Full Year Results

23rd Sep 2009 07:00



Wednesday, 23rd September, 2009

TGE MARINE AG

Full Year Results

in EUR ´000		FY 2008/ 2009		FY 2007/ 2008
Revenue		€71,502k		€95,249k
Profit from operations *, **		€11,206k		€16,661k
Profit before tax *, **		€12,381k		€17,679k
Net cash, time deposits		€49,171k		€78,460k
Undiluted Earnings per share **		€6.84		€5.92
Diluted Earnings per share **		€6.77		€5.92
* adjusted for costs of share options, amortisation, interest expenses and taxes ** FY 2007/ 2008 refers to continued operations only.

TGE Marine ("TGE" or the "Company"), a leading provider of engineering services for the design and construction of gas carriers and offshore units, today announces its Full Year Results for the year ended 30 June, 2009.

Highlights

Financial

Revenue from continuing operations down by 25% to EUR71.5m (2008: EUR95.2m)

Adjusted profits before tax down by 30%  to EUR12.4m (2008: EUR17.7m) 

Debt free following repayment of shareholder loan of EUR29.2m

Cash reserves of EUR49.2m (2008: EUR78.5m); of which EUR17.5m is restricted (2008: EUR41.3m)

Gross margin improvement from 27% to 28% 

 

Operating

Delivered 12 gas carriers (2008:13), all projects on time and on budget

21 further contracts to be completed in FY 2009/ 10 and FY 2010/11

Implementation of cost control programme on track to reduce total overheads by up to 20% for FY 2010

Delivered first combined LNG/ Ethylene carrier 

Outlook

High level of new contract enquiries 

Ageing of existing fleet expected to trigger a replacement cycle beginning in 2010 / 2011

Increased activity in LNG and CO2 markets

Commenting on the results, TGE's Chief Executive, Manfred Kuever, said:

"Over the year we have performed strongly, delivering 12 gas carriers to the international market on budget and on time. I am also pleased that despite the market conditions we have been able to improve our gross margins following the implementation of a rationalisation programme.

"However, it has been a difficult year and TGE has suffered from the substantial decrease in new shipbuilding activity since autumn 2008. Whilst we have not signed any significant new contracts in our core market we have implemented cost cutting measures and invested in new technology, including a short labour scheme, to reduce costs. 

"Looking forward, however, we remain optimistic. The ageing of the fleet in our core market of ethylene and LPG carriers, and the anticipated improvement in world financial markets, should lead to an improvement in the level of ship building activity during 2010. Given the experience and expertise of TGE, we expect to maintain our current market share when the market recovers.

"In our new markets we also continue to develop. We have invested in new technologies for the small scale LNG and CO2 markets and are well positioned to capitalize on our expertise in these growth areas.

"In summary, TGE has a robust balance sheet with no debt and a strong cash position, and, with a significant share of the market, remains extremely well positioned to benefit when the shipping cycle recovers."

Commenting on the results, TGE's Chairman, Mike Alexander, said: 

"It has been a difficult year for generating new orders and under these conditions the strategy of the Supervisory Board has been to focus on the delivery on existing contracts while developing our capabilities in new business areas (such as CO2 and LNG) .

"In addition, we have focused on controlling costs without undermining the Group's core capability or skills and are pleased to have been able to reduce our costs by approximately 20% by the end of the year. This cost reduction has allowed us to improve our overall margin.

"Looking ahead, the market remains weak as ship owners still find it difficult to raise financing to replace ageing stock but the Group is now debt free, has strong cash reserves and the skills to take advantage of opportunities in its core and new markets when market activity resumes. The Board therefore remains confident that the Group remains well placed for when the market recovers 2010/2011."

Enquiries:

 TGE Marine AG +49 (0)228 604 480

 Dr. M. Kuever, Chief Executive Officer

 Steffen Schober, Chief Financial Officer

Singer Capital Markets Limited +44 (0)20 3205 7500

Jos Trusted

James Maxwell

Pelham Public Relations +44(0)20 7337 1500 

Mark Antelme

Henry Lerwill

CHIEF EXECUTIVE'S REVIEW

Operational review

Market

The financial crisis has severely affected the shipbuilding market in general and, in particular, the bulk carrier, container and tanker business has suffered due to the substantial order book accumulated before mid 2008. TGE's core market of semi-pressurized gas carriers has, to date, been only marginally affected, as time charter rates have been stable or only slightly reduced. As ships are still operating at an age that is beyond their typical lifespan, the new building market came to a halt and ship-owners adopted a "wait and see" position prior to committing to any new orders. Consequently no new gas plant contract was awarded to TGE during 2009 although smaller engineering contracts, under which we subcontract our engineers to third parties, have helped to maintain utilisation. 

Operations

During the year we delivered 12 ships (FY08:13); 1 combined LNG/ethylene-carrier, 10 ethylene-carriers and 1 LPG-carrier. All projects were delivered on time and to budget. This represents approximately 55 per cent of the global deliveries of semi-pressurized gas carriers, a strong market share for TGE. The delivery of the world's first combined LNG/ethylene-carrier of 7,500 m3 capacity, MT "Coral Methane", was a major milestone for TGE and placed TGE at the forefront of the future market segment of small scale LNG applications.

As a result of our low activity levels in our core markets, TGE has reduced its workforce and implemented a short labour scheme as of March 09. Under this scheme the German Government will support companies for a maximum period of 24 months. This and other cost cutting measures are on track to deliver a reduction of total overheads by approximately 20% for FY2010.

In our core markets analysts are predicting the drop in activity to continue during 2009, but expect the market to recover in 2010/2011, mainly due to new cracker facilities coming on stream in the Middle East. The Chinese market has quite substantially increased importation of petrochemical gases (for example ethylene, propylene etc.) and is the main driver for growth. The age profile of the global fleet and over ageing of approximately 30% of the existing ships suggest that a pick-up in new build activities will shortly be required. However, that significant opportunity will, in our opinion, be balanced by the fact that major ship financing banks will only gradually open new facilities for shipping loans. 

So we expect the market will return during calendar year 2010, but the pace of that recovery will depend on the recovery of the global economy. 

Ethylene/LPG semi-pressurized market:

In Q1 2009, the total number of semi-pressurized gas carriers on order stood at 52 ships out of which 28 ships were for carrying ethylene. Of these 52 ships, TGE's share is 24 (46%), including 10 of the Ethylene ships (36%). 

As mentioned above, the major driver for the petrochemical gas trade is still the expanding program of crackers in the Middle East. We expect some delays in Iran, but the capacity increase in other Gulf countries will progress and growth rates of 5-6% commencing in 2010 are to be expected. 

In 2009 there will be several start-ups of world scale liquefaction facilities (Qatar, Indonesia and Russia) which will increase LPG supply as a by-product. Hence, we expect the LPG market to grow as well. 

LNG and New Markets:

Smaller carriers

With the delivery of the world's first combined LNG/ethylene of 7,500 m3 capacity, TGE has reached a major milestone for future expansion in this new market segment. We have also developed concepts for larger size LNG-carriers of up to 35,000 m3 and are actively pursuing projects for island supply of LNG as fuel for small power plants in the Mediterranean and the Caribbean. Some of these projects are gaining momentum as the US-market is not absorbing the expected quantities of LNG and the new liquefaction facilities will flood the market with LNG. 

A total new market segment for small scale LNG deliveries, which already exists in Norway, has led to increased demand for new conceptual designs, i.e. fuel supply systems for ships to substitute diesel or heavy fuel oils ("HFO"). Due to new European legislation, the SECA-zones (sulphur emission control areas of which the North Sea and Baltic Sea are already registered) will require new technologies for all types of ships and one of the most attractive options is LNG fuel supply systems. TGE has developed a novel concept for LNG fuel supply and filed a patent application in August 2009. A total new harbour infrastructure, with LNG-hubs and LNG bunker barges will be needed in order to cope with ship-owners requirements. Small LNG-carriers are destined to serve this new market segment and TGE will be able to provide them.

Floating LNG FPSO and LNG FSRU

TGE Marine has further developed LNG storage solutions with type C pressure vessel tanks and finalised a conceptual design for a LNG FPSO with 40,000 m3 storage capacity and up to 500,000 tons per year liquefaction capacity together with TGE Gas Engineering (the demerged onshore business). This conceptual design is currently being investigated by an oil major for the potential monetization of a stranded gas field.

Optimisation studies for LNG fuel supply to islands are under way with LNG-FSRU applications considering capacities from 5,000 m3 to 40,000 m3 for areas with little space for onshore terminals. We believe that these projects will progress in the next 12 months as LNG prices are considerably lower than in 2008. Finally, we are in early stage discussions for a VLCC conversion to an LNG-floater with TGE type C cargo tanks as well as larger LNG-FPSO concepts up to 140,000 m3 capacity.

CO2 carrier concepts

We are seeing further developments in this market too and have been approached by potential clients for further design studies of CO2 carriers which will have the ability to store and ship CO2 to the North Sea and pump it into depleted oil fields. Shipping might be a flexible option compared to pipeline transport, but this potential new market is still at an early stage. TGE is well positioned to benefit from any market expansion as CO2 ships need to be equipped with type C pressure vessels.

Financial Review

TGE has realized an adjusted profit before tax of EUR12.4m compared to EUR17.7m in FY 2008. This decrease is mainly due to a decline in gross profits of 21% (FY 2009: €20.2m; FY 2008: €25.7m) which could only be partly compensated by cost savings in personnel expenses (-7%) and increased interest income received for the FY (+36 %). 

Revenue has fallen during the year by 25% from EUR95.2m to EUR71.5m mainly due to less active contracts compared to FY 2008 (FY 2009: 34 contracts; 2008: 47). As at June 30, 2009, there have been 21 contracts with a total volume of EUR131.0m which have not yet been delivered to the customers.

The personnel expenses decreased by 7% due to the implementation of a short-labour scheme subsidised by the German Government and due to a reduction of personnel. The short labour scheme was implemented at TGE in March 2009. The scheme has allowed the Company to avoid the need to terminate employment contracts. Accordingly TGE has not had to divest itself of its high quality staff and will have access to them when the market returns. 

The decrease in personnel expenses is overcompensated by 37% due to higher other operating expenses totalling EUR4.8m for 2009. The increase is mainly attributable to higher expenses related to fair value adjustments on foreign exchange forwards (EUR+0.8m), expenses for IT (EUR+0.2m), bank fees (EUR+0.2m) and stock exchange-related expenses (EUR0.4m). 

Interest income for the year improved by 36% to EUR1.4m, the main reasons being higher cash balances during the business year and an improved treasury system. Both factors compensated for the strong decline in the available interest rates following the financial crisis. 

Expenses of EUR1.6m relate to a share-option scheme to former and current employees of TGE granted in connection with the successful IPO in 2008. In total, 13,784 shares have been issued in 2008 and are now used for the option scheme. These expenses are accounted for according to IFRS 2 and lead as a reverse booking entry to an increase of the equity of the company. These expenses will not lead to future cash payments. The same applies to the above mentioned expenses related to the fair-value adjustments of derivatives (EUR0.8m). 

Interest expenses are to an amount of EUR0.2m of a one-off nature as the only interest bearing loan has been fully repaid during the business year. 

These effects together should lead to increased efficiency for the business year 2009/ 2010. For analysis purposes these exceptional expenses should be excluded in any analysis of net profits or earnings per share. We use an adjusted profit before tax on continuing operations as an indicator for performance. On this basis we made EUR12.4m or EUR10.2 per share (2008: EUR17.7m or EUR14.5 per share), which is in line with our forecasts announced in November 2008.

The income tax expenses were reduced by EUR3.0m to EUR1.4m during the year. The major reason for the decline relates to valuation adjustments on deferred tax assets set up for tax losses in 2008. According to current expectations a higher amount of tax losses is available for offsetting than expected in 2008. 

 

Looking forward our balance sheet has the financial strength to support the Group in these uncertain markets for the foreseeable future, even if we do not see the market return in 2010 as anticipated.

TGE holds cash and time deposits of EUR49.2m, which includes EUR10.0m of cash still due to the demerged Onshore business. EUR17.5m is restricted by bank guarantees for Offshore projects. However that restricted cash passes to the Company when these guarantees expire. The substantial change in the cash position from the previous year is mainly due to cash flows from investing and financing activities. Cash flows from investing activities mainly derive from the receipt of EUR11.1m from the sale of the Onshore-subsidiary. The cash received in this business year comes from the negotiated sales price for the demerged assets.

Cash flows from financing activities include repayments of a loan of EUR29.2m to one shareholder. As mentioned, before this repayment leads to a material decrease of interest expenses in the future. 

