ANNUAL REPORT 2011 - Standardkessel Baumgarte...Standardkessel Power Systems Holding GmbH Baldusstrasse 13 47138 Duisburg / Germany Phone: +49 (0) 203-452-0 Fax: +49 (0) 203-452-935

Standardkessel Power Systems

Holding GmbH

Baldusstrasse 13

47138 Duisburg / Germany

Phone: +49 (0) 203-452-0

Fax: +49 (0) 203-452-935

www.standardkessel.de

www.baumgarte.de

ANNUAL REPORT 2011

contents

1 company profile 04

core competence 06

editorial 08

2 products and services 10

plants and components 12

service 20

contracting 26

3 group management report 30

4 annual financial statement 40

consolidated balance sheet 42

consolidated statement of comprehensive income 44

consolidated cash flow statement 45

consolidated statement of changes in group equity 46

group notes 48

order intake 150.5

sales 163.1

order backlog 213.4

earnings before tax 6.4

employees 275

equity 28.7

cash & cash equivalents 85.9

Key figures 2011

3

standardkessel baumgarte holding gmbh

standardkessel gmbh

baumgarte boiler systems gmbh

standardkessel baumgarte service holding gmbh

standardkessel baumgarte service gmbh

emc germany gmbh

environment & power company ltd.

standardkessel baumgarte

contracting gmbh

uK bioenergy ltd.

plants and components contractingservice

standardKesselpower systems holding gmbh

figures in million euros

2 3 4

company profile

ideas full of energy.with more than 160 years of eXperience.

1 – company profile

core competence

6

core competence

in a world with a growing demand for energy, the need to use energy resources as

efficiently as possible is increasing. as a result, our expertise in the thermal recycling

of a wide range of fuels is more in demand than ever. energy supply com panies,

municipalities, public utilities and industrial companies have been putting their trust in

the experience we have gained during the more than 160 years of history of standard-

kessel and baumgarte. they know: we understand our business. whether developing

customised energy concepts, realising complex and sophisticated turnkey plants,

supplying superior quality components or providing first-class service – our solutions

are backed 100% by ideas full of energy.

in conjunction with the debt crisis, which led to a slowdown in project

financing, the nuclear phaseout caused uncertainty on the markets

and consequently resulted in a decline in the awarding of contracts

for new construction projects in the financial year 2011. despite these

conditions, the standardkessel baumgarte group succeeded in re cording

a satisfactory intake of new orders due to its broad range of products

and services.

in light of the outdated and ageing fleet of power plants, a trend

towards decentralised energy production and an increase in waste in-

cineration, we expect a growing demand for our products in europe

in the medium term, and view our company group as being in an

excellent strategic position.

the plants and components division offers systems for recovering energy

from biomass, residues, waste heat downstream of gas turbines and

primary fuels, with a regional concentration on europe.

the service division provides numerous services for power plants, waste

incineration stations and industrial plants, beginning with intelligent

engineering aimed at modernisation as well as plant and operational

optimisation, and extending to assembly, installation and commissioning

up to maintenance and complete plant management.

the contracting division offers the complete design, planning and co-

ordination of energy and power generation projects from a single source.

the division provides services spanning project identification, project

development and realisation through to operation of the power genera-

tion plant and an equity interest. our customers can concentrate on their

core business, easing their balance sheets and save costs by outsourcing.

as a partner who can simultaneously play the role of contractor, plant

and system supplier and operator, we can significantly help reduce the

number of interfaces.

the standardkessel baumgarte group expects continued positive business

development in the 2012 and 2013 financial years. the market environ-

ment in the plants and components division offers excellent conditions

for growth and expansion. we anticipate further growth in the service

division, and expect that our contracting division will soon be providing

positive momentum for the entire group.

successful year despite uncertain marKets.

1 – company profile

editorial

Filip Ackerman, Jörg Klasen, Lutz Reinery (from left to right)

in 2011, the standardkessel baumgarte group continued its positive development

of the previous year. the group received orders in the amount of eur 150.5 million.

with 275 employees, the group achieved sales totalling eur 163.1 million in the

re porting year, thus realising pre-tax earnings of eur 6.4 million. at the balance sheet

date, the debt-free group had liquid assets amounting to eur 85.9 million.

economic equity was eur 28.7 million, with an equity value of 28.7%.

8 9

1 3 4

products and services

there are many ways to generate heat, steam and electricity from a wide variety of

fuels. at standardkessel baumgarte, we know what they are. and more importantly:

we specialise in them. and that's exactly why you can profit from our expertise.

because we bring our unic and wide range of process know-how into every

pro ject – no matter which fuel it involves.

fueled by the passionto create perfect solutions.

2 – products and services

plants and components


12

Household, Industrial and Commercial Waste

the thorough, sustainable and environmentally-friendly disposal and

recycling of household waste and industrial waste is a global challenge.

we meet it with state-of-the-art plant technology.

Refuse Derived Fuels

the generation of refused derived fuels (rdfs) from waste is an import-

ant factor in the closed loop recycling economy. rdfs are used in power

plants for generating municipal energy and in industrial power plants

for meeting the demand for process energy.

Solid Industrial Residues,

Liquid and Gaseous Industrial Residues

the worldwide production of consumer goods is steadily increasing. the

industrial production residues arising from this can be used as alternative

fuels for generating energy. green and efficient.

Waste Wood, Wood Residues, Fresh Wood, Forest Waste,

Tree Prunings, Peat, Bark

wood of all types has always been used to generate heat and energy.

since the enactment of the german renewable energy sources act

(eeg), wood as a fuel has even been becoming increasingly important

as an eco-friendly source of energy in germany, and, due to similar

legis lation, in europe and across the entire world as well. the leading

european pioneer in this segment: standardkessel baumgarte.

Olive Waste, Rice Husks, Other Biogenic Residues

of course, along with wood, when it comes to eco-friendly co2-neu-

tral energy recovery, all other types of biogenic energy sources are

in demand, too.

Gas Turbine Exhaust Gas

heat recovery boilers downstream of gas turbines are important

process units for the efficient utilisation of energy arising from gas and

steam turbine processes. heat recovery boilers use the gas turbine waste

to generate steam, boost the overall efficiency of the system, and to

optimise the control characteristics as well.

Waste Heat and Exhaust Gases from Industrial Processes

waste air and exhaust gases generated during industrial processes

can potentially be used as high-energy heat sources. for example, via

heat recovery boiler systems placed downstream of the processes,

which convert the energy contained in the waste air and exhaust gas

into process steam for generating electricity or hot water.

Natural Gas, Heavy Fuel Oil, Light Fuel Oil

despite mounting energy and fuel costs worldwide, gas and oil are

still in great demand as fuels. the benefits of gas and oil include high

operational reliability and important characteristics such as quick-start

properties and load change rates.

Hard Coal, Brown Coal Briquettes, Brown Coal Dust

price stability and supply reliability are just two of the important factors

that make coal a suitable alternative fuel to natural gas and oil.

delivered from duisburg and bielefeld. in operation throughout the world: our plant and system solutions.



14 15

1 moscow, russia

energy source: household waste

2 bernburg, germany

energy source: refuse derived fuel

3 weener, germany

energy source: refuse derived fuel

4 tiefstack, germany

energy source: gt waste gas, natural gas

5 twence, netherlands

energy source: waste wood, wood residue

6 eberswalde, germany

energy source: fresh wood

7 dunkirk, france

energy source: gt waste gas, blast furnace gas,

coke oven gas and natural gas

8 varel, germany

energy source: gt waste gas, natural gas

9 Jülich, germany

energy source: brown coal, hard coal

10 allington, united Kingdom

energy source: municipal, household and

industrial waste

1

3

5

7

9

2

4

6

8

10

we offer customised technical solutions not only as a plant engineering and construction company– but also as an epcm contractor.

does your company require engineering and project management expertise needed

to erect, retrofit or modernise a power plant? or do you need additional capacities

right now? we have just the right solution for you: engineering, procurement and

construction management (epcm). we manage the entire project on your behalf –

without necessarily having to be a supplier ourselves.

a current example of this type of partnership is the modernisation of

the power plant operated by rwe in lingen, germany. on the basis of

the approval documents, standardkessel baumgarte first planned and

de veloped the overall process engineering and layout planning. after

extensive and close coordination and consultation with rwe, we then

prepared the tender documents for the external contracting of individual

lots. next step: the technical coordination and scheduling of the contract

award process and subsequent implementation of the detail engineering

by the selected suppliers in line with the customer’s specifications.

at the construction site, standardkessel baumgarte then assumed the

construction and commissioning management, supervising the installation

and start-up activities and supporting rwe during the inspection and

acceptance of the individual work and services performed by the various

subcontractors. conclusion: with standardkessel baumgarte as their

“extended right arm”, customers have an experienced planner and

project manager on their side.

Description of Project

rwe power ag operates two natural gas-fired combined cycle units

with a capacity of 410 mw at the emsland location in lingen. another

power plant unit, which was constructed as a combined gas and steam

cycle plant with an electric capacity of approximately 875 mw, went

into commercial operation in september 2010. due to the age of the

existing upstream gas turbines in the combined cycle units, they were

replaced by new gas turbines and further measures were taken to

modernise the existing plant.

The main tasks and phases of the project included the following:

• four gas turbines

• construction work such as foundations, supports, buildings and

enclosures

• transformers

• bypass stacks

• auxiliary air fans

• flue gas dampers for switchover in bypass operation

• integration of the flue gas ducts into the existing plant,

including the necessary modification measures

• infrastructure integration

• process instrumentation and control engineering

• electrical engineering

16 17

» from the planning stage up

to realisation, we were com-

pletely satisfied throughout

the entire proJect«

» with regard to building the new upstream gas turbines,

we decided to award contracts on a lot-by-lot basis. since

we did not have the available capacities required to imple-

ment the project ourselves, we were looking for an expert

partner who could realise the modernisation of the power

plant without acting as a supplier at the same time.

standardkessel baumgarte was just the right choice for us.

under the general management of rwe technology, the

job involved the basic engineering, process technology

design, preparation of the tender documents, support in

selecting and acquiring the individual sub-contractors as

well as technical project support all the way through to the

initial commissioning. this type of project management and

implementation pays off for us. standardkessel baumgarte

did everything in line with our specifications – to the

complete satisfaction of rwe.«

dr michael fübi

member of the management board, rwe technology gmbh, essen, germany

Emsland Gas Power Plant, Lingen, Germany

number of gas turbines 4

electrical power output per gt 58 mw

exhaust gas emission per gt 168.6 kg/s

exhaust gas temperature at gt 429 °c

recommissioned in 2012

18



building a plantis one thing. Keepingit up and running isanother of our specialities.

the efficiency of a power plant starts with the right engineering and ends with the

successful handover. because smooth and fault-free operation is absolutely essential.

that’s exactly what we focus on. with a broad range of services – from commissio-

ning and optimisation up to complete plant operation.


service

service

20

Engineering

we define tasks, prepare plant status reports,

evaluate measurements and measurement

protocols, recommend measures, and offer

planning and implementation engineering

as well as quality assurance services.

Modernisation

what options are there for modernising your

plant? we take an inventory of the current

status, prepare a list of measures and imple-

ment the modernisation plan as well.

Construction and Assembly

our scope of services includes taking stock of

the current status, preparing a list of measures

for the various modernisation options and

implementing the modernisation plan.

Commissioning

we perform functional checks, calibrations

and performance tests for the individual units,

conduct overall functional tests, pre-pare and

execute the trial operation – and subsequently

provide the performance record.

