EXCHANGE COMMISSION
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
(Address of principal executive offices and Zip Code)
Registrant’s telephone number, including area code
(Former name or former address, if changed since last report)
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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1. | Report of the Audit of the Annual Statement of Accounts as of December 31, 2004; | |
2. | Report of the Audit of the Annual Statement of Accounts as of December 31, 2003; and | |
3. | Unaudited Interim Financial Information for the Six Months Ended June 30, 2005. |
1. | Report of the Audit of the Annual Statement of Accounts as of December 31, 2004; | |
2. | Report of the Audit of the Annual Statement of Accounts as of December 31, 2003; and | |
3. | Unaudited Interim Financial Information for the Six Months Ended June 30, 2005. |
1. | Unaudited Pro Forma Consolidated Balance Sheet as at April 30, 2005; | |
2. | Unaudited Pro Forma Consolidated Statement of Operations for the Nine Months Ended April 30, 2005; | |
3. | Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended July 31, 2004; and | |
4. | Notes to the Unaudited Pro Forma Consolidated Financial Statements. |
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Report on the Audit of the | ||
Financial Statements in accordance with IFRS on 31 December 2004 | ||
of | ||
AWP Aluminium Walzprodukte GmbH | ||
Berlin | ||
Verhülsdonk & Partner GmbH | ||
Auditing Company | ||
Tax Consulting Company |
I. Audit Order | 1 | |||
II. Principle Findings | 2 | |||
1. Findings in accordance with Art. 321 Sec.1 No. 3 GCC | 2 | |||
1.1 Issues inhibiting the development or endangering the continuation | 2 | |||
1.2 Observation of other statutory and corporate contractual regulations | 3 | |||
III. Object, Type and Scope of Audit | 3 | |||
IV. Findings and Notes on the Consolidated Accounting | 5 | |||
1. Truth and fairness of the consolidated accounting | 5 | |||
1.1 Principles of the consolidated accounting | 5 | |||
1.2 Consolidation group and consolidation date | 5 | |||
1.3 Truthfulness of the financial statements included in the consolidated financial statements | 6 | |||
1.4 Truthfulness of the consolidation measures taken | 6 | |||
1.4.1 Compilation of the consolidated financial statements | 6 | |||
1.4.2 Consolidation principles | 6 | |||
1.5. Consolidated Financial Statements | 7 | |||
2. Overall statement of the consolidated financial statements | 7 | |||
3. Assets, Finances and Earnings Situation | 7 | |||
V. Reproduction of Audit Opinion and Final Comment | 8 |
1 | Consolidated Balance Sheet for 31 December 2004 | |
2 | Consolidated Profit & Loss Account for Financial Year 2004 | |
3 | Group Notes for Financial Year 2004 | |
4 | Audit Opinion | |
5 | Legal and Commercial Situation | |
6 | General Terms and Conditions for Auditors and Audit Companies from 1 January 2002 |
Berlin
(hereinafter also referred to as “company” or “AWP”)
• | Audit of the capital consolidation; | ||
• | Audit of the completeness and accuracy of the debt and earnings consolidation. |
1.3 | Truthfulness of the financial statements included in the consolidated financial statements |
1.4 | Truthfulness of the consolidation measures taken |
1.4.1 | Compilation of the consolidated financial statements |
1.4.2 | Consolidation principles |
a) | Capital consolidation |
b) | Debt consolidation |
c) | Handling of interim profits |
d) | Consolidation of earnings and expenses |
1.5 | Consolidated financial statements |
2. | Overall statement of the consolidated financial statements |
• | The goodwill was not written off as scheduled in the reporting year. |
3. | Assets, finances and earnings situation |
V. | Reproduction of Audit Opinion and Final Comment |
Verhülsdonk & Partner GmbH | ||||
Auditors | ||||
Tax advisors | ||||
Konrad Pochhammer | ||||
Auditor |
Verhülsdonk & Partner GmbH Auditors Tax Advisors | ||
Konrad Pochhammer | ||
Auditor |
AWP Aluminium Walzprodukte GmbH, Berlin | Appendix 1 | |
31.12.2003 | ||||||||||||
€ | € | T€ | ||||||||||
A. Current assets | ||||||||||||
I. Liquid funds | ||||||||||||
Credit at banks, cash on hand | 241,409.23 | 148 | ||||||||||
II. Receivables | ||||||||||||
1. Receivables from unconsolidated companies | 199,428.13 | 835 | ||||||||||
2. Tax receivables | 17,948.41 | 16 | ||||||||||
3. Other receivables and assets | 245,338.14 | 462,714.68 | 119 | |||||||||
III. Stocks | ||||||||||||
1. Raw materials and supplies | 904,260.94 | 61 | ||||||||||
2. Unfinished good | 1,780,534.04 | 2,211 | ||||||||||
3. Finished products and goods | 582,920.51 | 3,267,715.49 | 758 | |||||||||
IV. Pre-payments and deferred charges | 4,000.00 | 22 | ||||||||||
B. Fixed assets | ||||||||||||
I. Intangible assets | ||||||||||||
1. Software | 0.00 | 0 | ||||||||||
2. Goodwill | 1,006,678.99 | 1,006,678.99 | 1,007 | |||||||||
II. Tangible assets | ||||||||||||
1. Technical equipment, operating equipment and furnishings | 205,462.00 | 242 | ||||||||||
2. On-account payments and construction in progress | 0.00 | 205,462.00 | 0 | |||||||||
5,187,980.39 | 5,419 | |||||||||||
31.12.2003 | ||||||||||||
€ | € | T€ | ||||||||||
A. Equity | ||||||||||||
I. Subscribed capital | 25,000.00 | 25 | ||||||||||
II. Balance sheet loss | -572,538.13 | -547,538.13 | -376 | |||||||||
B. Provisions | ||||||||||||
Other provisions | 141,000.00 | 103 | ||||||||||
C. Payables | ||||||||||||
1. Bank Payables | 0.00 | 1,060 | ||||||||||
2. Trade Payables | ||||||||||||
— To Third Parties | 3,438,859.62 | 4,330 | ||||||||||
— Inter Company Payables | 253,567.94 | 277 | ||||||||||
— Other related party payables | 9,793,91 | 0 | ||||||||||
3. Other Payables | 1,892,297.05 | |||||||||||
5,594,518.52 | 5,594,518.52 | |||||||||||
5,187,980.39 | 5,419 | |||||||||||
AWP Aluminium Walzprodukte GmbH, | Appendix 2 | |
Berlin |
for the period of 1 Jan. 2004 till 31 Dec. 2004
1.01.-31.12.03 | ||||||||
€ | T€ | |||||||
1. Sales revenues | 29,744,501.60 | 26,941 | ||||||
2. Other operating income | 606,360.13 | 276 | ||||||
3. Costs of materials | -25,958,976.80 | -22,719 | ||||||
4. Gross profit | 4,391,884.93 | 4,498 | ||||||
5. Personnel expenses | -2,182,418.57 | -2,132 | ||||||
6. Depreciation on intangible assets of the fixed assets and tangible assets | -51,666.63 | -50 | ||||||
7. Other operating expenses | -2,083,083.68 | -2,374 | ||||||
8. EBIT | 74,716.05 | -58 | ||||||
9. Other interest and similar earnings | 0.00 | 0 | ||||||
10. Depreciation on financial investments and securities of the current assets | 0.00 | 0 | ||||||
11. Interest and similar expenses | -270,677.67 | -261 | ||||||
12. Result from business operations | -195,961.62 | -319 | ||||||
13. Taxes on income and earnings | 0.00 | 0 | ||||||
14. Other taxes | -277.00 | 0 | ||||||
15. Annual profit / loss | -196,238.62 | -319 | ||||||
Appendix 3 | ||
Page 1 |
Balance sheet total 2004:€ 4,296,491
Sales revenues 2004:€ 29,744,502
Annual loss 2004:€63,427
Appendix 3 | ||
Page 2 |
Appendix 3 | ||
Page 3 |
Appendix 3 | ||
Page 4 |
Appendix 3 | ||
Page 5 |
Status | ||||||||||||||||||||
Provision kind | 1.01.2004 | Expenditure | Writing Back | Addition | Status 31.12.2004 | |||||||||||||||
Professional Association | € | 8,000.00 | € | 8,000.00 | € | 4,000.00 | € | 4,000.00 | ||||||||||||
Litigations | € | 5,000.00 | € | 4,330.17 | € | 669.83 | € | 79,000.00 | € | 79,000.00 | ||||||||||
Holiday Obligations | € | 34,000.00 | € | 34,000.00 | € | 30,000.00 | € | 30,000.00 | ||||||||||||
Consult New Era / Mansfeld | € | 30,000.00 | € | 30,000.00 | € | — | ||||||||||||||
Audit | € | 21,250.00 | € | 20,000.00 | € | 26,750.00 | € | 28,000.00 | ||||||||||||
Guarantee | € | 5,000.00 | € | 5,000.00 | € | — | € | — | ||||||||||||
Total | € | 103,250.00 | € | 101,330.17 | € | 669.83 | € | 139,750.00 | € | 141,000.00 | ||||||||||
Appendix 3 | ||
Page 6 |
AWP Aluminium Walzprodukte GmbH, | Appendix 3 | |
Berlin | Page 7 |
Purchase and production costs | Cumulative write-offs | Book value | ||||||||||||||||||||||||||||||||||||||||||||||
1/1/2004 | Additions | Retirements | Transfers | 12/31/2004 | 1/1/2004 | Additions | Retirements | Transfers | 12/31/2004 | 12/31/2004 | 12/31/2003 | |||||||||||||||||||||||||||||||||||||
€ | € | € | € | € | € | € | € | € | € | € | € | |||||||||||||||||||||||||||||||||||||
I. Intangible fixed assets | ||||||||||||||||||||||||||||||||||||||||||||||||
1. Goodwill | 1,006,678.99 | 0.00 | 0.00 | 0.00 | 1,006,678.99 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,006,678.99 | 1,006,678.99 | ||||||||||||||||||||||||||||||||||||
2. Licenses, brands and similar rights | 3,738.92 | 0.00 | 0.00 | 0.00 | 3,738.92 | 3,694.92 | 44.00 | 0.00 | 0.00 | 3,738.92 | 0.00 | 44.00 | ||||||||||||||||||||||||||||||||||||
1,010,417.91 | 0.00 | 0.00 | 0.00 | 1,010,417.91 | 3,694.92 | 44.00 | 0.00 | 0.00 | 3,738.92 | 1,006,678.99 | 1,006,722.99 | |||||||||||||||||||||||||||||||||||||
II. Fixed assets | ||||||||||||||||||||||||||||||||||||||||||||||||
1. Technical equipment, machines, office equipment | 501,080.35 | 14,951.63 | 0.00 | 0.00 | 516,031.98 | 258,947.35 | 51,622.63 | 0.00 | 0.00 | 310,569.98 | 205,462.00 | 242,133.00 | ||||||||||||||||||||||||||||||||||||
2. On-account payments and construction in progress | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||||||||||||
501,080.35 | 14,951.63 | 0.00 | 0.00 | 516,031.98 | 258,947.35 | 51,622.63 | 0.00 | 0.00 | 310,569.98 | 205,462.00 | 242,133.00 | |||||||||||||||||||||||||||||||||||||
Total fixed assets | 1,511,498.26 | 14,951.63 | 0.00 | 0.00 | 1,526,449.89 | 262,642.27 | 51,666.63 | 0.00 | 0.00 | 314,308.90 | 1,212,140.99 | 1,248,855.99 | ||||||||||||||||||||||||||||||||||||
AWP Aluminium Walzprodukte GmbH, | Appendix 3 | |
Berlin | Page 8 |
Base capital | Capital reserves | Balance sheet loss | Total | |||||||||||||
€ | € | € | € | |||||||||||||
1 January 2004 | 25,000.00 | 0.00 | -376,299.51 | -351,299.51 | ||||||||||||
Additions by shareholders | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
Annual result 2004 | 0.00 | 0.00 | -196,238.62 | -196,238.62 | ||||||||||||
31 December 2004 | 25,000.00 | 0.00 | -572,538.13 | -547,538.13 | ||||||||||||
AWP Aluminium Walzprodukte GmbH, | Appendix 3 | |
Berlin | Page 9 |
2004 | 2003 | |||||||||||
T€ | T€ | T€ | ||||||||||
Annual loss | -196 | -319 | ||||||||||
+ Depreciation on tangible and intangible fixed assets | 52 | 50 | ||||||||||
+ Depreciation of financial assets and securities of the current assets | 0 | 0 | ||||||||||
- ctivation of reserves | 0 | 0 | ||||||||||
- Additions to the financial assets and securities of the current assets | 0 | 0 | ||||||||||
Cashflow in the narrow sense | -144 | -269 | ||||||||||
-/+ Increase/Decrease of the stocks, trade receivables and other assets | 288 | -33 | ||||||||||
+/- Increase/Decrease of the short-term provisions | 38 | 8 | ||||||||||
+/- Increase/Decrease of the trade payables and other liabilities | 986 | 1,312 | 364 | |||||||||
Cashflow from operations | 1,168 | 70 | ||||||||||
- Investments in other intangible assets and tangible fixed assets | -15 | -96 | ||||||||||
- Shares in associated companies | 0 | 0 | ||||||||||
- Loans to companies, with which a participation exists | 0 | 0 | ||||||||||
- Investments in participations and securities | 0 | 0 | ||||||||||
+ Investment retirements of intangible assets and tangible assets at net book values | 0 | 4 | ||||||||||
Cashflow investments | -15 | -92 | ||||||||||
+ Deposits from capital additions | 0 | 0 | ||||||||||
- Payments from premiums of credits | 0 | 0 | ||||||||||
- Balance of deposits/withdrawals from claims/repayments of current account payables | -1,060 | 74 | ||||||||||
Cashflow financial activities | -1,060 | 74 | ||||||||||
The funds changed as follows | ||||||||||||
Cashflow from business operations | 1,168 | 70 | ||||||||||
Cashflow from investments | -15 | -92 | ||||||||||
Cashflow from financial activities | -1,060 | 74 | ||||||||||
Changes in funds | 93 | 53 | ||||||||||
+ Funds at beginning of year | 148 | 96 | ||||||||||
= Funds at end of year | 241 | 148 | ||||||||||
Page 1
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Auditors
Tax advisors
Auditor
Page 1
[German Public Auditors and Public Audit Firms]
as of January 1, 2002
Page 2
a) | preparation of annual tax returns for income tax, corporation tax and business tax, as well as net worth tax returns on the basis of the annual financial statements and other schedules and evidence required for tax purposes to be submitted by the client | ||
b) | examination of tax assessments in relation to the taxes mentioned in (a) | ||
c) | negotiations with tax authorities in connection with the returns and assessments mentioned in (a) and (b) | ||
d) | participation in tax audits and evaluation of the results of tax audits with respect to the taxes mentioned in (a) | ||
e) | participation in Einspruchs- und Beschwerdeverfahren [appeals and complaint procedures] with respect to the taxes mentioned in (a). |
a) | the treatment of nonrecurring tax matters, e. g. in the field of estate tax, capital transactions tax, real estate acquisition tax | ||
b) | participation and representation in proceedings before tax and administrative courts and in criminal proceedings with respect to taxes, and | ||
c) | the granting of advice and work with respect to expert opinions in connection with conversions of legal form, mergers, capital increases and reductions, financial reorganizations, admission and retirement of partners or shareholders, sale of a business, liquidations and the like. |
Report on the Audit of the | ||
Financial Statements in accordance with | ||
IFRS on 31 December 2003 | ||
of | ||
AWP Aluminium Walzprodukte GmbH | ||
Berlin | ||
Verhülsdonk & Partner GmbH | ||
Auditing Company | ||
Tax Consulting Company |
I. Audit Order | 1 | |||
II. Principle Findings | 2 | |||
1. Findings in accordance with Art. 321 Sec.1 No. 3 GCC | 2 | |||
1.1 Issues inhibiting the development or endangering the continuation | 2 | |||
1.2 Observation of other statutory and corporate contractual regulations | 3 | |||
III. Object, Type and Scope of Audit | 3 | |||
IV. Findings and Notes on the Consolidated Accounting | 5 | |||
1. Truth and fairness of the consolidated accounting | 5 | |||
1.1 Principles of the consolidated accounting | 5 | |||
1.2 Consolidation group and consolidation date | 5 | |||
1.3 Truthfulness of the financial statements included in the consolidated financial statements | 6 | |||
1.4 Truthfulness of the consolidation measures taken | 6 | |||
1.4.1 Compilation of the consolidated financial statements | 6 | |||
1.4.2 Consolidation principles | 6 | |||
1.5. Consolidated Financial Statements | 7 | |||
2. Overall statement of the consolidated financial statements | 7 | |||
3. Assets, Finances and Earnings Situation | 7 | |||
V. Reproduction of Audit Opinion and Final Comment | 8 |
1 | Consolidated Balance Sheet for 31 December 2003 | |
2 | Consolidated Profit & Loss Account for Financial Year 2003 | |
3 | Group Notes for Financial Year 2003 | |
4 | Audit Opinion | |
5 | Legal and Commercial Situation | |
6 | General Terms and Conditions for Auditors and Audit Companies from 1 January 2002 |
Berlin
1. | Findings in accordance with Art. 321 Sec. 1 No. 3 GCC | |
1.1 | Issues inhibiting the development or endangering the continuation |
1.2 | Observation of other statutory and corporate contractual regulations |
• | Audit of the capital consolidation; |
• | Audit of the completeness and accuracy of the debt and earnings consolidation. |
IV. | Findings and Notes on the Consolidated Accounting |
1. | Truth and fairness of the consolidated accounting |
1.1 | Principles of the consolidated accounting |
1.2 | Consolidation group and consolidation date |
1.3 | Truthfulness of the financial statements included in the consolidated financial statements |
1.4 | Truthfulness of the consolidation measures taken |
1.4.1 | Compilation of the consolidated financial statements |
1.4.2 | Consolidation principles |
a) | Capital consolidation |
b) | Debt consolidation |
c) | Handling of interim profits |
d) | Consolidation of earnings and expenses |
1.5 | Consolidated financial statements |
2. | Overall statement of the consolidated financial statements |
• | The goodwill was not written off as scheduled in the reporting year. |
3. | Assets, finances and earnings situation |
V. | Reproduction of Audit Opinion and Final Comment | |
With the conclusion of our audit, on 19 August 2005, we grant the following unqualified audit opinion of the financial statements and the management report of the AWP Aluminium Walzprodukte GmbH, Berlin, on 31 December 2003 (appendices 1 to 3): |
Verhülsdonk & Partner GmbH | ||
Auditors | ||
Tax advisors | ||
Konrad Pochhammer | ||
Auditor |
Auditors
Tax Advisors
AWP Aluminium Walzprodukte GmbH, | Appendix 1 | |
Berlin |
31.12.2002 | ||||||||||||
€ | € | T€ | ||||||||||
A. Current assets | ||||||||||||
I. Liquid funds | ||||||||||||
Credit at banks, cash on hand | 148,327.80 | 96 | ||||||||||
II. Receivables | ||||||||||||
1. Receivables from unconsolidated companies | 834,808.81 | 1,043 | ||||||||||
2. Tax receivables | 16,344.82 | 49 | ||||||||||