Cashflows from financing activities include repayment of a loan of EUR29.2m to once shareholder. As mentioned before, this repayment leads to a material decrease of interest expenses in the future.

An amount of EUR9.2m in total was used by operating activities in 2009. Under the current contracts TGE has received significant part payments in cash in advance from its customers, shown as the high advanced payments in the balance sheet (EUR14.6m). A part of this cash is required for serving the running contracts and a part is profit. 

Dividend 

Management and Supervisory Board will propose to this year's Annual General Meeting to not pay a dividend for the FY 2009.  

The management continues to consider affecting the previously announced share split and, if the Board think it appropriate, it may be implemented so that the shares would then trade at a level which is more common of AIM companies.

Board Changes

During the year the former CFO Roland Fisher was replaced by Steffen Schober. Mr. Schober is a chartered accountant with a 12 year career at Deloitte, Germany. Mr. Schober holds a diploma in economics (1995) from the University of Cologne, Germany. He also holds the additional titles of tax advisor (Steuerberater, 2000) and certified public auditor (Wirtschaftsprüfer, 2002).

Mr. Schober joined TGE in 2008 as Head of Financial Department.

Outlook 

The principal markets that we serve are highly influenced by the finance crisis. No substantial orders were signed by us in the FY 2009, except for smaller engineering contracts.

The current market environment has led to significant uncertainty amongst all market participants. To identify a point of time when the market is likely to return is very difficult under the current market conditions. Since the major financing banks in the shipbuilding market have not yet returned, management expect that the market will not return before the beginning of 2010. However, we remain optimistic about the opportunities for the Group during the current year as we believe that, for the following reasons, market activity will increase significantly:

The worldwide gas-tanker fleet is materially overaged. The largest oil majors and industry players do not use gas-tankers which are more than 25 years old. Detailed analysis of the current fleet reveals that a significant proportion are now over 25 years old and those ships will need to be replaced in the near future. 

 

- Additional cracker facilities, especially in the Middle East, will lead to an increasing demand for transportation capacity for 

petrochemical gases. 

 

- New developments and discussions in the CO2 market, the market for replacing heavy fuel oils and diesel with LNG as a fuel for

ships, and the increasing demand of gas for islands are currently ongoing and will develop into new market opportunities for TGE.

Regarding the business year 2010, revenues will be driven by the existing order backlog, engineering contracts and possible new order wins. Due to the comparative inactivity in our core segments however, cost saving measures will continue to be executed until we hit our internal target of 20%.

CONSOLIDATED INCOME STATEMENT

 

in TEUR		Note		7/1/2008 – 6/30/2009		7/1/2007 – 6/30/2008
Revenue		[5]		71,502		95,249
Other operating income		[7]		1,334		1,159
Cost of materials and purchased services		[8]		- 51,296		- 69,531
Personnel expenses		[9]		- 6,119		- 6,568
Depreciation of property, plant and equipment and amortization of intangible assets		[16], [17]		- 267		- 1,006
Other operating expenses		[10]		- 4,818		- 3,522
Operating profit of continued operations before interest, taxes and expenses for restructuring and initial public offering, respectively				10,336		15,781
Expenses for the issuance of share options		[11]		- 1,625		-
Expenses for restructuring, initial public offering		[12]		-		- 2,854
Operating profit of continued operations before interest and taxes				8,711		12,927
Financial income		[13]		1,380		1,017
Financial costs		[13]		- 398		- 3,391
Profit of continued operations before taxes				9,693		10,553
Taxes on income		[14]		- 1,428		- 4,384
Net result of continued operations (Offshore)				8,265		6,169
Net result of discontinued operations (Onshore)		[4]		-		- 29,614
Consolidated net profit for the year (previous year: -net loss)				8,265		- 23,445
Undiluted earnings per share (in EUR)		[15]		6,84		- 22,51
Diluted earnings per share (in EUR)		[15]		6,77		- 22,51
Earnings per share of continued operations (in EUR)		[15]		-		5,92
Earnings per share of discontinued operations (in EUR)		[15]		-		- 28,43

 

 CONSOLIDATED BALANCE SHEET 

in TEUR		Note		6/30/2009		6/30/2008
Assets
Goodwill		[16]		7,758		7,758
Other intangible assets		[16]		89		204
Property, plant and equipment		[17]		383		440
Non-current liquid funds		[18]		7,456		30,136
Non-current assets				15,686		38,538
Inventories		[19]		61		2,403
Trade receivables		[20]		1,985		5,181
Other receivables and assets		[21]		4,248		16,578
Time deposits		[22]		16,043		-
Cash and cash equivalents		[23]		25,672		48,324
Current assets				48,009		72,486
Balance sheet total				63,695		111,024
Equity and liabilities
Subscribed capital				1,204		1,217
Capital reserves				36,571		36,411
Balancing item for share options				1,625		-
Loss carried forward				- 35,176		- 11,731
Consolidated net profit for the year (previous year: -net loss)				8,265		- 23,445
Total equity		[24]		12,489		2,452
Deferred tax liabilities		[28]		4,969		6,138
Liabilities to shareholders		[26]		4,524		-
Other liabilities		[26]		-		4,524
Non-current liabilities				9,493		10,662
Tax provisions		[25]		3,571		1,117
Other current provisions		[25]		4,471		9,334
Payments received on account		[26]		14,581		36,679
Trade payables		[26]		8,820		10,055
Liabilities to shareholders		[26]		5,355		27,765
Other current liabilities		[26]		4,915		12,960
Current liabilities				41,713		97,910
Balance sheet total				63,695		111,024

 

 

 CONSOLIDATED CASH FLOW STATEMENT (NOTE 29)

in TEUR		7/1/2008 - 6/30/2009		7/1/2007 - 6/30/2008
Consolidated net profit		8,265		-23,445
Adjustment net profit for the year for the reconciliation to cash flows from operating activities:
Amortization of intangible assets, depreciation of property, plant and equipment		267		3,896
Expenses related to share options to employees		1,625		-
Losses due to sale of subsidiaries		-		23,307
Profit due to sale of subsidiaries		-		-251
Increase/decrease in assets and liabilities after effects from changes in companies to be included in the consolidated group:
Increase/decrease in inventories		2,342		305
Decrease in trade receivables		3,196		12,288
Decrease in provisions		-3,578		9,686
Decrease in trade receivables		-1,235		-22,876
Decrease/increase in advance payments received		-22,098		5,505
Decrease in other assets and liabilities		2,056		3,975
Net cash used in/generated from operating activities		-9,160		12,390
Investments in property, plant and equipment and in intangible assets		-97		-916
Net cash used in / generated from the sale of TGE Gas Engineering GmbH		11,081		-19,915
Transfer of cash to Suez Energy Services GmbH, Cologne, for acquiring 25.1% of shares in TGE Ingenieur GmbH		-		- 5,500
Proceeds from the disposal of property, plant and equipment and of intangible assets		-		94
Cash flows generated from / used in investing activities		10,984		-26,237
Acquisition of own shares		-13		-
Increase in equity		160		29,628
Change of long-term restricted cash		22,680		-20,749
Investments in time deposits		-16,043		-
Repayment of loans to shareholders		-31,641		-
Cash flows generated from financing activities		-24,857		8,879
Foreign exchange rate differences in cash and cash equivalents		381		260
Net increase in cash and cash equivalents		-22,652		- 4,708
Cash and cash equivalents at beginning of year		48,324		53,032
Cash and cash equivalents at end of year		25,672		48,324
Additional disclosures
Interest payments (component of cash generated from operating activities)		-2,783		-
Tax payments (components of cash generated from operating activities)		-263		-

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

in TEUR		Capital stock		Capital reserves		Balancing item for share option scheme		Profit/loss carried forward		Consoli-dated net profit/loss		Total equity
As of July 1, 2007		1,000		7,000		-		20		- 11,751		- 3,731
Increase of capital net IPO costs		217		29,411		-		-		-		29,628
Reclassification of consolidated net loss 30/6/2007		-		-		-		- 11,751		11,751		-
Consolidated net loss for the period		-		-		-		-		- 23,445		- 23,445
												-
As of June 30, 2008		1,217		36,411		-		- 11,731		- 23,445		2,452
Acquisition of own shares		- 13		-		-		-		-		- 13
Additional payment to other reserves (Section 272 (1) No. 4 HGB)		-		160		-		-		-		160
Reclassification, consolidated net loss 30/6/2008		-		-		-		- 23,445		23,445		-
Granting of share options		-		-		1,625		-		-		1,625
Consolidated net profit for the year		-		-		-		-		8,265		8,265
												-
As of: June 30, 2009		1,204		36,571		1,625		- 35,176		8,265		12,489

  

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.  Preliminary remarks 

General information

TGE Marine AG is a company domiciled in Germany in the legal form of a stock corporation with registered head office in Bonn. It is registered in the Commercial register of the Bonn Local Court under number HRB 16325. The company's business address is Mildred-Scheel-Str. 1, 53175 Bonn, Germany. 

Purpose of the company

The Group under the management of TGE Marine AG (hereinafter referred to as TGE or TGE Group), is active in the technical engineering services area for gas-to-liquid plants and re-gasification facilities on ships. 

The Group is active, in particular, on the market for small and medium-sized gas tankers. The plants which it develops serve in the transport of LPG (Liquefied Petroleum/Propane Gas), ethylene and LNG (Liquefied Natural Gas). TGE customers are mainly Korean, Chinese and European shipyards. As sub-supplier, TGE supplies its customers with turn-key plants in accordance with specific customers requirements in the form of long-term individual contract manufacture. The services provided by TGE are concentrated mainly on the planning and delivery of the required materials components. As a rule, shipyards Install the equipment on the ships.

TGE is active mainly on foreign markets, in particular in Asia. Consequently, the economic development of the TGE Group is determined to a large extent by the changes on the relevant international markets (especially in Asia), and only partially by the development of the domestic economy. 

Until May 8, 2008 the Group operated a further business segment, namely the "Onshore" segment, which for the most part was outsourced in accordance with the regulations stipulated in the German Conversion Law [Umwandlungsgesetz (UmwG)] with effect from July 1, 2007, and which was sold to an external party on May 8, 2008. This business segment was treated as a discontinued operation in the previous year's financial statements in accordance with IFRS 5. 

For differentiation purposes, a distinction is made in the following between the "Offshore" and "Onshore" discontinued operations as follows:

 

Offshore -Rendering technical engineering services in the field of construction of turn-key large-scale plants for the transport of

liquid gas and chemicals per ship, as well as their refitting.

 

Onshore -Rendering technical engineering services in the field of construction of turn-key  large-scale plants on land for the storage

of liquid gas and chemicals, as well as their refitting. 

Within the scope of outsourcing the Onshore segment with economic effect as from July 1, 2008, individual activities of this segment were retained in the TGE Group. These business activities concern individual projects which are meanwhile all in the warranty phase; the projects are being discontinued and will be phased out completely by August 2010. All business transactions resulting from the Onshore segment are allocated to the Offshore segment in the context of the following presentation of the Group's net assets, financial position and results of operations.

Legal bases and compliance declaration

Pursuant to Section 315a HGB, the consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) to be applied statutorily in the EU and the supplementary provisions of Section 315a Section 1 HGB. 

All IFRS published by the International Accounting Standards Board (hereinafter IASB) that are valid at the time of preparing the present consolidated financial statements are applied to the extent that they have been adopted by the EU. 

The requirements of the applied standards have been met in full and result in the presentation of a true and fair view of the net assets, financial position and results of operations of the TGE Group. 

As a general rule, the annual financial statements were prepared using the accounting and valuation methods used for the consolidated financial statements as of June 30, 2008, and also the consolidation principles, with the following exceptions: 

 

- With effect from July 1, 2008, certain derivative financial instruments are allocated for the first time as hedging instruments to

hedge the fair value of a reported asset or a liability (fair value hedge).

 

- Due to the IPO in May 2008, TGE granted its current and former employees whose employment contracts were transferred

to TGE Gas Engineering GmbH, Bonn, in the course of the spin-off as of July 1, 2007, share options for the first time in the

current financial year. The share option program is accounted for as share-based remuneration pursuant to IFRS 2. 

Accounting provisions which have become effective

The IASB and the IFRIC adopted the following standards and interpretations which it is mandatory for the TGE Group to apply as from financial year 2008/2009. This had no impact on the TGE consolidated financial statements.

IFRIC 11 "IFRS 2 - Business with Treasury Stock and Shares of Group Companies" answers the question as to how IFRS 2 is to be applied to share-based payment agreements which include company-owned equity capital instruments or equity capital instruments of another company of the same group. 

