NATURALLY INNOVATIVE HTI HIgH TEcH INdUsTRIEs Ag · KEY FIgUREs OF THE HTI gROUP AccORdINg TO IFRs The consolidated financial report of HTI High Tech Industries AG as of December

ANNUAL REPORT 2011

NATURALLY INNOVATIVEHTI HIgH TEcH INdUsTRIEs Ag

KEY FIgUREs OF THE HTI gROUP AccORdINg TO IFRsThe consolidated financial report of HTI High Tech Industries AG as of December 31, 2011 was established according to the International Financial Reporting Standards (IFRS) – as applicable in the European Union.

This English language annual report 2011 is a convenience translation of the prevailing original German language annual report 2011.This report has been prepared and figures checked with the greatest possible care. Nevertheless, it can not be excluded that rounding, typographical and printing errors may occur, and that the aggregation of rounded amounts and percentages may result in rounding differences. This report and the forward-looking statements contained in it were prepared on the basis of the data and information available at the time of preparation. However, we must point out that a wide variety of different factors could cause actual circumstances to deviate from the forward-looking statements contained in this report.

Earnings

Total revenues

Lightweight Construction

Engineering

Energy Technology

EBITDA *

EBIT **

EBT ***

Net result after tax

EBITDA-Margin ****

EBIT-Margin ****

EBT-Margin ****

Net result-margin ****

Financial situation

Total assets

Equity ratio

Gearing factor

Investments in tangible and intangible assets

Depreciation, amortization and write-ups

Cash flow from earnings

Cash flow from operating activities

Share

Shares issued

Weighted average number of shares

Share price per ultimo

Highest price

Lowest price

Market capitalization per ultimo

Earnings per share (undiluted)

Employees *****

Average number of employees

Number of employees per ultimo

Revenue per employee

Gross income per employee

2011

206,991

114,651

46,937

45,566

14,699

4,066

-2,314

-2,224

6.8

1.9

-1.1

-1.0

261,929

16

3.6

21,167

10,633

5,216

-1,600

45,583,944

33,730,619

0.98

1.76

0.84

44,855

-0.07

1,526

1,504

136

141

2010

193,006

97,560

52,432

43,045

13,489

2,907

-3,979

-3,930

6.7

1.4

-2.0

-2.0

241,907

16

3.4

14,366

10,582

6,041

-1,918

29,644,954

29,644,954

1.96

1.96

0.66

58,104

-0.15

1,501

1,512

129

134

2009

178,463

95,942

36,074

45,729

-10,453

-24,733

-33,148

-12,706

-6.3

-15.0

-20.0

-7.7

233,819

8

7.2

11,842

15,378

-20,981

-6,696

29,644,954

16,586,975

0.68

1.25

0.45

14,039

-0.79

1,582

1,485

113

104

* Operative earnings before interest, tax, depreciation & amortization; until 2010: Operative earnings before non-recurring items, interest, tax, depreciation & amortization ** Operative earnings before interest and tax; until 2010: Operative earnings before non-recurring items, interest and tax *** Earnings before tax; until 2010: Earnings before non-recurring items and tax**** in relation to total gross income***** including hired staff

TEUR

TEUR

TEUR

TEUR

TEUR

TEUR

TEUR

TEUR

%

%

%

%

TEUR

%

TEUR

TEUR

TEUR

TEUR

Number

Number

EUR

EUR

EUR

TEUR

EUR

Number

Number

TEUR

TEUR

HTI HIgH TEcH INdUsTRIEs Ag

INNovATIoNS CREATE oUR FUTURE

FULL OF IdEAs, sUsTAINAbLE ANd TARgET ORIENTEd, LIKE NATURE, HTI FOcUsEs ON

TEcHNOLOgIcAL PROgREss, OF wHIcH EcONOmY, HUmAN bEINg ANd ENVIRONmENT ALL bENEFIT.

HEALTHy GRoWTH NEEDS pRoGRESS THAT IS WHy HTI FoCUSES oN INNovATIoNS THAT SUSTAINABLy SUppoRT ECoNoMy, HUMAN BEING AND NATURE.

Nature sets the examples. The circle of life determines the everlasting search and new creation of the natural balance. Intelligence and ingenuity but most of all the gift of being able to adjust and to develop new, even more beneficial strategies to survive safeguard the further existence of their own species for a long time ahead.

what sounds like a logical principle, which seems to work effortlessly, is also found in economy and especially in technology. Here also growth and economic success can only grow on fertile soil, which is nurtured and cultivated by clever, creative spirits, striving for innovation – permanently considering the balance of economic success and the fulfillment of ecological and ergonomic principles. way and target of HTI are hence profit-bearing new developments that positively support the human being, his health and his wellbeing whilst at the same time consider a worth-living nature and environment.

consequently, HTI has set itself a long-term and sustainable growth target. That is why we have put the basis of our success in the center of attention in this annual report: Innovation. In the focus we present to you the ground-breaking products that were brought to market maturity by our developers, which have once again provided HTI with a substantial competitive advantage. Read more about these innovations on the following pages.

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1 New tap hole device HS 581 – high performance, safe, reliable, maintenance-friendly and durable

2 D poWER – a new generation of diesel driven ground power supplies for aircrafts

3 S poWER – an absolute innovation in the field of 400Hz ground power supply of aircrafts

4 The energy- and water saving oMNIA vacuum aggregate for extrusion equipment

5 The innovative drill hammer BH9 – the allround genious of pneumatic hammers

1 2 3

4 5

NATURE DoES NoT GIvE ANyTHING AWAyIN THIS SpIRIT, oUR DEvELopERS CoNSTANTLy WoRk oN EFFICIENT INNovATIoNS.

Standing in the air the hummingbird supplies itself with energy and proves real high flyer qualities: Small, light and quiet it only takes what it needs at the moment. An impressive example of nature, of which HTI has taken some ideas for their new ground power models, introduced to the market in 2011.

very clean, almost inaudible and highly economic our compact S-poWER supplies parking aircrafts with power and combines two units in one – a masterpiece in the field of 400 Hz ground power supply and a must-have for each airport of the future. For its well-thought-out and innovative design the almost emission free S-poWER has now also received the highly popular red dot award – being chosen of 4,515 top product entries from 1,800 producers coming from 58 countries. Also the new diesel driven D-poWER works more efficient and higher in performance than ever. It supplies further away parked aircrafts with power and can be very easily and practically handled from afar.

Together – that was the main verdict of the many interested customers at the trend-setting trade show for airport equipment, held last autumn in Munich – they will start a new era in ground power supply of parking aircrafts.

D-poWER (left)

S-poWER (right)

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THE HUMMINGBIRD flaps its wings up to 80 times per second. Therefore the lightweight needs lots of high in energy flower nectar. A specialty of this rich in species mini-birds are their different beaks that each species developed espe-cially for their preferred type of flower.

Whether it searches for worms or insects, carpenting its new home or wanting to impress its lover: the woodpecker has only one job – hammering. Up to 12,000 times per day this strong bird hammers its beak against wood and still does not get any headaches – because nature has adjusted it to utmost ergonomic perfection.

With the development of pneumatic hammers it is wise for the developers to take this into consideration. The target has to be there, where highest performance meets minimal strain of human workforce. This was fully achieved with the pneumatic hammer, introduced to the market in 2011, being a milestone in pneumatic hammer development. The ‘muscle man’ BH9 is especially light and flexible, low in vibration and combines even three predecessor models in one: The unique feature of this all-round genius is that depending on the intended application, the low in maintenance models of the BH9 are adjusted towards the demands of the user. Therefore the various models offer optimal protection of noise, vibration and environmental cir-cumstances.

NATURE pRovIDES IN oRDER To kEEp A HEALTHy BALANCEINSpIRED By THIS, oUR DEvELopERS ALSo STRIvE FoR INTELLIGENT SoLUTIoNS FoR A WoRTH-LIvING FUTURE.

The innovative drill hammer BH9

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THE WOODPECKER hammers its beak up to 20 times against wood at a speed of 25 km/h. In order to absorb this enormous strain, which is a hundred times higher than the one of astronauts landing from their journey into space, the woodpecker has impressively strong skull muscles that work like shock absorbers.

Amongst its own species, the impressive hoopoe with its striking and elegant feather-bonnet immediately gets everybody’s attention. Commonly known and widespread in Central Europe, this bright-feathered, handsome bird is yet hardly to be seen – opti-mal camouflage is everything!

With exact this smoothness also the new stand-alone vacuum aggregate of the oMNIA line, introduced in 2011, virtually works in secret. Lean in design it comfortably fits between two calibration tables. More than that, the new system was designed to match not only the oMNIA extrusion line, but all predecessor models and –tools of other producers.

With these advantages the new system gained a lot of new fans of our well-known customers – also because of the use of more pumps, allowing an es-pecially high grade of production safety and savings in energy and water of up to 80%. Consequently this vacuum aggregate in regard to sustainability has gone one major step further than the competition.

ADApTABILITy AND NoT LEAST ELEGANCE SAFEGUARD SUCCESS AND FURTHER ExISTENCE IN NATURE AND TECHNoLoGy.

oMNIA vacuum aggregate

for extrusion equipment

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THE HOOPOE can be recognized by its butterfly-like flight style and its zebra-colored wings. In the wild, this throttle-sized economic bird, that lives completely without water, can hardly be caught by the eye.

THE FUTURE oF NATURE AND TECHNoLoGy IS pRoGRESS LIkE NATURE, pRoSpERING THRoUGH EvoLUTIoN, TECHNoLoGy pRoSpERS THRoUGH EvERLASTING BIRTH oF INNovATIoNS.

As fluffy and fragile as the new chick may seem, as it pecks its first seeds with its yellow fluffy feathers and thin legs, it has already been through a truly strong act of force. Target-aimed the chick has drilled open the eggshell from the inside and by kicking the shell with its skinny legs has freed itself from its nursery.

Spot-on, smooth and yet forceful a tap hole device is expected to work, in order to extract the boiling hot pig iron quickly and safely from the tap hole. The latest generation of our tap hole

device, which we have introduced to the market last year, combines a variety of expressed demands in regard to tech-

nology, handling and maintenance in this unique machine: Drill- as well as forward- and backward stroke function allow

quick, smooth and safe opening of the tap hole. A protection cover allows doors to be opened individually for the first time, meaning that maintenance works can be executed directly at the mounted equipment and not least wear parts with optimized durability make sure, that this safe, economic and ergonomic

innovation made by HTI has already convinced numerous custo-mers.

Tap hole device

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If THE CHICK feels too tight in its egg, it sort-of drills open the eggshell with the so-called egg-tooth. At the same time it pushes its fragile legs in the opposite direction and in doing so much more emphasizes its headwork.

OUR cOmPANY

14 products

16 Strategy

17 Locations

18 Letter of the Management Board

gROUP mANAgEmENT REPORT

38 Market Environment

41 Development of the HTI Group

48 Risk Management

54 Research, Development and Innovation

58 Workforce

60 Corporate Social Responsibility

62 HTI Shares, position of Shareholders and Changes in the Articles of Association

65 Events after the Reporting period

66 outlook

cORPORATE gOVERNANcE REPORT

22 Corporate Governance Code

26 Management Board

28 Supervisory Board

31 Remuneration Report

33 Directors‘ Dealings

33 External Evaluation

34 Report of the Supervisory Board

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cONTENTs

NOTEs TO THE cONsOLIdATEd FINANcIAL sTATEmENTs

76 I. Business Description and Group Structure

79 II. Scope and principles of Consolidation

81 III. Accounting and valuation principles

90 Iv. Notes to the Consolidated Income Statement

94 v. Notes to the Consolidated Statement of Financial position

107 vI. Risks, Capital Management and Financial Instruments

cONsOLIdATEd sTATEmENTs OF FINANcIAL POsITION

70 Income Statement

71 Statement of Financial position

72 Statement of Cash Flow

73 Statement of Changes in Equity

115 vII. Consolidated Cash Flow Statement

115 vIII. Segment Report

115 Ix. other Information

122 Appendix to the Notes to the Consolidated Financial Statements

122 Appendix 1: Asset Analysis

126 Appendix 2: Segment Report

127 Appendix 3: Group Investments

129 Auditor’s Report

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ovERvIEW ABoUT oUR pRoDUCTSwE dEVELOP, PROdUcE ANd dIsTRIbUTE dEmANd- ANd sUsTAINAbLE PROdUcT sOLUTIONs, sAFEgUARdINg mObILITY As wELL As FUNcTIONINg INFRAsTRUcTURE. HERE, wE cONcENTRATE ON THE sUsTAINAbLE sEgmENTs LIgHTwEIgHT cONsTRUcTION, ENgINEERINg ANd ENERgY TEcHNOLOgY.

mObILITY— Lightweight components made of plastics and aluminum as well as composite parts for vehicles, commercial trucks and aircrafts

— Alternators for ships and diesel electric locomotives

— ground Power Units (gPUs), supplying parking aircrafts with power

INFRAsTRUcTURE— Extrusion equipment and –tools for the construction industry

— Pneumatic hammers

— special machines for the pig iron- and steel industry

ENERgY— Alternators for hydro power plants

— Emergency power aggregates

— UPs equipment (uninterruptable power supply equipment)

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INFRAsTRUcTURE

mObILITY

1 Rear axle gear body for BMW

2 Aircraft window for Airbus

3 Sealing flange for Audi (composite part

made of plastics and aluminum)

4 Alternators for ships and diesel

electric locomotives

5 Ground power supply for aircrafts:

D poWER and S poWER

6 Extrusion equipment oMNIA (for the

production of window profiles, rain gutters,

cable ducts, etc.)

7 Extrusion tool for window profiles

8 pneumatic hammers

9 Special machines for the pig iron- and

steel industry (tap hole equipment, TBD)

10 Alternators for hydro power plants

11 Mobile emergency power aggregate

12 UpS equipment

ENERgY

OUR PROdUcTs

1

5 5

6

10

2

4

7 9

11

3

4

9

12

8

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The ultimate strategic objective of HTI is to be a leading supplier of high tech products, contributing towards the improvement of mobility, infrastructure and energy supply. We focus on the divisions Lightweight Construction, Engineering and Energy Technology.

HTI follows a long-term growth strategy, which is understood by us as value- and future oriented growth, respecting social and local circumstances, based on technological progress. Economic, ecologic and ergonomic aspects shall be harmonized and well balanced – this will remain the objective which HTI is continuously working towards.

All strategic actions aim for profitable growth. Hence our strategy is based on three ultima-te pillars:

Growth through sustainable productsForesighted thinking and consideration of all future relevant parameters form one of the strategic pillars of our company. Sustainability for us is an integrative part of the business itself and hence a substantial contribution to HTI’s economic success. In the light of the climate discussion and scarcer becoming fossil energy sources our main objective is the development of ecological, economical and ergonomic products.

Growth through concentration on innovation- and technology driven marketsWe are active on innovation- and technology driven markets, disposing of a long-term growth potential. our focus is set on acceleration of competitive products in existing markets and on the introduction of innovations in new markets. By this we open new ways for increasing our revenues and earnings through demand- and environmentally compatible products.

Growth through strengthening of customer relationshipsHTI disposes of large growth potential. In this context also the development of innovations and the further enhancement of our sales activities are to be understood, since it is our intention to strengthen our customer relationships not only through better service but also through our top quality products.

Growth through technological progress

Ecologic, economic and ergonomic products

Attractive growth markets

Strengthening of customer relationships

OUR sTRATEgY

AnnuAl RepoRt 2011

16

3

4

6

2

9

810

11

5

112

13

14

15

16

OUR LOcATIONs

HTI is represented with 16 locations in Europe and Asia. The headquarters are in St. Marien/Upper Austria. Worldwide, the HTI Group employs around 1,500 members of staff, thereof around 1,200 at seven Austrian locations.

1 – HTI Headquarters Gruber & Kaja | Lightweight ConstructionSt. Marien, Austria

2 – Hitzinger | Energy TechnologyLinz, Austria

3 – High Tech Extrusion Group | EngineeringMicheldorf, Austria

4 – High Tech Extrusion Group | Engineeringkorneuburg, Austria

5 – HTP Automotive, HTP Aircraft, HTP Skinline | Lightweight ConstructionFohnsdorf, Austria

6 – BBG Baugeräte | EngineeringTMT-BBG Research & Development | Engineeringkapfenberg, Austria

7 – HTP Electronics | Lightweight ConstructionNeudörfl, Austria

8 – Hitzinger | Energy Technology | Saleskent, Uk

9 – FAVRE | Engineering | Salesparis, France

10 – High Tech Extrusion Group | EngineeringSalzgitter, Germany

11 – HTP Slovakia Lightweight Constructionvráble, Slovakia

12 – HTP Romania Lightweight ConstructionBrasov, Rumenia

13 – High Tech Extrusion Group Engineering | SalesMoskau, Russia

14 – High Tech Extrusion Group Engineering | Salespune, Indien

15 – Hitzinger | Energy Technology SalesSingapur, SGp

16 – High Tech Extrusion Group Engineering | SalesWuhu, China

Lightweight construction Engineering

Energy Technology

OUR cOmPANY

7

AnnuAl RepoRt 2011

17

The sovereign debt crisis dominated the whole year 2011. Whereas the economy was still expanding during the first half year 2011, the prognoses for the second half year became darker and darker. Threatened and meanwhile executed downgradings of credit ratings of many European states resulted in high uncertainty at the financial markets and burdened the consumption- and investment patterns worldwide. Even though we felt these negative impacts in the fourth quarter 2011 we once again managed to increase our revenue- and result figures in the year under review. The consolidated revenues increased by 7.2% to 207 million Euros. This positive development is proof for the fact that our technological compe-tency and our reliability as a supplier are appreciated by our customers. The improved cost structure of HTI beyond that led to an improvement of our profitability. The EBITDA increa-sed by 9% to 14.7 million Euros, the EBIT increased by 40% to 4.1 million Euros.

Much more crucial than the look back to the past is the look ahead to the future. Although we happily look back on what we have achieved already, we are also aware of the challenges that lie still ahead of us. The economic- and financial world has been changing during the past few years, becoming more and more difficult due to the increasing complexity. This is precisely the reason why we have started the year 2012 with ambitious targets that shall make us independent of possible future turbulences. The strategic key issues, we had de-fined for the years 2011 remain unchanged:

1. Growth through sustainable products 2. Growth through concentration on innovation- and technology driven markets 3. Growth through intensification of our customer relationships

Consequently, we have set ourselves a long-term and profitable growth target. That is why we have put the basis of our success in the center of attention in this annual report: Innovation. For us, an innovation is only ready to be introduced to the market, if it brings along technological progress, serves the benefit of the human being is and realized in har-mony with the environment. More than that, we keep developing our technological and economic perspectives mainly in those markets, which are especially driven by innovation and growth. Largest growth driver of the coming years will be the existing technological- and workforce potential of the company. Behind that lies the objective, to continuously increase the value of our company through our own innovation force.

We are now – and this is the positive impact of the crisis and the difficult economic frame conditions of the years 2008 and 2009 – much better prepared for difficult times: HTI has become more flexible, is proud of the best product range since the foundation of the Group and a very skilled and valuable workforce. our employees over the past few years proved

Economy expanded during the first half year, but declined due to the sovereign debt crisis in the second half year

Revenues- and result figures once again increased

Our objective: long-term and profitable growth

Innovations as basis for our success

dEAR sHAREHOLdERs!

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LETTER OF THE mANAgEmENT bOARd

that they are a partner who not only promises success but actively works on it continuous-ly. That is why we want to take the opportunity here to thank our workforce for their passion and positive spirit that they keep carrying into our company. After all, the innovation force of our company is a result of the numerous ideas of our creative workforce. And we would like to thank you, dear shareholders, for the trust that you gifted our company with. We would be very pleased, if you kept putting your trust in us also in the future and kept accompanying us on our way ahead.

Sincerely,

peter GlatzmeierNikolaus kretz

The innovation force of HTI is a result of the numerous

ideas of our creative workforce

Thank you to our workforce and shareholders

AnnuAl RepoRt 2011

19

14 OUR cOmPANY

cORPORATE gOVERNANcE REPORT

22 Corporate Governance Code

26 Management Board

28 Supervisory Board

31 Remuneration Report

33 Directors‘ Dealings

33 External Evaluation

34 Report of the Supervisory Board

38 gROUP mANAgEmENT REPORT

70 cONsOLIdATEd sTATEmENTs OF

FINANcIAL POsITION

76 NOTEs TO THE cONsOLIdATEd

FINANcIAL sTATEmENTs

AnnuAl RepoRt 2011

20

CoRpoRATE GovERNANCEREpoRT

AnnuAl RepoRt 2011

22

Highest possible transparence of the management- and control structure contributes to creating and safeguarding the confidence of the capital markets as well as of further sta-keholders. The Management- as well as the Supervisory Board of HTI declare themselves bound to the basic rules of Corporate Governance. All actions are focused on responsible, transparent and sustainable company management and –control. These shall meet the requirements of the shareholders. Further information is available on the company’s web-site http://www.hti-ag.at/en/investor-relations/corporate-governance/.

HTI pledges itself to the Austrian Corporate Governance Code, in its current version, availa-ble for download on the website of the ‘Arbeitskreis für Corporate Governance’ under http://www.corporate-governance.at. The Austrian Corporate Governance Code in its version of January 2010, applicable for this report, consists of 83 rules for good company management, divided into three categories:

1. L-Rules (Legal Requirements): This category pertains to rules, based on legally binding regulations.

2. C-Rules (Comply or Explain): This category contains internationally accepted guidelines. Non-compliance is legally accepted, however, explanation for non- compliance is required in order to achieve code-complying behavior.

3. R-Rules (Recommendation): This third category contains recommendations only. Non-compliance is legally accepted, neither explanations nor publications are required.

HTI satisfies all L-Rules (‘Legal Requirements’) and C-Rules (‘Comply or Explain’) of the Austrian Corporate Governance Code, in its valid version of January 2010 with the exception of those rules specified below:

Rule 31Regarding the legal requirements it is referred to the summary in the notes to the relevant financial statements. Individual disclosure is not obligatory, hence it was not performed.

Rule 53Members of the HTI Supervisory Board are elected by the Annual General Meeting and are obliged to work in the company’s best interest, according to law and the statutes of the com-pany. If individual members of the Supervisory Board have close personal ties to members of the Management Board, they are required to declare their independency for the benefit of the company. For implementation of this rule – on the contrary to the code’s advice – no explicit criteria catalogue was established.

cORPORATE gOVERNANcE cOdE

Responsible, transparent and sustainable company leadership

HTI commits to the Austrian Corporate Governance Code

AnnuAl RepoRt 2011

Corporate governanCe report

23

cOmPLIANcE

To avoid insider trading a compliance guideline, valid throughout the whole Group (‘Compli-ance Guideline regarding the handling of insider information and trading of shares through employees and executive bodies’) was established, complying with the Austrian capital market regulations as well as the ‘Austrian regulations on compliance for issuers’ by the Austrian Financial Market Authority. The Group’s compliance officer monitors the compliance to this guideline and keeps the register of insiders.

As per the legal regulations and the C-Rule 73 of the Austrian Corporate Governance Code the carried out Directors’ Dealings are constantly published by referring to the website of the Austrian Financial Market Authority under http://www.hti-ag.at/en/investor-relations/corporate-governance/directors--dealings/.

AUdIT, RIsK mANAgEmENT ANd INTERNAL cONTROL sYsTEm

kpMG Austria AG Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Linz, as proposed by the Supervisory Board, was appointed as auditor for the Annual Financial Statement for the business year 2011 by the Annual General Meeting. The charges for the audit of the An-nual Financial Statements as well as for other service in this context during the year under review can be found in chapter III/5 of the notes to the financial statement.

The responsible handling of risks for HTI is part of good Corporate Governance. In regards to risk management and internal control system it is referred to the comments in chapter ‘risk management’ of the Management Report.

sHAREHOLdERs

In the year under review the number of issued shares increased from 29.644.954 shares to 45.583.944 shares. This increase was caused by the capital increase in kind in May 2011 (550,000 shares) the cash capital increase in June 2011 (6,038,990 shares) as well as by exercising parts of the conversion rights in regards to the hybrid conversion bonds, as issu-ed in March 2011 in the course of the Group’s financial restructuring, in December 2011 (9,350,000 shares). preference shares or restrictions on regular shares do not exist. The principle ‘one share – one vote’ is applied in full.

Compliance Guideline against insider trading

Responsible handling of risks

45.583.944 issued shares

AnnuAl RepoRt 2011

24

As of December 31, 2011 approx. 30% of the shares were held by the HTI Management (as well as their applicable companies). The shares of RLB Steiermark amounted to around 12%. Hence, approx. 58% of the shares were in free float.

The equal treatment and comprehensive distribution of information to all shareholders is specially focused on by HTI. In the course of the business year 2011 HTI, on top of the legal information- and publication obligations (annual- and quarterly reports, ad-hoc releases, publication of the directors’ dealings), held numerous roadshows and single discussions with investors.

The internet is an integral part of our financial communication. As an important medium for communication the HTI website offers in-depth information about the company: Actual analyses, all publications of the year as well as further information regarding the share can be found on the company’s website www.hti-ag.at in the section Investor Relations.

HTI sHARE

The business year 2011 was characterized by a volatile price development of the HTI share. The share started the business year with a price of EUR 1.65 (January 03, 2011) and closed with EUR 0.98.

HTI shareholder structure as of December 31, 2011

HTI-share versus ATX Prime January – December 2011

HTI High Tech Industries Ag

ATX Prime

Jan Feb mar Apr may Jun Jul Aug sep Oct Nov dec

100 %

90 %

80 %

70 %

60 %

50 %

HTI management

RLb steiermark

Freefloat

in %

30

5812

AnnuAl RepoRt 2011


25

on May 23, 2011 the share of HTI High Tech Industries AG ascended from the market segment mid market to the prime market, the premium segment of the vienna Stock Exchange. Since then the HTI share can once again be traded continuously. As Capital Market Coach resp. Specialist in the year 2011 the Wiener privatbank SE (until March 2011) and ICF kursmakler AG (whole year) were appointed.

INFORmATION REgARdINg cOmPANY ANd HTI sHARE

Investor Relations officer Nadja GoyerShareholder telephone +43 (0)3862 304-8562E-Mail [email protected] Internet www.hti-ag.at Listing official trading, viennaMarket segment prime market (since May 23, 2011)ISIN AT0000764626Symbol HTIReuters HTpv.vIBloomberg HTI AvNumber of issued shares 45,583,944 sharesShare capital EUR 45,583,944.-

FINANcIAL cALENdAR 2012

May 30, 2012 1st quarter report 2012June 19, 2012 14th Annual General MeetingAugust 29, 2012 Half-yearly financial report 2012November 28, 2012 3rd quarter report 2012

HTI-share: Ascend to the prime market

AnnuAl RepoRt 2011

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During the business year 2011 the HTI Management Board consisted of three people, i.e. Mr. peter Glatzmeier (Chairman, CEo), Mr. Nikolaus kretz (Member, CFo) and Mr. karlheinz Wintersberger (Member, Coo). In the course of the Supervisory Board’s session on Decem-ber 13, 2011 the mandates of Mr. peter Glatzmeier and Mr. Nikolaus kretz were extended by further five years and hence until December 31, 2016. Upon his own request the Super-visory Board did not extend the mandate of Mr. karlheinz Wintersberger, whose mandate expired on December 31, 2011. Since January 01, 2012 the Management Board has been consisting of two members. With this reduction of the Management Board it is made clear that cost awareness is of highest priority – also for the HTI Management Board.