Maintenance

maintenance includes annual plant audits,

repairs, component optimisation and spare

parts management.

Plant Optimisation

we identify any need for optimisation with

regard to availability, emissions, operating

costs, efficiency, etc.

Plant Operation

we operate the complete plant on your be half.

after all, our service knows no bounds.

service Knows no bounds.even if we did not build the plant.

22 23

christian fleing, dipl.-ing. (graduate engineer)

head of combustion test department

deutsches Zentrum für luft- und raumfahrt e. v.

» with standardKessel

baumgarte service,

we found Just the

right partner.«


service

Air Preheater for DLR Test Facility, Cologne, Germany

medium compressed air

max. pressure 41 bar

max. temperature before air preheating 30 °c

max. temperature after air preheating 730 °c

max. throughput rate 40 kg/s

commissioned in 2011

» conventional gas and steam power plants will continue

to maintain a large share in the comprehensive energy

supply in the future. under these circumstances, it will

become increasingly important to compensate for the out-

put fluctuations of renewable energy sources. managing

and handling these quick load changes puts great demands

on the combustion systems. to test and further develop

these systems under realistic conditions, the existing test

facility at the dlr in cologne, germany, has been expanded.

standardkessel baumgarte service developed, manufac-

tured and installed the air preheater for the facility. since

october 2011, the world’s leading state-of-the-art and

high-perform-ance air preheater has been supplying valu-

able research data for the trial operation of combustion

chambers. the natural gas-fired combustion chamber heats

up the compressed air at 41 bar to a temperature of 730 °c.

standardkessel baumgarte service increased the previous

throughput rate of 30 kg/s to 70 kg/s. when selecting a

supplier for the air preheater for the dlr, it was important

to find a partner capable of meeting the complex require-

ments in an efficient and independent manner. standard-

kessel baumgarte service has just the know-how it takes.«

24


contracting

we design and plan energy concepts for the future. true to the motto: build, operate and own.

does your company need large amounts of energy? for example in the form of

electricity or process steam or to supply heat? good reasons to decide for our sbc

contracting model. to secure your independent energy supply.

contracting

26

contracting: your declaration of independence when it comes to your energy supply.

the long-term availability of fuel is essential

to your success. after all, it is the largest cost

element in the operation of any power plant.

long-term delivery contracts with excellent

partners such as local municipalities, long-term

leases on cultivation areas for renewable fuels,

and participation in forestry opera tions – these

are just some of the ways to secure the avai-

lability of fuel for years to come.

with standardkessel baumgarte contracting,

you have a partner that has the necessary

technology, engineering, business and organi-

sational know-how. working together with

you, we can develop an economically viable,

sustainable project. we start with feasibility

analyses, engineering and operator models,

move on to financing, approval pro cedures and

construction, and then con tinue with opera-

tional management and mainten ance. secure

your long-term energy supply build on the

experience of our experts.

if you want to secure your energy supply and keep energy, operation and main-

tenance costs manageable and predictable, you need to explore new paths.

28 29

1 42

group management report

1. Successful year despite uncertain markets due to nuclear phase-out

the standardkessel baumgarte group continued in 2011 the positive development of the previous

year. order intake of the group amounted to eur 150.5 million. the group realised sales revenues

of eur 163.1 million in the reporting period with a work force of 275, and achieved a profit before

tax of eur 6.4 million. the unindebted group had liquid funds at the balance sheet date of eur 85.9

million. economic equity was eur 28.7 million with an equity ratio of 28.7%.

together with the debt crisis, which led to restraint in project financing, uncertainty in the german

market as a result of uncertainty due to the nuclear phase-out caused a decline in the awarding

of orders for new construction projects in the past financial year. nevertheless, order intake of the

standardkessel baumgarte group was satisfactory owing to its broad-based product portfolio.

in the medium term, we anticipate a growth in demand for our products in europe due to the

outdated power plants, a trend towards distributed energy generation and an increase in waste

incineration, and believe our group of companies is strategically very well positioned.

the Plants and Components division offers systems to recover energy from biomass, residues,

waste heat downstream of gas turbines and primary fuels with a regional concentration on europe.

the european market for power plants using solid biomass continues to benefit from the political

parameters and support mechanisms. biomass is traditionally one of the key mainstays in the

provision of renewable energies in germany and europe. due to its ability to cover the base load

capacity, biomass is very attractive for the production of power. exclusively converting biogenic solid

fuels into electric power without simultaneously using the heat in a co-generation process is not as

a rule economically viable. the amendment to the eeg [renewable energy sources act] of January

2012 calls for the use of at least 60% of the heat generated. the market growth for biomass power

plants depends primarily on the availability of the fuel. studies assume that the total quantity of

wood required for use as a raw material and for energy will most likely increase much faster in the

coming years than the corresponding supply of raw materials. an increase in installed power capacity

expected in germany is very likely to take the form of smaller plants with a capacity of 0.5 to 5 mw.

since the disposal of untreated urban waste in europe is restricted by law, we also expect substantial

growth in the coming years in recovering energy from waste materials. now that the german market is

virtually saturated, we believe that most contracts in the next few years will be awarded in great brit-

ain. it is currently unclear how new growth markets such as poland, russia and other eastern european

countries will make a significant contribution to new business in the medium term. despite the high

demand, projects in these countries for the incineration of industrial and household waste will depend

on the political will, financial feasibility, the implementation of corresponding regulatory requirements

and local acceptance. at the same time, we expect a tendency towards ever larger projects.

the development of the market for our equipment and components for the use of primary fuels and

waste heat downstream of gas turbines to recover energy is fundamentally tied to the development

of new capacities for producing electric power in europe. the outlook here medium and long-term

is also very good: the majority of german and european power plants have reached their maximum

service life and are due for renewal. given the challenge of absorbing the fluctuations resulting from

the increased production of green electricity, we anticipate a trend towards smaller, distributed units

which correspond to our product portfolio. however, considerable uncertainty currently prevails on

the german market. the priority given to renewable energies in electricity input into the public grid

and in some cases low-priced imported electricity cause longer downtimes for conventional power

plants and consequently a reduced level of profitability and a restrained propensity to invest. the

funding programme for power plants planned by the federal government against this background is

being put at risk by general provisions of european law because the european commission has tied

funding for the construction of new power plants or retrofitting of old power plants solely to the use

of ccs technology (carbon dioxide capture and storage) in the future. due to the lack of agreement

among the federal states, it cannot be excluded that the ccs law which has been contested for years

will fail. the funding of new power plants at reasonable financing rates would then not be possible

in germany for the time being and therefore a market recovery in this segment in the short term

could not be expected.

the Service Division provides numerous services for power plants, incineration plants and industrial

plants, starting with intelligent engineering for modernisation and the optimisation of operations,

through installation and commissioning to maintenance and complete operation.

a main basis for successful growth in this field, in addition to the equipment provided by the

standardkessel baumgarte group, is the demand for modernisation and restructuring with the goal

of making older power plants more energy-efficient.

in addition to europe, the middle east is a main target market for the service division. the first larger

orders were successfully completed in Kuwait and saudi arabia. we anticipate continued significant

growth in this region.

the Contracting Division offers the entire design and coordination of an energy production project

from a single source. this covers all services from project identification through project development,

realisation, operation of the energy generation equipment through to participation with equity capital.

our customers can concentrate on their core business, relieve their balance sheet and participate in cost

savings through outsourcing. as a partner, which can simultaneously assume the role of contractor,

supplier of the equipment and operational manager, we contribute decisively in reducing interfaces.

we can secure the main factors for the success of a project - operating efficiency and functional

capability of the equipment and professional operational management - through our bundled know-

how. the contracting division is currently concentrating its activities on medium-sized biomass power

plants. the necessary know-how for the wood fuel required for these contracting projects is provided

by our minority participation, charles lebbe bvba, belgium, which operates in forestry.

2. Development of the business in 2011

Order intake, sales and order backlog

following the highest order intake realised in the history of the standardkessel baumgarte group

of eur 237.5 million the previous year, order intake in 2011 returned to the average of the last

few years at eur 150.5 million. due to the high backlog of orders, sales in 2011 were therefore

eur 163.1 million (eur 111.8 million in 2010).

the plants and components division once again generated the key share with an order intake of

eur 119.6 million (previous year eur 212.4 million) and sales of eur 140.1 million (previous year

eur 89.3 million). Key orders taken were an order to supply two radiant boilers in germany and an

order to supply a waste incineration line in great britain.

sales in the financial year consisted of three orders which were finally invoiced orders as well as work

on various orders.


for the 2011 financial year

32 33

the service division was again able to grow in 2011 and generated an order intake of eur 31.9 mil-

lion (eur 26.7 million in the previous year), maintaining sales of eur 24.0 million (eur 24.1 million

in the previous year).

given its business model, the contracting division, which is in the process of being established, does

not at present substantially contribute to sales and order intake but positive effects are expected here

for the utilisation of both the plants and components division and the service division.

as order intake was slightly lower than sales, the order backlog decreased from eur 226.0 million at

31 december 2010 to eur 213.4 million at 31 december 2011. mathematically, this order backlog

covers more than one year.

as a result of employment arising from the order situation, almost all fields of activity of the operating

companies - projects, engineering, purchasing, installation and commissioning - were fully utilised

in the reporting period.

Earnings situation

the result before taxes was eur 6.4 million (previous year eur 3.5 million) and this corresponds to

a return on sales of 3.9% (previous year 3.1%). this positive result was essentially due not only to

successful order processing but also to the control of technical and scheduled risks.

Assets and financial situation

the balance sheet total decreased slightly at 31 december 2011 to eur 130.3 million compared

with the previous year (eur 137.1 million). this decrease was primarily due to a slight downturn in

the business volume and the resulting change in freely available funds of eur 10.0 million. apart

from credit balances at banks including securities of eur 85.9 million, which alone accounted for

65.9% of the balance sheet total, the main assets were the intangible assets at eur 18.9 million,

accounts receivable from manufacturing orders at eur 7.9 million and trade accounts receivable at

eur 10.4 million.

apart from equity, material liabilities are the obligations from manufacturing orders at eur 52.6 mil-

lion and the provisions of eur 46.2 million. the standardkessel baumgarte group has no financial

liabilities and is therefore unindebted.

economic equity of the standardkessel baumgarte group on the balance sheet date 31 december

2011 was eur 28.7 million (previous year eur 26.3 million) including a subordinated shareholder

loan of eur 2.9 million. to determine the equity ratio, due to the high credit balances at banks typi-

cal in our kind of business, the balance sheet total was reduced by customer prepayments carried as

liabilities amounting to eur 30.5 million. the equity ratio thus determined is 28.7% compared with

29.2% at 31 december 2010.

high credit balances at banks including securities were due inter alia to the positive cash flows from

individual large orders. part of this amount is deposited to secure bank guarantees. at the end of

the financial year, the group had a guarantee line of eur 105.0 million which had been used in an

amount of eur 63.9 million or 60.9%.

Investments

the companies of the standardkessel baumgarte group invested eur 1.2 million (0.9 million in the

previous year) in intangible assets and property, plant and equipment in the past financial year.

the assets, financial and earnings situation as a whole of the standardkessel baumgarte group

continues to be stable.