IFRIC 12 "Service Concession Arrangements" governs the accounting for agreements where the public sector concludes contracts with private enterprises and said contracts are oriented towards the fulfillment of public tasks. In order to meet these tasks, the private enterprise uses the infrastructure which remains under public control. The private enterprise is responsible for the construction and operation of the infrastructure, and for related maintenance measures. 

IFRIC 13 "Customer Loyalty Programmes" governs the disclosure of sales revenues associated with customer bonus programmes that are offered by manufacturers or service providers or through third parties. The interpretation is to be applied for the first time to financial years beginning on or after July 1, 2008. 

IFRIC 14 "IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction" deals with questions of detail concerning the accounting for pension plans.

The transitory regulations included in the amendments (2008) to IAS 39 & IFRS 7 "Reclassification of Financial Assets - Effective Date and Transition" and clarification as to the application date of the possibility to measure some non-derivative financial assets that were previously stated at fair value at amortized acquisition costs (introduced in 2008). 

Accounting provisions that are not applied early

The IASB and IFRIC have adopted further standards and interpretations. Application of these standards and interpretations is not mandatory at present. Applying these IFRS requires that they be approved by the EU; in part, approval is still pending at this time. 

"Improvements to IFRSs" is the first standard issued within the scope of the annual improvement process of the IASB; this standard includes numerous minor changes to several IFRS. These changes are intended to substantiate the content of the provisions and to eliminate unintended inconsistencies among the standards. Most of the changes are to be applied to financial years that begin on or after January 1, 2009. The impact on the TGE consolidated financial statements caused by first-time application of the changes is presently being examined.

IFRS 8 "Business Segments" replaces IAS 14 Segment Reporting and, in so doing, harmonizes the requirements placed on segment reporting with SFAS 131 "Disclosures about Segments of an Enterprise and Related Information", with some insignificant deviations. IFRS 8 requires that the company responsible for financial reporting provides descriptive information and financial indicators concerning its business segments. These are business fields for which separate financial indicators are available and which are reviewed periodically with respect to resources allocation and assessment of earnings power by the chief decision-makers of the company. In this context, segment reporting is to present the financial indicators in the same way as they are made available internally to the chief decision-makers as a basis for decision taking in order to permit assessment of the business result and the allocation of resources. IFRS 8 is to be applied mandatorily for financial years beginning on or after January 1, 2009. Early application is permitted. 

IFRS 1 (2008) and IAS 27 (2008) "Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate" leads to simplifications in the initial measurement of equity interests for the individual financial statements of those entities where IFRS are applied for the first time. The amendments are to be applied for financial years beginning on or after January 1, 2009. Initial application will not impact on the consolidated financial statements of TGE.

IFRS 2 Amendments (2008) "Vesting Conditions and Cancellations" clarify the definition of vesting conditions with respect to share-based remuneration, and stipulate that all cancellations of share-based remuneration plans (irrespective of the terminating party) are to be accounted for in an identical manner. The amendments to IFRS 2 are to be applied mandatorily for financial years beginning on or after January 1, 2009. Initial application will not impact on the consolidated financial statements of TGE. 

IFRS 3 (2008) "Business Combinations" includes amended provisions governing the accounting for corporate acquisitions. In particular, the amendment relates to the scope of application and accounting for successive share acquisitions and the introduction of an option: The shares of the non-controlling companies can be measured at fair value or at the prorated net assets. Depending on the option selected, any existing goodwill is either disclosed fully or only with the share of the majority owner within the scope of a corporate acquisition. IFRS 3 (2008) is to be applied mandatorily on or after July 1, 2009 for the first time. First time application is not expected to impact significantly on the consolidated financial statements of TGE.

IAS 1 (2007) "Presentation of Financial Statements" includes new provisions regarding the presentation of financial statements. In particular, the new provisions stipulate a strict segregation of non-owner related changes in equity capital and owner-related equity capital changes, as well as extended disclosures on other comprehensive income. IAS 1 (2007) is to be applied for financial years beginning on or after January 1, 2009 for the first time. First time application of IAS 1 (2007) will be reflected in extended notes disclosures in the consolidated financial statements of TGE.

IAS 23 (2007) "Borrowing Costs": With the reworked version of IAS 23, the IASB has abolished the option concerning the treatment of borrowing costs that are directly incurred in the context of the acquisition, construction or manufacture of qualified assets. These borrowing costs are to be capitalized as acquisition or production costs in the future. IAS 23 (2007) is to be applied for financial years beginning on or after January 1, 2009 for the first time. First time application is not expected to impact significantly on the consolidated financial statements of TGE. 

IAS 27 (2008) "Consolidated and Separate Financial Statements": With the reworked version of IAS 27, the IASB has amended the provisions governing the accounting for transactions with non-controlling shareholders of a group and the accounting treatment in the event of a loss of control over a subsidiary. Transactions which lead to a change in the parent company's percentage of shares held in a subsidiary without losing control over the subsidiary, are to be accounted for in the future as equity capital transactions with neutral effect on profit or loss. The standard also regulates the calculation of deconsolidation effects and determines the measurement of a remaining residual participation in former subsidiaries. The amended provisions of IAS 27 are to be applied for financial years beginning on or after July 1, 2009 at the latest. First time application is not expected to impact significantly on the consolidated financial statements of TGE. 

IAS 32 (2008) und IAS 1 (2008) "Puttable Financial Instruments and Obligations Arising on Liquidation" includes amended provisions respecting the allocation of borrowings and equity capital. The amendment requires that certain financial instruments that were previously to be classified as borrowings shall be reported as equity in the future. The amended regulations are to be applied for the first time for financial years beginning on or after January 1, 2009. Initial application is not expected to impact significantly on the consolidated financial statements of TGE.

IAS 39 Amendment (2008) "Eligible Hedged Items" puts the accounting principles governing hedging transactions into actual terms. The amendments supplement the application principles in the areas of designation of inflation risks as an underlying transaction and the designation of hedging transactions to hedge a unilateral risk. The amended regulations are to be applied for the first time for financial years beginning on or after July 1, 2009. They are not expected to impact significantly on the consolidated financial statements of TGE. 

 

IFRIC 15 "Agreements for the Construction of Real Estate" governs the accounting for the sale of real estate where the respective contract is concluded with the acquirer before conclusion of the construction work. The interpretation, which was published on July 3, 2008, clarifies, in particular, the preconditions for application of IAS 11 or IAS 18, respectively, and the point in time when the corresponding revenues are to be realized. The interpretation is to be applied for financial years beginning on or after January 1, 2009 for the first time. Initial application is not expected to impact significantly on the consolidated financial statements of TGE. 

IFRIC 16 "Hedges of a Net Investment in a Foreign Operation" answers questions in the context of currency hedging in the event of a foreign business operation. In particular, the interpretation, which was published on July 3, 2008, defines the risk which can be hedged, the Group companies which can hold a hedging instrument, and the accounting treatment if a foreign unit is to be disposed of. It is mandatory to apply the interpretation for financial years beginning on or after October 1, 2008, for the first time. The effects of first-time application of IFRIC 16 on the consolidated financial statements of TGE is currently being examined. 

IFRIC 17 "Distributions of Non-cash Assets to Owners" presents regulations governing the accounting for non-cash dividends, Initial application is not expected to impact significantly on the consolidated financial statements of TGE. 

IFRIC 18 "Transfers of Assets from Customers" regulates the accounting for assets which were transferred by customers to a company in order to acquire a network connection or to be granted permanent access to supplies of goods or services. The interpretation, which was published on January 29, 2009, is to be applied to the accounting for assets that are transferred on or after July 1, 2009. They are not expected to impact significantly on the consolidated financial statements of TGE.

No use was made of the possibility to apply the standards and interpretations early. TGE assumes that application of these standards and interpretations would not have had a material impact on the net assets, financial position and results of operations. 

The consolidated financial statements have been presented in Euro (EUR), since most of these group transactions are based on this currency. The consolidated financial statements relate to the period from July 1, 2008 to June 30, 2009. 

 

In accordance with IAS 1, the income statement has been prepared pursuant to the nature of expenses format. 

2. Summary of significant accounting and valuation policies

 

The consolidated financial statements have been prepared under the historical cost convention. Various financial instruments are - in deviation from this principle - stated at fair values as of the balance sheet date. Financial information is stated in thousands of Euro (TEUR.

The principal accounting and valuation policies applied upon the preparation of these consolidated financial statements are set out below. 

Basis of consolidation and group of companies 

In addition to TGE Marine AG, all significant subsidiaries are included in the consolidated financial statements, which are directly or indirectly controlled by the TGE Group.

The group of companies to be included in the consolidation as of June 30, 2009 is as follows:

No.

Company

Registered office

Share-holders

Shares %

Voting rights %

Initial consolida-tion

(1)

TGE Marine AG

Bonn, Germany

Subsidiary

(2)

TGE Marine Gas Engineering GmbH

Bonn, Germany

(1)

100%

100%

5/1/06

 

The group of companies was subject to the following changes in comparison with the previous year:

In accordance with resolutions passed on June 30, 2008, TGE Ingenieur GmbH, Bonn (downstream), and TGE Marine Engineering GmbH, Bonn (upstream), were merged with TGE Marine Gas Engineering GmbH, Bonn, pursuant to Section 1 (1) No. 1 and Section 2 No. 1 of the German Conversion Law by way of absorption with economic effect as of July 1, 2008. The mergers were effective under civil law through entry in the Commercial Register on November 14, 2008 (merger of TGE Ingenieur GmbH with TGE Marine Gas Engineering GmbH), and on November 20, 2008 (merger of TGE Marine Engineering GmbH with TGE Marine Gas Engineering GmbH). 

As a consequence of the mergers, the shares of TGE Marine Gas Engineering GmbH held by TGE Ingenieur GmbH were transferred to the controlling parent company, TGE Marine AG as of July 1, 2008. Moreover, the residual assets of TGE Ingenieur GmbH and TGE Marine Engineering GmbH were transferred to TGE Marine Gas Engineering GmbH by way of universal succession.

After the mergers, TGE Marine AG, Bonn, holds 100% of the business shares in TGE Marine Gas Engineering GmbH, Bonn, as from July 1, 2008. 

The mergers had no effect on the consolidated financial statements since both of the merged companies are fully consolidated subsidiaries of TGE Marine AG, Bonn,

Within the context of initial consolidation of the subsidiaries, the assets and liabilities of the fully consolidated subsidiaries were measured at their fair values as of May 1, 2006, in accordance with the acquisition method. The difference resulting from setting off the respective acquisition costs against the fair values of the acquired identifiable assets and debts was disclosed as goodwill. 

The annual financial statements of subsidiaries were adjusted as required with a view to reconciling the accounting and valuation methods with those applied in the Group. 

The financial year of all companies included in consolidation runs from July 1 to June 30 of the following year.

All relevant intra-group receivables, liabilities and also expenses and income among the Group companies were eliminated within the course of consolidation. No intra-group results to be eliminated were recorded as at June 30, 2009 and in the previous year.

Goodwill 

Goodwill is not amortized according to schedule, but tested for impairment on the basis of the obtainable amount of the cash-generating unit to which goodwill is attributed ("impairment-only" approach). Under the impairment test, goodwill acquired in a business combination is allocated to every individual cash-generating unit which will probably benefit from the synergies arising from the combination.

The impairment test is to be carried out annually and, in addition, at any time when indications of a decrease in the value of the cash-generating unit exist. If the carrying value of the cash-generating unit to which goodwill is attributed exceeds the recoverable amount of that unit, goodwill attributed to this cash-generating unit is impaired at the amount of that difference and needs to be written-down, respectively. Value impairment of goodwill is not reversible. If the value impairment of the cash-generating unit exceeds the carrying value of goodwill attributed to this unit, further value impairment is to be recorded through pro-rata deduction of carrying values of assets attributed to this cash-generating unit. The recoverable amount of a cash-generating unit is determined on the basis of its attributable fair value less cost to sell. 

In its capacity as cash generating unit, TGE has identified the operative business segment, Offshore. The goodwill disclosed as of June 30, 2009 was allocated to the Offshore segment to the full extent.

Revenue recognition 

Revenue is stated at the attributable fair value of the consideration already received or to be received receivable and represents the amounts receivable for goods and services in the ordinary course of operating activities. Revenue is shown net of discounts, value-added tax and other taxes relating to selling.

Revenue from construction contracts is recognized in accordance with the Group's guidelines for construction contracts (please see below). 

