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Exhibit 99.3
OTTO MÄNNER HOLDING AG
Bahlingen a.K.
Reviewed Consolidated Financial Statements,
including a German GAAP to US GAAP reconciliation
note
for the six-month period ended
30 June 2012
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CONTENTS
REVIEW REPORT
LIST OF APPENDICES
CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2012 Appendix 1
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE PERIOD 1 JANUARY 2012 TO 30 JUNE 2012 Appendix 2
CONSOLIDATED CASH FLOW STATEMENT
AS AT 30 JUNE 2012 Appendix 3
STATEMENT OF SHAREHOLDERS’ EQUITY
FOR THE PERIOD 1 JANUARY 2012 TO 30 JUNE 2012 Appendix 4
NOTES ON THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS AT 30 JUNE 2012 Appendix 5
RECONCILIATION FROM GERMAN GAAP TO US GAAP Appendix 6
GENERAL ENGAGEMENT TERMS Appendix 7
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INDEPENDENT ACCOUNTANTS' REVIEW REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
OTTO MÄNNER HOLDING AG, BAHLINGEN a. K., GERMANY
We have reviewed the accompanying consolidated balance sheet of Otto Männer Holding AG, Bahlingen a. K., Germany as of June 30, 2012, and the related consolidated statement of profit and loss, stockholders’ equity, cash flows prepared under accounting principles generally accepted in Germany, including a reconciliation to accounting principles generally accepted in the United States of America for net income for the six-month period ended June 30, 2012 and stockholders’ equity as of June 30, 2012 (collectively, the “reconciliations”) that has been included as an appendix to the accompanying consolidated financial statements, in accordance with the Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to issue a report on these consolidated financial statements based on our review.
We conducted our interim review in accordance with the Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. These Standards require that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.
Based on our interim review, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements are not presented fairly, in all material respects in accordance with (i) accounting principles generally accepted in Germany and (ii) accounting principles generally accepted in the United States of America for the reconciliations.
The accompanying consolidated financial statements have been reissued with the reconciliations in adherence with SEC reporting requirements related to the anticipated sale of the Company’s subsidiaries to Barnes Group, Inc., a U.S. publicly-traded company
Freiburg, 28 October 2013
Bansbach Schübel Brösztl & Partner GmbH | ||
Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft | ||
Schell Wirtschaftsprüfer (German Public Auditor) | Eichin Wirtschaftsprüferin (German Public Auditor) |
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Appendix 1 | ||||||||||||
CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2012 | ||||||||||||
OF OTTO MÄNNER HOLDING AG, BAHLINGEN A. K. | ||||||||||||
A S S E T S | ||||||||||||
EUR | ||||||||||||
A. | FIXED ASSETS | |||||||||||
I. | Intangible Assets | |||||||||||
1. | Industrial property rights acquired against payment | |||||||||||
and similar rights and values as well as licences | ||||||||||||
to such rights and values | 686,211.62 | |||||||||||
2. | Advance payments | — | ||||||||||
686,211.62 | ||||||||||||
II. | Tangible Assets | |||||||||||
1. | Property, rights equivalent to real property | |||||||||||
and buildings including buildings on | ||||||||||||
third-party land | 25,742,493.78 | |||||||||||
2. | Plant and machinery | 7,004,504.50 | ||||||||||
3. | Other fixed assets and office equipment | 1,642,571.76 | ||||||||||
4. | Advance payments and assets under construction | 719,915.63 | ||||||||||
35,109,485.67 | ||||||||||||
35,795,697.29 | ||||||||||||
B. | CURRENT ASSETS | |||||||||||
I. | Inventories | |||||||||||
1. | Raw, auxiliary and operating materials | 1,951,259.40 | ||||||||||
2. | Work in progress | 4,618,687.21 | ||||||||||
3. | Finished goods and merchandise | 661,248.02 | ||||||||||
7,231,194.63 | ||||||||||||
II. | Receivables and other assets | |||||||||||
1. | Trade receivables | 13,187,463.08 | ||||||||||
2. | Other assets | 4,215,186.97 | ||||||||||
17,402,650.05 | ||||||||||||