3. Research and development

research and development at the standardkessel baumgarte group coordinates a large number of

order-based and interdisciplinary innovative projects. Know-how from our r&d activities is continu-

ously applied to current projects.

the group applies proven technology, as evidenced by many references. solutions are developed for

practically every order based on the selected boiler technology, taking into account the respective

technical specifications of customers. this results in the development of many individual solutions in

consultation with the customer to optimise the overall concept.

the outstanding event in the past business year was the acquisition of the licence, and therefore the

rights of use, for additional firing technology. the already existing technologies comprising a pusher-

type and travelling grate, were completed by a stationary fluidised bed combustion system. licensor

of this fluidised bed technology is hs-energieanlagen gmbh (hse) of freising. hse has been operating

in this market segment since 1993 and currently has reference plants with a wide fuel range in

operation. this technology will be applied in the fields of waste and biomass engineering. fluidised

bed technology enables us to widen our field of activities by applying fuels which hitherto could not

be used with existing grate technologies. we can therefore select solutions for our customers from

our entire range of technical possibilities and offer them the optimum firing concept tailored to their

specific application. the acquisition of this licence opens up a further market segment to our group

of companies and strengthens our competitiveness.

apart from the acquisition of this licence, various interdisciplinary innovative projects were coordi-

nated:

in the field of biomass incineration, corrosion measurements were performed online in a plant, which

fires waste wood of categories ai to aiv, to evaluate different biogenic residues in terms of their

damage potential and to analyse the effects of media temperatures (flue gas and steam). further-

more, a new system for the combustion of combined biomass was developed on the basis of proven

firing systems for mono combustion which takes into account the different properties of this biomass

and allows low emission combustion.

research and development work in the area of waste utilisation plants as in the past years focused on

combustion technology. furthermore, in order to secure and update our experience of the operational

behaviour of waste utilisation plants, especially with regard to contamination and corrosion behaviour,

systematic analyses of dust and slag, and of the contamination and corrosion behaviour of heating

surfaces were continued in different waste-fired boilers and extended by analyses of water and

steam. developments in improving the protection of boiler heating surfaces against corrosion were

consistently pursued and additional installations were made in existing equipment. development is

also focusing on an increase in efficiency with a view to increasing the utilisation efficiency of our

equipment. experience from a maintenance order in a rdf incineration plant was systematically

analysed. conclusions drawn from this are applied continuously to current projects.

the processing of a complex order for the first time with a 3d construction and planning tool has

almost been completed. experience gained from this will make a significant contribution to the

efficient processing of new orders.

3 – group management report

34 35



4. Procurement

the standardkessel baumgarte group is concentrating its three business divisions on engineering

services and project management and all related services. accordingly, the former in-house

manufacturing sites were closed or sold to cooperation partners in previous years. the equipment

and components designed and constructed by the operating companies today are manufactured by

appropriate sub-contractors and shipped from there directly to the respective construction site for

installation by specialist assembly companies. ongoing supervision of manufacturing and installation

by our own personnel guarantees a maximum of required quality.

the low structure of fixed costs resulting from this business model and therefore the high degree

of independence from fluctuations in demand was demonstrated by the group in the past years.

5. Employees

the standardkessel baumgarte group employed a work force of 275 (excluding trainees) at the

balance sheet date 31 december 2011 (275 employees at 31 december 2010).

the number of trainees in 2011 was slightly below the level of the previous year. our aim is to lay the

foundation for modern and consistent personnel development with 14 technical and 7 commercial

trainees. apart from classic training as technical draughtsman or industrial clerk, the group offers

motivated young persons the opportunity of completing a dual track training programme and

acquiring the qualification of bachelor of engineering. in addition, individual commercial trainees

are given targeted support in their studies to obtain a bachelor of arts degree in parallel to their

career, and students have the opportunity of gaining practical experience or writing practice-related

diploma theses.

as the need for well-trained and motivated employees will continue to increase, promotion of

employee competence and strengths is an integral part of our personnel policy. the basis for sound

personnel development already established in previous years was also continued in the past business

year through extensive personnel development programmes and individual support for employees.

these measures will be continued.

all employees were also able once again to profit from the performance-related and success-based

remuneration scheme in 2011.

6. Risk management

the standardkessel baumgarte group handles primarily long-term orders in plant construction. the

consolidated annual financial statements cover any recognisable risks from such orders. a sound

controlling system is used for the early recognition of risks from projects and order processing. in

addition, an early warning system for risks has been instituted. this early warning system aims to

identify risks from corporate activities systematically, to evaluate, control and monitor them according

to the risks involved. this is intended to pre-empt risks which could endanger the existence of the

company. risk management itself is subject to continuous development and improvement.

the main risks for the standardkessel baumgarte group are described below:

Sales market risks

the standardkessel baumgarte group operates in markets which are strongly influenced by legislation

(subsidies for renewable energies, landfill prohibitions etc.). given the general trend towards greater

environmental awareness, we anticipate if anything an increase in legislation in europe which will

allow us to expand our business.

our group of companies depends on the utilisation of its capacities. postponements or losses of

orders can cause temporary under-utilisation and the associated impact on results which we can

partly absorb through appropriate working time models.

the current economic situation can aggravate project financing for customers and therefore lead to

postponement or even the non-realisation of projects. in specific cases, we protect ourselves against

the default risk of important customers through default insurance.

we limit normal default risks through strict receivables management.

Procurement market risks

we limit strong fluctuations in the prices of raw materials by obtaining binding offers from our

suppliers before we enter into delivery obligations ourselves.

we counter any capacity bottlenecks and price increases expected from our suppliers by long-term

general agreements. at the same time this enables us to reduce the risk of depending on single

suppliers for components requiring specialist know-how.

the current economic situation can increase the default risk of key suppliers. we try to estimate

default probability and actively limit the risks also by using our knowledge of the industry.

Specific risks in plant engineering

the operating companies have focused consistently on key technologies. at the same time, new

projects are analysed in detail during the bidding stage and at interdisciplinary level in terms of their

risks. this enables us to avoid orders that cannot be handled technically and significantly limit any

other technical risks.

risks arise from the total systems we construct with their high individual volumes primarily from

impaired general conditions over the course of the project. at the same time, milestones and

manufacturing deadlines are usually subject to contractual penalties so that unforeseen risks in order

execution can jeopardise the order result. the standardkessel baumgarte group tries not to assume

all risks associated with the handling of major orders but to leave some risks with the customer,

and to pass on other risks to suppliers and insurers. residual risks are actively managed through

continuously optimised process organisation, the use of experienced and highly trained project

managers and the reduction of interfaces.

Personnel risks

the continued success of our group of companies depends on our ability to recruit and retain quali-

fied employees, also in the future. we counter the risk of losing good employees through personnel

development programmes and basic conditions to create a pleasant working environment.

36 37

3 – group management report



Financial risks

as our business requires a great number of guarantees, we have concluded several loan agreements

with banks and guarantee insurers which secure an adequate guarantee line for the standardkessel

baumgarte group. the standardkessel baumgarte group therefore depends on the financing of this

guarantee volume, without this however resulting in a risk to the company’s continued existence

which exceeds the level associated with any credit financing.

we minimise the risk from exchange fluctuations by hedging all material foreign currency receivables

and liabilities by way of forward exchange transactions.

7. Outlook

the standardkessel baumgarte group anticipates continued positive business development in the

2012 and 2013 financial years. the market environment in the plants and components division

provides a good basis for this. in the service division, we expect further growth and believe that the

contracting division will give positive impetus to the entire group in the short term.

the standardkessel baumgarte group took in an order for the delivery of a coke gas boiler at the

beginning of the 2012 financial year. project volumes awaiting contract awards therefore once again

offer the opportunity of satisfactory development in order intake in 2012.

this market situation together with the orders currently in execution allow us to project a positive

result before taxes in operating budget and medium-term planning.

duisburg, 16 march 2012

Jörg Klaus Klasen filip ackerman lutz reinery

38



1 2 3

annual financial statement

42 43

note 31.12.2011 (eur) 31.12.2010 (eur) 01.01.2010 (eur)

1 18,918,165.07 20,254,667.84 21,827,854.69

2 1,340,750.72 1,892,730.84 1,840,081.44

3 651,915.93 181,018.50 60,067.78

20,910,831.72 22,328,417.18 23,728,003.91

4 1,374,350.20 947,030.04 433,632.80

22,285,181.92 23,275,447.22 24,161,636.71

5 601,269.49 1,059,950.58 1,031,752.70

6 3,242.75 263,792.36 3,015,377.74

7 1,465,230.06 1,739,616.36 2,006,544.89

2,069,742.30 3,063,359.30 6,053,675.33

8 7,862,228.84 5,020,587.95 9,444,061.34

9 10,393,166.22 8,967,199.19 11,905,762.76

10 1,766,724.76 847,329.29 1,274,227.72

11 11,744,116.92 11,835,039.73 11,584,662.35

12 74,193,651.06 84,062,067.96 67,655,085.99

105,959,887.80 110,732,224.12 101,863,800.16

130,314,812.02 137,071,030.64 132,079,112.20

Long-term assets

intangible assets

property, plant and equipment

long-term financial assets

deferred income taxes

Other short-term assets

raw materials and consumables

current income taxes

other assets

Short-term financial assets

accounts receivable from manufacturing orders

trade accounts receivable

other financial assets

securities

cash on hand, credit balances

at banks and cheques

Equity

subscribed capital

capital reserve

profit reserves

minority interests

net income for the year

Subordinated shareholder loan

Long-term provisions

provisions for pensions

other provisions

Deferred income taxes

Long-term liabilities

due to banks

Short-term provisions


other provisions

Current income taxes

Short-term liabilities

Financial liabilities

obligations from manufacturing orders

trade accounts payable

accounts due to affiliated companies

not included in consolidation

other financial liabilities

other short-term liabilities

note 31.12.2011 (eur) 31.12.2010 (eur) 01.01.2010 (eur)

13

28,000.00 28,000.00 28,000.00

44,366.50 2,500.00 2,500.00

22,284,033.72 21,048,332.80 17,260,680.51

238,297.62 179,429.10 0.00

3,214,823.69 2,235,700.92 3,787,652.29

25,809,521.53 23,493,962.82 21,078,832.80

14 2,859,752.70 2,760,571.76 2,673,902.70

15 8,600,074.00 7,989,933.00 7,339,809.55

16 1,507,621.00 2,561,130.00 3,440,026.00

10,107,695.00 10,551,063.00 10,779,835.55

17 851,347.20 118,765.99 1,370,838.45

0.00 0.00 10,215,000.00

15 336,577.00 373,790.00 297,684.44

16 35,742,095.73 31,556,732.46 22,916,828.71

36,078,672.73 31,930,522.46 23,214,513.15

1,050,704.56 1,525,971.02 1,950,862.03

18 30,452,653.47 47,157,095.19 33,619,369.31

19 22,171,516.82 16,358,338.80 24,493,628.63

2,821.42 1,844.51 931.38

20 363,872.07 74,241.15 2,183,149.14

52,990,863.78 63,591,519.65 60,297,078.46

21 566,254.52 3,098,653.94 498,249.06

130,314,812.02 137,071,030.64 132,079,112.20

assets liabilities

consolidated balance sheet per ifrs

as of 31 december 2011

4 – annual financial statement

44 45

consolidated statement of comprehensive income

per ifrs for the period from 1 January to 31 december 2011

Sales revenues

cost of manufacturing

Gross income

administrative costs

cost of sales

research and development costs

other income

Operating result

financial income

financial expense

other financial result

Financial income

Consolidated result before taxes

taxes on income and earnings

Consolidated result after taxes

Minority interest

Consolidated result after taxes

and minority interest

components of other comprehensive income

during the reporting period

result from cash flow hedges,

valuation at market value


valuation at fair value

result from currency conversion

at subsidiaries

actuarial gains/losses pensions

taxes on other comprehensive income

Other comprehensive income

Comprehensive income

note 2011 (eur) 2010 (eur)

22 163,143,404.14 111,849,547.60

28 -142,137,767.19 -95,435,551.21

21,005,636.95 16,413,996.39

-9,923,393.54 -7,675,072.03

-5,798,570.94 -5,054,831.44

-614,769.55 -889,511.16

23 686,617.36 0.00

5,355,520.28 2,794,581.76

1,962,355.66 1,082,699.65

-752,931.23 -820,998.15

-200,031.15 451,956.00

24 1,009,393.28 713,657.50

6,364,913.56 3,508,239.26

25 -2,589,570.73 -1,229,622.98

3,775,342.83 2,278,616.28

26 -103,725.80 45,967.17

3,671,617.03 2,324,583.45

-380,517.91 -77,039.03

-90,191.61 250,377.38

43,494.86 65,951.18

-250,298.00 -368,771.00

220,719.32 40,598.94

27 -456,793.34 -88,882.53

3,214,823.69 2,235,700.92

profit before taxes

taxes on income and earnings

depreciation, amortisation and write-offs on

intangible assets, and property, plant and equipment

financial result

change in provisions

change in inventories



trade accounts payable

change in other assets

change in other liabilities

price gains and losses for securities

other financial result

cash inflow from interest

cash outflow for interest

Cash flow from operations

cash inflow from retirement of

fixed assets

financial assets

cash outflow for

intangible assets


financial assets

Cash flow from investments

Free cash flow

minority interests in capital

minority interest in the result

changes in loans from credit institutions

distributions

Cash flow from financing activity

Change in freely available liquid funds

liquid funds as of 01.01.

liquid funds as of 31.12.