Interest income is accrued by considering the outstanding amount receivable plus interest rate to be applied. The applicable interest rate is the then current market rate used to discount the estimated future cash flows over the term of the financial asset to the present value of the asset. 

Construction contracts 

Revenue and costs incurred in the course of construction contracts are recognized in accordance with the percentage of completion method as of the balance sheet date. The percentage of completion is determined based on the costs incurred as of the balance sheet date as compared to the estimated total project costs. Payments following changes in the overall project, subsequent claims as well as premiums are included in total revenue to be recognized to the extent agreed.

If it is probable that the total estimated project costs exceed the total project revenue, the estimated loss is immediately included in income.

As of the balance sheet date, all projects in progress have been recognized pursuant to the percentage of completion method stipulated in IAS 11 on the basis of partial revenue recognition regulations. All income/loss from construction contracts can be reliably estimated. 

The Group recognizes all contract work in process with an asset-side balance vis-à-vis customers as assets, where the costs incurred including profits recorded (or less losses recorded) exceed the total amount of advance payments received. These assets as well as invoices not yet paid by the customer are stated under trade receivables. 

The Group recognizes all contract work in process with a liability balance vis-à-vis customers as a liability, where the total amount of advance payments received exceed costs incurred including profits recorded (or less losses recorded). These liabilities are stated under advance payments received.

Leases 

The company is the lessee in numerous lease agreements. These leases provide for a significant portion of the risks and rewards of ownership being retained by the lessor. In accordance with IAS 17, all existing leases were thus classified as operating leases instead of finance leases.

Rental payments made under operating leases are charged to the income statement on a straight-line basis over the period of the lease.

Foreign currencies

Transactions denominated in foreign currencies other than the Euro are recorded using the exchange rate prevailing at the date of transaction.

Monetary assets and liabilities of foreign permanent establishments are valued at the rate prevailing at the balance sheet date. Non-monetary assets and liabilities carried at amortized cost or attributable values which are denominated in foreign currencies are translated at foreign exchange rates prevailing at the date of determining the attributable fair value. Translation gains and losses are recognized in income.

The following table presents the most important foreign currencies for TGE:

Exchange rate 1 EUR =		ISO-Code		Middle rate as of the bal. sheet date				Annual average exch. rate
				6/30/2009		6/30/2008		2009		2008
China		CNY		9,6545		10,8570		9,4115		10,7050
US-Dollar		USD		1,4134		1,5755		1,3743		1,4706
Swiss Francs		CHF		1,5265		1,6091		1,5378		1,6302
Pound Sterling		GBP		0,8521		0,7921		0,8561		0,7345
Taiwan Dollar		TWD		46,3207		48,0840		45,0108		46,7780

 

To hedge certain exchange rate risks, the Group enters into forward transactions in some cases.

Costs of borrowings

Costs of borrowings are recognized in the income statement at the date of origin.

Pension costs

In financial year 2007/2008, the members of the management board of TGE Marine AG were promised contribution-based pensions, for which the Company pays contributions to a benefit fund. The benefit fund, on the other hand, concludes reinsurance contracts in order to finance the benefits. The benefits promised by the benefit fund correspond to the benefits paid by the reinsurance companies. Payment of the benefits is measured on the basis of length of service and the amount of remuneration.

Since the present value of the obligation and the fair value of the planned assets are identical and only the balance is to be recorded as a liability in accordance with IAS 19.54, a contribution-oriented pension commitment results, and thus it is not necessary to record a provision in the balance sheet. 

Income taxes 

Income tax expense is the sum total of current tax expense and deferred taxes. 

The current tax expense is determined on the basis of the annual taxable income. Taxable income differs from net income recorded in the income statement since it excludes expenses and income that will not be taxable or tax-deductible in future years or will never be subject to tax, respectively. The Group's liability in respect of the current tax expense is calculated on the basis of the tax rates applicable at the balance sheet date.

Deferred income taxes are the expected tax charges or benefits from differences arising between the carrying amounts of assets and liabilities in the annual financial statements and their tax bases. The calculation follows the liability method of accounting. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. However, these assets and liabilities are not accounted for if the temporary difference arises from goodwill or from the initial recognition of an asset or liability in a transaction (other than business combinations) that at the time of the transaction neither affects taxable income nor net profit or loss. 

In addition, deferred tax assets are recorded for losses carried forward to the extent that their future use is probable. 

The carrying value of deferred tax assets is tested annually as of the balance sheet date and is adjusted (value adjusted or written down), should it result in a differing assessment of taxable income expected in a future foreseeable period.

Deferred tax liabilities are recorded to account for temporary differences from shares in subsidiaries, except when the Group is in a position to manage the reversal of the temporary differences and it is probable that the temporary difference will not undergo a reversal in the foreseeable future.

Deferred taxes are determined on the basis of the estimated average group tax rate that is announced or adopted as at the balance sheet date. 

Deferred tax assets and liabilities are netted if an enforceable claim for netting exists and if the deferred tax assets and liabilities relate to the same tax authority.

Intangible assets

Intangible assets recorded in the balance sheet relate exclusively to software licenses and hidden reserves concerning the existing order backlog discovered in the course of initial consolidation.

Intangible assets are recorded at cost and amortized on a straight-line basis over the expected useful life. 

 

Software licenses are amortized according to schedule over a period of four years using the straight line method. The order backlog capitalized in the course of initial consolidation is amortized straight line according to schedule in accordance with the cash inflows expected.

 

Property, plant and equipment 

Property, plant and equipment recorded relate exclusively to office equipment which is stated at historical cost less accumulated depreciation and impairments.

Depreciation takes place on a straight-line basis over the estimated useful life of 3 to 10 years.

Impairment of property, plant and equipment and intangible assets (other than goodwill)

At each balance sheet date, the Group reviews the carrying values of property, plant and equipment, intangible assets and financial assets to determine whether there are indications of a need for impairment in respect of these assets.

If there are such indications, the recoverable value of the asset is estimated in order to determine the scope of the potential impairment expense. Where the recoverable amount of individual assets can not be estimated, the recoverable amount of the cash generating unit is estimated to which the asset belongs.

The recoverable amount is the higher of an asset's fair value less costs to sell and the value in use. Upon determining the value in use, estimated future cash flows are discounted to the present value by using the currently marketable interest rate before taxes that reflects the specific risks of the asset not accounted for in the cash flows. Fair value less costs to sell is determined based on observable market multiples.

 

Where the estimated recoverable amount of an asset (or a cash-generating unit) is below the asset's carrying value, the carrying value of the asset (the cash-generating unit) is reduced to the recoverable amount. The impairment expense is directly included in income.

Research and development expenses 

Research costs are expensed. Development expenses shall be capitalized if the terms according to IAS 38 are verifiably and cumulatively met. For example, it has to be possible to use or sell the self-produced intangible asset and additionally derive an economic benefit therefrom for the company.

Since the Company is not engaged in significant development activities beyond construction contracts, no expenses were capitalized as of June 30, 2009.

Inventories 

Inventories exclusively include raw materials (materials on hand) designated for future use in projects. They are valued at acquisition cost, including incidental acquisition costs (in particular freight costs). 

In the event of indications that the net realizable value is below cost, devaluation adjustment to the lower fair value are recorded.

Financial instruments 

Financial assets and financial liabilities are recorded in the consolidated balance sheet when the Group is a contracting party with respect to the contractual rules of the financial instrument. They are derecognized if no future cash inflows on assets are expected or if liabilities are settled.

Financial assets purchased in keeping with market conditions are accounted for as at the date of performance.

a) Trade receivables, other receivables and other assets 

Trade receivables, other receivables and other assets are stated at nominal value or acquisition cost. Recognizable individual risks are accounted for by appropriate value adjustments. Non-interest bearing or low-interest bearing receivables at terms of more than one year are discounted. 

b) Financial liabilities and equity 

Financial liabilities and equity instruments are classified according to the economic substance of the underlying contract. Equity instruments are all contracts that constitute a residual claim to the Group's assets after deducting all liabilities.

 

c) Loans 

Interest-bearing loans are stated at the amounts received. Financing costs, including premiums due upon repayment or redemption are included in income via the effective-yield method in the period incurred and increase the carrying value of the instrument to this extent.

d) Trade payables 

Trade payables do not bear interest and are recorded at the amount payable, which approximates the fair value.

Derivative financial instruments and accounting for hedging transactions 

The Group enters into foreign exchange forward contracts in order to hedge against risks from changes in exchange rate differences. The Group does not use derivative financial instruments for speculative purposes.

As a general rule, derivatives are measured at their fair values as at the balance sheet date. Derivatives are stated at the fair value as of the balance sheet date. Gains and losses from the revaluation of derivatives, or, for non-derivatives the foreign currency component of the carrying value, are stated under other income/ expenses in the respective period unless the derivative qualifies and is effective as a hedging instrument within the scope of hedge accounting. The Group uses individual derivatives in order to hedge against changes to the fair value of recorded assets or liabilities (fair value hedge). 

If derivative financial instruments are allocated to underlying transactions, the Group documents the hedging relationship between the hedging instrument and the underlying transaction as well as the objective of its risk management and the pertaining strategy when the transaction is concluded. Moreover, at the beginning of the hedging relationship and thereafter on a continuous basis, the Group also documents its assessment as to whether the derivatives used in the hedging relationship effectively compensate for the changes to the fair value of the underlying transaction. The fair value of the derivative is disclosed under other receivables or other liabilities, respectively.

Changes to the fair value of derivatives used for hedging the fair value are recorded in the income statement together with the changes of the fair value of the hedged assets or liabilities attributable to the hedged risk. 

First time use of hedge accounting as of July 1, 2008 resulted in an income effect of TEUR 1,769 in comparison with the previously applied accounting methodology. Excluding the change in the accounting method, the undiluted result as at June 30, 2009 would have amounted to EUR 5,83 and the diluted result would have amounted to EUR 5,78.

The use of financial derivatives is governed by Group guidelines approved by management. In accordance with these guidelines, in individual cases, basic transactions denominated in foreign currencies are hedged exchange rate fluctuations through the conclusion of hedging transactions at matched maturities.

Provisions 

Pursuant to IAS 37 provisions are recognized when the Group has a present obligation to third parties as a result of past events that will probably lead to an outflow of financial resources and can be reliably estimated. 

Provisions are recognized for foreseeable risks and contingent liabilities in the amount probably to be paid and are not set off against rights of recourse. 

Non-interest bearing provisions which are due after more than one year are discounted at market rates to the extent the interest effect is significant. 

Provisions for legal costs are recognized on the basis of assessments made by attorneys engaged by TGE.

Share-based remuneration

In the financial year under review, TGE granted employees and former employees whose employment contracts were transferred to another company in the context of the spin-off on July 1, 2007, share options for the first time on the occasion of initial public offering in May 2008. 

The share option program is accounted for as share-based remuneration in accordance with IFRS 2. As at the respective cut-off date, the fair value of the share option determined at the issue date is included in a equity special item on a pro rata temporis basis over the blocking period. The fair value of the options is determined using acknowledged financial models.

To the extent that share options were granted to employees of another company, the obligation concerning acquisition of the shares required to operate the program was accounted for at the balance sheet date.

Time deposits

This item relates to time deposits at maturities of more than 3 months and less than 1 year.

Cash and cash equivalents

Cash and cash equivalents include currently available liquid funds, in particular own funds and customer advance payments received.

 

Significant estimates and assumptions 

The preparation of the consolidated financial statements pursuant to IFRS requires discretionary decisions or estimates in respect of several balance sheet items that will affect the recognition and valuation in the balance sheet and the income statement. 

TGE continuously reviews and evaluates assumptions and estimates. They are based on historical experience and other factors, including expectations of future trends and events. Actual results may differ from these assumptions and estimates. The estimates and assumptions that have a material influence on the annual accounts are discussed below.

Production orders are recognized in accordance with the so-called percentage of completion method (POC method). Use of the percentage-of-completion method requires the Group to estimate the work performed as of the balance sheet date. Management determines the degree of completion based on the proportion of costs incurred as of the balance sheet date to total estimated contract costs. The amount of revenue recognized as of the balance sheet date would differ in the event of a deviating percentage-of-completion rate. 

To the extent expected project costs exceed total contract revenue to be achieved, the expected loss is recognized immediately as an expense incurred during the period. The expected loss per project is determined on the basis of discussions between responsible project engineers and representatives of the procurement and finance departments. The estimates thus gained and accordingly also expected project losses can change as time progresses. 

