Annual Report 2006 - Morningstar, Inc.

Annual Report2006

Global Reports LLC

Annual comparison 2006 2005 2004 TEUR TEUR TEUR Share capital 6,600 5,000 5,000

Number of shares 6,600 5,000 5,000

Share price High 102.5

Low 94.1

Year-end 102.5

Sales revenue 1,594,369 1,083,972 722,910

Order backlog 1,577,515 655,395 990,216

EBITDA 125,174 79,389 45,823

EBIT 92,018 55,043 33,168

EBT 78,570 42,953 27,325

Net profi t for the year (before minorities) 79,525 36,516 25,892

Cash fl ow from operating activities 160,172 -3,936 75,108

EBT in % of sales revenues 4.9 % 4.0 % 3.8 %

Investments 73,310 32,643 30,012

In intangible assets and property, plant and equipment 12,466 9,986 2,936

in fi nancial assets 60,844 22,657 27,076

Employees (including apprentices) 10,720 7,220 6,871

Total assets 1,573,489 1,002,300 831,126

Equity 315,194 152,517 90,077

Equity ratio 20.0 % 15.2 % 10.8 %

A-TEC IndustriesKey indicators

A-TEC INDUSTRIES Annual Report 2006

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Content

04 Statement by the Management Board

06 Governing bodies

07 The A-TEC Industries Group

08 A-TEC Industries worldwide

10 The A-TEC Industries share and Investor Relations

12 Management report

18 Austrian Energy & Environment 20 2006 business review AEE Group

22 ATB Austria Antriebstechnik

24 2006 business review ATB Group

26 EMCO Group

28 2006 business review EMCO Group

30 Montanwerke Brixlegg

32 2006 business review Montanwerke Brixlegg

34 Report of the Supervisory Board

36 A. Consolidated balance sheet

38 B. Consolidated income statement

39 C. Consolidated statement of changes in equity

for the fi nancial years 2005 and 2006

40 D. Consolidated cash-fl ow statement

42 E. The Group

43 F. Restructuring within A-TEC-Group

46 G. Summary

58 H. Critical accounting estimates and judgements

60 I. Financial instruments and risk management

63 J. Notes to the consolidated fi nancial statements

120 Investments in fully consolidated and unconsolidated companies

122 Movement in intangible assets and property, plant and equipment

124 Auditor’s report

125 Contacts

2006 business reviewof the four divisions

Consolidated annualfi nancial statements 2006

Annual Report 2006A-TEC INDUSTRIES 03

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Statement by the Management Board

Dear Shareholders,

Last year our young, fast growing international in-

dustrial group reached the pinnacle of its achieve-

ments to date. A-TEC Industries AG was admitted to

listing on the Vienna Stock Exchange on 1 Decem-

ber 2006, and our share was included in the Austrian

blue chip index, the ATX on 19 March 2007. This

was one of our key goals during the past few years

of hard but successful work. Access to the equity

market has not only opened up new growth perspec-

tives for the Group, but the IPO means that others

have an opportunity to gain a stake in the A-TEC

Industries success story.

At the same time, there has never been any doubt

in our minds about our intention to retain a majori-

ty in A-TEC and control of its destiny. The strong

investor interest that the IPO encountered and the

outstanding performance of our share price during

the initial months of listing show that the market

is highly appreciative of our personal commitment,

and has confi dence in our experience and our

visions for the Group’s future. We should like to

take this chance of thanking our shareholders for

this trust.

In 2006 our prime concern was readying the A-TEC

Group for the fl otation, and we launched integration

and consolidation initiatives with this end in mind. In

particular, we undertook a broad-based restructur-

ing programme at the ATB Austria Antriebstechnik

Group. The success of this exercise is refl ected in

improvements in all of the fi nancial performance in-

dicators, achieved in the face of an adverse trading

environment. At the same time we forged ahead with

external growth – notably through the acquisition of

a majority in the Lindeteves-Jacoberg Group for the

Drive Technologies Division and takeovers that have

signifi cantly widened the product portfolio of the

Plant Construction Division.

In 2006 all four divisions again signifi cantly exceeded

the targets management set for them. Order backlog

reached record levels in Plant Construction, due to

a number of major international contract wins. Our

largest division continued to gain market shares, and

has full order books until well into 2008. The major

acquisition for the Drive Technologies Division cata-

pulted it into the big league on the global market, and

this business is now one of the world’s leading elec-

tric motor manufacturers. The Mechanical Engineer-

ing Division has progressively developed into a full-

line supplier, and its successful business model, with

its focus on custom solutions and unbeatable value

for money, has now won it a worldwide reputation.

Meanwhile 2006 was a year of superlatives for the

Metal Industry Division, with copper hitting previously

undreamt-of highs on the London Metal Exchange.

Thanks to our well timed investment in expanding the

electrolysis plant we will be well placed to capitalise

on booming copper demand.

Together with our 11,000 - strong workforce – to

whom we owe a debt of gratitude for their outstan-

ding contribution in 2006 – we have taken only a

few years to turn A-TEC Industries AG into a diversi-

fi ed industrial group in which each division is among

the world leaders in its market, but our ambitions

certainly do not end there. A-TEC will continue to

evolve during the current fi nancial year, through strat-

egic, complementary acquisitions that represent a

continuation of our previous strategy and important

building blocks in the Group’s expansion – because

growth is not a question of where we are, but of

where we are heading.

You can rest assured that we are not only aware of

our present strengths but also have clear goals, and

will again be directing all our energies to attaining

them in 2007.

A-TEC INDUSTRIES Annual Report 2006 04

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Mirko KovatsChairman of the Management Board

Christian SchmidtMember of the Management Board


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Governing bodies

1997 1999 2001 2002

• EMCO Maier • Magdeburg Werkzeugmaschinen

• ATB Austria Antriebtechnik• INTOS

• ATB Motorentechnik• Austrian Energy & Environment • Duro Dakovic

Management Board

Mirko Kovats

Chairman of the Management Board

(resigned on 3 February 2006

and reappointed on 9 March 2006)

Christian Schmidt

Deputy Chairman

(since 9 March 2006)

Johannes Ditz

Member of the Management Board

(appointed on 3 February 2006

and resigned on 9 March 2006)

The Supervisory Board

Freimut Dobretsberger

Member (from 3 February to 28 September 2006)

Chairman (since 28 September 2006)

Johannes Edelsbacher

Deputy Chairman (since 28 September 2006)

Klaus Sernetz

Member (since 28 September 2006)

Gernot Grimm

Member (since 6 November 2006)

Günter Robol

Deputy Chairman (until 3 February 2006)

Member (between 3 February and 9 March 2006)

Chairman (from 9 March until 28 September 2006)

Ronny Pecik

Chairman (until 3 February 2006)

Member (between 3 February and 9 March 2006)

Deputy Chairman (from 9 March until 6 November 2006)

Mirko Kovats

Chairman (from 3 February until 9 March 2006)

Christian Schmidt

Deputy Chairman (from 3 February until 9 March 2006)

Franz Fehringer

Chairman (until 3 February 2006)

Authorised signatories

Franz Fehringer

Christian Schmidt

(resigned on 3 February 2006)


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The A-TEC Industries Group

Vienna domiciled A-TEC Industries AG unites four

divisions – Plant Construction, Drive Technologies,

Mechanical Engineering and Metal Industry – in a

strong group. With some 11,000 employees and

revenue of about EUR 1.6 billion (bn) in 2006, A-TEC

Industries is one of the leading Austrian in dustrial

groups. The A-TEC name is associated with an

international success story that stems from a strat-

egy of rapid expansion and a corporate philosophy

combining a clear vision of the future with integrity

and a sense of responsibility.

Today A-TEC Industries is a diversifi ed multinational

group of companies with a global network that is

among the leaders in many different markets. This is

due in no small measure to the extensive experience

of a management team centred on the Group’s own-

ers which boasts outstanding technical expertise and

excellent contacts in the relevant industries. With this

background, management can be relied on to iden-

tify growth opportunities and potential synergies that

leverage signifi cant effi ciencies and cost reductions.

All the four cornerstones of our business – Austrian

Energy & Environment, ATB Austria Antriebstechnik,

EMCO and Brixlegg Montanwerke – are internatio-

nal groups which have been rapidly assembled and

integrated by the experienced A-TEC management

team with a view to securing market-leading po-

sitions in their respective sectors. Our success is

driven by organic growth in the Group as well as

acquisitions selected in accordance with clear

criteria. A-TEC Industries confi nes itself to invest-

ments in companies in mature industries, operating

in proven areas of business and technologies. It tar-

gets fi rms with high turnaround potential that are a

good fi t for the core business of its existing divisions.

Decisions to invest depend on a convincing case

that turn around can be achieved within a reasonable

period, and that market leadership can be captured

in the relevant industries.

2003 2004 2005 2006

• ATB Technologies• Von Roll Inova

• Montanwerke Brixlegg• ATB SELNI• ATB Morley• ATB Shanghai• Babcock Power España • AE&E Chennai Works• I.D.E.A. • FAMUP

• AE&E Shanghai • AE&E Australia • ATB Sever• MECOF

• Majority in the Linde-teves-Jacoberg Group

• AE&E Inova• AE&E CZ

Geschäftsbericht 2006A-TEC INDUSTRIES 07

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A-TEC Industries worldwide

A-TEC INDUSTRIES AGA-1010 Vienna, Austria

Headquarters of subsidiaries:

Corporate headquarters:

ATB AUSTRIA ANTRIEBSTECHNIK AGA-8724 Spielberg, Austria

AUSTRIAN ENERGY & ENVIRONMENT AG & Co KGA-8074 Raaba, Austria

EMCO STAR ALLIANCE HOLDING GmbHA-1010 Vienna, Austria

MONTANWERKE BRIXLEGG AGA-6230 Brixlegg, Austria

Status as of 31 Dec. 2006


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Principal subsidiaries as at 31 December 2006

ATB ANTRIEBSTECHNIK GmbHWelzheim, Germany

ATB MOTORENTECHNIK GmbHNordenham, Germany

ATB TECHNOLOGIES GmbHLustenau, Austria

ATB COMPONENTS s.r.o.Ostrava, Czech Republic

ATB SELNI SASNevers, France

ATB MORLEY Ltd.Leeds, UK

ATB SEVER a.d.Subotica, Serbia

Lindeteves-Jacoberg Ltd.Singapore, Singapore

ATB AUSTRIA ANTRIEBSTECHNIK AGDRIVE TECHNOLOGYSpielberg, Austria

94 %

90.02 % 6 %100 %

100 %

100 %

100 %

Von Roll Inova Holding AGZürich, Switzerland

Babcock Power España, S.A.Bilbao, Spain

Duro Dakovic TEP d.o.o.Slavonski Brod, Croatia

AE&E CZ s.r.o.Brno, Czech Republic

AE&E (Australia) Pty. Ltd.Sydney, Australia

AE&E Chennai Works Ltd.Chennai, India

I.D.E.A Private Ltd.Chennai, India

AE&E Energy & Environment Consulting Shanghai Co. Ltd., Shanghai, China

100 %

100 %

100 %

100 %

100 %

100 %

100 %

100 %

100 %

94 % KOVOHUTY, a.s.Krompachy, Slovakia

Montanwerke BrixleggWasserkraftwerk Reith GmbHSalzburg, Austria

Montanwerke BrixleggWasserkraftwerk Alpbach GmbHSalzburg, Austria

MONTANWERKE BRIXLEGG AGMETAL INDUSTRIYBrixlegg, Austria

91.7 %

90.5 %

87.1 %

100 %

100 %

100 %

100 %

100 %

Mexpol Werkzeug-maschinen GmbHHilden, Germany

EMCO Maier GmbHHallein, Austria

EMCO Famup SrlSan Quirino, Italy

EMCO MECOF SrlBelforte Monferrato, Italy

INTOS Spol., s.r.o. Žebrák, Czech Republic

EMCO Italia SrlLegnano, Italy

EMCO STAR ALLIANCE HOLDING GmbH MECHANICALENGINEERINGHallein, Austria

100 %

99.01 %

60 %

70.46 %

AUSTRIAN ENERGY & ENVIRONMENT AG & Co KGRaaba, Austria

A-TEC INDUSTRIES AG Vienna, Austria

58.97 %


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One of the most far-reaching developments of the

year under review was the admission of the A-TEC

Industries share to listing on the Vienna Stock Ex-

change on 1 December 2006. The start of trading

was preceded by a major European roadshow du-

ring which management introduced itself to Austrian

and foreign investors. The Company’s shares were

publicly offered in Austria and were privately placed

with European institutional investors.

A total of 454,063 existing shares (including the

greenshoe) and 1,600,000 new shares issued by

way of a capital increase were placed with Austri-

an private and institutional, and European institu-

tional investors at a price of EUR 100. The offering

met with strong interest, necessitating reductions

in allocations and use of the greenshoe option

(204,063 shares). The issue raised a total of EUR

205 million (m). Deutsche Bank acted as global co-

ordinator and bookrunner, and as co-lead manager in

conjunction with Erste Bank.

The IPO reduced the holdings of the three founders

from 100 % to 68 %. Some 32 % of the shares were

thus in fl oat by the balance sheet date. At this time

some 55 % of the shares were held by the M.U.S.T

private foundation owned by CEO Mirko Kovats, a

further 7 % by the J.E. Loidold private foundation

owned by Management Board member Christian

Schmidt and 6 % by the RPR private foundation.

The board members’ foundations thus held 62 %

of A-TEC Industries, giving the Company a stable

core shareholding structure. RPR has entered into

a six-month lock-up agreement, and the M.U.S.T.

and J.E. Loidold foundations have undertaken not to

trade the shares for 12 months.

Only three months after admission to trading the

ATX Committee decided to promote A-TEC Indus-

tries AG to Austria’s ATX blue chip index with ef-

fect from 19 March 2007. The ATX contains the 20

Austrian companies with the highest turnover and

market capitalisations. During its fi rst four months of

listing our share was one of those most in demand

on the Vienna Stock Exchange. This was refl ected in

the share price, which advanced by more than 50 %,

from an initial EUR 100 to EUR 158.59 by 31 March

2007, outperforming the market by a wide margin;

the ATX put on about 11 % over the same peri-

od. The liquidity of the share also progressed very

encouragingly. From the initial listing on 1 December

2006 until 31 March 2007 turnover was more than

4m shares valued at EUR 545m.

Immediately after the roadshow, which took the

management to many European cities, A-TEC In-

dustries stepped up its investor relations effort. The

main aim of our investor relations activities is to

provide transparent, timely and simultaneous inform-

ation for all market participants, so as to strengthen

the confi dence of the shareholders and the fi nancial

community in the Company. We do not limit our-

selves to the mandatory publications such as the

annual and quarterly reports, and stock exchange

announcements, but also try to meet market par-

ticipants in person as often as possible. Because

of this we held presentations for investors in Bri-

tain, France, Germany and Italy during the fi rst three

months of listing.

Evaluations of A-TEC Industries by two investment

banks and analysis houses will be published on 31

March 2007. Some reports are available for down-

load at www.a-tecindustries.com (Investor Relations/

Research Reports).

Due to the Company’s sound trading performance

and the positive growth prospects for the coming

year the Management Board will be recommending

the payment of a dividend of EUR 3 for the 2006

fi nancial year to the Annual General Meeting on 7

May 2007. The distribution will amount to some EUR

19.8m if the proposal is accepted. This corresponds

to a payout ratio of 24.6 %. Both shareholders who

subscribed at the time of the issue and those who

acquired shares after the listing are entitled to the

full dividend for 2006. The planned ex-dividend date

is 21 May 2007.

The A-TEC Industries share and Investor Relations


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Contact

Gerald Wechselauer, Head of Investor Relations

A-TEC Industries AG

Wächtergasse 1, A-1010 Vienna

Phone +43 (0)1 227 60 direct dial 130

Fax +43 (0)1 227 60 - 160

E-mail: [email protected]

A-TEC Industries share at a glance

2006 close (EUR) 102.45

Closing high (EUR) (up to 31 March 2007) 161.00

Closing low (EUR) (up to 31 March 2007) 97.00

Market capitalisation at 31 December 2006 (EUR m) 676,500,000

Performance 2.5 %

Average turnover (shares) 118,020,159

Shareholder information

ISIN AT 00000ATEC9

Stock exchange symbol ATEC

Ticker symbols ATEC.VI, ATEC AV

Market segment Prime market

First day of trading 1 December 2006

Issue price EUR 100

Number of shares in circulation 2,053,920

Free fl oat 31.1 %

Index (since 19 March 2007) ATX

Financial calendar

27 April 2007: Announcement of results for the fi nancial year 2006

7 May 2007: Annual General Meeting

15 May 2007: Announcement of results for the fi rst quarter of 2007

21 May 2007: Ex-dividend date

25 May 2007: Dividend payment

14 August 2007: Announcement of results for the fi rst half of 2007

15 November 2007: Announcement of results for the fi rst three quarters of 2007

100

110

120

130

140

150

ATX

A-TEC

December 2006 January 2007 February 2007 March 2007

A-TEC vs ATX

55 %

7 %

6 %

32 %

M.U.S.T. 55 %

Free float 32 %

RPR 6 %

J. E. Loidold 7 %

Shareholder analysis

Status as at 31 March 2007

Annual Report 2006 11A-TEC INDUSTRIES

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Economical conditions

The global economic boom continued its trend in

2006. Driven by a growth in GDP of 3.4 % in the

Americas and a strong economic growth in Asia –

particularly with regard to China, which experienced

an increase of economic performance by 10.4 %

– the global economy has been in good, stable con-

dition during 2006, even though individual regions

show different development trends. The continuing

tense situation on international commodity markets

had a severe impact on international business rela-

tions in 2006. Nevertheless, within the Euro-zone,

the economic growth amounted to 2.6 % based on

increasing investments of the industry as well as high

export quotes. In Austria, the economy grew above

average in 2006 by 3.3 % (prior year 2.6 %), affected

not only by exports, but also by the continuing up-

ward-trend within the construction industry. Econo-

mic researcher claim that also in 2007 the Austrian

economy will experience a growth in GDP above the

European average (estimate: 2.6 %). In Germany the

economic trend for 2007 is as well promising, as cal-

culations published by the Federal Statistical Offi ce

in 2006 show a growth in GDB by 1.7 % adjusted for

price in comparison to the prior year. The reason for

the economic growth in this core market of A-TEC is

fi rst and foremost the increasing domestic demand.

Investments rose above-average, whereas the pri-

vate consumption only grew moderately.

Development of the business

The fi nancial statements 2006 have been prepared

pursuant to the International Financial Reporting Stan-

dards (IFRS, formerly International Accounting Stan-

dards – IAS), as adopted by the EU. The development

of the different divisions (sup groups) is stated below

in detail. Changes within the basis of consolidation

occur as the following companies were included in the

Group’s consolidated fi nancial statements:

Lindeteves-Jacoberg-Group, Singapore

MECOF S.p.A., Italy

KPS Beteiligungs GmbH, Vienna

Magdeburg Werkzeugmaschinen AG, Germany

Acquisition of the Alstom-business in the

Czech Republic and Germany.

2006 was the most successful fi nancial year of the

A-TEC Group, having recorded increases in the fi elds

of revenue, incoming orders, order status and other

signifi cant key performance indicators.

Revenue

A strong organic growth and an ongoing effi cient

acquisition strategy led to a considerable increase

of the Group’s revenue. In total, the Group’s reve-

nues amounted to in EUR 1.594 bn (prior year: EUR

1.084 bn) representing an increase by 47.1 %, a

new record for A-TEC. This distinctive rise, to which

all divisions of the Group contributed to, might be led

back to the stable and fl ourishing economic environ-

ment in the core markets of A-TEC, as well as to the

high price level on international commodity markets

(copper).

Moreover, the fi rst consolidation of Alstom Industrial

Boilers and Plants, an Australian company acting in

the energy power business which was acquired in

November 2005, as well as the fi rst consolidation

of the acquired sectors Industrial Boilers and Plants

in Germany and the Czech Republic which has

been belonging to the basis of consolidation since

Mai 2006, and the take-over of the majority share

in Lindeteves-Jacoberg Ltd. (LJ-Group) – a holding

company listed on the Singapore stock exchange

– contributed to the Group’s boost in the total reve-

nue. The generated revenues by the LJ-Group in the

period from June to December 2006 accounted for

EUR 69.9 m and are included in the Group’s total

revenue for the fi nancial year 2006.

Management report A-TEC INDUSTRIES AG Consolidated fi nancial statements 2006


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The revenue contribution by division is as follows:

Plant Construction 38.5 %

Drive Technologies 19.1 %

Mechanical Engineering 10.7 %

Metal Industry 31.7 %

Like all divisions within the Group, the Plant Construc-

tion Division experienced a considerable increase in

revenue by 38.3 %, which accounts for EUR 613.1

m in absolute numbers (prior year EUR 443.3 m). A

further increase in evidence was recorded within the

Drive Technologies Division with revenues totalling

in EUR 304.5 m (prior year 211.1 m), which corre-

sponds to an increase in revenue by 44.2 % compa-

red to the results of the fi nancial year 2005. Exclu-

ding the consolidation of the LJ-Group, the division’s

revenue amounted to EUR 235.6 m which implies an

increase by 11.6 % compared to the prior fi nancial

year. The Mechanical Engineering Division achieved

revenues of EUR 170.8 m. Compared to the refe-

rence value of 2005, this complies with a 36.9 %

rise. The best development of sales was recorded

within the Metal Industry Division, a division expe-

riencing a great boom in the demand of copper. This

positive development led to an increase of revenues

by 65.1 % from EUR 306.5 m to EUR 506.1 m.

Incoming orders and volume of orders

The development of incoming orders in 2006 can be

described as very satisfactory. Incoming orders total-

led in EUR 1,775.0 m (prior year: EUR 456.7 m),

which is an increase by 288.7 %. This development

led to the fact that at balance sheet date 31 Decem-

ber 2006, A-TEC Industries has recorded the high-

est volume of orders ever since with a total of EUR

1,577.5 m (prior year EUR 655.4 m). This is in fact a

solid basis for the future development of revenues.

The surge in demand showed its effects in all of the

four divisions. This way, the Plant Construction Divi-

sion recorded a large number of considerable, inter-

national orders in the amount of EUR 1.23 bn which

led to the highest total volume of orders at balance

sheet date 31 December 2006 at about EUR 1.45

bn. This key performance indicator has doubled sin-

ce the year end 2005 (volume of orders at 31 De-

cember 2005: EUR 626 m).

Likewise, within the Drive Technologies Division,

the volume of incoming orders increased by 59.0 %

to EUR 340 m (prior year: EUR 213.8 m). Most

pleasantly, the volume of orders at 31 December

2006 amounted to EUR 77.7 m, a sharp rise of

185 % compared to the prior year. Similar trends

are to be recognised in the Mechanical Technologies

Division. Incoming orders accounted for EUR 206.7

m (2005: EUR 60.8 m) and the volume of orders

amounted to EUR 4.7 m (2005: 18.6 m) at year

end 2006.

Earnings

The signifi cant growth of the business volume had

positive effects on the development of earnings of

A-TEC Industries. The Group’s earnings before in-

terests, taxes, depreciation and amortisation (EBIT-

DA) increased by 58.4 % to EUR 124.8 m (prior

year: EUR 79.4 m), the profi t from operations (EBIT)

accounted for EUR 92.0 m exceeding the prior

year’s EBIT of EUR 55.0 m by 69.9 %. The Group’s

EBIT-marge improved in the reporting period from

5.1 % to 5.9 %. This is in fact the highest EBIT-Mar-

ge that A-TEC Industries has achieved within one

fi nancial year ever since. Moreover, the profi t before

income (EBT) rose by 84.0 % from EUR 43.0 m to

EUR 78.6 m. The profi t for the year in the fi nancial

year 2006 added up to EUR 80.4 m (prior year: EUR

36.5 m). Compared to the prior year, this is a sharp

increase of 120 %.

The earnings per share (basic) in the reporting peri-

od amounted to EUR 15.66. At the annual general

meeting on 7 May 2007, the board of management

will propose a dividend of EUR 3 per share due to


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the earnings per share fi gure. This corresponds to

at distribution quota of 24.6 %, related to the price

per ultimo – a return of dividend of 2.9 %. Due to the

distribution of dividends, the Group confesses itself

to follow the strategy of a shareholder-friendly divi-

dend policy.

If the key performance indicators illustrated above

are broken down by the individual divisions, one can

see that within the Plant Construction Division, the

EBITDA increased to EUR 30.0 m (prior year: EUR

27.3 m) by 9.9 %. Also the EBIT achieved a plus

of 10.0 %, as it grew from EUR 23.1 m in the prior

year to EUR 25.4 m. Last but not least, the EBT ex-

perienced a growth of 37.4 % to EUR 31.6 m (prior

year: EUR 23.0 m.

Within the Drive Technologies Division, the rise of in-

ternational commodity prices in the second year half

of 2006 could partially be passed on to the market.

As a result, all key performance indicators regarding

the earnings could be improved compared to the prior

year. In 2006 the EBITDA amounted to EUR 27.3 m

(prior year: EUR 14.6 m), the EBIT increased to EUR

10.8 m (prior year: EUR 6.3 m) and the EBT accoun-

ted for EUR 1.3 m compared to EUR 1.1 m in 2005.

The Mechanical Engineering Division recorded an

EBITDA of EUR 21.4 m. Compared to the EBITDA

of the prior year (EUR 12.3 m) this is an increase of

73.9 %. The EBIT experienced a growth of 157.6 %

to EUR 15.2 m (prior year: EUR 5.9 m) and the EBT

also grew by 303.3 % from EUR 3.0 m in 2005 to

EUR 13.4 m.

Moreover, the Metal Industry Division achieved the

best income ever with an EBITDA of EUR 48.2 m

(prior year: EUR 25.9 m). This indicates an increase

of 86.1 %. Additionally, the EBIT and the EBT expe-

rienced a strong boost, as the EBIT accounted for

EUR 43.2 m (prior year: EUR 21.1 m) and the EBT

amounted to EUR 40.2 m (prior year: EUR 18.6 m)

Financial situation, cash-fl ow statement and profi tability

The Group’s total assets grew to EUR 1,573.5 m

from EUR 1,002.3 m by 57 %. First and foremost,

the signifi cant growth can be led back to the acquisi-

tion of the Lindeteves-Jacoberg-Group, Singapore,

as well as to the acquisition of the Alstom-business

in the Czech Republic and Germany. Despite the ac-

quisition of the LJ-Group and the purchase of 75 %

of the EMCO STAR ALLIANCE Holding GmbH, the

equity ratio increased form 15.2 % to 20.1 % due to

the capital increase in the course of the initial public

offering. In nominal values, the equity increased from

EUR 152.5 m to EUR 316.1 m, providing a solid

equity basis for the future.

The growth in liquid assets from EUR 153.5 m to

EUR 311.0 m can be put down to the cash infl ow

resulting from the capital increase, as well as to the

prepayments within the subgroup plant construc-

tion.

Effective 1 December 2006, a capital increase

re sulting from the IPO from EUR 5.0 m to EUR

6.6 m was made. The registered capital consists of

6,600,000 no-par common shares. The issue price

of the new shares accounts for EUR 100, resulting

in a total cash infl ow of EUR 160 m.

The shares have been listed on the Vienna Stock

Exchange, until 18 March 2007 in the Prime Market,

since 19 March 2007 they have been forming part

of the ATX.

Shares and structure of shareholders

The registered capital of A-TEC Industries AG

amounts to EUR 6.6 m. Expressed in other words,

the registered capital is made up of 6.6 bearer

shares. Approximately 32 % shares of the total are

in free fl oat, whereas 55 % are held by the M.U.S.T.


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Privatstiftung of CEO Mirko Kovats. Another 7 % are

in the property of J.E. Loidold Privatstiftung of CFO

Christian Schmidt and the remaining 6 % belong to

RPR Privatstiftung.

The shares of A-TEC-Industries were listed on the

Prime Market of the Vienna Stock Exchange from

1 December 2006 to 18 March 2007. Ever since, it

has formed part of the ATX-Index. The Group’s suc-

cess is refl ected in the share price, which increased

by 58.6 % until the end of March.

Business situation, risk management, corporate strategy

Risk management forms an integral part within the

management structure of the individual subgroups:

the Austrian Energy & Environment Plant Construc-

tion group, the ATB Drive Technologies group,

EMCO Mechanical Engineering group, the Brixlegg-

Montan-group, as well as the A-TEC INDUSTRIES

AG acting as the parent company.

The areas of Finance, Purchase, Human Resour-

ces, Quality and IT are centrally managed on sub -

group level. Within production areas of the group,

particularly the latest acquired entities SAP systems

are to be implemented respectively expanded

Risks regarding the Group’s future development

arise in connection with the cyclical environment

of the individual subgroups, which is characterised

by the intense stress of competition and increasing

costs of material and therefore infl uences profi t and

liquidity.

The Group’s positive economic development is infl u-

enced by the intense acquisition- and restructuring

strategy which is implemented in the lately acquired

affi liate. Rapid growth might also hold signifi cant fi -

nancial risks, which are minimised in by performing

planning- and auditing process in different due-dili-

gence-phases. In the course of due-diligence pro-

cesses the identifi cation of potential environmental

risks is carried out.

Chances concerning the future development can be

seen in the realisation of synergetic effects resulting

from a rapid integration of acquired companies and

opportunities to act and react cost-effectively in a

competitive environment.

The number of employees at 31 December 2006

amount to EUR 10,720 (2005: EUR 7.169), which

is an increase of 50 % in comparison to the prior

year. The majority of the addition can be led back to

the acquisitions, which were carried out in 2006, the

minor part results from the organic growth.

The Group’s sustainability of profi tability is done by

each of the individual subgroups by the stabilisation

of market shares. This is implemented by the on-

going development of existing and new products and

services, by additional investments and additional

acquisitions in important, strategic business units, by

training and educating the employees and by secu-

re and intensify the knowledge transfer within the

Group.

Research and Development

Research and Development activities are vital ele-

ments within the individual subgroups of the A-TEC

Group, which are aimed at safeguarding the going

concern of each of the Group’s entities.

Intense research activities are conducted in close

corporation with clients and universities, in particu-

lar by the Plant Construction Division. The division

focuses on the development of thermic energy pro-

duction and environmental engineering. The focus

in the area of environmental engineering, lies in the

advancement of wet and dry fl ue gas desulphuriza-

tion respectively cleaning. In the area of power en-


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gineering the fl uidised bed burning technology (fi xed

and circulating fl uidised bed burning constructions

for biomass and alternative fuel) is in the center of

interest.

The Drive Technologies Division carries out its deve-

lopment activities at its subsidiary ATB Technologies

GmbH in Vorarlberg, which moved to a high-tech de-

velopment centre to Lustenau in 2006. The develop-

ment activities focus on two specifi c areas, being of

utmost importance for the ATB-Group in the future:

The development of a series of permanent magnet

engines ad the development of a set of frequency

converter.

Subsequent events after the balance sheet date

The Minerals & Metalls GmbH, of which 100 % be-

long to the international Group A-TEC Industries, si-

gned a contract concerning the acquisition of 100 %

of Gindre Duchavany S.A. France, in 2007. The an-

titrust suit is expected to be completed within the

next two months, so that during the second quar-

ter of 2007 the closing can be carried out. Gindre

Duchavany is on of the leading manufacturers of

copper semi-fi nished products (bars and profi les), as

well as components and parts for electrical industry.

The company’s headquarters, which achieved reve-

nues in the amount of EUR 300 m and employed

450 people in 2006, is in Lyon/France. Beyond this,

Gindre Duchavany disposes of further productions

plants in France, Germany, Great Britain, Spain and

the USA. The latest acquisition of A-TEC will be in-

tegrated in the Metal Industry Division and completes

the product portfolio with its electrical components in

an optimal way.

In January 2007, A-TEC Industries increased its in-

vestments in the ATB Austria Antriebstechnik AG,

Spielberg, from 89.32 % to 90.02 %.

On 19 April 2007 the board of management has de-

cided – using the authorization which was given to

them at the extraordinary general meeting on 6 No-

vember 2006 – to issue up to 800,000 convertible

bonds with a maturity of seven years and a cancella-

tion right after 5 years.

The convertible bonds are exclusively reserved for

existing shareholders of the company and will be

offered for subscription in a non-public Offering. A

trade in subscription rights will not take place. Con-

vertible bonds, which are not taken up by the share-

holders, shall then be offered to institutional investors

in the course of a bookbuilding at same conditions in

the form of a private placement.