During the business year 2011 no member of the Management Board of HTI held a manda-te for the Supervisory Board of a stock-listed company.

mEmbERs OF THE mANAgEmENT bOARd

PETER GLATzMEIERCEOMember since February 01, 2007; Chairman since January 01, 2008; appointment until December 31, 2016

Responsibilities: Strategy, corporate communication, investor relations, crisis management, stakeholders, technology management, risk managementpeter Glatzmeier, born 1957, studied Mechanical Engineering/Economics at the University in vienna. He worked for numerous state-owned industrial companies from 1989 to 1992. Since the beginning of the year 1993 he has been the CEo of BBG Baugeräte Group. In 2006 he became a member of the Supervisory Board of the HTp AG (predecessor company of HTI AG) and in February 2007, after the integration of BBG into HTI AG, he changed his position and became a member of the Management Board. He became chairman of the Management Board of HTI AG on January 01, 2008.

NIKOLAUS KRETzCFO Since May 31, 2007; appointment until December 31, 2016

Responsibilities: Corporate accounting, corporate controlling, M&A, law, capital market regulations, IT, strategic procurementNikolaus kretz, born 1970, studied economics at the University of Linz. In the year 2002 he earned the MBA-diploma at the Rotman Business School of the University of Toronto. He started his career with kpMG. In 2002 he founded proRegio, which was integrated into the

Since 2012 the Management Board consists of two members

mANAgEmENT bOARd

AnnuAl RepoRt 2011


27

HTI Group in 2007. Since May 2007 Nikolaus kretz has been a member of the Management Board of HTI AG.

Karlheinz Wintersberger resigned from the HTI Management Board on December 31, 2011. His function will not be replaced.

wORKINg PROcEdURE OF THE mANAgEmENT bOARd

Within their defined range of responsibilities each member of the Management Board is comprehensively involved in the strategic and operative work and is in permanent contact with the management reporting to them. The other members of the Management Board are being permanently informed about significant events and all actions are being coordinated accordingly.

Crucial prerequisite for the board’s work and control body is permanent communication and coordination. This is done in the course of board meetings, held in regular intervals as well as through permanent verbal and written exchange of information. During these board sessions business development and strategic issues are being discussed. The necessary actions are determined in unison, whereas each member of the board implements these actions in their own field of responsibilities. The company management is based on an ex-tensive reporting system. Central focus is set on the monthly reporting which contains es-sential detailed information about the operative units.

Further, all issues subject to the Supervisory Board’s approval are being discussed and afterwards these requests are forwarded to the Supervisory Board for approval. The Ma-nagement Board informs the Supervisory Board in regular intervals, timely and extensively about all relevant questions regarding business development, including the risk situation and the risk management of the company and in the significant Group companies. In the sense of good Corporate Governance all open discussions are held between Management Board and Supervisory Board only.

mEAsUREs FOR AcTIVE PROmOTION OF wOmEN

HTI cares about topics of social relevance, like equal opportunities or the appropriate con-sideration of women in management positions. Any form of discrimination or mobbing is vehemently rejected. HTI wants to continuously increase the share of women in management positions. The share of women in the whole Group amounts to around 25%. As a highly technology-oriented company it is difficult to achieve an adequate ratio of female employees. In non-technical departments the Group is focused on promoting female candidates to managerial positions.

Working within own responsibilities

Working as Management Board

In the sense of live Corporate Governance:

open discussions between Management- and Supervisory Board

Equal opportunities at work and consideration of women

in management positions

AnnuAl RepoRt 2011

28

During the business year 2011 the Supervisory Board of HTI consisted of six members, appointed by the Annual General Meeting, with Gerd-Dieter Mirtl being its Chairman. Further members are Willibald Dörflinger (Deputy Chairman), Fritz kretz (Deputy Chairman), Han-nes Androsch (Member), Bruno krainz (Member) and Franz Rossler (Member).

All members of the Supervisory Board have to be regarded as independent. If single mem-bers of the Supervisory Board have close personal relationships with members of the Ma-nagement Board, these members have declared their independence vis-á-vis the company. For implementation of the C-53 rule no explicit criteria catalogue was established. All members of the Supervisory Board meet the criteria of rule C-54.

mEmbERs OF THE sUPERVIsORY bOARd

GERD-DIETER MIRTLChairmanSince December 20, 2004; Appointment until the Annual General Meeting 2014

Gerd-Dieter Mirtl, born 1944, studied law and economics at the University of vienna and the Johannes kepler University of Linz. He was shareholder and senior partner of kpMG Alpen-Treuhand GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft until end of March 2005. He holds numerous mandates on Supervisory Boards.

WILLIBALD DöRFLINGERMember since August 04, 2009; Deputy Chairman since August 21, 2009; Appointment until the Annual General Meeting 2014

Willibald Dörflinger, born 1950, graduated from the Technical College for Metallurgy in Leoben. He started his professional career at M. Schmid & Söhne in 1972 and in 1974 he started working for Honesta (wood- and plastics industry). In 1978 he became head of the procurement department of EUMIG and from 1980 on he was the head of the department circuit boards/surface technology and the tool shop. From 1986 until 1990 he was the chief executive officer of the company. From 1990 until 1994 Mr. Dörflinger together with his management board colleagues, Mr. Zoidl and Mr. Androsch, acquired the AT&S AG in the course of a management buyout and was, until 1998, member of the Management Board and after that, until 2005, its chairman. In the year 2005 he changed his position to become a member of the Supervisory Board of AT&S. Since 2005 Mr. Dörflinger has been the CEo

Independence of the Supervisory Board

sUPERVIsORY bOARd

AnnuAl RepoRt 2011


29

of the Dörflinger Management and Beteiligungs-GmbH. In August 2009 he was appointed to the Supervisory Board by the Annual General Meeting.

Further supervisory board mandates with stock-listed companies are:− AT&S Austria Technologie & Systemtechnik AG (1st Deputy Chairman)− HWA AG, Germany (Member)

FRITz KRETzDeputy ChairmanSince December 20, 2004; Appointment until the Annual General Meeting 2014

Fritz kretz, born 1942, studied brewery engineering at the University of Munich as well as the University of Berlin, where he earned a doctorate degree. Mr. kretz has been deputy chairman of the Supervisory Board of Greiner Holding AG for several years and has been the chief executive of kretztechnik AG until 1998 and chairman of the Supervisory Board of Brau Union AG for many years.

HANNES ANDROSCHMemberSince August 04, 2009; Appointment until the Annual General Meeting 2014

Hannes Androsch, born 1938, graduated at the University for World Trade in vienna and is a certified tax advisor and financial auditor. From 1970 until 1981 he has been the Finance Minister and from 1976 also the vice Chancellor of the Republic of Austria. After his political career he was the president of Creditanstalt-Bankverein (today part of the UniCredit Group) until 1988. 1989 he founded the AIC Androsch International Management Consulting GmbH. In August 2009 he was appointed to the Supervisory Board of HTI AG by the Annual General Meeting. At present, Mr. Androsch is economic-, science- and socio-politically active in the industry sector.

Further Supervisory Board mandates at stock-listed companies are:− ATS&S Austria Technologie & Systemtechnik AG (Chairman)

BRUNO KRAINzMemberSince July 01, 2008; until April 18, 2012

Bruno krainz, born 1948, studied steel works science at the University of Leoben. He held management functions with several companies including SpG AG and ÖIAG. Since 1990 he has been a member of the Management Board of Steyr Nutzfahrzeuge Österreich AG (now: MAN Nutzfahrzeuge Österreich AG), having been its president from 2004 to 2008.

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30

FRANz ROSSLERMemberSince May 26, 2004; Appointment until the Annual General Meeting 2014

Franz Rossler, born 1949, studied economics at the University of vienna. He was an execu-tive member of AT&S until July 2005 and is currently a member of the Management Board of Dörflinger private trust. In 2005, he also became a management consultant, focusing on the reorganization of companies. In 2010, Mr. Rossler became a member of the Management Board of JoWooD Entertainment AG.

wORKINg PROcEdURE OF THE sUPERVIsORY bOARd

In order to fulfill its duties, especially regarding the surveillance and the strategic support for the Management Board, the Supervisory Board discusses the situation and objectives of the HTI Group during each session. In the year under review the Supervisory Board convened in six sessions. Mr. Androsch did not participate in more than half of the sessions during the business year 2011.In the sense of the code, Management- and Supervisory Board, especially their chairmen are in permanent discussion, exceeding the Supervisory Board’s sessions, about the deve-lopment and strategic orientation of the company. Additionally the Supervisory Board carries out his consultancy- and control function by means of two committees.

cOmmITTEEs OF THE sUPERVIsORY bOARd

In the light of efficiency increase in regards to the Supervisory Board’s work and the dealing with complex issues the Supervisory Board carries out its consultancy- and control functions also by means of an audit committee as well as a nomination- and remuneration committee. Both committees consist of all members of the Supervisory Board. The chairman of the Supervisory Board, Mr. Gerd-Dieter Mirtl is the chairman of both committees. The topics, the committee dealt with, were extensively discussed in the course of the Supervisory Board’s session.

AUdIT cOmmITTEE

The audit committee deals with the monitoring of the invoicing process and the work of the auditor, with the monitoring and examination of the independence of the auditor, the exa-mination and preparation for the adoption of the financial statement, the examination of the suggestion for the use of earnings, the examination of the management report as well as the examination of the Corporate Governance Report and the reporting on the examination results to the Supervisory Board. Further, the audit committee deals with all questions regarding the audition of the consolida-ted financial statement and the management report as well as with the invoicing process within

Efficiency increase through audit-, nomination- and remuneration committee

Duties and responsibilities of the audit committee

AnnuAl RepoRt 2011


31

the Group. The committee further makes suggestions about the auditor and reports on this matter to the Supervisory Board. Additionally, in his capacity as the representative of the committee, the chairman of the audit committee is involved in the quarterly reporting as well as in the annual reporting and hence reports about these matters to the audit committee. More than that, the audit committee has the effect of a group-wide control system, an in-ternal revision system and it monitors the risk management system of the company.

NOmINATION- ANd REmUNERATION cOmmITTEE

The nomination- and remuneration committee presents suggestions for the allocation of vacant mandates within the Management Board to the Supervisory Board, deals with suc-cession- and management board remuneration issues as well as with the content of the contracts of the members of the Management Board.With the occupation of Management- and Supervisory Board mandates, focus is not only set on the candidates disposing of the necessary qualifications for fulfilling their duties, espe-cially by complying to the equal treatment law, by focusing on the appropriate share of fe-male candidates. In the year 2011, no mandates were available for occupation.

REmUNERATION REPORT

The structure of the remuneration system for the Management Board is discussed and de-cided upon by the personnel committee of the Supervisory Board. The remuneration system of the members of the Management Board consists of fixed and variable parts. The fixed part is depending on the responsibilities of the individual members of the Management Board and is paid in fourteen, monthly ex-post salaries. These basic salaries vary, depending on the responsibility as well as the strategic and operative accountability. The variable part of the salary is dependent on objectives and results and is max. 75% of the annual gross salary. In the year 2011 deferred salaries from the year 2010 were paid to two members of the Manage-ment Board. Until now, no variable salaries were confirmed or paid for the year 2011.In case of a dismissal of a member of the Management Board by the Supervisory Board the company has got the right to send the relevant member of the Management Board off-duty, however, with full payment of their rightful salary or else to assign the relevant member of the management board with an alternative job within the Group. In case of a change of control of the Group according to ÜbG, the members of the Management Board have the right to resign from office (application of all members of the Management Board until end of 2016) with immediate effect. No occupational pension for the members of the Management Board exists. For all members of the Management Board of HTI a ‘D&o’ insurance was concluded. The thereof resulting costs are covered by the company.

Detailed information on the remuneration of the Members of the Management Board in the business year 2011 can be found in chapter 34 of the notes to the consolidated statement as of December 31, 2011.

Duties and responsibilities of the nomination- and

remuneration committee

Fixed salary part depending on responsibilities,

variable part depending on reaching set target

D&O insurance for Management- and Supervisory Board

AnnuAl RepoRt 2011

32

The remuneration of the Supervisory Board is basically stipulated by §17 of the Articles of Association of HTI High Tech Industries AG and further stated in detail by the resolution of the Annual General Meeting. The remuneration system for the Supervisory Board was last agreed upon by the Annual General Meeting on May 15, 2006: Each member of the Super-visory Board receives a fixed remuneration, an attendance fee as well as a variable remu-neration, depending on the corporate earnings. With the amount of the remuneration the special tasks of the chairman and deputy are taken into consideration.

The fixed remuneration per year is:— for the chairman EUR 6,800.-— for each deputy chairman EUR 5,100.-— for each further member of the Supervisory Board EUR 3,400.-

The attendance fee is:— for the chairman EUR 200.-— for each deputy chairman EUR 150.-— for each further member of the Supervisory Board EUR 100.-

The variable remuneration depends on the consolidated earnings before tax. The total remu-neration of the Supervisory Board (fix remuneration, attendance fee and variable remuneration) is max. 1.5% of the EBT. The distribution of the variable remuneration to the various members of the Supervisory Board is calculated proportionally to the fixed remuneration. The variable remuneration is paid after the relevant Annual General Meeting of the previous year.

Detailed information on the remuneration of the members of the Supervisory Board in the

Annual General Meeting passes resolution on remuneration system for the Supervisory Board

Name of person, obligatory for publication

Gerd-Dieter Mirtl

karlheinz Wintersberger

Gerd-Dieter Mirtl

Gerd-Dieter Mirtl

Franz Rossler

Monika kretz

Gerd-Dieter Mirtl

Bärbel kretz-Mirtl

Franz Rossler

Fritz kretz

Nikolaus kretz

peter Glatzmeier

Nikolaus kretz

Reason for obligation

Supervisory Board

Management Board

Supervisory Board

in close relation to member

of the Supervisory Board

in close relation to member

of the Management Board

Supervisory Board

Supervisory Board

Entity, trust, partnership

Trierenberg Holding AG

Dörflinger private trust

Monte Rosa private trust

ABCMN vermögensverwaltungs GmbH

Glatzmeier Beteiligungs GmbH

ABCMN vermögensverwaltungs GmbH

AnnuAl RepoRt 2011


33

year 2011 can be found in chapter 34 of the notes to the consolidated statement as of De-cember 31, 2011.

dIREcTORs‘ dEALINgs

purchases and sales carried out by the members of the Management- and Supervisory Board as well as by related parties and companies are obligatory to be registered with the Financial Market Authority, according to § 48d BörseG. In the business year 2011 following transactions were carried out, according to § 48d BörseG.

EXTERNAL EVALUATION

HTI monitors the compliance with the rules of the Austrian Corporate Governance Code in the course of the internal control system (ICS) and does not have them evaluated by exter-nal institutions.

St. Marien, April 30, 2012The Management Board of HTI High Tech Industries AGpeter Glatzmeier m.p. / Nikolaus kretz m.p.

HTI share purchases and –sales of Management-

and Supervisory Board

Purchase

17,778

20,000

40,000

340,000

353,740

17,500

340,000

1,750

1,500

360,000

150,000

Sale ISIN

AT0000764626

AT0000764626

AT0000764626

AT0000764626

AT0000764626

AT0000764626

AT0000764626

AT0000764626

AT0000764626

AT0000764626

AT0000764626

AT0000764626

AT0000764626

Transaction date

17.01.2011

24.06.2011 – in the course of the capital increase









24.06.2011 – Exercising of subscription rights

24.06.2011 – Exchange of shares (cash capital increase),

(3,911,315 shares)

24.06.2011 – Exchange of shares (cash capital increase),

(2,127,675 shares)

Price/share in Euro

1.40

1.10

1.10

1.10

1.10

1.10

1.10

1.10

1.10

1.10

1.10

0

0

AnnuAl RepoRt 2011

34

The Supervisory Board has dealt with the state and the perspectives of the company as well as with various special issues and fulfilled its obligations, as assigned to it by law and the Articles of Association. It has advised and monitored the Management Board in regards to leading this company on a regular basis. The Supervisory Board was involved in all decisions of significant importance for the company.

The Supervisory Board was informed by the Management Board about the development of business, the Group’s and the individual companies‘ forecasts as well as about significant business events verbally or in writing. The Supervisory Board regularly and timely monitored the economic development and compared the actual situation with forecasts and prognoses. In the business year 2011 the Supervisory Board convened in six sessions, on March 22, April 27, June 28, August 18, November 15 and December 13, 2011 with the participation of the Management Board in order to discuss strategic questions regarding the company’s forecasting, business policy, business development, risk situation, risk management and the internal control system. The Supervisory Board in its composition also forms the audit com-mittee as well as the nomination- and remuneration committee. Beyond that, the Supervi-sory Board was permanently informed, both verbally and in writing, about the development of the Group as well as the results- and financial status. Further, all business transactions of significant importance for the company were talked about within the Supervisory Board and discussed with the Management Board. Regular feature of all consultations within the Board were the revenues-, result- and employment development of the Group and its seg-ments, the financial situation as well as the strategic direction of the Group. In depth discus-sions were also held about the growth strategy and the Group’s forecast until 2015.

The financial statements as of December 31, 2011, established according to the Austrian Reporting Standards as well as the consolidated financial statements as of December 31, 2011, established according to the International Financial Reporting Standards (IFRS) and the Group Management Report were audited by the auditor as appointed by the Annual General Meeting by considering the accounting dept.

The audition with its final result led to a qualified audit opinion. The auditor confirms that the accounts and the financial statements, with this qualified audit opinion, as of December 31, 2011 comply to the legal regulations and that the financial statements with this qualified audit opinion under consideration of the basic rules for adequate accounting portray a true and fair view of the results-, financial- and earnings situation of the company and that the Management Report matches the financial result. The auditor also confirms that the con-solidated financial statements with this qualified audit opinion give a true and fair view on the asset- and financial situation of the Group as of December 31, 2011 as well as the ear-

REPORT OF THE sUPERVIsORY bOARd

AnnuAl RepoRt 2011


35

nings situation and the individual payment flows for the year under review in accordance with the International Financial Reporting Standards (IFRS) and that the Management Report resp. the Group Management Report comply to the financial statements resp. the consoli-dated financial statements.

A Corporate Governance Report was established according to § 243b UGB.

The Management Board presented the financial statements and the consolidated financial statements of HTI High Tech Industries AG, the Management Report as well as the Group Management Report, the Corporate Governance Report as well as the reports of the auditor as of December 31, 2011 in due time to the Supervisory Board and also gave in-depth infor-mation. The Supervisory Board approved on the financial statements including the Manage-ment Report, on the consolidated financial statements including the Group Management Report as well as on the Corporate Governance Report for the business year 2011. The audition by the Supervisory Board did not lead to any objections. During the final audits the auditor reported to the audit committee, participated in the preparatory Supervisory Board’s session regarding the determination of the statements of financial position and in the course of this session reported on the significant results of the audition.

After audition and discussion in the audit committee the Supervisory Board, on April 30, 2012 approved of the financial statements including their notes and the Management Report as presented by the Management Board, by this them being determined according to §96/4 AktG. Further the consolidated financial statements as of December 31, 2011 including their notes and the Group Management Report as well as the Corporate Governance Report were brought to the attention of the Supervisory Board.

The Supervisory Boards wishes to express their gratitude to the Management Board and all employees of HTI for their efforts and passion in a still very trying market environment. Special thanks also need to be expressed to the shareholders and business partners for putting their trust in HTI High Tech Industries AG.

St. Marien, April 30, 2012

For the Supervisory Board

Gerd-Dieter MirtlChairman

14 OUR cOmPANY

22 cORPORATE gOVERNANcE REPORT

gROUP mANAgEmENT REPORT

38 Market Environment

38 General Economic Conditions

38 Development of Industrial Sectors

41 Development of the HTI Group

41 Business Development 2011 and Earnings

42 Segment Report

46 Cash Flow

47 Financial Situation

48 Risk Management

54 Research, Development and

Innovation

58 Workforce

60 Corporate Social Responsibility

62 HTI Shares, position of Shareholders and

Changes in the Articles of Association

65 Events after the Reporting period

66 outlook


FINANcIAL POsITION



AnnuAl RepoRt 2011

36

GRoUp MANAGEMENT REpoRTHTI HIGH TECH INDUSTRIES AG

(IN THE FoLLoWING CALLED "HTI“ oR "HTI-GRoUp“)

AnnuAl RepoRt 2011

38

gENERAL EcONOmIc cONdITIONs

After a very good start the global economic growth slowed down significantly in the course of the year 2011. The International Monetary Fund (IMF) anticipated an average worldwide GDp-growth of 3.8% (2010: 5.2%). The significantly worse growth perspectives are mainly explained by the sovereign debt crisis in the Euro zone, which has also had a major effect on the rest of the world.

For the Western industrial states the IMF announced a GDp growth of 1.6% for 2011. The economies of the developing- and emerging countries grew significantly stronger by 6.2% on average. Due to the restrictive credit policy in China however the growth rate there was also lower than expected.1

In Austria the economic performance developed rapidly during the first half year 2011. In autumn 2011 however a slight decline in the economy became obvious. In total the Austrian GDp grew by 3.2% in 2011.2

The increasing uncertainties in regards to the economic development in the course of the year 2011 led to industrial customers being more and more reluctant in placing new orders.

dEVELOPmENT OF INdUsTRIAL sEcTORs

The market segment Automotive, relevant for the HTI segment Lightweight Construction, looks back on positive development in 2011, however, with great differences in regions and vehicle categories. Whereas in the course of the year 2011 the new releases in Europe in almost all important markets decreased, in the US, China, India and Russia partly two-digit growth rates were recorded.3 Here mainly the market for premium middle class as well as premium class models boomed, whereas the market for the compact- and volume models, intended for the European market stayed behind expectations. In the European Union in 2011 a minus of 1.7% new releases were recorded.4 Significant increases were

Decline of the global economic growth because of the sovereign debt crisis in the Euro zone

Austria: Substantial expansion in the first half year, decline in economic growth in the second half year

Decline in new releases in Europe – growth rates in the US, China, India and Russia

mARKET ENVIRONmENT

1 Cf. IWF, World Economic outlook Update, Jan. 20122 Cf. WIFo, press release, ‘prognosis for 2012 and 2013: Sovereign debt crisis grips real economy, Dec. 19, 2011’ as well as ‘Reluctant economic recovery after decline in 2012’, Jan. 20, 20123 Cf. vDA, press release, „kräftiges Wachstum in USA, China, Indien und Russland“, Jan. 17, 20124 Cf. ACEA, press release, ‘passenger Cars: registrations drop 6.4% in December, -1.7% in 2011’, Jan. 17, 20125 Cf. ACEA, press release, ‘passenger Cars: registrations drop 6.4% in December, -1.7% in 2011’, Jan. 17, 2012

AnnuAl RepoRt 2011

group management report

39

recorded in the important German automobile market, where in 2011 around 3.2 million new vehicles were newly released (+ 8.8% compared to 2010)5. Also in Austria the new re-leases increased significantly (+8.4% to around 360.000 vehicles).6 These increases were mainly the consequence of the introduction of new models and advance purchases. In the world market, the German automobile producers mainly scored with fuel efficient new models. In the year 2011 the German producers exported more than 4.5 million vehicles, resulting in a new high.7 Also the vehicle production in Germany reached a new record high with almost 5.9 million pieces.8

In the Aviation Industry, the modernization of the fleets in regards to increase in transport capacities but especially in regards to the reduction of fuel consumption per passenger kilometer was continued. The two largest aircraft producers, Airbus and Boeing, benefited from the boom in the aviation industry, which is mainly carried by the Asian airlines, and shipped 1,011 civil aircrafts in the year 2011 (+4% after 972 in 2010). The European aircraft producer Airbus shipped 534 civil aircrafts in 2011 (+5% after 510 last year).9 The US com-petitor Boeing announced sales figures of 477 civil aircrafts in 201110(+3% after 462 in 2010).

The Mechanical Engineering industry, being an important indicator for the HTI segment Engineering showed positive development in 2011. Hence, the German mechanical engineers produced equipment in a total value of EUR 187 billion (+14.7% after EUR 163 billion in 2010).11 By this, the pre-crisis value of EUR 196 billion was only narrowly missed. The mechanical engineering sector, being the motor of the German export economy however, certainly felt the recession in countries like Greece, portugal and Spain. Due to this reason the community of German mechanical engineers (vDMA) revised their growth prognosis from 4% to zero.12

The European construction industry, an important sales market for the segment Enginee-ring, declined by 0.6% in 2011 for the fourth consecutive year.13 Whereas this industry still suffered from the impacts of the economic crisis in countries like portugal, Spain, Great Britain and Ireland, in Northern- and Central Europe already stable recovery was noticed. Hence, amongst others, the German construction industry developed positively. Incoming orders from January until December 2011 increased by 7.3% compared to last year.14 The German construction industry was mainly carried by residential homes construction which benefited from the increase in the investors’ demand for real estate. The extruder market reports on a decline in the year 2011 for German and Austrian producers. According to vDMA statistics, which published the sales and order data for extruders for German and Austrian producers, the listed companies suffered from a decline in sales figures from 2010 to 2011.15

Asian airlines create a boom in the aviation

industry

Positive development in the field of mechanical

engineering

Construction industry declines for the fourth

consecutive year

6 Cf. Statistics Austria, vehicle statistics, Jan. 11, 20127 Cf. vDA, press release, „Gesamtjahr 2011 mit neuen Rekordmarken bei Export und produktion“, Jan. 03, 20128 Cf. vDA, press release, „Gesamtjahr 2011 mit neuen Rekordmarken bei Export und produktion“, Jan. 03, 20129 Cf. Airbus Website, key Documents, http://www.airbus.com/presscentre/corporate-information/key-documents/10 Cf. Boeing, press Release, „Boeing Reports Strong Fourth-Quarter Results and provides 2012 Guidance”, Jan. 25, 201211 Cf. Handelsblatt, „Maschinenbau fällt als Wachstumsmotor aus“, Feb. 24, 201212 Cf. Handelsblatt, „Maschinenbau fällt als Wachstumsmotor aus“, Feb. 24, 201213 Cf. Euroconstruct, press info, ‘European Construction Market: Further decline in 2012’, Nov. 09, 201114 Cf. Hauptverband der Deutschen Bauindustrie, press release, ‚Jahresendrallye am Bau‘, Feb. 22, 201215 Cf. vDMA plastics and Rubber Machinery Association, Extruders and Extrusion Lines - orders and Sales, Feb. 2012

AnnuAl RepoRt 2011

40

Incoming orders declined from 475 extruders in 2010 by 3% to 459 pieces in 2011. In Aust-ria the construction industry grew only slightly by 0.7%.16

The steel industry, another important market for the HTI segment Engineering, reported on record production figures in 2011. The global crude steel production in 2011 increased by 6.8% to around 1.5 billion tons.17 Almost 65% (988 million tons) of the global crude steel production was produced in Asia, the main part thereof in China, where in 2011 around 696 million tons of crude steel were produced (+8.9 % compared to 2010). China still holds the lead in the world’s largest steel producers, followed by Japan and the United States, with a share of around 46% in 2011. The European Union increased their steel production by 3% to 177 million tons in 2011, the US by 7% to 86 million tons. This is also proof for the fact that investments in modernization and extension of steel mills are mainly done in Asia.