As at June 30, 2008 and June 30, 2009, TGE capitalized deferred taxes on tax losses carried forward which were attributable in part to permanent establishments abroad. TGE has not capitalized deferred taxes on these losses carried forward since, due to current legislation, it is uncertain whether foreign tax losses can be offset against taxable income generated in Germany. TGE assesses this uncertainty and capitalizes deferred taxes only for those tax losses carried forward for which offsetting can be assumed. 

If the tax losses carried forward were allocable to the domestic and foreign permanent establishments in a manner that deviates from the selected allocation measure, this would impact on the amount of the deferred tax assets stated in the balance sheet since the tax loss carried forward which is attributable to Germany, and for which setting off against positive taxable income appears likely, would change accordingly. 

3. Segment reporting 

For purposes of primary segment reporting, management differentiates between the "Offshore" and "Onshore" business segments as follows:

 

Offshore - Rendering technical engineering services in the field of construction of turn-  key large-scale plants for the transport of

liquid gas and chemicals per ship as well as their refitting. 

 

Onshore - Rendering technical engineering services in the field of construction of turn-key large-scale plants on land for the storage

of liquid gas and chemicals as well as their refitting. 

The Onshore segment was outsourced to a large extent with effect from July 1, 2007 in accordance with the regulations stipulated in the German Conversion Law [Umwandlungsgesetz (UmwG)] and sold to external parties as of May 8, 2008. Attention is drawn in this respect to our comments under 1. The activities of the Onshore segment that were not outsourced are phasing out and are therefore allocated to the "Offshore" segment as of July 1, 2008. 

Revenue generated in the previous year on the basis of projects as well as assets and liabilities are allocated to the business segments in accordance with their affiliation to legal entities. 

 

a) Presentation by business segments

		Offshore  (= continued business segment)				Onshore  (= discontinued business segment)				Not allocated				Total
in TEUR		7/1/2008 - 6/30/2009		7/1/2007 - 6/30/2008		7/1/2008 - 6/30/2009		7/1/2007 - 6/30/2008		7/1/2008 - 6/30/2009		7/1/2007 - 6/30/2008		7/1/2008 - 6/30/2009		7/1/2007 - 6/30/2008
Revenue		71,502		95,249		-		52,991						71,502		148,240
Segment results		8,265		6,169		-		- 29,614						8,265		- 23,445
Segment assets		63,695		111,024		-		-						63,695		111,024
Segment liabilities		46,237		102,434		-		-		4,969		6,138		51,206		108,572
Capital expenditure in non-current assets		97		672		-		244						97		916
Amortization/depreciation		267		1,006		-		2,890						267		3,896

 

b) Presentation by geographic segments

The allocation of revenue to geographic regions is based on the domicile of the commissioning dockyard. The allocation of assets and capital expenditure to geographic regions is based on the location of the respective asset.

		Europe				China				Korea				Other				Total
in TEUR		7/1/2008 - 6/30/2009		7/1/2007 - 6/30/2008		7/1/2008 - 6/30/2009		7/1/2007 - 6/30/2008		7/1/2008 - 6/30//2009		7/1/2007 - 6/30/2008		7/1/2008 - 6/30/2009		7/1/2007 - 6/30/2008		7/ 1/2008 - 6/30/2009		7/1/2007 - 6/30/2008
Revenue		14.981		43,560		30,884		47,269		25,395		50,333		242		7,078		71,502		148,240
Segment assets		63.250		101,051		67		1,932		378		7,770		-		271		63,695		111,024
Capital expenditure		97		916		-		-		-		-		-		-		97		916

4. Accounting for discontinued operations pursuant to IFRS 5

To the extent a component of an entity that represents a separate significant segment or geographic area or a subsidiary exclusively held for sale which was acquired in a business acquisition is to be sold and the Group management has started the official selling process, this component of an entity shall be presented and accounted for as a discontinued operation pursuant to IFRS 5.

By purchase agreement dated May 8, 2008 and June 25, 2008, management sold the Onshore segment (TGE Gas Engineering GmbH, Bonn, and TGE Engineering Consultancy (Shanghai) Co. Ltd., Shanghai, China) to a third party. With economic effect from July 1, 2007, a large part of assets and liabilities of the Onshore segment were transferred by way of spin-off pursuant to Section 1 (1) no. 2, Section 123 (3) UmwG to TGE Gas Engineering GmbH, Bonn.

Accordingly, as in the prior year, the Onshore segment meets the requirements of a discontinued operation pursuant to IFRS 5 as of June 30, 2008. No discontinued operations were recorded as of June 30, 2009. 

Pursuant to IFRS 5, assets pertaining to an operation to be discontinued shall be stated at the lower of carrying value and fair value less cost to sell. The fair value shall be derived from a prudent estimate of realizable proceeds.

Results of the discontinued Onshore segment are determined for the period from July 1, 2007 to June 30, 2008 as follows:

in TEUR	7/1/2007 - 6/30/2008
Revenue	52,991
Other operating income	3,755
Cost of materials	-46,584
Personnel expenses	-7,974
Depreciation of property, plant and equipment and amortization of intangible assets	-2,890
Other operating expenses	-7,128
Income from the disposal of TGE Gas Engineering Consultancy (Shanghai) Co. Ltd., Shanghai, China	251
Expenses from the disposal of TGE Gas Engineering GmbH, Bonn	-23,307
Financial result	1,420
Loss/profit before taxes	-29,465
Taxes on income	-149
Net loss/profit after taxes	-29,614

No assets or liabilities were allocated to the discontinued Onshore operations as at June 30, 2009 and June 30, 2008.

 

Notes to the Income Statement

5. Revenue construction contracts

Revenue relates to construction contracts of the continuing business segment that are accounted for pursuant to IAS 11. 

6. Long-term construction contracts

The total amount of costs incurred as of the balance sheet date plus recognized profits (less recognized losses) amounts to TEUR 90,564 (previous year: TEUR 139,667). 

As of the balance sheet date, TGE received payments from current projects to the amount of TEUR 105,163 (previous year: TEUR 172,229). As in the previous year, no retentions concerning customers were recorded. 

7. Other operating income 

Other operating income is composed in comparison with the previous year as follows:  

 

		7/1/2008 – 6/30/2009		7/1/2007 – 6/30/2008
in TEUR		Offshore		Offshore		Onshore
Reversals of provisions		1,099		245		240
Indemnification from insurance companies		107		238		1,764
Income from the reduction of individual value adjustments		35		-		-
Income from arbitration proceedings		-		-		1,015
Income from the disposal of fixed assets		-		-		8
Other		93		676		728
		1,334		1,159		3,755

 

 

 

8. Cost of materials and purchased services 

The Group's cost of materials relates to cost of raw materials and consumables used, which are purchased within the scope of projects. 

9. Personnel expenses 

The personnel expenses incurred by the Group are structured as follows: 

 

		7/1/2008 – 6/30/2009		7/1/2007 – 6/30/2008
in TEUR		Offshore		Offshore		Onshore
Wages and salaries		5,206		5,527		6,840
Social security and pension costs		913		1,041		1,134
		6,119		6,568		7,974

The average number of employees working in the Group's subsidiaries as of June 30, 2009 (part-time employees are included on a pro-rata basis) is presented according to the subsidiaries included in the consolidated financial statements as follows:

		7/1/2008 – 6/30/2009		7/1/2007 – 6/30/2008
TGE Marine AG, Bonn, Germany		4		3
TGE Marine Gas Engineering GmbH, Bonn, Germany		58		55
TGE Marine Engineering GmbH, Bonn, Germany		0		3
		62		61
Freelance staff		1		3

 

Expenses relating to freelance staff are disclosed in the income statement under the item "Cost of materials and purchased services". With respect to "Expenses from the issuance of share options", reference is made to our comments under Point 11.

10. Other operating expenses

Other operating expenses (including cost of initial public offering) are structured as follows:

		7/1/2008 – 6/30/2009		7/1/2007 – 6/30/2008
in TEUR		Offshore		Offshore		Onshore
IT costs		657		462		575
Rents, incidental rental expenses		635		570		1,191
Legal and advisory fees		563		625		691
Incidental bank charges		266		89		24
Expenses for foreign distribution offices		255		41		664
Travel costs		205		189		281
Advertisement		189		182		173
Insurance		175		131		153
Stock exchange, capital market		411		-		-
Telephone, fax, postage, etc.		85		88		178
Valuation allowances on receivables		12		63		656
External distribution consultancy		-		23		366
Other operating expenses		1,365		1,059		2,174
		4,818		3,522		7,126

 

 

Rents and incidental rental expenses relate largely to the TGE head office in Bonn, Bad Godesberg.

  

11. Expenses for the issuance of share options

Within the course of TGE's initial public offering in May 2008, a total of 13,784 shares of stock were subscribed for, which are intended to be used for the employee share option program.

On August 4, 2008, share options were granted to current and former TGE employees who are entitled to acquire an individually determined amount of shares for a purchase price of 1 EUR per unit on August 5, 2009 at the earliest. The persons entitled are, in addition to TGE employees, employees of TGE Gas Engineering GmbH and employees of companies that are affiliated with these enterprises. Exercising the option is linked to a precondition that the employee is still in the service of one of the companies mentioned at the time when the option is exercised. The option does not lapse when an entitled employee reaches retirement age.

In all, 8,850 or 4,934 subscription rights, respectively, were granted to employees of TGE Gas Engineering GmbH and the TGE Group within the framework of the employee share option program. 

The 13,784 shares of stock required to service the share option program were repurchased from TGE Marine AG on November 28, 2008 for a purchase price of 1EUR/ unit.

The model used to determine the fair value of the share options is based on the non-arbitrage valuation according to Black/Scholes. The following parameters were used in the calculation: 

Price per share at the issue date (in EUR)	144.54
Basic price (in EUR)	1.00
Non-risk interest rate	3.50%
Term of the option (in years)	1
Volatility	20.00%

The volatility was determined on the basis of historical price developments as an estimate. A fair value of TEUR 1,717 was determined. Of this amount, TEUR 1,624 were recorded as expense up to June 30, 2009.

The employee share option program is accounted for as share-based remuneration in accordance with IFRS 2. 

To the extent that shares are issued to TGE employees, the fair value of the share options determined at the issue date is recorded as expense arising from the issuance of share options in a special equity item over the blocking period. 

To the extent that share options were granted to employees of TGE Gas Engineering GmbH or an affiliated company of the latter, the fair value of the share options was recorded as one amount in a special equity item at the time of issuance. Expenses from the issuance of share options were recorded in the same amount.

12. Expenses for restructuring, initial public offering (IPO)

Expenses from restructuring, IPO, are structured as follows for the period from July 1, 2007 to June 30, 2008:

 

in TEUR		7/1/2007 – 6/30/2008
IPO		1,198
Expenses relating to audit		1,023
IFRS implementation		196
Restructuring		79
Legal consulting		51
Prospectus		37
Other		270
		2,854

Similar expenses were not incurred during the period from July 1, 2008 to June 30, 2009.

13. Financial result

The financial result is broken down separated into financial income and financial costs, as follows:

 

		7/1/2008 – 6/30/2009		7/1/2007 – 6/30/2008
in TEUR		Offshore		Offshore		Onshore
a) Financial income
Interest and similar income		1,380		1,017		1,428
Other		-		-		-
		1,380		1,017		1,428
b) Financial costs
Loan Caledonia		193		3,285		-
Other		205		106		8
		398		3,391		8
		982		- 2,374		1,420

 

Interest income particularly results from the short-term investment of own liquid funds and advance payments received from customers.

Part of the financial costs relates to the loan granted by Caledonia Investments plc, London, Great Britain. 

14. Income Taxes

The Group's income taxes for both business segments consist of the following:

 

		7/12008 – 6/30/2009		7/1/2007 – 6/30/2008
in TEUR		Offshore		Offshore		Onshore
Current expenses from taxes		- 3,149		- 1,726		- 41
Off-period income from taxes		551		168		-
Deferred taxes on income (previous year: -expenses)		1,170		- 2,826		- 108
		- 1,428		- 4,384		- 149

The current expenses from taxes relate mainly to German corporation tax and the solidarity surcharge (TEUR 1,379; previous year: TEUR 864) and trade tax (TEUR 1,512; previous year: TEUR 860)

 

As in the previous year, the average tax rate in the Group is 31.58% and consists of German corporation tax (15%), solidarity surcharge (5.5% of corporation tax) and trade tax (15.75%).