Outlook

At the beginning of 2007, the global economy is in

good and stable condition, whereas differences in

the economic growth of individual economic areas

continue to exist. Even though the most rapidly gro-

wing areas in the fi nancial year 2007 will be USA and

China, economic researcher expect also a positive

development in Europe. Against this background, the

board of directors of A-TEC Industries AG is confi -

dent of the fi nancial year 2007 and expects a further

increase of revenues to about EUR 2 bn. Hand in

hand with this goes the improvement of the income.

As it was announced during the process of the IPO,

ATEC industries continuously audits potenial targets

for aquisition, which might complement the existing

divisions.



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Vienna, 20 April 2007

signed: signed:

Dkfm. Dr. Mirko Kovats Dipl.-Ing. Christian Schmidt

Chief Executive Offi cer Management Board

Disclosures pursuant § 243 a HGB/UGB

1. The nominal capital of A-TEC Industries AG

amounts to EUR 6.6 m respectively 6.6 m bearer

shares and has been fully paid in. All shares have

same rights and duties.

2. Any restrictions, concerning the voting rights or

the transfer of shares are not known.

3. The shareholder structure of A-TEC is characte-

rized by one majority owner – M.U.S.T. Privatstif-

tung, Vienna, owning 55 % of the total shares.

Other shareholders include RPR Privatstiftung,

Vienna and J.E. Loidold Privatstiftung, Vienna,

owning less than 10 % each. Since the initial pu-

blic offering in 2006, about 32 % of the shares

are in free fl oat.

4. There are no shares with specifi c control rights.

5. There are no employee involvement models of-

fered to the employees.

6. There are no further appointments regarding the

members of the board of management and the

supervisory board which exceed the requirements

and illustrations of the law. Likewise, there are

no regulations concerning changes of the com-

pany statutes that can be not derived from the

law directly.

7. Up to now, there has not been decided on a share

repurchase programme by the board of manage-

ment.

8. If one shareholder, who did not hold a controlling

interest at the time of the issue of the bond in

2005 – controlling interest pursuant to § 22 Über-

nahmegesetz, then a situation of a change in con-

trol might arise, which grant the bondholder the

right of cancellation.

9. Compensation agreements pursuant to § 243a

Z 9 UGB/HGB do not exist.


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Austrian Energy & Environment – the clean energy specialist

Thanks to its largest division, Plant Construction, which com-prises the Vienna-based Austrian Energy & Environment (AE&E) Group, A-TEC Industries is one of the world’s leading interna-tional leading suppliers of thermal generation and environmental systems. The AE&E Group has fi ve business units – Boilers and Plants, Flue Gas Cleaning, Thermal Waste Treatment, Industrial Equipment and Plant Services – and is thus a one-stop supplier of all the technologies relevant to industrial and municipal en-ergy generation. AE&E delivers holistic engineering solutions from the development, fabrication, erection and commissioning stages through to plant modernisation and operation.

The AE&E Group unites some of the strongest brands in the industry, and employs a total of 2,726 staff in Austria, Austra-lia, China, Croatia, the Czech Republic, France, Germany, India, Spain, Switzerland and the USA.

2006 2005

EUR m EUR m

Revenue 613.1 443.3

EBITDA 30.0 27.3

EBIT 27.3 23.1

EBT 31.6 23.0

Employees 2,726 2,153

A-TEC INDUSTRIES Geschäftsbericht 2006 18

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High Tech-Werkzeugmaschinen für Industrie und Ausbildung

Global Reports LLC

2006 business review Austrian Energy & Environment Group

The year under review was hallmarked by continu-

ed gains in market shares through organic growth

and acquisitions. AE&E completed the purchase

of Alstom’s industrial boiler and plant business and

made good progress with the integration of the com-

panies thus acquired, in Australia, the Czech Republic

and Germany. Our plant engineering group embark-

ed on expansion into the Asia-Pacifi c growth mar-

kets when it founded Austrian Energy & Environment

(Australia) Pty Ltd. in 2005. Now the German opera-

tions, renamed AE&E Inova, are a perfect match for

the activities of the Swiss subsidiary Von Roll Inova

due to their outstanding expertise in waste incinera-

tion. The new Czech site is one of the world’s leading

suppliers of boilers and industrial power plants. Be-

sides these technological synergies, the acquisitions

made in 2006 will allow AE&E to break into major

new markets in Central and Eastern Europe.

These strong market positions are enabling AE&E

to take full advantage of the excellent trading envir-

onment on global energy markets and the immense

growth potential that this is creating. Constantly rising

energy use is also generating demand for alternative

energy technologies in the advanced industrialised

countries. This is taking place against the backdrop

of the current global debate on the observable signs

of climate change, which is mainly due to the high

level of CO2 emissions from fossil fuel power genera-

tion. The growing call for alternative energy systems

in the mature markets, and the rapid expansion of

generating capacity in emerging markets such as

China, India and Russia are key success drivers for

the AE&E Group.

Financial year 2006 not only brought the best per-

formance in the group’s history, but will also go down

as a year of important strategic decisions. AE&E’s

partnership with the Tokyo based Japanese power

station construction company IHI will initially focus

on the fast growing coal-fi red power station market

in Germany, where a number of large coal-fi red

generating stations are at the planning or construc-

tion stages. Following the acquisition of I.D.E.A. in

2005, the Indian company was rapidly integrated in

2006. The increased use of the engineering services

of this subsidiary by all business units has resulted in

permanent improvements in capacity and the cost

base across the entire AE&E Group.

AE&E has also gained competitive advantages from

the expansion of manufacturing capacity at the Duro

Dakovic works in Croatia, and greater use of the

Indian Chennai Works for export projects. Entry to

such large and strategically important energy mar-

kets as Brazil, South Africa and the USA has raised

AE&E’s international profi le. The establishment of a

representative offi ce in Moscow means that AE&E’s

reach now extends to all of the world’s main energy

markets.

Systematic market development brought AE&E a

large number of major international contracts worth

a total of EUR 1.23bn, resulting in a record order

backlog of some EUR 1.45bn at balance sheet

date – more than double the total a year before

(31 December, 2005: EUR 626m) – refl ecting the

impressive progress made by the plant engineering

business. At the start of the year, an order for the re-

vamping of the Bamberg waste-fi red district heating

station in Germany marked a milestone for the grow-

ing incinerator retrofi tting business, and strengthen-

ed the group’s hand in the growing replacement in-

vestment market. Inova France won a major contract

for a waste incinerator in Belgium. And as a result

of AE&E’s excellent references, during the fi rst half

it secured the contract for the construction of the

largest biomass plant ever built in the Netherlands,

which will process animal waste.

An impressive demonstration of AE&E’s leadership

in fl ue gas purifi cation was the order received in June

2006 for a fl ue gas desulphurisation unit for a hard

coal power station in Poland. Another success on


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the important Central and East European market was

the award of a contract for a similar desulphurisation

system at a coal-fi red power station in the Czech Re-

public. The group’s leadership of the West European

substitute fuel combustion market was underlined by

an order for a circulation fl uidised bed boiler and a

Turbosorp fl ue gas purifi cation unit for a power plant

in Witzenhausen, Germany. The Spanish subsidiary,

Babcock Power España also booked several major

orders in 2006, including projects in the high growth

Chinese (coal gasifi cation plants) and Brazilian (fl uid-

ised bed boiler for a paper factory) markets.

At balance sheet date the AE&E Group employed

a total of 2,726 people (including apprentices), of

whom 703 were with the Von Roll Inova Group, 459

at Babcock Power España, 476 at Duro Dakovic,

312 at AE&E in Austria, 273 at I.D.E.A., 183 at

AE&E Australia, 164 at AE&E in the Czech Repub-

lic, 145 at AE&E Chennai Works and 11 at AE&E

Energy & Environment Consulting Shanghai. Due to

the expansion of the group and strong order books

at existing operations the head count rose by around

21 % during the year under review (2005: 2,153).

In 2006 the AE&E Group launched an international

information exchange programme billed as “Know-

ledge without borders” in order to promote internal

know-how transfers.

AE&E is continuously improving its thermal power

generation and environmental technology by moun-

ting a major research and development effort, in

close cooperation with clients and universities. The

group invested about EUR 3.5 m in research in

2006. The main thrust on the environmental tech-

nology front was the development of wet and dry

fl ue gas desulphurisation and purifi cation processes.

On the energy technology side, research centred on

fl uidised bed combustion systems (stationary and

circulating fl uidised bed combustion systems for

biomass and substitute fuels) and the optimisation of

waste incineration plants.

The group posted signifi cant improvements in all

revenue and earnings measures in 2006. Revenue

escalated by 38.3 % to EUR 613.1m (2005: EUR

443.3m), EBITDA by 9.9 % to EUR 30m (2005:

EUR 27.3m), and EBIT by 10 % to EUR 27.3m

(2005: EUR 23.1m). EBT was 37.4 % up at EUR

31.6m (2005: EUR 23m).

In fi nancial 2007, the AE&E Group will again be act-

ively investigating potential acquisitions with a view

to extending its product portfolio and market reach,

and it is thus set for further expansion. All the group

companies’ distribution and product competencies

are being expanded in order to enhance the effi cien-

cy of the marketing effort across all regions. There

is particularly strong growth potential for the sale of

services to large-scale facilities, since AE&E has

an excellent reputation as an integrated supplier of

thermal generation and environmental systems, and

service provider. Because of this the service busi-

ness will be run as an independent business unit

from 2007 on.

Rising global energy demand will continue to create

a positive trading environment in 2007. The need

to retrofi t many thermal power stations in Central,

Eastern and Southeastern Europe with fl ue gas de-

sulphurisation systems presents an attractive growth

market which AE&E is well equipped to exploit. The

Russian and North African markets are also likely to

have a strong impact on the group’s business per-

formance. In addition, tougher environmental regula-

tions under the amended Landfi ll Order are fuelling

increased demand for waste incinerators. AE&E’s

management is therefore optimistic that revenue and

earnings will continue to grow in 2007.


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ATB Austria Antriebstechnik – a leading producer of electrical drive systems for industrial applications and appliances

ATB Austria Antriebstechnik AG is a leading producer of elec-trical drive systems for industrial applications and appliances. With a comprehensive product range including both mass pro-duced industrial motors and custom special motors, ATB is well equipped to confront international competition, and its bespoke solutions for industrial customers have carved out strong posi-tions in lucrative niche markets.

A-TEC Industries AG owns 90.02 % of the company, and the re-maining shares are in fl oat, and are listed on the Vienna Stock Exchange. The ATB Group has a total of 6,511 employees at its sites in Austria, China, the Czech Republic, France, Germany, Poland, Serbia and the UK.


2006 2005

EUR m EUR m

Revenue 304.5 211.1

EBITDA 27.3 14.6

EBIT 10.8 6.3

EBT 1.3 1.1

Employees 6,511 3,603

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2006 business review ATB Group

The main milestone of 2006 for ATB Austria

Antriebstechnik AG was the acquisition of a majority

in the Singapore listed Lindeteves-Jacoberg (LJ)

Group. This major investment transformed ATB into

one of the world’s largest electric motor manufac-

turers and a full-line supplier. As a result the group

gained market shares, despite the continuing diffi -

culties posed by high world commodity prices. While

strong investment in the small and medium manu-

facturing and large-scale industrial sectors stimulated

growth in ATB’s core German market, it was unable

to pass on the continuing sharp increases in material

costs until the second half, and then could not do so

in full. The Home Appliances business unit, which

specialises in domestic and garden appliances, again

faced diffi cult trading conditions. In particular, it was

hit by the growing trend towards the relocation of cus-

tomers’ production facilities to Central and Eastern

Europe, and concentration in their industries, both in

Europe and the USA. ATB responded to the resul-

tant downward pressure on prices by mounting cost

reduction and productivity enhancement drives, and

by migrating the affected manufacturing operations

to the Serbian site.

Thanks to the integration of the Serbian company

ATB Sever, purchased at the end of 2004, and the

upgrading of the technology at this factory through

the relocation of machinery and tools, we achieved

our strategic goal of concentrating all of the key

stages of the value chain within ATB Sever. In con-

nection with these restructuring efforts, all produc-

tion of windings was terminated at ATB Bastro and

moved to Serbia. The integration of the Large Motors

Department at ATB Sever – particularly important

to the product portfolio – was also an outstanding

success, and several major international orders were

secured for the next few years.

The phased acquisition of the Lindeteves-Jacoberg

(LJ) Group – ATB currently holds around 60 % of the

shares – represented an additional challenge during

the year under review. This key expansion move

added four subsidiaries with global brands – Schorch

(Germany), Brook Crompton (UK), Tamel (Poland)

and Western Electric (China) – to the Group. The ac-

quisition rounded out ATB’s range of mass produced

and custom motors. The integration of the LJ Group

will also create numerous potential synergies as

a result of the joint use of low-wage locations for

standard motors and shared procurement of com-

ponents for custom motors in CEE. Moreover, the

expan sion of the motors group enabled ATB to break

into new markets including the US, Asia-Pacifi c, the

UK (Schorch and Brook Crompton) and Australia

(Western Electric). The scale that ATB has achiev-

ed by means of this acquisition also offers a range

of distribution and purchasing benefi ts – through a

near doubling of procurement volumes and immense

opportunities for cross-selling. As a supplier of com-

ponents for large motors, ATB Sever is of particular

value to Schorch, and the groundwork has already

been laid for close cooperation.

Establishing uniform distribution structures during the

adjustment to the new scale of the motors group was

the main strategic priority of the integration process

in 2006, and this was largely completed by the end

of the year. Efforts centred on tightening the group’s

focus on specifi c industry and product segments,

and this required various personnel adjustments.

ATB succeeded in exploiting synergies in the sales

and marketing organisation – particularly in the core

German, Austrian and Swiss markets.

During the summer of 2006, the ATB Group’s high-

tech development facility in Lustenau entered full-

scale operation. In order to establish ATB’s reputation

as an innovation leader in drive system technology

and offer custom solutions, the centre concentrated

on the development of a range of permanent magnet

(PM) motors. This is ATB’s response to the growing

demand for energy-effi cient electric motors. PM mot-

ors attain very high effi ciencies and lend themselves

to compact construction, thus also saving materials.

The fi rst models in this new, highly innovative line are


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now production ready, and will be delivered to various

customers for the fi rst time in 2007. ATB has deve-

loped a range of extremely compact frequency inver-

ters in order to meet the growing demand for electro-

nically controlled drives, and offer versatile modular

power electronics for custom drives. We have already

won a major manufacturer of vacuum pumps as a

customer for this new drive electronics technology,

and the fi rst models will be launched on the market

during the current fi nancial year.

Although the majority stake in the LJ Group and

the integration of ATB Sever weighed on earnings,

all of the division’s fi nancial performance indicators

improved in 2006. The ATB Group recorded re-

venue of EUR 304.5m in 2006 – a year-on-year

gain of 44.2 % (2006: EUR 211.1m). Both robust

organic growth and the consolidation of the LJ

Group drove this sharp increase in Group revenue.

Even without the consolidation of LJ, the fi gure

would still have been 11.6 % up year on year, at

EUR 235.6m.

During the second half of 2006 the ATB Group suc-

ceeded in passing on at least part of the increases

in material prices to customers, resulting in improve-

ments in all earnings fi gures. EBITDA for 2006

advanced to EUR 27.3m (2005: EUR 14.6m), and

EBIT to EUR 10.8m (2005: EUR 6.3m). Earnings

before tax (EBT) rose from the previous year’s EUR

1.1m to EUR 1.3m. Order intake progressed by

59 % to EUR 340.0m (2005: EUR 213.8m), while

order backlog was still more gratifying. At balance

sheet date order books totalled EUR 77.7m – up by

85 % year on year (2005: EUR 42m). ATB is thus

excellently placed in terms of work in hand for the

coming months.

In 2006 A-TEC Industries AG marginally increas-

ed its interest in ATB Austria Antriebstechnik AG

from 89.32 % to 90.02 %. The remaining shares

are in free fl oat, and are listed on the Vienna Stock

Exchange (standard market auction segment)

under security ID number AT0000617832. ATB’s

share price stood at EUR 13.20 at year end

(31 December 2005: EUR 16.50). During the year

under review the high was EUR 17.90, recorded on

2 January 2006, and the low was EUR 12.00 (on

29 August 2006).

The average number of employees in fi nancial 2006

was 5,364 (2005: 3,711), and at balance sheet

date the head count was 6,511 (2005: 3,603). This

45 % jump is explained by the LJ Group acquisition.

ATB has rapidly countered the pronounced trend to-

wards motor standardisation by integrating the sales

and marketing organisation of the entire group and

upgrading the ATB Sever site. This market develop-

ment could mean that output of internally manufac-

tured goods declines in the medium term. Due to the

success of the action taken, the management of the

ATB Group is confi dent that the Drive Technology Di-

vision will maintain its positive performance in 2007

despite continuing fi erce competition and exception-

ally high materials prices – particularly those of the

main inputs, electrical sheet and copper. In order to

facilitate further integration the Supervisory Board

has approved the establishment of a Vienna based

holding company to exercise centralised control over

the entire ATB Group.


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EMCO – a leading supplier of innovative machine tool solutions

The EMCO Group – a line-up of machine tool manufacturers – forms the A-TEC Industries Mechanical Engineering Division. The group companies – EMCO, Magdeburg Werkzeugmaschinen, IN-TOS, FAMUP and MECOF – collaborate as a network of European suppliers of intelligent and innovative solutions for the engineer-ing industry. The EMCO Group develops and manufactures a wide range of machine tools applying a “design to cost” approach. This extends from conventional lathes and milling machines to various types of CNC machining centres and fully automated CNC manufacturing cells. The group also includes EMCO Industrial Training Systems which markets a modular training programme that enjoys worldwide success.

Headquartered in Hallein, Austria, the group also has production sites in the Czech Republic, Germany and Italy, and sales offi ces in Asia, Germany and the USA. The Mechanical Engineering Divi-sion employs a total of 942 highly skilled staff around the world.

26Geschäftsbericht 2006A-TEC INDUSTRIES

2006 2005

EUR m EUR m

Revenue 170.8 124.7

EBITDA 21.4 12.3

EBIT 15.2 5.9

EBT 12.1 3.0

Employees 942 948

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Global Reports LLC

2006 business reviewEMCO Group

Innovative designs, custom solutions, excellent qua-

lity and outstanding value for money – these were

the key success factors that EMCO again focused

on in 2006. The “design to cost” approach was in-

troduced in the lathe business during the year under

review, and due to its outstanding success it will be

extended to other areas of operations.

Financial year 2006 also saw a number of key de-

cisions, including the transformation of the Austrian

Hallein site into the international headquarters, re-

structuring of the sales organisation and manage-

ment changes.

Hallein has become the nerve centre of the group’s

research and development, service, marketing, fi n-

ance, logistics, central coordination, international

sales and strategy functions. The site’s headquar-

ters role was also highlighted by the construction of

a new demonstration centre. During the year under

review EMCO began showcasing the entire product

range together in this high-tech setting. Lathes from

Hallein, conventional machinery from the Czech Re-

public and milling centres produced by the Italian

subsidiary, EMCO FAMUP are on view there. In line

with the new corporate structure, each of the inter-

national EMCO locations now focuses on its core

competencies. EMCO FAMUP is the centre of ex-

pertise for CNC milling centres, while EMCO ITALIA

specialises in controlled cycle and large CNC lathes,

EMCO MECOF focuses on custom high-speed mil-

ling solutions, and INTOS in the Czech Republic is

the group centre of excellence in conventional turn-

ing and milling machines. EMCO also has sales

subsidiaries in Germany and the USA.

The key challenge in 2006 was the rapid emer-

gence of new markets, to which EMCO responded

by creating a still more effective distribution org-

anisation. Headquarters in Hallein will now focus

more strongly on servicing overseas markets, which

have been divided into three regions, as well as the

group’s traditional European markets. Marketing

specialists with regional know-how were recruited

during the year. The main sales markets in 2006

other than Austria were the USA, Germany, Scan-

dinavia, Russia and the Benelux countries. EMCO

made headway against fi erce competition as a

result of its improved marketing, high quality and

technological lead.

Another high priority in 2006 was expanding the

product range. Thanks to an ambitious product

strategy, bolt-on acquisitions and a hard-working

R&D department, EMCO has rapidly transformed

itself into a full-line supplier. There are few com-

panies in Europe that can offer such a compre-

hensive portfolio of state-of-the-art machine tool

technology. Today, EMCO markets a full range of

CNC machine tools, including various types and

sizes of lathes, effi cient turning and milling cen-

tres, and – following the acquisition of the Italian

market leader FAMUP, and the technology supplier

MECOF – high-performance machining centres for

almost every conceivable application. In particular,

the combination of turning and milling presents

EMCO with new opportunities on the European

and international markets as a full-line supplier of

metal-cutting machinery. The machine tool business’s

successful product range was extended in 2006.

The E45 and E25 models were added to the E

series, and the MAXXTURN 45 turning centre was

introduced. The year also saw the launch of the

LINEARMILL 600 HD and EM 5-axis machining

centres, the Emcomat 14, 17 and 20 convention-

al lathes, the EMCO MECOF MECMILL and the

Concept Turn 450 training lathe.

The quality of EMCO’s training products and ser-

vices has made it a world leader in this fi eld. EMCO

training machines with interchangeable control sys-

tems are currently being used by a wide variety of

training facilities around the globe, and the group

is currently the sole supplier of such training sys-

tems. EMCO’s activities do not end with machine

tool manufacturing, it also runs training courses for

skilled machine operators in developing and newly

industrialised countries in cooperation with schools,


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universities and industrial users. We delivered train-

ing machines worth EUR 325,000 to the Syrian

Education Ministry at the start of 2006, and another

large order was received from the largest technical

training institution in Estonia, THK during the year.

Towards the end of 2006 a large training project to

a value of EUR 600,000 was implemented in the

Dominican Republic; EMCO provided the mach ine

tools and software. On the Austrian home market,

EMCO completely reequipped the training work-

shop at the Salzburg branch of the WIFI further

education association.

EMCO’s success as a full-line supplier brought it a

37 % increase in revenue in 2006. The machine tool

group generated record revenue of EUR 170.8m

(2005: 124.7m), mainly as a result of gains in mar-

ket shares in Germany. The key earnings indicators

improved still faster, and EMCO signifi cantly out-

performed its peer group in the industry. EBITDA

rose by 74 % to EUR 21.4m (2005: EUR 12.3m),

EBIT jumped by 157.6 % to EUR 15.2m (2005:

EUR 5.9m), and EBT soared by 303.3 % to EUR

12.1m (2005: EUR 3.0m).

The large number of major orders booked were

another sign of the EMCO Group’s good perfor-

mance during the year under review. Order books

at EMCO Germany were far above target. EMCO

MECOF received large orders from the Beyler/Bist-

ronic Group (Germany), PSA/Peugeot (France)

und Swepart (Sweden), while four HYPERTURN

690 machines were sold to India.

There is a major client in the USA in the shape of

Lokring, and there are already good contacts on the

Russian market, which the group plans to develop

further.

Highly skilled employees are a key success factor

for the EMCO Group. In 2006, the group employed

a total of 942 people – almost unchanged from the

previous year (2005: 948). Of this total, 348 were

based in Hallein, 24 were at EMCO Germany and

26 at EMCO USA. In Italy, EMCO FAMUP employ-

ed 57 people, EMCO MECOF 126 and EMCO

ITALIA 60. Magdeburg Werkzeugmaschinen AG

had a head count of 70, and the Czech sales sub-

sidiary INTOS had 231 staff. Offering employees

good career development opportunities and keep-

ing them well informed are central to the effi cient,

team-based working methods that the group aims

for. EMCO places great emphasis on training and

development because employees’ familiarity with

the technical state-of-the-art is critical to success.

Last year staff development programmes focused

on languages, IT and salesmanship, as well as

courses for service and application engineers, spec-

ialist training in areas such as programming, and

management training.

In 2007, EMCO plans to build on the new distribu-

tion structure by adapting its global export strategy

to the various regional markets, with a particular

emphasis on Italy. The main aims will be to con-

solidate existing distribution partnerships and forge

new ones, to step up worldwide marketing of the

EMCO Group and to increase global awareness of

the EMCO brand among experts. To these ends ap-

pearances at numerous trade fairs are planned, as

well as highly innovative direct marketing strategies

that are still unusual in the machine tool industry.

All activities will centre on the “design to cost“ ap-

proach introduced in the lathe business in 2006 and

due to be extended to the milling machine business

during the current fi nancial year. In fi nancial terms,

the EMCO Group anticipates further robust organic

growth in revenue and earnings in 2007.


Global Reports LLC

Montanwerke Brixlegg –Central Europe’s leading copper producer

A-TEC Industries AG’s Metal Industry Division works through Montanwerke Brixlegg AG, domiciled in Tyrol, Austria, which joined the Group in mid-2004. The company is Austria’s only copper producer, and has a history stretching back more than 500 years. Today it is one of the leading secondary smelters in Europe. The Metal Industry Division’s core business is recycling copper and other precious metals from scrap. Montanwerke Brixlegg’s total output of highly pure copper is over 100,000 tonnes per year (t/y).

Since 2002 the business has also included the Kovohuty s.a. subsidiary in Krompachy, Slovakia and two mini hydro gene-rating stations near Brixlegg. The Metal Industry Division em-ployed 523 people in 2006.


2006 2005

EUR m EUR m

Revenues 506.1 306.5

EBITDA 48.2 25.9

EBIT 43.2 21.1

EBT 40.2 18.6

Employees 523 501

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Global Reports LLC

2006 business review Montanwerke Brixlegg AG

2006 will go down as a year of superlatives in the

history of the London Metal Exchange. Copper pri-

ces reached levels previously scarcely considered

possible. The rapid price run-up was driven by the

strong growth of the Chinese economy and an un-

expected surge in West European demand. German

copper demand was up by 18.5 % to 1.3 m t. The

copper price spike led to increased liquidity require-

ments at Montanwerke Brixlegg AG, but the extent

to which these were internally generated was highly

satisfactory up to year end.

The company recorded sharp revenue and volume

gains, especially in its core Austrian, French, Ger-

man and Italian markets, despite the major challen-

ges encountered in 2006. Sales to India and Taiwan

also performed well in 2006, and the overall share

of production accounted for by exports was about

80 %. The performance of the Slovakian Kovohuty

subsidiary, which operates the largest secondary

copper smelter in any of the new EU member states,

was extremely positive.

Brixlegg reacted to the strong global increase in

copper demand in good time, and began expanding

electrolysis capacity in 2006. Of total capital expen-

diture of EUR 11m, more than EUR 5m went to ex-

pansion of the electrolysis plant (including the nickel

sulphate unit). The resultant output increases, and

the Division’s reliable internal supply chain and en-

ergy effi cient production methods have laid the basis

for further success. By the time the new electrolysis

plant enters production in the autumn of 2007 the to-

tal cost of the project will amount to about EUR 17m.

The expansion will raise cathode production capaci-

ty from a current 73,000 t/y to about 108,000 t/y.

This will ensure that foundry capacity will be fully uti-

lised by Brixlegg’s own cathodes. Suffi cient orders

have already been won to match the higher capacity

from autumn 2007 onwards.

Good scrap availabilities and the fact that anode pro-

duction was running fl at-out in Krompachy meant

that electrolysis capacity was fully utilised in 2006.

Cathode output in 2006 was 72,567 t (2005:

71,070 t), and 99,992 t of formates were produ-

ced (2005: 80,487). The decision to invest in an

additional anode oven and casting wheel at the Ko-

vohuty plant was another important step forward in

2006. The capacity of the oven, due for commissio-

ning in the spring of 2008, will be roughly the same as

that of the large reverbatory furnace in Brixlegg. This

means that it will be possible to use the expanded

electrolysis capacity entirely for internally produced

anodes. During the year under review rapid progress

was made with all the large-scale investments deci-

ded on at the end of 2005. In addition an application

was made for planning permission for a further mini

hydro plant. This will ensure that the company conti-

nues to be able to generate a large part of its power

despite its increasing energy needs.

Montanwerke Brixlegg recorded a 65.1 % surge

in revenue to EUR 506.1m in 2006 (2005: EUR

306.5m). The gain was chiefl y attributable to the

high price of copper and increased cathode and

formate sales volume. At the same time profi tability

improved still further. EBITDA reached EUR 48.2m

– 86.0 % up year on year (2005: EUR 25.9m).

EBIT also leapt, advancing to EUR 43.2m from EUR

21.1m in 2005, while year-on-year EBT growth was

still more pronounced, with a rise to EUR 40.2m

(2005: EUR 18.6m).

At year end the Metal Industry Division employed a

total of 523 people (2005: 511), of whom 268 were

at the copper smelter in Brixlegg, and the other 255

at the Kovohuty subsidiary. The experience and ex-

pertise of the workforce are a key success factor

for Montanwerke Brixlegg, and the company there-

fore offered employees development opportunities


Global Reports LLC

throughout the year. In addition, apprentices are

trained in a variety of occupations at the Austrian

site, promoting know-how transfers to the next ge-

neration and ensuring that in-house copper recycling

expertise is preserved. The company is constantly

improving its precious metal recovery techniques in

order to ensure that its processes remain internatio-

nally competitive. Montanwerke Brixlegg cooperates

closely with universities in Austria and abroad so as

to remain at the forefront of technological progress.

In spite of the volatility of the world copper market,

demand for copper products is expected to remain

buoyant in 2007. It is diffi cult to forecast price

developments, as the non-ferrous metal markets are

continuing to attract a large amount of speculative

capital. Investors in search of safe strategies due to

consistently high oil prices and the economic boom

in the Far East Copper continue to see copper as

a good second investment. Copper premiums have

risen sharply in 2007. Montanwerke Brixlegg’s tradi-

tional European, American and Far Eastern markets

are again likely to be the main takers for its products.

The prerequisite for continued growth and the main

challenge for 2007 will be obtaining adequate sup-

plies of copper scrap. This is more diffi cult at low

price levels, as holders are then reluctant to release

their inventories. Discounts and processing margins

tend to be lower in such market situations.

Developments in 2006 are good reason to take an

upbeat view of Montanwerke Brixlegg’s future. The

state-of-the-art products (EN ISO 9001:2000 certifi -

cation) bearing the internationally recognised Brixlegg

BXL brand are suitable for a wide variety of appli-

cations in the electrical and electronics, automotive,

construction, machine tool and plant engineering, and

high-tech sectors. The unabated high demand for

Montanwerke Brixlegg products underlines the wis-

dom of this old-established Austrian company’s stra-

tegy of specialising in top-quality copper and precious

metal recycling, rapidly adopting the latest technical

developments, and thereby growing to become one

of Europe’s largest secondary smelters. Montan-

werke Brixlegg is continuing to capitalise on its loca-

tion in the heart of Europe, in the immediate vicinity

of the large manufacturers of semi-fi nished products

in northern Italy and southern Germany, and its role

as an innovator. In March 2007 a wholly owned A-

TEC Industries subsidiary, Minerals & Metall GmbH

signed an agreement to fully acquire Gindre Ducha-

vany S.A., France. The closing of the transaction is

planned for the fi rst half of 2007, once clearance has

been given by the relevant competition authorities. In

2006 Gindre Duchavany, based in Lyon, France had

a head count of 450 and generated revenue of over

EUR 300m. It is one of Europe’s leading manufactu-

rers of semi-fi nished copper products (bars, rods

and shapes) as well as electrical parts and compo -

nents. The acquisition will round out the Metal Indust-

ry Division’s product portfolio; Gindre Duchavany’s

electrical components are a particularly good fi t.


Global Reports LLC

Report of the Supervisory Board

The Management Board of A-TEC Industries AG reported to the Supervisory Board on major business trans-

actions and the state of the Group’s affairs at regular meetings during the 2006 fi nancial year.

The Supervisory Board was thus able to perform the duties incumbent upon it under the Companies Act, and

to satisfy itself as to the orderly management of the Group and preparation of the annual fi nancial statements

and the notes thereto. The annual fi nancial statements were audited by PwC Wirtschaftsprüfung AG, Wirt-

schaftsprüfungs- und Steuerberatungsgesellschaft, Vienna and granted an audit certifi cate. The Supervisory

Board concurs with the auditors’ opinion.

The Supervisory Board hereby approves the annual fi nancial statements of A-TEC Industries AG for the year

ended 31 December 2006, which are thereby adopted in accordance with section 125 (2) Companies Act,

and states its agreement with the Management Board’s proposal for the utilisation of the profi t for the year.

The Supervisory Board has expressed its gratitude to the employees of A-TEC Industries AG for their work

during the year, and its appreciation of their contribution.