Change in liquid funds

note 2011 (eur) 2010 (eur)

6,364,913.56 3,508,239.26

25 -2,550,971.13 -582,159.40

1,2 1,702,719.74 2,402,409.57

24 -1,009,393.28 -713,657.50

15, 16 3,192,479.11 7,723,112.76

5,8 -2,382,959.80 4,395,275.51

18 -16,667,324.34 13,537,725.88

9 -1,421,218.03 2,938,563.57

19 5,814,154.93 -8,134,376.70

-631,447.48 571,910.45

-2,238,388.91 492,857.13

27, 30 -90,922.81 250,377.38

24 3,177.32 451,956.00

24 1,589,120.02 918,698.96

24 -18,227.74 -111,258.33

-8,344,288.84 27,649,674.54

2 650,000.00 447.00

3 15,908.52 6,459.28

1 -675,418.83 -413,289.75

2 -557,052.65 -468,917.99

3 -3,630.63 -127,410.00

-570,193.59 -1,002,711.46

-8,914,482.43 26,646,963.08

13 58,868.52 179,429.10

26 -103,725.80 45,967.17

0.00 -10,215,000.00

-1,000,000.00 0.00

-1,044,857.28 -9,989,603.73

-9,959,339.71 16,657,359.35

95,897,107.69 79,239,748.34

11, 12 85,937,767.98 95,897,107.69

-9,959,339.71 16,657,359.35

consolidated cash flow statement

for the period from 1 January to 31 december 2011


46 47

consolidated statement of changes in equity

for the period 1 January to 31 december 2011

01.01.2010

equity transactions

changes after tax

without effect on income

group result 2010

31.12.2010

distributions to shareholders

equity transactions

changes after tax


group result 2011

31.12.2011

subscribed capital minority profit reserves

capital reserve interests including

operating result

(eur) (eur) (eur) (eur)

28,000.00 2,500.00 0.00 21,330,459.43

0.00 0.00 179,429.10 0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00 2,324,583.45

28,000.00 2,500.00 179,429.10 23,655,042.88

0.00 0.00 0.00 -1,000,000.00

0.00 41,866.50 58,868.52 0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00 3,671,617.03

28,000.00 44,366.50 238,297.62 26,326,659.91

01.01.2010

equity transactions

changes after tax


group result 2010

31.12.2010

distributions to shareholders

equity transactions

changes after tax


group result 2011

31.12.2011

aggregate other comprehensive income

currency securities at cash flow actuarial Total equity

changes market value hedges gains / losses

pensions

(eur) (eur) (eur) (eur) (EUR)

-13,663.60 -352,593.07 84,130.04 0.00 21,078,832.80

0.00 0.00 0.00 0.00 179,429.10

44,362.48 168,417.91 -51,820.79 -249,842.13 -88,882.53

0.00 0.00 0.00 0.00 2,324,583.45

30,698.88 -184,175.16 32,309.25 -249,842.13 23,493,962.82

0.00 0.00 0.00 0.00 -1,000,000.00

0.00 0.00 0.00 0.00 100,735.02

29,870.87 -61,841.91 -255,042.13 -169,780.17 -456,793.34

0.00 0.00 0.00 0.00 3,671,617.03

60,569.75 -246,017.07 -222,732.88 -419,622.30 25,809,521.53


48 49

I. Explanations on the companies included in the consolidated financial statements and their basis of valuation

General information

standardkessel power systems holding gmbh (spsh) is the parent company of the standardkessel

baumgarte group which is active as a supplier for the construction of boiler plants for the generation

of heat and electric power, in part also for the turn-key construction of complete power plants as

well as for the production of steam boilers and related equipment. a further field of activity involves

qualified services as well as contracting for boiler plants.

spsh has its registered office at baldusstrasse 13, 47138 duisburg (germany).

the following companies are included in the consolidated financial statements.

apart from the above-mentioned companies, two subsidiaries were established in the reporting year.

due to reasons of materiality, they were not included in the consolidated financial statements as they

are not operating. two participations were liquidated in 2011.

all amounts stated in the notes are shown in Keur.

the audited consolidated financial statements and the group management report will be deposited

with duisburg local court under hrb 17458. the financial statements are expected to be released

for publication by the management of standardkessel power systems holding gmbh at the end of

may 2012.

Accounting principles

the consolidated financial statements of spsh as the reporting parent company for the financial

year from 1 January to 31 december 2011 were prepared in application of § 315a hgb [german

commercial code] in accordance with the international financial reporting standards (ifrs) of the

international accounting standards board (iasb), london, as these standards have been adopted / have

to be applied by the european union. all valid and mandatory standards as of the balance sheet date

were applied. in addition, the interpretations of the international financial reporting interpretation

committee (ifric) were observed. further disclosure requirements under section 315 a hgb were

also met.

group notes


Domestic companies

standardkessel power systems holding gmbh

47138 duisburg, baldusstrasse 13

standardkessel baumgarte holding gmbh


standardkessel gmbh


baumgarte boiler systems gmbh

33647 bielefeld, senner strasse 115

standardkessel baumgarte service holding gmbh

46049 oberhausen, duisburger strasse 375

standardkessel baumgarte service gmbh


emc germany gmbh


standardkessel baumgarte contracting gmbh


(spsh)

(sbh)

(sKg)

(bbs)

(sbsh)

(sbs)

(emc)

(sbc)

Foreign companies

environment & power company ltd.

dammam al-Khobar coastal rd.

al-Khobar 31952, saudi arabia

too "emc Kazakhstan" llp

(company name changed into too emc standardkessel

baumgarte Kazakhstan llp as of 24 January 2011)

120001 Kyzylorda a. bokeikhan 47, Kazakhstan

uK bioenergy ltd.

ng13 8pt, nottingham, 4 bridle ways,

great britain

(epco)

(emc KZ)

(uKb)


group notes

50 51

Standards Interpretations To be applied to

financial years as of

Planned first-time

application as of

ifrs 1

limited exemption from comparable disclosures according

to ifrs 7 1 Jul 2010 1 Jan 2011

three amendments to ifrs 1 - amendments of accounting

and valuation principles, exemption regarding assumed cost

of acquisition or cost of manufacturing given event-driven

determination of the fair value and assumed cost of acquisition

or cost of goods manufactured for undertakings subject to

price regulation 1 Jan 2011 1 Jan 2011

ifrs 3 amendments to ifrs 3 (2008) 1 Jul 2010 1 Jan 2011

ifrs 7 amendments to ifrs 7 1 Jan 2011 1 Jan 2011

ias 1 amendments to ias 1 1 Jan 2011 1 Jan 2011

ias 24 related party disclosures 1 Jan 2011 1 Jan 2011

ias 27 (2008) amendments to ias 27 (2008) 1 Jul 2010 1 Jan 2011

ias 32 classification of subscription rights 1 feb 2010 1 Jan 2011

ias 34 amendments to ias 34 1 Jan 2011 1 Jan 2011

ifric 13 amendments to ifric 13 1 Jan 2011 1 Jan 2011

ifric 14

voluntary prepaid contributions within the scope of

minimum funding requirements 1 Jan 2011 1 Jan 2011

ifric 19 extinguishing financial liabilities with equity instruments 1 Jul 2010 1 Jan 2011

Effects of new accounting standards

Accounting standards to be applied for the first time in the current financial year

the international accounting standards board (iasb) has adopted a number of changes in the existing

international financial reporting standards (ifrs) as well as some new ifrs have been mandatory since

1 february 2010. the following standards and interpretations to be applied for the first time in the

financial year have no material effects on the consolidated financial statements of spsh or have no

effects in the absence of relevant facts.

Accounting regulations that are published but not yet to be applied:

the following new and amended standards and interpretations had been adopted by the date the

consolidated financial statements were prepared as of 31 december 2011. they will, however, only enter

into force at a later date and were not applied to these consolidated financial statements in advance.

Standards Interpretations To be applied to

financial years as of

EU endorsements

(31 Dec 2011)

Planned first-time

application as of

ifrs 1

deletion of references to fixed transition

dates for first-time adopters of the ifrs 1 Jul 2011 pending 1 Jan 2012

severe hyperinflation 1 Jul 2011 pending 1 Jan 2012

ifrs 7

enhancement of disclosures about

transfers of financial assets 1 Jul 2011 given 1 Jan 2012

ifrs 9

financial instruments: classification

and measurement (financial assets) 1 Jan 2015 pending 1 Jan 2015

financial instruments: classification

and measurement (financial liabilities) 1 Jan 2015 pending 1 Jan 2015

ifrs 10 consolidated financial statements 1 Jan 2013 pending 1 Jan 2013

ifrs 11 Joint arrangements 1 Jan 2013 pending 1 Jan 2013

ifrs 12 disclosure of interests in other entities 1 Jan 2013 pending 1 Jan 2013

ias 27 (2011) separate financial statements 1 Jan 2013 pending 1 Jan 2013

ias 28 (2011)

investments in associates and

Joint ventures 1 Jan 2013 pending 1 Jan 2013

ias 13 fair value determination 1 Jan 2013 pending 1 Jan 2013

ias 1 (2011) amendments to ias 1 1 Jul 2012 pending 1 Jan 2013

ias 12 amendments to ias 12 1 Jan 2012 pending 1 Jan 2012

ias 19 amendments to ias 19 1 Jan 2013 pending 1 Jan 2013

ifric 20

stripping costs in the production

phase of a surface mine 1 Jan 2013 pending 1 Jan 2013

group notes



group notes

Standards / Interpretations

Standards / Interpretations

52 53

the iasb published the revised standards ifrs 10 (consolidated financial statements) and ifrs 12

(disclosure of interests in other entities) in may 2011. first-time application of the standards is

mandatory for the financial years beginning on or after 1 January 2013. adoption in european law

is still pending. the iasb published ifrs 9 (financial instruments) with rules to classify and measure

financial assets in november 2009, and rules to classify and measure financial liabilities in october

2010. application of ifrs is mandatory for financial years beginning on or after 1 January 2015.

ifrs 10 redefines full consolidation and eliminates existing inconsistencies. the purpose is above all to

provide a new, uniform definition of the term control and explicit consolidation regulations in the case

of de-facto control. the purpose of ifrs 12 in contrast is to ensure a higher degree of consistency and

transparency of disclosures in the notes on the fully consolidated companies (but also other associates).

the impact on the consolidated financial statements of spsh is currently under examination.

ifrs 9 requires the financial assets to be measured in one of the following two classifications:

"at amortised cost" or "at fair value". ifrs 9 further contains an option to designate measurement

at fair value. financial assets that would normally be classified "at amortised cost" can be classified

"at fair value" if this eliminates or significantly reduces a measurement or recognition inconsistency.

it is mandatory to classify equity instruments "at fair value". the impact on the consolidated financial

statements of spsh is currently under examination.

the other amendments are not expected to have any material impact on the consolidated financial

statements of spsh.