3. Other receivables and assets | 118,453.65 | 969,607.28 | 147 | |||||||||
III. Stocks | ||||||||||||
1. Raw materials and supplies | 60,990.99 | 62 | ||||||||||
2. Unfinished good | 2,211,454.70 | 2,159 | ||||||||||
3. Finished products and goods | 757,618.91 | 3,030,064.60 | 518 | |||||||||
IV. Pre-payments and deferred charges | 22,334.00 | 10 | ||||||||||
B. Fixed assets | ||||||||||||
I. Intangible assets | ||||||||||||
1. Software | 44.00 | 1 | ||||||||||
2. Goodwill | 1,006,678.99 | 1,006,722.99 | 1,007 | |||||||||
II. Tangible assets | ||||||||||||
1. Technical equipment, operating equipment and furnishings | 242,133.00 | 196 | ||||||||||
2. On-account payments and construction in progress | 0.00 | 242,133.00 | 4 | |||||||||
5,419,189.67 | 5,292 | |||||||||||
LIABILITIES | ||||||||||||
A. Equity | ||||||||||||
I. Subscribed capital | 25,000.00 | 25 | ||||||||||
II. Balance sheet loss | -376,299.51 | -351,299.51 | -57 | |||||||||
B. Provisions | ||||||||||||
Other provisions | 103,250.00 | 95 | ||||||||||
C. Payables | ||||||||||||
1. Payables due credit institutions | 1,059,975.01 | 986 | ||||||||||
2. Trade payables | 4,330,124.38 | 3,982 | ||||||||||
3. Other payables | 277,139.79 | 5,667,239.18 | 261 | |||||||||
5,419,189.67 | 5,292 | |||||||||||
Michael Smith, Managing Director |
AWP Aluminium Walzprodukte GmbH, | Appendix 2 | |
Berlin |
for the period of 1 Jan. 2003 till 31 Dec .2003
1.01.-31.12.02 | ||||||||
€ | T€ | |||||||
1. Sales revenues | 26,941,366.67 | 22,621 | ||||||
2. Other operating income | 276,121.51 | 245 | ||||||
3. Costs of materials | -22,719,134.66 | -18,566 | ||||||
4. Gross profit | 4,498,353.52 | 4,300 | ||||||
5. Personnel expenses | -2,132,027.16 | -1,912 | ||||||
6. Depreciation on intangible assets of the fixed assets and tangible assets | -50,403.79 | -58 | ||||||
7. Other operating expenses | -2,373,877.21 | -2,163 | ||||||
8. EBIT | -57,954.64 | 167 | ||||||
9. Other interest and similar earnings | 304.61 | 0 | ||||||
10. Depreciation on financial investments and securities of the current assets | 0.00 | -67 | ||||||
11. Interest and similar expenses | -261,508.43 | -180 | ||||||
12. Result from business operations | -319,158.46 | -80 | ||||||
13. Taxes on income and earnings | 0.00 | 0 | ||||||
14. Other taxes | 0.00 | 0 | ||||||
15. Annual profit / loss | -319,158.46 | -80 | ||||||
Page 1
Balance sheet total 2003:€ 4,696,779
Sales revenues 2004:€ 26,941,367
Annual loss 2004:€ 60,372
Page 2
Page 3
Page 4
Page 5
Provision kind | Status 1.01.2003 | Expenditure | Writing Back | Addition | Status 31.12.2003 | |||||||||||||||
Professional Association | € | — | € | — | € | — | € | 8,000.00 | € | 8,000.00 | ||||||||||
Litigations | € | 15,000.00 | € | 15,000.00 | € | — | € | 5,000.00 | € | 5,000.00 | ||||||||||
Holiday Obligations | € | 35,500.00 | € | 35,500.00 | € | — | € | 34,000.00 | € | 34,000.00 | ||||||||||
Consult New Era / Mansfeld | € | 14,000.00 | € | 12,246.07 | € | 1,753.93 | € | 30,000.00 | € | 30,000.00 | ||||||||||
Audit | € | 25,500.00 | € | 17,000.00 | € | 8,000.00 | € | 20,750.00 | € | 21,250.00 | ||||||||||
Guarantee | € | 5,000.00 | € | 5,000.00 | € | 5,000.00 | € | 5,000.00 | ||||||||||||
Total | € | 95,000.00 | € | 84,746.07 | € | 9,753.93 | € | 102,750.00 | € | 103,250.00 | ||||||||||
Page 6
AWP Aluminium Walzprodukte GmbH, | Appendix 3 | |
Berlin | Page 7 |
Purchase and production costs | Cumulative write-offs | Book value | ||||||||||||||||||||||||||||||||||||||||||||||
1/1/2003 | Additions | Retirements | Transfers | 12/31/2003 | 1/1/2003 | Additions | Retirements | Transfers | 12/31/2003 | 12/31/2003 | 12/31/2002 | |||||||||||||||||||||||||||||||||||||
€ | € | € | € | € | € | € | € | € | € | € | € | |||||||||||||||||||||||||||||||||||||
I. Intangible fixed assets | ||||||||||||||||||||||||||||||||||||||||||||||||
1. Goodwill | 1,006,678.99 | 0.00 | 0.00 | 0.00 | 1,006,678.99 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,006,678.99 | 1,006,678.99 | ||||||||||||||||||||||||||||||||||||
2. Licenses, brands and similar rights | 3,738.92 | 0.00 | 0.00 | 0.00 | 3,738.92 | 2,885.92 | 809.00 | 0.00 | 0.00 | 3,694.92 | 44.00 | 853.00 | ||||||||||||||||||||||||||||||||||||
1,010,417.91 | 0.00 | 0.00 | 0.00 | 1,010,417.91 | 2,885.92 | 809.00 | 0.00 | 0.00 | 3,694.92 | 1,006,722.99 | 1,007,531.99 | |||||||||||||||||||||||||||||||||||||
II. Fixed assets | ||||||||||||||||||||||||||||||||||||||||||||||||
1. Technical equipment, machines, office equipment | 405,329.56 | 53,582.94 | 0.00 | 42,167.85 | 501,080.35 | 209,352.56 | 49,594.79 | 0.00 | 0.00 | 258,947.35 | 242,133.00 | 195,977.00 | ||||||||||||||||||||||||||||||||||||
2. On-account payments and construction in progress | 4,157.26 | 42,167.85 | 4,157.26 | -42,167.85 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 4,157.26 | ||||||||||||||||||||||||||||||||||||
409,486.82 | 95,750.79 | 4,157.26 | 0.00 | 501,080.35 | 209,352.56 | 49,594.79 | 0.00 | 0.00 | 258,947.35 | 242,133.00 | 200,134.26 | |||||||||||||||||||||||||||||||||||||
Total fixed assets | 1,419,904.73 | 95,750.79 | 4,157.26 | 0.00 | 1,511,498.26 | 212,238.48 | 50,403.79 | 0.00 | 0.00 | 262,642.27 | 1,248,855.99 | 1,207,666.25 | ||||||||||||||||||||||||||||||||||||
AWP Aluminium Walzprodukte GmbH, | ||
Berlin | Appendix 3 Page 8 |
Base capital | Capital reserves | Balance sheet loss | Total | |||||||||||||
€ | € | € | € | |||||||||||||
1 January 2003 | 25,000.00 | 0.00 | -57,141.05 | -32,141.05 | ||||||||||||
Additions by shareholders | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||
Annual result 2003 | 0.00 | 0.00 | -319,158.46 | -319,158.46 | ||||||||||||
31 December 2003 | 25,000.00 | 0.00 | -376,299.51 | -351,299.51 | ||||||||||||
AWP Aluminium Walzprodukte GmbH, | ||
Berlin | Appendix 3 Page 9 |
2003 | ||||||||||
T€ | T€ | |||||||||
Annual loss | -319 | |||||||||
+ | Depreciation on tangible and intangible fixed assets | 50 | ||||||||
+ | Depreciation of financial assets and securities of the current assets | 0 | ||||||||
- | ctivation of reserves | 0 | ||||||||
- | Additions to the financial assets and securities of the current assets | 0 | ||||||||
Cashflow in the narrow sense | -269 | |||||||||
-/+ | Increase/Decrease of the stocks, trade receivables and other assets | -33 | ||||||||
+/- | Increase/Decrease of the short-term provisions | 8 | ||||||||
+/- | Increase/Decrease of the trade payables and other liabilities | 364 | 339 | |||||||
Cashflow from operations | 70 | |||||||||
- | Investments in other intangible assets and tangible fixed assets | -96 | ||||||||
- | Shares in associated companies | 0 | ||||||||
- | Loans to companies, with which a participation exists | 0 | ||||||||
- | Investments in participations and securities | 0 | ||||||||
+ | Investment retirements of intangible assets and tangible assets at net book values | 4 | ||||||||
Cashflow investments | -92 | |||||||||
+ | Deposits from capital additions | 0 | ||||||||
- | Payments from premiums of credits | 0 | ||||||||
- | Balance of deposits/withdrawals from claims/repayments of current account payables | 74 | ||||||||
Cashflow financial activities | 74 | |||||||||
The funds changed as follows | ||||||||||
Cashflow from business operations | 70 | |||||||||
Cashflow from investments | -92 | |||||||||
Cashflow from financial activities | 74 | |||||||||
Changes in funds | 52 | |||||||||
+ | Funds at beginning of year | 96 | ||||||||
= | Funds at end of year | 148 | ||||||||
Page 1
Page 2
Auditors
Tax advisors
Auditor
Page 1
[German Public Auditors and Public Audit Firms]
as of January 1, 2002
Page 2
a) | preparation of annual tax returns for income tax, corporation tax and business tax, as well as net worth tax returns on the basis of the annual financial statements and other schedules and evidence required for tax purposes to be submitted by the client | ||
b) | examination of tax assessments in relation to the taxes mentioned in (a) | ||
c) | negotiations with tax authorities in connection with the returns and assessments mentioned in (a) and (b) | ||
d) | participation in tax audits and evaluation of the results of tax audits with respect to the taxes mentioned in (a) | ||
e) | participation in Einspruchs- und Beschwerdeverfahren [appeals and complaint procedures] with respect to the taxes mentioned in (a). |
a) | the treatment of nonrecurring tax matters, e. g. in the field of estate tax, capital transactions tax, real estate acquisition tax | ||
b) | participation and representation in proceedings before tax and administrative courts and in criminal proceedings with respect to taxes, and | ||
c) | the granting of advice and work with respect to expert opinions in connection with conversions of legal form, mergers, capital increases and reductions, financial reorganizations, admission and retirement of partners or shareholders, sale of a business, liquidations and the like. |
Unaudited Consolidated Financial Statements
June 30, 2005
Consolidated Balance Sheet
As at June 30, 2005 and December 31, 2004
2005 | 2004 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Liquid Funds | ||||||||
Credit at banks, cash on hand | € | 459,838 | € | 241,409 | ||||
Receivables | ||||||||
Receivables | 276,844 | 199,428 | ||||||
Related parties | 131,364 | — | ||||||
Tax receivables | 20,943 | 17,949 | ||||||
Other receivables and assets | 190,245 | 245,338 | ||||||
619,396 | 462,715 | |||||||
Stocks | ||||||||
Raw materials and supplies | 778,398 | 904,261 | ||||||
Unfinished good | 2,377,860 | 1,780,534 | ||||||
Finished products and goods | 507,126 | 582,920 | ||||||
3,663,384 | 3,267,715 | |||||||
Prepayments and deferred charges | — | 4,000 | ||||||
Fixed assets | ||||||||
Goodwill | 1,006,679 | 1,006,679 | ||||||
Technical equipment, operating equipment and furnishings | 192,618 | 205,462 | ||||||
€ | 5,941,915 | € | 5,187,980 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Equity | ||||||||
Subscribed capital | € | 25,000 | € | 25,000 | ||||
Balance sheet loss | (1,014,769 | ) | (572,538 | ) | ||||
(989,769 | ) | (547,538 | ) | |||||
Provisions | 143,015 | 141,000 | ||||||
Payables | ||||||||
Trade payables | 4,472,223 | 3,438,859 | ||||||
Related parties, subordinated | 567,487 | 263,362 | ||||||
Other payables | 688,984 | 1,892,297 | ||||||
5,728,694 | 5,594,518 | |||||||
Long-term debt, related party and subordinated | 1,059,975 | — | ||||||
€ | 5,941,915 | € | 5,187,980 | |||||
Consolidated Income statement
For Six Months Ended June 30, 2005 and 2004
(Unaudited)
2005 | 2004 | |||||||
Sales revenues | € | 16,629,013 | € | 16,310,724 | ||||
Other operating income | 282,706 | 244,615 | ||||||
Cost of materials | 15,070,277 | 14,311,715 | ||||||
Gross profit | 1,841,442 | 2,243,624 | ||||||
Personnel expenses | 1,169,681 | 1,078,867 | ||||||
Depreciation | 28,250 | 25,222 | ||||||
Other operating expenses | 1,011,857 | 1,089,521 | ||||||
Operating income (loss) | (368,346 | ) | 50,014 | |||||
Other interest and similar expenses | 73,806 | 154,584 | ||||||
Result from business operations | (442,152 | ) | (104,570 | ) | ||||
Other Taxes | 79 | — | ||||||
Net loss of the period | € | (442,231 | ) | € | (104,570 | ) | ||
Notes to Unaudited Consolidated Financial Statements
June 30, 2005
of the Annual Statement
of accounts as of
31stof December, 2004
August-Bebel-Strasse 1
Certified Auditor
Fulda — Weimar
PAGE | ||||||||
Main Part | ||||||||
1. | Order of Auditing | 5 | ||||||
2. | General Statement | 7 | ||||||
2.1 | Statement of Affairs of the Company’s Situation | 7 | ||||||
3. | Subject, Manner and Scope of the Audit | 9 | ||||||
3.1 | Subjects of the Audit | 9 | ||||||
3.2 | Manner and Scope of the Audit | 10 | ||||||
4. | Established Facts and Explanations concerning the Accounting | 12 | ||||||
4.1 | Adequacy of Accounting | 12 | ||||||
4.1.1 | Bookkeeping and other Audited Documents | 12 | ||||||
4.1.2 | Annual Statement of Accounts | 13 | ||||||
4.1.3 | Statement of Affairs | 14 |
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PAGE | ||||||||
4.2 | Financial Position, Financial Situation and Earnings | 15 | ||||||
4.2.1 | Financial Situation and Capital Structure | 15 | ||||||
4.2.2 | Profit Situation | 18 | ||||||
5. | Certification of the Financial Statement | 19 | ||||||
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Exhibit | ||||
Balance Sheet | 1 | |||
Statement of Fixed Assets | 2 | |||
Income Statement | 3 | |||
Appendage for the Business Year 2004 | 4 | |||
Legal Conditions | 5 | |||
Tax Conditions | 6 | |||
Explanatory Comment | 7 | |||
Management Report | 8 | |||
The Contracts of Adequate and Orderly Reporting for Auditors | 9 |
-4-
1. | Order of Auditing | |
The shareholder’s meeting on the 23th March 2004 of the |
( in the following also called “company”)
decided to appoint me to audit the business year from 1stJanuary 2004 to 31th December 2004. The management of the company assigned me to audit the annual statement of accounts under including of the bookkeeping in adequate employment on sections 316 and 317 of the Commercial Code. | ||
The company is according to the orders of section 267 of the Commercial Code as a midsize corporation and therefore a subject to statutory audit suitable to sections 316 ff of the Commercial Code. | ||
As expected I prepared a commentary which is added as exhibit 5. The explanatory comment includes breakdowns and references to the items of the annual statement to the 31st December 2004 under representation of the previous year. | ||
The order of Auditing given to me stand no exemptions according to section 319 of the Commercial Code; Sections 49 and 53 WPO and sections 20ff of my code of professional guidelines in the way. | ||
I have done my auditing with interrupts in February 2005 in the rooms of the MFC aluminiumfolie merseburg gmbh and ended on 28st February 2005. | ||
All informations and references I asked for were given. The management of the company written certified the completeness of the financial statement and the status report. | ||
Manner and scope of my audit I hold down in the working papers. | ||
Of the result of my auditing I reimburse the following report. |
-5-
I have added the proved financial statement, existing of balance sheet ( exhibit 1 ), income statement ( exhibit 3 ) and appendix ( exhibit 4 ). | ||
Extensive explanation of the balance sheet’s and income statement’s items are shown in exhibit 5. | ||
I have prepared this audit report according to“the contracts of adequate and orderly reporting for auditors” from the institute of qualified auditors e.V. (IDW), Düsseldorf. | ||
The general terms of contract included as exhibit 6 to this report, the version 1st of January 2002 for auditors and auditing companies, shall be authoritative for the execution of this task and will be under my responsibility, which is also, in this case, regarding third parties. | ||
The report is not to be given away on third parties. As far as it is given to third parties respectively presented to third, with my approval, the company is obligated to certify written with them, that the agreed extent of liability also matters for eventually third-party claims on my person. |
-6-
2. | General Statements |
2.1 | Statement of Affairs of the Company’s Situation |
Course of business and status of the company |
in the 2004 business year and gives a prospect of the future development
in the business activities of MFC aluminiumfolie merseburg
gmbh during 2004.
The company’s management shows the development of the turnover in the 2004 business year and explains the central elements of the businessflow of the in the areas production, procurement, maintenance/investment, financing, and personnel. As to the distribution area, the management points out the conclusion of the new- and reconstruction-phase, which forms the business years 2002 and 2003. In the business year 2004 the part of finest aluminiumfoils elevated at ca. 60%. Main output market for the 8.525 t soled aluminiumfoils in 2004 is Europe, herefrom fall 62% on costumers in Germany. | ||
The management considered the earning situation during 2004 under the framework of planning, but considers it as not yet satisfactory. Potentials to increase profits are expected with the improvement of the conditions of purchase and the development of thin aluminiumfoils. This evaluation can be fundamentally followed. |
-7-
Prospective development of the company | ||
The description of the prospective development of the MFC Aluminiumfoil Merseburg GmbH in the status report, bases on assumptions, in which appraisal-freedoms existing. I can say that this descriptions are plausible. In this connection it is to point to the following core concepts: | ||
The risk evaluation is shown in the statement of affairs as well as the outlook deal with the risk of the future development. Sales risks are not expected due to the high market volume in Europe. Activities to compensate the risks connected to the volatility of price development for aluminum are satisfactorily described. |
-8-
3.Subject, Manner and Scope of Audit |
3.1 | Subjects of the Audit |
report and the statement of affairs of MFC aluminiumfolie merseburg
gmbh for the business year ending the 31stDecember, 2004.