Vienna, 26 April 2007

Freimut Dobretsberger

Chairman of the Supervisory Board


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Consolidated annual fi nancial statements 2006as at 31 December 2006

Global Reports LLC

31 December

Assets Note 2006 2005

TEUR TEUR

Non-current assets Property, plant and equipment J.9 271,704 162,418

Intangible assets J.10 255,881 105,281

Available-for-sale fi nancial assets J.11 5,056 4,821

Other non-current assets 20,357 22,424

Deferred tax assets J.21 60,885 29,887

613,883 324,831

Current assets Inventories J.13 217,392 151,276

Trade and other receivables J.2, J.12 402,552 329,126

Other fi nancial assets at fair value through profi t or loss 1,767 0

Available-for-sale fi nancial assets J.11 0 24,057

Derivative fi nancial instruments J.24 963 277

Cash and cash equivalents J.14 310,952 153,528

Sub-total 933,626 658,264Non-current and current assets held for sale J.18 25,980 19,205

959,606 677,469Total assets 1,573,489 1,002,300

The notes are an integral part of these consolidated fi nancial statements.

A. Consolidated balance sheet as at 31 December 2005 and 2006


Global Reports LLC

31 December

Equity and liabilities Note 2006 2005 TEUR TEUR

Equity Share capital J.15.1 6,600 5,000

Capital reserves J.15.2 152,095 6,612

Results recognised directly in equity -1,179 -552

Accumulated profi t 144,417 107,639

Transferred negative minority interests -4,425 -5,841

Attributable to equity holders of the parent company 297,508 112,858Minority interests 17,686 39,659Total equity 315,194 152,517 Non-current liabilities Bond J.19 89,828 81,101

Contributions of silent partners J.19, J.20 900 1,500

Long-term borrowings J.19 177,837 79,223

Non-current employee benefi t obligations J.22 80,898 57,475

Other non-current provisions J.23 63,787 52,629

Other non-current liabilities 0 1,320

Deferred tax liabilities J.21 10,055 6,724

423,305 279,972 Current liabilities Trade payables including customer prepayments J.2 479,083 257,782

Current provisions J.16 6,914 10,496

Other current liabilities J.17 183,919 89,843

Current tax liabilities 9,279 1,519

Short-term borrowings from related parties J.28 0 31,673

Other short-term borrowings J.19, J.20 109,309 139,256

Derivative fi nancial instruments J.24 2,486 764

Sub-total 790,990 531,333Liabilities arising from non-current and current

assets held for sale J.18 44,000 38,478

834,990 569,811Total equity and liabilities 1,573,489 1,002,300



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Year ended 31 December

Erläuterung 2006 2005 TEUR TEUR

Revenue J.1,J.2 1,594,369 1,083,972

Changes in inventories 19,859 14,878

Own work capitalised 12,678 11,594

Other operating income J.4 27,327 23,727

Restructuring income and non-recurring income J.5 10,955 9,922

Cost of material and other production services -1,095,207 -724,721

Staff costs J.3 -286,584 -220,592

Amortisation of intangible assets and depreciation of property, plant and equipment -33,156 -24,346

Other operating expense J.4 -154,703 -113,275

Restructuring expenses and non-recurring expenses J.5 -3,520 -6,116

Profi t from operations 92,018 55,043

Finance income 13,270 10,190

Finance expenses -26,718 -22,280

Finance expenses and income, net J.6 -13,448 -12,090

Profi t before income tax 78,570 42,953

Income tax expense/(income) J.7 8,231 -4,916

Consolidated profi t for the year before loss from discontinued operations 86,801 38,037

Loss from discontinued operations less taxes of TEUR 0 J.18 -7,276 -1,521

Consolidated profi t for the year 79,525 36,516

of which attributable to minority interests 1) -2,339 -3,111of which attributable to equity holders of the parent company 77,186 33,405Earnings per share for profi t from continuing operations attributable to equity holders of the parent company (basic and diluted) in EUR J.26 16.11 7.00Earnings per share for loss from discontinued operations attributable toequity holders of the parent company (basic and diluted) in EUR J.26 -1.08 -0.30Earnings per share for profi t attributable to equity holders of the parent company (basic and diluted) in EUR J.26 15.04 6.70


B. Consolidated income statement for the fi nancial years 2005 and 2006

1) A pro rata profi t allocation of TEUR 353 (prior year: a pro rata loss allocation of TEUR -797) to the minority share-holder in ATB SEVER a.d., Subotica, Serbia, did not take place, as the capital account of the minority shareholder is negative. Future profi t shares will be offset against the negative balance.


Global Reports LLC

C. Consolidated statement of changes in equity for the fi nancial years 2005 and 2006

TEURNote J.15.1 J.15.2

Balance at 31 December 2004 5.000 6.612 -51 74.384 0 85.945 35.479 121.424

Fair value gains/(losses) – available-for-sale fi nancial assets, net of tax TEUR 355 0 0 893 0 0 893 0 893

Currency translation differences 0 0 -1.394 0 560 -834 0 -834

“Result (Subtotal) recognised directly in equity” 0 0 -501 0 560 59 0 59

Profi t for the year 0 0 0 34.203 -798 33.405 3.111 36.516

Subtotal net income 2005 0 0 -501 34.203 -238 33.464 3.111 36.575

Acquisition of ATB SEVER a.d., Subotica, Serbia 0 0 0 0 -6.559 -6.559 0 -6.559

“Acquisition of 10 % minority interests (THIEN Group)” 0 0 0 8 0 8 -8 0

Distribution of dividends to minority interests at subsidiaries 0 0 0 0 0 0 -5.647 -5.647

Capital increase ATB SEVER a.d., Subotica, Serbia 0 0 0 -956 956 0 0 0

Capital increase at EMCO STAR ALLIANCE Holding GmbH 0 0 0 0 0 0 6.724 6.724

Balance at 31 December 2005 5.000 6.612 -552 107.639 -5.841 112.858 39.659 152.517

Fair value gains/(losses) – available-for-sale fi nancial

assets, net of tax TEUR 282 0 0 -845 0 0 -845 0 -845

Currency translation differences 0 0 218 0 -120 98 378 476

“Result (Subtotal) recognised directly in equity” 0 0 -627 0 -120 -747 378 -369

Profi t for the year 0 0 0 76.833 353 77.186 2.339 79.525

Subtotal net income 2006 0 0 -627 76.833 233 76.439 2.717 79.156

Adjustment of opening balance sheet due to the fi nal

purchase price accounting of Austrian Energy & Environment

(Australia) Pty. Ltd., Sydney, Australia 0 0 0 -75 0 -75 0 -75

Capital increase ATB SEVER a.d., Subotica, Serbia 0 0 0 -1.065 1.183 118 -118 0

Acquisition of Lindeteves-Jacoberg Ltd., Singapur 0 0 0 0 0 0 4.654 4.654

Increase of minority interests at

Lindeteves-Jacoberg Ltd., Singapur 0 0 0 -1.977 0 -1.977 4.630 2.653

Distribution of dividends to minority interests at subsidiaries 0 0 0 0 0 0 -724 -724

Capital increases due to going public 1.600 0 0 0 0 1.600 0 1.600

Share premium resulting from initial public offering 0 158.400 0 0 0 158.400 0 158.400

Expenses relating to initial public offering less taxes

amounted to TEUR 2,103 0 -6.309 0 0 0 -6.309 0 -6.309

Acquisition of 75 % EMCO STAR ALLIANCE

Holding GmbH, Vienna 0 0 0 -37.169 0 -37.169 -33.105 -70.274

Disposal of 40 % der Mexpol Werkzeugmaschinen GmbH,

Hilden, Germany 0 0 0 -34 0 -34 34 0

Acquisition of 0.297 % Kovohuty a.s., Krompachy, Slowakia 0 0 0 -350 0 -350 2 -348

First year consolidation A-TEC POWER PLANT SYSTEMS AG,

Vienna 0 0 0 0 0 0 18 18

First year consolidation KPS Beteiligungs GmbH, Vienna 0 0 0 0 0 0 182 182

Release of capital reserves 0 -6.608 0 6.608 0 0 0 0

Acquisition of 4.4 % ATB Austria Antriebstechnik

Aktiengesellschaft, Spielberg 0 0 0 -5.993 0 -5.993 -263 -6.256

Balance at 31 December 2006 6.600 152.095 -1.179 144.417 -4.425 297.508 17.686 315.194

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D. Consolidated cash-fl ow statement for the fi nancial years 2005 and 2006


Note 2006 2005 TEUR TEUR

Cash fl ow from operating activities Cash generated from operations J.27 160,172 -3,936

Interest paid -20,803 -10,680

Income tax paid -4,875 -5,068

Net cash generated from operating activities 134,494 -19,684

Cash fl ow from investing activities

Acquisition of subsidiaries, net of cash acquired H.1 -18,223 -8,969

Infl ow from inclusion of special-purpose entities 9 0

Purchases of intangible assets and property, plant and equipment,

as well as other non-current assets (incl. prepayments) J.9, J.10 -53,379 -26,420

Purchases of unconsolidated companies 0 -554

Purchases of available-for-sale fi nancial assets J.24.1 -4,619 -23,995

Payments in respect of loans extended -2,220 -28,030

Loan repayments received 15,785 2,080

Proceeds from sale of property, plant and equipment 4,983 1,762

Proceeds from sale of available-for-sale fi nancial assets J.24.1 0 10,976

Government grants received 2,966 -10

Interest received 4,613 840

Net cash used in investing activities -50,085 -72,320



Global Reports LLC


Note 2006 2005 TEUR TEUR

Cash fl ows from fi nancing activities Contribution to equity C 1,600 6,724

Share premium from initial public offering less expenses for initial public offering J.15.2 149,988 0

Issue of bonds less disagio (maturity premium) J.19.4 16,740 98,407

Other borrowing costs J.19.4 -250 -457

Change in restricted cash J.14 3,502 0

Partial prepayment of bond J.19 -7,722 -17,631

Proceeds from borrowings J.19 65,070 41,233

Repayments of borrowings J.19 -119,939 -10,032

Decrease in fi nance lease obligations J.19 0 -3,259

Repayments of borrowings silent partnerships J.20 -3,260 -715

Dividends paid to minority interest -724 0

Acquisitions of minority interests J.29 -33,590 -5,648

Derivative fi nancial instruments J.24 -147 923

Cash fl ows from fi nancing activities – net 71,268 109,545

0 0

Cash and cash equivalents at beginning of period 120,083 72,322

Change in restricted cash and cash equivalents J.14 -50,113 30,173

Net increase in cash and cash equivalents 155,677 17,541

Effects from changes in exchange rates on cash and cash equivalents G.18 -1,755 47

Cash and cash equivalents at end of period J.14 223,892 120,083Restricted cash and cash equivalents

at the end of period J.14 87,060 33,445

Total cash and cash equivalents at end of period J.14 310,952 153,528



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E. The Group

A-TEC INDUSTRIES AG, Vienna (hereinafter refer-

red to as “A-TEC” or “Company“ or “Group”) domi-

ciled in Austria, 1010 Vienna, Wächtergasse 1/3/1

has been registered in the commercial register at

the Commercial Court Vienna since 28 Novem-

ber 2001 under the commercial register number

FN 216262 h.

By registration in the commercial register dated

2 March 2004 ATB Beteiligungs GmbH operates

under the name of A-TEC Industries GmbH and was

transformed into a public limited company (“Aktienge-

sellschaft”) by registration dated 15 October 2004.

On 1 December 2006 a capital increase due to initial

public offering from TEUR 5,000 by TEUR 1,600 to

TEUR 6,600 was carried out. The share capital is

made up of 6,600,000 ordinary shares.

The company is listed on the Vienna Stock Ex-

change.

A-TEC is a registered public limited company (“Ak-

tiengesellschaft”) and operates worldwide in more

than 21 countries in the business areas metal indus-

try, drive technologies, plant construction and me-

chanical engineering.

The main activities of the Group include the business

activities of the four subgroups:

Drive Technologies Division – ATB Austria An-

triebstechnik AG – subgroup (“ATB-Group”)

• Production of electrical drive systems for industrial

applications and appliances

• Distribution of industrial engines, device engines

for house and garden appliance and fl ame-proof

motors

Mechanical Engineering Division – EMCO STAR

ALLIANCE Holding GmbH (now A-TEC Mecha-

nical Engineering Holding GmbH) – subgroup

(“EMCO-Group”)

• Design, development, production, testing and dis-

tribution of technical goods, technical, electrical

and computer-aided machines and appliances as

well of components thereof

Metal Industry Division – Montanwerke Brixlegg

AG – subgroup (“Montanwerke-Group”)

• Production of copper as well as raw materials and

supplies, plastics and compounds

• Mining, the operation of plants, chemical plants,

electrochemical plants, foundries, rolling mill and

pressing shops, reprocessing plants, forging,

bars-, bar-, profi le-, pipe- and wire forming plants

• Treatment and processing, distribution and tra-

ding of chemical and metallurgic prod-ucts, of raw

materials and supplies of precious metal, metals,

steal and iron

The Plant Construction Division – Austrian Energy

& Environment AG – subgroup (“AE&E-Group”)

• Probing, developing and utilising technologies,

particularly in the area of energy and environmen-

tal technology

• Sale, design, construction and commissioning

of plants, in particular energy and environmental

plants, involving also builder and general contrac-

tor activities

• Plant, steel, iron, boiler, device and machine

construction, refi nement, operation of iron, steel

and metal foundries

• Collection, utilisation, disposal of communal and

industrial waste of all kinds as well as the restora-

tion of contaminated sites

• Trade in and procurement of commercial transac-

tions in goods of all kinds, especially energy and

environmental plants

• Provision of consulting and other commercial ser-

vices, as for instance automation, management,

maintenance and repair of plants, personnel lea-

sing and services in automatic data processing

and information technology

• Performing commercial activities of all kinds, as

in particular the builder, electrical installation, gas

and water installation, as well as the hotel and re-

staurant business.


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F. Restructuring within A-TEC-Group

1. Restructuring during the fi nancial year 2005

1.1. Restructuring within A-TEC

Effective 14 September 2005, capital increase of

EMCO STAR ALLIANCE Holding GmbH (from now

A-TEC Mechanical Engineering Holding GmbH) to

EUR 9,000,000.00 was carried out and approved by

the general meeting; the share of increase of A-TEC

INDUSTRIES AG amounts to EUR 2,241,250.00.

In 2005 two companies were founded, with an in-

vestment of 100 % of:

• Effective 19 January 2005, establishment of a

subsidiary PS Aircraft Handels GmbH (from now:

PK Aircraft Handels GmbH), Vienna, with a share

capital of EUR 35,000.00

• With contract of 5 April 2005 Kronen sechshun-

dertneunzehn GmbH (from now: A-TEC Betei-

ligungs GmbH), Düsseldorf, was founded with a

share capital of EUR 25,000.00

By purchase agreement dated 16 February 2005,

90 % of i.Dream Media Services GmbH, Vienna, for

EUR 17,500.00, and with purchase agreement of

29 March 2005 the Commodities West Rohstoff-

handel GmbH, Vienna, for EUR 1.00 were acquired.

With purchase agreement of 18 September 2006,

the Commodities West Rohstoffhandel GmbH, Vien-

na, was sold to Montanwerke Brixlegg Aktiengesell-

schaft, Brixlegg, for EUR 1.00.

1.2. Restructuring within ATB-Group

By contracts of assignment dated 25 February 2005,

effective as of 31 December 2003, the remaining 10 %

of the shares in “THIEN” E-Motoren GmbH, Rank-

weil, (from now ATB Technologies GmbH, Lustenau),

the remaining 10 % of the shares in “THIEN” Elektro-

maschinenbau GmbH, Rankweil, and the remaining

10 % of the shares in “THIEN” Elektromaschinenbau

GmbH & Co KG, Rankweil, were acquired.

By contract of assignment dated 18 March 2005,

10 % of the shares in “THIEN” Electronic GmbH,

Hohenems, were acquired.

With merger agreement of 4 May 2005, “THIEN” Elec-

tronic GmbH, Hohenems, effective as of 31 December

2004 , was merged into “THIEN” E-Motoren GmbH,

Rankweil. The “THIEN” E-Motoren GmbH, Rankweil,

was renamed into ATB Technologies GmbH. Further-

more the company was relocated from Rankweil to

Lustenau, effective as of 16. December 2005.

Effective 9 March 2005 ATB Motors (Shanghai) Co.

Ltd., Shanghai, China, was established (investment

100 %).

By entry in the commercial register dated 14 April 2005

ATB Bastro s.r.o., Ostrava-Radvanice, Czech Republic,

was renamed into ATB COMPONENTS s.r.o.

Effective 15 June 2005, Morley Electric Motors Ltd.,

Leeds, Great Britain, was renamed into ATB MOR-

LEY LIMITED.

Effective 30 June 2005 SEVER Holding Internati-

onal a.d., Subotica, Serbia, was renamed into ATB

SEVER a.d..

ATB Austria Antriebstechnik Aktiengesellschaft,

Spielberg, entered into an agreement with Lindete-

ves-Jacoberg Ltd., Singapore, on 27 August 2005

contingent upon occurrence of certain events to take

over 30 % minus one share in the company in the

course of a capital increase.

ATB Schweiz AG, Lenzburg, Switzerland, was esta-

blished (share 99.2 %) as of 23 November 2005.

Effective 31 December 2005, a capital increase of

5.19 % in ATB SEVER a.d., Subotica, Serbia, was

carried out.

1.3. Restructuring within AE&E-Group

In 2005, subsequent acquisition costs amounting to

TEUR 402 for AE&E Chennai Works Ltd., India, and

TEUR 12 for International Development & Enginee-

ring Associates (I.D.E.A) Ltd. were paid.

Between ALSTOM Power Conversion GmbH, Berlin,

Germany (vendor), of Von Roll Inova GmbH, Zürich,

Switzerland (purchaser) and Austrian Energy & En-

vironment AG (surety) an “Asset Sale Agreement”,

effective as of 24 October 2005, was signed. Based

on this agreement the business of Austrian Energy

& Environment (Australia) Pty. Ltd., Sydney, Austra-

lia, was acquired as of 1 December 2005 (see Note

J.29.3.2).


Global Reports LLC

There were no further restructuring activities within

the AE&E-Group in the fi nancial year 2005.

1.4. Restructuring within EMCO-Group

In 2005, the EMCO-Group has established EMCO

FAMUP S.r.l., San Quirino, Italy, and EMCO MECOF

S.r.l., Belforte, Italy.

A purchase and leasing agreement was signed with

EMCO Mecof S.p.a. in liquidation in concordato

preventivo, Belforte, Italy (the liquidator). Based on

this agreement the appliances and staff of the ac-

quired company were utilized with a compensation in

form of a current lease. Furthermore EMCO-Group

had to overtake the appliances and the business by

31 December 2006.


the EMCO-Group in the fi nancial year 2005.

1.5. Restructuring within Montanwerke-Group

There were no restructuring activities within the Mon-

tanwerke-Group in the fi nancial year 2005.

2. Restructuring during the fi nancial year 2006

2.1. Restructuring within A-TEC

In 2006, 75 % of EMCO STAR ALLIANCE Holding

GmbH (now A-TEC Mechanical Engineering Holding

GmbH) was acquired at a purchase price of EUR

70,274,507.

In 2006, a company was established with an invest-

ment of A-TEC INDUSTRIES AG of 93.1 %:

• Effective 4 August 2006, establishment of A-TEC

POWER PLANT SYSTEMS AG, Vienna, with a

share capital of TEUR 235

Furthermore in 2006, Austrian Energy & Environ-

ment AG was transformed into Austrian Energy &

Environment AG & Co KG, Raaba. The investment

of A-TEC INDUSTRIES AG of the share capital

represents the 100-%-capital contribution of the li-

mited partner. The acquired EVEREST Holding AG

(now Austrian Energy & Environment AG, Vienna)

overtook the general partner capital amounting to

EUR 0.

2.2. Restructuring within ATB-Group

Lindeteves-Jacoberg Limited (LJ)

The company carried out a phased acquisition of Lin-

deteves-Jacoberg Ltd., a Singapore Stock Exchange

listed company. On 27 August 2005 a loan contract

was signed and afterwards an additional agreement

was arranged as of 21 December 2005. Based on

this contract the company granted a convertible loan

amounting to TEUR 12,267. This agreement en-

abled to participate in a conditional capital increase

by purchasing 148,781,725 shares through con-

version of the loan. (29.99 % of outstanding shares

after capital increase). In February 2006 the conver-

sion of the loan into 29.99 % Lindeteves-Jacoberg-

Group shares was carried out.

As the company wanted to be able to achieve

majority at Lindeteves-Jacoberg Ltd., Singapore,

a “Call Option“ in form of a “Subscription Agree-

ment” was signed. The “Call Option” issued by the

investor group G 15 Investment Holding Pte Ltd.,

Singapore, at the time of the successful completi-

on of the capital increase entitled the company to

an additional 75,058,499 shares which equaled an

investment of 15.14 % after capital increase. The

exercise price based on the call option amounted to

SGD 0.1658 per share and SGD 0.2, respectively.

This call option had been limited to 3 months after

completion of the subscription of the shares from

the conversion of the loan. The call option has been

exercised in March 2006 and has led to an incre-

ase in the Lindeteves-Jacoberg group investment

to 45.12 %. Based on the investment over 30 %

in Lindeteves-Jacobberg group by ATB-Group a

F. Restructuring within A-TEC-Group


Global Reports LLC

public takeover bid had to be offered due to the

Singapore Stock Exchange regulations (between

March and May 2006). This led to an increase in

the investment to 51 %.

Another capital increase to 58.97 % was carried out

in November 2006.

Furthermore there was a capital increase of TEUR

700 at Brook Crompton Electromotors (Dalian) Ltd.,

Dalian, China within the LTJ-Group.

A-TEC Immobilienvermietung GmbH

A-TEC Immobilienvermietung GmbH, Vienna, was

established to run the leasing activities for the

Group. The company has signed leasing agree-

ments of an offi ce building at a book value of TEUR

8,898 and land at a book value of TEUR 1,213.

Land and building is used by ATB Technologies

GmbH, Lustenau and therefore lease payments are

charged to A-TEC Immobilienvermietung GmbH,

Vienna.

ATB SEVER a.d.

In 2006 a capital increase at ATB SEVER a.d., Sub-

otica, Serbia, of 2.15 % was carried out. The invest-

ment in ATB SEVER a.d. amounts to 70.46 % in

total as at 31 December 2006.

ATB SELNI SAS

A capital increase from EUR 1.7 million to EUR

4.2 million at ATB SELNI SAS, Nevers, France,

effective 21 December 2006 was carried out and

approved by the general meeting in 2006. A capi-

tal reduction to TEUR 160 to offset the cumulative

losses was carried out. The reduction of share capi-

tal was effective by a reduction of the nominal value

per share from EUR 16 to EUR 0.61. By the end of

December 2006 a capital increase of EUR 1 million

was carried out. Thereof EUR 0.7 million will be paid

in 2007. The capital increase was eliminated during

the consolidation.

2.3. Restructuring within AE&E-Group

The business of Czech Republic and Germany was

acquired based on the contract (F.1.3.) between AL-

STOM Power Conversion GmbH, Berlin, Germany

(vendor), Von Roll Inova GmbH, Zürich, Switzerland

(purchaser) and Austrian Energy & Environment AG

(surety).

Austrian Energy & Environment AG was transformed

into Austrian Energy AG NfG AG & Co KG effective

28 September 2006 as part of a restructuring within

the AE&E-Group with registration in the commercial

register as of 12 December 2006.


the AE&E-Group in the fi nancial year 2006.

2.4. Restructuring within EMCO-Group

The company acquired EMCO MECOF S.r.l., Belfor-

te, Italy, in December 2006.


the EMCO-Group in the fi nancial year 2006.

2.5. Restructuring within Montanwerke-Group

The company purchased the remaining 0.297 % of

Kovohuty a.s., Krompachy, Slowakia for TEUR 350

in 2006.


the Montanwerke-Group in the fi nancial year 2006.


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1. General information

The consolidated fi nancial statements for the year

2006 have been prepared in accordance with Inter-

national Financial Reporting Standards (“IFRS/IAS”),

as adopted by the EU and according to § 245a

Austrian Gaap. They give a true and fair view of the

company’s assets, liabilities, its fi nancial position

and results of operations. The consolidated fi nancial

statements have been drawn up under the historical

cost convention, with the exception of available-for-

sale fi nancial assets and derivative fi nancial instru-

ments, which were measured at fair value (cf. Note

G.13, G.14) at the balance sheet date.

The consolidated fi nancial statements of A-TEC are

presented in euros, which also refl ects the primary

economic environment in which the Group operates.

All fi gures are presented in euro thousands (TEUR).

These consolidated fi nancial statements were autho-

rised for issue by the supervisory board on 20 April

2007.

The acquisitions of companies in the fi nancial years

2005 and 2006 resulted in only limited comparability

of the consolidated income statement, the conso-

lidated balance sheet, the consolidated statement

of changes in equity and the consolidated cash fl ow

statement (cf. Note J.29).

2. New Accounting Standards

The International Accounting Standards Board (IASB)

issued a series of amendments to existing standards

and published new standards and interpretations

which have been mandatory since 1 January 2006.

These new regulations are also applicable in the EU

and relate to the following areas:

• IAS 19 (Amendment), Employee Benefi ts, Actu-

arial Gains and Losses, Group Plans and Disclo-

sures

• IAS 21 (Amendment), Net Investment in a Foreign

Operation

• IAS 39 (Amendment), Cash Flow Hedge Accou-

ting of Forecast Intragroup Transactions

• IAS 39 (Amendment), The Fair Value Option IAS

39 Section 9 (b)

• IAS 39 and IFRS 4 (Amendment), Financial Gua-

rantee Contracts

• IFRS 6, Exploration for and Evaluation of Mineral

Resources

• IFRS 1 (Amendment), First-time Adoption of Inter-

national Financial Reporting Standards and IFRS

6 (Amendment), Exploration for and Evaluation of

Mineral Resources

• IFRIC 4, Determining whether an Arrangement

contains a Lease; and

• IFRIC 5, Rights to Interests arising from Decom-

missioning, Restoration an Environmental Rehabi-

litation Funds

• IFRIC 6, Liabilities arising from Participating in a

Specifi c Market – Waste Electrical and Electronic

Equipment

• IFRIC 7, Applying the Restatement Approach un-

der IAS 29, Financial Reporting in Hyperinfl ationa-

ry Economies (effective from 1 March 2006)

• IFRIC 8, Scope of IFRS 2 (effective for annual pe-

riods beginning on or after 1 May 2006)

• IFRIC 9, Reassessment of Embedded Derivatives

(effective for annual periods beginning on or after

1 June 2006)

2.1. First adoption of new Accounting Standards

From the Standards mentioned above the regulati-

ons to IFRIC 4 were fi rst adopted in 2006.

The fi rst time adoption of this regulation has no ma-

terial impact on the true and fair view of the consoli-

dated fi nancial statements.

G. Summary of signifi cant accounting and measurement principles


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2.2. New fi nancial

reporting standards not yet adopted

The IASB issued further standards and amendments

to standards and interpretations, which are not yet

mandatory in the fi nancial year 2006. The following

standards had been endorsed by the EU and publis-

hed in the offi cial journal by the time these consolida-

ted fi nancial statements were prepared.

Amendment to IAS 1 disclosure to equity (effective

as of 1 January 2007): The amendment to IAS 1

introduces disclosures about the level of an entity’s

capital and how it manages capital.

IFRS 7 fi nancial instruments (effective as of 1 Ja-

nuary 2007): IFRS 7 introduces new disclosures to

improve the information about fi nancial instruments.

It requires the disclosure of qualitative and quan-

titative information about exposure to risks arising

from fi nancial instruments, including specifi ed mini-

mum disclosures about credit risk, liquidity risk and

market risk and also including sensitivity analysis

to market risk. It replaces IAS 30, Disclosures in

the Financial Statements of Banks and Similar Fi-

nancial Institutions, and disclosure requirements in

IAS 32, Financial Instruments: Disclosure and Pre-

sentation.

The effect of this standard can not yet be assessed

reliable.

The IASB has issued additional fi nancial reporting

regulations, which, however, at the time the conso-

lidated fi nancial statements were prepared, had not

yet been endorsed by the EU:

• IFRIC 10, Interim Financial Reporting and Impair-

ment (effective beginning on and from 1 Novem-

ber 2006)

• IFRIC 11, IFRS 2 Group and Treasury Share

Transactions (effective beginning on and from 1

March 2007)

• IFRIC 12, Service Concession Arrangements (ef-

fective beginning on and from 1 January 2008)

• IFRS 8, Operating Segments (effective beginning

on and from 1 January 2009)

• Amendment to IAS 23 borrowing costs (effective

as of 1 January 2009): Option to expense borro-

wing costs when incurred is no longer available.

The fi rst adoption of these regulations is not expected

to have any impact on the company’s accounts. The

impact of IAS 23 cannot be reliably estimated.

3. Consolidated group

The consolidated fi nancial statements include 15

(2005: 11) domestic and 61 (2005: 39) foreign

subsidiaries, in which A-TEC directly or indirectly has

the majority of voting rights or the power to govern

the fi nancial and operating policies. Special purpose

entities (“SPE”), irrespective of their legal form, are

included in the consolidated fi nancial statements, if

the company has the power to govern their fi nancial

and operating policies. Subsidiaries are fully conso-

lidated from the date on which control is transferred

to the parent company. They are deconsolidated

from the date that control ceases. The purchase

method of accounting is used to account for the ac-

quisition of subsidiaries by the Group. The cost of an

acquisition is measured as the fair value of the as-

sets given, equity instruments issued and liabilities

incurred or assumed at the date of exchange, plus

costs directly attributable to the acquisition.

Identifi able assets acquired and liabilities and con-

tingent liabilities assumed in a business combination

are measured initially at their fair values at the acqui-

sition date, irrespective of the extent of any minority

interest.

The excess of the cost of acquisition over the fair

value of the Group’s share of the identifi able net as-

sets acquired is recorded as goodwill. If the cost of

acquisition is less than the fair value of the net assets

of the subsidiaries acquired, the difference is imme-

diately recognised in the income statement.

All inter-company transactions, balances and unre-

alised gains on transactions between group compa-

nies are eliminated. Unrealised losses from trans-

actions between group companies are eliminated,

unless such losses cannot be covered. Accounting

and measurement principles at subsidiaries were

adjusted, where necessary, in order to ensure com-


Global Reports LLC

pliance with the accounting and measurement prin-

ciples of the parent company. Companies that are

set up for achieving an exactly defi ned purpose are

designated as special purpose entities in accordance

with SIC 12. A special purpose entity has to be in-

cluded in the consolidated fi nancial statements, if

the economic approach between the special purpose

entity and the company shows that the special pur-

pose entity is controlled by the company.

Entities under common control are accounted for

using the predecessor accounting method. Pursuant

to this method assets and liabilities are recognised

at the amounts at which they have been carried up

to now. Any differences to purchase prices paid are

taken through equity, with no effect on net income.

Investments in associates are accounted for using

the equity method, when the company has signifi -

cant infl uence but not control. Under the equity me-

thod only the carrying amounts of the investments

and the receivables from/payables due to associates

are recognised in the consolidated balance sheet. In

the consolidated income statement the proportionate

profi t/loss for the year of the associates is taken

over; in the consolidated cash fl ow statement only

dividends, loans and other funds received from or

paid to associates are stated. Losses are recognised

only up to the carrying amount of the investment,

unless additional obligations have been entered into

for the associate.

Unrealised gains on transactions between group

companies and associates are eliminated according

to the Group’s share in the associate. Unrealised

losses are also eliminated, unless the transaction in-

dicates an impairment of the asset transferred. The

accounting and measurement principles of associ-

ates were changed, where necessary, to ensure uni-

form accounting within the Group. A list of subsidia-

ries included in the consolidated fi nancial statements

is presented in Appendix 2.

4. Segment information

A business segment is a group of assets and ope-

rations engaged in providing products or services

that are subject to risks and returns that are different

from those of other business segments. A geogra-

phical segment is engaged in providing products or

services within a particular economic environment

that are subject to risks and returns that are different

from those of segments operating in other economic

environments.

The Group’s overall business activities can be subdi-

vided into four main areas (plant construction, drive

technologies, mechanical engineering and metal in-

dustry), which form the basis for the primary seg-

ment reporting (cf. Note E).

No major transactions within the Group are carried

out. The parent company charges costs relating to

group activities to the affi liates.

Financial information according to main business

activities and geographical regions is presented in

section J.

5. Foreign currency translation

The consolidated fi nancial statements of A-TEC are

presented in euros, which also refl ects the primary

economic environment in which the Group operates.

All fi gures are presented in euro thousands (TEUR).