Components of the consolidated financial statements

in addition to the balance sheet and the statement of comprehensive income, a cash flow statement

and the development of the equity are shown.

in order to improve the clarity of the presentation, various line items in the consolidated balance sheet

and the consolidated statement of comprehensive income are combined. these line items are broken

down and explained accordingly in the notes. the statement of comprehensive income was established

using the cost of sales method.

Consolidated companies and consolidation

the companies under the control of spsh are included in these consolidated financial statements. the

annual financial statements of the companies included in the consolidated financial statements are

set forth according to uniform accounting and valuation methods as of the same balance sheet date

as the financial statements for the parent company.

the consolidation of capital was in accordance with the acquisition method by setting off the cost of

acquisition against the net assets valued proportionately attributable to the parent company as of the

date of acquisition. intangible assets identified at the time of acquiring an enterprise are only separately

accounted for if the requirements of ias 38 are satisfied. furthermore, losses carried forward for tax

purposes are entered as deferred tax claims. adjustments to the valuation of the assets entered as of

the date of acquisition are made within twelve months after the acquisition for the benefit of or to the

detriment of the value of the assets.

the participating interest in the company environmental & power company ltd. (epco) established the

previous year was increased from 60% to 70% through a fiduciary agreement with a co-shareholder.

sbsh now holds 2,100 shares out of a total of 3,000 issued shares. additional cost of acquisition was

incurred amounting to Keur 38. the difference vis-à-vis the 10% share in the equity of epco was

transferred in an amount of Keur 42 to the capital reserve. the shares now correspond to a share in

the capital of Keur 556 at 31 december 2011. the remaining 900 shares which are not held by the

group correspond to Keur 238 at 31 december 2011.

group notes



group notes

54 55

an overview of the companies included in the consolidated financial statements with their individual

financial statements is set forth below:

the deliveries of goods and services as well as the expenses, earnings and interim profits, receivables

and liabilities between the individual companies within the group were eliminated.

Accounting and valuation methods

Goodwill

goodwill is the asset-side balancing item between cost of acquisition and the fair value of assets

acquired and debt incurred in the context of acquiring an enterprise. goodwill is shown on the assets

side of the balance sheet and is not subject to any scheduled depreciation, but an impairment test is

carried out at least once annually based on the cash flow forecast in order to determine any potential

need for extraordinary depreciation. there was no need for devaluation for the domestic companies in

2011. there was an impairment in value of Keur 169 for the foreign companies due to the decision

to liquidate too emc standardkessel baumgarte Kazakhstan llp in 2011.

Intangible assets

depreciable intangible assets acquired for payment are reported at cost of acquisition less scheduled

depreciation on a straight-line basis (useful life three to ten years).

impairment is assessed according to occurrence by comparing the book value and the realisable

amount. the realisable amount corresponds to the fair value less sales costs or the cash value which-

ever is higher of the future attributable cash flow due to continued use of the asset. if the book value

is higher than the realisable amount, the asset is depreciated by the resulting difference.

research costs are treated as ongoing expense according to ias 38. development costs are capitalised

according to ias 38, if the conditions to do so are met.

Property, plant and equipment

property, plant and equipment are valued according to the cost method of ias 16 at cost of acquisition

or manufacturing, reduced by scheduled and, where applicable, also unscheduled deprecation. repair

costs and interest on third party capital are reported as ongoing expense unless interest on third party

capital must be reflected for qualified assets according to ias 23.

scheduled depreciation is determined pro rata temporis based on expected useful life according to

the straight-line method. scheduled depreciation is based on the following useful lives established as

uniform across the group:

name

standardkessel power systems holding gmbh,

duisburg

standardkessel baumgarte holding gmbh,

duisburg

standardkessel gmbh, duisburg

baumgarte boiler systems gmbh, bielefeld


service holding gmbh, oberhausen


service gmbh, oberhausen

emc germany gmbh, oberhausen

standardkessel baumgarte contracting gmbh,

duisburg

too emc standardkessel baumgarte

Kazakhstan llp, Kyzylorda, Kasakhstan

environment & power company ltd.,

al-Khobar, saudi arabia

uK bioenergy ltd., nottingham, great britain

equity at group

31.12.2011 share in

Keur %

6,557 100

22,346 100

10,090 100

11,195 100

3,168 100

207 100

-292 100

494 100

-39 100

794 70

-97 100

3 to 10 years

5 years

10 years

10 years

10 years

licences

cad system library

calculation programmes

sales archive

engineering archive

group notes



group notes

56 57

property, plant and equipment are subject to unscheduled depreciation if an impairment in value is

indicated and the realisable amount is below the cost of acquisition or manufacturing carried forward.

a write-up is performed if the reasons for unscheduled depreciation in previous years are no longer

applicable.

Long-term financial assets

long-term financial assets are capitalised at cost of acquisition according to ias 39 if they are loans

and receivables. they have terms of up to five years. other long-term financial assets are written down

to the lower value as necessary on the balance sheet date. they are written off when they are sold or

mature. participations in non-consolidated subsidiaries are reported at fair value according to ias 39.

Inventories

inventories are valued at cost of acquisition or manufacturing or at the lower net realisable value. cost

of manufacturing includes the directly attributable cost of manufacturing and the fixed and variable

cost of material and manufacturing overhead expenses attributable at a pro rata share. overhead

cost allocations are on principle determined on the basis of normal capacity. sales costs, general

administration costs and interest on third party capital are not capitalised.

raw materials and consumables are valued at the average purchasing prices plus ancillary costs, less

cash discounts, taking the net realisable value into account.

Other short-term assets and short-term financial assets

other short-term assets and short-term financial assets are reported at cost of acquisition or the lower

fair value. apparent individual risks in accounts receivable are accounted for by way of individual value

adjustments. Zero interest receivables with a remaining term of more than one year are discounted.

write-ups are performed if the reasons for an individual value adjustment made in previous years no

longer exist. receivables and liabilities in foreign currencies are translated at the rate on the balance

sheet date. value adjustments as a result are treated as affecting net income.

Manufacturing orders

manufacturing orders are recognised using the percentage of completion method (p.o.c.). the

percentage of completion is calculated from the share of the order costs incurred up to the balance

sheet date in the expected total order costs (cost-to-cost method). sales revenues and cost of

manufacturing are reported based on the expected order revenues and the expected order costs

according to the percentage of completion achieved. parts of trade orders valued per p.o.c. are

recognised in the balance sheet as accounts receivable from manufacturing orders. payments on

account received for orders valued in accordance with the p.o.c. are deducted for specific orders up

to the amount of the receivable, any excess is carried in payments on account received.

anticipated losses from manufacturing orders are recognised in the balance sheet as expense

immediately i.e. at the time they are identified. if the result of a manufacturing order is not yet

sufficiently certain, the proceeds are reported only in the amount of the order costs incurred (zero

profit method). the profit portion is only realised when completion has advanced so far that proceeds

from the order and costs still to be incurred can be estimated reliably.

the orders valued according to the zero profit method are reported in the statement of comprehensive

income as sales revenues and cost of manufacturing in the amount of the costs incurred and are

reported in the balance sheet as accounts receivable from manufacturing orders.

Provisions

provisions for pension obligations are valued in compliance with ias 19 according to the projected unit

credit method, taking future developments in salaries and pensions into account insofar as these involve

defined benefit pension plans. except for the interest rate component and actuarial gains and losses,

when reporting pension obligations in the balance sheet, the balance of all income and expenses is

reported in the operating income. the interest component is reported in the financial result.

the method for reporting actuarial gains and losses within the current valid ias 19 was changed.

they are now reported in other comprehensive income in the reporting period in the statement of

comprehensive income. this change in reporting method was made because the euro crisis at the

end of the 2011 financial year had resulted in a markedly higher volatility of interest rates which led

to a sharper swing in the actuarial gains and losses. their reporting in other comprehensive income

improves insight into the group’s assets and earnings position. comparable amounts from the previous

year were reclassified from cost of manufacturing to other comprehensive income.

other provisions are established according to ias 37 for all risks and contingent liabilities apparent on

the balance sheet date, resulting from past transactions or past events where their amount or date of

maturity is uncertain, at the amount at which they are expected to be incurred. provisions with a term

of more than one year are discounted.

we set up provisions for warranties at the time of final invoicing of the orders to the customers. they

are set up on the basis of the expense for warranty incurred in the past, the warranty period and the

sales subject to warranty. in addition, individual provisions for warranties are established for individual

claims. provisions for costs not yet charged and for other order-related obligations are valued based

on expected work still to be performed, and in the case of obligations to render work in kind, at the

cost of manufacturing still to be incurred.

20 to 50 years

8 to 20 years

5 to 15 years

3 to 13 years

buildings

installations on land

plant and machinery

fixtures and fittings

group notes



group notes

58 59

Liabilities

liabilities are generally recognised for the first time in the balance sheet at the amount of the

consideration received. liabilities are generally recognised in subsequent periods with the cost of

acquisition carried forward (applying, if appropriate, the effective interest method). liabilities with

terms of more than twelve months are reported at their cash value. liabilities in foreign currencies are

translated at the rate on the balance sheet date.

Estimates

when preparing the consolidated financial statements, assumptions were made and estimates applied

which impacted on the amount and reporting of the assets and liabilities, income and expenses and

contingent liabilities reported in the balance sheet. the assumptions and estimates essentially relate to

the determination of economic useful life as uniform across the group, assumptions on the degree of

completion and the total costs of customer-specific manufacturing orders, the reporting of provisions

in the balance sheet and the possibility of realising future tax relief. the assumptions on which a

respective estimate is based are explained in the individual balance sheet items and the statement of

comprehensive income. actual values can in some cases deviate from the assumptions and estimates.

such deviations are taken into account as soon as they become known.

Deferred income taxes

deferred income taxes are recognised based on the balance sheet oriented asset and liability method.

income taxes are deferred for temporary differences between valuations for tax purposes and valuations

entered in the balance sheet, for consolidation processes and for tax losses carried forward.

deferred tax assets are only recognised to the extent that the related tax reductions are likely to occur.

losses carried forward are only included in the tax deferrals to the extent that, on the basis of the fore-

cast results for tax purposes, taxable income is expected in the future which will be sufficient to realise

the deferred income tax assets.

deferred income taxes are valued at the tax rates anticipated in the individual countries on the date

of their realisation. changes in tax rate are taken into account according to ias 12 as soon as the

substantive legislation process has been completed.