The tax on the Group's income before taxes deviates from the theoretical amount resulting from the application of the weighted average group tax rate on the result before taxes, as follows:

in TEUR			7/1/2008 - 6/30/2009		7/ 1/2007 - 6/30/2008
Result before taxes			9,693		- 18,912
Average group income tax rate (%)			31.58%		31.58%
Expected tax expense (previous year: - income )			- 3,061		5,972
Off-period income from taxes			551		-
Tax proportion for permanent differences from share option plan			- 513		-
Non-taxable result from the sale of companies			-		- 7,380
Non-deductible operating expenses			- 52		- 819
Losses for which no deferred taxes are recognized			-		- 1670
Use of losses carried forward for which no deferred taxes were recognized in the previous year			1,769		-
Effects from change in the group tax rate			-		727
Difference from foreign tax rates			- 263		125
Depreciation, deferred taxes on deferred tax for losses carried forward			-		- 1,356
Other		141			17
Income tax expense			- 1,428		- 4,384
Effective tax burden (%)			14.73%		-23.18%

The following table shows the losses carried forward as at June 30, 2009 for which no deferred tax assets were recorded.

in TEUR		6/30/09		6/30/08
To be carried forward for an unlimited period of time		1,734		4,610

15. Earnings per share

The earnings per share in financial year 2008/2009 were determined by taking into account the number of shares issued. In the financial year under review, they were determined as follows:

Period		Number of shares		Days		Weighted number of shares
7/1/2008-/11/27/2008		1,217,331		150		500,273
11/28/2008-6/30/2009		1,203,547		215		708,939
						1,209,212

 

In the previous year the average number of shares issued was determined as follows: 

 

Period		Number of shares		Days		Weighted number of shares
7/1/2007-8/23/2007		1,000,000		50		136,986
8/24/2007-5/6/2008		1.020,000		270		754,521
5/7/2008-6/30/2008		1,217,331		45		150,082
						1,041,589

 

Undiluted earnings per share

		2008/ 2009		2007/ 2008
Group result in TEUR		8,265		- 23,445
Average number of shares of stock		1,209,212		1,041,589
Undiluted earnings per share (in EUR; previous year: diluted and undiluted)		6.84		- 22.51
Earnings per share of the continued segment (in EUR)		-		5.92
Earnings per share of the discontinued segment (in EUR)		-		-28.43

 

Calculation of the number of diluted shares

		2008/ 2009
Group result in TEUR		8,265
Options in units		13,784
Average market price for the year (in EUR)		53.14
Expense still to be recognized from share options per share (in EUR)		6.71
Exercise price (in EUR)		1.00
Total (in EUR)		7.71
Issue at fair value (in units)		13.784*7,71/53,14 = 2.000
Number of diluted shares		11,784

 

 

Diluted earnings per share

		2008/ 2009
Weighted number of outstanding shares - undiluted earnings (unit)		1,209,212
Number of diluted shares from share option plan (unit)		11,784
Weighted number of outstanding shares - diluted earnings (unit)		1,220,996
Diluted earnings per share (in EUR)		6.77

The launch of the share option plan led to a dilution of the earnings per share. The Group result was not to be adjusted for expenses from the share option plan within the scope of determination. In order to adjust the denominator, the share option plan shares are to be split up according to shares measured at fair value and shares issued free of cost. To this end, the relationship of the expected earnings per share (exercise price + expense per share yet to be recognized) and average share price for the year was used as a parameter. The shares issued free of cost that were so determined have a diluting effect since the numerator remains unchanged while the value of the denominator increases.

Notes to the consolidated balance sheet

16. Goodwill and other intangible assets 

Goodwill and other intangible assets have developed as follows: 

Acquisition values in TEUR		Goodwill		Order backlog and customer base		Software		Total
As of July 1, 2007		7,843		3,504		17		11,364
Additions		-		-		151		151
Disposals		85		-		27		112
As of July 1, 2008		7,758		3,504		141		11,403
Additions		-		-		6		6
Disposals		-		-		-		-
As of June 30, 2009		7,758		3,504		147		11,409
Amortization in TEUR
As of July 1, 2007		-		2,552		8		2,560
Amortization		-		879		10		889
Disposals		-		-		8		8
As of July 1, 2008		-		3,431		10		3,441
Amortization		-		73		48		121
Disposals		-		-		-		-
As of June 30, 2009		-		3,504		58		3,562
Net carrying amount as of June 30, 2009		7,758		-		89		7,847
Net carrying amount as of June 30, 2008		7,758		73		131		7,962

The intangible assets, order backlog and customer base result from the purchase price allocation in the course of the initial consolidation of fully consolidated subsidiaries as of May 1, 2006. The goodwill recorded relates to the remaining residual value resulting after deduction of the above-mentioned intangible assets as of May 1, 2006. 

The values of capitalized intangible assets, order backlog and the customer base were determined by an external appraiser.

The goodwill was subjected to an impairment test as of June 30, 2009. To this end, the value in use for the Offshore segment was determined and compared with the carrying amount of the Offshore segment.

The value in use was determined on the basis of the corporate planning up to financial year 2013/2014. No growth was assumed for the periods thereafter for purposes of the impairment test.

The Weighted Cost of Capital (WACC) was determined for discounting. Taking a base interest rate of 4.25% and a risk premium of 5% into account, it amounts to a total of 9.25 %. 

The value in use depends primarily on the key assumptions of the sustained result and WACC. Both values are based on historical values and can be derived from market values. A sensitivity analysis conducted for both key assumptions also indicated that the value in use was above the carrying amount.

17. Property, plant and equipment 

Property, plant and equipment developed as follows:

Acquisition costs in TEUR		Factory and office equipment
As of July 1, 2007		210
Additions		521
Change in consolidated companies		-
Disposals		131
As of July 1, 2008		600
Additions		91
Change in consolidated companies		-
Disposals		16
As of June 30, 2009		675
Depreciation in TEUR
As of July 1, 2007		49
Depreciation		117
Change in consolidated companies		-
Disposals		6
As of July 1, 2008		160
Depreciation		147
Change in consolidated companies		-
Disposals		15
As of June 30, 2009		292
Net carrying value as of June 30, 2009		383
Net carrying value as of June 30, 2008		440

18. Non-current time deposits and liquid funds

Non-current liquid funds relate to such liquid funds and time deposits that have been pledged as security for guaranties issued by banks within the framework of construction contracts which cease to be valid only after one year has expired after the balance sheet date. 

19. Inventories 

Inventories recorded in the balance sheet relate to raw materials purchased on a project-related basis. 

20. Trade receivables 

As of June 30, 2009, trade receivables are composed as follows:

 

in TEUR		6/30/2009		6/30/2008
Receivables from Percentage of Completion		1,751		4,117
Other trade receivables		234		1,064
		1,985		5,181

All receivables recognized are due within one year. The age structure of the trade receivables reported as of June 30, 2009 and as of June 30, 2008 is reflected in the following table: 

		6/30/2009				6/30/2008
in TEUR		Gross		Value adjustment		Gross		Value adjust-ment
Not due		1,869		-		4,147		-
< 90 days		68		-		888		- 616
< 180 days		-		-		48		-
< 360 days		35		-		716		- 2
> 360 days		13		-		12		- 12
		1,985		-		5,811		- 630

 

21. Other receivables and assets 

The other receivables in comparison with the previous year relate to the following: 

 

in TEUR		6/30/2009		6/30/2008
Tax refund claims		3,528		3,985
Prepaid expenses		240		224
Fair value of derivative financial instruments		136		844
Purchase price receivable from TGE GasFin Investments S.A.		-		11,081
Receivables from Suez Energy Services Germany GmbH, Cologne		-		-
Other receivables and assets		344		444
		4,248		16,578

The purchase price receivable from TGE Gasinvestments S.A., Luxembourg, results from the sale of shares held in TGE Gas Engineering GmbH, Bonn, as of May 8, 2008. It was paid in July 2008. 

All receivables reported have residual terms of less than one year. 

22. Time deposits

The time deposits is due on February 3, 2010. The interest rate is 1.97% per year.

Of the total amount, TEUR 9,653 is subject to limited availability since pledge agreements in favor of banks have been signed in this amount. 

23. Liquid funds

TGE reports liquid funds in the amount of TEUR 33,127 in its balance sheet (previous year: TEUR 78,460). 

The item includes cash, short-term bank balances (deposits) and time deposits held by the Group. Time deposits has an average term of up to three months and carried an average interest of 1.0 to 4.5 % in the financial year (previous year, app. 3.0 % to 3.3% p.a.). 

Of the liquid funds (Euro and foreign currency accounts) the availability of TEUR 7,833 is restricted (previous year: TEUR 41,286) as of the balance sheet date. There are pledge agreements in this amount in favor of credit institutions concerning bank guarantees vis à vis customers that were granted within the scope of project contracts. 

Of this, TEUR 4,524 (previous year: TEUR 12,273) relate to liquid funds that have been pledged as securities at banks for projects of TGE Gas Engineering GmbH. As of June 30, 2009, payables to TGE GasFin Investments SA, Strassen, Luxembourg In the same amount are reported under the item "Liabilities to shareholders". Reference is made to our comments under Point 33.

Of the funds pledged as security, the amount of TEUR 7,456 (previous year: TEUR 30,136) is available only after one year has expired.

24. Equity

The capital stock recorded relates to TGE Marine AG and is fully paid up as of the balance sheet date.

Capital stock 

The capital stock of TGE Marine AG is split up into 1,217,331 bearer shares with equal rights and a nominal value of 1 EUR in each case.

By contract of November 28, 2008, TGE Marine AG repurchased 13,784 shares of stock for 1 EUR/ unit. The shares are intended to operate the employee share option program. Reference is made to our comments under Point 11. 

The management board was authorized by the articles of incorporation to increase the Company's capital stock up to June 30, 2009 through the issuance of new no par shares in exchange for contributions in cash or in kind once or repeatedly by a total of EUR 340,000 (Authorized Capital). By resolution of the general meeting dated May 6, 2008 the Company's capital stock has been increased conditionally by EUR 150,000. 

 

Capital reserves:

Capital reserves refer in detail to the following:

 

- In the amount of TEUR 29,411, to premium amounts associated with the IPO which took place on May 15, 2008. The premium

amount results from the issuance of 182,331 shares at a nominal amount of 1 Euro each. A total amount of TEUR 611 of

proportionate IPO costs were deducted from capital reserves. 

 

- In the amount of TEUR 7,160 (previous year: TEUR 7,000), to other additional payments by the shareholders in terms of

Section 272 (2) No. 4 HGB.

Balancing item for share options

The balancing item in the amount of TEUR 1,625 results from the granting of share options to current and former employees of the TGE Group on the occasion of the IPO on May 8, 2008. The share option program is accounted for as share-based remuneration in accordance with IFRS 2. With respect to the design of the option program and the accounting treatment as of June 30, 2009, reference is made to Point 11.

Loss carried forward

The loss carried forward results from the previous year's Group result. 

25. Other provisions

Other provisions developed in the financial year as follows:

in TEUR		Opening balance July 1, 2008		Reversal		Addition/ utilization (-)		Closing balance June 30, 2009
Tax provisions		1,117		184		2,638		3,571
Provisions for taxes		1,117		184		2,638		3,571
Project costs		4,863		753		- 1,788		2,322
Personnel-related obligations		1,514		4		- 220		1,290
Outstanding invoices		846		269		- 100		477
Warranty obligations		367		12		- 175		180
Interest commitments		1,482		-		- 1,482		-
Litigation costs		50		50		-		-
Other obligations		212		11		1		202
Other provisions		9,334		1,099		- 3,764		4,471
Total remaining provisions		10,451		1,283		- 1,126		8,042

 

Tax provisions relate to deferred corporation and trade tax of the German consolidated tax group comprising, in addition to TGE Marine AG,  TGE Marine Gas Engineering GmbH.

Provisions for project costs relate to outstanding project invoices after the project has been finally accepted by the customer.

Personnel-related obligations relate mainly to vacations not yet taken and overtime work provided (TEUR 424; previous year: TEUR 727) and to bonus payments (TEUR 600; previous year: TEUR 660).

Provisions for warranties refer to statutory and contractually agreed warranty obligations from project orders already completed.

 

26. Liabilities

Liabilities are broken down by maturity as follows:

 

		Non-current				Current				Total
in TEUR		6/30/2009		6/30/2008		6/30/2009		6/30/2008		6/30/2009		6/30/2008
Payments received on account of orders		-		-		14,581		36,679		14,581		36,679
Trade payables		-		-		8,820		10,055		8,820		10,055
Liabilities to shareholders		4,524		-		5,355		27,765		9,879		27,765
Payments received in advance for future orders		-		-		2,850		2,850		2,850		2,850
Present value, forward exchange transactions		-		-		1,859		-		1,859		-
Taxes		-		-		165		19		165		19
Social security contributions		-		-		18		9		18		9
Liabilities: TGE Gas Engineering GmbH		-		4,524		-		9,896		-		14,420
Liability: former shareholder		-		-		-		-		-		-
Salaries		-		-		-		62		-		62
Other		-		-		23		124		23		124
Remaining liabilities		-		4,524		4,915		12,960		4,915		17,484
Total		4,524		4,524		33,671		87,459		38,195		91,983

 

 

Payments received on account of orders relate to advance payments made by customers to the extent they exceed the pro-rata receivables determined pursuant to the percentage of completion method (POC method). 