The fi nancial statements of the subsidiaries that have

functional currencies other than the euro are trans-

lated using the functional currency principle. Items

in the balance sheet are translated at the exchange

rate prevailing at the balance sheet date. Items of the

income statement are translated at the weighted an-

nual average exchange rate. Equity items are trans-

lated at historical exchange rates prevailing on the

date of the transactions. Any translation differences

arising are recognised in equity, with no effect on

net income.

Goodwill arising on the acquisition of foreign entities

is stated in the currency of the respective subsidiary.

The translation is made at the prevailing period-end

exchange rate. Unrealised translation differences

arising from exchange rate fl uctuations between the

entry of the transaction and the balance sheet date

are taken through profi t or loss and recognised in

other operating income or expenses.



Global Reports LLC

The following table presents the foreign exchange rates of those currencies, in which the company primarily

performs its business activities:

Exchange rates at 31 December Average exchange rates

2006 2005 2006 2005

Norwegian crown (NOK) 8,2380 8,0310 8,0300 8,0350

Croatia kuna (HRK) 7,3500 7,4100 7,3208 7,4083

Czech crown (CZK) 27,4900 28,9300 28,3500 29,9025

Japanese yen (JPY) 156,9300 139,4600 145,5392 136,4208

Slovak crown (SKK) 34,4400 37,9600 37,2950 38,6158

Swiss franc (CHF) 1,6069 1,5535 1,5733 1,5482

US dollar (USD) 1,3170 1,1983 1,2512 1,2497

Swedish crown (SEK) 9,0400 9,3820 9,2820 9,2643

Singapore dollar (SGD) 2,0200 1,9920 1,9915 2,0753

British pound (GBP) 0,6715 0,6785 0,6830 0,6832

Australian dollar (AUD) 1,6691 1,6200 1,6634 1,6125

Polish zloty (PLN) 3,8310 3,8420 3,9044 4,0373

Servian dinar (CSD) 79,0000 85,9400 81,4547 83,3100

6. Property, plant and equipment

Land and buildings mainly include factories and of-

fi ce buildings and are stated at cost at the transaction

date. Buildings are depreciated over their estimated

useful life. No depreciation of land.

All other property, plant and equipment subsequently

acquired or produced is measured at historical cost

less accumulated depreciation.

Acquisition and production costs include certain ex-

penses incurred in the course of construction or use

of the assets, as for instance costs for material and

staff costs, directly attributable overheads and the

present value of obligations from the closure and re-

construction of assets. Value added tax charged by

suppliers and deductible as input tax is not included in

acquisition and production costs. Borrowing costs are

not recognised in acquisition and production costs.

The remaining book value and useful lives of property,

plant and equipment are remeasured every year. Main-

tenance costs are expensed as incurred, replacement

and value-adding investments are capitalized.

Depreciation is charged on a straight-line basis, with

acquisition costs being depreciated to a residual va-

lue over the following estimated useful lives of the

assets:

years

Land rights and buildings,

Buildings on leasehold land 20 – 67

Technical equipment

and machinery 3 – 33

Other equipment, factory

and offi ce equipment 2 – 20

If the carrying amount of an asset exceeds its re-

coverable amount (impairment), a corresponding im-

pairment is charged.

When an asset is retired, its acquisition costs and

accumulated depreciation is shown as a disposal,

and the difference between the net realisable value

and the net carrying amount is taken through profi t

or loss and recognised in profi t from operations.


Global Reports LLC

7. Goodwill and other intangible assets

Goodwill represents the excess of the cost of an ac-

quisition over the fair value of the Company’s share

of the identifi able net assets of the acquired subsi-

diary at the date of acquisition. Gains and losses on

the disposal of an entity include the carrying amount

of goodwill relating to the entity sold.

Goodwill is shown in other intangible assets in the

balance sheet.

Other intangible assets comprise of trademarks with

an indefi nite useful life which are carried at cost less

accumulated impairment losses, development costs

(see Note G.9) as well as other intangible assets

(see Note G.10).

Goodwill and other intangible assets with indefi nite

useful lives are not subject to amortisation, but in

accordance with IFRS 3 (“Business Combinations”)

and IAS 38 (“Intangible Assets”) are tested for im-

pairment at least annually. They are reviewed for

impairment whenever events or changes in circum-

stances indicate that the carrying amount may not

be recoverable. Intangible assets with defi nite useful

lives are amortised over their useful lives to the resi-

dual value, with impairment tests carried out whene-

ver events or changes in circumstances indicate that

the carrying amount may not be recoverable.

The acquisition costs are compared to their reco-

verable amounts when performing an impairment

test. Impairment tests can be carried out at any time

during the fi nancial year, provided that the test is

performed at the same time each year. Impairment

tests for different group of intangible assets can be

carried out at different points in time. Intangible as-

sets acquired during the fi nancial year have to be

tested for impairment prior to the balance sheet

date.

In order to be able to perform an impairment test,

goodwill acquired on business combinations has to

be allocated starting from the date of takeover to

those cashgenerating units or groups of units, from

which cash is generated and which benefi t from the

synergies of the business combination. The alloca-

tion is performed irrespective of whether other as-

sets or liabilities have been allocated to these cash-

generating units. Each cash-generating unit or group

of units, to which goodwill has been allocated, has

to (a) represent the lowest level within the company,

to which goodwill is allocated for internal manage-

ment purposes for review and must (b) not be larger

than a segment that is based either on the primary

or secondary reporting format of the company. Cash-

generating units which disclose goodwill and from

which cash fl ows are expected have to be tested for

impairment annually. In addition, an impairment test

has to be carried out whenever events or changes in

circumstances indicate that the carrying amount may

not be recoverable. The impairment test is performed

by comparing the carrying amount of the cash-gene-

rating unit including the allocated goodwill with the

recoverable amount of this unit. If the recoverable

amount exceeds the carrying amount, an impairment

need does not exist for the respective cash-genera-

ting unit or the goodwill allocated to it. If the reco-

verable amount of the cash-generating unit is less

than the carrying amount, an impairment loss has to

be recognised for this unit. The impairment is initially

allocated to the goodwill of the cash-generating unit.

The exceeding amount is allocated to other assets of

cash-generating units and is spread between them

according to their carrying amounts. Decreases in

carrying amounts represent impairment expenses for

the individual assets.

Goodwill and intangible assets with an indefi nite use-

ful life are tested for impairment every year in the

fourth quarter.

In each reporting period the company has to review

the classifi cation of intangible assets with indefi nite

or defi nite useful lives.

Intangible assets with defi nite useful lives are reco-

gnised at acquisition costs less accumulated amorti-

sation. Intangible assets are amortised on a straight-

line basis over the shorter of the contract term or

estimated useful life.



Global Reports LLC

Systematic amortisation is based on the following

useful lives:

years

Product rights and licenses 3 –15

Other intangible assets 3 –15

Product development costs 3 –10

The amortisation charge of intangible assets sub-

ject to amortisation is included in the consolidated

income statement.

8. Negative Goodwill

In accordance with IFRS 3, negative goodwill ex-

ceeding non-monetary assets is recognised as a se-

parate item in the income statement at the date of

transaction for acquisitions of entities.

9. Research and Development

Research costs are recognised as an expense. Cost

incurred in development projects (attributable to the

design and testing of new or improved products) are

capitalised as intangible assets, when it is likely that

the assets can be identifi ed, be used by the compa-

ny, the project will be successful with regard to its

future economic usability, the technical feasibility is

given and costs can be measured reliably. Other de-

velopment costs are recognised as an expense.

Development costs previously recognised as an ex-

pense are not capitalised as an asset in subsequent

periods. Development costs with future benefi t will

be capitalised and amortised systematically over the

estimated useful life (up to a maximum of 15 years)

once the product is being manufactured.

Expenses related to the development or installation

of software (implementation of SAP R/3) are capi-

talised as incurred and amortised over a period of

12 years, since the conditions for a capitalisation of

development costs are met.

Development costs according IAS 36 (revised) are

tested annually for impairment (see Note G.11.) until

the beginning of their usage.

10. Other intangible assets

Purchased production rights and licenses are capi-

talised upon acquisition and amortised systematically

over a period of 8 to 15 years. The amortisation of

intangible assets subject to amortisation is included in

the consolidated income statement under “amortisa-

tion of intangible assets and depreciation of property,

plant and equipment”. The acquired trademarks have

indefi nited useful life due to its good reputation on the

market and are tested annually for impairment accor-

ding to IAS 36 (revised). In addition to the annual im-

pairment test an impairment test is carried out when

there is a need for impairment (see Note G.7).

11. Impairment of non-current assets

Property, plant and equipment and intangible assets

with a defi nite useful life are tested for impairment

whenever events or changes in circumstances indi-

cate that the carrying amount of an asset exceeds

its recoverable amount. All property, plant and equip-

ment and intangible assets are subject to impairment

testing, irrespective of whether or not they are held

for sale. In accordance with the provisions of IAS 36

an impairment charge is recognised for the amount

by which the asset’s carrying amount exceeds its fair

value less costs to sell or its value in use. The value

in use corresponds to the estimated discounted fu-

ture net cash fl ows expected from the continued use

of an asset and its retirement at the end of the use-

ful life. The impairment charge is recognised under

“other operating expenses“.

The company has to annually review its decision re-

lated to the classifi cation of intangible assets as such

with an indefi nite useful life. If the review shows that

an asset originally considered indefi nite now has a

defi nite useful life, it has to be impaired to the lo-

wer of its recoverable amount or carrying amount

and depreciated systematically over its estimated

remaining useful life. Impairment testing is carried

out by comparing the recoverable amount and the

carrying amount of an intangible asset. The amount

exceeding the recoverable amount is recognised as

an impairment charge.


Global Reports LLC


If there is an indication that the asset is no longer im-

paired, the company has to reverse the impairment

entirely or in part.

12. Current and non-current assets as well as related liabilities held for sale

In accordance with IFRS 5 (“Non-current Assets

held for Sale and Discontinued Operations“) current

and non-current assets held for sale are stated at the

lower of carrying amount or fair value less costs to

sell. Assets classifi ed as held for sale are no longer

depreciated and recognised as a separate item in the

balance sheet.

13. Available-for-sale fi nancial assets, other fi nancial assets at fair value through profi t or loss and held-to maturity fi nancial assets (marketable securities)

Since 1 January 2002, the Company classifi es its

fi nancial assets in the following categories: fi nancial

assets at fair value through profi t or loss, held-to ma-

turity fi nancial assets, and available-for-sale fi nancial

assets. Management determines the classifi cation of

its fi nancial assets at initial recognition and re-evalu-

ates this designation at every reporting date.

Available-for-sale fi nancial assets are non-deriva-

tives that are either designated in this category or

not classifi ed in any of the other categories. They are

included in non-current assets unless management

intends to dispose these fi nancial assets within 12

months of the balance sheet date.

Based on the classifi cation “held-to-maturity fi nancial

assets” are carried at amortized costs less perma-

nent impairment made, “fi nancial assets at fair value

through profi t or loss” and “available-for-sale fi nancial

assets” at their fair value. Financial assets at fair va-

lue through profi t or loss are carried at fair value at

the balance sheet date, unrealized gains and losses

are taken through profi t and loss. Available-for-sale

fi nancial assets are carried at fair value at the balan-

ce sheet date, unrealized gains and losses, net of

deferred taxes, are recognized in equity, with no ef-

fect on net income. Prior-year fi gures were adjusted

accordingly, as changes in fair-values have previously

been taken through profi t or loss.

Impairment testing of securities is a two-step proce-

dure. In the fi rst step the company has to compare

the fair value with the carrying amount and determine

whether a signifi cant difference exists between the

two. In the second step it is determined over what

period of time the difference exists. Impairment

losses are taken through profi t or loss in the repor-

ting period as other expenses in the fi nancial result

and determined separately for each security.

All purchases and sales of securities are recognized

at the transaction date – the date on which the group

commits to purchase or to sell the asset. The costs

of acquisition also include transaction costs. In case

of fi nancial assets at fair value through profi t or loss

the transaction costs are expenses when incurred.

14. Financial liabilities

Borrowings are recognized initially at fair value, net

of transaction costs incurred. Borrowings are sub-

sequently stated at amortized cost; any difference

between the proceeds (net of transaction costs) and

the redemption value is recognized in the income

statement over the period of the borrowings using

the effective interest method.

Borrowings are classifi ed as current liabilities unless

the Company has an unconditional right and the

expectation to defer settlement of the liability for at

least 12 months after the balance sheet date.

15. Inventories

Inventories are stated at the lower of cost and net

realisable value at the balance sheet date. Cost is

determined using the moving average cost method.

Net realisable value is the estimated selling price in

the ordinary course of business, less applicable vari-

able selling expenses.

The cost of work in progress and fi nished goods

comprises direct material, direct labour, other direct

costs and related production overheads (based on

normal operating capacity). It excludes borrowing

costs.

Services not yet invoiced were generally carried at

cost.


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16. Trade receivables

Trade receivables are recognized initially at fair value

and subsequently measured at amortized cost using

the effective interest method, less any provision for

impairment. A provision for impairment of trade re-

ceivables is established when there is objective evi-

dence that the Company will not be able to collect all

amounts due according to the original terms of recei-

vables. Signifi cant fi nancial diffi culties of the debtor,

probability that the debtor will enter bankruptcy or

fi nancial reorganization, and default or delinquency

in payments are considered indicators that the trade

receivable is impaired. The amount of the provision is

the difference between the asset’s carrying amount

and the present value of estimated future cash fl ows,

discounted at the effective interest rate. The amount

of the loss is recognized in the income statement

within “other operating expenses”. When a trade re-

ceivable is uncollectible, it is written off against the

provision account for trade receivables. Subsequent

recoveries of amounts previously written off are cre-

dited against “other operating expenses” in the in-

come statement.

17. Construction contracts

The Group uses the “percentage-of-completion me-

thod” to determine the appropriate amount to reco-

gnise in a given period. The stage of completion is

measured by reference to the contract costs incurred

up to the balance sheet date as a percentage of total

estimated costs for each contract. Costs incurred in

the year in connection with future activity on a con-

tract are excluded from contract costs in determining

the stage of completion. They are presented as in-

ventories, prepayments or other assets, depending

on their nature.

When the outcome of a construction contract cannot

be estimated reliably, contract revenue is recognised

only to the extent of contract costs incurred that are

likely to be recoverable.

When the outcome of a construction contract can be

estimated reliably and it is probable that the contract

will be profi table, contract revenue is recognised over

the period of the contract. When it is probable that

total contract costs will exceed total contract reve-

nue, the expected loss is recognised as an expense

immediately.

The Group presents as an asset the gross amount

due from customers for contract work for all contracts

in progress for which costs incurred plus recognised

profi ts (less recognised losses) exceed progress bil-

lings. The gross amount due from customers is red-

uced by pre-payments on projects. Progress billings

not yet paid by customers are included within “trade

and other receivables”.

The Group presents as a liability the gross amount

due to customers for contract work for all contracts

in progress for which progress billings exceed costs

incurred plus recognised profi ts (less recognised

losses). These amounts are also reduced by prora-

ted prepayments.

18. Cash and cash equivalents

Cash and cash equivalents includes cash in hand,

deposits held at call with banks, other short-term

highly liquid investments with original maturities of

three months or less. Bank overdrafts are shown wi-

thin borrowings in current liabilities on the balance

sheet.

Restricted cash and cash equivalents comprise depo-

sits pledged as collateral for loans and guarantees.

19. Government grants

Government grants are recognised at their current

fair values, when there is reasonable assurance that

the grant will be awarded and the Group meets the

required conditions for the award of the grant.

Government grants for costs are recognised over the

period in which the corresponding costs, for which

the compensation was granted, are incurred.

Government grants for investments are recognised

as accruals under non-current liabilities. They are

reversed on a straight-line basis over the estimated

useful life of the respective asset and taken through

profi t or loss.


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20. Accounting of expenses relating to the initial public offering

Expenses relating to the initial public offering are off-

set against additional paid-in-capital.

21. Leases

Leasing agreements for property, plant and equip-

ment according to which the Group sub-stantially

assumes all risks and rewards associated with the

assets are accounted for as fi -nance leases. Such

assets are recognized at the lower of the current

fair values at the be-ginning of the lease term or

the present value of the minimum lease payments.

Lease pay-ments are divided into fi nance char-

ge and principal components to obtain a constant

interest rate for the remaining liability. The related

leasing obligations less fi nancing costs are recog-

nized within “long-term borrowings” and “short-term

borrowings”. Interest included in bor-rowing costs is

charged to the income statement over the period of

the lease.

Property, plant and equipment acquired through fi -

nance leases are depreciated over the term of the

lease or the estimated useful life, if shorter.

In addition, the Group has entered into operating

lease agreements for the use of offi ce equipment,

which are charged to income statement.

22. Deferred Income Taxes

The Company utilizes the liability method of accounting

for deferred income taxes whereby deferred tax assets

and liabilities are recognized to refl ect the future tax

consequences at-tributable to temporary differences

between the fi nancial reporting bases of existing as-

sets and liabilities and their respective tax bases.

In addition, deferred taxes are recognized for current

losses and tax losses carry forwards. Deferred tax

assets and liabilities are determined by using tax ra-

tes that have been enacted or substantially enacted

by the balance sheet date. Effects from changes in

tax rates are recognized as expense or income in the

year they take effect. Deferred tax assets are re-co-

gnized to the extent that it is probable that future ta-

xable profi t will be available against which the current

tax losses or tax loss carry forwards can be utilized.

23. Non-current employee benefi ts

In accordance with IAS 19 provisions for pensions

and similar obligations are recognised using the pro-

jected unit credit method.

The present value of the defi ned benefi t obligation is

determined by discounting the estimated future cash

outfl ows using interest rates of high-quality corporate

bonds that are de-nominated in the currency in which

the benefi ts will be paid and that have terms to matu-

rity approximating to the terms of the related pension

obligation. Actuarial gains and losses ex-ceeding a

corridor of 10 % of the higher of the present value

of the defi ned benefi t obligation or plan assets are

charged or credited to income over the employees’

expected average re-maining working lives.

Past-service costs are recognised immediately in in-

come, unless the changes in the pension plan are

conditional on the employees remaining in service

for a specifi ed period of time (the vesting period). In

this case, the past-service costs are amortised on a

straight-line basis over the vesting period.

Defi ned contribution plans are immediately recog-

nised in the income statement.

23.1. Pension obligations

The Group operates long-term defi ned benefi t pen-

sion schemes for part of its employees. Group com-

panies operate various pension schemes, defi ning

entitlements to certain nominal amounts or pension

promises taking into account estimated salary incre-

ases until retirement and an adjustment of current

pension payments after retirement to living costs.

Pension obligations are based either on law or on

individual contracts.

The liability recognised in the balance sheet in re-

spect of defi ned benefi t pension plans is the present

value of the defi ned benefi t obligation at the balance


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sheet date less the fair value of plan assets, together

with adjustments for unrecognised actuarial gains or

losses and past service costs.

Defi ned contribution plans are based either on law

or on individual contracts as well as vol-untarily and

are paid to public or private pension insurance com-

panies / funds. The Group has no further obligations

after the payment of the contributions. The contribu-

tions are re-cognized in staff costs. Prepayments of

contributions are recognized as an asset to the ex-

tent that there is a right to repayment or to reduction

of future payments.

ATB-Group

The provision for ATB Austria Antriebstechnik Aktiengesellschaft, Spielberg, is set up for the

entitlements of employees who were taken over

from Bauknecht Austria GmbH, Spiel-berg. These

entitlements represent nominal amounts which are

not subject to change. The amount of these defi ned

benefi t obligations approximates the present value of

the difference between the percentage entitlements

acquired by the measurement date, in relation to the

period of insurance and the expected salary upon oc-

currence of the insurance case.

The provision at ATB Antriebstechnik GmbH,

Welzheim, Germany, relates to pension commit-

ments based on individual agreements to some se-

nior executive employees, as well as loyalty bonuses

in accordance with the internal guideline of the com-

pany for other staff. The amount of these defi ned

benefi t obligations approximates the present value of

the entitlements acquired by senior executive emplo-

yees by the measurement date, taking into account

expected salary increases until retirement and an ad-

justment of current pensions after retirement to the

cost of living.

The provision at ATB SELNI SAS, Nevers, France,

relates to pension commitments based on individual

agreements to some senior executive employees, as

well as for other staff. In both pension plans the enti-

tlements are based on salary and years of service at

the end of the employment relationship.

The provision at SCHORCH Elektrische Maschi-nen und Antriebe GmbH, Mönchengladbach,

Germany, concerns defi ned benefi t plans for certain

individual staff with a legal basis of two pension plans

from 1977 and 1988. The defi ned benefi t plans de-

pend on pensions group and the service period and

determine that the pension entitlement is given at the

time of leaving the Group and having the entitlement

to receive the state pension or in case of invalidity.

Furthermore a widow pension is provided (60 % of

claim). Employees started after 30 September 1996

are not included in the pension plan of 1988.

The provision at Brook Crompton Ltd., Toronto,

Canada, concerns defi ned benefi t plans for certain

individuals with a legal basis of “Brook Crompton

Pension Plan for Canadian Employees” replacing

the pension plans “BTR Pension Plan for Canadian

Employees” and “Registered Pension Plan for the

Employees of Brook Hansen (Canada) Inc.” since

1996. The plan assets are invested in a blended

fonds (shares and fi xed interest securities), which is

administered by Jarislowsky Fraser (JF) Limited. The

employees become participants of the pension plan

after one year working for the company and after

two years they have a claim on the pension plan. The

retirement payment is paid to employees on the fi rst

day of month of the 65 anniversary. With an earlier

retirement (55 years) a reduced retirement payment

is made. The maximum annual payable retirement

amount is limited to the retirement payment accor-

ding to the Canadian Income Tax Regulations.

AE&E-Group

The provision for pensions at Inova France S.A., Rueil-Malmaison, France, and Socrit S.A., Portes-

les-Valence, France includes pension entitlements

based on collective bargaining contracts for manage-

ment and other employees. The pension entitlement

depends on the level of fi nal remuneration and the

number of years of service until the employment

ends.

The insurance plan of the pension fund of Von Roll Inova Holding AG, Zurich, Switzerland, is stipulated

in detail in its regulations, effective 1 January 2001,


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as well as in amendments to regulations dated 1 Ja-

nuary 2004 and 1. April 2004. In the following we

provide the neces-sary disclosures for the calculation

of the obligations:

• The insured salary approximates the 13-fold

monthly salary less a coordination amount of 50 %

of the maximum AHV (Swiss insurance scheme

for old age pensions and surviving dependents) re-

tirement pension (currently TCHF 13 (TEUR 8)).

The maximum insured salary is stipulated at TCHF

116 (TEUR 75).

• The amounts are determined in accordance with

the age limits stipulated in BVG (Swiss federal law

on occupational old age, surviving dependents’

and disability pensions), de-pendent on age.

EMCO-Group

The pension obligation at EMCO MAIER GESELL-SCHAFT M.B.H., Hallein, is based on 3 individual

commitments.

Montanwerke-Group

The provision at Montanwerke Brixlegg Aktienge-sellschaft, Brixlegg, was set up based on individual

contractual commitments.

23.2. Severance payments

In accordance with Austrian labour law, termination

benefi ts have to be paid to employees upon termina-

tion of employment, provided certain criteria (inclu-

ding retirement) are met. The amount paid depends

on the level of fi nal remuneration and the number

of years of service. Termination benefi ts represent

one-off payments.

The Act on Corporate Staff Provision (“Betriebliches

Mitarbeitervorsorgegesetz” or BMVG) resulted in a

transition in Austria from defi ned benefi t to defi ned

contribution entitlements, which were transferred to

staff provision funds (“Mitarbeitervorsorgekassen”).

The changed legal situation is applicable for emplo-

yment contracts which were concluded on or after

1 January 2003 or for those which were changed

voluntarily to the new system by a mutual agreement

between employer and employee. Pursuant to the

new law the employer has to pay 1.53 % of rem-

uneration into a staff provision fund. The company

has not obligation to make additional contributions

beyond this.

Provisions for termination benefi ts at ATB SEVER

a.d., Subotica, Serbia, were set up based on an ob-

ligation arising from collective agreement for the fi rst

time in the takeover balance sheet as at 1 January

2005. The respective obligations were determined

using the projected unit credit method. Salary incre-

ases expected for the future that impact the amount

of the entitlements were taken into account.

23.3. Anniversary bonuses

Furthermore, the employees of the Austrian, Ger-

man, Serbian, Polish and French companies receive

anniversary bonuses based on years of service sti-

pulated in the collective agree-ments. The amount

of anniversary bonuses depends on the employees’

years of service and on the remuneration at the time

the anniversary bonuses are paid.

23.4. Termination benefi ts

Termination benefi ts are payable when employment

is terminated by the Company before the normal

retirement date, or whenever an employee accepts

voluntary redundancy in exchange for these benefi ts.

The Company recognises termination benefi ts when

it is demonstrably committed to either: terminating

the employment of current employees according to

a detailed formal plan without possibility of withdra-

wal; or providing termination benefi ts as a result of

an offer made to encourage voluntary redundan-

cy. Benefi ts falling due more than 12 months after

the balance sheet date are discounted to present

value.

24. Provisions

Provisions have to be set up when the company has

a present legal or constructive obligation as a result

of past events, it is more likely than not that an out-

fl ow of resources will be required to settle the obliga-

tion and the amount can be reliable estimated.


Global Reports LLC

Where there are a number of similar obligations, the

likelihood that an outfl ow will be required in settle-

ment is determined by considering the class of obli-

gations as a whole. A provision is recognized even if

the likelihood of an outfl ow with respect to any one

item included in the same class of obligations may

be small.

The Company provides for the estimated cost of

product warranties and product returns at the time

revenue is recognized and the Company has a

constructive obligation. Warranty provision is esta-

blished based on the Company’s best estimates of

the amounts necessary to settle future and existing

claims on products sold as of the balance sheet date.

Product return provisions are based on our historical

experiences.

Provisions for restructuring costs comprise future

obligations for employee termination bene-fi ts. The-

se expenses are recognized in the income statement

in the period in which the Group is required to settle

the payment. Such obligations are recognized only

when there is an underlying agreement in which

the reasons for the restructuring measures and the

number of employees concerned are explained and

after the employees concerned have been informed

about the respective measures.

Provisions are measured at the present value of the

expenditures expected to be required to settle the

obligation using a pre-tax rate that refl ects current

market assessments of the time value of money and

the risks specifi c to the obligation.

25. Revenue recognition

Sales of goods are recognised when the amount of

the expected consideration can be relia-bly estima-

ted, it is more likely than not that the company will

receive the economic benefi t from the sale and own

costs can be reliably estimated. Therefore the com-

pany recognises revenue from the sale of products

only after the related risks and ownership have been

transferred. Revenue is shown net of rebates and dis-

counts and after eliminated sales within the Group.

Revenue from construction contracts is recognised

in accordance with the percentage-of-completion

method (see Note F.16).

Revenues from services are recognized based on

the percentage of completion (relation-ship between

rendered services and total services to be rendered)

in the year of rendering the services.

Interest income is recognised after calculation accor-

ding to the effective interest method.

26. Earnings per share

Basic earnings per share are calculated by dividing

the profi t attributable to equity holders of the Com-

pany by the weighted average number of ordinary

shares in issue during the year.


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H. Critical accounting estimates and judgements

Estimations and judgements are carried out on a re-

gular basis and are based on empirical values and

other factors, including assumptions concerning fu-

ture events, which can be reckoned as being reaso-

nable under the given circumstances.

The Group makes estimates and assumptions for fu-

ture events. The carrying amounts adapted from the-

se assumptions correspond only rarely to the actual

events. Assumptions and estimates, which feature

the signifi cant risk to cause an adaption of the car-

rying amount of assets and liabilities within the next

fi nancial years, relate to the following issues:

(a) Estimation of the impairment of Goodwill

Goodwill is tested for impairment annually by the Group

in accordance with the accounting principle illustrated

in Note G.7. The recoverable amount of the cash ge-

nerating units was determined on the basis of the cal-

culation of the value in use. To be able to perform the

cal-culations, estimations are of utmost importance.

If the gross margin used in the calculations as at 31

December 2006 decreases prospectively by 10 %

in comparison with the estimations of the manage-

ment, the Group will not have to reduce the carrying

value in terms of the goodwill and property, plant and

equipment anyhow.

If the interest rate before taxes, used in the calcu-

lations for the discounted cash fl ows, in-creases by

10 % in comparison with the estimations of the ma-

nagement, the Group will also not experience any fur-

ther reduction in the carrying value of the goodwill.

(b) Income taxes

The Group is subject to income tax under various

jurisdictions. A signifi cant estimate is re-quired in the

determination of the provision for global income ta-

xes. There are many transac-tions and calculations,

in which the ultimate determination of tax expense

in the course of ordinary business activities is un-

certain. The Group recognises liabilities for expected

prob-lems related to tax audits based on estimates

whether additional taxes will become due. If the fi -

nal outcome of this matter differs from the original

amounts, these differences will impact income tax

and provisions for deferred taxes in the period in

which such a termination was made.

(c) Fair value of derivative

and other fi nancial instruments

The fair value of fi nancial instruments that are not

traded in an active market (e.g. over-the-counter de-

rivatives) is determined by using measurement tech-

niques. The Group makes decisions regarding the

selection of various methods and estimates, which

are mainly based on market conditions prevailing at

the respective balance sheet date.

(d) Actuarial assumptions of provisions

for pensions and other post-retirement benefi ts

The company sets actuarial assumptions based on

the latest market conditions. The Group uses statisti-

cal and actuarial calculations from actuaries in order

to predetermine future events in connection with the-

se obligations. To carry out calculations, actuarial as-

sumptions and estimates are of utmost importance.

These are set on the basis of the latest market con-

ditions. In case of a negative variation of the interest

rate before taxes by 10 % regarding the initial as-

sumptions, the Group’s obligations would increase

by TEUR 7,684 (after deduction of plan-assets).

(e) Trade receivables and other receivables

Trade receivables and other receivables are initially

recognised at amortised costs. This means that they

are recognised at cost less provision for doubtful re-

ceivables. Uncollectible receivables are written off,

as soon as they are recognised as such.


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The experiences of the Group regarding the colle-

ctability of receivables are used for the cal-culation

of the provision for doubtful receivables. If the esti-

mates and assumptions concern-ing the collectability

change by 10 % to the disadvantage of the Group,

an additional provision for doubtful receivables to the

amount of TEUR 1,327 would be conducted. Howe-

ver, the management has the opinion that there are

currently no default risks regarding the re-ceivables,

which might exceed the level of the provision for

doubtful receivables.

(f) Inventories

Inventories are stated at the lower of cost and net

realisable value at the balance sheet date. Net re-

alisable value is the estimated selling price in the

ordinary course of business, less applicable variable

production and selling expenses. If the estimates

and assumptions con-cerning the impairment pro-

vision for inventories change by 10 %, an additio-

nal provision to the amount of TEUR 987 would be

conducted.

(g) Revenue recognition

In determining revenues and earnings in accordance

with the percentage-of-completion method A-TEC

makes assumptions and estimates about the future

development of long-term construction contracts. If

these assumptions and estimates change, signifi cant

impacts on the fi nancial statements can arise. If the

assumptions regarding the profi t margin change by

10 %, the profi t before tax will experience a reduc-

tion to the amount of TEUR 74 as a result.

(h) Business combinations

Fair values of assets acquired in business combina-

tions are determined based on assump-tions concer-

ning future income likely to fl ow from these assets. If

these future cash fl ows change signifi cantly, impair-

ments may be required.


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1. Financial risk factors

The Group’s activities expose it to a variety of fi nan-

cial risk, e.g. price risk, currency risk and interest

rate risk. The Group’s overall risk management pro-

gramme focuses on the unpredictability of fi nancial

markets and seeks to minimise potential adverse ef-

fects on the Group’s fi nancial performance.

1.1. Foreign exchange risk

The Group operates internationally and is exposed

to foreign exchange risk arising from various curren-

cy exposures, primarily with regard to the US dollar,

the UK pound, the Czech crown, the Croatian kuna,

the Japanese yen, the Norwegian crown, the Polish

zloty, the Singapore dollar, the Slovak crown and the

Serbian dinar.

To manage the foreign exchange risks constant mo-

nitoring of all transaction, translation and economic

risks is carried out. The hedging of transaction risks

within the Group is done by netting. In addition, sales

transactions denominated in foreign currencies are

performed through foreign currency accounts, the

balances of which are not translated into the Group

currency, if possible, but used for the settlement of

liabilities in the same currency.

1.2. Interest rate risk

The Group result and the operative cash fl ow are

basically not dependent on changes in the market

interest rate, with the exception of non-current fi -

nancial liabilities (cf. Note J.19). The Group has no

signifi cant interest-bearing assets.