Apart from the construction industry and the aviation industry the German electronics in-dustry is an important indicator for the segment Energy Technology. In 2011 the revenues of the German electronics industry increased by 6%.18 The domestic results thereof incre-ased by 8% and foreign revenues by 5%. In 2011, the output grew by 13% and for the first time once again exceeded the pre-crisis level. The global demand in primary energy, accor-ding to estimations of the International Energy Agency (IEA), is expected to increase by around one third until 2035.19 Even though the demand in fossil fuels increases, the share of fossil fuels in the global primary energy consumption shall decrease slightly from 81% in the year 2010 to 75% in the year 2035.20 Within the electricity industry half of the new power plant capacities, needed for meeting the global demand, are based on renewable technolo-gies, mainly by hydro- and wind power.21 According to a study, carried out by pricewater-houseCoopers, small hydro power plants worldwide shall increase by approx. 8% from 2010 to 2015 with Asia and South America being the regions set to increase the most. For Euro-pe a growth rate of around 3% until 2015 is expected.22

Steel industry reports on new record production

Experts anticipate an increase in the global demand for primary energy by around one third until the year 2025

Increases in hydro- and wind power expected

17 Cf. World Steel Association, press release, ‘World crude steel output increases by 6.8% in 2011“, Jan. 23, 201218 Cf. ZvEI, press info, „Inlandsaufträge für Elektroindustrie legen weiter zu“, Feb. 02, 201119 Cf. International Energy Agency, World Energy outlook 2011 factsheet, www.iea.org 20 Cf. International Energy Agency, World Energy outlook 2011, summary, www.iea.org 21 Cf. International Energy Agency, World Energy outlook 2011, summary, www.iea.org 22 Cf. pwC pricewaterhouseCoopers, SHp (Small Hydro power) in Europe, Market review, November 201016 Cf. WIFo, press release, ‘Erholung der europäischen Bauwirtschaft verzögert sich – weiterer Rückgang für 2012 erwartet‘, Nov. 15, 2011

AnnuAl RepoRt 2011


41

bUsINEss dEVELOPmENT 2011 ANd EARNINgs

The development of HTI in the course of the year 2011 was overall more positive than last year. Reasons for that were mainly improvements in revenues and results in the segments Lightweight Construction and Energy Technology. The segment Engineering, strongly de-pending on project business, benefited from a large extrusion order and from a positive, non-recurring earnings effect in the field of special machines for the pig iron- and steel industry in 2010, allowing only limited comparability.

In the course of the business year 2011 the consolidated revenues increased by TEUR 13,985 or 7.2% to TEUR 206,991 (last year: TEUR 193,006). The operative performance increased by TEUR 14,810 or 7.4% from TEUR 201,032 to TEUR 215,842. The operative earnings befo-re interest, depreciation, amortization and tax (EBITA) amounted to TEUR 14,699; after TEUR 13,489 in the year 2010.

The earnings‘ situation of the business year 2011 was positively influenced by following non-recurring effects: A sale & lease back transaction in the segment Lightweight Const-ruction resulted in a positive earnings’ contribution of TEUR 2,435 (before tax). Further, the write-up of an investment in the segment Engineering had a positive impact in the amount of TEUR 899. Another positive contribution was the first-time use of the poC method in seven of the Group’s companies. This amount was around TEUR 2,330. Even though the earnings’ situation of the HTI Group as well as the company have improved through the restructuring actions, the general economic recovery and the previously descri-bed non-recurring effects, once again substantial losses were generated, especially in the second half of the year 2011 in the divisions extrusion and Gruber & kaja. The financial si-tuation of the HTI Group and the company as a result of this became worse. In regard to the consequently necessary financing discussions, which were positively concluded by end of April 2012, we refer to chapter ‘Events after the Reporting period’.

HTI also generated increases with the operative earnings before interest and tax (EBIT) and with the earnings before tax (EBT). The operative earnings before interest and tax (EBIT) increased from TEUR 2,907 to TEUR 4,066; corresponding to an EBIT margin of 1.9% (after 1.4% last year).

The earnings before tax (EBT) after deduction of the financial result of TEUR -6,380 (last year: TEUR -6,886) 2011 amounted to TEUR -2,314 (after TEUR -3,979 last year), resulting in an EBT margin of -1.1% (2010: -2.0%). The annual result after tax improved from TEUR -3,930 last year to TEUR -2,224 in 2011.

dEVELOPmENT OF THE HTI-gROUP

EBITDA-development in TEUR

2009 − 2011

EBIT-development in TEUR

2009 − 2011

-10,

453

2009 2010 2011

19,000

14,000

9,000

4,000

-1,000

-6,000

-11,000

-16,000

14,6

99

13,4

89

2009 2010 2011

5,000

0

-5,000

-10,000

-15,000

-20,000

-25,000

-30,000

-24,

733

4,06

6

2,90

7

AnnuAl RepoRt 2011

42

Hence, an improvement of earnings per share was achieved of EUR 0.08 from EUR -0.15 in the year 2010 to EUR -0.07 in the year 2011.

In the year under review the number of issued shares increased from 29,644,954 to 45,583,944. Reasons for that were a capital increase in kind in May 2011, a cash capital increase in June 2011 as well as a contingent capital increase in December 2011 (see chap-ter ‘HTI Shares, position of Shareholders and Changes in the Articles of Association’). Since the contingent capital increase in the amount of TEUR 9,350 was implemented by issuing 9,350,000 shares only in December 2011, the weighted average number of shares increased only slightly from 29,644,953 to 33,730,619.

sEgmENT REPORT

The business activities of HTI contain the segments ‘Lightweight Construction’, ‘Engineering’, Energy Technology’ and ‘others’. The latter contains minority interests and the Group’s holding functions.

The share of the segment Lightweight Construction of the total revenues of HTI in the year under review was 55%, after 51% in the year 2010. This increase is a result of

the strong demand of existing customers compared to last year. The share of the segment Engineering decreased from 27% to 23%, which is a result of the already mentioned large projects in 2010. The share of the segment Energy Technology remained unchanged at 22%.

sEgmENT LIgHTwEIgHT cONsTRUcTION

The Lightweight Construction companies of HTI are located in Austria (St. Marien, Fohns-dorf and Neudörfl) and in Slovakia (vráble).

In the business year 2011 the segment Lightweight Construction benefited from the eco-nomic recovery of the automotive industry and the therewith connected increase in order quantities. Hence, for example, the production quantities of the Audi Q7, the Skoda Superb as well as the porsche panamera were increased. For these customers, the segment Lightweight Construction produces interior- and exterior parts made of plastics in various colors, which are coated by means of coating equipment with highest quality surfaces. This positive development led to a better utilization of the production locations in Fohns-dorf and Slovakia. At the location in St. Marien, where lightweight components are made from aluminum and plastics, the second extension phase of a modern, highly efficient machining center was successfully completed. This innovation was done at precisely the right time in order to be able to produce not only the existing Audi lead frames on order, but also an additional type of lead frame, newly on order. Additionally, the order quantities

Revenues, split according to segments 2010 − 2011

Segment Lightweight Construction benefits from the economic recovery of the automotive industry


Engineering

Energy Technology

in %

22 2011

2010

22

2355

5127

Earnings per share in EUR

2009 − 2011

-0.7

9

2009 2010 2011

0.20

0.00

-0.20

-0.40

-0.60

-0.80

-1.00

-0.1

5

-0.0

7

AnnuAl RepoRt 2011


43

for the Audi sealing flange as well as for the BMW rear axle gear body were increased in 2011. Also, a number of new orders were received by the segment Lightweight Construc-tion. Hence, HTI for example received an order to produce the body of a battery charger for electric cars. The charger will be used in cars with electric drive and the charging time for a full battery will be reduced to one to two hours. our segment Lightweight Construc-tion also successfully managed to enter the motor section of Audi. For the S3 and R8 model design covers will be produced, starting with July 2012. Further, orders were re-ceived for lever flaps for the BMW 3 convertible and for loudspeaker grilles for the Mer-cedes SL. More than that, this segment successfully conquered the seat-sector. It was awarded with an order for the production of a pressure tank for Daimler. This pressure tank serves the pneumatic comfort seat adjustment. Numerous orders were also received by the commercial truck industry, like for example an order from MAN for the production of headlight supports for various MAN truck types. Wabco ordered a valve body from HTI. This valve body consists of three component groups and serves the control of the truck’s braking system. Also for the aviation industry our segment Lightweight Construction has been a long-term, reliable partner, who produces lightweight components for the passen-ger cabins of aircrafts, like windows, doors and luggage compartments for the Airbus A350 and A380. In the year under review new orders for windows as well as aluminum extrusion components for a leading business jet producer were received. Further we will ship the compartments and cover rails for the luggage compartments for the first, com-pletely in China designed, jet-driven regional aircraft. our division aircraft was also happy to receive a high award 2011: FACC AG as one of the worldwide leading aircraft component producers awarded our center of competency for aircraft lightweight components with the Excellent Supplier Award in bronze. The main criterion for this nomination was the con-tinuous supply of high product quality in strict compliance with the delivery terms. Addi-tional criteria were customer service, flexibility, cooperation as well as the willingness for definition, acceptance and implementation of cost cutting and process optimizing actions.

The revenues of the segment Lightweight Construction increased to TEUR 114,651 in 2011, corresponding to an increase of TEUR 17,091 or 17.5% compared to 2010 (TEUR 97,560). The generated operative earnings before interest, tax, depreciation and amortization in-creased to TEUR 8,784, after TEUR 6,733 last year, corresponding to an increase of TEUR 2,052 or 30.1%. Likewise, the operative earnings before interest and tax improved from TEUR -249 to TEUR 1,650 as well as the earnings before tax from TEUR -4,653 to TEUR -1,755 in the year under review.

sEgmENT ENgINEERINg

The production- and distribution sites of the segment Engineering are located in Austria (kapfenberg, korneuburg, Micheldorf), Germany (Salzgitter), France (Bezons/paris), China (Wuhu), India (pune) and Russia (Moscow).

Within the segment Engineering the sectors pneumatic hammers and special machines for the pig iron- and steel industry developed very positively. Reasons for that were, apart

Numerous new orders received

FACC AG awards the center of competency

for aircraft lightweight components with the

Excellent Supplier Award

Segment Lightweight Construction:

Clear increase in revenues and earnings

AnnuAl RepoRt 2011

44

from a good basic utilization within the construction trade also gains of market shares for pneumatic hammers due to loss of competition in France as well as high incoming orders for special machines for the pig iron- and steel industry, especially from the BRIC states. However, new orders for special machines were also received from European customers. For example, the steel mill Thyssen Bruckhausen ordered a new machine. In 2011 a new generation of special machines for the pig iron- and steel industry as well as a new inno-vative pneumatic hammer were developed (see also chapter ‘Research, development and innovation’).

As already mentioned in the above, the division extrusion equipment, strongly depending on project business, in the year 2010 strongly benefited from a large order from China. This is the reason, why comparison of business development is only possible on a limited basis. Especially in the second half of the year 2011 this division received numerous attractive new orders. Hence, the segment Engineering was awarded with orders for oMNIA ext-rusion lines for the production of pvC window profiles and –pipes for poland, India, the Ukraine and the Middle East. Crucial factors for being awarded with these orders were the high technological competency as well as the unique overall concept of oMNIA. Since, on the contrary to conventional extrusion lines, where all components come from different producers, HTI with oMNIA has developed an innovative complete extrusion line, where compatability of all components is secured over the whole extrusion line. Consequently, the customer is able to portray a stable production process with substantial cost cuttings as a result. Additionally, test results show that various components of the oMNIA extru-sion line save more than 60% in energy consumption. In the year under review a new vacuum system as a compliment to this extrusion line was developed (see chapter ‘Re-search, development and innovation’).

Revenue- and results figures of the segment Engineering in the year 2011 stayed behind the figures of 2010. The segment’s revenues 2011 were TEUR 46,937, after TEUR 52,432 last year. The operative earnings before interest, tax, depreciation and amortization in the year 2011 were TEUR 3,208 (last year: TEUR 5,962). The operative earnings before interest and tax amounted to TEUR 1,382 (last year: TEUR 3,629), and the earnings before tax was TEUR 6,153 (last year: TEUR 4,650).

sEgmENT ENERgY TEcHNOLOgY

The production site of the segment Energy Technology is located in Austria (Linz). Distribu-tion- and service sites are located in the Uk (kent) and Singapore. Additionally, this segment is represented by local representation offices worldwide. These cooperation partners care about the local customers.

Positive development in the field pneumatic hammers for the pig iron- and steel industry

Extrusion equipment: Limited comparability because of large orders in 2010

Segment Engineering: Revenues and earnings behind last year’s figures

AnnuAl RepoRt 2011


45

The business year 2011 was a very good year for the segment Energy Technology. Nu-merous new orders once again paid a positive contribution to the annual result 2011. Especially the divisions USv equipment and airport equipment generated the largest increases in revenues. Hence, for example, an Austrian university awarded HTI with an order for the production of the largest USv equipment ever in the history of the company. With a performance of 2x2,500 kvA these two pieces of diesel-driven USv combi equipment will serve the supply of an Austrian university. Further pieces of USV equipment with a performance of 1,000 kvA were shipped to a wind energy park in Tasmania. The main purpose of this equipment is the security of stable electricity supply on king Island. In times of high winds the conventional, diesel-driven aggregates are switched off. The possiblity to switch off the diesel driven aggregates allows significant reduction of fuel consumption with consequent operational cost cuttings. This project substantially con-tributes to the experience factor in the field of saving of renewable energy. Attractive new orders were also recorded for the division airport equipment. Hence, HTI equipped the airport Tokyo for the future handling of the new Boeing 787 dreamliner through the Ja-panese airline ANA with 17 ground power units (GpUs). More than that, a GpU was shipped to the aviance network for the first time. This network consists of a cooperating, independent group of ground equipment traders worldwide, which operates under a common roof with a centralized procurement organization. Until now the GpUs were mainly purchased from a British competitor. Even more pleasant is now the fact, that HTI achieved this strategic breakthrough. Further GpUs were shipped to ADAS Abu Dhabi Airport Services, Swissport, the airport Jekatarinenburg in Russia as well as the airport klagenfurt. DHL and Bombardier ordered frequency converters. Hence, HTI shipped frequency converters for the extension of the DHL Hub in Leipzig under the patronage of Siemens. Bombardier Aachen ordered a frequency converter for a rail test field, after the company was very satisfied with the converter that had been shipped for Bombardier Görlitz. Alternators for example were ordered by Liebherr. These alternators are driven by hydraulic motors and are responsible for the energy supply of auxiliary aggregates in cranes. Also, alternators for numerous ships and hydro power plants were shipped. More than that, in the year under review an order was received for the production of power conditioners for a solar cell production in Sicily/Italy. Additionally to the existing power conditioners that were already installed by HTI another three pieces of equipment for solar cell production were ordered. The main application of these power conditioners lies in safeguarding of a continuous power supply within a narrow tolerance. Fluctuations as well as large load changes of the consumers are compensated by means a kinetics module in permanent operation. The performance of the equipment is 2 x 5.5 MvA. More than that, this segment has successfully completed its research and development acti-vities in the field of ground power supply of aircrafts by introducing the product novelties D poWER and S poWER to the market as well as the development of order-related in-novations for the solutions of customer’s problems (see chapter ‘Research, development and innovation’).

Numerous new orders secure a good business

year for the segment Energy Technology

AnnuAl RepoRt 2011

46

The segment Energy Technology generated a surplus in revenues of 5.9% of TEUR 43,045 to TEUR 45,566. The generated operative earnings before interest, tax, depreciation and amortization increased by TEUR 679 or 19.9% from TEUR 3,420 in the year 2010 to TEUR 4,099 in the year 2011. The operative earnings before interest and tax increased from TEUR 2,431 to TEUR 3,034, portraying an increase of 24.8% or TEUR 603. The earnings before tax improved by TEUR 552 or 24.0% from TEUR 2,304 to TEUR 2,856 in the year under review.

sEgmENT OTHERs

In the segment others the activities of HTI AG as well as the other intermediate holdings and minority interests are stipulated. The result of this segment was negatively influenced due to a depreciation of a minority interest in the amount of TEUR 539.

cAsH FLOw

The cash flow from earnings by end of the year 2011 was TEUR 5,216; after TEUR 6,041 as of December 31, 2010. The operative cash flow was TEUR -1,600 (Dec. 31, 2010: TEUR -1,918) and is a result of the working capital increase through order extensions as the increased receivables from construction contracts. The cash flow from investing activities increased from TEUR -8,081 to TEUR -13,857. This increase is primarily the result of investments in equipment, the activation of development charges as well as on the takeover of the 20% shares that were held by the employees of Hitzinger GmbH. With this increase of the interest 100% of the Hitzinger shares are now fully integrated into the HTI Group.

Segment Energy Technology: Significant increase in earnings

Increase in investments through extension of machinery and equipment, development charges and takeover of the Hitzinger shares, previously held by the Hitzinger workforce

01.01. - 31.12.2010

6,041

-7,959

-1,918

-8,081

8,639

-1,360

5,829

4,470

01.01. - 31.12.2011

5,216

-6,816

-1,600

-13,857

16,491

1,033

4,470

5,503

in TEUR

Cash flow from earnings

Movements in working capital

Cash flow from operating activities

Cash Flow from investing activities

Cash Flow from financing activities

Movements in cash and cash equivalents

Cash and cash equivalents at the beginning

of the period

Cash and cash equivalents at the end of the period

AnnuAl RepoRt 2011


47

The cash flow of financing activities in the amount of TEUR 16,491 portrays additional funds from the capital increase, implemented in June 2011 as well as the newly agreed upon credit lines. Cash and cash equivalents as of December 31, 2011 were TEUR 5,503; after TEUR 4,470 as of Dec. 31, 2010.

FINANcIAL sITUATION

The extension of the business volume in the year 2011 led to a further increase in assets, especially in current assets. Further the development costs increased from TEUR 6,468 in the year 2010 to TEUR 10,955 in 2011. The equity of HTI AG as of Dec. 31, 2011 was TEUR 40,811 (after TEUR 38,303 as of Dec. 31, 2010). This improvement is the result of various capital measures, which were implemented in the course of the year under review. In May 2011 a contribution in kind in the amount of TEUR 550 was done, by issuing of 550.000 new, non-par value bearer shares with full voting power by excluding shareholders‘ subscription rights. Admitted were BkS Bank and volks-bank Graz-Bruck. In June 2011 HTI carried out a cash capital increase, which was aimed at existing shareholders of HTI High Tech Industries AG, who were able to sign new shares by exercising their subscription rights. Issued were 6,038,990 new non-par value bearer shares with full voting power at a fixed subscription and offer price of EUR 1.10 per share. The new shares that were not signed via subscription rights of existing shareholders were signed by selected investors in the frame of a private placement by keeping a minimum purchase amount of TEUR 50 per investor. The cash capital increase was done by part utilization of the authorized capital, as decided upon by the 12th Annual General Meeting, held on June 30, 2010. Through this capital increase HTI generated additional equity in the amount of TEUR 6,643.

The share capital of HTI through these three capital measures increased by a total of TEUR 15,939 or 53.8% from TEUR 29,645 to TEUR 45,584.

The non-current liabilities were reduced from TEUR 127,196 as of Dec. 31, 2010 to TEUR 120,576 as of Dec. 31, 2011. The current liabilities however increased to TEUR 100,542 (after TEUR 76,409 as of Dec. 31, 2010). The net financial debt under consideration of subordina-ted liabilities as a result of new investments and the increase of working capital increased from TEUR 131,469 to TEUR 146,848 by end of the year 2011, consequently making the ge-aring increase slightly from 3.4 to 3.6.

In regard to the necessary financing discussions with the creditors in April 2012, we refer to chapter ‘Events after the Reporting period’.

Equity strengthened through equity actions

Increase of share capital

AnnuAl RepoRt 2011

48

The conscientious handling of risks is part of good corporate governance of the HTI Group. In the course of its business activities, HTI is subjected to a variety of chances and risks and thus uses a risk management as integral part of the management system. It is the objective of the risk management to identify risks at an early stage in order to meet them with appropriate actions and to keep target deviations as small as possible. Therefore the identification, evaluation, controlling and supervision of the risks are a necessity, all of which is done in the course of an internal risk management process on a regular basis. A standardized chance - risk reporting ensures that the Group’s individual companies regu-larly analyze and stipulate all existing quantifiable chances and risks and forward these reports to HTI. Here, the risks are categorized as “strategic risks”, “operative risks”, “fi-nancial risks” as well as “workforce risks”. This enables the decentralized gained infor-mation to be recorded and analyzed completely and to be structured by HTI AG in order to define and carry out control measures.

From HTI’s point of view, as of December 31, 2011 following substantial risks exist and have to be reported on, since they may lead to impairment of business:

gENERAL EcONOmIc RIsKs

The International Monetary Fund anticipates a global economic growth of 3.3% for 2011. According to estimations of the IMF the GDp in the Western Industrial States shall increase by 1.2%. While the US shall manage an increase of 1.5% according to estimations, the eco-nomy in the Euro zone is anticipated to decline by 0.5%. An economic growth for the deve-loping- and emerging countries of 5.4% is estimated by the IMF for 2012.23 For Austria the experts anticipate only a slow growth of 0.4%, since Austria is also subjected to the declining domestic demand within the Eurozone as well as the declining dynamics of the global eco-nomy.24 This development may also have an impact on the business development of HTI in the year 2012. Changes in energy- and raw material prices, exchange rate deviations and changes in the legislations as well as bankruptcies of cooperation partners may bear posi-tive or negative impact on the business development. In order to limit the impact of the general economic risks on the result of the HTI Group, rapidly realizable action packages were prepared. one of the actions for keeping the general economic risks under control is the permanent observation of the economic development by the Management Board and all managers of the Group. In regular meetings these economic risks are analyzed, commented on and evaluated by using the appropriate economy- and market reports.

Risk management as integral part of the management system

IWF anticipates global economic growth of 3.3% for 2012

Risk minimization through intensive surveillance of economic development

RIsK mANAgEmENT

23 Cf. IWF, World Economic outlook Update, Jan. 201224 Cf. WIFo, press release, ‘prognosis for 2012 and 2013: Sovereign debt crisis grips real economy, Dec. 19, 2011’ as well as ‘Reluctant economic recovery after decline in 2012’, Jan. 20, 2012

AnnuAl RepoRt 2011


49

bRANcH sPEcIFIc RIsKs

The branch specific risks are mainly the result of the situation in the various markets, re-levant for the HTI Group. A study carried out by the advisors Mckinsey & Company finds, that the automobile producers will increase the share of lightweight components per ve-hicle from 30 to 70 percent until the year 2030, in order to compensate the increase in weight, gained through electric drive and fuel efficient motor technology. Consequently, a new growth market is being created for the supplying industry: The annual revenues for lightweight parts made of steel, aluminum and carbon fiber reinforced plastics is estimated to increase – depending on the development of raw material prices – from approx. 70 billion to more than 300 billion Euros until the year 2030. one important future issue for the European automo-bile producers is the Co2-regulation. Until 2020 the producers must reduce Co2-emissions of their fleets to below 95 grams per kilometer, or else they will have to face heavy penalty payments. Through optimization of conventional motors and lightweight actions this target can be achieved.25 Especially electric- and hybrid drives increase the weight of a vehicle, consequently making the demand for lightweight parts increase once again.26 For the year 2012 experts anticipate once again moderate growth for the German vehicle producers, with the export economy being the strong pillar of the automobile production in Germany.27 The aviation industry started slowly into the year 2012. Whereas the demand in passenger traf-fic in January increased by 5.7% compared to last year, the freight volume declined by 8% within the same period.28 The strong increase in passenger figures as well as the decline in freight can be attributed to the date of the Chinese New year – which this year was celeb-rated in January instead of February - as in 2011. Generally the increasing prices for oil and an uncertain economic climate challenge the airlines. But still many airlines strategically invest in more fuel efficient aircraft models, in order to be ready once the global economic situation improves and consequently the demand increases.29 The mechanical engineering industry faces global challenges. Hence, the German Engineering and plant Engineering Association (vDMA) revised their prognosis from a growth rate of 4% to zero.30 Reason for this expected stagnation is the declining demand due to the uncertainty in Europe and the slowdown of the Chinese economy. For the construction industry Euroconstruct anticipates once again a decline by 0.3% for 2012.31 Stable recovery on average of the examined European countries is not yet in sight for 2012. Also the steel industry started the year 2012 slightly slower. Hence, the global crude steel production in January 2012 with 117 million tons was around 8% below last year’s figures.32

Outlook on markets, relevant for HTI

Lightweight parts: new growth market for

supplying industry

25 Cf. Mckinsey & Company, press release, ‘Automotive industry: Co2-Regulierung sorgt bis 2030 für dreistelliges Milliardenwachstum im Leichtbau‘, Jan. 05, 201226 Cf. Börsen-Zeitung, Artikel „Nicht nur Carbon ist Leichtbau‘, Jan. 06, 201227 Cf. vDA, press release, ‚Gesamtjahr 2011 mit neuen Rekordmarken bei Export und produktion‘, Jan. 03, 201228 Cf. IATA, press release, ‘passagiernachfrage weiter im Steigflug – Frachtgeschäft kommt nicht aus dem keller‘, Feb. 29, 201229 Cf. IATA, press release, ‘passagiernachfrage weiter im Steigflug – Frachtgeschäft kommt nicht aus dem keller‘, Feb. 29, 201230 Cf. Handelsblatt, ‘Maschinenbau fällt als Wachstumsmotor aus‘, Feb. 24, 201231 Cf. Euroconstruct, press info, ‘European Construction Market: Further decline in 2012’, Nov. 09, 201132 Cf. World Steel Association, press release, ‘January 2012 crude steel production’, Feb. 21, 2012

AnnuAl RepoRt 2011

50

However, according to experts the upwards trend in the steel industry is still intact. Hence, the global steel production is anticipated to increase by around 70% to around 2.56 billion tons until the year 2025.33 The growth happens in the emerging countries, most of all Chi-na and India. There, substantial investments are made in favor of the infrastructure; con-sequently large quantities of steel are in demand. Consequently, these countries new in-dustrial sectors are being born, which manufacture vehicles and machines. The global demand for primary energy, an important indicator for the investment activities in the field of Energy Technology, shall – according to estimations of the International Energy Agency (IEA) – increase by around one third until 2035.34 Even though the demand for fossil fuels increases, the share of fossil fuels in the global primary energy consumption shall slight-ly decrease from 81% in the year 2010 to 75% in the year 2035.35 In the electricity industry half of the newly installed power plant capacities, needed to meet the demand, are rene-wable energy technologies, most of all hydro power and wind.36

The risks of the development of the individual branches are met by HTI not only through permanent analyses and evaluation of current economy- and market reports, but also through intensive research- and development, the introduction of new products and a group-wide sales offensive. By improving customer relations the quality of long term business relation-ships and the reaction speed to changed customer demands shall be increased.

cOmPANY sTRATEgIc RIsKs

In the course of a long-term and future oriented strategy the HTI group has specialized on the technologies Lightweight Construction, Engineering and Energy Technology, focusing on value addition made in Europe. Generally, there is always the risk of wrong anticipation of market development or wrong technological development. The HTI Group meets these risks through intensive observation of both market and competition and regular strategy talks with customers and suppliers for identification of the appropriate demand. In the field of research & development there is generally the risk for wrong development and exceeding of budget through increased startup costs for new products as well as postponed market introduction of innovations. This risk is met by careful examination of all investment projects and conclusion of development partnerships with customers, suppliers and universities. Also, in regards to new product development the HTI Group starts an intensive sales- and training offensive in order to establish innovations at the market. vast presence at trade shows in the important markets and active distribution partner care are further major fo-cuses of the HTI sales program.

Experts anticipate an increase in primary energy demand by around one third until 2035

Minimization of general risks by intensive surveil-lance of markets and competition

33 Cf. Handelsblatt, „Stahlindustrie: Auf in die Schwellenmärkte‘, March 07, 201234 Cf. International Energy Agency, World Energy outlook 2011 factsheet, www.iea.org35 Cf. International Energy Agency, World Energy outlook 2011, summary, www.iea.org36 Cf. International Energy Agency, World Energy outlook 2011, summary, www.iea.org

AnnuAl RepoRt 2011


51

OPERATIVE RIsKs

Generally all potential orders are subject to a feasibility study. potential customers are examined by means of credit assessments. one significant element during quotation phase is the correct cost calculation based on the technical specification. Further, country- and other risks are included in the calculation. In order to avoid exchange rate risks, customers- and supplier contracts are concluded in Euro. For complex contract designs lawyers are being consulted. prior to submittal, each offer goes through an internal permission process. operative financial risks are covered by branch specific insurance programs due to the si-milarity of the characteristics of the projects. The status of current orders is discussed in regular meetings, in order to observe the production status of each order, whether it being on schedule or whether to implement correction measures if required. The compliance to the calculated costs is examined by regular target-performance analyses.

wORKFORcE RIsKs

The competency and the motivation of the employees are ultimate factors for the success of the HTI Group. Workforce risks mainly arise from the fluctuation of employees in key positions as well as from the general demand in employees of all qualifications. The HTI Group meets this risk with attractive integration- and training programs, in order to secure workforce development within the Group. By means of training programs the HTI Group adjusts to the constantly changing demands and secures continuous know-how development of each employee, in doing so making the employees commit to HTI. More than that, the HTI Group offers good career chances, domestic as well as abroad. Risks from termination are met by prophylactic contract design as well as through agreements with the claimants. Further, salary increases due to collective agreements may have significant effects on the cost structure of individual companies, belonging to the Group. Since such costs increases cannot be forwarded to the customers, it is the objective to meet this risk through approp-riate efficiency increase programs.