III. | Cash in hand and at credit institutions | |||||||||||
and cheques | 41,155,132.58 | |||||||||||
65,788,977.26 | ||||||||||||
C. | PREPAID EXPENSES | 653,901.00 | ||||||||||
D. | SURPLUS FROM OFFSETTING | 9,146.57 | ||||||||||
102,247,722.12 |
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L I A B I L I T I E S | ||||||||||||
EUR | ||||||||||||
A. | EQUITY | |||||||||||
I. | Subscribed capital | 10,000,000.00 | ||||||||||
II. | Retained earnings | |||||||||||
1. | Legal reserve | 1,000,000.00 | ||||||||||
2. | Other retained earnings | 38,769,009.06 | ||||||||||
39,769,009.06 | ||||||||||||
III. | Consolidated net profit | 29,617,007.85 | ||||||||||
IV. | Currency translation difference | 3,916,361.22 | ||||||||||
83,302,378.13 | ||||||||||||
B. | PROVISIONS | |||||||||||
1. | Provisions for taxation | 1,564,511.27 | ||||||||||
2. | Other provisions | 4,766,918.71 | ||||||||||
6,331,429.98 | ||||||||||||
C. | LIABILITIES | |||||||||||
1. | Amounts owed to credit institutions | 3,773,037.07 | ||||||||||
2. | Advance payments received on orders | 6,242,672.35 | ||||||||||
3. | Trade payables | 2,205,575.28 | ||||||||||
4. | Other liabilities | 265,554.67 | ||||||||||
thereof from taxes: | ||||||||||||
EUR 232.831,56 | 12,486,839.37 | |||||||||||
D. | DEFERRED TAX LIABILITIES | 127,074.64 | ||||||||||
102,247,722.12 |
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Appendix 2 | |||||||
CONSOLIDATED PROFIT AND LOSS ACCOUNT | |||||||
FOR THE PERIOD FROM 1 JANUARY 2012 TO 30 JUNE 2012 | |||||||
OF OTTO MÄNNER HOLDING AG, BAHLINGEN A. K. | |||||||
EUR | |||||||
1. | Sales | 39,713,907.48 | |||||
2. | Change in stock | ||||||
of finished goods and work in progress | (313,724.02 | ) | |||||
3. | Other operating income | 983,003.05 | |||||
of which from currency translation: | |||||||
EUR 431.443,12 | |||||||
40,383,186.51 | |||||||
4. | Material costs | ||||||
a) | Costs for raw, auxiliary and | ||||||
operating materials and for purchased goods | 7,786,533.86 | ||||||
b) | Costs for purchased services | 1,921,399.63 | |||||
5. | Personnel costs | ||||||
a) | Wages and salaries | 11,482,921.84 | |||||
b) | Social insurance contributions and contributions for | ||||||
old-age pensions and for support | 2,033,822.00 | ||||||
of which for pension provision: | |||||||
EUR 135.449,71 | |||||||
6. | Depreciation and amortization | 1,317,943.39 | |||||
7. | Other operating expenses | 6,684,102.61 | |||||
of which from currency translation: | |||||||
EUR 422.819,17 | |||||||
(31,226,723.33 | ) | ||||||
8. | Other interest and similar income | 142,301.07 | |||||
9. | Interest and similar expenses | 47,158.19 | |||||
95,142.88 | |||||||
10. | Profit or loss from normal business activity | 9,251,606.06 | |||||
11. | Tax on income and profit | 3,050,940.94 | |||||
12. | Other taxes | 148,643.02 | |||||
(3,199,583.96 | ) | ||||||
13. | Consolidated balance sheet profit | 6,052,022.10 | |||||
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14. | Profit carried forward from previous year | 29,168,447.29 | |||||
15. | Allocations to other revenue reserves | (5,603,461.54 | ) | ||||
23,564,985.75 | |||||||
16. | Consolidated balance sheet profit | 29,617,007.85 |
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Appendix 3 | ||||||
CONSOLIDATED CASH FLOW STATEMENT | ||||||
AS AT 30 JUNE 2012 | ||||||
OF OTTO MÄNNER HOLDING AG, BAHLINGEN A. K. | ||||||
The following cash flow statement divides the cash flows of the financial year into cash flows from operating, investing and financing activities whereby the total flow of funds from these three areas corresponds to the change in cash and cash equivalents which is defined as the difference between liquid funds and bank liabilities repayable at any time. | ||||||
The presentation of the cash flow statement is in accordance with the recommendations of the German Standardisiation Board according to DRS 2/cash flow statement. | ||||||
1 Jan to | ||||||
June 30, 2012 | ||||||
KEUR | ||||||
Consolidated result for the year | 6,052 | |||||
Write-downs on fixed assets - property, plant and | ||||||
equipment | 1,318 | |||||
Cash flow for the year according to DVFA/SG | 7,370 | |||||
Profit from the disposal of fixed assets | (125 | ) | ||||
Increase/decrease in short-term provisions | 1,160 | |||||