The interest rate risk arises from long-term interest

bearing fi nancial liabilities. The Group is exposed to

a Cash fl ow risk conditional upon interest due to its

liabilities with variable interest rates. Likewise, a risk

conditional upon interest resulting from changes in

the current fair value arises from the fi xed-interest

liabilities.

1.3. Default risk

There is no dependency on individual major custo-

mers. Nevertheless, A-TEC could be exposed to a

default risk, when contracting parties do not fulfi l

their obligations. Management estimates the default

risk to be very low. The Group has policies in place to

ensure that product sales and services are delivered

only to customers with an appropriate credit history

and limit the amount of credit exposure to any con-

tracting party.

1.4. Liquidity risk

Prudent liquidity risk management implies maintai-

ning suffi cient cash and cash equivalents and the

availability of funding through an adequate amount

of committed credit facilities. Due to the dynamic

nature of the underlying businesses, the aim is to

maintain fl exibility in funding by keeping committed

credit lines available.

Short-term fi nancing is in part based on factoring,

including genuine factoring (transfer of the default

risk) and non-genuine factoring (the risk remains

with the company).

2. Accounting for derivative fi nancial instru-ments and hedging activities

Derivatives are initially recognised at acquisition cost

and are subsequently remeasured at fair value.

To manage the foreign exchange risk relating to the

US dollar, the company enters into currency hedges

I. Financial instruments and risk management


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with terms to maturity of less than one year. The-

se derivatives are entered into to minimise the risk

from currency fl uctuations with regard to forecast

cash fl ows from operating activities. These deriva-

tives, which provide effi cient economic hedging wi-

thin the Group’s risk management, however, are not

accounted for pursuant to the specifi c provisions of

IAS 39 on hedge accounting, since the formal regu-

lations pursuant to IAS 39 for “Hedge Accounting”

are not applied. The changes in the fair values of

these derivative fi nancial instruments are therefore

also immediately recognised in the consolidated in-

come statement.

In particular at the London Metal Exchange copper

options and copper forward contracts are entered

into through brokers for speculation purposes.

The company enters into option and hedging transac-

tions for copper contracts, currency hedges, options,

foreign currency forward contracts and futures.

Financial instruments which were acquired or entered

into primarily with the intention to generate a profi t

from short-term price fl uctuations or trading margins

are recognised as “held for sale”. Derivative fi nancial

assets are always classifi ed as “held for sale”, unless

they are designated for hedging purposes and meet

the effectiveness criteria.

3. Estimate of current fair values

The fair values of quoted derivative fi nancial instru-

ments and available-for-sale securities are based on

bid prices at the balance sheet date. The current fair

value of foreign exchange forward contracts is deter-

mined by the foreign exchange rates prevailing at the

balance sheet date.

For fi nancial assets and liabilities with terms to ma-

turity of less than one year it is presumed that their

nominal value less any estimated deductions appro-

ximates their current fair value.

The current fair value of fi nancial investments in

equity instruments which are not quoted on an ac-

tive market as well as of derivatives associated with

them that have to be settled through delivery of such

unquoted equity instruments is considered a relia-

ble estimate, if the fl uctuation margin of reasonable

estimates of the fair value is not signifi cant or the

occurrence probability of various estimates within

this margin can be reliably assessed and used for

estimating the fair value. Among other things, the

following factors were taken into account in determi-

ning the fair value: the current value of money, equity

(share) prices, the risk of early redemption as well

as volatility.


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J. Notes to the consolidated fi nancial statements

Due to the fi rst-time consolidation of Lindeteves-Jacoberg Ltd. Singapore (initial consolidation 1 June 2006),

of former Alstom Industrial boiler and plant business in Czech Republic and Germany (initial consolidation

1 June 2006) and due to the prior-year acquisition of Austrian Energy & Environment (Australia) Pty. Ltd.,

Sydney, Australia (initial consolidation 1 December 2005) in the fi nancial year 2005, prior-year fi gures have

only limited comparability.

1. Segment reporting

The following main business areas account for the major part of the activities of the “A-TEC”-Group:

plant construction, drive technologies, mechanical engineering, metal industry.

The remaining small business areas and consolidated amounts are included under “other”.

Primary reporting format – business areas

Financial year

2006 TEUR

Plant Drive Mechanical Metal construction technologies engineering industry Other Total Revenue 613,080 304,467 170,759 506,087 -24 1,594,369

Profi t from operations 25,362 11,099 15,154 43,466 -3,063 92,018

Finance expenses and income, net 6,259 -9,755 -3,097 -3,302 -3,553 -13,448

Profi t before tax 31,621 1,344 12,057 40,164 -6,616 78,570

Income tax expense -12,986 -878 -5,034 -8,518 35,647 8,231

Loss from discontinued operations

(less taxes of TEUR 0) -3,552 -3,724 0 0 0 -7,276

Profi t for the year 15,083 -3,258 7,023 31,646 29,031 79,525Depreciation and amortisation -4,606 -16,502 -6,606 -4,963 -479 -33,156

Restructuring income and expenses

and non-recurring income and expenses 3,964 3,471 0 0 0 7,435

Other non-cash expenses -2,323 11,203 -1,906 -536 7,248 13,686

Segment assets 705,246 464,409 215,350 161,338 27,146 1,573,489

Liabilities 622,590 409,985 163,558 101,751 -39,589 1,258,295

Capital expenditures 76,347 41,400 20,245 11,293 997 150,282


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Financial year

2006 TEUR

Plant Drive Mechanical Metal construction technologies engineering industry Other Total Revenue 443,346 211,142 124,665 306,546 -1,727 1,083,972

Profi t from operations 23,059 6,257 5,851 21,100 -1,224 55,043

Finance expenses and income, net -30 -5,167 -2,869 -2,508 -1,516 -12,090

Profi t before tax 23,029 1,090 2,982 18,592 -2,740 42,953

Income tax income -2,936 660 -998 -3,460 1,818 -4,916


(less taxes of TEUR 0) -1,521 0 0 0 0 -1,521

Profi t for the year 18,572 1,750 1,984 15,132 -922 36,516Depreciation and amortisation -4,174 -8,318 -6,479 -4,841 -534 -24,346

Restructuring income and expenses and

non-recurring income and expenses 196 6,011 -3,141 0 740 3,806

Other non-cash expenses -1,928 -525 -3,562 -950 0 -6,965

Segment assets 460,572 186,270 166,353 131,364 57,741 1,002,300

Liabilities 370,527 162,608 121,989 99,368 95,291 849,783

Capital expenditures 38,202 24,852 13,596 3,968 348 80,966

Secondary reporting format – geographical segments

The breakdown according to geographical segments is as follows:

2006 2005

Europe Rest of world Total Europe Rest of world Total and consolidation and consolidation

Revenue 1,318,072 276,297 1,594,369 945,583 138,389 1,083,972

Segment assets 1,167,432 406,057 1,573,489 982,763 19,537 1,002,300

Capital expenditures 130,547 19,735 150,282 47,557 33,409 80,966


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Revenue from current operations relate to the following regions:


2006 2005

TEUR TEUR

Europe

Germany 432,171 307,269

Austria 200,435 115,657

Italy 196,528 116,223

France 163,924 165,885

Switzerland 71,561 78,164

UK 39,308 19,399

Belgium 29,526 7,344

Netherlands 20,830 17,649

Sweden 17,723 101,325

Rest of Europe 146,066 16,668

Total Europe 1,318,072 945,583

Asia 101,744 77,900

North America 48,640 45,801

Australia 89,195 9,780

South and Central America 14,279 2,989

Africa 22,439 1,919

Total 1,594,369 1,083,972

2. Disclosures on construction contracts

Revenue from construction contracts, accounted for in accordance with IAS 11, total TEUR 644,715 in the

reporting period (prior year: TEUR 443,346). In the fi nancial year 2006 disclosures on construction contracts

consists of construction contracts from plant construction segment and EMCO Mecof S.r.L., Belforte, Italy.

Cost of material attributable to construction contracts amount to TEUR 399,787 in the fi nancial year 2006

(prior year: TEUR 278,953), staff costs to TEUR 126,311 (prior year: TEUR 93,837) and other operating

expenses to TEUR 91,749 (prior year: TEUR 53,703) and other operating income to TEUR 4,376 (prior

year: TEUR 9,042).

Further explanations relating to the plant construction segment can be found in Note J.1 “Segment reporting”.


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2006 2005

TEUR TEUR

Wages and salaries 229,648 172,821

Expenses for termination benefi ts and contributions to staff provision funds 2,250 2,365

Expenses for pensions 8,375 6,916

Expenses for social security and payroll-related charges 44,572 36,274

Other social benefi ts 1,739 2,216

Total 286,584 220,592

3. Staff costs

Staff costs are broken down as follows:

The average number of employees was 9,344 in the fi nancial year 2006 (prior year: 7,195); the number of

staff as at 31 December 2006 totalled 10,720 (prior year: 7,169).

Gross receivables and advance payments on construction contracts are broken down as follows:

Financial year ended 31 December

2006 2005

TEUR TEUR

Recognised Recognised Recognised Recognised

as receivable as payable as receivable as payable

Gross receivables 678,393 -82,213 529,652 -42,889

Advance payments -575,482 0 -493,225 0

Net amount 102,911 -82,213 36,427 -42,889


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4. Other operating income and expenses

Other operating income and expenses are broken down as follows:


2006 2005

TEUR TEUR Other operating income Income from the retirement of fi xed assets excluding fi nancial assets 1,986 1,296

Rental income 947 1,054

Insurance compensations 501 462

Transportation costs 5,656 0

Reversal of negative goodwill (cf. Note 29) 402 0

Sundry 17,835 20,915

27,327 23,727

Other operating expenses

Taxes not included in taxes on income 2,670 3,426

Legal, audit and consulting expenses, other external services 29,930 15,423

Leasing fees and rents 14,237 8,691

Travel expenses 12,884 10,584

Transportation costs 11,579 10,732

Costs for maintenance and repairs 10,910 8,435

Insurances 10,333 8,229

Order-results analysis 10,022 4,745

Impairment loss of receivables, addition to and reversal of allowances 8,951 2,953

Commissions 7,434 7,345

Charges of monetary transaction 5,435 2,558

IT expenses 4,559 1,877

Advertising expenses 4,198 3,077

Energy expenses 3,606 1,803

Post-, phone and postage expenses 3,250 1,985

Licence, Know-how and engineering expenses 1,964 619

Offi ce equipment 1,777 1,062

Basic and advanced training of employees 1,380 1,032

Guarantee expense -1,721 -2,310

Translation differences 0 398

Losses from the retirement of fi xed assets excluding fi nancial assets 678 263

Sundry 10,627 20,348

154,703 113,275Total 127,376 89,548


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5. Restructuring income and expenses and non-recurring income and expenses

This item is broken down as follows:


2006 2005

TEUR TEUR

ATB-Group

Restructuring ATB SELNI SAS, Névèrs Cedex, France 945 2,269

Restructuring measures ATB SEVER a.d., Subotica, Serbia 0 -8,280

Income from restructuring ATB SEVER a.d., Subotica, Serbia -4,818 0

Restructuring measures Lindeteves-Jacoberg Ltd., Singapore -401 0

Restructuring measures Brook Compton B.V., Breda Netherlands 239 0

Restructuring measures Brook Motors Ltd. Huddersfi eld, Great Britain 610 0

Restructuring measures ATB Technologies GmbH, Lustenau 26 0

Other -72 0

AE&E-Group: BABCOCK POWER ESPAÑA, S.A. (formerly Babcock Borsig España S.A.), Valle de Trabaga, Spain

Restitution contribution SEPI -3,101 -196

Release of provision project UTE BAIE -1,017 0

Expenses for personal transfer 1,700 0

Other -1,546 0

EMCO-Group

Impairment of receivables 0 3,200

Restructuring measures 0 -59

A-TEC INDUSTRIES AG

Gains from debt forgiveness (regarding borrowings) by a former

shareholder 0 -1,387

Earn-out Montanwerke Brixlegg Aktiengesellschaft, Brixlegg 0 647

-7,435 -3,806Thereof expenses 3,520 6,116

Thereof income -10,955 -9,922

Income from government grants, which are offset with expenses, is broken down as follows:


2006 2005

TEUR TEUR

Amortisation of government grants for capital expenditures 51 64

Benefi ts from research advancement 255 471

Other benefi ts 0 63

Total 306 598


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5.1. Restructuring income and

expenses within the ATB-Group

Effective 1 January 2005, management obtained

debt forgiveness amounting to TEUR 7,368 from

banks and tax reductions amounting to TEUR 912

after the acquisition of ATB SEVER a.d. in Subotica,

Serbia, in the course of restructuring measures.

At ATB SELNI SAS in Névèrs Cedex, France, which

was acquired on 1 April 2004, 6 jobs were cut in

2005 and 33 were cut in 2006. Out of the total

amount of TEUR 2,269 recognised under restruc-

turing expenses TEUR 1,871 relate to expenses/

settlements as provided by the social plan (TEUR

1,589 of which were carried as a provision), TEUR

75 to expenses from the termination of contracts in

connection with restructuring measures and TEUR

323 to consulting and legal fees incurred in con-

nection with the restructuring. In the fi nancial year

2006 pay offs in the amount of EUR 1.5 million were

accomplished. Furthermore there were restructuring

expenses because of compensations in the amount

of TEUR 226 and consultancy fees to the amount of

TEUR 719 in the fi nancial year 2006.

ATB SEVER a.d., Serbia: In the acquisition balance

sheet of 1 January 2005, provisions in connection

with the agreed social plan in the amount of EUR

6.02 million have been recognised. In the fi nancial

year 2006 management board decided against the

realisation of the social plan. Consequently, there

was a release of provision to the amount of EUR

4.8 million The revised plan based on an increase of

contract volume and on the accomplished displace-

ment of production from ATB COMPONENTS s.r.o.,

Czech Republic, to ATB SEVER a.d., Serbia. A bet-

ter operating grade could be reached because of the

displacement of production.

In the fi nancial year 2006, further restructuring ex-

penses are allocated to the following companies:

• Brook Motors Ltd., Great Britain: At the beginning of

October 2006 the company published a social plan

which comprised a cut of 21 jobs in Huddersfi eld.

• Brook Crompton B.V., Netherlands: TEUR 200 for

termination benefi ts are deferred by the company.

Expenses regard a reduction in staff of 4 emplo-

yees. The restructuring expense mainly includes

termination benefi ts and amounts to TEUR 610.

There are further expenses of termination of con-

tract to the amount of TEUR 39.

• ATB Technologies GmbH, Austria: Restructuring

expenses regard a reduction in staff of 30 emplo-

yees, which are because of the displacement of

the company from Rankweil to Lustenau.

Restructuring income to the amount of TEUR 401

regards debt restructuring of Lindeteves Jacoberg

Ltd., Singapore.

5.2. Restructuring income and

expenses within the AE&E-Group

In the fi nancial year 2006 restructuring income re-

sults mainly from restituted capital expenditures and

other expenses, which were restituted in the period

February 2004 to November 2006 in the amount of

TEUR 3,101 by SEPI (Spanish privatization agency).

Furthermore income from release of provision re-

garding project UTE BAIE in the amount of TEUR

1,017, from release of provision in connection with

guarantees of sundry projects to the amount of

TEUR 1,200, other operating income in the amount

of TEUR 231 and from expenses of the transfer of

personal provision to ERE in the amount of TEUR

1,700, are realised. The position also comprised the

expenses of allocation to provisions for the project

UTE BAIE and other projects.

5.3. Restructuring income and non-recurring

expenses within the EMCO-Group

The income from restructuring measures of the

EMCO-Group in the fi nancial year 2005 in the

amount of TEUR 59 relates to Mexpol Werkzeug-

maschinen GmbH, Hilden, Germany, and results

from the derecognition of a liability that had been

set up in connection with a restructuring in the fi -

nancial year 2004.


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6. Finance expenses and income, net

Finance expenses and income, net are broken down as follows:


2006 2005

TEUR TEUR

Interest and other expenses - Bank and loan interest -23,510 -17,127

- Losses from the sale of other fi nancial assets at fair value through profi t or loss 0 -1,523

- Unrealised losses on other fi nancial assets at fair value through profi t or loss -32 0

- Exchange rate losses 0 -2

- Depreciation on unconsolidated investment -324 0

- Borrowing costs – share purchase agreement (cf. Note J 19) 0 -1,159

- Losses from derivative transactions -774 -1,253

- Interest expense for non-current provisions for employee benefi ts -1,463 -818

- Finance leases -615 -398

-26,718 -22,280

Interest and other income - Income from securities 4,334 1,716

- Interest income from bank deposits 7,053 7,018

- Income from the sale of available-for-sale securities 0 115

- Income from the sale of other fi nancial assets at fair value through profi t or loss 1,835 311

- Unrealised gains on other fi nancial assets at fair value through profi t or loss 1 0

- Investment income from unconsolidated companies 2 2

- Exchange rate gains 45 0

- Income from the termination of a atypical silent partnership 0 1,028

13,270 10,190

Finance expenses and income, net -13,448 -12,090

Furthermore, a receivable due from a company, in

which the Group holds a 15 % investment, was im-

paired by TEUR 3,200.

In the fi nancial year 2006 there were no restructuring

income or expenses and no non-recurring expenses

within the EMCO-Group.

5.4. Non-recurring income and

expenses within the A-TEC-Group

The expense recognised in the fi nancial year 2005

to the amount of TEUR 647 relates to the earn-

out payments to existing shareholders of Mon-

tanwerke Brixlegg Aktiengesellschaft, Brixlegg,

as stipulated in the purchase agreement. In the

accounting of the company acquisition in the fi nan-

cial year 2004 these earn-out payments were esti-

mated and taken into account in the determination

of the purchase price. The amount taken through

profi t or loss in 2005 is merely the adjustment of

the earn-out liability to the actual payments. The

recognition in the income statement is based on

the recognition of the negative goodwill in the pri-

or-year result.

The income recognised in the reporting period of

TEUR 1,387 results from debt forgiveness (regar-

ding borrowings) by a former shareholder of A-TEC.


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7. Taxes on income


2006 2005 TEUR TEUR

Current tax expense -10,510 -1,811

Deferred tax effect in connection with expenses

relating to initial public offering (cf. Note J 15) -2,104 0

Deferred tax expense 20,845 -3,105

Total 8,231 -4,916

The following table presents the reconciliation from the Austrian corporate income tax rate to the effective tax

rate based on the tax expense recognised in the consolidated fi nancial statements.


2006 2005

TEUR TEUR

Profi t before tax 78,570 42,953

Taxes calculated at a rate of 25 % (2005: 25 %) -19,643 -10,738

Taxation differences -409 -2,734

Deferred tax effect in connection with expenses relating to initial public offering -2,104 0

Deferred taxes on tax losses carry forward 28,170 0

Non-deductible expenses (income) 2,217 8,556

Taxes on income 8,231 -4,916

With regard to deferred taxes, reference is made to Note J 21.

In the fi nancial year 2006, the company has initially recognised a deferred tax asset in the amount of TEUR

28,170 on tax losses carry forward. The recognition was a result of the change of the legal form of the Austri-

an Energy & Environment AG, Raaba into the Austrian Energy & Environment AG & Co KG, Raaba. Because

of the partnership, the limited partner (A-TEC) profi ts from the tax losses carry forward.

8. Research and development costs

Research and development costs recognised as expense amount to TEUR 15,286 (prior year: TEUR 7,396),

i.e. 0.96 % (prior year: 0.68 %) of revenue.

TEUR 3,325 (prior year: TEUR 830) of these expenses is recognised within “cost of material and other pro-

duction services”, TEUR 7,171 (prior year: 5,126) within “staff costs”, TEUR 3,108 (prior year: TEUR 209)

within “amortisation of intangible assets and depreciation of property, plant and equipment” and TEUR 1,683

(prior year: TEUR 1,231) within “other operating income” and “other operating expenses”.


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10. Intangible assets

The movement of intangible assets is presented in Appendix 1.

10.1. Goodwill and trademarks

The company prepared the annual impairment test in the fourth quarter of 2006 and 2005. In the course of

impairment tests goodwill and trademarks were allocated to cash-generating units, which correspond to the

several subgroups. In the case of AE&E-Group the several judicial units of the subgroup are cash-generating

units for their own and are accounted as a summary for the subgroup. ATB-Group is differentiated between

the cash-generating units ATB-Group without Lindeteves-Jacoberg-Ltd.-Group and Lindeteves-Jacoberg-

Ltd.-Group. Furthermore, there are the cash-generating units EMCO-Group and Montanwerke-Group.

Goodwill and trademarks based on business segments are broken down as follows (in TEUR):

31 December 2006

TEUR

Cash- ATBgenerating AE&E- LJ- (excluding EMCO- Montanwerke-Units Group Group LJ) Group Group Goodwill 91,068 16,555 29,010 23,312 2,580

Trademarks 0 23,657 0 0 0

Total 91,068 40,212 29,010 23,312 2,580

31 December

2006 2005

TEUR TEUR

Acquisition costs – capitalisation due to fi nance lease agreements 78,482 22,608

Accumulated depreciation -23,183 -2,028

Carrying amount 55,299 20,580

TEUR 54,098 (prior year: TEUR 38,627) of fi xed assets is used for collateralization of fi nancial liabilities

(cf. Note J. 19).

No impairment charge had to be recognised in the fi nancial year 2005 and 2006.

9. Property, plant and equipment

The movement of property, plant and equipment is presented in Appendix 1.

Other operating income of the fi nancial year 2006 include income from the disposal of non-current assets in

the amount of TEUR 1,986 (prior year: TEUR 1,296) and losses from the disposal of non-current assets in

the amount of TEUR 678 (prior year: TEUR 263).

Capitalised assets under a fi nance lease mainly include land and buildings, technical equipment and machi-

nery, as well as factory and offi ce equipment and are broken down as follows:


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The impairment tests of goodwill and trademarks calculate the difference between the carrying value of the

cash-generating unit, which profi ts from the business combination where goodwill alternatively trademarks

occurred, and the recoverable amount. The recoverable amount of cash generating units is defi ned by its value

in use. The calculation used forecast cash fl ows before taxes based on management approved budgets, which

cover a three to fi ve year period. In the case of cash-generating units of ATB-Group, EMCO-Group and Mon-

tanwerke-Group future cash fl ows over fi ve years are extrapolated with a growth rate – but not in the case of

AE&E-Group, because plant construction is a project orientated business where it seems not possible.

Management estimates the gross profi t margin based on former results and expected market development.

Because of the diversity in risk of the four segments there is a difference in the discount rate used for the

forecast. The discount rate before taxes is 12.0 % for AE&E-Group, 8.9 % for ATB-Group, 8.3 % for EMCO-

Group and 9.1 % for Montanwerke-Group. The diversity in the discount rates refl ects the business specifi c risk

of the several segments of the Group.

1) Budgeted operating result (EBIT-Marge)2) Weighted average growth rate, to consider the results after the budget period 3) Discount rate before taxes is applied to cash fl ow plans

These assumptions were used for the analyses of each individual cash-generating unit within the individual

segments.

31 December 2006

TEUR

Cash- generating AE&E - LJ - ATB - EMCO- Montanwerke - Unit Group Group Group Group Group

EBIT- Marge 1) 4 – 7 % 6 – 13 % 2 – 10 % 9 – 11 % 3 – 4 %

Growth rate 2) 0 % 1.5 % 1.5 % 1.5 % 0.5 %

Discount rate 3) 12.0 % 8.9 % 8.9 % 8.3 % 9.1 %

31 December 2005

TEUR

Cash-generating AE&E- ATB- EMCO- Montanwerke-Units Group Group Group Group Goodwill 32,667 27,847 23,656 2,580

Trademarks 0 0 0 0

Total 32,667 27,847 23,656 2,580


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A-TEC have been calculated no impairment of goodwill or trademarks in its cash generating units by the

impairment tests with one exception the EMCO-Group. The result of EMCO Italia S.r.l., Legano, Italy, was

among budget and reported a negative result in the fi nancial year 2006. As a result of the impairment test an

amortisation of the goodwill in the amount of TEUR 580 was required.

10.2. Capitalised development costs

Capitalised development costs refer to the Austrian Energy & Environment AG & Co KG, Raaba, to ATB Aus-

tria Antriebstechnik Aktiengesellschaft, Spielberg, and to EMCO STAR ALLIANCE Holding GmbH, Vienna.

At Austrian Energy & Environment AG & Co KG, Raaba, and ATB Austria Antriebstechnik Aktiengesellschaft,

Spielberg, development costs were capitalised for the fi rst time in 2005.

31 December

2006 2005

TEUR TEUR

Capitalised development costs 30,228 19,548

Amortisations and impairments -12,148 -6,892

Carrying amount 18,080 12,656

All capitalised development costs relate to internal development projects.

11. Available-for-sale securities and other long-term assets

11.1. Available-for-sale securities

The portfolio of available-for-sale securities developed as follows: 2006 2005

TEUR TEUR

Market value as at 1 January 28,878 15,859Additions from acquisition 0 9

Additions 1,253 23,878

Revaluation/devaluation 4 1,236

Disposals -25,081 -12,104

Exchange rate difference 2 0

Market value as at 31 December 5,056 28,878less long-term carrying value -5,056 -4,821

Short-term carrying value as at 31 December 0 24,057

• EBIT (budgeted operating result)

• Working Capital in % of turnover

• Capital expenditures

• Discount rate

• Growth deduction in perpetuity

• Beta factor

• Income tax rate

The results of the impairment tests of each individual cash-generating unit were reviewed via sensitivity analy-

sis. Although all value drivers of each individual cash-generating unit were variegated at 10 %. Following key

parameters are defi ned as value drivers:


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The available-for-sale securities to the amount of TEUR 5,056 (prior year: TEUR 4,821) consist of tradable

investment certifi cates and are measured at fair value.

Furthermore, the company held available-for-sale securities in the amount of TEUR 0 (prior year: 24,057),

which are recognised as current securities in the fi nancial year 2005 and not listed on the stock exchange.

They are measured at their fair value at 31 December 2005.

Changes in values are recognised directly in equity, unless the related assets are permanently impaired.

In the fi nancial year 2005 and 2006 there is no impairment because of permanently impairment.

Securities in the amount of TEUR 2,156 (prior year: TEUR 1,510) are used for collateralization of long-term

bank loans (cf. Note J. 19).

11.2. Other long-term assets

Other long-term assets mainly include long-term loans granted to third parties in the amount of TEUR 6,184

(prior year: TEUR 20,543), unconsolidated investments in the amount of TEUR 1,845 (prior year: TEUR

1,311) and fi nancial investments held-to-maturity to the amount of TEUR 1,891 (prior year: TEUR 0).

12. Trade and other receivables

Trade receivables and other current receivables are broken down as follows:

31 December

2006 2005

TEUR TEUR

Trade receivables 247,892 199,320

Less allowance for uncollectible and doubtful receivables (provision for impairment) -23,885 -14,654

Trade receivables – net 224,007 184,666

Accrued receivables on contracts 102,911 36,427

Receivables from tax authorities 16,813 14,424

Advances on salaries and travel expenses 659 379

Loan Lindeteves-Jacoberg Ltd., Singapore 0 12,384

Other receivables and assets 58,162 80,846

of which receivables from affi liated companies 3,350 32,574

Total 402,552 329,126

All receivables have a maturity up to one year.

Trade and other receivables were measured at current fair values.

Past experiences of the Group regarding the collectibility of receivables are refl ected in the determination of

the provision for impairment. Management presumes that the default risks concerning receivables will not

exceed the allowances.


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31 December

2006 2005

TEUR TEUR

Raw materials and supplies 78,111 58,885

Unfi nished products 68,976 48,471

Finished products and merchandise 54,106 41,446

Services not yet invoiced 4,163 1,813

Prepayments made 12,036 661

217,392 151,276

The company recognised an impairment provision on inventories in the amount of TEUR 702 (prior year:

TEUR 163) and reversal of the provision in the amount of TEUR 554 (prior year: TEUR 249) as a result of

unexpected distributability of inventories in “cost of material and other production services”.

TEUR 28,346 (prior year: TEUR 7,715) of inventories are used for collateralization of long-term bank loans.

13. Inventories

Inventories are broken down as follows:

In the fi nancial year 2006 the company recognised TEUR 11,453 (prior year: TEUR 1,669) as transfer to

provision for impairment and TEUR 3,376 (prior year: TEUR 280) as reversal of the provision for impairment.

Trade receivables of the Group against third parties to the amount of TEUR 25,620 (prior year: TEUR

24,208) are used for collateralization of short- and long-term fi nancial liabilities (cf. Note J. 19).

In the fi nancial year 2006, the loan of Lindeteves-Jacoberg Ltd., was transformed into equity (cf. Note F.2.2.).

The receivables from related companies are explained under J.28.

14. Cash and cash equivalents

Cash and cash equivalents are broken down as follows:

31 December

2006 2005 TEUR TEUR

Cash and bank balances 223,892 120,083

Restricted cash 87,060 33,445

310,952 153,528

The above presented cash and bank balances including restricted cash are identical with cash and cash

equivalents according to the cash fl ow statement.

Restricted cash and cash equivalents include securities for bank loans (see Note J.19) in the amount of

TEUR 6,504 (prior year: TEUR 3,002) and cash securities for warranties in the amount of TEUR 80,556

(prior year: TEUR 30,443).


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15. Equity

15.1. Share capital

Issued share capital amounts to EUR 6,600,000

(prior year: EUR 5,000,000) and is subdivided into

6,600,000 (prior year: 5,000,000) issued no-par

shares and fully paid in. Each share is participating

in share capital at the same amount. Shares are re-

gistered securities.

In the extraordinary general meeting on 6 November

2006 the following decisions were made:

• The board of management is authorised, within

the next fi ve years after recording of the amend-

ment of the statutes in the commercial register

and approval by the supervisory board, to increase

the share capital up to EUR 2,500,000 by issuing

2,500,000 new bearer shares. The issue can be

in one or more tranches in form of cash payments

or in return for stock and may be done under total-

ly or partly elimination of the subscription right and

the board of management is authorised to fi x the

issue price and the terms of issue with the appro-

val of the supervisory board.

• The supervisory board is authorised to determine

amendments of the statutes, which relate to the

authorised share capital.

• The board of management is authorised, accor-

ding to § 174 (2) AktG within the next fi ve years

after recording the amendment of the statutes in

the commercial register and ap-proval of the su-

pervisory board to issue convertible bonds. The

convertible bonds will include a conversion right up

to 2,500,000 bearer shares. The board of ma-

nagement is authorised to issue the convertible

bonds in one or more tranches and to fi x all further

conditions referring to the issue and the conversi-

on right of the convertible bonds.

• Decision about a conditional capital increase

according to § 159 AktG up to EUR 2,500,000

by issuing 2,500,000 new no-par bearer shares

for granting of conversion rights or options to

creditors of convertible bonds. Board of ma-

nagement is authorised, with the approval of

the supervisory board, to fi x more details of

the accomplishment of the conditional capital

in crease. The supervisory board is authorised

to determine the amendments of the statutes,

which are relating to the issue of shares due to

the conditional capital increase.

• Board of management is authorised, within the

next fi ve years after recording the amendment of

the statutes in the commercial register and ap-

proval of the supervisory board, to increase sha-

re capital according to § 159 (3) AktG up to EUR

500,000 by issuing 500,000 new no-par bearer

shares for share options. Board of management

is only authorised to the legally maximum amount

allowed according to § 159 (4) AktG, in the case

conditional capital is not used for convertible bonds

at that time. Board of management is authorised,

with the approval of the supervisory board, to fi x

more details of the accomplishment of the con-

ditional capital increase. The supervisory board is

authorised to determine the amendments of the

statutes, which relate to the issuance of shares

due to the authorised stock.

On 30 November 2006, the conditional capital in-

crease of share capital up to EUR 1,600,000 was

decided with resolution of the board of management

and the approval of the supervisory board as a result

of the decision of the extraordinary general meeting

on 6 November 2006.

1,600,000 shares with a nominal par value of EUR

1.00, were issued in course of the initial public offer.

The issue price was EUR 100.


Global Reports LLC


Total expenses relating to initial public offering amounted to TEUR 9,281, thereof TEUR 8,412 refer to new shares

and TEUR 869 to old shareholders. Tax effect on expenses relating to initial public offering is TEUR 2,103.

