271 76 07 70, fax +49 7271 76 07 98, [email protected], www.gss-online.comGeneral Manager: Michael Hehn

Kardex GmbHDieselstrasse 5, DE-61476 Kronberg/TaunusTel. +49 6173 60 09 0, fax +49 6173 60 09 70, [email protected], www.kardex.deGeneral Managers: Udo Neumann, Diethelm Förster

Megamat GmbHMegamat-Platz 1, DE-86476 Neuburg/KammelTel. +49 8283 999 0, fax +49 8283 999 154, [email protected], www.megamat.comGeneral Manager: Klauspeter Bader

Stow Deutschland GmbHKarl-Bosch-Strasse 2, DE-65203 WiesbadenTel. +49 611 26 76 90, fax +49 611 26 76 979, [email protected], www.stow.deGeneral Manager: Michael Tessun

GreeceKRI Logistics Ltd.23 Alexandroupoleos, GR-11527 AthensTel. +302 10 748 73 56, fax +302 10 770 90 04, [email protected], www.kardexinternational.comGeneral Managers: Chris Koufaris, Demetris Kouloundis, Nicos Palas

HungaryKardex Hungaria Kft.Szabadság út 117, HU-2040 BudaörsTel. +36 23 507 150, fax +36 23 507 152, [email protected], www.kardex.huGeneral Managers: Udo Neumann, Gyula Konya


98

IrelandKardex Systems Ireland Ltd.The Enterprise Centre, Clondalkin Industrial Estate, IE-Dublin 22Tel. +353 1 457 22 55, fax +353 1 457 15 22, [email protected], www.kardex.ieGeneral Managers: David J. Newman, David Coffey

ItalyKardex Te-Co S.p.A.Via Staffora n. 6, IT-20090 Opera (Mi)Tel. +39 02 57 60 33 41, fax +39 02 57 60 55 92, [email protected], www.kardex.itGeneral Manager: Ermanno Acerbi

NetherlandsKardex Systemen bvBarwoutswaarder 13 a, NL-3449 HE WoerdenTel. +31 348 49 40 40, fax +31 348 49 40 60, [email protected], www.kardex.nlGeneral Managers: Bert IJff, Ad C. Veldhuizen

Stow Nederland bvMinervum 7208b, NL-4817 ZJ BredaTel. +31 76 57 98 181, fax +31 76 57 98 180, [email protected], www.stow.nlGeneral Manager: Hans van Dijk

NorwayKardex System ASStanseveien 4, NO-0975 OsloTel. +47 23 33 81 20, fax +47 23 33 81 21, [email protected], www.kardex.noGeneral Manager: Erik Mastad

PolandKardex Polska Sp.z.o.oUl. Rzymowskiego 30, PL-02-697 WarsawTel. +48 22 852 20 43, fax +48 22 852 20 43, [email protected], www.kardex.plGeneral Managers: Jürg Müller, Pavel Kraus

Stow Polska Sp.z.o.o.Ul. Rzymowskiego 30, PL-02-697 WarsawTel. +48 22 647 06 51, fax +48 22 647 00 67, [email protected], www.stowpolska.comGeneral Manager: Dariusz Pietrzynski

PortugalKardex Sistemas S.A. (Sucursal em Portugal)Tel. +34 91 655 71 35, fax +34 91 677 92 98, [email protected], www.kardex.ptGeneral Manager: Laureano Morán

RussiaKardex CO. LTDSerpukhovskiy Val 19/17, RU-115191 MoscowTel. +7 495 786 6617, fax +7 495 786 6615, [email protected], www.kardex.ruGeneral Manager: Erich Spichtig

SlovakiaKardex Slovensko, s.r.o.Plynárenská 1/A, SK-821 09 BratislavaTel. +421 2 5810 73 50, fax +421 2 5810 73 10, [email protected], www.kardex.skGeneral Managers: Jürg Müller, Pavel Kraus

Group companies, addresses and contacts

99

Stow Slovensko s.r.o.Plynárenská 1/A, SK-821 09 BratislavaTel. +421 2 5810 73 00, fax +421 2 5810 73 10, [email protected], www.stow.skGeneral Manager: Petr Jiru°tka

SpainKardex Sistemas S.A.Sierra de Albarracin N° 1-Nave 1, ES-28830 San Fernando de Henares, MadridTel. +34 91 655 71 35, fax +34 91 677 92 98, [email protected], www.kardex.esGeneral Manager: Jean Amardeil

Storage Solution Iberica S.L.C/Constitución, 3, ES-08960 Sant Just Desvern (Barcelona)Tel. +34 934 736 794, fax +34 934 735 637, [email protected], www.etsystems.esGeneral Manager: Laureano Moran Losada

SwedenKardex Scandinavia ABJohannesfredsvägen 11A, SE-168 69 BrommaTel. +46 8 26 85 65, fax +46 8 25 22 42, [email protected], www.kardex.seGeneral Managers: David J. Newman, Erik Mastad

SwitzerlandKardex AG (Holding)Airgate, Thurgauerstrasse 40, CH-8050 ZurichTel. +41 (0)44 386 44 10, fax +41 (0)44 386 44 18, [email protected], www.kri-group.comGeneral Manager: Jos De Vuyst