The management is responsible for the bookkeeping, the preparation of the annual statement of accounts, and the report on the company’s position. It is my task, to evaluate the annual statement of accounts and the report of the statement of affairs of the company’ situation. | ||
The annual statement of accounts and the report on the statement of affairs of the company’s situation were audited according to the commercial law. | ||
The auditing related to the obedience of other legal rules within the audit of the annual statement of accounts is limited to the question whether effects out of these rules on the statement of accounts or the statement of affairs has to be expected. | ||
A special audit for the exposure of irregularities in the monetary movements and current transactions (embezzlement-audit) was not subject matter of the audit. |
-9-
3.2 | Manner and Scope of the audit |
The audit of the annual statement of a accounts was conducted in accordance with the German Commercial Code (HGB) accounting guidelines of sections 316 ff as well as in conformity to the accounting principles established by the Institute of Auditors in order to judge with sufficient certainty, the audit must be planned and carried out checking, whether or not the bookkeeping, the annual statement of account, and the company’s position are free of considerable faults. | ||
Within the auditing framework, documents used for the bookkeeping statements, the annual statement of accounts, and the company’s position were mainly assessed on the basis of sample audits. | ||
The audit included the assessment of the applied balancing, evaluation and classification principles, the essential appraisal of management, and the assessment of the full annual statement of accounts representation of financial statements and the company’s position. | ||
I am of the opinion that this method of audit will produce a sufficiently safe basis for an evaluation of this audit. | ||
The audit planning was developed from an audit strategy based on risk-free and system-oriented audit approaches. | ||
In order to obtain evidence of the audit’s results, tests, systems and functions, analytical audit activities and individual sample audits were performed. Auditing the debtor’s and creditor’s positions meant to prove the existence of claims and debts through random sample checks of payments received in the following business year. | ||
The management and appointed informants kindly provided me with all of the necessary information and supporting documents I asked for. The management confirmed, by signing the customary professional form of completion, issued by the Institute of Certified Public Auditors in Germany, that all business transactions of the 2004 business year, which are obligatorily subject to the bookkeeping, were entered in the books of MFC Aluminumfolie Merse- |
-10-
burg GmbH, and that all assets and liabilities of the 2004 annual statements of accounts were listed. | ||
I also participated in the inventory checks. I audited the accuracy of the preparation, implementation and evaluation of inventory, and determined, that the inventory is free of material misstatement. Material audits were carried out on the company grounds. | ||
In my audit program identified critical set of goals leaded to the following focus of activities from the audit. | ||
Recognition and appraisal of asset additions Recognition and appraisal from loans to affiliated undertakings Recognition and appraisal from miscellaneous other current assets and other liabilities Recognition and appraisal from accruals | ||
All informations and references I asked for were given. The management of the company written certified the completeness of the financial statement and the status report on the 28st February, 2005. |
-11-
4. | Established Facts and explanations concerning the Accounting |
4.1 | Adequacy of Accounting | ||
4.1.1 | Bookkeeping and other Audited Documents |
The books of MFC aluminiumfolie merseburg gmbh are kept properly according to the established rules. The accounting function was fulfilled. The requirements to fulfill the supporting documents function were met. In my view and according to my performed audit, the bookkeeping and additional supporting documents being reviewed by myself met the basic principles of bookkeeping and the requirements of the law. | ||
Business transactions are registered by computer-aided processes and using the customary bookkeeping software. The bookkeeping programs include the real accounts, as well as the debtor’ s and creditor’s bookkeeping. | ||
The company uses Microsoft’s program “Navision Financial” for the accounting process. |
-12-
4.1.2 | Annual Statement of Accounts |
The balance sheet and the profit and loss accounts have been prepared according to the commercial law of accounting of companies, limited by shares, according to section 267 of the Commercial Code. | ||
The approach, documentation, and evaluation provisions were observed, as well as the steadiness principle according to section 252, section 1, No. 6 of the Commercial Code . | ||
The profit and loss accounts have been prepared according to the overall cost—procedure, according to section 275, section 2 of the Commercial Code. |
-13-
4.1.3 | Statement of Affairs |
The management’s statement of affairs of the company’s complies with the statutory provisions of the commercial law. The statement of affairs matches with the annual statement of accounts as well as with my knowledge I acquired during my audit. My audit has procured the result that the statement of affairs of the company has correctly presented the essential risks and future developments. |
-14-
4.2. | Financial Position, Financial Situation and Earnings | ||
4.2.1 | Financial Situation and Capital Structure |
For the representation of the financial position, the figures mentioned in the balance sheet of 31st of December, 2004 and in the previous year’s balance sheet of the 31st of December, 2003 were analyzed. |
-15-
31.12.2004 | 31.12.2003 | change | ||||||||||||||||||||||
T€ | % | T€ | % | T€ | % | |||||||||||||||||||
A. Fixed Assets | ||||||||||||||||||||||||
I. Intangible assets | ||||||||||||||||||||||||
1. Franchise, trademark, patents, licences and similar rights and licences to such rights | 11,5 | 0,2 | 8,2 | 0,2 | 3,3 | 40,2 | ||||||||||||||||||
II. Property, plant and equipment | ||||||||||||||||||||||||
1. technical equipment, plant and machinery | 376,4 | 8,2 | 250,0 | 5,3 | 126,4 | 50,6 | ||||||||||||||||||
2. operational and office equipment | 162,0 | 3,5 | 59,3 | 1,2 | 102,7 | 173,2 | ||||||||||||||||||
III. Financial Assets | ||||||||||||||||||||||||
1. other loans | 56,2 | 1,2 | 41,6 | 0,9 | 14,6 | 35,1 | ||||||||||||||||||
606,1 | 13,1 | 359,1 | 7,6 | 247,0 | 68,7 | |||||||||||||||||||
B. Current Assets | ||||||||||||||||||||||||
I. Inventories | ||||||||||||||||||||||||
1. raw materials and supplies | 966,4 | 21,0 | 929,2 | 19,7 | 37,2 | 4,0 | ||||||||||||||||||
2. work-in-process | 1.127,7 | 24,5 | 731,5 | 15,4 | 396,2 | 54,2 | ||||||||||||||||||
3. finished goods | 1.211,3 | 26,3 | 1.122,3 | 23,7 | 89,0 | 7,9 | ||||||||||||||||||
II. Account receivable and other assets | ||||||||||||||||||||||||
1. accounts receivable, trade | 127,5 | 2,8 | 163,5 | 3,5 | -36,0 | -22,0 | ||||||||||||||||||
2. accounts due from affiliated companies | 79,5 | 1,7 | 0,0 | 0,0 | 79,5 | 0,0 | ||||||||||||||||||
3. other assets | 239,3 | 5,2 | 187,1 | 4,0 | 52,2 | 27,9 | ||||||||||||||||||
III. Checks, cash on hand and in Federal Bank and in postal giro accounts and cash in banks | 233,1 | 5,1 | 1.229,6 | 26,0 | -996,5 | -81,0 | ||||||||||||||||||
3.984,8 | 86,6 | 4.363,2 | 92,3 | -378,4 | -8,7 | |||||||||||||||||||
C. Deferred charges and prepaid expenses | 13,9 | 0,3 | 3,7 | 0,1 | 10,2 | 275,7 | ||||||||||||||||||
4.604,8 | 100,0 | 4.726,0 | 100,0 | -121,20 | -2,6 | |||||||||||||||||||
-16-
31.12.2004 | 31.12.2003 | change | ||||||||||||||||||||||
T€ | % | T€ | % | T€ | % | |||||||||||||||||||
A. Shareholders’ Equity | ||||||||||||||||||||||||
I. Capital stock | 25,0 | 0,5 | 25,0 | 0,5 | 0,0 | 0,0 | ||||||||||||||||||
II. Accumulated deficit | 19,3 | 0,5 | -2,6 | -0,1 | 21,9 | -842,3 | ||||||||||||||||||
III. Net Income | 24,8 | 0,5 | 21,9 | 0,5 | 2,9 | 13,2 | ||||||||||||||||||
69,1 | 1,5 | 44,3 | 0,9 | 24,8 | 56,0 | |||||||||||||||||||
B. Special Reserves with an Equity Portion | 92,3 | 2,0 | 23,0 | 0,5 | 69,3 | 301,3 | ||||||||||||||||||
C. Reserves and Accrued Liabilities | ||||||||||||||||||||||||
1. pension reserves | 99,9 | 2,2 | 85,2 | 1,8 | 14,7 | 17,3 | ||||||||||||||||||
2. accrued taxes | 6,2 | 0,1 | 9,0 | 0,2 | -2,8 | -31,1 | ||||||||||||||||||
3. other reserves and accrued liabilities | 216,9 | 4,7 | 353,8 | 7,5 | -136,9 | -38,7 | ||||||||||||||||||
323,0 | 7,0 | 448,0 | 9,5 | -125,0 | -27,9 | |||||||||||||||||||
D. Liabilities | ||||||||||||||||||||||||
1. accounts payable, trade | 3.931,3 | 85,4 | 3.965,1 | 83,9 | -33,8 | -0,9 | ||||||||||||||||||
2. accounts due to affiliated companies | 37,4 | 0,8 | 97,1 | 2,1 | -59,7 | -61,5 | ||||||||||||||||||
3. other liabilities | 151,5 | 3,3 | 148,6 | 3,1 | 2,9 | 2,0 | ||||||||||||||||||
4.120,2 | 89,5 | 4.210,8 | 89,1 | -90,6 | -2,2 | |||||||||||||||||||
4.604,6 | 100,0 | 4.726,1 | 100,0 | -121,5 | -2,6 | |||||||||||||||||||
-17-
4.2.2 | Profit Situation |
01.01. bis | 01.01. bis | |||||||||||||||||||||||||
31.12.2004 | 31.12.2003 | change | ||||||||||||||||||||||||
T€ | % | T€ | % | T€ | % | |||||||||||||||||||||
sales | 26.123,1 | 98,0 | 24.069,7 | 100,8 | 2.053,4 | 8,5 | ||||||||||||||||||||
+/– | inventory decrease | 536,5 | 2,0 | -192,1 | -0,8 | 728,6 | -379,3 | |||||||||||||||||||
+ | production for own plant capitalised | 0,0 | 0,0 | 2,7 | 0,0 | -2,7 | -100,0 | |||||||||||||||||||
= | total output | 26.659,6 | 100,0 | 23.880,3 | 100,0 | 2.779,3 | 11,6 | |||||||||||||||||||
+ | other operating income | 638,1 | 2,4 | 393,7 | 1,6 | 244,4 | 62,1 | |||||||||||||||||||
– | costs of material | 24.574,6 | 92,2 | 21.667,9 | 90,7 | 2.906,7 | 13,4 | |||||||||||||||||||
= | gross profit | 2.723,1 | 10,2 | 2.606,1 | 10,9 | 117,0 | 4,5 | |||||||||||||||||||
– | personnel expenses | 1.822,3 | 6,8 | 1.769,6 | 7,4 | 52,7 | 3,0 | |||||||||||||||||||
– | depreciation | 88,9 | 0,3 | 13,9 | 0,1 | 75,0 | 539,6 | |||||||||||||||||||
– | other operating expenses | 775,1 | 2,9 | 799,0 | 3,3 | -23,9 | -3,0 | |||||||||||||||||||
= | operating result | 36,8 | 0,2 | 23,6 | 0,1 | 13,2 | 55,9 | |||||||||||||||||||
+ | other income | 7,6 | 0,0 | 13,7 | 0,1 | -6,1 | -44,5 | |||||||||||||||||||
– | similar expenses | 3,7 | 0,0 | 1,3 | 0,0 | 2,4 | 184,6 | |||||||||||||||||||
= | financial results | 3,9 | 0,0 | 12,4 | 0,1 | -8,5 | -68,5 | |||||||||||||||||||
result from ordinary operations | 40,7 | 0,2 | 36,0 | 0,2 | 4,7 | 13,1 | ||||||||||||||||||||
– | taxes on income | 15,2 | 0,1 | 12,8 | 0,1 | 2,4 | 18,8 | |||||||||||||||||||
– | other taxes | 0,7 | 0,0 | 1,4 | 0,0 | -0,7 | -50,0 | |||||||||||||||||||
= | net income | 24,8 | 0,1 | 21,8 | 0,1 | 3,0 | 13,8 | |||||||||||||||||||
-18-
5. | CERTIFICATION OF THE FINANCIAL STATEMENT |
appendices 1 through 4 of the annual statement of MFC Aluminiumfolie Merseburg GmbH, Merseburg as of
the 31stof December, 2004 and in appendix 5 the statement of affairs for the 2004 business year.
company’s statement of affairs of the company of MFC Aluminiumfolie Merseburg GmbH,
Merseburg for the business year starting from the 1st of January to the
31st of December, 2004. The bookkeeping, the preparation of the annual statement
of accounts, and the company’s statement of affairs according to the requirements of the
commercial law are the responsibility of MFC Aluminiumfolie Merseburg GmbH’ management. It
is my task to evaluate the annual accounts including the bookkeeping based on my audit and
the company’s statement of affairs .
I conducted the audit of the annual statement of accounts according to section 317 of the Commercial Code with due regard to the German rules of the Institute of Auditors for a lawful audit of the statement of accounts. According to this, the audit had to be planned and performed in such a way, that inaccuracies and breaches which could detrimentally effect the view of the assets, financial and earnings situation which were procured by the representation of the annual statement of accounts keeping in view the principles of orderly bookkeeping could be recognized. |
-19-
The selection of the audit measures are determined by the knowledge of the business operation and of the economical and legal environment of MFC Aluminiumfolie Merseburg Inc. as well as by the expectation of possible defects. The audit evaluated, on the basis of random samples, the efficiency of the internal account control system and evidence for the statement in bookkeeping, the annual statement of accounts and the company’s state of affairs. The audit includes the evaluation of applied balancing principles, as well as the essential evaluation of management and the evaluation of the complete representation of the annual statement of accounts and the company’s statement of affairs. I am of the opinion that my audit provides a reasonable basis for my evaluation. | ||
My audit has not brought upon any objections whatsoever. | ||
In my opinion, the annual statement of accounts which was performed in compliance with the principles of orderly bookkeeping principles , gives a corresponding view of the real finance, earnings, and asset situation of MFC Aluminiumfolie Merseburg Inc. The company’s statement of affairs provides us with an altogether correct view of the company’s situation and the risks of future developments.” |
accepted accounting principles in Germany, which conform in all material
respects with those in the United States.
orderly reporting of audits ( IDW PS 450). The audit was also carried out in accordance with
auditing standards in the United States.
affairs for the business year in a from the certified version divergent form ( including the
translation in another voice) needs my re-
-20-
I point thereto on section 317 of the Commercial Code | ||
Fulda, the 10thof March, 2005 | ||
Hans-Dieter Alt Certified Auditor |
-21-
as of december, 31st, 2004
MFC Aluminumfolie Merseburg GmbH
31.12.2004 | 2003 | |||||||||||
EUR | EUR | TEUR | ||||||||||
ASSETS | ||||||||||||
A. Fixed assets | ||||||||||||
I. Intangible assets | ||||||||||||
1. Franchises, trademarks, patents, licences and similar rights and licences to such rights | 11.483,90 | 8,2 | ||||||||||
II. Property, plant and equipment | ||||||||||||
1. Technical equipment, plant and machinery | 376.356,88 | 250,1 | ||||||||||
2. Operational and office equipment | 162.000,38 | 59,3 | ||||||||||
538.357,26 | 309,4 | |||||||||||
III. Financial assets | ||||||||||||
1. Other loans | 56.157,00 | 41,6 | ||||||||||
B. Current assets | ||||||||||||
I. Inventories | ||||||||||||
1. Raw materials and supplies | 966.357,61 | 929,2 | ||||||||||
2. Work-in-process | 1.127.667,29 | 731,5 | ||||||||||
3. Finished goods | 1.211.296,14 | 1.122,3 | ||||||||||
3.305.321,04 | 2.783,0 | |||||||||||
II. Accounts receivable and other assets | ||||||||||||
1. Accounts receivable, trade | 127.502,60 | 163,5 | ||||||||||
2. Accounts due from affiliated companies | 79.459,81 | 0,0 | ||||||||||
3. Other assets | 239.328,57 | 187,1 | ||||||||||
446.290,98 | 350,6 | |||||||||||
III. Checks, cash onhand and in Federal Bank and in postal giro accounts and cash in banks | 233.131,24 | 1.229,6 | ||||||||||
C. Deferred charges and prepaid expenses | 13.852,00 | 3,7 | ||||||||||
4.604.593,42 | 4.726,1 | |||||||||||
31.12.2004 | 2003 | |||||||||||
EUR | EUR | TEUR | ||||||||||
LIABILITY AND SHAREHOLDERS’ | ||||||||||||
EQUITY | ||||||||||||
A. Shareholders’ equity | ||||||||||||
I. Capital stock | 25.000,00 | 25,0 | ||||||||||
II. Accumulated deficit | 19.322,00 | - 2,6 | ||||||||||
III. Net income | 24.825,24 | 21,9 | ||||||||||
69.147,24 | 44,3 | |||||||||||
B. Special reserves with an equity portion | 92.310,27 | 23,0 | ||||||||||
C. Reserves and accrued liabilities | ||||||||||||
1. Pension reserves | 99.866,00 | 85,3 | ||||||||||
2. Accrued taxes | 6.213,00 | 9,0 | ||||||||||
3. Other reserves and accrued liabilities | 216.893,78 | 353,8 | ||||||||||
322.972,78 | 448,1 | |||||||||||
D. Liabilities | ||||||||||||
1. Accounts payable, trade | 3.931.303,81 | 3.965,1 | ||||||||||
2. Accounts due to affiliated companies | 37.366,10 | 97,1 | ||||||||||
3. Other liabilities | 151.493,22 | 148,5 | ||||||||||
- thereof for taxes: | ||||||||||||
EUR 9.020,00 (previous year: EUR 1.982,70) | ||||||||||||
- thereof for social security: | ||||||||||||
EUR 45.759,82 (previous year: EUR 43.635,16) | ||||||||||||
4.120.163,13 | 4.210,7 | |||||||||||
4.604.593,42 | 4.726,1 | |||||||||||
-22-
Statement of depreciation, amortisation and | ||||||||||||||||||||||||||||||||||||||||
Statement of prime cost | write-offs | Net book | Net book | |||||||||||||||||||||||||||||||||||||
At cost | At cost | At cost | At cost | value | value | |||||||||||||||||||||||||||||||||||
01.01.2004 | Additions | Retirements | 31.12.2004 | 01.01.2004 | Additions | Retirements | 31.12.2004 | 31.12.2004 | 31.12.2003 | |||||||||||||||||||||||||||||||
EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | |||||||||||||||||||||||||||||||
I. Intangible assets | ||||||||||||||||||||||||||||||||||||||||
1. Software | 12.779,78 | 8.222,06 | 0,00 | 21.001,84 | 4.614,78 | 4.903,18 | 0,00 | 9.517,96 | 11.483,88 | 8.165,00 | ||||||||||||||||||||||||||||||
II. Property, plant and equipment | ||||||||||||||||||||||||||||||||||||||||
1. Technical equipment, plant and machinery | 251.331,84 | 177.719.42 | 0,00 | 429.051,26 | 1.286,07 | 51.408,31 | 0,00 | 52.694,38 | 376.356,88 | 250.045,77 | ||||||||||||||||||||||||||||||
2. Operational and office equipment | 68.927,81 | 135.713,70 | 0,00 | 204.641,51 | 9.580,43 | 32.832,55 | 0,00 | 42.641,13 | 162.000,38 | 59.347,38 | ||||||||||||||||||||||||||||||
III. Financial assets | ||||||||||||||||||||||||||||||||||||||||
1. Other loans | 41.631,00 | 0,00 | 0,00 | 41.631,00 | 0,00 | 0,00 | 0,00 | 0,00 | 41.631,00 | 41.631,00 | ||||||||||||||||||||||||||||||
total | 374.670,43 | 321.655,18 | 0,00 | 696.325,61 | 15.481,28 | 89.144,04 | 0,00 | 104.853,47 | 591.472,14 | 359.189,15 | ||||||||||||||||||||||||||||||
-23-
2004 | 2003 | |||||||||||||||
EUR | EUR | EUR | EUR | |||||||||||||
1. Sales | 26,123,148.21 | 24,069,654.30 | ||||||||||||||
2. Increase in finished goods and work-in-process | 536,461.33 | -192,121.96 | ||||||||||||||
3. Production for own plant and equipment capitalised | 0.00 | 2,667.51 | ||||||||||||||
4. Total output | 26,659,609.54 | 23,880,199.85 | ||||||||||||||
5. Other operating income | 638,117.15 | 393,728.20 | ||||||||||||||