FINANcIAL RIsKs

Some of the central responsibilities of HTI AG are the optimization of the Group’s finances and the limitation of the financial risks. HTI AG supervises and controls liquidity by means of planning- and control systems as well as through financial instruments if needed. An in-depth description of the financial risks, the capital management as well as the primary and derivative financial instruments, used in the company, can be found in chapter vI of the Annex to the annual financial report as of December 31, 2011.

Actions for minimization of operative risks

Workforce- and know-how development through

attractive integration- and training programs

Monitoring of liquidity through forecast- and

control systems

AnnuAl RepoRt 2011

52

LEgAL RIsKs

Risks from legal disputes which might have significant impact on the economic situation of the HTI Group are currently neither threatened with nor existent. Warranty- and product liability may lead to compensation- or injunctive claims. The companies of the HTI Group meet this risk through utmost care with the development and production of products and with the design of contracts as well as with being appropriately insured, wherever pos-sible and sensible.

OTHER RIsKs

IT risks result from the possibility of network- and system breakdowns or that data may be destroyed or falsified through operator- and program faults or external impacts. The infor-mation-technological risks are met by the HTI Group through regular investments in hard- and software, the use of virus scanners, fire wall systems as well as entry- and access controls. Currently, in various areas SAp systems are being implemented. In order to avoid risks, arising from new or integrated systems and to avoid additional costs, the company works with a tight project management. The standardization and harmonization of the sys-tems is an integral part of the risk management in this area.

INTERNAL cONTROL sYsTEm (Ics)

After the internal control system (ICS) of the HTI Group having been strongly decentralized, a standardized tool for documentation of ICS was developed in the business year 2010. This documentation tool contains all relevant processes (like accounting, controlling, procure-ment, sales, IT, HR, order execution, etc.) and is used in all individual companies belonging to the Group. In this tool the already implemented controls – like keeping to the 4-eye prin-ciple, the safeguarding of the workforce being qualified, necessary separations of functions or existing application controls – are documented and forwarded to HTI on a regular basis. The responsibility for complying with the appropriate controls - if needed via the implemen-tation of correction measures as well as via the safeguarding of the appropriate documen-tation - principally lies with the process responsible persons. Also the ICS documentation in the sense of the 4-eye principle is checked by one additional person.

A full documentation of ICS within the Group meanwhile does exist. The main objectives are now the further development of ICS; an appropriate exchange of information within the Group as well as holding further ICS related workshops.

Utmost care in regards to product development and contract design

IT: Risk avoidance through regular investments in hard- and software as well as security technology

Standardized tool for documentation of internal control system contains significant processes in all companies of the Group

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The results, gained from the use of the documentation tool, in regards to Group-wide func-tion and effectiveness of ICS are also brought to the attention of the Supervisory Board in regular intervals.

The functionality of ICS within the accounting related processes is safeguarded both pro-cess- as well as system wise. on operative level SAp is already in use by the majority of the individual companies, for consolidation HTI AG uses the consolidation data base “IDL-konsis” as information tool. This system enables the collection of various target and actual data, in order to document, aggregate, analyze and compare them. Analyses can be estab-lished in this system. The reporting to Management Board, Supervisory Board as well as external information receivers is a result of the information extracted from this data base. Substantial controls within the accounting processes of the Group’s individual companies contain for example the 4-eye principle, necessary separations of functions, collective au-thority for signature, and clear distribution of responsibilities within the accounting and controlling departments or the safeguarding of the appropriate qualifications of the work-force. These companies are supported by HTI AG, for example by means of a Group Manual, which is permanently updated and adjusted to legal and organizational changes or through corporate guidelines referring to accounting processes, which must be kept by the indivi-dual companies.

OVERALL sTATEmENT REgARdINg THE gROUP’s RIsK sITUATION

The main risks of the HTI Group concern the stipulated economical risks, conscious hand-ling of the branch- and production lists as well as funding of working capital and growth.

IKS on process- and system level

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Innovations are the drive for growth and competitiveness and hence a strategic instrument for our company’s success. Consequently, research and development are given a high pri-ority by HTI. The objective of our research- and development activities is to keep increasing the surplus value of our products, beneficially to our customers. Based on the demands of our worldwide customers we realize technologically sophisticated products at a competiti-ve price. Thus we create the precondition for a sustainable diversification from our compe-tition.

HTI disposes of a superordinated team for technology- and information management which searches for new trends in order to be able to flexibly and timely react to the demands of the market. This is done on the individual companies’ level as well as in the course of a superordinated team. The focus of this research group is set on the definition of new pro-ducts, which are further developed with the existing technological know-how by balancing the aspects economy, ecology and ergonomics. This cross-engineering, understood as combination and further development of technologies for the creation of new products enables us to further develop technological competencies to become one common exper-tise in order to enhance the product ranges in the segments Lightweight Construction, Engineering and Energy Technology towards becoming a total package. This increases ef-ficiency and cuts costs. The development process is often done in cooperation with customers so that individual customer demands are considered with the optimal ratio of quality and costs. Through this close cooperation internal and external know-how is being linked to-gether efficiently. Also in future close cooperation with universities and research facilities will be continued. By this, the latest information and impulses of the economy can be used to further develop products and services.

LIgHTwEIgHT cONsTRUcTION

The segment Lightweight Constructions combines plastics- and aluminum processing under one organizational roof and processes both materials to become composite parts. The target markets of this segment demand intelligent product solutions in lightweight design, resulting in lower energy consumption at higher performances.

The applications of plastics are almost unlimited. plastics, due to their unique characteris-tics and their ability for easy combination with other materials like aluminum, is used almost everywhere. Mostly because of the lower weight of plastic parts in comparison to other materials and the consequent savings in energy, plastic products became a great success in the automobile- and aviation industry during the past decade. This importance will further increase – as well as the grade of complexity. Apart from the factor weight the simple hand-

R&D is one of the key issues of our strategy

Increasing the additional product value for our customers: Harmonization of economy, ecology and ergonomics

Exchange of know-how between universities, research institutions and industry

Lightweight materials: Plastics and aluminum

REsEARcH, dEVELOPmENT ANd INNOVATION

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ling of plastic products is an important factor for the decision to use plastics. As for the material aluminum – it is still the trend to purchase simple and easy cast parts from low-cost countries. More complex and larger parts shall also in future be produced in Western Eu-rope. The future supplier is characterized by tight process chains with high value creation. The increased adoption of development work by the sub suppliers secures the orders of tomorrow.

In the year under review the process of creating a central development competency that had been started already in 2010, was continued under the common roof HTM High Tech Mate-rials. The innovative market chances of this cooperation on one side lie in the fact that HTI is now the ideal partner for substitution of one material through another, i.e. to manufacture a lightweight part of plastics instead of aluminum, since HTM High Tech Materials disposes of the technology to carry out this transformation at a high quality level as well as the know how to competently accompany the customers during the whole process. on the other hand specific solutions in the field of composite technologies can be offered due to the cross-technology production possibilities, i.e. if composite materials of aluminum and plastics are in demand.

ENgINEERINg

In the year under review three product novelties of the segment Engineering were the center of the strategic interest. In the field of special machines for the pig iron- and steel industry the research- and development company has brought a new generation of tap hole equipment to market maturity in autumn 2011. This tap hole equipment is used for drilling a hole into the fur-nace, so that the melted pig iron can be extracted. Based on the customer’s demand to create the tap hole equipment easier to maintain as well as stretching the life cycle of wear parts, this new generation of tap hole equipment was developed. Easy maintenance for example was achieved through simpler handling: While with the older models mostly the whole machine had to be dismantled for maintenance, now various service works can be carried out at the mounted equipment. For this purpose a new protection cover was developed, which disposes of individual doors directly at the key positions of the equipment. This comfortable access immensely shortens service times. More than that, additional functions were integrated, which quite substantially increase the life cycle of wear parts. Also existing customers benefit from these novelties, since all older models can be ret-rofitted towards this standard.

The segment ‘pneumatic hammers’ in the year under review has developed a completely new hammer, the BH9. The novelties of this hammer, which is available in various different models, mainly lie in its weight and its modular design. Depending on the type the BH9 weighs between 11 and 15 kgs – normally such hammers weigh more than 18 kgs. The

HTM High Tech Materials combines technology, know-how and quality

New generation of tap hole equipment: maintenance

friendly and durable

New pneumatic hammer: less weight and modular design

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56

flexible hammer meets the demands of the individual user. Depending on whether the hammer is used in the construction industry or in quarries, it is available in low vibration or fixed design. The first is suitable for drilling downwards over a long time; the fixed type allows drilling in all directions. The water rinsed type of the BH9 is used wherever the inhalation of quartz contaminated dust bears the danger of silicosis or other respiratory diseases, like mainly in underground mining. The dust particles are bound and cannot be inhaled anymore. For all other purposes, like for example facade construction or natural stone extraction, the air rinsed version is used. The hammer can either be handled ma-nually or mounted on a support construction or integrated into housing. This also enables part- or fully automatic drilling. Since also the impact system was newly designed, the BH9 is especially long lasting, low in maintenance and high in performance. As of the second quarter 2012 this hammer will be available for purchase.

Also the segment extrusion equipment in 2011 invested in research and development and introduced the stand-alone vacuum aggregate, an additional feature to the oMNIA extru-sion line, developed in 2010 – with which also already existing calibration tables can be retrofitted. Consequently, the vacuum system already integrated in the oMNIA calibration table is now also available as a stand-alone version. Fitting the predecessor models as well as models of other producers, this new system comes with impressive results in energy savings. With its frequency controlled pumps, three vacuum- and two water pumps, this vacuum aggregate can save up to 80% in energy consumption, compared to conven-tional calibration tables. The use of more pumps beyond that secures a high grade in production safety. Due to the modular installation it is also possible to customize the performance. During test operation the oMNIA vacuum aggregate has mainly convinced due to it matching all existing tools. Through its especially lean design it can be smooth-ly placed between the lines.

ENERgY TEcHNOLOgY

Apart from the development of order related innovations for solving customers’ problems the segment Energy Technology in the year 2011 successfully accomplished their research & development activities in the field of ground power supply of parking aircrafts. In october 2011 the newly developed models D poWER and S poWER were introduced to the market at the internationally leading airport show ‘Inter Airport Europe’ in Munich.

With the diesel powered ground power supply unit D POWER the project team had created a completely new generation of diesel powered ground power units in only 6 months. After five years, the target was to have the existing diesel GpU undergo a reengineering- and redesign process to increase the performance grade of the equipment with at the same time cutting the overall operation costs at a higher level of environmental- and user friendliness. The diesel motors of the D poWER do not only comply to the exhaust regulations ‘CoM 3A/B’ for Europe and ‘Tier 4 interim’ for the US, with the reduction of the rpm from 1,846 to 1,500

Up to 80% less energy-and water consumption due to new vacuum aggregate

Diesel powered ground power supply D Power: quiet and low in fuel consumption

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rpm this diesel powered ground power supply enables savings in fuel and is quieter in ope-ration. Besides, the D poWER is lighter and more corrosion proof than the predecessor model, because the main material used for base frame and connection parts is the light-weight material aluminum. Also the new control ‘powerCon’ is an innovation with touch screen. This technology until now has never been used by the competition due to the high demands. The D poWER touch screen can be used with temperatures of -30°C to +60°C, it is moisture- and vandal proof. Another highlight are the LED signal lamps. The control by means of powerCon allows various status signals to be displayed optically. Hence, the airport maintenance crew is informed about the status of the D poWER from a distance of some hundred meters, without it being necessary to have somebody on site.

The static ground power supply S POWER was also introduced to market at the Inter Airport Europe after an 18 month development phase. Top priorities for this new development were economic efficiency through lower energy consumption, operation safety and optimal main-tenance through remote maintenance as well as maximal flexibility through modular design and compatibility of the individual components. The development of the S poWER was of significant importance since modern airports already today require ‘static ground power supply’ in their tender documents for new- and extension projects. The advantages of the static power supply lie in their economic efficiency. Apart from that they are environmentally sound since they are almost free from emissions. one unique feature of the S poWER is the compact design. With one single unit this GpU achieves a performance of up to 180kvA, unlike competitors’ models, which need two units. Additionally, the S poWER comes with so-called poWER Stacks: They are inserts with a performance of 36kW that can be used variably, according to demand with 36kW, 72kW or 108 kW. This plug&play system works similar to changing a mobile phone battery. Not least this S poWER with touchscreen is characterized through high user comfort, which is made possible by the intuitive navigation. The first S poWER units will be shipped mid 2012.

The HTI Group will also in the future invest in research and development to safeguard the technological advantage and hence a substantial competitive advantage. This way, the HTI Group shall become a technologically preferred supplier who brings cost-efficient, reliable, productivity increasing and trendsetting product solutions to market maturity.

Static ground power supply S POWER: low in

energy consumption and environmentally sound

R&D investments safeguard technological leadership

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Workforce distribution 2011

Support of workforce motivation and identifica-tion with the company’s targets through remunera-tion system depending on success

As of December 31, 2011 HTI employed 1,504 members of staff, thereof 524 employees, 950 workers and 30 apprentices (last year: 1,512 members of staff, thereof 501 employees, 971 workers and 40 apprentices). In the course of the business year 2011 the number of mem-bers of staff declined by 8. In the year 2011 the number of members of staff on average was 1,526 (last year: 1,501). Better results led to an increase in revenues per member of staff from TEUR 129 to TEUR 136 and in operative performance per member of staff of TEUR 134 to TEUR 141.

By end of the year 2011 1,178 members of staff worked for our domestic companies and 326 members of staff for our foreign companies. These 1,504 members of staff consist of 1,135 men and 369 women (last year: 1,143 men, 369 women).

ENTREPRENEURIAL THINKINg ANd wORKFORcE mOTIVATION

Motivation of staff and identification with the company’s objectives are encouraged by HTI by means of remuneration systems, which reward individual performances, if the targets are achieved through variable, success dependable income parts. Further elements of workforce motivation are safety at work and health protection, which are central factors of our value added chain. professionally qualified staff (internal and external safety experts) check and document the current status of safety at work in the various companies in regu-lar intervals and – if necessary – implement the appropriate measures to minimize the risks in regards to safety at work and health management. If accidents happen despite all efforts, we carefully study the cause so that events like these can be avoided in future. These mea-sures contain technical improvements as well as more effective trainings for employees and their superiors.

our initiatives in regard to safety at work and health management however are not limited to avoiding work related health risks, but also include the general health condition of our employees as well as the strengthening of the individual health resources. Hence, not only first aid training courses and recurring safety trainings, but also for example vaccination offensives for our employees are offered by HTI.

wORKFORcE

Apprentices

Employees

workers

30

950

524

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59

QUALITY ANd FURTHER EdUcATION

The encouragement of our human capital is one key factor of the company’s success. Fol-lowing our decentralized structure “human resources“ are the responsibility of the indivi-dual companies, however, the personnel policy for managers are centrally coordinated. Here we focus on identifying talented staff in order to create a work environment which enables them to develop their skills as best as possible and for the company to benefit of this as much as possible.

The individual companies of the HTI Group support the development of their staff by means of targeted further education- and training measures. In the year under review massive trainings in the course of the Group-wide SAp introduction were held. Hence, all business processes like sales, logistics, production, procurement, controlling and accounting can be optimally executed and a smooth, location- and time independent cooperation of employees, customers and partners can be secured. Apart from that investments were made in general qualifications like foreign languages and computer skills. Targeted training programs for qualified workers were held in the business year 2010, so that know-how and expertise of the staff is continuously developed and the performance of the whole company is enhanced. In the technology intensive segments Engineering and Energy Technology the training of junior specialists is of major importance. Here, focus is set on intensive training of appren-tices, who also have their own training centers in Linz and Micheldorf. In the course of this training program the specific qualifications as well as general knowledge and social com-petencies are being trained. The subsequent takeover of the qualified apprentices into a fix working relationship is considered to be an integral part of the practiced apprentice offen-sive and basis for a long term safeguarding of qualified workforce. Each apprentice who finished their training has got the chance to qualify for a challenging job in the company.

dIVERsITY

HTI supports a corporate culture that allows and appreciates diversity. This is why we en-sure that the share of female and international staff is increased in all areas and hierarchi-cal levels. part of this is to identify and remove barriers in order to provide all members of staff with equal, only on performance and potential depending career opportunities.

We encourage and support our employees

We encourage diversity

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HTI understands economy as an integrated part of our society. This is also expressed by our vision. We want to enrich our society and economy with the research and use of new tech-nologies. With strong entrepreneurial thinking and the determination to make the substan-tial become the sustainable we strictly follow our philosophy “Creating values with Future”. By striving to harmonize the aspects economy, ecology and ergonomics we make our contribution to the creation of demand- and environmentally compatible product solutions. In order to master these challenges we combine technological innovation and strong cus-tomer orientation with the competency of our workforce.

Hence, for us commercial activity is as important as striving for the optimal achievement in meeting ecologic and ergonomic demands – all of this in social balance. We take our res-ponsibility towards our stakeholders seriously and aim our behavior towards a responsible- and respectful partnership with customers, workforce, investors, business partners as well as the public.

ENVIRONmENTALIsm

With our product range we contribute towards the increase of energy efficiency and the reduction of Co2 emissions. Especially the segments Lightweight Construction and Energy Technology portray the striving of the HTI Group to support a sustainable and environmen-tally protective development. The segment Lightweight Construction constantly works on the substitution of heavy materials with lighter composite parts, to make products lighter and hence more energy efficient and environmentally sound.The segment Engineering keeps working on the further development of mechanical engi-neering concepts in regards to the aspects ecology, economy and ergonomics. Hence, in the year under review a new vacuum aggregate was introduced to the market as a comple-ment to the extrusion line oMNIA which had been introduced to the market already in 2010. This new system shows impressive results in energy efficiency. With frequency controlled pumps, three vacuum- and two water pumps, the vacuum aggregate can save up to 80% in energy, compared to conventional calibration tables. The segment Energy Technology is generally to be seen as the segment that constantly works on new developments in the field of sustainable energy supply. Focus here is set on the further development of environmentally compatible technologies.

We harmonize economy, ecology and ergonomics and create values with future

HTI product range contributes towards environmental protection

cORPORATE sOcIAL REsPONsIbILITY

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Further, group-wide projects which support environmental actions concern the effective handling of energy and resources as well as the avoiding, recycling, reducing and the cost-effective disposing of waste. Apart from cost synergies the group-wide procurement opti-mization secures material selection according to social and ecologic characteristics. The Group itself minimizes the expenses for primary energy as well as for waste disposal through constant process optimizations. All companies, belonging to the HTI Group introduced pro-grams for waste reduction and recycling of raw materials, of which both economy and ecology benefit to the same extent. An optimization process of stock management resulted in a reduction of energy- and cost intensive special transports. In regards to new investments in machinery an increase of energy efficiency is considered to be a major criterion.

sOcIAL REsPONsIbILITY

Social aspects in the working environment and social commitment for people in need are the pillars of our social responsibility. By way of training programs, improvements of working conditions and joint activities we are constantly trying to provide our workforce with an at-tractive and social working environment. people who suffer from disadvantages due to life circumstances and heavy blows are supported with financial help. Hence, every year HTI holds a Charity Golf Tournament in favor of families and children in need.

The HTI Group keeps committing itself to a sustainable increase of the company value. Responsible management means to foresightedly safeguard a continuous and healthy company development. However, in this case, company growth is not the same as growth in size, but it is more a value- and future oriented growth, which respects social as well as local circumstances based on technological progress. The creation of economic, ecologic and ergonomic aspects as integrative parts of each other in appropriate balance remains the objective, which HTI is continuously working on.

Projects in regards to live environmental protection

Work environment adjusted to meet the

needs of our employees

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In the year under review the share capital of HTI High Tech Industries AG increased from EUR 29,644,954.- to EUR 45,583,944.-, split into 45,583,944 non-par value bearer shares with full voting power with a proportionate share amount of EUR 1.00 per share. The share capital of the company has been paid in full.

The increase of the share capital by a total of EUR 15,938,990.- was done in three tranches:

> In May 2011 a capital increase in kind in the amount of EUR 550,000,- was done by is-suing of 550,000 new non-par value bearer shares with full voting power, excluding share-holders’ subscription rights. Admitted were BkS Bank AG and volksbank Graz-Bruck e.Gen. Through these contributions in kind the share capital of HTI High Tech Industries AG in-creased from 29,644,954 shares with a proportionate share capital amount of EUR 1.00 per share and the hence connected 550,000 voting rights to 30,194,954 shares with a propor-tionate share capital amount of EUR 1.00 per share and the hence connected 30,194,954 voting rights. The capital increase in kind was entered to the commercial register of Linz on June 07, 2011.

> In June 2011 HTI High Tech Industries AG carried out a cash capital increase by issuing 6,038,990 new non-par value bearer shares with full voting power at a fixed subscription- and offer price of EUR 1.10 per share by keeping the direct subscription rights of the shareholders. The subscription ratio was 5:1, meaning that existing shareholders had the right to purchase one new share for EUR 1.10 for five old shares in their possession. The new shares, not purchased via subscription rights were offered to selected investors in the course of a private placement with a minimum purchase value of EUR 50,000.- per investor. The cash capital increase was done through part utilization of the authorized capital, as decided upon by the 12th Annual General Meeting, held on June 30, 2010. As a result of these equity actions the share capital of HTI High Tech Industries AG increased from 30,194,954 shares with a proportionate share capital amount of EUR 1.- per share and the hence connected 30,194,954 voting rights by 6,038,990 shares with a proportionate share capital amount of EUR 1.- per share and the hence connected 6,038,990 voting rights to 36,233,944 shares with a proportionate share capital amount of EUR 1.- per share and the hence connected 36,233,944 voting rights. This cash capital increase was entered to the commercial register of Linz on July 05, 2011.

> In August/September 2011 HTI was ordered with the implementation of the conversi-on of the hybrid conversion bond (ISIN AT0000A0Nv11) in the amount of EUR 9,500,000.-, held by oberbank AG, Raiffeisen-Landesbank Steiermark AG, Raiffeisenlandesbank oberösterreich Aktiengesellschaft, Raiffeisen Bank International AG („RBI“) as well as volksbank Graz-Bruck e.Gen, which was issued at the turning of the years 2010/2011 in

Increase of share capital to EUR 45,583,944.–

Three equity actions

Contribution in kind: EUR 550,000.–

Cash capital increase: 6,038,990 new shares at a price of EUR 1.10 each

Contingent capital increase: EUR 9,350,000.– of the hybrid conversion bond were converted

HTI sHAREs, POsITION OF sHAREHOLdERs ANd cHANgEs IN THE ARTIcLEs OF AssOcIATION

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the course of the restructuring of the Group’s financing, of which a nominal amount of EUR 9,350,000,- was converted. This equity action was successfully concluded in Decem-ber 2011. As a result, the share capital of HTI High Tech Industries AG increased from 36,233,944 shares with a proportionate share capital amount of EUR 1.- per share and the hence connected 36,233,944 voting rights by 9,350,000 shares with a proportionate share capital amount of EUR 1.- per share and the hence connected 9,350,000 voting rights to 45,583,944 shares with a proportionate share capital amount of EUR 1.- per share and the hence connected 45,583,944 voting rights. This contingent capital increase was done by part utilization of the contingent capital as agreed upon in the course of the 13th Annual General Meeting, held on June 28, 2011.

sEcURITIzATION, VOTINg POwER ANd sIgNIFIcANT sHAREHOLdERs

All shares are represented in variable global certificates which are kept in custody by the „oesterreichischen kontrollbank Aktiengesellschaft, Am Hof 4, A-1010 Wien“ as a central depository for securities. Certification of individual shares is excluded by the Articles of Association. As of date of statement of financial position 6,038,990 pieces of the 45,583,944 issued shares were not yet admitted to trading at the vienna Stock Exchange. These shares were admitted to trading at the vienna Stock Exchange in January 2012, resulting in all issued share being admitted to trading at the vienna Stock Exchange. The ISIN of the sha-res is AT0000764626.

Each share represents the right to participate in the Annual General Meeting and to exer-cise the voting right, whereas each share represents one vote. Hence, no shareholder disposes of special control rights.

According to information at disposal of the company, Astor Industriebeteiligung GmbH and Astor privatstiftung as of December 31, 2011 jointly dispose of 10.86% of share capital and voting rights. Glatzmeier Beteiligungs GmbH, Murtal-Golf Errichtungs- und Betriebs-GmbH and the CEo peter Glatzmeier as of December 31, 2011 jointly dispose of 10.97% of share capital and voting rights. ABCMN vermögensverwaltungs GmbH as of December 31, 2011 disposed of 8.27% of share capital and voting rights. The above mentioned shareholders can be regarded as HTI management. The HTI management as of December 31, 2011 jointly disposed of 30.10 % of share capital and voting rights.

The shares of RLB Steiermark by end of the year 2011 amounted to around 12%. The re-maining shares were in free float. Since the date of the statement of financial position

Shareholder structureas of December 31, 2011

HTI management

RLb steiermark

Freefloat

in %

30

5812

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there were no significant changes in the shareholder structure, as far as Management – and Supervisory Board were informed. Also, no reportable facts according to §243 (a) UGB exist. In the event of change of control all members of the management board are entitled to resign from office with immediate effect (all members appointed until end of 2016).

cHANgEs IN THE ARTIcLEs OF AssOcIATION

In the year under review various decisions in regards to equity actions were taken.

According to the resolution of the Management Board as of May 02, 2011 and after appro-val through the Supervisory Board of the company on May 17, 2011 and after part utilizati-on of the contingent capital according to item 4.4 of the currently valid version of the Artic-les of Association the share capital of the company was increased by EUR 550,000.-. Consequently an authorized capital in the amount of EUR 13,950,000.- exists, which can be utilized by issuing up to 13,950,000 non-par value bearer shares with full voting power according to the stipulated conditions as per item 4.4 first paragraph of the currently valid Articles of Association.

According to the resolution of the Management Board as of June 27, 2011 and after appro-val through the Supervisory Board of the company on June 27, 2011 and after part utiliza-tion of the contingent capital according to item 4.4 of the currently valid version of the Articles of Association the share capital of the company was increased by EUR 6,038,990.-. Consequently an authorized capital in the amount of EUR 7,911,010.- exists, which can be utilized by issuing up to 7,911,010 non-par value bearer shares with full voting power ac-cording to the stipulated conditions as per item 4.4 first paragraph of the currently valid Articles of Association.