Increase in inventories and trade receivables | ||||||
as well as other assets which are not attributable to | ||||||
investing and financing activities | (534 | ) | ||||
Increase in trade payables, | ||||||
as well as other liabilities | ||||||
which are not attributable to investing and financing activities | 2,809 | |||||
Cash Flow from operating activities (1) | 10,680 | |||||
1 Jan to | ||||||
June 30, 2012 | ||||||
KEUR | ||||||
Proceeds from disposals of tangible fixed assets - | ||||||
property, plant | 283 | |||||
Payments for investments in | ||||||
plant, property and equipment | (2,062 | ) | ||||
Payments for investments in intangible fixed assets | ||||||
(123 | ) | |||||
Cash Flow from investing activities (2) | (1,902 | ) |
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Payments for the redemption of loans | ||||||
and credit facilities | (437 | ) | ||||
Cash Flow from financing activities (3) | (437 | ) | ||||
June 30, 2012 | ||||||
KEUR | ||||||
Net change in cash and | ||||||
cash equivalents (1) + (2) + (3) | 8,341 | |||||
Exchange rate movements and valuation changes | ||||||
in cash and cash receivables | 165 | |||||
Cash and cash receivables at the beginning of the period | 32,649 | |||||
Cash and cash receivables at the end of the period | 41,155 | |||||
Composition of cash and cash receivables | ||||||
June 30, 2012 | ||||||
KEUR | ||||||
Liquid funds | 41,155 | |||||
Cash and cash receivables at the end of the period | 41,155 |
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Appendix 4 | ||||||||||||||
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY | ||||||||||||||
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2012 | ||||||||||||||
OF OTTO MÄNNER HOLDING AG, BAHLINGEN A.K. | ||||||||||||||
Parent company | Group equity | |||||||||||||
Subscribed capital | Consolidated retained earnings | Adjusted item for currency conversion | ||||||||||||
EUR | EUR | EUR | EUR | |||||||||||
Status as at 01.01.2012 | 10,000,000.00 | 63,333,994.81 | 3,526,735.86 | 76,860,730.67 | ||||||||||
Other changes | — | — | 389,625.36 | 389,625.36 | ||||||||||
Consolidated net income | — | 6,052,022.10 | — | 6,052,022.10 | ||||||||||
Status as at 30.06.2012 | 10,000,000.00 | 69,386,016.91 | 3,916,361.22 | 83,302,378.13 | ||||||||||
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Appendix 5
Otto Männer Holding AG, Bahlingen a.K.
Notes to the consolidated interim financial statements
as at 30 June 2012
1. General remarks
These half-yearly consolidated financial statements were prepared in accordance with Sec. 290 et seq. HGB [“Handelsgesetzbuch”: German Commercial Code]. The half-yearly consolidated financial statements are presented in EUR.
The income statement has been prepared using the nature of expense method.
The closing date of all of the entities included in the half-yearly consolidated financial statements is 30 June 2012. Additionally, a reconciling note from German-GAAP to US-GAAP is added.
2. Basis of consolidation
Apart from Otto Männer Holding AG, the "parent company", the half-yearly consolidated financial statements include three entities with registered offices in Germany and four entities with registered offices abroad, all of which are consolidated in accordance with the full consolidation principles.
The following companies are consolidated in accordance with equity share.
Name | Registered office | Share in equity | |
Otto Männer Holding AG | Bahlingen a.K. | 100 | % |
Otto Männer GmbH | Bahlingen a.K. | 100 | % |
Otto Männer Innovation GmbH | Bahlingen a.K. | 100 | % |
Otto Männer Immobilien GmbH | Bahlingen a.K. | ||
Shareholder: Otto Männer Innovation GmbH | 100 | % | |
Manner USA, Inc. | Norcross, GA (USA) | 100 | % |
Otto Männer Präzisionsformenbau AG | Au (Switzerland) | 100 | % |
Manner Hong Kong Ltd. | Hong Kong | 100 | % |
männer Japan Ltd. | Mito, Japan | 100 | % |
3. Consolidation principles, consolidation methods
Equity consolidation for all subsidiaries is performed using the book value method by offsetting the carrying amounts of the shares against the proportionate equity of the subsidiary as of the corresponding date of incorporation. All differences from equity consolidation stem from exchange differences and are reported in the item “Equity differences from currency translation”.