6. Costs of materials | ||||||||||||||||
a) Costs of raw materials, supplies and trading stock | -23,734,178.08 | -20,800,925.69 | ||||||||||||||
b) Costs of purchased services | -840,384.08 | -24,574,562.16 | -866,978.88 | -21,667,904.57 | ||||||||||||
7. Personnel expenses | ||||||||||||||||
a) Wages and salaries | -1,476,976.85 | -1,472,268.41 | ||||||||||||||
b) Social security and pension | -345,311.56 | -297,313.66 | ||||||||||||||
- thereof for pensions: | ||||||||||||||||
EUR 37.958,27 (previous year: EUR 9.949,95) | -1,822,288.41 | -1,769,582.07 | ||||||||||||||
8. Depreciation, amortisation and write-offs | ||||||||||||||||
a) on intangible assets and plant and equipment | -88,906.05 | -13,876.80 | ||||||||||||||
9. Other operating expenses | -775,063.95 | -798,955.66 | ||||||||||||||
10. Other interest and similar income | 7,559.13 | 13,706.16 | ||||||||||||||
11. Interest and similar expenses | -3,716.94 | -1,281.54 | ||||||||||||||
12. Result from ordinary operations | 40,748.31 | 36,033.57 | ||||||||||||||
13. Taxes on income | -15,183.07 | -12,752.09 | ||||||||||||||
14. Other taxes | -740.00 | -1,360.98 | ||||||||||||||
15. Net income | 24,825.24 | 21,920.50 | ||||||||||||||
-24-
for the business year 2004
-25-
-26-
€ | ||||
accruals for vacation pay | 30.500,00 | |||
pension reserves | 99.866,00 | |||
accrued taxes | 6.213,00 | |||
bonus reserves | 20.000,00 | |||
accruals for warranty claims | 84.500,00 | |||
accruals for lawsuit | 0,00 | |||
accruals for repairs in arrears | 25.000,00 | |||
accruals for discounts, have to give | 29.500,00 | |||
accruals for invoice receivable | 0,00 | |||
accruals for financial statement and audit costs | 24.000,00 | |||
accruals for workmen’s compensation board | 3.393,78 | |||
322.972,78 | ||||
-27-
remaining | remaining | remaining | ||||||||||||||||||
period until | period 1 till | more than | ||||||||||||||||||
all | 1 year | 5 years | 5 years | |||||||||||||||||
€ | € | € | € | |||||||||||||||||
1. | accounts payable for goods and services | |||||||||||||||||||
accounts payable for goods and services | 3.918.195,52 | 3.918.195,52 | 0,00 | 0,00 | ||||||||||||||||
accounts payable for goods and services EG | 10.836,55 | 10.836,55 | 0,00 | 0,00 | ||||||||||||||||
accounts payable for goods and services non-EG | 2.271,74 | 2.271,74 | 0,00 | 0,00 | ||||||||||||||||
3.931.303,81 | 3.931.303,81 | 0,00 | 0,00 | |||||||||||||||||
2. | accounts due to affiliates companies | |||||||||||||||||||
accounts payable for goods and services to affiliates companies | 986,15 | 986,15 | 0,00 | 0,00 | ||||||||||||||||
IC Management Service GmbH | 36.379,95 | 36.379,95 | 0,00 | 0,00 | ||||||||||||||||
37.366,10 | 37.366,10 | 0,00 | 0,00 | |||||||||||||||||
3. | other liabilities | |||||||||||||||||||
accounts for taxes | 9.020,00 | 9.020,00 | 0,00 | 0,00 | ||||||||||||||||
accounts due to sickness insurance fund | 45.759,82 | 45.759,82 | 0,00 | 0,00 | ||||||||||||||||
accounts due to co-workers | 80.851,67 | 80.851,67 | 0,00 | 0,00 | ||||||||||||||||
remaining other liabilities | 180,61 | 180,61 | 0,00 | 0,00 | ||||||||||||||||
wage tax | 15.681,12 | 15.681,12 | 0,00 | 0,00 | ||||||||||||||||
151.493,22 | 151.493,22 | 0,00 | 0,00 | |||||||||||||||||
amount | 4.120.163,13 | 4.120.163,13 | 0,00 | 0,00 | ||||||||||||||||
-28-
-29-
-30-
Company: | MFC aluminiumfolie merseburg gmbh | |
Headquarters: | Merseburg | |
Legal form: | GmbH | |
Articles of association: | Concluded on 8 March 2001, revised on 14 May 2001 and 15 Nov. 2001. | |
Address: | August – Bebel – Straße 1 06217 Merseburg | |
Entry in Commercial Register: | Halle-Saalkreis Circuit Court, HR B 14193 | |
Duration of company: | permanent | |
Object of the company: | Production and sale of aluminum products, in particular aluminum foils. | |
Financial year: | 1 January to 31 December | |
Subscribed capital: | € 25.000 | |
Management: | Dr. Stefan Feuerstein and Bernd Gebhardt are the managing directors. The managing directors are permitted to conclude business transactions with themselves or with themselves as representatives of third parties. | |
Representation: | Dr. Stefan Feuerstein is authorized to represent the company alone. Bernd Gebhardt is authorized to represent the company jointly with Dr. Stefan Feuerstein. |
-31-
Commercial power of attorney: | Commercial power of attorney has not been granted. |
— | Marketing and Distribution Agreement with IC Management Service GmbH | |
— | Surety from MFC Bancorp Ltd. for obligations from the supplier agreement with Nickelhütte Aue GmbH | |
— |
— | Lease with GSA Grundstücksfonds Sachsen-Anhalt GmbH | |
— | Contract for the supply of pre-rolling foil with Nickelhütte Aue GmbH (till 31/12/2004) | |
— | Contract for the supply of pre-rolling foil with Hydro Aluminium Deutschland GmbH (as of 1/1/2005). | |
— |
-32-
-33-
to the Balance sheet as of 31 December 2004
1. | Franchises, trademarks, patents, licences and similar rights and licences to such rights | € | 11.483,90 | |||||
(previous year: | € | 8.165,00 | ) |
1. | Technical equipment and machinery | € | 376.356,88 | |||||
(previous year: | € | 250.045,77 | ) |
-34-
2004 | 2003 | |||||||
€ | € | |||||||
equipment of buildings | 2.217,86 | 0,00 | ||||||
plants material depot and preparation | 61.853,57 | 12.402,30 | ||||||
technical plants rolling mill | 79.772,77 | 16.843,07 | ||||||
energy plants | 184.960,57 | 217.127,65 | ||||||
technical plants for annealing furnace | 2.925,75 | 3.672,75 | ||||||
thermal-oil-plant | 31.020,72 | 0,00 | ||||||
other plants and machinery | 13.605,64 | 0,00 | ||||||
376.356,88 | 250.045,77 | |||||||
2. | Other plants, operational and office equipment | € | 162.000,38 | |||||
(previous year: | € | 59.347,38 | ) | |||||
2004 | 2003 | |||||||
€ | € | |||||||
EDV-plants | 20.206,13 | 13.973,42 | ||||||
sanitary facilities | 17.080,48 | 20.050,96 | ||||||
motor pool | 115.043,04 | 25.323,00 | ||||||
tools | 1.292,85 | 0,00 | ||||||
office equipment | 7.395,69 | 0,00 | ||||||
other plant-equipment | 982,19 | 0,00 | ||||||
162.000,38 | 59.347,38 | |||||||
Total property, plant and equipment | € | 538.357,26 | ||||||
(previous year: | € | 309.393,15 | ) | |||||
-35-
1. | Other loans | € | 56.157,00 | |||||
(previous year: | € | 41.631,00 | ) | |||||
Total fixed assets | € | 605.998,16 | ||||||
(previous year: | € | 359.189,15 | ) | |||||
-36-
B. | Current assets |
I. | Inventories |
1. Raw materials and supplies | € | 966.357,61 | ||
(previous year: | € | 929.235,91 | ) |
The inventory composes at the balance-fix-day as follows: |
2004 | 2003 | |||||||
€ | € | |||||||
foils | 836.307,18 | 868.572,86 | ||||||
foil-scrap | 55.588,80 | 4.285,00 | ||||||
husks and tapes | 22.305,43 | 19.961,02 | ||||||
supplies for production | 23.675,60 | 5.150,72 | ||||||
grease and lubricating oil | 0,00 | 1.933,69 | ||||||
source of energy | 25.016,58 | 24.301,79 | ||||||
packaging material | 3.464,02 | 5.030,83 | ||||||
966.357,61 | 929.235,91 | |||||||
2. Work-in-process | € | 1.127.667,29 | ||
(previous year: | € | 731.522,34 | ) |
-37-
The inventory composes at the balance-fix-day as follows: |
2004 | 2003 | |||||||
€ | € | |||||||
UE foil | 1.127.667,29 | 727.048,34 | ||||||
UL foil | 0,00 | 4.474,00 | ||||||
1.127.667,29 | 731.522,34 | |||||||
3. Finished goods | € | 1.211.296,14 | ||
(previous year: | € | 1.122.283,56 | ) |
The inventory composes at the balance-fix-day as follows: |
2004 | 2003 | |||||||
€ | € | |||||||
FE foil | 1.211.296,14 | 1.116.464,56 | ||||||
FL foil | 0,00 | 5.819,00 | ||||||
1.211.296,14 | 1.122.283,56 | |||||||
II. | Accounts receivable and other assets |
1. Accounts receivable, trade | € | 127.502,60 | ||
(previous year: | € | 163.480,65 | ) |
-38-
In detail the accounts receivable are concerned as follows: |
2004 | 2003 | |||||||
€ | € | |||||||
Accounts receivable internal | 129.250,30 | 154.186,70 | ||||||
Accounts receivable EG | -7.774,09 | 0,00 | ||||||
Accounts receivable non — EG | 8.026,39 | 11.293,95 | ||||||
Lump-sum allowance | -2.000,00 | - 2.000,00 | ||||||
127.502,60 | 163.480,65 | |||||||
2. Accounts due from affiliated companies | € | 79.495,81 | ||
(previous year: | € | 0,00 | ) |
2004 | 2003 | |||||||
€ | € | |||||||
advance to MFC Bancorp | 79.459,81 | 0,00 |
3. Other assets | € | 239.329,57 | ||
(previous year: | € | 187.129,12 | ) |
-39-
The other assets exhibit the following composition to the balance sheet date: |
2004 | 2003 | |||||||
€ | € | |||||||
receivables from debit balance | 89,92 | 89,92 | ||||||
security deposit | 6.000,00 | 0,00 | ||||||
claim for refund; current tax | 29.882,12 | 0,00 | ||||||
corporation income tax refund | 8.026,39 | 11.293,95 | ||||||
receivables from turnover tax | 201.059,53 | 187.039,20 | ||||||
245.057,96 | 198.423,07 | |||||||
III.Checks, cash onhand and in Federal Bank and in postal giro Accounts and cash in banks | € | 233.131,24 | ||
(previous year: | € | 1.229.562,09 | ) |
The composition of this item is to be inferred from the following overview: |
2004 | 2003 | |||||||
€ | € | |||||||
cash | 287,24 | 353,77 | ||||||
KSK Merseburg-Querfurt, giro | 178.793,31 | 175.781,17 | ||||||
KSK Merseburg-Querfurt, FGA | 0,00 | 1.000.000,00 | ||||||
KSK Merseburg-Querfurt, fixed deposits | 54.050,69 | 53.427,15 | ||||||
233.131,24 | 1.229.562,09 | |||||||
-40-
C.Deferred charges and prepaid expenses | € | 13.852,00 | ||
(previous year: | € | 3.743,00 | ) |
Summation asset side | € | 4.604.593,42 | ||
(previous year: | € | 4.726.145,82 | ) |
-41-
A. | Shareholders’ equity |
I. | Capital stock | € | 25.000,00 | |||||
(previous year: | € | 25.000,00 | ) |
The capital stock of the company amounts in accordance to § 4 from the articles of association up€ 25.000,00 and is completely deposited. |
II. | Carry forward | € | 19.322,00 | |||||
(previous year: | € | -2.887,33 | ) |
2004 | 2003 | |||||||
€ | € | |||||||
Profit for the year 2002 | 288,83 | 288,83 | ||||||
Profit for the year 2003 | 21.920,50 | 0,00 | ||||||
net loss for the year 2001 | -2.887,33 | -2.887,33 | ||||||
19.322,00 | -2.598,50 | |||||||
III. | Net income | € | 24.825,24 | |||||
(previous year: | € | 21.920,50 | ) |
-42-
B. | Special reserves with an equity portion | € | 92.310,27 | |||||
(previous year: | € | 23.000,00 | ) |
2004 | 2003 | |||||||
€ | € | |||||||
special item with accrual character | 0,00 | 23.000,00 | ||||||
special item capital investment bonus | 61.846,20 | 0,00 | ||||||
special item investment allowance | 30.464,07 | 0,00 | ||||||
92.310,27 | 23.000,00 | |||||||
C. | Accruals | |
The stock composes at the balance-fix-day as follows: |
at cost | con- | re- | pro- | at cost | ||||||||||||||||
01.01.2004 | sumption | versal | vision | 31.12.2004 | ||||||||||||||||
€ | € | € | € | € | ||||||||||||||||
pension- reserve | 85.247,00 | 0,00 | 0,00 | 14.619,00 | 99.866,00 | |||||||||||||||
accrued taxes | 9.020,00 | 0,00 | 9.020,00 | 6.123,00 | 6.213,00 | |||||||||||||||
other reserve | 353.821,34 | 111.500,00 | 196.267,56 | 170.840,00 | 216.893,78 | |||||||||||||||
448.088,34 | 111.500,00 | 205.287,56 | 191.582,00 | 322.972,78 | ||||||||||||||||
-43-
1. | Pension reserves | € | 99.866,00 | |||||
(previous year: | € | 85.247,00 | ) |
2. | Accrued taxes | € | 6.213,00 | |||||
(previous year: | € | 9.020,00 | ) |
2004 | 2003 | |||||||
€ | € | |||||||
reserve for trade taxes | 6.213,00 | 5.075,00 | ||||||
reserve for income taxes | 0,00 | 3.739,00 | ||||||
reserve for solidarity surcharge | 0,00 | 206,00 | ||||||
6.213,00 | 9.020,00 | |||||||
3. | Other reserves and accrued liabilities | € | 353.821,34 | |||||
(previous year: | € | 145.400,00 | ) |
-44-
The stock composes at the balance-fix-day as follows: |
2004 | 2003 | |||||||
€ | € | |||||||
bonus reserves | 20.000,00 | 20.000,00 | ||||||
accruals for lawsuit | 0,00 | 4.000,00 | ||||||
accruals for discounts, have to give | 29.500,00 | 29.500,00 | ||||||
accruals for invoice receivable | 0,00 | 2.000,00 | ||||||
accruals for workmen’s compensation board | 3.393,78 | 4.000,00 | ||||||
accruals for vacation pay | 30.500,00 | 45.600,00 | ||||||
accruals for repairs in arrears | 25.000,00 | 130.500,00 | ||||||
accruals for warranty claims | 84.500,00 | 94.221,34 | ||||||
accruals for financial statement and audit costs | 24.000,00 | 24.000,00 | ||||||
216.893,78 | 353.821,34 | |||||||
D. | Liabilities |
1. | Accounts payable for goods and services | € | 3.931.303,81 | |||||
(previous year: | € | 3.965.101,14 | ) |
-45-
The stock composes at the balance-fix-day as follows: |
2004 | 2003 | |||||||
€ | € | |||||||
accounts internal | 3.918.195,52 | 3.948.864,74 | ||||||
accounts EG | 10.836,55 | 11.390,10 | ||||||
accounts non — EG | 2.271,74 | 4.846,30 | ||||||
3.931.303,81 | 3.965.101,14 | |||||||
2. | Accounts due to affiliated companies | € | 37.366,10 | |||||
(previous year: | € | 97.074,85 | ) |
The stock composes at the balance-fix-day as follows: |
2004 | 2003 | |||||||
€ | € | |||||||
accounts ICM | 36.379,95 | 33.745,88 | ||||||
accounts EG | 0,00 | 8.843,79 | ||||||
accounts due to affiliated companies | 986,15 | 54.485,18 | ||||||
-46-
2004 | 2003 | |||||||
€ | € | |||||||
37.366,10 | 97.074,85 | |||||||
3. | Other liabilities | € | 151.493,22 | |||||
(previous year: | € | 148.559,49 | ) |
2004 | 2003 | |||||||
€ | € | |||||||
deduction of input tax | 0,00 | 1.982,70 | ||||||
liabilities from bonus agreement | 0,00 | 10.082,73 | ||||||
liabilities from taxes on income | 9.020,00 | 0,00 | ||||||
liabilities on co-workers | 80.851,67 | 75.947,93 | ||||||
wage tax | 15.681,12 | 16.690,38 | ||||||
liabilities on health insurance fund | 45.653,06 | 43.635,16 | ||||||
employment benefits to encourage capital formation | 180,61 | 220,49 | ||||||
pension fund | 106,76 | 0,00 | ||||||
151.493,22 | 148.559,39 | |||||||
Summation total equity and liabilities | € | 4.604.593,42 | ||
(previous year: | € | 4.726.145,82 | ) |
-47-
PROFIT AND LOSS STATEMENT
from 01. january till 31. december 2004
1.Sales | € | 26.123.148,21 | ||
(previous year: | € | 24.069.654,30 | ) |
The sales of the business year 2003 are composed as explained in the following manner: |
2004 | 2003 | |||||||
€ | € | |||||||
sales foil | 26.561.466,98 | 24.477.813,10 | ||||||
sales rework | 26.811,02 | 181.117,32 | ||||||
sales scrap | 1.752.956,81 | 1.364.495,21 | ||||||
sales deductions warranty | - 283.750,64 | - 302.965,11 | ||||||
sales deductions ICM | - 1.253.215,01 | - 1.111.893,20 | ||||||
cash discount | - 608.171,47 | - 529.468,09 | ||||||
bonus | - 72.949,48 | - 9.444,93 | ||||||
26.123.148,21 | 24.069.654,30 | |||||||
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2.Inventory decrease | € | 536.461,33 | ||
(previous year: | € | - 192.121,96 | ) |
The item presents in the business year 2004 the following compositions: |
2004 | 2003 | |||||||
€ | € | |||||||
inventory changes FE foil | 94.831,58 | 245.607,54 | ||||||
inventory changes FL foil | - 5.819,00 | 5.819,00 | ||||||
inventory changes scrap material | 51.303,80 | - 22.643,00 | ||||||
inventory changes UE foil | 400.618,95 | - 425.379,50 | ||||||
inventory changes UL foil | - 4.474,00 | 4.474,00 | ||||||
536.461,33 | - 192.121,96 | |||||||
3.Production for own plant capitalised | € | 0,00 | ||
(previous year: | € | 2.667,51 | ) | |
4.Total output | € | 26.659.609,54 | ||
(previous year: | € | 23.880.199,85 | ) |
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5.Other operating income | € | 638.117,15 | ||
(previous year: | € | 393.728,20 | ) |
The item presents in the business year 2003 the following compositions: |
2004 | 2003 | |||||||
€ | € | |||||||
other income Flex-Team | 88.616,23 | 319.984,44 | ||||||
other extra income | 97,90 | - 13.395,31 | ||||||
income from current tax refund | 120.289,84 | 90,04 | ||||||
other expense allowance | 118.938,90 | 56.519,17 | ||||||
income from account — differences | 49,94 | 15,60 | ||||||
income from exchange differences | 1.162,01 | 1.254,98 | ||||||
income from dissolution of provision for deferred repairs | 130.500,00 | 0,00 | ||||||
income from insurance benefits refund | 40.558,20 | 0,00 | ||||||
income from off-the-line item refund | 34.558,60 | 0,00 | ||||||
income from acquisition cost refund | 800,00 | 0,00 | ||||||
income unrelated to accounting period | 101.209,09 | 29.259,28 | ||||||
damages | 1.336,44 | 0,00 | ||||||
638.117,15 | 393.728,20 | |||||||
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6. | Cost of materials |
Cost of raw materials, supplies and trading stock | € | 24.574.562,16 | ||
(Vorjahr: | € | 21.667.904,57 | ) |
The costs of raw materials, supplies and trading stock present in the business year 2003 the following composition: |
2004 | 2003 | |||||||
€ | € | |||||||
foil | 22.083.733,56 | 19.018.317,00 | ||||||
supplies | 4.598,68 | 6.600,36 | ||||||
small tools | 4.699,00 | 4.705,24 | ||||||
metal husk | 119.312,43 | 107.349,08 | ||||||
factory supplies / expendable material | 56.746,12 | 93.798,44 | ||||||
factory supplies | 16.283,10 | 1.584,18 | ||||||
filter supplies | 30.734,40 | 31.798,44 | ||||||
walz-oil | 95.328,90 | 129.195,44 | ||||||
additive | 38.953,84 | 26.537,14 | ||||||
packaging material | 164.129,64 | 175.527,49 | ||||||
repair material | 88.047,79 | 84.798,42 | ||||||
electricity | 797.442,00 | 788.286,80 | ||||||
gas | 119.931,16 | 169.524,57 | ||||||
oil | 87.299,86 | 133.063,95 | ||||||
water | 14.154,64 | 19.989,49 | ||||||
other material | 12.782,96 | 9.909,98 | ||||||
outside services | 198.817,88 | 53.916,99 | ||||||
cargo | 550.742,78 | 531.983,22 | ||||||
external maintenance | 103.767,29 | 292.553,24 | ||||||
cash discount 16% | - 12.943,87 | - 11.474,57 | ||||||
24.574.562,16 | 21,667,964.90 | |||||||
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7. | Personnel expenses |
a | ) | wages and salaries | € | 1.476.976,85 | ||||
(previous year: | € | 1.472.268,41 | ) |
2004 | 2003 | |||||||
€ | € | |||||||
indemnity | 2.000,00 | 4.100,00 | ||||||
costs open vacation | 0,00 | 21.600,00 | ||||||
paid job layoffs | 1.035,10 | 436,56 | ||||||
accruals | 0,00 | 20.000,00 | ||||||
salary | 534.890,36 | 533.597,54 | ||||||
continued payment of salary | 8.350,63 | 14.268,02 | ||||||
industrial apprentice | 8.900,00 | 2.303,06 | ||||||
base pay | 610.861,84 | 574.346,98 | ||||||
overtime pay | 13.459,93 | 23.318,43 | ||||||
continued pay | 21.474,46 | 18.527,34 | ||||||
night-, Sunday and holiday premium | 82.495,56 | 87.767,11 | ||||||
remuneration in kind | 371,40 | 463,80 | ||||||
other salary | 1.651,20 | 1.561,60 | ||||||
vacation | 155.984,29 | 159.284,25 | ||||||
Christmas allowance | 27.800,00 | 0,00 | ||||||
bonus and premium | 7.702,08 | 10.693,72 | ||||||
1.476.976,85 | 1.472.268,41 | |||||||
b | ) | Social security, pension and other benefit cost | € | 345.311,56 | ||||
(previous year: | € | 297.313,66 | ) |