In the course of the 13th Annual General Meeting, held on June 28, 2011 according to item 4.3 b) of the currently valid version of the Articles of Association a contingent capital incre-ase according to § 159/2 Z 1 AktG ivm §§ 161 ff AktG of up to EUR 9,500,000.- by issuing up to 9,500,000 non-par value bearer shares with full voting power against contributions in kind for satisfaction of the creditors of the debenture bonds (ISIN AT000A0Nv11) accor-ding to § 174 AktG, which was issued with a conversion right based on the approval of the Annual General Meeting, for up to 9,500,000 non-par value bearer shares with full voting power with a proportionate share capital amount of a total of EUR 9,500,000.- was decided upon. The contingent capital increase shall only be carried out to the extent of the above mentioned creditors of the company exercising their conversion rights of the issued de-benture bond (ISIN AT000A0Nv11) at an exercising price of EUR 1.- per share. The newly issued shares of the contingent capital increase bear the same rights for dividend payments as the already existing shares of the company. The Supervisory Board has the right to pass

Annual General Meeting passed various resolutions for equity actions

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65

resolutions in regards to changes in the Articles of Association, made necessary through the issuing of shares from the contingent capital. Due to the exercision of conversion rights by the creditors of the debenture bonds (ISIN ATA0Nv11) according to § 174 AktG in August/September 2011 under utilization of the contingent capital the share capital of the compa-ny was increased by EUR 9,350,000.-. Consequently the contingent capital was reduced from EUR 9,500,000.- to EUR 150,000.-.

Further, the 13th Annual General Meeting, held on June 28, 2011 decided upon the fact that according to item 18.2 of the currently valid version of the Articles of Association, Annual General Meetings may also be held at the headquarters of the company, an Austrian pro-vincial capital city or in St. Marien, Leonding, Fohnsdorf, kapfenberg, korneuburg, Michel-dorf or Neudörfl.

EVENTs AFTER THE REPORTINg PERIOd

In the year 2010 the company discussed and implemented a restructuring of the Group’s finances with their financing partners based on a mid-term forecast. Due to the development of earnings, the investments and especially the increase in working capital in 2011 and at the beginning of the year 2012 it had been made necessary to lead discussions about the funding of these capital requirements with the existing financing partners. In April 2012 the company was able to reach an agreement with RLB Steiermark as their pool leader for covering the pending financial obligations, including new credits and prolongations in the amount of EUR 12 million with a main maturity of 1 to 2 years. In the course of the Group’s and the financing management however, the Group is required to strengthen their intrinsic funding capabilities in order to be able to fulfill their funding obligations for the forecasted growth as well as the intended investments and actions for optimization primarily on their own without having to involve their financing partners. Hereto the company permanently evaluates the Group’s structure and strategic positioning of the individual Group companies, in order to be able to realize possible positive effects for the whole Group.

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66

For the year 2012 the growth prognoses for the global economy according to IMF is expected to be 3.3%. The GDp of the Western Industrial Countries according to the IMF shall increa-se by 1.2%. While the US shall manage an increase of 1.8% according to estimations, the economy in the Euro zone is anticipated to decline by 0.5%. An economic growth for the developing- and emerging countries of 5.4% is estimated by the IMF for 2012.37 For Austria the experts anticipate only a slow growth of 0.4%, since Austria is also subjected to the declining domestic demand within the Euro zone as well as the declining dynamics of the global economy.38

The segment Lightweight Construction for 2012 expects a continuation of the positive de-velopment. The demand of a number of customers became more short-termed and more volatile and has to be examined in regards to a new call forward situation on a regular basis. The sales department benefits from the work of the previous years and receives more in-quiries and developing orders. The strengthening of the market position under the common trade mark „HTM High Tech Materials“ and the future technology Lightweight Construction will remain the center of attention in the year 2012. HTI here has to keep the focus set on finding further weight saving potentials. Innovative production concepts are of great impor-tance for receiving new projects. The center of the strategic interest is mainly the further use of synergies within the individual locations.

The segment Engineering reports on pleasant incoming order figures in the field of pneu-matic hammers. Also the field of special machines for the pig iron- and steel industry expects a rapid development mid- and long term, especially in the BRIC states, since the demand in steel for transport and the construction industry will further increase. As for the extrusi-on equipment the incoming orders at the beginning of the current business year fell short of expectations. This however was compensated by the expected orders for the first half year 2012. Short- and mid term ongoing rapid growth in the field of pipe extrusion is expected in India. Mid term also an entry of India into the window profile extrusion has to be expected. In order to react to both trens time and to serve the customers optimally, an extension of the local production in India is planned. More than that, the first success in the newly con-quered markets South-East Asia and South America is expected. In some of the emerging countries, relevant for the sale of extrusion equipment however, an increasing level of protectionist measures can be observed, causing the companies even more problems, be-sides the already existing necessity of supporting the customer with getting the appropria-te funding.

IMF anticipates a global growth of 3.3% for 2012

Segment Lightweight Construction: increased number of inquiries and development orders

Segment Engineering: Pleasant situation for pneumatic hammers and special machines, extrusion equipment still challenging

37 Cf. IWF, World Economic outlook Update, Jan. 201238 Cf. WIFo, ‘prognosis for 2012 and 2013: Sovereign debt crisis grips real economy, Dec. 19, 2011’ as well as ‘Reluctant economic recovery after decline in 2012’, Jan. 20, 2012

OUTLOOK

AnnuAl RepoRt 2011


67

The segment Energy Technology expects a stable business environment for 2012. The order level in the first few weeks of the current business year lies significantly above plan. In the business year 2012 this segment will be devoting a lot more attention to the further deve-lopment of USv equipment, in order to ensure decisive advantages in the market for them-selves. More than that, sales activities are being enforced and target oriented measures for customer retention are implemented in order to acquire further projects. Currently it is also intensively worked on the relocation of the factory, scheduled for end of 2012. This relocation in combination with the introduction of a new generation of USv equipment will allow the segment Energy Technology, to be awarded with further large orders and to execute them with best possible quality. Against the background of the current boom in the field of hydro power this segment anticipates also stable growth for alternators and hydro power plants. Despite the current macro economic uncertainties the HTI management is in a quite posi-tive mood due to the current order situation for 2012. Nonetheless we are aware of the possible rapid changes that may occur in regards to the economic development. Conse-quently, we have established various action packages, based on a variety of possible scena-rios that can be implemented quite quickly if neccessary.

Basically, due to improved cost structures, higher operational flexibility and the improved capital adequacy HTI is in the position to more easily smooth over short term economic declines as it had been the case in the crisis years 2008 and 2009. The mid term objectives, to generate revenues over 200 million Euro with an EBIT margin of around 4% and to redu-ce the Group’s debts remain unchanged.


The Management Board of HTI High Tech Industries AG

peter Glatzmeier m.p.Nikolaus kretz m.p.

Segment Energy Technology expects stable

business environment

14 OUR cOmPANY



cONsOLIdATEd sTATEmENTsOF FINANcIAL POsITION

70 Income Statement

71 Statement of Financial position

72 Statement of Cash Flow

73 Statement of Changes in Equity



AnnuAl RepoRt 2011

68

CoNSoLIDATED STATEMENTS oF FINANCIAL poSITIoN

TEUR

Revenue

Changes in finished goods and work in progress

own work capitalised

Total gross income

Material expenses

personnel expenses

other operating expenses

other operating income

Results from associated companies

Operative earnings before interest, tax, depreciation and amortisation (EBITDA)

Depreciation, write-ups & amortisation

Operative earnings before interest and tax (EBIT)

Interest result

Results from associated companies

other financial result

Financial result

Earnings before tax

Income tax


thereof earnings of non-controlling interests

Net result attributable to the parent company

Earnings per share (in EUR) undiluted

Earnings per share (in EUR) diluted

Dividend suggested or paid per share (in EUR)

Weighted average number of shares

1.1. -

31.12.2011

206,991

1,196

7,655

215,842

-103,168

-74,887

-30,173

6,009

1,076

14,699

-10,633

4,066

-5,529

-214

-638

-6,380

-2,314

90

-2,224

59

-2,284

-0.07

-0.06

0.00

33,730,619

Notes

1

2

3

5

5

11

4

6

11

7

8

9

1.1. -

31.12.2010

193,006

4,504

3,523

201,032

-96,517

-70,790

-27,785

5,566

1,984

13,489

-10,582

2,907

-6,666

-278

58

-6,886

-3,979

49

-3,930

386

-4,315

-0.15

-0.15

0.00

29,644,953

INcOmE sTATEmENTfor the year ended 31 december 2011

Notes

9

TEUR


Currency translation differences

Costs of capital increase

Deferred taxes, included in equity

others

Other comprehensive income

Total comprehensive income after tax

thereof comprehensive income of non-controlling interests

thereof comprehensive income of the parent company

1.1. -

31.12.2011

-2,224

190

-539

123

0

-226

-2,451

59

-2,510

1.1. -

31.12.2010

-3,930

86

0

0

150

236

-3,694

386

-4,080

sTATEmENT OF cOmPREHENsIVE INcOmE for the year ended 31 december 2011

AnnuAl RepoRt 2011

70

TEUR

ASSETS

Intangible assets

Goodwill

property, plant & equipment

Investments in associated companies

other financial assets

other non-current receivables

Deferred tax assets

Non-current assets

Inventories

Receivables

Receivables from construction contracts

Receivables from affiliated and associated companies

Cash and cash equivalents

other current receivables and assets

Assets held for sale

Current assets

Total assets

EqUITy AND LIABILITIES

Share capital

Capital reserves

Retained earnings

Subordinated convertible bond and mezzanine capital

Deviations from currency conversion

Non-controlling interests

Equity

Subordinated loan funds

Liabilities for employee benefits

Deferred tax liabilities

other non-current provisions

Non-current interest bearing liabilities

other non-current liabilities

Non-current liabilities

Current interest bearing liabilities

Accounts payable and prepayments received

Tax provisions

other current provisions

other current liabilities

Current liabilities

Total equity and liabilities

31.12.2011

26,520

32,771

90,083

3,191

1,334

1,977

11,032

166,910

31,609

30,696

16,925

469

5,503

5,952

3,866

95,019

261,929

45,584

34,882

-64,661

24,500

327

179

40,811

6,961

9,039

934

170

93,387

10,085

120,576

42,964

33,076

9

3,368

21,126

100,542

261,929

Notes

10

10

10

11

12

15

13

14

15

15

15

16

15

17

18

18

18

18

18

18

18

21

19

13

20

21

21,22

21

22

20

21,22

31.12.2010

20,025

32,771

93,006

2,043

1,886

235

10,832

160,797

24,751

34,380

8,485

449

4,470

6,330

2,245

81,110

241,908

29,645

34,694

-62,329

33,850

137

2,306

38,303

6,961

8,888

1,077

149

96,954

13,166

127,196

23,136

25,161

2

5,845

22,265

76,409

241,908

sTATEmENT OF FINANcIAL POsITIONfor the year ended 31 december 2011

AnnuAl RepoRt 2011

71

TEUR

Earnings

Depreciation, write ups and amortisation

Movements in non-current provisions

profit/losses on the disposal of non-current assets

other non-cash movements

Tax

Gross Cash Flow

Movements in inventories

Movements in receivables

Movements in other receivables

Movements in short-term provisions

Movements in accounts payable

Movements in other liabilties

Cash Flow From Operating Activities

proceeds from disposal of assets

purchase of intangible assets and property, plant and equipment

payments of investments in financial assets

purchase of shares in affiliated companies

Net Cash Flow From Investing Activities

Movements in interest-bearing liabilities

proceeds from capital increase

other changes neutral to profit & loss

Dividends paid to minorities

Cash Flow From Financing Activities

Movements of Cash and Cash Equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

Movement

2011

-2,224

10,633

172

-2,548

-597

-220

5,216

-3,235

-4,557

-3,006

-2,471

4,292

2,161

-1,600

9,510

-21,167

0

-2,200

-13,857

10,430

6,104

0

-43

16,491

1,033

4,470

5,503

1,033

2010

-3,930

10,582

-166

-195

-333

82

6,041

2,502

-10,789

-2,955

-4,729

6,414

1,598

-1,918

6,297

-14,366

-12

0

-8,081

8,851

0

-113

-100

8,639

-1,360

5,829

4,470

-1,360

sTATEmENT OF cAsH FLOwfor the year ended 31 december 2011

AnnuAl RepoRt 2011

72

sTATEmENT OF cHANgEs IN EQUITYshare of HTI Ag shareholders

Shar

e ca

pita

l

Cap

ital r

eser

ves

Ret

aine

d ea

rnin

gs

Subo

rdin

ated

con

vert

ible

bo

nd a

nd m

ezza

nine

ca

pita

l

Diff

eren

ces

in c

urre

ncy

conv

ersi

on

Non

-con

trol

ling

inte

rest

s

Tota

l

Equi

ty to

tal

TEUR

Balance as of January 1, 2011


Dividend payments to non-controlling interests

Capital increase

Cost of capital increase

Deferred taxes, included in equity

Conversion

Disposal of non-controlling interests


Balance as of December 31, 2011

Balance as of January 1, 2010


Dividend payments to non-controlling interests

Subordinated convertible bond

and mezzanine capital

other changes neutral to profit & loss


Balance as of December 31, 2010

38,303

-2,224

-43

7,193

-539

123

0

-2,200

198

40,811

18,248

-3,929

-100

23,850

223

13

38,303

-62,328

-2,284

-49

-64,661

-58,070

-4,315

57

-62,328

29,645

6,589

9,350

45,584

29,645

29,645

34,694

604

-539

123

34,882

34,694

34,694

137

190

327

51

88

-2

137

33,850

-9,350

24,500

10,000

23,850

33,850

2,306

59

-43

-2,151

8

179

1,928

386

-100

78

15

2,306

35,998

-2,284

0

7,193

-539

123

0

-49

190

40,632

16,320

-4,315

0

23,850

145

-2

35,998

AnnuAl RepoRt 2011

73

14 OUR cOmPANY




FINANcIAL POsITION

NOTEs TO THE cONsOLIdATEd FINANcIAL sTATEmENTs

76 I. Business Description and Group Structure

79 II. Scope and principles of Consolidation

81 III. Accounting and valuation principles

90 Iv. Notes to the Consolidated

Income Statement

94 v. Notes to the Consolidated

Statement of Financial position

107 vI. Risks, Capital Management

and Financial Instruments

115 vII. Consolidated Cash Flow Statement

115 vIII. Segment Report

115 Ix. other Information

122 Appendix to the Notes to the

Consolidated Financial Statements

122 Appendix 1: Asset Analysis

126 Appendix 2: Segment Report

127 Appendix 3: Group Investments

129 Auditor’s Report

AnnuAl RepoRt 2011

74

NoTES To THE CoNSoLIDATED FINANCIAL STATEMENTS

AnnuAl RepoRt 2011

76

The holding company HTI High Tech Industries AG (‘HTI AG’ or ‘company’ resp. together with its affiliated companies ‘HTI Group’), located in St. Marien, is an international technological group of companies, active in the segments plastics- and metals processing and mechanical engineering, covering the market segments Lightweight Construction, Engineering and Energy Technology. The segment ‚others‘ serves as a platform for minority interests, matching the strategic orienta-tion of HTI.

Due to the massive declines in revenues and earnings in the years 2008 and 2009 as a result of the financial- and econo-mic crisis, the Group had to adjust itself to this fact. In the year 2009 HTI AG and the HTI Group negotiated an interest- and repayment moratorium with the pool banks, valid until the end of 2010. Further it was agreed upon a restructuring of the Group’s finances to be established and implemented, based on the development of the year 2010. In the basic agreement dd. December 2010 this restructuring was agreed upon and finally implemented end of March/beginning of April 2011. This restructuring was already portrayed in the consolidated financial statement as of December 31, 2010.

one significant part of the restructuring - besides the harmonization of the conditions and new structuring of the repay-ment periods - was the conversion of bank debts into equity effective bonds, i.e. the subordinated hybrid bond without fixed period in the amount of 8.55 MEUR (‘debenture bond 2011’) as well as the subordinated 9.5 MEUR hybrid conversion bond without fixed period (‘conversion bond 2011’). In the course of the implementation process bank debts in the amount of MEUR 13.5 were taken over by HTI from various companies. Beyond that conditions and repayment periods for neces-sary extensions of funding for working capital and investments were negotiated for the individual companies.

In December 2011 the pool banks of the HTI Group exercised their conversion rights of the conversion bond 2011 in the amount of MEUR 9.35.

The further existence of the Group and hence the balancing of accounts according to „Going-Concern“ depends on the success of the Group and on achieving the targets as stipulated in the mid-term plan. This is necessary in order to achieve and maintain increased repayment capability. Also financing in an appropriate amount has to be provided by banks in order to be able to meet the payment obligations. In regard to the necessary financing discussions with the creditors in April 2012, we refer to the statements of the Management Board in chapter Iv, item 32 (‘Events after the Reporting period’).

During the preparation of the consolidated financial statement a further existence of the Group and its various individual companies was expected.

I. bUsINEss dEscRIPTION ANd gROUP sTRUcTURE

AnnuAl RepoRt 2011

notes to the consolidated financial statements

77

The existing consolidated financial statements of HTI High Tech Industries AG, located in St. Marien were prepared accor-ding to the rules of the International Financial Reporting Standards (IFRS) as well as the interpretations of the Internati-onal Financial Reporting Interpretations Committee (IFRIC), as per regulations of the European Union. This consolidated financial statements according to § 245 a UGB replace the otherwise to be established consolidated financial statements according to §§ 244 ff UGB.

With the establishment of the existing consolidated financial report all standards, obligatory for the business year, were used. Standards and interpretations, already published and adopted by the EU, which are not yet obligatory to use were not used prior to necessity.

AmENdmENTs OF THE FINANcIAL REPORTINg sTANdARds

The IASB made resolutions on changes for the existing IFRS as well as some new IFRS and IFRIC, which were already taken over by the EU commission; hence, they are valid and their use is obligatory since Jan. 01, 2011. IAS 24 (rev. 2009) Related party disclosures IAS 32 (amendment) Changes regarding the classification of rights issuesIFRS 1 (amendment) Limited exemption from comparative IFRS 7 disclosures for first-time adopters IFRIC 14 (amendment) prepayments of a minimum funding requirement IFRIC 19 Extinguishing financial liabilities with equity instrumentsAmendments of the various IFRS as a result of the improvement process 2010

The first time application of the stipulated IFRS and IFRIC has subordinated impacts on the consolidated financial statements of HTI High Tech Industries AG as of Dec. 31, 2011, since the changes were only applicable in individual cases. No changes in the methods of accounting and evaluation did occur.

FUTURE AmENdmENTs OF THE FINANcIAL REPORTINg sTANdARds

The IASB and the IFRIC passed resolutions on further standards and interpretations, which are not yet obligatory to use for the business year 2011 resp. which are not yet taken over by the EU commission. They are concern following standards and interpretations:

AnnuAl RepoRt 2011

78

In view of the future application of the not yet adopted and by the HTI Group not yet applied standards resp. interpretations no substantial changes of recognized assets, liabilities and other stipulations in the consolidated financial statements are to be expected resp. the impacts on the newly applicable standards and interpretations on the financial and income situ-ation is not yet to be determined.

IFRS 7 Disclosure requirements for the transfer

of financial assets

IAS 1 (amendment) Description of facts and

circumstances in the other results

IAS 12 (amendment) Deferred taxes on real estate

held as financial investment

IAS 19 (rev. 2011) Employee benefits

IAS 27 (rev. 2011) Separate financial statements

IAS 28 (rev. 2011) Investments in associates

and joint ventures

IAS 32 (amendment) Balancing of financial assets

and liabilities

IFRS 1 (amendment) Hyperinflation and replacement of the

fixed conversion moment for the first time use of IRFS

IFRS 7 (amendment) Balancing of financial

assets and liabilities

IFRS 9 Financial instruments

IFRS 10 Consolidated financial statements

IFRS 11 Joint arrangements

IFRS 12 Disclosure of interests in other entities

IFRS 13 Fair value measurement

IFRIC 20 Stripping costs in the production phase

of a surface mine

EU Endorsement

1.7.2011

not yet adopted

not yet adopted

not yet adopted

not yet adopted

not yet adopted

not yet adopted

not yet adopted

not yet adopted

not yet adopted

not yet adopted

not yet adopted

not yet adopted

not yet adopted

not yet adopted

Application for business years that start

on or after the DATE (acc. to IASB)

1.7.2011

1.7.2012

1.1.2012

1.1.2013

1.1.2013

1.1.2013

1.1.2014

1.7.2011

1.1.2013

1.1.2015

1.1.2013

1.1.2013

1.1.2013

1.1.2013

1.1.2013

AnnuAl RepoRt 2011


79

The consolidated financial statements are presented in EUR. Numerous figures and percentages have been rounded in the consolidated financial statements. Accordingly, totals may deviate somewhat from the amounts shown. The consoli-dated income statement was complied according to the total cost method. In order to improve the presentation of the company‘s performance, certain items in the balance sheet, income statement and cash flow statement were grouped together. More detailed information is contained in Notes to the consolidated financial statements.

dETERmINATION OF THE scOPE OF cONsOLIdATION

The determination of the consolidated companies is done according to the rules of the IAS 27 (Consolidated Financial Statements and Accounting for Investments in Subsidiaries) in connection with the SIC - 12 (Consolidation - Special pur-pose Entities). The consolidated financial report consists – beside HTI AG – also of 18 domestic and 7 foreign subsidiaries, all of them based on their financial statements as of December 31, 2011, which are subjected to a direct or indirect influ-ence of HTI AG. An overview about these included and not included companies is stated in Annex 3 to the Notes to the consolidated statement.

cHANgEs wITHIN THE scOPE OF cONsOLIdATION

The first time consolidation of a Group company is done at the time of the takeover of control of property and business by the respective parent company; Deconsolidation is done at the time of loss of control.

In comparison to last year following changes were made to the group of consolidated companies: Through various measures for streamlining and simplification of the Group structures the number of included domestic companies reduced to a total number of 18 and the number of included foreign companies reduced to 7.

Information regarding business combinations:In January 2011 Elektromaschinenbau GmbH acquired a share of 20% of Hitzinger Gesellschaft mbH in Linz, so that it is now in possession of 100% of the shares.

The difference amount of TEUR 49 was posted against the Group’s equity.

mETHOds OF cONsOLIdATION

The individual financial statements of the domestic and foreign subsidiaries included in the consolidation were compiled as of the balance sheet date of the consolidated financial statements, audited by independent auditors and consolidated

II. scOPE ANd PRINcIPLEs OF cONsOLIdATION

TEUR

2,200

2,151

Share purchase

price

proportionate equity Hitzinger GmbH

and Hitzinger Uk Ltd. as of 31.12.2010

AnnuAl RepoRt 2011

80

according to IFRS, based on the premise of being a legal entity. Capital consolidation of companies acquired up until March 31, 2004 was carried out on the basis of the equity acquired in the subsidiary at the acquisition date. Goodwill was gene-rally reported as an asset. In previous years, a negative consolidation difference (negative goodwill) was evaluated accor-ding to its root cause, and in accordance with IAS 22, future losses and costs expected to be incurred were reported as a gain at the time incurred.

IFRS 3 ‚Business Combinations‘ was applied for all acquisitions carried out after March 31, 2004. Capital consolidation was implemented on the basis of the purchase method (recognising all assets and liabilities at their full fair value). The book value of the investments is offset against the pro-rate, newly valuated equity of the subsidiary (purchase accounting). Any differences are reported as goodwill. Goodwill is subject to an impairment test at least once per year or if there is a reasonable assumption that impairment is necessary. If the determined value in use or sale value is lower than the car-rying amount, it is written down to the lower of the two values.

Shares in associated companies are reported according to the equity method. Here, the same equity consolidation methods as for the full consolidation apply.

Within the context of debt consolidation, receivables, loans and other receivables as well as other provisions were offset against the corresponding intercompany liabilities and provisions included in the consolidated financial statements. Within the context of the consolidation of income and expense, all expenses and income resulting from intercompany transactions and services are offset against each other. Any intercompany profits are eliminated. Deferred tax liabilities are recognized to reflect the income tax effect of the consolidation process reported in the income statement.

FOREIgN cURRENcY TRANsLATION

The financial statements of foreign subsidiaries that report in foreign currencies are translated into EUR based on the functional currency method. For all companies in the HTI Group, the relevant local currency is the functional currency, due to the fact that these companies carry out their business independently from a financial, economic and organisational point of view. With the exception of equity items, all balance sheet positions are translated using the average exchange rate on the balance sheet of December 31, 2011. Expenses and income are translated at the average exchange rate for the reporting period.

The development of the foreign currencies, significant for consolidation, is reflected as follows:

Closing Fx rate

US Dollar (USD)

Romanian Leu (RoN)

British pound (GBp)

2010

1.32

4.22

0.86

2011

1.40

4.24

0.87

Average Fx rate

US Dollar (USD)

Romanian Leu (RoN)

British pound (GBp)

2010

1.34

4.26

0.86

2011

1.29

4.33

0.84

AnnuAl RepoRt 2011


81

The financial statements of all companies included in consolidation in the consolidated financial statements of the HTI Group are based on standardized accounting and valuation principles.

The used accounting and valuation principles are basically the same as last year.

TImE OF PROFIT REALIzATION

Income from the provision of goods or services is realised when all material risks and opportunities arising from the object supplied have been legally transferred to the buyer. operating expenses are recognised at the time the service is rendered or the delivery is made.Earnings from construction contracts are stipulated according to their degree of completion according to IAS11.

INTANgIbLE AssETs, PROPERTY, PLANT ANd EQUIPmENT

Acquired intangible assets are recognized at their acquisition or production cost, less straight-line depreciation or any potential unscheduled depreciation.

Based on an analysis of their economic useful lives, brand names (trademarks) are classified as intangible assets with an indefinite useful life. For this reason, they are not subject to amortisation on a straight-line basis. However, they are subject to an annual impairment test. Acquired customer relationships are reported as intangible assets, and depreciated on a straight-line basis over a period of 15 years.

Acquired customer relationships are classified as intangible asset and are depreciated in a straight line over 10 years.

pursuant to IAS 38, an intangible asset resulting from product development work (or from the development phase) is recognised, if the technical feasibility, intention and capability exist to economically exploit or sell the intangible asset, sales are likely to be realised, the corresponding resources are available to conclude the project and the development expenses are reliably attributable. Self-constructed intangible assets are capitalised at their production cost, and are amortised on a straight-line basis over their useful life.

Acquisition costs encompass the purchase price including import customs duties and non-refundable taxes, as well as all direct costs incurred in order to ensure that the asset reaches the intended location and is made available for its in-tended use. Repair and maintenance costs that do not increase the presupposed useful life of assets are reported as current expenses.

In addition to individual costs, production costs encompass an appropriate share of the material and manufacturing over-heads. General administrative and distribution expenses are not capitalised. Depreciation rates are oriented to the useful operating life of the respective assets. Borrowing costs, which are directly related to the acquisition or creation of assets, are capitalised and depreciated over the useful life of the asset.

III. AccOUNTINg ANd VALUATION PRINcIPLEs

AnnuAl RepoRt 2011

82

Straight-line depreciation is calculated based on the following expected useful life:

pursuant to IFRS 5, abandoned or discontinued assets held for sale are reported under a separate item at the lower of book value and the carrying amount less costs to sell. Assets held for sale are not subject to scheduled depreciation.

Low value items are fully amortised in the year of addition. Maintenance and repair costs are charged to current expenses. Replacement investments are only capitalised if they contribute to a future increase in the useful life or enhance the value of the object.

In accordance with IAS 17, leased property, plant and equipment, which from an economic point of view are to be classified as finance leases with long-term financing, are reported at the acquisition costs which would have been paid if the asset had been purchased. The assets are amortised over the expected useful life of the asset. obligations arising from the future lease payments are shown as liabilities.

Subsidies and investment grants are also reported as liabilities, and used in accordance with the useful life of the respec-tive asset. Gains from sale and leaseback transactions are carried over the term of the lease and reported under other operating income. Losses from sale and leaseback transactions are immediately recognised at the time they arise and are reported as other operating expenses.

Assets from other leasing contracts are considered as operating leasing, and attributed to the lessor. Lease payments are stipulated as operating expenses.

gOOdwILL – cAsH gENERATINg UNITs (cgU’s)

In accordance with IAS 36, assets of which a reasonable assumption exists that an impairment may be necessary, and whose present value of future cash flows is less than the book value, are written down to the higher of value in use or market value.