Intercompany receivables and liabilities as well as expenses and income are eliminated. Any offsetting differences stem from exchange differences.
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Any intercompany profits from intercompany transactions were eliminated.
Deferred taxes originating from consolidation entries affecting income were recognized based on a tax rate of 27%.
4. Accounting and valuation principles
The assets and liabilities in the half-yearly consolidated financial statements are reported pursuant to the provisions of Sec. 290 et seq. HGB. The accounting and valuation methods are unchanged from the prior year.
The valuation methods applied in the parent company’s interims financial statements are decisive for the valuation of the assets and liabilities taken into the consolidated financial statements. If the accounting principles of the companies included in the consolidated financial statements differ substantially from the accounting and valuation principles of the parent company, the parent company performs an accounting and valuation correction by means of the transitional stage of a German commercial code balance sheet II [“Handelsbilanz II”].
Fixed assets are valued at acquisition or production cost less depreciation and amortization. Amortization of intangible assets is based on useful lives of three to five years, depreciation of buildings is based on useful lives ranging between 25 and 50 years and other moveable assets are depreciated over useful lives from 2 to 15 years.
If ownership over leased movable assets is assumed at the end of the lease term, any residual value capitalized is depreciated over a period of three years using the straight-line method.
Raw materials, consumables and supplies as well as merchandise are carried at the lower of acquisition cost or market. Adequate write-downs are recognized for slow-moving goods.
Finished goods and work in process are valued at production cost on the basis of individual product costings. In addition to the direct cost of materials and direct labor, production costs include production and material overhead costs. General and administrative expenses were capitalized.
In all cases, valuation is based on net realizable value, i.e., the estimated cost to complete are deducted from the expected sales price and additional allowance is set up for items for which estimated costs to complete the product exceed the replacement cost. Adequate allowances provide for all identifiable inventory valuation risks resulting from slow-moving stock, reduced salability and lower replacement costs.
Receivables and other assets are stated at their nominal value. Appropriate specific bad debt allowances were recognized to account for default risks related to trade payables. The general credit risk is adequately considered with the general bad debt allowance.
Prepaid expenses comprise payments made prior to the balance sheet date that relate to expenses that will be incurred after the balance sheet date.
Provisions for pensions are valued according to actuarial principles using an interest rate of 5.10%. Expected salary increases were taken into account at 2%. The calculation was based on the modified “Teilwertverfahren” (a method comparable to the entry age normal method) using the mortality tables of Prof. Dr. Klaus Heubeck.
The assets, which serve exclusively to fulfill the pension obligations and which are protected against claims asserted by all other creditors (employer’s pension liability insurance), were offset at their fair value against the pension provisions.
Tax provisions and other provisions were recognized in the amount of expected utilization and account for all identifiable risks, uncertain liabilities, potential losses from pending transactions and warranties without legal obligation. They are valued at the settlement amount. Necessary cost increases are taken into account. Provisions with a residual term of more than one year are discounted at the market interest rate of the last seven fiscal years for their respective residual term.
Liabilities are recorded at the settlement amount. For liabilities whose settlement amount exceeds the amount paid out, the debt discount is reported under prepaid expenses.
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Receivables, bank balances and liabilities denominated in foreign currency due within one year are translated at the mean spot rate on the balance sheet date. If the residual term is less than one year, they are valued at the historical rate or the lower (foreign currency receivables) or higher (foreign currency liabilities) closing rate.
Deferred taxes were calculated on all temporary differences between the tax base of the assets and liabilities and their book values in the consolidated financial statements. There were no tax loss carryforwards and tax credits as of 30 June 2012. Deferred taxes were valued using company-specific tax rates and tax legislation enacted or substantively enacted as of the balance sheet date and expected to apply when the timing differences reverse. The tax rates ranged between 16.5% and 39.2%. Deferred taxes are reported on a net basis. The net assets resulting in the separate financial statements of consolidated entities are not capitalized.