Loan liabilities in the amount of TEUR 12,273 to TGE Gas Engineering GmbH as of June 30, 2008 were disclosed under the item "Liabilities to shareholders" due to the assignment of receivables to TGE Gasinvestments SA, Strassen, Luxembourg, by TGE Gas Engineering GmbH. This item relates to liabilities from liquid funds which were deposited at banks in order to collateralize bank guarantees for Onshore projects. Liquid funds in the same amount are disclosed on the balance sheet's asset side. Of these liabilities, the amount of TEUR 2,394 was repaid in the past financial year. 

In order to improve comparability, the liabilities to shareholders in comparison with the previous year were split up into current and non-current components and reported correspondingly in the financial statements.

  

27. Financial instruments 

Net result 

The income and expenses recorded in the income statement or, respectively, gains and losses on financial instruments are to be presented as net result per measurement category in accordance with IAS 39 "Financial Instruments: Recognition and Measurement": 

in TEUR		6/30/2009		At Fair Value		Loans and receivables		6/30/2008		At Fair Value		Loans and receivables
Result from the valuation of derivatives		- 798		- 798		-		- 340		- 340		-
Impairment		-		-		-		- 861		-		- 861
Interest result		981		-		981		- 953		-		- 953

Classification

The classification of financial instruments that are allocated to the scope of application of IFRS 7 "Financial Instruments: Disclosures" is oriented on the existing balance sheet classification within the TGE Group. The overview below shows the transition from the carrying values of these balance sheet items into the measurement categories of IAS 39 "Financial Instruments: Recognition and Measurement" and represents their fair values:

 

a) 6/30/2009:

in TEUR		At Fair Value		Avail-abe for sale		Loans and receivables		No IFRS category		Carrying amounts 30/6/2009		Present values 30/6/2009
Financial assets
POC receivables		-		-		-		1,751		1,751		1,751
Trade receivables		-		-		234		-		234		234
Receivables from derivatives		136		-		-		-		136		136
Other receivables and assets		-		-		4,112		-		4,112		4,112
Time deposits		-		-		16,043		-		16,043		16,043
Liquid funds		-		-		33.,127		-		33,127		33,127
Total		136		-		53,516		1,751		55,403		55,403
in TEUR		At Fair Value		Liability at Costs		Liabilities at amortized Costs		No IFRS category		Carrying amounts 30/6/2009		Present values 30/6/2009
Trade payables		-		-		8,820		-		8,820		8,820
Liabilities from derivatives		1, 859		-		-		-		1,859		1,859
Liabilities to shareholders		-		-		9,879		-		9,879		9,879
Other financial liabilities		-		-		3,056		-		3,056		3,056
Total		1,859		-		21,755		-		23,614		23,614

 

b) 6/30/2008:

in TEUR		At Fair Value		Available for sale		Loans and receivables		No IFRS category		Carrying amounts 30/6/2008		Present values 30/6/2008
Financial assets
POC receivables		-		-		-		4,117		4,117		4,117
Trade receivables		-		-		1,064		-		1,064		1,064
Receivables from derivatives		844		-		-		-		844		844
Other receivables and assets		-		-		15,510		-		15,510		15,510
Interest-bearing securities		-		-		-		-		-		-
Liquid funds		-		-		78,460		-		78,460		78,460
Total		844		-		95,034		4,117		99,995		99,995
in TEUR		At Fair Value		Liability at Costs		Liabilities at amortized Costs		No IFRS category		Carrying amounts 30/6/2008		Present values 30/6/2008
Trade payables		-		-		10,055		-		10,055		10,055
Liabilities to shareholders		-		-		29,247		-		29,247		29,247
Other financial liabilities		-		-		17,484		-		17,484		17,484
Total		-		-		56,786		-		56,786		56,786

  

Nominal volume of the derivatives 

The Company solely uses foreign exchange derivatives to hedge currency fluctuations. The nominal volume of these derivatives corresponds to the hedged foreign currency volume converted into Euro. 

		Hedged underlying transactions				Fair market values
in TEUR		6/30/2009		6/30/2008		6/30/2009		6/30/2008
Assets
USD - < 1 year		-		12,178		-		664
USD - > 1 year		-		21,018		-		615
		-		33,196		-		1,279
CHF - < 1 year		3,517		2,397		124		59
CHF - > 1 year		452		-		12		-
		3,969		2,397		136		59
		3,969		35,593		136		1,338
Liabilities
USD - < 1 year		17,486		- 4,221		- 1,460		- 478
CHF - < 1 year		3,531		- 409		- 399		- 17
		21,017		- 4,630		- 1,859		- 495
		21,017		- 4,630		- 1,859		- 495
Total volume, underlying transactions		24,986		40,223

 

 

Financial risk management 

With respect to its assets, liabilities and planned transactions TGE is subject in particular to risks arising from the change in foreign exchange rates, interest rates and other risks (default risks). The objective of the financial risk management is to restrict these market risks by means of the current operative and finance-oriented activities. Dependent on the specific risk assessment, selected derivative and non-derivative hedging instruments are used. As a general rule, however only those risks are hedged which have an impact on the Group's cash flow. Derivative financial instruments are used exclusively as hedging instruments, i.e. they are not used for trading or other speculative purposes. The hedging transactions are generally concluded only with leading financial institutes to reduce the default risk.

The basic features of finance policy are defined annually by the managing board and monitored by the supervisory board. The Group Treasury is responsible for the implementation of the financial policy and current risk management. Certain transactions are subject to the prior approval by the managing board. In addition, the managing board is regularly informed of the scope and the amount of the actual risk exposure. Treasury considers the effective management of the market risk to be one of its major tasks. In order to be able to assess the effects of various circumstances on the market, simulation calculations are carried out by applying several worst-case and market scenarios.

There are no risk concentrations at present. 

Default risks

Default risks particularly exist in respect of trade receivables from construction contracts. They are largely limited by requesting prepayments from customers, letters of credit or bank guarantees. 

The remaining residual risk inherent in trade receivables is covered by valuation allowances. The maximum risk exposure from trade receivables corresponds to the carrying value of these receivables.

Interest rate risks

The Group's financing is mainly effected by non-interest bearing customers' prepayments within the framework of construction contracts. The previous year included a loan extended by a shareholder which was fully repaid as of July 1, 2008. No other significant interest-bearing loans are recorded.

Currency risks

In the course of its operating activities, TGE is exposed to currency risks. In order to mitigate these risks, the Company uses derivative financial instruments. The risk management aims at reducing fluctuations in results and cash flows. In doing so, the consolidated result is to be hedged against risks from market fluctuations of foreign exchange rates.

Derivative financial instruments are exclusively used for hedging purposes, i.e. only in connection with corresponding basic transactions from original business activities, which have a risk profile opposite to the hedging transaction. The nature and scope of the basic transactions to be hedged are regulated basis in a finance directive issued by management which is binding for the Group as a whole.

Hedging transactions are exclusively entered into with first-class counterparties within the framework of fixed limits. Only marketable instruments with sufficient market liquidity are used. Theoretically, credit risks exist in the amount of the positive market values of all derivatives; however, due to high requirements regarding the creditworthiness of counterparties, there are no material credit risks.

Basic transactions and hedging transactions subject to foreign currency risks are regularly recorded and evaluated by means of a treasury management system which is used throughout the Group. Thus, the respective exposure is transparent at any time and is subject to permanent risk control.

The significant part of currency risks results from the development of the Euro rate as against the US Dollar (basic transactions in the procurement and sales area) and the Swiss franc (basic transactions in the procurement area). In the event of high order volumes, foreign currency hedging transactions are entered into when a binding engagement or binding order is placed, at the latest. Accordingly, the net risk exposure from posted foreign currency receivables and payables as well as the pertaining contracts are fully hedged via derivative financial instruments (foreign exchange forward transactions).

If the US Dollar had been revalued (devalued) by 10% as of June 30, 2009, the effect on the income statement (profit before taxes) would have been TEUR 393 (TEUR -480).

If the Swiss Franc had been revalued (devalued) by 10% as of June 30, 2009, the effect on the income statement (profit before taxes) would have been TEUR -373 (TEUR 456).

Capital management

The prime objective of TGE's capital management is to ensure that the ability to repay its liabilities as well as the financial substance are maintained in the future also. 

Financial security is primarily measured through the equity ratio indicator. Components of this indicator are the balance sheet total of the consolidated financial statements as well as the consolidated equity reported in the consolidated balance sheet, which also represents capital in the TGE Group within the meaning of IAS 1. The equity ratio is used as an important parameter vis à vis investors, analysts, banks and rating agencies. 

The capital structure can be controlled by TGE by means of adjustment of dividends, capital reductions or the issuance of new shares as well as the issuance of financial instruments, qualified as equity according to IFRS. TGE aims at a capital structure appropriate to the business risk. 

TGE is subject to the minimum capital requirements for stock corporations. Compliance with these requirements is continuously monitored. In 2008/ 2009, the requirements have been met.

		2008/ 2009		2007/ 2008		Change
Equity in TEUR		12,489		2,452		10,037
Balance sheet total in TEUR		63,695		111,024		- 47,329
Equity ratio according to reported carrying values in %		19.6		2.2		17.4

 

The equity ratio improved significantly due to the performance in the financial year. 

28. Deferred taxes

 

Deferred tax assets and liabilities for financial statements purposes are analyzed in the subsequent table:

 

		6/30/2009				6/30/2008
in TEUR		Deferred tax  assets		Deferred tax liabilities		Deferred tax  assets		Deferred tax liabilities
Intangible assets and property, plant and equipment		-		-		-		22
Percentage of completion method		-		4,943		-		8,423
Current assets		-		26		-		266
Pension provisions		-		-		33		-
Liabilities		-		-		-		-
Tax losses carried forward and tax credit notes		-		-		2,540		-
		-		4,969		2,573		8,711
Thereof current				1,517		2,573		3,743
Offset		-		-		- 2,573		- 2,573
		-		4,969		-		6,138
Thereof: Offshore segment		-		4,969		-		6,138

 

 

Deferred taxes from percentage of completion relate to tax liabilities due to anticipated profit shares from construction contracts pursuant to IAS 11. The decline in comparison with the previous year is due to customers' acceptance of a total of 13 projects in the financial year, which resulted in the realization of revenue earned with these projects according to German tax regulations. Consequently, the inventory of anticipated profit shares pursuant to IFRS declined in the financial year. 

As in the previous year, temporary differences associated with shares in subsidiaries were not recorded.

29. Notes to the cash flow statement

The cash flow from operating activities reflects income tax payments of TEUR 263 (previous year: TEUR 0). In the current financial year and the previous year, no dividends were received.

In the financial year from July 1, 2008 to June 30, 2009, cash flows provided by investing activities relate, in particular, to cash received in the amount of TEUR 11.081 which is associated with the sale of the shares in TGE Gas Engineering GmbH in financial year 2007/ 2008. 

The Group's financial position is characterized mainly by cash flows from financing activities. Significant cash inflows amounting to TEUR 22,680 result from the change in the non-current liquid funds portfolio. Cash outflows concern, in particular, the repayment of a shareholder loan granted by Caledonia Investment plc., London, UK, in the amount of TEUR 29,247, and payments of TEUR 2,394 relating to a loan granted by Gasfin S.A., Strassen, Luxembourg. The latter concerns liquid funds deposits at banks for bank guarantees concerning the Onshore business segment. As a general rule, the funds are repaid upon expiry of the term of the respective bank guarantee. Liquid funds in the amount of TEUR 16,043 were used as time deposits, which are due to expire on February 3, 2010.

In the previous year the Group's financial position was characterized by cash flows from financing activities, whereby the significant cash inflows result from the IPO that took place on May 15, 2008 on the London Stock Exchange. The Company recognized liquid funds in the total amount of TEUR 30,022 which are attributable to the capital increase effected in the previous financial year. This amount was based on pro rated IPO costs of TEUR 611, which were deducted openly from capital reserves.

Cash and cash equivalents relate to the stock of short-term liquid funds held by TGE and, as of the balance sheet date, are mainly due to customer prepayments and own funds.