The Group examines on an annual basis and additionally upon a triggering event, whether an impairment of the balanced goodwill values has happened. Then the receivable amount (net sales revenue) of the cash generating units has to be estimated. This matches the higher value of the time value less costs for disposal and the value in use. The determinati-on of the value in use contains the carrying out of adjustments and estimations regarding the prognosis and discounting of future cash flows. Despite the fact, that the management believes that the assumptions for the determination of the receivable amount are appropriate, any unforeseen changes in these estimations may lead to impairment costs, having possible negative impact on the assets, finances and revenues. Significant factors for the determination of the value in use are assumptions about the future local market- and quantity developments. The determinations of the value in use

Useful life in years

1 - 15

4 - 50

2 - 26

2 - 20

1 - 10

Intangible assets

Buildings

plant and machinery

other equipment, furniture and fittings

vehicles

AnnuAl RepoRt 2011


83

are based on local market growth rates as well as industry sector prognoses. The estimations of the cost structures is based on short term plan data of the CGUs which is then extrapolated.

Within the HTI Group, during the year 2008, the cash generating units (CGUs) were newly defined, due to changes in the scope of consolidation, meaning the usually all pooled production units and –companies within one segment are combined as cash generating units (CGUS), since the combined companies generate cash flows, independent of each other as well as forming the lowest corporate level of management supervision in regards to the cash flow. Thus resulting of, following cash generating units (CGUs) were formed:

CGU 1: plastics processingCGU 2: BBGCGU 3: Extrusion GroupCGU 4: Hitzinger

The calculation model for examination of goodwill towards their impairment is amongst others based on the future earning power of the various CGUs. The management of the individual companies in this context established 5 year forecasts, which were externally made plausible. For evaluation of goodwill every year a model according to the ‚Discounted Cash Flow Method‘ is used, which is based on the externally made plausible forecasts of the companies and hence on the total forecast of the HTI Group for the years 2012 – 1016, as acknowledged by the Supervisory Board.

For evaluation for the recoverable values of the goodwill of the individual CGUs in the year under review following calcu-lation parameters were used:

In order to consider possible negative deviations, a general safety margin of 10% is applied on the planned EBITs.

The determination of goodwill did not lead to any impairment.

The anticipated development of the companies has a strong influence on the determination of goodwill. In case the above mentioned growth rate was reduced to 1% still no reason for impairment would occur. If additionally the safety depreciation rate were increased to 20% an impairment of goodwill of TEUR 3,534 would be necessary. Assuming a zero growth rate in the perpetual annuity and consideration of a safety depreciation rate of 20% would lead to an impairment of goodwill of TEUR 10,776.

plastics processing

5 years

7.85 %

2.00 %

2011

Detailed planning horizont

Discount rate (WACC)

Growth rate used to discount the perpetual annuity

BBG

5 years

7.13 %

2.00 %

Extrusion Group

5 years

7.20 %

2.00 %

Hitzinger

5 years

8.12 %

2.00 %

plastics processing

5 years

7.66 %

2.00 %

2010

Detailed planning horizont

Discount rate (WACC)

Growth rate used to discount the perpetual annuity

BBG

5 years

7.85 %

2.00 %

Extrusion Group

5 years

7.03 %

2.00 %

Hitzinger

5 years

8.27 %

2.00 %

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84

ImPAIRmENT

on each balance sheet date, it is evaluated whether there is any reasonable assumption for an impairment of assets. Such an impairment test is carried out for goodwill and intangible assets with indefinite lives before each balance sheet date. The impairment test determines the recoverable amount for the respective asset. This corresponds to the higher of the value in use or the net realizable value. If the realizable amount is lower than the previously reported carrying amount of the asset, then the difference is reported as an impairment loss recognised in the net profit or loss. The value in use of the asset corresponds to the present value of the expected future cash flow from its continued use and its disposal at the end of its useful life on the basis on an interest rate before tax conforming to usual market conditions and is adapted to the specific risks of the asset. If no independent cash flow can be determined for an individual asset, the value in use is determined for the next biggest unit to which the asset belongs, and for which an independent cash flow can be determined (cash generating unit). By using this procedure an appropriate WACC (after tax) is created, derived from a peer-group.

The net realizable value corresponds to the realisable amount to be obtained for the asset from independent third parties, less costs to sell.

If the reasons for impairment cease to exist, this leads to a write-up, except in the case of goodwill. According to IFRS 3 goodwill once impaired is not written-up again.

FINANcIAL INVEsTmENTs

Investments in affiliates, as far as they are not fully consolidated, as well as other investments, are reported at acquisiti-on costs or their fair lower value. They are recognised as available for sale financial assets. If material, depreciation is shown under the financial result. Investments in associates are principally stated at equity, unless they are not rated as insignificant. Securities held to maturity (held to maturity financial assets) are reported at amortised acquisition cost. All other securities are classified as available for sale. They are stated at acquisition cost at the acquisition date. In subsequent reporting periods, they are shown at the respective market values or share prices at the balance sheet date. Changes in value are directly recognis-ed in equity without recognition through profit or loss.

INVENTORIEs

Inventories are stated at acquisition or production cost or the lower net realisable value of the balance sheet date. pro-duction costs include direct expenses, a proportionate share of the fixed and variable overhead expenses including de-preciation based on normal capacity utilisation. Interest expenses on borrowed capital, as well as general administrative or distribution expenses are not included in the production cost of current assets. Appropriate impairment losses are reported for risks arising from the duration of storage or reduced convertibility.

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85

cONsTRUcTION cONTRAcTs

According to IAS 11 revenues from construction contracts are established for each order according to the actual degree of completion (percentage of completion method). The degree of completion is calculated either based on the proportion of the actually accrued expenses and the estimated total costs on the set deadline (input-orientated methods) or through milestones (output-orientated methods). The relative order costs have an immediate impact on the profit/loss calculation of the order. In case the result of the production order cannot be reliably determined, revenues only in the amount of the accrued order expenses are recognised. Received advance payments are actively settled under the shown receivables from construction contracts. As far as the advance payments received of single production orders exceed the receivables from construction contracts, the exceeding amount is shown under payables. If it is assumed that the total order costs will exceed the total order revenues, the expected loss is immediately recognised as costs and is, as far as it is already excee-ding the accrued order expense, shown as a liability from construction contracts.

REcEIVAbLEs

Receivables and other assets are generally reported at acquisition costs. Financial receivables and other assets are sta-ted as loans and receivables. Corresponding value adjustments allow for all recognisable individual risks. Non-interest bearing receivables with a remaining term to maturity of more than one year are reported at their discounted present value. Foreign exchange receivables in individual financial statements are translated at the average exchange rate on the balance sheet day.

cAsH ANd cAsH EQUIVALENTs

Cash and cash equivalents include cash on hand and cash at banks as well as current receivables (cash equivalents) which are due within one month, and free of any risk of impairment. No quarantined accounts exist.

INVEsTmENT sUbsIdIEs

Subsidies of public corporations are taken into consideration, as soon as it is safeguarded, that the Group can fulfil the requirements so that the subsidies can flow to the Group. Subsidies are stipulated as part of non-current liabilities in the consolidated financial statement.

EmPLOYEE bENEFITs

Austrian companies are required to set up provisions for future severance payments. Under Austrian labour legislation, when employees whose employment began before January 1, 2003 are dismissed or have reached the legal retirement age, they are entitled to receive on-off payments. The amount of such payments is based on the number of years of service and the salary at the time the employment is terminated.

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86

provisions for severance payments are calculated on the actuarial basis of the balance sheet date using the projected unit credit method, based on an interest rate of 5% (last year: 4.5%), a salary progression of 3% (last year: 2.5%) and the legally stipulated retirement age (graduated up to 60 years for women and 65 years for men). The fluctuation percentage was determined according to the company specific circumstances.

Actuarial profits or losses are directly reported in the consolidated income statement.

For employees, whose employment commenced after January 1, 2003, the responsibility for fulfilling this obligation is assumed by regular contributions of the stipulated amounts to an external employee benefit fund. In addition to this, there is no other legal obligation for severance payments on the part of the company. No provisions are required for this contribution-based severance payment system.

In accordance with company agreements, employees are entitled to jubilee benefits within the context of a service anni-versary programme. pursuant to IAS 19, provisions were determined as in past years applying the projected unit credit method, based on an interest rate of 5% (last year: 4.5%) and a salary progression of 3% (last year: 2.5%). The fluctuation percentage was determined according to the company specific circumstances.

PROVIsIONs

provisions are set at the amount determined by a commercial evaluation which is required on the balance sheet date to cover future financial payment obligations, identifiable risks and as yet undetermined obligations of the Group based on past events. The amounts of the provisions formed represent the best possible estimate of the expenditure required to cover the respective obligations.

If the present value of a provision based on the prevailing market interest rate differs considerably from the nominal value, the present value of the liability is reported.

dEFERREd TAXEs

Deferred tax assets and liabilities are recorded for all temporary valuation and accounting differences arising between the amounts for tax purposes and the IFRS balance sheet items of the individual companies as well as for the Group. pursuant to IAS 12, the deferred taxes are calculated using the balance sheet liability method.

Deferred tax assets are recognised if it is likely that the tax advantage from them can actually be utilised within a fore-seeable period of time. The calculation of deferred tax is based on the prevailing tax rates in the individual countries on the probable balance sheet date when short-term differences are to be reversed. Future changes in tax rates are only recognised if the changes are already applicable at the balance sheet date or have been publicly announced.

Effects of the in Austria formed tax Group were also considered as well as the possible utilisation of Group losses through reformation measures subject to tax. The latter mostly apply to the segment plastics processing.

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LIAbILITIEs

Financial liabilities are stated at the actual amount received. They are classified as financial liabilities at amortised cost (FLAC). Any premium, discount or other difference between the amount received and the amount to be repaid is distribu-ted over the maturity and disclosed under the financial result.

Trade payables are stated at the fair value of the services rendered. Subsequently, these liabilities are stated at amortised acquisition costs. other liabilities not resulting from services rendered are stated at the amount to be repaid.

PRImARY ANd dERIVATIVE FINANcIAL INsTRUmENTs

primary financial instruments in the HTI Group include financial assets, marketable securities, payables and receivables, cash and cash equivalents, subordinated loan funds, bank loans, finance lease obligations, bonds and other financial assets and liabilities. Depending on their classification (category of financial asset) they are either reported at the amor-tised acquisition cost or at fair value (IAS 39).

The value of all financial assets and liabilities is reported at the settlement date. Unless prices of active markets are not available they will – if not of little significance – be determined by using recognized actuarial valuation models and actu-al market parameters (especially interest rates, exchange rates and security of the contractual party). Additionally, the Cash Flows of the financial instruments are discounted towards the balance sheet date.

The value of all financial assets and liabilities is reported at the settlement date. Financial assets and liabilities are dele-ted from the accounts when the right to payments from the investment has ceased or been assigned elsewhere, and the Group has essentially passed on all the risks and opportunities connected with possession of these items.

Derivative financial instruments, encompassing forward exchange contracts, currency options, caps, interest swaps, etc... are reflected in the balance sheet at their fair value. Determining the fair value of the derivative financial instruments is based exclusively on the valuation by banks.

Derivative financial instruments with a positive market value are shown under the other financial receivables; derivative financial instruments with a negative market value are shown under other financial liabilities. Changes in the fair value are fundamentally recognised as a profit or loss, depending whether they apply to fair value hedges or cash flow hedges. The affective parts of the changes in the market of the secured basic deal as well as the derivative financial instruments are shown in the fair value hedges in the profit/loss statement. Market changes in derivative financial instruments, secu-ring future cash flows (cash flow hedges) are shown in the equity for as long as the basic deal becomes result effective. The not affective part of a cash flow hedge or a security deal, not fulfilling the preconditions for hedge accounting, is immediately recognised in the financial result. This also applies for excluded components in security deals in the course of cash flow hedges. With conclusion of a security relationship the relation of the used security instrument and the basic deal is documented. Additionally, at the beginning of the security relationship a continuous documentation regarding the expectations of whether the used security instrument can in reality compensate the value fluctuations of the basic tran-saction (effectiveness measurement).

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88

EsTImATEs

While establishing the consolidated statement, up to a certain degree assumptions have to be made, which influence the balanced assets and liabilities, the recognition of other obligations at the balance sheet date and the disclosure of reve-nues and costs. The actual amounts may vary from the assumed ones.

Regarding the valuation of forward-looking estimates, the management board identified following areas, which bear a substantial risk to be leading to a change of the book value of assets or liabilities:

Goodwill and recognized development costs are examined towards any impairment on an annual basis resp. in case of any triggering event. The calculation model for the impairment test is based on the future earning power of the individu-al CGUs. This is derived from the 5-year mid-term plan, established by the Management Board. Consequently, the anti-cipated development of the Group has a high impact on the evaluation of impairment of goodwill and recognized develop-ment costs.

Deferred tax assets are recognised to the extent that it is likely that the tax advantage from them can actually be utilised. In order to judge the probability of their future applicability, factors such as past earnings, operative planning, loss carry forwards and tax planning strategies are taken in to account. For feasibility of the value of the deferred tax assets on loss carry forwards a planning horizon of 6 years was determined. The reported deferred tax assets may decrease, in case the actual tax results lie below the planned ones or are subject to a time postponement. Should this be the case, the thereof resulting deviation to the estimations could lead to significant depreciations affecting the net income.

For the examination of goodwill value relevant assumption insecurities have a similar effect on the amount of the recog-nised deferred tax assets.

The calculation model for the examination the deferred tax value is mainly based on the future earning power of the indi-vidual CGUs. In order to be cautious, a security markdown of 20% was stipulated.

Estimates and uncertainties in discretionary decisions also exist with: — the recognition of intangible assets in the balance sheet, — the valuation of customer specific production orders as well as — with the valuation of long term obligations opposite employees and provisions

The accounting of other intangible assets is based on assumptions regarding the expected useful life on one hand; on the other it is based on evaluation of the management in regards to value of the assets and the existence of impairment. In-fluences, like lower than expected net cash flows as well as changes in the discount factors, may lead to impairment.

The valuation of receivables is influenced by their expected collectability. The basic principles, used by the management in regards to evaluation of the collectability are the solvency of the customers; the maturity structure of the balance of receivables, experiences in regards to past write-off’s as well as changes in the payment terms. Receivables impairment is determined according to statistics and is therefore subject to estimate insecurities. With a worsening of the financial status of customers the volume of the actual write-offs may exceed the expected ones.

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89

The production companies of the Group do part of their business on the basis of customer specific construction contracts, balanced according to the percentage-of-completion method, thus turnover revenues to be shown according to their degree of completion. This method requires an exact assumption of the degree of order progress. Dependent on the me-thod for determination of the degree of completion, the significant assumptions also affect the accrued expenses, the total revenues and the order risks. The management of the operative units continuously examine all assumptions, requi-red for the production orders and adjusts them if necessary. In the course of the business year 2011 for the first time revenues of 7 Group companies were accounted according to the percentage of completion method.

The expenses for long term employee benefits (severance-and long-service payments) are calculated in accordance with actuarial methods, relying on assumptions in regards of the discount factor, life expectancy, wages increase as well as fluctuation rates. In case these parameters develop differently to the assumed ones, this may have appropriate effects on the future amount of the obligations.

For provisions the assumption insecurities mainly exist in the provision for losses threatening. The provision is based on the actual estimation of the management.

EARNINgs PER sHARE

Earnings per share are calculated on the basis of the consolidated net profit for the period less minority interest divided by the weighted number of shares in circulation (issued shares less treasury stock).

sEgmENT REPORTINg

The HTp group and Gruber & kaja – the specialists for lightweight components made of plastics and aluminium – now form the segment Lightweight Construction. The engineers BBG & FAvRE and HIGH TECH ExTRUSIoN (High Tech Ext-rusion GmbH, Extruderkomponenten Salzgitter GmbH and the Technoplast group) form the division Engineering and the special electric engineer Hitzinger forms the division Energy Technology. Hence, the business activities of HTI consist of the segments ‚Lightweight Construction‘, ‚Engineering‘, ‚Energy Technology‘ and ‚others‘. The latter consists of the group-wide holding functions and minority interests.

Services for other divisions (mainly management services, financing and license fees) were passed on at common prices to the individual segments.

These strategic business fields build the basis for the primary segment reporting. Consolidating entries are carried out within the individual segments.

AnnuAl RepoRt 2011

90

The consolidated income statement was compiled in accordance with the total cost method.

1. REVENUEs

Revenues are derived from the following regions:

The revenues are structured, according to type of realization:

In the course of the business year 2011 for the first time revenues of 7 Group companies were accounted according to the percentage of completion method.

2. mATERIAL EXPENsEs

3. PERsONNEL EXPENsEs

IV. NOTEs TO THE cONsOLIdATEd INcOmE sTATEmENT

2011

35,425

142,053

29,513

206,991

in TEUR

Austria

EU

other countries

2010

37,039

113,830

42,137

193,006

2011

102,921

104,070

206,991

in TEUR

Revenues from goods and services

Revenues from construction contracts

2010

150,778

42,228

193,006

2011

91,868

11,300

103,168

in TEUR

Material expenses (including merchandise)

Expenses for services rendered

2010

90,054

6,464

96,517

2011

52,902

1,372

14,613

534

5,465

74,887

in TEUR

Wages and salaries

Severance expenses

Expense for social security and payroll related duties

other social expenses

Hired staff

2010

49,272

1,211

12,921

536

6,850

70,790

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91

4. dEPREcIATION, APPREcIATION ANd AmORTIzATION

Expenses for depreciation, appreciation and amortization amounting to 10,633 (last year: TEUR 10,582) include scheduled depreciation as well as write-ups on intangible assets and equipment. The breakdown of depreciation and amortization is included in the asset analysis (Annex 1).

5. OTHER OPERATINg INcOmE ANd EXPENsEs

Other operating income

Starting with the business year 2011 results from operative at-equity companies are stated separately in the EBIT. Last year’s amounts were appropriately adjusted.

The sale and lease back transaction as described in item 10 resulted in an amount of TEUR 2,435; this is recognized in other operating income.

Other operating expenses

2011

2,699

52

3,258

6,009

in TEUR

Gains from the disposal of fixed assets excluding financial assets

Government grants

others

2010

603

98

4,865

5,566

2011

1,845

2,879

5,345

3,859

3,406

2,980

1,554

3,158

151

6,002

-1,006

30,173

in TEUR

Sales and distribution expenses

Expenses for operating lease payments

Expenses for energy

Expenses for transport

Expenses for maintenance

Travelling expenses and expense for vehicles

Expenses for insurance

Expenses for legal and administrative support

Losses from the disposal of fixed assets

other operating expenses

Income from the revearsal of provisions

2010

1,892

2,371

4,941

3,372

4,034

2,643

1,361

3,523

171

6,507

-3,030

27,785

AnnuAl RepoRt 2011

92

The other operative expenses include expenses for the auditor, applicable to the business year of:

6. INTEREsT REsULT

Interest income and expenses primarily result from business transactions with banks. Bank and other interest payable include the interest share from leasing contracts of TEUR 503 (last year: TEUR 551). Further, the interest for employee related provisions amounting to TEUR 147 (last year: TEUR 522) is included.

7. OTHER FINANcIAL REsULT

The result from minority stakes contains the partial depreciation of an investment in the amount of TEUR 539. The mino-rity stake is assigned to the segment ‘others’.

in TEUR

Interest and similar expenses

Interest and similar income

2011

-5,942

413

-5,529

2010

-7,540

875

-6,666

2011

-516

-516

16

-89

-48

-121

-637

in TEUR

Income/expenses from investments

Result from Investments

Result from other securites recognized as current and non-current assets


Miscellaneous financial result

Other financial result

2010

0

0

18

-197

237

58

58

2011

40

187

57

284

in TEUR

Expenses for the year-end audit

Expenses for other advisory

Expenses for other services

2010

40

163

82

285

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93

8. INcOmE TAX

As income tax the paid or due taxes of the individual companies on income and profit as well as the deferred tax assets are considered.

The causes for the difference between the application of the Austrian corporation tax rate of 25% expected tax expense and the stated income tax expenses are portrayed as follows:

9. EARNINgs OF NON-cONTROLLINg INTEREsTs

Earnings of non-controlling interests belong to Hitzinger Uk, Ltd.

2011

-130

220

90

in TEUR

Income tax expenses

Deferred tax income

2010

7

42

49

in TEUR

Earnings before tax

Tax at the rate of 25%

Not approach and value adjustment of deferred taxes on loss carry forwards

Research and investment subsidies

Tax credits from previous periods

Non deductable expenses & non-taxable income

Different tax rates in foreign group companies

Deferred taxes recognized directly in equity

2011

-2,314

579

-978

84

3

520

7

-123

90

2010

-3,979

995

-1,066

50

-70

125

15

0

49

AnnuAl RepoRt 2011

94

10. INTANgIbLE AssETs ANd PROPERTY, PLANT ANd EQUIPmENT

A detailed breakdown of the intangible assets and property, plant and equipment included in the consolidated balance sheet and their movements of the years 2011 und 2010 are reported on in the fixed asset schedule, accompanying the notes.

In the year under review, in the course of the obligatory impairment tests from goodwill, no impairment was determined.

The accumulated book values of the intangible assets with indefinite useful life expectancy are as follows:

In the business year 2011 no unscheduled impairments on fixed assets and other intangible assets were done (last year: TEUR 0). During the business year, write-ups from value increases in the amount of TEUR 0 (last year: TEUR 664) were done.

TRAdEmARK gRUbER & KAJA

With the purchase contract dd. December 19, 2008 all rights from the former shareholders of the company connected with the trade mark ‘Gruber & kaja’ were purchased by the Group companies HTM High Tech Materials GmbH and Gruber & kaja High Tech Metals GmbH. The purchase price of the trade mark at the time was TEUR 2,700. Since then the trade mark has been recognized in the consolidated financial statements with exactly this amount.

For decades, the company Gruber & kaja has been acting in daily business affairs with customers and suppliers and has for many years established long-term and stable business relationships with customers and suppliers. Besides the ma-terial assets of company and the technological know-how these relationships are the crucial factor for being awarded with

In TEUR

Goodwill Extrusion

Goodwill Hitzinger

Goodwill BBG

Goodwill plastics processing

Goodwill total

Trademark Hitzinger

Trademark Gruber & kaja

Trademark BBG

Trademark total

31.12.2010

19,365

6,184

4,295

2,927

32,771

1,967

2,700

3,607

8,274

41,045

31.12.2011

19,365

6,184

4,295

2,927

32,771

1,967

2,700

3,607

8,274

41,045

V. NOTEs TO THE cONsOLIdATEd sTATEmENT OF FINANcIAL POsITION

AnnuAl RepoRt 2011


95

large and long-term customer orders. The trade mark ‘Gruber & kaja’ therefore represents the competitive advantage and for new conquerors of the market a market barrier, based on the long-term customer relationships, especially in the relevant market segment and –environment for supplying the German premium vehicle producers with top quality and highly precise parts and component groups made of aluminum die casting.

Due to the impacts of the automobile- and financial crisis of the years 2008 and 2009 massive actions for restructuring had to be implemented and are still in operation. At the same time however – due to the trade mark awareness – especially during these years of crisis it was managed to conclude new, long-term large projects with existing and new customers, which without this trade mark awareness would certainly not have been the case.

The impairment testing method of the trade mark annually used is the ‘Discounted Cash Flow’ method (DCF), which is based on externally made plausible budget and mid term plan of the Group for the years 2012 until 2016. The mid term plan is based on experiences from the past as well as on external sources of information. The calculation discount rate (discount rate) was defined with 7.85%. For the time after the detailed forecast period a growth rate of 2% per year, like last year, was used. Further, a security markdown of 10% on the EBIT of all plan periods was taken into account. This evaluation confirms the value of the trade mark ‘Gruber & kaja’ as of December 31, 2011.

If a security markdown of 20% was stipulated instead of the above mentioned 10% or alternatively a discount rate in the calculation of 8% this would lead to an unscheduled depreciation in the amount of the carrying amount (TEUR 2,700).

TRAdEmARKs HITzINgER, bbg

The values of the trade marks BBG and Hitzinger are secured by the excess cover of the goodwill in the frame of the im-pairment tests.

In the year under review expenses for borrowed capital for assets under construction in the amount of TEUR 27 was ac-tivated (last year: TEUR 90).

Limitations in regards to ownership- or disposal rights on property and buildings as of balance sheet date amounted to TEUR 36,325 (last year: TEUR 39,623).

Limitations in regards to ownership- or disposal rights on technical equipment and machinery as of balance sheet date amounted to TEUR 18,643 (last year: TEUR 16,362).

Limitations in regards to ownership- or disposal rights on other fixed assets as of balance sheet date amounted to TEUR 2,295 (last year: TEUR 3,352).

The HTI Group does not dispose of any investment properties.

The HTI Group has assumed various finance lease agreements for machinery, commercial space in buildings and other assets as a lessee. In accordance with IAS 17, leased property, plant and equipment of material importance, which are classified as assets with long-term financing (finance leasing), are recognised at the lower of the fair value of the leased object at the beginning of the leasing contract or the present value of the future minimum lease payments. The leased

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96

assets are depreciated over the expected useful life for the duration of this lease. pursuant to IAS 17, liabilities from finance leases are reported at the present value of the minimum lease payments.

The recognized present values and corresponding accumulated depreciation are presented in the following chart:

Future minimum lease payments resulting from non-terminable finance lease contracts are as follows:

In the course of the operating-leasing in the business year 2011 rental- and lease expenses of TEUR 2,879 (last year: TEUR 2,371) arose. The stated expenses also contain contingent rents or sublease payments.

The future minimum lease payments from operating leasing resulting from non-terminable finance lease contracts are as follows:

31.12.2011

2,094

4,378

0

6,471

in TEUR

Subsequent year

1-5 years

> 5 years

Future minimum lease payments

31.12.2010

1,132

1,686

462

3,280

31.12.2011

13,063

14,137

115

512

27,826

-6,808

21,019

in TEUR

Buildings

plant & machinery


vehicles

Total acquisition cost

Accumulated depreciation

Book value

31.12.2010

13,063

13,063

1,646

221

27,992

-6,039

21,953

31.12.2011

3,217

6,903

3,876

13,996

-2,804

-498

-1,460

-845

11,192

2,718

5,443

3,031

in TEUR

Subsequent year

1-5 years

> 5 years

Future minimum lease payments

less interest

thereof in subsequent year

thereof in 1 - 5 years

thereof in > 5 years

present value of future minimum lease payments

thereof in subsequent year

thereof in 1 - 5 years

thereof in > 5 years

31.12.2010

3,566

7,412

3,774

14,752

-2,331

-369

-1,037

-925

12,421

3,198

6,374

2,849

AnnuAl RepoRt 2011


97

The increase in minimum lease payments is mainly due the implementation of a sale & lease back transaction in a pro-duction company with the companies ABCMN vermögensverwaltungs GmbH and Glatzmeier Beteiligungs GmbH. Both companies are related companies of the HTI Group.

11. sHAREs IN AssOcIATEd cOmPANIEs

The book values of associated companies developed as follows:

The consolidated financial results portray results from associated companies in operative cooperation in the EBIT. Results from associated companies with financial investment character are portrayed in the financial result.

Due to a subordination agreement for an associated company a provision in the amount of TEUR 147 was established.

Aggregated amounts in regards to associated companies

In the year 2008 the Joint venture Wuhu Conch Theysohn Extrusion Equipment Co, Ltd was founded by Wuhu Conch pro-files and Science Co., Ltd. and Theysohn Holding GmbH (in the year 2010 upstream merged with High Tech Engineering GmbH). The share of the Joint venture, held by Theysohn Holding GmbH was 30%. This share consists of a monetary contribution of TRMB 3.000 (TEUR 276) and a non-monetary contribution in the amount of TRMB 6,000 by means of tech-nologies and know-how, this value being confirmed by an external evaluation. Based on the not sufficiently secured future business development of the Joint venture as of balance sheet date 31.12.2008 a depreciation of the non-monetary con-tribution in the amount of TEUR 383 was made and the current gains and losses were not adopted due to the same reasons. Due to the positive business development in 2011 the reasons for this depreciation disappeared and the impairment was cancelled. The cancellation of the value adjustment of the contribution in kind as well as the current results totalled to an income of TEUR 899.