5. Currency translation
All assets and liabilities in the financial statements of the foreign entities outside the eurozone included in the consolidated financial statements are translated to the reporting currency at the official mean rate (between the buying and selling rates) as of the balance sheet date. The items of the income statement are translated at the average exchange rates in the first half of the year and equity at historical rates. Translation differences in the income statement are reported directly in equity in the item “Equity differences from currency translation” below revenue reserves.
Differences from the translation of opening balances at closing rates as well as deviations from the translation of movements during the current year at mean rates are reported in a separate column of the consolidated statement of changes in fixed assets.
6. Notes to the consolidated balance sheet
Fixed assets
The development of individual fixed asset items in the first half of 2012 is shown in the “Consolidated statement of changes in fixed assets” attached to these consolidated financial statements.
Receivables and other assets
Receivables with a remaining term of more than one year amounted to EUR 9k as of the balance sheet date. We refer to our comments on pension provisions.
Deferred taxes
Deferred tax assets of EUR 607k were recognized on temporary differences affecting income between the amounts in the tax accounts and the book values in the consolidated balance sheet. Of this amount, EUR 338k is attributable to differences between the amounts in the tax accounts and the book values in the statutory balance sheet prepared in accordance with uniform group principles (HB II - reporting package), which for the most part stem from temporary differences with respect to inventories, pension provisions and other provisions. An amount of EUR 269k is attributable to deferred taxes on consolidation entries affecting income.
In addition, deferred tax liabilities of EUR 526k were determined on differences between the amounts in the tax accounts and the book values in the reporting package. These mainly result from temporary differences in property, plant and equipment and inventories as a result of differences in book values and methods for recognizing amortization, depreciation and write-downs.
Exercising an accounting option, net assets in the separate financial statements amounting to EUR 237k were not capitalized. Net liabilities amounting to EUR 396k were recognized. Net liabilities are offset against the deferred taxes from consolidation entries.
Equity
The issued capital of Otto Männer Holding AG, Bahlingen a.K., is valued at EUR 10,000,000, divided into 10,000,000 ordinary shares with a nominal value of EUR 1.00 per share. The ordinary shares are registered shares.
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With regard to the development of the Group’s equity, we refer to the consolidated statement of changes in equity as of 30 June 2012 presented in Appendix 4.
Offsetting assets against liabilities in accordance with § 246 Subs. 2 of the German Commercial Code [HGB]
Assets and liabilities from pension obligations were set off in the balance sheet in accordance with § 246 Subs. 2 of the German Commercial Code [HGB].
Pension commitments are secured by employer’s liability insurance. The claims from the employer’s liability insurance serve exclusively to fulfill the pension commitments and are protected against claims asserted by other creditors. They were offset against the pension provisions. The fair value of the employer’s liability insurance, which was calculated using actuarial methods, came to EUR 1,292k as of the balance sheet date; the settlement amount of the pension commitment stands at EUR 1,283k. The difference of EUR 9k is included in other assets. The acquisition cost of the employer’s liability insurance claims amounted to EUR 1,178k.
Other provisions
Other provisions mainly concern personnel, warranty risks and customer bonuses.
Liabilities
Due in | Due in | Due in | ||||||
Total | less than one year | two to five years | more than five years | |||||
EUR k | EUR k | EUR k | EUR k | |||||
Liabilities to banks | 3,773 | 884 | 2,889 | — | ||||
Prepayments received on account of orders | 6,242 | 6,242 | — | — | ||||
Trade payables | 2,206 | 2,206 | — | — | ||||
Other liabilities | 266 | 266 | — | — |
Trade payables pertaining to the delivery of raw materials, consumables and supplies are subject to the customary retention of title.
Liabilities to banks are secured by a land charge on the Company’s grounds (EUR 3,356k) and mortgages (EUR 414k).
Guarantees (performance guarantees) from Commerzbank AG of EUR 1,219k were drawn for prepayments received. No collateral had to be pledged to obtain the guarantee facility.