— thereof for pensions:€ 37.958,27 (previous year:€ 9.949,95) |
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8. | Depreciation on intangible assets, |
plant and equipment | € | 88.906,05 | ||||||
(previous year: | € | 13.876,80 | ) |
The presented depreciations constitute straight-line method depreciation on intangible assets, plant and equipment as scheduled. |
2004 | 2003 | |||||||
€ | € | |||||||
depreciation on intangible assets | 4.864,29 | 4.260,00 | ||||||
depreciation on technical plants | 47.462,35 | 1.224,12 | ||||||
depreciation on motor pool | 18.279,96 | 3.077,00 | ||||||
depreciation on technical plant annealing furnace | 747,00 | 62,25 | ||||||
depreciation on EDV — plants | 10.487,29 | 5.245,18 | ||||||
depreciation on sanitary facilities | 2.970,48 | 8,25 | ||||||
depreciation on real estate | 32,14 | 0,00 | ||||||
depreciation on thermal-oil-plant | 3.209,51 | 0,00 | ||||||
depreciation on tools | 228,15 | 0,00 | ||||||
depreciation on office equipment | 624,88 | 0,00 | ||||||
88.906,05 | 13.876,80 | |||||||
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9. | Other operating expenses | € | 775.063,95 | |||||
(previous year: | € | 798.955,66 | ) |
The other operating expenses are subdivided into the following components: |
2004 | 2003 | |||||||
€ | € | |||||||
public charges | 2.954,94 | 1.594,73 | ||||||
other external maintenance | 63.858,20 | 0,00 | ||||||
suretyship charges | 0,00 | 65.833,33 | ||||||
rent, lease | 352.759,78 | 304.044,62 | ||||||
cleaning expenses | 6.808,74 | 6.677,21 | ||||||
clothing | 2.192,54 | 2.223,20 | ||||||
donations | 4.400,00 | 2.100,00 | ||||||
insurance premium | 40.480,46 | 23.353,21 | ||||||
industrial association premium | 9.110,74 | 9.011,25 | ||||||
delay penalty | 44,50 | 0,00 | ||||||
software | 3.730,38 | 10.914,43 | ||||||
leasing physical resources | 16.173,95 | 16.173,92 | ||||||
leasing PKW | 14.434,62 | 16.167,72 | ||||||
motor vehicle insurance | 804,83 | 2.697,45 | ||||||
company-supplied car costs | 8.509,48 | 7.414,27 | ||||||
gratuities and presents till 40,00 € | 86,74 | 141,47 | ||||||
gratuities and presents over 40,00 € | 218,05 | 219,14 | ||||||
promotional costs | 52,53 | 75,00 | ||||||
other personell expenses | 100,00 | 0,00 | ||||||
employees events | 1.816,77 | 0,00 | ||||||
entertainment expenses | 2.932,56 | 1.088,79 | ||||||
travel allowance 16% | 2.318,96 | 1.105,91 | ||||||
travel expenses | 24.564,49 | 24.716,33 | ||||||
daily allowance | 6.747,33 | 5.891,18 | ||||||
private car-using | 757,90 | 1.425,28 | ||||||
advertising | 6.482,77 | 6.190,30 | ||||||
other advertising | 372,10 | 820,52 | ||||||
provisions | 39.776,72 | 84.850,12 | ||||||
allocation for warranty | 0,00 | 78.821,34 | ||||||
postage | 2.375,78 | 2.375,79 | ||||||
telephone and internet | 11.852,43 | 13.401,03 | ||||||
stationery and office supplies | 5.840,02 | 6.960,14 | ||||||
form and blank | 165,30 | 195,00 | ||||||
other printed matter | 1.243,14 | 2.223,00 | ||||||
newspaper and specialized literature | 2.111,01 | 1.458,25 |
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2004 | 2003 | |||||||
€ | € | |||||||
further training | 2.079,94 | 3.099,52 | ||||||
inspection, advice, legal protection | 77.013,29 | 14.293,36 | ||||||
acquisition and audit cost | 16.000,00 | 19.112,40 | ||||||
work clothing | 3.690,88 | 4.005,64 | ||||||
plant doctor | 0,00 | 90,00 | ||||||
other materials | 411,39 | 428,19 | ||||||
acquisition agriculture | 83,84 | 8,00 | ||||||
waste disposal | 27.248,12 | 25.812,05 | ||||||
banking charges | 3.216,78 | 7.434,34 | ||||||
exchange loss | 2.591,33 | 1.443,00 | ||||||
transfer to special tax reserve | 0,00 | 23.000,00 | ||||||
expenses unrelated to accounting period | 6.295,02 | 64,62 | ||||||
accounting differences | 0,00 | 0,02 | ||||||
account differences | 55,60 | 0,29 | ||||||
774.763,95 | 798.955,36 | |||||||
10. | Other interest and similar income | € | 7.559,13 | |||||
(previous year: | € | 13.706,16 |
This incomes result from cash interest for fixed money — or deadline money investments at the Sparkasse Merseburg-Querfurt. |
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11. | Interest and similar expenses | € | 3.716,94 | |||||
(previous year: | € | 1.281,54 | ) |
2004 | 2003 | |||||||
€ | € | |||||||
interests on lease-purchase agreement and leasing | 3.192,06 | 756,66 | ||||||
guaranty commission | 524,88 | 524,88 | ||||||
3.716,94 | 1.281,54 | |||||||
12. | Result from ordinary operations | € | 40.748,31 | |||||
(previous year: | € | 36.033,57 | ) |
13. | Taxes on income | € | 15.183,07 | |||||
(previous year: | € | 12.752,09 |
2004 | 2003 | |||||||
€ | € | |||||||
corporation income tax | 6.323,00 | 3.739,00 | ||||||
solidarity surcharge | 467,26 | 206,00 | ||||||
trade tax | 6.213,00 | 5.075,00 | ||||||
capital gains tax | 2.179,81 | 3.732,09 | ||||||
15.183,07 | 12.752,09 | |||||||
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14. | Other taxes | € | 740,00 | |||||
(previous year: | € | 1.360,98 | ) |
The presented other taxes refer to paid motor vehicle taxes and excise taxes. |
15. | Net income | € | 24.825,24 | |||||
(previous year: | € | 21.920,50 | ) |
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The MFC Aluminiumfolie Merseburg GmbH took over the rolling mill business unit of the FWM Folienwerke Merseburg GmbH effective 1 October 2002. The company produced blank aluminum foil for both the production of flexible packages as well as for technical uses and the pharmaceutical industry. | ||
Especially the field of flexible packaging is a growth market because the trend to pre-packaged foods continues to increase. | ||
The market for aluminum foils is marked by major international providers, medium-sized national providers and smaller providers such as our company. We consider ourselves to be partners for medium-sized companies as well as vendors for large customers with numerous sites who as a matter of principle secure their supply in this field by buying from a number of suppliers. | ||
A change in the ownership occurred in the first quarter of 2004. The new owner is UNIVERSAL METALS Ltd. located in Hong Kong. Regardless of this, the cooperation in the areas of financing, sales and procurement with the companies of the MFC Bancorp Group, the former main owner, have been successfully continues. | ||
Revenues/Sales | ||
Where the years 2002/2003 served for rebuilding and restructuring and the solidification of customer relationships, 2004 was marked by an increasing cooperation with our primary customers. | ||
8,525 t of aluminum foil were sold. | ||
This corresponded to planning and reflected the current capacity of the plants. One important advance was the fact that in 2004 it was possible to perform a further reduction in thickness and to supply foils with a thickness of 6.0 µ in a stable quality and volume. | ||
With annual volume agreements for delivery in 2005 signed in the autumn of 2004, it was possible to intensify the trend of a stable, long-term cooperation with our customers. With that the sale of more than 80 % of the production volumes have been secured, making the planning for 2005 of 8,500 t a realistic figure. The primary sales continue to be in Europe with Germany representing 62 %. |
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Production/Quality assurance | ||
The production area including maintenance was able to provide a high level of availability of the equipment in 2004. a flexible working system, motivated employees and a good level of quality were of substantial importance in this regard. The preventive scheduled maintenance, connected with the targeted modernizations were continued. Site costs could be significantly reduced by measures in the infrastructure. | ||
The main rolling mill operations are running a permanent three-shifts. The percentage of the thinnest aluminum foils in the product mix has continued to increase. The planning for 2005 foresees almost 60 % of total production to be in this area. | ||
The recertification of EN ISO 9001:2000 was successfully completed in 2004; the site had already attained a certified quality management system in 1994. | ||
Procurement | ||
The procurement of rolling foil is of strategic importance for our company. In 2004 in this regard we signed a supplier agreement with Nickelhütte Aue GmbH as the trading company; the actual sources are renowned European producers. | ||
The payment targets set by the suppliers have been secured by a surety from the MFC Bancorp Ltd.. | ||
Price assurances have been obtained to secure the metal price agreement, which guarantees that the purchase price is analogous to the prices arranged with the customers without material risks developing for the company. | ||
As a result of an existing electricity supply agreement no additional cost burdens have occurred. The conditions of the agreement could, for the most part, be continued for 2005. for other materials, e.g. rolling mill oils, transport devices, etc. it was in some cases necessary to accept significant price increases (oil, steel), which will require that consistent cost controlling be performed in this area in 2005 as well. | ||
Maintenance / Investments /Site | ||
The industrial park and the building / property have been rented in the framework of a long-term lease with an option to buy from the Grundstücksfond Sachsen-Anhalt GmbH. In the |
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middle of 2004 another company located on the site moved out making it possible to rent additional rooms and restructure the entire logistics at the site. |
The production plants are for the most part in a good technical condition. The focus of activities in 2004 was the consistent maintenance of value by means of repairs and partial modernizations. The site was further modernized with the cooperation of the leaser, with the aim of reducing costs and developing improved manufacturing conditions. | ||
Financing | ||
The company’s financing in 2004 was conducted by |
— | long-term payment agreements with raw material suppliers which were guaranteed by an MFC-Bancorp Ltd surety, | ||
— | short payment targets in sales in the framework of a marketing and sales agreement, | ||
— | Cash-flow generated |
Bank loans were not required for financing the company. | ||
Personnel | ||
The number of employees developed as follows in financial year 2004: |
31 Dec. 2003 | 51 employees | 1 of whom was a trainee | ||
31 March 2004 | 51 employees | 1 of whom was a trainee | ||
30 June 2004 | 54 employees | 1 of whom was a trainee | ||
30 Sept. 2004 | 54 employees | 2 of whom were trainees | ||
31 Dec. 2004 | 55 employees | 1 of whom were trainees |
Production | 37 | |||
Maintenance | 7 | |||
Sales | 3 | |||
Quality assurance / Laboratory | 3 | |||
Procurement / Work prep. | 2 | |||
Administrative | 3 | |||
55 |
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Working hour accounts were kept to make working hours more flexible. | ||
The shifts were stabilized by means of new hires in the production area. The company is not tied to a collective wage agreement. A Christmas bonus was paid again in 2004 as a voluntary payment. | ||
Earnings | ||
The pre-tax earnings was 40,748.31€. | ||
Reserves of 322,972.78€ cover the risks and projections from financial year 2004. | ||
The results for 2004 were within the framework of the budget. | ||
The gross yield ratio (total performance to cost of pre-rolling foil stock) was 120.7%. | ||
The cost structure was as follows. |
1. | Total performance | 100.0 | % | |||||
2. | Costs of materials | 92.2 | % | |||||
2.1 | thereof pre-rolling foil stock | 82.8 | % | |||||
3. | Personnel expenditures | 6.8 | % | |||||
4. | Other expenditures | 2.9 | % |
The company’s earning situation is not yet satisfactory. | ||
The 2005 budget contains positive effects resulting from improved purchasing conditions, further cost reductions and a further development toward processing high-earning thinnest aluminum foils which will lead to an improvement of the earnings situation. | ||
Financial situation | ||
The company has assets of 4,604,593.42€. | ||
These are broken down as follows: |
Fixed assets | 13.2 | % | ||
Inventories | 71.8 | % | ||
Accounts receivable | 4.5 | % | ||
Cash / Credits | 5.1 | % |
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The assets are primarily financed for the short-term. | ||
The company’s shareholder equity on 31/12/2004 was 69.1 T€. | ||
The short-term debt consists primarily of accounts payable to suppliers; this is guaranteed by a surety from MFC Bancorp. Ltd.. | ||
Probable Development and Associated Risks | ||
The sales budget for 2004 was exceeded. | ||
The budget for 2005 is at about the same level as 2004 and assumes a continued high rate of capacity. | ||
The volume of sales is covered to 80 % with annual agreements with about 10 customers. The risk of metal price developments has, for the most part, been excluded by parallel mechanisms in procurement and sales. | ||
In view of the developments in the market for flexible packaging, a further concentration on the thinnest aluminum foil is foreseen. | ||
The focus of maintenance and investment activities was and is on preventive maintenance, partial modernization and partial replacement investments of the equipment. | ||
The market volume for aluminum foil in Europe is well over 700,000 t/, so in that regard there is no risk for the sale of the company’s production. | ||
The increasing price pressure resulting from imports from the non-EU region will be continued to be combated by the strengths of quality, flexibility, service and proximity to the customer. By cooperating in national and international associations of the aluminum industry, the company is taking active part on the latest developments in the market. | ||
Other risks for the foreseeable business development are not visible at the moment. The controlling instruments developed, especially throughout 2004, guarantee a detailed penetration of the operating processes, whereby negative trends detected in the method could be countermanded by introducing proper measures. | ||
Merseburg, in March 2005 |
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Page 1
[German Public Auditors and Public Audit Firms]
as of January 1, 2002
Page 2
a) | preparation of annual tax returns for income tax, corporation tax and business tax, as well as net worth tax returns on the basis of the annual financial statements and other schedules and evidence required for tax purposes to be submitted by the client | ||
b) | examination of tax assessments in relation to the taxes mentioned in (a) | ||
c) | negotiations with tax authorities in connection with the returns and assessments mentioned in (a) and (b) | ||
d) | participation in tax audits and evaluation of the results of tax audits with respect to the taxes mentioned in (a) | ||
e) | participation in Einspruchs- und Beschwerdeverfahren [appeals and complaint procedures] with respect to the taxes mentioned in (a). |
a) | the treatment of nonrecurring tax matters, e. g. in the field of estate tax, capital transactions tax, real estate acquisition tax | ||
b) | participation and representation in proceedings before tax and administrative courts and in criminal proceedings with respect to taxes, and | ||
c) | the granting of advice and work with respect to expert opinions in connection with conversions of legal form, mergers, capital increases and reductions, financial reorganizations, admission and retirement of partners or shareholders, sale of a business, liquidations and the like. |
OF THE ANNUAL STATEMENT
OF ACCOUNTS AS OF
31st of DECEMBER, 2003
06217 MERSEBURG
Certified Auditor
FULDA-WEIMAR
Page | ||||||||||||
1. | ORDER OF AUDITING | 3 | ||||||||||
2. | GENERAL STATEMENT | 3 | ||||||||||
2.1 | Statement of Affairs of the Company’s Situation | 3 | ||||||||||
2.1.1 | Comments on the Evaluation by the Management’s Report on the Company’s Situation | 3 | ||||||||||
2.1.2 | Facts Impairing the Development of Threatening the Existence of the company | 4 | ||||||||||
2.2 | Irregularities | 4 | ||||||||||
2.2.1 | Accounting Irregularities | 4 | ||||||||||
2.2.2 | Other Irregularities | 4 | ||||||||||
3. | SUBJECTS, MANNER, AND SCOPE OF AUDIT | 4 | ||||||||||
3.1 | Subject to the Audit | 4 | ||||||||||
3.2 | Manner and Scope of the Audit | 5 | ||||||||||
4. | ESTABLISHED FACTS AND EXPLANATIONS CONCERNING THE ACCOUNTING | 6 | ||||||||||
4.1 | Bookkeeping and other Audited Documents | 6 | ||||||||||
4.2 | Annual Statement of Accounts | 6 | ||||||||||
4.2.1 | Regularity of the Annual Statement of Accounts | 6 | ||||||||||
4.2.2 | Breakdown and Explanation of the Items of the Annual Statement of Accounts | 7 | ||||||||||
4.2.3 | The Overall Statement of the Annual Statement of Accounts | 7 | ||||||||||
4.2.3.1 | Financial Position | 7 | ||||||||||
4.2.3.2 | Financial Situation | 9 | ||||||||||
4.2.3.3 | Earnings | 10 | ||||||||||
4.2.4 | Statement of Affairs | 11 | ||||||||||
5. | CERTIFICATION OF THE FINANCIAL STATEMENT | 11 | ||||||||||
6. | SIGNING OF THE AUDIT | 12 | ||||||||||
Table of Exhibits | ||||||||||||
exhibit | ||||||||||||
Balance Sheet | 1 | |||||||||||
Income Statement | 2 | |||||||||||
Statement of Fixed Assets | 3 | |||||||||||
Appendage for the Business Year 2003 | 4 | |||||||||||
Management Report | 5 | |||||||||||
Explanatory Comment | 6 | |||||||||||
The Contracts of Adequate and Orderly Reporting for Auditors | 7 |
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1. | ORDER OF AUDITING | |
The shareholders’ meeting of the MFC Aluminiumfolie Merseburg Inc. decided on the 8th December, 2003 to appoint Dipl.-Kfm. Hans -Dieter Alt, certified public accountant, to audit the 2003 business year of the company MFC Aluminiumfolie Merseburg Inc.The shareholders’ meeting assigned me as auditor of the annual statement of accounts and to report on the company’s situation as of 31st December 2003, of the company and to prepare a written report at the end. | ||
The general terms of contract included in this report, the version 1st of January 2002 for auditors and auditing companies, included in this report, shall be authoritative for the execution of this task and will be under my responsibility, which is also, in this case, regarding third parties. |
2. | GENERAL STATEMENTS | |
2.1 | Statement of Affairs of the Company’s Situation |
2.1.1 | Comments on the Evaluation by the Management’s Report on the Company’s Situation |
The management deals with the specifics of the course of business in the 2003 business year and gives a prospect of the future development in the business activities of MFC Aluminiumfolie Merseburg Inc. during 2003. | ||