Income and expenses

the statement of comprehensive income is prepared using the cost of sales method and follows the

one statement approach in ias 1.81(a).

sales revenues are posted at the time the deliveries or services are provided and the risk has passed to

the customer. sales revenues are reduced by cash discounts, customer bonuses and rebates. where

manufacturing orders are long-term, sales are reported according to the percentage of completion

method (p.o.c.). for more details, please refer to the explanations on the manufacturing orders.

other income is reported if its cause was not operational.

operating expense is reported as expense when a service is used, expenses for advertising and sales

promotion and other sales-related expenses are reported at the time they are incurred. interest income

and expense and other costs for third party capital are reported as income or losses as accrued.

Currency translation

the respective transaction rates during the year are used as the basis for translating foreign currency

amounts into euro. at the end of the year, the outstanding balances in foreign currency are translated

at the currency exchange rate on the balance sheet date, and currency differences resulting from the

valuation of foreign exchange positions are reported as income or losses.

Cash flow statement

the cash flow statement was prepared in accordance with the provisions of ias 7. in the cash flow

statement, the cash flows are broken down into the areas of cash flow from operations, cash flow

from investments, and cash flow from financing activities. the indirect method is used to determine

the cash flow from operations.

operating income and expense which do not affect the cash flow are eliminated in the cash flow from

operations. this shows the change in liquidity as a result of profit/loss for the year.

cash flow from investments contains the investments in intangible assets, property, plant and equip-

ment and financial assets affecting finances as well as cash inflow from the retirement of intangible

assets, property, plant and equipment, participations and loans.

cash flow from financing activities includes all corporate activities which lead to a change in the

amount and structure of the equity and third party capital.

funds for financing purposes include the balance sheet items "securities", "cash on hand, credit

balances at banks and cheques".

group notes



group notes

60 61

II. Explanations on the consolidated balance sheet

1 Intangible assets

goodwill of Keur 15,079 (previous year Keur 15,248) resulting from the acquisition of companies

is reported. this applies to standardkessel gmbh with Keur 9,679 and to baumgarte boiler systems

gmbh with Keur 5,400. impairment in the value of the goodwill of too emc standardkessel baum-

garte Kazakhstan llp of Keur 169 is reported in other financial result.

licenses, software and similar rights have pre-defined useful lives. scheduled depreciation for this is

Keur 1,843 (previous year Keur 1,985) and is included in the functional costs, in particular in the

cost of manufacturing. remaining useful life of the intangible assets taken into account in 2007 in

the context of the purchase price allocation is one to six years.

gross book value at 01.01.2011

cumulative depreciations 01.01.2011

situation on 01.01.2011

additions

retirements

depreciations

- additions

- retirements

impairment in value




goodwill licences, software, intangible

similar rights assets

15,248 13,837 29,085

0 -8,830 -8,830

15,248 5,007 20,255

0 675 675

0 0 0

0 -1,843 -1,843

0 0 0

-169 0 -169

15,079 3,839 18,918

15,248 14,512 29,760

0 -10,673 -10,673




additions

retirements

depreciations

- additions

- retirements




goodwill licences, software, intangible

similar rights assets

15,248 13,431 28,679

0 -6,851 -6,851

15,248 6,580 21,828

0 413 413

0 -7 -7

0 -1,985 -1,985

0 6 6

15,248 5,007 20,255

15,248 13,837 29,085

0 -8,830 -8,830

group notes



group notes

62 63

2 Property, plant and equipment

the scheduled depreciations on property, plant and equipment in the amount of Keur 488 (previous

year Keur 415) are included in the functional costs, in particular in the cost of manufacturing.

3 Long-term financial assets

participations of Keur 146 (previous year Keur 143) are held in four companies which were not

valued in the consolidation or were valued at equity because of their insignificance. in the case of

one company, there is no relevant influence as a result of the participation. this excluded companies

are reported in principle at fair value according to ias 39 which corresponds to the amortised costs.

there is also a long-term portion of a purchase price receivable of Keur 480 (previous year Keur 0)

and long-term loans of Keur 26 (previous year Keur 38).

valuation was at cost of acquisition.


currency changes gross value


currency changes cum. depreciations


additions

retirements

depreciations

- additions

- retirements







additions

retirements

depreciations

- additions

- retirements




real technical plant other plant, fixed

estate and machinery fixtures and assets

fittings

2,285 109 4,848 7,242

0 0 -2 -2

-1,556 -82 -3,712 -5,350

0 0 3 3

729 27 1,137 1,893

0 7 551 558

-2,188 0 -1,611 -3,799

-69 -5 -414 -488

1,600 0 1,577 3,177

72 29 1,240 1,341

97 116 3,786 3,999

-25 -87 -2,546 -2,658

real technical plant other plant, fixed

estate and machinery fixtures and assets

fittings

2,285 119 4,475 6,879

-1,466 -82 -3,490 -5,038

819 37 985 1,841

0 0 469 469

0 0 -105 -105

-90 -6 -319 -415

0 0 103 103

729 31 1,133 1,893

2,285 119 4,839 7,243

-1,556 -88 -3,706 -5,350

group notes



group notes

64 65

4, 17 Deferred income taxes

deferred income taxes are established pursuant to ias 12 for valuation differences between the tax

balance sheets of the individual companies and the consolidated financial statements. the tax rates

for deferred income taxes within the group are on average 32.7% (previous year 32.7%).

deferred taxes on losses carried forward were shown as assets to the extent that they are likely to be

set off against future profits. no deferred tax assets were reported for tax losses carried forward for

corporation tax of Keur 4,783 (previous year Keur 4,055) and trade tax of Keur 4,408 (previous year

Keur 3,708) because it is not certain whether they will effectively result in tax relief.

temporary differences between the valuations in the ifrs consolidated financial statements and the

respective tax valuation impact on the tax deferrals reported in the balance sheet are as follows:

deferred tax claims from losses resulting from cash flow hedges and currency translation differences

from economically independent foreign units that are neutral in their effect on profits had the effect

of increasing equity by Keur 140 (previous year Keur 40). actuarial losses from the calculation of

pension provisions reported for the first time in the oci which are neutral in their effect on profits

have also been allocated to deferred tax claims with the effect of increasing equity by Keur 81. the

stated effects on equity are shown in the statement of comprehensive income.

5 Raw materials and consumables

the total book value of the raw materials and consumables reported in the balance sheet on the bal-

ance sheet date is Keur 601 (previous year Keur 1,060). the amount of the write-downs posted is

Keur 1,340 (previous year Keur 1,138) and is included in cost of manufacturing (note 28).

6 Current income taxes

current income taxes primarily include receivables from tax offices from interest income tax.

7 Other assets

individual value adjustments were made on receivables from other taxes (primarily foreign turnover

taxes) of Keur 642 (previous year Keur 665).

Long-term assets

intangible assets



Short-term assets

accounts receivable from

manufacturing orders

receivables and other assets

Long-term liabilities


Short-term liabilities

other provisions

liabilities and other

tax losses carried forward

Sub-total

balance of deferred taxes

carried as assets and liabilities

Value shown in the balance sheet

31.12.2011 31.12.2011 31.12.2010 31.12.2010

assets liabilities assets liabilities

1,271 910 1,576 1,335

21

3,155 1,265

113 241

873 742

239 3

134 71 1,181

2,255 2,514

4,772 4,249 4,853 4,025

-3,398 -3,398 -3,906 -3,906

1,374 851 947 119

receivables from other taxes

accrual for payments relating to other periods

31.12.2011 31.12.2010

1,138 766

327 974

1,465 1,740

group notes



group notes

66 67

8 Accounts receivable from manufacturing orders

the items bear no interest. by accounting for appropriate reductions in value, the book values corre-

spond to the fair values.

9 Trade accounts receivable

trade accounts receivable are reported at Keur 10,393 (previous year Keur 8,967). short-term

receivables do not bear interest and are recognised at cost of acquisition. doubtful customer accounts

are recognised at the lower recoverable amount. accounts receivable valued in foreign currencies are

valued at the average exchange rate on the balance sheet date. this results on balance in a currency

loss of Keur 3 (previous year currency loss of Keur 17).

completed orders finally invoiced to customers are reported in trade accounts receivable. the so-

called retention money is as a rule replaced by submission of a performance bond so that there are no

receivables with a term of more than one year. all receivables amounting to Keur 10,393 (previous

year Keur 8,967) are therefore due within one year. when receivables are paid, they are eliminated

from the accounts. the book values correspond to the fair values.

as far as the trade accounts receivable are concerned where neither the value is reduced nor payment

delayed, there are no indications at the balance sheet date that the debtors will not meet their

payment obligations (see table following the explanations on other financial assets).

value adjustments to the trade accounts receivable of Keur 1,108 (previous year Keur 3,302) were

carried out (see table following the explanations on other financial assets).

10 Other financial assets

these are loans and other receivables. there are no indications that the debtors will not meet their

payment obligations.

other financial assets in foreign currency with a fixed value date are valued at the forward exchange

hedge rate on the balance sheet date.

the individual value adjustments developed as follows:

Receivables not yet invoiced

cost of manufacturing

plus p.o.c. result

"Zero profit" receivables not yet invoiced

payments on account made

less payments on account received

31.12.2011 31.12.2010

172,271 122,540

17,502 13,421

3,306 2,964

1,851 1,549

-187,068 -135,453

7,862 5,021

gross value

thereof neither reduced in value

nor overdue at the balance sheet date

Not adjusted in value,

overdue in the time bands

overdue less than 30 days

overdue between 30 and 60 days




overdue more than 360 days

trade accounts trade accounts other financial other financial

receivable receivable assets assets

31.12.2011 31.12.2010 31.12.2011 31.12.2010

11,501 12,269 1,767 847

3,511 7,450 1,739 840

970 300 0 1

519 429 0 5

1,085 0 0 0

757 36 0 0

829 80 3 1

2,722 672 25 0

2011


2010



01.01. drawdown reversal appropriation 31.12.

3,302 -3,282 0 1,088 1,108

01.01. drawdown reversal appropriation 31.12.

3,527 0 -253 28 3,302

15 -10 -5 0 0

group notes



group notes

68 69

11 Securities

the securities are intended for short-term management of liquidity. the securities amounting to Keur

11,744 (previous year Keur 11,835) are bearer bonds of Keur 8,004 (previous year Keur 8,129) which

are classified "available for sale". they are reported in the balance sheet at market value. the interest

rate is on average 2.75% p.a. (previous year 2.75% p.a.). there were price losses in the securities of

Keur 125 (previous year price losses of Keur 11) which were set off in equity resp. the statement of

comprehensive income without effect on income. the trading date is decisive for reporting the regular

acquisition and sale of securities in the balance sheet. they are valued on the basis of market values on

an active market.

due to ongoing uncertainty on the capital market, the recovery of the other securities (shares in funds)

has been moderate. the valuation of the securities of Keur 3,740 (previous year Keur 3,706) led to

a price gain of Keur 34 (previous year price gain of Keur 261) as of the balance sheet date. these

securities are classified "available for sale".

reference is also made in this regard to (30) financial instruments.

12 Cash on hand, credit balances at banks and cheques

Keur 31,943 (previous year Keur 42,518) of the credit balances at banks were deposited to secure

bank guarantee lines according to term.

13 Equity

the four shares in spsh are fully paid up. equity reported by the company of Keur 25,810 (previous

year Keur 23,494) is the subject of capital management. this capital management aims to ensure

adequate creditworthiness and compliance with national and international criteria for project tenders

through an appropriate equity ratio. adequate capital in the form of equity and third party capital is

assured and made available to all group companies.

the management of spsh proposes a profit distribution of Keur 3,000 from the 2011 result.

the standardkessel baumgarte group complied during the entire reporting period and at the balance

sheet date with the equity covenant with the guarantors of Keur 21,000 to be applied at the

reporting date 31 december 2011. the covenants agreed in previous years were each complied with.