7. Notes to the consolidated income statement
Revenue
Consolidated revenue is detailed as follows:
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30 Jun 2012 | ||
EUR k | ||
Germany | 13,014 | |
Other EU countries | 14,558 | |
Rest of world | 12,142 | |
39,714 |
Other operating income and expenses
Other operating income contains income relating to other periods of EUR 695k. This mainly stems from the reversal of provisions and specific bad debt allowances of EUR 230k, from exchange rate gains EUR 431k and from the disposal of items of fixed assets EUR 134k.
Other operating expenses include expenses relating to other periods of EUR 432k, mainly attributable to exchange rate losses.
Employees
30 Jun 2012 | |
Management board | 1 |
Wage earners | 208 |
Salaried employees | 127 |
Trainees | 31 |
367 |
8. Additional notes to the consolidated cash flow statement
Cash and cash equivalents solely contain the cash and bank balances reported in the balance sheet.
9. Other notes
Other financial obligations
Other financial obligations contain long term rental obligations of EUR 3,655k and lease obligations of EUR 10,277k for a total EUR 13,932k.
10. Audit fees
The total fees charged by the group auditor pursuant to Sec. 314 (1) No. 9 HGB are EUR 41k for other services for the first half year 2012.
11. Management of Otto Männer Holding AG and disclosure of total remuneration
Management board
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Mr. Hans-Peter Männer, Dipl.-Ing. (FH) was appointed to the management board in the reporting year. He has sole signing authority without restriction to represent the Company in legal transactions as a self-contracting agent or as an agent of a third party. In accordance with Sec. 286 (4) HGB, the Company has elected not to disclose total management board remuneration.
Supervisory board
The following persons were members of the supervisory board in the reporting year:
• | Otto Männer, business man, Bahlingen a.K., chairman |
•Karl-Heinz Niggemann, lawyer, Rottweil, deputy chairman
•Dr. Bertram Layer, public auditor, tax advisor, Stuttgart, deputy chairman
The remuneration of the supervisory board amounted to EUR 12,000 in the reporting year.
Bahlingen, 23 October 2013
……………………………………………
Hans-Peter Männer
Management board
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DEVELOPMENT OF FIXED ASSETS | ||||||||||||||||||||||||||||||||||||||||
OF OTTO MÄNNER HOLDING AG, BAHLINEN A.K. | ||||||||||||||||||||||||||||||||||||||||
Acquisition/production costs | Book values | |||||||||||||||||||||||||||||||||||||||
Currency | Currency | |||||||||||||||||||||||||||||||||||||||
1/1/2012 | differences | Additions | Transfers | Disposals | 30/6/2012 | 1/1/2012 | differences | Additions | Disposals | 30/6/2012 | 30/6/2012 | |||||||||||||||||||||||||||||
EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | |||||||||||||||||||||||||||||
I. | Intangible assets | |||||||||||||||||||||||||||||||||||||||
1. | Licenses, industrial property rights acquired against | |||||||||||||||||||||||||||||||||||||||
payment and similar rights and values as well as | ||||||||||||||||||||||||||||||||||||||||
licenses to such rights and values | 3,748,866 | 2,830 | 122,101 | 183,410 | 81 | 4,057,126 | 3,258,564 | 1,759 | 110,673 | 81 | 3,370,914 | 686,212 | ||||||||||||||||||||||||||||
2. | Advance payments | 183,410 | — | — | (183,410 | ) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
3,932,276 | 2,830 | 122,101 | — | 81 | 4,057,126 | 3,258,564 | 1,759 | 110,673 | 81 | 3,370,914 | 686,212 | |||||||||||||||||||||||||||||
II. | Tangible assets | |||||||||||||||||||||||||||||||||||||||
1. | Property, rights equivalent to real property | |||||||||||||||||||||||||||||||||||||||
and buildings including buildings | ||||||||||||||||||||||||||||||||||||||||
on third-party land | 33,052,761 | 176,018 | — | — | — | 33,228,779 | 7,017,674 | 33,380 | 435,231 | — | 7,486,285 | 25,742,494 | ||||||||||||||||||||||||||||
2. | Plant and machinery | 32,660,135 | 177,269 | 903,750 | 605,550 | 650,200 | 33,696,503 | 26,616,939 | 136,394 | 581,521 | 642,855 | 26,691,999 | 7,004,505 | |||||||||||||||||||||||||||
3. | Other fixed assets | |||||||||||||||||||||||||||||||||||||||
and office equipment | 6,712,119 | 19,854 | 291,459 | 10,000 | 65,608 | 6,967,825 | 5,184,346 | 14,665 | 190,519 | 64,277 | 5,325,253 | 1,642,572 | ||||||||||||||||||||||||||||
4. | Advance payments and assets under construction | 615,550 | 2,326 | 866,703 | (615,550 | ) | 149,113 | 719,916 | — | — | — | — | — | 719,916 | ||||||||||||||||||||||||||
73,040,565 | 375,467 | 2,061,911 | — | 864,920 | 74,613,022 | 38,818,960 | 184,439 | 1,207,271 | 707,133 | 39,503,537 | 35,109,486 | |||||||||||||||||||||||||||||
76,972,842 | 378,296 | 2,184,012 | — | 865,002 | 78,670,148 | 42,077,523 | 186,198 | 1,317,943 | 707,214 | 42,874,451 | 35,795,697 |
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Appendix 6
Reconciliation from German GAAP to US GAAP (30/06/12)
The consolidated statements of Otto Männer Holding AG are prepared in accordance with German GAAP. The following table is a reconciliation of differences relating to the Profit and Loss account and Shareholders’ Equity reported according to German GAAP and US GAAP.