A list of interest in associated companies, including the name, the head office and the percentage of the interest held is stated in the annex 3 to the notes of the consolidated statements.

31.12.2011

2,043

0

862

147

140

3,191

in TEUR

Beginning of the period

Changes in consolidated group

Income/expenses from associated companies

provisions for associated companies

Currency differences

Book value

31.12.2010

802

1,467

-278

0

52

2,043

31.12.2011

15,075

5,344

13,761

341

in TEUR

Total assets

Total liabilities

Total revenue

Total result

31.12.2010

10,713

4,160

11,137

597

AnnuAl RepoRt 2011

98

12. OTHER FINANcIAL AssETs

The item ‘other financial assets’ is broken down as follows:

For shares in affiliated companies restrictions on disposal or ownership rights exist.

Restrictions with regard to ownership and disposal for securities per balance sheet date amount to TEUR 520 (last year: TEUR 496).

13. dEFERREd TAX AssETs ANd LIAbILITIEs

According to the balance sheet liability method for the determination of deferred taxes pursuant to IFRS, deferred tax assets and liabilities for the main balance sheet items are as follows:

31.12.2011

5,152

5,317

17,596

-17,033

11,032

-9,406

-6,126

-1,191

-1,244

17,033

-934

10,098

in TEUR

Deferred tax assets

Assets

other assets

Liabilities

other liabilities

Loss carry forwards

Deferred tax assets offset with deferred tax liabilities

Deferred tax liabilities

Assets

Fixed assets

other assets

Liabilities

provisions

other liabilities

Deferred tax assets offset with deferred tax liabilities

31.12.2010

4,054

5,620

13,964

-12,806

10,832

-7,889

-3,517

-845

-1,632

12,806

-1,077

9,755

31.12.2011

744

0

589

0

589

In TEUR

Investments

Shares in affiliated companies

Securities held as non-current assets

therof held-to-maturity

thereof available-for-sale

31.12.2010

1,284

32

570

0

570

AnnuAl RepoRt 2011


99

Based on current tax regulations, it is to be assumed that differences in retained earnings between the tax valuation of an investment in subsidiaries and the proportionate equity of the fully consolidated subsidiaries are basically not subject to tax. Thus no deferred tax was recognized on such differences according to IAS 12.39.

From the total loss carry forwards in the amount of TEUR 159,288 (last year: TEUR 150,335) deferred tax assets in the amount of TEUR 17,596 (last year: TEUR 13,964) were recognized as – based on the mid term plans - utilizing the defer-red tax assets through future taxable profits is probable. The loss carry forwards can be used timely unlimited.

Deferred taxes were during the business year as follows:

14. INVENTORIEs

The item “inventories” is divided into the following categories:

The book value of inventories was – if necessary – impaired to their net disposal value which amounts to TEUR 564 (last year: TEUR 522).

In the business year 2011 write up’s to inventories in the amount of TEUR 19 (last year: TEUR 678) were made.

Limitations with regards to disposal or utilization on inventories as of balance sheet date amount to TEUR 0 (last year: TEUR 0).

31.12.2011

9,755

220

123

10,098

in TEUR

Net deferred tax as of Jan., 1st

Deferred taxes reported in the income statement

Deferred taxes recognized directly in equity

Net deferred tax as of Dec., 31st

31.12.2010

9,713

42

0

9,755

in TEUR

Raw Materials

Work in progress

Finished goods

prepayments received

prepayments paid

31.12.2011

13,588

10,472

7,793

-1,864

1,620

31,609

31.12.2010

12,470

9,553

7,032

-5,034

729

24,750

AnnuAl RepoRt 2011

100

15. TRAdE ANd OTHER REcEIVAbLEs

The item “trade and other receivables” encompasses the following assets:

In the course of the business year 2011 for the first time revenues of 7 Group companies were accounted according to the percentage of completion method.

The “other assets” mainly include tax credits.

The present value of financial trade accounts receivable represents an appropriate approximate value for the fair value and thus the maximum credit risk on the balance sheet date.

Trade accounts receivable amounting to TEUR 1,192 (last year: TEUR 2,769) were impaired in value, as shown in the fol-lowing table:

Expenses relating to the complete write-down of specified trade account receivables amounted to TEUR 278 (last year: TEUR 356). The revenues from the receipt of written down trade accounts receivables amount to TEUR 285 (last year: TEUR 258).

31.12.2011

30,696

0

469

0

2,571

2,011

16,925

0

5,359

0

56,019

in TEUR

Receivables

thereof > 1 year

Receivables from affiliated and associated companies

thereof > 1 year

other financial receivables and assets

thereof > 1 year


thereof > 1 year

other non-financial receivables and assets

thereof > 1 year

31.12.2010

34,380

1,422

449

0

660

205

8,485

0

5,904

30

49,878

in TEUR

value adjustment as of Jan., 1st

Currency differences

Additions

Consumption

Revearsal

value adjustment as of Dec., 31st

2011

2,769

0

340

-1,731

-186

1,192

2010

4,921

-1

403

-1,687

-867

2,769

AnnuAl RepoRt 2011


101

The book values of the receivables are as follows:

With regard to the financial assets neither impaired nor due, there are no indications that the debtors will not be able to meet their payment obligations.

Limitations with regards to disposal or utilization of trade account receivables as of balance sheet date amount to TEUR 28,333 (last year: TEUR 23,155).

Limitations with regards to disposal or utilization of other financial assets as of balance sheet date amount to TEUR 0 (last year: TEUR 195).

Thereof: remaining

receivables (impaired)

1,654

2

0

1

1,657

Thereof: neigther impaired nor due at balance sheet date

23,383

467

16,925

2,570

43,345

Thereof: not impaired at balance sheet but overdue

Less than 90 days

4,727

0

0

0

4,727

Between 90 and 180

days

574

0

0

0

574

Between 180 and 360

days

121

0

0

0

121

More than 360 days

237

0

0

0

237

in TEUR

Receivables

Receivables from affiliated

and associated companies

Receivables from construction

contracts

other financial receivables

and assets

Total

Book value 31.12.2011

30,696

469

16,925

2,571

50,660

Thereof: remaining

receivables (impaired)

1,953

9

0

1

1,963

Thereof: neigther impaired nor due atbalance sheet date

27,351

440

8,485

654

36,929

Thereof: not impaired at balance sheet but overdue

Less than 90 days

4,317

0

0

0

4,317

Between 90 and 180

days

665

0

0

0

665

Between 180 and 360

days

77

0

0

0

77

More than 360 days

17

0

0

5

22

in TEUR

Receivables

Receivables from affiliated

and associated companies

Receivables from construction

contracts


and assets

Total

Book value31.12.2010

34,380

449

8,485

660

43,974

AnnuAl RepoRt 2011

102

The receivables from construction contracts consist of:

16. cAsH ANd cAsH EQUIVALENTs

As of balance sheet date, the company’s cash and cash equivalents amount to TEUR 5,503 (last year: TEUR 4,470).

Limitations on cash and cash equivalents in regards to disposal or utilization as of balance sheet date amount to TEUR 1,040 (last year: TEUR 346).

17. AssETs HELd FOR sALE

In the business year 2010 assets held for sale amounting to TEUR 3,866 (last year: TEUR 2,245) were reported. This is property and buildings held for sale in Linz and kirchdorf.

Limitations on assets held for sale in regards to disposal or utilization as of balance sheet date amount to TEUR 3,866 (last year: TEUR 2,245).

18. EQUITY

The development of the Group’s equity of the years 2011 and 2010 is portrayed on page 73.

As of 31.12.2011 the share capital of HTI High Tech Industries AG was EUR 45,583,944, divided into 45,583,944 shares. The proportionate amount of the share capital per share is EUR 1.00.

In the course of the Annual General Meeting dd. June 30, 2010 the Management Board was authorized to increase the share capital of the company by up to EUR 15,500,000.00 within a period of 5 years by issuing up to 14,500,000.00 shares against contribution in cash or kind, according to § 169 Abs 1 AktG.

In the course of the Annual General Meeting dd. June 30, 2010, a contingent capital increase in the amount of max. EUR 5,000,000.00 as per § 159 Abs 2 Z 1 AktG by issuing of 5,000,000 shares was agreed. The contingent capital increase shall only be carried out towards the extent of the creditors of the debenture bonds (hybrid bond 2009), issued on Dec. 12, 2009 exercise their conversion rights at the exercise price of EUR 1.00 (Euro one) per share.

Further, for the preparation of the conversion bond 2011 the resolution for a contingent capital increase according to § 159/2 Z 1 AktG was passed for up to EUR 9,500,000.00 by issuing of up to 9,500,000 non-par value bearer shares with full voting power for satisfaction of the creditors according to § 174 Aktiengesetz.

in TEUR

Expenses for construction contracts

plus realised result

Advance payments received


2011

15,098

4,790

-2,964

16,925

2010

8,107

2,171

-1,794

8,485

AnnuAl RepoRt 2011


103

As a part of the concept for refinancing, established beginning of 2011 between HTI AG and the pool banks, a debenture bond with a nominal value of MEUR 8.55 (‘debenture bond 2011’) as well as a conversion bond with a nominal value of MEUR 9.50 (‘conversion bond 2011’) was issued. Both bonds were signed by the pool banks of the HTI Group. Based on the design of the basic agreements as well as the documents for implementation both bonds were portrayed in the con-solidated financial statement as of December 31, 2010.

The debenture bond 2011 is a subordinated bond without fixed period with interest. In the years 2011 and 2012 the bond does not bear any interest; in the year 2013 the bond bears 3-months Euribor interest plus 100 base points. After that a surcharge of 50 base points applies, with the total interest being capped with 5% per year. The issuer can only pay interest provided they are covered in the annual surplus according to § 231/2 Z 22 resp. Abs 3 Z 21 UGB, which was generated by HTI AG during the business year, previous to the respective interest payment date and that a resolution in regards to profit distribution had been passed previously. The debenture bond 2011 has to be reduced by the same amount that HTI is paying dividends (by considering pending interest). The debenture bond 2011 is freely transferrable; however, HTI AG has to be notified about such a transfer, as stipulated in the subscription form.

The conversion bond 2011 is a subordinated bond without fixed period without interest. As compensation for no interest charge of the debenture bond 2011 the conversion is fitted with a conversion right for new shares of HTI AG in a 1:1 ratio. The conversion right can be exercised until latest May 2020 always within a time period of 4 weeks after publication of a quarter, half year, or annual result through HTI AG. In September 2011 HTI announced, that they were notified about oberbank AG („oberbank“), Raiffeisen-Landesbank Steiermark AG („RLB Steiermark“), Raiffeisenlandesbank oberöster-reich Aktiengesellschaft („RLB oberösterreich“) as well as Raiffeisen Bank International AG („RBI“) about full exercision of their conversion rights in regards to the conversion bond held by them. of the total volume of the conversion bond 2011 of MEUR 9.5, which was issued in the course of the restructuring of the Group’s funding in March 2011, consequently a nominal amount of MEUR 9.35 was converted.

In December 2009 HTI High Tech Industries AG by means of a private placement issued a subordinated bond without fixed period with a total amount of EUR EUR 5,000,000.00 (‘Hybrid bond 2009). This bond to its full extent was signed by Raiffeisen-Landesbank Steiermark AG. The subordinated bond without fixed period with conversion right has a fixed in-terest period until March 31, 2015 with an interest rate of 8.29 % per year. After that this it bears interest based on the 3-months-Euribor plus 1,000 base points. Beyond that, this bond is fitted with a contractual conversion right. The same may be exercised between March 31, 2015 and March 31, 2020 each at the end of the quarter. In the course of the conver-sion the existing receivables from the bond’s repayment can be converted against new shares of HTI AG, with the issuing price of the new shares being minimum EUR 1.00 per share which has to be increased by in the meantime paid interest on the bond and has to be reduced by meanwhile paid dividends by HTI AG. Interest can only be paid by the issuer, if they are covered by the annual surplus according to § 231 Abs 2 Z 22 resp. Abs 3 Z 21 UGB, which was generated by HTI AG during the business year, previous to the respective interest payment date. More than that, an interest claim only arises, if and as far as the issuer takes the decision for interest payment, or a dividend, another distribution or a payment on the share capital of the issuer is decided or done. Any unpaid interest of an interest period has to be paid in a later interest period. The right for cancellation of the bond is excluded for all bond creditors.

Since all three subordinated bonds contain all elements of a shareholder loan, the stipulation is done in equity.

With all financing banks an agreement was made, that Hitzinger GmbH only distributes profits of each current year.

Non-controlling interests include investments of third party shareholders in the equity of consolidated companies. As of date of statement of financial position the minority interests amount to TEUR 179 (last year: TEUR 2,306). The non-cont-

AnnuAl RepoRt 2011

104

rolling interest in the equity belong to Hitzinger Uk Ltd. In the prior year, the non-controlling interest included also mi-norities of Hitzinger GmbH.

Glatzmeier Beteiligungs GmbH, Murtal-Golf Errichtungs- und Betriebs-GmbH and the CEo peter Glatzmeier as of De-cember 31, 2011 jointly disposed of 10.97% of share capital and voting rights. ABCMN vermögensverwaltungs GmbH as of December 31, 2011 disposed of 8.27% of share capital and voting rights. The above mentioned shareholders are – to-gether with Astor Industriebeteiligung GmbH - jointly acting legal entities as per § 1 Z 6 ÜbG and hold 30.10% of the share capital and voting rights

The shares of RLB Steiermark amounted to around 12% by end of the year 2011. The remaining shares were in free float. Since the date of statement of financial position to the best of the knowledge of Management- and Supervisory Board no significant changes in the shareholder structure exist. Also, no reportable facts according to §243 (a) UGB exist. In the event of change of control all members of the management board are entitled to resign from office with immediate effect (all members appointed until end of 2016).

19. LIAbILITIEs FOR EmPLOYEE bENEFITs

The liabilities for employee benefits amount to:

The movement of liabilities for severance payments and long-service payments is presented in the following table:

The actual payments during the business year 2011 amounted to TEUR 1,050 (last year: TEUR 909).

31.12.2011

7,720

1,318

9,039

in TEUR

obligation for severance payments

obligation for anniversary-bonus-payments

31.12.2010

7,668

1,221

8,888

Severance Anniversary bonus

2011

7,668

53

7,720

in TEUR

obligation as of Jan., 1st

Change

obligation as of Dec., 31st

2010

7,238

430

7,668

2010

1,417

-196

1,221

2011

1,221

98

1,318

AnnuAl RepoRt 2011


105

The change in the liabilities is composed of:

The relevant accounting and valuation principles are explained under item III.

All significant actuarial parameters have developed during the reporting years 2007 until 2011 as follows:

Neither in the business year nor in the previous year investment gains or losses were generated.

20. OTHER PROVIsIONs

The provisions for restructuring are related to costs for job cuts and other costs in connection with the necessary reorga-nization measures.

Severance Anniversary bonus

2011

423

345

-1,050

334

53

in TEUR

Defined obligations

Service cost

Interest cost

payments

Actuarial profit/loss

2010

426

398

-749

355

430

2010

100

77

-39

-334

-196

2011

65

53

-45

25

98

2007

5.50 %

2.00 %

60/65

value date

Interest

Wage increase

Retirement age Women/Men

2008

5.50 %

3.00 %

60/65

2010

4.50 %

2.50 %

60/65

2009

5.50 %

3.00 %

60/65

2011

5.00 %

3.00 %

60/65

01.01.2011

127

22

149

in TEUR

Non-current provisions

provisions for future losses

other non-current provisions

Auflösung

0

0

0

verbrauch

127

0

127

Zuweisung

147

2

148

31.12.2011

147

24

170

01.01.2011

1,226

1,501

557

121

60

2,379

5,845

in TEUR

Current provisions

provisions for future losses

Warranty provisions

Restructuring provisions

provisions for liability risks

provisions for litigations and claims

other current provisions

Auflösung

43

29

306

0

60

793

1,231

verbrauch

986

404

51

121

0

1,543

3,105

Zuweisung

344

179

0

40

0

1,296

1,859

31.12.2011

541

1,248

200

40

0

1,339

3,368

AnnuAl RepoRt 2011

106

21. FINANcIAL LIAbILITIEs

The item “financial liabilities” consists of the following:

Liabilities to banks include liabilities which were subordinated in the year 2005 in the amount of TEUR 6,961 (last year: TEUR 6.961).

In the course of the restructuring of the Group’s funding a basic agreement in regards to the refinancing of the part of the bond, stipulated at long-term, amounting to TEUR 5,000 was established.

22. OTHER LIAbILITIEs

As of balance sheet day following other liabilities existed:

31.12.2011

95,348

15,891

5,000

0

100,348

15,891

8,474

3,031

108,822

18,922

in TEUR

Non-current financial liabilities (maturity > 1 year)

Bank loans incl. subordinated liabilities

thereof maturity > 5 years

Bonds


Non-current interest bearing liabilities


Liablilities from finance lease



31.12.2010

94,484

26,658

9,431

0

103,915

26,658

9,223

2,849

113,139

29,508

31.12.2011

39,533

3,431

2,718

2,594

48,277

in TEUR

Current financial liabilities (maturity < 1 year)

Bank loans

Bonds

Current financial liabilities (maturity < 1 year)

other financial liabilities

31.12.2010

23,136

0

3,198

5,982

32,315

in TEUR

Non-current liabilities (maturity > 1 year)



other non-financial liabilities



31.12.2011

516

0

1,095

0

1,611

0

31.12.2010

2,282

0

1,661

0

3,943

0

AnnuAl RepoRt 2011


107

The other non-financial liabilities primarily refer to taxes and social security contributions.

VI. RIsKs, cAPITAL mANAgEmENT ANd FINANcIAL INsTRUmENTs

23. RIsKs

Within the contact of its global business operations, the HTI Group is subject to numerous risks which could impact its financial position and earnings:

Market risks: The Group is active in a number of sales markets, in order to achieve a substantial risk balance regarding deviations in demand. The individual sales markets however show different but also some similar risks. The segments plastics- and metals processing primarily supply the automotive- and commercial truck industry. It is the task to achieve a sensible distribution in regards to customers and product life cycles, in order not to become dependent on individual customers or to be hit by the phase-out of products. The companies in the field of mechanical engineering supply different markets with different products, thus resulting in a good risk balance. However, at this moment almost all sales markets are affected by the global financial- and economic crisis.

Procurement risks: Within the group‘s companies a certain level of dependency regarding procurement is fact. This is caused by the permanent need of relevant raw materials like special plastic granules, aluminium, copper, steel and also energy, where the group is subjected to changes in the markets although always more than one supplier exists. A depen-dency on single suppliers is the exception and if it does exist, it is due to a long-lasting business relationship.

Solvency risks on one hand result from the possibility that customers are not in the position to carry out their payment obligations within the common payment period. In order to meet this risk the solvency of the customers is examined on a regular basis. on the other hand, especially as a result of the financial- and economic crisis the Group is depending on external solvency from the financing banks’ side, in order to compensate negative cash flows. The Group’s mother com-pany takes care of sufficient liquid funds and an appropriate credit limit financing, assuring that the Group and its mem-bers are able to meet their financial obligations. Not required liquid funds are being short-term assessed.

For the central solvency control a solvency reporting, carried out every two weeks is implemented, providing the basis for optimisation of solvency.

31.12.2011

29,453

19,365

48,817

in TEUR

Current liabilities (maturity < 1 year)

Accounts payable

other non-financial liabilities incl. accruals

31.12.2010

25,161

13,054

38,215

AnnuAl RepoRt 2011

108

Credit risk or the risks of payment delays of contractual partners are examined by credit reports, credit limits and exa-mination routines. In order to cut the risk of non-payment, the Group makes use of governmental export guarantees or similar guarantees of private institutions. The credit risk, connected with investments in solvent funds or securities is limited by the fact that the Group does only work with financing partners of a high creditworthiness.

Foreign currency risks are of insignificant importance, 95% of all receivables and 99% of all liabilities are stated in EUR and are being hedged from case to case. As of balance sheet date one pending hedge deal existed in the amount of TUSD 240 (last year: TEUR 0). The negative market price in the amount of TEUR 9 was stipulated as provision for future risks.

The interest rate risk with financial investments and –liabilities are of insignificant importance to the Group. Derivative interest instruments are only used to a very small extent. As of balance sheet date no interest swaps are outstanding (last year: total nominal value TEUR 0).

Interest and averagely weighted interest rate analysis of financial assets:

Average interest rate

0.00 %

3.06 %

0.00 %

0.00 %

5.00 %

0.20 %

1.88 %

variable interest

0

510

0

0

2,007

4,070

6,587

No interest

744

79

30,696

469

564

1,433

33,985

Fixed interest

0

0

0

0

0

0

0

Average interest

0.00 %

0.00 %

0.00 %

0.00 %

0.00 %

0.00 %

0.00 %

in TEUR

other financial assets - investments

other financial assets - securities

(available for sale)

Receivables

Receivables from affiliated and

associated companies


and assets


Total


744

589

30,696

469

2,571

5,503

40,572

Interest rate analysis financial assets


0.00 %

3.51 %

0.00 %

0.00 %

0.00 %

0.03 %

0.81 %

variable interest

0

496

0

0

0

1,707

2,203

No interest

1,316

74

34,380

449

660

2,748

39,627

Fixed interest

0

0

0

0

0

15

15

Average interest

0.00 %

0.00 %

0.00 %

0.00 %

0.00 %

0.03 %

0.03 %

in TEUR



(available for sale)

Receivables




and assets


Total


1,316

570

34,380

449

660

4,470

41,844


AnnuAl RepoRt 2011


109

Interest and averagely weighted interest rate analysis of financial liabilities:

Besides the exchange rate- and interest rate risk the HTI Group is also subject to other market price risks: a change in customer’s demand and whole industries can lead to a plunge in sales of products and subsequently to a plunge of tur-nover revenues. price change risks, caused by increasing material prices may lead to lower contribution margins and subsequently to losses. In order to meet these risks, HTI installed a central purchase management for precise monitoring of material and component prices.

24. cAPITAL mANAgEmENT

In autumn 2010 the Management Board held discussions with the pool banks regarding the future funding of the compa-ny, since the timely limited interest- and repayment moratorium was to expire by end of 2010. Based on an externally made plausible forecast for the group’s companies and hence also the Group for the years 2011 – 2015, a concept for the restructuring of the Group’s financing was established and presented by the Management Board and the pool leader to the other pool banks. Based on the principle agreement dd. December 2010 between the company and the pool bank it was agreed to implement this restructuring quickly. key items thereof were:

— New structuring of the repayment periods of existing debts — Harmonization of conditions— Implementation of the debenture bond 2011 and the conversion bond 2011 — Agreements in regards to necessary extensions of funding for investments and working capital


3.35 %

4.26 %

2.43 %

0.00 %

0.00 %

3.39 %

variable interest

134,347

11,192

5,000

0

0

150,539

No interest

0

0

0

29,453

3,111

32,564

Fixed interest

534

0

3,431

0

0

3,965

Average interest

7.00 %

0.00 %

6.88 %

0.00 %

0.00 %

6.89 %

in TEUR

Bank loans

Finance lease obligations

Bonds

Accounts payable


Total


134,881

11,192

8,431

29,453

3,111

187,068



3.32 %

3.63 %

0.00 %

0.00 %

0.00 %

4.02 %

variable interest

117,620

12,421

0

0

0

130,041

No interest

0

0

0

25,161

8,263

33,425

Fixed interest

0

0

9,431

0

0

9,431

Average interest

0.00 %

0.00 %

6.88 %

0.00 %

0.00 %

6.88 %

in TEUR

Bank loans


Bonds

Accounts payable


Total


117,620

12,421

9,431

25,161

8,263

172,897


AnnuAl RepoRt 2011

110

In the end, the Management Board expected that the financing of the Group is structured in a way, that the company has got all net necessary funds for regular operation of the individual companies as well as for fulfilling their repayment ob-ligations and that the repayment obligations are adjusted towards the repayment capability of the individual companies, a stable future economy provided.

The restructuring of the Group’s funding was implemented in the year 2011.

Depending on the reception capacity of the Austrian capital market and an appropriate development of the Group the Management Board intends to further improve the equity situation through capital increases or similar actions.

25. FINANcIAL INsTRUmENTs

cARRYINg AmOUNTs, FAIR VALUEs ANd VALUATION

The carrying amounts and valuation of the financial assets (financial instruments on the assets side) consist of the following classes or valuation categories pursuant to IAS 39 or IAS 17:

Fair value

not affecting income

statement

x

x

Fair value affecting

income statement

x

Cost

x

Amortized cost

x

x

x

x

valuation category according

to IAS 39

Available-for-

sale (at cost)

Available-for-sale

Loans and receivables


Trading


Available-for-sale


valuation according to IAS 17in TEUR



(available-for-sale)

Receivables



Interest rate swaps


and assets

Marketable securities


Total

Fair value 31.12.2011

744

589

30,696

469

0

2,571

0

5,503

40,572


744

589

30,696

469

0

2,571

0

5,503

40,572

valuation according to IAS 39

AnnuAl RepoRt 2011


111

Cash and cash equivalents, trade accounts receivable and other financial assets primarily have short terms to maturity. For this reason, the carrying amounts on the balance sheet date come close to representing the fair values on the balan-ce sheet date. If they are of material significance, the fair values of non-current financial assets correspond to the present value of the payments related to the assets, taking account of the particular updated market parameters.

The financial instruments, evaluated at fair value (available for sale) consist exclusively of instruments of level 2. In the business year no reclassifications between the levels were done.

The carrying amounts and valuations of financial liabilities (liability side financial instruments) consist of the following classes or valuation categories pursuant to IAS 39 or IAS 17:


income statement

x

Cost

x

Amortized cost

x

x

x

x


to IAS 39

Available-for-

sale (at cost)

Available-for-sale



Trading


Available-for-sale


Fair value not affecting

income statement

x

x

valuation according to IAS 17in TEUR



(available-for-sale)

Receivables



Interest rate swaps


and assets

Marketable securities


Total


1,316

570

34,380

449

0

660

0

4,470

41,844


1,316

570

34,380

449

0

660

0

4,470

41,844



income statement

x

CostAmortized

cost

x

x

x


to IAS 39

FLAC*)

n/a

FLAC*)

FLAC*)

FLAC*)


income statement


x

in TEUR

Bank loans


Bonds

Accounts payable


Total


134,881

11,192

8,846

29,453

3,111

187,483


134,881

11,192

8,431

29,453

3,111

187,068


*) FLAC … Financial liabilities at amortised cost

AnnuAl RepoRt 2011

112

Trade payables regularly have short terms to maturity. For this reason, the carrying amounts on the balance sheet date come close to representing the fair values on the balance sheet date. If they are of material significance, the fair values of liabilities to banks, finance lease liabilities and loans and borrowings correspond to the present value of the payments related to the liabilities, taking account of the respective updated market parameters.