14 Subordinated shareholder loan

the majority shareholder granted a euribor subordinated maturity loan, bearing interest of 3% over

3 months, of Keur 2,860 (previous year Keur 2,761).

15 Provisions for pensions

the company pension plans of the companies for their employees are essentially based on direct,

defined benefit pension commitments within the meaning of ias 19. length of service with the

company and the pensionable remuneration are as a rule decisive factors when assessing pensions.

these pension commitments are financed by making provisions for pensions. provisions for pensions

are actuarially valued according to the projected unit credit method, taking into account future

developments. actuarial gains and losses are accounted for without impact on the result.

realistic assumptions, valid at the balance sheet date, are used among other things for the imputed

interest rate as well as for future salary increases with final salary pension commitments and for

future pension adjustments. the interest component contained in the pension expenses is reported

within interest expense.

Information on defined benefit plans

the companies have direct pension obligations based on individual commitments and a general policy.

the following arrangements apply to the valuation of pension obligations derived from a pension plan

dated 2 January 1989 and from the general terms and conditions for management pensions dated

may 1998 of a former parent company.

a retirement pension is paid when the employee attains the age of 65, or on drawing a retirement

pension from the statutory pension scheme, or when the pensionable age limit is brought forward.

in addition, there are agreements on disability, orphans and widows’ pensions.

a pension payable monthly is provided when the employee attains the age of 65 or is unable to work

prior to that date.

as of 31 december 2011, there is a change in the number of prospective beneficiaries and pensioners.

223 prospective beneficiaries (previous year 217), 109 vested pension rights (previous year 109) and

239 pensioners (previous year 230) are accounted for in the plans as of 31 december 2011. for

the companies, the cash value of the pension obligations was determined based on the following

assumptions:

the biometric calculation is based on the mortality tables 2005g of prof. dr. Klaus heubeck.

the provisions for pensions have developed as follows over the course of the financial year:

accounting interest rate

pensions trend

salary trend

31.12.2011 31.12.2010

4.90 % 5.25 %

2.00 % 2.00 %

2.00 % 2.00 %

group notes



group notes

70 71

provisions for pensions in the balance sheet are derived as follows from the value of the obligations:

the cash value of the pension commitments shows the actual target value for the valuation pursuant

to ias 19. the actuarial cash value of the future benefits or claims for future pension benefits earned

by the beneficiaries under the respective pension plan on the valuation date was established as a

provision.

other pensions include a purchase-price annuity.

pension expenses for the respective period comprise the following and are reported in the line items

indicated in the statement of comprehensive income:

the actuarial gains and losses of Keur -251 (previous year Keur -369) are reported for the first time

as other comprehensive income/loss for the period. the previous year’s presentation was adapted. of

the provisions for pensions and similar obligations, Keur 337 (previous year Keur 374) are expected

to fall due in the subsequent financial year.

the obligations will be financed exclusively from provisions.

16 Other provisions

the provisions for warranties cover statutory and contractual warranty obligations. the accrual for

costs not yet invoiced relates to outstanding supplier invoices, expenditure for remedying defects and

other order-specific obligations.

the obligations for and towards employees exist to cover anniversaries, redundancy payments, pre-

retirement part-time programmes, bonuses, special remuneration, overtime and accumulated time,

vacation and the mutual indemnity association. the long-term component of these provisions is

discounted. there was an increase in the discounted amount of Keur 116 (previous year Keur 58)

from Keur 63 to Keur 179 over time. the discounting rate reduced compared with the previous year

by 0.35% to 4.90% (previous year 5.25%). other sundry accruals relate to numerous individual risks.

no claims for reimbursement have been capitalised for the accrued risks.

17 Deferred income taxes

see the specific details in the overview (4) for the origin of deferred income taxes.

situation on 01.01.

expenditure for additional pension rights

acquired during the financial year

interest expense for rights already acquired

actuarial gains / losses

benefits paid out

situation on 31.12.

2011 2010

8,364 7,637

212 207

441 442

251 369

-331 -291

8,937 8,364

cash value of future benefits from

defined benefit obligations

other pensions

situation on 31.12.

31.12.2011 31.12.2010 31.12.2009 31.12.2008

8,883 8,316 7,589 7,422

54 48 48 51

8,937 8,364 7,637 7,473

expenditure for additional pension rights

acquired during the financial year

interest expense for rights

already acquired (interest cost)

pension expenditure for the period

item in statement of

comprehensive income 2011 2010

(28) 212 207

(24) 441 442

653 649

warranties

costs not yet invoiced

other order-related accruals

obligations for and towards employees

other sundry accruals

situation on drawdown reversal appropriation situation on

01.01.2011 31.12.2011

17,031 -1,814 -3,692 4,479 16,004

10,494 -2,230 -4,140 8,881 13,005

0 0 0 356 356

5,254 -4,414 -413 6,217 6,644

1,339 -942 -369 1,213 1,241

34,118 -9,400 -8,614 21,146 37,250

group notes



group notes

72 73

18 Obligations from manufacturing orders

payments on account received from p.o.c. and zero profit orders are deducted on an order-by-order

basis up to the amount of the receivable. any excess is carried as a liability from manufacturing orders.

19 Trade accounts payable

trade accounts payable are reported at the repayable amount. liabilities denominated in foreign

currency are reported at the mean value at the balance sheet date. given the term, the book value is

a reasonable approach to the fair value. obligations are all short-term.

this results on balance in a currency gain of Keur 5 (previous year currency gain of Keur 3).

20 Other financial liabilities

the liabilities exist primarily towards other third parties.

other financial liabilities are reported as short-term liabilities because they are due within one year.

for this reason, the repayable amount corresponds to the fair value.

21 Other short-term liabilities

short-term liabilities owed to tax authorities for turnover tax and wage tax withheld are primarily

reported here. the liabilities are reported at their repayable amount.

III. Explanations on the consolidated statement of comprehensive income

22 Geographic breakdown of revenues

sales revenues from customer-specific manufacturing orders according to p.o.c. and zero profit amount

to Keur 144,024 (previous year Keur 108,695). sales revenues relate mainly to the construction of

new boiler systems.

23 Other income

book profit from the disposal of two building leases on commercial property is reported here.

payments on account

received for orders

set off p.o.c. receivables

set off "zero profit"

receivables not yet invoiced

31.12.2011 31.12.2010

217,521 182,610

-185,831 -134,474

-1,237 -979

30,453 47,157

germany

other eu member states

other european countries

africa

america

asia

2011 2010

108,961 85,689

41,456 10,944

56 162

0 8

1,220 719

11,450 14,328

163,143 111,850

group notes



group notes

74 75

24 Financial result

proceeds from the liquidation of two participations amounted to Keur 3.

25 Taxes on income

Reconciliation of expected and actual income tax expense

the table below shows a reconciliation statement of expected and actual income tax expense:

the result before income taxes is multiplied by the average group income tax rate of 32.7% (previous

year 32.7%) which consists of trade tax 16.9% (previous year 16.9%), corporation tax of 15.0% and

the solidarity surcharge (5.5% of the corporation tax).

there are unlimited losses carried forward for corporation tax of Keur 14,713 (previous year Keur

17,315) and trade tax of Keur 8,393 (previous year Keur 6,131). thereof Keur 9,930 (previous year

Keur 13,260) were taken into account for corporation tax and Keur 3,985 (previous year Keur

2,423) for trade tax. further losses carried forward of Keur 4,783 (corporation tax) and Keur 4,408

(trade tax) were not taken into account as application cannot be expected within the planning period.

interest and similar income

interest and similar expense

interest component in appropriation

to provisions for pensions

interest income on other provisions

interest expense on other provisions

book profit from disposal of financial assets

impairment of goodwill

other

2011 2010

1,589 856

-118 -215

-441 -442

373 227

-194 -164

3 452

-169 0

-34 0

1,009 714

current income taxes

deferred income taxes

2011 2010

-2,064 -2,954

-526 1,724

-2,590 -1,230

Result before income taxes

expected income tax expense at

an average group income tax rate

of 32.7% (previous year 32.7%)

new tax losses

carried forward which are unusable

addition to tax losses

carried forward

depreciation of capitalised

deferred taxes in previous years

effects of adjustment of deferred taxes

due to change in tax rate to 32.7%

different foreign tax rates

and non-allowable foreign taxes

additional payments /

refunds of taxes previous years

tax relief due to income / expense from

valuation of securities at market price

other tax effects

(non-deductible expenses,

trade tax adjustments)

Recognised income tax expense

2011 2010

6,365 3,508

-2,081 -1,145

-903 -63

679 55

-165 0

0 -37

129 -178

-133 126

0 40

-116 -28

-2,590 -1,230

group notes



group notes

76 77 76

26 Minority interest

the 30% share of epco in the result is reported here.

27 Components of other comprehensive income during the reporting period

the components of other comprehensive income (oci) are reported in other comprehensive income.

deferred taxes recognised in the statement of comprehensive income without impact on profits from

the above-mentioned effects total Keur 221 (previous year Keur 40).

28 Other information on the statement of comprehensive income

Cost of materials

Personnel expenses

expenses for retirement pensions amount to Keur 212 (previous year Keur 207). they do not include

the interest component in the appropriation to the provisions for pensions of Keur 441 (previous year

teur 442). this is reported in the financial result.

Average headcount for the financial year

the average number of employees in the reporting period was 267 (previous year 266).

2011





result from foreign currency

translation, subsidiaries

actuarial gains/losses,

pensions

2010





result from foreign currency

translation, subsidiaries

actuarial gains/losses,

pension

gross deferred tax net

expense/charge

-381 125 -256

-90 29 -61

43 -14 29

-250 81 -169

-678 221 -457

gross deferred tax net

expense/charge

-77 25 -52

251 -82 169

66 -22 44

-369 119 -250

-129 40 -89

cost of raw materials and consumables

and for goods for resale

cost of purchased services

2011 2010

-25,067 -4,185

-91,575 -69,772

-116,642 -73,957

salaries and wages

social security, pension

and other benefits

2011 2010

-23,960 -20,752

-3,186 -3,426

-27,146 -24,178

group notes



group notes

78 79

IV. Other information

29 Auditor’s fees

the following fees were incurred for services provided by warth & Klein grant thornton ag

wirtschaftsprüfungsgesellschaft, düsseldorf for the 2011 financial year:

fees for audits include remuneration for auditing the consolidated financial statements and for auditing

the financial statements of spsh and its domestic subsidiaries.