Reconciliation of profit or loss statement (P&L) for the year and reconciliation of shareholders’ equity (equity)
All amounts in EUR k | Notes | 30/06/2012 | ||||||||
P&L | Equity | |||||||||
Results and shareholders’ equity under German GAAP: Profit for the year Shareholders’ equity | 6,052 | 83,302 | ||||||||
US GAAP reporting adjustments: | ||||||||||
Opening adjustment | (a) | (2,309 | ) | |||||||
Leasing | (b) | (69 | ) | (69 | ) | |||||
Allowance for doubtful accounts | (c) | 8 | 8 | |||||||
Pensions 1 | (d) | (252 | ) | (252 | ) | |||||
Revenue recognition Inventory allowance | (e) (f) | 1,842 792 | 1,842 792 | |||||||
Income taxes | (g) | (630 | ) | (630 | ) | |||||
Results under US GAAP | 7,743 | 82,684 |
Explanation of notes:
(a) | Opening adjustment to shareholders’ equity |
The line item opening adjustments represents the accumulative effect on retained earnings as of 1 January 2012. In order to properly present the shareholders’ equity reported under US GAAP adjustments to opening retained earnings are required. The adjustments made are identical to those that are represented below.
(b) | Leasing - Capital leases |
Otto Männer Holding AG entered into several lease agreements for machinery and equipment which according to German GAAP were classified as operating leases. For US GAAP purposes however, some of these agreements are to be classified as capital leases. The net income effect (yearly expense for operating lease vs. interest expense and depreciation) are represented in the table above.
Allowance for doubtful accounts
According to German GAAP a lump sum general allowance on the basis of 1% is allowed to be accounted for. For US GAAP purposes however, the allowance for doubtful accounts is based on historical experience. Therefore, the lump sum allowance has been reversed in the table above.
1 US GAAP adjustments include the German plan which is not subject to the acquisition by BGI.
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(c) | Pensions - Defined benefit plans |
The pension related reserves under German GAAP need to be restated in order to comply with ASC 715-30. According to German GAAP, the Otto Männer group entered into one defined benefit plan in Switzerland while the remaining three German plans are classified as defined contribution plans. However, two of the defined contribution plans are to be classified as defined benefit plans for US GAAP purposes. The impact on equity and the income statement reflects the different treatment of the plans under German GAAP. For defined benefit plans the values are based on actuary reports.
(d) | Revenue recognition - Bill and hold transactions |
The company enters into bill and hold transactions for specific high precision molds. According to German GAAP revenue can already be recognized as soon as the contract is signed. For US GAAP purposes however, revenue recognition criteria are not yet fulfilled. Revenue is recognized at a later point of time and therefore the adjustment represents a timing difference in recognizing the revenue.
(e) | Inventory provision |
Under German GAAP an additional provision was set up for items for which costs estimated to complete the product exceed the replacement cost. Such provision is not allowed under US GAAP since the costs not yet incurred are not allowed to be recognized considering the matching principle.
(f) | Income taxes -Impact on US GAAP adjustments |
This adjustment reflects the impact on the Company’s provision for income taxes which the US GAAP adjustments described above have on the income statement and on Shareholders’ equity.
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Appendix 7
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