15.2. Additional paid-in-capital

Additional paid-in-capital developed as follows: 2006 2005

TEUR TEUR

1 January 6,612 6,612

Release of additional paid-in-capital -6,608 0

Share premium relating to the initial public offering 158,400 0

Less expenses relating to initial public offering

(TEUR 8,412 less tax effect of TEUR 2,103) -6,309 0

31 December 152,095 6,612

16. Current provisions

The current provisions are broken down as follows:

31 December

2006 2005

TEUR TEUR

Impending losses from pending transactions 6,429 5,207

Provision for restructuring 485 5,289

Total 6,914 10,496

17. Current liabilities

The current liabilities are broken down as follows:

31 December

2006 2005

TEUR TEUR

Accrual for follow-up costs 83,327 13,986

Social security contributions and other taxes 28,019 17,142

Accrual for other staff costs 19,420 8,490

Deferred income 11,430 15,461

Accrual for unconsumed vacation 8,622 7,070

Accrual bonuses and cash discounts 4,208 2,327

Accrual for partial retirement 3,415 2,636

Accrual for audit, legal and consulting costs 2,547 1,026

Other 22,931 21,705

Total 183,919 89,843

The position “other” includes liabilities to related parties in the amount of TEUR 1,019 (prior year: TEUR

29,716) (cf. Note J.28).

For details on current provisions refer to Note J.23.


Global Reports LLC

Year ended

31 December 2006 31 December 2006

Segment “Drive technologies”

Consolidated Brook Crompton

Electromotors (Dalian) Ltd.

and Lindeteves Marketing

Services and Lindeteves-

Jacoberg Trading 11,625 9,391 -3,725

Segment “Plant construction”

Consolidated Babcock

Montajes S.A. and

Babcock Isotron S.A. 14,355 34,609 -3,551

Total 25,980 44,000 -7,276

18. Liabilities relating to assets held for sale and discontinued operation

Current and non-current assets

held for sale

Liabilities relating to current and non-

current assetsheld for sale

Result from dis-continued ope-

rations, less taxes of TEUR 0

Year ended

31 December 2005 31 December 2005

Segment “Plant construction”

Consolidated Babcock

Montajes S.A. and

Babcock Isotron S.A. 17,701 38,084 -1,521

Segment “Other”

PK Aircraft Handels GmbH 1,504 394 0

Total 19,205 38,478 -1,521

Current and non-current assets

held for sale

Liabilities relating to current and non-

current assetsheld for sale

Result from dis-continued ope-

rations, less taxes of TEUR 0


Global Reports LLC


18.1. Brook Crompton Electromotors (Dalian) Ltd., Dalian, People’s Republic of China, and Lindeteves

Marketing Services, Singapore and Lindeteves-Jacoberg Trading, Singapore

With 31 January 2006 the company applied IFRS 5 in connection with IAS 27 for its subsidiary Brook Cromp-

ton Motors (Dalian) Ltd., People’s Republic of China. The company was acquired within the acquisition of

Lindeteves-Jacoberg Ltd., Singapore, at 31 May 2006. At the time of acquisition the Group decided to sell

the company. A sale within 6 months was not possible as a result of external effects.

Management is sure of the sale of Brook Crompton Electromotors (Dalian) Ltd., Dalian, People’s Republic

of China in the next months.

Furthermore two companies are accounted according to IFRS 5 in connection with IAS 27 in the consolidated

fi nancial statement. The two companies are the Lindeteves Marketing Services Pte Ltd., Singapore and the

Lindeteves-Jacoberg Trading Sdn Bhd, Singapore, which have been voluntarily liquidated since the 4 quarter

2006.

As a result assets in the amount of TEUR 11,625 and liabilities in the amount of TEUR 9,391 are balanced

as assets held for sale.

The consolidated result of the companies is TEUR -3,725 and is shown less tax expenses to the amount of

TEUR 0 as “Result from discontinued operations”.

The discontinued operation is part of the segment drive technologies.


2006 2005

TEUR TEUR

Cash fl ow from operating activities 573 0

Cash fl ow from investing activities -4,222 0

Cash fl ow from fi nancial activities 609 0

Total cash fl ow -3,040 0

(a) Assets held for sale:

31 December

2006 2005 TEUR TEUR

Property, plant and equipment 3,860 0

Other intangible assets 461 0

Inventories 4,668 0

Trade receivables 948 0

Other current assets 1,688 0

11,625 0


Global Reports LLC

(b) Liabilities relating to assets held for sale:

31 December

2006 2005 TEUR TEUR

Trade payables 6,507 0

Other liabilities 2,884 0

9,391 0

(c) The result of discontinued operation and the result of market appraisal of assets held for sale or

groups of assets and liabilities are broken down as follows:


2006 2005 TEUR TEUR

Revenue 9,300 0

Expenses -13,025 0

Profi t before taxes from discontinued operation -3,725 0Income tax expense 0 0

Profi t after taxes from discontinued operation -3,725 0Profi t from discontinued operation -3,725 0

18.2. Babcock Montajes S.A., Erandio, Spain, und Babcock Isotron S.A., Gijon, Spain

As of 1 January 2005, the company has applied IFRS 5 in connection with IAS 27 for the subsidiaries

Babcock Montajes S.A., Erandio, Spain, and Babcock Isotron S.A., Gijon, Spain. These companies were

acquired in connection with the business combination of BABCOCK POWER ESPANA S.A. (formerly Bab-

cock Borsig Espana S.A.), Valle de Trabaga, Spain, effective 1 February 2004, and the Group had decided to

sell these companies already at the time of acquisition. Due to external infl uences beyond the Group’s control

it was not possible to sell them within 12 months.

Therefore assets in the amount of TEUR 14,355 (prior year: TEUR 17,701) as well as liabilities in the amount

of TEUR 34,609 (prior year: TEUR 38,084) are presented as held for sale.

The consolidated result of the two companies amounts to TEUR 3,551 (prior year: TEUR 1,521) and has been

presented less tax effect to the amount of TEUR 0 (prior year: TEUR 0) as “result from discontinued operations”.

The company has signed a purchase contract with Isastur Servicios S.L., Spain as of 31 December 2006.

The control relating to the two subsidiaries could not be transferred to the acquirer as of 31 December 2006

due to specifi c contract regulations.

The cash fl ow is mainly relating to cash fl ow from operating activities and is presented in that way in the

cash-fl ow statement.


Global Reports LLC


(a) Asset held for sale:

31 December

2006 2005 TEUR TEUR

Inventories 441 0

Trade receivables 6,420 12,822

Other short-term assets 7,373 3,298

Cash and Cash equivalent 121 1,581

14,355 17,701

(b) Liabilities relating to assets held for sale:

31 December

2006 2005 TEUR TEUR

Long-term fi nancing liabilities 12,012 12,241

Provision for impending losses 4,188 4,200

Other provisions 1,004 2,062

Trade payables 15,252 15,090

Other liabilities 2,153 4,491

34,609 38,084

(c) The result of discontinued operation and the result of market appraisal of assets held for sale or

groups of assets and liabilities are broken down as follows:


2006 2005 TEUR TEUR

Revenues 32,976 46,279

Other operating income 231 1,420

Expenses -36,758 -48,553

Profi t before taxes from discontinued operation -3,551 -854Income tax expense 0 -667

Profi t after taxes from discontinued operation -3,551 -1,521Profi t from discontinued operation -3,551 -1,521


Global Reports LLC

19. Borrowings

Borrowings are broken down as follows:

31. Dezember

2006 2005 TEUR TEUR

Current Overdrafts (incl. current share in long-term debts) 103,619 118,722

Share repurchase agreement 0 16,406

Notes payable 2,411 0

Short-term portion of silent partners (cf. Note H.20) 661 3,260

Short-term portion in non-current fi nance lease 2,618 868

Subtotal 109,309 139,256

Non-current Bank loans 130,278 52,750

Bond 89,828 81,101

Liabilities from subordinated loans to third parties 5,300 10,000

Liabilities from fi nance leases 34,450 16,269

Silent partner (cf. Note H.20) 900 1,500

Other non-current borrowings 7,809 204

Subtotal 268,565 161,824

Total loan 377,874 301,080

18.3. PK Aircraft Handels GmbH, Wien

PK Aircraft Handels GmbH, Vienna, was a direct subsidiary of A-TEC and the business included the lea-

sing of aircrafts and the utilization of these aircraft. In the fi nancial year 2005 the company concluded a

leasing agreement relating to an aircraft, which was however cancelled in February 2006 by the purchase

of an aircraft and the immediate resale. The consolidated fi nancial statements do not include assets held

for sale and related liabilities with regard to this transaction. The company has been eliminated during the

fi nancial year 2006 and the related liabilities and receivables have been eliminated.


Global Reports LLC


19.1. Current bank loans

For short-term fi nancing the company took out cur-

rent loans in the form of overdrafts, term loan facili-

ties, cash credits and short-term portion in long-term

loans in the total amount of TEUR 103,619 (prior

year: TEUR 118,722) from its main banks, which

carry interest rates of between 2.6 % and 10.24 %

(prior year: 2.25 % to 6.7 %).

These short-term loans include the following items:

• The company uses bank loans with bill guarantees

of the Federal Government and a refi nancing com-

mitment of Österreichische Kontrollbank Aktienge-

sellschaft, Vienna, in the amount of TEUR 14,538

(prior year: TEUR 8,000). These loans exclusively

serve to fi nance export transactions. All trade re-

ceivables (excluding those receivables from affi -

liated companies) of ATB Austria Antriebstechnik

Aktiengesellschaft, Spielberg, and EMCO MAIER

GESELLSCHAFT M.B.H., Hallein, in the amount

of TEUR 19,576 (prior year: TEUR 21,191) were

pledged as security to Raiffeisenlandesbank Obe-

rösterreich Aktiengesellschaft, Linz. Furthermore

exists a blanket assignment in the amount of TEUR

5,000 of all receivables of ATB Austria Antriebs-

technik AG, Spielberg.

• At the balance sheet date investment loans in the

amount of TEUR 1,679 (prior year: TEUR 1,075),

carrying a fi xed interest rate of 4.35 % to 4.375 %

(prior year: 4 %) and with a term to maturity of less

than one year had been granted by the ERP Fund.

In the fi nancial year 2006, securities were provi-

ded for these investment loans in form of securi-

ties and lien on immovable property in the amount

of TEUR 302 and in form of written guaranties in

the amount of TEUR 1,377.

• As security for fi nancing from factoring, of which

TEUR 9,641 (prior year: TEUR 3,692) were out-

standing at the balance sheet date, a lien on the

property in Welzheim, Germany, in the amount

of TEUR 10,226 (prior year: TEUR 10,226) has

been registered in the land register.

• An amount of TEUR 19,661 (prior year: TEUR

24,450) of current bank loans is secured by re-

ceivables due from customers in the amount of

TEUR 1,239 (prior year: 16,735) and by inven-

tories in the amount of TEUR 18,422 (prior year:

7,715) of Montanwerke Brixlegg Aktiengesell-

schaft, Brixlegg.

• For current bank loans in the amount of TEUR 0

(prior year: 9,671) liens on properties of Montan-

werke Brixlegg Aktiengesellschaft, Brixlegg, have

been granted.

• For an amount of TEUR 0 (prior year: TEUR

13,224) of current bank loans 0 (prior year:

5,450,000) shares of ATB Austria Antriebstechnik

Aktiengesellschaft, Spielberg, has been pledged

as security.

• Assignments in the amount of TEUR 64 (prior

year: TEUR 64) of trade receivables of ATB Aus-

tria Antriebstechnik Aktiengesellschaft, Spielberg,

and of ATB Technologies GmbH, Lustenau, have

been made in order to provide security for current

liabilities. Furthermore a blanket assignment of re-

ceivables of ATB Technologies GmbH, Lustenau,

has been signed.

• In order to provide security for current liabilities

of ATB Technologies GmbH, Lustenau, a bank

guarantee in favour to Investkredit in the amount

of TEUR 101 (prior year: TEUR 101) and an ac-

ceptance to the amount of TEUR 830 (prior year:

TEUR 830) exists.

• A lien on real property of ATB SEVER a.d., Sub-

otica, Serbia, in the amount of TEUR 1,861 (prior

year: TEUR 0) has been pledged as security. Fur-

thermore a blanket assignment for all receivables

exists.

• “Floating charges” (in case of breach of contract or

liquidation the believer obtains claim for all assets)

provide security for current bank loans of Brook

Motors Ltd., Huddersfi eld, Great Britain, in the

amount of TEUR 18,716.

• Receivables in the same amount provide securi-

ty for current liabilities of Brook Crompton Ltd.,

Toronto, Canada, in the amount of TEUR 262 to-

wards the Royal Bank of Canada.


Global Reports LLC

• “Fixed and fl oating charges” (in case of breach of

contract or liquidation the believer obtains claim for

all assets) for all assets of Lindeteves Engineering

Pte Ltd., Singapore, and Linberg Philippines Inc.,

Philippines, towards Citicorp International Limi-

ted provide security for current bank loans in the


19.2. Non-current bank loans

In order to fi nance investments and non-current as-

sets the company uses non-current loans, primarily in

the form of term loan facilities; non-current bank lo-

ans total TEUR 130,278 (prior year: TEUR 52,750)

at the balance sheet date. Non-current bank loans

are mainly subject to variable interest rates. In the

reporting period interest rates were between 2.0 %

and 5.0 % (prior year: 1.9 % to 4.8 %).

The following items have been pledged as security

for these bank loans:

• The Group Montanwerke Brixlegg Aktiengesell-

schaft, Brixlegg, has pledged two properties ow-

ned by the company as security for bank loans. A

lien of a maximum amount of TEUR 0 (prior year:

TEUR 655) has been registered in the land regi-

ster on a property in Himberg near Schwechat.

• Liens in connection with a company property of

EMCO MAIER GESELLSCHAFT M.B.H., Hallein,

in a maximum amount of up to TEUR 8,000 (prior

year: TEUR 8,000) has been granted as securi-

ty for bank loans of the EMCO-Group, some of

which have been registered in the land register,

while others have not been registered, but collate-

ral documents which can be registered in the land

register have been issued on them.

• A lien on real property of EMCO MAIER GESELL-

SCHAFT M.B.H., Hallein, has been pledged as

security for long-time liabilities in the amount of

TEUR 2400 (prior year: TEUR 0).

Following items have been pledged as security for

long-term liabilities of the ATB-Group:

• Under “short-term bank loans” a lien on the proper-

ty in Welzheim, Germany, in the amount of TEUR

10,226 (prior year: TEUR 10,226) has been regi-

stered in the land register.

• A lien on real property in the amount of TEUR

2,500 (prior year: TEUR 2,500) registered in

the land register on the property in Nordenham,

Germany, has been pledged as security. The real

property in Spielberg is burdened with a lien on

property in the amount of TEUR 6,000 (prior year:

6,000) not registered but incorporable.

• A lien on real property in the amount of TEUR

2,555 (prior year: TEUR 2,555) registered in the

land register on the property in Leeds, Great Bri-

tain, has been pledged as security.

• Furthermore securities to the amount of TEUR

460 (prior year: TEUR 435) have been pledged as

security.

• For long-term liabilities to banks of ATB Austria

Antriebstechnik Aktiengesellschaft, Spielberg, a

guarantee on investments to the amount of TEUR

4,100 (prior year: TEUR 4,100) and a promise of

a draft guarantee to the amount of TEUR 205 (pri-

or year: TEUR 205) of Österreichische Kontroll-

bank AG, has been provided as security.

• An assignment of assets in the amount of TEUR

65 (prior year: TEUR 65) of ATB Technologies

GmbH, Lustenau, has been given to provide secu-

rity for long-term and short-term liabilities to banks.

Furthermore bank guarantees in the amount of

TEUR 50 (prior year: TEUR 50) exist.

• “Fixed and fl oating charges” (in case of breach of

contract or liquidation the believer obtains claim for

all assets) for all assets of Lindeteves Engineering

Pte Ltd., Singapore, and Linberg Philippines Inc.,

Philippines, towards Citicorp International Limi-

ted provide security for current bank loans to the


In the fi nancial year 2005, fi nancing liabilities towards

KPS Beteiligungs GmbH, Vienna, in the amount of

TEUR 9,806 were reported under the item related

party transactions.

In the current fi nancial year 2006, KPS Beteiligungs

GmbH, Vienna, has been involved in fi nancing trans-

actions. For this reason the entity has been affi liated

as Special Purpose Entity and included in the con-

solidation.


Global Reports LLC

19.3. Liabilities from subordinated loans

Liabilities from subordinated loans in the amount of

TEUR 5,300 (prior year: 10,000) entirely relate to

Montanwerke Brixlegg Aktiengesellschaft, Brixlegg.

Bank Austria Creditanstalt AG, Vienna, and Raiff-

eisenbank Mittleres Unterinntal reg. Gen.m.b.H.,

Brixlegg, subordinate their claims to repayment of a

portion of their receivables in the amount of TEUR

5,300 (prior year: 5,300) and TEUR 0 (prior year:

TEUR 4,700) to receivables of existing third-party

creditors in such a way that repayments of their re-

ceivables can only be demanded from future profi ts

for the subordination period. In case of insolvency

(liquidation) of Montanwerke Brixlegg Aktiengesell-

schaft, Brixlegg, Bank Austria Creditanstalt AG, Vi-

enna, and Raiffeisenbank Mittleres Unterinntal reg.

Gen.m.b.H., Brixlegg, are entitled to also claim in full

their subordinated receivables.

The declaration of subordination is issued for a peri-

od of fi ve years starting on the fi rst day of the month

following the conclusion of the share purchase ag-

reement (agreement concluded between A-TEC and

the existing shareholders with regard to the acquisiti-

on of shares of Montanwerke Brixlegg Aktiengesell-

schaft, Brixlegg, dated 17 June 2004).

The subordinated receivables carry an interest rate of

2.5 % p.a. for the subordination period. Interest is pa-

yable at the end of each calendar year. In addition, the

subordinated receivables carry an interest rate of 2.5 %

p.a., this interest is temporarily capitalised and due for

payment at the end of the subordination period.

For the subordination period dividends may be paid

by Montanwerke Brixlegg Aktiengesellschaft, Brix-

legg, only insofar and to the extent exceeding the

company’s equity ratio of 25 % of the balance sheet

total in the most recently prepared individual fi nancial

statements of Montanwerke Brixlegg Aktiengesell-

schaft, Brixlegg, on which an audit opinion was issu-

ed and on the condition that the equity ratio amounts

to at least 25 % of the balance sheet total after the

profi t distribution.

In the fi nancial year 2006 subordinated loans in the

amount of TEUR 4,700 were redeemed.

For a total subordinated loan in the amount of TEUR

5,300 (prior year: TEUR 10,000) liens on properties

of Montanwerke Brixlegg Aktiengesellschaft, Brix-

legg, were pledged as securities.

19.4. Bond

On 2 November 2005 the company issued a bond

(ISIN AT0000499272) with a volume of TEUR

100,000 at a share price of TEUR 10 and a nomi-

nal value of EUR 100,000,000. The bond carries

a fi xed interest rate of 5.75 %, payable at the end

of the period each year on 2 November. The bullet

bond matures after a period of 5 years, the bond

creditor however is entitled to terminate the bond in

2008 as at the 3rd date on which interest payments

are due.

The maturity premium of TEUR 1,593 and the other

borrowing costs of TEUR 457 are recognised in ac-

cordance with the effective interest rate method over

the maturity of the bond as interest expense.

Since the company had acquired own shares of the

bond in a nominal amount of TEUR 18,000 prior to

the balance sheet date as at 31 December 2005,

amortised cost of the total bond obligation are out-

standing at an amount of TEUR 81,101. Due to

the early redemption other borrowing costs and the

maturity premium in the amount of TEUR 358 were

released to income in the fi nancial year 2005.

In the fi nancial year 2006 the company reissued a

portion of the bond in the amount of TEUR 16,740

with a maturity premium of TEUR 250 which is con-

sidered through the effective-interest-method over

the maturity of the bond as interest expense. Prior

to the balance sheet date as at 31 December 2006

the company acquired own shares of the bond to

a nominal value of TEUR 8,000. Due to the early

redemption other borrowing costs and the maturity

premium in the amount of TEUR 133 were released

to income in the fi nancial year 2006.



Global Reports LLC

Because of these developments the amortised cost

of the total bond obligation are outstanding at an


Each bond creditor is entitled to terminate the partial

bonds and to demand immediate repayment of the

nominal value, plus any interest accrued up to the

date of redemption, if:

(a) the issuer does not pay capital or interest within

14 days after the respective due date; or

(b) the issuer fails to meet any other material obli-

gation from the partial bonds and the failure to

do so persists for more than 15 days after the

paying agency has been informed about it by the

bond creditor; or

(c) a liability of the issuer or a material subsidiary in

an amount exceeding EUR 4,000,000 (or the

equivalent in another currency) determined as

legally binding by an arbitration court or an admi-

nistrative authority is not paid and this non-pay-

ment persists for more than four weeks or due to

this non-payment a related collateral is claimed

after the paying agency has been informed about

it by the bond creditor; or

(d) the issuer or a material subsidiary stops pay-

ments or publicly announces its insolvency or

over-indebtedness, or offers its creditors a gene-

ral regulation for the payment of its debts; or

(e) a court opens insolvency proceedings against the

issuer or a material subsidiary or such an insol-

vency proceeding is dismissed due to insuffi cient

assets to cover the related costs; or

(f) (i) the issuer or a subsidiary, the revenue of which

exceeded 20 % of the consolidated revenue of the

issuer’s group in the past fi nancial year, partially or

substantially discontinued its business operations,

or (ii) sells or otherwise disposes of or pledges as

security all or material parts of its assets, a mate-

rial part of the issuer’s assets particularly means

maintaining a shareholding of more than 75 %

of the share capital of a material subsidiary or

with regard to EMCO STAR ALLIANCE Holding

GmbH, Vienna, maintaining a shareholding of at

least 25 % of the share capital; or

(g) the issuer or a material subsidiary enters into li-

quidation, unless this is done in connection with

a merger or another form of business combinati-

on or a restructuring and all liabilities from these

partial bonds are assumed by the other or new

company and the credit standing of this company

is equivalent or higher than that of the issuer; or

(h) a certifi ed public accountant of the paying agency,

independent of the issuer’s auditor, who had been

appointed in accordance with the paying agency,

does not confi rm within 2 months after publication

of the issuer’s consolidated fi nancial statements,

but for the fi rst time based on the auditor’s re-

port on the consolidated fi nancial statements for

the fi nancial year 2005 that the minimum equity

ratio (10 %), the maximum debt redemption pe-

riod (5 years) and the minimum cash fl ow from

operations (2.5 %) have been met by providing a

detailed and reasonable justifi cation. (Pursuant to

Section 12 of the bond prospectus, the failure to

meet these criteria has to be published immedia-

tely by the paying agency); or

(i) control changes. The issuer will announce a

change in control immediately after having been

informed about it. (A termination in accordance

with this paragraph (i) is valid only if the corre-

sponding termination notice is given within 30

days after the change in control had been an-

nounced); or

(j) the issuer (i) decides on a dividend or profi t dis-

tribution or any other payment to its shareholders

or (ii) repurchases or acquires shares or subordi-

nated bonds or (iii) redeems loans from sharehol-

ders or subordinated loans and, as a result, the

consolidated equity ratio in accordance with IFRS

(“International Financial Reporting Standards”)

falls to below 20 %. In every other case the right

to give notice expires, if the reason for the termi-

nation has been cured prior to the effective exer-

cise of the right.


Global Reports LLC

In the cases laid down in paragraphs (b) or (c) a ter-

mination, unless one of the reasons for terminati-

on designated in paragraphs (a) or (d) to (g) exists

concurrently, will be effective only if termination no-

tices by bond creditors in a nominal amount of at

least 1/10 of the then outstanding partial bond were

received by the paying agency. In all other cases the

termination takes effect upon receipt of the termina-

tion notice according to the bond prospectus.

Pursuant to the bond prospectus all notifi cations by

bond creditors to the paying agency, in particular a

termination of partial bonds in accordance with Para-

graph (2), have to be submitted to the paying agency

in writing in the German language and by registered

mail. Notifi cations take effect upon receipt by the

paying agency. Proof has to be attached to the no-

tifi cation that the respective bond creditor is in fact

the bearer of the related partial bonds at the time

of the notifi cation. This can be proven by submitting

a certifi cate of the depositary bank or in any other

appropriate way.

The effective interest rate for the bond is 6.3 %.

19.5. Share repurchase agreement

In the fi nancial year 2005 the company concluded

a share purchase and sale agreement (share re-

purchase agreement). As a result of this agreement

954,286 shares in one of the subsidiaries were

transferred to the contracting party for a considera-

tion of TEUR 16,700 (EUR 17.5 per share). In turn,

A-TEC committed itself to repurchase the shares at

EUR 18.64 per share by 30 June 2006. Furthermo-

re, it was stipulated that any dividends and redemp-

tion of nominal will be offset against the repurchase

price. However, the voting rights attached to the

abovementioned shares remain with A-TEC.

As at 30 December 2005, 50,000 shares were al-

ready bought back.

The share repurchase agreement is measured by

using the effective interest rate method as at 31

December 2005 at an amount of TEUR 16,406.

It is recognised taking into account that the re-

purchase of the shares was performed already as

at 27 January 2006 instead of 30 June 2006 and,

therefore, the repurchase price of the shares was

EUR 18.242.

19.6. Obligations from fi nance lease

The short-term portion of fi nance lease obligations

amounts to TEUR 2,618 (prior year: 868)

The long-term portion of fi nance lease obliga-

tions amounts to TEUR 34,450 (prior year: TEUR

16,269).



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19.7. Other long-term fi nancing obligations

The allocation of other long-term fi nancing obligations is as follows:

31 December

2006 2005 TEUR TEUR

A-TEC Other long-term fi nancing obligations 204 204

EMCO-Group

Debt fi nanced purchase price EMCO MECOF S.r.l., Belforte, Italy 3,060 0

Financing given by federal state Sachsen-Anhalt, Germany 1,000 0

Other long-term fi nancing obligations 228 0

AE&E-Group

Other long-term fi nancing obligations 824 0

ATB-Group

Other long-term fi nancing obligations 2,493 0

7,809 204

The debt fi nanced purchase price of EMCO MECOF S.r.l., Belforte, Italy, has a maturity till June 2008 and

an interest rate of 0 %. The item “other long-term fi nancing obligations” of ATB-Group has a maturity from

2008 till 31 December 2009, an interest rate of 4 % and includes research and development funds. The item

“other long-term fi nancing obligations” of A-TEC bears no interest and has an unlimited maturity. The item

“other long-term fi nancing obligations” of AE&E-Group consists basically of obligations against funds and

employees. These obligations result from sales of fl ats connected to rights of abode.

19.8. Terms to maturity

Terms to maturity of non-current loans (excluding liabilities from fi nance leases and silent partners):

31 December

2006 2005 TEUR TEUR

Long term loansNo later than 1 year 106,030 135,128

Later than 1 and no later than 5 years 149,253 118,078

Later than 5 years 83,963 25,773

Total 333,946 257,564

The terms to maturity of liabilities from fi nance leases are as follows:

31 December

2006 2005 TEUR TEUR

No later than 1 year 2,618 868

Later than 1 year and no later than 5 years 9,092 16,269

Later than 5 years 25,358 0

Total 37,068 17,137


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Liabilities from fi nance leases – minimum lease payments:

31 December

2006 2005 TEUR TEUR

No later than 1 year 3,074 868

Later than 1 and no later than 5 years 12,584 20,175

Later than 5 years 30,760 0

46,418 21,043

Future borrowing costs from fi nance leases -9,350 -3,906

Present value of liabilities from fi nance leases 37,068 17,137

19.9. Covenant-clause

In December 2005 Lindeteves Engineering Pte. Ltd., Singapore, has issued Floating Rate Notes in the

amount of kUSD 25,000 (prior year: kUSD 20,863). The disagio for the FRNs is 10 %.

The FRNs are redeemed in 25 immediate quarterly annuities with an interest rate of Libor +7 % per year. The

FRNs are provided with securities and are part of the contractual agreement (“covenants”).

The obligations of Lindeteves Engineering Pte Ltd., Singapore, in connection with the FRNs are guaranteed

and additionally provided with securities through “fi xed and fl oating charges” for all assets (in case of breach

of contract or liquidation the believer obtains claim for all assets) of der Lindeteves Engineering Pte Ltd.,

Singapore, and of Linberg Philippines Inc., Philippines. Furthermore, all shares that Lindeteves-Jacoberg

Ltd., Singapore, holds from those two companies (Lindeteves Engineering Pte Ltd., Singapore, und Linberg

Philippines Inc., Philippines) are also part of the securities. As agreed in the redemption plan, the fi rst re-

demption will be paid on 2 May 2007.

The explanations J.19.4 include the covenant-clause of the bond issued by A-TEC, and J.19.3 those of

liabilities from subordinated loans. Furthermore convent-clauses exist in the AE&E-Group in relation to equity

ratio and the operating profi t of the subgroup.

19.10. Interest rate

The carrying amount of the bank loans is divided into variable interest rates and fi xed interest rates obligations:

31 December

2006 2005 TEUR TEUR

VVariable interest rates 225,273 166,611

Fixed interest rates 13,923 14,656

Total 239,196 181,267

The book value of the bank loans approximates the fair value. The effective interest rates at balance sheet

date for long-term bank loans amounts between 2 % to 16.5 % (prior year: 1.86 % to 7.5 %).



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20. Contributions from silent partners

31 December

2006 2005 TEUR TEUR

Contributions from typical silent partners 1,561 2,186

Contributions from atypical silent partners 0 2,574

Total 1,561 4,760

20.1. Typical silent partners

On 24 June 2003 a contract was concluded between Austrian Energy & Environment AG & Co KG (formerly

Austrian Energy & Environment AG), Raaba, and Steirische Beteiligungsfi nanzierungsgesellschaft m.b.H.,

Graz, with regard to the establishment of a typical silent partnership in the amount of TEUR 3,000. The

investment is redeemed in 10 semi-annual instalments beginning 30 June 2004. The Province of Styria

assumed a contingency in favour of Austrian Energy & Environment AG, Raaba.

20.2. Atypical silent partners

On 31 July 2003 Austrian Energy & Environment AG & Co KG (formerly Austrian Energy & Environment AG),

Raaba, concluded a contract with regard to the establishment of an atypical silent partnerschip with Invest

Unternehmensbeteiligungs Aktiengesellschaft, Linz. The contribution of the atypical silent partner amounts to

TEUR 2,000 and thus equals a share of 16.67 %. The investment relates to the profi t and loss, as well as to

the total assets including undisclosed reserves and goodwill. The silent partnership was terminated in 2005.

The amount payable to a silent partner upon his departure (“Abschichtungsbetrag”) of TEUR 2,574 was

due in 2006 and was recognised under “short-term borrowings”. In the fi nancial year 2006 the outstanding

amount of TEUR 2,574 was paid.

The adjusted profi t share of the atypical silent partner in the amount of TEUR 1,028 is included in the fi nancial

result of 2005.

20.3. Terms to maturity

The maturity of liabilities to silent partners is as follows:

31 December

2006 2005 TEUR TEUR

No later than 1 year 661 3,260

Later than 1 year and no later than 5 years 900 1,500

Total 1,561 4,760


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21. Deferred taxes

Deferred taxes developed as follows:

31 December

2006 2005 TEUR TEUR

As at 1 January 23,163 24,877Additions from acquisition 6,483 1,692

Direct change of equity 38 -355

Allocation/release 20,845 -3,105


As at 31 December 50,830 23,163

Deferred tax assets were set up for tax loss carryforwards, when this tax advantage was likely to be offset

against future taxable income. The Group has capitalised deferred taxes for tax losses in the amount of TEUR

52,076 (prior year: TEUR 46,543) which can be offset against future taxable income. No deferred taxes for

tax losses in the amount of TEUR 102,883 (prior year: TEUR 128,438) were capitalised.

Temporary differences arise primarily from the depreciation of property, plant and equipment, the remeasure-

ment of land, buildings and machines, with provisions for termination benefi ts, anniversary bonuses and pen-

sions and other provisions in connection with acquisitions of companies. In the fi nancial year 2005 the initial

consolidations of Austrian Energy & Environment (Australia) Pty. Ltd., Sydney, Australia, as at 1 December

2005 and of AE&E Chennai Works Ltd., Chennai, India, I.D.E.A and ATB SEVER a.d., Subotica, Serbia,

effective 1 January 2005, have an impact on the total of deferred taxes. Furthermore in the fi nancial year

2006 the initial consolidation of Lindeteves-Jacoberg Ltd., Singapore (initial consolidation on 1 June 2006),

and the former Alstom-construction business, Czech Republic (initial consolidation on 1 June 2006), have an

impact on the total of deferred Czech taxes.