As of June 30, 2009, the Company has at its disposal guarantee credit lines at banks in the amount of TEUR 71,000 (previous year: TEUR 71,000), which were utilized in the amount of TEUR 30,428 (previous year: TEUR 44,609) as of the balance sheet date. Credit lines in the amount of TEUR 17,486 (previous year: TEUR 41,286) are collateralized on the basis of the Group's pledged bank credit balances.

In the previous year, the discontinued Onshore segment disclosed cash flow from operating activities, investing and financing activities as follows:

in TEUR		7/1/2008 - 6/30/2009		7/1/2007 - 6/30/2008
Cash flow from operating activity		-		9,477
Cash flow from investing activity		-		593
Cash flow from financing activity		-		-

30. Contingencies

Pursuant to Section 133 UmwG, TGE is jointly and severally liable together with TGE Gas Engineering GmbH, Bonn, for a period of five years for all liabilities originated before the time of the spin-off to TGE Gas Engineering GmbH, Bonn, as of July 1, 2007. The liability includes in addition to the liabilities that remained with TGE in particular those liabilities which have been transferred within the course of the spin-off to TGE Gas Engineering GmbH, Bonn. 

In addition to that, there are no contingencies that need to be disclosed as of June 30, 2009.

31. Other financial obligations

Purchase commitments

Contractual purchase commitments for external services in projects (excluding expenses for freelancers) amount to TEUR 17,214 (previous year: TEUR 57,377) in the Group. 

Obligations from operating lease contracts

The Group has various operating lease contracts, especially from the leasing of administrative buildings and factory and office equipment. The lease agreements have different terms, rent adjustment provisions and prolongation options. The most significant lease agreements for buildings are fixed for a term of 3 to 10 years. Operating lease contracts relate to office equipment and have an average basic rental term of 3 years. 

The future accumulated minimum lease expenses from non-terminable operating leases are presented as follows: 

 

in TEUR		6/30/09		6/30/08
Up to one year		554		554
More than one year, up to five years		1,260		1,814
More than five years		-		-
		1,814		2,368

 

The future total expenses of TEUR 1,814 include TEUR 1,702 (previous year: TEUR 2,212), expenses for the office building in Bonn at Mildred-Scheel-Strasse 1. TGE uses the premises as sub-tenant of TGE Gas Engineering GmbH. As of the June 30, 2009 balance sheet date, the residual term of the rental agreement was 40 months. 

Loan interest and loan repayment obligations

As of June 30, 2008, there are loan agreements in the amount of TEUR 14,000 and TEUR 15,000 concluded with Caledonia Investments plc, London, Great Britain, which were repaid to Caledonia on July 1, 2008, November 27, 2008, and March 20, 2009 at the amount used (TEUR 24.000), plus accumulated interest. The interest on the loans was 12,5% per year. 

In addition, there are loan liabilities vis à vis Gasfin S.A., Strassen, Luxembourg. Originally, these liabilities result from retained liquid funds that were to be transferred to TGE Gas Engineering GmbH within the scope of the spin-off as of July 1, 2007 on the basis of the spin-off agreement dated December 10, 2007. The liquid funds were not transferred to the extent that bank guarantees were issued for the Onshore segment via TGE that, according to the agreements concluded with the banks, were to be deposited as collateral through liquid funds. The liquid funds are repaid upon expiry of the guaranties and release of the liquid funds by the banks.

The liquid funds are invested by the banks as fixed term deposits over the term of the bank guarantee issued. The respective interest income realized is passed on to TGE Gas Engineering GmbH as contractually agreed with the latter.

TGE Gas Engineering GmbH assigned the loan receivables to its shareholder, TGE Gasfin Investments S.A., Strassen, Luxembourg, on September 19, 2008. Since then, the loan has been reported under the item "Liabilities to shareholders".

32. Litigation risks

TGE companies are a party in various litigations. Pursuant to current assessment, none of the pending proceedings will have a material impact on the future net assets, financial position and results of operations of the Group. Where necessary, provisions for litigation costs have been set up in appropriate amounts.

33. Related party transactions

Related party transactions (entities)

TGE provides extensive services for related parties. The related parties of TGE Marine AG include Caledonia Investments plc, London, Great Britain, which holds 35.4% (previous year: 35.4%) of the subscribed capital of TGE Marine AG. 

In addition, TGE Gasfin S.A., Strassen, Luxembourg, holds 12.3% (previous year: 12.3%), TGE Gasfin GbR, Bonn, holds 1.2 % (previous year: 1.2%) and TGE Gasfin Investments S.A., Strassen, Luxembourg, holds 16.2% (previous year: 0.0%) of the subscribed capital of TGE Marine AG. Consequently, the Gasfin companies hold a total of 29.7% of the shares in TGE Marine AG, Bonn. In order to answer the question as to whether a related party exists in terms of IAS 24, the shares are added together and the companies are treated collectively as a related party. 

In addition, TGE Gas Engineering GmbH, Bonn, qualifies as a related party since it is an associated company of TGE Gasfin S.A., Strassen, Luxembourg, in terms of IAS 28.

Until June 30, 2008, two loan agreements existed between TGE and Caledonia Investments plc., London, Great Britain, which were utilized by TGE in the amount of TEUR 24,000. The loans carried annual interest of 12.5%. The loans including accumulated interest were repaid in full on July 1, 2008, November 27, 2008, and March 20, 2009. There are no other service relationships between TGE and Caledonia Investments plc., London, Great Britain. 

In accordance with an agreement concluded between TGE and TGE GasFin Investments S.A., Strassen, Luxembourg, on July 1, 2008, TGE GasFin Investments S.A. provides services to TGE within the framework of Onshore contracts which remained with TGE in the course of the spin-off of the Onshore segment. TGE GasFin S.A., in turn, concluded an agreement with TGE Gas Engineering GmbH, which, in its capacity as sub-contractor, provides the contractually agreed services.

On May 8, 2009, TGE GasFin Investments S.A. acquired the shares in TGE Gas Engineering GmbH for a purchase price of TEUR 11,081. The purchase price was paid in July 2008.

In accordance with a service agreement concluded by TGE and TGE Gas Engineering GmbH on January 2, 2008, various services within the framework of Onshore contracts that remained with TGE within the course of the Onshore spin-off as well as administrative services are performed for TGE. From July 1, 2008 onwards, services provided within the scope of Onshore project contracts are directly settled between TGE and TGE GasFin Investments S.A..

By contract of December 28, 2007, TGE Marine Gas Engineering GmbH rented certain office rooms from TGE Gas Engineering GmbH in a capacity as sub-tenant. The monthly rent amounts to TEUR 43, plus VAT. The sub-tenant contract is linked with the rental contract concluded by TGE Gas Engineering GmbH with the lessor, in terms of the tenancy period, amongst other things. Overall. the main rental contract is due to expire on October 31, 2012.

In addition, TGE and TGE Gas Engineering GmbH concluded a Supplement Agreement on May 6, 2008, which clarifies matters associated with the spin-off agreement concluded on December 10, 2007, in particular. Moreover, the agreement stipulates that TGE Gas Engineering GmbH exempts the TGE Group from expenses which are to be borne by TGE within the framework of contractual or statutory guarantee commitments.

The following table reflects the scope of service relationships with related parties in the past financial year and the balance sheet items as at June 30, 2009:

	Caledonia Investments plc		Gasfin S.A./GbR		TGE Gas Engineering GmbH		Total
in TEUR	6/30/09	6/30/08	6/30/09	6/30/08	6/30/09	6/30/08	6/30/09	6/30/08
Services provided	7	-	-	-	408	184	410	184
Purchased services	-	-	1,373	-	1,843	1,928	3,216	1,928
Trade receivables	-	-	-	-	-	-	-	-
Financial receivables	-	-	-	11,081	-	-	-	11,081
Other receivables	6	-	-	-	36	-	42	-
Other provisions	-	- 1,482	-	-	-	-	-	- 1,482
Trade payables	- 31	-	-	-	-	-	- 31	-
Financial liabilities	-	- 27,765	- 9,879	-	-	- 14,420	- 9,879	- 42,185
Other liabilities	-	-	-	-	-	-	-	-

The disclosed receivables from TGE Gasfin Investments S.A. as of June 30, 2008 concerned the purchase price receivable from the sale of shares in TGE Gas Engineering GmbH, Bonn. The purchase price was paid to TGE in July 2008. 

The liabilities to TGE Gasfin Investments S.A. mainly include liquid funds that are deposited with banks by TGE to provide collateral for bank guaranties concerning the Onshore segment. TGE retransfers the liquid funds to TGE Gasfin Investments S.A. when the underlying banking guarantee has expired. The pledged liquid funds are invested by the banks as fixed term deposits. The pertaining realized interest is credited to TGE Gasfin Investments S.A. . As of June 30, 2008 loan liabilities vis à vis TGE Gas Engineering GmbH were reported. Since TGE Gas Engineering GmbH assigned loan receivables to TGE Gasfin Investments S.A. in the financial year, the disclosure changed in comparison with the previous year.

Related party transactions (persons)

Related persons are the members of management who are directly or indirectly concerned with and responsible for the planning, management and monitoring of the Group's activities. 

The group of related persons comprises the former managing directors of TGE Holding GmbH as well as the present and former members of the managing board and advisory board of TGE Marine AG. The group of persons mentioned has direct and indirect shareholdings in TGE Marine AG amounting to a total of 38.7% (previous year: 17.6%) of the capital stock. The total of 38.7% in the current year includes, inter alia, a 29.71% stake held by the Gasfin companies in the subscribed capital. With respect to the service relationships between TGE and the Gasfin companies during the year, reference is made to the comments under Related party disclosures.

Except for current remuneration, the related parties did not receive benefits from the Group.

In the financial year, total remuneration of the groups mentioned amounted to:

 

	Managing board		Supervisory board
in TEUR	6/30/09	6/30/08	6/30/09	6/30/08
Current remuneration	1,049	1,029	143	72
Other receivables	1	1	-	-
	1,050	1,030	143	72

The purchased deliveries and services include additions to provisions for bonus payments in the amount of TEUR 200 (previous year: TEUR 207).

Due to a resolution of the shareholders' meeting held on August 23, 2007 to increase the capital stock of TGE Holding GmbH, Munich (legal predecessor of TGE Marine AG), by TEUR 20, a former member of the managing board of TGE Marine AG made an additional payment in the amount of TEUR 160 to other capital reserves in accordance with Section 272 (1) No. 4 HGB. 

No other transactions of the TGE Group with former or current managing board members or members of the supervisory board of the Company were recorded in the financial year and in the previous year.

Deliveries and services are usually made available to related parties on the basis of actual cost including an appropriate profit margin according to the arm's length principle. Deliveries and services are continuously purchased from related parties at similar conditions as they would apply to unrelated third parties.

34. Events after the balance sheet date

There were no reportable events after the balance sheet date.

35. Information in accordance with national provisions

Share ownership pursuant to Section 313 (2) and( 4) HGB 

 

 

No.		Company		Head office		Shareholder		Capital shares		Equity		Result
								%		TEUR		TEUR
(1)		TGE Marine AG		Bonn, Germany						62,806		18,950
(2)		TGE Marine Gas Engineering GmbH		Bonn, Germany		(1)		100		4,602		-	1)

______________________________

1) Following transfer of the result due to the exiting profit/loss transfer agreement concluded with TGE Marine AG, Bonn.

Exemption pursuant to Section 264 (3) HGB

In the current financial year, TGE Marine Gas Engineering GmbH, Bonn, has foregone the preparation of notes to the financial statements and a management report (Section 264 (1) HGB), an audit of the annual financial statements (Section 316 et seq., HGB), and disclosure of the annual financial statements (Section 325 et seq., HGB).

36. Approval of the consolidated financial statements

The consolidated financial statements as of June 30, 2008 were approved at the shareholders' meeting of December 10, 2008 of TGE Marine AG, Bonn.

On September 22, 2009, the managing board of TGE Marine AG agreed to submit the consolidated financial statements as of June 30, 2009 to the supervisory board. The supervisory board has the task of reviewing the consolidated financial statements, to report on this review to the general meeting and to approve the consolidated financial statements.

Bonn, September 22, 2009 

 

Dr. Manfred Küver	Ulrich Menninghaus	Dr. Klaus Gerdsmeyer	Steffen Schober
Chairman of the	Member of the	Member of the	Member of the
Managing Board of	Managing Bord of	Managing Bord of	Managing Bord of
TGE Marine AG	TGE Marine AG	TGE Marine AG	TGE Marine AG

ENDFR LTMFTMMMTBRL

---

Related Shares:

Generation Ess.