The company’s management shows the development of the turnover in the 2003 business year and explains the central elements of the business flow of the in the following areas: production, procurement, maintenance/investment, financing, and personnel. As to the distribution area, the management points out the special importance of the marketing and distribution contract with IC Management Service Inc. in Vienna. This assessment can be followed fundamentally, especially in he situation of the re-entry in to the market. | ||
The management considered the earning situation during 2003 under review under the framework of planning, but considers it as not yet satisfactory. Potentials to increase profits are expected with the further increase of the company’s performance with the under proportional increasing cost of personnel and material as well as other expenses. This evaluation can be fundamentally followed. | ||
The risk evaluation in the statement of affairs as well as the outlook deal with the risk of the future development. Sales risks are not expected due to the high market volume in Europe. Activities to compensate the risks connected to the price volatility of price development for Aluminium are satisfactorily described. |
-3-
To sum up, this report describes the position of the company’s position realistically and represents the prospective developments correctly. |
2.1.2 | Facts Impairing the Development or Threatening the Existence of the Company |
I could not find any concrete facts that pose discernible risks or that could jeopardize the continued existence of the company an its development during my annual audit. |
2.2 | Accounting Irregularities |
2.2.1 | Accounting Irregularities |
The audit shows no faults or contraventions against legal rules, nor has the audit established any facts that show serious breaches of law or company’s statute by the company’s management, or by the employees. |
2.2.2 | Other Irregularities |
The audit has not established any facts which show contraventions of law or statute, or the legal representatives or the employees against such legal or statutory provisions, which do not directly relate to the accounting. |
3. | SUBJECTS, MANNER AND SCOPE OF AUDIT | |
3.1 | Subjects to the Audit |
I audited the annual statement of accounts, the book-keeping, and the report and the statement of affairs of MFC Aluminiumfolie Merseburg Inc.for the business year ending the 31st December, 2003. | ||
The management is responsible for the bookkeeping, the preparation of the annual statement of accounts, and the report on the company’s position. It is my task to evaluate the annual statement of account ‘s and the report of the statement of affairs of the company’s situation. | ||
The annual statement of accounts and the report on the statement of affairs of the company’s situation were audited according to the commercial law. | ||
The auditing related to the obedience of other legal rules within the audit of the annual statement of accounts is limited to the question whether effects out of these rules on the statement of accounts or the statement of affairs has to be expected. |
-4-
Procedures and situations, not within the framework is determined by the Commercial Law during the audit, for example the adequacy of insurance coverage, were not subjects to the audit. |
3.2 | Manner and Scope of the Audit |
The audit of the annual statement of a accounts was conducted in accordance with the German Commercial Code (HGB) accounting guidelines of section/section 316 ff as well as in conformity to the accounting principles established by the Institute of Auditors. | ||
In order to judge with sufficient certainty, the audit must be planned and carried out checking, whether or not the bookkeeping, the annual statement of account, and the company’s position are free of considerable faults. Within the auditing framework, documents used for the bookkeeping statements, the annual statement of accounts, and the company’s position were mainly assessed on the basis of sample audits. | ||
The audit included the assessment of the applied balancing, evaluation, and classification principles; the essential appraisal of management; and the assessment of the full annual statement of accounts representation of financial statements and the company’s position. | ||
I am of the opinion that this method of audit will produce a sufficiently safe basis for an evaluation of this audit. | ||
The audit planning was developed from an audit strategy based on risk-free and system-oriented audit approaches. | ||
In order to obtain evidence of the audit’s results, tests, systems and functions, analytical audit activities and individual sample audits were performed. Auditing the debtor’s and creditor’s positions meant to prove the existence of claims and debts through random sample checks of payments received in the following business year. The management and appointed informants kindly provided me with all of the necessary information and supporting documents I asked for. The management confirmed, by signing the customary professional form of completion, issued by the Institute of Certified Public Auditors in Germany, that all business transactions of the 2003 business year which are obligatorily subject to the bookkeeping were entered in the books of MFC Aluminumfolie Merseburg Inc., and that all assets and liabilities of the 2003 annual statements of accounts were listed. | ||
I also participated in the inventory checks. I audited the accuracy of the preparation, implementation and evaluation of inventory, and determined that the inventory is free of material misstatement. | ||
Material audits were carried out on the company grounds during February, 2004. | ||
The following report was carried out in my office. |
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4. | ESTABLISHED FACTS AND EXPLANATIONS CONCERNING THE ACCOUNTING | |
4.1 | Bookkeeping and other Audited Documents |
The books of MFC Aluminiumfolie Merseburg Inc. are kept properly according to the established rules. The accounting function was fulfilled. The requirements to fulfill the supporting documents function were met. In my view and according to my performed audit, the book-keeping and additional supporting documents being reviewed by myself met the basic principles of bookkeeping and the requirements of the law. | ||
Business transactions are registered by computer-aided processes and using the customary bookkeeping software. The bookkeeping programs include the real accounts, as well as the debtor’ s and creditor’s bookkeeping. | ||
The company uses Microsoft’s program “Navision Financial” for the accounting process. |
4.2 | Annual Statement of Accounts | |
4.2.1 | Regularity of the Annual Statement of Accounts |
The balance sheet and the profit and loss accounts have been prepared according to the commercial law of accounting of small companies, limited by shares, according to section 267 of the Commercial Code. In the 2003 business year the company had already accomplished the magnitude of a medium-sized corporation, but the re-qualification into a medium-sized corporation is not yet made according to section 267, section 4 of the Commercial Code. The approach, documentation, and evaluation provisions were observed, as well as the steadiness principle according to section 252,section 1, No. 6 of the Commercial Code. | ||
The profit and loss accounts have been prepared according to the overall cost-procedure, according to section 275, section 2 of the Commercial Code. | ||
The previous year’s annual statement of accounts was audited by the company Roelfs Auditing Company Partner AG on the date of 21st of February, 2003, and was certified with an unqualified certification. The shareholders meeting resolved the annual statement of accounts for 2002 on the 8th of December, 2003. | ||
The appendix was made according to legal standards and includes all of the statements for large corporations as required by the established laws. |
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4.2.2 | Breakdown und Explanation of the Items of the Annual Statement of Accounts |
Breakdown and explanation of the items in the annual statement of accounts can be seen in the appendix “Explanations to the Balance sheet as of the 31st December, 2003” and “Explanations to the Profit and Loss Account Statement for the time period between the 1stof January to 31st of December, 2003”. | ||
In the appendix, as part of the to be audited annual statement of accounts, the approach, documentation, and evaluation principles are mentioned. |
4.2.3 | The Overall Statement of the Annual Statement of Accounts | |
4.2.3.1 | Financial Position |
For the representation of the financial position, the figures mentioned in the balance sheet of 31st of December, 2003 and in the previous year’s balance sheet of the 31st of December, 2002 were analyzed. | ||
The overall assets of the company decreased during the period under review by 407 000€ or by 7,9% respectively as compared to those at the same date of the previous year’s balance sheet. | ||
Here, the decrease of the short-term tied up parts of the assets by 709 000€ are faced with an increase of long-term tied-up parts of the assets at 302 000€. Within the long-term assets, the value of the fixed assets increased by 295 000€ during the 2003 business year. This is attributed to the investment in technical facilities and machines. | ||
The intensity of fixed assets as to the ratio of fixed assets compared to assets to the overall assets increased by 7,6% ( in the previous year: 1,1% ) as of 31stof December, 2003. | ||
The short-term tied-up part of assets decreased by 709 000€ or 14,0% in comparison to the previous year and amounts to 4.363 000€ at the date under review. | ||
The short-term tied-up assets is determined by the inventories (2.783 000€) and the resources of liquid resources (1.230, 000€). | ||
The inventories amount to 58,9% ( in the previous year 54,4%) of the overall assets. The inventory stocks have insignificantly decreased ( by 900€ or 0,3%) — only in absolute numbers — compared to the previous year. | ||
Further 1.230 000€ ( in the previous year : 1.134 000€ ) of the short-termed tied-up assets is allocated to liquid resources in form of bank and cash deposits. | ||
The existence of liquid resources consist of 26,0% of the overall assets of the company as of the 31st of December, 2003. |
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The outstanding claims for supplies and services shown in the balance sheet decreased by 42 000€ to now 163 000€ compared to the previous year. The aggregated amount of claims is now to 3,5% of the overall assets (in the previous year: 4,0%). | ||
Other assets decreased by 187 000€ on the day under review compared to 449 000€ in the previous year. This corresponds to a decrease of 58,3%. On the 31st of December, 2003 the other assets thus had a portion of 4% in the account balance. In the previous year it amounted to 8,8%. | ||
The portion of short-termed tied-up assets of the overall assets decreased to a total of 92,4% (in the previous year: 98,9%). | ||
The special position containing a hidden allocation of profit will be partly portioned between the equity and the long- term loan capital, considering the future tax charge of capital by corporate tax. The part which is to be attributed to equity adds up to 17 000€ and the part to be attributed to the long- term loan capital runs up to 6 6 000€. | ||
The long term tied- up capital consists of equity, long-term reserves, and part- loan capital of the special position to 148 000€ (in the previous year: 102 000€). Long-term liabilities did not exist at the day of review as in the previous year. | ||
The equity capital increased by equity part of the special position shows the amount of 57 000€. This results in an increase of the equity capital portion of 1,2% (in the previous year 0,4%). This results in an equity increase of 35 000€ compared to the previous year. | ||
This increase is due to surplus proceeds and the part of equity means in the particular position. | ||
The attained annual surpluses of the 2003 business year amount to 22 000€ as compared to the previous year to 300€. | ||
The short-term loan capital beginning on the 31st of December, 2003 amounts to 4.574 000€ (as opposed to 5.027 000€ in the previous year) and especially account for 3.965 000€ in liabilities out of receipts of deliveries and services, (in the previous year amounted to 4.542 000€ ). | ||
These liabilities consist of the amount of 3.461 000€ in liabilities towards the main supplier. They are secured by guarantees between the holding company and the supplier. | ||
Furthermore 363 000€ are attributed to the short-term reserves, 97 000€ account for liabilities towards associated enterprises, and 149 000€ represent other liabilities included in this position. | ||
The part of short term loan capital of the total capital adds up to 96,9% (in the previous year: 98,0%) |
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Regarding the financial structure, it was determined that as of the 31st of December, 2003 longterm tied-up resources (359 000€) will not be fully covered by long-term funds (148 000€). | ||
This means that resources out of the short-term capital were used to finance fixed assets. | ||
The liquidation of assets can be evaluated both statically, on the basis of the balance data at the closing date of the account, and dynamically, on the basis of the periodical changes of figures by the changes in the inventory. | ||
Based on the balance data of the 31stof December, 2003 it shows a coverage of the short-term loan capital (4.574 000€) or short-term tied-up assets (4.363 000€) to the amount of 95,4% is presented. This percentage amounted to 100,9% last year. | ||
Thus the short-term liabilities were not completely covered by corresponding assets for a fixed time-period. |
4.2.3.2 | Financial Situation |
The company’s liquidity can be viewed both statically and dynamically on the basis of either figure changes or in inventory changes. | ||
For evaluating purposes of the company’s situation from a financial-analyzing point of view, it is significant which means result from the company’s own proceeds and which results have been attracted by it from the outside. | ||
The capital-flow account shows the company’s payment flows in the reporting year and provides information on how the company had acquired resources and what kind of investments and methods of financing were carried out. | ||
The cash-flow serves not only as an indicator for self-financing potential, but also as an indicator for success. The analytical strength of this figure consists of its capability to show to which degree the company could use financial means out of its turnover to pay for investment expenses, to pay for loan amounts, and for possible distribution of profits. | ||
The cash-flow from the current business accounts to 611 000€ in the 2003 reporting year. | ||
This positive cash-flow was particularly supplied by the decrease of liabilities up to 799 000€, and the increase of reserves by 222 000€. These positive factors were faced with a reduction of liquidation of liabilities which was consequently absorbing liquidity by 471 000€. | ||
This positive cash-flow supplied the possibilities for investment into the fixed assets property of 305,000€ in the 2003 business year. |
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An additional 200 000€ were used for the complete redemption of a loan in the 2003 business year. | ||
When balanced, the resources on hand of liquid resources could be increased as opposed to the date of the balance sheet of the previous year (31stof December, 2002 ) from 96 000€ to 1.230€. |
4.2.3.3 | Earnings |
The above overview originates from the basic structure of the profit-and-loss calculation according to section 275 of the German Commercial Code. In this the calculation the earnings before taxation are split partly in the operational earnings and partly in neutral earnings, whereas several positions are attributed according to their business qualification in a different manner than in the allocation of earnings according to Commercial Code. | ||
In comparison to the previous year, and according to the framework of the result analysis, the following must be pointed out. | ||
The MFC Aluminiumfolie Merseburg Inc. took over its business operation as of the 1stof October, 2002 from the insolvent FWM Folienwerk Merseburg Inc., Consequently, the figures of the previous year only reflect the assets of the fourth quarter in 2002. A comparison of the figures of the previous year has to keep this qualification in mind. | ||
The turnover proceeds of the company amount to 24.270 000€ in the reporting year, and after 4.539 000€ in the previous year. | ||
The stock of finished and unfinished products decreased by 192 000€. The value of the activated work done for supply of its own needs amounts to 3000€ (in the previous year:€ 0). This results into an overall performance of 23.881 000€ in the 2003 business year. | ||
In order to obtain the turnover results the material used amounted to 21.668 000€ (in the previous year: 5.853 000€). | ||
The gross proceeds secured in 2003, as a difference between the overall performance and the whole of material expenses, amount to 2.213 000€ corresponding to 9,3% (in the previous year: 10,8%). | ||
Costs of personnel amounted to 1.770 000€ in the reporting period. With that, the cost for personnel amounted to a share of 7,4% (in the previous year: 6,9%) of the overall performance. | ||
After the reduction of further operational expenses, the operational profit of 2003 achieved to the amount of 47 000€ (in the previous year : 1 000€) | ||
The financial results include interest earnings (13 000€) and interests payments (1 000€). | ||
The neutral result of 23 000€ (in the previous year: 0€) includes the attribution of the full amount to the special position with quota of reserves. |
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In consideration of the neutral result, an annual surplus was ascertained of 22 000€ in the 2003 reporting year. In the previous year an annual surplus was achieved in the amount of 300€. |
4.2.4 Statement of Affairs |
The management’s statement of affairs of the company’s complies with the statutory provisions of the commercial law. | ||
The statement of affairs matches with the annual statement of accounts as well as with my knowledge I acquired during my audit. It procures altogether a correct opinion of the state of affairs of the company. | ||
My audit has procured the result that the statement of affairs of the company has correctly presented the essential risks and future developments. |
5. | CERTIFICATION OF THE FINANCIAL STATEMENT |