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Non-current Provisions/ Deferred tax liabilities assets Receivables Tax privileges liabilities Total TEUR TEUR TEUR TEUR TEUR

As at 1 January 2005 7,509 16,174 575 432 24,690Addition from acquisition 8 0 0 0 8

direct change of equity 280 0 0 0 280

(credit)/charge in

income statement 4,806 -6,858 -68 22,793 20,673

Translation differences 0 0 0 -1 -1

As at 1 January 2006 12,603 9,316 507 23,224 45,650Addition from acquisition 6,661 688 -73 35 7,311

Direct change of equity -280 0 0 0 -280

(Credit)/charge in

income statement 908 29,596 -214 -9,622 20,667

Translation differences -270 0 0 0 -270

As at 31 December 2006 19,622 39,600 220 13,637 73,078

Current Receivables/ Non-current Loss carry- Non-current provisions/ other Deferred tax assets assets forwards provisions liabilities accruals Total TEUR TEUR TEUR TEUR TEUR TEUR

As at 1 January 2005 6,357 22,892 5,405 723 14,190 49,567Addition from acquisition 0 1,700 0 0 0 1,700

Direct change of equity -75 0 0 0 0 -75

(Credit)/charge in the

income statement -289 -3,706 1,683 23,147 -3,267 17,568

Translation differences 23 0 30 0 0 53

As at 1 January 2006 6,016 20,886 7,118 23,870 10,923 68,813Addition from acquisition 0 11,359 21 2,195 219 13,794

Direct change of equity -242 0 0 0 0 -242

(Credit)/charge in the

income statement -486 19,831 2,136 7,432 12,599 41,512

Translation differences 0 0 -1 0 33 32

As at 31 December 2006 5,288 52,076 9,274 33,497 23,774 123,909

The development of deferred tax asset and liabilities (before the offsetting of balances within the same tax

jurisdiction) is as follows for the fi nancial years 2005 and 2006:

Deferred tax assets and liabilities are offset against each other, if an enforceable right exists to offset actual

tax refund claims against actual tax liabilities and if the deferred income taxes are collected by the same tax

authority.


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The following amounts are carried in the consolidated balance sheet:

31 December

2006 2005 TEUR TEUR

Deferred tax liabilities 10,055 6,724

Deferred tax assets 60,885 29,887

The following amounts are carried in the consolidated balance sheet:

31 December

2006 2005 TEUR TEUR

Deferred tax liabilities which are offset after more than 12 months 26,097 12,603

Deferred tax assets which are offset after more than 12 months 27,296 34,020

22. Non-current employee benefi t obligations

Non-current employee benefi t obligations include the following:

31 December

2006 2005 TEUR TEUR

Provision for pensions 37,913 15,445

Provision for termination benefi ts 21,941 21,588

Provision for anniversary bonuses 6,450 6,042

Provision for social plans and restructuring 14,594 14,400

Total 80,898 57,475

22.1. Pension obligations

The amounts in the balance sheet are broken down as follows:

31 December

2006 2005 TEUR TEUR

Present value of obligations (including plan assets) 108,888 97,185

- fair value of plan assets -100,030 -92,078

Obligation in excess of plan assets 8,858 5,107

Present value of obligations (excluding plan assets) 30,855 12,446

Unrecognised actuarial losses -1,800 -2,108

Liabilities in the balance sheet 37,913 15,445


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The amounts in the income statement are calculated as follows:


2006 2005 TEUR TEUR

Current service cost 3,359 2,066

Interest expense 3,544 3,252

Expected return on plan assets -3,583 -3,759

Actuarial losses recognised during the year, net 2,968 3,236

Recognition service cost – prior periods 0 1,221

Changes in pension plans 4 32

Total 6,292 6,048

Current service costs, past service costs, actuarial losses are recognised in the income statement under staff

costs, the interest expense and return on plan assets in connection with pension obligations under fi nance

expenses and income, net.

Liabilities recognised in the balance sheet developed as follows:

2006 2005 TEUR TEUR

As at 1 January 15,445 14,987Addition from acquisition 22,102 0

Expenses for pensions 6,292 6,048

Employer’s contributions -2,361 -1,947

Amounts paid out -4,255 -3,659


As at 31 December 37,913 15,445

The addition from acquisition recognised in the balance sheet in the fi nancial year 2006 relates to the ac-

quisition of Lindeteves-Jacoberg Ltd., Singapore, in the amount of TEUR 18,235, and of Austrian Energy &

Environment (Australia) Pty. Ltd., Australia, in the amount of TEUR 3,862; this amount was considered in the

completion of the purchase price accounting.

Plan assets developed as follows: 2006 2005

TEUR TEUR

As at 1 January 92,077 88,668Addition from acquisition 3,476 0

Actual return on plan assets 7,928 3,758

Employer’s contributions 2,361 1,947

Amounts paid out -3,101 -2,046

Transfer to the company 141 0

Translation differences -2,852 -249

As at 31 December 100,030 92,078


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The key actuarial assumptions used at the balance sheet date are as following:

2006 2005

Discount rate 3,0 – 5,0 % 4,0 – 4,9 %

Future wage and salary increases 2 – 4 % 0 – 2,0 %

Fluctuation waged workers/salaried employees 0 – 4,5 % 0 – 5,0 %

Return on plan assets 0 – 6,5 % 4,9 %

Pensionable age 60 – 65 years 60 – 65 years

Life expectancy Country-specifi c demographic mortality tables

In the fi nancial year 2006, the company paid out non-recurring pension expenses in the amount of

TEUR 2,048.

22.2. Severance payments

The amounts carried in the balance sheet are broken down as follows:

31 December

2006 2005 TEUR TEUR

Present value of obligations 26,034 27,115

Unrecognised actuarial losses -4,093 -5,527

Liabilities in the balance sheet 21,941 21,588

The amounts for severance payments in the income statements are broken down as follows:


2006 2005 TEUR TEUR

Current service cost 1,317 1,221

Interest expense 1,252 1,074

Actuarial losses recognised during the year, net 32 663

Additional costs through outsorcing 136 0

Total 2,737 2,958

Current service cost and actuarial losses are recognised in the income statement under staff costs, interest

expense in connection with severance payments under fi nance expenses and income, net.

The company recognised TEUR 755 (prior year: TEUR 155) for severance payments in the income state-

ment based on defi ned contribution plans.


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The liabilities recognised in the balance sheet developed as follows:

31 December

2006 2005 TEUR TEUR

As at 1 January 21,588 17,482Addition from acquisition 0 1,711

Expenses for severance payments 2,737 2,958

Amounts paid out -2,551 -328

Translation differences 167 -235

As at 31 December 21,941 21,588

The addition from acquisition recognised in the balance sheet in the fi nancial year 2005 relates to the acqui-

sition of ATB SEVER a.d., Subotica, Serbia, in the amount of TEUR 781.

The key actuarial assumptions used at the balance sheet date are the following:

31 December

2006 2005

Discount rate 3.0 – 5.0 % 4 – 18 %

Future wage and salary increases 2 % 0 – 9 %

Fluctuation of waged workers/salaried employees 0 – 4.5 % 0 – 5 %



22.3. Anniversary Bonuses

The amounts in the income statements are broken down as follows:


2006 2005 TEUR TEUR

Current service cost 319 309

Interest expense 250 251

Actuarial gains (losses) recognised during the year, net -286 104

Additional costs through outsorcing 12 0

Total 295 664

Current service cost and actuarial gains (losses) are recognised in the income statement under staff costs,

interest expense in connection with anniversary bonus obligations under fi nance expenses and income, net.


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The liabilities recognised in the balance sheet developed as follows:

31 December

2006 2005 TEUR TEUR

As at 1 January 6,042 5,451Addition from acquisition 337 16

Expenses for anniversary bonuses 295 664

Amounts paid out -249 -420


As at 31 December 6,450 6,042

The addition from acquisition recognised in the fi nancial year 2006 relates to the acquisition of Lindeteves-

Jacoberg Ltd., Singapore, in the amount of TEUR 337.

The key actuarial assumptions used at the balance sheet date are the following:

2006 2005

Discount rate 3 – 5 % 4 – 18 %

Future wage and salary increases 2 % 0 – 9 %

Fluctuation of waged workers/salaried employees 0 – 4.5 % 0 – 5 %



22.4. Provisions for social plans and restructuring

The provision for social plans and restructuring in the amount of TEUR 14,594 in the fi nancial year 2006

includes a provision for restructuring costs for SCHORCH Elektrische Maschinen und Antriebe GmbH,

Mönchengladbach, Germany, to the amount of TEUR 194 (see Note J.5.1) as well as a provision for re-

structuring costs at BABCOCK POWER ESPAÑA, S.A. (formerly Babcock Borsig España S.A.), Valle de

Trabaga, Spain, to the amount of TEUR 14,400 (see Note J.5.2) resulting from the fi nancial year 2004.

BABCOCK POWER ESPAÑA, S.A. (formerly Babcock Borsig España S.A.), Valle de Trabaga, Spain,

purchased with effect from 1 February 2004, reduced 77 jobs. Provisions for job reduction set up in the

fi nancial year 2004 in the amount of TEUR 14,400 relates to costs for post-employment training courses

and job search in the amount of TEUR 362, staff costs for the employees for the time during retraining in

the amount of TEUR 6,338 and estimated costs for voluntary payment of compensation and redundancy

payment in the amount of TEUR 7,700.


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Provisions Provisions Provisions for Provisions for for impen- for restruc- environmental Other warranties ding losses turing costs1) restoration provisions Total TEUR TEUR TEUR TEUR TEUR TEUR

As at 31 December 2004 36,147 24,227 14,400 0 498 75,272Additions from acquisitions 383 0 6,018 3,269 1,603 11,273

Reclassifi cations 10,411 -38 0 0 0 10,373

Additions 26,004 2,662 1,589 0 3,729 33,984

Utilisation -12,886 -21,578 -1,884 0 -180 -36,528

Reversal unused amounts -16,328 -44 0 0 -1 -16,373

Translation differences 355 0 -434 -267 -130 -476

As at 31 December 2005 44,086 5,229 19,689 3,002 5,519 77,525Additions from acquisitions 13,273 10,889 168 0 2,769 27,099

Reclassifi cations -1,178 378 0 0 -602 -1,402

Additions 14,527 15,541 572 0 5,772 36,412

Utilisation -14,295 -7,701 -1,649 0 -3,131 -26,776

Reversal unused amounts -10,028 -9,932 -4,025 -2,427 -927 -27,339

Translation differences -778 -167 324 265 132 -224

As at 31 December 2006 45,607 14,237 15,079 840 9,532 85,295Thereof current 0 4,959 485 0 1,470 6,914

The non-current provision for restructuring costs is recognised under “non-current employee benefi t obliga-

tions” (cf. Note J.22).

23.1. Provisions for warranties

For project business, provisions for warranties are set up for individual risk upon receipt of a complaint and

investigation of the complaint by quality management.

For the remaining businesses, provisions are set up in relation to revenue, with the extent of the provision

being calculated on the basis of actual warranty claims of the current year.

23.2. Provisions for impending losses/provisions for losses from projects

The determination of provisions from impending losses results from the measurement of confi rmed customer

orders as at 31 December 2006. All orders the manufacture of which has not yet begun and which have

not yet been supplied with materials and for which losses are expected in the future are covered by these

provisions.

23. Provisions

The provisions recognised in the balance sheet as at 31 December 2006 (excluding non-current employee

benefi t obligations) relate primarily to provisions of warranties and impending losses, as well as provisions for

environmental restoration and restructuring costs and can be broken down as follows:

1) cf. Note J.23.3.


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23.3. Current provisions for restructuring and social programmes

The restructuring and social programme which was started at ATB SEVER a.d., Subotica, Serbia, already at the

beginning of 2005 for the adjustment of the number of staff, was partly dissolved in 2006 (cf. Note J.5.1.).

At ATB SELNI SAS, Névèrs, France, a provision in the amount of TEUR 1,589 was set up for expenses and

termination benefi ts in accordance with the social plan in 2005.

At ATB SELNI SAS, Névèrs, France, a provision in the amount of TEUR 485 was set up for expenses and

termination benefi ts in accordance with the social plan.

The provisions for restructuring and social programmes resulting from the acquisition of the Lindeteves-Jaco-

berg-Ltd.-Group in the amount of TEUR 168 were entirely dissolved. A provision for restructuring and social

programmes amounting to TEUR 194 was set up.

23.4. Provision for environmental restoration

For environmental damages at the various locations of ATB SEVER a.d., Subotica, Serbia, which were de-

termined and measured in the course of a due diligence by the expertise of an Austrian expert, a provision

in the amount of TCSD 258,000 (TEUR 3,002) was set up in 2005. In the fi nancial year 2006, TEUR 410

were dissolved due to the disposal of the casting house in Coka, Serbia, in June 2006. Due to its non-current

character, the amount of TEUR 2,017 has been discounted to 30 years using a discount rate of 4 %

24. Financial instruments

24.1. Securities available for sale and fi nancial assets at fair value through profi t or loss

The following amounts were recognised in the income statement (fi nance expenses and income, net):


2006 2005 TEUR TEUR

Sales revenue 13,712 11,007

Derecognition of carrying amounts -11,877 -12,104

Income from securities 4,334 1,716

Total 6,169 619

Since 2005, appreciations and diminutions in value of the available for sale securities have been included in

the balance sheet item “net income recognised directly in equity” instead of the income statement.

24.2. Derivatives

In the reporting period receivables from foreign exchange forward contracts (exchange rate gains) in the

amount of TEUR 963 (prior year: TEUR 277) were recognised. TEUR 963 (prior year TEUR 277) of these

derivative fi nancial instruments is classifi ed as current.


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In the reporting period liabilities from foreign exchange forward contracts (exchange rate losses) in the

amount of TEUR 2,486 (prior year: TEUR 764), from futures in the amount of TEUR 2,486 (prior year

TEUR 764) were recognised. TEUR 2,486 (prior year: TEUR 764) of these derivative fi nancial instruments

is classifi ed as current.

On 27 August 2005, the company signed a loan agreement with Lindeteves-Jacobberg Ltd., Singapore, a

company listed on the Singapore Stock Exchange. This agreement was followed by a supplemental agree-

ment signed on 21 December 2005 (cf. Note 22).

To achieve a simple majority at Lindeteves-Jacoberg Ltd., Singapore, a call option in the form of a subscripti-

on agreement was signed in 2005. The call option, which was issued at the same time the capital increase of

the investor group G 15 Investment Holding Pte Ltd., Singapore, took place, entitled the obligee to purchase

another 75,058,499 shares, which corresponded to an investment of 15.14 %. The exercise price on the

basis of the call option amounted to SGD 0.1658 per share or SGD 0.2. This call option had a maturity up

to three months after the completion of the subscription of shares resulting from the conversion of the loan.

On 31 December 2005, the call option was valued with a carrying value of EUR 0. In March 2006, the call

option was exercised and led to an increase of the investment in Lindeteves-Jacoberg-Ltd.-Group, Singa-

pore, to 45.12 %.

25. Contingent liabilities and other fi nancial commitments

25.1. Contingent liabilities

As at 31 December 2006 the Group had contingent liabilities relating to bank and other guarantees in an

amount of TEUR 406,832 (prior year: TEUR 392,112). Management assumes that no actual liabilities will

arise from them.

In addition, a contingent liability exists in connection with the purchase of an aircraft (purchase price TUSD

22,015 (TEUR 16,139)): A-TEC has committed itself vis-à-vis the fi nancing leasing company GE Lisca AG,

Zurich, Switzerland, to purchase the aircraft at its request at the respective fair value, if the lessee does not

meet the stipulated payment or other obligations.

25.2. Financial commitments

At the end of the fi nancial years 2005 and 2006 there were no fi nancial commitments already existing at the

balance sheet date, but not yet recognised in the balance sheet.

25.3. Other commitments

At the balance sheet date, commitments from the use of rental and leasing obligations not recognised in the

balance sheet are as follows:

31 December

2006 2006 – 2010 thereafter

TEUR TEUR TEUR

Operating rental and lease agreements 4,772 17,920 16,670


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26. Earnings per share

Basic and diluted earnings per share is calculated by dividing the profi t attributable to equity holders of the

Company by the weighted average number of ordinary shares in issue during the year, excluding ordinary

shares purchased by the Company and held as treasury shares (cf. Note J.15).

31 December

2006 2005 TEUR TEUR

Basic and diluted consolidated profi t for the year before loss from

discontinued operations (attributable to equity holders of the parent company) 82,715 34,926

Basic and diluted loss from discontinued operations

(attributable to equity holders of the parent company) -5,529 -1,521

Basic and diluted consolidated profi t for the year

(attributable to the equity holders of the parent company) 77,186 33,405

Weighted average number of ordinary shares for the basic and

diluted earnings per share 5,133 5,000

Consolidated profi t for the year before loss from discontinued operations

(attributable to equity holders of the parent company) per share in EUR 16.11 7.00


(attributable to equity holders of the parent company) per share in EUR -1.08 -0.30

Consolidated profi t for the year per share in EUR 15.04 6.70

27. Cash generated from operations Year ended 31 December

2006 2005 TEUR TEUR

Consolidated profi t after tax 79,525 36,516

Adjustments made for:

Taxes -8,231 4,916

Interest results 13,448 11,272

Depreciation of property, plant and equipment and

amortisation of intangible assets: 31,289 24,346

Amortisation of goodwill 580 0

Reversal of negative goodwill -402 0

Impairment of receivables (non-recurring expenses) 0 3,200

Income from debt forgiveness by banks 0 -8,755

Income from tax reduction 0 -913

Proceeds from the sale of assets -1,308 -1,034

Profi t paid to minorities 0 -110

Increase/decrease in non-current provisions -13,951 3,175

Inventories -44,072 -30,497

Trade and other current receivables -1,827 64,742

Liabilities and provisions, excluding tax provisions 105,330 -110,389

Net cash fl ow from discontinued operations -209 411

Other 0 -816

Cash generated from operations 160,172 -3,936


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28. Related-party transactions

With regard to receivables and payables due to related parties, we refer to Note J.12 and J.17.

Senior Management of A-TEC-Group

The board of management of the Company is assisted in its day-to-day management of the Group by mem-

bers of the board of management (Vorstand) or supervisory boards (Aufsichtsrat) or by managing directors

(Geschäftsführer) of its four industrial business units of the Company (“Senior management”). Besides those

members of the Senior Management, Dr. Mirko Kovats and Dipl.-Ing. Christian Schmidt are active as mem-

bers in the supervisory board of its four industrial business units, except for ATB Austria Antriebstechnik

Aktiengesellschaft, Spielberg, where Dipl.-Ing. Christian Schmidt is a member of the management board and

not part of the supervisory board.

The Senior Management consists of 22 persons as at December 31, 2006 as follows:

1) Ulrike Kovats is the wife of Dr. Mirko Kovats.

Name Area of ResponsibilityDipl.-Ing. (FH) Wilhelm Töpfl ATB Austria Antriebstechnik AG, Spielberg

Dipl.-Ing. (FH) Erwin Fritsch ATB Austria Antriebstechnik AG, Spielberg

Christine Forstner ATB Austria Antriebstechnik AG, Spielberg

Mag. Franz Fehringer ATB Austria Antriebstechnik AG, Spielberg

Helmuth Kosutnik ATB Austria Antriebstechnik AG, Spielberg

Michael Leitner ATB Austria Antriebstechnik AG, Spielberg

Dipl.-Ing. Dr. Matthias Rant ATB Austria Antriebstechnik AG, Spielberg

Dipl.-Ing. Dr. Horst Wiesinger ATB Austria Antriebstechnik AG, Spielberg

Dipl.-Ing. Jürgen Wild Austrian Energy & Environment AG & Co KG, Vienna

Dipl.-Ing. Klaus Zink Austrian Energy & Environment AG & Co KG, Vienna

Dr. Hannes Rosenthaler Austrian Energy & Environment AG & Co KG, Vienna

Dipl.-Ing. Oliver Klitzke Austrian Energy & Environment AG & Co KG, Vienna

Dr. Reinhard Hohlbrugger Montanwerke Brixlegg Aktiengesellschaft, Brixlegg

Dkfm. Dr. Walter Durchschlag Montanwerke Brixlegg Aktiengesellschaft, Brixlegg

Dipl.-Ing. Robert Stibich Montanwerke Brixlegg Aktiengesellschaft, Brixlegg

Otmar Hausberger Montanwerke Brixlegg Aktiengesellschaft, Brixlegg

Werner Knoll Montanwerke Brixlegg Aktiengesellschaft, Brixlegg

Baldur Eibl EMCO MAIER GESELLSCHAFT M.B.H., Hallein

Ulrike Kovats (1 EMCO MAIER GESELLSCHAFT M.B.H., Hallein

Andreas Sommerauer EMCO MAIER GESELLSCHAFT M.B.H., Hallein

Gerhard Glanz EMCO MAIER GESELLSCHAFT M.B.H., Hallein

Mag. Peter Vidounig EMCO MAIER GESELLSCHAFT M.B.H., Hallein

The Group’s divisions have established non-stock based incentive systems for the members of the managing

boards (Vorstand) and the managing directors (Geschäftsführer) of their respective lead companies, which is

based on the achievement of certain fi nancial targets.


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Name Gesellschaft FunktionSupervisory Board

Dkfm. Dr. Mirko Kovats AIRO HandelsgmbH Managing Director

AIRO Hotelbetriebs GmbH Managing Director

AIRO TOWER Immobilienverwaltungs GmbH Managing Director

ARTIS Hotel und Restaurant GmbH Managing Director

Ansaldo Maschinen-, Kraftwerks- und Anlagenbau GmbH Managing Director

AURUM Immobilienverwaltungs AG Chairman of the Supervisory Board

ABACO Immobilienverwaltung GmbH Managing Director

DELOS Bauträger GmbH Managing Director

DELOS Immobilienvermietung GmbH Managing Director

Jet-Invest Anlagenvermietungs GmbH Managing Director

IAEG Industriemaschinen- und Anlagenzubehör-ExportgmbH Managing Director

IAEG Finanzierungsvermittlungs- und BeteiligungsgmbH Limited Partner

M&A Privatbank AG Member of the Supervisory Board

Novamobil Immobilien GmbH Managing Director

PK Aircraft Handels GmbH Managing Director

TECHNO Verwaltungs- und Beteiligungs AG Member of the Supervisory Board

TOSE ImmobilienverwaltungsgmbH Managing Director

TUSASE Beteiligungs GmbH Managing Director

Dipl.-Ing. Christian Schmidt J.E.Loidold Gesellschaft m.b.H. Managing Director

SMC Beratungs- und BeteiligungsgmbH Managing Director

A-EnBW Austria Energie-Vertriebsgesellschaft mbH Managing Director

Supervisory Board Members

KR Freimut Dobretsberger Maraska Handels- und Vertriebsgesellschaft m.b.H. Managing Director

Constantia Corporate Finance AG Member of the Supervisory Board

Dr. Johannes Edelsbacher M.U.S.T. Privatstiftung Member of the Managing Board

Auditor & Partner Treuhand GmbH Managing Director

Burgau Liegenschaftsverwaltungs-GmbH Managing Director

Dr. Edelsbacher Gesellschaft m.b.H. Managing Director

Dr. Edelsbacher & Partner Wirtschaftsprüfung und Steuerberatung GmbH Managing Director

LFB land- und forstwirtschaftliche Betriebs GesmbH Managing Director

Limmert Verwaltungsgesellschaft m.b.H. Managing Director

Mag. Klaus Sernetz VATECH ELIN EBG GmbH Managing Director

VA Technologie AG Chairman of the Managing Board

Former Supervisory Board Members

Ronny Pecik (until 28 September 2006) VICTORY Industriebeteiligung AG Managing Director

Signing authority

Mag. Franz Fehringer Mag. Franz Fehringer Self employed as tax consultant

M.U.S.T. Privatstiftung Managing Director

Additional Information Relating to Members of the Senior Management

The following table sets out the names of all companies and partnerships of which each of the members of the Senior ma-

nagement has been a member of the management board, managing directors or of the supervisory board (excluding direct and

indirect subsidiaries of the company):


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In 2005, the company granted a loan to Jet-Invest Anlagenvermietungs GmbH, Vienna, which is co-owned

by M.U.S.T. Privatstiftung, Vienna, and A-TEC in the amount of TEUR 2,794. The loan is outstanding with

an amount of TEUR 2,599 as at 31 December 2006.

As at 31 December 2006, the Group also has a contingent liability in respect of the fi nance lease obligations

of Jet-Invest Anlagenvermietungs GmbH, Vienna; the Group is obligated to purchase the aircraft from the

leasing company GE Lisca Ag, Zurich, Switzerland, at its market value in case Jet-Invest Anlagenvermietungs

GmbH, Vienna, defaults on its obligations under the lease agreement. The extent of liability totals TEUR

16,139 (prior year: TEUR 16,139).

As at 31 December 2006, the Company shows receivables from RPR Privatstiftung, Vienna, and its related

parties in the amount of TEUR 751. As of 31 December 2005 these receivables amounted to 1,686.

As at 31 December 2005, the company showed receivables from M.U.S.T. Privatstiftung, Vienna, in the

amount of TEUR 392. As of 31 December 2006, no receivables from M.U.S.T Privatstiftung, Vienna, are

outstanding due to offsetting this amount during the fi nancial year 2006.

In addition, the Company granted a loan in the amount of TEUR 27,702 to VICTORY Industriebeteiligung AG,

Vienna, which was outstanding as at 31 December 2005. At the time of the loan VICTORY Industriebeteili-

gung AG, Vienna, was owned by M.U.S.T Privatstiftung, Vienna, and RPR Privatstiftung, Vienna. In 2006 the

company’s rights under the loan were transferred to M.U.S.T Privatstiftung, Vienna, as partial consideration

for the remaining 75 % interest in EMCO STAR ALLIANCE HOLDINDG GmbH, Vienna.

In total, A-TEC charged interest on receivables from related parties in the amount of TEUR 363 (prior year:

1,220) in 2006.

As for other current liabilities, A-TEC has liabilities to J.E. Loidold Privatstiftung, Vienna, and its related par-

ties in the amount of TEUR 66 (prior year: TEUR 0) and to A-TEC Immobilienvermietung Schweiz GmbH,

Switzerland in the amount of TEUR 749 (prior year: 0).

At balance sheet date 31 December 2006 the company has liabilities to M.U.S.T. Privatstiftung, Vienna, and

its related parties in the amount of TEUR 204 (prior year: 20,078) relating to the transfer of shares in EMCO

STAR ALLIANCE Holding GmbH, Vienna.

In total, the company recognised interest on liabilities to related parties in the amount of TEUR 89 (prior year:

277) in 2006.

In addition, a member of the supervisory board provided consulting services in the reporting period in connec-

tion with tax issues as well as accounting issues regarding individual and consolidated fi nancial statements of

A-TEC INDUSTRIES AG, Vienna, for a consideration of TEUR 102 (prior year: TEUR 120).

Acquisitions involving related parties

In 2005, the company granted a loan to VICTORY Industriebeteiligung AG, Vienna, in the amount of TEUR

27,702 that was outstanding as of 31 December 2005. This receivable was ceded to M.U.S.T Privatstiftung,

Vienna, in January 2006, where it was used to offset part of the fi rst tranche of the purchase price for the

remaining share in EMCO STAR ALLIANCE HOLDING GmbH, Vienna, in the amount of TEUR 27,905.

The second part of the tranche was set off against the purchase price of participation certifi cates amounting

to TEUR 31,906. As third part of the tranche, M.U.S.T Privatstiftung, Vienna, has taken over the liability of


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A-TEC for the repurchase of shares in ATB Austria Antriebstechnik AG, Spielberg, in the amount of TEUR

16,496. The remainder of the transferred receivables and payables to an amount of TEUR 43,315 was

offset against the purchase price of EMCO STAR ALLIANCE Holding GmbH, Vienna. At the time of the

loan, VICTORY Industriebeteiligung AG, Vienna, was owned by M.U.S.T. Privatstiftung, Vienna, and RPR

Privatstiftung, Vienna. In the course of 2006 M.U.S.T Privatstiftung, Vienna, sold its shares in VICTORY

Industriebeteiligung AG, Vienna.

In the course of 2006, the company purchased the remainder of the interest of EMCO STAR ALLIANCE Hol-

ding GmbH, Vienna, from M.U.S.T. Privatstiftung, Vienna, at a purchase price of TEUR 26,960 to increase

its interest in EMCO STAR ALLIANCE Holding GmbH, Vienna, to 100 %.

Effective 1 January 2006, THIEN Elektromaschienenbau GmbH & Co, Rankweil, and THIEN Elektromaschi-

nenbau GmbH & Co, Rankweil, were sold by ATB Austria Antriebstechnik Aktiengesellschaft, Spielberg to

A-TEC Immobilienvermietung GmbH, Vienna, at a purchase price of TEUR 2,520.

28.1. Remuneration of managing directors

Total remuneration of managing directors for the year 2006 amounted to TEUR 3,211 (prior year: 2,007).

29. Acquisitions

In case of acquisitions pursuant to IFRS 3, revenues and earnings before tax are not shown for a 12-month

period within the year of fi rst consolidation.

As far as the acquisitions outlined below are concerned, the carrying amounts of the individual, acquired

companies could not be quoted at the date of fi rst consolidation, as none of the companies had applied IFRS

before the acquisition.

29.1. Acquisitions and disposals of companies at A-TEC

In the fi nancial year 2006 there were no acquisitions at the A-TEC level.

However, the company purchased another 4.4 % of minority interests of ATB Austria Antriebstechnik AG,

Spielberg at a purchase price of TEUR 6,280. This corresponds to 395,677 shares.



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The take over of the minority interest is made up as follows:

Financial year

2006 TEUR

1st quarter of 2006 327,622 shares (3.64 %) 5,242

3rd quarter of 2006 4,955 shares (0.06 %) 61

4th quarter of 2006 63,100 shares (0.70 %) 977

395,677 shares (4.40 %) 6,280

The difference between purchase price and minority interest is shown as equity refund in the amount of TEUR

5,993, reducing equity.

A-TEC Immobilienvermietung GmbH, Vienna, does not form part of the Group, due to its operation of fi nan-

cial leasing it is, however, included in the consolidated fi nancial statements as a special purpose entity.

29.2. Acquisitions and disposals of companies in the ATB-Group

29.2.1. Acquisition ATB SEVER a.d., Subotica, Serbia

By purchase agreement dated 31 December 2004 and effective 1 January 2005, SEVER Holding Inter-

national a.d., Subotica, Serbia, was acquired, including its subsidiaries. The Sever-Group was not included

in the consolidated fi nancial statements as at 31 December 2004, as at this time control has not yet been

transferred. The purchase price as per the purchase contract in the amount of TEUR 4,100 was shown in

other non-current assets in 2004.

Effective 1 January 2005 the company for the fi rst time was included in the consolidated fi nancial statements.

The acquired company contributed TEUR 14,379 to revenue and TEUR -2,163 to profi t before tax 2005.

The effect of this acquisition on the fi nancial statements 2005 is as follows:

1 January 2005

2005 TEUR

Purchase price 4,100

Incidental acquisition costs 579

Total purchase price 4,679less:

Assets -17,140

Liabilities 28,367

Goodwill 15,906

The Goodwill relates to the signifi cant synergies, which are expected to arise due to the take over of certain

production capacities within the ATB-Group.

Provisions for closure costs of sites were not required. Provisions for necessary restructuring that was

anounced prior to the purchase date in connection with the acquisition were set up at the time of acquisition.


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The fair value of net assets at the time of acquisition is broken down as follows:

1 January

2005 TEUR

Property-plant and equipment and intangible assets 16,565

Non-current fi nancial assets 202

Non-current receivables 3

Inventories 3,988

Current receivables 6,291

Cash and cash equivalents 106

Non-current borrowings -12,432

Non-current employee benefi t obligations and other non-current liabilities -11,807

Short-term borrowings -4,432

Current liabilities -16,270

Fair value of net assets -17,786Proportionate fair value of net assets -11,227Goodwill 15,906Total purchase price 4,679

29.2.2. Acquisition Lindeteves-Jacoberg Ltd., Singapore

Effective 1 June 2006, ATB Austria Antriebstechnik AG, Spielberg, acquired 51 % of Lindeteves-Jacoberg-

Group, a Singapore Stock Exchange listed company. The ATB-Group initially included Lindeteves-Jacoberg

Ltd. in its consolidated fi nancial statements as of 1 June 2006 (see also F.2.2. Restructuring within the

ATB-Group).

Effective 1 June 2006 the company for the fi rst time has been included in the consolidated fi nancial state-

ments. The acquired business contributed TEUR 69,917 to revenues and TEUR 4,607 to profi t before tax in

2006.