30 Additional information on financial instruments

financial instruments at the balance sheet date are as follows:

audits

tax consultancy services

other services

2011 2010

220 204

95 103

33 5

348 312

Assets

Valuation at cost of acquisition

long-term loans


accounts receivable from

manufacturing orders



cash on hand, credit balances

at banks and cheques

Valuation at fair value

participations

securities

valuation 31.12.2011 31.12.2011 31.12.2010 31.12.2010

category book value fair value book value fair value

acc. to ias 39

l&r 26 26 38 38

l&r 480 480 0 0

l&r 7,862 7,862 5,021 5,021

l&r 10,393 10,393 8,967 8,967

l&r 1,767 1,767 847 847

l&r 74,194 74,194 84,062 84,062

94,722 94,722 98,935 98,935

afs 146 146 143 143

afs 11,744 11,744 11,835 11,835

11,890 11,890 11,978 11,978

group notes



group notes

80 81

financial instruments are in principle reported as of the date of performance.

liquid funds, trade accounts receivable and manufacturing orders and other financial assets have mainly

short residual terms. their book values therefore correspond on the balance sheet date approximately

to the fair value. the fair values of long-term financial assets correspond to the cash values of the

payments connected therewith, taking into account the respective current market parameters. the

market valuation of the afs securities gave rise to expenditure of Keur 125 (previous year Keur 11)

and income of Keur 34 (previous year Keur 262).

terms for trade accounts payable and other financial liabilities are generally short. the values reported

in the balance sheet are approximately the fair values. Keur 31,943 (previous year teur 42,518) of

the financial instruments were pledged as security for guarantees.

the group’s financial division provides services for the subsidiaries. it monitors and controls the

financial risks connected with the group’s subsidiaries through internal risk reporting which analyses

risks in terms of scale and scope. these risks include the market risk with interest induced cash flow

risks, foreign currency exposure, default risk and liquidity risk.

the group strives to minimise the impact of such risks through appropriate financial instruments. these

include the hedging of foreign currency transactions stipulated in the group guidelines, and regula-

tions on interest and default risks. regulations on the investment of surplus liquidity are established

in agreement with the management. financial instruments are not used for speculative purposes.

the financial division reports to the respective group management on a monthly basis.

Market risks

1. Interest rate risks

the group is exposed to financial market risks due to fluctuations in interest rates on its cash invest-

ments due to receiving payments on account for financing its orders.

existing interest rate risks are reported according to ifrs 7 in a sensitivity analysis which examines the

effects of hypothetical changes in the market interest rates on the result and equity. if the market

interest level for exposure on the balance sheet date had been 100 base points higher (lower), the

result would have been Keur 916 (previous year Keur 704) higher (higher), and equity Keur 916

(previous year Keur 704) higher (higher).

2. Foreign exchange risks

foreign exchange risks result solely from operating activities. in order to hedge foreign exchange risks,

forward exchange transactions (cash flow hedges) are used. all material foreign exchange risks are

considered in hedge accounting. negative market values of Keur 332 (previous year Keur 48) are

reported under other financial assets and will mostly be completed in the 1st half of 2012 at Keur

162. the cash flow hedges which involve security affecting the balance sheet are Keur 49 (previous

year Keur 39) and for expected future cash flows Keur 283 (previous year Keur 9). the effective

part of the cash flow hedges is reported initially in equity with a neutral effect on the result. at the

time of realising the underlying transaction, the contribution to results of the hedging transaction is

transferred to the statement of comprehensive income.

a sensitivity analysis is conducted to show the market risk from fluctuations in the exchange rate.

we have applied an unfavourable hypothetical change of 10% in the exchange rates of the euro

compared with all currencies based on the year-end exchange rate of these currencies. the estimated

hypothetical loss of cash flows from derivative and non-derivative financial instruments would be Keur

971 (previous year Keur 495). Keur 863 (previous year Keur 296) thereof apply to Kwd and Keur

108 (previous year Keur 198) thereof apply to other currencies.

Keur 883 (previous year Keur 361) of the estimated hypothetical loss apply to derivatives which were

used to hedge our anticipated exposure from planned sales in foreign currency. these transactions

meet the requirements of hedge accounting, the corresponding changes in value are reported in equity

(other comprehensive income).

other losses of Keur 88 (previous year Keur 134) are allocated to account balances in foreign

currencies.

Liabilities

Valuation at cost of acquisition


accounts due to affiliated companies

not included in consolidation


According to valuation categories

loans and receivables (l&r)

available for sale (afs)

financial liabilities at amortised costs (flac)

valuation 31.12.2011 31.12.2011 31.12.2010 31.12.2010

category book value fair value book value fair value

acc. to ias 39

flac 52,624 52,624 63,515 63,515

flac 3 3 2 2

flac 364 364 74 74

52,991 52,991 63,591 63,591

94,722 94,722 98,935 98,935

11,890 11,890 11,978 11,978

52,991 52,991 63,591 63,591

group notes



group notes

82 83

Default risks

the maximum default risk of the financial assets is Keur 32,418 on the balance sheet date (previous

year Keur 26,851) and corresponds to the book values reported in the balance sheet of Keur 32,418

(previous year Keur 26,851).

the risk of accounts receivable from customers can be classified as low due to continuous credit

assessment and a high proportion of payments on account. the default risk for other original financial

instruments shown on the assets side is also considered low because contracting partners are exclusively

public authorities or financial institutions with the best credit-worthiness.

individual value adjustments of financial assets are carried out if the book value of the financial asset is

higher than the cash value of future cash flow. they are triggered by financial difficulties, a customer’s

insolvency, breach of contract, or a customer’s material default in payment.

Liquidity risks

liquidity for the standardkessel baumgarte group means not only solvency in a narrow sense of the

term but also availability of the necessary financial margin for the underlying transaction through

adequate credit lines. to ensure financial liquidity, a liquidity reserve is held in the form of liquid funds

and credit lines for guarantee credits. the group maintains credit lines to banks and credit insurers with

a guarantee facility of Keur 105,000 (previous year Keur 105,000). the following payment commit-

ments (interest payments calculated on the basis of the interest rate at 31.12. and repayments) result

from the financial liabilities in subsequent years:

31 Other financial obligations

the existing guarantee is secured by the pledging of all shares in the companies of the standardkessel

baumgarte group, the assignment of the claims of these companies under insurance contracts, except

for car insurances, and the pledging of credit balances which the group companies maintain at the

lead bank.

other financial obligations are derived largely from tenancy agreements, operative leasing agreements

for cars and office equipment with the following terms:

32 Related parties

apart from the shareholder loan stated in (14), there are no other transactions with related parties

that require disclosure.

a managing shareholder charged a total of Keur 114 (previous year Keur 124) in 2011 for various

brokerage and consulting services.

spsh was granted an option to acquire 35% of the shares in a company by a majority shareholder.

this option can be exercised at any time as long as the majority shareholder holds the relevant shares.

the option price is determined by a fixed factor relating to the nominal value.

the value of the option cannot be reliably determined because of a lack of available information on

the earnings position and performance planning of the company in question.

financial liabilities


31.12.2011


31.12.2010

book value cash flows cash flows cash flows

< 1 year 1-5 years > 5 years

364 364 0 0

74 74 0 0

31.12.2011

31.12.2010

up to 1 year between 1 and 5 years more than 5 years

5.065 4.802 500

2.572 3.168 337

group notes



group notes

84 85

33 Corporate bodies

the managing directors of standardkessel power systems holding gmbh in the 2011 financial year were:

dipl.-ing. Jörg Klaus Klasen, dorsten

filip ackerman, beersel / belgium

dipl.-Ök. lutz reinery, wuppertal

duisburg, 16 march 2012

the management

Jörg Klaus Klasen filip ackerman lutz reinery

Auditor’s Report

we have audited the consolidated financial statements prepared by standardkessel power systems

holding gmbh, duisburg, comprising the balance sheet, statement of comprehensive income, cash

flow statement, statement of changes in equity and the notes to the consolidated financial statements,

together with the group management report for the business year from 1 January to 31 december

2011. the preparation of the consolidated financial statements and the group management report in

accordance with ifrss as adopted by the eu, and the additional requirements of german commercial

law pursuant to § 315a (1) hgb are the responsibility of the parent company´s management. our

responsibility is to express an opinion on the consolidated financial statements and the group

management report based on our audit.

we conducted our audit of the consolidated financial statements in accordance with § 317 hgb

and german generally accepted standards for the audit of financial statements promulgated by the

institut der wirtschaftsprüfer (idw). those standards require that we plan and perform the audit

such that misstatements materially affecting the presentation of the net assets, financial position

and results of operations in the consolidated financial statements in accordance with the applicable

financial reporting framework and in the group management report are detected with reasonable

assurance. Knowledge of the business activities and the economic and legal environment of the group

and expectations as to possible misstatements are taken into account in the determination of audit

procedures. the effectiveness of the accounting-related internal control system and the evidence

supporting the disclosures in the consolidated financial statements and the group management report

are examined primarily on a test basis within the framework of the audit. the audit includes assessing

the annual financial statements of those entities included in consolidation, the determination of entities

to be included in consolidation, the accounting and consolidation principles used and significant

estimates made by management, as well as evaluating the overall presentation of the consolidated

financial statements and the group management report. we believe that our audit provides a

reasonable basis for our opinion.

with the exception of the following qualification our audit has not led to any reservations: in contravention

of §§ 315a (1) and (3), 314 (1) 6 hgb and ias 24.16, the total remuneration earned by the executive

board of standardkessel power systems holding gmbh is not disclosed in the notes to the consolidated

financial statements.

in our opinion, based on the findings of our audit, the consolidated financial statements of standardkessel

power systems holding gmbh for the business year from 1 January to 31 december 2011 with this

qualification comply with the ifrss as adopted by the eu, and the additional requirements of german

commercial law pursuant to § 315a (1) hgb and give a true and fair view of the net assets, financial

position and results of operations of the group in accordance with these requirements. the group

management report is consistent with consolidated financial statements which comply with the ifrss

and the additional german commercial law regulations to be applied according to § 315a (1) hgb and

as a whole provides a suitable view of the group’s position and suitably presents the opportunities and

risks of future development.

düsseldorf, 16 march 2012

warth & Klein grant thornton ag

wirtschaftsprüfungsgesellschaft

dipl.-Kfm. Joachim riese dipl.-Kfm. wolfgang pätzold

wirtschaftsprüfer wirtschaftsprüfer

group notes



group notes

86 87 86

Standardkessel GmbHbaldusstrasse 13

47138 duisburg, germany

phone: +49 (0) 203-452-0

fax: +49 (0) 203-452-211

[email protected]

www.standardkessel.de

Baumgarte Boiler Systems GmbHsenner strasse 115

33647 bielefeld, germany

phone: +49 (0) 521-94 06-0

fax: +49 (0) 521-94 06-132

[email protected]

www.baumgarte.com

Standardkessel Baumgarte Service GmbHbaldusstrasse 13


phone: +49 (0) 203-452-0

fax: +49 (0) 203-452-211

[email protected]

www.skg-bbs-service.de

Environment & Power Company Ltd.dammam al-Khobar coastal rd.

al-Khobar 31952, saudi arabia

phone: +966 3858 8510

fax: +966 3858 8513

[email protected]

emc Germany GmbHduisburger strasse 375

46049 oberhausen, germany

phone: +49 (0) 208-30 66 83-0

fax: +49 (0) 208-30 66 83-99

[email protected]

www.emc.biz

emc Standardkessel Baumgarte Kazakhstan LLPalikhan bokeikhan street 47

120001 Kyzylorda, Kazakhstan

phone: +7 7242-23 88-91

fax: +7 7242-23 88-95

[email protected]

www.emc-Kazakhstan.com

Standardkessel Baumgarte Contracting GmbHbaldusstrasse 13


phone: +49 (0) 203-452-0

fax: +49 (0) 203-452-211

[email protected]

www.sbcontracting.de

UK Bioenergy Ltd. office

century business centre

manvers way

s63 5da rotherham, great britain

phone: +44 1709-300-160

[email protected]

www.uK-bioenergy.com

Documents

ANNUAL REPORT 2011 - Standardkessel Baumgarte...Standardkessel Power Systems Holding GmbH Baldusstrasse 13 47138 Duisburg / Germany Phone: +49 (0) 203-452-0 Fax: +49 (0) 203-452-935