Based on my audit I certified the following unqualified financial statement, included in the appendices 1 through 4 of the annual statement of MFC Aluminiumfolie Merseburg Inc., Merseburg as of the 31st of December, 2003 and in appendix 5 the statement of affairs for the 2003 business year. | ||
“I have audited the annual statement of accounts, including the bookkeeping and the company’s statement of affairs of the company of MFC Aluminiumfolie Merseburg Inc., Merseburg for the business year starting from the 1stof January to the 31st of December, The bookkeeping, the preparation of the annual statement of accounts, and the company’s statement of affairs according to the requirements of the commercial law are the responsibility of MFC Aluminiumfolie Merseburg Inc.’ management. It is my task to evaluate the annual accounts including the bookkeeping based on my audit and the company’s statement of affairs. | ||
I conducted the audit of the annual statement of accounts according to section 317 of the Commercial Code with due regard to the German rules of the Institute of Auditors for a lawful audit of the statement of accounts. According to this, the audit had to be planned and performed in such a way, that inaccuracies and breaches which could detrimentally effect the view of the assets, financial and earnings situation which were procured by the representation of the annual statement of accounts keeping in view the principles of orderly bookkeeping could be recognized. | ||
The selection of the audit measures are determined by the knowledge of the business operation and of the economical and legal environment of MFC Aluminiumfolie Merseburg Inc. as well as by the expectation of possible defects. The audit evaluated, on the basis of random samples, the efficiency of the internal account control system and evidence for the statement in bookkeeping, the annual statement of accounts and the company’s state of affairs. The audit includes the evaluation of applied balancing principles, as well as the essential evaluation of management and the evalua- |
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tion of the complete representation of the annual statement of accounts and the company’s statement of affairs. I am of the opinion that my audit provides a reasonable basis for my evaluation. | ||
My audit has not brought upon any objections whatsoever. | ||
In my opinion, the annual statement of accounts which was performed in compliance with the principles of orderly bookkeeping principles, gives a corresponding view of the real finance, earnings, and asset situation of MFC Aluminiumfolie Merseburg Inc.. The company’s statement of affairs provides us with an altogether correct view of the company’s situation and the risks of future developments. | ||
The financial statement have been prepared in accordance with generally accepted accounting principles in Germany, which conform in all material respects with those in the United States. | ||
The audit was also carried out in accordance with auditing standards in the United States. | ||
The foregoing statement is reported in accordance to the legal provisions and principles of orderly reporting of audits (IDW PS 450). | ||
The publication or rediscounting of the annual statement and/or the statement of affairs for the business year in a from the certified version divergent form ( including the translation in another voice ) needs my renewal comment, insofar my certification is quoted or my audit is to referred. | ||
I point thereto on section 317 of the Commercial Code. | ||
Fulda, the 16thof March, 2004 | ||
Hans-Dieter Alt Certified Auditor |
6. | SIGNING OF THE AUDIT |
The foregoing statement is reported in accordance to the legal provisions and principles of orderly reporting of audits. | ||
The certified unqualified financial statement of the 16thof March, 2004 is shown in section 5 under “Certification of Financial Statements of Auditor”. | ||
Fulda, 16thof March, 2004 | ||
Hans-Dieter Alt Certified Auditor |
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as of december, 31st, 2003
MFC Aluminumfolie Merseburg GmbH
31.12.2003 | 2002 | |||||||||||||||
EUR | EUR | TEUR | ||||||||||||||
ASSETS | ||||||||||||||||
A. | Fixed assets | |||||||||||||||
I. | Intangible assets | |||||||||||||||
1. | Franchises, trademarks, patents, licences and | |||||||||||||||
similar rights and licences to such rights | 8.165,00 | 12,4 | ||||||||||||||
II. | Property, plant and equipment | |||||||||||||||
1. | Technical equipment, plant and machinery | 250.045,77 | 0,0 | |||||||||||||
2. | Operational and office equipment | 59.347,38 | 13,8 | |||||||||||||
309.393,15 | 13,8 | |||||||||||||||
III. | Financial assets | |||||||||||||||
1. | Other loans | 41.631,00 | 31,2 | |||||||||||||
B. | Current assets | |||||||||||||||
I. | Inventories | |||||||||||||||
1. | Raw materials and supplies | 929.235,91 | 768,2 | |||||||||||||
2. | Work-in-process | 731.522,34 | 1.152,4 | |||||||||||||
3. | Finished goods | 1.122.283,56 | 870,9 | |||||||||||||
2.783.041,81 | 2.791,5 | |||||||||||||||
II. | Accounts receivable and other assets | |||||||||||||||
1. | Accounts receivable, trade | 163.480,65 | 205,0 | |||||||||||||
2. | Accounts due from affiliated companies | 0,00 | 491,5 | |||||||||||||
3. | Other assets | 187.129,12 | 449,0 | |||||||||||||
350.609,77 | 1.145,5 | |||||||||||||||
III. | Checks, cash onhand and in Federal Bank and | |||||||||||||||
in postal giro accounts and cash in banks | 1.229.562,09 | 1.134,4 | ||||||||||||||
C. | Deferred charges and prepaid expenses | 3.743,00 | 0,0 | |||||||||||||
4.726.145,82 | 5.128,8 | |||||||||||||||
LIABILITY AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
A. | Shareholders’ equity | |||||||||||||||
I. | Capital stock | 25.000,00 | ||||||||||||||
II. | Accumulated deficit | -2.598,50 | ||||||||||||||
III. | Net income | 21.920,50 | ||||||||||||||
44.322,00 | 22,4 | |||||||||||||||
B. | Special reserves with an equity portion | 23.000,00 | 0,00 | |||||||||||||
C. | Reserves and accrued liabilities | |||||||||||||||
1. | Pension reserves | 85.247,00 | 79,8 | |||||||||||||
2. | Accrued taxes | 9.020,00 | 0,0 | |||||||||||||
3. | Other reserves and accrued liabilities | 353.821,34 | 145,4 | |||||||||||||
448.088,34 | 225,2 | |||||||||||||||
D. | Liabilities | |||||||||||||||
1. | Accounts payable, trade | 3.965.101,14 | 4.541,8 | |||||||||||||
2. | Accounts due to affiliated companies | 97.074,85 | 210,6 | |||||||||||||
3. | Accounts to associates | 0,00 | 10,0 | |||||||||||||
4. | Other liabilities | 148.559,49 | 118,8 | |||||||||||||
- thereof for taxes: | ||||||||||||||||
EUR 1.982,70 | ||||||||||||||||
(previous year: EUR 15.310,20) | ||||||||||||||||
- thereof for social security: | ||||||||||||||||
EUR 43.635,16 | ||||||||||||||||
(previous year: EUR 36.843,96) | ||||||||||||||||
4.210.735,48 | 4.881,2 | |||||||||||||||
4.726.145,82 | 5.128,8 | |||||||||||||||
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2003 | 2002 | |||||||||||||||||||
EUR | EUR | EUR | EUR | |||||||||||||||||
1. | Sales | 24,069,654.30 | 4,539,262.99 | |||||||||||||||||
2. | Increase in finished goods and work-in-process | -192,121.96 | 2,023,284.86 | |||||||||||||||||
3. | Production for own plant and equipment capitalised | 2,667.51 | 0.00 | |||||||||||||||||
4. | Total output | 23,880,199.85 | 6,562,547.85 | |||||||||||||||||
5. | Other operating income | 393,728.20 | 146,970.53 | |||||||||||||||||
6. | Costs of materials | |||||||||||||||||||
a) | Costs of raw materials, supplies and trading stock | -20,800,925.69 | -5,813,846.11 | |||||||||||||||||
b) | Costs of purchased services | -866,978.88 | -21,667,904.57 | -39,563.59 | -5,853,409.70 | |||||||||||||||
7. | Personnel expenses | |||||||||||||||||||
a) | Wages and salaries | -1,472,268.41 | -315,008.87 | |||||||||||||||||
b) | Social security and pension | -297,313.66 | -137,990.30 | |||||||||||||||||
- thereof for pensions: | ||||||||||||||||||||
EUR 9.949,95 (previous year: EUR 79.763,00) | -1,769,582.07 | -452,999.17 | ||||||||||||||||||
8. | Depreciation, amortisation and write-offs | |||||||||||||||||||
a) | on intangible assets and plant and equipment | -13,876.80 | -1,604.78 | |||||||||||||||||
9. | Other operating expenses | -798,955.66 | -400,313.52 | |||||||||||||||||
10. | Other interest and similar income | 13,706.16 | 1,920.16 | |||||||||||||||||
11. | Interest and similar expenses | -1,281.54 | -2,560.54 | |||||||||||||||||
12. | Result from ordinary operations | 36,033.57 | 550.83 | |||||||||||||||||
13. | Taxes on income | -12,752.09 | 0.00 | |||||||||||||||||
14. | Other taxes | -1,360.98 | -262.00 | |||||||||||||||||
15. | Net income | 21,920.50 | 288.83 | |||||||||||||||||
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Statement of prime cost | Statement of depreciation, amortisation and write-offs | Net book | Net book | |||||||||||||||||||||||||||||||||||||||||
At cost | At cost | At cost | At cost | value | value | |||||||||||||||||||||||||||||||||||||||
01.01.2003 | Additions | Retirements | 31.12.2003 | 01.01.2003 | Additions | Retirements | 31.12.2003 | 31.12.2003 | 31.12.2002 | |||||||||||||||||||||||||||||||||||
EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | |||||||||||||||||||||||||||||||||||
I. | Intangible assets | |||||||||||||||||||||||||||||||||||||||||||
1. | Software | 12.779,78 | 0,00 | 0,00 | 12.779,78 | 354,78 | 4.260,00 | 0,00 | 4.614,78 | 8.165,00 | 12.425,00 | |||||||||||||||||||||||||||||||||
II. | Property, plant and equipment | |||||||||||||||||||||||||||||||||||||||||||
1. | Technical equipment, plant and machinery | 0,00 | 251.331,84 | 0,00 | 251.331,84 | 0,00 | 1.286,07 | 0,00 | 1.286,07 | 250.045,77 | 0,00 | |||||||||||||||||||||||||||||||||
2. | Operational and office equipment | 15.000,00 | 53.928,11 | 0,00 | 68.928,11 | 1.250,01 | 8.330,73 | 0,00 | 9.580,74 | 59.347,38 | 13.750,00 | |||||||||||||||||||||||||||||||||
III. | Financial assets | |||||||||||||||||||||||||||||||||||||||||||
1. | Other loans | 31.198,00 | 10.433,00 | 0,00 | 41.631,00 | 0,00 | 0,00 | 0,00 | 0,00 | 41.631,00 | 31.198,00 | |||||||||||||||||||||||||||||||||
total | 58.977,78 | 315.692,95 | 0,00 | 374.670,73 | 1.604,79 | 13.876,80 | 0,00 | 15.481,59 | 359.189,15 | 57.373,00 | ||||||||||||||||||||||||||||||||||
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€ | ||||
accruals for vacation pay | 45.600,00 | |||
pension reserves | 85.247,00 | |||
accrued taxes | 9.020,00 | |||
bonus reserves | 20.000,00 | |||
accruals for warranty claims | 94.221,34 | |||
accruals for lawsuit | 4.000,00 | |||
accruals for repairs in arrears | 130.500,00 | |||
accruals for discounts, have to give | 29.500,00 | |||
accruals for invoice receivable | 2.000,00 | |||
accruals for financial statement and audit costs | 24.000,00 | |||
accruals for workmen’s compensation board | 4.000,00 | |||
448.088,34 | ||||
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remaining | remaining | remaining | ||||||||||||||||||
period until | period 1 till | more than | ||||||||||||||||||
all | 1 year | 5 years | 5 years | |||||||||||||||||
€ | € | € | € | |||||||||||||||||
1. | accounts payable for goods and services | |||||||||||||||||||
accounts payable for goods and services | 3.948.864,74 | 3.948.864,74 | 0,00 | 0,00 | ||||||||||||||||
accounts payable for goods and services EG | 11.390,10 | 11.390,10 | 0,00 | 0,00 | ||||||||||||||||
accounts payable for goods an services non-EG | 4.846,30 | 4.846,30 | 0,00 | 0,00 | ||||||||||||||||
3.965.101,14 | 3.965.101,14 | 0,00 | 0,00 | |||||||||||||||||
2. | accounts due to affiliates companies | |||||||||||||||||||
MFC Capital Partners | 3.651,85 | 3.651,85 | 0,00 | 0,00 | ||||||||||||||||
MFC Bancorp Ltd. | 50.833,33 | 50.833,33 | ||||||||||||||||||
MFC Commodities GmbH | 8.843,79 | 8.843,79 | ||||||||||||||||||
IC Management Service GmbH | 33.745,88 | 33.745,88 | 0,00 | 0,00 | ||||||||||||||||
97.074,85 | 97.074,85 | 0,00 | 0,00 | |||||||||||||||||
3. | other liabilities | |||||||||||||||||||
accounts for taxes | 1.982,70 | 1.982,70 | 0,00 | 0,00 | ||||||||||||||||
accounts due to sickness insurance fund | 43.635,16 | 43.635,16 | 0,00 | 0,00 | ||||||||||||||||
accounts due to co-workers | 75.947,93 | 75.947,93 | 0,00 | 0,00 | ||||||||||||||||
remaining other liabilities | 10.303,32 | 10.303,32 | 0,00 | 0,00 | ||||||||||||||||
wage tax | 16.690,38 | 16.690,38 | 0,00 | 0,00 | ||||||||||||||||
148.559,49 | 148.559,49 | 0,00 | 0,00 | |||||||||||||||||
amount | 4.210.735,48 | 4.210.735,48 | 0,00 | 0,00 | ||||||||||||||||
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Management Report 2003
• | a long-term lease and purchase option contract with the property fund Sachsen-Anhalt GmbH for plants, property and building | ||
• | the sales contract with the insolvency manager of the FWM Folienwerk GmbH | ||
• | a long-term supply contract for foil cogging down volume with the Nickelhütte Aue GmbH, Aue | ||
• | a marketing and a distribution contract with the IC Management Service GmbH, Wien |
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- 23 -
- 24 -
- 25 -
- 26 -
• | secured long-term dates of payment in the purchase for “foil cogging down volume”, with an endorsement of the partner at a value of 3,5 millions€ | ||
• | short term dates of payment in the sales in the context of a marketing and distribution contract | ||
• | gained cash-flow |
31.12.2002 | 44 AK | |||
31.03.2003 | 49 AK | |||
30.06.2003 | 50 AK | |||
30.09.2003 | 51 AK, of it 1 apprentice | |||
31.12.2003 | 51 AK, of it 1 apprentice |
- 27 -
Production | 35 | |||
maintenance | 6 (1 apprentice) | |||
selling | 3 | |||
quality department/laboratory | 2 | |||
purchase/job planning | 2 | |||
commercial range | 3 | |||
amount | 51 |
- 28 -
1. | Total output | 100,0 | % | |||
2. | Expenditure for material and supplies | 89,3 | % | |||
2.1 thereby “foil cogging down volume” | 78,4 | % | ||||
3. | Personnel expenditure | 7,3 | % | |||
4. | Other expenditures | 3,4 | % |
Fixed assets | 6,6 | % | ||
Supplies | 58,9 | % | ||
Demands | 8,4 | % | ||
cash/assets | 26,1 | % |
- 29 -
- 30 -
- 31 -
to the Balance sheet as of 31 December 2003
A. | Fixed assets | |
The fixed assets are seized in detail in an EDV – supported asset accounting. For the valuation and the determination of the depreciation necessary data, such as acquisition and manufacturing costs, expected life and applied depreciation method are evident from it. The general ledger accounts of the financial accounting are reconciled with the accounts program. | ||
The composition and development of the fixed assets are to be inferred from the statement of fixed assets (see exhibit 4). |
I. | Intangible assets |
1. | Franchises, trademarks, patents, | |||||
licences and similar rights and licences | ||||||
to such rights | € | 8.165,00 | ||||
(previous year: | € | 12.425,00 | ) | |||
Under this position only software is presented. |
2003 | 2002 | |||||||
€ | € | |||||||
At cost 01.01. | 12.425,00 | 0,00 | ||||||
Additions | 0,00 | 12.779,79 | ||||||
Retirements | 0,00 | 0,00 | ||||||
Depreciation | 4.260,00 | 354,78 | ||||||
At cost 31.12. | 8.165,00 | 12.425,01 | ||||||
The software has to depreciated about a period of three years. |
-33-
II. | Property, plant and equipment |
1. | Technical equipment, plant | |||||
and machinery | € | 250.045,77 | ||||
(previous year: | € | 0,00 | ) |
2003 | 2002 | |||||||
€ | € | |||||||
At cost 01.01. | 0,00 | 0,00 | ||||||
Additions | 251.331,84 | 0,00 | ||||||
Retirements | 0,00 | 0,00 | ||||||
Depreciation | 1.286,07 | 0,00 | ||||||
At cost 31.12. | 250.045,77 | 0,00 | ||||||
The additions in the business year 2003 allot i.H.v.€ 217.217,04 on energy assets. Besides plant of the material store, the rolling mill and the annealing furnaces are contained in the additions. | |||
The assets of the technical equipment, plant and machinery have to be depreciated in a period by five to seven years. |
-34-
2. | Other plants, operational and office equipment | € | 59.347,38 | |||
(previous year: | € | 13.750,00 | ) |
Other plants, operational and office equipment have developed in the business year 2003 as follows: |
2003 | 2002 | |||||||
€ | € | |||||||
At cost 01.01. | 13.750,00 | 0,00 | ||||||
Additions | 53.928,11 | 15.000,00 | ||||||
Retirements | 0,00 | 0,00 | ||||||
Depreciation | 8.330,73 | 1.250,00 | ||||||
At cost 31.12. | 59.347,38 | 13.750,00 | ||||||
The additions in the business year 2003 compose from EDV systems and sanitary facilities. | |||
The assets of the operational and office equipment have to be depreciated in a period by three to five years. |
III. | Financial assets |
1. | Other loans | € | 41.631,00 | |||
(previous year: | € | 31.198,00 | ) |
This position encloses exclusively the cash surrender value for Mr. Bernd Gebhardt. |
-35-
B. | Current assets |
I. | Inventories |
1. | Raw materials and supplies | € | 929.235,91 | |||
(previous year: | € | 768.160,88 | ) |
€ | ||||
inventory 01.01. | 768.160,88 | |||
inventory increase | 161.075,03 | |||
inventory 31.12. | 929.235,91 | |||
2. | Work-in-process | € | 731.522,34 | |||
(previous year: | € | 1.152.427,84 | ) |
€ | ||||
inventory 01.01. | 1.152.427,84 | |||
retirements | 420.905,50 | |||
inventory 31.12. | 731.522,34 | |||
3. | Finished goods | € | 1.122.283,56 | |||
(previous year: | € | 870.857,02 | ) |
€ | ||||
inventory 01.01. | 870.857,02 | |||
inventory increase | 251.426,54 | |||
inventory 31.12. | 1.122.283,56 | |||
II. | Accounts receivable and other assets |
1. | Accounts receivable, trade | € | 163.480,65 | |||
(previous year: | € | 205.026,73 | ) |
2003 | 2002 | |||||||
€ | € | |||||||
receivable trial balance per 31.12. | 165.480,65 | 207.026,73 | ||||||
doubtful accounts | 0,00 | 0,00 |
-37-
2003 | 2002 | |||||||
€ | € | |||||||
./. valuation reserve | 0,00 | 0,00 | ||||||
./. lump-sum allowance | 2.000,00 | 2.000,00 | ||||||
balance sheet charge | 163.480,65 | 205.026,73 | ||||||
2. | Accounts due from affiliated companies | € | 0,00 | |||
(previous year: | € | 491.521,34 | ) | |||
3. | Other assets | € | 187.129,12 | |||
(previous year: | € | 449.005,11 | ) |
€ | ||||
receivables from turnover tax | 187.039,20 | |||
other receivables | 89,92 | |||
187,129,12 | ||||
-38-
III. | Checks, cash onhand and in Federal Bank and in postal giro Accounts and cash in banks | € | 1.229.562,09 | |||
(previous year: | € | 1.134.419,53 | ) |
31.12.2003 | ||||
€ | ||||
Kreissparkasse Merseburg-Querfurt, current account | 175.781,17 | |||
Kreissparkasse Merseburg-Querfurt, term-money | 1.000.000,00 | |||
Kreissparkasse Merseburg-Querfurt, fixed deposits | 53.427,15 | |||
Cash | 353,77 | |||
Cash balance 31.12.2003 | 1.229.562,09 | |||
C. | Deferred charges and prepaid expenses | € | 3.743,00 | |||
(previous year: | € | 0,00 | ) |