1 June

2006 TEUR


Incidental acquisition costs 1,202

Total purchase price 21,813

less:

Net assets -5,258

Goodwill 16,555


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The goodwill relates to LTJ’s strong position in the global market and the signifi cant synergies expected to

arise after its acquisition by the Group.

Provisions for closure costs of sites were not required. Provisions for necessary restructuring that was an-

nounced prior to the purchase date in connection with the acquisition were set up at the time of acquisition.

The fair value of net assets at time of the acquisition is broken down as follows:

1 June

2006 TEUR

Cash and cash equivalents 4,616

Property, plant and equipment 82,093

Other non-current assets 10,443

Intangible assets 62,596

Inventories 27,935

Receivables 28,622

Long-term borrowings -55,911

Short-term borrowings -70,262

Payables -45,445

Non-current employee benefi t obligations and other non-current liabilities -18,556

Other provisions -13,893

Deferred tax liabilities -1,927

Fair value of net assets 10,311Proportionate fair value of net assets (51 %) 5,258

The intangible assets are broken down as follows:

1 June

2006 TEUR

- Technology 28,800

- Trademarks 23,657

- Customer relationships 7,328

- Software, licenses and other rights 2,186

- Other intangible assets 625

62,596

Comparing the preliminary purchase price accounting of 30 September 2006, which was made public in the pro-

spectus pursuant IAS 34 “interim fi nancial reporting”, with the fi nal calculation of the purchase price accounting,

it can be seen that there have been signifi cant movements between the goodwill and the intangible assets.


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29.3. Acquisitions and disposals of companies in the AE&E-Group

29.3.1. Acquisition AE&E Chennai Works Ltd. (formerly Babcock Borsig Power Chennai Works Ltd.),

Chennai, India, and Intercontinental Development & Engineering AE&E Private Limited (I.D.E.A),

Chennai, India

Furthermore, 100 % of the shares in AE&E Chennai Works Ltd. (formerly Babcock Borsig Power Chennai

Works Ltd.), Chennai, India, and 100 % in I.D.E.A effective 31 December 2004 were acquired. On 1 May

2005 the company acquired all assets and liabilities of I.D.E.A. Due to the takeover of the business line in the

form of an asset deal the purchase method of accounting had to be applied also for the acquisition of I.D.E.A.

The acquired company and the acquired assets were included in the consolidated fi nancial statements for the

fi rst time in 2005, as was the case with AE&E Chenai Works Ltd. (formerly Babcock Borsig Power Chennai

Works Ltd.), Chennai, India. Purchase prices totalled TEUR 6,287 and goodwill amounting to TEUR 3,559

was realised.

Effective 1 January 2005 the companies were included in the consolidated fi nancial statements for the fi rst

time. The acquired companies contributed TEUR 1,944 to the revenue and TEUR -250 to the consolidated

profi t before tax in 2005.

The effect of these acquisitions on the fi nancial statements 2005 is as follows:

1 December

2005 TEUR

Purchase price 200



Assets -2,942

Liabilities 214

Goodwill 3,559

The Goodwill relates to signifi cant synergies, which are expected to arise mainly due to the take over of

specifi c engineering activities within the AE&E-Group.

The fair value of net assets at the time of acquisition can be broken down as follows:

1 December

2005 TEUR


Inventories 133

Cash and cash equivalents 101

Current receivables 14

Current liabilities -214

Fair value of net assets 2,728Goodwill 3,559Purchase price 6,287


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29.3.2. Acquisition Austrian Energy & Environment (Australia) Pty. Ltd., Sydney, Australia

On 14 October 2005 all shares of Austrian Energy & Environment (Australia) Pty. Ltd., Sydney, Australia,

were acquired effective 30 November 2005. The purchase price was TEUR 7,818.

Due to the transaction close to the balance sheet date, the option under IFRS 3 was exercised, i.e. to carry

assets at estimated fair values (“transitional basis”). Transitional goodwill amounted to TEUR 28,867.

In the fi nancial year 2006 the purchase price accounting was completed; the fi nal goodwill amounted to

TEUR 28,362.

Effective 1 December 2005 the company was included in the consolidated fi nancial statements for the fi rst

time. The acquired company contributed TEUR 4,749 to revenue and TEUR 188 to the consolidated profi t

before tax.


1 December

2006 2005

book value of the fi nal fair value of the acquired company acquired company TEUR TEUR

Purchase price 6,728 6,728

Incidental acquisition costs 1,090 1,090

Total purchase price 7,818 7,818less:

Assets -36,478 -39,860

Liabilities 57,527 60,404

Goodwill 28,867 28,362

The assets include receivables owed by Alstom Power Conversion GmbH, Berlin, Germany, in the amount of

TEUR 16,678, which were made due to the purchase agreement. In 2006 the receivables were paid.

The goodwill relates to the strong position of Alstom in the Asian market and the signifi cant synergies ex-

pected to arise after its acquisition by the AE&E-Group.


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The fair value of net assets at the time of acquisition is as follows:

1 December

2005 TEUR

Property, plant and equipment and intangible assets 3,488

Financial assets 12,426

Non-current receivables 1,803

Inventories 677

Current receivables 11,396


Long-term borrowings -11,983

Non-current employee benefi t obligations and other non-current liabilities -712

Current liabilities -47,709

Fair value of net assets -20,544Goodwill 28,362Total purchase price 7,818

29.3.3. Acquisition of Alstom business in Czech Republik and in Germany

The purchase contract for the take over of all assets and liabilities of the Alstom business in the Czech Re-

public and in Germany has been signed on 24 October 2005. The control has been transferred effective on

1 June 2006.

Effective 1 June 2006, the Group acquired all assets and liabilities of the Industrial boiler and plant business

of Alstom Germany and of Alstom Czech Republic and integrated them into existing subsidiaries, namely

AE&E Inova GmbH, Germany, and Austrian Energy & Environment CZ s.r.o., Czech Republic.

As at 1 June 2006 the companies were included in the consolidated fi nancial statements for the fi rst time.

The acquired companies contributed TEUR 164,103 to revenue and TEUR 4,764 to the profi t before tax in

2006.

Due to different perceptions of buyer and vendor concerning the fair value of the assets and liabilities, the

option of applying IFRS 3 was exercised to include assets and liabilities on a transitional basis in the fi nancial

statements. The transitional goodwill of Austrian Energy & Environment CZ s.r.o., Czech Republic amounts

to TEUR 12,426 and of AE&E Inova GmbH, Germany, to TEUR 47,608. The transitional fair value pursuant

IFRS 3.62 and 3.69 was calculated on the basis of an estimate of the company, considering the different

perceptions of buyer and vendor regarding the amount.


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The effect of this acquisition on the fi nancial statements 2006 is as follows (on a transitional basis):

1 June

2006 TEUR

Purchase price 0



Assets -80,368

Liabilities 139,344

Goodwill 60,034

The goodwill relates to the expanded market access of the Group, including the Czech Republic and the

German market as well as expanded access to the Eastern European markets.

Assets and Liabilities arising from the acquisition are as follows:

1 June

2006 TEUR

Property, plant and equipment 668

Inventory and work in progress (net) 1,319

Contract amounts due to/from customers 17,433

Down payments to suppliers 14,910

Trade receivables (net) 33,787

Other accounts receivables (net) 12,251

Fair value of the identifi able assets acquired 80,368

1 June

2006 TEUR

Provisions 12,708

Down payments received 40,291

Trade payables & related accrued charges 79,361

Accrued pensions and severance payments 3,669

Accrued expenses and other payables 3,315

Fair value of the identifi able liabilities acquired 139,344 Fair value of net assets -58,976Goodwill 60,034Total purchase price 1,058

Since the publication of the interim fi nancial report pursuant IAS 34 “interim fi nancial reporting” on 30 Sep-

tember 2006, which was made public in the prospectus on 17 November 2006, the valuation of the fair

values changed due to more precise information in connection with the estimation of the orders. This in turn

led to adaption of the goodwill of TEUR 2,975.


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29.4. Acquisitions of companies in the “Montanwerke Brixlegg Aktiengesellschaft”-Group

(Brixlegg-Group)

In the fi nancial years 2006 and 2005 there were no acquisitions of companies within the Brixlegg-Group.

29.5. Acquisitions of companies in the “EMCO STAR ALLIANCE Holding GmbH”-Group

(EMCO-Group)

In June 2004 the EMCO-Group entered into a lease and purchase agreement with the liquidator of MECOF

SpA, Italy, (which was subsequently renamed into Amec), pursuant to which the Division has been leasing

MECOF’s production assets and staff since 1 July 2005 and it was agreed to puchase MECOF’s business

and related assets on or prior to 31 December 2006.

Effective 31 December 2006, the MECOF SpA, Italy was acquired and instantly included in the consolidated

fi nancial statements. The business relationship – results from the lease and the operations of the leased as-

sets – has already been included in the consolidated fi nancial statements of A-TEC since 1 July 2005.

The acquired company contributed TEUR 0 to the revenue and TEUR 0 to the profi t before tax in 2006.

Due to the transaction close to the balance sheet date, the option under IFRS 3 was exercised, i.e. to carry

assets at estimated fair values (“transitional basis”). Transitional goodwill amounts to TEUR 0.


31 December

2006 TEUR


Lease until the date of purchase -990

Incidental acquisition costs 160


Fair value of the acquired net assets -15,262

Negative goodwill -402

The purchase price concerning the acquisition of the division MECOF S.p.A in the amount of TEUR 8,500

was fi nanced through fi nance lease, the remaining amount was fi nanced through a credit.

Provisions for closure costs of sites were not required.



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The fair value of net assets at the time of acquisition is as follows:

31 December

2006 TEUR

Property, plant and equipment and intangible assets

Trademarks 5,550

Land and buildings 8,500

Technical and equipment 1,266

Other assets 184

Deferred tax liabilities -238

Fair value of net assets 15,262Goodwill 0Total purchase price 15,262

29.6. Business combination involving entities under common control

Effective 31 December 2004, 25 % of the shares in EMCO STAR ALLIANCE Holding GmbH, (now: A-TEC

Mechanical Engineering Holding GmbH), Vienna, with voting rights of 51 % were taken over by A-TEC. The

transfer price for the shares was TEUR 20,000.

Effective 31 December 2004 the company was included in the consolidated fi nancial statements for the fi rst

time. The difference from the assets taken over and the transfer price in the amount of TEUR 20,000 is

shown as equity refund in the amount of TEUR 10,467, reducing equity.

The value of net assets acquired at the time of association is broken down as follows:

31 December

2006 TEUR


Intangible assets 31,229

Financial assets 2,307

Deferred tax assets 3,971

Inventories 35,640

Receivables 43,556


Non-current provisions and liabilities -13,960

Borrowings -51,429

Current provisions and liabilities -33,271

Minorities from the subgroup -289

Fair value of net assets 38,133Thereof acquired net assets 9,533Equity refund 10,467Total transfer price 20,000 Minority interest 28,600


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The transfer price in the amount of TEUR 20,000 was pre-fi nanced by M.U.S.T Privatstiftung. The payment

to M.U.S.T. Privatstiftung, in turn, was carried out in the fi nancial year 2006.

A-TEC acquired the remaining 75 % of M.U.S.T Privatstiftung in two tranches in the fi nancial year 2006. The

total purchase price amounted to TEUR 70,275. The purchase price of the fi rst tranche was paid in cash,

whereas the second tranche in the amount of TEUR 43,315 was settled via the assignment of receivables

and participation certifi cates to VICTORY Industriebeteiligung AG.

The second tranche was made up as follows:


2006 TEUR

Participation certifi cates 31,906

Receivables VICTORY Industriebeteiligung AG 27,905

Total of the transfered assets 59,811Transfer of liabilities from (sale and repurchase agreement of securities) of

M.U.S.T. Privatstiftung to A-TEC -16,496

Fair Value of net assets 43,315

The business combination involving entities under common control of EMCO STAR ALLIANCE Holding

GmbH (now: A-TEC Mechanical Engineering Holding GmbH), Vienna, is explained as a related-party trans-

action (cf. Note J.28).

The difference from the transfer price and the acquired minority interest is shown as equity refund in the

amount of TEUR 37,169, reducing equity. This amount can be broken down as follows:

Financial Year

2006 TEUR

1st tranche 26,960

2nd tranche 43,314

Purchase price 70,274Minority interst -33,105

Equity reduction 37,169



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30. Special purpose entities

A-TEC Immobilienvermietung GmbH, Vienna, (formerly AE & E Immobilienvermietung GmbH, Graz) was esta-

blished to take over the leasing transactions of the Group. The company has entered into leasing agreements

on an offi ce building with a carrying amount of TEUR 12,227 (prior year: TEUR 12,622) and on a plot of

land with a carrying amount of TEUR 1,629 (prior year: TEUR 1,629). The offi ce building and the plot of land

are used by Austrian Energy & Environment AG, Raaba, which also charges the lease payments to A-TEC

Immobilienvermietung GmbH, Vienna.

Likewise, A-TEC Immobilienvermietung GmbH, Vienna, has entered into a leasing agreement on an offi ce

building with a carrying amount TEUR 8,898 (prior year: TEUR 0) and on a plot of land with a carrying amount

of TEUR 1,213 (prior year: TEUR 0). The offi ce building and the plot of land are used by ATB Technologies

GmbH, Lustenau, which also charges the lease payments to A-TEC Immobilienvermietung GmbH, Vienna.

In 2006, the KPS Beteiligungs GmbH, Vienna, acting as a special purpose entity, was included in the con-

solidated fi nancial statements for the fi rst time, due to its activities in the area of fi nancial transactions for

the Group. The fi nancial transactions were eliminated in the course of the consolidation. Except of a liability

to banks in the amount of TEUR 9,500, the company does not contain any further signifi cant balance sheet

and income statements items.

As at 31 December 2006, Magdeburg Werkzeugmaschinen AG, Germany, acting as a special purpose entity,

was included in the consolidated fi nancial statement of the EMCO subgroup. The company carries out pro-

duction activities for the subgroup on a signifi cant scale and has been included in the consolidated fi nancial

statements since it has met the criteria of a special purpose entity.

The effect of this company on the consolidated fi nancial statements is as follows:


2006 2005 TEUR TEUR

Assets 6,129 0

Liabilities 6,276 0

Goodwill 147 0

The goodwill was recorded as impairment in 2006.


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31. Events after the balance sheet date

The following events after the balance sheet date

occurred until the adoption of the consolidated fi nan-

cial statements by the board of management and the

supervisory board:

On 11 December 2006, the Group signed a loan

agreement with Raiffeisenlandesbank Oberöster-

reich Aktiengesellschaft, effective January 2007.

The loan amounts to TEUR 10,000 carrying an

interest rate of 3-Month-Eribor +1 % and a ma-

turity of fi ve years. The loan agreement contains

covenants concerning equity ratio and realisation

of profi t.

In the fi nancial year 2007 the Group increased the

share capital of ATB SELNI SAS, Névèrs, France, in

cash by TEUR 700, following an already completed

cash contribution in December 2006 of TEUR 1,000

at ATB SELNI SAS, Névèrs, France.

Effective 26 February 2007, Babcock Isotron S.A.,

Gijon, Spain was sold to ISASTUR Servicias S.L.,

Spain.

In March 2007, the Group agreed on the acquisition

of 100 % of the interest of Gindre Duchavany S.A.,

France. The effects of this acquisition on the conso-

lidated fi nancial statements can not yet be valued,

as there is not enough information available due to

the antitrust suit. The antitrust suit is expected to

be completed within the next two months, so that

during the second quarter of 2007 the closing can

be carried out.

On 19 April 2007 the supervisory board has decided

– using the authorization which was given to them at

the extraordinary general meeting on 6 November

2006 – to issue up to 800,000 convertible bonds

with a maturity of seven years. These convertible

bonds dispose of a conversion privilege of up to

800,000 shares without a par value of A-TEC IN-

DUSTRIES AG, Vienna. The denomination will be

carried out as follows: The nominal value per bond

will correspond to the value of the initial conversion

price. The owners of the convertible bonds have the

right to call in the convertible bonds for repayment

(lump-sum) after the expiration of fi ve years.

The convertible bonds are exclusively reserved for

existing shareholders of the company and will be

offered for subscription in a non-public Offering. A

trade in subscription rights will not take place.

The subscription ratio is 33:4 (33 shares entitle the

owner to purchase 4 convertible bonds) The subscrip-

tion period starts at 20 April 2007 and ends on 4 May

2007 (including). Convertible bonds, which are not

taken up by the shareholders, shall then be offered to

institutional investors in the course of a bookbuilding

at same conditions in the form of a private placement.

Thereby, the fi nal subscription price, as well as the

nominal amount, the initial conversion price, the price

of repayment, the fi nal interest rate and the fi nal total

of the nominal amount of the convertible bonds will

be fi xed. The fi nal characteristics of the convertible

bonds are going to be made public via electronic me-

dia pursuant § 48d BörseG and are expected to be

published on 5 May 2007 in the Amtsblatt zur Wiener

Zeitung pursuant § 174/2 AktG.

Wien, am 20. April 2007

signed: signed:

Dkfm. Dr. Mirko Kovats DI Christian Schmidt

CEO Management Board


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Investments in fully consolidated and unconsolidated companies

Company Share InvestmentAE&E-Group

Austrian Energy & Environment AG, Vienna 100,00 % direct

Austrian Energy & Environment AG & Co KG, Raaba 100,00 % indirect

AE Energietechnik GmbH, Raaba 100,00 % indirect

AE&E Polska Sp. z o.o., Warsaw, Poland 100,00 % indirect

Austrian Energy & Environment Deutschland GmbH, Bad Homburg, Germany 100,00 % indirect

AE&E Shanghai Engineering and Consulting Co. Ltd., Shanghai, People’s Republic of China 100,00 % indirect

Austrian Energy & Environment CZ s.r.o., Brno, Czech Republic 100,00 % indirect

Babcock Power España S.A., Valle de Trabaga, Spain 100,00 % indirect

Duro Dakovic TEP d.d., Slavonski Brod, Croatia 100,00 % indirect

Inova France SA, Rueil-Malmaison, France 100,00 % indirect

Nihon de Roll Japan Ltd., Osaka, Japan 100,00 % indirect

Norsk Inova AS, Notodden, Norway 100,00 % indirect

Socrit S.A., Portes-lès-Valence, France 100,00 % indirect

Svenska Von Roll AB, Täby, Sweden 100,00 % indirect

Von Roll AE&E Inc., Norcross, USA 100,00 % indirect

Von Roll Inova Holding AG, Zürich, Switzerland 100,00 % indirect

Von Roll Inova CR s.r.o, Praha, Czech Republic 100,00 % indirect

Von Roll Inova GmbH, Frankfurt am Main, Germany 100,00 % indirect

Von Roll Umwelttechnik AG, Zürich, Switzerland 100,00 % indirect

AE & E Chennai Works Ltd., Chennai, India 100,00 % indirect

Intercontinental Development & Engineering AE&E Private Limited (I.D.E.A), Chennai, India 100,00 % indirect

Babcock Montajes S.A., Erandio, Spain 100,00 % indirect

Babcock Isotron S.A., Gijon, Spain 100,00 % indirect

AE&E Thailand Ltd., Thailand 100,00 % indirect

Austrian Energy & Environment (Australia) Pty. Ltd., Sydney, Australia 100,00 % indirect

ATB-Group

ATB Austria Antriebstechnik Aktiengesellschaft, Spielberg 90,02 % direct

ATB BENELUX B.V., Apeldoorn, Netherlands 90,02 % indirect

ATB COMPONENTS s.r.o., Ostrava-Radvanice, Czech Republic 90,02 % indirect

ATB France S.A.R.L., Gonesse, France 90,02 % indirect

ATB Motorentechnik (Asia) Pte Ltd., Singapore 84,62 % indirect

ATB Antriebstechnik GmbH, Welzheim, Germany 84,62 % indirect

ATB Motorentechnik GmbH, Nordenham, Germany 84,62 % indirect

ATB SELNI SAS, Nevers, France 90,02 % indirect

ATB MORLEY LIMITED, Leeds, Great Britain 90,02 % indirect

ATB Technologies GmbH, Lustenau (formerly “THIEN” E-Motoren GmbH, Rankweil) 90,02 % indirect

ATB SEVER a.d., Subotica, Serbia 63,28 % indirect

ATB Motors (Shanghai) Co. Ltd., Shanghai, People’s Republic of China 90,02 % indirect

ATB Schweiz AG, Lenzburg, Switzerland 89,30 % indirect

Lindeteves-Jacoberg Ltd., Singapore 53,08 % indirect

SCHORCH Elektrische Maschinen und Antriebe GmbH, Mönchengladbach, Germany 53,08 % indirect

Fabryka Silnikow Elektrycznych Tamel SA, Tarnow, Poland 53,08 % indirect

Brook Crompton Western Electric Motor (Dalian) Corporation Ltd., Dalian, People’s Republic of China 53,08 % indirect

Brook Motors Ltd., Huddersfi eld, Great Britain 53,08 % indirect

Brook Crompton B.V., Breda, Netherlands 53,08 % indirect

Brook Crompton Motor USA Inc., Arlington Heights, USA 53,08 % indirect

Brook Crompton Ltd., Toronto, Canada 53,08 % indirect

The following companies were included in the consolidated fi nancial statements as at 2006:


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Western Electric New Zealand, Aukland, New Zealand 53,08 % indirect

Western Electric Australia Pte Ltd., Granville, Australia 53,08 % indirect

Linberg Philippines Inc., Philippines 53,08 % indirect

Lindeteves Engineering Pte Ltd., Singapore 53,08 % indirect

Western Electric Pacifi c Ltd., Hongkong, People’s Republic of China 53,08 % indirect

Western Electric Asia Pte. Ltd., Singapore 53,08 % indirect

Lindeteves Marketing Services Pte Ltd. (in Liquidation), Singapore 53,08 % indirect

Linberg Sdn Bhd, Malaysia 53,08 % indirect

Lindeteves-Jacoberg Holding GmbH, Mönchengladbach, Germany 53,08 % indirect

Lindeteves-Jacoberg Trading Sdn Bhd (in Liquidation), Singapore 53,08 % indirect

WE Motor Sdn Bhd, Malaysia 53,08 % indirect

Brook Crompton France SA (in Liquidation), Paris, France 53,08 % indirect

Brook Crompton Germany GmbH (in Liquidation), Unterföhring, Germany 53,08 % indirect

Lindeteves-Jacoberg Malaysia Sdn Bhd, Malaysia 53,08 % indirect

Brook Crompton International Pte Ltd. (in Liquidation), Singapore 53,08 % indirect

Brook Crompton Greaves Ltd., Maharashtra, India 53,08 % indirect

ATB Austria Antriebstechnik Vertriebsgesellschaft mbH, Welzheim, Germany was neither included in the consolidated fi nancial

statements of 2005 nor in 2006 for reasons of immateriality. Moreover, in the fi nancial year 2005 ATB Schweiz AG, Lenzburg, and

in the fi nancial year 2006 ATB Motorenwerke GmbH, Spielberg close to Knittelfeld, Brook Crompton Germany GmbH (in liquida-

tion), Unterföhring, Germany, Brook Crompton France SA, Paris, France, and Brook Crompton International Pte Ltd., Singapore,

were not included in the consolidated fi nancial statements as they did not have any operational business activities at that time.

Montanwerke-Group

Montanwerke Brixlegg Aktiengesellschaft, Brixlegg 91,66 % direct

Kupferhütte Kovohuty a.s., Krompachy, Slowakia 91,39 % indirect

Montanwerke Brixlegg Wasserkraftwerk Alpbach Ges.m.b.H., Salzburg-Aigen 79,81 % indirect

Montanwerke Brixlegg Wasserkraftwerk Reith Ges.m.b.H., Salzburg-Aigen 82,98 % indirect

EMCO-Group

EMCO STAR ALLIANCE Holding AG, Vienna 100,00 % direct

Emco Famup S.r.l., San Quirino, Italy 100,00 % indirect

Emco Maier Corporation-USA, Ohio, USA 100,00 % indirect

EMCO MAIER GESELLSCHAFT M.B.H., Hallein 99,01 % indirect

Emco Maier GmbH & Co. KG, Pleidelsheim, Germany 100,00 % indirect

Emco Maier GmbH, Traunstein, Germany 100,00 % indirect

INTOS Zebrak spol. s r.o., Zebrak, Czech Republic 100,00 % indirect

MEXPOL Werkzeugmaschinen GmbH, Hilden, Germany 60,00 % indirect

EMCO Mecof Srl, Belforte, Italy 100,00 % indirect

EMCO Italia Srl., Legnano, Italy 100,00 % indirect

“SCRAPCO” Metallhandels GmbH in Liquidation, Vienna was neither included in the consolidated fi nancial statements 2005 nor

in 2006 for reasons of immateriality.

A-TEC-Group Commodities West Rohstoffhandel GmbH, Vienna 100,00 % direct

i.Dream Media Services GmbH, Vienna 90,00 % direct

PK Aircraft Handels GmbH, Vienna 100,00 % direct

A-TEC POWER PLANT SYSTEMS AG, Vienna 93,10 % direct

Special purpose entities A-TEC Immobilienvermietung GmbH, Vienna 0,00 % direct

KPS Beteiligungs GmbH, Vienna 0,00 % direct

Magdeburg Werkzeugmaschinen AG, Magdeburg, Germany 15,00 % indirect


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Development of acquisition and production costs

Reclassifi ca-tions EMCO

TEURAdditions1)

TEUR

Translation differences

TEUR

Changes in consolidation

TEUR

Balance as at 1/1/2006

TEUR

I. Intangible assets1. Goodwill 86,750 0 76,085 537 0

2. Concessions, industrial property and similar

rights and assets, and licences in such rights and assets 14,771 0 65,588 -85 7,536

3. Capitalised development costs 19,548 1,933 9,166 -16 656

4. Intangible assets from fi nance leases 64 0 0 0 0

5. Prepayments on intangible assets 3) 100 0 308 0 0

121,233 1,933 151,147 436 8,192 II. Property, plant and equipment

1. Land, similar rights and buildings including buildings

on leasehold land 217,996 0 8,612 3,130 52,902

2. Land, similar rights and buildings including buildings

on leasehold land from fi nance leases 17,527 340 18,383 0 0

3. Technical equipment and machinery 235,758 0 24,413 3,531 124,691

4. Technical equipment and machinery from fi nance leases 2,529 232 1,283 46 35,614

5. Other equipment, factory and offi ce equipment 38,363 0 5,395 -204 14,135

6. Other equipment, factory and offi ce equipment from

fi nance leases 2,553 104 757 19 -376

7. Prepayments and construction in progress 3) 2,710 0 2,001 1 7,456

517,436 676 60,844 6,523 234,422

Total 638,669 2,609 211,991 6,959 242,614

A-TEC INDUSTRIES AG, Vienna Movement in intangible assets and property, plant and equipment as at 31 December 2006

1) The acquisition illustrated in Note J.29.5. is shown as an addition in the column additions, as the acquiring company has already been consolidated in the fi nancial year 2005. At this time, the assets have already been used under a rental agreement.

2) Additions are included in the position restructuring income and non-recurring income. 3) The prepayments and construction in progress are shown in the balance sheet item “other non-current assets”.


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Accumulated amortisation/ depreciation Carrying amounts as at Amortisation/

depreciation current year

TEURDisposals

TEURReclassifi cations

TEUR


TEUR


TEUR31/12/2006

TEUR31/12/2005

TEUR

Write-up current year 2)

TEUR

244 0 163,128 580 162,548 86,750 580 0

513 191 87,488 12,235 75,253 5,762 3,436 787

1,058 0 30,229 12,148 18,081 12,656 3,803 0

0 0 64 64 0 12 2 0

100 0 308 0 308 101 0 0

1,915 191 281,217 25,027 256,190 105,281 7,821 787

3,781 263 279,122 146,535 132,587 97,640 6,545 5

0 0 36,250 1,548 34,702 35,221 606 0

21,215 472 367,650 293,258 74,392 16,554 12,671 494

421 0 39,283 20,948 18,335 1,985 2,590 0

2,429 -164 55,096 45,371 9,725 6,266 2,398 0

145 -27 2,885 923 1,962 2,041 524 0

2,070 -638 9,460 0 9,460 2,711 0 0

30,061 -94 789,746 508,583 281,163 162,418 25,334 499 31,976 97 1,070,963 533,610 537,353 267,699 33,155 1,286


Global Reports LLC

We have audited the consolidated fi nancial state-

ments of A-TEC INDUSTRIES AG, Vienna, including

the accounting system, for the fi nancial year from

January 1 to December 31, 2006. The Company’s

management is responsible for the accounting sy-

stem, the preparation and content of the consolida-

ted fi nancial statements in accordance with Inter-

national Financial Reporting Standards as adopted

by the EU and the supplementary regulations of the

Austrian Commercial Code applicable pursuant to

Section 245a HGB, as well as for the preparation

of the management report for the group in accor-

dance with Austrian regulations. Our responsibility is

to express an opinion on these consolidated fi nancial

statements based on our audit and to state whether

the management report for the group corresponds

with the consolidated fi nancial statements.

We conducted our audit in accordance with laws and

regulations applicable in Austria and Austrian Stan-

dards on Auditing. Those standards require that we

plan and perform the audit to obtain reasonable assu-

rance whether the consolidated fi nancial statements

are free from material misstatement and whether

we can state that the management report for the

group corresponds with the consolidated fi nancial

statements. In determining the audit procedures we

considered our knowledge of the business, the eco-

nomic and legal environment of the group as well as

the expected occurrence of errors. An audit involves

procedures to obtain evidence about amounts and

other disclosures in the accounting system and in the

consolidated fi nancial statements predominantly on a

sample basis. An audit also includes assessing the

accounting principles used and signifi cant estimates

made by management as well as evaluating the ove-

rall fi nancial statement presentation. We believe that

our audit provides a reasonable basis for our opinion.

Our audit did not give rise to any objections. In our

opinion, which is based on the results of our audit,

the consolidated fi nancial statements are in accor-

dance with legal requirements and present fairly,

in all material respects, the fi nancial position of the

group as of December 31, 2006 and the results of

its operations for the fi nancial year from January 1 to

December 31, 2006 in accordance with International

Financial Reporting Standards as adopted by the EU.

The management report for the group corresponds

with the consolidated fi nancial statements.

Auditor’s report

Wien, den 20. April 2007

PwC Wirtschaftsprüfung AG

Wirtschaftsprüfungs- und

Steuerberatungsgesellschaft

signed:

Christine Catasta

Austrian Certifi ed Public Accountant

Disclosure, publication and duplication of the fi nancial statements together with the auditor’s report according to

Section 281 (2) HGB in a form not in accordance with statutory requirements and differing from the version au-

dited by us is not permitted. Reference to our audit may not be made without prior written permission from us.

We draw attention to the fact that the English translation of these consolidated fi nancial statements of A-TEC

INDUSTRIES AG as at 31 December 2006 prepared in accordance with IFRS as adopted by the EU and of

this auditor’s report is presented for the convenience of the reader only and that the German wording is the

only legally binding version.


Global Reports LLC

Imprint

Published by:

A-TEC Industries AG

www.a-tecindustries.com

This annual report is available for download at www.a-tecindustries.com.

Contacts

Information resources

A-TEC INDUSTRIES AG Wächtergasse 1

1010 Vienna, Austria

Phone: +43 (1) 22760

Fax: +43 (1) 22760 -160

E-Mail: offi [email protected]


Austrian Energy & Environment AGRenngasse 6 – 8


Phone: +43 (316) 501- 0

Fax: +43 (316) 501- 0

E-Mail: [email protected]

www.aee-group.com

ATB Austria Antriebstechnik AGG.-Bauknecht-Straße 1

8724 Spielberg, Austria

Phone: +43 (3577) 757- 0

Fax: +43 (3577) 757-182


www.atb-motors.com

EMCO Maier GmbHSalzburger Straße 80

5400 Hallein, Austria

Phone: +43 (6245) 869 - 65

Fax: +43 (6245) 869 - 65


www.emco.at

Montanwerke Brixlegg AktiengesellschaftWerkstraße 1–3

6230 Brixlegg, Austria

Phone: +43 (5337) 6151

Fax: +43 (5337) 6151-102


www.montanwerke-brixlegg.com

Editorial consultants:

Pleon Publico Public Relations & Lobbying

www.pleon-publico.at

Concept:

section.d

www.sectiond.at

Graphic design:

OPEN communications

www.open.co.at


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A-TEC INDUSTRIES AG Wächtergasse 1


Phone: +43 (1) 22760

Fax: +43 (1) 22760 -160



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Annual Report 2006 - Morningstar, Inc.

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Transcript of Annual Report 2006 - Morningstar, Inc.