ANALYsIs OF cONTRAcTUALLY sTIPULATEd cAsH FLOws

The contractually agreed (undiscounted) cash flows (interest and repayment) of financial liabilities are comprised of the following:


income statement

x

CostAmortized

cost

x

x

x


to IAS 39

FLAC*)

n/a

FLAC*)

FLAC*)

FLAC*)


income statement


x

in TEUR

Bank loans


Bonds

Accounts payable


Total


117,620

12,421

10,633

25,161

8,263

174,099


117,620

12,421

9,431

25,161

8,263

172,897


*) FLAC … Financial liabilities at amortised cost

Repay-ment

6,709

2,718

3,431

29,453

2,594

44,906

Repay-ment

75,434

5,443

5,000

0

516

86,393

Repay-ment

52,738

3,031

0

0

0

55,770

Interest variable

5,551

498

95

0

0

6,145

Interest variable

16,924

1,460

510

0

0

18,895

Interest variable

5,274

845

0

0

0

6,119

Interest fix

37

0

116

0

0

154

Interest fix

121

0

0

0

0

121

Interest fix

0

0

0

0

0

0

in TEUR

Bank loans


Bonds

Accounts payable


Total

Fair Value 31.12.2011

134,881

11,192

8,846

29,453

3,111

187,483


134,881

11,192

8,431

29,453

3,111

187,068

Cash Flows 2012 Cash Flows 2013 – 2017 Cash Flows from 2017

AnnuAl RepoRt 2011


113

The chart encompasses all financial instruments which were in the company’s portfolio at the balance sheet date, and for which payment has been contractually stipulated. Target figures for new financial liabilities in the future are not included. Foreign currency amounts are calculated at the exchange rate on the balance sheet date. variable interest rate payments of financial instruments are based on the fixed interest rates which prevailed before the balance sheet date. Financial liabilities which are repayable prematurely are reported at the earliest period.

NET REsULTs FROm FINANcIAL INsTRUmENTs

The net results from financial instruments according to classes or valuation categories pursuant to IAS 39 are comprised of the following:

From disposal

7

0

0

7

From value adjustment

-154

0

0

-154

From subsequent measurement at

fair value

0

16

0

16

From interest

413

0

-5,292

-4,879

Total

266

16

-5,292

-5,010

2011in TEUR


Available-for-sale financial assets

Financial liabilities at

amortised cost

Total

From disposal

-98

0

0

-98

From value adjustment

-464

0

0

-464

From subsequent measurement at

fair value

0

18

0

18

From interest

875

0

-6,824

-5,949

Total

313

18

-6,824

-6,493

2010in TEUR


Available-for-sale financial assets

Financial liabilities at

amortised cost

Total

Repay-ment

1,895

3,198

0

25,161

5,982

36,236

Repay-ment

33,884

6,374

9,431

0

2,282

51,971

Repay-ment

81,841

2,849

0

0

0

84,690

Interest variable

4,046

369

0

0

0

4,415

Interest variable

18,233

1,037

0

0

0

19,270

Interest variable

9,207

925

0

0

0

10,132

Interest fix

0

657

0

0

657

Interest fix

0

0

329

0

0

329

Interest fix

0

0

0

0

0

0

in TEUR

Bank loans


Bonds

Accounts payable


Total

Fair Value 31.12.2011

117,620

12,421

10,633

25,161

8,263

174,099


117,620

12,421

9,431

25,161

8,263

172,897

Cash Flows 2011 Cash Flows 2012 – 2015 Cash Flows from 2016

AnnuAl RepoRt 2011

114

sENsITIVITY ANALYsIs

In order to present the key market risks arising from the use of financial instruments, IFRS 7 ‘Financial Instruments: Disclosures’ requires companies to perform sensitivity analyses, which demonstrate the effects of hypothetical changes of relevant risk variables on profit or loss and equity. The HTI Group is primarily subject to interest rate risk from financi-al instruments with variable interest rates (cash flow risk). For this reason, corresponding sensitivity analyses were carried out for this market risk. The portfolio of financial instruments utilised by the HTI Group on the balance sheet date served as the basis for deter-mining the potential effects of hypothetical changes in the risk variables. The underlying assumption is that the risk on the balance sheet date closely represents the risk during the entire business year. Efforts to counteract risks, for examp-le through the use of derivative financial instruments, were also taken into account. The Group corporate tax rate of 25% was applied.

A change in the market interest rate of 100 basis points (= 1%) on the balance sheet date would have resulted in an incre-ase or decline in earnings (after tax) as well as equity by the following amounts, which is presented in the following chart:

This analysis assumed that all other variables remain constant, in particular exchange rates. The sensitivity of equity was only influenced by earnings (after tax) in the above mentioned analysis.

dERIVATIVE FINANcIAL INsTRUmENTs

As of balance sheet date 31.12.2011 no interest swaps existed.

As of balance sheet date one pending foreign exchange contract existed in the amount of TUSD 240 (last year: TEUR 0).

Decrease of 100 basis points

1,050

938

in TEUR

31.12.2011

31.12.2010

Increase of 100 basis points

-1,050

-938

AnnuAl RepoRt 2011


115

The consolidated cash flow of HTI AG is presented according to the indirect method.

Cash and cash equivalents include cash at hand and cash at banks. Available for sale securities and bank overdrafts are not classified as cash and cash equivalents.

26. cONsOLIdATEd cAsH FLOw FROm OPERATINg AcTIVITIEs

The consolidated cash flow from operating activities includes the following interest and tax payments:

VIII. sEgmENT REPORT

The segment report is portrayed in the annex 2 to the notes to the consolidated financial statement.

IX. OTHER INFORmATION

27. cONTINgENT LIAbILITIEs, gUARANTEEs ANd OTHER FINANcIAL ObLIgATIONs

Contingencies are non-balanced contingency liabilities. The total amount as of December 31, 2010 is TEUR 1,593 (last year: TEUR 2,216). This includes contingencies from financial obligations in favor of not consolidated Group member companies and companies with investment ratios in the amount of TEUR 562 (last year: TEUR 144).

VII. cONsOLIdATEd cAsH FLOw sTATEmENT

in TEUR

Interest received

Interest paid

Tax payment

2011

304

-4,792

-50

2010

813

-3,802

-21

AnnuAl RepoRt 2011

116

28. REsEARcH ANd dEVELOPmENT

In the business year 2011 a total of TEUR 7,605 (last year: TEUR 3,023) was invested in research and development. Thereof TEUR 1,128 (last year: TEUR 526) are shown in the other operational expenses.

29. PURcHAsE cOmmITmENTs

obligations resulting from contracts pertaining to investments in property, plant and equipment are of minor significance.

30. EARNINgs PER sHARE

The earnings per share 2011 was EUR – 0.07 and was calculated on the basis of the consolidated net result of TEUR -2,224 and the average number of issued shares amounting to 33,730,619 pieces. The current number of issued shares amounts to 45,583,944 pieces. As of balance sheet date, the Group does not hold any treasury shares.

Earnings per share are diluted from the debenture bonds (refer to item 18 – equity) in the amount of TEUR 14,350. The diluted earnings per share in the business year 2011 amount to EUR -0.06.

31. sUggEsTION FOR UsE OF REsULT

on the occasion of the Annual General Meeting the Management Board will suggest to carry forward the annual result to the next year.

32. EVENTs AFTER THE REPORTINg PERIOd

In the year 2010 the company discussed and implemented a restructuring of the Group’s finances with their financing partners based on a mid-term forecast. Due to the development of earnings, the investments and especially the increase in working capital in 2011 and at the beginning of the year 2012 it had been made necessary to lead discussions about the funding of these capital requirements with the existing financing partners. In April 2012 the company was able to reach an agreement with RLB Steiermark as their pool leader for covering the pending financial obligations, including new credits and prolongations in the amount of EUR 12 million with a main maturity of 1 to 2 years. In the course of the Group’s and the financing management however, the Group is required to strengthen their intrinsic funding capabilities in order to be able to fulfill their funding obligations for the forecasted growth as well as the intended investments and actions for optimization primarily on their own without having to involve their financing partners. Hereto the company permanently evaluates the Group’s structure and strategic positioning of the individual Group companies, in order to be able to realize possible positive effects for the whole Group.

AnnuAl RepoRt 2011


117

33. RELATEd PARTY dIscLOsURE

The following chart shows the receivables and payables of related parties as well as the realized costs and revenues with related parties during the business year 2011:

1) Nikolaus kretz is sole owner of ABCMN vermögensverwaltungs GmbH.2) ABCMN holds a 25% share of curecomp.3) peter Glatzmeier is the sole owner of Glatzmeier Beteiligungs GmbH.4) Glatzmeier Beteiligungs GmbH holds 50% of the shares of GHI Immobilien GmbH.5) Glatzmeier Beteiligungs GmbH holds 64% of the shares of Murtal-Golf Errichtungs- und Betriebs-GmbH.6) Astor Industriebeteiligung GmbH and Astor privatstiftung can be attributed to Mr. kurt Helletzgruber.

in TEUR

Wuhu Conch Theysohn Extrusion Equipment Co. Ltd

TMT-BBG Research and Development GmbH

S.p.I. LLC

High Tech Molds s.r.l.

ZF Getränke GmbH

Associated companies and Joint Ventures

ooo Theysohn

Theysohn Extrusionstechnik (I) pvT LTD

Roaring Lion Trading GmbH / GmbH & Co kG

Closely related companies

ABCMN vermögensverwaltungs GmbH 1)

curecomp Software Services GmbH 2)

Glatzmeier Beteiligungs GmbH 3)

GHI Immobilien GmbH 4)

Murtal-Golf Errichtungs- und Betriebs-GmbH 5)

Astor Industriebeteiligung GmbH und

Astor privatstiftung 6)

Gerd-Dieter Mirtl

Willilbald Dörflinger

Fritz kretz

Hannes Androsch

Bruno krainz

Franz Rossler

Closely related persons

Closely related companies and persons

2011

0

157

0

0

80

237

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

237

2010

0

2,035

0

0

96

2,131

0

0

0

0

0

0

2

0

0

0

0

0

0

0

0

0

2

2,133

Earnings

2011

2

1

0

0

300

303

0

40

109

149

1,006

0

1,255

0

0

0

0

0

0

0

0

0

2,261

2,713

2010

0

0

0

0

113

113

0

15

109

124

0

0

189

0

0

0

0

0

0

0

0

0

189

426

Receivables

2011

0

71

0

0

0

71

6

0

0

6

122

190

207

0

0

6

0

0

0

0

0

0

525

602

2010

0

0

0

0

0

0

0

0

0

0

227

0

197

0

0

202

0

0

0

0

0

0

626

626

Liabilities

2011

0

329

0

0

0

329

118

85

0

203

105

811

129

265

13

6

8

6

6

4

4

4

1,360

1,892

2010

0

0

0

0

0

0

130

99

0

229

15

0

39

247

0

49

3

5

1

4

2

2

365

594

Expenses

AnnuAl RepoRt 2011

118

The Wuhu Conch Theysohn Extrusion Equipment Co. Ltd. is a Joint venture with Wuhu Conch Co. Ltd. in China. via HTE High Tech Engineering Holding GmbH the Group holds a 30% share. It is the common objective with the local partner to transfer know-how to China by High Tech Extrusion GmbH (former Theysohn Extrusionstechnik GmbH) on one hand and to utilize the on-site production and marketing capacities of the Chinese partner on the other hand. The reflected balan-ce amounts mainly consist of transfers and further invoicing.

The ooo Theysohn in Russia and Theysohn Extrusionstechnik (I) pvT LTD in India are direct investments of High Tech Extrusion GmbH which are not consolidated due to insignificance. The main business fields of both companies are the arrangements of business deals in the individual regions. The expenses as per balance sheet are further invoicing of operating expenses and commission expenses.

ABCMN vermögensverwaltungs GmbH is owned by Nikolaus kretz. The stated expenses concern further invoicing of vehicle expenses and interest as well as expenses from the sale & lease back transaction as explained under item 10.

ABCMN vermögensverwaltungs GmbH helds a 25% share of curecomp Software Services GmbH. The stated expenses concern IT-Services of curecomp Softwares Services GmbH to HTI Group companies.

Glatzmeier Beteiligungs GmbH is owned by peter Glatzmeier. The stated liability results of further invoicing of expenses and other services as well as expenses from the sale & lease back transaction as explained under item 10. GHI Immobilien GmbH is 50% owned by Glatzmeier Beteiligungs GmbH and is the owner and lessee of the facilities in kapfenberg, used by BBG Baugeräte GmbH.

The Murtal-Golf Betriebs- und Errichtungs-GmbH is in 64% possession of Glatzmeier Beteiligungs GmbH. The expenses concern further invoicing of other services.

Astor Industriebeteiligung GmbH and Astor privatstiftung GmbH are attributable to kurt Helletzgruber via the Astor pri-vatstiftung. The expenses result from interest.

34. bOARd ANd sTAFF INFORmATION

As of balance sheet date 1,504 members of staff were employed within the Group (last year: 1,399), thereof 171 hired workers were working for the HTI Group (last year: 173). The annual average of hired staff was 186 (last year: 144).

Remuneration paid to the members of the Management Board in 2011 was TEUR 641 (last year: TEUR 522).

2010

1,501

995

506

2011

1,526

1,002

524

Average number of employees

Total

Thereof workers

Thereof employees

AnnuAl RepoRt 2011


119

mANAgEmENT bOARd

PETER GLATzMEIERChairman, CEoMember since February 01, 2007; Chairman since January 01, 2008; appointment until December 31, 2016

NIKOLAUS KRETzMember, CFosince May 31, 2007, appointment until December 31, 2016

KARLHEINz WINTERSBERGERMember, Coosince May 31, 2007, appointment until December 31, 2011

sUPERVIsORY bOARd

GERD-DIETER MIRTLChairmansince December 20, 2004, appointment until the AGM 2014

WILLIBALD DöRFLINGERDeputy ChairmanMember since August 04, 2009; Deputy Chairman since August 21, 2009; appointment until the AGM 2014

FRITz KRETzDeputy Chairmansince December 20, 2004, appointment until the AGM 2014

HANNES ANDROSCHMembersince August 04, 2009, appointment until the AGM 2014 BRUNO KRAINzMembersince July 01, 2008, appointment until April 18, 2012

FRANz ROSSLERMembersince May 26, 2004, appointment until the AGM 2014

AnnuAl RepoRt 2011

120

To the members of the Supervisory Board remunerations in the amount of TEUR 31 (last year: TEUR 32) were paid. No loan guarantees or corporate loans have been granted by companies within the HTI Group to members of the Manage-ment- or Supervisory Board.

The consolidated financial statements were brought to the attention of the Supervisory Board this day.


The Management Board

peter Glatzmeier m.p. Nikolaus kretz m.p.

Annex 1 to the Notes: Asset AnalysisAnnex 2 to the Notes: Segment ReportAnnex 3 to the Notes: Group Investments

AppENDIx To THE NoTES To THE CoNSoLIDATED

FINANCIAL STATEMENTSAnnex 1 to the Notes: Asset Analysis

Annex 2 to the Notes: Segment Report

Annex 3 to the Notes: Group Investments

AssET ANALYsIs 2011

in TEUR

Goodwill

Trade mark, customer base

Concessions, trade marks, rights and licenses

Development costs

prepayments and assets in construction

Intangible assets

property, buildings and construction on third party land

Technical equipment and machinery

other equipment, furniture

and fittings

Motor vehicles


Fixed assets

Foreigncurrencydifferences

-1

1

Asset costper 01.01.2011

38,741

12,144

12,983

10,238

1,213

75,319

76,798

92,423

33,391

1,128

4,042

207,782

283,101

in TEUR

Goodwill



Development costs


Intangible assets

property, buildings and construction on third party land


other equipment, furniture

and fittings

Motor vehicles


Fixed assets

Foreign currencydifferences

-1

1

-1

-1

Accumulateddepreciation per 01.01.11

5,970

5,013

7,470

4,069

22,522

22,003

62,647

29,159

961

4

114,773

137,295

development of depreciation, appreciation and amortisation

development of costs

AnnuAl RepoRt 2011

122

Appendix 1 to the Notes

Reclassifications

-70

593

308

-181

649

3,295

78

-4,022

-649

Disposals

783

1,669

2,452

9,583

12,790

931

209

67

23,580

26,032

Additions

3,382

5,884

766

10,033

1,464

4,249

1,662

1,091

2,667

11,133

21,166


38,741

12,074

16,175

16,429

129

83,549

68,680

87,176

34,200

2,009

2,620

194,685

278,234

Disposals

768

768

6,630

10,842

670

160

18,303

19,070

Additions

342

755

1,405

2,502

2,135

4,405

1,458

133

8,131

10,633

Reclassifications

Accumulateddepreciation per

31.12.11

5,970

5,355

7,457

5,474

24,256

17,507

56,208

29,947

935

4

104,601

128,857

Net bookvalue 31.12.11

32,771

6,719

8,717

10,955

129

59,292

51,173

30,967

4,253

1,075

2,615

90,083

149,375


32,771

7,131

5,513

6,168

1,213

52,796

54,796

29,775

4,232

167

4,037

93,006

145,802

AnnuAl RepoRt 2011

123

AssET ANALYsIs 2010

in TEUR

Goodwill



Development costs


Intangible assets

property, buildings and constrction on third party

land



Motor vehicles


Fixed assets


1

1

1


38,741

12,039

12,396

8,249

1,502

72,927

79,754

90,340

33,347

1,120

3,400

207,961

280,888

in TEUR

Goodwill



Development costs


Intangible assets

property, buildings and constrction on third party

land



Motor vehicles


Fixed assets

Additions

325

705

1,563

2,593

2,194

4,673

1,700

86

8,652

11,245


1

1

1

Accumulateddepreciation per 01.01.10

5,970

1,987

10,236

3,015

21,208

20,576

61,143

29,233

968

4

111,923

133,131

development of depreciation, appreciation and amortisation

development of costs

AnnuAl RepoRt 2011

124


Reclassifications

1,584

-1,501

83

24

5,474

283

77

-2,867

2,991

3,074

Disposals

1,387

508

126

2,021

3,473

7,098

1,993

191

451

13,206

15,227

Additions

105

390

2,497

1,339

4,331

493

3,706

1,754

121

3,960

10,034

14,365


38,741

12,144

12,983

10,238

1,213

75,319

76,798

92,423

33,391

1,128

4,042

207,782

283,101

Disposals

848

508

1,356

282

5,184

1,818

161

41

7,486

8,842

Write-ups

-505

-159

1

-663

-663

Reclassifications

2,701

-2,623

-1

77

19

2,015

203

68

41

2,346

2,423

Accumulateddepreciation per

31.12.10

5,970

5,013

7,470

4,069

22,522

22,002

62,647

29,159

961

4

114,773

137,295


32,771

7,131

5,513

6,168

1,213

52,796

54,796

29,776

4,232

167

4,037

93,006

145,802


32,771

10,052

2,160

5,234

1,502

51,718

59,178

29,197

4,115

152

3,396

96,038

147,756

AnnuAl RepoRt 2011

125

sEgmENT REPORTmarket segment information


TEUR

Revenue

operative earnings before interest, tax, depreciation

and amortisation (EBITDA)

Depreciation, write-ups &

amortisation

operative earnings before interest and tax (EBIT)

Earnings before tax


Segment assets

Segment liabilities

Total

206,991

14,699

-10,633

4,066

-2,314

-2,224

261,929

221,118


114,651

8,784

-7,135

1,650

-1,755

-3,304

129,417

125,399

Engineering

46,937

3,208

-1,826

1,382

6,153

3,615

79,392

53,805

Energy Technology

45,566

4,099

-1,064

3,034

2,856

2,207

38,195

22,129

other

0

-1,250

-377

-1,627

-7,479

-2,654

154,113

65,995

Consoli-dation

-163

-141

-230

-371

-2,089

-2,089

-139,189

-46,211

Segment reporting 01.01.-31.12.2011

TEUR

Revenue

operative earnings before interest, tax,

depreciation and amortisation (EBITDA)

Depreciation, write-ups &

amortisation

operative earnings before interest and tax (EBIT)

Earnings before tax


Segment assets

Segment liabilities

Total

193,006

13,489

-10,582

2,907

-3,979

-3,930

241,907

203,605


97,560

6,733

-6,982

-249

-4,653

-4,731

136,665

129,858

Engineering

52,432

5,962

-2,333

3,629

4,650

1,212

64,462

42,614

Energy Technology

43,045

3,420

-990

2,431

2,304

1,824

36,911

20,874

other

0

-2,629

-90

-2,719

1,907

4,511

136,606

59,888

Consoli-dation

-31

4

-188

-184

-8,187

-6,747

-132,737

-49,628

Segment reporting 01.01.-31.12.2010

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gROUP INVEsTmENTsAppendix 3 to the Notes

Head office

St. Marien bei Neuhofen



kapfenberg

Bezons Cedex


Linz

korneuburg

kirchdorf an der krems

Salzgitter


Micheldorf

Micheldorf

Neudörfl an der Leitha

Fohnsdorf

Neudörfl an der Leitha

vráble

Bukarest

Straßlach

Leoben

Connaught Ct.




kent

Nominal capitalin thousands

(local currency)

35

4,500

35

100

765

37

582

1,352

36

50

35

35

36

2,750

35

35

4,131

2,564

26

18

1

8,000

36

35

0

Country

A

A

A

A

F

A

A

A

A

D

A

A

A

A

A

A

Svk

Ro

D

A

USA

A

A

A

Uk

Group interest %

100.00

100.00

100,00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

63,00

Currency

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EUR

RoN

EUR

EUR

USD

EUR

EUR

EUR

GBp

Consolida-tion method

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

FC

Company

1. Investments in subsidiaries

(fully consolidated companies)

HTM High Tech Materials GmbH

Gruber & kaja High Tech Metals GmbH

HTE High Tech Engineering Holding GmbH

BBG Baugeräte GmbH

FAvRE s.a.r.l

Elektromaschinenbau GmbH

Hitzinger GmbH

(former Dipl. Ing. Hitzinger GmbH)

High Tech Extrusion GmbH

Topf kunststofftechnik GmbH

Extruder komponenten Salzgitter GmbH

Technoplast Holding GmbH

poLkAM kunststofftechnik GmbH

(former Technoplast kunststofftechnik GmbH)

Technoplast kunststofftechnik GmbH & Co. kG

HTp Holding GmbH

HTp High Tech plastics GmbH

HTp Electronics GmbH

HTp Slovakia vráble s.r.o.

HTI High Tech Industries s.r.l.

HTp Germany GmbH

JS vermögensverwaltung GmbH

HTp High Tech plastics U.S. Inc.

proRegio Beteiligungs GmbH

HTI Invest & Consult GmbH

HTI personalmanagement GmbH

Hitzinger Uk Limited

FC = Fully consolidated; EC = Consolidated at equity; NC = Not consolidated

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gROUP INVEsTmENTsAppendix 3 to the Notes

Head office

Celeste

Wuhu, Anhui

Brasov

kapfenberg

St. Nikolai

Wien

Linz

Linz

Guntramsdorf

Moskau

pune

Nominal capital in thousands

(local currency)

1,000

30,000

2,250

36

35

36

35

10

118

10

2,500

Country

USA

CN

Ro

A

A

A

A

A

A

RU

IND

Groupinterest %

26.00

30.00

30.00

33.33

50.00

30.00

25.10

25.10

20.49

100.00

100.00

Currency

USD

RMB

RoN

EUR

EUR

EUR

EUR

EUR

EUR

RUB

INR

Consolida-tion method

EC

EC

EC

EC

EC

NC

NC

NC

NC

NC

NC

Company

2. Investments in associated companies

(Equity-method)

S.p.I. LLC

Wuhu Conch Theysohn Extrusion

Equipment Co. Ltd.

High Tech Molds s.r.l.

TMT BBG Research and Development GmbH

ZF Getränke GmbH

3. Investments, not included

in consolidation

young Enterprises Media GmbH

Roaring Lion Trading GmbH

Roaring Lion Trading GmbH & Co kG

ECo-SpIN kraftstofftechnik GmbH

ooo Theysohn

Theysohn Extrusionstechnik (I) pvT Ltd

FC = Fully consolidated; EC = Consolidated at equity; NC = Not consolidated

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128

AUdITOR’s REPORT

AUdITOR‘s REPORT

REPORT ON THE cONsOLIdATEd FINANcIAL sTATEmENTs

We have audited the accompanying consolidated financial statements of

HTI High Tech Industries AG,St. Marien bei Neuhofen

for the reporting period from 1 January 2011 to 31 December 2011. These consolidated financial statements comprise the consolidated balance sheet as at 31 December 2011, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and consolidated cash flow statement for the year ended 31 December 2011 and a summary of significant accounting policies and other explanatory notes.

Management‘s Responsibility for the Consolidated Financial Statements and for the Accounting System

The Company’s management is responsible for the group accounting system and for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs) as adop-ted by the EU. This responsibility includes: designing, implementing and maintaining internal control relevant to the prepa-ration and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reaso-nable in the circumstances.

Auditor‘s Responsibility and Description of Type and Scope of the Statutory Audit

our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and in accordance with International Standards on Auditing (ISAs), issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accoun-tants (IFAC). Those standards require that we comply with professional guidelines and that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor‘s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assess-ments, the auditor considers internal control relevant to the entity‘s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity‘s internal control. An audit also includes evaluating the appropri-ateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

our audit has resulted in the following objections:

The brand “Gruber & kaja” was not impaired. In our opinion the safety allowance on EBIT has to be increased to 20 % (instead of 10 %) reflecting the existing uncertainty of planning and history of recent losses. This leads to an impairment loss in the

AnnuAl RepoRt 2011

129

amount of the book value of the brand of TEUR 2,700. The loss of the year would increase by TEUR -2,464 to TEUR -4,688. The shareholder’s equity would be reduced to TEUR 38,347.

In our opinion, which is based on the results of our audit, except for the effects of the matter described above, the consoli-dated financial statements comply with legal requirements and give a true and fair view, with aforementioned exception, of the financial position of the Group as of 31 December 2011 and of its financial performance and its cash flows for the year from 1 January 2011 to 31 December 2011 in accordance with International Financial Reporting Standards (IFRSs) as adop-ted by the EU.

Without further qualifying our opinion we draw attention to the following items:

Measurement of goodwill (TEUR 32,771), the capitalised development costs (TEUR 10,955) and the deferred tax assets (TEUR 11,032) was based on planning-assumptions. possible negative deviations, which actually cannot be excluded, may lead to material impairment losses concerning goodwill, capitalised development costs and deferred tax assets recognized. We draw your attention specially to chapter III of the notes “Accounting policies”, item ”goodwill“ and item “Estimates and Assumptions”.

The realisation of the Group´s future development presented by the management as well as secureing of the liquidity (see notes chapter I. Business description and Groups structure especially paragraph 5) are important basis for the Group´s future existence and the ability to continue as a going concern. In the case of unfavorable deviations to management´s planning´s the uncertainty exists, that the group is not able to realize, respectively amortize their assets and liabilities in the normal course of business. Report on the Management Report for the Group

pursuant to statutory provisions, the management report for the Group is to be audited as to whether it is consistent with the consolidated financial statements and as to whether the other disclosures are not misleading with respect to the Company’s position. The auditor’s report also has to contain a statement as to whether the management report for the Group is consis-tent with the consolidated financial statements and wheter the disclosures pursuant to Section 243a UGB (Austrian Com-mercial Code) are appropriate.

In our opinion, the management report for the Group is consistent with the consolidated financial statements. The disclosu-res pursuant to Section 243a UGB (Austrian Commercial Code) are appropriate.

Linz, 30 April 2012

kpMG Austria AGWirtschaftsprüfungs- und Steuerberatungsgesellschaft

Mag. peter Humer Mag. Ernst pichlerWirtschaftsprüfer Wirtschaftsprüfer(Austrian Certified public Accountants)

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ImprintResponsible for the content: HTI High Tech Industries AG, St. Marien

Design and layout: RABoLD UND Co. / Agency for communication and design / www.rabold.atphotos: HTI Archiv, Fotostudio Freisinger, DerRabe, Shutterstock, iStockphoto, Fotolia, Corbis

AnnuAl RepoRt 2011

131

HTI HIgH TEcH INdUsTRIEs Ag

Austria – 4502 St. Marien bei Neuhofen | Gruber & kaja Strasse 1

phone +43 3862 304-8562 | Fax +43 3862 304-7598

E-mail: [email protected]

www.hti-ag.at