-39-
A. | Shareholders’ equity |
I. Capital stock | € | 25.000,00 | ||||
(previous year: | € | 25.000,00 | ) |
II. Accumulated deficit | € | 2.598,50 | ||||
(previous year: | € | 2.887,33 | ) |
III. Net income | € | 21.920,50 | ||||
(previous year: | € | 288,83 | ) |
-40-
B. | Special reserves with an equity portion | € | 23.000,00 | |||
(previous year: | € | 0,00 | ) |
at cost | addition | retirements | at cost | |||||||||||||||||
01.01.2003 | 2003 | 2003 | 31.12.2003 | |||||||||||||||||
€ | € | € | € | |||||||||||||||||
saving reserve as defined by § 7g (3) EStG | 0,00 | 23.000,00 | 0,00 | 23.000,00 | ||||||||||||||||
0,00 | 23.000,00 | 0,00 | 23.000,00 | |||||||||||||||||
C. | Accruals |
1. | Pension reserves | € | 85.247,00 | |||
(previous year: | € | 79.763,00 | ) |
-41-
at cost | con- | re- | pro- | at cost | ||||||||||||||||
01.01.2003 | sumption | versal | vision | 31.12.2003 | ||||||||||||||||
€ | € | € | € | € | ||||||||||||||||
reserves for pensions | 79.763,00 | 0,00 | 0,00 | 5.484,00 | 85.247,00 | |||||||||||||||
79.763,00 | 0,00 | 0,00 | 5.484,00 | 85.247,00 | ||||||||||||||||
2. | Accrued taxes | € | 9.020,00 | |||
(previous year: | € | 0,00 | ) |
at cost | con- | re- | pro- | at cost | ||||||||||||||||
01.01.2003 | sumption | versal | vision | 31.12.2003 | ||||||||||||||||
€ | € | € | € | € | ||||||||||||||||
KSt-reserve | 0,00 | 0,00 | 0,00 | 5.075,00 | 5.075,00 | |||||||||||||||
GewSt-reserve | 0,00 | 0,00 | 0,00 | 3.739,00 | 3.739,00 | |||||||||||||||
SolZ-reserve | 0,00 | 0,00 | 0,00 | 206,00 | 206,00 | |||||||||||||||
0,00 | 0,00 | 0,00 | 9.020,00 | 9.020,00 | ||||||||||||||||
-42-
3. | Other reserves and accrued liabilities | € | 353.821,34 | |||
(previous year: | € | 145.400,00 | ) |
at cost | con- | re- | pro- | at cost | ||||||||||||||||||||
01.01.2003 | sumption | versal | vision | 31.12.2003 | ||||||||||||||||||||
€ | € | € | € | € | ||||||||||||||||||||
1. | accruel for vacation pay | 24.000,00 | 24.000,00 | 0,00 | 45.600,00 | 45.600,00 | ||||||||||||||||||
2. | bonus | 0,00 | 0,00 | 0,00 | 20.000,00 | 20.000,00 | ||||||||||||||||||
3. | warranty | 15.400,00 | 15.400,00 | 0,00 | 94.221,34 | 94.221,34 | ||||||||||||||||||
4. | lawsuit | 9.100,00 | 5.100,00 | 0,00 | 0,00 | 4.000,00 | ||||||||||||||||||
5. | repairs in arrears | 0,00 | 0,00 | 0,00 | 130.500,00 | 130.500,00 | ||||||||||||||||||
6. | discounts, have to give | 16.000,00 | 16.000,00 | 0,00 | 29.500,00 | 29.500,00 | ||||||||||||||||||
7. | credit entry | 58.000,00 | 58.000,00 | 0,00 | 0,00 | 0,00 | ||||||||||||||||||
8. | invoice receivable | 0,00 | 0,00 | 0,00 | 2.000,00 | 2.000,00 | ||||||||||||||||||
9. | insurances | 6.100,00 | 6.100,00 | 0,00 | 0,00 | 0,00 | ||||||||||||||||||
10. | financial statement and audit costs | 11.800,00 | 11.800,00 | 0,00 | 24.000,00 | 24.000,00 | ||||||||||||||||||
11. | workmen´s compensation board | 5.000,00 | 5.000,00 | 0,00 | 4.000,00 | 4.000,00 | ||||||||||||||||||
145.400,00 | 141.400,00 | 0,00 | 349.821,34 | 353.821,34 | ||||||||||||||||||||
-43-
-44-
D. | Liabilities |
1. | Accounts payable for goods and services | € | 3.965.101,14 | |||
(previous year:€ | 4.541.871,90 | ) |
2. | Accounts due to affiliated companies | € | 97.074,85 | |||
(previous year: | € | 210.604,95 | ) |
31.12.2003 | ||||
€ | ||||
MFC Capital Partners | 3.651,85 | |||
MFC Bancorp. Ltd. | 50.833,33 | |||
MFC Commodities GmbH | 8.843,79 | |||
IC Management Service GmbH | 33.745,88 | |||
Accounts due to affiliated companies 31.12.2003 | 97.074,85 | |||
-45-
3. Other liabilities | € | 148.559,49 | ||||
(previous year: | € | 118.750,10 | ) |
-46-
PROFIT AND LOSS STATEMENT
from 01. january till 31. december 2003
1. | Sales | € | 24.069.654,30 | |||
(previous year: | € | 4.539.262,99 | ) |
€ | ||||
foil German territory | 15.177.049,56 | |||
foil foreign country | 9.481.880,85 | |||
scrap material | 1.364.495,21 | |||
sales deductions | -1.953.771,43 | |||
24.069.654,19 | ||||
2. | Inventory decrease | € | -192.121,96 | |||
(previous year: | € | 2.023.284,86 | ) |
€ | ||||
inventory decrease scrap material | -22.643,00 | |||
inventory decrease foil | -425.379,50 | |||
inventory increase foil | 255.900,54 | |||
-192.121,96 | ||||
-47-
3. | Production for own plant capitalised | € | 2.667,51 | |||
(previous year: | € | 0,00 | ) | |||
4. | Total output | € | 23.880.199,85 | |||
(previous year: | € | 6.562.547,85 | ) |
5. | Other operating income | € | 393.728,20 | |||
(previous year: | € | 146.970,53 | ) |
€ | ||||
other income Flex-Team | 319.984,44 | |||
expense allowance | 56.519,17 | |||
remaining other operating income | 17.224,59 | |||
393.728,20 | ||||
-48-
6. | Cost of materials |
a) Cost of raw materials, supplies and trading stock | € | 20.800.925,69 | ||
(Vorjahr: | € | 5.813.846,11 | ) |
€ | ||||
Foil material | 19.018.317,00 | |||
Cost of supplies and trading stock | 1.782.608,69 | |||
20.800.925,69 | ||||
b) Cost of purchased services | € | 866.978,88 | ||
(previous year: | € | 39.563,59 | ) |
€ | ||||
third party work | 53.916,99 | |||
freightage | 531.983,22 | |||
outside repair and maintenance | 292.553,24 | |||
less discount | -11.474,57 | |||
866.978,88 | ||||
-49-
7. | Personell expenses |
a) | Wages and salaries | € | 1.472.268,41 | |||
(previous year: | € | 315.008,87 | ) |
b) | Social security, pension and other benefit cost | € | 297.313,66 | |||
(previous year: | € | 137.990,30 | ) |
8. | Depreciation on intangible assets, plant and equipment | € | 13.876,80 | |||
(previous year: | € | 1.604,78 | ) |
-50-
9. | Other operating expenses | € | 798.955,66 | |||
(previous year: | € | 400.313,52 | ) |
€ | ||||
lease, rent, hereditary building interests | 304.044,62 | |||
commissions | 84.850,12 | |||
reserve for warranties | 78.821,34 | |||
guarantee charges | 65.833,33 | |||
lease charges | 32.341,64 | |||
insurance premiums | 26.050,96 | |||
scrapping expenses | 25.812,05 | |||
transportation expenses | 24.716,33 | |||
transferring in special reserves | 23.000,00 | |||
financial statement and audit expenses | 19.112,40 | |||
legal and professional fees | 14.293,36 | |||
telephone and internet fees | 13.401,03 | |||
remaining other operating expenses | 86.678,48 | |||
798.955,66 | ||||
10. | Other interest and similar income | € | 13.706,16 | |||
(previous year: | € | 1.920,16 | ) |
-51-
11. | Interest and similar expenses | € | 1.281,54 | |||
(previous year: | € | 2.560,54 | ) |
12. | Result from ordinary operations | € | 36.033,57 | |||
(previous year: | € | 550,83 | ) |
13. | Taxes on income | € | 12.752,09 | |||
(previous year: | € | 0,00 | ) | |||
14. | Other taxes | € | 1.360,98 | |||
(previous year: | € | 262,00 | ) |
15. | Net income | € | 21.920,50 | |||
(previous year: | € | 288,83 | ) |
-52-
Page 1
[German Public Auditors and Public Audit Firms]
as of January 1, 2002
Page 2
a) | preparation of annual tax returns for income tax, corporation tax and business tax, as well as net worth tax returns on the basis of the annual financial statements and other schedules and evidence required for tax purposes to be submitted by the client | ||
b) | examination of tax assessments in relation to the taxes mentioned in (a) | ||
c) | negotiations with tax authorities in connection with the returns and assessments mentioned in (a) and (b) | ||
d) | participation in tax audits and evaluation of the results of tax audits with respect to the taxes mentioned in (a) | ||
e) | participation in Einspruchs- und Beschwerdeverfahren [appeals and complaint procedures] with respect to the taxes mentioned in (a). |
a) | the treatment of nonrecurring tax matters, e. g. in the field of estate tax, capital transactions tax, real estate acquisition tax | ||
b) | participation and representation in proceedings before tax and administrative courts and in criminal proceedings with respect to taxes, and | ||
c) | the granting of advice and work with respect to expert opinions in connection with conversions of legal form, mergers, capital increases and reductions, financial reorganizations, admission and retirement of partners or shareholders, sale of a business, liquidations and the like. |
Unaudited Consolidated Financial Statements
June 30, 2005
Balance Sheet
As at June 30, 2005 and December 31, 2004
2005 | 2004 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Fixed Assets | ||||||||
Intangible assets | € | 8,695 | € | 11,484 | ||||
Tangible assets | 545,841 | 538,357 | ||||||
Financial assets | 56,157 | 56,157 | ||||||
610,693 | 605,998 | |||||||
Current assets | ||||||||
Stocks | 3,987,796 | 3,305,321 | ||||||
Receivables and other assets | 927,763 | 446,291 | ||||||
Cash | 816,361 | 233,131 | ||||||
5,731,920 | 3,984,743 | |||||||
Deferred charges and prepaid expenses | 8,462 | 13,852 | ||||||
€ | 6,351,075 | € | 4,604,593 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Equity capital | ||||||||
Subscribed capital | € | 25,000 | € | 25,000 | ||||
Profit carried forward | 44,147 | 19,322 | ||||||
Profit for the current period | 96,913 | 24,825 | ||||||
166,060 | 69,147 | |||||||
Special reserve with an equity portion | 165,759 | 92,310 | ||||||
Provisions | 360,607 | 322,973 | ||||||
Liabilities | ||||||||
Trade payables | 5,480,885 | 3,931,304 | ||||||
Accounts payable to associated companies | 32,877 | 37,366 | ||||||
Other liabilities | 144,887 | 151,493 | ||||||
5,658,649 | 4,120,163 | |||||||
€ | 6,351,075 | € | 4,604,593 | |||||
Income statement
For Six Months Ended June 30, 2005 and 2004
(Unaudited)
2005 | 2004 | |||||||
Sales income | € | 13,847,279 | € | 13,024,009 | ||||
Increase of finished and unfinished goods | (117,278 | ) | 458,060 | |||||
Other operating income | 174,319 | 246,981 | ||||||
Total performance | 13,904,320 | 13,729,050 | ||||||
Costs of materials | 12,410,976 | 12,286,231 | ||||||
Personnel expenses | 918,262 | 905,214 | ||||||
Depreciation | 58,757 | 32,790 | ||||||
Other operating expenses | 409,564 | 353,317 | ||||||
Income before interest and taxes | 106,761 | 151,498 | ||||||
Interest and other similar income | 3,972 | 5,315 | ||||||
Interest and other similar expenses | (2,424 | ) | (1,219 | ) | ||||
Income from ordinary operations | 108,309 | 155,594 | ||||||
Taxes | (11,396 | ) | (1,682 | ) | ||||
Net income for the period | € | 96,913 | € | 153,912 | ||||
Notes to Unaudited Financial Statements
June 30, 2005
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As at April 30, 2005
(Dollars in Thousands)
Purchase | Pro forma | |||||||||||||||||||||||
Historical | consideration | Merseberg | AWP | adjustments | Pro forma | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current Assets | ||||||||||||||||||||||||
Cash and cash equivalent | 14,324 | (10,336 | ) | 1,286 | 778 | 6,052 | ||||||||||||||||||
Accounts receivable, net | — | 1,048 | 1,034 | 2,082 | ||||||||||||||||||||
Due from related parties | — | 444 | 444 | |||||||||||||||||||||
Inventories | — | 4,375 | 4,862 | 9,237 | ||||||||||||||||||||
Prepaid expenses | 166 | 13 | 179 | |||||||||||||||||||||
14,490 | (10,336 | ) | 6,722 | 7,118 | — | 17,994 | ||||||||||||||||||
Non-current Assets | ||||||||||||||||||||||||
Investment in Merseberg | — | 9,070 | (9,070 | ) | — | |||||||||||||||||||
Investment in AWP | — | 10,698 | (10,698 | ) | — | |||||||||||||||||||
Goodwill | — | 1,301 | 4,563 | 5,864 | ||||||||||||||||||||
Fixed assets, net | 65 | 730 | 260 | 23,320 | 24,375 | |||||||||||||||||||
Intangible assets, net | — | 12 | 12 | |||||||||||||||||||||
Deferred credit facility costs | 319 | 319 | ||||||||||||||||||||||
384 | 19,768 | 742 | 1,561 | 8,115 | 30,570 | |||||||||||||||||||
TOTAL ASSETS | 14,874 | 9,432 | 7,464 | 8,679 | 8,115 | 48,564 | ||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Current Liabilities | ||||||||||||||||||||||||
Accounts payable and accrued liabilities | 993 | 7,166 | 7,785 | 15,944 | ||||||||||||||||||||
Accrued income tax | 2,436 | 2,436 | ||||||||||||||||||||||
Due to related parties | 655 | 35 | 690 | |||||||||||||||||||||
Due to related parties, subordinated | — | 532 | 532 | |||||||||||||||||||||
4,084 | — | 7,201 | 8,317 | — | 19,602 | |||||||||||||||||||
Long-term Liabilities | ||||||||||||||||||||||||
Note payable | — | 3,902 | 3,902 | |||||||||||||||||||||
Note payable, related party | — | 5,530 | 5,530 | |||||||||||||||||||||
Other liability, related party and subordinated | — | 1,370 | 1,370 | |||||||||||||||||||||
Capital lease obligations | — | 7,370 | 7,370 | |||||||||||||||||||||
— | 9,432 | — | 1,370 | 7,370 | 18,172 | |||||||||||||||||||
Total Liabilities | 4,084 | 9,432 | 7,201 | 9,687 | 7,370 | 37,774 | ||||||||||||||||||
STOCKHOLDER’S EQUITY | ||||||||||||||||||||||||
Capital stock | 2,029 | 32 | 32 | (64 | ) | 2,029 | ||||||||||||||||||
Additional paid-in capital | 28,010 | 28,010 | ||||||||||||||||||||||
Accumulated deficit | (13,936 | ) | 231 | (1,040 | ) | 809 | (13,936 | ) | ||||||||||||||||
Treasury stock | (5,313 | ) | (5,313 | ) | ||||||||||||||||||||
10,790 | — | 263 | (1,008 | ) | 745 | 10,790 | ||||||||||||||||||
TOTAL LIABILITIES & EQUITY | 14,874 | 9,432 | 7,464 | 8,679 | 8,115 | 48,564 | ||||||||||||||||||
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For Nine Months Ended April 30, 2005
(Dollars in Thousands, Except Per Share Amounts)
Historical | Merseberg | AWP | Pro forma | Pro forma | ||||||||||||||||
consolidated | historical | historical | adjustments | consolidated | ||||||||||||||||
REVENUE | ||||||||||||||||||||
Net sales | — | 27,633 | 30,078 | 57,711 | ||||||||||||||||
Cost of sales | — | 25,608 | 29,085 | 54,693 | ||||||||||||||||
Cost of sales, depreciation | — | 94 | 49 | 1,045 | 1,188 | |||||||||||||||
— | 1,931 | 944 | (1,045 | ) | 1,830 | |||||||||||||||
COST & EXPENSES | ||||||||||||||||||||
General and administrative expenses | 1,444 | 1,215 | 505 | 3,164 | ||||||||||||||||
Selling commission, related parties | — | 1,278 | 903 | (1,309 | ) | 872 | ||||||||||||||
1,444 | 2,493 | 1,408 | (1,309 | ) | 4,036 | |||||||||||||||
Operating loss | (1,444 | ) | (562 | ) | (464 | ) | 264 | (2,206 | ) | |||||||||||
Other income (expenses): | ||||||||||||||||||||
Interest and financing charges, net | 52 | (190 | ) | (545 | ) | (683 | ) | |||||||||||||
Other | — | 616 | 231 | 847 | ||||||||||||||||
52 | 616 | 41 | (545 | ) | 164 | |||||||||||||||
Income before income taxes | (1,392 | ) | 54 | (423 | ) | (281 | ) | (2,042 | ) | |||||||||||
Income taxes | — | 28 | — | 28 | ||||||||||||||||
Net loss | (1,392 | ) | 26 | (423 | ) | (281 | ) | (2,070 | ) | |||||||||||
Net loss per share, basic and diluted | (0.08 | ) | (0.11 | ) | ||||||||||||||||
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For The Year Ended July 31, 2004
(Dollars in Thousands, Except Per Share Amounts)
Historical | Merseberg | AWP | Pro forma | Pro forma | ||||||||||||||||
consolidated | historical | historical | adjustments | consolidated | ||||||||||||||||
REVENUE | ||||||||||||||||||||
Net sales | 39 | 30,679 | 37,036 | 67,754 | ||||||||||||||||
Cost of sales | 74 | 28,320 | 36,390 | 64,784 | ||||||||||||||||
Cost of sales, depreciation | — | 50 | 68 | 1,302 | 1,420 | |||||||||||||||
(35 | ) | 2,309 | 578 | (1,302 | ) | 1,550 | ||||||||||||||
COST & EXPENSES | ||||||||||||||||||||
General and administrative expenses | 2,719 | 1,411 | 868 | 4,998 | ||||||||||||||||
Selling commission, related parties | — | 1,354 | — | (812 | ) | 542 | ||||||||||||||
2,719 | 2,765 | 868 | (812 | ) | 5,540 | |||||||||||||||
Operating loss | (2,754 | ) | (456 | ) | (290 | ) | (490 | ) | (3,990 | ) | ||||||||||
Other income (expenses): | ||||||||||||||||||||
Interest and financing charges, net | (30 | ) | 10 | (320 | ) | (679 | ) | (1,019 | ) | |||||||||||
Gain on patents, property and equipment | 212 | — | — | 212 | ||||||||||||||||
Other | 17 | 532 | 113 | 662 | ||||||||||||||||
199 | 542 | (207 | ) | (679 | ) | (145 | ) | |||||||||||||
Income before income taxes | (2,555 | ) | 86 | (497 | ) | (1,169 | ) | (4,135 | ) | |||||||||||
Income taxes | — | 16 | — | 16 | ||||||||||||||||
Net loss | (2,555 | ) | 70 | (497 | ) | (1,169 | ) | (4,151 | ) | |||||||||||
Net loss per share, basic and diluted | (0.16 | ) | (0.27 | ) | ||||||||||||||||
(Expressed in thousands, unless otherwise stated)
US$1 against€ | ||||
Average for the nine months ended April 30, 2005 | 0.7795 | |||
Average for the year ended July 31, 2004 | 0.8341 | |||
As at April 30, 2005 | 0.7740 |
• | The Acquisitions were deemed to be completed on April 30, 2005 on the same terms as described in Note 3. | |
• | Purchase accounting is used to account for the Acquisitions. The cost of the Acquisitions would be allocated to Merseburg and AWP to the assets acquired and liabilities assumed based on their estimated fair values at the date of the Acquisitions. | |
• | Merseburg and AWP have options, under contractual agreements with a German government agency, to acquire certain fixed assets at predetermined prices. It is assumed that these options were exercised on the date of the Acquisitions and financed by long-term capital lease obligations with market interest rate. |
• | The Acquisitions were deemed to be completed on August 1, 2004 for the pro forma consolidated statement of operations for the nine months ended April 30, 2005, and to be completed on August 1, 2003 for the pro forma consolidated statement of operations for the year ended July 31, 2004. | |
• | Interest charge increased and interest income decreased as a result of the creation of notes payable and reduction in cash deposit in connection with the payments for the Acquisitions. | |
• | Selling commission at 5% was paid to subsidiaries of MFC Bancorp Ltd. which, through various entities, currently controls approximately 27.8% equity of the Company. The commission rate has been reduced to 2% net since the consummation of the Acquisitions. The selling commission amounts on these pro forma consolidated statements of operations were reduced to reflect such reduction as if the reduction was effective throughout the periods under review. | |
• | It is also assumed that the fixed assets under the option agreements were acquired. Depreciation expenses on the fixed assets and interest expenses on the long-term capital lease obligations were accrued for the entire periods under review. |
10. | Material Contracts | |
10.1* | Share Purchase Agreement Between Blake International Limited and Cathay Merchant Group Limited dated June 30, 2005 | |
10.2* | Promissory Note dated June 30, 2005 payable to Blake International Limited | |
10.3* | Share Purchase Agreement Between Universal Metals Limited and Cathay Merchant Group Limited dated June 30, 2005 | |
10.4* | Promissory Note dated June 30, 2005 payable to Universal Metals Limited | |
* | Incorporated by reference from our current report filed on Form 8-K on June 30, 2005 |
Date: September 9, 2005