KRM Service AGChriesbaumstrasse 2, CH-8604 VolketswilTel. +41 (0)44 947 61 11, fax +41 (0)44 947 61 61, [email protected], www.krm-division.comGeneral Manager: Jürg Müller

Kardex Systems AGChriesbaumstrasse 2, CH-8604 VolketswilTel. +41 (0)44 947 61 11, fax +41 (0)44 947 61 61, [email protected], www.kardex.chGeneral Manager: Peter Grob

TurkeyKardex Systems AGRepresentative Office, Istanbul Irtibat Ofisi, Perpa Ticaret Merkezi, TR-34384 Okmeydani IstanbulTel. +90 212 220 55 50, fax +90 212 220 53 00, [email protected], www.kardex.com.trGeneral Managers: Jürg Müller, Erich Spichtig, Hakan Aksoy

UKKardex Systems (UK) Ltd.Kestrel House, Falconry Court, Bakers Lane, GB-Epping CM16 5LLTel. +44 8702 422 224, fax +44 8702 400 420, [email protected], www.kardex.co.ukGeneral Manager: David J. Newman

Megamat (UK) Ltd.29 Shenley Pavilions, Chalkdell Drive, Shenley Wood, GB-Milton Keynes, Bucks MK5 6LBTel. +44 190 852 23 22, fax +44 190 852 23 00, [email protected], www.megamat.comGeneral Manager: Tony Busby


100 Group companies, addresses and contacts

Stow U.K. Co. Ltd.Unit B4, Marston Gate, South Marston Ind. Est, Swindon, Wiltshire SN3 4TQTel. +44 845 201 35 40, fax +44 845 201 35 41, [email protected], www.stowuk.comGeneral Manager: Frank Huygevelde

USARemstar International Inc.41 Eisenhower Drive, US-Westbrook ME 04092-2032Tel. +1 207 854 1861, fax +1 207 854 1610, [email protected], www.remstar.comGeneral Manager: Gary Gould

ChinaKardex Systems Ltd.Representative Office China, Room 1906, Qiang Sheng Building, No. 145,Pu Jian Road, CN-200127 ShanghaiTel. +86 21 6873 5433 or 6873 1922, fax +86 21 6873 1922,[email protected], [email protected], www.kardexinternational.comGeneral Manager: Günter Kohlhaupt

Shanghai Stow Storage Equipment Co. Ltd.Room C1-D1, 9th Floor, No. 528, East Laoshan Road, CN-Shanghai 200122Tel. +86 21 6434 1812, fax +86 21 6434 1269, [email protected], www.stow.com.cnGeneral Manager: Jennifer Lu

IndiaKardex Systems Ltd.No. 1003/25, 2nd Floor, 59 “C” Cross, 4th “M” Block, Rajajinagar, IN-Bangalore 560 010Tel. +91 80 231 494 01, fax +91 80 231 493 [email protected], www.kardexinternational.comGeneral Managers: Chris Koufaris, Matthew Shammas, Balaji Srinivasan

MalaysiaKardex Systems Ltd.Blk 6-1-1, Jalan 1/130, Meadow Park, Off Jalan Klang Lama, MY-58200 Kuala LumpurTel. +603 79806755, fax +603 79805944, [email protected] Managers: Chris Koufaris, Matthew Shammas, Yap Kok Sun

SingaporeKardex Systems Ltd.Far East Representative Office, 6 Little Road, Singapore 536984Tel. +65 62 889 042, fax +65 62 881 253, [email protected],www.kardexinternational.comGeneral Managers: Chris Koufaris, Matthew Shammas, David Lee

TaiwanKardex Systems Ltd.Representative Office, 3F No. 651-2, Chung Cheng Road, Shin Chuang, TW-Taipei HsienTel. +886 2 2906 9899, fax +886 2 2906 3369, [email protected],www.kardexinternational.comGeneral Managers: Chris Koufaris, Matthew Shammas, Yung Tien Lin

AustraliaKardex VCA Pty Ltd.A5 Kendall Industrial Park, Kendall Street, AU-Wodonga, VIC 3690Tel. +61 2 6056 1202, fax +61 2 6056 2422, [email protected], www.kardex.com.auGeneral Manager: Julie Sage

America

Asia

Australia

101


The Group publishes its Annual Report in English and German.

The German version is legally binding.

All statements in this report that are not based on historical fact are forward-looking

statements that offer no guarantee of future performance. They entail risks and

uncertainties that include but are not limited to future global economic conditions,

exchange rates, legal requirements, market conditions, activities of the competition

and other factors that are beyond the Group’s control.

Published by

Kardex AG, Zurich

Counsel/text

apr AG für Public Relations, Zurich

Idea, concept and design

Seiler Zurich, Zollikerberg

Printed by

Digital-Print, Zurich

Kardex AG, Thurgauerstrasse 40, CH-8050 Zurich, phone +41 (0)44 386 44 10, fax +41 (0)44 386 44 18

[email protected], www.kri-group.com

annualreport 2007 - kardex · annualreport 2007. kardexremstargroupataglance continuedoperations...

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